Document:

EXECUTION
VERSION

AMENDED
AND RESTATED NOTE

	$95,000,000.00	New
    York, New York
	 	February
    28, 2012

FOR
VALUE RECEIVED, the undersigned (“Borrower”), hereby promises to pay to the order of RBS CITIZENS, N.A.,
or registered assigns (“Lender”), in accordance with the provisions of the Agreement (as hereinafter
defined), the principal amount of NINETY FIVE MILLION ($95,000,000.00) DOLLARS or, if less than such amount, the unpaid principal
amount of each Loan from time to time made by the Lender to Borrower under that certain Credit Agreement, dated as of August 17,
2011 (as amended, restated, extended, supplemented, or otherwise modified in writing from time to time, the “Agreement;”
the terms defined therein being used herein as therein defined), among AMERICAN REALTY CAPITAL OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (“Borrower”), AMERICAN REALTY CAPITAL TRUST, INC., a Maryland corporation
and the sole member of the sole general partner of Borrower (“Parent”), the Lenders from time to time
party thereto, and RBS Citizens, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

Borrower
promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is
paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall
be made to Administrative Agent for the account of Lender in Dollars in immediately available funds at Administrative Agent’s
Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand,
from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate
set forth in the Agreement.

This
Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part
subject to the terms and conditions provided therein. This Note is also entitled to the benefits of the Guaranties and is secured
by the Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all
amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided
in the Agreement. Loans made by Lender shall be evidenced by one or more loan accounts or records maintained by Lender in the
ordinary course of business. Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of
its Loans and payments with respect thereto.

Borrower,
for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.

Borrower,
for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.

[Signature
Page Follows]

    	 

    	 	

    

 

THIS
NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

	 	BORROWER:

         

	 	 
	 	AMERICAN
    REALTY CAPITAL OPERATING PARTNERSHIP, L.P., 

    a Delaware limited partnership
	 	 
		By: 	/s/
    Brian S. Block
	Name:
                    Brian S. Block

        Title:
        Secretary & Treasurer

 

 

[Signature
Page to RBS Amended and Restated Note]

 

    	 

    	 	

    

 

LOANS
AND PAYMENTS WITH RESPECT THERETO

 

	Date	 	Type
    of 

    Loan Made	 	Amount
    of 

    Loan Made	 	End
    of 

    Interest 

    Period	 	Amount
    of 

    Principal or 

    Interest Paid 

    This Date	 	Outstanding

        Principal
        

        Balance This Date
	 	Notation

        Made
        ByNOTE PURCHASE AGREEMENT

 

This NOTE PURCHASE AGREEMENT
(as it may be amended from time to time, the “Agreement”) dated as of February 24, 2012 (the “Effective
Date”) is entered into by and among Kohlberg Capital Corporation, in its capacity as Junior Noteholder (as defined herein),
Kohlberg Capital Corporation, in its capacity as portfolio manager under this agreement (the “Portfolio Manager”),
Credit Suisse AG, Cayman Islands Branch (“CS”), in its capacities as Senior Commitment Party and Senior Noteholder
(each, as defined herein), Credit Suisse Securities (USA) LLC (the “Arranger”), KCAP Funding (the “Issuer”)
and The Bank of New York Mellon Trust Company, National Association (the “Bank”), in its capacities as Collateral
Administrator and Collateral Agent (each, as defined herein).

 

WHEREAS, it is intended
that the Senior Commitment Party and the Junior Noteholder will provide financing to the Issuer to purchase Collateral Debt Obligations
(as defined below);

 

WHEREAS, it is intended
that the Issuer will refinance its obligations under the Senior Notes and Junior Notes (each, as defined below) with proceeds of
a Refinancing Transaction (as defined below); and

 

WHEREAS, it is intended
that the Issuer pledge the Collateral (as defined below) to the Collateral Agent for the benefit of the Senior Noteholder and the
Junior Noteholder in accordance with the priorities set forth herein;

 

NOW, THEREFORE, the parties
hereto agree as follows:

 

ARTICLE I

INTERPRETATION 

 

Section 1.1.          Definitions.

 

The following terms have
the respective meanings set forth below:

 

“Account”:
Each account established by the Collateral Administrator under the Collateral Administration Agreement, including the Interest
Account, the Principal Account and the CLO Asset Management Fees Account.

 

“Additional Junior
Notes”: The meaning specified in Section 2.1(c).

 

“Advisers Act”:
The Investment Advisers Act of 1940, as amended.

 

“Agreement”:
The meaning specified in the recitals.

 

“Applicable Interest
Period”: With respect to the Senior Notes and each loan or portion thereof represented thereby, the period beginning
on and including the date such loan was funded and ending on but excluding the date on which such loan (or portion thereof) has
been paid in full.

 

“Arranger”:
The meaning specified in the recitals.

 

“Authenticating
Agent”: The meaning specified in Section 2.1(d).

 

“Available Funds”:
The aggregate amount of funds (a) in the Interest Account; (b) in the Principal Account (other than amounts designated by the Portfolio
Manager for reinvestment pursuant to Section 3.1(e); (c) if applicable, Refinancing Proceeds; (d) contributed by the Junior Noteholder
or constituting the purchase price of Additional Junior Notes; and (e) after the occurrence of a Failure to Pay, funds in the CLO
Asset Management Fees Account.

 

    	 

    	 

    

 

“Bank”:
The meaning specified in the recitals.

 

“Business Day”:
A day on which commercial banks and foreign exchange markets settle payments in (a) New York, (b) the city in which the principal
office of the Collateral Administrator is located (initially Houston, Texas), (c) solely in respect of the issuance of Additional
Junior Notes, the Cayman Islands, and (d) following a Failure to Pay, the city in which the principal office of the Collateral
Agent is located.

 

“Caa Obligation”:
Any Collateral Debt Obligation other than a Defaulted Collateral Debt Obligation with a Moody’s Default Probability Rating
lower than “B3.”

 

“CCC Obligation”:
Any Collateral Debt Obligation other than a Defaulted Collateral Debt Obligation with an S&P Rating lower than “B-.”

 

“Certificate”:
Each physical certificate representing a Note.

 

“Clearing Corporation”:
The meaning specified in Article 8 of the UCC.

 

“Clearing Corporation
Security”: A security that is registered in the name of, or endorsed to, a Clearing Corporation or its nominee or is
in the possession of the Clearing Corporation in bearer form or endorsed in blank by an appropriate person.

 

“CLO Asset Management
Fees”: The senior management fees and subordinated management fees paid by Trimaran CLO IV Ltd., Trimaran CLO V Ltd.,
Trimaran CLO VI Ltd. and Trimaran CLO VII Ltd. to the Portfolio Manager.

 

“CLO Asset Management
Fees Account”: The meaning specified in the Collateral Administration Agreement.

 

“Code”:
The U.S. Internal Revenue Code of 1986, as amended.

 

“Collateral”:
The meaning specified in Section 8.1(b).

 

“Collateral Agent”:
The meaning specified in Section 8.1(e).

 

“Collateral Administrator”:
The Collateral Administrator under the Collateral Administration Agreement.

 

“Collateral Administration
Agreement”: The collateral administration agreement among the Collateral Administrator, the Senior Commitment Party,
the Issuer and the Portfolio Manager.

 

“Collateral Debt
Obligation”: A U.S. senior secured leveraged loan, second lien loan or mezzanine loan that in each case satisfies the
Eligibility Criteria and is purchased or committed to be purchased by the Issuer during the Loan Facility Period.

 

“Collateral Report”:
Each report containing the information set forth under Content of Collateral Reports on Exhibit A (as the same may be modified
and amended by mutual agreement of the Senior Commitment Party, the Portfolio Manager and the Collateral Administrator from time
to time) that is delivered pursuant to Section 6.1(a).

 

    	2

    	 

    

 

“Concentration
Limits”: Limits that are satisfied if the aggregate amount of Collateral Debt Obligations described under the related
“Collateral Type” does not exceed the maximum limitations listed in the table below:

 

	Collateral Type	 	Maximum (amount or % 
 of the aggregate amount of 
 Collateral Debt Obligations)
	 
	 	 	 	 
	(a)        obligations of any one obligor (together with affiliated obligors	 	$	2,000,000	 
	 	 	 	 	 
	(b)        obligations issued by obligors in any one industry determined by the S&P’s CDO Monitor Asset Classifications; provided that the limit in this clause (b) will not apply to the Issuer’s commitment to purchase Collateral Debt Obligations that are part of the Initial Portfolio	 	 	20.0	%

 

“Conditions of
Accumulation”: The meaning specified in Section 2.4.

 

“Controlling Party”:
The Senior Commitment Party until the Senior Note is paid in full, and thereafter, the Junior Noteholder.

 

“Credit Suisse
Party”: The Arranger, the Senior Commitment Party and their respective affiliates.

 

“Custody Account”:
The meaning specified in the Collateral Administration Agreement.

 

“Defaulted Collateral
Debt Obligation”: Any Collateral Debt Obligation with respect to which:

 

(i)          there
has occurred and is continuing a payment default by the obligor (without giving effect to any applicable grace period or waiver
set forth in the relevant Underlying Instruments); provided, however, that in the case of a default that the Portfolio
Manager certifies to the Collateral Administrator that it is solely for administrative reasons that are not credit-related, such
default will not constitute a default under this clause (i) unless it has continued for the lesser of five Business Days and the
applicable grace period in the related underlying instrument;

 

(ii)         there
has occurred a default (other than a payment default) that has resulted in an acceleration of the maturity of all or a portion
of the principal amount of such obligation, but only until such default has been cured or waived;

 

(iii)        any
bankruptcy, insolvency or receivership proceeding has been initiated in connection with the obligor of such Collateral Debt Obligation
and in the case of an involuntary petition, such petition has not been dismissed or stayed within 60 days of filing; provided,
however, that a Collateral Debt Obligation shall not be treated as a Defaulted Collateral Debt Obligation under this clause
(iii) if it is a “Debtor-In-Possession” loan; provided, further, that in the case of such a proceeding
with respect to a synthetic security counterparty or a selling institution (or their respective guarantors), the related synthetic
security or participation, respectively, shall constitute a Defaulted Collateral Debt Obligation under this clause (iii);

 

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(iv)        the
Portfolio Manager knows the obligor thereof is (or is reasonably expected by the Portfolio Manager to be, as of the next scheduled
payment distribution date) in default as to payment of principal and/or interest on another obligation that is senior or pari passu
in right of payment to such Collateral Debt Obligation (without giving effect to any applicable grace period or waiver) and such
default has not been cured or waived and the holders thereof have accelerated the maturity of all or a portion of the principal
amount of such obligation; or

 

(v)         the
obligor of such Collateral Debt Obligation has (A) a Moody’s probability of default rating of “Ca” or lower,
“D” or “LD” if in the Moody’s press release assigning the “LD” specifies such Collateral
Debt Obligation as the cause or (B) an issuer credit rating from S&P of “CC” or lower, “D” or “SD”;
provided, however, that a Collateral Debt Obligation will not be treated as a Defaulted Obligation under this clause (v)
if it is a “Debtor-In-Possession” loan.

 

Notwithstanding
the foregoing, the Portfolio Manager may declare any Collateral Debt Obligation to be a Defaulted Collateral Debt Obligation.

 

“Deliver”:
For purposes of this definition, all capitalized terms not otherwise defined herein have the meaning specified under the UCC. The
taking of the following steps:

 

(a)          in
the case of each Certificated Security or Instrument (other than a Clearing Corporation Security or an Instrument evidencing debt
underlying a participation), (A) causing the delivery of such Certificated Security or Instrument to the Intermediary registered
in the name of the Intermediary or its affiliated nominee or endorsed to the Intermediary or in blank, (B) causing the Intermediary
to continuously identify on its books and records that such Certificated Security or Instrument is credited to the relevant Account
and (C) causing the Intermediary to maintain continuous possession of such Certificated Security or Instrument;

 

(b)          in
the case of each Uncertificated Security (other than a Clearing Corporation Security), (A) causing such Uncertificated Security
to be continuously registered on the books of the obligor thereof to the Intermediary and (B) causing the Intermediary to
continuously identify on its books and records that such Uncertificated Security is credited to the relevant Account;

 

(c)          in
the case of each Clearing Corporation Security, causing (A) the relevant Clearing Corporation to continuously credit such
Clearing Corporation Security to the securities account of the Intermediary at such Clearing Corporation and (B) the Intermediary
to continuously identify on its books and records that such Clearing Corporation Security is credited to the relevant Account;

 

(d)          in
the case of any Financial Asset that is maintained in book-entry form on the records of an FRB, causing (A) the continuous
crediting of such Financial Asset to a securities account of the Intermediary at any FRB and (B) the Intermediary to continuously
identify on its books and records that such Financial Asset is credited to the relevant Account;

 

(e)          in
the case of CLO Asset Management Fees, causing the deposit of such CLO Asset Management Fees with the Intermediary and, until any
such CLO Asset Management Fees are applied in accordance with the terms and conditions of this Agreement, causing the Intermediary
to continuously identify on its books and records that such CLO Asset Management Fees are credited to the CLO Asset Management
Fees Account;

 

(f)          in
the case of cash, causing the deposit of such cash with the Intermediary and causing the Intermediary to continuously identify
on its books and records that such cash is credited to the relevant Account;

 

    	4

    	 

    

 

(g)          in
the case of each Financial Asset not covered by the foregoing clauses (a) through (e), causing the transfer of such Financial Asset
to the Intermediary in accordance with applicable law and regulation and causing the Intermediary to continuously credit such Financial
Asset to the relevant Account; and

 

(h)          in
all cases, the filing of an appropriate financing statement in the appropriate filing office in accordance with the Uniform Commercial
Code as in effect in any relevant jurisdiction.

 

“Draw Date”:
The date specified in the Notice of Borrowing as the date on which the Senior Note Required Draw Down Amount is to be funded.

 

“Effective Date”:
The meaning specified in the recitals.

 

“Effective Date
Expenses”: Legal and collateral administration fees to be paid on the Effective Date by the Junior Noteholder in an amount
not to exceed $100,000.

 

“Effective Date
Fee”: $300,000 to be paid on the Effective Date by the Junior Noteholder to the Arranger.

 

“Eligibility Criteria”:
The meaning specified on Annex I.

 

“ERISA”:
The United States Employee Retirement Income Security Act of 1974, as amended.

 

“Excepted Property”:
$500 (comprised of $250 received in connection with the issuance of the ordinary shares of the Issuer and $250 payable to the Issuer
as a fee for acquiring the Collateral and issuing the Notes), together with the bank account of the Issuer in the Cayman Islands
in which such funds are deposited and any interest earned thereon.

 

“Failure to Pay”:
With respect to any Payment Date, the failure to pay to the Senior Noteholder, the full amount of Senior Note Interest and the
Senior Note Quarterly Partial Redemption Amount due and payable on such Payment Date.

 

“Final Settlement
Date”: The Business Day mutually agreed upon by the Junior Noteholder and the Senior Commitment Party, which day will
be five Business Days after the Maturity Date or, in the event that the reconciliation of one or more Accounts has not been completed,
a date that is as soon as practicable after the Maturity Date.

 

“Gross Loss”:
The sum of all Realized Losses on Collateral Debt Obligations and all Unrealized Losses on, without duplication, Ineligible Collateral
Debt Obligations, Defaulted Collateral Debt Obligations, Caa Obligations and CCC Obligations held by the Issuer.

 

For purposes of this definition:

 

“Gross
Purchase Price” means the sum of the Original Purchase Prices of the Collateral Debt Obligations currently held by the
Issuer.

 

“Realized
Losses” means the excess, if any, of (a) the Original Purchase Price of any Collateral Obligation over (b) the sale proceeds
(net of any expenses related to the sale) of such Collateral Debt Obligations determined as of the date of sale of such Collateral
Debt Obligation.

 

    	5

    	 

    

 

“Unrealized
Losses” means the Gross Purchase Price less the current Portfolio Mark to Market.

 

“Portfolio
Mark to Market” means the aggregate market value using the lower of the bid side levels as reported by Markit and Loan
Pricing Corporation (“LPC”) of the Collateral Debt Obligations currently held by the Issuer. In the event there
is no reported price by either Markit or LPC, then the market value of the Collateral Debt Obligations held by the Issuer will
be determined by the Arranger. At all times, the market value of the Collateral Debt Obligations held by the Issuer may be the
bid side levels as provided by the Arranger provided reasonable market-based evidence exists for such values.

 

“Ineligible
Collateral Debt Obligation”: A Collateral Debt Obligation that fails to satisfy the Eligibility Criteria at any time
during the Loan Facility Period.

 

“Initial Portfolio”:
The loans that are mutually agreed to by the Senior Commitment Party and the Portfolio Manager prior to the Effective Date that
comprise Collateral Debt Obligations, as set forth on Annex VI.

 

“Interest”:
Any interest (including paid and unpaid accrued interest), premiums and fees accrued on and other items of income on the Collateral
Debt Obligations.

 

“Interest Account”:
The meaning specified in the Collateral Administration Agreement.

 

“Investment Company
Act”: The U.S. Investment Company Act of 1940, as amended.

 

“Issuer”:
The meaning specified in the recitals.

 

“Junior Note Commitment
Amount”: $12,500,000

 

“Junior Noteholder”:
The meaning specified in the recitals, which will be the registered holder of the Junior Notes appearing in the Note Register.

 

“Junior Notes”:
The Junior Notes issued pursuant to Section 2.1(c).

 

“Loan Facility
Interest”: An amount equal to the aggregate amount of Interest during the Loan Facility Period, and any earnings thereon
minus all accrued and unpaid Interest that was included in the purchase price of the Collateral Debt Obligations.

 

“Loan Facility
Period”: The period (a) commencing on the Effective Date and (b) ending on the Maturity Date.

 

“Liabilities”:
The meaning specified in Section 9.1(b).

 

“LIBOR”:
The three-month London interbank offered rate (reset daily) as calculated by the British Bankers’ Association (or any successor
thereto) and reported on Bloomberg Financial Markets Commodities News (or any successor thereto), as of 11:00 a.m. (London Time)
on the Effective Date and on each Business Day thereafter.

 

“Liquidation Event”:
The occurrence of either (a) a Termination Event or (b) the Scheduled Maturity Date.

 

    	6

    	 

    

 

“Maturity Date”:
The earlier of (i) the Refinancing Date or (ii) the date on which all Collateral Debt Obligations have been liquidated or otherwise
disposed of following the occurrence of a Liquidation Event.

