Exhibit 10.20.4
 

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AMENDED AND RESTATED CREDIT AGREEMENT
 
dated as of October 11, 2012

between
 
JMP GROUP LLC,
 
and
 
CITY NATIONAL BANK

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AMENDED AND RESTATED CREDIT AGREEMENT

 
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 11, 2012, is
entered into between JMP GROUP LLC, a Delaware limited liability company
(“Borrower”) and CITY NATIONAL BANK, a national banking association (“Lender”).
 
W I T N E S S E T H
 
WHEREAS, Borrower and Lender are parties to that certain Credit Agreement, dated
as of August 3, 2006 (as amended, supplemented, or otherwise modified from time
to time prior to the date hereof, the “Existing Credit Agreement”); and
 
WHEREAS, Borrower and Lender desire to amend and restate the Existing Credit
Agreement in its entirety subject to the terms and conditions set forth herein,
it being understood that no repayment of the obligations under the Existing
Credit Agreement is being effected hereby, but merely an amendment and
restatement in accordance with the terms hereof;
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree to amend
and restate the Existing Credit Agreement in its entirety as follows:
 
ARTICLE I
 
DEFINITIONS AND CONSTRUCTION
 
1.1           Definitions.   For purposes of this Agreement (as defined below),
the following initially capitalized terms shall have the following meanings:
 
“Acquisition” means (a) any Stock Acquisition, or (b) any Asset Acquisition.
 
“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person.  For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by,” and “under common control
with”), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
that Person, whether through the ownership of voting securities, by contract, or
otherwise.
 
“Agreement” means this Credit Agreement between Borrower and Lender, together
with all exhibits and schedules hereto, including the Disclosure Statement.
 
“Amendment Number One to Stock Pledge Agreement” means that certain Amendment
Number One to Stock Pledge Agreement, dated as of the date hereof, by and among
Borrower, Harvest and Lender.
 
“Asset” means any interest of a Person in any kind of property or asset, whether
real, personal, or mixed real and personal, or whether tangible or intangible.
 
 
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“Asset Acquisition” means any purchase or other acquisition by Borrower or a
Guarantor of all or a material portion of the assets of any other Person or of a
business line of such Person.
 
“Authorized Person” means any officer or employee of Borrower.
 
"Bank Product" means any one or more of the following financial products or
accommodations extended to Borrower or its Subsidiaries by a Bank Product
Provider:  (a) Credit Card Services, (b) Cash Management Services, or (c)
transactions under Hedge Agreements.
 
“Bank Product Agreements” means those agreements entered into from time to time
by Borrower or its Subsidiaries with a Bank Product Provider in connection with
the obtaining of any of the Bank Products.
 
“Bank Product Obligations” means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by Borrower or its
Subsidiaries to any Bank Product Provider pursuant to or evidenced by the Bank
Product Agreements and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, and including all such amounts that Borrower or its
Subsidiaries are obligated to reimburse to Lender as a result of Lender
purchasing participations from, or executing indemnities or reimbursement
obligations to, a Bank Product Provider with respect to the Bank Products
provided by such Bank Product Provider to Borrower or its Subsidiaries.
 
"Bank Product Provider" means Lender or any of its Affiliates.
 
“Bankruptcy Code” means Title 11 of the United States Code, as amended or
supplemented from time to time, and any successor statute, and all of the rules
and regulations issued or promulgated in connection therewith.
 
“Base LIBOR Rate” means the British Banker's Association definition (or any
successor or substitute to such definition) of the London InterBank Offered
Rates as made available by Bloomberg LP, or such other information service
available to Lender, for the applicable monthly period upon which the Interest
Period is based for the LIBOR Rate Loan selected by Borrower and as quoted by
Lender, in the case of an initial LIBOR Rate Borrowing or a conversion of a Base
Rate Loan to a LIBOR Rate Loan, on the Business Day Borrower requests a LIBOR
Rate Loan or, in the case of a continuation of an existing LIBOR Rate Loan, on
the last Business Day of an expiring Interest Period.
 
“Base Rate” means the rate most recently announced by Lender at its principal
office in Los Angeles, California as its "Prime Rate."
 
“Base Rate Borrowing”  means any Borrowing designated by Borrower as a Base Rate
Borrowing or any Borrowing which, pursuant to Section 2.7(a), is deemed to be
converted to a Base Rate Loan.
 
“Base Rate Loan” means any Loan bearing interest at the Base Rate.
 
 
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“Borrower” shall have meaning set forth in the introduction to this Agreement.
 
“Borrowing” means a borrowing under the Revolving Credit Facility consisting of
a Revolving Loan made by Lender to Borrower or a Term Loan made by Lender to
Borrower, as the context requires.
 
“Broker/Dealer Credit Facility” means the credit facility evidenced by that
certain Revolving Note and Cash Subordination Agreement, dated as of April 8,
2011, by and between Lender and JMP Securities, as amended, restated,
supplemented, or otherwise modified from time to time.
 
“Broker/Dealer Guaranty” means that certain General Continuing Guaranty, dated
as of April 8, 2011, executed by Borrower in favor of Lender in respect of the
Debt evidenced by the Broker/Dealer Credit Facility, as such guaranty may be
amended, restated, supplemented, or otherwise modified from time to time.

“Business Day” means a day when major commercial banks are open for business in
California, other than Saturdays or Sundays.
 
“Capital Expenditures” means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed.
 
“Capitalized Lease Obligations” means the aggregate amount which, in accordance
with GAAP, is required to be reported as a liability on the balance sheet of
Person at such time in respect of such Person’s interest as lessee under a
capitalized lease.
 
“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or Moody’s Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit or
bankers’ acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) demand deposit accounts maintained with (i)
Lender or (ii) any bank organized under the laws of the United States or any
state thereof having combined capital and surplus of not less than
$1,000,000,000, and (f) Investments in money market funds substantially all of
whose assets are invested in the types of assets described in clauses (a)
through (e) above.
 
“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement,  merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.
 
 
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“Change of Control Event” means the occurrence of any of the following: (a) any
Person or two or more Persons acting in concert, shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the SEC under the 1934 Act, as
then in effect), directly or indirectly, of Securities of JMPG (or other
securities convertible into such Securities) representing 35% or more of the
combined voting power of all Securities of JMPG entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the Board
of Directors of JMPG; (b) any Person or two or more Persons acting in concert
shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power, directly or indirectly, to direct or cause the
direction of the management or policies of JMPG, whether through the ownership
of voting securities, by contract or otherwise or to exercise control over the
Securities of such Person entitled to vote for members of the Board of Directors
of JMPG on a fully-diluted basis (and taking into account of such Securities
that such Person or group has the right to acquire pursuant to any option right)
representing 35% or more of the combined voting power of such Securities; (c)
JMPG ceases to own, directly or indirectly, and control 100% of the aggregate
outstanding Securities of Borrower; (d) Borrower ceases to own, directly or
indirectly, and control 100% of the aggregate voting power of the outstanding
Securities of JMP Securities or any Guarantor; or (e) a Change of Executive
Event.
 
“Change of Executive Event” means the failure of two or more of Joseph A.
Jolson, Carter Mack, Craig Johnson and Mark Lehmann to be involved actively on
an ongoing basis in the management of Borrower or any of its Subsidiaries.
 
“Closing Date” means the first date when all of the conditions precedent set
forth in Section 3.1 have been satisfied.
 
“CLO Entity” means the entity identified as the “CLO Entity” on the updated
Disclosure Statement delivered pursuant to Section 3.1A(a) formed for the sole
purpose of investing in collateralized loan obligation assets and in other
activities incident thereto.
 
“CLO Indenture” means that certain indenture by and between CLO Entity and the
other parties thereto and described in the updated Disclosure Statement
delivered pursuant to Section 3.1A(a).
 
“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by Borrower or any Guarantor upon which a Lien is
granted under any of the Loan Documents.
 
“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 delivered by the chief financial officer of Borrower to Lender.
 
 
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“Contingent Obligation” means, as to any Person and without duplication of
amounts, any written obligation of such Person guaranteeing or intended to
guarantee (whether guaranteed, endorsed, co-made, discounted, or sold with
recourse to such Person) any Debt, noncancellable lease, dividend, reimbursement
obligations relating to letters of credit, or any other obligation that pertains
to Debt, a noncancellable lease, a dividend, or a reimbursement obligation
related to letters of credit (each, a “primary obligation”) of any other Person
(“primary obligor”) in any manner, whether directly or indirectly, including any
written obligation of such Person, irrespective of whether contingent, (a) to
purchase any such primary obligation, (b) to advance or supply funds (whether in
the form of a loan, advance, stock purchase, capital contribution, or otherwise)
(i) for the purchase, repurchase, or payment of any such primary obligation or
any Asset constituting direct or indirect security therefor, or (ii) to maintain
working capital or equity capital of the primary obligor, or otherwise to
maintain the net worth, solvency, or other financial condition of the primary
obligor, or (c) to purchase or make payment for any Asset, securities, services,
or noncancellable lease if primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation.
 
“Contractual Obligation” means, as applied to any Person, any provision of any
material indenture, mortgage, deed of trust, contract, undertaking, agreement,
or other material instrument to which that Person is a party or by which any of
its Assets is subject.
 
“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Lender, executed and delivered by Borrower, Lender, and the
applicable securities intermediary with respect to a Securities Account or bank
with respect to a Deposit Account.
 
“Credit Card Services” means any credit card services including (a) credit cards
(including commercial cards (including so-called “purchase cards”, “procurement
cards” or “p-cards”)), (b) credit card processing services, (c) debit cards,
or  (d) stored value cards.
 
“Daily Balance” means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.
 
“Debt” means, with respect to any Person, (a) all obligations for such Person
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments and all reimbursement or other
obligations of such Person in respect of letters of credit, bankers acceptances,
interest rate swaps, or other financial products, (c) all obligations of such
Person to pay the deferred purchase price of Assets or services, exclusive of
trade payables that are due and payable in the ordinary and usual course of such
Person’s business, (d) all Capitalized Lease Obligations of such Person, (e) all
obligations or liabilities of others secured by a Lien on any Asset owned by
such Person, irrespective of whether such obligation or liability is assumed, to
the extent of the lesser of such obligation or liability or the fair market
value of such Asset, and (f) all Contingent Obligations of such Person.
 
“Deposit Account” means any deposit account (as that term is defined in the
Code).
 
“Designated Account” means account number 432-654-168 of Borrower maintained
with Lender, or such other deposit account of Borrower (located within the
United States) designated, in writing, and from time to time, by Borrower to
Lender.
 
 
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“Disclosure Statement” means that certain statement, executed and delivered by a
Responsible Officer of Borrower, that sets forth information regarding or
exceptions to the representations, warranties, and covenants made by Borrower
herein, as amended from time to time to the extent permitted hereby.
 
“Distribution” has the meaning ascribed thereto in Section 6.5 hereof.
 
“Dollars” and “$” mean United States of America dollars or such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts in the United States of America.
 
“Earn-Out Arrangements” shall mean payments required to be made in connection
with a Permitted Acquisition which obligations are subordinated to the
Obligations on terms satisfactory to Lender (it being understood that the
subordination provisions set forth on Schedule E-1 shall be deemed to be
satisfactory to Lender).
 
“EBITDA” means, with respect to JMPG and its Subsidiaries for any period, the
Net Income, minus extraordinary gains, plus extraordinary losses, interest
expense, income taxes, depreciation, amortization, other non-cash expenses,
expenses of Permitted Acquisitions not to exceed $1,500,000 per Permitted
Acquisition and $2,500,000 in the aggregate during any fiscal year, and any
non-cash charges in respect of any loan loss reserve with respect to Newco, in
each case for such period determined in accordance with GAAP; providedhowever,
any Net Income  attributable to the CLO Entity shall only be included for the
purposes of calculating EBITDA to the extent of any distributions by the CLO
Entity to a Loan Party.
 
"Eurocurrency Reserve Requirement" means the sum (without duplication) of the
rates (expressed as a decimal) of reserves (including, without limitation, any
basic, marginal, supplemental, or emergency reserves) that are required to be
maintained by banks during the Interest Period under any regulations of the
Federal Reserve Board, or any other governmental authority having jurisdiction
with respect thereto, applicable to funding based on so-called "Eurocurrency
Liabilities", including Regulation D (12 CFR 224).
 
“Eurodollar Business Day” means any Business Day on which major commercial banks
are open for international business (including dealings in Dollar deposits) in
New York, New York and London, England.
 
“Event of Default” shall have the meaning set forth in Article VII of this
Agreement.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended or
supplemented from time to time, and any successor statute, and all of the rules
and regulations issued or promulgated in connection therewith.
 
 “Excluded Fund” means any fund or investment company managed, directly or
indirectly, by Borrower or its Subsidiaries.
 
“Excluded Subsidiary” means each Subsidiary identified on the Disclosure
Statement and each other Person identified on a Compliance Certificate as an
Excluded Subsidiary and that is deemed an Excluded Subsidiary in accordance with
the provisions of Section 5.7(b).
 
 
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“Existing Credit Agreement” has the meaning ascribed to such term in the
recitals to this Agreement.
 
“Existing Credit Agreement Closing Date” means August 3, 2006.
 
“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any successor thereto.
 
“Final Payment Date” means August 24, 2017.
 
“Final Revolving Commitment Termination Date” means the earlier to occur of (a)
August 24, 2013; or (b) such earlier date on which the Revolving Loans shall
become due and payable in accordance with the terms of this Agreement and the
other Loan Documents.
 
“FINRA” means the Financial Industry Regulatory Authority.
 
“Fixed Charge Coverage Ratio” means, with respect to JMPG and its Subsidiaries
for the twelve month period ending on any date, the ratio of (i) EBITDA for such
period minus Capital Expenditures made by JMPG and its Subsidiaries (to the
extent not already incurred in a prior period) or incurred during such period,
to (ii) Fixed Charges for such period; provided however, any amounts
attributable to the CLO Entity shall be excluded for the purposes of determining
Fixed Charge Coverage Ratio.
 
“Fixed Charges” means, with respect to JMPG and its Subsidiaries for any period,
the sum, without duplication, of (a) Interest Expense during such period,
(b) principal payments required to be paid in respect of Debt (other than
intercompany debt) of JMPG and its Subsidiaries during such period, and (c) all
federal, state, and local income taxes accrued for such period.
 
“Focus Reports” means the Financial Operational Combined Uniform Single reports
filed with FINRA.
 
“Foreign Subsidiary” means any Subsidiary of Borrower that is not organized
under the laws of any state of the United States or the District of Columbia.
 
“GAAP” means generally accepted accounting principles in the United States of
America in effect from time to time.
 
“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.
 
“Governmental Authority” means any federal, state, local, or other governmental
department, commission, board, bureau, agency, central bank, court, tribunal, or
other instrumentality, domestic or foreign.
 
 
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“Guarantors” means (a) Harvest and (b) each other Person who from time to time
guarantees the Obligations of Borrower under this Agreement, and “Guarantor”
means any one of them.
 
“Guaranty” means each guaranty, in form and substance satisfactory to Lender,
executed and delivered by any Guarantor in favor of Lender pursuant to Section
5.7 or otherwise, and “Guaranties” means all of the foregoing Guaranties.
 
“Harvest” means Harvest Capital Strategies LLC, a Delaware limited liability
company, formerly known as JMP Asset Management LLC.
 
“Highest Lawful Rate” means the maximum non-usurious interest rate, as in effect
from time to time, that may be charged, contracted for, reserved, received, or
collected by Lender in connection with this Agreement, or the other Loan
Documents.
 
“Indemnified Liabilities” shall have the meaning set forth in Section 8.2 of
this Agreement.
 
“Indemnitee” shall have the meaning set forth in Section 8.2 of this Agreement.
 
“Immaterial Subsidiary” means a Subsidiary having assets with a book value equal
to $25,000 or less.
 
“Initial Term Loan” has the meaning set forth in Section 2.1A(a).
 
“Initial Term Loan Conversion Date” means August 24, 2011.
 
“Initial Term Loan Final Payment Date” means December 31, 2013.
 
“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
 
“Intercompany Subordination Agreement” means a subordination agreement executed
and delivered by Borrower, the Guarantors and Lender, the form and substance of
which is satisfactory to Lender.
 
“Interest Coverage Ratio” means, with respect to JMPG and its Subsidiaries for
the twelve month period ending on any date, the ratio of (A) EBITDA for such
period to (B) Interest Expense for such period, providedhowever, any amounts
attributable to the CLO Entity shall be excluded for the purposes of determining
Interest Coverage Ratio.
 
“Interest Expense” means, for any period, the aggregate of the interest expense
of JMPG and its Subsidiaries (other than interest expense arising from
intercompany loans) for such period, determined on a consolidated basis in
accordance with GAAP.
 
 
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“Interest Payment Date” means, in the case of Base Rate Loans, the first date of
each fiscal quarter and, in the case of LIBOR Rate Loans, the last day of the
applicable Interest Period.
 
“Interest Period” means the period commencing on the date each LIBOR Rate Loan
is made (including the date a Base Rate Loan is converted to a LIBOR Rate Loan,
or a LIBOR Rate Loan is renewed as a LIBOR Rate Loan, which, in the latter case,
will be the last day of the expiring Interest Period) and ending on the date
which is one (1), two (2) or  three (3) months thereafter, as selected by
Borrower; provided, however, that if such date is not a Eurodollar Business Day,
the Interest Period shall be extended to the next Eurodollar Business Day,
provided, further, however, that no Interest Period may extend beyond (i) the
Final Payment Date, (ii) in the case of the Initial Term Loan, the Initial Term
Loan Final Payment Date or (iii) in the case of the Term Loan B, the Term Loan B
Final Payment Date.
 
“Investment” means, as applied to any Person, any direct or indirect purchase or
other acquisition by that Person of, or beneficial interest in, stock,
instruments, bonds, debentures or other securities of any other Person, or any
direct or indirect loan, advance, or capital contribution by such Person to any
other Person, including all indebtedness and accounts receivable due from that
other Person that did not arise from sales or the rendition of services to that
other Person in the ordinary and usual course of such Person’s business, and
deposit accounts (including certificates of deposit), and any transfer of cash,
Cash Equivalents or any other Assets to any Person.
 
“Issuer Document” means, with respect to any Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by Borrower in
favor of Lender relating to such Letter of Credit.
 
“JMP Securities” means JMP Securities LLC, a Delaware limited liability company.
 
“JMPCC” means JMP Credit Corporation, a Delaware corporation.
 
“JMPG” means JMP Group, Inc., a Delaware corporation.
 
“L/C Disbursement” means a payment made by Lender to a beneficiary of a Letter
of Credit pursuant to such Letter of Credit.
 
“Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, licenses, authorizations and permits of,
and agreements with, any Governmental Authority.
 
“Lender” shall have the meaning set forth in the introduction to this Agreement.
 
“Letter of Credit” has the meaning set forth in Section 2.18(a).
 
“Letter of Credit Fee” has the meaning set forth in Section 2.18(d).
 
 
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“Letter of Credit Usage” means, as of any date of determination, the undrawn
amount of outstanding Letters of Credit.
 
"LIBOR Rate" means the rate per year (rounded upward to the next one-sixteenth
(1/16th) of one percent (0.0625%), if necessary) determined by Lender to be the
quotient of (a) the Base LIBOR Rate divided by (b) one minus the Eurocurrency
Reserve Requirement for the Interest Period; which is expressed by the following
formula:
 
                             Base LIBOR Rate                           
                                           
 
1 - Eurocurrency Reserve Requirement
 
“LIBOR Rate Borrowing” means any Borrowing designated by Borrower as a LIBOR
Rate Borrowing.
 
“LIBOR Rate Loan” means any Loan bearing interest at the LIBOR Rate.
 
“Lien” means any lien, mortgage, pledge, assignment (including any assignment of
rights to receive payments of money), security interest, charge, or encumbrance
of any kind (including any conditional sale or other title retention agreement,
any lease in the nature thereof, and any agreement to give any security
interest).
 
