Exhibit 10.24

 

AMENDED AND RESTATED STOCKHOLDER AGREEMENT

 

THIS AMENDED AND RESTATED STOCKHOLDER AGREEMENT is entered into as of August 30,
2016 (this “Agreement”), by and among CM Finance Inc, a Maryland corporation
(the “Company”), CM Investment Partners LLC, a Delaware limited liability
company (the “Adviser”), Stifel Venture Corp., a Missouri corporation (“Stifel”)
and for purposes of Section 3 only, Stifel, Nicolaus & Company, Incorporated,
and is effective as of the effective time of the Merger (as defined below).

 

WHEREAS, the Company, the Adviser, Stifel, Stifel, Nicolaus & Company,
Incorporated (for purposes of Section 3 only), CM Finance LLC, a Maryland
limited liability company (the “Private Fund”) and CM Investment Partners, LP, a
Delaware limited partnership (the “Old Adviser”) previously entered into that
certain Stockholder Agreement dated as of December 17, 2013 (the “Old
Stockholder Agreement”);

 

WHEREAS, immediately prior to the initial public offering of the Company’s
common stock in February 2014, the Private Fund was merged with and into the
Company with the Company as the surviving entity and, thereafter, the Private
Fund no longer exists;

 

WHEREAS, the Old Adviser ceased all operations in February 2014 and formally
dissolved;

 

WHEREAS, the parties hereto desire to amend and restate the Old Stockholder
Agreement in its entirety setting forth certain rights and obligations with
respect to the nomination of a director to the Board of Directors of the Company
(the “Board”) and other matters relating to the Board.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:

 

Section 1.          Definitions. As used in this Agreement, the following terms
shall have the meanings ascribed to them below:

 

“Affiliate” means, with respect to any Person that is an entity, any other
Person directly or indirectly controlling, controlled by or under common control
with such Person. As used in this definition, the term “control” (including with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.

 

 

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“Articles of Incorporation” means the Articles of Amendment and Restatement of
the Company, as may be amended from time to time.

 

“Bylaws” means the Bylaws of the Company, as may be amended from time to time.

 

“Person” means any individual, corporation, firm, partnership, joint venture,
limited liability company, estate, trust, business association, organization,
Governmental Entity or other entity.

 

Section 2.          Board Nomination.

 

(a) For so long as Stifel holds ownership interests in the Adviser (the “Adviser
Interests”) equal to at least 15% (except as provided in Section 2(h)) of the
total ownership interests in the Adviser (such time period, the “Stifel
Nomination Period”), Stifel shall have the right to designate in writing (the
“Stifel Nominee Notice”) a Person (the “Stifel Nominee”) to serve as a member of
the Board. Subject to Section 2(c) and Section 2(h), upon receipt of the Stifel
Nominee Notice, the Board shall nominate the Stifel Nominee to serve as a member
of the Board as part of the Company’s slate of directors at each annual or
special meeting of the stockholders (the “Stockholders”) in which the term of
any Stifel Nominee will expire and of the Company (or, if permitted, by any
action by written consent of the Stockholders) at or by which directors of the
Company are to be elected during the Stifel Nomination Period, and recommend
that the Stockholders vote to elect the Stifel Nominee at each such meeting or
by such written consent.

 

(b) Subject to Section 2(f), vacancies arising through the death, resignation or
removal of the Stifel Nominee who was elected or appointed to the Board pursuant
to this Section 2, may be filled by the Board only with a Stifel Nominee, and
the director so chosen shall hold office until the next election or until his or
her successor is duly elected and qualified, or until his or her earlier death,
resignation or removal. Notwithstanding the provisions of this Section 2, in the
event that Stifel does not designate a Stifel Nominee to fill any vacancy
arising through the death, resignation or removal of the Stifel Nominee who was
elected or appointed to the Board pursuant to this Section 2, the Board may
reduce the size of the Board pursuant to the provisions of the Articles of
Incorporation and Bylaws to eliminate any such vacancy.

 

(c) Notwithstanding the provisions of this Section 2, Stifel shall not be
entitled to designate a Person as a nominee to the Board if the Nominating and
Corporate Governance Committee of the Company reasonably determines in writing
(which determination shall set forth the reasonable grounds for such
determination) that such Person would not be qualified under any applicable law,
rule or regulation to serve as a director of the Company; provided, that in such
event, Stifel shall be entitled to designate another Person as the Stifel
Nominee and the provisions of Section 2 shall apply to such alternate Person.
Only the Nominating and Corporate Governance Committee of the Company shall have
the right to object to any Stifel Nominee.