 

“Moody’s”:
Moody’s Investors Service and any successor thereto.

 

“Moody’s
Default Probability Rating”: The meaning specified on Annex III.

 

“Moody’s
Rating”: The meaning specified on Annex III.

 

“Note”:
Each Senior Note and Junior Note.

 

“Note Register”:
The register of Senior Notes and Junior Notes maintained on behalf of the Issuer.

 

“Note Registrar”:
The Bank, acting in its capacity as Note Registrar.

 

“Notice of Borrowing”:
A notice substantially in the form of Exhibit B.

 

“Original Purchase
Price”: The clean price paid by the Issuer for each Collateral Debt Obligation adjusted for any payments of principal
received by the Issuer on such Collateral Debt Obligation. For purposes of this definition, a “clean” purchase price
with respect to a Collateral Debt Obligation means a price that does not include any accrued and unpaid interest on such Collateral
Debt Obligation.

 

“Outstanding Junior
Note Amount”: As of any date of determination, the amount of the Junior Notes, including Additional Junior Notes, that
have not been repaid by the Issuer.

 

“Outstanding Senior
Note Amount”: With respect to the Senior Notes, as of any date of determination, the amount of the Senior Note Commitment
Amount that has been drawn down (and not repaid) by the Issuer for purchases of Collateral Debt Obligations from time to time pursuant
to this Agreement; provided that, at any time that more than one Senior Note is outstanding, the Outstanding Senior Note
Amount with respect to each such Senior Note will be the portion of the drawn amount represented by such Senior Note.

 

“Payment Date”:
The 20th day of March, June, September and December of each year, commencing in June 2012 (or, if such day is not a Business Day,
the next Business Day); provided, that the last Payment Date will be the Final Settlement Date.

 

“Portfolio Manager”:
The meaning specified in the recitals.

 

“Portfolio Manager
Breach”: The occurrence of any of the following: (a) an act of gross negligence, bad faith or willful misconduct by the
Portfolio Manager in the performance of any of its duties under this Agreement; (b) a breach by the Portfolio Manager of this Agreement
or any representation or warranty by the Portfolio Manager in this Agreement fails to be true and correct, (c) failure to
offer the Arranger a right of first refusal on any Refinancing Transaction prior to the Maturity Date or (d) failure to pay the
Senior Notes in full upon a Refinancing Transaction.

 

“Portfolio Manager
Party”: The Portfolio Manager, its affiliates and any fund or portfolio managed by the Portfolio Manager or any of its
affiliates.

 

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“Positive Carry”:
With respect to each Payment Date, all Loan Facility Interest received by the Issuer since the preceding Payment Date in excess
of (a) the Senior Note Interest due and payable on that Payment Date, (b) all other amounts senior in right of payment to
the Junior Notes under clause (a)(v) of the Priority of Payments on that Payment Date.

 

“Principal Account”:
The meaning specified in the Collateral Administration Agreement.

 

“Priority of Payments”:
The meaning specified in Section 4.1.

 

“Qualified Institutional
Buyer”: Any person that, at the time of its acquisition, purported acquisition or proposed acquisition of Notes, is a
qualified institutional buyer within the meaning of Rule 144A under the Securities Act.

 

“Qualified Purchaser”:
Any person that, at the time of its acquisition, purported acquisition or proposed acquisition of Notes, is a qualified purchaser
within the meaning of the Investment Company Act.

 

“Refinancing Date”:
The date (if any) on which a Refinancing Transaction occurs.

 

“Refinancing Proceeds”:
The proceeds of any Refinancing Transaction available to the Issuer for payments on the Notes on the Final Settlement Date.

 

“Refinancing Transaction”:
Any collateralized loan obligation transaction or any issuance of equity and/or debt securities, in each case by the Issuer or
a Portfolio Manager Party for which the Arranger acts as placement agent or initial purchaser for a fee no less than the customary
fee for such services in similar transactions.

 

“Reinvestment
Period”: The period beginning on the Effective Date and ending on the earliest to occur of (a) the first anniversary
of the Effective Date, (b) the date on which a Termination Event occurs or (c) the Maturity Date.

 

“Scheduled Maturity
Date”: The date that is the three year anniversary of the earlier of (i) December 20, 2011 or (ii) the date of the
first purchase of a Collateral Debt Obligation hereunder except that if a Refinancing Transaction has priced but not closed by
the Scheduled Maturity, then the Scheduled Maturity Date will be deemed to be the Refinancing Date.

 

“S&P”:
Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor
or successors thereto.

 

“S&P CDO Monitor
Asset Classifications”: The meaning specified in Annex V.

 

“S&P Rating”:
The meaning specified on Annex IV.

 

“Secured Obligations”:
The obligation of the Issuer to make payments (a) under the Senior Note and the Junior Note, in accordance with the Priority of
Payments, and (b) to the Collateral Agent and the Collateral Administrator, in accordance with this Agreement and the Collateral
Administration Agreement.

 

“Secured Parties”:
Each of the Senior Noteholder, the Junior Noteholder, the Collateral Agent and the Collateral Administrator.

 

    	8

    	 

    

 

“Securities Act”:
The U.S. Securities Act of 1933, as amended.

 

“Senior Commitment
Party”: CS.

 

“Senior Note Applicable
Interest Rate”: The Senior Note Applicable Interest Rate, as of any date of determination:

 

(a)          from
and including the Effective Date to but excluding the first anniversary of the Effective Date, LIBOR + 300 bps;

 

(b)          from
and including the first anniversary of the Effective Date to but excluding the second anniversary of the Effective Date, LIBOR
+ 350 bps; and

 

(c)          from
and including the second anniversary of the Effective Date to but excluding the third anniversary of the Effective Date, LIBOR
+ 400 bps.

 

“Senior Note Commitment
Amount”: As of any date of determination, the Senior Note Initial Commitment Amount minus the sum of (x) the Outstanding
Senior Note Amount and (y) the aggregate amount of principal that had been repaid on the Senior Notes on or prior to that date.

 

“Senior Note Initial
Commitment Amount”: $30,000,000.

 

“Senior Note Interest”:
The aggregate amount of interest accrued on the Senior Notes at the Senior Note Interest Rate during the related Senior Note Interest
Period.

 

“Senior Note Interest
Period”: The period beginning on and including the Effective Date and ending on, but excluding, the first Payment Date,
and each successive period beginning on and including a Payment Date and ending on, but excluding, the next Payment Date.

 

“Senior Note Interest
Rate”: A per annum rate equal to the Senior Note Applicable Interest Rate accrued on a daily basis on the then Outstanding
Senior Note Amount.

 

“Senior Note Quarterly
Partial Redemption Amount”: $1,000,000.

 

“Senior Note Required
Draw Down Amount”: The meaning specified in Section 2.3.

 

“Senior Noteholder”:
Each registered holder of the Senior Notes appearing in the Note Register.

 

“Senior Notes”:
The Senior Notes issued pursuant to Section 2.1(b).

 

“Tax Operating
Guidelines”: The guidelines set forth on Annex II.

 

“Termination Event”:
The occurrence of any of the following events, as determined by the Arranger in its sole discretion:

 

(a)          a
Portfolio Manager Breach;

 

(b)          failure
to satisfy the requirements of Section 7.2;

 

(c)          a
Failure to Pay; or

 

    	9

    	 

    

 

(d)          if
at any time the Gross Loss exceeds 65% of the Outstanding Junior Note Amount for more than one Business Day unless the Portfolio
Manager has posted cash collateral to the Senior Commitment Party equal to the amount of such excess.

 

“Trading Gains”:
The amount (if positive) equal to the clean sale price minus the clean purchase price upon the sale of a Collateral Debt Obligation
(each expressed as a percentage of par) multiplied by the notional amount of such Collateral Debt Obligation at the time of sale.
For the avoidance of doubt, Trading Gains will be applied to offset any Trading Losses. For purposes of this definition, a “clean”
price with respect to a Collateral Debt Obligation means a price that does not include any accrued and unpaid interest on such
Collateral Debt Obligation.

 

“Trading Losses”:
The amount (if positive) equal to the clean purchase price minus the clean sale price upon the sale of a Collateral Debt Obligation
(each expressed as a percentage of par) (the “Loss”) multiplied by the notional amount of such Collateral Debt
Obligation at the time of sale minus (a) first, any Trading Gains up to the amount of the Loss, and (b) second, if the application
of the Trading Gains does not completely offset the Loss, then minus any Positive Carry up to the amount needed to completely offset
the Loss. For purposes of this definition, a “clean” price with respect to a Collateral Debt Obligation means a price
that does not include any accrued and unpaid interest on such Collateral Debt Obligation.

 

“Transfer Certificate”:
A certificate in the form of Exhibit E executed by a transferee of Senior Notes.

 

“UCC”:
The Uniform Commercial Code, as in effect from time to time in the State of New York.

 

Section 1.2.          Calculations.

 

(a)          The
calculation of Gross Loss and related determinations will be performed by the Arranger.

 

(b)          All
calculations required to be performed by the Collateral Administrator pursuant to this Agreement shall be performed by the Collateral
Administrator in consultation with the Arranger and the Portfolio Manager. To the extent the Arranger and the Portfolio Manager
disagree with respect to any calculation, the Arranger and the Portfolio Manager each agree to work diligently to reach an agreement
with respect thereto.

 

ARTICLE II

COMMITMENTS;
NOTES; FUNDING

 

Section 2.1.          Commitment;
Notes.

 

(a)          The
Senior Commitment Party hereby agrees to hold available to the Issuer a line of credit in an amount equal to the Senior Note Commitment
Amount, subject to the terms and conditions herein.

 

(b)          On
the Effective Date, upon payment of the Effective Date Fee and Effective Date Expenses, the Issuer agrees to issue a Senior Note
in fully registered form having a face amount equal to the Senior Note Initial Commitment Amount
and registered in the name of Credit Suisse AG, Cayman Islands Branch, in the Note Register. During each Senior Note Interest Period,
the Outstanding Senior Note Amount will accrue interest which will be calculated on a daily basis based on the Outstanding Senior
Note Amount and the Senior Note Applicable Interest Rate and accrued interest will be payable in arrears on each Payment Date.

 

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Certificates representing
such Senior Notes will be issued substantially in the form of Exhibit C and duly executed by the Issuer and authenticated by the
Collateral Administrator as described in clause (d) below.

 

The Issuer will redeem
the Senior Note on the Final Settlement Date at a redemption price equal to the Outstanding Senior Note Amount. All payments on
the Senior Note shall be subject to the Priority of Payments. All or a portion of the Outstanding Senior Note Amount of any Senior
Note may be prepaid at the discretion of the Issuer. If more than one Senior Note is outstanding at the time of a prepayment, such
prepayment will be allocated to each outstanding Senior Note pro rata based upon the Outstanding Senior Note Amount of such Senior
Note. Any prepayment of principal will reduce the Outstanding Senior Note Amount of the Senior Note to which such payments are
applied.

 

All or a portion of the
Outstanding Senior Note Amount may be transferred to a person that is either (i) a Qualified Institutional Buyer and a Qualified
Purchaser or (ii) a non-U.S. person (as defined in Regulation S under the Securities Act) that in each case is acquiring such Senior
Notes for its own account and provides a Transfer Certificate to the Note Registrar. Upon receipt by the Note Registrar of the
Transfer Certificate, the Note Registrar shall record the transfer in the Note Register with an Outstanding Senior Note equal to
the transferred principal amount. Any purported transfer in violation of the foregoing requirements shall be null and void ab
initio, and the Note Registrar shall not register any such purported transfer. For the avoidance of doubt, a transfer of an
interest in the Senior Note will not reduce the Senior Note Commitment Amount.

 

(c)          On
the Effective Date, the Issuer agrees to issue a Junior Note in uncertificated, fully registered form having a face amount equal
to the Junior Note Commitment Amount and registered in the name of Kohlberg Capital Corporation in the Note Register. The Junior
Note does not have a stated coupon but will receive, as interest, any Positive Carry not applied to reduce Losses as set forth
in the definition of Trading Loss. Certificates representing such Junior Notes will be issued only upon request of the Junior Noteholder
and, if issued, will be substantially in the form of Exhibit D and duly executed by the Issuer and authenticated by the Collateral
Administrator as described in clause (d) below.

 

Upon two Business Days
notice, the Issuer will issue additional Junior Notes (“Additional Junior Notes”) at the request of the Junior
Noteholder having a face amount equal to the amount of funds deposited by the Junior Noteholder into the Principal Account for
use as Available Funds on the following Payment Date. Certificates representing such Additional Junior Notes will be issued only
upon request of the Junior Noteholder and, if issued, will be substantially in the form of Exhibit D and duly executed by the Issuer
and authenticated by the Collateral Administrator as described in clause (d) below. The Additional Junior Notes will be registered
in the Note Register.

 

The Issuer shall redeem
the Junior Notes on the Final Settlement Date at the redemption price specified in the Priority of Payments. All payments on the
Junior Notes shall be subject to the Priority of Payments. At any time that the Outstanding Senior Note Amount equals zero, the
Outstanding Junior Note Amount may be prepaid at the discretion of the Portfolio Manager. The Junior Notes may not be transferred.

 

(d)          The
Issuer hereby appoints the Collateral Administrator as the “Authenticating Agent” to authenticate the Notes.
If a Certificate is issued with respect to a Note, no such Note will be entitled to any benefit under this Agreement or be valid
or obligatory for any purpose, unless there appears on the related Certificate, a certificate of authentication, substantially
in the form provided for in Exhibit C or D, as applicable, executed by the Authenticating Agent at the direction of the Issuer
by the manual signature of one of its authorized signatories, and such certificate of authentication upon any such Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder.

 

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(e)          The
Issuer shall cause to be kept the Note Register in which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for (i) the registration of Notes, (ii) the recording of any increases (pursuant to Section 2.2) or decreases
(as a result of principal payments) in the Outstanding Senior Note Amount, (iii) the recording of any increases (as a result of
the issuance of Additional Junior Notes) or decreases (as a result of principal payments) in the Outstanding Junior Note Amount
and (iv) the registration of any transfers of Senior Notes pursuant to Section 2.1(b). The Issuer hereby appoints the Bank
as the Note Registrar to maintain the Note Register.

 

(f)          On
the Effective Date, (i) each of the initial Senior Noteholder and Junior Noteholder hereby makes the representations, warranties,
acknowledgements and covenants set forth in Section 7.1(a) through (d), as applicable, (ii) the Issuer hereby makes the representations
and warranties set forth in Section 7.1(e) and (iii) the Portfolio Manager hereby makes the covenants set forth in Section
7.2.

 

(g)          Notwithstanding
anything in this Agreement or the Notes to the contrary, the Issuer and the Junior Noteholder agree for the benefit of the Senior
Noteholder that the Junior Note and the Issuer’s rights in and to the Collateral shall be subordinate and junior to the Senior
Notes to the extent and in the manner set forth in this Agreement including, without limitation, as set forth in the Priority of
Payments.

 

Section 2.2.          Credit
Extensions.

 

Subject to the terms and
conditions of this Agreement, the Issuer may draw upon the Senior Note Commitment Amount as follows. The Issuer may, in a Notice
of Borrowing delivered no later than two Business Days prior to the Draw Date request the Senior Commitment Party to make, and
the Senior Commitment Party shall make, one or more loans, subject to the terms of this Agreement; provided, that the aggregate
Outstanding Senior Note Amount (after giving effect to the request set forth in the Notice of Borrowing) will not exceed the amount
of the Senior Note Commitment Amount. Each loan will be funded by wire to the account specified on the Notice of Borrowing no later
than 10 a.m. (New York time) on the applicable Draw Date. Upon funding, the Note Registrar will record a corresponding increase
in the Outstanding Senior Note Amount of the Senior Note registered in the name of the Senior Commitment Party or, if no Senior
Note is registered in the name of the Senior Commitment Party at that time, will register in the Note Register a new uncertificated
Senior Note in the name of CS with an Outstanding Senior Amount equal to the amount of such funding.

 

Section 2.3.          Conditions
Precedent to Credit Extensions.

 

(a)          The
obligation of the Senior Commitment Party to make a loan hereunder shall be subject to the following conditions precedent:

 

(i)          the
aggregate amount requested for funding by the Senior Commitment Party (such amount, the “Senior Note Required Draw Down
Amount”) does not exceed the amount the Portfolio Manager reasonably expects will be required to purchase all Collateral
Debt Obligations that the Issuer has entered into commitments to purchase (but which have not yet settled);

 

(ii)         the
Senior Note Required Draw Down Amount does not exceed the Senior Note Commitment Amount;

 

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(iii)        the
Notice of Borrowing includes a certification by the Portfolio Manager that the Conditions of Accumulation have been satisfied with
respect to the purchased (but unsettled) Collateral Debt Obligations to which the proceeds of the borrowing will be applied; and

 

(iv)        the
Draw Date is at least two Business Days following the date on which the Notice of Borrowing is delivered to the Senior Commitment
Party.

 

Section 2.4.          Conditions
of Accumulation.

 

The Issuer may purchase
a Collateral Debt Obligation as directed by the Portfolio Manager, so long as the following conditions are satisfied as of the
date of the commitment to purchase such Collateral Debt Obligation (the “Conditions of Accumulation”):

 

(a)          a
certification (a trade confirmation delivered to the Collateral Administrator will be deemed to be such certification) from the
Portfolio Manager that the Collateral Debt Obligation satisfies the Eligibility Criteria and that such purchase will not result
in a violation of the Tax Operating Guidelines;

 

(b)          the
Arranger has given its approval in writing to the Issuer for a purchase of such Collateral Debt Obligation within the last 30 days
and has not withdrawn such approval; and

 

(c)          no
Termination Event has occurred.

 

ARTICLE III

COLLATERAL DEBT OBLIGATIONS

 

Section 3.1.          Purchases
and Sales.

 

This Section 3.1 shall
apply to all purchases and to sales other than sales pursuant to Section 3.2.

 

(a)          The
Issuer will purchase and sell Collateral Debt Obligations upon the instruction of the Portfolio Manager and approval of the Senior
Commitment Party; provided that after giving effect to such purchase, the Concentration Limits are satisfied. The Senior
Commitment Party will, in its sole discretion, approve or decline to approve the purchase or sale of any Collateral Debt Obligation.

 

(b)          The
Portfolio Manager will select Collateral Debt Obligations for acquisition or disposition, subject to the Eligibility Criteria set
forth in Annex I.

