Pangaea Asset Management, LLC

1
Pangaea Asset Management, LLC

• Company Overview

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Additional Disclosures

• This material is intended as a broad overview of
  the portfolio manager's current style, philosophy
  and process. This material is presented solely
  for informational purposes and nothing herein
  constitutes investment, legal, accounting or tax
  advice, or a recommendation to buy, sell or hold
  a security. No recommendation or advice is being
  given as to whether any investment or strategy is
  suitable for a particular investor. Readers
  should not assume that any investments in
  securities, companies, sectors or markets
  identified and described were or will be
  profitable. Information is obtained from sources
  deemed reliable, but there is no representation
  or warranty as to its accuracy, completeness or
  reliability. All information is current as of the
  date of this material and is subject to change
  without notice. Any views or opinions expressed
  may not reflect those of the firm as a whole.
  Certain products and services may not be
  available in all jurisdictions or to all client
  types. Investing entails risks, including
  possible loss of principal.

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Table of Contents

• Pangaea Asset Management Overview
• History
• Asset Management Experience
• Organizational Chart
• Timeline
• Pangaea Investment Activity
• Portfolio Management
• Investment Philosophy
• Investment Sourcing
• Investment Monitoring
• Conclusion
• Appendix A Biographies

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Pangaea Asset Management Overview

• Pangaea Asset Management, LLC (Pangaea) is a
  Registered Investment Advisor based in Chicago,
  Illinois. The firm was founded in February 2007
  by Barry Shear, David Schmuck and Michael King
  (the Founders).
• The Founders and Norwest Equity Partners have
  made a 75 million equity commitment to Pangaea.
  
• Norwest Equity Partners has capital under
  management that totals 4.6 billion.
• The Founders have 70 years of combined experience
  in lending and asset management.
• Pangaea currently manages approximately 1
  billion in senior secured debt through three
  separate CLOs which include investments in over
  250 below investment grade companies.
• The Founders were previously partners in Antares
  Capital Corporation. Antares Capital was formed
  in 1996 in partnership with MassMutual. From
  1996 to 2005
• Antares Capital became the recognized leader in
  arranging syndicated middle-market loans for
  companies controlled by private equity firms.
• Antares Asset Management, a subsidiary of Antares
  Capital, grew assets under management for
  primarily non-affiliated investors to over 2
  billion.
• Antares Capital and Antares Asset Management were
  sold to General Electric in October 2005.
• Barry Shear became President and Michael King
  became Managing Director and head of credit
  underwriting at GE Antares. The GE Antares
  middle market lending business doubled in size to
  approximately 8 billion(1) after this
  combination.
• David Schmuck joined GE Asset Management as
  Managing Director, CLO Portfolio Manager.

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(1) Crains Chicago Business article dated
October 11, 2005.
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Asset Management Experience(1)

• Over the past ten years senior management at
  Pangaea has been responsible for managing
  multiple debt investment portfolios with total
  assets exceeding 4.5 billion.

• Does not reflect assets managed in separate
  accounts or on the Antares Capital Corporation
  balance sheet.
• Management company sold to GE in October 2005.
  GE Asset Management became manager and Pangaea is
  not affiliated with GE Asset Management and has
  no current management responsibility with respect
  to these funds.
• Antares Asset Management (AAM) was the loan
  advisor for the Nova transaction. AAM did not
  manage the High Yield Bonds.
• Acquired the portfolio manager in February 2008.
• Appointed sub servicer by 250 Capital, LLC. in
  February 2008. 250 Capital, LLC resigned as
  manager in December 2008 and sub servicer
  appointment was terminated in March 2009.
• Acquired the collateral management agreement in
  June 2009.

