# EDGAR Filing Document

**Accession Number:** 0001521945
**File Stem:** 0001521945-26-000031
**Filing Date:** 2026-3
**Character Count:** 247522
**Document Hash:** a0821a14b315f1dbc5b9102cd3ecf4d2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001521945-26-000031.hdr.sgml**: 20260306

**ACCESSION NUMBER**: 0001521945-26-000031

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 17

**CONFORMED PERIOD OF REPORT**: 20260306

**ITEM INFORMATION**: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

**ITEM INFORMATION**: Submission of Matters to a Vote of Security Holders

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260306

**DATE AS OF CHANGE**: 20260306

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Prospect Floating Rate & Alternative Income Fund, Inc.
- **CENTRAL INDEX KEY:** 0001521945

**ORGANIZATION NAME:**
- **EIN:** 452460782
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 814-00908
- **FILM NUMBER:** 26730452

**BUSINESS ADDRESS:**
- **STREET 1:** 10 EAST 40TH STREET, 42ND FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10016
- **BUSINESS PHONE:** 212-448-0702

**MAIL ADDRESS:**
- **STREET 1:** 10 EAST 40TH STREET, 42ND FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10016

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Prospect Sustainable Income Fund, Inc.
- **DATE OF NAME CHANGE:** 20220112

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Prospect Flexible Income Fund, Inc.
- **DATE OF NAME CHANGE:** 20200806

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TP Flexible Income Fund, Inc.
- **DATE OF NAME CHANGE:** 20190401

?xml version='1.0' encoding='ASCII'? pfloat-20260306

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**FORM 8-K** 

**CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported): March 6, 2026 (March 4, 2026)**

**Prospect Floating Rate and Alternative Income Fund, Inc.**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Maryland** | **814-00908** | **45-2460782** |
| (State or other jurisdiction | (Commission File Number) | (IRS Employer |
| of incorporation) | | Identification No.) |

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**10 East 40th Street, New York, New York 10016**

(Address of principal executive offices, including zip code)

**(212) 448-0702**

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **<u>Title of each class</u>** | **<u>Trading symbol</u>** | **<u>Name of each exchange on which registered</u>** |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

□Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.□

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**Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.**

***Fifth Articles of Amendment and Restatement***

On March 4, 2026, the stockholders of Prospect Floating Rate and Alternative Income Fund, Inc. (the "Company") approved the Company's Fifth Articles of Amendment and Restatement for the purpose of amending the Company's Fourth Articles of Amendment and Restatement to conform to provisions of the North American Securities Administrators Association ("NASAA") Omnibus Guidelines ("Omnibus Guidelines"). The amendments among other things: (1) increase the quorum for stockholder meetings from one third to 50% of shares of common stock entitled to vote on the matter to be approved at the stockholder meeting; (2) divide the authorized common stock into four different classes of common stock; (3) allow that meetings of stockholders be called by the adviser or stockholders holding 10% or more of the then outstanding shares, for any matters for which the stockholders may vote; (4) allow holders of a majority of the then outstanding shares entitled to vote to remove directors without cause, without the necessity for concurrence by the sponsor, the adviser or the board of directors of the Company; and (5) include other technical, conforming (including to the NASAA Omnibus Guidelines) or clarifying revisions.

On March 6, 2026, the Company filed its Fifth Articles of Amendment and Restatement with the State Department of Assessments and Taxation of Maryland and the amendment became effective immediately upon filing.

A copy of the Fifth Articles of Amendment and Restatement is attached hereto as Exhibit 3.1 to this Current Report on Form 8-K.

***Fifth Amended and Restated Bylaws***

On March 4, 2026, the Company adopted the Fifth Amended and Restated Bylaws for the purpose of amending the Company's Fourth Amended and Restated Bylaws to conform to provisions of the NASAA Omnibus Guidelines. The amendments among other things: (1) change the voting standard for the election of directors from a plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present to the affirmative vote of the holders of a majority of the shares of stock outstanding and entitled to vote thereon; (2) provide that any alteration, amendment or repeal of the bylaws that adversely affects the rights of the stockholders shall require the concurrence by holders of a majority of the shares entitled to vote on the matter; and (3) include other technical, conforming (including to the NASAA Omnibus Guidelines) or clarifying revisions.

A copy of the Fifth Amended and Restated Bylaws is attached hereto as Exhibit 3.2 to this Current Report on Form 8-K.

**Item 5.07. Submission of Matters to a Vote of Security Holders.**

On March 4, 2026, the Company held a Special Meeting of Stockholders at the Company's offices at 10 East 40th Street, 42nd Floor, New York, New York 10016 (the "Special Meeting"). At the Special Meeting, the Company's common stockholders voted on one proposal, which was approved. The proposal is described in detail in the Company's definitive information statement for the Special Meeting as filed with the Securities and Exchange Commission (the "SEC") on January 14, 2026. As of January 13, 2026, the record date, 9,203,906 shares of common stock were eligible to vote. The final voting results from the Special Meeting were as follows:

**Proposal 1.** &nbsp;&nbsp;&nbsp;&nbsp; The Company's stockholders approved the proposed Fifth Articles of Amendment and Restatement of the Company pursuant to the voting results set forth below:

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| | | | |
|:---|:---|:---|:---|
| **For** | **Against** | **Abstained** | **Broker Non-Votes** |
| 7,247,115 |  |  |  |

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**Item 8.01. Other Events.**

***Second Amended and Restated Investment Advisory Agreement***

On March 4, 2026, the Company entered into the Second Amended and Restated Investment Advisory Agreement with Prospect Capital Management L.P. for the purpose of amending the First Amended and Restated Investment Advisory Agreement to effect certain immaterial changes requested by certain state securities regulatory authorities based on the NASAA Omnibus Guidelines.

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A copy of the Second Amended and Restated Investment Advisory Agreement is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K.

***Second Amended and Restated Administration Agreement***

On March 4, 2026, the Company entered into the Second Amended and Restated Administration Agreement with Prospect Administration LLC for the purpose of amending the First Amended and Restated Administration Agreement to effect certain immaterial changes requested by certain state securities regulatory authorities based on the NASAA Omnibus Guidelines.

A copy of the Second Amended and Restated Administration Agreement is attached hereto as Exhibit 10.2 to this Current Report on Form 8-K.

**Item 9.01. Financial Statements and Exhibits**

(d) Exhibits

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| | |
|:---|:---|
| <u>Exhibit No.</u> | <u>Description</u> |
| <u>[3.1](exhibit31-pfloatxfiftharti.htm)</u> | <u>[Fifth Articles of Amendment and Restatement](exhibit31-pfloatxfiftharti.htm)</u> |
| <u>[3.2](exhibit32-pfloatxfifthamen.htm)</u> | <u>[Fifth Amended and Restated Bylaws](exhibit32-pfloatxfifthamen.htm)</u> |
| <u>[10.1](exhibit101-pfloatxsecondam.htm)</u> | <u>[Second Amended and Restated Investment Advisory Agreement, by and between Prospect Floating Rate and Alternative Income Fund, Inc. and Prospect Capital Management L.P.](exhibit101-pfloatxsecondam.htm)</u> |
| <u>[10.2](exhibit102-pfloatxsecondam.htm)</u> | <u>[Second Amended and Restated Administration Agreement, by and between Prospect Floating Rate and Alternative Income Fund, Inc. and Prospect Administration LLC](exhibit102-pfloatxsecondam.htm)</u> |

---

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | |
|:---|:---|:---|
| Dated: March 6, 2026 | Prospect Floating Rate and Alternative Income Fund, Inc. | Prospect Floating Rate and Alternative Income Fund, Inc. |
| | By | /s/ M. Grier Eliasek |
| | | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M. Grier Eliasek<br>Chief Executive Officer<br>(Principal Executive Officer) |

---

## Exhibit 3.1

**FIFTH ARTICLES OF AMENDMENT AND RESTATEMENT<br>OF<br>PROSPECT FLOATING RATE AND ALTERNATIVE INCOME FUND, INC.**

FIRST: Prospect Floating Rate and Alternative Income Fund, Inc. (the "Corporation"), a Maryland corporation, desires to amend and restate its charter.

SECOND: The following provisions are all the provisions of the charter of Prospect Floating Rate and Alternative Income Fund, Inc. currently in effect and as hereinafter amended:

**ARTICLE I**

**NAME**

The name of the corporation is **Prospect Floating Rate and Alternative Income Fund, Inc.** 

**ARTICLE II**

**PURPOSE**

The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations may be organized under the general laws of the State of Maryland as now or hereafter in force, including conducting and carrying on the business of a business development company, subject to making an election therefor under the Investment Company Act of 1940, as amended (the "1940 Act").

**ARTICLE III**

**RESIDENT AGENT AND PRINCIPAL OFFICE**

The name and address of the resident agent of the Corporation in Maryland is Registered Agents Inc, 5000 Thayer Center, Suite C, Oakland, MD 21550. The street address of the principal office of the Corporation in the State of Maryland is 5000 Thayer Center, Suite C, Oakland, MD 21550.

**ARTICLE IV**

**PROVISIONS FOR DEFINING, LIMITING AND REGULATING CERTAIN POWERS OF THE CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS**

Section 4.1 <u>Number, Term and Election of Directors</u>. The business and affairs of the Corporation shall be managed under the direction of the board of directors. The number of directors of the Corporation is four (4), which number may be increased or decreased from time to time by the board of directors pursuant to the bylaws of the Corporation ("Bylaws"). Notwithstanding the foregoing sentence, the number of directors that shall comprise the Corporation's board of directors shall not be less than three, except for a period of up to 60 days after the death, removal or resignation of a director pending the election of such director's successor. Each director shall hold office for one year, until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies. Directors may be elected to an unlimited number of successive terms. Any director elected by the directors without a stockholder vote to fill a vacancy as a result of the expansion of the size of the board of directors who remains a director of the Corporation at the time of the next annual meeting of stockholders shall be submitted to the stockholders for election to the board of directors at such annual meeting of stockholders.

A majority of the board of directors shall be independent directors, except for a period of up to 60 days after the death, removal or resignation of an independent director pending the election of such independent director's successor. A director is considered independent if he or she is not an "interested person" as that term is defined

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under Section 2(a)(19) of the 1940 Act. The names of the directors currently in office are M. Grier Eliasek, Andrew Cooper, William Gremp and Eugene Stark.

The Corporation elects, at all times that it is eligible to so elect, to be subject to the provisions of Section 3-803 of the Maryland General Corporation Law (the "MGCL"), the repeal of which may be effected only by the means authorized by Section 3-802(b)(3) of the MGCL, for the creation of a classified board structure consisting of three director classes of three years each. The corporation shall also be subject to Section 3-804(c) of the MGCL , subject to applicable requirements of the 1940 Act and except as may be provided by the board of directors in setting the terms of any class or series of Preferred Stock (as hereinafter defined), in order that any and all vacancies on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred and until a successor is duly elected and qualifies.

Section 4.2 <u>Extraordinary Actions</u>. Except as otherwise specified in this charter or in the Bylaws of the Corporation, and notwithstanding any provision of law requiring an action to be approved by the affirmative vote of the holders of stock entitled to cast a greater number of votes, any such action shall be effective and valid if declared advisable and approved by the board of directors and approved by the affirmative vote of holders of stock entitled to cast a majority of all the votes entitled to be cast on the matter.

Section 4.3 <u>Authorization by Board of Stock Issuance</u>. The board of directors may authorize the issuance from time to time of stock of the Corporation of any class or series, whether now or hereafter authorized, or securities or rights convertible into stock of any class or series, whether now or hereafter authorized, for such consideration as the board of directors may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in this charter or the Bylaws.

Section 4.4 <u>Quorum</u>. The presence in person or by proxy of the holders of shares of stock of the Corporation entitled to cast fifty percent of the votes entitled to be cast (without regard to class) shall constitute a quorum at any meeting of stockholders, except with respect to any such matter that, under applicable statutes or regulatory requirements, requires approval by a separate vote of one or more classes of stock, in which case the presence in person or by proxy of the holders of stock entitled to cast fifty percent of the votes entitled to be cast by each such class on such a matter shall constitute a quorum.

Section 4.5 <u>Preemptive Rights</u>. Except as may be provided by the board of directors in setting the terms of classified or reclassified stock pursuant to Section 5.4 or as may otherwise be provided by contract approved by the board of directors, no holder of stock of the Corporation shall, as such holder, have any preemptive right to purchase or subscribe for any additional stock of the Corporation or any other security of the Corporation which it may issue or sell.

Section 4.6 <u>Appraisal Rights</u>. Except as may be provided by the board of directors in setting the terms of any class or series of Preferred Stock and except as contemplated by Section 3.708 of the MGCL, no stockholder of the Corporation shall be entitled to exercise the rights of an objecting stockholder under Title 3, Subtitle 2 of the MGCL or any successor provision thereto in connection with any transaction.

Section 4.7 <u>Determinations by Board</u>.

(a) The determination as to any of the following matters, made in good faith by or pursuant to the direction of the board of directors consistent with this charter shall be final and conclusive and shall be binding upon the Corporation and every stockholder: the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, redemption of its stock or the payment of other distributions on its stock; the amount of stated capital, capital surplus, net assets, other surplus, annual or other net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall

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have been paid or discharged); any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of any class or series of stock of the Corporation; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation or any stock of the Corporation; the stock of any class of the Corporation; any matter relating to the acquisition, holding and disposition of any assets by the Corporation; any conflict between the MGCL and the provisions set forth in the North American Securities Administrators Association ("NASAA") Omnibus Guidelines; or any other matter relating to the business and affairs of the Corporation or required or permitted by applicable law, this charter or the Bylaws or otherwise to be determined by the board of directors. This Section 4.7 does not modify the fiduciary duty of the directors of the Corporation and its stockholders nor preclude stockholders from bringing direct actions or stockholder derivative suits.

(b) Notwithstanding anything to the contrary contained in paragraph (a) above, to the extent the board of directors determines that the MGCL conflicts with the provisions set forth in the NASAA Omnibus Guidelines, the NASAA Omnibus Guidelines shall control to the extent any provisions of the MGCL are not mandatory.

**ARTICLE V**

**STOCK**

Section 5.1 <u>Authorized Stock</u>. The Corporation has authority to issue 100,000,000 shares of stock, of which 75,000,000 shares are classified as common stock, $0.001 par value per share ("Common Stock"), divided into classes of Common Stock consisting of 37,500,000 shares designated as Class A Common Stock, 12,500,000 shares designated as Class S Common Stock, 12,500,000 shares designated as Class D Common Stock, 12,500,000 shares designated as Class I Common Stock, and 25,000,000 shares are classified as Preferred Stock, $0.001 par value per share ("Preferred Stock"). The aggregate par value of all authorized stock having par value is $100,000. All stock shall be fully paid and nonassessable when issued, and the Corporation shall not make any mandatory Assessment against any stockholder beyond such stockholder's subscription commitment. A majority of the entire board of directors, including a majority of the independent directors, without any action by the stockholders of the Corporation, may amend this charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that the Corporation has authority to issue.

Section 5.2 <u>Common Stock</u>. Each share of Common Stock shall entitle the holder thereof to one vote. Except as otherwise provided in this charter, and subject to the express terms of any class or series of Preferred Stock, holders of Common Stock shall have the exclusive right to vote on all matters as to which a stockholder is entitled to vote pursuant to applicable law at all meetings of stockholders. In the event of any voluntary or involuntary liquidation, dissolution or winding up, the aggregate assets available for distribution to holders of Common Stock shall be determined in accordance with applicable law and this charter. Each holder of Common Stock shall be entitled to receive, ratably with each other holder of Common Stock, that portion of the assets available for distribution as the number of outstanding shares of stock of such class held by such holder bears to the total number of outstanding shares of stock of such class then outstanding. The board of directors, including a majority of the independent directors, may classify or reclassify any unissued shares of Common Stock from time to time, in one or more classes or series of Common Stock or Preferred Stock by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations, or to dividends, qualifications, or terms or conditions of redemption of the stock.

All shares of Common Stock of the Corporation shall represent the same interest in the Corporation and have identical voting, dividend, liquidation and other rights, provided however that notwithstanding anything in the Charter of the Corporation to the contrary:

(a) Shares of Class A Common Stock and Class S Common Stock, Class D Common Stock, or Class I Common Stock, may be issued and sold subject to such different front-end sales loads, distribution fees, contingent deferred sales charges, or front-end sales loads and contingent deferred sales charges as the Board of Directors shall from time to time establish with respect to each such class in accordance with the Investment Company Act of 1940 (the

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"1940 Act"), the terms of any exemptive order granted by the SEC pursuant to the 1940 Act, and applicable rules and regulations of FINRA;

(b) Subject to compliance with the requirements of the 1940 Act, each share of Class S Common Stock, Class D Common Stock, or Class I Common Stock, shall automatically convert, without action by the stockholders, into a number of shares of Class A Common Stock based on the relative net asset value per share for each class at such time upon (i) a Liquidity Event (as defined herein), (ii) the Corporation's dealer manager advising the Corporation that the aggregate underwriting compensation payable from all sources (determined in accordance with applicable FINRA rules), including upfront selling commissions, distribution fees and contingent deferred sales charges, if any, and any other underwriting compensation with respect to all shares of Class A Common Stock and Class S Common Stock, Class D Common Stock, or Class I Common Stock would be in excess of 10% of the gross proceeds in a public offering registered with the SEC, or (iii) the total underwriting compensation from the upfront selling commissions and distribution fees attributable to such share of Class S Common Stock, Class D Common Stock, or Class I Common Stock, reaching a "sales charge cap" determined by resolution of the board of directors and described in a prospectus for such class as and to the extent required by the 1940 Act and the rules and regulations thereunder. If any shares of Class S Common Stock, Class D Common Stock, or Class I Common Stock are converted pursuant to clause (ii), above, and if there are outstanding shares that are identifiable by the Corporation as having been issued pursuant to a distribution reinvestment plan with respect to distributions attributable to the converted shares or as a stock dividend with respect to the converted shares, then the identified shares shall automatically convert, without action by the holder thereof, into a number of shares of Class A Common Stock based on the relative net asset value per share for the applicable class at such time. As used herein, the term "Liquidity Event" shall mean (1) the listing of the Common Stock on a national securities exchange, (2) a sale or merger in a transaction that provides stockholders of the Corporation with cash and/or securities of a publicly traded company or (3) a sale of all or substantially all of the assets of the Corporation for cash or other consideration, excluding non-listed securities; and

(c) As to any matter with respect to which a separate vote of the holders of a particular class of shares of the Corporation is required by the 1940 Act, the terms of any exemptive order granted by the SEC pursuant to the 1940 Act, or the Maryland General Corporation Law, such requirement as to a separate vote by that class shall apply in lieu of a general vote of all classes; in the event that the separate vote requirement referred to in the preceding clause applies with respect to one or more classes, then, subject to the following clause, the shares of all other classes not entitled to a separate class vote shall vote as a single class; and, except as required otherwise by the 1940 Act, the terms of any exemptive order granted by the SEC pursuant to the 1940 Act, or the Maryland General Corporation Law, the holders of a particular class of the Corporation's shares shall not be entitled to vote as to any matter which does not affect the interest of that class;

(d) The shares of Class S Common Stock, Class D Common Stock and Class I Common Stock shall represent the same interest in the Corporation together with all other classes of Common Stock and have identical voting, dividend, liquidation and other rights, subject to the terms set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Shares of Class S Common Stock, Class D Common Stock and Class I Common Stock may be issued and sold subject to such different front-end sales loads, distribution fees, contingent deferred sales charges, or front-end sales loads and contingent deferred sales charges as the Board of Directors shall from time to time establish with respect to each such class in accordance with the 1940 Act, the terms of any exemptive order granted by the Securities and Exchange Commission (the "SEC") pursuant to the 1940 Act, and applicable rules and regulations of the Financial Industry Regulatory Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) At the sole discretion of the Board of Directors, upon a determination by the Corporation's dealer manager, transfer agent or other agent selected by the Board of Directors that underwriting compensation, including upfront placement fees or brokerage commissions, and stockholder servicing and/or distribution fees paid with respect to shares of Class D Common Stock or Class S Common Stock held in a stockholder's account would exceed, in the aggregate, 10% of the gross proceeds from the sale of such shares (or a lower limit as determined by the dealer manager or the applicable participating broker), each

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applicable share of Class S Common Stock and Class D Common Stock held in a stockholder's account may, at the end of the month of such determination, automatically and without any action on the part of the holder thereof convert into a number of shares of Class I Common Stock (including fractional shares) with an equivalent net asset value ("NAV") as such shares of Class S Common Stock or Class D Common Stock. The Board of Directors may modify this requirement if permitted by the terms of any exemptive order granted by the SEC pursuant to the 1940 Act. In addition, each share of Class D Common Stock, Class S Common Stock and Class I Common Stock held in a stockholder's account will automatically convert into a number of shares of Class A Common Stock (including any fractional shares) with an equivalent NAV as such share on the earliest of (i) a liquidity event as determined by the Board of Directors or (ii) immediately prior to any liquidation, dissolution or winding up of the Corporation.

