Document:

Exhibit 10.1

 

THIRD AMENDMENT TO CREDIT AND GUARANTY AGREEMENT

 

THIS THIRD AMENDMENT TO
CREDIT AND GUARANTY AGREEMENT (this “Amendment”) is dated as of April 21, 2021 and is entered into by and
among, on the one hand, the lenders identified on the signature pages hereof (the “Lenders”) which Lenders constitutes
the Required Lenders under the Credit Agreement, Cortland Capital Market Services LLC, as the administrative agent for the Lenders (in
such capacity, together with its successors and permitted assigns in such capacity, “Administrative Agent”) and as
the collateral agent for the Secured Parties (in such capacity, together with its successors and permitted assigns in such capacity, “Collateral
Agent” and, together with the Administrative Agent, the “Agents”), and, on the other hand, Lument Finance
Trust, Inc. (formerly known as Hunt Companies Finance Trust, Inc.), a Maryland corporation (“Borrower”),
and is made with reference to that certain Credit and Guaranty Agreement, dated January 15, 2019 (as amended by that certain First
Amendment to Credit and Guaranty Agreement, dated as of February 13, 2019, and by that certain Second Amendment to Credit and Guaranty
Agreement, dated as of July 9, 2020, and as further amended, restated, supplemented, waived or otherwise modified from time to time
prior to the date hereof, the “Credit Agreement”), by and among the Borrower, the Guarantors, the lenders and the other
persons party thereto. Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit
Agreement after giving effect to this Amendment (the “Amended Agreement”).

 

RECITALS

 

WHEREAS, pursuant to
Section 11.2 of the Credit Agreement, the Borrower, the Administrative Agent and the Lenders party hereto, which constitute
the Required Lenders, wish to amend the Credit Agreement on the terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

SECTION I.
AMENDMENTS TO CREDIT AGREEMENT

 

A.            The
following definitions are hereby added to Section 1.1 of the Credit Agreement in their appropriate places in alphabetical
order:

 

““First
Incremental Term Loans” has the meaning set forth in the Third Amendment to this Agreement dated as of April 21, 2021.”

 

““Third
Amendment Effective Date” has the meaning set forth in the Third Amendment to this Agreement dated as of April 21, 2021.”

 

B.            The
definition of “Anticipated Repayment Date” is hereby amended and restated in its entirety as follows:

 

““Anticipated Repayment
Date” means February 14, 2025.”

 

    

     

    

 

C.            Subclauses
(i) and (vi) of clause (b) of the definition of “Borrowing Base Eligibility Criteria” are hereby amended and
restated as follows:

 

“(i) no
more than 10% of the Borrowing Base Eligible Assets (by Assigned Value) shall be secured by non-mall retail properties;”

 

“(vi)     no
more than 15% of the Borrowing Base Eligible Assets (by Assigned Value) shall constitute student housing, assisted living and other health
care assets;”

 

D.            The
definition of “Term Loan Maturity Date” is hereby amended and restated in its entirety as follows:

 

““Term
Loan Maturity Date” means (a) with respect to the Initial Term Loans and the First Incremental Term Loans, the Maturity
Date and (b) with respect to any other Incremental Term Loans, the final maturity date as specified in the applicable Incremental
Amendment; provided that, if any such day is not a Business Day, the applicable Term Loan Maturity Date shall be the Business Day
immediately succeeding such day.”

 

E.            The
definition of “Yield Maintenance Date” is hereby amended and restated in its entirety as follows:

 

““Yield
Maintenance Date” means February 14, 2024.”

 

F.            The
definition of “Yield Maintenance Premium” is hereby amended by adding the following additional proviso at the end of the first
sentence of such definition:

 

“; provided, however, that
the Yield Maintenance Premium with respect to any Loan prepaid on or after February 14, 2023 and prior to the Yield Maintenance Date
shall be 2.5% of the principal amount of the Loans so prepaid.”

 

G.            Section 2.8(a) of
the Credit Agreement is amended by adding the following sentence at the end thereof:

 

“For the avoidance of doubt, no
Yield Maintenance Premium or other premium or penalty shall be payable in connection with any prepayment of the Loans, in whole or in
part, made on or after February 14, 2024.”

 

H.            Section 2.17(b) of
the Credit Agreement is amended and restated in its entirety as follows:

 

“(b)     Except
for prepayments contemplated by Section 2.8(d)(y), each repayment by the Borrower in respect of principal or interest on the
Initial Term Loans and the First Incremental Term Loans and each payment in respect of fees or expenses payable hereunder shall be applied
to the amounts of such obligations owing to the Lenders entitled thereto in accordance with their respective Pro Rata Share. Each voluntary
prepayment by the Borrower of Initial Term Loans and the First Incremental Term Loans shall be applied to the amounts of such obligations
owing to the Lenders in accordance with their respective Pro Rata Share (unless such payment is made in accordance with Section 9.1(f),
in which case it shall be made in accordance with such Section).”

 

    2 

     

    

 

I.            Section 3.3
of the Credit Agreement is amended and restated in its entirety as follows:

 

“3.3         Maturity
Date.

 

(a)            This
Agreement shall continue in full force and effect for a term ending on the earlier of (the “Maturity Date”): (a) February 14,
2026 and (b) such earlier date on which the Loans shall become due and payable in accordance with the terms of this Agreement and
the other Loan Documents.”

 

J.            Section 6.12
of the Credit Agreement is amended and restated in its entirety as follows:

 

“6.12     Financial
Covenants. The Borrower shall not:

 

(a)          Minimum
Asset Coverage Ratio. Permit the Asset Coverage Ratio on the last day of each Test Period ending after the Third Amendment Effective
Date, to be less than 150%.

 

(b)          Minimum
Unencumbered Asset Ratio. Permit the Unencumbered Asset Ratio on the last day of each Test Period ending after the Third Amendment
Effective Date, to be less than 170%.

 

(c)          Maximum
Total Net Leverage Ratio. Permit the Total Net Leverage Ratio on the last day of each Test Period ending after the Third Amendment
Effective Date, to exceed 6.00:1.00; provided that, after any equity offering of the Borrower following the preferred stock offering
consummated on the Third Amendment Effective Date, the Total Net Leverage Ratio shall step down to a ratio no greater than 120% of the
ratio immediately after the Capital Event, with a floor of 4.50:1.00.

 

(d)          Minimum
Tangible Net Worth. Permit the Tangible Net Worth on the last day of each Test Period ending after the Third Amendment Effective Date,
to be less than the amount equal to the sum of (i) eighty percent (80%) of the Borrower’s and its Subsidiaries’ Tangible
Net Worth as of the Third Amendment Effective Date plus (ii) eighty percent (80%) of the net proceeds (after deducting transaction
costs) that the Borrower and its Subsidiaries receive from subsequent equity issuances following the Third Amendment Effective Date.

 

(e)          Minimum
Interest Coverage Ratio. Commencing with the fiscal quarter ending March 31, 2019, permit the Interest Coverage Ratio on the
last day of each Test Period ending after the Third Amendment Effective Date, to be less than 1.6x.

