Exhibit 10.1 

 

 


Execution
Copy


 


 


 


WhiteHorse Finance, Inc.


 


 


$25,000,000


 


 


4.25% Senior
Notes due December 6, 2028


 


______________


 


 


Note Purchase Agreement


 


______________


 


 


Dated
December 6, 2021


 


 


 



 


 





    


    


    

 


Table of Contents


 


	Section	Heading	Page
	 	 	 
	Section 1.	Authorization of Notes; Interest Rate	1
	 	 	 
	Section 1.1.	Authorization of Notes	1
	Section 1.2.	Changes in Interest Rate	1
	 	 	 
	Section 2	Sale and Purchase of Notes	2
	 	 	 
	Section 3.	Closing	2
	 	 	 
	Section 4.	Conditions to Closing	3
	 	 	 
	Section 4.1.	Representations and Warranties	3
	Section 4.2.	Performance; No Default	3
	Section 4.3.	Compliance Certificates	3
	Section 4.4.	Opinions of Counsel	4
	Section 4.5.	Purchase Permitted by Applicable Law, Etc	4
	Section 4.6.	Sale of Other Notes	4
	Section 4.7.	Payment of Special Counsel Fees	4
	Section 4.8.	Private Placement Number	4
	Section 4.9.	Changes in Corporate Structure	4
	Section 4.10.	Funding Instructions	4
	Section 4.11.	Rating	4
	Section 4.12.	Consent of Holders of Other Indebtedness	5
	Section 4.13.	Proceedings and Documents	5
	 	 	 
	Section 5.	Representations and Warranties of the Company	5
	 	 	 
	Section 5.1.	Organization; Power and Authority	5
	Section 5.2.	Authorization, Etc	5
	Section 5.3.	Disclosure	5
	Section 5.4.	Organization and Ownership of Shares of Subsidiaries; Affiliates	6
	Section 5.5.	Financial Statements; Material Liabilities	7
	Section 5.6.	Compliance with Laws, Other Instruments, Etc	7
	Section 5.7.	Governmental Authorizations, Etc	7
	Section 5.8.	Litigation; Observance of Agreements, Statutes and Orders	7
	Section 5.9.	Taxes	8
	Section 5.10.	Title to Property; Leases	8
	Section 5.11.	Licenses, Permits, Etc	8
	Section 5.12.	Compliance with Employee Benefit Plans	9
	Section 5.13.	Private Offering by the Company	10
	Section 5.14.	Use of Proceeds; Margin Regulations	10
	Section 5.15.	Existing Indebtedness; Future Liens	10
	Section 5.16.	Foreign Assets Control Regulations, Etc	11
	Section 5.17.	Status under Certain Statutes	11



 





    -i-


    


    

 





	Section 5.18.	Environmental Matters	12
	Section 5.19.	Investment Company Act	12
	 	 	 
	Section 6.	Representations of the Purchasers	12
	 	 	 
	Section 6.1.	Purchase for Investment	12
	Section 6.2.	Source of Funds	13
	Section 6.3.	Investment Experience; Access to Information	14
	Section 6.4.	Authorization	15
	 	 	 
	Section 7.	Information as to Company	15
	 	 	 
	Section 7.1.	Financial and Business Information	15
	Section 7.2.	Officer’s Certificate	18
	Section 7.3.	Access	18
	Section 7.4.	Electronic Delivery	19
	 	 	 
	Section 8	Payment and Prepayment of the Notes	20
	 	 	 
	Section 8.1.	Maturity	20
	Section 8.2.	Optional Prepayments with Make-Whole Amount	20
	Section 8.3.	Allocation of Partial Prepayments	20
	Section 8.4.	Maturity; Surrender, Etc.	20
	Section 8.5.	Purchase of Notes	21
	Section 8.6.	Make-Whole Amount	21
	Section 8.7.	Payments Due on Non-Business Days	23
	Section 8.8.	Change in Control	23
	 	 	 
	Section 9.	Affirmative Covenants.	24
	 	 	 
	Section 9.1.	Compliance with Laws	24
	Section 9.2.	Insurance	24
	Section 9.3.	Maintenance of Properties	24
	Section 9.4.	Payment of Taxes and Claims	24
	Section 9.5.	Corporate Existence, Etc	25
	Section 9.6.	Books and Records	25
	Section 9.7.	Subsidiary Guarantors	25
	Section 9.8.	Rating Confirmation.	26
	Section 9.9.	Status of RIC and BDC	26
	Section 9.10.	Priority of Obligations	27
	 	 	 
	Section 10.	Negative Covenants.	27
	 	 	 
	Section 10.1.	Transactions with Affiliates	27
	Section 10.2.	Merger, Consolidation, Etc	27
	Section 10.3.	Line of Business	28
	Section 10.4.	Economic Sanctions, Etc	29
	Section 10.5.	Liens	29
	Section 10.6.	Financial Covenants.	29





 







    -ii-


    


    

 





	Section 10.7.	Most Favored Lender Status	30
	 	 	 
	Section 11.	Events of Default	32
	 	 	 
	Section 12.	Remedies on Default, Etc	34
	 	 	 
	Section 12.1.	Acceleration	34
	Section 12.2.	Other Remedies	35
	Section 12.3.	Rescission	35
	Section 12.4.	No Waivers or Election of Remedies, Expenses, Etc	35
	 	 	 
	Section 13.	Registration; Exchange; Substitution of
                        Notes	36
	 	 	 
	Section 13.1.	Registration of Notes	36
	Section 13.2.	Transfer and Exchange of Notes	36
	Section 13.3.	Replacement of Notes	37
	 	 	 
	Section 14.	Payments on Notes	37
	 	 	 
	Section 14.1.	Place of Payment	37
	Section 14.2.	Payment by Wire Transfer	38
	Section 14.3.	FATCA Information	38
	 	 	 
	Section 15.	Expenses, Etc	39
	 	 	 
	Section 15.1.	Transaction Expenses	39
	Section 15.2.	Certain Taxes	40
	Section 15.3.	Survival	40
	 	 	 
	Section 16.	Survival of Representations and Warranties;
                        Entire Agreement	40
	 	 	 
	Section 17.	Amendment and Waiver	40
	 	 	 
	Section 17.1.	Requirements	40
	Section 17.2.	Solicitation of Holders of Notes	41
	Section 17.3.	Binding Effect, Etc	41
	Section 17.4.	Notes Held by Company, Etc	42
	 	 	 
	Section 18.	Notices	42
	 	 	 
	Section 19.	Reproduction of Documents	42
	 	 	 
	Section 20.	Confidential Information	43
	 	 	 
	Section 21.	Substitution of Purchaser	44
	 	 	 
	Section 22.	Miscellaneous	44





 




    -iii-


    


    

 





	Section 22.1.	Successors and Assigns	44
	Section 22.2.	Accounting Terms	44
	Section 22.3.	Severability	45
	Section 22.4.	Construction, Etc	45
	Section 22.5.	Counterparts; Electronic Contracting	46
	Section 22.6.	Governing Law	46
	Section 22.7.	Jurisdiction and Process; Waiver of Jury Trial	46
	 	 	 
	Signature	1





 







    -iv-


    


    

 





	Schedule A	—	Defined Terms
	 	 	 
	Schedule 1	—	Form of 4.25% Senior Note due December 6, 2028
	 	 	 
	Schedule 4.4(a)	— 	Form of Opinion of Special Counsel for the Company
	 	 	 
	Schedule 4.4(b)	—	Form of Opinion of Special Counsel for the Purchasers
	 	 	 
	Schedule 5.3	—	Disclosure Materials
	 	 	 
	Schedule 5.4	—	Subsidiaries of the Company and Ownership of Subsidiary Stock
	 	 	 
	Schedule 5.5	—	Financial Statements
	 	 	 
	Schedule 5.15	—	Existing Indebtedness
	 	 	 
	Schedule 10.1	—	Transactions with Affiliates
	 	 	 
	Purchaser Schedule	—	Information Relating to Purchasers





 




    -v-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


WhiteHorse
Finance, Inc.

1450 Brickell Avenue, 31st Floor

Miami, Florida 33131


 


4.25%
Senior Notes due December 6, 2028


 




 


December 6, 2021


 


 


To Each
of the Purchasers Listed in


the
Purchaser Schedule Hereto:


 


Ladies and Gentlemen:


 


WhiteHorse Finance, Inc.,
a Delaware corporation (the “Company”), agrees with each of the Purchasers as follows:


 


Section 1.Authorization
of Notes; Interest Rate.


 


Section 1.1.Authorization
of Notes. The Company will authorize the issue and sale of $25,000,000 aggregate principal amount of its 4.25% Senior Notes due December 6, 2028
(the “Notes”). The Notes shall be substantially in the form set out in Schedule 1. Certain capitalized and other
terms used in this Agreement are defined in Schedule A and, for purposes of this Agreement, the rules of construction set forth
in Section 22.4 shall govern.


 


Section 1.2.Changes
in Interest Rate. (a) If at any time a Below Investment Grade Event occurs, then:


 


(i)as
of the date of the occurrence of the Below Investment Grade Event to and until the date on which such Below Investment Grade Event is
no longer continuing (as evidenced by the receipt and delivery to the holders of the Notes of any Rating necessary to cure such Below
Investment Grade Event), the Notes shall bear interest at the Adjusted Interest Rate; and


 


(ii)the
Company shall promptly, and in any event within twenty (20) Business Days after a Below Investment Grade Event has occurred, notify the
holders of the Notes in writing, sent in the manner provided in Section 18, that a Below Investment Grade Event has occurred, which
written notice shall be accompanied by evidence satisfactory to the Required Holders to such effect and confirming the effective date
of the Below Investment Grade Event and that the Adjusted Interest Rate will be payable in respect of the Notes in consequence thereof.


 




    


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


(b)Each
holder of a Note shall, at the Company’s expense, use reasonable efforts to cooperate with any reasonable request made by the Company
in connection with any rating appeal or application.


 


(c)The
fees and expenses of any NRSRO and all other costs incurred in connection with obtaining, affirming or appealing a Rating pursuant to
this Section 1.2 shall be borne by the Company.


 


(d)As
used herein, “Adjusted Interest Rate” with respect to the Notes shall be 5.25%
per annum.


 


(e)As
used herein, a “Below Investment Grade Event” shall occur if


 


(i)at
any time the Company has obtained a Rating of the Notes from only one NRSRO, the then most recent Rating from such NRSRO that is in full
force and effect (not having been withdrawn) is less than Investment Grade; or


 


(ii)at
any time the Company has obtained a Rating of the Notes from two NRSROs, the then lower of the most recent Ratings from the NRSROs that
are in full force and effect (not having been withdrawn) is less than Investment Grade; or


 


(iii)at
any time the Company has obtained a Rating of the Notes from three or more NRSROs, the then second lowest of the most recent Ratings
from the NRSROs that is in full force and effect (not having been withdrawn) is less than Investment Grade; or


 


(iv)at
any time the Company shall have failed to receive and deliver to the holders of the Notes a Rating of the Notes from at least one NRSRO
as required pursuant to Section 9.8.


 


(f)Following
the occurrence of an Event of Default, the Notes shall bear interest at the Default Rate.


 


Section 1.3.Issue
Price; Original Issue Discount. The Company and the Purchasers agree that the Notes shall be issued with original issue discount,
for purposes of Sections 1272, 1273, and 1275 of the Code. Upon the request of any holder of a Note, the Company will promptly make available
to such holder, (i) the issue price of the Notes held by such holder, (ii) the amount of original issue discount in respect
thereof, (iii) the issue date of such Note, (iv) the yield to maturity of such Note, (v) the comparable yield of such
Note, and (vi) the projected payment schedule of such Note, in each case as determined under the original issue discount rules under
the Code. Any such request shall be directed to the Company at the address provided in Section 18.


 


Section 2.Sale
and Purchase of Notes.


 


Subject
to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser, and each Purchaser will purchase from
the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name
in the Purchaser Schedule at the purchase price of 99% of the principal amount thereof. The Purchasers’ obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance
of any obligation by any other Purchaser hereunder.


 






    -2-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


Section 3.Closing.


 


This
Agreement shall be executed and delivered in advance of the Closing at the offices of Chapman and Cutler LLP, 111 West Monroe Street,
Chicago, Illinois 60603, on December 6, 2021. The sale and purchase of the Notes to be purchased by each Purchaser shall occur
at the offices of Chapman and Cutler LLP, 111 West Monroe, Chicago, IL 60603, at 9:00 a.m. Chicago time, at a closing (the
“Closing”) on December 6, 2021. At the Closing the Company will deliver to each Purchaser the Notes to be
purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such
Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against
delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company to Account No. 7163198400 at The Bank of New York Mellon,
Swift Code IRVTUS3NAMS, ABA No. 021000018. If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided
above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s
satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving
any rights such Purchaser may have by reason of such failure by the Company to tender such Notes or any of the conditions specified in
Section 4 not having been fulfilled to such Purchaser’s satisfaction.


 


Section 4.Conditions
to Closing.


 


Each
Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment
to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:


 


Section 4.1.Representations
and Warranties. The representations and warranties of the Company in this Agreement shall be correct as of the date of this Agreement
and at the time of the Closing.





 


Section 4.2.Performance;
No Default. The Company shall have performed and complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing. Before and after giving effect to the issue and sale of the Notes
(and the application of the proceeds thereof as contemplated by Section 5.14), no Default or Event of Default shall have occurred
and be continuing and no Control Event and no Change in Control shall have occurred.


 




    -3-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


Section 4.3.Compliance
Certificates.


 


(a)Officer’s
Certificate. The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.


 


(b)Secretary’s
Certificate. The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the
date of the Closing, certifying as to (i) the resolutions attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Notes and this Agreement and (ii) the Company’s organizational documents as then in effect.


 


Section 4.4.Opinions
of Counsel. Such Purchaser shall have received opinions, dated the date of the Closing, (a) from Dechert LLP, counsel for
the Company, in the form set forth on Schedule 4.4(a) (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers)
and (b) from Chapman and Cutler LLP, the Purchasers’ special counsel in connection with such transactions, substantially in
the form set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably
request.


 


Section 4.5.Purchase
Permitted by Applicable Law, Etc. On the date of the Closing such Purchaser’s purchase of Notes shall (a) be permitted
by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8)
of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of
the particular investment, (b) not violate any applicable law or regulation (including Regulation T, U or X of the Board of Governors
of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall
have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable
such Purchaser to determine whether such purchase is so permitted.


 


Section 4.6.Sale
of Other Notes. Contemporaneously with the Closing the Company shall sell to each other Purchaser and each other Purchaser shall
purchase the Notes to be purchased by it at the Closing as specified in the Purchaser Schedule.


