EXECUTION COPY


 


	 
	SALE AND SERVICING AGREEMENT
	Among
	HORIZON CREDIT III LLC,
	as the Buyer,
	And
	HORIZON TECHNOLOGY FINANCE CORPORATION,
	as the Originator,
	And
	HORIZON TECHNOLOGY FINANCE MANAGEMENT
    LLC,
	as the Servicer,
	And
	U.S. BANK NATIONAL ASSOCIATION,
	as the Collateral Custodian and as Back-up Servicer,
	And
	FORTRESS CREDIT CO LLC,
	as the Agent
	 


 


Dated as of August 23, 2012


 



    	 



    	 



    

 


Table of Contents


 


	 	 	Page
	 	 	 
	ARTICLE I DEFINITIONS	1
	Section 1.01	Definitions	1
	Section 1.02	Other Definitional Provisions	15
	 	 	 
	ARTICLE II CONVEYANCE OF THE PURCHASED ASSETS	15
	Section 2.01	Conveyance of the Purchased Assets; Payment of Sales Price	15
	Section 2.02	Ownership and Possession of Note Receivable Documents	17
	Section 2.03	Books and Records; Intention of the Parties	17
	Section 2.04	Delivery of Required Asset Documents	17
	Section 2.05	Acceptance by the Agent of the Required Asset Documents; Certification by the Collateral Custodian	18
	Section 2.06	Conditions Precedent to Closing	19
	Section 2.07	Conditions to Transfers of Notes Receivables	19
	 	 	 
	ARTICLE III REPRESENTATIONS, WARRANTIES and covenants	20
	Section 3.01	Representations, Warranties and Covenants of the Buyer	20
	Section 3.02	Representations, Warranties and Covenants of the Originator	22
	Section 3.03	Representations and Warranties Regarding the Notes Receivable	25
	Section 3.04	Notice of Breach of Representations and Warranties	26
	Section 3.05	Repurchase or Substitutions of Ineligible Notes Receivable	26
	 	 	 
	ARTICLE IV ADMINISTRATION AND SERVICING OF TRANSFERRED NOTES RECEIVABLE	29
	Section 4.01	Appointment of the Servicer	29
	Section 4.02	Duties and Responsibilities of the Servicer	29
	Section 4.03	Authorization of the Servicer	32
	Section 4.04	Collection of Payments	32
	Section 4.05	Realization Upon Defaulted Notes Receivable	34
	Section 4.06	Maintenance of Insurance Policies	34
	Section 4.07	Representations and Warranties of the Servicer and the Back-up Servicer	34
	Section 4.08	Covenants of the Servicer	38
	Section 4.09	The Collateral Custodian	41
	Section 4.10	Representations and Warranties of the Collateral Custodian	45
	Section 4.11	Covenants of the Collateral Custodian	46
	Section 4.12	The Agent	47
	Section 4.13	Payment of Certain Expenses by the Servicer and the Buyer	47
	Section 4.14	Reports	47
	Section 4.15	Annual Statement as to Compliance	48
	Section 4.16	Limitation on Liability	48
	Section 4.17	The Servicer Not to Resign	49


 



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	Section 4.18	Access to Certain Documentation and Information Regarding the Transferred Notes Receivable	49
	Section 4.19	Identification of Records	50
	 	 	 
	ARTICLE V ESTABLISHMENT OF lockbox account and collection account	50
	Section 5.01	Lockbox Account	50
	Section 5.02	Collection Account	51
	 	 	 
	ARTICLE VI [RESERVED]	52
	 	 	 
	ARTICLE VII COVENANTS	52
	Section 7.01	Financial Covenants of Horizon and Horizon Management	52
	Section 7.02	Covenants Regarding Purchased Assets	52
	 	 	 
	ARTICLE VIII THE SERVICER	53
	Section 8.01	Indemnification; Third Party Claims	53
	Section 8.02	Relationship of Servicer to the Buyer and the Agent	55
	Section 8.03	Reserved	55
	 	 	 
	ARTICLE IX SERVICER DEFAULT	56
	Section 9.01	Servicer Default	56
	Section 9.02	Appointment of Successor	58
	Section 9.03	Waiver of Defaults	62
	Section 9.04	Accounting Upon Termination of Servicer	62
	 	 	 
	ARTICLE X TERMINATION	63
	Section 10.01	Termination	63
	 	 	 
	ARTICLE XI MISCELLANEOUS PROVISIONS	63
	Section 11.01	Amendment	63
	Section 11.02	Duration of Agreement	63
	Section 11.03	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.	63
	Section 11.04	Notices	64
	Section 11.05	Severability of Provisions	67
	Section 11.06	No Partnership	67
	Section 11.07	Counterparts	68
	Section 11.08	Successors and Assigns	68
	Section 11.09	Headings	68
	Section 11.10	Non-Petition Agreement	68
	Section 11.11	Due Diligence	68
	Section 11.12	No Reliance	69
	Section 11.13	Conflicts	69
	Section 11.14	No Agency	70


 



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	EXHIBIT A	Form of Servicer Report
	EXHIBIT B	Form of S&SA Assignment
	EXHIBIT C	Form of Note Receivable Schedule
	EXHIBIT D-1	Form of Initial Collateral Certification
	EXHIBIT D-2	Form of Final Collateral Certification
	EXHIBIT E	Form of Request for Release of Documents and Receipt
	EXHIBIT F	Form of Servicer’s Certificate
	EXHIBIT G	Form of Note Receivable Checklist
	 	 
	ANNEX 1	Location of Note Receivable Documents Held by Collateral Custodian


 



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SALE AND SERVICING AGREEMENT


 


This Sale and Servicing Agreement is entered
into as of August 23, 2012, by and among Horizon Credit III LLC, a Delaware limited liability company, as the Buyer, Horizon
Technology Finance Corporation, a Delaware corporation, as the Originator, Horizon Technology Finance Management LLC, a Delaware
limited liability company, as the Servicer, U.S. Bank National Association, a national banking association, as the Collateral Custodian
and as Back-up Servicer, and Fortress Credit Co LLC, a Delaware limited liability company, as the Agent for Lenders under the Loan
Agreement (as hereinafter defined).


 


WITNESSETH:


 


In consideration of the mutual agreements
herein contained, the parties hereto hereby agree as follows for the benefit of each of them and for the benefit of the Agent and
Lenders:


 


ARTICLE
I






DEFINITIONS


 


Section 1.01         Definitions.


 


Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. Capitalized terms
used herein but not specifically defined herein shall, to the extent defined in the Loan Agreement, have the respective meanings
ascribed to them in the Loan Agreement.


 


“1940 Act”: The Investment
Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.


 


“Accepted Servicing Practices”:
The servicing practices and collection procedures of the Servicer that are in accordance with the Required Procedures (in the case
that the Servicer is Horizon Management), the applicable Note Receivable Documents and Applicable Law and which are consistent
with the higher standard of (i) customary servicing practices of prudent institutions which service loans or other financial assets
similar to the Transferred Notes Receivable for their own account or for the account of others and (ii) the same care, skill, prudence
and diligence with which the Servicer services and administers loans or other financial assets which are similar to the Transferred
Notes Receivable serviced or administered pursuant to this Agreement, for its own account or for the account of others.


 



    	 



    	 



    

 


“Affiliate”: Has the meaning
set forth in the Loan Agreement.


 


“Agent”: Fortress Credit
Co LLC, a Delaware limited liability company, as Agent for the Lenders under the Loan Agreement, or any successor Agent under the
Loan Agreement.


 


“Agent’s Account”:
Has the meaning set forth in the Loan Agreement.


 


“Aggregate Outstanding Loan Balance”:
As of any date of determination, the sum of the Outstanding Loan Balances of all Eligible Notes Receivable included as part of
the Collateral on such date (and specifically excluding all Ineligible Notes Receivable).


 


“Agreement”: This Sale
and Servicing Agreement, as it may be amended and supplemented from time to time.


 


“Applicable Law”: For any
Person or property of such Person, all existing and future applicable laws, rules, regulations (including proposed, temporary and
final income tax regulations), statutes, treaties, codes ordinances, permits, certificates, orders and licenses of and interpretations
by any Governmental Authority (including, without limitation, usury laws, predatory lending laws, the Federal Truth in Lending
Act, and Regulation Z and Regulation B of the Federal Reserve Board), and applicable judgments, decrees, injunctions, writs, orders,
or line action of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.


 


“Availability Period”:
Has the meaning provided in the Loan Agreement.


 


“Back-up Servicer”: U.S.
Bank, acting in its capacity as back-up servicer, as set forth in that certain Back-up Servicer Engagement Letter.


 


“Back-up Servicer Engagement Letter”:
The letter agreement dated as of August 6, 2012, by and among U.S. Bank and Horizon Management.


 


“Bankruptcy Code”: Title
11 of the United States Code, as in effect from time to time.


 


“Bankruptcy Event”: With
respect to a Person, shall be deemed to have occurred if either:


 



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(a)          a
case or other proceeding shall be commenced, without the application or consent of such Person, in any court seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or for all or substantially all
of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed or unstayed, and in effect,
for a period of forty-five (45) consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary
case or proceeding under any such law now or hereafter in effect; or


 


(b)          such
Person shall commence a voluntary case or other proceeding under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person or for any substantial part
of its assets, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability
to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors shall vote to implement
any of the foregoing.


 


“Bankruptcy Laws”: The
Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, composition or adjustment of debts or similar debtor relief laws from time to time in effect
affecting the rights of creditors generally.


 


“Bankruptcy Proceeding”:
Any case, action or proceeding before any Governmental Authority relating to a Bankruptcy Event.


 


“Business Day”: Any day
that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the State of New York, the State
of Minnesota or the State of Connecticut.


 


“Buyer”: Horizon Credit
III LLC, a Delaware limited liability company.


 


“Closing Date”: The date
of this Agreement.


 


“Code”: The Internal Revenue
Code of 1986, as amended from time to time, and the regulations promulgated by the United States Treasury thereunder.


 


“Collateral”: Has the meaning
provided in the Loan Agreement.


 



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“Collateral Custodian”:
U.S. Bank, as the Collateral Custodian under this Agreement, or any successor collateral custodian under this Agreement.


 


“Collateral Custodian Fee”:
Means the fee identified as such in the Collateral Custodian Fee Letter.


 


“Collateral Custodian Fee Letter”:
Means the fee letter, dated as of June 8, 2012, among the Buyer, the Originator, and the Collateral Custodian, and any fee letter
entered into with the consent of the Agent by the Buyer and any successor collateral custodian appointed pursuant to this Agreement.


 


“Collection Period”: With
respect to any Payment Date, the period consisting of the calendar month (or portion hereof during which this Agreement is in effect)
immediately preceding the related Record Date.


 


“Collection Account”: Has
the meaning set forth in the Loan Agreement.


 


“Collection Account Bank”:
Has the meaning set forth in the Loan Agreement.


 


“Collections”: (a) All
cash collections or other cash proceeds received by the Buyer or by the Servicer or the Originator on behalf of the Buyer from
any source in payment of any amounts owed in respect of a Transferred Note Receivable, including, without limitation, Interest
Collections, Principal Collections, Insurance Proceeds, and all Recoveries, (b) all amounts received by the Buyer in connection
with the removal of a Transferred Note Receivable from the Collateral pursuant to Section 3.05 and (c) any other funds received
by or on behalf of the Buyer with respect to any Transferred Note Receivable or Related Property, but excluding, in the case of
(a), (b) or (c), as applicable, amounts in respect of any Retained Interest and Excluded Amounts.


 


“Continued Errors”: Has
the meaning set forth in Section 9.02(f) hereof.


 


“Credit Event”: Has the
meaning set forth in Section 3.05(a) hereof.


 


“Default”: Any occurrence
that is, or with notice or the lapse of time or both would become, an Event of Default.


 


“Defaulted Note Receivable”:
Has the meaning set forth in the Loan Agreement.


 



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“Dollars” or “$”
refers to lawful money of the United States.


 


“Eligibility Date”: The
Business Day on which any Note Receivable is intended to become an Eligible Note Receivable.


 


“Eligible Note Receivable”:
On any date of determination, any Transferred Note Receivable that both (a) complies with the representations and warranties
set forth in Section 3.03 and (b) is an Eligible Note Receivable under the Loan Agreement.


 


“Errors”: Has the meaning
set forth in Section 9.02(f) hereof.


 


“Event of Default”: Either
a Servicer Default or an “Event of Default” under the Loan Agreement.


 


“Exchange Act”: The Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


“Excluded Amounts”: Any
Collections received with respect to Notes Receivable which have been removed from the Collateral pursuant to Section 3.05
to the extent such Collections are attributable to a time after the effective date of the applicable substitution, repurchase or
release.


 


“Fair Market Value”: With
respect to a Transferred Note Receivable, if such Transferred Note Receivable has been reduced in value on such date of determination
below the original principal amount (other than as a result of the allocation of a portion of the original principal amount to
warrants or other equity entitlements), the fair market value of such Transferred Note Receivable as determined by the Board of
Directors of the Originator and reviewed by its auditors and communicated to the Servicer.


 


“Fee Letter”: Has the meaning
provided in the Loan Agreement.


 


“Final Collateral Certification”:
The certification in the form of Exhibit D-2 hereto prepared by the Collateral Custodian.


 


“GAAP”: Has the meaning
provided in the Loan Agreement.


 


“Governmental Authority”:
Has the meaning set forth in the Loan Agreement.


 



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“Horizon”: Horizon Technology
Finance Corporation, a Delaware corporation.


 


“Horizon III Assets”: The
Collateral, any other property or assets of the Borrower and any proceeds thereof.


 


“Horizon Management”: Horizon
Technology Finance Management LLC, a Delaware limited liability company.


 


“Horizon Indemnified Party”:
Has the meaning set forth in Section 8.01(c) hereof.


 


“Indebtedness”: Has the
meaning set forth in the Loan Agreement.


 


“Indemnified Parties”:
Has the meaning set forth in Section 8.01(c) hereof.


 


“Indemnifying Parties”:
Has the meaning set forth in Section 8.01(d) hereof.


 


“Ineligible Note Receivable”:
Any Note Receivable or portion thereof that is not an Eligible Note Receivable.


 


“Initial Collateral Certification”:
The certification in the form of Exhibit D-1 hereto prepared by the Collateral Custodian.


 


“Insurance Policy”: With
respect to any Transferred Note Receivable, an insurance policy covering physical damage to or loss to any assets or Related Property
of the Obligor securing such Transferred Note Receivable.


 


“Insurance Proceeds”: Any
amounts payable or any payments made to the Buyer or to the Servicer on its behalf under any Insurance Policy.


 


“Intangible Assets”: With
respect to any Person, that portion of the book value of all of such Person’s assets that would be treated as intangibles
under GAAP.


 


“Lender”: Has the meaning
set forth in the Loan Agreement.


 


“Lender Group”: Has the
meaning set forth in the Loan Agreement.


 



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“Lien”: Has the meaning
set forth in the Loan Agreement.


 


“Loan”: Has the meaning
set forth in Section 2.01(b) hereof.


 


“Loan Agreement”: The Loan
and Security Agreement among the Agent, the Lenders, and the Buyer, dated as of the date hereof, as it may be amended or supplemented
from time to time.


 


“Loan Documents”: This
Agreement, the Loan Agreement, each S&SA Assignment, the Fee Letter, the Collateral Custodian Fee Letter, the Back-up Servicer
Engagement Letter, any UCC financing statements filed pursuant to the terms of this Agreement or the Loan Agreement, and any additional
document, letter, fee letter, certificate, opinion, agreement or writing the execution of which is necessary or incidental to carrying
out the terms of the foregoing documents.


 


“Loans Outstanding: As of any
date of determination, the aggregate principal amount of Loans outstanding on such date, after giving effect to all repayments
of Loans and makings of new Loans on such date.


 


“Lockbox Account”: Has
the meaning set forth in the Loan Agreement.


 


“Lockbox Bank”: The depository
bank where the Lockbox Account is located.


 


“Material Adverse Change”:
Has the meaning set forth in the Loan Agreement.


 


“Material Adverse Effect”:
With respect to any event or circumstance, means a material adverse effect on, as applicable, (a) the business, condition (financial
or otherwise), operations, performance, or properties of the Originator, the Servicer, the Buyer, or the Collateral Custodian,
(b) the validity, enforceability or collectability of this Agreement, any other Loan Document or the Purchased Assets, (c)
the rights and remedies of the Agent or any member of the Lender Group under this Agreement or any Loan Document, or (d) the ability
of any of the Originator, the Servicer, the Buyer, or the Collateral Custodian to perform its obligations under this Agreement
or any other Loan Document, or (e) the status, existence, perfection, priority, or enforceability of the interest of the Buyer
in the Purchased Assets or of the Agent on behalf of the Lender Group in the Collateral.


 


“Non-Horizon III Assets”:
Assets and property that are not Horizon III Assets.


 



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“Note Receivable”: A promissory
note evidencing a commercial loan made or purchased by Originator in accordance with the Required Procedures and secured by a Lien
on property owned by the maker of such note.


 


“Note Receivable Checklist”:
With respect to any Transferred Note Receivable, the list delivered to the Agent and the Collateral Custodian pursuant to Section
2.04 that identifies the related Note Receivable Documents that are Required Asset Documents, in the form of Exhibit G
hereto.


 


“Note Receivable Documents”:
With respect to any Transferred Note Receivable, the Note Receivable and all other material loan or collateral documentation executed
or delivered in connection therewith.


 


“Notes Receivable Schedule”:
The schedule of Notes Receivable conveyed to the Buyer on each Transfer Date and delivered to the Agent and the Collateral Custodian
in connection with each Loan or as new Notes Receivable are contributed to the Buyer, initially as set forth in Exhibit C
hereto.


 


“Obligations”: Has the
meaning set forth in the Loan Agreement.


 


“Obligor”: With respect
to any Note Receivable, the Person or Persons obligated to make payments pursuant to such Note Receivable, including any guarantor
thereof.


 


“Officer’s Certificate”:
A certificate signed by a Responsible Officer of the Person delivering such certificate, in each case as required by this Agreement.


 


“Opinion of Counsel”: A
written opinion of counsel who may be employed by the Servicer, the Buyer, the Originator or any of their respective Affiliates,
in form and substance satisfactory to the Agent.


 


“Originator”: Horizon,
in its capacity as the Originator hereunder, and its permitted successors and assigns.


 


“Outstanding Loan Balance”:
With respect to any Note Receivable, as of any date of determination, the lesser of (i) the Fair Market Value of such Note Receivable
and (ii) the total remaining amounts of principal payable by the Obligor thereof.