Section 5.3 <u>Preferred Stock</u>. The board of directors, including a majority of the independent directors, may classify or reclassify any unissued shares of Preferred Stock from time to time, in one or more classes or series of Preferred Stock by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations, or to dividends, qualifications, or terms or conditions of redemption of the stock.

Section 5.4 <u>Classified or Reclassified Shares</u>. Prior to issuance of classified or reclassified shares of any class or series, the board of directors by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of stock of the Corporation; (b) specify the number of shares to be included in the class or series; (c) set or change, subject to the express terms of any class or series of stock of the Corporation outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Corporation to file articles supplementary with the State Department of Assessments and Taxation of the State of Maryland ("SDAT"). Any of the terms of any class or series of stock set or changed pursuant to clause (c) of this Section 5.4 may be made dependent upon facts or events ascertainable outside this charter (including determinations by the board of directors or other facts or events within the control of the Corporation) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of stock is clearly and expressly set forth in the articles supplementary filed with SDAT, or other charter document.

Section 5.5 <u>Deferred Payments</u>. The Corporation shall not have authority to make arrangements for deferred payments on account of the purchase price of the Corporation's stock unless all of the following conditions are met: (a) such arrangements are warranted by the Corporation's investment objectives; (b) the period of deferred payments coincides with the anticipated cash needs of the Corporation; (c) the deferred payments shall be evidenced by a promissory note of the stockholder, which note shall be with recourse, shall not be negotiable, shall be assignable only subject to defenses of the maker and shall not contain a provision authorizing a confession of judgment and (d) selling commissions and Front End Expenses paid upon deferred payments are payable when payment is made on the note. The Corporation shall not sell or assign the deferred obligation notes at a discount to meet the Corporation's financing needs. In the event of default in the payment of deferred payments by a stockholder, the stockholder may be subjected to a reasonable penalty. The Corporation shall not acquire interests in any portfolio companies or other assets in exchange for common stock or any other ownership interest in the Corporation.

Section 5.6 <u>Dividends and Distributions</u>.

(a) The board of directors shall cause the Corporation to provide for adequate reserves for normal replacements and contingencies (but the Corporation shall not be required to maintain reserves for payment of fees payable to the Adviser) by causing the Corporation to retain a reasonable percentage of proceeds from offerings and revenues. Normally, not less than 1% of the proceeds from offerings and revenues will be considered adequate.

(b) From time to time and not less than quarterly, the board of directors shall review the Corporation's accounts to determine whether cash distributions are appropriate. The Corporation may, subject to authorization by the board of directors, distribute pro rata to the stockholders funds received by the Corporation which the board of directors deems unnecessary to retain in the Corporation. The board of directors may authorize the Corporation to declare and pay to stockholders such dividends or distributions, in cash or other assets of the Corporation or in securities of the

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Corporation or from any other source as the board of directors in its discretion shall determine. The board of directors shall endeavor to authorize the Corporation to declare and pay such dividends and distributions (i) as shall be necessary for the Corporation to qualify as a "Regulated Investment Company" under the Code and under the 1940 Act, and (ii) to the extent that the board of directors deems it unnecessary for the Corporation to retain funds received by it; provided, however, that in each case stockholders shall have no right to any dividend or distribution unless and until authorized by the board of directors and declared by the Corporation. The exercise of the powers and rights of the board of directors pursuant to this Section 5.6 shall be subject to the provisions of any class or series of shares at the time outstanding. The receipt by any person in whose name any shares are registered on the records of the Corporation or by his or her duly authorized agent shall be a sufficient discharge for all dividends or distributions payable or deliverable in respect of such shares and from all liability to see to the application thereof. Distributions in kind shall not be permitted, except for distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for the dissolution of the Corporation and the liquidation of its assets in accordance with the terms of this charter or distributions in which (i) the board of directors advises each stockholder of the risks associated with direct ownership of the property, (ii) the board of directors offers each stockholder the election of receiving such in-kind distributions, and (iii) in-kind distributions are made only to those stockholders that accept such offer. In no event shall funds be advanced or borrowed for purpose of distributions, if the amount of such distributions would exceed the Corporation's accrued and received revenues for the previous four quarters, less paid and accrued operating costs with respect to such revenues and costs which shall be determined in accordance with generally accepted accounting principles, consistently applied. Distributions from the Corporation to the Sponsor shall only be made in conjunction with distributions to stockholders and only out of funds properly allocated to the Sponsor's account.

(d) Distributions in kind shall not be permitted, except for distributions of readily marketable securities, distributions of the interests in a liquidating trust established in connection with the dissolution of the Corporation and the liquidation of its assets in accordance with the terms of these articles, or distributions in which: (i) the board of directors advises each stockholder of the risks associated with direct ownership of the property, (ii) the board of directors offers each stockholder the election of receiving such in-kind distributions or cash in an amount determined by the board of directors to be equivalent to the value of the in-kind distribution that would otherwise have been made, and (iii) in-kind distributions are made only to those stockholders that accept such offer with all others getting cash in an amount determined by the board of directors to be equivalent to the value of the in-kind distribution that would otherwise have been made.

Section 5.7 <u>Charter and Bylaws</u>. All persons who shall acquire stock in the Corporation shall acquire the same subject to the provisions of this charter and the Bylaws. The board of directors of the Corporation shall have the exclusive power to make, alter, amend or repeal the Bylaws; provided that any alteration, amendment or repeal of the Bylaws that adversely affects the rights of the stockholders shall require the concurrence by the holders of a majority of the shares entitled to vote on the matter.

Section 5.8 <u>Suitability of Stockholders.</u> 

(a)If the Corporation is offering Common Stock or Preferred Stock in a public offering registered with the U.S. Securities and Exchange Commission (a "Public Offering"), subject to any required heightened suitability standards set forth in the prospectus related to such Public Offering (as the same may be amended or supplemented from time to time, the "Prospectus"), to purchase Common Stock or Preferred Stock from the Corporation in the Public Offering, each prospective stockholder must represent to the Corporation, among such other requirements as the Corporation may require from time to time, that such prospective stockholder satisfies any suitability standards required by the guidelines published by NASAA applicable to the Corporation, as such standards may be amended from time to time, that are set forth in the Prospectus, such as that prospective stockholders must have a net worth

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(not including home, furnishings and personal automobiles) of at least $70,000 and an annual gross income of at least $70,000, or a net worth (not including home, furnishings and personal automobiles) of at least $250,000.

(b) The Adviser or each Person selling Common Stock on behalf of the Corporation shall make this suitability determination on the basis of information it has obtained from a prospective stockholder. Relevant information for this purpose will include at least the age, investment objectives, investment experience, income, net worth, financial situation and other investments of the prospective stockholder, as well as any other pertinent factors.

(c) The Adviser or each Person selling Common Stock on behalf of the Corporation shall maintain records of the information used to determine that an investment in Common Stock is suitable and appropriate for a stockholder. The Adviser or each Person selling Common Stock on behalf of the Corporation shall maintain these records for at least six years.

Section 5.9 <u>Fractional Shares.</u> The Corporation shall have authority to issue fractional shares. Any fractional shares of stock shall carry proportionately all of the rights of a whole share, including, without limitation, the right to vote and the right to receive dividends and other distributions.

Section 5.10 <u>Redemption.</u> The Corporation is not obligated to redeem or repurchase any of the shares of stock. However, the Corporation is not precluded from voluntarily repurchasing or redeeming stock if such repurchase or redemption does not impair the capital or operations of the Corporation. The Corporation may provide for mandatory redemption rights under the following circumstances:

(a) death or legal incapacity of a holder of stock, or

(b) a substantial reduction in the Net Worth or income provided that all of the following are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)the Corporation has sufficient cash to make the purchase. &nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the purchase will not be in violation of applicable legal requirements.&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)not more than 15% of the outstanding stock is purchased in any year.

At the discretion of the Board a penalty may be assessed on the redemption of the stock if the penalty accrues to the benefit of the Corporation. The Sponsor is prohibited from receiving a fee on the redemption of Stock by the Corporation. Where the purchase price is not mutually agreed upon, the matter may be submitted to arbitration.

**ARTICLE VI**

**AMENDMENTS; CERTAIN EXTRAORDINARY ACTIONS**

Section 6.1 <u>Approval of Certain Charter Amendments and Dissolution</u>. The affirmative vote of the holders of shares entitled to cast at least two-thirds of all the votes entitled to be cast on the matter shall be necessary to effect:

(a) Any amendment to this charter to make the Common Stock a "redeemable security" or to convert the Corporation, whether by merger or otherwise, from a "closed-end company" to an "open-end company" (as such terms are defined in the 1940 Act);

(b) The dissolution of the Corporation; and

(c) Any amendment to Section 4.2, Section 4.6, or this Section 6.1.

**ARTICLE VII**

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**LIMITATION OF LIABILITY; INDEMNIFICATION AND ADVANCE OF EXPENSES**

Section 7.1 <u>Limitation of Stockholder Liability</u>. No stockholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to the Corporation by reason of being a stockholder, nor shall any stockholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any Person in connection with the Corporation's assets or the affairs of the Corporation by reason of being a stockholder.

Section 7.2 <u>Limitation of Director and Officer Liability</u>. To the fullest extent permitted by Maryland law, subject to any limitation set forth under the federal or state securities laws, in these Fifth Articles of Amendment and Restatement or the Corporations Bylaws, no director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Section 7.2, nor the adoption or amendment of any other provision of this charter or Bylaws inconsistent with this Section 7.2, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

Section 7.3 <u>Express Exculpatory Clauses in Instruments</u>. Subject to any limitations set forth under state securities laws, neither the stockholders nor the directors, officers, employees or agents of the Corporation shall be liable under any written instrument creating an obligation of the Corporation by reason of their being stockholders, directors, officers, employees or agents of the Corporation, and all Persons shall look solely to the Corporation's Assets for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity or enforceability of such instrument and shall not render any stockholder, director, officer, employee or agent liable thereunder to any third party, nor shall the directors or any officer, employee or agent of the Corporation be liable to anyone as a result of such omission.

Section 7.4 <u>Amendment or Repeal</u>. Neither the amendment nor repeal of this Article VII, nor the adoption or amendment of any other provision of this charter or Bylaws inconsistent with this Article VII, shall apply to or affect in any respect the applicability of the preceding sections of this Article VII with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

Section 7.5 <u>Indemnification and Advance of Expenses</u>. Subject to any limitations set forth under Maryland law or the federal or state securities laws or in this <u>Article VII</u>, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any individual who is a present or former director or officer of the Corporation and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity, (ii) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner, member, manager or trustee of another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (iii) the Adviser or any of its Affiliates acting as an agent of the Corporation (each such person an "***Indemnitee***"). The rights to indemnification and advance of expenses provided to a director or officer hereby shall vest immediately upon election of such director or officer. The Corporation may, with the approval of the board of directors or any duly authorized committee thereof, provide such indemnification and advancement of expenses to a Person who served a predecessor of the Corporation in any of the capacities described in (i) or (ii) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The board of directors may take such action as is necessary to carry out this <u>Section 7.5</u>.

Section 7.6 <u>Limitations on Indemnification and Advance of Expenses</u>.

(a) Notwithstanding anything to the contrary contained in <u>Section 7.2</u> or <u>Section 7.5</u> above, the Corporation shall not provide for indemnification of an Indemnitee for any liability or loss suffered by such particular Indemnitee or hold such particular Indemnitee harmless for any liability or loss suffered by the Corporation, unless all of the following conditions are met:

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(i) The particular Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Corporation.

(ii) The particular Indemnitee was acting on behalf of or performing services for the Corporation.

(iii) Such liability or loss was not the result of the particular Indemnitee's negligence or misconduct.

(iv) Such indemnification or agreement to hold harmless is recoverable only out of net assets of the Corporation and not from the stockholders.

(b) Notwithstanding anything to the contrary contained in <u>Sections 7.2 and 7.5</u>, the Corporation shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by an Indemnitee, the Sponsor or any person acting as a broker-dealer, unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the particular Indemnitee, (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular Indemnitee or (iii) a court of competent jurisdiction approves a settlement of the claims against the particular Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission ("***SEC***") and of the published position of any state securities regulatory authority in which securities of the Corporation were offered or sold as to indemnification for violations of securities laws.

(c) The Corporation shall pay or reimburse reasonable legal expenses and other costs incurred by an Indemnitee, the Sponsor or the Sponsor's Affiliates in advance of final disposition of a proceeding only if all of the following are satisfied: (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Corporation, (ii) such Indemnitee, Sponsor or Sponsor's Affiliate provides the Corporation with written affirmation of such Indemnitee's, Sponsor's or Sponsor's Affiliate's good faith belief that the standard of conduct necessary for indemnification by the Corporation as authorized by Section 7.5 hereof has been met, (iii) the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder of the Corporation acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (iv) such Indemnitee, Sponsor or Sponsor's Affiliate provides the Corporation with a written agreement to repay the amount paid or reimbursed by the Corporation, together with the applicable legal rate of interest thereon, in cases in which such Indemnitee is found not to be entitled to indemnification

(d) The Corporation may not incur that portion of liability insurance which insures any Indemnitee or the Sponsor for any liability as to which such individual or entity is prohibited from being indemnified under this Section 7.6.

(e) The Corporation may not indemnify and may not hold harmless any other Person who is not an Indemnitee.

Section 7.7 <u>Non-exclusivity</u>. The provisions of this Article VII shall not be deemed exclusive of any other rights, by indemnification or otherwise, to which a director or officer may be entitled under the Bylaws, a resolution of stockholders or directors, an agreement or otherwise, provided, that such additional rights shall not result in the circumvention of any of the requirements or prohibitions contained herein or under applicable federal or state securities laws or the NASAA Omnibus Guidelines.

**ARTICLE VIII**

**ADVISER**

Section 8.1 <u>Supervision of Adviser</u>.

(a) Subject to the requirements of the 1940 Act, the board of directors may exercise broad discretion in allowing the Adviser to administer and regulate the operations of the Corporation, to act as agent for the Corporation, to execute documents on behalf of the Corporation and to make executive decisions that conform to general policies and

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principles established by the board of directors. The board of directors shall monitor the Adviser and the Corporation's Administrator and other service providers to assure that the administrative procedures, operations and programs of the Corporation are in the best interests of the stockholders and are fulfilled and that (i) the expenses incurred are reasonable in light of the investment performance of the Corporation, its net assets and its net income, (ii) all Front End Expenses shall be reasonable and shall not exceed 18% of the gross proceeds of any offering, regardless of the source of payment and any reimbursement to the Advisor for deferred organizational and offering expenses, including any interest thereon, if any, will be included within the 18% limitation, and (iii) the percentage of Capital Contributions of any offering committed to Investment in Program Assets shall be at least 82%. All items of compensation to underwriters or dealers, including, but not limited to, selling commissions, expenses, rights of first refusal, consulting fees, finders' fees and all other items of compensation of any kind or description paid by the Corporation, directly or indirectly, shall be taken into consideration in computing the amount of allowable Front End Expenses.

(b) The board of directors is responsible for determining that compensation paid to the Adviser is reasonable in relation to the nature and quality of services performed and the investment performance of the Corporation and that the provisions of the investment advisory agreement are being carried out. Compensation will be considered presumptively reasonable if it is limited to the participation in net gains allowed by the Investment Advisers Act of 1940, as amended. The board of directors may consider all factors that it deems relevant in making these determinations.

Section 8.2 <u>Fiduciary Obligations</u>. Any investment advisory agreement with the Adviser shall provide that the Adviser and the Sponsor shall have a fiduciary responsibility and duty to the Corporation and to the stockholders for the safekeeping and use of all the funds and assets of the Corporation, whether or not in the Adviser's or the Sponsor's immediate possession or control, and that the Adviser and the Sponsor shall not employ, or permit another to employ, such funds or assets except for the exclusive benefit of the Corporation. In addition, no investment advisory agreement shall permit the Corporation to contract away the fiduciary obligation owed to the Corporation under common law or the stockholders to contract away the fiduciary obligations owed to the stockholders by the Adviser and the Sponsor under common law. The chief executive officer and chief investment officer of the Adviser shall have at least three years' relevant experience demonstrating the knowledge and experience to acquire and manage the type of assets being acquired and shall have not less than four years relevant experience in the kind of service being rendered or otherwise must demonstrate sufficient knowledge and experience to perform the services proposed. The board of directors shall determine whether any successor Adviser possesses sufficient qualifications to perform the advisory function for the Corporation and whether the compensation provided for in its contract with the Corporation is justified.

Section 8.3 <u>Termination</u>. The investment advisory agreement shall provide that it is terminable by (a) a majority of the independent directors on 60 days' written notice or (b) the Adviser on 120 days' written notice, in each case without cause or penalty, and in each case the Adviser will cooperate with the Corporation and the board of directors in making an orderly transition of the advisory function. After the termination of an investment advisory agreement, the Adviser shall pay all expenses as a result of its withdrawal and not be entitled to compensation for further services provided except that it shall be entitled to receive from the Corporation within 30 days after the effective date of such termination all unpaid reimbursements and all earned but unpaid fees payable to the Adviser prior to termination of this Agreement. If the Corporation and the Adviser cannot agree on the amount of such reimbursements and fees, the parties will submit to binding arbitration which cost will be borne equally by the terminated Adviser and the Corporation. Upon termination, the Adviser shall promptly (i) deliver to the board of directors a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the board of directors (ii) deliver to the board of directors all assets and documents of the Corporation then in custody of the Adviser; and (iii) cooperate with the Corporation to provide an orderly manner.

