Exhibit 10.3

LOAN AND SECURITY AGREEMENT

DEKANIA INVESTORS, LLC

as Borrower

with

TD BANK, N.A.,

as Agent and Issuing Bank

and

THE FINANCIAL INSTITUTIONS

NOW OR HEREAFTER LISTED ON SCHEDULE A,

as Lenders

July 29, 2010

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TABLE OF CONTENTS

 

          Page  

SECTION 1. DEFINITIONS AND INTERPRETATION

     1   

1.1

  

Terms Defined

     1   

1.2

  

Other Capitalized Terms

     17   

1.3

  

Accounting Principles

     17   

1.4

  

Construction

     17   

SECTION 2. THE LOANS

     17   

2.1

  

Term Loan Facility - Description:

     17   

2.2

  

Letters of Credit-Description:

     18   

2.3

  

Reserved

     21   

2.4

  

Reserved

     21   

2.5

  

Advances and Payments

     22   

2.6

  

Interest:

     24   

2.7

  

Additional Interest Provisions:

     25   

2.8

  

Fees

     26   

2.9

  

Prepayments

     26   

2.10

  

Funding Indemnity

     27   

2.11

  

Use of Proceeds

     27   

2.12

  

Pro Rata Treatment and Payments

     27   

2.13

  

Inability to Determine Interest Rate

     29   

2.14

  

Illegality

     29   

2.15

  

Requirements of Law

     30   

2.16

  

Taxes

     31   

2.17

  

Replacement of Lenders

     33   

SECTION 3. COLLATERAL

     34   

3.1

  

Description

     34   

3.2

  

Lien Documents

     35   

3.3

  

Other Actions

     35   

3.4

  

Searches

     36   

3.5

  

[Reserved].

     36   

3.6

  

Filing Security Agreement

     36   

3.7

  

Power of Attorney

     36   

SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES

     36   

4.1

  

Resolutions, Opinions, and Other Documents

     36   

4.2

  

Absence of Certain Events

     37   

4.3

  

Warranties and Representations at Closing

     38   

4.4

  

Compliance with this Agreement

     38   

4.5

  

Officer’s Certificate

     38   

4.6

  

Closing

     38   

4.7

  

Waiver of Rights

     38   

4.8

  

Conditions for Future Advances

     38   

4.9

  

Existing Notes

     39   

 

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SECTION 5. REPRESENTATIONS AND WARRANTIES

     39   

5.1

  

Corporate Organization and Validity:

     39   

5.2

  

Places of Business

     40   

5.3

  

Pending Litigation

     40   

5.4

  

Title to Properties

     40   

5.5

  

Governmental Consent

     40   

5.6

  

Taxes

     40   

5.7

  

Financial Statements

     40   

5.8

  

Full Disclosure

     41   

5.9

  

Subsidiaries

     41   

5.10

  

Investments, Guarantees, Contracts, etc.

     41   

5.11

  

Government Regulations, etc.

     41   

5.12

  

Business Interruptions

     42   

5.13

  

Names and Intellectual Property:

     42   

5.14

  

Other Associations:

     43   

5.15

  

Environmental Matters

     43   

5.16

  

Regulation O

     44   

5.17

  

Capital Stock

     44   

5.18

  

Solvency

     44   

5.19

  

Perfection and Priority

     44   

5.20

  

Commercial Tort Claims

     45   

5.21

  

Letter of Credit Rights

     45   

5.22

  

Deposit Accounts

     45   

5.23

  

Anti-Terrorism Laws:

     45   

5.24

  

Investment Company Act

     46   

5.25

  

Transaction Documents

     46   

SECTION 6. BORROWER’S AFFIRMATIVE COVENANTS

     46   

6.1

  

Payment of Taxes and Claims

     46   

6.2

  

Maintenance of Properties and Corporate Existence:

     46   

6.3

  

Business Conducted

     47   

6.4

  

Litigation

     48   

6.5

  

Issue Taxes

     48   

6.6

  

Bank Accounts

     48   

6.7

  

Employee Benefit Plans

     48   

6.8

  

Financial Covenants:

     48   

6.9

  

Financial and Business Information

     49   

6.10

  

Officers’ Certificates

     50   

6.11

  

Audits and Inspection

     51   

6.12

  

Reserved

     51   

6.13

  

Information to Participant

     51   

6.14

  

Material Adverse Developments

     51   

6.15

  

Places of Business

     51   

6.16

  

Commercial Tort Claims

     51   

6.17

  

Letter of Credit Rights

     52   

6.18

  

Pledged Collateral

     52   

6.19

  

Management Agreements

     52   

6.20

  

Sponsored CDO Equity Interests or Other Capital Stock

     52   

6.21

  

Post Closing Requirements

     52   

 

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SECTION 7. BORROWER’S NEGATIVE COVENANTS:

     52   

7.1

  

Asset Sales, Merger, Consolidation, Dissolution or Liquidation

     52   

7.2

  

Acquisitions

     53   

7.3

  

Liens and Encumbrances

     53   

7.4

  

Transactions With Affiliates or Subsidiaries

     53   

7.5

  

Guarantees

     53   

7.6

  

Distributions and Bonuses

     54   

7.7

  

Other Indebtedness

     54   

7.8

  

Loans and Investments

     54   

7.9

  

Use of Lenders’ Name

     54   

7.10

  

Miscellaneous Covenants

     54   

7.11

  

Jurisdiction of Organization

     55   

7.12

  

Organization Documents

     55   

SECTION 8. DEFAULT

     55   

8.1

  

Events of Default

     55   

8.2

  

Cure

     57   

8.3

  

Rights and Remedies on Default

     57   

8.4

  

Nature of Remedies

     58   

8.5

  

Set-Off

     59   

SECTION 9. AGENT

     59   

9.1

  

Appointment and Authority

     59   

9.2

  

Rights as a Lender

     59   

9.3

  

Exculpatory Provisions

     60   

9.4

  

Reliance by Agent

     60   

9.5

  

Delegation of Duties

     61   

9.6

  

Resignation of Agent

     61   

9.7

  

Non-Reliance on Agent and Other Lenders

     61   

9.8

  

Reserved:

     62   

9.9

  

Agent May File Proofs of Claim

     62   

9.10

  

Collateral and Guaranty Matters

     62   

9.11

  

Action on Instructions of Lenders

     63   

9.12

  

Designation of Additional Agents

     63   

SECTION 10. MISCELLANEOUS

     63   

10.1

  

GOVERNING LAW

     63   

10.2

  

Integrated Agreement

     63   

10.3

  

Waiver

     64   

10.4

  

Expenses; Indemnity

     64   

10.5

  

Time

     65   

10.6

  

Consequential Damages

     65   

10.7

  

Brokerage

     65   

10.8

  

Notices

     65   

10.9

  

Headings

     67   

10.10

  

Survival

     67   

10.11

  

Amendments

     67   

10.12

  

Successors and Assigns:

     68   

10.13

  

Confidentiality

     71   

 

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10.14

  

Duplicate Originals

     71   

10.15

  

Modification

     72   

10.16

  

Signatories

     72   

10.17

  

Third Parties

     72   

10.18

  

Discharge of Taxes, Borrowers’ Obligations, Etc.

     72   

10.19

  

Withholding and Other Tax Liabilities

     72   

10.20

  

Consent to Jurisdiction

     73   

10.21

  

Waiver of Jury Trial

     73   

10.22

  

Termination

     73   

10.23

  

Patriot Act Notice

     73   

10.24

  

Nonliability of Lenders

     73   

 

iv

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EXHIBITS AND SCHEDULES

 

Exhibit A

   —   

Form of Assignment and Assumption Agreement

Exhibit B

   —   

Form of Authorization Certificate

Exhibit C

   —   

Form of Conversion/Extension

Exhibit D

   —   

Form of Advance Request

Exhibit E

   —   

Form of Compliance Certificate

Schedule A

   —   

Schedule of Lenders

Schedule B

   —   

Address of Lenders

Schedule C

   —   

Excluded Management Agreements

Schedule D

   —   

Management Agreements

Schedule E

   —   

Permanent Investments

Schedule F

   —   

Subsequent Assigned CDO Agreements

Schedule 1.1(a)

   —   

Permitted Indebtedness

Schedule 1.1(b)

   —   

Existing Liens and Claims

Schedule 5.1

   —   

Borrower’s States of Qualifications

Schedule 5.2

   —   

Places of Business

Schedule 5.3

   —   

Judgments, Proceedings, Litigation and Orders

Schedule 5.7

   —   

Federal Tax Identification Numbers and Organizational Identification Numbers

Schedule 5.9

   —   

Subsidiary and Affiliates

Schedule 5.10(a)

   —   

Existing Guaranties, Investments and Borrowings

Schedule 5.10(b)

   —   

Leases

Schedule 5.11(c)

   —   

Employee Benefit Plans

Schedule 5.13(a)

   —   

Schedule of Names

Schedule 5.13(b)

   —   

Trademarks, Patents and Copyrights

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Schedule 5.13(c)

   —   

Trademarks, Patents and Copyrights Required to Conduct Business

Schedule 5.14(a)

   —   

Other Associations

Schedule 5.14(b)

   —   

Sponsored CDO Offerings

Schedule 5.15

   —   

Environmental Disclosure

Schedule 5.17

   —   

Capital Stock

Schedule 5.19

   —   

Perfection

Schedule 5.20

   —   

Commercial Tort Claims

Schedule 5.21

   —   

Letter of Credit Rights

Schedule 6.21

   —   

Post Closing Matters

Schedule 7.4(a)

   —   

Transactions with Affiliate and Subsidiaries

 

ii

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LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement (“Agreement”) is dated as of the 29th day of
July, 2010, by and among Dekania Investors, LLC, a Delaware limited liability
company (“Borrower”), TD Bank, N.A., a national banking association, in its
capacity as agent (“Agent”), TD Bank, N.A., in its capacity as issuing bank
(“Issuing Bank”) and each of the financial institutions which are now or
hereafter identified as Lenders on Schedule A attached hereto and made a part of
this Agreement (as such Schedule may be amended, modified or replaced from time
to time), (each such financial institution, individually each being a “Lender”
and collectively all being “Lenders”).

BACKGROUND

A. Borrower desires to establish financing with Lenders to permit its
uninterrupted and continuous business operations. Lenders are willing to make
loans and grant extensions of credit to Borrower under the terms and provisions
hereinafter set forth.

B. The parties desire to define the terms and conditions of their relationship
and reduce them to writing.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

SECTION 1. DEFINITIONS AND INTERPRETATION

1.1 Terms Defined: As used in this Agreement, the following terms have the
following respective meanings:

Acceptance Date – Section 10.12.

Additional Agent – Section 9.12.

Adjusted Base Rate – The sum of the Base Rate plus two and three quarters
percent (2.75%).

Adjusted LIBOR Rate – For the LIBOR Interest Period for each LIBOR Rate Loan
comprising part of the same borrowing (including conversions, extensions and
renewals), a per annum interest rate equal to the greater of (a) one and one
half percent (1.5%) or (b) as determined pursuant to the following formula:

 

Adjusted LIBOR Rate =   London Interbank Offered Rate   1 – LIBOR Reserve
Percentage

Advance(s) – Any monies advanced or credit extended to Borrower by any Lender
under the Term Loan Facility, including without limitation cash advances and
Letters of Credit.

Advance Request – Section 2.5(b)(i).

 

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Affiliate – With respect to any Person, (i) any Person which, directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such Person, or (ii) any Person who is a director
or officer (a) of such Person or (b) of any Subsidiary of such Person. For
purposes of this definition, control of a Person shall mean the power, direct or
indirect, (1) to vote 10% or more of the Capital Stock having ordinary voting
power for the election of directors (or comparable equivalent) of such Person,
or (2) to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise. Control may be by ownership, contract,
or otherwise.

Agreement – This Loan and Security Agreement, as it may hereafter be amended,
supplemented or replaced from time to time.

Anti-Terrorism Laws – Any statute, treaty, law (including common law),
ordinance, regulation, rule, order, opinion, release, injunction, writ, decree
or award of any Governmental Authority relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act.

Approved Fund – Any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course of its business and that is administered by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

Asset Sale – The sale, transfer, lease, license or other disposition, by
Borrower or any Guarantor to any Person other than Borrower, or any Guarantor,
of any Property now owned or hereafter acquired, of any nature whatsoever in any
transaction or series of related transactions; provided, however, that an Asset
Sale shall not include the sale of the Assigned CDO Agreements (as defined in
the Master Agreement), pursuant to the Master Agreement. An Asset Sale, includes
without limitation, a division.

Assignment Agreement – An assignment and assumption agreement entered into by an
assigning Lender and accepted by Agent, in accordance with Section 10.12, in the
form of Exhibit A attached hereto.

ATP – ATP Management LLC, a Delaware limited liability company.

Authorized Officer – Any officer (or comparable equivalent) of Borrower
authorized by specific resolution of Borrower to request Advances or execute
Quarterly Compliance Certificates as set forth in the authorization certificate
delivered to Agent substantially in the form of Exhibit “B” attached hereto.

Bankruptcy Code – The United States Bankruptcy Code, 11 U.S.C. §101 et. seq. as
amended from time to time.

Base Rate – The highest of (i) “Prime Rate” of interest as published in the
“Money Rates” Section of The Wall Street Journal on the applicable date (or the
highest “Prime Rate” if more than one is published) as such rate may change from
time to time, (ii) the Federal Funds Rate plus fifty (50) basis points, and
(iii) the Daily LIBOR Rate plus one hundred (100) basis points. If The Wall
Street Journal ceases to be published or goes on strike or is otherwise not
published, Agent

 

2

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may use a similar published prime or base rate. The Base Rate is not necessarily
the lowest or best rate of interest offered by Agent or any Lender to any
borrower or class of borrowers.

Base Rate Loans – That portion of the Loans (including any unreimbursed draws on
any Letter of Credit), accruing interest based on a rate determined by reference
to the Base Rate.

Blocked Person – Section 5.23.

Broker Entity – Collectively, Cohen & Company Securities LLC, a Delaware limited
liability company and Fairfax I. S. (US) LLC, a Delaware limited liability
company.

Business Day – (i) Any day that is not a Saturday or Sunday or day on which
Agent or any Lender is required or permitted to close in Philadelphia,
Pennsylvania or (ii) with respect to any LIBOR Rate Loan, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in dollar deposits in the London interbank market.

Capital Expenditures – For any period, the aggregate of all expenditures
(including that portion of Capitalized Lease Obligations attributable to that
period) made in respect of the purchase, construction or other acquisition of
fixed or capital assets, determined in accordance with GAAP.

Capital Stock – Any and all shares, equity interests, or other equivalents
(however designated) of capital stock of a corporation, any and all other
ownership interests in a Person (other than a corporation) and any and all
warrants or options to purchase any of the foregoing.

Capitalized Lease Obligations – Any Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

CCFM – Cohen & Company Financial Management, LLC, a Delaware limited liability
company.

Change of Control – The result caused by the occurrence of any event which
results in (i) Parent owning (beneficially, legally, or otherwise) less than one
hundred percent (100%) of the voting power of the issued and outstanding Capital
Stock of Borrower entitled to vote, and with respect to any Person included in
the Dekania Group, the result caused by Parent owning, directly or indirectly,
less than fifty-one percent (51%) of any class of the issued and outstanding
Capital Stock of such Person entitled to vote or (ii) with respect to Parent,
any Person or group of Persons (other than Cohen & Company, Daniel G. Cohen, any
Affiliate of Daniel G. Cohen, or trusts for the benefit of Daniel G. Cohen or
one or more of his family members) obtaining (beneficially, legally or
otherwise) more than fifty percent (50%) of the voting power of issued and
outstanding Capital Stock of Parent entitled to vote.

Closing – Section 4.6.

Closing Date – Section 4.6.

Code – The Internal Revenue Code of 1986, as amended from time to time.

 

3

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Cohen & Company – Cohen & Company Inc., a Maryland corporation.

Cohen Securities Funding – Cohen Securities Funding LLC, a Delaware limited
liability company.

Collateral – All of the Property and interests in Property described in
Section 3.1 of this Agreement and in any Security Document, and all other
Property and interests in Property that now or hereafter secure payment of the
Obligations and satisfaction by Borrower of all covenants and undertakings
contained in this Agreement and the other Loan Documents.

Collateral Pledge Agreement – That certain Collateral Pledge Agreement executed
by Parent, Borrower and certain other Guarantors in favor of Agent, on or prior
to the Closing Date, as the same may be amended, modified, confirmed,
supplemented or restated from time to time.

Collateralized Debt Offering – An offering, by a special purpose entity, of
interests in secured debt obligations, and other investments permitted under the
organizational and operating documents of such entity, which interests are sold
to third party investors.

Consolidated Amortization Expense – For any period, the aggregate consolidated
amount of amortization expense of the Dekania Group, as determined in accordance
with GAAP.

Consolidated Cash Flow – For any period, the Dekania Group’s Consolidated Net
Income (or deficit) plus (i) Consolidated Interest Expense, plus
(ii) Consolidated Depreciation Expense, plus (iii) Consolidated Amortization
Expense, plus (iv) Consolidated Tax Expense, plus (v) all other non-cash
expenses (including non-cash stock compensation), minus (vi) extraordinary
gains, plus (vii) Non-Controlling Interest Expense, minus (viii) non-cash
deferred sub-advisory revenue plus (ix) the release of restricted cash from the
escrow account established under the Escrow Agreement, all as determined in
accordance with GAAP.

Consolidated Depreciation Expense – For any period, the aggregate, consolidated
amount of depreciation expense of the Dekania Group, as determined in accordance
with GAAP.

Consolidated Funded Debt – At any time (without duplication), the aggregate
principal amount of interest bearing Indebtedness of the Dekania Group on a
consolidated basis, as determined in accordance with GAAP.

Consolidated Interest Expense – For any period (without duplication), the
aggregate, consolidated amount of interest expense required to be paid or
accrued during such period on all Indebtedness of the Dekania Group outstanding
during all or any part of such period, as determined in accordance with GAAP.

Consolidated Net Income – For any period, consolidated net income after taxes of
the Dekania Group as such would appear on Borrower’s consolidated statement of
income, prepared in accordance with GAAP

Consolidated Net Worth – At any time, the sum of the amount by which all of
(i) the Dekania Group’s consolidated assets (excluding assets attributable to
Non-Consolidation Entities),

 

4

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plus Subordinated Debt, exceed all of (ii) Consolidated Total Liabilities, all
as would be shown on the Dekania Group’s consolidated balance sheet prepared in
accordance with GAAP.

Consolidated Tax Expense – For any period, the aggregate consolidated amount of
income tax expense of the Dekania Group, as determined in accordance with GAAP

Consolidated Total Liabilities – At any time, the aggregate total amount of the
Dekania Group’s consolidated liabilities as would be shown on the Dekania
Group’s consolidated balance sheet prepared in accordance with GAAP.

Daily LIBOR Rate – For any day, the rate per annum determined by Agent by
dividing (x) the Published Rate by (y) a number equal to 1.00 minus the LIBOR
Reserve Percentage.

Debt Payments – For any period, the sum of scheduled principal payments on
account of the Dekania Group’s long term Indebtedness for such period then ended
plus Consolidated Interest Expense.

Debt Service Coverage Ratio – For each period of four full fiscal quarters ended
on the last day of each fiscal quarter, the ratio of (i) Consolidated Cash Flow
to (ii) Debt Payments; all as determined in accordance with GAAP as of the last
day of each such fiscal quarter; provided however that: (I)(A) for the test
period ending September 30, 2010, Debt Payments shall be equal to Debt Payments
for the fiscal quarter ending September 30, 2010 multiplied by 4, (B) for the
test period ending on December 31, 2010, Debt Payments shall be equal to the sum
of Debt Payments for the two consecutive fiscal quarters ending December 31,
2010 multiplied by 2, and (C) for the test period ending March 31, 2011, Debt
Payments shall be equal to the sum of Debt Payments for the three consecutive
fiscal quarters ending March 31, 2011 multiplied by one and one third (1-1/3)
and (II)(A) for the test period ending September 30, 2010, Consolidated Cash
Flow shall be equal to Consolidated Cash Flow for the fiscal quarter ending
September 30, 2010, multiplied by 4, (B) for the test period ending December 31,
2010, Consolidated Cash Flow shall be equal to Consolidated Cash Flow for the
two consecutive fiscal quarters ending on December 31, 2010 multiplied by 2, and
(3) for the test period ending on March 31, 2011, Consolidated Cash Flow shall
be equal to Consolidated Cash Flow for the three consecutive fiscal quarters
ending on March 31, 2011 multiplied by one and one third (1-1/3).

Deep Value – Collectively, Strategos Deep Value Mortgage Fund LP and Strategos
Deep Value (Offshore) Mortgage Fund.

Default – An event which with the passage of time, the giving of notice, or both
would constitute an Event of Default.

Default Rate – Section 2.7(b).

Dekania Group – Collectively, Borrower, CCFM, Dekania Capital Management, LLC, a
Delaware limited liability company, CIRA ECM, LLC, a Delaware limited liability
company and any other Person that, subject to the limitations of this Agreement,
becomes a Subsidiary of Borrower.

 

5

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Disqualified Stock – Any Capital Stock which by its terms (or by terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event (i) matures or is mandatorily redeemable for any
reason, (ii) is convertible or exchangeable for Indebtedness or Capital Stock
that meets the requirements of clauses (i) and (ii), or (iii) is redeemable at
the option of the holder thereof, in whole or in part in each case on or prior
to the Term Loan Maturity Date.

Distribution – (i) Cash dividends or other cash distributions on any now or
hereafter outstanding Capital Stock of any Person included in the Dekania Group;
(ii) the redemption, repurchase, defeasance or acquisition of such Capital Stock
or of warrants, rights or other options to purchase such Capital Stock; and
(iii) any loans or advances (other than salaries), to any shareholder(s),
partner(s), or member(s) of Borrower or any Guarantor; provided, however, a
Distribution shall not include cash dividends or other cash distributions on any
now or hereafter outstanding Capital Stock of any Person included in the Dekania
Group or loans or advances, to any shareholder(s), partner(s), or member(s) of
Borrower, or any Gurantor or any other Subsidiary of the foregoing, that are
comprised of (A) cash proceeds received on a Closing Date (as defined in the
Master Agreement) attributable to the sale of an Assigned CDO Agreement (as
defined in the Master Agreement), which for the Closing Date (as defined in the
Master Agreement) on or about the date of this Agreement was $3,158,771.81,
(B) the $1,891,421.21 received by any such Person from the Service Fees (as
defined in the Service Agreement) payable pursuant to Section 3(a) of the
Services Agreement, (C) amounts received by any such Person from the Service
Fees (as defined in the Service Agreement) payable pursuant to Section 3(b) of
the Service Agreement, or (D) amounts received by any such Person in connection
with the Loan Agreement.

Draw Down Period – The period commencing on the Closing Date and ending on
September 30, 2010.

Environmental Laws – Any and all Federal, foreign, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees and any
and all common law requirements, rules and bases of liability regulating,
relating to or imposing liability or standards of conduct concerning pollution,
protection of the environment, or the impact of pollutants, contaminants or
toxic or hazardous substances on human health or the environment, as now or may
at any time hereafter be in effect.

ERISA – The Employee Retirement Income Security Act of 1974, as the same may be
amended, from time to time.

Escrow Agreement – That certain Escrow Agreement among ATP, CCFM and TD Bank,
N.A. dated July 29, 2010 and as amended from time to time.

Event of Default – Section 8.1.

Excluded Management Fees – Fees received by Borrower or a Guarantor under any of
the Management Agreements set forth on Schedule C attached hereto, as such
Schedule C may be amended, supplemented, replaced or restated from time to time,
which fees are to be paid to a sub-advisor or other Person in accordance with
agreements entered into in connection with the Management Agreements set forth
on Schedule C attached hereto.

 

6

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Excluded Property – 35% of total foreign Subsidiary voting stock of any foreign
Subsidiary.

Executive Order No. 13224 – The Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.

Existing Loan Agreement – That certain Amended and Restated Loan and Security
Agreement dated as of June 1, 2009 among Cohen Brothers, LLC, TD Bank, N.A. and
the financial institutions party thereto from time to time.

Existing Letters of Credit – Those certain Letters of Credit issued by Issuing
Bank (i) dated September 5, 2007 bearing L/C Number 136192070362 with a
beneficiary of 181 West Madison CF Borrower LLC in the original amount of
$50,000 and (ii) dated November 25, 2009 bearing L/C Number 20003379 with a
beneficiary of GSME Acquisition Partners I in the amount of $1,242,000.

Expenses – Section 10.4.

Fed Funds Rate – For any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day on the day next succeeding
such day (or if such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York, or if such rate is not so
published for any day which is a Business Day, the average of quotations for
such day on such transactions received by Agent from three Federal funds brokers
of recognized standing selected by Agent.

Fin 46 Entity – Any entity that is required pursuant to the requirements of the
Financial Accounting Standards Board’s Interpretation Number 46 to be
consolidated in the financial statements of Parent.

Fixed Charge Coverage Ratio – For each period of four full fiscal quarters ended
on the last day of each fiscal quarter, the ratio of (i) Consolidated Cash Flow
to (ii) the sum of Debt Payments, plus Distributions made by the Dekania Group
(net of cash contributions by Parent or Affiliates of Borrower to a Person
included in the Dekania Group) all as determined in accordance with GAAP on the
last day of each such fiscal quarter; provided however that: (I)(A) for the test
period ending September 30, 2010, Debt Payments plus Distributions shall be
equal to Debt Payments for the fiscal quarter ending September 30, 2010
multiplied by 4 plus Distributions for the fiscal quarter ending September 30,
2010 (B) for the test period ending on December 31, 2010, Debt Payments plus
Distributions shall be equal to the sum of Debt Payments for the two consecutive
fiscal quarters ending December 31, 2010 multiplied by 2 plus Distributions for
the two consecutive fiscal quarters ending December 31, 2010 and (C) for the
test period ending March 31, 2011, Debt Payments plus Distributions shall be
equal to the sum of Debt Payments for the three consecutive fiscal quarters
ending March 31, 2011 multiplied by one and one third (1-1/3) plus Distributions
for the three consecutive fiscal quarters ending March 31, 2011 and (II)(A) for
the test period ending September 30, 2010, Consolidated Cash Flow shall be equal
to Consolidated Cash Flow for the fiscal quarter ending September 30, 2010,
multiplied by 4, (B) for the test period ending

 

7

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December 31, 2010, Consolidated Cash Flow shall be equal to Consolidated Cash
Flow for the two consecutive fiscal quarters ending on December 31, 2010
multiplied by 2, and (3) for the test period ending on March 31, 2011,
Consolidated Cash Flow shall be equal to Consolidated Cash Flow for the three
consecutive fiscal quarters ending on March 31, 2011 multiplied by one and one
third (1-1/3).

Fronting Fee – Section 2.8(b)(ii).

GAAP – Generally accepted accounting principles as in effect on the Closing Date
applied in a manner consistent with the most recent audited financial statements
of Cohen & Company furnished to Lender and described in Section 5.7 herein,
subject, however, in the case of determination of compliance with the financial
covenants in Section 6.8, to the provisions of Section 1.3.

Government Acts – Section 2.2.

Government Authority – Any federal, state or local government or political
subdivision, or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury, or
arbitration.

Guarantors – Collectively, Parent and each Subsidiary Guarantor.

Guarantor Security Agreement – That certain security agreement executed by each
Guarantor in favor of Agent, dated on or prior to the Closing Date, as the same
may be amended, modified, confirmed, supplemented or restated from time to time.

Hazardous Substances – Any substances defined or designated as hazardous or
toxic waste, hazardous or toxic material, hazardous or toxic substance or
similar term, under any Environmental Law.

Hedging Agreements – Any Interest Hedging Instrument or any other interest rate
protection agreement, foreign currency exchange agreement, commodity purchase or
option agreement, or any other interest rate hedging device or swap agreement
(as defined in 11 U.S.C. § 101 et. seq.).

Indebtedness – Of any Person at any date, without duplication, (i) all
indebtedness of such Person for borrowed money (including with respect to
Borrower, the Obligations) or for the deferred purchase price of property or
services (other than current trade liabilities and other accruals incurred in
the ordinary course of business and payable in accordance with customary
practices), (ii) any other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument, (iii) all Capitalized Lease
Obligations of such Person, (iv) the face amount of all letters of credit
(including the Letters of Credit), issued for the account of such Person and all
drafts drawn thereunder, (v) all obligations of other Persons described in this
definition of Indebtedness which such Person has guaranteed (other than
endorsements of instruments), (vi) Disqualified Stock, (vii) all obligations of
such Person under Hedging Agreements (provided that the amount of such
obligations to be included in Indebtedness shall be equal to the amount payable
by such Person after giving effect to all legally enforceable netting
agreements, if such Hedging Agreements were terminated on such date), and
(viii) all liabilities secured by any Lien on any property owned by such

 

8

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Person even though such Person has not assumed or otherwise become liable for
the payment thereof.

Information – All information received from Borrower or any Guarantor relating
to Borrower, any Guarantor or any of their respective businesses, other than any
such information that is available to Agent, any Lender or Issuing Bank on a
non-confidential basis prior to disclosure by Borrower or any Guarantor,
provided that, in the case of information received from Borrower or any
Guarantor after the date of this Agreement, such information is clearly
identified at the time of delivery as confidential.

Interest Hedging Instrument – Any documentation evidencing any interest rate
swap, interest “cap” or “collar” or any other interest rate hedging device or
swap agreement (as defined in 11 U.S.C. § 101 et. seq.) between Borrower or any
Guarantor and a Lender (or any Affiliate of a Lender).

IRS – Internal Revenue Service.

Issuing Bank – TD Bank, N.A.

L/C Fees – Section 2.8(b)(i).

L/C Sublimit – At any time, an amount not to exceed $1,300,000.

Letter of Credit – Those certain stand-by letters of credit (as amended,
supplemented, replaced or restated from time to time) issued from time to time
pursuant to Section 2.2 of this Agreement, including the Existing Letters of
Credit.

Letter of Credit Documents – Any Letter of Credit, any amendment thereto, any
documents delivered in connection therewith, any application therefor, or any
other documents (all in form and substance reasonably satisfactory to Issuing
Bank), governing or providing for (i) the rights and obligations on the parties
concerned or at risk, or (ii) any collateral security for such obligations.

Leverage Ratio – At any time, the ratio of the Dekania Group’s (i) Consolidated
Funded Debt less Subordinated Debt, to (ii) Consolidated Cash Flow for each
period of four full fiscal quarters ended on the last day of each fiscal
quarter; provided however that: (I) for the test period ending September 30,
2010, Consolidated Cash Flow shall be equal to Consolidated Cash Flow for the
fiscal quarter ending September 30, 2010 multiplied by 4, (II) for the test
period ending on December 31, 2010, Consolidated Cash Flow shall be equal to
Consolidated Cash Flow for the two consecutive fiscal quarters ending
December 31, 2010 multiplied by 2, and (III) for the test period ending
March 31, 2011, Consolidated Cash Flow shall be equal to Consolidated Cash Flow
for the three consecutive fiscal quarters ending March 31, 2011 multiplied by
one and one third (1-1/3).

