Document:

Exhibit 10.1

 

INVESTMENT ADVISORY AGREEMENT

 

BETWEEN

 

STELLUS PRIVATE CREDIT BDC

 

AND

 

STELLUS PRIVATE BDC ADVISOR, LLC

 

AGREEMENT, dated as of [•], 2021, between
Stellus Private Credit BDC, a Delaware statutory trust (the “Fund”), and Stellus Private BDC Advisor, LLC (the “Advisor”),
a Delaware limited liability company.

 

WHEREAS, the Advisor has agreed to furnish investment
advisory services to the Fund, which intends to elect to operate as a business development company under the Investment Company Act of
1940, as amended (the “1940 Act”); and

 

WHEREAS, this Agreement has been approved in accordance
with the provisions of the 1940 Act, and the Advisor is willing to furnish such services upon the terms and conditions herein set forth.

 

NOW, THEREFORE, in consideration of the mutual
premises and covenants herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, it is
agreed by and between the parties hereto as follows:

 

1. In General. The Advisor agrees, all as
more fully set forth herein, to act as investment advisor to the Fund with respect to the investment of the Fund’s assets and to
supervise and arrange for the day-to-day operations of the Fund and the purchase of assets for and the sale of assets held in the investment
portfolio of the Fund.

 

2. Duties and Obligations of the Advisor with
Respect to Investment of Assets of the Fund.

 

(a) Subject to the succeeding provisions of
this paragraph and subject to the direction and control of the Fund’s board of trustees (the “Board of Trustees”),
the Advisor shall act as the investment advisor to the Fund and to manage the investment and reinvestment of the assets of the Fund. 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 of the portfolio of the Fund, 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 Fund; (iii) execute, close, service and monitor
the investments that the Fund makes; (iv) determine the securities and other assets that the Fund will purchase, retain or sell;
(v) perform due diligence on prospective portfolio companies; and (vi) provide the Fund with such other investment advisory,
research and related services as the Fund may, from time to time, reasonably require for the investment of its funds. Nothing contained
herein shall be construed to restrict the Fund’s right to hire its own employees or to contract for administrative services to be
performed by third parties, including but not limited to, the calculation of the net asset value of the Fund’s shares.

 

(b) In the performance of its duties under this Agreement, the
Advisor shall at all times use all reasonable efforts to conform to, and act in accordance with, any requirements imposed by (i) the
provisions of the 1940 Act, and of any rules or regulations in force thereunder, subject to the terms of any exemptive order applicable
to the Fund; (ii) any other applicable provision of law; (iii) the provisions of the Articles of Amendment and Restatement and
the Bylaws of the Fund, as such documents are amended from time to time; (iv) the investment objectives, policies and restrictions
applicable to the Fund as set forth in the Fund’s Registration Statement on Form 10 or Form N-2 filed with the U.S. Securities
and Exchange Commission (the “SEC”), as supplemented, amended or superseded from time to time, including in the periodic
reports filed by the Fund under the Securities Exchange Act of 1934, as amended (together with the rules promulgated thereunder;
and (v) any policies and determinations of the Board of Trustees of the Fund and provided in writing to the Advisor.

 

