##### 



Exhibit 10.7
 EXECUTION COPY
 SENIOR SECURED REVOLVING CREDIT AGREEMENT
 dated as of June 4, 2007
 among
 KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
 THE LENDERS FROM TIME TO TIME PARTY HERETO
 and
 SUNTRUST BANK
 CITIBANK, N.A.
 
 SUNTRUST CAPITAL MARKETS, INC.
 CITIGROUP CAPITAL MARKETS




---



##### 



TABLE OF CONTENTS
 PageARTICLE I DEFINITIONS; CONSTRUCTION
    
    
    1Section 1.1. Definitions
    
    
    1Section 1.2. Classifications of Loans and Borrowings
    
    
    27Section 1.3. Accounting Terms and Determination
    
    
    27Section 1.4. Terms Generally
    
    
    27ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS
    
    
    28Section 2.1. General Description of Facilities
    
    
    28Section 2.2. Revolving Loans
    
    
    28Section 2.3. Procedure for Borrowings
    
    
    28Section 2.4. Swingline Commitment
    
    
    29Section 2.5. Funding of Borrowings
    
    
    30Section 2.6. Interest Elections
    
    
    31Section 2.7. Optional Reduction and Termination of Commitments
    
    
    32Section 2.8. Repayment of Loans
    
    
    32Section 2.9. Evidence of Indebtedness
    
    
    33Section 2.10. Prepayments
    
    
    33Section 2.11. Interest on Loans
    
    
    34Section 2.12. Fees
    
    
    35Section 2.13. Computation of Interest and Fees
    
    
    36Section 2.14. Inability to Determine Interest Rates
    
    
    36Section 2.15. Illegality
    
    
    36Section 2.16. Increased Costs
    
    
    37Section 2.17. Funding Indemnity
    
    
    38Section 2.18. Taxes
    
    
    38Section 2.19. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
    
    
    40Section 2.20. Letters of Credit
    
    
    41Section 2.21. Increase of Commitments; Additional Lenders
    
    
    46Section 2.22. Mitigation of Obligations
    
    
    47Section 2.23. Replacement of Lenders
    
    
    47ARTICLE III CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
    
    
    47Section 3.1. Conditions To Effectiveness
    
    
    47Section 3.2. Each Credit Event
    
    
    50Section 3.3. Delivery of Documents
    
    
    51ARTICLE IV REPRESENTATIONS AND WARRANTIES
    
    
    51Section 4.1. Existence; Power
    
    
    51Section 4.2. Organizational Power; Authorization
    
    
    51Section 4.3. Governmental Approvals; No Conflicts
    
    
    51Section 4.4. Financial Statements
    
    
    52Section 4.5. Litigation and Environmental Matters
    
    
    52Section 4.6. Compliance with Laws and Agreements
    
    
    52Section 4.7. Investment Company Act, Etc
    
    
    52Section 4.8. Taxes
    
    
    53Section 4.9. Margin Regulations
    
    
    53




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##### 



PageSection 4.10. Underwriting Policies
    
    
    53Section 4.11. ERISA
    
    
    53Section 4.12. Ownership of Property
    
    
    53Section 4.13. Disclosure
    
    
    54Section 4.14. Labor Relations
    
    
    54Section 4.15. Subsidiaries
    
    
    54Section 4.16. Insolvency
    
    
    54Section 4.17. OFAC
    
    
    55Section 4.18. Patriot Act
    
    
    55ARTICLE V AFFIRMATIVE COVENANTS
    
    
    55Section 5.1. Financial Statements and Other Information
    
    
    55Section 5.2. Notices of Material Events
    
    
    57Section 5.3. Existence; Conduct of Business
    
    
    58Section 5.4. Compliance with Laws, Etc
    
    
    58Section 5.5. Payment of Obligations
    
    
    58Section 5.6. Books and Records
    
    
    58Section 5.7. Visitation, Inspection, Etc
    
    
    58Section 5.8. Maintenance of Properties; Insurance
    
    
    59Section 5.9. Use of Proceeds and Letters of Credit
    
    
    59Section 5.10. Maintenance of RIC Status and Business Development Company
    
    
    59Section 5.11. Additional Subsidiaries; Additional Collateral
    
    
    59Section 5.12. Portfolio Valuation and Diversifications, Etc
    
    
    60Section 5.13. Calculation of Borrowing Base
    
    
    61Section 5.14. Compliance with Underwriting Policies
    
    
    63ARTICLE VI FINANCIAL COVENANTS
    
    
    63Section 6.1. Minimum Asset Coverage Ratio
    
    
    63Section 6.2. Minimum Liquidity
    
    
    63Section 6.3. Minimum Consolidated Shareholders Equity
    
    
    64ARTICLE VII NEGATIVE COVENANTS
    
    
    64Section 7.1. Indebtedness and Preferred Equity
    
    
    64Section 7.2. Negative Pledge
    
    
    65Section 7.3. Fundamental Changes
    
    
    65Section 7.4. Restricted Payments
    
    
    66Section 7.5. Sale of Assets
    
    
    67Section 7.6. Transactions with Affiliates
    
    
    68Section 7.7. Restrictive Agreements
    
    
    68Section 7.8. Sale and Leaseback Transactions
    
    
    68Section 7.9. Hedging Transactions
    
    
    69Section 7.10. Accounting Changes
    
    
    69Section 7.11. Amendment to Material Documents
    
    
    69Section 7.12. Loans, Etc
    
    
    69ARTICLE VIII EVENTS OF DEFAULT
    
    
    70Section 8.1. Events of Default
    
    
    70ARTICLE IX THE ADMINISTRATIVE AGENT
    
    
    73Section 9.1. Appointment of Administrative Agent
    
    
    73
 ii




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##### 



PageSection 9.2. Nature of Duties of Administrative Agent
    
    
    73Section 9.3. Lack of Reliance on the Administrative Agent
    
    
    74Section 9.4. Certain Rights of the Administrative Agent
    
    
    74Section 9.5. Reliance by Administrative Agent
    
    
    74Section 9.6. The Administrative Agent in its Individual Capacity
    
    
    75Section 9.7. Successor Administrative Agent
    
    
    75Section 9.8. Authorization to Execute other Loan Documents
    
    
    75Section 9.9. Documentation Agent; Syndication Agent
    
    
    76Section 9.10. Approved Third Party Appraiser Release
    
    
    76ARTICLE X MISCELLANEOUS
    
    
    76Section 10.1. Notices
    
    
    76Section 10.2. Waiver; Amendments
    
    
    78Section 10.3. Expenses; Indemnification
    
    
    80Section 10.4. Successors and Assigns
    
    
    81Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process
    
    
    85Section 10.6. WAIVER OF JURY TRIAL
    
    
    85Section 10.7. Right of Setoff
    
    
    86Section 10.8. Counterparts; Integration
    
    
    86Section 10.9. Survival
    
    
    86Section 10.10. Severability
    
    
    87Section 10.11. Confidentiality
    
    
    87Section 10.12. Interest Rate Limitation
    
    
    87Section 10.13. Waiver of Effect of Corporate Seal
    
    
    88Section 10.14. Patriot Act
    
    
    88Section 10.15. NO ORAL AGREEMENTS, WAIVER
    
    
    88
 iii




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##### 



Schedules
 Schedule I
    
    
    
    Commitment AmountsSchedule II
    
    
    
    Approved Dealers and AppraisersSchedule III
    
    
    
    Approved Brokerage AccountsSchedule 4.5
    
    
    
    Environmental MattersSchedule 4.14
    
    
    
    SubsidiariesSchedule 7.1
    
    
    