“Liquidity” means, as of any date of determination, the sum of (a) Loan Parties’
and their Subsidiaries’ cash, (b) Cash Equivalents of the Loan Parties and their
Subsidiaries, (c) Marketable Securities of the Loan Parties and their
Subsidiaries, (d) any investments by a Loan Party in funds that are managed by
Borrower or its Subsidiaries  and which invest primarily in cash, Cash
Equivalents and Marketable Securities so long as such Person  may withdraw such
investments in immediately available funds upon 30 days prior notice, (e) the
Securities of the CLO Entity owned by any Loan Party; provided that (i) such
Loan Party Entity shall execute and deliver to Lender a pledge agreement or
supplement, together with appropriate financing statements and other documents,
all in form and substance reasonably satisfactory to Lender (including being
sufficient to grant Lender first priority Lien on such Securities), and any
other documentation, including one or more opinions of counsel reasonably
satisfactory to Lender, which, in Lender’s opinion, is appropriate with respect
to the execution and delivery of the applicable documentation referred to above
and (ii) Borrower is able to source an indicative bid on the value of such
Securities from an independent third party source acceptable to Lender, and (f)
any investments in loans held by any Loan Party, to the extent that quotes for
the loans can be obtained from two independent dealers acceptable to
Lender.  For purposes of determining the amount of Liquidity for the Loan
Parties and their Subsidiaries, the value as described in clauses (a), (b) and
(c) above is deemed to be equal to the fair market value thereof, and the value
as described in clause (e) and (f) above is deemed to be the lowest bid or
quotation obtained by Borrower with respect to the loans described above.
 
“Loan” or “Loans” means a Revolving Loan or a Term Loan, as the context
requires.
 
“Loan Account” has the meaning set forth in Section 2.12.
 
 
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“Loan Documents” means this Agreement, the Bank Product Agreements, the Control
Agreements (if any), the Guaranties, the Broker/Dealer Guaranty, the
Intercompany Subordination Agreement, the Letters of Credit, the Security
Agreements, the Stock Pledge Agreement, the Trademark Security Agreement and any
and all other documents, agreements or instructions that have been or are
entered into by Borrower or any Guarantor, and Lender in connection with the
transactions contemplated by this Agreement.
 
“Loan Parties” means Borrower and the Guarantors, and “Loan Party” means any one
of them.
 
“Margin Securities” means “margin stock” as that term is defined in Regulation U
of the Federal Reserve Board.
 
“Marketable Securities” means any equity securities listed on a securities
exchange that has registered with the SEC under Section 6 of the Securities
Exchange Act of 1934.
 
“Material Adverse Effect” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or otherwise) of Borrower and its Subsidiaries, taken as a whole, (b)
a material impairment of Borrower’s or any Guarantor’s ability to perform its
obligations under the Loan Documents or of Lender’s ability to enforce the
Obligations or realize upon the Collateral, or (c) a material impairment of the
enforceability or priority of Lender’s Liens with respect to the Collateral.
 
“Net Income” means, with respect to any Person for any period, the net income
(loss) of such Person for such period, determined in accordance with GAAP.
 
“Net Worth” means, as of any date of determination, the result of (a) JMPG’s and
its Subsidiaries’ total Assets, minus (b) JMPG’s and such Subsidiaries’ total
liabilities (including any contingent liabilities and guaranties), in each case
determined in accordance with GAAP; provided, however, that any liability
representing the minority interest in any Subsidiary shall be excluded from
clause (b) for the purposes of determining “Net Worth”.
 
“Newco” means Harvest Capital Credit LLC, a Delaware limited liability company.
 
“Newco Credit Facility” means the credit facility evidenced by a credit
agreement, dated as of August 24, 2011, by and among Newco and Borrower, as
amended, restated, supplemented, or otherwise modified from time to time.
 
“Obligations” means (a) all Loans, debts, principal, interest, premiums,
liabilities (including all amounts charged to Borrower’s Loan Account pursuant
hereto), contingent reimbursement obligations with respect to outstanding
Letters of Credit, obligations (including indemnification obligations), fees
(including the Letter of Credit Fee), charges, costs, expenses (including any
portion thereof that accrues after the commencement of an Insolvency Proceeding,
whether or not allowed or allowable in whole or in part as a claim in any such
Insolvency Proceeding), guaranties, covenants, and duties of any kind and
description owing by Borrower to Lender pursuant to or evidenced by the Loan
Documents and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all expenses
that Borrower is required to pay or reimburse by the Loan Documents, by law, or
otherwise, and (b) all Bank Product Obligations.  Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.
 
 
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“Obligors” means Borrower and each Guarantor, and “Obligor” means any one of
them.
 
“Permitted Acquired Indebtedness” means Debt that is assumed in connection with
a Permitted  Acquisition so long as (a) such Debt is either unsecured or is
secured only by the assets of the Permitted Acquisition and is not secured by
the assets of Borrower or any other Guarantor), (b) such Debt is recourse only
to the entity that is acquired pursuant to the Permitted Acquisition and it not
recourse to, or guaranteed by, Borrower or any other Guarantor, (c) such Debt
exists at the time the assets are acquired and is not created in anticipation of
such Permitted Acquisition, and (d) such Debt does not exceed $10,000,000 in the
aggregate at any time.
 
“Permitted Acquisition” means any Acquisition so long as:
 
(a)           the consideration is payable in cash (except for any Earn-Out
Arrangements, Seller Notes or Permitted Acquired Indebtedness) or in Securities
of Borrower or one of its Subsidiaries.
 
(b)           no Default or Event of Default has occurred and is continuing as
of the date of consummation of the proposed Acquisition or would result
therefrom,
 
(c)           the assets being acquired (or in the case of a Stock Acquisition,
the assets of the Person being acquired) (i) are useful in the businesses
performed by Borrower as of the date of this Agreement, and (ii) shall be
located within (x) the United States, or (y) any other developed country;
provided, however that the aggregate consideration (including Earn-Out
Arrangements, Seller Notes and Permitted Acquired Indebtedness) payable in
connection with Acquisitions described in this clause (c)(ii)(y) shall not
exceed $5,000,000 in any fiscal year or $10,000,000 in the aggregate since the
Existing Credit Agreement Closing Date,
 
(d)           (i) if the aggregate amount of all consideration paid in
connection with such Acquisition (including the aggregate amount of all Earn-Out
Arrangements, Seller Notes and Debt assumed in connection therewith) is equal to
or greater than $5,000,000, Borrower has provided Lender with written
confirmation, supported by reasonably detailed calculations, that on a pro forma
basis, Borrower will be in compliance with each of the financial covenants in
Section 6.14 hereof after giving effect to such Acquisition and as of the last
day of each quarter during the 12 month period following the date of such
Acquisition, and (ii) if the aggregate amount of all consideration paid in
connection with such Acquisition (including the aggregate amount of all Earn-Out
Arrangements, Seller Notes and Debt assumed in connection therewith) is less
than $5,000,000, the chief executive officer or the chief financial officer of
Borrower shall have delivered to Lender a certificate stating that on a pro
forma basis Borrower will be in compliance with each of the financial covenants
in Section 6.14 hereof after giving effect to such Acquisition and as of the
last day of each quarter during the 12 month period following the date of such
Acquisition,
 
 
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(e)           (i) promptly following a request therefor, Lender has received
copies of such information or documents relating to such Acquisition as Lender
shall have reasonably requested, including the acquisition agreement, related
contracts and instruments and all opinions (to the extent that an opinion is
delivered to Borrower in connection with such Acquisition), certificates, lien
search results and other documents reasonably requested by Lender and, to the
extent that the aggregate amount of consideration (including Earn-Out
Arrangements, Seller Notes and Permitted Acquired Indebtedness) payable in
connection with such Acquisition is greater than or equal to $10,000,000, each
such opinion shall also be addressed to Lender and Lenders or accompanied by a
written authorization from the firm or Persons delivering such opinion stating
that Lender and Lenders may rely on such opinion as though it were addressed to
them, and (ii) within 30 days after the consummation of such Acquisition, Lender
shall have received certified copies of the agreements, instruments and
documents in connection with such Acquisition, which shall be substantively
identical to the documents provided pursuant to subclause (i) of this clause
(e), subject to any applicable provisions of Section 5.7,
 
(f)           in the case of a Stock Acquisition, the Securities are being
acquired by Borrower or any of its Subsidiaries, and in the case of an Asset
Acquisition, the subject assets are being acquired by Borrower or any of its
Subsidiaries,
 
(g)           any Debt or Liens assumed in connection with the proposed
Acquisition are otherwise permitted under Section 6.1 or 6.2, respectively and
no additional Debt or other liabilities shall be incurred, assumed or otherwise
be reflected on a consolidated balance sheet of Borrower and its Subsidiaries
after giving effect to such Acquisition, except to the extent expressly
permitted by the terms of the Agreement,
 
(h)           the proposed Acquisition shall be consensual and shall have been
approved by the board of directors (or comparable managers) of the Person whose
assets are proposed to be acquired,
 
(i)           Borrower shall provide Lender with prior written notice (which
notice shall not be less than 15 days prior to the closing date of the proposed
Acquisition and which notice shall include, without limitation, a reasonably
detailed description of such Acquisition) of such Acquisition, together with
copies of all financial information, financial analysis, documentation and other
information relating to such acquisition as Lender or any Lender shall
reasonably request,
 
(j)           at the time of the proposed Acquisition and after giving effect
thereto, all representations and warranties contained in Article IV of this
Agreement or in the other Loan Documents shall be true and correct in all
respects (which in each case shall be deemed to have been made on the date of
such Acquisition after giving effect thereto),
 
(k)           the aggregate amount of consideration paid by an Obligor in
connection with any Stock Acquisition pursuant to which the applicable Loan
Party acquires less than a majority of the voting Securities in the acquired
Person (including the proposed Stock Acquisition) is less than $5,000,000, and
 
 
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(l)           prior to the closing of the proposed Acquisition, the chief
executive officer or the chief financial officer of Borrower shall have
delivered to Lender a certificate as to each of the items set for in the
foregoing clauses (a), (b), (c), (d), (g), (h), (j) and (k).
 
“Permitted Investments” means (a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments for collection, (c) advances made in
connection with purchases of goods or services in the ordinary course of
business, (d) Investments in funds, corporations, partnerships or other
investment vehicles that are, after giving effect to such Investments (and were
immediately prior to the time of such Investments) managed, directly or
indirectly, by Borrower, if such entity is a Subsidiary, the applicable Obligor
shall take such action as is required by Section 5.7 hereof to grant a first
priority perfected Lien to Lender in an to such Investments (except to the
extent not required by Lender under Section 5.7), (e) Investments in publicly
traded securities in the ordinary course of business, (f) Permitted
Acquisitions, (g) advances to officers, directors and employees in the ordinary
course of business for travel, entertainment, relocation and other business
purposes in an aggregate amount not to exceed $500,000 in any fiscal year of
Borrower; (h) Investments permitted under Sections 6.1 and 6.7, (i) Investments
by Borrower or a Guarantor in the form of advances to an Excluded Fund to
address short term cash flow issues, redemptions and reinvestments in Excluded
Funds and in investee funds, so long as (i) such Investments are repaid by the
applicable Excluded Fund to Borrower or such Guarantor, as applicable, within 5
Business Days after the making of such Investment, and (ii) no Event of Default
or Unmatured Event of Default shall have occurred and be continuing or result
therefrom, (j) so long as no Event of Default or Unmatured Event of Default
shall have occurred and be continuing or result therefrom, redemptions,
repurchases or other acquisitions by Borrower of its outstanding Securities, to
the extent that the aggregate amount paid by Borrower in connection with all
such redemptions, repurchases or other acquisitions of its Securities (after
giving effect to the proposed redemption, repurchase or other acquisition) would
not exceed $5,000,000, (k) so long as no Event of Default or Unmatured Event of
Default shall have occurred and be continuing or result therefrom, other
Investments in an aggregate amount not to exceed $5,000,000 in any fiscal
year;  (l) Investments arising under the Newco Credit Facility and Investments
made by Newco in its ordinary course of business; and (m) Investments in CLO
Entity in an aggregate amount not to exceed $60,000,000 (or such other amount as
may be agreed to by Lender and Borrower in writing).
 
“Permitted Liens” means: (a) Liens for taxes, assessments, or governmental
charges or claims the payment of which is not, at such time, required by Section
5.4 hereof, (b) any attachment or judgment Lien either in existence less than 45
calendar days after the entry thereof, or with respect to which execution has
been stayed, or with respect to which payment in full above any applicable
deductible is covered by insurance (so long as no reservation of rights has been
made by the insurer in connection with such coverage), and Liens incurred to
secure any surety bonds, appeal bonds, supersedeas bonds, or other instruments
serving a similar purpose in connection with the appeal of any such judgment,
(c) banker’s Liens in the nature of rights of setoff arising in the ordinary
course of business of Borrower, (d) carrier’s warehousemen’s mechanics’
materialmen’s repairmen’s or other like Liens arising as a matter of law in the
ordinary course of business which are not overdue or which are being contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted, and an adequate reserve or other appropriate provision, if any, shall
have been made as required in order to be in conformity with GAAP; (e) pledges
or deposits of cash in the ordinary course of business in connection with any
worker’s compensation, unemployment insurance and other similar legislation; (f)
deposits of cash to secure the performance of bids, trade contracts and leases,
statutory obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business; (g) easements, rights
of way and zoning restrictions affecting real property which do not materially
interfere with or impair the use or operation thereof; (h) Liens described in
the definition of “Permitted Acquired Indebtedness”; (i) Liens granted by
Borrower and the Guarantors to Lender in order to secure their respective
obligations under this Agreement and the other Loan Documents to which they are
a party; (j) Liens on deposits of cash to secure Debt described in Section
6.1(l); and (k) Liens arising under the Newco Credit Facility in favor of
Borrower.
 
 
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“Person” means and include natural persons, corporations, partnerships, limited
liability companies, joint ventures, associations, companies, business trusts,
or other organizations, irrespective of whether they are legal entities.
 
“Reaffirmation Agreement” means that certain reaffirmation and consent, dated as
of the date hereof, by Borrower and Harvest in favor of Lender.
 
“Refinancing Debt” means refinancings, renewals, or extensions of Debt so long
as: (a) the terms and conditions of such refinancings, renewals, or extensions
do not, in Lender’s reasonable judgment, materially impair the prospects of
repayment of the Obligations by Borrower or materially impair Borrower’s
creditworthiness, (b) such refinancings, renewals, or extensions do not result
in an increase in the principal amount of the Debt so refinanced, renewed, or
extended, (c) such refinancings, renewals, or extensions do not result in an
increase in the interest rate with respect to, the Debt so refinanced, renewed,
or extended, (d) such refinancings, renewals, or extensions do not result in a
shortening of the average weighted maturity of the Debt so refinanced, renewed,
or extended, nor are they on terms or conditions that, taken as a whole, are
materially more burdensome or restrictive to Borrower, (e) if the Debt that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension must include subordination terms and conditions that are at least as
favorable to Lender as those that were applicable to the refinanced, renewed, or
extended Debt, and (f) the Debt that is refinanced, renewed, or extended is not
recourse to any Person that is liable on account of the Obligations other than
those Persons which were obligated with respect to the Debt that was refinanced,
renewed, or extended.
 
“Regulatory Change” shall have the meaning ascribed thereto in Section 2.13
hereof.
 
“Request for Borrowing” means an irrevocable written notice from a Responsible
Officer of Borrower to Lender of Borrower’s request to borrow any Loan, which
notice shall be substantially in the form of Exhibit R-1 attached hereto.
 
“Request for Conversion/Continuation”  means an irrevocable written notice from
a Responsible Officer of Borrower to Lender pursuant to the terms of Section
2.7, substantially in the form of Exhibit R-2 attached hereto.
 
 
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“Responsible Officer” means the president, chief executive officer, chief
operating officer, chief financial officer, general counsel, or controller of a
Person, or such other officer of such Person designated by a Responsible Officer
in a writing delivered to Lender.
 
“Revolving Credit Facility” means the revolving credit facility described in
Section 2.1 hereof.
 
“Revolving Credit Facility Commitment” means $30,000,000.
 
 “Revolving Credit Facility Usage” means, at the time any determination thereof
is to be made, the sum of (a) the aggregate Dollar amount of the outstanding
Revolving Loans plus (b) the aggregate Letter of Credit Usage.
 
“Revolving Loan” means a loan made by Lender to Borrower pursuant to Section 2.1
of the Agreement until, if ever, such loan is converted into a term loan
pursuant to Section 2.3(e) of the Agreement.  For clarity, neither the Initial
Term Loan nor the Term Loan B shall be deemed to be a Revolving Loan.
 
 “SEC” means the Securities and Exchange Commission of the United States of
America or any successor thereto.
 
“Securities” means the capital stock, or other securities of a Person, all
warrants, options, convertible securities, and other interests which may be
exercised in respect of, converted into or otherwise relate to such Person’s
capital stock or other equity interests and any other securities, including debt
securities of such Person.
 
“Securities Account” means a “securities account” as that term is defined in the
Code.
 
“Security Agreements” means one or more security agreements, among Borrower, the
Guarantors, and Lender, which Security Agreements shall be in form and substance
satisfactory to Lender.
 
“Seller Notes” shall mean those promissory notes delivered by Borrower in
connection with the closing of a Permitted Acquisition, which are subordinated
to the Obligations on terms satisfactory to Lender (it being understood that the
subordination provisions set forth on Schedule E-1 shall be deemed to be
satisfactory to Lender).
 
“Sixth Amendment Effective Date” means August 24, 2011.
 
“Stock Acquisition” means the purchase or other acquisition by Borrower or a
Guarantor of at least a majority of all of the voting Securities of any other
Person.
 
“Stock Pledge Agreements” means one or more stock pledge agreements, in form and
substance satisfactory to Lender, executed and delivered by Borrower and the
Guarantors to Lender.
 
 
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“Sublimit” means, at any time, the result of (i) $58,500,000, minus (ii) the sum
of (a) the principal amount of the Term Loans then outstanding, plus (b) the
principal amount of all loans under the Broker/Dealer Facility then outstanding.
 
 “Subsidiary” means, with respect to any Person (a) any corporation in which
such Person, directly or indirectly through its Subsidiaries, owns more than 50%
of the stock of any class or classes having by the terms thereof the ordinary
voting power to elect a majority of the directors of such corporation, and (b)
any partnership, association, joint venture, limited liability company, or other
entity in which such Person, directly or indirectly through its Subsidiaries,
has more than a 50% equity interest at the time; provided, however, that for the
purposes of this Agreement, no Excluded Fund or Subsidiary of an Excluded Fund
shall be deemed to be a Subsidiary.
 
“Taxes” means any tax based upon or measured by net or gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, withholding, payroll,
employment, excise, occupation, premium or property taxes, or conduct of
business, together with any interest and penalties, additions to tax and
additional amounts imposed by any federal, state, local, or foreign taxing
authority upon any Person.
 
“Term Loan” means the Initial Term Loan, the Term Loan B, and any term loan into
which a Revolving Loan is converted pursuant to Section 2.3(e) of the Agreement.
 
“Term Loan B” has the meaning set forth in Section 2.1B.
 
“Term Loan B Amount” means $15,000,000.
 
“Term Loan B Closing Date” means the date on which the Term Loan B is made
hereunder, which shall occur, if ever, on or before March 31, 2013.
 
“Term Loan B Commitment” means the commitment of Lender to make the Term Loan B
to Borrower on the Term Loan B Closing Date in an aggregate principal amount
equal to the Term Loan B Amount.
 
“Term Loan B Final Payment Date” means December 31, 2016.
 
“Trademark Security Agreement” means a trademark security agreement executed and
delivered by Borrower and Lender, in form and substance satisfactory to Lender.
 