 



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“Payment Date”: The fifteenth
day of each calendar month, or if any such day is not a Business Day, the first Business Day following such day, commencing on
September 15, 2012.


 


“Permitted Discretion”:
Has the meaning set forth in the Loan Agreement.


 


“Permitted Liens”: Has
the meaning set forth in the Loan Agreement.


 


“Person”: Has the meaning
set forth in the Loan Agreement.


 


“Predecessor Servicer Work Product”:
Has the meaning set forth in Section 9.02(f) hereof.


 


“Proceeding”: Any suit
in equity, action at law or other judicial or administrative proceeding.


 


“Purchased Assets”: All
right, title and interest, whether now owned or hereafter received, acquired or arising, and wherever located, of the Originator
in and to the property described in clauses (i) through (ix) below and all accounts, cash and currency, chattel paper,
tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, trademark, trademark licenses, patent, patent
licenses, other intellectual property rights, equipment, fixtures, contract rights, general intangibles, instruments, certificates
of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims,
deposit accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions, other
property consisting of, arising out of, or related to any of the following (in each case excluding the Retained Interest and the
Excluded Amounts) and the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of
insurance covering any or all of the foregoing, and any and all Accounts, Books, Deposit Accounts, Equipment, General Intangibles,
Inventory, Investment Property, Negotiable Collateral, Real Property, Supporting Obligations, money, or other tangible or intangible
property resulting from the sale, exchange, collection, or other disposition of any of the foregoing, or any portion thereof or
interest therein, and the proceeds thereof:


 


(i)          the
Transferred Notes Receivable, and all monies due or to become due in payment of such Notes Receivable on and after the related
Transfer Date, including but not limited to all Collections and all obligations owed to the Originator in connection with the Transferred
Notes Receivable;


 


(ii)         any
Related Property securing or purporting to secure the Transferred Notes Receivable (to the extent the Originator has been granted
a Lien thereon) including the related security interest granted by the Obligor under the Transferred Notes Receivable, and all
proceeds from any sale or other disposition of such Related Property;


 



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(iii)        all
security interests, Liens, guaranties, warranties, letters of credit, accounts, bank accounts, mortgages or other encumbrances
and property subject thereto from time to time purporting to secure payment of any Transferred Note Receivable, together with all
UCC financing statements or similar filings relating thereto;


 


(iv)        all
claims (including “claims” as defined in Bankruptcy Code § 101(5)), suits, causes of action, and any other right
of the Originator, whether known or unknown, against the related Obligors, if any, or any of their respective Affiliates, agents,
representatives, contractors, advisors, or any other Person that in any way is based upon, arises out of or is related to any of
the foregoing, including, to the extent permitted to be assigned under applicable law, all claims (including contract claims, tort
claims, malpractice claims, and claims under any law governing the purchase and sale of, or indentures for, securities), suits,
causes of action, and any other right of the Originator against any attorney, accountant, financial advisor, or other Person arising
under or in connection with the related Note Receivable Documents;


 


(v)         all
cash, securities, or other property, and all setoffs and recoupments, received or effected by or for the account of the Originator
under such Transferred Notes Receivable (whether for principal, interest, fees, reimbursement obligations, or otherwise) after
the related Transfer Date, including all distributions obtained by or through redemption, consummation of a plan of reorganization,
restructuring, liquidation, or otherwise of any related Obligor or the related Note Receivable Documents, and all cash, securities,
interest, dividends, and other property that may be exchanged for, or distributed or collected with respect to, any of the foregoing;


 


(vi)        all
Insurance Policies;


 


(vii)       the
Note Receivable Documents with respect to such Transferred Notes Receivable;


 


(viii)      all
Warrant Assets with respect to Transferred Notes Receivable; and


 


(ix)         the
proceeds of each of the foregoing.


 



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For the avoidance of doubt, Purchased Assets shall not include
the cash received by the Originator from the Buyer on the Transfer Date from the sale of Eligible Note Receivables on the Transfer
Date.


 


“Record Date”: With respect
to each Payment Date, the tenth day of each calendar month occurring during the calendar month of such Payment Date, or if any
such day is not a Business Day, the first Business Day following such day, commencing September 10, 2012.


 


“Recoveries”: With respect
to any Defaulted Note Receivable, proceeds of the sale of any Related Property, proceeds of any related Insurance Policy, and any
other recoveries with respect to such Transferred Note Receivable and Related Property, and amounts representing late fees and
penalties, net of liquidation expenses and amounts, if any, received that are required to be refunded to the Obligor on such Transferred
Note Receivable.


 


“Related Property”: With
respect to any Transferred Note Receivable, any property or other assets of the Obligor thereunder pledged or purported to be pledged
as collateral or in which a Lien has been granted or purported to be granted to secure the repayment of such Transferred Note Receivable
and including, without limitation, intellectual property rights.


 


“Released Amounts”: With
respect to any payment or Collection received with respect to any Transferred Note Receivable on any Business Day (whether such
payment or Collection is received by the Servicer, the Originator or the Buyer), an amount equal to that portion of such payment
or collection constituting Excluded Amounts or Retained Interest.


 


“Replaced Note Receivable”:
Has the meaning set forth in Section 3.05(a) hereof.


 


“Required Asset Documents”:
Has the meaning provided in the Loan Agreement.


 


“Required Procedures”:
Has the meaning set forth in the Loan Agreement.


 


“Repurchase Price”: With
respect to a Transferred Note Receivable being repurchased pursuant to Section 3.05 hereof, an amount equal to the outstanding
principal balance thereof plus any accrued and unpaid interest thereon.


 


“Repurchase Cap”: Means
as of any date, an amount equal to ten percent (10%) of the outstanding principal amount of all Eligible Notes Receivable as of
such date.


 



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“Responsible Officer”:
When used with respect to:


 


(a)          the
Collateral Custodian, any officer within the Corporate Trust Office of such Person, including any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer of such Person customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer’s knowledge of and familiarity with the particular subject and, in each case,
responsible for the performance of the Collateral Custodian under this Agreement;


 


(b)          the
Agent, or any Affiliate of the Agent, any Vice President of such Person; and


 


(c)          the
Buyer, the Servicer, the Originator or any of them, any individual who is an “Authorized Person” (as defined in the
Loan Agreement) for such entity.


 


“Retained Interest”: With
respect to each Transferred Note Receivable, the following interests, rights and obligations in such Transferred Note Receivable
and under the associated Note Receivable Documents, which are being retained by the Originator: (a) all of the obligations, if
any, to provide additional funding with respect to such Transferred Note Receivable, (b) all of the rights and obligations, if
any, of the agent(s) under the documentation evidencing such Transferred Note Receivable, (c) the applicable portion of the interests,
rights and obligations under the documentation evidencing such Transferred Note Receivable that relate to such portion(s) of the
indebtedness that is owed to another lender or is being retained by the Originator, (d) any unused, commitment or similar fees
associated with the additional funding obligations that are not being transferred in accordance with clause (a) of this
definition, (e) any agency or similar fees associated with the rights and obligations of the agent that are not being transferred
in accordance with clause (b) of this definition, and (f) any advisory, consulting or similar fees due from the Obligor
associated with services provided by the agent that are not being transferred in accordance with clause (b) of this definition.


 


“Review Criteria”: Has
the meaning set forth in Section 2.05(c) hereof.


 


“S&SA Assignment”:
An assignment of Purchased Assets from the Originator to the Buyer pursuant to this Agreement, in the form of Exhibit B
hereto.


 


“Sales Price”: Has the
meaning set forth in Section 2.01(b) hereof.


 


“Scheduled Payment”: On
any Record Date, with respect to any Transferred Note Receivable, each monthly or quarterly payment (whether principal, interest
or principal and interest) scheduled to be made by the related Obligor after such Record Date under the terms of such Transferred
Note Receivable.


 



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“Securities Act”: The Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Servicer”: Horizon Management,
in its capacity as the Servicer hereunder, or any successor servicer appointed as provided in the Loan Agreement (including the
Back-up Servicer) or otherwise herein provided.


 


“Servicer Default”: Has
the meaning set forth in Section 9.01 hereof.


 


“Servicer Indemnified Party”:
Has the meaning set forth in Section 8.01(a) hereof.


 


“Servicer Report”: A report
substantially in the form of Exhibit A hereto, to be delivered as contemplated by Section 4.14(a) hereof.


 


“Servicer’s Certificate”:
Has the meaning set forth in Section 4.14(b) hereof.


 


“Servicing Fee”: For each
Payment Date, an amount equal to the product of (a) the average daily Aggregate Outstanding Loan Balance during the related
Collection Period, multiplied by (b) the Servicing Fee Rate for such Collection Period, multiplied by (c) a fraction,
the numerator of which is the number of days in such Collection Period and the denominator of which is 360.


 


“Servicing Fee Rate”: A
rate equal to one percent (1.00%) per annum.


 


“Servicing Records”: All
documents, books, records and other information (including, without limitation, computer programs, tapes, disks, data processing
software and related property rights) prepared and maintained by the Servicer with respect to the Transferred Notes Receivable,
any item of Related Property and the related Obligors, other than the Note Receivable Documents.


 


“Solvent”: Has the meaning
provided in the Loan Agreement.


 


“Subsidiary”: Has the meaning
provided in the Loan Agreement.


 



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“Substitute Note Receivable”:
Has the meaning set forth in Section 3.05(a) hereof.


 


“Successor Servicer”: Has
the meaning set forth in Section 9.01(b) hereof.


 


“Tangible Net Worth”: Has
the meaning provided in the Loan Agreement.


 


“Third Party Claim”: Has
the meaning set forth in Section 8.01(d) hereof.


 


“Transfer”: Has the meaning
set forth in Section 2.07 hereof.


 


“Transfer Date”: With respect
to each Transferred Note Receivable, the date specified as the “Transfer Date” in the related S&SA Assignment,
on and after which Collections on such Transferred Note Receivable shall be property of the Buyer.


 


“Transferred Note Receivable”:
Each Note Receivable and corresponding Warrant Asset, if any, that is sold or contributed to the Buyer hereunder.


 


“UCC”: The Uniform Commercial
Code as in effect from time to time in the State of New York; provided, however, that in the event that, by reason of mandatory
provisions of law, any or all of the perfection, priority, or remedies with respect to Agent’s Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “UCC”
shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such perfection, priority, or remedies.


 


“UCC Financing Statement”:
A financing statement meeting the requirements of the UCC of the relevant jurisdiction.


 


“United States”: The United
States of America.


 


“U.S. Bank”: U.S. Bank
National Association, a national banking association, and its permitted successors and assigns.


 


“Warrant Asset”: Means
any equity purchase warrants or similar rights convertible into or exchangeable or exercisable for any equity interests received
by Horizon as an “equity kicker” from an Obligor in connection with a Transferred Note Receivable.


 



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Section 1.02         Other
Definitional Provisions.


 


(a)          Any
agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are
also to its permitted successors and assigns.


 


(b)          All
terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.


 


(c)          As
used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement
or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under
GAAP. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under GAAP, the definitions contained in this Agreement or in any such certificate
or other document shall control.


 


(d)          The
words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Article, Section, Schedule and
Exhibit references contained in this Agreement are references to Articles, Sections, Schedules and Exhibits in or to this Agreement
unless otherwise specified; and the term “including” shall mean “including without limitation.”


 


(e)          The
definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.


 


ARTICLE
II



CONVEYANCE OF THE PURCHASED ASSETS


 


Section 2.01         Conveyance
of the Purchased Assets; Payment of Sales Price.


 


(a)          Conveyance
of the Purchased Assets.


 



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(i)          On
each Transfer Date, in consideration of the payment of the Sales Price therefor and subject to the satisfaction of the conditions
to each Transfer set forth in Section 2.07 hereof, the Originator hereby sells to the Buyer, without recourse, but subject
to the other terms and provisions of this Agreement, all of the right, title and interest of the Originator in and to the Purchased
Assets identified in the applicable S&SA Assignment and the related Note Receivable Schedule, and all proceeds of the foregoing.


 


(ii)         On
each Transfer Date, the Buyer hereby purchases, and acknowledges the sale to it, of the Purchased Assets identified in the applicable
S&SA Assignment and the related Note Receivable Schedule. Concurrently with such delivery, as of the applicable Transfer Date,
the Buyer automatically grants a security interest in the Purchased Assets identified in the applicable S&SA Assignment and
the related Note Receivable Schedule (a copy of which has or will concurrently therewith be delivered to the Agent) to the Agent
pursuant to the Loan Agreement as security for the Buyer’s Obligations under the Loan Agreement and the other Loan Documents.


 


(iii)        Notwithstanding
anything to the contrary herein, in no event shall the Buyer be required to purchase the Purchased Assets identified in any S&SA
Assignment and the related Note Receivable Schedule on any Transfer Date if the conditions precedent to the applicable Transfer
set forth in Section 2.07 have not been fulfilled.


 


(iv)        The
Servicer shall, at its own expense, within one (1) Business Day following each Transfer Date, indicate in its computer files that
the Purchased Assets identified in the applicable S&SA Assignment and the related Note Receivable Schedule have been sold to
the Buyer pursuant to this Agreement.


 


(v)         The
parties hereto intend that the conveyances contemplated hereby be sales from the Originator to the Buyer of the Purchased Assets
identified in each S&SA Assignment and related Note Receivable Schedule. In the event the transactions with respect to the
Purchased Assets set forth herein are deemed not to be a sale, the Originator hereby grants to the Buyer a security interest in
all of the Originator’s right, title and interest in, to and under such Purchased Assets, to secure all of the Originator’s
obligations hereunder, and this Agreement shall constitute a security agreement under Applicable Law.


 


(b)          Payment
of the Sales Price. The purchase price for each Purchased Asset sold to Buyer under this Agreement (each, a “Sales
Price”) shall be the then-outstanding principal balance of the related Note Receivable calculated as of the related Transfer
Date. The Sales Price for each Transferred Note Receivable shall be paid by the Buyer on the related Transfer Date by means of
(i) a cash payment with proceeds of a loan by the Lender Group to Buyer with respect to such Transferred Note Receivable under
the Loan Agreement and Section 2.07 (each, a “Loan”) or with cash proceeds from the Buyer’s cash
on hand and to the extent permitted by the Loan Agreement, and (ii) a capital contribution by the Originator to the Buyer
of the remaining amount; provided that with respect to any Transferred Note Receivable that is transferred prior to the
time that it is an Eligible Note Receivable, such transfer shall be by way of capital contribution by the Originator to the Buyer.


 



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(c)          Acknowledgment
of Buyer. The Buyer acknowledges and agrees that with respect to any Transferred Note Receivable, the Buyer may ultimately
receive from the Originator an amount less than the Sales Price paid by the Buyer to the Originator therefor, and that the Buyer
shall have no recourse against the Originator for such deficiency of the principal, interest, fees, expenses or any other amounts
owing under such Transferred Note Receivable, or under or pursuant to any of the related Note Receivable Documents or any
other document executed in connection therewith; provided that the foregoing shall not be deemed to release the Originator
from liability for its express representations, warranties, covenants and indemnities under this Agreement.


 


Section 2.02         Ownership
and Possession of Note Receivable Documents.


 


With respect to each Transferred Note Receivable,
as of the related Transfer Date, the ownership of the related Note Receivable Documents shall be vested in the Buyer as part of
the Collateral to secure the Obligations, and a security interest in the related Note Receivable Documents shall be granted and
pledged by the Buyer to the Agent pursuant to the Loan Agreement, and the Collateral Custodian shall take possession of the related
Note Receivable Documents as contemplated in Section 2.04 hereof.


 


Section 2.03         Books
and Records; Intention of the Parties.


 


On or prior to the Closing Date, the Originator
shall, at such party’s sole expense, cause to be filed UCC Financing Statements naming the Buyer as “buyer” and
describing the Purchased Assets being sold by the Originator to the Buyer with the office of the Secretary of State of the state
in which the Originator is organized and in any other jurisdictions as shall be necessary to perfect a security interest in the
Purchased Assets.


 


Section 2.04         Delivery
of Required Asset Documents.


 


(a)          The
Originator shall, with respect to each Note Receivable intended to become an Eligible Note Receivable, (i) no later than 2:00
p.m. New York City time three (3) Business Days prior to the Eligibility Date, deliver (or caused to be delivered) to the
Collateral Custodian (with copies to the Agent) a copy of the Note Receivable Schedule, Note Receivable Checklist (on which the
Collateral Custodian shall rely) and the originals or copies, as applicable, of all Required Asset Documents with respect to such
Note Receivable.


 



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(b)          In
taking possession of the Required Asset Documents delivered to it by the Originator, the Collateral Custodian shall act solely
as agent for the Agent, on behalf of the Lender Group, in accordance with the terms hereof and the Loan Agreement, and not as agent
for the Originator, the Servicer, the Buyer or any other party.


 


Section 2.05         Acceptance
by the Agent of the Required Asset Documents; Certification by the Collateral Custodian.


 


(a)          Based
on the Final Collateral Certification received by the Agent from the Collateral Custodian and as of the date of delivery thereof,
the Agent shall acknowledge the Collateral Custodian’s receipt of the Note Receivable Documents delivered to the Collateral
Custodian on behalf of the Agent pursuant to Section 2.04 and declare that such Note Receivable Documents and any amendments,
replacements or supplements thereto and all other assets constituting the Collateral that are delivered to the Collateral Custodian
pursuant to this Agreement are being held for the use and benefit of the Lender Group.


 


(b)          No
later than 4:00 p.m. New York City time on the Business Day prior to the Eligibility Date of a Note Receivable, the Collateral
Custodian will deliver to the Agent, with a copy to the Buyer, the Originator, and the Servicer, an Initial Collateral Certification,
confirming whether or not the Collateral Custodian has received a copy of each Required Asset Document (as indicated on the related
Note Receivable Checklist) for such Note Receivable.


 


(c)          Within
three (3) Business Days after its receipt of the Required Asset Documents for each such Transferred Note Receivable, the Collateral
Custodian shall review such Required Asset Documents to confirm that: (A) each Required Asset Document has been properly executed
and has no obviously missing or mutilated pages, (B) file-stamped copies of UCC Financing Statements and other filings required
to be made as part of the Required Asset Documents as indicated on the related Note Receivable Checklist are in the possession
of the Collateral Custodian, and (C) the original principal balance and Obligor name with respect to such Transferred Note
Receivable is accurately reflected on the related Note Receivable Schedule (collectively, the “Review Criteria”).
Upon completion of such review, the Collateral Custodian will deliver a Final Collateral Certification to the Agent, with a copy
to the Buyer, the Originator, and the Servicer, confirming its receipt of such Required Asset Documents. Such certification will
also contain an exception report attached as Attachment A thereto which will identify any Transferred Notes Receivable for which
(i) the Collateral Custodian has not received a Required Asset Document or (ii) any Review Criteria is not satisfied.


