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As filed with the U.S. Securities and Exchange Commission on June 5, 2017
Registration No. 333-218114

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-2
REGISTRATION STATEMENT

☒ Registration Statement under the Securities Act of 1933
☒ Pre-Effective Amendment No. 2
☐ Post-Effective Amendment No.

TCG BDC, INC.
(Exact name of Registrant as specified in its charter)

520 Madison Avenue, 40th Floor
New York, NY 10022
(Address of Principal Executive Offices)
(212) 813-4900
(Registrant’s Telephone Number, including Area Code)
Michael A. Hart
TCG BDC, Inc.
520 Madison Avenue, 40th Floor
New York, New York 10022
(Name and Address of Agent for Service)

Copies of information to:

Monica J. Shilling, Esq.
Proskauer Rose LLP
2049 Century Park East, 32nd Floor
Los Angeles, CA 90067
Telephone: (310) 557-2900
Facsimile: (310) 557-2193	 	William G. Farrar, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
(212) 558-4000
(212) 558-3588	 	Paul D. Tropp, Esq.
Freshfields Bruckhaus Deringer US LLP
601 Lexington Ave, 31st Floor
New York, NY 10022
Telephone: (212) 277-4000
Facsimile: (212) 277-4001	

Approximate date of proposed public offering: As soon as practicable after the effective date of this Registration Statement.

If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with dividend or interest reinvestment plans, check the following box  ☐
It is proposed that this filing will become effective (check appropriate box):
 
☐	when declared effective pursuant to section 8(c)	

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

 	
Title of
Securities Being Registered	 	Amount
Being
Registered(1)	 	Proposed
Maximum
Offering Price
per Share	 	Proposed
Maximum
Aggregate
Offering Price
(1)(2)	 	Amount of
Registration Fee(3)	
Common Stock, $0.01 par value per share	 	10,350,000	 	$19.50	 	$201,825,000	 	$22,392	

 
(1)	Includes 1,350,000 shares that the underwriters have the option to purchase.	
(2)	Estimated pursuant to Rule 457(a) solely for the purpose of calculating the registration fee.	
(3)	Includes $11,590 the Registrant previously paid in connection with the initial filing of this Registration Statement.	

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer and sale is not permitted.

PRELIMINARY PROSPECTUS	  	SUBJECT TO COMPLETION DATED, JUNE 5, 2017	
9,000,000 SHARES

 
TCG BDC, INC.
COMMON STOCK

We are an externally managed specialty finance company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended. Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which we define as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization. We seek to achieve this investment objective by investing primarily in first lien senior secured loans and second lien senior secured loans.
As of March 31, 2017, our investment portfolio consisted of 94 investments in 82 portfolio companies with an aggregate fair value of $1,392.5 million.
We are managed by Carlyle GMS Investment Management L.L.C., an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle GMS Finance Administration L.L.C. provides the administrative services necessary for us to operate. Both Carlyle GMS Investment Management L.L.C. and Carlyle GMS Finance Administration L.L.C. are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of The Carlyle Group L.P. The Carlyle Group L.P. is a global alternative asset manager with approximately $162 billion of assets under management as of March 31, 2017.
This is an initial public offering of our shares of common stock. All of the shares of common stock offered by this prospectus are being sold by us.
Our shares of common stock have no history of public trading. We currently expect that the initial public offering price per share of our common stock will be between $18.50 and $19.50. We have applied to have our common stock listed on the NASDAQ Global Select Market under the symbol “CGBD”.
We are an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act of 2012, as amended.
Certain individuals affiliated with Carlyle have indicated that they intend to adopt a 10b5-1 plan (the “10b5-1 Plan”) in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We expect that under such 10b5-1 Plan the participants will buy up to $15 million in the aggregate of our common stock in the open market during the period beginning four full calendar weeks after the closing of this offering and ending on the earlier of the date on which the capital committed to the 10b5-1 Plan has been exhausted or one year after the closing of this offering, subject to certain conditions. See “Certain Relationships and Related Party Transactions.” Purchases of our common stock in the open market pursuant to the 10b5-1 Plan will be subject to certain conditions and conducted in accordance with Rule 10b-18 under the Exchange Act and other applicable securities laws and regulations that set certain restrictions on the method, timing, price and volume of stock repurchases.
Shares of closed-end investment companies, including BDCs, that are listed on an exchange frequently trade at a discount to their net asset value (“NAV”) per share. If our shares trade at a discount to our NAV per share, it may increase the risk of loss for purchasers in this offering.  Assuming an initial public offering price of $19.00 per share, purchasers in this offering will experience dilution of approximately $0.68 per share. See “Dilution” for more information.
This prospectus contains important information you should know before investing in our securities. Please read it before you invest and keep it for future reference. We file annual, quarterly and current reports, proxy statements and other information about us with the U.S. Securities and Exchange Commission (the “SEC”). You may obtain this information or make stockholder inquiries by written or oral request and free of charge by contacting us by mail at our principal executive offices located at 520 Madison Avenue, 40th Floor, New York, NY 10022, on our website at www.tcgbdc.com, or by calling us at (212) 813-4900. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider that information to be a part of this prospectus. The SEC also maintains a website at http://www.sec.gov that contains this information.
Investing in our common stock involves a high degree of risk, including credit risk and the risk of the use of leverage, and is highly speculative. Before buying any shares of our common stock, you should read the discussion of the material risks of investing in our common stock in “Risk Factors” beginning on page 27 of this prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 	  	Per Share	 	  	Total	 	
Public offering price	  	$	        	 	  	$	        	 	
Sales load (underwriting discounts and amounts) (1)	  	$	 	 	  	$	 	 	
Proceeds, before expenses, to us (2)	  	$	 	 	  	$	 	 	
 
(1)	Our Investment Adviser will pay 50% of the total sales load $         million, or $         per share (or approximately $         million, or $         per share if the underwriters’ option to purchase additional shares is exercised in full to the underwriters, representing 50% of the total sales load), which is not reflected in the table above. The portion of the sales load not payable by our Investment Adviser will be borne by us. See “Underwriting” for a more complete description of underwriting compensation.	
(2)	We estimate that we will incur offering expenses of approximately $1,800,000, or approximately $0.20 per share, in connection with this offering (reflecting the 50% of the estimated offering expenses that are payable by us). Our Investment Adviser has agreed to pay 50% of the total estimated offering expenses in connection with this offering. We are not obligated to repay the expenses paid by our Investment Adviser.	
We have granted the underwriters an option to purchase up to an additional 1,350,000 shares of our common stock from us, at the public offering price, less the sales load payable by us, within 30 days from the date of this prospectus. If the underwriters exercise their option to purchase additional shares in full, the total sales load payable by us will be $         million and total proceeds to us, before expenses, will be $         million.

The shares will be delivered on or about                     , 2017.

Joint Book-Running Managers

BofA Merrill Lynch	 	Morgan Stanley	 	J.P. Morgan	 	Citigroup	
Bookrunners

Keefe, Bruyette & Woods
                             A Stifel Company            	 	Wells Fargo Securities	
Co-Managers

HSBC	 	Mizuho Securities	
The date of this prospectus is                     , 2017

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TCG BDC, INC.
INDEX

SUMMARY	  	 	1	 	
THE OFFERING	  	 	15	 	
FEES AND EXPENSES	  	 	22	 	
SELECTED FINANCIAL AND OTHER INFORMATION	  	 	25	 	
RISK FACTORS	  	 	27	 	
FORWARD-LOOKING STATEMENTS	  	 	56	 	
USE OF PROCEEDS	  	 	58	 	
DISTRIBUTIONS	  	 	59	 	
CAPITALIZATION	  	 	61	 	
DILUTION	  	 	63	 	
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	  	 	65	 	
SENIOR SECURITIES	  	 	100	 	
BUSINESS	  	 	101	 	
PORTFOLIO COMPANIES	  	 	116	 	
MANAGEMENT	  	 	124	 	
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	  	 	142	 	
CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS	  	 	144	 	
DETERMINATION OF NET ASSET VALUE	  	 	145	 	
DESCRIPTION OF CAPITAL STOCK	  	 	148	 	
SHARES ELIGIBLE FOR FUTURE SALE	  	 	155	 	
DIVIDEND REINVESTMENT PLAN	  	 	157	 	
REGULATION	  	 	159	 	
U.S. FEDERAL INCOME TAX CONSIDERATIONS	  	 	165	 	
CUSTODIAN, TRANSFER AND DISTRIBUTION PAYING AGENT AND REGISTRAR	  	 	176	 	
BROKERAGE ALLOCATION AND OTHER PRACTICES	  	 	177	 	
UNDERWRITING	  	 	178	 	
LEGAL MATTERS	  	 	184	 	
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	  	 	184	 	
ADDITIONAL INFORMATION	  	 	184	 	
INDEX TO FINANCIAL STATEMENTS	  	 	F-1	 	
You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information or to make any representations not contained in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume the information contained in this prospectus is accurate after the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
TRADEMARKS
This prospectus contains trademarks and service marks owned by Carlyle (as defined below). This prospectus may also contain trademarks and service marks owned by third parties.

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SUMMARY
This summary highlights some of the information contained elsewhere in this prospectus. This summary is not complete and may not contain all of the information that you should consider before investing in our common stock offered by this prospectus. You should review the more detailed information contained in this prospectus, especially the information set forth under the heading “Risk Factors” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus.
Unless indicated otherwise in this prospectus or the context suggests otherwise:
 
 	•	 	the terms “we,” “us,” “our,” “TCG BDC” and “Company” refer to TCG BDC, Inc. (f/k/a Carlyle GMS Finance, Inc.), a Maryland corporation and its consolidated subsidiaries;	
 
 	•	 	the term “SPV” refers to TCG BDC SPV LLC (f/k/a Carlyle GMS Finance SPV LLC), our wholly owned and consolidated subsidiary;	
 
 	•	 	the term “2015-1 Issuer” refers to Carlyle GMS Finance MM CLO 2015-1 LLC, our wholly owned and consolidated subsidiary;	
 
 	•	 	the term “Carlyle” refers to The Carlyle Group L.P. (NASDAQ: CG) and its affiliates and consolidated subsidiaries (other than portfolio companies of its affiliated funds);	
 
 	•	 	the terms “CGMSFA” and “Administrator” refer to Carlyle GMS Finance Administration L.L.C., our administrator, a wholly owned and consolidated subsidiary of Carlyle;	
 
 	•	 	the terms “CGMSIM” and “Investment Adviser” refer to Carlyle GMS Investment Management L.L.C., our investment adviser, a wholly owned and consolidated subsidiary of Carlyle;	
 
 	•	 	the term “CPC” refers to the Carlyle Private Credit platform, which is Carlyle’s direct lending business unit that operates within the broader Carlyle Global Credit platform (which in turn operates within Carlyle’s Global Market Strategies (“GMS”) segment); and	
 
 	•	 	the term “Credit Fund” refers to Middle Market Credit Fund, LLC, an unconsolidated limited liability company, in which we own a 50% economic interest and co-manage with Credit Partners USA LLC, and its wholly owned and consolidated subsidiary.	
We have elected to be regulated as a business development company, or a “BDC,” under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, for U.S. federal income tax purposes, we have elected to be treated as a regulated investment company, or RIC, under the Internal Revenue Code of 1986, as amended (together, with the rules and regulations promulgated thereunder, the “Code”).
Unless indicated otherwise, the information in this prospectus assumes no exercise by the underwriters of their option to purchase additional shares.
TCG BDC, Inc.
We are an externally managed specialty finance company focused on lending to middle-market companies. We are managed by our Investment Adviser, a wholly owned subsidiary of The Carlyle Group L.P. Since we commenced investment operations in May 2013 through March 31, 2017, we have invested more than $2.4 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which we define as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which we believe is a useful proxy for cash flow. We seek to achieve our investment objective primarily through direct originations of

 
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secured debt, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities).
We generate revenues primarily in the form of interest income from the investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees.
In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including our Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013, and we believe we will be one of the largest BDCs as measured by total assets at the time of such BDC’s initial public offering.
Investment Strategy
Our Investment Adviser is served by an origination, capital markets, underwriting and portfolio management team comprised of experienced investment professionals in the Carlyle Private Credit (“CPC”) platform, which is Carlyle’s direct lending business unit that operates within the broader Carlyle Global Credit platform (which in turn operates within Carlyle’s Global Market Strategies (“GMS”) segment). Our investment approach is focused on long-term credit performance and principal preservation. Our Investment Adviser’s investment team utilizes a rigorous, systematic, and consistent investment process, refined over Carlyle’s 30-year history investing in private markets across multiple cycles, designed to achieve enhanced risk-adjusted returns.
Origination Strategy
Our Investment Adviser has built a strong direct origination platform with coverage of over 200 private equity firms and over 150 lending institutions. Our Investment Adviser’s origination team sources approximately 700 opportunities per year for us with an ultimate investment rate by us of less than 10% annually. The scale of our Investment Adviser’s origination platform allows us to maximize access to investment opportunities and enhance overall investment selectivity. We further seek to reduce risk by partnering with experienced sponsors with strong track records. We believe lending to companies owned by leading private equity firms (versus non-sponsored companies) has several important and potentially defensive characteristics. Sponsor involvement provides for:
 
 	•	 	maximization of investment opportunities as approximately 70% of middle market loan volume is sponsor backed as of December 31, 2016, according to the S&P Global Market Intelligence LCD Middle Market Fact Sheet;	
 
 	•	 	validation of enterprise value;	
 
 	•	 	support, as needed, in strategy, operations and governance of portfolio companies; and	
 
 	•	 	the potential for additional capital commitment by sponsor if company requires financial support.	
Investment Approach and Risk Monitoring of Investments
Our Investment Adviser utilizes a rigorous, systematic and consistent due diligence underwriting process to evaluate all investment opportunities. Our Investment Adviser’s investment teams primarily consist of origination professionals, research analysts and underwriters. An investment team works on a particular transaction from initial screening through closing, and the same team continues to monitor the credit for the life cycle of the investment.

 
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During the investment process, the investment team works closely with the private equity sponsor in all aspects of due diligence, including onsite meetings, due diligence calls, and review of third party diligence reports. Our Investment Adviser also conducts an independent evaluation of the business, utilizing both internal and external sources. A key differentiator is our Investment Adviser’s integrated credit platform and collaborative efforts that leverage Carlyle’s broader resources, which include access to Carlyle’s relationships and institutional knowledge.
Diversification of our portfolio is a key tenet of our risk management strategy, including diversification by borrower, industry sector, sponsor relationships and other metrics. Additionally, we view proactive portfolio monitoring as a vital part of the investment process. Our Investment Adviser utilizes a proprietary credit surveillance report and software system, an objective rules-based Internal Risk Rating system and proprietary valuation model to assess risk in the portfolio. In addition to monthly portfolio reviews, our Investment Adviser compiles a quarterly risk report that examines, among other metrics, migration in portfolio and loan level investment mix, industry diversification, Internal Risk Ratings, revenue, EBITDA, and leverage. Our Investment Adviser supplements these policies with additional analyses and projections, including stress scenarios, to assess the potential exposure of our portfolio to variable macroeconomic factors and market conditions.
Strategic Relationships
We have established two highly differentiated strategic relationships that expand our product offering and increase our scale, enhancing our investment opportunities and optimizing selectivity rates, as we determine which credits provide the best risk adjusted returns for our stockholders. In early 2015, our Investment Adviser developed a key strategic relationship with Madison Capital Funding LLC (“Madison Capital”), a prominent non-bank finance company that is a subsidiary of New York Life Insurance Company, which has allowed us to offer various lending solutions to potential borrowers and has increased our coverage of U.S. middle market private equity firms. Additionally, in early 2016, we agreed to co-invest with Credit Partners USA LLC (“Credit Partners”), a wholly owned subsidiary of a large Canadian pension fund, to form Credit Fund, a joint venture primarily focused on investing in first lien loans to middle market companies. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400 million each. See “—Competitive Strengths—Strategic Relationships.”
Investment Portfolio
As of March 31, 2017, we had 94 investments in 82 portfolio companies with an aggregate fair value of $1,392.5 million. During the three months ended March 31, 2017, we invested $152 million in new investments. During the same period, we had $183 million in exits and repayments resulting in net portfolio decline of $31 million.
As of March 31, 2017, our portfolio was invested across 30 industries. As of March 31, 2017, no single portfolio company (excluding Credit Fund) represented more than 3% of our investments at fair value and no single industry represented more than 12% of our investments at fair value. Based on fair value as of March 31, 2017, approximately 98.3% of our investments were in U.S. domestic companies. As of such date, the weighted average remaining term of our debt investments was approximately 4.4 years. Based on fair value as of March 31, 2017, our portfolio consisted of approximately 89.6% in secured debt (78.0% in first lien debt (including 12.1% in first lien/last out loans) and 11.6% in second lien debt). Based on fair value as of March 31, 2017, approximately 1% of our debt portfolio was invested in debt bearing a fixed interest rate and approximately 99% of our debt portfolio was invested in debt bearing a floating interest rate with an interest rate floor.
As of March 31, 2017, the weighted average yield of our first lien debt (including first lien/last out loans) was 8.07% and 8.09% based on the amortized cost and fair value, respectively. During that same period, the weighted average yield on our second lien debt was 10.07% and 10.09% based on the amortized cost and fair value, respectively.

 
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As of March 31, 2017, we and Credit Partners had each contributed $45.5 million to Credit Fund. As of March 31, 2017, Credit Fund’s portfolio was invested in companies across 19 industries. As of March 31, 2017, the Credit Fund had investments in 35 portfolio companies with an aggregate fair value of $559 million. Based on fair value as of March 31, 2017, approximately 98.1% of Credit Fund’s investments were in U.S. domestic companies, and 100% was invested in debt bearing a floating interest rate with an interest rate floor.
Competitive Strengths
Market Leading Direct Origination Platform. We have access to CPC’s strong direct origination platform, with coverage of over 200 private equity firms and over 150 lending institutions. We take a regional approach to client coverage with offices in New York City, Chicago and Los Angeles. The origination team is highly experienced, and maintains deep relationships with a broad network of financial sponsors, commercial and investment banks, and finance companies, which are expected to continue to generate a significant amount of investment opportunities.
Scaled Investment Platform and Capabilities. CPC is an established, scaled investment platform with the ability to invest across the entire capital structure. CPC’s broad capabilities and ability to offer a full financing solution give us access to a wide funnel of opportunities, allow us to select high quality credits, construct the optimal financing package as it relates to price and terms, assert greater control over documentation, and generate attractive risk-adjusted returns for our stockholders. We believe CPC’s hold sizes are among the largest in the middle market, which we believe results in the ability to generate premium economics, as sponsors are willing to pay higher spreads for financing certainty. CPC’s large hold sizes and strategic relationships enable us to provide certainty with regards to spreads, fees, structure and covenants. Furthermore, the breadth of CPC’s debt offerings also allows us to deploy capital at a measured pace across credit cycles and construct a portfolio that will perform in a broad range of economic conditions.
One Carlyle Capabilities Leading to Superior Credit Performance. We benefit from our Investment Adviser’s utilization of the broader resources of Carlyle, which includes access to Carlyle’s relationships and institutional knowledge from almost three decades of private market investing. Our underwriting process leverages Carlyle’s 625 investment professionals across multiple alternative investment asset classes, 34 operating executive consultants, information obtained through direct ownership of over 270 companies and lending relationships with over 500 companies, 11 credit industry research analysts, and in-house government affairs and economic research teams. Our systematic and consistent approach is augmented by industry expertise and tenured underwriting professionals who both lead our Investment Adviser’s investment team and serve on our Investment Adviser’s investment committee. Strong credit underwriting has been a key component of our investing process, where our Investment Adviser seeks to select borrowers whose businesses are expected to generate substantial cash flows, to have leading management teams, stable operating histories, high barriers to entry and meaningful equity value, and to retain significant value.
Experienced Investment Team and Alignment of Interests. Our Investment Adviser’s investment team comprises investment professionals in CPC who have extensive middle market lending experience. The investment team consists of 28 dedicated investment professionals. The seven members of our Investment Adviser’s investment committee have an average of 21 years of industry experience. We believe the breadth and depth of the investment team in sourcing, structuring, executing, and monitoring a broad range of private investments provides us with a significant competitive advantage in building a high quality portfolio of investments.
Certain members of the investment team, investment committee and Carlyle’s senior management team, employees and affiliates own approximately 5% of our outstanding common stock. In addition, in order to align the interests of our Investment Adviser’s investment professionals with our investors, our Investment Adviser pays a portion of the incentive fees that it receives from us to our Investment Adviser’s investment committee and certain investment team members, which may represent a significant component of such individual’s compensation.

 
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Carefully Constructed Portfolio of Diversified Senior Secured, Floating Rate Loans. Our portfolio has been defensively constructed, exhibits strong credit quality, generates stable risk-adjusted returns and allows us to generate meaningful investment income, and consequently dividend income, for our stockholders. We have invested approximately $2.1 billion since our inception in directly originated middle market loans. Our portfolio is highly diversified by borrower, industry sector, sponsor relationships and other metrics. As of March 31, 2017, we had a portfolio of 94 investments in 82 portfolio companies across 30 industries and 54 unique sponsors. As of March 31, 2017, approximately 99% of our debt investments bore interest at floating rates, subject to interest rate floors, and 78.0% of our portfolio was invested in first-lien debt investments (including 12.1% first lien/last out loans).
Strategic Relationships. Our strategic relationships enhance our ability to provide full financing solutions to our borrowers, which results in our being able to generate optimal economics, significant access to diligence and control over documentation terms. Additionally, these relationships further strengthen our origination platform and ability to develop creative financing solutions to invest through the capital structure based on where we believe the best risk-adjusted return opportunities reside. Our Investment Adviser’s strategic relationship with Madison Capital, a leading middle market senior lender with approximately $8.0 billion of assets under management (“AUM”) as of March 31, 2017, allows us to offer a full unitranche financing solution. This product provides middle market companies with certainty for financing without syndication risk and generates attractive risk-adjusted returns on these investments for our stockholders. Madison Capital provides the first lien/first out portion of the unitranche loan, which allows us to provide the first lien/last out portion. Collectively, we and Madison Capital have provided over $900 million (before any repayments or exits) of unitranche loans to middle market companies. The relationship has been extremely successful, and we frequently invest alongside Madison Capital on a variety of investment opportunities (in addition to unitranche loans).
Separately, Credit Fund, our strategic joint venture with a large Canadian pension fund, primarily invests in first lien loans of middle-market companies. Since its inception and through March 31, 2017, Credit Fund has provided $603 million (before any repayments or exits) of senior secured loans. This joint venture provides us with an enhanced first lien loan product for certain transactions, thus further increasing our deal flow, and results in an increased number of borrowers in our portfolio, which provides strategic benefits as we build incumbent positions for future growth and investment opportunity.
Market Opportunity
We believe the middle market lending environment provides attractive investment opportunities as a result of a combination of the following factors:
Favorable Market Environment. We believe the middle market remains one of the most attractive investment areas due to its large size, superior value relative to the broadly syndicated loan market, and supply-demand imbalance that continues to favor non-bank lenders. We believe market yields remain attractive and leverage levels at middle market companies are stable, creating a favorable investment environment.
Large and Growing U.S. Middle Market. The U.S. middle market is the largest market by many measures, which is expected to enable us to invest selectively as approximately 70% of middle market loan volume is sponsor-backed. According to S&P Capital IQ, as of December 31, 2016, there are over 70,000 U.S. middle market companies generating between $20 million and $1 billion in annual revenue, compared with approximately 3,500 companies with revenue greater than $1 billion. We believe these middle market companies, both sponsored and non-sponsored, represent a significant growth segment of the U.S. economy and often require substantial capital investments to grow.

 
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Leverage, Pricing and Risk. According to the S&P Global Market Intelligence LCD Quarterly Leveraged Lending Review (Q4 2016), middle market companies are less levered, have larger equity contributions, experience lower rates of default, and achieve higher recoveries versus large cap broadly syndicated loans. Middle market loans also tend to achieve more attractive pricing and structures, including documentation, covenants and information/governance, than broadly syndicated loans. Over the 3 year period from 2014 to 2016, middle market loans have exhibited an approximate 200 basis points spread premium over broadly syndicated loans according to the S&P Global Market Intelligence LCD Leveraged Loan Index.
Market Environment Favors Non-Traditional Lenders. Traditional middle-market lenders, such as commercial and regional banks and commercial finance companies, have contracted their origination and lending activities and are focusing on more liquid asset classes or have exited the business. At the same time, institutional investors have sought to invest in larger, more liquid offerings, limiting the ability of middle-market companies to raise debt capital through public capital markets. This has resulted in other capital providers, such as specialty finance companies, structured-credit vehicles such as collateralized loan obligations (“CLOs”), BDCs, and private investment funds, actively investing in the middle market. We believe the aforementioned changes and restrictions have created a large and growing market opportunity for alternative lenders such as us.
Favorable Capital Markets Trends. Current and future demand for middle market financings, driven by private equity investment and upcoming maturities are expected to provide us with ample deal flow. Current data from the Thompson Reuters LPC Middle Market Weekly Report (January 27, 2017) suggests that approximately $615 billion of upcoming loan maturities for middle market companies are due between 2017 and 2022, and the PitchBook PE & VE Fundraising and Capital Overhang Report (1H 2016) suggests that there is over $657 billion of uninvested capital in 2011–2015 vintage private equity funds. We believe these refinancings and uninvested capital will provide a steady flow of attractive opportunities for well-positioned lenders with deep and longstanding sponsor and market relationships, particularly for providers of full capital structure financing solutions.
Benefits of Traditional Middle Market Focus. We believe there are significant advantages in our focus on the traditional middle market, a market we categorize to include borrowers with EBITDA in the range of approximately $10 million to $100 million. Traditional middle market companies are generally less levered than companies with EBITDA in excess of $100 million and loans to those borrowers offer more attractive economics in the form of upfront fees, spreads, and prepayment penalties. Senior secured middle market loans typically have strong defensive characteristics: these loans have priority in payment among a portfolio company’s security holders and they carry the least risk among investments in the capital structure; these investments, which are secured by the portfolio company’s assets, typically contain carefully structured covenant packages which allow lenders to take early action in situations where obligors underperform; and these characteristics can provide protection against credit deterioration. Middle market lenders like us are often able to complete more thorough due diligence investigations prior to investment than lenders in the broadly syndicated space.
Carlyle and Our Investment Adviser
Our investment activities are managed by our Investment Adviser. Our Investment Adviser is responsible for sourcing potential investments, conducting research and due diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investments and monitoring our investments on an ongoing basis.

 
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Our Investment Adviser is an affiliate of Carlyle. Carlyle is one of the world’s largest and most diversified multi-product global alternative asset management firms. Carlyle and its affiliates advise an array of specialized investment funds and other investment vehicles that invest across a range of industries, geographies, asset classes and investment strategies. Since its founding in Washington, D.C. in 1987, Carlyle has grown to become a leading global alternative asset manager with approximately $162 billion in AUM across 287 investment vehicles as of March 31, 2017.
Carlyle Global Credit is one of the largest integrated credit platforms in the industry with approximately $29 billion in AUM and more than 120 employees with multiple offices, including New York, Chicago and Los Angeles, as of March 31, 2017. Carlyle Global Credit’s investment strategies include loans and structured credit, distressed credit, private credit (through CPC) and energy credit. CPC advises four funds, including us, totaling, in the aggregate, approximately $2 billion in AUM as of March 31, 2017.
Our Investment Adviser’s seven person investment committee is responsible for reviewing and approving our investment opportunities. The members of the investment committee have experience investing through different credit cycles. The investment committee is led by Michael A. Hart, Managing Director of Carlyle, Head of CPC, Chairman of our Board of Directors and our Chief Executive Officer and also includes Jeffrey S. Levin, Managing Director of Carlyle and our President.
Our Investment Adviser also serves, and may serve in the future, as investment adviser to other current and future affiliated business development companies that have investment objectives similar to our investment objectives.
NFIC Acquisition
On May 3, 2017, we entered into a definitive agreement (the “Merger Agreement”) under which we have agreed, subject to the satisfaction of certain closing conditions, to acquire NF Investment Corp. (“NFIC”), a Maryland corporation, in a cash and stock transaction, which we refer to as the “NFIC Acquisition.” If NFIC stockholders approve the Merger Agreement, then pursuant to the Merger Agreement, at the effective time, subject to the satisfaction of specified closing conditions, NFIC will merge with and into us with us as the surviving entity in the NFIC Acquisition.
Upon the completion of the NFIC Acquisition, each share of NFIC common stock issued and outstanding immediately prior to the effective time of the NFIC Acquisition will be converted into the right to receive a mixture of cash and our shares (such shares, the “Acquisition Shares,” and together with the cash, if any, the “Merger Consideration”) from us, in accordance with the elections of NFIC stockholders. Each NFIC stockholder is permitted to elect the percentage of the Merger Consideration such stockholder wishes to receive in the form of cash (such percentage, the “Cash Election Percentage”) with respect to all shares of NFIC common stock held by such stockholder. The Cash Election Percentage elected by an NFIC stockholder shall not exceed 95%. The net asset value of the Merger Consideration (consisting of Acquisition Shares and cash, if any) that each NFIC stockholder is entitled to under the Merger Agreement will be equal to the net asset value of such NFIC stockholder’s shares of common stock in NFIC.
As of March 31, 2017, the fair value of NFIC’s investments was approximately $267.3 million in 75 portfolio companies. The following table sets forth the capitalization of NFIC and us, in each case, as of December 31, 2016, and the pro forma combined capitalization of us as if the NFIC Acquisition had occurred on that date assuming a 95% Cash Election Percentage.