“Unmatured Event of Default” means an event, act, or occurrence which, with the
giving of notice or the passage of time, would become an Event of Default.
 
1.2           Construction.  Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular and to the
singular include the plural, the part includes the whole, the term “including”
is not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” References in this
Agreement to a “determination” or “designation” include estimates by Lender (in
the case of quantitative determinations or designations), and beliefs by Lender
(in the case of qualitative determinations or designations).  The words
“hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision of this
Agreement.  Article, section, subsection, clause, exhibit, and schedule
references are to this Agreement unless otherwise specified.  Any reference
herein to this Agreement or any of the Loan Documents includes any and all
alterations, amendments, changes, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable.
 
 
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ARTICLE II
 
AMOUNT AND TERMS OF LOANS
 
2.1           Revolving Credit Facility.
 
(a)           Subject to the terms and conditions hereof:
 
(i)           Subject to the terms and conditions of this Agreement, Lender
agrees to make Revolving Loans to Borrower from the Closing Date to, but not
including, the Final Revolving Commitment Termination Date, at such times and in
such amounts as Borrower may request in accordance with Section 2.6 hereof; and
 
(ii)           Borrowings under the Revolving Credit Facility may be borrowed,
repaid without penalty or premium, and reborrowed.
 
(b)           In no event shall Lender be obligated to make Loans hereunder if,
after giving effect to the requested Revolving Loan, the Revolving Credit
Facility Usage would exceed lesser of (i) the Revolving Credit Facility
Commitment or (ii) the Sublimit.
 
(c)           In the event that, at any time, the Revolving Credit Facility
Usage exceeds the Revolving Credit Facility Commitment, then Borrower
immediately shall repay the amount of such excess to Lender to be applied to the
outstanding principal balance of the Revolving Loans.  In the event that, at any
time, the Revolving Credit Facility Usage exceeds the Sublimit for a period of
more than 10 Business Days as a result of the extension of loans under the
Broker/Dealer Credit Facility, then Borrower immediately shall pay the amount of
such excess to Lender to be applied to the outstanding principal balance of the
Revolving Loans.
 
 (d)           Lender shall have no obligation to make any Revolving Loan under
the Revolving Credit Facility on or after the Final Revolving Commitment
Termination Date.
 
(e)           Subject to Section 2.1(b) hereof, each Borrowing under the
Revolving Credit Facility shall be in a minimum principal amount of $250,000
and, thereafter, in integral multiples of $100,000, unless such Borrowing is
being made to pay any interest, fees, or expenses then due hereunder, in which
case such Borrowing may be in the amount of such interest, fees, or expenses.
 
(f)           On the Closing Date, “Revolving Loans” (as defined in the Existing
Credit Agreement) outstanding under the Existing Credit Agreement (the “Existing
Revolving Loans”) shall be converted into Revolving Loans hereunder, it being
understood that no repayment of the Existing Revolving Loans is being effected
hereby, but merely an amendment, restatement, and renewal in accordance with the
terms hereof.
 
 
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2.1A           Initial Term Loan.  Borrower acknowledges and agrees that, as of
the Initial Term Loan Conversion Date, the outstanding principal balance of all
Loans (as defined in the Existing Credit Agreement) under the Existing Credit
Agreement was combined and converted into a single term loan (the “Initial Term
Loan”) having an outstanding principal balance of $21,840,425 as of the Initial
Term Loan Conversion Date.  The outstanding principal balance of the Initial
Term Loan as of the Closing Date is $10,920,213.05, and shall be repaid on the
following dates and in the following amounts:
 
Date
Installment Amount
December 31, 2012
$2,184,042.58
March 31, 2013
$2,184,042.58
June 30, 2013
$2,184,042.58
September 30, 2013
$2,184,042.58
Initial Term Loan Final Payment Date
$2,184,042.60

The outstanding unpaid principal balance and all accrued and unpaid interest on
the Initial Term Loan shall be due and payable on the earlier of (i) the Initial
Term Loan Final Payment Date and (ii) the date of the acceleration of the
Initial Term Loan in accordance with the terms hereof.  All principal of,
interest on, and other amounts payable in respect of the Initial Term Loan shall
constitute Obligations.
 
2.1B           Term Loan B.
 
(a)           Subject to the provisions of this Section 2.1B and Article III,
and the other terms and conditions of this Agreement, Lender agrees to make a
term loan (the “Term Loan B”) to Borrower at Borrower’s request on any date
occurring on or after the Closing Date and on or prior to March 31, 2013 in an
amount equal to the Term Loan B Amount.
 
(b)           Any portion of the Term Loan B Commitment that has not been funded
by Lender to Borrower shall expire and be terminated upon the earlier to occur
of (i) the Term Loan B Closing Date and (ii) 5:00 p.m. Pacific Time on March 31,
2013.
 
(c)           If the Term Loan B is made to Borrower, the Term Loan B shall be
repaid on the following dates and in the following amounts:
 
 
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Date
Installment Amount
March 31, 2014
$1,245,000.00
June 30, 2014
$1,245,000.00
September 30, 2014
$1,245,000.00
December 31, 2014
$1,245,000.00
March 31, 2015
$1,245,000.00
June 30, 2015
$1,245,000.00
September 30, 2015
$1,245,000.00
December 31, 2015
$1,245,000.00
March 31, 2016
$1,245,000.00
June 30, 2016
$1,245,000.00
September 30, 2016
$1,245,000.00
Term Loan B Final Payment Date
$1,305,000.00

The outstanding unpaid principal balance and all accrued and unpaid interest on
the Term Loan B shall be due and payable on the earlier of (i) the Term Loan B
Final Payment Date, and (ii) the date of the acceleration of the Term Loan B in
accordance with the terms hereof.  All principal of, interest on, and other
amounts payable in respect of the Term Loan B shall constitute Obligations.

2.2           Rate Designation.   Borrower shall designate each Borrowing under
the Revolving Credit Facility and the Term Loan B as a Base Rate Borrowing or a
LIBOR Rate Borrowing in the Request for Borrowing or Request for
Conversion/Continuation given to Lender in accordance with Section 2.6 or
Section 2.7. With respect to each LIBOR Rate Loan with an Interest Period that
continues beyond the Closing Date, the LIBOR Rate that is applicable to such
LIBOR Rate Loan as of the Closing Date under the Existing Credit Agreement shall
continue to be applicable with respect to such LIBOR Rate Loan until
the  expiration of such Interest Period.   At any time after the Closing Date,
Borrower may designate all or any portion of the Initial Term Loan as a Base
Rate Borrowing or a LIBOR Rate Borrowing in a Request for
Conversion/Continuation given to Lender in accordance with Section 2.7.
 
2.3           Interest Rates; Payment of Principal and Interest.
 
(a)           Borrower shall make each payment due hereunder by making, or
causing to be made, the amount thereof available to Lender’s account maintained
with Lender in Los Angeles, California, not later than noon Pacific Time, on the
date of payment.  In lieu thereof, Borrower hereby authorizes Lender to, and
Lender shall, charge such interest, the Letter of Credit Fee, and all other fees
and expenses provided for in this Agreement or the other Loan Documents (as and
when accrued or incurred), to Borrower’s Loan Account, which amounts thereafter
shall accrue interest at the rate then applicable to Base Rate Loans hereunder.
 
 
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(b)           Subject to Section 2.4, each Base Rate Loan shall bear interest
upon the unpaid principal balance thereof, from and including the date advanced
or converted, to but excluding the date of conversion or repayment thereof, at a
fluctuating rate, per annum, equal to the lesser of (i) the Base Rate, or (ii)
the Highest Lawful Rate.  Any change in the interest rate resulting from a
change in the Base Rate will become effective on the day on which each change in
the Base Rate is announced by Lender.  Interest due with respect to Base Rate
Loans shall be due and payable, in arrears, commencing on the first Interest
Payment Date following the Closing Date, and continuing on each Interest Payment
Date thereafter up to and including the Interest Payment Date immediately
preceding the Final Payment Date, and on the Final Payment Date.
 
(c)           Subject to Section 2.4, each LIBOR Rate Loan shall bear interest
upon the unpaid principal balance thereof, from the date advanced, converted, or
continued, at a rate, per annum, equal to the lesser of (i) the LIBOR Rate plus
2.25 percentage points, and (ii) the Highest Lawful Rate.  Interest due with
respect to each LIBOR Rate Loan shall be due and payable, in arrears, on each
Interest Payment Date applicable to that LIBOR Rate Loan and on the Final
Payment Date.  Anything to the contrary contained in this Agreement
notwithstanding, Borrower may not have more than 10 LIBOR Rate Loans outstanding
at any one time.
 
(d)           Unless prepaid in accordance with the terms hereof, the
outstanding principal balance of all Loans, together with accrued and unpaid
interest thereon, shall be due and payable in accordance with clause (e) below.
 
(e)           On the Final Revolving Commitment Termination Date, the
outstanding principal balance of all Revolving Loans shall be deemed converted
into a single term loan, which shall be repayable in 16 quarterly principal
installments commencing on November 1, 2013 and continuing on the first day of
each fiscal quarter of Borrower thereafter, (i) the first eight of which shall
be in an amount equal to the 3.75 percent times the outstanding principal
balance of such term loan as of the date of conversion and (ii) the second eight
of which shall be in an amount equal to the 5.00 percent times the outstanding
principal balance of such term loan as of the date of conversion, with all
unpaid amounts due and payable on the Final Payment Date.
 
2.4           Default Rate.
 
Upon the occurrence and during the continuance of an Event of Default, all
Obligations (except for Bank Product Obligations) shall bear interest at a rate
equal to (i) the Base Rate, plus (ii) 3.00 percentage points.  All amounts
payable under this Section 2.4 shall be immediately due and payable without the
requirement of notice or demand.
 
2.5           Computation of Interest and Fees Maximum Interest Rate.
 
(a)           All computations of interest with respect to the Loans and
computations of the fees (including the Letter of Credit Fee) due hereunder for
any period shall be calculated on the basis of a year of 360 days for the actual
number of days elapsed in such period, provided that all computations of
interest with respect to Base Rate Loans shall be calculated on the basis of a
year of 365/366 days for the actual number of days elapsed in such
period.  Interest shall accrue from the first day of the making of a Loan (or
the date on which interest or fees or other payments are due hereunder, if
applicable) to (but not including) the date of repayment of such Loan (or the
date of the payment of interest or fees or other payments, if applicable) in
accordance with the provisions hereof.
 
 
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(b)           Anything to the contrary contained in this Agreement
notwithstanding, Borrower shall not be obligated to pay, and Lender shall not be
entitled to charge, collect, receive, reserve, or take interest (it being
understood that interest shall be calculated as the aggregate of all charges
which constitute interest under applicable law that are contracted for, charged,
reserved, received, or paid) in excess of the Highest Lawful Rate.  During any
period of time in which the interest rates specified herein exceed the Highest
Lawful Rate, interest shall accrue and be payable at such Highest Lawful Rate;
provided, however, that, if the interest rate otherwise applicable hereunder
declines below the Highest Lawful Rate, interest shall continue to accrue and be
payable at the Highest Lawful Rate (so long as there remains any unpaid
principal with respect to the Loans) until the interest that has been paid
hereunder equals the amount of interest that would have been paid if interest
had at all times accrued and been payable at the applicable interest rates
otherwise specified in this Agreement.  For purposes of this Section 2.5, the
term “applicable law” shall mean that law in effect from time to time and
applicable to this loan transaction which lawfully permits the charging and
collection of the highest permissible, lawful, non-usurious rate of interest on
such loan transaction and this Agreement, including laws of the State of
California and, to the extent controlling, laws of the United States of America.
 
2.6           Request for Borrowing.
 
(a)           Each Base Rate Borrowing shall be made on a Business Day and each
LIBOR Rate Borrowing shall be made on a Eurodollar Business Day.
 
(b)           Each Borrowing shall be made upon written notice, by way of a
Request for Borrowing, which Request for Borrowing shall be irrevocable and
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email address as Lender may designate to Borrower in accordance herewith), or
telefacsimile to Lender at the address (or its email address or telefacsimile
number) indicated on Exhibit 9.3 attached hereto, as follows:
 
(i)           for a Base Rate Borrowing, Borrower shall give Lender notice not
later than noon Pacific Time 1 Business Day prior to the date on which such
Borrowing is to be made (which date shall be a Business Day), and such notice
shall specify that a Base Rate Borrowing is requested and state the amount
thereof (subject to the provisions of this Article II);
 
(ii)           for a LIBOR Rate Borrowing, Borrower shall give Lender notice no
earlier than two (2) Eurodollar Business Days before and no later than noon
Pacific Time on the day the LIBOR Rate Borrowing is to be made, and such notice
shall specify that a LIBOR Rate Borrowing is requested and state the amount
thereof (subject to the provisions of this Article II); provided, however, that
no Borrowing shall be available as a LIBOR Rate Borrowing when any Unmatured
Event of Default or Event of Default has occurred and is continuing.  If
Borrower fails to designate a Loan as a LIBOR Rate Borrowing in accordance
herewith, the Loan will be a Base Rate Borrowing, and any outstanding LIBOR Rate
Loan will be deemed to be a LIBOR Rate Loan with an Interest Period of one (1)
month upon expiration of the applicable Interest Period.
 
 
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(c)           If the notice provided for in clause (b) of this Section 2.6 with
respect to a Base Rate Borrowing or a LIBOR Rate Borrowing is received by Lender
not later than noon, Pacific Time, on a Business Day or Eurodollar Business Day,
as applicable, such day shall be treated as the first Business Day or Eurodollar
Business Day, as applicable, of the required notice period.  In any other event,
such notice will be treated as having been received immediately before noon,
Pacific Time, of the next Business Day or Eurodollar Business Day, as
applicable.
 
(d)           Each Request for Borrowing shall (i) specify, if applicable, among
other information, the identity of the Excluded Fund(s) that the proceeds of
such Borrowing will be used by Borrower to invest in and the amount of each such
Investment and (ii) include a description of all Margin Securities (if any) held
or to be acquired by any Loan Party in connection with such Borrowing (including
the name of the issuer of such Margin Securities, the owner (or proposed owner)
thereof and the number of shares of each class of Margin Securities held or to
be acquired by such Person), and the market value thereof, together with a
description of the other Collateral held by such Loan Party in each case with
such detail as may be required to enable Lender to comply with its obligations
under Regulation U, and any other related information reasonably requested by
Lender, and, upon request of the Lender, Borrower will provide a
Borrower-prepared financial report with respect to the Loan Parties (including a
Borrower-prepared balance sheet with respect to the Loan Parties) as of the end
of the most recent fiscal month then ended.
 
2.7           Conversion or Continuation.
 
(a)           Subject to the provisions of clause (d) of this Section 2.7 and
the provisions of Section 2.14, Borrower shall have the option to (i) convert
all or any portion of the outstanding Base Rate Borrowings equal to $250,000,
and integral multiples of $100,000 in excess of such amount, to a LIBOR Rate
Borrowing, (ii) convert all or any portion of the outstanding LIBOR Rate
Borrowings equal to $250,000 and integral multiples of $100,000 in excess of
such amount, to a Base Rate Borrowing, and (iii) upon the expiration of any
Interest Period applicable to any of its LIBOR Rate Borrowings, continue all or
any portion of such LIBOR Rate Borrowing equal to $250,000, and integral
multiples of $100,000 in excess of such amount, as a LIBOR Rate Borrowing, and
the succeeding Interest Period of such continued Borrowing shall commence on the
expiration date of the Interest Period previously applicable thereto; provided,
however, that a LIBOR Rate Borrowing only may be converted or continued, as the
case may be, on the expiration date of the Interest Period applicable thereto;
provided further, however, that no outstanding Borrowing may be continued as, or
be converted into, a LIBOR Rate Borrowing when any Unmatured Event of Default or
Event of Default has occurred and is continuing; provided further, however, that
if, before the expiration of an Interest Period of a LIBOR Rate Borrowing,
Borrower fails timely to deliver the appropriate Request for
Conversion/Continuation, such LIBOR Rate Borrowing automatically shall be
converted to a LIBOR Rate Borrowing with an Interest Period of one (1) month.
 
(b)           Borrower shall, by personal delivery or by registered or certified
mail (postage prepaid, return receipt requested), overnight courier, electronic
mail (at such email addresses as Lender may designate to Borrower in accordance
herewith), or telefacsimile, deliver a Request for Conversion/Continuation to
Lender (i) no later than noon, Pacific Time, on the Business Day that is the
proposed conversion date (in the case of a conversion to a Base Rate Borrowing),
and (ii) no earlier than two (2) Eurodollar Business Days before and no later
than noon Pacific Time on the day of the proposed conversion or continuation
date (in the case of a conversion to, or a continuation of, a LIBOR Rate
Borrowing).  A Request for Conversion/Continuation shall specify (x) the
proposed conversion or continuation date (which shall be a Business Day or a
Eurodollar Business Day, as applicable), (y) the amount and type of the
Borrowing to be converted or continued, and (z) the nature of the proposed
conversion or continuation.
 
 
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(c)           Any Request for Conversion/Continuation (or telephonic notice in
lieu thereof) shall be irrevocable and Borrower shall be obligated to convert or
continue in accordance therewith.
 
(d)           No Borrowing (or portion thereof) may be converted into, or
continued as, a LIBOR Rate Borrowing with an Interest Period that ends after (i)
the Final Payment Date, (ii) in the case of the Initial Term Loan, the Initial
Term Loan Final Payment Date, or (iii) in the case of the Term Loan B, the Term
Loan B Final Payment Date.
 
2.8           Mandatory Repayment.
 
(a)           The Revolving Credit Facility Commitment shall terminate on the
Final Revolving Commitment Termination Date, and the Loans shall convert into a
term loan and shall be repayable as provided in Section 2.3(e)
hereof.  Notwithstanding the foregoing, at the request of Borrower, any Letters
of Credit that are outstanding on the Final Revolving Commitment Termination
Date shall be renewed through the Final Payment Date.  On the Final Payment Date
all remaining outstanding Loans, all interest that has accrued and remains
unpaid thereon, all contingent reimbursement obligations of Borrower with
respect to outstanding Letters of Credit, all unpaid fees, costs, or expenses
that are payable hereunder or under any other Loan Document, and all other
Obligations (including any amounts due and payable to any Bank Product Provider
in respect of all Bank Products provided by such Bank Product Provider)
immediately shall each become due and payable in full, without notice or demand
(including (a) either (i) providing cash collateral to be held by Lender in an
amount equal to 105% of the Letter of Credit Usage, or (ii) causing the original
Letters of Credit to be returned to Lender, and (b) providing cash collateral
(in an amount determined by Lender as sufficient to satisfy the reasonably
estimated credit exposure) to be held by Lender for the benefit of the Bank
Product Providers with respect to the Bank Product Obligations).
 
(b)           Borrower shall make repayments in accordance with Section 2.1(c).
 
(c)           All prepayments of the Loans made pursuant to Section 2.8(b) shall
be applied, first, to the outstanding principal amount of the Revolving Loans,
until paid in full, and second, to cash collateralize the Letters of Credit in
an amount equal to 105% of the then extant Letter of Credit Usage, until paid in
full.
 
(d)           At any time the aggregate principle amount of any Debt incurred by
Newco and permitted by Sections 6.1(p)  generates proceeds of $75,000,000 or
more, Borrower or such applicable Subsidiary shall make prepayments to the Loans
in the aggregate amount  of such proceeds, to be applied first, to the
outstanding principal amount of the Initial Term Loan, until paid in full,
second, to the outstanding principal amount of the Term Loan B, until paid in
full, third, to the outstanding principal amount of the Revolving Loans, until
paid in full, and fourth, to cash collateralize the Letters of Credit in an
amount equal to 105% of the then extant Letter of Credit Usage, until paid in
full.
 