 

(f)           Loan
Concentration.

 

(i)           Permit
less than 65.0% of loans held for investment (as defined in the consolidated balance sheet of the Borrower) by the Borrower to be comprised
of Senior Commercial Real Estate Loans, as measured by the average daily outstanding principal balance of all loans held for investment
(as defined in the consolidated balance sheet of the Borrower) during a fiscal quarter and as adjusted for non-controlling interests for
which none of the Borrower or its Affiliates or the Borrower’s external manager or its Affiliates holds majority lender status or
similar voting control for the subject loan.

 

    3

     

    

 

(ii)            Permit
more than 25% of total assets (by unpaid principal balance or if unpaid principal balance is not available, by book value (which in the
case of MSRs, shall be the value provided by the Valuation Agent) owned by the Borrower to be comprised of non-multi-family assets during
a fiscal quarter.

 

(iii)            Permit
more than 25% of the Borrowing Base Eligible Assets (by unpaid principal balance or if unpaid principal balance is not available, by book
value (which in the case of MSRs, shall be the value provided by the Valuation Agent) to be comprised of non-multi-family assets during
a fiscal quarter.”

 

K.            Exhibit P-1
to the Credit Agreement is amended and restated in its entirety in the form attached to this Amendment as Exhibit P-1.

 

SECTION II.         FIRST
INCREMENTAL TERM LOANS

 

Each Lender agrees, severally
and not jointly, to make on the Third Amendment Effective Date an Incremental Term Loan to the Borrower in the principal amount set forth
on Schedule II hereto for such Lender (the “First Incremental Term Loans”). The First Incremental Term Loans shall
shall constitute Loans under the Credit Agreement as amended by this Amendment and shall have the same terms as to interest rate, repayments
and prepayments as do the Initial Term Loans under the Credit Agreement as amended by this Amendment. The Incremental Facility Closing
Date for the First Incremental Term Loans shall be the Third Amendment Effective Date, and accordingly, the conditions precedent to the
making of the First Incremental Term Loans are set forth in Section III (in lieu of the conditions set forth in Section 2.15(d) of
the Credit Agreement). This Amendment constitutes the Incremental Amendment for the First Incremental Term Loans.

 

SECTION III.        CONDITIONS TO EFFECTIVENESS

 

This Amendment shall become
effective as of the date hereof only upon the satisfaction of all of the following conditions precedent (the date of satisfaction of such
conditions being referred to herein as the “Third Amendment Effective Date”):

 

A.            Executed
Counterparts. The Agents shall have received this Amendment, duly executed and delivered by each party thereto;

 

B.            Fees
and Expenses. The Borrower shall have paid to each Lender an amendment fee in the amount of 0.25% of the outstanding principal amount
of such Lender’s Loans on the Third Amendment Effective Date (not including the First Incremental Term Loans being made on the Third
Amendment Effective Date) and the Borrower shall have paid all Lender Group Expenses incurred in connection with the transactions evidenced
by this Amendment for which the Borrower received an invoice at least one (1) Business Day prior to the Third Amendment Effective
Date;

 

C.            Representations
and Warranties. The representations and warranties of the Borrower contained in this Amendment and the other Loan Documents shall
be true and correct on the Third Amendment Effective Date in all material respects (except that such materiality qualifier shall not be
applicable to any representation or warranty to the extent that such representation or warranty is qualified or modified by materiality)
on and as of the Third Amendment Effective Date as though made on and as of such date (except to the extent that such representations
and warranties solely relate to an earlier date);

 

    4

     

    

 

D.            No
Event of Default or Default. No Event of Default or Default shall have occurred and be continuing on the Third Amendment Effective
Date, nor shall either result from the effectiveness of this Amendment on the Third Amendment Effective Date, the borrowing of the First
Incremental Term Loans or the consummation of the other transactions contemplated by this Amendment; and the Borrower is in compliance
with all the financial covenants set forth in Section 6.12 of the Amended Agreement before and after giving effect to the First Incremental
Term Loans;

 

E.            Preferred
Stock Offering. The preferred stock offering of the Borrower contemplated by the Form S-11 filing of the Borrower made with the
SEC on March 29, 2021 shall have been consummated; and

 

F.            Amendment
Closing Deliveries. The Agents shall have received customary legal opinions and officers’ certificates reasonably requested
by the Agents.

 

SECTION IV.
REPRESENTATIONS AND WARRANTIES

 

The Borrower hereby represents
and warrants to the Administrative Agent, the Collateral Agent and the Lenders that all of the representations and warranties of the Borrowers
set forth in each of the Amended Agreement and the other Loan Documents are true and correct in all material respects (or in all respects
to the extent such representation or warranty is limited by materiality except that such materiality qualifier shall not be applicable
to any representation or warranty to the extent that such representation or warranty is qualified or modified by materiality) as of the
Third Amendment Effective Date (except to the extent that such representations and warranties solely relate to an earlier date).

 

SECTION V.
MISCELLANEOUS

 

A.            Reference
to and Effect on the Credit Agreement and the Other Loan Documents.

 

(i)            This
Amendment shall constitute a Loan Document for purposes of each of the Credit Agreement, this Amendment and the other Loan Documents and
on and after the Third Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”,
 “hereof”, “herein” or words of like import referring to the Credit Agreement, and each reference in the other
Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring
to the Credit Agreement shall mean and be a reference to the Amended Agreement.

 

(ii)            Except
as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.

 

(iii)            The
execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any
right, power or remedy of the Administrative Agent, the Collateral Agent, the Lenders or any other secured party under the Credit Agreement
or any of the other Loan Documents.

 

    5

     

    

 

B.            Reaffirmation.

 

(i)            The
Borrower hereby (a) agrees that, notwithstanding the occurrence of the Third Amendment Effective Date, each of the guarantees, the
Security Agreement and each of the Negative Pledge Agreement and the Borrower DACA continue to be in full force and effect and are not
impaired or adversely affected in any manner whatsoever, (b) confirms its guarantee of the Obligations and its grant of a security
interest in its assets as Collateral therefor, all as provided in the Loan Documents as originally executed and (c) acknowledges
that such guarantee and grant continues in full force and effect in respect of, and to secure, the Obligations under the Amended Agreement
and the other Loan Documents.

 

(ii)            The
Guarantors hereby (a) agree that, notwithstanding the occurrence of the Third Amendment Effective Date, each of the guarantees, the
Security Agreement and each of the Negative Pledge Agreement and the Mezz DACAs continue to be in full force and effect and are not impaired
or adversely affected in any manner whatsoever, (b) confirms its guarantee of the Obligations and its grant of a security interest
in its assets as Collateral therefor, all as provided in the Loan Documents as originally executed and (c) acknowledges that such
guarantee and grant continues in full force and effect in respect of, and to secure, the Obligations under the Amended Agreement and the
other Loan Documents.

 

C.            Headings.
Section headings used in this Amendment are for convenience of reference only and are not to affect the construction hereof or to
be taken in consideration in the interpretation hereof.