 


Section 4.7.Payment
of Special Counsel Fees. Without limiting Section 15.1, the Company shall have paid on or before the Closing the reasonable
fees, charges and disbursements of the Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day prior to the Closing.


 




    -4-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


Section 4.8.Private
Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the
SVO) shall have been obtained for the Notes.


 


Section 4.9.Changes
in Corporate Structure. The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been
a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in Schedule 5.5.


 


Section 4.10.Funding
Instructions. At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions
signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3, including (a) the
name and address of the transferee bank, (b) such transferee bank’s ABA number and (c) the account name and number into
which the purchase price for the Notes is to be deposited.


 


Section 4.11.Rating.
The Notes shall have received a Rating of “BBB-” or better by Egan Jones.


 


Section 4.12.Consent
of Holders of Other Indebtedness. On or prior to the date of the Closing, any consents or approvals required to be obtained from
any holder or holders of any outstanding Indebtedness of the Company or its Subsidiaries and any amendments of agreements pursuant to
which any Indebtedness may have been issued which shall be necessary to permit the consummation of the transactions contemplated hereby
shall have been obtained (and shall be in full force and effect on the date of the Closing) and shall be satisfactory to such Purchaser
and its special counsel.


 


Section 4.13.Proceedings
and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents
and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and
its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser
or such special counsel may reasonably request.


 


Section 5.Representations
and Warranties of the Company.


 


The Company represents and
warrants to each Purchaser that as of the date of this Agreement and the Closing.


 


Section 5.1.Organization;
Power and Authority. The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction
of incorporation, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the corporate power and authority to own
or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact,
to execute and deliver this Agreement and the Notes and to perform the provisions hereof and thereof.


 


Section 5.2.Authorization,
Etc. This Agreement and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this
Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the enforcement of creditors’
rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) implied covenants of good faith and fair dealing.



 




    -5-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 





 Section 5.3.Disclosure.
The Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the Company’s Quarterly Reports on Form
10-Q for the three months ended March 31, 2021, the three months ended June 30, 2021 and the three months ended September 30,
2021 (collectively, the “Company Periodic Reports”), do not contain any untrue statement of a material fact, except
to the extent updated or corrected in a subsequent Company Periodic Report or other filing by the Company with the SEC. The Company Periodic
Reports fairly describe, in all material respects, the general nature of the business and principal properties of the Company and its
Subsidiaries. This Agreement, the financial statements listed in Schedule 5.5 and the documents, certificates or other writings
delivered to the Purchasers by or on behalf of the Company on or prior to November 12, 2021 in connection with the transactions
contemplated hereby and identified in Schedule 5.3 (this Agreement, the Company Periodic Reports and such documents, certificates
or other writings and such financial statements delivered to each Purchaser being referred to, collectively, as the “Disclosure
Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure
Documents, since December 31, 2020, there has been no change in the financial condition, operations, business, properties or prospects
of the Company or any Subsidiary, except changes that would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. There is no fact known to the Company that would reasonably be expected to have a Material Adverse Effect that has not
been set forth herein or in the Disclosure Documents.


 


Section 5.4.Organization
and Ownership of Shares of Subsidiaries; Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and correct
lists of (i) the Company’s Subsidiaries, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization,
the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other
Subsidiary and whether such Subsidiary is a Subsidiary Guarantor, (ii) the Company’s Affiliates, other than Subsidiaries,
(iii) the External Manager and its Affiliates, and (iv) the Company’s directors and senior officers.


 


(b)All
of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by
the Company and its Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by the Company or another
Subsidiary free and clear of any Lien that is prohibited by this Agreement.



 


(c)Each
Subsidiary is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable,
is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports
to own or hold under lease and to transact the business it transacts and proposes to transact.


 




    -6-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    










(d)No
Subsidiary is subject to any Material legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 5.4
and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out
of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares
of capital stock or similar equity interests of such Subsidiary.


 


Section 5.5.Financial
Statements; Material Liabilities. The Company has delivered to each Purchaser copies of the financial statements of the Company and
its Subsidiaries listed on Schedule 5.5. All of such financial statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective
dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified
and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes
thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).


 


Section 5.6.Compliance
with Laws, Other Instruments, Etc. The execution, delivery and performance by the Company of this Agreement and the Notes will not
(i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, (A) the corporate charter, by-laws or shareholders agreement of the Company or any Subsidiary
or (B) any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease or any other agreement or instrument to which
the Company or any Subsidiary is bound or by which the Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree
or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Subsidiary or (iii) violate any provision
of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Subsidiary, except where any
of the foregoing (other than clause (i)(A) above), individually or in the aggregate, would not reasonably be expected to result in a
Material Adverse Effect.


 


Section 5.7.Governmental
Authorizations, Etc. No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority
is required in connection with the execution, delivery or performance by the Company of this Agreement or the Notes, other than any filing
required under the Exchange Act or the rules or regulations promulgated thereunder on Form 8-K, Form 10-Q or Form 10-K, any notice
required or permitted under Rule 135c of the Securities Act or any filing required under Rule 482 or Rule 497 under the Investment
Company Act.


 





    -7-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 





Section 5.8.Litigation;
Observance of Agreements, Statutes and Orders. (a) There are no actions, suits, investigations or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary
in any court or before any arbitrator of any kind or before or by any Governmental Authority that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.


 


(b)Neither
the Company nor any Subsidiary is (i) in default under any agreement or instrument to which it is a party or by which it is bound,
(ii) in violation of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (iii) in violation
of any applicable law, ordinance, rule or regulation of any Governmental Authority (including Environmental Laws, the USA PATRIOT Act
or any of the other laws and regulations that are referred to in Section 5.16), which default or violation would, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


Section 5.9.Taxes.
The Company and its Subsidiaries have filed all federal and state and other Material tax returns that are required to have been filed
in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon
them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) where the failure to file or pay, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect or (ii) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that
would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company reasonably believes that
the charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of U.S. federal, state or other taxes
for all fiscal periods are adequate in all material respects.


 


Section 5.10.Title
to Property; Leases. The Company and its Subsidiaries have good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5
or purported to have been acquired by the Company or any Subsidiary after such date (except as sold or otherwise disposed of in the ordinary
course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate
are Material are valid and subsisting and are in full force and effect in all material respects.


 


Section 5.11.Licenses,
Permits, Etc. (a) The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents,
copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate
are Material, without known conflict with the rights of others, except for any such conflicts that, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect.


 







    -8-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(b)To
the knowledge of the Company, no product or service of the Company or any of its Subsidiaries infringes in any material respect any license,
permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by
any other Person, except for any such infringements that, individually or in the aggregate, would not reasonably be expected to result
in a Material Adverse Effect.


 


(c)To
the knowledge of the Company, there is no violation by any Person of any right of the Company or any of its Subsidiaries with respect
to any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other
right owned or used by the Company or any of its Subsidiaries, except for any such violations that, individually in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect.


 


Section 5.12.Compliance
with Employee Benefit Plans. Except as would not be reasonably expected to have a Material Adverse Effect:


 


(a)The
Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws. Neither the Company
nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred
or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the
Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise
tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with
the amendment of a Plan.


 


(b)The
present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end
of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s
most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit
liabilities. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded,
determined as of the end of the Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did
not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities. The term “benefit
liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present
value” have the meaning specified in section 3 of ERISA.


 


(c)The
Company and its ERISA Affiliates have not incurred (i) withdrawal liabilities (and are not subject to contingent withdrawal liabilities)
under section 4201 or 4204 of ERISA in respect of Multiemployer Plans or (ii) any obligation in connection with the termination
of or withdrawal from any Non-U.S. Plan.


 





    -9-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(d)The
expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance
with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable
to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material.


 


(e)The
execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D)
of the Code. The representation by the Company to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used
to pay the purchase price of the Notes to be purchased by such Purchaser.


 


(f)All
Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable
thereto. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be
paid or accrued by the Company and its Subsidiaries have been paid or accrued as required.


 


Section 5.13.Private
Offering by the Company. Other than the offering and issuance of the 4.00% Senior Notes due 2026 on November 24, 2021,
neither the Company nor anyone acting on its behalf has offered, within six months prior to the date of this Agreement, the Notes or
any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or
negotiated in respect thereof with, any Person other than the Purchasers, each of which has been offered the Notes at a private sale
for investment. Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance
or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of
any Securities or blue sky laws of any applicable jurisdiction, other than, in the case of “Blue Sky” regulations, mandatory
notice or other filings.


 


Section 5.14.Use
of Proceeds; Margin Regulations. The Company will apply the proceeds of the sale of the Notes hereunder to refinance and/or redeem
existing debt and for general corporate purposes. No part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances
as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 10% of the value of the consolidated assets of
the Company and its Subsidiaries and the Company does not have any present intention that margin stock will constitute more than 10%
of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation U.


 


Section 5.15.Existing
Indebtedness; Future Liens. (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Subsidiaries as of September 30, 2021 (including descriptions of the obligors
and obligees, principal amounts outstanding, any collateral therefor and any Guaranty thereof), since which date there has been no Material
change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default, and no waiver of default is currently in effect, in the payment of any principal
or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons
to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.


 





    -10-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




(b)Except
as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has agreed or consented to cause or permit any of its property,
whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness or to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that
secures Indebtedness.


 


(c)Neither
the Company nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness
of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including its charter or any other organizational
document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as disclosed
in Schedule 5.15.


 


Section 5.16.Foreign
Assets Control Regulations, Etc. (a) Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii) has
been notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that
have been imposed by the United Nations or the European Union.


 


(b)Neither
the Company nor any Controlled Entity (i) has violated, been found in violation of, or been charged or convicted under, any applicable
U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge,
is under investigation by any Governmental Authority for possible violation of any U.S. Economic Sanctions Laws, Anti-Money Laundering
Laws or Anti-Corruption Laws.


 


(c)No
part of the proceeds from the sale of the Notes hereunder:


 


(i)       constitutes
or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity,
directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B) for
any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation
of any U.S. Economic Sanctions Laws;


 


(ii)       will
be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering
Laws; or




  




    -11-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


(iii)       will
be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial
counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation
of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.


 


(d)The
Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law)
to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable U.S. Economic Sanctions
Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.


 


Section 5.17.Status
under Certain Statutes. Neither the Company nor any Subsidiary is subject to regulation under the Public Utility Holding Company
Act of 2005, the ICC Termination Act of 1995 or the Federal Power Act.


 


Section 5.18.Environmental
Matters. (a) Neither the Company nor any Subsidiary has knowledge of any claim or has received any written notice of any claim
and no proceeding has been instituted asserting any claim against the Company or any of its Subsidiaries or any of their respective real
properties or other assets now or formerly owned, leased or operated by any of them, alleging any damage to the environment or violation
of any Environmental Laws, except, in each case, such as would not reasonably be expected to result in a Material Adverse Effect.


 


(b)Neither
the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased
or operated by any of them or to other assets or their use, except, in each case, such as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.


 


(c)Neither
the Company nor any Subsidiary has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any
of them in a manner which has violated any Environmental Law that would, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.


 


(d)Neither
the Company nor any Subsidiary has disposed of any Hazardous Materials in a manner which has violated any Environmental Law that would,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.


 


(e)All
buildings on all real properties now owned, leased or operated by the Company or any Subsidiary are in compliance with applicable Environmental
Laws, except where failure to comply would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.



 




    -12-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




Section 5.19.Investment
Company Act.


 


(a)Status
as Business Development Company and RIC. The Company has elected to be regulated as a “business development company”
within the meaning of the Investment Company Act and intends to qualify annually as a RIC.


 


(b)Compliance
with Investment Company Act. The business and other activities of the Company and its Subsidiaries, including the issuance of the
Notes hereunder, the application of the proceeds and repayment thereof by the Company, and the consummation of the transactions contemplated
by this Agreement do not result in a violation or breach in any material respect of the provisions of the Investment Company Act or any
rules, regulations or orders issued by the SEC thereunder, in each case that are applicable to the Company and its Subsidiaries.


 


Section 6.Representations
of the Purchasers.


 


Section 6.1.Purchase
for Investment.


 


(a)       Each
Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by
such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided
that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control.
Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant
to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is not required to register the Notes.


 


(b)
        Each Purchaser understands and agrees that it will not transfer the Notes or any part or portion
thereof held by it (i) to any Person who is not an Institutional Investor or who is a Competitor or (ii) in violation of applicable law.


 


Section 6.2.Source
of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each
source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by
such Purchaser hereunder:


 


(a)the
Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s
Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general
account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof
as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and
liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement
filed with such Purchaser’s state of domicile; or



 




    -13-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(b)the
Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account
(or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance
of the separate account; or


 


(c)the
Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant
to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially
owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or


 


(d)the
Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”))
managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption),
no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the
QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be
 “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the
names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed
to the Company in writing pursuant to this clause (d); or


 


(e)the
Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”))
managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption),
the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in
the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute
the Source have been disclosed to the Company in writing pursuant to this clause (e); or


 





    -14-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(f)the
Source is a governmental plan; or


 


(g)the
Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this clause (g); or


 


(h)the
Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.


 


As used in this Section 6.2, the terms “employee
benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings
assigned to such terms in section 3 of ERISA.


 


Section 6.3.
 Investment Experience; Access to Information. Each Purchaser (for itself and for each account for which such Purchaser is
acquiring the Notes) severally represents that such Person (a) is an “accredited investor” as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D promulgated under the Securities Act and an “Institutional Account” as defined in FINRA Rule
4512(c), (b) either alone or together with its representatives has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of this investment and make an informed decision to so invest and has so evaluated and
analyzed the risks and merits of such investment, (c) has the ability to bear the economic risks of this investment and can afford a
complete loss of such investment, (d) understands the terms of and risks associated with the purchase of the Notes, including, without
limitation, a lack of liquidity, pricing availability and risks associated with the industry in which the Company operates, (e) has had
the opportunity to review (i) the Disclosure Documents and (ii) such other disclosure regarding the Company, its business and its financial
condition as such Purchaser has determined to be necessary in connection with the purchase of the Notes, (f) has had an opportunity
to ask such questions and make such inquiries concerning the Company, its business and its financial condition as such Purchaser has
deemed appropriate in connection with its purchase of the Notes and to receive satisfactory answers to such questions and inquiries,
and (g) is purchasing the Notes without a view to distribution thereof within the meaning of the Securities Act and agrees not to
reoffer or resell the Notes except pursuant to an exemption from registration under the Securities Act or pursuant to an effective registration
statement thereunder (it being understood, however, that the disposition of such Person’s property shall at all times be within
such Person’s control).