 
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2.9           Voluntary Prepayments.   Borrower shall have the right, at any
time and from time to time, to prepay the Loans without penalty or
premium.  Borrower shall give Lender notice of any such prepayment with respect
to Base Rate Loans and not less than 3 Eurodollar Business Days prior written
notice of any such prepayment with respect to LIBOR Rate Loans.  In each case,
such notice shall specify the date on which such prepayment is to be made (which
shall be a Business Day or Eurodollar Business Day, as applicable), whether the
Loan to be prepaid is a Revolving Loan or a Term Loan and the amount of such
prepayment.  Each such prepayment shall be in an aggregate minimum amount of
$250,000, and integral multiples of $50,000 in excess of such amount, in each
case, and shall include interest accrued on the amount prepaid to, but not
including, the date of payment in accordance with the terms hereof (or, in each
case, such lesser amount constituting the amount of all Loans then
outstanding).  All prepayments of a Term Loan made pursuant to this Section 2.9
shall be applied against the remaining installments of principal due in respect
thereof in the inverse order of maturity.  The foregoing to the contrary
notwithstanding, (x) Borrower may not make a partial principal prepayment on a
LIBOR Rate Loan; and (y) Borrower may prepay the full outstanding principal
balance on a LIBOR Rate Loan prior to the end of the Interest Period, provided,
that such prepayment is accompanied by a fee ("LIBOR Prepayment Fee") equal to
the amount, if any, by which (i) the additional interest which would have been
earned by Lender had the LIBOR Rate Loan not been prepaid, at the LIBOR Rate
that would have been applicable thereto, for the period from the date of such
prepayment to the last day of the then current Interest Period therefore,
exceeds (ii) the interest which would have been recoverable by Lender by placing
the amount of the LIBOR Rate Loan on deposit in the LIBOR market for a period
starting on the date on which it was prepaid and ending on the last day of the
applicable Interest Period.  Lender’s calculation of the LIBOR Prepayment Fee
will be deemed conclusive absent manifest error.
 
2.10           Closing Fee.  Borrower shall pay a fee (the “Closing Fee”) to
Lender in the amount of $75,000.  The Closing Fee shall be due and payable on
the Closing Date.
 
2.11           Unused Commitment Fee.  Borrower shall pay a fee (the “Unused
Commitment Fee”) to Lender quarterly in arrears, commencing on the first day of
the first fiscal quarter of Borrower following the Sixth Amendment Effective
Date, and continuing on the first day of each fiscal quarter of Borrower
thereafter so long as the Revolving Credit Facility Commitment is extant.  The
Unused Commitment Fee shall be equal to 0.25% per annum times the average daily
amount of the unfunded portion of the Revolving Credit Facility Commitment and
shall be calculated, as set forth in Section 2.6 hereof, on the basis of a year
of 360 days for the actual number of days elapsed.
 
2.12           Maintenance of Loan Account; Statements of Obligations.   Lender
shall maintain an account on its books in the name of Borrower (the “Loan
Account”) on which Borrower will be charged with all Loans made by Lender to
Borrower or for Borrower’s account, the Letters of Credit issued by Lender for
Borrower’s account, and with all other payment Obligations (except for Bank
Product Obligations), including all accrued interest, fees and expenses (in each
case, as and when payable hereunder or under the other Loan Documents).  Lender
shall render statements regarding the Loan Account to Borrower, including
principal, interest, fees, and including an itemization of all expenses owing,
and such statements shall be conclusively presumed to be correct and accurate
(absent manifest error) and constitute an account stated between Borrower and
Lender unless, within 30 days after receipt thereof by Borrower, Borrower shall
deliver to Lender written objection thereto describing the error or errors
contained in any such statements.
 
 
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2.13           Increased Costs.   If after the Closing Date, the adoption of, or
any change in, any applicable law, rule, or regulation, or any change in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by Lender (or
its Affiliates) with any request, guideline, or directive (irrespective of
whether having the force of law) of any governmental authority (a “Regulatory
Change”) shall impose, modify, or deem applicable any reserve, special deposit,
or similar requirement (including any such requirement imposed by the Federal
Reserve Board, but excluding with respect to any LIBOR Rate Loan any such
requirement included in the calculation of the Base LIBOR Rate, as applicable)
against Assets of, deposits with, or for the account of, or credit extended by,
Lender (or its Affiliates) or shall impose on Lender (or its Affiliates) or the
interbank eurodollar market any other condition affecting its LIBOR Rate Loans,
as applicable, or its obligation to make LIBOR Rate Loans, as applicable, then,
Lender may, by written notice given to Borrower, require Borrower to pay to
Lender such additional amounts as shall compensate Lender for any such increased
cost, reduction, loss, or expense actually incurred by Lender in connection with
the Loans for preceding the date on which such notice is given during each
fiscal quarter thereafter.  Any such request for compensation by Lender under
this Section 2.13 shall set forth the basis of calculation thereof and shall, in
the absence of manifest error, be conclusive and binding for all purposes.
 
2.14           Suspension of LIBOR Rate Loans.  If Lender, on any Eurodollar
Business Day, is unable to determine the Base LIBOR Rate applicable for a new,
continued, or converted LIBOR Rate Loan for any reason, or any law, regulation,
or governmental order, rule or determination, makes it unlawful for Lender to
make a LIBOR Rate Loan, Borrower's right to select LIBOR Rate Loans will be
suspended until Lender is again able to determine the Base LIBOR Rate or make
LIBOR Rate Loans, as the case may be.  During such suspension, new Loans,
outstanding Base Rate Loans, and LIBOR Rate Loans whose Interest Periods
terminate may only be Base Rate Loans.  Any such determination shall, in the
absence of manifest error, be conclusive and binding for all purposes.
 
2.15           Funding Sources.  Nothing herein shall be deemed to obligate
Lender to obtain the funds to make any Loan in any particular place or manner
and nothing herein shall be deemed to constitute a representation by Lender that
it has obtained or will obtain such funds in any particular place or manner.
 
2.16           Place of Borrowings.  All Borrowings made hereunder shall be
disbursed by credit to Borrower’s Designated Account or as may otherwise be
agreed to between Borrower and Lender.
 
2.17           Survivability.  Borrower’s obligations under Section 2.13 hereof
shall survive repayment of the Loans made hereunder and termination of the
Revolving Credit Facility Commitment for a period of 90 days.
 
 
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2.18           Letters of Credit.
 
(a)           Subject to the terms and conditions of this Agreement, Lender
agrees to issue letters of credit for the account of Borrower (each, a “Letter
of Credit”).  Each request for the issuance of a Letter of Credit, or the
amendment, renewal, or extension of any outstanding Letter of Credit, shall be
made in writing by an Authorized Person and delivered to Lender via personal
delivery, registered or certified mail (postage prepaid, return receipt
requested), overnight courier, electronic mail (at such email address as Lender
may designate to Borrower in accordance herewith), or telefacsimile, reasonably
in advance of the requested date of issuance, amendment, renewal, or
extension.  Each such request shall be in form and substance satisfactory to
Lender in its reasonable discretion and shall specify (i) (A) the amount of such
Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of
such Letter of Credit, (C) the expiration date of such Letter of Credit, (D) the
name and address of the beneficiary thereof, and (E) such other information
(including, in the case of an amendment, renewal, or extension, identification
of the outstanding Letter of Credit to be so amended, renewed, or extended) as
shall be necessary to prepare, amend, renew, or extend such Letter of Credit and
(ii) shall be accompanied by such Issuer Documents as Lender may request or
require, to the extent that such requests or requirements are consistent with
the Issuer Documents that Lender generally requests for Letters of Credit in
similar circumstances.  Anything contained herein to the contrary
notwithstanding, Lender may, but shall not be obligated to, issue or cause the
issuance of a Letter of Credit that supports the obligations of Borrower or its
Subsidiaries in respect of (A) a lease of real property, or (B) an employment
contract. Lender shall have no obligation to issue a Letter of Credit if any of
the following would result after giving effect to the issuance of such requested
Letter of Credit:
 
(i)           the Letter of Credit Usage would exceed $2,500,000, or
 
(ii)           the Revolving Credit Facility Usage would exceed the lesser of
(i) Revolving Credit Facility Commitment and (ii) the Sublimit.
 
Borrower and Lender hereby acknowledge and agree that all Letters of Credit (as
defined in the Existing Credit Agreement) (the “Existing Letters of Credit”)
issued under the Existing Credit Agreement as of the Closing Date shall
constitute Letters of Credit under this Agreement on and after the Closing Date
with the same effect as if such Existing Letters of Credit were issued by Lender
on the Closing Date.  Each Letter of Credit shall be in form and substance
acceptable to Lender (in the exercise of its reasonable discretion), including
the requirement that the amounts payable thereunder must be payable in
Dollars.  If Lender is obligated to advance funds under a Letter of Credit,
Borrower immediately shall reimburse such L/C Disbursement to Lender by paying
to Lender an amount equal to such L/C Disbursement not later than 11:00 a.m.,
Pacific Time, on the date that such L/C Disbursement is made, if Borrower shall
have received written or telephonic notice of such L/C Disbursement prior to
10:00 a.m., Pacific Time, on such date, or, if such notice has not been received
by Borrower prior to such time on such date, then not later than 11:00 a.m.,
Pacific Time, on the Business Day that Borrower receives such notice, if such
notice is received prior to 10:00 a.m., Pacific Time, on the date of receipt,
and, in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be a Base Rate Loan under the Revolving Credit
Facility hereunder and, thereafter, shall bear interest at the rate then
applicable to Base Rate Loans.  To the extent an L/C Disbursement is deemed to
be a Base Rate Loan hereunder, Borrower’s obligation to reimburse such L/C
Disbursement shall be discharged and replaced by the resulting Base Rate Loan.
 
 
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(b)           Borrower hereby agrees to indemnify, save, defend, and hold Lender
harmless from any loss, cost, expense, or liability, and reasonable attorneys
fees incurred by Lender arising out of or in connection with any Letter of
Credit; provided, however, that Borrower shall not be obligated hereunder to
indemnify for any loss, cost, expense, or liability to the extent that it is
caused by the gross negligence or willful misconduct of Lender.  Borrower agrees
to be bound by the Lender’s interpretations of any Letter of Credit issued by
Lender to or for Borrower’s account, even though this interpretation may be
different from Borrower’s own, and Borrower understands and agrees that Lender
shall not be liable for any error, negligence, or mistake, whether of omission
or commission, in following Borrower’s instructions or those contained in the
Letter of Credit or any modifications, amendments, or supplements
thereto.  Borrower hereby acknowledges and agrees that Lender shall not be
responsible for delays, errors, or omissions resulting from the malfunction of
equipment in connection with any Letter of Credit.
 
(c)           If by reason of (x) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (y) compliance by
Lender with any direction, request, or requirement (irrespective of whether
having the force of law) of any Governmental Authority or monetary authority
including, Regulation D of the Federal Reserve Board as from time to time in
effect (and any successor thereto):
 
(i)           any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or
 
(ii)           there shall be imposed on Lender any other condition regarding
any Letter of Credit issued pursuant hereto,
 
and the result of the foregoing is to increase, directly or indirectly, the cost
to Lender of issuing, making, guaranteeing, or maintaining any Letter of Credit
or to reduce the amount receivable in respect thereof by Lender, then, and in
any such case, Lender may, at any time within a reasonable period after the
additional cost is incurred or the amount received is reduced, notify Borrower,
and Borrower shall pay on demand such amounts as Lender may specify to be
necessary to compensate Lender for such additional cost or reduced receipt,
together with interest on such amount from the date of such demand until payment
in full thereof at the rate then applicable to Base Rate Loans hereunder.  The
determination by Lender of any amount due pursuant to this Section, as set forth
in a certificate setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest or demonstrable error, be final and conclusive
and binding on all of the parties hereto.
 
(d)           Borrower shall pay Lender a Letter of Credit fee (the “Letter of
Credit Fee”) which shall accrue at a rate equal to 1.25% per annum times the
Daily Balance of the undrawn amount of all outstanding Letters of Credit, and
which shall be payable quarterly in arrears on the first day of each fiscal
quarter beginning after the Closing Date.
 
 
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(e)           Lender and Borrower agree that, in paying any drawing under a
Letter of Credit, Lender shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document.  Neither Lender nor any Affiliate of Lender, shall
be liable to any Loan Party for (i) any action taken or omitted in connection
herewith at the request or with the approval of Lender, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; (iii) any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit or any error in interpretation of technical
terms; or (iv) the due execution, effectiveness, validity or enforceability of
any document or instrument related to any Letter of Credit or Issuer
Document.  Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, that this assumption is not intended to, and shall not, preclude
Borrower from pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement.  None of Lender
or any Affiliate of Lender shall be liable or responsible for any of the matters
described in clauses (i) through (vi) of Section 2.18(f) or for any action,
neglect or omission under or in connection with any Letter of Credit or Issuer
Document, including in connection with the issuance or any amendment of any
Letter of Credit, the failure to issue or amend any Letter of Credit, the
honoring or dishonoring of any demand under any Letter of Credit, or the
following of Borrower’s instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto, and such action or
neglect or omission will bind Borrower.  In furtherance and not in limitation of
the foregoing, Lender may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary (or Lender may refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such Letter of Credit and may disregard any requirement in a Letter
of Credit that notice of dishonor be given in a particular manner and any
requirement that presentation be made at a particular place or by a particular
time of day), and Lender shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.  Lender shall not be responsible for the wording of
any Letter of Credit (including any drawing conditions or any terms or
conditions that are ineffective, ambiguous, inconsistent, unduly complicated or
reasonably impossible to satisfy), notwithstanding any assistance Lender may
provide to Borrower with drafting or recommending text for any letter of credit
application or with the structuring of any transaction related to any Letter of
Credit, and Borrower hereby acknowledges and agrees that any such assistance
will not constitute legal or other advice by  Lender or any representation or
warranty by Lender that any such wording or such Letter of Credit will be
effective.  Without limiting the foregoing, Lender may, as it deems appropriate,
use in any Letter of Credit any portion of the language prepared by Borrower and
contained in the letter of credit application relative to drawings under such
Letter of Credit.  Borrower hereby acknowledges and agrees that Lender shall not
be responsible for delays, errors, or omissions resulting from the malfunction
of equipment in connection with any Letter of Credit.
 
 
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(f)           The obligation of Borrower to reimburse Lender for each drawing
under each Letter of Credit shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including the following:
 
(i)         any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document,
 
(ii)         the existence of any claim, counterclaim, setoff, defense (other
than payment in full) or other right that Borrower or any of its Subsidiaries
may have at any time against any beneficiary or any transferee of such Letter of
Credit (or any Person for whom any such beneficiary or any such transferee may
be acting), Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction,
 
(iii)         any draft, demand, certificate or other document presented under
such 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, or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit,
 
(iv)         any payment by Lender under such Letter of Credit against
presentation of a draft or certificate that does not substantially or strictly
comply with the terms of such Letter of Credit (including, without limitation,
any requirement that presentation be made at a particular place or by a
particular time of day), or any payment made by Lender under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit,
 
(v)         any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or discharge of, Borrower or any of
its Subsidiaries, or
 
(vi)         the fact that any Event of Default or Unmatured Event of Default
shall have occurred and be continuing.
 
(g)           Unless otherwise expressly agreed by Lender and Borrower when a
Letter of Credit is issued, (i) the rules of the ISP and the UCP 600 shall apply
to each standby Letter of Credit, and (ii) the rules of the UCP 600 shall apply
to each commercial Letter of Credit.
 
(h)           In the event of a direct conflict between the provisions of this
Section 2.18 and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other.  In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.18 shall control and
govern.
 
 
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ARTICLE III
 
CONDITIONS TO LOANS
 
3.1           Conditions Precedent to Effectiveness.  The effectiveness of this
Agreement, in addition to the conditions set forth in Section 3.2 hereof,
subject to the fulfillment, to the satisfaction of Lender and its counsel, of
each of the following conditions on or before the Closing Date:
 
(a)           Borrower shall have executed and delivered to Lender the
Disclosure Statement required under this Agreement.  The form and content of the
Disclosure Statement shall be satisfactory to Lender;
 
(b)           Lender shall have received the Reaffirmation Agreement, duly
executed and delivered by each party thereto;
 
(c)           Lender shall have received the Amendment Number One to Stock
Pledge Agreement, duly executed and delivered by each party thereto;
 
(d)           Lender shall have received the Amendment Number Two to Revolving
Note and Cash Subordination Agreement & Revolving Note, in form and substance
reasonably satisfactory to Lender, executed and delivered by all parties thereto
and in full force and effect, together with evidence, satisfactory to Lender,
that FINRA approval has been obtained with respect to the amendments to the
Broker/Dealer Credit Facility as set forth therein;
 
(e)           Lender shall have received written opinions, dated the date of
this Agreement, of counsel to Borrower in form and substance reasonably
satisfactory to Lender and its counsel;
 
(f)           Lender shall have received a certificate of status with respect to
Borrower dated within 10 days of the date of this Agreement, such certificate to
be issued by the Secretary of State of Delaware, which certificate shall
indicate that Borrower is in good standing in such State;
 
(g)           Lender shall have received a certificate of status with respect to
Harvest dated within 10 days of the date of this Agreement, such certificate to
be issued by the Secretary of State of Delaware, which certificate shall
indicate Harvest is in good standing in such State;
 
(h)           Lender shall have received a certificate of status with respect to
JMP Securities dated within 10 days of the date of this Agreement, such
certificate to be issued by the Secretary of State of Delaware, which
certificate shall indicate JMP Securities is in good standing in such State;
 
(i)           Lender shall have received a copy of the Governing Documents of
Borrower, Harvest and JMP Securities, certified by the Secretary of Borrower;
 
(j)           Lender shall have received a signature and incumbency certificate
of the Responsible Officers of Borrower executing this Agreement, the
Reaffirmation Agreement, Amendment Number One to Stock Pledge Agreement and the
other Loan Documents to which Borrower is a party, certified by a Secretary of
Borrower;
 
(k)           Lender shall have received a signature and incumbency certificate
of the Responsible Officers of Harvest executing the Reaffirmation Agreement,
the Amendment Number One to Stock Pledge Agreement, and the other Loan Documents
to which Harvest is a party, certified by a Secretary of Harvest;
 
 
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(l)           Lender shall have received a signature and incumbency certificate
of the Responsible Officers of JMP Securities executing the Amendment Number Two
to Revolving Note and Cash Subordination Agreement & Revolving Note, and the
other Loan Documents to which JMP Securities is a party, certified by a
Secretary of JMP Securities;
 
(m)           Lender shall have received full payment of the Closing Fee;
 
(n)           Lender shall have received form FR U-1, with Part I fully
completed and executed by Borrower, together with the information necessary in
order for Lender to complete the disclosures required in Part II and Part III of
such form;
 
(o)           Lender shall have received a certificate executed by a Responsible
Officer of Borrower to the effect that Borrower and each of its Subsidiaries has
each obtained all orders, consents, approvals, and other authorizations and
having made all filings and other notifications (governmental or otherwise)
required in connection with the Loan Documents, other than orders, consents,
approvals, authorizations, or filings the failure to obtain or file, as
applicable, which could not reasonably be expected to have a Material Adverse
Effect on Borrower or any of its Subsidiaries;
 
(p)           Lender shall have received a copy of the resolutions of Borrower,
Harvest and JMP Securities certified as of the Closing Date by an Responsible
Officer thereof, authorizing (A) the transactions contemplated by the Loan
Documents to which such Person is or will be a party, and (B) the execution,
delivery and performance by such Person of each Loan Document to which such
Person is or will be a party and the execution and delivery of the other
documents to be delivered by such Person in connection herewith and therewith;
 
(q)           no litigation, inquiry, other action or proceeding (governmental
or otherwise), or injunction or other restraining order shall be pending or
overtly threatened that could have, in the reasonable opinion of Lender: (i) a
material adverse effect on Borrower’s or any Guarantor’s ability to repay the
Loans or (ii) a Material Adverse Effect on Borrower or any Guarantor; and
 
(r)           all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered or
executed or recorded and shall be in form and substance reasonably satisfactory
to Lender and its counsel.
 
