Document:

Exhibit 10.1

 

EXECUTION VERSION

 

PLEDGE AND SECURITY AGREEMENT

 

This Pledge and Security Agreement (this
“Security Agreement”) is entered into as of October 17, 2017, by and between Fifth Street Finance Corp,
a Delaware corporation, as secured party (“Secured Party”), and Fifth Street Holdings L.P., a Delaware
limited partnership, as Pledgor (“Pledgor”).

 

Reference is made herein to that certain
Asset Purchase Agreement, dated as of July 13, 2017 (as it may be amended from time to time, the “Purchase Agreement”),
by and among Fifth Street Management LLC (“Seller”), a Delaware limited liability company, Oaktree Capital
Management, L.P., a Delaware limited partnership (“Buyer”), and, solely for the purposes set forth therein,
Fifth Street Asset Management Inc. and, solely for the purposes set forth therein, Pledgor. Capitalized terms used but not defined
herein shall have the meanings given such terms in the Purchase Agreement.

 

WHEREAS, Pledgor is the owner of
shares of common stock, par value $0.01 per share (“Shares”) issued by Fifth Street Finance Corp. (in
its capacity as the issuer of the Shares, the “Issuer”);

 

WHEREAS, Buyer and Pledgor have required,
as a condition to the fulfillment of their obligations under the Purchase Agreement, that Pledgor execute and deliver this Security
Agreement and pledge to Secured Party, the Collateral Shares (as defined below); and

 

WHEREAS, Pledgor agrees to grant
a security interest in, and pledge and assign as applicable, the Collateral (as defined below) to Secured Party, as herein provided.

 

NOW, THEREFORE, for valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and agreed, the parties hereto agree to enter into this Security Agreement
as follows:

 

1.        Security
Interest. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Pledgor hereby pledges
and grants to Secured Party a continuing first priority security interest in and lien on the Collateral to secure the payment and
the performance of the Secured Obligations (as defined below).

 

2.        Collateral.
The security interest granted hereunder to Secured Party is in all of Pledgor’s right, title and interest in and to, or otherwise
with respect to, the following property and assets whether now owned or existing or hereafter acquired or arising and regardless
of where located (collectively, the “Collateral”):

 

     

     

    

 

(a)          (i)
6,265,665 Shares (or security entitlements in respect thereof) credited to the Collateral Account (the
“Collateral Shares”); (ii) all dividends, shares, securities, cash, instruments, moneys or property
(A) representing a dividend, distribution or return of capital in respect of any of the Collateral Shares (including, without
limitation, any regular, periodic dividend or any other dividend, issuance or distribution of cash, securities or property
thereon (other than in connection with a Split-off)) or other property described in this clause (a), (B) resulting from a
split-up (including, without limitation, a Split-off), revision, reclassification, recapitalization or other similar change
with respect to any of the Collateral Shares or other property described in this clause (a), (C) otherwise received in
exchange for or converted from any of the Collateral Shares or other property described in this definition and any
subscription warrants, rights or options issued to the holders of, or otherwise in respect of, any of the Collateral Shares
or other property described in this clause (a) or (D) resulting from a Spin-off; and (iii) in the event of any merger
with respect to the Issuer in which the Issuer is not the surviving entity, all shares of each class of the capital stock of
the successor entity formed by or resulting from such event and any other consideration that is exchanged for the Collateral
Shares that consist of Collateral Shares of such Issuer or into which such Collateral Shares are converted;

 

(b)          
(i) the Collateral Account (as defined below); (ii) any cash, cash equivalents, securities (including the Collateral Shares and
any other Shares), general intangibles, investment property, financial assets, and other property that may from time to time be
deposited, credited, held or carried in the Collateral Account or that is delivered to or in possession or control of Secured Party
or any of Secured Party’s agents pursuant to this Security Agreement or the Purchase Agreement; (iii) all security entitlements
as defined in §8-102(a)(17) of the UCC (as defined below) with respect to any of the foregoing; (iv) all income and profits
on any of the foregoing and all dividends, distributions, interest and other payments with respect to any of the foregoing; (v)
all other rights and privileges appurtenant to any of the foregoing, including any voting rights and any redemption rights, and
(vi) any substitutions for any of the foregoing, in each case whether now existing or hereafter arising; and

 

(c)          all
Proceeds (as defined below) of the Collateral described in the foregoing clauses (a) and (b).

 

The security interest granted hereunder
is granted as security only and shall not subject Secured Party to, or transfer or in any way affect or modify, any obligation
or liability of Pledgor with respect to any of the Collateral or any transaction in connection therewith.

 

As used herein, the following terms shall
have the following meanings:

 

“Collateral
Account” means that certain securities account No.  877-013753-789 of Pledgor established and maintained at
Morgan Stanley Smith Barney LLC, including any subaccount, substitute, successor or replacement securities or deposit account
in or to which any Collateral is now or hereafter held or credited. Any renumbering of the Collateral Account shall not limit
the rights of Secured Party hereunder, and, to the extent necessary, such renumbering shall be automatically incorporated
into the definition of Collateral Account.

 

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“Proceeds” means
all proceeds (as defined in the UCC) and, to the extent not included in such term, all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, or other disposition of, or
other realization upon, any Collateral.

 

“Spin-off” means
any distribution, issuance or dividend to holders of Shares of any capital stock or other securities of another issuer owned (directly
or indirectly) by the Issuer or any subsidiary thereof.

 

“Split-off” means
any exchange offer by the Issuer for its own shares in which the consideration to be delivered to exchanging holders of such shares
is capital stock or other securities of another issuer owned (directly or indirectly) by the Issuer.

 

“UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required
to be applied in connection with the issue of perfection of security interests.

 

3.       Collateral
Maintenance and Administration.

 

(a)          The
parties hereto agree that at all times prior to an exercise of remedies hereunder, Pledgor shall be treated as the owner of the
Collateral for U.S. Federal and state tax purposes.

 

(b)          Unless
an Indemnification Trigger Event (as defined below) has occurred and is continuing, subject to the Standstill (as defined below),
(i) Secured Party shall not have the right to rehypothecate, use, borrow, lend, pledge or sell the Collateral Shares or give any
entitlement orders or instructions with respect to the Collateral, except with Pledgor’s consent, and (ii) subject to the
FSC Voting Agreement, Pledgor shall retain all voting rights with respect the Collateral Shares.

 

As used herein, an “Indemnification
Trigger Event” means the occurrence and continuation of any of the following: (x) the incurrence of BDC Existing
Investigation Defense Costs in excess of the amount in the BDC Escrow Fund as of the date thereof (less the sum of the aggregate
amount of any Outstanding BDC Claims), or (y) the incurrence of BDC Net Losses by the FSC Indemnified Parties (the amount of any
such incurrence, an “Indemnifiable Loss”) that are indemnifiable by Seller and FSH pursuant to Article
VIII of the Purchase Agreement (including, without limitation, that such BDC Existing Investigation Defense Costs and BDC Net Losses
are finally determined pursuant to Section 8.4 of the Purchase Agreement).

 

4.       Secured
Obligations. All obligations of Pledgor to indemnify the FSC Indemnified Parties for the incurrence of BDC Existing Investigation
Defense Costs that cannot be satisfied by the BDC Escrow Fund and BDC Net Losses, in each case pursuant to Article VIII of the
Purchase Agreement (collectively, the “Secured Obligations”), are secured by this Security Agreement.

 

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5.       Pledgor’s
Representations and Warranties. Pledgor hereby represents and warrants to Secured Party that:

 

(a)          Pledgor
(i) is duly organized and validly existing in good standing as a limited partnership or other legal entity under the laws of the
State of Delaware; (b) has full limited partnership or other legal power and authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and assets as currently owned, leased or operated in connection with its
business; and (c) is duly qualified to do business and in good standing as a foreign or alien Person, as the case may be, in each
jurisdiction in which the conduct of its business or the ownership, leasing or operation of its properties or assets makes such
qualification necessary, except where the failure to be so qualified, would not, individually or in the aggregate, reasonably be
likely to have a Material Adverse Effect.

