EXHIBIT C
FORM OF SENIOR NOTE
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE ISSUER HAS
NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (THE "INVESTMENT COMPANY ACT"). THIS SECURITY AND INTERESTS HEREIN MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A)(1) TO A
QUALIFIED PURCHASER (FOR PURPOSES OF THE INVESTMENT COMPANY ACT) THAT THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT THAT IS NOT A BROKER-DEALER WHICH OWNS AND
INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25 MILLION IN SECURITIES OF
ISSUERS THAT ARE NOT AFFILIATED PERSONS OF THE DEALER AND IS NOT A PLAN REFERRED
TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A OR A TRUST FUND
REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH
A PLAN, IF INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE MADE BY THE
BENEFICIARIES OF THE PLAN, PURCHASING FOR ITS OWN ACCOUNT, IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, OR (2) TO A NON-U.S. PERSON
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS
APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, IN EACH CASE SUBJECT TO
THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE AGREEMENT REFERRED TO
BELOW, AND IN EACH CASE WHICH MAY BE EFFECTED WITHOUT LOSS OF ANY APPLICABLE
INVESTMENT COMPANY ACT EXEMPTION, AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.
THIS NOTE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH SECTION 2.1 OF THE
AGREEMENT REFERENCED BELOW. ANY PURPORTED TRANSFER IN VIOLATION OF THE
REQUIREMENTS SET FORTH THEREIN SHALL BE NULL AND VOID AB INITIO.
Senior Note Initial Commitment Amount:
$[
]
[DATE]
Registration Number:
S-[
]
FOR VALUE RECEIVED, KCAP Funding (the "Issuer") promises to pay to the order of
[insert registered owner name] (the "Senior Noteholder") in lawful money of the
United States of America and in immediately available funds the principal amount
of [
] Million United States Dollars (U.S.$[
])
or, if less, the Outstanding Senior Note Amount on the Final Settlement Date as
required under the Note Purchase Agreement dated as of February 24, 2012 (the
"Effective Date") by and among Kohlberg Capital Corporation, in its capacity as
Junior Noteholder (as defined herein), Kohlberg Capital Corporation, in its
capacity as portfolio manager (the "Portfolio Manager"), Credit Suisse AG,
Cayman Islands Branch ("CS"), in its capacities as Senior Commitment Party and
Senior Noteholder (each, as defined herein), Credit Suisse Securities (USA) LLC
(the "Arranger"), KCAP Funding (the "Issuer") and The Bank of New York Mellon
Trust Company, National Association (the "Bank"), in its capacities as
Collateral Administrator and Collateral Agent (as it may be amended or modified
from time to time, the "Agreement"). Capitalized terms not defined herein will
have the meaning