Common use of Concentration of Investments Clause in Contracts

Concentration of Investments. Other than cash and cash equivalents, investment positions with a single issuer will comprise no more than 7.5% of the aggregate value of the long investments of the Company (valued using the methodologies set forth in Section 11(a) of the Investment Management Agreement, the “Long Market Value”). For the avoidance of doubt, the largest four investment positions with single issuers will not aggregate to more than 30% of Long Market Value. Each such determination is made at the time of the applicable investment. Positions established primarily for hedging purposes (including, without limitation, index positions) will not be subject to this limit. For the avoidance of doubt, capital structure arbitrage positions in an issuer will be deemed separate investments for the purposes of calculating this limit. Leverage: The Investment Manager expects to utilize leverage in order to increase its investment capacity. Leverage may take a variety of forms, including total return swaps and other derivatives, loans for borrowed money, trading on margin and the use of inherently leveraged instruments. If leverage exceeds, or is planned to exceed, 80% of Net Asset Value (i.e., $1.80 of Long Market Value for $1 of Net Asset Value) for any longer than fifteen Business Days, the Investment Manager, together with the Company, will timely notify the rating agency set forth on Exhibit C of such condition and of the Company’s remediation plan with respect thereto to update the agency on the then current investment strategy.