Exhibit 10.25

 

Conformed VERSION

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CREDIT AGREEMENT

 

 

by and among

 

 

BNP PARIBAS,
as a Lender,

 

 

the other Lenders party hereto,

 

 

JMP CREDIT ADVISORS LONG-TERM WAREHOUSE LTD.,
as Borrower,

 

 

EACH CLO SUBSIDIARY FROM TIME TO TIME PARTY HERETO,
as CLO Subsidiaries,

 

 

BNP PARIBAS,
as Administrative Agent,

 

 

JMP CREDIT ADVISORS LLC,
as Collateral Manager,

 

 

and

 

 

JMP CAPITAL LLC
as Preferred Investor

 

 

 

 

 

As of October 11, 2018

 

 

 

 

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TABLE OF CONTENTS

 

Page

 

SECTION 1.

Definitions and Rules of Construction

1

     

SECTION 2.

The REVOLVING Facility

33

     

SECTION 3.

Accounts

40

     

SECTION 4.

Security Interest

43

     

SECTION 5.

Dispositions of Portfolio Assets, REINVESTMENT OF PRINCIPAL COLLECTIONS

49

     

SECTION 6.

OC Ratio Posting AND ADDitional issuance of preference shares

50

     

SECTION 7.

Conditions Precedent to Borrowing

51

     

SECTION 8.

Representations and Warranties

53

     

SECTION 9.

Covenants

55

     

SECTION 10.

ADMINISTRATIVE AGENT

60

     

SECTION 11.

CALCULATION DISPUTE MECHANISM

63

     

SECTION 12.

Assignment of Collateral Management Agreement

64

     

SECTION 13.

Miscellaneous

65

 

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THIS CREDIT AGREEMENT, dated as of October 11, 2018 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, this
“Agreement”), by and among BNP Paribas and each of the other lenders from time
to time party hereto (the “Lenders”), JMP Credit Advisors Long-Term Warehouse
Ltd. (the “Borrower”), each of the CLO Subsidiaries from time to time party
hereto, BNP Paribas, as administrative agent (the “Administrative Agent”), JMP
Credit Advisors LLC (the “Collateral Manager”) and JMP Capital LLC (the
“Preferred Investor”).

 

WITNESSETH:

 

WHEREAS, the parties hereto are entering into this Agreement in anticipation
that each CLO Issuer will issue (or co-issue) certain notes or similar
securities (collectively, the “CLO Securities”) that will be secured principally
by a portfolio of collateral that includes certain loans (each, an “Asset”) that
are eligible for acquisition by the Borrower Parties in accordance with the
Underlying Instruments (as defined below); and

 

WHEREAS, the Borrower Parties desire to acquire Assets in the manner described
herein upon request of the Collateral Manager hereunder and, to that effect, the
Borrower Parties wish to borrow from the Lenders, and the Lenders are willing to
lend to the Borrower Parties, funds to finance such acquisitions on the terms
and subject to the conditions hereof; and

 

WHEREAS, the Borrower Parties have appointed the Collateral Manager to act as
Collateral Manager with respect to the Portfolio Assets, with duties including,
but not limited to, the selection of the Assets to be acquired by the Borrower
Parties; and

 

WHEREAS, the Preferred Investor has the obligation to subscribe for the
Preference Shares of the Borrower as described herein and in the Preference
Share Subscription Agreement (as defined below);

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

 

SECTION 1.        Definitions and Rules of Construction

 

(a)     As used in this Agreement, the following terms have the meanings
specified below:

 

“Account Control Agreement” means the account control agreement dated on or
about the date hereof among the Borrower, the Securities Intermediary and the
Administrative Agent with respect to the Accounts.

 

“Accounts” means the Borrower Accounts, the CLO Subsidiary Accounts and all
other accounts of the Borrower and each CLO Subsidiary established pursuant to
this Agreement.

 

 

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“Acquisition Date” means, with respect to any Portfolio Asset, the date on which
the applicable Borrower Party commits to acquire such Portfolio Asset.

 

“Act” has the meaning specified in Section 13(m) hereof.

 

“Adjusted Administrative Agent Fee Amount” has the meaning specified in the Fee
Letter.

 

“Adjustment Margin” has the meaning specified in Section 13(a) hereof.

 

“Additional Account Agreement” means each agreement among a CLO Subsidiary, the
Securities Intermediary and the Administrative Agent substantially in the form
of Annex H to this Agreement delivered in connection with such CLO Subsidiary
becoming a Borrower Party hereunder on or after the Closing Date.

 

“Additional Collateral Management Agreement” means each agreement among a CLO
Subsidiary and the Collateral Manager delivered in connection with such CLO
Subsidiary becoming a Borrower Party on or after the Closing Date which such
agreement has been consented to by the Administrative Agent (such consent not to
be unreasonably withheld, conditioned or delayed).

 

“Additional Custody Agreement” means each agreement among a CLO Subsidiary, the
Collateral Manager and the Custodian substantially in the form of Annex I to
this Agreement delivered in connection with such CLO Subsidiary becoming a
Borrower Party hereunder on or after the Closing Date.

 

“Administrative Agent” has the meaning specified in the introductory paragraph
hereof.

 

“Administrative Agent Fee” has the meaning specified in Section 2(e) hereof.

 

“Administrative Agent Fee Amount” has the meaning specified in the Fee Letter.

 

“Advance Rate” has the meaning specified in the Fee Letter.

 

“Affiliate” or “Affiliated” means, with respect to a Person, (a) any other
Person who, directly or indirectly, including through one or more
intermediaries, is in control of, or controlled by, or is under common control
with, such Person or (b) any other Person who is a director, officer, employee,
managing member or general partner of (i) such Person or (ii) any such other
Person described in clause (a) above. For the purposes of this definition,
“control” of a Person shall mean the power, direct or indirect, (i) to vote more
than 50% of the securities having ordinary voting power for the election of
directors of such Person or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise. The
Borrower shall be deemed to have no Affiliates.

 

“Agent Indemnity Amount” means any indemnity amount owing by the Borrower
Parties to the Custodian or the Securities Intermediary, as the case may be,
under the Custody Agreement, any Additional Custody Agreement, the Account
Control Agreement or any Additional Account Control Agreement, as applicable.

 

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“Agented Asset” means any Asset originated as part of a syndicated loan
transaction that has one or more administrative, paying and/or collateral agents
who receive payments and hold the collateral pledged by the related obligor on
behalf of all lenders with respect to the related credit facility.

 

“Aggregate Collateral Adjusted Principal Amount” means, as of any Business Day,
the sum of the Collateral Adjusted Principal Amounts of each Traded Portfolio
Asset less the sum of any Excess Concentrations.

 

“Agreement” has the meaning specified in the introductory paragraph hereof.

 

“AML Compliance” means compliance with the Cayman AML Regulations.

 

“Alternate Base Rate” has the meaning specified in Section 13(a) hereof.

 

“Applicable Margin” has the meaning specified in the Fee Letter.

 

“Approval Request” has the meaning specified in Section 2(b) hereof.

 

“Approved CLO Takeout” means any private or public term or conduit
securitization transaction, including any collateralized loan obligation or
collateralized debt obligation offering or other asset securitization, (a) for
which the Collateral Manager or an affiliate thereof acts as the collateral
manager, (b) to which transfers of Portfolio Assets are made (i) pursuant to a
master participation agreement, (ii) by means of a sale of the equity interests
of the CLO Subsidiary, (iii) by means of a merger of the CLO Subsidiary into an
issuing or borrowing entity or (iv) by means of an indirect sale to another
issuing or borrowing entity through a broker-dealer, in each case, that is
reasonably satisfactory to the Administrative Agent and (c) with respect to
which sufficient cash proceeds are generated to (1) repay the portion of Loans
(and related expenses) made in respect of each Portfolio Asset that is so
transferred, in full on the related CLO Takeout Date or (2) if the related CLO
Takeout Date is the final Payment Date, pay the Termination Obligations in full
to the Administrative Agent and such Lenders.

 

“Asset” has the meaning specified in the recitals hereto.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 13(c)), in the form of Annex F hereof.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers.

 

“Bail-In Legislation” means in relation to an EEA Member Country which has
implemented, or which at any time implements, Article 55 of Directive 2014/59/EU
establishing a framework for the recovery and resolution of credit institutions
and investment firms, the relevant implementing law or regulation as described
in the EU Bail-In Legislation Schedule from time to time.

 

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“Bankruptcy Event” means, with respect to any Person, the commencement by such
Person of a voluntary case or other proceeding involving its liquidation,
winding-up, bankruptcy or sequestration or otherwise seeking reorganization or
other relief with respect to itself or its debts under any Debtor Relief Law or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or such Person
shall consent to any such relief or to the appointment of or taking possession
by any such official in any involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of creditors, or
shall fail generally, or admit in writing its inability, to pay its debts as
they become due, or shall take any corporate action to authorize any of the
foregoing; or any involuntary case or other proceeding shall be commenced
against such Person involving its liquidation, winding-up, bankruptcy or
sequestration or otherwise seeking reorganization or other relief with respect
to it or its debts under any Debtor Relief Law that is not dismissed,
discharged, stayed or restrained in each case within 60 days of the institution
or presentation thereof; or an order for relief is entered in any such
proceeding or such Person becomes the subject of the appointment of a trustee,
receiver, liquidator, custodian or other similar official with respect to a
substantial part of its property.

 

“Base Rate Amendment” has the meaning specified in Section 13(a) hereof.

 

“Bond” means any debt security or obligation (that is not a Qualified Loan).

 

“Borrower Accounts” means the Borrower Collateral Account, the Borrower
Collection Account, the Borrower Interest Collection Account, the Borrower
Delayed Drawdown Account, the Borrower Prepayment Reserve Account, the Borrower
Principal Collection Account, the Borrower Trust Account and the OC Ratio
Posting Account.

 

“Borrower Collateral” has the meaning specified in Section 4(a) hereof.

 

“Borrower Collateral Account” has the meaning specified in Section 3(a) hereof.

 

“Borrower Collection Account” has the meaning specified in Section 3(a) hereof.

 

“Borrower Interest Collection Account” has the meaning specified in Section 3(a)
hereof.

 

“Borrower Delayed Drawdown Account” has the meaning specified in Section 3(a)
hereof.

 

“Borrower Parties” means the Borrower and each CLO Subsidiary.

 

“Borrower Prepayment Reserve Account” has the meaning specified in Section 3(a)
hereof.

 

“Borrower Principal Collection Account” has the meaning specified in Section
3(a) hereof.

 

“Borrower Trust Account” has the meaning specified in Section 3(a) hereof.

 

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“Borrowing Base” means, as of any Business Day, the sum (without duplication) of
(a) the amounts in the Collection Accounts, the Principal Collection Accounts
and the Interest Collection Accounts, (b) the amounts in the Trust Accounts, (c)
the amounts in the Prepayment Reserve Accounts, (d) the product of (i)(A) at any
time during the Initial Period, 1 and (B) at any time following the Initial
Period, the Advance Rate and (ii) the Aggregate Collateral Adjusted Principal
Amount, (e) the aggregate sale price (less any sale commissions or expenses)
that is expected to be received by any Borrower Party in the reasonable
determination of the Collateral Manager in respect of all Assets not yet settled
for which any Borrower Party has entered into binding commitments to sell and
(f) the balance on deposit in the OC Ratio Posting Account as of the close of
business on such Business Day.

 

“Borrowing Request” has the meaning specified in Section 2(c) hereof.

 

“Breakage Costs” means, with respect to any Lender, the amount or amounts as
shall compensate such Lender for any loss, costs or expenses which such Lender
may sustain (as determined by such Lender in its reasonable discretion, absent
manifest error) as a result of (x) any Borrower Party’s failure to borrow any
Loan on the date requested, (y) any payment of principal on any Loan on a date
other than the last day of the LIBOR Interest Period for such Loan (whether in
whole or in part and whether through voluntary prepayment, acceleration or
otherwise and including any repayment on the Maturity Date) or (z) any Borrower
Party’s failure to repay the principal amount of any Loan or any interest
thereon on the Maturity Date, including but not limited to, in each case, any
loss in liquidating or reemploying deposits from third parties or fees payable
to terminate such deposits.

 

“Bridge Loan” means a loan which by its terms is required to be repaid within
one year of the incurrence thereof with proceeds from additional borrowings or
other refinancings.

 

“Business Day” means any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized to close under the laws of, or are in fact
closed in, New York, New York, Chicago, Illinois or, with respect to any
determination of LIBOR, London, England.

 

“Calculation Dispute Mechanism” has the meaning specified in Section 11 hereof.

 

“Cayman AML Regulations” means the Anti-Money Laundering Regulations (2018
Revision) of the Cayman Islands and The Guidance Notes on the Prevention and
Detection of Money Laundering and Terrorist Financing in the Cayman Islands,
each as amended and revised from time to time.

 

“Cayman FATCA Legislation” means the Cayman Islands Tax Information Authority
Law (2017 Revision) (as amended) together with regulations and guidance notes
made pursuant to such Law (including such regulations and guidance notes
implementing the OECD Standard for Automatic Exchange of Financial Account
Information – Common Reporting Standard). For purposes of this definition,
“OECD” means the Organisation for Economic Cooperation and Development.

 

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“CCC/Caa Obligation” means an Asset (other than a Defaulted Obligation) with
(a) an S&P Rating of “CCC+” or lower or (b) a Moody’s Rating of “Caa1” or lower;
provided that, for the avoidance of doubt, an Asset shall be a “CCC/Caa
Obligation” as opposed to a Defaulted Obligation, if it has neither an S&P
Rating nor a Moody’s Rating and it does not otherwise satisfy the requirements
of the definition of Defaulted Obligation.

 

“Change in Law” means the occurrence, after the date of this Agreement, or with
respect to any Lender not a party hereto on the date hereof, after the date such
Lender becomes a party hereto, of any of the following: (a) the adoption or
taking effect of any law, rule, regulation or treaty, (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of law) by any Governmental Authority; provided that
notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in
Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” means the occurrence of any of the following events with
respect to the Collateral Manager: (a) any non-Affiliated “person” or “group”
(within the meaning of Section 13(d) or 14(d) of the Exchange Act) shall become,
or obtain rights (whether by means of warrants, options or otherwise) to become,
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, of a percentage of the total voting power of all
classes of Capital Stock of the Collateral Manager entitled to vote generally in
the election of directors of 50% or more, or (b) none of JMP Group LLC or any
Affiliated successor entity beneficially owns and directly or indirectly
controls a majority of the equity interests of the Collateral Manager or the
Preferred Investor. For purposes of the foregoing, “Capital Stock” means any and
all shares, interests, participations or other equivalents (however designated)
of capital stock of a corporation, any and all similar ownership interests in a
Person (other than a corporation), and any and all warrants, rights or options
to purchase any of the foregoing.

 

“CLO Issuer” means any CLO Subsidiary or other entity issuing securities in
connection with an Approved CLO Takeout.

 

“CLO Securities” has the meaning specified in the recitals hereto.

 

“CLO Subsidiary” means a wholly-owned Subsidiary of the Borrower incorporated as
an exempted company under the laws of the Cayman Islands, which satisfies the
following conditions:

 

(i)     it satisfies the then-current Moody’s criteria for bankruptcy-remote
special purpose entities;

 

(ii)     it is incorporated for the purpose of an Approved CLO Takeout;

 

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(iii)     it is otherwise satisfactory to the Administrative Agent and the
Preferred Investors in their sole discretion;

 

(iv)     it has delivered to the Administrative Agent and the Custodian a
properly completed and executed CLO Subsidiary Joinder Supplement;

 

(v)     it has delivered to the Administrative Agent and the Custodian a
properly completed and executed Additional Account Control Agreement;

 

(vi)     it has delivered to the Administrative Agent and the Custodian a
properly completed and executed Additional Custody Agreement;

 

(vii)     it has delivered to the Administrative Agent and the Custodian a
properly completed and executed Additional Collateral Management Agreement;

 

(viii)     the Administrative Agent has received an opinion from Cayman counsel
to such CLO Subsidiary; and

 

(ix)     a UCC-1 financing statement is in proper form for filing in the filing
office of the appropriate jurisdiction and, upon the execution and delivery of
the Additional Account Control Agreement and filing of a financing statement
under the UCC with the Recorder of Deeds of the District of Columbia with
respect thereto naming the CLO Subsidiary as debtor and the Administrative Agent
for the benefit of the Secured Parties as secured party, the Administrative
Agent for the benefit of the Secured Parties will have a first priority
perfected security interest in assets of the CLO Subsidiary;

 

provided, that, CLO Subsidiary I shall be deemed to be a CLO Subsidiary as of
the Closing Date.

 

“CLO Subsidiary Accounts” means each CLO Subsidiary Collateral Account, each CLO
Subsidiary Collection Account, each CLO Subsidiary Delayed Drawdown Account,
each CLO Subsidiary Interest Collection Account, each CLO Subsidiary Prepayment
Reserve Account, each CLO Subsidiary Principal Collection Account and each CLO
Subsidiary Trust Account.

 

“CLO Subsidiary Collateral Account” has the meaning specified in Section 3(b)
hereof.

 

“CLO Subsidiary Collection Account” has the meaning specified in Section 3(b)
hereof.

 

“CLO Subsidiary Delayed Drawdown Account” has the meaning specified in Section
3(b) hereof.

 

“CLO Subsidiary I” means JMP Credit Advisors CLO VI Warehouse Ltd.

 

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“CLO Subsidiary Interest Collection Account” has the meaning specified in
Section 3(b) hereof.

 

“CLO Subsidiary Joinder Supplement” means an agreement among the Borrower, the
Lenders, the Administrative Agent and a proposed CLO Subsidiary substantially in
the form of Annex G to this Agreement delivered in connection with such CLO
Subsidiary becoming a Borrower Party hereunder after the Closing Date.

 

“CLO Subsidiary Prepayment Reserve Account” has the meaning specified in Section
3(b) hereof.

 

“CLO Subsidiary Principal Collection Account” has the meaning specified in
Section 3(b) hereof.

 

“CLO Subsidiary Trust Account” has the meaning specified in Section 3(b) hereof.

 

“CLO Takeout Advance Rate” has the meaning specified in the applicable CLO
Takeout Fee Letter.

 

“CLO Takeout Amortization Date” has the meaning specified in the applicable CLO
Takeout Fee Letter.

 

“CLO Takeout Date” means each date on which a CLO Issuer issues CLO Securities
in connection with an Approved CLO Takeout.

 

“CLO Takeout Determination Date” means, with respect to an Approved CLO Takeout,
the date on which the Administrative Agent, the Borrower, the applicable CLO
Subsidiary, the Lenders, the Collateral Manager and the Preferred Investor enter
into a CLO Takeout Fee Letter in connection with such Approved CLO Takeout.

 

“CLO Takeout Early Termination Date” means, with respect to the related CLO
Takeout Period, the date upon which a CLO Takeout Early Termination Event
occurs.

 

“CLO Takeout Early Termination Event” has the meaning specified in the
applicable CLO Takeout Fee Letter.

 

“CLO Takeout Fee Letter” means, with respect to an Approved CLO Takeout, the
letter agreement dated on or about the CLO Takeout Determination Date among the
Borrower, the applicable CLO Subsidiary, the Lender, the Administrative Agent,
the Collateral Manager, and the Preferred Investor in substantially the form
attached as Annex A to the Fee Letter.

 

“CLO Takeout Fees” means fees payable to BNP Paribas Securities Corp., as
arranger, upon the occurrence of a CLO Takeout Date, as set forth in the
applicable Engagement Letter.

 

“CLO Takeout Outside Settlement Date” has the meaning specified in the
applicable CLO Takeout Fee Letter.

 

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“CLO Takeout Period” means, with respect to an Approved CLO Takeout, the period
from and including the related CLO Takeout Determination Date to and including
the date that is the earliest of (i) the related CLO Takeout Date, (ii) the
related CLO Takeout Period End Date and (iii) the related CLO Takeout Early
Termination Date.

 

“CLO Takeout Period End Date” has the meaning specified in the applicable CLO
Takeout Fee Letter.

 

“Closing Date” means October 11, 2018.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral Accounts” means the Borrower Collateral Account and each CLO
Subsidiary Collateral Account.

 

“Collateral Adjusted Principal Amount” means (a) with respect to any Traded
Portfolio Asset (other than Defaulted Obligations or Excess CCC/Caa Obligations)
with a Purchase Price of 90% or greater, the Principal Balance of such Asset,
(b) with respect to any Traded Portfolio Asset (other than Defaulted Obligations
or Excess CCC/Caa Obligations) with a Purchase Price less than 90%, the Purchase
Price of such Asset, (c) with respect to any Traded Portfolio Asset that is a
Defaulted Obligation, the lowest of (i) 50% of the Principal Balance of such
Asset, (ii) the S&P Recovery Amount for such Traded Portfolio Asset, (iii) the
Moody’s Recovery Amount for such Traded Portfolio Asset and (iv) the Market
Value of such Traded Portfolio Asset, (d) with respect to any Traded Portfolio
Asset that is an Excess CCC/Caa Obligation, the lower of (i) 70% of the
Principal Balance of such Traded Portfolio Asset and (ii) the Market Value of
such Traded Portfolio Asset and (e) with respect to any Traded Portfolio Asset
that is a Deferring Security or an Equity Security, $0.

 

“Collateral Management Agreement” means the collateral management agreement
dated on or about the date hereof between the Borrower Parties and the
Collateral Manager and each Additional Collateral Management Agreement.

 

“Collateral Manager Default” means the occurrence of any of the following:

 

(a)     any failure on the part of the Collateral Manager to duly observe or
perform any of the covenants or agreements of the Collateral Manager set forth
in any Transaction Document (including, without limitation, any delegation of
the Collateral Manager’s duties not permitted by this Agreement) that has a
Material Adverse Effect (as determined by the Administrative Agent in its sole
discretion) and the same is either incapable of being remedied or continues
unremedied for a period of thirty (30) days after the earlier to occur of the
date on which (i) written notice of such failure shall have been delivered to
the Collateral Manager and (ii) the Collateral Manager first became aware of
such failure;

 

(b)     the occurrence or existence of a Bankruptcy Event with respect to the
Collateral Manager;

 

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(c)     the occurrence or existence of any change with respect to the Collateral
Manager that has a Material Adverse Effect or a material adverse effect on the
marketability of any CLO Securities;

 

(d)     the occurrence or existence of any Change of Control with respect to the
Collateral Manager;

 

(e)     any representation, warranty or certification made by the Collateral
Manager in any Transaction Document or in any certificate delivered pursuant to
any Transaction Document shall prove to have been materially incorrect, and that
has a Material Adverse Effect (as determined by the Administrative Agent in its
sole discretion), when made and which continues to be unremedied for a period of
thirty (30) days after the earlier to occur of the date on which (i) written
notice thereof shall have been given to the Collateral Manager and (ii) the
Collateral Manager first became aware of such incorrect statement; provided that
if such event cannot be remedied, such Collateral Manager Default shall occur
immediately.

 

(f)     the rendering against the Collateral Manager of one or more final
judgments, decrees or orders for the payment of money in excess of $1,000,000
(net of amounts covered by any insurance as to which the insurer does not
dispute coverage), individually or in the aggregate and the same shall not have
been vacated, satisfied, discharged, stayed or bonded pending appeal for a
period of thirty (30) consecutive days; or

 

(g)     (i) the occurrence of an act by the Collateral Manager that constitutes
fraud or criminal activity in the performance of its obligations under any
Transaction Document, (ii) the Collateral Manager being indicted for a felonious
criminal offense or (iii) any officer or director of the Collateral Manager
having responsibility for the performance by the Collateral Manager of its
obligations under any Transaction Document being indicted for a felonious
criminal offense materially related to the primary business of the Collateral
Manager.

 

“Collateral Principal Amount” means, as of any Business Day, the sum of (a) the
Principal Balance of each Traded Portfolio Asset (other than Defaulted
Obligations) and (b) without duplication, the amounts on deposit in the
Collection Accounts, Principal Collection Accounts, Interest Collection
Accounts, Trust Accounts, OC Ratio Posting Account and Prepayment Reserve
Accounts.

 

“Collateral Quality Test” means a test in relation to a proposed purchase of an
Asset that will be satisfied if, as of the related Acquisition Date, (a) the sum
of the Principal Balances of the Traded Portfolio Assets is less than
$50,000,000 or (b) in the aggregate, the Traded Portfolio Assets (after giving
effect to the proposed purchase of such Asset) comply with all of the following
tests or in relation to a proposed purchase of an Asset, if not in compliance
prior to giving effect to such purchase, the relevant tests are maintained or
improved after giving effect to such purchase:

 

(i)     the Minimum Floating Spread Test;

 

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(ii)     the Minimum Weighted Average Coupon Test;

 

(iii)     the Moody’s Maximum Rating Factor Test;

 

(iv)     the Moody’s Minimum Weighted Average Recovery Rate Test; and

 

(v)     the Minimum Diversity Test

 

“Collection Accounts” means the Borrower Collection Account and each CLO
Subsidiary Collection Account.

 

“Concentration Limitations” means as of any Business Day, on or after the date
hereof, a series of limitations that will be satisfied on such Business Day if,
(a) the sum of the Principal Balances of the Traded Portfolio Assets is less
than $50,000,000 or (b) in the aggregate, the Traded Portfolio Assets comply
with all of the following requirements (or in relation to a proposed purchase of
an Asset, if not in compliance, the relevant requirements are maintained or
improved after giving effect to such purchase):

 

(i)     not less than 90% of the Collateral Principal Amount consists of Senior
Secured Loans, cash and Eligible Investments;

 

(ii)     not more than 10% of the Collateral Principal Amount consists, in the
aggregate, of Second Lien Loans;

 

(iii)     the Principal Balance of Traded Portfolio Assets consisting of
obligations issued by a single obligor and its Affiliates is not more than 2% of
the Target CLO Amount, except that, without duplication, obligations issued by
up to 3 obligors and their respective Affiliates may each constitute up to 2.5%
of the Target CLO Amount;

 

(iv)     the Principal Balance of Traded Portfolio Assets consisting of Assets
that are issued by obligors that belong to any single S&P Industry
Classification is not more than 10% of the Target CLO Amount, except that
(x) the largest S&P Industry Classification may represent up to 15.0% of the
Target CLO Amount; and (y) the second, third and fourth largest S&P Industry
Classifications may each represent up to 12.0% of the Target CLO Amount;

 

(v)     the Principal Balance of Traded Portfolio Assets consisting of Assets
that are issued by obligors that belong to any single Moody’s Industry
Classification is not more than 10% of the Target CLO Amount, except that
(x) the largest Moody’s Industry Classification may represent up to 15.0% of the
Target CLO Amount; and (y) the second, third and fourth largest Moody’s Industry
Classifications may each represent up to 12.0% of the Target CLO Amount;

 

(vi)     not more than 5% of the Collateral Principal Amount consists of CCC/Caa
Obligations;

 

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(vii)     no Assets are Structured Finance Obligations;

 

(viii)     (a) all of the Assets must be issued by Non-Emerging Market Obligors;
and (b) no more than the percentage listed below of the Collateral Principal
Amount may be issued by obligors Domiciled in the country or countries set forth
opposite such percentage:

 

% Limit

 

Country or Countries

15.0%

 

all countries (in the aggregate) other than the United States;

15.0%

 

Canada;

10.0%

 

the United Kingdom;

10.0%

 

all countries (in the aggregate) other than the United States, Canada and the
United Kingdom;

15.0%

 

all Group I Countries in the aggregate;

10.0%

 

any individual Group I Country;

10.0%

 

all Group II Countries in the aggregate;

7.5%

 

any individual Group II Country;

7.5%

 

all Group III Countries in the aggregate;

5.0%

 

any individual Group III Country;

3.0%

 

all Group IV Countries in the aggregate;

3.0%

 

any individual Group IV Country;

5.0%

 

all Tax Jurisdictions in the aggregate;

3.0%

 

any individual Tax Jurisdiction;

0.0%

 

Greece, Ireland, Italy, Portugal and Spain in the aggregate; and

3.0%

 

any individual country other than the United States, the United Kingdom, Canada,
the Netherlands, Greece, Italy, Portugal, Spain, any Group II Country, any
Group III Country or any Group IV Country;

 

(ix)     not more than 40% of the Collateral Principal Amount consists of
Cov-Lite Loans;

 

(x)     the Principal Balance of Traded Portfolio Assets consisting of unfunded
commitments under Delayed Drawdown Collateral Obligations is not more than, in
the aggregate, 5% of the Target CLO Amount; and

 

(xi)     not more than 2.5% of the Collateral Principal Amount consists, in
aggregate, of Assets with a (a) Moody’s Rating of at least “Caa1” or “Caa2” and
(b) Moody’s Default Probability Rating of at least “B3”, in each case, as at the
related Acquisition Date.

 

“Conversion Date” means the earliest to occur of (a) the date on which the
Revolving Period ends, (b) the date on which an Event of Default occurs and (c)
a Termination Date (as defined in any Engagement Letter) occurring under the
Engagement Letters as a result of a Manager Termination Event (as defined in any
Engagement Letter).

 

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“Cov-Lite Loan” means a Qualified Loan that is not subject to financial
covenants; provided that an Asset shall not constitute a “Cov-Lite Loan” if (a)
the Underlying Instruments require the obligor thereunder to comply with one or
more Maintenance Covenants (regardless of whether compliance with one or more
Incurrence Covenants is otherwise required by the Underlying Instruments) or (b)
the Underlying Instruments contain a cross-default provision to, or is pari
passu with, another loan of the underlying obligor forming part of the same loan
facility that requires the underlying obligor to comply with one or more
financial covenants or Maintenance Covenants.

 

“Credit Risk Obligation” means any debt obligation that, in the Collateral
Manager’s commercially reasonable business judgment, has significantly declined
in credit quality and has a significant risk of becoming, with a lapse of time,
a Defaulted Obligation.

 

“Custodian” means U.S. Bank National Association, as custodian under the Custody
Agreement and each custodian appointed under any Additional Custody Agreement.

 

“Custody Agreement” means the custody agreement dated as of the date hereof
between the Borrower, the Custodian and the Collateral Manager.

 

“Debtor Relief Laws” means the U.S. Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States of America, the Cayman Islands or other
applicable jurisdictions from time to time in effect affecting the rights of
creditors generally.

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Defaulted Obligation” means any Asset with respect to which the following has
occurred and is continuing:

 

(a)     a default as to the payment of principal and/or interest has occurred
and is continuing with respect to such debt obligation pursuant to the related
Underlying Instrument, (without regard to any grace period applicable thereto,
or waiver or forbearance thereof, after the passage of five Business Days or
seven calendar days, whichever is greater, but in no case beyond the passage of
any grace period applicable thereto);

 

(b)     the Collateral Manager has received written notice, or an officer of the
Collateral Manager has actual knowledge, that a default as to the payment of
principal and/or interest has occurred and is continuing on another debt
obligation of the same issuer which is senior or pari passu in right of payment
to such debt obligation (without regard to any grace period applicable thereto,
or waiver or forbearance thereof, after the passage of five Business Days or
seven calendar days, whichever is greater, but in no case beyond the passage of
any grace period applicable thereto); provided, that both debt obligations are
full recourse obligations;

 

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(c)     a Bankruptcy Event has occurred with respect to such issuer;

 

(d)     such Asset has (x) an S&P Rating of “CC” or below, (y) an S&P Rating of
“D” or “SD” or (z) a Moody’s probability of default rating (as published by
Moody’s) of “D” or “LD” or, in each case, had such ratings before they were
withdrawn by S&P or Moody’s, as applicable;

 

(e)     such Asset is pari passu in right of payment as to the payment of
principal and/or interest to another debt obligation of the same issuer which
has (i) (x) an S&P Rating of “CC” or below or “D” or (y) an S&P Rating of “SD”
or (ii) a Moody’s probability of default rating (as published by Moody’s) of “D”
or “LD”, and in each case such other debt obligation remains outstanding
(provided, that both the Asset and such other debt obligation are full recourse
obligations of the applicable issuer);

 

(f)     the Collateral Manager has received written notice, or an officer of the
Collateral Manager has actual knowledge, that a default has occurred under the
Underlying Instruments and any applicable grace period has expired such that the
holders of such Asset may accelerate the repayment of such Asset (but only until
such default is cured or waived) in the manner provided in the Underlying
Instruments;

 

(g)     the Collateral Manager has in its reasonable commercial judgment
otherwise declared such debt obligation to be a “Defaulted Obligation”;

 

(h)     such Asset is a participation interest with respect to which the selling
institution has defaulted in the performance of any of its payment obligations
under the participation interest (except to the extent such defaults were cured
within the applicable grace period under the related Underlying Instruments);
provided, that an Asset shall not be classified as a Defaulted Obligation
pursuant to this clause (h) if such payment default has been cured through the
payment of all past due interest and principal within five (5) Business Days of
the occurrence of such payment default;

 

(i)     such Asset is a participation interest in a loan that would, if such
loan were an Asset, constitute a “Defaulted Obligation” (other than under this
clause (i)) or with respect to which the selling institution has an S&P Rating
of “CC” or below, “D” or “SD” or a Moody’s probability of default rating (as
published by Moody’s) of “D” or “LD” or had such rating before such rating was
withdrawn;

 

(j)     a Distressed Exchange has occurred in connection with such Asset; or

 

(k)     such Asset is a Deferring Security.

 

“Deferrable Security” means an Asset (excluding a Partial Deferrable Security)
which by its terms permits the deferral or capitalization of payment of accrued,
unpaid interest.

 

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“Deferring Security” means a Deferrable Security that is deferring the payment
of interest due thereon and has been so deferring the payment of interest due
thereon (i) with respect to Assets that have a Moody’s Rating of at least
“Baa3,” for the shorter of two consecutive accrual periods or one year, and
(ii) with respect to Assets that have a Moody’s Rating of “Ba1” or below, for
the shorter of one accrual period or six consecutive months, which deferred
capitalized interest has not, as of the date of determination, been paid in
cash; provided, however, that such Deferrable Security will cease to be a
Deferring Security at such time as it (a) ceases to defer or capitalize the
payment of interest, (b) pays in cash all accrued and unpaid interest accrued
since the time of purchase and (c) commences payment of all current interest in
cash.

 

“Delayed Drawdown Collateral Obligation” means an Asset that (a) requires any
Borrower Party to make one or more future advances to the borrower under the
Underlying Instruments relating thereto, (b) specifies a maximum amount that can
be borrowed on one or more fixed borrowing dates, and (c) does not permit the re
borrowing of any amount previously repaid by the borrower thereunder; but any
such Asset will be a Delayed Drawdown Collateral Obligation only until all
commitments by the Borrower Parties to make advances to the borrower expire or
are terminated or are reduced to zero.

 

“Delayed Drawdown Reserve Accounts” means the Borrower Delayed Drawdown Reserve
Account and each CLO Subsidiary Delayed Drawdown Reserve Account.