 
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 	  	TCG BDC	 	  	NFIC	 	  	Adjustments	 	 	TCG BDC Pro-Forma	 	
(dollar amounts in thousands, except per share data)	 	
Net Assets	  	$	764,137	 	  	$	155,546	 	  	$	(11,927	) 	 	$	907,756	 	
Shares Outstanding	  	 	41,702,318	 	  	 	8,156,316	 	  	 	(295,424	) 	 	 	49,563,210	 	
Net Asset Value Per Share	  	$	18.32	 	  	$	19.07	 	  	 	—  	 	 	$	18.32	 	
The actual financial positions and results of operations of NFIC and us prior to the NFIC Acquisition and that of the Company following the NFIC Acquisition may be different, possibly materially, from the unaudited pro forma metrics included in this section.
These pro forma net assets adjustments amounts include an estimated $328 thousand and $65 thousand in NFIC Acquisition expenses incurred by us and NFIC, respectively, on or before the closing of the NFIC Acquisition. Unexpected delays in completing the NFIC Acquisition or in connection with the post-merger integration process may significantly increase the related costs and expenses incurred by us and NFIC. Adjustments amounts also include net change in cash, debt and equity balances due to the NFIC Acquisition. In addition, the fair values used for valuing the portfolio of NFIC are derived using consistent valuation methodology as used to calculate the fair value of our portfolio. The change in the number of shares reflects the net result of the cancellation of NFIC’s existing shares and the issuance of additional shares by us to NFIC stockholders as consideration for the NFIC Acquisition and to our stockholders for capital calls to fund the NFIC Acquisition made prior to the date of this offering.
The following table presents the type of investments as a percentage of fair value of us, NFIC and pro forma for the combined company as of December 31, 2016:

As of December 31, 2016	 	
 	  	% of Fair Value	 	
 	  	TCG BDC	 	 	NFIC	 	 	Combined
Pro-Forma	 	
Type	  	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt	  	 	80.09	% 	 	 	96.36	% 	 	 	82.82	% 	
Second Lien Debt	  	 	12.08	% 	 	 	3.64	% 	 	 	10.67	% 	
Structured Finance Obligations	  	 	0.37	% 	 	 	0.00	% 	 	 	0.30	% 	
Equity Investments	  	 	0.46	% 	 	 	0.00	% 	 	 	0.38	% 	
Investment Fund	  	 	7.00	% 	 	 	0.00	% 	 	 	5.83	% 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
The following table summarizes the Internal Risk Ratings of us, NFIC and pro forma for the combined company as of December 31, 2016:

As of December 31, 2016	  	 	 	 	 	 	 	 	 	 	 	 	
 	  	TCG BDC	 	 	NFIC	 	 	Combined Pro-Forma	 	
 	  	Fair Value	 	  	% of Fair Value	 	 	Fair Value	 	  	% of Fair Value	 	 	Fair Value	 	  	% of Fair Value	 	
(dollar amounts in millions)	  	 	 	  	 	 	 	 	 	  	 	 	 	 	 	  	 	 	
Internal Risk Rating 1	  	$	59.3	 	  	 	4.5	% 	 	$	11.9	 	  	 	4.2	% 	 	$	71.2	 	  	 	4.5	% 	
Internal Risk Rating 2	  	 	1,055.7	 	  	 	80.5	 	 	 	223.0	 	  	 	77.9	 	 	 	1,278.7	 	  	 	80.0	 	
Internal Risk Rating 3	  	 	100.9	 	  	 	7.7	 	 	 	23.2	 	  	 	8.1	 	 	 	124.1	 	  	 	7.8	 	
Internal Risk Rating 4	  	 	75.7	 	  	 	5.8	 	 	 	22.0	 	  	 	7.7	 	 	 	97.7	 	  	 	6.1	 	
Internal Risk Rating 5	  	 	12.2	 	  	 	0.9	 	 	 	3.5	 	  	 	1.2	 	 	 	15.7	 	  	 	1.0	 	
Internal Risk Rating 6	  	 	7.6	 	  	 	0.6	 	 	 	2.6	 	  	 	0.9	 	 	 	10.2	 	  	 	0.6	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	1,311.4	 	  	 	100.0	% 	 	$	286.2	 	  	 	100.0	% 	 	$	1,597.6	 	  	 	100.0	% 	

 

 
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As of December 31, 2016, the weighted average Internal Risk Rating of our and NFIC’s debt investment portfolio was 2.2 and 2.3, respectively.
As of December 31, 2016, we had (i) total assets of approximately $1.49 billion, (ii) total liabilities of approximately $0.73 billion and (iii) a net asset value per share of $18.32. Assuming the NFIC Acquisition was completed as of December 31, 2016, the combined company would have on a pro forma basis as of December 31, 2016 (i) total assets of more than $1.78 billion, (ii) total liabilities of more than $0.87 billion, and (iii) a net asset value per share of $18.32. The industrial and geographic compositions of our portfolio will not materially change as a result of the NFIC Acquisition. As of December 31, 2016, our and NFIC’s asset coverage calculated in accordance with the Investment Company Act was 209.97% and 219.26%, respectively. Assuming the NFIC Acquisition was completed as of December 31, 2016, the combined company would have on a pro forma basis weighted average yields of 7.95% and 8.01% for our first and second lien debt based on amortized cost and fair value, respectively, as of December 31, 2016. Based on fair value as of December 31, 2016, our and NFIC’s respective debt portfolios were invested in approximately 99% and 99%, respectively, of debt bearing a floating interest rate with an interest rate floor. Assuming the NFIC Acquisition was completed as of December 31, 2016, the combined company would have on a pro forma basis 99% of its debt portfolio invested in debt bearing a floating interest rate with an interest rate floor, as of December 31, 2016. The information presented in this paragraph and the immediately preceding paragraphs is provided for illustrative purposes only and does not necessarily indicate what the future assets, liabilities, net asset value or asset mix of the combined company will be following the NFIC Acquisition. Additionally, this pro forma information does not include any estimated net increase (decrease) in stockholders’ equity resulting from operations or other asset sales and repayments that are not already reflected that may occur between December 31, 2016 and the completion of the NFIC Acquisition.
The completion of the NFIC Acquisition is subject to certain conditions, including, among others, NFIC stockholder approval and other customary closing conditions. While there can be no assurances as to the exact timing, or that the NFIC Acquisition will be completed at all, we expect to complete the NFIC Acquisition in June 2017.
We cannot assure you that the NFIC Acquisition will be completed as scheduled, or at all. See “Risk Factors—Risks Related to the NFIC Acquisition” for a description of the risks that the company may face if the NFIC Acquisition is or is not completed.
Allocation of Investment Opportunities and Potential Conflicts of Interest
Our Investment Adviser’s investment team forms the exclusive Carlyle platform for U.S. middle market debt investments. The SEC has granted us exemptive relief that permits us and certain of our affiliates to co-invest in suitable negotiated investments (the “Exemptive Relief”). If Carlyle is presented with investment opportunities that generally fall within our investment objective and that of other Carlyle funds, accounts or other similar arrangements (including other affiliated business development companies) whether focused on a debt strategy or otherwise, Carlyle allocates such opportunities among us and such other Carlyle funds, accounts or other similar arrangements in a manner consistent with the Exemptive Relief, our Investment Adviser’s allocation policies and procedures and Carlyle’s other allocation policies and procedures, where applicable, as discussed below. More specifically, investment opportunities in suitable negotiated investments for investment funds, accounts and other similar arrangements managed by our Investment Adviser are allocated in accordance with the Exemptive Relief. Investment opportunities for investment funds, accounts and other similar arrangements not managed by our Investment Adviser are allocated in accordance with our Investment Adviser’s and Carlyle’s other allocation policies and procedures. Such policies and procedures may result in certain investment opportunities that are attractive to us being allocated to other funds that are not managed by our

 
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Investment Adviser. Carlyle’s, including our Investment Adviser’s, allocation policies and procedures are designed to allocate investment opportunities fairly and equitably among its clients over time, taking into account the sourcing of the transaction, the nature of the investment focus of each such other Carlyle fund, accounts or other similar arrangements, the relative amounts of capital available for investment, the nature and extent of involvement in the transaction on the part of the respective teams of investment professionals, any requirements contained in the governing agreements of the Carlyle funds, accounts or other similar arrangements and other considerations deemed relevant by Carlyle in good faith, including suitability considerations and reputational matters. The application of these considerations may cause differences in the performance of different Carlyle funds, accounts and similar arrangements that have similar strategies. For a further explanation of the allocation of opportunities and other related conflicts and risks, please see “Business—Allocation of Investment Opportunities and Potential Conflicts of Interest.”
Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle.
We are also not permitted to make any co-investments with our Investment Adviser or its affiliates (including any fund managed by Carlyle) without exemptive relief from the SEC, subject to certain exceptions, including with respect to our downstream affiliates. The SEC has granted us Exemptive Relief that permits us and certain of our affiliates to co-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Adviser’s allocation policies and procedures.
Operating and Regulatory Structure
We have elected to be treated as a BDC under the Investment Company Act. As a BDC, we are required to comply with certain regulatory requirements and are generally prohibited from acquiring assets other than qualifying assets, unless, after giving effect to any acquisition, at least 70% of our total assets are qualifying assets. Qualifying assets generally include securities of eligible portfolio companies, cash, cash equivalents, U.S. government securities and high-quality debt instruments maturing in one year or less from the time of investment. Under the rules of the Investment Company Act, “eligible portfolio companies” include (i) private U.S. operating companies, (ii) public U.S. operating companies whose securities are not listed on a national securities exchange (e.g., the New York Stock Exchange, NYSE Amex Equities and The NASDAQ Global Market) or registered under the Exchange Act and (iii) public U.S. operating companies having a market capitalization of less than $250 million.
Also, while we may borrow funds to make investments, our ability to use debt is limited in certain significant aspects. In particular, as a BDC, we must have at least 200% asset coverage calculated pursuant to the Investment Company Act in order to incur debt or issue preferred stock (which we refer to collectively as “senior securities”). In effect, we are permitted to borrow one dollar for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us, which requires us to finance our investments with at least as much equity as senior securities in the aggregate. Certain of our credit facilities also require that we maintain asset coverage of at least 200%. See “—Use of Leverage” and “Regulation.”
In addition, as a consequence of our election to be treated as a RIC for U.S. federal income tax purposes, our asset growth is dependent on our ability to raise equity capital through the issuance of common stock. RICs generally must distribute substantially all of their investment company taxable income (as defined under the Code) to stockholders as dividends in order to preserve their status as a RIC and not be subject to additional U.S.

 
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federal corporate-level taxes. This requirement, in turn, generally prevents us from using our earnings to support our operations, including making new investments. See “U.S. Federal Income Tax Considerations.”
Use of Leverage
Leverage increases the potential for gain and loss on amounts invested and, as a result, increases the risks associated with investing in our common stock. The costs associated with our borrowings, including any increase in the fees payable to our Investment Adviser, are borne by our stockholders. Any decision on our part to use borrowings depends upon our assessment of the attractiveness of available investment opportunities in relation to the costs and perceived risks of such leverage. Through the SPV, our wholly owned subsidiary, we have a $400 million senior secured revolving credit facility with various lenders (as amended, the “SPV Credit Facility”). In addition, we have a $283 million senior secured revolving credit facility with various lenders (as amended, the “Credit Facility” and, together with the SPV Credit Facility, the “Facilities”).
On June 26, 2015, through our wholly owned subsidiary, the 2015-1 Issuer, we completed a $400 million term debt securitization (the “2015-1 Debt Securitization”), of which we retained 100% of the preferred interests (the “Preferred Interests”), or approximately $126 million at closing. For more information on our debt, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources.”
Corporate Structure
We were formed in February 2012 as a Maryland corporation structured as an externally managed, non-diversified closed-end investment company. On May 2, 2013, we elected to be regulated as a BDC and commenced substantial investment operations upon the completion of our initial closing of equity capital commitments. Effective on March 15, 2017, we changed our name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.”
Implications of Being an Emerging Growth Company
We currently are, and expect to remain, an “emerging growth company,” as that term is used in the JOBS Act until the earliest of:
 
 	•	 	up to five years measured from the date of the first sale of common equity securities pursuant to an effective registration statement;	
 
 	•	 	the last day of the first fiscal year in which our annual gross revenues are $1.07 billion or more;	
 
 	•	 	the date on which we have, during the preceding three-year period, issued more than $1.0 billion in non-convertible debt; and	
 
 	•	 	the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of the common stock that is held by non-affiliates exceeds $700 million as of any June 30.	
Under the JOBS Act, we are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which would require that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. This may increase the risk that material weaknesses or other deficiencies in our internal control over financial reporting go undetected. See “Risk Factors—Risks Related to Our Business and Structure—We are obligated to maintain proper and effective internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and the value of our common stock.”

 
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In addition, Section 7(a)(2)(B) of the Securities Act and Section 13(a) of the Exchange Act, as amended by Section 102(b) of the JOBS Act, provide that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. However, pursuant to Section 107 of the JOBS Act, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
Recent Developments
On May 5, 2017 and May 25, 2017, we issued a capital call and delivered capital drawdown notices totaling approximately $39.5 million and $150.0 million, respectively (the “Capital Calls”). We expect to receive the proceeds from the Capital Calls and the related issuance of 10,258,128 shares before the consummation of this offering.
On May 26, 2017, we amended the SPV Credit Facility to, among other things, extend the maturity date to May 23, 2022. In addition, Middle Market Credit Fund SPV LLC (the “Credit Fund Sub”) amended its revolving credit facility (the “Credit Fund Sub Facility”) on May 31, 2017 to, among other things, increase the size of the facility from $450 million to $565 million and extend the maturity date to May 22, 2023. On June 5, 2017, the Credit Fund amended its revolving credit facility (the “Credit Fund Facility”) to, among other things, increase the size of the facility from $100 million to $125 million, change the interest rate to LIBOR plus 9.00% and extend the maturity date to June 24, 2018.
From April 1, 2017 through June 2, 2017, we made new investment commitments of approximately $332.1 million, of which $226.3 million were funded. Of these new investment commitments, 61.3% were first lien debt, 25.4% were second lien debt, 0.5% were equity investments and 12.8% were Credit Fund investments. Of the approximately $332.1 million of new investment commitments, all of the debt investment commitments were floating rate. The weighted average yield of debt securities funded during the period at amortized cost was 8.7%.
From April 1, 2017 through June 2, 2017, we exited or were repaid approximately $134.8 million of investments. Of the exited investments, 86.0% were first lien debt, 5.5% were second lien debt and 8.5% were Credit Fund investments. Of the approximately $134.8 million of exited investments, all were floating rate. The weighted average yield of debt and other income producing securities exited or repaid during the period at amortized cost was 10.1%.
Our Board of Directors intends to declare a distribution of $0.37 per share for the quarter ending June 30, 2017 to stockholders of record as of June 30, 2017. Shares of common stock offered pursuant to this prospectus will be entitled to receive this distribution, which is expected to be paid on or about July 24, 2017. We anticipate that this distribution will be paid from taxable income generated primarily by interest income earned on our investment portfolio.
Summary Risk Factors
Investing in us involves a high degree of risk. The following is a summary of the principal risks that you should carefully consider before investing in our common stock. In addition, see “Risk Factors” beginning on page 27 for a more detailed discussion of the principal risks as well as certain other risks you should carefully consider before deciding to invest in our common stock.

 
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 	•	 	Our operation as a BDC imposes numerous constraints on us and significantly reduces our operating flexibility. Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation.	
 
 	•	 	Capital markets may experience periods of disruption and instability. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which may in the future have a negative impact on our business and operations.	
 
 	•	 	Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively.	
 
 	•	 	We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code, which would have a material adverse effect on our financial performance.	
 
 	•	 	We are dependent upon our Investment Adviser for our future success.	
 
 	•	 	We may need to raise additional capital to grow because we must distribute most of our income.	
 
 	•	 	We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.	
 
 	•	 	We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.	
 
 	•	 	We may experience fluctuations in our quarterly results.	
 
 	•	 	There are significant potential conflicts of interest, including the management of other investment funds and accounts by our Investment Adviser, which could impact our investment returns.	
 
 	•	 	We may be obligated to pay our Investment Adviser incentive compensation even if we incur a loss.	
 
 	•	 	Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval.	
 
 	•	 	A failure in our operational systems or infrastructure, or those of third parties, as well as cyber-attacks could significantly disrupt our business or negatively affect our liquidity, financial condition or results of operations.	
 
 	•	 	Our Investment Adviser, Administrator and sub-administrators can resign upon 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.	
 
 	•	 	We may not replicate our historical performance or the historical success of Carlyle.	
 
 	•	 	Our ability to enter into transactions with Carlyle and our other affiliates is generally restricted.	
 
 	•	 	Changes in interest rates may increase our cost of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.	
 
 	•	 	Our investments are risky and speculative.	
 
 	•	 	Our portfolio securities typically do not have a readily available market price and, in such a case, we will value these securities at fair value as determined in good faith under procedures adopted by our Board of Directors, which valuation is inherently subjective and may not reflect what we may actually realize for the sale of the investment.	
 
 	•	 	Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.	

 
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 	•	 	Economic recessions or downturns could impair our portfolio companies and harm our operating results.	
 
 	•	 	Our portfolio companies may incur debt that ranks equally with, or senior to, some of our investments in such companies.	
 
 	•	 	Because we currently do not hold, and likely will not hold, controlling interests in our portfolio companies, we may not be in a position to exercise control over those portfolio companies or prevent decisions by management of those portfolio companies that could decrease the value of our investments.	
 
 	•	 	The market price of our common stock may fluctuate significantly over time.	
 
 	•	 	Investing in our common stock involves an above average degree of risk.	
 
 	•	 	Non-U.S. stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.	
 
 	•	 	We may fail to complete the NFIC Acquisition.	
Corporate Information
Our principal executive offices are located at 520 Madison Ave, 40th Floor, New York, New York 10022 and our telephone number is (212) 813-4900. We maintain a website located at www.tcgbdc.com. Information on our website is not incorporated into or a part of this prospectus.

 
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THE OFFERING

Common stock offered by us	  	9,000,000 shares (excluding 1,350,000 shares of common stock issuable pursuant to the option to purchase additional shares granted to the underwriters).	
 	 	
Common stock to be outstanding after this offering	  	60,966,283 shares (excluding 1,350,000 shares of common stock issuable pursuant to the option to purchase additional shares granted to the underwriters).	
 	 	
Use of proceeds	  	We estimate that net proceeds from this offering will be approximately $164.1 million (or approximately $188.9 million if the underwriters exercise in full their option to purchase additional shares of our common stock) based on an offering price of $19.00 per share (the mid-point of the estimated initial public offering price range as set forth on the cover of this prospectus).
 
We expect to use the proceeds from the closing of this offering to repay a portion of our outstanding debt under our Facilities. See also “Use of Proceeds.”	
 	 	
Investment Adviser payment of sales load and offering expenses	  	Our Investment Adviser has agreed to pay 50% of the sales load and offering expenses in connection with this offering.	
 	 	
Listing	  	We have applied to list our common stock on NASDAQ Global Select Market under the symbol “CGBD”.	
 	 	
Distributions	  	To the extent we have taxable income, we intend to continue to pay quarterly distributions to our stockholders out of assets legally available for distribution. Future quarterly distributions, if any, will be determined by our Board of Directors. All future distributions will be subject to lawfully available funds therefor, and no assurance can be given that we will be able to declare such distributions in future periods.
 
Our Board of Directors intends to declare a distribution of $0.37 per share for the quarter ending June 30, 2017 to stockholders of record as of June 30, 2017. Shares of common stock offered pursuant to this prospectus will be entitled to receive this distribution, which is expected to be paid on or about July 24, 2017. We anticipate that this distribution will be paid from taxable income generated primarily by interest income earned on our investment portfolio.	

 
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Tax status	  	We are a BDC under the Investment Company Act. We have elected to be treated as a RIC under Subchapter M of the Code commencing with our taxable year ended December 31, 2013, and intend to continue to elect to be so treated annually. As a RIC, we generally will not pay corporate-level U.S. federal	
 	  	income taxes on any net ordinary income or capital gains that we timely distribute to our stockholders as dividends. To maintain our RIC status, we must meet specified source-of-income and asset diversification requirements and timely distribute to our stockholders at least 90% of our “investment company taxable income” as defined by the Code, which generally includes net ordinary income and net short-term capital gains in excess of net long-term capital losses, for each taxable year. See “Distributions” and “U.S. Federal Income Tax Considerations.”
 
We intend to timely distribute to our stockholders substantially all of our annual taxable income for each year, except that we may retain certain net capital gains for reinvestment and, depending upon the level of taxable income earned in a year, we may choose to carry forward taxable income for distribution in the following year and pay any applicable U.S. federal excise tax. The distributions we pay to our stockholders in a year may exceed our taxable income for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes. The specific tax characteristics of our distributions will be reported to stockholders after the end of the calendar year. See “Distributions.”	
 	 	
Dividend Reinvestment Plan	  	Effective on July 5, 2017, we will convert our current “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan for our stockholders. Under the new plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution, our stockholders who have not “opted out” of our dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of our common stock, rather than receiving cash. After this offering, we intend to use primarily newly issued shares of our common stock to implement the plan so long as the market value per share is equal to or greater than the NAV per share as of the close of business on the relevant payment date for such dividend or	

 
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 	  	distribution. If the market value per share is less than the NAV per share as of the close of business as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise.	

Stockholders who receive dividends and distributions in the form of stock are generally subject to the same U.S. federal, state and local tax consequences as are stockholders who receive their dividends and distributions in cash. However, since their cash dividends and distributions will be reinvested in our common stock, such stockholder will not receive cash with which to pay applicable taxes on reinvested dividends and distributions. See “Dividend Reinvestment Plan.”
 
If a stockholder elects to “opt out,” that stockholder will receive cash distributions.	
Investment Advisory Fees	  	We pay our Investment Adviser a fee for its services under an investment advisory agreement (the “Investment Advisory Agreement”) consisting of two components—a base management fee and an incentive fee. The base management fee is calculated at an annual rate of 1.50% based on the average value of our gross assets (adjusted for share issuances or repurchases, excluding cash but including assets acquired with leverage) at the end of the two most recently completed fiscal quarters, except for the first quarter following this offering, in which case the base management fee will be calculated based on our gross assets as of the end of such fiscal quarter. The base management fee is payable quarterly in arrears. Prior to this offering, our Investment Adviser waived its right to receive one-third (0.50%) of the 1.50% base management fee. The fee waiver was scheduled to terminate upon consummation of this offering. However, our Investment Adviser has agreed to continue the fee waiver until the completion of the first full quarter after the consummation of this offering. As a result, at the start of the second full quarter after the completion of this offering, the base management fee will return to an annual rate of 1.50% of our gross assets, and will be effectively higher than the base management fee prior to the completion of this offering.	
 	 	
 	  	The incentive fee consists of two parts: one based on pre-incentive fee net investment income and one based on capital gains.	

 
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Incentive Fee on Pre-Incentive Fee Net Investment Income
 
We pay our Investment Adviser an incentive fee quarterly in arrears with respect to our pre-incentive fee net investment income in each calendar quarter as follows (for purposes of comparing our pre-incentive fee net investment income to a “hurdle rate” of 1.50% or a “catch-up rate” of 1.875%, as applicable, our pre-incentive fee net investment income is expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter):
 
•    no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;
 
•    100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net
investment income, if any that exceeds the hurdle rate but is less than 1.875% in any calendar quarter (7.50% annualized). We refer to this portion of our pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.875%) as the “catch-up.” The “catch-up” is meant to provide our Investment Adviser with approximately 20% of our pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.875% in any calendar quarter; and
 
•    20% of the amount of our pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) is payable to our Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to our Investment Adviser.	
 	 	
 	  	Incentive Fee on Capital Gains
 
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory	

 
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 	  	Agreement, as of the termination date), and equals 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees.	
 	 	
 	  	We will defer payment of the incentive fee if, for the preceding four calendar quarters ending on or prior to	
 	 	 	
 	  	the date such payment is to be made, the sum of the aggregate distributions to our stockholders and the change in our net assets is less than 6% of our net assets at the beginning of such period. These calculations are adjusted for any share issuances or repurchases. Any deferred incentive fees will be carried over for payment in subsequent calculation periods when such test is met.
 
In order to align the interests of our Investment Adviser’s investment professionals with our investors, our Investment Adviser pays a portion of the incentive fees that it receives from us to our Investment Adviser’s investment committee and
certain investment team members, which may represent a significant component of such individual’s compensation.
 
Our Investment Adviser has agreed to waive 2.5% of our incentive fee and to charge 17.5% instead of 20% with respect to the entire calculation of its incentive fee beginning on the first full quarter following the consummation of this offering until the earlier of (i) October 1, 2017 and (ii) the date that our stockholders vote on the approval of a proposed amendment to our Investment Advisory Agreement described below (the “Proposed Amendment”). The Proposed Amendment would amend the Investment Advisory Agreement to make certain changes, including (i) reducing the 20% incentive fee based on pre-incentive fee net investment income and capital gains to 17.5% and (ii) deleting the deferral provision related to our incentive fee described in the immediately preceding paragraph.	
 	 	
 	  	If our stockholders do not approve the Proposed Amendment, the deferral provision will remain in the Investment Advisory Agreement and the incentive fee will again be calculated based on 20% (and not 17.5%) beginning as of the end of the period described above.	

 
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 	  	See “Fees and Expenses” and “Management—Investment Management Agreement.”	
 	 	
Administration Agreement	  	We reimburse our Administrator for its costs and expenses and our allocable portion of overhead incurred by our Administrator in performing its obligations under an administration agreement (the “Administration Agreement”). In addition, our Administrator has entered into sub-administration agreements with certain affiliates (the “Carlyle Sub-Administration Agreements”) to have access to	
 	  	personnel. Our Administrator has also entered into a sub-administration agreement with State Street Bank and Trust Company (the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreements, the “Sub-Administration Agreements”) for certain administrative and professional services.
 
See “Fees and Expenses,” “Management—Administration Agreement” and “—Sub-Administration Agreements.”	
Leverage	  	From time to time, we may borrow funds to make additional investments. This is known as “leverage” and could increase or decrease returns to our stockholders. The use of leverage involves significant risks. As a BDC, with certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage ratio, as defined in the Investment Company Act, equals at least 200% immediately after each time we incur indebtedness. The amount of leverage that we employ will depend on our Investment Adviser’s and our Board of Directors’ assessment of market conditions and other factors at the time of any proposed borrowing. The costs associated with our borrowings, including any increase in the fees payable to our Investment Adviser, are borne by our stockholders.	
 	 	
Trading at a discount	  	Shares of closed-end investment companies that are listed on an exchange, including BDCs, frequently trade at a discount to their NAV per share. We are not generally able to issue and sell our common stock at a price below our NAV per share unless, among other things, the requisite stockholders approve such a sale. The risk that our shares may trade at a	
 	  	discount to our NAV per share is separate and distinct from the risk that our NAV per share may decline. We cannot predict whether our shares will trade above, at or below NAV per share. See “Risk	

 
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 	  	Factors—Risks Related to this Offering and our Common Stock—Prior to this Offering, there has been no public market for our common stock, and we cannot assure you that the market price of our shares will not decline following the offering . ”	
 	 	
Investment Adviser	  	We are externally managed by our Investment Adviser, CGMSIM, an investment adviser that is registered with the SEC under the Advisers Act. CGMSIM is a wholly owned subsidiary of Carlyle, a global alternative asset manager with approximately	
 	  	$162 billion of AUM as of March 31, 2017. See “Management—Our Investment Adviser.”	
 	 	
Administrator	  	CGMSFA, a wholly owned subsidiary of Carlyle, serves as our administrator. See “Management—Our Administrator.”	
 	 	
Custodian, transfer agent and dividend disbursing agent	  	State Street Bank and Trust Company (“State Street”) serves as our custodian. State Street also serves as our transfer and distribution payment agent and registrar. See “Custodian, Transfer and Dividend Paying Agent and Registrar.”	
 	 	
Risk factors	  	See “Risk Factors” and the other information in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.	
 	 	
Available information	  	We have filed with the SEC a registration statement on Form N-2, of which this prospectus is a part, under the Securities Act. The registration statement contains additional information about us and the shares of our common stock being offered by this prospectus. We are also required to file annual, quarterly and current reports, proxy statements and other information with the SEC. This information is available at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549 and on the SEC’s website at http://www.sec.gov. Information on the operation of the SEC’s public reference room -	
 	  	may be obtained by calling the SEC at (202) 551-8090 or (800) SEC-0330.	
 	 	
 	  	We maintain a website (www.tcgbdc.com) and intend to make all of our periodic and current reports, proxy statements and other information available, free of charge, on or through our website. The information on our website is not incorporated by reference in this prospectus. You may also obtain such information by contacting us in writing at: 520 Madison Ave, 40th Floor, New York, New York 10022, or by telephone (collect) at (212) 813-4900.	

 
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FEES AND EXPENSES
The following table is intended to assist you in understanding the costs and expenses that an investor in our common stock will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and may vary. The following table should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. The expenses shown in the table under “estimated annual expenses” are based on estimated amounts for our current fiscal year and assume that we issue 9,000,000 shares of common stock in the offering, based on an offering price equal to the mid-point of the estimated initial public offering price range as set forth on the cover of this prospectus. Except where the context suggests otherwise, whenever this prospectus contains a reference to fees or expenses paid by “us,” the “Company” or says that “we” will pay fees or expenses, stockholders will indirectly bear these fees or expenses as our investors.

Stockholder transaction expenses (as a percentage of offering price):	  	 	 	 	
Sales load	  	 	6.00	%(1) 	
Sales load paid by Investment Adviser	  	 	(3.00	)%(2) 	
Offering expenses	  	 	2.10	%(3) 	
Offering expenses paid by Investment Adviser	  	 	(1.05	)%(4) 	
Dividend reinvestment plan expenses	  	 	0.00	%(5) 	
Total stockholder transaction expenses	  	 	4.05	% 	
 	 	
Estimated annual expenses (as a percentage of net assets attributable to common stock):  (6)	  	 	 	 	
Base management fee payable under the Investment Advisory Agreement	  	 	2.72	%(7) 	
Incentive fee payable under the Investment Advisory Agreement (20.0% of pre-incentive fee net investment income and capital gains)	  	 	2.36	%(8) 	
Interest payments on borrowed funds	  	 	2.67	%(9) 	
Other expenses	  	 	0.94	%(10)(12) 	
Acquired fund fees and expenses	  	 	1.54	%(11) 	
Total annual expenses	  	 	10.23	%(12) 	
 
(1)	The sales load (underwriting discount and commission) with respect to shares of common stock sold in this offering, which is a one-time fee paid to the underwriters, is the only sales load paid in connection with this offering.	
 
(2)	Our Investment Adviser has agreed to pay 50% of the sales load in connection with this offering. We are not obligated to repay the sales load paid by our Investment Adviser.	
 
(3)	Amount reflects estimated total offering expenses of approximately $3.6 million.	
 
(4)	Our Investment Adviser has agreed to pay 50% of the total offering expenses in connection with this offering. We are not obligated to repay the expenses paid by our Investment Adviser.	
 
(5)	The expenses of the dividend reinvestment plan are included in “Other expenses” in the table above. For additional information, see “Dividend Reinvestment Plan.”	
 
(6)	The net assets attributable to common stock used to calculate the percentages in this table reflect our net assets of $763.3 million as of March 31, 2017.	
 
(7)	The base management fee under the Investment Advisory Agreement is calculated at an annual rate of 1.50% based on the average value of our gross assets (adjusted for share issuances or repurchases, excluding cash but including assets acquired with leverage) at the end of the two most recently completed fiscal quarters, except for the first quarter following this offering, in which case the base management fee will be	

 
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 	calculated based on our gross assets as of the end of such fiscal quarter. For purposes of the table above, the percentage reflected is calculated based on our average net assets (rather than our average gross assets) for the same period. The base management fee is payable quarterly in arrears and does not give effect to the waiver we are providing. See “Management—Investment Advisory Agreement.”	
 
(8)	We may have capital gains and net investment income that could result in the payment of an incentive fee to the Investment Adviser in the twelve months after completion of this offering. The incentive fee payable in the example below is estimated based on annualizing our actual results for the three months ended March 31, 2017 as if they had occurred following this offering, and assumes that the incentive fee is 20% for all relevant periods. However, the incentive fee payable to the Investment Adviser is based on our performance and will not be paid unless we achieve certain goals.	
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement) in an amount equal to 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. See “Management—Investment Advisory Agreement.” The incentive fee does not give effect to the Proposed Amendment. See “Management—Investment Advisory Agreement—Incentive Fee.”
 
(9)	Interest payments on borrowed funds is estimated based on annualizing our interest expense for the three month period ended March 31, 2017 under our secured borrowings and 2015-1 Notes excluding fees (such as fees on undrawn amounts and amortization of upfront fees). This estimated item is based on the assumption that our borrowings and interest costs after an offering will remain similar to those prior to such offering. We may borrow additional funds from time to time to make investments to the extent we determine that the economic situation is conducive to doing so. Our stockholders indirectly bear the costs of borrowings under any debt instruments we may enter into.	
 
(10)	Includes our estimated overhead expenses, such as payments under the Administration Agreement for certain expenses incurred by the Investment Adviser. See “Certain Relationships and Related Party Transactions—Administration Agreement” and “—Sub-Administration Agreements.” The expenses in this table are based on our actual other expenses for the three month period ended March 31, 2017.	
 
(11)	Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles in which we invest that (1) are investment companies or (2) would be investment companies under Section 3(a) of the Investment Company Act but for the exceptions to that definition provided for in Sections 3(c)(1) and 3(c)(7) of the Investment Company Act. This amount includes the estimated annual fees and expenses of Credit Fund, which was our only acquired fund as of March 31, 2017.	
 
(12)	Estimated.	

 
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Example
The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no additional leverage and that our annual operating expenses would remain at the levels set forth in the table above. The incentive fee payable in the example below assumes that the incentive fee is 20% for all relevant periods. Transaction expenses are included in the following example.

 	  	1 year	 	  	3 years	 	  	5 years	 	  	10 years	 	
You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return (none of which is subject to the incentive fee based on capital gains)  (1)	  	$	119	 	  	$	277	 	  	$	434	 	  	$	828	 	
You would pay the following expenses on a $1,000 common stock investment, assuming a 5% annual return resulting entirely from net realized capital gains (all of which is subject to the incentive fee based on capital gains)  (2)	  	$	129	 	  	$	307	 	  	$	484	 	  	$	928	 	
 
(1)	Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation.	
 
(2)	Assumes no unrealized capital depreciation and a 5% annual return resulting entirely from net realized capital gains and not otherwise deferrable under the terms of the Investment Advisory Agreement and therefore subject to the incentive fee based on capital gains. Because our investment strategy involves investments that generate primarily current income, we believe that a 5% annual return resulting entirely from net realized capital gains is unlikely.	
The foregoing table is to assist you in understanding the various costs and expenses that an investor in our common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. Because the income portion of the incentive fee under the Investment Advisory Agreement is unlikely to be significant assuming a 5% annual return, the second example assumes that the 5% annual return will be generated entirely through net realized capital gains and, as a result, will trigger the payment of the capital gains portion of the incentive fee under the Investment Advisory Agreement. The income portion of the incentive fee under the Investment Advisory Agreement, which, assuming a 5% annual return, would either not be payable or have an immaterial impact on the expense amounts shown above, is not included in the example. If we achieve sufficient returns on our investments, including through net realized capital gains, to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, under certain circumstances, reinvestment of dividends and other distributions under our dividend reinvestment plan may occur at a price per share that differs from net asset value. See “Dividend Reinvestment Plan” for additional information regarding our dividend reinvestment plan.
This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown.

 
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SELECTED FINANCIAL AND OTHER INFORMATION
The tables below set forth our selected consolidated historical financial data for the periods indicated. The selected consolidated historical financial data as of and for the years ended December 31, 2016, 2015 and 2014, have been derived from our audited consolidated financial statements, which are included in “Financial Statements and Supplementary Data” of this prospectus. Interim financial information for the three months ended March 31, 2017 and 2016 has been derived from our unaudited interim financial statements, which are included in “ Financial Statements and Supplementary Data ” of this prospectus. Our unaudited interim financial statements were prepared on a basis consistent with our audited financial statements and, in our opinion, include all adjustments necessary for the fair statement of the results for the periods represented. Our historical results are not necessarily indicative of future results. The selected financial data in this section is not intended to replace the financial statements and is qualified in its entirety by the financial statements and related notes included in this prospectus.
The selected consolidated financial information and other data presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes thereto.

 	  	For the three month
periods ended
March 31,	 	 	For the years ended	 	 	
 	  	 	 	 	December 31,	 	 	 	 	 	 	 	 	
 	  	2017	 	 	2016	 	 	2016	 	 	2015	 	 	2014	 	 	 	 	 	 	 	 	
(dollar amounts in thousands, except per share data)	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Statements of Operations Data	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investment income	  	$	34,099	 	 	$	23,110	 	 	$	110,971	 	 	$	69,190	 	 	$	32,984	 	 	 	 	 	 	 	 	
Expenses	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net expenses	  	 	14,992	 	 	 	11,150	 	 	 	51,350	 	 	 	33,666	 	 	 	18,724	 	 	 	 	 	 	 	 	
Net investment income (loss)	  	 	19,107	 	 	 	11,960	 	 	 	59,621	 	 	 	35,524	 	 	 	14,260	 	 	 	 	 	 	 	 	
Net realized gain (loss) on investments—non-controlled/non-affiliated	  	 	(7,694	) 	 	 	(3,577	) 	 	 	(9,644	) 	 	 	1,164	 	 	 	72	 	 	 	 	 	 	 	 	
Net change in unrealized appreciation (depreciation) on investments—non-controlled/non-affiliated	  	 	4,456	 	 	 	(11,091	) 	 	 	17,560	 	 	 	(18,015	) 	 	 	(8,718	) 	 	 	 	 	 	 	 	
Net change in unrealized appreciation (depreciation) on investments—controlled/affiliated	  	 	304	 	 	 	—  	 	 	 	2,272	 	 	 	—  	 	 	 	—  	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	 	16,173	 	 	 	(2,708	) 	 	 	69,809	 	 	 	18,673	 	 	 	5,614	 	 	 	 	 	 	 	 	
Per Share Data	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted net investment income	  	$	0.46	 	 	$	0.37	 	 	$	1.65	 	 	$	1.43	 	 	$	1.09	 	 	 	 	 	 	 	 	
Basic and diluted earnings	  	$	0.39	 	 	$	(0.08	) 	 	$	1.93	 	 	$	0.75	 	 	$	0.43	 	 	 	 	 	 	 	 	
Dividends declared (1)	  	$	0.41	 	 	$	0.40	 	 	$	1.68	 	 	$	1.74	 	 	$	1.25	 	 	 	 	 	 	 	 	
 
(1)	Cumulative per share dividends declared by the Company’s Board of Directors for the three month periods ended March 31, 2017 and 2016, and years ended December 31, 2016, 2015 and 2014. Cumulative per share dividends declared by the Company’s Board of Directors for the years ended December 31, 2016 and 2015 included a special dividend of $0.07 and $0.18 per share, respectively.	