    Outstanding IndebtednessSchedule 7.2
    
    
    
    Existing Liens
 Exhibits
 Exhibit A
    
    
    
    Form of Revolving NoteExhibit B
    
    
    
    Form of Swingline NoteExhibit C
    
    
    
    Form of Assignment and AcceptanceExhibit D
    
    
    
    Form of Subsidiary GuarantyExhibit 2.3
    
    
    
    Form of Notice of Revolving BorrowingExhibit 2.4
    
    
    
    Form of Notice of Swingline BorrowingExhibit 2.6(b)
    
    
    
    Form of Continuation/ConversionExhibit 3.1(c)(viii)
    
    
    
    Form of Responsible Officers CertificateExhibit 5.1(c)
    
    
    
    Form of Compliance CertificateExhibit 5.13
    
    
    
    Form of Borrowing Base CertificateExhibit 7.4
    
    
    
    Form of Distributable Cash Flow CertificateExhibit 9.10
    
    
    
    Form of Approved Third Party Appraiser Release
 iv




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##### 



SENIOR SECURED REVOLVING CREDIT AGREEMENT
 THIS SENIOR SECURED REVOLVING CREDIT AGREEMENT Agreement Borrower Lenders Administrative Agent Issuing
Bank Swingline Lender Syndication Agent
 W I T N E S S E T H:
 WHEREAS,
 WHEREAS Treasury Lenders Treasury Credit Agreement
 WHEREAS
 NOW, THEREFORE
 ARTICLE I
 DEFINITIONS; CONSTRUCTION
 Section 1.1. Definitions
 Additional Commitment Amount Section
2.21
 Additional Lender Section 2.21




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##### 



Adjusted Borrowing Base minus
 Adjusted Covered Debt Amount minus
 Adjusted LIBO Rate minus
 Adjusted Loan Balance minus
 Administrative Agent
 Administrative Questionnaire
 Advance Rate
 Portfolio Investment
    
    Quoted
    
    UnquotedCash, Cash Equivalents and
Short-Term U.S. Government
Securities
    
    
    100
    %
    
    
    n.a.Long-Term U.S. Government
Securities
    
    
    95
    %
    
    
    n.a.Performing First Lien Bank
Loans
    
    
    80
    %
    
    
    70
    %Performing Second Lien Bank
Loans
    
    
    70
    %
    
    
    60
    %Performing Unsecured Bank
Loans
    
    
    65
    %
    
    
    55
    %Performing Non-Cash Pay Bank
Loans
    
    
    55
    %
    
    
    45
    %Performing Cash Pay High
Yield Securities
    
    
    60
    %
    
    
    50
    %
 2




---



##### 



Portfolio Investment
    
    Quoted
    
    UnquotedPerforming Cash Pay
Mezzanine Investments
    
    
    55
    %
    
    
    45
    %Performing MLP Units (and
Performing MLP Warrants
directly linked to such
units)
    
    
    50
    %
    
    
    45
    %Performing Non-Cash Pay High
Yield Securities
    
    
    50
    %
    
    
    40
    %Performing Common Equity,
Warrants (other than the MLP
Warrants), and MLP
Subordinated Units
    
    
    45
    %
    
    
    40
    %Performing Non-Cash Pay
Mezzanine Investments and
the in-the-money equity
component of any convertible
debt Securities constituting
Mezzanine Investments that
are convertible at the
holders option
    
    
    45
    %
    
    
    35
    %Non-Performing First Lien
Bank Loans
    
    
    35
    %
    
    
    0
    %Non-Performing Second Lien
Bank Loans
    
    
    25
    %
    
    
    0
    %Non-Performing High Yield
Securities
    
    
    25
    %
    
    
    0
    %Non-Performing Unsecured
Bank Loans
    
    
    20
    %
    
    
    0
    %Non-Performing Mezzanine
Investments
    
    
    15
    %
    
    
    0
    %
 Affiliate
 3




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##### 



Aggregate Commitment Amount
 Aggregate Commitment
  Applicable Lending Office
 Applicable Margin
 Applicable Percentage
 Approved Brokerage Accounts
 Approved Dealer
 Approved Fund
 Approved Pricing Service
 Approved Third Party Appraiser
 4




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##### 



Asset Coverage Ratio
 Assignment and Acceptance Section
10.4(b) Exhibit C
 Availability Period
 Bank Loans
 Base Rate plus
 Borrower
  Borrowing
 Borrowing Availability
 5




---



##### 



Borrowing Base Section 5.13
 Borrowing Base Certificate Exhibit 5.13
 Borrowing Base Deficiency
 Borrowing Limit Section 5.1(e)
 Business Day
 Capital Lease Obligations
 Capital Stock
 Cash
 Cash Equivalents
    6




---



##### 



provided
  provided
 Change in Control
 Change in Law Section 2.16 b
 Class
 7




---



##### 



Clearing Accounts
 Closing Date Section
3.1 Section 3.2 Section
10.2
 Code
 Collateral
 Collateral Accounts
 Commitment
 Commitment Termination Date Section 2.7
 Compliance Certificate Exhibit 5.1(c)
 Contractual Obligation
 Control Agreement
 Covered Debt Amount minus Section 2.20
 8




---



##### 



Credit Exposure
 Deeds of Trust
 Default
 Default Interest Section 2.11 c
 Distributable Cash Flow plus PIK Shares plus Imputed MLP Dividends plus plus provided provided
 Distributable Cash Flow Certificate Exhibit 7.4
 Dollar(s) $
 Eligible Assignee
 9




---



##### 



Section 10.4
 Environmental Laws
 Environmental Liability
 Equity Interests
 ERISA
 ERISA Affiliate
 ERISA Event 
 10




---



##### 



Eurodollar
 Eurodollar Reserve Percentage th
 Event of Default
  Excluded Taxes Section 2.18 e
 Federal Funds Rate th
 11




---



##### 



Fee Letter
 First Lien Bank Loan
 Fiscal Quarter
 Fiscal Year
 Foreign Lender
 GAAP Section 1.3
 Governmental Authority
 Guarantee guarantor primary obligor provided
 Hazardous Materials
 12




---



##### 



Hedging Obligations
 Hedging Transaction
 High Yield Securities
 Indebtedness
 13




---



##### 



Indemnified Taxes
 Information Memorandum
 Intercreditor Agreement
 Interest Period provided,
     Investment Advisory Agreement
 Investment Company Act
 Issuing Bank Section 2.20
 LC Commitment
 14




---



##### 



LC Disbursement
 LC Documents
 LC Exposure plus
 Lenders Section 2.21
 Letter of Credit Section
2.20
 LIBOR provided th
 Lien
 Loan Documents
 15




---



##### 



Loan Parties
 Loans
 Lock-up Agreement Section 7.7
 Lock-up Term
 Long-Term U.S. Government Securities
 Material Adverse Effect
 Material Indebtedness
 Mezzanine Investments
 MLP Subordinated Units
 16




---



##### 



MLP Units Enbridge Kinder
 MLP Warrants Section 5.13(c)
 Moodys
 Multiemployer Plan
 Net Mark to Market Exposure
 Non-Performing First Lien Bank Loans
 Non-Performing High Yield Securities
 Non-Performing Bank Loans
 Non-Performing Mezzanine Investments
 Non-Performing Second Lien Bank Loans
 Non-Performing Unsecured Bank Loans
 Notes
 17




---



##### 



Notice of Conversion/Continuation Section 2.6 b
 Notice of Revolving Borrowing Section 2.3
 Notice of Swingline Borrowing Section 2.4
 Notices of Borrowing
 Obligations
 Off-Balance Sheet Liabilities
 Offer Period
 OSHA
 Other Taxes
 18