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Pangaea Organization Chart
Investment Committee
Barry N. Shear Senior Managing Director and
President (30 years)
Teri Marus Office Manager
Michael P. King Senior Managing Director (15
years)
David R. Schmuck Senior Managing Director (24
years)
Thomas J. Bax Chief Financial Officer, Chief
Compliance Officer (27 years))
Ryan Metcalfe Director (10 years)
Ross Van Drunen Senior Analyst (11 years)
Chris Brown Managing Director (12 years)
Matt Nels Senior Analyst (11 years)
Douglas Crimmins Managing Director(19 years)
Mark Maglaya Senior Analyst (10 years)
Sean Treanor Director of Operations (11 years)
Jeff Cupples Associate (5 years)
James Jago Analyst (3 years)
John Thies Operations Analyst (8 years)
Numbers in parentheses represent years of
experience
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Timeline



Antares Capital Founded
GECC Purchases Antares Capital
Pangaea Founded
Antares Asset Mgmt. Founded
Acquired the Collateral Management Agreement in
De Meer Middle Market CLO-2006-1, Ltd.
Antares Funding CLO
Nova CDO 2001
Pangaea CLO 2007-1
Navigator CDO 2003
Navigator CDO 2005
Mariner CDO 2002
Navigator CDO 2004
Navigator CDO 2006
Separate Account - Loans
CS Advisors LLC Acquired Subservicing Agreement
for Merrill Lynch CLO 2007-1
Separate Account Stressed Loans
Separate Account - Loans
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Portfolio Management

• Defensive Portfolios
• Broad deal flow from which to select investments.
• Obligor concentrations that generally dont
  exceed 1.5.
• Industry concentrations that generally dont
  exceed 10.
• Forward looking credit analysis.
• Trading strategies
• Adjust portfolios within portfolio guidelines
  based on relative value analysis.
• Credit risk sales across portfolios and no sales
  between portfolios. Trade allocations are
  documented.
• Focus on par preservation.
• Transparency, accessibility, and accountability.
• Quarterly investment manager report.
• E-mail, telephone, and in-person updates.
• Password protected investor portal via Pangaea
  website.
• Members of the Pangaea team have managed
  portfolios for over 50 different institutional
  investors, both within and outside the US.

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Investment Philosophy

• Due diligence focuses on an analysis of free cash
  flow and fundamental business value. Investment
  underwritings cover the following
• Diversity of products, customers, suppliers, and
  geographic markets.
• Raw material risk.
• Historical and projected financial performance.
• Industry/business economic cycle risk.
• Level of equity sponsor involvement.
• History of capital market access.
• Management team experience.
• Structural and legal analysis.

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Market Access - Investment Sourcing

• Pangaeas experience in both broadly syndicated
  and middle market loans gives us a broad base of
  experience to identify, select, source and manage
  bank loan investments.
• Pangaea manages over 250 credits and has reviewed
  nearly 1,000 opportunities over the last couple
  of years. This knowledge gives us a broad
  universe from which to select portfolio
  investments and provides constant contact with
  the market.
• Pangaea maintains longstanding relationships with
  agent banks, private equity sponsors, lenders,
  investors and other key stakeholders and market
  participants. This broad source of information
  and access to the market includes
• Over 100 different private equity firms
  represented within the managed portfolios.
• Longstanding sourcing and trading relationships
  with broadly syndicated agent banks including JP
  Morgan, CSFB, BofA, Citi and Goldman Sachs.
• Deep history in the relatively small middle
  market community as both an arranger of loans
  while at Antares and as an ongoing investor
  dating back to the 1980s while at Heller
  Financial. Relationships include CIT, Capital
  Source, GE Antares, Allied Capital and American
  Capital among others.
• Pangaea is uniquely qualified to capture
  investment value across the senior secured loan
  market for both broadly syndicated and middle
  market loans.

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Investment Monitoring

• Active participant with forward looking analysis
• Bank meetings, lender calls, management
  presentations, equity sponsor updates, industry
  conferences, investor dialogue, and trade
  publications.
• Pangaeas proprietary investment monitoring model
  (PARM) is used to monitor portfolio
  investments
• Forward looking model.
• Assesses risk of payment default, borrower
  fundamentals and potential recovery values.
• In addition, analysts follow these other key
  variables
• Cash flow forecast, covenants, market position,
  key personnel, and loan to value.
• Pangaea has actively repositioned portfolios to
  protect downside risk and gain added relative
  value.
• Buy/Sell/Hold recommendation by analyst with
  Pangaea Investment Committee oversight and
  approval.