 
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 	  	As of and for
the three
month period
ended	 	 	As of and for the years ended	 	
 	  	March 31,	 	 	December 31,	 	
 	  	2017	 	 	2016	 	 	2015	 	 	2014	 	
(dollar amounts in thousands, except per share data)	  	 	 	 	 	 	 	 	 	
Consolidated Statements of Assets and Liabilities Data	  	 	 	 	 	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated, at fair value	  	$	1,258,424	 	 	$	1,323,102	 	 	$	1,052,666	 	 	$	698,662	 	
Investments—controlled/affiliated, at fair value	  	 	134,121	 	 	 	99,657	 	 	 	—  	 	 	 	—  	 	
Cash and cash equivalents	  	 	44,874	 	 	 	38,489	 	 	 	41,837	 	 	 	8,754	 	
Total assets	  	 	1,458,993	 	 	 	1,490,155	 	 	 	1,104,032	 	 	 	716,720	 	
Secured borrowings	  	 	390,608	 	 	 	421,885	 	 	 	234,313	 	 	 	308,441	 	
2015-1 Notes payable	  	 	270,900	 	 	 	270,849	 	 	 	270,644	 	 	 	—  	 	
Total liabilities	  	 	695,675	 	 	 	726,018	 	 	 	532,306	 	 	 	378,463	 	
Total net assets	  	 	763,318	 	 	 	764,137	 	 	 	571,726	 	 	 	338,257	 	
Net assets per share	  	$	18.30	 	 	$	18.32	 	 	$	18.14	 	 	$	18.86	 	
 	 	 	 	 	
Other Data:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Number of portfolio companies/structured finance obligations/investment funds at period/year end	  	 	82	 	 	 	86	 	 	 	85	 	 	 	72	 	
Average funded investments in new portfolio companies/structured finance obligations  (1)	  	 	9,085	 	 	 	12,188	 	 	 	12,996	 	 	 	10,597	 	
Total return based on net asset value (2) (3)	  	 	2.14	% 	 	 	10.25	% 	 	 	5.41	% 	 	 	3.55	% 	
 
(1)	Average is calculated per portfolio company based on the total amount funded during the period divided by the number of portfolio companies invested/structured finance obligations made during the period.	
 
(2)	Total return is based on the change in net asset value per share during the period/year plus the declared dividends, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year. For the three months ended March 31, 2017, the total return based on net asset value equaled the change in net asset value per share during the period plus the declared and payable dividends of $0.41 per share for the three months ended March 31, 2017, divided by the beginning net asset value for the period. Total return for the years ended December 31, 2016, 2015 and 2014 was inclusive of $0.01, $0.11 and $0.09, respectively, per share increase in net asset value related to the offering price of subscriptions for the Company’s common stock. Excluding the effects of the higher offering price of the Company’s common stock, total return would have been 2.14%, 10.20%, 4.83% and 3.09%, for the three month period ended March 31, 2017 and the years ended December 31, 2016, 2015 and 2014, respectively.	
 
(3)	Percentages do not reflect the expiration of the fee waiver that will occur after the completion of this offering. Prior to this offering, our Investment Adviser waived its right to receive one-third (0.50%) of the 1.50% base management fee. The fee waiver was scheduled to terminate upon consummation of this offering. However, our Investment Adviser has agreed to continue the fee waiver until the completion of the first full quarter after the consummation of this offering. As a result, at the start of the second full quarter after the completion of this offering, the base management fee will return to an annual rate of 1.50% of our gross assets, and will be effectively higher than the base management fee prior to the completion of this offering.	

 
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RISK FACTORS
Potential investors should be aware that an investment in the Company involves a high degree of risk. There can be no assurance that the Company’s investment objective will be achieved or that an investor will receive a return of its capital. In addition, there will be occasions when the Investment Adviser and its affiliates may encounter potential conflicts of interest in connection with the Company. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. The following considerations, in addition to the considerations set forth elsewhere herein, should be carefully evaluated before making an investment in the Company. If any of the following events occur, our business, financial condition and operating result could be materially and adversely affected. In such case, our net asset value and the trading price of our securities could decline, and you may lose all or part of your investment.
Risks Related to Our Business and Structure
Capital markets may experience periods of disruption and instability. These market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which may in the future have a negative impact on our business and operations.
From time to time, capital markets may experience periods of disruption and instability. During such periods of market disruption and instability, we and other companies in the financial services sector may have limited access, if available, to alternative markets for debt and equity capital. Equity capital may be difficult to raise because, subject to some limited exceptions which will apply to us as a BDC, we will generally not be able to issue additional shares of our common stock at a price less than net asset value without first obtaining approval for such issuance from our stockholders and our independent directors. In addition, our ability to incur indebtedness (including by issuing preferred stock) is limited by applicable regulations such that our asset coverage, as defined in the Investment Company Act, must equal at least 200% immediately after each time we incur indebtedness. The debt capital that will be available, if at all, may be at a higher cost and on less favorable terms and conditions in the future. Any inability to raise capital could have a negative effect on our business, financial condition and results of operations.
Given the extreme volatility and dislocation in the capital markets over the past several years, many BDCs have faced, and may in the future face, a challenging environment in which to raise or access capital. In addition, significant changes in the capital markets, including the extreme volatility and disruption over the past several years, has had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving these investments. While most of our investments are not publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). As a result, volatility in the capital markets can adversely affect our investment valuations. Further, the illiquidity of our investments may make it difficult for us to sell such investments if required and to value such investments. As a result, we may realize significantly less than the value at which we will have recorded our investments. An inability to raise capital, and any required sale of our investments for liquidity purposes, could have a material adverse impact on our business, financial condition or results of operations.
Economic recessions or downturns could impair our portfolio companies and harm our operating results.
Many of the portfolio companies in which we make investments may be susceptible to economic slowdowns or recessions and may be unable to repay the loans we made to them during these periods. Therefore, our non-performing assets may increase and the value of our portfolio may decrease during these periods as we are required to record our investments at their current fair value. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets.
 
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Unfavorable economic conditions also could increase our and our portfolio companies’ funding costs, limit our and our portfolio companies’ access to the capital markets or result in a decision by lenders not to extend credit to us or our portfolio companies. These events could prevent us from increasing investments and harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which we will actually provide significant managerial assistance to that portfolio company, a bankruptcy court might subordinate all or a portion of our claim to that of other creditors.
We are dependent upon our Investment Adviser for our future success.
We do not have any employees. We depend on the diligence, skill and network of business contacts of our Investment Adviser’s investment professionals and CPC to source appropriate investments for us. We depend on members of our Investment Adviser’s investment team to appropriately analyze our investments and our Investment Adviser’s investment committee to approve and monitor our middle market portfolio investments. Our Investment Adviser’s investment committee, together with the other members of its investment team, evaluate, negotiate, structure, close and monitor our investments. Our future success will depend on the continued availability of the members of our Investment Adviser’s investment committee and the other investment professionals available to our Investment Adviser. Neither we nor our Investment Adviser has employment agreements with these individuals or other key personnel, and we cannot provide any assurance that unforeseen business, medical, personal or other circumstances would not lead any such individual to terminate his or her relationship with us. The loss of Mr. Hart, or any of the other senior investment professionals to which our Investment Adviser has access, could have a material adverse effect on our ability to achieve our investment objective as well as on our financial condition and results of operations. In addition, we cannot assure you that CGMSIM will remain our investment adviser or that we will continue to have access to Carlyle’s investment professionals or its information and deal flow. Further, the can be no assurance that CGMSIM will replicate its own or Carlyle’s historical success, and we caution you that our investment returns could be substantially lower than the returns achieved by other Carlyle-managed funds.
Our financial condition, results of operations and ability to achieve our investment objective depend on our ability to source investments, access financing and manage future growth effectively.
Our ability to achieve our investment objective and to grow depends on our ability to acquire suitable investments and monitor and administer those investments, which depends, in turn, on our Investment Adviser’s ability to identify, invest in and monitor companies that meet our investment criteria.
Accomplishing this result on a cost-effective basis is largely a function of our Investment Adviser’s structuring of the investment process, its ability to provide competent, attentive and efficient services to us and its ability to access financing for us on acceptable terms. Our Investment Adviser’s investment team has substantial responsibilities under the Investment Advisory Agreement, has substantial responsibilities in connection with managing us and certain other investment funds and accounts advised by our Investment Adviser, and may also be called upon to provide managerial assistance to our portfolio companies. These demands on their time, which will increase as the number of investments grow, may distract them or slow the rate of investment. In order for us to grow, Carlyle will need to hire, train, supervise, manage and retain new employees. However, we can offer no assurance that any such investment professionals will contribute effectively to the work of our Investment Adviser. Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.
 
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We may need to raise additional capital to grow because we must distribute most of our income.
We may need additional capital to fund growth in our investments, and a reduction in the availability of new capital could limit our ability to grow. We have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. To maintain our status as a RIC, among other requirements, we must distribute on a timely basis at least 90% of our investment company taxable income to our stockholders to maintain our RIC status. As a result, any such cash earnings may not be available to fund investment originations or repay maturing debt. We have borrowed under the Facilities and through the issuance of the 2015-1 Notes and in the future may borrow under additional debt facilities from financial institutions. We must continue to issue additional debt and equity securities to fund our growth. If we fail to obtain funds from such sources or from other sources to fund our investments, it could limit our ability to grow, which may have an adverse effect on the value of our securities. We may pursue growth through acquisitions or strategic investments in new businesses. Completion and timing of any such acquisitions or strategic investments may be subject to a number of contingencies and risks. There can be no assurance that the integration of an acquired business will be successful or that an acquired business will prove to be profitable or sustainable.
In addition, as a BDC, our ability to borrow or issue preferred stock may be restricted if our total assets are less than 200% of our total borrowings and preferred stock. Furthermore, equity capital may be difficult to raise because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price per share less than NAV without first obtaining approval for such issuance from our stockholders and our Independent Directors.
Any failure on our part to maintain our status as a BDC or RIC would reduce our operating flexibility, may hinder our achievement of our investment objective, may limit our investment choices and may subject us to greater regulation.
The Investment Company Act imposes numerous constraints on the operations of BDCs and RICs that do not apply to other types of investment vehicles. For example, under the Investment Company Act, we are required as a BDC to invest at least 70% of their total assets in specified types of “qualifying assets,” primarily in private U.S. companies or thinly-traded U.S. public companies, cash, cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. In addition, in order to continue to qualify as a RIC for U.S. federal income tax purposes, we are required to satisfy certain source-of-income, diversification and distribution requirements. These constraints, among others, may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective. See “U.S. Federal Income Tax Considerations.”
Furthermore, any failure to comply with the requirements imposed on us as a BDC by the Investment Company Act could cause the SEC to bring an enforcement action against us and/or expose us to claims of private litigants. In addition, upon approval of a majority of our outstanding voting securities as required by the Investment Company Act, we may elect to withdraw our status as a BDC. If we decide to withdraw our election, or if we otherwise fail to qualify, or maintain our qualification, as a BDC, we might be regulated as a closed-end investment company that is required to register under the Investment Company Act, which would subject us to additional regulatory restrictions, significantly decrease our operating flexibility and could significantly increase our cost of doing business. In addition, any such failure could cause an event of default under our outstanding indebtedness, which could have a material adverse effect on our business, financial condition or results of operations.
Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.
We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the
 
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Investment Company Act. In addition, we may seek to securitize certain of our loans. Under the provisions of the Investment Company Act, we are permitted, as a BDC, to issue senior securities only in amounts such that our asset coverage ratio, as defined in the Investment Company Act, equals at least 200% of total assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test, which may prohibit us from paying dividends and could prevent us from maintaining our status as a RIC or may prohibit us from repurchasing shares of our common stock. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. Accordingly, any failure to satisfy this test could have a material adverse effect on our business, financial condition or results of operations. As of March 31, 2017, our asset coverage calculated in accordance with the Investment Company Act was 215.03%. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders. Furthermore, as a result of issuing senior securities, our common stockholders would also be exposed to typical risks associated with increased leverage, including an increased risk of loss resulting from increased indebtedness.
If we issue preferred stock, the preferred stock would rank “senior” to common stock in our capital structure, preferred stockholders would have separate voting rights on certain matters and might have other rights, preferences, or privileges more favorable than those of our common stockholders, and the issuance of preferred stock could have the effect of delaying, deferring or preventing a transaction or a change of control that might involve a premium price for holders of our common stock or otherwise be in their best interest.
We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value per share of our common stock if our Board of Directors determines that such sale is in the best interests of us and our stockholders and our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board of Directors, closely approximates the market value of such securities (less any distributing commission or discount). If we raise additional funds by issuing more common stock, including in connection with this offering, or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease, and holders of our common stock might experience dilution.
We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.
As part of our business strategy, we, including through our wholly owned subsidiaries, borrow from and may in the future issue additional senior debt securities to banks, insurance companies and other lenders. Holders of these loans or senior securities would have fixed-dollar claims on our assets that are superior to the claims of our stockholders. If the value of our assets decreases, leverage will cause our net asset value to decline more sharply than it otherwise would have without leverage. Similarly, any decrease in our income would cause our net income to decline more sharply than it would have if we had not borrowed. This decline could negatively affect our ability to make dividend payments on our common stock.
Our ability to service our borrowings depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. In addition, our management fees are payable based on our gross assets, including assets acquired through the use of leverage (but excluding cash and any temporary investments in cash-equivalents), which may give our Investment Adviser an incentive to use leverage to make additional investments. See  “ —We may be obligated to pay our Investment Adviser even if we incur a loss .”  The amount of leverage that we employ will depend on our Investment Adviser’s and our Board of Directors’ assessment of market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to obtain credit at all or on terms acceptable to us.
 
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In addition to having fixed-dollar claims on our assets that superior to the claims of our common stockholders, obligations to lenders may be secured by a first priority security interest in our portfolio of investments and cash. In the case of a liquidation event, those lenders would receive proceeds to the extent of their security interest before any distributions are made to our stockholders. In addition, as the holder of the Preferred Interests of the 2015-1 Issuer (i.e., the subordinated class of the 2015-1 Securitization), we may be required to absorb losses with respect to the 2015-1 Debt Securitization.
Our Facilities and 2015-1 Notes impose financial and operating covenants that restrict our business activities, remedies on default and similar matters. As of March 31, 2017, we were in material compliance with the operating and financial covenants of our Facilities and 2015-1 Notes. However, our continued compliance with these covenants depends on many factors, some of which are beyond our control. Accordingly, although we believe we will continue to be in compliance, we cannot assure you that we will continue to comply with the covenants in our Facilities and 2015-1 Notes. Failure to comply with these covenants could result in a default. If we were unable to obtain a waiver of a default from the lenders or holders of that indebtedness, as applicable, those lenders or holders could accelerate repayment under that indebtedness, which may result in cross-acceleration of other indebtedness. An acceleration could have a material adverse impact on our business, financial condition and results of operations. Lastly, we may be unable to obtain additional leverage, which would, in turn, affect our return on capital.
As of March 31, 2017, we had a combined $663.6 million of outstanding consolidated indebtedness under our Facilities and 2015-1 Notes. Our annualized interest cost as of March 31, 2017, was 3.09%, excluding fees (such as fees on undrawn amounts and amortization of upfront fees). Since we generally pay interest at a floating rate on our Facilities and 2015-1 Notes, an increase in interest rates will generally increase our borrowing costs.
The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns on our portfolio, net of expenses. The calculations in the table below are hypothetical, and actual returns may be higher or lower than those appearing in the table below.

 	  	Assumed Return on Our
Portfolio
(Net of Expenses)	 	
 	  	 	(10	)% 	 	 	(5	)% 	 	 	0	% 	 	 	5	% 	 	 	10	% 	
Corresponding return to common stockholder (1)	  	 	(21.80	)% 	 	 	(12.24	)% 	 	 	(2.68	)% 	 	 	6.87	% 	 	 	16.43	% 	
 
(1)	Assumes, as of March 31, 2017, (i) $1,459.0 million in total assets, (ii) $663.6 million in outstanding indebtedness, (iii) $763.3 million in net assets and (iv) weighted average interest rate, excluding fees (such as fees on undrawn amounts and amortization of financing costs), of 3.09%.	
Based on an outstanding indebtedness of $663.6 million as of March 31, 2017, and the weighted average effective annual interest rate, excluding fees (such as fees on undrawn amounts and amortization of financing costs), of 3.09% as of that date, our investment portfolio at fair value would have had to produce an annual return of approximately 1.40% to cover annual interest payments on the outstanding debt. For more information on our indebtedness, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital Resources.”
Our indebtedness could adversely affect our business, financial conditions or results of operations.
We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our credit facilities or otherwise in an amount sufficient to enable us to repay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before it matures. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to
 
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take actions such as selling assets or seeking additional equity. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all, or on terms that would not be disadvantageous to our stockholders or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements.
Changes in interest rates may increase our cost of capital, reduce the ability of our portfolio companies to service their debt obligations and decrease our net investment income.
General interest rate fluctuations and changes in credit spreads on floating rate loans may have a substantial negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital, our net investment income and our net asset value. Substantially all of our debt investments have variable interest rates that reset periodically based on benchmarks such as LIBOR and the prime rate, so an increase in interest rates from their historically low present levels may make it more difficult for our portfolio companies to service their obligations under the debt investments that we will hold. Rising interest rates could also cause portfolio companies to shift cash from other productive uses to the payment of interest, which may have a material adverse effect on their business and operations and could, over time, lead to increased defaults. In addition, to the extent we borrow money to make investments, our net investment income depends, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income to the extent we use debt to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income.
In addition, a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt investments. Accordingly, an increase in interest rates would make it easier for us to meet or exceed the incentive fee hurdle rate and may result in a substantial increase of the amount of incentive fees payable to our Investment Adviser with respect to our pre-incentive fee net investment income.
We may experience fluctuations in our quarterly results.
We could experience fluctuations in our quarterly operating results due to a number of factors, including, the pace at which investments are made, the interest rate payable on the debt securities we acquire, the default rate on such securities, rates of repayment, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses and changes in unrealized appreciation or depreciation, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
There are significant potential conflicts of interest, including the management of other investment funds and accounts by our Investment Adviser, which could impact our investment returns.
Our executive officers and directors, other current and future principals of our Investment Adviser and certain members of our Investment Adviser’s investment committee may serve as officers, directors or principals of other entities and affiliates of our Investment Adviser and funds managed by our affiliates that operate in the same or a related line of business as we do. Currently, our executive officers, as well as the other principals of our Investment Adviser manage other funds affiliated with Carlyle, including other affiliated business development companies. In addition, our Investment Adviser’s investment team has responsibilities for managing U.S. middle market debt investments for certain other investment funds and accounts. Accordingly, they have obligations to investors in those entities, the fulfillment of which may not be in the best interests of, or may be adverse to the interests of, us or our stockholders. Although the professional staff of our Investment Adviser will devote as much time to our management as appropriate to enable our Investment Adviser to perform its duties in accordance with the Investment Advisory Agreement, the investment professionals of our Investment Adviser may have conflicts in allocating their time and services among us, on the one hand, and investment vehicles managed by Carlyle or one or more of its affiliates on the other hand.
 
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Our Investment Adviser may face conflicts in allocating investment opportunities between us and affiliated investment vehicles that have overlapping objectives with ours. Although our Investment Adviser will endeavor to allocate investment opportunities in a fair and equitable manner in accordance with its allocation policies and procedures, it is possible that, in the future, we may not be given the opportunity to participate in investments made by investment funds managed by our Investment Adviser or an investment manager affiliated with our Investment Adviser, including Carlyle.
We and our affiliates may own investments at different levels of a portfolio company’s capital structure or otherwise own different classes of a portfolio company’s securities, which may give rise to conflicts of interest or perceived conflicts of interest. Conflicts may also arise because portfolio decisions regarding our portfolio may benefit our affiliates. Our affiliates may pursue or enforce rights with respect to one of our portfolio companies, and those activities may have an adverse effect on us.
As a result of the expansion of Carlyle’s platform into various lines of business in the alternative asset management industry, Carlyle is subject to a number of actual and potential conflicts of interest and subject to greater regulatory oversight than that to which it would otherwise be subject if it had just one line of business. In addition, as Carlyle expands its platform, the allocation of investment opportunities among its investment funds, including us, is expected to become more complex. In addressing these conflicts and regulatory requirements across Carlyle’s various businesses, Carlyle has and may continue to implement certain policies and procedures (for example, information barriers). In addition, we may come into possession of material non-public information with respect to issuers in which we may be considering making an investment. As a consequence, we may be precluded from providing such information or other ideas to other funds affiliated with Carlyle that benefit from such information or we may be precluded from otherwise consummating a contemplated investment. To the extent we or any other funds affiliated with Carlyle fail to appropriately deal with any such conflicts, it could negatively impact our reputation or Carlyle’s reputation and our ability to raise additional funds and the willingness of counterparties to do business with us or result in potential litigation against us.
In the ordinary course of business, we may enter into transactions with affiliates and portfolio companies that may be considered related party transactions. We have implemented certain policies and procedures whereby certain of our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us and other affiliated persons, including our Investment Adviser, stockholders that own more than 5% of us, employees, officers and directors of us and our Investment Adviser and certain persons directly or indirectly controlling, controlled by or under common control with the foregoing persons. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the Investment Company Act or, if such concerns exist, we have taken appropriate actions to seek Board of Directors review and approval or SEC exemptive relief for such transaction.
In the course of our investing activities, we pay management and incentive fees to our Investment Adviser and reimburse our Investment Adviser for certain expenses it incurs in accordance with our Investment Advisory Agreement. As a result, investors in our common stock invest on a “gross” basis and receive distributions on a “net” basis after expenses, resulting in a lower rate of return than an investor might achieve through direct investments. Accordingly, there may be times when the senior management team of our Investment Adviser has interests that differ from those of our stockholders, giving rise to a conflict.
In addition, we pay our Administrator, an affiliate of our Investment Adviser, its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including, compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff in their role of performing our Sarbanes-Oxley Act internal control assessment. These arrangements create conflicts of interest that our Board of Directors monitors.
 
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We may be obligated to pay our Investment Adviser incentive compensation even if we incur a loss.
Our Investment Adviser is entitled to incentive compensation for each calendar quarter in an amount equal to a percentage of the excess of our pre-incentive fee net investment income for that quarter (before deducting incentive compensation) above a performance threshold for that quarter. In calculating our performance threshold, we use net assets which results in a lower hurdle rate than if we used gross assets like we do for determining our base management fee. Our pre-incentive fee net investment income for incentive compensation purposes excludes realized and unrealized capital losses and depreciation that we may incur in the calendar quarter, even if such capital losses or depreciation result in a net loss on our statement of operations for that quarter. Thus, we may be required to pay our Investment Adviser incentive compensation for a calendar quarter even if there is a decline in the value of our portfolio or we incur a net loss for that quarter, subject to the deferral provisions.
Additionally, the fee we pay our Investment Adviser will be effectively higher after the completion of the first full quarter after the consummation of this offering. Prior to this offering, our Investment Adviser waived its right to receive one-third (0.50%) of the management fee. The fee waiver was scheduled to terminate upon consummation of this offering, but our Investment Adviser has agreed to continue the waiver until the completion of the first full quarter after the consummation of this offering.
Our fee structure may induce our Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.
The incentive fees payable by us to our Investment Adviser may create an incentive for our Investment Adviser to pursue investments on our behalf that are riskier or more speculative than would be the case in the absence of such compensation arrangement. The incentive fees payable to our Investment Adviser are calculated based on a percentage of our return on invested capital. This may encourage our Investment Adviser to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would impair the value of our common stock. In addition, our Investment Adviser receives the incentive fees based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fees based on income, there is no hurdle rate applicable to the portion of the incentive fees based on net capital gains. As a result, our Investment Adviser may have a tendency to invest more capital in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.
The “catch-up” portion of the incentive fees may encourage our Investment Adviser to accelerate or defer interest payable by portfolio companies from one calendar quarter to another, potentially resulting in fluctuations in timing and dividend amounts.
Moreover, because the base management fees payable to our Investment Adviser are payable based on our gross assets, including those assets acquired through the use of leverage, our Investment Adviser has a financial incentive to incur leverage which may not be consistent with our stockholders’ interests.
We may invest, to the extent permitted by law, in the securities and instruments of other investment companies, including private funds, and, to the extent we so invest, bear our ratable share of any such investment company’s expenses, including management and performance fees. We also remain obligated to pay management and incentive fees to our Investment Adviser with respect to the assets invested in the securities and instruments of other investment companies. With respect to each of these investments, each of our stockholders bear his or her share of the management and incentive fees of our Investment Adviser as well as indirectly bearing the management and performance fees and other expenses of any investment companies in which we invest.
 
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We will be subject to corporate-level income tax if we are unable to maintain our qualification as a RIC for U.S. federal income tax purposes under Subchapter M of the Code.
Although we have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code, we cannot assure you that we will be able to maintain RIC status. To maintain RIC status and be relieved of U.S. federal income taxes on income and gains distributed to our stockholders, we must, among other things, continue to qualify and have in effect an election to be treated as a BDC under the Investment Company Act at all times during each taxable year and meet the Annual Distribution Requirement, the 90% Gross Income Test and the Diversification Tests (each defined term, defined below).
 
 	•	 	We must distribute to our stockholders on an annual basis at least 90% of our investment company taxable income (generally, our net ordinary income plus the excess of our realized net short-term capital gains over realized net long-term capital losses, determined without regard to the dividends paid deduction) for each taxable year (the “Annual Distribution Requirement”).	
 
 	•	 	We must derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities or foreign currencies, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities or foreign currencies (the “90% Gross Income Test”).	
 
 	•	 	At the end of each quarter of our taxable year, at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, or of two or more issuers that are controlled, as determined under applicable Code rules, by us and that are engaged in the same or similar or related trades or businesses, or the securities of one or more “qualified publicly traded partnerships” (the “Diversification Tests”).	
If we fail to maintain our RIC status for any reason, and we do not qualify for certain relief provisions under the Code, we would be subject to corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes) regardless of whether we make any distributions to the holders of our common stock. In this event, the resulting taxes and any resulting penalties could substantially reduce our net assets, the amount of our income available for distribution and the amount of our distributions to our stockholders, which would have a material adverse effect on our financial performance. For additional discussion regarding the tax implications of a RIC, see “U.S. Federal Income Tax Considerations.”
We may have difficulty satisfying the Annual Distribution Requirement in order to maintain our RIC status if we recognize income before or without receiving cash representing such income.
We may make investments that produce income that is not matched by a corresponding cash receipt by us, such as OID, which may arise, for example, if we receive warrants in connection with the making of a loan, or PIK interest representing contractual interest added to the loan principal balance and due at the end of the loan term. Any such income would be treated as income earned by us and therefore would be subject to the Annual Distribution Requirement. Such investments may require us to borrow money or dispose of other securities in order to comply with those requirements. However, under the Investment Company Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless an “asset coverage” test is met.
If we are prohibited from making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions, we may not be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of ordinary income rather than capital gain, or that
 
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prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions. See “U.S. Federal Income Tax Considerations—Taxation as a Regulated Investment Company.”
A portion of our income and fees may not be qualifying income for purposes of the income source requirement.
Some of the income and fees that we may recognize will not satisfy the income source requirement applicable to RICs. In order to ensure that such income and fees do not disqualify us as a RIC for a failure to satisfy such requirement, we may be required to recognize such income and fees indirectly through one or more entities treated as corporations for U.S. federal income tax purposes. Such corporations will be required to pay U.S. corporate income tax on their earnings, which ultimately will reduce the amount of income available for distribution.
If we are not treated as a “publicly offered regulated investment company,” as defined in the Code, certain U.S. stockholders will be treated as having received a dividend from us in the amount of such U.S. stockholders’ allocable share of the management and incentive fees paid to our Investment Adviser and certain of our other expenses, and these fees and expenses will be treated as miscellaneous itemized deductions of such U.S. stockholders.
We expect to be treated as a “publicly offered regulated investment company” as a result of shares of our common stock being treated as regularly traded on an established securities market. However, we cannot assure you that we will be treated as a publicly offered regulated investment company for all years. If we are not treated as a publicly offered regulated investment company for any calendar year, each U.S. stockholder that is an individual, trust or estate will be treated as having received a dividend from us in the amount of such U.S. stockholder’s allocable share of the management and incentive fees paid to our Investment Adviser and certain of our other expenses for the calendar year, and these fees and expenses will be treated as miscellaneous itemized deductions of such U.S. stockholder. Miscellaneous itemized deductions generally are deductible by a U.S. stockholder that is an individual, trust or estate only to the extent that the aggregate of such U.S. stockholder’s miscellaneous itemized deductions exceeds 2% of such U.S. stockholder’s adjusted gross income for U.S. federal income tax purposes, are not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under the Code. See “U.S. Federal Income Tax Considerations.”
Under the JOBS Act, we are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which would require that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting .
While we are obligated to maintain proper and effective internal control over financial reporting, including the internal control evaluation and certification requirements of Section 404 of the Sarbanes-Oxley Act (“Section 404”), we will not be required to comply with all of the requirements under Section 404 until the date we are no longer an emerging growth company under the JOBS Act. Accordingly, our internal controls over financial reporting do not currently meet all of the standards contemplated by Section 404 that we will eventually be required to meet.
If we are not able to implement the applicable requirements of Section 404 in a timely manner or with adequate compliance, our operations, financial reporting or financial results could be adversely affected. Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, and result in a breach of the covenants under the agreements governing any of our financing arrangements. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements could also suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our common stock.
 
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Our internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, or if we experience difficulties in their implementation, our business and operating results could be harmed and we could fail to meet our financial reporting obligations.
Certain investors are limited in their ability to make significant investments in us.
Private funds that are excluded from the definition of “investment company” either pursuant to Section 3(c)(1) or 3(c)(7) of the Investment Company Act are restricted from acquiring directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition). Investment companies registered under the Investment Company Act and BDCs, such as us, are also subject to this restriction as well as other limitations under the Investment Company Act that would restrict the amount that they are able to invest in our securities. As a result, certain investors will be limited in their ability to make significant investments in us at a time that they might desire to do so.
Our Board of Directors is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.
Under the Maryland General Corporation Law (“MGCL”) and our charter, our Board of Directors is authorized to classify and reclassify any authorized but unissued shares of stock into one or more classes of stock, including preferred stock. Prior to the issuance of shares of each class or series, the Board of Directors is required by Maryland law and our charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the Board of Directors could authorize the issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. The cost of any such reclassification would be borne by our existing common stockholders. Certain matters under the Investment Company Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. In addition, the Investment Company Act provides that holders of preferred stock are entitled to vote separately from holders of common stock to elect two preferred stock directors. We currently have no plans to issue preferred stock, but may determine to do so in the future. The issuance of preferred stock convertible into shares of common stock might also reduce the net income per share and net asset value per share of our common stock upon conversion, provided, that we will only be permitted to issue such convertible preferred stock to the extent we comply with the requirements of Section 61 of the Investment Company Act, including obtaining common stockholder approval. In addition, under the Investment Company Act, participating preferred stock and preferred stock constitutes a “senior security” for purposes of the 200% asset coverage test. These effects, among others, could have an adverse effect on an investment in our common stock.
Provisions of the MGCL and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.
The MGCL and our charter and bylaws contain provisions that may discourage, delay or make more difficult a change in control of us or the removal of our directors. We are subject to the Maryland Business Combination Act (“MBCA”), subject to any applicable requirements of the Investment Company Act. Our Board of Directors has adopted a resolution exempting from the MBCA any business combination between us and any other person, subject to prior approval of such business combination by our Board of Directors, including approval by a majority of our Independent Directors. If the resolution exempting business combinations is repealed or our Board of Directors does not approve a business combination, the Business Combination Act may
 
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discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer. Our bylaws exempt from the Maryland Control Share Acquisition Act (“Control Share Act”) acquisitions of our stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Act, the Control Share Act also may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such a transaction. However, we will amend our bylaws to be subject to the Control Share Act only if our Board of Directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the Investment Company Act.
We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our Board of Directors in three classes serving staggered three-year terms, and authorizing our Board of Directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, to amend our charter without stockholder approval and to increase or decrease the number of shares of stock that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.
Our Board of Directors may change our investment objective, operating policies and strategies without prior notice and without stockholder approval.
Our Board of Directors has the authority to modify or, if applicable, waive our investment objectives, operating policies and strategies without prior notice (except as required by the Investment Company Act) and without stockholder approval. In addition, none of our investment policies is fundamental and any of them may be changed without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current investment objectives, operating policies or strategies would have on our business, operating results and value of our stock. Nevertheless, the effects may adversely affect our business and impact our ability to make distributions.
A failure in our operational systems or infrastructure, or those of third parties, as well as cyber-attacks could significantly disrupt our business or negatively affect our liquidity, financial condition or results of operations.
We rely heavily on our and third parties’ financial, accounting, information and other data processing systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities. We face various security threats on a regular basis, including ongoing cyber-security threats to and attacks on our information technology infrastructure that are intended to gain access to our proprietary information, destroy data or disable, degrade or sabotage our systems. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships.
We operate in a business that is highly dependent on information systems and technology. Carlyle has implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber-incident, do not guarantee that a cyber-incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident. The information systems and technology that we rely on may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase from its current level. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on us.
 
