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CST Trust Company: Exhibit 4.3 - Filed by newsfilecorp.com

Exhibit 4.3 

FORM OF GLOBAL NOTE 

     Unless
this certificate is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to Québec or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as requested by
an authorized representative of DTC (and any payment is made to Cede & Co.
or to such other entity as requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein. 

Note No. [ ] 

QUÉBEC 

• % Global Notes Series •  due •  

     This
global note, registered in the name of Cede & Co., as nominee of DTC (the
“Global Note”), is a permanent global note in respect of the duly authorized
issue of securities referred to above (the “Notes”) of Québec, and which is
issued pursuant to a Fiscal Agency Agreement, dated as of • , between Québec and
•  as registrar, fiscal agent, transfer agent and principal paying agent (the
“Fiscal Agent”, which term includes any successor registrar, fiscal agent,
transfer agent and principal paying agent under the Fiscal Agency Agreement), as
such agreement may be supplemented or amended, as the case may be (the “Fiscal
Agency Agreement”). This Global Note also represents any further notes which
Québec may issue, from time to time, pursuant to Section 19 (Further
Issues) of the Fiscal Agency Agreement. In the event such further notes are
issued, the word “Note” as defined above shall be deemed to also refer to such
further notes. 

     This
Global Note and all the rights of the Holder hereof are expressly subject to the
Fiscal Agency Agreement, and this Global Note and the Fiscal Agency Agreement
constitute a contract to all of the terms and conditions of which the holder by
acceptance hereof assents, is bound by and is deemed to have notice. All defined
terms unless defined herein have the meanings ascribed to them in the Fiscal
Agency Agreement. Copies of the Fiscal Agency Agreement are available for
inspection during regular business hours and may be obtained free of charge at
the principal office of the Fiscal Agent. This is a fully registered Global Note
without coupons attached. In certain limited circumstances, as described in
Section 5 of the Fiscal Agency Agreement, it is exchangeable in whole or in
part, at the office of the Fiscal Agent, for Certificated Notes. 

     FOR
VALUE RECEIVED, Québec hereby promises to pay to Cede & Co. or its
registered assigns in the manner hereinafter mentioned on •  (or on such earlier
date as the Principal Amount (as hereinafter defined) may become payable in
accordance with the terms hereof) the principal sum set forth in Schedule I
hereto from time to time (the “Principal Amount”) in lawful money of the United
States of America, on presentation and surrender of this Global Note, and to pay
interest in arrears on the said Principal Amount at the rate of • % per annum,
from • , or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, in two equal semi-annual installments on •  and •  in
each year (each an “Interest Payment Date”), commencing on • , until the
Principal Amount is paid in full or duly made available for payment, in each
case together with such further sum, if any, as may be payable by way of
Additional Amounts in accordance with the provisions set forth herein, and
should Québec at any time default in the payment of any of the Principal Amount
or interest on this Global Note or any Additional Amounts, to pay interest on
the amount in default (before as well as after judgment) at the same rate, in
like money, on the same dates. References herein to principal and interest in
respect of this Global Note or the Notes shall be deemed also to refer to any
Additional Amounts which may be payable concurrently therewith, unless the
context otherwise requires. Interest will cease to accrue on this Global Note on
•  (or on such earlier date as the Principal Amount may become payable in
accordance with the terms hereof) unless, upon due presentation of this Global
Note, payment of the Principal Amount or Additional Amounts, if any, is
improperly withheld or refused. 

     This
Global Note shall not become valid and obligatory for any purpose unless and
until this Global Note has been authenticated by the Fiscal Agent or its
authorized representative. 

SUMMARY OF TERMS AND CONDITIONS 

     The
following constitutes a summary of the terms and conditions of this Global Note
and the Notes and is qualified in its entirety by the more detailed terms and
conditions contained in Schedule B to the Fiscal Agency Agreement

Form, Denomination and Registration 

     The Notes
will be issued in the form of one or more fully registered global notes and all
Notes will be recorded in a Register held by a Fiscal Agent all as more fully
set forth in the Fiscal Agency Agreement which also contains detailed provisions
concerning transfers of Notes. 

     This
Global Note is registered in the name of a nominee of DTC. This Global Note is
exchangeable for Notes registered in the name of a person other than DTC or its
nominee only in the limited circumstances hereinafter described. Unless and
until it is exchanged in whole or in part for Certificated Notes, this Global
Note may not be transferred except as a whole by DTC to a nominee of DTC or by a
nominee of DTC to DTC or another nominee of DTC or by DTC or any such nominee to
a successor of DTC or a nominee of such successor. 

     Québec
will issue or cause to be issued Certificated Notes upon registration of
transfer of, or in exchange for, Notes represented by the Global Notes (i) if
DTC notifies Québec that it is unwilling or unable
to continue as depository in connection with the Global Notes or ceases to be a
clearing agency registered under the United States Securities Exchange Act of
1934, as amended, at a time when it is required to be so registered and a
successor depository is not appointed by Québec within 90 days after receiving
such notice or becoming aware that DTC is no longer so registered; (ii) if
Québec, in its sole discretion at any time, determines not to have any of the
Notes represented by the Global Notes; or (iii) upon request by DTC to the
Fiscal Agent, acting on direct or indirect instructions of any owner of a
beneficial interest in a Global Note, after an event of default entitling the
holder to accelerate the stated maturity of the Global Note has occurred and is
continuing, or, if DTC does not promptly make that request, then any owner of a
beneficial interest in such Global Note shall be entitled to make such request
with respect to such interest. 

-2- 

     Québec
expressly acknowledges that if Certificated Notes are not promptly issued to the
owners of beneficial interests in a Global Note as described above, then an
owner of a beneficial interest will be entitled to pursue any remedy under the
Fiscal Agency Agreement, the Global Note or applicable law with respect to the
portion of the Global Note representing that owner’s interest in the Global Note
as if Certificated Notes had been issued. 

Interest 

     Whenever
it is necessary to compute any amount of interest in respect of the Notes, other
than with respect to regular semi-annual payments, such interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The rate of interest specified in the Notes is a nominal rate and all interest
payments and computations are to be made without allowances or deductions for
deemed reinvestment. 

     For
purposes of disclosure pursuant to the Interest Act (Canada), the rate of
interest determined on the basis of a year of 360 days, when expressed as an
annual rate, is equivalent to the applicable rate based on such period
multiplied by a fraction the numerator of which is the actual number of days in
the calendar year in which the period for which such interest is payable ends
and the denominator of which is 360. 

Payments 

     Principal
of, and interest on the Notes and Additional Amounts, if any, are payable by
Québec in lawful money of the United States of America (“U.S.$”) to the person
registered at the close of business on the relevant record date in the register
held by the Fiscal Agent. With respect to Notes held by Cede & Co. for DTC
participants, Euroclear and Clearstream, Luxembourg, payment will be made to
beneficial owners of the Notes in accordance with customary procedures
established from time to time by DTC, Euroclear and Clearstream, Luxembourg.

     If any
date for payment to the registered holder hereof is not a Business Day in the
applicable place of payment, such registered holder shall not be entitled to
payment until the next following Business Day,
and no further interest shall be paid in respect of the delay in such payment.
In this paragraph, “Business Day” means a day on which banking institutions in
The City of New York and in any other applicable place of payment are not
authorized or obligated by law or executive order to be closed. 

-3- 

     If
Certificated Notes are issued and for so long as the Notes are listed on the
Luxembourg Stock Exchange and the rules of such stock exchange so require,
Québec will appoint and maintain a paying and transfer agent in Luxembourg.
Québec will also maintain a paying agent in a Member State of the European Union
that is not obliged to withhold or deduct tax pursuant to European Council
Directive 2003/48/EC or any other law implementing or complying with, or
introduced in order to conform to, such Directive. 

Payment of Additional Amounts 

     All payments of principal and interest by Québec will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or charges of whatever nature imposed or levied by or on behalf of the Government of Canada or any province, territory or political division thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or charges is required by law or by the interpretation or administration thereof.  In that event, Québec will, subject to its redemption rights pursuant to the Fiscal Agency Agreement and the Notes, pay such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts receivable by the
beneficial holder after such withholding or deduction shall equal the respective amounts of principal or interest which would have been receivable in respect of the Notes in the absence of such withholding or deduction; except that no such Additional Amount shall be payable with respect to any Note: (i) to, or to a third party on behalf of, a beneficial holder who is liable to such taxes, duties, assessments or charges in respect of such Note by reason of that person having some connection with Canada other than the mere holding or use outside Canada, or ownership as a non-resident of Canada, of such Note; or (ii) presented for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the beneficial holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on or before such thirtieth day; or (iii) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other law implementing or complying with, or introduced in order to conform to, such Directive; or (iv) presented for payment by or on behalf of a beneficial holder who would have been able to avoid such withholding or deduction by presenting the relevant Note to another paying agent in a Member State of the European Union. As used herein, “Relevant Date” means: (A) the date on which such payment first becomes due; or (B) if the full amount of the moneys payable has not been received by the Fiscal Agent on or prior to such date, the date on which, the full amount of such moneys having been so received, notice to that effect is duly given to the holders of the Notes in accordance with the notice procedures described under “Notices” below.

 

Redemption and Purchases 

     If as a result of any change in, or
amendment to, or in the official application of, the laws of Canada or the regulations
of any taxing authority therein or thereof (other than Québec) or any change in,
or in the official application of, or execution of, or amendment to, any treaty
or treaties affecting taxation to which Canada is a party, which change or
amendment shall have become effective after • , it is determined by Québec that
it would be required at, or at any time prior to, maturity of the Notes to pay
Additional Amounts as hereinabove described, the Notes may be redeemed in whole
but not in part at the option of Québec on not less than 30 days’ nor more than
60 days’ published notice in accordance with the provisions set forth below
under “Notices”, at the Principal Amount thereof together with accrued interest. 

-4- 

     Québec
may, if not in default under the Notes, purchase Notes at any time in any manner
and at any price. If purchases are made by tender, tenders must be available to
all Noteholders alike. 

Status of the Notes 

     The Notes
will be direct, unsecured and unconditional obligations of Québec for the
payment and performance of which the full faith and credit of Québec will be
pledged and will not be secured. The Notes will rank equally among themselves
and with all notes, debentures or other similar debt securities issued by Québec
and outstanding at the date of the issue of the Notes or issued in the future.

