Document:

Exhibit 10.2

 

EXECUTION VERSION

 

SALE, CONTRIBUTION AND MASTER PARTICIPATION
AGREEMENT

 

by and between

 

OXFORD SQUARE FUNDING 2018, LLC,

as the Buyer

 

and

 

OXFORD SQUARE CAPITAL CORP., 

as the Seller

 

October 12, 2018

 

     

     

    

 

TABLE OF CONTENTS

 

	 	 	 	Page
	 	 	 	 
	ARTICLE
    I GENERAL	 	1
	Section 1.1	Defined Terms	 	1
	Section 1.2	Other Terms	 	3
	Section 1.3	Computation of Time
    Periods	 	3
	Section 1.4	Interpretation	 	3
	 	 	 
	ARTICLE
    II SALE, TRANSFER AND ASSIGNMENT	 	4
	Section 2.1	Sale, Transfer and
    Assignment	 	4
	Section 2.2	Purchase Price	 	7
	Section 2.3	Payment of Purchase
    Price	 	7
	Section 2.4	Actions Pending
    Completion of Assignments of Collateral Loans	 	8
	 	 	 	 
	ARTICLE
    III CONDITIONS PRECEDENT	 	8
	Section 3.1	Condition Precedent
    to Closing and Purchase	 	8
	 	 	 	 
	ARTICLE
    IV REPRESENTATIONS AND WARRANTIES	 	9
	Section 4.1	Seller’s Representations
    and Warranties	 	9
	Section 4.2	Representations
    and Warranties of the Seller Relating to the Agreement and the Transferred Assets	 	14
	Section 4.3	Representations
    and Warranties of the Buyer	 	15
	 	 	 	 
	ARTICLE
    V COVENANTS	 	17
	Section 5.1	Affirmative Covenants
    of the Seller	 	17
	Section 5.2	Negative Covenants
    of the Seller	 	20
	 	 	 	 
	ARTICLE
    VI REMOVAL OR REPLACEMENT OF WARRANTY COLLATERAL LOANS 	 	21
	 
	ARTICLE VII ADDITIONAL RIGHTS AND
    OBLIGATIONS IN RESPECT OF THE
	 	TRANSFERRED ASSETS	 	22
	Section 7.1	Rights of the Buyer	 	22
	Section 7.2	Responsibilities
    of the Seller	 	23
	Section 7.3	Rights With Respect
    to Loan Files	 	23
	Section 7.4	Notice to Administrative
    Agent and Collateral Agent	 	23
	 	 	 
	ARTICLE
    VIII SURVIVAL	 	23
	Section 8.1	Survival of Certain
    Provisions	 	23
	 	 	 
	ARTICLE
    IX INDEMNIFICATION	 	24
	Section 9.1	Indemnification
    by the Seller	 	24
	Section 9.2	Assignment of Indemnities	 	26

 

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TABLE OF CONTENTS

 

	 	 	 	Page
	 	 	 	 
	ARTICLE X MISCELLANEOUS	 	26
	Section 10.1	Amendments and Waivers	 	26
	Section 10.2	Notices, Etc.	 	26
	Section 10.3	Binding Effect; Benefit of Agreement	 	28
	Section 10.4	GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE	 	28
	Section 10.5	WAIVER OF JURY TRIAL	 	28
	Section 10.6	Costs, Expenses and Taxes	 	28
	Section 10.7	No Proceedings	 	29
	Section 10.8	Recourse Against Certain Parties	 	29
	Section 10.9	Protection of Right, Title and Interest in the Transferred Assets; Further Action Evidencing Purchases	 	30
	Section 10.10	Execution in Counterparts; Severability; Integration	 	31
	Section 10.11	Waiver of Setoff	 	31
	Section 10.12	Heading and Exhibits	 	31
	Section 10.13	Rights of Inspection	 	32
	Section 10.14	Assignment	 	32
	Section 10.15	No Waiver; Cumulative Remedies	 	32

 

SCHEDULES

 

	SCHEDULE I	Loan List
	SCHEDULE II	First Amendment Effective Date Participations

  

    ii 

     

    

 

THIS SALE, CONTRIBUTION
AND MASTER PARTICIPATION AGREEMENT (such agreement as amended, modified, supplemented or restated from time to time, the “Agreement”)
is dated as of October 12, 2018 (the “Purchase Date”), by and between OXFORD SQUARE CAPITAL CORP., a
Maryland corporation, as the seller (in such capacity, the “Seller”) and OXFORD SQUARE FUNDING 2018, LLC,
a Delaware limited liability company, as the buyer (in such capacity, the “Buyer”).

 

W I T N E S S ET H:

 

WHEREAS, the
Buyer desires to purchase from the Seller and the Seller desires to sell to the Buyer certain assets originated, purchased or underwritten
by the Seller in its normal course of business, together with, among other things, the related rights of payment thereunder and
the interest of the Seller in the Underlying Assets and other interests securing the payments to be made under such loans.

 

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

 

Article
I

 

GENERAL

 

Section
1.1           Defined Terms.

 

Capitalized terms used
but not defined herein have the meanings provided in the Credit and Security Agreement (as defined below). As used herein, the
following terms have the meanings provided below.

 

“Agreement”:
Defined in the Preamble.

 

“Buyer”:
Defined in the Preamble.

 

“Collateral
Loan”: A commercial loan or a Participation with respect to a commercial loan purchased by the Buyer pursuant to this
Agreement.

 

“Credit and
Security Agreement”: The Credit and Security Agreement, dated as of June 21, 2018 (as amended by the First Amendment
to Credit and Security Agreement, dated as of October 12, 2018, as may be further amended, restated, supplemented or otherwise
modified from time to time), among Buyer, as the borrower, the Seller, as the collateral manager, each of the Lenders from time
to time party thereto, Citibank, N.A., as the administrative agent, The Bank of New York Mellon Trust Company, National Association,
as the collateral agent and custodian, and Oxford Square Capital Corp., as the equityholder.

 

“Early Termination”:
Defined in Section 8.1.

 

     

     

    

 

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

 

“Insolvency
Proceeding”: Any case, action or proceeding before any court or other Governmental Authority relating to any Insolvency
Event.

 

“Loan List”:
The list of Collateral Loans provided by the Seller to the Buyer on the Purchase Date and incorporated as Schedule I to
this Agreement by reference.

 

“Material
Adverse Effect”: (a) With respect to the Seller, a material adverse effect on (i) the business, assets, financial condition,
operations, performance or properties of the Seller, (ii) the validity, enforceability or collectability of this Agreement against
Seller, (iii) the rights and remedies of Buyer with respect to matters arising under this Agreement, (iv) the ability of Seller
to perform its obligations under this Agreement, or (v) the status, existence, perfection, priority or enforceability of Buyer’s
interest in the Transferred Assets and (b) with respect to the Buyer, a material adverse effect on (i) the business, assets, financial
condition, operations, performance or properties of the Buyer, (ii) the validity, enforceability or collectability of this Agreement
against Buyer, (iii) the rights and remedies of Seller with respect to matters arising under this Agreement and (iv) the ability
of Buyer to perform its obligations under this Agreement.

 

“Participation”:
Defined in Section 2.4(a).

 

“Purchase”:
The purchase by the Buyer of Transferred Assets from the Seller pursuant to Section 2.1.

 

“Purchase
Date”: Defined in the Preamble.

 

“Purchase
Price”: Defined in Section 2.2.

 

“Repurchase
Amount”: For any Warranty Collateral Loan for which a payment or substitution is being made pursuant to this Agreement,
as of any time of determination, the sum of (i) the greater of (a) an amount equal to the Purchase Price paid by the Buyer for
such Collateral Loan (excluding purchased accrued interest and original issue discount) less all payments of principal received
in connection with such Warranty Collateral Loan since the date it became a Transferred Asset and (b) the Asset Value of such Warranty
Collateral Loan, and (ii) any accrued and unpaid interest thereon since the last Payment Date; provided, however, that the Seller
and/or the Buyer may elect to designate a portion of the Repurchase Amount for such Warranty Collateral Loan in an amount not to
exceed the Returned Portion Limit as a return of capital to the Seller, in its capacity as the sole member of the Buyer, and, in
such event, the Repurchase Amount payable with respect to such Warranty Collateral Loan shall be reduced by that portion of the
Repurchase Amount of such Warranty Collateral that was so returned.

 

“Returned
Portion Limit”: For any Warranty Collateral Loan for which a payment or substitution is being made pursuant to this Agreement,
(a) the Principal Balance of such Warranty Collateral Loan less (b) the result of (i) the Asset Value for such Warranty
Collateral Loan multiplied by (ii) the Advance Rate as of the date it became a Transferred Asset.

 

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“Seller”:
Defined in the Preamble.

 

“Substituted
Collateral Loan”: Any Warranty Collateral Loan with respect to which the Seller has substituted in a replacement Collateral
Loan pursuant to Article VI.

 

“Transferred
Assets”: Defined in Section 2.1(a).

 

“Underlying
Assets”: With respect to a Collateral Loan, any property or other assets designated and pledged as collateral to secure
repayment of such Collateral Loan, including, without limitation, to the extent provided for in the relevant Underlying Loan Agreement,
a pledge of the stock, membership or other ownership interests in the related Obligor and all Proceeds from any sale or other disposition
of such property or other assets.

 

“Warranty
Event”: As to any Collateral Loan, (a) a breach of any representation or warranty relating to such Collateral Loan under
this Agreement (other than any representation or warranty that the Collateral Loan satisfies the criteria of the definition of
Eligible Loan) and the failure of the Buyer to cure such breach, or cause the same to be cured, within thirty (30) days after the
earlier to occur of the Buyer’s receipt of notice thereof from the Administrative Agent or the Buyer becoming aware thereof
or (b) in the case of a Participation, such Participation is not elevated to a full assignment under Section 2.4 within
45 days of the Purchase Date.

 

“Warranty
Collateral Loan”: Any Collateral Loan (a) that fails to satisfy any criteria set forth in clause (B) of the definition
of Eligible Loan as of the date of acquisition of such Loan, or (b) with respect to which a Warranty Event has occurred.

 

Section
1.2           Other Terms.

 

All accounting terms
used but not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in
the State of New York, and used but not specifically defined herein, are used herein as defined in such Article 9.

 

Section
1.3           Computation of Time Periods.

 

Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but excluding.”

 

Section
1.4           Interpretation.

 

In this Agreement,
unless a contrary intention appears:

 

(i)            the
singular number includes the plural number and vice versa;

 

(ii)           reference
to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted
by this Agreement;

 

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(iii)          reference
to any gender includes each other gender;

 

(iv)          reference
to day or days without further qualification mean calendar days;

 

(v)           reference
to any time means New York City, New York time;

 

(vi)          reference
to any agreement (including any Facility Document), document or instrument means such agreement, document or instrument as amended,
modified, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof and, if applicable,
the terms of the other Facility Documents, and reference to any promissory note includes any promissory note that is an extension
or renewal thereof or a substitute or replacement therefor;

 

(vii)         reference
to any delivery or transfer to the Custodian with respect to the Collateral in this Agreement means delivery or transfer to the
Custodian for the benefit of the Collateral Agent on behalf of the Secured Parties;

 

(viii)        reference
to “including” means “including, without limitation”; and

 

(ix)           reference
to any Applicable Law means such Applicable Law as amended, modified, codified, replaced or reenacted, in whole or in part, and
in effect from time to time, including rules and regulations promulgated thereunder, and reference to any Section or other provision
of any Applicable Law means that provision of such Applicable Law from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or reenactment of such Section or other provision.

 

Article
II

 

SALE, TRANSFER AND ASSIGNMENT

 

Section
2.1           Sale, Transfer and Assignment.