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Changes in laws or regulations governing our business or the businesses of our portfolio companies, changes in the interpretation thereof or newly enacted laws or regulations, and any failure by us or our portfolio companies to comply with these laws or regulations may adversely affect our business and the businesses of our portfolio companies.
We and our portfolio companies are subject to laws and regulations at the U.S. federal, state and local levels and, in some cases, foreign levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws, regulations and interpretations may also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business or the business of our portfolio companies. The legal, tax and regulatory environment for BDCs, investment advisers and the instruments that they utilize (including derivative instruments) is continuously evolving. In addition, there is significant uncertainty regarding recently enacted legislation (including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the regulations that have recently been adopted and future regulations that may or may not be adopted pursuant to such legislation) and, consequently, the full impact that such legislation will ultimately have on us and the markets in which we trade and invest is not fully known. Such uncertainty and any resulting confusion may itself be detrimental to the efficient functioning of the markets and the success of certain investment strategies.
In addition, as private equity firms become more influential participants in the U.S. and global financial markets and economy generally, there recently has been pressure for greater governmental scrutiny and/or regulation of the private equity industry. It is uncertain as to what form and in what jurisdictions such enhanced scrutiny and/or regulation, if any, on the private equity industry may ultimately take. Therefore, there can be no assurance as to whether any such scrutiny or initiatives will have an adverse impact on the private equity industry, including our ability to effect operating improvements or restructurings of our portfolio companies or otherwise achieve our objectives.
Over the last several years, there also has been an increase in regulatory attention to the extension of credit outside of the traditional banking sector, raising the possibility that some portion of the non-bank financial sector will be subject to new regulation. While it cannot be known at this time whether any regulation will be implemented or what form it will take, increased regulation of non-bank credit extension could negatively impact our operating results or financial condition, impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business.
On February 3, 2017, President Trump signed an executive order (the “Executive Order”) announcing the new Administration’s policy to regulate the U.S. financial system in a manner consistent with certain “Core Principles,” including regulation that is efficient, effective and appropriately tailored. The Executive Order directs the Secretary of the Treasury, in consultation with the heads of the member agencies of the Financial Stability Oversight Council, to report to the President on the extent to which existing laws, regulations and other government policies promote the Core Principles and to identify any laws, regulations or other government policies that inhibit federal regulation of the U.S. financial system. At this time it is unclear what impact the Executive Order in particular and the Administration’s policies in general will have on regulations that affect our and our portfolio companies’ business.
Changes in laws or regulations related to U.S. federal income taxation could affect us or the holders of our common stock.
Reform proposals have been recently put forth by members of Congress and the President which, if ultimately proposed as legislation and enacted as law, would substantially change the U.S. federal taxation of (among other things) individuals and businesses. In 2016, the Speaker of the House of Representatives and the Chairman of the House Ways and Means Committee published “A Better Way.” Separately, the then-candidate, now-President published a one-page document on tax reform. Each of these proposals sets forth a variety of principles to guide potential tax reform legislation. As of the date of this offering, no legislation in respect of
 
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either of these proposals has been introduced in the Congress. However, the principles set forth in both “A Better Way” and the President’s one-page proposal, if ultimately reduced to legislation enacted by the Congress and signed into law by the President in a form that is consistent with those principles, could change dramatically the U.S. federal taxation of us and a holder of our common stock. Under both “A Better Way” and President Trump’s proposal, individual and corporate tax rates would be meaningfully reduced. Under “A Better Way,” the U.S. federal tax system would be converted into a “destination-based cash-flow” tax system under which net interest expense would not be deductible, investment in tangible property (other than land) and intangible assets would be immediately deductible, export revenue would not be taxable, and the cost of imports would not be deductible. While it is impossible to predict whether and to what extent any tax reform legislation (or other legislative, regulatory or administrative change to the U.S. federal tax laws) will be proposed or enacted, any such change in the U.S. federal tax laws could affect materially the value of any investment in our common stock. Prospective investors should consult their tax advisors regarding possible legislative and regulatory changes and the potential effect of such changes on an investment in our common stock.
Our Investment Adviser, Administrator and sub-administrators are able to resign upon 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.
Our Investment Adviser, our Administrator and our sub-administrators have the right to resign under the Investment Advisory Agreement, the Administration Agreement and the Sub-Administration agreements, respectively, upon 60 days’ written notice, whether a replacement has been found or not. If any of them resigns, it may be difficult to find a replacement with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If a replacement is not found quickly, our business, results of operation and financial condition as well as our ability to pay distributions are likely to be adversely affected and the value of our shares may decline. In addition, the coordination of our internal management and investment activities is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by our Investment Adviser, our Administrator and their affiliates, including certain of our sub-administrators. Even if a comparable service provider or individuals performing such services are retained, whether internal or external, their integration into our business and lack of familiarity with our investment objective may result in additional costs and time delays that may materially adversely affect our business, results of operations and financial condition. Moreover, the termination by our Investment Adviser of our Investment Advisory Agreement for any reason will be an event of default under the SPV Credit Facility, which could result in the immediate acceleration of the amounts due under the SPV Credit Facility. Similarly, it will be an event of default under the Credit Facility if our Investment Adviser or an affiliate of our Investment Adviser ceases to manage us, which could result in the immediate acceleration of the amounts due under the Credit Facility.
Our Investment Adviser’s liability is limited under the Investment Advisory Agreement, and we are required to indemnify our Investment Adviser against certain liabilities, which may lead our Investment Adviser to act in a riskier manner on our behalf than it would when acting for its own account.
Our Investment Adviser has not assumed any responsibility to us other than to render the services described in the Investment Advisory Agreement, and it will not be responsible for any action of our Board of Directors in declining to follow our Investment Adviser’s advice or recommendations. Pursuant to the Investment Advisory Agreement, our Investment Adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other person or entities affiliated with it will not be liable to us for their acts under the Investment Advisory Agreement, absent willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. We have agreed to indemnify, defend and protect our Investment Adviser and its members and their respective officers, managers, partners, agents, employees, controlling persons and members and any other person or entities affiliated with it with respect to all damages, liabilities, costs and expenses arising out of or otherwise based upon the performance of any of our Investment Adviser’s duties or obligations under the Investment Advisory Agreement or otherwise as an
 
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Investment Adviser for us, and not arising out of willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties under the Investment Advisory and Agreement. These protections may lead our Investment Adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account. See “Risk Factors—Risks Related to Our Business and Structure—Our fee structure may induce our Investment Adviser to pursue speculative investments and incur leverage, and investors may bear the cost of multiple levels of fees and expenses.”
We are subject to certain risks as a result of our direct interest in the Preferred Interests of the 2015-1 Issuer.
Because each of the SPV and the 2015-1 Issuer is disregarded as an entity separate from its owner for U.S. federal income tax purposes, the sale or contribution by SPV to us and the sale or contribution by us to the 2015-1 Issuer as part of the 2015-1 Debt Securitization did not constitute a taxable event for U.S. federal income tax purposes. If the U.S. Internal Revenue Service were to take a contrary position, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.
The Preferred Interests in the 2015-1 Issuer are subordinated obligations of the 2015-1 Issuer.
The 2015-1 Issuer is the residual claimant on funds, if any, remaining after holders of all classes of 2015-1 Notes have been paid in full on each payment date or upon maturity of the 2015-1 Notes under the 2015-1 Debt Securitization documents. The Preferred Interests in the 2015-1 Issuer represent all of the equity interest in the 2015-1 Issuer and, as the holder of the Preferred Interests, we may receive distributions, if any, only to the extent that the 2015-1 Issuer makes distributions out of funds remaining after holders of all classes of 2015-1 Notes have been paid in full on each payment date any amounts due and owing on such payment date or upon maturity of the 2015-1 Notes. There is no guarantee that we will receive any distributions as the holders of the Preferred Interests.
The interests of holders of the 2015-1 Notes issued by the 2015-1 Issuer may not be aligned with our interests.
The 2015-1 Notes are the debt obligations ranking senior in right of payment to our interests. As such, there are circumstances in which the interests of holders of the 2015-1 Notes may not be aligned with our interests. For example, under the terms of the 2015-1 Issuer, holders of the 2015-1 Notes have the right to receive payments of principal and interest prior to distribution to our interests.
For as long as the 2015-1 Notes remain outstanding, holders of the 2015-1 Notes have the right to act, in certain circumstances, with respect to the portfolio loans in ways that may benefit their interests but not the interests of holders of the Preferred Interests of the 2015-1 Issuer, including by exercising remedies under the 2015-1 Indenture (as defined below).
If an event of default has occurred and acceleration occurs in accordance with the terms of the 2015-1 Indenture, the 2015-1 Notes then outstanding will be paid in full before any further payment or distribution to the Preferred Interests. In addition, if an event of default occurs, holders of a majority of the 2015-1 Notes then outstanding will be entitled to determine the remedies to be exercised under the 2015-1 Indenture, subject to the terms of the 2015-1 Indenture. For example, upon the occurrence of an event of default with respect to the notes issued by the 2015-1 Issuer, the trustee or holders of a majority of the 2015-1 Notes then outstanding may declare the principal, together with any accrued interest, of all the 2015-1 Notes to be immediately due and payable. This would have the effect of accelerating the principal on such notes, triggering a repayment obligation on the part of the 2015-1 Issuer. If at such time the portfolio loans of the 2015-1 Issuer were not performing well, the 2015-1 Issuer may not have sufficient proceeds available to enable the trustee under the 2015-1 Indenture to pay a distribution to holders of the Preferred Interests of the 2015-1 Issuer.
Remedies pursued by the holders of the 2015-1 Notes could be adverse to the interests of the holders of the Preferred Interests, and the holders of the 2015-1 Notes have no obligation to consider any possible adverse
 
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effect on such other interests. Thus, any remedies pursued by the holders of the 2015-1 Notes may not be in our best interests and we may not receive payments or distributions upon an acceleration of the 2015-1 Notes. Any failure of the 2015-1 Issuer to make distributions on Preferred Interests we hold, directly or indirectly, whether as a result of an event of default or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows and may result in an inability of us to make distributions sufficient to allow for us to qualify as a RIC for U.S. federal income tax purposes.
The 2015-1 Issuer may fail to meet certain asset coverage tests.
Under the documents governing the 2015-1 Debt Securitization, there are two coverage tests applicable to the 2015-1 Notes.
The first such test compares the amount of interest received on the portfolio loans held by the 2015-1 Issuer to the amount of interest payable in respect of the 2015-1 Notes. To meet this first test, interest received on the portfolio loans must equal at least 120% of the interest payable in respect of the 2015-1 Notes issued by the 2015-1 Issuer.
The second such test compares the adjusted collateral principal amount of the portfolio loans of the 2015-1 Debt Securitization to the aggregate outstanding principal amount of the 2015-1 Notes. To meet this second test at any time, the adjusted collateral principal amount of the portfolio loans must equal at least 140% of the outstanding principal amount of the 2015-1 Notes.
If any coverage test with respect to the 2015-1 Notes is not met, proceeds from the portfolio of loans that otherwise would have been distributed to the holders of the Preferred Interests of 2015-1 Issuer will instead be used to redeem first the 2015-1 Notes, to the extent necessary to satisfy the applicable asset coverage tests on a pro forma basis after giving effect to all payments made in respect of the 2015-1 Notes, which we refer to as a mandatory redemption, or to obtain the necessary ratings confirmation. There is no guarantee that the 2015-1 Notes will meet either of these coverage tests, and thus, we may not receive distributions as the holders of the Preferred Interests.
We may not receive cash from the 2015-1 Issuer.
We receive cash from the 2015-1 Issuer only to the extent of payments on the distributions, if any, with respect to the Preferred Interests of the 2015-1 Issuer as permitted under the 2015-1 Debt Securitization. The 2015-1 Issuer may only make payments on Preferred Interests to the extent permitted by the payment priority provisions of the indenture governing the 2015-1 Notes (the “2015-1 Indenture”), as applicable, which generally provide, distribution to Preferred Interests holder may not be made on any payment date unless all amounts owing under the 2015-1 Notes are paid in full. There is no guarantee that we will receive any distributions as the holders of the Preferred Interests.
In addition, if the 2015-1 Issuer does not meet the asset coverage tests or the interest coverage test set forth in the documents governing the 2015-1 Debt Securitization, cash would be diverted to first pay the 2015-1 Notes in amounts sufficient to cause such tests to be satisfied. Even if we do not receive cash directly from the 2015-1 Issuer, such amount will still be treated as income subject to our requirement to distribute 90% of our net investment income to our shareholders. Therefore, in the event that we fail to receive cash directly from the 2015-1 Issuer, we could be unable to make such distributions in amounts sufficient to maintain our status as a RIC for U.S. federal income tax purposes, or at all.
We may be required to assume liabilities of the 2015-1 Issuer and are indirectly liable for certain representations and warranties in connection with the 2015-1 Debt Securitization.
As part of the 2015-1 Debt Securitization, we entered into a contribution agreement under which we are required to repurchase any loan (or participation interest therein) which was sold to the 2015-1 Issuer in breach
 
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of any representation or warranty made by us with respect to such loan on the date such loan was sold. To the extent we fail to satisfy any such repurchase obligation, the trustee of the 2015-1 Debt Securitization may, on behalf of the 2015-1 Issuer, bring an action against us to enforce these repurchase obligations.
The structure of the 2015-1 Debt Securitization is intended to prevent, in the event of our bankruptcy, the consolidation of the 2015-1 Issuer with our operations. If the true sale of the assets in the 2015-1 Debt Securitization were not respected in the event of our insolvency, a trustee or debtor-in-possession might reclaim the assets of the 2015-1 Issuer for our estate. However, in doing so, we would become directly liable for all of the indebtedness then outstanding under the 2015-1 Debt Securitization, which would equal the full amount of debt of the 2015-1 Issuer reflected on our consolidated balance sheet.
In addition, in connection with 2015-1 Debt Securitization, the Company has made customary representations, warranties and covenants to the 2015-1 Issuer. We remain liable for any breach of such representations for the life of the 2015-1 Debt Securitization.
Risks Related to the NFIC Acquisition
We may fail to complete the NFIC Acquisition.
While there can be no assurances as to the exact timing, or that the NFIC Acquisition will be completed at all, we expect to complete the NFIC Acquisition in June 2017. The completion of the NFIC Acquisition is subject to certain conditions, including, among others, NFIC stockholder approval and other customary closing conditions. We intend to complete the NFIC Acquisition as soon as possible; however, we cannot assure you that the conditions required to complete the NFIC Acquisition will be satisfied or waived on the anticipated schedule, or at all. See “Summary—NFIC Acquisition” for a description of the terms of the NFIC Acquisition. Any investment decision you make should be made with the understanding that the completion of the NFIC Acquisition may not happen as scheduled, or at all.
The Merger Agreement may be terminated in accordance with its terms and the NFIC Acquisition may not be completed.
The Merger Agreement is subject to a number of conditions that must be fulfilled in order to complete the NFIC Acquisition. Those conditions include, among others: the approval of the Merger Agreement by NFIC stockholders, the accuracy of representations and warranties under the Merger Agreement in all material respects, the declaration of a dividend that will satisfy the annual distribution requirement necessary to qualify as a RIC prior to the time of valuation, and the receipt by each party of certain opinions from legal counsel. These conditions to the closing of the NFIC Acquisition may not be fulfilled in a timely manner or at all, and, accordingly, the NFIC Acquisition may be delayed or may not be completed. In addition, the parties may elect to terminate the Merger Agreement in certain circumstances.
There is a potential for conflicts of interest due to common directorship between NFIC and us.
Each of our directors is a director of NFIC. This could create various conflicts. For example, in determining the valuation of the securities involved in the NFIC Acquisition, our directors, who might otherwise demand the lowest price possible, may instead compromise on paying a higher price because they also are directors of NFIC, who have an interest in getting the highest price possible. This conflict, however, is mitigated by having an independent evaluator to review the value of a portion of the debt securities of NFIC and the Company for which market quotations are not readily available (including all such securities rated 4 through 6 by our Investment Adviser under the Internal Risk Ratings system of our Investment Adviser).
 
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Our executive officers and directors may have interests in the NFIC Acquisition other than, or in addition to, the interests of our stockholders generally.
Members of the Board and our executive officers may have interests in the NFIC Acquisition that are different from, or are in addition to, the interests of our stockholders generally. The Board was aware of these interests and considered them, among other matters, in approving the Merger Agreement.
Our stockholders will incur certain costs on or before the closing of the NFIC Acquisition.
We and NFIC will incur transaction and merger-related costs in connection with the NFIC Acquisition, which may be in excess of those anticipated by us or NFIC.
Each of us and NFIC has incurred and will incur expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement.
Many of these costs will be borne by NFIC and/or us even if the NFIC Acquisition is not completed.
Our results may suffer if we do not effectively manage our expanded portfolio following the NFIC Acquisition.
Following completion of the NFIC Acquisition, our success will depend, in part, on our ability to manage our expansion, which poses numerous risks and uncertainties, including the need to integrate the assets of NFIC into our existing portfolio in an efficient and timely manner.
Even if we and NFIC complete the NFIC Acquisition, we may fail to realize all of the anticipated benefits of the proposed NFIC Acquisition.
The success of the proposed NFIC Acquisition will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining NFIC’s and our portfolio. The anticipated benefits and cost savings of the proposed NFIC Acquisition may not be realized fully or at all, or may take longer to realize than expected or could have other adverse effects that we do not currently foresee. Some of the assumptions that we have made, such as the achievement of operating synergies and efficiencies, may not be realized.
Risks Related to Our Investments
Our portfolio companies may prepay loans, which may have the effect of reducing our investment income if the returned capital cannot be invested in transactions with equal or greater yields.
Loans are generally prepayable at any time, most of them at no premium to par. We are generally unable to predict the rate and frequency of such repayments. Whether a loan is prepaid will depend both on the continued positive performance of the portfolio company and the existence of favorable financing market conditions that allow such portfolio company the ability to replace existing financing with less expensive capital. In periods of rising interest rates, the risk of prepayment of floating rate loans may increase if other financing sources are available. As market conditions change frequently, we will often be unable to predict when, and if, this may be possible for each of our portfolio companies. In the case of some of these loans, having the loan called early may have the effect of reducing our actual investment income below our expected investment income if the capital returned cannot be invested in transactions with equal or greater yields.
The financial projections of our portfolio companies could prove inaccurate.
We generally evaluate the capital structure of portfolio companies on the basis of financial projections prepared by the management of such portfolio companies. These projected operating results are normally based primarily on judgments of the management of the portfolio companies. In all cases, projections are only estimates
 
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of future results that are based upon assumptions made at the time that the projections are developed. General economic conditions, which are not predictable with accuracy, along with other factors may cause actual performance to fall short of the financial projections that were used to establish a given portfolio company’s capital structure. Because of the leverage that is typically employed by our portfolio companies, this could cause a substantial decrease in the value of our investment in the portfolio company. The inaccuracy of financial projections could thus cause our performance to fall short of our expectations.
Our portfolio securities typically do not have a readily available market price and, in such a case, we will value these securities at fair value as determined in good faith under procedures adopted by our Board of Directors, which valuation is inherently subjective and may not reflect what we may actually realize from the sale of the investment.
Substantially all of our portfolio investments are in the form of debt investments that are not publicly traded and are less liquid than publicly traded securities. The fair value of these securities is not readily determinable, and the due diligence process that our Investment Adviser undertakes in connection with our investments may not reveal all the facts that may be relevant in connection with such investment. We value these investments on at least a quarterly basis in accordance with our valuation policy, which is at all times consistent with accounting principles generally accepted in the United States (“US GAAP”). Our Board of Directors utilizes the services of a third-party valuation firm to aid it in determining the fair value of these investments as well as the recommendations of our Investment Adviser’s investment professionals, which are based upon the most recent portfolio company financial statements available and projected financial results of each portfolio company. The Board of Directors discusses valuations and determines the fair value in good faith based on the input of our Investment Adviser and the third-party valuation firm. The participation of our Investment Adviser in our valuation process, and the indirect pecuniary interest in our Investment Adviser by the interested directors on our Board of Directors, could result in a conflict of interest, since the management fee is based on our gross assets and also because our Investment Adviser is receiving performance-based incentive fees.
The factors that are considered in the fair value pricing of our investments include the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in which the portfolio company does business, comparisons to publicly traded companies, discounted cash flow, relevant credit market indices, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate our valuation. Because such valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these securities existed. Also, since these valuations are, to a large extent, based on estimates, comparisons and qualitative evaluations of private information, it could make it more difficult for investors to value accurately our investments and could lead to undervaluation or overvaluation of our common stock. In addition, the valuation of these types of securities may result in substantial write-downs and earnings volatility. If our Investment Adviser is unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Also, privately held companies frequently have less diverse product lines and smaller market presence than larger competitors.
Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. The effect of all of these factors on our portfolio can reduce our net asset value by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer unrealized losses, which could have a material adverse impact on our business, financial condition and results of operations.
Our net asset value as of a particular date may be materially greater than or less than the value that would be realized if our assets were to be liquidated as of such date. For example, if we were required to sell a certain asset or all or a substantial portion of its assets on a particular date, the actual price that we would realize upon the
 
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disposition of such asset or assets could be materially less than the value of such asset or assets as reflected in our net asset value. Volatile market conditions could also cause reduced liquidity in the market for certain assets, which could result in liquidation values that are materially less than the values of such assets as reflected in our net asset value.
Our investments are risky and speculative.
We invest primarily in loans to middle market companies whose debt, if rated, is rated below investment grade and, if not rated, would likely be rated below investment grade if it were rated. Investments rated below investment grade are generally considered higher risk than investment grade instruments. Bonds that are rated below investment grade are sometimes referred to as “high yield bonds” or “junk bonds.” In our first lien senior secured loans, the fact that a loan is secured does not guarantee that we will receive principal and interest payments according to the loan’s terms, or at all, or that we will be able to collect on the loan should we be forced to enforce our remedies. To the extent we hold second lien senior secured loans and junior debt investments, holders of first lien loans may be repaid before us in the event of a bankruptcy or other insolvency proceeding. This may result in an above average amount of risk and loss of principal. Unitranche loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a heightened risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. When we invest in loans, we may acquire equity securities as well. However, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.
In addition, investing in middle market companies involves a number of significant risks, including:
 
 	•	 	these companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing on any guarantees or security we may have obtained in connection with our investment;	
 
 	•	 	they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;	
 
 	•	 	they are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on a portfolio company and, in turn, on us;	
 
 	•	 	there is generally little public information about these companies. These companies and their financial information are usually not subject to the Exchange Act and other regulations that govern public companies, and we may be unable to uncover all material information about these companies, which may prevent us from making a fully informed investment decision and cause us to lose money on our investments;	
 
 	•	 	they generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers, directors and our Investment Adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in the portfolio companies;	
 
 	•	 	changes in laws and regulations, as well as their interpretations, may adversely affect their business, financial structure or prospects; and	
 
 	•	 	they may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.	
 
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We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.
A number of entities compete with us to make the types of investments that we target in middle market companies. We compete with other BDCs, public and private funds, commercial and investment banks, commercial finance companies, and, to the extent they provide an alternative form of financing, private equity funds, some of which may be affiliates of us. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. The competitive pressures we face may have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.
We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors may make loans with interest rates that are comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss.
We may not replicate our historical performance or the historical success of Carlyle.
We cannot provide any assurance that we will replicate our own historical performance, the historical success of Carlyle or the historical performance of other companies that our Investment Adviser and our investment team advised in the past. Accordingly, our investment returns could be substantially lower than the returns achieved by the Company in the past, other Carlyle managed funds or by other clients of our Investment Adviser. We can offer no assurance that our Investment Adviser will be able to continue to implement our investment objective with the same degree of success as it has had in the past.
Our ability to enter into transactions with Carlyle and our other affiliates is restricted.
We and certain of our controlled affiliates are prohibited under the Investment Company Act from knowingly participating in certain transactions with our upstream affiliates, or our Investment Adviser and its affiliates, without the prior approval of our Independent Directors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities is our upstream affiliate for purposes of the Investment Company Act, and we are generally prohibited from buying or selling any security (other than our securities) from or to such affiliate, absent the prior approval of our Independent Directors. The Investment Company Act also prohibits “joint” transactions with an upstream affiliate, or our Investment Adviser or its affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our Independent Directors. In addition, we and certain of our controlled affiliates are prohibited from buying or selling any security from or to, or entering into joint transactions with, our Investment Adviser and its affiliates, or any person who owns more than 25% of our voting securities or is otherwise deemed to control, be controlled by, or be under common control with us, absent the prior approval of the SEC through an exemptive order (other than in certain limited situations pursuant to current regulatory guidance as described below). The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts and circumstances then existing.
As a BDC, we are required to comply with certain regulatory requirements. For example, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle. We are also not permitted to make any co-investments with our Investment Adviser or its affiliates (including any fund managed by Carlyle) without exemptive relief from the SEC, subject to certain exceptions. The SEC has granted us the Exemptive Relief that permits us and certain present and future funds advised by our Investment Adviser
 
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(or a future investment adviser controlling, controlled by or under common control with our Investment Adviser) to co-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, our Investment Adviser’s allocation procedures and Carlyle’s other allocation policies and procedures, where applicable.
In addition to co-investing pursuant to our Exemptive Relief, we may invest alongside affiliates or their affiliates in certain circumstances where doing so is consistent with applicable law and current regulatory guidance. For example, we may invest alongside such investors consistent with guidance promulgated by the SEC staff permitting us and an affiliated person to purchase interests in a single class of privately placed securities so long as certain conditions are met, including that we negotiate no term other than price. We may, in certain cases, also make investments in securities owned by affiliates that we acquire from non-affiliates. In such circumstances, our ability to participate in any restructuring of such investment or other transaction involving the issuer of such investment may be limited, and as a result, we may realize a loss on such investments that might have been prevented or reduced had we not been restricted in participating in such restructuring or other transaction.
To the extent we make investments in restructurings and reorganizations they may be subject to greater regulatory and legal risks than other traditional direct investments in portfolio companies.
We may make investments in restructurings that involve, or otherwise invest in the debt securities of, companies that are experiencing or are expected to experience severe financial difficulties. These severe financial difficulties may never be overcome and may cause such companies to become subject to bankruptcy proceedings. As such, these investments could subject us to certain additional potential liabilities that may exceed the value of our original investment therein. The level of analytical sophistication, both financial and legal, necessary for successful financing to companies experiencing significant business and financial difficulties is unusually high.
Our ability to extend financial commitments may be limited.
The SEC has proposed a new Rule 18f-4 under the Investment Company Act that, if enacted in the form proposed, could adversely impact the way we and other BDCs do business. In addition to imposing restrictions on the use of derivatives, the rule would generally limit our financial commitments to portfolio companies, together with our exposure to other transactions involving senior securities entered into by us other than in reliance of the rule, to not more than 150 percent of our net asset value. We cannot assure you when or if the proposed rule will be adopted by the SEC, and if adopted, whether the final rule will constrain our ability to extend financial commitments.
Our portfolio may be concentrated in a limited number of portfolio companies and industries, which will subject us to a risk of significant loss if any of these companies defaults on its obligations under any of its debt instruments or if there is a downturn in a particular industry.
We are classified as a non-diversified investment company within the meaning of the Investment Company Act, which means that we are not limited by the Investment Company Act with respect to the proportion of our assets that we may invest in securities of a single issuer, excluding limitations on investments in other investment companies. Although we do not intend to focus our investments in any specific industries, our portfolio may be concentrated in a limited number of portfolio companies and industries. Beyond the asset diversification requirements associated with our qualification as a RIC under Subchapter M of the Code and under the Facilities and 2015-1 Notes, we do not have fixed guidelines for diversification, and while we do not target any specific industries, our investments may be concentrated in relatively few industries. As a result, the aggregate returns we will realize may be significantly adversely affected if a small number of investments perform poorly or if we
 
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need to write down the value of one or more investments. Additionally, a downturn in any particular industry in which we are invested could also significantly impact our aggregate returns.
Our portfolio companies may be highly leveraged.
Some of our portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used. Leveraged companies may enter into bankruptcy proceedings at higher rates than companies that are not leveraged.
Our failure to make follow-on investments in our portfolio companies could impair the value of our investments.
Following an initial investment in a portfolio company, we may make additional investments in that portfolio company as “follow-on” investments to:
 
 	•	 	increase or maintain in whole or in part our equity ownership percentage;	
 
 	•	 	exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or	
 
 	•	 	attempt to preserve or enhance the value of our investment.	
We may elect not to make follow-on investments, may be constrained in our ability to employ available funds, or otherwise may lack sufficient funds to make those investments. We have the discretion to make any follow-on investments, subject to the availability of capital resources. However, doing so could be placing even more capital at risk in existing portfolio companies.
The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful investment. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other opportunities or because we are inhibited by compliance with BDC requirements or the desire to maintain our tax status.
Declines in the prices of corporate debt securities and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.
As a BDC, we are required to account for our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by or under the direction of our Board of Directors. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation. Depending on market conditions, we may face similar losses, which could reduce our net asset value and have a material adverse impact on our business, financial condition and results of operations.
Because we generally do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.
Although we may do so in the future, currently we do not intend to hold controlling equity positions in our portfolio companies. Accordingly, we may not be able to control decisions relating to a minority equity
 
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investment, including decisions relating to the management and operation of the portfolio company and the timing and nature of any exit. As a result, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity of the investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company and may therefore suffer a decrease in the value of our investments. If any of the foregoing were to occur, our financial condition, results of operations and cash flow could suffer as a result.
Our portfolio companies may incur debt that ranks equally with, or senior to, some of our investments in such companies.
To the extent we invest in second lien, mezzanine or other instruments, our portfolio companies typically may be permitted to incur other debt that ranks equally with, or senior to, such debt instruments. By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest or principal on or before the dates on which we will be entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. In such cases, after repaying such senior creditors, such portfolio company may not have sufficient remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.
The rights we may have with respect to the collateral securing the debt investments we make in our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.
We may also make unsecured loans to portfolio companies. Liens on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.
We may expose ourselves to risks if we engage in hedging transactions.
If we engage in hedging transactions, we may expose ourselves to risks associated with such transactions. We may utilize instruments such as forward contracts, credit default swaps, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates, credit risk premiums, and market interest rates. Hedging
 
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against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. It may not be possible to hedge against an exchange rate or interest rate fluctuation at an acceptable price that is generally anticipated. The success of any hedging transactions we may enter into will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the effect of the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations. Income derived from hedging transactions is generally not eligible to be distributed to non-U.S. stockholders free from U.S. withholding tax. We may determine not to hedge against particular risks, including if we determine that available hedging transactions are not available at an appropriate price.
There are certain risks associated with holding debt obligations that have original issue discount or payment-in-kind interest.
OID may arise if we hold securities issued at a discount or in certain other circumstances. OID and PIK create the risk that incentive fees will be paid to the Investment Adviser based on non-cash accruals that ultimately may not be realized, while the Investment Adviser will be under no obligation to reimburse us for these fees.
The higher interest rates of OID instruments reflect the payment deferral and increased credit risk associated with these instruments, and OID instruments generally represent a significantly higher credit risk than coupon loans. Even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation.
OID instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. OID income may also create uncertainty about the source of our cash dividends.
For accounting purposes, any cash dividends to stockholders representing OID income are not treated as coming from paid-in capital, even if the cash to pay them comes from the proceeds of issuances of our common stock. As a result, despite the fact that a dividend representing OID income could be paid out of amounts invested by our stockholders, the Investment Company Act does not require that stockholders be given notice of this fact by reporting it as a return of capital.
PIK interest has the effect of generating investment income at a compounding rate, thereby further increasing the incentive fees payable to the Investment Adviser. Similarly, all things being equal, the deferral associated with PIK interest also increases the loan-to-value ratio at a compounding rate.
Risks Related to this Offering and our Common Stock
Investing in our common stock may involve a high degree of risk.
The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and volatility or loss of principal. Our investments in portfolio companies
 
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may be highly speculative and aggressive, and therefore an investment in our common stock may not be suitable for someone with lower risk tolerance.
The market price of our common stock may fluctuate significantly.
The market price and liquidity of the market for shares of our common stock that will prevail in the market after this offering may be higher or lower than the price you pay and may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:
 
 	•	 	significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which are not necessarily related to the operating performance of these companies;	
 
 	•	 	price and volume fluctuations in the overall stock market from time to time;	
 
 	•	 	the inclusion or exclusion of our stock from certain indices;	
 
 	•	 	changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;	
 
 	•	 	any loss of RIC or BDC status;	
 
 	•	 	changes in earnings or perceived changes or variations in operating results;	
 
 	•	 	changes or perceived changes in the value of our portfolio of investments;	
 
 	•	 	changes in accounting guidelines governing valuation of our investments;	
 
 	•	 	any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;	
 
 	•	 	the inability of our Investment Adviser to employ additional experienced investment professionals or the departure of any of our Investment Adviser’s key personnel;	
 
 	•	 	short-selling pressure with respect to shares of our common stock or BDCs generally;	
 
 	•	 	future sales of our securities convertible into or exchangeable or exercisable for our common stock or the conversion of such securities;	
 
 	•	 	uncertainty surrounding the strength of the U.S. economic recovery and the policies of the new presidential administration;	
 
 	•	 	concerns regarding European sovereign debt;	
 
 	•	 	fluctuations in base interest rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate;	
 
 	•	 	operating performance of companies comparable to us;	
 
 	•	 	general economic trends and other external factors; and	
 
 	•	 	loss of a major funding source.	
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price fluctuates significantly, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
Prior to this offering, there has been no public market for our common stock, and we cannot assure you that the market price of our shares will not decline following the offering.
We cannot assure you that a trading market will develop for our common stock after this offering or, if one develops, that such trading market can be sustained. In addition, we cannot predict the prices at which our
 