 


(d)          The
Originator shall have five (5) Business Days after the Eligibility Date of a Note Receivable to deliver any missing Required Asset
Documents or correct any non-compliance with any Review Criteria. If the Collateral Custodian has not received all of the Required
Asset Documents with respect to any Transferred Note Receivable prior to the expiration of such five (5) Business Days, or the
Originator has not corrected any non-compliance with any Review Criteria with respect to any Transferred Note Receivable prior
to the expiration of such five (5) Business Days, then such Transferred Note Receivable shall be deemed to be an Ineligible Note
Receivable and the Originator shall repurchase such Transferred Note Receivable pursuant to Section 3.05(b) within one (1)
Business Day after notice thereof at the Repurchase Price thereof by depositing such Repurchase Price directly in the Agent’s
Account or the Collection Account; provided that in lieu of such a repurchase, the Originator may comply with the substitution
provisions of Section 3.05(a).


 



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(e)          It
is understood and agreed that the obligation of the Originator to repurchase or substitute any such Transferred Note Receivable
pursuant to this Section 2.05 and Section 3.05 shall constitute the sole remedy against Originator with respect to
such failure to comply with the foregoing delivery requirements.


 


(f)          In
performing its reviews of the Required Asset Documents, the Collateral Custodian shall have no responsibility to determine the
genuineness of any document contained therein and any signature thereon. The Collateral Custodian shall not have any responsibility
for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable
form, whether any document has been recorded in accordance with the requirements of any applicable jurisdiction or whether a blanket
assignment is permitted in any applicable jurisdiction.


 


Section 2.06         Conditions
Precedent to Closing. The effectiveness of this Agreement shall be subject to the satisfaction of the following conditions
precedent as of the Closing Date:


 


(a)          all
conditions precedent to the initial Loan under Section 3.1 of the Loan Agreement shall have been fulfilled;


 


(b)          the
Originator shall have delivered to the Agent evidence of a UCC-1 filing filed with the Delaware Secretary of State naming Originator
as seller and Buyer as buyer, to evidence the transfer of the Transferred Notes Receivable and other Purchased Assets pursuant
to this Agreement, in form and substance reasonably satisfactory to the Agent; and


 


(c)          the
Originator shall have taken any action reasonably requested by the Agent or the Buyer required to maintain or evidence the ownership
interest of the Buyer in the Purchased Assets and the security interest of the Agent in the Collateral.


 


Section 2.07         Conditions
to Transfers of Notes Receivables. On the Closing Date and on any Business Day during the Availability Period, the Originator
may sell Notes Receivable to the Buyer (each such sale, a “Transfer”). Any Transfer (including any Transfer
made on the Closing Date) shall be subject to the following conditions precedent:


 



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(a)          If
the Buyer will obtain a Loan on such Transfer Date in connection with the applicable Transfer, the conditions precedent or subsequent
to such Loan set forth Sections 3.1, 3.2, and 3.3 of the Loan Agreement shall be satisfied and all actions required to be taken
on or prior to the applicable Eligibility Date pursuant to Sections 2.04 and 2.05 shall have been taken in accordance
with the time periods therein required.


 


(b)          As
of the applicable Transfer Date and before and after giving effect to such Transfer, each of the Originator and Buyer shall be
Solvent.


 


(c)          The
Originator shall have taken any action reasonably requested by the Agent or the Buyer required to maintain or evidence the ownership
interest of the Buyer in the Purchased Assets and the security interest of the Agent in the Collateral.


 


(d)          Each
of the representations and warranties made by the Originator contained in Section 3.03 shall be true and correct with respect
to each Transferred Note Receivable sold or contributed to the Buyer on such Transfer Date, and each of the Buyer and the Originator
shall have performed all obligations to be performed by it under the Loan Documents on or prior to such Transfer Date; provided
that, if any representation or warranty made by the Originator pursuant to Section 3.03 shall be incorrect as of any Transfer
Date with respect to any Notes Receivable to be purchased on such date, the Buyer shall only be relieved of its obligation to purchase
such Transferred Note Receivable affected by such breach and, assuming satisfaction or waiver of the other conditions set forth
in this clause (d), the Buyer shall nonetheless be obligated to purchase all Notes Receivable to be purchased on such date
that are unaffected by such breach.


 


ARTICLE
III



REPRESENTATIONS, WARRANTIES and covenants


 


Section 3.01         Representations,
Warranties and Covenants of the Buyer.


 


The Buyer hereby represents, warrants and
covenants to the other parties hereto and the Lenders that as of each Transfer Date:


 


(a)          The
Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization and has, and had at all relevant times, full power to own its property, to carry on its business as currently
conducted and to enter into and perform its obligations under this Agreement and each Loan Document to which it is a party;


 



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(b)          The
execution and delivery by the Buyer of this Agreement and its performance of and compliance with all of the terms hereof will not
violate the Buyer’s organizational documents or constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach or acceleration of, any material contract, agreement or other
instrument to which the Buyer is a party or which are applicable to the Buyer or any of its assets;


 


(c)          The
Buyer has the full power and authority to enter into and consummate the transactions contemplated by this Agreement, has duly authorized
the execution, delivery and performance hereof, and has duly executed and delivered this Agreement; this Agreement, constitutes
a valid, legal and binding obligation of the Buyer, enforceable against it in accordance with the terms thereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating to
or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law);


 


(d)          The
Buyer is not in violation of, and the execution and delivery by the Buyer of this Agreement, and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect to any order or decree of any court or any order
or regulation of any federal, state, municipal or governmental agency having jurisdiction over it or its business, which violation
would materially and adversely affect the financial condition or operations of the Buyer or any of its properties or materially
and adversely affect the performance of any of its duties hereunder;


 


(e)          There
are no actions or proceedings against, or investigations of, the Buyer currently pending with regard to which the Buyer has received
service of process, and no action or proceeding against, or investigation of, the Buyer is, to the knowledge of the Buyer, threatened
or otherwise pending before any court, administrative agency or other tribunal that (A) would prohibit its entering into this Agreement
or render its obligations hereunder invalid, (B) seeks to prevent the consummation of any of the transactions contemplated hereby,
or (C) would prohibit or materially and adversely affect the performance by the Buyer of its obligations hereunder;


 


(f)          No
consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and
performance by the Buyer of, or compliance by the Buyer with, this Agreement, or for the consummation of the transactions contemplated
hereby, except for such consents, approvals, authorizations and orders, if any, that have been obtained prior to such date;


 


(g)          The
Buyer is Solvent, is able to pay its debts as they become due and has capital sufficient to carry on its business and its obligations
hereunder; it will not be rendered insolvent by the execution and delivery of this Agreement or the assumption of any of its obligations
hereunder; no petition of bankruptcy (or similar Bankruptcy Proceeding) has been filed by or against the Buyer;


 



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(h)          The
Buyer will be the sole owner of each item in the Purchased Assets transferred by the Originator, free and clear of any Lien other
than Permitted Liens, and, subject to the Loan Agreement, the Agent will have a first priority perfected security interest in each
item of Collateral, in each case free and clear of any Lien other than Permitted Liens;


 


(i)          The
Buyer acquired title to the Purchased Assets in good faith, without notice of any adverse claim;


 


(j)          The
Buyer is not required to be registered as an “investment company,” under the 1940 Act;


 


(k)          The
Buyer covenants that during the continuance of this Agreement it will comply in all respects with the provisions of its organizational
documents in effect from time to time;


 


(l)          Except
with respect to the representations and warranties of the Originator set forth in this Agreement and in each SS&A Assignment,
the Buyer has, independently and without reliance on the Originator, and based upon such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into the purchase of the Transferred Note Receivables and other Purchased
Assets being purchased by the Buyer on such Transfer Date; and


 


(m)         Within
five (5) Business Days of the applicable Transfer Date, the Buyer shall deliver to the Agent a fully-executed S&SA Assignment
and a final Note Receivable Schedule setting forth the Notes Receivable transferred on such Transfer Date.


 


Section 3.02         Representations,
Warranties and Covenants of the Originator.


 


The Originator hereby represents and warrants
to the other parties hereto and the Lenders that as of the Closing Date and as of each Transfer Date:


 


(a)          The
Originator is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization,
is duly qualified, in good standing and licensed to carry on its business in each state where the conduct of its business requires
it to be so qualified and licensed and has corporate power and authority to own its property, to carry on its business as currently
conducted and to enter into and perform its obligations under each Loan Document to which it is a party;


 



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(b)          The
execution and delivery by the Originator of each Loan Document to which it is a party and its performance of and compliance with
the terms thereof will not violate the Originator’s organizational documents or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under, or result in the breach or acceleration of, any material
contract, agreement or other instrument to which the Originator is a party or which may be applicable to the Originator or any
of its assets;


 


(c)          The
Originator has the full power and authority to enter into and consummate all transactions contemplated by the Loan Documents to
be consummated by it, has duly authorized the execution, delivery and performance of each Loan Document to which it is a party
and has duly executed and delivered each Loan Document to which it is a party; each Loan Document to which it is a party constitutes
a valid, legal and binding obligation of the Originator, enforceable against it in accordance with the terms hereof, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws relating
to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);


 


(d)          The
Originator is not in violation of, and the execution and delivery of each Loan Document to which it is a party by the Originator,
and its performance and compliance with the terms of each Loan Document to which it is a party will not constitute a violation
with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction over it or its business, which violation would materially and adversely affect the financial condition, business
or operations of the Originator or its properties or materially and adversely affect the performance of its duties under any Loan
Document to which it is a party;


 


(e)          There
are no actions or proceedings against, or investigations of, the Originator currently pending with regard to which the Originator
has received service of process, and no action or proceeding against, or investigation of, the Originator is, to the Originator’s
knowledge, threatened or otherwise pending before any court, administrative agency or other tribunal that (A) would prohibit its
entering into any Loan Document to which it is a party or render its obligations thereunder invalid, (B) seeks to prevent the consummation
of any of the transactions contemplated by any Loan Document to which it is a party or (C) would prohibit or materially and adversely
affect the sale or contribution of the Purchased Assets to the Buyer, the performance by the Originator of its obligations under,
or the validity or enforceability of, any Loan Document to which it is a party (including, without limitation) its obligations
under Section 3.05;


 


(f)          No
consent, approval, authorization or order of any court or governmental agency or body is required for: (1) the execution, delivery
and performance by the Originator of, or compliance by the Originator with, any Loan Document to which it is a party, (2) the sale
or contribution of the Purchased Assets to the Buyer, or (3) the consummation of the transactions required of it by any Loan Document
to which it is a party, except such as shall have been obtained before such date, other than the filing or recording of financing
statements, instruments of assignment and other similar documents necessary in connection with the sale of the Purchased Assets
to the Buyer;


 



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(g)          Immediately
prior to the sale of the Purchased Assets to the Buyer, the Originator had good and valid title to the Purchased Assets sold by
it on such date free and clear of all Liens other than Permitted Liens;


 


(h)          The
Originator is Solvent, is able to pay its debts as they become due and has capital sufficient to carry on its business and its
obligations under each Loan Document to which it is a party; it will not be rendered insolvent by the execution and delivery of
this Agreement or by the performance of its obligations under each Loan Document to which it is a party; no petition of bankruptcy
(or similar Bankruptcy Proceeding) has been filed by or against the Originator prior to the date hereof;


 


(i)          The
Originator has transferred the Purchased Assets transferred by it on each Transfer Date without any intent to hinder, delay or
defraud any of its creditors;


 


(j)          The
Originator has received fair consideration and reasonably equivalent value in exchange for the Purchased Assets sold and contributed
by it on each Transfer Date to the Buyer;


 


(k)          The
Originator has not dealt with any broker or agent or other Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement;


 


(l)          The
Originator’s principal place of business and chief executive offices are located at 312 Farmington Avenue, Farmington, Connecticut
06032, or at such other address as shall be designated by such party in a prior written notice to the other parties hereto;


 


(m)         The
Originator acknowledges and agrees that the Servicing Fee represents reasonable compensation for the performance of the servicing
duties hereunder and that the entire Servicing Fee shall be treated by the Originator, for accounting purposes, as compensation
for the servicing and administration of the Transferred Notes Receivable pursuant to this Agreement; and


 


(n)          The
Originator is in compliance with the financial covenants applicable to it set forth in Section 7.16(b) of the Loan Agreement
as of each date of measurement.


 



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It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.02 shall survive delivery of the respective Required Asset Documents
to the Collateral Custodian as the agent of the Agent, and shall inure to the benefit of the Agent, the Lenders, the Servicer,
and the Buyer. Upon discovery by the Originator, the Servicer, the Buyer, or the Agent of a breach of any of the foregoing representations
and warranties that materially and adversely affects the value of any item of Collateral or the interests of the Lender Group in
any item of Collateral, the party discovering such breach shall give prompt written notice to the other parties. The fact that
Agent or any Lender has conducted or has failed to conduct any partial or complete due diligence investigation of the Note Receivable
Documents shall not affect any rights of the Lender Group under this Agreement or any other Loan Document.


 


Section 3.03         Representations
and Warranties Regarding the Notes Receivable.


 


The Originator hereby represents and warrants
to the Agent, for the benefit of the Lender Group, that as of the Closing Date with respect to each Note Receivable sold or contributed
to the Buyer on the Closing Date, if any, and as of each Transfer Date with respect to each Note Receivable sold or contributed
to the Buyer on such Transfer Date:


 


(a)          the
Note Receivable is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Note
Receivable to pay the stated amount of the Note Receivable and interest thereon, and the related Note Receivable Documents are
enforceable against such Obligor in accordance with their respective terms;


 


(b)          the
Note Receivable was originated, documented and closed, or was acquired, by the Originator in the ordinary course of business and
consistent with past practices and not inconsistent with the terms of the Required Procedures in effect at the time of such origination
or acquisition and arose in the ordinary course of the Originator’s business from the lending of money to the related Obligor;


 


(c)          the
Note Receivable and the Note Receivable Documents related thereto are “general intangibles,” “instruments,”
“payment intangibles,” “accounts,” or “chattel paper” within the meaning of the UCC of all
jurisdictions that govern the perfection of the Transfer thereof to the Buyer;


 


(d)          all
material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority
required to be obtained, effected or given in connection with the making of such Note Receivable have been duly obtained, effected
or given and are in full force and effect;


 


(e)          any
applicable taxes in connection with the transfer of such Note Receivable have been paid;


 



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(f)          the
Note Receivable, together with the related Note Receivable Documents, was originated in accordance with, and does not contravene
in any material respect any Applicable Laws (including, without limitation, laws, rules and regulations relating to usury, predatory
lending, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy);


 


(g)          the
Note Receivable, together with the related Note Receivable Documents, is fully assignable without consent of the applicable Obligor
or any agent with respect to the Note Receivable (except for such consents which have been obtained prior to the related Transfer
Date);


 


(h)          all
filings and other actions required to perfect the Transfer to the Buyer hereunder of the Originator’s interest in the Note
Receivable and the Note Receivable Documents have been made or taken;


 


(i)      
    no right of rescission, set off, counterclaim, defense or other material dispute has been asserted
with respect to such Note Receivable;


 


(j)     
     such Note Receivable meets all criteria to be an Eligible Note Receivable under the Loan
Agreement; and


 


(k)          all
information on the Note Receivable Schedule delivered to the Collateral Custodian and the Agent with respect to such Note Receivable
is true and correct.


 


It is understood and agreed that the representations
and warranties set forth herein shall survive delivery of the related Note Receivable Documents to the Buyer and/or the Collateral
Custodian, and shall inure to the benefit of the Buyer, the Agent and Lender Group, as applicable, and their successors and assigns,
notwithstanding any restrictive or qualified endorsement or assignment.


 


Section 3.04         Notice
of Breach of Representations and Warranties. It is understood and agreed that the representations and warranties set forth
in Section 3.03 shall survive the conveyance of the Purchased Assets to the Buyer and the grant by the Buyer of a security
interest in the Collateral to the Agent, as applicable. Upon discovery by the Servicer, the Originator, the Buyer, or the Agent
of a breach of any of such representations and warranties or the representations and warranties of the Originator set forth in
Section 3.02 or 3.03, which breach materially and adversely affects the value or enforceability of all or any portion
of the Purchased Assets or the interests of the Lender Group in all or any portion of the Collateral, the party discovering such
breach shall give prompt written notice to the others, and the Originator shall take all such actions required pursuant to Section
3.05.


 


Section 3.05         Repurchase
or Substitutions of Ineligible Notes Receivable.


 



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(a)          If
any Transferred Note Receivable becomes or turns out to be an Ineligible Note Receivable in whole or in part (including pursuant
to Section 2.05), then Originator, with the consent of the Buyer, may repurchase from Buyer such Transferred Note Receivable
and the related Purchased Assets either by (i) paying to Buyer an amount equal to the Repurchase Price, which amount shall be paid
directly to the Collection Account as Principal Collections and Interest Collections as applicable, or (ii) transferring to Buyer
in substitution for such Ineligible Note Receivable one or more Eligible Notes Receivable (each, a “Substitute Note Receivable”);
provided, that, with respect to any Transferred Note Receivable that becomes an Ineligible Note Receivable in whole or in
part as a result of failing to satisfy the conditions in clause (f) or clause (o) of the definition of “Eligible
Notes Receivable” at any time after the applicable Transfer Date of such Transferred Note Receivable (such an occurrence,
a “Credit Event”), the Originator may repurchase or substitute such Transferred Note Receivable pursuant to
this Section 3.05(a) only for so long as the aggregate principal amount of such Transferred Note Receivable, plus the aggregate
principal amount of all other Transferred Note Receivables with respect to which a Credit Event has occurred that have been purchased
pursuant to this Section 3.05(a) during the term of this Agreement does not exceed the Repurchase Cap, calculated as of
the date of such repurchase; provided, further, that the following conditions are met as of the date of such substitution:


 


(i)          each
Substitute Note Receivable is an Eligible Note Receivable on the date of substitution;


 


(ii)         the
aggregate Outstanding Loan Balance of such Substitute Notes Receivable shall be equal to or greater than the aggregate Outstanding
Loan Balance of the Replaced Notes Receivable;


 


(iii)        as
of the date of substitution of any such Substitute Note Receivable, all representations and warranties contained in Section
3.03 shall be true and correct with respect to such Substitute Notes Receivable;


 


(iv)        the
substitution of any Substitute Notes Receivable does not cause a Default or an Event of Default to occur;


 


(v)         the
selection of such Substitute Notes Receivable from the Originator’s portfolio does not cause the portfolio of Transferred
Notes Receivable held by the Buyer, as opposed to Horizon or any other Subsidiary of Horizon, to have been selected in a manner
adverse to the Buyer or the Lender Group;


 


(vi)        all
actions or additional actions (if any) necessary to perfect the assignment of such Substitute Notes Receivable and Related Property
to the Buyer and the grant by the Buyer of a security interest therein to the Agent shall have been taken as of or prior to the
date of substitution;


 



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(vii)       all
actions required pursuant to Section 2.05 shall have been taken within the time period therein required; and


 


(viii)      the
Originator shall deliver to the Buyer and the Agent on the date of such substitution (i) a certificate of a Responsible Officer
certifying that each of the foregoing is true and correct as of such date and (ii) an Overcollateralization Ratio Certificate (including
a calculation of the Overcollateralization Ratio after giving effect to such substitution).