---



##### 



Participant Section 10.4(d)
 Payment Office
 PBGC 
 Perfection Certificate
 Performing
 Performing Cash Pay Bank Loans
 Performing Cash Pay High Yield Securities
 Performing Cash Pay Mezzanine Investments
 Performing Common Equity
 Performing First Lien Bank Loans
 Performing MLP Units
 19




---



##### 



Performing MLP Warrants
 Performing Non-Cash Pay Bank Loans
 Performing Non-Cash Pay High Yield Securities
 Performing Non-Cash Pay Mezzanine Investments
 Performing Second Lien Bank Loans
 Performing Unsecured Bank Loans
 Permitted Encumbrances
      20




---



##### 



provided
  provided
 Person
 Plan
 Portfolio Investment Section 5.12(a)(i)
 21




---



##### 



provided
 Preferred Stock
 Pro Rata Share
 Register c Section
10.4
 Regulation D
 Related Parties
 Release
 Required Lenders
 Requirement of Law
 Responsible Officer
 22




---



##### 



 Restricted Payment 
 Revolving Commitment Schedule I Section 2.21
 Revolving Commitment Amount
 Revolving Commitment Termination Date Section 2.7
 Revolving Credit Exposure
 Revolving Credit Note Exhibit A
 Revolving Loan
 RIC Regulated Investment Company 
 Right of First Offer
 S&P
 23




---



##### 



Security Agreement
 Security Documents
 Second Lien Bank Loan
 Securities
 Securities Act
 Shareholders Equity
 Short-Term U.S. Government Securities
 Special Purpose Subsidiary
 Subsidiary parent
 24




---



##### 



Subsidiary Guarantee Agreement
 Subsidiary Guarantor Section
5.11
 Super-Majority Lenders
 Swingline Commitment
 Swingline Exposure Section 2.4
 Swingline Lender
 Swingline Loan
 Swingline Note Exhibit B
 Swingline Rate
 Syndication Agent
 Synthetic Lease
 25




---



##### 



Synthetic Lease Obligations
 Tag Along Rights
 Taxes
 Treasury Credit Agreement
 Treasury Lenders
 Treasury Revolving Commitment Schedule II
 Treasury Revolving Loans
 Type
 Underwriting Policies
 Uniform Commercial Code UCC
 Unsecured Bank Loan
 26




---



##### 



U.S. Government Securities
 Value Section 5.12(a)(ii)(C) Section 5.12(a)(ii)(A) (B)
 Warrant
 Withdrawal Liability
 Section 1.2. Classifications of Loans and Borrowings
 Section 1.3. Accounting Terms and Determination Section 5.1 a provided
 Section 1.4. Terms Generally
 27




---



##### 



ARTICLE II
 AMOUNT AND TERMS OF THE COMMITMENTS
 Section 2.1. General Description of Facilities Section 2.2 Section
2.3 Section 2.20 Section 2.4 provided
 Section 2.2. Revolving Loans provided
 Section 2.3. Procedure for Borrowings Exhibit 2.3 Notice of Borrowing
 28




---



##### 



provided Section 2.4 Section 2.20 d
 Section 2.4. Swingline Commitment
 provided
 Exhibit 2.4 Notice of Swingline Borrowing
 Section 2.5
 29




---



##### 



Section
2.4 c Section
2.4 d Section 2.4
 Section 2.5. Funding of Borrowings
 provided Section 2.4
  30




---



##### 



Section 2.6. Interest Elections .
 Section 2.6
 Section 2.6 Exhibit 2.6(b) Notice of
Conversion/Continuation
 31




---



##### 



Section 2.3
   Section 2.7. Optional Reduction and Termination of Commitments .
  provided Section
2.7
 Section 2.8. Repayment of Loans .
  32




---



##### 



Section 2.9. Evidence of Indebtedness Section 2.6 Section 2.6 prima facie provided
  Section 2.10. Prepayments
 Section 2.11(d provided Section 2.17 Section 2.2 Section 2.4
 33




---



##### 



Section 2.7 Section
2.17 Section 2.20(g)
 Section 2.20(g)
  Section 2.11. Interest on Loans .
 plus
  Default Interest plus plus
  34




---



##### 



Section 2.12. Fees
   Section 2.11(c)
  35




---



##### 



provided further
 Section 2.13. Computation of Interest and Fees .
  Section 2.14. Inability to Determine Interest Rates
 )
  .
 Section 2.15. Illegality .
 36




---



##### 



Section 2.16. Increased Costs
      37




---



##### 



Section 2.16
 Section 2.16
 Section 2.17. Funding Indemnity Section 2.17
 Section 2.18. Taxes .
 provided, Section 2.18
 38




---



##### 



Section 2.18
  or
 39




---



##### 



Section 2.19. Payments Generally; Pro Rata Treatment; Sharing of Set-offs .
 Section 2.16 2.17 2.18 Sections 2.16 2.17 2.18 10.3
   40




---



##### 



provided,
  2.19 d e 2.18 d 10.3 d
 Section 2.20. Letters of Credit .
 Section 2.20 d provided
 41




---



##### 



provided
 Section 2.20 a
 provided
 42




---



##### 



provided Section 3.2 Section 2.3 Section 2.5 .
 provided
 Section 2.20 provided Section 2.11(c)
  43




---



##### 



provided Section
8.1
      44




---



##### 



Section 2.20
  provided
 Section 10.5
 45




---



##### 



Section 2.21. Increase of Commitments; Additional Lenders .
 Additional Commitment Amount
 Section 2.21 Additional Lender provided however
 Section 2.21
 Schedule I
 Section 2.21
 46




---



##### 



Article III
 Section 2.22. Mitigation of Obligations. Section 2.16 Section 2.18 Section 2.16 Section
2.18
 Section 2.23. Replacement of Lenders Section 2.16 Section 2.18 Section 10.4(b provided Section
2.16 Section 2.18
 ARTICLE III
 CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
 Section 3.1. Conditions To Effectiveness
 47




---



##### 



Section 10.2
          48




---



##### 



Exhibit 3.1(b)(vii)
   Exhibit 3.1(c)(x) Section 4.4
    Section
5.1(c) Article VI
 49




---



##### 



Section 3.2. Each Credit Event.
    50




---



##### 



Section 3.2
 Section 3.3. Delivery of Documents
 ARTICLE IV
 REPRESENTATIONS AND WARRANTIES
  Section 4.1. Existence; Power
 Section 4.2. Organizational Power; Authorization
 Section 4.3. Governmental Approvals; No Conflicts
 51




---



##### 



Section 4.4. Financial Statements
 Section 4.5. Litigation and Environmental Matters
  Schedule 4.5
 Section 4.6. Compliance with Laws and Agreements
 Section 4.7. Investment Company Act, Etc.
 52




---



##### 



Section 4.8. Taxes
 Section 4.9. Margin Regulations
 Section 4.10. Underwriting Policies
 Section 4.11. ERISA
 Section 4.12. Ownership of Property
  53




---



##### 



Section 4.4
   Section 4.13. Disclosure
 Section 4.14. Labor Relations
 Section 4.15. Subsidiaries Schedule 4.14
 Section 4.16. Insolvency
 54




---



##### 



Section 4.17. OFAC
 Section 4.18. Patriot Act
 ARTICLE V
 AFFIRMATIVE COVENANTS
  Section 5.1. Financial Statements and Other Information
  55