LIBOR Interest Period – As to LIBOR Rate Loans, a period of one month, two
months or three months, as selected by Borrower pursuant to the terms of this
Agreement (including continuations and conversions thereof); provided however,
(i) if any LIBOR Interest Period would end on a day which is not a Business Day,
such LIBOR Interest Period shall be extended to the next

 

9

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succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (ii) no LIBOR Interest Period shall extend beyond the Term Loan Maturity
Date, and (iii) any LIBOR Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
LIBOR Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such LIBOR Interest Period.

LIBOR Rate – The sum of Adjusted LIBOR Rate plus four and one half percent
(4.50%).

LIBOR Rate Loans – That portion(s) of the Loans accruing interest based on a
rate determined by reference to the Adjusted LIBOR Rate.

LIBOR Reserve Percentage – For any day, that percentage (expressed as a decimal)
which is in effect from time to time under Regulation D, as such regulation may
be amended from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any other
category of liabilities that includes deposits by reference to which the
interest rate of LIBOR Rate Loans is determined), whether or not a Lender has
any Eurocurrency liabilities subject to such reserve requirement at that time.
LIBOR Rate Loans shall be deemed to constitute Eurocurrency liabilities and as
such shall be deemed subject to reserve requirements without benefits of credits
for proration, exceptions or offsets that may be available from time to time to
a Lender. The Adjusted LIBOR Rate shall be adjusted automatically on and as of
the effective date of any change in the LIBOR Reserve Percentage.

Lien – Any interest of any kind or nature in property securing an obligation
owed to, or a claim of any kind or nature in Property by, a Person other than
the owner of the Property, whether such interest is based on the common law,
statute, regulation or contract, and including, but not limited to, a security
interest or lien arising from a mortgage, encumbrance, pledge, conditional sale
or trust receipt, a capitalized lease, consignment or bailment for security
purposes, a trust, or an assignment. For the purposes of this Agreement,
Borrower or any Guarantor (as applicable) shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.

Loans – Collectively, the unpaid balance of cash Advances under the Term Loan
Facility which may be Base Rate Loans or LIBOR Rate Loans and any unreimbursed
draws under any Letter of Credit.

Loan Documents – Collectively, this Agreement, the Notes, the Security
Documents, the Letter of Credit Documents, the Perfection Certificate, the
Notice Letters, and all agreements, instruments and documents executed and/or
delivered from time to time pursuant to this Agreement or in connection
therewith, as amended, modified, confirmed, supplemented, or restated from time
to time.

 

10

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London Interbank Offered Rate – With respect to any LIBOR Rate Loan for the
LIBOR Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the British
Bankers Association LIBOR Rate (“BBA LIBOR”) as published by Bloomberg (or such
other commercially available source providing quotations of BBA LIBOR as
designated by Agent from time to time) at approximately 11:00 A.M. (London time)
2 Business Days prior to the first day of such LIBOR Interest Period for a term
comparable to such LIBOR Interest Period; provided however, if more than one BBA
LIBOR Rate is specified, the applicable rate shall be the arithmetic mean of all
such rates. If, for any reason, such rate is not available, the term London
Interbank Offered Rate shall mean, with respect to any LIBOR Rate Loan for the
LIBOR Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Agent
to be the average rates per annum at which deposits in dollars are offered for
such LIBOR Interest Period to major banks in the London interbank market in
London, England at approximately 11:00 A.M. (London time) 2 Business Days prior
to the first day of such LIBOR Interest Period for a term comparable to such
LIBOR Interest Period.

Management Agreements – Collectively, those certain agreements set forth on
Schedule D attached hereto, as such Schedule may be amended, supplemented,
replaced or restated from time to time and any other collateral management
agreement (whether now existing or hereafter created or acquired) pursuant to
which Borrower or a Guarantor shall serve as collateral manager in connection
with a Collateralized Debt Offering, a warehouse offering, a hedge fund or any
other transaction.

Master Agreement. That certain Master Transaction Agreement among CCFM, Cohen &
Company and ATP dated as of July 29, 2010 and as amended from time to time.

Material Adverse Effect – A material adverse effect with respect to (i) the
business, assets, properties, financial condition, stockholders’ equity,
contingent liabilities, or results of operations of Borrower or Borrower and all
Guarantors on a consolidated basis, or (ii) Borrower’s ability to pay the
Obligations in accordance with the terms hereof, or (iii) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights and remedies of Agent, Issuing Bank or any Lender hereunder or
thereunder.

Net Cash Proceeds – Section 2.9(d).

Non-Consolidation Entities – Collectively, the Fin 46 Entities.

Non-Controlling Interest Expense – For any period, the amount of any
non-controlling interest expense as shown on Borrower’s statement of income as
determined in accordance with GAAP, that is deducted in the calculation of
Consolidated Net Income for such period.

Notes – Collectively, the Term Loan Notes.

Notice – Section 10.8.

Notice Letter – Each Payment Instruction Letter in the form attached to the
Guarantor Security Agreement as Exhibit “A”, which has been or will be issued by
each applicable Guarantor

 

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and delivered to, and acknowledged by, the applicable trustee under the
indenture related to the applicable Management Agreement.

Notice of Conversion/Extension – A written notice of conversion of a LIBOR Rate
Loan to a Base Rate Loan, or of a Base Rate Loan to a LIBOR Rate Loan or
extension of a LIBOR Rate Loan, in each case substantially in the form of
Exhibit “C” attached hereto.

Obligations – All existing and future debts, liabilities and obligations of
every kind or nature at any time owing by Borrower or any Guarantor to Lenders,
Issuing Bank or Agent whether under this Agreement or any other Loan Document,
whether joint or several, related or unrelated, primary or secondary, matured or
contingent, due or to become due (including debts, liabilities and obligations
obtained by assignment), and whether principal, interest, fees, indemnification
obligations hereunder or Expenses (specifically including interest accruing
after the commencement of any bankruptcy, insolvency or similar proceeding with
respect to Borrower, whether or not a claim for such post-commencement interest
is allowed), including, without limitation, debts, liabilities and obligations
in respect of the Term Loan Facility, Reimbursement Obligations and any
extensions, modifications, substitutions, increases and renewals thereof; any
amount payable by Borrower or any Guarantor pursuant to an Interest Hedging
Instrument; the payment of all amounts advanced by Agent on behalf of any
Secured Party to preserve, protect and enforce rights hereunder and in the
Collateral; and all Expenses. Without limiting the generality of the foregoing,
Obligations shall include any other debts, liabilities or obligations owing to
Agent in connection with any lock box, cash management, or other services
(including electronic funds transfers or automated clearing house transactions)
provided by Agent to Borrower.

Overadvance – Section 2.1(a).

Parent – Cohen Brothers, LLC, a Delaware limited liability company.

Participant – Section 10.12.

Participant Register – Section 10.12.

PBGC – The Pension Benefit Guaranty Corporation.

Perfection Certificate – The Perfection Certificate provided by Borrower and
each Guarantor to Agent on or prior to the Closing Date in form and substance
satisfactory to Agent.

Permanent Investments – Those certain assets or investments owned by Borrower or
a Guarantor and which are set forth on Schedule E attached hereto.

Permitted Indebtedness – (i) Indebtedness to Agent, Issuing Bank and Lenders in
connection with the Term Loan Facility and Letters of Credit or otherwise
pursuant to the Loan Documents; (ii) trade payables incurred in the ordinary
course of any Person included in the Dekania Group’s business; (iii) purchase
money Indebtedness (including Capitalized Lease Obligations) hereafter incurred
by Borrower or any Guarantor to finance the purchase of fixed assets; provided
that, (a) such Indebtedness incurred in any fiscal year shall not exceed
$1,000,000 (b) such Indebtedness shall not exceed the purchase price of the
assets funded and (c) no such Indebtedness may be refinanced for a principal
amount in excess of the principal amount outstanding at the time of

 

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such refinancing; (iv) Indebtedness existing on the Closing Date that is
identified and described on Schedule “1.1(a)” attached hereto and made part
hereof; (v) Subordinated Debt; and (vi) Indebtedness under Hedging Agreements.

Permitted Investments – (i)(a) obligations issued or guaranteed by the United
States of America or any agency thereof, (b) commercial paper with maturities of
not more than 180 days and a published rating of not less than A-1 or P-1 (or
the equivalent rating) by a nationally recognized investment rating agency,
(c) certificates of time deposit and bankers’ acceptances having maturities of
not more than 180 days and repurchase agreements backed by United States
government securities of a commercial bank if (1) such bank has a combined
capital and surplus of at least $500,000,000, or (2) its debt obligations, or
those of a holding company of which it is a Subsidiary, are rated not less than
A (or the equivalent rating) by a nationally recognized investment rating
agency, and (d) U.S. money market funds that invest solely in obligations issued
or guaranteed by the United States of America or an agency thereof; (ii) loans
to employees not to exceed $500,000 in the aggregate outstanding at any time;
(iii) so long as no Default or Event of Default exists, or after giving effect
to any such investment would exist, investments in the Broker Entity;
(iv) investments existing on the Closing Date and disclosed on Schedule
“5.10(a)”; (v) investments in Subsidiaries reflected on Schedule “5.9”; provided
however, that nothing contained herein shall prevent Borrower from organizing
new Subsidiaries in accordance with all of the conditions set forth in this
Agreement; and (vi) so long as no Default or Event of Default exists, or after
giving effect to any such investment would exist, loans or advances to any
shareholder(s), partner(s), or member(s) of Borrower or any Guarantor or any
Subsidiary of the foregoing that are comprised of amounts received by any such
Person from or in connection with (I) the sale of the Assigned CDO Agreements
(as defined in the Master Agreement), (II) the Service Fees (as defined in the
Services Agreement) payable pursuant to Sections 3(a) or 3(b) of the Services
Agreement, or (III) the Loan Agreement.

Permitted Liens – (i) Liens securing taxes, assessments or governmental charges
or levies or the claims or demands of materialmen, mechanics, carriers,
warehousemen, and other like persons not yet due; (ii) Liens incurred or
deposits made in the ordinary course of business in connection with workers’
compensation, unemployment insurance, social security and other like laws;
(iii) Liens on fixed assets security purchase money Indebtedness permitted under
Section 7.6; provided that, (a) such Lien is attached to such assets
concurrently, or within 20 days of the acquisition thereof, and only to the
assets so acquired, and (b) a description of the asset acquired is furnished to
Lender; and (iv) Liens existing on the Closing Date and shown on Schedule
“1.1(b)” attached hereto and made part hereof.

Person – An individual, partnership, corporation, trust, unincorporated
association or organization, joint venture, limited liability company or
partnership, or any other entity.

Property – Any interest of Borrower or any Guarantor in any kind of property or
asset, whether real, personal or mixed, tangible or intangible.

Pro Rata Percentage – As to each Lender, the pro rata percentage set forth
opposite each Lender’s name on Schedule A hereto.

 

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Published Rate – The rate of interest published each Business Day in The Wall
Street Journal “Money Rates” listing under the caption “London Interbank Offered
Rates” for a one month period. If The Wall Street Journal ceases to be published
or goes on strike or is otherwise not published, Agent may use a similar
published eurodollar rate for a one month period.

Quarterly Compliance Certificate – Section 6.10.

Register – Section 10.12.

Regulation D – Regulation D of the Board of Governors of the Federal Reserve
System, comprising Part 204 of Title 12, Code of Federal Regulations, as
amended, and any successor thereto.

Reimbursement Obligations – Collectively, Borrower’s reimbursement obligation
for any and all draws under any Letter of Credit.

Related Parties – With respect to any specified Person, such Person’s Affiliates
and the respective directors, managers, officers, employees and agents of such
Person and such Person’s Affiliates.

Requirement of Law – As to any Person, each law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

Secured Parties – Collectively, Agent, Issuing Bank, Lenders and any Lender (or
Affiliate of a Lender) that is a counterparty to any Interest Hedging
Instrument, permitted under the Loan Agreement and any permitted successors and
assigns.

Securities Act – The Securities Act of 1933, as the same may be amended from
time to time.

Security Documents – Collectively, the Surety and Guaranty Agreement, the
Guarantor Security Agreement, the Collateral Pledge Agreement, and the Trademark
Security Agreement, each executed by Cohen Bros. Financial, LLC, Borrower,
Parent or Subsidiary Guarantors (as applicable), and any other agreements,
instruments and documents executed and/or delivered from time to time or in
connection therewith related to any guaranty or suretyship obligation or the
granting of any security interest or pledge off any Property to secure the
repayment of the Obligations.

Services Agreement – That certain Services Agreement between ATP and CCFM dated
as of July 29, 2010 and as amended from time to time.

Sponsored CDO Equity Interests – Collectively, those certain equity interests in
the Collateralized Debt Offerings set forth on Schedule “5.14(b)” attached
hereto, as such Schedule may be amended, supplemented, replaced or restated from
time to time and any other equity interests in additional Collateralized Debt
Offerings sponsored by Borrower or any Guarantor (whether now existing or
hereafter created or acquired).

 

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Sponsored CDO Offerings – A Collateralized Debt Offering structured by a
Guarantor and for which Borrower or a Guarantor acts as collateral manager
pursuant to a Management Agreement.

Subordinated Debt – Indebtedness of a Person included in the Dekania Group
subject to payment terms and subordination provisions acceptable to Agent in its
sole discretion.

Subsequent Assigned CDO Agreement Sale – The sale by CCFM, under the terms of
the Master Agreement, of all or any of the Assigned CDO Agreements (as defined
in the Master Agreement) described on Schedule F hereto, after the Closing Date.

Subsidiary – With respect to any Person at anytime, (i) any corporation more
than fifty percent (50%) of whose voting stock is legally and beneficially owned
directly or indirectly by such Person or owned by a corporation more than fifty
percent (50%) of whose voting stock is legally and beneficially owned directly
or indirectly by such Person; (ii) any trust of which a majority of the
beneficial interest is at such time owned directly or indirectly, beneficially
or of record, by such Person or one or more Subsidiaries of such Person; and
(iii) any partnership, joint venture, limited liability company or other entity
of which ownership interests having ordinary voting power to elect a majority of
the board of directors or other Persons performing similar functions are at such
time owned directly or indirectly, beneficially or of record, by, or which is
otherwise controlled directly, indirectly or through one or more intermediaries
by, such Person or one or more Subsidiaries of such Person. Notwithstanding the
foregoing, Non-Consolidation Entities shall be deemed not to be Subsidiaries.

Subsidiary Guarantor – Alesco Collateral Holdings I, L.P., Alesco Funding, LLC,
Alesco Holdings, Ltd., Alesco Loan Holdings, LLC, Alesco Loan Holdings Trust,
Alesco TPS Holdings, LLC, Alesco Warehouse Conduit, LLC, CIRA ECM, LLC, Cohen &
Compagnie, Cohen & Company Financial Management, LLC, Cohen & Company Funding,
LLC, Cohen & Company Management, LLC, Cohen & Company Ventures, LLC, Cohen Asia
Investments, Ltd., Cohen Bros. Acquisitions, Cohen Securities Funding, Dekania
Capital Management, LLC, EuroDekania Management Limited, Strategos Capital
Management, LLC, Sunset Financial Holdings, LLC, Sunset Funding, LLC, Sunset
Holdings, Ltd., Sunset Investment Vehicle, LLC, Sunset Loan Holdings Trust,
Sunset TPS Holdings, LLC, and any other Person who may hereafter guaranty, as
surety, all of the Obligations. Notwithstanding inclusion of each of Cohen &
Compagnie and EuroDekania Management Limited as a “Subsidiary Guarantor”
hereunder, neither of Cohen & Compagnie or EuroDekania Management Limited shall
be required to execute the Surety and Guaranty Agreement or Guaranty Security
Agreement.

Surety and Guaranty Agreement – That certain surety and guaranty agreement
executed by each Guarantor, in favor of Agent dated on or prior to the Closing
Date, as the same may be amended, modified, confirmed, supplemented or replaced
from time to time.

Taxes – Section 2.16(a).

Term Loan A – Section 2.1(a)(ii)

Term Loan B – Section 2.1(a)(ii)

 

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Term Loan Facility – Section 2.1(a).

Term Loan Limit – The sum of $14,600,000.

Term Loan Maturity Date – September 30, 2012.

Term Loan Notes – Those notes described in Section 2.1(b), as amended, modified,
supplemented or restated from time to time.

Term Loan Pro Rata Share – As to any Lender, at any time, such Lender’s Pro Rata
Percentage of the outstanding balance of the Term Loan Facility plus
unreimbursed Letters of Credit and outstanding and undrawn Letters of Credit.

Term Loans – Section 2.1(a)(i).

Trademark Security Agreements – Collectively, those certain Trademark Security
Agreements executed by Parent and CCFM in favor of Agent on or prior to the
Closing Date as the same may be amended, modified, confirmed, supplemented or
restated from time to time.

Trading Assets – Collectively, the net trading assets that comprise the
following line items (including similar variations thereof) classified, in
accordance with GAAP, on Cohen & Company’s balance sheet; provided however that
Trading Assets shall not include Permanent Investments or any fee arising under
any Management Agreement:

Assets

 

  •  

Receivables from brokers, dealer, clearing agencies;

 

  •  

Investments – trading;

 

  •  

Receivables under resale agreements;

 

  •  

Restricted cash;

 

  •  

Securities borrowed;

 

  •  

Deposits with clearing agent;

 

  •  

Fails to receive; and

 

  •  

Fees receivable

Liabilities

 

  •  

Payables to brokers, dealers, and clearing agencies;

 

  •  

Trading securities sold, but not yet purchased;

 

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  •  

Securities sold under agreements to repurchase;

 

  •  

Securities loaned;

 

  •  

Margin payable; and

 

  •  

Fails to deliver.

Transaction Documents – Collectively, the Master Agreement, Services Agreement,
Escrow Agreement and any other agreements, instruments and documents executed
and delivered from time to time in connection therewith.

UCC – The Uniform Commercial Code as adopted in the Commonwealth of
Pennsylvania, as the same may be amended from time to time.

Website Posting – Section 10.8.

1.2 Other Capitalized Terms: All capitalized terms used without further
definition herein shall have the respective meaning set forth in the UCC.

1.3 Accounting Principles: Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with GAAP as in
effect on the Closing Date, to the extent applicable, except as otherwise
expressly provided in this Agreement. If there are any changes in GAAP after the
Closing Date that would affect the computation of the financial covenants in
Section 6.8, such changes shall only be followed, with respect to such financial
covenants, from and after the date this Agreement shall have been amended to
take into account any such changes.

1.4 Construction: No doctrine of construction of ambiguities in agreements or
instruments against the interest of the party controlling the drafting shall
apply to this Agreement or any other Loan Documents.

SECTION 2. THE LOANS

2.1 Term Loan Facility - Description:

(a)(i) Subject to the terms and conditions of this Agreement, each Lender hereby
severally establishes for the benefit of Borrower a term loan facility
(collectively, the “Term Loan Facility”) which shall include Letters of Credit
issued by Issuing Bank and cash Advances extended by Lenders to or for the
benefit of Borrower from time to time hereunder (such cash Advances are referred
to herein as “Term Loans”). The aggregate principal amount of all Term Loans,
unreimbursed Letters of Credit plus outstanding and undrawn Letters of Credit
shall not, at any time, exceed the Term Loan Limit. Amounts repaid under the
Term Loans may not be reborrowed as Term Loans. If the aggregate principal
amount of all Term Loans, unreimbursed Letters of Credit plus outstanding and
undrawn Letters of Credit at any time exceeds the Term Loan Limit (such excess
amount, an “Overadvance”), Borrower shall within five (5) Business Days after
notice from Agent, repay the Overadvance in full.

 

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(ii) Subject to the terms and conditions of this Agreement, during the Draw Down
Period, Borrower may request that Lenders make Term Loans and each Lender
severally agrees to lend to Borrower an amount equal to such Lender’s Pro Rata
Percentage of the Term Loan requested by Borrower. Borrowers shall not request
and Lenders shall not make more than two (2) Term Loans. The first Term Loan
(“Term Loan A”) shall be in the amount of $9,300,000 and shall be advanced on
the Closing Date. The second Term Loan (“Term Loan B”) shall be advanced during
the Draw Down Period and shall (subject to the dollar limitations in
Section 2.1(a)(i) above) be in an amount equal to the lesser of $4,000,000 or
55% of the amount deposited into escrow pursuant to the Escrow Agreement, with
respect to the Subsequent Assigned CDO Agreement Sale. The outstanding balance
of Term Loans, unreimbursed Letters of Credit plus outstanding and undrawn
Letters of Credit of each Lender shall not exceed such Lender’s respective Term
Loan Pro Rata Share. After the expiration of the Draw Down Period, Borrower
shall not request and Lenders shall not make any further cash Advances.

(b) At Closing with respect to Term Loan A and at the time of the advance of
Term Loan B, Borrower shall execute and deliver a promissory note to each Lender
for such Lender’s Pro Rata Percentage of the original principal amount of each
such Term Loan (collectively, as may be amended, supplemented, replaced or
restated from time to time, the “Term Loan Notes”). Each Note shall evidence
Borrower’s absolute, unconditional obligation to repay such Lender for all
outstanding Term Loans, unreimbursed Letters of Credit plus outstanding and
undrawn Letters of Credit owed to such Lender, with interest as herein and
therein provided. Each and every Term Loan under the Term Loan Facility shall be
deemed evidenced by the Term Loan Notes, which are deemed incorporated herein by
reference and made a part hereof.

(c)(i) The principal balance of Term Loan A shall be paid in seven equal
consecutive quarterly installments in the amount of $1,162,500 each, commencing
on September 30, 2010 and continuing on the last day of each December, March,
June, and September thereafter. A final installment of all unpaid principal and
all accrued interest shall be due and payable in full on the Term Loan Maturity
Date.

(ii) The principal balance of Term Loan B shall be paid in six equal consecutive
quarterly installments, each in an amount equal to 10% of the original principal
balance of Term Loan B commencing on December 31, 2010 and continuing on the
last day of each March, June, September and December thereafter. A final
installment of all unpaid principal and all accrued interest shall be due and
payable in full on the Term Loan Maturity Date.

2.2 Letters of Credit-Description:

(a) As part of the Term Loan Facility and subject to its terms and conditions,
Issuing Bank shall, upon the written request of Borrower which request shall not
be given less than five (5) days prior to the issuance date, on behalf of and
for the benefit of all Lenders, make available the Letters of Credit; the
outstanding face amount of which shall not exceed, at any time, in the
aggregate, the L/C Sublimit. Each Letter of Credit issued from time to time
under the Term Loan Facility which remains undrawn (and the amounts of draws on
Letters of Credit prior to payment as hereinafter set forth) shall reduce dollar
for dollar, the amount available to be borrowed under the Term Loan Facility.
Notwithstanding the foregoing, all Letters of Credit shall be in form and
substance satisfactory to Issuing Bank and Agent. No Letter of Credit shall have
an expiry date

 

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later than (i) 365 days from the date of issuance, provided that any such Letter
of Credit may be extendable for successive periods each of up to one year, but
not beyond ten (10) Business Days prior to the Term Loan Maturity Date or
(ii) 10 Business Days prior to the Term Loan Maturity Date. Borrower shall
execute and deliver to Issuing Bank all Letter of Credit Documents required by
Issuing Bank for such purpose. Each Letter of Credit shall comply with the
Letter of Credit Documents.

(b) Immediately upon the issuance of any Letter of Credit, Issuing Bank is
deemed to have granted to each other Lender, and each other Lender is hereby
deemed to have acquired, an undivided participating interest (without recourse
or warranty), in accordance with each such other Lender’s respective Pro Rata
Percentage, in all of Issuing Bank’s rights and liabilities with respect to such
Letter of Credit. Each Lender shall be absolutely and unconditionally obligated
without deduction or setoff of any kind, to Issuing Bank, according to its Pro
Rata Percentage, to reimburse Issuing Bank on demand for any amount paid
pursuant to any draws made at any time (including, without limitation, following
the commencement of any bankruptcy, reorganization, receivership, liquidation or
dissolution proceeding with respect to Borrower) under any Letter of Credit.

(c) In the event of any drawing under a Letter of Credit, Issuing Bank will
promptly notify Borrower and Agent. Borrower shall, no later than 1:00 p.m.
Eastern time on the Business Day such notice is given (if given prior to 11:00
a.m. Eastern time on such Business Day) or on the next Business Day if such
notice is given after 11:00 a.m. Eastern time, absolutely and unconditionally
reimburse Issuing Bank without offset or deduction of any kind, for any draws
made under a Letter of Credit. All of Borrower’s Reimbursement Obligations
hereunder with respect to Letters of Credit shall apply unconditionally and
absolutely to all Letters of Credit issued hereunder on behalf of Borrower.

(d) The obligation of Borrower to reimburse Issuing Bank for drawings made under
the Letters of Credit shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
including, without limitation, the following circumstances:

(i) any lack of validity or enforceability of any Letter of Credit;

(ii) the existence of any claim, setoff, defense or other right that Borrower or
any other Person may have at any time against a beneficiary or any transferee of
any Letter of Credit (or any persons or entities for whom any such beneficiary
or transferee may be acting), Agent, Issuing Bank, any Lender or any other
Person, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction;

(iii) any draft, demand, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;

(iv) payment by Issuing Bank under any Letter of Credit against presentation of
a demand, draft or certificate or other document that does not comply with the
terms

 

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of such Letter of Credit unless Issuing Bank shall have acted with willful
misconduct or gross negligence in issuing such payment;

(v) any other circumstances or happening whatsoever that is similar to any of
the foregoing; or

(vi) the fact that a Default or Event of Default shall have occurred and be
continuing.

(e) If by reason of (i) any change after the Closing Date in any Requirement of
Law or (ii) compliance by Issuing Bank or Lenders with any direction, reasonable
request or requirement (whether or not having the force of law) of any
governmental or monetary authority including, without limitation, Regulation D:

(A) Issuing Bank or Lenders shall be subject to any tax or other levy or charge
of any nature or to any variation thereof (except for Taxes for which payments
are due pursuant to, or excluded from, Section 2.16) or to any penalty with
respect to the maintenance or fulfillment of its obligations under this
Section 2.2, whether directly or by such being imposed on or suffered by Issuing
Bank or Lenders;

(B) any reserve, deposit or similar requirement is or shall be applicable,
imposed or modified in respect of any Letter of Credit issued by Issuing Bank;
or

(C) there shall be imposed on Issuing Bank or any Lender any other condition
regarding this Section 2.2 or any Letter of Credit; and the result of the
foregoing is to directly or indirectly increase the cost to Issuing Bank or any
Lender of issuing, creating, making or maintaining any Letter of Credit or to
reduce the amount receivable in respect thereof by Issuing Bank or any Lender,
then and in any such case, Issuing Bank shall, after the additional cost is
incurred or the amount received is reduced, notify Borrower and Borrower shall
pay on demand such amounts as may be necessary to compensate Issuing Bank or any
Lender for such additional cost or reduced receipt, together with interest on
such amount from the date demanded until payment in full thereof at a rate per
annum equal at all times to the Adjusted Base Rate; provided that Borrower shall
not be obligated for any amounts which may be payable as a result of changes
occurring more than one hundred eighty (180) days prior to the date Agent
notifies Borrower of such changes. A certificate signed by an officer of Issuing
Bank or such Lender as to the amount of such increased cost or reduced receipt
showing in reasonable detail the basis for the calculation thereof, submitted to
Borrower by Issuing Bank or such Lender shall, except for manifest error and
absent written notice from Borrower to Issuing Bank or such Lender within ten
(10) days from submission, be final, conclusive and binding for all purposes.

(f)(i) In addition to amounts payable as elsewhere provided in this Section 2.2,
without duplication, Borrower hereby agrees to protect, indemnify, pay and save
Agent, Issuing Bank and each Lender harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys’ fees) which Agent, Issuing Bank and each Lender
may incur or be subject to as a consequence, direct or indirect, of (a) the
issuance of the Letters of Credit or (b) the failure of Issuing Bank to honor a
drawing under any Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or

 

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future de jure or de facto government or Government Authority (all such acts or
omissions herein called “Government Acts”) in each case except for claims,
demands, liabilities, damages, losses, costs, charges and expenses arising from
acts or conduct of Issuing Bank constituting gross negligence or willful
misconduct.

(ii) As among Borrower and Issuing Bank, Borrower assumes all risks of the acts
and omissions of or misuse of the Letters of Credit issued by Issuing Bank by
the respective beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, unless caused by the gross negligence or willful
misconduct of Issuing Bank, Issuing Bank shall not be responsible: (A) for the
form, validity, sufficiency, accuracy, genuineness or legal effects of any
document submitted by any party in connection with the application for and
issuance if such Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may prove to
be invalid or ineffective for any reason; (C) for failure of the beneficiary of
any such Letter of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit; (D) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they are in cipher; (E) for errors in
interpretation of technical terms; (F) for any loss or delay in the transmission
of any document or required in order to make a drawing under such Letter of
Credit or of the proceeds thereof; (G) for the misapplication by the beneficiary
of any such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; and (H) for any consequences arising from causes beyond the control of
Issuing Bank, including, without limitation, any Government Acts. None of the
above shall affect, impair or prevent the vesting of any of Issuing Bank’s
rights or powers hereunder.

(iii) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by Issuing Bank in
connection with the Letters of Credit issued by it or the related certificates,
if taken or omitted in good faith and in the absence of gross negligence, shall
not create any liability on the part of Issuing Bank to Borrower.

2.3 Reserved:

2.4 Reserved:

 

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2.5 Advances and Payments:

(a) (i) Except to the extent otherwise set forth in this Agreement (or in the
case of an Interest Hedging Instrument under the applicable agreements), all
payments of principal and of interest on the Term Loans, Reimbursement
Obligations, the L/C Fees, Expenses, indemnification obligations and all other
fees, charges and any other Obligations of Borrower hereunder, shall be made to
Agent at its main banking office, 1701 Route 70 East, Cherry Hill, New Jersey,
08034, in United States dollars, in immediately available funds. Alternatively,
Agent, on behalf of all Lenders, shall have the unconditional right and
discretion (and Borrower hereby authorizes Agent) to charge Borrower’s operating
and/or deposit account(s) with Agent or any Lender for all of Borrower’s
Obligations as they become due from time to time under this Agreement including
without limitation, interest, principal, fees and reimbursement of Expenses. Any
payments received prior to 2:00 p.m. Eastern time on any Business Day shall be
deemed received on such Business Day. Any payments (including any payment in
full of the Obligations), received after 2:00 p.m. Eastern time on any Business
Day shall be deemed received on the immediately following Business Day.

(ii) Agent will have the right to collect and receive all payments of the
Obligations, and to collect and receive all reimbursements for draws made under
the Letters of Credit, together with all fees, charges or other amounts due
under this Agreement and the Loan Documents and shall promptly distribute such
payments to Lenders and Issuing Bank in accordance with the terms of Sections
2.5 and 2.12.

(iii) If any such payment received by Agent is rescinded, determined to be
unenforceable or invalid or is otherwise required to be returned for any reason
at any time, whether before or after termination of this Agreement and the Loan
Documents, each Lender shall, upon written notice from Agent, promptly pay over
to Agent its Pro Rata Percentage of the amount so rescinded, held unenforceable
or invalid or required to be returned, together with interest and other fees
thereon if also required to be rescinded or returned.