 

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(d) During the Stifel Nomination Period, the Company shall notify Stifel in
writing of the date on which proxy materials are expected to be mailed by the
Company in connection with an election of directors at an annual or special
meeting of the Stockholders that includes the election of the Stifel Nominee at
least 45 days prior to such expected mailing date. Following receipt of such
Company notice, Stifel shall deliver a Stifel Nominee Notice setting forth (i)
the name and address of the Stifel Nominee and (ii) the information required for
director nominees under Items 401, 403 and 404 of Regulation S-K under the
federal securities laws. The Company shall provide Stifel with a reasonable
opportunity to review and provide comments on any portion of the proxy materials
relating to the Stifel Nominee and the rights and obligations provided under
this Agreement and to discuss any such comments with the Company. The Company
shall include Stifel’s reasonable comments in the proxy materials relating to
such matters. The Company shall notify Stifel of any opposition to a Stifel
Nominee sufficiently in advance of the date on which such proxy materials are to
be mailed by the Company in connection with such election of directors so as to
enable Stifel to propose a replacement Stifel Nominee, if necessary, in
accordance with the terms of this Agreement.

 

(e) In the event the Stockholders fail to elect or consent to a Stifel Nominee
in accordance with the preceding sentence, (i) Stifel shall designate another
Person as the Stifel Nominee and the provisions of Section 2 shall apply to such
alternate Person and (ii) the Company shall promptly appoint the Stifel Nominee
to any such vacancy on the Board created by the Stockholders failure to elect or
consent to a Stifel Nominee. For the avoidance of doubt, in no event shall the
Company be required to nominate or appoint a Stifel Nominee to the Board of
Directors of the Company if the Stockholders fail to elect or consent to such
Stifel Nominee.

 

(f) In the event that Stifel ceases to have the right to designate a Person to
serve as a director pursuant to this Section 2, Stifel shall use its best
efforts to cause the applicable Stifel Nominee to resign immediately.

 

(g) The Company agrees that at all times during the Stifel Nomination Period (i)
subject to applicable legal requirements, the Bylaws and the Articles of
Incorporation shall accommodate, be subject to, and shall not in any way
conflict with, Stifel’s rights and obligations set forth herein and (ii) the
Company shall not enter into any other agreements or understandings that in any
way conflict with Stifel’s rights and obligations set forth herein; provided,
however, if Stifel has not designated a Person to serve on the Board pursuant to
this Section 2, the Board may reduce the size of the Board to eliminate any
vacancies on the Board as provided in Section 2(b). The Company further agrees
that it shall not enter into any agreements or understandings with any
Stockholders (other than agreements or understandings equally applicable to all
Stockholders) without prior notice to Stifel; provided, that the Company shall
provide to Stifel (x) substantially final copies of all documentation relating
to such agreements or understandings no later than five (5) business days prior
to the signing of such documentation and (y) fully executed copies of such
documentation promptly following their execution.

 

(h) During the Stifel Nomination Period, in the event that (i) the Board has
reduced the size of the Board to eliminate a vacancy arising through the death,
resignation or removal of the Stifel Nominee and/or the failure of Stifel to
designate a Stifel Nominee in accordance with Section 2(b), and (ii) Stifel
subsequently provides a Stifel Nominee Notice in accordance with Section 2(a),
not later than the 90th day from the Company’s receipt of a Stifel Nominee
Notice in accordance with Section 2(a), the Board shall increase the size of the
Board to create a vacancy for a Stifel Nominee to be nominated to fill and,
subject to Section 2(c), the Company shall appoint the Stifel Nominee to the
Board to fill such vacancy.

 

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(i) The Stifel Nomination Period shall not terminate in the event Stifel’s
ownership of Adviser Interests falls below 15% as a result of a transfer of
Adviser Interests made on a pro rata basis with all members of the Adviser. In
the event of such a pro rata transfer, the 15% threshold set forth the
definition of “Stifel Nomination Period” shall be deemed reduced by a percentage
equal to the percentage by which Stifel’s ownership of Adviser Interests was
reduced in such pro rata transfer (by way of example only, if all existing
members transfer 10% of their Adviser Interests to a third party, the 15%
threshold shall become 13.5%).

 

Section 3.          Stifel Originated Opportunities.

 

(a)    Stifel agrees to use its commercially reasonable efforts to offer to the
Company all applicable (i.e., reasonably appropriate for the Company) leveraged
finance and high yield corporate debt investment opportunities originated by
Stifel, Nicolaus & Company, Incorporated (each a “Stifel Opportunity”) subject
to the terms and conditions of this Section 3, and also subject to any other
restrictions pursuant to applicable law (including any requirements that Stifel,
Nicolaus & Company, Incorporated act in the best interests of its clients in
connection with any Stifel Opportunity) or pursuant to restrictions in
engagements with clients or Affiliates related to such Stifel Opportunity.

