Execution Version

 

[Trimaran Advisors, L.L.C. letterhead]

 

February 29, 2012

 

Jay R. Bloom

c/o Trimaran Fund Management, LLC

1325 Avenue of the Americas, 34th Floor

New York, NY 10019

 

Dear Mr. Bloom:

 

This letter (the “Agreement”) will confirm our offer to you of employment with
Trimaran Advisors, L.L.C. (the “Company”), under the terms and conditions that
follow.

 

1.            Position, Duties and Term.

 

(a)          You will be employed by the Company as a Portfolio Manager of the
collateral of Trimaran CLO IV Ltd. (“CLO IV”), Trimaran CLO V Ltd., Trimaran CLO
VI Ltd. and Trimaran CLO VII Ltd. (collectively, along with CLO IV, the “CLOs”)
reporting to the Chief Executive Officer (the “CEO”) of Kohlberg Capital
Corporation (“KCAP”). Promptly following the date hereof, KCAP will (unless you
by notice to KCAP elect otherwise) propose to its Nominating and Corporate
Governance Committee (the “Nominating Committee”) your nomination to its Board
of Directors of (the “KCAP Board”). Subject to the approval of such nomination
by the Nominating Committee, you shall be appointed to the KCAP Board. At the
first stockholder meeting after the date hereof at which you shall stand for
reelection to the KCAP Board, KCAP will (unless you by notice to KCAP on or
prior to the date that is 30 days prior to the date that the KCAP proxy
statement for such stockholder meeting is mailed to stockholders elect
otherwise) propose to its Nominating Committee your renomination to the KCAP
Board, and subject to the approval of such nomination by the Nominating
Committee, you shall be nominated for election by the KCAP stockholders at such
stockholder meeting.

 

(b)          As a Portfolio Manager, you shall be responsible for the management
of the collateral of the CLOs. You agree to perform the duties of your position,
including, without limitation, performing such duties as are required to satisfy
your obligations as a “Key Manager” as such term is defined in the Collateral
Management Agreement, dated as of September 29, 2005, between CLO IV and the
Company (the “CLO IV CMA”), in the form the same exists on the date hereof .
Anything in this Agreement to the contrary notwithstanding, the Company and KCAP
agree that you shall have no responsibilities or duties (including fiduciary
duties) as an employee of the Company (or agent of KCAP) other than those
responsibilities and duties expressly set forth in this Section 1(b) or in
Sections 1(d) and 3 and that your obligations in this Agreement (other than in
Section 3) are conditioned on the Company’s providing or causing to be provided
such resources as you may reasonably request and such personnel as are
reasonably necessary in connection with the management of the CLOs’ assets and
those other assets managed by KCAP and its subsidiaries and such personnel’s
reasonable performance of their duties and otherwise complying with your (or
your delegate’s) reasonable instructions.

 

 

 

 

(c)          The term of this Agreement (the “Term”) shall be for one year
following the date hereof and shall automatically renew on each anniversary of
such date unless either party delivers a written notice of nonrenewal to the
other party not later than ninety (90) days prior to any such anniversary;
provided that the Company may not deliver such notice prior to the CLO IV
Termination Date.

 

(d)          Notwithstanding anything to the contrary in this Section 1 or
elsewhere in this Agreement but subject to the immediately following sentence,
you agree not to take any action (including, without limitation, exercising any
non-renewal pursuant to Section 1(c)) that would be reasonably expected to
result in a “Key Manager Event” as such term is defined in the CLO IV CMA. For
the avoidance of doubt, the occurrence of a Key Manager Event primarily caused
by any of the following shall not result in a violation of this Section 1(d):
(i) termination (or non-renewal) of this Agreement (x) by you (A) for Good
Reason or (B) after the earlier of (I) December 1, 2017 or (II) the date on
which CLO IV is dissolved (the earlier of such dates (I) and (II), the “CLO IV
Termination Date”), or (y) by the Company for any reason, (ii) your death or
Serious Illness or (iii) any action taken by you at the direct instruction or
with the express consent of the KCAP Board. “Serious Illness” means an illness
materially adversely affecting your ability to perform your duties hereunder
with respect to CLO IV for at least 45 days, based on the written opinion of a
physician selected by you (and reasonably acceptable to the Company) delivered
to the Company.