 

D.     GOVERNING
LAW. EXCEPT AS SPECIFICALLY SET FORTH IN ANY OTHER LOAN DOCUMENT: (A) THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF NEW YORK; AND (B) THE VALIDITY OF THIS AMENDMENT, AND THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND
THEREOF, AND THE RIGHTS OF THE PARTIES THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.

 

E.            JURISDICTION
AND VENUE. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO AGREE THAT ALL ACTIONS, SUITS, OR PROCEEDINGS ARISING BETWEEN
ANY MEMBER OF THE LENDER GROUP OR THE BORROWER AND ITS SUBSIDIARIES IN CONNECTION WITH THIS AMENDMENT SHALL BE TRIED AND LITIGATED ONLY
IN THE STATE OR 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 ANY AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
ANY AGENT ELECTS TO BRING SUCH ACTION TO THE EXTENT SUCH COURTS HAVE IN PERSONAM JURISDICTION OVER THE RELEVANT OBLIGOR OR IN REM JURISDICTION
OVER SUCH COLLATERAL OR OTHER PROPERTY. THE BORROWER AND ITS SUBSIDIARIES AND EACH MEMBER OF THE LENDER GROUP, TO THE EXTENT THEY MAY LEGALLY
DO SO, HEREBY WAIVE 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 AND STIPULATE THAT THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW
YORK, STATE OF NEW YORK SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER SUCH PERSON FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE,
CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AMENDMENT. TO THE EXTENT PERMITTED BY LAW, SERVICE OF PROCESS SUFFICIENT
FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWER OR ANY MEMBER OF THE LENDER GROUP MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS INDICATED ON EXHIBIT 11.3 OF THE INDENTURE.

 

    6

     

    

 

F.            WAIVER
OF TRIAL BY JURY. THE BORROWER AND ITS SUBSIDIARIES AND EACH MEMBER OF THE LENDER GROUP, TO THE EXTENT THEY MAY LEGALLY DO SO,
HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT
TO THIS AMENDMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS
AMENDMENT, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE
OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT THEY MAY LEGALLY DO SO, THE BORROWER AND ITS SUBSIDIARIES AND
EACH MEMBER OF THE LENDER GROUP HEREBY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED BY A
COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.

 

G.            Severability.
Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

H.            Counterparts;
Electronic Execution.

 

(i)            This
Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment
or any document or instrument delivered in connection herewith by facsimile transmission or electronic image scan transmission (e.g.,
PDF) shall be effective as delivery of a manually executed counterpart of this Amendment or such other document or instrument, as applicable.

 

(ii)            The
words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use of a paper based recordkeeping system, as the case may
be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

[Remainder of Page Intentionally Blank;
Signature Pages Follow]

 

    7

     

    

 

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

 

	 	LUMENT FINANCE TRUST, INC., a Maryland corporation,
    as Borrower
	 	 
	 	By:	/s/ James A. Briggs
	 	Name:	James A. Briggs
	 	Title:	Chief Financial Officer
	 	 
	 	FIVE OAKS ACQUISITION CORP., a Delaware corporation, as Guarantor
	 	 
	 	By:	/s/ James A. Briggs
	 	Name:	James A. Briggs
	 	Title:	Chief Financial Officer
	 	 
	 	HUNT CMT EQUITY, LLC, a Delaware limited liability company,
    as Guarantor
	 	 
	 	By:	/s/ James A. Briggs
	 	Name:	James A. Briggs
	 	Title:	Chief Financial Officer

 

    	 	S-1	Third Amendment Signature Page

     

    

 

	 	CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent
    and Collateral Agent
	 	 
	 	By:	/s/ Matthew Trybula
	 	Name:	Matthew Trybula
	 	Title:	Associate Counsel

 

    	 	S-2	Third Amendment Signature Page

     

    

 

	 	LENDERS:
	 	 
	 	JPMORGAN GLOBAL BOND OPPORTUNITIES FUND
	 	 
	 	By:	 J.P. Morgan Investment Management Inc., its Investor Advisor
	 	 
	 	By:	/s/ Kent R. Weber
	 	Name:	Kent R. Weber
	 	Title:	Managing Director
	 	 
	 	JPMORGAN INCOME FUND
	 	 
	 	By:	J.P. Morgan Investment Management Inc., its Investor Advisor
	 	 
	 	By:	/s/ Kent R. Weber
	 	Name:	Kent R. Weber
	 	Title:	Managing Director
	 	 
	 	JPMORGAN CORE PLUS BOND FUND
	 	 
	 	By:	 J.P. Morgan Investment Management Inc., its Investor Advisor
	 	 
	 	By:	/s/ Kent R. Weber
	 	Name:	Kent R. Weber
	 	Title:	Managing Director
	 	 
	 	COMMINGLED PENSION TRUST FUND (CORE PLUS BOND) OF JPMORGAN CHASE BANK, N.A.
	 	 
	 	By:	J.P. Morgan Investment Management Inc., its Investor Advisor
	 	 
	 	By:	/s/ Kent R. Weber
	 	Name:	 Kent R. Weber
	 	Title:	Managing Director

 

    	 	S-3	Third Amendment Signature Page

     

    

 

SCHEDULE II

 

	Lender	 	First Incremental Term Loan	 
	JPMorgan Global Bond Opportunities Fund	 	To be allocated among the Lenders as determined by the Lenders	 
	JPMorgan Income Fund	 	To be allocated among the Lenders as determined by the Lenders	 
	JPMorgan Core Plus Bond Fund	 	To be allocated among the Lenders as determined by the Lenders	 
	Commingled Pension Trust Fund (Core Plus Bond) of JPMorgan Chase Bank, N.A.	 	To be allocated among the Lenders as determined by the Lenders	 
	Total	 	$	7,500,000.00	 

 

    Schedule II-1

     

    

 

EXHIBIT P-1

 

FORM OF COMPLIANCE CERTIFICATE

 

LUMENT FINANCE TRUST, INC.

 

_______________ __, ________________

 

This Compliance Certificate
is delivered pursuant to clause (a)(i) of Section 5.3 of the Credit and Guaranty Agreement, dated as of January 15,
2019 (as amended, restated, supplemented, amended and restated or otherwise modified from time to time, the “Credit Agreement”),
among Lument Finance Trust, Inc. (formerly known as Hunt Companies Finance Trust, Inc.), a Maryland corporation (the “Borrower”),
Five Oaks Acquisition Corp., a Delaware corporation, Hunt CMT Equity, LLC, a Delaware limited liability company, the lenders party thereto
as lenders (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually
as a “Lender” and collectively as the “Lenders”), Cortland Capital Market Services LLC, as administrative
agent and collateral agent for the Lenders. Unless otherwise defined herein or the context otherwise requires, terms used herein or in
any of the attachments hereto have the meanings provided in the Credit Agreement.

