Document:

EXHIBIT 4.21

  

 

Dated 18 April
2016

 

 

 

 

 

FOURTH SUPPLEMENTAL
AGREEMENT

relating to a

loan of (originally)
US$40,000,000

 

to

ARTFUL SHIPHOLDING
S.A. 

and

LONGEVITY MARITIME
LIMITED

 

provided by

DVB BANK SE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

     

    

 

Contents

 

 

	Clause	Page
	 	 
	1   Definitions	2
	 	 
	2   Agreement of the Bank	4
	 	 
	3   Amendments to the Existing Documents	4
	 	 
	4   Representations and warranties	12
	 	 
	5   Conditions	13
	 	 
	6   Relevant Parties’ Confirmation	14
	 	 
	7   Expenses	14
	 	 
	8   Miscellaneous and notices	14
	 	 
	9   Applicable law	16
	 	 
	Schedule 1 Documents and evidence required as conditions precedent	17

 

     

     

    

 

THIS FOURTH SUPPLEMENTAL AGREEMENT is
dated on 18 April 2016 and made BETWEEN:

 

		(1)	ARTFUL SHIPHOLDINGS S.A., a corporation incorporated in the Republic of the Marshall Islands
with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960
(the “Artful Borrower”);

 

		(2)	LONGEVITY MARITIME LIMITED, a company incorporated in the Republic of Malta with its registered
office at 18/2 South Street, Valetta, VLT 1102, Republic of Malta (the “Longevity Borrower”; and together with
the Artful Borrower, the “Borrowers”);

 

		(3)	GLOBUS MARITIME LIMITED, a corporation incorporated in the Republic of the Marshall Islands,
with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall Islands MH96960
(the “Corporate Guarantor”);

 

		(4)	GLOBUS SHIPMANAGEMENT CORP., a corporation incorporated in the Republic of the Marshall
Islands, with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Republic of the Marshall
Islands MH96960 (the “Manager”); and

 

		(5)	DVB BANK SE, a banking corporation incorporated and established under the laws of the Federal
Republic of Germany, acting for the purposes of this Agreement through its office at Platz der Republik 6, D-60325 Frankfurt am
Main, Federal Republic of Germany (the “Bank”).

 

WHEREAS:

 

		(A)	this Agreement reflects the terms of an agreement reached in principle between the Bank and the
Borrowers during March 2016;

 

		(B)	this Agreement is supplemental to:

 

		(a)	a facility agreement dated 20 June 2011 (the “Original Agreement”) made between
(1) the Borrowers as joint and several borrowers and (2) the Bank as lender, as amended and supplemented by a supplemental letter
dated 16 November 2011 (the “Supplemental Letter”), a supplemental agreement dated 1 March 2012 (the “First
Supplemental Agreement”), a supplemental agreement dated 10 April 2013 (the “Second Supplemental Agreement)
and a supplemental agreement dated 20 February 2015 (the “Third Supplemental Agreement”; and together with the
Original Agreement, the Supplemental Letter, the First Supplemental Agreement and the Second Supplemental Agreement, the “Principal
Agreement”) whereby the Bank agreed (inter alia) to make available to the Borrowers, upon the terms and conditions therein
contained, a loan of up to $40,000,000 of which the principal amount outstanding at the date hereof is $21,003,750; and

 

		(b)	a corporate guarantee dated 20 June 2011 executed by the Corporate Guarantor in favour of the Bank
as amended and supplemented by the First Supplemental Agreement, the Second Supplemental Agreement and the Third Supplemental Agreement
(together the “Principal Corporate Guarantee”); and

 

		(C)	this Agreement sets out the terms and conditions upon which the Bank shall, at the request of the
Borrowers and the Corporate Guarantor, provide its consent to:

 

		(a)	the waiver of the application of clause 5.3 of the Principal Corporate Guarantee during the Third
Revision Period (as such term is defined below);

 

		(b)	the revision of the loan repayment provisions;

 

		(c)	the reduction of the Security Requirement during the Third Revision Period;

 

		(d)	the waiver of the minimum liquidity requirement contained in clause 8.1.16 of the Principal Agreement;
and

 

		(e)	certain consequential amendments to the terms and conditions applicable to the Principal Agreement
and/or the Principal Corporate Guarantee.

 

    	 	1	 

     

    

 

NOW IT IS HEREBY AGREED as follows:

 

		1	Definitions

 

		1.1	Defined expressions

 

Words and expressions defined
in the Principal Agreement or the Principal Corporate Guarantee shall unless the context otherwise requires or unless otherwise
defined herein, have the same meanings when used in this Agreement.

 

		1.2	Definitions

 

In this Agreement, unless the
context otherwise requires:

 

“Artful Mortgage Amendment”
means a third amendment to the Artful Mortgage executed or (as the context may require) to be executed between the Artful Borrower
and the Bank under the Fourth Supplemental Agreement in such form as the Bank may require;

 

“Artful Operating
Account” means a Dollar account opened or (as the context may require) to be opened by the Artful Borrower with the Bank
with account number 2910058107;

 

“Artful Operating
Account Pledge” means the first priority account pledge executed or (as the context may require) to be executed by the
Artful Borrower in favour of the Bank in respect of the Artful Operating Account in such form as the Bank may require in its sole
discretion;

 

“Corporate Guarantee”
means the Principal Corporate Guarantee as amended and supplemented by this Agreement;

 

“Effective Date”
means the date, no later than 30 April 2016, on which the Bank has received the documents and evidence specified in clause
5 and Schedule 1 in a form and substance satisfactory to it;

 

“Existing Documents”
means, together, the Principal Agreement and the Principal Corporate Guarantee and “Existing Document” means
either of them;

 

“Government Entity”
means and includes (whether having a distinct legal personality or not) any national or local government authority, board, commission,
department, division, organ, instrumentality, court or agency and any association, organisation or institution of which any of
the foregoing is a member or to whose jurisdiction any of the foregoing is subject or in whose activities any of the foregoing
is a participant;

 

“Indebtedness”
means any obligation for the payment or repayment of money, whether as principal or as surety and whether present or future, actual
or contingent;

 

“Loan” shall
have the meanings ascribed in the Principal Agreement;

 

“Loan Agreement”
means the Principal Agreement as amended and supplemented by this Agreement;

 

“Longevity Operating
Account” means a Dollar account opened or (as the context may require) to be opened by the Longevity Borrower with the
Bank with account number 2910058093;

 

“Longevity Operating
Account Pledge” means the first priority account pledge executed or (as the context may require) to be executed by the
Longevity Borrower in favour of the Bank in respect of the Longevity Operating Account in such form as the Bank may require in
its sole discretion;

 

    	 	2	 

     

    

 

“Operating Accounts”
means together the Artful Operating Account and the Longevity Operating Account and “Operating Account” means
either of them;

 

“Operating Account
Pledges” means together the Artful Operating Account Pledge and the Longevity Operating Account Pledge and “Operating
Account Pledge” means either of them;

 

“Relevant Documents”
means this Agreement, the Artful Mortgage Amendment, the Operating Account Pledges and any other document executed by a Relevant
Party in connection with this Agreement;

 

“Relevant Parties”
means, together, the Borrowers, the Manager and the Corporate Guarantor and “Relevant Party” means each one
of them; and

 

“Revision Period”
means the period commencing on 1 March 2016 and ending on 31 March 2017 (both dates inclusive).

 

		1.3	Existing Documents

 

References in:

 

		1.3.1	the Principal Agreement to “this Agreement”; and

 

		1.3.2	the Principal Corporate Guarantee to “this Guarantee”,

 

shall, with
effect from the Effective Date and unless the context otherwise requires, be references to the Principal Agreement and the Principal
Corporate Guarantee, respectively, as amended by this Agreement and words such as “herein”, “hereof”, “hereunder”,
“hereafter”, “hereby” and “hereto”, where they appear in the Principal Agreement and/or the
Principal Corporate Guarantee shall be construed accordingly.

 

		1.4	Headings

 

Clause headings and the
table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.

 

		1.5	Construction of certain terms

 

In this Agreement, unless the
context otherwise requires:

 

		1.5.1	references to clauses and schedules are to be construed as references to clauses of,
and schedules to, this Agreement and references to this Agreement includes its schedules;

 

		1.5.2	references to (or to any specified provision of) this Agreement or any other document shall be
construed as references to this Agreement, that provision or that document as in force for the time being and as amended in accordance
with terms thereof, or, as the case may be, with the agreement of the relevant parties;

 

		1.5.3	references to a “regulation” include any present or future regulation, rule,
directive, requirement, request or guideline (whether or not having the force of law) of any agency, authority, central bank or
government department or any self-regulatory or other national or supra-national authority;

 

		1.5.4	words importing the plural shall include the singular and vice versa;

 

		1.5.5	references to a time of day are to London time;

 

    	 	3	 

     

    

 

		1.5.6	references to a person shall be construed as references to an individual, firm, company, corporation,
unincorporated body of persons or any Government Entity;

 

		1.5.7	references to a “guarantee” include references to an indemnity or other assurance
against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a default
by any other person to pay any Indebtedness and “guaranteed” shall be construed accordingly; and

 

		1.5.8	references to any enactment shall be deemed to include references to such enactment as re-enacted,
amended or extended.

 

		2	Agreement of the Bank

 

		2.1	Agreement of the Bank subject to Effective Date

 

The
Bank, relying upon the representations and warranties on the part of the Relevant Parties contained in clause 4 and subject
to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment
on or before 30 April 2016 of the conditions
contained in clause 5 and Schedule 1, agrees to:

 

		2.1.1	waive the application of clause 5.3 of the Principal Corporate Guarantee and the requirement to
complete paragraph 1 of any Compliance Certificate delivered to the Bank under clause 8.1.8 of the Principal Agreement and/or clause
5.1.5 of the Principal Corporate Guarantee, in each case, at all times during the Third Revision Period other than when (i) an
Event of Default has occurred and is continuing or (ii) a judgment, order or any other legal proceeding has been taken against
the Corporate Guarantor or any member of the Group for an amount exceeding $500,000; and

 

		2.1.2	the amendments to the Existing Documents on the terms set out in clause 3.

 

		2.2	Immediate agreement of Bank

 

The
Bank, relying upon the representations and warranties on the part of the Relevant Parties contained in clause 4 and subject
to the terms and conditions of this Agreement agrees as of the date of this Agreement to:

 

		2.2.1	the withdrawal of $500,000 in total standing to the credit of the Artful Minimum Liquidity Account
and its immediate application in prepayment of the March 2016 and June 2016 repayment instalments in respect of the Artful Advance;
and

 

		2.2.2	the withdrawal of $500,000 in total standing to the credit of the Longevity Minimum Liquidity Account
and its immediate application in prepayment of the March 2016 and June 2016 repayment instalments in respect of the Longevity Advance.

 

		3	Amendments to the Existing Documents

 

		3.1	Amendments to the Principal Agreement

 

The Principal Agreement shall,
with effect on and from the Effective Date, be (and is hereby) amended in accordance with the following provisions (and the Principal
Agreement (as so amended) will continue to be binding upon each of the parties hereto upon such terms as so amended):

 

		3.1.1	by deleting in clause 1.2 of the Principal Agreement, the definition of “Account Bank”;

 

    	 	4	 

     

    

 

		3.1.2	by deleting in clause 1.2 of the Principal Agreement the definitions of “Agreed Expenses”,
“Artful Mortgage”, “Artful Operating Account”, “Cut Off Repayment Date”,
“Longevity Operating Account”, “Repayment Dates”, “Restart Repayment Date”
“Security Requirement” and “Second Revision Period” and by inserting in their respective
places the following new definitions of “Agreed Expenses”, “Artful Mortgage”, “Artful
Operating Account”, “Cut Off Repayment Date”, “Longevity Operating Account”, “Repayment
Dates”, “Restart Repayment Date” “Security Requirement” and “Second Revision
Period”:

 

“Agreed Expenses”
means, in relation to a Calculation Period and a Borrower and its Ship, the lesser of (i) the total voyage and operating expenses
and costs (including, without limitation, maintenance cost, crew wages, insurance cost and management fees), administrative costs
and dry-docking costs and the total cost of any intermediate or special survey, all incurred and paid by that Borrower for that
Ship during such Calculation Period, all as shown in the then latest financial statements of that Borrower for such Calculation
Period and (ii) and amount in Dollars equal to the aggregate of $6,500 per day for each full day which that Ship is in full operation
(as opposed to being in lay-up of any kind) during such Calculation Period;

 

“Artful Mortgage”
means the first preferred Marshall Islands mortgage of the Artful Ship dated 22 June 2011 executed by the Artful Borrower in favour
of the Bank, as amended by the Artful Mortgage Amendment, the Second Artful Mortgage Amendment and the Third Artful Mortgage Amendment;

 

“Artful Operating
Account” means a Dollar account to be opened by the Artful Borrower with the Bank and includes any sub-accounts thereof
and any other account designated in writing by the Bank to be the Artful Operating Account for the purposes of this Agreement;

 

“Cut Off Repayment
Date” means (subject to clause 6.3):

 

		(a)	in respect of the Artful Advance, 22 June 2016; and

 

		(b)	in respect of the Longevity Advance, 14 June 2016;

 

“Longevity Operating
Account” means a Dollar account to be opened by the Longevity Borrower with the Bank and includes any sub-accounts thereof
and any other account designated in writing by the Bank to be the Longevity Operating Account for the purposes of this Agreement;

 

“Repayment
Dates” means, together, in relation to each Advance (subject to clause 6.3):

 

		(a)	the First Repayment Date in respect of such Advance;

 

		(b)	each of the dates falling at three (3) monthly intervals after such First Repayment Date up to
Cut Off Repayment Date in respect of such Advance;

 

		(c)	the Restart Repayment Date in respect of such Advance;

 

		(d)	each of the dates falling at three (3) monthly intervals after such Restart Repayment Date;