 

(a)           On
the terms and subject to the conditions set forth in this Agreement (including the conditions to Purchase set forth in Article
III), on the Purchase Date, the Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Buyer, and
the Buyer hereby purchases and takes from the Seller, in its capacity as lender of record, all right, title and interest (whether
now existing, owned or hereafter acquired or arising and wherever located) of the Seller, in the property identified in clauses
(i) through (iii) below and other property consisting of, arising out of, or related to any of the following (but excluding any
such property constituting Excluded Amounts that are for the account of Seller) (collectively, the “Transferred Assets”):

 

(i)            The
Collateral Loans identified by the Seller and which are listed on the Loan List attached hereto, including for the avoidance of
doubt any Participations of Collateral Loans which are listed on Schedule II attached hereto (pending the effectiveness of the
assignment thereof in accordance with Section 2.4) and any Substituted Collateral Loans transferred to the Buyer in connection
with a Warranty Event, together with all monies due or to become due in payment of such Collateral Loans on and after the Purchase
Date, including all Collections;

 

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(ii)           all
Underlying Loan Agreements, Underlying Notes and Related Documents (including, without limitation, any participation or assignment
agreements or any similar agreements related thereto) with respect to the Collateral Loans (including for the avoidance of doubt
any Participations) referred to in clause (i) above;

 

(iii)          all
Liens, property, guaranties, supporting obligations, insurance and other agreements or arrangements of whatever character from
time to time supporting or securing payment of any of the foregoing; and

 

(iv)          all
income and Proceeds of the foregoing.

 

Without limiting the
foregoing, the term “Transferred Assets” (i) shall, for all purposes of this Agreement, be deemed to include any Collateral
Loan (including for the avoidance of doubt any Participation with respect thereto) acquired by the Buyer in a transaction in which
the Buyer is the designee of the Seller under the instruments of conveyance relating to the applicable Collateral Loan (including
for the avoidance of doubt any Participation with respect thereto), subject in each case to the terms of this Agreement (including
the representations, warranties, covenants and indemnities of the Seller set forth herein) and (ii) shall include only the rights
and obligations of the Seller in its capacity as lender of record and only with respect to the Collateral Loans described on the
Loan List (and shall exclude any rights or obligations (i) as administrative agent for any Collateral Loan and (ii) as lender under
any loan not included in the Loan List).

 

(b)           The
Seller shall be deemed to have certified, and hereby does certify, with respect to the Transferred Assets to be purchased by the
Buyer on the Purchase Date, that its representations and warranties contained in Article IV are true and correct on and
as of the Purchase Date. The Seller and the Buyer acknowledge that the representations and warranties of the Seller in Article
IV will run to and be for the benefit of the Collateral Agent on behalf of the Secured Parties, and the Collateral Agent on
behalf of the Secured Parties may enforce, directly without joinder of the Buyer, the repurchase obligations of the Seller with
respect to breaches of certain of the representations and warranties set forth herein.

 

(c)           Except
as specifically provided in this Agreement, the sale and purchase of Transferred Assets under this Agreement shall be without recourse
to the Seller; it being understood that the Seller shall be liable to the Buyer for all representations, warranties, covenants
and indemnities made by the Seller pursuant to the terms of this Agreement.

 

(d)           Except
for future funding obligations under any Transferred Assets, the Buyer, the Collateral Agent, the Administrative Agent, each Lender
and the other Secured Parties shall not have any obligation or liability to any Obligor (including any obligation to perform any
of the obligations of the Seller (including any obligation with respect to any other related agreements)). Except as set forth
in the immediately preceding sentence, no such obligation or liability is intended to be assumed by the Buyer, the Collateral Agent,
the Administrative Agent, the Lenders or the Secured Parties, and any such assumption is expressly disclaimed.

 

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(e)           In
connection with the Purchase of Transferred Assets hereunder, the Seller shall deliver, or cause to be delivered, to the Custodian
no later than 12:00 noon on the Purchase Date (i) the related Document Checklist and (ii) each of the other Required Loan Documents.
Promptly after the Purchase of Transferred Assets hereunder, the Seller shall deliver, or cause to be delivered, to the Collateral
Agent with a copy to the Custodian and the Administrative Agent a properly completed Trade Confirmation, if any, on which the Custodian
may conclusively rely without further inquiry or investigation, and shall deliver to the Custodian the Loan Files for the Transferred
Assets.

 

(f)           In
connection with the transfers contemplated by this Agreement, the Seller hereby grants to each of the Buyer, the Collateral Agent
and the Collateral Manager an irrevocable, non–exclusive license to use, without royalty or payment of any kind, all software
used by the Seller to account for the Transferred Assets, to the extent necessary to allow the Buyer, the Collateral Agent or the
Collateral Manager to administer the Transferred Assets, whether such software is owned by the Seller or is owned by others and
used by the Seller under license agreements with respect thereto; provided that should the consent of any licensor of such software
be required for the grant of the license described herein, to be effective, the Seller hereby agrees that upon the request of the
Buyer or the Collateral Agent, the Seller will use its best reasonable efforts to obtain the consent of such third–party
licensor either before the First Amendment Effective Date or as soon as possible thereafter. The license granted hereby shall be
irrevocable until the Final Maturity Date and shall terminate on the date this Agreement terminates in accordance with its terms.
The Seller shall take such action requested by the Buyer or the Collateral Agent, from time to time hereafter, that may be necessary
or appropriate to ensure that the Buyer has an enforceable ownership interest and that Collateral Agent (and its assigns), for
the benefit of the Secured Parties, under the Credit and Security Agreement have an enforceable security interest in the Transferred
Assets purchased by the Buyer as contemplated by this Agreement.

 

(g)           In
connection with the Purchase by the Buyer of the Transferred Assets as contemplated by this Agreement, the Seller shall, at its
own expense, indicate clearly and unambiguously in its computer files and its financial statements, on or prior to the Purchase
Date, that the Transferred Assets have been purchased by the Buyer in accordance with this Agreement.

 

(h)           The
Seller agrees to deliver to the Buyer, the Administrative Agent, the Collateral Agent and the Custodian on or before the Purchase
Date a computer file containing a true, complete and correct Loan List of all Collateral Loans to be sold or otherwise conveyed
hereunder on the Purchase Date (which shall contain the related Principal Balance, Loan number (if any) and Obligor name for each
Collateral Loan) as of the Purchase Date. Such file or list shall be delivered to the Buyer as confidential and proprietary, and
is automatically incorporated into and made a part of this Agreement.

 

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(i)            It
is the intention of the parties hereto that the conveyance of all right, title and interest of the Seller in and to any Transferred
Assets to the Buyer as provided in this Section 2.1 shall constitute an absolute transfer conveying good title, free and
clear of any Lien (other than Permitted Liens) and that the Transferred Assets shall not be part of the Seller’s bankruptcy
estate in the event of an Insolvency Event with respect to the Seller. Furthermore, it is not intended that such conveyance be
deemed a pledge of the Collateral Loans and the other Transferred Assets to the Buyer to secure a debt or other obligation of the
Seller. If, however, notwithstanding the intention of the parties, the conveyance provided for in this Section 2.1 is determined
to be a transfer for security, then this Agreement shall constitute a “security agreement” within the meaning of Article
9 of the UCC and the Seller shall be deemed to have granted (and hereby grants) to the Buyer a duly perfected, first priority “security
interest” within the meaning of Article 9 of the UCC in all right, title and interest in and to the Transferred Assets, now
existing and hereafter created, to secure the prompt and complete payment of a loan deemed to have been made in an amount equal
to the aggregate Purchase Price of the Transferred Assets together with all of the other obligations of the Seller hereunder. The
Seller and the Buyer shall file or cause to be filed a UCC-1 financing statement naming the Seller, as debtor, the Buyer, as secured
party, and the Collateral Agent, as assignee secured party, listing all of the Transferred Assets pledged hereunder as collateral
thereunder. The Buyer shall have, in addition to the rights and remedies which it may have under this Agreement, all other rights
and remedies provided to a secured creditor under the UCC and other Applicable Law, which rights and remedies shall be cumulative.

 

Section
2.2           Purchase Price.

 

The purchase price
for each Transferred Asset sold to the Buyer by the Seller under this Agreement shall be a dollar amount equal to the “cost”
therefor, as set forth on Schedule I attached hereto (the “Purchase
Price”).

 

Section
2.3           Payment of Purchase Price.

 

(a)           The
Purchase Price for the Transferred Assets sold by the Seller to the Buyer on the Purchase Date shall be paid in a combination of
(i) immediately available funds and (ii) if the Buyer does not have sufficient funds to pay the full amount of the Purchase Price,
by means of a capital contribution by the Seller to the Buyer.

 

(b)           Notwithstanding
any provision herein to the contrary, the Seller may on the Purchase Date elect to designate all or a portion of the Transferred
Assets proposed to be transferred to the Buyer on such date as a capital contribution to the Buyer. In such event, the cash portion
of the Purchase Price payable with respect to such transfer shall be reduced by that portion of the Purchase Price of the Transferred
Assets that was so contributed; provided that Transferred Assets contributed to the Buyer as capital shall constitute Transferred
Assets for all purposes of this Agreement and shall be subject to all representations, warranties, covenants and indemnities hereunder
relating to the Transferred Assets.

 

(c)           Upon
the payment of the Purchase Price for the Purchase, title to the Transferred Assets included in the Purchase shall vest in the
Buyer (subject, in the case of any Participation, to the effectiveness of the assignment of the related Collateral Loan in accordance
with Section 2.4), whether or not the conditions precedent to the Purchase and the other covenants and agreements contained
herein were in fact satisfied; provided that the Buyer shall not be deemed to have waived any claim it may have under this Agreement
for the failure by the Seller in fact to satisfy any such condition precedent, covenant or agreement.

 

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Section
2.4           Actions Pending Completion of Assignments of Collateral Loans.

 

(a)           With
respect to the Collateral Loans identified on Schedule II hereto, pending the receipt of any required consents to, and the
effectiveness of, the assignment of each such Collateral Loan from the Seller to the Buyer in accordance with the applicable underlying
instrument, the Seller hereby sells to the Buyer an undivided 100% participation in such Collateral Loan and the related Transferred
Assets (each, a “Participation”). The Participations will not include any rights that are not permitted to be
participated pursuant to the terms of the underlying instruments. Except as specifically provided in this Agreement, such sale
of the Participations shall be without recourse to the Seller (including, without limitation, with regard to collectability), and
shall constitute an absolute sale of each such Participation. Each of the Participations has the following characteristics: (i)
the Participation represents an undivided participating interest in 100% of the underlying Collateral Loan and its proceeds (including
Collections); (ii) the Seller does not provide any guaranty of payments to the holder of the Participation or other form of recourse
(except as specifically provided in this Agreement) or credit support; and (iii) the Participation represents a pass through of
all of the payments made on the Collateral Loan (including the Collections) and will last for the same length of time as such Collateral
Loan. For the avoidance of doubt, each Participation will terminate automatically upon the settlement of the assignment of the
underlying Collateral Loan.

 

(b)           Each
Party shall use commercially reasonable efforts to, as soon as reasonably practicable after the Purchase Date, but in any event
no later than 45 days after the Purchase Date, cause the Buyer to become a lender under the underlying instrument with respect
to the Seller’s interest in the applicable Collateral Loan and take such action as shall be mutually agreeable in connection
therewith and in accordance with the terms and conditions of the underlying instrument and consistent with the terms of this Agreement.

 

(c)           Pending
settlement of the assignment of a Collateral Loan in accordance with the applicable underlying instruments, the Seller shall comply
with any written instructions provided to the Seller by or on behalf of the Buyer with respect to voting rights to be exercised
by holders of the applicable Collateral Loan, other than with respect to any voting rights that are not permitted to be participated
pursuant to the terms of the applicable underlying instrument (and such restrictions, requirements or prohibitions are hereby incorporated
by reference as if set forth herein).

 

Article
III

 

CONDITIONS PRECEDENT

 

Section
3.1           Condition Precedent to Closing and Purchase.

 

The closing and Purchase
hereunder are subject to the satisfaction of the following conditions precedent:

 

(a)           counterparts
of this Agreement executed on behalf of the Seller shall have been delivered to the Buyer.

 

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(b)           all
representations and warranties of the Seller contained in Sections 4.1 and 4.2 shall be true and correct in all material
respects on and as of the Purchase Date;

 

(c)           the
Seller shall have delivered to the Buyer a Loan List that is true, accurate and complete in all respects as of the Purchase Date
and the Buyer shall have consented to the Purchase of such Transferred Assets;

 

(d)           on
and as of the Purchase Date, the Seller shall have performed all of the covenants and agreements required to be performed by it
on or prior to such date pursuant to the provisions of this Agreement;

 

(e)           no
Applicable Law shall prohibit or enjoin, and no order, judgment or decree of any federal, state or local court or governmental
body, agency or instrumentality shall prohibit or enjoin, the making of the Purchase by the Buyer in accordance with the provisions
hereof; and

 

(f)            the
Seller shall have paid all fees, costs and expenses required to be paid by it on the Purchase Date.