Events of Default 

     In the
event that (a) Québec shall default in the payment of the principal of, interest
or Additional Amounts, if any, on the Notes, as the same shall become due and
payable, and such default shall continue for a period of 45 days or (b) default
shall be made in the due performance or observance by Québec of any covenant or
agreement contained in the Notes, other than the payment of principal, interest
or Additional Amounts, or the Fiscal Agency Agreement and such default shall
continue for a period of 60 days or (c) Québec shall default in the payment of
any principal of, or premium or interest, or additional amounts, if any, on any
indebtedness (direct or under a guarantee) for borrowed money, other than the
Notes, as the same shall become due and payable, and such default shall continue
for a period of 45 days, provided that the foregoing shall not be taken into
account so long as the aggregate principal amount of all such indebtedness
(direct or under a guarantee) for borrowed money with respect to which the
foregoing has occurred does not exceed U.S.$50,000,000 (or its equivalent in
other currencies), then at any time thereafter and during continuance of such
default, the registered holder of any Note (or its proxy) may deliver or cause
to be delivered to Québec a written notice that such registered holder elects to
declare the principal amount of the Notes held by him (the serial number or
numbers of the note or notes representing such Notes and the principal amount of
the Notes owned by him and the subject of such declaration being set forth in
such notice) to be due and payable and, in the cases falling within either (a)
or (c) above, on the 15th day after delivery of such notice, or, in the cases
falling within (b) above, on the 30th day after delivery of such notice, the
principal of the Notes referred to in such notice plus accrued interest thereon
shall become due and payable, unless prior to that time all
such defaults theretofore existing shall have been cured. 

-5- 

Notices 

     All
notices to the holders will be valid (i) in the case of Certificated Notes, if
sent by first class mail (or equivalent) or (if posted to an overseas address)
by airmail, or if delivered, to each holder (or the first named of joint
holders) at each such holder’s address as it appears in the Register held by the
Fiscal Agent; (ii) in the case of Notes represented by a Global Note, if
delivered to DTC for communication by it to the persons shown in its records as
having interests therein and (iii) in either case, if and so long as the Notes
are admitted to trading on, and listed on any stock exchange or are admitted to
trading by another relevant authority, if in accordance with the rules and
regulations of the relevant stock exchange or other relevant authority. Any such
notice shall be deemed to have been given on the date of such delivery or, in
the case of mailing, on the fourth weekday following such mailing. 

Prescription 

Under current Québec law, an action to enforce a right to
payment under the Notes may be prescribed if it is not exercised within three
years of the date the payment is due. 

Modification 

     The
Fiscal Agency Agreement contains provisions with respect to modifying or
amending said Agreement and the Notes either without notice to or the consent of
the holder of any Note or by Extraordinary Resolution (as defined in the Fiscal
Agency Agreement) of the holders of Notes and with respect to convening meetings
of registered holders of Notes for such purposes. 

Governing Law 

     The
Fiscal Agency Agreement and the Notes shall be construed in accordance with and
governed by the laws of Québec and the laws of Canada applicable therein. 

     Québec
irrevocably consents to the fullest extent permitted by law to the giving of any
relief (including, without limitation, the making, enforcement or execution
against any property of any order or judgment) made or given in connection with
any proceedings arising out of or in connection with the Fiscal Agency Agreement
and the Notes. 

-6- 

Executed in New York on behalf of Québec as of • .

QUÉBEC 

By:   
______________________________
         
Name: 
          Title:

Authenticated
by: 
[   ] 
(as Fiscal Agent) 
Authentication
Date: •  

By: ______________________________
Name:

Title:

-7- 

SCHEDULE TO THE GLOBAL NOTE 

NO. [   ] 

QUÉBEC 

• % GLOBAL NOTES SERIES •  DUE •  

	Initial Principal 	Additional 	Aggregate 	  
	Amount 	Principal Amount 	Principal Amount 	Authorization 
	  	  	  	  
	  	US$ 	US$ 	  
	  	US$ 	US$ 	  
	  	US$ 	US$ 	  

SCHEDULE B 

TERMS AND CONDITIONS OF THE NOTES 

Status of the Notes 

     The Notes
will be direct and unconditional obligations of Québec for the payment and
performance of which the full faith and credit of Québec will be pledged and
will not be secured. The Notes will rank equally among themselves and with all
notes, debentures or other similar securities issued by Québec and outstanding
at the date hereof or in the future. 

Form, Denomination and Registration 

     The Notes
will be issued in the form of one or more fully registered global notes (the
“Global Notes”) registered in the name of Cede & Co., as nominee of The
Depository Trust Company (“DTC”), and held by • , as custodian for DTC.
Beneficial interests in the Notes will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants of DTC, Euroclear SA/NV (“Euroclear”) or
Clearstream Banking, société anonyme (“Clearstream, Luxembourg” and,
collectively, the “Clearing Systems”). The Clearing Systems will be responsible
for establishing and maintaining book-entry accounts for their participants
having interests in the Notes. Beneficial owners of Notes will not, except in
limited circumstances described herein, be entitled to receive Notes represented
by physical certificates or to have Notes registered in their names, and will
not be considered holders thereof under the Fiscal Agency Agreement. See
“Certificated Notes”. Subject to applicable law and the terms of the Fiscal
Agency Agreement, Québec and the Fiscal Agent shall deem and treat registered
holders of the Notes as the absolute owners thereof for all purposes whatsoever
notwithstanding any notice to the contrary; and all payments to, or on the order
of, the registered holders shall be valid and shall discharge the liability of
Québec and the Fiscal Agent on the Notes to the extent of the sum or sums so
paid. 

     The Notes
will only be sold in denominations of U.S.$5,000 and in multiples of U.S.$1,000
in excess thereof. 

     The
Fiscal Agent will be responsible for (i) maintaining a record of the aggregate
holdings of Notes, (ii) ensuring that payments of principal and interest in
respect of the Notes received by the Fiscal Agent from Québec are duly credited
to DTC; and (iii) transmitting to Québec any notices from beneficial owners of
Notes. The Fiscal Agent will not impose any fees in respect of the Notes, other
than reasonable fees for the replacement of lost, stolen, mutilated or destroyed
Notes. However, beneficial owners of Notes may incur fees payable in respect of
the maintenance and operation of the book-entry accounts in which such Notes are
held with the Clearing Systems. 

Interest 

The Notes will bear interest from •  at
a rate of • % per annum, payable in two equal semi-annual installments, in
arrears on •  and • , commencing on • . Interest on the Notes will cease to accrue
on the maturity date (or the date fixed for redemption or repayment) unless,
upon due presentation of the Notes, payment of principal is improperly withheld
or refused. 

     Whenever
it is necessary to compute any amount of interest in respect of the Notes, other
than with respect to regular semi-annual payments, such interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The rate of interest specified in the Notes is a nominal rate and all interest
payments and computations are to be made without allowances or deductions for
deemed reinvestment. 

Payments 

     Principal
of, and interest and Additional Amounts (as defined below under “Payment of
Additional Amounts”), if any, on, the Notes are payable by Québec in U.S.
dollars to the person registered at the close of business on the relevant record
date in the register held by the Fiscal Agent. With respect to Notes held by
Cede & Co. for DTC participants, Euroclear and Clearstream, Luxembourg,
payment will be made to beneficial owners in accordance with customary
procedures established from time to time by DTC, Euroclear and Clearstream,
Luxembourg. The Fiscal Agent will act as Québec’s principal paying agent for the
Notes pursuant to the Fiscal Agency Agreement. 

     If any
date for payment in respect of any Note is not a Business Day in the applicable
place of payment, the holder thereof shall not be entitled to payment until the
next following Business Day, and no further interest shall be paid in respect of
the delay in such payment. In this paragraph, “Business Day” means a day on
which banking institutions in The City of New York and in any other applicable
place of payment are not authorized or obligated by law or executive order to be
closed. 

Record Date 

     The
record date for purposes of payments of principal and interest and Additional
Amounts, if any, on the Notes will be as of 5:00 p.m., New York City time, on
the fourteenth calendar day preceding the maturity date or any interest payment
date, as applicable. Ownership positions within each Clearing System will be
determined in accordance with the normal conventions observed by such system.

Payment of Additional Amounts 

     All payments of principal and interest by Québec will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or charges of whatever nature, imposed or levied by or on behalf of the Government of Canada or any province, territory or political division thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments or charges is required by law or by the interpretation or administration thereof.  In that event, Québec will, subject to its redemption rights pursuant to the Fiscal Agency Agreement and the Notes, pay such additional amounts (the “Additional Amounts”) as may be necessary in order that the net amounts receivable by the
beneficial holder after such withholding or deduction shall equal the respective amounts of principal or interest which would have been receivable in respect of the Notes in the absence of such withholding or deduction; except that no such Additional Amount shall be payable with respect to any Note: (i) to, or to a third party on behalf of, a beneficial holder who is liable to such taxes, duties, assessments or charges in respect of such Note by reason of that person having some connection with Canada other than the mere holding or use outside Canada, or ownership as a non-resident of Canada, of such Note; or (ii) presented for payment more than 30 days after the Relevant Date (as defined below) except to the extent that the beneficial holder thereof would have been entitled to such Additional Amounts on presenting the same for payment on or before such thirtieth day; or (iii) where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other law implementing or complying with, or introduced in order to conform to, such Directive; or (iv) presented for payment by or on behalf of a beneficial holder who would have been able to avoid such withholding or deduction by presenting the relevant Note to another paying agent in a Member State of the European Union. As used herein, “Relevant Date” means: (A) the date on which such payment first becomes due; or (B) if the full amount of the moneys payable has not been received by the Fiscal Agent on or prior to such date, the date on which, the full amount of such moneys having been so received, notice to that effect is duly given to the holders of the Notes in accordance with the notice procedures described under “Notices” below.

-2- 

Maturity, Redemption and Purchases 

     Unless
previously redeemed for tax reasons as provided below, or purchased, the
principal amount of the Notes shall be due and payable on • . 

     If as a
result of any change in, or amendment to, or in the official application of, the
laws of Canada or the regulations of any taxing authority therein or thereof
(other than Québec) or any change in, or in the official application of, or
execution of, or amendment to, any treaty or treaties affecting taxation to
which Canada is a party, which change or amendment shall have become effective
after • , it is determined by Québec that it would be required at, or at any time
prior to, maturity of the Notes to pay Additional Amounts as described under
“Payment of Additional Amounts”, the Notes may be redeemed in whole but not in
part at the option of Québec on not less than 30 days’ nor more than 60 days’
published notice in accordance with “Notices” below, at the principal amount
thereof together with accrued interest. 

     Québec
may, if not in default under the Notes, purchase Notes at any time, in any
manner and at any price. If purchases are made by tender, tenders must be
available to all holders of Notes alike. 

-3- 

Transfers 

     Transfers
between participants within Euroclear and Clearstream, Luxembourg, and between
Euroclear and Clearstream, Luxembourg participants, will be effected in
accordance with procedures established for this purpose from time to time by
Euroclear and Clearstream, Luxembourg. Notes may be transferred between DTC
participants in accordance with procedures established for this purpose from
time to time by DTC. 

Certificated Notes 

     Québec
will issue or cause to be issued Notes represented by fully registered physical
certificates (“Certificated Notes”) upon registration of transfer of, or in
exchange for, Notes represented by the Global Notes (i) if DTC notifies Québec
that it is unwilling or unable to continue as depository in connection with the
Global Notes or ceases to be a clearing agency registered under the United
States Securities Exchange Act of 1934, as amended, at a time when it is
required to be so registered and a successor depository is not appointed by
Québec within 90 days after receiving such notice or becoming aware that DTC is
no longer so registered; (ii) if Québec, in its sole discretion at any time,
determines not to have any of the Notes represented by the Global Notes; or
(iii) upon request by DTC to the Fiscal Agent, acting on direct or indirect
instructions of the registered holder of a Global Note or any owner of
beneficial interests in the Global Note, but only after an event of default
entitling the registered holders to give the Issuer written notice that such
holders elect to declare the principal amount of the Notes held by them and
represented by the Global Note to be due and payable, or, if DTC does not
promptly make that request, then any beneficial owner of an interest in such
Global Note shall be entitled to make such request with respect to such
interest. The Issuer shall bear the costs and expenses of printing or preparing
any Certificated Notes. 