 


(b)          Except
as provided in clause (c) of this Section 3.05, if a Transferred Note Receivable is discovered to have been an Ineligible
Note Receivable due to a breach of any representation or warranty set forth in Section 3.03 with respect to such Transferred
Note Receivable (or the Related Property and other related collateral constituting part of the Purchased Assets related to such
Transferred Note Receivable), then no later than thirty (30) days after the earlier of (x) knowledge of such breach on the part
of the Originator or the Servicer and (y) receipt by the Originator or the Servicer of written notice thereof given by the
Buyer or the Agent, the Originator shall repurchase such Ineligible Note Receivable to which such breach relates in accordance
with clause (d) of this Section 3.05; provided, that no such repurchase shall be required to be made with
respect to any Ineligible Note Receivable (and such Transferred Note Receivable shall cease to be an Ineligible Note Receivable)
if, on or before the expiration of such thirty (30) day period, the representations and warranties in Section 3.03 with
respect to such Ineligible Note Receivable shall be made true and correct in all material respects with respect to such Ineligible
Note Receivable as of such date or such Ineligible Note Receivable is replaced with a Substitute Note Receivable in accordance
with Section 3.05(a).


 


(c)          Notwithstanding
anything contained in this Section 3.05 to the contrary, in the event that (i) the applicable Transferred Note Receivable
is identified for repurchase pursuant to Section 2.05, or (ii) a Transferred Note Receivable is determined to be an Ineligible
Note Receivable by reason of a breach of any representation and warranty set forth in Section 3.03 as a result of a failure
of such Transferred Note Receivable to be (A) conveyed to the Buyer free and clear of any Lien of any Person claiming through or
under the Originator or (B) in compliance, in all material respects, with all Applicable Law, then within one (1) Business Day
after the earlier to occur of the discovery of such breach by the Buyer or receipt by the Buyer of written notice of such breach
given by the Agent, the Originator shall repurchase such Ineligible Note Receivable in accordance with clause (d) of this
Section 3.05.


 



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(d)          The
Originator shall deposit the Repurchase Price, in immediately available funds, for any Ineligible Note Receivable required to be
repurchased hereunder into the Collection Account or the Agent’s Account on the date provided in Section 3.05(b) or
Section 3.05(c), as applicable. On and after the date of payment of the Repurchase Price, the applicable Ineligible Note
Receivable and the Related Property and other related collateral constituting part of the Purchased Assets with respect to such
Ineligible Note Receivable shall cease being included in the Collateral. Upon each such repayment, the Agent, on behalf of the
Lenders, shall automatically and without further action be deemed to return to the Buyer, and the Buyer shall automatically and
without further action be deemed to return to the Originator, all the right, title and interest of the Agent on behalf of the Lenders
(and all right, title and interest of the Buyer) in, to and under such Ineligible Notes Receivable and all monies due or to become
due with respect thereto, all proceeds thereof and all rights to any related Related Property, and all proceeds and products of
the foregoing. The Buyer and the Agent shall, at the sole expense of the Buyer, execute such documents and instruments of transfer
as may be prepared by the Buyer and the Originator (or the Servicer on their behalf) and take such other actions as shall reasonably
be requested by the Buyer to effect the transfer of such Ineligible Notes Receivable pursuant to this Section 3.05.


 


ARTICLE
IV



ADMINISTRATION AND SERVICING OF TRANSFERRED NOTES RECEIVABLE


 


Section 4.01         Appointment
of the Servicer.


 


(a)          The
Buyer hereby appoints Horizon Management as the Servicer hereunder to service the Transferred Notes Receivable and enforce its
respective rights and interests in and under each Transferred Note Receivable in accordance with the terms and conditions of this
Article IV and to serve in such capacity until the termination of its responsibilities pursuant to Section 9.01(b).
Horizon Management hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth
herein. The Servicer and the Buyer hereby acknowledge that the Agent and the Lender Group are third party beneficiaries of the
obligations undertaken by the Servicer hereunder.


 


(b)          The
Buyer hereby appoints U.S. Bank as the Back-up Servicer and to serve in such capacity pursuant to the terms of this Agreement.
U.S. Bank hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein.
The Back-up Servicer and the Buyer hereby acknowledge that the Agent and the Lender Group are third party beneficiaries of the
obligations undertaken by the Back-up Servicer hereunder and under the Back-up Servicer Engagement Letter.


 


Section 4.02         Duties
and Responsibilities of the Servicer.


 


(a)          The
Servicer shall conduct the servicing, administration and collection of the Transferred Notes Receivable and shall take, or cause
to be taken, all such actions as may be necessary or advisable to service, administer and collect Transferred Notes Receivable
from time to time on behalf of the Buyer and as the Buyer’s agent in accordance with the Accepted Servicing Practices. The
Back-up Servicer shall conduct the following activities:


 



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(i)          on
a monthly basis, the Back-up Servicer shall accept the delivery from the Servicer of the electronic transmission sent by the Servicer
pursuant to Section 4.02(b);


 


(ii)         the
Back-up Servicer will ensure that such transmission is readable and will retain such information until it receives the next transmission
from the Servicer.


 


The Back-up Servicer shall not be required
to review the information set forth in any such electronic transmission.


 


The Back-up Servicer acknowledges that prior
to the date hereof it performed a review of the Servicer and its servicing practices.


 


(b)          The
duties of the Servicer, as the Buyer’s agent, shall include, without limitation:


 


(i)          preparing
and submitting of claims to, and post-billing liaison with, Obligors on Transferred Notes Receivable;


 


(ii)         maintaining
all necessary Servicing Records with respect to the Transferred Notes Receivable and providing such reports to the Buyer, the Agent
and the Lender Group in respect of the servicing of the Transferred Notes Receivable (including information relating to its performance
under this Agreement) as may be required hereunder, under the Loan Agreement, or as the Buyer or the Agent may reasonably request;


 


(iii)        maintaining
and implementing administrative and operating procedures (including, without limitation, an ability to re-create Servicing Records
evidencing the Transferred Notes Receivable in the event of the destruction of the originals thereof) and keeping and maintaining
all documents, books, records and other information reasonably necessary or advisable for the collection of the Transferred Notes
Receivable (including, without limitation, records adequate to permit the identification of each new Transferred Note Receivable
and all Collections of and adjustments to each existing Transferred Note Receivable); provided, that any successor Servicer
shall only be required to re-create the Servicing Records of each prior Servicer to the extent such records have been delivered
to it in a format reasonably acceptable to such successor Servicer;


 



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(iv)        promptly
delivering to the Buyer, the Collateral Custodian, the Agent, and the Lender Group, from time to time, such information and Servicing
Records (including information relating to its performance under this Agreement) as the Buyer, the Collateral Custodian, or the
Agent may from time to time reasonably request;


 


(v)         identifying
each Transferred Note Receivable clearly and unambiguously in its Servicing Records to reflect that such Transferred Note Receivable
is owned by the Buyer and pledged to the Agent, for the benefit of the Lender Group;


 


(vi)        complying
in all material respects with the Required Procedures in regard to each Transferred Note Receivable;


 


(vii)       complying
in all material respects with all Applicable Laws with respect to it, its business and properties and all Transferred Notes Receivable
and Collections with respect thereto;


 


(viii)      preserving
and maintaining its existence, rights, licenses, franchises and privileges as a limited liability company in the jurisdiction of
its organization, and qualifying and remaining qualified in good standing as a foreign limited liability company and qualifying
to and remaining authorized and licensed to perform obligations as Servicer (including enforcement of collection of Transferred
Notes Receivable on behalf of the Buyer and the Agent) in each jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualification would materially adversely affect (A) the rights or interests of the Buyer, the
Agent, and the Lender Group in the Transferred Notes Receivable, (B) the collectability of any Transferred Note Receivable, or
(C) the ability of the Servicer to perform its obligations hereunder;


 


(ix)         notifying
the Buyer and the Agent of any material legal action, suit, proceeding, dispute, offset deduction, defense or counterclaim that
(1) is or is threatened to be asserted by an Obligor with respect to any Transferred Note Receivable; or (2) could reasonably
be expected to have a Material Adverse Effect;


 


(x)          delivering
to the Back-up Servicer on each Record Date an electronic transmission (in a format acceptable to the Servicer and the Back-up
Servicer) containing the information that the Servicer used to prepare the Servicer Report for such Record Date together with any
additional information reasonable requested by the Back-up Servicer; and


 



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(c)          The
Buyer and Servicer hereby acknowledge that none of the Agent or the Lender Group shall have any obligation or liability with respect
to the servicing of any Transferred Notes Receivable, nor shall any of them be obligated to perform any of the obligations of the
Servicer hereunder.


 


Section 4.03         Authorization
of the Servicer.


 


(a)          Each
of the Buyer and the Agent, on behalf of the Lender Group, hereby authorizes the Servicer (including any successor thereto) to
take any and all commercially reasonable steps in its name and on its behalf necessary or desirable and not inconsistent with the
pledge of the Transferred Notes Receivable pursuant to the Loan Agreement, in the determination of the Servicer, to collect all
amounts due under any and all Transferred Notes Receivable, including, without limitation, endorsing any of their names on checks
and other instruments representing Collections, executing and delivering any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge, and all other comparable instruments, with respect to the Transferred Notes Receivable
and, after the delinquency of any Transferred Notes Receivable and to the extent permitted under and in compliance with Applicable
Law, to commence proceedings with respect to enforcing payment thereof, to the same extent as the Originator could have done if
it had continued to own such Notes Receivable. The Buyer shall furnish the Servicer (and any successors thereto) with any powers
of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties
hereunder, and shall cooperate with the Servicer to the fullest extent in order to ensure the collectability of the Transferred
Notes Receivable. In no event shall the Servicer be entitled to make the Buyer, the Agent or any member of the Lender Group a party
to any litigation without such party’s express prior written consent, or to make the Buyer a party to any litigation (other
than any routine foreclosure or similar collection procedure) without the Agent’s consent.


 


(b)          Upon
an Event of Default that has occurred and is continuing, at the Agent’s direction, the Servicer shall take such action as
the Agent may deem necessary or advisable to enforce collection of the Transferred Notes Receivable; provided, that the
Agent may, at any time upon an Event of Default that has occurred and is continuing, notify any Obligor with respect to any Transferred
Notes Receivable of the pledge of such Transferred Notes Receivable to the Agent and direct that payments of all amounts due or
to become due to the Buyer thereunder be made directly to the Agent or any servicer, collection agent or lock-box or other account
designated by the Agent and, upon such notification and at the expense of the Buyer, the Agent may enforce collection of any such
Transferred Notes Receivable and adjust, settle or compromise the amount or payment thereof. The Agent shall give written notice
to the Back-up Servicer or any other successor Servicer of the Agent’s actions or directions pursuant to this Section
4.03(b).


 


Section 4.04         Collection
of Payments.


 


(a)          Collection
Efforts, Modification of Transferred Notes Receivable. The Servicer will take commercially reasonable efforts to collect all
payments called for under the terms and provisions of the Transferred Notes Receivable as and when the same become due, and will
follow those collection procedures as are consistent with Accepted Servicing Practices. The Servicer may not waive, modify or otherwise
vary any provision of a Transferred Note Receivable, except as may be in accordance with the Required Procedures or with the consent
of Agent. Notwithstanding anything to the contrary contained herein, the Servicer will not take any action with respect to any
Transferred Note Receivable that is prohibited under the Loan Agreement.


 



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(b)          Taxes
and other Amounts. To the extent provided for in any Transferred Note Receivable, the Servicer will use its best efforts to
collect all payments with respect to amounts due for taxes, assessments and insurance premiums relating to such Transferred Note
Receivable or the Related Property and remit such amounts to the appropriate Governmental Authority or insurer on or prior to the
date such payments are due.


 


(c)          Payments
to Lockbox Account. On or before the Transfer Date with respect to each Transferred Note Receivable, the Servicer shall have
instructed all Obligors to make all payments in respect of all Transferred Notes Receivable included in the Collateral directly
to the Lockbox Account. Servicer shall also be responsible for compliance with all other requirements of the cash management provisions
in Section 6.18 of the Loan Agreement.


 


(d)          Adjustments.
If (i) the Servicer makes a deposit into the Lockbox Account in respect of a Collection of a Transferred Note Receivable included
in the Collateral and such Collection was received by the Servicer in the form of a check that is not honored for any reason or
(ii) the Servicer makes a mistake with respect to the amount of any Collection and deposits an amount that is less than or more
than the actual amount of such Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Lockbox
Account to reflect such dishonored check or mistake. Any Scheduled Payment in respect of which a dishonored check is received shall
be deemed not to have been paid.


 


(e)          Released
Amounts. The Agent hereby agrees that it shall release to the Buyer from the Collateral, and the Buyer hereby agrees to release
to the Originator, an amount equal to the Released Amounts promptly upon receipt of an Officer’s Certificate of the initial
Servicer (or the Originator if the initial Servicer is no longer the Servicer) setting forth the calculation thereof, which release
shall be automatic and shall require no further act by the Agent; provided, that, the Agent and the Buyer, as applicable,
shall execute and deliver such instruments of release and assignment, or otherwise confirm the foregoing release, as may reasonably
be requested by the Servicer on behalf of the Buyer or the Originator, as applicable, in writing. Upon such release, such Released
Amounts shall not constitute and shall not be included in the Collateral. Immediately upon the release to the Buyer by the Agent
of the Released Amounts, the Buyer hereby irrevocably agrees to release to the Originator such Released Amounts, which release
shall be automatic and shall require no further act by the Buyer; provided, that the Buyer shall execute and deliver such
instruments of release and assignment, or otherwise confirming the foregoing release of any Released Amounts, as may be reasonably
requested by the Originator.


 



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Section 4.05         Realization
Upon Defaulted Notes Receivable.


 


(a)          The
Servicer will use its commercially reasonable efforts to repossess or otherwise comparably convert the ownership of any Related
Property with respect to a Defaulted Note Receivable and will act as sales and processing agent for Related Property that it repossesses.
The Servicer will follow the ordinary course of business and consistent with past practices and not inconsistent with the terms
of the Required Procedures in order to realize upon such Related Property. Without limiting the foregoing, the Servicer may sell
any such Related Property with respect to any Defaulted Note Receivable to the Servicer or its Affiliates for a purchase price
equal to the then fair market value thereof (including, if applicable, the fair market value of any Warrant Assets included in
such sale); any such sale to be evidenced by a certificate of a Responsible Officer of the Servicer delivered to the Agent identifying
the Defaulted Note Receivable and the Related Property, setting forth the sale price of the Related Property and certifying that
such sale price is the fair market value of such Related Property; provided, that the Servicer, prior to selling
any Related Property with respect to a Defaulted Note Receivable to the Servicer or its Affiliates in accordance with this Section
4.05, the Servicer shall obtain the prior written consent of the Agent, which such consent shall not be unreasonably withheld
or delayed. In any case in which any such Related Property has suffered damage, the Servicer will not expend funds in connection
with any repair or toward the repossession of such Related Property unless it reasonably determines that such repair and/or repossession
will increase the Recoveries by an amount greater than the amount of such expenses. The Servicer will remit to the Collection Account
the Recoveries received in connection with the sale or disposition of Related Property with respect to a Defaulted Note Receivable.


 


Section 4.06         Maintenance
of Insurance Policies.


 


(a)          The
Servicer is hereby authorized and instructed to require that each Obligor with respect to a Transferred Note Receivable maintain
an Insurance Policy with respect to each Transferred Note Receivable and the Related Property, to the extent consistent with the
ordinary course of business and consistent with past practices and not inconsistent with the terms of the Required Procedures in
effect at the time. In connection with its activities as Servicer, the Servicer agrees to present, on behalf of the Buyer and the
Agent, on behalf of the Lender Group, with respect to the respective interests, claims to the insurer under each Insurance Policy
and any such liability policy, and to settle, adjust and compromise such claims, in each case, consistent with the terms of each
related Transferred Note Receivable.


 


Section 4.07         Representations
and Warranties of the Servicer and the Back-up Servicer.


 


(a)          The
Servicer hereby represents and warrants as follows:


 


(i)          Organization
and Good Standing; Power and Authority. The Servicer is a limited liability company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with all requisite limited liability company power and authority
to own its properties and to conduct its business as presently conducted and to enter into and perform its obligations pursuant
to this Agreement and each other Loan Document to which it is a party.


 



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(ii)         Due
Qualification. The Servicer is qualified to do business as a limited liability company, is in good standing, and has obtained
all licenses and approvals as required under the laws of all jurisdictions in which the ownership or lease of its property and
or the conduct of its business or the performance of its obligations pursuant to this Agreement requires such qualification, standing,
license or approval, except where the failure to qualify or obtain such license or approval could not be reasonably expected to
have a Material Adverse Effect.


 


(iii)        Due
Authorization. The Servicer has the full power and authority to enter into and consummate all transactions contemplated by
the Loan Documents to be consummated by it, and has duly authorized the execution, delivery and performance of each Loan Document
to which it is a party.


 


(iv)        No
Violation. The consummation of the transactions contemplated by, and the fulfillment of the terms of, this Agreement by the
Servicer (with or without notice or lapse of time) will not (i) conflict with, result in any breach of any of the terms or provisions
of, or constitute a default under, the governing documents of the Servicer, or any material contractual obligation to which the
Servicer is a party or by which it or any of its property is bound, (ii) result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such contractual obligation (other than this Agreement), or (iii) violate
in any material respect any Applicable Law.


 


(v)         No
Consent. No consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any
Governmental Authority having jurisdiction over the Servicer or any of its properties is required to be obtained by or with respect
to the Servicer in order for the Servicer to enter into any Loan Document to which it is a party or perform its obligations hereunder.