(iv) All payments by Agent and Lenders to each other hereunder shall be in
immediately available funds. Agent will at all times maintain proper books of
account and records reflecting the interest of each Lender in the Term Loans and
the Letters of Credit, in a manner customary to Agent’s keeping of such records,
which books and records shall be available for inspection by each Lender at
reasonable times during normal business hours, at such Lender’s sole expense. In
the event that any Lender shall receive any payments (whether prior to or after
the occurrence of an Event of Default) in reduction of the Obligations in an
amount greater than its applicable Pro Rata Percentage in respect of
indebtedness to Lenders evidenced hereby (including, without limitation, amounts
obtained by reason of setoffs), such Lender shall hold such excess in trust (to
the extent such Lender is lawfully able to do so) for Agent (on behalf of all
other Lenders) and shall promptly remit to Agent such excess amount so that the
amounts received by each Lender hereunder shall at all times be in accordance
with its applicable Pro Rata Percentage. To the extent necessary for each
Lender’s actual percentage of all outstanding Term Loans to equal its applicable
Pro Rata Percentage, the Lender having a greater share of any payment(s) than
its applicable Pro Rata Percentage shall acquire a participation in the
applicable outstanding balances of the Term Loan Pro Rata Shares of the other
Lenders as determined by Agent.

 

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(b) (i) Term Loans which may be made by Lenders from time to time under the Term
Loan Facility shall be made available for the use and benefit of Borrower by
crediting such proceeds to Borrower’s operating account with Agent as designated
in the Advance Request.

(ii) All cash Advances requested by Borrower under the Term Loan Facility are to
be in writing pursuant to a written request (“Advance Request”) executed by an
Authorized Officer in the form of Exhibit D attached hereto. Requests for Base
Rate Loans must be requested by 10:00 A.M., Eastern time, on the date such
Advance is to be made. Requests for LIBOR Rate Loans must be requested by 10:00
A.M. Eastern time, three (3) Business Days in advance of the date such Advance
is to be made and must specify the amount of the LIBOR Rate Loan and the LIBOR
Interest Period. If no LIBOR Interest Period is specified, the LIBOR Interest
Period shall be deemed to be a one month period.

(iii) (A) Agent shall provide Lenders with notice that Borrower has requested a
Base Rate Loan, on the same Business Day as such request and request each Lender
to provide Agent with such Lender’s Pro Rata Percentage of such requested Base
Rate Loan prior to Agent’s making such Base Rate Loan. Upon receipt of such
notice from Agent prior to 11:00 A.M. Eastern time, each Lender shall remit to
Agent its respective Pro Rata Percentage of such requested Base Rate Loan, prior
to 2:00 P.M. Eastern time, on the Business Day Agent is scheduled to make such
Base Rate Loan in accordance with Section 2.5(b)(i) hereof. If notice is
received after 11:00 A.M. Eastern time, each Lender shall remit its respective
Pro Rata Percentage of the Base Rate Loan on the next Business Day.

(B) Agent shall provide Lenders with notice that Borrower has requested a LIBOR
Rate Loan, three (3) Business Days in advance of the requested LIBOR Rate Loan
and request each Lender to provide Agent with such Lender’s Pro Rata Percentage
of such requested LIBOR Rate Loan prior to Agent’s making such LIBOR Rate Loan.
Upon receipt of such notice from Agent, each Lender shall remit to Agent its
respective Pro Rata Percentage of such requested LIBOR Rate Loan, prior to 2:00
P.M. Eastern time, on the Business Day Agent is scheduled to make such LIBOR
Rate Loan in accordance with Section 2.5(b)(i) hereof.

(C) Neither Agent nor any other Lender shall be obligated, for any reason
whatsoever, to remit or advance the share of any other Lender. Agent shall not
be required to make the full amount of the requested cash Advance unless and
until it receives funds representing each other Lender’s Pro Rata Percentage of
such requested cash Advance, but Agent shall advance to Borrower that portion of
the requested cash Advance equal to the Pro Rata Percentages of such requested
cash Advance which it has received from Lenders.

(D) If Agent does not receive each other Lender’s Pro Rata Percentage of such
requested cash Advance, and Agent elects, in its sole discretion, to make the
requested cash Advance on behalf of Lenders or any of them, Agent shall be
entitled to recover each Lender’s Pro Rata Percentage of each cash Advance
together with interest at a per annum rate equal to the Federal Funds Rate
during the period commencing on the date such cash Advance is made and ending on
(but excluding) the date Agent recovers such amount. Each Lender is absolutely
and unconditionally obligated, without deduction or setoff of any kind, to
forward to Agent its Pro Rata Percentage of each cash Advance made pursuant to
the terms of this Agreement. To the extent Agent is not reimbursed by such
Lender, Borrower shall repay Agent immediately on demand, such

 

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amount. Agent shall also be entitled to recover any and all actual losses and
damages (including, without limitation, reasonable attorneys’ fees) from any
Lender failing to so advance upon demand of Agent. Agent may set off the
obligations of a Lender under this paragraph against any distributions or
payments of the Obligations, which Agent would otherwise make available to such
Lender at any time.

(E) To the extent and during the time period in which any Lender fails to
provide or delays providing its respective payment to Agent pursuant to clause C
or D above, such Lender’s percentage of all payments of the Obligations (but not
the Pro Rata Percentage of future Advances required to be funded by such Lender)
shall decrease to reflect the actual percentage which its actual outstanding
Loans bears to the total outstanding Loans of all Lenders. During the time
period in which any Lender fails to provide or delays providing its respective
payment to Agent pursuant to clause C or D above, such Lender shall not be
entitled to give instructions to Agent or to approve, disapprove, consent to or
vote on any matters relating to this Agreement and the other Loan Documents. All
amendments, waivers and other modifications of this Agreement and the Loan
Documents may be made without regard to such Lender.

2.6 Interest:

(a) The unpaid principal balance of the Term Loan shall bear interest, subject
to the terms hereof at a per annum rate equal to, at Borrower’s option, the
Adjusted Base Rate or LIBOR Rate. The unpaid balance of any unreimbursed draws
under any Letter of Credit shall bear interest at a per annum rate equal to the
Adjusted Base Rate.

(b) Changes in the interest rate applicable to Base Rate Loans shall become
effective on the same day that there is a change in the Base Rate.

(c) Interest on Base Rate Loans shall be payable monthly, in arrears, on the
first day of each month, beginning on the first day of the first full calendar
month after the Closing Date, and on the Term Loan Maturity Date. Interest on
LIBOR Rate Loans shall be payable on the last day of the LIBOR Interest Period,
and on the Term Loan Maturity Date.

(d) Borrower may elect from time to time to convert Base Rate Loans (other than
unreimbursed draws on any Letter of Credit) to LIBOR Rate Loans, by delivering a
Notice of Conversion/Extension to Agent at least three (3) Business Days prior
to the proposed date of conversion. In addition, Borrower may elect from time to
time to convert all or any portion of a LIBOR Rate Loan to a Base Rate Loan by
giving Agent irrevocable written notice thereof by 12:00 noon one (1) Business
Day prior to the proposed date of conversion. LIBOR Rate Loans may only be
converted to Base Rate Loans on the last day of the applicable LIBOR Interest
Period. If the date upon which a LIBOR Rate Loan is to be converted to a Base
Rate Loan is not a Business Day, then such conversion shall be made on the next
succeeding Business Day and during the period from such last day of a LIBOR
Interest Period to such succeeding Business Day such Loan shall bear interest as
if it were a Base Rate Loan. All or any part of outstanding Base Rate Loans may
be converted as provided herein; provided that unless Agent otherwise consents
thereto, no Loan may be converted into a LIBOR Rate Loan when any Event of
Default has occurred and is continuing.

 

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(e) Borrower may continue any LIBOR Rate Loans upon the expiration of a LIBOR
Interest Period with respect thereto by delivering a Notice of
Conversion/Extension to Agent at least three (3) Business Days prior to the
proposed date of extension; provided that, unless Agent otherwise consents
thereto, no LIBOR Rate Loan may be continued as such when any Event of Default
has occurred and is continuing, in which case such Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable LIBOR Interest Period
with respect thereto. If Borrower shall fail to give timely notice of an
election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans
is not permitted hereunder, each such LIBOR Rate Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable LIBOR Interest Period
with respect thereto.

(f) Borrower may not have more than five (5) LIBOR Rate Loans outstanding at any
time.

2.7 Additional Interest Provisions:

(a) Interest on the LIBOR Rate Loans shall be based on a three hundred sixty
(360) day year but charged for the actual number of days elapsed. Interest on
Base Rate Loans shall be based on a three hundred sixty five (365)/three hundred
sixty six (366) day year but charged for the actual number of days elapsed.

(b) After the occurrence and during the continuance of an Event of Default
hereunder, Agent may increase the per annum effective rate of interest on all
Loans, including amounts drawn and not yet reimbursed under Letters of Credit,
to a rate equal to two hundred (200) basis points in excess of the applicable
interest rate (“Default Rate”). Such increase shall be retroactive from and
after the date of the occurrence of the Event of Default.

(c) Borrower shall not request and Lenders shall not make any LIBOR Rate Loans
while an Event of Default exists.

(d) All contractual rates of interest chargeable on outstanding Loans, shall
continue to accrue and be paid even after a Default or Event of Default,
maturity, acceleration, judgment, bankruptcy, insolvency proceedings of any kind
or the happening of any event or occurrence similar or dissimilar.

(e) In no contingency or event whatsoever shall the aggregate of all amounts
deemed interest hereunder and charged or collected pursuant to the terms of this
Agreement exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such court determines Lenders have charged or received
interest hereunder in excess of the highest applicable rate, Agent, on behalf of
Lenders, shall in its sole discretion, apply and set off such excess interest
received by Lenders against other Obligations due or to become due and such rate
shall automatically be reduced to the maximum rate permitted by such law.

 

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2.8 Fees:

(a) Borrower shall pay to Agent for the ratable benefit of all Lenders in
accordance with their Pro Rata Percentage a closing fee in the amount of
$250,000. The Closing Fee shall be paid on the Closing Date, shall be deemed
fully earned and shall be non-refundable.

(b) (i) Borrower shall pay to Agent, for the ratable benefit of Lenders in
accordance with their Pro Rata Percentage, letter of credit fees at a per annum
rate equal to four and one-half percent (4.50%) of the average daily maximum
amount available to be drawn under each Letter of Credit on the first day of
each calendar quarter in arrears. Such fees are the “L/C Fees”.

(ii) Borrower shall also pay to Issuing Bank for the account of Issuing Bank all
of Issuing Bank’s standard charges (including without limitation all cable and
wire transfer charges) for the account of Issuing Bank for the issuance,
amendment, negotiation/payment, extension and cancellation of each such Letter
of Credit. In addition, Borrower shall pay to Issuing Bank for Issuing Bank’s
own account an additional fronting fee equal to one quarter of one percent
(0.25%) per annum (“Fronting Fee”) on the average daily maximum amount available
to be drawn under each Letter of Credit on the first day of each calendar
quarter in arrears.

(c) All fees provided for in this Section 2.8 shall be based on a three hundred
sixty (360) day year and charged for the actual number of days elapsed.

2.9 Prepayments:

(a) Borrower may, upon three (3) Business Days prior notice, voluntarily prepay
the Term Loans in whole or in part (but in no event may such prepayment be less
Five Hundred Thousand Dollars ($500,000)) at any time or from time to time;
provided that, any prepayment of a LIBOR Rate Loan shall be subject to
Section 2.10. Any prepayment shall be accompanied by all accrued and unpaid
interest. Any partial prepayment of the Term Loan shall be applied as set forth
in Section 2.9(f).

(b) To the extent that an Overadvance exists, Borrower shall repay such
Overadvance as provided in Section 2.1(a).

(c) Subject to any limitations under Section 7.1 hereof, upon any Asset Sale or
series of Asset Sales (other than an Asset Sale or series of Asset Sales
consisting of Trading Assets), in either event outside of the ordinary course of
Borrower’s or any Guarantor’s business, Borrower shall prepay or cause to be
prepaid the Obligations in an amount equal to with respect to any Asset Sales by
a Person included in the Dekania Group, seventy five percent (75%) of the net
cash proceeds of such sale or disposition (i.e., the gross proceeds less the
reasonable and customary costs of such sale or other dispositions) (“Net Cash
Proceeds”), or with respect to any other Guarantor, ten percent (10%) of the Net
Cash Proceeds, in either event upon Borrower’s or any Guarantor’s receipt
thereof. Such prepayments shall be applied as set forth in Section 2.9(f).

(d) Contemporaneously with the receipt by a Person included in the Dekania Group
of any proceeds from the incurrence of any Indebtedness (other than Permitted
Indebtedness) or receipt by a Person included in the Dekania Group of additional
contributions on account of Capital Stock (other than from Parent or Affiliates
of Borrower) or Net Cash Proceeds from the

 

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issuance of additional Capital Stock of a Person included in the Dekania Group
(other than from Parent or Affiliates of Borrower and excluding for all purposes
any Net Cash Proceeds attributable to a return of capital from Deep Value),
Borrower shall prepay or cause to be prepaid the Obligations in an aggregate
amount equal to one hundred percent (100%) of such proceeds. Such prepayments
shall be applied as set forth in Section 2.9(f).

(e) Contemporaneously with the receipt thereof by Borrower or any Guarantor of
any additional consideration paid by ATP related to earn-out payments under
Section 3(b) of the Master Agreement, Borrower shall prepay or cause to be
prepaid the Obligations in an aggregate amount equal to one hundred percent
(100%) of such payments. Such prepayments shall be applied as set forth in
Section 2.9(f).

(f) All amounts prepaid pursuant to Sections 2.9(a), (b), (c), (d) and (e) shall
be applied ratably to Term Loan A and Term Loan B in the inverse order of
maturity, after payment of accrued and unpaid interest thereon. Subject to the
application described above, prepayments shall first be applied to Base Rate
Loans, and then to LIBOR Rate Loans. All prepayments of LIBOR Rate Loans shall
be subject to Section 2.10.

2.10 Funding Indemnity: Borrower shall indemnify each Lender, and hold each
Lender harmless from any loss, damages, liability, or expense which such Lender
may sustain or incur (other than through such Lender’s gross negligence or
willful misconduct) as a consequence of (a) default by Borrower in making a
borrowing of, conversion into, or extension of, LIBOR Rate Loans after Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by Borrower in making any prepayment of a LIBOR Rate Loan
after Borrower has given a notice thereof in accordance with the provisions of
this Agreement, or (c) the making of a prepayment of LIBOR Rate Loans on a day
which is not the last day of a LIBOR Interest Period with respect thereto. With
respect to LIBOR Rate Loans, such indemnification shall equal the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted, or extended, for the period from the
date of such prepayment, or of such failure to borrow, convert, or extend to the
last day of the applicable LIBOR Interest Period (or in the case of a failure to
borrow, convert, or extend, the LIBOR Interest Period that would have commenced
on the date of such failure) in each case at the applicable rate of interest for
such LIBOR Rate Loans provided for herein over (ii) the amount of interest (as
reasonably determined by Agent) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. This covenant shall survive the
termination of this Agreement, and the payment of the Obligations.

2.11 Use of Proceeds: The extensions of credit under and proceeds of the Term
Loan Facility shall be used, in part, on the Closing Date to refinance all
existing Indebtedness of Parent under the Existing Loan Agreement and after the
Closing Date, for working capital and general corporate purposes and investments
in Affiliates of Borrower.

2.12 Pro Rata Treatment and Payments:

(a) Each borrowing shall be made pro rata according to the respective Pro Rata
Percentages of Lenders. Unless otherwise required by the terms of this
Agreement, each payment under this Agreement, or any Note, shall be applied
first, to any fees then due and owing by

 

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Borrower pursuant to Section 2.8; second, to interest then due and owing
hereunder and under the Notes; third, to principal then due and owing hereunder
and under the Notes; and fourth, to cash collateralize the Reimbursement
Obligations. Each payment on account of any fees pursuant to Section 2.8 shall
be made pro rata in accordance with the respective amounts due and owing (except
as to the Fronting Fees expressly owing to Issuing Bank). Each payment by
Borrower on account of principal of, and interest on, the Term Loans shall be
applied to such Loans, as applicable, on a pro rata basis in accordance with the
terms hereof. All payments (including prepayments) to be made by Borrower on
account of principal, interest, Expenses and fees shall be made without defense,
set-off, or counterclaim; provided no such payment shall be, or constitute, a
waiver of any rights or claims Borrower may have. Agent shall distribute such
payments to Lenders entitled thereto, on a pro rata basis promptly upon receipt,
in the like funds as received. If any payment hereunder (other than payments on
the LIBOR Rate Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension.

(b) Notwithstanding any other provisions of this Agreement to the contrary,
after the exercise of remedies (other than the invocation of the Default Rate)
by Agent or Lenders, pursuant to Section 8.3, or after the Term Loans (with
accrued interest thereon), and all other amounts under the Loan Documents
(including without limitation, the maximum amount of all contingent liabilities
under Letters of Credit), shall automatically become due and payable in
accordance with the terms hereof, all amounts collected or received by Agent, or
any Lender, on account of the Obligations, or any other amounts outstanding
under any of the Loan Documents, or with respect to the Collateral, shall be
paid over or delivered as follows (irrespective of whether the following costs,
expenses, fees, interest, premiums, scheduled periodic payments, or Obligations
are allowed, permitted, or recognized as a claim in any proceeding resulting
from the commencement of any bankruptcy, insolvency, or similar proceeding):

FIRST, to the payment of all Expenses (including without limitation, reasonable
attorneys’ fees) of Agent in connection with enforcing the rights of Lenders
under the Loan Documents, and any protective advances made by Agent with respect
to the Collateral under or pursuant to the terms of the Loan Documents;

SECOND, to the payment of any fees owed to Agent, and payable or reimbursable
hereunder;

THIRD, to the payment of all reasonable and documented out-of-pocket costs and
expenses (including without limitation, reasonable attorneys’ fees) of each
Lender in connection with enforcing its rights under the Loan Documents, or
otherwise with respect to the Obligations owing to such Lender, as required by
Section 10.4;

FOURTH, to the payment of all of the Obligations consisting of accrued fees and
interest, and including with respect to any Interest Hedging Instrument, any
fees, premiums, and scheduled periodic payments due under such Interest Hedging
Instrument, and any interest accrued thereon;

FIFTH, to the payment of outstanding principal amount of the Obligations, and
the payment or cash collateralization of the outstanding Reimbursement
Obligations, and issued

 

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but undrawn amount of outstanding Letters of Credit, and including with respect
to any Interest Hedging Instrument, any breakage, termination, or other payments
due under such Interest Hedging Instrument, and any interest accrued thereon;

SIXTH, to all other Obligations, and other obligations which shall be become due
and payable under the Loan Documents, or otherwise, and not repaid pursuant to
clauses “FIRST” through “FIFTH” above; and

SEVENTH, to the payment of the surplus, if any, to Borrower, or whoever may be
lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each Lender shall receive an amount equal to its Pro
Rata Percentage of amounts available to be applied pursuant to clauses “THIRD,”
“FOURTH,” “FIFTH,” and “SIXTH” above; and (iii) to the extent that any amount
available for distribution pursuant to clause “FIFTH” above, are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by Agent in a cash collateral account and applied (A) first, to
reimburse Issuing Bank from time to time, for any drawings under such Letters of
Credit; and (B) then, following the expiration of all Letters of Credit, to all
other obligations of the types described in clauses “FIFTH,” and “SIXTH” above
in the manner provided in this Section 2.12. Notwithstanding the foregoing terms
of this Section 2.12, only Collateral proceeds, and payments under the Surety
and Guaranty Agreements (as opposed to ordinary course principal, interest, and
fee payments hereunder) shall be applied to obligations under any Interest
Hedging Instrument.

2.13 Inability to Determine Interest Rate:

Notwithstanding any other provision of this Agreement, if Agent shall reasonably
determine (which determination shall be conclusive and binding absent manifest
error) that, by reason of circumstances affecting the relevant market,
reasonable and adequate means do not exist for ascertaining the Adjusted LIBOR
Rate for a LIBOR Interest Period, Agent shall forthwith give telephone notice of
such determination, confirmed in writing, to Borrower, and Lenders at least two
(2) Business Days prior to the first day of such LIBOR Interest Period. Unless
Borrower shall have notified Agent upon receipt of such telephone notice that it
wishes to rescind or modify its request regarding such LIBOR Rate Loans, any
Loans that were requested to be made as LIBOR Rate Loans shall be made as Base
Rate Loans and any Loans that were requested to be converted into or continued
as LIBOR Rate Loans shall remain as or be converted into Base Rate Loans. Until
any such notice has been withdrawn by Agent, no further Loans shall be made as,
continued as, or converted into, LIBOR Rate Loans for the LIBOR Interest Periods
so affected.

2.14 Illegality:

Notwithstanding any other provision of this Agreement, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
to any Lender by the relevant Governmental Authority shall make it unlawful for
such Lender to make or maintain LIBOR Rate Loans as contemplated by this
Agreement, or to obtain in the interbank Eurodollar market, the funds with which
to make such Loans, (a) such Lender shall promptly notify Agent and Borrower
thereof,

 

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(b) the commitment of such Lender hereunder to make LIBOR Rate Loans or continue
LIBOR Rate Loans as such shall forthwith be suspended until Agent shall give
notice that the condition or situation which gave rise to the suspension shall
no longer exist, and (c) such Lender’s Loans then outstanding as LIBOR Rate
Loans, if any, shall be converted on the last day of the LIBOR Interest Period
for such Loans, or within such earlier period as required by law as Base Rate
Loans. Borrower hereby agrees promptly to pay any Lender, upon its demand, any
additional amounts necessary to compensate such Lender for actual and direct
costs (but not including anticipated profits) reasonably incurred by such Lender
in connection with any repayment in accordance with this Section 2.14, including
but not limited to, any interest or fees payable by such Lender to lenders of
funds obtained by it in order to make or maintain its LIBOR Rate Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section 2.14 submitted by such Lender, through Agent to Borrower shall be
presumptive evidence of such amounts owing. Each Lender agrees to use reasonable
efforts to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section 2.14; provided however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its reasonable discretion to be
material.

2.15 Requirements of Law:

(a) If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject such Lender to any tax of any kind whatsoever with respect to
any Letter of Credit, or any application relating thereto, any LIBOR Rate Loan
made by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Taxes for which payments are due pursuant to, or
excluded from, Section 2.16);

(ii) shall impose, modify, or hold applicable, any reserve, special deposit,
compulsory loan, or similar requirement against assets held by, deposits or
other liabilities in, or for the account of, advances, loans, or other extension
of credit (including participations therein) by, or any other acquisition of
funds by, any office of such Lender which is not otherwise included in the
determination of the LIBOR Rate hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to materially increase the cost to
such Lender of making or maintaining LIBOR Rate Loans, or the Letters of Credit,
or the participation interest therein, or to reduce any amount receivable
hereunder, or under any Note, then, in any such case, Borrower shall promptly
pay such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such additional costs or reduced amount receivable which such
Lender reasonably deems to be material as determined by such Lender, with
respect to its LIBOR Rate Loans or Letters of Credit; provided that Borrower
shall not be obligated for any amounts which may be payable as a result of
changes occurring more than one hundred eighty (180) days prior to the date
Agent notifies Borrower of such changes. A certificate as to any additional
amounts payable pursuant to this Section 2.15 submitted by such Lender, through
Agent, to Borrower shall be presumptive evidence

 

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of such amounts owing. Each Lender agrees to use reasonable efforts to avoid, or
to minimize, any amounts which might otherwise be payable pursuant to this
paragraph of this Section 2.15; provided however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal regulatory
burdens deemed by such Lender in good faith to be material.

(b) If any Lender shall have reasonably determined that the adoption of, or any
change in, any Requirement of Law regarding capital adequacy, or in the
interpretation or application thereof, or compliance by such Lender, or any
corporation controlling such Lender, with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority made subsequent to the date hereof, does or shall have
the effect of reducing the rate of return on such Lender’s or such corporation’s
capital as a consequent of its obligations hereunder to a level below that which
such Lender or such corporation could have achieved, but for such adoption,
change, or compliance (taking into consideration such Lender’s or such
corporation’s policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time, within fifteen
(15) days after such demand by such Lender, Borrower shall pay to such Lender
such additional amount as shall be certified by such Lender as being required to
compensate it for such reduction; provided that Borrower shall not be obligated
for any amounts which may be payable as a result of changes occurring more than
one hundred eighty (180) days prior to the date Agent notifies Borrower of such
changes. Such a certificate as to any additional amounts payable under this
Section 2.15 submitted by a Lender (which certificate shall include a
description of the basis for the computation), through Agent, to Borrower shall
be presumptive evidence of such amounts owing.

(c) The agreements in this Section 2.15 shall survive the termination of this
Agreement and payment of the Obligations.

2.16 Taxes:

(a) All payments made by Borrower hereunder or under any Note shall be, except
as provided in Section 2.16(b), made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
Governmental Authority or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding any tax imposed
on or measured by the net income or profits of a Lender (including franchise
taxes imposed in lieu thereof) pursuant to the laws of the jurisdiction in which
Agent or such Lender, as the case may be, is organized or the jurisdiction in
which the principal office or applicable lending office of Agent or such Lender
is located or any subdivision thereof or therein and any branch profit taxes
imposed by the United States or any similar tax imposed by any jurisdiction
described above) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges being referred to collectively as “Taxes”). If any Taxes are so
levied or imposed, except as provided in Section 2.16(b), Borrower agrees to pay
the full amount of such Taxes, and such additional amounts as may be necessary
so that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. Borrower will furnish to
Agent as soon as practicable after the date the payment of any Taxes is due
pursuant to applicable law certified copies (to the extent reasonably available
and required by law) of tax receipts evidencing such payment by Borrower, except
as provided in Section 2.16(b), Borrower

 

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agrees to indemnify and hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Taxes so levied or imposed and
paid by such Lender.

(b) Each Lender that is not a United States person (as such term is defined in
Section 770 l(a)(30) of the Code) (each, a “Foreign Lender”) agrees to deliver
to Borrower and Agent on or prior to the Closing Date, or in the case of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 10.12 (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if such Lender is a “bank” within the
meaning of Section 881(c)(3)(a) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN, W-8ECI or W-81MY, with
appropriate attachments (or successor forms), certifying such Lender’s
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or
(ii) if such Lender is not a “bank” within the meaning of Section 88l(c)(3)(a)
of the Code, Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY with
appropriate attachments as set forth in clause (i) above, or (x) a certificate
in form and substance satisfactory to Agent, and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8BEN (or successor
form) certifying such Lender’s entitlement to an exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Lender agrees that it will
deliver updated versions of the foregoing, as applicable, whenever the previous
certification has become inaccurate in any material respect, together with such
other forms as may be required in order to confirm or establish the entitlement
of such Lender to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note.
Notwithstanding anything to the contrary contained in Sections 2.15(a) and
2.16(a), but subject to the immediately succeeding sentence, (x) Borrower shall
be entitled, to the extent it is required to do so by law, to deduct or withhold
Taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender, to the extent that such Lender has not
provided to Borrower, IRS Forms that establish a complete exemption from such
deduction or withholding, and (y) Borrower shall not be obligated pursuant to
Sections 2.15(a) and 2.16(a) hereof to gross-up payments to be made to a Lender
in respect of Taxes imposed by the United States or to indemnify such Lender for
any withholding Taxes imposed by the United States if (i) such Lender has not
provided to Borrower the IRS Forms required to be provided to Borrower pursuant
to this Section or (ii) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such Taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section, Borrower agrees to pay additional amounts and to indemnify each
Lender in the manner set forth in Sections 2.15(a) and 2.16(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Closing Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.

(c) Each Lender agrees to use reasonable efforts to avoid or to minimize any
amounts which might otherwise be payable pursuant to this Section 2.16; provided
however, that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in its
sole discretion to be material.

 

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(d) If Borrower pays any additional amount pursuant to this Section 2.16, with
respect to a Lender, such Lender shall use reasonable efforts to obtain a refund
of tax or credit against its tax liabilities on account of such payment;
provided that, such Lender shall have no obligation to use such reasonable
efforts if either (i) it is in an excess foreign tax credit position or (ii) it
believes in good faith, in its sole discretion, that claiming a refund or credit
would cause materially adverse tax consequences to it. In the event that such
Lender receives such a refund or credit, such Lender shall pay to Borrower an
amount that such Lender reasonably determines is equal to the net tax benefit
obtained by such Lender as a result of such payment by Borrower. In the event
that no refund or credit is obtained with respect to Borrower’s payments to such
Lender pursuant to this Section, then such Lender shall upon request provide a
certification that such Lender has not received a refund or credit for such
payments. Nothing contained in this Section shall require a Lender to disclose
or detail the basis of its calculation of the amount of any tax benefit or any
other amount or the basis of its determination referred to in the proviso to the
first sentence of this Section 2.16 to Borrower or any other party.

(e) The agreements in this Section 2.16 shall survive the termination of this
Agreement and the payment of the Obligations.

2.17 Replacement of Lenders:

(a) Borrower shall be permitted to replace any Lender that (i) requests (or
requests on behalf of a participant) reimbursement for amounts owing, or payment
of any amount required, pursuant to Sections 2.14, 2.15, or 2.16; or
(ii) defaults in its obligation to make Loans or to reimburse Issuing Bank for
any draws on any Letter of Credit hereunder, with a replacement financial
institution; provided that, (A) such replacement does not conflict with any
Requirement of Law, (B) no Event of Default shall have occurred and be
continuing at the time of such replacement, (C) prior to any such replacement,
such Lender shall have taken no action so as to eliminate the continued need for
payment of amounts owing pursuant to Sections 2.14, 2.15, or 2.16; (D) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(E) Borrower shall be liable to such replaced Lender under Section 2.10 if any
LIBOR Rate Loan owing to such replaced Lender shall be purchased other than on
the last day of the LIBOR Interest Period relating thereto, (F) the replacement
financial institution, if not already a Lender, shall be reasonably satisfactory
to Agent and Borrower (such approvals not to be unreasonably withheld), (G) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 10.12 (provided that, Borrower shall be obligated to
pay the registration and processing fee referred to therein), (H) until such
time as such replacement shall be effective, Borrower shall pay all additional
amounts (if any) required pursuant to Sections 2.14, 2.15, or 2.16, as the case
may be, and (I) any such replacement shall not be deemed to be a waiver of any
rights that Borrower, Agent or any other Lender shall have against the replaced
Lender. It is understood and agreed that if any Lender replaced hereunder fails
to execute an Assignment Agreement, it shall be deemed to have entered into such
Assignment Agreement and such Assignment Agreement shall be effective as against
such Lender.