     Upon any
such issuance pursuant to the preceding paragraph of Certificated Notes in
exchange for all the Notes represented by the Global Notes, (i) Québec shall
promptly make available to the Fiscal Agent a reasonable supply of Certificated
Notes in blank form to proceed with such issuance, (ii) DTC shall cause the
Global Notes to be delivered to the Fiscal Agent and provide the Fiscal Agent
with the necessary registration information for such Certificated Notes, (iii)
the Fiscal Agent shall authenticate and deliver such Certificated Notes in an
aggregate principal amount equal to the principal amount of the Global Notes to
be exchanged for such Certificated Notes, (iv) the Fiscal Agent shall cancel the
Global Notes and, in the case of a partial exchange, issue and deliver to or to
the order of DTC new Global Notes equal to the unexchanged portion of any such
Global Notes partially exchanged for Certificated Notes and (v) the Fiscal Agent
shall reduce accordingly the holdings of Cede & Co. on the register held by
the Fiscal Agent. The Fiscal Agent shall have at least 30 days from the date of
its receipt of Certificated Notes and registration information to authenticate
and deliver such Certificated Notes. Such Certificated Notes shall be registered
in such names and in such denominations as DTC, pursuant to instructions from
direct or indirect participants, shall direct and shall be delivered as directed
by the persons in whose names such Certificated Notes are to be registered. All Notes
represented by Certificated Notes issued upon any such issuance in exchange for
the Notes represented by the Global Notes shall be a valid obligation of the
Issuer, shall be entitled to the same benefits under this Agreement as the
Global Notes and shall be so exchanged without charge to the Fiscal Agent, DTC
or the transferee. On or after any such exchange, the Fiscal Agent shall direct
all payments in respect of such Certificated Notes to the registered holders
thereof, including when such exchange occurred after the record dates for any
payment and prior to the date of such payment. 

-4- 

     Québec
expressly acknowledges that if Certificated Notes are not promptly issued to the
owners of beneficial interests in a Global Note as described above, then an
owner of a beneficial interest will be entitled to pursue any remedy under the
Fiscal Agency Agreement, the Global Note or applicable law with respect to the
portion of the Global Note representing that owner’s interest in the Global Note
as if Certificated Notes had been issued. 

If Certificated Notes are issued and for so long as the Notes
are listed on the Euro MTF Market of the Luxembourg Stock Exchange and if the
rules of such stock exchange so require, Québec will appoint and maintain a
paying agent and transfer agent in Luxembourg (the “Luxembourg Paying Agent”) to
act on its behalf. Québec will also ensure that, to the extent possible, it
maintains a paying agent in a Member State of the European Union that is not
obliged to withhold or deduct tax pursuant to European Council Directive
2003/48/EC or any other law implementing or complying with, or introduced in
order to conform to, such Directive. 

Modification 

     The
Fiscal Agency Agreement and the Notes may be amended by Québec and the Fiscal
Agent without notice to, or the consent of, the holder of any Note, for the
purpose of (i) curing any ambiguity, (ii) curing, correcting or supplementing
any defective provisions contained therein, (iii) effecting the issue of further
notes as described below under “Further Issue”, or (iv) in any other manner
which Québec and the Fiscal Agent, acting on the advice of counsel, may deem
necessary or desirable and which will not be inconsistent with the Fiscal Agency
Agreement or the Notes and which, in the reasonable opinion of Québec, will not
adversely affect the interests of the holders of Notes. 

     The
Fiscal Agency Agreement will contain provisions for convening meetings of
registered holders of Notes to modify or amend by Extraordinary Resolution (as
defined below), the Fiscal Agency Agreement (except as provided in the
immediately preceding paragraph) and the Notes (including the terms and
conditions thereof) or waive future compliance therewith or past default thereon
by Québec. An Extraordinary Resolution duly passed at any such meeting shall be
binding on all holders of Notes, whether present or not; provided, however, that
no such modification or amendment to the Fiscal Agency Agreement or to the terms
and conditions of the Notes may, without the consent of the holder of each such
Note affected thereby: (i) change the stated maturity or interest payment date(s) of any such Note; (ii)
reduce the principal amount of or rate of interest on any such Note; (iii)
change the currency of payment of any such Note; (iv) impair the right to
institute suit for the enforcement of any payment on or with respect to such
Note; (v) reduce the percentage of the holders of Notes necessary to modify or
amend the Fiscal Agency Agreement or the terms and conditions of the Notes or
reduce the percentage of votes required for the taking of action or the quorum
required at any meeting of holders of Notes; or (vi) reduce the percentage of
outstanding Notes necessary to waive any future compliance or past default; and
provided, further, that to the extent that such modification or amendment may
affect the rights, duties, protections, indemnities and immunities of the Fiscal
Agent, the Issuer shall not propose such modification or amendment and such
power shall not be exercised, without the prior written consent of the Fiscal
Agent. 

-5- 

     The term
“Extraordinary Resolution” is defined in the Fiscal Agency Agreement as a
resolution passed at a meeting of holders of Notes by the affirmative vote of
the holders of not less than 66 2/3% of the principal amount of Notes
represented at the meeting in person or by proxy or as an instrument in writing
signed by the holders of not less than 66 2/3% in principal amount of the
outstanding Notes. The quorum at any such meeting for passing an Extraordinary
Resolution will be two or more persons holding or representing at least a
majority in principal amount of the Notes at the time outstanding, or at any
adjourned meeting called by Québec or the Fiscal Agent, two or more persons
being or representing holders of Notes whatever the principal amount of the
Notes so held or represented. 

Governing Law 

     The
Fiscal Agency Agreement and the Notes shall be construed in accordance with, and
governed by, the laws of Québec and the laws of Canada applicable therein. 

     Québec
will irrevocably consent to the fullest extent permitted by law to the giving of
any relief (including, without limitation, the making, enforcement or execution
against any property of any order or judgment) made or given in connection with
any proceedings arising out of, or in connection with, the Fiscal Agency
Agreement and the Notes. 

Events of Default 

     In the
event that (a) Québec shall default in the payment of the principal of, interest
or Additional Amounts, if any, on the Notes, as the same shall become due and
payable, and such default shall continue for a period of 45 days or (b) default
shall be made in the due performance or observance by Québec of any covenant or
agreement contained in the Notes, other than the payment of principal, interest
or Additional Amounts, or the Fiscal Agency Agreement and such default shall
continue for a period of 60 days or (c) Québec shall default in the payment of
any principal of, or premium or interest, or additional amounts, if any, on, any
indebtedness (direct or under a guarantee) for borrowed money, other than the
Notes, as the same shall become due and payable, and such default shall continue
for a period of 45 days, provided that the foregoing shall not be taken into
account so long as the aggregate principal amount of all such indebtedness
(direct or under a guarantee) for borrowed money with respect to which the
foregoing has occurred does not exceed U.S.$50,000,000 (or its equivalent in
other currencies), then at any time thereafter and during continuance of such
default the registered holder of any Note (or its proxy) may deliver or cause to
be delivered to Québec at Ministère des Finances, c/o Direction générale des
opérations bancaires et financières et des relations avec les agences de
notation, 8, rue Cook, 2e étage, Québec, Québec, G1R 0A4, Canada, a written
notice that such registered holder elects to declare the principal amount of the
Notes held by him (the serial number or numbers of the note or notes
representing such Notes and the principal amount of the Notes owned by him and
the subject of such declaration being set forth in such notice) to be due and
payable and, in the cases falling within either (a) or (c) above, on the 15th
day after delivery of such notice, or, in the cases falling within (b) above, on
the 30th day after delivery of such notice, the principal of the Notes referred
to in such notice plus accrued interest thereon shall become due and payable,
unless prior to that time all such defaults theretofore existing shall have been
cured. 

-6- 

Notices 

     All
notices to the holders will be valid (i) in the case of Certificated Notes, if
sent by first class mail (or equivalent) or, if posted to an overseas address,
by airmail, or if delivered, to each holder (or the first named of joint
holders) at each such holder’s address as it appears in the Register held by the
Fiscal Agent; (ii) in the case of Notes represented by a Global Note, if
delivered to DTC for communication by it to the persons shown in its records as
having interests therein and (iii) in either case, if and so long as the Notes
are admitted to trading on, and listed on any stock exchange or are admitted to
trading by another relevant authority, if in accordance with the rules and
regulations of the relevant stock exchange or other relevant authority. As long
as the Notes are listed on the Luxembourg Stock Exchange, and the rules of the
Luxembourg Stock Exchange so require, notices will be published in a leading
newspaper having general circulation in Luxembourg (which is expected to be the
Luxemburger Wort) or on the Luxembourg Stock Exchange website at
www.bourse.lu. Any such notice shall be deemed to have been given on the date of
such delivery (or, if delivered more than once or on different dates, on the
first date on which delivery is made) or, in the case of mailing, on the fourth
weekday following such mailing and, in the case of publication, on the date of
such publication or, if published more than once or on different dates, on the
first date on which publication is made. 

Further Issue 

     Québec
may from time to time without the consent of the holders of the Notes create and
issue further notes having the same terms and conditions as the Notes (or in all
respects except for the payment of interest accruing prior to the issue date of
such further notes or except for the first payment
of interest thereon), and such further notes shall be consolidated and form a
single series with the Notes. Any further notes forming a single series with the
outstanding Notes shall be issued with the benefit of, and subject to, an
agreement supplemental to the Fiscal Agency Agreement. 

-7- 

Prescription 

     Under
current Québec law, an action to enforce a right to payment under the Notes may
be prescribed if it is not exercised within three years of the date the payment
is due. 

-8-EXHIBIT 10.1

 

KCAP SENIOR
FUNDING I, LLC

NOTES

 

U.S.$30,900,000
Class A-2 Senior Secured Floating Rate Notes due 2024

U.S.$3,600,000
CLASS B-2 SENIOR SECURED FLOATING RATE NOTES DUE 2024

U.S.$4,000,000
Class C-2 Secured Deferrable Floating Rate Notes due 2024

U.S.$3,6000,000
Class D-2 Secured Deferrable Floating Rate Notes due 2024

 

UPSIZE PURCHASE
AGREEMENT

 

as of December 4, 2014

 

Guggenheim Securities, LLC,

as the Initial Purchaser (the “Initial Purchaser”)

330 Madison Avenue

New York, NY 10017

Attention: Paul M. Friedman

 

Ladies and Gentlemen:

 

Section 1.               
Authorization of Notes.