 

		(e)	the Final Maturity Date in respect of such Advance,

 

and “Repayment Date”
means each one of them;

 

“Restart Repayment
Date” means (subject to clause 6.3):

 

		(a)	in respect of the Artful Advance, 22 March 2017; and

 

		(b)	in respect of the Longevity Advance, 14 March 2017;

 

“Second Revision Period”
means the period commencing on 31 December 2014 and ending on 29 February 2016 (both dates inclusive);

 

    	 	5	 

     

    

 

“Security Requirement”
means the amount in Dollars (as certified by the Bank whose certificate shall, in the absence of manifest error, be conclusive
and binding on the Borrowers) which is at any relevant time:

 

		(a)	during the period commencing on the day of this Agreement and ending on 30 December 2012, one hundred
and twenty per cent (120%) of the Loan minus any amount standing to the credit of the Minimum Liquidity Accounts up to $1,000,000
in aggregate at that time;

 

		(b)	during the Revision Period, one hundred and seven per cent (107%) of the Loan minus any amount
standing to the credit of the Operating Accounts or, as the case may be, Minimum Liquidity Accounts up to $1,000,000 in aggregate
at that time;

 

		(c)	during the Second Revision Period, one hundred and ten per cent (110%) of the Loan minus any amount
standing to the credit of the Minimum Liquidity Accounts up to $1,000,000 in aggregate at that time;

 

		(d)	during the Third Revision Period, fifty per cent (50%) of the Loan; and

 

		(e)	at all other times during the Security Period (other than the periods set out in paragraphs (a),
(b), (c) and (d) above), one hundred and thirty per cent (130%) of the Loan minus any amount standing to the credit of the Minimum
Liquidity Accounts up to $1,000,000 in aggregate at that time;”;

 

		3.1.3	by inserting in the third line in the definition of “Security Documents” in
clause 1.2 of the Principal Agreement the words “, the Second Supplemental Agreement, the Third Supplemental Agreement, the
Fourth Supplemental Agreement” after the words ”the Supplemental Agreement”;

 

		3.1.4	by inserting in clause 1.2 of the Principal Agreement in the correct alphabetical order the following
new definitions of “Bail-in Action”, “Bail-In Legislation”, “Deferred Amount”,
“EEA Member Country”, “EU Bail-In Legislation Schedule”, “Fourth Supplemental Agreement”,
“Resolution Authority”, “Third Artful Mortgage Amendment”, “Third Revision Period”
and “Write-down and Conversion Powers”:

 

“Bail-In
Action” means the exercise of any Write-down and Conversion Powers;

 

“Bail-In Legislation”
means:

 

		(a)	in relation to an EEA Member Country which has implemented, or which at any time implements, Article
55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms,
the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

 

		(b)	in relation to any other state, any analogous law or regulation from time to time which requires
contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;

 

“Deferred
Amount” means:

 

		(a)	in relation to the Artful Advance, $880,000;

 

		(b)	in relation to the Longevity Advance, $832,500,

 

in either
case, as reduced from time to time by prepayments made by or on behalf of the Borrowers under this Agreement;

 

“EEA Member Country”
means any member state of the European Union, Iceland, Liechtenstein and Norway;

 

    	 	6	 

     

    

 

“EU Bail-In Legislation
Schedule” means the document described as such and published by the Loan Market Association (or any successor person)
from time to time;

 

“Fourth
Supplemental Agreement” means the supplemental agreement dated 18 April 2016 made between the Borrowers, the Manager,
the Corporate Guarantor and the Bank supplemental to this Agreement;

 

“Resolution Authority”
means any body which has authority to exercise any Write-down and Conversion Powers;

 

“Third Artful Mortgage
Amendment” means a third amendment to the Artful Mortgage executed or (as the context may require) to be executed between
the Artful Borrower and the Bank under the Fourth Supplemental Agreement in such form as the Bank may require;

 

“Third Revision Period”
means the period commencing on 1 March 2016 and ending on 31 March 2017 (both dates inclusive);

 

“Write-down and Conversion
Powers” means:

 

		(a)	in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time
to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

 

		(b)	in relation to any other applicable Bail-In Legislation:

 

		(i)	any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person
that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution,
to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability
arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to
provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation
in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those
powers; and

 

		(ii)	any similar or analogous powers under that Bail-In Legislation;

 

		3.1.5	by deleting clauses 4.1.1 and 4.1.2 of the Principal Agreement in their entirety and by replacing
them with the following new clauses 4.1.1 and 4.1.2:

 

		“4.1.1	The Borrowers shall repay the Artful Advance by twenty eight (28) repayment instalments, one such
instalment to be repaid on each of the Repayment Dates relevant to such Advance. Subject to the provisions of this Agreement, the
amount of each repayment instalment (other than the last instalment) shall be $440,000, and the amount of the last repayment instalment
shall be $6,620,000 (comprising a repayment instalment of $440,000 and a balloon payment of $6,180,000).

 

		4.1.2	The Borrowers shall repay the Longevity Advance by twenty eight (28) repayment instalments, one
such instalment to be repaid on each of the Repayment Dates relevant to such Advance. Subject to the provisions of this Agreement,
the amount of each repayment instalment (other than the last instalment) shall be $416,250 and the amount of the last repayment
instalment shall be $6,261,250 (comprising a repayment instalment of $416,250 and a balloon payment of $5,845,000).”;

 

		3.1.6	by deleting in clause 4.5.4 of the Principal Agreement, the words “or clause 8.4” and
by inserting it their place the words “or clause 8.4.3(c));

 

    	 	7	 

     

    

 

		3.1.7	by deleting clause 7.1.7 of the Principal Agreement and by inserting in its place the following
new clause 7.1.7:

 

		“7.1.7	Choice of law

 

the choice of (i) English law
to govern the Underlying Documents and the Security Documents (other than the Mortgages and the Account Pledges), (ii) the law
of the relevant Flag State to govern each Mortgage and (iii) German law to govern the Account Pledges, and the submissions by the
Security Parties to the non-exclusive jurisdiction of the English
courts, are valid and binding;”;

 

		3.1.8	by deleting clause 8.1.16 of the Principal Agreement and by inserting in its place the following
new clause 8.1.16:

 

“maintain at all times:

 

		(a)	from the date of this Agreement and until the Effective Date (as such term is defined in the Supplemental
Agreement), in its Operating Account a cash balance of at least $500,000;

 

		(b)	after the Effective Date (as such term is defined in the Supplemental Agreement) and until one
day prior to the Second Effective Date, in its Minimum Liquidity Account, a cash balance of at least $500,000;

 

		(c)	from the Effective Date (as such term is defined in the Fourth Supplemental Agreement) onwards,
in its Minimum Liquidity Account, a cash balance equal to the amount deposited from time to time in such Account pursuant to the
provisions of clauses 8.4.3 or 8.4.5, but not exceeding $500,000 in aggregate at any time”;

 

		3.1.9	by deleting in the last line of clause 8.1.16 of the Principal Agreement the word “and”,
by amending in clause 8.1.17 the end “.” with “;” and by inserting thereafter the following new clauses
8.1.18, 8.1.19 and 8.1.20:

 

		“8.1.18	Lay-up

 

not lay up
its Ship except with the written consent of the Bank (such consent not to be unreasonably withheld) and provided always that:

 

		(a)	the cash balance in the Minimum Liquidity Account of that Borrower (excluding any amount retained
therein pursuant to clause 8.1.16) at the time such consent is given, is equal to the sum of (i) the aggregate amount of the interest
payable on the relevant Advance for the following twelve (12) months, plus (ii) the amount which the Bank agrees before such lay-up
commences that is the anticipated aggregate cost of such lay-up and the cost of re-activating such Ship at the end of such lay-up,
plus (iii) the amount which the Bank agrees before such lay-up commences that is the anticipated aggregate cost of dry-docking
in relation to such lay-up;

 

		(b)	that Ship is laid-up for not more than twelve (12) months; and

 

		(c)	that Ship is laid-up within the inner limits of a port lying in a jurisdiction acceptable to the
Bank;

 

		8.1.19	Most favoured nation

 

without prejudice to clause
8, in the event that and each time that the Guarantor or any other member of the Group agrees to, or grants, or agrees to grant,
any financial covenants to, for the benefit of, or in favour of, any lender or creditor of any indebtedness incurred by the relevant
member of the Group after the Effective Date (as such term is defined in the Fourth Supplemental Agreement), which are in any respect
more favourable to such lender or creditor than the provisions of clause 8 are in favour of the Bank, the Borrowers and the Guarantor
undertake and agree with the Bank:

 

    	 	8	 

     

    

 

		(a)	to notify the Bank within 5 days after the relevant agreement to, or the granting of or any agreement
to grant (as the case may be), such more favourable rights;

 

		(b)	within 30 days after the date when such more favourable rights have been agreed or granted, to
agree to, provide and grant, such more favourable rights also in favour of the Bank under or in connection with this Agreement,
by entering into (and/or by procuring that any Security Party or any other person entering into) such documentation as the Bank
shall reasonably require, immediately after the Bank’s request to the Borrowers; and

 

		(c)	that any such more favourable rights shall in any event apply to this Agreement and the other Security
Documents automatically from the time they are granted to the other lenders or creditors, and irrespective of whether the Borrowers
and the other Security Parties have complied with their other obligations under this clause 8.1.19, except if the Bank at any time
advises the Borrowers that such or certain of such more favourable rights will not so apply and always without prejudice to the
terms and conditions of this Agreement and the other Security Documents; and

 

		8.1.20	Investments

 

procure that that no other member
of the Group shall acquire any ship if (i) there is less than $500,000 standing to the credit of each Minimum Liquidity Account
and (ii) the amount of the balloon payment in respect of the Artful Advance is more than $5,300,000 and the amount of the balloon
payment in respect of the Longevity Advance is more than $5,012,000 unless the Borrowers prepay either Advance in an amount equal
to $856,250 prior to each acquisition of a ship or the Bank decides to finance such acquisition of a ship.”;

 

		3.1.10	by deleting in its entirety existing clause 8.3.12 of the Principal Agreement and by replacing
it with the following new clause 8.3.12:

 

		“8.3.12	Share capital and distribution

 

purchase or
otherwise acquire for value any of its shares or declare or pay any dividends or distribute any of their present or future assets,
undertakings, rights or revenues to any of their respective shareholders Provided however that each Borrower shall be entitled
to declare or pay cash dividends to its shareholders if (i) no Event of Default has occurred and is continuing at the time of declaration
or payment of such dividends, nor would result from the declaration or payment of such dividends and/or (ii) there is no less than
$500,000 standing to the credit of each Minimum Liquidity Account and (iii) the amount of each balloon payment is not more than
$5,300,000 in respect of the Artful Advance and not more than $5,012,000 in respect of the Longevity Advance;”;

 

		3.1.11	by deleting in entirety clause 8.4 of the Principal Agreement and by replacing it with the following
new clause 8.4:

 

		“8.4	Excess Cash recapture

 

		8.4.1	During the period commencing on the day of the Effective Date (as such term is defined in the Second
Supplemental Agreement) and ending on the last day of the Security Period, the Bank shall, in relation to each Calculation Period
and each Borrower, calculate the amount of the Excess Cash of the relevant Borrower and its Ship for such Calculation Period upon
receipt of the unaudited financial statements of that Borrower in relation to such Calculation Period.

 

		8.4.2	If, and only if, (a) following a calculation the Bank determines the Excess Cash of a Borrower
for a Calculation Period to be a positive figure and (b) the Bank determines that the Security Value is less than 130% of the Loan
on the last day of such Calculation Period, then the Bank shall notify such Borrower accordingly and of the amount of such Excess
Cash.

 

    	 	9	 

     

    

 

		8.4.3	Immediately following each such notification of Excess Cash in respect of a Calculation Period,
the Borrowers shall apply an amount equal to such Excess Cash in the following order:

 

		(a)	firstly, prepay to the Bank on a pro rata basis such part of the balloon payment of each Advance
as is equal to the Deferred Amount relevant to such Advance at the time;

 

		(b)	secondly, deposit in equal shares in each Minimum Liquidity Account that part of that Excess Cash
in excess of the amounts prepaid under clause 8.4.3(a); and

 

		(c)	thirdly, any excess after that prepay to the Bank against the Advances in accordance with clause
4.5.4.