 

“DIP Collateral Obligation” means any interest in a loan or financing facility
that has a public or private facility rating from Moody’s and S&P and is
purchased directly or by way of assignment (a) which is an obligation of (i) a
debtor in possession as described in §1107 of the U.S. Bankruptcy Code or (ii) a
trustee if appointment of such trustee has been ordered pursuant to §1104 of the
U.S. Bankruptcy Code (in either such case, a “Debtor”) organized under the laws
of the United States or any state therein, or (b) on which the related obligor
is required to pay interest on a current basis and, with respect to either
clause (a) or (b) above, the terms of which have been approved by an order of
the United States Bankruptcy Court, the United States District Court, or any
other court of competent jurisdiction, the enforceability of which order is not
subject to any pending contested matter or proceeding (as such terms are defined
in the Federal Rules of Bankruptcy Procedure) and which order provides that:
(i) (A) such DIP Collateral Obligation is fully secured by liens on the Debtor’s
otherwise unencumbered assets pursuant to §364(c)(2) of the U.S. Bankruptcy Code
or (B) such DIP Collateral Obligation is secured by liens of equal or senior
priority on property of the Debtor’s estate that is otherwise subject to a lien
pursuant to §364(d) of the U.S. Bankruptcy Code and (ii) such DIP Collateral
Obligation is fully secured based upon a current valuation or appraisal report.
Notwithstanding the foregoing, such a loan will not be deemed to be a DIP
Collateral Obligation following the emergence of the related debtor in
possession from bankruptcy protection under Chapter 11 of the U.S. Bankruptcy
Code.

 

“Dispute Time” means, with respect to any Portfolio Asset, 5:00 p.m. New York
time on the Business Day following the date on which the Collateral Manager
receives a notice of valuation from the Administrative Agent with respect to
such Portfolio Asset.

 

“Disputed Asset” has the meaning specified in Section 11 hereof.

 

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“Distressed Exchange” means in connection with any Asset, a distressed exchange
or other distressed debt restructuring has occurred, as reasonably determined by
the Collateral Manager, pursuant to which the issuer or obligor of such Asset
has issued to the holders of such Asset a new security or package of securities
or obligations that, in the sole judgment of the Collateral Manager, amounts to
a diminished financial obligation or has the purpose of helping the issuer of
such Asset avoid default; provided that no Distressed Exchange shall be deemed
to have occurred if the securities or obligations received by any Borrower Party
in connection with such exchange or restructuring meet the Eligibility
Requirements.

 

“Dividend Release Ratio” has the meaning specified in the Fee Letter.

 

“Dividend Release Ratio Condition” means, as of any date of determination, a
condition that will be satisfied if (i) the OC Ratio on such date is equal to or
greater than the applicable Dividend Release Ratio and (ii) the Minimum Required
Equity Investment would be maintained after giving effect to any related
distribution.

 

“Dollar” means the lawful currency of the United States of America.

 

“Domicile” or “Domiciled” means with respect to any issuer of, or obligor with
respect to, an Asset:

 

(a)     except as provided in clause (b) below, its country of organization; or

 

(b)     if it is organized in a Tax Jurisdiction, each of such jurisdiction and
the country in which, in the Collateral Manager’s good faith estimate, a
substantial portion of its operations are located or from which a substantial
portion of its revenue is derived, in each case directly or through subsidiaries
(which shall be any jurisdiction and country known at the time of designation by
the Collateral Manager to be the source of the majority of revenues, if any, of
such issuer or obligor).

 

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

“Eligibility Requirements” has the meaning set forth on Schedule C hereto.

 

“Eligible Investments” has the meaning set forth on Schedule G hereto.

 

“Eligible Obligor” means, on any date of determination, any obligor that:

 

(a)     is a business organization (and not a natural person) duly organized and
validly existing under the laws of its jurisdiction of organization;

 

(b)     is not a Governmental Authority;

 

(c)     is not controlled by the Borrower, the Collateral Manager or an
Affiliate of any such Person; and

 

(d)     such obligor (x) to the best of the knowledge of each Borrower Party is
not the subject of or threatened with any proceeding which would result in, a
Bankruptcy Event, as of the date on which such Portfolio Asset is committed to
be purchased, and (y) in the Collateral Manager’s reasonable business judgment,
is not in financial distress or experiencing a material adverse change in its
condition, financial or otherwise.

 

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“Engagement Letter” means (i) the engagement letter dated as of October 10, 2018
between the Collateral Manager and BNP Paribas Securities Corp. relating to the
CLO Securities and (ii) each engagement letter relating to CLO Securities
executed after the Closing Date between the Collateral Manager (and/or an
Affiliate of the Collateral Manager) and BNP Paribas Securities Corp..

 

“Equity Security” means any security or debt obligation which at the time of
acquisition, conversion or exchange is not eligible for purchase by any Borrower
Party as an Asset hereunder; it being understood that Equity Securities may not
be purchased by any Borrower Party but may be received by any Borrower Party in
exchange for an Asset or a portion thereof in connection with an insolvency,
bankruptcy, reorganization, debt restructuring or workout of the issuer thereof.

 

“ERISA” has the meaning set forth in Section 8(b)(iv) hereof.

 

“EU Bail-In Legislation Schedule” means the document described as such and
published by the Loan Market Association (or any successor person from time to
time).

 

“Event of Default” means the occurrence of any of the following:

 

(a)     any Borrower Party fails to pay any principal of any Loan on the date
payment of principal becomes due; provided that if such date is not the Maturity
Date, if such failure results solely from an administrative error or omission by
the Custodian, such failure continues for a period of three (3) Business Days
after written notice thereof to the Custodian;

 

(b)     any Borrower Party fails to pay any interest on any Loan, or other
amounts due hereunder on the date payment becomes due; provided that if such
date is not the Maturity Date, such failure must continue for five (5) Business
Days after written notice thereof by the Administrative Agent to the Custodian,
the Borrower and the Collateral Manager;

 

(c)     any Borrower Party fails to perform or observe any other covenant or
agreement (other than those specified in another clause of this definition)
contained herein or in any Transaction Document on its part to be performed or
observed and such failure continues uncured for 30 days after receipt by the
Borrower from the Administrative Agent of written notice of such failure
provided that if such failure cannot be cured, such Event of Default shall occur
immediately after receipt by the Borrower of such written notice from the
Administrative Agent;

 

(d)     any representation or warranty of any Borrower Party, the Preferred
Investor or the Collateral Manager herein is or shall be incorrect or misleading
in any material respect when made and is uncured for 30 days after receipt by
such party from the Administrative Agent of written notice of such failure
provided that if such failure cannot be cured, such Event of Default shall occur
immediately after receipt by the Borrower of such written notice from the
Administrative Agent;

 

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(e)     the occurrence of a Bankruptcy Event with respect to any Borrower Party
or Preferred Investor;

 

(f)     the occurrence of an OC Ratio Breach and such OC Ratio Breach remains
unremedied for a period of ten consecutive Business Days without being cured;

 

(g)     one or more judgments or decrees shall be entered and outstanding
against the Borrower Parties involving in the aggregate a liability of $100,000
or more, and the same shall not have been vacated, satisfied, discharged, stayed
or bonded pending appeal for a period of 30 consecutive days;

 

(h)     the Borrower Parties shall have made payments to settle any litigation,
claim or dispute totaling more than $100,000 in the aggregate;

 

(i)     the occurrence of a Collateral Manager Default; or

 

(j)     the Borrower shall fail to obtain a substantive non-consolidation
opinion from reputable counsel within 60 days after the Administrative Agent
(following consultation with counsel of national reputation) has notified the
Borrower that, as a result of a Change in Law, it reasonably believes that the
Borrower may no longer qualify as a bankruptcy remote entity with respect to the
Preferred Investor or the Collateral Manager under customary criteria.

 

“Excepted Property” means the U.S.$250 proceeds of the issuance of any Borrower
Party’s ordinary shares, a U.S.$250 transaction fee payable to any Borrower
Party in connection with the Transaction Documents, the bank account in which
such monies are held (which shall not be any of the Accounts) and all interest
and other proceeds received in connection therewith.

 

“Excess CCC/Caa Obligations” means the amount equal to the excess of (a) the
aggregate Principal Balance, calculated without duplication, of all CCC/Caa
Obligations that are Traded Portfolio Assets over (b) an amount equal to 5.0% of
the Collateral Principal Amount; provided that in determining which CCC/Caa
Obligations shall be included in the Excess CCC/Caa Obligations, the CCC/Caa
Obligations having the lowest Market Value shall be deemed to constitute the
Excess CCC/Caa Obligations.

 

“Excess Concentration” means for each Concentration Limitation other than the
limitation set forth in clause (vi) of the definition of Concentration
Limitations, as of any Business Day, the sum of the portion (without
duplication) of the Collateral Adjusted Principal Amount of each of the Traded
Portfolio Assets that causes such Concentration Limitation to be exceeded.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

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“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a Lender or required to be withheld or deducted from a payment to a
Lender: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Lender being organized under the laws of, or having its principal office
or its applicable lending office located in, the jurisdiction imposing such Tax
(or any political subdivision thereof) or (ii) that are Taxes imposed as a
result of a present or former connection between such Lender and the
jurisdiction imposing such Tax (other than connections arising from such Lender
having executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under,
engaged in any other transaction pursuant to or enforced this Agreement or any
Loan, or sold or assigned an interest in this Agreement or any Loan), (b) U.S.
federal withholding Taxes imposed on amounts payable to or for the account of
such Lender with respect to an applicable interest in a Loan or obligation under
this Agreement pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan or obligation (other than pursuant to an
assignment request by a Borrower Party) or (ii) such Lender changes its lending
office, except in each case to the extent that, pursuant to Section 2(j),
amounts with respect to such Taxes were payable either to such Lender's assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its lending office, (c) Taxes attributable to the
Administrative Agent’s or Lender’s failure to timely provide to a Borrower Party
(and to replace or update, as necessary) two complete and executed copies of the
applicable IRS Form W-8BEN, W-8BEN-E, W-8ECI, W-8IMY (with all required
attachments), or W-9, and (d) any U.S. federal withholding Taxes imposed under
FATCA.

 

“Expedited Borrowing Request” has the meaning set forth in Section 2(c) hereof.

 

“Facility Factor” has the meaning specified in the Fee Letter.

 

“Facility Fee” has the meaning specified in the Fee Letter.

 

“Fee Letter” means the letter agreement dated on or about the date hereof among
the Borrower Parties, the Lender, the Administrative Agent, the Collateral
Manager, and the Preferred Investor.

 

“First Fee Trigger Event” means an event that occurs if a CLO Takeout Date has
not occurred during any consecutive 12-month period.

 

“First-Lien Last-Out Loan” has the meaning set forth on Schedule F hereto.

 

“FATCA” means Sections 1471 through 1474 of Code, any current or future
regulations, published guidance or official interpretations thereof, any
applicable agreements entered into pursuant to Section 1471(b)(1) of the Code,
any applicable intergovernmental agreement entered into in connection with the
implementation of such Sections of the Code, or any legislation, guidance notes,
rules or official administrative practices adopted pursuant to any such
intergovernmental agreement.

 

“GAAP” means generally accepted accounting principles (as in effect in the
United States).

 

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“Group I Country” means the Netherlands, Australia, New Zealand and the United
Kingdom (or such other countries as may be notified by Moody’s to the Collateral
Manager from time to time).

 

“Group II Country” means Germany, Ireland, Sweden and Switzerland (or such other
countries as may be notified by Moody’s to the Collateral Manager from time to
time).

 

“Group III Country” means Austria, Belgium, Denmark, Finland, France,
Liechtenstein, Luxembourg and Norway (or such other countries as may be notified
by Moody’s to the Collateral Manager from time to time).

 

“Group IV Country” means Greece, Italy, Portugal and Japan (or such other
countries as may be notified by Moody’s to the Collateral Manager from time to
time).

 

“Governmental Authority” means, with respect to any Person, any nation or
government, any state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any body or entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person.

 

“Incurrence Covenant” means a covenant by any borrower to comply with one or
more financial covenants only upon the occurrence of certain actions of the
borrower, including a debt issuance, dividend payment, share purchase, merger,
acquisition or divestiture.

 

“Indemnitee” has the meaning set forth in Section 13(e) hereof.

 

“Independent Bid” has the meaning specified in Section 11 hereof.

 

“Independent Dealer” means each of Bank of America Merrill Lynch, JPMorgan
Chase, Citibank, Deutsche Bank, Goldman Sachs, Morgan Stanley, Royal Bank of
Canada, UBS, Barclays, BNP Paribas, Credit Suisse, GE Capital, Jefferies, The
Royal Bank of Scotland, Scotiabank, Societe Generale, Wells Fargo, Antares,
Capital One, Bank of Montreal, Key Bank, Fifth Third Bank, Nomura, Sun Trust,
Citizens Bank or any Affiliate of any of the foregoing and any other dealer
mutually agreed upon by the Administrative Agent and the Collateral Manager;
provided that neither the Collateral Manager nor any of its Affiliates shall be
considered an Independent Dealer, provided, further, that the Administrative
Agent shall be permitted upon at least 15 Business Days’ prior written notice to
advise the Collateral Manager that one or more dealers listed herein is no
longer considered to be an Independent Dealer, if in the Administrative Agent’s
commercially reasonable discretion such Independent Dealer has largely or
entirely exited its loan trading business. For each Disputed Asset, the agent of
such Asset shall also be considered an Independent Dealer with respect to such
Asset.

 

“Individual Lender Maximum Funding Amount” means the amount each Lender has
agreed to make available to make Loans in accordance herewith in a principal
amount at any one time outstanding not to exceed with respect to each Lender the
Dollar amount set forth opposite such Lender’s name on Schedule B hereto or the
amount set forth on the applicable Assignment and Assumption relating to such
Lender, as applicable, as such amount may be reduced or increased from time to
time pursuant to assignments by or to the Lenders pursuant to Section 13(c).

 

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“Ineligible Asset” means, on the earlier to occur of (i) a CLO Takeout Date and
(ii) the date of the final offering memorandum with respect to the related
Offering, any Asset that does not satisfy the eligibility criteria set forth in
the applicable CLO Subsidiary’s indenture (or similar agreement) governing the
issuance of the related CLO Securities, expected to be dated as of such CLO
Takeout Date.

 

“Initial Period” means the period commencing on the date hereof, and ending on
(and excluding) the earliest of (i) the date on which the Preferred Investor has
purchased Preference Shares in an amount of at least U.S.$7,500,000, (ii) the
date on which an initial Loan is made to the Borrower Parties and (iii) the
Acquisition Date as of which the Borrower Parties have purchased, or entered
into commitments to purchase, Assets with aggregate Purchase Prices (to be added
on a trailing basis from the date hereof) equal to at least U.S.$7,500,000.

 

“Interest Accrual Period” means each period from, and including, one Payment
Date to, but excluding, the next following Payment Date, except that the initial
Interest Accrual Period shall commence on, and include, the date of the first
Loan under this Agreement.

 

“Interest Collection Accounts” means the Borrower Interest Collection Account
and each CLO Subsidiary Interest Collection Account.

 

“Interest Collections” means, (i) all payments and collections owing to any
Borrower Party in its capacity as lender and attributable to interest on any
Asset or other Borrower Collateral, including scheduled payments of interest and
payments of interest relating to principal prepayments, all guaranty payments
attributable to interest and proceeds of any liquidations, sales, dispositions
or securitizations attributable to interest on such Asset or other Borrower
Collateral, all payments of principal on Eligible Investments purchased with or
representing funds held in the Interest Collection Accounts or otherwise
purchased with or representing Interest Collections, and all interest, earnings
or income on Eligible Investments purchased with or representing funds held in
any Account or otherwise purchased with Interest Collections, Principal
Collections or Preference Share subscription proceeds, (ii) any commitment,
delayed compensation, ticking, upfront, underwriting, prepayment, origination or
amendment fees received in respect of any Asset, (iii) all amounts received in
connection with any Asset due to any yield protection, increased cost, tax,
expense indemnity or similar provision in the related underlying instruments of
such Asset and (iv) any fees or other amounts not representing principal
received in connection with the sale or other disposition of any Asset.

 

“Letter of Credit” means a facility whereby (i) a fronting bank (“LOC Agent
Bank”) issues or will issue a letter of credit (“LC”) for or on behalf of a
borrower pursuant to an underlying instrument, (ii) in the event that the LC is
drawn upon and the borrower does not reimburse the LOC Agent Bank, the
lender/participant is obligated to fund its portion of the facility and (iii)
the LOC Agent Bank passes on (in whole or in part) the fees it receives for
providing the LC to the lender/participant.

 

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“LIBOR” means, (A) with respect to a Loan, the rate per annum for the related
LIBOR Interest Period (reset daily) determined by the Administrative Agent by
dividing (the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1% per annum) (i) the ICE Benchmark Administration LIBOR (“IBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of IBA LIBOR as designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, on the date that is two
Business Days preceding (x) for the first LIBOR Interest Period, the date of the
funding of such Loan and (y) for any subsequent LIBOR Interest Period, the last
day of the immediately preceding LIBOR Interest Period by (ii) a number equal to
1.00 minus the LIBOR Reserve Percentage as of such effective date; provided
that, notwithstanding the foregoing, if LIBOR as determined with respect to a
Loan under any method in this definition for any LIBOR Interest Period would be
less than zero, then LIBOR as determined with respect to such Loan shall be
deemed to be zero for all purposes of this Agreement; provided, further that
LIBOR with respect to a Loan for any LIBOR Interest Period that is less than
three months will equal the rate determined by interpolating linearly between
one-month LIBOR and three-month LIBOR as determined pursuant to this definition
and (B) with respect to the Effective Spread, as of any Measurement Date, the
rate published by Reuters (or other commercially available source providing
quotations of IBA LIBOR as designated by the Administrative Agent from time to
time) for deposits with a term of three months at approximately 11:00 a.m.,
London time on such Measurement Date. If such rate specified in clause (i) of
this definition is not available at such time for any reason, then such rate
shall mean the rate of interest equal to the average of the rates per annum at
which Dollar deposits in immediately available funds are offered to the
Administrative Agent's LIBOR office in the London interbank market at or about
11:00 a.m. London time two Business Days prior to the beginning of such LIBOR
Interest Period for delivery on the first day of such LIBOR Interest Period, and
in an amount approximately equal to the amount of the Loan and for a period
approximately equal to such LIBOR Interest Period. The Administrative Agent
shall promptly notify the Collateral Manager of “LIBOR” determined in accordance
with the procedures described in the two preceding sentences. Notwithstanding
the foregoing, from and after the first LIBOR Interest Period to begin after the
execution and effectiveness of a Base Rate Amendment, “LIBOR” with respect to
each Loan will be calculated as the sum of the Alternate Base Rate and the
applicable Adjustment Margin (if any) specified in such Base Rate Amendment
(provided that, if such rate is less than zero on any determination date, the
Alternate Base Rate shall be deemed to be zero on such date of determination).

 

“LIBOR Interest Period” means, with respect to any Loan, the period beginning on
(and including) the date on which such Loan is made or continued and shall end
on (but exclude) the last Business Day of the month prior to the next Payment
Date; provided that, if such LIBOR Interest Period would otherwise end on a day
which is not a Business Day, such LIBOR Interest Period shall end on the next
following Business Day (unless such next following Business Day is the first
Business Day of a calendar month, in which case such LIBOR Interest Period shall
end on the Business Day next preceding such numerically corresponding day). At
the end of each LIBOR Interest Period, if such Loan is not repaid in full, the
then outstanding principal amount of such Loan shall be continued for a new
LIBOR Interest Period commencing at the end of the prior LIBOR Interest Period
and ending on (but excluding) the last Business Day of the month prior to the
next following Payment Date.

 

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“LIBOR Reserve Percentage” means, as of any date of determination, the
percentage in effect on such day under Regulation D of the Board of Governors of
the Federal Reserve System (or any successor) as the maximum reserve requirement
applicable with respect to "Eurocurrency Liabilities" (as such term is defined
in Regulation D).

 

“Loans” has the meaning specified in Section 2(a) hereof.

 

“Maintenance Covenant” means a covenant by any borrower to comply with one or
more financial covenants during each reporting period applicable to such Asset,
whether or not such borrower has taken any specified action.

 

“Market Value” means with respect to any Portfolio Asset on any date of
determination, an amount expressed in Dollars equal to the mark-to-market value
(excluding accrued interest) (a) which, if such Portfolio Asset is not a CCC/Caa
Obligation or a Defaulted Obligation and if three or more dealer bids are
available from a Pricing Source selected by the Administrative Agent, shall be
equal to the average of such dealer bids as calculated by the Administrative
Agent, or (b) which, if either (i) such Portfolio Asset is a CCC/Caa Obligation
or a Defaulted Obligation or (ii) such Portfolio Asset is not a CCC/Caa
Obligation or a Defaulted Obligation and three or more dealer bids are not
available from a Pricing Source, shall be as determined by the Administrative
Agent in a commercially reasonable manner on such date or, (with respect to a
Portfolio Asset that is not a CCC/Caa Obligation or a Defaulted Obligation only)
if such a determination is not made on such date, the mark-to-market value
(excluding accrued interest) most recently determined by the Administrative
Agent in a commercially reasonable manner with respect to such Portfolio Asset;
provided that in the event the Collateral Manager disagrees with any Market
Value determination not determined using a Pricing Source, the Market Value
shall be determined pursuant to the Calculation Dispute Mechanism; provided,
further that any Market Value determination made using a Pricing Source shall be
conclusive and binding absent manifest error.

 

“Material Adverse Effect” means, with respect to any Person (a) a material
adverse change in, or a material adverse effect upon, the operations, business,
properties, assets, liabilities (actual or contingent) or condition (financial
or otherwise) of such Person or such Person and its Subsidiaries taken as a
whole; (b) a material impairment of the ability of such Person to perform its
obligations under any Transaction Document; (c) a material adverse effect upon
the legality, validity, binding effect or enforceability against such Person of
any Transaction Document or (d) a material adverse effect upon the rights and
the remedies of the Lender under any Transaction Document.

 

“Material Documents” means, with respect to any Asset (a) a complete copy of the
agreement specifying the terms, and governing the repayment, of such Asset, (b)
the informational memorandum, offering memorandum or similar document, if any,
relating to such Asset, (c) any available marketing materials with respect to
such Asset, (d) any computational materials, stress runs, and cash flow analyses
with respect to such Asset received by the Collateral Manager and (e) such other
documents and materials with respect to such Asset as may be reasonably
requested by the Administrative Agent.

 

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“Maturity Date” means the earlier to occur of (a) the Outside Settlement Date,
and (b) the date on which the Administrative Agent gives notice to the Borrower
Parties, the Collateral Manager and the Preferred Investor following the
occurrence of and during the continuation of an Event of Default that the entire
Outstanding Principal Amount of Loans shall be due and payable.

 

“Maximum Facility Amount” means (a) on the date hereof, U.S.$22,500,000, so long
as Section 7(a)(i) and Section 7(a)(ii) are satisfied and (b) upon the purchase
of additional Preference Shares, the lesser of (i) the product of (x) the
Facility Factor and (y) the then funded Subscription Amount as of such date and
(ii) U.S.$100,000,000; provided that, if the Outstanding Principal Amount of the
Loans is less than 50% of the Maximum Facility Amount for any consecutive
six-month period, the Maximum Facility Amount shall become the Outstanding
Principal Amount of the Loans as of the close of business on the last day of
such six-month period; provided further that, it is understood that this
facility is an uncommitted facility, and the Administrative Agent or any Lender
may at any time, without notice, refuse to make any Loan (including after
approving any Approval Request). However, any Lender may issue an agreement to
fund, in writing, following its receipt of a Borrowing Request, at which point,
such Lender shall be committed to fund under such Borrowing Request only.

 

“Measurement Date” means any day on which any Borrower Party purchases, or
enters into a commitment to purchase, a Portfolio Asset, or the day on which a
default of a Portfolio Asset occurs.

 

“Minimum Diversity Test” has the meaning set forth on Schedule F hereto.

 

“Minimum Equity Investment” means the minimum amount of equity investment in the
Borrower, so that, as of any date of determination, the difference between (i)
the Collateral Principal Amount minus (ii) the Outstanding Principal Amount of
the Loans is equal to or greater than the $7,500,000.

 

“Minimum Floating Spread Test” has the meaning set forth on Schedule F hereto.

 

“Minimum Weighted Average Coupon Test” has the meaning set forth on Schedule F
hereto.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Moody’s Industry Classification” means the Moody’s Industry Classification
Group List set forth in Schedule D-1 hereto.

 

“Moody’s Maximum Rating Factor Test” has the meaning set forth on Schedule F
hereto.

 

“Moody’s Minimum Weighted Average Recovery Rate Test” has the meaning set forth
on Schedule F hereto.

 

“Moody’s Rating” means with respect to any Portfolio Asset, the rating
determined pursuant to Schedule E-1 hereto.

 

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“Moody’s Recovery Amount” means, with respect to any Asset, the product of (x)
the Principal Balance of such Asset and (y) the Moody’s Recovery Rate.

 

“Moody’s Recovery Rate” has the meaning set forth on Schedule F hereto.

 

“Non-Emerging Market Obligor” means an obligor that is Domiciled in (x) any
country that has a country ceiling for foreign currency bonds of at least “Aa2”
by Moody’s and a foreign currency issuer credit rating of at least “AA” by S&P
or (y) without duplication, the United States.

 

“OC Ratio” means, as of any Business Day, the percentage calculated by dividing
the Borrowing Base by the sum (without duplication) of (x) the Outstanding
Principal Amount of the Loans and (y) the aggregate Purchase Price of all Assets
not yet settled for which any Borrower Party has entered into binding
commitments to purchase.

 

“OC Ratio Breach” means, as of any Business Day, a failure of the OC Ratio to be
equal to or greater than 100%.

 

“OC Ratio Posting Account” has the meaning specified in Section 3 hereof.

 

“OC Ratio Posting Excess” has the meaning specified in Section 6(b) hereof.

 

“OC Ratio Posting Payment” has the meaning specified in Section 6(a) hereof.

 

“Offering” means the offering and sale by a CLO Issuer of CLO Securities
expected to settle on a CLO Takeout Date.

 

“Other Taxes” has the meaning specified in Section 2(j) hereof.

 

“Outside Settlement Date” means the date occurring on the earliest of (i) the
Business Day 12 months after the Conversion Date (unless the Conversion Date
occurs as a result of clause (ii) of the definition of “Revolving Period”), (ii)
if the Conversion Date occurs as a result of clause (ii) of the definition of
“Revolving Period”, the CLO Takeout Outside Settlement Date and (iii) the day
that is 48 months after the Closing Date.

 

“Outstanding Principal Amount” means, as of any date of determination, the total
principal amount of Loans made hereunder minus the amount of all repayments and
prepayments of the principal amount of Loans on or prior to such date.

 

“Partial Deferrable Security” means any Asset with respect to which under the
related Underlying Instruments (i) a portion of the interest due thereon is
required to be paid in cash on each payment date therefor and is not permitted
to be deferred or capitalized (which portion shall at least be equal to LIBOR or
the applicable index with respect to which interest on such Asset is calculated
(or, in the case of a fixed rate Asset, at least equal to the forward swap rate
for a designated maturity equal to the scheduled maturity of such Asset)) and
(ii) the issuer thereof or obligor thereon may defer or capitalize the remaining
portion of the interest due thereon.

 

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“Participant Register” has the meaning specified in Section 13(c)(iii) hereof.

 

“Payment Date” means (i) the last Business Day of each of January, April, July
and October, beginning in January 2019, (ii) each CLO Takeout Date and (iii) the
Maturity Date.

 

“Person” means an individual, corporation (including a business trust or a
limited liability company), partnership, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated association
or government or any agency or political subdivision thereof.

 

“Portfolio Asset” means each Asset acquired (or committed to be acquired) (but
excluding Assets that have been (i) sold or (ii) transferred in connection with
an Approved CLO Takeout) by a Borrower Party hereunder, in each case which shall
satisfy the Eligibility Requirements as of the related Acquisition Date.

 

“Portfolio Asset Buy Confirmation” means with respect to any Portfolio Asset,
documentation evidencing, in reasonable detail, the applicable Borrower Party’s
acquisition of such Portfolio Asset, and which shall identify at least the
obligor, price and the Principal Balance of such Portfolio Asset.

 

“Preference Share Subscription Agreement” means a subscription agreement,
substantially in the form of Annex D hereto, between the Borrower and the
Preferred Investor, pursuant to which the Preferred Investor subscribes for the
Preference Shares.

 

“Preference Shares” means the Preference Shares of the Borrower which, as a
class, will have the rights and will be subject to the restrictions set forth in
the memorandum and articles of association of the Borrower and which, following
payment in full of all amounts due to the Lender hereunder, will be redeemed on
the Redemption Date from amounts available for such purpose as provided in the
Preference Share Subscription Agreement.

 

“Prepayment Reserve Accounts” means the Borrower Prepayment Reserve Account and
each CLO Subsidiary Prepayment Reserve Account.

 

“Pricing Source” means each of Loan Pricing Corporation, LoanX, Markit Partners
or any other nationally recognized loan pricing service mutually agreed upon by
the Administrative Agent and the Collateral Manager; provided that neither the
Collateral Manager nor any of its Affiliates shall be a Pricing Source;
provided, further, that the Administrative Agent shall have the ability upon at
least 15 Business Days’ prior written notice to advise the Collateral Manager
that one or more sources listed herein is no longer considered to be a Pricing
Source, provided, further, that the Administrative Agent can only provide such
notice if in its commercially reasonable discretion such Pricing Source has
largely or entirely exited its loan pricing business.

 

“Principal Balance” means, with respect to any Asset as of any date of
determination, the outstanding principal amount of such Asset (including the
maximum outstanding unfunded commitment under such Asset) as of such date of
determination.

 

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“Principal Collection Accounts” means the Borrower Principal Collection Account
and each CLO Subsidiary Principal Collection Account.

 

“Principal Collections” means any and all amounts of collections received with
respect to the Borrower Collateral other than Interest Collections, including
(but not limited to) all collections attributable to principal on such Borrower
Collateral. Net proceeds received by any CLO Issuer from the sale of CLO
Securities will also constitute Principal Collections to the extent of
outstanding Loans made in respect of each Portfolio Asset that is transferred in
connection with the related Approved CLO Takeout under the Transaction
Documents.

 

“Purchased Collateral Obligations Balance”: As of any date of determination,
with respect to any Borrower Party, an amount equal to the aggregate Principal
Balance of all Portfolio Assets acquired by such Borrower Party on and prior to
such date.

 

“Purchase Price” means, with respect to each Portfolio Asset, the Dollar amount
paid (or committed to be paid) by the applicable Borrower Party to acquire such
Asset (excluding purchased accrued interest and assuming that the Portfolio
Asset was fully funded).

 

“Qualified Loan” means any loan made by a commercial bank, an investment bank,
an investment fund or other financial institution; provided that any such loan
is similar to those typically made to a commercial client or syndicated, sold or
participated to a commercial bank or institutional loan investor or other
financial institution in the ordinary course of business.

 

“Redemption Date” has the meaning specified in the Preference Share Subscription
Agreement.

 

“Reference Rate” means BNP Paribas’ prime rate as announced in New York, New
York, from time to time.

 

“Register” has the meaning specified in Section 13(c)(ii) hereof.

 

“Registered” means a debt obligation that was issued after July 18, 1984 and
that is in registered form for purposes of the Code.

 

“Reinvestment” has the meaning specified in Section 5(d) hereof.

 

“Related Parties” has the meaning specified in Section 13(n) hereof.

 

“Relevant Agents” has the meaning specified in Section 13(g) hereof.

 

“Resolution Time” means 3:00 p.m. New York time on the second Business Day
following the day a notice of dispute is sent to the Administrative Agent.

 

“Resolution Value” means, with respect to a Disputed Asset, a single Independent
Bid obtained by a party that :

 

(i)     relates to the full par amount of such Disputed Asset;

 

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(ii)     is notified to the other party, together with reasonable evidence of
such bid, by the Resolution Time; and

 

(iii)     was firm and actionable for a period of at least 2 hours after the
Resolution Time.

 

“Revolving Period” means the period commencing on the Closing Date and ending on
the earlier of (i) the date that is 36 calendar months after the Closing Date
and (ii) if a CLO Takeout Period ends as a result of clause (ii) of the
definition thereof, the date such CLO Takeout Period ends.

 

“S&P” means S&P Global Ratings, an S&P Global business, and any successor or
successors thereto.

 

“S&P Industry Classification” means the S&P Industry Classifications set forth
in Schedule D-2 hereto.

 

“S&P Rating” means with respect to any Portfolio Asset, the rating determined
pursuant to Schedule E-2 hereto.

 

“S&P Recovery Amount” means, with respect to any Asset, the product of (x) the
Principal Balance of such Asset and (y) the S&P Recovery Rate.

 

“S&P Recovery Rate” has the meaning set forth on Schedule F hereto.

 

“Sanctioned Country” has the meaning specified in Section 8(a)(vi)(B) hereto.

 

“Sanctioned Person” has the meaning specified in Section 8(a)(vi)(B) hereto.

 

“Sanctions” has the meaning specified in Section 8(a)(vi)(B) hereto.

 

“Scheduled Principal Payment Amount” means, on each of (i) the day occurring on
(a) if the Conversion Date occurs as a result of clause (ii) of the definition
of “Revolving Period”, the CLO Takeout Amortization Date, or (b) otherwise, 6
calendar months after the Conversion Date (or, if such day is not a Business
Day, the immediately succeeding Business Day) and (ii) the Outside Settlement
Date, in each case an amount equal to (a) the Outstanding Principal Amount of
the Loans on such date minus (b) the applicable Scheduled Targeted Principal
Balance for such date.

 

“Scheduled Targeted Principal Balance” means (a) on the day occurring (i) if the
Conversion Date occurs as a result of clause (ii) of the definition of
“Revolving Period”, the CLO Takeout Amortization Date, or (b) otherwise, 6
calendar months after the Conversion Date (or, if such day is not a Business
Day, the immediately succeeding Business Day), 50% of the Outstanding Principal
Amount of the Loans as of the Conversion Date and (b) on the Outside Settlement
Date, zero.

 

“SEC” means the United States Securities and Exchange Commission.

 

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“Second Fee Trigger Event” means an event that occurs if a CLO Takeout Date has
not occurred during the 12-month period immediately succeeding the 12-month
period described in the definition of First Fee Trigger Event.

 

“Second Lien Loan” means any assignment of or participation interest in or other
interest in a Qualified Loan that (i) is not (and that by its terms is not
permitted to become) subordinate in right of payment to any other obligation of
the obligor of the loan other than a Senior Secured Loan with respect to the
liquidation of such obligor or the collateral for such loan and (ii) is secured
by a valid second priority perfected security interest or lien to or on
specified collateral securing the obligor’s obligations under the loan, which
security interest or lien is not subordinate to the security interest or lien
securing any other debt for borrowed money other than a Senior Secured Loan on
such specified collateral.

 

“Secured Obligations” has the meaning specified in Section 4(d) hereof.

 

“Secured Parties” means the Administrative Agent, the Lenders, each Indemnitee
and their respective successors and assigns.