 


(vi)        Binding
Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer, enforceable against the Servicer
in accordance with its terms, except as such enforceability may be limited by (i) applicable Bankruptcy Laws and (ii) general principles
of equity (whether considered in a suit at law or in equity).


 



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(vii)       No
Proceedings. There are no proceedings or investigations (formal or informal) pending or threatened against the Servicer, before
any Governmental Authority (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would be expected to have a Material
Adverse Effect.


 


(viii)      Reports
Accurate. All Servicer Certificates, information, exhibits, financial statements, documents, books, Servicing Records or reports
furnished or to be furnished by the Servicer to the Agent, any member of the Lender Group or any other party in connection with
any Loan Document are and will be accurate, true and correct in all material respects.


 


(ix)         No
Servicer Default. No event has occurred and is continuing and no condition exists, or would result from a Loan or from the
application of the proceeds therefrom, which constitutes or could reasonably be expected to constitute a Servicer Default.


 


(x)          Material
Adverse Change. Since December 31, 2011, there has been no Material Adverse Change with respect to the initial Servicer.


 


(xi)         Required
Procedures. It has at all times, since the adoption of the Required Procedures, complied with the Required Procedures with
respect to each Transferred Note Receivable in all material respects.


 


(xii)        Solvency.
The Servicer is Solvent, is able to pay its debts as they become due and has capital sufficient to carry on its business and its
obligations under each Loan Document to which it is a party; it will not be rendered insolvent by the execution and delivery of
this Agreement or by the performance of its obligations under each Loan Document to which it is a party; no petition of bankruptcy
(or similar Bankruptcy Proceeding) has been filed by or against the Servicer prior to the date hereof.


 


(xiii)       Servicing
Fee. The Servicer acknowledges and agrees that the Servicing Fee represents reasonable compensation for the performance of
the servicing duties hereunder and that the entire Servicing Fee shall be treated by the Servicer, for accounting purposes, as
compensation for the servicing and administration of the Transferred Notes Receivable pursuant to this Agreement.


 


(b)          The
Back-up Servicer hereby represents and warrants as follows:


 



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(i)          Organization
and Good Standing; Power and Authority. The Back-up Servicer is a national banking association duly organized and validly existing
under the laws of the jurisdiction of its organization with all requisite power and authority to own its properties and to conduct
its business as presently conducted and to enter into and perform its obligations pursuant to this Agreement and each other Loan
Document to which it is a party.


 


(ii)         Due
Qualification. The Back-up Servicer is qualified to do business as a national banking association, and has obtained all licenses
and approvals as required under the laws of all jurisdictions in which the ownership or lease of its property and or the conduct
of its business or the performance of its obligations pursuant to this Agreement requires such qualification, standing, license
or approval.


 


(iii)        Due
Authorization. The Back-up Servicer has the full power and authority to enter into and consummate all transactions contemplated
by the Loan Documents to be consummated by it, and has duly authorized the execution, delivery and performance of each Loan Document
to which it is a party.


 


(iv)        No
Violation. The consummation of the transactions contemplated by, and the fulfillment of the terms of, this Agreement by the
Back-up Servicer (with or without notice or lapse of time) will not (i) conflict with, result in any breach of any of the terms
or provisions of, or constitute a default under, the governing documents of the Back-up Servicer, or any material contractual obligation
to which the Back-up Servicer is a party or by which it or any of its property is bound, (ii) result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such contractual obligation (other than this Agreement), or
(iii) violate in any material respect any Applicable Law.


 


(v)         No
Consent. No consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any
Governmental Authority having jurisdiction over the Back-up Servicer or any of its properties is required to be obtained by or
with respect to the Back-up Servicer in order for the Back-up Servicer to enter into any Loan Document to which it is a party or
perform its obligations hereunder.


 


(vi)        Binding
Obligation. This Agreement constitutes a legal, valid and binding obligation of the Back-up Servicer, enforceable against the
Back-up Servicer in accordance with its terms, except as such enforceability may be limited by (i) applicable Bankruptcy Laws and
(ii) general principles of equity (whether considered in a suit at law or in equity).


 



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(vii)       No
Proceedings. There are no proceedings or investigations (formal or informal) pending or threatened against the Back-up Servicer,
before any Governmental Authority (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that would be expected to have
a Material Adverse Effect.


 


(viii)      Solvency.
The Back-up Servicer has capital sufficient to carry on its business and its obligations under each Loan Document to which it is
a party; it will not be rendered insolvent by the execution and delivery of this Agreement or by the performance of its obligations
under each Loan Document to which it is a party; no petition of bankruptcy (or similar Bankruptcy Proceeding) has been filed by
or against the Back-up Servicer prior to the date hereof.


 


Section 4.08         Covenants
of the Servicer.


 


The Servicer hereby covenants that:


 


(a)          Compliance
with Law. The Servicer will comply in all material respects with all Applicable Laws, including those with respect to the Transferred
Notes Receivable, the Related Property and Note Receivable Documents or any part thereof.


 


(b)          Preservation
of Corporate Existence. The Servicer will preserve and maintain its limited liability company existence, rights, franchises
and privileges in the jurisdiction of its formation, and qualify and remain qualified in good standing as a foreign limited liability
company in each jurisdiction where the failure to maintain such existence, rights, franchises, privileges and qualification could
reasonably be expected to have a Material Adverse Effect.


 


(c)          Obligations
with Respect to Transferred Notes Receivable. The Servicer will duly fulfill and comply with all obligations on the part of
the Buyer to be fulfilled or complied with under or in connection with each Transferred Note Receivable under this Agreement, the
Loan Agreement or any other Loan Document and will do nothing to impair the rights of the Buyer or the Agent, on behalf of Lender
Group, in, to and under the Collateral.


 


(d)          Preservation
of Security Interest. The Buyer or the initial Servicer on behalf of the Buyer will execute and file (or cause the execution
and filing of) such financing and continuation statements and any other documents and take such other actions that may be required
by any law or regulation of any Governmental Authority to preserve and protect fully the interest of the Agent, on behalf of Lender
Group, in, to and under the Collateral.


 



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(e)          Change
of Name or Location; Records. The initial Servicer (i) shall not change its name, move the location of its principal executive
office or change its jurisdiction of formation, without thirty (30) days’ prior written notice to the Buyer and the Agent,
and (ii) shall not move, or consent to the Collateral Custodian moving, the Note Receivable Documents related to the Transferred
Notes Receivable, without forty-five (45) days’ prior written notice to the Buyer and the Agent, and (iii) will promptly
take all actions required of each relevant jurisdiction in order to continue the first priority perfected security interest of
the Agent, on behalf of Lender Group, in all Collateral, and also shall make delivery of an Opinion of Counsel.


 


(f)          Required
Procedures. The initial Servicer will comply in all material respects with the Required Procedures in regard to each Transferred
Note Receivable and the Related Property included in the Collateral.


 


(g)          Notice
of Certain Events. The Servicer will furnish to the Agent, as soon as possible and in any event within one (1) Business Day
after the Servicer shall have knowledge of the occurrence of any Default or Event of Default, a written statement setting forth
the details of such event and the action that the Servicer proposes to take with respect thereto.


 


(h)          Extension
or Amendment of Transferred Notes Receivable. The Servicer will not, except as otherwise permitted in Section 4.04(a),
extend, amend or otherwise modify the terms of any Transferred Note Receivable.


 


(i)      
    Other. The Servicer will furnish to the Agent and the Lender Group such other information,
documents records or reports respecting the Transferred Notes Receivable or the condition or operations, financial or
otherwise of the Servicer as the Buyer, the Agent or the Lender Group may from time to time reasonably request in order to
protect the respective interests of the Buyer, the Agent or the Lender Group under or as contemplated by this Agreement, the
Loan Agreement or any other Loan Document.


 


(j)     
     No Commingling. The Servicer will not commingle its assets with those of the Buyer.


 


(k)          Inspection
of Records. The Servicer will, at any time and from time to time during regular business hours, as requested by the Agent,
permit the Agent and the Lender Group, or their respective agents or representatives, (i) to examine and make copies of and take
abstracts from all books, records and documents (including computer tapes and disks) relating to the Transferred Notes Receivable
and the related Note Receivable Documents and (ii) to visit the offices and properties of the Buyer, the Originator or the Servicer,
as applicable, for the purpose of examining such materials described in clause (i), and to discuss matters relating to the
Transferred Notes Receivable or the Buyer’s, the Originator’s or the Servicer’s performance hereunder or under
the related Note Receivable Documents with such officers, directors, employees or independent public accountants of the Buyer,
the Originator or the Servicer, as applicable, as might reasonably be determined to have knowledge of such matters; provided
that (A) so long as no Default or Event of Default has occurred and is continuing, Servicer will not be charged for more than one
financial or collateral inspections, audits or appraisals during any calendar quarter and (B) so long as no Event of Default has
occurred and is continuing, none of Buyer, Originator nor Horizon Management will be charged for an aggregate amount in excess
of $25,000 for fees and charges pursuant to this Section 4.08(k) during any calendar year covering financial or collateral
inspections, audits or appraisals, whether pursuant to this Agreement or the Loan Agreement.


 



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(l)          Keeping
of Records. The Servicer will maintain and implement administrative and operating procedures (including, in the case of the
initial Servicer, an ability to recreate records evidencing Transferred Notes Receivable and the related Note Receivable Documents
in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, computer tapes, disks,
records and other information reasonably necessary or advisable for the collection of all Transferred Notes Receivable (including
records adequate to permit the daily identification of each new Transferred Note Receivable and all Collections of and adjustments
to each existing Transferred Note Receivable). The Servicer shall give the Agent (with a copy to the Collateral Custodian) prompt
notice of any material change in its administrative and operating procedures referred to in the previous sentence.


 


(m)         Compliance
with Transferred Notes Receivable. The Servicer will (i) at its own expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it under the Transferred Notes Receivable and the related Note
Receivable Documents; and (ii) in the case of the initial Servicer, timely and fully comply in all material respects with the Required
Procedures with respect to each Transferred Note Receivable and the related Note Receivable Documents.


 


(n)          Consolidation
or Merger of the Servicer. The initial Servicer shall not consolidate or merge with or into, or sell, lease or transfer all
or substantially all of its assets to, any other Person, unless, in the case of any such action (i) no Event of Default or Material
Adverse Effect would occur or be reasonably likely to occur as a result of such transaction, (ii) Agent provides its prior
written consent to such transaction and (iii) such Person executes and delivers to the Agent an agreement by which such Person
assumes the obligations of the Servicer hereunder and under the other Loan Documents to which it is a party, or confirms that such
obligations remain enforceable against it, together with such certificates and opinions of counsel as the Agent may reasonably
request.


 


(o)          Financial
Covenant. If the Servicer is Horizon Management, the Servicer shall be in compliance with the financial covenant set forth
in Section 7.16(c) of the Loan Agreement as of each date of measurement.


 


(p)          Deposit
of Collections. To the extent any Collections are deposited in any account other than the Lockbox Account or Collection Account,
the Servicer shall make commercially reasonable efforts to cause such monies to be transferred within three (3) Business Days to
the appropriate account.


 



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Section 4.09         The
Collateral Custodian.


 


(a)          Appointment;
Custodial Duties. The Buyer and the Agent each hereby appoints U.S. Bank to act as Collateral Custodian hereunder, for the
benefit of the Buyer, the Agent, and the Lender Group, as provided herein. U.S. Bank hereby accepts such appointment and agrees
to perform the duties and responsibilities with respect thereto set forth herein.


 


The Collateral Custodian shall take and retain
custody of the Note Receivable Documents delivered by the Buyer or on its behalf pursuant to Section 2.04 hereof in accordance
with the terms and conditions of this Agreement, all for the benefit of the Lender Group and subject to the Lien thereon in favor
of the Agent, on behalf of the Lender Group. Upon receipt of any such Note Receivable Documents, the Collateral Custodian shall
perform the review and certification functions with respect thereto specified in Section 2.05.


 


In taking and retaining custody of the Note
Receivable Documents, the Collateral Custodian shall be acting as the agent of the Agent, on behalf of the Lender Group; provided,
that the Collateral Custodian makes no representations as to the existence, perfection or priority of any Lien on the Note Receivable
Documents or the instruments therein; provided, further, that, the Collateral Custodian’s duties as agent shall
be limited to those expressly contemplated herein. All Note Receivable Documents shall be kept in fire-resistant vaults or cabinets
at the location of Collateral Custodian specified in Annex 1 hereto, or at such other office as shall be specified to the
Agent and the Buyer by the Collateral Custodian in a written notice delivered at least forty-five (45) days prior to such change.
All Note Receivable Documents shall be segregated with an appropriate identifying label and maintained in such a manner so as to
permit retrieval and access. All Note Receivable Documents shall be clearly segregated from any other documents or instruments
maintained by the Collateral Custodian. The Collateral Custodian shall clearly indicate that such Note Receivable Documents are
the sole property of the Buyer, subject to the security interest of the Agent, on behalf of the Lender Group. In performing its
duties, the Collateral Custodian shall use the same degree of care and attention as it employs with respect to similar loan files
that it holds as collateral custodian for others.


 


(b)          Concerning
the Collateral Custodian.


 


(i)          Except
for its willful misconduct, gross negligence or bad faith, the Collateral Custodian may conclusively rely on and shall be fully
protected in acting upon any certificate, instrument, opinion, notice, letter, telegram or other document delivered to it and that
in good faith it reasonably believes to be genuine and that has been signed by the proper party or parties. Except for its willful
misconduct, gross negligence or bad faith, the Collateral Custodian may rely conclusively on and shall be fully protected in acting
upon the written instructions of any designated officer of the Agent. In no event shall the Collateral Custodian be liable for
special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits).


 



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(ii)         The
Collateral Custodian may consult counsel satisfactory to it, and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.


 


(iii)        The
Collateral Custodian shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good
faith, or for any mistakes of fact or law, or for anything that it may do or refrain from doing in connection herewith except in
the case of its willful misconduct, gross negligence or bad faith.


 


(iv)        The
Collateral Custodian makes no warranty or representation and shall have no responsibility (except as expressly set forth in this
Agreement) as to the content, enforceability, completeness, validity, sufficiency, value, genuineness, ownership or transferability
of the Notes Receivable or the Note Receivable Documents, and will not be required to and will not make any representations as
to the validity or value of any of the Notes Receivable. The Collateral Custodian shall not be obligated to take any legal action
hereunder that might in its judgment involve any expense or liability unless it has been furnished with an indemnity reasonably
satisfactory to it.


 


(v)         The
Collateral Custodian shall have no duties or responsibilities except such duties and responsibilities as are specifically set forth
in this Agreement and no covenants or obligations shall be implied in this Agreement against the Collateral Custodian.


 


(vi)        The
Collateral Custodian shall not be required to expend or risk its own funds in the performance of its duties hereunder.


 


(vii)       It
is expressly agreed and acknowledged that the Collateral Custodian is not guaranteeing performance of or assuming any liability
for the obligations of the other parties hereto or any parties to the Transferred Notes Receivable.


 



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(viii)      The
parties hereto hereby acknowledge and agree that the Collateral Custodian’s execution of this Agreement shall constitute
the Collateral Custodian’s written acknowledgment and agreement that the Collateral Custodian is holding any Collateral it
receives that may be perfected by possession under the UCC on behalf of and for the benefit of the Agent and the Lender Group.


 


(ix)         The
Collateral Custodian shall be without liability to the parties hereto for any damage or loss resulting from or caused by events
or circumstances beyond the Collateral Custodian’s reasonable control including nationalization, expropriation, currency
restrictions, the interruption, disruption or suspension of the normal procedures and practices of any securities market, power,
mechanical, communications or other technological failures or interruptions, computer viruses or the like, fires, floods, earthquakes
or other natural disasters, civil and military disturbance, acts of war or terrorism, riots, revolution, acts of God, work stoppages,
strikes, national disasters of any kind, or other similar events or acts; errors by any party hereto in its instructions to the
Collateral Custodian; or changes in applicable law, regulation or orders.


 


(x)          The
Collateral Custodian may at any time resign under this Agreement by giving not less than sixty (60) days prior written notice thereof
to each party to this Agreement. Promptly after receipt of such notice and for so long as no Servicer Default has occurred and
is continuing, the Servicer shall select a successor Collateral Custodian with the written consent of the Agent. No resignation
or removal of the Collateral Custodian shall become effective until the acceptance of a successor collateral custodian hereunder;
provided, that, if a successor Collateral Custodian is not selected within such 60-day period, the Collateral Custodian
may petition a court of competent jurisdiction to select a successor Collateral Custodian.


 


(xi)         In
the event of a resignation or removal of the Collateral Custodian, the Collateral Custodian shall not be required to release possession
of the Required Asset Documents until all amounts owed to the Collateral Custodian pursuant to this Agreement have been paid to
the Collateral Custodian.


 


(c)          Release
for Servicing. From time to time and as appropriate for the enforcement or servicing of any of the Transferred Notes Receivable,
the Collateral Custodian is hereby authorized, upon receipt from the Servicer on behalf of the Buyer, of a written request for
release of documents and receipt in the form annexed hereto as Exhibit E, to release to the Servicer the related Note Receivable
Documents or the documents set forth in such request and receipt to the Servicer. All documents so released to the Servicer on
behalf of the Buyer shall be held by the Servicer in trust for the benefit of the Buyer, the Agent and the Lender Group, with respect
to their respective interests, in accordance with the terms of this Agreement. The Servicer, on behalf of the Buyer, shall return
to the Collateral Custodian the Note Receivable Documents or other such documents when the Servicer’s need therefor in connection
with such foreclosure or servicing no longer exists, unless the Transferred Note Receivable shall be liquidated, in which case,
upon receipt of an additional request for release of documents and receipt certifying such liquidation from the Servicer to the
Collateral Custodian in the form annexed hereto as Exhibit E, the Servicer’s request and receipt submitted pursuant
to the first sentence of this Section 4.09(c) shall be released by the Collateral Custodian to the Servicer. Notwithstanding
anything in this Section 4.09(c) to the contrary, in no event shall the Collateral Custodian release any Note Receivable
Documents or part thereof to the Servicer for any reason if the Collateral Custodian has received written notice from the Agent
that an Event of Default has occurred and is continuing and that the Agent is instructing the Collateral Custodian to cease releasing
documents to the Servicer.


 



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(d)          Release
for Payment. Upon receipt by the Collateral Custodian of the Servicer’s request for release of documents and receipt
in the form annexed hereto as Exhibit E (which certification shall include a statement to the effect that all amounts received
in connection with such payment or repurchase have been credited to the Collection Account), the Collateral Custodian shall promptly
release the related Note Receivable Documents to the Servicer, on behalf of the Buyer.