 

The Borrower hereby certifies,
represents and warrants in respect of the period (the “Computation Period”) of [four fiscal quarters ending on _________
___, ______][the fiscal quarter ending on _________ ___, ______] (such latter date being the “Computation Date”), as
of the Computation Date:

 

(a)            No
Event of Default or Default had occurred and was continuing [or if an Event of Default has occurred, specify the nature and extent thereof
and any correction action taken or proposed to be taken with respect thereto].

 

(b)            The
Asset Coverage Ratio was ___%, as computed on Attachment 1 hereto. The Minimum Asset Coverage Ratio permitted pursuant to Section 6.12(a) of
the Credit Agreement on the Computation Date was 150%. The Borrower is [in compliance][not in compliance] with the Minimum Asset Coverage
Ratio covenant.

 

(c)            The
Unencumbered Asset Ratio was ___%, as computed on Attachment 2 hereto. The Minimum Unencumbered Asset Ratio permitted pursuant
to Section 6.12(b) of the Credit Agreement on the Computation Date was 170%. The Borrower is [in compliance][not in compliance]
with the Minimum Unencumbered Asset Ratio covenant.

 

(d)            The
Total Net Leverage Ratio was ___:1.00, as computed on Attachment 3 hereto. The Maximum Total Net Leverage Ratio permitted pursuant
to Section 6.12(c) of the Credit Agreement on the Computation Date was 6.00:1.00; provided, that, if an
equity offering of the Borrower shall have occurred following the Third Amendment Effective Date, the Maximum Total Net Leverage Ratio
permitted pursuant to Section 6.12(c) of the Credit Agreement on the Computation Date shall be equal to 120% of the ratio
immediately following such Capital Event, with a floor of 4.50:1.00. The Borrower is [in compliance][not in compliance] with the Maximum
Total Net Leverage Ratio covenant.

 

     

     

    

 

(e)            Tangible
Net Worth was $____.__, as computed on Attachment 4 hereto. The Minimum Tangible Net Worth permitted pursuant to Section 6.12(d) of
the Credit Agreement on the Computation Date was to be no less than the amount equal to the sum of (i) eighty percent (80%) of the
Borrower’s and its Subsidiaries’ Tangible Net Worth as of the Third Amendment Effective Date plus (ii) eighty percent
(80%) of the net proceeds (after deducting transaction costs) that the Borrower and its Subsidiaries receive from subsequent equity issuances
following the Third Amendment Effective Date. The Borrower is [in compliance][not in compliance] with the Minimum Tangible Net Worth covenant.

 

(f)            The
Interest Coverage Ratio was ___x, as computed on Attachment 5 hereto. The Minimum Interest Coverage Ratio permitted pursuant to
Section 6.12(e) of the Credit Agreement on the Computation Date was to be no less than 1.6x. The Borrower is [in compliance][not
in compliance] with the Minimum Interest Coverage Ratio covenant.

 

(g)            The
percentage of loans held for investment by the Borrower which comprise of Senior Commercial Real Estate Loans, calculated in accordance
with Section 6.12(f)(i) was __%. The minimum amount of loans held for investment (as defined in the consolidated balance
sheet of the Borrower) by the Borrower to be comprised of Senior Commercial Real Estate Loans, as measured by the average daily outstanding
principal balance of all loans held for investment (as defined in the consolidated balance sheet of the Borrower) during a fiscal quarter
and as adjusted for non-controlling interests pursuant to Section 6.12(f)(i) of the Credit Agreement was 65.0%. The Borrower
is [in compliance][not in compliance] with the Loan Concentration covenant in Section 6.12(f)(i).

 

(h)            The
percentage of total assets (by unpaid principal balance or if unpaid principal balance is not available, by book value (which in the case
of MSRs, shall be the value provided by the Valuation Agent) owned by the Borrower to be comprised of non-multi-family assets during a
fiscal quarter, calculated in accordance with Section 6.12(f)(ii) was __%. Such threshold is [above][below][equal to]
25%. The Borrower is [in compliance][not in compliance] with the Loan Concentration covenant in Section 6.12(f)(ii).

 

(i)            The
percentage of the Borrowing Base Eligible Assets (by unpaid principal balance or if unpaid principal balance is not available, by book
value (which in the case of MSRs, shall be the value provided by the Valuation Agent) to be comprised of non-multi-family assets during
a fiscal quarter, calculated in accordance with Section 6.12(f)(iii) was __%. Such threshold is [above][below][equal
to] 25%. The Borrower is [in compliance][not in compliance] with the Loan Concentration covenant in Section 6.12(f)(iii).

 

[signature page follows]

 

    P-1-2 

     

    

 

IN WITNESS WHEREOF, this Compliance
Certificate is executed by the undersigned this _____ day of _____________, 20___.

 

	 	LUMENT FINANCE TRUST, INC.,

 a Maryland corporation, 

as Borrower
	 	 
	 	By:	                
	 	Name:	 
	 	Title:	 

 

    P-1-3 

     

    

 

Attachment 1

 

ASSET COVERAGE RATIO

on the Computation Date

 

	1.	BORROWING
BASE1	 
	 	The sum of the Borrowing Base Value of each Borrowing Base Eligible Asset as of such date as determined by the most recent Borrowing Base Certificate and adjusted as reflected in any Determined Valuation; provided, that, at the time of origination or purchase by the Borrower or its Subsidiaries of a Borrowing Base Eligible Asset, the outstanding principal balance of any single property underlying any Borrowing Base Eligible Asset (based on the Borrowing Base Value of such property) shall not comprise in excess of 10.0% of the outstanding principal balance of the Borrowing Base Value of all assets constituting Collateral (and any such excess shall be disregarded for purposes of determining the Borrowing Base).	$__________
	2.	LOANS	 
	 	(a)The aggregate principal amount of the Initial Term Loans.	$__________
	 	(b)The aggregate principal amount of the Incremental Term Loans outstanding.	$__________
	ASSET COVERAGE RATIO: Ratio of item 1 to the sum of items 2(a) and 2(b).	____:____

 

 

1
To be recalculated on (i) the last day of each fiscal quarter, (ii) the date on which any Loan is requested and (iii) the
date on which the Borrower has actual knowledge of a VAE.