 

(b)          Pledgor
has full legal power and authority to execute and to deliver this Security Agreement, and to consummate the transactions contemplated
hereby. Pledgor has taken all necessary limited partnership action to authorize the execution and performance of this Security
Agreement by it. This Security Agreement has been duly executed and delivered by Pledgor and, assuming due authorization, execution
and delivery of this Agreement by Secured Party, is the valid and binding obligation of Pledgor, enforceable against Pledgor in
accordance with its terms subject to the Enforceability Exceptions.

 

(c)          No
consent, approval or authorization of, or filing with, any Governmental Entity is required to be made or obtained by Pledgor or
any of its affiliates in connection with the execution, delivery and performance of this Security Agreement or the consummation
of the transactions contemplated hereby.

 

(d)          Pledgor
is not, and after giving effect to the asset sale contemplated by the Purchase Agreement will not be, required to register as an
“investment company” under the Investment Company Act.

 

(e)          Pledgor
owns all of the Collateral credited to the Collateral Account free and clear of liens.

 

(f)          The
security interest in the Collateral granted to Secured Party by the Pledgor pursuant to this Security Agreement is a valid and
binding security interest in the Collateral (subject to no other liens).

 

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(g)          Subject
to the execution of a Control Agreement (as defined below) with respect to the Collateral Account by the parties thereto, (i) the
security interest created in favor of Secured Party in the Collateral Account and the security entitlements in respect of the Collateral
Shares and other financial assets credited thereto will constitute a perfected first priority security interest securing the Secured
Obligations, (ii) Secured Party will have control (within the meaning of Sections 8-106 and 9-106 of the UCC) thereof, (iii)
Pledgor does not have notice of any adverse claims with respect to any such security entitlement or such financial assets and (iv)
to the extent Section 9-510(a) of the UCC is applicable and assuming Secured Party has no notice of any adverse claims with respect
to any such security entitlements or such financial assets, no action based on an adverse claim to such security entitlement or
such financial asset, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may be asserted
against Secured Party.

 

(h)          With
respect to all Collateral that may be perfected by filing a financing statement pursuant to the UCC, when a UCC financing statement
in the form of Exhibit A hereto is filed in the appropriate office against Pledgor in the location listed on Schedule 1 (naming
Pledgor as the debtor and Secured Party as the secured party), Secured Party will have a valid and perfected first priority security
interest in such Collateral as security for the payment and performance of the Secured Obligations.

 

(i)          The
Collateral Shares are not subject to any transfer restrictions, other than those set forth in the FSC Voting Agreement.

 

(j)          Pledgor
has been advised by counsel in the negotiation, execution and delivery of this Security Agreement.

 

6.       Pledgor’s
Covenants. During the term of this Security Agreement:

 

(a)          Pledgor
shall use all commercially reasonable efforts to defend the Collateral against all claims and demands of all persons at any time
claiming any interest therein adverse to Secured Party. Pledgor shall not, at any time, file or suffer to be on file, or authorize
to be filed or to be on file, in any jurisdiction, any financing statement or like instrument with respect to the Collateral in
which Secured Party is not named as the sole secured party.

 

(b)          Whether
the Collateral is or is not in Secured Party’s possession, and without any obligation to do so and without waiving Pledgor’s
default for failure to make any such payment, Secured Party at its option may, following notice to Pledgor when it may reasonably
do so without prejudice, pay any such costs and expenses and discharge encumbrances on the Collateral, and any payments of such
costs and expenses and any payments to discharge such encumbrances shall be a part of the Secured Obligations. Pledgor agrees to
reimburse Secured Party on demand for any payments of such costs and expenses and any payments to discharge such encumbrances.

 

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(c)          Pledgor
shall take such other actions as Secured Party shall reasonably determine is necessary or appropriate to perfect and duly record
the Lien created under this Security Agreement in the Collateral, including executing, delivering, filing and/or recording, in
such locations and jurisdictions as Secured Party shall reasonably specify, any financing statement, register of mortgages and
charges, notice, instrument, document, agreement or other papers that may be necessary or desirable (in the reasonable judgment
of Secured Party) to create, preserve or perfect the security interest granted pursuant hereto and the priority thereof or to enable
Secured Party to exercise and enforce its rights under this Security Agreement with respect to such security interest, including,
without limitation, executing and delivering or causing the execution and delivery of a control agreement substantially in the
form of Exhibit B hereto (with such modifications thereto as may be reasonably requested by the securities intermediary thereunder),
granting Secured Party control of the Collateral Account (the “Control Agreement”). In the event the
securities intermediary under the Control Agreement terminates the Control Agreement, Secured Party shall not deliver any instructions
regarding a successor securities intermediary pursuant to Section 10 of the Control Agreement unless Pledgor agrees in writing
that such instructions may be delivered; provided that if, after 20 days following notice of such termination by the Securities
Intermediary, Secured Party and Pledgor do not agree on such instructions regarding a successor securities intermediary, the Secured
Party may provide the instructions regarding the delivery of the Collateral to a successor securities intermediary (provided
such successor securities intermediary shall be Bank of New York Mellon, Deutsche Bank Trust Company Americas, Wells Fargo Capital
Finance, LLC, Brown Brothers Harriman & Co. or U.S. Bank).

 

(d)          Without
at least ten (10) days’ prior written notice to Secured Party, Pledgor shall not make any change to Pledgor’s name,
or the name under which Pledgor does business, or the form or jurisdiction of Pledgor’s organization from the name, form
and jurisdiction set forth on the first page of this Security Agreement.

 

(e)          Pledgor
shall not (and shall not enter into any agreement to) (i) close the Collateral Account or (ii) sell, transfer, pledge or otherwise
dispose of any Collateral without (x) obtaining the prior written consent of Secured Party and (y) entering into such agreements
as Secured Party may in its sole discretion require to ensure the continued priority and perfection of its lien on such Collateral;
provided that notwithstanding the foregoing, but subject in each case to Section 2.03 of the FSC Voting Agreement, (A) Pledgor
shall be entitled to sell or otherwise dispose of the Collateral Shares provided that the proceeds of such sale or disposition
are deposited directly to and remain in the Collateral Account and are not reinvested except in US treasuries that would mature
in two years or less and (B) Pledgor shall be entitled to withdraw dividends and interest paid on Collateral Shares so long as,
as of the date of such release, (i) the amount withdrawn does not exceed the aggregate amount of dividends and interest on the
Collateral deposited into the Collateral Account and not previously withdrawn and (ii) Pledgor has no actual knowledge that the
FSC Indemnified Parties will (x) suffer any BDC Existing Investigation Defense Costs in excess of the amount in the BDC Escrow
Fund as of the date thereof (less the sum of the aggregate amount, if any, of any Outstanding BDC Claims) and/or (y) suffer
a BDC Net Loss, in each case that is indemnifiable pursuant to Article VIII of the Purchase Agreement and in an amount that exceeds
the aggregate value of the FSC Collateral Shares (as calculated using the average closing price of such FSC Shares over the five
(5) business days prior to the date of such contemplated release). Secured Party agrees to use commercially reasonable efforts
to cooperate with the Pledgor, including providing any instruction reasonably required by the Securities Intermediary (as defined
in the Control Agreement), to effect any permitted withdrawal of cash or Collateral Shares pursuant to this Section 6(e). On each
date that Pledgor delivers a Withdrawal Notice (as defined in the Control Agreement) to the Securities Intermediary to effect any
permitted withdrawal of dividends or interest pursuant to this Section 6(e), Pledgor shall (x) be deemed to have represented and
warranted to Secured Party that (i) the amount requested to be transferred thereby does not exceed the aggregate amount of dividends
and interest on the Collateral deposited into the Account and not previously withdrawn and (ii) it has no actual knowledge that
the Secured Party will suffer a BDC Net Loss that is indemnifiable pursuant to Article VIII of the Purchase Agreement in an amount
that exceeds the aggregate value of the Collateral (as calculated, in the case of the shares of Fifth Street Finance Corp., using
the average closing price of such Collateral over the five (5) Business Days prior to the date of such Withdrawal Notice) and (y)
concurrently deliver a copy of such Withdrawal Notice to Secured Party.

 

    	 	6	 

     

    

 

7.       [Reserved].