 

“Securities Act” has the meaning specified in Section 4(d)(i) hereof.

 

“Securities Intermediary” means U.S. Bank National Association, as securities
intermediary, under the Account Control Agreement and each securities
intermediary appointed under any Additional Account Control Agreement.

 

“Securitisation Regulation” means Regulation (EU) 2017/2402, all regulatory
technical standards adopted thereunder and any guidance published in relation
thereto by the European Banking Authority.

 

“Securitisation Regulation Effective Date” means the application date specified
in Article 43 of the Securitisation Regulation, currently being January 1, 2019
(or, if amended, the application date specified in the relevant amendments to
the Securitisation Regulation).

 

“Senior Secured Loan” means any assignment of, participation interest in or
other interest in a Qualified Loan that (i) is secured by a first priority
perfected security interest or lien on specified collateral (subject to
customary exemptions for permitted liens, including, without limitation, any tax
liens or as permitted in the last sentence of this definition), (ii) has the
most senior pre-petition priority (including pari passu with other obligations
of the obligor) in any bankruptcy, reorganization, arrangement, insolvency,
moratorium or liquidation proceedings and (iii) by its terms is not permitted to
become subordinate in right of payment to any other obligation of the obligor
thereof (subject to customary exemptions for permitted liens, including, without
limitation, any tax liens or as permitted in the last sentence of this
definition). For the avoidance of doubt, a Senior Secured Loan (x) may be
subject to permitted liens (including liens securing working capital facilities)
entered into the ordinary course pursuant to the respective credit agreement
with respect to such Asset and (y) may by its terms receive payments after
proceeds are first applied to a working capital facility; provided, that any
loan described in clause (i) above shall be a Senior Secured Loan only to the
extent that any such working capital facility or other debt has a notional
amount less than the sum of (A) the amount of the Senior Secured Loan subject to
the lien hereof and (B) all other first-lien term and revolving loans extended
to the applicable obligor (and for this purpose, any undrawn amounts under a
delayed-draw term loan facility shall be deemed to have been fully drawn).

 

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“Senior Unsecured Loan” means any assignment of or participation interest in or
other interest in an unsecured Qualified Loan that is not subordinated to any
other unsecured indebtedness of the obligor.

 

“Step-Down Obligation” means an obligation which by the terms of the related
Underlying Instruments provides for a decrease in the per annum interest rate on
such obligation (other than by reason of any change in the applicable index or
benchmark rate used to determine such interest rate) or in the spread over the
applicable index or benchmark rate, solely as a function of the passage of time;
provided that an obligation providing for payment of a constant rate of
interest, or a constant spread over a floating rate index or benchmark, as the
case may be, at all times after the date of its acquisition by the applicable
Borrower Party shall not constitute a Step-Down Obligation at and following such
time.

 

“Step-Up Obligation” means any obligation which provides for an increase, in the
case of an obligation which bears interest at a fixed rate, in the per annum
interest rate on such obligation or, in the case of an obligation which bears
interest at a floating rate, in the spread over that applicable index or
benchmark rate, solely as a function of the passage of time; provided that an
obligation providing for payment of a constant rate of interest, or a constant
spread over a floating rate index or benchmark, as the case may be, at all times
after the date of its acquisition by the applicable Borrower Party shall not
constitute a Step-Up Obligation at and following such time.

 

“Structured Finance Obligation” means, any obligation of a special purpose
vehicle secured directly by, referenced to, or representing ownership of, and
the payments of which are principally dependent upon, a pool of receivables or
other assets; provided that, for purposes of this definition, any financial
guarantee insurance policy or other guarantee or “wrap” of such special purpose
vehicle’s obligation to make payments shall be disregarded.

 

“Subordinated Management Fee” means the fee payable to the Collateral Manager on
the final Payment Date, after all Termination Obligations have been paid in
full, pursuant to Section 3(c) of this Agreement, in an amount equal to 0.50%
per annum of the average of (x) the Collateral Principal Amount as of the first
day and (y) the Collateral Principal Amount as of the last day, in each case, of
each calendar month during each Interest Accrual Period, which amount shall
accrue on each Payment Date until the Maturity Date.

 

“Subscription Amount” means the total cash proceeds from the issuance and sale
of Preference Shares to Preferred Investors.

 

“Subsidiary” means, with respect to any Person, a corporation, partnership,
joint venture, limited liability company or other business entity of which a
majority of the shares or securities or other interests having ordinary voting
power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.

 

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“Synthetic Security” means a security or swap transaction (excluding, for
purposes of this Agreement, a participation interest) that has payments
associated with either payments of interest and/or principal on a reference
obligation or the credit performance of a reference obligation.

 

“Target CLO Amount” has the meaning set forth in the Fee Letter.

 

“Target Date” has the meaning specified in Section 2(h)(ii)(B) hereof.

 

“Tax Jurisdiction” means the Bahamas, Bermuda, the British Virgin Islands, the
Cayman Islands, the Channel Islands, the Netherlands Antilles, Singapore, the
Jersey Islands or the U.S. Virgin Islands.

 

“Tax Subsidiary” means a special purpose, wholly-owned Subsidiary of a Borrower
Party that is treated as a corporation for U.S. federal income tax purposes and
is organized to reduce the risk that such Borrower Party may be treated as
engaged in a trade or business in the United States for U.S. federal income tax
purposes or otherwise subject to U.S. federal income tax on a net income basis.

 

“Taxes” has the meaning specified in Section 2(j) hereof.

 

“Termination Obligations” means the sum of accrued and unpaid interest on the
Loans to (but excluding) the date of payment, the Outstanding Principal Amount
of all Loans, any applicable CLO Takeout Fees, and all other amounts (including
without limitation fees, expenses and indemnities) payable to the Administrative
Agent and the Lenders hereunder.

 

“Traded Portfolio Asset” means each Portfolio Asset then owned (or committed to
be acquired) by any Borrower Party, but excluding any Portfolio Assets not yet
settled for which the applicable Borrower Party has entered a binding commitment
to sell.

 

“Transaction Documents” means this Agreement, the promissory note(s) (if any),
the Account Control Agreement, each Additional Account Agreement, the Preference
Share Subscription Agreement, the Engagement Letters, the Collateral Management
Agreement, the Custody Agreement, each Additional Custody Agreement, the Fee
Letter, each CLO Takeout Fee Letter, each CLO Subsidiary Joinder Supplement and
any other agreements pursuant to which the Accounts are established and
maintained and any other documentation required to be executed and delivered by
any Borrower Party from time to time pursuant to this Agreement.

 

“Trust Accounts” means the Borrower Trust Account and each CLO Subsidiary Trust
Account.

 

“UCC” means the Uniform Commercial Code in effect in each applicable
jurisdiction.

 

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“U.S. Bankruptcy Code” means the U.S. Bankruptcy Code, Title 11 of the United
States Code, as amended from time to time.

 

“Underlying Instruments” means with respect to an Asset, the trust deed,
indenture, credit agreement or other agreement pursuant to which an Asset has
been issued or created and each other agreement that governs the terms of or
secures the obligations represented by such Asset or of which holders of such
Asset are the beneficiaries.

 

“U.S. Risk Retention Rules” means the credit risk retention requirements under
Section 15G of the Exchange Act and the applicable rules and regulations
promulgated thereunder (as may be amended from time to time and in effect on the
related date of determination).

 

“Write-Down and Conversion Powers” means, in relation to any Bail-In Legislation
described in the EU Bail-In Legislation Schedule from time to time, the powers
described as such in relation to that Bail-In Legislation in the EU Bail-In
Legislation Schedule.

 

“Zero-Coupon Security” means any obligation that at the time of purchase does
not by its terms provide for the payment of cash interest; provided that if, at
any time after such purchase such obligation provides for the payment of cash
interest, it will cease to be a Zero-Coupon Security.

 

(b)     For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

 

(i)     the terms defined in this Agreement include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;

 

(ii)     references herein to “Sections,” subsections, clauses and other
subdivisions without reference to a document are to designated Sections and
other subdivisions of this Agreement;

 

(iii)     the words “herein,” “hereof,” “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular provision;

 

(iv)     the term “include” or “including” shall mean without limitation by
reason of enumeration;

 

(v)     the Section and subsection titles and headings in this Agreement are for
convenience of reference only and will be disregarded in and have no effect on
any interpretation of the provisions of this Agreement;

 

(vi)     reference to any agreement, instrument or document means such
agreement, instrument, or document as it may be amended or otherwise modified
form time to time, and including all schedules and exhibits thereto; and

 

(vii)     reference to any rule, statute or law means such rule, statute, or law
as it may be amended, supplemented, replaced or superseded from time to time.

 

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SECTION 2.         The REVOLVING Facility

 

(a)     The Maximum Facility Amount. Subject to the terms and conditions set
forth herein, the Lenders agree to make available to the Borrower Parties an
uncommitted credit facility providing for loans (“Loans”) in an aggregate
principal amount not exceeding the lesser of (A) the Maximum Facility Amount as
of the funding date of such Loan and (B) the Borrowing Base as of the funding
date of such Loan (calculated after giving effect to the deposit or investment
of the proceeds on such funding date), which Loans shall be used by the Borrower
Parties to acquire Portfolio Assets. Within the foregoing limits and subject to
the terms, conditions and limitations set forth herein, the Borrower Parties may
borrow, repay and reborrow Loans until the Conversion Date. Notwithstanding
anything in this Agreement to the contrary, the parties hereto acknowledge that
this is an uncommitted facility, and there is no express or implied commitment
on the part of any Lender to provide any Loan, except that, in the case of
Assets approved by means of an Approval Request in the Administrative Agent’s
sole discretion (where such approval has not expired or been rescinded pursuant
to Section 2(b), and if the conditions precedent to the related funding
specified in Section 7 have been satisfied), the Lenders shall not refuse to
fund the related Loans required to settle purchase commitments by the Borrower
Parties made pursuant to Section 2(b)(iii). However, any Lender may issue an
agreement to fund, in writing, following its receipt of a Borrowing Request, at
which point, such Lender shall be committed to fund under such Borrowing Request
only.

 

(b)     Requests for Asset Approval. The Collateral Manager, on behalf of the
Borrower Parties, shall provide to the Administrative Agent (with a copy to the
Borrower) a notice by electronic mail in the form of Annex A with respect to
each Asset proposed to be purchased with, if applicable, funds held in the Trust
Accounts or the proceeds of a Loan or Principal Collections pursuant to
Section 5(d) (together with any attachments required in connection therewith, an
“Approval Request”), together with copies of any Material Documents related to
such Asset requested by the Administrative Agent. The Administrative Agent shall
have the right, acting in its sole and absolute discretion, to approve or reject
any Approval Request and to request additional information regarding any
proposed Asset. If the Administrative Agent receives an Approval Request by
11:00 a.m. New York City time on any Business Day, the Administrative Agent
shall notify the Collateral Manager and the Borrower in writing (including via
electronic mail) whether it has approved or rejected such Approval Request by
3:00 p.m. New York City time on the second Business Day thereafter (it being
understood, for the avoidance of doubt, that any Approval Request received by
the Administrative Agent after 11:00 a.m. New York City time on any Business Day
shall be deemed to have been received on the following Business Day); provided
that if the Administrative Agent does not notify the Collateral Manager and the
Borrower whether it has approved or rejected such Approval Request by 3:00 p.m.
New York City time on the second Business Day after receipt, such Approval
Request shall be deemed to be rejected. No later than 4:30 p.m. New York City
time on the same Business Day that the Collateral Manager and the Borrower
receive an approved Approval Request from the Administrative Agent (or
reconfirmation of an approved Approval Request in accordance with the proviso to
this sentence), the Collateral Manager, on behalf of the Borrower Parties, shall
provide by electronic mail to the Administrative Agent (with a copy to the
Borrower and the Custodian) a copy of the Portfolio Asset Buy Confirmation;
provided that if the Collateral Manager on behalf of a Borrower Party (x) does
not enter into a commitment to purchase a Portfolio Asset on the same Business
Day as the approval of the related Approval Request is first received from the
Administrative Agent and (y) still wishes to purchase such Portfolio Asset, the
Collateral Manager, by 11:00 a.m. New York City time on the next Business Day,
shall request the Administrative Agent to reconfirm to the Collateral Manager
and the Borrower that the related approved Approval Request shall remain valid
until 4:30 p.m. New York City time on such Business Day. The Administrative
Agent shall have the right, acting in its sole and absolute discretion, to
approve or reject any such request.

 

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(c)     Borrowings. If, prior to the Conversion Date, the Collateral Manager
wishes to purchase an Asset on behalf of a Borrower Party for which the Approval
Request has been approved pursuant to Section 2(b) and funds in the Trust
Accounts are insufficient to provide for such purchase, the Collateral Manager
shall request a Loan for such purpose by, no later than 3 p.m., New York City
time, on the second Business Day preceding the proposed date of such Loan,
providing to the Administrative Agent (with a copy to the Borrower) an
irrevocable notice (which may be signed by the Collateral Manager on behalf of
the Borrower Parties) by electronic mail or facsimile transmission substantially
in the form of Annex B hereto (together with any attachments required in
connection therewith, a “Borrowing Request”). The Administrative Agent shall
notify, as soon as reasonably practical but in no event later than 5:00 p.m. New
York City time two (2) Business Days prior to the proposed date of the Loan, the
Lenders each time it receives a Borrowing Request. Unless otherwise agreed to by
the Lenders, each Loan shall be in a minimum principal amount of U.S.$1,000,000
and shall be in an amount (not less than zero) equal to (i) the Purchase Price
of the Asset, together with any purchased accrued interest with respect thereto
(as specified in the Approval Request) minus (ii) the sum of (A) the balance (if
any) in the Trust Accounts and (B) any proceeds expected to be received by the
Borrower in connection with the issuance and sale of any Preference Shares
required or expected to be issued pursuant to Section 6(c) in connection with
the purchase of such Asset. To the extent that more than one Lender is a party
hereto, each Loan shall consist of loans made by the Lenders ratably in
accordance with their Individual Lender Maximum Funding Amounts. Each Lender at
its option may make any Loan or portion of a Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan and may at any time
cause any Loan to be transferred to any domestic or foreign branch or Affiliate
of such Lender. Upon satisfaction of the conditions to borrowing set forth in
this Section 2, the Lenders shall advance the applicable principal amount of
each Loan on the date specified in the related Borrowing Request and the
proceeds thereof shall be paid into the Borrower Trust Account or otherwise at
the direction of the Borrower (or the Collateral Manager on behalf of the
Borrower Parties) as set forth in the Borrowing Request for application toward
the acquisition cost of the related Asset. The Lenders shall not fund any Loans
to any Borrower Party if a Default has occurred and is continuing.

 

Notwithstanding the preceding paragraph, the Collateral Manager, on behalf of
the Borrower Parties, may deliver a Borrowing Request to the Administrative
Agent on the first or second Business Day prior to the proposed date of the
funding of a Loan (an “Expedited Borrowing Request”). Upon receipt of an
Expedited Borrowing Request, the Administrative Agent shall promptly notify the
Lenders of such Loan, and the Lenders shall use commercially reasonable efforts
to make such Loan on the proposed funding date set forth in the Expedited
Borrowing Request subject to the terms and conditions for borrowings set forth
in this Agreement, except that such Loan may be advanced at a rate per annum
equal to the Reference Rate plus the Applicable Margin and shall be
automatically refinanced within three (3) Business Days of the funding of such
Loan with a LIBOR-based Loan; provided, that if the Lenders are unable to make a
Loan pursuant to an Expedited Borrowing Request due to the occurrence of a force
majeure, or any other unexpected and unforeseen event, including, without
limitation, market disruptions, the Lenders shall make such Loan subject to the
terms and conditions for borrowings set forth in this Agreement as soon as they
are reasonably able to do so.

 

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(d)     Interest. Loans (other than as set forth in the next two succeeding
provisos) shall bear interest at a rate per annum equal to LIBOR plus the
Applicable Margin until repaid; provided that (x) Loans made pursuant to an
Expedited Borrowing Request that have not been refinanced with a LIBOR-based
Loan and (y) any Loan with respect to which LIBOR cannot be determined, shall
bear interest at a rate per annum equal to the Reference Rate plus the
Applicable Margin; provided, further that upon the occurrence and during the
continuance of an Event of Default, the Loans shall bear interest at a rate per
annum equal to LIBOR or the Reference Rate, as applicable, plus the Applicable
Margin plus 2.00%. Interest shall be calculated daily on the basis of a year of
360 days and actual days elapsed. Interest shall accrue on each Loan through but
excluding the date of payment.

 

The Borrower Parties shall pay to the Administrative Agent for the benefit of
the Lenders all accrued and unpaid interest on the Loans and, if applicable, any
related Breakage Costs, on the Maturity Date; provided that the Borrower Parties
shall partially or fully pay accrued and unpaid interest for the related
Interest Accrual Period on each Payment Date (if any) to the extent of Interest
Collections and Principal Collections available for such payment pursuant to
this Agreement (and any unpaid interest shall remain outstanding). Accrued and
unpaid interest on past due amounts shall be payable on demand.

 

In no case shall interest payable hereunder exceed the amount that the Lender
may charge or collect under applicable law.

 

(e)     Administrative Agent Fee. The Borrower Parties shall pay to the
Administrative Agent a fee (the “Administrative Agent Fee”) equal to the
Administrative Agent Fee Amount ; provided, that if an Event of Default or a
Collateral Manager Default has occurred and is continuing, the Administrative
Agent Fee shall be equal to the Adjusted Administrative Fee Amount. The
Administrative Agent Fee with respect to a period shall be computed on the basis
of a 360-day year and the actual number of days elapsed.

 

The Borrower Parties shall pay to the Administrative Agent all accrued and
unpaid Administrative Agent Fees on the Maturity Date; provided that the
Borrower Parties shall partially or fully pay the accrued and unpaid
Administrative Agent Fee for the related Interest Accrual Period on each Payment
Date (if any) to the extent of Interest Collections available for such payment
pursuant to this Agreement (and any unpaid Administrative Agent Fee shall remain
outstanding). Fees paid in accordance with provisions hereof shall not be
refundable under any circumstances.

 

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(f)     Evidence of Loans. The Loans and all payments thereon shall be evidenced
by the Administrative Agent’s loan accounts and records; provided that upon the
request of any Lender, the Loans may be evidenced by a promissory note in the
form of Annex C hereto in addition to such loan accounts and records. Such loan
accounts, records and promissory note shall be conclusive absent manifest error
of the amount of the Loans and payments thereon. Any failure to record any Loan
or payment thereon or any error in doing so shall not limit or otherwise affect
the obligation of the Borrower Parties to pay any amount owing with respect to
the Loans.

 

(g)     Repayment of Principal on CLO Takeout Dates and the Maturity Date. The
entire Outstanding Principal Amount of Loans shall be due and payable on the
Maturity Date, and on the Maturity Date the Borrower Parties shall pay such
amount from the Principal Collection Accounts to the Administrative Agent on
behalf of the Lenders, without notice of default, presentment or demand for
payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character, all of which are hereby expressly waived. On
each CLO Takeout Date, the portion of the Outstanding Principal Amount of Loans
in respect of each Portfolio Asset that is transferred on the related CLO
Takeout Date shall be due and payable on such CLO Takeout Date, and on such CLO
Takeout Date the Borrower Parties shall pay such amount from the Principal
Collection Accounts to the Administrative Agent on behalf of the Lenders,
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor, or other notices or demands of any kind or character,
all of which are hereby expressly waived.

 

(h)     Prepayments.

 

(i)     Optional Prepayments. The Borrower Parties may, upon three Business
Days’ notice to the Administrative Agent, prepay one or more outstanding Loans
in whole, or in part, on any Business Day, together with accrued and unpaid
interest in respect of such Loans through (but excluding) the date of such
prepayment and, if applicable, any related Breakage Costs. Such prepayment may
be made with the proceeds of a sale or liquidation of a Portfolio Asset in
accordance with the Transaction Documents or out of funds available in the
Principal Collection Accounts or Trust Accounts on the date of such prepayment
(including through the issuance of additional Preference Shares).

 

(ii)     Mandatory Prepayments. (A) In connection with any sale or disposition
of a Portfolio Asset pursuant to Section 5, unless the Administrative Agent has
agreed in writing that such proceeds may be used in connection with a
Reinvestment pursuant to Section 5(d), the applicable Borrower Party shall, upon
three (3) Business Days’ notice to the Administrative Agent, use such sale or
disposition proceeds to prepay one or more outstanding Loans in whole, or in
part, on any Business Day, together with accrued and unpaid interest in respect
of such Loans through (but excluding) the date of such prepayment and, if
applicable, any related Breakage Costs; provided, that instead of prepaying a
Loan immediately with such proceeds the Borrower Parties may deposit the
proceeds into the applicable Prepayment Reserve Account and effect such
prepayment on or before the end of the applicable Interest Accrual Period.

 

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(B)     On or before each of (1) the day that is (x) if the Conversion Date
occurs as a result of clause (ii) of the definition of “Revolving Period”, the
CLO Takeout Amortization Date, or (b) otherwise, 6 calendar months after the
Conversion Date (or, if such day is not a Business Day, the immediately
succeeding Business Day) and (2) the Outside Settlement Date (each, a “Target
Date”), the Borrower Parties shall prepay one or more outstanding Loans in
whole, or in part, together with accrued and unpaid interest in respect of such
Loans through (but excluding) the date of such prepayment and, if applicable,
any related Breakage Costs on any one or more Business Days prior to each Target
Date in an amount equal to or greater than, in the aggregate, the Scheduled
Principal Payment Amount for the related Target Date, such that the Outstanding
Principal Amount of the Loans as of such Target Date shall be no greater than
the Scheduled Targeted Principal Balance for such date.

 

(i)     Payments in General. Except as otherwise expressly provided herein, all
payments to the Administrative Agent and the Lenders hereunder shall be made in
Dollars in immediately available funds to the account or accounts designated in
writing to the Borrower by the Administrative Agent and from time to time for
such purpose not later than 2:00 p.m. (New York City time) on the date specified
herein. All payments to the Administrative Agent and the Lenders hereunder shall
be made in full without deduction for any counterclaim, defense, recoupment or
set-off.

 

For purposes hereof, the initial wiring instructions for payments to the
Administrative Agent hereunder shall be:

 

BNP PARIBAS, NEW YORK
Attention: Loan Servicing
ABA: 026 007 689
Account #: 10313000103
Reference: Loan Servicing Clearing Account – JMP Credit Advisors Long-Term
Warehouse

 

(j)     Taxes. (i) Except as required by law, all payments to the Lenders under
this Agreement (including, for purposes of this Section 2(j) and Section 13(p)
the Administrative Agent in its capacity as such, and in each case, any
successor, assignee, or participant) hereunder shall be made free and clear of,
and exempt from, and without any deduction or withholding for or on account of,
any present or future taxes, levies, imposts, duties, assessments, fees or
charges of any nature now or hereafter imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) and all interest,
penalties or additions to tax with respect thereto (“Taxes”). If any Taxes are
required to be withheld or deducted from any payment by the Borrower Parties on
account of any Loan, the Borrower Parties agree to (i) notify the Administrative
Agent of such requirement to withhold or deduct, (ii) withhold or deduct and pay
to the relevant taxing authority the full amount of such Taxes required to be
withheld or deducted, (iii) in the case of Taxes, other than Excluded Taxes, to
pay the Lenders such additional amounts as will result in receipt by the Lenders
of such amounts as would have been received by the Lenders had no deduction or
withholding been made for or on account of any such Taxes, and (iv) promptly
furnish to the Lenders copies of tax receipts evidencing such payment by such
Borrower Party or such other evidence reasonably satisfactory to the
Administrative Agent. In addition, the Borrower Parties hereby agree to pay any
stamp, court or documentary, intangible, recording, filing or similar taxes,
charges or levies that arise from the execution, delivery, enforcement or
registration of, any performance, receipt or perfection of a security interest
under, or otherwise with respect to, this Agreement or any other Transaction
Document (collectively, “Other Taxes”), except any such Taxes that are imposed
with respect to an assignment (other than an assignment at a Borrower Party’s
request). The Borrower Parties shall indemnify and hold harmless each of the
Lenders (including its direct or indirect beneficial owners), and reimburse each
of the Lenders upon its written request, for the amount of any Taxes (other than
Excluded Taxes) imposed on or with respect to any payment made by or on account
of any obligation of the Borrower Parties under any Loan, and Other Taxes, and
the full amount of Taxes (other than Excluded Taxes) imposed by any jurisdiction
on amounts payable under this Section 2(j) (without duplication of any
additional amounts already paid pursuant to this Section 2(j)), and any
reasonable documented expenses arising therefrom or with respect thereto,
regardless of whether the non-Excluded Taxes, Other Taxes, or other reasonable
documented expenses for which indemnity is sought have been correctly or legally
asserted.

 

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(ii)     Each party's obligations under this Section 2(j) shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender and the repayment, satisfaction or
discharge of all obligations under any Transaction Document.

 

(k)     Reporting. The Borrower (or the Collateral Manager on its behalf) shall
provide daily reports (on each Business Day) regarding the Portfolio Assets and
the Borrower Collateral to the Administrative Agent in such form and substance
as the Administrative Agent may reasonably request.

 

(l)     Payment Date Distributions. On each Payment Date and subject to the
terms of Section 2(d), Section 2(e), Section 2(g), Section 2(h), Section 13(d)
and Section 13(p), the Borrower shall apply amounts available in the Borrower
Interest Collection Account as of the close of business on the Business Day
prior to such Payment Date (and to the extent such amounts are insufficient,
amounts available in the Borrower Principal Collection Account as of the close
of business on the Business Day prior to such Payment Date), to make the
following payments:

 

(i)     first, to pay (x) any accrued and unpaid fees and expenses of the
Borrower Parties then due and payable in accordance with Section 13(d)
(excluding any Agent Indemnity Amount) and (y) any Taxes and Other Taxes
(including any liability (including penalties, additions to Tax, interest and
expenses) arising therefrom or with respect thereto) then due and payable by the
Borrower Parties in accordance with Section 2(j);

 

(ii)     second, to pay the Administrative Agent Fee then due and payable in
accordance with Section 2(e);

 

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(iii)     third, to pay (x) first, any interest due and payable on the Loans in
accordance with Section 2(d) and then (y) second, to the Administrative Agent an
amount equal to any accrued and unpaid Facility Fees then due and payable to the
Administrative Agent;

 

(iv)     fourth, to (x) first, repay all or a portion, as applicable, of the
aggregate outstanding principal amount of the Loans in connection with (1) an
optional prepayment in accordance with Section 2(h)(i), (2) after the Conversion
Date, a mandatory prepayment in accordance with Section 2(h)(ii) or (3) a CLO
Takeout Date or the Maturity Date, in accordance with Section 2(g) and then (y)
second, if applicable, pay any related Breakage Costs and then (z) third, if
applicable, pay any increased costs payable in accordance with Section 13(p);

 

(v)     fifth, to pay any Agent Indemnity Amount;

 

(vi)     sixth, if so directed by the Collateral Manager, to make any other
payments, distributions or applications permitted under this Agreement (other
than the payments set forth in paragraphs (vii) and (viii) below), including,
without limitation, to make a Reinvestment from Principal Collections as set
forth in Section 5(d);

 

(vii)     seventh, (x) if such Payment Date is not the final Payment Date and
the Dividend Release Ratio Condition is satisfied or (y) if such Payment Date is
the final Payment Date and the Termination Obligations have been paid in full,
in each case, to pay the Subordinated Management Fee then due and payable in
accordance with Section 3(d); and

 

(viii)     eighth, if such Payment Date is not the final Payment Date, at the
discretion of the Preferred Investor and with the consent of the Collateral
Manager, to pay the Preferred Investors a distribution in accordance with
Section 7(b) of the Preference Share Subscription Agreement; provided that, (x)
the Dividend Release Ratio Condition is satisfied and (y) any distribution on
such Payment Date would not, in the reasonable judgment of the Collateral
Manager, lead to the unavailability of sufficient funds for the Borrower Parties
to make mandatory payments on the Target Dates in accordance with Section
2(h)(ii)(B).

 

On the final Payment Date, all amounts remaining in the Interest Collection
Accounts and the Principal Collection Accounts on the final Payment Date, after
application thereof in accordance with clauses (i) through (viii) above and
following the payment of the Termination Obligations in full, shall be applied
for distribution to the Preferred Investor in accordance with Section 7(c) of
the Preference Share Subscription Agreement.

 

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(m)     Delayed Drawdown Collateral Obligations. On the date that any Delayed
Drawdown Collateral Obligation is acquired by a Borrower Party, the acquisition
of which was approved by the Administrative Agent and the terms of which require
additional payments to be made by such Borrower Party after the acquisition
thereof, (i) the Borrower Parties shall transfer from the Trust Accounts into
the applicable Delayed Drawdown Reserve Account, an amount up to the aggregate
amount of all additional payments required to potentially be made by such
Borrower Party, to the extent such funds are available, and (ii) the Lenders
shall make a Loan in accordance with Section 2(c) to be deposited into the
applicable Delayed Drawdown Reserve Account in an amount equal to the difference
between (x) the aggregate amount of all additional payments to potentially be
made by such Borrower Party after the acquisition of such Delayed Drawdown
Collateral Obligation and (y) the amount transferred into the applicable Delayed
Drawdown Reserve Account pursuant to clause (i). Any amount loaned by the
Lenders and deposited into a Delayed Drawdown Reserve Account shall be deemed to
be a Loan on the date of deposit. All amounts in the Delayed Drawdown Reserve
Accounts will be invested in Eligible Investments. On the date that any
additional payment is required to be made by any Borrower Party in connection
with a Delayed Drawdown Collateral Obligation, amounts will be withdrawn from
the applicable Delayed Drawdown Reserve Account by the applicable Borrower Party
without further consent of the Administrative Agent and applied to make such
additional payment. In the event that any Delayed Drawdown Collateral Obligation
is sold by any Borrower Party or the amount of potential additional payments in
respect of a Delayed Drawdown Collateral Obligation is irrevocably reduced, an
amount equal to the amount of the applicable reduction in such Borrower Party’s
potential additional payment obligations with respect to such Delayed Drawdown
Collateral Obligation will be transferred from the applicable Delayed Drawdown
Reserve Account to the applicable Principal Collection Account and treated as a
prepayment of the applicable Asset. If, at any time, the Administrative Agent
determines, pursuant to the terms and conditions of this Agreement, that a
Delayed Drawdown Collateral Obligation is no longer eligible to collateralize
the CLO Securities, the applicable Borrower Party shall liquidate such Delayed
Drawdown Collateral Obligation, subject to the conditions set forth in Sections
5(a), 5(b) and 9(h), in a timely fashion, in accordance with the standard of
care applicable to such transactions under the Collateral Management Agreement,
so as to minimize the number of additional payments any Borrower Party may be
required to make with respect to such Delayed Drawdown Collateral Obligation
following the Administrative Agent’s determination of the Delayed Drawdown
Collateral Obligation’s ineligibility.

 

SECTION 3.     Accounts

 

(a)     On or before the date of the first Loan, the Borrower shall establish at
the Custodian (i) a securities account (the “Borrower Collateral Account”) to
which all Portfolio Assets held by the Borrower will be credited, (ii) a
securities account (the “Borrower Collection Account”) into which all proceeds
received in connection with Portfolio Assets held by the Borrower (including any
repayments or prepayments of principal and amounts received in connection with
any sale, termination or other dispositions thereof) will be deposited, (iii) a
securities account, which shall be a subaccount of the Collection Account, into
which all interest proceeds from the Portfolio Assets held by the Borrower and
other related Interest Collections will be deposited (the “Borrower Interest
Collection Account”), (iv) a securities account, which shall be a subaccount of
the Collection Account, into which all principal proceeds received in connection
with the Portfolio Assets held by the Borrower (including any repayments or
prepayments of principal and amounts received in connection with any sale,
termination or other dispositions thereof up to the outstanding principal amount
thereof) and other related Principal Collections will be deposited (the
“Borrower Principal Collection Account”), (v) a securities account (the
“Borrower Trust Account”) into which all cash received by the Borrower from the
issuance of Preference Shares, all Loan proceeds and any amounts transferred
from the Borrower Principal Collection Account (with the consent of the Lender)
will be deposited, (vi) a securities account (the “Borrower Prepayment Reserve
Account”) into which funds received by the Borrower in connection with any sale
or disposition of a Portfolio Asset by the Borrower shall be deposited to the
extent the Borrower elects to deposit such funds in accordance with Section
2(h)(ii)(A), (vii) a securities account (the “Borrower Delayed Drawdown Reserve
Account”) into which funds related to Delayed Drawdown Collateral Obligations
held by the Borrower will be deposited pursuant to Section 2(m) and (viii) a
securities account (the “OC Ratio Posting Account”) into which funds related to
OC Ratio Posting Payments shall be deposited pursuant to Section 6. The Borrower
Accounts shall be maintained in accordance with the Account Control Agreement.

 

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(b)     On or before the date of becoming a CLO Subsidiary under this Agreement,
each CLO Subsidiary shall establish at the applicable Custodian (i) a securities
account (the “CLO Subsidiary Collateral Account”) to which all Portfolio Assets
held by such CLO Subsidiary will be credited, (ii) a securities account (the
“CLO Subsidiary Collection Account”) into which all proceeds received in
connection with Portfolio Assets held by such CLO Subsidiary (including any
repayments or prepayments of principal and amounts received in connection with
any sale, termination or other dispositions thereof) will be deposited, (iii) a
securities account, which shall be a subaccount of such CLO Subsidiary
Collection Account, into which all interest proceeds from the Portfolio Assets
held by such CLO Subsidiary and other related Interest Collections will be
deposited (the “CLO Subsidiary Interest Collection Account”), (iv) a securities
account, which shall be a subaccount of such CLO Subsidiary Collection Account,
into which all principal proceeds received in connection with the Portfolio
Assets held by such CLO Subsidiary (including any repayments or prepayments of
principal and amounts received in connection with any sale, termination or other
dispositions thereof up to the outstanding principal amount thereof) and other
related Principal Collections will be deposited (the “CLO Subsidiary Principal
Collection Account”), (v) a securities account (the “CLO Subsidiary Trust
Account”) into which all cash received by such CLO Subsidiary from the issuance
of any preference shares, all Loan proceeds and any amounts transferred from
such CLO Subsidiary Principal Collection Account (with the consent of the
Lender) will be deposited, (vi) a securities account (the “CLO Subsidiary
Prepayment Reserve Account”) into which funds received by such CLO Subsidiary in
connection with any sale or disposition of a Portfolio Asset by such CLO
Subsidiary shall be deposited to the extent such CLO Subsidiary elects to
deposit such funds in accordance with Section 2(h)(ii)(A) and (vii) a securities
account (the “CLO Subsidiary Delayed Drawdown Reserve Account”) into which funds
related to Delayed Drawdown Collateral Obligations held by such CLO Subsidiary
will be deposited pursuant to Section 2(m). The CLO Subsidiary Accounts of each
CLO Subsidiary shall be maintained in accordance with the applicable Additional
Account Control Agreement.