 

		8.4.4	If at any time following the submission of the unaudited financial statements of a Borrower to
the Bank under this Agreement in respect of a financial year, the Bank calculates the Excess Cash in respect of a Borrower and
a Calculation Period falling during any Revision Period and finds such Excess Cash to be higher than the Excess Cash for that Borrower
previously calculated for that same Calculation Period by reference to the quarterly unaudited financial statements of that Borrower,
then the Bank may notify the Borrowers of the difference, and the Borrowers shall make a further application in accordance with
clause 8.4.3 equal to the difference. Such prepayment shall be made on the next Interest Payment Date falling immediately after
such notification.”;

 

		3.1.12	by deleting in its entirety existing clause 14.1.2 of the Principal Agreement and by inserting
in its place the following new clause 14.1.2:

 

		“14.1.2	procure that all moneys payable to each Borrower in respect of the Earnings of such Borrower’s
Ship shall, unless and until the Bank directs to the contrary pursuant to the relevant Ship Security Documents, be paid to such
Borrower’s Operating Account, Provided however that if any of the moneys paid to either Operating Account are payable in
a currency other than Dollars, the Bank shall converts such moneys into Dollars at the Bank’s spot rate of exchange at the
relevant time for the purchase of Dollars with such currency and the term “spot rate of exchange” shall include any
premium and costs of exchange payable in connection with the purchase of Dollars with such currency.”;

 

		3.1.13	by deleting in its entirety existing clause 14.3 of the Principal Agreement and by inserting in
its place the following new clause 14.3:

 

“At
any time after the occurrence of an Event of Default, the Bank may, without notice to the Borrowers, apply all moneys then standing
to the credit of the Operating Accounts (or either of them) (together with interest from time to time accruing or accrued thereon)
in or towards satisfaction of any sums due to the Bank under the Security Documents in the manner specified in clause 13.1.”;

 

		3.1.14	by inserting immediately after existing clause 17.3 of the Principal Agreement the following new
clause 18:

 

		“18	Contractual recognition of bail-in

 

Notwithstanding any other term
of any Security Document or any other agreement, arrangement or understanding between the parties to this Agreement, each party
to this Agreement acknowledges and accepts (and shall procure that any other Security Party acknowledges and accepts) that any
liability of any party to this Agreement to any other party to this Agreement under or in connection with the Security Documents
may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

 

    	 	10	 

     

    

 

		(a)	any Bail-In Action in relation to any such liability,
including (without limitation):

 

		(i)	a reduction, in full or in part, in the principal amount, or outstanding amount due (including
any accrued but unpaid interest) in respect of any such liability;

 

		(ii)	a conversion of all, or part of, any such liability into shares or other instruments of ownership
that may be issued to, or conferred on, it; and

 

		(iii)	a cancellation of any such liability; and

 

		(b)	a variation of any term of any Security Document to the extent necessary to give effect to any
Bail-In Action in relation to any such liability.”; and

 

		3.1.15	by inserting immediately after the existing second paragraph of clause 17.2 of the Principal Agreement
the following new paragraph: 

 

“If any person appointed
as process agent for a Relevant Party is unable for any reason to act as agent for service of process, that Relevant Party must
immediately (and in any event within ten days of such event taking place) appoint another agent on terms acceptable to the Bank. 
Failing this, the Bank may appoint another agent for this purpose.”.

 

		3.2	Amendments to the Principal Corporate Guarantee 

 

The Principal
Corporate Guarantee shall with effect on and from the Effective Date, be (and is hereby) amended (and the Principal Corporate Guarantee
(as so amended) will continue to be binding upon each of the parties hereto upon such terms as so amended):

 

		3.2.1	by inserting in clause 1.2 of the Principal Corporate Guarantee the following new definition of
“Third Revision Period”:

 

“Third
Revision Period” means the period commencing on 1 March 2016 and ending on 30 March 2017;

 

		3.2.2	by deleting in clause 1.2 of the Principal Corporate Guarantee the existing definition of “Second
Revision Period” and by inserting its place the following new definition of “Second Revision Period”:

 

“Second
Revision Period” means the period commencing on 31 December 2014 and ending on 29 February 2016;

 

		3.2.3	by deleting in its entirety clause 5.2.6 of the Principal Corporate Guarantee and by replacing
it with the following new clause 5.2.6:

 

		“5.2.6	Share capital and distribution

 

without prejudice
to clause 5.3, distribute any of its present or future assets, undertakings, rights or revenues to any of its shareholders Provided
however that the Guarantor may:

 

		(a)	subject to paragraphs (b) and (c) below, at all times during the Security Period, declare or pay
cash dividends to its shareholders at any time if no Event of Default has occurred and is continuing at the time of declaration
or payment of such dividends, nor would result from the declaration or payment of such dividends;

 

    	 	11	 

     

    

 

		(b)	at all times during the Revision Period, declare or pay cash dividends to its shareholders holding
preference share of an aggregate amount not exceeding $500,000 per financial year; and

 

		(c)	at all times during the Third Revision Period and at any time thereafter declare or pay cash dividends
to its shareholders provided that (i) no Event of Default has occurred and is continuing at the time of declaration or payment
of such dividends, nor would result from the declaration or payment of such dividends and/or (ii) there is no less than $500,000
standing to the credit of each Minimum Liquidity Account at the time of declaration or payment of such dividends and (iii) the
amount of each balloon payment is not more than $5,300,000 in respect of the Artful Advance and not more than $5,012,500 in respect
of the Longevity Advance at the time of declaration or payment of such dividends;”; and

 

		3.2.4	by amending in paragraph 2 of Schedule 1 of the Principal Corporate Guarantee, the references to
“the required minimum amount of $500,000” should be amended to read “the required minimum amount of $[500,000][
]”.

 

		3.3	Continued force and effect

 

Save as amended by this Agreement,
the provisions of each of the Existing Documents and the other Security Documents shall continue in full force and effect and each
of the Existing Documents and this Agreement shall be read and construed as one instrument.

 

		4	Representations and warranties

 

		4.1	Primary representations and warranties

 

Each of the Relevant Parties
represents and warrants to the Bank that:

 

		4.1.1	Existing representations and warranties

 

the representations and warranties
set out in clause 7 of the Original Agreement, clause 4 of the First Supplemental Agreement, clause 4 of the Second Supplemental
Agreement, clause 4 of the Third Supplemental Agreement clause 4 of the Principal Corporate Guarantee and clause 4 of each Manager’s
Undertaking were true and correct on the date of the relevant document and are true and correct, including to the extent that they
may have been or shall be amended by this Agreement, as if made at the date of this Agreement with reference to the facts and circumstances
existing at such date;

 

		4.1.2	Corporate power

 

it has power to execute, deliver
and perform its obligations under each Relevant Document to which it is or will become, a party; all necessary corporate, shareholder
and other action has been taken by it to authorise the execution, delivery and performance of each Relevant Document to which it
is or will become, a party;

 

		4.1.3	Binding obligations

 

this Agreement and the other
Relevant Documents to which it is, or will become, a party constitute its valid and legally binding obligations enforceable in
accordance with its terms;

 

		4.1.4	No conflict with other obligations

 

the execution, delivery and
performance of each Relevant Document to which it is, or will become, a party by such Relevant Party will not (i) contravene any
existing law, statute, rule or regulation or any judgment, decree or permit to which such Relevant Party is subject, (ii) conflict
with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which
such Relevant Party is subject or by which it or any of its property is bound or (iii) contravene or conflict with any provision
of the constitutional documents of such Relevant Party or (iv) result in the creation or imposition of or oblige such Relevant
Party to create any Encumbrance on any of its undertakings, assets, rights or revenues;

 

    	 	12	 

     

    

 

		4.1.5	No filings required

 

save for the registration of
the Artful Mortgage Amendment through the relevant Registry, it is not necessary to ensure the legality, validity, enforceability
or admissibility in evidence of each Relevant Document to which it is, or will become, a party that it or any other instrument
be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or
that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to such Relevant Document
and each Relevant Document to which it is, or will become, a party is in proper form for its enforcement in the courts of each
Relevant Jurisdiction;

 

		4.1.6	Choice of law

 

the choice of English law to
govern the Relevant Documents (other than the Artful Mortgage Amendment), the choice of Marshall Islands law to govern the Artful
Mortgage Amendment and the submission by such Relevant Party to the non-exclusive jurisdiction of the English courts are valid
and binding; and

 

		4.1.7	Consents obtained

 

every consent, authorisation,
licence or approval of, or registration or declaration to, governmental or public bodies or authorities or courts required by such
Relevant Party in connection with the execution, delivery, validity, enforceability or admissibility in evidence of each Relevant
Document to which it is, or will become, a party or the performance by such Relevant Party of its obligations under each Relevant
Document to which it is, or will become, a party has been obtained or made and is in full force and effect and there has been no
default in the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same.

 

		4.2	Repetition of representations and warranties

 

Each of the representations
and warranties contained in clause 4.1 of this Agreement and clause 7 of the Principal Agreement, clause 4 of the First Supplemental
Agreement, clause 4 of the Second Supplemental Agreement, clause 4 of the Third Supplemental Agreement, clause 4 of the Principal
Corporate Guarantee and clause 4 of each Manager’s Undertaking shall be deemed to be repeated by each Relevant Party (in
respect of each document that each is a party to) on the Effective Date as if made with reference to the facts and circumstances
existing on such day.

 

		5	Conditions

 

		5.1	Documents and evidence

 

The agreement of the Bank referred
to in clause 2 shall be subject to the receipt by the Bank or its duly authorised representative of the documents and evidence
specified in schedule 1 in form and substance satisfactory to the Bank.

 

		5.2	General conditions precedent

 

The agreement of the Bank referred
to in clause 2 shall be further subject to:

 

		5.2.1	the representations and warranties in clause 4 being true and correct on the Effective Date as
if each was made with respect to the facts and circumstances existing at such time; and

 

		5.2.2	no Default having occurred and continuing at the time of the Effective Date.

 

    	 	13	 

     

    

 

		5.3	Waiver of conditions precedent

 

The conditions specified in
this clause 5 are inserted solely for the benefit of the Bank and may be waived by the Bank in whole or in part with or without
conditions.

 

		6	Relevant Parties’ Confirmation

 

Each of the Relevant Parties
acknowledges and agrees, for the avoidance of doubt, that:

 

		6.1.1	each of the Security Documents to which it is a party, and its obligations thereunder, shall remain
in full force and effect notwithstanding the amendments made to the Principal Agreement and the Principal Corporate Guarantee by
this Agreement; and

 

		6.1.2	with effect from the Effective Date, references to “the Agreement” or “the Loan
Agreement” or “the Corporate Guarantee” in any of the other Security Documents to which it is a party shall henceforth
be references to the Principal Agreement and the Principal Corporate Guarantee as each is amended and/or supplemented by this Agreement
and as from time to time hereafter amended and/or supplemented and shall also be deemed to include the obligations of the Borrowers
hereunder.

 

		7	Expenses

 

		7.1	Expenses

 

The Borrowers agree to pay
to the Bank on a full indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Bank:

 

		7.1.1	in connection with the negotiation, preparation, execution and, where relevant, registration of
the Relevant Documents and of any amendment or extension of, or the granting of any waiver or consent under, any of the Relevant
Documents; and

 

		7.1.2	in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any
rights under any of the Relevant Documents or otherwise in respect of the monies owing and obligations incurred under any of the
Relevant Documents,

 

together with interest at the
rate referred to in clause 3.4 of the Principal Agreement from the date on which such expenses were incurred to the date of
payment (as well after as before judgement).

 

		7.2	Value Added Tax

 

All expenses payable pursuant
to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon.

 

		7.3	Stamp and other duties

 

The Borrowers agree to pay
to the Bank on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable
by the Bank) imposed on or in connection with any of the Relevant Documents and shall indemnify the Bank against any liability
arising by reason of any delay or omission by the Borrowers to pay such duties or taxes.

 

		8	Miscellaneous and notices

 

		8.1	Notices

 

Every notice, request, demand
or other communication under this Agreement shall:

 

		8.1.1	be in writing, delivered personally or by first-class prepaid letter (airmail if available) or
telefax or other means of telecommunication in permanent written form;

 

    	 	14	 

     

    

 

		8.1.2	be deemed to have been received, in the case of a letter, when delivered personally or three (3)
days after it has been put into the post and, in the case of a facsimile transmission or other means of telecommunication in permanent
written form, at the time of despatch (provided that if the date of despatch is not a business day in the country of the addressee
or, if the time of despatch is after the close of business in the country of the addressee, it shall be deemed to have been received
at the opening of business on the next such business day); and

 

		8.1.3	be sent:

 

		(a)	if to the Relevant Parties or any of them:

 

c/o Globus Shipmanagement Corp.

128 Vouliagmenis Avenue

166 74 Glyfada

Greece

 

		Fax No:	+30 210 960 8352

		Attention:	Mr Athanasios Feidakis

 

		(b)	if to the Bank at:

 

For credit matters:

 

DVB Bank SE, Frankfurt

Platz der Republik 6

D-60325 Frankfurt am Main

Federal Republic of Germany

 

		Fax No:	+49 69 9750 4526

		Attention:	LAM Frankfurt

 

with a copy to:

 

DVB Bank SE

Representative Office Greece

95 Akti Miaouli

185 38 Piraeus

Greece

 

		Fax No:	+30 210 455 7420

		Attention:	Dry Bulk Group

 

For Loan Administration Matters:

 

DVB Bank SE

Park House

6th Floor

16-18 Finsbury Circus

London EC2M 7EB

England

 

		Fax No:	+44 207 256 4352

		Attention:	LAM London

 

		8.2	Counterparts

 

This Agreement
may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed
and delivered shall be an original but all counterparts shall together constitute one and the same instrument.

 

    	 	15	 

     

    

 

		8.3	Relevant Parties’ obligations

 

Each of the Relevant Parties
being party to this Agreement agrees and consents to be bound by this Agreement notwithstanding that any other Relevant Party which
was intended to sign or be bound may not do so or be effectually bound and notwithstanding that this Agreement may be invalid or
unenforceable against any of the other Relevant Parties whether or not the deficiency is known to the Bank. The Bank shall be at
liberty to release any of the Relevant Parties from this Agreement and to compound with or otherwise vary the liability or to grant
time and indulgence to make other arrangements with any of the Relevant Parties without prejudicing or affecting the rights and
remedies of the Bank against the other Relevant Parties.

 

		9	Applicable law

 

		9.1	Law

 

This Agreement and any non-contractual
obligations connected with it are governed by, and shall be construed in accordance with, English law.

 

		9.2	Submission to jurisdiction

 

Each of the Relevant Parties
agrees, for the benefit of the Bank, that any legal action or proceedings arising out of or in connection with this Agreement (including
any legal action or proceedings arising out of or in connection with any non-contractual obligations connected with it) against
any of its assets may be brought in the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to
the jurisdiction of such courts and irrevocably designates, appoints and empowers Messrs Saville & Co at present of One Carey
Lane, EC2V 8AE, London, England to receive for it and on its behalf, service of process issued out of the English courts in any
such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the
right of the Bank to take proceedings against any of the Relevant Parties in the courts of any other competent jurisdiction nor
shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not. Each of the Relevant Parties further agrees that only the courts of England and not those of any other
state shall have jurisdiction to determine any claim which any of the Relevant Parties may have against the Bank arising out of
or in connection with this Agreement and/or any non-contractual obligations connected with it.