Section 8.4 <u>Organization and Offering Expenses Limitation</u>. Unless otherwise provided in any resolution adopted by the board of directors, the Corporation shall reimburse the Adviser and its Affiliates for Organization and Offering Expenses incurred by the Adviser or its Affiliates; provided, however, that the total amount of all Organization and

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Offering Expenses shall be reasonable and shall be included in Front End Expenses for purposes of the limit on such Front End Expenses set forth in Section 8.1.

Section 8.5 <u>Acquisition Fees</u>. Unless otherwise provided in any resolution adopted by the board of directors, the Corporation may pay the Sponsor, the Adviser and its Affiliates fees for the review and evaluation of potential investments; provided, however, that the board of directors shall conclude that the total of all Acquisition Fees and Acquisition Expenses shall be reasonable.

Section 8.6 <u>Reimbursement for Expenses</u>.

(a) All expenses of the Corporation shall be billed to and paid by the Corporation.

(b) The Sponsor, Adviser, and the Administrator may be reimbursed for the actual cost of goods and services used for, or by, the Corporation and obtained from Persons other than Affiliates of the Sponsor, the Administrator, the Adviser, or the Corporation.

(c) The Sponsor, the Adviser, and the Administrator may be reimbursed for the administrative services necessary to the prudent operation of the Corporation; provided, the reimbursement shall be the lower of the Sponsor's, the Adviser's, or the Administrator's actual cost or the amount the Corporation would be required to pay to Persons other than Affiliates of the Sponsor, the Adviser, the Administrator, or the Corporation for comparable administrative services in the same geographic location; and provided, further, that such costs are reasonably allocated to the Corporation on the basis of assets, revenues, time records or other method conforming with generally accepted accounting principles.

(d) No reimbursement shall be permitted for services for which the Sponsor, the Adviser, or the Administrator are entitled to compensation by way of a separate fee.

(e) Excluded from the allowable reimbursement shall be:

(i). the Sponsor's, the Adviser's, or the Administrator's rent and depreciation, utilities, capital equipment, and other administrative items; and

(ii). the Sponsor's, the Adviser's, or the Administrator's Controlling Persons' salaries, fringe benefits, travel expenses, and other administrative items incurred by, or allocated to, the Sponsor's the Adviser's, or the Administrator's Controlling Persons'. Controlling Person includes, but is not limited to, all Persons, whatever their titles, who perform functions for the Sponsor, the Adviser, or the Administrator similar to those of: (a) chairman or member of the board of directors; (b) executive officers; and (c) those holding ten percent or more equity interest in the Sponsor, the Adviser, or the Administrator or a Person having the power to direct or cause the direction of the Sponsor, the Adviser, or the Administrator, whether through the ownership of voting securities, by contract, or otherwise.

Section 8.7 <u>Other Goods or Services</u>.

(a) The Corporation may accept other goods or other services provided by the Adviser, the Administrator or their Affiliates in connection with the operation of assets, provided that (i) the Adviser, Administrator or their Affiliates must be independently engaged in the business of providing such goods or services to persons other than Affiliates of the Sponsor, the Corporation, the Adviser, or the Administrator and at least 33% of the Adviser's, Administrator's or their Affiliates' (as applicable) associated gross revenues must come from persons other than Affiliates of the Sponsor, the Corporation, the Adviser or the Administrator; (ii) the Adviser, Administrator or their Affiliates, as fiduciaries, determines such self-dealing arrangement is in the best interest of the Corporation; (iii) the terms pursuant to which all such goods or services are provided to the Corporation by the Adviser or the Administrator shall be embodied in a written contract, the material terms of which must be fully disclosed to the stockholders; (iv) the contract may only be modified with approval of a majority of outstanding voting securities of the Corporation; (v) the contract shall contain a clause allowing termination without penalty on 60 days' notice; (vi) the

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compensation, price or fee charged for providing such goods or services must be comparable and competitive with the compensation, price or fee charged by persons other than Affiliates of the Sponsor, the Corporation, the Adviser, or the Administrator in the same geographic location who provide comparable goods or services which could reasonably be made available to the Corporation; and (vii) except in extraordinary circumstances, the compensation and other material terms of the arrangement must be fully disclosed to the stockholders. Disclosure to shareholders will occur through the Prospectus. Extraordinary circumstances are limited to instances when immediate action is required and the goods or services are not immediately available from persons other than the Affiliates of the Sponsor, the Corporation, the Adviser or Administrator.

(b) Notwithstanding the foregoing clause (a), if the Adviser, Administrator or their Affiliates is not engaged in the business to the extent required by such clause, the Adviser, Administrator or their Affiliates may provide to the Corporation other goods and services if all of the following additional conditions are met: (i) the Adviser, Administrator or their Affiliates can demonstrate the capacity and capability to provide such goods or services on a competitive basis; (ii) the goods or services are provided at the lesser of cost or the competitive rate charged by persons other than the Affiliates of the Sponsor, the Corporation, the Adviser, or Administrator in the same geographic location who are in the business of providing comparable goods or services; (iii) the cost is limited to the reasonable necessary and actual expenses incurred by the Adviser, Administrator or their Affiliates on behalf of the Corporation in providing such goods or services, exclusive of expenses of the type which may not be reimbursed under Section IV(F)(1) of the NASAA Omnibus Guidelines (or any successor provisions thereto) and the applicable federal and state securities laws; and (iv) expenses are allocated in accordance with generally accepted accounting principles and are made subject to any special audit required by Section IV(F)(2) of the NASAA Omnibus Guidelines (or any successor provisions thereto) and applicable federal and state securities laws.

**ARTICLE IX**

**INVESTMENT OBJECTIVES**

Section 9.1 <u>Investment Objectives</u>. The Corporation's investment objectives are to generate current income and long-term capital appreciation. The independent directors shall review the investment policies of the Corporation with sufficient frequency (not less often than annually) to determine that the policies being followed by the Corporation are in the best interests of its stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of the board of directors.

Section 9.2 <u>Investments in Other Programs</u>.

(a) The Corporation shall not invest in general partnerships or joint ventures with non-Affiliates that own and operate specific assets, unless the Corporation, alone or together with any publicly registered Affiliate of the Corporation meeting the requirements of subsection (b) below, acquires a controlling interest in such a general partnership or joint venture, but in no event shall duplicate fees be permitted; provided, however that the foregoing is not intended to prevent the Corporation from carrying out its business of investing and reinvesting its assets in securities of other issuers. For purposes of this Section, "controlling interest" means an equity interest possessing the power to direct or cause the direction of the management and policies of the general partnership or joint venture, including the authority to: (i) review all contracts entered into by the general partnership or joint venture that will have a material effect on its business or assets; (ii) cause a sale or refinancing of the assets or its interest therein subject, in certain cases where required by the partnership or joint venture agreement, to limits as to time, minimum amounts and/or a right of first refusal by the joint venture partner or consent of the joint venture partner; (iii) approve budgets and major capital expenditures, subject to a stated minimum amount; (iv) veto any sale or refinancing of the assets, or alternatively, to receive a specified preference on sale or refinancing proceeds; and (v) exercise a right of first refusal on any desired sale or refinancing by the joint venture partner of its interest in the assets, except for transfer to an Affiliate of the joint venture partner.

(b) The Corporation shall have the authority to invest in general partnerships or joint ventures with other publicly registered Affiliates of the Corporation if all of the following conditions are met: (i) the Affiliate and the Corporation have substantially identical investment objectives; (ii) there are no duplicate fees; (iii) the compensation

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payable by the general partnership or joint venture to the Advisers and the Sponsors by each of the Corporation and its Affiliate that invests in such partnership or joint venture is substantially identical; (iv) each of the Corporation and the Affiliate has a right of first refusal to buy if the other party wishes to sell assets held in the joint venture; (v) the investment of each of the Corporation and its Affiliate is on substantially the same terms and conditions; and (vi) any prospectus of the Corporation in use or proposed to be used when such an investment has been made or is contemplated discloses the potential risk of impasse on joint venture decisions since neither the Corporation nor its Affiliate controls the partnership or joint venture, and the potential risk that while the Corporation or its Affiliate may have the right to buy the assets from the partnership or joint venture, it may not have the resources to do so.

(c) The Corporation shall have the authority to invest in general partnerships or joint ventures with Affiliates other than publicly registered Affiliates of the Corporation only if all of the following conditions are met: (i) the investment is necessary to relieve the Sponsor or the Adviser from any commitment to purchase the assets entered into in compliance with prior to the closing of the offering period of the Corporation; (ii) there are no duplicate fees; (iii) the investment of each entity is on substantially the same terms and conditions; (iv) the Corporation has a right of first refusal to buy if the Sponsor or the Adviser wishes to sell assets held in the joint venture; and (v) any prospectus of the Corporation in use or proposed to be used when such an investment has been made or is contemplated discloses the potential risk of impasse on joint venture decisions.

(d) The Corporation may be structured to conduct operations through separate single-purpose entities managed by the Sponsor or the Adviser (multi-tier arrangements); provided that the terms of any such arrangements do not result in the circumvention of any of the requirements or prohibitions contained herein or under the NASAA Omnibus Guidelines or applicable federal or state securities laws. Any agreements regarding such arrangements shall accompany any prospectus of the Corporation, if such agreement is then available, and the terms of such agreement shall contain provisions assuring that all of the following restrictions apply: (i) there will be no duplication or increase in Organization and Offering expenses, the Sponsor's and the Adviser's compensation, program expenses or other fees and costs; (ii) there will be no substantive alteration in the fiduciary and contractual relationship between the Sponsor, the Adviser, the Corporation and the stockholders; and (iii) there will be no diminishment in the voting rights of the stockholders.

(e) Other than as specifically permitted in Sections 9.2(a) through (d) above, the Corporation shall not invest in general partnerships or joint ventures with Affiliates.

(f) The Corporation shall be permitted to invest in general partnership interests of limited partnerships only if the Corporation, alone or together with any publicly registered Affiliate of the Corporation meeting the requirements of subsection (b) above, acquires a "controlling interest" as defined in subsection (a) above, there are no duplicate fees, no additional compensation beyond that permitted under applicable law and the official or agency administering the securities laws of a state, province or commonwealth is paid to the Sponsor or the Adviser, and the agreement of limited partnership or other applicable agreement complies with this Section 9.2 and Section V of the NASAA Omnibus Guidelines (or any successor provisions thereto).

**ARTICLE X**

**CONFLICTS OF INTEREST**

Section 10.1 <u>Sales And Leases To Corporation</u>. The Corporation shall not purchase or lease assets in which the Sponsor, the Adviser or any Affiliate thereof has an interest unless all of the following conditions are met: (a) the transaction is fully disclosed to the stockholders either in a periodic report filed with the SEC or otherwise; and (b) the assets are sold or leased upon terms that are reasonable and fair to the Corporation and at a price not to exceed the lesser of cost or fair market value as determined by an independent expert. Notwithstanding anything to the contrary in this Section 10.1, the Sponsor and the Adviser may purchase assets in its own name (and assume loans in connection therewith) and temporarily hold title thereto, for the purposes of facilitating the acquisition of the assets, the borrowing of money, obtaining financing for the Corporation, or the completion of construction of the assets, provided that all of the following conditions are met: (a) the assets are purchased by the Corporation at a price no greater than the cost of the assets to the Sponsor and the Adviser; (b) all income generated by, and the expenses

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associated with, the assets so acquired shall be treated as belonging to the Corporation; and (c) there are no other benefits arising out of such transaction to the Sponsor or the Adviser apart from compensation otherwise permitted by the NASAA Omnibus Guidelines.

Section 10.2 <u>Sales And Leases To The Adviser, Directors Or Affiliates</u>. The Corporation shall not sell assets to the Sponsor, the Adviser, any director or any Affiliate of the Adviser or the Sponsor unless such sale is duly approved by the holders of a majority of the outstanding voting securities of the Corporation. The Corporation shall not lease assets to the Adviser or any director or any Affiliate of the Adviser or the Sponsor unless all of the following conditions are met: (a) the transaction is fully disclosed to the stockholders either in a periodic report filed with the SEC or otherwise and (b) the terms of the transaction are fair and reasonable to the Corporation.

Section 10.3 <u>Loans</u>. Except for the advancement of funds pursuant to the indemnification of Indemnitees (pursuant to the Corporation's Bylaws), no loans, credit facilities, credit agreements or otherwise shall be made by the Corporation to the Sponsor, the Adviser or any Affiliate thereof.

Section 10.4 <u>Commissions On Financing, Refinancing Or Reinvestment</u>. The Corporation shall not pay, directly or indirectly, a commission or fee to the Sponsor, the Adviser or any Affiliate thereof (except as otherwise specified Section IV(B)(1) of the NASAA Omnibus Guidelines (or any successor provisions thereto)) in connection with the reinvestment of Cash Available for Distribution or of the proceeds of the resale, exchange or refinancing of assets.

Section 10.5 <u>Other Transactions</u>.

(a) The Corporation shall not engage in any other transaction with the Sponsor, the Adviser or a director or any Affiliate thereof unless (a) such transaction complies with the NASAA Omnibus Guidelines and all applicable law and (b) a majority of the directors (including a majority of the independent directors) not otherwise interested in such transaction approve such transaction as fair and reasonable to the Corporation and on terms and conditions not less favorable to the Corporation than those available from non-Affiliated third parties.

(b) The Sponsor, the Corporation and the Adviser may not receive or accept any rebate or give-ups or similar arrangement that is prohibited under applicable federal or state securities laws or would circumvent the NASAA Omnibus Guidelines. The Sponsor, the Corporation and the Adviser may not participate in any reciprocal business arrangement that would circumvent provisions of applicable federal or state securities laws governing conflicts of interest or investment restrictions, including any arrangement that would circumvent the restrictions of the NASAA Omnibus Guidelines, or enter into any agreement, arrangement or understanding that would circumvent the restrictions against dealing with affiliates or promoters under applicable federal or state securities laws or would circumvent the NASAA Omnibus Guidelines. The Sponsor, the Corporation and the Adviser may not directly or indirectly pay or award any fees or commissions or other compensation to any Person engaged to sell Common Stock or give investment advice to a potential stockholder; provided, however, that this Section 10.5 shall not prohibit the payment to a registered broker-dealer or other properly licensed agent of normal sales commissions or other compensation (including cash compensation and non-cash compensation (as such terms are defined under FINRA Rule 2310)) for selling or distributing Common Stock, including out of the Corporation's own assets, including those amounts paid to the Adviser under the investment advisory agreement.

Section 10.6 <u>Lending Practices</u>. On financing made available to the Corporation by the Sponsor or the Adviser, the Adviser and the Sponsor may not receive interest in excess of the lesser of the Sponsor and the Adviser's cost of funds or the amounts that would be charged by unrelated lending institutions on comparable loans for the same purpose. The Sponsor and the Adviser shall not impose a prepayment charge or penalty in connection with such financing and the Sponsor and the Adviser shall not receive points or other financing charges. The Sponsor and the Adviser shall be prohibited from providing permanent financing for the Corporation. For purposes of this Section 10.6, "permanent financing" shall mean any financing with a term in excess of 12 months.

Section 10.7 <u>Commingling</u>. The funds of the Corporation shall not be commingled with the funds of any other Person. Nothing in this Section 10.7 shall prohibit the Sponsor, subject to the requirements of the 1940 Act, from establishing a master fiduciary account pursuant to which separate sub-trust accounts are established for the benefit

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of affiliated programs, provided that the Corporation's funds are protected from the claims of other programs and creditors of such programs.

Section 10.8 <u>Lending Practices.</u> On financing made available to the Corporation by the Adviser, the Adviser may not receive interest in excess of the lesser of the Adviser's cost of funds or amounts which would be charged by unrelated lending institutions on comparable loans for the same purpose. The Adviser shall not impose a prepayment charge or penalty in connection with such financing and the Adviser shall not receive points or other financing charges. The Adviser shall be prohibited from providing permanent financing for the Corporation. For the purposes of this Section 10.8, "permanent financing" shall mean any financing with a term in excess of twelve (12) months.

Section 10.9 <u>No Exclusive Agreement</u>: The Corporation shall not give the Adviser an exclusive right to sell or exclusive employment to sell assets for the Corporation.

**ARTICLE XI** 

**STOCKHOLDERS**

Section 11.1 <u>Meeting of Stockholders</u>. Meetings of the Corporation may be called by the Adviser or the stockholders holding ten percent or more of the then outstanding shares, for any matters for which the stockholder may vote as set forth in this Article XI. Upon receipt of a written request, either in person or by certified mail, stating the purpose(s) of the meeting, the Adviser shall provide all stockholders within ten days after receipt of said request, written notice, either in person or by mail, of a meeting and the purpose of such meeting to be held on a date not less than fifteen nor more than sixty days after distribution of such notice, at a time and place specified in the request, or if none is specified, at a time and place convenient to stockholders.

Section 11.2 <u>Voting Rights of Stockholders</u>. Subject to the mandatory provisions of any applicable laws or regulations, upon a vote by the holders of a majority of the then outstanding shares entitled to vote on a matter, stockholders may, without the necessity for concurrence by the Sponsor, the Adviser or the board of directors: (a) amend the investment adviser agreement, bylaws and/or charter; (b) remove the Adviser and elect a new Adviser; (c) remove a director without cause, (d) dissolve the Corporation; (e) suspend the liquidation of the company or other Liquidity Event, as required by the prospectus; or (f) approve or disapprove the sale of all or substantially all of the assets of the Corporation when such sale is to be made other than in the ordinary course of the Corporation's business. Without approval of holders of a majority of shares entitled to vote on the matter, the Sponsor, the Adviser and board of directors may not: (i) amend the investment advisory agreement, bylaws and/or charter except for amendments that do not adversely affect the rights of the stockholders; (ii) voluntarily withdraw as the Adviser unless such withdrawal would not affect the tax status of the Corporation and would not materially adversely affect the stockholders; (iii) appoint a new Adviser; (iv) sell all or substantially all of the assets of the Corporation; or (v) cause the merger or other reorganization of the Corporation. With respect to any shares owned by the Adviser, the Adviser may not vote or consent on matters submitted to the stockholders regarding the removal of the Adviser or regarding any transaction between the Corporation and the Adviser. In determining the existence of the requisite percentage of the Corporation's shares entitled to vote on the matter and necessary to approve a matter on which the Adviser may not vote or consent pursuant to this Section 11.2, any shares of the Corporation's stock entitled to vote on the matter and owned by the Adviser shall not be included.

Section 11.3 Voting Limitations on Shares Held by the Sponsor, the Adviser, Directors and Affiliates. With respect to shares owned by the Sponsor, the Adviser, any director, or any of their Affiliates, the Corporation shall require that the Sponsor, the Adviser, such director(s), and any of their Affiliates agree not to vote or consent on matters submitted to the stockholders regarding the removal of the Sponsor, the Adviser, such director(s) or any of their Affiliates or any transaction between the Corporation and any of them. In determining the requisite percentage in interest of shares necessary to approve a matter on which the Sponsor, the Adviser, such director(s) and any of their Affiliates may not vote or consent, any shares owned by any of them shall not be included.