 

(e)          The parties agree that you may perform your duties hereunder at
such location as you shall determine.

 

2.           Compensation and Benefits. During the Term, as compensation for all
services performed by you for the Company and its Affiliates and subject to your
full performance hereunder, the Company will provide you the following pay and
benefits:

 

(a)          Base Salary. The Company will pay you a base salary at the rate
shown on Schedule 2(a) per year plus, if applicable, the Kehler Base Salary
Amount, payable in accordance with the regular payroll practices of the Company
and its Affiliates and subject to increase, but not decrease, from time to time
by the KCAP Board in its discretion.

 

(b)          No Participation in Employee Benefit Plans or Paid Time Off. You
acknowledge and agree that you shall not be entitled to participate in any
employee benefit plans from time to time in effect for employees of the Company
or its Affiliates. You further acknowledge that you shall not earn any paid time
off during your employment by the Company.

 

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(c)          Business Expenses. The Company will pay or reimburse you for all
reasonable business expenses incurred or paid by you in the performance of your
duties and responsibilities for the Company hereunder, subject to any maximum
annual limit and other restrictions on such expenses set by the Company and to
such reasonable substantiation and documentation as may be specified from time
to time. Your right to reimbursement for business expenses hereunder shall be
subject to the following additional rules: (i) the amount of expenses eligible
for reimbursement during any calendar year shall not affect the expenses
eligible for reimbursement in any other taxable year, (ii) reimbursement shall
be made as soon as practicable following your submission for reimbursement, but
in all events not later than March 31 of the calendar year following the
calendar year in which the expense was incurred, and (iii) the right to
reimbursement is not subject to liquidation or exchange for any other benefit.

 

(d)          Indemnification. KCAP represents and warrants to you that the KCAP
Board has designated you, by virtue of your employment hereunder, as an agent of
KCAP and, as such, you are entitled to the indemnification rights set forth in
its Certificate of Incorporation. To the extent that any amendment to KCAP’s
Certificate of Incorporation or By-laws after the date hereof adversely affects
such rights as in effect as of the date hereof, such amendment shall not,
subject to the requirements of applicable law, reduce your rights to
indemnification thereunder. The provision of this Section 2(d) shall survive any
termination or non-renewal of this Agreement, regardless of the reason therefor.

 

3.            Confidential Information.

 

(a)          Confidential Information. During the course of your employment with
the Company, you will learn of Confidential Information, as defined below, and
you may develop Confidential Information on behalf of the Company and its
Affiliates. You agree that you will not use or disclose to any Person (except as
required by applicable law or for the proper performance of your regular duties
and responsibilities for the Company) any Confidential Information obtained by
you incident to your employment or any other association with the Company or any
of its Affiliates. You agree that this restriction shall continue to apply after
your employment terminates, regardless of the reason for such termination.

 

(b)          Protection of Documents. All documents, records and files, in any
media of whatever kind and description, relating to the business, present or
otherwise, of the Company or any of its Affiliates, and any copies, in whole or
in part, thereof (the “Documents”), whether or not prepared by you, shall be the
sole and exclusive property of the Company. You agree to safeguard all Documents
and to surrender to the Company, at the time your employment terminates, all
Documents then in your possession or control.

 

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(c)          The provisions in this Section 3 will not prohibit any (i)
retention of copies of records or disclosure (1) required by any applicable
Legal Requirement (as defined in the Purchase and Sale Agreement dated as of the
date hereof between KCAP, Commodore Holdings, L.L.C, you, Dean C. Kehler, HBK
Caravelle, L.L.C. and Trimaran Fund Management, L.L.C. (the “Purchase
Agreement”)) or Governmental Authority (as defined in the Purchase Agreement) so
long as reasonable prior notice is given to the Company of such disclosure and a
reasonable opportunity is afforded to the Company to contest the same or (2)
made or used in connection with the enforcement of any right or remedy relating
to this Agreement or the Purchase Agreement or (ii) use of (1) information
delivered pursuant to Section 8.05 of the Purchase Agreement or (2) “track
record” information for periods ending prior to January 1, 2011.