 

Article
IV

 

REPRESENTATIONS AND WARRANTIES

 

Section
4.1           Seller’s Representations and Warranties.

 

As of the Purchase
Date, the Seller represents and warrants to the Buyer for the benefit of the Buyer and each of its successors and assigns that:

 

(a)           Organization
and Good Standing. The Seller has been duly organized, and is validly existing as a corporation in good standing under the
laws of the State of Maryland, with all requisite corporate power and authority to own or lease its properties and conduct its
business as such business is presently conducted, and had at all relevant times, and now has, all necessary power, authority and
legal right to acquire, own, sell, underwrite, refer, designate and grant interests in the Transferred Assets.

 

(b)           Due
Qualification. The Seller has obtained all necessary qualifications, licenses and approvals, in all jurisdictions in which
the ownership or lease of property or the conduct of its business requires such qualification, licenses or approvals, except where
the failure to be so qualified, licensed or approved would not have a Material Adverse Effect with respect to the Seller.

 

(c)           Power
and Authority; Due Authorization; Execution and Delivery. The Seller (i) has all necessary corporate power, authority and legal
right to (a) execute and deliver this Agreement, (b) carry out the terms of this Agreement, and (c) acquire, own, sell, underwrite,
refer, designate and grant interests in the Transferred Assets on the terms and conditions provided herein, and (ii) has duly authorized
by all necessary corporate action the execution, delivery and performance of this Agreement and the acquisition, sale, underwriting,
referral, designation and grant of an interest in the Transferred Assets on the terms and conditions herein provided. This Agreement
has been duly executed and delivered by the Seller.

 

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

 

(e)           No
Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof will
not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, the Seller’s Constituent Documents or any contractual obligation of the Seller, (ii) result
in the creation or imposition of any Lien upon any of the Seller’s properties pursuant to the terms of any such contractual
obligation, other than this Agreement, or (iii) violate any Applicable Law.

 

(f)            No
Proceedings. There is no litigation, proceeding or investigation pending or, to the best knowledge of the Seller, threatened
against the Seller, 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 could
reasonably be expected to have a Material Adverse Effect with respect to the Seller.

 

(g)           All
Consents Required. All approvals, authorizations, consents, orders, licenses or other actions of any Person or of any Governmental
Authority (if any) required for the due execution, delivery and performance by the Seller of this Agreement have been obtained.

 

(h)           Bulk
Sales. The execution, delivery and performance of this Agreement and the transactions contemplated hereby do not require compliance
with any “bulk sales” act or similar law by the Seller.

 

(i)            Solvency.
The Seller is not the subject of any Insolvency Proceedings or Insolvency Event. The transactions under this Agreement do not and
will not render the Seller not Solvent.

 

(j)            Taxes.
The Seller has filed or caused to be filed all tax returns that are required to be filed by it and has timely paid all Taxes due.

 

(k)           Exchange
Act Compliance; Regulations T, U and X. None of the transactions contemplated herein (including the use of the proceeds from
the sale of the Transferred Assets) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations
issued pursuant thereto, including Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter
II. The Seller does not own or intend to carry or purchase, and no proceeds from the sale of the Transferred Assets will be used
to carry or purchase, any “margin stock” within the meaning of Regulation U or to extend “purpose credit”
within the meaning of Regulation U.

 

(l)            Security
Interest.

 

(i)            this
Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Transferred Assets in favor
of the Buyer and the Collateral Agent, as assignee, for the benefit of the Secured Parties, which security interest is prior to
all other Liens, and is enforceable as such against creditors of and purchasers from the Seller;

 

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(ii)           the
Transferred Assets constitute “instruments”, “general intangibles”, “certificated securities”,
“uncertificated securities”, “deposit accounts”, “investment property,” “proceeds”
(each as defined in the applicable UCC) and/or such other category of collateral under the applicable UCC as to which the Seller
has complied with its obligations under this Section 4.1(l);

 

(iii)          the
Seller owns and has good and marketable title to the Transferred Assets purchased by the Buyer hereunder on the Purchase Date,
and is transferring such Transferred Assets to the Buyer free and clear of any Lien of any Person (other than Permitted Liens);

 

(iv)          the
Seller has received all consents and approvals required by the terms of any Collateral Loan, if any, to the sale and granting of
a security interest in the Collateral Loans hereunder to the Buyer and the Collateral Agent as assignee, on behalf of the Secured
Parties;

 

(v)           the
Seller has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions
under Applicable Law in order to perfect the security interest in the Transferred Assets granted hereunder to the Buyer and the
Collateral Agent, as assignee, on behalf of the Secured Parties;

 

(vi)          other
than the security interest granted to the Buyer pursuant to this Agreement and the Collateral Agent, as assignee, on behalf of
the Secured Parties, pursuant to the Credit and Security Agreement and other than security interests that are released in connection
with the transfer of Transferred Assets to the Buyer, the Seller has not pledged, assigned, sold, granted a security interest in
or otherwise conveyed any of the Transferred Assets. The Seller has not authorized the filing of and is not aware of any financing
statements against the Seller that include a collateral description covering the Transferred Assets other than any financing statement
(A) relating to the security interest granted to the Buyer under this Agreement and the Collateral Agent, as assignee, on behalf
of the Secured Parties under the Credit and Security Agreement, (B) that has been terminated or for which a release or partial
release (which releases at least any collateral constituting Transferred Assets) has been filed and/or fully and validly assigned
to the Buyer on or prior to the Purchase Date or (C) relating to Permitted Liens. The Seller is not aware of the filing of any
judgment or tax lien filings against the Seller with respect to, or that would attach to, any Transferred Assets;

 

(vii)         other
than in the case of Noteless Loans and Participations (pending the effectiveness of the assignment of the related Collateral Loans
in accordance with Section 2.4), all original executed copies of each underlying promissory note (if any) that constitutes
or evidences each Collateral Loan included in the Transferred Assets that is evidenced by a promissory note has been, or subject
to the delivery requirements contained herein, will be delivered to the Custodian or its bailee;

 

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(viii)        none
of the underlying promissory notes (if any) that constitute or evidence the Collateral Loans included in the Transferred Assets
has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the
Buyer (and by the Buyer to the Collateral Agent, on behalf of the Secured Parties);

 

(ix)           with
respect to Transferred Assets that constitute a “certificated security,” if any, (A) such certificated security has
been delivered to the Custodian registered in the name of the Collateral Agent or its affiliated nominee or endorsed to the Collateral
Agent or in blank, (B) the Seller has caused the Custodian to agree to continuously identify on its books and records that such
certificated security is credited to the appropriate Covered Account and (C) the Seller has caused the Custodian to agree to maintain
continuous possession of such certificated security; and

 

(x)            with
respect to Transferred Assets that constitute an “uncertificated security”, if any, the Seller has caused the issuer
of such uncertificated security to (A) register the Collateral Agent as the registered owner of such uncertificated security or
(B) to agree to comply with instructions of the Collateral Agent without further consent of the Buyer, upon original issue or registration
of transfer by the issuer of such uncertificated security;

 

(m)          Reports
Accurate. All information, exhibits, financial statements, documents, books, records or reports furnished or to be furnished
by the Seller to the Buyer in connection with this Agreement and the Transferred Assets are true, complete and correct in all material
respects.

 

(n)           Location
of Offices. The Seller’s location (within the meaning of Article 9 of the UCC) is Maryland. The office where the Seller
keeps all the Records is at the address of the Seller referred to in Section 10.2 hereof (or at such other locations as
to which the notice and other requirements specified in Section 5.2(c) shall have been satisfied). The Seller’s principal
place of business is Connecticut.

 

(o)           Tradenames.
The Seller has no trade names, fictitious names, assumed names or “doing business as” names or other names under which
it has done or is doing business.

 

(p)           Sale
Agreement. This Agreement together with the Required Loan Documents are the only agreements pursuant to which the Seller sells
or otherwise transfers the Transferred Assets to the Buyer.

 

(q)           Value
Given. The Buyer has given reasonably equivalent value to the Seller in consideration for the transfer to the Buyer of the
Transferred Assets as contemplated by this Agreement (including for such purpose the portion of the Purchase Price that is treated
as a capital contribution from the Seller to the Buyer), the Purchase has not been made for or on account of an antecedent debt
owed by the Seller to the Buyer, and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy
Code. The transfer of such Transferred Assets by the Seller to the Buyer is on fair and reasonable terms that are no less favorable
than would be obtained in a comparable arm’s-length transaction.

 

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(r)            Accounting.
The Seller accounts for the transfers to the Buyer from the Seller of interests in Transferred Assets as sales of such Transferred
Assets for consolidated accounting purposes and for legal and, where relevant, tax purposes on its books, records and financial
statements, in each case consistent with GAAP and with the requirements set forth herein, provided that for federal income
tax reporting purposes, the Buyer is treated as a “disregarded entity” and, therefore, the transfer of Transferred
Assets by the Seller to the Buyer hereunder will not be recognized.

 

(s)           Special
Purpose Entity. The Buyer is an entity with assets and liabilities separate and distinct from those of the Seller and any Affiliates
thereof, and the Seller hereby acknowledges that the Collateral Agent, the Administrative Agent, the Lenders and the other Secured
Parties are entering into the transactions contemplated by the Credit and Security Agreement in reliance upon the Buyer’s
identity as a legal entity that is separate from the Seller and from each other Affiliate of the Seller. Therefore, from and after
the date of execution and delivery of this Agreement, the Seller shall take all reasonable steps, including all steps that the
Buyer or the Administrative Agent may from time to time reasonably request, to maintain the Buyer’s identity as a legal entity
that is separate from the Seller and from each other Affiliate of the Seller, and to make it manifest to third parties that the
Buyer is an entity with assets and liabilities distinct from those of the Seller and each other Affiliate thereof and not just
a division of the Seller or any such other Affiliate. Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, the Seller shall take all reasonable steps to ensure that the Buyer has not and will not take, refrain
from taking, or fail to take (as applicable) any action described in Section 5.05 of the Credit and Security Agreement.

 

(t)            Confirmation
from the Seller. Each of the Buyer and the Seller is aware that the filing of a voluntary petition under the Bankruptcy Code
for the purpose of making any Transferred Assets or any other assets of the Buyer available to satisfy claims of the creditors
of the Seller would not result in making such assets available to satisfy such creditors under the Bankruptcy Code. The Seller
will not cause the Buyer to file a voluntary petition under the Bankruptcy Code or Insolvency Laws.

 

(u)           ERISA.
The Seller does not maintain, nor are any employees of the Seller permitted to participate in, a Pension Plan.

 

(v)           Compliance
with Law. The Seller has complied in all respects with all Applicable Laws to which it may be subject, and no item of the Transferred
Assets contravenes any Applicable Laws.

 

(w)          Set–Off,
etc. As of the Purchase Date for a Transferred Asset, such Transferred Asset has not been compromised, adjusted, extended,
satisfied, subordinated, rescinded, set–off or modified by the Seller or by the Obligor thereof, and such Transferred Asset
is not subject to compromise, adjustment, extension, satisfaction, subordination, rescission, set–off, counterclaim, defense,
abatement, suspension, deferment, deduction, reduction, termination or modification, whether arising out of transactions concerning
such Transferred Assets or otherwise, by the Seller or by the Obligor with respect thereto, except for amendments, extension and
modifications, if any, to such Transferred Asset otherwise permitted under the Facility Documents.

 

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(x)           Full
Payment. As of the Purchase Date, the Seller has no actual knowledge of any fact which leads it to expect that any Transferred
Assets will not be paid in full.

 

(y)           Representations
and Warranties for Benefit of the Buyer’s Assignees: Each of the representations and warranties of the Seller contained
in this Agreement is true and correct in all material respects on the Purchase Date, and the Seller hereby makes each such representation
and warranty to, and for the benefit of the Collateral Agent, the Administrative Agent, the Lenders and the other Secured Parties.

 

(z)           USA
PATRIOT Act. Neither the Seller nor any Affiliate of the Seller is (i) a country, territory, organization, person or entity
named on an Office of Foreign Asset Control (OFAC) list; (ii) a Person that resides or has a place of business in a country or
territory named on such lists or which is designated as a “Non-Cooperative Jurisdiction” by the Financial Action Task
Force on Money Laundering, or whose subscription funds are transferred from or through such a jurisdiction; (iii) a “Foreign
Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any
country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision;
or (iv) a person or entity that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary
of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns.