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common stock will trade. The initial public offering price for our common stock will be determined through our negotiations with the underwriters and may not bear any relationship to the market price at which it may trade after this offering. Shares of companies offered in an initial public offering often trade at a discount to the initial offering price due to underwriting discounts and related offering expenses. Also, shares of closed-end investment companies, including BDCs, frequently trade at a discount from NAV and our common stock may also be discounted in the market. This characteristic of closed-end investment companies is separate and distinct from the risk that our NAV per share may decline. We cannot predict whether our common stock will trade at, above or below NAV. The risk of loss associated with this characteristic of closed-end management investment companies may be greater for investors expecting to sell shares of common stock purchased in the offering soon after the offering. In addition, if our common stock trades below its NAV, we will generally not be able to sell additional shares of our common stock to the public at its market price without, among other things, the requisite stockholders approve such a sale.
Investors in this offering may experience immediate dilution upon the closing of the offering.
If you purchase shares of our common stock in this offering, you may experience immediate dilution if the price that you pay is greater than the pro forma NAV per share of the common stock you acquire. Investors in this offering could pay a price per share of common stock that exceeds the tangible book value per share after the closing of the offering. At the initial public offering price of $19.00 per share purchasers in this offering will experience immediate dilution of approximately $0.68 per share. See “Dilution.”
Purchases of our common stock under the 10b5-1 Plan may result in the price of our common stock being higher than the price that otherwise might exist in the open market.
Certain individuals affiliated with Carlyle have indicated that they intend to adopt the 10b5-1 Plan in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act, under which the participants will buy up to $15 million in the aggregate of our common stock in the open market during the period beginning four full calendar weeks after the closing of this offering and ending on the earlier of the date on which the capital committed to the 10b5-1 Plan has been exhausted or one year after the closing of this offering, subject to certain conditions. See “Certain Relationships and Related Party Transactions” for additional details regarding the 10b5-1 Plan. Whether purchases will be made pursuant to the 10b5-1 Plan and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict. These activities may have the effect of maintaining the market price of our common stock or retarding a decline in the market price of the common stock, and, as a result, the price of our common stock may be higher than the price that otherwise might exist in the open market.
Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.
Upon completion of this offering, we will have 60,966,283 shares of common stock outstanding, excluding any shares issued in association with the NFIC Acquisition (or 62,316,283 shares of common stock if the underwriters’ option to purchase additional shares is fully exercised). Following this offering and the expiration of applicable lock-up periods, sales of substantial amounts of our common stock, or the availability of such shares for sale, could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of equity securities should we desire to do so.
Our stockholders will experience dilution in their ownership percentage if they opt out of our dividend reinvestment plan.
Effective on July 5, 2017, we will convert our current “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan, pursuant to which all dividends declared in cash payable to stockholders that do not elect to receive their distributions in cash will be automatically reinvested in shares of our common stock, rather
 
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than receiving cash. As a result, our stockholders that “opt out” of our dividend reinvestment plan will experience dilution in their ownership percentage of our common stock over time. See “Distributions” and “Dividend Reinvestment Plan” for a description of our dividend policy and obligations.
There is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to you may be a return of capital for U.S. federal income tax purposes.
We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. If we declare a dividend and if enough stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash dividend payments. In addition, due to the asset coverage test applicable to us as a BDC, we may be limited in our ability to make distributions. The Facilities may also limit our ability to declare dividends if we default under certain provisions. Further, if we invest a greater amount of assets in equity securities that do not pay current dividends, it could reduce the amount available for distribution. See “Distributions.” The above referenced restrictions on distributions may also inhibit our ability to make required interest payments to holders of our debt, which may cause a default under the terms of our debt agreements. Such a default could materially increase our cost of raising capital, as well as cause us to incur penalties under the terms of our debt agreements.
Our stockholders may be required to pay federal income taxes in excess of the cash dividends they receive.
We may distribute taxable dividends that are payable in cash or shares of our common stock at the election of each stockholder. If too many stockholders elect to receive cash, each stockholder electing to receive cash would receive a pro rata amount of cash (with the balance of the distribution paid in stock). In no event would any stockholder electing to receive cash receive less than 20% of his or her entire distribution in cash. For U.S. federal income tax purposes, the amount of a dividend paid in stock would be equal to the amount of cash that could have been received instead of stock.
Stockholders receiving dividends in shares of our common stock would be required to include the full amount of the dividend (including the portion payable in stock) as ordinary income (or, in certain circumstances, long-term capital gain) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our stockholders were to determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price (if any) of our common stock. It is unclear whether and to what extent we will be able to pay taxable dividends of the type described in this paragraph.
We may have difficulty paying our required distributions if we recognize taxable income before or without receiving cash representing such income.
For U.S. federal income tax purposes, we will include in our taxable income certain amounts that we have not yet received in cash, such as OID or accruals on a contingent payment debt instrument, which may occur if we receive warrants in connection with the origination of a loan or possibly in other circumstances or contracted PIK interest, which generally represents contractual interest added to the loan balance and due at the end of the loan term. Such OID and PIK interest will be included in our taxable income before we receive any corresponding cash payments. We also may be required to include in our taxable income certain other amounts that we will not receive in cash. The credit risk associated with the collectability of deferred payments may be
 
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increased as and when a portfolio company increases the amount of interest on which it is deferring cash payment through deferred interest features. Our investments with a deferred interest feature may represent a higher credit risk than loans for which interest must be paid in full in cash on a regular basis. For example, even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is scheduled to occur upon maturity of the obligation.
Because in certain cases we may recognize taxable income before or without receiving cash representing such income, we may have difficulty making distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement necessary for us to maintain our status as a RIC. Accordingly, we may need to sell some of our assets at times and/or at prices that we would not consider advantageous, we may need to raise additional equity or debt capital, or we may need to forego new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business) to enable us to make distributions to our stockholders that will be sufficient to enable us to meet the Annual Distribution Requirement. If we are unable to obtain cash from other sources to meet the Annual Distribution Requirement, we may fail to qualify for the U.S. federal income tax benefits allowable to RICs and, thus, become subject to a corporate-level U.S. federal income tax (and any applicable U.S. state and local taxes). Alternatively, we may, with the consent of all our shareholders, designate an amount as a consent dividend ( i.e. , a deemed dividend). In that case, although we would not distribute any actual cash to our shareholders, the consent dividend would be treated like an actual dividend under the Code for all U.S. federal income tax purposes. This would allow us to deduct the amount of the consent dividend and our shareholders would be required to include that amount in income as if it were actually distributed. For additional discussion regarding the tax implications of a RIC, see “U.S. Federal Income Tax Considerations.”
Non-U.S. stockholders may be subject to withholding of U.S. federal income tax on dividends we pay.
Distributions of our “investment company taxable income” to a non-U.S. stockholder that are not effectively connected with the non-U.S. stockholder’s conduct of a trade or business within the United States will be subject to withholding of U.S. federal income tax at a 30% rate (or lower rate provided by an applicable income tax treaty) to the extent of our current or accumulated earnings and profits. Certain properly designated dividends are generally exempt from withholding of U.S. federal income tax, including certain dividends that are paid in respect of our (i) “qualified net interest income” (generally, our U.S.-source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we or the non-U.S. stockholder are at least a 10% shareholder, reduced by expenses that are allocable to such income) or (ii) “qualified short-term capital gains” (generally, the excess of our net short-term capital gain over our long-term capital loss for such taxable year), and certain other requirements were satisfied. No assurance can be given as to whether any of our distributions will be eligible for this exemption from withholding of U.S. federal income tax or, if eligible, will be designated as such by us. See “U.S. Federal Income Tax Considerations—Taxation of Non-U.S. stockholders.”
 
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by the use of forward-looking terminology such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. You should read statements that contain these words carefully because they discuss our plans, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. Our forward-looking statements include information in this prospectus regarding general domestic and global economic conditions, our future financing plans, our ability to operate as a BDC and the expected performance of, and the yield on, our portfolio companies. In particular, there are forward-looking statements under “Summary—TCG BDC, Inc.,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There may be events in the future, however, that we are not able to predict accurately or control. The factors listed under “Risk Factors,” as well as any cautionary language in this prospectus, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Before you invest in our common stock, you should be aware that the occurrence of the events described in these risk factors and elsewhere in this prospectus could have a material adverse effect on our business, results of operation and financial position. You should not place undue reliance on these forward-looking statements, which speak only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Under Sections 27A(b)(2) of the Securities Act and Section 21E(b)(2) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with any offering of securities pursuant to this prospectus or in a beneficial ownership report we file under the Exchange Act.
The following factors are among those that may cause actual results to differ materially from our forward-looking statements:
 
 	•	 	our, or our portfolio companies’, future business, operations, operating results or prospects;	
 
 	•	 	the return or impact of current and future investments;	
 
 	•	 	the impact of any protracted decline in the liquidity of credit markets on our business;	
 
 	•	 	the impact of fluctuations in interest rates on our business;	
 
 	•	 	currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;	
 
 	•	 	our future operating results;	
 
 	•	 	the impact of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;	
 
 	•	 	the valuation of our investments in portfolio companies, particularly those having no liquid trading market;	
 
 	•	 	our ability to recover unrealized losses;	
 
 	•	 	market conditions and our ability to access alternative debt markets and additional debt and equity capital;	
 
 	•	 	our contractual arrangements and relationships with third parties;	
 
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 	•	 	the general economy and its impact on the industries in which we invest;	
 
 	•	 	the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives;	
 
 	•	 	competition with other entities and our affiliates for investment opportunities;	
 
 	•	 	the speculative and illiquid nature of our investments;	
 
 	•	 	the use of borrowed money to finance a portion of our investments;	
 
 	•	 	our expected financings and investments;	
 
 	•	 	the adequacy of our cash resources and working capital;	
 
 	•	 	the costs associated with being a publicly traded company;	
 
 	•	 	the loss of key personnel;	
 
 	•	 	the timing, form and amount of any dividend distributions;	
 
 	•	 	the timing of cash flows, if any, from the operations of our portfolio companies;	
 
 	•	 	the ability of our Investment Adviser to locate suitable investments for us and to monitor and administer our investments;	
 
 	•	 	the ability of Carlyle Employee Co. and CELF to attract and retain highly talented professionals that can provide services to our Investment Adviser and administrator;	
 
 	•	 	our ability to maintain our status as a BDC;	
 
 	•	 	our intent to satisfy the requirements of a regulated investment company under Subchapter M of the Code; and	
 
 	•	 	the NFIC Acquisition.	
Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “ Risk Factors ” and elsewhere in this prospectus.
 
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USE OF PROCEEDS
We estimate that the net proceeds we will receive from the sale of 9,000,000 shares of our common stock in this offering will be approximately $164.1 million (or approximately $188.9 million if the underwriters exercise in full their option to purchase additional shares of our common stock), based on an offering price of $19.00 per share (the mid-point of the estimated initial public offering price range as set forth on the cover of this prospectus), after deducting the underwriting discounts and commissions paid by us to the underwriters and including estimated offering expenses of approximately $1.8 million payable by us. Such estimate is subject to change and no assurances can be given that actual expenses will not exceed such amount.
We expect to use 100% of the net proceeds from the closing of this offering to repay a portion of our outstanding debt under our Facilities. As of March 31, 2017, we had $201.1 million and $189.5 million outstanding under our SPV Credit Facility and Credit Facility, respectively, and the average interest rate, excluding fees (such as fees on undrawn amounts and amortization of financing costs), was 3.05% and 3.11%, respectively. The expected maturity date of the SPV Credit Facility and the Credit Facility is May 23, 2022 and March 21, 2022, respectively. After giving effect to the use of proceeds to pay down a portion of the outstanding balance under the SPV Credit Facility and the Credit Facility, approximately $201.1 million and $25.4 million, respectively will remain outstanding under the SPV Credit Facility and the Credit Facility assuming that we choose to solely pay down the Credit Facility. These numbers are subject to change depending on how we ultimately decide to allocate the proceeds from this offering between our two Facilities. We may re-borrow the amount we repay under our Facilities, subject to certain conditions, for general corporate purposes, which include making investments in accordance with our investment objective.
Affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofA Merrill Lynch”), Citigroup Global Markets Inc. (“Citigroup”) and Mizuho Securities USA LLC (“Mizuho”) are lenders under the SPV Credit Facility and affiliates of BofA Merrill Lynch, Morgan Stanley & Co. L.L.C. (“Morgan Stanley”), J.P. Morgan Securities LLC (“J.P. Morgan”) and HSBC Securities (USA) Inc. (“HSBC”) are lenders under the Credit Facility. Accordingly, if we used 100% of the proceeds to repay a portion of our outstanding debt under the SPV Credit Facility or 100% of the proceeds to repay a portion of our outstanding debt under the Credit Facility, it is expected that the highest percentage that could be received by affiliates of BofA Merrill Lynch would be approximately 20% of the net proceeds of the offering, the highest percentage that could be received by affiliates of Morgan Stanley would be approximately 10% of the net proceeds of the offering, the highest percentage that could be received by affiliates of J.P. Morgan would be approximately 18% of the net proceeds of the offering, the highest percentage that could be received by affiliates of Citigroup would be approximately 38% of the net proceeds of the offering, the highest percentage that could be received by affiliates of HSBC would be approximately 18% of the net proceeds of the offering and the highest percentage that could be received by affiliates of Mizuho would be approximately 13% of the net proceeds of the offering, based upon the proposed maximum aggregate offering price set forth on the cover page of this prospectus. These numbers are subject to change depending on how we ultimately decide to allocate the proceeds from this offering between our two Facilities.
 
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DISTRIBUTIONS
To the extent that we have taxable income available, we intend to distribute quarterly dividends to our stockholders. The amount of our dividends, if any, will be determined by our Board of Directors. Any dividends to our stockholders will be declared out of assets legally available for distribution. We anticipate that our distributions will generally be paid from taxable earnings, including interest and capital gains generated by our investment portfolio, and any other income, including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees, that we receive from portfolio companies. However, if we do not generate sufficient taxable earnings during a year, all or part of a distribution may constitute a return of capital. The specific tax characteristics of our dividends and other distributions will be reported to stockholders after the end of each calendar year. See “U.S. Federal Income Tax Considerations” for further information regarding the tax treatment of our distributions and the tax consequences of our retention of net capital gains.
We have elected to be treated, and intend to continue to qualify annually, as a RIC. To maintain our qualification as a RIC, we must, among other things, distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, to our stockholders on an annual basis. In order to avoid certain excise taxes imposed on RICs, we intend to distribute during each calendar year an amount at least equal to the sum of: (1) 98% of our ordinary income for the calendar year; (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending on October 31 of the calendar year; and, (3) any undistributed ordinary income and capital gain net income for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax less certain over-distributions in prior years. In addition, although we currently intend to distribute realized net capital gains (i.e., net long term capital gains in excess of short term capital losses), if any, at least annually, we may in the future decide to retain such capital gains for investment, pay U.S. federal income tax on such amounts at regular corporate tax rates, and elect to treat such gains as deemed distributions to stockholders. As a BDC, we must have at least 200% asset coverage calculated pursuant to the Investment Company Act immediately after each time we issue senior securities. Certain of our credit facilities also require that we maintain asset coverage of at least 200%. As of March 31, 2017, our asset coverage calculated in accordance with the Investment Company Act was 215.03%. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, to the extent that we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings. See “Risk Factors—Risks Related to this Offering and our Common Stock—There is a risk that our stockholders may not receive distributions or that our distributions may not grow over time and a portion of our distributions to you may be a return of capital for U.S. federal income tax purposes.”
Unless you elect to receive your distributions in cash, we intend to make distributions in additional shares of our common stock under our dividend reinvestment plan. Stockholders who “opt out” of our dividend reinvestment plan receive cash distributions. See “Dividend Reinvestment Plan.” We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the Investment Company Act or if distributions are limited by the terms of any of our borrowings.
 
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Our Board of Directors intends to declare a distribution of $0.37 per share for the quarter ending June 30, 2017 to stockholders of record as of June 30, 2017. Shares of common stock offered pursuant to this prospectus will be entitled to receive this distribution, which is expected to be paid on or about July 24, 2017. We anticipate that this distribution will be paid from taxable income generated primarily by interest income earned on our investment portfolio.
The following table summarizes the Company’s dividends declared and payable since inception through May 10, 2017:

Date	  	Record	  	Payment	  	Per Share	 	
Declared(1)	  	Date	  	Date	  	Amount	 	
March 13, 2014	  	March 31, 2014	  	April 14, 2014	  	$	0.19	 	
June 26, 2014	  	June 30, 2014	  	July 14, 2014	  	$	0.27	 	
September 12, 2014	  	September 18, 2014	  	October 9, 2014	  	$	0.44	 	
December 19, 2014	  	December 29, 2014	  	January 26, 2015	  	$	0.35	 	
 	  	 	  	 	  	 	 	 	
Total Dividend for 2014	  	 	  	 	  	$	1.25	 	
March 11, 2015	  	March 13, 2015	  	April 17, 2015	  	$	0.37	 	
June 24, 2015	  	June 30, 2015	  	July 22, 2015	  	$	0.37	 	
September 24, 2015	  	September 24, 2015	  	October 22, 2015	  	$	0.42	 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.40	 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.18	(2) 	
 	  	 	  	 	  	 	 	 	
Total Dividend for 2015	  	 	  	 	  	$	1.74	 	
March 10, 2016	  	March 14, 2016	  	April 22, 2016	  	$	0.40	 	
June 8, 2016	  	June 8, 2016	  	July 22, 2016	  	$	0.40	 	
September 28, 2016	  	September 28, 2016	  	October 24, 2016	  	$	0.40	 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.41	 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.07	(2) 	
 	  	 	  	 	  	 	 	 	
Total Dividend for 2016	  	 	  	 	  	$	1.68	 	
March 20, 2017	  	March 20, 2017	  	April 24, 2017	  	$	0.41	 	

(1)	During the period ended December 31, 2013, no dividend was declared.	
(2)	Represents a special dividend.	
 
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CAPITALIZATION
The following table sets forth (i) our capitalization as of March 31, 2017, (ii) our capitalization on a pro forma basis at March 31, 2017 to give effect to our Capital Calls for $189.5 million (See “Summary—Recent Developments”) and (iii) on an as-adjusted pro forma basis to give effect to this offering (assuming no exercise of the underwriters’ option to purchase additional shares) at an assumed public offering price of $19.00 per share (the mid-point of the estimated initial public offering price range as set forth on the cover of this prospectus) after deducting the underwriting discounts and commissions of $5.1 million (reflecting 50% of the sales load payable by us) and estimated offering expenses of approximately $1.8 million (reflecting the 50% of the estimated offering expenses that are payable by us).
You should read this table together with “Use of Proceeds” and the financial statements and the related notes thereto included elsewhere in this prospectus.

 	  	As of March 31, 2017	 	
 	  	Actual
(in thousands)	 	  	Pro Forma (1)(2)
(in thousands)	 	  	As Adjusted
Pro Forma  (2)(3)
(in thousands)	 	
Assets	  	 	 	 	  	 	 	 	  	 	 	 	
Cash and cash equivalents	  	$	44,874	 	  	$	234,359	 	  	$	234,359	 	
Investments, at fair value	  	 	1,392,545	 	  	 	1,392,545	 	  	 	1,392,545	 	
Other assets	  	 	21,574	 	  	 	21,574	 	  	 	21,574	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total assets	  	$	1,458,993	 	  	$	1,648,478	 	  	$	1,648,478	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Liabilities:	  	 	 	 	  	 	 	 	  	 	 	 	
Secured borrowings(4)	  	$	390,608	 	  	$	390,608	 	  	$	226,538	 	
2015-1 Notes payable, net of unamortized debt issuance costs of $2,100	  	 	270,900	 	  	 	270,900	 	  	 	270,900	 	
Other liabilities	  	 	34,167	 	  	 	34,167	 	  	 	34,167	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total liabilities	  	$	695,675	 	  	$	695,675	 	  	$	531,605	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Net assets:	  	 	 	 	  	 	 	 	  	 	 	 	
Common stock, $0.01 par value; 200,000,000
shares authorized; 41,708,155 shares issued and outstanding, actual; 51,966,283 shares issued and outstanding, pro forma; 60,966,283 shares issued and outstanding, as adjusted pro forma	  	$	417	 	  	$	520	 	  	$	610	 	
Paid-in capital in excess of par value	  	 	799,688	 	  	 	989,070	 	  	 	1,153,050	 	
Pre-IPO offering costs	  	 	(74	) 	  	 	(74	) 	  	 	(74	) 	
Accumulated net investment income (loss), net cumulative dividends of $146,165	  	 	(33,051	) 	  	 	(33,051	) 	  	 	(33,051	) 	
Accumulated net realized gain (loss)	  	 	(1,200	) 	  	 	(1,200	) 	  	 	(1,200	) 	
Accumulated net unrealized appreciation (depreciation)	  	 	(2,462	) 	  	 	(2,462	) 	  	 	(2,462	) 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total net assets	  	 	763,318	 	  	 	952,803	 	  	 	1,116,873	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total liabilities and net assets	  	$	1,458,993	 	  	$	1,648,478	 	  	$	1,648,478	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Net asset value per share	  	$	18.30	 	  	$	18.34	 	  	 	18.32	 	

(1)	Does not reflect adjustments for the NFIC Acquisition, and we cannot assure you that the NFIC Acquisition will be completed. If the NFIC Acquisition is completed, each share of NFIC common stock issued and outstanding immediately prior to the effective time of the NFIC Acquisition will be converted into the	
 
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 	right to receive a mixture of cash and our shares from us, in accordance with the elections of individual NFIC stockholders. Assuming that all NFIC stockholders elect to receive 95% of the Merger Consideration in cash and based on the NAV for both companies, assuming that the valuation time occurred on March 31, 2017, we would pay approximately $146.5 million in cash and issue approximately 421,320 shares to the NFIC stockholders upon the closing of the NFIC Acquisition. This information is presented for illustrative purposes only and does not necessarily indicate the number of shares of common stock issued and cash that will be paid in connection with the NFIC Acquisition. As of March 31, 2017, NFIC had total assets of $274.0 million, with $267.3 million in investments at fair value, and total liabilities of $118.9 million. If the NFIC Acquisition is consummated, all of the assets and liabilities of NFIC immediately before the NFIC Acquisition will become our assets and liabilities, as the surviving entity, immediately after the NFIC Acquisition.	
(2)	Does not reflect investment activity since March 31, 2017 and related deployment of Capital Calls. See “Summary—Recent Developments.”	
(3)	The above table reflects indebtedness outstanding as of March 31, 2017. However, as of May 25, 2017, our total outstanding indebtedness was approximately $745.3 million. The net proceeds from this offering are expected to be used to pay down outstanding indebtedness.	
(4)	Represents the outstanding amount under the Facilities.	
 
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DILUTION
The dilution to investors in this offering is represented by the difference between the offering price per share of our common stock and the pro forma NAV per share of our common stock after this offering. NAV per share is determined by dividing our NAV, which is our total tangible assets less total liabilities, by the number of outstanding shares of common stock.
As of March 31, 2017, we had 41,708,155 shares of common stock outstanding and our NAV was $763.3 million, or approximately $18.30 per share. After giving effect to the Capital Calls for $189.5 million, our pro forma net asset value before completion of this offering as of March 31, 2017 would have been $952.8 million or $18.34 per share. We refer to these items as the “as-adjusted” items in the table below. The as-adjusted items do not include adjustments for the NFIC Acquisition.
After giving effect to the sale of the shares of common stock to be sold in this offering (at the mid-point of the estimated initial public offering price range as set forth on the cover of this prospectus), the Capital Calls, and the deduction of discounts and estimated offering expenses, our as-adjusted NAV as of March 31, 2017 would be approximately $1,116.9 million, or $18.32 per share, representing an immediate dilution of $0.68 per share, or 3.58%, to shares sold in this offering. The following illustration assumes no exercise of the underwriters’ option to purchase additional shares. If the underwriters’ option to purchase additional shares is exercised in full, there would be an immediate dilution to the NAV of $0.68 per share, or 3.58%, to the shares sold in this offering.
The following table illustrates the dilution to the shares on a per share basis:

Assumed initial public offering price per share (the mid-point of the estimated initial public offering price range as set forth on the cover of this prospectus)	  	$	19.00	 	
March 31, 2017 NAV per share	  	$	18.30	 	
Increase attributable to as-adjusted items described above	  	$	0.04	 	
 	  	 	 	 	
As-adjusted NAV per share without giving effect to this offering	  	$	18.34	 	
Decrease in NAV per share immediately after this offering	  	$	0.02	 	
 	  	 	 	 	
As-adjusted NAV per share immediately after this offering	  	$	18.32	 	
Dilution per share to stockholders participating in this offering (without exercise of the option to purchase additional shares)	  	$	0.68	 	
 
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The following table summarizes, as of March 31, 2017, on the as-adjusted basis as described above, the total cash consideration paid to us and the average price per share paid by (i) our existing stockholders prior to this offering, (ii) by certain of our existing investors in the Capital Calls at the per share price of $18.47 per share, and (iii) by the new investors in this offering at an initial public offering price of $         per share and prior to deducting the estimated underwriting discount and offering expenses (without exercise of the underwriters’ option to purchase additional shares). The table does not reflect adjustments for the NFIC Acquisition, and we cannot assure you that the NFIC Acquisition will be completed. If the NFIC Acquisition is completed, each share of NFIC common stock issued and outstanding immediately prior to the effective time of the NFIC Acquisition will be converted into the right to receive a mixture of cash and our shares from us, in accordance with the elections of individual NFIC stockholders. Assuming that all NFIC stockholders elect to receive 95% of the Merger Consideration in cash and based on the NAV for both companies, assuming that the valuation time occurred on March 31, 2017, we would pay approximately $146.5 million in cash and issue approximately 421,320 shares to the NFIC stockholders upon the closing of the NFIC Acquisition. This information is presented for illustrative purposes only and does not necessarily indicate the number of shares of common stock issued and cash that will be paid in connection with the NFIC Acquisition.

 	  	Shares	 	  	 	 	  	Total
Consideration
(in thousands)	 	  	Average
Price
Per
Share	 	
 	  	Number	 	  	%	 	  	Amount	 	  	%	 	  	 	 	
Shares outstanding as of March 31, 2017	  	 	41,708,155	 	  	 	%	 	  	$	763,318	 	  	 	%	 	  	$	18.30	 	
Shares sold in the Capital Calls	  	 	10,258,128	 	  	 	%	 	  	$	189,485	 	  	 	%	 	  	$	18.47	 	
Shares to be sold in this offering	  	 	9,000,000	 	  	 	%	 	  	$	164,070	 	  	 	%	 	  	$	19.00	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	60,966,283	 	  	 	%	 	  	$	1,116,873	 	  	 	%	 	  	 	18.32	 	
The as-adjusted NAV upon completion of this offering is calculated as follows (without exercise of the underwriters’ option to purchase additional shares):

Numerator (in thousands):	  	 	 	 	
NAV	  	$	952,803	 	
Assumed proceeds from this offering (after deduction of sales load and offering expenses payable by us)	  	 	164,070	 	
 	  	 	 	 	
NAV upon completion of this offering	  	$	1,116,873	 	
 	 	
Denominator:	  	 	 	 	
Shares outstanding as of March 31, 2017	  	 	41,708,155	 	
Shares sold in the Capital Calls	  	 	10,258,128	 	
Shares to be sold in this offering	  	 	9,000,000	 	
Total shares outstanding upon completion of this offering	  	 	60,966,283	 	
 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Dollar amounts are in thousands, except per share data, unless otherwise indicated)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Financial Data and Other Information” and our consolidated financial statements and related notes appearing elsewhere in this prospectus. The information in this section contains forward-looking information that involves risks and uncertainties. Please see “Risk Factors” and “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with this discussion and analysis. Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed under “Risk Factors” and “Forward-Looking Statements” appearing elsewhere in this prospectus.
OVERVIEW
We are a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. We have elected to be regulated as a BDC under the Investment Company Act. We have elected to be treated, and intend to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Code.
Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which we define as companies with approximately $10 million to $100 million of EBITDA. We seek to achieve our investment objective primarily through direct originations of Middle Market Senior Loans, with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). We generally make Middle Market Senior Loans to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, we expect that between 70% and 80% of the value of our assets will be invested in Middle Market Senior Loans. We expect that the composition of our portfolio will change over time given our Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which we are operating.
We are externally managed by our Investment Adviser, an investment adviser registered under the Advisers Act. Prior to this offering, our Investment Adviser waived its right to receive one-third (0.50%) of the 1.50% base management fee. The fee waiver was scheduled to terminate upon consummation of this offering. However, our Investment Adviser has agreed to continue the fee waiver until the completion of the first full quarter after the consummation of this offering. Thus the management fee we pay to our Investment Adviser will be effectively higher after the first full quarter period following this offering. If the management fee waiver had not been in place for the three months ended March 31, 2017 and the years ended December 31, 2016 and 2015, our management fees would have increased by $1,708, $6,180 and $4,454, respectively.
Our Administrator provides the administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle.
In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including our Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013.
KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Investments
Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of investments we make.
 
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Revenue
We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.
Expenses
Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to an investment advisory agreement (the “Investment Advisory Agreement”) between us and our Investment Adviser; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under an administration agreement (the “Administration Agreement”) between us and our Administrator; and (iii) other operating expenses as detailed below:
 
 	•	 	the costs associated with the private offering of our common stock prior to this offering;	
 
 	•	 	the costs of this offering and any other offerings of our common stock and other securities, if any;	
 
 	•	 	calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);	
 
 	•	 	expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;	
 
 	•	 	the base management fee and any incentive fee payable under our Investment Advisory Agreement;	
 
 	•	 	certain costs and expenses relating to distributions paid on our shares;	
 
 	•	 	administration fees payable under our Administration Agreement and sub-administration agreements, including related expenses;	
 
 	•	 	debt service and other costs of borrowings or other financing arrangements;	
 
 	•	 	the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;	
 
 	•	 	amounts payable to third parties relating to, or associated with, making or holding investments;	
 
 	•	 	the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;	
 
 	•	 	transfer agent and custodial fees;	
 
 	•	 	costs of hedging;	
 
 	•	 	commissions and other compensation payable to brokers or dealers;	
 
 	•	 	federal and state registration fees;	
 
 	•	 	any U.S. federal, state and local taxes, including any excise taxes;	
 
 	•	 	independent director fees and expenses;	
 
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 	•	 	costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other regulatory bodies), and other reporting and compliance costs, including registration and listing fees, and the compensation of professionals responsible for the preparation or review of the foregoing;	
 
 	•	 	the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings and the compensation of investor relations personnel responsible for the preparation of the foregoing and related matters;	
 
 	•	 	the costs of specialty and custom software for monitoring risk, compliance and overall portfolio, including any development costs incurred prior to the filing of our election to be regulated as a BDC;	
 
 	•	 	our fidelity bond;	
 
 	•	 	directors and officers/errors and omissions liability insurance, and any other insurance premiums;	
 
 	•	 	indemnification payments;	
 
 	•	 	direct fees and expenses associated with independent audits, agency, consulting and legal costs; and	
 
 	•	 	all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.	
We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.
PORTFOLIO AND INVESTMENT ACTIVITY
As of March 31, 2017, the fair value of our investments was approximately $1,392,545, comprised of 94 investments in 82 portfolio companies/structured finance obligations/investment fund across 30 industries with 54 sponsors. As of December 31, 2016, the fair value of our investments was approximately $1,422,759, comprised of 98 investments in 86 portfolio companies/structured finance obligations/investment fund across 29 industries with 57 sponsors. As of December 31, 2015, the fair value of our investments was approximately $1,052,666, comprised of 85 portfolio companies/structured finance obligations. The fair value of our investments was approximately $698,662, comprised of 72 portfolio companies/structured finance obligations as of December 31, 2014.
Based on fair value as of March 31, 2017, our portfolio consisted of approximately 89.6% in secured debt (78.0% in first lien debt (including 12.1% in first lien/last out loans) and 11.6% in second lien debt), 9.6% in Credit Fund, 0.2% in structured finance obligations and 0.6% in equity investments. Based on fair value as of March 31, 2017, approximately 1% of our debt portfolio was invested in debt bearing a fixed interest rate and approximately 99% of our debt portfolio was invested in debt bearing a floating interest rate with an interest rate floor.
Based on fair value as of December 31, 2016, our portfolio consisted of approximately 92.2% in secured debt (80.1% in first lien debt (including 12.9% in first lien/last out loans) and 12.1% in second lien debt), 7% in Credit Fund, 0.37% in structured finance obligations and 0.46% in equity investments. Based on fair value as of December 31, 2016, approximately 1% of our debt portfolio was invested in debt bearing a fixed interest rate and approximately 99% of our debt portfolio was invested in debt bearing a floating interest rate with an interest rate floor.
Based on fair value as of December 31, 2015, our portfolio consisted of approximately 95.5% in secured debt (75.5% in first lien debt (including 11.7% in first lien/last out loans) and 20.0% in second lien debt), 4.3% in structured finance obligations and 0.2% in equity investments. Based on fair value as of December 31, 2015, approximately 3% of our debt portfolio was invested in debt bearing a fixed interest rate and approximately 97% of our debt portfolio was invested in debt bearing a floating interest rate with an interest rate floor.
 
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Our investment activity for the three month periods ended March 31, 2017 and 2016 and the years ended December 31, 2016, 2015 and 2014 is presented below (information presented herein is at amortized cost unless otherwise indicated):

 	  	For the three month periods ended	 	 	For the years ended December 31,	 	
 	  	    March 31,    
2017	 	 	    March 31,    
2016	 	 	December 31,
2016	 	 	December 31,
2015	 	 	December 31,
2014	 	
Investments:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments, beginning of period	  	$	 1,429,981	 	 	$	 1,079,720	 	 	$	1,079,720	 	 	$	707,701	 	 	$	213,128	 	
New investments purchased	  	 	152,235	 	 	 	132,291	 	 	 	755,654	 	 	 	597,811	 	 	 	614,622	 	
Net accretion of discount on investments	  	 	3,576	 	 	 	611	 	 	 	5,605	 	 	 	3,035	 	 	 	1,108	 	
Net realized gain (loss) on investments	  	 	(7,694	) 	 	 	(3,577	) 	 	 	(9,644	) 	 	 	1,164	 	 	 	72	 	
Investments sold or repaid	  	 	(183,091	) 	 	 	(26,159	) 	 	 	(401,354	) 	 	 	(229,991	) 	 	 	(121,229	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments, end of period	  	$	1,395,007	 	 	$	1,182,886	 	 	$	1,429,981	 	 	$	1,079,720	 	 	$	707,701	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Principal amount of investments funded:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt	  	$	 94,929	 	 	$	 100,556	 	 	$	604,514	 	 	$	481,510	 	 	$	457,212	 	
Second Lien Debt	  	 	1,800	 	 	 	34,000	 	 	 	38,950	 	 	 	115,250	 	 	 	80,790	 	
Structured Finance Obligations	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	15,760	 	 	 	115,638	 	
Equity Investments	  	 	1,552	 	 	 	—  	 	 	 	2,856	 	 	 	1,507	 	 	 	—  	 	
Investment Fund	  	 	56,160	 	 	 	1	 	 	 	119,785	 	 	 	—  	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	 154,441	 	 	$	134,557	 	 	$	766,105	 	 	$	614,027	 	 	$	653,640	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Principal amount of investments sold or repaid:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt	  	$	 (154,003	) 	 	$	(5,629	) 	 	$	(254,921	) 	 	$	(191,718	) 	 	$	(77,040	) 	
Second Lien Debt	  	 	(13,000	) 	 	 	(11,000	) 	 	 	(83,279	) 	 	 	(8,000	) 	 	 	(9,500	) 	
Structured Finance Obligations	  	 	(5,000	) 	 	 	(14,200	) 	 	 	(81,442	) 	 	 	(39,475	) 	 	 	(31,363	) 	
Investment Fund	  	 	(22,000	) 	 	 	—  	 	 	 	(22,400	) 	 	 	—  	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	 (194,003	) 	 	$	 (30,829	) 	 	$	(442,042	) 	 	$	(239,193	) 	 	$	(117,903	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Number of new funded investments	  	 	17	 	 	 	11	 	 	 	62	 	 	 	46	 	 	 	58	 	
Average new funded investment amount	  	$	9,085	 	 	$	12,032	 	 	$	12,188	 	 	$	12,996	 	 	$	10,597	 	
Percentage of new funded debt investments at floating interest rates	  	 	91	% 	 	 	100	% 	 	 	100	% 	 	 	98	% 	 	 	98	% 	
Percentage of new funded debt investments at fixed interest rates	  	 	9	% 	 	 	0	% 	 	 	0	% 	 	 	2	% 	 	 	2	% 	
As of March 31, 2017 and December 31, 2016, investments consisted of the following:

 	  	March 31, 2017	 	  	December 31, 2016	 	
 	  	Amortized
Cost	 	  	Fair Value	 	  	Amortized
Cost	 	  	Fair Value	 	
First Lien Debt	  	$	 1,088,396	 	  	$	 1,085,554	 	  	$	1,145,326	 	  	$	1,139,548	 	
Second Lien Debt	  	 	161,912	 	  	 	161,643	 	  	 	172,960	 	  	 	171,864	 	
Structured Finance Obligations	  	 	6,582	 	  	 	2,776	 	  	 	9,239	 	  	 	5,216	 	
Equity Investments	  	 	6,572	 	  	 	8,451	 	  	 	5,071	 	  	 	6,474	 	
Investment Fund	  	 	131,545	 	  	 	134,121	 	  	 	97,385	 	  	 	99,657	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,395,007	 	  	$	1,392,545	 	  	$	1,429,981	 	  	$	1,422,759	 	

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The weighted average yields (1) for our first and second lien debt, based on the amortized cost and fair value as of March 31, 2017 and December 31, 2016, were as follows:

 	  	March 31, 2017	 	 	December 31, 2016	 	
 	  	Amortized
Cost	 	 	Fair Value	 	 	Amortized
Cost	 	 	Fair Value	 	
First Lien Debt (excluding First Lien/Last Out)	  	 	7.35	% 	 	 	7.37	% 	 	 	7.09	% 	 	 	7.15	% 	
First Lien/Last Out Unitranche	  	 	12.00	% 	 	 	11.99	% 	 	 	12.33	% 	 	 	12.12	% 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	  	 	8.07	% 	 	 	8.09	% 	 	 	7.92	% 	 	 	7.96	% 	
Second Lien Debt	  	 	10.07	% 	 	 	10.09	% 	 	 	9.97	% 	 	 	10.04	% 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First and Second Lien Debt Total	  	 	8.33	% 	 	 	8.35	% 	 	 	8.19	% 	 	 	8.23	% 	

(1)	Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of March 31, 2017 and December 31, 2016. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.	
Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first and second lien debt investments as measured on an amortized cost basis, increased from 8.19% to 8.33% from December 31, 2016 to March 31, 2017. The increase in weighted average yields was mainly due to the increase in 90-day LIBOR from 1.00% to 1.15% and from originations of new investments with higher weighted average yields of 9.22% and sales/repayments of existing investments with lower weighted average yields of 8.45%.
The following table summarizes the fair value of our performing and non-performing investments as of March 31, 2017 and December 31, 2016.

 	  	March 31, 2017	 	 	December 31, 2016	 	
 	  	Fair Value	 	  	Percentage	 	 	Fair Value	 	  	Percentage	 	
Performing	  	$	 1,383,687	 	  	 	99.36	% 	 	$	1,415,131	 	  	 	99.46	% 	
Non-accrual(1)	  	 	8,858	 	  	 	0.64	% 	 	 	7,628	 	  	 	0.54	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	 1,392,545	 	  	 	100.00	% 	 	$	1,422,759	 	  	 	100.00	% 	

(1)	Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest has been paid current and, in management’s judgment, likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. See “—Critical Accounting Policies—Revenue Recognition.”	
See the Consolidated Schedules of Investments as of March 31, 2017 and December 31, 2016 in our consolidated financial statements for more information on these investments, including a list of companies and type and amount of investments.
 
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As part of the monitoring process, our Investment Adviser has developed risk policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”:
Internal Risk Ratings Definitions

Rating	  	Definition	
 	 	
1	  	Performing—Low Risk: Borrower is operating more than 10% ahead of the base case.	
 	 	
2	  	Performing—Stable Risk: Borrower is operating within 10% of the base case (above or below). This is the initial rating assigned to all new borrowers.	
 	 	
3	  	Performing—Management Notice: Borrower is operating more than 10% below the base case. A financial covenant default may have occurred, but there is a low risk of payment default.	
 	 	
4	  	Watch List: Borrower is operating more than 20% below the base case and there is a high risk of covenant default, or it may have already occurred. Payments are current although subject to greater uncertainty, and there is moderate to high risk of payment default.	
 	 	
5	  	Watch List—Possible Loss: Borrower is operating more than 30% below the base case. At the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may have occurred. Loss of principal is possible.	
 	 	
6	  	Watch List—Probable Loss: Borrower is operating more than 40% below the base case, and at the current level of operations and financial condition, the borrower does not have the ability to service and ultimately repay or refinance all outstanding debt on current terms. Payment default is very likely or may have already occurred. Additionally, the prospects for improvement in the borrower’s situation are sufficiently negative that impairment of some or all principal is probable.	
Our Investment Adviser’s risk rating model is based on evaluating portfolio company performance in comparison to the base case when considering certain credit metrics including, but not limited to, adjusted EBITDA and net senior leverage as well as specific events including, but not limited to, default and impairment.
Our Investment Adviser monitors and, when appropriate, changes the investment ratings assigned to each debt investment in our portfolio. In connection with our quarterly valuation process, our Investment Adviser reviews our investment ratings on a regular basis. The following table summarizes the Internal Risk Ratings as of March 31, 2017 and December 31, 2016:

 	  	March 31, 2017	 	 	December 31, 2016	 	
 	  	Fair Value	 	  	% of
Fair
Value	 	 	Fair Value	 	  	% of
Fair
Value	 	
(dollar amounts in millions)	  	 	 	  	 	 	 	 	 	  	 	 	
Internal Risk Rating 1	  	$	27.5	 	  	 	2.20	% 	 	$	59.3	 	  	 	4.52	% 	
Internal Risk Rating 2	  	 	1,023.2	 	  	 	82.05	 	 	 	1,055.7	 	  	 	80.50	 	
Internal Risk Rating 3	  	 	93.7	 	  	 	7.51	 	 	 	100.9	 	  	 	7.70	 	
Internal Risk Rating 4	  	 	89.4	 	  	 	7.17	 	 	 	75.7	 	  	 	5.77	 	
Internal Risk Rating 5	  	 	13.4	 	  	 	1.07	 	 	 	12.2	 	  	 	0.93	 	
Internal Risk Rating 6	  	 	—  	 	  	 	—  	 	 	 	7.6	 	  	 	0.58	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	 1,247.2	 	  	 	100.00	% 	 	$	1,311.4	 	  	 	100.00	% 	

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As of March 31, 2017 and December 31, 2016, the weighted average Internal Risk Rating of our debt investment portfolio was 2.2. As of March 31, 2017, nine of our debt investments, with an aggregate fair value of $102.8 million, were assigned an Internal Risk Rating of 4-6. As of December 31, 2016, 8 of our debt investments, with an aggregate fair value of $95.5 million, were assigned an Internal Risk Rating of 4-6. As of March 31, 2017 and December 31, 2016, one first lien debt investment in the portfolio with a fair value of $8.9 million and $7.6 million, respectively, was on non-accrual status, which represented approximately 0.71% and 0.58%, respectively, of total first and second lien investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of March 31, 2017 and December 31, 2016. During the period ended March 31, 2017, one investment with fair value of $9.8 million was downgraded to an Internal Risk Rating of 4 due to changes in financial condition and performance of the respective portfolio company; the other changes in Internal Risk Rating 4 were due to immaterial investments. Effective January 31, 2017, TwentyEighty, Inc. (fka Miller Heiman, Inc.) completed a restructuring whereby the first lien debt held by us, which carried an Internal Risk Rating of 6 as of December 31, 2016, was converted into new term loans and equity. As of March 31, 2017, the fair value of such new term loans with an Internal Risk Rating of 3 was $2.8 million, an Internal Risk Rating of 4 was $3.8 million, and an Internal Risk Rating of 5 was $2.3 million.
CONSOLIDATED RESULTS OF OPERATIONS
For the three month periods ended March 31, 2017 and 2016
The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.
Investment Income
Investment income for the three month periods ended March 31, 2017 and 2016 were as follows:

 	  	For the three month
periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
First Lien Debt	  	$	26,701	 	  	$	16,198	 	
Second Lien Debt	  	 	4,169	 	  	 	6,424	 	
Structured Finance Obligations	  	 	—  	 	  	 	485	 	
Equity Investments	  	 	1	 	  	 	—  	 	
Investment Fund	  	 	3,209	 	  	 	—  	 	
Cash	  	 	19	 	  	 	3	 	
 	  	 	 	 	  	 	 	 	
Total investment income	  	$	34,099	 	  	$	23,110	 	
 	  	 	 	 	  	 	 	 	
The increase in investment income for the three month period ended March 31, 2017 from the comparable period in 2016 was primarily driven by our increasing invested balance, increased fees and other income from amendments and prepayments, and interest and dividend income from Credit Fund. As of March 31, 2017, the size of our portfolio increased to $1,395,007 from $1,182,886 as of March 31, 2016, at amortized cost, and total principal amount of investments outstanding increased to $1,427,572 from $1,246,092 as of March 31, 2016. As of March 31, 2017, the weighted average yield of our first and second lien debt increased to 8.33% from 8.14% as of March 31, 2016, on amortized cost.
Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of March 31, 2017, one first lien debt investment in the portfolio was non-performing. The fair value of the loan in the portfolio on non-accrual status was $8,858, which represents approximately 0.71% of total first and second lien investments at fair value. The remaining first and
 
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second lien debt investments were performing and current on their interest payments as of March 31, 2017. All first and second lien debt investments were performing and current on their interest payments as of March 31, 2016. Interest income from structured finance obligations is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows. The effective yield is updated at least quarterly based on payments received and expected future payments. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds that issued the structured finance obligations. These uncertainties are difficult to predict and are subject to future events that could have impacted our estimates if the information was known at the time of such estimates. As a result, actual results may differ significantly from these estimates.
For the three month periods ended March 31, 2017 and 2016, we earned $2,536 and $999, respectively, in other income. The increase in other income for the three month period ended March 31, 2017 from March 31, 2016 was primarily due to higher syndication fees and prepayment fees resulting from full paydowns on select investments.
Our total dividend and interest income from investments in Credit Fund totaled $3,209 for the three month period ended March 31, 2017. We did not receive any dividend or interest income from investments in Credit Fund for the three month period ended March 31, 2016. We made our first investment in Credit Fund in February 2016.
Net investment income for the three month periods ended March 31, 2017 and 2016 was as follows:

 	  	For the three month
periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Total investment income	  	$	34,099	 	  	$	23,110	 	
Net expenses	  	 	(14,992	) 	  	 	(11,150	) 	
 	  	 	 	 	  	 	 	 	
Net investment income (loss)	  	$	19,107	 	  	$	11,960	 	
 	  	 	 	 	  	 	 	 	
Expenses

 	  	For the three month
periods ended	 	
 	  	March 31,
2017	 	  	March 31,
2016	 	
Base management fees	  	$	5,125	 	  	$	4,140	 	
Incentive fees	  	 	4,777	 	  	 	2,990	 	
Professional fees	  	 	443	 	  	 	431	 	
Administrative service fees	  	 	173	 	  	 	148	 	
Interest expense	  	 	5,034	 	  	 	3,599	 	
Credit facility fees	  	 	503	 	  	 	599	 	
Directors’ fees and expenses	  	 	103	 	  	 	120	 	
Other general and administrative	  	 	542	 	  	 	503	 	
 	  	 	 	 	  	 	 	 	
Total expenses	  	 	16,700	 	  	 	12,530	 	
Waiver of base management fees	  	 	(1,708	) 	  	 	(1,380	) 	
 	  	 	 	 	  	 	 	 	
Net expenses	  	$	14,992	 	  	$	11,150	 	

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Interest expense and credit facility fees for the three month periods ended March 31, 2017 and 2016 were comprised of the following:

 	  	For the three month
periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Interest expense	  	$	5,034	 	  	$	3,599	 	
Facility unused commitment fee	  	 	292	 	  	 	361	 	
Amortization of deferred financing costs	  	 	181	 	  	 	213	 	
Other fees	  	 	30	 	  	 	25	 	
 	  	 	 	 	  	 	 	 	
Total interest expense and credit facility fees	  	$	5,537	 	  	$	4,198	 	
 	  	 	 	 	  	 	 	 	
Cash paid for interest expense	  	$	4,952	 	  	$	3,227	 	
The increase in interest expense for the three month period ended March 31, 2017 compared to the comparable period in 2016 was driven by increased drawings under the Facilities related to increased deployment of capital for investments. For the three month period ended March 31, 2017, the average interest rate increased to 3.12% from 2.70% for the comparable period in 2016, and average principal debt outstanding increased to $649,532 from $530,170 for the comparable period in 2016.
The increase in base management fees (and related waiver of base management fees) and incentive fees related to pre-incentive fee net investment income for the three month period ended March 31, 2017 from the comparable period in 2016 were driven by our deployment of capital and increasing invested balance. For the three month periods ended March 31, 2017 and 2016, base management fees were $3,417 and $2,760, respectively, (net the waiver of $1,708 and $1,380, respectively), incentive fees related to pre-incentive fee net investment income were $4,777 and $2,990, respectively, and there were no incentive fees related to realized capital gains. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“US GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of us. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments
During the three months ended March 31, 2017 and 2016, we had realized gains on 4 and 3 investments, respectively, totaling approximately $186 and $11, respectively, which was offset by realized losses on 3 and 3 investments, respectively, totaling approximately $7,880 and $3,588, respectively. During the three month periods ended March 31, 2017 and 2016, we had a change in unrealized appreciation on 57 and 34 investments, respectively, totaling approximately $17,492 and $8,051, respectively, which was offset by a change in unrealized depreciation on 41 and 67 investments, respectively, totaling approximately $12,732 and $19,142, respectively. In particular, effective January 31, 2017, TwentyEighty, Inc. (fka Miller Heiman, Inc.) completed a restructuring whereby the first lien debt held by us was converted into new term loans and equity. As a result, $10,943 of unrealized depreciation was reversed and we realized a loss of $7,738 during the period.
 
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Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three month periods ended March 31, 2017 and 2016 were as follows:

 	  	For the three month
periods ended	 	
 	  	March 31, 2017	 	 	March 31, 2016	 	
Net realized gain (loss) on investments	  	$	(7,694	) 	 	$	(3,577	) 	
Net change in unrealized appreciation (depreciation) on investments	  	 	4,760	 	 	 	(11,091	) 	
 	  	 	 	 	 	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	$	(2,934	) 	 	$	(14,668	) 	
 	  	 	 	 	 	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three month periods ended March 31, 2017 and 2016 were as follows:

 	  	For the three month periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Type	  	Net realized
gain (loss)	 	 	Net change in
unrealized
appreciation
(depreciation)	 	  	Net realized
gain (loss)	 	 	Net change in
unrealized
appreciation
(depreciation)	 	
First Lien Debt	  	$	(7,552	) 	 	$	2,935	 	  	$	4	 	 	$	(5,166	) 	
Second Lien Debt	  	 	(3	) 	 	 	827	 	  	 	—  	 	 	 	(5,256	) 	
Structured Finance Obligations	  	 	(139	) 	 	 	217	 	  	 	(3,581	) 	 	 	(1,040	) 	
Equity Investments	  	 	—  	 	 	 	477	 	  	 	—  	 	 	 	371	 	
Investment Fund	  	 	—  	 	 	 	304	 	  	 	—  	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Total	  	$	(7,694	) 	 	$	4,760	 	  	$	(3,577	) 	 	$	(11,091	) 	
 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Net change in unrealized depreciation in our investments for the three months ended March 31, 2017 compared to the comparable period in 2016 was primarily due to changes in various inputs utilized under our valuation methodology, including, but not limited to, market spreads, leverage multiples and borrower ratings.
For the years ended December 31, 2016, 2015 and 2014
The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.
Investment Income
Investment income for the years ended December 31, 2016, 2015 and 2014, was as follows:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Investment income:	  	 	 	 	  	 	 	 	  	 	 	 	
First Lien Debt	  	$	83,713	 	  	$	45,654	 	  	$	18,028	 	
Second Lien Debt	  	 	23,190	 	  	 	15,357	 	  	 	5,716	 	
Structured Finance Obligations	  	 	887	 	  	 	8,160	 	  	 	9,233	 	
Equity Investments	  	 	13	 	  	 	12	 	  	 	—  	 	
Investment Fund	  	 	3,140	 	  	 	—  	 	  	 	—  	 	
Cash	  	 	28	 	  	 	7	 	  	 	7	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total investment income	  	$	110,971	 	  	$	69,190	 	  	$	32,984	 	

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The increase in investment income for the year ended December 31, 2016 from the comparable period in 2015 was primarily driven by our deployment of capital, increasing invested balance, increased fees and other income from syndications, amendments and prepayments, and dividends declared by Credit Fund. The size of our portfolio increased to $1,429,981 as of December 31, 2016 from $1,079,720 as of December 31, 2015, at amortized cost, and total principal amount of investments outstanding increased to $1,467,133 as of December 31, 2016 from $1,142,364 as of December 31, 2015. The increase in interest income was also due to the increase in the weighted average yield. As of December 31, 2016, the weighted average yield of our first and second lien debt increased to 8.19% from 7.93% as of December 31, 2015, on amortized cost.
The increase in investment income for the year ended December 31, 2015 from the comparable period in 2014 was primarily driven by our deployment of capital and increasing invested balance. The size of our portfolio increased to $1,079,720 as of December 31, 2015 from $707,701 as of December 31, 2014, at amortized cost, and total principal amount of investments outstanding increased to $1,142,364 as of December 31, 2015 from $767,530 as of December 31, 2014. The increase in interest income was also due to the increase in the weighted average yield. As of December 31, 2015, the weighted average yield of our first and second lien debt increased to 7.93% from 6.70% as of December 31, 2014, on amortized cost.
Interest income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of December 31, 2016, one first lien debt investment in the portfolio was non-performing. The fair value of the loan in the portfolio on non-accrual status was $7,628, which represents approximately 0.5% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2016 and for the year then ended. As of December 31, 2015 and 2014 and for the years then ended, all of our first and second lien debt investments were performing and current on their interest payments. Interest income from structured finance obligations is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows. The effective yield is updated periodically based on payments received and expected future payments. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted our estimates if the information was known at the time. As a result, actual results may differ significantly from these estimates.
For the years ended December 31, 2016, 2015 and 2014, we earned $6,635, $834 and $244, respectively, in other income. The increase in other income for the year ended December 31, 2016 from December 31, 2015 was primarily due to higher syndication and prepayment fees resulting from partial and/or full paydowns on select investments.
Our total dividend and interest income from investments in Credit Fund totaled $3,140 for the year ended December 31, 2016. We made our first investment in Credit Fund in February 2016.
Net investment income (loss) for the years ended December 31, 2016, 2015 and 2014 was as follows:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Total investment income	  	$	110,971	 	  	$	69,190	 	  	$	32,984	 	
Net expenses	  	 	(51,350	) 	  	 	(33,666	) 	  	 	(18,724	) 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Net investment income (loss)	  	$	59,621	 	  	$	35,524	 	  	$	14,260	 	

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Expenses

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Base management fees	  	$	18,539	 	  	$	13,361	 	  	$	6,559	 	
Incentive fees	  	 	14,905	 	  	 	8,881	 	  	 	3,578	 	
Professional fees	  	 	2,103	 	  	 	1,845	 	  	 	2,169	 	
Administrative service fees	  	 	703	 	  	 	595	 	  	 	626	 	
Interest expense	  	 	16,462	 	  	 	9,582	 	  	 	3,648	 	
Credit facility fees	  	 	2,573	 	  	 	1,898	 	  	 	3,052	 	
Directors’ fees and expenses	  	 	553	 	  	 	419	 	  	 	395	 	
Other general and administrative	  	 	1,692	 	  	 	1,539	 	  	 	883	 	
Waiver of base management fees	  	 	(6,180	) 	  	 	(4,454	) 	  	 	(2,186	) 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Net expenses	  	$	51,350	 	  	$	33,666	 	  	$	18,724	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Interest expense and credit facility fees for the years ended December 31, 2016, 2015 and 2014 were comprised of the following:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Interest expense	  	$	16,462	 	  	$	9,582	 	  	$	3,648	 	
Facility unused commitment fee	  	 	1,253	 	  	 	847	 	  	 	1,129	 	
Amortization of deferred financing costs	  	 	1,213	 	  	 	945	 	  	 	1,820	 	
Other fees	  	 	107	 	  	 	106	 	  	 	103	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total interest expense and credit facility fees	  	$	19,035	 	  	$	11,480	 	  	$	6,700	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Cash paid for interest expense	  	$	15,267	 	  	$	8,083	 	  	$	2,882	 	
The increase in interest expense for the year ended December 31, 2016 compared to the comparable period in 2015 was driven by increased drawings under the Facilities related to increased deployment of capital for investments, and additional debt issued through the securitization in the form of the 2015-1 Notes. For the year ended December 31, 2016, the average interest rate increased to 2.81% from 2.31% for the comparable period in 2015, and average principal debt outstanding increased to $580,734 from $406,638 for the comparable period in 2015.
The increase in interest expense for the year ended December 31, 2015 compared to the comparable period in 2014 was driven by increased drawings under the Facilities related to increased deployment of capital for investments. For the year ended December 31, 2015, the average interest rate increased to 2.31% from 2.18% for the comparable period in 2014, and average principal debt outstanding increased to $406,638 from $164,980 for the comparable period in 2014.
The increase in base management fees (and related waiver of base management fees) and incentive fees related to pre-incentive fee net investment income for the year ended December 31, 2016 from the comparable period in 2015 and for the year ended December 31, 2015 from the comparable period in 2014 was driven by our deployment of capital and our increasing invested balance. For the years ended December 31, 2016, 2015 and 2014, base management fees were $12,359, $8,907 and $4,373, respectively (net of waiver of $6,180, $4,454 and $2,186, respectively); incentive fees related to pre-incentive fee net investment income were $14,905, $8,881 and $3,578, respectively, and there were no incentive fees related to realized capital gains. For the year ended December 31, 2016, 2015 and 2014 we recorded no accrued capital gains incentive fees based upon our cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2016, 2015 and 2014, respectively. The accrual for any capital gains incentive fee under accounting principles generally accepted in the
 
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United States (“US GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.
Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of us. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the administration agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs. The increase in other general and administrative expenses for the year ended December 31, 2016 from the comparable period in 2015 and for the year ended in December 31, 2015 from the comparable period in 2014 was primarily driven by the increased deployment of capital.
Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) on Investments
During the years ended December 31, 2016, 2015 and 2014, we had realized gains on 10, 8, and 4, investments, respectively, totaling approximately $864, $1,622, and $391, respectively, which was offset by realized losses on 14, 6, and 3, investments, respectively, totaling approximately $10,508, $458, and $319, respectively. During the years ended December 31, 2016, 2015 and 2014, we had a change in unrealized appreciation on 104, 48, and 25 investments, respectively, totaling approximately $41,130, $8,597, and $2,931, respectively, which was offset by a change in unrealized depreciation on 24, 71, and 65 investments, respectively, totaling approximately $21,298, $26,612, and $11,649, respectively.
Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the years ended December 31, 2016, 2015 and 2014, were as follows:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Net realized gain (loss) on investments	  	$	(9,644	) 	  	$	1,164	 	  	$	72	 	
Net change in unrealized appreciation (depreciation) on investments	  	 	19,832	 	  	 	(18,015	) 	  	 	(8,718	) 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	$	10,188	 	  	$	(16,851	) 	  	$	(8,646	) 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the years ended December 31, 2016, 2015 and 2014 were as follows:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	 	2014	 	
Type	  	Net
realized
gain
(loss)	 	 	Net change in
unrealized
appreciation
(depreciation)	 	  	Net
realized
gain
(loss)	 	  	Net change in
unrealized
appreciation
(depreciation)	 	 	Net
realized
gain
(loss)	 	 	Net change in
unrealized
appreciation
(depreciation)	 	
First Lien Debt	  	$	383	 	 	$	46	 	  	$	208	 	  	$	(3,160	) 	 	$	—  	 	 	$	(2,829	) 	
Second Lien Debt	  	 	275	 	 	 	5,216	 	  	 	—  	 	  	 	(2,925	) 	 	 	120	 	 	 	(2,518	) 	
Structured Finance Obligations	  	 	(10,302	) 	 	 	11,105	 	  	 	956	 	  	 	(12,139	) 	 	 	(48	) 	 	 	(3,371	) 	
Equity Investments	  	 	—  	 	 	 	1,193	 	  	 	—  	 	  	 	209	 	 	 	—  	 	 	 	—  	 	
Investment Fund	  	 	—  	 	 	 	2,272	 	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	$	(9,644	) 	 	$	19,832	 	  	$	1,164	 	  	$	(18,015	) 	 	$	72	 	 	$	(8,718	) 	

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Net change in unrealized appreciation in our investments for the year ended December 31, 2016 compared to the comparable period in 2015 was primarily due to a tightening spread environment during the year. Net change in unrealized depreciation in our investments for the year ended December 31, 2015 compared to the comparable period in 2014 was primarily due to a widening spread environment during the last six months of the year.
MIDDLE MARKET CREDIT FUND, LLC
Overview
On February 29, 2016, we and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, an unconsolidated Delaware limited liability company. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which we and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of our representatives and two of Credit Partners’ representatives. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by us. By virtue of its membership interest, we and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Together with Credit Partners, we co-invest through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by us and our affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of us and Credit Partners. Therefore, although we own more than 25% of the voting securities of Credit Fund, we do not believe that we have control over Credit Fund (other than for purposes of the Investment Company Act). The Credit Fund Sub, a Delaware limited liability company, was formed on April 5, 2016. Credit Fund Sub primarily invests in first lien loans of middle market companies. Credit Fund Sub is a wholly owned subsidiary of Credit Fund and is consolidated in Credit Fund’s consolidated financial statements commencing from the date of its formation. Credit Fund follows the same Internal Risk Rating system as us.
Credit Fund, we and Credit Partners entered into an administration agreement with Carlyle GMS Finance Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Administrative Agent”), pursuant to which the Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at our expense with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Administrative Agent in performing its obligations thereunder.
Selected Financial Data
Since inception of Credit Fund and through March 31, 2017 and December 31, 2016, we and Credit Partners each made capital contributions of $1 in members’ equity and $45,500 and $35,000, respectively, in subordinated loans to Credit Fund. As of March 31, 2017 and December 31, 2016, Credit Fund had net borrowings of $86,044 and $62,384, respectively, in mezzanine loans under the Credit Fund Facility. As of March 31, 2017 and December 31, 2016, Credit Fund had subordinated loans and members’ capital of $96,155 and $74,547, respectively. The interest rate for Credit Fund’s mezzanine loans is LIBOR plus 9.50% with a maturity date of June 24, 2017. The interest rate for Credit Fund’s subordinated loans was 0.001% with a maturity date of March 1, 2021. As of March 31, 2017 and December 31, 2016, our ownership interest in such subordinated loans and members’ capital was $48,077 and $37,273, respectively, and in such mezzanine loans was $86,044 and $62,384, respectively.
 
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As of March 31, 2017 and December 31, 2016, Credit Fund held cash and cash equivalents totaling $10,533 and $6,103, respectively.
As of March 31, 2017 and December 31, 2016, Credit Fund had total investments at fair value of $558,694 and $437,829, respectively, which was comprised of first lien senior secured loans and second lien senior secured loans to 35 and 28 portfolio companies, respectively. As of March 31, 2017 and December 31, 2016, no loans in Credit Fund’s portfolio were on non-accrual status or contained PIK provisions. All investments in the portfolio were floating rate debt investments. The portfolio companies in Credit Fund are U.S. middle market companies in industries similar to those in which we may invest directly. Additionally, as of March 31, 2017 and December 31, 2016, Credit Fund had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $32,012 and $30,361, respectively.
Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of March 31, 2017 and December 31, 2016:

 	  	As of
March 31,
2017	 	 	As of
December 31,
2016	 	
Senior secured loans (1)	  	$	560,196	 	 	$	439,086	 	
Weighted average yields of senior secured loans based on amortized cost  (2)	  	 	6.53	% 	 	 	6.47	% 	
Weighted average yields of senior secured loans based on fair value  (2)	  	 	6.46	% 	 	 	6.41	% 	
Number of portfolio companies in Credit Fund	  	 	35	 	 	 	28	 	
Average amount per portfolio company (1)	  	$	16,006	 	 	$	15,682	 	
Weighted average Internal Risk Rating	  	 	2.0	 	 	 	2.0	 	
 
(1)	At par/principal amount.	
(2)	Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of March 31, 2017 and December 31, 2016. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.	
 