Section 11.4 <u>Right of Inspection</u>. Any stockholder and any designated representative thereof shall be permitted access to the records of the Corporation to which it is entitled under applicable law at all reasonable times, and may

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inspect and copy any of them for a reasonable charge. Inspection of the Corporation's books and records by the office or agency administering the securities laws of a jurisdiction shall be provided upon reasonable notice and during normal business hours. Information regarding stockholders' right to access to the Corporation's records pertaining to its stockholders is set forth in the Bylaws

Section 11.5 <u>Reports</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Corporation shall cause to be prepared and mailed or delivered by any reasonable means, within 120 days after the end of the fiscal year to which it relates for each fiscal year that shall include: (i) financial statements prepared in accordance with generally accepted accounting principles which are audited and reported on by independent certified public accountants; (ii) a report of the activities of the Corporation during the period covered by the report; (iii) where forecasts have been provided to the Stockholders, a table comparing the forecasts previously provided with the actual results during the period covered by the report; and (iv) a report setting forth distributions to Stockholders for the period covered thereby and separately identifying distributions from: (A) cash flow from operations during the period; (B) cash flow from operations during a prior period which have been held as reserves; (C) proceeds from disposition of assets; and (D) reserves from gross proceeds. Such Annual Report on Form 10-K must also contain a breakdown of the costs reimbursed to the Adviser and the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Corporation shall cause to be prepared and mailed or delivered to each stockholder within 60 days after the end of each fiscal quarter of the Corporation a Quarterly Report on Form 10-Q filed by the Corporation under the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Corporation shall cause to be prepared and mailed or delivered within 75 days after the end of each calendar year of the Corporation to each Person who was at any time during such calendar year a stockholder all information pertaining to such stockholder's investment in the Corporation necessary for the preparation of such Person's federal income tax return.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)If Common Stock have been purchased on a deferred payment basis, on which there remains an unpaid balance during any period covered by any report required by subsections (a) and (b) above, then such report shall contain a detailed statement of the status of all deferred payments, actions taken by the Corporation in response to any defaults and a discussion and analysis of the impact on capital requirements of the Corporation.

Section 11.6 <u>Admissions of Stockholders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Admission of Original Stockholders</u>. Upon the original sale of Common Stock, the purchasers should be admitted as stockholders not later than the last day of the calendar month following the date their subscription was accepted by the Corporation. Subsequent subscriptions shall be accepted or rejected by the program within 30 days of their receipt; if rejected, all subscription monies should be returned to the subscriber within 10 business days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Admission of Substituted Stockholders and Recognition of Assignees. The Corporation shall amend its records at least once each calendar quarter to effect the substitution of substituted stockholders, although the Corporation may elect to do so more frequently. In the case of assignments, where the assignee does not become a substituted stockholder, the Corporation shall recognize the assignment not later than the last day of the calendar month following receipt of notice assignment and required documentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Persons holding Common Stock for the purpose of assigning all or a portion of such interests (hereinafter "Assignor") shall be expressly granted the same rights as if they were Stockholder except as prohibited by applicable law, including but not limited to, the rights enumerated under Article VI of the NASAA Omnibus Guidelines (or any successor provisions thereto). The assignment agreement and Prospectus shall provide that the Assignor's management shall have fiduciary responsibility for the safekeeping and use of all funds and assets of the assignees, whether or not in the Assignor management's possession or control,

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and that the management of the Assignor shall not employ, or permit another to employ, such funds or assets in any manner except for the exclusive benefit of the assignees. In addition, the agreement shall not permit the assignees to contract away the fiduciary duty owed to the assignees by the Assignor's management under the common law of agency.

**ARTICLE XII** 

**ROLL-UP TRANSACTIONS**

Section 12.1 <u>Roll-up Transactions</u>. In connection with any proposed Roll-Up Transaction, an appraisal of all of the Corporation's assets shall be obtained from a competent Independent Expert. The Corporation's assets shall be appraised on a consistent basis, and the appraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll-Up Transaction. The appraisal shall assume an orderly liquidation of the assets over a twelve-month period. The terms of the engagement of the Independent Expert shall clearly state that the engagement is for the benefit of the Corporation and the stockholders. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to stockholders in connection with a proposed Roll-Up Transaction. If the appraisal will be included in a prospectus used to offer the securities of a Roll-up entity, the appraisal shall be filed with the Securities and Exchange Commission and the applicable state regulators. In connection with a proposed Roll-Up Transaction, the Person sponsoring the Roll-Up Transaction shall offer to stockholders who vote against the proposed Roll-Up Transaction the choice of:

(a) accepting the securities of a Roll-Up Entity offered in the proposed Roll-Up Transaction; or

(b) one of the following:

(i) remaining as stockholders and preserving their interests therein on the same terms and conditions as existed previously; or

(ii) receiving cash in an amount equal to the stockholder's pro rata share of the appraised value of the net assets of the Corporation.

The Corporation is prohibited from participating in any proposed Roll-Up Transaction:

(a) that would result in the stockholders having democracy rights in a roll-up entity that are less than the rights provided for in the corporation's articles of incorporation and Sections VI(A)-B of the NASAA Omnibus Guidelines (or any successor provision thereto);

(b) that includes provisions that would operate as a material impediment to, or frustration of, the accumulation of stock by any purchaser of the securities of the Roll-Up Entity (except to the minimum extent necessary to preserve the tax status of the Roll-Up Entity), or which would limit the ability of an investor to exercise the voting rights of its securities of the Roll-Up Entity on the basis of the stock held by that investor;

(c) in which investor's rights to access of records of the Roll-Up Entity will be less than those described in the Corporations Articles of Incorporation; or

(d) in which any of the costs of the Roll-Up Transaction would be borne by the Corporation if the Roll-Up Transaction is rejected by the stockholders.

**ARTICLE XIII**

**DEFINITIONS**

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As used in this charter, the following terms shall have the following meanings unless the context otherwise requires:

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| <u>Acquisition Expenses</u>. The term "Acquisition Expenses" shall mean any and all expenses incurred by the Corporation, the Advisor, or any Affiliate of either in connection with the initial purchase or acquisition of assets by the Corporation, including, without limitation, legal fees and expenses, travel and communications expenses, accounting fees and expenses, fees owed to a third party and not charged by an affiliate including: any commission, selection fee, supervision fee, financing fee, non-recurring management fee or any fee of a similar nature, however designated.  |
| <u>Acquisition Fee</u>. The term "Acquisition Fee" shall mean any and all fees and commissions, exclusive of Acquisition Expenses, paid by any Person to any other Person (including any fees or commissions paid by or to any Affiliate of the Corporation or the Adviser) in connection with the initial purchase or acquisition of assets by the Corporation. Included in the computation of such fees or commissions shall be any commission, selection fee, supervision fee, financing fee, non-recurring management fee or any fee of a similar nature, however designated.  |
| <u>Adviser or Advisers</u>. The term "Adviser" or "Advisers" shall mean the Person or Persons, if any, appointed, employed or contracted with or by the Corporation pursuant to an investment advisory agreement to provide investment advisory services to the Corporation and who is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, including any Person to whom the Adviser subcontracts substantially all  |

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| such services pursuant to a sub-advisory agreement and including any successor to an Adviser who enters into an investment advisory agreement with the Corporation or who subcontracts with a successor Adviser. The rights of the Adviser become those of the Board if the relationship with the Adviser is terminated. |
| <u>Administrator.</u> The term "Administrator" shall mean the Person or Persons, if any, appointed, employed or contracted with or by the Corporation pursuant to an administration agreement to provide administration services to the Corporation including any Person to whom the Administrator subcontracts any and all such services pursuant to any agreement and including any successor to an Administrator who enters into an administration agreement with the Corporation or who subcontracts with a successor Administrator.  |
| <u>Affiliate or Affiliated</u>. The term "Affiliate" or "Affiliated" shall mean, with respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, ten percent or more of the outstanding voting securities of such other Person; (ii) any Person ten percent or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person; (iv) any executive officer, director, trustee or partner of such other Person; and (v) any legal entity for which such Person acts as an executive officer, director, trustee or partner.  |
| <u>Assessments</u>. The term "Assessments" shall mean any additional amounts of capital which may be mandatorily required of, or paid voluntarily by, a Stockholder beyond his or her subscription commitment excluding deferred payments.  |
| <u>Beneficial Ownership</u>. The term "Beneficial Ownership" shall mean ownership of Shares by a Person, whether the interest in Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have the correlative meanings.  |
| <u>Capital Contributions</u>. The term "Capital Contributions" shall mean the total investment, including the original investment and amounts reinvested pursuant to a distribution reinvestment plan, in the Corporation by a stockholder or by all stockholders, as the case may be. Unless otherwise specified, Capital Contributions shall be deemed to include principal amounts to be received on account of deferred payments.  |
| <u>Cash Available For Distribution.</u> Cash Flow plus cash funds available for distribution from Program reserves less amounts set aside for restoration or creation of reserves.<br><u>Cash Flow.</u> Cash funds provided from operations, without deduction for depreciation, but after deducting cash funds used to pay all other expenses, debt payments, capital improvements and replacements. Cash withdrawn from reserves is not Cash Flow.  |
| <u>Code</u>. The term "Code" shall mean the Internal Revenue Code of 1986, as amended.  |
| <u>Constructive Ownership</u>. The term "Constructive Ownership" shall mean ownership of Shares by a Person, whether the interest in Shares is held directly or indirectly (including by a nominee), and shall include interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code.  |

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| The terms "Constructive Owner," "Constructively Owns," "Constructively Owned" and "Constructively" (as the context requires) shall have the correlative meanings. |
| <u>Controlling Person.</u> The term "Controlling Person" includes, but is not limited to, all Persons, whatever their titles, who perform functions for the Sponsor, the Corporation, Adviser or Affiliates similar to those of: (a) chairman or member of the board of directors; (b) executive officers; and (c) those holding ten percent or more equity interest in the Corporation, Adviser or Affiliates or other Person having the power to direct or cause the direction of the Corporation, Adviser or Affiliates, whether through the ownership of voting securities, by contract, or otherwise.  |
| <u>Front End Expenses</u>. The term "Front End Expenses" shall mean fees and expenses paid by any party for any services rendered to organize the Corporation and to acquire assets for the Corporation, including Organization and Offering Expenses, Acquisition Fees, Acquisition Expenses, and any other similar fees, however designated by the Sponsor.  |
| <u>Independent Expert.</u> The term "Independent Expert" shall mean a Person with no material current or prior business or personal relationship with the Adviser who is engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by the Corporation, and who is qualified to perform such work.  |
| <u>Interested Person.</u> The term ''Interested person'' as that term is defined under Section 2(a)(19) of the 1940 Act means:  |
| (A) when used with respect to an investment company— |
| (i) any affiliated person of such company, |
| (ii) any member of the immediate family of any natural person who is an affiliated person of such company, |
| (iii) any interested person of any investment adviser of or principal underwriter for such company, |
| (iv) any person or partner or employee of any person who at any time since the beginning of the last two completed fiscal years of such company has acted as legal counsel for such company, |
| (v) any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has executed any portfolio transactions for, engaged in any principal transactions with, or distributed shares for (I) the investment company; (II) any other investment company having the same investment adviser as such investment company or holding itself out to investors as a related company for purposes of investment or investor services; or (III) any account over which the investment company's investment adviser has brokerage placement discretion, |
| (vi) any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has loaned |

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| money or other property to: (I) the investment company; (II) any other investment company having the same investment adviser as such investment company or holding itself out to investors as a related company for purposes of investment or investor services; or (III) any account for which the investment company's investment adviser has borrowing authority, and |
| (vii) any natural person whom the Commission by order shall have determined to be an interested person by reason of having had, at any time since the beginning of the last two completed fiscal years of such company, a material business or professional relationship with such company or with the principal executive officer of such company or with any other investment company having the same investment adviser or principal underwriter or with the principal executive officer of such other investment company: |
| Provided, That no person shall be deemed to be an interested person of an investment company solely by reason of (aa) his being a member of its board of directors or advisory board or an owner of its securities, or (bb) his membership in the immediate family of any person specified in clause (aa) of this proviso; and |
| (B) when used with respect to an investment adviser of or principal underwriter for any investment company: |
| (i) any affiliated person of such investment adviser or principal underwriter, |
| (ii) any member of the immediate family of any natural person who is an affiliated person of such investment advisor or principal underwriter, |
| (iii) any person who knowingly has any direct or indirect beneficial interest in, or who is designated as trustee, executor, or guardian of any legal interest in, any security issued either by such investment adviser or principal underwriter or by a controlling person of such investment adviser or principal underwriter, |
| (iv) any person or partner or employee of any person who at any time since the beginning of the last two completed fiscal years of such investment company has acted as legal counsel for such investment adviser or principal underwriter, |
| (v) any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has executed any portfolio transactions for, engaged in any principal transactions with, or distributed shares for: (I) any investment company for which the investment adviser or principal underwriter serves as such; (II) any investment company holding itself out to investors, for purposes of investment or investor services, as a company related to any investment company for which the investment adviser or principal underwriter serves as such; or (III) any account over which the investment adviser has brokerage placement discretion, |
| (vi) any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has loaned money or other property to: (I) any investment company for which the investment adviser or principal underwriter serves as such; (II) any investment company holding itself out to |

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| investors, for purposes of investment or investor services, as a company related to any investment company for which the investment adviser or principal underwriter serves as such; or (III) any account for which the investment adviser has borrowing authority, and |
| (vii) any natural person whom the Commission by order shall have determined to be an interested person by reason of having had at any time since the beginning of the last two completed fiscal years of such investment company a material business or professional relationship with such investment adviser or principal underwriter or with the principal executive officer or any controlling person of such investment adviser or principal underwriter. |
| For the purposes of this paragraph, ''member of the immediate family'' means any parent, spouse of a parent, child, spouse of a child, spouse, brother, or sister, and includes step and adoptive relationships. The Commission may modify or revoke any order issued under clause (vii) of subparagraph (A) or (B) of this paragraph whenever it finds that such order is no longer consistent with the facts. No order issued pursuant to clause (vii) of subparagraph (A) or (B) of this paragraph shall become effective until at least sixty days after the entry thereof, and no such order shall affect the status of any person for the purposes of this title or for any other purpose for any period prior to the effective date of such order. |
| <u>Investment in Program Assets</u>. The term "Investment in Program Assets" shall mean the amount of Capital Contributions actually paid or allocated to the purchase or development of assets acquired by the Corporation (including working capital reserves allocable thereto, except that working capital reserves in excess of three percent shall not be included) and other cash payments such as interest and taxes, but excluding Front End Expenses.  |
| <u>Liquidity Event</u>. The term "Liquidity Event" shall mean (i) a Listing, (ii) a sale or merger in a transaction that provides Stockholders with cash and/or securities of a publicly traded company or (iii) a sale of all or substantially all of the Assets for cash or other consideration, excluding non-listed securities. |
| Listing. The term "Listing" shall mean the listing of the Common Stock on a national securities exchange. |
| NASAA Omnibus Guidelines<u>.</u> The term "NASAA Omnibus Guidelines" means the Omnibus Guidelines published by the North American Securities Administrators Association on May 7, 2007, as may be amended from time to time.<br><u>Net Asset Fee.</u> An annual fee equal to a percentage of the Program's annual ending net assets (assets less liabilities) determined in accordance with generally accepted accounting principles.  |
| <u>Net Worth.</u> The excess of total assets over total liabilities as determined by generally accepted accounting principles. |
| <u>Organization and Offering Expenses</u>. The term "Organization and Offering Expenses" shall mean any and all costs and expenses incurred by and to be paid from the Assets of the Corporation in connection with the formation, qualification and registration of the Corporation, and the marketing and distribution of Shares, including, without limitation, total underwriting and brokerage discounts and commissions (including fees of the underwriters' attorneys), expenses for printing, engraving, amending, supplementing, mailing and distributing costs, salaries of employees while engaged in sales activity,  |

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| telephone and other telecommunications costs, all advertising and marketing expenses (including the costs related to investor and broker-dealer sales meetings), charges of transfer agents, registrars, trustees, escrow holders, depositories, experts, fees, expenses and taxes related to the filing, registration and qualification of the sale of the Shares under federal and state laws, including taxes and fees and accountants' and attorneys' fees. |
| <u>Participant.</u> The holder of a Program Interest.  |
| <u>Payout.</u> The point in time when all Participants have received cash distributions from the PROGRAM in an amount equal to their total Capital Contributions.  |
| <u>Person</u>. The term "Person" shall mean an individual, corporation, partnership, estate, trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, and a group to which an Excepted Holder Limit applies.  |
| <u>Program.</u> A limited or general partnership, joint venture, unincorporated association or similar organization other than a corporation formed and operated for the primary purpose of investment in and the operation of or gain from and interest in the assets to be acquired by such entity |
| <u>Program Interest.</u> The limited partnership unit or other indicia of ownership in a PROGRAM. |
| <u>Promotional Interest.</u> A percentage interest of the Sponsor in all Program revenues, costs and expenses, other than Frontend Fees, for which the Sponsor is not obligated to make a Capital Contribution in the form of cash or tangible property. |
| <u>Roll-Up Entity.</u> The term "Roll-Up Entity" shall mean a partnership, trust, corporation, or other entity that would be created or would survive after the successful completion of a proposed Roll-Up Transaction. |
| <u>Roll-Up Transaction.</u> The term "Roll-Up Transaction" shall mean a transaction involving the acquisition, merger, reorganization or consolidation either directly or indirectly of the Corporation and the issuance of securities of a Roll-Up Entity to the Stockholders. Such term does not include: |
| (a) a transaction involving securities of the Corporation that have been for at least twelve months listed on a national securities exchange; or |
| (b) a transaction involving the conversion to another corporate form or to a trust or association form of only the Corporation, if, as a consequence of the transaction, there will be no significant adverse change in any of the following: |
| (i) stockholders' voting rights; |
| (ii) the term of existence of the Corporation; |
| (iii) Adviser compensation or any Affiliate of the Adviser's compensation; or |

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| (iv) the Corporation's investment objectives. |
| <u>Specified Asset Program.</u> A Program where, at the time a securities registration is ordered effective, at least 75% of the net proceeds from the sale of Program Interests are allocable to the purchase, construction, renovation, or improvement of individually identified assets or assets that provide a reasonably objective basis in conformity with the Guidelines of the American Institute of Certified Public Accountants to allow the issuance of prospective financial statements. Reserves shall not be included in the 75%.  |
| <u>Sponsor.</u> The term "Sponsor" shall mean any Person which (i) is directly or indirectly instrumental in organizing, wholly or in part, the Corporation, (ii) will control, manage or participate in the management of the Corporation, and any Affiliate of any such Person, (iii) takes the initiative, directly or indirectly, in founding or organizing the Corporation, either alone or in conjunction with one or more other Persons, (iv) receives a material participation in the Corporation in connection with the founding or organizing of the business of the Corporation, in consideration of services or property, or both services and property, (v) has a substantial number of relationships and contacts with the Corporation, (vi) possesses significant rights to control assets of the Corporation, (vii) receives fees for providing services to the Corporation which are paid on a basis that is not customary in the industry or (viii) provides goods or services to the Corporation on a basis which was not negotiated at arm's-length with the Corporation. "Sponsor" does not include any Person whose only relationship with the Corporation is that of an independent manager of the Assets and whose only compensation is as such, or wholly independent third parties such as attorneys, accountants and underwriters whose only compensation is for professional services.  |
| THIRD: The amendment and restatement of the charter of the Corporation as hereinabove set forth has been duly advised by the board of directors and approved by the stockholders of the Corporation as required by law. |
| FOURTH: The name and address of the Corporation's current resident agent and the current address of the principal office of the Corporation are as set forth in Article III of the foregoing amendment of the charter. |
| FIFTH: The number of directors of the Corporation and the names of those currently in office are as set forth in Section 4.1 of Article IV of the foregoing amendment and restatement of the charter. |
| SIXTH: There has been no increase in the authorized shares of stock of the Corporation effected by these articles of amendment and restatement. |
| SEVENTH: The undersigned officer acknowledges these Fifth Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury. |

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IN WITNESS WHEREOF, the Corporation has caused these Fifth Articles of Amendment and Restatement to be signed in its name and on its behalf by its Chief Executive Officer on March 4, 2026.