 

8.       Power
of Attorney. Pledgor, in such capacity, hereby irrevocably constitutes and appoints Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority, in
the name of Pledgor or in its own name, to take upon the occurrence and during the continuance of an Indemnification Trigger Event
(but subject to the Standstill), any and all action and to execute any and all documents and instruments that Secured Party at
any time and from time to time deems necessary or desirable to accomplish the purposes of this Security Agreement, including, without
limitation, selling any of the Collateral on behalf of Pledgor as agent or attorney in fact for Pledgor, in the name of Pledgor
and applying the proceeds received therefrom in fulfillment of the Secured Obligations (it being understood that such actions may
only be taken with respect to the Collateral necessary to repay the Secured Obligations then due and owing); provided that
nothing in this Section ‎8 shall be construed to obligate Secured Party to take any action hereunder nor shall Secured Party
be liable to Pledgor for failure to take any action hereunder. This appointment shall be deemed a power coupled with an interest,
is irrevocable, and shall continue until the Specified Survival Date. Without limiting the generality of the foregoing, so long
as Secured Party shall be entitled under Section ‎9 to make collections in respect of the Collateral, Secured Party shall have
the right and power to receive, endorse and collect all checks made payable to the order of Pledgor representing any dividend,
payment or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same.

 

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9.       Remedies.

 

(a)          Upon
the occurrence and during the continuance of an Indemnification Trigger Event (but subject to the Standstill), Secured Party may
(1) deliver a Notice of Exclusive Control (as defined in the Control Agreement) and (2) take any of the following actions: provide
any entitlement orders relating to the Collateral Account (including, without limitation, to effect the transfer of any Collateral
from the Collateral Account); provided that Secured Party agrees that it will concurrently deliver such entitlement orders
to Pledgor; take control of proceeds, including stock received as dividends or by reason of stock splits; release the Collateral
in its possession to Pledgor, temporarily or otherwise; take control of funds generated by the Collateral, such as cash dividends,
interest and proceeds, and use the same to reduce any part of the Secured Obligations and exercise all other rights that an owner
of such Collateral may exercise; and at any time transfer any of the Collateral or evidence thereof into its own name or that of
its nominee (such actions described in this sub-clause (2) collectively, the “Foreclosure Actions”);
provided that Secured Party agrees (i) not to take any Foreclosure Action until (x) the second (2nd) Business Day after
the date of such Indemnification Trigger Event, if Pledgor notifies Secured Party of its intention to apply cash from the Collateral
Account to satisfy the Indemnifiable Loss and/or (y) the tenth (10th) Business Day after such Indemnification Trigger
Event if the action to be taken is with respect to any of the Collateral other than cash (such period, the “Standstill”)
and (ii) that such Foreclosure Actions may only be taken with respect to the Collateral necessary to repay the Secured Obligations
then due and owing. Secured Party agrees to use commercially reasonable efforts to cooperate with the Pledgor, including providing
any instruction reasonably required by the Securities Intermediary, to effect any withdrawal of Collateral in connection with the
provisions of the Standstill described above. Secured Party shall not be liable for failure to collect any account or instruments,
or for any act or omission on the part of Secured Party, its officers, agents or employees, except for any act or omission arising
out of their own willful misconduct, gross negligence or fraud. The foregoing rights and powers of Secured Party will be in addition
to, and not a limitation upon, any rights and powers of Secured Party or Buyer, as applicable, given by law, elsewhere in this
Security Agreement, the Purchase Agreement or otherwise, subject in each case to the Standstill and the terms of the Purchase Agreement.
Notwithstanding anything to the contrary contained herein or in the Control Agreement, Secured Party agrees to withdraw any cash
or liquid securities (other than, for the avoidance of doubt, the Collateral Shares) held in the Collateral Account prior to withdrawing
any other Collateral.

 

(b)          In
addition to and not in lieu of the rights set forth in Section ‎9(a), upon the occurrence and during the continuance of an
Indemnification Trigger Event (but subject to the Standstill), Secured Party may, without notice of any kind, which Pledgor hereby
expressly waives (except for any notice required under this Security Agreement or the Purchase Agreement or any notice that may
not be waived under applicable law), at any time thereafter exercise and/or enforce any of the following rights and the remedies,
at Secured Party’s option:

 

(i)          Deliver
or cause to be delivered from the Collateral Account to itself or to an Affiliate, Collateral Shares (or security entitlements
in respect thereof) and any other Collateral;

 

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(ii)         Demand,
sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for any of the
Collateral, and otherwise exercise all of Pledgor’s rights with respect to any and all of the Collateral, in its own name,
in the name of Pledgor or otherwise; provided that Secured Party shall have no obligation to take any of the foregoing actions;
and

 

(iii)        Sell,
lease, assign or otherwise dispose of all or any part of the Collateral, at such place or places and at such time or times as Secured
Party deems best, and for cash or for credit or for future delivery (without thereby assuming any credit risk), at public or private
sale, upon such terms and conditions as it deems advisable, without demand of performance or notice of intention to effect any
such disposition or of the time or place thereof (except such notice as is required by applicable law and cannot be waived), and
Secured Party may be the purchaser, lessee, assignee or recipient of any or all of the Collateral so disposed of at any public
sale or at one or more private sales and thereafter hold the same absolutely, free from any claim or right of whatsoever kind,
including any right or equity of redemption (statutory or otherwise), of Pledgor. Secured Party may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed
for the sale, and such sale may be made at any time or place to which the sale may be so adjourned,

 

in each case of the foregoing clauses
(i), (ii) and (iii), it being understood that such actions may only be taken with respect to the Collateral necessary to repay
the Secured Obligations then due and owing.

 

(c)          Pledgor
specifically understands and agrees that any sale by Secured Party of all or part of the Collateral pursuant to the terms of this
Security Agreement may be effected by Secured Party at times and in manners that could result in the proceeds of such sale being
significantly and materially less than might have been received if such sale had occurred at different times or in different manners,
and Pledgor hereby releases Secured Party and its officers and representatives from and against any and all obligations and liabilities
arising out of or related to the timing or manner of any such sale, to the extent permitted under applicable law. Without limiting
the generality of the foregoing, if, in the reasonable opinion of Secured Party, there is any question that a public sale or distribution
of any Collateral will violate any state or federal securities law, including without limitation, the Securities Act, Secured Party
may offer and sell such Collateral in a transaction exempt from registration under the Securities Act and/or who will agree, among
other things, to acquire the Collateral for their own account, for investment and not with a view to the distribution or resale
thereof, and any such sale made in good faith by Secured Party shall be deemed “commercially reasonable”. Furthermore,
Pledgor acknowledges that any such restricted or private sales may be at prices and on terms less favorable to Pledgor than those
obtainable through a public sale without such restrictions, and agrees such sales shall not be considered to be not commercially
reasonable solely because they are so conducted on a restricted or private basis. Pledgor further acknowledges that any specific
disclaimer of any warranty of title or the like by Secured Party will not be considered to adversely affect the commercial reasonableness
of any sale of Collateral. The parties agree and acknowledge that the foregoing actions described in this Section 9(c) may only
be taken with respect to the Collateral necessary to repay the Secured Obligations then due and owing.

 

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(d)          If
the proceeds of sale, collection or other realization of or upon the Collateral pursuant to this Section 9 are insufficient to
cover the costs and expenses of such sale, collection or realization and the payment in full of the Secured Obligations, Secured
Party may continue to enforce its remedies under this Security Agreement and the Purchase Agreement to collect the deficiency,
subject in all cases to the terms of the Purchase Agreement.

 

(e)          Secured
Party’s duty of care with respect to Collateral in its possession (as imposed by law) shall be deemed fulfilled if it exercises
reasonable care in physically safekeeping such Collateral or, in the case of Collateral in the custody or possession of a bailee
or other third Person, exercises reasonable care in the selection of the bailee or other third Person, and Secured Party need not
otherwise preserve, protect, insure or care for any Collateral. Secured Party shall not be obligated to preserve any rights Pledgor
may have against prior parties, to realize on the Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application.

 

(f)          If
Secured Party shall determine to exercise its right to sell all or any portion of the Collateral pursuant to this Section ‎9,
Pledgor agrees that, upon the reasonable request of Secured Party, Pledgor will, at its own expense:

 

(i)          execute
and deliver, to any Person or Governmental Authority, as Secured Party may choose, any and all documents and writings that, in
Secured Party’s reasonable judgment, may be required by any Governmental Entity located in any city, county, state or country
where Pledgor or any Issuer engages in business in order to permit the transfer of, or to more effectively or efficiently transfer,
the Collateral or otherwise enforce Secured Party’s rights hereunder; and

 

(ii)         do
or cause to be done all such other acts and things as may be necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable law.