(b) In the event that Borrower requests but does not obtain the consent required
by Section 10.11 for any amendment, waiver or consent requiring the consent of
all Lenders, then Borrower shall be permitted to replace all (but not less than
all) non-consenting Lenders with one or

 

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more replacement financial institutions; provided that, (i) such replacement
does not conflict with any Requirement of Law, (ii) each replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (iii) Borrower shall be
liable to such replaced Lender under Section 2.10 if any LIBOR Rate Loan owing
to such replaced Lender shall be purchased other than on the last day of the
LIBOR Interest Period relating thereto, (iv) each replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to Agent
and Borrower (such approvals not to be unreasonably withheld), and (v) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 10.12 (provided that, Borrower shall be obligated to
pay the registration and processing fee referred to therein). It is understood
and agreed that if any Lender replaced hereunder fails to execute an Assignment
Agreement, it shall be deemed to have entered into such Assignment Agreement.

SECTION 3. COLLATERAL

3.1 Description: As security for the payment of the Obligations, and
satisfaction by Borrower of all covenants and undertakings contained in this
Agreement and the other Loan Documents, Borrower hereby assigns and grants to
Agent, for the ratable benefit of Secured Parties, a continuing first lien on
and security interest in, upon and to all assets of Borrower, including but not
limited to the following property, all whether now owned or hereafter acquired,
created or arising and wherever located (other than Excluded Property):

(i) Accounts - All Accounts;

(ii) Chattel Paper - All Chattel Paper;

(iii) Documents - All Documents;

(iv) Instruments - All Instruments;

(v) Inventory - All Inventory;

(vi) General Intangibles - All General Intangibles;

(vii) Equipment - All Equipment;

(viii) Fixtures - All Fixtures;

(ix) Deposit Accounts - All Deposit Accounts;

(x) Goods - All Goods;

(xi) Letter of Credit Rights - All Letter of Credit Rights;

(xii) Supporting Obligations - All Supporting Obligations;

(xiii) Investment Property - All Investment Property (including all equity
interests in any Sponsored CDO Offering);

 

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(xiv) Management Fees - All fees arising under any Management Agreement except
for the Excluded Management Fees;

(xv) Commercial Tort Claims - All Commercial Tort Claims identified and
described on Schedule “5.20” (as amended or supplemented from time to time);

(xvi) Property in Agent’s, Issuing Bank’s or any Lender’s Possession - All
Property of any Borrower, now or hereafter in Agent’s, Issuing Bank’s or any
Lender’s possession; and

(xvii) Proceeds - The Proceeds (including, without limitation, insurance
proceeds), whether cash or non-cash, of all of the foregoing property described
in clauses (i) thorough (xvi).

3.2 Lien Documents: As Agent deems necessary at Closing and thereafter, Borrower
shall execute and deliver to Agent, or have executed and delivered (all in form
and substance reasonably satisfactory to Agent):

(a) Financing statements pursuant to the UCC, which Agent may file in any
jurisdiction where Borrower is organized and in any other jurisdiction that
Agent deems appropriate;

(b) Duly executed Notice Letters to be sent to, and acknowledged by, each
trustee under each Management Agreement; and

(c) Any other agreements, documents, instruments and writings, including,
without limitation, intellectual property security agreements, reasonably
required by Agent to evidence, perfect or protect Lenders’ liens and security
interest in the Collateral or as Agent may reasonably request from time to time.

3.3 Other Actions: (a) In addition to the foregoing, Borrower shall do anything
further that may be reasonably required by Agent to secure Lenders and
effectuate the intentions and objects of this Agreement, including, but not
limited to, the execution and delivery of security agreements, contracts and any
other documents required hereunder. At Agent’s reasonable request, Borrower
shall also promptly deliver (with execution by Borrower of all necessary
documents or forms to reflect Agent’s Lien thereon) to Agent as bailee for
Lenders, all items for which Lenders must receive possession to obtain a
perfected security interest, including without limitation, all certificates
(including any certificates representing an equity interest in a Sponsored CDO
Offering), notes, letters of credit, documents of title, Chattel Paper,
Warehouse Receipts, Instruments, and any other similar instruments constituting
Collateral.

(b) Agent is hereby authorized to file financing statements and amendments to
financing statement without Borrower’s signature, in accordance with the UCC.
Borrower hereby authorizes Agent to file all such financing statement and
amendments to financing statement describing the collateral in any filing office
as Agent, in its sole discretion may determine, including financing statement
listing “All Assets” in the collateral description therein. Borrower agrees to
comply with the requests of Agent in order for Agent to have and maintain a
valid and perfected first security interest in the Collateral including, without
limitation, executing and causing any other

 

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Person to execute such documents as Agent may require to obtain Control (as
defined in the UCC) over all Deposit Accounts, Letter of Credit Rights and
Investment Property.

3.4 Searches: (a) Agent shall, prior to or at Closing, and thereafter as Agent
may reasonably determine from time to time, at Borrower’s expense, obtain the
following searches (the results of which are to be consistent with the
warranties made by Borrower in this Agreement):

(i) UCC searches with the Secretary of State and local filing office of each
state where Borrower or any Guarantor is organized, maintains its executive
office, a place of business, or assets; and

(ii) Judgment, federal tax lien and corporate tax lien searches, in all
applicable filing offices of each state searched under subparagraph (a) above.

(b) Borrower shall, prior to or at Closing and at its expense, obtain and
deliver to Agent good standing certificates showing each Borrower and each
Guarantor to be in good standing in its state of organization and in each other
state in which it is doing and presently intends to do business.

3.5 [Reserved].

3.6 Filing Security Agreement: A carbon, photographic or other reproduction or
other copy of this Agreement or of a financing statement is sufficient as and
may be filed in lieu of a financing statement.

3.7 Power of Attorney: Each of the officers of Agent is hereby irrevocably made,
constituted and appointed the true and lawful attorney for Borrower (without
requiring any of them to act as such) with full power of substitution to:
(a) execute and/or file in the name of Borrower any financing statements,
schedules, assignments, instruments, documents and statements that Borrower is
obligated to give Agent hereunder or is necessary to perfect (or continue or
evidence the perfection of such security interest or Lien) Agent’s security
interest or Lien in the Collateral; and (b) following the occurrence of an Event
of Default to (i) endorse the name of Borrower upon any and all checks, drafts,
money orders and other instruments for the payment of monies that are payable to
Borrower and constitute collections on Borrower’s Accounts or proceeds of other
Collateral and (ii) do such other and further acts and deeds in the name of
Borrower that Agent may reasonably deem necessary or desirable to enforce any
Account or other Collateral.

SECTION 4. CLOSING AND CONDITIONS PRECEDENT TO ADVANCES

Closing under this Agreement is subject to the following conditions precedent
(all documents other than those set forth in Section 4.9 to be in form and
substance satisfactory to Agent and Agent’s counsel):

4.1 Resolutions, Opinions, and Other Documents: Borrower shall have delivered or
caused to be delivered to Agent the following:

(a) this Agreement, the Term Loan Notes and the Security Documents, all properly
executed by Borrower and Guarantors, as applicable;

 

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(b) certified copies of (i) resolutions of the board of directors or managers
(as applicable) of Borrower and each Guarantor authorizing the execution,
delivery and performance of this Agreement, the Notes to be issued hereunder and
each other Loan Document required to be executed by any Section hereof and
(ii) Borrower’s and each Guarantor’s Articles or Certificate of Incorporation or
Certificate of Organization (as applicable) and By-laws or Operating Agreement
(as applicable) or written certifications that there have been no amendments,
modifications or other changes to any such organizational document since such
documents were delivered in conjunction with the Existing Loan Agreement;

(c) an incumbency certificate for Borrower identifying all Authorized Officers,
with specimen signatures and an incumbency certificate for each Guarantor
identifying all individuals authorized to execute any applicable Loan Document,
with specimen signatures;

(d) a written opinion of Borrower’s and each Guarantor’s independent counsel
addressed to Agent for the benefit of all Lenders and opinions of such other
counsel as Agent deems necessary;

(e) certification by the chief financial officer of Borrower that there has not
occurred any material adverse change in the operations and condition (financial
or otherwise) of Borrower since December 31, 2009;

(f) payment by Borrower of all fees owing to Agent and/or Lenders and Expenses
associated with Loans or Letters of Credit incurred to the Closing Date;

(g) Searches and certificates required by Section 3.4 above;

(h) Deposit Account control agreements, if necessary;

(i) Copies of all Management Agreements or written certifications that there
have been no amendments, modifications or other changes to any such document
since such documents were delivered in conjunction with the Existing Loan
Agreement;

(j) Sponsored CDO Equity Interests;

(k) A certified copy of the Master Agreement and all other Transaction Documents
and a certification that the initial transactions contemplated thereunder have
closed and that an amount not less than $11,700,000 has been deposited in the
escrow account established under the Escrow Agreement;

(l) Borrower shall have repaid all existing Indebtedness of Borrower under the
Existing Loan Agreement, including payment of the sum of $450,000 required under
the terms of the Fee Letter (as defined in the Existing Loan Agreement); and

(m) Such other documents reasonably requested by Agent.

4.2 Absence of Certain Events: At the Closing Date, no Event of Default or
Default hereunder shall have occurred and be continuing.

 

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4.3 Warranties and Representations at Closing: The warranties and
representations contained in Section 5 as well as any other Section of this
Agreement shall be true and correct in all respects on the Closing Date.

4.4 Compliance with this Agreement: Borrower shall have performed and complied
with all agreements, covenants and conditions contained herein including,
without limitation, the provisions of Sections 6 and 7 hereof, which are
required to be performed or complied with by Borrower before or at the Closing
Date.

4.5 Officer’s Certificate: Agent shall have received a certificate dated the
Closing Date and signed by the chief financial officer of Borrower certifying
that all of the conditions specified in this Section have been fulfilled.

4.6 Closing: Subject to the conditions of this Section, the Loans and Letters of
Credit shall be made available on such date (the “Closing Date”) and at such
time as may be mutually agreeable to the parties contemporaneously with the
execution hereof (“Closing”).

4.7 Waiver of Rights: By completing the Closing hereunder, or by making Advances
hereunder, Agent does not thereby waive a breach of any warranty or
representation made by Borrower hereunder or under any agreement, document, or
instrument delivered to Agent or otherwise referred to herein, and any claims
and rights of Agent resulting from any breach or misrepresentation by Borrower
are specifically reserved by Agent.

4.8 Conditions for Future Advances: The making of Advances under the Term Loan
Facility in any form following the Closing Date is subject to the following
conditions precedent (all instruments, documents and agreements to be in form
and substance satisfactory to Agent and its counsel) following the Closing Date:

(a) This Agreement and each of the other Loan Documents shall be effective;

(b) No event or condition shall have occurred or become known to Borrower, or
would result from the making of any requested Advance, which could have a
Material Adverse Effect;

(c) No Default or Event of Default then exists or after giving effect to the
making of the Advance would exist;

(d) Each Advance is within and complies with the terms and conditions of this
Agreement including, without limitation, the notice provisions contained in
Section 2.4 hereof;

(e) No Lien (other than a Permitted Lien or Lien permitted under Section 7 of
this Agreement) has been imposed on Borrower or any Subsidiary Guarantor;

(f) Each representation and warranty set forth in Section 5 and any other Loan
Document in effect at such time (as amended or modified from time to time) is
then true and correct in all material respects as if made on and as of such date
except to the extent (i) Schedule 5.10(b), 5.11(c), 5.14(b), Schedule C,
Schedule D or any other Schedule attached to this Agreement have been updated by
Borrower in writing from time to time, provided that any such update and

 

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acceptance by Agent and Lenders shall not constitute a waiver of any Default or
Event of Default that may be created by such updates and (ii) such
representations and warranties are made only as of a specific earlier date; and

(g) Borrower shall certify that, pursuant to the Master Agreement, ATP has
acquired additional Assigned CDO Agreements (as defined in the Master Agreement)
in connection with the Subsequent Assigned CDO Agreement Sale and provide a list
of such Assigned CDO Agreements as well as a schedule showing all amounts
attributable thereto deposited into escrow in accordance with the Escrow
Agreement.

4.9 Existing Notes: Agent shall use its reasonable efforts to obtain from each
Lender under the Existing Loan Agreement the promissory notes issued in
connection with the Existing Loan Agreement and return such notes to Parent.

SECTION 5. REPRESENTATIONS AND WARRANTIES

To induce Agent, Lenders and Issuing Bank to complete the Closing and make the
initial Advances under the Term Loan Facility to Borrower, Borrower represents
and warrants to Agent, Issuing Bank and Lenders that:

5.1 Corporate Organization and Validity:

(a) Borrower and each Guarantor (i) is duly organized and validly existing under
the laws of the jurisdiction of its organization, (ii) has the appropriate power
and authority to operate its business and to own its Property and (iii) is duly
qualified, is validly existing and in good standing and has lawful power and
authority to engage in the business it conducts in each state where the nature
and extent of its business requires qualification, except where the failure to
so qualify does not and could not have a Material Adverse Effect. A list of all
states and other jurisdictions where Borrower and each Guarantor is qualified to
do business is shown on Schedule “5.1” attached hereto and made part hereof.

(b) The making and performance of this Agreement and the other Loan Documents
will not violate any Requirement of Law, or Borrower’s or any Guarantor’s
certificate of formation, operating agreement or any other organizational
documents, or violate or result in a default (immediately or with the passage of
time) under any contract, agreement or instrument to which Borrower or such
Guarantor is a party, or by which Borrower or such Guarantor is bound. Neither
Borrower nor any Guarantor is in violation of any term of any agreement or
instrument to which it is a party or by which it may be bound which violation
has or could have a Material Adverse Effect, or of its respective charter,
minutes or bylaw provisions, or certificate of formation, operating agreement or
any other organizational document.

(c) Borrower and each Guarantor has all requisite power and authority to enter
into and perform this Agreement and any Loan Documents to which it is a party,
and to incur the obligations herein provided for, and has taken all proper and
necessary action to authorize the execution, delivery and performance of this
Agreement, and the other Loan Documents as applicable.

 

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(d) This Agreement, the Notes to be issued hereunder, and all of the other Loan
Documents, when delivered, will be valid and binding upon Borrower and each
Guarantor, and enforceable in accordance with their respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.

5.2 Places of Business: The only places of business of Borrower and each
Guarantor, and the places where Borrower and each Guarantor keeps and intends to
keep its Property, are at the addresses shown on Schedule “5.2” attached hereto
and made part hereof.

5.3 Pending Litigation: There are no judgments or judicial or administrative
orders or proceedings pending, or to the knowledge of Borrower, threatened,
against Borrower or any Guarantor in any court or before any Governmental
Authority except as shown on Schedule “5.3” attached hereto and made part hereof
or to the extent such judgments, administrative orders or proceedings could not
result in a Material Adverse Effect. To the knowledge of Borrower, there are no
investigations (civil or criminal) pending or threatened against Borrower or any
Guarantor, in any court or before any Governmental Authority. Neither Borrower
nor any Guarantor is in default with respect to any order of any Governmental
Authority except where such default could not result in an Material Adverse
Effect. To the knowledge of Borrower, no shareholder or executive officer of
Borrower or any Guarantor, has been indicted in connection with or convicted of
engaging in any criminal conduct, or is currently subject to any lawsuit or
proceeding or under investigation in connection with any anti-racketeering or
other conduct or activity which may result in the forfeiture of any property to
any Governmental Authority.

5.4 Title to Properties: Borrower and each Guarantor has good and marketable
title in fee simple (or its equivalent under applicable law) to all the Property
it purports to own, free from Liens and free from the claims of any other
Person, except for Permitted Liens.

5.5 Governmental Consent: Neither the nature of Borrower or any Guarantor or of
its respective business or property, nor any relationship between Borrower or
any Guarantor, and any other Person, nor any circumstance affecting Borrower or
any Guarantor in connection with the issuance or delivery of this Agreement, the
Notes or any other Loan Documents is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of Borrower or any Guarantor, except those
that have been made or obtained or where such failure could not result in an
Material Adverse Effect.

5.6 Taxes: All tax returns required to be filed by Borrower and any Guarantor in
any jurisdiction have been filed, and all taxes, assessments, fees and other
governmental charges upon Borrower and any Guarantor, or upon any of its
respective Property, income or franchises, which are shown to be due and payable
on such returns have been paid, except for those taxes being contested in good
faith with due diligence by appropriate proceedings for which appropriate
reserves have been maintained under GAAP and as to which no Lien has been
entered. Borrower is not aware of any proposed additional tax assessment or tax
to be assessed against or applicable to Borrower and any Guarantor.

5.7 Financial Statements: The annual audited consolidated (if applicable)
balance sheet of Cohen & Company as of December 31, 2009, and the related
statements of profit and loss,

 

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stockholder’s equity and cash flow as of such date accompanied by reports
thereon from Cohen & Company’s independent certified public accountants
(complete copies of which have been delivered to Agent), and the interim
consolidated (if applicable) balance sheet of Cohen & Company as of March 31,
2010, and the related statements of profit and loss, stockholder’s equity and
cash flow as of such date have been prepared in accordance with GAAP and present
fairly the financial position of Cohen & Company and its Subsidiaries as of such
dates and the results of its operations for such periods. The fiscal year for
Borrower currently ends on December 31. Borrower’s and each Guarantor’s federal
tax identification number and state organizational identification number for UCC
purposes are as shown on Schedule “5.7” attached hereto and made part hereof.

5.8 Full Disclosure: The financial statements referred to in Section 5.7 of this
Agreement do not, nor does any other written statement of Borrower to Agent or
any Lender in connection with the negotiation of the Loans, contain any untrue
statement of a material fact. Such statements do not omit a material fact, the
omission of which would make the statements contained therein misleading. There
is no fact known to Borrower which has not been disclosed in writing to Agent
which has or could have a Material Adverse Effect.

5.9 Subsidiaries: No Guarantor has any Subsidiaries or Affiliates, except as
shown on Schedule “5.9” attached hereto and made part hereof.

5.10 Investments, Guarantees, Contracts, etc.:

(a) Other than Permitted Investments, neither Borrower nor any Guarantor owns or
holds equity or long term debt investments in, or has any outstanding advances
to, any other Person, except as shown on Schedule “5.10(a),” attached hereto and
made part hereof.

(b) Neither Borrower nor any Guarantor has entered into any leases for real or
personal Property (whether as landlord or tenant or lessor or lessee), except as
shown on Schedule “5.10(b),” attached hereto and made part hereof.

(c) Neither Borrower nor any Guarantor is a party to any contract or agreement,
or subject to any charter or other corporate restriction, which has or could
have a Material Adverse Effect.

(d) Except as otherwise specifically provided in this Agreement, neither
Borrower nor any Guarantor has agreed or consented to cause or permit any of its
Property whether now owned or hereafter acquired to be subject in the future
(upon the happening of a contingency or otherwise), to a Lien not permitted by
this Agreement.

5.11 Government Regulations, etc.:

(a) The use of the proceeds of and Borrower’s issuance of the Notes will not
directly or indirectly violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations U, T and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter II. Borrower does
not own or intend to carry or purchase any “margin stock” within the meaning of
said Regulation U.

 

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(b) Borrower and each Guarantor has obtained all licenses, permits, franchises
or other governmental authorizations necessary for the ownership of its Property
and for the conduct of its business.

(c) As of the date hereof, no employee benefit plan (“Pension Plan”), as defined
in Section 3(2) of ERISA, maintained by Borrower or under which Borrower could
have any liability under ERISA (i) has failed to meet the minimum funding
standards established in Section 302 of ERISA, (ii) has failed to comply in a
material respect with all applicable requirements of ERISA and of the Internal
Revenue Code, including all applicable rulings and regulations thereunder,
(iii) has engaged in or been involved in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Internal Revenue Code which would
subject Borrower to any material liability, or (iv) has been terminated if such
termination would subject Borrower to any material liability. Borrower has not
assumed, or received notice of a claim asserted against Borrower for, withdrawal
liability (as defined in Section 4207 of ERISA) with respect to any multi
employer pension plan and is not a member of any Controlled Group (as defined in
ERISA). Borrower has timely made all contributions when due with respect to any
multi employer pension plan in which it participates and no event has occurred
triggering a claim against Borrower for withdrawal liability with respect to any
multi employer pension plan in which Borrower participates. All Employee Benefit
Plans and multi employer pension plans in which Borrower participates are shown
on Schedule “5.11(c)” attached hereto and made part hereof.

(d) Neither Borrower nor any Guarantor is in violation of or receipt of written
notice that it is in violation of any applicable statute, regulation or
ordinance of the United States of America, or of any state, city, town,
municipality, county or of any other jurisdiction, or of any agency, or
department thereof (including without limitation, Environmental Laws or
securities laws and regulations), a violation of which causes or could cause a
Material Adverse Effect.

(e) Borrower and each Guarantor is current with all reports and documents
required to be filed with any state or federal securities commission or similar
agency and is in full compliance in all material respects with all applicable
rules and regulations of such commissions.

5.12 Business Interruptions: Within five (5) years prior to the date hereof,
none of the business, Property or operations of Borrower or any Guarantor have
been materially and adversely affected in any way by any casualty, strike,
lockout, combination of workers, order of the United States of America, or any
state or local government, or any political subdivision or agency thereof,
directed against Borrower or any Guarantor. There are no pending or, to
Borrower’s knowledge, threatened labor disputes, strikes, lockouts or similar
occurrences or grievances affecting Borrower or any Guarantor. No labor contract
of Borrower or any Guarantor is scheduled to expire prior to the Term Loan
Maturity Date.

5.13 Names and Intellectual Property:

(a) Within five (5) years prior to the Closing Date, Borrower has not and no
Guarantor has conducted business under or used any other name (whether corporate
or assumed) except for the names shown on Schedule “5.13(a)” attached hereto and
made part hereof. Borrower and each Guarantor, as applicable, is the sole owner
of all names listed on such Schedule “5.13(a)” and any and all business done and
all invoices issued in such trade names are Borrower’s or such

 

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Guarantor’s sales, business and invoices. Each trade name of Borrower and each
Guarantor, as applicable, represents a division or trading style of Borrower and
such Guarantor, and not a separate Subsidiary or Affiliate or independent
entity.

(b) All trademarks, service marks, patents or copyrights which Borrower or any
Guarantor uses, plans to use or has a right to use are shown on Schedule
“5.13(b)” attached hereto and made part hereof, and Borrower and such Guarantor,
as applicable, is the sole owner of such Property except to the extent any other
Person has claims or rights in such Property, as such claims and rights are
shown on Schedule “5.13(b)”. Borrower is not in violation of any rights of any
other Person with respect to such Property.

(c) Except as shown on Schedule “5.13(c)” attached hereto and made part hereof,
(i) neither Borrower nor any Guarantor requires any copyrights, patents,
trademarks or other intellectual property, or any license(s) to use any patents,
trademarks or other intellectual property in order to provide services to its
customers in the ordinary course of business; and (ii) Agent will not require
any copyrights, patents, trademarks or other intellectual property or any
licenses to use the same in order to provide such services after the occurrence
of an Event of Default.

5.14 Other Associations:

(a) Neither Borrower nor any Guarantor is engaged, and has any interest in, any
joint venture or partnership with any other Person except as shown on Schedule
“5.14(a),” attached hereto and made part hereof.

(b) Schedule “5.14(b),” attached hereto and made part hereof, shows, as of the
Closing Date, all equity interests owned or held by Borrower or a Guarantor in
connection with or related to, a Sponsored CDO Offering or which is otherwise
related to a structured finance transaction sponsored, managed or originated by
Borrower or a Guarantor.

5.15 Environmental Matters: Except as shown on Schedule “5.15,” attached hereto
and made part hereof:

(a) To the best of Borrower’s knowledge, no Property presently owned, leased or
operated by Borrower or any Guarantor contains, or has previously contained, any
Hazardous Substances in amounts or concentrations which (i) constitute or
constituted a violation of, or (ii) could give rise to liability under, any
Environmental Law.

(b) To the best of Borrower’s knowledge, Borrower and each Guarantor is in
compliance, and for the duration of all applicable statutes of limitations
periods, has been in compliance with all applicable Environmental Laws in all
material respects, and there is no contamination at, under or about any
properties presently owned, leased, or operated by Borrower or any Guarantor or
violation of any Environmental Law with respect to such properties which could
reasonably be expected to interfere with any of their continued operations or
reasonably be expected to impair the fair saleable value thereof.

(c) Neither Borrower nor any Guarantor has received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or

 

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compliance assessment with Environmental Laws and Borrower has no knowledge that
any such notice will be received or is being threatened.

(d) Hazardous Substances have not been transported or disposed of in a manner or
to a location which are reasonably likely to give rise to liability of Borrower
or any Guarantor under any applicable Environmental Law.

(e) No judicial proceeding or governmental or administrative action is pending,
or to the knowledge of Borrower, threatened under any Environmental Law to which
Borrower or any Guarantor is, or to Borrower’s knowledge will be, named as a
party, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding, the implementation of which is reasonably likely to
have a Material Adverse Effect on any natural resources or on Borrower’s
business, financial condition, Property or prospects under any Environmental
Law.

5.16 Regulation O: No director, executive officer or principal shareholder of
Borrower or any Guarantor is a director, executive officer or principal
shareholder of Agent or any Lender. For the purposes hereof the terms
“director,” “executive officer” and “principal shareholder” (when used with
reference to Agent or any Lender), have the respective meanings assigned thereto
in Regulation O issued by the Board of Governors of the Federal Reserve System.

5.17 Capital Stock: As of the Closing Date, the authorized and outstanding
Capital Stock of Borrower, each Guarantor and each other Subsidiary is as shown
on Schedule “5.17” attached hereto and made part hereof. All of the Capital
Stock of Borrower, each Guarantor and each other Subsidiary has been duly and
validly authorized and issued and is fully paid and non-assessable and has been
sold and delivered to the holders thereof in compliance with, or under valid
exemption from, all Federal and state laws and the rules and regulations of all
Governmental Authorities governing the sale and delivery of securities. Except
for the rights and obligations shown on Schedule “5.17”, there are no
subscriptions, warrants, options, calls, commitments, rights or agreements by
which Borrower or any of the shareholders of Borrower or any Subsidiary
Guarantor is bound relating to the issuance, transfer, voting or redemption of
shares of its Capital Stock or any pre-emptive rights held by any Person with
respect to the shares of Capital Stock of Borrower. Except as shown on Schedule
“5.17,” neither Borrower nor any Subsidiary Guarantor has issued any securities
convertible into or exchangeable for shares of its Capital Stock or any options,
warrants or other rights to acquire such shares or securities convertible into
or exchangeable for such shares.

5.18 Solvency: After giving effect to the transactions contemplated under this
Agreement, Borrower and the Guarantors taken as a whole are solvent, are able to
pay their debts as they become due, and have capital sufficient to carry on
their business and all businesses in which they are about to engage, and now own
Property having a value both at fair valuation and at present fair salable value
greater than the amount required to pay Borrower’s and Guarantors’ debts.
Neither Borrower nor the Guarantors, taken as a whole, will be rendered
insolvent by the execution and delivery of this Agreement or any of the other
Loan Documents executed in connection with this Agreement or by the transactions
contemplated hereunder or thereunder.

5.19 Perfection and Priority: This Agreement and the other Loan Documents are
effective to create in favor of Agent, for the ratable benefit of Agent, Issuing
Bank and Lenders legal, valid

 

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and enforceable Liens in all right, title and interest of Borrower and each
Guarantor in the Collateral, and under existing financing statements or when
financing statements have been filed in the offices of the jurisdictions shown
on Schedule “5.19,” attached hereto and made part hereof under Borrower’s or
such Guarantor’s name, Borrower and each Guarantor will have granted to Agent,
for the ratable benefit of Secured Parties and Agent will have perfected first
priority Liens in the Collateral, superior in right to any and all other Liens,
existing or future other than Permitted Liens.

5.20 Commercial Tort Claims: As of the Closing Date, neither Borrower nor any
Guarantor is a party to any Commercial Tort Claims, except as shown on Schedule
“5.20” attached hereto and made part hereof.

5.21 Letter of Credit Rights: As of the Closing Date, neither Borrower nor any
Guarantor has any Letter of Credit Rights, except as shown on Schedule “5.21,”
attached hereto and made part hereof.

5.22 Deposit Accounts: Borrower has furnished to Agent a certified list of each
Borrower’s and Guarantor’s Deposit Accounts, which list is true, accurate and
complete as of the Closing Date.

5.23 Anti-Terrorism Laws:

(a) General. Neither Borrower nor any Affiliate of Borrower is in violation of
any Anti-Terrorism Law or engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

(b) Executive Order No. 13224. Neither Borrower nor any Affiliate of Borrower,
or to Borrower’s knowledge, any of its respective agents acting or benefiting in
any capacity in connection with the Loans, Letters of Credit or other
transactions hereunder, is any of the following (each a “Blocked Person”):

(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;

(ii) a Person owned or controlled by, or acting for or on behalf of, any Person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order No. 13224;

(iii) a Person with which Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

(iv) a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order No. 13224;

(v) a Person that is named as a “specially designated national” on the most
current list published by the U.S. Treasury Department Office of Foreign Asset
Control at its official website or any replacement website or other replacement
official publication of such list; or

 

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(vi) a Person who is affiliated with a Person listed above.

5.24 Investment Company Act: Neither Borrower nor any Guarantor is (a) an
“investment company” registered or required to be registered under the
Investment Company Act of 1940, as amended, nor is it controlled by such a
company; or (b) subject to any other law which purports to regulate or restrict
the ability to borrow money or to consummate the transactions contemplated by
this Agreement or the other Loan Documents.

5.25 Transaction Documents: Borrower has delivered to Agent true and correct
copies of the Transaction Documents and all amendments, waivers and side letters
or agreements relating thereto. The Transaction Documents are valid and binding
upon CCFM and Cohen & Company and, to Borrower’s knowledge, upon the other
parties thereto, and are enforceable in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles. All of the
transactions contemplated under the Transaction Documents are, and consummation
thereof shall be, in compliance with all material Requirements of Law.

SECTION 6. BORROWER’S AFFIRMATIVE COVENANTS

Borrower covenants that until all of the Obligations are paid and satisfied in
full and the Term Loan Facility and Letters of Credit have been terminated,
that:

6.1 Payment of Taxes and Claims: Borrower shall pay, and shall cause each
Guarantor to pay, before they become delinquent, all taxes, assessments and
governmental charges, or levies imposed upon it, or upon Borrower’s or any
Guarantor’s Property, and all claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other Persons, entitled to the benefit of
statutory or common law Liens which, in any case, if unpaid, would result in the
imposition of a Lien upon its Property; provided however, that, neither Borrower
nor any Guarantor shall be required to pay any such tax, assessment, charge,
levy, claim or demand if the amount, applicability or validity thereof, shall at
the time, be contested in good faith and by appropriate proceedings, and if
adequate reserves in respect thereof have been set aside, if so required in
accordance with GAAP; which deferment of payment is permissible so long as no
Lien other than a Permitted Lien has been entered and Borrower’s or such
Guarantor’s title to, and its right to use, its Property are not materially
adversely affected thereby.

6.2 Maintenance of Properties and Corporate Existence:

(a) Property - Each Person included in the Dekania Group shall maintain its
Property in good condition (normal wear and tear excepted) make all necessary
renewals, replacements, additions, betterments and improvements thereto and will
pay and discharge when due the cost of repairs and maintenance to its Property,
and will pay all rentals when due for all leased real estate.