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Conclusion

• Pangaea is uniquely situated to evaluate
  performance across a broad cross-section of U.S.
  companies for both broadly syndicated and middle
  market credit facilities
• Investments in over 250 different below
  investment grade companies across 32 different
  industry groups.
• Long-standing and active relationships with
  agent banks and the private equity sponsors,
  lenders, investors and other key stakeholders and
  market participants.
• The Pangaea team has demonstrated success in
  building a niche financial service firm and has
  managed credit risk through multiple business
  cycles.
• The founding partners of Pangaea also held key
  leadership roles at Antares Capital which was a
  leading provider of debt financing to mid-market
  companies.
• Over the past nine years the team has managed
  over 3 billion in investments for third party
  investors in both leveraged and unleveraged
  portfolios.

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Appendix A - Biographies

• Barry N. Shear, Senior Managing Director and
  President
• Mr. Shear is a founding partner of Pangaea Asset
  Management, LLC and Chairman of the Pangaea
  Investment Committee.Prior to founding Pangaea,
  Mr. Shear was President and Senior Managing
  Director of GE Antares. Prior to GE Antares, Mr.
  Shear was President and a co-founder of Antares
  Capital Corporation and its wholly owned
  subsidiary, Antares Asset Management. Antares
  Capital Corporation was founded in 1996. Mr.
  Shear was also a member of the Antares Asset
  Management Investment Committee.In 2005,
  General Electric Capital Corporation (GECC), an
  affiliate of GE, acquired Antares Capital
  Corporation (ACC) and Antares Asset Management,
  Inc. (AAM). Prior to the acquisition, ACC and
  AAM were engaged in the management of the
  following CDO transactions Antares Funding L.P.,
  Nova CDO 2001, Ltd. (as Advisor), Mariner CDO
  2002, Navigator CDO 2003, Navigator CDO 2004,
  Navigator CDO 2005. Prior to forming Antares
  Mr. Shear spent ten years at Heller Financial,
  Inc. where he was involved in new business
  development within the Corporate Finance Group.
  Prior to Heller, Mr. Shear spent five years as a
  Regional Marketing Manager in Chicago with Bank
  of Americas Business Credit Group. He has been a
  lender to the leveraged buyout community since
  1980. Mr. Shear has a B.S. degree from
  University of Illinois and an M.B.A. from
  University of Southern California.

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Appendix A - Biographies

• David Schmuck , Senior Managing Director and
  Chief Operating Officer
• Mr. Schmuck is a founding partner of Pangaea
  Asset Management, LLC and member of the Pangaea
  Investment Committee. He is responsible for
  communicating to the Investment Committee managed
  portfolio guidelines. He is also responsible for
  communication with the firms investor
  base.Previously he was Managing Director and
  CLO Portfolio Manager at GE Asset Management
  (GEAM), where he, as part of the bank loan
  team, was responsible for management of
  approximately 2.1 billion in collateralized loan
  obligation (CLO) transactions. He had portfolio
  management responsibility for Antares Funding,
  LP, Nova CDO 2001, Mariner CDO 2002, Navigator
  CDO 2003, Navigator CDO 2004, Navigator CDO 2005
  and Navigator CDO 2006. Mr. Schmuck joined GEAM
  in November 2005 when General Electric Capital
  Corporation (GECC), an affiliate of GE,
  acquired Antares Capital Corporation (ACC) and
  Antares Asset Management (AAM).Prior to GEAM,
  Mr. Schmuck was a member of the Investment
  Committee for AAM and also Chief Financial
  Officer of ACC. Prior to the acquisition by GECC,
  ACC and AAM managed the following transactions
  Antares Funding L.P., Nova CDO 2001, Ltd. (as
  Advisor), Mariner CDO 2002, Navigator CDO 2003,
  Navigator CDO 2004, Navigator CDO 2005.Mr.
  Schmuck worked for nearly 11 years at Heller
  Financial, Inc. prior to Antares. Most recently
  he served as Senior Director of Asset
  Distribution at Heller focused on asset-backed
  securitization transactions. Mr. Schmuck has been
  an active participant in the leveraged loan
  market since 1988.Mr. Schmuck is a Certified
  Public Accountant (inactive) and received a B.S.
  degree in accounting from Miami University
  (Oxford, Ohio) and his Masters degree from
  Northwestern Universitys Kellogg School of
  Management.