 

		9.3	Contracts (Rights of Third Parties) Act 1999

 

No term of this Agreement is
enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

 

IN WITNESS whereof the parties hereto
have caused this Agreement to be duly executed as a deed on the date first above written.

 

    	 	16	 

     

    

Schedule 1

 

Documents and evidence required as conditions precedent

 

(referred to in clause 5.1)

 

		1	Corporate authorisations

 

In relation to each of the
Relevant Parties:

 

		(a)	Constitutional documents

 

copies certified by an officer
of each of the Relevant Parties, as a true, complete and up to date copies, of all documents which contain or establish or relate
to the constitution of that party or a secretary's certificate confirming that there have been no changes or amendments to the
constitutional documents certified copies of which were previously delivered to the Bank pursuant to the Principal Agreement;

 

		(b)	Resolutions

 

copies of resolutions of each
of its board of directors and, if required following advice by the Bank’s counsel, its shareholders approving this Agreement
and the other Relevant Documents and the terms and conditions hereof and thereof and authorising the signature, delivery and performance
of each such party's obligations thereunder, certified (in a certificate dated no earlier than five (5) Banking Days prior to the
date of this Agreement) by an officer of such Relevant Party as:

 

		(1)	being true and correct;

 

		(2)	being duly passed at meetings of the directors of such Relevant Party and, as the case may be,
of the shareholders of such Relevant Party each duly convened and held;

 

		(3)	not having been amended, modified or revoked; and

 

		(4)	being in full force and effect,

 

together with originals or certified
copies of any powers of attorney issued by any party pursuant to such resolutions; and

 

		(c)	Certificate of incumbency

 

a list of directors and officers
of each Relevant Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than five
(5) Banking Days prior to the date of this Agreement) by an officer of such Relevant Party to be true, complete and up to date;

 

		2	Consents

 

a certificate (dated no earlier
than five (5) Banking Days prior to the date of this Agreement) from an officer of each of the Relevant Parties stating that no
consents, authorisations, licences or approvals are necessary for such Relevant Party to authorise, or are required by each of
the Relevant Parties or any other party (other than the Bank) in connection with, the execution, delivery, and performance of this
Agreement and the other Relevant Documents to which such Relevant Party is or is to be a party;

 

    	 	17	 

     

    

 

		3	Legal opinions

 

such legal opinions in relation
to the laws of the Republic of Malta and the Republic of the Marshall Islands and any other legal opinions as the Bank shall in
its absolute discretion require;

 

		4	Prepayment

 

evidence
satisfactory to the Bank that (i) the Borrowers have prepaid the two repayment instalments of the Artful Advance next due in an
amount equal to $880,000 and the two repayment instalments of the Longevity Advance next due in an amount of $832,500 and (ii)
such prepayments are effected (1) for an amount of $1,000,000 from the moneys standing to the credit of the Minimum Liquidity Accounts
and (2) for an amount of $712,500 from new equity injection to the Borrowers or either of them by the Corporate Guarantor;

 

		5	Artful Mortgage Amendment registration

 

evidence that the Artful Mortgage
Amendment has been registered against the Artful Ship through the relevant Registry under the laws and flag of the relevant Flag
State;

 

		6	Operating Accounts

 

evidence
that each Operating Account has been opened and duly completed mandate forms in respect thereof have been delivered to the Bank;

 

		7	Operating Account Pledges

 

the Operating
Account Pledges duly executed by the parties thereto;

 

		8	German Process agent

 

a letter
from the relevant Borrower's agent for receipt of service of proceedings accepting its appointment under its Operating Account
Pledge as such Borrower’s process agent;

 

		9	English Process agent

 

a letter from each Relevant
Party's agent for receipt of service of proceedings accepting its appointment under this Agreement as such Relevant Party’s
process agent; and

 

		10	Other matters

 

such other matters or favourable
opinions as the Bank may require.

 

    	 	18	 

     

    

 

	EXECUTED as a
    DEED	)	 
	By
    Olga Lambrianidou	)	 
	for
    and on behalf of	)	/s/Olga Lambrianidou
	ARTFUL
    SHIPHOLDING S.A.	)	Attorney-in-fact
	in
    the presence of:	)	 

 

 

 

/s/ Emmanouil
Chamilothoris

Witness

Name: Emmanouil
Chamilothoris

Address:

Occupation:
Attorney

 

 

 

	EXECUTED as a
    DEED	)	 
	By
    Olga Lambrianidou	)	 
	for
    and on behalf of	)	/s/ Olga
    Lambrianidou
	LONGEVITY
    MARITIME LIMITED	)	Attorney-in-fact
	in
    the presence of:	)	 

 

 

 

/s/ Emmanouil
Chamilothoris

Witness

Name: Emmanouil
Chamilothoris

Address:

Occupation:
Attorney

 

 

 

	EXECUTED as a
    DEED	)	 
	By Olga Lambrianidou	)	 
	for and on
    behalf of	)	/s/ Olga
    Lambrianidou
	GLOBUS MARITIME
    LIMITED	)	Attorney-in-fact
	in the presence of:	)	 

 

 

/s/ Emmanouil
Chamilothoris

..........................................

Witness

Name: Emmanouil
Chamilothoris

Address:

Occupation:
Attorney

 

    	 	19	 

     

    

 

	EXECUTED as a
    DEED	)	 
	by Olga Lambrianidou	)	 
	for and on
    behalf of	)	/s/Olga Lambrianidou.
	GLOBUS SHIPMANAGEMENT
    CORP.	)	Attorney-in-fact
	in the presence of:	)	 

 

 

 

/s/ Emmanouil
Chamilothoris

Witness

Name: Emmanouil
Chamilothoris

Address:

Occupation:

 

 

 

	EXECUTED as a
    DEED	)	 
	by
    Emmanoujl Chamilothoris	)	 
	for
    and on behalf of	)	/s/ Emmanouil
    Chamilothoris
	DVB
    BANK SE	)	Attorney-in-fact
	in
    the presence of:	)	 

 

 

 

/s/ Ariana
Geogallis..........................................

Witness

Name: Ariana
Georgallis

Address:

Occupation:
Attorney

 

    	 	20Exhibit 10.1

 

THIRD AMENDED AND RESTATED INVESTMENT
ADVISORY AGREEMENT

 

THIS THIRD AMENDED
AND RESTATED INVESTMENT ADVISORY AGREEMENT is made as of August 11, 2014 by and among ZAIS FINANCIAL CORP., a Maryland corporation
(the “Company”), ZAIS Financial Partners, L.P., a Delaware partnership (the “Operating Partnership”),
ZAIS Asset I, LLC, a Delaware limited liability company (“Asset I”), ZAIS Asset II, LLC, a Delaware limited
liability company (“Asset II”), ZAIS Asset III, LLC, a Delaware limited liability company (“Asset III”),
ZAIS Asset IV, LLC, a Delaware limited liability company, ZAIS Funding, Inc., a Delaware corporation, ZFC Trust, a Maryland trust,
ZFC Trust TRS I, LLC, a Delaware limited liability company, and ZAIS REIT Management, LLC, a Delaware limited liability company
(together with its permitted assignees, the “Advisor”).

 

WHEREAS, the Company
is a corporation that has elected to be taxed as a REIT for U.S. federal income tax purposes commencing with its taxable year ended
December 31, 2011;

 

WHEREAS, the Company,
the Operating Partnership and each of the Subsidiaries (defined below) retained ZAIS Group, LLC (the “ZAIS”)
to provide investment advisory services to them on the terms and conditions set forth in the Investment Advisory Agreement, dated
August 3, 2011 (the “Investment Advisory Agreement”);

 

WHEREAS, the parties
to the Investment Advisory Agreement amended such agreement as of October 11, 2012 to reflect the assignment of such agreement
from ZAIS to the Advisor (the “First Amended and Restated Investment Advisory Agreement”), pursuant to that
certain Assignment of Investment Advisory Agreement, dated October 11, 2012, by and among ZAIS and the Advisor, and to make certain
other amendments;

 

WHEREAS, the parties
to the First Amended and Restated Investment Advisory Agreement amended such agreement as of December 13, 2012 (the “Second
Amended and Restated Investment Advisory Agreement”) to revise the definition of the defined term Stockholders' Equity,
to add additional subsidiaries of the Operating Partnership as parties and to make certain other amendments;

 

WHEREAS, the Advisor
and its affiliates continue to develop a loan sourcing infrastructure, including the requisite sourcing and seller technologies,
due diligence and settlement systems and other programs, policies and software, intended to enable the Subsidiaries to purchase
newly originated residential mortgage loans underwritten pursuant to the Advisor’s underwriting standards from approved sellers
at favorable pricing; and

 

WHEREAS, the parties
desire to amend the Second Amended and Restated Investment Advisory Agreement to provide for such services to be provided by the
Advisor or its affiliates for a fixed loan sourcing fee to be paid by the Company to the Advisor or its affiliates and to make
certain other amendments;

 

NOW THEREFORE, in consideration
of the mutual agreements herein set forth, the parties hereto agree as follows:

 

    -1-

     

    

 

Section 1.               
Definitions. The following terms have the following meanings assigned to them:

 

(a) “ABS”
means asset-backed securities.

 

(b)
“Advisor Indemnified Party” shall have the meaning set forth in Section 11(a) of this
Agreement.

 

(c) 
“Affiliate” means, when used with reference to a specified Person, any Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by, or is under common Control with the specified
Person.

 

(d)
“Agency RMBS” means residential mortgage-backed securities for which a U.S. government entity guarantees
payment of principal and interest to holders of the securities.

 

(e) “Agreement” means this Second Amended and Restated Investment Advisory Agreement, as amended from time
to time.

 

(f) “Asset
I” means ZAIS Asset I, LLC, a Delaware limited liability company.

 

(g) “Asset
II” means ZAIS Asset II, LLC, a Delaware limited liability company.

 

(h) “Asset
III” means ZAIS Asset III, LLC, a Delaware limited liability company.

 

(i) “Assets”
means the assets of the Company and the Subsidiaries.

 

(j)
“Bankruptcy” means, with respect to any Person, (a) the filing by such Person of a voluntary petition
seeking liquidation, reorganization, arrangement or readjustment, in any form, of its debts under Title 11 of the United
States Code or any other federal, state or foreign insolvency law, or such Person’s filing an answer consenting to or
acquiescing in any such petition, (b) the making by such Person of any assignment for the benefit of its creditors,
(c) the expiration of 60 days after the filing of an involuntary petition under Title 11 of the Unites States Code, an
application for the appointment of a receiver for a material portion of the assets of such Person, or an involuntary petition
seeking liquidation, reorganization, arrangement or readjustment of its debts under any other federal, state or foreign
insolvency law, provided that the same shall not have been vacated, set aside or stayed within such 60-day period or
(d) the entry against it of a final and non-appealable order for relief under any bankruptcy, insolvency or similar law
now or hereinafter in effect.

 

(k) “Base
Advisory Fee” means a base advisory fee equal to 1.5% per annum, calculated and paid quarterly in arrears, of (i)
prior to the Listing, Net Asset Value, (ii) after the Listing, the Stockholders’ Equity.

 

(l) “Board
of Directors” means the Board of Directors of the Company.

 

(m)
“CMBS” means commercial mortgage-backed securities.

 

(n) “Code”
means the Internal Revenue Code of 1986, as amended.

 

(o)
“Common Stock” means shares of the Company’s common stock, par value $0.0001 per share.

 

(p) “Company Account” shall have the meaning set forth in Section 5 of this Agreement.

 

(q)
“Company Indemnified Party” shall have the meaning set forth in Section 11(b) of this
Agreement.

 

    -2-

     

    

 

(r) “Conduit
Program” means the program pursuant to which the Advisor or its affiliates sources or facilitates the purchase of
newly originated residential mortgage loans by Subsidiaries from sellers approved by the Advisor or its affiliates utilizing
the underwriting guidelines and policies established by the Advisor or its affiliates.

 

(s)
“Control” (including the correlative meanings of the terms “Controls,” “Controlled
by” and “under common Control with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such Person, through the
ownership of voting securities, partnership interests or other equity interests.

 

(t)
“Effective Termination Date” shall have the meaning set forth in Section 13(a) of this Agreement.

 

(u) “Excess
Funds” shall have the meaning set forth in Section 2(m) of this Agreement.

 

(v) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(w)
“Expenses” shall have the meaning set forth in Section 9 of this Agreement.

 

(x)
"First Amended and Restated Investment Advisory Agreement" means the First Amended and Restated
Investment Advisory Agreement, dated October 11, 2012, by and among the Company, the Operating Partnership and each of the
Subsidiaries.

 

(y)
“GAAP” means generally accepted accounting principles, as applied in the United States.

 

(z) “Governing
Instruments” means, with regard to any entity, the articles of incorporation and bylaws in the case of a
corporation, certificate of limited partnership and the partnership agreement in the case of a general or
limited partnership, the articles of formation and the operating agreement in the case of a limited liability company, the
trust instrument in the case of a trust, or similar governing documents, in each case as amended from time to time.

 

(aa)
“Guidelines” shall have the meaning set forth in Section 2(b)(ii) of this Agreement.

 

(bb) “Indemnitee”
shall have the meaning set forth in Section 11(b) of this Agreement.

 

(cc)
“Indemnitor” shall have the meaning set forth in Section 11(c) of this Agreement.

 

(dd) “Independent
Directors” means the members of the Board of Directors who are not officers or employees of the Advisor or any
Person directly or indirectly controlling or controlled by the Advisor or its Affiliates, and who are
otherwise “independent” in accordance with the Company’s Governing Instruments and, if applicable, the
rules of any national securities exchange on which the Common Stock is listed.

 

(ee) “Initial Term” shall have the meaning set forth in Section 13 of this Agreement.