(b) Property Insurance, Public and Products Liability Insurance - Each Person
included in the Dekania Group shall maintain insurance (or have insurance
maintained on its behalf) (i) on all insurable tangible Property against fire,
flood, casualty and such other hazards (including, without limitation, extended
coverage, workmen’s compensation, boiler and machinery, with

 

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inflation coverage by endorsement) and (ii) against public liability, product
liability and business interruption, in each case in such amounts, with such
deductibles and with such insurers as are customarily used by companies
operating in the same industry as Borrower. At or prior to Closing, Borrower
shall furnish Agent with duplicate original policies of insurance or such other
evidence of insurance as Agent may require, and any certificates of insurance
shall be issued on Acord Form-27. In the event Borrower fails to procure or
cause to be procured any such insurance or to timely pay or cause to be paid the
premium(s) on any such insurance, Agent may do so for Borrower, but Borrower
shall continue to be liable for the same. The policies of all such casualty
insurance shall contain standard Lender’s Loss Payable Clauses (and, with
respect to liability and interruption insurance, additional insured clauses)
issued in favor of Agent. Such policies shall expressly provide that the
requisite insurance cannot be altered or canceled without thirty (30) days prior
written notice to Agent and shall insure Agent notwithstanding the act or
neglect of any Person included in the Dekania Group. Effective upon an Event of
Default, Borrower hereby appoints Agent as Borrower’s attorney-in-fact,
exercisable at Agent’s option to endorse any check which may be payable to any
Person included in the Dekania Group in order to collect the proceeds of such
insurance and any amount or amounts collected by Agent pursuant to the
provisions of this Section may be applied by Agent, in its sole discretion, to
any Obligations or to repair, reconstruct or replace the loss of or damage to
Collateral as Agent in its discretion may from time to time determine. Borrower
further covenants that all insurance premiums owing under its current policies
have been paid. Borrower shall notify Agent, immediately, upon Borrower’s
receipt of a notice of termination, cancellation, or non-renewal from its
insurance company of any such policy.

(c) Financial Records - Borrower shall keep, and shall cause each Guarantor to
keep, current and accurate books of records and accounts in which full and
correct entries will be made of all of its business transactions, and will
reflect in its financial statements adequate accruals and appropriations to
reserves, all in accordance with GAAP. Borrower shall not change its fiscal year
end date without the prior written consent of Agent.

(d) Corporate Existence and Rights - Borrower shall do, and shall cause each
Guarantor to do (or cause to be done), all things necessary to preserve and keep
in full force and effect its existence, good standing, rights and franchises
except which failure to do so could not cause or result in a Material Adverse
Effect.

(e) Compliance with Laws - Borrower shall be, and shall cause each Guarantor to
be, in compliance with any and all Requirements of Laws to which it is subject,
(including, without limitation, Environmental Laws and securities laws
regulations) and shall obtain any and all licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its Property or to the
conduct of its businesses, which violation or failure to obtain causes or could
cause a Material Adverse Effect. Borrower shall timely satisfy, and shall cause
each Guarantor to timely satisfy, all assessments, fines, costs and penalties
imposed (after exhaustion of all appeals, provided a stay has been put in effect
during such appeal) by any Governmental Authority against Borrower or such
Guarantor, or any Property of Borrower.

6.3 Business Conducted: Each Person included in the Dekania Group shall continue
in the business presently operated by it using its commercially reasonable
efforts to maintain its customers and goodwill. No such Person shall engage
directly or indirectly, in any material respect

 

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in any line of business substantially different from the businesses conducted by
such Person immediately prior to the Closing Date.

6.4 Litigation: Borrower shall give prompt notice to Agent of any litigation
claiming in excess of One Million Dollars ($1,000,000) from Borrower or any
Guarantor, or which may otherwise have a Material Adverse Effect.

6.5 Issue Taxes: Borrower shall pay, and shall cause each Guarantor to pay, all
taxes (other than taxes based upon or measured by any Lender’s income or
revenues or any personal property tax), if any, in connection with the issuance
of the Notes and the recording of any lien documents. The obligations of
Borrower hereunder shall survive the payment of Borrower’s Obligations hereunder
and the termination of this Agreement.

6.6 Bank Accounts: (a) Borrower shall maintain, and shall cause each Guarantor
located in the United States to maintain, major depository and disbursement
account(s) with Agent and (b) Borrower shall establish and shall cause each
Guarantor to establish, within sixty (60) days of the date of this Agreement,
with respect to each Guarantor located outside of the United States that
receives Management Fees, arrangements reasonably satisfactory to Agent for the
deposit of, or transfer of, all Management Fees to an account controlled by
Agent.

6.7 Employee Benefit Plans: Each Person included in the Dekania Group shall
(a) fund and cause each such Person to fund all of its Pension Plan(s) in a
manner that will satisfy the minimum funding standards of Section 302 of ERISA,
(b) furnish Agent, promptly upon Agent’s request, with copies of all reports or
other statements filed with the United States Department of Labor, the PBGC or
the IRS with respect to all Pension Plan(s), or which Borrower, or any member of
a Controlled Group, may receive from the United States Department of Labor, the
IRS or the PBGC, with respect to all such Pension Plan(s), and (c) promptly
advise Agent of the occurrence of any reportable event (as defined in
Section 4043 of ERISA, other than a reportable event for which the thirty (30)
day notice requirement has been waived by the PBGC) or prohibited transaction
(under Section 406 of ERISA or Section 4975 of the Internal Revenue Code) with
respect to any such Pension Plan(s) and the action which Borrower proposes to
take with respect thereto. Borrower shall make, and shall cause each Person
included in the Dekania Group to make, all contributions when due with respect
to any multi employer pension plan in which it participates and will promptly
advise Agent upon (x) its receipt of notice of the assertion against Borrower or
any Person included in the Dekania Group of a claim for withdrawal liability,
(y) the occurrence of any event which, to the best of Borrower’s knowledge,
would trigger the assertion of a claim for withdrawal liability against any
Person included in the Dekania Group, and (z) upon the occurrence of any event
which, to the best of Borrower’s knowledge, would place any Person included in
the Dekania Group in a Controlled Group as a result of which any member
(including Borrower) thereof may be subject to a claim for withdrawal liability,
whether liquidated or contingent.

6.8 Financial Covenants:

(a) Consolidated Net Worth - The Dekania Group shall maintain at all times
Consolidated Net Worth of not less than $40,000,000, to be tested quarterly at
the end of each fiscal quarter.

 

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(b) Fixed Charge Coverage Ratio - The Dekania Group shall maintain, commencing
with the fiscal quarter ending September 30, 2010, a Fixed Charge Coverage
Ratio, to be tested quarterly as of each fiscal quarter end, of not less than
1.20 to 1.0.

(c) Leverage Ratio - The Dekania Group shall maintain, commencing with the
fiscal quarter ending September 30, 2010, a Leverage Ratio, to be tested
quarterly as of each fiscal quarter end, of not greater than 1.30 to 1.0:

(d) Debt Service Coverage Ratio - The Dekania Group shall maintain, commencing
with the fiscal quarter ending September 30, 2010, a Debt Service Coverage
Ratio, to be tested quarterly as of each fiscal quarter end, of not less than
1.50 to 1.0.

6.9 Financial and Business Information: Borrower shall deliver or cause to be
delivered to Agent and Lenders the following:

(a) Financial Statements and Collateral Reports: such data, reports, statements
and information, financial or otherwise, as Lender may reasonably request,
including, without limitation:

(i) within forty five (45) days after the end of each calendar quarter, the
consolidated cash flow statement and consolidated and consolidating income
statement of Cohen & Company and its Subsidiaries and the consolidated cash flow
statement and consolidated income statement of the Dekania Group for such
quarter and for the expired portion of the fiscal year ending with the end of
such quarter, setting forth in comparative form the corresponding figures for
the corresponding periods of the previous fiscal year, and the consolidated and
consolidating balance sheet of Cohen & Company and its Subsidiaries and the
consolidated balance sheet of the Dekania Group as at the end of such quarter,
setting forth in comparative form the corresponding figures as at the end of the
previous fiscal year, all in reasonable detail and certified by Cohen &
Company’s chief financial officer to have been prepared from the books and
records of Cohen & Company;

(ii) within ninety (90) days after the end of each fiscal year of Cohen &
Company, the consolidated cash flow statement, the consolidated and
consolidating income statement of Cohen & Company and its Subsidiaries for such
year, and the consolidated and consolidating balance sheet of Cohen & Company
and its Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding figures as at the end of and for the
previous fiscal year, all in reasonable detail, including all supporting
schedules, and audited by an independent public accounting firm acceptable to
Agent, and unqualifiedly certified to have been prepared in accordance with
GAAP, and such independent public accountants shall also unqualifiedly certify
that in making the examinations necessary to their certification mentioned above
they have reviewed the terms of this Agreement and the accounts and conditions
of Cohen & Company during the accounting period covered by the certificate and
that such review did not disclose the existence of any condition or event which
constitutes a Default or an Event of Default (or if such conditions or events
existed, describing them) together with copies of any management letters
provided by such accountants to management of Cohen & Company;

 

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(iii) within one hundred twenty (120) days of each fiscal year-end, the Dekania
Group’s annual consolidated financial statement projections for the upcoming
three-year period, in form and substance satisfactory to Agent;

(b) Notice of Event of Default - promptly upon becoming aware of the existence
of any condition or event which constitutes a Default or an Event of Default
under this Agreement, a written notice specifying the nature and period of
existence thereof and what action Borrower or any Guarantor is taking (and
proposes to take) with respect thereto;

(c) Notice of Claimed Default - promptly upon receipt by Borrower, notice of
default, oral or written, given to Borrower or any Guarantor by any creditor for
Indebtedness for borrowed money, otherwise holding long term Indebtedness of
Borrower or such Guarantor in excess of Two Million Five Hundred Thousand
Dollars ($2,500,000);

(d) Securities and Other Reports - if Borrower or any Guarantor shall be
required to file reports with the Securities and Exchange Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act, promptly upon its becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by Borrower or any Guarantor to stockholders generally, and, a
copy of each regular or periodic report, and any registration statement, or
prospectus in respect thereof, filed by Borrower or any Guarantor with any
securities exchange or with federal or state securities and exchange commissions
or any successor agency; and

(e) Transaction Documents - immediately upon knowledge thereof, notice that
(i) ATP (or any successor thereto) has provided notice of a breach of, or
default under the Services Agreement or any other Transaction Document, (ii) ATP
(or any successor thereto) has breached or defaulted under any Transaction
Documents or (iii) or that the Services Agreement or any other Transaction
Document has been terminated.

6.10 Officers’ Certificates: Along with the set of financial statements
delivered to Agent and Lenders at the end of each fiscal quarter pursuant to
Section 6.9(a)(i) hereof and the annual financial statements delivered pursuant
to Section 6.9(a)(ii) hereof, Borrower shall deliver to Agent and Lenders a
certificate (“Quarterly Compliance Certificate”) (in the form of Exhibit “E,”
attached hereto and made part hereof) from the chief financial officer, chief
executive officer or president of Borrower (and as to certificates accompanying
the annual financial statements of Cohen & Company, also certified by Cohen &
Company’s independent certified public accountant) setting forth:

(a) Event of Default - that the signer has reviewed the relevant terms of this
Agreement, and has made (or caused to be made under his/her supervision) a
review of the transactions and conditions of Borrower from the beginning of the
accounting period covered by the financial statements being delivered therewith
to the date of the certificate, and that such review has not disclosed the
existence during such period of any condition or event which constitutes a
Default or an Event of Default or, if any such condition or event exists,
specifying the nature and period of existence thereof and what action Borrower
has taken or proposes to take with respect thereto.

 

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(b) Covenant Compliance - the information (including detailed calculations)
required in order to establish that Borrower is in compliance with the
requirements of Section 6.8 of this Agreement, as of the end of the period
covered by the financial statements delivered.

6.11 Audits and Inspection: Borrower shall permit, and shall cause each
Guarantor to permit, at Agent’s expense, any of Agent’s officers or other
representatives to visit and inspect upon reasonable notice during business
hours any of the locations of Borrower or any Guarantor, to examine all of
Borrower’s or any Guarantor’s books of account, records, reports and other
papers, to make copies and extracts therefrom and to discuss its affairs,
finances and accounts with its officers, employees and independent certified
public accountants. Notwithstanding the foregoing, all such inspections shall,
during the continuance of an Event of Default, be at Borrower’s expense at the
standard rates charged by Agent for such activities (plus Agent’s reasonable
out-of-pocket expenses).

6.12 Reserved:

6.13 Information to Participant: Agent and Lenders may divulge to any
participant, assignee or co-lender or prospective participant, assignee or
co-lender it may obtain in the Loans or any portion thereof, all information,
and furnish to such Person copies of any reports, financial statements,
certificates, and documents obtained under any provision of this Agreement, or
related agreements and documents.

6.14 Material Adverse Developments: Borrower agrees that immediately upon
becoming aware of any development or other information outside the ordinary
course of business and excluding matters of a general economic, financial or
political nature which would reasonably be expected to have a Material Adverse
Effect it shall give to Agent telephonic notice specifying the nature of such
development or information and such anticipated effect. In addition, such verbal
communication shall be confirmed by written notice thereof to Agent on the same
day such verbal communication is made or the next Business Day thereafter.

6.15 Places of Business: Borrower shall give thirty (30) days prior written
notice to Agent of any changes in the location of any of its respective
principal places of business, provided that Borrower may not relocate its
principal place of business outside of the United States. Borrower shall give
prompt written notice to Agent of any changes in the location of the places
where its business and financial records are kept, or the establishment of any
new place of business, or the discontinuance of any existing place of business.

6.16 Commercial Tort Claims: Borrower will, and shall cause each Guarantor to,
immediately notify Agent in writing in the event that Borrower or any Guarantor
becomes a party to or obtains any rights with respect to any Commercial Tort
Claim. Such notification shall include information sufficient to describe such
Commercial Tort Claim, including, but not limited to, the parties to the claim,
the court in which the claim was commenced, the docket number assigned to such
claim, if any, and a detailed explanation of the events that gave rise to the
claim. Borrower shall execute and deliver to Agent all documents and/or
agreements necessary to grant Agent a security interest in such Commercial Tort
Claim to secure the Obligations. Borrower authorizes, and shall cause each
Guarantor to authorize, Agent to file (without Borrower’s or any Guarantor’s

 

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signature) initial financing statements or amendments, as Agent deems necessary
to perfect its security interest in the Commercial Tort Claim.

6.17 Letter of Credit Rights: Borrower shall, and shall cause each Guarantor to,
provide Agent with written notice of any Letters of Credit for which Borrower is
the beneficiary. Borrower shall execute and deliver (or cause to be executed or
delivered) to Agent, all documents and agreements as Agent may require in order
to obtain and perfect its security interest in such Letter of Credit Rights.

6.18 Pledged Collateral: In the event that any Capital Stock of Borrower pledged
by Parent or of a Subsidiary Guarantor pledged by Parent, Borrower or any other
Guarantor is transferred or otherwise exchanged or conveyed to Borrower, another
Guarantor or another Subsidiary of Borrower or any Guarantor (herein a
“Transferee”) as permitted hereunder, Borrower shall cause such Transferee to
execute, and deliver to Agent, a collateral pledge agreement in form and
substance substantially similar to the Collateral Pledge Agreement.

6.19 Management Agreements: Borrower shall notify Agent in writing whenever any
Guarantor enters into a Management Agreement and directs Agent to unilaterally
amend Schedule D to include such additional Management Agreement. Borrower shall
execute and deliver or cause such Guarantor to execute and deliver a Notice
Letter with respect to such Management Agreement.

6.20 Sponsored CDO Equity Interests or Other Capital Stock: Borrower shall
notify Agent in writing whenever Borrower or any Guarantor acquires any
additional Sponsored CDO Equity Interests or Capital Stock of any Person and
directs Agent to unilaterally amend Schedule “5.14(b)” to include the additional
Sponsored CDO Equity Interests on Schedule “5.14(b)”. Borrower shall execute and
deliver or cause such Guarantor to execute and deliver an amendment to the
Collateral Pledge Agreement or any applicable Loan Document, granting Agent, for
the ratable benefit of Secured Parties, a first priority security interest in
such additional Sponsored CDO Equity Interests or Capital Stock.

6.21 Post Closing Requirements: Borrower shall complete each of the post closing
obligations and/or provide to Agent each of the documents, instruments and
agreements listed on Schedule “6.21” attached hereto and made a part hereof on
or before the date set forth in such Schedule.

SECTION 7. BORROWER’S NEGATIVE COVENANTS:

Borrower covenants that until all of the Obligations are paid and satisfied in
full and the Term Loan Facility and each Letter of Credit has been terminated,
that:

7.1 Asset Sales, Merger, Consolidation, Dissolution or Liquidation:

(a) Each Person included in the Dekania Group shall not engage in any Asset Sale
other than: (i) so long as no Default or Event of Default exists or would exist
after giving effect to such Asset Sale and any proceeds are applied as required
under Section 2.9, liquidation of its investments (other than Trading Assets) in
the ordinary course of such Person’s business and transfers, sales and
dispositions of the Permanent Investments, (ii) so long as no Default or Event
of Default exists or would exist after giving effect to such Asset Sales,
transfers, sales and dispositions

 

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of Trading Assets, by such Person in the ordinary course of such Person’s
business, (iii) equipment that is replaced by other equipment comparable or
superior quality and value within ninety (90) days of such Asset Sale; or
(iv) the sale of Capital Stock of any Person included in the Dekania Group so
long as such sale does not result in a Change of Control.

(b) No Person included in the Dekania Group shall merge or consolidate with any
other Person or engage in a division, conversion, dissolution or liquidation;
provided however, that such Person may merge or consolidate with a Person so
long as (i) no Default or Event of Default exists, or would exist after giving
effect to such merger or consolidation; (ii) such Person is the surviving entity
of any such merger or consolidation; and (iii) Agent, for the ratable benefit of
Secured Parties has a first priority Lien on all of the assets and the Capital
Stock of the surviving entity of any such merger or consolidation, subject to
Permitted Liens.

(c) Notwithstanding the foregoing, Borrower shall cause, no later than
December 31, 2010, the dissolution of Brigadier Capital Management, LLC and
Brigadier GP, LLC.

7.2 Acquisitions: No Person included in the Dekania Group shall acquire all or a
material portion of the Capital Stock or assets of any Person in any transaction
or in any series of related transactions or enter into any sale and leaseback
transaction, other than any Capital Stock that is a Permitted Investment.

7.3 Liens and Encumbrances: Borrower shall not, and shall not permit any
Guarantor to: (a) execute a negative pledge agreement with any Person covering
(i) with respect to any Person included in the Dekania Group, any of its
Property (except pursuant to agreements permitted under the definition of
Permitted Indebtedness), or (ii) with respect to any other Guarantor, any of the
Collateral or (b) cause or permit or agree or consent to cause or permit in the
future (upon the happening of a contingency or otherwise), with respect to any
Person included in the Dekania Group its Property (including, without
limitation, the Collateral) or with respect to any other Guarantor, any of the
Collateral, whether now owned or hereafter acquired, to be subject to a Lien or
be subject to any claim except for Permitted Liens.

7.4 Transactions With Affiliates or Subsidiaries: Except pursuant to the
Management Agreements, as otherwise set forth on Schedule “7.4(a)” attached
hereto and made part hereof, or in connection with the making of a Permitted
Investment, Borrower shall not, and shall not permit any Guarantor to, enter
into any transaction with any Subsidiary or other Affiliate, including, without
limitation, the purchase, sale, or exchange of Property, or the loaning or
giving of funds to any Affiliate or any Subsidiary unless: (i) transaction is in
the ordinary course of and substantially related to the reasonable requirements
of Borrower’s or such Guarantor’s business and upon terms substantially the same
and no less favorable to Borrower or such Guarantor as it would obtain in a
comparable arm’s length transactions with any Person not an Affiliate or a
Subsidiary, and so long as such transaction is not prohibited hereunder; or
(ii) such transaction is intended for incidental administrative purposes.

7.5 Guarantees: Excepting the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection, no Person included in the
Dekania Group shall become or be liable, directly or indirectly, primary or
secondary, matured or contingent, in any

 

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manner, whether as guarantor, surety, accommodation maker, or otherwise, for the
existing or future Indebtedness of any kind of any Person except for Permitted
Indebtedness.

7.6 Distributions and Bonuses: No Person included in the Dekania Group shall
(a) declare or pay or make any forms of Distribution to holders of such Person’s
Capital Stock, if before and after giving effect to such Distributions a Default
or Event of Default exists, or (b) declare or pay any bonus compensation to its
officers, directors or members if a Default or an Event of Default exists or
would result from the payment thereof.

7.7 Other Indebtedness: No Person included in the Dekania Group shall
(a) hereafter incur or become liable for any Indebtedness other than Permitted
Indebtedness; (b) make any prepayments on any existing or future Indebtedness
(other than the Obligations); or (c) make any payments on Subordinated Debt in
violation of the subordination provisions thereof.

7.8 Loans and Investments: Except as permitted in Section 7.4 hereof, no Person
included in the Dekania Group shall make or have outstanding loans, advances,
extensions of credit or capital contributions to, or investments in, any Person
other than Permitted Investments.

7.9 Use of Lenders’ Name: Except as may be required by applicable law or the
rules or regulations of a Governmental Authority, including but not limited to
the Securities and Exchange Commission, Borrower shall not, and shall not permit
any Guarantor to, use Lender’s name in connection with any of its business
operations. Nothing herein contained is intended to permit or authorize Borrower
or any Guarantor to make any contract on behalf of Agent or any Lender.

7.10 Miscellaneous Covenants:

(a) Borrower shall not, and shall not permit any Guarantor to, become or be a
party to any contract or agreement which at the time of becoming a party to such
contract or agreement materially impairs Borrower’s or any Guarantor’s ability
to perform under this Agreement, or under any other instrument, agreement or
document to which Borrower or any Guarantor is a party or by which it is or may
be bound.

(b) Each Person included in the Dekania Group shall not carry or purchase any
“margin stock” within the meaning of Regulations U, T or X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter II.

(c) Borrower shall not, and shall not permit any Guarantor to (i) amend or
modify any Transaction Document or any Management Agreement except for technical
amendments and modifications with respect to the administration of the
Management Agreement which are not adverse to the interests of Lenders,
(ii) assign any of its rights, duties or obligations under any Management
Agreement (except as permitted under Section 7.1 or, with respect to any
Guarantor not included in the Dekania Group, to the extent proceeds are applied
as required under Section 2.9) or Transaction Document to any other Person or
(iii) transfer any Permanent Investment to any other Person other than a
Guarantor (except as permitted under Section 7.1 or, with respect to any
Guarantor not included in the Dekania Group, to the extent proceeds are applied
as required under Section 2.9).

 

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7.11 Jurisdiction of Organization: If a Registered Organization, neither
Borrower nor any Guarantor shall change its jurisdiction of organization.

7.12 Organization Documents: Borrower shall not, and shall not permit any
Guarantor to, amend or modify any of its respective organizational documents,
including its certificate of formation and operating agreement, in a manner
which would be materially adverse to Secured Parties.

SECTION 8. DEFAULT

8.1 Events of Default: Each of the following events shall constitute an event of
default (“Event of Default”):

(a) Payments - if Borrower fails to make any payment of principal or interest on
the Loans on the date such payment is due and payable; or

(b) Other Charges - if Borrower fails to pay any other charges, fees, Expenses
or other monetary obligations owing to Agent, Issuing Bank or any Lender arising
out of or incurred in connection with this Agreement within thirty (30) days of
the date of any invoice; or

(c) Particular Covenant Defaults - if Borrower fails to perform, comply with or
observe any covenant or undertaking contained in this Agreement and (other than
with respect to the covenants contained in Section 6.8 and Section 7 for which
no cure period shall exist), such failure continues for twenty (20) Business
Days after the occurrence thereof; or

(d) Financial Information - if any statement, report, financial statement, or
certificate made or delivered by Borrower or any of its officers, employees or
agents, to Agent or any Lender is not true and correct, in all material
respects, when made; or

(e) Uninsured Loss - if there shall occur any uninsured damage to or casualty
loss, theft, or destruction in excess of Two Million Five Hundred Thousand
Dollars ($2,500,000) in the aggregate with respect to any portion of any
Property of any Person included in the Dekania Group; or

(f) Warranties or Representations - if any warranty, representation or other
statement by or on behalf of Borrower or any Guarantor contained in or pursuant
to this Agreement, the other Loan Documents or in any document, agreement or
instrument furnished in compliance with, relating to, or in reference to this
Agreement, is false, erroneous, or misleading in any material respect when made;
or

(g) Agreements with Others - (i) if Borrower or any Guarantor shall default
beyond any grace period in the payment of principal or interest of any
Indebtedness in excess of One Million Dollars ($1,000,000) in the aggregate; or
(ii) if Borrower or any Guarantor defaults under the terms of any such
Indebtedness in a manner other than as described in subclause (i) above and the
effect of such default is to enable the holder of such Indebtedness to
accelerate the payment of Borrower’s or any such Guarantor’s obligations, which
are the subject thereof, prior to the maturity date or prior to the regularly
scheduled date of payment; or

 

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(h) Other Agreements with Lenders - if Borrower or any Guarantor breaches or
violates the terms of, or if a default (and expiration of any applicable cure
period), or an Event of Default, occurs under, any Interest Hedging Instrument
or any other existing or future agreement (related or unrelated) (including,
without limitation, the other Loan Documents) between or among Borrower or any
Guarantor and Agent, Issuing Bank or any Lender; or

(i) Judgments - if any final judgment for the payment of money (i) in excess of
One Million Dollars ($1,000,000) with respect to any Person included in the
Dekania Group or (ii) in excess of Ten Million Dollars ($10,000,000) with
respect to any other Guarantor, in either event in the aggregate (A) which is
not fully and unconditionally covered by insurance or (B) for which such Person
has not established a cash or cash equivalent reserve in the full amount of such
judgment, shall be rendered by a court of record against any such Person and
such judgment shall continue unsatisfied and in effect for a period of thirty
(30) consecutive days without being vacated, discharged, satisfied or bonded
pending appeal; or

(j) Assignment for Benefit of Creditors, etc. - if Borrower or any Guarantor
makes or proposes in writing, an assignment for the benefit of creditors
generally, offers a composition or extension to creditors, or makes or sends
notice of an intended bulk sale of any business or assets now or hereafter owned
or conducted by Borrower; or

(k) Bankruptcy, Dissolution, etc. - upon the commencement of any action for the
dissolution or liquidation of Borrower or any Guarantor, or the commencement of
any proceeding to avoid any transaction entered into by Borrower or any
Guarantor, or the commencement of any case or proceeding for reorganization or
liquidation of Borrower’s or any Guarantor’s debts under the Bankruptcy Code or
any other state or federal law, now or hereafter enacted for the relief of
debtors, whether instituted by or against Borrower or any Guarantor; provided
however, that Borrower or any Guarantor shall have sixty (60) days to obtain the
dismissal or discharge of involuntary proceedings filed against it, it being
understood that during such thirty (30) day period, Lenders shall not be
obligated to make Advances hereunder and Lenders may seek adequate protection in
any bankruptcy proceeding; or

(l) Receiver - upon the appointment of a receiver, liquidator, custodian,
trustee or similar official or fiduciary for any Borrower or any Guarantor or
for Borrower’s or any Guarantor’s Property; or

(m) Execution Process, etc. - the issuance of any execution or distraint process
against any Property of Borrower or any Guarantor; or

(n) Termination of Business - other than in connection with an Asset Sale or
series of Asset Sales permitted under Section 7.1(a), if Borrower ceases any
material portion of its business operations as presently conducted, or if any
Guarantor ceases any material portion of its business operations as presently
conducted except in the ordinary course its business following written notice to
Lender; or

(o) Pension Benefits, etc. - if any Person included in the Dekania Group fails
to comply with ERISA so that proceedings are commenced to appoint a trustee
under ERISA to administer such Person’s employee plans or the PBGC institutes
proceedings to appoint a trustee to

 

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administer such plan(s), or a Lien is entered to secure any deficiency or claim
or a “reportable event” as defined under ERISA occurs; or

(p) Investigations - any indication or evidence received by Agent or any Lender
that reasonably leads it to believe Borrower or any Guarantor may have directly
or indirectly been engaged in any type of activity which, would be reasonably
likely to result in the forfeiture of any material property of Borrower or any
Guarantor to any Governmental Authority; or

(q) Change of Control - if there shall occur a Change of Control other than a
Change of Control that occurs in connection with an Asset Sale or series of
Asset Sales permitted under Section 7.1(a) of this Agreement; or

(r) Other Loan Documents - if any breach or default occurs under any other Loan
Documents or if the Surety and Guaranty Agreement, or any obligation to perform
thereunder is terminated; or

(s) Liens - if any Lien in favor of Agent shall cease to be valid, enforceable
and perfected and prior to all other Liens other than Permitted Liens unless the
failure of such Lien to be valid, enforceable and perfected and prior to all
other Liens is the result of the negligence of Agent, or if Borrower or any
Guarantor or any Governmental Authority shall assert any of the foregoing; or

(t) Transaction Documents - if any Transaction Document is terminated by any
party thereto.

8.2 Cure: Nothing contained in this Agreement or the Loan Documents shall be
deemed to compel Agent, Issuing Bank or any Lender to accept a cure of any Event
of Default hereunder.

8.3 Rights and Remedies on Default:

(a) In addition to all other rights, options and remedies granted or available
to Agent, Issuing Bank or Lenders under this Agreement or the Loan Documents, or
otherwise available at law or in equity, upon or at any time after the
occurrence and during the continuance of a Default or an Event of Default, Agent
may, in its discretion, direct Lenders to withhold or cease making Advances
under the Term Loan Facility.

(b) In addition to all other rights, options and remedies granted or available
to Agent under this Agreement or the Loan Documents (each of which is also then
exercisable by Agent), Agent may, in its discretion, upon or at any time after
the occurrence and during the continuance of an Event of Default, terminate the
Term Loan Facility and declare the Obligations immediately due and payable, all
without demand, notice, presentment or protest or further action of any kind (it
also being understood that the occurrence of any of the events or conditions set
forth in Sections 8.1(j),(k) or (l) shall automatically cause an acceleration of
the Obligations).

(c) In addition to all other rights, options and remedies granted or available
to Agent, under this Agreement or the Loan Documents (each of which is also then
exercisable by Agent), upon or at any time after the occurrence and during the
continuance of an Event of Default Agent may, in its discretion, direct Borrower
to deliver and pledge to Agent, for the ratable benefit

 

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of Agent, all Lenders and Issuing Bank, cash collateral in the amount of all
outstanding Letters of Credit.