 

(c)     The only permitted withdrawal from or application of assets credited to
the Collateral Accounts shall be to deliver such assets in connection with a
sale, termination, repayment or other disposition of such asset against payment
or exchange. Any cash payment received in connection with any such disposition
shall be deposited into the Collection Accounts or paid to the Administrative
Agent on behalf of the Lenders as provided herein, and any non-cash asset
received in exchange shall be credited to the applicable Collateral Account
promptly.

 

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(d)     The applicable Borrower Party (or the Collateral Manager on behalf of
such Borrower Party) shall instruct each obligor under the Portfolio Assets (or,
with respect to any Agented Asset, the paying agent) to deliver all proceeds in
respect of the Borrower Collateral to its respective Collection Account. The
Borrower Parties shall (or shall cause the Collateral Manager to), on a daily
basis (on each Business Day), identify collections received in each Collection
Account on the second prior Business Day in connection with the Portfolio Assets
as either Principal Collections or Interest Collections and notify in writing to
the Custodian of such determination. Each Borrower Party (or the Collateral
Manager on behalf of the Borrower Parties) shall cause all Principal Collections
received on behalf of the Portfolio Assets in its respective Collection Account
to be promptly (but in any event no later than one Business Day following
receipt thereof) transferred by the Custodian to its respective Principal
Collection Account. Each Borrower Party (or the Collateral Manager on behalf of
the Borrower Parties) shall cause all Interest Collections received on behalf of
the Portfolio Assets in its respective Collection Account to be promptly (but in
any event no later than one Business Day following receipt thereof) transferred
by the Custodian to its respective Interest Collection Account. The only
permitted withdrawal from or application of funds on deposit in the Collection
Accounts, Principal Collection Accounts or Interest Collection Accounts shall be
to make payments expressly provided for in this Agreement or to transfer funds
to the applicable Trust Account in connection with a Reinvestment pursuant to
Section 5(d). Without limiting the foregoing, (x)(i) if the Dividend Release
Ratio Condition is satisfied, on each Payment Date (other than the final Payment
Date) or (ii) if the Termination Obligations have been paid in full, on the
final Payment Date, the Borrower Parties shall, in each case, in accordance with
the priority of payments set forth in Section 2(l), apply amounts in the
Interest Collection Accounts (and to the extent such amounts are insufficient,
amounts in the Principal Collection Accounts) for the payment of the
Subordinated Management Fee to the Collateral Manager; provided, however if such
amounts are insufficient no further payment shall be made of the Subordinated
Management Fee after the final Payment Date and (y) the Borrower shall apply
amounts available in the Borrower Interest Collection Account and the Borrower
Principal Collection Account on each Payment Date pursuant to Section 2(l).

 

(e)     The only permitted withdrawals from or application of funds on deposit
in the Trust Accounts shall be to either (i) make prepayments on outstanding
Loans in accordance with Section 2(h) or other payments expressly provided for
in this Agreement, (ii) purchase Assets or (iii) deposit funds in the applicable
Delayed Drawdown Reserve Account pursuant to Section 2(m).

 

(f)     The only permitted withdrawals from or application of funds on deposit
in the Prepayment Reserve Accounts shall be by the Borrower to make mandatory
prepayments pursuant to Section 2(h)(ii)(A) at or before the end of the
applicable Interest Accrual Period.

 

(g)     The only permitted withdrawals from or application of funds on deposit
in the Delayed Drawdown Reserve Accounts shall be to either (i) make additional
payments with respect to a Delayed Drawdown Collateral Obligation pursuant to
Section 2(m) or (ii) deposit in the applicable Principal Collection Account
pursuant to Section 2(m) as a result of a sale of a Delayed Drawdown Collateral
Obligation, or an irrevocable reduction of the applicable Borrower Party’s
additional payment obligations under a Delayed Drawdown Collateral Obligation
pursuant to the related Underlying Instrument.

 

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(h)     The only permitted withdrawals from or application of funds on deposit
in the OC Ratio Posting Account shall be either (i) to deposit such funds in the
Borrower Trust Account upon an Event of Default or (ii) to make a payment to the
Preferred Investor or the Collateral Manager, as applicable, in accordance with
Section 6(b) hereof.

 

SECTION 4.         Security Interest

 

(a)     Grant. As collateral security for the prompt payment in full and
performance when due (whether at stated maturity, by acceleration, by
liquidation or otherwise) of the Borrower Parties’ obligations to the Secured
Parties hereunder (together, the “Secured Obligations”), the Borrower Parties
hereby pledge to the Administrative Agent on behalf of the Secured Parties and
grant to the Administrative Agent on behalf of the Secured Parties a first
priority continuing security interest in, lien on and right of set-off against,
all of the Borrower Parties’ right, title and interest in, to and under each
Portfolio Asset, all Underlying Instruments with respect to the Portfolio
Assets, the Borrower Parties’ rights under each Transaction Document to which
any is a party, the Borrower’s equity interest in any CLO Subsidiary and all
payments and rights thereunder, each Account and all assets credited to and
funds on deposit in each Account and all proceeds of the foregoing, in each case
whether now owned or hereafter acquired and whether now existing or hereafter
coming into existence, other than Excepted Property (collectively, the “Borrower
Collateral”).

 

(b)     Perfection, Etc. The Borrower shall:

 

(i)     deliver to the Custodian any and all securities and instruments
evidencing or otherwise relating to Borrower Collateral, endorsed and/or
accompanied by such instruments of assignment and transfer in such form and
substance as the Administrative Agent on behalf of the Secured Parties may
reasonably request, including by taking all steps reasonably requested by the
Administrative Agent and necessary to ensure that all Portfolio Assets that are
securities are credited to the applicable Collateral Account by the Custodian
and held in accordance with the Account Control Agreement or Additional Account
Control Agreement, as applicable, and all other Portfolio Assets held by the
Custodian are otherwise marked to reflect the pledge and security interest
provided for in this Agreement; provided that, so long as no Event of Default
shall have occurred and be continuing, the Administrative Agent shall, promptly
upon request of the Borrower or the Collateral Manager, make appropriate
arrangements for making any securities or instrument pledged by the Borrower
Parties available to the Borrower Parties or the Collateral Manager for purposes
of presentation, collection or renewal (any such arrangement to be effected, to
the extent deemed appropriate by the Administrative Agent, against trust receipt
or like document);

 

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(ii)     give, execute, deliver, file and/or record any financing statement,
notice, instrument, document, agreement or other papers, in each case requested
by the Administrative Agent, that may be necessary or desirable (in the
reasonable judgment of the Administrative Agent) to create, preserve, perfect or
validate the security interest granted hereunder or to enable the Administrative
Agent on behalf of the Secured Parties to exercise and enforce its rights
hereunder with respect to such pledge and security interest;

 

(iii)     permit the Administrative Agent or any Lender or its agents or
representatives to visit the offices of the Borrower Parties during normal
office hours and upon reasonable notice to examine and make copies of all
documents, books, records and other information concerning the Borrower
Collateral and promptly furnish or cause to be furnished to the Administrative
Agent or any Lender any information which the Administrative Agent or any Lender
may reasonably request concerning the Borrower Collateral; and

 

(iv)     preserve and protect the Secured Parties’ first priority security
interest in Borrower Collateral, and take or cause any action requested by the
Administrative Agent and necessary to preserve, defend, protect or perfect the
Secured Parties’ first priority security interest.

 

(c)     Remedies. During the continuance of an Event of Default, the
Administrative Agent on behalf of the Secured Parties may exercise, in addition
to all other rights and remedies granted in this Agreement, and in any other
Transaction Document, all rights and remedies of a secured party under the UCC
and such additional rights and remedies to which a secured party is entitled at
law or in equity.

 

Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below or otherwise required hereby) to or upon the Borrower Parties, the
Collateral Manager, the Preferred Investor or any other Person (all and each of
which demands, presentments, protests, advertisements and notices, or other
defenses, are hereby waived to the extent permitted under applicable law except
as otherwise provided herein), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Borrower Collateral, or any part
thereof, and/or may forthwith sell, assign, give option or options to purchase
or otherwise dispose of and deliver the Borrower Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over the counter market, at any exchange, broker’s
board or office of the Administrative Agent or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best in
its sole discretion, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent shall have the right,
without notice or publication, to adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for such sale, and any such sale may be made at any time or place to which
the same may be adjourned without further notice. The Administrative Agent shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Borrower Collateral so sold, free of any right or equity of redemption of
any Borrower Party, which right or equity of redemption is hereby waived or
released. To the extent permitted by applicable law, the Borrower Parties, the
Collateral Manager, and the Preferred Investor waive all claims, damages and
demands it may acquire against the Administrative Agent and the Secured Parties
arising out of the exercise by the Administrative Agent of any of its rights
hereunder, except for any claims, damages and demands it may have against the
Administrative Agent arising from the willful misconduct or gross negligence of
the Administrative Agent or its affiliates, or any agents or employees of the
foregoing.

 

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The Administrative Agent may, in its discretion during the continuance of an
Event of Default, send notification forms giving the obligors and/or agents on
Portfolio Assets notice of the Administrative Agent’s interest in the Borrower
Collateral on behalf of the Secured Parties and the obligation to make payments
as directed by the Administrative Agent.

 

The rights, powers, privileges and remedies of the Administrative Agent and the
Secured Parties under this Agreement are cumulative and shall be in addition to
all rights, powers, privileges and remedies available to the Administrative
Agent and the Secured Parties at law or in equity or under any other Transaction
Document. All such rights, powers and remedies shall be cumulative and may be
exercised successively or concurrently without impairing the rights of the
Administrative Agent and the Secured Parties hereunder.

 

All rights of action and of asserting claims under the Transaction Documents,
may be enforced by the Administrative Agent without the possession of any notes
or the production thereof in any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the Administrative Agent shall
be brought in its own name as Administrative Agent and any recovery of judgment,
subject to the payment of the reasonable expenses, disbursements and
compensation of the Administrative Agent, each predecessor Administrative Agent
and their respective agents and attorneys, shall be for the ratable benefit of
the holders of any notes and other Secured Parties.

 

In any proceedings brought by the Administrative Agent to enforce the liens
under the Transaction Documents, the Administrative Agent shall be held to
represent all of the Secured Parties, and it shall not be necessary to make any
Secured Party a party to any such proceedings.

 

(d)     Sales.

 

(i)     Each of the Borrower Parties, the Collateral Manager, and the Preferred
Investor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all of the Borrower Collateral, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
“Securities Act”), and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each of the Borrower Parties, the Collateral
Manager, and the Preferred Investor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to the
Administrative Agent on behalf of the Secured Parties than if such sale were a
public sale and, notwithstanding such circumstances, agree that any such private
sale shall not be deemed to have been made in a commercially unreasonable manner
solely by virtue of being a private sale. The Administrative Agent shall be
under no obligation to delay a sale of any of the Borrower Collateral for the
period of time necessary to permit the Borrower Parties to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if the Borrower would agree to do so.

 

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(ii)     Each of the Borrower Parties, the Collateral Manager, and the Preferred
Investor further shall use commercially reasonable efforts to do or cause to be
done all such other acts as may be reasonably necessary to make any sale or
sales of all or any portion of the Borrower Collateral pursuant to this
Section 4(d) valid and binding and in compliance with any and all other
requirements of applicable law.

 

(iii)     Each of the Borrower Parties, the Collateral Manager, and the
Preferred Investor further agrees that a breach of any of their agreements
contained in this Section 4(d) will cause irreparable injury to the
Administrative Agent and the Secured Parties, that the Administrative Agent and
the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every agreement contained in this
Section 4(d) shall be specifically enforceable against the Borrower Parties, the
Collateral Manager, and the Preferred Investor, and each of the Borrower
Parties, the Collateral Manager, and the Preferred Investor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Agreement or any defense relating to the Administrative Agent’s willful
misconduct or gross negligence.

 

(iv)     Section 9-610 of the UCC states that the Secured Parties are able to
purchase the Borrower Collateral only if the Borrower Collateral is sold at a
public sale. The Administrative Agent has advised the Borrower Parties, the
Collateral Manager, and the Preferred Investor that SEC staff personnel have
issued various No Action Letters describing procedures which, in the view of the
SEC staff, permit a foreclosure sale of securities to occur in a manner that is
public for purposes of Article 9 of the UCC, yet not public for purposes of
Section 4(a)(2) of the Securities Act. The UCC permits the Borrower Parties to
agree on the standards for determining whether the Secured Party has complied
with its obligations under Article 9 of the UCC. Pursuant to the UCC, each of
the Borrower Parties, the Collateral Manager, and the Preferred Investor hereby
specifically agrees (x) that it shall not raise any objection to any Secured
Party’s purchase of the Borrower Collateral (through bidding on the obligations
or otherwise) and (y) that a foreclosure sale conducted in conformity with the
principles set forth in the No Action Letters promulgated by the SEC staff
(1) shall be considered to be a “public” sale for purposes of the UCC, (2) shall
be considered commercially reasonable notwithstanding that the Secured Party has
not registered or sought to register the Borrower Collateral under the
Securities Act, even if the Borrower Parties agree to pay all costs of the
registration process, and (3) shall be considered to be commercially reasonable
notwithstanding that the Secured Party purchases the Borrower Collateral at such
a sale.

 

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(v)     Each of the Borrower Parties, the Collateral Manager, and the Preferred
Investor agrees that the Administrative Agent shall not have any general duty or
obligation to make any effort to obtain or pay any particular price for any
Borrower Collateral sold by the Administrative Agent pursuant to this Agreement.
The Administrative Agent may, in its sole discretion, among other things, accept
the first bid received, or decide to approach or not to approach any potential
purchasers. Each of the Borrower Parties, the Collateral Manager, and the
Preferred Investor hereby agrees that the Administrative Agent shall have the
right to conduct, and shall not incur any liability as a result of, the sale of
any Borrower Collateral, or any part thereof, at any sale conducted in a
commercially reasonable manner, it being agreed by the parties hereto that some
or all of the Borrower Collateral is or may be of one or more types that
threaten to decline speedily in value. The Borrower Parties, the Collateral
Manager, and the Preferred Investor hereby waive any claims against the
Administrative Agent arising by reason of the fact that the price at which any
of the Borrower Collateral may have been sold at a private sale was less than
the price that might have been obtained at a public sale or was less than the
aggregate amount of the Borrower Parties’ obligations under the Agreement, even
if the Administrative Agent accepts the first bid received and does not offer
any Borrower Collateral to more than one bidder; provided that the
Administrative Agent has acted in a commercially reasonable manner in conducting
such private sale. Without in any way limiting the Administrative Agent’s right
to conduct a foreclosure sale in any manner which is considered commercially
reasonable, each of the Borrower Parties, the Collateral Manager, and the
Preferred Investor hereby agrees that any foreclosure sale conducted in
accordance with the following provisions (including, without limitation, Section
4(d)(vi) below) shall be considered a commercially reasonable sale, and each of
the Borrower Parties, the Collateral Manager, and the Preferred Investor hereby
irrevocably waives any right to contest any such sale conducted in accordance
with the following provisions:

 

(1)     the Administrative Agent conducts such foreclosure sale in the State of
New York;

 

(2)     such foreclosure sale is conducted in accordance with the laws of the
State of New York; and

 

(3)     not more than thirty days before, and not less than three Business Days
in advance of such foreclosure sale, the Administrative Agent notifies the
Borrower, the Collateral Manager, and the Preferred Investor at the address set
forth herein of the time and place of such foreclosure sale.

 

(vi)     Notwithstanding anything in this Section to the contrary, (i) the
Administrative Agent shall give not less than two (2) Business Days prior
written notice to the Collateral Manager of any proposed private sale, transfer
or other disposition of any Borrower Collateral, (ii) the Collateral Manager
and/or the Preferred Investor may, but is not required to, offer to buy any item
of Borrower Collateral following receipt of the notice described in clause (i)
provided that the Administrative Agent shall be entitled to reject such offer in
its sole discretion and, notwithstanding the delivery of such notice or the
receipt of such offer, shall remain entitled to engage other potential buyers
and continue with any proposed private sale, transfer or other disposition
described in such notice or to refrain from selling any such item of Borrower
Collateral, in each case, its sole discretion, and (iii), to the extent any
Borrower Collateral is to be disposed of in a public sale, the Collateral
Manager and the Preferred Investor (and any Affiliate or designee thereof) shall
be entitled, subject to and in accordance with any rules of such public sale
established by the Administrative Agent including any standard and customary
eligibility requirements for bidders in such public sale, to bid on each such
item of Borrower Collateral being sold, transferred or otherwise disposed of,
subject to the same terms and conditions applicable to all other participants in
such auction.

 

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(e)     No Other Liens. Except as expressly permitted hereunder and under the
Account Control Agreement and each Additional Account Control Agreement, the
Borrower Parties will not sell, assign, pledge, grant any security interest in,
exchange, transfer, hypothecate or otherwise dispose of or grant any option with
respect to such Borrower Collateral, or agree to do any of the foregoing,
without the prior written consent of the Administrative Agent.

 

(f)     Power of Attorney. The Borrower Parties hereby irrevocably appoint the
Administrative Agent as its attorney-in-fact with full power of substitution and
authorizes the Administrative Agent to take any action and execute any
instruments with respect to the Borrower Collateral that the Administrative
Agent may deem necessary or advisable in connection with the following, each
subject to the terms of this Agreement: (i) the Borrower Parties’ grant of a
security interest in the Borrower Collateral to the Administrative Agent on
behalf of the Secured Parties and any rights and remedies that the
Administrative Agent on behalf of the Secured Parties may exercise in respect
thereof upon the occurrence and during the continuance of an Event of Default,
(ii) the filing of one or more financing or continuation statements with respect
to the Borrower Collateral, (iii) the sale, termination or other disposition of
any Portfolio Asset at the direction of the Administrative Agent during the
continuance of an Event of Default or on or after the Maturity Date or
(iv) accomplishing any other purposes of this Agreement and the exercise of any
remedies hereunder by the Administrative Agent. The Borrower Parties agree that
the powers granted by this paragraph are coupled with an interest, discretionary
in nature and exercisable at the sole option of the Administrative Agent. This
power of attorney shall be binding upon, and enforceable against, all
beneficiaries, successors, assigns, transferees and legal representatives of the
Borrower Parties.

 

(g)     Termination of Security Interest. The security interest granted to
secure the obligations of the Borrower Parties hereunder shall be terminated and
released and all rights in the Borrower Collateral will revert to the Borrower
Parties on the date all of the Termination Obligations have been paid in full to
the Administrative Agent and the Lenders. The security interest granted to
secure the obligations of the Borrower Parties hereunder shall be terminated and
released with respect to any Portfolio Asset sold by any Borrower Party, or
transferred in connection with an Approved CLO Takeout, on the date of
settlement of such sale, or the related CLO Takeout Date, respectively. In
connection with such termination and release, the Administrative Agent and the
Lenders shall execute and deliver such documents, instruments and certificates
as the Borrower Parties shall reasonably require at the Borrower Parties’
expense.

 

(h)     Right of Set-Off. The Administrative Agent and the Lenders are
authorized to set-off any and all amounts due to it hereunder against any
amounts payable to the Borrower Parties by the Administrative Agent, the Lenders
or their Affiliates, whether or not such amounts have matured.

 

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(i)     Each Borrower Party shall register the security interests granted under
this Agreement and any other Transaction Documents in its register of mortgages
and charges maintained at its registered office in the Cayman Islands.

 

SECTION 5.       Dispositions of Portfolio Assets, REINVESTMENT OF PRINCIPAL
COLLECTIONS

 

(a)     Sale or Disposition of Portfolio Assets Prior to the Conversion Date. At
any time prior to the Conversion Date, the Collateral Manager on behalf of the
Borrower Parties may arrange for the sale or disposition of any Portfolio Asset,
subject to the following conditions:

 

(i)     both prior to and immediately after giving effect to such sale or
disposition, no Default or Event of Default shall have occurred and be
continuing; and

 

(ii)     the proceeds from such sale or disposition (after taking into account
all costs and expenses associated with such sale or disposition) are at least
equal to the Purchase Price of such Portfolio Asset; provided that any Borrower
Party may sell or dispose of a Portfolio Asset if the proceeds from such sale or
disposition are less than the Purchase Price of such Portfolio Asset if (A) (1)
after such sale or disposition the OC Ratio is maintained or improved or (2) if
such sale or disposition does not maintain or improve the OC Ratio, the
Administrative Agent has confirmed in writing that an OC Ratio Breach will not
occur as a result of such sale or disposition, such confirmation not to be
unreasonably withheld or delayed, or (B) the Collateral Manager and the
Administrative Agent have agreed in writing to permit such proposed sale or
disposition.

 

(b)     Sale or Disposition of Portfolio Assets On and After the Conversion
Date. On and after the Conversion Date, the Collateral Manager may, only with
the prior written approval of the Administrative Agent, arrange for the sale or
disposition of all or a portion of the Portfolio Assets; provided, however, that
the prior written approval of the Administrative Agent shall not be required so
long as the proceeds of such sale or disposition, together with the funds on
deposit in the Accounts (including funds invested or held in Eligible
Investments), are equal to or greater than 105% of the Termination Obligations.

 

(c)     The Collateral Manager (on behalf of the Borrower Parties) shall sell,
arrange to sell or otherwise dispose of all Portfolio Assets that are Ineligible
Assets no later than each CLO Takeout Date, subject to Sections 5(a), 5(b) and
9(h).

 

(d)     Reinvestment of Principal Collections. At any time prior to the
Conversion Date (but not on or after the Conversion Date), the Collateral
Manager on behalf of the Borrower Parties may, with the prior written consent of
the Administrative Agent, instruct the Custodian to withdraw Principal
Collections from any Principal Collection Account and deposit such Principal
Collections into the applicable Trust Account for the purpose of acquiring
additional Assets (each such reinvestment of Principal Collections, a
“Reinvestment”), subject in each case to the following conditions:

 

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(i)     the Collateral Manager shall have delivered and the Administrative Agent
shall have approved an Approval Request with respect to the Assets acquired
pursuant to the Reinvestment pursuant to the terms of Section 2(b); and

 

(ii)     the Collateral Manager shall have delivered to the Administrative Agent
a certificate certifying that the conditions set forth in Sections 7(b)(vi)
through (x) shall be satisfied as of the date of such Reinvestment.

 

SECTION 6.        OC Ratio Posting AND ADDitional issuance of preference shares

 

(a)     If an OC Ratio Breach has occurred, within 10 Business Days of the
occurrence of such OC Ratio Breach, the Preferred Investor or the Collateral
Manager (or such other Person designated by the Preferred Investor or the
Collateral Manager and approved in writing by the Administrative Agent (such
approval not to be unreasonably withheld)) may, but shall not be required to,
make a cash payment into the OC Ratio Posting Account in an amount (which shall
be in increments of U.S.$1,000,000) that would cause such OC Ratio Breach to be
cured after giving effect to such payment into the OC Ratio Posting Account (any
such payment, an “OC Ratio Posting Payment”); provided that in the event an
additional preferred investor becomes a party hereto, any OC Ratio Posting
Payments made by the Preferred Investor and such additional preferred investor
may be made pro rata based on the aggregate outstanding principal amount of
Preference Shares held by the Preferred Investor and each such other preferred
investor; provided, further, that any preferred investor that is a party hereto
may choose to contribute funds on behalf of a preferred investor that has not
contributed within the same 10 Business Day timeframe.

 

(b)     On any Business Day after the Collateral Manager or the Preferred
Investor (or its designee) has made an OC Ratio Posting Payment into the OC
Ratio Posting Account in accordance with clause (a) above and amounts remain on
deposit in the OC Ratio Posting Account, the Collateral Manager or the Preferred
Investor, as applicable, may request that the Borrower (after consultation with
the Administrative Agent) determine the maximum amount of cash necessary to be
on deposit in the OC Ratio Posting Account in order to cure the related OC Ratio
Breach. If the Borrower determines for a period of not less than 10 consecutive
Business Days (or such shorter period as the Administrative Agent may agree in
its sole discretion) that the amount of cash on deposit in the OC Ratio Posting
Account exceeds the greater of (i) the amount necessary to maintain an OC Ratio
of at least 103.50% and (ii) the amount necessary to maintain OC Ratio Posting
Payments of at least $1,000,000 above the amount necessary to cure the related
OC Ratio Breach (such excess, the “OC Ratio Posting Excess”), then the
Collateral Manager or the Preferred Investor, as applicable, may request in
writing that the Custodian at the direction of the Borrower cause the payment of
all or a portion of the OC Ratio Posting Excess to the Collateral Manager or the
Preferred Investor, as applicable, who made the related OC Ratio Posting
Payment. The Custodian at the direction of the Borrower shall cause such the OC
Ratio Posting Excess (or portion thereof) to be paid to the Collateral Manager
or the Preferred Investor, as applicable, within two Business Days of receiving
such request from the Collateral Manager or the Preferred Investor, as
applicable.

 

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(c)     In addition to the Preference Shares issued and sold to the Preferred
Investor on the date of this Agreement pursuant to the Preference Share
Subscription Agreement, on or before the Conversion Date, the Borrower (at the
direction of the Collateral Manager) may from time to time issue and sell
additional Preference Shares to the Preferred Investor (or such other Person
designated by the Collateral Manager and approved in writing by the
Administrative Agent (such approval not to be unreasonably withheld)) in an
amount not less than U.S.$1,000,000. Notwithstanding the amount of Preference
Shares that may be issued and sold to the Preferred Investor pursuant to this
Section 6(c), each Lender shall only originate Loans up to their respective
Individual Lender Maximum Funding Amount.

 

(d)     The proceeds of any sale of additional Preference Shares pursuant to
Section 6(c) shall be deposited in the Borrower Trust Account.

 

(e)     Notwithstanding anything herein to the contrary, any issuance and sale
of additional Preference Shares pursuant to Section 6(c) shall not be permitted
without the prior written approval of the Administrative Agent (such approval
not to be unreasonably withheld or delayed).

 

(f)     Upon the occurrence and continuance of an Event of Default that has not
been waived or cured in accordance with the terms of this Agreement, all funds
on deposit in the OC Ratio Posting Account shall be transferred to the Borrower
Trust Account, to be disbursed in accordance with the terms of this Agreement.
Prior to being distributed in accordance with the Preference Share Subscription
Agreement, any funds remaining on deposit in the Borrower Trust Account
following the payment of the Termination Obligations in full in an amount up the
aggregate OC Ratio Posting Payments made by the Preferred Investors shall be
paid to the Preferred Investors on a pro rata basis according to the amount of
OC Ratio Posting Payments made by each such Preferred Investor.

 

SECTION 7.        Conditions Precedent to Borrowing

 

Notwithstanding anything to the contrary herein, the obligation of the Lenders
to make any Loan to the Borrower Parties is subject to the satisfaction of the
following conditions precedent:

 

(a)     Conditions to Initial Borrowing:

 

(i)     the Borrower shall have entered into the Preference Share Subscription
Agreement;

 

(ii)     the Borrower shall have issued and sold Preference Shares to the
Preferred Investor and deposited the cash proceeds of such sale into the Trust
Account in an amount not less than U.S.$7,500,000;

 

(iii)     on or prior to the Closing Date, the Administrative Agent shall have
received the executed legal opinions of (A) Katten Muchin Rosenman LLP, New York
counsel to the Borrower, CLO Subsidiary I and the Collateral Manager, opining
(1) on the enforceability, grant and perfection of the lien on the Borrower
Collateral and the Transaction Documents, and (2) the enforceability of the
Transaction Documents to which the Borrower, CLO Subsidiary I or the Collateral
Manager is a party, (B) Appleby (Cayman) Ltd., Cayman Islands counsel to the
Borrower and CLO Subsidiary I and (C) Alston & Bird LLP, counsel to the
Custodian, in each case, in form and substance acceptable to the Administrative
Agent in its sole discretion; and

 

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(iv)     on or prior to the Closing Date, the Administrative Agent shall have
received a legal memorandum of Katten Muchin Rosenman LLP, New York counsel to
the Borrower, CLO Subsidiary I and the Collateral Manager, to the effect that no
Approved CLO Takeout contemplated by this Agreement (without giving effect to
any amendments hereto after the Closing Date) would be subject to the U.S. Risk
Retention Rules.

 

(b)     Conditions to Each Borrowing:

 

(i)     subject to Section 2(b), the Administrative Agent must have received and
approved an Approval Request for the Asset the applicable Borrower Party intends
to purchase with the proceeds of the Loan;

 

(ii)     the Collateral Manager, on behalf of the Borrower Parties, must furnish
the Administrative Agent with a Borrowing Request with respect to the Loan and a
Portfolio Asset Buy Confirmation with respect to the Asset the applicable
Borrower Party intends to purchase with the proceeds of the Loan;

 

(iii)     the Preferred Investor (or such other party permitted to purchase
Preference Shares pursuant to Section 6(c)) must have purchased and paid for
Preference Shares the Borrower issued pursuant to Section 6(c) (if any) and
deposited the proceeds of such sale into the Borrower Trust Account;

 

(iv)     the Collateral Manager or the Preferred Investor (or such other Person
designated by the Collateral Manager or the Preferred Investor and approved by
the Administrative Agent), as applicable, agreeing to make an OC Ratio Posting
Payment pursuant to Section 6 shall have made such OC Ratio Posting Payment
pursuant to Section 6 and deposited such payment into the OC Ratio Posting
Account;

 

(v)     all proceeds of any issuance and sale of Preference Shares shall have
been applied to the purchase of Assets or the prepayment of Loans or will be
applied to the purchase of Assets prior to or simultaneously with the purchase
of the Asset with the proceeds of the Loan;

 

(vi)     the sum of (A) the amount of the proposed Loan and (B) the Outstanding
Principal Amount of all other Loans would not exceed the Maximum Facility
Amount;

 

(vii)     the Collateral Quality Test is satisfied as of the related Acquisition
Date;

 

(viii)     the Concentration Limitations are satisfied as of the related
Acquisition Date;

 

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(ix)     each representation and warranty set forth in Section 8 below shall be
true and correct in all respects as if made on the date of such borrowing;

 

(x)     no Default shall have occurred and be continuing on the date of such
borrowing; and

 

(xi)     the Asset specified in such Approval Request will satisfy the
Eligibility Requirements as of its Acquisition Date.

 

SECTION 8.       Representations and Warranties

 

(a)     Each of the Borrower Parties (jointly and severally with respect to each
other), the Preferred Investor (severally but not jointly) and the Collateral
Manager (severally but not jointly) represents and warrants to the
Administrative Agent and each Lender that:

 

(i)     Existence and Authority; Qualification; Compliance with Laws. It (A) is
duly incorporated or organized and is validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, as the case
may be, with full power and authority to own its assets and to conduct its
business and perform its obligations under the Transaction Documents to which it
is a party, (B) is duly qualified and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification, and (C) is in compliance
with all laws.

 

(ii)     Authorization; Enforceable Obligations. Its execution and delivery of
this Agreement and the other Transaction Documents to which it is a party have
been duly authorized by all necessary action, and this Agreement is and such
other Transaction Documents, when executed, will constitute its legal, valid and
binding obligations, enforceable in accordance with their respective terms,
subject to bankruptcy, insolvency, liquidation, reorganization or other laws of
general application relating to or affecting the rights of creditors and to
general principles of equity.

 

(iii)     No Conflict. Its execution, delivery and performance of this Agreement
and the other Transaction Documents to which it is a party are not in
contravention of any applicable law or of the terms of its organizational
documents and will not result in the breach of or constitute a default under, or
result in the creation of a lien under any indenture, agreement or undertaking
to which it is a party or by which it or its property may be bound or affected.

 

(iv)     No Consent. No consent, approval, exemption, authorization or other
action by, or notice to, or (except for filing of financing statements to
perfect the security interest hereunder in certain collateral) filings or
registration with, any Governmental Authority or any Person or entity is
required (other than previously obtained) for the execution, delivery or
performance by, or enforcement against, such party of its obligations hereunder
or any other Transaction Document or for the validity or the exercise by such
Borrower Party or the Administrative Agent or any Lender of the rights and
remedies provided hereunder or thereunder.

 

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(v)     No Default. Neither it nor any of its Subsidiaries is in default under
or with respect to the Transaction Documents or any other contractual
obligation.

 

(vi)    Anti-Bribery, Anti-Corruption and Anti-Money Laundering Laws; Sanctions.
With respect to it, its Subsidiaries, their respective directors and officers,
and, to its best knowledge, their respective agents and employees, its
Affiliates and its Affiliates' respective directors, officers, agents and
employees:

 

(A)     none of the foregoing Persons has engaged in any activity or conduct
which would violate any applicable anti-bribery, anti-corruption or anti-money
laundering laws, regulations or rules in any applicable jurisdiction, and it and
its Affiliates have instituted and maintain policies and procedures designed to
prevent any such violation; and

 

(B)     none of the foregoing Persons is, or is owned or controlled by Persons
that are: (1) the target of any economic or trade sanctions or restrictive
measures enacted, administered, imposed or enforced by the U.S. Department of
the Treasury's Office of Foreign Assets Control (OFAC), the U.S. Department of
State, the United Nations Security Council, the European Union, the French
Republic, Her Majesty's Treasury and/or any other relevant sanctions authority
(collectively, “Sanctions”; any such Person, a “Sanctioned Person”) or (2)
located, organized or resident in a country or territory that is, or whose
government is, the subject of Sanctions broadly prohibiting dealings with such
government, country, or territory, including Cuba, Crimea/Stevastopol, Iran,
Burma, North Korea, Sudan and Syria (a “Sanctioned Country”).

 

(b)     Each Borrower Party further represents and warrants to the
Administrative Agent and each Lender that:

 

(i)     Financial Condition. As of the date of this Agreement, it (i) has not
incurred any material liability or contingent obligation except under the
Transaction Documents and as may be satisfied or terminated as of the date
hereof and (ii) has no Subsidiaries (other than Tax Subsidiaries or, solely with
respect to the Borrower, the CLO Subsidiaries). Each Borrower Party has issued
no shares or other equity interests other than its ordinary shares and, solely
with respect to the Borrower, the Preference Shares. All payments that each
Borrower Party may make in respect of debt other than Loans hereunder are
expressly subordinated to the Loans hereunder.

 

(ii)     Security. It is the sole owner of and has full power, authority and
legal right to pledge and transfer all assets pledged by it hereunder free and
clear of, and such pledge and transfer will not create, any lien thereon (other
than the lien created by this Agreement), and upon the execution and delivery of
the Account Control Agreement or Additional Account Control Agreement, as
applicable, and filing of a financing statement under the UCC with the Recorder
of Deeds of the District of Columbia with respect thereto naming the applicable
Borrower Party as debtor and the Administrative Agent for the benefit of the
Secured Parties as secured party, the Administrative Agent for the benefit of
the Secured Parties will have a first priority perfected security interest in
such assets. Each Borrower Party acquired ownership of such assets for value in
good faith without notice of any adverse claim and has not assigned, pledged or
otherwise encumbered any interest in such assets other than hereunder.