 


Section 6.4.Authorization.
Each Purchaser severally represents that (a) it has full power and authority to enter into this Agreement and (b) this Agreement, when
executed and delivered by such Purchaser, will constitute valid and legally binding obligations of such Purchaser, enforceable in accordance
with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other
laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies.



 




    -15-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




Section 7.Information
as to Company.


 


Section 7.1.Financial
and Business Information. The Company shall deliver to each Purchaser and each holder of a Note that is an Institutional Investor:


 


(a)Quarterly
Statements — within 45 days (or if shorter, 15 days greater than the period applicable to the filing of the Company’s
Quarterly Report on Form 10-Q (the “Form 10-Q”) with the SEC, regardless of whether the Company
is subject to the filing requirements thereof) after the end of each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year), duplicate copies of,


 


(i)a
consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and


 


(ii)consolidated
statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and
(in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,


 


setting forth in each case in comparative
form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes
resulting from year-end adjustments;


 


(b)Annual
Statements — within 90 days (or if shorter, 15 days greater than the period applicable to the filing of the Company’s
Annual Report on Form 10-K (the “Form 10-K”) with the SEC regardless of whether the Company is subject
to the filing requirements thereof) after the end of each fiscal year of the Company, duplicate copies of


 


(i)a
consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and


 


(ii)consolidated
statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries for such year,


 


setting
forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with
GAAP, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without
any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized
national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position
of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and
that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances;


 





    -16-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(c)SEC
and Other Reports — promptly after their becoming available, one copy of (i) each financial statement, report, notice,
proxy statement or similar document sent by the Company or any Subsidiary to its public Securities holders generally, and (ii) each
regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus
and all amendments thereto filed by the Company or any Subsidiary with the SEC and of all press releases and other statements made available
generally by the Company or any Subsidiary to the public concerning developments that are Material;


 


(d)Notice
of Default or Event of Default — promptly, and in any event within 10 days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred
to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;


 


(e)Employee
Benefits Matters — promptly, and in any event within 10 days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes
to take with respect thereto:


 


(i)with
respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect on the date hereof;


 


(ii)the
taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan;


 


(iii)any
event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition
of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing,
would reasonably be expected to have a Material Adverse Effect; or






 




    -17-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




(iv)receipt
of notice of the imposition of a Material financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether
by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans;


 


(f)Notices
from Governmental Authority – promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company
or any Subsidiary from any Governmental Authority relating to any order, ruling, statute or other law or regulation that would reasonably
be expected to have a Material Adverse Effect;


 


(g)Resignation
or Replacement of Auditors – within 10 days following the date on which the Company’s auditors resign or the Company
elects to change auditors, as the case may be, notification thereof, together with such further information as the Required Holders may
request;


 


(h)Other
Material Developments – with reasonable promptness, any other development that results in, or would reasonably be expected
to result in, a Material Adverse Effect; and


 


(i)Requested
Information – with reasonable promptness, such other data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or relating to the ability of the Company to perform its obligations
hereunder and under the Notes as from time to time may be reasonably requested by any such Purchaser or holder of a Note.


 


Section 7.2.Officer’s
Certificate. Each set of financial statements delivered to a Purchaser or a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b)
shall be accompanied by a certificate of a Senior Financial Officer:


 


(a)Covenant
Compliance — setting forth the information from such financial statements that is required in order to establish whether the
Company was in compliance with the requirements of Section 10.6 during the quarterly or annual period covered by the financial statements
then being furnished (including with respect to each such provision that involves mathematical calculations, the information from such
financial statements that is required to perform such calculations) and detailed calculations of the maximum or minimum amount, ratio
or percentage, as the case may be, permissible under the terms of such Section, and the calculation of the amount, ratio or percentage
then in existence. In the event that the Company or any Subsidiary has made an election to measure any financial liability using fair
value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 22.2)
as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include
a reconciliation from GAAP with respect to such election;


 


(b)Event
of Default — certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to
be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning
of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review
shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default
or, if any such condition or event existed or exists (including any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto; and



 




    -18-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(c)Subsidiary
Guarantors — setting forth a list of all Subsidiaries that are Subsidiary Guarantors and certifying that each Subsidiary that
is required to be a Subsidiary Guarantor pursuant to Section 9.7 is a Subsidiary Guarantor, in each case, as of the date of such
certificate of Senior Financial Officer.


 


Section 7.3.Access.
The Company shall permit the representatives of each Purchaser and each holder of a Note that is an Institutional Investor:


 


(a)No
Default — if no Default or Event of Default then exists and is continuing, to participate in a conference call with the Company’s
officers to discuss the affairs, finances and accounts of the Company and its Subsidiaries and (with the consent of the Company, which
consent will not be unreasonably withheld) its independent public accountants, provided, that the access rights set forth in this
Section 7.3(a) may only be exercised twice per calendar year by a holder of the Notes; and


 


(b)Default
— if a Default or an Event of Default then exists and is continuing, at the expense of the Company and upon reasonable prior
notice to the Company, to access the books of account, records, reports and other papers of the Company or any Subsidiary, to make copies
and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be reasonably requested.


 


Section 7.4.Electronic
Delivery. Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates
that are required to be delivered by the Company pursuant to Sections 7.1(a), (b) or (c) and Section 7.2 shall be deemed to have
been delivered if the Company satisfies any of the following requirements with respect thereto:


 


(a)such
financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the
requirements of Section 7.2 and any other information required under Section 7.1(c) are delivered to each Purchaser and holder
of a Note by e-mail at the e-mail address set forth in such holder’s Purchaser Schedule or as communicated from time to
time in a separate writing delivered to the Company;


 


(b)the
Company shall have filed such Form 10-Q or Form 10-K, satisfying the requirements of Section 7.1(a) or Section 7.1(b),
as the case may be, with the SEC on EDGAR and shall have made such form and the related Officer’s Certificate satisfying the requirements
of Section 7.2 available on its home page on the internet, which is located at http://www.whitehorsefinance.com as of the date of
this Agreement, or shall have delivered such certificate to each holder of a Note by e-mail at the e-mail address set forth in such
holder’s Purchaser Schedule or as communicated from time to time in a separate writing delivered to the Company;



 




    -19-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(c)such
financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s)
satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are timely posted by or
on behalf of the Company on IntraLinks or on any other similar website to which each holder of Notes has free access; or


 


(d)the
Company shall have filed any of the items referred to in Section 7.1(c) with the SEC on EDGAR and shall have made such items available
on its home page on the internet or on IntraLinks or on any other similar website to which each holder of Notes has free access;


 


provided however, that in the case of any
of clauses (b), (c) or (d), the Company shall have given each holder of a Note prior written notice, which may be by e-mail,
included in the Officer’s Certificate delivered pursuant to Section 7.2 or in accordance with Section 18, of such posting or
filing in connection with each delivery, provided further, that upon request of any holder to receive paper copies of such forms,
financial statements, other information and Officer’s Certificates or to receive them by e-mail, the Company will promptly e-mail
them or deliver such paper copies, as the case may be, to such holder.


 


Section 8.Payment
and Prepayment of the Notes.


 


Section 8.1.Maturity.
As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.


 


Section 8.2.Optional
Prepayments with Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding
in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment
date with respect to such principal amount; provided, that at any time on or after March 6, 2028,
the Company may, at its option, upon notice as provided below, prepay all or any part of the Notes at 100% of the principal amount so
prepaid, together with accrued interest to the prepayment date, but without Make-Whole Amount or other premium. The Company will
give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 10 days and not more than
60 days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant
to Section 17. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes
to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3),
and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior
to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation
of such Make-Whole Amount as of the specified prepayment date.



 


 




    -20-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




Section 8.3.Allocation
of Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of
the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to
the respective unpaid principal amounts thereof not theretofore called for prepayment. All partial prepayments pursuant to Section 8.8
shall be applied only to the Notes of the holders who have accepted the offer of prepayment and shall be allocated among all such Notes
in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof and not theretofore called for prepayment.


 


Section 8.4.Maturity;
Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each
Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal
amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail
to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.


 


Section 8.5.Purchase
of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly,
any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with this Agreement and the Notes or
(b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding
upon the same terms and conditions. Any such offer shall provide each holder with sufficient information to enable it to make an informed
decision with respect to such offer, and shall remain open for at least 10 Business Days. If the holders of more than 25% of the
principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of such fact
and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give
each holder at least five Business Days from its receipt of such notice to accept such offer. The Company will promptly cancel all Notes
acquired by it or any Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.


 





    -21-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


Section 8.6.Make-Whole
Amount. The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any,
of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such
Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:


 


“Called
Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.


 


“Discounted
Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such
Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that
on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.


 


“Reinvestment
Yield” means, with respect to the Called Principal of any Note, the sum of (a) 0.35% plus (b) the yield to maturity
implied by the “Ask Yield(s)” reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may
replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities
(“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.
If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield
to maturity will be determined by (i) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between the “Ask Yields” Reported for the applicable most recently
issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining
Average Life and (2) closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number
of decimal places as appears in the interest rate of the applicable Note.


 


If such yields are
not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment
Yield” means, with respect to the Called Principal of any Note, the sum of (x) 0.35% plus (y) the yield to maturity
implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the
second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or
any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining
Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant
maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity
so reported with the term closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number
of decimal places as appears in the interest rate of the applicable Note.


 





    -22-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


“Remaining
Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal
into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year comprised of twelve 30-day
months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.


 


“Remaining
Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were
made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to
be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued
to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.


 


“Settlement
Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.


 


Section 8.7.Payments
Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, (x) except
as set forth in clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on
the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next
succeeding Business Day; and (y) any payment of principal of, Make-Whole Amount on any Note (including principal due on the
Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall
include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.


 


Section
8.8.Change in Control.


 


(a)Notice
of Change in Control.  The Company (i) may, following the occurrence of any Control Event, and (ii) will, within thirty Business
Days after any Responsible Officer has knowledge of the occurrence of any Change in Control, give written notice of such Change in Control
or Control Event to each holder of Notes. Such notice shall contain and constitute an offer to prepay Notes as described in subparagraph
(b) of this Section 8.8 and shall be accompanied by the certificate described in subparagraph (e) of this Section 8.8.


  





    -23-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


(b)Offer
to Prepay Notes. The offer to prepay Notes contemplated by subparagraph (a) of this Section 8.8 shall be an offer to prepay, in accordance
with and subject to this Section 8.8, all, but not less than all, the Notes held by each holder (in this case only, “holder”
in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on
a date specified in such offer (the “Section 8.8 Proposed Prepayment Date”). Such date shall be not less than 30 days
and not more than 60 days after the date of such offer (if the Section 8.8 Proposed Prepayment Date shall not be specified in such
offer, the Section 8.8 Proposed Prepayment Date shall be the first Business Day after the 45th day after the date of such offer).


 





(c)Acceptance/Rejection.
A holder of Notes may accept the offer to prepay made pursuant to this Section 8.8 by causing a notice of such acceptance to be delivered
to the Company not later than 15 Business Days after receipt by such holder of the most recent offer of prepayment. A failure by a holder of Notes to respond to an
offer to prepay made pursuant to this Section 8.8 shall be deemed to constitute rejection of such offer by such holder.


 


(d)Prepayment.
Prepayment of the Notes to be prepaid pursuant to this Section 8.8 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to, but excluding, the date of prepayment, but without Make-Whole Amount or other premium..


 


(e)Officer’s
Certificate.  Each offer to prepay the Notes pursuant to this Section 8.8 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying: (i) the Section 8.8 Proposed Prepayment Date; (ii) that
such offer is made pursuant to this Section 8.8; (iii) the principal amount of each Note offered to be prepaid; (iv) the interest
that would be due on each Note offered to be prepaid, accrued to, but excluding, the Section 8.8 Proposed Prepayment Date; (v) that
the conditions of this Section 8.8 have been fulfilled; and (vi) in reasonable detail, the nature and date of the Change in Control
or Control Event, as the case may be.


 


Section 9.Affirmative
Covenants.


 


From
the date of this Agreement until the Closing and thereafter, so long as any of the Notes are outstanding, the Company covenants that:


 


Section 9.1.Compliance
with Laws. Without limiting Section 10.4, the Company will, and will cause each of its Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which each of them is subject (including ERISA, Environmental Laws, the USA PATRIOT
Act and the other laws and regulations that are referred to in Section 5.16) and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or
to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.



  




    -24-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




  


Section 9.2.Insurance.
The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with
respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto)
as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.





Section 9.3.Maintenance
of Properties. The Company will, and will cause each of its Subsidiaries to, maintain and keep, or cause to be maintained and kept,
their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that this Section 9.3 shall not prevent the Company
or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in
the conduct of its business and the Company has concluded that such discontinuance would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


Section 9.4.Payment
of Taxes and Claims. The Company will, and will cause each of its Subsidiaries to, file all federal and state and other Material
tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and
all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises,
to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due
and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the
Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company
or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or
(ii) the nonpayment of all such taxes, assessments, charges, levies and claims would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


Section 9.5.Corporate
Existence, Etc. Subject to Section 10.2, the Company will at all times preserve and keep its corporate existence in full force
and effect. Subject to Section 10.2, the Company will at all times preserve and keep in full force and effect the corporate existence
of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of the Company
and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force
and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a Material Adverse Effect.


 


Section 9.6.Books
and Records. The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity
with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such
Subsidiary, as the case may be. The Company will, and will cause each of its Subsidiaries to, keep books, records and accounts which,
in reasonable detail, accurately reflect all transactions and dispositions of assets. The Company and its Subsidiaries have devised a
system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts
accurately reflect all transactions and dispositions of assets and the Company will, and will cause each of its Subsidiaries to, continue
to maintain such system.



  




    -25-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 





Section 9.7.Subsidiary Guarantors.
(a) Except for any existing Indebtedness of the Company under the Secured Credit Facility and any Replacement Facilities, the
Company will cause each of its Subsidiaries that guarantees or otherwise becomes liable at any time, whether as a borrower or an
additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility for which the Company
is a borrower or guarantor to concurrently therewith:


 


(i)enter
into an agreement in form and substance satisfactory to the Required Holders providing for the guaranty by such Subsidiary, on a joint
and several basis with all other such Subsidiaries, of (x) the prompt payment in full when due of all amounts payable by the Company
pursuant to the Notes (whether for principal, interest, Make-Whole Amount or otherwise) and this Agreement, including all indemnities,
fees and expenses payable by the Company thereunder and (y) the prompt, full and faithful performance, observance and discharge
by the Company of each and every covenant, agreement, undertaking and provision required pursuant to the Notes or this Agreement to be
performed, observed or discharged by it (a “Subsidiary Guaranty”); and


 


(ii)deliver
the following to each holder of a Note:


 


(A)an
executed counterpart of such Subsidiary Guaranty or a joinder thereto;


 


(B)a
certificate signed by an authorized responsible officer of such Subsidiary containing representations and warranties on behalf of such
Subsidiary to the same effect, mutatis mutandis, as those contained in Sections 5.1, 5.2, 5.6, 5.7 and 5.19(b) of this Agreement
(but with respect to such Subsidiary and such Subsidiary Guaranty rather than the Company);


 


(C)all
documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and, where applicable,
good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and
delivery of such Subsidiary Guaranty and the performance by such Subsidiary of its obligations thereunder; and


 


(D)upon
request of the Required Holders, a customary opinion of counsel reasonably satisfactory to the Required Holders covering such matters
relating to such Subsidiary and such Subsidiary Guaranty as the Required Holders may reasonably request.