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(c) The Advisor will seek to provide qualified
personnel to fulfill its duties hereunder and, except as set forth in the following sentence, will bear all costs and expenses incurred
in connection with its investment advisory duties hereunder. The Fund shall reimburse the Advisor for all direct and indirect costs and
expenses incurred by the Advisor for office space rental, office equipment, utilities and other non-compensation related overhead allocable
to performance of investment advisory services hereunder by the Advisor, including the costs and expenses of due diligence of potential
investments, monitoring performance of the Fund’s investments, serving as trustees and officers of portfolio companies, providing
managerial assistance to portfolio companies, enforcing the Fund’s rights in respect of its investments and disposing of investments.
All allocations made pursuant to this paragraph (c) shall be made pursuant to allocation guidelines approved from time to time by
the Board of Trustees. The Fund shall also be responsible for the payment of all the Fund’s other expenses, including payment of
the fees payable to the Advisor under Section 6 hereof; organizational and offering expenses; expenses incurred in valuing the Fund’s
assets and computing its net asset value per share (including the cost and expenses of any independent valuation firm); expenses incurred
by the Fund’s administrator or payable to third parties, including agents, consultants or other advisors, in monitoring financial
and legal affairs for the Fund and in monitoring the Fund’s investments and performing due diligence on the Fund’s prospective
portfolio companies or otherwise related to, or associated with, evaluating and making investments; interest payable on debt, if any,
incurred to finance the Fund’s investments and other fees and expenses related to the Company’s borrowings; expenses related
to unsuccessful portfolio acquisition efforts; offerings of the Fund’s common stock and other securities (including underwriting,
placement agent and similar fees and commissions); investment advisory and management fees payable under this Agreement; administration
fees; transfer agent and custody fees and expenses; federal and state registration fees; all costs of registration and listing the Fund’s
shares on any securities exchange; federal, state and local taxes; independent trustees’ fees and expenses; costs of preparing and
filing reports or other documents required by the SEC or other regulators; costs of any reports, proxy statements or other notices to
stockholders, including printing costs; the costs associated with individual or group stockholders; the Fund’s allocable portion
of the fidelity bond, trustees and officers/errors and omissions liability insurance, and any other insurance premiums; direct costs and
expenses of administration and operation, including printing, mailing, long distance telephone, copying, secretarial and other staff,
independent auditors, third party investor hosting and similar platforms and service providers, and outside legal costs; and all other
non-investment advisory expenses incurred by the Fund, the Advisor or its affiliates in connection with the administering the Fund’s
business.

 

(d) The Advisor shall give the Fund the benefit
of its professional judgment and effort in rendering services hereunder, but neither the Advisor nor any of its officers, directors, trustees,
employees, agents or controlling persons shall be liable for any act or omission or for any loss sustained by the Fund in connection with
the matters to which this Agreement relates, provided, that the foregoing exculpation shall not apply to a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of its reckless disregard of its obligations
and duties under this Agreement; provided further, however, that the foregoing shall not constitute a waiver of any rights which the Fund
may have which may not be waived under applicable law.

 

(e) The Advisor will place orders either directly
with the issuer or with any broker or dealer. Subject to the other provisions of this paragraph, in placing orders with brokers and dealers,
the Advisor will attempt to obtain the best price and the most favorable execution of its orders. In placing orders, the Advisor will
consider the experience and skill of the firm’s securities traders as well as the firm’s financial responsibility and administrative
efficiency. Consistent with this obligation, the Advisor may select brokers on the basis of the research, statistical and pricing services
they provide to the Fund and other clients of the Advisor. Information and research received from such brokers will be in addition to,
and not in lieu of, the services required to be performed by the Advisor hereunder. A commission paid to such brokers may be higher than
that which another qualified broker would have charged for effecting the same transaction, provided that the Advisor determines in good
faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Advisor to the Fund and
its other clients and that the total commissions paid by the Fund will be reasonable in relation to the benefits to the Fund over the
long term, subject to review by the Board of Trustees of the Fund from time to time with respect to the extent and continuation of such
practice to determine whether the Fund benefits, directly or indirectly, from such practice.

 

3. Services Not Exclusive. Nothing in this
Agreement shall prevent the Advisor or any officer, employee or other affiliate thereof from acting as investment advisor for any other
person, firm or corporation, or from engaging in any other lawful activity, and shall not in any way limit or restrict the Advisor or
any of its officers, employees or agents from buying, selling or trading any securities for its or their own accounts or for the accounts
of others for whom it or they may be acting; provided, however, that the Advisor will not undertake, and will cause its
employees not to undertake, activities which, in its reasonable judgment, will adversely affect the performance of the Advisor’s
obligations under this Agreement.

 

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4. Agency Cross Transactions. From time
to time, the Advisor or brokers or dealers affiliated with it may find themselves in a position to buy for certain of their brokerage
clients (each an “Account”) securities which the Advisor’s investment advisory clients wish to sell, and to sell
for certain of their brokerage clients securities which advisory clients wish to buy. Where one of the parties is an advisory client,
the Advisor or the affiliated broker or dealer cannot participate in this type of transaction (known as a cross transaction) on behalf
of an advisory client and retain commissions from one or both parties to the transaction without the advisory client’s consent.
This is because in a situation where the Advisor is making the investment decision (as opposed to a brokerage client who makes his own
investment decisions), and the Advisor or an affiliate is receiving commissions from both sides of the transaction, there is a potential
conflicting division of loyalties and responsibilities on the Advisor’s part regarding the advisory client. The SEC has adopted
a rule under the Investment Advisers Act of 1940 which permits the Advisor or its affiliates to participate on behalf of an Account
in agency cross transactions if the advisory client has given written consent in advance. By execution of this Agreement, the Fund authorizes
the Advisor or its affiliates to participate in agency cross transactions involving an Account. The Fund may revoke its consent at any
time by written notice to the Advisor.