 

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(iii)     Name; Location. Its full and correct legal name as of the date hereof
is as set forth in the preamble hereof. It is an exempted company incorporated
with limited liability under the laws of the Cayman Islands. The Borrower’s
location (as defined in Section 9-307 of the UCC) and registered office is: c/o
Estera Trust (Cayman) Limited, Clifton House, 75 Fort Street, Grand Cayman
KY1-1108, Cayman Islands.

 

(iv)     No Plan Assets. The assets of the Borrower Parties do not and will not
constitute the assets of (A) an employee benefit plan as defined in and subject
to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
(B) a plan as defined in and subject to Section 4975 of the Code, (C) a plan
that is not subject to ERISA or the Code but is subject to any law, rule or
restriction substantially similar to Section 406 of ERISA or Section 4975 of the
Code or (D) a person or entity deemed to hold the assets of any such employee
benefit plan or plan described in (A), (B) or (C) hereof.

 

(v)     Taxes.     Each Borrower Party has timely filed, or caused to be timely
filed, all U.S. federal and other material Tax returns and Tax information
returns that are required by law to have been filed, all such Tax returns are
true and correct in all material respects, and each Borrower Party has timely
paid all U.S. federal and other material Taxes thereby shown to be owing or
required to be withheld, and all other material taxes (whether or not thereby
shown to be owing or required to be withheld), except any such Taxes that are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP.

 

SECTION 9.        Covenants

 

So long as principal of and interest on any Loan, or any other amount payable
hereunder or under any other Transaction Document remains unpaid or unsatisfied:

 

(a)     Affirmative Covenants of the Borrower Parties, the Collateral Manager
and the Preferred Investor. Each of the Borrower Parties and the Collateral
Manager and, solely with respect to clause (vi) below, the Preferred Investor
shall:

 

(i)     comply with all terms and conditions of each Transaction Document to
which it is a party and, upon obtaining knowledge thereof, promptly notify each
other party to this Agreement of (A) any Default, (B) any occurrence that has
resulted or would reasonably be expected to result in a Material Adverse Effect
with respect to it and (C) any Asset becoming an Ineligible Asset or otherwise
failing to satisfy the Eligibility Requirements;

 

(ii)     preserve and maintain all of its rights, privileges, and franchises
necessary in the conduct of its business;

 

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(iii)     comply with the requirements of all applicable laws, rules,
regulations, and orders of governmental authorities if failure to do so would
reasonably be expected to have a Material Adverse Effect;

 

(iv)     pay and discharge when due all taxes, assessments, and governmental
charges or levies imposed on it or on its income or profits or any of its
property, except for any such tax, assessment, charge, or levy the payment of
which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained;

 

(v)     subject to any confidentiality obligations, furnish to the
Administrative Agent promptly, from time to time, such information, documents,
records or reports respecting the Borrower Collateral or the condition or
operations, financial or otherwise, of the Borrower Parties as the
Administrative Agent may from time to time reasonably request in order to
protect the interests of the Administrative Agent and the Secured Parties under
or as contemplated by this Agreement; provided that if any of the foregoing is
subject to any confidentiality obligation, the Collateral Manager (on behalf of
the Borrower) at the request of the Administrative Agent shall use reasonable
efforts to obtain approval to furnish to the Administrative Agent such
information, documents, records or reports; and

 

(vi)     subject to any confidentiality obligations, provide the Administrative
Agent with all information reasonably available to the Borrower Parties or the
Preferred Investor, as the case may be, and reasonably required by the
Administrative Agent to carry out its obligations under applicable anti-money
laundering laws, rules, regulations and orders of jurisdictions and the
Administrative Agent's anti-money laundering policies and procedures; provided
that if any of the foregoing is subject to any confidentiality obligation, the
Collateral Manager (on behalf of the Borrower Parties) at the request of the
Administrative Agent shall use reasonable efforts to obtain approval to furnish
to the Administrative Agent such information.

 

(b)     Affirmative Covenants of the Borrower Parties.

 

(i)     Each Borrower Party shall use the proceeds of the Loans solely to
acquire Assets that meet the Eligibility Requirements as directed by the
Collateral Manager, and shall not use such proceeds or the proceeds of any
Preference Shares or the OC Ratio Posting Payments, directly or indirectly,
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund indebtedness originally incurred for such
purpose.

 

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(ii)     Each Borrower Party shall ensure that all corporate or other
formalities regarding its existence (including, to the extent required by
applicable law, holding regular board of directors’ and shareholders’ or other
similar meetings) are followed and shall conduct business in its name. Each
Borrower Party shall keep separate books and records, maintain separate
financial statements and maintain accounts that are separate from any other
entity. Each Borrower Party shall hold itself out as a separate entity and
correct any known misunderstanding regarding its separate identity. Each
Borrower Party shall not take any action, or conduct its affairs in a manner,
that is likely to result in its separate existence being ignored or in its
assets and liabilities being substantively consolidated with any other Person in
a bankruptcy, reorganization, examinership or other insolvency proceeding.
Without limiting the foregoing, (i) each Borrower Party shall not have any
Subsidiaries (other than any Tax Subsidiary, any co-issuer or, solely with
respect to the Borrower, any CLO Subsidiary), (ii) each Borrower Party shall not
commingle its assets with the assets of any of its Affiliates, or of any other
Person, and (iii) each Borrower Party shall not have any employees other than
its directors in their additional capacities as officers of the applicable
Borrower Party.

 

(iii)     Each Borrower Party shall use its commercially reasonable efforts to
sell any Assets that the applicable Borrower Party acquires which did not
satisfy the Eligibility Requirements on the Acquisition Date thereof, in a
commercially expeditious manner.

 

(iv)     Each Borrower Party shall provide (A) prior written notice to the
Administrative Agent of any proposed (x) material modification of any of the
terms of any Portfolio Asset or (y) Distressed Exchange of any Portfolio Asset
and (B) written notice of the consummation of any event described in (A), in
each case, no later than three (3) Business Days following the date on which it
receives notice of the same and at least one (1) Business Day prior to the date
on which the applicable Borrower Party or the Collateral Manager responds to the
same.

 

(v)     Each Borrower Party shall use best efforts to comply with any
requirements necessary to establish and maintain its status as a "reporting
Model 1 FFI" within the meaning of Treasury Regulations section
1.1471-1(b)(114), and to otherwise ensure that payments to it are not subject to
withholding under FATCA.

 

(vi)     Each Borrower Party agrees that, notwithstanding anything to the
contrary herein, following receipt by the Borrower Parties and the Collateral
Manager of a written notice from the Administrative Agent at any time after the
Securitisation Regulation Effective Date requesting the same, each Borrower
Party shall not issue any preference shares without the prior written consent of
the Administrative Agent if, after giving effect to such issuance and the other
transactions contemplated by this Agreement, the Administrative Agent determines
in its reasonable business judgment, it would not be in compliance with the
Securitisation Regulation.

 

(c)     Negative Covenants of each Borrower Party. Each Borrower Party shall
not, during the term of this Agreement:

 

(i)     organize, create or acquire any Subsidiary (other than Tax Subsidiaries,
co-issuers or, solely with respect to the Borrower, any CLO Subsidiary);

 

(ii)     engage in any business or activity other than the transactions
expressly contemplated herein and such other activities that are necessary,
suitable or convenient to accomplish the foregoing and any Offering or are
incidental thereto or connected therewith;

 

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(iii)     merge, dissolve, liquidate, consolidate with or into any Person or
dispose of substantially all of its assets (other than in connection with an
Approved CLO Takeout);

 

(iv)     permit its memorandum and articles of association or other constitutive
documents to be amended without the prior written consent of the Collateral
Manager and the Administrative Agent;

 

(v)     issue share capital (other than its ordinary shares already issued and,
solely with respect to the Borrower, Preference Shares issued pursuant to the
Preference Share Subscription Agreement and in accordance with this Agreement)
or incur indebtedness of any kind other than Loans hereunder without the consent
of the Administrative Agent other than as necessary to accomplish any Offering
or any other transaction that will result in a repayment in full or in part of
Loans and/or the Termination Obligations, as applicable;

 

(vi)     change its location (as defined in Section 9-307 of the UCC) or change
its name from the name listed in the preamble hereto, or with respect to each
CLO Subsidiary, listed in the applicable CLO Subsidiary Joinder Agreement,
without the written consent of the Administrative Agent, which consent may not
be unreasonably withheld or delayed; provided, however that the Administrative
Agent may withhold or delay its consent if such change is in contravention of
the Administrative Agent’s then current written policies regarding transactions
similar to those contemplated by the Transaction Documents and such withholding
or delay shall be deemed reasonable for all purposes hereunder; or

 

(vii)     permit a CLO Takeout Date to occur unless the net proceeds expected to
be received from the issuance of the related CLO Securities will be sufficient
to (a) repay the portion of Loans (and related expenses) made in respect of each
Portfolio Asset that is transferred on such CLO Takeout Date, in full on such
CLO Takeout Date or (b) if such CLO Takeout Date is the final Payment Date, pay
the Termination Obligations in full to the Administrative Agent and such
Lenders.

 

(d)     Tax Covenants of each Borrower Party. Each Borrower Party will timely
file, or cause to be timely filed, all U.S. federal and other material Tax
returns and Tax information returns that are required by law to be filed, all
such Tax returns are true and correct in all material respects, and each
Borrower Party has timely paid all U.S. federal and other material Taxes thereby
shown to be owing or required to be withheld, and all other material taxes
(whether or not thereby shown to be owing or required to be withheld), except
any such Taxes that are being contested in good faith by appropriate proceedings
and for which adequate reserves have been provided in accordance with GAAP;
provided that each Borrower Party shall not file, or cause to be filed, any
income or franchise tax return in the United States or any state of the United
States on the basis that it is engaged in a trade or business in the United
States for U.S. federal income tax purposes unless it shall have obtained
written advice of Katten Muchin Rosenman LLP or Allen & Overy LLP, or a written
opinion of other nationally recognized U.S. tax counsel experienced in such
matters, prior to such filing to the effect that, under the laws of such
jurisdiction, such Borrower Party is required to file such income or franchise
tax return

 

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(e)     Tax Covenants of the Borrower Parties and the Collateral Manager.
Notwithstanding anything to the contrary contained herein, the Borrower Parties
and the Collateral Manager shall not, and each shall use its commercially
reasonable efforts to ensure that any Person acting on its behalf does not,
acquire or own any asset, conduct any activity or take any action unless the
acquisition or ownership of such asset, the conduct of such activity or the
taking of such action, as the case may be, would not cause any Borrower Party to
be engaged, or deemed to be engaged, in a trade or business within the United
States for U.S. federal income tax purposes or otherwise to be subject to tax on
a net basis in any jurisdiction. In furtherance and not in limitation of the
immediately preceding sentence, notwithstanding anything to the contrary
contained herein, (i) the Borrower Parties and the Collateral Manager shall
comply with all of the provisions set forth in Annex E hereto unless, with
respect to a particular transaction, the Borrower Parties and the Collateral
Manager shall have received an opinion or written advice of Allen & Overy LLP,
Katten Muchin Rosenman LLP or an opinion of other tax counsel of nationally
recognized standing in the United States experienced in such matters to the
effect that the Borrower Parties’ and Collateral Manager’s contemplated
activities will not cause any Borrower Party to be engaged, or deemed to be
engaged, in a trade or business within the United States for U.S. federal income
tax purposes or otherwise to be subject to U.S. federal income tax on a net
basis and (ii) compliance with clause (i) above shall satisfy the Borrower
Parties’ and the Collateral Manager's obligations under this Section 9(e),
except to the extent that there has been a change in law after the date hereof
that the Borrower Parties or the Collateral Manager actually knows (acting in
good faith) could reasonably be expected to cause any Borrower Party to be
engaged, or deemed to be engaged, in a trade or business within the United
States for U.S. federal income tax purposes or otherwise to be subject to U.S.
federal income tax on a net basis notwithstanding compliance with clause (i).

 

(f)     Anti-Bribery, Anti-Corruption and Anti-Money Laundering Laws; Sanctions.
Each of the Borrower Parties, the Preferred Investor and the Collateral Manager
shall:

 

(i)     maintain and ensure that is Affiliates maintain policies and procedures
designed to prevent violation of any applicable anti-bribery, anti-corruption or
anti-money laundering laws, regulations or rules in any applicable jurisdiction.

 

(ii)     not, directly or indirectly, use the proceeds of any Loan, or lend,
contribute or otherwise make available such proceeds to any subsidiary, sister
company, joint venture partner or other Person, (A) to fund any activities or
business of or with any Person, or in any country or territory, that, at the
time of such funding, is, a Sanctioned Person or Sanctioned Country, as
applicable, or (B) in any other manner that would result in a violation of
Sanctions by any Person (including any Person participating in the Loan
hereunder, whether as underwriter, advisor, investor, lender, hedge provider,
facility or security agent or otherwise).

 

(g)     Securitisation Regulation. At any time while this Agreement is in force
and at the request of the Administrative Agent, the parties hereto hereby agree
to enter into any additional agreements or amendments that the Administrative
Agent reasonably determines are necessary to permit the parties hereto to comply
with the Securitisation Regulation.

 

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(h)     Covenants of the Collateral Manager. The Collateral Manager shall not,
without the prior written consent of the Administrative Agent, permit any CLO
Subsidiary to transfer any Portfolio Asset to the Borrower, except for
Ineligible Assets in an amount such that the aggregate Principal Balance of all
Ineligible Assets transferred by such CLO Subsidiary to the Borrower since the
Closing Date does not exceed 5.00% of such CLO Subsidiary’s Purchased Collateral
Obligations Balance as of the date of such transfer (after giving effect to all
other acquisitions and dispositions of Collateral Obligations by such CLO
Subsidiary on such date of determination).

 

(i)     FATCA. Each Lender and the Preferred Investor agrees to (i) deliver to
each Borrower Party or its agents such forms, documentation and other
information that is, in the determination of the relevant Borrower Party or its
agents necessary or helpful for the relevant Borrower Party to comply with FATCA
and the Cayman FATCA Legislation and achieve AML Compliance or to comply with
any other applicable law; (ii) permit the Borrower Parties to share such
information with the Tax Information Authority of the Cayman Islands, the U.S.
Internal Revenue Service or any other applicable taxing authority and (iii) to
the extent any form or certification it previously delivered expires or becomes
obsolete or inaccurate in any respect, to update such form or certification
promptly.

 

SECTION 10.         ADMINISTRATIVE AGENT

 

The Lenders hereby irrevocably appoint BNP Paribas, as Administrative Agent
hereunder and under the other Transaction Documents, and authorize the
Administrative Agent to take such action, or exercise such powers and perform
such duties, as are expressly delegated to it hereunder and under the other
Transaction Documents, together with such other powers as are reasonably
incidental thereto, and BNP Paribas, hereby accepts such appointment. The
Administrative Agent shall promptly deliver copies of any notice, certificate,
report or other documents received by it in its capacity as Administrative Agent
to the Lenders. Notwithstanding anything to the contrary elsewhere in this
Agreement or the other Transaction Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
therein, or any fiduciary relationship with the Lenders, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any of the other Transaction Documents, or
otherwise exist against or in respect of the Administrative Agent.

 

The Administrative Agent may execute any of its duties by or through its
subsidiaries, affiliates, agents or attorneys in fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys in fact selected by it with reasonable care.

 

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Neither the Administrative Agent (acting in such capacity) nor any of its
directors, officers, agents or employees shall be (a) liable for any action
lawfully taken or omitted to be taken by it or any of them as Administrative
Agent under or in connection with this Agreement or any other Transaction
Documents or any delegate under or in connection with this Agreement or the
other Transaction Documents (except for its, their or such Person’s own gross
negligence or willful misconduct), or (b) responsible to any Person for any
recitals, statements, representations or warranties of any Person (other than
itself) contained in the Transaction Documents or any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, the Transaction Documents, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Transaction
Documents or any other document furnished in connection therewith or herewith,
or for any failure of any Person (other than itself or its directors, officers,
agents or employees) to perform its obligations under any Transaction Document,
or for the satisfaction of any condition specified in a Transaction Document.
Except as otherwise expressly provided in this Agreement, the Administrative
Agent shall not be under any obligation to any Person to ascertain or to inquire
as to the observance or performance of any of the agreements or covenants
contained in, or conditions of, the Transaction Documents, or to inspect the
properties, books or other records of the Borrower Parties, the Collateral
Manager or the Custodian.

 

The Administrative Agent shall in all cases be entitled to rely, and shall be
fully protected in relying upon, any communication (written or verbal) or any
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person(s) and upon advice of legal counsel (including any
Lender’s counsel), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement, the
other Transaction Documents or any other document furnished in connection
herewith or therewith in accordance with a request of a Lender, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any breach of this Agreement or the occurrence of any Default or
Event of Default unless the Administrative Agent has received notice from the
Collateral Manager, the Custodian, the Borrower or a Lender referring to this
Agreement and describing such event. The Administrative Agent shall take such
action with respect to such event as shall be reasonably directed in writing by
a Lender; provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such event as it shall deem advisable in the best interests of the Lenders.

 

The Lenders expressly acknowledge that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys in fact or affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of the
Borrower Parties, the Collateral Manager or the Custodian, shall be deemed to
constitute any representation or warranty by the Administrative Agent to the
Lenders. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other conditions and creditworthiness of the
Borrower Parties, the Collateral Manager or the Custodian and the Assets, and
made its own decision to extend Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis, appraisals and decisions in taking or not taking action under any
of the Transaction Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower Parties, the Collateral
Manager, or the Custodian and the Assets. Except as expressly provided herein,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the Borrower
Collateral or the business, operations, property, prospects, financial and other
conditions or creditworthiness of the Borrower Parties, the Collateral Manager,
the Custodian or any of the Lenders which may come into the possession of the
Administrative Agent.

 

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In no event shall the Administrative Agent be liable for any indirect, special,
punitive or consequential loss or damage of any kind whatsoever, including, but
not limited to, lost profits, even if the Administrative Agent has been advised
of the likelihood of such loss or damage and regardless of the form of action.
In no event shall the Administrative Agent be liable for any failure or delay in
the performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, or the like which delay, restrict
or prohibit the providing of the services contemplated by this Agreement.

 

Each Lender agrees to indemnify the Administrative Agent and its officers,
directors, employees, representatives and agents (to the extent not reimbursed
by the Borrower Parties under the Transaction Documents) from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for the
Administrative Agent or the affected Person in connection with any investigative
or judicial proceeding commenced or threatened, whether or not the
Administrative Agent or such affected Person shall be designated a party
thereto) that may at any time be imposed on, incurred by or asserted against the
Administrative Agent or such affected Person as a result of, or arising out of,
or in any way related to or by reason of, any of the transactions contemplated
hereunder or under the Transaction Documents or any other document furnished in
connection herewith or therewith (but excluding any such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or willful
misconduct of the Administrative Agent or such affected Person).

 

If the Administrative Agent resigns as Administrative Agent under this
Agreement, then the Administrative Agent may appoint a successor agent (with the
prior written consent of the Borrower and the Collateral Manager, if such
successor agent is not an Affiliate of the Administrative Agent), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent, effective upon its acceptance of such appointment, and the
former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any party to this Agreement. The
Administrative Agent may resign upon ten (10) days’ notice to the Lenders (with
a copy to the Borrower, the Collateral Manager and the Custodian). Such
resignation will become effective upon a successor administrative agent
succeeding to the Administrative Agent’s rights, powers and duties; provided
that if a successor Administrative Agent is not appointed within ten (10) days
of the Administrative Agent giving notice of its resignation, it may petition a
court for its removal. After any retiring Administrative Agent’s resignation,
the provisions of this Agreement in respect of the Administrative Agent shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Agreement.

 

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The Administrative Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower Parties, the
Custodian or the Collateral Manager as though the Administrative Agent were not
the Administrative Agent.

 

SECTION 11.       CALCULATION DISPUTE MECHANISM

 

If at any time the Collateral Manager disputes the Market Value ascribed to one
or more Assets that was determined by the Administrative Agent using a Pricing
Source (each such Asset, a “Disputed Asset”), the Collateral Manager shall
notify the Administrative Agent of such dispute at or before the Dispute Time.
Upon receipt of such notification, the Administrative Agent and the Collateral
Manager shall consult with each other in an attempt to resolve such dispute in a
timely and reasonable manner. If such consultation does not resolve the dispute
within one (1) Business Day of the Administrative Agent’s receipt of notice of
such dispute, the following mechanism (the “Calculation Dispute Mechanism”)
shall apply:

 

(a)     The Collateral Manager and the Administrative Agent shall seek bid
quotations from two or more Independent Dealers (each, an “Independent Bid”) for
each Disputed Asset.

 

(b)     For each Disputed Asset for which there are three or more Resolution
Values at the Resolution Time, the Market Value shall be calculated as follows:

 

(i)     If the average of such Resolution Values is more than 5% higher or lower
than the Administrative Agent’s original valuation, the Market Value shall be
recalculated based on the average of the Resolution Values and the
Administrative Agent’s original valuation; provided that, in the event the
Administrative Agent’s original valuation is the lowest of all Resolution Values
obtained, then both the highest Resolution Value and the Administrative Agent’s
original valuation shall be disregarded for purposes of calculating such
average.

 

(ii)     If the average of such Resolution Values is less than 5% higher or
lower than the Administrative Agent’s original valuation, the Market Value shall
be the Administrative Agent’s original valuation.

 

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(c)     For each Disputed Asset for which there are two Resolution Values at the
Resolution Time, the Market Value shall be calculated as follows:

 

(i)     If the lower of such Resolution Values is more than 5% higher or lower
than the Administrative Agent’s original valuation, the Market Value shall be
recalculated as the lower of the two Resolution Values.

 

(ii)     If the lower of such Resolution Values is less than 5% higher or lower
than the Administrative Agent’s original valuation, the Market Value shall be
the Administrative Agent’s original valuation.

 

(d)     For each Disputed Asset for which there is one or no Resolution Value at
the Resolution Time, the Market Value shall be the Administrative Agent’s
original valuation.

 

SECTION 12.         Assignment of Collateral Management Agreement

 

The Borrower Parties and the Collateral Manager hereby agree and consent:

 

(a)     to the assignment by the Borrower Parties of all of their rights, titles
and interests in, to and under the Collateral Management Agreement to the
Administrative Agent for the benefit of the Secured Parties and the performance
by the Collateral Manager on the Borrower Parties’ behalf of any provisions of
this Agreement or the other Transaction Documents expressly applicable to the
Collateral Manager herein or therein, subject to the terms of the Collateral
Management Agreement;

 

(b)     that all of the representations, covenants and agreements made by the
Collateral Manager in the Collateral Management Agreement are also for the
benefit of the Administrative Agent on behalf of the Secured Parties;

 

(c)     to deliver to the Administrative Agent copies of all notices,
statements, communications and instruments delivered or required to be delivered
to any Borrower Party pursuant to the Collateral Management Agreement;

 

(d)     to the Administrative Agent being empowered to enforce the Collateral
Management Agreement on behalf of any Borrower Party and/or the Secured Parties
as if the Administrative Agent were directly a party to the Collateral
Management Agreement and the Administrative Agent on behalf of the Secured
Parties (and the Secured Parties to the extent any thereof is indemnified by the
Collateral Manager thereunder) constituting express third party beneficiaries of
the Collateral Management Agreement; and

 

(e)     that if (i) a Collateral Manager Default occurs and is continuing or
(ii) an Event of Default has occurred and is continuing and the Administrative
Agent or the Lenders have exercised any rights, including without limitation,
accelerating the Maturity Date, then the Administrative Agent may elect to
replace the Collateral Manager with any entity (including the Administrative
Agent).

 

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SECTION 13.        Miscellaneous

 

(a)     Amendments. (i) No amendment of any provision of this Agreement or of
any other Transaction Document shall be effective unless such amendment shall be
in writing and signed by a duly authorized officer of each party hereto,
provided that, for the avoidance of doubt, in connection with the resignation,
replacement or removal of any party hereto in accordance with, and subject to
the terms of, this Agreement and the other Transaction Documents, an amendment
to this Agreement and any other Transaction Document entered into to provide for
the appointment of a successor to such party shall not require the consent of
such resigned, replaced or removed party. No waiver of any provision of this
Agreement or of any other Transaction Document and no consent by the
Administrative Agent to any departure therefrom by the Borrower Parties shall be
effective unless such waiver or consent shall be in writing and signed by a duly
authorized officer of the Administrative Agent and any such waiver or consent
shall then be effective only for the period and on the conditions and for the
specific instance specified in such writing. No failure or delay by the
Administrative Agent in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
rights, power or privilege.

 

(ii)     Notwithstanding any of the requirements set forth in this Section 13,
the Borrower Parties and the Lenders may (without the consent of any other
Person) enter into an amendment to this Agreement (a “Base Rate Amendment”) to
change the base rate in respect of the Loans from IBA LIBOR to an alternative
base rate (such rate, the “Alternate Base Rate”) and, as appropriate, an
adjustment margin (the “Adjustment Margin”) corresponding to each available
LIBOR term, to effect, to the extent practicable, an aggregate interest rate
comparable to the IBA LIBOR-based rate in effect prior to its replacement, and
make such other amendments as are necessary or advisable in the reasonable
judgment of the Lenders to facilitate such change; provided that (A) such
amendment is being undertaken due to (w) a material disruption to IBA LIBOR, (x)
a change in the methodology of calculating IBA LIBOR, (y) at least 50% of (1)
the floating rate securities currently marketed, priced or issued in the
new-issue collateralized loan obligation market in the previous three months or
(2) the quarterly pay floating rate assets included in the Borrower Collateral,
in either case bearing interest based on a reference rate other than IBA LIBOR
or (z) IBA LIBOR ceasing to exist or be reported (or the reasonable expectation
of the Lenders that any of the events specified in clause (x), (y) or (z) will
occur or exist in the six months succeeding the proposed execution date of such
Base Rate Amendment). The Alternate Base Rate and Adjustment Margin will be
determined with due consideration to the then prevailing market practice for
determining a rate of interest for newly originated syndicated loans in the
United States.

 

(b)     Notices. Except as otherwise expressly provided herein, notices and
other communications to each party hereunder shall be in writing and shall be
delivered by hand or overnight courier service or mailed to the address provided
in Schedule A hereto (or at such other address as may be provided from time to
time in writing by such party to the other parties hereto). Notice delivered by
hand, overnight courier service or mail shall be effective upon receipt. In
addition, delivery by electronic mail or facsimile transmission shall be
permitted written notice hereunder that shall be effective immediately upon
dispatch. Any notice or other communication permitted to be given, made or
confirmed by telephone hereunder shall be given, made or confirmed by means of a
telephone call to the intended recipient at the number specified in writing by
such Person for such purpose, it being understood and agreed that a voicemail
message shall in no event be effective as a notice, communication or
confirmation hereunder. The effectiveness of any notice or other communication
to be provided pursuant to this Agreement shall be determined without regard to
the delivery to or receipt by any other persons required to be copied as
provided in Schedule A hereto.

 

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The Administrative Agent shall be entitled to rely and act upon any notices
(including telephonic notices of borrowings) purportedly given by or on behalf
of any other party even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower Parties and each
party giving such notice shall indemnify each Indemnitee (as defined below) from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of such party. The
Administrative Agent may record all telephonic notices to and other
communications with the Administrative Agent, and each party hereby consents to
such recording.

 

(c)     Successors; Assignment. (i) This Agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns. Except as
expressly permitted hereunder, none of the Borrower Parties, the Preferred
Investor or the Collateral Manager may assign their rights or obligations
hereunder. The Collateral Manager may at any time assign all or parts of its
rights or obligations hereunder to an Affiliate so long as (i) such Affiliate
employs the then current employees of the Collateral Manager engaged in the
management of the Assets such that such employees remain responsible for the
management of the Assets and (ii) no Change of Control would occur. Each of the
Administrative Agent and the Lenders may at any time (i) assign all or any part
of its rights and obligations hereunder (including, in the case of a Lender, all
or a portion of its Individual Lender Maximum Funding Amount and the Loans at
the time owing to it) to any other Person with the consent of the Borrower and
the Preferred Investor, such consent not to be unreasonably withheld, provided
that no such consent shall be required if (A) the assignment is to an Affiliate
of the Administrative Agent, to a different domestic or foreign branch of a
Lender or if the Maturity Date has occurred or (B) the Lenders reasonably
believe that the assignment shall mitigate any costs or losses incurred due to a
Change in Law, and (ii) grant to any other Person participating interests in all
or part of its rights and obligations hereunder without notice to any party;
provided, that (i) such granting Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any related promissory note for all purposes of this
Agreement, (iv) the Borrower Parties and the Collateral Manager shall continue
to deal solely and directly with such Lender in connection with the Lender's
rights and obligations under this Agreement, and (v) no participant shall have
any right to approve any amendment, supplement, restatement, other modification
or waiver of any provision of this Agreement or any other Transaction Document,
or any consent to any departure by any Borrower Party or the Collateral Manager
therefrom. Each Borrower Party and the Preferred Investor agree to execute any
documents reasonably requested by the Administrative Agent or the Lenders in
connection with any such assignment effected in accordance with the terms of
this Agreement; provided that no such documents may contain terms that adversely
affect the rights or interests of the Borrower Parties, Collateral Manager or
the Preferred Investor. With respect to an assignment by a Lender, such Lender
and its assignee shall execute an Assignment and Assumption. All information
provided by or on behalf of any party to a Lender or its Affiliates may be
furnished by such Lender to its Affiliates and to any actual or proposed
assignee or participant. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank.

 

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(ii)     The Administrative Agent, acting solely for this purpose as an agent of
the Borrower Parties, shall maintain a register for the recordation of the names
and addresses of the Lenders (including, for the avoidance of doubt, any
assignee of an interest in a promissory note evidencing the Loans), and the
Individual Lender Maximum Funding Amounts of, and principal amounts (and stated
interest) of the Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”).  The entries in the Register shall be conclusive
absent manifest error, and the Borrower Parties, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement.  The Register shall be available for inspection by the Borrower
Parties, the Collateral Manager and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.

 

(iii)     Each Lender that sells a participating interest in all or part of its
rights and obligations hereunder (including, for the avoidance of doubt, any
participating interest in any rights under any promissory note evidencing the
Loans) shall, acting solely for this purpose as an agent of the Borrower
Parties, maintain a register on which it enters the name and address of each
participant and the principal amounts (and stated interest) of each
participant’s interest in the Loans or other obligations under the Transaction
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any participant or any information relating to a participant's
interest in any Individual Lender Maximum Funding Amounts, Loans, or other
obligations under any Transaction Document) to any Person except to the extent
that such disclosure is necessary to establish that such Individual Lender
Maximum Funding Amount, Loan, or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.  For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.

 

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(d)     Fees and Expenses. The Borrower Parties shall pay promptly and upon
demand from funds on deposit in the Accounts that are available therefor in
accordance with this Agreement (including Section 2(l)) (i) to the
Administrative Agent and the Lenders on demand, all reasonable out-of-pocket
expenses and legal fees (excluding any allocated costs for in-house legal
services), including any reasonable costs associated with any audit of any
Borrower Party requested by any Lender, incurred by such party or its Affiliates
in connection with this Agreement, or any instruments or agreements executed in
connection herewith or therewith; provided that so long as BNP Paribas or any
affiliate or branch thereof is a Lender, the reasonable expenses and fees of any
affiliate or branch of BNP Paribas acting as Lender shall be paid, (ii) any
annual governmental fees of the Borrower Parties, (iii) the fees, expenses and
any Agent Indemnity Amount of the Custodian and the Securities Intermediary
under the Account Control Agreement (and each Additional Account Control
Agreement) and the Custody Agreement (and each Additional Custody Agreement) and
(iv) any other expenses of the Borrower Parties that the Collateral Manager has
approved (which, for the avoidance of doubt, shall not include any fees or
expenses payable to the Collateral Manager) including, but not limited to,
assignment fees, legal fees, restructuring fees and outside advisor fees
incurred in relation to the Assets. Notwithstanding the foregoing, (i)
Administrative Agent agrees to advise the Collateral Manager periodically of
expenses incurred as of when invoices are submitted to the Administrative Agent;
(ii) the Borrower Parties shall not be responsible for any out-of-pocket costs
and expenses of the Administrative Agent or the Lenders in connection with
documenting the Transaction Documents that exceed $60,000, (x) if incurred prior
to the occurrence of a Default, without the Administrative Agent obtaining the
Collateral Manager’s prior written consent and (y) if incurred after a Default,
without prior written notice from the Administrative Agent to the Borrower
setting forth in reasonable detail such out-of-pocket costs and expenses, and
(iii) all of the costs and expenses incurred by the Administrative Agent and the
Lenders pursuant to this Section 13(d) shall be directly related to the
Transaction Documents.

 

(e)     Indemnity. The Borrower Parties shall (jointly and severally) indemnify
and hold harmless the Collateral Manager, the Administrative Agent, the Lenders
and the Preferred Investor, their respective Affiliates, and their respective
partners, directors, officers, employees, agents and advisors (collectively the
“Indemnitees”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the
reasonable and documented fees, charges and disbursements of any outside counsel
for any Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by any Borrower Party, the Preferred Investor,
the Administrative Agent, the Lenders or the Collateral Manager (as applicable)
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Transaction Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder, or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or Preference
Share or the use or proposed use of the proceeds therefrom, or (iii) any actual
or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by a party hereto (other than the Administrative
Agent, Lenders or the Preferred Investor), and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence, bad faith or willful misconduct of such Indemnitee. To the fullest
extent permitted by applicable law, no party shall assert, and all parties
hereby waive, any claim against any Indemnitee and the Borrower Parties, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Transaction Document or any agreement
or instrument contemplated hereby, the transactions contemplated hereby or
thereby, any Loan or Preference Share or the use of the proceeds thereof. No
Indemnitee shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Transaction Documents or the
transactions contemplated hereby or thereby, except for any damages due to such
use as a result of the gross negligence or willful misconduct of the Indemnitee.
The agreements in this subsection shall survive the repayment, satisfaction or
discharge of all the other obligations and liabilities of the parties under the
Transaction Documents. All amounts due under this subsection shall be payable
within ten Business Days after demand therefor to the extent that funds in the
Accounts are available for such payment in accordance with this Agreement. This
Section 13(e) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, liabilities and related expenditures arising
from any non-Tax claim.

 

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(f)     Subordination. Notwithstanding anything to the contrary in this
Agreement or any other Transaction Document, each party on behalf of itself and
its Affiliates agrees for the benefit of the Administrative Agent and the
Lenders that any obligations of the Borrower Parties to pay any amounts to such
party shall be subordinate and junior to the obligations of the Borrower Parties
to pay amounts to the Administrative Agent and the Lenders hereunder, and on and
after the Maturity Date, all amounts owing to the Administrative Agent and the
Lenders hereunder shall be paid in full in cash or, to the extent the
Administrative Agent and the Lenders consent, other than in cash before any
payment or distribution is made to any other party.

