Company: PDCC
Filing Date: 2025-07-18
Form Type: N-2
Source: 0001214659-25-010613
Chunk: 76

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-07-18
Form: N-2
Chunk 76
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 occur, our increase in net earnings, if any, would likely be significantly smaller than the relative increase in the Adviser’s
income incentive fee resulting from such a general increase in interest rates.

We may be obligated to pay the Adviser incentive compensation even if we incur a loss or with respect to investment income that we have accrued but not received.

The Adviser is entitled to incentive compensation
for each fiscal quarter based, in part, on our Pre-Incentive Fee Net Investment Income, if any, for the immediately preceding calendar
quarter above a performance threshold for that quarter. Accordingly, since the performance threshold is based on a percentage of our NAV,
decreases in our NAV make it easier to achieve the performance threshold. Our Pre-Incentive Fee Net Investment Income for incentive compensation
purposes excludes realized and unrealized capital losses or depreciation that we may incur in the fiscal quarter, even if such capital
losses or depreciation result in a net loss on our statement of operations for that quarter. Thus, we may be required to pay the Adviser
incentive compensation for a fiscal quarter even if there is a decline in the value of our portfolio or we incur a net loss for that quarter.
In addition, we accrue an incentive fee on accrued income that we have not yet received in cash. However, the portion of the incentive
fee that is attributable to such income will be paid to the Adviser, without interest, only if and to the extent we actually receive such
income in cash.

| 43 |

The Adviser’s liability is limited under the Investment Advisory Agreement, and we have agreed to indemnify the Adviser against certain liabilities, which may lead the Adviser to act in a riskier manner on our behalf than it would when acting for its own account.

Under the Investment Advisory Agreement, the Adviser
does not assume any responsibility to us other than to render the services called for under the agreement and carries out its obligations
subject to the oversight of the board of directors. The Adviser maintains a contractual and fiduciary relationship with us. Under the
terms of the Investment Advisory Agreement, the Adviser, its officers, managers, members, agents, employees, and other affiliates are
not liable to us for acts or omissions performed in accordance with and pursuant to the Investment Advisory Agreement, except those resulting
from acts constituting willful misfeasance, bad faith, gross negligence, or reckless disregard of the Adviser’s duties under the
Investment Advisory Agreement. In addition