 

(g)          Except
as otherwise expressly provided in this Security Agreement, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash held by Secured Party as Collateral, following the occurrence, and
during the continuance, of an Indemnification Trigger Event (but subject to the Standstill) shall be applied by Secured Party to
fulfill the Secured Obligations.

 

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(h)          Pledgor
acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section ‎9 and
that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section
‎9 may be specifically enforced.

 

10.     General.

 

(a)          Successors
and Assigns. The provisions of this Security Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that Pledgor may not assign or otherwise transfer any of its rights or obligations
hereunder or the Purchase Agreement without the prior written consent of Secured Party (and any attempted assignment or transfer
by Pledgor without such consent shall be null and void).

 

(b)          No
Waiver. No failure or delay by Secured Party or Buyer, as applicable, in exercising any right or power hereunder or under the
Purchase Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of Secured Party and Buyer, as applicable, hereunder and under the
Purchase Agreement are cumulative and are not exclusive of any rights or remedies that it would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of Secured Party to any other or further action in any circumstances without notice or demand.

 

(c)          Continuing
Agreement; Release of Collateral. This Security Agreement shall constitute a continuing agreement and shall continue in effect
until the Specified Survival Date, at which time the Collateral shall automatically be released from the Liens created hereby,
and this Security Agreement and all obligations (other than those expressly stated to survive such termination) of Secured Party
and Pledgor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights
to the Collateral shall revert to Pledgor; provided that Secured Party shall deliver a notice pursuant to the Section 10 of the
Control Agreement to the Securities Intermediary terminating the Control Agreement. At the request and sole expense of Pledgor
following any such termination, Secured Party shall deliver to Pledgor any Collateral held by Secured Party hereunder, and execute
and deliver to Pledgor such documents as Pledgor shall reasonably request to evidence such termination, including notice to any
securities intermediary terminating the Control Agreement and authorization of the filing of any UCC-3 financing statements. No
Collateral shall be released prior to the Specified Survival Date except as otherwise expressly provided hereunder or under the
Control Agreement or otherwise agreed to by Secured Party. Notwithstanding the foregoing, if at any time, any payment in respect
of the Secured Obligations is rescinded or must be otherwise restored by any holder of any of the Secured Obligations, whether
as a result of any proceedings in insolvency, bankruptcy or reorganization or otherwise, the rights and obligations of the parties
hereunder, and the liens of Secured Party on the Collateral, shall be automatically reinstated and Pledgor shall promptly deliver
any documentation reasonably requested by Secured Party to evidence such reinstatement. This Section 10(c) shall survive the termination
of this Security Agreement.

 

    	 	11	 

     

    

 

(d)          Definitions.
Unless the context indicates otherwise, definitions in the UCC apply to words and phrases in this Security Agreement; if UCC definitions
conflict, Article 8 and/or 9 definitions apply.

 

(e)          Notice.
Each notice to, or other communication with, any party hereunder shall be given to such party as follows:

 

if to Secured Party, to:

 

Oaktree Specialty Lending Corporation

333 South Grand Avenue, 28th floor

Los Angeles, CA 90071

Tel: (213) 830-6300

Fax: (213) 830-6293

Attention (email): Mathew Pendo
(mpendo@oaktreecapital.com)

 

with a copy (which shall not constitute
notice hereunder and may be transmitted by email) to:

 

Oaktree Capital Management, L.P.

333 South Grand Avenue, 28th floor

Los Angeles, CA 90071

Tel: (213) 830-6300

Fax: (213) 830-6293

Attention (email): Mathew Pendo
(mpendo@oaktreecapital.com)

 

Simpson Thacher & Bartlett
LLP

425 Lexington Avenue

New York, NY 10017

Fax: (212) 455-2502

Attention (email): Gary I. Horowitz
(ghorowitz@stblaw.com)

 

and

 

Simpson Thacher & Bartlett
LLP

900 G Street, NW

Washington, DC 20001

Fax: (202) 636-5502

Attention (email): Rajib Chanda
(rajib.chanda@stblaw.com)

 

    	 	12	 

     

    

 

if to Pledgor, to:

 

Fifth Street Holdings L.P.

777 West Putnam Avenue, 3rd Floor

Greenwich, CT 06830

Tel: (203) 681-6800

Fax: (203) 681-3879

Attention: Bernard D. Berman (Bernie@fifthstreetfinance.com)

 

with a copy (which shall not constitute
notice hereunder and may be transmitted by email) to:

 

Skadden, Arps, Slate, Meagher
& Flom LLP

Four Times Square

New York, NY 10036

Fax: (212) 735-2000

Attention (email): Todd E. Freed
(Todd.Freed@skadden.com)

 Jon A. Hlafter (Jon.Hlafter@skadden.com)

 

Each notice, request or other
communications given to any party hereunder shall be in writing and be deemed given and received (a) if delivered in person, on
the date delivered, (b) if transmitted by facsimile (provided receipt is confirmed by telephone), on the date sent, (c)
if delivered by an express courier, on the second (2nd) business day after mailing and (d) if transmitted by email,
on the date sent, in each case, to the parties at the following addresses (or at such other address for a party as is specified
to the other parties hereto by like notice).

 

(f)          Modifications.
This Security Agreement may not be amended, altered or modified except by written instrument executed by each of the parties hereto.
The provisions of this Security Agreement shall not be modified or limited by course of conduct or usage of trade.

 

(g)          Financing
Statement. Pledgor hereby irrevocably authorizes Secured Party (or its designee) at any time and from time to time to file
in any jurisdiction any financing or continuation statement and amendment thereto or any registration of charge, mortgage or otherwise,
containing any information required under the UCC or the law of any other applicable jurisdiction (in each case without the signature
of Pledgor to the extent permitted by applicable law), necessary or appropriate in the judgment of Secured Party to perfect or
evidence its security interest in and lien on the Collateral which describes the Collateral as set forth on Exhibit A hereto. Pledgor
agrees to provide to Secured Party (or its designees) any and all information required under the UCC or the law of any other applicable
jurisdiction for the effective filing of a financing statement and/or any amendment thereto or any registration of charge, mortgage
or otherwise.

 

    	 	13	 

     

    

 

(h)          Counterparts;
Integration; Effectiveness. This Security Agreement may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
This Security Agreement, the Purchase Agreement, the Control Agreement and the FSC Voting Agreement constitute the entire contract
among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof and thereof. This Security Agreement shall become effective when it shall
have been executed by Secured Party and when Secured Party shall have received counterparts hereof that, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Security Agreement
by facsimile or electronic transmission shall be effective as delivery of an original executed counterpart of such signature page.

 

(i)          Severability.
Any provision of this Security Agreement or the Purchase Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting
the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

(j)          Conflicts.
In the event of any conflict between the provisions of this Security Agreement and the provisions of the Purchase Agreement, the
provisions of the Purchase Agreement shall govern and control.

 

(k)          Governing
Law; Submission to Jurisdiction. The provisions of Sections 10.9 and 10.10 of the Purchase Agreement shall apply mutatis
mutandis to this Security Agreement as if such provisions were fully set forth herein.

 

[Signature Page Follows]

 

    	 	14	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Security Agreement to be duly executed by their duly authorized representatives as of the date first above written.

 

PLEDGOR:

 

FIFTH STREET HOLDINGS L.P.

 

	By:	/s/ Leonard M. Tannenbaum	 
	Name: Leonard M. Tannenbaum	 
	Title:   Chief Executive Officer	 

 

[Signature Page to Security Agreement]

 

     

     

    

 

 

SECURED PARTY:

 

Fifth Street Finance
Corp.

 

	By:	/s/ Bernard D. Berman	 
	Name: Bernard D. Berman	 
	Title:   Chief Executive Officer	 

 

[Signature Page to Security Agreement]Exhibit 10.2

 

EXECUTION VERSION

 

PLEDGE AND SECURITY AGREEMENT

 

This Pledge and Security Agreement (this “Security
Agreement”) is entered into as of October 17, 2017, by and between Fifth Street Senior Floating Rate Corp., a Delaware
corporation, as secured party (“Secured Party”), and Fifth Street Holdings L.P., a Delaware limited partnership,
as Pledgor (“Pledgor”).