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| Prospect Floating Rate and Alternative Income Fund, Inc. | Prospect Floating Rate and Alternative Income Fund, Inc. | Attested by: | Attested by: |
| By | /s/ M. Grier Eliasek | By | /s/ Kristin Van Dask |
| | M. Grier Eliasek, | | Kristin Van Dask, |
| | Chairman and Chief Executive Officer | | Secretary |

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## Exhibit 3.2

**PROSPECT FLOATING RATE AND ALTERNATIVE INCOME FUND, INC.**

**FIFTH AMENDED AND RESTATED BYLAWS**

**ARTICLE I** 

**OFFICES**

Section 1.1 <u>PRINCIPAL OFFICE</u>. The principal office of Prospect Floating Rate and Alternative Income Fund, Inc. (the "Corporation") in the State of Maryland shall be located at such place as the board of directors (the "Board") may designate.

Section 1.2 <u>ADDITIONAL OFFICES</u>. The Corporation may have additional offices, including a principal executive office, at such places as the Board may from time to time determine or the business of the Corporation may require.

**ARTICLE II** 

**MEETINGS OF STOCKHOLDERS**

Section 2.1 <u>PLACE</u>. All meetings of stockholders shall be held at the principal executive office of the Corporation or at such other place as shall be set by the Board and stated in the notice of the meeting.

Section 2.2 <u>ANNUAL MEETING</u>. An annual meeting of the stockholders will be held each year for the purpose of electing directors and conducting such other business within the powers of the Corporation to be held on a date and at the time set by the Board. The annual meeting shall be held upon reasonable notice and within a reasonable period following delivery of the proxy statement filed with the Securities and Exchange Commission, and the Board will take reasonable steps to ensure this requirement will be met.

Section 2.3 SPECIAL MEETINGS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. The Chairman of the Board, the chief executive officer, the president or the Board may call a special meeting of the stockholders. Subject to subsection (b) of this Section 2.3, a special meeting of stockholders shall also be called by the secretary of the Corporation upon the written request of the stockholders entitled to cast not less than ten percent of all the votes entitled to be cast at such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Access to Stockholder List</u>. An alphabetical list of the names, addresses and business telephone numbers (if available) of the stockholders, along with the number of shares held by each of them (the "Stockholder List"), shall be maintained as part of the books and records of the Corporation and shall be available for inspection by any stockholder, or a designated agent of such stockholder, at the principal executive office of the Corporation upon the written request of

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such stockholder. The Stockholder List shall be updated at least quarterly to reflect changes in the information contained therein. A stockholder may request from the Corporation a copy of the Stockholder List. A copy of the Stockholder List shall be mailed to any stockholder requesting the Stockholder List within ten days of the request. The copy of the Stockholder list shall be printed in alphabetical order, on white paper, and in a readily readable type size (in no event smaller than 10-point type). The Corporation may impose a reasonable charge for expenses incurred in reproduction of the Stockholder List pursuant to the stockholder's request.

&nbsp;&nbsp;&nbsp;&nbsp;The purposes for which a stockholder may request a copy of the Stockholder List include, without limitation, matters relating to stockholder voting rights under the charter of the Corporation or these Bylaws and the exercise of stockholder rights under federal proxy laws.

If the investment adviser of the Corporation (the "Adviser"), the Sponsor (as defined in the Omnibus Guidelines published by the North American Securities Administrators Association on May 7, 2007, as may be amended from time to time), or the Board neglects or refuses to exhibit, produce or provide a copy of the Stockholder List as requested by a stockholder, the Adviser, the Sponsor or the Board shall be liable to any such stockholder requesting the Stockholder List for the costs, including reasonable attorneys' fees, incurred by that stockholder for compelling the production of the Stockholder List, and for actual damages suffered by such stockholder by reason of such refusal or neglect. It shall be a defense that the actual purpose and reason for the requests for inspection or for a copy of the Stockholder List is to secure such list of stockholders or other information for the purpose of selling the Stockholder List or copies thereof, or of using the same for a commercial purpose other than in the interest of the applicant as a stockholder relative to the affairs of the Corporation. The Corporation may require the stockholder requesting the Stockholder List to represent that the Stockholder List is not requested for a commercial purpose unrelated to the stockholder's interest in the Corporation. The remedies provided hereunder to stockholders requesting copies of the Stockholder List are in addition, to and shall not in any way limit, other remedies available to stockholders under federal law, or the laws of any state.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Stockholder Requested Special Meetings.</u> Any stockholder of record seeking to have stockholders request a special meeting shall, by sending written notice to the secretary (the "Record Date Request Notice") by registered mail, return receipt requested, request the Board to fix a record date to determine the stockholders entitled to request a special meeting (the "Request Record Date"). The Record Date Request Notice shall set forth the purpose of the meeting and the matters proposed to be acted on at it, shall be signed by one or more stockholders of record as of the date of signature (or their duly authorized agents), shall bear the date of signature of each such stockholder (or such agent) and shall set forth all information relating to each such stockholder that must be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Upon receiving the Record Date Request Notice, and subject to Section 2-502(c) of the Maryland General Corporation Law (the "MGCL"), the Board may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than ten days after the close of business on the date on which the resolution fixing the

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Request Record Date is adopted by the Board. If the Board, within ten days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date and to make a public announcement of such Request Record Date, the Request Record Date shall be the close of business on the tenth day after the first date on which the Record Date Request Notice is received by the secretary.

(d)In order for any stockholder to request a special meeting, one or more written requests for a special meeting signed by stockholders of record (or their duly authorized agents) as of the Request Record Date entitled to cast not less than ten percent (the "Special Meeting Percentage") of all of the votes entitled to be cast at such meeting (the "Special Meeting Request") shall be delivered to the secretary. In addition, the Special Meeting Request shall set forth the purpose of the meeting and the matters proposed to be acted on at it (which shall be limited to the matters set forth in the Record Date Request Notice received by the secretary), shall bear the date of signature of each such stockholder (or such agent) signing the Special Meeting Request, shall set forth the name and address, as they appear in the Corporation's books, of each stockholder signing such request (or on whose behalf the Special Meeting Request is signed) and the class, series and number of all shares of stock of the Corporation which are owned by each such stockholder, and the nominee holder for, and number of, shares owned beneficially but not of record, shall be sent to the secretary by registered mail, return receipt requested, and shall be received by the secretary within 60 days after the Request Record Date. Any requesting stockholder may revoke his, her or its request for a special meeting at any time by written revocation delivered to the secretary.

(e)The secretary shall inform the requesting stockholders of the reasonably estimated cost of preparing and mailing the notice of meeting (including the Corporation's proxy materials) within ten days after receiving the stockholder request. The secretary shall not be required to call a special meeting upon stockholder request and such meeting shall not be held unless, in addition to the documents required by subsections (c) and (d) of this Section 2.3, the secretary receives payment of such reasonably estimated cost prior to the mailing of any notice of the meeting.

(f)Any special meeting shall be held at such place, date and time as may be designated by the Board; provided, however, that the date of any stockholder requested meeting shall be on a date not less than fifteen nor more than sixty days after the record date for such meeting (the "Meeting Record Date"); and provided further that if the Board fails to designate, within ten days after the date that a valid Special Meeting Request is actually received by the secretary (the "Delivery Date"), a date and time for a stockholder requested meeting, then such meeting shall be held at 2:00 p.m. local time on the 60th day after the Meeting Record Date or, if such 60th day is not a Business Day (as defined below), on the first preceding Business Day; and provided further that in the event that the Board fails to designate a place for a stockholder requested meeting within ten days after the Delivery Date, then such meeting shall be held at the principal executive office of the Corporation. In fixing a date for any special meeting, the Board may consider such factors as the directors deem relevant within the good faith exercise of business judgment, including, without limitation, the nature of the matters to be considered, the facts and circumstances surrounding any request for meeting and any plan of the Board to call an annual

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meeting or a special meeting. In the case of any stockholder requested meeting, the Board shall fix a Meeting Record Date that is a date not later than 30 days after the Delivery Date.

(g)If written revocations of requests for the special meeting have been delivered to the secretary and the result is that stockholders of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting to the secretary, the secretary shall: (1) if the notice of meeting has not already been mailed, refrain from mailing the notice of the meeting and send to all requesting stockholders who have not revoked such requests written notice of any revocation of a request for the special meeting, or (2) if the notice of meeting has been mailed and if the Secretary first sends to all requesting stockholders who have not revoked requests for a special meeting written notice of any revocation of a request for the special meeting and written notice of the Secretary's intention to revoke the notice of the meeting, revoke the notice of the meeting at any time before ten days before the commencement of the meeting. Any request for a special meeting received after a revocation by the Secretary of a notice of a meeting shall be considered a request for a new special meeting.

(h)The Board, the Chairman of the Board, the chief executive officer or the president may appoint independent inspectors of elections to act as the agent of the Corporation for the purpose of promptly performing a ministerial review of the validity of any purported Special Meeting Request received by the secretary. For the purpose of permitting the inspectors to perform such review, no such purported request shall be deemed to have been delivered to the secretary until the earlier of (1) five Business Days after receipt by the secretary of such purported request and (2) such date as the independent inspectors certify to the Corporation that the valid requests received by the secretary represent at least the Special Meeting Percentage. Nothing contained in this subsection (6) shall in any way be construed to suggest or imply that the Corporation or any stockholder shall not be entitled to contest the validity of any request, whether during or after such five Business Day period, or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

(i)For purposes of these Bylaws, "Business Day" shall mean any day other than a Saturday, a Sunday or other day on which banking institutions in the State of California are authorized or obligated by law or executive order to close.

Section 2.4 <u>NOTICE OF MEETINGS</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Method of Delivery; Minimum Consents; Waiver.</u> Written or printed notice of the purpose or purposes, in the case of a special meeting, and of the time and place of every meeting of the stockholders, shall be given by the secretary of the Corporation to each stockholder of record entitled to vote at the meeting and to each other stockholder entitled to notice of the meeting, by (i) presenting to such stockholder personally, (ii) placing the notice in the mail, (iii) delivering it by overnight delivery service (iv) transmitting the notice by electronic mail or any other electronic means or (v) any other means permitted by Maryland law at least ten days, but not more than 90 days, however in the case of a special meeting, as described in Section 2.3,

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within ten days of receiving a stockholder request, prior to the date designated for the meeting, addressed to each stockholder at such stockholder's address appearing on the books of the Corporation or supplied by the stockholder to the Corporation for the purpose of notice. The notice of any meeting of stockholders may be accompanied by a form of proxy approved by the Board in favor of the actions or persons as the Board may select. Notice of any meeting of stockholders shall be deemed waived by any stockholder who attends the meeting in person or by proxy or who before or after the meeting submits a signed waiver of notice that is filed with the records of the meeting.

(b)Except as provided in Article II , Section 2.10, any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the notice of such meeting, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice of such meeting.

Section 2.5 <u>ORGANIZATION AND CONDUCT</u>. Every meeting of stockholders shall be conducted by an individual appointed by the Board to be chairman of the meeting or, in the absence of such appointment, by the Chairman of the Board, if any, or, in the case of a vacancy in the office or absence of the Chairman of the Board, by one of the following officers present at the meeting: the Vice Chairman of the Board, if any, the chief executive officer, the president, any vice president, the secretary, the treasurer or, in the absence of such officers, a chairman chosen by the stockholders by the vote of a majority of the votes cast by stockholders present in person or by proxy. The secretary or, in the secretary's absence, an assistant secretary or, in the absence of both the secretary and assistant secretaries, an individual appointed by the Board or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary. In the event that the secretary presides at a meeting of the stockholders, an assistant secretary, or, in the absence of assistant secretaries, an individual appointed by the Board or the chairman of the meeting, shall record the minutes of the meeting. The order of business and all other matters of procedure at any meeting of stockholders shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of such chairman, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to stockholders of record of the Corporation, their duly authorized proxies or other such individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to stockholders of record of the Corporation entitled to vote on such matter, their duly authorized proxies or other such individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments by participants; (e) maintaining order and security at the meeting; (f) removing any stockholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; and (g) recessing or adjourning the meeting to a later date and time and place announced at the meeting. Unless otherwise determined by the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

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Section 2.6 <u>QUORUM</u>. The presence in person or by proxy of the holders of shares of stock of the Corporation entitled to cast fifty percent of the votes entitled to be cast (without regard to class) shall constitute a quorum at any meeting of the stockholders, except with respect to any such matter that, under applicable statutes or regulatory requirements, requires approval by a separate vote of one or more classes of stock, in which case the presence in person or by proxy of the holders of shares entitled to cast fifty percent of the votes entitled to be cast by each such class on such a matter shall constitute a quorum.

If, however, such quorum shall not be present at any meeting of the stockholders, the chairman of the meeting or the stockholders entitled to vote at such meeting, present in person or by proxy, shall have the power to adjourn the meeting from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified. The stockholders present either in person or by proxy, at a meeting which has been duly called and convened, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 2.7 <u>VOTING</u>. Directors shall be elected by the affirmative vote of the holders of a majority of the shares of stock outstanding and entitled to vote thereon. Each share may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum, as defined in Section 2.6 of this Article II, is present shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by the Investment Company Act or other statute or regulation or the charter of the Corporation. Unless otherwise provided in the charter, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.

Section 2.8 <u>PROXIES</u>. A stockholder may cast the votes entitled to be cast by the shares of stock owned of record by the stockholder in person or by proxy executed by the stockholder or by the stockholder's duly authorized agent in any manner permitted by law. Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Corporation before or at the meeting. No proxy shall be valid more than eleven months after its date unless otherwise provided in the proxy.

Section 2.9 <u>VOTING OF STOCK BY CERTAIN HOLDERS</u>. Stock of the Corporation registered in the name of a corporation, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, a general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such stock pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such stock. Any fiduciary may vote stock registered in his or her name as such fiduciary, either in person or by proxy.

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Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

The Board may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date or closing of the stock transfer books, the time after the record date or closing of the stock transfer books within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board considers necessary or desirable. On receipt of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the stockholder of record of the specified stock in place of the stockholder who makes the certification.

Section 2.10 INSPECTORS. The Board, in advance of any meeting of Stockholders, may, but need not, appoint one or more individual inspectors or one or more entities that designate individuals as inspectors to act at the meeting or any adjournment thereof. If an inspector or inspectors are not appointed, the person presiding at the meeting may, but need not, appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be filled by appointment made by the Board in advance of the meeting or at the meeting by the chairman of the meeting. The inspectors, if any, shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, as defined in Section 2.6 of this Article II, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, and determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. Each such report shall be in writing and signed by him or her or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

Section 2.11 ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER STOCKHOLDER PROPOSALS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Annual Meetings of Stockholders.

(i)Nominations of individuals for election to the Board and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders

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(1) pursuant to the Corporation's notice of meeting, (2) by or at the direction of the Board or (3) by any stockholder of the Corporation who was a stockholder of record both at the time of giving of notice provided for in this Section 2.11 (a) and at the time of the annual meeting, who is entitled to vote at the meeting and who has complied with this Section 2.11 (a).

(ii)For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (3) of subsection (a)(i) of this Section 2.11, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and such other business must otherwise be a proper matter for action by the stockholders. To be timely, a stockholder's notice shall set forth all information required under this Section 2.11 and shall be delivered to the secretary at the principal executive office of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the date of mailing of the notice for the preceding year's annual meeting; provided, however, that in the event that the date of the mailing of the notice for the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of mailing of the notice for the preceding year's annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the 120th day prior to the date of mailing of the notice for such annual meeting and not later than the close of business on the later of the 90th day prior to the date of mailing of the notice for such annual meeting or the tenth day following the day on which public announcement of the date of mailing of the notice for such meeting is first made. In no event shall the public announcement of a postponement or adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (1) as to each individual whom the stockholder proposes to nominate for election or reelection as a director, (A) the name, age, business address and residence address of such individual, (B) the class, series and number of any shares of stock of the Corporation that are beneficially owned by such individual and the date such shares were acquired and the investment intent of such acquisition, (C) whether such stockholder believes any such individual is, or is not, an "interested person" of the Corporation, as defined in the Investment Company Act of 1940, as amended, and the rules promulgated thereunder (the "Investment Company Act") and information regarding such individual that is sufficient, in the discretion of the Board or any committee thereof or any authorized officer of the Corporation, to make such determination and (D) all other information relating to such individual that is required to be disclosed in solicitations of proxies for election of directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder (including such individual's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (2) as to any other business that the stockholder proposes to bring before the meeting, a description of the business desired to be brought before the meeting, the reasons for proposing such business at the meeting and any material interest in such business of such stockholder and any Stockholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the stockholder and any Stockholder Associated Person therefrom; (3) as to the stockholder giving the notice and any Stockholder Associated Person, the class, series and number of all shares of stock of the Corporation which are owned beneficially by such stockholder and by such Stockholder Associated Person, if any, (4) as to the stockholder giving the notice and any Stockholder Associated Person covered by clauses (2) or (3) of this Section

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2.11(a)(ii), the name and address of such stockholder, as they appear on the Corporation's stock ledger and current name and address, if different, and of such Stockholder Associated Person and (5) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director or the proposal of other business on the date of such stockholder's notice.

(iv)For purposes of this Section 2.11, "Stockholder Associated Person" of any stockholder shall mean (1) any person controlling, directly or indirectly, or acting in concert with, such stockholder, (2) any beneficial owner of shares of stock of the Corporation owned of record or beneficially by such stockholder and (3) any person controlling, controlled by or under common control with such Stockholder Associated Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Special Meetings of Stockholders</u>. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of individuals for election to the Board may be made at a special meeting of stockholders at which directors are to be elected (1) pursuant to the Corporation's notice of meeting, (2) by or at the direction of the Board or (3) provided that the Board has determined that directors shall be elected at such special meeting, by any stockholder of the Corporation who is a stockholder of record both at the time of giving of notice provided for in this Section 2.11 and at the time of the special meeting, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 2.11. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more individuals to the Board, any such stockholder may nominate an individual or individuals (as the case may be) for election as a director as specified in the Corporation's notice of meeting, if the stockholder's notice required by subsection (a)(ii) of this Section 2.11 shall be delivered to the secretary at the principal executive office of the Corporation not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of a postponement or adjournment of a special meeting commence a new time period for the giving of a stockholder's notice as described above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) General.