 

(c)          The
Issuer will sell any Defaulted Collateral Debt Obligation within five Business Days of becoming aware that such Collateral Debt
Obligation has become a Defaulted Collateral Debt Obligation, subject to approval of the Senior Commitment Party.

 

(d)          The
Issuer may sell any Collateral Debt Obligation at any time that the Gross Loss Amount exceeds 40% of the Outstanding Junior Note
Amount, subject to approval of the Senior Commitment Party.

 

(e)          During
the Reinvestment Period, the Issuer, at the discretion of the Portfolio Manager, will reinvest the proceeds of any prepayment or
sale of Collateral Debt Obligations, subject to the Conditions of Accumulation. After the Reinvestment Period, no reinvestment
will be permitted.

 

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(f)          Except
as provided in clause (e), the proceeds of any sale of Collateral Debt Obligations will be deposited in the Principal Account and
will be Available Funds on the next Payment Date unless the Senior Commitment Party agrees otherwise.

 

Section 3.2.          Liquidation.

 

(a)          Upon
a Liquidation Event, the Issuer will liquidate Collateral Debt Obligations as follows. The Issuer at the direction of the Arranger,
will promptly (and in any case within five Business Days) either liquidate or instruct the Portfolio Manager to liquidate all of
the Collateral Debt Obligations held by the Issuer based on the highest bid prices received by the Arranger (which bid may, in
compliance with Article 9 of the UCC, be from the Arranger or a Portfolio Manager Party) for each Collateral Debt Obligation. Notwithstanding
the foregoing, the Senior Commitment Party will have approval rights on all sales and sales prices if the aggregate sales are not
expected to be sufficient to repay the Outstanding Senior Note Amount and all accrued and unpaid interest on the Senior Note in
the sole determination of the Arranger.

 

If the Refinancing Date
has occurred, and there are any Collateral Debt Obligations that will not be pledged by the Issuer as collateral to secure the
Refinancing Transaction, such Collateral Debt Obligations will be liquidated as set forth in the first paragraph of this Section
3.2(a), but in no event will such liquidation occur after the Final Settlement Date.

 

(b)          Upon
a Termination Event, the Arranger will promptly notify the Issuer, the Senior Commitment Party, the Portfolio Manager and the Bank,
in its capacities as Collateral Administrator and Collateral Agent.

 

(c)          On
the Maturity Date (other than where the occurrence of the Maturity Date is due to a Termination Event), one or more Portfolio Manager
Parties may purchase all (but not less than all) of the Collateral Debt Obligations in full for their own account within a five
Business Day period provided that as a result of such purchase the Senior Notes would be redeemed in full and all amounts senior
to the Senior Notes under the Priority of Payments would be paid in full.

 

Section 3.3.          Tax
Operating Guidelines.

 

The Issuer (and the Portfolio
Manager on its behalf) shall comply with the Tax Operating Guidelines at all times during the Loan Facility Period.

 

ARTICLE IV

PRIORITY OF PAYMENTS

 

Section 4.1.          Priority
of Payments.

 

Funds will be distributed
in accordance with the following payment priorities (collectively, the “Priority of Payments”):

 

(a)          On
each Payment Date (other than as provided in Section 4.1(b)), Available Funds, in the following order of priority:

 

(i)          to
the payment of any accrued and unpaid taxes, costs and expenses of the Issuer relating to this Agreement or the Collateral Administration
Agreement (including any indemnities payable by the Issuer);

 

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(ii)         to
the Senior Noteholder, the Senior Note Interest due and payable on the Senior Notes;

 

(iii)        to
the Senior Noteholder, to the payment of the Senior Note Quarterly Partial Redemption Amount;

 

(iv)        to
the Senior Noteholder, to the payment of principal on the Senior Notes (A) unless a Failure to Pay has occurred, at the discretion
of the Portfolio Manager, an amount equal to the lesser of (x) the amount designated by the Portfolio Manager and (y) funds in
the Principal Account or (B) if a Failure to Pay has occurred, all funds in the Interest Account, the Principal Account and the
CLO Asset Management Fees Account, in each case until the Outstanding Senior Note Amount has been reduced to zero;

 

(v)         to
the Junior Noteholder, the Positive Carry due and payable to the Junior Notes (to the extent not applied to offset Trading Losses);
and

 

(vi)        all
remaining Available Funds will be retained by the Issuer.

 

(b)          If
the Refinancing Date or the Liquidation Date occurs, on the Final Settlement Date, Available Funds and, until the Outstanding Senior
Note Amount has been reduced to zero, the CLO Asset Management Fees, in the following order of priority:

 

(i)          to
the payment of any taxes, costs and expenses of the Issuer relating to this Agreement or the Collateral Administration Agreement
accrued and unpaid as of such date (including any indemnities payable by the Issuer);

 

(ii)         to
the Senior Noteholder, the Senior Note Interest due and payable on the Senior Notes;

 

(iii)        to
the Senior Noteholder, the Outstanding Senior Note Amount as the redemption price of the Senior Notes;

 

(iv)        to
the Junior Noteholder, the Positive Carry due and payable to the Junior Notes (which amount will be determined after giving effect
to the offset of Losses pursuant to the definition of Trading Loss);

 

(v)         to
the Junior Noteholder, the Outstanding Junior Note Amount (reduced by the sum of all remaining Trading Losses) as the redemption
price of the Junior Notes; and

 

(vi)        to
the Junior Noteholder, all remaining proceeds.

 

Section 4.2.          Loan
Facility Interest.

 

To the extent that there
is accrued and unpaid Loan Facility Interest on (a) the Refinancing Date, such amounts will be paid from the proceeds of the Refinancing
Transaction, or (b) the Final Settlement Date after a Liquidation Event occurs, the Arranger will direct the Collateral Administrator
to distribute such amounts no later than the next Business Day after their receipt from the Collateral Administrator in accordance
with Section 4.1 (b).

 

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ARTICLE V

NOTICES

 

Section 5.1.          Notices.

 

Except
as otherwise expressly provided herein, any request, demand, authorization, direction, notice, consent or waiver or other
documents provided or permitted by this Agreement to be made upon, given or furnished to, or filed with any
of the parties indicated below shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to
and mailed, by certified mail, return receipt requested, hand delivered, sent by overnight courier service guaranteeing next day
delivery or by facsimile in legible form or by electronic mail with delivery confirmed at the address set forth on Schedule 1 (or
at any other address provided in writing by the relevant party).

 

ARTICLE VI

REPORTING; CONFIDENTIALITY

 

Section 6.1.          Reporting.

 

(a)          On
each Business Day during the Loan Facility Period, the Collateral Administrator shall provide to the Senior Commitment Party, the
Arranger and the Portfolio Manager a Collateral Report with the information set forth in paragraph (a) of the Content of Collateral
Reports on Exhibit A. As soon as practicable after the last Business Day of each month, the Collateral Administrator shall provide
to the Senior Commitment Party, the Arranger and the Portfolio Manager a Collateral Report with the information set forth in paragraph
(b) of the Content of Collateral Reports on Exhibit A.

 

(b)          Not
later than the third Business Day prior to the Final Settlement Date (provided that the Collateral Administrator has been
given notice of such Final Settlement Date at least four Business Days prior to the occurrence thereof), the Collateral Administrator
shall provide the Senior Commitment Party, the Arranger and the Portfolio Manager a draft of a final report with a calculation
in reasonable detail specifying the information set forth in paragraph (c) of the Content of Collateral Reports on Exhibit A. The
Collateral Administrator shall provide the Senior Commitment Party, the Arranger and the Portfolio Manager, in addition to the
Collateral Reports, on the Final Settlement Date, the final version of such final report as approved by the Senior Commitment Party
and the Portfolio Manager prior to any distributions on that date.

 

Each of the Senior Commitment
Party, the Arranger and the Portfolio Manager agrees and acknowledges that failure of the Collateral Administrator to give any
information hereunder (including Collateral Reports) or any defect therein, shall not impair or affect the obligations of such
parties hereunder (including under Article III and Article IV).

 

Each of the Senior Commitment
Party, the Arranger and the Portfolio Manager agrees and acknowledges that certain material delivered hereunder may be provided
by third parties and is intended for informational purposes only and has not been independently verified by the Collateral Administrator
or any of their respective affiliates.

 

Section 6.2.          Confidentiality.

 

(a)          The
parties hereto agree that the terms and substance of this Agreement and any term sheet setting forth the terms embodied herein
shall be kept confidential and shall not be disclosed, directly or indirectly, to any other person except on a need-to-know basis
to the respective employees, directors, auditors, accountants, counsel and other advisors of the parties hereto that are directly
involved in the considerations of the matters set forth herein and to the extent required or compelled in a judicial or administrative
proceeding or as otherwise required by relevant law or relevant regulatory authority, including without limitation, U.S. federal
securities laws, rules or regulations.

 

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(b)          The
Junior Noteholder agrees to maintain the confidentiality of any information relating to the Collateral Debt Obligations that it
may obtain from any Credit Suisse Party, and to the extent that any such information is subject to a confidentiality agreement,
the Junior Noteholder will be deemed to have executed such agreement as of the date it receives confidential information.

 

ARTICLE VII

REPRESENTATIONS; COVENANTS 

 

Section 7.1.          Representations
of the Parties.

 

(a)          Each
of the Junior Noteholder and CS (in its capacities as initial Senior Noteholder and Senior Commitment Party) represents and warrants
to the other that:

 

(i)          it
is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized;

 

(ii)         it
has full power and authority and has taken all action necessary to execute and deliver this Agreement and to fulfill its obligations
hereunder and to consummate the transactions hereby;

 

(iii)        the
making and performance by it of this Agreement does not and will not violate any law or regulation of the jurisdiction under which
it exists, any other law or regulation applicable to it, any other agreement to which it is a party or by which it is bound or
to which any of its assets is subject, or any provisions of its charter or by-laws;

 

(iv)        this
Agreement has been duly executed and delivered by it and, when duly executed by the other party, constitutes the legal, valid and
binding obligation, enforceable against it in accordance with its terms (except to the extent that the enforceability thereof may
be limited by bankruptcy, insolvency or other similar laws of general applicability affecting the enforcement of creditors’
rights generally and by a court’s discretion in relation to equitable remedies);

 

(v)         all
approvals, authorizations and other actions by, or filings with, any governmental authority necessary for, the validity or enforceability
of its obligations under this Agreement have been obtained; and

 

(vi)        it
is not, nor shall it be deemed to be, a fiduciary of, or otherwise have a trust relationship with, any other party in connection
with this Agreement or any transaction contemplated herein and, except as expressly set forth herein, shall have no obligation,
duty or responsibility to such other party.

 

(b)          Each
of the Junior Noteholder and the Senior Commitment Party represents and warrants as of the date of this Agreement and as of each
Draw Date and the initial Senior Noteholder represents and warrants as of the date of this Agreement, in each case to the Issuer
and to each Credit Suisse Party that:

 

(i)          it
is a Qualified Institutional Buyer that is also a Qualified Purchaser and is acquiring the Notes for its own account;

 

    	17

    	 

    

 

(ii)         it
understands that: (A) subject to the terms of this Agreement, proceeds from the issuance of the Notes will be invested in Collateral
Debt Obligations; (B) if the Collateral is liquidated pursuant to this Agreement, such liquidation may take place under market
conditions that are not advantageous to the Issuer, and as a result of any such liquidation, the Noteholders may suffer a loss,
which loss could equal its entire investment in the applicable Notes; (C) all payments to the Junior Noteholder are subordinate
to payments to the Senior Noteholder pursuant to the Priority of Payments and (D) all payments to it and any payments upon redemption
of the Notes are subordinated to all other obligations of the Issuer, and will be payable only in accordance with the Priority
of Payments to the extent the Issuer has sufficient Available Funds;

 

(iii)        it
has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its
investment in the Collateral Debt Obligations and is able to bear the economic risk of such investment;

 

(iv)        it
understands that an investment in the Collateral Debt Obligations involves certain risks, including the risk that a Refinancing
Transaction will not be completed and the risk of loss of all or a substantial part of its investment; and it has had access to
such financial and other information concerning the Issuer, the Portfolio Manager, the Collateral Debt Obligations and the credit
markets as it deemed necessary or appropriate in order to make an informed decision with respect to its entering into this Agreement;

 

(v)         it
has made its own independent investigation in connection with its decision to purchase Notes and is not relying on any advice,
counsel or representations (whether written or oral) of the Issuer, any Credit Suisse Party (in the case of the Junior Noteholder),
any Portfolio Manager Party (in the case of the Senior Commitment Party and initial Senior Noteholder) or any other person in connection
therewith;

 

(vi)        it
is not a member of the public in the Cayman Islands;

 

(vii)       it
is not purchasing the Notes with a view to the resale, distribution or other disposition thereof in violation of the Securities
Act.

 

(viii)      with
respect to the Junior Noteholder only, the funds that it is using or will use to fund any Junior Notes are not assets of a person
who is or at any time prior to the Maturity Date will be (A) an “employee benefit plan” as defined in Section
3(3) of ERISA, subject to Title I of ERISA, (B) a “plan” described in Section 4975(e)(1) of the Code to which
Section 4975 of the Code applies or (C) an entity whose underlying assets could be deemed to include “plan assets”
by reason of an employee benefit plan’s or a plan’s investment in the entity within the meaning of 29 C.F.R. Section
2510.3-101 (as modified by Section 3(42) of ERISA) or otherwise;

 

(ix)         in
the case of the Senior Commitment Party and the initial Senior Noteholder, it understands that the Senior Notes are not transferable
except to a transferee that makes all of the representations and warranties contained in a Transfer Certificate or following receipt
by the Issuer of an opinion of nationally recognized counsel acceptable to the Issuer to the effect that, following such transfer,
the Senior Notes will continue to be exempt from the registration requirements of the Securities Act and that neither the Issuer
nor the pool of assets owned by the Issuer will be required to register as an investment company under the Investment Company Act;
and

 

    	18

    	 

    

 

(x)          in
the case of the Junior Noteholder, it understands that the Junior Notes may not be transferred.

 

(c)          The
Junior Noteholder represents and warrants to the Issuer and each Credit Suisse Party, and CS (in its capacities as Senior Commitment
Party and initial Senior Noteholder) represents and warrants to the Issuer, as of the date of this Agreement and as of each Draw
Date that:

 

(i)          no
Credit Suisse Party has given the Junior Noteholder, and no Portfolio Manager Party has given CS (directly or indirectly through
any other person) any assurance, guarantee or representation whatsoever as to the expected or projected success, profitability,
return, performance, result, effect, consequence or benefit (including legal, regulatory, tax, financial, accounting or otherwise)
of the Notes;

 

(ii)         it
acknowledges that, other than as expressly set forth herein, it has no rights or recourse with respect to the Collateral Debt Obligations
or against any Credit Suisse Party, the Portfolio Manager or the Issuer;

 

(iii)        sales
of Collateral Debt Obligations may result in Trading Losses that may reduce the amount payable on the Notes under the Priority
of Payments;

 

(iv)        in
the case of the Junior Noteholder, none of the Credit Suisse Parties has a fiduciary, advisory or agency relationship with the
Junior Noteholder or its affiliates in respect of any of the transactions contemplated by this Agreement, irrespective of whether
any Credit Suisse Party has advised or is advising the Junior Noteholder (or its affiliates) on other matters and it waives, to
the fullest extent permitted by law, any claims it may have against the Credit Suisse Parties for breach of fiduciary duty or alleged
breach of fiduciary duty in respect of any of the transactions contemplated by this Agreement and agrees that the Credit Suisse
Parties shall have no liability (whether direct or indirect) to the Junior Noteholder (or its affiliates) in respect of any such
fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Junior Noteholder (or its
affiliates), including directors, partners, equity holders, employees or creditors of the Junior Noteholder (or its affiliates);

 

(v)         in
the case of each Credit Suisse Party, the Portfolio Manager does not have a fiduciary, advisory or agency relationship with any
Credit Suisse Party in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Portfolio
Manager has advised or is advising any Credit Suisse Party on other matters and it waives, to the fullest extent permitted by law,
any claims it may have against the Portfolio Manager for breach of fiduciary duty or alleged breach of fiduciary duty in respect
of any of the transactions contemplated by this Agreement and agrees that the Portfolio Manager shall have no liability (whether
direct or indirect) to any Credit Suisse Party in respect of any such fiduciary duty claim or to any person asserting a fiduciary
duty claim on behalf of or in right of any Credit Suisse Party, including directors, partners, equity holders, employees or creditors
of any Credit Suisse Party;

 

(vi)        in
the case of the Junior Noteholder, it has been advised that the Credit Suisse Parties are engaged in a broad range of transactions
which may involve interests that differ from those of the Junior Noteholder (or its affiliates) and agrees that the Credit Suisse
Parties have no obligation to disclose such interests and transactions to the Junior Noteholder (or its affiliates) by virtue of
any fiduciary, advisory or agency relationship or otherwise; and

 

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(vii)       in
the case of each Credit Suisse Party, it has been advised that the Portfolio Manager is engaged in a broad range of transactions
which may involve interests that differ from those of any Credit Suisse Party and agrees that the Portfolio Manager has no obligation
to disclose such interests and transactions to any Credit Suisse Party by virtue of any fiduciary, advisory or agency relationship
or otherwise.

 

(d)          The
Junior Noteholder represents and warrants to each Credit Suisse Party as of the date of this Agreement and as of each Draw Date
that:

 

(i)          the
Senior Commitment Party may, in its sole discretion, decline to purchase or finance any Collateral Debt Obligations selected by
the Portfolio Manager, and will be free, in its sole discretion, to follow or decline to follow any recommendations made by the
Portfolio Manager, the Junior Noteholder or any other entity with respect to the Collateral Debt Obligations;

 

(ii)         the
Credit Suisse Parties are full service securities firms engaged in securities trading and brokerage activities, as well as the
provision of investment banking and structuring services. In the ordinary course of their business, the Credit Suisse Parties may
from time to time effect transactions for their own accounts or for the accounts of customers, and underwrite, act as placement
agent for or hold positions in, securities or options on securities of the Portfolio Manager, its affiliates and obligors of the
Collateral Debt Obligations, may act as selling institution with respect to participations that are Collateral Debt Obligations
and may sell certain Collateral Debt Obligations to the Issuer;

 

(e)          The
Issuer represents to each Credit Suisse Party, the Junior Noteholder and the Bank as of the date of this Agreement and as of each
Draw Date that:

 

(i)          It
(A) has not incurred any material liability or contingent obligation except under this Agreement and the Collateral Administration
Agreement and as may be satisfied or terminated as of the date hereof and (B) has no subsidiaries. The Issuer has issued no shares
or other equity interests other than its ordinary shares and no securities other than the Senior Notes and Junior Notes. All payments
that the Issuer may make in respect of debt other than the Senior Notes or the Junior Notes hereunder are expressly subordinated
to the Senior Notes and the Junior Notes hereunder.