 

Reference is made herein to that certain Asset
Purchase Agreement, dated as of July 13, 2017 (as it may be amended from time to time, the “Purchase Agreement”),
by and among Fifth Street Management LLC (“Seller”), a Delaware limited liability company, Oaktree Capital
Management, L.P., a Delaware limited partnership (“Buyer”), and, solely for the purposes set forth therein,
Fifth Street Asset Management Inc. and, solely for the purposes set forth therein, Pledgor. Capitalized terms used but not defined
herein shall have the meanings given such terms in the Purchase Agreement.

 

WHEREAS, Pledgor is the owner of shares
of common stock, par value $0.01 per share (“Shares”) issued by Fifth Street Senior Floating Rate Corp.
(in its capacity as the issuer of the Shares, the “Issuer”);

 

WHEREAS, Buyer and Pledgor have required,
as a condition to the fulfillment of their obligations under the Purchase Agreement, that Pledgor execute and deliver this Security
Agreement and pledge to Secured Party, the Collateral Shares (as defined below); and

 

WHEREAS, Pledgor agrees to grant a security
interest in, and pledge and assign as applicable, the Collateral (as defined below) to Secured Party, as herein provided.

 

NOW, THEREFORE, for valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and agreed, the parties hereto agree to enter into this Security Agreement
as follows:

 

1.       Security
Interest. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Pledgor hereby pledges
and grants to Secured Party a continuing first priority security interest in and lien on the Collateral to secure the payment and
the performance of the Secured Obligations (as defined below).

 

2.       Collateral.
The security interest granted hereunder to Secured Party is in all of Pledgor’s right, title and interest in and to, or otherwise
with respect to, the following property and assets whether now owned or existing or hereafter acquired or arising and regardless
of where located (collectively, the “Collateral”):

 

     

     

    

  

(a)       (i)
1,131,991 Shares (or security entitlements in respect thereof) credited to the Collateral Account (the
“Collateral Shares”); (ii) all dividends, shares, securities, cash, instruments, moneys or property
(A) representing a dividend, distribution or return of capital in respect of any of the Collateral Shares (including, without
limitation, any regular, periodic dividend or any other dividend, issuance or distribution of cash, securities or property
thereon (other than in connection with a Split-off)) or other property described in this clause (a), (B) resulting from a
split-up (including, without limitation, a Split-off), revision, reclassification, recapitalization or other similar change
with respect to any of the Collateral Shares or other property described in this clause (a), (C) otherwise received in
exchange for or converted from any of the Collateral Shares or other property described in this definition and any
subscription warrants, rights or options issued to the holders of, or otherwise in respect of, any of the Collateral Shares
or other property described in this clause (a) or (D) resulting from a Spin-off; and (iii) in the event of any merger
with respect to the Issuer in which the Issuer is not the surviving entity, all shares of each class of the capital stock of
the successor entity formed by or resulting from such event and any other consideration that is exchanged for the Collateral
Shares that consist of Collateral Shares of such Issuer or into which such Collateral Shares are converted;

 

(b)       
(i) the Collateral Account (as defined below); (ii) any cash, cash equivalents, securities (including the Collateral Shares and
any other Shares), general intangibles, investment property, financial assets, and other property that may from time to time be
deposited, credited, held or carried in the Collateral Account or that is delivered to or in possession or control of Secured Party
or any of Secured Party’s agents pursuant to this Security Agreement or the Purchase Agreement; (iii) all security entitlements
as defined in §8-102(a)(17) of the UCC (as defined below) with respect to any of the foregoing; (iv) all income and profits
on any of the foregoing and all dividends, distributions, interest and other payments with respect to any of the foregoing; (v)
all other rights and privileges appurtenant to any of the foregoing, including any voting rights and any redemption rights, and
(vi) any substitutions for any of the foregoing, in each case whether now existing or hereafter arising; and

 

(c)       all
Proceeds (as defined below) of the Collateral described in the foregoing clauses (a) and (b).

 

The security interest granted hereunder is
granted as security only and shall not subject Secured Party to, or transfer or in any way affect or modify, any obligation or
liability of Pledgor with respect to any of the Collateral or any transaction in connection therewith.

 

As used herein, the following terms shall have
the following meanings:

 

“Collateral
Account” means that certain securities account No.  877-013754-789 of Pledgor established and maintained at
Morgan Stanley Smith Barney LLC, including any subaccount, substitute, successor or replacement securities or deposit account
in or to which any Collateral is now or hereafter held or credited. Any renumbering of the Collateral Account shall not limit
the rights of Secured Party hereunder, and, to the extent necessary, such renumbering shall be automatically incorporated
into the definition of Collateral Account.

 

    	 	2	 

     

    

  

“Proceeds” means all
proceeds (as defined in the UCC) and, to the extent not included in such term, all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, or other disposition of, or
other realization upon, any Collateral.

 

“Spin-off” means any
distribution, issuance or dividend to holders of Shares of any capital stock or other securities of another issuer owned (directly
or indirectly) by the Issuer or any subsidiary thereof.

 

“Split-off” means
any exchange offer by the Issuer for its own shares in which the consideration to be delivered to exchanging holders of such shares
is capital stock or other securities of another issuer owned (directly or indirectly) by the Issuer.

 

“UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

 

3.       Collateral
Maintenance and Administration.

 

(a)       The
parties hereto agree that at all times prior to an exercise of remedies hereunder, Pledgor shall be treated as the owner of the
Collateral for U.S. Federal and state tax purposes.

 

(b)       Unless
an Indemnification Trigger Event (as defined below) has occurred and is continuing, subject to the Standstill (as defined below),
(i) Secured Party shall not have the right to rehypothecate, use, borrow, lend, pledge or sell the Collateral Shares or give any
entitlement orders or instructions with respect to the Collateral, except with Pledgor’s consent, and (ii) subject to the
FSFR Voting Agreement, Pledgor shall retain all voting rights with respect the Collateral Shares.

 

As used herein, an “Indemnification
Trigger Event” means the occurrence and continuation of any of the following: (x) the incurrence of BDC Existing
Investigation Defense Costs in excess of the amount in the BDC Escrow Fund as of the date thereof (less the sum of the aggregate
amount of any Outstanding BDC Claims), or (y) the incurrence of BDC Net Losses by the FSFR Indemnified Parties (the amount of any
such incurrence, an “Indemnifiable Loss”) that are indemnifiable by Seller and FSH pursuant to Article
VIII of the Purchase Agreement (including, without limitation, that such BDC Existing Investigation Defense Costs and BDC Net Losses
are finally determined pursuant to Section 8.4 of the Purchase Agreement).

 

4.       Secured
Obligations. All obligations of Pledgor to indemnify the FSFR Indemnified Parties for the incurrence of BDC Existing Investigation
Defense Costs that cannot be satisfied by the BDC Escrow Fund and BDC Net Losses, in each case pursuant to Article VIII of the
Purchase Agreement (collectively, the “Secured Obligations”), are secured by this Security Agreement.

 

    	 	3	 

     

    

  

5.       Pledgor’s
Representations and Warranties. Pledgor hereby represents and warrants to Secured Party that:

 

(a)       Pledgor
(i) is duly organized and validly existing in good standing as a limited partnership or other legal entity under the laws of the
State of Delaware; (b) has full limited partnership or other legal power and authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and assets as currently owned, leased or operated in connection with its
business; and (c) is duly qualified to do business and in good standing as a foreign or alien Person, as the case may be, in each
jurisdiction in which the conduct of its business or the ownership, leasing or operation of its properties or assets makes such
qualification necessary, except where the failure to be so qualified, would not, individually or in the aggregate, reasonably be
likely to have a Material Adverse Effect.

 

(b)       Pledgor
has full legal power and authority to execute and to deliver this Security Agreement, and to consummate the transactions contemplated
hereby. Pledgor has taken all necessary limited partnership action to authorize the execution and performance of this Security
Agreement by it. This Security Agreement has been duly executed and delivered by Pledgor and, assuming due authorization, execution
and delivery of this Agreement by Secured Party, is the valid and binding obligation of Pledgor, enforceable against Pledgor in
accordance with its terms subject to the Enforceability Exceptions.