 

    P-1-4 

     

    

 

Attachment 2

 

UNENCUMBERED ASSET RATIO

on the Computation Date

 

	1.	UNENCUMBERED COLLATERAL	 
	 	(a)The Assigned Value of the Borrowing Base Eligible Assets comprised of Senior Commercial Real Estate Loans and Senior Commercial Real Estate Construction Loans that are not encumbered by a Lien other than Permitted Liens.	$__________
	 	(b)The Assigned Value of other Borrowing Base Eligible Assets that are not encumbered by a Lien other than Permitted Liens.	 
	2.	LOANS	 
	 	(a)The aggregate principal amount of funded and outstanding Initial Term Loans.	$__________
	 	(b)The aggregate principal amount of funded and outstanding Incremental Term Loans.	$__________
	UNENCUMBERED ASSET RATIO: the ratio of (i) the sum of items 1(a) and 1(b) to (ii) the sum of items 2(a) and 2(b)	____:____

 

    P-1-5 

     

    

 

Attachment 3

 

TOTAL NET LEVERAGE RATIO

on the Computation Date

 

	1.	CONSOLIDATED
DEBT.2	 
	 	(a)All indebtedness, whether or not represented by bonds, debentures, notes, securities, or other evidences of indebtedness, for the repayment of money borrowed.	$__________
	 	(b)All indebtedness representing deferred payment of the purchase price of property or Assets, exclusive of trade payables that are due and payable in the ordinary course of such Person’s business.	$__________
	 	(c)all Capitalized Lease Obligations.	$__________
	 	(d)all indebtedness currently due under guaranties, endorsements, assumptions, or other contingent obligations in respect of the foregoing.	$__________
	 	(e)Unrestricted cash and Cash Equivalents.	$__________
	 	(f)Warehousing Debt3 secured by loans available for  sale.	$__________
	TOTAL CONSOLIDATED DEBT: the sum of, without duplication,  Items 1(a) through 1(d) minus, without duplication, Item 1(e) and Item 1(f)	$__________
	2.	CONSOLIDATED TANGIBLE NET WORTH	 
	 	(a) All amounts that would be included under capital or shareholder’s equity (or any like caption) on the balance sheet of such Person.	$__________
	 	(b) Amounts owing to that Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly  affiliated with such Person or any Affiliate thereof.	$__________
	 	(c)Intangible
assets.4	$__________
	 	(d)Prepaid taxes and/or expenses, plus deferred  origination fees, net of deferred origination costs, all on or as of such date.	$__________
	TOTAL CONSOLIDATED TANGIBLE NET WORTH: Item 2(a) minus, without duplication, Items 2(b) through Item 2(d)	$__________
	TOTAL NET LEVERAGE RATIO: the ratio of Total Consolidated Debt to Total Consolidated Tangible Net Worth.	____:____

 

 

2
Debt calculation is with respect to the aggregate outstanding consolidated Debt of the Borrower and its Subsidiaries.

3
Warehousing Debt means “any warehouse, purchase, repurchase, participation or other similar financing facility extended
by a lender or repo buyer to the Borrower or a Subsidiary thereof to finance the funding, acquisition or ownership of (a) Senior Commercial
Real Estate Loans, (b) Senior Commercial Real Estate Construction Loan, (c) Subordinated Commercial Real Estate Loan, (d) Mezzanine Loans
or (e) mortgage loans, mortgaged-backed or mortgage pass-through securities or other mortgage-related assets of any kind, but only for
such time as the foregoing remain financed under such facility that are secured by loans available for sale.”

4
Mortgage servicing rights shall not be deemed to be intangible assets.

 

    P-1-6 

     

    

 

Attachment 4

 

TANGIBLE NET WORTH

on the Computation Date

 

	1.	Tangible Net Worth	 
	 	(a)All amounts that would be included under capital or shareholder’s equity (or any like caption) on the balance sheet of such Person (inclusive of preferred equity, irrespective of GAAP treatment of such preferred equity, so long as such preferred equity does not have any mandatory redemption provisions that are applicable until the date that is ninety-one (91) days after the Maturity Date of the Loans).	$__________
	 	(b)Amounts owing to that Person from any Affiliate thereof, or from officers, employees, partners, members, directors, shareholders or other Persons similarly  affiliated with such Person or any Affiliate thereof.	$__________
	 	(c)Intangible
assets.5	$__________
	 	(d)Prepaid taxes and/or expenses, plus deferred  origination fees, net of deferred origination costs, all on or as of such date	$__________
	TANGIBLE NET WORTH: Item 1(a) minus, without duplication, Items 1(b) through (d)	$__________

 

 

5 Mortgage servicing rights shall not be deemed to be intangible
assets.

 

    P-1-7 

     

    

 

Attachment 5

 

Interest Coverage Ratio

on the Computation Date

 

	1.	Adjusted EBITDA for the twelve months preceding the most recently ended Test Period	 
	 	(a)GAAP net income attributable to common  shareholders plus (i) realized and unrealized losses, (ii) interest expenses, (iii) depreciation and amortization, (iv) taxes, (vi) other non-cash expenses considered to be non-operating in nature	$__________
	 	(b)interest expense on warehousing debtand securitizations and (ii) realized and unrealized gains.	$__________
	Adjusted EBITDA: Item 1(a) minus, without duplication, Item 1(b), in each case, for the twelve months preceding the most recently ended Test Period	$__________
	2.	interest expense on all of the Borrower’s Debt (other than non- recourse Debt) for the twelve months preceding the most recently ended Test Period (but exclusive of any interest expense on any preferred equity of the Borrower)	$__________
	INTEREST COVERAGE RATIO: the ratio of Adjusted EBITDA for the twelve months preceding the most recently ended Test Period to interest expense on all of the Borrower’s Indebtedness for the twelve months preceding the most recently ended Test Period	____:____

 

    P-1-8bluelinx_-xretirementxan

RETIREMENT AND TRANSITION SERVICES AGREEMENT    THIS RETIREMENT AND TRANSITION SERVICES AGREEMENT (this  “Agreement”) is made and entered into this 15th day of April 2021, by and between MITCHELL  B. LEWIS (“Executive”) and BLUELINX CORPORATION, a Georgia corporation  (“Company”).  The term “Company,” when used in this Agreement, includes its parent,  subsidiaries or affiliates (including specifically BlueLinx Holdings Inc.) and their respective  predecessors, successors, and assigns.  Executive and Company are sometimes hereinafter referred  to together as the “Parties” and individually as a “Party.”  BACKGROUND:     A. Executive is employed as the President and Chief Executive Officer of Company.  The terms of Executive’s employment are governed by that certain Employment Agreement dated  January 15, 2014 by and among Company, Executive and, with respect to Sections 3(a), 3(b) and  3(e) therein, BlueLinx Holdings Inc., as amended by that certain First Amendment to Employment  Agreement dated June 8, 2018 by and between Company and Executive (the “Employment  Agreement”).     B. Executive’s employment will terminate in certain capacities as of the Retirement  Date (as defined below) and all remaining employment capacities as of the Termination Date (as  defined below).       NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual  promises, covenants and agreements contained herein, and other good and valuable consideration,  the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:    1.  Retirement. Executive will retire as President and Chief Executive Officer of  Company effective on the date that a new Chief Executive Officer and President takes office (the  “Retirement Date”); provided however, that Executive shall remain an employee of Company  through December 31, 2021 (the “Termination Date”) in order to continue providing transition  services as contemplated in Section 2 below.  Until the Retirement Date and except as otherwise  stated herein, Executive’s employment will continue to be governed by this Agreement and his  Employment Agreement; thereafter and through the Termination Date and except as otherwise  stated herein, Executive’s employment will be governed by this Agreement. Though Executive  shall remain employed at Company through the Termination Date, Executive agrees to resign from  any corporate office or official position of any kind that he holds with Company, in each case,  effective as of the Retirement Date; provided, however, that Executive shall remain a director of  the Board until the next annual meeting of the stockholders of BlueLinx Holdings Inc. as further  described in Section 3 below.   DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