 

(d)          In signing this Agreement, you give the Company assurance that you
have carefully read and considered all the terms and conditions of this
Agreement, including the restraints imposed on you under this Section 3. You
further agree that, were you to breach any of the covenants contained in this
Section 3, the damage to the Company and its Affiliates would be irreparable.
You therefore agree that the Company, in addition to any other remedies
available to it, shall be entitled to seek preliminary and permanent injunctive
relief against any breach or threatened breach by you of any of those covenants,
without having to post bond, together with an award of its reasonable attorney’s
fees incurred in enforcing its rights hereunder. It is also agreed that each of
the Company’s Affiliates shall have the right to enforce all of your obligations
to that Affiliate under this Agreement, including without limitation pursuant to
this Section 3. Finally, no claimed breach of this Agreement or other violation
of law attributed to the Company shall operate to excuse you from the
performance of your obligations under this Section 3.

 

4.            Termination of Employment. Your employment under this Agreement
may be terminated prior to the expiration of the Term pursuant to this Section
4.

 

(a)          The Company may terminate your employment for Cause by providing
written notice to you specifying in reasonable detail the condition giving rise
to Cause no later than the 30th day following the occurrence of that condition,
providing you 30 days to remedy the condition and so specifying in the notice
and by terminating your employment within 30 days following the expiration of
the remedy period if you fail to remedy the condition. The following, as
determined by the Company in its reasonable judgment, shall constitute Cause:
(i) your material negligence in the performance of your material duties and
responsibilities hereunder to the Company, which could reasonably result in
material injury to the Company or any of its Affiliates, taken as a whole or
(ii) your material breach of any material provision of this Agreement or of
Section 6.02 or 6.04 of the Purchase Agreement, including, without limitation, a
breach of your obligations under Section 3 of this Agreement.

 

(b)          The Company may terminate your employment at any time other than
for Cause upon 90 days’ notice to you. The Company may elect to waive such
notice period or any portion thereof; but in that event, the Company shall pay
you your base salary for that portion of the notice period so waived.

 

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(c)          You may terminate this Agreement for Good Reason by providing
written notice to the Company specifying in reasonable detail the condition
giving rise to Good Reason no later than the 30th day following the occurrence
of that condition, providing the Company 30 days to remedy the condition and so
specifying in the notice and by terminating your employment within 30 days
following the expiration of the remedy period if the Company fails to remedy the
condition. The following, as determined by you, in your reasonable judgment,
shall constitute Good Reason: a material breach by the Company or KCAP of any
material provision of this Agreement.

 

(d)          This Agreement shall automatically terminate in the event of your
death during employment. In the event you become disabled during employment and,
as a result, are unable to continue to perform substantially all of your duties
and responsibilities under this Agreement, either with or without reasonable
accommodation, the Company will continue to pay you your base salary and to
provide you benefits in accordance with Section 2(c) above for up to twelve (12)
weeks of disability during any period of three hundred and sixty-five (365)
consecutive calendar days. If you are unable to return to work after twelve (12)
weeks of disability, the Company may terminate your employment, upon notice to
you. If any question shall arise as to whether you are disabled to the extent
that you are unable to perform substantially all of your duties and
responsibilities for the Company and its Affiliates, you shall, at the Company’s
request, submit to a medical examination by a physician selected by the Company
to whom you or your guardian, if any, has no reasonable objection to determine
whether you are so disabled, and such determination shall for purposes of this
Agreement be conclusive of the issue. If such a question arises and you fail to
submit to the requested medical examination, the Company’s determination of the
issue shall be binding on you.