---



##### 



provided
 provided
    56




---



##### 



Section 5.2. Notices of Material Events
     57




---



##### 



Section 5.2
 Section 5.3. Existence; Conduct of Business provided Section
5.3 Section 7.3
 Section 5.4. Compliance with Laws, Etc.
 Section 5.5. Payment of Obligations.
 Section 5.6. Books and Records
 Section 5.7. Visitation, Inspection, Etc.
 58




---



##### 



provided, however, provided, however
 Section 5.8. Maintenance of Properties; Insurance
 Section 5.9. Use of Proceeds and Letters of Credit
 Section 5.10. Maintenance of RIC Status and Business Development Company
 Section 5.11. Additional Subsidiaries; Additional Collateral Section 3.1
 59




---



##### 



Section 5.12. Portfolio Valuation and Diversifications, Etc.
 Portfolio Valuation Etc.
 Settlement Date Basis provided
 Determination of Values
 Quoted InvestmentsExternal Review
     Unquoted InvestmentsExternal Review provided
   60




---



##### 



Internal Review Section
5.12(a)(ii)(C) Section 5.12(a)(ii)(A) and (B) provided
 Failure to Determine Values Section 5.12(a)
 Investment Company Diversification Requirements
 Section 5.13. Calculation of Borrowing Base Borrowing Base provided
  61




---



##### 



Section 5.1
 Section 5.
 MLP Warrants provided that provided further
    62




---



##### 



Sections 3.1(c)(xvii) 5.1(e) 5.1(f) 7.4(c) 7.4(e)
 Section 5.14. Compliance with Underwriting Policies
 ARTICLE VI
 FINANCIAL COVENANTS
  Section 6.1. Minimum Asset Coverage Ratio
 Section 6.2. Minimum Liquidity
 63




---



##### 



Section 6.3. Minimum Consolidated Shareholders Equity plus
 ARTICLE VII
 NEGATIVE COVENANTS
  Section 7.1. Indebtedness and Preferred Equity
  Schedule 7.1
   Section
7.9
     64




---



##### 



Section 7.2. Negative Pledge
 provided however Section 2.19
  Schedule 7.2 provided
   Section 7.3. Fundamental Changes .
 provided , provided provided
 65




---



##### 



Section 7.4
  Section 7.4. Restricted Payments
    Section 5.1(e) provided
 66




---



##### 



minus
 Section 5.1(e) provided
  Section 7.5. Sale of Assets Section 5.1
 67




---



##### 



Section 7.6. Transactions with Affiliates Section 7.4
 Section 7.7. Restrictive Agreements provided Lock-up Agreement
 Section 7.8. Sale and Leaseback Transactions
 68




---



##### 



Section 7.9. Hedging Transactions .
 Section 7.10. Accounting Changes
 Section 7.11. Amendment to Material Documents
 Section 7.12. Loans, Etc plus minus
 69




---



##### 



Section 7.12
 Section 7.13. Deposit Accounts; Other Accounts
 ARTICLE VIII
 EVENTS OF DEFAULT
 Section 8.1. Events of Default . Event of
Default
  Section 8.1
  Sections 5.1, 5.2 5.3 Articles VI VII
 70




---



##### 



Section 5.1(f)
  Section 8.1
  71




---



##### 



Section 8.1 :
 72




---



##### 



ARTICLE IX
 THE ADMINISTRATIVE AGENT
 Section 9.1. Appointment of Administrative Agent
  Section 9.2. Nature of Duties of Administrative Agent Section 10.2 Section 10.2
 73




---



##### 



Section 9.3. Lack of Reliance on the Administrative Agent
 Section 9.4. Certain Rights of the Administrative Agent
 Section 9.5. Reliance by Administrative Agent
 74




---



##### 



Section 9.6. The Administrative Agent in its Individual Capacity
 Section 9.7. Successor Administrative Agent
  Section 9.7 th
 Section 9.8. Authorization to Execute other Loan Documents
 75




---



##### 



Section 9.9. Documentation Agent; Syndication Agent
 Section 9.10. Approved Third Party Appraiser Release . Exhibit 9.10
 ARTICLE X
 MISCELLANEOUS
 Section 10.1. Notices .
 Written Notices
  To the Borrower:
    
    Kayne Anderson Energy Development Company717 Texas Avenue, Suite 3100Houston, Texas 77002Attention: Terry HartTelecopy Number: (713) 655-7359With a copy to:
    
    Paul, Hastings, Janofsky & Walker LLP55 Second StreetSan Francisco, California 94105Attention: Kevin FisherTelecopy Number: (415) 856-7100To the Administrative Agent:
    
    SunTrust Bank303 Peachtree Street, N. E.Atlanta, Georgia 30308Attention: Sean DrinanTelecopy Number: (404) 827-6514
 76




---



##### 



With a copy to:
    
    SunTrust Bank Agency Services303 Peachtree Street, N. E./25th FloorAtlanta, Georgia 30308Attention: Ms. Doris FolsumTelecopy Number: (404) 658-4906; andKing & Spalding LLP1180 Peachtree Street, NEAtlanta, Georgia 30309Attention: W. Todd HollemanTelecopy Number: (404) 572-5100To the Issuing Bank:
    
    SunTrust Bank25 Park Place, N. E./Mail Code 3706Atlanta, Georgia 30303Attention: John ConleyTelecopy Number: (404) 588-8129To the Swingline Lender:
    
    SunTrust BankAgency Services303 Peachtree Street, N.E./25th FloorAtlanta, Georgia 30308Attention: Ms. Dorris FolsomTelecopy Number: (404) 658-4906To any other Lender:
    
    the address set forth in the Assignmentand Acceptance executed by such Lender
 Section 10.1
  77




---



##### 



Electronic Communications
 provided Article 2 provided
 provided
  Section 10.2. Waiver; Amendments .
 ,
 78




---



##### 



Section 10.2
 provided Section 2.19 Section 10.2 provided further Sections 2.16 2.17 2.18 10.3
 79




---



##### 



Section 10.3. Expenses; Indemnification .
 , Section 10.3
 Indemnitee provided
 80




---



##### 



provided
  Section 10.3
 Section 10.4. Successors and Assigns .
  provided
 81




---



##### 



Minimum Amounts
   Proportionate Amounts pro rata
 Required Consents
    Assignment and Acceptance
 82




---



##### 



No Assignment to Borrower
 No Assignment to Natural Persons
 Approved Third Party Appraiser Release Exhibit 9.10
 Section 10.4 Sections 2.16 2.17 2.18 10.3 Section 10.4
 Register Section
 83




---



##### 



Participant provided
 provided Section 2.19(b) (c) Section 10.4 Section 10.4 2.16 2.17 2.18 Section
10.4 Section 10.7 Section 2.19
 Section
2.16 Section 2.18 Section 2.18 Section
2.18(e)
 84




---



##### 



provided
 Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process .
   Section 10.5 Section 10.5
 Section 10.1
 Section 10.6. WAIVER OF JURY TRIAL
 85




---



##### 



SECTION 10.6
 Section 10.7. Right of Setoff provided
 Section 10.8. Counterparts; Integration
 Section 10.9. Survival Sections 2.16 2.17 2.18 10.3
 86




---



##### 



Section 10.10. Severability
 Section 10.11. Confidentiality Section 10.11 Section 10.11 Section 10.11
 Section 10.12. Interest Rate Limitation Charges Maximum Rate Section 10.12
 87




---



##### 



Section 10.13. Waiver of Effect of Corporate Seal.
 Section 10.14. Patriot Act .
 Section 10.15. NO ORAL AGREEMENTS, WAIVER
  (remainder of page left intentionally blank)
 88




---



##### 



IN WITNESS WHEREOF
 KAYNE ANDERSON ENERGY
DEVELOPMENT COMPANYBy:Name:Title: [SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]




---



##### 



SUNTRUST BANK, as Administrative Agent, as 
Issuing Bank and as a LenderBy:Name:Title: [SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]




---



##### 



CITIBANK, N.A., as Syndication Agent and as a LenderBy:Name:Title: [SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]




---



##### 



MERRILL LYNCH BANK USA, as Co-
Documentation Agent and as a LenderBy:Name:Title: [SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]




---



##### 



UBS LOAN FINANCE LLC, as Co-
Documentation Agent and as a LenderBy:Name:Title: [SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]




---



##### 



CUSTODIAL TRUST COMPANY, as a LenderBy:Name:Title: [SIGNATURE PAGE TO SENIOR SECURED REVLOVING CREDIT AGREEMENT]




---



##### 



Schedule I
 COMMITMENT AMOUNTS
 SunTrust Bank
    
    $
    23,000,000Citibank, N.A.
    