3.1A           Condition Precedent to Term Loan B.  The obligation of Lender to
make the Term Loan B hereunder on the Term Loan B Closing Date, in addition to
the conditions set forth in Section 3.2 hereof, is subject to the fulfillment,
at or prior to the time of the making of such Loan, of each of the following
conditions:
 
(a)           Borrower shall have executed and delivered to Lender an updated
Disclosure Statement.  The form and content of the updated Disclosure Statement
shall be satisfactory to Lender;
 
 
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(b)           Lender shall have received a draft of the CLO Indenture, which
shall be substantially final in form and substance, and which shall be
reasonably satisfactory to Lender.
 
(c)           Lender shall have received drafts of the management contracts to
which the CLO Entity would be a party, which shall be substantially final in
form and shall be in form and substance reasonably satisfactory to Lender;
 
(d)           Lender shall have received evidence satisfactory to Lender that
(i) the proceeds of the Term Loan B will be used as permitted by Section 6.11
and (ii) after giving effect to the Term Loan B and the investment of the
proceeds into the CLO Entity, Borrower shall be in pro forma compliance with the
financial covenants set forth in Section 6.14;
 
(e)           Lender shall have received a certificate executed by a Responsible
Officer of Borrower to the effect that Borrower and each of its Subsidiaries has
each obtained all orders, consents, approvals, and other authorizations and
having made all filings and other notifications (governmental or otherwise)
required in connection with the Loan Documents, other than orders, consents,
approvals, authorizations, or filings the failure to obtain or file, as
applicable, which could not reasonably be expected to have a Material Adverse
Effect on Borrower or any of its Subsidiaries;
 
(f)           no litigation, inquiry, other action or proceeding (governmental
or otherwise), or injunction or other restraining order shall be pending or
overtly threatened that could have, in the reasonable opinion of Lender: (i) a
material adverse effect on Borrower’s or any Guarantor’s ability to repay the
Loans or (ii) a Material Adverse Effect on Borrower or any Guarantor; and
 
(g)           all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered or
executed or recorded and shall be in form and substance reasonably satisfactory
to Lender and its counsel.
 
3.2           Conditions Precedent to All Extensions of Credit.  The obligation
of Lender to make each Loan or issue any Letter of Credit hereunder is subject
to the fulfillment, at or prior to the time of the making of such Loan or the
issuance of such Letter of Credit, of each of the following conditions:
 
(a)           the representations and warranties of Borrower contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Loan or such Letter of Credit as though
made on and as of such date (except to the extent that such representations and
warranties solely relate to an earlier date);
 
(b)           no Event of Default or Unmatured Event of Default shall have
occurred and be continuing on the date of such Loan or such Letter of Credit,
nor shall either result from the making of such Loan or the issuance of such
Letter of Credit; and
 
(c)           Borrower shall have delivered to Lender a Request for Borrowing
pursuant to the terms of Section 2.6 hereof.
 
 
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ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES
OF BORROWER
 
Borrower makes the following representations and warranties which, except as set
forth in the Disclosure Statement with a specific reference to the Section of
this Article IV affected thereby, shall be true, correct, and complete in all
respects as of the date hereof, and shall be true, correct, and complete in all
respects as of the Closing Date, and at and as of the date of each Loan (or
other extension of credit) made thereafter, as though made on and as of the date
of the making of such Loan (or other extension of credit), and at and as of the
date of each issuance of, renewal of, or amendment to any Letter of Credit, as
though made on and as of the date of the making of such Loan (or other extension
of credit), and at and as of the date of such issuance of, renewal of, or
amendment to any Letter of Credit (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement and the making of the Loans (or other extension of credit) and the
issuance of the Letters of Credit:
 
4.1           Due Organization.   Borrower is a duly organized and validly
existing limited liability company in good standing under the laws of the State
of Delaware and is duly qualified to conduct business in all jurisdictions where
its failure to do so could reasonably be expected to have a Material Adverse
Effect on Borrower.  Each Guarantor is duly organized and validly existing
entity and in good standing under the laws of the jurisdiction of its
incorporation or organization and is duly qualified to conduct business in all
jurisdictions where its failure to do so could reasonably be expected to have a
Material Adverse Effect on such Guarantor.
 
4.2           Interests in Borrower and its Subsidiaries.
 
(a)           As of the Closing Date, all of the interests in Borrower and its
Subsidiaries are owned by the Persons identified in the Disclosure Statement.
 
(b)           Borrower may amend the Disclosure Statement with respect to this
Section 4.2 to reflect changes that would not, individually or in the aggregate
result in a Change of Control Event.
 
4.3           Requisite Power and Authorization.   Borrower has all requisite
power to execute and deliver this Agreement and the other Loan Documents to
which it is a party, and to borrow the sums provided for in this
Agreement.  Each Guarantor has all requisite power to execute and deliver the
Loan Documents to which it is a party.  Borrower and each Guarantor has all
governmental licenses, authorizations, consents, and approvals necessary to own
and operate its Assets and to carry on its businesses as now conducted and as
proposed to be conducted, other than licenses, authorizations, consents, and
approvals that are not currently required or the failure to obtain which
reasonably could not be expected to have a Material Adverse Effect on Borrower
or any Guarantor.  The execution, delivery, and performance of this Agreement
and the other Loan Documents have been duly authorized by Borrower and all
necessary action in respect thereof has been taken, and the execution, delivery,
and performance thereof do not require any consent or approval of any other
Person that has not been obtained.  The execution, delivery, and performance of
the Loan Documents to which it is a party have been duly authorized by each
Guarantor and all necessary action in respect thereof has been taken, and the
execution, delivery, and performance of the Loan Documents to which a Guarantor
are a party do not require any consent or approval of any other Person that has
not been obtained.
 
 
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4.4           Binding Agreements.   This Agreement and the other Loan Documents
to which Borrower is a party, when executed and delivered by Borrower, will
constitute, the legal, valid, and binding obligations of Borrower, enforceable
against Borrower in accordance with their terms, and the Loan Documents to which
the Guarantors are a party, when executed and delivered by the Guarantors, will
constitute, the legal, valid, and binding obligations of the Guarantors,
enforceable against the Guarantors in accordance with their terms, in each case
except as the enforceability hereof or thereof may be affected by: (a) any
Insolvency Proceeding, or other similar laws affecting the enforcement of
creditors’ rights generally, and (b) the limitation of certain remedies by
certain equitable principles of general applicability.
 
4.5           Other Agreements.   The execution, delivery, and performance by
Borrower of this Agreement and the other Loan Documents to which it is a party,
and the execution, delivery and performance by the Guarantors of the Loan
Documents to which they are a party, do not and will not: (a) violate (i) any
provision of any federal (including the Exchange Act), state, or local law,
rule, or regulation (including Regulations T, U, and X of the Federal Reserve
Board) binding on Borrower or any Guarantor, (ii) any order of any domestic
governmental authority, court, arbitration board, or tribunal binding on
Borrower or any Guarantor, or (iii) the Governing Documents of Borrower or any
Guarantor, or (b) contravene any provisions of, result in a breach of,
constitute (with the giving of notice or the lapse of time) a default under, or
result in the creation of any Lien (other than a Permitted Lien) upon any of the
Assets of Borrower or any Guarantor pursuant to, any Contractual Obligation of
Borrower or any Guarantor, or (c) require termination of any Contractual
Obligation of Borrower or any Guarantor, or (d) constitute a tortious
interference with any Contractual Obligation of Borrower or any Guarantor.
 
4.6           Litigation: Adverse Facts.
 
(a)           There is no action, suit, proceeding, or arbitration (irrespective
of whether purportedly on behalf of Borrower or any of its Subsidiaries) at law
or in equity, or before or by any federal, state, municipal, or other
governmental department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, pending or, to the knowledge of Borrower, threatened in
writing against or affecting Borrower or any of its Subsidiaries, that
reasonably could be expected to have a Material Adverse Effect on Borrower or
any of its Subsidiaries, or reasonably could be expected to materially and
adversely affect the ability of Borrower or the Guarantors to perform their
respective obligations under the Loan Documents (including Borrower’s ability to
repay any or all of the Obligations when due);
 
(b)           None of Borrower or any of its Subsidiaries is: (i) in violation
of any applicable law in a manner that reasonably could be expected to have a
Material Adverse Effect on such Person, or (ii) subject to or in default with
respect to any final judgment, writ, injunction, decree, rule, or regulation of
any court or of any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign, in a
manner that reasonably could be expected to have a Material Adverse Effect on
such Person, or reasonably could be expected to materially and adversely affect
the ability  of Borrower or the Guarantors to perform their respective
obligations under the Loan Documents (including Borrower’s ability to repay any
or all of the Obligations when due); and
 
 
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(c) (i) there is no action, suit, proceeding or, to the best of Borrower’s
knowledge or belief, investigation pending or, to the best of Borrower’s
knowledge or belief, threatened in writing against or affecting Borrower or any
of its Subsidiaries that questions the validity or the enforceability of this
Agreement or other the Loan Documents, and (ii) there is no action, suit, or
proceeding pending against or affecting Borrower or any of its Subsidiaries
pursuant to which, on the date of the making of any Loan hereunder, there is in
effect a binding injunction that could materially and adversely affect the
validity or enforceability of this Agreement or the other Loan Documents.
 
4.7           Government Consents.  Other than such as may have previously been
obtained, filed, or given, as applicable, no consent, license, permit, approval,
or authorization of, exemption by, notice to, report to or registration, filing,
or declaration with, any governmental authority or agency is required in
connection with the execution, delivery, and performance by Borrower and the
Guarantors of the Loan Documents to which they are a party.
 
4.8           Title to Assets; Liens.  Except for Permitted Liens, all of the
Assets of Borrower and its Subsidiaries are free from all Liens of any nature
whatsoever.  Except for Permitted Liens, Borrower and its Subsidiaries have good
and sufficient title to all of their respective Assets reflected in their books
and records as being owned by them or their nominee.  Neither this Agreement,
nor any of the other Loan Documents, nor any transaction contemplated under any
such agreement will affect any right, title, or interest of Borrower or any of
its Subsidiaries in and to any of the Assets of Borrower or any of its
Subsidiaries in a manner that reasonably could be expected to have a Material
Adverse Effect on Borrower or any of its Subsidiaries.
 
4.9           Payment of Taxes.  All tax returns and reports of Borrower and its
Subsidiaries (and all taxpayers with which Borrower or its Subsidiaries is or
has been consolidated or combined) required to be filed by it has been timely
filed (inclusive of any permitted extensions), and all Taxes, assessments, fees,
amounts required to be withheld and paid to a Governmental Authority and all
other governmental charges upon Borrower and its Subsidiaries, and upon their
Assets, income, and franchises, that are due and payable have been paid, except
to the extent that: (a) the failure to file such returns or reports, or pay such
Taxes, assessments, fees, or other governmental charges, as applicable,
reasonably could not be expected to have a Material Adverse Effect on Borrower
or any of its Subsidiaries, or (b) other than with respect to Taxes,
assessments, charges or claims which have become a tax Lien upon any of
Borrower’s or any of its Subsidiaries’ Assets, such Tax, assessment, charge, or
claim is being contested, in good faith, by appropriate proceedings promptly
instituted and diligently conducted, and an adequate reserve or other
appropriate provision, if any, shall have been made as required in order to be
in conformity with GAAP.  Borrower does not know of any proposed, asserted, or
assessed tax deficiency against it or any of its Subsidiaries that, if such
deficiency existed and had to be rectified, reasonably could be expected to have
a Material Adverse Effect on Borrower or any of its Subsidiaries.
 
 
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4.10           Governmental Regulation.
 
(a)           Borrower and its Subsidiaries are not, nor immediately after the
application by Borrower of the proceeds of the Loans will they be, subject to
regulation under the Investment Company Act of 1940, as amended, or an exemption
to such regulation is available.
 
(b)           Borrower and each of its Subsidiaries, is, to the extent required
thereby, duly registered as an investment adviser under the Investment Advisers
Act of 1940, as amended (the “Investment Advisers Act”).  Each of Borrower and
each of its Subsidiaries is, to the extent that any such Person is required to
be registered as an “investment company” under the Investment Company Act, duly
registered as such thereunder or properly exempt.
 
(c)           Borrower is not required to be duly registered as a broker-dealer
under applicable law.  Each Subsidiary of Borrower that is required to be so
registered is so duly registered and is a member of a self-regulatory
organization, such as FINRA or is properly registered with any other
Governmental Authority under applicable law.
 
(d)           Each Subsidiary of Borrower registered as a broker-dealer has not
exceeded the business activities enumerated in any applicable restriction or
membership agreement or other limitations imposed in connection with its
regulations with any Governmental Authority, including the FINRA, and such
registration, membership and membership agreement does not limit its ability to
enter into the Loan Documents to which it is a party.
 
(e)           Borrower and each of its Subsidiaries and each of their respective
members, partners, officers and directors, as the case may be, is duly
registered, licensed or qualified as an investment adviser, broker-dealer
representative, or agent in each State of the United States where the conduct of
its business requires the registration, licensing, qualification or membership
and is in compliance in all material respects with applicable laws requiring
such registration, licensing, qualification or membership.
 
(f)           None of Borrower or any Guarantor is subject to regulation under
the Federal Power Act, the Interstate Commerce Act, or any federal, state, or
local law, rule, or regulation generally limiting its ability to incur Debt.
 
4.11           Disclosure.   No representation or warranty of Borrower or any
Guarantor contained in this Agreement or any other document, certificate, or
written statement furnished to Lender by or on behalf of Borrower with respect
to the business, operations, Assets, or condition (financial or otherwise) of
Borrower and the Guarantors for use solely in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not materially misleading.  There is no fact actually known to Borrower
(other than matters of a general economic nature) that Borrower believes
reasonably could be expected to have a Material Adverse Effect on Borrower or
any Guarantor, that has not been disclosed herein or in such other documents,
certificates, and statements furnished to Lender for use in connection with the
transactions contemplated hereby.  All financial projections represent, as of
the date on which any other such financial projections are delivered to Lender,
Borrower’s good faith best estimate of its and its Subsidiaries future
performance for the periods covered thereby.
 
 
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4.12           Debt.  Neither Borrower nor any of its Subsidiaries has any Debt
outstanding other than Debt permitted by Section 6.1 hereof.
 
4.13           Existing Defaults.  Neither Borrower nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, contained in any Contractual Obligation applicable to it, and no
condition exists which, with or without the giving of notice or the lapse of
time, would constitute a default under such Contractual Obligation, except, in
any such case, where the consequences, direct or indirect, of such default or
defaults, if any, reasonably could not be expected to have a Material Adverse
Effect on Borrower or any of its Subsidiaries.  Neither Borrower nor any of its
Subsidiaries is in violation of any law, ordinance, rule, or regulation to which
it or any of its Assets is subject, the failure to comply with which could
reasonably be expected to have a Material Adverse Effect on Borrower or any of
its Subsidiaries.
 
4.14           No Default.  No Event of Default or Unmatured Event of Default
has occurred and is continuing.
 
4.15           Immaterial Subsidiaries.  Alternative Capital Services LLC, a
Delaware limited liability company, is the only Immaterial Subsidiary.
 
4.16           Excluded Subsidiaries. The Disclosure Statement sets forth the
Excluded Subsidiaries as of the Closing Date.
 
ARTICLE V
 
AFFIRMATIVE COVENANTS OF BORROWER
 
Borrower covenants and agrees that, so long as any portion of the Revolving
Credit Facility Commitment under this Agreement shall be in effect and until
payment, in full, of the Loans, with interest accrued and unpaid thereon, any
other Obligations (including Obligations in respect of Letters of Credit and
Bank Product Obligations) and any other amounts due hereunder, and except as set
forth in the Disclosure Statement with specific reference to the Section of this
Article V affected thereby concerning matters which do not conform to the
covenants of this Article V, Borrower will, and will cause each of its
Subsidiaries to do each and all of the following:
 
5.1           Accounting Records and Inspection.  (a) Maintain adequate
financial and accounting books and records in accordance with sound business
practices and GAAP consistently applied, (b) permit any representative of Lender
upon reasonable notice to Borrower, at any time during usual business hours, to
inspect, audit, and examine such books and records and to make copies and take
extracts therefrom, and to discuss its affairs, financing, and accounts with
Borrower’s or the applicable Subsidiary’s officers and independent public
accountants, and (c) furnish Lender with any information reasonably requested by
Lender regarding Borrower’s or its Subsidiaries’ business or finances promptly
upon request.
 
 
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5.2           Financial Statements and Other Information.  Furnish to Lender:
 
(a)           Within 120 days after the end of each fiscal year of Borrower, an
annual report containing a statement of assets, liabilities, and capital of JMPG
and its Subsidiaries as of the end of such fiscal year, and statements of
operations and cash flows of JMPG and its Subsidiaries, for the year then ended,
all of which shall be accompanied by a report and an unqualified opinion,
prepared in accordance with generally accepted auditing standards, of
independent certified public accountants of recognized standing selected by
Borrower and satisfactory to Lender (which opinion shall be without (i) a “going
concern” or like qualification or exception, (ii) any qualification or exception
as to the scope of such audit, or (iii) any qualification which relates to the
treatment or classification of any item and which, as a condition to the removal
of such qualification, would require an adjustment to such item, the effect of
which would be to cause any noncompliance with the provisions of Section 6.14),
together with a written statement of such accountants (1) to the effect that, in
making the examination necessary for their audit of such financial statements,
they have not obtained any knowledge of the existence of an Event of Default
under Section 6.14 and (2) if such accountants shall have obtained any knowledge
of the existence of an Event of Default under Section 6.14, describing the
nature thereof;
 
(b)           Within 45 days after the end of each of the first three quarters
of each fiscal year of Borrower, a Borrower-prepared financial report containing
a statement of assets, liabilities, and capital, and statements of operations
and cash flows of JMPG and its Subsidiaries, in each case for the period then
ended;
 
(c)           Within 45 days after the end of each quarter of each fiscal year
of Borrower, a Compliance Certificate duly executed by the chief financial
officer of Borrower listing any new Subsidiaries formed or acquired by Borrower
from and after the date of the prior Compliance Certificate if Borrower elects
to designate such Subsidiaries as Excluded Subsidiaries, and stating that he or
she has individually reviewed the provisions of this Agreement and the other
Loan Documents, that (i) the financial statements delivered hereunder have been
prepared in accordance with GAAP (except for the lack of footnotes and being
subject to year-end audit adjustments) and fairly present in all material
respects the financial condition of Borrower and its Subsidiaries, (ii) JMPG and
its Subsidiaries are in compliance with the financial covenants set forth in
Section 6.14 and attaching the calculations of such financial covenants as of
the end of such fiscal quarter, (iii) a review of the activities of Borrower and
its Subsidiaries during such year or quarterly period, as the case may be, has
been made by or under such individual’s supervision, with a view to determining
whether Borrower and such Subsidiaries have fulfilled all of its obligations
under this Agreement, and the other Loan Documents, that no Event of Default or
Unmatured Event of Default has occurred and is continuing, or if an Event of
Default or Unmatured Event of Default has so occurred and is continuing,
specifying all such defaults and events of which such individual may have
knowledge or belief, and (iv) Borrower has negotiated all transactions described
in Section 6.8, other than transactions in deminimis amounts, in good faith and
on an arm’s length basis;
 
(d)           if not otherwise provided pursuant to clause (a) or (b), above, as
applicable, then, contemporaneously with each quarterly and year-end financial
report required by clauses (a) and (b) of this Section 5.2, a certificate of the
chief financial officer of Borrower separately identifying and describing all
Contingent Obligations of Borrower and its Subsidiaries that could reasonably be
expected to result in payments (individually or in the aggregate) of greater
than $5,000,000;
 
 
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(e)           notice, as soon as possible and, in any event, within 5 days after
Borrower has knowledge, of the occurrence of any Event of Default or any
Unmatured Event of Default.  In any such event, Borrower also shall supply
Lender with a statement from Borrower’s chief financial officer or general
counsel setting forth the details thereof and the action that Borrower proposes
to take with respect thereto;
 
(f)           as soon as practicable, any written report pertaining to material
items in respect of Borrower’s and its Subsidiaries’ internal control matters
submitted to Borrower or such Subsidiary by its independent accountants in
connection with each annual audit of the financial condition of Borrower and its
Subsidiaries;
 
(g)           as soon as practicable, written notice of any condition or event
which has resulted or reasonably could be expected to result in: (i) a Material
Adverse Effect on Borrower or any of its Subsidiaries; or (ii) a material breach
of, or noncompliance with, any material term, condition, or covenant of any
Contractual Obligation of Borrower or any of its Subsidiaries, if such breach or
noncompliance could reasonably be expected to result in a Material Adverse
Effect;
 
(h) promptly upon becoming aware of any Person’s seeking to obtain or
threatening in writing to seek to obtain a decree or order for relief with
respect to Borrower or any of its Subsidiaries in an involuntary case under any
applicable bankruptcy, insolvency, or other similar law now or hereafter in
effect, a written notice thereof specifying what action Borrower is taking or
proposes to take with respect thereto;
 
(i)           promptly, copies of all material amendments to the Governing
Documents of Borrower or any of its Subsidiaries;
 
(j)           prompt notice of:
 
(i)           all legal or arbitral proceedings, and all proceedings by or
before any governmental or regulatory authority or agency, against or, to the
knowledge of Borrower, threatened in writing against or affecting Borrower or
any of its Subsidiaries which, if adversely determined, reasonably could be
expected to have a Material Adverse Effect on Borrower or any of its
Subsidiaries, or on the timely payment of the principal of or interest on the
Loans, or the enforceability of this Agreement or the other Loan Documents, or
the rights and remedies of Lender hereunder or thereunder, as applicable; and
 
(ii)           the issuance by any United States of America federal or state
court or any United States of America federal or state regulatory authority of
any injunction, order, or other restraint prohibiting, or having the effect of
prohibiting or delaying, the making of the Loans, or the institution of any
litigation or similar proceeding seeking any such injunction, order, or other
restraint;

(k)           upon request by Lender and, within 5 Business Days after the
filing thereof, upon the occurrence and during the continuation of an Event of
Default or Unmatured Event of Default, copies of Focus Reports for JMP
Securities and each of its Subsidiaries;
 
 
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(l)           promptly, such other information and data with respect to Borrower
or any of its Subsidiaries, as from time to time may be reasonably requested by
Lender.
 