(d) In addition to all other rights, options and remedies granted or available
to Agent under this Agreement or the Loan Documents (each of which is also then
exercisable by Agent), Agent may, upon or at any time following the occurrence
of an Event of Default, exercise all rights under the UCC and any other
applicable law or in equity, and under all Loan Documents permitted to be
exercised after the occurrence of an Event of Default, including the following
rights and remedies (which list is given by way of example and is not intended
to be an exhaustive list of all such rights and remedies):

(i) The right to take possession of, send notices regarding and collect directly
the Collateral, with or without judicial process (including without limitation
the right to notify the United States postal authorities to redirect mail
addressed to Borrower to an address designated by Agent); or

(ii) By its own means or with judicial assistance, enter Borrower’s premises and
take possession of the Collateral, or render it unusable, or dispose of the
Collateral on such premises in compliance with sub-Section (e) below, without
any liability for rent, storage, utilities or other sums, and Borrower shall not
resist or interfere with such action; or

(iii) Require Borrower at Borrower’s expense to assemble all or any part of the
Collateral and make it available to Agent at any place designated by Agent; or

(iv) The right to enjoin any violation of Section 7.1, it being agreed that
Lenders remedies at law are inadequate.

(e) Borrower hereby agrees that a notice received by it at least seven (7) days
before the time of any intended public sale or of the time after which any
private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted
by applicable law, any perishable inventory or Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Agent without prior notice to Borrower. Borrower covenants and
agrees not to interfere with or impose any obstacle to Agent’s exercise of its
rights and remedies with respect to the Collateral, after the occurrence of an
Event of Default hereunder. Agent shall have no obligation to clean up or
prepare the Collateral for sale. If Agent sells any of the Collateral upon
credit, Borrower will only be credited with payments actually made by the
purchaser thereof, that are received by Agent. Agent may, in connection with any
sale of the Collateral specifically disclaim any warranties of title or the
like.

8.4 Nature of Remedies: All rights and remedies granted Agent, Issuing Bank or
Lenders hereunder and under the Loan Documents, or otherwise available at law or
in equity, shall be deemed concurrent and cumulative, and not alternative
remedies, and Agent may proceed with any number of remedies at the same time
until all Obligations are satisfied in full. The exercise of any one right or
remedy shall not be deemed a waiver or release of any other right or remedy, and
Agent, upon or at any time after the occurrence of an Event of Default, may
proceed against Borrower, any

 

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Guarantor or any of the Collateral, at any time, under any agreement, with any
available remedy and in any order.

8.5 Set-Off:

(a) In addition to all other rights, options and remedies granted or available
to Agent under this Agreement or the Loan Documents (each of which is also then
exercisable by Agent), upon or at any time after the occurrence and during the
continuance of an Event of Default, Agent or any Lenders (and any participant)
shall have and be deemed to have, without notice to Borrower, the immediate
right of set-off against any bank account of Borrower with Agent or any Lender,
or of Borrower with any other subsidiary or Affiliate or any participant and may
apply the funds or amount thus set-off against any of Borrower’s Obligations
hereunder.

(b) If any bank account of Borrower with any Lender, any other subsidiary or
Affiliate or any participant is attached or otherwise liened or levied upon by
any third party, Agent or such Lender (and such participant) or Affiliate shall
have and be deemed to have, without notice to Borrower, the immediate right of
set-off and may apply the funds or amount thus set-off against any of Borrower’s
Obligations hereunder.

SECTION 9. AGENT

9.1 Appointment and Authority: (a) Each Lender and Issuing Bank hereby
irrevocably appoints TD Bank, N.A. to act on its behalf as Agent hereunder and
under the other Loan Documents and authorizes Agent to take such actions on its
behalf and to exercise such powers as are delegated to Agent by the terms hereof
or thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of Agent,
Lenders and Issuing Bank, and no Borrower or Guarantor shall have rights as a
third party beneficiary of any of such provisions.

(b) Agent shall also act as the “collateral agent” under the Loan Documents, and
each Lender (in its capacities as a Lender and potential provider of an Interest
Hedging Instrument) and Issuing Bank hereby irrevocably appoints and authorizes
Agent to act as Agent of such Lender and Issuing Bank for purposes of acquiring,
holding and enforcing any and all Liens on Collateral granted by Borrower or any
Guarantor to secure any of the Obligations, together with such powers and
discretion as are reasonably incidental thereto. In this connection, Agent, as
“collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed
by Agent pursuant to Section 9.5 for purposes of holding or enforcing any Lien
on the Collateral (or any portion thereof) granted under the Loan Documents, or
for exercising any rights and remedies thereunder at the direction of Agent),
shall be entitled to the benefits of all provisions of this Section 9 and
Section 10 (including Section 10.4), as though such co-agents, sub-agents and
attorneys-in-fact were the “collateral agent” under the Loan Documents) as if
set forth in full herein with respect thereto.

9.2 Rights as a Lender: The Person serving as Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money
to, act

 

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as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with Borrower, any Guarantor or other Subsidiary
or Affiliate thereof as if such Person were not Agent hereunder and without any
duty to account therefor to any Lender.

9.3 Exculpatory Provisions: Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or Event of Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Borrower, any Guarantor or any other
Subsidiary or Affiliate thereof that is communicated to or obtained by the
Person serving as Agent or any of Agent’s Affiliates in any capacity.

Agent shall not be liable for any action taken or not taken by it (i) with the
consent of Lenders (or such other number or percentage of Lenders as shall be
necessary, or as Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.11 and 8.3) or (ii) in the absence of
its own gross negligence or willful misconduct. Agent shall be deemed not to
have knowledge of any Default of Event of Default unless and until written
notice describing such Default or Event of Default is given to Agent by
Borrower, a Lender or Issuing Bank.

Agent shall not be responsible for or have any duty to ascertain or inquire into
or pass upon (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default of Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Loan
Documents, (v) the value or the sufficiency of any Collateral, or (v) the
satisfaction of any condition set forth in Section 4 or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to Agent.

9.4 Reliance by Agent: Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. In determining compliance with any
condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or

 

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Issuing Bank, Agent may presume that such condition is satisfactory to such
Lender or Issuing Bank unless Agent shall have received notice to the contrary
from such Lender or Issuing Bank prior to the making of such Loan or the
issuance of such Letter of Credit. Agent may consult with legal counsel (who may
be counsel for Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

9.5 Delegation of Duties: Agent may perform any and all of its duties and
exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by Agent. Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Affiliates. The exculpatory provisions of
this Section 9 shall apply to any such sub-agent and to the Affiliates of Agent
and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

9.6 Resignation of Agent: Agent may at any time give notice of its resignation
to Lenders, Issuing Bank and Borrower. Upon receipt of any such notice of
resignation, Lenders shall have the right, in consultation with Borrower, to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may on behalf of Lenders and Issuing Bank,
appoint a successor Agent meeting the qualifications set forth above; provided
that if Agent shall notify Borrower, Issuing Bank and Lenders that no qualifying
Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (a) retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by Agent on
behalf of Lenders or Issuing Bank under any of the Loan Documents, retiring
Agent shall continue to hold such collateral security until such time as a
successor Agent is appointed) and (b) all payments, communications and
determinations provided to be made by, to or through Agent shall instead be made
by or to each Lender and Issuing Bank directly, until such time as Lenders
appoint a successor Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Agent, and the retiring Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by Borrower to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between Borrower and
such successor. After the retiring Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Section 9 and Section 10.4 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Affiliates in respect of any actions taken or omitted to be
taken by any of them while the retiring Agent was acting as Agent.

9.7 Non-Reliance on Agent and Other Lenders: Each Lender and Issuing Bank
acknowledges that it has, independently and without reliance upon Agent or any
other Lender or any of their Affiliates and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and Issuing Bank also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender

 

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or any of their Affiliates and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.

9.8 Reserved:

9.9 Agent May File Proofs of Claim: In case of the pendency of any proceeding
under the Bankruptcy Code or any other judicial proceeding relative to Borrower
or any Guarantor, Agent (irrespective of whether the principal of any Loan or
Reimbursement Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether Agent shall have made any
demand on Borrower or any Guarantor) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, Reimbursement Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of Lenders, Issuing
Bank and Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of Lenders, Issuing Bank and Agent and their
respective agents and counsel and all other amounts due Lenders, Issuing Bank
and Agent under this Agreement) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and Issuing Bank to make such payments to Agent and, if Agent shall
consent to the making of such payments directly to Lenders and Issuing Bank, to
pay to Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of Agent and its agents and counsel, and any other
amounts due Agent under this Agreement.

9.10 Collateral and Guaranty Matters: Lenders and Issuing Bank irrevocably
authorize Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by Agent under any
Loan Document (i) upon termination of the Term Loan Facility and payment in full
of all Obligations (other than contingent indemnification obligations) and the
expiration or termination (or cash collateralization) of all Letters of Credit,
(ii) that is sold or to be sold as part of or in connection with any sale
permitted hereunder or under any other Loan Document, or (iii) if approved,
authorized or ratified in writing in accordance with Section 10.11;

(b) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Guarantor as a result of a transaction permitted
hereunder; and

(c) to subordinate any Lien on any property granted to or held by Agent under
any Loan Document to the holder of any Lien on such property that is permitted
by Section 7.3.

 

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Upon request by Agent at any time, Lenders will confirm in writing Agent’s
authority to release or subordinate its interest in particular types or items of
property, or to release any Guarantor from its obligations under the Surety and
Guaranty Agreement pursuant to this Section 9.10. In each case as specified in
this Section 9.10, Agent will, at Borrower’s expense, execute and deliver such
documents as may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the Loan
Documents or to subordinate its interest in such item, or to release such
Guarantor from its obligations under the Surety and Guaranty Agreement, in each
case in accordance with the terms of the Loan Documents and this Section 9.10.

9.11 Action on Instructions of Lenders: With respect to any provision of this
Agreement, or any issue arising thereunder, concerning which Agent is authorized
to act or withhold action by direction of all Lenders, Agent shall in all cases
be fully protected in so acting, or in so refraining from acting, hereunder in
accordance with written instructions signed by all Lenders. Such instructions
and any action taken or failure to act pursuant thereto shall be binding on all
Lenders.

9.12 Designation of Additional Agents:

The parties hereto covenant and agree TD Bank, N.A. shall be the Agent, and that
no additional party designated as a syndication agent, documentation agent,
collateral agent or in any other agent capacity (each such person an “Additional
Agent”) shall, except in the case of the appointment of a successor Agent in
accordance with Section 9.6 hereof, have any rights, duties, responsibilities,
obligations, liabilities, responsibilities or duties, except for those received,
undertaken or incurred by such party in its capacity as a Lender hereunder, if
applicable. No duty, responsibility, right or option granted to Agent herein is
delegated or transferred, in whole or in part, to any Additional Agent and no
compensation payable to Agent shall be shared with, or paid to, any such
Additional Agent. No Additional Agent shall be entitled to any fees or
reimbursement of Expenses except as such Additional Agent shall otherwise be
entitled in its capacity as a Lender. Notwithstanding anything to the contrary
contained in this Agreement, no amendment to this Section 9.12 shall be
effective without the written consent of Agent.

SECTION 10. MISCELLANEOUS

10.1 GOVERNING LAW: THIS AGREEMENT, AND ALL MATTERS ARISING OUT OF OR RELATING
TO THIS AGREEMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA. THE PROVISIONS OF THIS AGREEMENT AND ALL OTHER AGREEMENTS AND
DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR
UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING
PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.

10.2 Integrated Agreement: The Loan Documents, all related agreements, and this
Agreement shall be construed as integrated and complementary of each other, and
as augmenting and not restricting Lenders’, Issuing Bank’s and Agent’s rights
and remedies. If, after applying the foregoing, an inconsistency still exists,
the provisions of this Agreement shall constitute an amendment thereto and shall
control.

 

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10.3 Waiver: No omission or delay by Secured Parties in exercising any right or
power under this Agreement or any related agreements and documents will impair
such right or power or be construed to be a waiver of any default, or Event of
Default or an acquiescence therein, and any single or partial exercise of any
such right or power will not preclude other or further exercise thereof or the
exercise of any other right, and as to Borrower no waiver will be valid unless
in writing and signed by Agent and such Lenders (as required pursuant to
Section 10.11) and then only to the extent specified.

10.4 Expenses; Indemnity: (a) Borrower shall pay (i) all reasonable and
documented out-of-pocket expenses incurred by Agent and Agent’s Affiliates
(including the reasonable fees, charges and disbursements of counsel for Agent),
in connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by Agent, any
Lender or Issuing Bank (including the fees, charges and disbursements of any
counsel for Agent, any Lender or Issuing Bank) in connection with the
enforcement or protection of its rights (A) under or related to this Agreement
and the other Loan Documents, including its rights under this Section, or (B) in
connection with Loans made or Letters of Credit issued hereunder, including all
such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit (all such
out-of-pocket expenses, fees, charges and disbursements are referred to herein
collectively, as “Expenses”).

(b) Indemnification by Borrower; Lenders. Borrower shall indemnify Agent (and
any sub-agent thereof), each Lender and Issuing Bank, and each Related Party
(each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by Borrower or any Guarantor arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, or, in the case of Agent (and any sub-agent
thereof) and its Indemnitees only, the administration of this Agreement and the
other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed
use of the proceeds therefrom (including any refusal by Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any violation of any Requirement of Law by Borrower or any
Guarantor, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory, whether brought by a third party (including any creditor of
Borrower or any Guarantor) or by Borrower or any Guarantor or any of Borrower’s
or any Guarantor’s directors, shareholders or creditors, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct

 

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of such Indemnitee or (y) result from a claim brought by Borrower or any
Guarantor against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if such Borrower or such
Guarantor has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

(c) To the extent that Borrower for any reason fails to indefeasibly pay any
amount required under sub-Section (a) or (b) of this Section to be paid by it to
Agent (or any sub-agent thereof), Issuing Bank or any Indemnitee of any of the
foregoing, each Lender severally agrees to pay to Agent (or any such sub-agent),
Issuing Bank or such Indemnitee, as the case may be, such Lender’s Pro Rata
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against Agent (or any
such sub-agent) or Issuing Bank in its capacity as such, or against any
Indemnitee of any of the foregoing acting for Agent (or any such sub-agent) or
Issuing Bank in connection with such capacity. The obligations of Lenders under
this sub-Section (c) are several and not joint.

10.5 Time: Whenever Borrower shall be required to make any payment, or perform
any act, on a day which is not a Business Day, such payment may be made, or such
act may be performed, on the next succeeding Business Day. Time is of the
essence in the performance under all provisions of this Agreement and all
related agreements and documents.

10.6 Consequential Damages: Neither Agent, Issuing Bank or any Lender nor any
agent or attorney of Agent, Issuing Bank or any Lender, shall be liable for any
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the Obligations.

10.7 Brokerage: This transaction was brought about and entered into by Agent,
Lenders and Borrower acting as principals and without any brokers, agents or
finders being the effective procuring cause hereof. Borrower represents that it
has not committed Agent or any Lender to the payment of any brokerage fee,
commission or charge in connection with this transaction. If any such claim is
made on Agent or any Lender by any broker, finder or agent or other person,
Borrower hereby indemnifies, defends and saves such party harmless against such
claim and further will defend, with counsel satisfactory to Agent, any action or
actions to recover on such claim, at Borrower’s own cost and expense, including
such party’s reasonable counsel fees. Borrower further agrees that until any
such claim or demand is adjudicated in such party’s favor, the amount demanded
shall be deemed a liability of Borrower under this Agreement.

10.8 Notices:

(a) Any notice or request hereunder may be given to Borrower or to Agent or any
Lender at their respective addresses set forth below or at such other address as
may hereafter be specified in a notice designated as a notice of change of
address under this Section. Any notice, request, demand, direction or other
communication (for purposes of this Section 10.8 only, a “Notice”) to be given
to or made upon any party hereto under any provision of this Agreement shall be
given or made by telephone or in writing (which includes by means of electronic
transmission (i.e., “e-mail”) or facsimile transmission or by setting forth such
Notice on a site on the World Wide

 

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Web (a “Website Posting”) if Notice of such Website Posting (including the
information necessary to access such site) has previously been delivered to the
applicable parties hereto by another means set forth in this Section 10.8) in
accordance with this Section 10.8. Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names set forth herein or in accordance with any subsequent unrevoked
Notice from any such party that is given in accordance with this Section 10.8.
Any Notice shall be effective:

(b) In the case of hand-delivery, when delivered;

(c) If given by mail, four days after such Notice is deposited with the United
States Postal Service, with first-class postage prepaid, return receipt
requested;

(d) In the case of a telephonic Notice, when a party is contacted by telephone,
if delivery of such telephonic Notice is confirmed no later than the next
Business Day by hand delivery, a facsimile or electronic transmission, a Website
Posting or an overnight courier delivery of a confirmatory Notice (received at
or before noon on such next Business Day);

(e) In the case of a facsimile transmission, when sent to the applicable party’s
facsimile machine’s telephone number, if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile machine;

(f) In the case of electronic transmission, when actually received;

(g) In the case of a Website Posting, upon delivery of a Notice of such posting
(including the information necessary to access such site) by another means set
forth in this Section 10.8; and

(h) If given by any other means (including by overnight courier), when actually
received.:

 

If to Agent to:    TD Bank, N.A.    1006 Astoria Boulevard    Cherry Hill, NJ
08034    Attn: Richard A. Zimmerman    Telecopier: 856-751-6884 With copies to:
   Ballard Spahr LLP    1735 Market Street, 51st Floor    Philadelphia, PA 19103
   Attn: Steven M. Miller    Telecopier: 215-864-8310 If to Borrower to:   
Dekania Investors, LLC    2929 Arch Street    Philadelphia, PA 19104-2868   
Attn: Joseph Pooler    Telecopier: 215-701-9603

 

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With copies to:    Duane Morris LLP    30 S. 17th Street    Philadelphia, PA
19103    Attn: Darrick M. Mix    Telecopier: 215-405-2906 If to Lenders:    to
the addresses set forth on Schedule B

(i) Agent shall be fully entitled to rely upon any facsimile transmission,
e-mail, or other writing purported to be sent by any Authorized Officer (whether
requesting an Advance or otherwise) as being genuine and authorized.

10.9 Headings: The headings of any paragraph or Section of this Agreement are
for convenience only and shall not be used to interpret any provision of this
Agreement.

10.10 Survival: All warranties, representations, and covenants made by Borrower
herein, or in any agreement referred to herein or on any certificate, document
or other instrument delivered by it or on its behalf under this Agreement, shall
be considered to have been relied upon by Agent and Lenders, and shall survive
the delivery to Lenders of the Notes, regardless of any investigation made by
Lenders or on their behalf. All statements in any such certificate or other
instrument prepared and/or delivered for the benefit of Agent and any and all
Lenders shall constitute warranties and representations by Borrower hereunder.
Except as otherwise expressly provided herein, all covenants made by Borrower
hereunder or under any other agreement or instrument shall be deemed continuing
until all Obligations are satisfied in full. All indemnification obligations
under this Agreement, including under Section 2.2, 2.10, 2.14, 2.15, 2.16, 6.5,
10.4 and 10.7, shall survive the termination of this Agreement and payment of
the Obligations for a period of two (2) years.

10.11 Amendments:

(a) Neither the amendment or waiver of any provision of this Agreement or any
other Loan Document (other than Letter of Credit Documents), nor the consent to
any departure by Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by Agent, and each such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or consent shall do
any of the following: (i) increase the Term Loan Limit or L/C Sublimit or the
Pro Rata Percentage of any Lender without the written consent of such Lender,
(ii) except as otherwise expressly provided in this Agreement with respect to
the floating nature of the Base Rate or Adjusted LIBOR Rate, reduce the
principal of, or interest on, any Note or any Reimbursement Obligations or any
fees hereunder without the written consent of each Lender affected thereby,
(iii) postpone any date fixed for any payment in respect of principal of, or
interest on, any Note or any Reimbursement Obligations or any fees hereunder
without the written consent of each Lender affected thereby, (iv) amend or waive
Section 2.12 or this Section 10.11 or any provision under this Agreement or any
Loan Document that expressly provided for consent or other action by all
Lenders, (v) except as otherwise expressly provided in this Agreement, and other
than in connection with the financing, refinancing, sale or other disposition of
any Property of Borrower permitted under this Agreement, release any Liens in
favor of Lenders on any portion of the Collateral in excess of $1,000,000 in any
calendar year without the written consent of each Lender, (vi) permit Borrower
or any Guarantor to

 

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delegate, transfer or assign any of its, obligations to any Lender without the
written consent of each Lender, (vii) extend the Term Loan Maturity Date without
the written consent of each Lender affected thereby, or (viii) release or
compromise the obligations of Borrower or any Guarantor to any Lender without
the written consent of each Lender; provided further, that no amendment, waiver
or consent affecting the rights or duties of Agent or Issuing Bank under any
Loan Document shall in any event be effective, unless in writing and signed by
Agent and/or Issuing Bank, as applicable, in addition to Lenders required
hereinabove to take such action. Notwithstanding any of the foregoing to the
contrary, the consent of Borrower shall not be required for any amendment,
modification or waiver of the provisions of Section 9 of this Agreement. In
addition, Borrower and Lenders hereby authorize Agent to modify this Agreement
by unilaterally amending or supplementing Schedule A, or Schedule B from time to
time in the manner requested by Borrower, Agent or any Lender in order to
reflect any assignments or transfers of the Loans as provided for hereunder and
to amend Schedule C, Schedule D, Schedule 5.10(b), 5.11(c) or Schedule 5.14(b)
as permitted under Section 4.8, Section 6.19 and Section 6.20; provided,
however, that Agent shall promptly deliver a copy of any such modification to
Borrower and each Lender.

(b) After an acceleration of the Obligations, Agent shall have the right, with
communication (to the extent reasonably practicable under the circumstances)
with all Lenders, to exercise or refrain from exercising any and all right,
remedies, privileges and options under the Loan Documents and available at law
or in equity to protect and enforce the rights of Lenders and collect the
Obligations, including, without limitation, instituting and pursuing all legal
actions against Borrower or to collect the Obligations, or defending any and all
actions brought by Borrower or any other Person; or incurring Expenses or
otherwise making expenditures to protect the Loans, the Collateral or Lenders’
rights or remedies.

(c) To the extent Agent is required to obtain or otherwise elects to seek the
consent of Lenders to an action Agent desires to take, if any Lender fails to
notify Agent, in writing, of its consent or dissent to any request of Agent
hereunder within ten (10) Business Days of such Lender’s receipt of such
request, such Lender shall be deemed to have given its consent thereto.

(d) Notwithstanding the fact that the consent of all Lenders is required in
certain circumstances as set forth above, (i) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (ii) Agent may consent to allow Borrower or a Guarantor to use cash
collateral in the context of a bankruptcy or insolvency proceeding.

10.12 Successors and Assigns:

(a) Assignments Generally. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of Issuing Bank
that issues any Letter of Credit) except that (i) Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the

 

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parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of Agent,
Issuing Bank and Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

(b) Assignments by Lenders.

(i) Assignments Generally. Subject to the conditions set forth in subclause
(b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Pro Rata Share and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:

1) Borrower; provided that no consent of Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee; and

2) each of Agent and Issuing Bank; provided that no such consent shall be
required for an assignment to a Lender.

(ii) Certain Conditions to Assignments. Assignments shall be subject to the
following additional conditions:

1) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s Loans
or Term Loan Pro Rata Share, the amount of the Term Loan Pro Rata Share or Loans
of the assigning Lender subject to each such assignment (determined as of the
date of the Assignment Agreement with respect to such assignment is delivered to
Agent) shall not be less than $5,000,000, unless each of Borrower and Agent
otherwise consent; provided that no such consent of Borrower shall be required
if an Event of Default has occurred and is continuing;

2) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
and

3) the parties to each assignment shall execute and deliver to Agent an
Assignment Agreement, together with a processing and recordation fee of $3,500;
and

(iii) Effectiveness of Assignments. Subject to acceptance and recording thereof
pursuant to subclause (b)(iv) of this Section, from and after the effective date
specified in each Assignment Agreement, the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment Agreement,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment Agreement covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.15, 2.16 and 10.4). Any assignment or transfer by a Lender of the rights
or obligations under this Agreement that does not comply with this Section shall
be treated for

 

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purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section.

(iv) Maintenance of Register. Agent, acting for this purpose as an agent of
Borrower, shall maintain at one of its offices a copy of each Assignment
Agreement delivered to it and a register for the recordation of the names and
addresses of Lenders, and the Term Loan Pro Rata Share, and principal amount of
the Loans and Reimbursement Obligations (and interest thereon) owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, and Borrower, Agent, Issuing Bank
and Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Borrower, Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(v) Acceptance of Assignments by Agent. Upon its receipt of a duly completed
Assignment Agreement executed by an assigning Lender and an assignee, the
processing and recordation fee referred to in subclause (b) of this Section and
any written consent to such assignment required by subclause (b) of this
Section, Agent shall accept such Assignment Agreement and record the information
contained therein in the Register (“Acceptance Date”). No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

(c) Participations.

(i) Participations Generally. Any Lender may, without the consent of Borrower,
Agent, Issuing Bank sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement and the other Loan Documents (including all or a portion of
its Term Loan Pro Rata Share and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement and the other Loan Documents shall
remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) Borrower, Agent,
Issuing Bank and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement and the other Loan Documents. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement or any other Loan Document; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.11 that affects such Participant. Subject to
subclause (c)(ii) of this Section, Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.14, 2.15 and 2.16 (subject to the
requirements and limitations of such Sections) to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph
(b) of this Section.

(ii) Limitations on Rights of Participants. A Participant shall not be entitled
to receive any greater payment under Section 2.14, 2.15 or 2.16 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with Borrower’s prior written consent. A

 

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Participant that would be a Non-U.S. Lender if it were a Lender shall not be
entitled to the benefits of Section 2.16 unless Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of Borrower, to comply with Section 2.16 as though it were a Lender.

(iii) Participation Register. In the event that any Lender sells participations
in a Loan or its Term Loan Pro Rata Share, such Lender, acting solely for this
purpose as a non-fiduciary agent of Borrower, shall maintain a register on which
it enters the names and addresses of all participants, the Term Loan Pro Rata
Share held by, and the principal amount of the Loans and Reimbursement
Obligations (and interest thereon) owing to, them (the “Participant Register”).
The entries in the Participant Register shall be conclusive in the absence of
manifest error, and the participating Lender shall treat each Person whose name
is recorded in the Participant Register as the Participant for all purposes of
this Agreement and the other Loan Documents, notwithstanding any notice to the
contrary.

(d) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

10.13 Confidentiality: Each of Agent, Lenders and Issuing Bank agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (i) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and other
representatives (it being understood that Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (ii) to the extent requested
by any regulatory authority purporting to have jurisdiction over it, (iii) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process, (iv) to any other party hereto, (v) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (vi) subject to an agreement
containing provisions substantially the same as those of this Section, to
(A) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (B) any
actual or prospective counterparty (or its advisors) to any Hedging Agreement,
swap or derivative transaction relating to Borrower, (vii) with the consent of
Borrower or (viii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Section or (B) becomes available to
Agent, any Lender, Issuing Bank or any of their respective Affiliates on a
non-confidential basis from a source other than Borrower or any Guarantor. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

10.14 Duplicate Originals: Two or more duplicate originals of this Agreement may
be signed by the parties, each of which shall be an original but all of which
together shall constitute one

 

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and the same instrument. This Agreement may be executed in counterparts, all of
which counterparts taken together shall constitute one completed fully executed
document.

10.15 Modification: No modification hereof or any agreement referred to herein
shall be binding or enforceable unless in writing and signed by Borrower, Agent,
Issuing Bank and Lenders except as provided in Section 10 hereof. Any
modification in accordance with the terms hereof shall be binding on all parties
hereto, whether or not each is a signatory thereto.

10.16 Signatories: Each individual signatory hereto represents and warrants that
he is duly authorized to execute this Agreement on behalf of his principal and
that he executes the Agreement in such capacity and not as a party.

10.17 Third Parties: No rights are intended to be created hereunder, or under
any related agreements or documents for the benefit of any third party donee,
creditor or incidental beneficiary of Borrower. Nothing contained in this
Agreement shall be construed as a delegation to Agent, Issuing Bank or any
Lender of Borrower’s duty of performance, including, without limitation,
Borrower’s duties under any account or contract with any other Person.

10.18 Discharge of Taxes, Borrowers’ Obligations, Etc.: Agent, in its sole
discretion, shall have the right at any time, and from time to time, if Borrower
fails to timely perform, to: (a) pay for the performance of any of Borrower’s
Obligations hereunder, and (b) discharge taxes or Liens, at any time levied or
placed on any of Borrower’s Property in violation of this Agreement unless such
entity is in good faith with due diligence by appropriate proceedings contesting
such taxes or Liens and maintaining proper reserves therefore in accordance with
GAAP. Expenses and advances shall bear interest at the highest rate applied to
the Loans until reimbursed to Agent. Such payments and advances made by Agent
shall not be construed as a waiver by Agent or Lenders of an Event of Default
under this Agreement.

10.19 Withholding and Other Tax Liabilities: Agent shall have the right to
refuse to make any Advances from time to time unless Borrower shall, at Agent’s
request, have given to Agent evidence, reasonably satisfactory to Agent, that it
has properly deposited or paid, as required by law, all withholding taxes and
all federal, state, city, county or other taxes due up to and including the date
of the requested Advance. Copies of deposit slips showing payment shall likewise
constitute satisfactory evidence for such purpose. In the event that any lien,
assessment or tax liability against Borrower shall arise in favor of any taxing
authority, whether or not notice thereof shall be filed or recorded as may be
required by law, Agent shall have the right (but shall not be obligated, nor
shall Agent or any Lender hereby assume the duty) to pay any such lien,
assessment or tax liability by virtue of which such charge shall have arisen;
provided, however, that Agent shall not pay any such tax, assessment or lien if
the amount, applicability or validity thereof is being contested in good faith
and by appropriate proceedings by such entity. In order to pay any such lien,
assessment or tax liability, Agent shall not be obliged to wait until said lien,
assessment or tax liability is filed before taking such action as hereinabove
set forth. Any sum or sums which Agent (shared ratably by Lenders) shall have
paid for the discharge of any such lien shall be paid by Borrower to Agent with
interest thereon at the highest rate applicable to the Loans, upon demand, and
Agent shall be subrogated to all rights of such taxing authority against
Borrower.

 

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10.20 Consent to Jurisdiction: Borrower, Agent, Issuing Bank and each Lender
hereby irrevocably consent to the non-exclusive jurisdiction of the Courts of
the Commonwealth of Pennsylvania or the United States District Court for the
Eastern District of Pennsylvania in any and all actions and proceedings whether
arising hereunder or under any other agreement or undertaking. Borrower waives
any objection which Borrowers may have based upon lack of personal jurisdiction,
improper venue or forum non conveniens. Borrower irrevocably agrees to service
of process by certified mail, return receipt requested to the address of the
appropriate party set forth herein.

10.21 Waiver of Jury Trial: BORROWER, AGENT, ISSUING BANK AND EACH LENDER HEREBY
WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY
LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH RESPECT TO
ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS
INVOLVING OR RELATED TO ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT,
MODIFICATION, RESTRUCTURE, FORBEARANCE, WORKOUT, OR ENFORCEMENT OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.