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Appendix A - Biographies

• Michael King, Senior Managing Director and
  Executive Vice President
• Mr. King is a founding partner of Pangaea and a
  member of the firms Investment Committee. He is
  responsible for the credit underwriting and
  monitoring functions at Pangaea. His team
  presents analysis and investment recommendations
  to the Pangaea Investment Committee.Previously,
  Mr. King was a Managing Director at GE Antares
  where he managed over 60 deal professionals in
  structuring and underwriting all transactions for
  the leading originator of middle-market sponsored
  credits. Prior to GE Antares he managed the
  underwriting function at Antares Capital
  Corporation beginning in 1999. Prior to Antares,
  he worked with PPM America, Inc. where he
  co-managed a 700-million senior secured debt
  portfolio. Mr. King began his commercial lending
  career with First National Bank of Chicago
  structuring and underwriting leveraged media and
  communications debt facilities. He has more than
  fifteen years of commercial lending experience.
  Mr. King has a B.A. in Economics from Marquette
  University and an M.B.A. from DePaul University.

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Appendix A - Biographies

• Chris Brown, Managing Director
• Mr. Brown is responsible for sourcing and
  managing Pangaeas distressed debt investments.
• Previously, Mr. Brown was a founding partner of
  Newberry Capital Management, a distressed
  debt/special situations fund.  He led Newberrys
  research and due diligence efforts and closely
  oversaw monitoring of portfolio investments.
   Prior to Newberry Capital, Mr. Brown was a
  portfolio manager in the Special Credit
  Opportunities Group within Ritchie Capital
  Management.  Mr. Brown joined Ritchie Capital in
  September 2004 where he was primarily responsible
  for the research efforts of the group.  In this
  role he was actively involved in a number of
  bankruptcies and workouts. From 1999 until July
  2004, Mr. Brown was a Vice President in the
  Special Investments Group of PPM America.  The
  group managed four funds totaling over 1 billion
  that purchased and actively managed investments
  in the debt and equity of distressed and other
  leveraged companies.   Prior to joining PPM, Mr.
  Brown worked for four years at the Bank of
  America, first as a Loan Officer in the
  middle-market lending group and later as an
  Associate Director on the Banks loan trading
  desk.  Prior to that he was a financial analyst
  at the Federal Reserve Bank of Chicago.  
•  
• Mr. Brown received his M.B.A from the University
  of Chicago in 1995 and his B.A. in economics from
  the University of Michigan in 1991.  In addition,
  he is a CFA charterholder and a member of the
  Investment Analysts Society of Chicago.

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Appendix A - Biographies

• Douglas Crimmins, Managing Director
• Mr. Crimmins is responsible for business
  development and fund raising efforts.
• Prior to joining Pangaea, Mr. Crimmins worked
  from 1993 through 2008 in fixed income sales at
  Citigroup and its predecessor firm Salomon
  Brothers. His most recent position was running
  Midwest distribution for structured credit and
  private placements. Distribution involved all
  aspects of the capital structure across all key
  asset classes including both cash and synthetics.
  From 1989 through 1991, Mr. Crimmins worked at
  Blackrock Financial Management as an Associate
  raising assets and working on financial advisory
  assignments. Prior to Blackrock, Mr. Crimmins
  worked two years at Lehman Brothers as a
  corporate finance analyst in the mortgage and
  financial institutions group.
• Mr. Crimmins received his M.B.A. from the
  University of Chicago in 1993 and his B.A. in
  economics from Brown University in 1987.
• Ryan Metcalfe, Director
• Mr. Metcalfe is responsible for sourcing,
  evaluating and managing senior debt investments
  and conducting secondary trading
  activities.Prior to joining Pangaea, Mr.
  Metcalfe was with GE Asset Management (GEAM)
  and prior to that he was with Antares Asset
  Management. At both firms he was responsible for
  sourcing, underwriting and managing broadly
  syndicated and middle-market investments for six
  CLOs that managed in total approximately 2
  billion. Prior to Antares he spent five years
  with the Investment Banking Group of Robert W.
  Baird Co., focusing on middle-market mergers
  and acquisitions and public and private equity
  offerings.Mr. Metcalfe graduated with highest
  honors from the University of Illinois at
  Urbana-Champaign with a B.S. in Finance.