 


(b)       At
the election of the Company and by written notice to each holder of Notes, any Subsidiary Guarantor that has provided a Subsidiary Guaranty
under subparagraph (a) of this Section 9.7 may be discharged from all of its obligations and liabilities under its Subsidiary
Guaranty and shall be automatically released from its obligations thereunder without the need for the execution or delivery of any other
document by the holders, provided that (i) if such Subsidiary Guarantor is a guarantor or is otherwise liable for or in respect
of any Material Credit Facility, then such Subsidiary Guarantor has been released and discharged (or will be released and discharged
concurrently with the release of such Subsidiary Guarantor under its Subsidiary Guaranty) under such Material Credit Facility, (ii) at
the time of, and after giving effect to, such release and discharge, no Default or Event of Default shall be existing, (iii) no
amount is then due and payable under such Subsidiary Guaranty, (iv) if in
connection with such Subsidiary Guarantor being released and discharged under any Material Credit Facility, any fee or other form of consideration
is given to any holder of Indebtedness under such Material Credit Facility for such release, the holders of the Notes shall receive equivalent
consideration substantially concurrently therewith and (v) each holder shall have received a certificate of a Responsible Officer
certifying as to the matters set forth in clauses (i) through (iv).


 








    -26-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


 


Section 9.8.Rating
Confirmation. The Company covenants and agrees that, at its sole cost and expense, it shall cause to be maintained at all times a
Rating of the Notes from at least one NRSRO that indicates that it will monitor the rating on an ongoing basis. No later than (i) June
30 of each year (beginning June 30, 2022) and (ii) promptly after any change in the Rating, the Company further covenants and agrees
it shall provide a notice with evidence of such Rating (or any change thereto) to each of the holders of the Notes sent in the manner
provided in Section 18 with respect to all then current Ratings.


 


Section 9.9.Status
of RIC and BDC. The Company shall at all times, subject to applicable grace periods set forth in the Code, maintain its status as
a RIC, and as a “business development company” under the Investment Company Act.


 


Section 9.10.Priority
of Obligations. The Company will ensure that its payment obligations under this Agreement and the Notes, and the payment obligations
of any Subsidiary Guarantor under its Subsidiary Guaranty, will at all times rank at least pari passu, without preference or priority,
with all other unsecured and unsubordinated Indebtedness of the Company and such Subsidiary Guarantor, as applicable.


Notwithstanding
the terms of Section 11, it will not be a Default or an Event of Default if the Company fails to comply with any provision of Section 9
on or after the date of this Agreement and prior to the Closing; however, if such a failure occurs, then any of the Purchasers may elect
not to purchase the Notes on the date of Closing that is specified in Section 3.


 


Section 10.Negative
Covenants.


 


From
the date of this Agreement until the Closing and thereafter, so long as any of the Notes are outstanding, the Company covenants that:


 


Section 10.1.Transactions
with Affiliates. The Company will not, and will not permit any Subsidiary to, enter into directly or indirectly any transaction or
group of related transactions (including the purchase, lease, sale or exchange of properties of any kind or the rendering of any service)
with any Affiliate (other than the Company or another Subsidiary), except (i) in the ordinary course and pursuant to the reasonable
requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company
or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate, (ii) transactions
otherwise permitted under the Agreement, (iii) transactions permitted under the Secured Credit Facility or any Replacement Facilities, (iv) transactions
with Affiliates that are set forth on Schedule 10.1, (v) a transaction that has been (A) approved by a majority of the
independent directors of the Board of Directors of the Company and (B) consented to by the Required Holders (such consent not to
be unreasonably withheld or delayed), (vi) any co-investment with Affiliates of the Company or the External Manager that is permitted
under any established SEC guidance, no-action letter or order or exemptive relief order or (vii) transactions with WHF STRS Ohio
Senior Loan Fund LLC in the ordinary course.



 







    -27-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


Section 10.2.Merger,
Consolidation, Etc. The Company will not, and will not permit any Subsidiary
Guarantor to, consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets
in a single transaction or series of transactions to any Person unless:


 


(a)in
the case of any such transaction involving the Company, the successor formed by such consolidation or the survivor of such merger
or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Company as an entirety, as
the case may be, shall be a solvent corporation or limited liability company organized and existing under the laws of the United States
or any state thereof (including the District of Columbia), and, if the Company is not such corporation or limited liability company,
(i) such corporation or limited liability company shall have executed and delivered to each holder of any Notes its assumption of
the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes and (ii) such corporation
or limited liability company shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized independent
counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof;


 


(b)in
the case of any such transaction involving a Subsidiary Guarantor, the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of such Subsidiary Guarantor
as an entirety, as the case may be, shall be (1) the Company, such Subsidiary Guarantor or another Subsidiary Guarantor; or (2) a
solvent corporation or limited liability company (other than the Company or another Subsidiary Guarantor) that is organized and existing
under the laws of the United States or any state thereof (including the District of Columbia) and, if such Subsidiary Guarantor is not
such corporation or limited liability company, (A) such corporation or limited liability company shall have executed and delivered
to each holder of Notes its assumption of the due and punctual performance and observance of each covenant and condition of the Subsidiary
Guaranty of such Subsidiary Guarantor and (B) the Company shall have caused to be delivered to each holder of Notes an opinion of
nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect
that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms
hereof;



 










    -28-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 





(c)each Subsidiary Guarantor
under any Subsidiary Guaranty that is outstanding at the time such transaction or each transaction in such a series of transactions occurs
reaffirms its obligations under such Subsidiary Guaranty in writing at such time pursuant to documentation that is reasonably acceptable
to the Required Holders; and


 


(d)immediately before and immediately
after giving effect to such transaction or each transaction in any such series of transactions, no Default or Event of Default shall have
occurred and be continuing.


 


No
such conveyance, transfer or lease of substantially all of the assets of the Company or any Subsidiary Guarantor shall have the effect
of releasing the Company or such Subsidiary Guarantor, as the case may be, or any successor corporation or limited liability company that
shall theretofore have become such in the manner prescribed in this Section 10.2, from its liability under (x) this Agreement
or the Notes (in the case of the Company) or (y) the Subsidiary Guaranty (in the case of any Subsidiary Guarantor), unless, in the
case of the conveyance, transfer or lease of substantially all of the assets of a Subsidiary Guarantor, such Subsidiary Guarantor is released
from its Subsidiary Guaranty in accordance with Section 9.7(b) in connection with or immediately following such conveyance, transfer
or lease.


 


Section 10.3.Line
of Business. The Company will not and will not permit any Subsidiary to engage in any business if, as a result, the general nature
of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from
the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement
as described in the Disclosure Documents.


 


Section 10.4.Economic
Sanctions, Etc. The Company will not, and will not permit any Controlled Entity to (a) become (including by virtue of being
owned or controlled by a Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or
engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any
Person if such investment, dealing or transaction (i) would cause any Purchaser or holder or any affiliate of such Purchaser or
holder to be in violation of, or subject to sanctions under, any law or regulation applicable to such holder, or (ii) is prohibited
by or subject to sanctions under any U.S. Economic Sanctions Laws.


 


Section 10.5.Liens.
The Company will not and will not permit any Subsidiary Guarantor to directly or indirectly create, incur, assume or permit to exist
(upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation,
any document or instrument in respect of goods or accounts receivable) of the Company or any Subsidiary Guarantor, whether now owned
or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits,
except (a) Liens which secure obligations under the Secured Credit Facility or any Replacement Facilities, (b) Liens permitted under
the Secured Credit Facility or any Replacement Facilities, (c) Liens on Equity Interests in any SBIC Subsidiary created in favor of the
SBA or its designee, (d) leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not
(i) interfere in any material respect with the business of the Company and its Subsidiaries or (ii) secure any Indebtedness, or (e) other
Liens which rank at least pari passu with all such Liens securing obligations under the Secured Credit Facility or any Replacement
Facilities, provided that, for the avoidance of doubt, such other Liens under this clause (f), or any Indebtedness secured thereby,
shall not include, or be subject to, any “first in/last out” or other priority or preference in the right of payment.


 







    -29-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


Section 10.6.Financial
Covenants.


 


(a)Minimum
Shareholders’ Equity. The Company will not permit Shareholders’ Equity at the last day of any fiscal quarter of the Company
to be less than $199,650,000, plus 50% of the net proceeds of the sale of Equity Interests by the Company after December 6, 2021
(other than proceeds of sales of Equity Interests by and among the Company and its Subsidiaries).


 


(b)Asset
Coverage Ratio. The Company will not permit the Asset Coverage Ratio (i) as of December 6, 2021, immediately after
giving effect to the sale of the Notes or (ii) as of the last Business Day of any fiscal quarter of the Company to be less than the Investment
Company Act Asset Coverage.


 


(c)Debt
to Equity Ratio. The Company will not permit the Debt to Equity Ratio, immediately after giving pro forma effect to the creation,
issuance, assumption, guarantee or incurrence of Indebtedness and the application of the proceeds thereof, to be greater than 1.6 to
1.0.


 


(d)Maximum
Secured Debt. The Company will not permit the Secured Debt Ratio at any time to exceed 0.75 to 1.00.


 


Section 10.7.Most
Favored Lender Status. (a) If the Company (i) is as of the date of this Agreement a party to a credit facility, loan agreement
or other like financial instrument under which the Company may incur Unsecured Debt in excess of $25,000,000 (an “Existing Credit
Facility”), or (ii) after the date of this Agreement enters into any amendment or other modification of any Existing Credit
Facility (an “Amended Credit Facility”) or (iii) enters into any new credit facility, whether with commercial
banks or other Institutional Investors pursuant to a credit agreement, note purchase agreement, convertible note indenture or debenture,
or other like agreement after the date of this Agreement under which the Company may incur Unsecured Debt in excess of $25,000,000 (in
any such case, a “New Credit Facility”), that in any such case has on the date of this Agreement, or after the date
of this Agreement results in, one or more additional or more restrictive MFL Provisions (whether constituting a financial covenant
or an event of default) imposed on the Company than those contained in this Agreement being contained in any such Existing Credit Facility,
Amended Credit Facility or New Credit Facility, as the case may be (such additional or more restrictive MFL Provision or event of
default, as the case may be, together with all definitions relating thereto, in the case of an Existing Credit Facility, including as
amended by an Amended Credit Facility, the “Existing Facility Additional Provision(s)” and in the case of a New Credit
Facility, the “New Facility Additional Provision(s)”), then the terms of this Agreement, without any further action on the part of the Company
or any of the holders of the Notes, will unconditionally be deemed on the effective date of such Amended Credit Facility or New Credit
Facility, as the case may be, or the date hereof in the case of an Existing Credit Facility to be automatically amended to include the
Existing Facility Additional Provision(s) or such New Facility Additional Provision(s), as the case may be, and imposed on the same party
hereunder that is subject to such provision under the Existing Credit Facility, the Amended Credit Facility, or the New Credit Facility,
as applicable, and any event of default in respect of any such additional or more restrictive MFL Provision(s) so included herein
shall be deemed to be an Event of Default under Section 11(c) (after giving effect to any grace or cure provisions under such Existing
Facility Additional Provision(s) or such New Facility Additional Provision(s) or event of default), subject to all applicable terms and
provisions of this Agreement, including, without limitation, all rights and remedies exercisable by the holders of the Notes hereunder;
provided that, for the avoidance of doubt, any conversion feature in any New Credit Facility pursuant to which the principal amount
of, or any premium and/or accrued but unpaid interest on, any debt security convertible by its terms into capital stock of the Company
shall not be deemed to be a New Facility Additional Provision for purposes of this Section 10.7.



 







    -30-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(b)If
after the date of execution of any Amended Credit Facility or a New Credit Facility, as the case may be, any one or more of the Existing
Facility Additional Provision(s) or the New Facility Additional Provision(s) is excluded, terminated, loosened, tightened, amended or
otherwise modified under the corresponding Amended Credit Facility or New Credit Facility, as applicable, then and in such event any
such Existing Facility Additional Provision(s) or New Facility Additional Provision(s) theretofore included in this Agreement pursuant
to the requirements of this Section 10.7 shall then and thereupon automatically and without any further action by any Person be
so excluded, terminated, loosened, tightened or otherwise amended or modified under this Section 10.7 to the same extent as the
exclusion, termination, loosening, tightening of other amendment or modification thereof under the Amended Credit Facility or New Credit
Facility; provided that if a Default or Event of Default shall have occurred and be continuing by reason of the Existing Facility
Additional Provision(s) or the New Facility Additional Provision(s) at the time any such Existing Facility Additional Provision(s) or
New Facility Additional Provision(s) is or are to be so excluded, terminated, loosened, tightened, amended or modified under this Section 10.7,
the prior written consent thereto of the Required Holders shall be required as a condition to the exclusion, termination, loosening,
tightening or other amendment or modification of any such Existing Facility Additional Provision(s) or New Facility Additional Provision(s),
as the case may be; and provided, further, that in any and all events, the financial covenant(s) and related definitions or any
event of default constituting any financial covenant and Events of Default contained in this Agreement as in effect on the date of this
Agreement shall not in any event be deemed or construed to be excluded, terminated, loosened, relaxed, amended or otherwise modified
by operation of the terms of this Section 10.7.


 


(c)The
Company shall from time to time, upon request by the Required Holders, promptly execute and deliver at its expense (including, without
limitation, the reasonable and documented fees and expenses of one counsel for the holders of the Notes, taken as a whole) an amendment
to this Agreement in form and substance reasonably satisfactory to the Required Holders evidencing that, pursuant to this Section 10.7,
this Agreement then and thereafter includes, excludes, amends or otherwise modifies any Existing Facility Additional Provision(s) or
New Facility Additional Provision(s), as the case may be; provided that the execution and delivery of such amendment shall not
be a precondition to the effectiveness of such amendment.