 


(e)          Collateral
Custodian Compensation. As compensation for its activities hereunder, the Collateral Custodian shall be entitled to a Collateral
Custodian Fee from the Servicer. To the extent that such Collateral Custodian Fee is not paid by the Servicer, the Collateral Custodian
shall be entitled to receive the unpaid balance of such Collateral Custodian Fee to the extent of funds available therefor pursuant
to the provisions of Section 2.3(f) of the Loan Agreement. The Collateral Custodian’s entitlement to receive the Collateral
Custodian Fee (other than due and unpaid Collateral Custodian Fees owed through such date) shall cease on the earlier to occur
of: (i) its removal as Collateral Custodian or (ii) the termination of this Agreement. The Buyer, to the extent of funds available
to pay such amounts pursuant to Section 2.3(f) of the Loan Agreement, shall indemnify, defend and hold harmless the Collateral
Custodian for and from any and all costs and expenses (including without limitation reasonable attorney’s fees and expenses),
and any and all losses, damages, claims and liabilities, that may arise, be brought against or incurred by the Collateral Custodian,
and any advances or disbursements made by the Collateral Custodian as a result of, relating to, or arising out of this Agreement,
or in the administration or performance of the Collateral Custodian’s duties hereunder, or the relationship among the Collateral
Custodian and the other parties hereto created hereby, other than such liabilities, losses, damages, claims, costs and expenses
arising out of the Collateral Custodian’s own gross negligence, bad faith, willful misconduct or reckless disregard of its
obligations hereunder.


 


(f)          Replacement
of the Collateral Custodian. So long as no Default or Event of Default shall have occurred and be continuing, the Collateral
Custodian may be replaced by the Buyer with the prior consent of the Agent, which consent shall not be unreasonably withheld; provided
that no such replacement shall be effective until a replacement Collateral Custodian has been appointed, has agreed to act as Collateral
Custodian hereunder and has received all Note Receivable Documents held by the previous Collateral Custodian.


 



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Section 4.10         Representations
and Warranties of the Collateral Custodian.


 


The Collateral Custodian represents and warrants
as follows:


 


(a)          Organization
and Good Standing. It is a national banking association duly organized and validly existing under the laws of the United States
with all requisite power and authority to own its properties and to conduct its business as presently conducted and to enter into
and perform its obligations pursuant to this Agreement.


 


(b)          Due
Qualification. It is duly qualified to do business as a national banking association and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such
qualification, licenses or approval except where the failure to so qualify or have such licenses or approvals has not had, and
would not be reasonably expected to have, a Material Adverse Effect.


 


(c)          Power
and Authority. It has the power and authority to execute and deliver this Agreement and each other Loan Document to which it
is a party and to carry out their respective terms. It has duly authorized the execution, delivery and performance of this Agreement
and each other Loan Document to which it is a party by all requisite action.


 


(d)          No
Violation. The consummation of the transactions contemplated by, and the fulfillment of the terms of, this Agreement and each
other Loan Document to which it is a party by it will not (i) conflict with, result in any breach of any of the terms or provisions
of, or constitute a default under, its articles of association, or any contractual obligation to which it is a party or by which
it or any of its property is bound, (ii) result in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any contractual obligation, or (iii) violate any Applicable Law.


 


(e)          No
Consents. No consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any
Governmental Authority having jurisdiction over it or any of its respective properties is required to be obtained in order for
it to enter into this Agreement or perform its obligations hereunder.


 


(f)          Binding
Obligation. This Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except
as such enforceability may be limited by (i) applicable Bankruptcy Laws and (ii) general principles of equity (whether considered
in a suit at law or in equity).


 



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(g)          No
Proceedings. There are no proceedings or investigations pending or, to the best of its knowledge, threatened, against it before
any Governmental Authority (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any determination or ruling that might (in its reasonable judgment)
have a Material Adverse Effect.


 


Section 4.11         Covenants
of the Collateral Custodian.


 


The Collateral Custodian hereby covenants
that:


 


(a)          Compliance
with Law. The Collateral Custodian will comply in all material respects with all Applicable Laws.


 


(b)          Preservation
of Existence. The Collateral Custodian will preserve and maintain its existence, rights, franchises and privileges as a national
banking association under the laws of the United States.


 


(c)          No
Bankruptcy Petition. Prior to the date that is one year and one day (or such longer preference period as shall then be in effect)
after the termination of this Agreement pursuant to Section 10.01, it will not institute against the Buyer, or join any
other Person in instituting against the Buyer, any Bankruptcy Proceedings or other similar proceedings under the laws of the United
States or any state of the United States. This Section 4.11(c) will survive the termination of this Agreement.


 


(d)          Note
Receivable Documents. The Collateral Custodian will not dispose of any documents constituting the Note Receivable Documents
in any manner that is inconsistent with the performance of its obligations as the Collateral Custodian pursuant to this Agreement
and will not dispose of any Transferred Note Receivable except as contemplated by this Agreement.


 


(e)          Location
of Note Receivable Documents. The Note Receivable Documents to be held by the Collateral Custodian pursuant to this Agreement
shall remain at all times in the possession of the Collateral Custodian at the address set forth on Annex 1 hereto unless
notice of a different address is given in accordance with the terms hereof.


 


(f)          No
Changes in Collateral Custodian Fee. The Collateral Custodian will not make any changes to the Collateral Custodian Fee set
forth in the Collateral Custodian Fee Letter without the prior written approval of the Agent.


 



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Section 4.12         The
Agent.


 


The Agent shall have no duties or responsibilities
under this Agreement except such duties and responsibilities as are specifically set forth in this Agreement, and no covenants
or obligations shall be implied in this Agreement against the Agent. Except for its willful misconduct, gross negligence or bad
faith, the Agent may conclusively rely on and shall be fully protected in acting upon any certificate, instrument, opinion, notice,
letter, telegram or other document delivered to it and that in good faith it reasonably believes to be genuine and that has been
signed by the proper party or parties. In no event shall the Agent be liable for special, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits). The Agent shall not be liable for any error of judgment, or
for any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or law, or for anything that it may
do or refrain from doing in connection herewith except in the case of its willful misconduct, gross negligence or bad faith.


 


Section 4.13         Payment
of Certain Expenses by the Servicer and the Buyer.


 


(a)          The
initial Servicer will be required to pay all fees and expenses incurred by it in connection with the transactions and activities
contemplated by this Agreement, including fees and disbursements of legal counsel and independent accountants, taxes imposed on
the initial Servicer, expenses incurred in connection with payments and reports pursuant to this Agreement, and all other fees
and expenses not expressly stated under this Agreement for the account of the Buyer, except that reasonable out-of-pocket fees
and expenses paid by the Servicer to Persons that are not Affiliates of the Servicer or the Buyer, for (i) accounting and auditing
functions with respect to the servicing of the Transferred Notes Receivable in accordance with this Agreement, and (ii) legal,
appraisal and other professional services in connection with work outs or the enforcement of Buyer's rights and remedies with respect
to the Transferred Notes Receivable in accordance with this Agreement, in each case to the extent not paid by an Obligor or recovered
from the collateral securing such Transferred Notes Receivable, shall be reimbursed to the Servicer by the Buyer. In consideration
for the payment by the Buyer of the Servicing Fee, the Servicer (so long as it is an Affiliate of the Originator or the Buyer)
will be required to pay all reasonable fees and expenses owing to any bank or trust company in connection with the maintenance
of the Lockbox Account and the Collection Account. The initial Servicer shall be required to pay such expenses for its own account
and shall not be entitled to any payment therefor other than the Servicing Fee.


 


(b)          The
Buyer will be required to pay all fees and expenses incurred by the Agent, the Lender Group, the Collateral Custodian or any Successor
Servicer in connection with the transactions and activities contemplated by this Agreement, including reasonable fees and disbursements
of legal counsel and independent accountants.


 


Section 4.14         Reports.


 


(a)          Servicer
Report. With respect to each Record Date and the related Collection Period, the Servicer will provide to the Buyer and the
Agent (and if so requested by Agent, with copies for each Lender), on the related Record Date, a monthly statement (a “Servicer
Report”), signed by a Responsible Officer of the Servicer and substantially in the form of Exhibit A.


 



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(b)          Servicer’s
Certificate. Together with each Servicer Report, the Servicer shall submit to the Buyer and the Agent (and if so requested
by Agent, with copies for each Lender) a certificate substantially in the form of Exhibit F (a “Servicer’s
Certificate”), signed by a Responsible Officer of the Servicer, which shall include a certification by such Responsible
Officer that no Default or Event of Default has occurred and is continuing.


 


(c)          Financial
Statements. The initial Servicer will submit to the Buyer and the Agent (and if so requested by Agent, with copies for each
Lender), within forty-five (45) days following the end of each of the Servicer’s fiscal quarters (other than the final fiscal
quarter), commencing for the first fiscal quarter ending after the Closing Date, unaudited financial statements of the Servicer
as of the end of each such fiscal quarter. The Servicer shall submit to the Buyer and the Agent (and if so requested by Agent,
with copies for each Lender), within one hundred fifty (150) days following the end of the Servicer’s fiscal year, commencing
with the fiscal year ending on December 31, 2012, annual audited financial statements as of the end of such fiscal year.


 


Section 4.15         Annual
Statement as to Compliance.


 


The Servicer will provide to the Buyer and
Agent (and if so requested by Agent, with copies for each Lender) within ninety (90) days following the end of each fiscal year
of the Servicer, commencing with the fiscal year ending on December 31, 2012, an annual report signed by a Responsible Officer
of the Servicer certifying that (a) a review of the activities of the Servicer, and the Servicer’s performance pursuant to
this Agreement, for the period ending on the last day of such fiscal year has been made under such Responsible Officer’s
supervision and (b) the Servicer has performed or has caused to be performed in all material respects all of its obligations under
this Agreement throughout such year and no Servicer Default has occurred and is continuing (or if a Servicer Default has occurred
and is continuing, specifying each such event, the nature and status thereof and the steps necessary to remedy such event, and,
if a Servicer Default occurred during such year and no notice thereof has been given to the Agent, specifying such Servicer Default
and the steps taken to remedy such event).


 


Section 4.16         Limitation
on Liability.


 


Except as provided herein, none of the directors
or officers or employees or agents of the Servicer shall be under any liability to the Buyer, the Agent, the other members of the
Lender Group or any other Person for any action taken or for refraining from the taking of any action as expressly provided for
in this Agreement; provided, that this provision shall not protect any such Person against any liability that would otherwise
be imposed by reason of its willful misconduct, bad faith or gross negligence in the performance of duties or by reason of its
failure to perform materially in accordance with this Agreement.


 



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The Servicer shall not be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to its duties to service the Transferred Notes Receivable
in accordance with this Agreement that in its reasonable opinion may involve it in any expense or liability. The Servicer may,
in its sole discretion, undertake any legal action relating to the servicing, collection or administration of Transferred Notes
Receivable and the Related Property that it may reasonably deem necessary or appropriate for the benefit of the Buyer and the Lender
Group with respect to this Agreement and the rights and duties of the parties hereto and the respective interests of the Buyer
and the Lender Group hereunder.


 


Section 4.17         The
Servicer Not to Resign.


 


The Servicer shall not resign from the obligations
and duties hereby imposed on such Person except upon such Person’s determination that (i) the performance of its duties hereunder
is or becomes impermissible under Applicable Law and (ii) there is no reasonable action that such Person could take to make
the performance of its duties hereunder permissible under Applicable Law. Any such determination permitting the resignation of
the Servicer shall be evidenced as to clause (i) above by an Opinion of Counsel to such effect delivered to the Buyer and
the Agent. No such resignation shall become effective until a successor shall have assumed the responsibilities and obligations
of such Person in accordance with the terms of the Loan Agreement and this Agreement.


 


Section 4.18         Access
to Certain Documentation and Information Regarding the Transferred Notes Receivable.


 


The Buyer and the Servicer shall provide to
the Agent from time to time hereafter, and so long as no Default or Event of Default has occurred and in continuing, upon reasonable
notice and during normal business hours, access to the Note Receivable Documents and all other documentation regarding the Transferred
Notes Receivable and the Related Property included as part of the Collateral, such access being afforded without charge. The Collateral
Custodian shall provide to the Agent from time to time hereafter access to the Note Receivable Documents and all other documentation
regarding the Transferred Notes Receivable and the Related Property included as part of the Collateral, such access being afforded
without charge but only (i) upon two (2) Business Days’ prior written request, (ii) during normal business hours and (iii)
subject to the Collateral Custodian’s normal security and confidentiality procedures. From and after the Closing Date and
periodically thereafter at the discretion of the Agent, the Agent or its agents may review the Buyer’s and the Servicer’s
collection and administration of the Transferred Notes Receivable in order to assess compliance by the Servicer with the Servicer’s
written policies and procedures, as well as with this Agreement and may conduct an audit of the Transferred Notes Receivable and
related Note Receivable Documents and records in conjunction with such a review. Such review shall be reasonable in scope and shall
be completed in a reasonable period of time. The Buyer shall bear the cost if such audits; provided that (A) so long as
no Default or Event of Default has occurred and is continuing, Buyer will not be charged for more than one financial or collateral
inspection, audit or appraisal during any calendar quarter and (B) so long as no Event of Default has occurred and is continuing,
none of Buyer, Originator nor Horizon Management will be charged for an aggregate amount in excess of $25,000 for fees and charges
pursuant to this Section 4.18 during any calendar year covering financial or collateral inspections, audits or appraisals,
whether pursuant to this Agreement or the Loan Agreement.


 



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Section 4.19         Identification
of Records.


 


The Servicer shall clearly and unambiguously
identify each Transferred Note Receivable that is part of the Collateral and the Related Property in its computer or other records
to reflect that the interest in such Transferred Notes Receivable and Related Property have been transferred to and are owned by
the Buyer and that the Agent, on behalf of the Lender Group, has the security interest and Lien therein granted by Buyer pursuant
to the Loan Agreement.


 


ARTICLE
V



ESTABLISHMENT OF lockbox account and collection account


 


Section 5.01         Lockbox
Account.


 


(a)          Establishment
of Lockbox Account. The Servicer, for the benefit of the Agent and the Lender Group, shall cause to be established and maintained
the Lockbox Account in accordance with the requirements of this Section 5.01.


 


(b)          Deposits
to Lockbox Account. The Servicer shall deposit or cause to be deposited all Collections on or in respect of each Transferred
Note Receivable collected on or after the related Transfer Date (to the extent received by the Servicer) within one (1) Business
Day after receipt thereof. The Servicer agrees that it will cause the Originator or other appropriate Person paying such amounts,
as the case may be, to remit directly to the Lockbox Account, within one (1) Business Day after receipt thereof, all such
amounts to the extent such amounts are received by such Person.


 


(c)          Lockbox
Acknowledgements and Agreements.


 


(i)          The
Buyer, the Servicer and the Agent each acknowledge and agree that the Lockbox Account may from time to time contain checks, instruments,
items and funds deposited or credited thereto, in respect of venture loan contracts that are Non-Horizon III Assets.


 


(ii)         The
Agent agrees to make commercially reasonable efforts to direct the Lockbox Bank to transmit funds credited to the Lockbox Account
that the Servicer (if Horizon Management, or an Affiliate thereof), or Horizon Management, acting in its individual capacity (if
not then the Servicer) has identified (by evidence sufficient in the reasonable judgment of the Agent) as constituting Non-Horizon
III Assets credited to and held in such Lockbox Account, in each case in accordance with the instructions of the Servicer (if Horizon
Management, or an Affiliate thereof) or Horizon Management, acting in its individual capacity, as applicable. The Borrower hereby
consents to such agreement by the Agent and to its acting in accordance with such agreement.


 



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Section 5.02         Collection
Account.


 


(a)          Establishment
of Collection Account. The Servicer, for the benefit of the Agent and the Lender Group, shall cause to be established and maintained
the Collection Account in accordance with the requirements of Section 6.18(c) of the Loan Agreement.


 


(b)          Transfers
to Collection Account. The Servicer shall transfer or cause to be swept and transferred all amounts in the Lockbox Account
into the Collection Account on a daily basis.


 


(c)          Collection
Account Instructions. Neither the Borrower nor the Servicer shall provide any instructions to the Collection Account Bank in
any manner or at any time; provided that, so long as no Default or Event of Default shall have occurred and be continuing,
on the same date that the Servicer shall provide the Servicer Report to the Borrower and the Agent pursuant to Section 4.14(a),
the Servicer shall provide instructions to the Collection Account Bank, with a copy to the Agent, directing transfers or withdrawals
from the Collection Account which such directions or instructions shall comply with the Loan Agreement (including Section 2.3(f)
thereof) except that the Servicer may direct the transfer of Non-Horizon III Assets to the parties entitled to receive such assets.
Servicer shall comply with the terms of the Collection Account Control Agreement.


 


(d)          Collection
Account Acknowledgements and Agreements.


 


(i)          The
Buyer, the Servicer and the Agent each acknowledge and agree that the Collection Account may from time to time contain funds transferred
thereto, in respect of venture loan contracts that are Non-Horizon III Assets.


 


(ii)         The
Agent agrees to make commercially reasonable efforts to direct the Collection Account Bank to transmit funds credited to the Collection
Account that the Servicer (if Horizon Management, or an Affiliate thereof), or Horizon Management, acting in its individual capacity
(if not then the Servicer) has identified (by evidence sufficient in the reasonable judgment of the Agent) as constituting Non-Horizon
III Assets credited to and held in such Collection Account, in each case in accordance with the instructions of the Servicer (if
Horizon Management, or an Affiliate thereof) or Horizon Management, acting in its individual capacity, as applicable, within three
(3) Business Days of receipt of such instructions. The Borrower hereby consents to such agreement by the Agent and to its acting
in accordance with such agreement.


 



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ARTICLE
VI



[RESERVED]


 


ARTICLE
VII



COVENANTS


 


Section 7.01         Financial
Covenants of Horizon and Horizon Management.


 


The financial covenants concerning Horizon
and Horizon Management set forth in Section 7.16 of the Loan Agreement are incorporated by reference herein as covenants of
Horizon and Horizon Management hereunder.


 


Section 7.02         Covenants
Regarding Purchased Assets.


 


(a)          Protect
Collateral. The Originator agrees that it shall not sell, assign, transfer, pledge or encumber in any other manner the Purchased
Assets (except for the assignment and pledge to the Buyer hereunder). The Originator shall warrant and defend the right and title
herein granted unto the Buyer in and to the Purchased Assets (and all right, title and interest represented by the Collateral)
against the claims and demands of all Persons whomsoever.