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(i)Upon written request by the secretary or the Board or any committee thereof, any stockholder proposing a nominee for election as a director or any proposal for other business at a meeting of stockholders shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), written verification, satisfactory, in the discretion of the Board or any committee thereof or any authorized officer of the Corporation, to demonstrate the accuracy of any information submitted by the stockholder pursuant to this Section 2.11 . If a stockholder fails to provide such written verification within such period, the information as to which written verification was requested may be deemed not to have been provided in accordance with this Section 2.11.

(ii)Only such individuals who are nominated in accordance with this Section 2.11 shall be eligible for election as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with this Section 2.11. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 2.11.

(iii)For purposes of this Section 2.11, (1) the "date of mailing of the notice" shall mean the date of the proxy statement for the solicitation of proxies for election of directors and (2) "public announcement" shall mean disclosure (a) in a press release reported by the Dow Jones News Service, Associated Press or comparable news service or (b) in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to the Exchange Act or the Investment Company Act.

(iv)Notwithstanding the foregoing provisions of this Section 2.11, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.11. Nothing in this Section 2.11 shall be deemed to affect any right of a stockholder to request inclusion of a proposal in, nor the right of the Corporation to omit a proposal from, the Corporation's proxy statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act.

Section 2.12 <u>VOTING BY BALLOT</u>. Voting on any question or in any election may be <u>viva voce</u> unless the presiding officer shall order or any stockholder shall demand that voting be by ballot.

Section 2.13 <u>CONTROL SHARE ACQUISITION ACT</u>. Notwithstanding any other provision of the charter of the Corporation or these Bylaws, Title 3, Subtitle 7 of the MGCL, or any successor statute, shall not apply to any acquisition by any person of shares of stock of the Corporation. This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.

**ARTICLE III** 

**DIRECTORS**

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Section 3.1 <u>GENERAL POWERS</u>. The business and affairs of the Corporation shall be managed under the direction of its Board. The Board may designate a Chairman of the Board and a Vice Chairman of the Board, who shall have such powers and duties as determined by the Board from time to time.

Section 3.2 <u>NUMBER, TENURE AND QUALIFICATIONS</u>. At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board may establish, increase or decrease the number of directors, provided that the number thereof shall never be less than the minimum number required by the MGCL, nor more than 11, and further provided that the tenure of office of a director shall not be affected by any decrease in the number of directors. Notwithstanding the foregoing sentence, the number of directors that shall comprise the Board shall not be less than three, except for a period of up to 60 days after the death, removal or resignation of a director pending the election of such director's successor.

Section 3.3 <u>ANNUAL AND REGULAR MEETINGS</u>. An annual meeting of the Board shall be held immediately after and at the same place as the annual meeting of stockholders, if any, no notice other than this Bylaw being necessary. In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board. Regular meetings of the Board shall be held from time to time at such places and times as provided by the Board by resolution, without notice other than such resolution.

Section 3.4 <u>SPECIAL MEETINGS</u>. Special meetings of the Board may be called by or at the request of the Chairman of the Board, the chief executive officer, the president or by a majority of the directors then in office. The person or persons authorized to call special meetings of the Board may fix any place as the place for holding any special meeting of the Board called by them. The Board may provide, by resolution, the time and place for the holding of special meetings of the Board without notice other than such resolution.

Section 3.5 <u>NOTICE</u>. Notice of any annual, special or regular meeting of the Board shall be delivered personally or by telephone, electronic mail, facsimile transmission, United States mail or courier to each director at his or her business or residence address. Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 24 hours prior to the meeting. Notice by United States mail shall be given at least three days prior to the meeting. Notice by courier shall be given at least two days prior to the meeting. Telephone notice shall be deemed to be given when the director or his or her agent is personally given such notice in a telephone call to which the director or his or her agent is a party. Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Corporation by the director. Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Corporation by the director and receipt of a completed answer-back indicating receipt. Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed. Neither the business to be transacted at, nor the

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purpose of, any annual, regular or special meeting of the Board need be stated in the notice, unless specifically required by statute or these Bylaws.

Section 3.6 <u>QUORUM</u>. A majority of the directors shall constitute a quorum for transaction of business at any meeting of the Board, provided that, if less than a majority of such directors are present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to the charter of the Corporation or these Bylaws, the vote of a majority of a particular group of directors is required for action, a quorum must also include a majority of such group.

The directors present at a meeting which has been duly called and convened may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.

Section 3.7 <u>VOTING</u>. The action of the majority of the directors present at a meeting at which a quorum, as defined in Section 3.6 of this Article III, is present shall be the action of the Board, unless the concurrence of a greater proportion is required for such action by applicable statute or the charter of the Corporation. If enough directors have withdrawn from a meeting to leave less than a quorum, as defined in Section 3.6 of this Article III, but the meeting is not adjourned, the action of the majority of the directors still present at such meeting shall be the action of the Board, unless the concurrence of a greater proportion is required for such action by applicable statute or the charter of the Corporation.

Section 3.8 <u>ORGANIZATION</u>. At each meeting of the Board, the chairman of the board or, in the absence of the chairman, the vice chairman of the board, if any, shall act as Chairman. In the absence of both the chairman and vice chairman of the board, the chief executive officer or in the absence of the chief executive officer, the president or in the absence of the president, a director chosen by a majority of the directors present, shall act as Chairman. The secretary or, in his or her absence, an assistant secretary of the Corporation, or in the absence of the secretary and all assistant secretaries, a person appointed by the Chairman, shall act as secretary of the meeting.

Section 3.9 <u>TELEPHONE MEETINGS</u>. Directors may participate in a meeting by means of a conference telephone or similar communications equipment or by means of video conference if all persons participating in the meeting can hear each other at the same time. any action of the directors pursuant to the Investment Company Act that requires the vote of the directors to be cast in person at a meeting, shall be allowed by means of video conference (wherein all the participants can see one another). Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 3.10 <u>WRITTEN CONSENT BY DIRECTORS</u>. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting, if a consent in writing to such action is signed by each director and such written consent is filed with the minutes of proceedings of the Board; provided however, this Section 3.10 does not apply to any action of the directors pursuant to the Investment Company Act that requires the vote of the directors to be cast in person at a meeting.

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Section 3.11 <u>VACANCIES</u>. If for any reason any or all the directors cease to be directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining directors hereunder, if any. Pursuant to the Corporation's election in Article IV of the charter of the Corporation, subject to applicable requirements of the Investment Company Act, except as may be provided by the Board in setting the terms of any class or series of preferred stock, (a) any vacancy on the Board may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, as defined in Section 3.6 of this Article III, and (b) any director elected to fill a vacancy shall serve for the remainder of the full term of the class in which directorship in which the vacancy occurred and until a successor is elected and qualifies. Notwithstanding the foregoing sentence, if there are independent directors on the Board, vacancies among the independent directors' positions on the Board may be filled only with the affirmative vote of a majority of the remaining independent directors in office, and any independent director elected to fill such a vacancy shall serve for the remainder of the full term of the directorship in which such vacancy occurred and until a successor is elected and qualifies.

Section 3.12 <u>COMPENSATION</u>. Directors shall not receive any stated salary for their services as directors or members of committees but, by resolution of the Board, may receive compensation per year and/or per meeting and/or per visit and for any service or activity they perform or engage in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board or of any committee thereof and for their expenses, if any, in connection with each visit and any other service or activity performed or engaged in as directors; but nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.

Section 3.13 <u>LOSS OF DEPOSITS</u>. No director shall be liable for any loss which may occur by reason of the failure of the bank, trust company, savings and loan association, or other institution with whom moneys or stock have been deposited.

Section 3.14 <u>SURETY BONDS</u>. Unless required by law, no director shall be obligated to give any bond or surety or other security for the performance of any of his or her duties.

Section 3.15 <u>RELIANCE.</u> Each director, officer, employee and agent of the Corporation shall, in the performance of his duties with respect to the Corporation, be fully justified and protected with regard to any act or failure to act in reliance in good faith upon the books of account or other records of the Corporation, upon an opinion of counsel or upon reports made to the Corporation by any of its officers or employees or by the advisers, accountants, appraisers or other experts or consultants selected by the directors or officers of the Corporation, regardless of whether such counsel or expert may also be a director.

Section 3.16 <u>CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS</u>. The directors shall have no responsibility to devote their full time to the affairs of the Corporation. Any director, officer, employee or agent of the Corporation, in his personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have

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business interests and engage in business activities similar to or in addition to those of or relating to the Corporation, subject to the adoption of any policies relating to such interests and activities adopted by the directors and applicable law.

**ARTICLE IV** 

**COMMITTEES**

Section 4.1 <u>NUMBER, TENURE AND QUALIFICATIONS</u>. The Board may appoint from among its members an Executive Committee, an Audit Committee, a Nominating and Corporate Governance Committee and other committees, composed of one or more directors, to serve at the pleasure of the Board.

Section 4.2 <u>POWERS</u>. The Board may delegate to committees appointed under Section 4.1 of this Article IV any of the powers of the Board, except as prohibited by law.

Section 4.3 <u>MEETINGS</u>. Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting at which a quorum is present shall be the act of such committee. The Board may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board shall otherwise provide. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another director to act in the place of such absent member. Each committee shall keep minutes of its proceedings.

Section 4.4 <u>TELEPHONE MEETINGS</u>. Members of a committee of the Board may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.

Section 4.5 <u>WRITTEN CONSENT BY COMMITTEES</u>. Any action required or permitted to be taken at any meeting of a committee of the Board may be taken without a meeting, if a consent in writing to such action is signed by each member of the committee and such written consent is filed with the minutes of proceedings of such committee.

Section 4.6 <u>VACANCIES</u>. Subject to the provisions hereof, the Board shall have the power at any time to change the membership of any committee, to fill all vacancies, to designate alternate members to replace any absent or disqualified member or to dissolve any such committee. Subject to the power of the Board, the members of the committee shall have the power to fill any vacancies on the committee.

**ARTICLE V** 

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**OFFICERS**

Section 5.1 <u>GENERAL PROVISIONS</u>. The officers of the Corporation shall include a president, a secretary and a treasurer; may include a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, a chief investment officer, to the extent that Rule 38a-1 under the Investment Company Act applies, a chief compliance officer and an anti-money laundering officer (which may be the same person as the chief compliance officer) , one or more assistant secretaries and one or more assistant treasurers. In addition, the Board may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable. The officers of the Corporation shall be elected annually by the Board, except that the chief executive officer or president may from time to time appoint one or more vice presidents, assistant secretaries, assistant treasurers or other officers. Each officer shall hold office until his or her successor is elected and qualifies or until death, resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.

Section 5.2 <u>REMOVAL AND RESIGNATION</u>. Any officer or agent of the Corporation may be removed, with or without cause, by the Board if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by giving written notice of his or her resignation to the Board, the chairman of the Board, the president or the secretary. Any resignation shall take effect immediately upon its receipt or at such later time specified in the notice of resignation. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.

Section 5.3 <u>VACANCIES</u>. A vacancy in any office may be filled by the Board for the balance of the term.

Section 5.4 <u>CHIEF EXECUTIVE OFFICER</u>. The Board may designate a chief executive officer. In the absence of such designation, the president shall be the chief executive officer of the Corporation. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed. The chief executive officer shall have general responsibility for implementation of the policies of the Corporation, as determined by the Board, and for the management of the business and affairs of the Corporation.

Section 5.5 <u>CHIEF OPERATING OFFICER</u>. The Board may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as set forth by the Board or the chief executive officer.

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Section 5.6 <u>CHIEF INVESTMENT OFFICER</u>. The Board may designate a chief investment officer. The chief investment officer shall have the responsibilities and duties as set forth by the Board or the chief executive officer.

Section 5.7 <u>CHIEF FINANCIAL OFFICER</u>. The Board may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as set forth by the Board or the chief executive officer.

Section 5.8 <u>CHIEF COMPLIANCE OFFICER</u>. The Board shall designate a chief compliance officer to the extent required by, and consistent with the requirements of, the Investment Company Act. The chief compliance officer, subject to the direction of and reporting to the Board, shall be responsible for the oversight of the Corporation's compliance with the Federal securities laws and other applicable regulatory requirements. The designation, compensation and removal of the chief compliance officer must be approved by the Board, including a majority of the directors who are not "interested persons" (as such term is defined in Section 2(a)(19) of the Investment Company Act) of the Corporation. The chief compliance officer shall perform such executive, supervisory and management functions and duties as may be assigned to him or her from time to time by the Board, the chief executive officer or the president.

Section 5.9 <u>PRESIDENT</u>. In the absence of a designation of a chief executive officer by the Board, the president shall be the chief executive officer. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board from time to time.

Section 5.10 <u>VICE PRESIDENTS</u>. In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by the president or by the Board. The Board may designate one or more vice presidents as executive vice president or as vice president for particular areas of responsibility.

Section 5.11 <u>SECRETARY</u>. The secretary shall: (1) keep the minutes of the proceedings of the stockholders, the Board and committees of the Board in one or more books provided for that purpose; (2) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (3) be custodian of the corporate records and of the seal of the Corporation; (4) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (5) have general charge of the stock transfer books of the Corporation; and (6) in general perform such other duties as from time to time may be assigned to him by the chief executive officer, the president or by the Board.

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Section 5.12 <u>TREASURER</u>. The treasurer shall be responsible for: (1) the custody of the funds and securities of the Corporation; (2) the keeping of full and accurate accounts of receipts and disbursements in books belonging to the Corporation; and (3) the depositing of all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board. In the absence of a designation of a chief financial officer by the Board, the treasurer shall be the chief financial officer of the Corporation.

The treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the president and Board, at the regular meetings of the Board or whenever it may so require, an account of all his or her transactions as treasurer and of the financial condition of the Corporation.

If required by the Board, the treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, moneys and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.

Section 5.13 <u>ASSISTANT SECRETARIES AND ASSISTANT TREASURERS</u>. The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the president or the Board. The assistant treasurers shall, if required by the Board, give bonds for the faithful performance of their duties in such sums and with such surety or sureties as shall be satisfactory to the Board.

**ARTICLE VI** 

**CONTRACTS, LOANS, CHECKS AND DEPOSITS**

Section 6.1 <u>CONTRACTS</u>. The Board may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Corporation when authorized or ratified by action of the Board and executed by an authorized person.

Section 6.2 <u>CHECKS AND DRAFTS</u>. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board.

Section 6.3 <u>DEPOSITS</u>. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may designate.

**ARTICLE VII** 

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**STOCK**

Section 7.1 <u>CERTIFICATES; REQUIRED INFORMATION.</u> Except as may be otherwise provided by the Board, stockholders of the Corporation are not entitled to certificates representing the shares of stock held by them. In the event that the Corporation issues shares of stock represented by certificates, such certificates shall be signed by the officers of the Corporation in the manner permitted by the MGCL and contain the statements and information required by the MGCL. There shall be no differences in the rights and obligations of stockholders based on whether or not their shares are represented by certificates.

Section 7.2 <u>STOCK LEDGER.</u> The Corporation will not initially issue shares of stock in the form of physical certificates. Shares will be recorded on the books and records of the Company which shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.

Section 7.3 <u>CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE</u>. The Board may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of stockholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.

In lieu of fixing a record date, the Board may provide that the stock transfer books shall be closed for a stated period but not longer than 20 days. If the stock transfer books are closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least ten days before the date of such meeting.

If no record date is fixed and the stock transfer books are not closed for the determination of stockholders, (1) the record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day on which the notice of meeting is mailed or the 30th day before the meeting, whichever is the closer date to the meeting; and (2) the record date for the determination of stockholders entitled to receive payment of a dividend or an allotment of any other rights shall be the close of business on the day on which the resolution of the directors, declaring the dividend or allotment of rights, is adopted.

When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof, except when (i) the determination has been made through the closing of the transfer books and the stated period of closing has expired or (ii) the meeting is adjourned to a date more

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than 120 days after the record date fixed for the original meeting, in either of which case a new record date shall be determined as set forth herein.

Section 7.4 <u>TRANSFERS WHEN CERTIFICATES ISSUED</u>. Upon surrender to the Corporation or the transfer agent of the Corporation of a stock certificate duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

Subject to Article II, Section 2.9 hereof, the Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Maryland.

Notwithstanding the foregoing, transfers of shares of any class of stock will be subject in all respects to the charter of the Corporation and all of the terms and conditions contained therein.

Section 7.5 <u>REPLACEMENT CERTIFICATE</u>. The president, the secretary, the treasurer or any officer designated by the Board may direct a new certificate to be issued in place of any certificate previously issued by the Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing the issuance of a new certificate, an officer designated by the Board may, in his or her discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or the owner's legal representative to advertise the same in such manner as he or she shall require and/or to give bond, with sufficient surety, to the Corporation to indemnify it against any loss or claim which may arise as a result of the issuance of a new certificate.

Section 7.6 <u>FRACTIONAL STOCK; ISSUANCE OF UNITS</u>. The Board may issue fractional stock or provide for the issuance of scrip, all on such terms and under such conditions as they may determine. Notwithstanding any other provision of the charter or these Bylaws, the Board may issue units consisting of different securities of the Corporation. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Corporation, except that the Board may provide that for a specified period securities of the Corporation issued in such unit may be transferred on the books of the Corporation only in such unit.

Section 7.7 <u>EXCHANGE OF PROGRAM INTERST</u>. The Corporation may not acquire assets in exchange for Stock.

**ARTICLE VIII** 

**ACCOUNTING YEAR**

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The fiscal year of the Corporation shall end on June 30 of each fiscal year, and may thereafter be changed by duly adopted resolution of the Board from time to time.

**ARTICLE IX** 

**DISTRIBUTIONS**

Section 9.1 <u>AUTHORIZATION</u>. Dividends and other distributions upon the stock of the Corporation may be authorized by the Board, subject to the provisions of law and the charter of the Corporation. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of law and the charter of the Corporation.

Section 9.2 <u>CONTINGENCIES</u>. Before payment of any dividends or other distributions, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends or other distributions, for repairing or maintaining any property of the Corporation or for such other purpose as the Board shall determine to be in the best interest of the Corporation, and the Board may modify or abolish any such reserve. Such reserves shall not be used for sponsor fees. Normally, such reserves shall not be less than 1% of the offering proceeds.

**ARTICLE X** 

**SEAL**

Section 10.1 <u>SEAL</u>. The Board may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation and the words "Incorporated in Maryland." The Board may authorize one or more duplicate seals and provide for the custody thereof.

Section 10.2 <u>AFFIXING SEAL</u>. Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word "(SEAL)" adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.

**ARTICLE XI** 

**INDEMNIFICATION AND ADVANCEMENT OF EXPENSES**

Section 11.1 <u>INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE CORPORATION.</u> Subject to any limitations set forth in Section 11.2 or Section 11.3 of this Article XI, or, with respect to the advancement of expenses in Section 11.4 below, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses as incurred in advance of final disposition of a proceeding to (i) any individual who is a present or former director or

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officer of the Corporation and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity, (ii) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served a director, officer, partner or trustee of any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (iii) the Adviser or any of its affiliates acting as an agent of the Corporation (each such person, an "Indemnitee"), in each case to the fullest extent permitted by Maryland law and the Investment Company Act. The Corporation may, with the approval of the board of directors or any duly authorized committee thereof, provide such indemnification and advance for expenses to a person who served a predecessor of the Corporation in any of the capacities described in (i) or (ii) above and to any employee or agent of the Corporation or a predecessor of the Corporation.