 

Pursuant to an Indenture,
dated June 18, 2013 (the “Indenture”), between KCAP Senior Funding I, LLC, a Delaware limited liability company,
as the issuer (the “Issuer”), and U.S. Bank National Association, as the trustee (the “Trustee”),
on June 18, 2013, the Issuer issued and sold $77,250,000 Class A-1 Notes, $9,000,000 Class B-1 Notes, $10,000,000 Class C-1 Notes
and $9,000,000 Class D-1 Notes (collectively, the “Initial Offered Notes”), and $34,750,000 Subordinated Notes
(the “Initial Subordinated Notes” and, together with the Initial Offered Notes, the “Initial Notes”).
Pursuant to a purchase agreement, dated as of June 16, 2013 (the “Initial Purchase Agreement”), among the Issuer,
KCAP Senior Funding I Holdings, LLC (the “Depositor”), KCAP Financial, Inc. (the “Company”),
and Guggenheim Securities, LLC (“Guggenheim”), Guggenheim initially purchased the Initial Offered Notes.

 

In accordance with
Section 2.13 of the Indenture, the Company, as designated manager of the Issuer has duly authorized the issuance and sale of Additional
Issuance Notes, consisting of $30,900,000 Class A-2 Notes, $3,600,000 Class B-2 Notes, $4,000,000 Class C-2 Notes and $3,600,000
Class D-2 Notes (collectively, the “Additional Issuance Offered Notes” and, together with the Initial Offered
Notes, the “Offered Notes”), and $13,900,000 Subordinated Notes (the “Additional Issuance Subordinated
Notes” and, together with the Additional Issuance Offered Notes, the “Additional Issuance Notes” and,
together with the Initial Notes, the “Notes”). On the date of the issuance and sale of the Additional Issuance
Notes (the “Upsize Date”), the Aggregate Outstanding Amount of the Notes will be as follows: $108,150,000 Class
A Notes, $12,600,000 Class B Notes, $14,000,000 Class C Notes, $12,600,000 Class D Notes and $48,650,000 Subordinated Notes. The
Offered Notes will be secured by the assets of the Issuer. The Depositor is the sole equity member of the Issuer and the Company
is the sole equity member of the Depositor. The primary assets of the Issuer are a pool of bank loans, or participation interests
therein (collectively, the “Collateral Obligations”). On the Closing Date, the Company sold to the Depositor
all of its right, title and interest in and to the initial Collateral Obligations owned by the Issuer and the Depositor sold to
the Issuer all of its right, title and interest of the Issuer in and to such initial Collateral Obligations pursuant to a Master
Loan Sale Agreement, dated as of June 18, 2013 (the “Master Loan Sale Agreement”), among the Company, the Depositor
and the Issuer. Pursuant to the Indenture, as security for the indebtedness represented by the Offered Notes, the Issuer pledged
and granted to the Trustee a security interest in the Collateral Obligations, and its rights under the Master Loan Sale Agreement.
The Collateral Obligations are managed by KCAP Financial, Inc., in its capacity as collateral manager (the “Collateral
Manager”) pursuant to a Collateral Management Agreement, dated as of June 18, 2013 (the “Collateral Management
Agreement”), between the Issuer and the Collateral Manager. The Issuer has retained U.S. Bank National Association (in
such capacity, the “Collateral Administrator”), to perform certain administrative duties with respect to the
Collateral Obligations pursuant to a Collateral Administration Agreement, dated as of June 18, 2013 (the “Collateral Administration
Agreement”), among the Issuer, the Collateral Manager and the Collateral Administrator. This Upsize Purchase Agreement
(the “Agreement”), the Initial Purchase Agreement, the Master Loan Sale Agreement, the Indenture, the Collateral
Management Agreement and the Collateral Administration Agreement are referred to collectively herein as the “Transaction
Documents.”

 

    	 

    	 

    

 

 

Capitalized terms used
herein but not otherwise defined shall have the meanings set forth in the Indenture, as amended by the first supplemental indenture
thereto (the “Supplemental Indenture”) between the Issuer and the Trustee, to be dated December 8 2014.

 

The Additional Issuance
Offered Notes are to be offered without being registered under the Securities Act of 1933, as amended (the “Securities
Act”), (i) to “qualified institutional buyers” in compliance with the exemption from registration provided
by Rule 144A under the Securities Act (“QIBs”), (ii) in offshore transactions in reliance on Regulation S under
the Securities Act (“Regulation S”), and (iii) to institutional “accredited investors” (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) (“Institutional Accredited Investors”) who, in
each case, are “qualified purchasers” (“Qualified Purchasers”) for purposes of Section 3(c)(7) under
the Investment Company Act of 1940, as amended (the “1940 Act”).

 

In connection with
the sale of the Additional Issuance Offered Notes, the Company has prepared (i) a Preliminary Supplemental Offering Circular (the
“Preliminary Offering Circular”) dated November 13, 2014 (including (A) any exhibits thereto, (B) the Final
Offering Circular dated June 16, 2013 (the “2013 Offering Circular”) attached as Annex A thereto and (C) all
information incorporated therein by reference), (ii) a Final Offering Circular (the “Final Offering Circular”
and, together with the Preliminary Offering Circular, the “Offering Circulars”) dated December 4, 2014 (including
(A) any exhibits thereto, (B) the 2013 Offering Circular attached as Annex A thereto and (C) all information incorporated therein
by reference), (iii) the distribution report rendered by the Issuer pursuant to the Indenture for the Payment Date that occurred
on October 20, 2014 (the “Distribution Report), which was delivered in connection with the Preliminary Offering Circular
and (iv) the monthly report rendered by the Issuer pursuant to the Indenture for the month of November 2014 (the “Monthly
Report”), which was delivered in connection with the Final Offering Circular. The Offering Circulars and all amendments
or supplements thereto, or revisions thereof, together with the Monthly Report and the Distribution Report are herein referred
to as the “Offering Documents”. The Offering Documents collectively describe, among other things, the terms
of the Additional Issuance Offered Notes, the terms of the offering, and the Issuer. It is understood and agreed that 3:47 p.m.
New York City time on November 21, 2014 constitutes the time of the contract of sale for each purchaser of the Additional Issuance
Offered Notes offered to the investors for purposes of Rule 159 under the Securities Act (the “Time of Sale”)
and that the Preliminary Offering Circular and the Distribution Report constitute the entirety of the information conveyed to investors
as of the Time of Sale (the “Time of Sale Information”).

 

    	2

    	 

    

 

 

It is understood and
agreed that nothing in this Agreement shall prevent the Initial Purchaser from entering into any agency agreements, underwriting
agreements or other similar agreements governing the offer and sale of securities with any issuer or issuers of securities, and
nothing contained herein shall be construed in any way as precluding or restricting the Initial Purchaser’s right to sell
or offer for sale any securities issued by any person, including securities similar to, or competing with, the Additional Issuance
Notes.

 

During each Interest
Accrual Period, the Class A-2 Notes shall bear interest at a per annum rate equal to the then applicable LIBOR plus 1.50%
per annum, the Class B-2 Notes shall bear interest at a per annum rate equal to the then applicable LIBOR plus 3.25%
per annum, the Class C-2 Notes shall bear interest at a per annum rate equal to the then applicable LIBOR plus 4.25%
per annum, and the Class D-2 Notes shall bear interest at a per annum rate equal to the then applicable LIBOR plus
5.25% per annum; provided that LIBOR for the first Interest Accrual Period following the Upsize Date will be determined
by interpolating between the rate appearing on the Reuters Screen for deposits with a term of one month and the rate appearing
on the Reuters Screen for deposits with a term of three months.

 

Each of the Company,
the Depositor and the Issuer, as applicable, hereby agrees with the Initial Purchaser as follows:

 

Section 2.               
Purchase and Sale of Additional Issuance Offered Notes.

 

Subject to the terms
and conditions and in reliance upon the representations and warranties set forth herein, the Issuer agrees to sell to the Initial
Purchaser the Additional Issuance Offered Notes, and the Initial Purchaser has agreed to use its commercially reasonable efforts
to place the aggregate principal amount of the Additional Issuance Offered Notes set forth on Schedule I hereto with investors
in accordance with the terms hereof. If purchased, the Additional Issuance Offered Notes will be purchased at a price of 100% of
par. It is understood and agreed that the structuring and placement fee payable by the Company on behalf of the Issuer to the Initial
Purchaser on the Upsize Date with respect to the Additional Issuance Offered Notes is $1,480,411. Such fees payable by the Company
on behalf of the Issuer may be netted by the Initial Purchaser against its purchase price payment for the Additional Issuance Offered
Notes. It is understood and agreed that the Initial Purchaser is not acquiring, and has no obligation to acquire, the Additional
Issuance Subordinated Notes (which Additional Issuance Subordinated Notes will be acquired by the Depositor on the Upsize Date
pursuant to a purchase agreement between the Issuer and the Depositor (the “Additional Issuance Subordinated Notes Purchase
Agreement”)). It is further understood and agreed that the Initial Purchaser may retain all or any portion of the Additional
Issuance Offered Notes, purchase the Additional Issuance Offered Notes for its own account, or sell the Additional Issuance Offered
Notes to its affiliates or to any other investor in accordance with the applicable provisions hereof and of the Indenture.

 

    	3

    	 

    

 

 

(a)               
In addition, whether or not the transaction contemplated hereby shall be consummated, the Company agrees to pay (or cause
to be paid by the Issuer) all costs and expenses incident to the performance by the Company of its obligations hereunder and under
the documents to be executed and delivered in connection with the offering, issuance, sale and delivery of the Additional Issuance
Offered Notes (the “Documents”), including, without limitation or duplication: (i) the fees and disbursements
of counsel to the Company; (ii) the fees and expenses of the Trustee and the Collateral Administrator incurred in connection with
the issuance of the Additional Issuance Offered Notes and their or its counsel, as applicable; (iii) [reserved]; (iv) [reserved];
(v) all expenses incurred in connection with the preparation and distribution of each Offering Circular and other disclosure materials
prepared and distributed and all expenses incurred in connection with the preparation and distribution of the Transaction Documents;
(vi) [reserved]; (vii) the fees for any securities identification service for any CUSIP or similar identification number required
by the purchasers or requested by the Initial Purchaser; (viii) the reasonable fees and disbursements of counsel to the Initial
Purchaser; (ix) all expenses in connection with the qualification of the Additional Issuance Offered Notes for offering and sale
under state securities laws, including the reasonable fees and disbursements of counsel and, if requested by the Initial Purchaser,
the cost of the preparation and reproduction of any “blue sky” or legal investment memoranda; (x) any federal, state
or local taxes, registration or filing fees (including Uniform Commercial Code financing statements) or other similar payments
to any federal, state or local governmental authority in connection with the offering, sale, issuance and delivery of the Additional
Issuance Offered Notes; and (xi) the reasonable fees and expenses of any special counsel or other experts required to be retained
by the Company, the Depositor or the Issuer to provide advice, opinions or assistance in connection with the offering, issuance,
sale and delivery of the Additional Issuance Offered Notes.

 

Section 3.               
Delivery.