10.22 Termination: Borrower may terminate this Agreement at any time upon ten
(10) days’ prior written notice upon payment in full of the Obligations. In
connection with any request for a termination hereunder and upon Borrower’s
request, Agent shall issue a pay-off letter to Borrower. The termination of this
Agreement shall not affect Borrower’s or Agent’s, Issuing Bank’s or any Lender’s
rights, or any of the Obligations having their inception prior to the effective
date of such termination, and the provisions hereof shall continue to be fully
operative until all Obligations (including payment of all obligations arising
under Section 2.10 of this Agreement) have been paid in full, and all
outstanding Letters of Credit have been cash collateralized or backstopped to
Issuing Bank’s satisfaction; provided that, any indemnification provisions that
expressly survive termination shall continue. The security interests, Liens and
rights granted to Agent hereunder and the financing statements filed hereunder
shall continue in full force and effect, notwithstanding the termination of this
Agreement or the fact that the Obligations may from time to time be temporarily
in a zero or credit position, until all of the Obligations (including payment of
all obligations arising under Section 2.10 of this Agreement) of Borrower have
been paid or performed in full, this Agreement has been terminated, and all
outstanding Letters of Credit have been cash collateralized or backstopped to
Issuing Bank’s satisfaction, or Borrower has furnished Agent with an
indemnification satisfactory to Agent with respect thereto.

10.23 Patriot Act Notice: To help fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verity and record information that identifies each Person who opens an
account. For purposes of this Section 10.23, account shall be understood to
include loan accounts.

10.24 Nonliability of Lenders: The relationship between Borrower on the one hand
and Lenders, Issuing Bank and Agent on the other hand shall be solely that of
borrower and lender. Neither Agent, Issuing Bank, nor any Lender shall have any
fiduciary responsibility to Borrower.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the undersigned parties have executed this Agreement the day
and year first above written.

 

BORROWER:   DEKANIA INVESTORS, LLC   By:  

/s/ Joseph W. Pooler, Jr.

  Name:   Joseph W. Pooler, Jr.   Title:   Chief Financial Officer AGENT     AND
ISSUING BANK:  

TD BANK, N.A., as Agent

and Issuing Bank

  By:  

/s/ Richard A. Zimmerman

  Name:   Richard A. Zimmerman   Title:   Vice President LENDERS:   TD BANK,
N.A., as Lender   By:  

/s/ Richard A. Zimmerman

  Name:   Richard A. Zimmerman   Title:   Vice President

[Signature Page to Loan and Security Agreement]

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EXHIBIT A

ASSIGNMENT AND ASSUMPTION

Dated as of:                             

Reference is made to the Loan and Security Agreement dated as of
                    , 2010 (as amended, restated or otherwise modified from time
to time, the “Loan Agreement”), by and among Dekania Investors, LLC
(“Borrower”), the lenders a party thereto (the “Lenders”), and TD Bank, N.A., as
administrative agent (“Agent”) and issuing bank. Capitalized terms used herein
which are not defined herein shall have the meanings assigned thereto in the
Loan Agreement.

                     (the “Assignor”) and                      (the “Assignee”)
agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, as of the Effective Date (as
defined below), all of the Assignor’s interests, rights and obligations with
respect to the Loans set forth on Schedule 1, including such percentage of the
outstanding Letters of Credit and Reimbursement Obligations, and the Assignor
thereby retains its interest (if any) therein set forth on Schedule 1. This
Assignment and Assumption is entered pursuant to, and authorized by,
Section 10.12 of the Loan Agreement.

2. The Assignor (i) represents that, as of the date hereof, its Pro Rata
Percentage (without giving effect to assignments thereof which have not yet
become effective) under the Loan Agreement is with respect to the Loans,
including its Pro Rata Percentage of the outstanding Letters of Credit and
Reimbursement Obligations (unreduced by any assignments thereof which have not
yet become effective) set forth on Schedule 1; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Agreement
or any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Agreement or any other instrument
or document furnished pursuant thereto, other than that the Assignor is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower or the performance or observance by Borrower of
any of its obligations under the Loan Agreement or any other instrument or
document furnished or executed pursuant thereto; and (iv) attaches the Notes
delivered to it under the Loan Agreement and requests that Borrower exchange
such Notes for new Notes payable to each of the Assignor and the Assignee as
follows:

 

Note Payable to the Order of:

   Principal Amount of Note:  

 

     $                        

 

     $                        

3. The Assignee (i) represents and warrants that it is legally authorized to
enter into this Assignment and Assumption; (ii) confirms that it has received a
copy of the Loan Agreement, together with copies of the most recent financial
statements delivered pursuant to the terms thereof,

 

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and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption; (iii) agrees that it will, independently and without reliance upon
the Assignor or any other Lender or Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Agreement;
(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Agreement and the other Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all the obligations which by the terms of the Loan
Agreement and the other Loan Documents are required to be performed by it as a
Lender; (vi) agrees to hold all confidential information in a manner consistent
with the provisions of the Loan Agreement; and (vii) includes herewith for the
Agent the two forms required by Section 2.16 of the Loan Agreement (if not
previously delivered).

4. The effective date for this Assignment and Assumption shall be as set forth
in Section 1 of Schedule 1 hereto (the “Effective Date”). Following the
execution of this Assignment and Assumption, it will be delivered to Agent for
acceptance, recording in its books and records and, to the extent required by
the Loan Agreement, consent by Borrower. Effectiveness of this Assignment and
Assumption is expressly conditioned upon payment of the processing fee required
under Section 10.12 of the Loan Agreement.

5. Upon such consents, acceptance and recording and payment, from and after the
Effective Date, (i) the Assignee shall be a party to the Loan Agreement and the
other Loan Documents to which Lenders are parties and, to the extent provided in
this Assignment and Assumption, have the rights and obligations of a Lender
under each such agreement, and (ii) the Assignor shall, to the extent provided
in this Assignment and Assumption, relinquish its rights and be released from
its obligations under the Loan Agreement and the other Loan Documents.

6. Upon such consents, acceptance and recording and payment, from and after the
Effective Date, the Agent shall make all payments in respect of the interest
assigned hereby (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.

7. THIS ASSIGNMENT AND ASSUMPTION SHALL BE DEEMED TO BE A CONTRACT UNDER SEAL
AND, TOGETHER WITH ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

   A-2   

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

 

WITNESS the following signatures as of the          day of             , 20    .

 

ASSIGNOR:  

 

    By:  

 

    Name:       Title:   ASSIGNEE:  

 

    By:  

 

    Name:       Title:   Acknowledged and Consented to:     DEKANIA INVESTORS,
LLC     By:  

 

    Name:       Title:       Consented to and Accepted by:     TD BANK, N.A., as
Agent     By:  

 

    Name:       Title:      

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

 

SCHEDULE 1

TO

ASSIGNMENT AND ASSUMPTION

 

1.   Effective Date                              ,                2.  
Assignor’s Interest Prior to Assignment          (a)    Pro Rata Percentage     
      

(i)Term Loans

           %       (b)    Outstanding balance of Term Loans       
$                       (c)    Outstanding balance of Assignor’s Pro Rata
Percentage of the Letters of Credit and Reimbursement Obligations       
$                     3.   Assigned Interest of Loans          (a)    Term Loans
           %       (b)    Letters of Credit and Reimbursement Obligations     
        %   4.   Assignee’s Extensions of Credit After Effective Date         
(a)    Total outstanding balance of Assignee’s Term Loans (line 2(b) times line
3(a))        $                       (b)    Total outstanding balance of
Assignee’s Pro Rata Percentage of the Letters of Credit and Reimbursement
Obligations (line 2(c) times line 3(b)) $                            5.  
Retained Interest of Assignor after Effective Date          (a)    Retained
Interest of Pro Rata Percentage            

(i)Term Loans

             %       

(ii)Letters of Credit

             %     (b)    Outstanding balance of Assignor’s Term Loans (line
2(b) times line 5(a)(i))        $                       (c)    Outstanding
balance of Assignor’s Pro Rata Percentage of Letters of Credit and Reimbursement
Obligations (line 2(c) times line 5(a)(ii))        $                    

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

 

6.   Payment Instructions   (a)    If payable to Assignor, to the account of
Assignor to:      ABA No.:      Account Name:      Account No.:      Attn:     
Ref:   (b)    If payable to Assignee, to the account of Assignee to:      ABA
No.:      Account Name:      Account No.:      Attn:      Ref:

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

 

EXHIBIT B

FORM OF AUTHORIZATION CERTIFICATE

(Borrower Letterhead)

Date:                     

TD Bank, N.A.

1701 Route 70 East

Cherry Hill, NJ 08034

Attention:

Dear                     :

 

  RE: That certain Loan and Security Agreement dated                     , 2010
(as may be amended, restated, or otherwise modified from time to time, the “Loan
Agreement”), by and among Dekania Investors, LLC (“Borrower”), TD Bank, N.A., as
administrative agent (“Agent”) and issuing bank, and various financial
institutions as lenders (“Lender”)

Capitalized terms used herein without definition shall have the meanings given
to them in the Loan Agreement.

The following individuals are authorized to request Advances against the Term
Loan Facility, execute Quarterly Compliance Certificates, and transfer funds
from any of the Borrower’s accounts per written instructions received via fax:

 

Authorized Person

        

Title

       

Signature

1.

  

 

     

 

     

 

2.

  

 

     

 

     

 

3.

  

 

     

 

     

 

 

Acknowledged and approved: By:  

 

Name:   Title:  

 

   B-1   

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

 

EXHIBIT C

FORM OF NOTICE OF CONVERSION/EXTENSION

Dated as of:                     

TD Bank, N.A., as Agent

1701 Route 70 East

Cherry Hill, NJ 08034

Ladies and Gentlemen:

This irrevocable Notice of Conversion/Extension (the “Notice”) is delivered to
you under Section 2.6 of the Loan and Security Agreement dated as of
                    , 2010 (as amended, restated or otherwise modified from time
to time, the “Loan Agreement”), by and among Dekania Investors, LLC
(“Borrower”), TD Bank, N.A., as agent for the various financial institutions
(“Agent”) and as issuing bank, and the financial institutions a party thereto
from time to time as lenders.

1. This Notice is submitted for the purpose of:

(Check one and complete applicable information in accordance with the Loan
Agreement.)

 

  ¨ Converting all or a portion of a Base Rate Loan into a LIBOR Rate Loan

 

  (a) The aggregate outstanding principal balance of such Loan is $            .

 

  (b) The principal amount of such Loan to be converted is $            .

 

  (c) The requested effective date of the conversion of such Loan is
                    .

 

  (d) The requested LIBOR Interest Period applicable to the converted Loan is
                    .

 

  ¨ Converting a portion of LIBOR Rate Loan into a Base Rate Loan

 

  (a) The aggregate outstanding principal balance of such Loan is $            .

 

  (b) The last day of the current LIBOR Interest Period for such Loan is
                    .

 

  (c) The principal amount of such Loan to be converted is $            .

 

  (d) The requested effective date of the conversion of such Loan is
                    .

 

  ¨ Continuing all or a portion of a LIBOR Rate Loan as a LIBOR Rate Loan

 

  (a) The aggregate outstanding principal balance of such Loan is $            .

 

   C-1   

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

 

  (b) The last day of the current LIBOR Interest Period for such Loan is
                    .

 

  (c) The principal amount of such Loan to be continued is $            .

 

  (d) The requested effective date of the continuation of such Loan is
                    .

 

  (e) The requested LIBOR Interest Period applicable to the continued Loan is
                    .

2. All of the conditions applicable to the conversion or continuation of the
Loan requested herein as set forth in the Loan Agreement have been satisfied or
waived as of the date hereof and will remain satisfied or waived to the date of
such Loan.

3. No Default or Event of Default Exists.

4. Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Loan Agreement.

IN WITNESS WHEREOF, the undersigned, on behalf of Borrower, has executed this
Notice of Conversion/Extension this      day of             , 20    .

 

DEKANIA INVESTORS, LLC By:  

 

Name:   Title:  

 

   C-2   

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

 

EXHIBIT D

FORM OF ADVANCE REQUEST

Dekania Investors, LLC

2929 Arch Street

Philadelphia, PA 19104

(“Borrower”)

To: TD Bank, N.A.

1701 Route 70 East

Cherry Hill, NJ 08034

(“Agent”)

Borrower hereby requests an Advance in the amount of $             pursuant to
Section 2.5 of that certain Loan and Security Agreement by and among Borrower,
Agent, Issuing Bank and the financial institutions party thereto, from time to
time, dated                     , 2010 (as amended, restated or otherwise
modified from time to time, the “Loan Agreement”). Capitalized terms used herein
without definition shall have the meaning given to them in the Loan Agreement.
Borrower hereby requests that such Advance accrue interest at the (select one)
[Adjusted Base Rate/ LIBOR Rate]. If a LIBOR Rate Loan, the LIBOR Interest
Period is _________. The proposed date of the Advance is
                                        .

Borrower hereby represents and warrants to Lender as follows:

a. There exists no Default or Event of Default under the Loan Agreement.

b. All representations, warranties and covenants made in the Loan Agreement are
true and correct in all material respects as of the date hereof.

c. The aggregate principal amount of all Advances outstanding under the Term
Loan Facility, prior to giving effect to this Advance, is $            .

d. The number of LIBOR Rate Loans outstanding after giving effect to this
Advance request will be                      (cannot exceed five (5)).

 

DEKANIA INVESTORS, LLC By:  

 

Name:   Title:  

Date:                     , 20    

 

   D-1   

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

 

EXHIBIT E

QUARTERLY COMPLIANCE CERTIFICATE

 

TD Bank, N.A.

1701 Route 70 East

Cherry Hill, NJ 08034

Attention:                                         

                       , 20    

The undersigned, an Authorized Officer of Dekania Investors, LLC (“Borrower”),
gives this certificate to TD Bank, N.A. (“Agent”), in accordance with the
requirements of Section 6.10 of that certain Loan and Security Agreement dated
                    , 2010, by and among Borrower, Agent, Issuing Bank and the
financial institutions party thereto, from time to time (as amended, restated or
otherwise modified from time to time, “Loan Agreement”). Capitalized terms used
in this Certificate, unless otherwise defined herein, shall have the meanings
ascribed to them in the Loan Agreement.

1. Based upon my review of the consolidated balance sheets and statements of
income of Borrower for the fiscal period ending                     , 20    ,
copies of which are attached hereto, I hereby certify that as at/for such period
(as applicable):

a. The Consolidated Net Worth of the Dekania Group is                     ;

b. The Fixed Charge Coverage Ratio of the Dekania Group is                     ;

c. The Leverage Ratio of the Dekania Group is                     ;

d. The Debt Service Coverage Ratio of the Dekania Group is                     .

Attached as Schedule “A” are the details underlying such financial covenant
calculations.

2. No Default exists on the date hereof, other than:                      [if
none, so state]; and

3. No Event of Default exists on the date hereof, other than:
                     [if none, so state].

 

   E-1   

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

 

Very truly yours, DEKANIA INVESTORS, LLC By:  

 

Name:   Title:  

 

   E-2   

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

 

SCHEDULE A

 

Lenders

   Pro Rata
Percentage     Term Loan
Pro Rata Share  

TD Bank, N.A.

     100 %    $ 14,600,000                    

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

 

SCHEDULE B

TD Bank, N.A.

1701 Route 70 East

Cherry Hill, NJ 08034

Attn:    Richard A. Zimmerman

Telecopier:      856-751-6884

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

 

SCHEDULE C

Excluded Management Fees

33% of Alesco CDO I (33% paid to Sandler O’Neill as sub-advisor)

33% of Alesco CDO II (33% paid to Sandler O’Neill as sub-advisor)

33% of Alesco CDO III (33% paid to Sandler O’Neill as sub-advisor)

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

 

SCHEDULE D

Management Agreements

CDO Deals

 

Issuer

  

Manager

   Closing Date Alesco I    Cohen & Company Financial Management, LLC   
09/23/03 Dekania I    Dekania Capital Management, LLC    09/30/03 Alesco II   
Cohen & Company Financial Management, LLC    12/21/03 Alesco III    Cohen &
Company Financial Management, LLC    03/23/04 Dekania II    Dekania Capital
Management, LLC    04/27/04 Alesco IV    Cohen & Company Financial Management,
LLC    05/14/04 Alesco V    Cohen & Company Financial Management, LLC   
09/10/04 Alesco VI    Cohen & Company Financial Management, LLC    12/17/04
Alesco VII    Cohen & Company Financial Management, LLC    04/18/05 Kleros I   
Strategos Capital Management, LLC    06/03/05 Alesco VIII    Cohen & Company
Financial Management, LLC    08/08/05 Dekania Europe I    Dekania Capital
Management, LLC    09/07/05 Alesco IX    Cohen & Company Financial Management,
LLC    12/14/05 Kleros II    Strategos Capital Management, LLC    01/10/06
Libertas I    Strategos Capital Management, LLC    05/25/06 Kleros Real Estate I
   Strategos Capital Management, LLC    06/30/06 Kleros Real Estate II   
Strategos Capital Management, LLC    08/03/06 Kleros III    Strategos Capital
Management, LLC    09/26/06 Dekania Europe II    Dekania Capital Management, LLC
   09/27/06

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

 

Kleros IV    Strategos Capital Management, LLC    12/15/06 Kleros V    Strategos
Capital Management, LLC    01/10/07 Libertas II    Strategos Capital Management,
LLC    02/15/07 Kleros RE IV    Strategos Capital Management, LLC    02/27/07
Kleros VII    Strategos Capital Management, LLC    04/05/07 Dekania Europe III
   EuroDekania Management Limited    06/07/07 Kleros VIII    Strategos Capital
Management, LLC    06/26/07 Libertas V    Strategos Capital Management, LLC   
07/19/07 Kleros IX    Strategos Capital Management, LLC    11/06/07 Neptuno CLO
III B.V.    EuroDekania Management Limited (Junior Manager)    12/05/07 Xenon
Capital Public Limited Company    EuroDekania Management Limited    08/13/08

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

 

SCHEDULE E

Permanent Investments

Section 1

 

Description

   # of
Shares      Value as  of
6-30-10  

Star Asia Finance, Ltd.

     3,508,876         30,899,162   

Star Asia Finance, LLC

     15,000         132,091   

Muni Funding Company of America, LLC

     1,000,200         2,450,490   

EuroDekania Ltd

     525,002         474,282   

Non-Profit Preferred Funding I Preferred Shares

     250         132,987   

Alesco VI Preferred Shares

     100         —     

Alesco VII Preferred Shares

     500         —     

Alesco IX Preferred Shares

     2,655         —     

Kleros I Preferred Shares

     1,500         —     

Kleros II Preferred Shares

     600         —                          34,089,012   

Description

   LP Units      Value as of
6-30-10  

Brigadier Capital, LP

     326,582         326,582   

Brigadier Capital, LP

     86,917         86,917   

Strategos Deep Value Onshore Fund, LP

     5,000,000         5,764,338   

Strategos Deep Value Offshore Fund, LP

     10,000,000         11,573,522                        17,751,359        
Total         51,840,371               

 

   Page 1 of 3   

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

 

Section 2

 

Description - Structured Finance Investments

   # of Shares  or
Notional
Amount      Value as  of
6-30-10  

Alesco Preferred Funding X, Ltd. Preference Shares

     24,162      $ —     

Alesco Preferred Funding XI, Ltd. Preference Shares

     17,600         —     

Alesco Preferred Funding XII, Ltd. Preference Shares

     17,600         —     

Alesco Preferred Funding XIII, Ltd. Preference Shares

     13,440         —     

Alesco Preferred Funding XIV, Ltd. Preference Shares

     20,800         —     

Alesco Preferred Funding XV, Ltd. Preference Shares

     15,600         —     

Alesco Preferred Funding XVI, Ltd. Preference Shares

     10,400         —     

Alesco Preferred Funding XVII, Ltd. Preference Shares

     14,700         —     

Kleros Real Estate CDO I, Ltd. Preference Shares

     4,000         —     

Kleros Real Estate CDO II, Ltd. Preference Shares

     4,000         —     

Kleros Real Estate CDO IV, Ltd. Preference Shares

     12,000         —     

Libertas Preferred Funding I, Ltd.

     2,000         —     

Kleros Preferred Funding V

     3,000         —     

Kleros Preferred Funding VII

     3,200         —     

Bear Stearns Adjustable Rate Mortgage Trust 2007-02

     11,230,602         185,753                        185,753   

 

   Page 2 of 3   

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

 

Description - Other Investments

   Notional
Amount      Value as of
6-30-10  

Peerless Commercial Loan

     11,745,590         1,200,000   

WDC Exploration & Wells Holding LLC

     500,000         —     

Yarhouse USA, Inc.

     500,000         250,000   

On-Balance Sheet Residential Mortgage Loans

     1,480,000         262,849   

REO Property

     80,143         0                        1,712,849   

 

   Page 3 of 3   

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SCHEDULE F

Subsequent Assigned CDO Agreements

 

  (1) Collateral Management Agreement, dated as of September 25, 2003, by and
between Alesco Preferred Funding I, Ltd. and Cohen Bros. Financial Management,
LLC (now known as “Cohen & Company Financial Management, LLC”).

 

  (2) Collateral Management Agreement, dated as of December 19, 2003, by and
between Alesco Preferred Funding II, Ltd. and Cohen Bros. Financial Management,
LLC (now known as “Cohen & Company Financial Management, LLC”).

 

  (3) Collateral Management Agreement, dated as of March 25, 2004, by and
between Alesco Preferred Funding III, Ltd. and Cohen Bros. Financial Management,
LLC (now known as “Cohen & Company Financial Management, LLC”).

 

  (4) Collateral Management Agreement, dated as of May 18, 2004, by and between
Alesco Preferred Funding IV, Ltd. and Cohen Bros. Financial Management, LLC (now
known as “Cohen & Company Financial Management, LLC”).

 

  (5) Collateral Management Agreement, dated as of September 14, 2004, by and
between Alesco Preferred Funding V, Ltd. and Cohen Bros. Financial Management,
LLC (now known as “Cohen & Company Financial Management, LLC”).

 

  (6) Collateral Management Agreement, dated as of December 21, 2004, by and
between Alesco Preferred Funding VI, Ltd. and Cohen Bros. Financial Management,
LLC (now known as “Cohen & Company Financial Management, LLC”).

 

  (7) Collateral Management Agreement, dated as of April 19, 2005, by and
between Alesco Preferred Funding VII, Ltd. and Cohen Bros. Financial Management,
LLC (now known as “Cohen & Company Financial Management, LLC”).

 

  (8) Collateral Management Agreement, dated as of August 4, 2005, by and
between Alesco Preferred Funding VIII, Ltd. and Cohen Bros. Financial
Management, LLC (now known as “Cohen & Company Financial Management, LLC”).

 

  (9) Collateral Management Agreement, dated as of December 15, 2005, by and
between Alesco Preferred Funding IX, Ltd. and Cohen Bros. Financial Management,
LLC (now known as “Cohen & Company Financial Management, LLC”).

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

 

Schedule 1.1(a)

Permitted Indebtedness

Unsecured Subordinated Promissory Note dated June 25, 2008 with Christopher
Ricciardi for $1,056,233.91 as of June 30, 2010.

Unsecured Subordinated Promissory Note dated June 25, 2008 with Daniel Cohen for
$2,112,447.80 as of June 30, 2010.

Unsecured Subordinated Promissory Notes dated December 16, 2009 issued to the
former Cohen Financial Group, Inc. (“CFG”) stockholders for $6,338,675 as of
June 30, 2010. In connection with the dissolution of CFG in connection with the
Merger, each Class A stockholder of CFG received a new promissory note (“New
Holder Note”) evidencing Borrower’s obligation to pay to such holder its pro
rata share of the original Unsecured Subordinated Promissory Note (plus any
interest that is then accrued and unpaid) and which otherwise has substantially
the same terms and provisions (as more fully discussed below) as contained in
the original Unsecured Subordinated Promissory Note. Mr. Cohen and Mr. Ricciardi
are Class A stockholders of CFG and received their pro rata share of the
original Unsecured Subordinated Promissory Note.

The Unsecured Subordinated Promissory Notes mature on June 20, 2013 and bear
interest at an annual rate of 12%. A portion of this interest, 9%, is payable in
cash semiannually on May 1 and November 1 of each year commencing on November 1,
2008. The remaining portion, 3%, is paid in-kind at an annual rate of 3% which
is also payable semiannually. All accrued in-kind interest will be added to the
unpaid principal balance of the Unsecured Subordinated Promissory Notes on each
May 1 and November 1, and thereafter the increased principal balance shall
accrue interest at the annual rate of 12%.

Cohen Securities Funding LLC repurchase agreement liabilities with South Street
Securities, LLC, which, as of June 30, 2010, were $776,937.48.

Cohen Securities Funding LLC repurchase agreement liabilities with Pennant
Management, Inc., which, as of June 30, 2010, were $2,689,500.

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

 

Schedule 1.1(b)

Existing Liens and Claims

Security Deposit paid to NetJets Aviation, Inc. - €74,424

Security Deposit paid to 135 East 57th Street LLC, - $1,440,000

Security Deposit paid to Regus Group Boston - $2,800

Security Deposit paid to Preferred Offices Bethesda - $2,795

Security Deposit paid to Gateway Center, LLC - $11,000

Security Deposit paid to Regus Group San Francisco - $1,969

Security Deposit paid to Regus Group Los Angeles - $10,000

Cohen Securities Funding LLC repurchase agreement liabilities with South Street
Securities, LLC, which, as of June 30, 2010, were $776,937.48.

Cohen Securities Funding LLC repurchase agreement liabilities with Pennant
Management, Inc., which, as of June 30, 2010, were $2,689,500.

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

 

Schedule 5.1

State & Jurisdictions Where Borrower & Subsidiary Guarantors Are Qualified To Do
Business

 

Company Name

   State of Formation    Foreign  Qualification
States Alesco Collateral Holdings I, L.P.    DE    PA Alesco Funding LLC    DE
   Alesco Holdings, Ltd.    Cayman    Alesco Loan Holdings Trust    MD    NY, PA
Alesco Loan Holdings, LLC    DE    PA Alesco TPS Holdings, LLC    DE    NY, PA
Alesco Warehouse Conduit, LLC    DE    PA Brigadier Capital Management LLC    DE
   NY Brigadier GP LLC    DE    Cira ECM, LLC    DE    Cohen & Compagnie    FR
   Cohen & Company Financial Management, LLC    DE    NY, PA Cohen & Company
Funding, LLC    DE    PA Cohen & Company Management, LLC    DE    NY, PA Cohen &
Company Ventures, LLC    DE    Cohen Asia Investments Ltd.    Cayman    Cohen
Bros. Acquisitions, LLC    DE    PA Cohen Brothers, LLC d/b/a Cohen & Company   
DE    IL, NY, PA Cohen Securities Funding LLC    DE    PA Dekania Capital
Management, LLC    DE    PA Dekania Investors, LLC    DE    PA EuroDekania
Management Limited    UK    Strategos Capital Management, LLC    DE    PA Sunset
Financial Holdings, LLC    DE    PA Sunset Funding LLC    DE    Sunset Holdings,
Ltd.    Cayman    Sunset Investment Vehicle, LLC    DE    Sunset Loan Holdings
Trust    MD    PA Sunset TPS Holdings, LLC    DE    PA

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

 

Schedule 5.2

Places of Business

10100 Santa Monica Boulevard

Suite 300

Los Angeles, CA 90067

One Market Street

36th Floor

San Francisco, CA 94111

433 Plaza Real

Suite 275

Boca Raton, FL 33432

181 West Madison Street

Suite 3775

Chicago, IL 60602

101 Federal Street

16th Floor

Boston, MA 02110

3 Bethesda Metro Center

Bethesda, MD 20814

135 E. 57th Street, 21st Floor

New York, NY 10022

20 East 46th Street

Suite 1202

New York, NY 10017

2929 Arch Street

17th Floor and 15th Floor

Philadelphia, PA 19104

Gateway Center, Suite 208

136 Heber Avenue

Park City, Utah 84060

35, Avenue Franklin D. Roosevelt

5th Floor

Paris, France 75008

Cannon Bridge House

25 Dowgate Hill, 4th Floor

London EC4

U.K.

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

 

Schedule 5.3

Judgments, Proceedings, Litigation and Orders

Cohen & Company Securities, LLC (“CCS”) is a party to litigation commenced in
2009 in the United States District Court for the Northern District of Illinois
(the “Illinois Court”) under the caption Frederick J. Grede, not individually,
but as Liquidation Trustee and Representative of the Estate of Sentinel
Management Group, Inc. v. Delores E. Rodriguez, Barry C. Mohr, Jr., Jacques de
Saint Phalle, Keefe, Bruyette & Woods, Inc., and Cohen & Company Securities, LLC
. The plaintiff in this case is the Liquidation Trustee for the Estate of
Sentinel Management Group, Inc., or Sentinel, which filed a bankruptcy petition
in August 2007. The liquidation trustee alleges that CCS sold Sentinel
securities, mainly collateralized debt obligations, that the liquidation trustee
contends were unsuitable for Sentinel and that CCS violated Section 10(b) of the
Exchange Act and Rule 10b-5. The liquidation trustee also seeks relief under the
Illinois Blue Sky Law, the Illinois Consumer Fraud Act, the United States
Bankruptcy Code, and under common law theories of negligence and unjust
enrichment. CCS is vigorously defending the claims. By order dated July 8, 2009,
the Illinois Court dismissed the Liquidation Trustee’s Illinois Consumer Fraud
Act claim. Discovery is ongoing with respect to the remaining claims. No
contingent liability was recorded in Borrower’s consolidated financial
statements related to this litigation. Although CCS does not currently believe
it is reasonably likely than an adverse judgment will be rendered against it,
such adverse judgment could potentially have a Material Adverse Effect.

CCS is also party to litigation commenced on May 21, 2009 in the Illinois Court
under the caption Frederick J. Grede, not individually, but as Liquidation
Trustee of the Sentinel Liquidation Trust, Assignee of certain claims v. Keefe,
Bruyette & Woods, Inc., Cohen & Company Securities, LLC., Delores E. Rodriguez,
Barry C. Mohr, Jr., and Jacques de Saint Phalle. The plaintiff in this case is
the Liquidation Trustee of the Sentinel Liquidation Trust, which emerged from
the bankruptcy of Sentinel, filed in August 2007. The Liquidation Trustee,
purportedly as the assignee of claims of Sentinel’s customers, alleges that, by
recommending that Sentinel purchase securities, mainly collateralized debt
obligations, that the Liquidation Trustee deems to have been unsuitable for
Sentinel’s customer accounts, CCS aided and abetted breaches of fiduciary duties
purportedly owed by Sentinel and its head trader to Sentinel’s customers, in
violation of Illinois common law. The complaint also alleges claims under common
law theories of negligence and unjust enrichment. CCS will vigorously defend all
claims. CCS filed a motion to dismiss the Liquidation Trustee’s complaint on
July 21, 2009. On July 28, 2009, the Illinois Court dismissed what management
believes to be a substantively identical case brought by the Liquidation Trustee
against The Bank of New York Mellon Corp. (“BNYM”). On August 19, 2009, the
Illinois Court stayed this action indefinitely, pending a decision in the
Liquidation Trustee’s appeal of the judgment of dismissal in the action
involving BNYM, and held CCS’s motion to dismiss in abeyance. The dismissal has
been reversed and remanded to the Illinois Court in the BNYM case, but no action
has been taken by the Illinois Court in the litigation against CCS. No
contingent liability was recorded in Borrower’s consolidated financial
statements related to this litigation. Although CCS does not currently believe
it is reasonably likely than an adverse judgment will be rendered against it,
such adverse judgment could potentially have a Material Adverse Effect.