 







    -31-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


(d)The Company agrees that it will not,
nor will it permit any Subsidiary or Affiliate to, directly or indirectly, pay or cause to be paid any consideration or remuneration,
whether by way of supplemental or additional interest, fee or otherwise, to any creditor of the Company, any co-obligor or any Subsidiary
as consideration for or as an inducement to the entering into by any such creditor of any amendment, waiver or other modification to any
Existing Credit Facility or New Credit Facility, as the case may be, the effect of which amendment, waiver or other modification is to
exclude, terminate, loosen, tighten or otherwise amend or modify any Existing Facility Additional Provision(s) or New Facility Additional
Provision(s), unless such consideration or remuneration is concurrently paid, on the same terms, ratably to the holders of all of the
Notes then outstanding.


 


Notwithstanding the terms of Section 11, it will
not be a Default or an Event of Default if the Company fails to comply with any provision of Section 10 before or after giving effect
to the issuance of the Notes on a pro forma basis; however, if such a failure occurs, then any of the Purchasers may elect not
to purchase the Notes on the date of Closing that is specified in Section 3.


 


Section 11.Events
of Default.


 


An “Event of Default”
shall exist if any of the following conditions or events shall occur and be continuing:


 


(a)the Company defaults in the
payment of any principal on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or


 


(b)the Company defaults in the
payment of any interest or Make-Whole Amount, if any, on any Note for more than five Business Days after the same becomes due and
payable; or


 


(c)the Company defaults in the
performance of or compliance with any term contained in Section 7.1(d) or Section 10.6(a), (b), (c) or (d); or


 


(d)the Company defaults in the
performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) and
such default is not remedied within 45 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default
and (ii) the Company receiving written notice of such default from holders of at least 25% of the outstanding principal amount of
the Notes (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d));
or


 


(e)(i) any representation
or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or any writing furnished
in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on
the date as of which made, or (ii) any representation or warranty made in writing by or on behalf of any Subsidiary Guarantor or
by any officer of such Subsidiary Guarantor in any Subsidiary Guaranty or any writing furnished in connection with such Subsidiary Guaranty
proves to have been false or incorrect in any material respect on the date as of which made; or



 










    -32-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(f)(i) the Company or any
Significant Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole
amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least $25,000,000 (or its equivalent
in the relevant currency of payment) beyond any period of grace provided with respect thereto, or (ii) the Company or any Significant
Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding
principal amount of at least $25,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become,
or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as
a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), the Company or any Significant Subsidiary has become obligated to purchase
or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal
amount of at least $25,000,000 (or its equivalent in the relevant currency of payment); in each case other than a default, event or condition
that relates to a Change in Control and with respect thereto Section 8.8 applies; provided that this clause (f) shall not apply
to (1) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
or (2) convertible debt that becomes due as a result of a conversion or redemption event, other than as a result of an “event of
default” (as defined in the documents governing such convertible debt); or


 


(g)the Company or any Significant
Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files,
or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition
in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or


 


(h)a court or other Governmental
Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Significant Subsidiaries,
a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Significant
Subsidiaries, or any such petition shall be filed against the Company or any of its Significant Subsidiaries and such petition shall not
be dismissed within 60 days; or


  







    -33-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(i)any event that occurs with
respect to the Company or any Significant Subsidiary which under the laws of any jurisdiction is analogous to any of the events described
in Section 11(g) or Section 11(h), provided that the applicable grace period, if any, which shall apply shall be the one applicable to
the relevant proceeding which most closely corresponds to the proceeding described in Section 11(g) or Section 11(h); or


 


(j)one or more final judgments
or orders for the payment of money aggregating in excess of $25,000,000 (or its equivalent in the relevant currency of payment) (to the
extent not covered by independent third party insurance or by an enforceable indemnity), including any such final order enforcing a binding
arbitration decision, are rendered against one or more of the Company and its Significant Subsidiaries and which judgments are not, within
60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of
such stay; or


 


(k)if (i) any Plan shall
fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any
Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042
to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) there is any “amount of unfunded benefit liabilities” (within the
meaning of section 4001(a)(18) of ERISA) under one or more Plans, determined in accordance with Title IV of ERISA, (iv) the
aggregate present value of accrued benefit liabilities under all funded Non-U.S. Plans exceeds the aggregate current value of the
assets of such Non-U.S. Plans allocable to such liabilities, (v) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (vi) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, (vii) the
Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in
a manner that would increase the liability of the Company or any Subsidiary thereunder, (viii) the Company or any Subsidiary fails
to administer or maintain a Non-U.S. Plan in compliance with the requirements of any and all applicable laws, statutes, rules, regulations
or court orders or any Non-U.S. Plan is involuntarily terminated or wound up, or (ix) the Company or any Subsidiary becomes subject
to the imposition of a financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity
or otherwise) with respect to one or more Non-U.S. Plans; and any such event or events described in clauses (i) through
(ix) above, either individually or together with any other such event or events, would reasonably be expected to have a Material
Adverse Effect. As used in this Section 11(k), the terms “employee
benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms
in section 3 of ERISA; or



 










    -34-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(l)any Subsidiary Guaranty shall
cease to be in full force and effect in any Material respect, any Subsidiary Guarantor or any Person acting on behalf of any Subsidiary
Guarantor shall contest in any manner the validity, binding nature or enforceability of any Subsidiary Guaranty, or the obligations of
any Subsidiary Guarantor under any Subsidiary Guaranty are not or cease to be legal, valid, binding and enforceable in accordance with
the terms of such Subsidiary Guaranty.


 


(m)the External Manager ceases
to be the external manager of the Company.


 


Section 12.Remedies
on Default, Etc.


  


Section 12.1.Acceleration.
(a) If an Event of Default with respect to the Company described in Section 11(g), (h) or (i) (other than an Event of Default
described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such
clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately
due and payable.


 


(b)If any other Event of Default has occurred
and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes
then outstanding to be immediately due and payable.


 


(c)If any Event of Default described in
Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event
of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be
immediately due and payable.


 


Upon any Notes becoming due
and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid
principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including interest accrued thereon at the Default
Rate) and (y) the Make-Whole Amount determined in respect of such principal amount, shall all be immediately due and payable, in each
and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event
that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation
of such right under such circumstances.


 


Section 12.2.Other Remedies.
If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared
immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce
the rights of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained herein or in any Note or Subsidiary Guaranty, or for an injunction
against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law
or otherwise.



 







    -35-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


Section 12.3.Rescission. At
any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written
notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest
on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason
of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable
law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid
any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17,
and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent
thereon.


 


Section 12.4.No Waivers or Election
of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power
or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or
remedy conferred by this Agreement, any Subsidiary Guaranty or any Note upon any holder thereof shall be exclusive of any other right,
power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting
the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12,
including reasonable attorneys’ fees, expenses and disbursements.


 


Section 13.Registration;
Exchange; Substitution of Notes.


 


Section 13.1.Registration of
Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of
Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of
one or more Notes shall be registered in such register. If any holder of one or more Notes is a nominee, then (a) the name and address
of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at
any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant
to this Agreement. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall
be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly after request therefor,
a complete and correct copy of the names and addresses of all registered holders of Notes.


 


Section 13.2.Transfer and
Exchange of Notes.





 







    -36-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


(a) Subject to Section 13.2(b), any registered
holder of a Note or a Purchaser (an “Assigning Party”) may assign to one or more assignees (other than a Competitor)
(an “Assignee”) all or a portion of its rights and obligations under its Note and/or under this Agreement.


 


(b)Any such assignment or transfer shall
be subject to the following conditions: (i) the Assigning Party shall deliver to the Company a written instrument of transfer duly
executed by the Assigning Party or such Assigning Party’s attorney duly authorized in writing and accompanied by the relevant name,
address and other information for notices of each transferee of such Note or part thereof; (ii) the Assignee shall have made the
representations set forth in Section 6 to the Company as to itself; provided, however, that if disclosure is required by the Purchaser
under clause (c), (d), (e) or (g) of Section 6.2, no transfer of Notes shall be permitted or effective except with the prior written consent
of the Company (which consent shall not be unreasonably withheld taking in to account the specifics of the applicable disclosure) that
the transfer will not involve any non-exempt prohibited transaction that is described in section 406 of ERISA or sections 4975(c)(1)(A)
through (D) of the Code; (iii) an exemption from registration of the Notes under the Securities Act is available; and (iv) if
requested by the Company, the Assigning Party shall have delivered to the Company such certifications or other evidence to determine that
such assignment or transfer is being made in compliance with the Securities Act and applicable state securities laws, in each case at
the sole expense of the Assigning Party.


 


(c)Upon surrender of any Note to the Company
at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer
or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed
by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name,
address and other information for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1. Each such
new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date
of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of
less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes,
one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name
of its nominee), shall be deemed to have made the representation set forth in Section 6.2.



 


Section 13.3.Replacement of Notes.
Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of
evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence
shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and


 







    -37-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


(a)in the case of loss, theft
or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original
Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s
own unsecured agreement of indemnity shall be deemed to be satisfactory), or


 


(b)in the case of mutilation,
upon surrender and cancellation thereof,


 


within 10 Business Days thereafter, the Company
at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.


 


Section 14.Payments
on Notes.


 


Section 14.1.Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes
shall be made in New York, New York at the principal office of JPMorgan in such jurisdiction. The Company may at any time, by
notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal
office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.


 


Section 14.2.Payment by Wire Transfer.
So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or
in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest
and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s
name in the Purchaser Schedule, or by such other method or at such other address as such Purchaser shall have from time to time specified
to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any
Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal
executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or
other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount
of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2
to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and
that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.




 







    -38-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 








 


Section 14.3.Withholding and Tax
Information. The Company shall be entitled to deduct and withhold from amounts payable with respect to Notes such amounts as
the Company may be required to deduct and withhold under the Code or any provision of applicable state, local or foreign tax law. To the
extent that amounts are so withheld and paid over to the appropriate authority by the Company on behalf of a Purchaser, such withheld
amounts shall be treated for all purposes as having been paid to the Purchaser in respect of which such deduction and withholding was
made by the Company. By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete
and deliver to the Company, or to such other Person as may be reasonably requested by the Company, an appropriate, properly executed IRS
Form W-9, W-8BEN (for individuals), W-8BEN-E (for entities) or other applicable IRS forms and from time to time (a) any forms, documents
or certifications as may be reasonably required for the Company to satisfy any information reporting or withholding tax obligations with
respect to any payments under this Agreement, (b) in the case of any such holder that is a United States Person, such holder’s
United States tax identification number or other Forms reasonably requested by the Company necessary to establish such holder’s
status as a United States Person under FATCA and as may otherwise be necessary for the Company to comply with its obligations under FATCA
and (c) in the case of any such holder that is not a United States Person, such documentation prescribed by applicable law (including
as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for the Company to comply
with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to
determine the amount (if any) to deduct and withhold from any such payment made to such holder. Nothing in this Section 14.3 shall
require any holder to provide information that is confidential or proprietary to such holder unless the Company is required to obtain
such information under FATCA and, in such event, the Company shall treat any such information it receives as confidential. Except as otherwise
required by applicable law, the Company agrees that it will not withhold from any applicable payment to be made to a holder of a Note
that is not a United States Person any tax so long as such holder shall have delivered to the Company (in such number of copies as shall
be reasonably requested) on or about the date on which such holder becomes a holder under this Agreement (and from time to time thereafter
upon the reasonable request of the Company), executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, as well as the applicable
 “U.S. Tax Compliance Certificate”, in both cases correctly completed and executed.


 


Section 15.Expenses,
Etc.


 


Section 15.1.Transaction
Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel)
incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect
of this Agreement, any Subsidiary Guaranty or the Notes (whether or not such amendment, waiver or consent becomes effective), including:
(a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under
this Agreement, any Subsidiary Guaranty or the Notes or in responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement, any Subsidiary Guaranty or the Notes, or by reason of being a holder of any Note, (b) the
costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company
or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes and
any Subsidiary Guaranty and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related
documents and financial information with the SVO; provided, that such costs and expenses under this clause (c) shall not exceed
$3,500; provided, further, that the aggregate amount of attorneys’ fees of a special counsel to the Purchasers and, if reasonably
required by the Required Holders, local or other counsel incurred in connection with the execution and delivery of this Agreement and
the Closing of the Notes and to be paid by the Company shall not exceed $100,000. If
required by the NAIC, the Company shall obtain and maintain at its own cost and expense a Legal Entity Identifier (LEI).




 







    -39-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


The Company will pay, and
will save each Purchaser and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses,
if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the
Notes), (ii) any and all wire transfer fees that any bank or other financial institution deducts from any payment under such Note
to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note and
(iii) any judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees
and expenses) or obligation resulting from the consummation of the transactions contemplated hereby, including the use of the proceeds
of the Notes by the Company.


 


Section 15.2.Certain Taxes.
The Company agrees to pay all stamp, documentary or similar taxes or fees which may be payable in respect of the execution and delivery
or the enforcement of this Agreement or any Subsidiary Guaranty or the execution and delivery (but not the transfer) or the enforcement
of any of the Notes in the United States or any other jurisdiction where the Company or any Subsidiary Guarantor has assets or of any
amendment of, or waiver or consent under or with respect to, this Agreement or any Subsidiary Guaranty or of any of the Notes, and to
pay any value added tax due and payable in respect of reimbursement of costs and expenses by the Company pursuant to this Section 15,
and will save each holder of a Note to the extent permitted by applicable law harmless against any loss or liability resulting from nonpayment
or delay in payment of any such tax or fee required to be paid by the Company hereunder.


 


Section 15.3.Survival.
The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, any Subsidiary Guaranty or the Notes, and the termination of this Agreement.



 


Section 16.Survival
of Representations and Warranties; Entire Agreement.


 


All representations and warranties
contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of
any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note. All statements contained
in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations
and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement, the Notes and any Subsidiary Guaranties
embody the entire agreement and understanding between each Purchaser and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.



 




    -40-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


Section 17.Amendment
and Waiver.


 


Section 17.1.Requirements.
This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively
or prospectively), only with the written consent of the Company and the Required Holders, except that:


 


(a)no amendment or waiver of
any of Sections 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless
consented to by such Purchaser in writing; and


 


(b)no amendment or waiver may,
without the written consent of each Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12
relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or
change the time of payment or method of computation of (x) interest on the Notes or (y) the Make-Whole Amount, (ii) change
the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver or the principal
amount of the Notes that the Purchasers are to purchase pursuant to Section 2 upon the satisfaction of the conditions to Closing
that appear in Section 4, or (iii) amend any of Sections 8 (except as set forth in the second sentence of Section 8.2),
11(a), 11(b), 12, 17 or 20.



 


Section 17.2.Solicitation of Holders
of Notes.