 

It is understood and
agreed that the representations and warranties provided in this Section 4.1 shall survive (x) the sale and assignment or
contribution of the Transferred Assets by the Seller to the Buyer and (y) any subsequent transfer of the Transferred Assets by
the Buyer (including its grant of a first priority perfected security interest in, to and under the Transferred Assets pursuant
to the Credit and Security Agreement) and such representations and warranties, may not be waived by any party hereto without the
consent of the Administrative Agent.

 

Section
4.2           Representations and Warranties of the Seller Relating to the Agreement and the Transferred Assets.

 

The Seller hereby represents
and warrants to the Buyer, as of the Purchase Date:

 

(a)           Binding
Obligation, Valid Transfer and Security Interest. This Agreement constitutes a valid transfer to the Buyer of all right, title
and interest of the Seller in, to and under all of the Transferred Assets, free and clear of any Lien of any Person claiming through
or under the Seller or its Affiliates, except for Permitted Liens, and subject, in the case of any Participation, to the effectiveness
of the assignment of the related Collateral Loan in accordance with Section 2.4. If the conveyances contemplated by this
Agreement are determined to be a transfer for security, then this Agreement constitutes a grant of a security interest in all of
the Transferred Assets to the Buyer which upon the delivery of the Required Loan Documents to the Custodian, the crediting of Collateral
Loans to the Covered Accounts and the filing of the financing statements described in Section 2.1(i) and, in the case of
additional Collateral Loans on the Purchase Date, shall be a valid and enforceable first priority perfected security interest in
all Transferred Assets, subject only to the security interest granted to the Collateral Agent, on behalf of the Secured Parties,
pursuant to the Credit and Security Agreement. Neither the Seller nor any Person claiming through or under Seller shall have any
claim to or interest in any Covered Account and if this Agreement constitutes the grant of a security interest in such property,
except for the interest of the Seller in such property as a debtor for purposes of the UCC.

 

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(b)           Eligibility
of Transferred Assets. As of the Purchase Date, (i) Schedule I and Schedule II provide an accurate and complete
listing of all the Collateral Loans and other Transferred Assets hereunder as of the Purchase Date and the information contained
therein with respect to the identity of such Collateral Loans and other Transferred Assets and the amounts owing thereunder is
true and correct as of the Purchase Date, (ii) each such Collateral Loan is an Eligible Loan as of the Purchase Date, (iii) the
Buyer owns all right, title and interest in and to each such Transferred Asset, free and clear of any Lien of any Person (other
than Liens released in connection with the sale of such Transferred Asset to the Buyer and the security interest granted to the
Collateral Agent, on behalf of the Secured Parties, pursuant to the Credit and Security Agreement) and in compliance with all Applicable
Laws, (iv) with respect to each such Transferred Asset, all consents, licenses, approvals or authorizations of or registrations
or declarations of any Governmental Authority or any Person required to be obtained, effected or given in connection with the transfer
of an ownership interest in such Transferred Asset to the Buyer have been duly obtained, effected or given and are in full force
and effect (other than, in the case of any Participation, the effectiveness of the assignment of the related Collateral Loan in
accordance with Section 2.4), and (v) the representations and warranties set forth in Section 4.2(a) are true and
correct with respect to each Transferred Asset.

 

(c)           No
Fraud. Each Collateral Loan was originated without any fraud or material misrepresentation by the Seller or, to the best of
the Seller’s knowledge, on the part of the Obligor.

 

It is understood and
agreed that the representations and warranties provided in this Section 4.2 shall survive (x) the sale and assignment or
contribution of the Transferred Assets by the Seller to the Buyer and (y) any subsequent transfer of the Transferred Assets by
the Buyer (including its grant of a perfected security interest in, to and under the Transferred Assets pursuant to the Credit
and Security Agreement which, shall be a first priority security interest) and such representations and warranties, may not be
waived by any party hereto without the consent of the Administrative Agent.

 

Section
4.3           Representations and Warranties of the Buyer.

 

The Buyer hereby represents
and warrants to the Seller, as of the Purchase Date, that:

 

(a)           Organization
and Good Standing. The Buyer has been duly organized and is validly existing as a limited liability company in good standing
under the laws of the State of Delaware, with all requisite power and authority to own or lease its properties and conduct its
business as such business is presently conducted, and had at all relevant times, and now has, all necessary power, authority and
legal right to acquire and own the Transferred Assets.

 

(b)           Due
Qualification. The Buyer is duly qualified to do business and is in good standing as a limited liability company, and has obtained
all necessary qualifications, licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct
of its business requires such qualifications, licenses or approvals, except where the failure to be so qualified, licensed or approved
would not have a Material Adverse Effect with respect to the Buyer.

 

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(c)           Power
and Authority; Due Authorization; Execution and Delivery. The Buyer (i) has all necessary limited liability company power,
authority and legal right to (a) execute and deliver this Agreement, (b) carry out the terms of this Agreement, and (ii) has duly
authorized by all necessary limited liability company action the execution, delivery and performance of this Agreement and the
purchase of the Transferred Assets on the terms and conditions herein provided. This Agreement has been duly executed and delivered
by the Buyer.

 

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

 

(e)           No
Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof will
not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, the Buyer’s Constituent Documents or any contractual obligation of the Buyer, (ii) result
in the creation or imposition of any Lien (other than the security interest granted to the Buyer pursuant to this Agreement and
the security interest granted to the Collateral Agent, on behalf of the Secured Parties, pursuant to the Credit and Security Agreement)
upon any of the Buyer’s properties pursuant to the terms of any such contractual obligation, other than this Agreement, or
(iii) violate any Applicable Law.

 

(f)            No
Proceedings. There is no litigation, proceeding or investigation pending or, to the best knowledge of the Buyer, threatened
against the Buyer, 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 could
reasonably be expected to have Material Adverse Effect with respect to the Buyer.

 

(g)           All
Consents Required. All approvals, authorizations, consents, orders, licenses or other actions of any Person or of any Governmental
Authority (if any) required for the due execution, delivery and performance by the Buyer of this Agreement have been obtained.

 

(h)           Value
Given. The Buyer has given reasonably equivalent value to the Seller as consideration for the transfer to the Buyer of such
Transferred Assets as contemplated by this Agreement, no such transfer has been made for or on account of an antecedent debt owed
by the Seller or any such other Person to the Buyer, and no such transfer is or may be voidable or subject to avoidance as to the
Buyer under any section of the Bankruptcy Code. The transfer of such Transferred Assets by the Seller to the Buyer is on fair and
reasonable terms that are no less favorable than would be obtained in a comparable arm’s-length transaction.

 

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Article
V

 

COVENANTS

 

Section
5.1           Affirmative Covenants of the Seller.

 

From the date hereof
until the Final Maturity Date:

 

(a)           Compliance
with Laws. The Seller will comply in all material respects with all Applicable Laws, including those with respect to the Transferred
Assets or any part thereof, except for instances of non-compliance that could not reasonably be expected to have a Material Adverse
Effect with respect to the Seller.

 

(b)           Preservation
of Corporate Existence. The Seller will preserve and maintain its corporate existence, rights, franchises and privileges in
the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or could reasonably
be expected to have, a Material Adverse Effect with respect to the Seller.

 

(c)           Performance
and Compliance with Transferred Assets. The Seller will, at its expense, timely and fully perform and comply with all provisions,
covenants and other promises required to be observed by it under the Transferred Assets and all other agreements related to such
Transferred Assets.

 

(d)           Protection
of Interest in Transferred Assets. All Transferred Assets acquired by the Buyer from the Seller will be acquired pursuant to
and in accordance with the terms of this Agreement and the Required Loan Documents and the Seller will, (i) at its expense take
all action necessary to perfect, protect and more fully evidence the Buyer’s or its assignee’s ownership of or security
interest in such Transferred Assets free and clear of any Lien other than Permitted Liens, including (A) filing and maintaining
(at its expense) effective financing statements against the Seller, in all necessary or appropriate filing offices, and filing
continuation statements, amendments or assignments with respect thereto in such filing offices, and (B) executing or causing to
be executed such other instruments or notices as may be necessary or appropriate, and (ii) take all additional action that the
Buyer and the Collateral Agent may reasonably request to perfect, protect and more fully evidence the respective interests of the
parties to this Agreement in the Transferred Assets.

 

(e)           Deposit
of Collections. The Seller will instruct the administrative agent under each Transferred Asset or the applicable Obligors thereof
if no administrative agent exists to make all payments relating to all Transferred Assets directly to the applicable Covered Account.
In the event any payments relating to any Transferred Assets are remitted directly to the Seller or any Affiliate of the Seller,
the Seller will remit such payments (or will cause all such payments to be remitted) directly to the applicable Covered Account
within two (2) Business Days following receipt thereof, and, at all times prior to such remittance, the Seller will itself hold
or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Buyer and the Secured Parties.

 

(f)            Taxes.
The Seller will file and pay any and all Taxes required to meet its obligations with respect thereto under this Agreement.

 

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(g)           Adverse
Claims. The Seller will not create, or participate in the creation of, or permit to exist, any Liens in relation to the Collection
Account.

 

(h)           Notices.
The Seller will furnish to the Buyer, the Collateral Agent and the Administrative Agent:

 

(i)            Representations
and Warranties. Forthwith upon receiving knowledge of the same, but in any event no later than 10 Business Days after receiving
such knowledge of the same, the Seller shall notify the Buyer, the Collateral Agent and the Administrative Agent if any representation
or warranty set forth in Section 4.1 was incorrect at the time it was given or deemed to have been given and at the same
time deliver to the Buyer, the Collateral Agent and the Administrative Agent a written notice setting forth in reasonable detail
the nature of such facts and circumstances. In particular, but without limiting the foregoing, the Seller shall notify the Buyer,
the Collateral Agent and the Administrative Agent in the manner set forth in the preceding sentence before the Purchase Date of
any facts or circumstances within the knowledge of the Seller which would render any of the said representations and warranties
untrue at the date when such representations and warranties were made or deemed to have been made; and

 

(ii)           Notice
of Material Events. Promptly upon becoming aware thereof, but in any event no later than 10 Business Days after becoming aware
thereof, notice of any other event or circumstances that, in the reasonable judgment of the Seller, is likely to have a Material
Adverse Effect with respect to Seller.

 

(i)            Separate
Identity. The Seller acknowledges that the Collateral Agent, the Administrative Agent, the Lenders and the other Secured Parties
are entering into the transactions contemplated by this Agreement and the Credit and Security Agreement in reliance upon the Buyer’s
identity as a legal entity that is separate from the Seller and each other Affiliate of the Seller. Accordingly, from and after
the date of execution and delivery of this Agreement, the Seller will take all reasonable steps, including all steps that the Buyer,
the Collateral Agent or the Administrative Agent may from time to time reasonably request, to maintain the Buyer’s identity
as a legal entity that is separate from the Seller and each other Affiliate of the Seller and to make it manifest to third parties
that the Buyer is an entity with assets and liabilities distinct from those of the Seller and each other Affiliate thereof and
not just a division of the Seller or any such other Affiliate. Without limiting the generality of the foregoing and in addition
to the other covenants set forth herein, the Seller agrees that:

 

(i)            the
Seller will take all other actions necessary on its part to ensure that the Buyer is at all times in compliance with Section
5.05 of the Credit and Security Agreement;

 

(ii)           the
Seller shall maintain corporate records and books of account separate from those of the Buyer;

 

(iii)          the
annual financial statements of the Seller shall disclose the effects of the Seller’s transactions in accordance with GAAP
and the annual financial statements of the Seller shall note that the assets of the Buyer, including the Transferred Assets, are
not available to pay creditors of the Seller or any other Affiliate of the Seller;

 

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(iv)          the
resolutions, agreements and other instruments underlying the transactions described in this Agreement shall be continuously maintained
by the Seller as official records;

 

(v)           the
Seller shall maintain an arm’s–length relationship with the Buyer and will not hold itself out as being liable for
the debts of the Buyer;

 

(vi)          the
Seller shall keep its assets and its liabilities wholly separate from those of the Buyer; and

 

(vii)         the
Seller will avoid the appearance, and promptly correct any known misperception of any of the Seller’s creditors, that the
assets of the Buyer are available to pay the obligations and debts of the Seller.