 

(ii)         It
is the sole owner of and has full power, authority and legal right to pledge and transfer all assets pledged by it hereunder free
and clear of, and such pledge and transfer will not create, any lien thereon (other than the lien created by this Agreement), and
upon filing of a financing statement under the Uniform Commercial Code with the Recorder of Deeds of the District of Columbia with
respect thereto naming the Issuer as debtor and the Collateral Agent as secured party, the Collateral Agent will have a first priority
perfected security interest in such assets. The Issuer acquired ownership of such assets for value in good faith without notice
of any adverse claim and has not assigned, pledged or otherwise encumbered any interest in such assets other than hereunder.

 

(iii)        Its
full and correct legal name as of the date hereof is as set forth in the preamble hereof. It is an exempted limited liability company
incorporated under the laws of the Cayman Islands. Its location (as defined in Section 9-307 of the Uniform Commercial Code), place
of business and chief executive office is: P.O. Box 1093, Boundary Hall, Cricket Square, Grand Cayman, KY1-1102, Cayman Islands.

 

    	20

    	 

    

 

Section 7.2.          Covenants
of the Portfolio Manager.

 

(a)          The
Portfolio Manager agrees that a Portfolio Manager Breach shall be deemed to have occurred unless on or before March 15, 2012, the
Portfolio Manager:

 

(i)          has
completed the acquisition of the rights to receive the CLO Asset Management Fees;

 

(ii)         has
an unencumbered right to grant a security interest in such CLO Asset Management Fees to the Issuer;

 

(iii)        has
granted to the Issuer a security interest in the CLO Asset Management Fees, which security interest is perfected and senior to
the rights of any creditor of the Portfolio Manager other than the Issuer; and

 

(iv)        has
arranged for the CLO Asset Management Fees to be paid to the CLO Asset Management Fees Account until such time as the Outstanding
Senior Note Amount has been reduced to zero and has taken such other measures as the Issuer may reasonably request for the perfection
of such security interest.

 

(b)          Upon
the occurrence of a Portfolio Manager Breach, the Portfolio Manager will promptly notify the Issuer, the Senior Commitment Party,
the Arranger and the Bank, in its capacities as Collateral Administrator and Collateral Agent.

 

Section 7.3.          Covenants
of the Issuer.

 

(a)          At
least one of the directors of the Issuer will be a person who (i) does not have and is not committed to acquire any material direct
or indirect financial interest in the Issuer or in an portfolio manager of the foregoing, and (ii) is not connected with the Issuer
or the portfolio manager of the Issuer as an officer, employee, promoter, underwriter, voting trustee, partner, director (except
as in the capacity of an independent director) or person performing similar functions.

 

(b)          The
Issuer will not enter into any agreements that provide for a future financial obligation on the part of the Issuer, except for
any agreements that contain customary “no petition” and limited recourse provisions or where a reserve has been established
solely for the payment such future financial obligations.

 

(c)          The
Issuer will at all times:

 

(i)          maintain
its books, accounting records and other corporate documents and records separate from those of its affiliates or any other entity;

 

(ii)         not
commingle its assets with those of any affiliate or any other entity, and not hold itself out as being liable for the debts of
another;

 

(iii)        maintain
its books of account separate from those of any affiliate;

 

(iv)        act
solely in its corporate name and through its own authorised Directors, officers and agents (including attorneys-in-fact appointed
for and on behalf of the Issuer);

 

(v)         not
send out any correspondence or any written communication in the name of the Issuer on the letterhead of any affiliate or other
entity;

 

    	21

    	 

    

 

(vi)        separately
manage its liabilities from those of any of its affiliates and pay its own liabilities from its own separate assets;

 

(vii)       pay
from its assets all obligations and indebtedness of any kind incurred by the Issuer;

 

(viii)      operate
in such a manner that it would not be substantively consolidated with any other entity

 

(ix)         maintain
an arm’s-length relationship with its affiliates;

 

(x)          not
acquire any obligations, securities of any partner, member or shareholder;

 

(xi)         not
pledge its assets for the benefit of any other entity or make any loans or advances to any entity (except as provided in the transaction
documents);

 

(xii)        maintain
separate financial statements, if any;

 

(xiii)       hold
itself out as a separate entity;

 

(xiv)      correct
any known misunderstanding regarding its separate identity;

 

(xv)       maintain
adequate capital in light of its contemplated business operations; and

 

(xvi)      not
engage in any business or activity other than as permitted in this Agreement (or incidental thereto), or with the consent of the
Senior Commitment Party.

 

(d)          The
Issuer will abide by all corporate formalities, including the maintenance of current minute books, and the Issuer will keep books
and records in a manner that indicates the separate existence of the Issuer and its assets and liabilities.

 

(e)          The
Issuer will not assume the liabilities of any other, and will not guarantee the liabilities of any other.

 

(f)          The
officers of the Issuer and the Directors will make decisions with respect to the business and daily operations of the Issuer independent
of and not dictated by any affiliate of the Issuer.

 

(g)          The
Issuer will not have any employees (other than its directors).

 

(h)          The
Issuer will not establish any subsidiaries without consent of the Senior Commitment Party except to the extent such subsidiary
is established to prevent the Issuer from being subject to withholding taxes or from being engaged, or deemed to be engaged, in
the conduct of a trade or business in the United States for U.S. federal income tax purposes or otherwise subject to tax on a net
basis in any jurisdiction. Any subsidiary of the Issuer will be subject to restrictions and limitations comparable to those set
forth herein, including those set forth in this Section 7.3.

 

    	22

    	 

    

 

ARTICLE VIII

THE COLLATERAL

 

Section
8.1.          Collateral.

 

(a)          As
collateral security for the performance of its obligations hereunder, the Portfolio
Manager hereby (i) pledges to the Issuer and grants to the Issuer a security interest in all of the Portfolio Manager’s
right, title and interest in, to and under the CLO Asset Management Fees and all proceeds of the foregoing, in each case whether
now owned or hereafter acquired and whether now existing or hereafter coming into existence and (ii) acknowledges and agrees that
the Issuer will pledge its rights therein to the Collateral Agent as provided in Section 8.1(b).

 

(b)          As
collateral security for the prompt payment in full and performance when due (whether at stated maturity, by acceleration, by liquidation
or otherwise) of the Secured Obligations to the Collateral Agent on behalf of the Secured
Parties in accordance with the Priority of Payments, the Issuer hereby pledges to the Collateral Agent and grants to the Secured
Parties a security interest in all of the Issuer’s right, title and interest in, to and under (i) each Collateral Debt
Obligation, (ii) all underlying instruments with respect to Collateral Debt Obligations, (iii) the Collateral Administration
Agreement, (iv) the Administration Agreement by and between the Issuer and MaplesFS Limited, as amended
from time to time in accordance with its terms, (v) the Registered Office Agreement dated
as of September 26, 2011 by and between the Issuer and MaplesFS Limited, as amended from time to time in accordance with its terms,
(vi) each Account and all assets credited to and funds on deposit therein, (vii) the CLO Asset Management Fees
and (viii) all proceeds of the foregoing, in each case whether now owned or hereafter acquired and whether now existing or
hereafter coming into existence, other than Excepted Property (collectively, the “Collateral”).

 

(c)          The
Issuer will:

 

(i)          Deliver
to the Collateral Administrator any and all securities and instruments evidencing or otherwise relating to Collateral, endorsed
and/or accompanied by such instruments of assignment and transfer in such form and substance as the Secured Parties may reasonably
request, including by taking all steps necessary to ensure that all Collateral Debt Obligations are credited to the applicable
Account and the CLO Asset Management Fees are credited to the CLO Asset Management Fees Account by the Collateral Administrator
and held in accordance with the Collateral Administration Agreement;

 

(ii)         give,
execute, deliver, file and/or record any financing statement, notice, instrument, document, agreement or other papers that may
be necessary or desirable (in the reasonable judgment of either Secured Party) to create, preserve, perfect or validate the security
interest granted hereunder or to enable the Senior Noteholder to exercise and enforce its rights hereunder with respect to such
pledge and security interest;

 

(iii)        promptly
furnish or cause to be furnished to the Senior Noteholder or Junior Noteholder any information that it may reasonably request concerning
the Collateral; and

 

(iv)        preserve
and protect (with respect to the Collateral) the Secured Parties’ perfected, first priority security interest in the Collateral,
and take or cause any action requested by a Secured Party and necessary to preserve, defend, protect or perfect such first priority
security interest.

 

    	23

    	 

    

 

(d)          Except
as expressly permitted hereunder and under the Collateral Administration Agreement, the Portfolio Manager (with respect to the
CLO Asset Management Fees) and the Issuer (with respect to the Collateral) will not sell, assign, pledge, grant any security interest
in, exchange, transfer, hypothecate or otherwise dispose of or grant any option with respect to such CLO Asset Management Fees
or Collateral, respectively, or agree to do any of the foregoing, without the prior written consent of Senior Commitment Party.

 

(e)          The
Secured Parties hereby appoint the Bank as “Collateral Agent” to act on their behalf in accordance with this
Agreement. If a Liquidation Event occurs, the liquidation shall be effected as set forth in Section 3.2. The Bank in each of its
capacities under this Agreement shall have the same indemnities and immunities provided to the Bank as Collateral Administrator
under the Collateral Administration Agreement. In connection with a resignation of the Bank as Collateral Administrator, the Bank
may resign from its other capacities pursuant to this Agreement.

 

(f)          The
Issuer hereby irrevocably appoints the Collateral Agent as its attorney-in-fact with full power of substitution and authorizes
the Collateral Agent to take any action and execute any instruments with respect to the Collateral that the Controlling Party may
deem necessary or advisable in connection with (i) the Issuer’s grant of a security interest in the Collateral to the Secured
Parties and any rights and remedies that the Collateral Agent may exercise in respect thereof upon the occurrence a Liquidation
Event, (ii) the filing of one or more financing or continuation statements with respect to the Collateral, (iii) the sale, termination
or other disposition of any Collateral Debt Obligations as provided herein or (iv) accomplishing any other purposes of this Agreement.
The Issuer agrees that the powers granted by this paragraph are exercisable at the direction of the Controlling Party and are not
intended to impose the obligations of Issuer on the Collateral Agent. This power of attorney shall be binding upon, and enforceable
against, all beneficiaries, successors, assigns, transferees and legal representatives of the Issuer.

 

(g)          The
security interest granted to secure the Secured Obligations hereunder shall be terminated and released and all rights in the Collateral
will revert to the Issuer on the Refinancing Date upon application of the Available Funds in accordance with the Priority of Payments.
In connection with such termination and release, the Collateral Agent shall execute and deliver such documents, instruments and
certificates as the Issuer shall reasonably require at the Issuer’s expense.

 

ARTICLE IX

PORTFOLIO MANAGER

 

Section 9.1.          Portfolio
Manager.

 

(a)          The
Issuer hereby appoints the Portfolio Manager to be the Issuer’s portfolio manager for purposes of the transactions contemplated
by this Agreement for so long as this Agreement shall be in effect, and the Portfolio Manager hereby accepts such appointment.
Such appointment shall terminate automatically (x) upon the execution of an investment management agreement among the Issuer, the
Portfolio Manager and any other third parties on the Refinancing Date or (y) if a Liquidation Event occurs, on the Final Settlement
Date. Pursuant to this Agreement, the Portfolio Manager shall provide the following services to the Issuer: selecting, supervising,
managing, monitoring and directing on behalf of the Issuer the investment, reinvestment and disposition of Collateral Debt Obligations
and assisting the Issuer in fulfilling its obligations, and exercising the rights and obtaining the benefits to which it is entitled,
hereunder and under and in connection with Collateral Debt Obligations. Without limiting the foregoing:

 

    	24

    	 

    

 

(i)          the
Portfolio Manager shall, except as otherwise expressly required hereunder, perform its obligations hereunder with reasonable care
and in a manner that the Portfolio Manager reasonably believes is consistent with those policies and procedures as are customarily
used by institutional managers of recognized standing in connection with the management of assets of the nature and the character
of the Collateral Debt Obligations (and to the extent not inconsistent with the foregoing, the Portfolio Manager shall follow its
customary standards, policies and procedures in performing its duties hereunder);

 

(ii)         the
Portfolio Manager shall exercise reasonable care to avoid taking any action that would (i) not be permitted under the organizational
documents of the Issuer, (ii) cause the Issuer to violate any law, rule or regulation of any governmental body or agency having
jurisdiction over the Issuer, (iii) require registration of the Issuer as an “investment company” under the Investment
Company Act, (iv) cause the Issuer to be engaged in a trade or business in the United States, or (v) cause the Issuer to violate
the terms hereof;

 

(iii)        the
Portfolio Manager shall comply in all material respects with all laws and regulations applicable to it in connection with the performance
of its duties hereunder; and

 

(iv)        to
the extent it is necessary or appropriate in the judgment of the Portfolio Manager to perform any services to be performed by it
as portfolio manager hereunder and in connection with any related documents and Collateral Debt Obligations, the Portfolio Manager
shall have the power to execute and deliver documents and instruments and take actions in the name of or on behalf of the Issuer
with respect thereto (and the Issuer agrees to follow the lawful instructions and directions of the Portfolio Manager in performing
its services hereunder).

 

(b)          The
Portfolio Manager assumes no responsibility or liability hereunder other than to render the services required to be performed hereunder
in good faith and (subject to the standard of conduct described in above) shall not be responsible for and shall have no liability
for any action or inaction of the Issuer, the Arranger, the Senior Commitment Party, the Collateral Administrator or any other
person in following or declining to follow any advice, recommendation or direction of the Portfolio Manager. None of the Portfolio
Manager, its affiliates and any of their respective members, managers, directors, officers, stockholders, agents, partners or employees
shall be liable to the Issuer, the Lender or any other person for any expenses, losses, claims, damages, judgments, assessments,
charges, demands, costs or other liabilities (collectively, “Liabilities”) incurred by the Issuer, the Lender
or such other person that arise out of or in connection with the performance by the Portfolio Manager of the services required
to be performed hereunder or for any decrease in the value of the Collateral Debt Obligations, except for Liabilities arising from
(i) a failure of the Portfolio Manager to adhere to the standards of conduct described in clause (a) above or (ii) a failure of
the Portfolio Manager to render the services required to be performed hereunder in good faith.

 

(c)          The
Portfolio Manager shall devote such part of its time as is reasonably needed for the performance of the services contemplated by
this Agreement; provided that this Agreement shall not prevent the Portfolio Manager from rendering similar services to
other persons. Nothing in this Agreement shall limit or restrict the Portfolio Manager or any of its officers, affiliates or employees
from, as permitted by law, buying, selling or trading in any securities for its own or their own accounts. The Arranger, CS and
the Issuer acknowledge that the Portfolio Manager and its officers, affiliates and employees, and the Portfolio Manager’s
other clients may as permitted by law at any time have, acquire, increase, decrease, or dispose of positions in investments which
are at the same time being acquired or disposed of by the Issuer.

 

    	25

    	 

    

 

(d)          The
Portfolio Manager shall not purchase any Collateral Debt Obligation for inclusion in the Collateral directly from itself or any
of its affiliates as principal or any account or portfolio for which Portfolio Manager or any of its affiliates serve as investment
advisor, or sell directly any Collateral Debt Obligation to itself or any of its affiliates as principal or any account or portfolio
for which the Portfolio Manager or any of its affiliates serve as investment advisor, unless the Portfolio Manager shall have certified
to the Issuer with respect to each such transaction that (i) such transaction is exempt from the prohibited transaction rules of
ERISA and the Code, if applicable, and will be consummated on terms prevailing in the market, (ii) the terms of such transaction
are substantially as advantageous to the Issuer as the terms the Issuer would obtain in a comparable arm’s length transaction
with a non-affiliate and (iii) such transaction complies with the Advisers Act, to the extent applicable. In accordance with
the foregoing, the Portfolio Manager may effect client cross-transactions where the Portfolio Manager causes a transaction to be
effected between the Issuer and another fund or another account managed or advised by it or one or more of its affiliates, but
neither it nor the affiliate will receive any commission or similar fee in connection with such cross-transaction.

 

(e)          
The Portfolio Manager is responsible for the investment decisions made on behalf of other advisory clients, including certain discretionary
accounts. The Portfolio Manager may determine that the Issuer and one or more other clients should purchase or sell the same loans
at the same time. In addition, from time to time, the Portfolio Manager may aggregate purchase or sale orders for loans in the
secondary market for clients. In either case, the Portfolio Manager will follow its customary practices and policies. Under some
circumstances, such aggregation or allocation may adversely affect the Issuer with respect to the price or size or the loan positions
obtainable or salable. Moreover, it is possible, due to differing investment objectives or other reasons, that the Portfolio Manager
or its affiliates may purchase loans of an issuer for one client and sell such loans for another client, including the Issuer.
Therefore, the Issuer may not participate in gains or losses that were experienced by other client accounts (and the Issuer’s
portfolio yield may be higher or lower than that of other client accounts) with similar investment objectives.

 

(f)          The
Portfolio Manager will not (i) sell, assign or transfer the management agreements under which the CLO Asset Management Fees are
paid to the Portfolio Manager, (ii) amend or modify such management agreements with regard to the payment of CLO Asset Management
Fees (other than an amendment to increase such fees) or (iii) otherwise take or permit any action to be taken that would impair
or encumber the right of the Portfolio Manager to receive the CLO Asset Management Fees, in each case until the Outstanding Senior
Note Amount and the Senior Note Commitment Amount have been reduced to zero.

 

ARTICLE X

MISCELLANEOUS 

 

Section 10.1.          This
Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Section 10.2.          This
Agreement shall remain in full force and effect until the Final Settlement Date. Upon the application of all Available Funds in
accordance with the Priority of Payments, on the Final Settlement Date, this Agreement shall automatically terminate without any
further action by the parties hereto. The parties hereto shall not be bound by any modification, amendment, termination, cancellation,
rescission or supersession of this Agreement unless the same shall be in writing and signed by each party.

 

Section 10.3.          No
assignment of this Agreement shall be made by the Junior Noteholder without the prior written consent of the Senior Commitment
Party. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns.