 

5.            Other Matters Related to Termination.

 

(a)          In the event of termination of your employment with the Company,
howsoever occurring, the Company shall pay you as soon as practicable following
the effective date of such termination (the “Separation Date”) (i) your final
base salary through the Separation Date or through the end of any period of
notice waived; and (ii) reimbursement for business expenses incurred by you but
not yet paid to you as of the Separation Date; provided you submit all expenses
and supporting documentation required within 60 days of the Separation Date, and
provided further that such expenses are reimbursable under Company policies as
then in effect.

 

(b)          Following the termination of your employment by the Company without
Cause or by you for Good Reason, the Company shall pay you the base salary that
you would have received hereunder, but for such termination, from the Separation
Date through the end of the then-current Term (including any extension thereof,
if you or the Company delivers notice of such termination within ninety (90)
days prior to the expiration of the Term) (such payment, the “Severance
Payment”). Your right to receive and retain the Severance Payment is
conditioned, however, on your continued compliance with your surviving
obligations under this Agreement. Any Separation Payment to which you become
entitled shall be paid in a lump sum on the sixtieth (60th) day following the
Separation Date.

 

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(c)          The provisions of this Agreement shall survive any termination of
employment if so provided in this Agreement or if necessary or desirable to
accomplish the purposes of other surviving provisions, including without
limitation your obligations under Section 3(a) and (b) of this Agreement and the
KCAP’s and the Company’s obligations in Section 2(d).

 

6.            Definitions. For purposes of this Agreement, the following
definitions apply:

 

(a)          “Affiliates” means all persons and entities directly or indirectly
controlling, controlled by or under common control with the Company, where
control may be by management authority, equity interest or otherwise.

 

(b)          “Confidential Information” means any and all information of the
Company and its Affiliates that is not generally available to the public.
Confidential Information also includes any information received by the Company
or any of its Affiliates from any Person with any understanding, express or
implied, that it will not be disclosed. Confidential Information does not
include information that enters the public domain, other than through your
breach of your obligations under this Agreement.

 

(c)          “Kehler Base Salary Amount” means, in respect of any period during
which you may not terminate (or during which you may not elect not to renew)
this Agreement pursuant to Section 1(c) without violating Section 1(d) and
during which Dean Kehler is no longer employed by the Company pursuant to his
employment agreement with the Company (other than as a result of a termination
for Cause thereunder or a termination due to his death or permanent disability),
the base salary that would have been payable to Dean Kehler had his Employment
Agreement not been terminated (or not renewed) by the Company (other than for
Cause or due to his death or disability). For the avoidance of doubt, for
purposes of this definition, it will be assumed that a notice of non-renewal
could be given by you pursuant to Section 1(c) at any time and would be
effective on the date given.

 

(d)          “Person” means an individual, a corporation, a limited liability
company, an association, a partnership, an estate, a trust or any other entity
or organization, other than the Company or any of its Affiliates.

 

7.           Conflicting Agreements. You hereby represent and warrant that your
signing of this Agreement and the performance of your obligations under it will
not breach or be in conflict with any other agreement to which you are a party
or are bound, and that you are not now subject to any covenants against
competition or similar covenants or any court order that could affect the
performance of your obligations under this Agreement. You agree that you will
not disclose to or use on behalf of the Company any confidential or proprietary
information of a third party without that party’s consent.

 

8.           Limitation of Remedies. Neither the Company nor KCAP shall have any
right to monetary damages in respect of any breach of your obligations hereunder
other than for (a) an intentional or willful breach of any such obligation
(i.e., a breach of this Agreement resulting from action or inaction by you which
action or inaction was known by you to be a breach hereof), or (b) any breach of
Section 1(d), 3 or 7.

 

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9.           Withholding. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law.

 

10.         Assignment. Neither you nor the Company may make any assignment of
this Agreement or any interest in it, by operation of law or otherwise, without
the prior written consent of the other; provided, however, the Company may
assign its rights and obligations under this Agreement without your consent to
one of its Affiliates (provided that the Company shall remain secondarily liable
for all obligations of such Affiliate following any such assignment) or to any
Person with or into whom the Company shall hereafter effect a reorganization,
consolidate, or merge, or to whom it shall transfer all or substantially all of
its properties or assets. This Agreement shall inure to the benefit of and be
binding upon you and the Company, and each of our respective successors,
executors, administrators, heirs and permitted assigns.