5.3           Existence.  Preserve and keep in full force and effect, at all
times, its existence.
 
5.4           Payment of Taxes and Claims.  Pay all Taxes, assessments, and
other governmental charges imposed upon it or any of its Assets or in respect of
any of its businesses, incomes, or Assets before any penalty or interest accrues
thereon, and all claims (including claims for labor, services, materials, and
supplies) for sums which have become due and payable and which by law have or
may become a Lien upon any of its Assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; provided, however, that, other than
with respect to Taxes, assessments, charges or claims which have become secured
by a tax Lien  upon any of Borrower’s or any of its Subsidiaries’ Assets, no
such Tax, assessment, charge, or claim need be paid if the same is being
contested, in good faith, by appropriate proceedings promptly instituted and
diligently conducted and if an adequate reserve or other appropriate provision,
if any, shall have been made there for as required in order to be in conformity
with GAAP.
 
5.5           Compliance with Laws.  Comply in all material respects with the
requirements of all applicable laws, rules, regulations (including Regulations
T, U and X of the Federal Reserve Board), and orders of any governmental
authority, noncompliance with which could reasonably be expected to have a
Material Adverse Effect on Borrower or any of its Subsidiaries.
 
5.6           Further Assurances.  At any time or from time to time upon the
request of Lender, execute and deliver such further documents and do such other
acts and things as Lender may reasonably request in order to effect fully the
purposes of this Agreement or the other Loan Documents and to provide for
payment of the Loans made hereunder, with interest thereon, in accordance with
the terms of this Agreement.
 
5.7           Formation of Subsidiaries.
 
(a)           At the time that (x) Borrower or any Guarantor forms any
Subsidiary or acquires any Subsidiary after the Closing Date (in each case other
than an Immaterial Subsidiary or any Excluded Subsidiary, as determined by
Section 5.7(b)), or (y) any Subsidiary of Borrower or any Guarantor that is not
a Guarantor is no longer an Immaterial Subsidiary or an Excluded Subsidiary, (a)
cause such new Subsidiary (or former Immaterial Subsidiary or an Excluded
Subsidiary) to provide to Lender a Guaranty and a Security Agreement, a joinder
to the Intercompany Subordination Agreement and the Stock Pledge Agreement,
together with such other security documents, as well as appropriate UCC-1
financing statements, all in form and substance satisfactory to Lender
(including being sufficient to grant Lender a first priority Lien (subject to
Permitted Liens) in and to the assets of such newly formed or acquired
Subsidiary (or former Immaterial Subsidiary or Excluded Subsidiary)), (b)
provide to Lender a pledge agreement or a supplement to an existing Stock Pledge
Agreement and appropriate certificates and powers or UCC-1 financing statements,
hypothecating all of the direct or beneficial ownership interest of Borrower or
a Guarantor in such new Subsidiary (or former Immaterial Subsidiary or Excluded
Subsidiary), in form and substance satisfactory to Lender, (c) if such
Subsidiary is a limited liability company or limited partnership formed under
the laws of Delaware, include in the limited liability company agreement,
limited partnership agreement, or other similar Governing Documents language
substantively similar to the provisions of Sections 7(e) and 7(f) of the Stock
Pledge Agreement, and (d) provide to Lender all other documentation, including
one or more opinions of counsel satisfactory to Lender, which in its opinion is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above.  Any document, agreement, or instrument
executed or issued pursuant to this Section 5.7 shall be a Loan Document.  The
foregoing to the contrary notwithstanding, such new Subsidiary shall not be
required to execute and deliver a Guaranty or a Security Agreement or a joinder
to the Stock Pledge Agreement, and neither Borrower nor any Guarantor, as
applicable, shall be required to pledge more than 66% of the voting stock of
such Subsidiary to the extent that (x) such Subsidiary is a Foreign Subsidiary,
and (y) Borrower would incur material adverse tax consequences therefrom;
provided, however, that if such Subsidiary is a Foreign Subsidiary, Borrower or
such Guarantor, as applicable, must deliver such documents as required by this
Section 5.7 within sixty (60) days of the date such entity was deemed to be a
Subsidiary.
 
 
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(b)   Within 30 days after the date when Borrower delivers a Compliance
Certificate to Lender in accordance with Section 5.2(c) that lists one or more
Subsidiaries that Borrower elects to be designated as an Excluded Subsidiary
(“Response Period”), Lender shall have the right to (i) deliver a notice to
Borrower indicating that Lender accepts  Borrower’s proposal to designate such
Subsidiary as an Excluded Subsidiary or (ii) deliver a notice to Borrower
indicating that Lender objects to Borrower’s proposal to designate such
Subsidiary as an Excluded Subsidiary. If Lender accepts such proposal within the
Response Period or fails to respond to Borrower’s proposal within the Response
Period, such Subsidiary shall be deemed to constitute an Excluded Subsidiary
from and after the date of formation until such time such Subsidiary is no
longer an Excluded Subsidiary. If Lender objects to Borrower’s proposal within
the Response Period, such Subsidiary shall be deemed an Exclusive Subsidiary
from and after the date of formation until thirty (30) days after the date when
Borrower receives a written notice indicating that Lender objects to Borrower’s
proposal and, thereafter, such Subsidiary shall no longer be an Excluded
Subsidiary and Borrower and such Subsidiary shall comply with Section 5.7(a)
above.
 
5.8           Post-Closing Conditions.
 
(a)           Deliver to Lender on or before the date that is fifteen (15)
Business Days after the Term Loan B Closing Date, copies of the management
contracts to which the CLO Entity is a party, duly executed by the parties
thereto, which shall be in form and substance substantially similar to the draft
of the management contracts delivered to Lender on or before the Term Loan B
Closing Date; and
 
(b)           Deliver to Lender on or before the date that is fifteen (15)
Business Days after the Term Loan B Closing Date (or such later date as Agent
may agree to in its reasonable discretion), a copy of the CLO Indenture, duly
executed by the parties thereto, in form and substance substantially similar to
the draft of the CLO Indenture delivered to Lender on or before the Term Loan B
Closing Date.
 
 
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ARTICLE VI
 
NEGATIVE COVENANTS OF BORROWER
 
Borrower covenants and agrees that, so long as any portion of the Revolving
Credit Facility Commitment under this Agreement shall be in effect and until
payment, in full, of the Loans, with interest accrued and unpaid thereon, any
other Obligations (including Obligations in respect of Letters of Credit and
Bank Product Obligations) and any other amounts due hereunder, and any other
amounts due hereunder, and except as set forth in the Disclosure Statement with
specific reference to the Section of this Article VI affected thereby concerning
matters which do not conform to the covenants of this Article VI, Borrower will
not, and will not permit any of its Subsidiaries to do any of the following:
 
6.1           Debt.  Create, incur, assume, permit, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any Debt,
except:
 
(a)           the Obligations and any other Debt evidenced by this Agreement and
the other Loan Documents;
 
(b)           Capitalized Lease Obligations incurred in the ordinary course of
business, in an aggregate outstanding amount not in excess of $250,000 at any
one time;
 
(c)           Contingent Obligations resulting from the endorsement of
instruments for collection in the ordinary course of business;
 
(d)           Permitted Acquired Indebtedness;
 
(e)           Debt in respect of Earnout Arrangements and Seller Notes incurred
in connection with a Permitted Acquisition;
 
(f)           Debt consisting of loans or advances from time to time made by
Borrower to JMP Securities in an aggregate outstanding amount at any one time
not to exceed $5,000,000;
 
(g)           Debt incurred by JMP Securities and owed to Lender consisting of
loans or advances from time to time made in connection with underwriting
advances or lines of credit that are subject to the applicable FINRA form, that
are advanced to JMP Securities to permit it to meet its net capital requirements
under applicable FINRA rules or under SEC Rule 15c3-1, so long as (y) no Event
of Default or Unmatured Event of Default has occurred and is continuing at the
time that such Debt is proposed to be incurred or would result therefrom and (z)
no more than $15,000,000 of such loans is funded from the direct or indirect
proceeds of a Borrowing under this Agreement;
 
(h)           Debt of the CLO Entity;
 
(i)           Advances by Borrower or any of its Subsidiaries to Borrower, any
Subsidiary, any Affiliate or an Excluded Fund for the purpose of funding
overhead and other operating expenses, so long as (x) the aggregate amount of
such advances made by a Loan Party during any fiscal year of Borrower does not
exceed $1,000,000 and (y) no Event of Default or Unmatured Event of Default has
occurred and is continuing at the time that such Debt is proposed to be incurred
or would result therefrom;
 
(j)           Intercompany Debt advanced by an Obligor to a domestic Obligor, so
long as such domestic Obligor is party to the Intercompany Subordination
Agreement;
 
 
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(k)           Guarantees by Borrower of any Debt of a Guarantor otherwise
permitted hereunder and guarantees by any Guarantor of any Debt of Borrower or
another Guarantor otherwise permitted hereby (in each case, other than Permitted
Acquired Indebtedness);
 
(l)           Reimbursement obligations in respect of letters of credit issued
after the Final Revolving Commitment Termination Date, to the extent that Lender
elects not to issue such letters of credit under this Agreement (it being
understood that if Lender does not notify Borrower that it has elected to issue
such letters of credit under this Agreement within four  (4) Business Days after
the date when Lender receives a written request therefor from Borrower, Lender
shall be deemed to have elected not to issue the requested letter of credit);
 
(m)           any Refinancing Debt in respect of any Debt identified on the
Disclosure Statement with respect to this Section 6.1, or Debt described above
in clauses (b), (d) or (l);
 
(n)           Debt incurred by JMPCC and payable to JMPG in an aggregate
principal amount of $10,000,000;
 
(o)           Debt incurred pursuant to the Newco Credit Facility; and
 
(p)           a credit facility with commitments or loans (excluding any loans
made pursuant to the Newco Credit Facility) that is extended to Newco;
providedthat, if such Debt results in proceeds of at least $75,000,000, Borrower
or the applicable Subsidiary complies with the prepayment requirements set forth
in Section 2.8(d).
 
6.2           Liens.
 
(a) Create, incur, assume, or permit to exist, directly or indirectly, any Lien
on or with respect to any of its Assets, of any kind, whether now owned or
hereafter acquired, or any income or profits therefrom, except Permitted Liens,
or
 
(b)           enter into, assume, or permit to exist any agreement to refrain
from granting Liens to or for the benefit of Lender, other than such agreements
by JMP Securities;
 
6.3           Investments.  Make or own, directly or indirectly, any Investment
in any Person, except Permitted Investments; provided, however, that the
Obligors shall not have Permitted Investments in Deposit Accounts or Securities
Accounts (other than such Deposit Accounts or Securities Accounts maintained
with Lender) in an aggregate amount in excess of $250,000 at any one time unless
the applicable Obligor and the applicable securities intermediary or bank have
entered into Control Agreements governing such Permitted Investments in order to
perfect (and further establish) the Lender’s Liens in such Permitted
Investments.
 
6.4           [Intentionally Omitted].
 
 
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6.5           Dividends.  If an Event of Default or Unmatured Event of Default
has occurred and is continuing or would result from any of the following, make
or declare, directly or indirectly, any dividend (in cash, return of capital, or
any other form of Assets) on, or make any other payment or distribution on
account of, or set aside Assets for a sinking or other similar fund for the
purchase, redemption, or retirement of, or redeem, purchase, retire, or
otherwise acquire any interest of any class in Borrower, whether now or
hereafter outstanding, or grant or issue any warrant, right, or option
pertaining thereto, or other security convertible into any of the foregoing, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or Assets or in obligations (collectively, a “Distribution”);
provided that, at all times, (a) any direct or indirect Subsidiary may make such
a Distribution to any Guarantor or to Borrower; (b) any Subsidiary of Borrower
that is or intends to be a Real Estate Investment Trust, a Business Development
Company or any other entity whose tax treatment is dependent on distributions of
income can make such Distributions that are necessary to enable such Subsidiary
to maintain such tax treatment; (c) Borrower may make payments to JMPG in
accordance with the terms of the Services Agreement, dated August 18, 2004,
between Borrower and JMPG, and any renewals thereof, in an aggregate amount
during any fiscal year of Borrower not to exceed $500,000; (d) in no event will
Borrower be permitted to redeem, repurchase or otherwise acquire its outstanding
Securities (i) if an Event of Default or Unmatured Event of Default has occurred
and is continuing or would result therefrom, or (ii) to the extent that the
aggregate amount paid by Borrower in connection with all such redemptions,
repurchases or other acquisitions of its Securities (after giving effect to the
proposed redemption, repurchase or other acquisition) would exceed $5,000,000;
and (e) Newco and its Subsidiaries may issue dividends and distributions as
permitted under the Newco Credit Facility.
 
6.6           Restriction on Fundamental Changes.  Change its name, change the
nature of its business from that conducted by the Loan Parties on the date of
this Agreement (and other ancillary businesses reasonably related thereto),
enter into any merger, consolidation, reorganization, or recapitalization, or
reclassify its partnership interests (whether limited or general) or membership
interests, as applicable, or convey, sell, assign, lease, transfer, or otherwise
dispose of, in one transaction or a series of transactions, all or any
substantial part of its business or Assets, whether now owned or hereafter
acquired except:
 
(a)           Borrower or any of its Subsidiaries may sell Assets in accordance
with the provisions of Section 6.7 hereof;
 
(b)           [Intentionally omitted.]
 
(c)           Borrower or any of its Subsidiaries may offer or sell its
membership interests to its employees so long as the aggregate voting power of
the membership interests purchased by such employees does not exceed 49% of the
aggregate voting power of the membership interests of each of Borrower or any of
its Subsidiaries, as applicable;
 
(d)           upon 10 days prior written notice to Lender, Borrower or any its
Subsidiaries may change its name;
 
(e)           Any Subsidiary of Borrower may merge into another Subsidiary, any
Subsidiary may merge with a Guarantor, as long as the Guarantor is the surviving
entity and Borrower and JMP Holdings, Inc. may merge, so long as (x) a Change of
Control Event does not result therefrom and (y) the survivor thereof assumes
Borrower’s obligations under the Loan Documents and agrees to be bound hereby
and thereby;
 
(f)           Any Guarantor or JMP Securities may enter into a recapitalization
with respect to its membership interests or Securities, so long as Borrower
remains the managing member of such Subsidiary and holds a majority of the
voting interest in such Subsidiary; and
 
 
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 (g)           Newco and its Subsidiaries may issue and sell membership
interests in connection with equity transactions.
 
6.7           Sale of Assets.  Sell, assign, transfer, convey, or otherwise
dispose of all or any part of its Assets, whether now owned or hereafter
acquired, except for:
 
(a)           the sale or other disposition of any of the businesses or Assets
of Borrower or any of its Subsidiaries in the ordinary course of business, for
not less than the fair value thereof, to the extent that the fair market value
of the foregoing does not exceed $5,000,000 in the aggregate in any fiscal year
(other than sales and dispositions of  Investments by JMP Securities in publicly
traded securities in the ordinary course of business);
 
(b)           involuntary sales or other dispositions of any of the businesses
or Assets of Borrower or any of its Subsidiaries;
 
(c)           dispositions of Cash Equivalents for not less than the fair market
value thereof;
 
(d)           dispositions by any Subsidiary to another Subsidiary, Borrower or
a Guarantor, dispositions by Borrower to a Guarantor organized under the laws of
a state within the United States and dispositions by a Guarantor to Borrower;
and
 
(e)           dispositions of Assets and membership interests or other equity of
Newco or its Subsidiaries in the ordinary course of business.
 
6.8           Transactions with Shareholders and Affiliates.  Enter into or
permit to exist, directly or indirectly, any transaction (including the
purchase, sale, lease, or exchange of any Asset or the rendering of any service)
with any holder of 5% or more of any class of equity interests of Borrower or
any of its Subsidiaries or Affiliates, or with any Affiliate of Borrower or of
any such holder, on terms that are less favorable to Borrower than those terms
that might be obtained at the time from Persons who are not such a holder,
Subsidiary, or Affiliate, or if such transaction is not one in which terms could
be obtained from such other Person on terms that are not negotiated in good
faith on an arm’s length basis.
 
6.9           Conduct of Business.  Engage in any business other than the
businesses in which it is permitted to conduct under its Governing Documents, or
any businesses or activities substantially similar or related thereto.
 
6.10           Amendments or Waivers of Certain Documents; Actions Requiring the
Consent of Lender.  Without the prior written consent of Lender which consent
shall not unreasonably be withheld, agree to any amendment to or waiver of the
terms or provisions of its Governing Documents except for: (i) immaterial
amendments or waivers permitted by such Governing Documents not requiring the
consent of the holders of the Securities in Borrower or the applicable
Subsidiary, as applicable; (ii) amendments or waivers which would not, either
individually or collectively, be materially adverse to the interests of Lender,
Borrower or the applicable Subsidiary; or (iii) amendments required to permit
the consummation of a transaction permitted by Section 6.6.
 
 
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6.11           Use of Proceeds.  Use the proceeds of (i) the Initial Term Loan
and up to $5,000,000 of any Revolving Loans made hereunder for any purpose other
than, consistent with the terms and conditions hereof, to fund Permitted
Investments, to fund Permitted Acquisitions and to fund Borrower’s working
capital needs in the ordinary course of its business, (ii) all other Revolving
Loans made hereunder for any purpose other than by Borrower to make Investments
in Harvest and by Harvest to make Investments in loans that are made to Persons
that are not Affiliates of Borrower and (iii) the Term Loan B made hereunder for
any purpose other than, consistent with the terms and conditions hereof, by
Borrower to make equity investments in the CLO Entity and by the CLO Entity to
make Permitted Investments in collateralized loan obligations.
 