 

Delivery of the Additional
Issuance Offered Notes shall be made in the form of one or more global certificates delivered to The Depository Trust Company,
except that any Additional Issuance Offered Note to be sold by the Initial Purchaser to an Institutional Accredited Investor that
is also a Qualified Purchaser for purposes of Section 3(c)(7) of the 1940 Act, but that is not a QIB (as such terms are defined
herein), shall be delivered in fully registered, certificated form in an amount not less than the applicable minimum denomination
set forth in the Final Offering Circular at the offices of Mayer Brown LLP at 10:00 a.m. New York City, New York time, on the Upsize
Date. Subject to the foregoing, the Additional Issuance Offered Notes will be registered in such names and such denominations as
the Initial Purchaser shall specify in writing to the Company and the Trustee. The Additional Issuance Subordinated Notes shall
be delivered to the Depositor on the Upsize Date in fully registered, certificated form in the permitted denominations and the
required proportions set forth in the Final Offering Circular.

 

    	4

    	 

    

 

 

Section 4.               
Representations and Warranties of the Company.

 

The Company represents
and warrants to the Initial Purchaser, as of the date hereof and as of the Upsize Date, (a) with respect to the Company, in its
individual capacity, (b) with respect to the Depositor, in its capacity as the designated manager on behalf of the Depositor and
(c) with respect to the Issuer, in its capacity as the designated manager on behalf of the Issuer, that:

 

(i)                
Each Offering Document (including the “Referenced Information” as defined in the Preliminary Offering Circular
or the Final Offering Circular, as applicable) and any additional information and documents concerning the Additional Issuance
Offered Notes, including but not limited to one or more marketing books or preliminary offering circulars, delivered by or on behalf
of the Company to prospective purchasers of the Additional Issuance Offered Notes (collectively, such additional information and
documents, the “Additional Offering Documents”), did not, each as of their respective dates or date on which
such statement was made and, with respect to the Final Offering Circular (excluding, for the avoidance of doubt, the Monthly Report
delivered in connection therewith), as of the Upsize Date, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements in each, in light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation or warranty as to the information contained in or omitted from any Offering
Document or the Additional Offering Documents in reliance upon and in conformity with information furnished in writing to the Company
by or on behalf of the Initial Purchaser referenced in the last sentence of Section 8(a) herein.

 

(ii)              
The Time of Sale Information, as of the Time of Sale, did not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made,
not misleading; provided that the Company makes no representation or warranty as to the information contained in or omitted
from the Time of Sale Information in reliance upon and in conformity with information furnished in writing to the Company by or
on behalf of the Initial Purchaser referenced in the last sentence of Section 8(a) herein.

 

(iii)            
The Company is a Delaware corporation, duly organized and validly existing under the laws of the State of Delaware, has
all corporate power and authority necessary to own or hold its properties and conduct its business in which it is engaged as described
in the Final Offering Circular and has all licenses necessary to carry on its business as it is now being conducted and is licensed
and qualified in each jurisdiction in which the conduct of its business (including, without limitation, the origination and acquisition
of Collateral Obligations and performing its obligations hereunder and under the other Transaction Documents) requires such licensing
or qualification except where the failure to be so licensed or qualified would not, individually or in the aggregate, have a material
adverse effect on the business, properties, assets, or condition (financial or otherwise) of the Company (a “Material
Adverse Effect”).

 

(iv)            
This Agreement has been duly authorized, executed and delivered by the Company, the Depositor and the Issuer and, assuming
due authorization, execution and delivery thereof by the other parties hereto, constitutes a valid and legally binding obligation
of the Company, the Depositor and the Issuer enforceable against the Company, the Depositor and the Issuer in accordance with its
terms, subject, as to enforcement only, to the effect of bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally or the application of equitable principles in any proceeding, whether
at law or in equity.

 

    	5

    	 

    

 

 

(v)              
Each of the other Transaction Documents has been duly authorized, executed and delivered by the Company, the Depositor and
the Issuer, as applicable, and, assuming due authorization, execution and delivery thereof by the other parties thereto, constitutes
the valid and binding agreement of the Company, the Depositor and the Issuer, as applicable, enforceable against the Company, the
Depositor and the Issuer, as applicable, in accordance with their respective terms, subject, as to enforcement only, to the effect
of bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally
or the application of equitable principles in any proceeding, whether at law or in equity.

 

(vi)            
The Additional Issuance Offered Notes have been duly authorized, and when executed and authenticated in accordance with
the Indenture and delivered to and paid for by the Initial Purchaser in accordance with this Agreement, the Additional Issuance
Offered Notes will constitute valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their
terms, subject, as to enforcement only, to the effect of bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally or the application of equitable principles in any proceeding, whether
at law or in equity, and will be entitled to the benefits of the Indenture.

 

(vii)          
Other than as set forth in or contemplated by the Final Offering Circular, there are no legal or governmental proceedings
pending to which the Company, the Depositor or the Issuer is a party or of which any property or assets of the Company, the Depositor
or the Issuer are the subject of which could reasonably be expected to materially adversely affect the financial position, stockholders’
equity or results of operations of the Company, the Depositor or the Issuer or on the performance by the Company, the Depositor
or the Issuer of its obligations hereunder or under the other Transaction Documents; and to the knowledge of the Company, no such
proceedings have been threatened or contemplated by governmental authorities or threatened by others.

 

(viii)        
The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and
the consummation by the Company, the Depositor and the Issuer of the transactions contemplated herein and therein and in all documents
relating to the Additional Issuance Offered Notes will not result in any breach or violation of, or constitute a default under,
or require any consent under any agreement or instrument to which the Company, the Depositor or the Issuer is a party or to which
any of its properties or assets are subject, except for such of the foregoing as to which relevant waivers, consents or amendments
have been obtained and are in full force and effect, nor will any such action result in a violation of the organizational documents
of the Company, the Depositor or the Issuer or any applicable law, except, in the case of the Company, for such breaches, violations
or defaults that would not, individually or in the aggregate, have a Material Adverse Effect.

 

    	6

    	 

    

 

 

(ix)            
Neither the Issuer, the Depositor nor the pool of Collateral Obligations is, or after giving effect to the transactions
contemplated by the Transaction Documents will be, required to be registered as an “investment company” under the 1940
Act.

 

(x)              
Assuming the Initial Purchaser’s representations herein are true and accurate, it is not necessary in connection with
the offer, sale and delivery of the Additional Issuance Offered Notes in the manner contemplated by this Agreement, the Time of
Sale Information and the Final Offering Circular to register the Additional Issuance Offered Notes under the Securities Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

 

(xi)            
The Additional Issuance Offered Notes satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act. As
of the Upsize Date, the Additional Issuance Offered Notes will not be (i) of the same class as securities listed on a national
securities exchange in the United States that is registered under Section 6 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), or (ii) quoted in any “automated inter-dealer quotation system” (as such term
is used in the Exchange Act) in the United States.

 

(xii)          
[Reserved].

 

(xiii)        
Upon the execution and delivery of the Transaction Documents, payment by the Initial Purchaser for the Additional Issuance
Offered Notes, delivery to the Initial Purchaser of the Additional Issuance Offered Notes and delivery to the Depositor of the
Additional Issuance Subordinated Notes, the Initial Purchaser will acquire title to the Additional Issuance Offered Notes, in each
case free of Liens except such Liens as may be created or granted by the Initial Purchaser and those permitted in the Transaction
Documents.

 

(xiv)        
No consent, authorization or order of, or filing or registration with, any court or governmental agency is required for
the issuance and sale of the Additional Issuance Offered Notes or the execution, delivery and performance by the Company, the Depositor
or the Issuer, as applicable, of this Agreement or the other Transaction Documents to which it is a party, except such consents,
approvals, authorizations, filings, registrations or qualifications as have been obtained or as may be required under the Securities
Act or state securities or blue sky laws or the rules and regulations of the Financial Industry Regulatory Authority in connection
with the sale and delivery of the Additional Issuance Offered Notes in the manner contemplated herein.

 

(xv)          
The Collateral Obligations in all material respects have the characteristics described in the Time of Sale Information and
the Final Offering Circular (including the Monthly Report delivered in connection therewith).

 

    	7

    	 

    

 

 

(xvi)        
Each of the representations and warranties of the Company, the Depositor and the Issuer set forth in each of the other Transaction
Documents is true and correct in all material respects.

 

(xvii)      
[Reserved].

 

(xviii)    
Neither the Issuer nor any affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act (“Regulation
D”)) of the Issuer nor anyone acting on their behalf has, directly or indirectly (except to or through the Initial Purchaser),
sold or offered, or attempted to offer or sell, or solicited any offers to buy, or otherwise approached or negotiated in respect
of, any of the Additional Issuance Offered Notes and neither the Issuer nor any of its affiliates will do any of the foregoing.
As used herein, the terms “offer” and “sale” have the meanings specified in Section 2(3) of the Securities
Act.

 

(xix)        
Neither the Issuer nor any affiliate (as defined in Rule 501(b) of Regulation D) of the Issuer has directly, or through
any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Additional Issuance Offered Notes in a manner that would require
the registration under the Securities Act of the offering contemplated by the Time of Sale Information or the Final Offering Circular
or engaged in any form of general solicitation or general advertising in connection with the offering of the Additional Issuance
Offered Notes.

 

(xx)          
With respect to any Additional Issuance Offered Notes subject to the provisions of Regulation S of the Securities Act, the
Issuer has not offered or sold such Additional Issuance Offered Notes during the Distribution Compliance Period to a U.S. person
or for the account or benefit of a U.S. person (other than the Initial Purchaser). For this purpose, the term “Distribution
Compliance Period” and “U.S. person” are defined as such term is defined in Regulation S.

 

(xxi)        
Since the date of the latest un-audited financial statements of the Company as of September 30, 2014, there has been no
change nor any development or event involving a prospective change which has had or could reasonably be expected to have a material
adverse change in or effect on (i) the business, operations, properties, assets, liabilities, stockholders’ equity, earnings,
condition (financial or otherwise), results of operations or management of the Company and its subsidiaries, considered as one
enterprise, whether or not in the ordinary course of business, or (ii) the ability of the Company to perform its obligations hereunder
or under the other Transaction Documents.

 

(xxii)      
The Additional Issuance Offered Notes and the Transaction Documents conform in all material respects to the descriptions
thereof in the Final Offering Circular.

 

(xxiii)    
Any taxes, fees, and other governmental charges in connection with the execution and delivery of this Agreement and the
other Transaction Documents and the execution, delivery, and sale of the Additional Issuance Offered Notes have been or will be
paid at or before the Upsize Date.

 

    	8

    	 

    

 

 

(xxiv)    
No proceeds received by the Company, the Depositor or the Issuer in respect of the Additional Issuance Offered Notes will
be used by the Company, the Depositor or the Issuer to acquire any security in any transaction which is subject to Section 13 or
14 of the Exchange Act.

 

(xxv)      
(i) To the extent applicable thereto, each of the Company, the Issuer and their respective ERISA Affiliates is in compliance
in all material respects with ERISA unless any failure to so comply could not reasonably be expected to have a material adverse
effect and (ii) no lien under Section 303(k) of ERISA or Section 430(k) of the Code exists on any of the Assets. As used in this
paragraph, the term “ERISA Affiliate” means, with respect to any Person, a corporation, trade or business that
is, along with such Person, a member of a controlled group (as described in Section 414 of the Code or Section 4001 of ERISA).