Section 11.2 <u>LIMITATION ON INDEMNIFICATION.</u> Notwithstanding anything to the contrary contained in Section 11.1 of this Article XI, the Corporation shall not provide for indemnification nor hold harmless an Indemnitee pursuant to Section 11.1 of this Article XI for any liability or loss suffered by such particular Indemnitee, unless all of the following conditions are met:

(a)The particular Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The particular Indemnitee was acting on behalf of or performing services for the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Such liability or loss was not the result of the particular Indemnitee's negligence or misconduct; and

(d)Such indemnification or agreement to hold harmless is recoverable only out of net assets of the Corporation and not from the stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Corporation may not indemnify and may not hold harmless any other Person who is not an Indemnitee.

Section 11.3 <u>GENERAL.</u> Notwithstanding anything to the contrary contained in Section 11.1 of this Article XI, the Corporation shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by any Indemnitee or any person acting as a broker-dealer, or a Sponsor pursuant to Section 11.2 of this Article XI, unless one or more of the following conditions are met: (a) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the particular Indemnitee, (b) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular Indemnitee, or (c) a court of competent jurisdiction approves a settlement of the claims against the particular Indemnitee, and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and

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Exchange Commission and of the published position of any state securities regulatory authority in which securities were offered or sold as to indemnification for violations of securities laws.

Neither the amendment nor repeal of this Article XI, nor the adoption or amendment of any other provision of the Bylaws or charter of the Corporation inconsistent with this Article XI, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.

No provision of this Article XI shall be effective to protect or purport to protect any director or officer of the Corporation against liability to the Corporation or its stockholders to which he or she would otherwise be subject by reason of willful misconduct, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

Section 11.4 <u>PAYMENT OF EXPENSES.</u> The Corporation shall pay or reimburse reasonable legal expenses and other costs incurred by the Indemnitee, the Sponsor, the Sponsor's Affiliates, director, an officer, the Adviser or any Affiliate of the Adviser in advance of final disposition of a proceeding only if all of the following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Corporation, (b) such Person provides the Corporation with written affirmation of such Person's good faith belief that the standard of conduct necessary for indemnification by the Corporation as authorized by this Article XI hereof has been met, (c) the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder of the Corporation acting in his or her capacity as such, a court of competent jurisdiction approves such advancement, and (d) such Person provides the Corporation with a written agreement to repay the amount paid or reimbursed by the Corporation, together with the applicable legal rate of interest thereon, in cases in which such Person is found not to be entitled to indemnification.

**ARTICLE XII** 

**REPORTS**

Section 12.1 The directors shall take reasonable steps to ensure that the Corporation shall cause to be prepared and mailed or delivered by any reasonable means, including an electronic medium, to each stockholder as of a record date after the end of the fiscal year and each holder of other publicly held securities within 120 days after the end of the fiscal year to which it relates an annual report for each fiscal year ending after the commencement of the Corporation's initial public offering that shall include: (a) financial statements prepared in accordance with generally accepted accounting principles which are audited and reported on by independent certified public accountants; (b) a report of the activities of the Corporation during the period covered by the report; and (c) where forecasts have been provided to the stockholders, a table comparing the forecasts previously provided with the actual results during the period covered by the report; and (d) a report setting forth distributions to stockholders for the period covered thereby and separately identifying distributions from: (i) cash flow from operations during the period, (ii) cash flow from operations during a prior period which have been held as reserves, (iii) proceeds from disposition of assets of the Corporation; and (iv) reserves from the gross proceeds. Such

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annual report must also contain a breakdown of the costs reimbursed to the Adviser. The directors shall take reasonable steps to ensure that, (A) within the scope of the annual audit of the Adviser's financial statements, the independent certified public accountants preparing such annual report will issue a special report on the allocation of such costs to the Corporation in accordance with the investment adviser agreement, (B) the special report shall be in accordance with the American Institute of Certified Public Accountants United States Auditing Standards relating to special reports, (C) the additional costs of such special report will be itemized and may be reimbursed to the Adviser by the Corporation in accordance with this Section only to the extent that such reimbursement, when added to the cost for administrative services rendered, does not exceed the competitive rate for such services as determined above, (D) the special report shall at minimum provide: a review of the time records of individual employees, the costs of whose services were reimbursed; and a review of the specific nature of the work performed by each such employee, and (E) the prospectus, prospectus supplement or periodic report as filed with the Securities and Exchange Commission shall disclose in tabular form an itemized estimate of such proposed expenses for the next fiscal year together with a breakdown by year of such expenses reimbursed in each of the last five public programs formed by the Adviser.

Section 12.2 The directors, including the independent directors, shall take reasonable steps to ensure that the Corporation shall cause to be prepared and mailed or delivered to each stockholder within 60 days after the end of each fiscal quarter of the Corporation, the Corporation's Quarterly Report on Form 10-Q ("Form 10-Q"), if required (or, at the board of directors' discretion, a report containing the same financial information contained in Form 10-Q).

Section 12.3 The directors, including the independent directors, shall take reasonable steps to ensure that the Corporation shall cause to be prepared and mailed or delivered within 75 days after the end of each fiscal year of the Corporation to each Person who was at any time during such fiscal year a stockholder all information necessary for the preparation of the stockholders' federal income tax returns.

Section 12.4 If stock has been purchased on a deferred payment basis, on which there remains an unpaid balance during any period covered by any report required by Section 12.1 and Section 12.2 of this Article XII above; then such report shall contain a detailed statement of the status of all deferred payments, actions taken by the Corporation in response to any defaults, and a discussion and analysis of the impact on capital requirements of the Corporation.

**ARTICLE XIII** 

**WAIVER OF NOTICE**

Whenever any notice is required to be given pursuant to the charter of the Corporation or these Bylaws or pursuant to applicable law, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. The

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attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

**ARTICLE XIV** 

**INVESTMENT COMPANY ACT**

If and to the extent that any provision of the MGCL, including, without limitation, Subtitle 6 and, if then applicable, Subtitle 7, of Title 3 of the MGCL, or any provision of the charter of the Corporation or these Bylaws conflicts with any provision of the Investment Company Act, the applicable provision of the Investment Company Act shall control.

**ARTICLE XV**

**AMENDMENT OF BYLAWS**

The Board shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws, provided that any alteration, amendment or repeal of the Bylaws that adversely affects the rights of the stockholders shall require the concurrence by holders of a majority of the shares entitled to vote on the matter.

## Exhibit 10.1

**SECOND AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT**

**BETWEEN**

**PROSPECT ALTERNATIVE FLOATING RATE & ALTERNATIVE INCOME FUND, INC.**

**AND**

**PROSPECT CAPITAL MANAGEMENT L.P.**

This Second Amended and Restated Investment Advisory Agreement (the "Agreement") is made as of this March 4, 2026, by and between Prospect Alternative Floating Rate & Alternative Income Fund, Inc., a Maryland corporation (the "Corporation"), and Prospect Capital Management L.P., a Delaware limited partnership (the "Adviser").

WHEREAS, the Corporation is an externally managed, non-diversified, closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (the "Investment Company Act");

WHEREAS, the Adviser is an investment adviser that has registered under the Investment Advisers Act of 1940, as amended (the "Advisers Act");

WHEREAS, the Company and the Adviser entered into investment advisory agreement dated April 20, 2021 (the "Original Agreement");

WHEREAS, the common stock of the Company is not currently listed on a national securities exchange; and

WHEREAS, the Corporation and the Adviser desire to amend and restate the Original Agreement in its entirety to reflect a reduction in the Management Fee (as defined below) until such time as the one year anniversary of the date on which Corporation's common stock is listed on a national securities exchange (the "Listing Anniversary") and for other purposes.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;<u>Duties of the Adviser</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The Corporation hereby employs the Adviser to act as the investment adviser to the Corporation and to manage the investment and reinvestment of the assets of the Corporation, subject to the supervision of the Board of Directors of the Corporation, for the period and upon the terms herein set forth, (i) in accordance with the investment objective, policies and restrictions that are set forth in the Corporation's Registration Statement on Form N-2, as the same shall be amended from time to time (as amended, the "Registration Statement"), (ii) in accordance with the Investment Company Act and (iii) during the term of this Agreement in accordance with all other applicable federal and state laws, rules and regulations, and the Corporation's articles of incorporation and by-laws, as each may be amended from time to time. Without limiting the generality of the foregoing, the Adviser shall, during the term and subject to the provisions of this Agreement, (i) determine the composition of the portfolio of the Corporation, the nature and timing of the changes therein and the manner of implementing such changes; (ii)

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identify, evaluate and negotiate the structure of the investments made by the Corporation; (iii) close and monitor the Corporation's investments; (iv) determine the securities and other assets that the Corporation will purchase, retain, or sell; (v) perform due diligence on prospective investments; and (vi) provide the Corporation with such other investment advisory, research and related services as the Corporation may, from time to time, reasonably require for the investment of its funds. The Adviser shall have the power and authority on behalf of the Corporation to effectuate its investment decisions for the Corporation, including the execution and delivery of all documents relating to the Corporation's investments and the placing of orders for other purchase or sale transactions on behalf of the Corporation. In the event that the Corporation determines to acquire debt financing, the Adviser will arrange for such financing on the Corporation's behalf, subject to the oversight and approval of the Corporation's Board of Directors. If it is necessary for the Adviser to make investments on behalf of the Corporation through a special purpose vehicle, the Adviser shall have authority to create or arrange for the creation of such special purpose vehicle and to make such investments through such special purpose vehicle in accordance with the Investment Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;The Adviser hereby accepts such employment and agrees during the term hereof to render the services described herein for the compensation provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;Subject to the requirements of the Investment Company Act, the Adviser is hereby authorized to enter into one or more sub-advisory agreements with other investment advisers (each, a "Sub-Adviser") pursuant to which the Adviser may obtain the services of the Sub-Adviser(s) to assist the Adviser in fulfilling its responsibilities hereunder. Specifically, the Adviser may retain a Sub-Adviser to recommend specific securities or other investments based upon the Corporation's investment objective and policies, and work, along with the Adviser, in structuring, negotiating, arranging or effecting the acquisition or disposition of such investments and monitoring investments on behalf of the Corporation, subject to the oversight of the Adviser and the Corporation. The Adviser, and not the Corporation, shall be responsible for any compensation payable to any Sub-Adviser. Any sub-advisory agreement entered into by the Adviser shall be in accordance with the requirements of the Omnibus Guidelines published by the North American Securities Administrators Association on May 7, 2007, as may be amended from time to time (the "NASAA Omnibus Guidelines"), the Investment Company Act and other applicable federal and state law and shall contain a provision requiring the Sub-Adviser to comply with Sections 1(e) and 1(f) of this Agreement below as if it were the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) &nbsp;&nbsp;&nbsp;&nbsp;The Adviser shall for all purposes herein provided be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Corporation in any way or otherwise be deemed an agent of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) &nbsp;&nbsp;&nbsp;&nbsp;The Adviser shall keep and preserve for the period required by the Investment Company Act any books and records relevant to the provision of its investment advisory services to the Corporation and shall specifically maintain all books and records with respect to the Corporation's portfolio transactions and shall render to the Corporation's Board of Directors such periodic and special reports as the Corporation's Board of Directors may reasonably request. The Adviser agrees that all records that it maintains for the Corporation are the property of the Corporation and will surrender promptly to the Corporation any such records upon the Corporation's request, provided that the Adviser may retain a copy of such records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) &nbsp;&nbsp;&nbsp;&nbsp;The Adviser has adopted and implemented written policies and procedures reasonably designed to prevent violation of the Federal Securities Laws (as defined in Rule 38a-1 under the Investment Company Act) by the Adviser, including an investment allocation policy which delineates how the Adviser will allocate investments between the Corporation, on the one hand, and other funds, separate accounts and investment accounts managed by the Advisor, on the other hand. The Adviser has provided the Corporation, and in the future shall provide the Corporation, at such times as the Corporation shall reasonably request, with a copy of such policies and procedures

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and a report of such policies and procedures; such report shall be of sufficient scope and in sufficient detail, as may reasonably be required to comply with Rule 38a-1 under the Investment Company Act and to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;&nbsp;The Adviser shall have a fiduciary responsibility and duty to the Corporation and the Corporation's stockholders for the safekeeping and use of all the funds and assets of the Corporation, whether or not in the Adviser's immediate possession or control, and that the Adviser shall not employ, or permit another to employ, such funds or assets except for the exclusive benefit of the Corporation. The Adviser shall not, by entry into an agreement with any stockholder of the Corporation or otherwise, contract away the fiduciary obligation owed to the Corporation and the Corporation's stockholders under common law. Nothing herein shall be construed to mean that the power of direction of the Adviser or the exercise of such power by any person shall cause such person to have duties, including fiduciary duties, or liabilities relating thereto to the Corporation or any stockholder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. &nbsp;&nbsp;&nbsp;&nbsp;<u>Corporation's Responsibilities and Expenses Payable by the Corporation</u>. All investment professionals of the Adviser, when and to the extent engaged in providing investment advisory and management services hereunder, and the compensation of such personnel allocable to such services, will be provided and paid for by the Adviser and not by the Corporation. The Corporation, either directly or through reimbursement of the Adviser, will bear all other costs and expenses of its operations and transactions, including (without limitation) those relating to: organization and offering; calculating the Corporation's net asset value (including the cost and expenses of any independent valuation firms); expenses incurred by the Adviser, Prospect Administration LLC (or such other entity serving as the Corporation's administrator, the "Administrator") or affiliates thereof payable to third parties, including agents, consultants or other advisors (such as independent valuation firms, accountants and legal counsel), in monitoring financial and legal affairs for the Corporation and in monitoring the Corporation's investments and performing due diligence on its prospective investments; interest payable on debt, if any, incurred to finance the Corporation's investments; offerings of the Corporation's debt, common stock and other securities; investment advisory and management fees; administration fees, if any, payable under the Administration Agreement (as amended and restated, the "Administration Agreement") between the Corporation and the Administrator; fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments; transfer agent and custodial fees; fees and expenses associated with marketing efforts (including attendance at investment conferences and similar events); federal and state registration fees; all costs of registration and listing the Corporation's securities on any securities exchange; federal, state and local taxes; Directors' fees and expenses; costs of preparing and filing reports or other documents required by the Securities and Exchange Commission or any other governmental agency; costs of any reports, proxy statements or other notices to stockholders, including printing costs; the Corporation's allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs; and research and market data expenses including, without limitation, news and quotation equipment and services; computer software specific to the business of the Corporation; any unreimbursed expenses incurred in connection with transactions not consummated. The Adviser will be entitled to receive reimbursement from the Corporation of organization and offering expenses it has paid on behalf of the Corporation until all of the organization and offering expenses incurred and/or paid by the Adviser have been recovered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Compensation of the Adviser</u>. The Corporation agrees to pay, and the Adviser agrees to accept, as compensation for the services provided by the Adviser hereunder, a base management fee ("Base Management Fee") and an income incentive fee ("Incentive Fee"), as hereinafter set forth. The Corporation shall make any payments due hereunder to the Adviser or to the Adviser's designee as the Adviser may otherwise direct.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;The Base Management Fee shall be calculated as described below:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Prior to the Listing Anniversary, the Base Management Fee shall be calculated at an annual rate of 1.20% of the Corporation's average total assets. The Base Management Fee shall be payable quarterly in arrears, and shall be calculated based on the average value of the Corporation's total assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Commencing with the fee calculation that first occurs following the Listing Anniversary, the Base Management Fee shall be calculated at an annual rate of 1.75% of the Corporation's average total assets. The Base Management Fee shall be payable quarterly in arrears, and shall be calculated based on the average value of the Corporation's total assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter.

Base Management Fees for any partial month or quarter will be appropriately pro-rated. At the Adviser's option, the Base Management Fee for any period may be deferred, without interest thereon, and paid to the Adviser at any time subsequent to any such deferral as the Adviser determines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;Prior to the Listing Anniversary, the Adviser will not be entitled to an Incentive Fee. Following the Listing Anniversary, the Incentive Fee shall consist of two parts, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;One part will be calculated and payable quarterly in arrears based on the pre-Incentive Fee net investment income for the immediately preceding calendar quarter commencing with the first calendar quarter following the Listing Anniversary. For this purpose, pre-Incentive Fee net investment income means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence and consulting fees and fees for providing significant managerial assistance or other fees that the Corporation receives from portfolio companies) accrued by the Corporation during the calendar quarter, minus the Corporation's operating expenses for the quarter (including the Base Management Fee, expenses payable under the Administration Agreement, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the organization and offering expenses and the Incentive Fee). Pre-Incentive Fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that the Corporation has not yet received in cash. Pre-Incentive Fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee net investment income, expressed as a rate of return on the value of the Corporation's net assets at the end of the immediately preceding calendar quarter, will be compared to a preferred return of 1.5% per quarter. The Corporation will pay the Adviser an Incentive Fee with respect to the Corporation's pre-Incentive Fee net investment income in each calendar quarter as follows: (1) no Incentive Fee is payable to the Adviser prior to the Listing Anniversary or in any calendar quarter in which the Corporation's pre-Incentive Fee net investment income does not exceed the preferred return; (2) 100% of the Corporation's pre-Incentive Fee net investment income with respect to that portion of such pre-Incentive Fee net investment income, if any, that exceeds the preferred return but is less than 1.875% in any calendar quarter; and (3) 20% of the amount of the Corporation's pre-Incentive Fee net investment income, if any, that exceeds 1.875% in any calendar quarter. These calculations will be appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;The second part of the Incentive Fee (the "Capital Gains Fee") will be determined and payable in arrears as of the end of each calendar year (or upon termination of this Agreement as set forth below), commencing in the year of the Listing Anniversary, and will equal 20.0% of the Corporation's realized capital gains for the calendar year, if any, computed net of all realized capital losses and unrealized capital depreciation at the end of such year; provided that, if the Listing Anniversary is a date other than January 1<sup>st</sup>, the Incentive Fee determined as of December 31<sup>st</sup> in the year of the Listing Anniversary will be calculated for a period of shorter than twelve calendar months to take into account any net realized capital gains, if any, computed net of all realized capital losses and unrealized capital depreciation for the period commencing as of the date of the Listing Anniversary and ending December 31<sup>st</sup> of that same calendar year. In the event that this Agreement shall terminate as of a date that is not a calendar year end, the termination date shall be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. &nbsp;&nbsp;&nbsp;&nbsp;<u>Covenants of the Adviser</u>. The Adviser covenants that it is registered as an investment adviser under the Advisers Act. The Adviser agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state laws and the NASAA Omnibus Guidelines governing its operations and investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. &nbsp;&nbsp;&nbsp;&nbsp;<u>Excess Brokerage Commissions</u>. The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Corporation to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firm's risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Corporation's portfolio, and constitutes the best net results for the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. &nbsp;&nbsp;&nbsp;&nbsp;<u>Limitations on the Employment of the Adviser</u>. The services of the Adviser and its affiliates to the Corporation are not exclusive, and the Adviser and its affiliates may engage in any other business or render similar or different services to others including, without limitation, the direct or indirect sponsorship or management of other investment based accounts or commingled pools of capital, however structured, having investment objectives similar to those of the Corporation, so long as its services to the Corporation hereunder are not impaired thereby, and nothing in this Agreement shall limit or restrict the right of any manager, partner, officer or employee of the Adviser and its affiliates to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Corporation's portfolio companies, subject to applicable law). So long as this Agreement or any extension, renewal or amendment remains in effect, the Adviser shall be the only investment adviser for the Corporation, subject to the Adviser's right to enter into sub-advisory agreements. The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood that directors, officers, employees and stockholders of the Corporation are or may become interested in the Adviser and its affiliates, as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Adviser and directors, officers, employees, partners, stockholders, members and managers of the Adviser and its affiliates are or may become similarly interested in the Corporation as stockholders or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. &nbsp;&nbsp;&nbsp;&nbsp;<u>Responsibility of Dual Directors, Officers and/or Employees</u>. If any person who is a manager, director, member, partner, officer or employee of the Adviser, the Administrator or their affiliates is or becomes a

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manager, director, member, partner, officer and/or employee of the Corporation and acts as such in any business of the Corporation, then such manager, director, member, partner, officer and/or employee of the Adviser, the Administrator or their affiliates shall be deemed to be acting in such capacity solely for the Corporation, and not as a manager, director, member, partner, officer or employee of the Adviser, the Administrator or their affiliates or under the control or direction of the Adviser, the Administrator or their affiliates, even if paid by the Adviser, the Administrator or their affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. &nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation of Liability of the Adviser; Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;The Adviser and its affiliates (and their respective officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the them, including without limitation the Administrator) shall not be liable to the Corporation for any action taken or omitted to be taken by the Adviser in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment adviser of the Corporation, except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation for services, and the Corporation shall indemnify, defend and protect the Adviser and its affiliates (and their respective officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with them, including without limitation the Administrator, each of whom shall be deemed a third party beneficiary hereof) (collectively, the "Indemnified Parties") and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Corporation or its security holders) arising out of or otherwise based upon the performance of any of the Adviser's duties or obligations under this Agreement or otherwise as an investment adviser of the Corporation. Notwithstanding the preceding sentence of this Section 8 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Adviser's duties or by reason of the reckless disregard of the Adviser's duties and obligations under this Agreement (as the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the Securities and Exchange Commission or its staff thereunder).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary in Section 8(a), the indemnification of the Indemnified Parties shall be limited as required by the NASAA Omnibus Guidelines as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall not provide for indemnification nor hold harmless an Indemnified Party for any liability or loss suffered, unless all of the following conditions are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) &nbsp;&nbsp;&nbsp;&nbsp;The Corporation has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) &nbsp;&nbsp;&nbsp;&nbsp;The Indemnified Party was acting on behalf of or performing services for the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) &nbsp;&nbsp;&nbsp;&nbsp;Such liability or loss was not the result of the Indemnified Party's negligence or misconduct; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) &nbsp;&nbsp;&nbsp;&nbsp;Such indemnification or agreement to hold harmless is recoverable only out of the net assets of the Corporation and not from the stockholders.