 

(b)   Subject to the limitations in Section 3(a), Stifel, Nicolaus & Company,
Incorporated shall provide notice (the “Opportunity Notice”) to the Company and
the Adviser of each Stifel Opportunity setting forth: (i) any material terms and
conditions of the Stifel Opportunity and (ii) the last date and time on which
Stifel will accept bids for such Stifel Opportunity, which date and time may be
adjusted from time to time by Stifel, Nicolaus & Company, Incorporated upon
prior notice to the Company and the Adviser (the “End Date”).  For the avoidance
of doubt, Stifel, Nicolaus & Company, Incorporated agrees that unless otherwise
mutually agreed to by the Company and Stifel, Nicolaus & Company, Incorporated,
Stifel, Nicolaus & Company, Incorporated will not consummate the Stifel
Opportunity prior to the End Date.  If the Company submits a bid for the Stifel
Opportunity (a “Company Bid”) prior to the End Date, Stifel, Nicolaus & Company,
Incorporated shall use commercially reasonable efforts to accept the Company
Bid; provided, however, that Stifel, Nicolaus & Company, Incorporated shall not
be required to accept the Company Bid if: (x) the Company Bid was not received
by Stifel, Nicolaus & Company, Incorporated on or prior to the End Date or (y)
Stifel, Nicolaus & Company, Incorporated received bids from third parties with
terms more favorable to the Stifel, Nicolaus & Company, Incorporated client,
prior to the End Date, sufficient to fill the Stifel Opportunity. 

 

(c)    In the event that Stifel, Nicolaus & Company, Incorporated intends to
accept the Company Bid pursuant to Section 3(b) above, Stifel, Nicolaus &
Company, Incorporated shall use commercially reasonable efforts to allow the
Company to consummate the Company Bid in an amount equal to the lesser of (x)
30% of the value of the Stifel Opportunity set forth in the Opportunity Notice
and (y) 5% of the Pro Forma AUM of the Company on the End Date.  For purposes of
this Section 3(c), “Pro Forma AUM” means the assets under management as of the
most recently completed fiscal quarter; provided, that, as of the date hereof,
5% of the Pro Forma AUM shall be deemed to equal $15,000,000, and 5% of the Pro
Forma AUM shall at no time exceed $35,000,000.

 

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(d)   The provisions of this Section 3 shall apply for so long as Stifel holds
Adviser Interests equal to at least 15% of the total ownership interests in the
Adviser; provided, however, if Stifel unilaterally sells its Adviser Interests,
the provisions of this Section 3 shall continue to apply, unless Stifel sells
75% or more of its Adviser Interests, in which case the provisions of this
Section 3 shall cease to apply on the third anniversary of such sale.  Any
attempt by Stifel to transfer all or a portion of its Adviser Interests that is
not consummated because that sale was not approved by the Board of the Adviser
will be deemed to have been sold by Stifel for purposes of this Section 3.

 

Section 4.           AUM and Performance.

 

Upon completion of the Merger and the contribution by Stifel pursuant to the
Subscription Agreement, neither the Company nor the Adviser shall object to
Stifel’s (a) inclusion of the performance results of the Company and all assets
managed by the Adviser in any and all reports, publications, marketing
materials, prospectuses, press releases, advertisements, webpages, conference
materials or other oral or written communications, in each case in a manner that
is consistent with applicable law or regulation or (b) description of the
Company’s relationship with Stifel in any and all reports, publications,
marketing materials, prospectuses, press releases, advertisements, webpages,
conference materials or other oral or written communications, in each case, that
the Adviser would have been entitled to so include or describe under applicable
law or regulation. To this end, the Company agrees that Stifel shall have the
right to access and retain copies of any records reasonably necessary to
substantiate the foregoing. The aforementioned communications and written
materials that include information pertaining to the Company and all assets
managed by the Adviser shall be subject to the approval of the Adviser, but only
to the extent necessary to ensure the satisfaction of regulatory requirements.

 

Section 5.           Miscellaneous.

 

(a) Effective Date. This Agreement shall become effective upon the date first
written above.

 

(b) Applicable Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Maryland without regard to principles of
conflict of laws.

 

(c) Certain Adjustments. The provisions of this Agreement shall apply to the
full extent set forth herein with respect to any and all shares of capital stock
of the Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for, or in substitution for the shares of Common Stock, by
combination, recapitalization, reclassification, merger, consolidation or
otherwise and the term “Common Stock” shall include all such other securities.

 

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(d) Enforcement. Each of the parties hereto acknowledges and agrees that
irreparable injury to the other party hereto would occur in the event any of the
provisions of this Agreement were not performed in accordance with its specific
terms or were otherwise breached, and that such injury would not be adequately
compensable in damages. It is accordingly agreed that Stifel, on the one hand,
and the Company, on the other hand, shall each be entitled to specific
enforcement of, and injunctive relief to prevent any violation of, the terms
hereof and the other party hereto will not take any action, directly or
indirectly, in opposition to the party seeking relief on the grounds that any
other remedy is available at law or in equity, and each party further agrees to
waive any requirement for the security or posting of any bond in connection with
such remedy. Such remedies, shall be cumulative and not exclusive, and shall be
in addition to any other remedy which any party hereto may have.