 

(g)     Limited Recourse; Non-Petition; Recourse. The Collateral Manager, the
Preferred Investor, the Administrative Agent and each Lender acknowledge that
the Borrower and each CLO Subsidiary is a special purpose entity and that none
of the directors, officers, incorporators, shareholders, partners, agents or
employees (collectively, the “Relevant Agents”) of the Borrower or each CLO
Subsidiary, (including, without limitation, the Preferred Investor and any
Affiliate thereof) shall be personally liable for any of the obligations of the
Borrower Parties under this Agreement, it being understood and agreed that the
Collateral Manager is not a Relevant Agent of any Borrower Party.
Notwithstanding anything to the contrary contained herein, the Borrower Parties’
sole source of funds for payment of all amounts due hereunder shall be the
Borrower Collateral (except funds received in connection with an Approved CLO
Takeout), and, upon application of the proceeds of the Borrower Collateral and
its reduction to zero in accordance with the terms and under the circumstances
described herein, all obligations of and all claims against the Borrower Parties
under this Agreement, any promissory note or under any other Transaction
Document shall extinguish and shall not thereafter revive.

 

Each party (other than the Borrower Parties) agrees not to cause the filing of a
petition for the winding up of any Borrower Party for the non-payment of any
amounts provided in this Agreement until at least one year (or, if longer, the
applicable preference period then in effect) plus one day, after the payment in
full of amounts owing to the Administrative Agent or the Lenders hereunder and,
if a CLO Takeout Date shall have occurred, under any CLO Securities.

 

Except as expressly provided herein, there shall be no recourse for the payment
of any amount owing by the Borrower Parties hereunder against any other party
hereto or any officer, director, employee, shareholder, incorporator or other
Affiliate of such Person or any entity controlling such Person.

 

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The terms of this Section 13(g) shall survive any termination of this Agreement.

 

(h)     Adequacy of Monetary Damages Against the Lenders. Each of the Borrower
Parties, the Collateral Manager, and the Preferred Investor hereby acknowledges
and agrees that (i) any and all claims, damages and demands against the
Administrative Agent or the Lenders arising out of, or in connection with, the
exercise by the Administrative Agent or the Lenders of any of the Administrative
Agent’s or any of the Lenders’ rights or remedies pursuant to this Agreement can
be sufficiently and adequately remedied by monetary damages, (ii) no irreparable
injury will be caused to the Borrower Parties, the Collateral Manager or the
Preferred Investor as a result of, or in connection with, any such claims,
damages or demands, and (iii) no equitable or injunctive relief shall be sought
by the Borrower Parties, the Collateral Manager or the Preferred Investor as a
result of, or in connection with, any such claims, damages or demands.

 

(i)     Validity; Severability. If any provision of this Agreement or the other
Transaction Documents is held to be illegal, invalid or unenforceable, (i) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Transaction Documents shall not be affected or impaired
thereby and (ii) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

(j)     Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile transmission and electronic mail), and each counterpart,
when so executed, shall be deemed an original but all such counterparts shall
constitute but one and the same instrument.

 

(k)     Governing Law; Jurisdiction; Service of Process; Venue, etc. THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, AND ANY CLAIM, CONTROVERSY OR
DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT (WHETHER IN CONTRACT, TORT OR OTHERWISE) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT AND EACH STATE
COURT IN THE CITY OF NEW YORK AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTION
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT. EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF
SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SET FORTH IN SCHEDULE A HERETO. EACH
PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

-70-

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(l)     Waiver of Trial by Jury. EACH PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.

 

(m)     USA Patriot Act Notice. The Administrative Agent hereby notifies each
other party hereto that pursuant to the requirements of the USA Patriot Act
(Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the “Act”), the
Administrative Agent may be required to obtain, verify and record information
that identifies such party, which information includes the name and address of
such party and other information that will allow the Administrative Agent to
identify such party in accordance with the Act.

 

(n)     Confidentiality. The parties hereto agree to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates, directors, officers, members, principals
and employees, and to its agents, counsel and other advisors that have a need
for such information relative to this facility (collectively, the “Related
Parties”) (it being understood that, in each case, the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential and the
disclosing party shall be responsible for any breach by its related Person under
this Section 13(n)); (b) to the extent required or requested by any regulatory
authority purporting to have jurisdiction over such Person or its Related
Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners); (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process;
(d) to any other party hereto; (e) in connection with the exercise of any
remedies hereunder or under any other Transaction Document or any action or
proceeding relating to this Agreement or any other Transaction Document or the
enforcement of rights hereunder or thereunder; (f)  solely with respect to the
Administrative Agent or any Lender, to (i) any assignee of or participant in, or
any prospective assignee of or participant in, any of its rights and obligations
under this Agreement, or (ii) any actual or prospective party (or its Related
Parties) to any swap, derivative or other transaction under which payments are
to be made by reference to any Borrower Party and its obligations, this
Agreement or payments hereunder; or (iii) any rating agency; (g) in summary form
in any offering memorandum for any CLO Securities or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section by such party, or (y) becomes available to such party or any of
their respective Affiliates on a nonconfidential basis from a source other than
a party to this Agreement.  For purposes of this Section, “Information” means
all information received from a party to this Agreement, the terms and substance
of this Agreement and each other Transaction Document and any term sheet.

 

-71-

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

 

 

(o)     Nonreliance. Each party acknowledges to each of the others that it is a
sophisticated buyer or seller (as the case may be) with respect to the
transactions described in this Agreement, and has adequate information
concerning the business and financial condition of the obligors on the Portfolio
Assets to make an informed decision regarding the acquisition and disposition of
the Portfolio Assets. Each party hereby agrees that it has independently, and
without reliance on any other, and based on such information as it has deemed
appropriate, made its own analysis and decision to enter into the transactions
described in this Agreement; provided that the Borrower Parties and the Lenders
are relying on the Collateral Manager to select Assets in accordance with the
standard of care set forth in the Collateral Management Agreement and to
determine that such Assets, on the date of such selection and at the time of
their acquisition by the applicable Borrower Party, satisfy the Eligibility
Requirements and are eligible for acquisition by the Borrower Parties in
accordance with the terms and conditions set forth in the Underlying Instrument
pursuant to which such Assets were issued. From time to time upon the Collateral
Manager’s reasonable request therefor, each Borrower Party shall provide to the
Collateral Manager customary information regarding its status for purposes of
confirming such eligibility.

 

(p)     Increased Costs. The Borrower Parties shall reimburse or compensate the
Lenders, upon demand to the extent that funds in the Accounts are available for
such payment in accordance with this Agreement, for all costs incurred, losses
suffered or payments (made by the Lenders which are applied or reasonably
allocated by the Lenders to the transactions contemplated herein (all as
determined by the Lenders in its reasonable discretion) by reason of (A) any and
all future reserve, deposit, capital adequacy or similar requirements against
(or against any class of or change in or in the amount of) assets, liabilities
or commitments of, or extensions of credit by, the Lenders; and compliance by
the Lenders with any directive, or requirements from any regulatory authority,
whether or not having the force of law, or (B) any Tax (other than any Excluded
Tax), increased Tax (other than any Excluded Tax), or change in the basis or
rate of taxation (other than any Excluded Tax) of payments, of any kind
whatsoever with respect to this Agreement or any other Transaction Document or
Loan, that in each of the foregoing cases in this Section 13(p) results or
arises from any Change in Law.

 

(q)     Contractual Recognition of Bail-In. Notwithstanding any other term of
any Transaction Document or any other agreement, arrangement or understanding
between the parties to any Transaction Document, each party hereto acknowledges
and accepts that any liability of any party to any other party under or in
connection with the Transaction Documents may be subject to Bail-In Action by
the relevant Resolution Authority and acknowledges and accepts to be bound by
the effect of:

 

(i)     any Bail-in Action in relation to any such liability, including (without
limitation):

 

(A)     a reduction, in full or in part, in the principal amount, or outstanding
amount due (including any accrued but unpaid interest) in respect of any such
liability;

 

(B)     a conversion of all, or part of, any such liability into shares or other
instruments of ownership that may be issued to, or conferred on, it; and

 

(C)     a cancellation of any such liability; and

 

-72-

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

 

 

(r)     a variation of any term of any Transaction Document to the extent
necessary to give effect to any Bail-In Action in relation to any such
liability.

 

(s)     Final Agreement. THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

(t)     Survival. All covenants, agreements, representations and warranties made
by the Borrower Parties herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Administrative Agent and the Lenders and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by the Administrative Agent or any
Lender or on its behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid. The provisions of Sections 2(j), 13(d),
13(e), 13(f), 13(g), 13(k), 13(l), 13(n), 13(p), 13(q) and this Section 13(s)
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of any commitment to fund Loans or the termination of
this Agreement or any provision hereof.

 

-73-

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date first above written.

 

  BNP PARIBAS,
as Lender                 By: 

/s/ Adnan A. Zuberi     

     

Name: Adnan A. Zuberi
Title: Managing Director

                    By:   /s/ Patrick McKee          Name: Patrick McKee
Title: Managing Director                    

EXECUTED as a DEED by

JMP CREDIT ADVISORS LONG-TERM

WAREHOUSE LTD.,
as Borrower

                    By: /s/ Nicholas Swartz            Name: Nicholas Swartz
Title: Director                     JMP CREDIT ADVISORS LLC,
as Collateral Manager                     By: /s/ Craig Kitchin          Name:
Craig Kitchin
Title: Chief Financial Officer  

 

Credit Agreement

 

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

 

 

  JMP CAPITAL LLC,
as Preferred Investor                 By:  /s/ Raymond Jackson         Name:
Raymond Jackson
Title: Chief Financial Officer                     BNP PARIBAS,
as Administrative Agent                     By: /s/ Adnan A. Zuberi          
Name: Adnan A. Zuberi
Title: Managing Director                     By: Patrick McKee       Name:
Patrick McKee
Title: Managing Director  

 

Credit Agreement

 

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

 

 

 

EXECUTED as a DEED by

JMP CREDIT ADVISORS CLO VI

WAREHOUSE LTD.,

as a CLO Subsidiary

 

                By:  /s/ Nicholas Swartz       Name: Nicholas Swartz
Title: Director  

 

 

Credit Agreement

 

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

 

 

Schedule A

 

ADDRESSES FOR NOTICES

 

Lender:

BNP Paribas
Loan Servicing
525 Washington Blvd -8th Floor
Jersey City, NJ 07310
Attention: NYLS FIG Support
Facsimile no.: 201-850-4014
E-mail: nyls.fig.support@us.bnpparibas.com

 

 

Borrower:

 

JMP Credit Advisors Long-Term Warehouse Ltd.

c/o Estera Trust (Cayman) Limited

Clifton House, 75 Fort Street

Grand Cayman KY1-1108, Cayman Islands 

Tel: +1 (345) 640 0540

Fax: + 1 (345) 949 4901

Email: sf@estera.com

 

With a copy to:

 

Ray Jackson

JMP Group, JMP Securities LLC & Harvest Capital Strategies LLC

Chief Financial Officer and Managing Director

600 Montgomery Street, Suite 1100

San Francisco, California 94111

Telephone: (415) 835-3979
Facsimile: (415) 835-8986
Email: rjackson@jmpg.com

 

Preferred Investor:

JMP Capital LLC

Chief Financial Officer

600 Montgomery Street, Suite 1100

San Francisco, California 94111

Telephone: (415) 835-3979
Facsimile:  (415) 835-8986
Email:  rjackson@jmpg.com

 

Sch. A-1

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

 

 

Collateral Manager:

JMP Credit Advisors LLC
8000 Avalon Blvd, Suite 460

Alpharetta, Georgia 30009

Attention: April Lowry
Fax: (678) 366-0363
E-mail: clo@jmpcredit.com

 

With a copy to:

 

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, New York 10022

Attention: Stanford A. Renas

Fax: (212) 940 8776

E-mail: stanford.renas@kattenlaw.com

 

With a copy to:

 

Ray Jackson

JMP Group, JMP Securities LLC & Harvest Capital Strategies LLC

Chief Financial Officer and Managing Director

600 Montgomery Street, Suite 1100

San Francisco, California 94111

Telephone: (415) 835-3979
Facsimile: (415) 835-8986
Email: rjackson@jmpg.com

 

Administrative Agent:

BNP Paribas
Solutions Portfolio Management
787 7th Avenue
New York, New York 10019
Telephone No.: 917-472-4841
Facsimile No.: 212-841-2140
E-mail: BNPP.JMP.ACQUISITION@us.bnpparibas.com
Attention: Mary D. Dierdorff

 

Custodian:

 

U.S. Bank National Association

190 S. LaSalle Street, 8th Floor

Chicago, Illinois 60603
Attention: Global Corporate Trust Services—JMP Credit Advisors Long-Term
Warehouse Ltd.

E-mail: JMPCreditAdvisorsLTWH@usbank.com

 

Sch. A-2

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

 

 

CLO Subsidiary I:

 

JMP Credit Advisors CLO VI Warehouse Ltd.

c/o Estera Trust (Cayman) Limited

Clifton House, 75 Fort Street

Grand Cayman KY1-1108, Cayman Islands

Tel: +1 (345) 640 0540

Fax: + 1 (345) 949 4901

Email: sf@estera.com

 

With a copy to:

 

Ray Jackson

JMP Group, JMP Securities LLC & Harvest Capital Strategies LLC

Chief Financial Officer and Managing Director

600 Montgomery Street, Suite 1100

San Francisco, California 94111

Telephone: (415) 835-3979
Facsimile: (415) 835-8986
Email: rjackson@jmpg.com

 

Sch. A-3

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

 

 

Schedule B

 

 

INDIVIDUAL LENDER MAXIMUM FUNDING AMOUNTS

 

Lender

Individual Lender Maximum Funding

Amount

 

BNP Paribas

 

(a) On the date hereof, U.S.$22,500,000, so long as Section 7(a)(i) and Section
7(a)(ii) are satisfied and (b) upon the purchase of additional Preference
Shares, the lesser of (i) the product of (x) the Facility Factor and (y) the
then funded Subscription Amount as of such date and (ii) U.S.$100,000,000;
provided that, if the Outstanding Principal Amount of the Loans is less than 50%
of the Maximum Facility Amount for any consecutive six-month period, the Maximum
Facility Amount shall become the Outstanding Principal Amount of the Loans as of
the close of business on the last day of such six-month period.

 

Sch. B-1

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

 

 

Schedule C

 

ELIGIBILITY REQUIREMENTS

 

“Eligibility Requirements” means, with respect to each Portfolio Asset at the
time of the commitment to purchase by the applicable Borrower Party, the
following requirements:

 

(a)     such Portfolio Asset is U.S. Dollar denominated and is not convertible
by (i) the Borrower or (ii) the obligor of such Portfolio Asset into, nor
payable in, any other currency, with any payments under such Portfolio Asset to
be made only in U.S. Dollars;

 

(b)     such Portfolio Asset is a Senior Secured Loan or a Second Lien Loan;

 

(c)     such Portfolio Asset is not a (i) Bridge Loan, (ii) Credit Risk
Obligation, (iii) Defaulted Obligation, (iv) Deferrable Security, (v) DIP
Collateral Obligation, (vi) Letter of Credit, (vii) Step-Up Obligation, (viii)
Step-Down Obligation, (ix) Structured Finance Obligation, (x) Synthetic
Security, (xi) Zero-Coupon Security or (xii) a Bond;

 

(d)     such Portfolio Asset is not a (i) lease, (ii) preferred equity
instrument or (iii) structurally subordinated holding company loan;

 

(e)     such Portfolio Asset has (i) an S&P Rating of at least “B-” or (ii)
either (A) a Moody’s Rating of at least “Caa2” and a Moody’s Default Probability
Rating of at least “B3” or (B) a Moody’s Rating of at least “B3”; provided that
if such Portfolio Asset has both an S&P Rating and a Moody’s Rating, such
Portfolio Asset must have (x) an S&P Rating of at least “B-” and (y) either (A)
a Moody’s Rating of at least “Caa2” and a Moody’s Default Probability Rating of
at least “B3” or (B) a Moody’s Rating of at least “B3”;

 

(f)     such Portfolio Asset is not a debt obligation whose repayment is subject
to substantial non-credit related risk as determined by the Collateral Manager;

 

(g)     other than a Delayed Drawdown Collateral Obligation, such Portfolio
Asset does not require any Borrower Party to make one or more future advances to
the obligor under the Underlying Instruments relating thereto;

 

(h)     such Portfolio Asset does not have an “f,” “r,” “p,” “pi,” “q”, “sf” or
“t” subscript assigned by S&P;

 

(i)     the acquisition of such Portfolio Asset will not cause any Borrower
Party or the pool of Assets to be required to register as an “investment
company” under the Investment Company Act of 1940, as amended;

 

Sch. C-1

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

 

 

(j)     such Portfolio Asset is not subject to a tender offer, voluntary
redemption, exchange offer, conversion or other similar action for a price less
than its par amount plus all accrued and unpaid interest;

 

(k)     such Portfolio Asset is not issued pursuant to an Underlying Instrument
governing the issuance of indebtedness having an aggregate principal amount
(whether drawn or undrawn) of less than U.S.$150,000,000;

 

(l)     such Portfolio Asset has an original term to maturity no later than the
earlier of (i) 8 years and 6 months from the end of the Revolving Period under
clause (i) of the definition thereof and (ii) 9 years from the date the Borrower
commits to acquire such Portfolio Asset;

 

(m)     as of the related Acquisition Date, such Portfolio Asset is not
delinquent in payment of either principal or interest;

 

(n)     such Portfolio Asset provides for (i) periodic payments of accrued and
unpaid interest in cash on a current basis no less frequently than semi-annually
and (ii) the full amount of principal payable in cash no later than its stated
maturity;

 

(o)     such Portfolio Asset (i) is not an Equity Security and (ii) does not
provide for the conversion or exchange into an Equity Security at any time on or
after the date it is included as part of the Assets;

 

(p)     such Portfolio Asset is not subject to a material modification and such
Portfolio Asset is not a loan or extension of credit by any Borrower Party to
the obligor for the purpose of (i) making any past due principal, interest or
other payments due on such Portfolio Asset or (ii) preventing such Portfolio
Asset or any other loan to the related obligor from becoming past due;

 

(q)     the obligor with respect to such Portfolio Asset is an Eligible Obligor;

 

(r)     such Portfolio Asset does not constitute Margin Stock (as defined in
Regulation U issued by the Board of Governors of the Federal Reserve System);

 

(s)     such Portfolio Asset and the Underlying Instruments related thereto are
capable of being sold legally and beneficially or assigned to or participated in
by the applicable Borrower Party and neither such sale, assignment or
participation of such Portfolio Asset to the applicable Borrower Party, nor the
granting of a security interest hereunder by the applicable Borrower Party in
respect of such Portfolio Asset, violates, conflicts with or contravenes any
applicable law, or any contractual or other restriction, limitation or
encumbrance;

 

(t)     such Portfolio Asset is Registered;

 

(u)     such Portfolio Asset has payments that do not and will not subject the
Borrower to withholding tax (other than any withholding or other similar taxes
on commitment fees or similar fees or fees that by their nature are commitment
fees or similar fees) or other similar tax unless the related obligor is
required to make “gross-up” payments that ensure that the net amount actually
received by the applicable Borrower Party will equal the full amount that such
Borrower Party would have received had no such taxes been imposed;

 

Sch. C-2

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

 

 

(v)     the acquisition of such Portfolio Asset will not cause any Borrower
Party to violate the provisions set forth in Annex E hereto; and

 

(w)     such Portfolio Asset satisfies such other eligibility requirements as
may be mutually agreed upon by the Administrative Agent and the Borrower prior
to the applicable time of commitment to purchase by a Borrower Party;

 

provided that the parties hereto may agree in writing to specifically waive any
of the requirements set forth above with respect to any single Asset (it being
understood that no party hereto shall be required to provide any such waiver),
and upon such waiver, such waived requirements shall be deemed not to be part of
the Eligibility Requirements with respect to such Asset.

 

Sch. C-3

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

 

 

Schedule D-1

 

Moody’s Industry Classification Group List

 

 

CORP - Aerospace & Defense

1

CORP – Automotive

2

CORP - Banking, Finance, Insurance & Real Estate

3

CORP - Beverage, Food & Tobacco

4

CORP - Capital Equipment

5

CORP - Chemicals, Plastics, & Rubber

6

CORP - Construction & Building

7

CORP - Consumer goods: Durable

8

CORP - Consumer goods: Non-durable

9

CORP - Containers, Packaging & Glass

10

CORP - Energy: Electricity

11

CORP - Energy: Oil & Gas

12

CORP - Environmental Industries

13

CORP - Forest Products & Paper

14

CORP - Healthcare & Pharmaceuticals

15

CORP - High Tech Industries

16

CORP - Hotel, Gaming & Leisure

17

CORP - Media: Advertising, Printing & Publishing

18

CORP - Media: Broadcasting & Subscription

19

CORP - Media: Diversified & Production

20

CORP - Metals & Mining

21

CORP - Retail

22

CORP - Services: Business

23

CORP - Services: Consumer

24

CORP - Sovereign & Public Finance

25

CORP - Telecommunications

26

CORP - Transportation: Cargo

27

CORP - Transportation: Consumer

28

CORP - Utilities: Electric

29

CORP - Utilities: Oil & Gas

30

CORP - Utilities: Water

31

CORP - Wholesale

32

 

Sch. D-1-1

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

 

 

Schedule D-2

 

S&P Industry Classifications

 

Industry Code

 

Description

 

Industry Code

 

Description

1020000

 

Energy Equipment & Services

 

5220000

 

Personal Products

1030000

 

Oil, Gas & Consumable Fuels

 

6020000

 

Health Care Equipment & Supplies

2020000

 

Chemicals

 

6030000

 

Health Care Providers & Services

2030000

 

Construction Materials

 

9551729

 

Health Care Technology

2040000

 

Containers & Packaging

 

6110000

 

Biotechnology

2050000

 

Metals & Mining

 

6120000

 

Pharmaceuticals

2060000

 

Paper & Forest Products

 

9551727

 

Life Sciences Tools & Services

3020000

 

Aerospace & Defense

 

7011000

 

Banks

3030000

 

Building Products

 

7020000

 

Thrifts & Mortgage Finance

3040000

 

Construction & Engineering

 

7110000

 

Diversified Financial Services

3050000

 

Electrical Equipment

 

7120000

 

Consumer Finance

3060000

 

Industrial Conglomerates

 

7130000

 

Capital Markets

3070000

 

Machinery

 

7210000

 

Insurance

3080000

 

Trading Companies & Distributors

 

7311000

 

Real Estate Investment Trusts (REITs)

3110000

 

Commercial Services & Supplies

 

7310000

 

Real Estate Management & Development

9612010

 

Professional Services

 

8020000

 

Internet Software & Services

3210000

 

Air Freight & Logistics

 

8030000

 

IT Services

3220000

 

Airlines

 

8040000

 

Software

3230000

 

Marine

 

8110000

 

Communications Equipment

3240000

 

Road & Rail

 

8120000

 

Technology Hardware, Storage & Peripherals

3250000

 

Transportation Infrastructure

 

8130000

 

Electronic Equipment, Instruments & Components

4011000

 

Auto Components

 

8210000

 

Semiconductors & Semiconductor Equipment

4020000

 

Automobiles

 

9020000

 

Diversified Telecommunication Services

4110000

 

Household Durables

 

9030000

 

Wireless Telecommunication Services

4120000

 

Leisure Products

 

9520000

 

Electric Utilities

4130000

 

Textiles, Apparel & Luxury Goods

 

9530000

 

Gas Utilities

4210000

 

Hotels, Restaurants & Leisure

 

9540000

 

Multi-Utilities

9551701

 

Diversified Consumer Services

 

9550000

 

Water Utilities

4310000

 

Media

 

9551702

 

Independent Power and Renewable Electricity Producers

4410000

 

Distributors

 

PF1

 

Project Finance: Industrial Equipment

4420000

 

Internet and Catalog Retail

 

PF2

 

Projection Finance: Leisure and Gaming

4430000

 

Multiline Retail

 

PF3

 

Project Finance: Natural Resources and Mining

4440000

 

Specialty Retail

 

PF4

 

Project Finance: Oil and Gas

5020000

 

Food & Staples Retailing

 

PF5

 

Project Finance: Power

5110000

 

Beverages

 

PF6

 

Project Finance: Public Finance and Real Estate

5120000

 

Food Products

 

PF7

 

Project Finance: Telecommunications

5130000

 

Tobacco

 

PF8

 

Project Finance: Transport

5210000

 

Household Products

 

IPF

 

International Public Finance

 

Sch. D-2-1

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

 

 

Schedule E-1

 

MOODY’S RATING DEFINITIONS

 

“Assigned Moody’s Rating” means the monitored publicly available rating, the
private rating (so long as such private rating has been issued or provided by
Moody’s within the previous 15 months) or the credit estimate (so long as such
credit estimate has been issued or provided by Moody’s within the previous 15
months) expressly assigned to a debt obligation (or facility) by Moody’s;
provided that, in the case of a private rating or credit estimate assigned to an
obligation by Moody’s more than 13 months earlier, the Assigned Moody’s Rating
of such obligation shall be one subcategory lower than such private rating or
credit estimate, as applicable.

 

“CFR” means with respect to an issuer or obligor of a Portfolio Asset, (a) if
such issuer or obligor has a corporate family rating by Moody’s, then such
corporate family rating, or (b) if such issuer or obligor does not have a
corporate family rating by Moody’s but any entity in the corporate family of
such issuer or obligor does have a corporate family rating, then such corporate
family rating.

 

“Moody’s Default Probability Rating” means, with respect to any Portfolio Asset,
as of any date of determination, the rating determined in accordance with the
following methodology:

 

(i)     If the obligor of such Portfolio Asset has a CFR, then such CFR;

 

(ii)     If not determined pursuant to clause (i) above, if such Portfolio Asset
has an Assigned Moody’s Rating, then (x) in the case of a Moody’s Senior Secured
Loan or participation interest in a Moody’s Senior Secured Loan with respect to
which the Assigned Moody’s Rating is the monitored publicly available rating
thereof, the Moody’s rating that is one subcategory lower than such monitored
publicly available rating, and (y) in all other cases, such Assigned Moody’s
Rating;

 

(iii)     If not determined pursuant to clause (i) or (ii) above, (A) if the
obligor of such Portfolio Asset has one or more senior unsecured obligations
with an Assigned Moody’s Rating, then the Assigned Moody’s Rating on any such
obligation as selected by the Collateral Manager in its sole discretion or, if
no such rating is available, (B) if the obligor of such Portfolio Asset has one
or more senior secured obligations with an Assigned Moody’s Rating, then the
Moody’s rating that is one subcategory lower than the Assigned Moody’s Rating on
any such obligation as selected by the Collateral Manager in its sole
discretion; and

 

(iv)     If not determined pursuant to clause (i) through (iii) above, the
Moody’s Derived Rating;

 

provided that, for purposes of calculating a Moody’s Weighted Average Rating
Factor, each applicable rating, at the time of calculation, on credit watch by
Moody’s with positive or negative implication will be treated as having been
upgraded or downgraded by one rating subcategory, as the case may be.

 

Sch. E-1-1

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

 

 

“Moody’s Derived Rating” means, with respect to a Portfolio Asset whose Moody’s
Rating or Moody’s Default Probability Rating cannot otherwise be determined
pursuant to the definitions thereof, such Moody’s Rating or Moody’s Default
Probability Rating as determined in the manner set forth below:

 

(i)     By using any one of the methods provided below:

 

(A)     if such Portfolio Asset has a public and monitored rating by S&P,
pursuant to the table below:

 

Type of Portfolio Asset

 

Rating by S&P

(Public and

Monitored)

 

Portfolio Asset Rated

by S&P

 

Number of

Subcategories

Relative to

Moody’s

Equivalent of

Rating by

S&P

Not Structured Finance Obligation

 

>BBB-

 

Not a loan or participation interest in loan

 

-1

Not Structured Finance Obligation

 

<BB+

 

Not a loan or participation interest in loan

 

-2

Not Structured Finance Obligation

     

Loan or participation interest in loan

 

-2

 

(B)     if such Portfolio Asset is not rated by S&P but another security or
obligation of the obligor has a public and monitored rating by S&P (a “parallel
security”), then the rating of such parallel security will at the election of
the Collateral Manager be determined in accordance with the table set forth in
subclause (i)(A) above, and the Moody’s Rating or Moody’s Default Probability
Rating of such Portfolio Asset will be determined in accordance with the
methodology set forth in the table below (for such purposes treating the
parallel security as if it were rated by Moody’s at the rating determined
pursuant to this subclause (i)(B)):

 

Obligation Category of Rated

Obligation

 

Rating of Rated

Obligation

 

Number of Subcategories

Relative to Rated Obligation

Rating

Senior secured obligation

 

greater than or equal to B2

 

-1

Senior secured obligation

 

less than B2

 

-2

Subordinated obligation

 

greater than or equal to B3

 

+1

Subordinated obligation

 

less than B3

 

0

 

Sch. E-1-2

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

 

 

and

 

(ii)     If not determined pursuant to clause (i) above, then “Caa3”.

 

For purposes of calculating a Moody’s Derived Rating, each applicable rating on
credit watch by Moody’s that is on (x) positive watch will be treated as having
been upgraded by one rating subcategory and (y) negative watch will be treated
as having been downgraded by one rating subcategory.

 

“Moody's Non-Senior Secured Loan” has the meaning set forth on Schedule F
hereto.

 

“Moody’s Rating” means, with respect to any Portfolio Asset, as of any date of
determination, the rating determined in accordance with the following
methodology:

 

(i)     With respect to a Moody’s Senior Secured Loan, the rating thereof
determined as follows:

 

(a)     With respect to a Portfolio Asset that has an Assigned Moody’s Rating,
such Assigned Moody’s Rating.

 

(b)     If not determined pursuant to clause (a) above, if the obligor of such
Portfolio Asset has a CFR, then the Moody’s rating that is one subcategory
higher than such CFR.

 

(c)     If not determined pursuant to clause (a) or (b) above, if the obligor of
such Portfolio Asset has one or more senior unsecured obligations with an
Assigned Moody’s Rating, then the Moody’s rating that is two subcategories
higher than the Assigned Moody’s Rating on any such senior unsecured obligation,
as selected by the Collateral Manager in its sole discretion.

 

(d)     If not determined pursuant to clause (a), (b) or (c) above, the Moody’s
Derived Rating.

 

(ii)     With respect to a Moody’s Non-Senior Secured Loan, the rating thereof
determined as follows,

 

(a)     With respect to a Portfolio Asset that has an Assigned Moody’s Rating,
such Assigned Moody’s Rating.

 

(b)     If not determined pursuant to clause (a) above, if the obligor of such
Portfolio Asset has one or more senior unsecured obligations with an Assigned
Moody’s Rating, then the Assigned Moody’s Rating on any such obligation, as
selected by the Collateral Manager in its sole discretion.

 

Sch. E-1-3

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

 

 

(c)     If not determined pursuant to clause (a) or (b) above, if the obligor of
such Portfolio Asset has a CFR, then the Moody’s rating that is one subcategory
lower than such CFR.

 

(d)     If not determined pursuant to clause (a), (b) or (c) above, if another
obligation of the related obligor that is subordinate in right of payment to
such Portfolio Asset has an Assigned Moody’s Rating, then the Moody’s rating
that is one subcategory higher than the Assigned Moody’s Rating on such
obligation.

 

(e)     If not determined pursuant to clause (a), (b), (c) or (d) above, the
Moody’s Derived Rating.

 

For purposes of calculating a Moody’s Rating, each applicable rating on credit
watch by Moody’s that is on (x) positive watch will be treated as having been
upgraded by one rating subcategory and (y) negative watch will be treated as
having been downgraded by one rating subcategory.

 

“Moody’s Senior Secured Loan” means:

 

(a)     a loan that:

 

(i)     is not (and cannot by its terms become) subordinate in right of payment
to any other debt obligation of the obligor of the loan;

 

(ii)     (x) is secured by a valid first priority perfected security interest or
lien in, to or on specified collateral securing the obligor’s obligations under
the loan and (y) such specified collateral does not consist entirely of equity
securities or common stock; provided that any loan that would be considered a
Moody’s Senior Secured Loan but for clause (y) above shall be considered a
Moody’s Senior Secured Loan if it is a loan made to a parent entity and as to
which the Collateral Manager determines in good faith that the value of the
common stock of the subsidiary (or other equity interests in the subsidiary)
securing such loan at or about the time of acquisition of such loan by the
Borrower has a value that is at least equal to the outstanding principal balance
of such loan and the outstanding principal balances of any other obligations of
such parent entity that are pari passu with such loan, which value may include,
among other things, the enterprise value of such subsidiary of such parent
entity; and

 

(iii)     the value of the collateral securing the loan together with other
attributes of the obligor (including, without limitation, its general financial
condition, ability to generate cash flow available for debt service and other
demands for that cash flow) is adequate (in the commercially reasonable judgment
of the Collateral Manager) to repay the loan in accordance with its terms and to
repay all other loans of equal seniority secured by a first lien or security
interest in the same collateral; or

 

Sch. E-1-4

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

 

 

(b)     a loan that:

 

(i)     is not (and cannot by its terms become) subordinate in right of payment
to any other debt obligation of the obligor of the loan, except that such loan
can be subordinate with respect to the liquidation of such obligor or the
collateral for such loan;

 

(ii)     with respect to such liquidation, is secured by a valid perfected
security interest or lien that is not a first priority in, to or on specified
collateral securing the obligor’s obligations under the loan;

 

(iii)     the value of the collateral securing the loan together with other
attributes of the obligor (including, without limitation, its general financial
condition, ability to generate cash flow available for debt service and other
demands for that cash flow) is adequate (in the commercially reasonable judgment
of the Collateral Manager) to repay the loan in accordance with its terms and to
repay all other loans of equal or higher seniority secured in the same
collateral; and

 

(iv)     (x) has a Moody’s facility rating and the obligor of such loan has a
Moody’s corporate family rating and (y) such Moody’s facility rating is not
lower than such Moody’s corporate family rating; and

 

(c)     the loan is not:

 

(i)     a DIP Collateral Obligation; or

 

(ii)     a loan for which the security interest or lien (or the validity or
effectiveness thereof) in substantially all of its collateral attaches, becomes
effective, or otherwise “springs” into existence after the origination thereof.