 


(a)Solicitation.  The Company will
provide each Purchaser and each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required,
to enable such Purchaser and such holder to make an informed and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes or any Subsidiary Guaranty. The Company will deliver executed or true
and correct copies of each amendment, waiver or consent effected pursuant
to this Section 17 or any Subsidiary Guaranty to each Purchaser and each holder of a Note promptly following the date on which it
is executed and delivered by, or receives the consent or approval of, the requisite Purchasers and holders of Notes.


 


(b)Payment.  The Company will not
directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise,
or grant any security or provide other credit support, to any Purchaser or holder of a Note as consideration for or as an inducement to
the entering into by such Purchaser or holder of any waiver or amendment of any of the terms and provisions hereof or of any Subsidiary
Guaranty or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently
provided, on the same terms, ratably to each Purchaser and holder of a Note even if such holder did not consent to such waiver or amendment.



 







    -41-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


(c)Consent in Contemplation of Transfer.
Any consent given pursuant to this Section 17 or any Subsidiary Guaranty by a holder of a Note that has transferred or has agreed
to transfer its Note to (i) the Company, (ii) any Subsidiary or any other Affiliate or (iii) any other Person in connection
with, or in anticipation of, such other Person acquiring, making a tender offer for or merging with the Company and/or any of its Affiliates,
in each case in connection with such consent, shall be void and of no force or effect except solely as to such holder, and any amendments
effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such
consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of
no force or effect except solely as to such holder.


 


Section 17.3.Binding Effect, Etc.
Any amendment or waiver consented to as provided in this Section 17 or any Subsidiary Guaranty applies equally to all Purchasers
and holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between
the Company and any Purchaser or holder of a Note and no delay in exercising any rights hereunder or under any Note or Subsidiary Guaranty
shall operate as a waiver of any rights of any Purchaser or holder of such Note.


 


Section 17.4.Notes Held by Company,
Etc.  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount
of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Subsidiary Guaranty
or the Notes, or have directed the taking of any action provided herein or in any Subsidiary Guaranty or the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly
owned by the Company or any of its Affiliates shall be deemed not to be outstanding.


 


Section 18.Notices.


 


Except to the extent otherwise
provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy
if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), (c) by an internationally
recognized overnight delivery service (charges prepaid) or (d) by e-mail; provided that upon request of any holder to receive paper
copies of such notices or communications, the Company will promptly deliver such paper copies to such holder). Any such notice must be
sent:


 


(i)if to any Purchaser or its
nominee, to such Purchaser or nominee at the address specified for such communications in the Purchaser Schedule, or at such other address
as such Purchaser or nominee shall have specified to the Company in writing,




 













    -42-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    







 


(ii)if to any other holder of
any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or


 


(iii)if to the Company, to the
Company at its address set forth at the beginning hereof to the attention of the Chief Financial Officer (Investor Relations), or at such
other address as the Company shall have specified to the holder of each Note in writing.


 


Notices under this Section 18 will be deemed
given only when actually received.


 


Section 19.Reproduction
of Documents.


 


This Agreement and all documents
relating thereto, including (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by
any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously
or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or
other similar process and such Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular
course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent
that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.


 


Section 20.Confidential
Information.


 


For the purposes of this Section 20,
“Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary
in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the
Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to
such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure
by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that
are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser and
shall not use the Confidential Information for purposes of trading in the common stock of the Company listed on the Nasdaq Global Select
Market; provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees,
agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented
by its Notes), (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with this Section 20, (iii) any other holder of any Note, (iv) any Institutional
Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by this Section 20), (v) any Person from which it
offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information
to be bound by this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the
NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information
about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary
or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response
to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this
Agreement or any Subsidiary Guaranty. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by
and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement
with the Company embodying this Section 20.




 







    -43-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

  


In the event that as a condition
to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or
otherwise pursuant to this Agreement, any Purchaser or holder of a Note
is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace
or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser
or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.


 


Section 21.Substitution
of Purchaser.


 


Each Purchaser shall have
the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute
Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which
notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement
to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than
in this Section 21), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser. In the event that
such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original
Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference
to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed
to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the
rights of an original holder of the Notes under this Agreement.



 












    -44-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

 


Section 22.Miscellaneous.


 


Section 22.1.Successors
and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including any subsequent holder of a Note) whether so expressed or
not, except that, subject to Section 10.2, the Company may not assign or otherwise transfer any of its rights or obligations hereunder
or under the Notes without the prior written consent of each holder. Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable
right, remedy or claim under or by reason of this Agreement.


 


Section 22.2.Accounting Terms.


 


(a) All accounting terms used herein which
are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP. Except as otherwise
specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all
financial statements shall be prepared in accordance with GAAP. For purposes of determining compliance with this Agreement (including
Section 9, Section 10 and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted
by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option,
International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard)
shall be disregarded and such determination shall be made as if such election had not been made.


 


(b)If the Company notifies the holders
of the Notes that the Company requests an amendment to any provision hereof to eliminate the effect of any change occurring after the
date hereof in GAAP or in the application thereof on the operation of such provision, regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof then such provision shall be interpreted on the basis of GAAP as in effect
and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.


 


Section 22.3.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 (to the full extent permitted by law) not invalidate or render unenforceable such provision
in any other jurisdiction.


 


Section 22.4.Construction, Etc.
Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance
with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.



 


 







    -45-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




  


Defined terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed
to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning
and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein)
and, for purposes of the Notes, shall also include any such notes issued in substitution therefor pursuant to Section 13, (b) subject
to Section 22.1, any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the
words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer
to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Schedules
shall be construed to refer to Sections of, and Schedules to, this Agreement, and (e) any reference to any law or regulation herein
shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.


 


Section 22.5.Counterparts; Electronic
Contracting . This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but
together signed by all, of the parties hereto. The parties agree to electronic contracting and signatures with respect to this Agreement
and the other documents (other than the Notes).  Delivery of an electronic signature to, or a signed copy of, this Agreement and
such other documents (other than the Notes) by facsimile, email or other electronic transmission shall be fully binding on the parties
to the same extent as the delivery of the signed originals and shall be admissible into evidence for all purposes. The words “execution,”
 “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed
in connection with this Agreement and the other documents (other than the Notes) shall be deemed to include electronic signatures, the
electronic matching of assignment terms and contract formations on electronic platforms approved by the Company, or the keeping of records
in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the
Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any
other similar state laws based on the Uniform Electronic Transactions Act. Notwithstanding the foregoing, if any Purchaser shall request
manually signed counterpart signatures to any document, the Company hereby agrees to use its reasonable endeavors to provide such manually
signed signature pages as soon as reasonably practicable (but in any event within 30 days of such request or such longer period as the
requesting Purchaser and the Company may mutually agree).


 










    -46-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


 


Section 22.6.Governing Law.
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws
of a jurisdiction other than such State.


 


Section 22.7.Jurisdiction
and Process; Waiver of Jury Trial. (a) The Company and each Purchaser irrevocably submit to the non-exclusive jurisdiction
of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding
arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the Company and each Purchaser
irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction
of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient
forum.


(b)The Company and each Purchaser agree,
to the fullest extent permitted by applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in
Section 22.7(a) brought in any such court shall be conclusive and binding upon it subject to rights of appeal, as the case may
be, and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction
of which it or any of its assets is or may be subject) by a suit upon such judgment.


 


(c)The Company and each Purchaser consent
to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a)
by mailing a copy thereof by registered, certified, priority or express mail (or any substantially similar form of mail), postage prepaid,
return receipt or delivery confirmation requested, to it at its address specified in Section 18 or at such other address of which
such holder shall then have been notified pursuant to said Section. The Company and each Purchaser agree that such service upon receipt
(i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall,
to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices
hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or
any reputable commercial delivery service.


 


(d)Nothing in this Section 22.7 shall
affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of
the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful
manner a judgment obtained in one jurisdiction in any other jurisdiction.


 


(e)The
parties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document
executed in connection herewith or therewith.


 


*     *     *     *     *



 




    -47-


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    




 


If
you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company,
whereupon this Agreement shall become a binding agreement between you and the Company.


 


	 	Very truly yours,
	 	 
	 	WhiteHorse Finance, Inc.
	 	 
	 	By: /s/ Joyson C. Thomas
	 	Name: Joyson C. Thomas
	 	Title: Authorized Signatory



 


 


[Signature Page to Note Purchase Agreement]



     


    
	WhiteHorse Finance, Inc.	Note Purchase Agreement




    

This Agreement is hereby


accepted and agreed to as


of the date hereof.


 


	 	Lincoln Benefit Life Company
	 	 
	 	By: /s/ Brian Kurtz
	 	Name: Brian Kurtz
	 	Title: Authorized Signatory



 


 


[Signature Page to Note Purchase Agreement]



    


    


    

 


Defined Terms


 


As used herein, the following
terms have the respective meanings set forth below or set forth in the Section hereof following such term:


 


“Adjusted Interest
Rate” is defined in Section 1.2(d).


 


“Affiliate”
means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to the Company, shall include any
Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or
any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. Unless the context otherwise clearly requires, any reference to an “Affiliate”
is a reference to an Affiliate of the Company. Notwithstanding anything herein to the contrary, the term “Affiliate” shall
not include any Person that constitutes a Portfolio Investment.


 


“Agreement”
means this Note Purchase Agreement, including all Schedules attached to this Agreement.


 


“Amended Credit Facility”
is defined in Section 10.7.


 


“Anti-Corruption
Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity,
including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.


 


“Anti-Money
Laundering Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes, including the Currency and Foreign Transactions Reporting
Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.


 


“Asset Coverage Ratio”
means the ratio, as in effect from time to time, determined on a consolidated basis for Company and its Subsidiaries, without duplication,
(a) the value of total assets of the Company and its Subsidiaries, less all liabilities and indebtedness not represented by senior
securities to (b) to the aggregate amount of senior securities representing indebtedness of Company and its Subsidiaries (including
this Agreement), in each case as determined pursuant to the Investment Company Act and any orders of the SEC issued to or with respect
to Company thereunder.


 


“Assignee”
is defined in Section 13.2(a).


 


“Assigning Party”
is defined in Section 13.2(a).


 


“Below Investment
Grade Event” is defined in Section 1.2(e).


 




    Schedule A
 (to Note Purchase Agreement)


    


    

 


“Blocked Person”
means (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (b) a
Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under U.S. Economic Sanctions
Laws or (c) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or
acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (a) or (b).


 


“Business Day”
means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in
New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any
day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Miami, Florida are required
or authorized to be closed.


 


“Capital Lease”
means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.


 


“Change in Control”
means


 


(i)the direct
or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation) in one or a series of related
transactions, of all or substantially all of the property or assets of the Company and its Subsidiaries, taken as a whole, to any “person”
or “group” (as those terms are used in Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”),
other than to any Permitted Holders,


 


(ii)the consummation
of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person”
or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) (other than any Permitted Holders) becomes the
 “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50%
of the outstanding voting stock of the Company, measured by voting power rather than number of shares; or


 


(iii)the approval by
the Company’s stockholders of any plan or proposal relating to the liquidation or dissolution of the Company;


provided, however, that any transfer of
the Company’s securities by H.I.G. Capital, L.L.C. or any of its Affiliates shall not be deemed a Change in Control under clause
(i) or (ii) above, as long as an Affiliate of H.I.G. Capital, L.L.C. remains the Company’s investment adviser until December 6, 2028.


 


“Closing”
is defined in Section 3.


 


“Code” means the Internal Revenue Code of 1986 and the rules and regulations promulgated
thereunder from time to time.


 




    A-2


     


    

 


“Company”
is defined in the first paragraph of this Agreement.


 


“Competitor”
means (a) any entity that has elected to be regulated as a “business development company” under the Investment Company Act;
or (b) any Person who is not an Affiliate of the Company or any of its Subsidiaries and who engages, as its primary business, in
(i) the same or similar business as a material business of the Company or any of its Subsidiaries or (ii) the business of providing
loans in the middle market or to venture companies and such Person is not a bank or an insurance company; provided that:


 


(i)the provision
of investment advisory services by a Person to a Plan which is owned or controlled by a Person which would otherwise be a Competitor
shall not in any event cause the Person providing such services to be deemed to be a Competitor, provided that such Person providing
such services has established and maintains procedures which will prevent Confidential Information supplied to such Person from being
transmitted or otherwise made available to such Plan; and


 


(ii)in no event shall an Institutional Investor be deemed a Competitor
if such Institutional Investor is a pension plan sponsored by a Person which would otherwise be a Competitor but which is a regular investor
in privately placed Securities and such pension plan has established and maintains procedures which will prevent Confidential Information
supplied to such pension plan by the Company from being transmitted or otherwise made available to such plan sponsor.


 


“Confidential Information”
is defined in Section 20.


 


“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled” and “Controlling”
shall have meanings correlative to the foregoing.


 


“Control Event”
means the public announcement by the Company of an agreement or letter of intent with respect to a proposed transaction or event or series
of transactions or events which, individually or in the aggregate, may reasonably be expected to result in a Change in Control.


“Controlled Entity”
means (a) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (b) if
the Company has a parent company, such parent company and its Controlled Affiliates.


 


“Debt to Equity Ratio”
means ratio of (a) the aggregate amount of Indebtedness of the Company and its Subsidiaries to (b) Shareholders’ Equity
at the last day of the immediately preceding fiscal quarter of the Company.


 


“Default”
means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become
an Event of Default.


 




    A-3


     


    

 


“Default Rate”
means that rate of interest per annum that is 2% above the rate of interest on the Notes then in effect.


 


“Disclosure Documents”
is defined in Section 5.3.


 


“EDGAR”
means the SEC’s Electronic Data Gathering, Analysis and Retrieval System or any successor SEC electronic filing system for such
purposes.


 


“Egan Jones”
means Egan Jones Rating Company or if applicable, its successor.


 


“Environmental Laws”
means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment
or the release of any materials into the environment, including those related to Hazardous Materials.


 


“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust
or other equity ownership interests or equivalents (however designated, including any instrument treated as equity for U.S. federal
income tax purposes) in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such
equity interest.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder, in each case as amended
from time to time.


 


“ERISA Affiliate”
means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414
of the Code.


 


“Existing Credit
Facility” is defined in Section 10.7.


 


“Existing Facility
Additional Provisions” is defined in Section 10.7.


 


“External Manager”
means H.I.G. WhiteHorse Advisers, LLC, a Delaware limited liability company (or any Affiliate of H.I.G. Capital, L.L.C. that may be so
designated as the investment adviser of the Company from time to time).


 


“Event of Default”
is defined in Section 11.


 


“Family Member”
means, with respect to any individual, any other individual having a relationship of blood (to the second degree of consanguinity), marriage
or adoption to such individual.