 

5. Expenses. During the term of this Agreement,
the Advisor will bear all compensation expense (including health insurance, pension benefits, payroll taxes and other compensation related
matters) of its employees and shall bear the costs of any salaries or trustees’ fees of any officers or trustees of the Fund who
are affiliated persons (as defined in the 1940 Act) of the Advisor.

 

6. Compensation of the Advisor. The Advisor,
for its services to the Fund, will be entitled to receive a management fee (the “Base Management Fee”) and an incentive
fee (“Incentive Fee”) from the Fund.

 

(a) The Base Management Fee will be calculated
at an annual rate of 1.5% of the Fund’s gross assets, including assets purchased with borrowed funds or other forms of leverage
but excluding cash and cash equivalents. For the period from the date of commencement of the Fund’s operations through the end of
the first and second quarters of the Fund’s operations, the Base Management Fee will be calculated based on the value of the Fund’s
gross assets at the end of each such quarter. Subsequently, the Base Management Fee will be calculated based on the average value of the
Fund’s gross assets at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are
being calculated. Base Management Fees for any partial month or quarter will be appropriately pro-rated.

 

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

 

(i) The first component of the Incentive
Fee (the “Income-Based Fee”) will be determined and paid quarterly in arrears based on the amount by which (x) the
Pre-Incentive Fee Net Investment Income (as defined below) in respect of the current calendar quarter beginning with the calendar quarter
that commences on or after [•], 2021 exceeds (y) the Hurdle Amount (as defined below) in respect of the Current Quarter. The
Hurdle Amount will be determined on a quarterly basis, and will be calculated by multiplying 1.5% (6% annualized) by the Fund’s
net asset value at the beginning of the Current Quarter. For this purpose, “Pre-Incentive Fee Net Investment Income”
means interest income, dividend income and any other income (including, without limitation, any accrued income that the Fund has not yet
received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the
Fund receives from portfolio companies) accrued during the calendar quarter, minus the Fund’s operating expenses accrued during
the calendar quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends
paid on any issued and outstanding preferred stock, but excluding the Income-Based Fee and the Capital Gains Fee). For the avoidance of
doubt, Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital
appreciation or depreciation.

 

The calculation of the Income-Based Fee for each
quarter is as follows:

 

(A)  No Income-Based Fee shall be payable
to the Advisor if the Fund’s Pre-Incentive Fee Net Investment Income for the Current Quarter does not exceed the Hurdle Amount;

 

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(B)  100% of the Fund’s Pre-Incentive
Fee Net Investment Income for the Current Quarter, if any, that exceeds the Hurdle Amount but is less than or equal to an amount (the
 “Catch-Up Amount”) determined on a quarterly basis by multiplying [1.7647]% ([7.0588]% annualized) by the Fund’s
net asset value at the beginning of each the Current Quarter. The Catch-Up Amount is intended to provide the Advisor with an incentive
fee of 15% on all of the Fund’s Pre-Incentive Fee Net Investment Income when the Fund’s Pre-Incentive Fee Net Investment Income
reaches the Catch-Up Amount for the Current Quarter; and

 

(C)  If the Fund’s Pre-Incentive Fee
Net Investment Income for the Current Quarter exceeds the Catch-Up Amount, the Income-Based Fee shall equal 15% of the amount of the Fund’s
Pre-Incentive Fee Net Investment Income for such Current Quarter, as the Hurdle Amount and Catch-Up Amount will have been achieved.