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Appendix A - Biographies

• Mark Maglaya, Senior Investment Analyst
• Mr. Maglaya is responsible for sourcing,
  underwriting and monitoring Pangaeas senior debt
  transactions.Prior to joining Pangaea, Mr.
  Maglaya served as an Assistant Vice President
  with CIT Groups Global Sponsor Finance practice
  where he was responsible for the structuring,
  underwriting and documentation of CITs
  middle-market senior debt transactions. Before
  serving in this capacity, Mr. Maglaya spent 5
  years with Antares Capital Corporation assisting
  in the structuring, underwriting, documentation
  and management of Antares middle-market senior
  debt transactions. Prior to Antares, Mr. Maglaya
  was an Investment Analyst for UBS OConnor, LLC,
  a Chicago-based hedge fund manager and affiliate
  of UBS Investment Bank. Mr. Maglaya began his
  career at KPMG where he spent over two years as
  an auditor in the investment management services
  industry. He received a B.S. in both Accounting
  and Finance from Indiana University.
• Matthew Nels, Senior Investment Analyst
• Mr. Nels is responsible for sourcing,
  underwriting and monitoring Pangaeas senior debt
  transactions.Prior to joining Pangaea, Mr. Nels
  was a Vice President with LaSalle Bank N.A. in
  the ESOP Financial Services Group where he was
  responsible for the design, structure and
  execution of leveraged ESOP transactions. Prior
  to LaSalle Bank, he spent four years at GE
  Healthcare Financial Services where he was
  responsible for the underwriting, documentation
  and monitoring of middle-market healthcare
  transactions. Prior to his employment with GE,
  Mr. Nels spent four years as a Portfolio Analyst
  with Heller Financial, Inc. and a Junior
  Trader/Operations Analyst with Deere Park Capital
  LLC.Mr. Nels holds a B.S. in Finance and
  Marketing from Eastern Illinois University and an
  MBA in Finance from DePaul University.

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Appendix A - Biographies

• Ross Van Drunen, Senior Investment Analyst
•  
• Mr. Van Drunen is responsible for sourcing,
  underwriting and monitoring Pangaeas senior debt
  transactions.
•  
• Mr. Van Drunen has seven years of direct
  experience managing credits within CLO vehicles.
  He was most recently an Investment Officer and
  Team Leader with Capital Source, Inc. and was
  with Denali Capital LLC in a similar role for
  over 5 years. Mr. Van Drunens primary
  responsibilities have included analyzing,
  underwriting and approving investment
  opportunities and portfolio oversight. Mr. Van
  Drunen also spent four years as a Tax Specialist
  with Heller Financial, Inc. and Ernst Young,
  LLP.
•  
• Mr. Van Drunen holds a B.S. in Accounting from
  Trinity Christian College and an MBA from DePaul
  University.
• Jeff Cupples, Associate
• Mr. Cupples is responsible for supporting the
  underwriting and monitoring of Pangaeas senior
  debt transactions.Prior to joining Pangaea, Mr.
  Cupples was a Corporate Banking Loan Officer with
  LaSalle Bank where he was responsible for
  monitoring 16 client relationships and a
  portfolio of 100-million in loans. Mr. Cupples
  began his career as a Credit Analyst with
  LaSalles Commercial Lending Trading Program
  where he gained well-rounded lending experience
  via four concentrated rotations through Non-Bank
  Financial Institutions, Cash Flow Lending to
  Educational Institutions, National Institutions
  Real Estate and ESOP Financial Services.Mr.
  Cupples graduated with honors from Michigan State
  University with a B.A. in Finance.
•  