 

(xxvi)    
The Company has not paid or agreed to pay to any Person any compensation for soliciting another Person to purchase any of
the Additional Issuance Offered Notes (except as contemplated by this Agreement).

 

(xxvii)  
The Company has not taken, directly nor indirectly, any action designed to cause or to result in, or that has constituted
or which might reasonably be expected to constitute, the stabilization or manipulation of the price of any Additional Issuance
Offered Note or to facilitate the sale or resale of the Additional Issuance Offered Notes.

 

(xxviii)
 On and immediately after the Upsize Date, each of the Company, the Depositor and the Issuer (after giving effect to the
issuance of the Additional Issuance Notes and to the other transactions related thereto as described in the Time of Sale Information
and the Final Offering Circular) will be Solvent. As used in this paragraph, the term “Solvent” means, with
respect to a particular date such Person, that on such date (A) the present fair market value (or present fair saleable value)
of the assets of such Person is not less than the total amount required to pay the probable liabilities of such Person on its total
existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (B) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (C) assuming the sale of the Additional Issuance Offered Notes as contemplated by this Agreement,
the Time of Sale Information and the Final Offering Circular, such Person is not incurring debts or liabilities beyond its ability
to pay as such debts and liabilities mature and (D) such Person is not engaged in any business or transaction, and is not about
to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such Person is engaged. In computing the amount of such contingent liabilities
at any time, it is intended that such liabilities will be computed at the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

    	9

    	 

    

 

 

Section 5.               
Sale of Additional Issuance Offered Notes to the Initial Purchaser.

 

The sale of the Additional
Issuance Offered Notes to the Initial Purchaser will be made without registration of the Additional Issuance Offered Notes under
the Securities Act, in reliance upon the exemption therefrom provided by Section 4(2) of the Securities Act.

 

(a)               
The Company, the Initial Purchaser, the Depositor and the Issuer hereby agree that the Additional Issuance Offered Notes
will be offered and sold only in transactions exempt from registration under the Securities Act. The Company, the Initial Purchaser,
the Depositor and the Issuer will each reasonably believe at the time of any sale of the Additional Issuance Offered Notes by the
Issuer through the Initial Purchaser (i) that either (A) each purchaser of the Additional Issuance Offered Notes is (1) a QIB who
is a Qualified Purchaser purchasing for its own account (or for the accounts of QIBs who are Qualified Purchasers to whom notice
has been given that the resale, pledge or other transfer is being made in reliance on Rule 144A) in transactions meeting the requirements
of Rule 144A, or (2) an Institutional Accredited Investor who is a Qualified Purchaser who purchases for its own account and provides
the Initial Purchaser with a written certification in substantially the form attached to the Indenture, or (B) each purchaser is
acquiring the Additional Issuance Offered Notes in an offshore transaction meeting the requirements of Regulation S and is a Qualified
Purchaser, and (ii) that the offering of the Additional Issuance Offered Notes will be made in a manner that will enable the offer
and sale of the Additional Issuance Offered Notes to be exempt from registration under state securities or Blue Sky laws; and each
such party understands that no action has been taken to permit a public offering in any jurisdiction where action would be required
for such purpose. The Company, the Initial Purchaser, the Depositor and the Issuer each further agree not to (i) engage (and represents
that it has not engaged) in any activity that would constitute a public offering of the Additional Issuance Offered Notes within
the meaning of Section 4(2) of the Securities Act or (ii) offer or sell the Additional Issuance Offered Notes by (and represents
that it has not engaged in) any form of general solicitation or general advertising (as those terms are used in Regulation D),
including the methods described in Rule 502(c) of Regulation D, in connection with any offer or sale of the Additional Issuance
Offered Notes.

 

(b)              
The Initial Purchaser hereby represents and warrants to and agrees with the Company, that (i) it is a QIB and a Qualified
Purchaser and (ii) it will offer the Additional Issuance Offered Notes only (A) to persons who it reasonably believes are QIBs
who are Qualified Purchasers in transactions meeting the requirements of Rule 144A, (B) to institutional investors who it reasonably
believes are Institutional Accredited Investors who are Qualified Purchasers or (C) to persons it reasonably believes are Qualified
Purchasers in offshore transactions in accordance with Regulation S. The Initial Purchaser further agrees that (i) it will deliver
to each purchaser of the Additional Issuance Offered Notes, at or prior to the Time of Sale, a copy of the Time of Sale Information,
as then amended or supplemented, and (ii) prior to any sale of the Additional Issuance Offered Notes to an Institutional Accredited
Investor that it does not reasonably believe is a QIB who is a Qualified Purchaser, it will receive from such Institutional Accredited
Investor a written certification in substantially the applicable form attached to the Indenture.

 

    	10

    	 

    

 

 

(c)               
The Initial Purchaser hereby represents that it is duly authorized and possesses the requisite limited liability company
power to enter into this Agreement.

 

(d)              
The Initial Purchaser hereby represents there is no action, suit or proceeding pending against or, to the knowledge of the
Initial Purchaser, threatened against or affecting, the Initial Purchaser before any court or arbitrator or any government body,
agency, or official which could reasonably be expected to materially adversely affect the ability of the Initial Purchaser to perform
its obligations under this Agreement.

 

(e)               
The Initial Purchaser hereby represents and agrees that all offers and sales of the Additional Issuance Offered Notes by
it to non-United States persons, prior to the expiration of the Distribution Compliance Period, will be made only in accordance
with the provisions of Rule 903 or Rule 904 of Regulation S and only upon receipt of certification of beneficial ownership of the
securities by a non-U.S. person in the form provided in the Indenture. For this purpose, the term “Distribution Compliance
Period” and “U.S. person” are defined as such terms are defined in Regulation S.

 

(f)               
The Initial Purchaser hereby represents and agrees that it (i) has complied and will comply with all applicable provisions
of the Financial Services and Markets Act 2000 (the “FSMA”) with respect to anything done by it in relation
to any Additional Issuance Offered Notes in, from or otherwise involving the United Kingdom; and (ii) has only communicated or
caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Additional Issuance
Offered Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer.

 

(g)              
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (as defined
below) (each, a “Relevant Member State”), the Initial Purchaser hereby represents and agrees that with effect
from and including the date on which the Prospectus Directive was implemented in that Relevant Member State (the “Relevant
Implementation Date”) it has not made and will not make an offer of the Additional Issuance Offered Notes to the public
in that Relevant Member State other than:

 

(i)                
to any legal entity which is a qualified investor as defined in the Prospectus Directive;

 

(ii)              
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject
to obtaining the prior consent of the relevant Initial Purchaser nominated by the Issuer for any such offer; or

 

(iii)            
in any other circumstances falling within Article 3(2) of the Prospectus Directive;

 

provided that no such offer of Additional
Issuance Offered Notes shall require the Issuer or the Initial Purchaser to publish a prospectus pursuant to Article 3 of the Prospectus
Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

 

    	11

    	 

    

 

For the purposes of
this Section 5(g), the expression an “offer of Additional Issuance Offered Notes to the public” in relation
to any Additional Issuance Offered Notes in any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Additional Issuance Offered Notes to be offered so as to enable an investor to decide
to purchase or subscribe to the Additional Issuance Offered Notes, as the same may be varied in that Relevant Member State by any
measure implementing the Prospectus Directive in that Relevant Member State. The expression “Prospectus Directive”
means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant implementing measure in the
Relevant Member State.

 

Section 6.               
Certain Agreements of the Company.

 

The Company covenants
and agrees with the Initial Purchaser as follows:

 

(a)               
If, at any time prior to the 90th day following the Upsize Date, any event involving the Company, the Depositor, the Issuer
or, to the knowledge of a Responsible Officer of the Company, the Collateral Manager shall occur as a result of which the Final
Offering Circular (as then amended or supplemented) would include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company
will immediately notify the Initial Purchaser and will cause the Issuer to prepare and furnish to the Initial Purchaser an amendment
or supplement to the Final Offering Circular that will correct such statement or omission. The Issuer will not at any time amend
or supplement the Final Offering Circular (i) prior to having furnished the Initial Purchaser with a copy of the proposed form
of the amendment or supplement and giving the Initial Purchaser a reasonable opportunity to review the same or (ii) except to the
extent the Company may determine it or the Issuer is required to so disclose pursuant to applicable law and after consultation
with the Initial Purchaser (and, in such a circumstance, shall remove all references to the Initial Purchaser therefrom if so requested
by the Initial Purchaser), in a manner to which the Initial Purchaser or its counsel shall object.

 

(b)              
During the period referred to in Section 6(a), the Company will furnish to the Initial Purchaser, without charge,
copies of the Final Offering Circular (including all exhibits and documents incorporated by reference therein), the Transaction
Documents, and all amendments or supplements to such documents, in each case, as soon as reasonably available and in such quantities
as the Initial Purchaser may from time to time reasonably request.

 

(c)               
Subject to compliance with Regulation FD, at all times during the course of the private placement contemplated hereby and
prior to the Upsize Date, (i) the Company will make available to each offeree the Additional Offering Documents and such information
concerning any other relevant matters as it or any of its affiliates possess or can acquire without unreasonable effort or expense,
as determined in good faith by it or such affiliate, as applicable, (ii) the Company will provide each offeree the opportunity
to ask questions of, and receive answers from, it concerning the terms and conditions of the offering and to obtain any additional
information, to the extent it or any of its affiliates possess such information or can acquire it without unreasonable effort or
expense (as determined in good faith by it or such affiliate, as applicable), necessary to verify the accuracy of the information
furnished to the offeree, (iii) the Company will not publish or disseminate any material in connection with the offering of the
Additional Issuance Offered Notes except as contemplated herein or as consented to by the Initial Purchaser or in connection with
the Company’s disclosure obligations under the Exchange Act, provided that no such disclosure under the Exchange Act
would result in a requirement that the offering of the Additional Issuance Offered Notes be registered under §5 of the Securities
Act, (iv) the Company will advise the Initial Purchaser promptly of the receipt by the Company of any communication from the SEC
or any state securities authority concerning the offering or sale of the Additional Issuance Offered Notes, (v) the Company will
advise the Initial Purchaser promptly of the commencement of any lawsuit or proceeding to which the Company is a party relating
to the offering or sale of the Additional Issuance Offered Notes, and (vi) the Company will advise the Initial Purchaser of the
suspension of the qualification of the Additional Issuance Offered Notes for offering or sale in any jurisdiction, or the initiation
or threat of any procedure for any such purpose.