 

11.         Severability. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

 

12.         Miscellaneous. This Agreement sets forth the entire agreement
between you and the Company, and replaces all prior and contemporaneous
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of your employment. This Agreement may not be modified
or amended, and no breach shall be deemed to be waived, unless agreed to in
writing by you and an expressly authorized representative of the KCAP Board. The
headings and captions in this Agreement are for convenience only and in no way
define or describe the scope or content of any provision of this Agreement. This
Agreement may be executed in two or more counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
This is a New York contract and shall be governed and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.

 

13.         Notices. Any notice, request, demand, claim or other communication
required or permitted to be delivered, given or otherwise provided under this
Agreement must be in writing and must be delivered personally, delivered by
nationally recognized overnight courier service, sent by certified or registered
mail, postage prepaid, or (if a facsimile number is provided below) sent by
facsimile (subject to electronic confirmation of good facsimile transmission).
Any such notice, request, demand, claim or other communication shall be deemed
to have been delivered and given (a) when delivered, if delivered personally,
(b) the Business Day (as defined in the Purchase Agreement) after it is
deposited with such nationally recognized overnight courier service, if sent for
overnight delivery by a nationally recognized overnight courier service, (c) the
day of sending, if sent by facsimile prior to 5:00 p.m. (Eastern time) on any
Business Day or the next succeeding Business Day if sent by facsimile after 5:00
p.m. (Eastern time) on any Business Day or on any day other than a Business Day
or (d) five Business Days after the date of mailing, if mailed by certified or
registered mail, postage prepaid, in each case, to the following address or, if
applicable, facsimile number, or to such other address or addresses or facsimile
number or numbers as such party may subsequently designate to the other parties
by notice given hereunder:

 

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If to KCAP or the Company, to:

 

Kohlberg Capital Corporation

or

Trimaran Advisors LLC

c/o Kohlberg Capital Corporation

295 Madison Avenue - 6th Floor

New York, NY 10017

Telephone number: (212) 455-8300

Facsimile number: (212) 983-7654

Attention: Dayl Pearson, Chief Executive Officer

 

with a copy (which shall not constitute notice) to:

 

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199

Telephone number: (617) 951-7802

Facsimile number: (617) 235-0514

Attention: Craig Marcus

 

If to you, to:

 

Jay R. Bloom

c/o Trimaran Fund Management, LLC

1325 Avenue of the Americas, 34th Floor

New York, NY 10019

Telephone number: 212-616-3710

Facsimile number: 212-616-3794

 

with a copy (which shall not constitute notice) to:

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Telephone number: (212) 728-8278

Facsimile number: (212) 728-9278

Attention: Laurence Weltman

 

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Each of the parties to this Agreement may specify a different address or
addresses or facsimile number or facsimile numbers by giving notice in
accordance with this Section 13 to each of the other parties hereto.

 

If the foregoing is acceptable to you, please sign this letter in the space
provided below. At the time you sign and return it, this letter will take effect
as a binding agreement between you and the Company on the basis set forth above.
The enclosed copy is for your records.

 

[Signature Page Follows]

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Sincerely yours,       /s/ Dayl Pearson       Dayl Pearson, President      
Accepted and Agreed:       /s/ Jay R. Bloom   Jay R. Bloom       Date:  February
29, 2012       Accepted and Agreed (as to the last three   sentences of Section
1(a) and Section 2(d))       KOHLBERG CAPITAL CORPORATION       By: /s/ Dayl
Pearson     Name:  Dayl Pearson     Title:  President  

 

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Schedule 2(a)

 

Year Commencing:  Annual Salary        February 29, 2012  $50,000         March
1, 2013  $75,000         March 1, 2014  $125,000         March 1, 2015 and
thereafter  $200,000 

 

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