 

(c)       No
consent, approval or authorization of, or filing with, any Governmental Entity is required to be made or obtained by Pledgor or
any of its affiliates in connection with the execution, delivery and performance of this Security Agreement or the consummation
of the transactions contemplated hereby.

 

(d)       Pledgor
is not, and after giving effect to the asset sale contemplated by the Purchase Agreement will not be, required to register as an
“investment company” under the Investment Company Act.

 

(e)       Pledgor
owns all of the Collateral credited to the Collateral Account free and clear of liens.

 

(f)       The
security interest in the Collateral granted to Secured Party by the Pledgor pursuant to this Security Agreement is a valid and
binding security interest in the Collateral (subject to no other liens).

 

    	 	4	 

     

    

  

(g)       Subject
to the execution of a Control Agreement (as defined below) with respect to the Collateral Account by the parties thereto, (i) the
security interest created in favor of Secured Party in the Collateral Account and the security entitlements in respect of the Collateral
Shares and other financial assets credited thereto will constitute a perfected first priority security interest securing the Secured
Obligations, (ii) Secured Party will have control (within the meaning of Sections 8-106 and 9-106 of the UCC) thereof, (iii)
Pledgor does not have notice of any adverse claims with respect to any such security entitlement or such financial assets and (iv)
to the extent Section 9-510(a) of the UCC is applicable and assuming Secured Party has no notice of any adverse claims with respect
to any such security entitlements or such financial assets, no action based on an adverse claim to such security entitlement or
such financial asset, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may be asserted
against Secured Party.

 

(h)       With
respect to all Collateral that may be perfected by filing a financing statement pursuant to the UCC, when a UCC financing statement
in the form of Exhibit A hereto is filed in the appropriate office against Pledgor in the location listed on Schedule 1 (naming
Pledgor as the debtor and Secured Party as the secured party), Secured Party will have a valid and perfected first priority security
interest in such Collateral as security for the payment and performance of the Secured Obligations.

 

(i)       The
Collateral Shares are not subject to any transfer restrictions, other than those set forth in the FSFR Voting Agreement.

 

(j)       Pledgor
has been advised by counsel in the negotiation, execution and delivery of this Security Agreement.

 

6.       Pledgor’s
Covenants. During the term of this Security Agreement:

 

(a)       Pledgor
shall use all commercially reasonable efforts to defend the Collateral against all claims and demands of all persons at any time
claiming any interest therein adverse to Secured Party. Pledgor shall not, at any time, file or suffer to be on file, or authorize
to be filed or to be on file, in any jurisdiction, any financing statement or like instrument with respect to the Collateral in
which Secured Party is not named as the sole secured party.

 

(b)       Whether
the Collateral is or is not in Secured Party’s possession, and without any obligation to do so and without waiving Pledgor’s
default for failure to make any such payment, Secured Party at its option may, following notice to Pledgor when it may reasonably
do so without prejudice, pay any such costs and expenses and discharge encumbrances on the Collateral, and any payments of such
costs and expenses and any payments to discharge such encumbrances shall be a part of the Secured Obligations. Pledgor agrees to
reimburse Secured Party on demand for any payments of such costs and expenses and any payments to discharge such encumbrances.

 

    	 	5	 

     

    

  

(c)       Pledgor
shall take such other actions as Secured Party shall reasonably determine is necessary or appropriate to perfect and duly record
the Lien created under this Security Agreement in the Collateral, including executing, delivering, filing and/or recording, in
such locations and jurisdictions as Secured Party shall reasonably specify, any financing statement, register of mortgages and
charges, notice, instrument, document, agreement or other papers that may be necessary or desirable (in the reasonable judgment
of Secured Party) to create, preserve or perfect the security interest granted pursuant hereto and the priority thereof or to enable
Secured Party to exercise and enforce its rights under this Security Agreement with respect to such security interest, including,
without limitation, executing and delivering or causing the execution and delivery of a control agreement substantially in the
form of Exhibit B hereto (with such modifications thereto as may be reasonably requested by the securities intermediary thereunder),
granting Secured Party control of the Collateral Account (the “Control Agreement”). In the event the
securities intermediary under the Control Agreement terminates the Control Agreement, Secured Party shall not deliver any instructions
regarding a successor securities intermediary pursuant to Section 10 of the Control Agreement unless Pledgor agrees in writing
that such instructions may be delivered; provided that if, after 20 days following notice of such termination by the Securities
Intermediary, Secured Party and Pledgor do not agree on such instructions regarding a successor securities intermediary, the Secured
Party may provide the instructions regarding the delivery of the Collateral to a successor securities intermediary (provided
such successor securities intermediary shall be Bank of New York Mellon, Deutsche Bank Trust Company Americas, Wells Fargo Capital
Finance, LLC, Brown Brothers Harriman & Co. or U.S. Bank).

 

(d)       Without
at least ten (10) days’ prior written notice to Secured Party, Pledgor shall not make any change to Pledgor’s name,
or the name under which Pledgor does business, or the form or jurisdiction of Pledgor’s organization from the name, form
and jurisdiction set forth on the first page of this Security Agreement.

 

    	 	6	 

     

    

  

(e)       Pledgor
shall not (and shall not enter into any agreement to) (i) close the Collateral Account or (ii) sell, transfer, pledge or otherwise
dispose of any Collateral without (x) obtaining the prior written consent of Secured Party and (y) entering into such agreements
as Secured Party may in its sole discretion require to ensure the continued priority and perfection of its lien on such Collateral;
provided that notwithstanding the foregoing, but subject in each case to Section 2.03 of the FSFR Voting Agreement, (A) Pledgor
shall be entitled to sell or otherwise dispose of the Collateral Shares provided that the proceeds of such sale or disposition
are deposited directly to and remain in the Collateral Account and are not reinvested except in US treasuries that would mature
in two years or less and (B) Pledgor shall be entitled to withdraw dividends and interest paid on Collateral Shares so long as,
as of the date of such release, (i) the amount withdrawn does not exceed the aggregate amount of dividends and interest on the
Collateral deposited into the Collateral Account and not previously withdrawn and (ii) Pledgor has no actual knowledge that the
FSFR Indemnified Parties will (x) suffer any BDC Existing Investigation Defense Costs in excess of the amount in the BDC Escrow
Fund as of the date thereof (less the sum of the aggregate amount, if any, of any Outstanding BDC Claims) and/or (y) suffer
a BDC Net Loss, in each case that is indemnifiable pursuant to Article VIII of the Purchase Agreement and in an amount that exceeds
the aggregate value of the FSFR Collateral Shares (as calculated using the average closing price of such FSFR Shares over the five
(5) business days prior to the date of such contemplated release). Secured Party agrees to use commercially reasonable efforts
to cooperate with the Pledgor, including providing any instruction reasonably required by the Securities Intermediary (as defined
in the Control Agreement), to effect any permitted withdrawal of cash or Collateral Shares pursuant to this Section 6(e). On each
date that Pledgor delivers a Withdrawal Notice (as defined in the Control Agreement) to the Securities Intermediary to effect any
permitted withdrawal of dividends or interest pursuant to this Section 6(e), Pledgor shall (x) be deemed to have represented and
warranted to Secured Party that (i) the amount requested to be transferred thereby does not exceed the aggregate amount of dividends
and interest on the Collateral deposited into the Account and not previously withdrawn and (ii) it has no actual knowledge that
the Secured Party will suffer a BDC Net Loss that is indemnifiable pursuant to Article VIII of the Purchase Agreement in an amount
that exceeds the aggregate value of the Collateral (as calculated, in the case of the shares of Fifth Street Senior Floating Rate
Corp., using the average closing price of such Collateral over the five (5) Business Days prior to the date of such Withdrawal
Notice) and (y) concurrently deliver a copy of such Withdrawal Notice to Secured Party.

 

7.       [Reserved].