 

(e) Successors and Assigns. This Agreement may not be assigned, whether outright
or by operation of law, by any party hereto without the prior written consent of
the non-assigning party. Subject to the foregoing, this Agreement shall be
binding upon the parties hereto, their heirs, executors, personal
representatives, successors, and assigns.

 

(f) Entire Agreement; Termination. This Agreement contains the entire
understanding among the parties hereto and supersedes all prior written or oral
agreements among them respecting the within subject matter, unless otherwise
provided herein. There are no representations, agreements, arrangements or
understandings, oral or written, among the parties hereto relating to the
subject matter of this Agreement that are not fully expressed herein. This
Agreement may be terminated at any time by written consent of all of the parties
hereto.

 

(g) Dispute Resolution. Any dispute, controversy or claim arising out of, or in
connection with, this Agreement shall be settled by binding arbitration in
accordance with the rules of the American Arbitration Association then in
effect. The arbitration shall be conducted on an expedited basis at a location
to be determined by the parties by an independent arbitrator selected by the
American Arbitration Association. The arbitration shall be subject to, and the
arbitrator shall have the powers and rights afforded by, the rules of the
American Arbitration Association. The decision of such arbitrator, including any
award of attorneys' fees and costs, may be entered in any court with
jurisdiction.

 

(h) Notices. All notices and demands under this Agreement and other
communications required to be delivered pursuant to this Agreement, shall be in
writing or by facsimile, with a copy via email (which shall not constitute
notice hereunder), and shall be deemed to have been duly given if delivered
personally or by overnight courier or if mailed by certified mail, return
receipt requested, postage prepaid, or sent by facsimile, to the following
addresses (or to such other address as the party entitled to notice shall
hereafter designate in accordance with the terms hereof):

 

If to the Company:

CM Finance Inc

399 Park Avenue, 39th Floor

New York, New York 10002

Attn: Michael C. Mauer

 

If to the Adviser:

CM Investment Partners LLC

399 Park Avenue, 39th Floor

New York, New York 10002

Attn: Michael C. Mauer

 

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If to Stifel:

Stifel Venture Corp.

237 Park Avenue, 8th Floor

New York, NY 10017

Attn: Mark Fisher

 

All such notices shall be effective: (a) if delivered personally, when received
(with written confirmation of receipt), (b) if sent by overnight courier, when
receipted for, (c) if mailed, five (5) days after being mailed as described
above and (d) upon transmission by facsimile if a customary confirmation of
delivery is received during normal business hours and, if not, the next business
day after confirmation of delivery is received.

 

(i) Waiver. No consent or waiver, express or implied, by any party to, or of any
breach or default by another party in the performance of, this Agreement shall
be construed as a consent to or waiver of any subsequent breach or default in
the performance by such other party of the same or any other obligations
hereunder.

 

(j) Counterparts. This Agreement may be executed in several counterparts, which
shall be treated as originals for all purposes, and all counterparts so executed
shall constitute one agreement, binding on all the parties hereto,
notwithstanding that not all the parties are signatory to the original or the
same counterpart. Any such counterpart shall be admissible into evidence as an
original hereof against the Person who executed it.

 

(k) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning of terms contained
herein.

 

(l) Invalidity of Provision. The invalidity or unenforceability of any provision
of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.

 

(m) Amendments and Waivers. The provisions of this Agreement may be modified or
amended at any time and from time to time, and particular provisions of this
Agreement may be waived or modified, with and only with an agreement or consent
in writing signed by each of the parties hereto.

 

(n) Further Assistance. The parties hereto shall execute and deliver all
documents, provide all information and take or refrain from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.

 

(o) No Third-Party Beneficiaries. This Agreement is not intended to, and does
not, confer upon any Person other than the parties hereto any rights or
remedies.

 

[Remainder of Page Intentionally Left Blank]

 

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Execution copy

 

IN WITNESS WHEREOF this Agreement has been signed by each of the parties hereto,
and shall be effective as of the date first above written.

 

  CM FINANCE INC       By:     Name:  Michael C. Mauer   Title: Chief Executive
Officer       CM INVESTMENT PARTNERS LLC       By MMCMIP LLC, its managing
member       By:     Name: Michael C. Mauer   Title: Sole Member

 

Agreed and accepted as of the date first set forth above:

 

STIFEL VENTURE CORP.       By:     Name:     Title:    

 

Agreed and accepted with respect to Section 3 only as of the date first set
forth above:

 

STIFEL NICOLAUS & COMPANY, INCORPORATED       By:     Name:     Title:    

 

[Signature Page – CM Finance Amended and Restated Stockholder Agreement (August
2016)]