 


“Family Trust”
means, with respect to any individual, trusts or other estate planning vehicles established for the primary benefit of such individual
or Family Member or such individual and in respect of which such individual or a bona fide third party serves as trustee or in a similar
capacity.


 




    A-4


     


    

 


“FATCA”
means (a) sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), together with any current or future regulations or official interpretations
thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United
States of America and any other jurisdiction, which (in either case) facilitates
the implementation of the foregoing clause (a), and (c) any agreements entered into pursuant to section 1471(b)(1) of the
Code.


 


“Form 10-K”
is defined in Section 7.1(b).


 


“Form 10-Q”
is defined in Section 7.1(a).


 


“GAAP”
means (a) generally accepted accounting principles as in effect from time to time in the United States of America and (b) for
purposes of Section 9.6, with respect to any Subsidiary, generally accepted accounting principles (including International Financial
Reporting Standards, as applicable) as in effect from time to time in the jurisdiction of organization of such Subsidiary.


 


“Governmental Authority”
means


 


(a)the government of


 


(i)the
United States of America or any state or other political subdivision thereof, or


 


(ii)any other jurisdiction in which the Company or
any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary,
or


 


(b)any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.


 


“Governmental Official”
means any governmental official or employee, employee of any government-owned or government-controlled entity, political party,
any official of a political party, candidate for political office, official of any public international organization or anyone else acting
in an official capacity.


 


“Guaranty”
means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any
other Person in any manner, whether directly or indirectly, including obligations incurred through an agreement, contingent or otherwise,
by such Person:


 


(a)to purchase such indebtedness
or obligation or any property constituting security therefor;


 




    A-5


     


    

 


(b)to advance
or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital
or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds
for the purchase or payment of such indebtedness or obligation;


 


(c)to lease
properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of
the ability of any other Person to make payment of the indebtedness or obligation; or


 


(d)otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof.


 


provided that the term “Guaranty”
shall not include (i) endorsements for collection or deposit in the ordinary course of business or (ii) customary indemnification agreements
entered into in the ordinary course of business, provided that such indemnification obligations are unsecured, such Person has determined
that any liability thereunder is remote and such indemnification obligations are not the functional equivalent of the guaranty of a payment
obligations of a primary obligor. In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness
or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.


 


“Hazardous Materials”
means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal
of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized
by any applicable law, including asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products,
lead based paint, radon gas or similar restricted, prohibited or penalized substances.


 


“holder”
means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to
Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and
any related definitions in this Schedule A, “holder” shall mean the beneficial owner of such Note whose name and address
appears in such register.


 


“Indebtedness”
with respect to any Person means, at any time, without duplication,


 


(a)its liabilities for borrowed
money;


 


(b)its redemption obligations
in respect of mandatorily redeemable Preferred Stock;


 


(c)its liabilities for the deferred
purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including
all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);


 




    A-6


     


    

 


(d)(i) all liabilities appearing
on its balance sheet in accordance with GAAP in respect of Capital Leases and (ii) all liabilities which would appear on its balance
sheet in accordance with GAAP in respect of Synthetic Leases assuming such Synthetic Leases were accounted for as Capital Leases;


 


(e)all liabilities
for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);


 


(f)all its
liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and
other financial institutions (whether or not representing obligations for borrowed money);


 


(g)the aggregate
Swap Termination Value of all Swap Contracts of such Person; and


 


(h)any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (g) hereof.


 


Indebtedness of any Person shall include all obligations
of such Person of the character described in clauses (a) through (h) to the extent such Person remains legally liable in respect
thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.


 


“INHAM Exemption”
is defined in Section 6.2(e).


 


“Institutional Investor”
means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than
5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.


 


“Investment Company Act”
means the Investment Company Act of 1940, and the rules and regulations promulgated thereunder and all exemptive relief, if any, obtained
by the Company thereunder, as the same may be amended from time to time.


 


“Investment Company Act
Asset Coverage” means the minimum asset coverage required to be held by the Company to comply with the Investment Company Act.


 


“Investment Grade”
means a rating of at least “BBB-” or higher by Egan Jones or its equivalent by any other NRSRO.


 


“JPMorgan”
means JPMorgan Chase Bank, National Association.


 


“Lien”
means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured


 




    A-7


     


    

 


party to or of such Person under any conditional
sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the
case of stock, stockholder agreements, voting trust agreements and all similar arrangements).


 


“Make-Whole
Amount” is defined in Section 8.6.


 


“Material”
means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.


 


“Material Adverse
Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement
and the Notes, (c) the ability of any Subsidiary Guarantor to perform its obligations under its Subsidiary Guaranty, or (d) the
validity or enforceability of this Agreement, the Notes or any Subsidiary Guaranty; provided, however, that no change to such business,
operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, resulting from, arising
out of or relating to any epidemic, pandemic, disease outbreak (including the COVID-19 disease caused by the SARS-CoV-2 virus (including
any continuation, worsening, evolution, mutation or variation thereof)) and/or other health crisis and/or public health event, and/or
the worsening of any of the foregoing, shall be deemed to constitute, or shall be taken into account in determining whether, a Material
Adverse Effect has occurred or could or would reasonably be expected to occur.


 


“Material Credit
Facility” means, as to the Company and its Subsidiaries,


 


(a)the Secured
Credit Facility, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof;


 


(b)the Note
Purchase Agreement dated July 13, 2018 among the Company and the purchasers named therein, including any renewals, extensions, amendments,
supplements, restatements, replacements or refinancing thereof;


 


(c)the Note
Purchase Agreement dated October 20, 2020 among the Company and the purchasers named therein, including any renewals, extensions,
amendments, supplements, restatements, replacements or refinancing thereof;


 


(d)the Note
Purchase Agreement dated December 4, 2020 among the Company and the purchasers named therein, including any renewals, extensions,
amendments, supplements, restatements, replacements or refinancing thereof;


 


(e)the Indenture dated November 13, 2018
between the Company and American Stock & Transfer Trust Company, LLC, as supplemented by (i) the First Supplemental Indenture
dated November 13, 2018 and (ii) the Second Supplemental Indenture dated November 24, 2021; and


 




    A-8


     


    

 


(f)any other agreement(s) creating
or evidencing indebtedness for borrowed money entered into on or after the date of Closing by the Company or any Subsidiary, or in respect
of which the Company or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support (“Credit Facility”),
in a principal amount outstanding or available for borrowing equal to or greater than $25,000,000 (or the equivalent of such amount in
the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency);
and if no Credit Facility or Credit Facilities equal or exceed such amounts, then the largest Credit Facility shall be deemed to be a
Material Credit Facility.


 


“Maturity Date”
is defined in the first paragraph of each Note.


 


“MFL Provision”
means any covenant (whether constituting a covenant or an event of default) that requires the Company or any Subsidiary to (i) maintain
any level of financial performance (including without limitation, any specified level of net worth, total assets, cash flows or net income,
however expressed), (ii) maintain any relationship of any component of its capital structure to any other component thereof (including,
without limitation, the relationship of indebtedness, senior indebtedness or subordinated indebtedness to total capitalization or to net
worth, however expressed), (iii) maintain any measure of its ability to service its indebtedness (including, without limitation,
exceeding any specified ratio of revenues, cash flow or income to interest expense, rental expense, capital expenditures and/or scheduled
payments of indebtedness, however expressed) or (iv) not to exceed any maximum level of indebtedness, however expressed.


 


“Multiemployer Plan”
means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).


 


“NAIC”
means the National Association of Insurance Commissioners.


 


“New Credit Facility”
is defined in Section 10.7.


 


“New Facility Additional
Provisions” is defined in Section 10.7.


 


“Non-U.S.
Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of
America by the Company or any Subsidiary primarily for the benefit of employees of the Company or one or more Subsidiaries residing outside
the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.


 


“Notes”
is defined in Section 1.


 


“NRSRO” means
a Nationally Recognized Statistical Rating Organization so designated by the SEC whose ratings for senior unsecured indebtedness of business
development companies are authorized for use with, and recognized  by, the SVO.


 




    A-9


     


    

 


“OFAC”
means the Office of Foreign Assets Control of the United States Department of the Treasury.


 


“OFAC Sanctions Program”
means any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be
found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.


 


“Officer’s
Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities
extend to the subject matter of such certificate.


 


“PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.


 


“Permitted Holders”
means H.I.G. Capital, L.L.C. (or any Affiliate thereof), senior management and employees of H.I.G. Capital, L.L.C. and its subsidiaries
(in each case, as of the date hereof) and their Family Members and Family Trusts.


 


“Person”
means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity
or Governmental Authority.


 


“Plan”
means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within
the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have
been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may
have any liability.


 


“Portfolio Investment”
means (i) any investment held by the Company or one of its Subsidiaries in their asset portfolio and (ii) any investment held by the
Company or one of its Subsidiaries that is listed on the Company’s consolidated Schedule of Investments included in any filing with
the SEC (or, for investments made during a given quarter and before a consolidated Schedule of Investments is filed with respect to the
end of such quarter, will be listed on the Company’s consolidated Schedule of Investments to be filed with the SEC with respect
to the end of such quarter during which the Investment is made), including, without limitation, any such Schedule of Investments filed
(or to be filed) with any of the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K, registration statements or prospectuses.


 


“Preferred Stock”
means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of
such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.


 


“property”
or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible,
choate or inchoate.


 


“PTE” is
defined in Section 6.2(a).


 




    A-10


     


    

 


“Purchaser”
or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such
Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2), provided, however, that
any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of
a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note
for the purposes of this Agreement upon such transfer.


 


“Purchaser Schedule”
means the Purchaser Schedule to this Agreement listing the Purchasers of the Notes and including their notice and payment information.


 


“QPAM Exemption”
is defined in Section 6.2(d).


 


“Qualified Institutional
Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in
Rule 144A(a)(1) under the Securities Act.


 


“Rating” means
a rating of the Notes, which rating shall (a) specifically describe the Notes, including their interest rate, maturity and Private Placement
Number, issued by a NRSRO and (b) in the event such Rating is a “private letter rating” (i) address the likelihood of payment
of both the principal and interest of such Notes (which requirement shall be deemed satisfied if the rating is silent as to the likelihood
of payment of both principal and interest and does not otherwise include any indication to the contrary), (ii) not include any prohibition
against sharing such evidence with the SVO or any other regulatory authority having jurisdiction over the holders of the Notes, and (iii)
include such other information describing the relevant terms of the Notes as may be required from time to time by the SVO or any other
regulatory authority having jurisdiction over the holders of the Notes.


 


“Related Fund”
means, with respect to any holder of any Note, any fund or entity that (a) invests in Securities or bank loans, and (b) is advised
or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.


 


“Replacement Facilities”
means at any time on or after all or any portion of the Secured Credit Facility is expired or terminated, one or more senior secured credit
facilities or similar secured loan agreements to which the Company or the borrower under the Secured Credit Facility (or any other special
purpose vehicle formed by the Company) is a party as borrower and pursuant to which substantially all of the Company’s assets are
pledged, including any guarantees granted thereunder by the Company or such borrower.


 


“Required Holders”
means (i) prior to the Closing, the Purchasers and (ii) at any time on or after the Closing, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).


 


“Responsible Officer”
means any Senior Financial Officer, the chief executive officer, the chief operating officer, the chief compliance officer, and any other
officer of the Company with responsibility for the administration of the relevant portion of this Agreement.


 




    A-11


     


    

 


“RIC” means
a person qualifying for treatment as a “regulated investment company” under the Code.


 


“SBA” means
the United States Small Business Administration or any Governmental Authority succeeding to any or all of the functions thereof.


 


“SBIC Subsidiary”
means any subsidiary of the Company (or such subsidiary’s general partner or manager entity) that is (a) either (i) a “small
business investment company” licensed by the SBA (or that has applied for such a license and is actively pursuing the granting thereof
by appropriate proceedings promptly instituted and diligently conducted) under the Small Business Investment Act of 1958, as amended,
or (ii) any wholly-owned, direct or indirect, subsidiary of an entity referred to in clause (a)(i) of this definition, and (b) designated
in writing by the Company as an SBIC Subsidiary.


 


“SEC” means
the Securities and Exchange Commission of the United States of America.


 


“Secured Credit Facility”
means that certain fifth amended and restated loan agreement dated as of April 28, 2021, as the same may be amended, amended
and restated, supplemented or otherwise modified from time to time, by and among WhiteHorse Finance Credit 1, LLC, as borrower, JPMorgan
Bank, as administrative agent and lender, and the lenders from time to time party thereto.


 


“Secured Debt”
means Indebtedness of the Company and its Subsidiaries that are consolidated with the Company for purposes of GAAP (excluding any Indebtedness
of any of the Company’s Subsidiaries which are SBIC Subsidiaries) outstanding at any time that is secured in any manner by any Lien
on assets of the Company or any such Subsidiaries.


 


“Secured Debt Ratio”
means the ratio of (a) Secured Debt to (b) the aggregate amount of Indebtedness of the Company and its Subsidiaries that are consolidated
with the Company for purposes of GAAP (including Indebtedness under the Notes and excluding any Indebtedness of any of the Company’s
Subsidiaries which are SBIC Subsidiaries).


 


“Securities”
or “Security” shall have the meaning specified in section 2(1) of the Securities Act.


 


“Securities Act”
means the Securities Act of 1933 and the rules and regulations promulgated thereunder from time to time in effect.


 


“Senior Financial
Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.


 


“Shareholders’
Equity” means, at any date, the amount determined on a consolidated basis, without duplication, in accordance with GAAP, of
shareholders equity for the Company and its Subsidiaries at such date.


 




    A-12


     


    

 


“Significant Subsidiary”
means any Subsidiary which is a “significant subsidiary” (within the meaning specified in Rule 1-02(w) of Regulation S-X,
promulgated under the Securities Act) of the Company, excluding any Subsidiary of the Company which is (a) a nonrecourse or limited recourse
subsidiary, (b) a bankruptcy remote special purpose vehicle or (c) not consolidated with the Company for the purposes of GAAP.


 


“Source”
is defined in Section 6.2.


 


“State Sanctions
List” means a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons
that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under
U.S. Economic Sanctions Laws.


 


“Subsidiary”
means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one
or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership
or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries
or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its Subsidiaries); provided, however, that notwithstanding
such definition of Subsidiary or the definition of subsidiary under GAAP, a Person shall not be deemed a Subsidiary for purposes of this
Agreement if (a) such Person is a joint venture between the Company and a third party, (b) the Company owns equity securities
of such Person representing 50% of the voting power of all outstanding equity securities of such Person and (c) pursuant to SEC
guidance, the Indebtedness of such Person is not consolidated on the consolidated financial statements of the Company. Unless the context
otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company. Anything herein
to the contrary notwithstanding, the term “Subsidiary” shall not include any SBIC Subsidiary.


 


“Subsidiary Guarantor”
means each Subsidiary that has executed and delivered a Subsidiary Guaranty.


 


“Subsidiary Guaranty”
is defined in Section 9.7(a).


 


“Substitute Purchaser”
is defined in Section 21.


 


“SVO” means
the Securities Valuation Office of the NAIC.


 


“Swap Contract”
means (a) any and all interest rate swap transactions, basis swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond
price or bond index swaps or options or forward foreign exchange transactions, cap transactions, floor transactions, currency options,
spot contracts or any other similar transactions or any of the foregoing (including any options to enter into any of the foregoing), and
(b) any and


 




    A-13


     


    

 


all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International
Swaps and Derivatives Association, Inc. or any International Foreign Exchange Master Agreement.


 


“Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced
in clause (a), the amounts(s) determined as the mark-to-market values(s) for such Swap Contracts, as determined based upon
one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.


 


“Synthetic Lease”
means, at any time, any lease (including leases that may be terminated by the lessee at any time) of any property (a) that is accounted
for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased
for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.


 


“United States Person”
has the meaning set forth in Section 7701(a)(30) of the Code.


 


“Unsecured Debt”
means Indebtedness of the Company with a final maturity greater than one year from the date of determination outstanding at any time that
is not secured in any manner by any Lien on assets of the Company or any of its Subsidiaries.


 


“USA PATRIOT Act”
means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the rules and regulations promulgated thereunder from time to time in effect.


 


“U.S. Economic Sanctions
Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States
pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with
the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and
any other OFAC Sanctions Program.


 


“Wholly-Owned
Subsidiary” means, at any time, any Subsidiary all of the equity interests (except directors’ qualifying shares) and
voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at
such time.


 




    A-14


     


    

 


[Form of Note]


 


This Note
has been issued with original issue discount, for purposes of Sections 1272, 1273, and 1275 of the Internal Revenue Code of 1986, as amended.
Upon request of the Holder of this Note, the Company will promptly make available to such Holder, (i) the issue price of the Note,
(ii) the amount of original issue discount in respect thereof, (iii) the issue date of the Note, (iv) the comparable yield
of the Note, and (v)  the projected payment schedule of the Note, in each case as determined under the original issue discount
rules of the U.S. Internal Revenue Code. Please contact WhiteHorse Finance, Inc., 1450 Brickell Avenue, 31st Floor. Miami, Florida 33131,
Attention: Chief Financial Officer (Investor Relations).


 


WhiteHorse Finance, Inc.


 


4.25% Senior Note Due December 6, 2028


 


	No. [_____]	[Date]
	$[_______]	PPN 96524V B@4



 


For
Value Received, the undersigned, WhiteHorse Finance, Inc. (herein called the “Company”),
a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered
assigns, the principal sum of [_____________________] Dollars (or so much thereof as shall
not have been prepaid) on December 6, 2028 (the “Maturity Date”), with interest (computed on the basis of
a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.25% per annum from the date hereof,
payable semiannually, on the 6th day of June and December; as may be adjusted in accordance with Section 1.2 of the Note Purchase
Agreement (as hereinafter defined), in each year, commencing with the June or December next succeeding the date hereof, and on the Maturity
Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue
payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any
Make-Whole Amount, at a rate per annum from time to time equal to the Default Rate (as defined in the hereinafter defined Note Purchase
Agreement), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).


 


Payments of principal of,
interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at
JPMorgan in New York, New York or at such other place as the Company shall have designated by written notice to the holder of
this Note as provided in the Note Purchase Agreement referred to below.


 


This Note is one of a series
of Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated December 6, 2021
(as from time to time amended, the “Note Purchase Agreement”), between the Company and the Purchaser named therein
and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have


 




    Schedule 1
 (to Note Purchase Agreement)


    


    

 


(i) agreed to the confidentiality provisions
set forth in Section 20 of the Note Purchase Agreement and (ii) made the representations set forth in Section 6.1 through
6.4 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings
ascribed to such terms in the Note Purchase Agreement.


 


This Note is a registered
note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new
Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration
of transfer, the Company may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment
and for all other purposes, and the Company will not be affected by any notice to the contrary.


 


This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.


 


If an Event of Default occurs
and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including
any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.


 


This Note shall be construed
and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State
of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.


 


	 	WhiteHorse Finance, Inc.
	 	 	 
	 	By: 	 
	 	 	[Title]



 




    -2-


     


    

 


Form of Opinion of Special Counsel

for the Company


 


[Opinion
to be provided separately.]


 


 


 


 




    Schedule 4.4(a)
 (to Note Purchase Agreement)


    


    

 


Form of Opinion of Special Counsel

for the Purchasers


 


[To Be Provided
on a Case by Case Basis]


 


 


 






    Schedule 4.4(b)
 (to Note Purchase Agreement)


    


    

 


Disclosure Materials




1. Private Rating Report of WhiteHorse Finance, Inc., dated December 1, 2021.


 


 


 


 




    Schedule 5.3
 (to Note Purchase Agreement)


    


    

Subsidiaries of the Company and

Ownership of Subsidiary Stock


 


		(i)	Subsidiaries:



 


	Name	 	Jurisdiction	 	% of Shares	 	Subsidiary Guarantor
 (Yes/No)

	 	 	 	 	 	 	 
	WhiteHorse Finance Credit I, LLC (“WhiteHorse Finance Credit I”)	 	Delaware	 	100% owned by the Company	 	No
	 	 	 	 	 	 	 
	WhiteHorse Finance (CA), LLC	 	Delaware	 	100% owned by WhiteHorse Finance Credit I	 	No
	 	 	 	 	 	 	 
	WhiteHorse Crews of California Holding, Inc.	 	Delaware	 	100% owned by the Company	 	No
	 	 	 	 	 	 	 
	WhiteHorse Nicholas & Associates Holding, Inc.	 	Delaware	 	100% owned by the Company	 	No
	 	 	 	 	 	 	 
	WhiteHorse Pinnacle Management Holding, Inc.	 	Delaware	 	100% owned by the Company	 	No
	 	 	 	 	 	 	 
	WhiteHorse Finance Warehouse, LLC 	 	Delaware	 	100% owned by the Company	 	No
	 	 	 	 	 	 	 
	WHF PMA Holdco Blocker, LLC	 	Delaware	 	100% owned by the Company	 	No
	 	 	 	 	 	 	 
	WhiteHorse Finance Holdings, LLC	 	Delaware	 	100% owned by the Company	 	No
	 	 	 	 	 	 	 
	WhiteHorse RCKC Holdings, LLC	 	Delaware	 	100% owned by the Company	 	No



 


		(ii)	Affiliates:



 


		1.	H.I.G. Bayside Debt & LBO Fund II, L.P.



		2.	H.I.G. Bayside Loan Opportunity Fund II, L.P.



		3.	Sami Mnaymneh(1)



		4.	Anthony Tamer(1)



		5.	H.I.G. WhiteHorse Administration, LLC



		6.	Bayside Capital, Inc.



		7.	WHF STRS Ohio Senior Loan Fund LLC



 


Schedule
5.4

(to Note Purchase Agreement)






     


    


    

 




		(1)	Messrs. Mnaymneh and Tamer are control persons of H.I.G.-GP
II, Inc., which is the manager of the general partner of each of H.I.G. Bayside Debt & LBO Fund II, L.P. and H.I.G. Bayside Loan
Opportunity Fund II, L.P.



 


		(iii)	External Manager and its Affiliates:



 


		1.	External Manager: H.I.G. WhiteHorse Advisers, LLC



		2.	Affiliates of the External Manager:



		a.	H.I.G. WhiteHorse Administration, LLC



		b.	H.I.G. Capital, LLC



		c.	H.I.G. Capital Partners, LP



		d.	H.I.G.-GP Global, LLC



 


		(iv)	Company’s Directors and Senior Officers:



 


Directors


 


Stuart Aronson


John Bolduc


Kevin F. Burke


Jay Carvell


Rick P. Frier


Rick D. Puckett


G. Stacy Smith


 


Senior Officers


 


Stuart Aronson, Chief Executive Officer


Joyson C. Thomas, Chief Financial Officer


Marco Collazos, Chief Compliance Officer


 


 


5.4-2






    


    


    

 




Financial Statements


 


		1.	The unaudited financial statements of the Company set forth
on pages 3 – 56 of the Quarterly Report on 10-Q for the Quarter Ended September 30, 2021 filed with the SEC on November 9, 2021.



 


		2.	The unaudited financial statements of the Company set forth
on pages 3 – 48 of the Quarterly Report on 10-Q for the Quarter Ended June 30, 2021 filed with the SEC on August 9, 2021.



 


		3.	The unaudited financial statements of the Company set forth
on pages 3 – 49 of the Quarterly Report on 10-Q for the Quarter Ended March 31, 2021 filed with the SEC on May 10, 2021.



 


		4.	The audited financial statements of the Company set forth on
pages 94 – 148 of the Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2020 filed with the SEC on March 8, 2021.



 


 


 


Schedule
5.5

(to Note Purchase Agreement)



    


    


    

 


	Existing
Indebtedness of the Company and Its Subsidiaries

	 
	Obligor(s)	 	Administrative Agent / Trustee	 	CUSIP, PPN or ISIN
 (if
    applicable)	 	Description of Indebtedness	 	Interest Rate(s)	 	Collateral	 	Final
 Maturity	 	Outstanding

    Principal Amount1
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WhiteHorse
    Finance Credit I, LLC		JPMorgan Chase
    Bank, N.A.	 	—	 	Revolving credit
    facility	 	L+2.50%	 	All assets
    of WhiteHorse Credit	 	November 22,
    2024	 	$259,620,000
    ($25,380,000 undrawn)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WhiteHorse
    Finance, Inc.2	 	American
    Stock & Transfer Trust Company, LLC	 	96524V
    304	 	6.50%
    Senior Notes due 2025	 	6.50%	 	—	 	November 30,
    2025	 	$35,000,000
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WhiteHorse
    Finance, Inc.	 	N/A	 	96524V A*7	 	6.00% Senior
    Notes due 2023	 	6.00%	 	—	 	August 7, 2023	 	$30,000,000
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WhiteHorse
    Finance, Inc.	 	N/A	 	96524V A@5	 	5.375% Senior
    Notes due 2025	 	5.375%	 	—	 	October 20,
    2025	 	$40,000,000
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WhiteHorse
    Finance, Inc.	 	N/A	 	96524V A# 3	 	5.375% Senior
    Notes, Series A due 2026	 	5.375%	 	—	 	December 4,
    2026	 	$10,000,000
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WhiteHorse
    Finance, Inc.	 	N/A	 	96524V B* 6	 	5.625% Senior
    Notes, Series B due 2027	 	5.625%	 	—	 	December 4,
    2027	 	$10,000,000
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WhiteHorse
    Finance, Inc.	 	American Stock
    & Transfer Trust Company, LLC	 	96524V AB2	 	4.00% Senior
    Notes due 2026	 	4.00%	 	—	 	December 15,
    2026	 	$75,000,000



 


 






		1.	Amounts as of September 30, 2021.



		2.	On
November 17, 2021, WhiteHorse Finance, Inc. notified American Stock & Transfer Trust Company, LLC that it will redeem all
the 6.50% Senior Notes due 2025 on December 17, 2021.


 


 


Schedule
5.15


(to Note Purchase Agreement)




    


    


    

 


Transactions with Affiliates


 


		1.	Trademark License Agreement, dated December 4, 2012, by and
between Bayside Capital, Inc. and the Company.



 


		2.	Administration Agreement, dated as of December 4, 2012, by and
between the Company and H.I.G. WhiteHorse Administration, LLC.



 


 


Schedule
10.1

(to Note Purchase Agreement)



    


    


    

WhiteHorse Finance, Inc.



Information Relating to Purchaser


 


	Name and Address of Purchaser	Principal Amount of Notes

to be Purchased
	Lincoln Benefit Life Company	$25,000,000


 


Note to be issued to the
following legal entity: Lincoln Benefit Life Company


 


		(1)	All payments by wire transfer of immediately available funds
to:



 


Bank: JPMorgan Chase Bank, N.A.


ABA: 021000021


AC Number: 9009000127


AC Name: Pension Trust


FFC: A/C Number: G 28898


FFC: A/C Name: LBL - (KIS)


Reference: Security reference details with sufficient information
to identify the source and application of such funds, including the issuer name, the PPN of the issue, interest rate, payment due date,
maturity date, interest amount, principal amount and premium amount.


 


		(2)	All notices of payments and written confirmations of such wire
transfers:



 


Kuvare US Holdings, Inc.


5600 N. River Road, Columbia Centre I, Suite 300


Rosemont, IL 60018


Attention: Investment Accounting


Email:
investmentaccounting@lbl.com; kuvare@clearwateranalytics.com


 


With a copy to:


 


Brian Roelke, Kuvare Insurance Services LP


Phone: 646.233.5447


Email:
broelke@kuvare.com


 


Tom Shanklin, Kuvare Insurance Services LP


Phone: 216.340.7255


Email:
tshanklin@kuvare.com


 


Matthew Xirinachs, Kuvare Insurance Services LP


Phone: 646.233.5449


Email:
mxirinachs@kuvare.com


 


		(3)	E-mail
                                            address for Electronic Delivery: ebraun@kuvare.com;
                                            broelke@kuvare.com; ikaplan@kuvare.com;
                                            settlements@kuvare.com; investmentaccounting@lbl.com;



 


Purchase
Schedule

(to Note Purchase Agreement)



    


    


    

kuvare@clearwateranalytics.com;
eincandela@kuvare.com; privateplacements@kuvare.com;
tshanklin@kuvare.com; mxirinachs@kuvare.com


 


		(4)	All other communications:



 


Kuvare Insurance Services LP


5600 N. River Road, Columbia Centre I, Suite 300


Rosemont, IL 60018


Attention: Enzo Incandela


Phone: 312.682.6331


Email:
eincandela@kuvare.com


 


With copies to:


 


Brian Roelke, Kuvare Insurance Services LP


Phone: 646.233.5447


Email:
broelke@kuvare.com


 


Tom Shanklin, Kuvare Insurance Services LP


Phone: 216.340.7255


Email:
tshanklin@kuvare.com


 


Matthew Xirinachs, Kuvare Insurance Services LP


Phone: 646.233.5449


Email:
mxirinachs@kuvare.com


 


		(5)	Address for physical delivery of notes:



 


JPMorgan Chase Bank, N.A.


4 Chase Metrotech Center, 3rd Floor


City, State Brooklyn, NY 11245-0001


Attention: Physical Receive Department


A/C Number: G 28898


A/C Name: LBL - (KIS)


 


		(6)	U.S. Tax Identification Number: 47-0221457



 






    -2-