 

8.       Power
of Attorney. Pledgor, in such capacity, hereby irrevocably constitutes and appoints Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority, in
the name of Pledgor or in its own name, to take upon the occurrence and during the continuance of an Indemnification Trigger Event
(but subject to the Standstill), any and all action and to execute any and all documents and instruments that Secured Party at
any time and from time to time deems necessary or desirable to accomplish the purposes of this Security Agreement, including, without
limitation, selling any of the Collateral on behalf of Pledgor as agent or attorney in fact for Pledgor, in the name of Pledgor
and applying the proceeds received therefrom in fulfillment of the Secured Obligations (it being understood that such actions may
only be taken with respect to the Collateral necessary to repay the Secured Obligations then due and owing); provided that
nothing in this Section ‎8 shall be construed to obligate Secured Party to take any action hereunder nor shall Secured Party
be liable to Pledgor for failure to take any action hereunder. This appointment shall be deemed a power coupled with an interest,
is irrevocable, and shall continue until the Specified Survival Date. Without limiting the generality of the foregoing, so long
as Secured Party shall be entitled under Section ‎9 to make collections in respect of the Collateral, Secured Party shall have
the right and power to receive, endorse and collect all checks made payable to the order of Pledgor representing any dividend,
payment or other distribution in respect of the Collateral or any part thereof and to give full discharge for the same.

 

    	 	7	 

     

    

  

9.       Remedies.

 

(a)       Upon
the occurrence and during the continuance of an Indemnification Trigger Event (but subject to the Standstill), Secured Party may
(1) deliver a Notice of Exclusive Control (as defined in the Control Agreement) and (2) take any of the following actions: provide
any entitlement orders relating to the Collateral Account (including, without limitation, to effect the transfer of any Collateral
from the Collateral Account); provided that Secured Party agrees that it will concurrently deliver such entitlement orders
to Pledgor; take control of proceeds, including stock received as dividends or by reason of stock splits; release the Collateral
in its possession to Pledgor, temporarily or otherwise; take control of funds generated by the Collateral, such as cash dividends,
interest and proceeds, and use the same to reduce any part of the Secured Obligations and exercise all other rights that an owner
of such Collateral may exercise; and at any time transfer any of the Collateral or evidence thereof into its own name or that of
its nominee (such actions described in this sub-clause (2) collectively, the “Foreclosure Actions”);
provided that Secured Party agrees (i) not to take any Foreclosure Action until (x) the second (2nd) Business Day after
the date of such Indemnification Trigger Event, if Pledgor notifies Secured Party of its intention to apply cash from the Collateral
Account to satisfy the Indemnifiable Loss and/or (y) the tenth (10th) Business Day after such Indemnification Trigger
Event if the action to be taken is with respect to any of the Collateral other than cash (such period, the “Standstill”)
and (ii) that such Foreclosure Actions may only be taken with respect to the Collateral necessary to repay the Secured Obligations
then due and owing. Secured Party agrees to use commercially reasonable efforts to cooperate with the Pledgor, including providing
any instruction reasonably required by the Securities Intermediary, to effect any withdrawal of Collateral in connection with the
provisions of the Standstill described above. Secured Party shall not be liable for failure to collect any account or instruments,
or for any act or omission on the part of Secured Party, its officers, agents or employees, except for any act or omission arising
out of their own willful misconduct, gross negligence or fraud. The foregoing rights and powers of Secured Party will be in addition
to, and not a limitation upon, any rights and powers of Secured Party or Buyer, as applicable, given by law, elsewhere in this
Security Agreement, the Purchase Agreement or otherwise, subject in each case to the Standstill and the terms of the Purchase Agreement.
Notwithstanding anything to the contrary contained herein or in the Control Agreement, Secured Party agrees to withdraw any cash
or liquid securities (other than, for the avoidance of doubt, the Collateral Shares) held in the Collateral Account prior to withdrawing
any other Collateral.

 

(b)       In
addition to and not in lieu of the rights set forth in Section ‎9(a), upon the occurrence and during the continuance of an
Indemnification Trigger Event (but subject to the Standstill), Secured Party may, without notice of any kind, which Pledgor hereby
expressly waives (except for any notice required under this Security Agreement or the Purchase Agreement or any notice that may
not be waived under applicable law), at any time thereafter exercise and/or enforce any of the following rights and the remedies,
at Secured Party’s option:

 

(i)       Deliver
or cause to be delivered from the Collateral Account to itself or to an Affiliate, Collateral Shares (or security entitlements
in respect thereof) and any other Collateral;

 

    	 	8	 

     

    

  

(ii)       Demand,
sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for any of the
Collateral, and otherwise exercise all of Pledgor’s rights with respect to any and all of the Collateral, in its own name,
in the name of Pledgor or otherwise; provided that Secured Party shall have no obligation to take any of the foregoing actions;
and

 

(iii)       Sell,
lease, assign or otherwise dispose of all or any part of the Collateral, at such place or places and at such time or times as Secured
Party deems best, and for cash or for credit or for future delivery (without thereby assuming any credit risk), at public or private
sale, upon such terms and conditions as it deems advisable, without demand of performance or notice of intention to effect any
such disposition or of the time or place thereof (except such notice as is required by applicable law and cannot be waived), and
Secured Party may be the purchaser, lessee, assignee or recipient of any or all of the Collateral so disposed of at any public
sale or at one or more private sales and thereafter hold the same absolutely, free from any claim or right of whatsoever kind,
including any right or equity of redemption (statutory or otherwise), of Pledgor. Secured Party may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed
for the sale, and such sale may be made at any time or place to which the sale may be so adjourned,

 

in each case of the foregoing clauses
(i), (ii) and (iii), it being understood that such actions may only be taken with respect to the Collateral necessary to repay
the Secured Obligations then due and owing.

 

(c)       Pledgor
specifically understands and agrees that any sale by Secured Party of all or part of the Collateral pursuant to the terms of this
Security Agreement may be effected by Secured Party at times and in manners that could result in the proceeds of such sale being
significantly and materially less than might have been received if such sale had occurred at different times or in different manners,
and Pledgor hereby releases Secured Party and its officers and representatives from and against any and all obligations and liabilities
arising out of or related to the timing or manner of any such sale, to the extent permitted under applicable law. Without limiting
the generality of the foregoing, if, in the reasonable opinion of Secured Party, there is any question that a public sale or distribution
of any Collateral will violate any state or federal securities law, including without limitation, the Securities Act, Secured Party
may offer and sell such Collateral in a transaction exempt from registration under the Securities Act and/or who will agree, among
other things, to acquire the Collateral for their own account, for investment and not with a view to the distribution or resale
thereof, and any such sale made in good faith by Secured Party shall be deemed “commercially reasonable”. Furthermore,
Pledgor acknowledges that any such restricted or private sales may be at prices and on terms less favorable to Pledgor than those
obtainable through a public sale without such restrictions, and agrees such sales shall not be considered to be not commercially
reasonable solely because they are so conducted on a restricted or private basis. Pledgor further acknowledges that any specific
disclaimer of any warranty of title or the like by Secured Party will not be considered to adversely affect the commercial reasonableness
of any sale of Collateral. The parties agree and acknowledge that the foregoing actions described in this Section 9(c) may only
be taken with respect to the Collateral necessary to repay the Secured Obligations then due and owing.

 

    	 	9	 

     

    

  

(d)       If
the proceeds of sale, collection or other realization of or upon the Collateral pursuant to this Section 9 are insufficient to
cover the costs and expenses of such sale, collection or realization and the payment in full of the Secured Obligations, Secured
Party may continue to enforce its remedies under this Security Agreement and the Purchase Agreement to collect the deficiency,
subject in all cases to the terms of the Purchase Agreement.

 

(e)       Secured
Party’s duty of care with respect to Collateral in its possession (as imposed by law) shall be deemed fulfilled if it exercises
reasonable care in physically safekeeping such Collateral or, in the case of Collateral in the custody or possession of a bailee
or other third Person, exercises reasonable care in the selection of the bailee or other third Person, and Secured Party need not
otherwise preserve, protect, insure or care for any Collateral. Secured Party shall not be obligated to preserve any rights Pledgor
may have against prior parties, to realize on the Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application.

 

(f)       If
Secured Party shall determine to exercise its right to sell all or any portion of the Collateral pursuant to this Section ‎9,
Pledgor agrees that, upon the reasonable request of Secured Party, Pledgor will, at its own expense:

 

(i)       execute
and deliver, to any Person or Governmental Authority, as Secured Party may choose, any and all documents and writings that, in
Secured Party’s reasonable judgment, may be required by any Governmental Entity located in any city, county, state or country
where Pledgor or any Issuer engages in business in order to permit the transfer of, or to more effectively or efficiently transfer,
the Collateral or otherwise enforce Secured Party’s rights hereunder; and

 

(ii)       do
or cause to be done all such other acts and things as may be necessary to make such sale of the Collateral or any part thereof
valid and binding and in compliance with applicable law.