2.  Transition Services. Executive will remain President and Chief Executive Officer  of Company until the Retirement Date and will perform such duties and functions in his normal  capacity as the President and Chief Executive Officer.  Thereafter and through the Termination  Date, Executive shall remain an employee of Company and perform such additional services as  the successor President and Chief Executive Officer and/or Board shall reasonably request from  time to time.       3. Continuance as Director.  Executive shall remain a director of BlueLinx Holdings  Inc.’s Board of Directors (“Board”) until the next annual meeting of stockholders of BlueLinx  Holdings Inc. for no additional compensation.  After the Termination Date and for so long as  Executive is a non-employee director of the Board, Executive will be paid as a non-employee  director of the Board under the Board compensation program.  4. Future Cooperation.  Executive agrees that for the period beginning on the  Termination Date and ending on December 31, 2023, upon reasonable advance notice by  Company, Executive will make himself reasonably available to Company for the purposes of: (a)  providing information regarding the projects and files on which Executive worked for the purpose  of transitioning such projects; (b) providing information regarding any other matter, file, project,  customer and/or client with whom or with respect to which Executive was directly involved or  otherwise had knowledge about while employed by, or providing services to, Company; and (c)  cooperating in the investigation, negotiations and/or defense of any claims of which he may have  knowledge, including, but not limited to providing truthful testimony.  In the event Executive is  subpoenaed by any person or entity to give testimony which in any way relates to Executive’s  employment by Company, Executive agrees to provide prompt notice of such request to Company  and will use his reasonable best efforts to make no disclosures until Company has a reasonable  opportunity to contest the right of the requesting person or entity to such disclosure. However, no  notice shall be required if Executive is prohibited by law from providing such notice.  Company  shall promptly reimburse Executive for any reasonable expense that he incurs in connection with  providing the cooperation called for under this Section 4.  5. Compensation.    (a) In exchange for Executive’s transition services contemplated in this  Agreement, Executive’s confirmation of the continued effect of his restrictive covenants, full  release of Company in a form of Release reasonably agreed to between the Company and  Executive (the “Release”) to be executed by Executive, and Executive’s agreement to perform the  other duties and obligations of Executive contained herein, Company will provide the additional  consideration set forth below, subject to ordinary and lawful deductions and Sections 5(b) and (c)  below.     (i) Company shall pay Executive his annual base salary through June  30, 2021 in accordance with Company’s normal bi-weekly payroll practices;  (ii) Company shall pay Executive $20,000 per month and provide such  benefits as other salaried employees of Company receive from July 1, 2021 through  December 31, 2021 for the transition services described in Section 2 above in accordance  with Company’s normal bi-weekly payroll practices;   DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

(iii) Company shall pay to Executive a pro rata bonus, which equals the  bonus that would be payable to Executive under the terms of Company’s annual bonus plan  for fiscal year 2021 had Executive remained employed at Company as President and CEO  through the end of fiscal year 2021 (if any), multiplied by 50%.  The pro rata bonus amount,  if any, shall be based on Executive’s base salary and bonus percentage as of March 31,  2021 and be paid at the time that 2021 annual bonuses are paid to other participants in such  bonus plan;  (iv) (a) Company shall (a) ensure that all performance-based restricted  stock units granted to Executive in 2018 and 2019 continue to vest in accordance with their  terms and, if Executive is no longer employed by Company at the time such restricted stock  units vest, then such restricted stock units shall continue to vest in accordance with their  terms and become non-forfeitable in the same manner and at the same time as if Executive  had remained employed by Company, and (b) ensure that all time-based restricted stock  units granted to Executive in 2018, 2019 and 2020 that are scheduled to vest in (1) 2021  vest in accordance with their terms and become non-forfeitable on their scheduled vesting  date, and (2) 2022 vest and become non-forfeitable on the same scheduled vesting date as  the time-based restricted stock units described in Section 5(a)(iv)(b)(1) above, and  (c) ensure that all other time-based and/or performance-based restricted stock units granted  to Executive as of the date of this Agreement and scheduled to vest after 2022 will be  forfeited on the Termination Date. For purposes of clarity, all restricted stock units held by  Executive as of the date hereof that are scheduled to vest in June 2021 shall not be  considered additional consideration; and  (v) If, after the Termination Date, Executive timely elects to continue  health (medical and dental) plan coverage for himself and/or any qualified beneficiary  under the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA),  Company will pay a portion of the monthly COBRA premiums equal to Company’s portion  of the health insurance premium Company is paying on Executive’s behalf while an active  employee as of the Termination Date for eighteen (18) months following the date  Executive’s participation in Company’s health plans as an active employee ends (or, if  earlier, until Executive becomes eligible for health insurance coverage through a new  employer), along with any monthly administrative charges (up to 2% of the entire monthly  premium), to the extent permitted by law without adverse tax consequences to Company.   During this eighteen (18) month period, Executive will be required to pay the employee  portion of the COBRA premium each month. The portion of the premium Company pays  on Executive’s behalf will be included in Executive’s taxable income.    (b) Notwithstanding anything else contained herein to the contrary, no  payments shall be made or benefits delivered under this Agreement (other than payments required  to be made by Company pursuant to Section 6 below) unless: (i) within twenty-one (21) days of  Executive’s receipt of this Agreement, Executive has signed and delivered to Company this  Agreement and the Release, and Executive does not revoke such Release during the applicable  revocation period, and; (ii) with respect to any payments made or benefits delivered after June 30,  2021, on the Termination Date, Executive re-executes and delivers to Company the Release (the  “Updated Release”).  Executive agrees and acknowledges that he would not be entitled to the  consideration described herein absent execution of this Agreement, the Release, and expiration of  DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

the applicable revocation periods without Executive having revoked the Release, and with respect  to any payments made or benefits delivered after June 30, 2021, the Updated Release.  Any  payments obligated to be made, or benefits to be delivered, under this Agreement within the period  after the Termination Date and prior to the Release Effective Date shall be accumulated and paid  in a lump sum, on the first regular payroll date occurring after the Release Effective Date. The  “Release Effective Date” shall be the day following the expiration of the applicable revocation  period without Executive having elected to revoke the Release.    (c) As a further condition to receipt of the payments and benefits in Section  5(a) above, Executive acknowledges that these payments are in lieu of any other amounts that he  may claim to be owed to him upon the termination of his employment relationship with Company,  other than those specifically set forth in this Agreement, including without limitation any  severance, notice rights, payments (including special or annual bonus), and other amounts to which  Executive may be entitled under his Employment Agreement or the laws of Georgia or any other  jurisdiction, and Executive agrees not to pursue or claim any of the payments, benefits or rights  set forth therein.      (d) If Company is required to prepare an accounting restatement due to material  noncompliance by Company, as a result of misconduct, with any financial reporting requirement  under the federal securities laws, Executive, to the extent required by law, will reimburse Company  for (i) any bonus or other incentive-based or equity-based compensation received by Executive  from Company (including such compensation payable in accordance with this Section 5 and  Section 6) during the 12-month period following the first public issuance or filing with the  Securities and Exchange Commission (whichever first occurs) of the financial document  embodying that financial reporting requirement; and (ii) any profits realized by Executive from  the sale of Company securities during that 12-month period.    6. Other Benefits.  (a) Nothing in this Agreement or the Release shall:    (i) alter or reduce any vested, accrued benefits (if any) Executive may  be entitled to receive under any 401(k) plan established by Company; or    (ii) affect Executive’s right (if any) to elect and pay for continuation of  Executive’s health insurance coverage pursuant to COBRA.    (b) Company shall pay Executive:    (i) any base salary that accrues through the Termination Date and is  unpaid as of the Termination Date; and  DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