 

Sch. E-1-5

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

 

 

Schedule E-2

 

S&P RATING DEFINITION

 

“S&P Rating” means, with respect to any Portfolio Asset, as of any date of
determination, the rating determined in accordance with the following
methodology:

 

(i)     with respect to a Portfolio Asset (a) if there is an issuer credit
rating of the issuer of such Portfolio Asset by S&P as published by S&P, or the
guarantor which unconditionally and irrevocably guarantees such Portfolio Asset
then the S&P Rating will be such rating (regardless of whether there is a
published rating by S&P on the Portfolio Assets of such issuer held by the
Borrower) or (b) if there is no issuer credit rating of the issuer by S&P but
(1) if there is a senior secured rating on any obligation or security of the
issuer, then the S&P Rating of such Portfolio Asset will be one subcategory
below such rating; (2) if there is a senior unsecured rating on any obligation
or security of the issuer, the S&P Rating of such Portfolio Asset will equal
such rating; and (3) if there is a subordinated rating on any obligation or
security of the issuer, then the S&P Rating of such Portfolio Asset will be one
subcategory above such rating if such rating is higher than “BB+,” and will be
two subcategories above such rating if such rating is “BB+” or lower; or

 

(ii)     if there is not a rating by S&P on the issuer or on an obligation of
the issuer, and an obligation of the issuer is publicly rated by Moody’s, then
the S&P Rating will be determined in accordance with the methodologies for
establishing the Moody’s Rating set forth above except that the S&P Rating of
such obligation will be (1) one subcategory below the S&P equivalent of the
Moody’s Rating if such Moody’s Rating is “Baa3” or higher and (2) two
subcategories below the S&P equivalent of the Moody’s Rating if such Moody’s
Rating is “Ba1” or lower; provided that the aggregate principal balance of the
Portfolio Assets that may have an S&P Rating derived from a Moody’s Rating as
set forth in this clause (ii) shall not exceed 10% of the Target CLO Amount;

 

provided, that for purposes of the determination of the S&P Rating, (x) if the
applicable rating assigned by S&P to an obligor or its obligations is on “credit
watch positive” by S&P, such rating will be treated as being one subcategory
above such assigned rating, (y) if the applicable rating assigned by S&P to an
obligor or its obligations is on “credit watch negative” by S&P, such rating
will be treated as being one subcategory below such assigned rating and (z) any
reference to the S&P rating in this definition will mean the public S&P rating
and will not include any private or confidential S&P rating unless (a) the
obligor and any other relevant party has provided written consent to S&P for the
use of such rating; and (b) such rating is subject to continuous monitoring by
S&P.

 

Sch. E-2-1

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

 

 

Schedule F

 

COLLATERAL QUALITY TEST DEFINITIONS

 

“Diversity Score”: A single number that indicates collateral concentration in
terms of both issuer and industry concentration, calculated as set forth in
Schedule H.

 

“Effective Spread” means, with respect to any floating rate Asset, the current
per annum rate at which it pays interest minus LIBOR or, if such floating rate
Asset bears interest based on a floating rate index other than a London
interbank offered rate-based index, the Effective Spread will be the
then-current base rate applicable to such floating rate Asset plus the rate at
which such floating rate Asset pays interest in excess of such base rate minus
three-month LIBOR; provided, that the Effective Spread of any floating rate
Asset will (i) be deemed to be zero, to the extent that any Borrower Party or
the Collateral Manager has actual knowledge that no payment of cash interest on
such floating rate Asset will be made by the obligor thereof during the
applicable due period, and (ii) not include any non-cash interest.

 

“Excess Weighted Average Fixed Coupon” means, as of any Measurement Date, a
percentage equal to the product obtained by multiplying (a) the greater of zero
and the excess, if any, of the Weighted Average Fixed Coupon over the Minimum
Fixed Coupon by (b) the number obtained by dividing the aggregate principal
balance of all fixed rate Portfolio Assets (excluding any Defaulted Obligation
and, to the extent of any non-cash interest, any Deferrable Security or any
Partial Deferrable Security) by the aggregate principal balance of all floating
rate Portfolio Assets (excluding any Defaulted Obligation and, to the extent of
any non-cash interest, any Deferrable Security or any Partial Deferrable
Security).

 

“Excess Weighted Average Floating Spread” means, as of any Measurement Date, a
percentage equal to the product obtained by multiplying (a) the greater of zero
and the excess, if any, of the Weighted Average Floating Spread over the Minimum
Floating Spread by (b) the number obtained by dividing the aggregate principal
balance of all floating rate Traded Portfolio Assets (excluding any Defaulted
Obligation and, to the extent of any non-cash interest, any Deferrable Security
or Partial Deferrable Security) by the aggregate principal balance of all fixed
rate Traded Portfolio Assets (excluding any Defaulted Obligation and, to the
extent of any non-cash interest, any Deferrable Security or any Partial
Deferrable Security).

 

“First-Lien Last-Out Loan” means any assignment of, participation interest in or
other interest in an Asset that (a) is secured by a first priority perfected
security interest or lien in, to or on specified collateral (subject to
customary exemptions for permitted liens, including, without limitation, any tax
liens) securing the obligor’s obligations under the Asset and (b) may by its
terms become subordinate in right of payment to any other obligation of the
obligor of the Asset solely upon the occurrence of a default or event of default
by the obligor of the Asset.

 

“LIBOR Floor Obligation” means a floating rate Traded Portfolio Asset (a) for
which its Underlying Instruments allow an interest rate option based on the
London interbank offered rate for deposits in Dollars, (b) that provides that
such rate is calculated (in effect) as the greater of (i) a specified “floor”
rate per annum and (ii) the London interbank offered rate for such floating rate
Traded Portfolio Asset’s applicable interest period and (c) that, as of any date
of determination, bears interest at its “floor” rate because the London
interbank offered rate for the applicable interest period is less than such
"floor" rate.

 

Sch. F-1

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

 

 

“Minimum Diversity Score” means 15; provided that at any time the sum of the
Principal Balances of the Traded Portfolio Assets is greater than or equal to
$75,000,000, 20.

 

“Minimum Diversity Test” means a test that is satisfied on any date of
determination if the Diversity Score (rounded to the nearest whole number)
equals or exceeds the Minimum Diversity Score.

 

“Minimum Fixed Coupon” means 7.50%.

 

“Minimum Floating Spread” means 2.75%.

 

“Minimum Floating Spread Test” means a test that is satisfied on any date of
determination if the Weighted Average Floating Spread equals or exceeds the
Minimum Floating Spread.

 

“Minimum Weighted Average Coupon Test” means a test that is satisfied on any
date of determination if the Weighted Average Fixed Coupon equals or exceeds the
Minimum Fixed Coupon.

 

“Moody’s Adjusted Weighted Average Rating Factor” means as of any date of
determination, a number equal to the Moody’s Weighted Average Rating Factor
determined in the following manner: for purposes of determining a Moody’s
Default Probability Rating in connection with determining the Moody’s Weighted
Average Rating Factor for purposes of this definition, the last paragraph of the
definition of “Moody’s Default Probability Rating,” shall be disregarded, and
instead each applicable rating on review by Moody’s for possible upgrade or
downgrade that is on (a) review for possible upgrade will be treated as having
been upgraded by one rating subcategory, (b) review for possible downgrade will
be treated as having been downgraded by two rating subcategories and
(c) negative outlook will be treated as having been downgraded by one rating
subcategory.

 

“Moody’s Default Probability Rating” means with respect to any Asset, the rating
determined pursuant to Schedule E-1 hereto.

 

“Moody’s Maximum Rating Factor Test” means a test that will be satisfied on any
date of determination if the Moody’s Adjusted Weighted Average Rating Factor of
the Assets is less than or equal to 2850.

 

“Moody’s Minimum Weighted Average Recovery Rate Test” means the test that will
be satisfied on any date of determination if the Moody’s Weighted Average
Recovery Rate equals or exceeds 43%.

 

“Moody’s Non-Senior Secured Loan” means any assignment of or participation
interest in or other interest in a loan that is not a Moody’s Senior Secured
Loan.

 

Sch. F-2

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

 

 

“Moody’s Rating” has the meaning set forth on Schedule E-1 hereto.

 

“Moody’s Rating Factor” means for each Traded Portfolio Asset, the number set
forth in the table below opposite the Moody’s Default Probability Rating of such
Portfolio Asset.

 

Moody’s Default

Probability Rating

 

Moody’s Rating Factor

 

Moody’s Default

Probability Rating

 

Moody’s Rating Factor

Aaa

 

1

 

Ba1

 

940

Aa1

 

10

 

Ba2

 

1,350

Aa2

 

20

 

Ba3

 

1,766

Aa3

 

40

 

B1

 

2,220

A1

 

70

 

B2

 

2,720

A2

 

120

 

B3

 

3,490

A3

 

180

 

Caa1

 

4,770

Baa1

 

260

 

Caa2

 

6,500

Baa2

 

360

 

Caa3

 

8,070

Baa3

 

610

 

Ca or lower

 

10,000

 

“Moody’s Recovery Rate” means, with respect to any Asset, as of any date of
determination, the recovery rate determined in accordance with the following, in
the following order of priority:

 

(i)     if the Asset has been specifically assigned a recovery rate by Moody’s
(for example, in connection with the assignment by Moody’s of an estimated
rating), such recovery rate;

 

(ii)     if the preceding clause does not apply to the Asset, the rate
determined pursuant to the table below based on the number of rating
subcategories difference between the Asset’s Moody’s Rating and its Moody’s
Default Probability Rating (for purposes of clarification, if the Moody’s Rating
is higher than the Moody’s Default Probability Rating, the rating subcategories
difference will be positive and if it is lower, negative):

 

Number of Moody’s Ratings

Subcategories Difference
Between the Moody’s
Rating and the Moody’s
Default Probability Rating

   

Moody’s Senior Secured

Loans

   

Moody’s Second
Lien Loans

   

Portfolio Assets Not

Included in Another

Column in this Table

 

+2 or more

      60.0%       55%       45%  

+1

      50.0%       45%       35%   0       45.0%       35%       30%   -1      
40.0%       25%       25%   -2       30.0%       15%       15%  

-3 or less

      20.0%       5%       5%  

 

“Moody’s Second Lien Loan” means a loan that (x) is not a Moody’s Senior Secured
Loan and (y) has a Moody’s facility rating and the obligor of such loan has a
Moody’s corporate family rating.

 

“Moody’s Senior Secured Loan” has the meaning set forth on Schedule E-1 hereto.

 

Sch. F-3

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

 

 

“Moody’s Weighted Average Rating Factor” means the number (rounded up to the
nearest whole number) determined by summing the products obtained by multiplying
the Principal Balance of each Traded Portfolio Asset (excluding any Defaulted
Obligation) by its Moody’s Rating Factor, dividing such sum by the aggregate of
the outstanding Principal Balance of all such Traded Portfolio Assets and then
rounding the result up to the nearest whole number.

 

“Moody’s Weighted Average Recovery Rate” means as of any date of determination,
the number, expressed as a percentage, obtained by summing the product of the
Moody’s Recovery Rate on such date of each Traded Portfolio Asset (excluding any
Defaulted Obligation) and the Principal Balance of such Traded Portfolio Asset,
dividing such sum by the aggregate Principal Balance of all such Assets and
rounding up to the first decimal place.

 

“S&P Recovery Rate” means, with respect to any Asset, the recovery rate
determined in the manner set forth below:

 

(a)     If an Asset has an S&P Asset Specific Recovery Rating, the S&P Recovery
Rate for such Asset shall be the applicable percentage set forth in Table 1
below, based on such S&P Asset Specific Recovery Rating:

 

Table 1: S&P Recovery Rates For Assets With S&P Asset Specific Recovery Ratings

 

Asset Specific Recovery Ratings

Recovery Range from S&P

published reports*

(%)

1+

100

75

1

90-100

65

2

80-90

60

2

70-80

50

3

60-70

40

3

50-60

30

4

40-50

27

4

30-40

20

5

20-30

15

5

10-20

5

6

0-10

2

* If a recovery range is not available from S&P's published reports for a given
Asset with an S&P Asset Specific Recovery Rating of '2' through '5', the lower
range for the applicable recovery rating shall be assumed.

 

Sch. F-4

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

 

 

(b)     If an Asset is senior unsecured debt or subordinate debt and does not
have an S&P Asset Specific Recovery Rating but the same issuer has other debt
obligations that rank senior, the S&P Recovery Rate for such Asset shall be the
applicable percentage set forth in Tables 2 and 3 below:

 

Table 2: Recovery Rates for Senior Unsecured Assets Junior to Assets with
Recovery Ratings

Senior Asset Recovery Rate

(%)

Group 1

 

1+

18

1

18

2

18

3

12

4

5

5

2

 

6

--

Group 2

 

1+

16

1

16

2

16

3

10

4

5

5

2

6

--

Group 3

 

1+

13

1

13

2

13

3

8

4

5

5

2

6

--

 

Table 3: Recovery Rates for Subordinated Assets Junior to Assets with Recovery
Ratings

Senior Asset Recovery Rate

S&P Recovery
Rate

Group 1

 

1+

8

1

8

2

8

3

5

4

2

5

--

6

--

 

(c)     In all other cases, as applicable, the S&P Recovery Rate for such Asset
shall be the applicable percentage set forth in Table 4 below:

 

Table 4: Tiered Corporate Recovery Rates (By Asset Class)

 

S&P Recovery Rate 

Senior secured first-lien (%)*

 

Group 1

50

Group 2

45

Group 3

39

Group 4

17

Senior secured cov-lite loans/ senior secured bonds (%)

 

Group 1

41

Group 2

37

Group 3

32

Group 4

17

Mezzanine/second- lien/ First-Lien Last-Out Loans/senior unsecured loans/senior
unsecured bonds (%)**

 

Group 1

18

Group 2

16

Group 3

13

Group 4

10

Subordinated loans/subordinated bonds (%)

 

Group 1

8

Group 2

10

Group 3

9

Group 4

5

 

Sch. F-5

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

 

 

Group 1: Hong Kong, Norway, Singapore, Sweden, U.K., Ireland, Finland, Denmark,
Netherlands, Australia, and New Zealand

Group 2: Belgium, Germany, Austria, Portugal, Luxembourg, South Africa,
Switzerland, Canada, Israel, Japan and the United States

Group 3: France, Italy, Greece, South Korea, Taiwan, Argentina, Brazil, Chile,
Mexico, Spain, Turkey and United Arab Emirates

Group 4: Kazakhstan, Russia, Ukraine and others not included in Group 1, Group 2
or Group 3

 

*

Solely for the purpose of determining the S&P Recovery Rate for such loan, no
loan shall constitute a “Senior Secured Loan” unless such loan (a) is secured by
a valid first priority security interest in collateral, (b) in the Collateral
Manager’s commercially reasonable judgment (with such determination being made
in good faith by the Collateral Manager at the time of such loan’s purchase and
based upon information reasonably available to the Collateral Manager at such
time and without any requirement of additional investigation beyond the
Collateral Manager’s customary credit review procedures), is secured by
specified collateral that has a value not less than an amount equal to the sum
of (i) the aggregate principal balance of all loans senior or pari passu to such
loans and (ii) the outstanding principal balance of such loan, which value may
be derived from, among other things, the enterprise value (including, but not
comprised primarily of, equity and goodwill) of the issuer of such loan and (c)
is not subordinate to any other obligation; provided that if the value of such
loan is primarily derived from the enterprise value of the issuer of such loan,
such loan shall have either (1) the S&P Recovery Rate specified for Senior
Unsecured Loans in the table above, or (2) the S&P Recovery Rate determined by
S&P on a case by case basis.

 

**

Solely for the purpose of determining the S&P Recovery Rate for such loan, the
aggregate principal balance of all First-Lien Last-Out Loans and Second Lien
Loans that, in the aggregate, represent up to 15% of the Collateral Principal
Amount shall have the S&P Recovery Rate specified for First-Lien Last-Out Loans
and Second Lien Loans in the table above and the aggregate principal balance of
all First-Lien Last-Out Loans and Second Lien Loans in excess of 15% of the
Collateral Principal Amount shall have the S&P Recovery Rate specified for
subordinated loans in the table above.

 

“Weighted Average Fixed Coupon” means, as of any Measurement Date, an amount
equal to (I) the number, expressed as a percentage, obtained by dividing:

 

(a)     the sum of, in the case of each fixed rate Portfolio Asset (excluding
any Deferrable Security and any Partial Deferrable Security to the extent of any
non-cash interest), the stated annual interest coupon on such Asset times the
Principal Balance of such Portfolio Asset; by

 

(b)     an amount equal to the lesser of (i) the product of (A) the Target CLO
Amount and (B) a fraction, the numerator of which is equal to the aggregate
Principal Balance of fixed rate Portfolio Assets and the denominator of which is
equal to the aggregate Principal Balance of all Portfolio Assets as of such
Measurement Date, in each case excluding any Deferrable Security or Partial
Deferrable Security to the extent of any non-cash interest and (ii) the
aggregate Principal Balance of the fixed rate Portfolio Assets as of such
Measurement Date (excluding any Deferrable Security or Partial Deferrable
Security to the extent of any non-cash interest);

 

Sch. F-6

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

 

 

plus (II) to the extent that the amount obtained in clause (I) is insufficient
to satisfy the Minimum Weighted Average Coupon Test, the Excess Weighted Average
Floating Spread (if any); provided that in the case of each of the foregoing
clauses (a) and (b), in calculating the Weighted Average Fixed Coupon in respect
of any Step-Down Obligation, the coupon of such Portfolio Asset shall be the
lowest permissible coupon pursuant to the Underlying Instruments of the obligor
of such Step-Down Obligation.

 

“Weighted Average Floating Spread” means, as of any Measurement Date, a fraction
(expressed as a percentage) obtained by (i) (x) multiplying the Principal
Balance of each floating rate Traded Portfolio Asset (excluding the unfunded
portion of any Delayed Drawdown Collateral Obligation) held by the Borrower
Parties as of such Measurement Date by its Effective Spread and (y) multiplying
the unfunded portion of each Delayed Drawdown Collateral Obligation held by the
Borrower Parties as of such Measurement Date by the related commitment fee,
(ii) summing the amounts determined pursuant to clause (i), (iii) dividing the
sum determined pursuant to clause (ii) by the aggregate Principal Balance of all
floating rate Traded Portfolio Assets, and (iv) if the result obtained in clause
(iii) is less than the minimum percentage necessary to pass the Minimum Floating
Spread Test, adding to such sum the amount of the Excess Weighted Average Fixed
Coupon, if any, as of such Measurement Date; provided that Defaulted Obligations
shall not be included in the calculation of the Weighted Average Floating
Spread; provided, further, that in calculating the Weighted Average Floating
Spread in respect of any Step Down Obligation, the Effective Spread of such
Traded Portfolio Asset shall be the lowest permissible spread pursuant to the
Underlying Instruments of the obligor of such Step-Down Obligation; and
provided, further, that, for the avoidance of doubt, for purposes of this
definition, the Effective Spread of each LIBOR Floor Obligation will be
calculated to include the excess (if any) payable currently in cash of (1) the
specified “floor” rate of such LIBOR Floor Obligation over (2) the applicable
London interbank offered rate then in effect with respect to such the LIBOR
Floor Obligation.

 

Sch. F-7

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

 

 

Schedule G

 

ELIGIBLE INVESTMENTS

 

“Eligible Investments” means any investment that at the time of its acquisition
is one or more of the following:

 

(a)     United States government and agency obligations, maturing within 30
days;

 

(b)     commercial paper, maturing within 30 days, having a rating assigned to
such commercial paper by Standard & Poor’s Rating Services or Moody’s Investor
Service, Inc. (or, if neither such organization shall rate such commercial paper
at such time, by any nationally recognized rating organization in the United
States of America) equal to the highest ratings assigned by such organization,
it being understood that as of the date hereof such rating by S&P is “A-1+” and
such rating by Moody’s is “P-1”;

 

(c)     interest bearing deposits in United States dollars in United States or
Canadian banks with an unrestricted surplus of at least U.S.$250,000,000 and
assigned a credit rating by S&P of a least “A” and a Moody's. rating of at least
“A2”, maturing within 30 days; and

 

(d)     money market funds (including funds of the bank serving as Custodian or
its affiliates) or United States government securities funds designed to
maintain a fixed share price and high liquidity, in each case domiciled outside
of the United States and having a rating assigned to such fund equal to the
highest rating assigned by S&P or Moody's, it being understood that as of the
date hereof such rating by S&P is “AAAm” and such rating by Moody’s is “Aaa-mf”.

 

Sch. G-1

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

 

 

Schedule H

 

DIVERSITY SCORE CALCULATION

 

The Diversity Score is calculated as follows:

 

(a)     An "Issuer Par Amount" is calculated for each issuer of a Portfolio
Asset, and is equal to the aggregate Principal Balance of all the Portfolio
Assets issued by that issuer and all affiliates.

 

(b)     An "Average Par Amount" is calculated by summing the Issuer Par Amounts
for all issuers, and dividing by the number of issuers.

 

(c)     An "Equivalent Unit Score" is calculated for each issuer, and is equal
to the lesser of (x) one and (y) the Issuer Par Amount for such issuer divided
by the Average Par Amount.

 

(d)     An "Aggregate Industry Equivalent Unit Score" is then calculated for
each of the Moody's Industry Classifications, shown on Schedule I, and is equal
to the sum of the Equivalent Unit Scores for each issuer in such industry
classification group.

 

(e)     An "Industry Diversity Score" is then established for each Moody's
Industry Classification, shown on Schedule I, by reference to the following
table for the related Aggregate Industry Equivalent Unit Score; provided that if
any Aggregate Industry Equivalent Unit Score falls between any two such scores,
the applicable Industry Diversity Score shall be the lower of the two Industry
Diversity Scores:

 

Sch. H-1

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

 

 

Aggregate Industry Equivalent Unit Score

   

Industry Diversity Score

   

Aggregate Industry Equivalent Unit Score

   

Industry Diversity Score

   

Aggregate Industry Equivalent Unit Score

   

Industry Diversity Score

   

Aggregate Industry Equivalent Unit Score

   

Industry Diversity Score

  0.0000       0.0000       5.0500       2.7000       10.1500       4.0200      
15.2500       4.5300   0.0500       0.1000       5.1500       2.7333      
10.2500       4.0300       15.3500       4.5400   0.1500       0.2000      
5.2500       2.7667       10.3500       4.0400       15.4500       4.5500  
0.2500       0.3000       5.3500       2.8000       10.4500       4.0500      
15.5500       4.5600   0.3500       0.4000       5.4500       2.8333      
10.5500       4.0600       15.6500       4.5700   0.4500       0.5000      
5.5500       2.8667       10.6500       4.0700       15.7500       4.5800  
0.5500       0.6000       5.6500       2.9000       10.7500       4.0800      
15.8500       4.5900   0.6500       0.7000       5.7500       2.9333      
10.8500       4.0900       15.9500       4.6000   0.7500       0.8000      
5.8500       2.9667       10.9500       4.1000       16.0500       4.6100  
0.8500       0.9000       5.9500       3.0000       11.0500       4.1100      
16.1500       4.6200   0.9500       1.0000       6.0500       3.0250      
11.1500       4.1200       16.2500       4.6300   1.0500       1.0500      
6.1500       3.0500       11.2500       4.1300       16.3500       4.6400  
1.1500       1.1000       6.2500       3.0750       11.3500       4.1400      
16.4500       4.6500   1.2500       1.1500       6.3500       3.1000      
11.4500       4.1500       16.5500       4.6600   1.3500       1.2000      
6.4500       3.1250       11.5500       4.1600       16.6500       4.6700  
1.4500       1.2500       6.5500       3.1500       11.6500       4.1700      
16.7500       4.6800   1.5500       1.3000       6.6500       3.1750      
11.7500       4.1800       16.8500       4.6900   1.6500       1.3500      
6.7500       3.2000       11.8500       4.1900       16.9500       4.7000  
1.7500       1.4000       6.8500       3.2250       11.9500       4.2000      
17.0500       4.7100   1.8500       1.4500       6.9500       3.2500      
12.0500       4.2100       17.1500       4.7200   1.9500       1.5000      
7.0500       3.2750       12.1500       4.2200       17.2500       4.7300  
2.0500       1.5500       7.1500       3.3000       12.2500       4.2300      
17.3500       4.7400   2.1500       1.6000       7.2500       3.3250      
12.3500       4.2400       17.4500       4.7500   2.2500       1.6500      
7.3500       3.3500       12.4500       4.2500       17.5500       4.7600  
2.3500       1.7000       7.4500       3.3750       12.5500       4.2600      
17.6500       4.7700   2.4500       1.7500       7.5500       3.4000      
12.6500       4.2700       17.7500       4.7800   2.5500       1.8000      
7.6500       3.4250       12.7500       4.2800       17.8500       4.7900  
2.6500       1.8500       7.7500       3.4500       12.8500       4.2900      
17.9500       4.8000   2.7500       1.9000       7.8500       3.4750      
12.9500       4.3000       18.0500       4.8100   2.8500       1.9500      
7.9500       3.5000       13.0500       4.3100       18.1500       4.8200  
2.9500       2.0000       8.0500       3.5250       13.1500       4.3200      
18.2500       4.8300   3.0500       2.0333       8.1500       3.5500      
13.2500       4.3300       18.3500       4.8400   3.1500       2.0667      
8.2500       3.5750       13.3500       4.3400       18.4500       4.8500  
3.2500       2.1000       8.3500       3.6000       13.4500       4.3500      
18.5500       4.8600   3.3500       2.1333       8.4500       3.6250      
13.5500       4.3600       18.6500       4.8700   3.4500       2.1667      
8.5500       3.6500       13.6500       4.3700       18.7500       4.8800  
3.5500       2.2000       8.6500       3.6750       13.7500       4.3800      
18.8500       4.8900   3.6500       2.2333       8.7500       3.7000      
13.8500       4.3900       18.9500       4.9000   3.7500       2.2667      
8.8500       3.7250       13.9500       4.4000       19.0500       4.9100  
3.8500       2.3000       8.9500       3.7500       14.0500       4.4100      
19.1500       4.9200   3.9500       2.3333       9.0500       3.7750      
14.1500       4.4200       19.2500       4.9300   4.0500       2.3667      
9.1500       3.8000       14.2500       4.4300       19.3500       4.9400  
4.1500       2.4000       9.2500       3.8250       14.3500       4.4400      
19.4500       4.9500   4.2500       2.4333       9.3500       3.8500      
14.4500       4.4500       19.5500       4.9600   4.3500       2.4667      
9.4500       3.8750       14.5500       4.4600       19.6500       4.9700  
4.4500       2.5000       9.5500       3.9000       14.6500       4.4700      
19.7500       4.9800   4.5500       2.5333       9.6500       3.9250      
14.7500       4.4800       19.8500       4.9900   4.6500       2.5667      
9.7500       3.9500       14.8500       4.4900       19.9500       5.0000  
4.7500       2.6000       9.8500       3.9750       14.9500       4.5000        
          4.8500       2.6333       9.9500       4.0000       15.0500      
4.5100                   4.9500       2.6667       10.0500       4.0100      
15.1500       4.5200                  

 

 

(f)     The Diversity Score is then calculated by summing each of the Industry
Diversity Scores for each Moody's Industry Classification shown on Schedule I.

 

For purposes of calculating the Diversity Score, affiliated issuers in the same
industry are deemed to be a single issuer except as otherwise agreed to by
Moody's and collateralized loan obligations shall not be included.

 

Sch. H-2

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

 

 

SCHEDULE I

 

MOODY'S INDUSTRY CLASSIFICATION GROUP LIST

 

1.

Aerospace & Defense

2.

Automotive

3.

Banking, Finance, Insurance & Real Estate

4.

Beverage, Food & Tobacco

5.

Capital Equipment

6.

Chemicals, Plastics & Rubber

7.

Construction & Building

8.

Consumer goods: Durable

9.

Consumer goods: Non-durable

10.

Containers, Packaging & Glass

11.

Energy: Electricity

12.

Energy: Oil & Gas

13.

Environmental Industries

14.

Forest Products & Paper

15.

Healthcare & Pharmaceuticals

16.

High Tech Industries

17.

Hotel, Gaming & Leisure

18.

Media: Advertising, Printing & Publishing

19.

Media: Broadcasting & Subscription

20.

Media: Diversified & Production

21.

Metals & Mining

22.

Retail

23.

Services: Business

24.

Services: Consumer

25.

Sovereign & Public Finance

26.

Telecommunications

27.

Transportation: Cargo

28.

Transportation: Consumer

29.

Utilities: Electric

30.

Utilities: Oil & Gas

31.

Utilities: Water

32.

Wholesale

 

Sch. I-1

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

 

 

Annex A

 

FORM OF APPROVAL REQUEST FOR ASSET PURCHASE

 

Obligor Name

 

Global Amount of Credit Agreement

 

Estimated Date of Credit Agreement

 

Pricing Date – Date of submission

     

Estimated Trade Date

 

Estimated Settlement Date

     

Upfront Fee (if any)

 

Assignment Fee (if any)

     

Moody’s Industry Classification

 

Moody’s Family/Facility Rating

 

S&P Family/Facility Rating

 

S&P Industry Classification

     

Intended Hold Amount (par value)

 

Facility Type (Moody’s Classification)

 

Facility Tranche (A, B, etc….)

 

Price (Offered)

 

LIBOR Spread / Floor / Fixed Rate (as applicable)

 

Facility Tenor

 

Total Amount of all Senior Credit Facilities

 

Total Tranche Amount (Currently)

 

Original Par Amount (for Secondary)

 

Undrawn Commitment (if any)

 

Commitment Fee (if any)

 

Primary or Secondary Purchase?

     

Seller Closing Contact

 

Name

 

Institution

 

Telephone

 

Fax

 

Email

     

Agent Bank

 

Name

 

Institution

 

Telephone

 

Fax

 

Email

     

If Not Already Provided

 

Bank Book/Lender Presentation/Credit Information Memo (Attachment) 

 

Credit Agreement (Attachment)

 

Borrower Financial Information (Attachment)

 

 

 

Annex A-1

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

 

 

 

JMP CREDIT ADVISORS LLC

 

 

 

 

 

       

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

Annex A-2

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

 

 

Annex B

 

FORM OF BORROWING REQUEST

 

[Letterhead of Collateral Manager]
[Date]

 

BNP Paribas

 

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of October 11,
2018, among BNP Paribas, as Lender, the other Lenders party thereto, JMP Credit
Advisors Long-Term Warehouse Ltd., as Borrower, each CLO Subsidiary party
thereto from time to time, JMP Capital LLC, as the Preferred Investor, JMP
Credit Advisors LLC, as Collateral Manager, BNP Paribas as Administrative Agent
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement”). Capitalized terms used but not otherwise
defined herein shall have the meaning given to such terms in the Agreement.

 

Pursuant to Section 2(c) of the Agreement and the approval by you of the
Approval Request dated [_______, 20__] (a copy of which is attached hereto), we
hereby request that you make a Loan to a Borrower Party in the amount of

 

U.S.$______________________________ on ____________________, 20__

 

to be applied toward the acquisition cost of the Asset referred to in the
attached Approval Request. We further request that you pay the proceeds of such
Loan to:

 

[Insert payment instructions.]

 

in payment of the acquisition cost of such Asset.

 

[This Borrowing Request is an Expedited Borrowing Request and we acknowledge
that three (3) Business Days after the funding of this Loan, this Loan will be
refinanced.]1

 

As of the date hereof, we certify that: (i) the Borrowing Base in
U.S.$___________, (ii) giving pro forma effect to the Loan, the Borrowing Base
will be U.S.$_________ and (iii) as of its Acquisition Date, such Asset will
satisfy the Eligibility Requirements.

 

On behalf of the Borrower Parties, we represent and warrant that the conditions
set forth in Section 7 of the Agreement have been satisfied.

 

 

   

  Sincerely,        

 

JMP CREDIT ADVISORS LLC

 

 

 

 

 

       

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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

 

1 Applicable to Expedited Borrowing Request only.

 

Annex B-1

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

 

 

Annex C

 

FORM OF PROMISSORY NOTE

 

Up to U.S.$ [●] [DATE]

 

FOR VALUE RECEIVED, JMP Credit Advisors Long-Term Warehouse Ltd., an exempted
company incorporated under the laws of the Cayman Islands (the “Parent
Borrower”), and [●], an exempted company incorporated under the laws of the
Cayman Islands (the “Subsidiary Borrower”, and together with the Parent Borrower
the “Borrowers”), each hereby promises, jointly and severally, to pay to the
order of BNP PARIBAS (the “Lender”) the principal sum of [●] million Dollars
(U.S.$ [●]) or, if less, the aggregate unpaid principal amount of all Loans made
by the Lender to the Borrower pursuant to that certain Credit Agreement, dated
as of October 11, 2018 (such agreement, as it may be amended, restated,
extended, supplemented or otherwise modified from time to time, being
hereinafter called the “Agreement”), among the Parent Borrower, each CLO
Subsidiary party thereto from time to time, the Preferred Investor, the
Collateral Manager, the Administrative Agent and the Lender, on the Maturity
Date. The Borrower further promises to pay interest on the unpaid principal
amount of the Loans evidenced hereby from time to time at the rates, on the
dates, and otherwise as provided in the Agreement.

 

The loan account records maintained by the Administrative Agent shall at all
times be conclusive evidence, absent manifest error, as to the amount of the
Loans and payments thereon; provided that any failure to record any Loan or
payment thereon or any error in doing so shall not limit or otherwise affect the
obligation of the Borrowers to pay any amount owing with respect to the Loans.

 

This promissory note is the promissory note referred to in, and is entitled to
the benefits of, the Agreement, which Agreement, among other things, contains
provisions for acceleration of the maturity of the Loans evidenced hereby upon
the happening of certain stated events and also for prepayments on account of
principal of the Loans prior to the maturity thereof upon the terms and
conditions therein specified.

 

Notwithstanding anything to the contrary contained herein, if an Approved CLO
Takeout does not occur, the Borrowers’ sole source of funds for payment of all
amounts due hereunder shall be the Borrower Collateral, and, upon application of
the proceeds of the Borrower Collateral and its reduction to zero in accordance
with the terms and under the circumstances described in the Agreement, all
claims against the Borrowers under the Agreement, any promissory note or under
any other Transaction Document shall extinguish and no recourse shall be had
against the Borrowers for any shortfall still owing by the Borrowers.

 

Unless otherwise defined herein, terms defined in the Agreement are used herein
with their defined meanings therein. This promissory note, and any claim,
controversy or dispute arising under or related hereto (whether in contact, tort
or otherwise) shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

 

JMP CREDIT ADVISORS LONG-TERM

WAREHOUSE LTD.

 

 

 

 

 

       

 

 

 

 

 

By

 

 

 

Name

 

 

 

Title

 

 

                  [●]                       By       Name        Title       

 

Annex C-1

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

 

 

Annex D

 

PREFERENCE SHARE SUBSCRIPTION AGREEMENT

 

 

Annex D-1

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

 

 

Annex E

 

TAX GUIDELINES

 

The purpose of requirements in this Annex is to minimize the risk that
activities conducted by the Borrower2 will cause the Borrower to be engaged in a
trade or business in the United States for United States federal income tax
purposes.

 

Accordingly, in identifying and acquiring Assets, the Borrower (and the
Collateral Manager on behalf of the Borrower) will conduct its activities only
in accordance with the Indenture and this Annex. References to the Collateral
Manager encompass any officers, employees or other agents of the Collateral
Manager acting in furtherance of, or otherwise in connection with the Collateral
Manager's responsibilities under the Collateral Management Agreement.

 

Terms used in this Annex and not otherwise defined have the meanings given them
in the Credit Agreement.

 

Section 1.     General Restrictions on Negotiation with Borrowers/Issuers and
Participation in Primary Market for Debt Obligations.