    $
    23,000,000Merrill Lynch Bank USA
    
    $
    22,000,000UBS Loan Finance, LLC
    
    $
    22,000,000Custodial Trust Company
    
    $
    10,000,000




---



##### 



SCHEDULE II
 Approved Dealers and Appraisers




---



##### 



SCHEDULE III
 Approved Brokerage Accounts
 Account Holder
    
    Securities Intermediary
    
    Account NumberKayne Anderson Energy
    
    Bear Stearns Securities
    
    103 02944 98Development Company
    
    CorporationKayne Anderson Energy
    
    Bear Stearns Securities
    
    103 02942 17/25/58Development Company
    
    Corporation




---



##### 



SCHEDULE 4.5
 ENVIRONMENTAL MATTERS




---



##### 



SCHEDULE 4.14
 SUBSIDIARIES
 Company
    
    Owner
    
    Ownership Interests




---



##### 



SCHEDULE 7.1
 OUTSTANDING INDEBTEDNESS




---



##### 



SCHEDULE 7.2
 EXISTING LIENS




---



##### 



EXHIBIT A  FORM OF REVOLVING CREDIT NOTE
 [$]
    
    Atlanta, GeorgiaJune 4, 2007
 Borrower [ name of Lender ] Lender SunTrust Credit
Agreement [ amount of such Lenders
Revolving Commitment ]
  provided ,
  A-1




---



##### 



KAYNE ANDERSON ENERGY DEVELOPMENT COMPANYBy:Name:Title:[SEAL] [SIGNATURE PAGE TO REVOLVING CREDIT NOTE]




---



##### 



LOANS AND PAYMENTS
 Unpaid Principal
    
    Name of PersonAmount and
    
    Payments of
    
    Balance of
    
    MakingDate
    
    Type of Loan
    
    Principal
    
    Note
    
    Notation
 A-3




---



##### 



EXHIBIT B  FORM OF SWINGLINE NOTE
 $10,000,000
    
    Atlanta, GeorgiaJune 4, 2007
 Borrower Swingline Lender SunTrust Credit Agreement
  provided ,
  B-1




---



##### 



KAYNE ANDERSON ENERGY DEVELOPMENT COMPANYBy:Name:Title:[SEAL] [SIGNATURE PAGE TO SWINGLINE NOTE]




---



##### 



LOANS AND PAYMENTS
 Unpaid Principal
    
    
    Name of PersonAmount and
    
    
    Payments of
    
    
    Balance of
    
    
    MakingDate
    
    Type of Loan
    
    
    Principal
    
    
    Note
    
    
    Notation
 B-3




---



##### 



EXHIBIT C  FORM OF ASSIGNMENT AND ACCEPTANCE
 [date to be supplied]
 Credit Agreement
 [ name of assignor] Assignor [ name of assignee] Assignee Assigned Interest
   C-1




---



##### 



Effective Date
 C-2




---



##### 



Percentage Assigned of RevolvingCommitment (set forth, to at least8 decimals, as a percentage of thePrincipal Amount
    
    
    aggregate Revolving Commitments ofFacility
    
    Assigned
    
    
    all Lenders thereunder)Revolving Loans:
    
    $
    
    
    
    %
  [Name of Assignor], as AssignorBy:Name:Title: [Name of Assignee], as AssigneeBy:Name:Title: C-3




---



##### 



1
 KAYNE ANDERSON ENERGY 
DEVELOPMENT COMPANY
    
    
    
    SunTrust Bank, as Administrative Agent:By:
    
    
    
    
    
    By:Name:
    
    
    
    
    
    Name:Title:
    
    
    
    
    
    Title:
 
 1
    
    Consents to be included to the extent
required by Section 10.4(b) of the Credit Agreement. [SIGNATURE
PAGE TO ASSIGNMENT AND ACCEPTANCE]




---



##### 



EXHIBIT D  SUBSIDIARY GUARANTY AGREEMENT
 THIS SUBSIDIARY GUARANTY AGREEMENT Agreement Borrower Schedule I Guarantor Guarantors Administrative Agent Lenders Credit Agreement
 W I T N E S S E T H:
 WHEREAS
 WHEREAS
 WHEREAS
 NOW, THEREFORE
 Section 1. Guarantee
 D-1




---



##### 



Specified Hedge Provider Secured Parties Secured
Party Guaranteed Obligations
 Section 2. Obligations Not Waived Hedging Document
 Section 3. Guarantee of Payment
 D-2




---



##### 



Section 4. No Discharge or Diminishment of Guarantee
 Section 5. Defenses of Borrower Waived
 Section 6. Agreement to Pay; Subordination
 D-3




---



##### 



Section 7. Information
 Section 8. Indemnity and Subrogation Section 6
 Section 9. Contribution and Subrogation Contributing
Guarantor Section 6 Claiming Guarantor Section 8 Section 21 Section 9 Section
8
 D-4




---



##### 



Section 10. Subordination Section 8 Section 9
 Section 11. Representations and Warranties
 Section 12. Termination
 Section 13. Binding Effect; Several Agreement; Assignments
 D-5




---



##### 



Section 14. Waivers; Amendment
   Section 15. Notices Schedule I
 Section 16. Severability
 Section 17. Counterparts; Integration Section 13 Section 13
 D-6




---



##### 



Section 18. Rules of Interpretation
 Section 19. Governing Law; Jurisdiction; Consent to Service of Process
 [State]
    Section 20. Waiver of Jury Trial
 D-7




---



##### 



Section 21. Additional Guarantors Annex 1
 Section 22. Right of Setoff Section 22
 Section 23. Savings Clause
  et seq. Bankruptcy
Code
 D-8




---



##### 



Avoidance Provisions Section 23(a)(i) (ii) (iii)
 Section 23
 D-9




---



##### 



Section 23
 Signatures Follow
 D-10




---



##### 



IN WITNESS WHEREOF
 KED MME Investment Partners, LPByName:Title:KED MME Investment GP, LLCByName:Title:KED LCP Investment Partners, LPByName:Title:KED LCP Investment GP, LLCByName:Title:KED DF Investment Partners, LPByName:Title:
 [SIGNATURE PAGE TO SUBSIDIARY GUARANTY AGREEMENT]




---



##### 



KED DF Investment GP, LLCByName:Title:KED VP Investment Partners, LPByName:Title:KED VP Investment GP, LLCByName:Title:KAYNE ANDERSON ENERGY DEVELOPMENT COMPANYByName:Title:
 [SIGNATURE PAGE TO SUBSIDIARY GUARANTY AGREEMENT]




---



##### 



SUNTRUST BANK
  ByName:Title:
 [SIGNATURE PAGE TO SUBSIDIARY GUARANTY AGREEMENT]