 

    -3-

     

    

 

(ff)
“Investment Advisory Agreement” means the Investment Advisory Agreement, dated August 3, 2011, by
and among the Company, the Operating Partnership and each of the Subsidiaries.

 

(gg)
“Investment Committee” means the Advisor’s investment committee that will oversee the
Company’s acquisition and financing strategies as well as compliance with the Company’s investment
guidelines.

 

(hh) “Investment
Company Act” means the Investment Company Act of 1940, as amended.

 

(ii) “Liabilities”
means the liabilities of the Company and the Subsidiaries.

 

(jj) “LIBOR”
means London Interbank Offered Rate.

 

(kk) “Listing”
means the listing of shares of Common Stock on the NASDAQ Capital Market or another U.S. national securities exchange.

 

(ll)
“Loan Sourcing Fee” means a fee calculated and paid quarterly in arrears equal to 0.50% of the
principal balance of newly originated residential mortgage loans sourced by the Advisor or its affiliates through the Conduit
Program and acquired by the Subsidiaries.

 

(mm) “Loan
Sourcing Fee Reimbursement” shall have the meaning set forth in Section ‎8(b)(i) of this Agreement.

 

(nn)
“Monitoring Services” shall have the meaning set forth in Section 2(b) of this Agreement.

 

(oo)
“Net Asset Value” means the value of all of the Assets determined by the Advisor as of the close of
business on the day on which the Assets are being valued less all of the Company’s Liabilities. In each case, the
Company’s net Assets will be determined on the accrual basis of accounting utilizing GAAP as a guideline.

 

(pp) 
“Non-Agency RMBS” means residential mortgage-backed securities that are not issued or guaranteed by a U.S.
government agency or federally chartered corporation.

 

(qq) “Notice
of Proposal to Negotiate” shall have the meaning set forth in Section 13(a) of this Agreement.

 

(rr)
“Offering” means the Company’s offering of Common Stock and OP units pursuant to a confidential
exchange offer statement, dated May 25, 2011, and the supplement thereto dated July 14, 2011, which closed on August 3,
2011.

 

(ss) “Operating
Partnership” means ZAIS Financial Partners, L.P.

 

(tt) “Person”
means any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.

 

    -4-

     

    

 

(uu)
“Portfolio Management Services” shall have the meaning set forth in Section 2(b) of this
Agreement.

 

(vv) “REIT”
means a “real estate investment trust” as defined under the Code.

 

(ww)
“Renewal Term” shall have the meaning set forth in Section 13(a) of this Agreement.

 

(xx)
"Second Amended and Restated Investment Advisory Agreement" means the Second Amended and Restated
Investment Advisory Agreement, dated December 13, 2012, by and among the Company, the Operating Partnership and each of the
Subsidiaries.

 

(yy)
“Securities Act” means the Securities Act of 1933, as amended.

 

(zz)
“Stockholders’ Equity” means:

 

(i) The Net Asset
Value of the Operating Partnership at completion of the Listing, plus

 

(ii) the sum of
the net proceeds from any issuances of the Company’s capital stock and the Operating Partnership's equity securities
(exclusive of Operating Partnership equity securities held by the Company or its controlled subsidiaries) following the
completion of the Listing (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any
such issuance), plus

 

(iii) the
Company’s retained earnings at the end of the most recently completed quarter (without taking into account any non-cash
equity compensation expense incurred in current or prior periods), less

 

(iv) any amount
that the Company pays for repurchases of the Common Stock since inception, any unrealized gains, losses or other items that
do not affect realized net income (regardless of whether such items are included in other comprehensive income or loss, or in
net income), as adjusted to exclude

 

(v) one-time
events pursuant to changes in GAAP and certain non-cash items after discussions between the Advisor and the
Company’s Independent Directors and approved by a majority of the Company’s Independent Directors.

 

For
purposes of calculating Stockholders’ Equity, outstanding OP Units (other than OP Units held by the Company) shall be treated
as outstanding shares of capital stock of the Company.

 

(aaa) “Subsidiary”
means any subsidiary of the Company; any partnership, the general partner of which is the Company or any subsidiary of the
Company; any limited liability company, the managing member of which is the Company or any subsidiary of the Company; and any
corporation or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the
outstanding equity interests is owned, directly or indirectly, by the Company or any subsidiary of the Company. Initially,
the Subsidiaries shall be Asset I, Asset II and Asset III.

 

(bbb)
“Target Assets” means residential mortgage loans, Non-Agency RMBS, Agency RMBS and other real
estate-related and financial assets, including, but not limited to, CMBS and ABS.

 

    -5-

     

    

 

(ccc) “Termination Fee” shall have the meaning set forth in Section 13(b) of this Agreement.

 

(ddd)
“Termination Notice” shall have the meaning set forth in Section 13(a) of this Agreement.

 

(eee) “Treasury
Regulations” means the regulations promulgated under the Code as amended from time to time.

 

(fff) “ZAIS”
means ZAIS Group, LLC.

 

Section 2.                
Appointment and Duties of the Advisor.

 

(a) 
The Company and each of the Subsidiaries hereby appoints the Advisor to manage the assets of the Company and the Subsidiaries
subject to the further terms and conditions set forth in this Agreement and the Advisor hereby agrees to use its commercially
reasonable efforts to perform each of the duties set forth herein. The appointment of the Advisor shall be exclusive to the
Advisor except to the extent that the Advisor otherwise agrees, in its sole and absolute discretion, and except to the extent
that the Advisor elects, pursuant to the terms of this Agreement, to cause the duties of the Advisor hereunder to be provided
by third parties.

 

(b) The Advisor, in its
capacity as manager of the assets and the day-to-day operations of the Company and the Subsidiaries, at all times will be subject
to the supervision of the Company’s Board of Directors and will have only such functions and authority as the Company may
delegate to it including, without limitation, the functions and authority identified herein and delegated to the Advisor hereby.
The Advisor will be responsible for the day-to-day operations of the Company and the Subsidiaries and will perform (or cause to
be performed) such services and activities relating to the assets and operations of the Company and the Subsidiaries as may be
appropriate, including, without limitation:

 

(i) forming
the Investment Committee, which will propose guidelines to be approved by a majority of the members of the Board of Directors
prior to the Listing and a majority of the Company’s Independent Directors after the Listing;

 

(ii)
serving as the Company’s and the Subsidiaries’ consultant with respect to the periodic review of the
guidelines and other parameters for the Assets, financing activities and operations, any modifications to which shall be
approved by a majority of the members of the Board of Directors prior to the Listing and a majority of the Independent
Directors after the Listing (such guidelines as initially approved and attached hereto as Exhibit A, as the same may
be modified with such approval, the “Guidelines”), and other policies for approval by the Board of
Directors;

 

(iii) sourcing
newly originated residential mortgage loans in accordance with the Conduit Program and periodically reviewing and, if
necessary, updating the underwriting guidelines and policies of the Conduit Program;

 

(iv) developing
the loan sourcing infrastructure related to the Conduit Program, including sourcing and seller technologies, due diligence
and settlement systems and other programs, policies and software;

 

(v) providing
the Company with portfolio management;

 

    -6-

     

    

 

(vi) investigating,
analyzing and selecting possible opportunities and acquiring, financing, retaining, selling, restructuring or disposing of
Assets consistent with the Guidelines;

 

(vii) with
respect to prospective purchases, sales or exchanges of Assets, conducting negotiations on behalf of the Company and the
Subsidiaries with sellers, purchasers and brokers and, if applicable, their respective agents and representatives;

 

(viii) advising
the Company on and negotiating and entering into, on behalf of the Company and the Subsidiaries, repurchase
agreements, interest rate swap agreements and other hedging instruments, and all other agreements and instruments required
for the Company and the Subsidiaries to conduct their business;

 

(ix) engaging
and supervising, on behalf of the Company and the Subsidiaries and at the Company’s expense, independent contractors
which provide investment banking, mortgage brokerage, securities brokerage, other financial services, due diligence services,
underwriting review services, legal and accounting services, and all other services (including transfer agent and
registrar services) as may be required relating to Assets (or potential Assets);

 

(x) coordinating and managing operations of any co-investment interests or joint venture held by the Company and the Subsidiaries
and conducting all matters with the co-investment partners or joint venture;

 

(xi) providing
executive and administrative personnel, office space and office services required in rendering services to the Company and
the Subsidiaries;

 

(xii)
administering the day-to-day operations and performing and supervising the performance of such other administrative
functions necessary to the management of the Company and the Subsidiaries as may be agreed upon by the Advisor and the Board
of Directors, including, without limitation, the collection of revenues and the payment of the debts and obligations of the
Company and the Subsidiaries and maintenance of appropriate computer services to perform such administrative functions;

 

(xiii)
communicating on behalf of the Company and the Subsidiaries with the holders of any of their equity or debt securities as
required to satisfy any reporting and other requirements of any governmental bodies or agencies or trading markets and to
maintain effective relations with such holders;

 

(xiv) counseling
the Company in connection with policy decisions to be made by the Board of Directors;

 

(xv)
evaluating and recommending to the Board of Directors hedging strategies and engaging in hedging activities on behalf of the
Company and the Subsidiaries, consistent with such strategies as so modified from time to time, with the Company’s
qualification as a REIT and with the Guidelines;

 

(xvi)
counseling the Company regarding the maintenance of its qualification as a REIT and monitoring compliance with the various
REIT qualification tests and other rules set out in the Code and Treasury Regulations thereunder and using commercially
reasonable efforts to cause the Company to qualify for taxation as a REIT;

 

    -7-

     

    

 

(xvii) counseling
the Company and the Subsidiaries regarding the maintenance of their exemptions from the status of an investment company
required to register under the Investment Company Act, monitoring compliance with the requirements for maintaining
such exemptions and using commercially reasonable efforts to cause them to maintain such exemptions from such status;

 

(xviii)
assisting the Company and the Subsidiaries in developing criteria for asset purchase commitments that are specifically
tailored to the Company’s objectives and strategies and making available to the Company and the Subsidiaries its
knowledge and experience with respect to the Target Assets, other real estate-related assets and non-real estate-related
assets;

 

(xix)
furnishing reports and statistical and economic research to the Company and the Subsidiaries regarding their activities and
services performed for the Company and the Subsidiaries by the Advisor;

 

(xx)
monitoring the operating performance of Assets and providing periodic reports with respect thereto to the Board of
Directors, including comparative information with respect to such operating performance and budgeted or projected operating
results;

 

(xxi)
deploying and redeploying any moneys and securities of the Company and the Subsidiaries (including acquiring
short-term Assets pending the acquisition of other Assets, payment of fees, costs and expenses, or payments of dividends to
stockholders of the Company and the Subsidiaries) and advising the Company and the Subsidiaries as to their capital structure
and capital raising;

 

(xxii)
assisting the Company and the Subsidiaries in retaining qualified accountants and legal counsel, as applicable, to assist in
developing appropriate accounting systems and procedures, internal controls and other compliance procedures and testing
systems with respect to financial reporting obligations and compliance with the provisions of the Code applicable to REITs
and to conduct quarterly compliance reviews with respect thereto;

 

(xxiii)
assisting the Company and the Subsidiaries to qualify to do business in all applicable jurisdictions and to obtain and
maintain all appropriate licenses;

 

(xxiv)
assisting the Company and the Subsidiaries in complying with all regulatory requirements applicable to them in respect
of their business activities, including preparing or causing to be prepared all financial statements required under
applicable regulations and contractual undertakings and all reports and documents, if any, required under the Exchange Act,
the Securities Act, or by any securities exchange requirements;

 

(xxv) assisting
the Company and the Subsidiaries in taking all necessary actions to enable them to make required tax filings and reports,
including soliciting stockholders for required information to the extent required by the provisions of the Code applicable to
REITs;

 

(xxvi) placing,
or arranging for the placement of, all orders pursuant to the Advisor’s investment determinations for the Company and
the Subsidiaries, either directly with the issuer or with a broker or dealer (including any affiliated broker or dealer);

 

(xxvii) handling
and resolving all claims, disputes or controversies (including all litigation, arbitration, settlement or other proceedings
or negotiations) on the Company’s and/or the Subsidiaries’ behalf in which the Company and/or the Subsidiaries
may be involved or to which they may be subject arising out of their day-to-day operations (other than with the Advisor or
its affiliates), subject to such limitations or parameters as may be imposed from time to time by the Board of Directors;

 

    -8-

     

    

 

(xxviii) using commercially
reasonable efforts to cause expenses incurred by the Company and the Subsidiaries or on their behalf to be commercially reasonable
or commercially customary and within any budgeted parameters or expense guidelines set by the Board of Directors from time to
time;

 

(xxix)
arranging marketing materials, advertising, industry group activities (such as conference participations and industry
organization memberships) and other promotional efforts designed to promote the business of the Company and the
Subsidiaries;

 

(xxx)
advising the Company and the Subsidiaries with respect to and structuring long term financing vehicles for their portfolio of
assets, and offering and selling securities publicly or privately in connection with any such structured financing;

 

(xxxi) performing
such other services as may be required from time to time for management and other activities relating to the assets and
business of the Company and the Subsidiaries as the Board of Directors shall reasonably request or the Advisor shall deem
appropriate under the particular circumstances; and

 

(xxxii) using
commercially reasonable efforts to cause the Company and the Subsidiaries to comply with all applicable laws.

 

Without limiting the foregoing, the Advisor
will perform portfolio management services (the “Portfolio Management Services”) on behalf of the Company and
the Subsidiaries with respect to the Assets. Such services will include, but not be limited to, consulting with the Company and
the Subsidiaries on the purchase and sale of, and other opportunities in connection with, the Company’s portfolio of assets;
the collection of information and the submission of reports pertaining to the Company’s assets, interest rates and general
economic conditions; periodic review and evaluation of the performance of the Company’s portfolio of assets; acting as liaison
between the Company and the Subsidiaries and banking, mortgage banking, investment banking and other parties with respect to the
purchase, financing and disposition of assets; and other customary functions related to portfolio management. Additionally, the
Advisor will perform monitoring services (the “Monitoring Services”) on behalf of the Company and the Subsidiaries
with respect to any loan servicing activities provided by third parties. Such Monitoring Services will include, but not be limited
to, negotiating servicing agreements; acting as a liaison between the servicers of the assets and the Company and the Subsidiaries;
review of servicers’ delinquency, foreclosure and other reports on assets; supervising claims filed under any insurance policies;
and enforcing the obligation of any servicer to repurchase assets.

 

(c) For
the period and on the terms and conditions set forth in this Agreement, the Company and each of the Subsidiaries
hereby constitutes, appoints and authorizes the Advisor as its true and lawful agent and attorney-in-fact, in its name, place
and stead, to negotiate, execute, deliver and enter into such securities repurchase and reverse repurchase agreements and
arrangements, brokerage agreements, interest rate swap agreements, custodial agreements and such other agreements,
instruments and authorizations on their behalf, on such terms and conditions as the Advisor, acting in its sole and absolute
discretion, deems necessary or appropriate. This power of attorney is deemed to be coupled with an interest.

 

(d) The
Advisor may enter into agreements with other parties, including its affiliates, for the purpose of engaging one or
more parties for and on behalf, and at the sole cost and expense, of the Company and the Subsidiaries to provide property
management, asset management, leasing, development and/or other services to the Company and the Subsidiaries (including,
without limitation, Portfolio Management Services and Monitoring Services) pursuant to agreement(s) with terms which are then
customary for agreements regarding the provision of services to companies that have assets similar in type, quality and value
to the assets of the Company and the Subsidiaries; provided that (i) any such agreements entered into with
affiliates of the Advisor shall be (A) on terms no more favorable to such affiliate than would be obtained from a third
party on an arm’s-length basis and (B) to the extent the same do not fall within the provisions of the Guidelines,
approved by a majority of the members of the Board of Directors prior to the Listing and a majority of the Independent
Directors after the Listing, (ii) with respect to Portfolio Management Services, (A) any such agreements shall be
subject to the Company’s prior written approval and (B) the Advisor shall remain liable for the performance of
such Portfolio Management Services, and (iii) with respect to Monitoring Services, any such agreements shall be subject
to the Company’s prior written approval.

 

    -9-

     

    

 

(e) To the extent
that the Advisor deems necessary or advisable, the Advisor may, from time to time, propose to retain one or more additional
entities for the provision of sub-advisory services to the Advisor, or enter into a shared facilities and services agreement
with its affiliates, in order to enable the Advisor to provide the services to the Company and the Subsidiaries specified by
this Agreement; provided that any such agreement (i) shall be on terms and conditions substantially identical to
the terms and conditions of this Agreement or otherwise not adverse to the Company and the Subsidiaries, and (ii) shall
be approved by the Board of Directors prior to the Listing and the Independent Directors of the Company after the
Listing.

 

(f) The
Advisor may retain, for and on behalf and at the sole cost and expense of the Company and the Subsidiaries, such services of
accountants, legal counsel, appraisers, insurers, brokers, transfer agents, registrars, developers, investment banks,
financial advisors, due diligence firms, underwriting review firms, banks and other lenders and others as the Advisor deems
necessary or advisable in connection with the management and operations of the Company and the Subsidiaries. Notwithstanding
anything contained herein to the contrary, the Advisor shall have the right to cause any such services to be rendered by its
employees or affiliates. Except as otherwise provided herein, the Company and the Subsidiaries shall pay or reimburse the
Advisor or its affiliates performing such services for the cost thereof; provided that such costs and reimbursements
are no greater than those which would be payable to outside professionals or consultants engaged to perform such services
pursuant to agreements negotiated on an arm’s-length basis.

 

(g) The Advisor may
effect transactions by or through the agency of another person with it or its affiliates which have an arrangement under
which that party or its affiliates will from time to time provide to or procure for the Advisor and/or its affiliates goods,
services or other benefits (including, but not limited to, research and advisory services; economic and political analysis,
including valuation and performance measurement; market analysis, data and quotation services; computer hardware and software
incidental to the above goods and services; clearing and custodian services and investment related publications), the nature
of which is such that provision can reasonably be expected to benefit the Company and the Subsidiaries as a whole and may
contribute to an improvement in the performance of the Company and the Subsidiaries or the Advisor or its affiliates in
providing services to the Company and the Subsidiaries on terms that no direct payment is made but instead the Advisor and/or
its affiliates undertake to place business with that party.

 

(h) In executing
portfolio transactions and selecting brokers or dealers, the Advisor will use its best efforts to seek on behalf of the
Company and the Subsidiaries the best overall terms available. In assessing the best overall terms available for any
transaction, the Advisor shall consider all factors that it deems relevant, including, without limitation, the breadth of the
market in the security, the price of the security, the financial condition and execution capability of the broker or dealer,
and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating
the best overall terms available, and in selecting the broker or dealer to execute a particular transaction, the Advisor may
also consider whether such broker or dealer furnishes research and other information or services to the Advisor.

 

    -10-

     

    

 

(i) The
Advisor has no duty or obligation to seek in advance competitive bidding for the most favorable commission rate applicable to
any particular purchase, sale or other transaction, or to select any broker-dealer on the basis of its purported or
“posted” commission rate, but will endeavor to be aware of the current level of charges of eligible
broker-dealers and to minimize the expense incurred for effecting purchases, sales and other transactions to the extent
consistent with the interests and policies of the Company and the Subsidiaries. Although the Advisor will generally seek
competitive commission rates, it is not required to pay the lowest commission or commission equivalent, provided that
such decision is made in good faith to promote the best interests of the Company and the Subsidiaries.

 

(j) As frequently
as the Advisor may deem necessary or advisable, or at the direction of the Board of Directors, the Advisor shall, at the sole
cost and expense of the Company and the Subsidiaries, prepare, or cause to be prepared, with respect to any Asset, reports
and other information with respect to such Asset as may be reasonably requested by the Company.

 

(k) The Advisor
shall prepare, or cause to be prepared, at the sole cost and expense of the Company and the Subsidiaries, all reports,
financial or otherwise, with respect to the Company and the Subsidiaries reasonably required by the Board of Directors in
order for the Company and the Subsidiaries to comply with their Governing Instruments or any other materials required to be
filed with any governmental body or agency, and shall prepare, or cause to be prepared, all materials and data necessary to
complete such reports and other materials including, without limitation, an annual audit of the Company’s and the
Subsidiaries’ books of account by a nationally recognized registered independent public accounting firm.

 

(l) The
Advisor shall prepare regular reports for the Board of Directors to enable the Board of Directors to review the
Company’s and the Subsidiaries’ acquisitions, portfolio composition and characteristics, credit quality,
performance and compliance with the Guidelines and policies approved by the Board of Directors.

 

(m) Notwithstanding
anything contained in this Agreement to the contrary, except to the extent that the payment of additional moneys is proven by
the Company to have been required as a direct result of the Advisor’s acts or omissions which result in the right of
the Company and the Subsidiaries to terminate this Agreement pursuant to Section 15 of this Agreement, the
Advisor shall not be required to expend money (“Excess Funds”) in connection with any expenses that are
required to be paid for or reimbursed by the Company and the Subsidiaries pursuant to Section 9 in excess of that
contained in any applicable Company Account (as herein defined) or otherwise made available by the Company and the
Subsidiaries to be expended by the Advisor hereunder. Failure of the Advisor to expend Excess Funds out-of-pocket shall not
give rise or be a contributing factor to the right of the Company and the Subsidiaries under Section 13(a) of
this Agreement to terminate this Agreement due to the Advisor’s unsatisfactory performance.

 

(n) In performing
its duties under this Section 2, the Advisor shall be entitled to rely reasonably on qualified experts and
professionals (including, without limitation, accountants, legal counsel and other service providers) hired by the Advisor at
the Company’s and the Subsidiaries’ sole cost and expense.

 

    -11-

     

    

 

Section 3.                
Devotion of Time; Additional Activities.

 

(a)The Advisor and
its affiliates will provide the Company and the Subsidiaries with a management team, including a Chief Executive Officer, a Chief
Financial Officer, and other appropriate support personnel. The Advisor is not obligated to dedicate any of its employees exclusively
to the Company, nor is the Advisor or its employees obligated to dedicate any specific portion of its or their time to the Company.

 

(b) The
Advisor agrees to offer the Company and the Subsidiaries the right to participate in all opportunities that the
Advisor determines are appropriate for the Company and the Subsidiaries in view of their objectives, policies and strategies,
and other relevant factors, subject to the exception that the Company and the Subsidiaries might not participate in each such
opportunity but will on an overall basis equitably participate with the Advisor’s other funds in relevant
opportunities. Nothing in this Agreement shall (i) prevent the Advisor or any of its affiliates, officers, directors,
employees or personnel, from engaging in other businesses or from rendering services of any kind to any other Person,
including, without limitation, investing in, or rendering advisory services to others investing in, any type of business
(including, without limitation, acquisitions of assets that meet the principal objectives of the Company), whether or not the
objectives or policies of any such other Person or entity are similar to those of the Company or (ii) in any way bind or
restrict the Advisor or any of its affiliates, officers, directors, employees or personnel from buying, selling or trading
any securities or assets for their own accounts or for the account of others for whom the Advisor or any of its affiliates,
officers, directors, employees or personnel may be acting. When making decisions where a conflict of interest may arise, the
Advisor will endeavor to allocate acquisition and financing opportunities in a fair and equitable manner over time as between
the Company and the Subsidiaries and the Advisor’s other clients.

 

(c) Advisors,
partners, officers, employees, personnel and agents of the Advisor or affiliates of the Advisor may serve as
directors, officers, employees, personnel, agents, nominees or signatories for the Company and/or any Subsidiary, to the
extent permitted by their Governing Instruments or by any resolutions duly adopted by the Board of Directors pursuant to the
Company’s Governing Instruments. When executing documents or otherwise acting in such capacities for the Company or the
Subsidiaries, such persons shall use their respective titles in the Company or the Subsidiaries.

 

Section 4.                
Agency. The Advisor shall act as agent of the Company and the Subsidiaries in making, acquiring, financing and disposing
of Assets, disbursing and collecting the funds of the Company and the Subsidiaries, paying the debts and fulfilling the obligations
of the Company and the Subsidiaries, supervising the performance of professionals engaged by or on behalf of the Company and the
Subsidiaries and handling, prosecuting and settling any claims of or against the Company and the Subsidiaries, the Board of Directors,
holders of the Company’s securities or representatives or properties of the Company and the Subsidiaries.

 

Section 5.                
Bank Accounts. At the direction of the Board of Directors, the Advisor may establish and maintain one or more bank
accounts in the name of the Company or any Subsidiary (any such account, a “Company Account”), and may collect
and deposit funds into any such Company Account or Company Accounts, and disburse funds from any such Company Account or Company
Accounts, under such terms and conditions as the Board of Directors may approve; and the Advisor shall from time to time render
appropriate accountings of such collections and payments to the Board of Directors and, upon request, to the auditors of the Company
or any Subsidiary.

 

Section 6.                
Records; Confidentiality. The Advisor shall maintain appropriate books of accounts and records relating to services
performed under this Agreement, and such books of account and records shall be accessible for inspection by representatives of
the Company or any Subsidiary at any time during normal business hours upon reasonable advance notice. The Advisor shall keep confidential
any and all information obtained in connection with the services rendered under this Agreement and shall not disclose any such
information (or use the same except in furtherance of its duties under this Agreement) to unaffiliated third parties except (i) with
the prior written consent of the Board of Directors; (ii) to legal counsel, accountants and other professional advisors; (iii) to
appraisers, financing sources and others in the ordinary course of the Company’s business; (iv) to governmental officials
having jurisdiction over the Company or any Subsidiary; (v) in connection with any governmental or regulatory filings of the
Company or any Subsidiary or disclosure or presentations to Company investors; (vi) as required by law or legal process to
which the Advisor or any Person to whom disclosure is permitted hereunder is a party; or (vii) to the extent such information is
otherwise publicly available. The foregoing shall not apply to information which has previously become publicly available through
the actions of a Person other than the Advisor not resulting from the Advisor’s violation of this Section 6.
The provisions of this Section 6 shall survive the expiration or earlier termination of this Agreement for a period
of one year.

 

    -12-

     

    

 

Section 7.                
Obligations of Advisor; Restrictions.

 

(a) The
Advisor shall require each seller or transferor of investment assets to the Company and the Subsidiaries to make
such representations and warranties regarding such assets as may, in the judgment of the Advisor, be necessary and
appropriate. In addition, the Advisor shall take such other action as it deems necessary or appropriate with regard to the
protection of the Assets.

 

(b) The
Advisor shall refrain from any action that, in its sole judgment made in good faith, (i) is not in compliance with the
Guidelines, (ii) would adversely and materially affect the status of the Company as a REIT under the Code,
(iii) would adversely and materially affect the Company’s or any Subsidiary’s status as an entity intended
to be exempted or excluded from investment company status under the Investment Company Act or (iv) would violate any
law, rule or regulation of any governmental body or agency having jurisdiction over the Company or any Subsidiary or that
would otherwise not be permitted by the Company’s Governing Instruments. If the Advisor is ordered to take any such
action by the Board of Directors, the Advisor shall promptly notify the Board of Directors of the Advisor’s judgment
that such action would adversely and materially affect such status or violate any such law, rule or regulation or the
Governing Instruments. Notwithstanding the foregoing, the Advisor, its directors, members, officers, stockholders, managers,
personnel, employees and any Person controlling or controlled by the Advisor and any Person providing sub-advisory or shared
facilities services to the Advisor shall not be liable to the Company or any Subsidiary, the Board of Directors, or the
Company’s or any Subsidiary’s stockholders, members or partners, for any act or omission by the Advisor, its
directors, officers, stockholders or employees except as provided in Section 11 of this Agreement.

 

(c) The
Board of Directors shall periodically review the Guidelines and the Company’s portfolio of Assets but will not review
each proposed Asset, except as otherwise provided herein. If, prior to the Listing, a majority of the members of the Board of
Directors or, after the Listing, a majority of the Independent Directors determines in their periodic review of
transactions that a particular transaction does not comply with the Guidelines, then a majority of the members of the Board
of Directors or a majority of the Independent Directors, as applicable, will consider what corrective action, if any, can be
taken. The Advisor shall be permitted to rely upon the direction of the Secretary of the Company to evidence the approval of
the Board of Directors or the Independent Directors with respect to a proposed acquisition.

 

(d) Other
than the exchange offer and related transactions related to the Offering, neither the Company nor the Subsidiaries shall
acquire any security structured or issued by an entity managed by the Advisor or any affiliate thereof, unless
(i) the acquisition is made in accordance with the Guidelines; (ii) such acquisition, if prior to the Listing, is
approved in advance by a majority of the members of the Board of Directors and, if after the Listing, is approved in advance
by a majority of the Independent Directors; and (iii) the acquisition is made in accordance with applicable laws.

 

    -13-

     

    

 

(e) The
Advisor shall at all times during the term of this Agreement maintain “errors and omissions” insurance
coverage and other insurance coverage which is customarily carried by property, asset and investment managers performing
functions similar to those of the Advisor under this Agreement with respect to assets similar to the assets of the Company
and the Subsidiaries, in an amount which is comparable to that customarily maintained by other managers or servicers of
similar assets.

 

Section 8.                
Compensation.

 

(a) During the
Initial Term and any Renewal Term (each as defined below), the Company shall pay the Advisor the Base Advisory Fee quarterly
in arrears commencing with the quarter in which the Investment Advisory Agreement was executed (with such initial payment
pro-rated based on the number of days during such quarter that the Investment Advisory Agreement was in effect).

 

(b) During
the Initial Term and any Renewal Term, the Company shall pay the Advisor the Loan Sourcing Fee quarterly in
arrears, provided that the Advisor shall (i) not receive the Loan Sourcing Fee in respect of any loans sourced through
the Conduit Program that are pre-paid in full or which are repurchased within 90 days of the Subsidiaries' date of purchase
(the "Loan Sourcing Fee Reimbursement") or (ii) reduce the amount of the subsequent quarter's Loan Sourcing
Fee by the amount of the Loan Sourcing Fee Reimbursement. If the subsequent quarter's Loan Sourcing Fee is less than the Loan
Sourcing Fee Reimbursement, the Advisor shall repay the difference between the Loan Sourcing Fee Reimbursement and the Loan
Sourcing Fee within 30 days of the date of the payment date of that quarter's Loan Sourcing Fee.

 

(c) The
Advisor shall compute each installment of the Base Advisory Fee and Loan Sourcing Fee within 30 days after the end of the
fiscal quarter with respect to which such installment is payable. A copy of the computations made by the Advisor to
calculate such installment shall thereafter, for informational purposes only and subject in any event to Section 13(a)
of this Agreement in the case of the Base Advisory Fee, promptly be delivered to the Board of Directors and, upon such
delivery, payment of such installment of the Base Advisory Fee and Loan Sourcing Fee shown therein shall be due and payable
in cash no later than the date which is five business days after the date of delivery to the Board of Directors of such
computations.

 

(d) The
Base Advisory Fee is subject to adjustment pursuant to and in accordance with the provisions of Section 13(a) of
this Agreement.

 

(e) If at least
two-thirds of the Independent Directors determine that the terms of the Loan Sourcing Fee are unfair, the Company
(represented by the Independent Directors) and the Advisor shall endeavor to negotiate in good faith a revised Loan Sourcing
Fee payable to the Advisor or its affiliates under this Agreement. In the event that the Company and the Advisor are unable
to agree to the terms of the revised Loan Sourcing Fee within 45 days of the determination that the terms of the Loan
Sourcing Fee are unfair, the Loan Sourcing Fee and Section 2(b)(iii) and Section 8(b) of this Agreement shall terminate.

 

Section 9. Expenses
of the Company. The Company shall pay all of its expenses and shall reimburse the Advisor for documented expenses of the
Advisor incurred on its behalf (collectively, the “Expenses”) excepting those expenses that are
specifically the responsibility of the Advisor as set forth herein. Such costs and reimbursements shall not be in amounts
which are greater than those which would be payable to outside professionals or consultants engaged to perform such services
pursuant to agreements negotiated on an arm’s-length basis. Expenses include all costs and expenses which are expressly
designated elsewhere in this Agreement as the Company’s, together with the following:

 

    -14-

     

    

 

(i)
expenses in connection with the issuance and transaction costs incident to the acquisition, disposition and financing
of Assets;

 

(ii) costs of
legal, tax, accounting, third party administrators for the establishment and maintenance of the books and records,
consulting, auditing, administrative and other similar services rendered for the Company and the Subsidiaries by providers
retained by the Advisor or, if provided by the Advisor’s personnel, in amounts which are no greater than those which
would be payable to outside professionals or consultants engaged to perform such services pursuant to agreements negotiated
on an arm’s-length basis;

 

(iii)
the compensation and expenses of the Company’s directors and the cost of liability insurance to indemnify the
Company’s directors and officers;

 

(iv) costs
associated with the establishment and maintenance of any of the Company’s repurchase agreements or other
indebtedness of the Company (including commitment fees, accounting fees, legal fees, closing and other similar costs) or any
of the Company’s or any Subsidiary’s securities offerings;

 

(v) expenses
connected with communications to holders of the Company’s or our Subsidiary’s securities and other bookkeeping
and clerical work necessary in maintaining relations with holders of such securities and in complying with any applicable
reporting and other requirements of governmental bodies or agencies, including, without limitation, all costs of preparing
and filing required reports with the Securities and Exchange Commission, the costs payable by the Company to any transfer
agent and registrar in connection with the listing and/or trading of the Company’s stock on any exchange, the fees
payable by the Company to any such exchange in connection with its listing, and the costs of preparing, printing and mailing
the Company’s annual report to its stockholders and proxy materials with respect to any meeting of the Company’s
stockholders;

 

(vi) costs
associated with any computer software or hardware, electronic equipment or purchased information technology services from
third party vendors that is used for the Company and the Subsidiaries;

 

(vii)
expenses incurred by managers, officers, personnel and agents of the Advisor for travel on the Company’s behalf
and other out-of-pocket expenses incurred by managers, officers, personnel and agents of the Advisor in connection with the
purchase, financing, refinancing, sale or other disposition of an Asset or establishment and maintenance of any repurchase
agreements, or other financings or any of the Company’s or any of the Subsidiary’s securities offerings or
exchange offerings;

 

(viii) costs and expenses
incurred with respect to market information systems and publications, research publications and materials, and settlement, clearing
and custodial fees and expenses including any research services utilized by the Advisor on the Company’s behalf;

 

(ix)
compensation and expenses of the Company’s custodian and transfer agent, if any;

 

(x) the costs of
maintaining compliance with all federal, state and local rules and regulations or any other regulatory agency;

 

    -15-

     

    

 

(xi) all taxes
and license fees;

 

(xii)
all insurance costs incurred in connection with the operation of the Company’s business;

 

(xiii) costs and
expenses incurred in contracting with third parties, including affiliates of the Advisor, for the servicing and special
servicing of the assets of the Company and the Subsidiaries;

 

(xiv) all other costs and expenses relating to the business operations of the Company and the Subsidiaries, including, without
limitation, the costs and expenses of acquiring, owning, protecting, maintaining, developing and disposing of Assets, including
appraisal, reporting, audit and legal fees;

 

(xv) expenses
relating to any office(s) or office facilities, including disaster backup recovery sites and facilities, maintained for the
Company and the Subsidiaries or Assets separate from the office or offices of the Advisor;

 

(xvi) expenses
connected with the payments of interest, dividends or distributions in cash or any other form authorized or caused to be made
by the Board of Directors to or on account of holders of the Company’s or any Subsidiary’s securities, including,
without limitation, in connection with any dividend reinvestment plan;

 

(xvii) any
judgment or settlement of pending or threatened proceedings (whether civil, criminal or otherwise) against the Company or any
Subsidiary, or against any trustee, director or officer of the Company or of any Subsidiary in his capacity as such for which
the Company or any Subsidiary is required to indemnify such trustee, director or officer by any court or governmental
agency;

 

(xviii) expenses
incurred in connection with obtaining and maintaining the insurance coverage referred to in Section 7(e) above;
and

 

(xix) all
other expenses actually incurred by the Advisor (except as described below)which are reasonably necessary for the
performance by the Advisor of its duties and functions under this Agreement.

 

In addition, the Company
will be required to pay the Company’s pro rata portion of rent, telephone, utilities, office furniture, equipment,
machinery and other office, internal and overhead expenses of the Advisor and its affiliates required for the operations of the
Company and the Subsidiaries. These expenses will be allocated between the Advisor and the Company based on the ratio of the Company’s
proportion of gross assets compared to all remaining gross assets managed or held by the Advisor as calculated at each quarter
end. The Advisor and the Company will modify this allocation methodology, subject to the approval of the Board of Directors prior
to the Listing and subject to the Independent Directors’ approval after the Listing, if the allocation becomes inequitable,
based on significant leverage differences between the Company and the Advisor’s other clients.

 

The Advisor may, at
its option, elect not to seek reimbursement for certain expenses during a given quarterly period, which determination shall not
be deemed to construe a waiver of reimbursement for similar expenses in future periods. The Company will reimburse the Advisor
for all organizational, formation and offering costs it has incurred on behalf of the Company in connection with the Offering.

 

    -16-

     

    

 

The provisions of this
Section 9 shall survive the expiration or earlier termination of this Agreement to the extent such expenses have previously
been incurred or are incurred in connection with such expiration or termination.

 

Section 10.            
Calculations of Expenses. The Advisor shall prepare a statement documenting the Expenses of the Company and the Subsidiaries
and the Expenses incurred by the Advisor on behalf of the Company and the Subsidiaries during each fiscal quarter, and shall deliver
such statement to the Company within 30 days after the end of each fiscal quarter. Expenses incurred by the Advisor on behalf of
the Company and the Subsidiaries shall be reimbursed by the Company to the Advisor on the fifth business day immediately following
the date of delivery of such statement; provided, however, that such reimbursements may be offset by the Advisor
against amounts due to the Company and the Subsidiaries. The provisions of this Section 10 shall survive the expiration
or earlier termination of this Agreement.

 

Section 11.            
Limits of Advisor Responsibility; Indemnification.

 

(a) The
Advisor assumes no responsibility under this Agreement other than to render the services called for under this Agreement and
shall not be responsible for any action of the Board of Directors in following or declining to follow any advice or
recommendations of the Advisor, including as set forth in Section 7(b) of this Agreement. The Advisor, its
officers, stockholders, members, managers, directors, personnel, any Person controlling or controlled by the Advisor and any
Person providing sub-advisory or shared facilities services to the Advisor will not be liable to the Company or any
Subsidiary, to the Board of Directors, or the Company’s or any Subsidiary’s stockholders, members or partners for
any acts or omissions by any such Person (including, without limitation, trade errors that may result from ordinary
negligence, such as errors in the investment decision making process or in the trade process), pursuant to or in accordance
with this Agreement, except by reason of acts or omissions constituting bad faith, willful misconduct, gross negligence or
reckless disregard of the Advisor’s duties under this Agreement, as determined by a final non-appealable order of a
court of competent jurisdiction. The Company shall, to the full extent lawful, reimburse, indemnify and hold the Advisor, its
officers, stockholders, members, managers, directors, personnel, any Person controlling or controlled by the Advisor and any
Person providing sub-advisory or shared facilities services to the Advisor, together with such Person’s officers,
stockholders, members, managers, directors and personnel (each a “Advisor Indemnified Party”), harmless of
and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever
(including attorneys’ fees) in respect of or arising from any acts or omissions of such Advisor Indemnified Party made
in good faith in the performance of the Advisor’s duties under this Agreement and not constituting such Advisor
Indemnified Party’s bad faith, willful misconduct, gross negligence or reckless disregard of the Advisor’s duties
under this Agreement.

 

(b) The
Advisor shall, to the full extent lawful, reimburse, indemnify and hold the Company (or any Subsidiary), its
stockholders, directors and officers and each other Person, if any, controlling the Company (each, a “Company
Indemnified Party” and together with a Advisor Indemnified Party, the “Indemnitee”), harmless of
and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including
attorneys’ fees) in respect of or arising from the Advisor’s bad faith, willful misconduct, gross negligence or
reckless disregard of its duties under this Agreement.

 

(c) The
Indemnitee will promptly notify the party against whom indemnity is claimed (the “Indemnitor”) of any
claim for which it seeks indemnification; provided, however, that the failure to so notify the Indemnitor
will not relieve the Indemnitor from any liability which it may have hereunder, except to the extent such failure actually
prejudices the Indemnitor. The Indemnitor shall have the right to assume the defense and settlement of such claim; provided,
that the Indemnitor notifies the Indemnitee of its election to assume such defense and settlement within 30 days after the
Indemnitee gives the Indemnitor notice of the claim. In such case, the Indemnitee will not settle or compromise such claim,
and the Indemnitor will not be liable for any such settlement made without its prior written consent. If the Indemnitor is
entitled to, and does, assume such defense by delivering the aforementioned notice to the Indemnitee, the Indemnitee will
(i) have the right to approve the Indemnitor’s counsel (which approval will not be unreasonably withheld, delayed
or conditioned), (ii) be obligated to cooperate in furnishing evidence and testimony and in any other manner in which
the Indemnitor may reasonably request and (iii) be entitled to participate in (but not control) the defense of any such
action, with its own counsel and at its own expense.

 

    -17-

     

    

 

Section 12.            
No Joint Venture. Nothing in this Agreement shall be construed to make the Company and the Advisor partners or joint
venturers or impose any liability as such on either of them.

 

Section 13.            
Term; Termination.

 

(a) Until
this Agreement is terminated in accordance with its terms, this Agreement shall be in effect until the third anniversary of
completion of the Listing (the “Initial Term”) and shall be automatically renewed for a one-year term
each anniversary date thereafter (a “Renewal Term”) unless at least two-thirds of the Independent
Directors or the holders of at least two-thirds of the outstanding shares of Common Stock (other than those shares held by
certain parties related to the Company, including the Company’s members, principals, employees and affiliates) agree
that (i) there has been unsatisfactory performance by the Advisor that is materially detrimental to the Company and the
Subsidiaries or (ii) the compensation (other than the Loan Sourcing Fee) payable to the Advisor hereunder is unfair; provided
that the Company shall not have the right to terminate this Agreement under clause (ii) above if the Advisor agrees to
continue to provide the services under this Agreement at a reduced fee that at least two-thirds of the Independent Directors
determines to be fair pursuant to the procedure set forth below. If the Company elects not to renew this Agreement at the
expiration of the Initial Term or any Renewal Term as set forth above, the Company shall deliver to the Advisor prior written
notice (the “Termination Notice”) of the Company’s intention not to renew this Agreement based upon
the terms set forth in this Section 13(a) not less than 180 days prior to the expiration of the then existing
term. If the Company so elects not to renew this Agreement, the Company shall designate the date (the “Effective
Termination Date”), not less than 180 days from the date of the notice, on which the Advisor shall cease to provide
services under this Agreement, and this Agreement shall terminate on such date; provided, however, that in the
event that such Termination Notice is given in connection with a determination that the compensation (other than the Loan
Sourcing Fee) payable to the Advisor is unfair, the Advisor shall have the right to renegotiate such compensation by
delivering to the Company, no fewer than 45 days prior to the prospective Effective Termination Date, written notice (any
such notice, a “Notice of Proposal to Negotiate”) of its intention to renegotiate its compensation under
this Agreement. Thereupon, the Company (represented by the Independent Directors) and the Advisor shall endeavor to negotiate
in good faith the revised compensation (other than the Loan Sourcing Fee) payable to the Advisor under this Agreement, provided
that the Advisor and at least two-thirds of the Independent Directors agree to the terms of the revised compensation to be
payable to the Advisor within 45 days following the receipt of the Notice of Proposal to Negotiate, the Termination Notice
shall be deemed of no force and effect and this Agreement shall continue in full force and effect on the terms stated in this
Agreement, except that the compensation (other than the Loan Sourcing Fee) payable to the Advisor hereunder shall be the
revised compensation then agreed upon by the parties to this Agreement. The Company and the Advisor agree to execute and
deliver an amendment to this Agreement setting forth such revised compensation promptly upon reaching an agreement regarding
same. In the event that the Company and the Advisor are unable to agree to the terms of the revised compensation (other than
the Loan Sourcing Fee) to be payable to the Advisor during such 45-day period, this Agreement shall terminate, such
termination to be effective on the date which is the later of (A) 10 days following the end of such 45-day period and
(B) the Effective Termination Date originally set forth in the Termination Notice.

 

    -18-

     

    

 

(b) In recognition
of the level of the upfront effort required by the Advisor to structure and acquire the assets of the Company and the
Subsidiaries and the commitment of resources by the Advisor, in the event that this Agreement is terminated in accordance
with the provisions of Section 13(a) of this Agreement, the Company shall pay to the Advisor, on the date on
which such termination is effective, a termination fee (the “Termination Fee”) equal to three times the
average annual Base Advisory Fee earned by the Advisor during the 24-month period immediately preceding the date of such
termination, calculated as of the end of the most recently completed fiscal year prior to the date of termination.

 

(c) No later than
180 days prior to the anniversary date of this Agreement of any year during a Renewal Term, the Advisor may deliver written
notice to the Company informing it of the Advisor’s intention to decline to renew this Agreement, whereupon this
Agreement shall not be renewed and extended and this Agreement shall terminate effective on the anniversary date of this
Agreement next following the delivery of such notice. The Company is not required to pay to the Advisor the Termination Fee
if the Advisor terminates this Agreement pursuant to this Section 13(c).

 

(d) If this
Agreement is terminated pursuant to Section 13, such termination shall be without any further liability or
obligation of either party to the other, except as provided in Sections 6, 9, 10, 13(b), 15(b), and 16 of
this Agreement. In addition, Sections 11 and 20 of this Agreement shall survive termination of this
Agreement.

 

Section 14.            
Assignment.

 

(a)Except as set
forth in Section 14(b) of this Agreement, this Agreement shall terminate automatically in the event of its assignment,
in whole or in part, by the Advisor, unless such assignment is consented to in writing by the Company with the approval of a majority
of the directors; provided, however, that no such approval shall be required in the case of an assignment by the
Advisor to a majority-owned and controlled affiliate of ZAIS if such assignment does not require the Company’s approval under
the Investment Advisers Act of 1940. Any such permitted assignment shall bind the assignee under this Agreement in the same manner
as the Advisor is bound, and the Advisor shall be liable to the Company for all errors or omissions of the assignee under any such
assignment. In addition, the assignee shall execute and deliver to the Company a counterpart of this Agreement naming such assignee
as Advisor. This Agreement shall not be assigned by the Company without the prior written consent of the Advisor, except in the
case of assignment by the Company to another REIT or other organization which is a successor (by merger, consolidation, purchase
of assets, or similar transaction) to the Company, in which case such successor organization shall be bound under this Agreement
and by the terms of such assignment in the same manner as the Company is bound under this Agreement.

 

(b) Notwithstanding
any provision of this Agreement, the Advisor may subcontract and assign any or all of its responsibilities under Sections
2(b), 2(c) and 2(d) of this Agreement to any of its affiliates in accordance with the terms of this Agreement
applicable to any such subcontract or assignment, and the Company hereby consents to any such assignment and
subcontracting. In addition, provided that the Advisor provides prior written notice to the Company for informational
purposes only, nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer of any amounts
payable to the Advisor under this Agreement. In addition, the Advisor may assign this Agreement to any of its affiliates
without the approval of the Independent Directors.

 

Section 15.            
Termination for Cause.

 

(a) The
Company may terminate this Agreement effective upon 30 days’ prior written notice of termination from the Board of
Directors of the Company to the Advisor, without payment of any Termination Fee, if (i) the Advisor, its agents or
its assignees materially breaches any provision of this Agreement and such breach shall continue for a period of 30 days
after written notice thereof specifying such breach and requesting that the same be remedied in such 30-day period (or 45
days after written notice of such breach if the Advisor takes steps to cure such breach within 30 days of the written
notice), (ii) the Advisor engages in any act of fraud, misappropriation of funds, or embezzlement against the Company or
any Subsidiary, (iii) there is an event of any gross negligence on the part of the Advisor in the performance of its
duties under this Agreement, (iv) there is a commencement of any proceeding relating to the Advisor’s Bankruptcy
or insolvency, including an order for relief in an involuntary bankruptcy case or the Advisor authorizing or filing a
voluntary bankruptcy petition, (v) the Advisor is convicted of (including a plea of nolo contendere) a felony or
(vi) there is a dissolution of the Advisor.

 

    -19-

     

    

 

(b) The
Advisor may terminate this Agreement effective upon 60 days’ prior written notice of termination to the Company in the
event that the Company shall default in the performance or observance of any material term, condition or covenant
contained in this Agreement and such default shall continue for a period of 30 days after written notice thereof specifying
such default and requesting that the same be remedied in such 30-day period. The Company is required to pay to the Advisor
the Termination Fee if the termination of this Agreement is made pursuant to this Section 15(b).

 

(c) The
Advisor may terminate this Agreement, without payment of any Termination Fee, in the event the Company becomes regulated as
an “investment company” under the Investment Company Act, with such termination deemed to have occurred
immediately prior to such event.

 

Section 16. Action
Upon Termination. From and after the effective date of termination of this Agreement, pursuant to Sections 13 or 15
of this Agreement, the Advisor shall not be entitled to compensation for further services under this Agreement, but shall be
paid all compensation accruing to the date of termination and, if terminated pursuant to Section 13(a) or Section 15(b),
the applicable Termination Fee. Upon such termination, the Advisor shall forthwith:

 

(i) after
deducting any accrued compensation and reimbursement for its expenses to which it is then entitled, pay over to the Company
or a Subsidiary all money collected and held for the account of the Company or a Subsidiary pursuant to this Agreement;

 

(ii) deliver
to the Board of Directors a full accounting, including a statement showing all payments collected by it and a statement of
all money held by it, covering the period following the date of the last accounting furnished to the Board of Directors
with respect to the Company or a Subsidiary; and

 

(iii) deliver to
the Board of Directors all property and documents of the Company or any Subsidiary then in the custody of the Advisor.

 

Section 17.            
Notices. Unless expressly provided otherwise in this Agreement, all notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when
delivered against receipt or upon actual receipt of (i) personal delivery, (ii) delivery by reputable overnight courier,
(iii) delivery by facsimile transmission with telephonic confirmation or (iv) delivery by registered or certified mail,
postage prepaid, return receipt requested, addressed as set forth below:

 

    -20-

     

    

 

(a)           If to the Company:

 

ZAIS Financial Corp.

Two Bridge Avenue, Suite 322

Red Bank, New Jersey 07701-1106

Attention: General Counsel

Facsimile: (732) 978-7507

  

(b)           If to the Advisor:

 

ZAIS REIT Management, LLC

c/o ZAIS Group, LLC

Two Bridge Avenue, Suite 322

Red Bank, New Jersey 07701-1106

Attention: General Counsel

Facsimile: (732) 978-7507

 

Either party may alter the address to which
communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section 17
for the giving of notice.

 

Section 18.            
Binding Nature of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided in this
Agreement.

 

Section 19.            
Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect
to the subject matter of this Agreement, and supersedes all prior and contemporaneous agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter of this Agreement.
The express terms of this Agreement control and supersede any course of performance and/or usage of the trade inconsistent with
any of the terms of this Agreement. This Agreement may not be modified or amended other than by an agreement in writing signed
by the parties hereto.

 

Section 20.            
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
TO THE CONTRARY.

 

Section 21.            
No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any party hereto,
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 exclusive of any
rights, remedies, powers and privileges provided by law. No waiver of any provision hereunder shall be effective unless it is in
writing and is signed by the party asserted to have granted such waiver.

 

Section 22.            
Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and
shall not be deemed part of this Agreement.

 

Section 23.            
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts of this Agreement, individually or taken together, shall bear
the signatures of all of the parties reflected hereon as the signatories.

 

Section 24.            
Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

 

Section 25.            
Gender. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to
include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

 

[SIGNATURE PAGES FOLLOW]

 

    -21-

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written above.

 

	 	ZAIS FINANCIAL CORP.
	 	 	 
	 	By:	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer and President
	 	 	 
	 	ZAIS REIT MANAGEMENT, LLC
	 	 	 
	 	By:	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer
	 	 	 
	 	ZAIS FINANCIAL PARTNERS, L.P.
	 	 	 
	 	By:	ZAIS Financial Corp., its General Partner
	 	 	 
	 	By:  	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer and President
	 	 	 
	 	ZAIS ASSET I, LLC 
	 	 	 
	 	By:	ZAIS Financial Partners, L.P., its Managing Member
	 	 	 
	 	By: 	ZAIS Financial Corp., its General Partner
	 	 	 
	 	By:	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer and President

 

    [Signature Page 1 of 3 to Investment Advisory Agreement]

     

    

 

	 	ZAIS ASSET II, LLC 
	 	 	 
	 	By:	ZAIS Financial Partners, L.P., its Managing Member
	 	 	 
	 	By: 	ZAIS Financial Corp., its General Partner
	 	 	 
	 	By:  	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer and President
	 	 	 
	 	ZAIS ASSET III, LLC 
	 	 	 
	 	By: 	ZAIS Financial Partners, L.P., its Managing Member
	 	 	 
	 	By: 	ZAIS Financial Corp., its General Partner
	 	 	 
	 	By:	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer and President
	 	 	 
	 	ZAIS ASSET IV, LLC 
	 	 	 
	 	By: 	ZAIS Financial Partners, L.P., its Managing Member
	 	 	 
	 	By: 	ZAIS Financial Corp., its General Partner
	 	 	 
	 	By:	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer and President
	 	 	 
	 	ZAIS FUNDING, INC
	 	 	 
	 	By:	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Chief Executive Officer and President

 

    [Signature Page 2 of 3 to Investment Advisory Agreement]

     

    

 

	 	ZFC TRUST
	 	 	 
	 	By:  	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Trustee
	 	 	 
	 	ZFC TRUST TRS I, LLC
	 	 	 
	 	By: 	ZFC Trust, its Managing Member
	 	 	 
	 	By:	/s/ Michael Szymanski
	 	 	Name: Michael Szymanski
	 	 	Title: Trustee

 

    [Signature Page 3 of 3 to Investment Advisory Agreement]

     

    

 

Exhibit A

 

		·	No
acquisition shall be made that would cause the Company to fail to qualify as a REIT for U.S. federal income tax purposes;

 

		·	No acquisition shall be made that would cause
the Company to be required to register as an investment company under the Investment Company Act; and

 

		·	The Company’s Assets will be predominantly
in residential mortgage loans, Non-Agency RMBS, Agency RMBS, and other real estate-related and financial assets, including, but
not limited to, CMBS and ABS.

 

		·	Until appropriate assets can be identified, the Advisor may deploy the proceeds of the Company’s
or any Subsidiary’s securities offerings in interest bearing, short term investments, including money market accounts and/or
funds that are consistent with the Company's intention to maintain its qualification as a REIT.

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