 

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Section 10.4.          References
in this Agreement to “$” refer to United States Dollars.

 

Section 10.5.          This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.

 

Section 10.6.          Notwithstanding
any other provision of this Agreement, the parties hereto may not, prior to the date that is one year (or, if longer, the then
applicable preference period) plus one day after termination of this Agreement or, in the event securities of the Issuer are issued
pursuant to any Refinancing Transaction, the payment in full of all such notes institute against, or join any other individual
or entity in instituting against the Issuer, any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceedings, or other proceedings under Cayman Islands bankruptcy laws, United States federal or state bankruptcy laws, or any
similar laws.

 

None of the directors,
officers, incorporators, shareholders, partners, agents or employees of the Issuer shall be personally liable for any of the obligations
of the Issuer under this Agreement. Notwithstanding anything to the contrary contained herein, the Issuer’s sole source of
funds for payment of all amounts due hereunder shall be the Collateral, and, upon application of the proceeds of the Collateral
in accordance with the terms and under the circumstances described herein (including the Priority of Payments), no recourse shall
be had against the Issuer for any amounts still outstanding by the Issuer and all obligations of, and any claims against, the Issuer
arising from this Agreement or any transactions contemplated hereby shall be extinguished and shall not thereafter revive.

 

The provisions of this
Section 10.6 shall survive the termination of this Agreement.

 

Section 10.7.          The
parties hereto irrevocably submit to the non-exclusive jurisdiction of the United States District Court for the Southern District
of New York and any court of the State of New York located in the City and County of New York, and any appellate court from any
court thereof, in any action, suit or proceeding brought against it, arising out of or relating to this Agreement or the transactions
contemplated hereunder or for recognition or enforcement of any judgment, and the parties hereto hereby irrevocably and unconditionally
agree that all claims in respect of any such action or proceeding may be heard or determined in such New York State court or, to
the extent permitted by law, in such federal court. The parties hereto agree that a final judgment in any such action, suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided
by law. To the extent permitted by applicable law, the parties hereto hereby waive and agree not to assert by way of motion, as
a defense or otherwise in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of such courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that the related documents or the subject matter thereof may not be litigated in or by such courts.

 

Section 10.8.          THE
PARTIES HERETO VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR THE COLLATERAL ADMINISTRATION AGREEMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THE PARTIES HERETO AND THERETO. THE PARTIES
HERETO HEREBY AGREE THAT THEY WILL NOT SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL
HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION 10.8 HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE
SUBJECT TO NO EXCEPTIONS. EACH PARTY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY ENTERING INTO THIS AGREEMENT AND THE COLLATERAL ADMINISTRATION
AGREEMENT.

 

    	27

    	 

    

 

Section 10.9.          The
Bank, in its capacities as Collateral Agent and Collateral Administrator, agrees to accept and act upon instructions or directions
pursuant to this Agreement sent by unsecured email, facsimile transmission or other similar unsecured electronic methods; provided,
however, that each party providing such instructions or directions shall provide to the Bank an incumbency certificate listing
persons designated to provide such instructions or directions, which incumbency certificate shall be amended whenever a person
is added or deleted from the listing. If such party elects to give the Bank email or facsimile instructions (or instructions by
a similar electronic method) and the Bank in its discretion elects to act upon such instructions, the Bank’s reasonable understanding
of such instructions shall be deemed controlling. The Bank shall not be liable for any losses, costs or expenses arising directly
or indirectly from the Bank’s reliance upon and compliance with such instructions notwithstanding such instructions conflicting
with or being inconsistent with a subsequent written instruction received by the Bank after such action taken by the Bank in reliance
upon or in compliance with such earlier instructions. Each party hereto agrees to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Bank, including without limitation the risk of the Bank acting
on unauthorized instructions, and the risk of interception and misuse by third parties. Any party providing such instructions acknowledges
and agrees that there may be more secure methods of transmitting such instructions than the method(s) selected by it and agrees
that the security procedures (if any) to be followed in connection with its transmission of such instructions provide to it a commercially
reasonable degree of protection in light of its particular needs and circumstances.

 

Section 10.10.         Notwithstanding
anything to the contrary, (a) the Issuer and each holder and each beneficial owner of a Senior Note, by acceptance of its Senior
Note, or its interest in a Senior Note, will be deemed to have agreed to treat, and will treat, such Senior Note (or interest therein)
as debt of the Issuer for U.S. federal, state and local income tax purposes, and will be deemed to acknowledge that the Issuer
will treat the Senior Notes as debt of the Issuer for U.S. federal income tax purposes and (b) the Issuer and each holder and each
beneficial owner of a Junior Note, by acceptance of its Junior Note or its interest therein will be deemed to have agreed to treat,
and will treat, such Junior Note (or interest therein) as equity in the Issuer for U.S. federal income tax purposes.

 

    	28

    	 

    

 

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

 

	CREDIT SUISSE SECURITIES (USA) LLC,	 	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
	as Arranger	 	as Senior Commitment Party and Senior Noteholder
	 	 	 	 	 
	By:	/s/ Brad Larson	 	 	 
	Name:  	Brad Larson	 	  	 
	Title:	Director	 	By: 	/s/ Bik Kwan Chung 
	 	 	 	Name:   	Bik Kwan Chung 
	 	 	 	Title: 	Authorized Signatory 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By:	/s/ Louis J. Impellizeri
	 	 	 	Name:	Louis J. Impellizeri
	 	 	 	Title:	Authorized Signatory
	 	 	 	 	 
	KOHLBERG CAPITAL CORPORATION,	 	KCAP FUNDING, 
	as Portfolio Manager and Junior Noteholder	 	as Issuer
	 	 	 	 	 
	By:	/s/ Dayl W. Pearson	 	By:	/s/ Cleveland Stewart
	Name:  	 Dayl W. Pearson	 	Name:  	Cleveland Stewart
	Title:	Chief Executive Officer	 	Title: 	Director
	 	Kohlberg Capital Corporation	 	 	 
	 	 	 	 	 
	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION,	 	 	 
	as Collateral Administrator and Collateral Agent	 	 	 
	 	 	 	 	 
	By:	/s/ MARIA D. CALZADO	 	 	 
	Name:	MARIA D. CALZADO	 	 	 
	Title:	Vice President	 	 	 

 

    	 

    	 

    

 

SCHEDULE 1

 

NOTICE ADDRESSES

 

	Arranger:	 	Credit Suisse Securities (USA) LLC
	 	 	11 Madison Avenue
	 	 	New York, New York  10010
	 	 	Attention:  Brad Larson; Sandeep Hoshing
	 	 	 
	 	 	telephone number:  (212) 325-9207; (212) 325-1819
	 	 	fax number:  (212) 743-5484
	 	 	 
	 	 	email: brad.larson@credit-suisse.com;
	 	 	sandeep.hoshing@credit-suisse.com
	 	 	 
	Senior Commitment Party:	 	Credit Suisse AG, Cayman Islands Branch
	 	 	11 Madison Avenue
	 	 	New York, New York  10010
	 	 	Attention:  Brad Larson; Sandeep Hoshing
	 	 	 
	 	 	telephone number:  (212) 325-9207; (212) 325-1819
	 	 	fax number:  (212) 743-5484
	 	 	 
	 	 	email: brad.larson@credit-suisse.com;
	 	 	sandeep.hoshing@credit-suisse.com
	 	 	 
	Senior Noteholder:	 	as specified in the Note Register, which shall initially be
	 	 	 
	 	 	Credit Suisse AG, Cayman Islands Branch
	 	 	11 Madison Avenue
	 	 	New York, New York  10010
	 	 	Attention:  Brad Larson; Sandeep Hoshing
	 	 	 
	 	 	telephone number:  (212) 325-9207; (212) 325-1819
	 	 	fax number:  (212) 743-5484
	 	 	 
	 	 	email: brad.larson@credit-suisse.com;
	 	 	sandeep.hoshing@credit-suisse.com
	 	 	 
	Portfolio Manager:	 	Kohlberg Capital Corporation
	 	 	295 Madison Avenue, Floor 6
	 	 	New York, New York  10017
	 	 	Attention:  Dan Gilligan
	 	 	 
	 	 	telephone number:  (212) 455-8333
	 	 	fax number:  (212) 983-7654
	 	 	 
	 	 	email: gilligan@kohlbergcap.com

 

    	Schedule 1	1	 

    	 

    

 

	Junior Noteholder:	 	as specified in the Note Register, which shall initially be
	 	 	 
	 	 	Kohlberg Capital Corporation
	 	 	295 Madison Avenue, Floor 6
	 	 	New York, New York  10017
	 	 	Attention:  Dan Gilligan
	 	 	 
	 	 	telephone number:  (212) 455-8333
	 	 	fax number:  (212) 983-7654
	 	 	 
	 	 	email: gilligan@kohlbergcap.com
	 	 	 
	Issuer	 	KCAP Funding
	 	 	c/o MaplesFS Limited
	 	 	P.O. Box 1093
	 	 	Boundary Hall, Cricket Square
	 	 	Grand Cayman, KY1-1102
	 	 	Cayman Islands
	 	 	Attention:  Directors – KCAP Funding
	 	 	 
	 	 	telephone number:  (345) 945-7099
	 	 	fax number:  (345) 945-7100 (with a copy to +1 (345) 949-8080)
	 	 	 
	 	 	email: cayman@maplesfs.com
	 	 	 
	Collateral Administrator:	 	The Bank of New York Mellon Trust Company, National Association
	 	 	601 Travis Street, 16th Floor
	 	 	Houston, Texas 77002
	 	 	Attention:  Global Corporate Trust – KCAP Funding
	 	 	 
	 	 	telephone number: (713) 483-6000
	 	 	fax number:  (713) 483-6001
	 	 	 
	 	 	email: maria.calzado@bnymellon.com;
	 	 	brian.j.kapko@bnymellon.com

 

    	Schedule 1	2	 

    	 

    

 

EXHIBIT A

 

REPORTING

 

I.           Content
of Collateral Reports

 

Each Collateral Report
will include, to the extent such information is available:

 

(a)          Daily

 

For each Collateral Debt
Obligation:

 

		·	Identification number (e.g., CUSIP, LoanX ID);

		·	Issuer name;

		·	Asset name;

		·	Asset type;

		·	Spread;

		·	Maturity Date;

		·	Principal amount (par balance);

		·	Purchase Price (expressed as a percentage of par);

		·	Settlement date;

		·	LIBOR setting

		·	Accrued interest, amount of interest paid;

		·	The amount of any principal proceeds (including any sale proceeds or principal prepayments);

		·	Date of any principal prepayment;

		·	Moody’s Rating, S&P Rating (if available); and

		·	Moody’s industry category (if available).

 

(b)          Monthly

 

Based on information in (a) and with
respect to all Collateral Debt Obligations a calculation of the following determined as of the last Business Day of the preceding
month:

 

		·	the aggregate principal proceeds (including any sale proceeds or principal prepayments) received
since the prior reporting period;

 

		·	the amount on deposit in each Account;

 

		·	the Gross Purchase Price; and

 

		·	the aggregate Loan Facility Interest.

 

    	Exhibit A	1	 

    	 

    

 

(c)          Payment
Date

 

		·	the information set forth in (b) determined as of the third Business Day prior to such Payment Date;

 

		·	the amount of Available Funds to be distributed on such Payment Date;

 

		·	the amount of CLO Asset Management Fees (if any) to be distributed on such Payment Date; and

 

		·	a detailed accounting of the amounts to be distributed on such Payment Date under each level of the Priority of Payments.

 

Final Settlement Date

 

Each Collateral Report will include
the information set forth in (b) determined as of the dates set forth in Section 6.1(b).

 

    	Exhibit A	2	 

    	 

    

 

II.          Wire
instructions

 

The Bank of New York Mellon

ABA # [  ]

For Credit to GLA: [  ]

For Final Credit to: [  ]

Account Name: KCAP Funding

Attention: Brian Kapko

Reference: Borrower Name, Type of Payment/Description

 

    	Exhibit A	3	 

    	 

    

 

EXHIBIT B

 

FORM OF NOTICE OF BORROWING

 

NOTICE OF BORROWING

[Date]

 

Credit Suisse AG, Cayman
Islands Branch

 

[                                         ]

 

We refer to the Note Purchase
Agreement dated as of February 24, 2012 (the “Agreement”) providing for a loan to KCAP Funding (the “Issuer”).
Capitalized terms defined in the Agreement and used but not defined herein have the meanings given to them in the Agreement.

 

Pursuant to Section 2.3
of the Agreement, the Issuer hereby gives the Senior Commitment Party and the Junior Noteholder notice that the Issuer requests
to borrow under the Agreement:

 

the Senior Note Required
Draw Down Amount equal to $ _______________

 

No later than 10 a.m. (New
York time) on draw date specified below (the “Draw Date”), the proceeds of the borrowing are to be credited to the
following account:

 

Account Number: [                         ]

Account Name: [                         ]

Attention: [                         ]

Reference: Borrower
Name, Type of Payment/Description

 

Draw Date: ________________

 

	 	[                                                     ]
	 	 	 
	 	By: 	 
	 	 	Name:   
	 	 	Title:

 

Portfolio Manager Certification:

 

The Portfolio Manager certifies
that the conditions precedent set forth in Section 2.3 have been satisfied and that the Conditions of Accumulation have been satisfied
with respect to the purchased (but unsettled) Collateral Debt Obligations to which the proceeds of the borrowing will be applied.

 

[                                         ]

 

	By:	 
	Name:  	 
	Title: 	 

 

cc: Collateral Administrator

 

    	Exhibit B	1	 

    	 

    

 

EXHIBIT C

 

FORM OF SENIOR NOTE

 

THIS NOTE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE
ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY
ACT”). THIS SECURITY AND INTERESTS HEREIN MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A)(1) TO A
QUALIFIED PURCHASER (FOR PURPOSES OF THE INVESTMENT COMPANY ACT) THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT THAT IS NOT A BROKER-DEALER WHICH OWNS AND INVESTS ON A DISCRETIONARY
BASIS LESS THAN U.S.$25 MILLION IN SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED PERSONS OF THE DEALER AND IS NOT A PLAN REFERRED
TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT
HOLDS THE ASSETS OF SUCH A PLAN, IF INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE MADE BY THE BENEFICIARIES OF THE PLAN, PURCHASING
FOR ITS OWN ACCOUNT, IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, OR (2) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, IN EACH CASE SUBJECT
TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE AGREEMENT REFERRED TO BELOW, AND IN EACH CASE WHICH MAY BE EFFECTED
WITHOUT LOSS OF ANY APPLICABLE INVESTMENT COMPANY ACT EXEMPTION, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.

 

THIS
NOTE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH SECTION 2.1 OF THE AGREEMENT REFERENCED BELOW. ANY PURPORTED TRANSFER IN
VIOLATION OF THE REQUIREMENTS SET FORTH THEREIN SHALL BE NULL AND VOID AB INITIO.

 

	Senior Note Initial Commitment Amount:  $[                ]	 	[DATE]
	Registration Number:  S-[  ]	 	 

 

FOR VALUE RECEIVED,
KCAP Funding (the “Issuer”) promises to pay to the order of [insert registered owner name] (the “Senior
Noteholder”) in lawful money of the United States of America and in immediately available funds the principal amount
of [                    ] Million
United States Dollars (U.S.$[               ]) or, if
less, the Outstanding Senior Note Amount on the Final Settlement Date as required under the Note Purchase Agreement dated as of
February 24, 2012 (the “Effective Date”) by and among Kohlberg Capital Corporation, in its capacity as Junior
Noteholder (as defined herein), Kohlberg Capital Corporation, in its capacity as portfolio manager (the “Portfolio Manager”),
Credit Suisse AG, Cayman Islands Branch (“CS”), in its capacities as Senior Commitment Party and Senior Noteholder
(each, as defined herein), Credit Suisse Securities (USA) LLC (the “Arranger”), KCAP Funding (the “Issuer”)
and The Bank of New York Mellon Trust Company, National Association (the “Bank”), in its capacities as Collateral
Administrator and Collateral Agent (as it may be amended or modified from time to time, the “Agreement”). Capitalized
terms not defined herein will have the meaning specified in the Agreement.

 

    	Exhibit C	1	 

    	 

    

 

The Issuer hereby promises
to pay the Senior Noteholder interest on the Outstanding Senior Note Amount at the Senior Note Interest Rate for the Applicable
Interest Period. Although the stated amount hereof may be higher, this Note shall be enforceable, with respect to the Issuer’s
obligation to pay the principal amount hereof, and interest hereon, only to the extent of the Outstanding Senior Note Amount. Increases
and decreases in the principal amount of this Note will be recorded in the Note Register and the books and records of the Collateral
Administrator.

 

Notwithstanding anything
to the contrary contained in this Note or the Agreement, the Issuer’s sole source of funds for payment of all amounts due
under this Note and the Agreement shall be the Collateral, and, upon application of the proceeds of the Collateral in accordance
with the terms and under the circumstances described in the Agreement (including the Priority of Payments), no recourse shall be
had against the Issuer for any amounts still outstanding by the Issuer and all obligations of, and any claims against, the Issuer
arising from this Note or the Agreement or any transactions contemplated hereby shall be extinguished and shall not thereafter
revive.

 

Notwithstanding anything
to the contrary contained in this Note or the Agreement, the Senior Noteholder may not, prior to the date that is one year (or,
if longer, the then applicable preference period) plus one day after termination of the Agreement or, in the event securities of
the Issuer are issued pursuant to any Refinancing Transaction, the payment in full of all such notes institute against, or join
any other individual or entity in instituting against the Issuer, any bankruptcy, reorganization, arrangement, winding-up, insolvency,
moratorium or liquidation proceedings, or other proceedings under Cayman Islands bankruptcy laws, United States federal or state
bankruptcy laws, or any similar laws.

 

No delay on the part of
the Senior Noteholder in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute
a waiver thereof. The options, powers and rights of the Senior Noteholder specified herein are in addition to those otherwise created.

 

    	Exhibit C	2	 

    	 

    

 

This Note is the Senior
Note referred to in, and is entitled to, the benefits of the Agreement.

 

THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

	KCAP FUNDING
	 
	By:  	 
	 	Name: 
	 	Title:  Director

 

CERTIFICATE
OF AUTHENTICATION

 

This is one of the Notes
referred to in the within-mentioned Agreement.

 

	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as Collateral Administrator
	 	 
	 	By:  	 
	 	 	Authorized Signatory

 

    	Exhibit C	3	 

    	 

    

 

ASSIGNMENT
FORM

 

For value received _____________________________________________________does
hereby sell, assign and transfer unto _______________________________

 

Social security or other identifying number of assignee:

 

Name and address, including zip code, of assignee:

 

the within Note and does hereby irrevocably
constitute and appoint ____________ Attorney to transfer the Note on the books of the Issuer with full power of substitution in
the premises.

 

	Date:  ______________	Your Signature:
	 	 
	 	 
	 	(Sign exactly as your name appears on the Note)

 

    	Exhibit C	4	 

    	 

    

 

EXHIBIT D

 

FORM OF JUNIOR NOTE

 

THIS NOTE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE
ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY
ACT”). THIS SECURITY AND INTERESTS HEREIN MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A)(1) TO A
QUALIFIED PURCHASER (FOR PURPOSES OF THE INVESTMENT COMPANY ACT) THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT THAT IS NOT A BROKER-DEALER WHICH OWNS AND INVESTS ON A DISCRETIONARY
BASIS LESS THAN U.S.$25 MILLION IN SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED PERSONS OF THE DEALER AND IS NOT A PLAN REFERRED
TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT
HOLDS THE ASSETS OF SUCH A PLAN, IF INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE MADE BY THE BENEFICIARIES OF THE PLAN, PURCHASING
FOR ITS OWN ACCOUNT, IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, OR (2) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, IN EACH CASE SUBJECT
TO THE SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE AGREEMENT REFERRED TO BELOW, AND IN EACH CASE WHICH MAY BE EFFECTED
WITHOUT LOSS OF ANY APPLICABLE INVESTMENT COMPANY ACT EXEMPTION, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION.

 

THIS NOTE MAY NOT BE TRANSFERRED.

 

	Principal Amount:  $[                ]	 	[DATE]
	Registration Number: J-[  ]	 	 

 

FOR VALUE RECEIVED,
KCAP Funding (the “Issuer”) promises to pay to the order of [insert registered owner name] (the “Junior
Noteholder”) in lawful money of the United States of America and in immediately available funds the principal amount
of [                    ] United
States Dollars (U.S.$[               ]) or, if greater
or less, the Outstanding Junior Note Amount on the Final Settlement Date as required under the Note Purchase Agreement dated as
of February 24, 2012 (the “Effective Date”) by and among Kohlberg Capital Corporation, in its capacity as Junior
Noteholder (as defined herein), Kohlberg Capital Corporation, in its capacity as portfolio manager (the “Portfolio Manager”),
Credit Suisse AG, Cayman Islands Branch (“CS”), in its capacities as Senior Commitment Party and Senior Noteholder
(each, as defined herein), Credit Suisse Securities (USA) LLC (the “Arranger”), KCAP Funding (the “Issuer”)
and The Bank of New York Mellon Trust Company, National Association (the “Bank”), in its capacities as Collateral
Administrator and Collateral Agent (as it may be amended or modified from time to time, the “Agreement”). Capitalized
terms not defined herein will have the meaning specified in the Agreement.

 

The Issuer hereby promises
to pay the Junior Noteholder interest in the amount (if any) equal to the Positive Carry due and payable on the Junior Note in
accordance with the Priority of Payments. Although the stated amount hereof may be higher, this Note shall be enforceable, with
respect to the Issuer’s obligation to pay the principal amount hereof, and interest hereon, only to the extent of the Outstanding
Junior Note Amount. Increases and decreases in the principal amount of this Note will be recorded in the Note Register and the
books and records of the Collateral Administrator.

 

    	Exhibit D	1	 

    	 

    

 

The Junior Noteholder agrees
for the benefit of the Senior Noteholder that the Junior Note’s rights in and to the Collateral shall be subordinate and
junior to the Senior Notes to the extent and in the manner set forth in the Agreement including, without limitation, as set forth
in the Priority of Payments

 

Notwithstanding anything
to the contrary contained in this Note or the Agreement, the Issuer’s sole source of funds for payment of all amounts due
under this Note and the Agreement shall be the Collateral, and, upon application of the proceeds of the Collateral in accordance
with the terms and under the circumstances described in the Agreement (including the Priority of Payments), no recourse shall be
had against the Issuer for any amounts still outstanding by the Issuer and all obligations of, and any claims against, the Issuer
arising from this Note or the Agreement or any transactions contemplated hereby shall be extinguished and shall not thereafter
revive.

 

Notwithstanding anything
to the contrary contained in this Note or the Agreement, the Junior Noteholder may not, prior to the date that is one year (or,
if longer, the then applicable preference period) plus one day after termination of the Agreement or, in the event securities of
the Issuer are issued pursuant to any Refinancing Transaction, the payment in full of all such notes institute against, or join
any other individual or entity in instituting against the Issuer, any bankruptcy, reorganization, arrangement, winding-up, insolvency,
moratorium or liquidation proceedings, or other proceedings under Cayman Islands bankruptcy laws, United States federal or state
bankruptcy laws, or any similar laws.

 

No delay on the part of
the Junior Noteholder in exercising any of its options, powers or rights, or partial or single exercise thereof, shall constitute
a waiver thereof. The options, powers and rights of the Junior Noteholder specified herein are in addition to those otherwise created.

 

    	Exhibit D	2	 

    	 

    

 

This Note is the Junior
Note referred to in, and is entitled to, the benefits of the Agreement.

 

THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

	KCAP FUNDING
	 
	By:  	 
	 	Name: 
	 	Title:  Director

 

CERTIFICATE
OF AUTHENTICATION

 

This is one of the Notes
referred to in the within-mentioned Agreement.

 

	 	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as Collateral Administrator
	 	 
	 	By:  	 
	 	 	Authorized Signatory

 

    	Exhibit D	3	 

    	 

    

 

EXHIBIT
E

 

TRANSFER CERTIFICATE

 

Reference is hereby made
to the Note Purchase Agreement dated as of February 24, 2012 by and among Kohlberg Capital Corporation, in its capacity as Junior
Noteholder (as defined herein), Kohlberg Capital Corporation, in its capacity as portfolio manager under the Note Purchase Agreement
(the “Portfolio Manager”), Credit Suisse AG, Cayman Islands Branch (“CS”), in its capacities
as Senior Commitment Party and Senior Noteholder (each, as defined herein), Credit Suisse Securities (USA) LLC (the “Arranger”),
KCAP Funding (the “Issuer”) and The Bank of New York Mellon Trust Company, National Association (the “Bank”),
in its capacities as Collateral Administrator and Collateral Agent (as it may be amended or modified from time to time, the “Note
Purchase Agreement”). Capitalized terms not defined herein will have the meaning specified in the Note Purchase Agreement.

 

The undersigned (the “Transferee”)
wishes to purchase U.S. $__________ in principal amount of Senior Notes (the “Notes”) to be registered in the
name of _________________________________.

 

In connection with such
transfer, and in respect of such Senior Notes, the Transferee does hereby certify that such Senior Notes are being transferred
(i) pursuant to an exemption from registration under the Securities Act and (ii) in accordance with any applicable securities
laws of any state of the United States or any other jurisdiction. In addition, the Transferee hereby represents, warrants and covenants
for the benefit of the Issuer, the Arranger, the Bank and their respective counsel that:

 

(a)          it
is either (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) that is also
a “qualified purchaser” for purposes of the Investment Company Act), or (ii) a non-U.S. person (as defined in
Regulation under the Securities Act) that in each case is acquiring the Notes for its own account;

 

(b)          it
understands that: (A) subject to the terms of the Note Purchase Agreement, proceeds from the issuance of the Notes will be invested
in Collateral Debt Obligations; (B) if the Collateral is liquidated pursuant to the Note Purchase Agreement, such liquidation may
take place under market conditions that are not advantageous to the Issuer, and as a result of any such liquidation, the Noteholders
may suffer a loss, which loss could equal its entire investment in the applicable Notes; and (C) all payments to it and any payments
upon redemption of the Notes are subordinated to all other obligations of the Issuer, and will be payable only in accordance with
the Priority of Payments to the extent the Issuer has sufficient Available Funds;

 

(c)          it
has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its
investment in the Collateral Debt Obligations and is able to bear the economic risk of such investment;

 

(d)          it
understands that an investment in the Collateral Debt Obligations involves certain risks, including the risk of loss of all or
a substantial part of its investment; and it has had access to such financial and other information concerning the Issuer, the
Portfolio Manager, the Collateral Debt Obligations and the credit markets as it deemed necessary or appropriate in order to make
an informed decision with respect to its entering into the Note Purchase Agreement;

 

(e)          it
has made its own independent investigation in connection with its decision to purchase Notes and is not relying on any advice,
counsel or representations (whether written or oral) of the Issuer, any Credit Suisse Party, any Portfolio Manager Party or any
other person in connection therewith;

 

    	Exhibit E	1	 

    	 

    

 

(f)          it
is not a member of the public in the Cayman Islands;

 

(g)          it
is not purchasing the Notes with a view to the resale, distribution or other disposition thereof in violation of the Securities
Act;

 

(h)          it
understands that the Notes are not transferable except to a transferee that makes all of the representations and warranties contained
in a Transfer Certificate or following receipt by the Issuer of an opinion of nationally recognized counsel acceptable to the Issuer
to the effect that, following such transfer, the Notes will continue to be exempt from the registration requirements of the Securities
Act and that neither the Issuer nor the pool of assets owned by the Issuer will be required to register as an investment company
under the Investment Company Act;

 

(i)           none
of the Issuer, any Portfolio Manager Party or any Credit Suisse Party has given it any assurance, guarantee or representation whatsoever
as to the expected or projected success, profitability, return, performance, result, effect, consequence or benefit (including
legal, regulatory, tax, financial, accounting or otherwise) of the Notes;

 

(j)           it
acknowledges that, other than as expressly set forth herein, it has no rights or recourse with respect to the Collateral Debt Obligations
or against any Credit Suisse Party, any Portfolio Manager Party or the Issuer;

 

(k)          sales
of Collateral Debt Obligations may result in Trading Losses that may reduce the amount payable on the Notes under the Priority
of Payments;

 

(l)           none
of the Credit Suisse Parties or the Portfolio Manager Parties has a fiduciary, advisory or agency relationship with it or its affiliates
in respect of any of the transactions contemplated by the Note Purchase Agreement, irrespective of whether any Credit Suisse Party
or Portfolio Manager Party has advised or is advising it (or its affiliates) on other matters and it waives, to the fullest extent
permitted by law, any claims it may have against the Credit Suisse Parties or Portfolio Manager Parties for breach of fiduciary
duty or alleged breach of fiduciary duty in respect of any of the transactions contemplated by the Note Purchase Agreement and
agrees that the Credit Suisse Parties and the Portfolio Manager Parties will have no liability (whether direct or indirect) to
it (or its affiliates) in respect of any such fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf
of or in right of it (or its affiliates), including directors, partners, equity holders, employees or creditors of it (or its affiliates);

 

(m)         it
has been advised that the Credit Suisse Parties and the Portfolio Manager Parties each are engaged in a broad range of transactions
which may involve interests that differ from those it (or its affiliates) and agrees that none of the Credit Suisse Parties or
the Portfolio Manager Parties has any obligation to disclose such interests and transactions to it (or its affiliates) by virtue
of any fiduciary, advisory or agency relationship or otherwise;

 

(n)          the
Senior Commitment Party may, in its sole discretion, decline to purchase or finance any Collateral Debt Obligations selected by
the Portfolio Manager, and will be free, in its sole discretion, to follow or decline to follow any recommendations made by the
Portfolio Manager or any other entity with respect to the Collateral Debt Obligations;

 

    	Exhibit E	2	 

    	 

    

 

(o)          the
Credit Suisse Parties are full service securities firms engaged in securities trading and brokerage activities, as well as the
provision of investment banking and structuring services. In the ordinary course of their business, the Credit Suisse Parties may
from time to time effect transactions for their own accounts or for the accounts of customers, and underwrite, act as placement
agent for or hold positions in, securities or options on securities of the Portfolio Manager, its affiliates and obligors of the
Collateral Debt Obligations, may act as selling institution with respect to participations that are Collateral Debt Obligations
and may sell certain Collateral Debt Obligations to the Issuer;

 

(p)          it
agrees not to cause the filing of a petition in bankruptcy against the Issuer prior to the date which is one year (or if longer,
the applicable preference period then in effect) plus one day has elapsed since such the payment in full of the Notes;

 

(q)          it
agrees to treat its Senior Note as debt of the Issuer for U.S. federal, state and local income tax purposes and acknowledges that
the Issuer will treat the Senior Notes as debt for U.S. federal income tax purposes; and

 

(r)          it
understands and agrees that the Issuer’s sole source of funds for payment of all amounts due under its Senior Note and the
Note Purchase Agreement shall be the Collateral, and, upon application of the proceeds of the Collateral in accordance with the
terms and under the circumstances described in the Note Purchase Agreement (including the Priority of Payments), no recourse shall
be had against the Issuer for any amounts still outstanding by the Issuer and all obligations of, and any claims against, the Issuer
arising from its Senior Note or the Note Purchase Agreement or any transactions contemplated hereby shall be extinguished and shall
not thereafter revive.

 

    	Exhibit E	3	 

    	 

    

 

IN WITNESS WHEREOF, the
undersigned has executed this Transfer Certificate on the date set forth below.

 

Dated:

 

	 	 
	 	 	(Print Name of Entity)
	 	 	 
	 	By:   	 
	 	Title:

 

	Transferee’s Registered Name:                                                                        	 
	 	 
	Transferee’s Permanent Address:                                                                    	 
	 	 
	Address for notices:                                                                                         	 

 

	 	Telephone:                                                      	 
	 	Facsimile:                                                       	 
	 	Attention:                                                       	 

 

	Transferee’s Taxpayer Identification Number	 
	or Social Security Number:                                                                             	 

 

	Wire transfer information:	Bank:                                                                   	 
	 	Address:                                                           	 
	 	Bank ABA#:                                                               	 
	 	Account #:                                                        	 
	 	FAO:                                                                 	 
	 	Attention:                                                         	 

 

    	Exhibit E	4	 

    	 

    

 

ANNEX I

 

ELIGIBILITY CRITERIA

 

A Collateral Debt Obligation will be eligible
for purchase by the Portfolio Manager on behalf of the Issuer if, at the time it is purchased, it:

 

(i)          is
U.S. Dollar denominated and is a senior secured loan, a second lien loan or a mezzanine loan;

 

(ii)         is
not a Defaulted Collateral Debt Obligation;

 

(iii)        is
not a lease;

 

(iv)        is
not a structured finance obligation or a synthetic security;

 

(v)         provides
for a fixed amount of principal payable on scheduled payment dates and/or at maturity and does not by its terms provide for earlier
amortization or prepayment at a price of less than par;

 

(vi)        does
not constitute “margin stock” (as defined under Regulation U issued by the Board of Governors of the United States
Federal Reserve System);

 

(vii)       has
payments that do not and will not subject the Issuer to withholding tax or other similar tax unless (a) the related obligor is
required to make “gross-up” payments that ensure that the net amount actually received by the Issuer (after payment
of all taxes, whether imposed on such obligor or the Issuer) will equal the full amount that the Issuer would have received had
no such taxes been imposed or (b) the withholding tax is imposed under Sections 1471, 1472, 1473 or 1474 of the Code;

 

(viii)      has
an S&P Rating and a Moody’s Rating or is expected to achieve a rating higher than or equal to “B-/B3” and
is not on watch for downgrade; 

 

(ix)         is
not a debt obligation whose repayment is subject to substantial non-credit related risk;

 

(x)          is
not an obligation pursuant to which any future advances or payments to the borrower or the obligor thereof may be required to be
made by the Issuer;

 

(xi)         does
not have an “f,” “r,” “p,” “pi,” “q” or “t” subscript assigned
by S&P;

 

(xii)        will
not require the Issuer or the pool of collateral to be registered as an investment company under the Investment Company Act;

 

(xiii)       is
not a debt obligation that pays scheduled interest less frequently than semi-annually;

 

(xiv)      is
not subject to a tender offer, voluntary redemption, exchange offer, conversion or other similar action for a price less than its
par amount plus all accrued and unpaid interest;

 

(xv)       is
not issued pursuant to an underlying instrument governing the issuance of indebtedness having an aggregate principal amount (whether
drawn or undrawn) of less than U.S.$100,000,000 with no more than 25% issued pursuant to an underlying instrument governing the
issuance of indebtedness having an aggregate principal amount (whether drawn or undrawn) of less than U.S.$150,000,000;

 

    	Annex I	1	 

    	 

    

 

(xvi)      does
not mature later than 2018 except as otherwise agreed by the Senior Commitment Party; and

 

(xvii)     
is capable of being sold legally and beneficially or assigned to or participated in by the Issuer and any charge to be granted
by the Issuer in respect of the Collateral Debt Obligation will be legal, valid and binding and will not conflict with any documentation
with respect to the Collateral Debt Obligation.

 

    	Annex I	2	 

    	 

    

 

ANNEX II

 

TAX OPERATING GUIDELINES

 

I.        Introduction.

 

This schedule sets
forth guidelines (the “Operating Guidelines”) that, in addition to the other guidelines and restrictions set forth
in the note purchase agreement dated as of February 24, 2012 (the “Note Purchase Agreement”), will be followed
in managing the Collateral in a transaction in which Kohlberg Capital Corporation (the “Portfolio Manager”) will act
on behalf of and will be the portfolio manager for KCAP Funding, a Cayman Islands issuer (the “Issuer”), under the
Note Purchase Agreement. The Issuer and the Portfolio Manager will follow these Operating Guidelines to help ensure that (i) the
Issuer will not be treated as engaged in a trade or business within the United States for U.S. federal income tax purposes; and
(ii) income earned by the Issuer will be exempt from U.S. withholding and excise taxes; provided, however, that the Portfolio
Manager shall be permitted to take actions not permitted by the Operating Guidelines if the Portfolio Manager has received a written
opinion of nationally recognized tax counsel in the United States to the effect that such actions, when considered in light of
the other activities of the Issuer, will not cause the Issuer to be engaged in a U.S. trade or business for U.S. federal income
tax purposes. The Operating Guidelines do not apply to any securities lending transactions, hedging transactions or purchase of
synthetic securities, and if the Portfolio Manager proposes to engage in any such activities, the Portfolio Manager must amend
the Operating Guidelines accordingly and, in connection with such amendment, must receive a written opinion of nationally recognized
tax counsel in the United States to the effect that such activities, when considered in light of the other activities of the Issuer,
will not cause the Issuer to be engaged in a U.S. trade or business for U.S. federal income tax purposes. The Operating Guidelines
are not a substitute for obtaining tax advice with respect to particular investments or other tax issues that may arise in connection
with the Issuer’s activities, and the Issuer will consult with its tax counsel and will receive written advice from such
tax counsel as appropriate. Capitalized terms used and not defined herein shall have the respective meanings given to them in the
Note Purchase Agreement.

 

II.       General
Guidelines.

 

A.      General
Restrictions on the Activities of the Issuer.

 

1.          The
Issuer will not engage in any activities other than:1

 

 

		1	For purposes of these Operating Guidelines, all references to actions of the Issuer shall include actions taken directly as
well as actions taken indirectly through any person acting on its behalf (including the Portfolio Manager or an Affiliate of the
Portfolio Manager acting on behalf of the Issuer). The term “Affiliate” or “Affiliated” where
used herein with respect to a person shall include (i) any other person who, directly or indirectly, is in control of, controlled
by, or under common control with, such person or (ii) any other person who is a director, officer or employee of (a) such
person, or (b) any such other person described in clause (i) above. For the purposes of this definition, control of a person shall
mean the power, direct or indirect, (x) to vote more than 50% of the securities having ordinary voting power for the election of
directors of such person, or (y) to direct or cause the direction of the management and policies of such person whether by contract
or otherwise. Notwithstanding the foregoing, the Issuer shall not be deemed to be an Affiliate of (A) the Portfolio Manager or
any of its Affiliates solely by reason of the Note Purchase Agreement; or (B) the Collateral Administrator or any other special
purpose vehicle controlled by it solely by reason of services provided in respect of any transaction contemplated under the Note
Purchase Agreement, and the Portfolio Manager and its Affiliates shall not be treated as an Affiliate of any account or fund solely
as a result of investment services provided to such account or fund.

 

    	Annex II	1	 

    	 

    

 

(i)       purchasing
and selling Collateral Debt Obligations (and, to the extent permitted under the Note Purchase Agreement, certain short-term cash-equivalent
investments of Available Funds) for its own account, in arm’s length transactions, for the sole purpose of realizing a profit
from income earned on them and/or any rise in their value during the period between purchase and sale;

 

(ii)      issuing
the Notes;

 

(iii)     refinancing
its obligations under the Notes with proceeds of a Refinancing Transaction; and

 

(iv)     performing
other actions in connection with the foregoing that are merely incidental thereto (including, without limitation, contracting with
the Portfolio Manager, the Collateral Administrator, and other service providers and preparing reports).

 

2.          The
Issuer will not act as, hold itself out as, or represent to others that it is:

 

(i)       a
market maker or a dealer;2

 

(ii)      a
person who provides structuring, origination, syndication, lending, or other services for income;3

 

(iii)     a
guarantor, insurer, or reinsurer; or

 

(iv)     a
person that performs any similar function.

 

3.        The
Issuer will not register as, or take any action that, when considered in conjunction with its other activities, would cause it
to be supervised as, a bank, finance company, other lending institution, insurance or reinsurance company, or broker/dealer.

 

 

	2	The term “dealer” where used herein shall mean a merchant of securities, commodities, or other assets regularly
engaged as a merchant in purchasing such assets and selling them to customers with a view to the gains and profits that may be
derived therefrom, or a person that regularly offers to enter into, assume, offset, assign, or otherwise terminate positions in
derivatives with customers in the ordinary course of a trade or business, including regularly holding oneself out, in the ordinary
course of one’s trade or business, as being willing and able to enter into either side of a derivative transaction.
	 	 
	3	To the extent that an activity of the Issuer is addressed by Section III of these Operating Guidelines, the Issuer will not
be treated as providing services in violation of clause (ii) as a result of such activity if the Issuer complies with the requirements
set forth in Section III.

 

    	Annex II	2	 

    	 

    

 

4.        The
Issuer will in all events comply with the restrictions on its activities set forth in the Note Purchase Agreement, the Issuer’s
organizing documents, and any related documents.

 

B.        Special
Restrictions Relating to the Ownership of Certain Assets.

 

1.        The
Issuer will not become the owner of any asset if a principal purpose of acquiring the asset is to facilitate a securities lending
agreement with respect to the asset.

 

2.        The
Issuer will not become the owner of any asset:

 

(i)      that
is treated as an equity interest in a partnership, disregarded entity, or other entity whose activities are attributable to an
owner for U.S. federal income tax purposes, unless:

 

(a)          the
entity is not treated, at any time, as engaged in a trade or business within the United States for U.S. federal income tax purposes;
and

 

(b)          the
assets of the entity consist solely of assets that the Issuer could directly acquire consistent with the Note Purchase Agreement,
the Issuer’s organizing documents, and any related documents; or

 

(ii)     the
gain from the disposition of which would be subject to U.S. federal income or withholding tax under section 897 or section 1445,
respectively, of the Code.

 

3.          The
Issuer will not become the owner of any asset if the ownership of such asset (together with the Issuer’s other assets) would
cause the Issuer to be treated as a taxable mortgage pool within the meaning of section 7701(i) of the Code.4

 

 

		4	A “taxable mortgage pool” is generally defined as any entity (or any pool of assets that is part of an entity)
that is not a REMIC and that meets: (i) an asset test; (ii) a maturities test; and (iii) a relationship test. These tests are applied
on each date on which the entity in question issues a debt obligation. Each of the tests is described briefly below:

(i)             The asset test is met if 80 percent or more
of all of the entity’s or pool’s assets consist of debt obligations and more than 50 percent of those obligations are
“real estate mortgages” (or interests therein). The definition of “real estate mortgage” generally includes
any debt obligation that is principally secured by real estate or interests in real estate (including other real estate mortgages).
For this purpose, a debt obligation is “principally secured” by real estate if the fair market value of the real estate
securing the debt obligation is at least 80 percent of the debt obligation’s issue price at the time the obligation is issued.

(ii)            The maturities test is met if the entity
or pool is the obligor on two or more classes of debt with differing maturities (including notes with differing rights to partial
principal payments).

(iii)           The relationship test is met if the timing
and amount of payments on debt issued by the entity or pool bear a relationship to payments on the debt assets it holds (whether
or not mortgages).

 

    	Annex II	3	 

    	 

    

 

III.     Guidelines
Relating to the Prohibition on Loan Origination Activities.

 

This Section III addresses
the Issuer’s acquisitions of interests in loans. See Section III.C, below, for additional rules applicable to deferred obligations.

 

A.        Definition
of Loan.

 

1.       For
purposes of these Operating Guidelines, the term “loan” shall, except as provided
below, include any instrument that is or will be treated as a debt obligation for U.S. federal income tax purposes (including
any deferred obligation,5 whether funded or unfunded). For purposes of these Operating Guidelines, each separate tranche
or class of debt obligations that are part of an issue or facility shall be treated as a separate loan. 

 

2.       Notwithstanding
the foregoing, a debt obligation shall not be treated as a loan for purposes of these Operating Guidelines if it is (i) issued
under a trust indenture or similar agreement under which a trustee is appointed to act on behalf of the holders of such debt obligation;
and (ii) treated as a security for purposes of the Securities Act of 1933, as amended, unless the Issuer acquires at original issuance
more than 25 percent (by value) of all of the debt obligations of the particular tranche or class offered at that time by
that obligor, in which case all of such debt obligations will be treated as loans for purposes of these Operating Guidelines.

 

B.      Guidelines
Applicable to All Loans.

 

1.       The
Issuer will acquire all interests in loans by assignment or participation or, in the case of loans that are securities, by other
customary means of secondary market transfer (any of the foregoing, an “assignment”), and will not sign a loan agreement
as an original lender.

 

2.       The
Issuer will not acquire an interest in any loan prior to 2 days after the later of (x) the loan’s original closing; and
(y) the most recent date on which any of the principal terms of the loan were modified in a material fashion;6 provided,
however, that, subject to Section III.C, below, the Issuer may, prior to 2 days after the later of (x) and (y), enter into
a commitment with a person that owns or will own such an interest to take an assignment or purchase a participation in such interest
on a forward basis,7 so long as:

 

 

	5	The term “deferred obligation” where used herein shall include (i) any
revolving loan facility; (ii) any delayed funding loan; and (iii) any other obligation that commits
the Issuer to provide funding, conditionally or unconditionally, to the borrower on a future date.
	 	 
	6	For purposes of these Operating Guidelines, the “principal terms” of a loan shall include its principal
amount, interest rate, term, ranking compared with other liabilities, security, obligor, exchange or conversion rights, required
or permitted timing of payments, fees or premiums, guarantees or other credit enhancements, and conditions to advancing additional
funds.

		7	The term “commitment” where used herein shall include any agreement or other commitment to acquire or to
participate in any risks or benefits of an interest in a loan.

 

    	Annex II	4	 

    	 

    

 

(i)      the
Issuer enters into the commitment with such person after the person has entered into its own written commitment to acquire the
interest;

 

(ii)     such
person is not an obligor under the loan, the Portfolio Manager, any Affiliate of the Portfolio Manager, or any person acting on
behalf of the foregoing;

 

(iii)    the
Issuer’s commitment to take an assignment in such interest is conditioned on there being no material adverse change in the
condition of any obligor under the loan, unless

 

(a)     the
Issuer enters into such commitment no sooner than two weeks after the person from whom the Issuer will acquire such interest (the
“Original Lender”) enters into its own commitment to acquire the interest or to use its best efforts to syndicate the
loan; and

 

(b)     the
Issuer’s commitment is documented in an industry standard commitment form for secondary market purchases, and is substantially
similar to that given by all other persons who will acquire an interest in the loan from the Original Lender (including as to the
lack of a material adverse change condition); and

 

(iv)    the
Issuer does not take an assignment in such interest pursuant to such commitment prior to 2 days after the later of (x) and (y).

 

3.       Prior
to acquiring an interest in a loan, the Issuer will not engage in any communications with any obligor under the loan or any person
acting on behalf of such an obligor, except for due diligence communications in which an investor would customarily engage in order
to decide whether to acquire such an interest in the secondary market.

 

4.       Each
acquisition of an interest in a loan by the Issuer will be a separate, stand-alone transaction and will not be part of a program
or other arrangement pursuant to which the Issuer has a commitment (whether formal or not) to acquire interests in loans on an
on-going basis.

 

5.       The
Issuer will not provide services in connection with a loan origination or syndication, and will not directly or indirectly share
in any fee or discount paid or given in consideration for loan origination or syndication services. The Issuer will not receive
(for any reason) a fee or discount that is calculated or described as a share of any fee or discount received by a loan originator
or syndicator. The Issuer may receive a discount to compensate it for entering into a commitment to acquire a loan from a seller,
provided that such compensation is negotiated at arm’s length and the seller is acting for its own account.

 

6.       The
Issuer will not acquire an interest in a loan if the Issuer would own more than 50 percent of such loan or more than 25 percent
of all loans that are part of an overall credit facility.

 

    	Annex II	5	 

    	 

    

 

7.       The
Issuer will not negotiate the terms of any loan except, subject to Section 3.1(c) of the Note Purchase Agreement, as may
be necessary with respect to a loan already owned by the Issuer that is in default or for which a default is imminent,8
provided that such loan was acquired at a time when such default was not reasonably expected or anticipated. Notwithstanding the
foregoing, the Issuer may exercise any voting or other rights available to a party, participant, or assignee under the documents
applicable to a loan, and may accept or reject amendments or modifications proposed by an obligor under a loan.

 

8.       The
Issuer will not acquire an interest in any loan if the terms of such loan were negotiated by the Portfolio Manager (whether or
not on behalf of the Issuer).

 

9.       The
Issuer will also not acquire an interest in any loan if the terms of such loan were negotiated by any Affiliate of the Portfolio
Manager, unless:

 

(i)      the
Issuer acquires the interest in an arm’s length, secondary market transaction from a third party seller that is unrelated
to the Affiliate, at least 45 days after the later of (x) the loan’s original closing; and (y) the most recent date on which
any of the principal terms of the loan were modified in a material fashion, and the Issuer does not enter into a commitment with
respect to such interest before such later date;

 

(ii)     the
Issuer acquires the interest from the Affiliate, but the loan was originated before the Issuer issued any notes, shares, or other
securities, and the Affiliate did not negotiate the terms of the loan in anticipation of a transfer of all or a portion of such
interest to the Issuer; or

 

(iii)    the
Issuer acquires the interest from the Affiliate, and each of the following conditions is satisfied:

 

(a)     immediately
after the Issuer enters into a commitment to acquire such interest, with respect to the portion of the Affiliate’s allocation
of such loan that is sold by the Affiliate, the amount acquired or committed to by third party investors that are unrelated to
such Affiliate and that are not entities for which the Portfolio Manager or its Affiliates perform investment or collateral management
services is at least as much as the amount acquired or committed to by other investors (including the Issuer);

 

 

		8	For purposes of these Operating Guidelines, any person that is an agent, placement agent, structurer, or syndicator with respect
to any loan shall be deemed to have engaged in the negotiation of the terms of such loan. In the case of a person other than the
foregoing, however, a negotiation of terms shall not include:

(i)               communications with a seller or an agent prior to
purchase stating the Issuer’s terms and conditions for purchasing an interest in a loan;

(ii)              comments on assignment provisions solely to permit
assignment to a Cayman entity or the pledge of an interest in a loan to an indenture trustee;

(iii)             comments relating to the wiring of funds; or

(iv)             comments that the draft documents are inconsistent
with an approved term sheet or that the loan documents contain mistakes.

 

    	Annex II	6	 

    	 

    

 

(b)     the
Issuer acquires the interest on terms and conditions substantially identical to those applicable to the third party investors described
in the preceding paragraph; and

 

(c)     the
Issuer does not acquire more than a 10 percent interest in such loan.

 

10.     No
bank or other lending institution that is a holder of a debt or equity interest issued by the Issuer will control or direct the
Portfolio Manager’s or Issuer’s decision to invest in a particular asset except as otherwise allowed to a holder of
such debt or equity interest, acting in that capacity, under the Note Purchase Agreement. In addition, the decision to invest in
a particular asset will not be conditioned upon a particular person or entity holding debt or equity interests issued by the Issuer.

 

11.     The
Issuer will not acquire an interest in any loan with the intent or purpose of, or as part of a program of, entering into any transaction
with a bank or other lending institution the effect of which is to substantially shift the economic benefits and burdens of ownership
of an interest in the loan to such bank or other lending institution (e.g., a total rate of return swap), other than (x) issuing
its Notes to banks or other lending institutions; and (y) selling loans (or participations in loans) to banks or other lending
institutions in arm’s length transactions that comply with the terms of the Note Purchase Agreement and these Operating Guidelines.

 

C.      Additional
Guidelines Applicable to Deferred Obligations.9

 

1.       The
Issuer will not acquire an interest in a deferred obligation unless:

 

(i)      the
deferred obligation is a part of an overall credit facility consisting of such deferred obligation and one or more related loans
that are not deferred obligations, and the Issuer concurrently acquires (and intends to own) an interest in such related loans
in an amount at least equal to the Issuer’s aggregate drawn and undrawn amounts under the deferred obligation; or

 

(ii)     the
Issuer does not acquire such interest, or enter into any commitment with respect to such interest,
prior to 2 days after the later of (x) the deferred obligation’s original closing; and (y) the most recent date on
which any of the principal terms of the deferred obligation were modified in a material fashion.

 

2.       The
Issuer will acquire an interest in a deferred obligation only if any conditions to the Issuer’s obligation to advance funds
to the borrower are based on objective factors and are not subject to the exercise of discretion by the Issuer.10

 

 

		9	For purposes of measuring the Issuer’s interest in a deferred obligation, both drawn and undrawn amounts shall be counted.
		10	For this purpose, a condition to the advance of funds that is based upon a determination that there has been no event that
has had or could have a “material adverse effect” with respect to the borrower and any related entities or any similar
provision shall be treated as an objective factor and not subject to the exercise of discretion by the Issuer.

 

    	Annex II	7	 

    	 

    

 

3.       The
Issuer’s aggregate interests in deferred obligations will at no time exceed 15 percent of the Issuer’s aggregate amount
of Collateral Debt Obligations (counting undrawn amounts for this purpose).

 

    	Annex II	8	 

    	 

    

 

ANNEX
III

 

MOODY’S
RATING SCHEDULE

 

“Assigned Moody’s
Rating”: The monitored publicly available rating or the monitored estimated rating expressly assigned to a debt obligation
(or facility) by Moody’s that addresses the full amount of the principal and interest promised; provided that so long
as the Issuer applies for an estimated rating in a timely manner and provides the information required to obtain such estimate,
pending receipt, such debt obligation (or facility) will have a Moody’s Rating of “B3” for purposes of this definition
if the Portfolio Manager certifies to the Collateral Administrator that the Portfolio Manager believes that such monitored estimated
rating will be at least “B3.”

 

“Corporate Family
Rating”: Moody’s corporate family rating, the successor equivalent rating thereto (or the monitored estimated rating
expressly assigned to an obligor by Moody’s) or, if a corporate family rating has not yet been assigned, the senior implied
rating; provided that pending receipt from Moody’s of any such estimate, the Corporate Family Rating will be “B3”
so long as the Portfolio Manager has certified to the Collateral Administrator in writing that application for such estimate is
pending and such estimate is expected to be at least “B3.”

 

“Moody’s
Default Probability Rating”: With respect to any Collateral Debt Obligation, as of any date of determination, the rating
determined in accordance with the following, in the following order of priority:

 

(a)          any
Collateral Debt Obligation (other than a Moody’s Non Senior Secured Loan or a DIP loan):

 

(i)          if
the Collateral Debt Obligation’s Obligor has a Corporate Family Rating from Moody’s,
such Corporate Family Rating; and

 

(ii)         if
the preceding clause does not apply, the Moody’s Obligation Rating of such Collateral Debt Obligation;

 

(b)          with
respect to a Moody’s Non Senior Secured Loan:

 

(i)          if
the Obligor has a senior unsecured obligation with an Assigned Moody’s Rating, such rating; and

 

(ii)         if
the preceding clause does not apply, the Moody’s Equivalent Senior Unsecured Rating of the Collateral
Debt Obligation, as applicable; and

 

(c)          with
respect to a DIP loan, the rating that is one rating subcategory below the Moody’s Obligation Rating thereof.

 

Notwithstanding the foregoing, if the Moody’s
rating or ratings used to determine the Moody’s Default Probability Rating are on watch for downgrade or upgrade by Moody’s,
such rating or ratings will be adjusted down one subcategory (if on watch for downgrade) or up one subcategory
(if on watch for upgrade).

 

“Moody’s
Equivalent Senior Unsecured Rating”: With respect to any Collateral Debt Obligation and the Obligor thereof as of any
date of determination, is the rating determined in accordance with the following, in the following order of priority:

 

    	Annex III	1	 

    	 

    

 

(a)          if
the Obligor has a senior unsecured obligation with an Assigned Moody’s Rating, such Assigned Moody’s Rating;

 

(b)          if
the preceding clause does not apply, the Moody’s “Issuer Rating” for the Obligor;

 

(c)          if
the preceding clauses do not apply, but the Obligor has a subordinated obligation with an Assigned Moody’s Rating, then

 

(i)          if
such Assigned Moody’s Rating is at least “B3” (and, if rated “B3,” not on watch for downgrade), the
Moody’s Equivalent Senior Unsecured Rating shall be the rating which is one rating subcategory higher than such Assigned
Moody’s Rating, or

 

(ii)         if
such Assigned Moody’s Rating is less than “B3” (or rated “B3” and on watch for downgrade), the Moody’s
Equivalent Senior Unsecured Rating shall be such Assigned Moody’s Rating;

 

(d)          if
the preceding clauses do not apply, but the Obligor has a senior secured obligation with an Assigned Moody’s Rating, then:

 

(i)          if
such Assigned Moody’s Rating is at least “Caa3” (and, if rated “Caa3,” not on watch for downgrade),
the Moody’s Equivalent Senior Unsecured Rating shall be the rating which is one subcategory below such Assigned Moody’s
Rating, or

 

(ii)         if
such Assigned Moody’s Rating is less than “Caa3” (or rated “Caa3” and on watch for downgrade), then
the Moody’s Equivalent Senior Unsecured Rating shall be “Ca”;

 

(e)          if
the preceding clauses do not apply, but such Obligor has a Corporate Family Rating from Moody’s, the Moody’s Equivalent
Senior Unsecured Rating shall be one rating subcategory below such Corporate Family Rating;

 

(f)          if
the preceding clauses do not apply, but the Obligor has a senior unsecured obligation (other than a loan) with a monitored public
rating from S&P (without any postscripts, asterisks or other qualifying notations, that addresses the full amount of principal
and interest promised), then the Moody’s Equivalent Senior Unsecured Rating shall be:

 

(i)          one
rating subcategory below the Moody’s equivalent of such S&P rating if it is “BBB–” or higher, or

 

(ii)         two
rating subcategories below the Moody’s equivalent of such S&P rating if it is “BB+” or lower;

 

(g)          if
the preceding clauses do not apply, but the Obligor has a subordinated obligation (other than a loan) with a monitored public rating
from S&P (without any postscripts, asterisks or other qualifying notations, that addresses the full amount of principal and
interest promised), the Assigned Moody’s Rating shall be deemed to be:

 

(i)          one
rating subcategory below the Moody’s equivalent of such S&P rating if it is “BBB–” or higher;
or

 

(ii)         two
rating subcategories below the Moody’s equivalent of such S&P rating if it is “BB+” or lower,

 

    	Annex III	2	 

    	 

    

 

and the Moody’s Equivalent Senior Unsecured
Rating shall be determined pursuant to clause (c) above;

 

(h)          if
the preceding clauses do not apply, but the Obligor has a senior secured obligation with a monitored public rating from S&P
(without any postscripts, asterisks or other qualifying notations, that addresses the full amount of principal and interest promised),
the Assigned Moody’s Rating shall be deemed to be:

 

(i)          one
rating subcategory below the Moody’s equivalent of such S&P rating if it is “BBB–” or higher; or

 

(ii)         two
rating subcategories below the Moody’s equivalent of such S&P rating if it is “BB+” or lower,

 

and the Moody’s Equivalent Senior Unsecured
Rating shall be determined pursuant to clause (d) above;

 

(i)          if
the preceding clauses do not apply and each of the following clauses (i) through (viii) do apply, the Moody’s Equivalent
Senior Unsecured Rating will be “Caa1”:

 

(i)          neither
the Obligor nor any of its Affiliates is subject to reorganization or bankruptcy proceedings,

 

(ii)         no
debt securities or obligations of the Obligor are in default,

 

(iii)        neither
the Obligor nor any of its Affiliates has defaulted on any debt during the preceding two years,

 

(iv)        the
Obligor has been in existence for the preceding five years,

 

(v)         the
Obligor is current on any cumulative dividends,

 

(vi)        the
fixed-charge ratio for the Obligor exceeds 125% for each of the preceding two fiscal years and for the most recent quarter,

 

(vii)       the
Obligor had a net profit before tax in the past fiscal year and the most recent quarter, and

 

(viii)      the
annual financial statements of such Obligor are unqualified and certified by a firm of Independent accountants, and quarterly statements
are unaudited but signed by a corporate officer;

 

(j)          if
the preceding clauses do not apply but each of the following clause (i) and (ii) do apply, the Moody’s Equivalent Senior
Unsecured Rating will be “Caa3”:

 

(i)          neither
the Obligor nor any of its Affiliates is subject to reorganization or bankruptcy proceedings; and

 

(ii)         no
debt security or obligation of such Obligor has been in default during the past two years; and

 

(k)          if
the preceding clauses do not apply and a debt security or obligation of the Obligor has been in default during the past two years,
the Moody’s Equivalent Senior Unsecured Rating will be “Ca.”

 

    	Annex III	3	 

    	 

    

 

Notwithstanding the foregoing, no more than
10% of the Collateral Debt Obligations, by aggregate principal balance, may be given a Moody’s Equivalent Senior Unsecured
Rating based on a rating given by S&P as provided in clauses (f), (g) and (h) above.

 

“Moody’s
Non Senior Secured Loan”: Any Loan (other than (a) a Senior Secured Loan or (b) a Senior Secured Note or a Second Lien
Loan that has an obligation rating from Moody’s that is equal to or greater than its Obligor’s Corporate Family Rating).

 

“Moody’s
Obligation Rating”: With respect to any Collateral Debt Obligation as of any date of determination, is the rating determined
in accordance with the following, in the following order of priority:

 

(a)          any
Collateral Debt Obligation (other than a Moody’s Non Senior Secured Loan or a DIP loan):

 

(i)          if
it has an Assigned Moody’s Rating, such Assigned Moody’s Rating;

 

(ii)         if
the preceding clause does not apply, its Corporate Family Rating; or

 

(iii)        if
the preceding clause does not apply, the rating that is one rating subcategory above the Moody’s Equivalent Senior Unsecured
Rating; and

 

(b)          with
respect to a Moody’s Non Senior Secured Loan:

 

(i)          if
it has an Assigned Moody’s Rating, such Assigned Moody’s Rating; or

 

(ii)         if
the preceding clause does not apply, the Moody’s Equivalent Senior Unsecured Rating; and

 

(c)          with
respect to a DIP loan:

 

(i)          if
it has an Assigned Moody’s Rating, such Assigned Moody’s Rating; or

 

(ii)         if
the preceding clause does not apply, the Moody’s Equivalent Senior Unsecured Rating.

 

Notwithstanding the foregoing, if the Moody’s
rating or ratings used to determine the Moody’s Obligation Rating are on watch for downgrade or upgrade by Moody’s,
such rating or ratings will be adjusted down one subcategory (if on watch for downgrade) or up one subcategory
(if on watch for upgrade).

 

“Moody’s
Rating”: The Moody’s Default Probability Rating; provided, that, with respect to the Pledged Collateral
Debt Obligations generally, if at any time Moody’s or any successor to it ceases to provide rating services, references to
rating categories of Moody’s shall be deemed instead to be references to the equivalent categories of any other nationally
recognized investment rating agency designated in writing by the Portfolio Manager on behalf of the Issuer (with a copy to the
Collateral Administrator), as of the most recent date on which such other rating agency and Moody’s published ratings for
the type of security in respect of which such alternative rating agency is used. To the extent that the Issuer relies upon a credit
estimate for purposes of the Moody’s Rating of any Collateral Debt Obligation, the Portfolio Manager (on behalf of the Issuer)
will apply for renewal of such credit estimate on an annual basis.

 

    	Annex III	4	 

    	 

    

 

“Moody’s
Rating Factor”: With respect to any Collateral Debt Obligation, the number set forth
in the table below opposite the Moody’s Rating of such Collateral Debt Obligation.

 

	
        Moody’s 

        Rating
	 	
        Moody’s

        Rating

        Factor
	 	
        Moody’s

        Rating
	 	
        Moody’s

        Rating

        Factor

	Aaa*	 	1	 	Ba1	 	940
	Aa1	 	10	 	Ba2	 	1,350
	Aa2	 	20	 	Ba3	 	1,766
	Aa3	 	40	 	B1	 	2,220
	A1	 	70	 	B2	 	2,720
	A2	 	120	 	B3	 	3,490
	A3	 	180	 	Caa1	 	4,770
	Baa1	 	260	 	Caa2	 	6,500
	Baa2	 	360	 	Caa3	 	8,070
	Baa3	 	610	 	Ca, C or lower	 	10,000

 

*  or any obligation issued
or guaranteed as to the payment of principal and interest by the United States of America or any agency or instrumentality thereof
the obligations of which are expressly backed by the full faith and credit of the United States of America.

 

“Obligor”:
The obligor under a Collateral Debt Obligation.

 

    	Annex III	5	 

    	 

    

 

ANNEX
IV

 

S&P
RATING SCHEDULE

 

“S&P Rating”:
With respect to any Collateral Debt Obligation, the rating determined as follows: provided, however, (a) if such
Collateral Debt Obligation is (x) on watch for upgrade by S&P it shall be treated as upgraded by one rating subcategory
or (y) on watch for downgrade by S&P it shall be treated as downgraded by one rating subcategory, unless S&P has notified
the Portfolio Manager in writing that such treatment is no longer required, (b) if it is a DIP loan with a rating by S&P
as published by S&P, its S&P Rating shall be such rating, (c) if it is a structured finance obligation, its S&P Rating
shall be determined based on clause (v) and (d) if it is a current pay obligation, its S&P Rating shall be determined based
on clause (vi):

 

(i)          if
there is an issuer credit rating by S&P as published by S&P (or rating on a guarantor that unconditionally and irrevocably
guarantees such Collateral Debt Obligation), then the S&P Rating of such Collateral Debt Obligation shall be such rating;

 

(ii)         if
there is not an issuer credit rating by S&P but there is a rating by S&P on a senior unsecured obligation of the obligor,
then the S&P Rating of such Collateral Debt Obligation shall be such rating;

 

(iii)        if
such Collateral Debt Obligation is a senior secured or senior unsecured obligation of the obligor:

 

(A)         if
there is not an issuer credit rating or a rating on a senior unsecured obligation of the obligor by S&P, but there is a rating
by S&P on a senior secured obligation of the obligor, then the S&P Rating of such Collateral Debt Obligation shall be
one subcategory below such rating; and

 

(B)         if
there is not an issuer credit rating or a rating on a senior unsecured or senior secured obligation of the obligor by S&P,
but there is a rating by S&P on a subordinated obligation of the obligor, then the S&P Rating of such Collateral Debt
Obligation shall be one subcategory above such rating if such rating is higher than “BB+” and will be two subcategories
above such rating if such rating is “BB+” or lower;

 

(iv)        if
clauses (i) through (iii) do not apply, then the S&P Rating of such Collateral Debt Obligation may be determined using any
one of the methods below:

 

(A)         if
an obligation of the obligor has a published rating from Moody’s then the S&P Rating will be determined in accordance
with the methodologies for establishing the Moody’s Rating, except that the S&P Rating of such Collateral Debt Obligation
shall be (1) one subcategory below the S&P equivalent of the rating assigned by Moody’s if such Collateral Debt
Obligation is rated “Baa3” or higher by Moody’s and (2) two subcategories below the S&P equivalent
of the rating assigned by Moody’s if such Collateral Debt Obligation is rated “Ba1” or lower by Moody’s;
provided that no more than 15% of the Collateral Debt Obligations, by aggregate principal balance, may be given an S&P
Rating based on a rating given by Moody’s as provided in this subclause (A); or

 

    	Annex IV	1	 

    	 

    

 

(B)         if
no other security or obligation of the obligor is rated by S&P or Moody’s, then the Issuer or the Portfolio Manager
on behalf of the Issuer, shall apply to S&P for a rating estimate, which shall be its S&P Rating; provided that,
pending receipt, its S&P Rating will be determined as set forth in clause (vii) below;

 

(v)         if
it is a structured finance obligation, 

 

(A)         if
such obligation has a published rating from S&P, then its S&P Rating shall be such rating;

 

(B)         if
such obligation does not have a published rating from S&P but has a published rating from Moody’s, then the S&P
Rating shall be determined in accordance with the methodologies for establishing the Moody’s Rating, except that the S&P
Rating of such structured finance obligation shall be (1) two subcategories below the S&P equivalent of the rating assigned
by Moody’s if such structured finance obligation is rated “Baa3” or higher by Moody’s and (2) three subcategories
below the S&P equivalent of the rating assigned by Moody’s if such structured finance obligation is rated “Ba1”
or lower by Moody’s; provided that no more than 15% of the Collateral Debt Obligations, by aggregate principal balance,
may be given an S&P Rating based on a rating given by Moody’s as provided in this subclause (B); or

 

(C)         if
neither clause (A) nor (B) applies, then the Issuer or the Portfolio Manager on behalf of the Issuer, shall apply to S&P for
a rating estimate, which shall be its S&P Rating; provided that, pending receipt, its S&P Rating will be determined
as set forth in clause (vii) below;

 

(vi)        if
it is a current pay obligation, then its S&P Rating will be determined as follows.

 

(A)         if
the Issuer owns only one issue of debt obligation of an issuer with a distressed exchange offer pending, then (1) with respect
to a current pay obligation ranking higher in priority (before and after the exchange) than the obligation subject to the distressed
exchange offer, the higher of (x) the rating derived by adjusting such current pay obligation’s issue rating up or down
by the number of notches specified in Table 1 below for its related asset specific recovery rating and (y) “CCC-,”
and (ii) with respect to any other such current pay obligation, “CCC-”, and

 

(B)         if
the Issuer owns more than one issue of obligations of an issuer with a distressed exchange offer pending, then with respect to
each such current pay obligation, the rating corresponding to the weighted average rating “points” in Table 2 below
calculated by dividing (1) the sum of the products of (x) the outstanding par amount of each current pay obligation multiplied
by (y) the rating “points” in Table 2 below corresponding to the rating of such current pay obligation as determined
pursuant to clause (A) above by (2) the aggregate outstanding par amount of all such current pay obligations issued by the issuer
with the distressed exchange offer pending.

 

    	Annex IV	2	 

    	 

    

 

(vii)       if
the Issuer has applied for a credit estimate at the time of the acquisition of a Collateral Debt Obligation, pending receipt from
S&P of such estimate, the S&P Rating of such Collateral Debt Obligation shall be the credit estimate that the Portfolio
Manager believes will be provided by S&P, in each case for no more than 90 days (unless S&P grants an extension) after
which the S&P Rating will be “CCC-”; provided, that to the extent that the Issuer relies upon a credit
estimate, it must be renewed annually, and pending receipt of such renewal, the S&P Rating shall be that of the expiring credit
estimate for no more than 90 days after the 12 month anniversary (unless S&P grants an extension) after which the S&P
Rating will be “CCC-.”

 

Table 1

 

	Asset Specific Recovery Rating	 	
        Notches to Derive Rating from

        Issue Rating

	1+	 	-3
	1	 	-2
	2	 	-1
	3	 	0
	4	 	0
	5	 	+1
	6	 	+2
	None	 	Not available for notching

 

Table 2

 

	Rating	 	Rating “Points”
	AAA	 	1
	AA+	 	2
	AA	 	3
	AA-	 	4
	A+	 	5
	A	 	6
	A-	 	7
	BBB+	 	8
	BBB	 	9
	BBB-	 	10
	BB+	 	11
	BB	 	12
	BB-	 	13
	B+	 	14
	B	 	15
	B-	 	16
	CCC+	 	17

 

With respect to the Collateral
Debt Obligations generally, if at any time S&P (or its successor) ceases to provide rating services, references to rating categories
of S&P shall be deemed instead to be references to the equivalent categories of any other nationally recognized investment
rating agency designated in writing by the Portfolio Manager on behalf of the Issuer (with written notice to the Collateral Administrator),
as of the most recent date on which such other rating agency and S&P published ratings for the type of security in respect
of which such alternative rating agency is used. The Collateral Administrator, the Issuer and the Portfolio Manager shall not disclose
any such estimated rating received from S&P. 

 

    	Annex IV	3	 

    	 

    

 

ANNEX
V

 

S&P’S
CDO MONITOR ASSET CLASSIFICATIONS

 

	1	 	Aerospace & defense
	2	 	Air transport
	3	 	Automotive
	4	 	Beverage & tobacco
	5	 	Radio & television
	6	 	[reserved]
	7	 	Building & development
	8	 	Business equipment & services
	9	 	Cable & satellite television
	10	 	Chemicals & plastics
	11	 	Clothing/textiles
	12	 	Conglomerates
	13	 	Containers & glass products
	14	 	Cosmetics/toiletries
	15	 	Drugs
	16	 	Ecological services & equipment
	17	 	Electronics/electrical
	18	 	Equipment leasing
	19	 	Farming/agriculture
	20	 	Financial intermediaries
	21	 	Food/drug retailers
	22	 	Food products
	23	 	Food service
	24	 	Forest products
	25	 	Health care
	26	 	Home furnishings
	27	 	Lodging & casinos
	28	 	Industrial equipment
	29	 	[reserved]
	30	 	Leisure goods/activities/movies
	31	 	Nonferrous metals/minerals
	32	 	Oil & gas
	33	 	Publishing
	34	 	Rail industries
	35	 	Retailers (except food & drug)
	36	 	Steel
	37	 	Surface transport
	38	 	Telecommunications
	39	 	Utilities
	40	 	Mortgage REITs
	41	 	Equity REITs and REOCs
	42	 	[reserved]
	43	 	Life insurance
	44	 	Health insurance
	45	 	Property & casualty insurance
	46	 	Diversified insurance

 

    	Annex V	1	 

    	 

    

 

ANNEX VI

 

INITIAL PORTFOLIO

 

TO BE PROVIDED

 

    	Annex VI	1

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