6.12           Misrepresentations.  Furnish Lender any certificate or other
document required hereunder that: (a) contains any untrue statement of material
fact; or (b) omits to state a fact necessary to make it not materially
misleading in light of the circumstances under which it was furnished.
 
6.13           Margin Regulation.  Use any portion of the proceeds of any of the
Loans in any manner which might cause the Borrowing, the application of such
proceeds, or the transactions contemplated by this Agreement to violate
Regulations T, U or X of the Federal Reserve Board, or any other regulation of
such board, or to violate the Exchange Act, or to violate the Investment Company
Act of 1940.
 
6.14           Financial Covenants.
 
(a)           Fixed Charge Coverage Ratio.  Fail to maintain for of JMPG and its
Subsidiaries a Fixed Charge Coverage Ratio, measured as of the last day of each
fiscal quarter of JMPG during such period, for each twelve month period ending
on any such date, of at least 1.25:1.00.
 
(b)           [Intentionally Omitted].
 
(c)           Minimum Net Worth.  Fail to maintain Net Worth for JMPG and its
Subsidiaries, as of the last day of each fiscal quarter of  JMPG, of at least
$80,000,000.
 
(d)           Minimum Interest Coverage Ratio.  Fail to maintain an Interest
Coverage Ratio for JMPG and its Subsidiaries, measured as of the last day of
each fiscal quarter of JMPG  during such period, for each twelve month period
ending on any such date, of at least 2.00:1.00.
 
(e)           Minimum Liquidity.  Fail to maintain Liquidity for Loan Parties
and their Subsidiaries at all times of at least an amount equal to the sum of
(i) the principal amount of all outstanding Loans, plus (ii) the Letter of
Credit Usage, plus (iii) $20,000,000.
 
 
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ARTICLE VII
 
EVENTS OF DEFAULT AND REMEDIES

7.1           Events of Default.  The occurrence of any one or more of the
following events, acts, or occurrences shall constitute an event of default
(“Event of Default”) hereunder:
 
(a)           Failure to Make Payments When Due.  Borrower shall fail to pay any
amount owing hereunder with respect to the principal of any of the Loans or
Obligations in respect of Letters of Credit when such amount is due or Borrower
shall fail to pay any amount owing hereunder with respect to, interest on any of
the Loans, or with respect to any other Obligations or other amounts (including
fees, costs, or expenses) payable in connection herewith or the other Loan
Documents, within three (3) Business Days of the date when such amount is due,
whether at stated maturity, by acceleration, or otherwise;
 
(b)           Breach of Certain Covenants.
 
(i)           Borrower shall fail to perform or comply fully with any covenant,
term, or condition contained in Sections 5.1(b) or 5.8 or Article VI; or
 
(ii)           Borrower shall fail to perform or comply fully with any covenant,
term, or condition contained in Sections 5.1(a), 5.2(a), (b), (c), (d), (e),
(f), or 5.4 (except with respect to unpaid Taxes in an aggregate amount less
than $25,000), of this Agreement and such failure shall not have been remedied
or waived within 10 days after the occurrence thereof;
 
(iii)           Borrower shall fail to perform or comply fully with any
covenant, term, or condition contained in Sections 5.1(c), 5.6 or 5.7 of this
Agreement and such failure shall not have been remedied or waived within 20 days
after the occurrence thereof (except with respect to any Foreign Subsidiary in
connection with Section 5.7, in which case such cure period shall be 30 days);
 
(iv) Borrower shall fail to perform or comply fully with any covenant, term, or
condition contained in Section 5.4 (with respect to unpaid Taxes in an aggregate
amount less than $25,000) of this Agreement and such failure shall not have been
remedied or waived within 30 days after the occurrence thereof
 
(v) Borrower or any Guarantor shall fail to perform or comply fully with any
other covenant, term, or condition contained in this Agreement or other Loan
Documents (other than any Bank Product Agreement with respect to Credit Card
Services), to which it is a party and such failure shall not have been remedied
or waived within 45 days after the occurrence thereof; provided, however, that
this clause (iv) shall not apply to: (1) the covenants, terms, or conditions
referred to in any other subsections of this Section 7.1; or (2) the covenants,
terms, or conditions referred to in clauses (i), (ii), (iii) or (iv) above of
this subsection (b);
 
(c)           Breach of Representation or Warranty.  Any financial statement,
representation, warranty, or certification made or furnished by Borrower under
this Agreement or in any statement, document, letter, or other writing or
instrument furnished or delivered by or on behalf of Borrower or any Guarantor
to Lender pursuant to or in connection with this Agreement or any other Loan
Document to which it is a party, or as an inducement to Lender to enter into
this Agreement or any other Loan Document shall have been false, incorrect, or
incomplete when made, effective, or reaffirmed, as the case may be in any
material respect (except that such materiality qualifier shall not be applicable
to any representations and warranties that already are qualified or modified by
materiality in the text thereof);
 
 
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(d)           Involuntary Bankruptcy.
 
(i)           If an Insolvency Proceeding is commenced against Borrower or any
of its Subsidiaries under any other applicable law and any of the following
events occur:  (1) such Person consents to the institution of such Insolvency
Proceeding against it; (2) the petition commencing the Insolvency Proceeding is
not timely controverted; (3) the petition commencing the Insolvency Proceeding
is not dismissed within 45 days of the date of the filing thereof; provided,
however, that, during the pendency of such period, Lender shall be relieved of
its obligation to make additional Loans; (4) an interim trustee is appointed to
take possession of all or a substantial portion of the Assets of Borrower or any
of its Subsidiaries; or (5) an order for relief shall have been issued or
entered therein;
 
(ii)           A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, custodian, trustee,
or other officer having similar powers over Borrower or any of its Subsidiaries
to take possession of all or a substantial portion of its Assets shall have been
entered and, within 45 days from the date of entry, is not vacated, discharged,
or bonded against, provided, however, that, during the pendency of such period,
Lender shall be relieved of their obligation to make additional Loans;
 
(e)           Voluntary Bankruptcy.  Borrower or any of its Subsidiaries shall
institute an Insolvency Proceeding; Borrower or any of its Subsidiaries shall
file a petition, answer, or complaint or shall otherwise institute any similar
proceeding under any other applicable law, or shall consent thereto; Borrower or
any of its Subsidiaries shall consent to the conversion of an involuntary case
to a voluntary case; or Borrower or any of its Subsidiaries shall consent or
acquiesce to the appointment of a receiver, liquidator, sequestrator, custodian,
trustee, or other officer with similar powers to take possession of all or a
substantial portion of its Assets; Borrower or any of its Subsidiaries shall
generally fail to pay debts as such debts become due or shall admit in writing
its inability to pay its debts generally; or Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of creditors;
 
(f)           Dissolution.  Any order, judgment, or decree shall be entered
decreeing the dissolution of Borrower, any Guarantor or JMP Securities, and such
order shall remain undischarged or unstayed for a period in excess of 45 days;
 
 (g)           Change of Control.  A Change of Control Event shall occur;
 
(h)           Judgments and Attachments.  Borrower or any of its Subsidiaries
shall suffer any money judgment, writ, or warrant of attachment, or similar
process involving payment of money in an amount in excess of $250,000 (except to
the extent payment in full above any applicable deductible is fully covered by
insurance (so long as no reservation of rights has been made by the insurer in
connection with such coverage)), and shall not discharge, vacate, bond, or stay
the same within a period of 45 days;
 
 
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(i)           Cross-Default.  There is a default in any agreement to which
Borrower or any of its Subsidiaries is a party and such default (a) involves
amounts in excess of $250,000 and (b) either (i) occurs at the final maturity of
the obligations thereunder, or (ii) results in a right by the other party
thereto, irrespective of whether exercised, to accelerate the maturity of such
Borrower’s or such Subsidiaries’ obligations thereunder or to terminate such
agreement, unless such right is waived in writing by such other party;
 
(j)           If the obligation of any Guarantor under the Guaranty is limited
or terminated by operation of law or by any Guarantor thereunder;
 
(k)           [Intentionally Omitted.]
 
(l)           [Intentionally Omitted.]
 
(m)           If Borrower or any of its Subsidiaries makes any payment on
account of Debt that has been contractually subordinated in right of payment to
the payment of the Obligations and any other Debt evidenced by this Agreement or
any other Loan Document, except to the extent such payment is permitted by the
terms of the subordination provisions applicable to such Debt;
 
(n)           If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Assets covered hereby or
thereby;
 
(o)           Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by Borrower or any Guarantor, or a proceeding shall
be commenced by Borrower or any Guarantor, or by any Governmental Authority
having jurisdiction over Borrower or any Guarantor, seeking to establish the
invalidity or unenforceability thereof, or Borrower or any Guarantor shall deny
that Borrower or any Guarantor has any liability or obligation purported to be
created under any Loan Document; or
 
(p)           If any loan under the Broker/Dealer Credit Facility remains
outstanding for more than 30 days.
 
7.2           Remedies.
 
  Upon the occurrence of an Event of Default:
 
(a)           If such Event of Default arises under subsections (d) or (e) of
Section 7.1 hereof, then the Revolving Credit Facility Commitment hereunder
immediately shall terminate and the unpaid principal amount of and any accrued
and unpaid interest on the Loans and any other amounts owing hereunder or under
the other Loan Documents automatically shall become immediately due and payable,
without presentment, demand, protest, notice, or other requirements of any kind,
all of which are hereby expressly waived by Borrower; and
 
(b)           In the case of any other Event of Default, Lender, by written
notice to Borrower, may declare the Revolving Credit Facility Commitment
hereunder terminated and the unpaid principal amount of and any accrued and
unpaid interest on the Loans and any other amounts owing hereunder or under the
Loan Documents to be, and the same immediately shall become due and payable,
without presentment, demand, protest, further notice, or other requirements of
any kind, all of which are hereby expressly waived by Borrower.
 
 
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Upon acceleration, Lender (without notice to or demand upon Borrower, which are
expressly waived by Borrower to the fullest extent permitted by law), shall be
entitled to proceed to protect, exercise, and enforce its rights and remedies
hereunder or under the other Loan Documents, or any other rights and remedies as
are provided by law or equity.  Lender may determine, in its sole discretion,
the order and manner in which Lender’s rights and remedies are to be
exercised.  All payments received by Lender shall be applied as follows
(regardless of how Lender may treat the payments for the purpose of its own
accounting): first, to all out-of-pocket costs and expenses (including
reasonable attorneys fees and expenses) actually incurred by Lender in enforcing
any Obligation of Borrower hereunder, or in collecting any payments due
hereunder or under the other Loan Documents, or which Borrower is required to
pay to Lender pursuant to Section 8.1 hereof, until paid in full; second, to any
fees then due to Lender under the Loan Documents until paid in full; third, to
any accrued and unpaid interest on the Loans, until paid in full; fourth,
ratably (i) to pay the principal of all Terms Loans owing to Lender in inverse
order of maturity until paid in full, (ii) to pay the principal of all Revolving
Loans owing to until paid in full, (iii) to be held by Lender as cash
collateral, until an amount up to 105% of the Letter of Credit Usage is so held,
and (iv) to pay all Bank Product Obligations; and fifth, to any other
Obligations, until paid in full.
 
ARTICLE VIII
 
EXPENSES AND INDEMNITIES
 
8.1           Expenses.  Irrespective of whether the transactions contemplated
hereby are consummated, Borrower agrees to pay on demand:  (a) all of Lender’s
actual out-of-pocket costs and expenses of preparation of any Loan Document
executed after the Closing Date, (b) the reasonable fees, expenses, and
disbursements of counsel to Lender in connection with the negotiation,
preparation, printing, reproduction, execution and delivery of any Loan Document
executed after the Closing Date, (c) the administration of this Agreement, the
other Loan Documents, and any waivers hereto or thereto, (d) filing, recording,
publication, and search fees paid or incurred by or on behalf of Lender in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, (e) all other actual out-of-pocket expenses incurred by Lender
in connection with the negotiation, preparation, and execution of any Loan
Document executed after the Closing Date, (f) the out-of-pocket costs and
expenses incurred by Lender, in connection with audits, inspections, and
appraisals contemplated by this Agreement and the other Loan Documents, and
(g) all costs and expenses (including reasonable attorneys fees and costs of
settlement) incurred by Lender in enforcing or collecting any Obligations of
Borrower or defending the Loan Documents (including reasonable attorneys fees
and expenses incurred in connection with a “workout,” a “restructuring,” or an
Insolvency Proceeding concerning Borrower or its Subsidiaries in exercising
rights or remedies under the Loan Documents), irrespective of whether suit is
brought; the foregoing to the contrary notwithstanding, in no event shall
Borrower be required to reimburse Lender for any costs or expenses incurred on
or before the Closing Date.
 
 
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8.2           Indemnity.  In addition to the payment of expenses pursuant to
Section 8.1 hereof, and irrespective of whether the transactions contemplated
hereby are consummated, Borrower agrees to indemnify, exonerate, defend, pay,
and hold harmless Lender, and any holder of any interest in this Agreement, and
the officers, directors, employees, and agents of and counsel to Lender and such
holders (collectively the “Indemnitees” and individually as “Indemnitee”) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, causes of action, judgments, suits, claims, costs, expenses, and
disbursements of any kind or nature whatsoever (including, the reasonable fees
and disbursements of counsel for such Indemnitees in connection with any
investigation, administrative, or judicial proceeding, whether such Indemnitee
shall be designated a party thereto), that may be imposed on, incurred by, or
asserted against such Indemnitee, in any manner relating to or arising out of
the Revolving Credit Facility Commitment, the use or intended use of the
proceeds of the Loans or the consummation of the transactions contemplated by
this Agreement, including any matter relating to or arising out of the filing or
recordation of any of the Loan Documents which filing or recordation is done
based upon information supplied by Borrower to Lender and its counsel (the
“Indemnified Liabilities”); provided, however, that Borrower shall have no
obligation hereunder with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of any such Indemnitee.  Each Indemnitee
will promptly notify Borrower of each event of which it has knowledge which may
give rise to a claim under the indemnification provisions of this Section
8.2.  If any investigative, judicial, or administrative proceeding arising from
any of the foregoing is brought against any Indemnitee indemnified or intended
to be indemnified pursuant to this Section 8.2, Borrower, will resist and defend
such action, suit, or proceeding or cause the same to be resisted and defended
by counsel designated by Borrower (which counsel shall be reasonably
satisfactory to the Indemnitee or intended Indemnitee).  Each Indemnitee will
use its reasonable efforts to cooperate in the defense of any such action, writ,
or proceeding.  To the extent that the undertaking to indemnify, pay, and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Borrower shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law.  The obligations of
Borrower under this Section 8.2 shall survive the termination of this Agreement
and the discharge of Borrower’s other obligations hereunder.
 
ARTICLE IX
 
MISCELLANEOUS
 
9.1           No Waivers, Remedies.  No failure or delay on the part of Lender,
or the holder of any interest in this Agreement in exercising any right, power,
privilege, or remedy under this Agreement or any of the other Loan Documents
shall impair or operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power, privilege, or remedy preclude any other or
further exercise thereof or the exercise of any other right, power, privilege,
or remedy.  The waiver of any such right, power, privilege, or remedy with
respect to particular facts and circumstances shall not be deemed to be a waiver
with respect to other facts and circumstances.  The remedies provided for under
this Agreement or the other Loan Documents are cumulative and are not exclusive
of any remedies that may be available to Lender, or the holder of any interest
in this Agreement at law, in equity, or otherwise.
 
 
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9.2           Waivers and Amendments.  No amendment, modification, restatement,
supplement, termination, or waiver of or to, or consent to any departure from,
any provision of this Agreement or the other Loan Documents, shall be effective
unless the same shall be in writing and signed by or on behalf of Lender and
Borrower.  Any waiver of any provision of this Agreement or the other Loan
Documents and any consent to any departure of Borrower from the terms of any
provisions of this Agreement or the Loan Documents shall be effective only in
the specific instance and for the specific purpose for which given.  In any
event, no notice to, or demand on, Borrower shall entitle Borrower to any other
or further notice or demand in similar or other circumstances.
 
9.3           Notices.  All notices, demands, instructions, requests, and other
communications required or permitted to be given to, or made upon, any party
hereto shall be in writing and (except for financial statements and other
related informational documents to be furnished pursuant hereto which may be
sent by first-class mail, postage prepaid) shall be personally delivered or sent
by registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as Borrower or
Lender, as applicable, may designate to each other in accordance herewith), or
telefacsimile and shall be deemed to be given for purposes of this Agreement on
the day that such writing is received by the Person to whom it is to be sent
pursuant to the provisions of this Agreement. Unless otherwise specified in a
notice sent or delivered in accordance with the foregoing provisions of this
Section 9.3, notices, demands, requests, instructions, and other communications
in writing shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective email addresses or telefacsimile
numbers) indicated on Exhibit 9.3 attached hereto.
 
9.4           Successors and Assigns.  This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns; provided, however, that (a) Borrower may not assign or transfer any
interest or rights hereunder without the prior written consent of Lender and any
such prohibited assignment or transfer shall be absolutely void, and (b) unless
an Event of Default has occurred and is continuing, Lender may not assign its
obligations hereunder without the prior written consent of Borrower, such
consent not to be unreasonably withheld, delayed or conditioned, except in
connection with (x) an assignment or transfer by Lender to an Affiliate of
Lender or (y) any merger, consolidation, sale, transfer, or other disposition of
all or any substantial portion of Lender’s business or loan portfolio.
 
9.5           Headings.  Article and section headings used in this Agreement and
the table of contents preceding this Agreement are for convenience of reference
only and shall neither constitute a part of this Agreement for any other purpose
nor affect the construction of this Agreement.
 
9.6           Execution in Counterparts; Effectiveness.  This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original and all of which, when taken together, shall constitute
but one and the same agreement.  Delivery of an executed counterpart of this
Agreement by telefacsimile or other electronic method of transmission shall be
equally as effective as delivery of an original executed counterpart of this
Agreement.  Any party delivering an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall deliver an
original executed counterpart of this Agreement, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.  The foregoing shall apply to each other Loan
Document mutatis mutandis.
 
 
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9.7           GOVERNING LAW.  EXCEPT AS SPECIFICALLY SET FORTH IN ANY OTHER LOAN
DOCUMENT: (A) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE DEEMED TO
HAVE BEEN MADE IN THE STATE OF CALIFORNIA; AND (B) THE VALIDITY OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF CALIFORNIA.
 
9.8           JURISDICTION AND VENUE.  TO THE EXTENT THEY MAY LEGALLY DO SO, THE
PARTIES HERETO AGREE THAT ALL ACTIONS, SUITS, OR PROCEEDINGS ARISING BETWEEN
LENDER, OR BORROWER IN CONNECTION WITH THIS AGREEMENT, THE REVOLVING CREDIT
FACILITY NOTE, OR THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA.   BORROWER AND LENDER, TO THE EXTENT THEY MAY LEGALLY DO SO, HEREBY
WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUMNON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 9.8 AND STIPULATE THAT THE STATE AND FEDERAL COURTS LOCATED IN THE
STATE OF CALIFORNIA SHALL HAVE INPERSONAM JURISDICTION AND VENUE OVER SUCH PARTY
FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE REVOLVING CREDIT FACILITY NOTE,
OR THE OTHER LOAN DOCUMENTS.  TO THE EXTENT PERMITTED BY LAW, SERVICE OF PROCESS
SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWER MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS
INDICATED ON EXHIBIT 9.3 ATTACHED HERETO.
 