 


(b)          Further
Assurances. The Originator shall, at its own expense, promptly execute and deliver all further instruments (including financing
statements, stock powers, other powers and other instruments of transfer or control) requested by the Buyer or the Agent to perfect
and protect the transfer of the Purchased Assets to the Buyer or any security interest granted or purported to be granted hereby
or under the Loan Agreement, or to enable the Buyer and/or the Agent, as applicable, to exercise and enforce its rights and remedies
hereunder with respect to the Purchased Assets or under the Loan Agreement with respect to any Collateral, including the rights
and remedies under Section 9 of the Loan Agreement. In addition, the Originator shall, at its own expense, promptly take all further
action that the Buyer or the Agent may request in order to perfect and protect the transfer of the Purchased Assets to the Buyer
or any security interest granted or purported to be granted hereby or under the Loan Agreement, or to enable the Buyer and/or the
Agent, as applicable, to exercise and enforce its rights and remedies hereunder with respect to the Purchased Assets or under the
Loan Agreement with respect to any Collateral, including the rights and remedies under Section 9 of the Loan Agreement.


 



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(c)          Collections
Held in Trust. If the Originator receives any Collections, the Originator shall hold such Collections separate and apart from
its other property in trust for the Buyer and shall, within two (2) Business Days after receipt thereof, deposit such Collections
to the Collection Account.


 


(d)          Consents.
The Originator shall execute and deliver to the Buyer and/or the Agent, as applicable, upon request and at the time the Buyer and/or
the Agent, as applicable, exercises its remedies, any document deemed necessary by the Buyer and/or the Agent, as applicable, in
order to evidence the Originator’s consent to the Buyer and/or the Agent exercising their respective remedies hereunder with
respect to the Purchased Assets or under the Loan Agreement with respect to any Collateral, including the rights and remedies under
Section 9 of the Loan Agreement.


 


(e)          True
Sale. The Originator shall not account for or treat (whether in financial statements or otherwise) the transfers contemplated
by this Agreement, in any manner other than as a sale of the Transferred Notes Receivable and related Warrant Assets to the Buyer
constituting a “true sale” for bankruptcy purposes. The Buyer shall not account for or treat (whether in financial
statements or otherwise) the transfers contemplated by this Agreement, in any manner other than as a purchase of the Transferred
Notes Receivable and related Warrant Assets from Originator constituting a “true sale” for bankruptcy purposes.


 


ARTICLE
VIII



THE SERVICER


 


Section 8.01         Indemnification;
Third Party Claims.


 


(a)          The
Servicer (so long as it is an Affiliate of the Originator or the Buyer) shall indemnify the Originator, the Buyer, the Collateral
Custodian, the Back-up Servicer, the Agent and each other member of the Lender Group, their respective officers, directors, employees,
agents and “control persons,” as such term is used under the Securities Act and under the Exchange Act (each a “Servicer
Indemnified Party”) and hold harmless each of them against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of any of the Servicer’s representations and warranties and covenants
contained in this Agreement or in any way relating to the failure of the Servicer to perform its duties and service the Transferred
Notes Receivable in compliance with the terms of this Agreement except to the extent such loss arises out of such Servicer Indemnified
Party’s fraud, gross negligence or willful misconduct; provided, however, that if the Servicer is not liable pursuant
to the provisions of Section 8.01(b) hereof for its failure to perform its duties and service the Transferred Notes Receivable
in compliance with the terms of this Agreement, then the provisions of this Section 8.01 shall have no force and effect
with respect to such failure; provided, further that (i) no successor Servicer shall be liable for the breaches of
representations or warranties or covenants, or actions or omissions, of a predecessor Servicer; and (ii) the Servicer shall not
be so required to indemnify a Servicer Indemnified Party or to otherwise be liable to an Servicer Indemnified Party for any losses
in respect of the non-performance of the Transferred Notes Receivable, the creditworthiness of the Obligors with respect to the
Transferred Notes Receivable, changes in the market value of the Transferred Note Receivable or other similar investment risks
associated with the Transferred Note Receivable if the effect of such indemnity would be to provide credit recourse to the Originator
for the performance of the Transferred Note Receivable.


 



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(b)          None
of the Originator or the Servicer or any of their respective Affiliates, directors, officers, employees or agents shall be under
any liability to the Collateral Custodian, the Back-up Servicer, the Buyer, the Agent or any member of the Lender Group for any
action taken, or for refraining from the taking of any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Originator, the Servicer or any of their respective Affiliates,
directors, officers, employees, agents against the remedies provided herein for the breach of any warranties, representations or
covenants made herein, or against any expense or liability specifically required to be borne by such party without right of reimbursement
pursuant to the terms hereof, or against any expense or liability which would otherwise be imposed by reason of misconduct, bad
faith or negligence in the performance of the respective duties of the Servicer or the Originator, as the case may be. The Originator,
the Servicer and any of their respective Affiliates, directors, officers, employees, agents may rely in good faith on any document
of any kind which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunder.


 


(c)          Horizon
agrees to indemnify and hold harmless the Collateral Custodian, the Back-up Servicer, the Buyer, the Agent, and the Lender Group
(each a “Horizon Indemnified Party,” together with the Servicer Indemnified Parties, the “Indemnified
Parties”), from and against any loss, liability, expense, damage, claim or injury arising out of or based on (i) any
breach of any representation, warranty or covenant of Horizon in any Loan Document, including, without limitation, by reason of
any acts, omissions, or alleged acts or omissions arising out of activities of Horizon in its capacity as the Originator or the
Servicer, and (ii) any untrue statement by Horizon of any material fact, including, without limitation, any Officer’s Certificate,
statement, report or other document or information prepared by any such Person and furnished or to be furnished by it pursuant
to or in connection with the transactions contemplated thereby and not corrected prior to completion of the relevant transaction
including, without limitation, such written information as may have been and may be furnished in connection with any due diligence
investigation with respect to the Transferred Notes Receivable or any such Person’s business, operations or financial condition,
including reasonable attorneys’ fees and other costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that Horizon shall not indemnify a Horizon Indemnified Party to the extent
such loss, liability, expense, damage or injury is due to either such Horizon Indemnified Party’s willful misconduct, bad
faith or gross negligence or by reason of such Horizon Indemnified Party’s reckless disregard of its obligations hereunder;
provided, further, that Horizon shall not be so required to indemnify a Horizon Indemnified Party or to otherwise
be liable to a Horizon Indemnified Party for any losses in respect of the non-performance of the Transferred Notes Receivable,
the creditworthiness of the Obligors with respect to the Transferred Notes Receivable, changes in the market value of the Transferred
Notes Receivable or other similar investment risks associated with the Transferred Notes Receivable if the effect of such indemnity
would be to provide credit recourse to Horizon for the performance of the Transferred Notes Receivable. The provisions of this
indemnity shall run directly to and be enforceable by a Horizon Indemnified Party subject to the limitations hereof.


 



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(d)          With
respect to a claim subject to indemnity hereunder made by any Person against an Indemnified Party (a “Third Party Claim”),
such Indemnified Party shall notify the related indemnifying parties (each an “Indemnifying Party”) in writing
of the Third Party Claim within a reasonable time after receipt by such Indemnified Party of written notice of the Third Party
Claim unless the Indemnifying Parties shall have previously obtained actual knowledge thereof. Thereafter, the Indemnified Party
shall deliver to the Indemnifying Parties, within a reasonable time after the Indemnified Party’s receipt thereof, copies
of all notices and documents (including court papers) received by the Indemnified Party relating to the Third Party Claim. No failure
to give such notice or deliver such documents shall effect the rights to indemnity hereunder. Each Indemnifying Party shall promptly
notify the Agent and the Indemnified Party (if other than the Agent) of any claim of which it has been notified and shall promptly
notify the Agent and the Indemnified Party (if applicable) of its intended course of action with respect to any claim.


 


(e)          If
a Third Party Claim is made against an Indemnified Party, while maintaining control over its own defense, the Indemnified Party
shall cooperate and consult fully with the Indemnifying Party in preparing such defense, and the Indemnified Party may defend the
same in such manner as it may deem appropriate, including settling such claim or litigation after giving notice to the Indemnifying
Party of such terms and the Indemnifying Party will promptly reimburse the Indemnified Party upon written request; provided,
however, that the Indemnified Party may not settle any claim or litigation without the consent of the Indemnifying Party; provided,
further, that the Indemnifying Party shall have the right to reject the selection of counsel by the Indemnified Party if
the Indemnifying Party reasonably determines that such counsel is inappropriate in light of the nature of the claim or litigation
and shall have the right to assume the defense of such claim or litigation if the Indemnifying Party determines that the manner
of defense of such claim or litigation is unreasonable.


 


Section 8.02         Relationship
of Servicer to the Buyer and the Agent.


 


The relationship of the Servicer (and of any
successor to the Servicer as servicer under this Agreement and the Loan Agreement) to the Buyer and the Agent under this Agreement
is intended by the parties hereto to be that of an independent contractor and not of a joint venturer, agent or partner of the
Buyer or the Agent.


 


Section 8.03         Reserved.


 



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ARTICLE
IX



SERVICER DEFAULT


 


Section 9.01         Servicer
Default.


 


(a)          The
occurrence of any of the following events shall constitute a “Servicer Default”:


 


(i)          any
failure by the Servicer to make any payment, transfer or deposit or to give instructions or notice to the Buyer, the Collection
Account Bank, the Agent or any member of the Lender Group as required by this Agreement, or to deliver any Servicer Report or other
report required hereunder on or before the date such payment, transfer, deposit, instruction of notice or report is required to
be made or given, as the case may be, under the terms of this Agreement;


 


(ii)         any
failure on the part of the Servicer duly to observe or perform in any material respect any of the other covenants or agreements
on the part of the Servicer contained in any Note Receivable Document to which it is a party and which relates to a Transferred
Note Receivable;


 


(iii)        any
breach on the part of the Servicer of any representation or warranty contained in any Note Receivable Document to which it is a
party and which relates to a Transferred Note Receivable that has a material adverse affect on the interests of any of the parties
hereto or thereto or any member of the Lender Group;


 


(iv)        a
Bankruptcy Event shall occur with respect to the Servicer;


 


(v)         so
long as the Servicer or the Originator is an Affiliate of the Buyer, any “event of default” by the Servicer or the
Originator occurs under any of the Note Receivable Documents relating to a Transferred Note Receivable;


 


(vi)        if
the Servicer is an Affiliate of Horizon, and Horizon fails to comply with the financial covenants set forth in Section 7.01;


 


(vii)       the
Servicer shall fail to service the Transferred Notes Receivable in accordance with the Required Procedures;


 



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(viii)      the
Servicer agrees to or otherwise permits any change in the Required Procedures not permitted by the definition thereof;


 


(ix)         any
financial or asset information reasonably requested by the Agent as provided herein is not provided as requested within five (5)
Business Days of the receipt by the Servicer of such request;


 


(x)          the
rendering against the Servicer of a final judgment, decree or order for the payment of money in excess of $250,000 (individually
or in the aggregate) and either (a) enforcement of such judgment or claim remains unstayed or unsatisfied for a period of
thirty (30) consecutive days and is not fully covered (subject to standard deductibles) by insurance coverage under which the insurer
has accepted liability, or (b) the judgment creditor or claimant begins enforcement proceedings of such judgment or Lien;


 


(xi)         the
failure of the Servicer to make any payment due with respect to Indebtedness with an aggregate principal amount exceeding $250,000
or the occurrence of any event or condition that would permit acceleration of such recourse debt or other obligations if such event
or condition has not been waived; and


 


(xii)        if
the Servicer is an Affiliate of Horizon, then if Robert D. Pomeroy, Jr. and Gerald A. Michaud shall for any reason cease to be
Chief Executive Officer and President, respectively, of Horizon and Buyer, or perform the roles customarily performed by each of
them in their respective capacities as Chief Executive Officer and President and such individuals have not been replaced within
ninety (90) days by individuals of like qualifications and experience (and with respect to whom the Agent has completed a background
check with the results of such background check being acceptable to the Agent in its Permitted Discretion).


 


(b)          Upon
the occurrence of an Event of Default, the Agent by notice in writing to the Servicer and the other parties hereto (provided that
no notice shall be required to be sent to the Servicer for any Event of Default pursuant to Sections 8.3, 8.4 or
8.5 of the Loan Agreement), may, in addition to whatever rights such Person may have at law or in equity to damages, including
injunctive relief and specific performance, terminate immediately all the rights and obligations of the Servicer under this Agreement
and in and to the Transferred Notes Receivable and the proceeds thereof, as servicer under this Agreement. Upon receipt by the
Servicer of such written notice (or upon any Event of Default pursuant to Sections 8.3, 8.4 or 8.5 of the
Loan Agreement) all authority and power of the Servicer under this Agreement, whether with respect to the Transferred Notes Receivable
or otherwise, shall, subject to Section 9.02, pass to and be vested in the Back-up Servicer, or, if there is a Servicer
Default with respect to the Back-up Servicer, a successor servicer (the “Successor Servicer”) pursuant to Section
9.02, and the Back-up Servicer or such other Successor Servicer as applicable, is hereby authorized and empowered to execute
and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments and do or
cause to be done all other acts or things necessary or appropriate to effect the purposes of such notice of termination, including,
but not limited to, the transfer and endorsement or assignment of the Transferred Notes Receivable and related documents. The Servicer
agrees to cooperate with the Back-up Servicer or the Successor Servicer, as applicable, in effecting the termination of the Servicer’s
responsibilities and rights hereunder, including, without limitation, the transfer to the successor servicer for administration
by it of all amounts which shall at the time have been or are thereafter received with respect to the Purchased Assets and to provide
the Back-up Servicer with access to the officers and employees of the Servicer.


 



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Section 9.02         Appointment
of Successor.


 


(a)          Upon
(i) the termination of Horizon Management’s rights and obligations pursuant to Section 9.01 or (ii) the Agent’s
receipt of the resignation of the Servicer evidenced by an Opinion of Counsel in accordance with Section 4.17 and, in each
case, notice to the Back-up Servicer by the Agent, the Back-up Servicer shall be automatically appointed as the Successor Servicer.
The Back-up Servicer shall make commercially reasonable efforts to transition the servicing from the predecessor Servicer within
thirty (30) days of its receipt of notice from the Agent that the Back-up Servicer is being appointed as Successor Servicer, and
it shall not be held liable for servicing the Transferred Note Receivables in accordance with the standard of care under this Agreement
until the end of such 30-day period. If a Servicer, other than Horizon Management, receives a notice of termination pursuant to
Section 9.01 hereof, or the Agent receives the resignation of the Servicer evidenced by an Opinion of Counsel or the resignation
of the Back-up Servicer pursuant to the terms herein, then the Agent shall appoint a Successor Servicer, with the consent of Horizon
(which such consent shall not be unreasonably withheld or delayed and shall not in any event be required upon the occurrence and
during the continuance of a Default or Event of Default) and the Successor Servicer shall accept its appointment by a written assumption
in a form acceptable to the Agent. In the event that a Successor Servicer has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Agent shall petition a court of competent jurisdiction to appoint any established financial
institution, having a net worth of not less than United States $50,000,000 and whose regular business includes the servicing of
assets similar to the Transferred Notes Receivable, as the Successor Servicer hereunder.


 


(b)          Upon
the appointment of any Successor Servicer, including without limitation, the Back-up Servicer, the Successor Servicer shall be
the successor in all respects to the Servicer with respect to servicing functions under this Agreement and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and
all references in this Agreement to the Servicer shall be deemed to refer to the Successor Servicer; provided, however,
that the Successor Servicer shall have (i) no liability with respect to any action performed by the terminated Servicer prior to
the date that the Successor Servicer becomes the successor to the Servicer or any claim of a third party based on any alleged action
or inaction of the terminated Servicer, (ii) no obligation to perform any advancing obligations, if any, of the Servicer unless
it elects to in its sole discretion, (iii) no obligation to pay any taxes required to be paid by the Servicer (provided that the
Successor Servicer shall pay any income taxes for which it is liable), (iv) no obligation to pay any of the fees and expenses of
any other party to the transactions contemplated hereby, and (v) no liability or obligation with respect to any indemnification
obligations of any prior Servicer, including the original Servicer. The indemnification obligations of the Successor Servicer upon
becoming a successor servicer are expressly limited to those instances of gross negligence or willful misconduct of the Successor
Servicer.


 



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(c)          Prior
to the date on which all Obligations are paid in full in cash and the Commitments have terminated, all authority and power granted
to the Servicer under this Agreement shall automatically cease and terminate upon termination of this Agreement and shall pass
to and be vested in the Agent (or the Buyer if the Obligations under the Loan Agreement have been paid in full in cash) and, without
limitation, the Agent is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights. The Servicer agrees to cooperate with the Agent in effecting the termination
of the responsibilities and rights of the Servicer to conduct servicing of the Transferred Notes Receivable.


 


(d)          As
compensation, any Successor Servicer so appointed shall be entitled to receive the Servicing Fee. No appointment of a successor
to the Servicer hereunder shall be effective until written notice of such proposed appointment shall have been provided to the
successor and the successor shall have consented thereto (except that in the case of the Back-up Servicer, the appointment shall
be automatic upon the Agent’s notice). Notwithstanding anything to the contrary contained herein, in no event shall the Agent,
in any capacity, be liable for any Servicing Fee or for any differential in the amount of the Servicing Fee paid hereunder and
the amount necessary to induce any Successor Servicer under this Agreement and the transactions set forth or provided for by this
Agreement. A Successor Servicer shall be entitled to recover the Servicing Fee to the extent of funds available therefor pursuant
to the provision of Section 2.3(f) of the Loan Agreement.


 


(e)          The
Servicer agrees to cooperate and use its best efforts in effecting, at the Servicer’s expense, the transition of the responsibilities
and rights of servicing of the Note Receivable Documents relating to the Transferred Notes Receivable, including, without limitation,
the transfer to any Successor Servicer for the administration by it of all cash amounts that shall at the time be held by Servicer
for deposit, or have been deposited by the Servicer, or thereafter received with respect to the Note Receivable Documents relating
to the Transferred Notes Receivable, and the delivery to the Successor Servicer in an orderly and timely fashion of all files and
records with respect to such Note Receivable Documents and a computer tape in readable form containing all information necessary
to enable the Successor Servicer to service the Transferred Notes Receivable. In addition, the Servicer agrees to cooperate and
use its best efforts in providing, at the Servicer’s expense, the Successor Servicer with reasonable access (including at
the premises of the Servicer) to Servicer’s employees, and any and all of the books, records (in electronic or other form)
or other information reasonably requested by it to enable the Successor Servicer to assume the servicing functions hereunder and
to maintain a list of key servicing personnel and contact information.


