FUND
IV THAT COMMENCE MARKETING SUBSEQUENT TO FUND IV (THE FUNDS DESCRIBED IN
PARAGRAPHS (1)-(4) OF THIS SECTION 7(A), THE "SUBSEQUENT FUNDS").
(5)
THE RIGHTS GRANTED TO INVESTOR AND/OR ITS AFFILIATES PURSUANT TO
CLAUSES (1) THROUGH (4) OF THIS SECTION 7(A) SHALL NOT APPLY TO ANY COVERED LOAN
FUND THAT COMMENCES MARKETING AFTER THE [***] ANNIVERSARY OF THE PERIOD ENDING
ON THE 12 MONTH ANNIVERSARY OF THE INITIAL CLOSING DATE (ANY SUCH COVERED LOAN
FUND, AN "EXCLUDED FUND").
(6)
THE RIGHTS GRANTED TO INVESTOR AND/OR ITS AFFILIATES PURSUANT TO
THIS CLAUSE (A) ARE NOT CONTINGENT UPON INVESTOR OR ANY OF ITS AFFILIATES MAKING
AN INVESTMENT IN ANY OF THE SUBSEQUENT FUNDS REFERRED TO IN CLAUSES
(A)(1) THROUGH (A)(4).
(7)
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN CLAUSES
(1) THROUGH (6) ABOVE, THE SHARES OF INCENTIVE ALLOCATIONS AND ADVISORY FEES
GRANTED TO INVESTOR AND/OR ITS AFFILIATES
(DESCRIBED IN CLAUSES (1) THROUGH (4) ABOVE) SHALL BE NET OF (I) ANY THIRD PARTY
PLACEMENT FEES OR EXPENSES PAID IN RESPECT OF THIRD PARTY INVESTORS IN THE
APPLICABLE DEERFIELD PEGASUS FUND, AND (II) ANY PORTION OF (A) THE INCENTIVE
ALLOCATION FOR A DEERFIELD PEGASUS FUND MADE TO AN UNAFFILIATED THIRD PARTY SEED
CAPITAL INVESTOR IN SUCH DEERFIELD PEGASUS FUND AND (B) THE MANAGEMENT FEES FOR
SUCH DEERFIELD PEGASUS FUND PAID TO SUCH UNAFFILIATED THIRD PARTY SEED CAPITAL
INVESTOR, PROVIDED THAT IN RESPECT OF CLAUSES (I) AND (II) OF THIS
SECTION 7(A)(7), NONE OF DFR OR ANY OF ITS AFFILIATES SHALL SHARE IN ANY OF SUCH
PLACEMENT FEES, INCENTIVE ALLOCATIONS OR MANAGEMENT FEES ALLOCATED TO SUCH THIRD
PARTY PLACEMENT AGENTS OR SEED CAPITAL INVESTORS.
(8)
In the event that on the second annual anniversary of the Initial
Closing Date Investor and its Affiliates have failed to maintain the Minimum
Investment, Investor and its Affiliates shall forfeit any interests and/or
rights granted pursuant to Section 7(a) and return any amounts received in
connection therewith (less any taxes paid on such amounts).
(B)
DFR SHALL PROMPTLY NOTIFY INVESTOR IN WRITING 60 DAYS PRIOR TO THE
COMMENCEMENT OF THE MARKETING PERIOD FOR FUND III (WHICH, FOR THE AVOIDANCE OF
DOUBT, SHALL NOT, WITHOUT INVESTOR'S CONSENT, OCCUR PRIOR TO THE EARLIER OF
(1) THE FOURTH ANNIVERSARY OF THE LAST DAY OF THE MONTH OF FUND II'S FINAL
CLOSING, (2) THE FIFTH ANNIVERSARY OF THE LAST DAY OF THE MONTH OF FUND II'S
INITIAL CLOSING AND (3) IN THE EVENT FUND II DOES NOT HAVE AN INDEFINITE
INVESTMENT PERIOD, THE TERMINATION OF FUND II'S INVESTMENT PERIOD, PROVIDED THAT
IN NO EVENT SHALL SUCH MARKETING PERIOD COMMENCE PRIOR TO THE SECOND ANNIVERSARY
OF THE INITIAL CLOSING DATE).
ON OR PRIOR TO THE 30TH DAY FOLLOWING THE DATE OF
SUCH NOTICE, INVESTOR SHALL ELECT IN WRITING WHETHER TO RETAIN OR FORFEIT THE
WARRANTS.
IF INVESTOR ELECTS TO RETAIN THE WARRANTS, REGARDLESS OF WHETHER
INVESTOR CHOOSES TO EXERCISE THE WARRANTS AT SUCH TIME, INVESTOR SHALL FORFEIT
(1) ITS RIGHTS PURSUANT TO CLAUSES (A)(2), (A)(3) AND (A)(4) OF THIS SECTION 7
AND