---



##### 



SCHEDULE I TO THE
SUBSIDIARY GUARANTY AGREEMENT
 Guarantor(s)
    
    AddressKayne Anderson Energy Development Company
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED MME Investment Partners, LP
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED MME Investment GP, LLC
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED LCP Investment Partners, LP
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED LCP Investment GP, LLC
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED DF Investment Partners, LP
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED DF Investment GP, LLC
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED VP Investment Partners, LP
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002KED VP Investment GP, LLC
    
    717 Texas Avenue, Suite 3100,
Houston, TX, 77002
 D-12




---



##### 



ANNEX 1
 SUPPLEMENT NO.  Guaranty Agreement Borrower Schedule I Guarantor Guarantors Administrative Agent
 Credit
Agreement Lenders Issuing Bank
  New Guarantor
  Joinder
 D-13




---



##### 



Representations and Warranties.
 Binding Effect.
 Governing Law.
 Execution in Counterparts.
 Notices to New Guarantor.
 Signatures Follow
 D-14




---



##### 



IN WITNESS WHEREOF
 [NAME OF NEW GUARANTOR]By:Name:Title:  
Address: SUNTRUST BANK, as
Administrative AgentBy:Name:Title:




---



##### 



EXHIBIT 2.3  FORM OF NOTICE OF REVOLVING BORROWING
 
 
  Credit Agreement
 (A)
    
    Aggregate principal amount of Revolving
Borrowing1:(B)
    
    Date of Revolving Borrowing (which is a Business
Day)2:(C)
    
    Interest Rate
basis3:(D)
    
    Interest
Period4:(E)
    
    Location and number of Borrowers account to which proceeds of Revolving
Borrowing are to be disbursed:
 
 1
    
    Not less than $1,000,000 and an integral
multiple of $250,000 for Eurodollar borrowing and not less than $250,000 and an
integer multiple of $100,000 for Base Rate Borrowing.2
    
    With respect to Base Rate Borrowings, notice
must be given prior to 11:00 a.m. (New York time) on the day of borrowing, and
with respect to Eurodollar Borrowings, notice must be given prior to 2:00 p.m.
(New York time) no later than three (3) business days prior to the date of
borrowing.3
    
    Eurodollar Borrowing or Base Rate Borrowing.4
    
    Which must comply with the definition of
Interest Period and end not later than the Revolving Commitment
Termination Date.




---



##### 



Very truly yours,KAYNE ANDERSON ENERGY DEVELOPMENT COMPANYBy:Name:Title:[SIGNATURE PAGE TO NOTICE OF
REVOLVING BORROWING]




---



##### 



EXHIBIT 2.4  FORM OF NOTICE OF SWINGLINE BORROWING
 
 
  Credit Agreement
 (A)
    
    Principal amount of Swingline
Loan1:(B)
    
    Date of Swingline Loan (which is a Business
Day)2(C)
    
    Location and number of Borrowers account to which proceeds of Swingline Loan
are to be disbursed:
 
 1
    
    Not less than $100,000 and an integral
multiple of $50,000.2
    
    Notice must be given prior to 10:00 a.m. (New
York time) on the day of borrowing




---



##### 



Very truly yours,KAYNE ANDERSON ENERGY DEVELOPMENT COMPANYBy:Name:Title:[SIGNATURE PAGE TO NOTICE OF
SWINGLINE BORROWING]




---



##### 



EXHIBIT 2.6(b)  FORM OF CONTINUATION/CONVERSION
 
 
  Credit Agreement
 (A)
    
    Revolving Borrowing to which this request applies:(B)
    
    Principal amount of Revolving Borrowing to be
converted/continued:(C)
    
    Effective date of election (which is a Business Day):(D)
    
    Interest rate basis:(E)
    
    Interest Period:




---



##### 



Very truly yours,KAYNE ANDERSON ENERGY DEVELOPMENT COMPANYBy:Name:Title:[SIGNATURE PAGE TO
CONTINUATION/CONVERSION]




---



##### 



EXHIBIT 3.1(c)(vii)  FORM OF SECRETARYS CERTIFICATE OF KAYNE ANDERSON ENERGY
DEVELOPMENT COMPANY
 Credit Agreement Borrower
 [    ]
   [ Date ] 1
 [ date ]
 
 1
    
    This date should be prior to the date of the
resolutions referred to in clause (d). Exhibit
3.1(c)(vii)-1




---



##### 



[   ]
 Name
    
    Title
    
    Specimen Signature
  Name
Secretary
 [ Assistant ] [ his/her ] [ he/she ] [  ] 1
 Name:Title:
 
 1
    
    This certification should be included as
part of the Secretarys certificate and signed by one of the officers
whose incumbency is certified pursuant to clause (e) above.




---



##### 



EXHIBIT
A
 [Bylaws]
 Exhibit
3.1(c)(vii)-3




---



##### 



EXHIBIT B
 [ Resolutions ]




---



##### 



EXHIBIT 3.1(c)(x)  FORM OF RESPONSIBLE OFFICERS CERTIFICATE
 Credit Agreement Borrower
 [   ]
   [ the date ]




---



##### 



Name:Title:




---



##### 



EXHIBIT 5.1(c)  FORM OF COMPLIANCE CERTIFICATE
 
 To:
    
    SunTrust Bank, as Administrative Agent303 Peachtree St., N.E.Atlanta, GA 30308Attention:
  Credit Agreement Borrower
 [chief executive officer][chief financial officer]
 [ quarter ][ year ]   [ quarter ][ year ] [ quarter ][ year ]
 Attachment 1
   Exhibit
5.1(c)-1




---



##### 



Name:Title:




---



##### 



Attachment to Compliance Certificate




---



##### 



EXHIBIT 5.1(E)
 [FORM OF ]
 BORROWING BASE CERTIFICATE
 KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
 Date: [  ]
 Borrower Credit Agreement
 
   
 [Signature page to follow]




---



##### 



IN WITNESS WHEREOF
 KAYNE ANDERSON ENERGY
DEVELOPMENT COMPANYBy:Name:Title:
 [SIGNATURE PAGE TO BORROWING BASE CERTIFICATE]




---



##### 



Schedule 1
Borrowing Base Certificate
 BORROWING BASE CALCULATIONKAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
  1. Value of Portfolio Investments multiplied by the Advance Rates
(see pages 2-5 of Schedule 1)
    
    $2. LESS: Value of Portfolio Investments of all issuers in a
consolidated group of corporations or other entities that exceeds 10%
but is less than or equal to 20% of Shareholders Equity multiplied by
the Advance Rates (included in 1 above) (see page 6 of Schedule 1)
    
    $
    (____
    )3. PLUS: Value of Portfolio Investments of all issuers in a
consolidated group of corporations or other entities that exceeds 10%
but is less than or equal to 20% of Shareholders Equity multiplied by
the 50% of the Advance Rates (see page 6 of Schedule 1)
    
    $4. LESS: Value of Portfolio Investments of all issuers in a
consolidated group of corporations or other entities that exceeds 20%
of Shareholders Equity multiplied by the Advance Rates (included in 1
above) (see page 7 of Schedule 1)
    
    $
    (___
    )5. LESS: Value of Portfolio Investments subject to a Lock-up
agreement with remaining term of 90 days or less multiplied by 10%
(included in 1 above) (see page 7 of Schedule 1)
    
    $
    (___
    )6. LESS: Value of Portfolio Investments subject to a Lock-up
agreement with remaining term of more than 90 days but less than or
equal to 180 days multiplied by 20% (included in 1 above) (see page 7
of Schedule 1)
    