 

(ii)  The Income-Based Fee is subject to a
cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 15% of the Cumulative
Pre-Incentive Fee Net Return (as defined below) during the Current Quarter and the three preceding calendar quarters (or portion thereof)(the
 “Trailing Four Quarters”) less (b) the aggregate Income-Based Fee that was paid to the Advisor in the preceding
three calendar quarters (or portion thereof) comprising the relevant Trailing Four Quarters. For this purpose, “Cumulative Pre-Incentive
Fee Net Return” during the relevant Trailing Four Quarters means (x) Pre-Incentive Fee Net Investment Income in respect
of the Trailing Four Quarters less (y) any Net Capital Loss, if any, in respect of the Trailing Four Quarters. If, in any quarter,
the Incentive Fee Cap is zero or a negative value, the Fund shall pay no Income-Based Fee to the Advisor in that quarter. If, in any quarter,
the Incentive Fee Cap is a positive value but is less than the Income-Based Fee calculated in accordance with Section 6(b)(i) above,
the Fund shall pay the Advisor the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater
than the Income-Based Fee calculated in accordance with Section 6(b)(i) above, the Fund shall pay the Advisor the Income-Based
Fee for such quarter.

 

“Net Capital Loss” in respect
of a particular period means the difference, if positive, between (i) aggregate capital losses on the Fund’s assets, whether
realized or unrealized, in such period and (ii) aggregate capital gains or other gains on the Fund’s assets, whether realized
or unrealized, in such period.

 

(iii) The second part of the Incentive Fee
(the “Capital Gains Fee”) will be determined and payable in arrears as of the end of each calendar year (or upon termination
of this Agreement as set forth below), commencing with the calendar year ending on December 31, 2021, and is calculated at the end
of each applicable year by subtracting (1) the sum of the Fund’s cumulative aggregate realized capital losses and aggregate
unrealized capital depreciation from (2) the Fund’s cumulative aggregate realized capital gains, in each case calculated from
[•], 2021. If the amount so calculated is positive, then the Capital Gains Fee for such year is equal to 15.0% of such amount, less
the aggregate amount of Capital Gains Fees paid in all prior years; provided that the Capital Gains Fee determined as of December 31,
2021 will be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net
of all realized capital losses and unrealized capital depreciation for the period ending December 31, 2021. If such amount is negative,
then no Capital Gains Fee will be payable for such year. If this Agreement is terminated as of a date that is not a calendar year end,
the termination date shall be treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.

 

7. Indemnification. The Advisor (and its
officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Advisor)
shall not be liable to the Fund for any action taken or omitted to be taken by the Advisor in connection with the performance of any of
its duties or obligations under this Agreement or otherwise as an investment adviser of the Fund (except to the extent specified in Section 36(b) of
the 1940 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 Fund shall indemnify, defend and protect the Advisor (and its officers,
managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Advisor) (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
Fund or its security holders) 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 adviser of the Fund. Notwithstanding the preceding sentence of this Section 7
to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed
to entitle the Indemnified Parties to indemnification in respect of, any liability to the Fund or its security holders to which the Indemnified
Parties would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of the Advisor’s
duties or by reason of the reckless disregard of the Advisor’s duties and obligations under this Agreement (as the same shall be
determined in accordance with the 1940 Act and any interpretations or guidance by the SEC or its staff thereunder).

 

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8. Duration and Termination.

 

(a) This Agreement shall become effective
as of the first date above written. This Agreement may be terminated at any time, without the payment of any penalty, upon 60 days’
written notice, (i) by the vote of a majority of the outstanding voting securities of the Fund, (ii) by the vote of the Fund’s
Board of Trustees, or (iii) by the Advisor. The provisions of Section 8 of this Agreement shall remain in full force and
effect, and the Advisor shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement.  Further,
notwithstanding the termination or expiration of this Agreement as aforesaid, the Advisor shall be entitled to any amounts owed under
Section 6 through the date of termination or expiration and Section 8 shall continue in force and effect and apply to the Advisor
and its representatives as and to the extent applicable.

 

(b) This Agreement shall continue in effect
for two years from the date hereof and thereafter shall continue automatically for successive annual periods, provided that such continuance
is specifically approved at least annually by (A) the vote of the Board of Trustees, or by the vote of a majority of the outstanding
voting securities of the Fund and (B) the vote of a majority of the members of the Fund’s Board of Trustees who are not parties
to this Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of the 1940 Act) of any such party,
in accordance with the requirements of the 1940 Act.

 

(c) This Agreement will automatically
terminate in the event of its “assignment” (as such term is defined for purposes of Section 15(a)(4) of the 1940
Act).

 

9. Notices. Any notice under this Agreement
shall be in writing to the other party at such address as the other party may designate from time to time for the receipt of such notice
and shall be deemed to be received on the earlier of the date actually received or on the fourth day after the postmark if such notice
is mailed first class postage prepaid.