9.9           WAIVER OF TRIAL BY JURY.  BORROWER AND LENDER, TO THE EXTENT THEY
MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR IN ANY WAY CONNECTED
WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH
RESPECT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE.  TO THE EXTENT THEY MAY LEGALLY DO SO, BORROWER AND LENDER HEREBY
AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL
BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 9.9 WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR
THEIR RIGHT TO TRIAL BY JURY.
 
 
 
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9.10           Independence of Covenants.  All covenants under this Agreement
and other Loan Documents shall be given independent effect so that if a
particular action or condition is not permitted by any one covenant, the fact
that it would be permitted by another covenant, shall not avoid the occurrence
of an Event of Default or Unmatured Event of Default if such action is taken or
condition exists.
 
9.11           Confidentiality.  Lender agrees that material, non-public
information regarding Borrower and its Subsidiaries, their operations, assets,
and existing and contemplated business plans shall be treated by Lender in a
confidential manner, and shall not be disclosed by Lender to Persons who are not
parties to this Agreement, except:  (a) to counsel for and other advisors,
accountants, auditors, and consultants to Lender, (b) to Subsidiaries and
Affiliates of Lender, provided that any such Subsidiary or Affiliate shall have
agreed to receive such information hereunder subject to the terms of this
Section 9.11, (c) as may be requested by regulatory authorities so long as such
authorities are informed of the confidential nature of such information, (d) as
may be required by statute, decision, or judicial or administrative order, rule,
or regulation, (e) as may be agreed to in advance by Borrower or its
Subsidiaries or as requested or required by any Governmental Authority pursuant
to any subpoena or other legal process, (f) as to any such information that is
or becomes generally available to the public (other than as a result of
prohibited disclosure by Lender), (g) in connection with any assignment,
prospective assignment, sale, prospective sale, participation or prospective
participations, or pledge or prospective pledge of Lender’s interest under this
Agreement, provided that any such assignee, prospective assignee, purchaser,
prospective purchaser, participant, prospective participant, pledgee, or
prospective pledgee shall have agreed in writing to receive such information
hereunder subject to the terms of this Section, and (h) in connection with any
litigation or other adversary proceeding involving parties hereto which such
litigation or adversary proceeding involves claims related to the rights or
duties of such parties under this Agreement or the other Loan Documents.  The
provisions of this Section 9.11 shall survive for 2 years after the payment in
full of the obligations of Borrower under this Agreement.
 
9.12           Complete Agreement.  This Agreement, together with the exhibits
hereto, the Disclosure Statement, and the other Loan Documents is intended by
the parties hereto as a final expression of their agreement and is intended as a
complete statement of the terms and conditions of their agreement with respect
to the subject matter of this Agreement.
 
 
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9.13           Acknowledgment of Prior Obligations and Continuation
Thereof.  Borrower (a) consents to the amendment and restatement of the Existing
Credit Agreement by this Agreement; (b) acknowledges and agrees that (i) its
Obligations (as defined in the Existing Credit Agreement) owing to Lender, and
(ii) the prior grant or grants of security interests in favor of any of the
Lender in its properties and assets, under each “Loan Document” as defined in
the Existing Credit Agreement (the “Original Loan Documents”), and each Loan
Document to which it is a party shall be in respect of the Obligations of
Borrower, under this Agreement and the other Loan Documents; (c) reaffirms (i)
all of its Obligations (as defined in the Existing Credit Agreement) owing to
Lender, and (ii) all prior or concurrent grants of security interests in favor
of any of the Lender under each Original Loan Document and each Loan Document;
and (d) agrees that, except as expressly amended hereby or unless being amended
and restated concurrently herewith, each of the Original Loan Documents to which
it is a party is and shall remain in full force and effect.  Borrower
acknowledges that, as of the Closing Date, under the Existing Credit
Agreement:  (i) the aggregate outstanding principal amount of the Revolving
Loans is $12,986,666, (ii) the aggregate accrued but unpaid interest on such
Revolving Loans is $10,556.94, (iii) the aggregate accrued but unpaid amount of
the continuing Unused Commitment Fee under the Existing Credit Agreement are
$1,202.32, (iv) the aggregate accrued but unpaid Letter of Credit fees under the
Existing Credit Agreement are $0, and (v) Letter of Credit Usage (as defined in
the Existing Credit Agreement) is $0 (in each case, prior to payment thereof, if
any, by Borrower on the Closing Date).  Borrower hereby confirms and agrees that
all outstanding principal, interest and fees (including such accrued and unpaid
principal, interest, and fees set forth in the immediately preceding sentence)
and other Obligations (as defined in the Existing Credit Agreement) under the
Existing Credit Agreement immediately prior to the Closing Date shall, to the
extent not paid on the Closing Date, from and after the Closing Date, be,
without duplication, Obligations owing and payable pursuant to this Agreement
and the other Loan Documents as in effect from time to time, shall accrue
interest thereon as specified in this Agreement, and shall be secured by this
Agreement and the other Loan Documents.  Borrower hereby further confirms and
agrees that all “Letters of Credit” as defined in the Existing Credit Agreement
which are outstanding on the Closing Date under the Existing Credit Agreement
shall become Letters of Credit under this Agreement.  Although Borrower has been
informed of the matters set forth herein and has acknowledged and agreed to the
same, it understands that Lender shall have no obligation to inform it of such
matters in the future or to seek its acknowledgement or agreement to future
amendments or modifications, and nothing herein shall create such a duty.
 
9.14           Waiver. Borrower has informed Lender that it is in violation of
Section 5.2 of the Existing Credit Agreement from and after March 2007 by
failing to provide financial statements and Compliance Certificates with respect
to Borrower and its Subsidiaries in accordance with the terms set forth therein
(the “Designated Event of Default”).  Borrower has requested that Lender waive
the Designated Event of Default. Anything in this Agreement to the contrary
notwithstanding, Lender hereby waives the Designated Event of Default; provided,
however, nothing herein, nor any communications among JMPG, Borrower, any
Guarantor, and Lender, shall be deemed a waiver with respect to any Default or
any Event of Default, other than the Designated Event of Default, or any future
failure of any Loan Party to comply fully with any provision of this Agreement
or any provision of any other Loan Document to which it is a party, and in no
event shall this waiver be deemed to be a waiver of enforcement of any right or
remedy of Lender under this Agreement and the other Loan Documents, at law
(including under the Code), in equity, or otherwise including, without
limitation, the right to declare all Obligations immediately due and payable
pursuant to this Agreement, with respect to any other Defaults or Events of
Default now existing or hereafter arising.  Except as expressly provided herein,
Lender hereby reserves and preserves all of its rights and remedies against
Borrower and any Guarantor under this Agreement and the other Loan Documents, at
law (including under the Code), in equity, or otherwise including, without
limitation, the right to declare all Obligations immediately due and payable
pursuant to Section 7.2 of this Agreement.
 
 
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9.15           No Novation.  This Agreement does not extinguish the obligations
for the payment of money outstanding under the Existing Credit Agreement or
discharge or release the obligations or the liens or priority of any mortgage,
pledge, security agreement or any other security therefor.  Nothing herein
contained shall be construed as a substitution or novation of the obligations
outstanding under the Existing Credit Agreement, the other Original Loan
Documents or instruments securing the same, which shall remain in full force and
effect, except as modified hereby or by instruments executed concurrently
herewith.  Nothing expressed or implied in this Agreement shall be construed as
a release or other discharge of Borrower or any Guarantor from any of its
obligations or liabilities under the Existing Credit Agreement or any of the
security agreements, pledge agreements, mortgages, guaranties or other loan
documents executed in connection therewith.  Borrower hereby (a) confirms and
agrees that each Original Loan Document to which it is a party that is not being
amended and restated concurrently herewith is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects except
that on and after the Closing Date, all references in any such Original Loan
Document to “the Credit Agreement,” “thereto,” “thereof,” “thereunder” or words
of like import referring to the Existing Credit Agreement shall mean the
Existing Credit Agreement as amended and restated by this Agreement; and (b)
confirms and agrees that to the extent that any such Original Loan Document
purports to assign or pledge to Lender or to grant to Lender a security interest
in or lien on, any collateral as security for the obligations of Borrower or any
other Loan Party, as the case may be, from time to time existing in respect of
the Existing Credit Agreement or the Original Loan Document, such pledge or
assignment or grant of the security interest or lien is hereby ratified and
confirmed in all respects with respect to this Agreement and the Loan Documents.
 

 
[Signature pages follow.]
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first set forth above.

 

 
JMP GROUP LLC,
a Delaware limited liability company
           
By:
/s/ JOSEPH A. JOLSON     Name:       Joseph A. Jolson     Title:    Chief
Executive Officer          

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]               
                    
 
 

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CITY NATIONAL BANK,
a national banking association
           
By:
/s/ ERIC LO     Name:       Eric Lo     Title:    Vice President          

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]               
 
 
 

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EXHIBITS
 
Exhibit C-1
Form of Compliance Certificate

 
Exhibit R-1
Form of Request for Borrowing

 
Exhibit R-2
Form of Request for Conversion/Continuation

 
Exhibit 9.3
Addresses and Information for Notices

 
 

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EXHIBIT  C-1

FORM OF COMPLIANCE CERTIFICATE

[on Borrower’s letterhead]

 

To: City National Bank
555 South Flower Street, 24th Floor
Los Angeles, California 90071

 
Re:           Compliance Certificate dated ____________
 
Ladies and Gentlemen:
 
Reference is made to that certain Amended and Restated Credit Agreement, dated
as of October 11, 2012 (the “Credit Agreement”) between JMP GROUP LLC, a
Delaware limited liability company, a Delaware corporation (“Borrower”), and
CITY NATIONAL BANK, a national banking association (“Lender”).  Capitalized
terms used in this Compliance Certificate have the meanings set forth in the
Credit Agreement unless specifically defined herein.
 
The undersigned officer of Borrower hereby certifies that:
 
1.           The financial report of JMPG and its Subsidiaries furnished in
Schedule 1 attached hereto, has been prepared in accordance with GAAP (except
for the lack of footnotes and being subject to year-end audit adjustments) and
fairly presents in all material respects the financial condition of JMPG and its
Subsidiaries.
 
2.           Such officer has reviewed the terms of the Credit Agreement and has
made, or caused to be made under his/her supervision, a review of the activities
of Borrower and its Subsidiaries during the accounting period covered by such
financial statements, with a view to determining whether Borrower and such
Subsidiaries have fulfilled all of their respective obligations under the Loan
Documents.
 
3.           Such review has not disclosed the existence on and as of the date
hereof, and the undersigned does not have knowledge of the existence as of the
date hereof, of any event or condition that constitutes a Unmatured Event of
Default or Event of Default, except for such conditions or events listed on
Schedule 2 attached hereto, specifying the nature and period of existence
thereof and the actions Borrower has taken, is taking, or proposes to take with
respect thereto.
 
4.           Without limiting the generality of the foregoing, JMPG and its
Subsidiaries are in compliance with the covenants contained in Section 6.14 of
the Credit Agreement as demonstrated on Schedule 3 hereof as of the end of the
period specified in Schedule 3 hereof and as supported by reasonably detailed
calculations set forth on Schedule 3A hereof.
 
 
 

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5.           Attached hereto on Schedule 4 is a description of all material
Contingent Obligations of Borrower and its Subsidiaries that could reasonably be
expected to result in payments (individually or in the aggregate) of greater
than $5,000,000.
 
6.           Except as set forth on Schedule 5 hereto, Borrower has negotiated
all transactions described in Section 6.8, other than transactions in de minimis
amounts, in good faith and on an arm’s length basis.
 
7.           Attached hereto on Schedule 6 is a list of all Subsidiaries formed
or acquired by Borrower or Guarantor that Borrower elects to designate as an
Excluded Subsidiary.
 
[Signature page follows.]
 
 
 

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IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this _____ day of _____________, _____.
 

 
JMP GROUP LLC, a Delaware limited liability company, as Borrower
           
By:
      Name:       Title:    

 
 
 

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SCHEDULE 1

 
 

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SCHEDULE 2

 
 

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SCHEDULE 3

1.  
Fixed Charge Coverage Ratio.  JMPG’s and its Subsidiaries’ Fixed Charge Coverage
Ratio, measured on a Fiscal quarter-end basis, for the twelve month period
ending _________ __, ____ is _____:1:00, which Fixed Charge Coverage Ratio
[is/is not] greater than or equal to the Fixed Charge Coverage Ratio set forth
in Section 6.14 of the Credit Agreement.

 
2.  
Minimum Net Worth.  JMPG’s and its Subsidiaries’ Net Worth for the fiscal
quarter ending _________ __, ____ is $______________, which amount [is/is not]
greater than or equal to the amount set forth in Section 6.14(c) of the Credit
Agreement.

 
3.  
Minimum Interest Coverage Ratio.1  JMPG’s and its Subsidiaries’ Interest
Coverage Ratio, measured on a fiscal quarter-end basis, for the twelve month
period ending _____­­­____ __, ____  is ____: 1.00, which Interest Coverage
Ratio [is/is not] greater than or equal to the Interest Coverage Ratio set forth
in Section 6.14(d) of the Credit Agreement.

 
4.  
Minimum Liquidity.  Loan Parties’ Liquidity on the last day of the fiscal
quarter ending __________ __, ____ is $_____________, which amount [is/is not]
greater than or equal to the amount set forth in Section 6.14(e) of the Credit
Agreement.

 
 
 
 

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1 To be measured from and after the date when the Revolving Facility Credit
Commitment has been terminated.
 
 
 

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SCHEDULE 3A
 
 
 

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SCHEDULE 4
 
 
 

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SCHEDULE 5
 
 
 

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SCHEDULE 6
 
New Subsidiary
 
[Name]
 
 
 
 
 
 
 

 

 

 

 

 
Lender hereby [accepts/objects to] Borrower’s election to designate [Insert name
of Subsidiary] as an Excluded Subsidiary.
 
 

 
CITY NATIONAL BANK,
a national banking association
                 
Date: ____________
By:
      Name:        Title:    

 
 
 

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EXHIBIT R-1
 
FORM OF REQUEST FOR BORROWING

City National Bank
555 South Flower Street, 24th Floor
Los Angeles, California 90071

RE:           Request for Borrowing under the Amended and Restated Credit
Agreement dated as of October 11, 2012 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among JMP GROUP
LLC, a Delaware limited liability company (“Borrower”), and City National Bank,
a national banking association (“Lender”)

Ladies and Gentlemen:

Reference hereby is made to the Credit Agreement.  Capitalized terms used
herein, and not otherwise defined herein, have their respective meanings given
them in the Credit Agreement.
 
Pursuant to Section 2.6 of the Credit Agreement, Borrower hereby gives you
irrevocable notice that Borrower hereby requests a Borrowing under the Credit
Agreement, and in connection therewith sets forth below the information relating
to such Borrowing (the “Proposed Borrowing”) as required by Section 2.6 of the
Credit Agreement.
 
a.           The principal amount of the Proposed Borrowing is $__________.
 
b.           The date and [Business Day][Eurodollar Business Day] of the
Proposed Borrowing is ___________.
 
c.           The Proposed Borrowing will be a [Base Rate Borrowing][LIBOR Rate
Borrowing].
 
d.           The aggregate amount of the Revolving Credit Facility Usage, after
giving effect to the Proposed Borrowing will be $____________.
 
e.           The proceeds of the Proposed Borrowing will be used for the
purposes and in the amounts set forth on Exhibit A hereto.  Set forth on Exhibit
A is a description of the identity of the Excluded Fund(s), if applicable, that
the proceeds of such Proposed Borrowing will be used by Borrower to invest in
and the amount of each such Investment.
 
f.           Attached as Exhibit B is (i) a description of all Margin Securities
(if any) held or to be acquired by any Loan Party in connection with the
Proposed Borrowing (including the name of the issuer of such Margin Securities,
the owner (or proposed owner) thereof and the number of shares of each class of
Margin Securities held or to be acquired by such Person) and (ii) a description
of all other Collateral (including any and all cash or Cash Equivalents) of any
Loan Party, including Borrower’s estimation of the approximate fair market value
of such assets.
 
 
 

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g.           The Proposed Borrowing is to be sent by Lender to the Designated
Account.
 
Borrower hereby further certifies that (i) as of the date hereof, (ii) as of the
date for the Proposed Borrowing, and (iii) after giving effect to the Proposed
Borrowing:
 
(l)           the representations and warranties of Borrower contained in the
Credit Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date of the Proposed Borrowing as though made
on and as of such date (except to the extent that such representations and
warranties solely relate to an earlier date);
 
(2)           no Event of Default or Unmatured Event of Default has occurred and
is continuing on the date of the Proposed Borrowing, or would result therefrom;
and
 
(3)           No event has occurred or is pending or overtly threatened that
could reasonably be expected to have a Material Adverse Effect upon Borrower.
 
 
 

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Very truly yours,
 
JMP GROUP LLC,
a Delaware limited liability company
           
By:
      Name:       Title:    

 
 
 

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Exhibit A
 
Uses and Amounts
 
 
 

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Exhibit B
 
Margin Securities and Assets
 
 
 

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EXHIBIT R-2

FORM OF REQUEST FOR CONVERSION/CONTINUATION
 
City National Bank
555 South Flower Street, 24th Floor
Los Angeles, California 90071
 
Ladies and Gentlemen:
 
Reference hereby is made to that certain Amended and Restated Credit Agreement,
dated as of October 11, 2012 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”) among JMP GROUP LLC, a
Delaware limited liability company (“Borrower”), and CITY NATIONAL BANK, a
national banking association (“Lender”).  Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement.
 
This Request for Conversion/Continuation represents Borrower’s request to
[convert $___________ of Base Rate Loans into LIBOR Rate Loans] [convert
$_____________of LIBOR Rate Loans into Base Rate Loans] [continue as LIBOR Rate
Loans, Loans in an amount of $______________], [and is a written confirmation of
the telephonic notice of such election given to Lender.]  The proposed date of
[conversion] [continuation] is __________, 20___.
 
[Such LIBOR Rate Loan will have an Interest Period of [1, 2 or 3] month(s)
commencing on.]
 
This Request for Conversion/Continuation further confirms Borrower’s acceptance,
for purposes of determining the rate of interest based on the LIBOR Rate under
the Credit Agreement, of the LIBOR Rate as determined pursuant to the Credit
Agreement.
 
Borrower represents and warrants that (i) as of the date hereof, each
representation or warranty contained in or pursuant to any Loan Document, and as
of the effective date of any continuation or conversion requested above, is true
and correct in all material respects (except to the extent any representation or
warranty expressly related to an earlier date), and (ii) no Unmatured Event of
Default or Event of Default has occurred and is continuing on the date hereof,
nor will any thereof occur after giving effect to the request above.
 
 
 

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Dated:                                                              

 
JMP GROUP LLC,
a Delaware limited liability company

 
 
By:                                                                   
Name:                                                              
Title:                                                                

 
 
Acknowledged by:
 
CITY NATIONAL BANK,
a national banking association
 

 
By:                                                                   
Name:                                                              
Title:                                                                
 
 
 

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Exhibit 9.3

ADDRESSES AND INFORMATION FOR NOTICES

Notices, demands, requests, instructions, and other communications in writing
shall be given or made upon the respective parties hereto at their respective
addresses (or to their respective telefacsimile numbers) indicated below:

If to Borrower, to:

JMP Group LLC
600 Montgomery Street, Suite 1100
San Francisco, CA 94111
Telephone: (415) 835-8900
Facsimile:
Email:

If to Lender, to:

City National Bank
555 S. Flower Street, 24th Floor
Los Angeles, CA 90071
Attn: Aaron Cohen
Facsimile: (213) 673-9801
Email: Aaron.Cohen@cnb.com

with a copy to:

Paul Hastings LLP
515 South Flower Street, 25th Floor
Los Angeles, California 90071
Attn: Peter S. Burke, Esq.
Facsimile: (213) 996-3338
Email: PeterBurke@paulhastings.com