 

(a)     Pre-Issuance and Pre-Funding Commitments. The Borrower (and the
Collateral Manager on behalf of the Borrower) will not enter into any binding
agreement, arrangement, understanding or commitment (any such binding agreement,
arrangement, understanding or commitment, a "Commitment") to purchase any
Portfolio Asset earlier than forty-eight (48) hours after the later of (i) the
legal closing and issuance of the Portfolio Asset, (ii) the funding of the
Portfolio Asset, and (iii) the most recent date on which any of the principal
terms of the Portfolio Assets were modified in a material fashion, except as
otherwise expressly permitted in Section 2 or Section 3 of this Annex. An
agreement, arrangement, understanding or commitment is not considered binding
for this purpose if it is not legally binding or if the Borrower (and the
Collateral Manager on behalf of the Borrower) would not be commercially
compelled to purchase the Portfolio Asset on terms comparable to those discussed
based solely on the existence of such agreement, arrangement, understanding or
commitment (any such agreement, arrangement, understanding or commitment, a
"Non-Binding Indication").

 

(b)     Communications and Negotiations with Issuers of Portfolio Assets. The
Borrower (and the Collateral Manager on behalf of the Borrower) will not (i)
participate, directly or indirectly, in negotiating or structuring the terms of
any Portfolio Asset nor (ii) except to the limited extent expressly permitted by
Sections 2 or 3 of this Annex, have any discussions with a Portfolio Asset's
obligor, issuer or borrower prior to the completion of the legal closing and
issuance of such Portfolio Asset.

 

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

 

2 References in these Tax Guidelines to the “Borrower” shall mean each of the
Borrower Parties.

 

Annex E-1

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

 

 

(c)     Fees. The Borrower will not earn, nor will the Borrower (or the
Collateral Manager on behalf of the Borrower) enter into a Commitment to acquire
a Portfolio Asset on terms that enable the Borrower to earn, any fee, commission
or other compensation for services, however denominated, associated with the
negotiation, structuring, marketing, underwriting, or placement of a Portfolio
Asset. A fee for services does not include any discount or fee attributable to
the use of or time value of money, for standing ready to advance funds or,
subject to compliance with Section 4, for agreeing to changes in the terms of a
Portfolio Asset after its legal closing (such as customary commitment fees,
amendment fees, waiver fees and prepayment fees).

 

(d)     Portfolio Assets Purchased from the Collateral Manager and Affiliates.
The Borrower may not purchase any Portfolio Asset if the Collateral Manager
acted as an underwriter, placement agent, arranger, negotiator or structurer in
connection with the negotiation, structuring, marketing, underwriting,
placement, issuance or origination of such Portfolio Asset. The Borrower also
may not purchase a Portfolio Asset if a person that is affiliated with,
controlled by or managed by the Collateral Manager (a "CM Affiliate") acted as
an underwriter, placement agent, arranger, negotiator or structurer in
connection with the negotiation, structuring, marketing, underwriting,
placement, issuance or origination of a Portfolio Asset unless the Portfolio
Asset is either a Seasoned Portfolio Asset or an Armslength Portfolio Asset.

 

For purposes of this Annex:

 

"Armslength Portfolio Asset" means a Portfolio Asset as to which a CM Affiliate
acted as an underwriter, placement agent, arranger, negotiator or structurer in
connection with the negotiation, structuring, marketing, underwriting,
placement, issuance or origination of such Portfolio Asset if (i) such CM
Affiliate is an Armslength CM Affiliate, (ii) the purchase price for the
Portfolio Asset is comparable to the price at which the Portfolio Asset is
contemporaneously sold to third parties and (iii) as of the date of acquisition,
the outstanding principal amount and committed exposure with respect to all such
Armslength Portfolio Assets does not exceed 5% of the aggregate outstanding
principal amount and committed exposure of all Portfolio Assets held by the
Borrower.

 

"Armslength CM Affiliate" means a CM Affiliate if (i) such CM Affiliate is
regularly engaged in a substantial and established business relating to the
origination of such Portfolio Assets in the ordinary course primarily for sale
or syndication to unrelated third parties, (ii) the sale of Portfolio Assets to
the Borrower or other funds or accounts managed by the Collateral Manager or
other CM Affiliates represents an immaterial portion of that business, (iii) no
officers, employees or other personnel of the Collateral Manager are also
employees of, or otherwise involved in the loan origination business of such CM
Affiliate, and (iv) no officers, employees or other personnel of such CM
Affiliate involved in loan origination also perform any services for the
Collateral Manager in connection with activities of Collateral Manager pursuant
to its responsibilities under the Collateral Management Agreement.

 

Annex E-2

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

 

 

"Seasoned Portfolio Asset" means a Portfolio Asset as to which a CM Affiliate
acted as an underwriter, placement agent, arranger, negotiator or structurer in
connection with the negotiation, structuring, marketing, underwriting,
placement, issuance or origination of a Portfolio Asset if (i) the Portfolio
Asset was not originated in contemplation of its acquisition by the Borrower,
(ii) such CM Affiliate could have purchased and held the Portfolio Asset for its
own account for an indefinite period without being subject to any requirement to
hedge its position in the Portfolio Asset or reasonably could have expected to
sell any portion of the Portfolio Asset it was unable to retain to persons or
entities other than the Borrower, (iii) such CM Affiliate does not regularly
sell Portfolio Assets to the Borrower, (iv) the Portfolio Asset has been
outstanding for at least 90 days prior to any Commitment or Non-Binding
Indication by the Borrower (or the Collateral Manager on behalf of the Borrower)
to acquire the Portfolio Asset, (v) the purchase price for the Portfolio Asset
is comparable to the price at which the Portfolio Asset is contemporaneously
sold to third parties and (vi) the Borrower does not acquire more than 25% of
the outstanding principal amount of the Portfolio Asset.

 

(e)     Equity Restrictions. The Borrower will not purchase any Portfolio Asset
that for United States federal income tax purposes is:

 

(i)       an equity interest in a "partnership,"

 

(ii)      a residual interest in a "REMIC" (as such term is defined in the
Code),

 

(iii)      an ownership interest in a "FASIT" (as such term is defined in the
Code), or

 

(iv)      a United States real property interest (as such term is defined in the
Code), including an equity interest in a United States real property holding
corporation,

 

unless, in any such case, the Borrower or the Collateral Manager has obtained an
opinion of tax counsel of nationally recognized standing in the United States
experienced in such matters to the effect that ownership of such asset will not
cause the Borrower to be deemed to be engaged in United States trade or business
for United States federal income tax purposes or otherwise to be subject to
United States federal income tax on a net income basis, or such Portfolio Asset
is issued pursuant to a registration statement, prospectus or offering
memorandum that contains disclosure to the same effect on which it would be
reasonable for the Collateral Manager to rely.

 

Section 2.     Additional Requirements for Loans.

 

The Borrower (and the Collateral Manager on behalf of the Borrower) will not
make any Commitment to purchase a loan of the type customarily made by banks or
which is made by a group that is expected to include bank lenders, or a
participation or subparticipation in such a loan (a "Loan") from any person
earlier than forty-eight (48) hours after the later of (i) the legal closing and
issuance of the Loan, (ii) the funding of the Loan, and (iii) the most recent
date on which any of the principal terms of the Loan were modified in a material
fashion, except pursuant to a forward sale agreement at an agreed price (a
"Forward Purchase Commitment") and only if the further requirements set forth in
clauses 2(a) and (b) below are satisfied:

 

(a)      Broadly Syndicated Loans (whether underwritten on a “Firm Commitment”
or on a “Best Efforts” basis). In order for a Forward Purchase Commitment to be
described in this Section 2(a), the Loan must (x) be marketed and sold pursuant
to a “customary underwriting,” (y) be acquired in a “permissible manner” by the
Borrower, and (z) constitute a “broadly syndicated loan,” each as described
below.

 

Annex E-3

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(i)     Customary Underwriting. To constitute a “customary underwriting,” the
Collateral Manager must reasonably believe that the underwriting of the Loan
includes the following features:

 

(A)     A bank or a syndicate of banks (the “agent bank”) negotiates the terms
of the Loan.

 

(B)     The agent bank helps the obligor compile a “confidential information
memorandum,” “bank book” or similar written document to be used in soliciting
Loan sales that describes the material terms of the Loan and of the obligor (a
“Bank Book”). For the avoidance of doubt, the Bank Book, once originally
provided and disseminated, may be updated to reflect changes to material terms
through supplements or through data postings on Bloomberg, Intralinks, Fintrac
or similar media.

 

(C)     The agent bank markets or seeks buyers for the Loan from a wide
(although potentially targeted) group.

 

(D)     The agent bank effectuates its underwriting process through soliciting
indications of interest or orders, making loan allocations or similar
procedures.

 

(E)     The agent bank is paid or compensated in respect of its underwriting
services by the obligor.

 

(F)     The agent bank is free to sell or allocate such Loan to the highest
bidder (or to allocate the Loan based on other criteria determined in its sole
discretion), even after (x) a “soft circling” process has occurred, (y)
indications of interest have been provided and (z) preliminary allocations have
been communicated to investors. For the avoidance of doubt, the agent bank is
free to make any such sale or allocation in its own discretion notwithstanding
the existence of a Forward Purchase Commitment that would obligate the Borrower
(or the Collateral Manager) to acquire or purchase such Loan.

 

(ii)     Permissible Manner of Loan Acquisition. For a Loan that has been
marketed and sold pursuant to a customary underwriting as described under
Section 2(a)(i) to be acquired in a “permissible manner” by the Borrower, the
following criteria must be satisfied:

 

(A)      None of the Borrower, the Collateral Manager (whether acting on the
Borrower’s behalf or otherwise) or any CM Affiliates shall participate in the
negotiation of the terms of the Loan.

 

(B)     The Collateral Manager is not an affiliate of and does not control the
obligor, and does not advise it on other matters. No CM Affiliate is an
affiliate of or controls the obligor, or advises it on other matters.

 

Annex E-4

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(C).     The Forward Purchase Commitment is entered into (x) after receipt of
the Bank Book (including any supplements thereto, other than supplements that do
not affect the material terms of the Loan) and (y) after the material terms of
such Loan (other than interest rate and pricing) have been fully negotiated, it
being understood that the interest rate and pricing of the Loan may not be
finalized until just prior to the legal closing.

 

(D)     The Collateral Manager has no reason to believe that the Loan would not
be executed on the same terms regardless of whether the Forward Purchase
Commitment was made.

 

(E)     The Forward Purchase Commitment is provided pursuant to typical
allocation procedures and made using standard Bank Book forms.

 

(F)     The Forward Purchase Commitment relates to a purchase of less than 5% of
the face amount of the respective tranche of which the Loan forms a part.

 

(G)     The Borrower, together with any related or commonly managed or advised
parties, purchases less than 15% of the face amount of the respective tranche of
which the Loan forms a part.

 

(H)     Each Forward Purchase Commitment is independent and there is no ongoing
understanding or arrangement by which the Borrower has agreed to provide funds
to the agent bank or obligor, although the Borrower may purchase different
tranches of Loans offered contemporaneously.

 

(iii)     Broadly Syndicated Loan. For purposes of this Section 2(a), a “broadly
syndicated Loan” means a Loan that satisfies the following criteria:

 

(A)     The aggregate size of the loan facility (including undrawn commitments)
is at least $100 million.

 

(B)     The Borrower and the Collateral Manager reasonably believe that the
agent bank is acting in the ordinary course of its trade or business of
originating and syndicating Loans.

 

(C)     The Loan is considered by the market to be a broadly syndicated Loan
offered to typical institutional non-bank investors.

 

(b)     Loans Not Described in Section 2(a) (including Non-Broadly Syndicated
Loans that are underwritten on a “Firm Commitment” basis). For a Forward
Purchase Commitment to be described in this Section 2(b), the following criteria
must be satisfied.

 

(A)     A Forward Purchase Commitment with any person (such person, a
"Counterparty") with respect to a Loan may only be made after such Counterparty
has itself made a legally binding commitment to make or purchase the Loan to the
obligor or another seller thereof (in each case, subject to customary terms and
conditions), at a time when all material terms of such Loan (other than interest
rate and pricing) have been fully negotiated (it being understood that interest
rate and pricing of the Loan may not be finalized until just prior to execution
of and closing), and such Counterparty’s legally binding commitment is not
conditioned upon any Commitment by the Borrower (or any other assignee).

 

Annex E-5

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(B)      The Counterparty may not be the Collateral Manager, nor any CM
Affiliate that is not an Armslength CM Affiliate.

 

(C)      None of the Borrower, the Collateral Manager or any CM Affiliate that
is not an Armslength CM Affiliate may have participated in negotiating or
structuring the material terms of the Loan.

 

(D)      The Borrower's obligation to purchase the Loan under the Forward
Purchase Commitment must be subject to the condition that no material adverse
change has occurred in the obligor's financial condition or the relevant market
on or before the purchase date and may be subject to the condition that the
final legal documentation is satisfactory; but in all other respects, the
Forward Purchase Commitment may only be conditional to the extent the related
Counterparty's own commitment in the origination process and funding of the Loan
is delayed, reduced or eliminated. In the event of any such delayed, reduced or
eliminated funding, the Borrower may not receive any premium, fee, or other
compensation in connection with having entered into the Forward Purchase
Commitment, other than commitment fees or fees in the nature of commitment fees
that are customarily paid in connection with such delays, reductions or
eliminations of funding of Loans of the type permitted to be purchased by the
Borrower.

 

(E)      The Borrower (and the Collateral Manager on behalf of the Borrower) may
not enter into any Forward Purchase Commitment if it knows or has reason to
expect that the Counterparty will hold itself out as the Borrower's agent in
making or committing to make the subject Loan. For this purpose, although not
required, the Borrower (or Collateral Manager on behalf of the Borrower) may
rely upon an undertaking by the Counterparty that it will not disclose the
Borrower's identity to the obligor in respect of the Portfolio Asset prior to
the assignment of the Loan pursuant to settlement of the Forward Purchase
Commitment.

 

(F)      The Borrower may have no contractual relationship with the obligor in
respect of a Loan that is the subject of a Forward Purchase Commitment until the
Borrower actually closes the assignment of the Loan pursuant to the Forward
Purchase Commitment. On the legal closing date of the Loan, the documents
relating to the Loan will not list the Borrower as a "lender" or otherwise as a
party to the Loan.

 

(G)      The Borrower cannot enter into a Forward Purchase Commitment that upon
settlement thereof would cause the Borrower to own more than 20% of the
aggregate principal amount of all Loans and advances issued (or if not yet fully
drawn, to be issued) under the related credit agreement, determined as of the
date of the agreement.

 

Annex E-6

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(c)     Delayed Drawdown Collateral Obligations and Revolving Collateral
Obligations. The Borrower (and the Collateral Manager on its behalf) may, to the
extent otherwise permitted by the Credit Agreement, acquire a Loan that is a
Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation.
However, in addition to the other requirements of the Indenture and this Annex,
all of the terms of any advance required to be made by the Borrower under any
Loan that is a Delayed Drawdown Collateral Obligation or a Revolving Collateral
Obligation must be fixed as of the date the Borrower purchases the obligation
(or be determinable under an objective formula that is fixed as of that date),
and the Borrower may not have any discretion as to whether to make advances
under such Delayed Drawdown Collateral Obligation or Revolving Collateral
Obligation. For this purpose, a condition to advancing funds that requires a
determination based on objective factors that there has been no material adverse
change in the condition of the borrower does not constitute the exercise of
discretion for this purpose.

 

(d)     Letters of Credit. The Borrower may acquire an LOC Asset only if, in
addition to satisfying any other applicable requirements of the Indenture and
this Annex, the requirements of this paragraph (c) are satisfied. "LOC Asset"
means either (i) a synthetic letter of credit facility pursuant to which the
risk of reimbursement under the letter of credit is borne by "synthetic lenders"
and cash collateralized by deposits made by the synthetic lenders into an
account maintained by the letter of credit issuer and the synthetic lenders are
entitled to receive amounts from the account party (or account party affiliates)
or the letter of credit issuing institution that reflects fees payable by or on
behalf of the account party in respect of the agreement to issue letters of
credit (a "Synthetic Letter of Credit") or (ii) any tranche of a revolving
credit facility that may be drawn solely to fund letter of credit reimbursements
or related items.

 

Unless it has obtained written advice of tax counsel that doing so will not
cause the Borrower to be treated as engaged in a United States trade or
business, neither the Borrower nor the Collateral Manager (or any other party
acting on behalf of the Borrower) shall purchase an LOC Asset unless:

 

(i)     the LOC Asset is part of a credit facility that includes other tranches
that are not LOC Assets and the maximum amount (including for this purpose both
the committed and funded amount) of the LOC Asset does not exceed 20% of the
aggregate amount (including for this purpose both the committed and funded
amount) of such facility;

 

(ii)     the LOC Asset and other portions of such facility are being offered as
part of a package and the Borrower acquires (with the intention to hold) other
tranches of the facility that are not LOC Assets having an aggregate maximum
committed and/or funded amount at least equal to the maximum committed and/or
funded amount of the LOC Asset acquired by the Borrower (it being understood
that this is not intended to prevent the Borrower from disposing of such other
portion separately if based on a change in circumstances not reasonably
anticipated at the time of purchase it is commercially advantageous to do so);

 

(iii)     all LOC Assets and revolving credit facilities purchased by the
Company (or the Collateral Manager on behalf of the Borrower) together do not
exceed 15% of the Aggregate Principal Amount of the aggregate Assets to be
purchased by the Borrower; and

 

Annex E-7

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(iv)     in the case of a Synthetic Letter of Credit, the Borrower does not hold
more than ten of such obligations or securities at any time).

 

Section 3.  Participation in Primary Offerings of Debt Securities other than
Loans.

 

The Borrower (and the Collateral Manager on behalf of the Borrower) will not
make any Commitment to purchase a debt security (other than a Loan which must
satisfy the requirements of Section 2) from any person earlier than forty-eight
(48) hours after the later of (i) the legal closing and issuance of the debt
security, (ii) the funding of the debt security, and (iii) the most recent date
on which any of the principal terms of the debt security were modified in a
material fashion, unless the further requirements set forth either in clauses
3(a) or (b) are satisfied:

 

(a)      the debt security was issued pursuant to an effective registration
statement under the Securities Act in a firm commitment underwriting for which
neither the Collateral Manager nor any CM Affiliate served as underwriter; or

 

(b)      the debt security is a privately placed security, is a security
eligible for resale under Rule 144A or Regulation S or was issued pursuant to an
effective registration statement in a best efforts underwriting under the
Securities Act, and

 

(i)     the debt security is originally issued pursuant to an offering
memorandum, private placement memorandum or similar offering document;

 

(ii)      the Borrower, the Collateral Manager and CM Affiliates and accounts
and funds managed or controlled by the Collateral Manager or any CM Affiliate
either (1) did not at original issuance acquire in the aggregate 50% or more of
the aggregate principal amount of such class of securities or (2) did not at
original issuance (i) acquire 25% or more of the aggregate principal amount of
all classes of securities offered by the issuer of the debt security in the
offering and any related offering and (ii) did not acquire, in the aggregate,
more than 50% of the controlling classes of the issuer’s securities; and

 

(iii)      the Borrower, the Collateral Manager and any CM Affiliate (unless
such CM Affiliate that is an Armslength CM Affiliate) did not participate
directly or indirectly in negotiating or structuring the terms of the debt
security, except for the purposes of (1) commenting on offering documents to an
unrelated underwriter or placement agent where the ability to comment on such
documents was generally available to investors and any comments relating to the
material commercial terms of the debt security addressed only errors or
ambiguities in those terms or (2) due diligence of the kind customarily
performed by investors in securities consisting of examining the credit quality
of an issuer, analyzing the collateral quality, structure and credit enhancement
with respect to a debt security, evaluating the competence of a manager or
servicer, and other similar matters.

 

Annex E-8

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Section 4.      Work-out Obligations; Post-closing Amendments and Modifications.

 

(a)     The Borrower may not acquire any Portfolio Asset that, as of the date of
its acquisition, is a Potential Workout Obligation (other than DIP Collateral
Obligations which are otherwise permitted to be acquired pursuant to the Credit
Agreement) unless it has obtained advice of counsel that such acquisition,
taking into account reasonably foreseeable activities of the Borrower that would
be required in connection with working out such obligation, will not cause the
Borrower to be engaged in a United States trade or business for United States
federal income tax purposes.

 

"Potential Workout Obligation" means any debt instrument (including an interest
in a Loan) if it is reasonably foreseeable, as of the date of its acquisition by
the Borrower and based on facts specific to such obligation or the circumstances
of the obligor thereof, that such obligation will within 1 year from that date
become a Workout Obligation.

 

"Workout Obligation" means any Portfolio Asset as to which (a) the obligor is in
bankruptcy or is insolvent, (b) any event of default has occurred and has not
been cured, (c) the obligor has failed to pay when due (taking into account
applicable grace period) any amount payable which failure has not been cured or
(d) the obligor is known to be engaged or has indicated that it intends to
engage in negotiations with creditors to restructure the obligation on terms
less favorable to creditors, including by reduction in the principal amount or
interest payable under the obligation, a postponement of payment, a change in
ranking in priority of payments or any other composition of payment.

 

(b)      The Borrower may consent or otherwise act with respect to amendments,
supplements or other modifications of the terms of any Portfolio Asset requiring
consent or action after the date on which any such investment is acquired by the
Borrower if:

 

(i)      such amendment, supplement or modification would not constitute a
Significant Modification (as defined below),

 

(ii)      the Borrower (and the Collateral Manager on its behalf) does not seek
the amendment or participate, directly or indirectly, in negotiating or
structuring the terms of the amendment, does not advance or commit to advance
additional funds that it is not already obligated to advance under the Portfolio
Asset prior to such amendment, and in the reasonable judgment of the Collateral
Manager, because of the materially adverse financial condition of the obligor,
it cannot protect the value of the Borrower’s pre-existing investment in the
Portfolio Assets without agreeing to the amendment,

 

(iii)      the Borrower (and the Collateral Manager on its behalf) does not seek
the amendment or participate, directly or indirectly, in negotiating or
structuring the terms of the amendment and the Borrower does not advance or
commit to advance additional funds that are not already obligated to advance
under the Portfolio Asset prior to such amendment and either (x) the Borrower
owns less than 5% of the Portfolio Asset and the Collateral Manager reasonably
determines that the Borrower's consent or failure to consent will not affect the
approval of amendments because of the size of the Borrower's position and
consents only to avoid forfeiting any consent fee or (y) in the case of an
amendment (such as a "flex pricing" amendment) which requires unanimous consent
because it involves a change in the yield, there is no meaningful increase in
the amount the borrower may borrow or draw from lenders in the aggregate and
amendments are limited to changing financial and accounting covenants incident
to allowing such additional borrowing and adjusting the yield, or

 

Annex E-9

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(iv)      otherwise, if it has received advice of counsel that its involvement
in such amendment, supplement or modification will not cause the Borrower to be
treated as engaged in a trade or business within the United States.

 

"Significant Modification" means any amendment, supplement or other modification
that involves (a) a change in the stated maturity or a change in the timing of
any material payment of any Portfolio Asset (including material deferral of an
interest payment), that would materially alter the weighted average life of the
Portfolio Asset, (b) any change (whether positive or negative) in the yield on
the Portfolio Asset immediately prior to the modification that is in excess of
the greater of (i) 25 basis points or (ii) 5 percent of such unmodified yield,
(c) any change involving a material new extension of credit or commitment to
extend credit, (d) a change in the obligor in respect of any Portfolio Asset or
(e) a material change in the collateral or security for any Portfolio Asset,
including the addition or deletion of a co-obligor or guarantor that results in
a material change in payment expectations.

 

(c)      The Borrower shall not, with respect to any Portfolio Asset that
becomes a Workout Obligation after its acquisition by the Borrower, participate
in an official committee or substantially similar body in connection with a
bankruptcy, reorganization, restructuring or similar proceeding nor exercise
rights of foreclosure or similar judicial remedies unless, in each case, the
Borrower (or the Collateral Manager on behalf of the Borrower) has first
obtained advice of counsel that its contemplated activities on the Borrower's
behalf will not cause the Borrower to be treated as engaged in a United States
trade or business for United States federal income tax purposes.

 

Section 5.     Acting on Own Account.

 

The Borrower shall buy and sell Portfolio Assets only for its own account and
will not buy or sell Portfolio Assets for or on behalf of another person. The
Borrower shall not hold any Portfolio Asset as nominee for another person. The
Borrower shall buy and hold Portfolio Assets solely for investment with the
expectation of realizing a profit from income earned on the Portfolio Assets
and/or any rise in their value during the interval of time between purchase and
sale.

 

Section 6.     General Restrictions.

 

The Borrower (and the Collateral Manager to the extent it is acting in such
capacity on behalf of the Borrower) will not:

 

(a)     act as, hold itself out as or represent to others that it is an
underwriter, placement agent, arranger, negotiator or structurer with respect to
any Portfolio Asset or otherwise;

 

Annex E-10

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(b)     act as, hold itself out as or represent to others that it is a dealer,
middleman, market marker, retailer or wholesaler in any Portfolio Asset,
security or hedging or derivative instruments, or hold as inventory for purposes
of resale to customers, any securities or assets owned by the Borrower;

 

(c)     perform services, or hold itself out as willing to perform services, for
any person or have or seek customers;

 

(d)     register as a broker-dealer under the laws of any country or political
subdivision thereof;

 

(e)     register as, or become subject to regulatory supervision or other legal
requirements under the laws of any country or political subdivision thereof as,
a bank, insurance company or finance company;

 

(f)     treat the Borrower as a bank, insurance company, or finance company for
purposes of (i) any tax, securities law or other filing or submission made to
any governmental authority, (ii) any application made to a rating agency or
(iii) qualification for any exemption from tax, securities law or any other
legal requirements or hold itself out to the public as a bank, insurance company
or finance company;

 

(g)     hold itself out to the public, through advertising or otherwise, as
originating Loans;

 

(h)     buy any security in order to earn a dealer spread or dealer mark-up over
its cost;

 

(i)     directly or indirectly fund the origination, underwriting or placement
of a Portfolio Asset; or

 

(j)     hold a controlling block of any Portfolio Asset.

 

Section 7.     General Anti-Avoidance Provision

 

The Borrower shall not form any person or avail itself of any person (whether or
not an affiliate) for the purpose of avoiding the provisions of this Annex with
respect to the acquisition of Portfolio Assets; provided, however, that the sale
to the Borrower of a Portfolio Asset from an affiliate will not be considered to
violate this requirement merely because the affiliate acting in its own capacity
had previously acquired and funded such Portfolio Asset. Notwithstanding the
above, this section shall not apply to the formation or ownership by the
Borrower of a Borrower Subsidiary otherwise permitted by the terms of the Credit
Agreement.

 

Annex E-11

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Annex F

 

ASSIGNMENT AND ASSUMPTION

 

Reference is made to the Credit Agreement, dated as of October 11, 2018 (as
amended and in effect on the date hereof, the “Credit Agreement”), between JMP
Credit Advisors Long-Term Warehouse Ltd. (the “Borrower”), each CLO Subsidiary
from time to time party thereto, the Lenders party thereto, JMP Credit Advisors
LLC, as Collateral Manager, BNP Paribas, as Administrative Agent and JMP Capital
LLC, as Preferred Investor. Terms defined in the Credit Agreement are used
herein with the same meanings.

 

The Assignor named on the reverse hereof hereby sells and assigns, without
recourse, to the Assignee named on the reverse hereof, and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Assignment Date set forth on the reverse hereof, the interests set forth on the
reverse hereof (the “Assigned Interest”) in the Assignor’s rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth on the reverse hereof in the Individual Lender Maximum
Funding Amount of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, but excluding accrued
interest and fees to and excluding the Assignment Date. The Assignee hereby
acknowledges receipt of a copy of the Credit Agreement. From and after the
Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the Assigned Interest,
have the rights and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent of the Assigned Interest, relinquish its rights and be
released from its obligations under the Credit Agreement.

 

Each of the Borrower Parties and the Collateral Manager is an express
third-party beneficiary of this Assignment and Assumption, with full rights as
if it were a party hereto. This Assignment and Assumption and any claim,
controversy or dispute arising under or related to this Assignment and
Assumption (whether in contract, tort or otherwise) shall be governed by and
construed in accordance with the laws of the State of New York.

 

Date of Assignment:

 

Legal Name of Assignor:

 

Legal Name of Assignee:

 

Assignee’s Address for Notices:

 

Annex F-1

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Effective Date of Assignment
(“Assignment Date”):

 

Facility

 

Principal Amount

Assigned

 

Percentage Assigned of Facility/Individual

Lender Maximum Funding Amount
(set forth, to at least 8 decimals,
as a percentage of the Facility
and the Individual Lender Maximum

Funding Amount)

Individual Lender Maximum Funding Amount Assigned:

 

$

 

%

 

The terms set forth above and on the reverse side hereof are hereby agreed to:

 

[NAME OF ASSIGNOR], as Assignor

 

 

 

By:                                                                             
         
Name:
Title:

 

 

[NAME OF ASSIGNEE], as Assignee

 

 

 

By:                                                                             
                         
Name:
Title:

 

The undersigned hereby consent to the within assignment:1

 

 

 

[●]

 

 

 

By:                                                                             
            
Name:
Title:

 

 

 

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1    Consents to be included to the extent required by Section 13(c) of the
Credit Agreement.

 

Annex F-2

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Annex G

 

FORM OF CLO SUBSIDIARY JOINDER SUPPLEMENT

 

This CLO SUBSIDIARY JOINDER SUPPLEMENT (this “Agreement”) dated as of [●], [●],
is executed by the undersigned (the “New CLO Subsidiary”) for the benefit of JMP
Credit Advisors LLC, as Collateral Manager (the “Collateral Manager”), JMP
Credit Advisors Long-Term Warehouse Ltd., as Borrower (the “Borrower”), each of
the Lenders from time to time party thereto (the “Lenders”), each of the CLO
Subsidiaries from time to time party thereto (the “CLO Subsidiaries”), BNP
Paribas, as Administrative Agent (the “Administrative Agent”) and JMP Capital
LLC, as Preferred Investor (the “Preferred Investor”), under that certain Credit
Agreement dated as of October 11, 2018 (as may be amended, restated, modified or
supplemented from time to time, the “Credit Agreement”), among the Collateral
Manager, the Borrower, each of the Lenders from time to time party thereto, each
of the CLO Subsidiaries from time to time party thereto, the Administrative
Agent and the Preferred Investor. Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Credit Agreement.

 

WHEREAS, this CLO Subsidiary Joinder Supplement is being executed and delivered
pursuant to the Credit Agreement;

 

WHEREAS, the New CLO Subsidiary wishes to become a CLO Subsidiary under the
Credit Agreement

 

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
New CLO Subsidiary hereby agrees as follows:

 

By its execution of this Agreement, the New CLO Subsidiary shall be deemed to be
a party to the Credit Agreement and shall have all of the rights and obligations
of a “CLO Subsidiary” under the Credit Agreement, and it agrees that it is a
“CLO Subsidiary” and it is bound as a “CLO Subsidiary” under the terms of the
Credit Agreement as if it had been an original signatory thereto. The New CLO
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions contained in the Credit Agreement
(including, for the avoidance of doubt, any amendments, modifications or
supplements thereto).

 

The New CLO Subsidiary hereby certifies that the following conditions to become
a CLO Subsidiary have been met.

 

Schedule A of the Credit Agreement is hereby amended to add the information set
forth in Schedule 1 hereto. The New CLO Subsidiary hereby confirms that the
representations and warranties set forth in the Credit Agreement applicable to
it and the Borrower Collateral are true and correct in all material respects as
of the date hereof. The New CLO Subsidiary agrees that any phrase stating “as of
the date hereof”, or any similar phrase in its representations and warranties
set forth in the Credit Agreement, shall mean “as of the date of this
Agreement”.

 

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Each New CLO Subsidiary hereby confirms that it has delivered on or prior to the
date hereof to the Lenders, the Administrative Agent and the Custodian, any
documentation reasonably required and previously requested by the Administrative
Agent, the Lenders and the Custodian in order for the Administrative Agent, the
Lenders and the Custodian to complete their due diligence and compliance
procedures for applicable “know your customer” and anti-money laundering rules.

 

In furtherance of its obligations under the Credit Agreement, the New CLO
Subsidiary authorizes the filing of such financing or security statements (or
equivalent in the relevant jurisdiction) naming it as debtor and the Custodian
as secured party and describing their Borrower Collateral and such other
documentation as the Administrative Agent may reasonably require to evidence,
protect and perfect the liens created by the Transaction Documents to which they
are a party.

 

This Agreement shall be deemed to be part of, and a modification to, the Credit
Agreement and shall be governed by all the terms and provisions of the Credit
Agreement, which terms are incorporated herein by reference, are ratified and
confirmed and shall continue in full force and effect as valid and binding
agreements of the New CLO Subsidiary enforceable against the New CLO Subsidiary
in accordance with its terms. The New CLO Subsidiary hereby waives notice of the
Administrative Agent’s or the Preferred Investor’s acceptance of this Agreement.

 

 

 

 

(Remainder of page left intentionally blank.)

 

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IN WITNESS WHEREOF, the CLO Subsidiary has executed this Agreement as of the day
and year first written above.

 

 

[NEW CLO SUBSIDIARY]:

 

 

 

 

By:_________________________________

Name:

Title:

        ACKNOWLEDGED AND ACCEPTED BY:            

BNP PARIBAS,
as Lender

 

 

 

By:_________________________________________________
Name:
Title:

 

 

 

By:_________________________________________________ 
Name:
Title:

 

 

 

EXECUTED as a DEED by

JMP CREDIT ADVISORS LONG-TERM WAREHOUSE LTD.,
as Borrower

 

 

 

By:_________________________________________________
Name:
Title:

 

 

 

 

 

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BNP PARIBAS,
as Administrative Agent

 

 

 

By:_________________________________________________
Name:
Title:

 

 

 

By:_________________________________________________
Name:
Title:

 

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SCHEDULE I TO
CLO SUBSIDIARY JOINDER SUPPLEMENT

 

COMPLETION OF INFORMATION FOR CLO SUBSIDIARY JOINDER SUPPLEMENT

 

 

Re:

Credit Agreement, dated as of October 11, 2018 (as amended, modified,
supplemented or restated from time to time), by and among JMP Credit Advisors
LLC, as the collateral manager, JMP Credit Advisors Long-Term Warehouse Ltd., as
the borrower, BNP Paribas, as the administrative agent, each of the Lenders from
time to time party thereto, each of the CLO Subsidiaries from time to time party
thereto and JMP Capital LLC, as the preferred investor.

 

 

Item 1: New CLO Subsidiary:         :               Item 2: Address for
Notices:         :                                       :          

 

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Annex H

 

FORM OF ADDITIONAL ACCOUNT CONTROL AGREEMENT

 

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Annex I

 

FORM OF ADDITIONAL CUSTODY AGREEMENT

 

 

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