    $
    (___
    )7. LESS: Value of Portfolio Investments subject to a Right of First
Offer that is for an Offer Period of more than 45 days but less than
or equal to 90 days multiplied by 10% (included in 1 above) (see
page 8 of Schedule 1)
    
    $
    (___
    )8. LESS: Value of Portfolio Investments subject to a Right of First
Offer that is for an Offer Period of more than 90 days multiplied by
the Advance Rates (included in 1 above) (see page 8 of Schedule 1)
    
    $
    (___
    )9. LESS: Value of Portfolio Investments multiplied by the percentage
of the Portfolio Investment that can be restricted from sale by the
operation of Tag Along Rights multiplied by the Advance Rates
(included in 1 above) (see page 8 of Schedule 1)
    
    $
    (___
    )10. LESS: Value of Portfolio Investments that exceed certain
percentages of the Borrowing Base as set forth in Section 5.13(c) of
the Credit Agreement (included in 1 above) (see pages 9  10 of
Schedule 1)
    
    $
    (___
    )Borrowing Base
    
    $
    




---



##### 



1.Portfolio2.
    
    Investments
    
    Abbreviated
    
    Value
    
    
    
    Advance Rate3.4.
    
    Cash, Cash
Equivalents and
Short-Term U.S.
Government
Securities
    
    cash
    
    $
    
    multiplied by
    
    100%
    
    =
    
    $5.
    
    Long-Term U.S.
Government
Securities
    
    lt us govt
    
    $
    
    multiplied by
    
    95%
    
    =
    
    $6.
    
    quoted Performing
First Lien Bank
Loans
    
    q 1st
    
    $
    
    multiplied by
    
    80%
    
    =
    
    $7.
    
    unquoted Performing
First Lien Bank
Loans
    
    uq 1st
    
    $
    
    multiplied by
    
    70%
    
    =
    
    $8.
    
    quoted Performing
Second Lien Bank
Loans
    
    q 2nd
    
    $
    
    multiplied by
    
    70%
    
    =
    
    $9.
    
    unquoted Performing
Second Lien Bank
Loans
    
    uq 2nd
    
    $
    
    multiplied by
    
    60%
    
    =
    
    $10.
    
    quoted Performing
Unsecured Bank
Loans
    
    q unsec
    
    $
    
    multiplied by
    
    65%
    
    =
    
    $11.
    
    unquoted Performing
Unsecured Bank
Loans
    
    uq unsec
    
    $
    
    multiplied by
    
    55%
    
    =
    
    $12.
    
    quoted Performing
Non-Cash Pay Bank
Loans
    
    q non-cash loans
    
    $
    
    multiplied by
    
    55%
    
    =
    
    $13.
    
    unquoted Performing
Non-Cash Pay Bank
Loans
    
    uq non-cash loans
    
    $
    
    multiplied by
    
    45%
    
    =
    
    $




---



##### 



PortfolioInvestments
    
    Abbreviated
    
    Value
    
    
    
    Advance Rate14.
    
    quoted Performing
Cash Pay High Yield
Securities
    
    q cash pay hy
    
    $
    
    multiplied by
    
    60%
    
    =
    
    $15.
    
    unquoted Performing
Cash Pay High Yield
Securities
    
    uq cash pay hy
    
    $
    
    multiplied by
    
    50%
    
    =
    
    $16.
    
    quoted Performing
Cash Pay Mezzanine
Investments
    
    q cash mezz
    
    $
    
    multiplied by
    
    55%
    
    =
    
    $17.
    
    unquoted Performing
Cash Pay Mezzanine
Investments
    
    uq cash mezz
    
    $
    
    multiplied by
    
    45%
    
    =
    
    $18.
    
    quoted Performing
MLP Units (and
Performing MLP
Warrants directly
linked to such
units)
    
    q mlp
    
    $
    
    multiplied by
    
    50%
    
    =
    
    $19.
    
    unquoted Performing
MLP Units (and
Performing MLP
Warrants directly
linked to such
units)
    
    uq mlp
    
    $
    
    multiplied by
    
    45%
    
    =
    
    $20.
    
    quoted Performing
Non-Cash Pay High
Yield Securities
    
    q non-cash hy
    
    $
    
    multiplied by
    
    50%
    
    =
    
    $21.
    
    unquoted Performing
Non-Cash Pay High
Yield Securities
    
    uq non-cash hy
    
    $
    
    multiplied by
    
    40%
    
    =
    
    $22.
    
    quoted Performing
Common Equity, MLP
Subordinated Units
    
    q common
    
    $
    
    multiplied by
    
    45%
    
    =
    
    $




---



##### 



PortfolioInvestments
    
    Abbreviated
    
    Value
    
    
    
    Advance Rate23.
    
    quoted Warrants
(other than the MLP
Warrants)
    
    q warrants
    
    $
    
    multiplied by
    
    45%
    
    =
    
    $24.
    
    unquoted Performing
Common Equity, MLP
Subordinated Units
    
    uq common
    
    $
    
    multiplied by
    
    40%
    
    =
    
    $25.
    
    unquoted Warrants
(other than the MLP
Warrants),
    
    uq warrants
    
    $
    
    multiplied by
    
    40%
    
    =
    
    $26.
    
    quoted Performing
Non-Cash Pay
Mezzanine
Investments and the
in-the-money
equity component of
any convertible
debt Securities
constituting
Mezzanine
Investments that
are convertible at
the holders option
    
    q non-cash mezz
    
    $
    
    multiplied by
    
    45%
    
    =
    
    $27.
    
    unquoted Performing
Non-Cash Pay
Mezzanine
Investments and the
in-the-money
equity component of
any convertible
debt Securities
constituting
Mezzanine
Investments that
are convertible at
the holders option
    
    uq non-cash mezz
    
    $
    
    multiplied by
    
    35%
    
    =
    
    $28.
    
    quoted
Non-Performing
First Lien Bank
Loans
    
    q non-perf 1st
    
    $
    
    multiplied by
    
    35%
    
    =
    
    $29.
    
    quoted
Non-Performing
Second Lien Bank
Loans
    
    q non-perf 2nd
    
    $
    
    multiplied by
    
    25%
    
    =
    
    $




---



##### 



PortfolioInvestments
    
    Abbreviated
    
    Value
    
    
    
    Advance Rate30.
    
    quoted
Non-Performing High
Yield Securities
    
    q non-perf hy
    
    $
    
    multiplied by
    
    25%
    
    =
    
    $31.
    
    quoted
Non-Performing
Unsecured Bank
Loans
    
    q non-perf unsec
    
    $
    
    multiplied by
    
    20%
    
    =
    
    $32.
    
    quoted
Non-Performing
Mezzanine
Investments
    
    q non-perf mezz
    
    $
    
    multiplied by
    
    15%
    
    =
    
    $33.
    
    The sum of the
Advance Rates of
the Value of each
Portfolio Investment
    
    
    
    (The sum of  lines1-32 above)
    
    
    
    
    
    =
    
    $




---



##### 



34.
    
    Shareholders Equity
    
    
    
    
    
    
    
    
    
    =
    
    $35.
    
    10% of Stockholders
    
    

    
    line 34Equity
    
    
    
    $

    
    multiplied by 10%

    

    

    
    =
    
    $amount that exceedsValue of Portfolio
    
    
    
    10% but is less
    
    
    
    amount that exceedsInvestments of all
    
    
    
    than or equal to
    
    
    
    10% of StockholdersAdvance Rate
    
    issuers in a
    
    10% of Stockholders
    
    20% of Stockholders
    
    
    
    Equity multiplied36.