 

(j)            Cooperation
with Requests for Information or Documents. The Seller will cooperate fully with all reasonable requests of the Buyer regarding
the provision of any information or documents, necessary or desirable, including the provision of such information or documents
in electronic or machine–readable format, to allow each of the Buyer and its assignees to carry out their responsibilities
under the Facility Documents.

 

(k)           Payment
Performance and Discharge of Obligations. The Seller will pay, perform and discharge all of its obligations and liabilities,
including all taxes, assessments and governmental charges upon its income and properties, when due, the non–payment, performance
or discharge of which would reasonably be expected to have a Material Adverse Effect with respect to the Seller, unless and only
to the extent that such obligations, liabilities, taxes, assessments and governmental charges shall be contested in good faith
and by appropriate proceedings and that, to the extent required by GAAP, proper and adequate book reserves relating thereto are
established by the Seller and then only to the extent that a bond is filed in cases where the filing of a bond is necessary to
avoid the creation of a Lien against any of its properties.

 

(l)            Copies
of Other Information. The Seller will deliver to the Buyer, the Collateral Agent and the Administrative Agent promptly, from
time to time, such other information, documents, records or reports respecting the Transferred Assets or the conditions or operations,
financial or otherwise, of the Seller as the Buyer, the Collateral Agent or the Administrative Agent may from time to time reasonably
request in order to perform their obligations hereunder or under any other Facility Document or to protect the interests of the
Buyer, the Administrative Agent, the Collateral Agent and the Secured Parties under or as contemplated by this Agreement and the
other Facility Documents.

 

(m)          Mergers,
Acquisitions, Sales, etc.

 

(i)            Any
Person into which the Seller may be merged or consolidated, or any Person resulting from such merger or consolidation to which
the Seller is a party, or any Person succeeding by acquisition or transfer to substantially all of the assets and the business
of the Seller shall be the successor to the Seller hereunder, without execution or filing of any paper or any further act on the
part of any of the parties hereto, notwithstanding anything herein to the contrary.

 

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(ii)           The
merger or consolidation of the Seller or transfer of substantially all of its assets and its business as described in this Section
5.1(m), shall not be effected unless the Seller shall have provided 30 days’ prior written notice thereof to the Administrative
Agent, the Collateral Agent and the Custodian and the Administrative Agent shall have consented thereto in accordance with Section
14.07 of the Credit and Security Agreement.

 

Section
5.2           Negative Covenants of the Seller.

 

From the date hereof
until the Final Maturity Date:

 

(a)           Loans
Not to be Evidenced by Instruments. The Seller will take no action (and will not cause Collateral Manager to take any action)
to cause any Collateral Loan that is not, as of the related Purchase Date, evidenced by an Instrument, to be so evidenced except
in connection with the enforcement or collection of such Collateral Loan or unless such Instrument is promptly delivered to the
Custodian, together with an Indorsement in blank, as collateral security for such Collateral Loan.

 

(b)           Security
Interests. Except as otherwise permitted herein, and in the Credit and Security Agreement, the Seller will not and will not
cause or permit the Buyer to sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to
exist any Lien on any Transferred Assets, whether now existing or hereafter acquired or any interest, therein. The Seller will
promptly notify the Buyer, the Collateral Agent, the Administrative Agent and the Custodian of the existence of any Lien other
than as permitted in the immediately preceding sentence on any Transferred Assets and the Seller shall defend the right, title
and interest of the Buyer, and the Collateral Agent for the benefit of the Secured Parties, in, to and under the Transferred Assets
against all claims of third parties; provided that nothing in this Section 5.2(b) shall prevent or be deemed to prohibit
the Seller from suffering to exist Permitted Liens upon any of the Transferred Assets and Liens permitted in the immediately preceding
sentence.

 

(c)           Change
of Name or Location of Loan Files. The Seller shall not change its name, move the location of its principal place of business
and chief executive office, change the offices where it keeps the records from the location referred to in Section 10.2,
or change the jurisdiction of its incorporation, unless the Seller has given at least 30 days’ prior written notice to the
Buyer, the Custodian, the Collateral Agent and the Administrative Agent and has taken all actions required under the UCC of each
relevant jurisdiction in order to continue the first priority perfected security interest of the Buyer and the Collateral Agent,
for the benefit of the Secured Parties, in the Transferred Assets.

 

(d)           Accounting
of Purchases. The Seller will not account for or treat (whether in financial statements or otherwise) the transactions contemplated
hereby in any manner other than as a sale or contribution of the Transferred Assets by the Seller to the Buyer; provided
that for federal income tax reporting purposes, the Buyer is treated as a “disregarded entity” and, therefore, the
transfer of Transferred Assets by the Seller to the Buyer hereunder will not be recognized; and provided, further, that nothing
shall prevent Seller from showing the Transferred Assets as consolidated assets of the Seller and its consolidated subsidiaries
on Seller’s consolidated financial statements.

 

    20 

     

    

 

(e)           Constituent
Documents. The Seller will not cause or permit the Buyer to amend, modify, waive or terminate any provision the Buyer’s
Constituent Documents except in accordance with the Credit and Security Agreement.

 

(f)            Changes
in Payment Instructions to Obligors. The Seller will not add or terminate any Covered Account or make any change in its instructions
to the administrative agent under each Transferred Asset or the applicable Obligors thereof if no administrative agent exists,
regarding payments to be made with respect to the Transferred Assets to any Covered Account, unless the Administrative Agent has
consented to such addition, termination or change (which consent shall not be unreasonably withheld).

 

(g)           Extension
or Amendment of Transferred Assets. Except as otherwise permitted under the Credit and Security Agreement, the Seller will
not extend, amend or otherwise modify the terms of any Transferred Assets (including the Underlying Assets).

 

Article
VI

 

REMOVAL OR REPLACEMENT OF WARRANTY COLLATERAL LOANS

 

If on any day a Collateral
Loan is (or becomes) a Warranty Collateral Loan, no later than five (5) Business Days following the earlier of knowledge by the
Seller of such Collateral Loan becoming a Warranty Collateral Loan or receipt by the Seller from the Buyer of written notice thereof,
the Seller shall either: (a) make a deposit to the Collection Account in immediately available funds in an amount equal to the
sum of (i) the Repurchase Amount of such Collateral Loan at such time, (ii) any expenses or fees with respect to such Collateral
Loan and (iii) costs and damages incurred by the Administrative Agent or by any Lender in connection with any violation by such
Collateral Loan of any Applicable Law; or (b) substitute for such Warranty Collateral Loan a Substituted Collateral Loan so long
as, in each case, (1) no Event of Default has occurred and is continuing and, immediately after giving effect to such substitution,
no Default or Event of Default shall have occurred, (2) such Substituted Collateral Loan is an Eligible Loan, (3) all applicable
conditions precedent set forth in Section 3.1 have been satisfied with respect to each Substituted Collateral Loan to be
acquired by the Borrower in connection with such substitution, and (4) the Borrowing Base Test shall be satisfied immediately after
giving effect to such substitution. In either of the foregoing instances, the Seller may (in its discretion) accept retransfer
of each such Warranty Collateral Loan and any related Underlying Assets. Upon the transfer of each Warranty Collateral Loan, the
Buyer shall (if and when the Seller elects to accept the retransfer of such Warranty Collateral Loan or directs the Buyer to transfer
such Collateral Loan to a third party) automatically and without further action be deemed to transfer, assign and set-over to or
at the direction of the Seller, without recourse, representation or warranty, all the right, title and interest of the Buyer in,
to and under such Warranty Collateral Loan and all future monies due or to become due with respect thereto, the Underlying Assets,
all Proceeds of such Warranty Collateral Loan, all rights to security for any such Warranty Collateral Loan, and all Proceeds and
products of the foregoing. The Buyer shall (if and when the Seller elects to accept the retransfer of such Warranty Collateral
Loan or directs the Buyer to transfer such Collateral Loan to a third party), at the request and sole expense of the Seller, execute
such documents and instruments of transfer, assignment and release as may be prepared by the Seller and take other such actions
as shall reasonably be requested by the Seller to effect the transfer of such Warranty Collateral Loan pursuant to this Article
VI. It is understood and agreed that, with respect to a Warranty Collateral Loan, repurchase of such Warranty Collateral Loan
by the Seller (or a third party) or substitution by the Seller of a Substitute Collateral Loan for such Warranty Collateral Loan
shall be the sole remedies available to the Buyer and its assignees hereunder and any other beneficiary of the Buyer’s rights
hereunder (but shall not limit any claims under Section 9.1 in respect of any Indemnified Amounts).

 

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Article
VII

ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE TRANSFERRED ASSETS

 

Section
7.1           Rights of the Buyer.

 

(a)           The
Seller hereby authorizes the Buyer, the Collateral Manager, the Collateral Agent and the Administrative Agent, on behalf of the
Secured Parties, and/or their respective designees or assignees to each take any and all steps in the Seller’s name and on
behalf of the Seller that the Buyer, the Collateral Manager, the Collateral Agent and/or the Administrative Agent, on behalf of
the Secured Parties, and/or their respective designees or assignees determine are reasonably necessary or appropriate to collect
all amounts due under any and all Transferred Assets and to enforce or protect the Buyer’s, the Administrative Agent’s
and the Collateral Agent’s, on behalf of the Secured Parties, rights under this Agreement, including endorsing the name of
the Seller on checks and other instruments representing Collections and enforcing such Transferred Assets.

 

(b)           Except
as set forth in the Credit and Security Agreement, the Buyer shall have no obligation to account for, replace, substitute or return
any Transferred Assets to the Seller.

 

(c)           The
Buyer shall have the unrestricted right to further assign, transfer, deliver, hypothecate, subdivide or otherwise deal with the
Transferred Assets and all of the Buyer’s right, title and interest in, to and under this Agreement, on whatever terms the
Buyer shall determine, subject to the Credit and Security Agreement.

 

(d)           The
Buyer shall have the sole right to retain any gains or profits created by buying, selling or holding the Transferred Assets and
shall have the sole risk of and responsibility for losses or damages created by such buying, selling or holding.

 

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Section
7.2           Responsibilities of the Seller.

 

Notwithstanding anything
to the contrary contained herein, the Seller agrees to deliver directly to the Custodian (for the Buyer’s account), within
two (2) Business Days after receipt thereof, any Collections that it receives, in the form so received, and agrees that all such
Collections shall be deemed to be received in trust for the Buyer and shall be maintained and segregated separate and apart from
all other funds and monies of the Seller until delivery of such Collections to the applicable Covered Account.

 

Section
7.3           Rights With Respect to Loan Files.

 

At any time when a
Collateral Manager other than Oxford Square Capital Corp. has been designated a Collateral Manager pursuant to Section 14.07
or 14.08 of the Credit and Security Agreement, the Seller shall, at the request of the Buyer and the Collateral Agent, assemble
copies of all of the Loan Files in its possession which evidence the Transferred Assets originated by the Seller, or which are
otherwise necessary or desirable to collect such Transferred Assets, and make the same available to the Buyer or the Collateral
Agent at a place selected by the Collateral Agent.

 

Section
7.4           Notice to Administrative Agent and Collateral Agent.

 

The Seller agrees that,
concurrently with its delivery to the Buyer, copies of all notices, reports, documents and other information required to be delivered
by the Seller to the Buyer hereunder shall be delivered by the Seller to the Administrative Agent and the Collateral Agent.

 

Article
VIII

 

SURVIVAL

 

Section
8.1           Survival of Certain Provisions.

 

Notwithstanding any
provision contained herein to the contrary, the Seller’s representations, covenants and obligations set forth in Articles
IV, V, VI and VII create and constitute the continuing obligation of the parties hereto in accordance
with its terms, and shall remain in full force and effect until the Final Maturity Date; provided that the rights and remedies
with respect to any breach of any representation and warranty made or deemed made by the Seller pursuant to Article IV and
the provisions of Article VI, the indemnification and payment provisions of Article IX and the provisions of Sections
9.1, 10.3, 10.6, 10.7, 10.8 and 10.16 shall be continuing and shall survive any termination of
this Agreement.

 

    23 

     

    

 

Article
IX

 

INDEMNIFICATION

 

Section
9.1           Indemnification by the Seller.