(ii) any reimbursable expenses that Executive incurs before the  Termination Date but are unpaid as of the Termination Date (subject to Company’s expense  reimbursement policy).  (c) Company shall continue to provide Executive with customary and  appropriate Directors and Officers Liability Coverage for the six (6) year period which  immediately follows the date that his service as a member of the Board ends.    7. Confidentiality; Non-Solicitation; Continuation of Restrictive Covenants.  (a) Executive acknowledges and agrees that, except as specifically set forth  below, Section 7 of the Employment Agreement (and any related definitions) shall survive the  termination of the Employment Agreement and the termination of his employment and are  incorporated into this Agreement by reference.  Executive hereby agrees to continue to abide by  the obligations in Section 7 of the Employment Agreement, as amended hereby.    (b) Confidential Information and Trade Secrets.  Section 7(a)(i) of the  Employment Agreement is hereby amended and restated as follows:  “(i) Executive shall hold in a fiduciary capacity for the benefit of  Company all Confidential Information and Trade Secrets.  During Executive’s  employment and for a period of two (2) years immediately following his termination of  employment for any reason, Executive shall not, without the prior written consent of  Company or as may otherwise be required by law or legal process, use, communicate or  divulge Confidential Information other than as necessary to perform Executive’s duties for  Company; provided, however, that if the Confidential Information is deemed a trade secret  under Georgia law, then the period for nondisclosure shall continue for the applicable  period under Georgia Trade Secret laws in effect at the time of Executive’s termination.  In  addition, except as necessary to perform Executive’s duties for Company, during  Executive’s employment and thereafter for the applicable period under the Georgia Trade  Secret laws in effect at the time of Executive’s termination, Executive will not, directly or  indirectly, transmit or disclose any Trade Secrets to any person or entity, and will not,  directly or indirectly, make use of any Trade Secrets, for himself or herself or any other  person or entity, without the express written consent of Company.  This provision will  apply for so long as a particular Trade Secret retains its status as a trade secret under  applicable law.  The protection afforded to Trade Secrets and/or Confidential Information  by this Agreement is not intended by the parties hereto to limit, and is intended to be in  addition to, any protection provided to any such information under any applicable federal,  state or local law.  Pursuant to the Defend Trade Secrets Act of 2016, Executive understands  that:  An individual may not be held criminally or civilly liable under any federal  or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence  to a federal, state, or local government official, either directly or indirectly, or to an  DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation  of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit  or other proceeding.  Further, an individual who files a lawsuit for retaliation by an employer for  reporting a suspected violation of law may disclose the employer's trade secrets to the  attorney and use the trade secret information in the court proceeding if the individual: (a)  files any document containing the trade secret under seal; and (b) does not disclose the  trade secret, except pursuant to court order.”  (c) Definitions. For purposes of this Agreement (including Section 7(b)  hereof), the following capitalized terms shall have the following meanings.  “Confidential Information” means knowledge or data relating to Company that is  not generally known to persons not employed or otherwise engaged by Company, is not generally  disclosed by Company, and is the subject of reasonable efforts to keep it confidential. Confidential  Information includes, but is not limited to, information regarding product or service cost or pricing,  information regarding personnel allocation or organizational structure, information regarding the  business operations or financial performance of Company, sales and marketing plans, and strategic  initiatives (independent or collaborative), information regarding existing or proposed methods of  operation, current and future development and expansion or contraction plans, sale/acquisition  plans and non-public information concerning the legal or financial affairs of Company.   Confidential Information does not include information that has become generally available to the  public by the act of one who has the right to disclose such information without violating any right  or privilege of Company.  This definition is not intended to limit any definition of confidential  information or any equivalent term under applicable federal, state or local law.    “Person” means:  any individual or any corporation, partnership, joint  venture, limited liability company, association or other entity or enterprise.  “Trade Secrets” means all secret, proprietary or confidential information  regarding Company, BHI or any of their respective subsidiaries and affiliates or that meets the  definition of “trade secrets” within the meaning set forth in O.C.G.A. § 10-1-761.  8. Governing Law.  This Agreement shall be deemed to have been jointly drafted by  the Parties and shall not be construed against either Party. This Agreement shall be governed by  the law of the State of Georgia, and the Parties agree that any actions arising out of or relating to  this Agreement or Executive’s employment with Company must be brought exclusively in either  the United States District Court for the Northern District of Georgia, or the State or Superior Courts  of Cobb County, Georgia. Notwithstanding the pendency of any proceeding, either Party shall be  entitled to injunctive relief in a state or federal court located in Cobb County, Georgia upon a  showing of irreparable injury.  The Parties consent to personal jurisdiction and venue solely within  these forums and solely in Cobb County, Georgia and waive all otherwise possible objections  thereto.  The existence of any claim or cause of action by Executive against Company, including  any dispute relating to the termination of Executive’s employment or under this Agreement, shall  not constitute a defense to enforcement of said covenants by injunction.    DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