    
    Portfolio Investment
    
    category
    
    consolidated group
    
    Equity
    
    Equity
    
    Advance Rate
    
    by Advance Rate37.
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $38.
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $39.
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $40.
    
    Total
    
    
    
    $
    
    
    
    
    
    
    
    $
 amount that exceeds
    
    
    
    amount that exceedsValue of Portfolio
    
    
    
    10% but is less
    
    
    
    10% of StockholdersInvestments of all
    
    
    
    than or equal to
    
    
    
    Equity multipliedAdvance Rate
    
    issuers in a
    
    10% of Stockholders
    
    20% of Stockholders
    
    
    
    by 50% of Advance41.
    
    Portfolio Investment
    
    category
    
    consolidated group
    
    Equity
    
    Equity
    
    50% of Advance Rate
    
    Rate42.
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $43.
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $44.
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $45.
    
    Total
    
    
    
    $
    
    
    
    
    
    
    
    $




---



##### 



46.
    
    20% of
StockholdersEquity
    
    
    line 34

    

    multiplied
by 20%
    
    
    
    =
    
    $
 Value of Portfolio
    
    
    
    
    
    
    
    amount that exceedsInvestments of all
    
    
    
    amount that exceeds
    
    
    
    20% of StockholdersAdvance Rate
    
    issuers in a
    
    20% of Stockholders
    
    20% of Stockholders
    
    
    
    Equity multiplied47.
    
    Portfolio Investment
    
    category
    
    consolidated group
    
    Equity
    
    Equity
    
    Advance Rate
    
    by Advance Rate48.
    
    
    
    
    
    
    
    $
    
    
    
    %
    
    $49.
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    $
  Value of PortfolioAdvance Rate
    
    Value of Portfolio
    
    
    
    InvestmentPortfolio Investment
    
    category
    
    Investment
    
    multiplied by 10%
    
    multiplied by 10%50.
    
    
    
    
    
    $
    
    10%
    
    $51.
    
    
    
    
    
    $
    
    10%
    
    $52.
    
    
    
    
    
    $
    
    10%
    
    $53.
    
    Total
    
    
    
    
    
    
    
    $
  Value Of PortfolioAdvance Rate
    
    Value Of Portfolio
    
    
    
    InvestmentPortfolio Investment
    
    category
    
    Investment
    
    multiplied by 20%
    
    multiplied by 20%54.
    
    
    
    
    
    $
    
    20%
    
    $55.
    
    
    
    
    
    $
    
    20%
    
    $56.
    
    
    
    
    
    $
    
    20%
    
    $57.
    
    Total
    
    
    
    
    
    
    
    $




---



##### 



Value of
    
    
    
    
    
    Value of PortfolioAdvance
    
    Portfolio
    
    multiplied
    
    InvestmentPortfolio Investment
    
    Rate category
    
    Investment
    
    by 10%
    
    multiplied by 10%$
    
    
    
    
    10
    %
    
    $Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
  multiplied
    
    Value of PortfolioValue of
    
    by the
    
    InvestmentAdvance
    
    Portfolio
    
    Advance
    
    multiplied by thePortfolio Investment
    
    Rate category
    
    Investment
    
    Rate
    
    Advance Rate$
    
    
    
    
    
    %
    
    $Total
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
  Value ofPortfolioInvestmentthat can beValue of
    
    
    
    
    
    restrictedPortfolio
    
    
    
    
    
    from salepercentage of
    
    Investment
    
    
    
    
    
    by thePortfolio
    
    that can be
    
    
    
    
    
    operationInvestment that
    
    restricted
    
    
    
    
    
    of Tagcan be
    
    from sale
    
    
    
    
    
    Alongrestricted from
    
    by the
    
    
    
    
    
    Rightssale by the
    
    operation
    
    
    
    
    
    multipliedAdvance
    
    Value Of
    
    operation of
    
    of Tag
    
    multiplied
    
    byRate
    
    Portfolio
    
    Tag Along
    
    Along
    
    by
    
    AdvancePortfolio Investment
    
    category
    
    Investment
    
    Right
    
    Rights
    
    Advance Rate
    
    Rate58.
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $59.
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $60.
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $




---



##### 



61.
    
    
    the portion of the
Borrowing Base
attributable to the
aggregate amount of
Non-Performing Bank
Loans,
Non-Performing High
Yield Securities,
Non-Performing
Mezzanine, Warrants
(other than the MLP
Warrants)
    
    (the sum of lines
23, 25, 28-32)
    
    
    
    
    
    
    
    =
    
    $62.
    
    
    10% borrowing base 
limitation
    
    (Borrowing Base
amount from page 1)
$
    
    multiplied by
    
    
    10
    %
    
    =
    
    $63.
    
    
    adjustment to
Borrowing Base if
line 61 is greater
than line 62, if
not, then zero
    
    (Amount from line 61
$
    
    minus
    
    (amount from line
62)
$
    
    =
    
    $64.
    
    
    the portion of the
Borrowing Base
attributable to the
aggregate amount of
unquoted Performing
Common Equity, MLP
Subordinated Units,
Performing Non-Cash
Pay Bank Loans,
Non-Performing Bank
Loans,
Non-Performing High
Yield Securities,
Non-Performing
Mezzanine, Warrants
(other than the MLP
Warrants)
    
    (amount from lines
12, 13, and 22
$
    
    plus
    
    (amount from line
61)
$
    
    =
    
    $65.
    
    
    20% borrowing base 
limitation
    
    (Borrowing Base
amount from page 1)
$
    
    multiplied by
    
    
    20
    %
    
    =
    
    $




---



##### 



66.
    
    
    adjustment to
Borrowing Base if
line 64 is greater
than line 65, if
not, then zero
    
    (amount from line 64
$
    
    minus
    
    (amount from line
65)
$
    
    =
    
    $67.
    
    
    the portion of the
Borrowing Base
attributable to the
aggregate amount of
unquoted Performing
MLP Units (and
associated MLP
Warrants directly
linked to such
units), unquoted
Performing Common
Equity, MLP
Subordinated Units,
Performing Non-Cash
Pay Bank Loans,
Non-Performing Bank
Loans,
Non-Performing High
Yield Securities,
Non-Performing
Mezzanine, Warrants
(other than the MLP
Warrants)
    
    (amount from line
19, PLUS 42-44,
LESS 37-39, 48,
50-52, 54-56, 58,
59)
$
    
    plus
    
    (amount from line
64)
$
    
    =
    
    $68.
    
    
    35% borrowing base 
limitation
    
    (Borrowing Base
amount from page 1)
$
    
    multiplied by
    
    
    35
    %
    
    =
    
    $69.
    
    
    adjustment to
Borrowing Base if
line 67 is greater
than line 68, if
not, then zero
    
    (amount from line 67
$
    
    minus
    
    (amount from line
68)
$
    
    =
    
    $70.
    
    
    total adjustment to
Borrowing Base if
lines 63, 66, or 69
are greater than
zero, if not, then
zero
    
    (the greater of
amount from lines
63, 66 and 69
$
    
    
    
    
    
    
    
    =
    
    $




---



##### 



EXHIBIT 7.4
 [FORM OF ]
 DISTRIBUTABLE CASH FLOW CERTIFICATE
 KAYNE ANDERSON ENERGY DEVELOPMENT COMPANY
 Date: [  ]
 Borrower Credit Agreement
 
   
 [Signature page to follow]




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##### 



IN WITNESS WHEREOF
 KAYNE ANDERSON ENERGY
DEVELOPMENT COMPANYBy:Name:Title: