Document:

EX-10.5

 Exhibit 10.5 

March 15, 2021 
 LGL Systems Acquisition
Corp. 
 165 W. Liberty St., Suite 220 
 Reno, NV 89501 

Ladies and Gentlemen: 
 This Lock-Up agreement (this “Agreement”) is entered into in connection with, and conditioned upon the consummation of the transactions contemplated by, that certain Agreement and Plan of Merger (the
“Merger Agreement”) by and among LGL Systems Acquisition Corp., a Delaware corporation (“LGL”), LGL Systems Merger Sub Inc., a Delaware corporation (“LGL Sub”), and IronNet Cybersecurity, Inc., a
Delaware corporation (“IronNet”), dated as of March 15, 2021. Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Merger Agreement. 

1. As a condition to the obligations of LGL, LGL Sub and IronNet to consummate the Merger, subject to the exceptions set forth herein, the
undersigned hereby agree that, with respect to the Acquiror Common Stock, from the date hereof through the date that is 180 days after the Closing Date, and with respect to the Acquiror Warrants, including any Acquiror Common Stock issuable upon
exercise of the Acquiror Warrants (the “Warrant Stock”), from the date hereof until thirty (30) days after the Closing Date (each period, as applicable, the “Lock-Up
Period”), the undersigned will not, without the prior written consent of the board of directors of LGL: (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Securities and Exchange Commission promulgated thereunder (the “Exchange Act”), with respect to any shares of Acquiror Common Stock, Acquiror Warrants or Warrant Stock, as applicable, held by the
undersigned (such securities, collectively, the “Lock-Up Securities”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of any of the Lock-Up Securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (any of the
foregoing described in clauses (i), (ii) or (iii), a “Prohibited Transfer”). Notwithstanding the foregoing, the shares of Acquiror Common Stock held by the undersigned shall be subject to early release from the
restrictions hereunder (and the Lock-Up Period with respect to the Acquiror Common Stock shall be deemed to have expired with respect to such Acquiror Common Stock) if and to the extent that the following
occurs after the Closing: (i) if the closing price of the Acquiror Common Stock on the principal securities exchange or securities market on which the Acquiror Common Stock is then traded (the “Closing Stock Price”) equals or
exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) days on which national stock exchanges are open for trading (each such day, a “Trading
Day”) within any thirty (30) Trading Day period beginning one hundred and fifty (150) Trading Days after the Closing or (ii) the date on which LGL completes a liquidation, merger, capital stock exchange or other similar
transaction that results in all of LGL’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. 
  

 2. The undersigned hereby (a) authorizes LGL during the applicable Lock-Up Period to cause its transfer agent for the applicable Lock-Up Securities to decline to transfer, and to note stop transfer restrictions on the stock register and other
records relating to, such Lock-Up Securities for which the undersigned is the record holder and, (b) in the case of Lock-Up Securities for which the undersigned is
the beneficial but not the record holder, agrees during the applicable Lock-Up Period to cause the record holder to cause the relevant transfer agent to decline to transfer, and to note stop transfer
restrictions on the stock register and other records relating to, such Lock-Up Securities, in each case of clauses (a) and (b), if such transfer would constitute a violation or breach of this Agreement.
LGL agrees to instruct its transfer agent to remove any stop transfer restrictions on the stock register and other records related to the applicable Lock-Up Securities promptly upon the expiration of the
applicable Lock-Up Period. If any Prohibited Transfer is made or attempted contrary to the provisions of this Agreement, such purported Prohibited Transfer shall be null and void ab initio. 

3. During the applicable Lock-Up Period, each certificate evidencing any
Lock-Up Securities shall be stamped or otherwise imprinted with a legend in substantially the following form, in addition to any other applicable legends: 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A
LOCK-UP AGREEMENT, DATED AS OF MARCH 15, 2021, BY AND AMONG LGL SYSTEMS ACQUISITION CORP. (“LGL”) AND THE SECURITY HOLDER NAMED THEREIN, AS AMENDED. A COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.” 

4. Notwithstanding the foregoing, the undersigned may sell or otherwise transfer Lock-Up Securities
during the undersigned’s lifetime or on death (or, if the undersigned is not a natural person, during its existence): (i) if the undersigned is not a natural person, to its direct or indirect equity holders or to any of its other
Affiliates, (ii) to the immediate family members (including spouses, domestic partners, lineal descendants and ascendants (including adopted and step children and parents of such person)), brothers and sisters (including half-sibling and
step-siblings) of the undersigned or the undersigned’s spouse or siblings (collectively, “Family Members”), (iii) to a family trust, foundation or partnership established for the exclusive benefit of the undersigned, its
equity holders or any of their respective Family Members, (iv) pursuant to a court order or settlement agreement related to the distribution of assets in connection with the dissolution of marriage or civil union; (v) to a charitable
foundation controlled by the undersigned, its equityholders or any of their respective Family Members; (vi) as a bona fide gift; (vii) by will or intestate succession upon the death of the undersigned; (viii) as security or collateral
in connection any borrowing or the incurrence of indebtedness by the undersigned; (ix) pursuant to a bona fide third-party tender offer, merger, stock sale, recapitalization, consolidation or other transaction involving a Change in Control (as
defined below) of LGL, provided that in the event that such tender offer, merger, recapitalization, consolidation or other such transaction is not completed, the Lock-Up Shares shall remain subject to this
Agreement; “Change in Control” means the transfer (whether by tender offer, merger, stock purchase, consolidation or other similar transaction), after the Closing Date, in one transaction or a series of related transactions, to a person or
group of affiliated persons of LGL’s voting securities if, after such transfer, such person or 

  
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group of affiliated persons would hold more than 50% of outstanding voting securities of LGL (or surviving entity) or would otherwise have the power to control the board of directors of LGL;
(x) pursuant to the establishment of a trading plan pursuant to Rule 10b5-1 promulgated under the Exchange Act, provided that such plan prohibits the transfer of Lock- Up Shares during the Lock-Up Period; (xi) acquired as part of the PIPE Investments or issued in exchange for, or on conversion or exercise of, any securities issued as part of the PIPE Investments; (xii) acquired in open
market transactions after the Closing Date; (xiii) acquired upon the exercise of stock options or warrants to purchase shares of Acquiror Common Stock or the vesting of stock awards of Acquiror Common Stock and any related transfer of Acquiror
Common Stock to the Company in connection therewith (1) deemed to occur upon the “cashless” or “net” exercise of such options or warrants or (2) for the purpose of paying the exercise price of such options or warrants
or for paying taxes due as a result of the exercise of such options or warrants, the vesting of such options, warrants or stock awards, or as a result of the vesting of such shares of Acquiror Common Stock, it being understood that all shares of
Acquiror Common Stock received upon such exercise, vesting or transfer will remain subject to the restrictions of this Agreement during the Lock-Up Period; and (xiv) to LGL pursuant to any contractual
arrangement in effect at the Closing Date that provides for the repurchase by LGL or forfeiture of Acquiror Common Stock or other securities convertible into or exercisable or exchangeable for Acquiror Common Stock in connection with the termination
of the holder’s service to LGL; provided, however, that in the case of clauses (i) though (ix) above, any such sale or transfer shall be conditioned upon entry by such transferees into a written agreement, addressed to LGL, agreeing to be
bound by these transfer restrictions and the other terms and conditions of this Agreement. For the avoidance of doubt, the undersigned shall retain all of its rights as a shareholder of LGL with respect to the
Lock-Up Securities during the Lock-Up Period, including without limitation the right to vote any Lock-Up Securities that are
entitled to vote and the right to receive any dividends or distributions in respect of such Lock-Up Securities. 

5. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this
Agreement constitutes the legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms. Upon request, the undersigned will execute any additional documents reasonably necessary to give effect to the terms and
conditions of this Agreement. 
 6. This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the
subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof; provided, however, that the foregoing
shall not affect the rights and obligations of the parties under the Merger Agreement or any documents related thereto, including the Registration Rights Agreement. This Agreement may not be changed, amended, modified or waived as to any particular
provision, except by a written instrument executed by all parties hereto. 
 7. Subject to Section 3 hereof, no
party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and
shall not operate to transfer or assign any interest or title to the purported assignee. This Agreement shall be binding upon and inure to the benefit of the undersigned and its successors and assigns. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any facsimile or .pdf copies hereof or signatures hereon shall, for all purposes, be deemed originals. 

  
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 8. Notwithstanding anything to the contrary contained herein, in the event that the Merger
Agreement is terminated in accordance with its terms prior to the Closing Date, this Agreement and all rights and obligations of the parties hereunder shall automatically terminate and be of no further force or effect. 

9. This Agreement, and all claims or causes of action based upon, arising out of, or related to this Agreement or the transactions contemplated
hereby, shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of
laws of another jurisdiction. 
 10. Any Action based upon, arising out of or related to this Agreement or the transactions contemplated
hereby may be brought in federal and state courts located in the State of Delaware, and each of the parties hereto irrevocably submits to the exclusive jurisdiction of each such court in any such Action, waives any objection it may now or hereafter
have to personal jurisdiction, venue or to convenience of forum, agrees that all claims in respect of the Action shall be heard and determined only in any such court, and agrees not to bring any Action arising out of or relating to this Agreement or
the transactions contemplated hereby in any other court. Nothing herein contained shall be deemed to affect the right of any party hereto to serve process in any manner permitted by Law or to commence legal proceedings or otherwise proceed against
any other party hereto in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this section. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION BASED
UPON, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 
 11. Any notice, consent or request to be given
in connection with any of the terms or provisions of this Agreement shall be completed in accordance with Section 5.01 of the Registration Rights Agreement. 

[Signature on the following page] 

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

			
	LGL:
	
	 LGL Systems Acquisition Corp.,
 a
Delaware corporation

		
	By:	 	  

		 	Name:
		 	Title:

 {Signature Page to Lock-Up Agreement}

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

	
	Holder:
	
	Name of Holder:
	
	By: _________________________________
	Name:
	Title:
	
	Address for Notice:
	
	Address:                                     
                        
	  

	  

	Facsimile
No.:                                        
          
	Telephone
No.:                                        
        
	Email:                                     
                         

 {Signature Page to Lock-Up Agreement}Exhibit 10.1

 

INVESTMENT ADVISORY AND 

ADMINISTRATIVE SERVICES AGREEMENT 

BETWEEN 

TERRA INCOME FUND 6, INC.

AND 

TERRA INCOME ADVISORS, LLC 

 

This Investment Advisory
and Administrative Services Agreement (this “Agreement”) is made this 22nd day of September,
2021, by and between TERRA INCOME FUND 6, INC., a Maryland corporation (the “Company”), and TERRA INCOME
ADVISORS, LLC, a Delaware limited liability company (the “Advisor”).

 

RECITALS

 

WHEREAS, the Company
is a non-diversified, closed-end management investment company that intends to elect to be treated as a business development company (“BDC”)
under the Investment Company Act of 1940, as amended (the “Investment Company Act”);

 

WHEREAS, the Advisor
is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”);
and

 

WHEREAS, the Company
desires to retain the Advisor to furnish investment advisory services to the Company and to provide for the administrative services necessary
for the operation of the Company on the terms and conditions set forth herein, and the Advisor wishes to be retained to provide such services.

 

AGREEMENT

 

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

 

1.             Duties
of the Advisor.

 

(a)           Retention
of Advisor. The Company hereby employs the Advisor to act as the investment adviser to the Company and to manage the investment and
reinvestment of the assets of the Company, subject to the supervision of the board of directors of the Company (the “Board”),
for the period and upon the terms set forth herein:

 

(i)       in
accordance with the investment objectives, policies and restrictions that are set forth in the Company’s Registration Statement
on Form N-2 filed with the Securities and Exchange Commission (the “SEC”) (File No. 333-202399), as amended
from time to time (the “Registration Statement”);

 

(ii)       in
accordance with all other applicable federal and state laws, rules and regulations, and the Company’s Articles of Amendment and
Restatement (the “Articles”) and bylaws (the “Bylaws”), in each case as amended from
time to time;

 

(iii)       in
accordance with such investment policies, directives and regulatory restrictions as the Company may from time to time establish or issue
and communicate to the Advisor in writing; and

 

(iv)       in
accordance with the Company’s compliance policies and procedures as applicable to the Advisor and as administered by the Company’s
chief compliance officer.

 

(b)           Responsibilities
of Advisor. Without limiting the generality of the foregoing, the Advisor shall, during the term and subject to the provisions of
this Agreement:

 

(i)       determine
the composition and allocation of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing
such changes;

 

(ii)       identify,
evaluate and negotiate the structure of the investments made by the Company;

 

     

     

    

 

(iii)       execute,
close, service and monitor the Company’s investments;

 

(iv)       determine
the securities and other assets that the Company shall purchase, retain or sell;

 

(v)       perform
due diligence on prospective portfolio companies; and

 

(vi)       provide
the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably request
or require for the investment of its funds and the disposition of such investments.

 

(c)           Power
and Authority. To facilitate the Advisor’s performance of these undertakings, but subject to the restrictions contained herein,
the Company hereby delegates to the Advisor, and the Advisor hereby accepts, the power and authority on behalf of the Company to effectuate
its investment decisions for the Company, including the execution and delivery of all documents relating to the Company’s investments
and the placing of orders for other purchase or sale transactions on behalf of the Company. In the event that the Company determines to
acquire debt financing, the Advisor shall arrange for such financing on the Company’s behalf, subject to the oversight and approval
of the Board.

 

(d)           Administrative
Services. Subject to the supervision, direction and control of the Board, the provisions of the Articles and Bylaws and applicable
federal and state law, the Advisor shall perform, or cause to be performed by other persons, all administrative services in connection
with the operation of the Company.

 

(e)          Acceptance
of Employment. The Advisor hereby accepts such employment and agrees during the term hereof to render the services described herein
for the compensation provided herein, subject to the limitations contained herein.

 

(f)           Sub-Advisors.
The Advisor is hereby authorized to enter into one or more sub-advisory agreements with other investment advisers (each, a “Sub-Advisor”)
pursuant to which the Advisor may obtain the services of the Sub-Advisor(s) to assist the Advisor in fulfilling its responsibilities hereunder.
Specifically, the Advisor may retain a Sub-Advisor to recommend specific securities or other investments based upon the Company’s
investment objectives, policies and restrictions, and work, along with the Advisor, in sourcing, structuring, negotiating, arranging or
effecting the acquisition or disposition of such investments and monitoring investments on behalf of the Company, subject to the oversight
of the Advisor and the Company.

 

(i)       The
Advisor and not the Company shall be responsible for any compensation payable to any Sub-Advisor.

 

(ii)       Any
sub-advisory agreement entered into by the Advisor shall be in accordance with the requirements of the Investment Company Act, including
without limitation the requirements relating to Board approval and the Company’s stockholder approval thereunder, and other applicable
federal and state law.

 

(iii)       Any
Sub-Advisor shall be subject to the same fiduciary duties imposed on the Advisor pursuant to this Agreement, the Investment Company Act
and the Advisers Act, as well as other applicable federal and state law.

 

(g)           Independent
Contractor Status. The Advisor shall, for all purposes herein provided, be deemed to be an independent contractor and, except as expressly
provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an agent
of the Company.

 

(h)           Record
Retention. Subject to review by, and the overall control of, the Board, the Advisor shall keep and preserve for the period required
by the Investment Company Act any books and records relevant to the provision of its investment advisory services to the Company and shall
specifically maintain all books and records with respect to the Company’s portfolio transactions and shall render to the Board such
periodic and special reports as the Board may reasonably request or as may be required under applicable federal and state law, and shall
make such records available for inspection by the Board and its authorized agents, at any time and from time to time during normal business
hours. The Advisor agrees that all records that it maintains for the Company are the property of the Company and shall surrender promptly
to the Company any such records upon the Company’s request and upon termination of this Agreement pursuant to Section 9, provided
that the Advisor may retain a copy of such records.

 

    2

     

    

 

The following provisions in this Section 1
shall apply for only so long as the shares of common stock of the Company (“Shares”) are not listed on a national securities
exchange. 

 

(i)           Administrator.
The Advisor shall, upon request by an official or agency administering the securities laws of a state, province or commonwealth (an “Administrator”),
submit to such Administrator the reports and statements required to be distributed to the Company’s stockholders pursuant to this
Agreement, the Registration Statement and applicable federal and state law.

 

(j)           Fiduciary
Duty. It is acknowledged that the Advisor shall have a fiduciary responsibility for the safekeeping and use of all funds and assets
of the Company, whether or not in the Advisor’s immediate possession or control. The Advisor shall not employ, or permit another
to employ, such funds or assets in any manner except for the exclusive benefit of the Company. The Advisor shall not, by entry into an
agreement with any stockholder of the Company or otherwise, contract away the fiduciary obligation owed to the Company and the Company’s
stockholders under common law.

 

2.            The Company’s
Responsibilities and Expenses Payable by the Company.

 

(a)           Advisor
Personnel. All personnel of the Advisor, when and to the extent engaged in providing investment advisory services hereunder, and the
compensation and routine overhead expenses of such personnel allocable to such services, shall be provided and paid for by the Advisor
and not by the Company.

 

(b)          Costs.
Subject to the limitations on reimbursement of the Advisor as set forth in Section 2(c) below, the Company, either directly or through
reimbursement to the Advisor, shall bear all other costs and expenses of its operations and transactions, including (without limitation):
expenses deemed to be “organization and offering expenses” of the Company for purposes of Conduct Rule 2310(a)(12) of
Financial Industry Regulatory Authority, Inc. (for purposes of this Agreement, such expenses, exclusive of commissions, the dealer manager
fee and any discounts, are hereinafter referred to as “Organization and Offering Expenses”); corporate and organizational
expenses relating to offerings of Shares, subject to limitations included in the Agreement; the cost of calculating the Company’s
net asset value, including the cost of any third-party valuation firms; the cost of effecting sales and repurchases of Shares and other
securities; fees payable to third parties relating to, or associated with, making investments and valuing investments, including fees
and expenses associated with performing due diligence reviews of prospective investments; transfer agent and custodial fees, fees and
expenses associated with marketing efforts (including attendance at investment conferences and similar events); federal and state registration
fees; federal, state and local taxes; independent directors’ fees and expenses; brokerage commissions for the Company’s investments;
costs of proxy statements, stockholders’ reports, notices and other filings; fidelity bond, directors and officers errors and omissions
liability insurance and other insurance premiums; direct costs such as printing, mailing, long-distance telephone and staff costs associated
with the Company’s reporting and compliance obligations under the Investment Company Act and applicable federal and state securities
laws, including compliance with the Sarbanes-Oxley Act; fees and expenses associated with accounting, corporate governance, independent
audits and outside legal costs; and all other expenses incurred by the Advisor, any Sub-Advisor or the Company in connection with administering
the Company’s business, including expenses incurred by the Advisor or any Sub-Advisor in performing administrative services for
the Company, and the reimbursement of the compensation of the Company’s chief financial officer and chief compliance officer paid
by the Advisor, to the extent they are not controlling persons of the Advisor or any of its affiliates.

 

Notwithstanding the foregoing, the Company shall
not be liable for Organization and Offering Expenses to the extent that Organization and Offering Expenses, together with all prior Organization
and Offering Expenses, exceed 1.5% of the aggregate gross proceeds from the Company’s offering of Shares (the “Reimbursable
O&O Expenses”).

 

    3

     

    

 

The following provisions in this Section 2(c) shall apply
for only so long as the Shares are not listed on a national securities exchange. 

 

(c)           Limitations
on Reimbursement of Expenses.

 

(i) In addition
to the compensation paid to the Advisor pursuant to Section 3, the Company shall reimburse the Advisor for all expenses of the Company
incurred by the Advisor as well as the actual cost of goods and services used for or by the Company and obtained from entities not affiliated
with the Advisor. The Advisor may be reimbursed for the administrative services performed by it on behalf of the Company; provided, however,
the reimbursement shall be an amount equal to the lesser of the Advisor’s actual cost or the amount the Company would be required
to pay third parties for the provision of comparable administrative services in the same geographic location; and provided, further, that
such costs are reasonably allocated to the Company on the basis of assets, revenues, time records or other method conforming with generally
accepted accounting principles. No reimbursement shall be permitted for services for which the Advisor is entitled to compensation by
way of a separate fee. Excluded from the allowable reimbursement shall be:

 

(A) rent or depreciation,
utilities, capital equipment and other costs of administrative items of the Advisor; and

 

(B) salaries, fringe
benefits, travel expenses and other administrative items incurred or allocated to any executive officer or board member of the Advisor
(or any individual performing such services) or a holder of 10% or greater equity interest in the Advisor (or any person having the power
to direct or cause the direction of the Advisor, whether by ownership of voting securities, by contract or otherwise).

 

(d)           Periodic
Reimbursement. Expenses incurred by the Advisor on behalf of the Company and payable pursuant to this Section 2 shall be reimbursed
no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses of the Company and the calculation
of the reimbursement and shall deliver such statement to the Company prior to full reimbursement.

 

3.             Compensation
of the Advisor. The Company agrees to pay, and the Advisor agrees to accept, as compensation for the services provided by the Advisor
hereunder, a base management fee (the “Base Management Fee”) and an incentive fee (the “Incentive
Fee”) as set forth herein. See Appendix A attached hereto for examples of how these fees are calculated.

 

(a)           Base
Management Fee. The Base Management Fee shall be calculated at an annual rate of 2.0% of the Company’s average gross assets.
The Base Management Fee shall be payable quarterly in arrears, and shall be calculated based on the average value of the Company’s
gross assets at the end of the two most recent completed calendar quarters. All or any part of the Base Management Fee not taken as to
any quarter shall be deferred without interest and may be taken in such other quarter as the Advisor shall determine.

 

(b)          Incentive
Fee. The Incentive Fee shall consist of two parts, as follows:

 

(i) The first part,
referred to as the “Subordinated Incentive Fee on Income,” shall be calculated and payable quarterly in arrears
based on the Company’s “Pre-Incentive Fee Net Investment Income” for the immediately preceding quarter.
The payment of the Subordinated Incentive Fee on Income shall be subject to payment of a preferred return to investors each quarter, expressed
as a quarterly rate of return on Adjusted Capital (as defined below) at the beginning of the most recently completed calendar quarter,
of 2.0% (8.0% annualized), subject to a “catch up” feature (as described below).

 

For purposes of this fee, “Pre-Incentive
Fee Net Investment Income” means interest income, dividend income and any other income (including any other fees, other
than fees for providing managerial assistance, such as commitment, origination, structuring, diligence and consulting fees or other fees
that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses
for the quarter (including the Base Management Fee, expenses payable under this Agreement and any interest expense and dividends paid
on any issued and outstanding preferred shares, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income includes, in
the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest
and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income does
not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

 

    4

     

    

 

For purposes of this fee, “Adjusted
Capital” shall mean cumulative gross proceeds generated from sales of the Shares (including proceeds from the Company’s
distribution reinvestment plan) reduced for distributions from non-liquidating dispositions of the Company’s investments paid to
stockholders and amounts paid for share repurchases pursuant to the Company’s share repurchase program.

 

The calculation of the Subordinated
Incentive Fee on Income for each quarter is as follows:

 

(A) No Subordinated
Incentive Fee on Income shall be payable to the Advisor in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment
Income does not exceed the preferred return rate of 2.0% or 8.0% annualized (the “Preferred Return”)
on Adjusted Capital;

 

(B) 100% of the Company’s
Pre-Incentive Fee Net Investment Income, if any, that exceeds the preferred return but is less than or equal to 2.5% in any calendar quarter
(10% annualized) shall be payable to the Advisor, all or any portion of which may be waived or deferred in the Advisor’s discretion.
This portion of the Company’s Subordinated Incentive Fee on Income is referred to as the “catch up” and is intended
to provide the Advisor with an incentive fee of 20% on all of the Company’s Pre-Incentive Fee Net Investment Income when the Company’s
Pre-Incentive Fee Net Investment Income reaches 2.5% (10% annualized) in any calendar quarter; and

 

(C) For any quarter
in which the Company’s Pre-Incentive Fee Net Investment Income exceeds 2.5% (10% annualized), the Subordinated Incentive Fee on
Income shall equal 20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, as the Preferred Return and catch
up will have been achieved.

 

(ii) The second
part of the Incentive Fee, referred to as the “Incentive Fee on Capital Gains,” shall be an incentive fee on
capital gains earned on liquidated investments from the portfolio and payable in arrears as of the end of each calendar year (or upon
termination of the investment advisory Agreement). This fee shall equal 20.0% of the Company’s incentive fee capital gains, which
shall equal the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable
period, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount
of any previously paid capital gain incentive fees.

 

(c)           Waiver
or Deferral of Fees.

 

The Advisor shall have the
right to elect to temporarily or permanently waive or defer all or a portion of the Base Management Fee or Incentive Fee that would otherwise
be paid to it. Prior to the payment of any fee to the Advisor, the Company shall obtain written instructions from the Advisor with respect
to any waiver or deferral of any portion of such fees. Any portion of a deferred fee payable to the Advisor and not paid over to the Advisor
with respect to any month, calendar quarter or year shall be deferred without interest and may be paid over in any such other month prior
to the occurrence of termination of this Agreement, as the Advisor may determine upon written notice to the Company. Any of the fees payable
to the Advisor under this Agreement for any partial month or calendar quarter shall be appropriately prorated.

 

    5

     

    

 

4.             Covenants
of the Advisor.

 

(a)            Advisor
Status. The Advisor covenants that it will be registered as an investment Advisor under the Advisers Act as of the date the Company
commences investment operations and will maintain such registration. The Advisor agrees that its activities will at all times be in compliance
in all material respects with all applicable federal and state laws governing its operations and investments.

 

The following provisions in this Section 4
shall apply for only so long as the Shares are not listed on a national securities exchange. 

 

(b)           Reports
to Stockholders. The Advisor shall prepare or shall cause to be prepared and distributed to the Company’s stockholders during
each year the following reports of the Company (either included in a periodic report filed with the SEC or distributed in a separate report):

 

(i) Quarterly Reports.
Within 60 days of the end of each calendar quarter, a report containing the same financial information contained in the Company’s
Quarterly Report on Form 10-Q filed by the Corporation under the Securities Exchange Act of 1934, as amended.

 

(ii) Annual Report.
Within 120 days after the end of the Company’s fiscal year, an annual report containing:

 

(A) A balance sheet
as of the end of each fiscal year and statements of income, equity and cash flow, for the year then ended, all of which shall be prepared
in accordance with generally accepted accounting principles and accompanied by an auditor’s report containing an opinion of an independent
certified public accountant;

 

(B) A report of the
activities of the Company during the period covered by the report;

 

(C) Where forecasts
have been provided to the Company’s stockholders, a table comparing the forecasts previously provided with the actual results during
the period covered by the report; and

 

(D) A report setting
forth distributions by the Company for the period covered thereby and separately identifying distributions from (a) cash flow from operations
during the period, (b) cash flow from operations during a prior period which have been held as reserves and (c) proceeds from disposition
of the Company’s assets.

 

(iii) Previous Reimbursement
Reports. The Advisor shall prepare or shall cause to be prepared a report, prepared in accordance with the American Institute of Certified
Public Accountants United States Auditing Standards relating to special reports, and distributed to stockholders not less than annually,
containing an itemized list of the costs reimbursed to the Advisor pursuant to Section 2(c) for the previous fiscal year. The special
report shall at a minimum provide:

 

(A) A review of the
time records of individual employees, the costs of whose services were reimbursed; and

 

(B) A review of the
specific nature of the work performed by each such employee.

 

(iv) Proposed Reimbursement
Reports. The Advisor shall prepare or shall cause to be prepared a report containing an itemized estimate of all proposed expenses for
which it shall receive reimbursements pursuant to Section 2(c) for the next fiscal year, together with a breakdown by year of such expenses
reimbursed in each of the last five public programs formed by the Advisor.

 

(c)           Reports
to Administrators. The Advisor shall, upon written request of any Administrator, submit any of the reports and statements to be prepared
and distributed by it pursuant to this Section 4 to such Administrator.

 

    6

     

    

 

(d)           Reserves.
In performing its duties hereunder, the Advisor shall cause the Company to provide for adequate reserves for normal replacements and contingencies
(but not for payment of fees payable to the Advisor hereunder) by causing the Company to retain a reasonable percentage of proceeds from
offerings and revenues.

 

(e)           Recommendations
Regarding Reviews. From time to time and not less than quarterly, the Advisor must review the Company’s accounts to determine
whether cash distributions are appropriate. The Company may, subject to authorization by the Board, distribute pro rata to its stockholders
funds received by the Company which the Advisor deems unnecessary to retain in the Company.

 

(f)           Temporary
Investments. The Advisor shall, in its sole discretion, temporarily place proceeds from offerings by the Company into short-term,
highly liquid investments which, in its reasonable judgment, afford appropriate safety of principal during such time as it is determining
the composition and allocation of the portfolio of the Company and the nature, timing and implementation of any changes thereto pursuant
to Section 1(b); provided however, that the Advisor shall be under no fiduciary obligation to select any such short-term, highly-liquid
investment based solely on any yield or return of such investment. The Advisor shall cause any proceeds of the offering of the Company’s
securities not committed for investment within the later of two years from the date of effectiveness of the Registration Statement or
one year from termination of the Company’s offering, unless a longer period is permitted by the applicable Administrator, to be
paid as a distribution to the stockholders of the Company as a return of capital without deduction of Front End Fees (as defined below).

 

5.             Brokerage Commissions;
Limitations on Front End Fees; Period of Offering; Assessments.

 

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

 

The following provisions in this Section 5
shall apply for only so long as the Shares are not listed on a national securities exchange. 

 

(b)          Limitations.
Notwithstanding anything herein to the contrary:

 

(i) All fees and
expenses paid by any party for any services rendered to organize the Company and to acquire assets for the Company (“Front
End Fees”) shall be reasonable and shall not exceed 15% of the gross offering proceeds, regardless of the source of payment.
Any reimbursement to the Advisor or any other person for deferred organizational and offering expenses, including any interest thereon,
if any, will be included within this 15% limitation.

 

(ii) The Advisor
shall commit at least 82% of the gross offering proceeds toward the investment or reinvestment of assets and reserves as set forth in
Section 4(d) on behalf of the Company. The remaining proceeds may be used to pay Front End Fees.

 

    7

     

    

 

6.             Other
Activities of the Advisor.

 

The services of the Advisor
to the Company are not exclusive, and the Advisor may engage in any other business or render similar or different services to others including,
without limitation, the direct or indirect sponsorship or management of other investment based accounts or commingled pools of capital,
however structured, having investment objectives similar to those of the Company, so long as its services to the Company hereunder are
not impaired thereby, and nothing in this Agreement shall limit or restrict the right of any manager, partner, member (including its members
and the owners of its members), officer or employee of the Advisor to engage in any other business or to devote his or her time and attention
in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith
(including fees for serving as a director of, or providing consulting services to, one or more of the Company’s portfolio companies,
subject to applicable law). The Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder.
It is understood that directors, officers, employees and stockholders of the Company are or may become interested in the Advisor and its
affiliates, as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Advisor and directors,
officers, employees, partners, stockholders, members and managers of the Advisor and its affiliates are or may become similarly interested
in the Company as stockholders or otherwise.

 

7.             Responsibility
of Dual Directors, Officers and/or Employees. If any person who is a manager, partner, member, officer or employee of the Advisor
is or becomes a director, officer or employee of the Company and acts as such in any business of the Company, then such manager, partner,
member, officer or employee of the Advisor shall be deemed to be acting in such capacity solely for the Company, and not as a manager,
partner, member, officer or employee of the Advisor or under the control or direction of the Advisor, even if paid by the Advisor.

 

8.              Indemnification; Limitation
of Liability.

 

(a)           Indemnification.
The Advisor (and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees,
controlling persons and any other person or entity affiliated with the Advisor) shall not be liable to the Company for any action taken
or omitted to be taken by the Advisor or such other person in connection with the performance of any of its duties or obligations under
this Agreement or otherwise as an investment Advisor of the Company (except to the extent specified in Section 36(b) of the Investment
Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings)) with
respect to the receipt of compensation for services, and the Company shall indemnify, defend and protect the Advisor (and its officers,
managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any
other person or entity affiliated with the Advisor, each of whom shall be deemed a third party beneficiary hereof (collectively, the “Indemnified Parties”))
and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts
reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit,
investigation or other proceeding (including an action or suit by or in the right of the Company or its stockholders) arising out of or
otherwise based upon the performance of any of the Advisor’s duties or obligations under this Agreement or otherwise as an investment
Advisor of the Company, to the extent such damages, liabilities, costs and expenses are not fully reimbursed by insurance, and to the
extent that such indemnification would not be inconsistent with the laws of the State of Maryland, the Articles or the provisions of Section II.G
of the Omnibus Guidelines published by the North American Securities Administrators Association on March 29, 1992, as amended from
time to time.

 

The following provisions in this Section 8 shall apply for
only so long as the Shares are not listed on a national securities exchange. 

 

(b)           Limitations
on Indemnification. Notwithstanding Section 8(a) to the contrary, the Company shall not provide for indemnification of the Indemnified
Parties for any liability or loss suffered by the Indemnified Parties, nor shall the Company provide that any of the Indemnified Parties
be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met:

 

(i) the Indemnified
Party has determined, in good faith, that the course of conduct which caused the loss or liability was in the best interests of the Company;

 

(ii) the Indemnified
Party was acting on behalf of or performing services for the Company;

 

(iii) such liability
or loss was not the result of negligence or misconduct by the Indemnified Party; and

 

(iv) such indemnification
or agreement to hold harmless is recoverable only out of the Company’s net assets and not from stockholders.

 

    8

     

    

 

Furthermore, the Indemnified
Party shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of federal or state
securities laws unless one or more of the following conditions are met:

 

(i) there has been
a successful adjudication on the merits of each count involving alleged securities law violations;

 

(ii) such claims
have been dismissed with prejudice on the merits by a court of competent jurisdiction; or

 

(iii) a court of
competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement
and related costs should be made, and the court of law considering the request for indemnification has been advised of the position of
the SEC and the published position of any state securities regulatory authority in which securities of the Company were offered or sold
as to indemnification for violations of securities laws.

 

(c)           Advancement
of Funds. The Company shall be permitted to advance funds to the Indemnified Party for legal expenses and other costs incurred as
a result of any legal action for which indemnification is being sought and will do so if:

 

(i) the proceeding
relates to acts or omissions with respect to the performance of duties or services on behalf of the Company;

 

(ii) the Indemnified
Party provides the Company with written affirmation of his or her good faith belief that the standard of conduct necessary for indemnification
by the Company has been met;

 

(iii) the legal
proceeding was initiated by a third party who is not a stockholder or, if by a stockholder of the Company acting in his or her capacity
as such, a court of competent jurisdiction approves such advancement; and

 

(iv) the Indemnified
Party provides the Company with a written agreement to repay the amount paid or reimbursed by the Company, together with the applicable
legal rate of interest thereon, in cases in which such Indemnified Party is found not to be entitled to indemnification.

 

9.             Effectiveness,
Duration and Termination of Agreement.

 

(a)          Term
and Effectiveness. This Agreement shall become effective as of the date that the Company meets the minimum offering requirement, as
such term is defined in the prospectus contained in the Registration Statement as declared effective by the SEC. This Agreement shall
remain in effect for two years from the date the Company meets such minimum offering requirement, and thereafter shall continue automatically
for successive one-year periods, provided that such continuance is specifically approved at least annually by (i) the vote of the
Board, or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s
directors who are not parties to this Agreement or “interested persons” (as such term is defined in Section 2(a)(19)
of the Investment Company Act) of any such party (“Independent Directors”), in accordance with the requirements
of the Investment Company Act.

 

(b)         Termination.
This Agreement may be terminated at any time, without the payment of any penalty, (i) by the Company upon 60 days’ prior written
notice to the Advisor, (A) upon the vote of a majority of the outstanding voting securities of the Company or (B) by the vote
of the Company’s Independent Directors, or (ii) by the Advisor upon 120 days’ prior written notice to the Company. This
Agreement shall automatically terminate in the event of its “assignment” (as such term is defined for purposes of Section 15(a)(4)
of the Investment Company Act). The provisions of Section 8 shall remain in full force and effect, and the Advisor shall remain entitled
to the benefits thereof, notwithstanding any termination of this Agreement.

 

(c)           Payments
to and Duties of Advisor Upon Termination.

 

    9

     

    

 

(i) After the termination
of this Agreement, the Advisor shall not be entitled to compensation for further services provided hereunder, except that it shall be
entitled to receive from the Company within 30 days after the effective date of such termination all unpaid reimbursements and all earned
but unpaid fees payable to the Advisor prior to termination of this Agreement.

 

(ii) The Advisor
shall promptly upon termination:

 

(A) Deliver to the
Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering
the period following the date of the last accounting furnished to the Board;

 

(B) Deliver to the
Board all assets and documents of the Company then in custody of the Advisor; and

 

(C) Cooperate with
the Company to provide an orderly management transition.

 

The following provisions in this Section 9
shall apply for only so long as the Shares are not listed on a national securities exchange. 

 

(d)           Other
Matters. Without the approval of holders of a majority of the Shares entitled to vote on the matter, the Advisor shall not: (i) amend
this Agreement except for amendments that do not adversely affect the interests of the stockholders; (ii) voluntarily withdraw as
the Advisor unless such withdrawal would not affect the tax status of the Company and would not materially adversely affect the stockholders;
(iii) appoint a new Advisor; (iv) sell all or substantially all of the Company’s assets other than in the ordinary course
of the Company’s business; or (v) cause the merger or other reorganization of the Company. In the event that the Advisor should
withdraw pursuant to (ii) above, the withdrawing Advisor shall pay all expenses incurred as a result of its withdrawal. The Company
may terminate the Advisor’s interest in the Company’s revenues, expenses, income, losses, distributions and capital by payment
of an amount equal to the then present fair market value of the terminated Advisor’s interest, determined by agreement of the terminated
Advisor and the Company. If the Company and the Advisor cannot agree upon such amount, then such amount will be determined in accordance
with the then current rules of the American Arbitration Association. The expenses of such arbitration shall be borne equally by the terminated
Advisor and the Company. The method of payment to the terminated Advisor must be fair and must protect the solvency and liquidity of the
Company.

 

10.           Conflicts of Interests
and Prohibited Activities.

 

This Section 10 shall apply for only so
long as the Shares are not listed on a national securities exchange. 

 

(a)           No
Exclusive Agreement. The Advisor is not hereby granted or entitled to an exclusive right to sell or exclusive employment to sell assets
for the Company.

 

(b)           Rebates,
Kickbacks and Reciprocal Arrangements.

 

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

 

(ii) The Advisor
agrees that it shall not directly or indirectly pay or award any fees or commissions or other compensation to any person or entity engaged
to sell the Shares or give investment advice to a potential stockholder; provided, however, that this subsection shall not prohibit the
payment to a registered broker-dealer of sales commissions for selling or distributing Shares.

 

    10

     

    

 

(c)          Commingling.
The Advisor covenants that it shall not permit or cause to be permitted the Company’s funds to be commingled with the corporations
of any other entity. Nothing in this Section 10(c) shall prohibit the Advisor from establishing a master fiduciary account pursuant to
which separate sub-trust accounts are established for the benefit of affiliated programs, provided that the Company’s funds are
protected from the claims of other programs and creditors of such programs.

 

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

 

12.         Amendments.
This Agreement may be amended in writing by mutual consent of the parties hereto, subject to the provisions of the Investment Company
Act and the Articles.

 

13.          Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute
one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.

 

14.          Entire
Agreement; Governing Law. This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings
and arrangements with respect to the subject matter hereof. Notwithstanding the place where this Agreement may be executed by any of the
parties hereto, this Agreement shall be construed in accordance with the laws of the State of New York. For so long as the Company is
regulated as a BDC under the Investment Company Act, this Agreement shall also be construed in accordance with the applicable provisions
of the Investment Company Act. In such case, to the extent the applicable laws of the State of New York, or any of the provisions herein,
conflict with the provisions of the Investment Company Act, the latter shall control.

 

    11

     

    

 

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

 

	 	
    Company:

     

    Terra Income Fund 6, Inc.

	 	 	 
	 	By:	 /s/ Vikram S. Uppal
	 	Name:	Vikram S. Uppal
	 	Title:	Chief Executive Officer

 

	 	
    ADVISOR:

     

    Terra Income Advisors, LLC

	 	 	 
	 	By:	 /s/ Vikram S. Uppal
	 	Name:	Vikram S. Uppal
	 	Title:	Chief Executive Officer

 

[Signature page to Investment
Advisory and Administrative Services Agreement]

 

    

     

    

 

Appendix A 

 

Example 1: Subordinated Incentive Fee on Income for Each Calendar
Quarter

 

Scenario 1 

 

Assumptions 

 

Investment income (including interest, dividends, fees,
etc.) = 1.25%

Hurdle rate(1) = 2.0%

Base management fee(2) = 0.5%

Other expenses (legal, accounting, custodian, transfer agent,
etc.)(3) = 0.2%

Pre-incentive fee net investment income

(investment income – (base management fee
+ other expenses)) = 0.55%

 

Pre-incentive fee net investment income does not
exceed the hurdle rate; therefore, there is no subordinated incentive fee on income payable.

 

Scenario 2 

 

Assumptions 

 

Investment income (including interest, dividends, fees,
etc.) = 2.9%

Hurdle rate(1) = 2.0%

Base management fee(2) = 0.5%

Other expenses (legal, accounting, custodian, transfer agent,
etc.)(3) = 0.2%

Pre-incentive fee net investment income

(investment income – (base management fee
+ other expenses)) = 2.2%

 

Subordinated incentive fee on income = 100% × pre-incentive
fee net investment income (subject to “catch-up”)(4)

 

	Catch up	= 100% x (2.2% – 2.0%)
	 	= 0.2%
	 	 

Pre-incentive fee net investment income exceeds
the hurdle rate, but does not fully satisfy the “catch-up” provision; therefore, the subordinated incentive fee on income
is 0.2%.

 

Scenario 3 

 

Assumptions 

 

Investment income (including interest, dividends, fees,
etc.) = 3.5%

Hurdle rate(1) = 2.0%

Base management fee(2) = 0.5%

Other expenses (legal, accounting, custodian, transfer agent,
etc.)(3) = 0.2%

Pre-incentive fee net investment income

(investment income – (base management fee
+ other expenses)) = 2.8%

Catch up = 100% × pre-incentive fee net investment
income (subject to “catch-up”)(4)

 

Subordinated incentive fee on income = 100% × “catch-up”
+ (20.0% × (pre-incentive fee net investment income – 2.5%))

 

	Catch up	 	= 2.5% – 2.0%
	 	 	= 0.50%

 

Subordinated incentive fee on income = (100% × 0.5%)
+ (20.0% × (2.8% – 2.5%))

 

	= 0.5% + (20% × 0.3%)
	= 0.5% + 0.06%
	 
	= 0.56%

 

Pre-incentive fee net investment income exceeds
the hurdle rate and fully satisfies the “catch-up” provision, therefore the subordinated incentive fee on income is 0.56%.

 

    A-1 

     

    

 

	(1)	Represents 8.0% annualized hurdle rate. 

 

	(2)	Represents 2.0% annualized base management fee on average gross assets. Examples assume assets are equal to adjusted capital. 

 

	(3)	Excludes organizational and offering expenses. 

 

	(4)	The “catch-up” provision is intended to provide our advisor with an incentive fee of 20.0% on all pre-incentive fee net investment income when our net investment income exceeds 2.5% in any calendar quarter. 

 

Example 2: Incentive Fee on Capital Gains 

Scenario 1 

 

Assumptions 

 

Year 1: $20 million investment made in Company
A (“Investment A”), and $30 million investment made in Company B (“Investment B”)

 

Year 2: Investment A sold for $50 million and
fair market value (“FMV”) of Investment B determined to be $32 million

 

Year 3: FMV of Investment B determined to be $25
million

 

Year 4: Investment B sold for $31 million

 

The incentive fee on capital gains would be:

 

Year 1: None

 

Year 2: Incentive fee on capital gains of $6 million
($30 million realized capital gains on sale of Investment A multiplied by 20.0%)

 

Year 3: None à $5
million (20.0% multiplied by ($30 million cumulative realized capital gains less $5 million cumulative unrealized capital depreciation))
less $6 million (previous capital gains fee paid in Year 2)

 

Year 4: Incentive fee on capital gains of $200,000
à $6.2 million ($31 million cumulative realized capital gains multiplied by 20.0%)
less $6 million (incentive fee on capital gains taken in Year 2)

 

Scenario 2 

 

Assumptions 

 

Year 1: $20 million investment made in Company
A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made
in Company C (“Investment C”)

 

Year 2: Investment A sold for $50 million, FMV
of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million

 

Year 3: FMV of Investment B determined to be $27
million and Investment C sold for $30 million

 

Year 4: FMV of Investment B determined to be $35
million

 

Year 5: Investment B sold for $20 million

 

The incentive fee on capital gains would be:

 

Year 1: None

 

Year 2: Incentive fee on capital gains of $5 million
à 20.0% multiplied by $25 million ($30 million realized capital gains on Investment
A less unrealized capital depreciation on Investment B)

 

    A-2 

     

    

 

Year 3: Incentive fee on capital gains of $1.4
million à $6.4 million (20.0% multiplied by $32 million ($35 million cumulative
realized capital gains less $3 million unrealized capital depreciation)) less $5 million incentive fee on capital gains received in Year
2

 

Year 4: None

 

Year 5: None à $5
million (20.0% multiplied by $25 million (cumulative realized capital gains of $35 million less realized capital losses of $10 million))
less $6.4 million cumulative incentive fee on capital gains paid in Year 2 and Year 3

 

	*	The returns shown are for illustrative purposes only. No incentive fee is payable to Terra Income Advisors in any calendar quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate. Positive returns are shown to demonstrate the fee structure and there is no guarantee that positive returns will be realized. Actual returns may vary from those shown in the examples above. 

 

    A-3

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