 

    	12

    	 

    

 

 

(d)              
Subject to compliance with Regulation FD, the Company will furnish, upon the written request of any Noteholder or of any
owner of a beneficial interest in an Additional Issuance Offered Note, such information as is specified in paragraph (d)(4) of
Rule 144A under the Securities Act (i) to such Noteholder or beneficial owner, (ii) to a prospective purchaser of such Additional
Issuance Offered Note or interest therein who is a QIB and a Qualified Purchaser designated by such Noteholder or beneficial owner,
or (iii) to the Trustee for delivery to such Noteholder, beneficial owner or prospective purchaser, in order to permit compliance
by such Noteholder or beneficial owner with Rule 144A in connection with the resale of such Additional Issuance Offered Note or
beneficial interest therein by such holder or beneficial owner in reliance on Rule 144A unless, at the time of such request, the
Issuer is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 or is exempt from
such reporting requirements pursuant to and in compliance with Rule 12g3-2(b).

 

(e)               
Except as otherwise provided in the Indenture, each Additional Issuance Offered Note will contain legends in the forms set
forth in the Final Offering Circular.

 

(f)               
Neither the Issuer nor any of its affiliates or any other Person acting on their behalf shall engage, in connection with
the offer and sale of the Additional Issuance Offered Notes, in any form of general solicitation or general advertising within
the meaning of Rule 502(c) of Regulation D under the Securities Act, including, but not limited to, the following:

 

(i)                
any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium or broadcast
over television or radio; and

 

(ii)              
any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

(g)              
The Issuer shall not solicit any offer to buy from or offer to sell or sell to any Person any Additional Issuance Offered
Notes, except through the Initial Purchaser or with the consent of the Initial Purchaser and/or as otherwise specified in the Indenture
at any time prior to the Upsize Date; on or prior to the Upsize Date, neither the Issuer nor any of its affiliates (except for
compliance by the Company with Regulation FD) shall publish or disseminate any material other than the Offering Documents and any
Additional Offering Documents consented to by the Initial Purchaser in connection with the offer or sale of the Additional Issuance
Offered Notes as contemplated by this Agreement, unless the Initial Purchaser shall have consented to the use thereof; if the Issuer
or any of its affiliates makes any press release including “tombstone” announcements, in connection with the Transaction
Documents, the Issuer shall permit the Initial Purchaser to review and approve such release in advance.

 

    	13

    	 

    

 

 

(h)              
The Issuer shall not take, or permit or cause any of its affiliates to take, any action whatsoever which would have the
effect of requiring the registration, under the Securities Act, of the offer or sale of the Additional Issuance Offered Notes.

 

(i)                
The Issuer shall not take, directly or indirectly, any action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any Additional
Issuance Offered Note to facilitate the sale or resale of the Additional Issuance Offered Notes.

 

(j)                
The Company shall apply the net proceeds from the sale of the Additional Issuance Offered Notes as set forth in the Section
2.13 of the Indenture.

 

Section 7.               
Conditions of the Initial Purchaser Obligations.

 

The obligation of the
Initial Purchaser to purchase the Additional Issuance Offered Notes on the Upsize Date will be subject to the accuracy, in all
material respects, of the representations and warranties of the Company, the Depositor and the Issuer herein, to the performance,
in all material respects, by the Company, the Depositor and the Issuer of their respective obligations hereunder and to the following
additional conditions precedent:

 

(a)               
The Additional Issuance Offered Notes shall have been duly authorized, executed, authenticated, delivered and issued, the
Transaction Documents shall have been duly authorized, executed and delivered by the respective parties thereto and shall be in
full force and effect.

 

(b)              
The Initial Purchaser shall have received (I) a certificate, dated as of the Upsize Date, of a senior officer of the Company,
in its individual capacity (and, with respect to the Depositor, in its capacity as designated manager on behalf of the Depositor
and, with respect to the Issuer, in its capacity as designated manager on behalf of the Issuer), to the effect that such officer
has carefully examined this Agreement, the Final Offering Circular and the Transaction Documents and that, to the best of such
officer’s knowledge (i) since the date information is given in the Final Offering Circular, there has not been any material
adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company,
the Depositor or the Issuer whether or not arising in the ordinary course of business, or the ability of the Company, the Depositor
or the Issuer to perform its obligations hereunder or under the Transaction Documents, (ii) each of the Company, the Depositor
and the Issuer has complied in all material respects with all agreements and satisfied all conditions on its part to be performed
or satisfied hereunder and under the other Transaction Documents, at or prior to the Upsize Date, (iii) the representations and
warranties of the Company, the Depositor and the Issuer in the Transaction Documents are true and correct in all material respects,
as of the Upsize Date, as though such representations and warranties had been made on and as of such date, and (iv) nothing has
come to the attention of such officer that would lead such officer to believe that (A) the Time of Sale Information, as of the
Time of Sale, contained any untrue statement of a material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, and (B) the Final Offering Circular,
as of its date and as of the Upsize Date, or any Offering Document or Additional Offering Document, as of its respective date,
contained or contains an untrue statement of a material fact or omits to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading and (II) a certificate, dated as of
the Upsize Date, of a senior officer of the Company to the effect that such officer has carefully examined the Final Offering Circular
and that, to the best of such officer’s knowledge, nothing has come to the attention of such officer that would lead such
officer to believe that the information contained in the Final Offering Circular under the heading “Risk Factors—Relating
to Certain Conflicts of Interest—Certain Conflicts of Interest Relating to the Collateral Manager and its Affiliates”
and “The Collateral Manager”, as of the date of the Final Offering Circular and as of the Upsize Date, contained any
untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

 

    	14

    	 

    

 

 

(c)               
The Class A-1 Notes shall have been rated no less than “Aaa (sf)” by Moody’s and “AAA (sf)”
by S&P; the Class B-1 Notes shall have been rated no less than “Aa2 (sf)” by Moody’s and “AA (sf)”
by S&P; the Class C-1 Notes shall have been rated no less than “A2 (sf)” by Moody’s and “A (sf)”
by S&P; and the Class D-1 Notes shall have been rated no less than “Baa2 (sf)” by Moody’s and “BBB
(sf)” by S&P. Such ratings shall not have been downgraded or rescinded, and no public announcement shall have been made
by either of Moody’s or S&P that any ratings of the Initial Offered Notes have been placed under review.

 

(d)              
[Reserved].

 

(e)               
[Reserved].

 

(f)               
The Initial Purchaser shall have received legal opinions of Sutherland Asbill & Brennan LLP, counsel to the Company,
the Depositor, the Issuer and the Collateral Manager, with respect to certain corporate matters with respect to the Issuer, the
Depositor, the Company and the Collateral Manager and certain securities law and investment company matters, in form and substance
satisfactory to the Initial Purchaser.

 

(g)              
The Initial Purchaser shall have received an opinion of Mayer Brown LLP, special U.S. federal income tax counsel to the
Issuer, with respect to the treatment of the Additional Issuance Offered Notes as debt for U.S. federal income tax purposes and
in form and substance satisfactory to the Initial Purchaser.

 

(h)              
[Reserved].

 

    	15

    	 

    

 

 

(i)                
The Initial Purchaser shall have received from the Trustee a certificate signed by one or more duly authorized officers
of the Trustee, dated as of the Upsize Date, in customary form.

 

(j)                
The Company shall have furnished to the Initial Purchaser and its counsel such further information, certificates and documents
as the Initial Purchaser and its counsel may reasonably have requested, and all proceedings in connection with the transactions
contemplated by this Agreement, the other Transaction Documents and all documents incident hereto shall be in all respects satisfactory
in form and substance to the Initial Purchaser and its counsel.

 

(k)              
The Depositor shall have purchased or otherwise acquired the Additional Issuance Subordinated Notes in accordance with the
terms of the Additional Issuance Subordinated Notes Purchase Agreement.

 

(l)                
The Indenture, the Master Loan Sale Agreement, the Collateral Management Agreement and all other documents incident hereto
and to the other Transaction Documents shall be reasonably satisfactory in form and substance to the Initial Purchaser and its
counsel.

 

If any of the conditions
specified in this Section 7 shall not have been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above shall not be satisfactory in form and substance to the Initial Purchaser,
this Agreement and all of the Initial Purchaser’s obligations hereunder may be canceled by the Initial Purchaser at or prior
to delivery of and payment for the Additional Issuance Offered Notes. Notice of such cancellation shall be given to the Company
in writing, or by telephone or facsimile confirmed in writing.

 

Section 8.               
Indemnification and Contribution.

 

(a)               
The Company, the Depositor and the Issuer, jointly and severally (each an “indemnifying party” as such
term is used in this Agreement), shall indemnify and hold harmless the Initial Purchaser (whether acting as Initial Purchaser or
as placement agent with respect to any of the Additional Issuance Offered Notes), its officers, directors, employees, agents and
each person, if any, who controls the Initial Purchaser within the meaning of either the Securities Act or the Exchange Act and
the affiliates of the Initial Purchaser (each an “indemnified party” as such term is used in this Agreement)
from and against any loss, claim, damage or liability, joint or several, and any action in respect thereof, to which any indemnified
party may become subject, under the Securities Act or Exchange Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, any untrue statement or alleged untrue statement of a material fact contained in any
Offering Document (including the “Referenced Information” as defined in the Preliminary Offering Circular or the Final
Offering Circular, as applicable), any Additional Offering Document or the Time of Sale Information or arises out of, or is based
upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made not misleading, and shall reimburse any such indemnified
party for any legal and other expenses incurred by such indemnified party in investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action; provided, however, that the indemnifying parties shall
not be liable to any such indemnified party in any such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in the Time
of Sale Information, any Offering Document or any Additional Offering Document in reliance upon and in conformity with written
information furnished to the Company by such indemnified party specifically for inclusion therein. The foregoing indemnity is in
addition to any liability that the indemnifying parties may otherwise have to any indemnified party. The indemnifying parties acknowledge
that the statements set forth in each of the Preliminary Offering Circular and the Final Offering Circular relating to the Initial
Purchaser in the third and fourth sentence of the third paragraph under the heading “Important Notice Regarding the Additional
Issuance Offered Notes” and “Plan of Distribution” constitute the only written information furnished to the Company,
the Issuer and/or the Depositor by or on behalf of the Initial Purchaser specifically for inclusion in the Time of Sale Information,
any Offering Document or any Additional Offering Document.