 

(a)           Without
limiting any other rights that the Buyer, any assignee of the Buyer or any of such Persons’ respective shareholders, officers,
employees, agents, or Affiliates (each an “Indemnified Party”) may have hereunder or under Applicable Law, the
Seller hereby agrees to indemnify each Indemnified Party from and against any and all damages, losses, claims, liabilities and
related costs and expenses, including reasonable attorneys’ fees and disbursements (all of the foregoing being collectively
referred to as “Indemnified Amounts”), awarded against or incurred by such Indemnified Party or any of them
as a result of any of the Indemnified Matters (as defined below), excluding, however, (a) Indemnified Amounts to the extent resulting
from the gross negligence, bad faith or willful misconduct on the part of the applicable Indemnified Party, and (b) Indemnified
Amounts that have the effect of recourse for non–payment of the Transferred Assets due to credit problems of the Obligors
(including bankruptcy or insolvency). If the Seller has made any indemnity payment pursuant to this Section 9.1 and such
payment fully indemnified the recipient thereof and the recipient thereafter collects any payments from others in respect of such
Indemnified Amounts, then the recipient shall repay to the Seller an amount equal to the amount it has collected from others in
respect of such indemnified amounts. As used herein, “Indemnified Matters” means:

 

(i)            any
representation or warranty made or deemed made by the Seller, or any of its officers under or in connection with this Agreement,
which shall have been false, incorrect or misleading in any material respect when made or deemed made or delivered;

 

(ii)           the
failure by the Seller to comply with any term, provision or covenant contained in this Agreement or any agreement executed in connection
with this Agreement, or with any Applicable Law, with respect to any Transferred Assets or the nonconformity of any Transferred
Assets with any such Applicable Law, or any breach by the Seller of its contractual obligations with respect to any Transferred
Assets;

 

(iii)          the
failure to vest and maintain vested in the Buyer, an ownership interest in the Transferred Assets, together with all Collections,
free and clear of any Lien (other than Permitted Liens or other Liens to which the Administrative Agent has consented in its sole
discretion) whether existing at the time of the Purchase or at any time thereafter;

 

(iv)          the
failure to file, or any delay in filing, financing statements, continuation statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other Applicable Laws with respect to any Transferred Assets, whether at the time
of the Purchase or at any subsequent time which are required by this Agreement or the other Facility Documents;

 

(v)           at
the time of conveyance of a Transferred Asset, the existence of any dispute, claim, offset or defense (other than the discharge
in bankruptcy of an Obligor) of an Obligor to the payment with respect to any Transferred Assets (including a defense based on
the Transferred Assets not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with
its terms);

 

(vi)          any
inability to obtain any judgment in, or utilize the court or other adjudication system of, any state in which an Obligor may be
located as a result of the failure of the Seller to qualify to do business or file any notice or business activity report or any
similar report;

 

(vii)         any
action taken by the Seller in the enforcement or collection of any Transferred Assets;

 

(viii)        any
claim, suit or action of any kind arising out of or in connection with Environmental Laws that arose prior to the date any Transferred
Asset was sold or otherwise transferred to Buyer, including any vicarious liability resulting from any act or omission of the Seller;

 

    24 

     

    

 

(ix)           the
failure by Seller to pay when due any Taxes for which the Seller is liable, including sales, excise or personal property taxes
payable in connection with the Transferred Assets;

 

(x)           any
repayment by the Indemnified Party of any amount previously distributed hereunder or under any Facility Document to the Seller,
in each case which amount the Indemnified Party believes in good faith is required to be repaid;

 

(xi)          the
comingling of Collections on the Transferred Assets at any time with other funds of the Seller;

 

(xii)         any
investigation, litigation or proceeding related to this Agreement arising from any act or omission of the Seller or the Seller’s
use of proceeds of Purchases or the security interest in the Transferred Assets;

 

(xiii)        the
failure of the Seller or any of its agents or representatives to remit to the Buyer Collections on the Transferred Assets remitted
to the Seller or any such agent or representative as provided in this Agreement; or

 

(xiv)        any
attempt by the Seller, any creditor of Seller or any trustee or debtor-in-possession for the Seller to void the purchases made
hereunder under statutory provisions or common law or equitable action.

 

(b)           Any
amounts subject to the indemnification provisions of this Section 9.1 shall be paid by the Seller to the Indemnified Party
within five (5) Business Days following such Person’s demand therefor.

 

(c)           If
for any reason the indemnification provided above in this Section 9.1 is unavailable to the Indemnified Party or is insufficient
to hold an Indemnified Party harmless, then the Seller shall contribute to the amount paid or payable by such Indemnified Party
as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Seller, on the other hand, but also the relative fault of such Indemnified
Party as well as any other relevant equitable considerations; provided that the Seller shall have no contribution obligation under
this Section 9.1(c) if the payment of any such amounts would have the effect of recourse for nonpayment of the Collateral
Loans included in the Transferred Assets due to credit problems of the related Obligors.

 

(d)           The
obligations of the Seller under this Section 9.1 shall survive the termination of this Agreement.

 

(e)           Indemnification
under Section 9.1 shall be in an amount necessary to make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the receipt of the indemnity provided hereunder, including the effect of such tax or refund
on the amount of tax measured by net income or profits that is or was payable by the Indemnified Party.

 

    25 

     

    

 

Section
9.2           Assignment of Indemnities.

 

The Seller acknowledges
that, pursuant to the Credit and Security Agreement, the Buyer shall assign its rights of indemnity granted hereunder to the Collateral
Agent, for the benefit of the Secured Parties. Upon such assignment, (i) the Collateral Agent, on behalf of the Secured Parties,
shall have all rights of the Buyer hereunder and may in turn assign such rights as permitted under the Credit and Security Agreement,
and (ii) the obligations of the Seller under this Article IX shall inure to the Collateral Agent. The Seller agrees that,
upon such assignment, the Lenders, the other Secured Parties, and the Collateral Agent or the assignee of any such Person, as applicable,
may enforce directly, without joinder of the Buyer, the indemnities set forth in this Article IX.

 

Article
X

 

MISCELLANEOUS

 

Section
10.1         Amendments and Waivers.

 

Except as provided
in this Section 10.1, no amendment, waiver or other modification of any provision of this Agreement shall be effective unless
signed by the Buyer and Seller and consented to in writing by the Administrative Agent, other than an amendment to this Agreement
to incorporate by reference a Loan List on the related Purchase Date. The Buyer shall provide not less than ten (10) Business Days’
prior written notice of any such amendment to the Administrative Agent.

 

Section
10.2         Notices, Etc.

 

All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be in writing (including communication by facsimile
copy or electronic mail) and mailed, e-mailed, transmitted or delivered, as to each party hereto, at its address set forth below
or at such other address as shall be designated by such party in a written notice to the other parties hereto.

 

To the Seller:

 

Oxford Square Capital
Corp. 

8 Sound Shore Drive,
Suite 255 

Greenwich, CT 06830 

Attention: Saul Rosenthal 

Tel: (203) 983-5275 

Fax: (203) 983-5290

 

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To the Buyer: 

 

Oxford Square Funding
2018, LLC 

c/o Oxford Square
Capital Corp. 

8 Sound Shore Drive,
Suite 255 

Greenwich, CT 06830 

Attention: Saul Rosenthal 

Tel: (203) 983-5275 

Fax: (203) 983-5290

  

With a copy to:

 

Oxford Square Capital
Corp. 

8 Sound Shore Drive,
Suite 255 

Greenwich, CT 06830 

Attention: Saul Rosenthal 

Tel: (203) 983-5275 

Fax: (203) 983-5290 

 

To the Administrative
Agent: 

 

Citibank, N.A. 

390 Greenwich Street,
4th Floor 

New York, New York
10013 

Attention: Victoria
Chant 

Tel: (212) 723-6078 

Fax: (646) 291-5779 

 

To the Collateral Agent: 

 

The Bank of New York
Mellon Trust Company, National Association 

601 Travis Street,
16th Floor 

Houston, TX 77002 

Attention: Global
Corporate Trust – Oxford Square Funding 2018, LLC 

Tel: (713) 483-6000 

Fax: (713) 483-6001

  

To the Collateral Manager: 

 

Oxford Square Capital
Corp. 

8 Sound Shore Drive,
Suite 255 

Greenwich, CT 06830 

Attention: Saul Rosenthal 

Tel: (203) 983-5275 

Fax: (203) 983-5290

 

    27 

     

    

 

All such notices and
communications shall be effective, upon receipt, or in the case of (a) notice by mail, five (5) days after being deposited in the
United States mail, first class postage prepaid, (b) notice by e-mail, when verbal communication of receipt is obtained, or (c)
notice by facsimile copy, when verbal communication of receipt is obtained.

 

Section
10.3         Binding Effect; Benefit of Agreement.

 

This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The Collateral
Agent, the Administrative Agent, the Lenders and the other Secured Parties shall be third-party beneficiaries of this Agreement.

 

Section
10.4         GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.

 

THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY AGREES TO
THE NON–EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY
WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

 

Section
10.5         WAIVER OF JURY TRIAL.

 

TO THE EXTENT PERMITTED
BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH
DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

 

Section
10.6         Costs, Expenses and Taxes.

 

(a)           In
addition to the rights of indemnification granted under Article IX hereof, the Seller agrees to pay on demand all reasonable
costs and expenses of the Buyer or its assignees incurred in connection with the preparation, execution, delivery, administration
(including periodic auditing), renewal, amendment or modification of, or any waiver or consent issued in connection with, this
Agreement and the other documents to be delivered hereunder or in connection herewith, including the reasonable fees and out–of–pocket
expenses of counsel with respect thereto and with respect to advising the Buyer or its assignees as to its rights and remedies
under this Agreement and the other documents to be delivered hereunder or in connection herewith, and all reasonable costs and
expenses, if any (including reasonable counsel fees and expenses), incurred by the Buyer or its assignees in connection with the
enforcement of this Agreement and the other documents to be delivered hereunder or in connection herewith.

 

    28 

     

    

 

(b)           The
Seller shall pay on demand any and all stamp, sales, excise and other taxes and fees payable or determined to be payable to any
Governmental Authority in connection with the execution, delivery, filing and recording of this Agreement and the other documents
to be delivered hereunder.

 

(c)           The
Seller shall pay on demand all other reasonable costs, expenses and Taxes (excluding income taxes) incurred by the Buyer or its
assignees under or in connection with this Agreement.

 

Section
10.7         No Proceedings.

 

The Seller hereby agrees
that it will not institute against, or join any other Person in instituting against, the Buyer any Insolvency Proceeding so long
as there shall not have elapsed one year and one day since the Final Maturity Date.

 

Section
10.8         Recourse Against Certain Parties.

 

(a)           No
recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees
or any other obligations) of the Seller as contained in this Agreement or any other agreement, instrument or document entered into
by it pursuant hereto or in connection herewith shall be had against any partner, stockholder, incorporator, authorized representative,
officer, employee or director of the Seller by the enforcement of any assessment or by any legal or equitable proceeding, by virtue
of any statute or otherwise it being expressly agreed and understood that the agreements of the Seller contained in this Agreement
and all of the other agreements, instruments and documents entered into by it pursuant hereto or in connection herewith are, in
each case, solely the corporate obligations of the Seller, and that no personal liability whatsoever shall attach to or be incurred
by any partner, stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them,
under or by reason of any of the obligations, covenants or agreements of the Seller contained in this Agreement or in any other
such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each partner,
stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them, for breaches
by the Seller of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by
statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this
Agreement. The provisions of this Section 10.8(a) shall survive the termination of this Agreement.

 

    29 

     

    

 

(b)           No
recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees
or any other obligations) of the Buyer as contained in this Agreement or any other agreement, instrument or document entered into
by it pursuant hereto or in connection herewith shall be had against any member, manager, authorized representative, officer, employee
or director of the Buyer by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise it being expressly agreed and understood that the agreements of the Buyer contained in this Agreement and all of the
other agreements, instruments and documents entered into by it pursuant hereto or in connection herewith are, in each case, solely
the limited liability company obligations of the Buyer, and that no personal liability whatsoever shall attach to or be incurred
by any authorized representative, member, manager, officer, employee or director of the Buyer or any of them, under or by reason
of any of the obligations, covenants or agreements of the Buyer contained in this Agreement or in any other such instruments, documents
or agreements, or which are implied therefrom, and that any and all personal liability of each authorized representative, member,
manager, officer, employee or director of the Buyer, or any of them, for breaches by the Buyer of any such obligations, covenants
or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby
expressly waived as a condition of and in consideration for the execution of this Agreement. The provisions of this Section
10.8(b) shall survive the termination of this Agreement.

 

Section
10.9         Protection of Right, Title and Interest in the Transferred Assets; Further Action Evidencing Purchases.

 

(a)           The
Seller shall cause this Agreement, all amendments hereto and/or all financing statements and continuation statements and any other
necessary documents covering the Buyer’s right, title and interest to the Transferred Assets to be promptly recorded, registered
and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the Buyer hereunder to all property comprising the Transferred
Assets. The Seller shall deliver to the Buyer the file–stamped copies of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as available following such recording, registration or filing. The Seller shall
cooperate fully with the Buyer in connection with the obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this Section 10.9(a).

 

(b)           The
Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take
all actions, that the Buyer, the Collateral Agent, on behalf of the Secured Parties, may reasonably request in order to perfect,
protect or more fully evidence the Purchases hereunder and the security and/or interest granted in the Transferred Assets, or to
enable the Buyer or the Collateral Agent, as applicable, to exercise and enforce their rights and remedies hereunder or under any
Facility Document. At any time the Buyer or the Collateral Agent may direct the Seller or any Collateral Manager to notify each
administrative agent under each Transferred Asset or the applicable Obligors thereof if no administrative agent exists, at the
Seller’s expense, of the interest of the Buyer and the interest of the Collateral Agent for the benefit of the Secured Parties
in the Transferred Assets under this Agreement and may direct that payments of all amounts due or that become due under any or
all of the Transferred Assets be made directly to the Buyer or the Collateral Agent, on behalf of the Secured Parties.

 

    30 

     

    

 

(c)           If
the Seller fails to perform any of its obligations hereunder, the Buyer or the Collateral Agent may (but shall not be required
to) perform, or cause performance of, such obligation; and the Buyer’s or the Collateral Agent’s costs and expenses
incurred in connection therewith shall be payable by the Seller as provided in Article IX. The Seller irrevocably authorizes
the Buyer or the Collateral Agent at any time and from time to time at the Buyer’s or the Collateral Agent’s sole discretion
and appoints the Collateral Agent as its attorney–in–fact to act on behalf of the Seller (i) to execute on behalf of
the Seller and to file financing statements on behalf of the Seller, as debtor, necessary or desirable in the Collateral Agent’s
sole discretion to perfect and to maintain the perfection and priority of the interest of the Buyer (and its assignees) in the
Transferred Assets and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with
respect to the Transferred Assets as a financing statement in such offices as the Collateral Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Buyer (and its assignees)
in the Transferred Assets. This appointment is coupled with an interest and is irrevocable.

 

Section
10.10      Execution in Counterparts; Severability; Integration.

 

This Agreement may
be executed in any number of counterparts and by different parties hereto in separate counterparts (including by facsimile), each
of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement and any agreements or letters (including
fee letters) executed in connection herewith contains the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect
to the subject matter hereof, superseding all prior oral or written understandings.

 

Section
10.11      Waiver of Setoff.

 

(a)           The
Seller’s obligations under this Agreement shall not be affected by any right of setoff, counterclaim, recoupment, defense
or other right the Seller might have against the Buyer, the Collateral Agent, the Lenders, the other Secured Parties or any assignee
of such Persons, all of which rights are hereby waived by the Seller.

 

(b)           The
Buyer shall have the right to set–off against the Seller any amounts to which the Seller may be entitled hereunder and to
apply such amounts to any claims the Buyer may have against the Seller from time to time under this Agreement. Upon any such set–off,
the Buyer shall give notice of the amount thereof and the reasons therefor to the Seller.

 

Section
10.12      Heading and Exhibits.

 

The headings herein
are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof. The schedules
and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement
for all purposes.

 

    31 

     

    

 

Section
10.13      Rights of Inspection.

 

Prior to the First
Amendment Effective Date and periodically thereafter at the discretion of the Buyer, the Seller will permit the Buyer to review
the Collateral Manager’s collection and administration of the Transferred Assets in order to assess compliance by the Collateral
Manager with the Credit and Collection Policy, as well as with this Agreement and may conduct an audit of the Transferred Assets
and Required Loan Documents in conjunction with such a review. Such review shall be reasonable in scope and shall be completed
in a reasonable period of time. The Seller shall be required to bear the expense of no more than two such reviews within any 12-month
period and any additional reviews shall be at the expense of the Buyer. Without limiting the foregoing provisions of this Section
10.13, from time to time on request of the Buyer, the Seller shall permit certified public accountants or other auditors acceptable
to the Buyer to conduct, at the Seller’s expense, a review of the Required Loan Documents and all other documentation regarding
the Transferred Assets.

 

Section
10.14      Assignment.

 

Notwithstanding anything
to the contrary contained herein, this Agreement may not be assigned by the Buyer or the Seller except as permitted by this Section
10.14 or by the Credit and Security Agreement. Simultaneously with the execution and delivery of this Agreement, the Buyer
shall assign all of its right, title and interest herein to the Collateral Agent for the benefit of the Secured Parties, to which
assignment the Seller hereby expressly consents. Upon assignment, the Seller agrees to perform its obligations hereunder for the
benefit of the Collateral Agent for the benefit of the Secured Parties and the Collateral Agent, in such capacity, shall be a third
party beneficiary hereof. The Collateral Agent on behalf of the Secured Parties under the Credit and Security Agreement upon such
assignment may enforce the provisions of this Agreement, exercise the rights of the Buyer and enforce the obligations of the Seller
hereunder without joinder of the Buyer.

 

Section
10.15      No Waiver; Cumulative Remedies.

 

No failure to exercise
and no delay in exercising, on the part of the Buyer or the Seller, any right, remedy, power or privilege hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. Any waiver of
this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

 

[Signatures appear on following page.]

 

    32 

     

    

 

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

	 	 	 
	 	BUYER: 
	 	 	 
	 	OXFORD SQUARE FUNDING 2018, LLC
	 	 	 
	 	By:	 
	 	 	Jonathan H. Cohen
	 	 	Manager
	 	 	 
	 	SELLER: 
	 	 	 
	 	OXFORD SQUARE CAPITAL CORP.
	 	 	 
	 	By:	 
	 	 	Saul Rosenthal
	 	 	President

 

[Signature Page to Sale, Contribution and
Master Participation Agreement]Exhibit

Exhibit 10.1
             

Strictly Confidential

October 10, 2018

Duane Nash, M.D., J.D., M.B.A.
President
Vital Therapies, Inc.
15010 Avenue of Science 
Suite 200
San Diego, CA  92128
INVESTMENT BANKING AGREEMENT
Dear Duane:

We are pleased to confirm our mutual understanding regarding the retention of Ladenburg Thalmann & Co. Inc. (“Ladenburg”) by Vital Therapies, Inc., its subsidiaries, affiliates, beneficiaries, successors and assigns (collectively, the “Company”), subject to the terms and conditions of this agreement (the “Agreement”).
		
	1.
	Purpose of Engagement.  Ladenburg will assist the Company as its exclusive financial advisor in connection with a possible business combination of the Company with an unaffiliated third party (a “Transaction”).  A Transaction may be effected by means of any merger, consolidation, reorganization, recapitalization, business combination or other transaction pursuant to which the Company is acquired by, acquires, or is combined with, another party. For the avoidance of doubt, a Transaction may include several separate transactional elements (merger, asset sale or spin-off, and/or issuance of securities), but all of such elements shall result in the payment of only one Transaction Fee (as defined below) pursuant to this Agreement.  In addition, a financing transaction for the purpose of raising cash, without any other element of a Transaction, shall not result in payment of a Transaction Fee under this Agreement.

		
	2.
	Term.  The term of this Agreement shall be for a period commencing on the date hereof and expiring on the earlier of (i) the closing of the Transaction, (ii) nine (9) months from the date hereof, and (iii) the delivery of written notice of termination from one party to the other (the “Term”).  Notwithstanding any termination or expiration of this Agreement, the provisions of Paragraphs 4, 5 and 6 and Exhibit A, which is attached hereto and incorporated herein, shall survive such termination or expiration.  

		
	3.
	Services.  Ladenburg will act as the Company’s financial advisor with respect to:

		
	a)
	Assisting the Company in its preparation of a Confidential Selling Memorandum (the “Memorandum”) for distribution to potential Acquirers (as defined herein); 

		
	b)
	Identifying and introducing the Company to prospective financial investors, strategic corporate investors, acquirers of equity or assets, merger partners and/or other potential acquirers (collectively, “Acquirers”) and marketing the Transaction to such potential Acquirers;

LADENBURG THALMANN & CO. INC.
277 Park Avenue, 26th floor
New York, NY 10172
Phone 212.409.2000   •   Fax 212.409.2169

MEMBER NYSE, NYSE American, FINRA, SIPC

Vital Therapies, Inc.
October 10, 2018
Page 2 of 2

		
	c)
	Evaluating Transaction proposals and providing the Company’s management with guidance on valuation and Transaction structure and terms;

		
	d)
	Assisting the Company’s management in negotiating the terms of a Transaction (as appropriate);

		
	e)
	Coordinating due diligence, documentation and Transaction closing; and

		
	f)
	Rendering an opinion (whether or not favorable) to the Company’s board of directors, as to whether, on the date of such opinion, the consideration to be paid in the Transaction is fair, from a financial point of view, to the shareholders of the Company (the “Opinion”).

Ladenburg shall not be required to undertake duties not reasonably within the scope of the financial advisory or investment banking services contemplated by this Agreement.
		
	4.
	Nature of Engagement.  In order to facilitate Ladenburg’s efforts to effect a Transaction, during the Term, the Company shall not authorize any other party to act on the Company’s behalf with respect to any Transaction.

		
	5.
	Fees.  In consideration for the services described above, Ladenburg shall be entitled to receive, and the Company agrees to pay Ladenburg, the following compensation:

		
	a)
	Initial Fee.  An upfront retainer fee of $75,000 payable by check or wire transfer on the date hereof. The initial fee is creditable against the Transaction Fee.

		
	b)
	Transaction Fee.  If the Company consummates a Transaction, the Company shall pay to Ladenburg a transaction fee (the “Transaction Fee”), payable by wire transfer at the closing of the Transaction, equal to $1,000,000.

		
	c)
	Fairness Opinion.  The fee for rendering the Opinion shall be $250,000 (the “Opinion Fee”), which shall be paid when Ladenburg renders the Opinion. 

		
	d)
	Fee Obligation. Ladenburg shall be entitled to the fees set forth in this Paragraph 5 with respect to any Transaction consummated during the Term, or within one year after the date of termination or expiration of this Agreement.  

		
	e)
	Other.  In the event that any portion of the Transaction(s) includes instruments or arrangements not contemplated by this Agreement, then the Company agrees to negotiate with Ladenburg in good faith the amount of Transaction Fees that will be due Ladenburg under such circumstances. No fee payable to any other financial advisor by the Company or any other company in connection with the subject matter of this engagement shall reduce or otherwise affect any fee payable hereunder to Ladenburg.  All fees due to Ladenburg hereunder shall have no offsets, are non-refundable and non-cancelable.

Vital Therapies, Inc.
October 10, 2018
Page 3 of 3

		
	6.
	Reimbursement of Expenses.  In addition to the fees described in Paragraph 5 above, the Company agrees to reimburse Ladenburg promptly, upon request from time to time, for all reasonable, documented, out-of-pocket expenses incurred by Ladenburg (including travel, databases, fees and disbursements of counsel, and of other consultants and advisors retained by Ladenburg, etc.), provided that Ladenburg shall not be entitled to reimbursement of expenses in excess of $50,000 in the aggregate without the prior written consent of the Company, which shall not be unreasonably withheld, conditioned or delayed.

We look forward to formalizing our business relationship.  If the foregoing and the attached Exhibit A correctly set forth our agreement, please execute the enclosed copy of this letter in the space provided and return it to us.

Very truly yours,

LADENBURG THALMANN & CO. INC.

By:      /s/ David Strupp        
Name: David Strupp
Title:   Managing Director 

Confirmed and agreed to this 11th day of October, 2018

VITAL THERAPIES, INC.

By:       /s/ Duane Nash                                 
Name:  Duane Nash, M.D., J.D., M.B.A.
Title:    President

Vital Therapies, Inc.
October 10, 2018
Page 4 of 4

EXHIBIT A

		
	(A)
	Representations of the Company.  The Company hereby represents and warrants that any and all information supplied hereunder to Ladenburg in connection with any and all services to be performed hereunder by Ladenburg for and on behalf of the Company shall be, to the best of the Company’s knowledge, true, complete and correct in all material respects as of the date of such dissemination and shall not, in the aggregate, fail to state a material fact necessary to make any of such information not misleading.  The Company hereby acknowledges that the ability of Ladenburg to adequately provide services as described herein is dependent upon the prompt dissemination of accurate, correct and complete information to Ladenburg.  The Company further represents and warrants hereunder that this Agreement has been duly and validly authorized by all requisite corporate action; that the Company has the full right, power and capacity to execute, deliver and perform its obligations hereunder; and that this Agreement, upon execution and delivery of the same by the Company, will represent the valid and binding obligation of the Company enforceable in accordance with its terms.  The representations and warranties set forth herein shall survive the termination or expiration of this Agreement.

		
	(B)
	Indemnification.  The Company hereby agrees to indemnify and hold Ladenburg, its officers, directors, principals, employees, shareholders, affiliates, and members, and their successors and assigns, harmless from and against any and all loss, claim, damage, liability, deficiencies, actions, suits, proceedings, costs and legal expenses  or expense whatsoever (including, but not limited to, reasonable legal fees and other expenses and reasonable disbursements incurred in connection with investigating, preparing to defend or defending any action, suit or proceeding, including any inquiry or investigation, commenced or threatened, or any claim whatsoever, or in appearing or preparing for appearance as witness in any proceeding, including any pretrial proceeding such as a deposition) (collectively, "Losses") arising out of, based upon, or in any way related or attributed to (i) any breach of a representation, warranty or covenant by the Company contained in this  Agreement or (ii) any activities or services performed hereunder by Ladenburg, except to the extent that it is finally judicially determined in a court of competent jurisdiction that such Losses were the primary and direct result of the intentional misconduct or gross negligence of Ladenburg in performing the services hereunder.

If Ladenburg receives written notice of the commencement of any legal action, suit or proceeding with respect to which the Company is or may be obligated to provide indemnification pursuant to this Section (B), Ladenburg shall, within twenty (20) days of the receipt of such written notice, give the Company written notice thereof (a "Claim Notice").  Failure to give such Claim Notice within such twenty (20) day period shall not constitute a waiver by Ladenburg of its right to indemnity hereunder with respect to such action, suit or proceeding; provided, however, that the indemnification may be limited to the extent the Company has been materially prejudiced by any such failure or delay of timely notification. Upon receipt by the Company of a Claim Notice from Ladenburg with respect to any claim for indemnification which is based upon a claim made by a third party ("Third Party Claim"), the Company may assume the defense of the Third Party Claim with counsel of its own choosing, as described below.  Ladenburg shall cooperate in the defense of the Third Party Claim and shall furnish such records, information and testimony and attend all such conferences, discovery proceedings, hearings, trial and appeals as may be reasonably required in connection therewith.  Ladenburg shall have the right to employ one counsel of its own, which shall be at the Company's expense if (i) the Company and Ladenburg shall have mutually agreed in writing to the retention of such counsel, (ii) the Company shall have failed in a timely manner to assume the defense and employ counsel or experts reasonably satisfactory to Ladenburg in such litigation or proceeding or (iii) the named parties to any such litigation or proceeding (including any impleaded parties) include the Company and Ladenburg and representation of the Company and Ladenburg by the same counsel or experts would, in the reasonable opinion of Ladenburg, be inappropriate due to actual or potential differing interests between the Company and Ladenburg. The Company shall not 

Vital Therapies, Inc.
October 10, 2018
Page 5 of 5

satisfy or settle any Third Party Claim for which indemnification has been sought and is available hereunder, without the prior written consent of Ladenburg, which consent shall not be delayed and which shall not be required if Ladenburg is granted a release in connection therewith.   The indemnification provisions hereunder shall survive the termination or expiration of this Agreement.
The Company further agrees, upon demand by Ladenburg, to promptly reimburse Ladenburg for, or pay, any Loss as to which Ladenburg has been indemnified herein with such reimbursement to be made currently as any Loss is incurred by Ladenburg. Notwithstanding the provisions of the aforementioned indemnification, any such reimbursement or payment by the Company of fees, expenses, or disbursements incurred by Ladenburg shall be repaid by Ladenburg to the extent that a final judgment is finally judicially determined (after all appeals or the expiration of time to appeal) in a court of competent jurisdiction against Ladenburg based solely upon its gross negligence or intentional misconduct in the performance of its duties hereunder, and provided further, that the Company shall not be required to make reimbursement or payment for any settlement effected without the Company’s prior written consent (which consent shall not be unreasonably withheld or delayed).  
If for any reason the foregoing indemnification is unavailable or is insufficient to hold Ladenburg harmless, the Company agrees to contribute the amount paid or payable by Ladenburg in such proportion as to reflect not only the relative benefits received by the Company, as the case may be, on the one hand, and Ladenburg, on the other hand, but also the relative fault of the Company and Ladenburg as well as any relevant equitable considerations.  In no event shall Ladenburg contribute in excess of the fees actually received by it pursuant to the terms of this Agreement.  
For purposes of this Agreement, each officer, director, shareholder, member, and employee or affiliate of Ladenburg and each person, if any, who controls Ladenburg (or any affiliate) within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended, shall have the same rights as Ladenburg with respect to matters of indemnification by the Company hereunder.
		
	(C)
	Confidentiality.  Ladenburg agrees that all non-public information pertaining to the prior, current or contemplated business of the Company is valuable and confidential assets of the Company.  Such information shall include, without limitation, information relating to customer lists, bidding procedures, intellectual property, patents, trademarks, trade secrets, financing techniques and sources and such financial statements of the Company as are not available to the public.  Ladenburg, its officers, directors, employees, agents and members shall hold all such information in trust and confidence for the Company and shall not use or disclose any such information for other than the Company’s business.  Such confidentiality does not apply (i) where such information is publicly available or later becomes publicly available other than through a breach of this Agreement, (ii) where such information is subsequently lawfully obtained by Ladenburg from a third party or parties, (iii) if such information is known to Ladenburg prior to the execution of this Agreement or (iv) as may be required by law, rule or regulation.

		
	(D)
	Independent Contractor.  It is expressly understood and agreed that Ladenburg shall, at all times, act as an independent contractor with respect to the Company and not as an employee or agent of the Company, and nothing contained in this Agreement shall be construed to create a joint venture, partnership, association or other affiliation, or like relationship, between the parties.  It is specifically agreed that the relationship is and shall remain that of independent parties to a contractual relationship and that Ladenburg shall have no right to bind the Company in any manner.  In no event shall either party be liable for the debts or obligations of the other except as otherwise specifically provided in this Agreement.

Vital Therapies, Inc.
October 10, 2018
Page 6 of 6

		
	(E)
	Amendment.  No modification, waiver, amendment, discharge or change of this Agreement shall be valid unless the same is evidenced by a written instrument, executed by the party against which such modification, waiver, amendment, discharge, or change is sought.

		
	(F)
	Notices.  All notices, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given when delivered in person or transmitted by facsimile transmission or on the third calendar day after being mailed by United States registered or certified mail, return receipt requested, postage prepaid, to the addresses herein above first mentioned or to such other address as any party hereto shall designate to the other for such purpose.

		
	(G)
	Entire Agreement.  This Agreement contains all of the understandings and agreements of the parties with respect to the subject matter discussed herein.  All prior agreements, whether written or oral, are merged herein and shall be of no force or effect.

		
	(H)
	Severability.  The invalidity, illegality or unenforceability of any provision or provisions of this Agreement will not affect any other provision of this Agreement, which will remain in full force and effect, nor will the invalidity, illegality or unenforceability of a portion of any provision of this Agreement affect the balance of such provision.  In the event that any one or more of the provisions contained in this Agreement or any portion thereof shall for any reason be held to be invalid, illegal or unenforceable in any respect, this Agreement shall be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.

		
	(I)
	Construction; Venue.  This Agreement shall be governed by and construed in accordance with the laws of the State of Florida.  The Company agrees that the sole and exclusive venue for any matters arising hereunder shall be the court of competent jurisdiction in Miami-Dade County, Florida and agrees to waive any objections to such venue.   EACH OF LADENBURG AND THE COMPANY HEREBY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING, SUIT OR CLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT. 

		
	(J)
	Binding Nature.  The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties, and their respective successors and assigns.

		
	(K)
	Counterparts.  This Agreement may be executed in any number of counterparts, including facsimile signatures, which shall be deemed as original signatures. All executed counterparts shall constitute one Agreement, notwithstanding that all signatories are not signatories to the original or the same counterpart.

		
	(L)
	Attorneys’ Fees and Court Costs.  If any party to this Agreement brings an action, directly or indirectly based upon this Agreement or the matters contemplated hereby against the other party, the prevailing party shall be entitled to recover, in addition to any other appropriate amounts, its reasonable costs and expenses in connection with such proceeding, including, but not limited to, reasonable attorneys’ fees and expenses and court costs.

		
	(M)
	Computer Virus.  During the course of this engagement, Ladenburg may exchange electronic versions of documents and emails with you using commercially available software.  Unfortunately, the technology community is occasionally victimized by the creation and dissemination of so-called viruses, or similar destructive electronic programs.  Ladenburg takes the issues raised by these viruses seriously and has invested in document and email scanning software that identifies and rejects files containing known viruses.  Ladenburg also updates its system with the software vendor’s most current releases at regular intervals.  

Vital Therapies, Inc.
October 10, 2018
Page 7 of 7

By utilizing this virus scanning software, Ladenburg’s system may occasionally reject a communication you send.  Ladenburg in turn may send you something that is rejected by your system.  This infrequent occurrence is to be expected as part of the ordinary course of business.  
Because the virus protection industry is generally one or two steps behind new viruses, Ladenburg cannot guarantee that its communications and documents will always be virus free.  Occasionally, a virus will escape and go undetected as it is passed from system to system.  Although Ladenburg believes its virus protection measures are excellent, it can make no warranty that its documents will be virus free at all times.
Please inform Ladenburg immediately in the event a virus enters your company’s system via any electronic means originating from Ladenburg.  Through cooperative efforts, disruption to communications can be minimized.  
		
	(N)
	Information Disclosure.  Subject to Section (C) hereof, Ladenburg may disclose any information when it is believed necessary for the conduct of its business, or where disclosure is required by law. For example, information may be disclosed for audit or research purposes, or to law enforcement and regulatory agencies to do such things as prevent fraud. Subject to Section (C) hereof, information may also be disclosed to affiliates as well as to others that are outside Ladenburg.  Ladenburg may make other disclosures of information as permitted by law. 

		
	(O)
	Legal Services.  While certain principals of Ladenburg are attorneys, Ladenburg is not, in any manner, providing legal services or legal advice to the Company. Furthermore, the Company agrees and acknowledges that Ladenburg is not an advisor as to tax, accounting or regulatory matters in any jurisdiction.

		
	(P)
	Securities Trading and Other Activities.  Ladenburg is a full service securities firm engaged, directly or indirectly, in various activities, including securities trading, investment management, financing and brokerage activities.  The Company agrees and acknowledges that in the ordinary course of these activities, Ladenburg and its affiliates may actively trade the debt or equity securities (or related derivative securities) of the Company and other companies which may be the subject of the engagement contemplated by this Agreement for its own account and for the accounts of its customers and may at any time hold long and short positions in such securities.  The Company further agrees and acknowledges that Ladenburg and its affiliates also may from time to time perform various investment banking and financial advisory services for other clients and customers who may have conflicting interests with respect to the Company or the Transaction and nothing herein shall in any way limit Ladenburg’s, or its affiliates’, ability to provide such services.  

		
	(Q)
	No Fiduciary Duties.  The Company represents that it is a sophisticated business enterprise that has retained Ladenburg for the limited purposes set forth in this Agreement, and the parties acknowledge and agree that their respective rights and obligations are contractual in nature.  Each party disclaims any intention to impose fiduciary obligations on the other by virtue of the engagement contemplated by this Agreement.

		
	(R)
	USA Patriot Act. If necessary, the Company agrees to provide Ladenburg with information and supporting documentation to enable Ladenburg to comply with the requirements under Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA Patriot Act") (Public Law 107-56).

		
	(S)
	Marketing.  Ladenburg shall have the ability to publicize (i.e., use of the Company logo in its marketing materials) its role in providing the Company with the services noted herein.

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