 

10. Amendment of this Agreement. This Agreement
may be amended by mutual consent, but the consent of the Fund must be obtained in conformity with the requirements of the 1940 Act.

 

11. 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.  This Agreement shall be construed in accordance with the laws of the State of New York and in
accordance with the applicable provisions of the 1940 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 1940 Act, the latter shall control.

 

12. Miscellaneous. The captions in this
Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding on and shall inure to the benefit
of the parties hereto and their respective successors.

 

13. Counterparts. This Agreement may be
executed in counterparts by the parties hereto, each of which shall constitute an original counterpart, and all of which, together, shall
constitute one Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have caused
the foregoing instrument to be executed by their duly authorized officers, all as of the day and the year first above written.

 

	 	STELLUS PRIVATE CREDIT BDC

 

 

	 	By:	 
	 	Name:	 W. Todd Huskinson
	 	Title:	Chief Financial Officer

 

	 	STELLUS PRIVATE BDC ADVISOR, LLC

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

    6Exhibit 10.2

 

ADMINISTRATION AGREEMENT

 

This ADMINISTRATION AGREEMENT (this “Agreement”)
made as of [•], 2021 by and between Stellus Private Credit BDC, a Delaware statutory trust (the “Fund”), and Stellus
Capital Management, LLC, a Delaware limited liability company (the “Administrator”).

 

WITNESSETH:

 

WHEREAS, the Fund is a newly organized closed-end
investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended
(the “1940 Act”);

 

WHEREAS, the Fund desires to retain the Administrator
to provide administrative services to the Fund in the manner and on the terms hereinafter set forth; and

 

WHEREAS, the Administrator is willing to provide
administrative services to the Fund on the terms and conditions hereafter set forth.

 

NOW, THEREFORE, in consideration of the premises
and the covenants hereinafter contained and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged,
the Fund and the Administrator hereby agree as follows:

 

1.     Duties
of the Administrator.

 

(a) Employment of Administrator.
The Fund hereby employs the Administrator to act as administrator of the Fund, and to furnish, or arrange for others to furnish, the
administrative services, personnel and facilities described below, subject to review by and the overall control of the Board of Trustees
of the Fund (the “Board”), for the period and on the terms and conditions set forth in this Agreement. The Administrator
hereby accepts such employment and agrees during such period to render, or arrange for the rendering of, such services and to assume the
obligations herein set forth subject to the reimbursement of costs and expenses as provided for below. The Administrator and any such
other persons providing services arranged for by the Administrator shall for all purposes herein be deemed to be independent contractors
and shall, unless otherwise expressly provided or authorized herein, have no authority to act for or represent the Fund in any way or
otherwise be deemed agents of the Fund.

 

(b) Services. The Administrator shall perform (or
oversee, or arrange for, the performance of) the administrative services necessary for the operation of the Fund. Without limiting the
generality of the foregoing, the Administrator shall provide the Fund with office facilities, equipment, clerical, bookkeeping, and record
keeping services at such office facilities, and such other services as the Administrator, subject to review by the Board, shall from time
to time determine to be necessary or useful to perform its obligations under this Agreement. The Administrator shall also, on behalf of
the Fund, arrange for the services of, and oversee, custodians, depositories, transfer agents, dividend disbursing agents, other stockholder
servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons
in any such other capacity deemed to be necessary or desirable. The Administrator shall make reports to the Board of its performance of
obligations hereunder and furnish advice and recommendations with respect to such other aspects of the business and affairs of the Fund
as it shall determine to be desirable; provided that nothing herein shall be construed to require the Administrator to, and the
Administrator shall not, in its capacity as Administrator, provide any advice or recommendation relating to the securities and other assets
that the Fund should purchase, retain or sell or any other investment advisory services to the Fund. The Administrator shall be responsible
for the financial and other records that the Fund is required to maintain and shall prepare all reports to its stockholders, as well as
reports and other materials required to be filed with the Securities and Exchange Commission (the “SEC”). At
the Fund’s request, the Administrator will provide on the Fund’s behalf significant managerial assistance to those portfolio
companies to which the Fund is required to offer such assistance. In addition, the Administrator will assist the Fund in determining and
publishing the Fund’s net asset value, overseeing the preparation and filing of the Fund’s tax returns, and the printing and
dissemination of reports to stockholders of the Fund, and generally overseeing the payment of the Fund’s expenses and the performance
of administrative and professional services rendered to the Fund by others.