9. Severability.  Whenever possible, each provision of this Agreement is to be  interpreted in such manner as to be effective and valid under applicable law, but if any provision  of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable  law or rule in any jurisdiction, that invalidity, illegality, or unenforceability is not to affect any  other provision or any other jurisdiction, and this Agreement is to be reformed, construed and  enforced in the jurisdiction as if the invalid, illegal or unenforceable provision had never been   contained  therein.  To the extent any provision of the Release is deemed to be illegal, invalid, or  unenforceable and Executive sues the Company, then Company may, at its sole option, void this  Agreement, in which case Executive shall immediately return any payments received under  Section 5 above to Company.  10. Return of all Property and Information of Company.  Executive agrees to return  or destroy all property of Company on or before the Termination Date that is not otherwise utilized  to fulfil Executive’s duties as a member of the Board.  Such property includes, but is not limited  to, the original and any copy (regardless of the manner in which it is recorded) of all non-public  information provided by Company or any subsidiary thereof to Executive or which Executive has  developed or collected in the scope of Executive’s employment related to Company as well as all  Company-issued equipment, supplies, accessories, vehicles, keys, instruments, tools, devices,  computers, cell phones, electronic devices, materials, documents, plans, records, notebooks,  drawings, or papers.  Executive may only retain information relating to Executive’s continued  service as a member of the Board and Executive’s benefit plans and compensation to the extent  needed to prepare Executive’s tax returns.    11. No Reliance Upon Other Statements.  This Agreement is entered into without  reliance upon any statement or representation of any Party hereto or any Party hereby released  other than the statements and representations contained in writing in this Agreement and the  enclosed Release.    12. Entire Agreement.  This Agreement, the Release, and Section 7 of the  Employment Agreement (which are incorporated herein by this reference), contain the entire  agreement and understanding concerning the subject matter hereof between the Parties hereto.  No  waiver, termination or discharge of this Agreement, or any of the terms or provisions hereof, shall  be binding upon either Party hereto unless confirmed in writing.  This Agreement may not be  modified or amended, except by a writing executed by both Parties hereto.  No waiver by either  Party hereto of any term or provision of this Agreement or of any default hereunder shall affect  such Party’s rights thereafter to enforce such term or provision or to exercise any right or remedy  in the event of any other default, whether or not similar.  Notwithstanding the foregoing, the  Employment Agreement will remain in effect until the Retirement Date to the extent the terms of  the Employment Agreement are not inconsistent with the terms of this Agreement and, if  inconsistent, the terms of this Agreement will control.    13. Further Assurance.  Upon the reasonable request of the other Party, each Party  hereto agrees to take any and all actions, including, without limitation, the execution of certificates,  documents or instruments, necessary or appropriate to give effect to the terms and conditions set  forth in this Agreement.  DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

14. No Pending Claims or Assignments.  Neither Party may assign this Agreement,  in whole or in part, without the prior written consent of the other Party, and any attempted  assignment not in accordance herewith shall be null and void and of no force or effect. Executive  represents and warrants that Executive has no claims or causes of action against Company which  are not released in the Release. Executive also represents and warrants that Executive has not filed  any claims, charges, lawsuits, or similar matters of any kind against Company in any forum, and  that Company’s obligations under this Agreement are conditioned upon this representation.  15. Binding Effect.  This Agreement shall be binding on and inure to the benefit of the  Parties and their respective heirs, representatives, successors and permitted assigns.  16. Indemnification.  Company understands and agrees that any indemnification  obligations under its governing documents or the indemnification agreement between Company  and Executive with respect to Executive’s service as an officer of Company remain in effect and  survive the termination of Executive’s employment under this Agreement as set forth in such  governing documents or indemnification agreement.  17. Nonqualified Deferred Compensation.  (a) Any payment or benefit provided pursuant to or in connection with this  Agreement is intended to comply with the “short term deferral” exception from Section 409A of  the Internal Revenue Code of 1986 (“Section 409A”) specified in Treas. Reg. § 1.409A-1(b)(4)  (or any successor provision) or the “separation pay plan” exception specified in Treas. Reg. §  1.409A-1(b)(9) (or any successor provision), or both of them, and shall be interpreted in a manner  consistent with the applicable exceptions.  If any payment or benefit provided pursuant to or in  connection with this Agreement is considered to be deferred compensation subject to Section  409A, it shall be paid and provided in a manner, and at such time and form, as complies with the  applicable requirements of Section 409A to avoid the unfavorable tax consequences provided  therein for non-compliance. Executive and Company agree that Executive’s termination of  employment is an involuntary separation from service under Section 409A.    (b) Neither Company nor Executive shall take any action to accelerate or delay  the payment of any monies and/or provision of any benefits in any manner which would not be in  compliance with Section 409A (including any transition or grandfather rules thereunder).    (c) Because Executive is a “specified employee” for purposes of Section  409A(a)(2)(B)(i), any payments or benefits provided pursuant to or in connection with Executive’s  “Separation from Service” (as determined for purposes of Section 409A) that constitute deferred  compensation subject to Section 409A (“Covered Payments”) shall not be made until the earlier  of (i) Executive’s death or (ii) six months after Executive’s Separation from Service (the “409A  Deferral Period”) as required by Section 409A.  Covered Payments otherwise due to be made in  installments or periodically during the 409A Deferral Period (“Delayed Payments”) shall be  accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of  the payment shall be made as otherwise scheduled.  Any Delayed Payments in the form of benefits  subject to the rule may be provided under the 409A Deferral Period at Executive’s expense, with  Executive having a right to reimbursement from Company once the 409A Deferral Period ends,  and the balance of the benefits shall be provided as otherwise scheduled.  Any Delayed Payments  DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

shall bear interest at the United States 5-year Treasury Rate plus 2%, which accumulated interest  shall be paid to Executive as soon as the 409A Deferral Period ends.  (d) For purposes of this Agreement, all rights to payments and benefits  hereunder shall be treated as rights to receive a series of separate payments and benefits to the  fullest extent allowed by Section 409A.  (e) If any payment or benefit under this Agreement is subject to and not exempt  from Section 409A and is contingent on the delivery of a release by Executive and such payment  or benefit could be made in either of two years, the payment will be made or the benefit will be  delivered in the subsequent year to the extent necessary to comply with Section 409A.  (f) Notwithstanding any other provision of this Agreement, Company shall not  be liable to Executive if any payment or benefit which is to be provided pursuant to this Agreement  and which is considered deferred compensation subject to Section 409A otherwise fails to comply  with, or be exempt from, the requirements of Section 409A.  Executive shall be solely responsible  for the tax consequences with respect to any payment or benefit provided pursuant to or in  connection with this Agreement, and in no event shall Company have any responsibility or liability  if this Agreement does not meet any applicable requirements of Section 409A.  18. Counterparts.  This Agreement may be executed in any number of counterparts  and by the Parties hereto in separate counterparts, with the same effect as if the Parties had signed  the same document.  All such counterparts shall be deemed an original, shall be construed together,  and shall constitute one and the same instrument, with original signature, photocopy signature, fax  signature, or electronic signature permitted and accepted.  19. Protected Rights.  Executive understands that nothing contained in this Agreement  limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity  Commission, the National Labor Relations Board, the Occupational Safety and Health  Administration, the Securities and Exchange Commission or any other federal, state or local  governmental agency or commission (“Government Agencies”).  Executive further understands  that this Agreement does not limit Executive’s ability to communicate with any Government  Agencies or otherwise participate in any investigation or proceeding that may be conducted by any  Government Agencies, including providing documents or other information, without notice to  Company.  This Agreement does not limit Executive’s right to receive an award for information  provided to any Government Agencies.   [Signatures Appear on Following Page]  DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 

 

IN WITNESS WHEREOF, the Parties have executed, or caused their duly  authorized representatives to execute, this Agreement as of the day and year first above written.      “Executive”              MITCHELL B. LEWIS      “Company”    BLUELINX CORPORATION      By:        Name:         Title:         DocuSign Envelope ID: 64FD2F5B-9B7A-4B97-8625-78EDBBD0A716 Chairman of Board of Directors Kim S. Fennebresque

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