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&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by any Indemnified Party, unless one or more of the following conditions are met: (a) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnified Party, (b) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnified Party, or (c) a court of competent jurisdiction approves a settlement of the claims against the Indemnified Party, and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities were offered or sold as to indemnification for violations of securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. &nbsp;&nbsp;&nbsp;&nbsp;<u>Effectiveness, Duration and Termination of Agreement</u>. This Agreement initially became effective on January 1, 2022. This Agreement shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (a) the vote of the Corporation's Board of Directors, or by the vote of a majority of the outstanding voting securities of the Corporation and (b) the vote of a majority of the Corporation's Directors who are not parties to this Agreement or "interested persons" (as such term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act. This Agreement may be terminated at any time, without the payment of any penalty, upon 60 days' written notice, by the vote of a majority of the outstanding voting securities of the Corporation, or by the vote of the Corporation's Directors. The Adviser may terminate this Agreement upon 120 days' written notice and shall pay expenses incurred as a result of its voluntary termination of the Agreement. The Adviser shall promptly upon termination: (i) deliver to the Corporation's Board of Directors a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Corporation's Board of Directors; (ii) deliver to the Corporation's Board of Directors all assets and documents of the Corporation then in custody of the Adviser; and (iii) cooperate with the Corporation to provide an orderly transition of services. This Agreement will automatically terminate in the event of its "assignment" (as such term is defined for purposes of Section 15(a)(4) of the Investment Company Act). The provisions of Section 8 of this Agreement shall remain in full force and effect, and the Adviser and its representatives shall remain entitled to the benefits thereof, notwithstanding any termination or expiration of this Agreement. Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Adviser shall be entitled to any amounts owed under Section 3 of this Agreement through the date of termination or expiration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Conflicts of Interests and Prohibited Activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;No Exclusive Agreement. The Adviser is not hereby granted or entitled to an exclusive right to sell or exclusive employment to sell assets for the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;Rebates, Kickbacks and Reciprocal Arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;The Adviser agrees that it shall not (A) receive or accept any rebate, give-up or similar arrangement that is prohibited under applicable federal or state securities laws, (B) participate in any reciprocal business arrangement that would circumvent provisions of applicable federal or state securities laws governing conflicts of interest or investment restrictions, or (C) enter into any agreement, arrangement or understanding that would circumvent the restrictions against dealing with affiliates or promoters under applicable federal or state securities laws.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;The Adviser agrees that it shall not directly or indirectly pay or award any fees or commissions or other compensation to any person or entity engaged to sell the Corporation's stock or give investment advice to a potential stockholder; provided, however, that this subsection shall not prohibit the payment of a registered broker-dealer or other properly licensed agent from normal sales commissions for selling or distributing the Corporation's common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;Commingling. The Adviser covenants that it shall not permit or cause to be permitted the Corporation's funds from being commingled with the funds of any other Person (as defined in the NASAA Omnibus Guidelines). Nothing in this Subsection 10(c) shall prohibit the Adviser from establishing a master fiduciary account pursuant to which separate sub-trust accounts are established for the benefit of affiliated programs, provided that the Corporation's funds are protected from the claims of other programs and creditors of such programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. &nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. &nbsp;&nbsp;&nbsp;&nbsp;<u>Amendments</u>. This Agreement may be amended by mutual consent, but the consent of the Corporation must be obtained in conformity with the requirements of the Investment Company Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. &nbsp;&nbsp;&nbsp;&nbsp;<u>Entire Agreement; Governing Law</u>. This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. This Agreement shall be construed in accordance with the laws of the State of New York applicable to contracts formed and to be performed entirely within the State of New York and the applicable provisions of the Investment Company Act. To the extent the applicable laws of the State of New York, or any of the provisions herein, conflict with the provisions of the Investment Company Act, the latter shall control.

*[The remainder of this page intentionally left blank]*

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written.

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| | |
|:---|:---|
| **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PROSPECT FLOATING RATE & ALTERNATIVE INCOME FUND, INC.** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PROSPECT FLOATING RATE & ALTERNATIVE INCOME FUND, INC.** |
| By: | /s/ M. Grier Eliasek |
|  | Name: M. Grier Eliasek |
|  | Title: Chief Executive Officer & President |
| **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PROSPECT CAPITAL MANAGEMENT L.P.** | **&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; PROSPECT CAPITAL MANAGEMENT L.P.** |
| By: | /s/ John F. Barry III |
|  | Name: John F. Barry III |
|  | Title: Managing Member |

---

&nbsp;&nbsp;&nbsp;&nbsp;

[*Signature Page to Second Amended and Restated Investment Advisory Agreement*]

## Exhibit 10.2

**SECOND AMENDED AND RESTATED<br>ADMINISTRATION AGREEMENT**

THIS SECOND AMENDED AND RESTATED AGREEMENT (this "Agreement") is made as of March 4, 2026, by and between Prospect Alternative Floating Rate & Alternative Income Fund, Inc., a Maryland corporation (hereinafter referred to as the "Corporation"), and Prospect Administration LLC, a Delaware limited liability company (hereinafter referred to as the "Administrator").

W I T N E S S E T H:

WHEREAS, the Corporation is an externally managed, non-diversified, closed-end management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended (the "Investment Company Act");

WHEREAS, the Corporation desires to retain the Administrator to provide administrative services to the Corporation in the manner and on the terms hereinafter set forth; and

WHEREAS, the Administrator is willing to provide administrative services to the Corporation on the terms and conditions hereafter set forth.

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Corporation and the Administrator hereby agree as follows:

1.&nbsp;&nbsp;&nbsp;&nbsp;<u>Duties of the Administrator</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Employment of Administrator</u>. The Corporation hereby employs the Administrator to act as administrator of the Corporation, and to furnish, or arrange for others to furnish, the administrative services, personnel and facilities described below, subject to review by and the overall control of the Board of Directors of the Corporation, for the period and on the terms and conditions set forth in this Agreement. The Administrator hereby accepts such employment and agrees during such period to render, or arrange for the rendering of, such services and to assume the obligations herein set forth subject to the reimbursement of costs and expenses provided for below. The Administrator and such others shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized herein, have no authority to act for or represent the Corporation in any way or otherwise be deemed agents of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;<u>Services</u>. The Administrator shall perform (or oversee, or arrange for, the performance of) the administrative services necessary for the operation of the Corporation. Without limiting the generality of the foregoing, the Administrator shall provide the Corporation with office facilities, equipment and clerical, accounting, finance, legal, bookkeeping and record keeping services at such facilities and such other services as the Administrator, subject to review by the Board of Directors of the Corporation, shall from time to time determine to be necessary

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or useful to perform its obligations under this Agreement. The Administrator shall also, on behalf of the Corporation, conduct relations with custodians, depositories, transfer agents, dividend disbursing agents, other stockholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, regulatory authorities, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. The Administrator shall make reports to the Board of Directors of the Corporation of its performance of obligations hereunder and furnish advice and recommendations with respect to such other aspects of the business and affairs of the Corporation as the Administrator shall determine to be desirable; provided that nothing herein shall be construed to require the Administrator to, and the Administrator shall not, provide any advice or recommendation relating to the securities and other assets that the Corporation should purchase, retain or sell or any other investment advisory services to the Corporation. The Administrator shall be responsible for the financial and other records that the Corporation is required to maintain and shall prepare reports to stockholders, and reports and other materials filed with the Securities and Exchange Commission (the "SEC"). The Administrator will provide on the Corporation's behalf significant managerial assistance to those portfolio companies to which the Corporation is required to provide such assistance under the Investment Company Act or other applicable law. In addition, the Administrator will assist the Corporation in determining and publishing the Corporation's net asset value, overseeing the preparation and filing of the Corporation's tax returns, and the printing and dissemination of reports to stockholders of the Corporation, and generally overseeing the payment of the Corporation's expenses and the performance of administrative and professional services rendered to the Corporation by others.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;<u>Sub-Administrators</u>. The Administrator is hereby authorized to enter into one or more sub-administration agreements with other service providers (each a "Sub-Administrator") pursuant to which the Administrator may obtain the services of the service providers in fulfilling its responsibilities hereunder. Any such sub-administration agreements shall be in accordance with the requirements of the Omnibus Guidelines published by the North American Securities Administrators Association on May 7, 2007, as may be amended from time to time (the "NASAA Omnibus Guidelines"), the Investment Company Act and other applicable federal and state law and shall contain a provision requiring the Sub-Administrator to comply with Sections 2 and 3 below as if it were the Administrator.

2.&nbsp;&nbsp;&nbsp;&nbsp;<u>Records</u>. The Administrator agrees to maintain and keep all books, accounts and other records of the Corporation that relate to activities performed by the Administrator hereunder and, if required by the Investment Company Act, will maintain and keep such books, accounts and records in accordance with that Act. In compliance with the requirements of Rule 31a-3 under the Investment Company Act, the Administrator agrees that all records which it maintains for the Corporation shall at all times remain the property of the Corporation, shall be readily accessible during normal business hours, and shall be promptly surrendered upon the termination of this Agreement or otherwise on written request. The Administrator further agrees that all records which it maintains for the Corporation pursuant to Rule 31a-1 under the Investment Company Act will be preserved for the periods prescribed by Rule 31a-2 under the Investment Company Act unless any such records are earlier surrendered as provided above. Records shall be surrendered in usable machine-readable form. The Administrator shall have the right to retain

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copies of such records subject to observance of its confidentiality obligations under this Agreement.

3. &nbsp;&nbsp;&nbsp;&nbsp;<u>Compliance</u>. The Administrator has adopted and implemented written policies and procedures reasonably designed to prevent violation of Federal securities laws and the NASAA Omnibus Guidelines by the Administrator. The Administrator shall provide the Corporation, at such times as the Corporation shall reasonably request, with a copy of such policies and procedures and a report of such policies and procedures; such report shall be of sufficient scope and in sufficient detail, as may reasonably be required to comply with Rule 38a-1 under the Investment Company Act and to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the report shall so state.

4.&nbsp;&nbsp;&nbsp;&nbsp;<u>Confidentiality</u>. The parties hereto agree that each shall treat confidentially the terms and conditions of this Agreement and all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto, including nonpublic personal information pursuant to Regulation S-P of the SEC, shall be used by any other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party, without the prior consent of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed by any regulatory authority, any authority or legal counsel of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation.

5. &nbsp;&nbsp;&nbsp;&nbsp;<u>Compensation; Allocation of Costs and Expenses</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;In full consideration of the provision of the services of the Administrator, the Corporation shall reimburse the Administrator for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;The Corporation will bear all costs and expenses that are incurred in its operation and transactions and not specifically assumed by the Corporation's investment adviser (the "Adviser"), pursuant to that certain Investment Advisory Agreement, dated as of March 31, 2019, by and between the Corporation and the Adviser (the "Advisory Agreement"). Costs and expenses to be borne by the Corporation include, but are not limited to, those relating to: organization and offering; calculating the Corporation's net asset value (including the cost and expenses of any independent valuation firms); expenses incurred by the Adviser, Administrator or affiliates thereof payable to third parties, including agents, consultants or other advisors (such as independent valuation firms, accountants and legal counsel), in monitoring financial and legal affairs for the Corporation and in monitoring the Corporation's investments and performing due diligence on its prospective investments; interest payable on debt, if any, incurred to finance the Corporation's investments; offerings of the Corporation's debt, common stock and other securities; investment advisory and management fees; administration fees, if any, payable under this Agreement; fees payable to third parties, including agents, consultants or other advisors,

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relating to, or associated with, evaluating and making investments; transfer agent and custodial fees; fees and expenses associated with marketing efforts (including attendance at investment conferences and similar events); federal and state registration fees; all costs of registration and listing the Corporation's securities on any securities exchange; federal, state and local taxes; Directors' fees and expenses; costs of preparing and filing reports or other documents required by the SEC or any other governmental agency; costs of any reports, proxy statements or other notices to stockholders, including printing costs; the Corporation's allocable portion of any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums; direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors and outside legal costs; research and market data expenses including, without limitation, news and quotation equipment and services; computer software specific to the business of the Corporation; and any unreimbursed expenses incurred in connection with transactions not consummated.

6. &nbsp;&nbsp;&nbsp;&nbsp;<u>Limitation of Liability of the Administrator; Indemnification</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;The Administrator and its affiliates (and their respective officers, managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with them) shall not be liable to the Corporation for any action taken or omitted to be taken by the Administrator in connection with the performance of any of its duties or obligations under this Agreement or otherwise as administrator for the Corporation, and the Corporation shall indemnify, defend and protect the Administrator and its affiliates (and their respective officers, managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with the Administrator, each of whom shall be deemed a third party beneficiary hereof) (collectively, the "Indemnified Parties") and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys' fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Corporation or its security holders) arising out of or otherwise based upon the performance of any of the Administrator's duties or obligations under this Agreement or otherwise as administrator for the Corporation. Notwithstanding the preceding sentence of this Paragraph 6 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Corporation or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Administrator's duties or by reason of the reckless disregard of the Administrator's duties and obligations under this Agreement (to the extent applicable, as the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its staff thereunder).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything in section 8(a), the indemnification of the Indemnified Parties shall be limited as required by the NASAA Omnibus Guidelines as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall not provide for indemnification nor hold harmless an Indemnified Party for any liability or loss suffered, unless all of the following conditions are met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) &nbsp;&nbsp;&nbsp;&nbsp;The Corporation has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) &nbsp;&nbsp;&nbsp;&nbsp;The Indemnified Party was acting on behalf of or performing services for the Corporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) &nbsp;&nbsp;&nbsp;&nbsp;Such liability or loss was not the result of the Indemnified Party's negligence or misconduct; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) &nbsp;&nbsp;&nbsp;&nbsp;Such indemnification or agreement to hold harmless is recoverable only out of net assets of the Corporation and not from the stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by any Indemnified Party, unless one or more of the following conditions are met: (a) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnified Party, (b) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnified Party, or (c) a court of competent jurisdiction approves a settlement of the claims against the Indemnified Party, and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities were offered or sold as to indemnification for violations of securities laws.

7. &nbsp;&nbsp;&nbsp;&nbsp;<u>Activities of the Administrator</u>. The services of the Administrator to the Corporation are not to be deemed to be exclusive, and the Administrator and each affiliate is free to render services to others. It is understood that directors, officers, employees and stockholders of the Corporation are or may become interested in the Administrator and its affiliates, as directors, officers, members, managers, employees, partners, stockholders or otherwise, and that the Administrator and directors, officers, members, managers, employees, partners and stockholders of the Administrator and its affiliates are or may become similarly interested in the Corporation as stockholders or otherwise.

8.&nbsp;&nbsp;&nbsp;&nbsp;<u>Duration and Termination of this Agreement</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall become effective as of the date hereof, and shall remain in force with respect to the Corporation for two years thereafter, and thereafter continue from year to year, but only so long as such continuance is specifically approved at least annually by (i) the Board of Directors of the Corporation and (ii) a majority of those Directors who are not parties to this Agreement or "interested persons" (as defined in the Investment Company Act) of any such party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be terminated at any time, without the payment of any penalty, by vote of the Directors of the Corporation, or by the Administrator, upon 60 days written notice to the other party. This Agreement may not be assigned by a party without the consent of the other party.

9.&nbsp;&nbsp;&nbsp;&nbsp;<u>Amendments of this Agreement</u>. This Agreement may be amended pursuant to a written instrument by mutual consent of the parties.

10.&nbsp;&nbsp;&nbsp;&nbsp;<u>Governing Law</u>. This Agreement shall be construed in accordance with laws of the State of New York applicable to contracts formed and to be performed entirely within the State of New York and the applicable provisions of the Investment Company Act, if any. To the extent that the applicable laws of the State of New York, or any of the provisions herein, conflict with the applicable provisions of the Investment Company Act, if any, the latter shall control.

11.&nbsp;&nbsp;&nbsp;&nbsp;<u>Entire Agreement</u>. This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.

12.&nbsp;&nbsp;&nbsp;&nbsp;<u>Notices</u>. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office.

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.

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| | |
|:---|:---|
| **PROSPECT FLOATING RATE AND ALTERNATIVE INCOME FUND, INC.** | **PROSPECT FLOATING RATE AND ALTERNATIVE INCOME FUND, INC.** |
| By: | /s/ M. Grier Eliasek |
|  | Name: M. Grier Eliasek |
|  | Title: Chief Executive Officer & President |
| **PROSPECT ADMINISTRATION LLC** | **PROSPECT ADMINISTRATION LLC** |
| By: | /s/ M. Grier Eliasek |
|  | Name: M. Grier Eliasek |
|  | Title: Managing Director |

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