Subordinated Debt

Minimum of $5.0 million, although exceptions for investments promising future
lending opportunities are considered.

Maximum of $40 million, however, loans of even larger amounts are available
in conjunction with our limited partners.

Current interest rate typically of 10–14%.

5–7 year stated maturity.

Investments can be structured with a single principal payment due at maturity or with amortization in the final 2–3 years of the loan.

Security generally includes a second lien on the company’s assets and/or stock
and key-man life insurance on critical management team members.

A deferred return component usually in the form of an equity participation to generate an all-in return on capital commensurate with the unique risks of the investment and the expectations for similar investments in the marketplace.

Preferred/Common Stock

Minimum of $2.0 million.

Maximum of $20.0 million.

Current or PIK dividend rate of 6–10% on preferred stock, common stock
generally does not carry a dividend.

Redemption right on preferred stock after 5–8 years via a put option, common
stock investments typically do not have mandatory redemption rights.

Minority equity holder rights such as dilution protection, board observation/voting privileges and limited consultation and consent rights.