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Consolidated Schedule of Investments as of March 31, 2017 (unaudited)

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments (1)	 	Industry	 	Interest
Rate	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
First Lien Debt (99.42% of fair value)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Advanced Instruments, LLC  (2) (3) (4) (10) (11)	 	Healthcare &
Pharmaceuticals	 	 
	L + 5.25%

(1.00% Floor)	 

 	 	 	10/31/2022	 	 	$	12,000	 	 	$	11,867	 	 	$	11,972	 	
AM Conservation Holding Corporation  (2) (3) (4)	 	Energy: Electricity	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	10/31/2022	 	 	 	29,925	 	 	 	29,657	 	 	 	30,185	 	
Anaren, Inc. (2) (3) (4)	 	Telecommunications	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	2/18/2021	 	 	 	6,963	 	 	 	6,935	 	 	 	6,963	 	
Borchers, Inc. (2) (3) (4) (7) (10) (11)	 	Chemicals,
Plastics & Rubber	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	1/13/2024	 	 	 	8,142	 	 	 	8,096	 	 	 	8,170	 	
Datapipe, Inc. (2) (3) (4) (11)	 	Telecommunications	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	3/15/2019	 	 	 	9,725	 	 	 	9,650	 	 	 	9,753	 	
DBI Holding LLC (2) (3) (4)	 	Business Services	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	8/1/2021	 	 	 	19,950	 	 	 	19,774	 	 	 	19,754	 	
Dent Wizard International Corporation  (2) (3) (4) (11)	 	Automotive	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	4/7/2020	 	 	 	15,000	 	 	 	14,861	 	 	 	14,984	 	
Dimora Brands, Inc. (fka TK USA Enterprises,
Inc.)  (2) (3) (4) (11)	 	Construction &
Building	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	4/4/2023	 	 	 	19,800	 	 	 	19,539	 	 	 	19,743	 	
Diversitech Corporation (2) (4) (10)	 	Capital Equipment	 	 	P + 3.50%	 	 	 	11/19/2021	 	 	 	14,766	 	 	 	14,589	 	 	 	14,766	 	
DTI Holdco, Inc. (2) (3) (4) (7)	 	High Tech
Industries	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	9/30/2023	 	 	 	19,900	 	 	 	19,704	 	 	 	19,639	 	
EAG, Inc. (2) (3) (4) (11)	 	Business Services	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	7/28/2018	 	 	 	8,440	 	 	 	8,430	 	 	 	8,469	 	
EIP Merger Sub, LLC (Evolve IP)  (2) (3) (4) (8) (11)	 	Telecommunications	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	22,894	 	 	 	22,280	 	 	 	22,539	 	
EIP Merger Sub, LLC (Evolve IP)  (2) (3) (4) (9) (11)	 	Telecommunications	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	1,500	 	 	 	1,458	 	 	 	1,475	 	
Empower Payments Acquisitions, Inc.  (2) (3) (7)	 	Media: Advertising,
Printing &
Publishing	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	11/30/2023	 	 	 	17,456	 	 	 	17,115	 	 	 	17,411	 	
Jensen Hughes,
Inc.  (2) (3) (4) (10) (11)	 	Utilities: Electric	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/4/2021	 	 	 	20,408	 	 	 	20,197	 	 	 	20,275	 	
Kestra Financial,
Inc.  (2) (3) (4)	 	Banking, Finance,
Insurance & Real
Estate	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	6/24/2022	 	 	 	19,850	 	 	 	19,593	 	 	 	19,725	 	
MSHC, Inc. (2) (3) (4) (10)	 	Construction &
Building	 	 
	L + 5.00%

(1.00% Floor)	 

 	 	 	7/19/2021	 	 	$	13,543	 	 	$	13,440	 	 	$	13,423	 	
PAI Holdco, Inc. (Parts Authority)  (2) (3) (4)	 	Automotive	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	12/30/2022	 	 	 	9,925	 	 	 	9,864	 	 	 	9,925	 	
Paradigm Acquisition Corp.  (2) (3) (4)	 	Business Services	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	6/2/2022	 	 	 	11,970	 	 	 	11,874	 	 	 	11,970	 	
Pasternack Enterprises, Inc. (Infinite RF)  (2) (3) (4)	 	Capital Equipment	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/27/2022	 	 	 	11,910	 	 	 	11,817	 	 	 	11,885	 	
PSI Services
LLC  (2) (3) (4) (7) (10)	 	Business Services	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	1/19/2023	 	 	 	29,623	 	 	 	29,052	 	 	 	29,333	 	
 
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Investments (1)	 	Industry	 	 	Interest
Rate	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
Q Holding Company (2) (3) (4)	 	 	Automotive	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/18/2021	 	 	 	13,929	 	 	 	13,798	 	 	 	13,958	 	
QW Holding Corporation (Quala) (2) (3) (4) (7) (10)	 	 
	Environmental
Industries	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	8/31/2022	 	 	 	10,983	 	 	 	10,447	 	 	 	11,121	 	
Ramundsen Public Sector, LLC  (2) (3) (4)	 	 
	Sovereign & Public
Finance	 
 	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	2/1/2024	 	 	 	4,000	 	 	 	3,983	 	 	 	4,008	 	
RelaDyne Inc. (2) (3) (4) (10)	 	 	Wholesale	 	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	7/22/2022	 	 	 	26,228	 	 	 	25,834	 	 	 	25,978	 	
Restaurant Technologies, Inc.  (2) (3) (4)	 	 	Retail	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	11/23/2022	 	 	 	14,000	 	 	 	13,876	 	 	 	14,021	 	
Systems Maintenance Services Holding, Inc.  (2) (3) (4) (11)	 	 	High Tech Industries	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	10/30/2023	 	 	 	24,439	 	 	 	24,266	 	 	 	24,561	 	
T2 Systems Canada,
Inc.  (2) (3) (4)	 	 
	Transportation:
Consumer	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	2,693	 	 	 	2,630	 	 	 	2,696	 	
T2 Systems, Inc. (2) (3) (4) (10)	 	 
	Transportation:
Consumer	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	15,262	 	 	 	14,865	 	 	 	15,282	 	
Teaching Strategies,
LLC  (2) (3) (4) (10)	 	 
	Media: Advertising,
Printing & Publishing	 
 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	2/27/2023	 	 	 	18,100	 	 	 	17,915	 	 	 	17,980	 	
The Original Cakerie, Ltd. (Canada)  (2) (3) (4) (10) (11)	 	 
	Beverage, Food &
Tobacco	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	6,992	 	 	 	6,932	 	 	 	6,992	 	
The Original Cakerie, Co. (Canada)  (2) (3) (4) (11)	 	 
	Beverage, Food &
Tobacco	 
 	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	3,612	 	 	 	3,585	 	 	 	3,612	 	
U.S. Acute Care Solutions, LLC  (2) (3) (4)	 	 
	Healthcare &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/15/2021	 	 	 	26,334	 	 	 	26,099	 	 	 	26,275	 	
U.S. Anesthesia Partners,
Inc.  (2) (3) (4) (11)	 	 
	Healthcare &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/31/2019	 	 	 	10,348	 	 	 	10,257	 	 	 	10,366	 	
Vantage Specialty
Chemicals, Inc. (2) (3) (4) (11)	 	 
	Chemicals,
Plastics & Rubber	 
 	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	2/5/2021	 	 	 	17,865	 	 	 	17,748	 	 	 	17,775	 	
WIRB—Copernicus Group, Inc.  (2) (3) (4)	 	 
	Healthcare &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	8/12/2022	 	 	 	12,315	 	 	 	12,232	 	 	 	12,281	 	
Zest Holdings, LLC (2) (3) (4)	 	 
	Durable Consumer
Goods	 
 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	8/16/2020	 	 	 	8,700	 	 	 	8,661	 	 	 	8,693	 	
Zywave, Inc. (2) (3) (4) (7) (10)	 	 	High Tech Industries	 	 	 
	L + 5.00%

(1.00% Floor)	 

 	 	 	11/17/2022	 	 	 	17,456	 	 	 	17,279	 	 	 	17,494	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	550,199	 	 	$	555,452	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt (0.58% of fair value)	 	
Ramundsen Public Sector,
LLC  (2) (3) (4) (7)	 	 
	Sovereign & Public
Finance	 
 	 	 
	L + 8.50%

(1.00% Floor)	 

 	 	 	1/31/2025	 	 	$	200	 	 	$	198	 	 	$	200	 	
Vantage Specialty
Chemicals, Inc. (2) (3) (4) (11)	 	 
	Chemicals,
Plastics & Rubber	 
 	 	 
	L + 8.75%
(1.00% Floor)	 
 	 	 	2/5/2022	 	 	 	2,000	 	 	 	1,969	 	 	 	1,992	 	
Zywave, Inc. (2) (3) (4)	 	 	High Tech Industries	 	 	 
	L + 9.00%
(1.00% Floor)	 
 	 	 	11/17/2023	 	 	 	1,050	 	 	 	1,035	 	 	 	1,050	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	3,202	 	 	$	3,242	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	  553,401	 	 	$	  558,694	 	

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(1)	Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of March 31, 2017, the geographical composition of investments as a percentage of fair value was 1.90% in Canada and 98.10% in the United States.	
(2)	Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate (“P”)), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of March 31, 2017. As of March 31, 2017, all of Credit Fund’s LIBOR loans were indexed to the 90-day LIBOR rate at 1.15%, except for those loans as indicated in Note 11 below, and the U.S. Prime Rate loan was indexed at 4.00%.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by Credit Fund Sub. The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.	
(5)	Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.	
(6)	Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements.	
(7)	Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub.	
(8)	Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.25% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.	
(9)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.91%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
 
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(10)	As of March 31, 2017, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

First Lien Debt —unfunded delayed draw and revolving term
loans commitments	  	Type	 	  	Unused
Fee	 	 	Par/
Principal
Amount	 	  	Fair
Value	 	
Advanced Instruments, LLC	  	 	Revolver	 	  	 	0.50	% 	 	$	1,333	 	  	$	(3	) 	
Borchers, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	1,858	 	  	 	5	 	
Diversitech Corporation	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	5,000	 	  	 	—  	 	
Jensen Hughes, Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,461	 	  	 	(8	) 	
Jensen Hughes, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,000	 	  	 	(11	) 	
MSHC, Inc.	  	 	Delayed Draw	 	  	 	1.50	% 	 	 	1,399	 	  	 	(11	) 	
PSI Services LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	377	 	  	 	(4	) 	
QW Holding Corporation (Quala)	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	4,762	 	  	 	33	 	
QW Holding Corporation (Quala)	  	 	Revolver	 	  	 	1.00	% 	 	 	4,234	 	  	 	29	 	
RelaDyne Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	135	 	  	 	(1	) 	
RelaDyne Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,433	 	  	 	(21	) 	
T2 Systems, Inc.	  	 	Revolver	 	  	 	1.00	% 	 	 	1,955	 	  	 	2	 	
Teaching Strategies, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,900	 	  	 	(11	) 	
The Original Cakerie, Ltd. (Canada)	  	 	Revolver	 	  	 	0.50	% 	 	 	1,665	 	  	 	—  	 	
Zywave, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	1,500	 	  	 	3	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	 	 	  	 	 	 	 	$	32,012	 	  	$	2	 	

(11)	As of March 31, 2017, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.98%.	
Consolidated Schedule of Investments as of December 31, 2016

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments (1)	 	Industry	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
First Lien Debt (99.31% of fair value)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
AM Conservation Holding Corporation  (2) (3) (4)	 	Energy: Electricity	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	10/31/2022	 	 	$	30,000	 	 	$	29,721	 	 	$	29,925	 	
Datapipe, Inc. (2) (3) (4) (11)	 	Telecommunications	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	3/15/2019	 	 	 	9,750	 	 	 	9,654	 	 	 	9,764	 	
Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)  (2) (3) (4) (11)	 	Construction &
Building	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	4/4/2023	 	 	 	19,850	 	 	 	19,580	 	 	 	19,723	 	
Diversitech
Corporation (2) (4) (10) (11)	 	Capital Equipment	 	 	P + 3.50%	 	 	 	11/19/2021	 	 	 	14,803	 	 	 	14,617	 	 	 	14,803	 	
DTI Holdco, Inc. (2) (3) (4) (7)	 	High Tech
Industries	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	9/30/2023	 	 	 	19,950	 	 	 	19,751	 	 	 	19,651	 	
DYK Prime Acquisition LLC  (2) (3) (4)	 	Chemicals, Plastics
& Rubber	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	4/1/2022	 	 	 	5,775	 	 	 	5,735	 	 	 	5,775	 	
EAG, Inc. (2) (3) (4) (11)	 	Business Services	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	7/28/2018	 	 	 	8,713	 	 	 	8,686	 	 	 	8,720	 	
EIP Merger Sub, LLC (Evolve IP)  (2) (3) (4)  (8)	 	Telecommunications	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	22,971	 	 	 	22,323	 	 	 	22,509	 	
EIP Merger Sub, LLC (Evolve IP) (2) (3) (4) (9)	 	Telecommunications	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	1,500	 	 	 	1,455	 	 	 	1,468	 	
Empower Payments Acquisitions, Inc. (2) (3) (7)	 	Media: Advertising,
Printing &
Publishing	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	11/30/2023	 	 	 	17,500	 	 	 	17,154	 	 	 	17,279	 	
 
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Investments (1)	 	Industry	 	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
Generation Brands Holdings, Inc. (2) (3) (4)	 	 
	Durable Consumer
Goods	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	6/10/2022	 	 	$	19,900	 	 	$	19,712	 	 	$	20,099	 	
Jensen Hughes, Inc. (2) (3) (4)  (10)	 	 	Utilities: Electric	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/4/2021	 	 	 	20,409	 	 	 	20,188	 	 	 	20,327	 	
Kestra Financial, Inc. (2) (3) (4)	 	 

	Banking, Finance,
Insurance & Real
Estate	 

	L + 5.25%
(1.00% Floor)	 
 	 	 	6/24/2022	 	 	 	19,900	 	 	 	19,632	 	 	 	19,814	 	
MSHC, Inc. (2) (3) (4) (10)	 	 
	Construction &
Building	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/19/2021	 	 	 	13,177	 	 	 	13,062	 	 	 	13,003	 	
PAI Holdco, Inc. (Parts Authority) (2) (3) (4)	 	 	Automotive	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	12/30/2022	 	 	 	9,950	 	 	 	9,886	 	 	 	9,950	 	
Pasternack Enterprises, Inc.
(Infinite RF)  (2) (3) (4)	 	 	Capital Equipment	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/27/2022	 	 	 	11,941	 	 	 	11,844	 	 	 	11,941	 	
Q Holding Company (2) (3) (4)	 	 	Automotive	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/18/2021	 	 	 	13,964	 	 	 	13,828	 	 	 	13,941	 	
QW Holding Corporation
(Quala)  (2) (3) (4) (7)  (10)	 	 
	Environmental
Industries	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	8/31/2022	 	 	 	8,975	 	 	 	8,413	 	 	 	9,030	 	
Restaurant Technologies, Inc.  (2) (3) (4)	 	 	Retail	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	11/23/2022	 	 	 	23,514	 	 	 	23,117	 	 	 	23,443	 	
RelaDyne Inc. (2) (3) (4) (10)	 	 	Wholesale	 	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	7/22/2022	 	 	 	14,000	 	 	 	13,871	 	 	 	13,969	 	
Systems Maintenance Services Holding, Inc.  (2) (3) (4)	 	 
	High Tech
Industries	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	10/30/2023	 	 	 	12,000	 	 	 	11,885	 	 	 	12,001	 	
T2 Systems Canada, Inc.  (2) (3) (4) (11)	 	 
	Transportation:
Consumer	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	2,700	 	 	 	2,635	 	 	 	2,727	 	
T2 Systems, Inc. (2) (3) (4) (10) (11)	 	 
	Transportation:
Consumer	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	15,300	 	 	 	14,888	 	 	 	15,473	 	
The Original Cakerie, Ltd.
(Canada)  (2) (3) (4) (10)	 	 
	Beverage, Food &
Tobacco	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	7,009	 	 	 	6,946	 	 	 	7,009	 	
The Original Cakerie, Co. (Canada) (2) (3) (4)	 	 
	Beverage, Food &
Tobacco	 
 	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	3,621	 	 	 	3,591	 	 	 	3,621	 	
U.S. Acute Care Solutions, LLC (2) (3) (4)	 	 
	Health &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/15/2021	 	 	 	26,400	 	 	 	26,154	 	 	 	26,336	 	
U.S. Anesthesia Partners, Inc.  (2) (3) (4)	 	 
	Health &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/31/2019	 	 	 	10,374	 	 	 	10,275	 	 	 	10,362	 	
Vantage Specialty Chemicals, Inc. (2) (3) (4) (11)	 	 
	Chemicals, Plastics
& Rubber	 
 	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	2/5/2021	 	 	 	17,910	 	 	 	17,786	 	 	 	17,903	 	
WIRB—Copernicus Group, Inc.  (2) (3) (4)	 	 
	Health &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	8/12/2022	 	 	 	7,980	 	 	 	7,916	 	 	 	8,050	 	
Zest Holdings, LLC (2) (3) (4)	 	 
	Durable Consumer
Goods	 
 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	8/16/2020	 	 	 	8,700	 	 	 	8,658	 	 	 	8,749	 	
Zywave, Inc. (2) (3) (4) (7) (10)	 	 
	High Tech
Industries	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	11/17/2022	 	 	 	17,500	 	 	 	17,315	 	 	 	17,434	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	430,278	 	 	$	434,799	 	

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Investments (1)	 	Industry	 	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
Second Lien Debt (0.69% of fair value)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Vantage Specialty Chemicals, Inc. (2) (3) (4) (11)	 	 
	Chemicals, Plastics
& Rubber	 
 	 	 
	L + 8.75%
(1.00% Floor)	 
 	 	 	2/5/2022	 	 	$	2,000	 	 	$	1,960	 	 	$	1,987	 	
Zywave, Inc. (2) (3) (4)	 	 
	High Tech
Industries	 
 	 	 
	L + 9.00%
(1.00% Floor)	 
 	 	 	11/17/2023	 	 	 	1,050	 	 	 	1,034	 	 	 	1,043	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	2,994	 	 	$	3,030	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	433,272	 	 	$	437,829	 	

(1)	Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2016, the geographical composition of investments as a percentage of fair value was 2.43% in Canada and 97.57% in the United States.	
(2)	Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate (“P”)), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of Credit Fund’s LIBOR loans were indexed to the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 11 below, and the U.S. Prime Rate loan was indexed at 3.75%.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.	
(5)	Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.	
(6)	Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, which is substantially similar to the valuation policy of the Company provided in “ —Critical Accounting Policies—Fair Value Measurements .”	
(7)	Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub.	
(8)	Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.25% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.	
(9)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.84%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
 
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(10)	As of December 31, 2016, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

First Lien Debt—unfunded delayed draw and
revolving term loans commitments	  	Type	 	  	Unused
Fee	 	 	Par/
Principal
Amount	 	  	Fair
Value	 	
Diversitech Corporation	  	 	Delayed Draw	 	  	 	1.00	% 	 	$	5,000	 	  	$	—  	 	
Jensen Hughes, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,000	 	  	 	(7	) 	
Jensen Hughes, Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,461	 	  	 	(5	) 	
MSHC, Inc.	  	 	Delayed Draw	 	  	 	1.50	% 	 	 	1,790	 	  	 	(21	) 	
QW Holding Corporation (Quala)	  	 	Revolver	 	  	 	1.00	% 	 	 	5,086	 	  	 	14	 	
QW Holding Corporation (Quala)	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	5,918	 	  	 	17	 	
RelaDyne Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,162	 	  	 	(6	) 	
RelaDyne Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,824	 	  	 	(5	) 	
T2 Systems, Inc.	  	 	Revolver	 	  	 	1.00	% 	 	 	1,955	 	  	 	20	 	
The Original Cakerie, Ltd. (Canada)	  	 	Revolver	 	  	 	0.50	% 	 	 	1,665	 	  	 	—  	 	
Zywave, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	1,500	 	  	 	(5	) 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	 	 	  	 	 	 	 	$	30,361	 	  	$	2	 	

(11)	As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.	
Below is certain summarized consolidated financial information for Credit Fund as of March 31, 2017 and December 31, 2016, respectively. Credit Fund commenced operations in May 2016.

 	  	March 31,
2017	 	  	December 31,
2016	 	
Selected Consolidated Balance Sheet Information	  	 	(unaudited	) 	  	 	 	 	
ASSETS	  	 	 	 	  	 	 	 	
Investments, at fair value (amortized cost of $553,401 and $433,272, respectively)	  	$	558,694	 	  	$	437,829	 	
Cash and other assets	  	 	15,088	 	  	 	11,326	 	
 	  	 	 	 	  	 	 	 	
Total assets	  	$	573,782	 	  	$	449,155	 	
 	  	 	 	 	  	 	 	 	
LIABILITIES AND MEMBERS’ EQUITY	  	 	 	 	  	 	 	 	
Secured borrowings	  	$	367,375	 	  	$	248,540	 	
Mezzanine loans	  	 	86,044	 	  	 	62,384	 	
Other liabilities	  	 	24,208	 	  	 	63,684	 	
Subordinated loans and members’ equity	  	 	96,155	 	  	 	74,547	 	
 	  	 	 	 	  	 	 	 	
Liabilities and members’ equity	  	$	573,782	 	  	$	449,155	 	

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 	  	For the
three month
period ended
March 31, 2017	 	
Selected Consolidated Statement of Operations Information:	  	 	(unaudited	) 	
Total investment income	  	$	8,182	 	
 	  	 	 	 	
Expenses	  	 	 	 	
Interest and credit facility expenses	  	 	5,473	 	
Other expenses	  	 	318	 	
 	  	 	 	 	
Total expenses	  	 	5,791	 	
 	  	 	 	 	
Net investment income (loss)	  	 	2,391	 	
 	  	 	 	 	
Net realized gain (loss) on investments	  	 	—  	 	
Net change in unrealized appreciation (depreciation) on investments	  	 	737	 	
 	  	 	 	 	
Net increase (decrease) resulting from operations	  	$	3,128	 	
 	  	 	 	 	
Debt
Credit Fund Facility
On June 24, 2016, Credit Fund entered into the Credit Fund Facility with us pursuant to which Credit Fund may from time to time request mezzanine loans from us. The maximum principal amount of the Credit Fund Facility is $100,000. The maturity date of the Credit Fund Facility is June 24, 2017. Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.50%.
During the three months ended March 31, 2017, there were mezzanine loan borrowings of $45,660 and repayments of $22,000 under the Credit Fund Facility. As of March 31, 2017 and December 31, 2016, there were $86,044 and $62,384 in mezzanine loans outstanding, respectively.
Credit Fund Sub Facility
On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $450,000. The maturity date of the Credit Fund Sub Facility is June 24, 2022. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.50%.
The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub and the Company’s and Credit Partners’ unfunded capital commitments. Pursuant to a pledge, security agreement and assignment of capital commitments, dated June 24, 2016 (the “Pledge Agreement”), Credit Fund assigned to the collateral agent under the Credit Fund Sub Facility the right under the Limited Liability Company Agreement to call capital commitments from members of Credit Fund when an event of default has occurred and is continuing under the Credit Fund Sub Facility, subject to certain limitations. Pursuant to and subject to the terms of the Pledge Agreement, the collateral agent under the Credit Fund Sub Facility may call capital commitments from members of Credit Fund, including the Company, without the approval of the board of Credit Fund. The Credit Fund Sub Facility contains a provision that permits the Company and Credit Partners to request a reduction of the amount of the Company’s and Credit Partners’ unfunded capital commitments that can be called by the collateral agent thereunder to zero, in effect “unwinding” the Company’s and Credit Partners’ obligations under the Pledge Agreement. The Company and Credit Partners intend to exercise that provision to unwind their obligations under the Pledge Agreement prior to the completion of this initial public offering.
 
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During the three month period ended March 31, 2017, there were secured borrowings of $118,835 under the Credit Fund Sub Facility. As of March 31, 2017 and December 31, 2016, there was $367,375 and $248,540 in secured borrowings outstanding, respectively. As of March 31, 2017 and December 31, 2016, Credit Fund Sub had assets of $521,408 and $365,101, respectively, all of which were pledged as collateral for the Company’s indebtedness under the Credit Fund Sub Facility. As a result of the overcollateralization, if an event of default had occurred under the Credit Fund Sub Facility on March 31, 2017 and December 31, 2016, respectively, the potential net liability of the Company pursuant to the Pledge Agreement would be zero.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Facilities, as well as through securitization of a portion of our existing investments.
The SPV closed on May 24, 2013 on the SPV Credit Facility, which was subsequently amended on June 30, 2014, June 19, 2015 and June 9, 2016. The SPV Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $400,000 (the borrowing base as calculated pursuant to the terms of the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit Facility imposes financial and operating covenants on us and the SPV that restrict our and its business activities. Continued compliance with these covenants will depend on many factors, some of which are beyond our control.
We closed on March 21, 2014 on the Credit Facility, which was subsequently amended on January 8, 2015, May 25, 2016 and March 22, 2017. The maximum principal amount of the Credit Facility is $283,000. subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of our portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that we may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $550,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
As of March 31, 2017, we were in material compliance with the financial and operating covenants of our Facilities and 2015-1 Notes. Although we believe that we and the SPV will remain in compliance, there are no assurances that we or the SPV will continue to comply with the covenants in the Credit Facility and SPV Credit Facility, as applicable. Failure to comply with these covenants could result in a default under the Credit Facility and/or the SPV Credit Facility that, if we or the SPV were unable to obtain a waiver from the applicable lenders, could result in the immediate acceleration of the amounts due under the Credit Facility and/or the SPV Credit Facility, and thereby have a material adverse impact on our business, financial condition and results of operations.
The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes.
 
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On June 26, 2015, we completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, our wholly owned and consolidated subsidiary, and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $160,000 of Aaa/AAA Class A-1A Notes, which bear interest at the three-month London Interbank Offered Rate (“LIBOR”) plus 1.85%; $40,000 of Aaa/AAA Class A-1B Notes, which bear interest at the three-month LIBOR plus 1.75% for the first 24 months and the three-month LIBOR plus 2.05% thereafter; $27,000 of Aaa/AAA Class A-1C Notes, which bear interest at 3.75%; and $46,000 of Aa2 Class A-2 Notes which bear interest at the three-month LIBOR plus 2.70%. The 2015-1 Notes were issued at par and are scheduled to mature on July 15, 2027. We received 100% of the Preferred Interests issued by the 2015-1 Issuer on the closing date of the 2015-1 Debt Securitization in exchange for our contribution to the Issuer of the initial closing date loan portfolio. The Preferred Interests do not bear interest and had a nominal value of $125,900 at closing. In connection with the contribution, we have made customary representations, warranties and covenants to the 2015-1 Issuer. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in the consolidated financial statements. The Preferred Interests were eliminated in consolidation.
As of March 31, 2017 and December 31, 2016, we had $44,874 and $38,489, respectively, in cash and cash equivalents. The Facilities consisted of the following as of March 31, 2017 and December 31, 2016:

 	  	March 31, 2017	 	
 	  	Total
Facility	 	  	Borrowings
Outstanding	 	  	Unused
Portion  (1)	 	  	Amount
Available  (2)	 	
SPV Credit Facility	  	$	400,000	 	  	$	201,108	 	  	$	198,892	 	  	$	10,476	 	
Credit Facility	  	 	283,000	 	  	 	189,500	 	  	 	93,500	 	  	 	93,500	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	683,000	 	  	$	390,608	 	  	$	292,392	 	  	$	103,976	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	December 31, 2016	 	
 	  	Total
Facility	 	  	Borrowings
Outstanding	 	  	Unused
Portion  (1)	 	  	Amount
Available  (2)	 	
SPV Credit Facility	  	$	400,000	 	  	$	252,885	 	  	$	147,115	 	  	$	5,988	 	
Credit Facility	  	 	220,000	 	  	 	169,000	 	  	 	51,000	 	  	 	51,000	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	620,000	 	  	$	421,885	 	  	$	198,115	 	  	$	56,988	 	

(1)	The unused portion is the amount upon which commitment fees are based.	
(2)	Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.	
The following were the carrying values (before debt issuance costs) and fair values of our 2015-1 Notes as of March 31, 2017 and December 31, 2016.

 	  	March 31, 2017	 	  	December 31, 2016	 	
 	  	Carrying
Value	 	  	Fair
Value	 	  	Carrying
Value	 	  	Fair
Value	 	
Aaa/AAA Class A-1A Notes	  	$	160,000	 	  	$	160,110	 	  	$	160,000	 	  	$	160,072	 	
Aaa/AAA Class A-1B Notes	  	 	40,000	 	  	 	40,001	 	  	 	40,000	 	  	 	39,960	 	
Aaa/AAA Class A-1C Notes	  	 	27,000	 	  	 	27,030	 	  	 	27,000	 	  	 	26,951	 	
Aa2 Class A-2 Notes	  	 	46,000	 	  	 	46,027	 	  	 	46,000	 	  	 	45,784	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	273,000	 	  	$	273,168	 	  	$	273,000	 	  	$	272,767	 	

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Equity Activity
There were $51,816 and $14,300 of commitments made to us during the three month periods ended March 31, 2017 and 2016, respectively. As of March 31, 2017 and December 31, 2016, we had $1,274,174 and $1,222,358, respectively, in total capital commitments from stockholders, of which $473,514 and $421,698, respectively, was unfunded, and subject to call by the Company. As of March 31, 2017 and December 31, 2016, current directors had committed $821 in capital commitments to us.
Shares issued as of March 31, 2017 and December 31, 2016 were 41,708,155 and 41,702,318, respectively.
The following table summarizes activity in the number of shares of our common stock outstanding during the three month periods ended March 31, 2017 and 2016:

 	  	For the three month periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Shares outstanding, beginning of period	  	 	41,702,318	 	  	 	31,524,083	 	
Common stock issued	  	 	—  	 	  	 	1,815,181	 	
Reinvestment of dividends	  	 	5,837	 	  	 	3,885	 	
 	  	 	 	 	  	 	 	 	
Shares outstanding, end of period	  	 	41,708,155	 	  	 	33,343,149	 	
 	  	 	 	 	  	 	 	 	
Contractual Obligations
A summary of our significant contractual payment obligations was as follows as of December 31, 2016:

 	  	Payments Due by Period	 	
Contractual Obligations	  	Total	 	  	Less than
1 Year	 	  	1-3 Years	 	  	3-5 Years	 	  	More than
5 Years	 	
SPV Credit Facility and Credit Facility	  	$	421,885	 	  	$	—  	 	  	$	—  	 	  	$	421,885	 	  	$	—  	 	
2015-1 Notes	  	 	273,000	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	273,000	 	
Total	  	$	694,885	 	  	$	—  	 	  	$	—  	 	  	$	421,885	 	  	$	273,000	 	
As of March 31, 2017 and December 31, 2016, $201,108 and $252,885, respectively, of secured borrowings were outstanding under the SPV Credit Facility, $189,500 and $169,000, respectively, were outstanding under the Credit Facility and $273,000 and $273,000, respectively, of 2015-1 Notes were outstanding. For the three month periods ended March 31, 2017 and 2016, we incurred $5,034 and $3,599, respectively, of interest expense and $292 and $361, respectively, of unused commitment fees.
OFF BALANCE SHEET ARRANGEMENTS
In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of March 31, 2017 and December 31, 2016 for any such exposure.
We have in the past and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.
 
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We had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:

 	  	Principal Amount as of	 	
 	  	March 31, 2017	 	  	December 31, 2016	 	
Unfunded delayed draw commitments	  	$	44,541	 	  	$	35,704	 	
Unfunded revolving term loan commitments	  	 	26,517	 	  	 	24,063	 	
 	  	 	 	 	  	 	 	 	
Total unfunded commitments	  	$	71,058	 	  	$	59,767	 	
 	  	 	 	 	  	 	 	 	
Pursuant to an undertaking by us in connection with the 2015-1 Debt Securitization, we agreed to hold on an ongoing basis Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remains outstanding. As of March 31, 2017, we were in compliance with this undertaking.
As of March 31, 2017, in addition to the amounts in the table above, we had remaining commitments to fund, from time to time, capital to Credit Fund of up to $354,499. As of March 31, 2017, we had remaining commitments to fund, from time to time, mezzanine loans to Credit Fund of up to $13,956, of which $10,438 was available for borrowing based on the computation of collateral to support the borrowings.
DIVIDENDS AND DISTRIBUTIONS TO COMMON STOCKHOLDERS
Effective on July 5, 2017, the Company will convert its current “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders that have not “opted out” of the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the stockholders who have not “opted out” of the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Prior to this offering, the Company used primarily newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After this offering, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
 
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The following table summarizes our dividends declared and payable since inception through May 10, 2017:

Date
Declared	  	Record
Date	  	Payment
Date	  	Per Share
Amount	 	 	Total
Amount	 	  	Annualized
Dividend
Yield  (1)	 	
March 13, 2014	  	March 31, 2014	  	April 14, 2014	  	$	0.19	 	 	$	2,449	 	  	 	4.76	% 	
June 26, 2014	  	June 30, 2014	  	July 14, 2014	  	$	0.27	 	 	$	3,481	 	  	 	5.52	% 	
September 12, 2014	  	September 18, 2014	  	October 9, 2014	  	$	0.44	 	 	$	5,956	 	  	 	9.23	% 	
December 19, 2014	  	December 29, 2014	  	January 26, 2015	  	$	0.35	 	 	$	6,276	 	  	 	8.17	% 	
March 11, 2015	  	March 13, 2015	  	April 17, 2015	  	$	0.37	 	 	$	7,833	 	  	 	8.58	% 	
June 24, 2015	  	June 30, 2015	  	July 22, 2015	  	$	0.37	 	 	$	9,902	 	  	 	9.03	% 	
September 24, 2015	  	September 24, 2015	  	October 22, 2015	  	$	0.42	 	 	$	11,670	 	  	 	8.91	% 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.40	 	 	$	12,610	 	  	 	8.97	% 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.18	(2) 	 	$	5,674	 	  	 	4.03	% 	
March 10, 2016	  	March 14, 2016	  	April 22, 2016	  	$	0.40	 	 	$	13,337	 	  	 	9.26	% 	
June 8, 2016	  	June 8, 2016	  	July 22, 2016	  	$	0.40	 	 	$	13,943	 	  	 	9.23	% 	
September 28, 2016	  	September 28, 2016	  	October 24, 2016	  	$	0.40	 	 	$	15,917	 	  	 	9.37	% 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.41	 	 	$	17,098	 	  	 	9.09	% 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.07	(2) 	 	$	2,919	 	  	 	1.55	% 	
March 20, 2017	  	March 20, 2017	  	April 24, 2017	  	$	0.41	 	 	$	17,100	 	  	 	9.07	% 	
 
(1)    Annualized	dividend yield is calculated by dividing the declared dividend by the weighted average of the net asset value at the beginning of the quarter and the capital called during the quarter and annualizing over 4 quarterly periods.	
(2)    Represents	a special dividend.	
Following the consummation of this offering, we intend to make distributions on a quarterly basis to our stockholders but we cannot assure you that such distributions will continue at the same historical levels.
CRITICAL ACCOUNTING POLICIES
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies, including those relating to the valuation of our investment portfolio, are described below. The critical accounting policies should be read in connection with our consolidated financial statements and “Risk Factors”.
Fair Value Measurements
The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820,  Fair Value Measurement  (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
 
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Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of our Investment Adviser or the Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of our Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of our Investment Adviser and, where applicable, the third-party valuation firm.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
 
 	•	 	the nature and realizable value of any collateral;	
 
 	•	 	call features, put features and other relevant terms of debt;	
 
 	•	 	the portfolio company’s leverage and ability to make payments;	
 
 	•	 	the portfolio company’s public or private credit rating;	
 
 	•	 	the portfolio company’s actual and expected earnings and discounted cash flow;	
 
 	•	 	prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;	
 
 	•	 	the markets in which the portfolio company does business and recent economic and/or market events; and	
 
 	•	 	comparisons to comparable transactions and publicly traded securities.	
Investment performance data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of March 31, 2017 and December 31, 2016.
 
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US GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
 
 	•	 	Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments included in Level 1 generally include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.	
 
 	•	 	Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.	
 
 	•	 	Level 3— inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.	
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. Our Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.
Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur.
The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
 
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Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.
Investments in structured finance obligations are generally valued using a discounted cash flow and/or consensus pricing.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes EBITDA multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in Credit Fund’s subordinated loan and member’s interest are valued using the net asset value of the Company’s ownership interest in the funds and investments in Credit Fund’s mezzanine loans are valued using discounted cash flow analysis with expected repayment rate of principal and interest.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation may result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in isolation would result in a significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples would result in a significantly lower fair value measurement.
The carrying values of the secured borrowings and 2015-1 Notes approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s secured borrowings are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement. The fair value determination of the Company’s 2015-1 Notes was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement.
The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.
 
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Use of Estimates
The preparation of consolidated financial statements, in conformity with US GAAP, requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.
Revenue Recognition
Interest from Investments and Realized Gain/Loss on Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt and other income producing securities purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
The Company may have loans in its portfolio that contain PIK provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity.
Interest income from investments in the “equity” class of CLO funds, which we refer to as “structured finance obligations”, is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40,  Beneficial Interests in Securitized Financials Assets . We monitor the expected cash inflows from our CLO equity investments, including the expected residual payments and the effective yield is determined and updated at least quarterly. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Company’s estimates if the information was known at the time. As a result, actual results may differ significantly from these estimates.
Dividend Income
Dividend income from Credit Fund is recorded on the record date for Credit Fund to the extent that such amounts are payable by Credit Fund and are expected to be collected.
 