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Appendix A - Biographies

• James Jago, Analyst
• Mr. Jago is responsible for supporting the
  underwriting and monitoring of Pangaeas senior
  debt investments.Prior to joining Pangaea, Mr.
  Jago was a Portfolio Analyst at Merrill Lynch
  Capital where he was responsible for monitoring
  60 loan transactions aggregating over 500
  million. Before working at Merrill Lynch Capital,
  Mr. Jago was a Consultant at Protiviti, providing
  risk consulting and internal audit services with
  a focus on financial institutions.Mr. Jago
  graduated Cum Laude from the A.B. Freeman School
  of Business at Tulane University with a B.S.M. in
  Finance.
• Thomas J. Bax, Chief Financial Officer and Chief
  Compliance Officer
• Mr. Bax is responsible for all Pangaea corporate
  matters and directing the services of rating
  agencies and accounting firms in support of the
  CLO product. Mr. Bax is also Pangaeas Chief
  Compliance Officer and responsible for
  maintaining compliance with Pangaeas Registered
  Investment Adviser filing and requirements and
  also Pangaeas internal policies and procedures.
  Prior to joining Pangaea, Mr. Bax spent four
  years as Vice PresidentTreasury Operations at
  Career Education Corporation, a publicly traded
  firm offering education services across the world
  in a variety of career-oriented disciplines.
  Prior to joining Career Education, Mr. Bax spent
  14 years at Heller Financial, Inc. in a variety
  of positions. At Heller, Mr. Bax was involved
  with several securitizations of Commercial
  Mortgage Backed Securities, a balance sheet
  Collateralized Loan Obligation transaction and
  timeshare securitizations. Mr. Bax also had
  experience with cash flow lending and internal
  audit while at Heller. Mr. Bax began his career
  at Deloitte and Touche where he worked for eight
  years attaining the position of Audit
  Manager.Mr. Bax graduated from Bradley
  University with a B.S. in Accounting. Mr. Bax is
  a C.P.A.

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Appendix A - Biographies

• Sean Treanor, Director of Operations
• Mr. Treanor is responsible for Pangaeas
  operations function.Most recently Mr. Treanor
  was a Vice President of Derivative Operations
  with Goldman Sachs. At Goldman he led the
  implementation of automated process solutions for
  the trade capture system in support of credit
  derivates. He implemented straight through trade
  processing for loan credit derivatives and
  managed a global team to automate the linkage
  between trade booking and trade documentation
  systems. Prior to joining Goldman, Mr. Treanor
  was a Vice President of Securitization Operations
  with GE. In this capacity he was responsible for
  the securitization settlement derivative
  operations and investor-reporting platform for GE
  Commercial Finances Capital Markets Group. Mr.
  Treanor started his career with Heller Financial,
  Inc. analyzing investments in asset-backed
  securities.Mr. Treanor is a CFA charter holder
  and received his B.A. in Finance and Economics,
  Cum Laude, from the University of Illinois and
  his M.B.A. from New York Universitys Stern
  School of Business.
• John Thies, Operations Analyst
• Mr. Thies is responsible for supporting
  Pangaeas operations functions.Previously Mr.
  Thies was a Financial Analyst at GE Asset
  Management. He was responsible for obtaining the
  required ratings from Standard Poor's and
  Moody's Investors Service related to private loan
  collateral held by managed CLO transactions. He
  also provided analytic support for the Investor
  reporting function for managed CLO transactions.
  Prior to that he worked as a Financial Analyst at
  Antares Capital Corporation and as a Senior
  Financial Reporting Supervisor with Aon Warranty
  Insurance Group. He started his career with
  Arthur Andersen as an auditor. Mr. Thies has
  his B.S. in Accountancy from Illinois State
  University.

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