 

    

     

    

 

2.     Records.
The Administrator agrees to maintain and keep all books, accounts and other records of the Fund that relate to activities performed by
the Administrator hereunder and, if required by any applicable statutes, rules and regulations, including without limitation, the
1940 Act, will maintain and keep such books, accounts and records in accordance with such statutes, rules and regulations. In compliance
with the requirements of Rule 31a-3 under the 1940 Act, the Administrator agrees that all records that it maintains for the Fund
shall at all times remain the property of the Fund, shall be readily accessible during normal business hours, and shall be promptly surrendered
upon the termination of this Agreement or otherwise on written request. The Administrator further agrees that all records which it maintains
for the Fund pursuant to Rule 31a-1 under the 1940 Act will be preserved for the periods prescribed by Rule 31a-2 under the
1940 Act unless any such records are earlier surrendered as provided above. Records shall be surrendered in usable machine-readable form.
The Administrator shall have the right to retain copies of such records subject to observance of its confidentiality obligations under
this Agreement. The Administrator may engage one or more third parties to perform all or a portion of the foregoing services.

 

3.     Confidentiality.
The parties hereto agree that each shall treat confidentially all information provided by each party to the other regarding its business
and operations. All confidential information provided by a party hereto, including nonpublic personal information of natural persons pursuant
to Regulation S-P of the SEC, shall be used by the other party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party without the prior consent
of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter
becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed by any regulatory authority,
any authority or legal counsel of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation.

 

4.     Compensation;
Allocation of Costs and Expenses.

 

(a) In full consideration of the
provision of the services of the Administrator, the Fund shall reimburse the Administrator for the costs and expenses incurred by the
Administrator in performing its obligations and providing personnel and facilities hereunder, including the costs and expenses charged
by any sub-administrator that may be retained by the Administrator to provide services to the Fund or on the Administrator’s behalf.
Specifically, the reimbursements made by the Fund to the Administrator shall include, but not be limited to:

 

(i).the allocable portion of the Administrator’s
rent for the Fund’s Chief Financial Officer and the Chief Compliance Officer and their respective staffs;

 

(ii). the allocable portion of the
salaries, bonuses, benefits and expenses of the Fund’s Chief Financial Officer and Chief Compliance Officer and their respective
staffs;

 

(iii).the actual cost of goods and
services, including license fees for software tools and information technology, used for the Fund and obtained by the Administrator from
entities not affiliated with the Fund;

 

(iv).all fees, costs and expenses associated
with the engagement of a Sub-Administrator; and

 

(v). costs associated with (a) the monitoring and preparation of regulatory reporting, including
registration statement amendments, prospectus supplements, and tax reporting, (b) the coordination and oversight of service provider
activities and the direct cost of such contractual matters related thereto and (c) the preparation of all financial statements and
the coordination and oversight of audits, regulatory inquiries, certifications and sub-certifications.

 

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(b) The Fund will bear all costs
and expenses that are incurred in its operation and transactions and not specifically assumed by the Fund’s investment advisor (the
 “Advisor”), pursuant to that certain Investment Advisory Agreement, dated as of [•], 2021, by and between the
Fund and the Advisor. Costs and expenses to be borne by the Fund include, but are not limited to, those relating to: the Fund’s
organization; calculating the Fund’s net asset value (including the cost and expenses of any independent valuation firms); expenses,
including travel expense, incurred by the Advisor or payable to third parties performing due diligence on prospective portfolio companies,
monitoring the Fund’s investments and, if necessary, enforcing its rights; interest payable on debt, if any, incurred to finance
the Fund’s investments; fees and expenses related to the Fund’s borrowings, offerings of the Fund’s common stock and
other securities (including underwriting, placement agent, technology platforms, investor diligence and similar fees and commissions);
investment advisory fees; incentive fees; distributions on the Fund’s shares; administration fees payable under this Agreement;
the allocated costs incurred by the Administrator in providing managerial assistance to those portfolio companies that request it; amounts
payable to third parties relating to, or associated with, making investments; transfer agent and custodial fees; registration fees; listing
fees; taxes; independent director fees and expenses; preparing and filing reports or other documents with the SEC; preparation of any
reports, proxy statements or other notices to our stockholders, including printing costs; the Fund’s fidelity bond; directors and
officers/errors and omissions liability insurance, and any other insurance premiums; indemnification payments; expenses relating to the
development and maintenance of the Fund’s website and use of third party technology platforms (investor hosting and similar platforms
and service providers); license fees for software tools and information technology used in connection with the administration of the Fund’s
business, direct costs and expenses of administration, including audit and legal costs; and all other expenses reasonably incurred by
the Fund or the Administrator in connection with administering the Fund’s business, such as the allocable portion of overhead under
this Agreement, including rent, and the allocable portion of the cost of the Fund’s chief financial officer and chief compliance
officer and their respective staffs.