 



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(f)          The
Back-up Servicer as Successor Servicer is authorized to accept and rely on all accounting records (including computer records)
and work product of the prior Servicer hereunder relating to the Transferred Note Receivables without any audit or other examination.
Notwithstanding anything contained in this Agreement to the contrary, the Back-up Servicer, as Successor Servicer, is not responsible
for the accounting, records (including computer records) and work of the prior Servicer relating to the Collateral (collectively,
the “Predecessor Servicer Work Product”). If any error, inaccuracy, omission or incorrect or non-standard practice
or procedure (collectively “Errors”) exist in any Predecessor Servicer Work Product and such Errors make it
materially more difficult to service or should cause or materially contribute to the Back-Up Servicer as Successor Servicer making
or continuing any Errors (collectively, “Continued Errors”), the Back-up Servicer as successor Servicer shall
have no liability for such Continued Errors; provided, however, that the Back-up Servicer as Successor Servicer agrees
to use commercially reasonable efforts to prevent Continued Errors. In the event that the Back-up Servicer as Successor Servicer
becomes aware of Errors or Continued Errors, it shall, with the prior consent of Agent, use its commercially reasonable efforts
to reconstruct and reconcile such data to correct such Errors and Continued Errors and to prevent future Continued Errors. The
Back-up Servicer as Successor Servicer shall be entitled to recover its reasonable costs thereby expended pursuant to Section 2.3(f)
of the Loan Agreement.


 


(g)          The
representations and warranties of the initial Servicer in this Agreement shall not apply to the Back-up Servicer as Successor Servicer.
The Back-up Servicer has no implied duties under this Agreement, and the Back-up Servicer is not required to supervise, verify
or monitor performance or duties of other parties to the Loan Documents. In addition, notwithstanding anything to the contrary
in this Agreement or the Loan Agreement, the following provisions shall apply in the event that the Back-up Servicer becomes Successor
Servicer:


 


(i)          inspections
or audits of the Successor Servicer can take place no more than twice per calendar year and require five (5) days’ prior
written notice so long as the Successor Servicer has not defaulted on its obligations under this Agreement, and the Successor Servicer
shall not be required to reimburse any other party’s fees or expenses in connection with any such inspection or audit or
provide copies to any party free of charge unless it is in connection with a default by the Successor Servicer of its obligations
under this Agreement;


 


(ii)         the
Successor Servicer may appoint agents to act on its behalf with the consent of the Agent, provided that the Successor Servicer
shall remain liable for the duties and obligations of the Successor Servicer under this Agreement and the Back-up Servicer Engagement
Letter;


 



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(iii)        the
Back-up Servicer as Successor Servicer shall deposit funds that it receives into the Collection Account in accordance with Section
5.01;


 


(iv)        the
Back-up Servicer shall not be required to expend its own funds for out-of-pocket expenses in performing its duties as either Back-up
Servicer or as Successor Servicer unless it is reasonably assured that it will be reimbursed for such expenses pursuant to this
Agreement or the Loan Agreement;


 


(v)         no
amendment to the Loan Agreement that adversely affects the rights or duties of the Back-up Servicer, either as Back-up Servicer
or as Successor Servicer, shall be effective with respect to the Back-up Servicer without the written consent of the Back-up Servicer;
the Buyer agrees to provide a copy of each amendment to the Loan Agreement to the Back-up Servicer promptly after it becomes effective;


 


(vi)        prior
to the time the Back-up Servicer becomes Successor Servicer, the Agent may terminate all the rights and obligations of the Back-up
Servicer under this Agreement for any reason in its sole judgment and discretion upon delivery of thirty (30) calendar days' advance
written notice to the Back-up Servicer of such termination;


 


(vii)       at
any time after the Back-up Servicer becomes Successor Servicer, the Agent may terminate all the rights and obligations of the Successor
Servicer under this Agreement for any reason in its sole judgment and discretion upon delivery of ninety (90) calendar days' advance
written notice to the Successor Servicer of such termination; provided that no such prior notice is required pursuant to
any termination under Section 9.01(b);


 


(viii)      the
Back-up Servicer may resign as either Back-up Servicer or as Successor Servicer, without the consent of the other parties hereto,
upon ninety (90) calendar days advance written notice to the Agent of such resignation; provided that no such resignation
shall be effective until a successor Back-up Servicer or successor Successor Servicer has been appointed;


 


(ix)         the
Back-up Servicer shall have the right to perform at the expense of the Servicer a site visit to the Servicer’s offices at
which the Servicer performs servicing operations for the Transferred Note Receivables;


 


(x)          the
Back-up Servicer as Successor Servicer shall not be liable for the payment of any audit fees in accordance with Section 4.08(k);


 



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(xi)         so
long as the Back-up Servicer or its parent is a publicly traded company, it shall not be required to deliver financial statements
pursuant to this Agreement;


 


(xii)        the
obligations of the Back-up Servicer are solely corporate obligations, and in no event will any of the officers, directors, or employees
of the Back-up Servicer be liable for any such obligations; and


 


(xiii)       in
no event will the Back-up Servicer be liable for any consequential, indirect or special damages.


 


Section 9.03         Waiver
of Defaults.


 


The Agent may waive any events permitting
removal of the Servicer as servicer pursuant to Section 9.01. Upon any waiver of a past default, such default shall cease
to exist and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement.
No such waiver shall extend to any subsequent or other default or impair any right consequent thereto except to the extent expressly
so waived.


 


Section 9.04         Accounting
Upon Termination of Servicer.


 


Upon termination of the Servicer under this
Article IX, the Servicer shall, at its own expense:


 


(a)          deliver
to its successor or, if none shall yet have been appointed, to the Agent, any Collections received and not yet deposited in the
Lockbox Account for further deposit in the Collection Account;


 


(b)          deliver
to its successor or, if none shall yet have been appointed, to the Collateral Custodian, all Note Receivable Documents and related
documents and statements held by it hereunder relating to the Transferred Notes Receivable;


 


(c)          deliver
to its successor, the Agent, and the Buyer a full accounting of all funds, including a statement showing the Scheduled Payments
with respect to the Transferred Notes Receivable collected by it and a statement of monies held in trust by it for payments or
charges with respect to the Transferred Note Receivable; and


 


(d)          execute
and deliver such instruments and perform all acts reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Transferred Notes Receivable to its successor and to more fully and definitively vest in such successor all rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer under this Agreement, including but not limited to
granting the Back-up Servicer access to the Servicer’s offices, employees and officers during any servicing transition.


 



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ARTICLE
X



TERMINATION


 


Section 10.01         Termination.
This Agreement shall terminate upon either: (A) the later of (i) the termination of the Loan Agreement and the satisfaction and
discharge of all Obligations due and owing in accordance with the provisions thereof, or (ii) the disposition of all funds
with respect to the last Transferred Note Receivable and the remittance of all funds due hereunder and the payment of all amounts
due and payable, including, in both cases, without limitation, indemnification payments payable pursuant to any Loan Document to
the Agent, the Lender Group, the Buyer, the Servicer, and the Collateral Custodian, written notice of the occurrence of either
of which shall be provided to the Agent by the Servicer; or (B) the mutual written consent of the Buyer, the Originator, the Servicer,
and the Agent.


 


ARTICLE
XI



MISCELLANEOUS PROVISIONS


 


Section 11.01         Amendment.


 


This Agreement may be amended from time to
time by the written agreement of the Buyer, the Originator, the Servicer, the Back-up Servicer, the Collateral Custodian and the
Agent.


 


Section 11.02         Duration
of Agreement.


 


This Agreement shall continue in existence
and effect until terminated as herein provided.


 


Section 11.03         CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER.


 


(a)          THE
VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES
HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 



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(b)          THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
EACH PARTY WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 11.03(b).


 


(c)          TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT
OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


(d)          EACH
OF THE BUYER, THE ORIGINATOR AND THE SERVICER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE BUYER, THE ORIGINATOR OR THE SERVICER OR THEIR RESPECTIVE PROPERTIES
IN THE COURTS OF ANY JURISDICTION.


 


Section 11.04         Notices.


 


All demands, notices and communications hereunder
shall be in writing and shall be personally delivered or sent by overnight courier, electronic mail (at such email addresses as
Buyer, Originator, Servicer, Back-up Servicer, Collateral Custodian or Agent, as applicable, may designate to each other in accordance
herewith), or telefacsimile to Buyer, Originator, Servicer, Back-up Servicer, Collateral Custodian or Agent, as the case may be,
at its address set forth below:


 



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If to the Buyer:


 


Horizon Credit III LLC

c/o Horizon Technology Finance Corporation

312 Farmington Avenue

Farmington, CT  06032

Attn:  Jay Bombara

E-mail:  jay@horizontechfinance.com

Fax No.:  860-676-8655


 


with copies to:


 


Dickstein Shapiro LLP

One Stamford Plaza

263 Tresser Boulevard, Suite 1400

Stamford, CT  06901-3271

Attn:  Evan S. Seideman, Esq.

E-mail:  seidemane@dicksteinshapiro.com

Fax No.:  203-547-7686


 


If to the Originator:


 


Horizon Technology Finance Corporation

312 Farmington Avenue

Farmington, CT  06032

Attn:  Jay Bombara

E-mail:  jay@horizontechfinance.com

Fax No.:  860-676-8655


 


with copies to:


 


Dickstein Shapiro LLP

One Stamford Plaza

263 Tresser Boulevard, Suite 1400

Stamford, CT  06901-3271

Attn:  Evan S. Seideman, Esq.

E-mail:  seidemane@dicksteinshapiro.com

Fax No.:  203-547-7686


 



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If to the Servicer:


 


Horizon Technology Finance Management LLC

312 Farmington Avenue

Farmington, CT  06032

Attn:  Jay Bombara

E-mail:  jay@horizontechfinance.com

Fax No.:  860-676-8655


 


with copies to:


 


Dickstein Shapiro LLP

One Stamford Plaza

263 Tresser Boulevard, Suite 1400

Stamford, CT  06901-3271

Attn:  Evan S. Seideman, Esq.

E-mail:  seidemane@dicksteinshapiro.com

Fax No.:  203-547-7686


 


If to the Collateral Custodian:


 


U.S. Bank National Association

1133 Rankin Street, Suite 100

St. Paul, MN  55116

Attn:  Account Management - Horizon Credit III

E-mail:  saah.kemayah@usbank.com

Fax No.:  (651) 695-6102


 


If to the Back-up Servicer:


 


U.S. Bank National Association

190 S. LaSalle Street

7th Floor, MK-IL-SL7R

Chicago, IL 60603

Attn:  Horizon Credit III

E-mail:  Melissa.rosal@usbank.com

Fax No.:  (312) 332-7996


 


with a copy to:


 


U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107

Attn:  Horizon Credit III / Deb Franco

E-mail:  deborah.franco@usbank.com

Fax No.:  (651) 466-7362


 



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If to the Agent:


 


Fortress Credit Co LLC

1345 Avenue of the Americas, 46th Floor

New York, NY  10105

Attn:  Constantine M. Dakolias

E-mail:  ddakolias@fortress.com

Fax No.:  646-224-8716


 


with copies to:


 


Fortress Credit Co LLC 

c/o Fortress Investment Group

1345 Avenue of the Americas, 46th Floor

New York, NY 10105

Attn:  Douglas Cardoni

Email:  dcardoni@fortress.com

Fax No.:  646-224-8716


 


Skadden, Arps, Slate, Meagher & Flom LLP

155 North Wacker Drive

Chicago, IL  60606

Attn:  Seth Jacobson, Esq.

E-mail:  seth.jacobson@skadden.com

Fax No.:  312-407-8511


 


Any of the Buyer, the Originator, the Servicer,
the Back-up Servicer, the Collateral Custodian and the Agent may change the address at which it is to receive notices hereunder,
by notice in writing in the foregoing manner given to each other party to this Agreement. All notices or demands sent in accordance
with this Section 11.04, shall be deemed received on the earlier of the date of actual receipt or if sent by facsimile when
sent with receipt confirmed by the recipient.


 


Section 11.05         Severability
of Provisions.


 


If any one or more of the covenants, agreements,
provisions or terms of this Agreement shall be held invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in
no way affect the validity or enforceability of the other covenants, agreements, provisions or terms of this Agreement.


 


Section 11.06         No
Partnership.


 


Nothing herein contained shall be deemed or
construed to create any partnership or joint venture between the parties hereto.


 



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Section 11.07         Counterparts.


 


This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts (including by fax or other electronic means), each of
which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same Agreement.


 


Section 11.08         Successors
and Assigns.


 


This Agreement shall inure to the benefit
of and be binding upon the Buyer, the Originator, the Servicer, the Back-up Servicer, the Collateral Custodian and the Agent, and
their respective successors and permitted assigns.


 


Section 11.09         Headings.


 


The headings of the various Sections of this
Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement.


 


Section 11.10         Non-Petition
Agreement.


 


Notwithstanding any prior termination of any
Loan Document, the Originator, the Servicer, and the Collateral Custodian, each severally and not jointly, covenants that it shall
not, prior to the date which is one year and one day, or, if longer, the applicable preference period then in effect, after the
termination of this Agreement pursuant to Section 10.01, acquiesce, petition or otherwise, directly or indirectly, invoke
or cause the Buyer to invoke the process of any governmental authority for the purpose of commencing or sustaining a case against
the Buyer under any Bankruptcy Law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Buyer or any substantial part of their respective property or ordering the winding up or liquidation of the affairs
of the Buyer.


 


Section 11.11         Due
Diligence.


 


The Originator acknowledges that the Agent
and the Lender Group may make Loans and may enter into transactions based solely upon the information provided by the Originator
to the Agent and the Lender Group in the Note Receivables Schedules and the representations, warranties and covenants contained
herein, and that the Agent, at its option, has the right prior to any such Loan to conduct a partial or complete due diligence
review on some or all of the Transferred Note Receivables securing such Loan, including, without limitation, re-generating the
information used to originate each such Transferred Note Receivables. The Agent may underwrite such Transferred Note Receivables
itself or engage a mutually agreed upon third party underwriter to perform such underwriting. The Originator agrees to cooperate
with the Agent and any third party underwriter in connection with such underwriting, including, but not limited to, providing the
Agent and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating
to such Transferred Notes Receivables in the possession, or under the control, of the Servicer. The Originator also shall make
available to the Agent and the Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting
the Transferred Note Receivables and the related Note Receivable Documents. The Agent agrees (on behalf of itself and its Affiliates,
directors, officers, employees and representatives) to use reasonable precaution to keep confidential, in accordance with its customary
procedures for handling confidential information and in accordance with safe and sound practices, and not to disclose to any third
party, any non-public information supplied to it or otherwise obtained by it hereunder with respect to the Originator or any of
its Affiliates; provided, however, that nothing herein shall prohibit the disclosure of any such information to the extent
required by statute, rule, regulation or judicial process; provided, further that, unless specifically prohibited
by applicable law or court order, the Agent shall, prior to disclosure thereof, notify the Originator of any request for disclosure
of any such non-public information. The Agent further agrees not to use any such non-public information for any purpose unrelated
to this Agreement and that the Agent shall not disclose such non public information to any third party underwriter without obtaining
a written agreement from such third party underwriter to comply with the confidentiality provisions of this Section 11.11.


 



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Section 11.12         No
Reliance.


 


Each of the Originator and the Buyer hereby
acknowledges that it has not relied on the Agent or any member of the Lender Group or any of their officers, directors, employees,
agents and “control persons” as such term is used under the Securities Act and under the Exchange Act, for any tax,
accounting, legal or other professional advice in connection with the transactions contemplated by the Loan Documents, that each
of the Originator and the Buyer has retained and been advised by such tax, accounting, legal and other professionals as it has
deemed necessary in connection with the transactions contemplated by the Loan Documents and that neither the Agent nor any member
of the Lender Group makes any representation or warranty, and that neither the Agent nor any member of the Lender Group shall have
any liability with respect to, the tax, accounting or legal treatment or implications relating to the transactions contemplated
by the Loan Documents.


 


Section 11.13         Conflicts.


 


Notwithstanding anything contained in the
Loan Documents to the contrary, (a) in the event of the conflict between the terms of this Agreement and the Loan Agreement,
the terms of the Loan Agreement shall control, and (b) in the event of the conflict between the terms of this Agreement and
any other Loan Document (other than the Loan Agreement), the terms of this Agreement shall control.


 



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Section 11.14         No
Agency.


 


Nothing contained herein or in the Loan Documents
shall be construed to create an agency or fiduciary relationship between the Agent, any member of the Lender Group or any of their
Affiliates and the Buyer, the Originator or the Servicer. None of the Agent, any member of the Lender Group, or any of their Affiliates
shall be liable for any acts or actions effected in connection with any sale of the Transferred Notes Receivables by the Buyer,
the Originator or the Servicer.


 


[Remainder of Page Intentionally Left
Blank]


 



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IN WITNESS WHEREOF, the parties hereto have
caused their names to be signed by their respective officers thereunto duly authorized, as of the day and year first above written,
to this Agreement.


 


	 	HORIZON CREDIT III LLC,
	 	as the Buyer
	 	 	 
	 	By:	/s/ Robert D. Pomeroy, Jr.
	 	Name:	Robert D. Pomeroy, Jr.
	 	Title:	Chief Executive Officer
	 	 	 
	 	HORIZON TECHNOLOGY FINANCE CORPORATION,
	 	as the Originator
	 	 	 
	 	By:	/s/ Robert D. Pomeroy, Jr.
	 	Name:	Robert D. Pomeroy, Jr.
	 	Title:	Chief Executive Officer
	 	 	 
	 	HORIZON TECHNOLOGY FINANCE MANAGEMENT LLC,
	 	as the Servicer
	 	 	 
	 	By:	/s/ Robert D. Pomeroy, Jr.
	 	Name:	Robert D. Pomeroy, Jr.
	 	Title:	Chief Executive Officer
	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,
	 	as the Collateral Custodian
	 	 	 
	 	By:	/s/ Melissa A. Rosal
	 	Name: 	Melissa A. Rosal
	 	Title:	Vice President


 


SIGNATURE PAGE TO


SALE AND SERVICING AGREEMENT


 



    	 



    	 



    

 


	 	U.S. BANK NATIONAL ASSOCIATION,
	 	as the Back-up Servicer
	 	 	 
	 	By:	/s/ Melissa A. Rosal
	 	Name: 	Melissa A. Rosal
	 	Title:	Vice President
	 	 	 
	 	FORTRESS CREDIT CO LLC,
	 	as the Agent
	 	 	 
	 	By:	/s/ Constantine M. Dakolias
	 	Name:	Constantine M. Dakolias
	 	Title:	President


 


SIGNATURE PAGE TO


SALE AND SERVICING AGREEMENT