 

(g)       Except
as otherwise expressly provided in this Security Agreement, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash held by Secured Party as Collateral, following the occurrence, and
during the continuance, of an Indemnification Trigger Event (but subject to the Standstill) shall be applied by Secured Party to
fulfill the Secured Obligations.

 

    	 	10	 

     

    

  

(h)       Pledgor
acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section ‎9 and
that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section
‎9 may be specifically enforced.

 

10.       General.

 

(a)       Successors
and Assigns. The provisions of this Security Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that Pledgor may not assign or otherwise transfer any of its rights or obligations
hereunder or the Purchase Agreement without the prior written consent of Secured Party (and any attempted assignment or transfer
by Pledgor without such consent shall be null and void).

 

(b)       No
Waiver. No failure or delay by Secured Party or Buyer, as applicable, in exercising any right or power hereunder or under the
Purchase Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of Secured Party and Buyer, as applicable, hereunder and under the
Purchase Agreement are cumulative and are not exclusive of any rights or remedies that it would otherwise have. No notice to or
demand on Pledgor in any case shall entitle Pledgor to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of Secured Party to any other or further action in any circumstances without notice or demand.

 

(c)       Continuing
Agreement; Release of Collateral. This Security Agreement shall constitute a continuing agreement and shall continue in effect
until the Specified Survival Date, at which time the Collateral shall automatically be released from the Liens created hereby,
and this Security Agreement and all obligations (other than those expressly stated to survive such termination) of Secured Party
and Pledgor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights
to the Collateral shall revert to Pledgor; provided that Secured Party shall deliver a notice pursuant to the Section 10 of the
Control Agreement to the Securities Intermediary terminating the Control Agreement. At the request and sole expense of Pledgor
following any such termination, Secured Party shall deliver to Pledgor any Collateral held by Secured Party hereunder, and execute
and deliver to Pledgor such documents as Pledgor shall reasonably request to evidence such termination, including notice to any
securities intermediary terminating the Control Agreement and authorization of the filing of any UCC-3 financing statements. No
Collateral shall be released prior to the Specified Survival Date except as otherwise expressly provided hereunder or under the
Control Agreement or otherwise agreed to by Secured Party. Notwithstanding the foregoing, if at any time, any payment in respect
of the Secured Obligations is rescinded or must be otherwise restored by any holder of any of the Secured Obligations, whether
as a result of any proceedings in insolvency, bankruptcy or reorganization or otherwise, the rights and obligations of the parties
hereunder, and the liens of Secured Party on the Collateral, shall be automatically reinstated and Pledgor shall promptly deliver
any documentation reasonably requested by Secured Party to evidence such reinstatement. This Section 10(c) shall survive the termination
of this Security Agreement.

 

    	 	11	 

     

    

  

(d)       Definitions.
Unless the context indicates otherwise, definitions in the UCC apply to words and phrases in this Security Agreement; if UCC definitions
conflict, Article 8 and/or 9 definitions apply.

 

(e)       Notice.
Each notice to, or other communication with, any party hereunder shall be given to such party as follows:

 

if to Secured Party, to:

 

Oaktree Strategic Income Corporation

333 South Grand Avenue, 28th floor

Los Angeles, CA 90071

Tel: (213) 830-6300

Fax: (213) 830-6293

Attention (email): Mathew Pendo (mpendo@oaktreecapital.com)

 

with a copy (which shall not constitute
notice hereunder and may be transmitted by email) to:

 

Oaktree Capital Management, L.P.

333 South Grand Avenue, 28th floor

Los Angeles, CA 90071

Tel: (213) 830-6300

Fax: (213) 830-6293

Attention (email): Mathew Pendo (mpendo@oaktreecapital.com)

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Fax: (212) 455-2502

Attention (email): Gary I. Horowitz
(ghorowitz@stblaw.com)

 

and

 

Simpson Thacher & Bartlett LLP

900 G Street, NW

Washington, DC 20001

Fax: (202) 636-5502

Attention (email): Rajib Chanda (rajib.chanda@stblaw.com)

 

    	 	12	 

     

    

  

if to Pledgor, to:

 

Fifth Street Holdings L.P.

777 West Putnam Avenue, 3rd Floor

Greenwich, CT 06830

Tel: (203) 681-6800

Fax: (203) 681-3879

Attention: Bernard D. Berman (Bernie@fifthstreetfinance.com)

 

with a copy (which shall not constitute
notice hereunder and may be transmitted by email) to:

 

Skadden, Arps, Slate, Meagher &
Flom LLP

Four Times Square

New York, NY 10036

Fax: (212) 735-2000

Attention (email): Todd E. Freed (Todd.Freed@skadden.com)

  Jon A. Hlafter (Jon.Hlafter@skadden.com)

 

Each notice, request or other communications
given to any party hereunder shall be in writing and be deemed given and received (a) if delivered in person, on the date delivered,
(b) if transmitted by facsimile (provided receipt is confirmed by telephone), on the date sent, (c) if delivered by an express
courier, on the second (2nd) business day after mailing and (d) if transmitted by email, on the date sent, in each case,
to the parties at the following addresses (or at such other address for a party as is specified to the other parties hereto by
like notice).

 

(f)       Modifications.
This Security Agreement may not be amended, altered or modified except by written instrument executed by each of the parties hereto.
The provisions of this Security Agreement shall not be modified or limited by course of conduct or usage of trade.

 

(g)       Financing
Statement. Pledgor hereby irrevocably authorizes Secured Party (or its designee) at any time and from time to time to file
in any jurisdiction any financing or continuation statement and amendment thereto or any registration of charge, mortgage or otherwise,
containing any information required under the UCC or the law of any other applicable jurisdiction (in each case without the signature
of Pledgor to the extent permitted by applicable law), necessary or appropriate in the judgment of Secured Party to perfect or
evidence its security interest in and lien on the Collateral which describes the Collateral as set forth on Exhibit A hereto. Pledgor
agrees to provide to Secured Party (or its designees) any and all information required under the UCC or the law of any other applicable
jurisdiction for the effective filing of a financing statement and/or any amendment thereto or any registration of charge, mortgage
or otherwise.

 

    	 	13	 

     

    

  

(h)       Counterparts;
Integration; Effectiveness. This Security Agreement may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
This Security Agreement, the Purchase Agreement, the Control Agreement and the FSFR Voting Agreement constitute the entire contract
among the parties relating to the subject matter hereof and thereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof and thereof. This Security Agreement shall become effective when it shall
have been executed by Secured Party and when Secured Party shall have received counterparts hereof that, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Security Agreement
by facsimile or electronic transmission shall be effective as delivery of an original executed counterpart of such signature page.

 

(i)       Severability.
Any provision of this Security Agreement or the Purchase Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting
the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

(j)       Conflicts.
In the event of any conflict between the provisions of this Security Agreement and the provisions of the Purchase Agreement, the
provisions of the Purchase Agreement shall govern and control.

 

(k)       Governing
Law; Submission to Jurisdiction. The provisions of Sections 10.9 and 10.10 of the Purchase Agreement shall apply mutatis
mutandis to this Security Agreement as if such provisions were fully set forth herein.

 

[Signature Page Follows]

 

    	 	14	 

     

    

  

IN WITNESS WHEREOF, the parties hereto have
caused this Security Agreement to be duly executed by their duly authorized representatives as of the date first above written.

 

	PLEDGOR:	 
	 	 
	FIFTH STREET HOLDINGS L.P.	 
	 	 	 
	By:	/s/ Leonard M. Tannenbaum	 
	Name:	Leonard M. Tannenbaum	 
	Title:	Chief Executive Officer	 

 

[Signature Page to Security Agreement]

 

     

     

    

 

	SECURED PARTY:	 
	 	 
	Fifth Street Senior Floating Rate Corp.	 
	 	 	 
	By:	/s/ Bernard D. Berman	 
	Name:	Bernard D. Berman	 
	Title:	Chief Executive Officer	 

 

[Signature Page to Security Agreement]

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