 

5.     Limitation
of Liability of the Administrator; Indemnification. The Administrator, its affiliates and their respective directors, officers,
managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with any of them shall
not be liable to the Fund for any action taken or omitted to be taken by the Administrator in connection with the performance of any of
its duties or obligations under this Agreement or otherwise as administrator for the Fund, and the Fund shall indemnify, defend and protect
the Administrator (and its officers, managers, partners, agents, employees, controlling persons, members, and any other person or entity
affiliated with the Administrator (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 Fund or its security holders) arising out of or otherwise based upon the performance of any
of the Administrator’s duties or obligations under this Agreement or otherwise as administrator for the Fund. Notwithstanding the
preceding sentence of this Paragraph 5 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified
Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Fund
or its security holders to which the Indemnified Parties would otherwise be subject by reason of criminal conduct, willful misfeasance,
bad faith or gross negligence in the performance of the Administrator’s duties or by reason of the reckless disregard of the Administrator’s
duties and obligations under this Agreement (to the extent applicable, as the same shall be determined in accordance with the 1940 Act
and any interpretations or guidance by the SEC or its staff thereunder).

 

6.     Activities
of the Administrator. The services of the Administrator to the Fund are not to be deemed to be exclusive, and the Administrator
and each other person providing services as arranged by the Administrator is free to render services to others. It is understood that
trustees, officers, employees and stockholders of the Fund are or may become interested in the Administrator and its affiliates, as trustees,
directors, officers, members, managers, employees, partners, stockholders or otherwise, and that the Administrator and directors, officers,
members, managers, employees, partners and stockholders of the Administrator and its affiliates are or may become similarly interested
in the Fund as officers, trustees, stockholders or otherwise.

 

7.     Duration
and Termination of this Agreement.

 

(a) This Agreement shall continue
in effect for two years from the date hereof and thereafter continue automatically for successive annual periods, but only so long as
such continuance is specifically approved at least annually by (i) the Board and (ii) a majority of those members of the Board
who are not parties to this Agreement or “interested persons” (as defined by Section 2(a)(19) of the 1940 Act) of any
such party.

 

    3

     

    

 

(b) This Agreement may be terminated
at any time, without the payment of any penalty, by vote of the Fund’s Board, or by the Administrator, upon 60 days’
written notice to the other party.

 

(c) This Agreement may not be
assigned by a party without the consent of the other party.  The provisions of Section 5 of this Agreement shall remain
in full force and effect, and the Administrator shall remain entitled to the benefits thereof, notwithstanding any termination of this
Agreement.

 

8.     Amendments
of this Agreement. This Agreement may be amended pursuant to a written instrument by mutual consent of the parties hereto.

 

9.     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. This Agreement shall be construed in accordance with the
laws of the State of New York and the applicable provisions of the 1940 Act, if any. 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 1940 Act, the latter shall control.

 

10.   Notices. All notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight
courier service (with signature required), by facsimile, or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at their respective principal executive office addresses.

 

12.   Miscellaneous.
The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto and their respective successors.

 

13.   Counterparts.
This Agreement may be executed in counterparts by the parties hereto, each of which shall constitute an original counterpart, and all
of which, together, shall constitute one Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    4

     

    

 

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

 

	 	STELLUS PRIVATE CREDIT BDC 
	 	 
	 	/s/
	 	By:  
	 	Title:  
	 	 
	 	STELLUS CAPITAL MANAGEMENT, LLC
	 	 
	 	BY: [•], its Managing Member
	 	 
	 	/s/
	 	By:
	 	Title:  

 

    5

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