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

 

Cohen and its registered investment advisor subsidiary, Cohen & Company
Financial Management, LLC (f/k/a Cohen Bros. Financial Management, LLC) are also
named in a lawsuit filed on August 6, 2009 in the Supreme Court of the State of
New York, County of Kings, captioned Riverside National Bank of Florida v.
Taberna Capital Management, LLC, Trapeza Capital Management, LLC, Cohen &
Company Financial Management, LLC f/k/a Cohen Bros. Financial Management LLC,
FTN Financial Capital Markets, Keefe, Bruyette & Woods, Inc., Merrill Lynch,
Pierce, Fenner & Smith, Inc., Bank of America Corporation, as successor in
interest to Merrill Lynch & Co., JP Morgan Chase, Inc., JP Morgan Securities,
Citigroup Global Markets, Credit Suisse (USA) LLC, ABN AMRO, Cohen & Company,
Morgan Keegan & Co., Inc., SunTrust Robinson Humphrey, Inc., The McGraw-Hill
Companies, Inc., Moody’s Investors Services, Inc. and Fitch Ratings, Ltd. On
September 28, 2009, after a demand was made by Cohen and its co-defendants to
change venue, plaintiff filed a stipulation with the Supreme Court of the State
of New York, County of Kings, consenting to a change in venue from Kings County
to New York County.

On or about November 13, 2009, plaintiff filed a new complaint in the Supreme
Court of the State of New York, County of New York and filed a discontinuance of
the original action on November 23, 2009. The new complaint is captioned
Riverside National Bank of Florida v. The McGraw-Hill Companies, Inc., Moody’s
Investors Service, Inc., Fitch, Inc., Taberna Capital Management, LLC, Trapeza
Capital Management, LLC, Cohen & Company Financial Management, LLC f/k/a Cohen
Bros. Financial Management LLC, FTN Financial Capital Markets, Keefe Bruyette &
Woods, Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., JP Morgan Chase & Co.
(1) , J.P. Morgan Securities, Inc., Citigroup Global Markets, Credit Suisse
Securities (USA) LLC, ABN Amro, Cohen & Company and Suntrust Robinson Humphrey,
Inc., and alleges that offering memoranda issued in connection with certain
interests in securitizations it purchased failed to disclose alleged rating
agencies’ conflicts of interest. Plaintiff alleges, among other things, common
law fraud and breaches of certain alleged duties.

On April 16, 2010, Riverside was closed by the Office of the Comptroller of the
Currency. Subsequently, the Federal Deposit Insurance Corporation (the “FDIC”)
was named receiver of the bank. By letter dated April 19, 2010, Riverside
requested a 30 day extension for the oral argument on the defendants’ motions to
dismiss which was originally scheduled for May 12, 2010. On May 4, 2010, the
FDIC filed a motion to substitute as plaintiff and for an order staying the
litigation for 90 days which was subsequently granted. On June 3, 2010, Cohen
and its co-defendants removed the action to the United States District Court for
the Southern District of New York and on June 25, 2010, Judge Deborah Batts
signed an order providing that defendants are to re-file their motions to
dismiss by August 24, 2010, after which the FDIC will have 60 days to respond
and defendants will have 30 days for their reply. Although Borrower does not
currently believe it is reasonably likely than an adverse judgment will be
rendered against it, such adverse judgment could potentially have a Material
Adverse Effect.

 

1

The action was dismissed without prejudice against J.P Morgan Chase & Co. by
stipulation dated December 10, 2009.

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

 

Schedule 5.7

Federal Tax Identification Numbers of Borrower & Subsidiary Guarantors

 

Company Name

   State of
Formation    EIN    State / Country
ID Number

Alesco Collateral Holdings I, L.P.

   DE    68-0664894    4463772

Alesco Funding LLC

   DE    27-0138974    4095760

Alesco Holdings, Ltd.

   Cayman    98-0489740    WK-155682

Alesco Loan Holdings Trust

   MD    04-7022042    B11094505

Alesco Loan Holdings, LLC

   DE    26-4286426    4370124

Alesco TPS Holdings, LLC

   DE    83-0450244    4112109

Alesco Warehouse Conduit, LLC

   DE    20-5975473    4259224

Brigadier Capital Management, LLC

   DE    42-1709932    4183552

Brigadier GP, LLC

   DE    87-0770835    4160506

Cira ECM, LLC

   DE    65-1246012    3947923

Cohen & Compagnie

   FR    NA    480 820 513

Cohen & Company Financial Management, LLC

   DE    51-0483226    3692613

Cohen & Company Funding, LLC

   DE    03-0601028    4197674

Cohen & Company Management, LLC

   DE    14-1944454    4084630

Cohen & Company Ventures, LLC

   DE    26-0272737    4340129

Cohen Asia Investments Ltd.

   Cayman    98-0523411    181521

Cohen Bros. Acquisitions, LLC

   DE    84-1703718    4117186

Cohen Brothers, LLC d/b/a Cohen & Company

   DE    01-0825075    3867388

Cohen Securities Funding LLC

   DE    27-0981262    4733960

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

 

Dekania Capital Management, LLC

   DE    13-4265112    3672210

Dekania Investors, LLC

   DE    54-2122809    3690116

EuroDekania Management Limited

   UK    98-0510375    5894236

Strategos Capital Management, LLC

   DE    30-0291839    3825891

Sunset Financial Holdings, LLC

   DE    20-4928744    4161856

Sunset Funding LLC

   DE    20-4934065    4161913

Sunset Holdings, Ltd.

   Cayman    98-0500646    WK-167838

Sunset Investment Vehicle, LLC

   DE    20-1282350    3821364

Sunset Loan Holdings Trust

   MD    20-5238835    B11304482

Sunset TPS Holdings, LLC

   DE    20-4932399    4161855

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

 

Schedule 5.9

Subsidiaries & Affiliates

Part 1

Section A – Subsidiaries

Brigadier Capital Management LLC

Brigadier GP LLC

Cira ECM Funding, LLC - f/k/a Emporia Capital Funding, LLC

Cira ECM, LLC, f/k/a Emporia Capital Management, LLC

Cohen & Compagnie

Cohen & Company Financial Management, LLC

Cohen & Company Funding, LLC

Cohen & Company Management, LLC

Cohen & Company Securities, LLC

Cohen & Company Ventures, LLC

Cohen Asia Investments Ltd.

Cohen Bros. Acquisitions, LLC

Dekania Capital Management, LLC

Dekania Investors, LLC

EuroDekania Management Limited

Star Asia Management Ltd.

Strategos Capital Management, LLC

Strategos Deep Value Credit GP, LLC

Strategos Deep Value Credit II GP, LLC

Strategos Relative Value GP I, LLC

Section B – Affiliates

Brigadier Capital LP

Brigadier Capital Master Fund Ltd.

Brigadier Capital Offshore Fund Ltd.

Brigadier Capital Offshore Holding Company Ltd.

Cohen Bros. Financial, LLC

Dekania Corp.

EuroDekania Limited

EuroDekania Operating Company, LLC

RAIT Financial Trust

Star Asia Finance, Limited

Star Asia Finance, LLC

Star Asia Management Japan Ltd.

Star Asia SPV, LLC

Strategos Deep Value Mortgage Fund LP

Strategos Deep Value Mortgage (Offshore) Fund L.P.

Strategos Deep Value Mortgage Master Fund Ltd.

Strategos Deep Value Mortgage (Offshore) Fund 1-A L.P.

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

 

Strategos Deep Value Mortgage Fund II LP - Fund II Offshore Entity

Strategos Deep Value Mortgage Master Fund II Ltd. - Fund II

Strategos Relative Value Mortgage Fund LP

Strategos Deep Value Mortgage Onshore Fund II LP

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

 

Part 2

Section A – Subsidiaries

Alesco Collateral Holdings I, L.P.

Alesco Funding LLC

Alesco Holdings, Ltd.

Alesco Loan Holdings Trust

Alesco Loan Holdings, LLC

Alesco Real Estate Holdings, LLC

Cohen Securities Funding LLC

Alesco TPS Holdings, LLC

Emporia Preferred Funding IV, Ltd.

Alesco Warehouse Conduit, LLC

Kleros Real Estate III Common Holdings LLC

Kleros Real Estate IV Common Holdings LLC

Sunset Financial Holdings, LLC

Sunset Financial Statutory Trust I

Sunset Funding LLC

Sunset Holdings, Ltd.

Sunset Investment Vehicle, LLC

Sunset Loan Holdings Trust

Sunset Real Estate Holdings, LLC

Sunset TPS Holdings, LLC

Section B – CDO / CLO Entities

Alesco CLO Funding, LLC

Alesco Preferred Funding X, Ltd.

Alesco Preferred Funding XI, Ltd.

Alesco Preferred Funding XII, Ltd.

Alesco Preferred Funding XIII, Ltd.

Alesco Preferred Funding XIV, Ltd.

Alesco Preferred Funding XV, Ltd.

Alesco Preferred Funding XVI, Ltd.

Alesco Preferred Funding XVII, Ltd.

Bear Stearns Adjustable Rate Mortgage Trust 2007-02

Emporia Preferred Funding II, Ltd.

Emporia Preferred Funding III, Ltd.

Kleros Preferred Funding V, PLC

Kleros Preferred Funding VII, Ltd.

Kleros Real Estate CDO I, Ltd.

Kleros Real Estate CDO II, Ltd.

Kleros Real Estate CDO IV, Ltd.

Libertas Preferred Funding I, Ltd.

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

 

Schedule 5.10(a)

Existing Guaranties, Investments and Borrowings

 

Description

   Type      Amount as of
June 30, 2010  

Star Asia Finance, Ltd.

     Investment         30,889,162   

Star Asia Finance, LLC

     Investment         132,091   

Muni Funding Company of America, LLC

     Investment         2,450,490   

EuroDekania Ltd

     Investment         474,282   

Non-Profit Preferred Funding I Preferred Shares

     Investment         132,091   

 

Description

   Type    Notional
Amount as of
June 30,
2010      Amount
Due as of
June 30,
2010  

Koch Bond Derivative Contract

   Potential Guarantee    $ 8,750,000       $ —     

$50,000 letter of credit for Chicago lease.

$1,424,000 letter of credit for GSME SPAC.

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

 

Schedule 5.10(b)

Leases

 

Leased Item

  

Lessee

  

Lessor

IRC5180 (Cira)    Cohen & Company    Canon IRC5185i & IRC5050N (Cira)    Cohen &
Company    Canon Busines IR6570 & IRC5050N    Cohen & Company    Canon Busines
IRC5180    Cohen & Company    Canon Busines IR4570    Cohen & Company    Canon
Busines IRC5185i    Cohen & Company    Canon Busines Citation Excel    Cohen
Brothers, LLC    NetJets Paris - office space    Cohen Freres Sas    La Bailleur
Phila office space (Cira, Suite 1703)    Cohen Brothers, LLC    Brandywine Cira,
LP Phila office space (Cira, Suite 1525)    Cohen Brothers, LLC    Capsicum
Phila office space (Cira, Suite 1525)    Cohen Brothers, LLC    Capsicum - add’l
Phila office space (Cira, old Capsicum)    Cohen Brothers, LLC    Brandywine
Cira, LP NY office space    Cohen Bros. & Company    135 East 57th Street LLC NY
office space - 22nd Floor    Cohen Bros. & Company    135 East 57th Street LLC
Chicago - office space (181 West Madison)    Cohen Bros. & Company    181 West
Madison London - office space    EuroDekania Management, Ltd.    Cannon Bridge
San Francisco    Cohen & Company    Regus Boston, MA    Cohen & Company    Regus
Park City, Utah    Cohen & Company    Gateway Center LLC Los Angeles, CA   
Cohen & Company    Regus Boca Raton, FL    Cohen & Company    Regus Bethesda, MD
   Cohen & Company    BMC Office, LLC SUBLEASES       Phila office space (Cira
sublease)    RAIT    Cohen & Company NY office space (Sublease 22nd Floor)   
The Olnick Organization    Cohen & Company

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

 

Schedule 5.11 (c)

Employee Benefit Plans

 

Benefit

  

Provider

Health Insurance    Blue Cross/Blue Sheild (Personal Choice 10 & Keystone POS
10C) Dental    Guardian Life & AD&D Insurance    Guardian Short & Long Term
Disability Insurance    Guardian NY Short Term Disability Insurance    Guardian
401K (Traditionl & Roth Plans)    John Hancock Expat Medical, Dental, Life and
Long Term Disability    Cigna International Expat Medical    Cigna International
Expat Dental    Cigna International Expat Life and Long Term Disability    Cigna
International Supplemental Life, STD, LTD, Cancer, Accident Insurance   
Colonial Flex Spending Accounts (Medical, Dependent Care, Transit)    Ameriflex
COBRA (Continuation of Benefits Program)    Ameriflex

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

 

Schedule 5.13(a)

Schedule of Old Names

Alesco Securities Funding LLC

Alesco TPS Holdings II, LLC

Cohen & Company Financial Limited

Cohen Bros. & Company, LLC

Cohen Bros. Asset Backed Management, LLC

Cohen Bros. Securities, LLC

Cohen Bros. Toroian Investment Management, LLC

Cohen Brothers CLO Manager, LLC

Cohen Brothers Financial Management, LLC

Cohen Brothers Management, LLC

Cohen Freres

Cohen Securities Funding LLC

Dekania Acquisition Corp.

Dustcroft Limited

Emporia Capital Funding LLC

Emporia Capital Funding, LLC

Emporia Capital Holdings, LLC

Emporia Capital Management, LLC

Emporia Preferred Funding II, Ltd.

Peerless Holdings I, L.P.

Strategos Asset Management, LLC

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

 

Schedule 5.13(b)

Worldwide Trademark Registrations

 

Trademark

  

Country

  

Applicant

  

Status

   Filing Date
Reg. Date    Appl No.
Reg. No.   

International

Class(es) & Goods/

Services

   Next Action ALESCO    EU    Cohen Bros. Financial Management, LLC   
Registered    2/15/06
1 /16/07    4903886   

Class: 35 Int. Business services, advice, information and consultancy related
thereto

 

Class: 36 Int. Financial services; advice, information and consultancy related
thereto

   2/15/16 -
Renewal ALESCO PREFERRED FUNDING    US    Cohen Bros. Financial Management, LLC
   Registered    4/19/04
12/13/05    78/404272
3026980    Class: 36 Int. Financial services in the nature of an investment
security    12/13/11-
Maintenance KLEROS    US    Cohen Brothers, LLC    Registered    7/14/05
7/4/06    78/670772
3111872    Class: 36 Int. Financial services in the nature of an investment
security    1/4/12 -
Affidavit of
Use KLEROS    EU    Cohen Bros. Financial Management, LLC    Registered   
2/15/06
1/16/07    4903837   

Class: 35 Int. Business services, advice, information and consultancy related
thereto

 

Class: 36 Int. Investment services; financial services in the nature of an
investment security

   2/15/16 -
Renewal

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

 

DEKANIA    EU    Cohen Bros. Financial Management, LLC    Registered    2/15/06

5/2/07

   4903639   

Class: 16 Printed matter;

printed publications

 

Class: 35 Business services; advice, information and consultancy related thereto

 

Class: 36 Financial services; advice, information and consultancy relating
thereto

   2/15/16-
Renewal DEKANIA    US    Cohen Brothers, LLC    Registered    7/14/05

5/30/06

   3098262    Class: 36 Financial services in the nature of an investment
security    5/30/12 –
Maintenance FGC    US    Cohen Brothers, LLC    Pending    4/23/10    85/021958
   Class: 36 Financial services, namely, security brokerage and money management
services; private equity fund investment services; hedge fund investment
services    CHREOS    US    Cohen Brothers, LLC    Abandoned    7/14/05   
78/670737    Class: 36 Financial services in the nature of an investment
security   

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

 

Schedule 5.13 (c)

Necessary Trademarks, Patents and Copyrights

None.

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

 

Schedule 5.14(a)

Other Associations

 

Description

  

Type of investment

Star Asia Management Ltd.

(50% ownership of the joint venture that manages Star Asia Finance Ltd)

   Equity method investment

Strategos Deep Value Credit GP, LLC

(50% ownership of the general partner that manages the Deep Value Funds)

   Equity method investment

Strategos Deep Value Credit GP II, LLC

(40% ownership of the general partner that manages the Deep Value II Funds)

   Equity method investment

Duart Capital Management, LLC

(20% ownership of the joint venture)

   Equity method investment

Star Asia SPV, LLC

(25.48% ownership of the entity)

   Equity method investment

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

 

Schedule 5.14(b)

Sponsored CDO Offerings

Section 1

 

CDO

  

Asset Type

   Preferred Share
Ownership as
of 6-30-2010      Total  Preferred
Shares
Outstanding      Percent
Owned    

Owning Entity

Alesco VI

   Bank & Insurance Trust Preferred Securities      100         62,300        
0.16 %   Cohen Bros Financial Management, LLC

Alesco VII

   Bank & Insurance Trust Preferred Securities      500         63,500        
0.79 %   Cohen Bros Financial Management, LLC

Alesco IX

   Bank & Insurance Trust Preferred Securities      2,655         44,400        
5.98 %   Cohen Bros Financial Management, LLC

Kleros I

   High Grade ABS, MBS & CDO Securities      1,500         15,500         9.68 %
  Cohen Bros Financial Management, LLC

Kleros II

   High Grade ABS, MBS & CDO Securities      600         8,000         7.50 %  
Cohen Brothers, LLC                                

Total

        6,555         260,800        

Section 2

 

CDO

  

Asset Type

   Preferred Share
Ownership as
Of 6-30-10      Total  Preferred
Shares
Outstanding      Percent
Owned    

Owning Entity

Alesco X

   Bank & Insurance Trust Preferred Securities      24,162        60,404        
40 %   Alesco Financial Holdings, LLC

Alesco XI

   Bank & Insurance Trust Preferred Securities      17,600         43,998      
  40 %   Alesco Holdings, Ltd.

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

 

Alesco XII

   Bank & Insurance Trust Preferred Securities      17,600         44,060      
  40 %   Sunset Holdings, Ltd.

Alesco XIII

   Bank & Insurance Trust Preferred Securities      13,440         33,600      
  40 %   Alesco Financial Holdings, LLC

Alesco XIV

   Bank & Insurance Trust Preferred Securities      20,800         52,000      
  40 %   Alesco Holdings, Ltd.

Alesco XV

   Bank & Insurance Trust Preferred Securities      15,600         39,000      
  40 %   Alesco Holdings, Ltd.

Alesco XVI

   Bank & Insurance Trust Preferred Securities      10,400         26,000      
  40 %   Alesco Holdings, Ltd.

Alesco XVII

   Bank & Insurance Trust Preferred Securities      14,700         36,749      
  40 %   Alesco Holdings, Ltd.

Kleros Real Estate I Preference Shares

   MBS and RMBS      4,000         4,000         100 %   Alesco Financial
Holdings, LLC

Kleros Real Estate II Preference Shares

   MBS and RMBS      4,000         4,000         100 %   Sunset Financial
Holdings, LLC

Libertas I

   High Grade ABS, MBS & CDO Securities      2,000         19,000         11 %  
Alesco Holdings, Ltd.

Kleros V

   High Grade ABS, MBS & CDO Securities      3,000         8,500         35 %  
Alesco Holdings, Ltd.

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

 

KlerosVII

   High Grade ABS, MBS & CDO Securities      3,200         8,000         40 %  
Alesco Holdings, Ltd.                                

Total

        150,500         379,311        

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

 

Schedule 5.15

Environmental Matters

None.

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

 

Schedule 5.17

Capital Stock of Borrower & Subsidiary Guarantors

Section 1

Cohen Brothers, LLC owns 100% of the membership interests in the following
entities:

Brigadier Capital Management, LLC

Brigadier GP, LLC

Cohen & Company Funding, LLC

Cohen & Company Management, LLC

Cohen & Company Securities, LLC

Cohen & Company Ventures, LLC

Cohen Asia Investment Ltd.

Cohen Bros. Acquisitions, LLC

Dekania Investors, LLC

EuroDekania Management Limited

Strategos Capital Management, LLC

Strategos Deep Value Credit GP, LLC

Strategos Deep Value Credit II GP, LLC

Cohen Brothers, LLC owns 100% of the ownership interests in:

Cohen & Compagnie, SAS

Cohen & Company Securities, LCC owns 100% of the membership interests in the
following entities:

Cira ECM Funding, LLC, f/k/a Emporia Capital Funding LLC

Cohen Bros. Acquisitions, LLC currently owns Dekania Corp.

Dekania Corp. is currently in the process of dissolution. The company has
liquidated all its assets.

Dekania Investors, LCC owns 100% of the membership interests in the following
entities:

Cohen & Company Financial Management, LLC

Dekania Capital Management, LLC

Cira ECM, LLC, f/k/a Emporia Capita1 Management, LLC

Cohen Brothers, LLC Capital Stock: (Numbers below are as of June 30, 2010)

Cohen Brothers, LLC Outstanding Membership Units = 15,626,903

Cohen Brothers, LLC Restricted Units representing, in the aggregate, the
contractual right to receive 1,258,176 Membership Units

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

 

Section 2

Cohen Brothers, LLC, owns 100% of the membership interests in the following
entities:

Alesco Loan Holdings, LLC

Sunset Investment Vehicle, LLC

Kleros Real Estate III Common Holdings, LLC

Kleros Real Estate IV Common Holdings, LLC

Sunset Financial Holdings, LLC

Alesco Warehouse Conduit, LLC

Alesco Loan Holdings Trust

Alesco TPS Holdings, LLC

Cohen Brothers, LLC, owns the percentages of preferred stock set forth below:

Alesco Preferred Funding X, Ltd. – 40%

Alesco Preferred Funding XIII, Ltd. – 40%

Kleros Real Estate CDO IV, Ltd. – 100%

Cohen Brothers, LLC, owns 50% of the limited partnership interests in the
following entity:

Alesco Collateral Holdings I, L.P.

The following entities own the equity interests set forth below:

 

Debtor

  

Collateral

   % of
Interest
Owned     Class of
Interests

Alesco Loan Holdings Trust

   Alesco Real Estate Holdings, LLC      100 %    Membership
Interests/
Units

Alesco Loan Holdings Trust

   Kleros Real Estate CDO I, Ltd.      100 %    Preferred

Alesco Real Estate Holdings, LLC

   Kleros Real Estate CDO I, Ltd.      100 %    Common

Alesco TPS Holdings, LLC

   Alesco Holdings, Ltd.      100 %    Common

Alesco TPS Holdings, LLC

   Alesco Funding, LLC      100 %    Membership
Interests/
Units

Alesco Holdings, Ltd.

   Alesco Preferred Funding XVII, Ltd.      40 %    Preferred

Alesco Holdings, Ltd.

   Alesco Preferred Funding XVI, Ltd.      40 %    Preferred

Alesco Holdings, Ltd.

   Alesco Preferred Funding XV, Ltd.      40 %    Preferred

Alesco Holdings, Ltd.

   Alesco Preferred Funding XIV, Ltd.      40 %    Preferred

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

 

Alesco Holdings, Ltd.

   Alesco Preferred Funding XI, Ltd.      40 %    Preferred

Alesco Holdings, Ltd.

   Kleros Preferred Funding VII, Ltd.      40 %    Preferred

Alesco Holdings, Ltd.

   Kleros Preferred Funding V, PLC      35.29 %    Preferred

Alesco Holdings, Ltd.

   Libertas Preferred Funding III, Ltd.      12.5 %    Preferred

Alesco Holdings, Ltd.

   Libertas Preferred Funding I, Ltd.      10.53 %    Preferred

Alesco Warehouse Conduit, LLC

   Cohen Securities Funding LLC      100 %    Membership
Interests/
Units

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

 

Debtor

  

Collateral

   % of
Interest
Owned     Class of
Interests

Sunset Financial Holdings, LLC

   Sunset Loan Holdings Trust      100 %    Common

Sunset Financial Holdings, LLC

   Sunset TPS Holdings, LLC      100 %    Membership
Interests/
Units

Sunset Loan Holdings Trust

   Sunset Real Estate Holdings, LLC      100 %    Membership
Interests/
Units

Sunset Loan Holdings Trust

   Kleros Real Estate CDO II, Ltd.      100 %    Preferred

Sunset TPS Holdings, LLC

   Sunset Funding, LLC      100 %    Membership
Interests/
Units

Sunset TPS Holdings, LLC

   Sunset Holdings, Ltd.      100 %    Common

Sunset Real Estate Holdings, LLC

   Kleros Real Estate CDO II, Ltd.      100 %    Common

Sunset Holdings, Ltd.

   Emporia Preferred Funding III, Ltd.      79.49 %    Preferred

Sunset Holdings, Ltd.

   Emporia Preferred Funding II, Ltd.      59 %    Preferred

Sunset Holdings, Ltd.

   Alesco Preferred Funding XII, Ltd.      40 %    Preferred

Sunset Funding, LLC

   Alesco CLO Funding, LLC      100 %    Membership
Interests/
Units

Sunset Funding, LLC

   Emporia Preferred Funding IV, Ltd.      100 %    Common

Kleros Real Estate IV Common Holdings, LLC

   Kleros Real Estate CDO IV, Ltd.      100 %    Common

Sunset Investment Vehicle, LLC

   Alesco Collateral Holdings I, L.P.      50 %    Partnership

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

 

Schedule 5.19

Perfection and Priority - Borrower & Subsidiary Guarantors

All financing statements related to entities mentioned below shall be filed with
the Secretary of State for the State of Delaware.

Alesco Collateral Holdings I, L.P.

Alesco Funding, LLC

Alesco Loan Holdings, LLC

Alesco Securities, LLC

Alesco TPS Holdings, LLC

Alesco Warehouse Conduit, LLC

Cira ECM, LLC, f/k/a Emporia Capital Management, LLC

Cohen & Company Financial Management, LLC

Cohen & Company Funding, LLC

Cohen & Company Management, LLC

Cohen & Company Ventures, LLC

Cohen Securities Funding LLC

Cohen Bros. Acquisitions, LLC

Cohen Brothers, LLC, d/b/a Cohen & Company

Dekania Capital Management, LLC

Dekania Investors, LLC

Strategos Capital Management, LLC

Sunset Financial Holdings, LLC

Sunset Funding, LLC

Sunset Investment Vehicle, LLC

Sunset TPS Holdings, LLC

All financing statements related to entities mentioned below shall be filed with
the Secretary of State for the State of Maryland

Alesco Loan Holdings Trust

Sunset Loan Holdings Trust

Perfection of a Security Interest in this entity below shall be done in
compliance with Cayman Island Law.

Alesco Holdings, Ltd.

Sunset Holdings, Ltd.

Cohen Asia Investments Ltd.

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

 

Schedule 5.20

Commercial Tort Claims

None.

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

 

Schedule 5.21

Letter of Credit Rights

$992,000 Letter of Credit for the benefit of Cohen & Company for the sublease of
135 East 57th, 22nd Floor, New York office space.

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

 

Schedule 6.21

Post Closing Requirements

1) Borrower shall deliver within 30 days of the Closing Date a control agreement
or agreements reasonably satisfactory to Agent between Borrower and the
appropriate securities intermediary with respect to the ownership interests of
Borrower in the following entities held in an account with such securities
intermediary:

Star Asia Finance LTD

Star Asia Finance LLC

Star Asia SPV LLC

Muni-Funding Company of America, LLC

EuroDekania Limited

Strategos Deep Value Mortgage Fund, LP

Strategos Deep Value Mortgage (Offshore) Fund, LP

Alesco Preferred Funding X, Ltd.

Alesco Preferred Funding XI, Ltd.

Libertas Preferred Funding I, Ltd.

Kleros Preferred Funding V, Plc

2) Borrower shall deliver within 30 days of the Closing Date a control agreement
or agreements between Cohen Brothers, LLC and The Bancorp Bank for deposit
accounts held by Cohen Brothers, LLC with The Bancorp Bank.

3) Borrower shall deliver within 60 days of the Closing Date Subsidiary
Guarantors’ Alesco Preferred Funding XII, Ltd. and Alesco Preferred Funding
XIII, Ltd. stock certificates pledged as collateral under the Collateral Pledge
Agreement.

4) Borrower shall deliver within 30 days of the Closing Date a filed UCC
Financing Statement Amendment terminating the UCC Financing Statement
(#2007048099) filed, on April 6, 2007, with the Washington, D.C. Recorder of
Deeds by Royal Bank of Canada, as secured party, with respect to the assets
described therein of Alesco Holdings, Ltd., as debtor.

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Schedule 7.4

Transactions with Affiliates and Subsidiaries

Monthly rental charge of $4,162 to RAIT Financial Trust for Cira Centre Office
Space.

Unsecured Subordinated Promissory Note dated June 25, 2008 with Christopher
Ricciardi for $1,056,233.91.

Unsecured Subordinated Promissory Note dated June 25, 2008 with Daniel Cohen for
$2,112,447.80.

Unsecured Subordinated Promissory Note dated December 19, 2009 with Christopher
Ricciardi for $108,958.22

Unsecured Subordinated Promissory Note dated December 19, 2009 with Daniel Cohen
for $523,277.16

The Company’s bank deposits held with The Bancorp, Inc.

The Company recognizes dividend income on its investment in Star Asia.

The Company recognizes unrealized and realized gains and losses on its
investment in Star Asia. The unrealized gains and losses and realized gains and
losses, if any, are recorded as a component of principal transactions in the
consolidated statements of operations.

The Company earns management and incentive fees on its management contract with
EuroDekania.

The Company recognizes dividend income on its investment in EuroDekania.

The Company recognizes unrealized and realized gains and losses on its
investment in EuroDekania.

The Company recognizes its share of the income or loss of Star Asia Manager as
income or loss from equity method affiliates in the consolidated statements of
operations. From time to time, the Company may advance Star Asia Manager funds
for normal operating purposes; such advances are a component of due from related
party in the consolidated balance sheets.

The Company recognizes its share of the income or loss of Star Asia SPV, LLC as
income or loss from equity method affiliates in the consolidated statements of
operations.

The Company recognizes dividend income on its investment in MFCA, as a component
of principal transactions and other income in the consolidated statements of
operations.

Under the fair value option of SFAS No. 159, the Company recognizes unrealized
and realized gains and losses on its investment in MFCA.

Deep Value General Partner has been identified as a related party because
(i) the Deep Value General Partner is an equity method affiliate of the Company;
and (ii) certain employees of the

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Company own 50% of the Deep Value General Partner. The Company recognizes its
share of the income or loss of the general partner since it is accounted for
under the equity method. The income or loss is recorded as income or loss from
equity method affiliates in the consolidated statements of operations.

The Company earns management and incentive fees on its management contract with
Deep Value Offshore Fund

The Company began reimbursing RAIT for certain costs incurred by RAIT for office
space in New York that is occupied by the Company’s chairman and principal of
its majority member.