 

    	16

    	 

    

 

 

(b)              
Promptly after receipt by an indemnified party under this Section 8 of notice of any claim or the commencement of
any action, the indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section
8, notify such indemnifying party in writing of the claim or commencement of that action, provided, however,
that the failure to notify an indemnifying party shall not relieve such indemnifying party from any liability that it may have
to an indemnified party under this Section 8, except to the extent that such indemnifying party has been materially prejudiced
by such failure and, provided, further, that the failure to notify an indemnifying party shall not relieve such indemnifying
party from any liability that it may have to an indemnified party otherwise than under this Section 8. If any such claim
or action shall be brought against an indemnified party, and it shall notify an indemnifying party thereof, such indemnifying party
shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. After notice from any such
indemnifying party or parties to the indemnified party or parties of its or their election to assume the defense of such claim
or action, any such indemnifying party or parties shall not be liable to the indemnified party under this Section 8 for
any legal or other expenses subsequently incurred by the indemnified party or parties in connection with the defense thereof; provided
that the indemnified party seeking such indemnity shall have the right to employ counsel to represent it and any other indemnified
party who may be subject to liability arising out of any claim or action in respect of which indemnity may be sought by an indemnified
party against an indemnifying party under this Section 8, if (i) in the reasonable judgment of counsel, there may be legal
defenses available to such indemnified party and any other indemnified party different from or in addition to those available to
the Company, the Depositor or the Issuer, or there is an actual conflict of interest between it and any other indemnified party,
on one hand, and the Company, the Depositor or the Issuer, on the other, or (ii) the Company, the Depositor or the Issuer shall
fail to select counsel reasonably satisfactory to such indemnified party or parties, and in such event the fees and expenses of
such separate counsel shall be paid by the Company, the Depositor and the Issuer. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless
such settlement (i) does not include a statement as to, or admission of, fault, culpability or a failure to act by or on behalf
of any such indemnified party, and (ii) includes an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

 

(c)               
If the indemnification provided for in Section 8 shall for any reason be unavailable to an indemnified party under
subsection 8(a) hereof in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company and the Issuer on the one hand (without duplication)
and the Initial Purchaser on the other from the offering and sale of the Additional Issuance Offered Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative fault of the Company, the Depositor and the Issuer
on the one hand and the Initial Purchaser on the other with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company, the Depositor and the Issuer on the one hand (without duplication) and the Initial Purchaser
on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering
and sale of the Additional Issuance Offered Notes (before deducting expenses) received by the Company, the Depositor and the Issuer
bear (without duplication) to the total fees actually received by the Initial Purchaser with respect to such offering and sale.
The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by the Company, the Depositor and the Issuer or by
the Initial Purchaser, the intent of the parties and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Depositor, the Issuer and the Initial Purchaser agree that it would not
be just and equitable if contributions pursuant to this subsection 8(c) were to be determined by pro rata allocation
or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred
to above in this subsection 8(c) shall be deemed to include, for purposes of this subsection 8(c), any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection 8(c), the Initial Purchaser shall not be required to contribute any amount
in excess of the aggregate fee actually paid to the Initial Purchaser with respect to the offering of the Additional Issuance Offered
Notes. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

(d)              
The indemnity agreements contained in this Section 8 shall survive the delivery of the Additional Issuance Offered
Notes, and the provisions of this Section 8 shall remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any indemnified party.

 

    	17

    	 

    

 

 

(e)               
Notwithstanding any other provision in this Section 8, no party shall be entitled to indemnification or contribution
under this Agreement in violation of Section 17(i) of the 1940 Act.

 

Section 9.               
Termination.

 

This Agreement shall
be subject to termination in the absolute discretion of the Initial Purchaser, by notice given to the Company prior to delivery
of and payment for the Additional Issuance Offered Notes, if prior to such time (i) trading in securities generally on the New
York Stock Exchange or NASDAQ shall have been suspended or materially limited or any setting of minimum prices for trading on such
exchange shall have been fixed, or maximum ranges for prices for securities shall have been required, on the New York Stock Exchange
or NASDAQ or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction; (ii) there
shall have been, since the respective dates as of which information is given in the Time of Sale Information or the Final Offering
Circular, any material adverse change in the condition, financial or otherwise, or in the properties (including, without limitation,
the Collateral Obligations) or the earnings, business affairs or business prospects of the Company, the Depositor, the Issuer or
the Collateral Manager, whether or not arising in the ordinary course of business, that is so material and adverse, in the reasonable
judgment of the Initial Purchaser, as to make it impractical or inadvisable to market the Additional Issuance Offered Notes; (iii)
a general moratorium on commercial banking activities shall have been declared by any state or federal authority or any material
disruption in commercial banking or securities settlement or clearance services shall have occurred; (iv) there shall have occurred
any material outbreak or escalation of hostilities or other calamity or crises or any change in political, financial or economic
conditions if the effect of any such events, in the judgment of the Initial Purchaser, makes it impracticable or inadvisable to
market the Additional Issuance Offered Notes or (v) the Initial Purchaser shall decline to purchase the Additional Issuance Offered
Notes for any reason permitted under this Agreement.

 

Section 10.           
Severability Clause.

 

Any part, provision,
representation, or warranty of this Agreement which is prohibited or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof.

 

Section 11.           
Notices.

 

All demands, notices
and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed
by overnight mail, certified mail or registered mail, postage prepaid and effective only upon receipt and if sent to the Initial
Purchaser, will be delivered to Guggenheim Securities, LLC, 330 Madison Avenue, New York, New York 10017, Attention: Chief Operating
Officer and to Guggenheim Securities, LLC, 330 Madison Avenue, New York, New York 10017, Attention: General Counsel; or if sent
to the Company, the Depositor or the Issuer will be delivered to such party at 295 Madison Avenue, 6th Floor, New York, New York
10017, Attention: Daniel Gilligan, facsimile No.:212-983-7654.

 

    	18

    	 

    

 

 

Section 12.           
Representations and Indemnities to Survive.

 

The respective agreements,
representations, warranties, indemnities and other statements of the Company, the Depositor, the Issuer and their respective officers
and of the Initial Purchaser set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchaser, the Company, the Depositor, the Issuer or any indemnified party
referred to in Section 8 of this Agreement, and will survive delivery of and payment for the Additional Issuance Offered
Notes.

 

Section 13.           
Successors.

 

This Agreement will
inure to the benefit of and be binding upon the parties hereto and their respective successors by merger, consolidation or acquisition
of their assets substantially as an entity and each indemnified party referred to in Section 8 of this Agreement and, except
as specifically set forth herein, no other person will have any right or obligation hereunder.

 

Section 14.           
Applicable Law.

 

(a)               
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

 

(b)              
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY
HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 14(b).

 

(c)               
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE NON—EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH SUCH PARTY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.

 

    	19

    	 

    

 

 

Section 15.           
Counterparts, Etc.

 

This Agreement supersedes
all prior or contemporaneous agreements and understandings relating to the subject matter hereof. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated except by a writing signed by the party against whom enforcement of
such change, waiver, discharge or termination is sought. This Agreement may be signed in any number of counterparts each of which
shall be deemed an original, which taken together shall constitute one and the same instrument.

 

Section 16.           
No Petition; Limited Recourse.

 

(a)               
The Initial Purchaser covenants and agrees that, prior to the date that is one year and one day (or such longer preference
period as shall then be in effect plus one day) after the payment in full of each Class of Notes rated by any Rating Agency, it
will not institute against the Issuer or the Depositor or join any other Person in instituting against the Issuer or the Depositor
any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws
of the United States or any state of the United States.

 

(b)              
Notwithstanding anything to the contrary herein, the obligations of the Issuer and the Depositor hereunder are limited recourse
obligations of the Issuer and the Depositor, respectively, payable solely from the Assets securing the Notes, and following the
exhaustion of such Assets, any claims of the Initial Purchaser hereunder against the Issuer or the Depositor shall be extinguished.
All payments by the Issuer or the Depositor to the Initial Purchaser hereunder shall be made subject to and in accordance with
the Priority of Payments set forth in the Indenture.

 

(c)               
This Section 16 will survive the termination of this Agreement.

 

Section 17.           
Arm’s-Length Transaction; Other Transactions.

 

(a)               
Each of the Company, the Depositor and the Issuer acknowledges and agrees that (i) the purchase and sale of the Additional
Issuance Offered Notes pursuant to this Agreement, including the determination of the offering price of the Additional Issuance
Offered Notes and any related discounts and commissions, is an arm’s-length commercial transaction between the Issuer, on
the one hand, and the Initial Purchaser, on the other hand, (ii) in connection with the offering, sale and the delivery of the
Additional Issuance Offered Notes contemplated hereby and the process leading to such transaction, the Initial Purchaser is and
has been acting solely as a principal and is not an agent or fiduciary of the Issuer, the Company or the Depositor or any of their
respective Affiliates, equity holders, creditors, employees or any other party, (iii) the Initial Purchaser has not assumed and
will not assume an advisory or fiduciary responsibility in favor of the Issuer, the Depositor or the Company with respect to the
offering, sale and the delivery of the Additional Issuance Offered notes contemplated hereby or the process leading thereto (irrespective
of whether the Initial Purchaser has advised or is currently advising any of the Issuer, the Depositor or the Company on other
matters) and the Initial Purchaser has no obligation to any of the Issuer, the Depositor or the Company with respect to the offering
contemplated hereby, except the obligations expressly set forth in this Agreement, and (iv) the Initial Purchaser has not provided
any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and each of the Issuer, the Depositor
and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

 

    	20

    	 

    

 

 

(b)              
Each of the Company, the Depositor and the Issuer acknowledges and agrees that the Initial Purchaser and its Affiliates
may presently have and may in the future have investment and commercial banking, trust and other relationships with parties other
than the Company, the Depositor and the Issuer, which parties may have interests with respect to the purchase and sale of the Additional
Issuance Offered Notes. Although the Initial Purchaser in the course of such other relationships may acquire information about
the purchase and sale of the Additional Issuance Offered Notes, potential purchasers of the Additional Issuance Offered Notes or
such other parties, the Initial Purchaser shall not have any obligation to disclose such information to any of the Company, the
Depositor or the Issuer. Furthermore, each of the Company, the Depositor and the Issuer acknowledges that the Initial Purchaser
may have fiduciary or other relationships whereby the Initial Purchaser may exercise voting power over securities of various persons,
which securities may from time to time include securities of any of the Company, the Depositor or the Issuer or their respective
Affiliates or of potential purchasers. Each of the Company, the Depositor and the Issuer acknowledges that the Initial Purchaser
may exercise such powers and otherwise perform any functions in connection with such fiduciary or other relationships without regard
to its relationship to the Company, the Depositor or the Issuer hereunder.

 

[REST OF
PAGE INTENTIONALLY LEFT BLANK]

 

    	21

    	 

    

 

 

If the foregoing is
in accordance with your understanding of our agreement, please sign and return to the undersigned a counterpart hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the Company, the Depositor, the Issuer and the Initial
Purchaser.

 

Very
truly yours,

 

KCAP
FINANCIAL, INC.

 

 

By:_______________________________

Name:_________________________

Title:__________________________

 

 

    	S-1

    	 

    

 

 

KCAP
SENIOR FUNDING I, LLC

 

 

By:
KCAP Financial, Inc., its designated manager

 

 

By:
_______________________________

Name:__________________________

Title:___________________________

 

 

 

    	S-2

    	 

    

 

 

KCAP
SENIOR FUNDING I HOLDINGS, LLC

 

 

By:
KCAP Financial, Inc., its designated manager

 

 

By:
_______________________________

Name:__________________________

Title:___________________________

 

 

    	S-3

    	 

    

 

 

The foregoing Agreement is hereby confirmed and

accepted as of the date first above written.

 

GUGGENHEIM SECURITIES, LLC,

as the Initial Purchaser

 

 

By: _______________________________

Name: _____________________________

Title: ______________________________

 

    	S-4

    	 

    

 

 

SCHEDULE I

 

	Class of Notes	Principal Amount
	A-2	$30,900,00
	B-2	$3,600,000
	C-2	$4,000,000
	D-2	$3,600,000

 

 

 

    	Sch. I-1

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