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Other Income
Other income may include income such as consent, waiver, amendment, syndication and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the Consolidated Statements of Assets and Liabilities.
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2017, the fair value of the loan in the portfolio on non-accrual status was $8,858, which represents approximately 0.6% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of March 31, 2017. All first and second lien debt investments were performing and current on their interest payments as of March 31, 2016.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.
The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company.
 
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Capital Calls and Dividends and Distributions to Common Stockholders
The Company records the shares issued in connection with capital calls as of the effective date of the capital call. To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.
Effective on July 5, 2017, the Company will convert its current “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders that has not “opted out” of the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the stockholders who have not “opted out” of the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Prior to this offering, the Company primarily used newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After this offering, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.
Valuation Risk
Our investments may not have a readily available market price, and we value these investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.
Interest Rate Risk
As of March 31, 2017, on a fair value basis, approximately 1% of our debt investments bear interest at a fixed rate and approximately 99% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors. Interest rates on the investments held within our portfolio of investments are typically based on floating LIBOR, with many of these investments also having a LIBOR floor. Additionally, our Facilities are also subject to floating interest rates and are currently paid based on floating LIBOR rates.
Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.
 
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The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. Interest income is calculated as revenue from interest generated from our settled portfolio of investments held as of March 31, 2017 and December 31, 2016, excluding structured finance obligations and Credit Fund. These hypothetical calculations are based on a model of the settled investments in our portfolio, excluding structured finance obligations and Credit Fund, held as of March 31, 2017 and December 31, 2016, and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings and 2015-1 Notes as of March 31, 2017 and December 31, 2016 and based on the terms of our Facilities and 2015-1 Notes. Interest expense on our Facilities and 2015-1 Notes is calculated using the interest rate as of March 31, 2017 and December 31, 2016, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our net interest income.
We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.
Based on our Consolidated Statements of Assets and Liabilities as of March 31, 2017 and December 31, 2016, the following table shows the annual impact on net investment income of base rate changes in interest rates for our settled investments (considering interest rate floors for variable rate instruments), excluding structured finance obligations and Credit Fund, and outstanding secured borrowings and 2015-1 Notes assuming no changes in our investment and borrowing structure:

 	  	As of March 31, 2017	 	  	As of December 31, 2016	 	
Basis Point Change	  	Interest
Income	 	 	Interest
Expense	 	 	Net
Investment
Income	 	  	Interest
Income	 	 	Interest
Expense	 	 	Net
Investment
Income	 	
Up 300 basis points	  	$	39,057	 	 	$	(19,098	) 	 	$	19,959	 	  	$	40,324	 	 	$	(20,037	) 	 	$	20,287	 	
Up 200 basis points	  	$	26,484	 	 	$	(12,732	) 	 	$	13,752	 	  	$	26,848	 	 	$	(13,358	) 	 	$	13,490	 	
Up 100 basis points	  	$	13,910	 	 	$	(6,366	) 	 	$	7,544	 	  	$	13,372	 	 	$	(6,679	) 	 	$	6,693	 	
Down 100 basis points	  	$	(1,495	) 	 	$	6,333	 	 	$	4,838	 	  	$	(132	) 	 	$	6,282	 	 	$	6,150	 	
Down 200 basis points	  	$	(1,495	) 	 	$	7,002	 	 	$	5,507	 	  	$	(132	) 	 	$	6,282	 	 	$	6,150	 	
Down 300 basis points	  	$	(1,495	) 	 	$	7,002	 	 	$	5,507	 	  	$	(132	) 	 	$	6,282	 	 	$	6,150	 	
 
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SENIOR SECURITIES
Information about our senior securities is shown in the following table as of the end of the period ended March 31, 2017 and each fiscal year ended December 31, 2016, 2015, 2014 and 2013. The report of our independent registered public accounting firm, Ernst & Young LLP, on the senior securities table as of December 31, 2016 is attached as an exhibit to the registration statement of which this prospectus is a part.

Class and Year/Period	  	Total
Amount
Outstanding
Exclusive of
Treasury
Securities (1)
($ in millions)	 	  	Asset
Coverage
Per Unit (2)	 	  	Involuntary
Liquidating
Preference
Per Unit (3)	 	  	Average
Market
Value
Per Unit (4)	 	
Facilities and 2015-1 Notes	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
March 31, 2017	  	$	663.6	 	  	$	2,150.3	 	  	 	—  	 	  	 	N/A	 	
December 31, 2016	  	$	694.9	 	  	$	2,099.7	 	  	 	—  	 	  	 	N/A	 	
December 31, 2015	  	$	507.3	 	  	$	2,127.0	 	  	 	—  	 	  	 	N/A	 	
December 31, 2014	  	$	308.4	 	  	$	2,096.7	 	  	 	—  	 	  	 	N/A	 	
December 31, 2013	  	$	66.8	 	  	$	3,783.5	 	  	 	—  	 	  	 	N/A	 	
 
(1)	Total amount of each class of senior securities outstanding at the end of the period presented.	
(2)	As a BDC, we must have at least 200% asset coverage calculated pursuant to the Investment Company Act immediately after each time we issue senior securities. Asset coverage per unit is the ratio of the carrying value of our total assets, less all liabilities excluding indebtedness represented by senior securities in this table, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.	
(3)	The amount to which such class of senior security would be entitled upon our involuntary liquidation in preference to any security junior to it. The “—” in this column indicates information that the SEC expressly does not require to be disclosed for certain types of senior securities.	
(4)	Not applicable because the senior securities are not registered for public trading.	
 
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BUSINESS
TCG BDC, Inc.
We are an externally managed specialty finance company focused on lending to middle-market companies. We are managed by our Investment Adviser, a wholly owned subsidiary of The Carlyle Group L.P. Since we commenced investment operations in May 2013 through March 31, 2017, we have invested more than $2.4 billion in aggregate principal amount of debt and equity investments prior to any subsequent exits or repayments. Our investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which we define as companies with approximately $10 million to $100 million of EBITDA, which we believe is a useful proxy for cash flow. We seek to achieve our investment objective primarily through direct originations of Middle Market Senior Loans, with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities).
We generate revenues primarily in the form of interest income from the investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees.
In conducting our investment activities, we believe that we benefit from the significant scale and resources of Carlyle, including our Investment Adviser and its affiliates. We have operated our business as a BDC since we began our investment activities in May 2013, and we believe we will be one of the largest BDCs as measured by total assets at the time of such BDC’s initial public offering.
Effective on March 15, 2017, we changed our name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.”
Formation Transactions
We were formed in February 2012 as a Maryland corporation structured as an externally managed, non-diversified closed-end investment company. On May 2, 2013, we elected to be regulated as a BDC and commenced substantial investment operations upon the completion of our initial closing of equity capital commitments.
Our Investment Adviser
Our investment activities are managed by our Investment Adviser. The principal executive offices of our Investment Adviser are located at 520 Madison Avenue, 40th Floor, New York, NY 10022, with additional offices in Chicago and Los Angeles. Our Investment Adviser is responsible for sourcing potential investments, conducting research and due diligence on prospective investments and equity sponsors, analyzing investment opportunities, structuring our investments and monitoring our investments on an ongoing basis.
Our Investment Adviser is served by an origination, capital markets, underwriting and portfolio management team comprised of experienced investment professionals in CPC, which is Carlyle’s direct lending business unit that operates within the broader Carlyle Global Credit platform (which in turn operates within Carlyle’s GMS segment). Our investment approach is focused on long-term credit performance and principal preservation. Our Investment Adviser’s investment team utilizes a rigorous, systematic, and consistent investment process, refined over Carlyle’s 30-year history investing in private markets across multiple cycles, designed to achieve enhanced risk-adjusted returns.
Our Investment Adviser’s seven person investment committee is responsible for reviewing and approving our investment opportunities. The members of the investment committee have experience investing through different credit cycles. The investment committee is led by Michael A. Hart, Managing Director of Carlyle, Head
 
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of CPC, Chairman of our Board of Directors and our Chief Executive Officer and also includes Jeffrey S. Levin, Managing Director of Carlyle and our President. See “Management—Portfolio Management” for biographical information of members of our Investment Adviser’s investment committee.
Our Investment Adviser also serves, and may serve in the future, as investment adviser to other current and future affiliated business development companies that have investment objectives similar to our investment objectives.
Pursuant to a personnel agreement between our Investment Adviser and Carlyle Employee Co., an affiliate of our Investment Adviser, Carlyle Employee Co. provides our Investment Adviser with access to investment professionals that comprise our Investment Adviser’s investment team. As of May 10, 2017, our Investment Adviser’s investment team includes a team of 28 dedicated investment professionals. The seven members of our Investment Adviser’s investment committee have an average of 21 years of industry experience. In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co. and CELF, both wholly owned subsidiaries of Carlyle. See “Certain Relationships and Related Party Transactions.”
Our Investment Adviser, its investment professionals, our executive officers and directors, and other current and future principals of our Investment Adviser serve or may serve as investment advisers, officers, directors or principals of entities or investment funds that operate in the same or a related line of business as we do and/or investment funds, accounts and other similar arrangements advised by Carlyle. An affiliated investment fund, account or other similar arrangement currently formed or formed in the future and managed by our Investment Adviser or its affiliates may have overlapping investment objectives and strategies with our own and, accordingly, may invest in asset classes similar to those targeted by us. As a result, our Investment Adviser and/or its affiliates may face conflicts of interest arising out of the investment advisory activities of our Investment Adviser and other operations of Carlyle.    See “—Allocation of Investment Opportunities and Potential Conflicts of Interest” and “Risk Factors—Risks Related to Our Business and Structure—There are significant potential conflicts of interest, including the management of other investment funds and accounts by our Investment Adviser, which could impact our investment returns . ”
Carlyle
Our Investment Adviser is an affiliate of Carlyle. Carlyle is one of the world’s largest and most diversified multi-product global alternative asset management firms. Carlyle and its affiliates advise an array of specialized investment funds and other investment vehicles that invest across a range of industries, geographies, asset classes and investment strategies. Since its founding in Washington, D.C. in 1987, Carlyle has grown to become a leading global alternative asset manager with approximately $162 billion in AUM across 287 investment vehicles as of March 31, 2017.
Carlyle Global Credit is one of the largest integrated credit platforms in the industry with approximately $29 billion in AUM and more than 120 employees with multiple offices, including New York, Chicago and Los Angeles, as of March 31, 2017. Carlyle Global Credit’s investment strategies include loans and structured credit, distressed credit, private credit (through CPC) and energy credit.
 
 	•	 	Primary areas of focus for Carlyle’s Global Credit teams include:	
 
 	•	 	Loans and Structured Credit. The structured credit funds invest primarily in performing senior secured bank loans through structured vehicles and other investment vehicles. As of March 31, 2017, Carlyle’s loan and structured credit team advised 46 structured credit funds and two carry funds in the United States, Europe, and Asia totaling, in the aggregate, approximately $19 billion in AUM.	
 
 	•	 	Distressed Credit. The distressed credit funds generally invest in liquid and illiquid securities and obligations, including secured debt, senior and subordinated unsecured debt, convertible debt obligations, preferred stock and public and private equity of financially distressed companies in	
 
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 	defensive and asset-rich industries. In certain investments, these funds may seek to restructure pre-reorganization debt claims into controlling positions in the equity of reorganized companies. As of March 31, 2017, Carlyle’s distressed credit team advised three funds totaling, in the aggregate, approximately $3.7 billion in AUM.	
 
 	•	 	Private Credit. Carlyle’s private credit business includes Carlyle’s BDCs, which invest primarily in middle market first-lien loans (which include unitranche, “first out” and “last out” loans) and second-lien loans of middle-market companies, typically defined as companies with annual EBITDA ranging from $10 million to $100 million that lack access to the broadly syndicated loan and bond markets. As of March 31, 2017, Carlyle’s private credit investment team advised four funds consisting of two BDCs (including us), a CLO and one corporate mezzanine fund that is past its investment period, totaling, in the aggregate, approximately $2 billion in AUM.	
 
 	•	 	Energy Credit. Carlyle’s energy credit team invests primarily in privately negotiated mezzanine debt investments in North American energy and power projects and companies. As of March 31, 2017, Carlyle’s energy credit team advised two funds with approximately $4.7 billion in AUM.	
Strategic Relationships
We have established two highly differentiated strategic relationships that expand our product offering and increase our scale, enhancing our investment opportunities and optimizing selectivity rates, as we determine which credits provide the best risk adjusted returns for our stockholders. In early 2015, our Investment Adviser developed a key strategic relationship with Madison Capital, a prominent non-bank finance company that is a subsidiary of New York Life Insurance Company, which has allowed us to offer various lending solutions to potential borrowers and has increased our coverage of U.S. middle market private equity firms. Additionally, in early 2016, we agreed to co-invest with Credit Partners, a wholly owned subsidiary of a large Canadian pension fund, to form Credit Fund, a joint venture primarily focused on investing in first lien loans to middle market companies. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400 million each.
About Our Administrator
CGMSFA, a Delaware limited liability company, serves as our Administrator. Pursuant to the Administration Agreement, our Administrator provides services to us and we reimburse our Administrator for its costs and expenses and our allocable portion of overhead incurred by our Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the compensation of certain of our officers and staff. In addition, our Administrator has entered into the Carlyle Sub-Administration Agreements, which provide our Administrator with access to personnel. Our Administrator has also entered into the State Street Sub-Administration Agreement, pursuant to which State Street provides for certain administrative and professional services. State Street also serves as our custodian.
Competitive Strengths
Market Leading Direct Origination Platform. We have access to CPC’s strong direct origination platform, with coverage of over 200 private equity firms and over 150 lending institutions. We take a regional approach to client coverage with offices in New York City, Chicago and Los Angeles. The origination team is highly experienced, and maintains deep relationships with a broad network of financial sponsors, commercial and investment banks, and finance companies, which are expected to continue to generate a significant amount of investment opportunities.
Scaled Investment Platform and Capabilities. CPC is an established, scaled investment platform with the ability to invest across the entire capital structure. CPC’s broad capabilities and ability to offer a full financing
 
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solution give us access to a wide funnel of opportunities, allow us to select high quality credits, construct the optimal financing package as it relates to price and terms, assert greater control over documentation, and generate attractive risk-adjusted returns for our stockholders. We believe CPC’s hold sizes are among the largest in the middle market, which we believe results in the ability to generate premium economics, as sponsors are willing to pay higher spreads for financing certainty. CPC’s large hold sizes and strategic relationships enable us to provide certainty with regards to spreads, fees, structure and covenants. Furthermore, the breadth of CPC’s debt offerings also allows us to deploy capital at a measured pace across credit cycles and construct a portfolio that will perform in a broad range of economic conditions.
One Carlyle Capabilities Leading to Superior Credit Performance. We benefit from our Investment Adviser’s utilization of the broader resources of Carlyle, which includes access to Carlyle’s relationships and institutional knowledge from almost three decades of private market investing. Our underwriting process leverages Carlyle’s 625 investment professionals across multiple alternative investment asset classes, 34 operating executive consultants, information obtained through direct ownership of over 270 companies and lending relationships with over 500 companies, 11 credit industry research analysts, and in-house government affairs and economic research teams. Our systematic and consistent approach is augmented by industry expertise and tenured underwriting professionals who both lead our Investment Adviser’s investment team and serve on our Investment Adviser’s investment committee. Strong credit underwriting has been a key component of our investing process, where our Investment Adviser seeks to select borrowers whose businesses are expected to generate substantial cash flows, to have leading management teams, stable operating histories, high barriers to entry and meaningful equity value, and to retain significant value.
Experienced Investment Team and Alignment of Interests. Our Investment Adviser’s investment team comprises investment professionals in CPC who have extensive middle market lending experience. The investment team consists of 28 dedicated investment professionals. The seven members of our Investment Adviser’s investment committee have an average of 21 years of industry experience. We believe the breadth and depth of the investment team in sourcing, structuring, executing, and monitoring a broad range of private investments provides us with a significant competitive advantage in building a high quality portfolio of investments.
Certain members of the investment team, investment committee and Carlyle’s senior management team, employees and affiliates own approximately 5% of our outstanding common stock. In addition, in order to align the interests of our Investment Adviser’s investment professionals with our investors, our Investment Adviser pays a portion of the incentive fees that it receives from us to our Investment Adviser’s investment committee and certain investment team members, which may represent a significant component of such individual’s compensation.
Carefully Constructed Portfolio of Diversified Senior Secured, Floating Rate Loans. Our portfolio has been defensively constructed, exhibits strong credit quality, generates stable risk-adjusted returns and allows us to generate meaningful investment income, and consequently dividend income, for our stockholders. We have invested approximately $2.1 billion since our inception in directly originated middle market loans. Our portfolio is highly diversified by borrower, industry sector, sponsor relationships and other metrics. As of March 31, 2017, we had a portfolio of 94 investments in 82 portfolio companies across 30 industries and 54 unique sponsors. As of March 31, 2017, approximately 99% of our debt investments bore interest at floating rates, subject to interest rate floors, and 78.0% of our portfolio was invested in first-lien debt investments (including 12.1% first lien/last out loans).
Strategic Relationships . Our strategic relationships enhance our ability to provide full financing solutions to our borrowers, which results in our being able to generate optimal economics, significant access to diligence and control over documentation terms. Additionally, these relationships further strengthen our origination platform and ability to develop creative financing solutions to invest through the capital structure based on where we believe the best risk-adjusted return opportunities reside. Our Investment Adviser’s strategic relationship with Madison Capital, a leading middle market senior lender with approximately $8.0 billion of AUM as of
 
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March 31, 2017, allows us to offer a full unitranche financing solution. This product provides middle market companies with certainty for financing without syndication risk and generates attractive risk-adjusted returns on these investments for our stockholders. Madison Capital provides the first lien/first out portion of the unitranche loan, which allows us to provide the first lien/last out portion. Collectively, we and Madison Capital have provided over $900 million (before any repayments or exits) of unitranche loans to middle market companies. The relationship has been extremely successful, and we frequently invest alongside Madison Capital on a variety of investment opportunities (in addition to unitranche loans).
Separately, Credit Fund, our strategic joint venture with a large Canadian pension fund, primarily invests in first lien loans of middle-market companies. Since its inception and through March 31, 2017, Credit Fund has provided $603 million (before any repayments or exits) of senior secured loans. This joint venture provides us with an enhanced first lien loan product for certain transactions, thus further increasing our deal flow, and results in an increased number of borrowers in our portfolio, which provides strategic benefits as we build incumbent positions for future growth and investment opportunity.
The following highlights illustrate our accomplishments since the commencement of our operations:
 
 	•	 	Equity Capital Commitments and Investments—As of May 10, 2017, we had a total of $1.3 billion in total equity capital commitments. Of that total, and inclusive of the use of leverage and recycled proceeds from sales and paydowns, we have deployed $1.7 billion in 118 funded first lien debt investments, $274.0 million in 31 funded second lien debt investments, $126.6 million in 27 structured finance obligations, $6.6 million in 8 equity investments and $175.9 million in one investment fund through March 31, 2017.	
 
 	•	 	Credit Facilities and the 2015-1 Notes—On May 24, 2013, our wholly owned subsidiary, the SPV, entered into the SPV Credit Facility, with a maximum principal amount of $400 million. In addition, on March 21, 2014, we entered into the Credit Facility, with a maximum principal amount of $283 million. Further, on June 26, 2015, we completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, our wholly owned and consolidated subsidiary.	
 
 	•	 	Credit Platform Enhancements—Our Investment Adviser’s investment team has continued to expand and enhance all facets of the credit platform supporting us. Additional senior origination professionals were added during 2016 which meaningfully expanded the direct sourcing capabilities, bringing the total number of senior origination professionals to seven as of March 31, 2017. The scale of the direct origination platform allows us to maximize the investment opportunity set and increase overall investment selectivity. Direct origination has several important benefits including optimizing transaction economics, improving the strength of the loan documentation, and providing greater access to due diligence materials. Additional senior resources were added to the capital markets group, further enhancing investment sourcing and syndication capabilities with other lenders, including banks, finance companies, credit funds, and other business development companies. Additional professionals were added to the underwriting and portfolio management team to support the overall increase in investment activity and portfolio growth. This team works closely with the origination and capital markets professionals, as well as the CPC industry research analysts in executing all facets of transaction due diligence and portfolio management. Further enhancements and additions will be made as appropriate to ensure that our Investment Adviser’s investment team continues to have best in class execution across each segment of the business.	
 
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Market Opportunity
We believe the middle market lending environment provides attractive investment opportunities as a result of a combination of the following factors:
Favorable Market Environment. We believe the middle market remains one of the most attractive investment areas due to its large size, superior value relative to the broadly syndicated loan market, and supply-demand imbalance that continues to favor non-bank lenders. We believe market yields remain attractive and leverage levels at middle market companies are stable, creating a favorable investment environment.
Large and Growing U.S. Middle Market. The U.S. middle market is the largest market by many measures, which is expected to enable us to invest selectively as approximately 70% of middle market loan volume is sponsor-backed. According to S&P Capital IQ, as of December 31, 2016, there are over 70,000 U.S. middle market companies generating between $20 million and $1 billion in annual revenue, compared with approximately 3,500 companies with revenue greater than $1 billion. We believe these middle market companies, both sponsored and non-sponsored, represent a significant growth segment of the U.S. economy and often require substantial capital investments to grow.
Leverage, Pricing and Risk. According to the S&P Global Market Intelligence LCD Quarterly Leveraged Lending Review (Q4 2016), middle market companies are less levered, have larger equity contributions, experience lower rates of default, and achieve higher recoveries versus large cap broadly syndicated loans. Middle market loans also tend to achieve more attractive pricing and structures, including documentation, covenants and information/governance, than broadly syndicated loans. Over the 3 year period from 2014 to 2016, middle market loans have exhibited an approximate 200 basis points spread premium over broadly syndicated loans according to the S&P Global Market Intelligence LCD Leveraged Loan Index.
Market Environment Favors Non-Traditional Lenders. Traditional middle-market lenders, such as commercial and regional banks and commercial finance companies, have contracted their origination and lending activities and are focusing on more liquid asset classes or have exited the business. At the same time, institutional investors have sought to invest in larger, more liquid offerings, limiting the ability of middle-market companies to raise debt capital through public capital markets. This has resulted in other capital providers, such as specialty finance companies, structured-credit vehicles such as CLOs (collateralized loan obligations), BDCs, and private investment funds, actively investing in the middle market. We believe the aforementioned changes and restrictions have created a large and growing market opportunity for alternative lenders such as us.
Favorable Capital Markets Trends. Current and future demand for middle market financings, driven by private equity investment and upcoming maturities are expected to provide us with ample deal flow. Current data from the Thompson Reuters LPC Middle Market Weekly Report (January 27, 2017) suggests that approximately $615 billion of upcoming loan maturities for middle market companies are due between 2017 and 2022, and the PitchBook PE & VE Fundraising and Capital Overhang Report (1H 2016) suggests that there is over $657 billion of uninvested capital in 2011–2015 vintage private equity funds. We believe these refinancings and uninvested capital will provide a steady flow of attractive opportunities for well-positioned lenders with deep and longstanding sponsor and market relationships, particularly for providers of full capital structure financing solutions.
Benefits of Traditional Middle Market Focus. We believe there are significant advantages in our focus on the traditional middle market, a market we categorize to include borrowers with EBITDA in the range of approximately $10 million to $100 million. Traditional middle market companies are generally less levered than companies with EBITDA in excess of $100 million and loans to these borrowers offer more attractive economics in the form of upfront fees, spreads, and prepayment penalties. Senior secured middle market loans typically have strong defensive characteristics: these loans have priority in payment among a portfolio company’s security holders and they carry the least risk among investments in the capital structure; these investments, which are secured by the portfolio company’s assets, typically contain carefully structured covenant packages which allow
 
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lenders to take early action in situations where obligors underperform; and these characteristics can provide protection against credit deterioration. Middle market lenders like us are often able to complete more thorough due diligence investigations prior to investment than lenders in the broadly syndicated space.
NFIC Acquisition
On May 3, 2017, we entered into the Merger Agreement under which we have agreed, subject to the satisfaction of certain closing conditions, to acquire NFIC, a Maryland corporation, in a cash and stock transaction, which we refer to as the “NFIC Acquisition.” If NFIC stockholders approve the Merger Agreement, then pursuant to the Merger Agreement, at the effective time, subject to the satisfaction of specified closing conditions, NFIC will merge with and into us with us as the surviving entity in the NFIC Acquisition.
Upon the completion of the NFIC Acquisition, each share of NFIC common stock issued and outstanding immediately prior to the effective time of the NFIC Acquisition will be converted into the right to receive the Merger Consideration from us, in accordance with the elections of NFIC stockholders. Each NFIC stockholder is permitted to elect its Cash Percentage Election with respect to all shares of NFIC common stock held by such stockholder. The Cash Election Percentage elected by an NFIC stockholder shall not exceed 95%. The net asset value of the Merger Consideration (consisting of Acquisition Shares and cash, if any) that each NFIC stockholder is entitled to under the Merger Agreement will be equal to the net asset value of such NFIC stockholder’s shares of common stock in NFIC.
As of March 31, 2017, the fair value of NFIC’s investments was approximately $267.3 million in 75 portfolio companies. The following table sets forth the capitalization of NFIC and us, in each case, as of December 31, 2016, and the pro forma combined capitalization of us as if the NFIC Acquisition had occurred on that date assuming a 95% Cash Election Percentage.

 	  	TCG BDC	 	  	NFIC	 	  	Adjustments	 	  	TCG BDC Pro-Forma	 	
(dollar amounts in thousands, except per share data)	 	  	 	 	  	 	 	  	 	 	
Net Assets	  	$	764,137	 	  	$	155,546	 	  	$	(11,927	) 	  	$	907,756	 	
Shares Outstanding	  	 	41,702,318	 	  	 	8,156,316	 	  	 	(295,424	) 	  	 	49,563,210	 	
Net Asset Value Per Share	  	$	18.32	 	  	$	19.07	 	  	 	—  	 	  	$	18.32	 	
The actual financial positions and results of operations of NFIC and us prior to the NFIC Acquisition and that of the Company following the NFIC Acquisition may be different, possibly materially, from the unaudited pro forma metrics included in this section.
These pro forma net assets adjustments amounts include an estimated $328 thousand and $65 thousand in NFIC Acquisition expenses incurred by us and NFIC, respectively, on or before the closing of the NFIC Acquisition. Unexpected delays in completing the NFIC Acquisition or in connection with the post-merger integration process may significantly increase the related costs and expenses incurred by us and NFIC. Adjustments amounts also include net change in cash, debt and equity balances due to the NFIC Acquisition. In addition, the fair values used for valuing the portfolio of NFIC are derived using consistent valuation methodology as used to calculate the fair value of our portfolio. The change in the number of shares reflects the net result of the cancellation of NFIC’s existing shares and the issuance of additional shares by us to NFIC stockholders as consideration for the NFIC Acquisition and to our stockholders for capital calls to fund the NFIC Acquisition made prior to the date of this offering.
 
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The following table presents the type of investments as a percentage of fair value of us, NFIC and pro forma for the combined company as of December 31, 2016:

As of December 31, 2016	  	 	 	 	
 	  	% of Fair Value	 	
 	  	 	 	 	 	 	 	Combined	 	
 	  	TCG BDC	 	 	NFIC	 	 	Pro-Forma	 	
Type	  	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt	  	 	80.09	% 	 	 	96.36	% 	 	 	82.82	% 	
Second Lien Debt	  	 	12.08	% 	 	 	3.64	% 	 	 	10.67	% 	
Structured Finance Obligations	  	 	0.37	% 	 	 	0.00	% 	 	 	0.30	% 	
Equity Investments	  	 	0.46	% 	 	 	0.00	% 	 	 	0.38	% 	
Investment Fund	  	 	7.00	% 	 	 	0.00	% 	 	 	5.83	% 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total	  	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
The following table summarizes the Internal Risk Ratings of us, NFIC and pro forma for the combined company as of December 31, 2016:

As of December 31, 2016	  	 	 	 	 	 	 	 	 	 	 	 	
 	  	TCG BDC	 	 	NFIC	 	 	Combined Pro-Forma	 	
 	  	Fair Value	 	  	% of Fair Value	 	 	Fair Value	 	  	% of Fair Value	 	 	Fair Value	 	  	% of Fair Value	 	
(dollar amounts in millions)	  	 	 	  	 	 	 	 	 	  	 	 	 	 	 	  	 	 	
Internal Risk Rating 1	  	$	59.3	 	  	 	4.5	% 	 	$	11.9	 	  	 	4.2	% 	 	$	71.2	 	  	 	4.5	% 	
Internal Risk Rating 2	  	 	1,055.7	 	  	 	80.5	 	 	 	223.0	 	  	 	77.9	 	 	 	1,278.7	 	  	 	80.0	 	
Internal Risk Rating 3	  	 	100.9	 	  	 	7.7	 	 	 	23.2	 	  	 	8.1	 	 	 	124.1	 	  	 	7.8	 	
Internal Risk Rating 4	  	 	75.7	 	  	 	5.8	 	 	 	22.0	 	  	 	7.7	 	 	 	97.7	 	  	 	6.1	 	
Internal Risk Rating 5	  	 	12.2	 	  	 	0.9	 	 	 	3.5	 	  	 	1.2	 	 	 	15.7	 	  	 	1.0	 	
Internal Risk Rating 6	  	 	7.6	 	  	 	0.6	 	 	 	2.6	 	  	 	0.9	 	 	 	10.2	 	  	 	0.6	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total	  	$	1,311.4	 	  	 	100.0	% 	 	$	286.2	 	  	 	100.0	% 	 	$	1,597.6	 	  	 	100.0	% 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
As of December 31, 2016, the weighted average Internal Risk Rating of our and NFIC’s debt investment portfolio was 2.2 and 2.3, respectively.
As of December 31, 2016, we had (i) total assets of approximately $1.49 billion, (ii) total liabilities of approximately $0.73 billion and (iii) a net asset value per share of $18.32. Assuming the NFIC Acquisition was completed as of December 31, 2016, the combined company would have on a pro forma basis as of December 31, 2016 (i) total assets of more than $1.78 billion, (ii) total liabilities of more than $0.87 billion, and (iii) a net asset value per share of $18.32. The industrial and geographic compositions of our portfolio will not materially change as a result of the NFIC Acquisition. As of December 31, 2016, our and NFIC’s asset coverage calculated in accordance with the Investment Company Act was 209.97% and 219.26%, respectively. Assuming the NFIC Acquisition was completed as of December 31, 2016, the combined company would have on a pro forma basis weighted average yields of 7.95% and 8.01% for our first and second lien debt based on amortized cost and fair value, respectively, as of December 31, 2016. Based on fair value as of December 31, 2016, our and NFIC’s respective debt portfolios were invested in approximately 99% and 99%, respectively, of debt bearing a floating interest rate with an interest rate floor. Assuming the NFIC Acquisition was completed as of December 31, 2016, the combined company would have on a pro forma basis 99% of its debt portfolio invested in debt bearing a floating interest rate with an interest rate floor, as of December 31, 2016. The information presented in this paragraph and the immediately preceding paragraphs is provided for illustrative purposes only and does not necessarily indicate what the future assets, liabilities, net asset value or asset mix of the combined company will be following the NFIC Acquisition.
 
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Additionally, this pro forma information does not include any estimated net increase (decrease) in stockholders’ equity resulting from operations or other asset sales and repayments that are not already reflected that may occur between December 31, 2016 and the completion of the NFIC Acquisition.
The completion of the NFIC Acquisition is subject to certain conditions, including, among others, NFIC stockholder approval and other customary closing conditions. While there can be no assurances as to the exact timing, or that the NFIC Acquisition will be completed at all, the Company expects to complete the NFIC Acquisition in June 2017.
We cannot assure you that the NFIC Acquisition will be completed as scheduled, or at all. See “Risk Factors—Risks Related to the NFIC Acquisition” for a description of the risks that the company may face if the NFIC Acquisition is or is not completed.
Allocation of Investment Opportunities and Potential Conflicts of Interest
An affiliated investment fund, account or other similar arrangement currently formed or formed in the future and managed by our Investment Adviser or its affiliates may have overlapping investment objectives and strategies with our own and, accordingly, may invest in asset classes similar to those targeted by us. This creates potential conflicts in allocating investment opportunities among the Company and such other investment funds, accounts and similar arrangements, particularly in circumstances where the availability or liquidity of such investment opportunities is limited or where co-investments by the Company and other funds, accounts or arrangements are not permitted under applicable law, as discussed below.
For example, Carlyle sponsors several investment funds, accounts and other similar arrangements, including, without limitation, structured credit funds as well as future closed-end registered investment companies, business development companies, carry funds, managed accounts and structured credit funds. Investment opportunities in suitable negotiated investments for investment funds, accounts and other similar arrangements managed by our Investment Adviser are allocated in accordance with the Exemptive Relief. Investment opportunities for investment funds, accounts and other similar arrangements not managed by our Investment Adviser are allocated in accordance with our Investment Adviser’s and Carlyle’s other allocation policies and procedures. Such policies and procedures may result in certain investment opportunities that are attractive to us being allocated to other funds that are not managed by our Investment Adviser. In addition, in some cases the Investment Adviser may make investment recommendations to investment funds, accounts and similar arrangements where the investment funds, accounts and similar arrangements make the investment independently of the Investment Adviser. As a result, there are circumstances where investments appropriate for us are instead allocated, in whole or in part, to such other investment funds, accounts or other similar arrangements irrespective of the Investment Adviser’s policies regarding allocation of investments. Where Carlyle otherwise has discretion to allocate investment opportunities among various funds, accounts and other similar arrangements, it should be noted that Carlyle may determine to allocate such investment opportunities away from us.
Our Investment Adviser’s investment team forms the exclusive Carlyle platform for U.S. middle market debt investments. If Carlyle is presented with investment opportunities that generally fall within our investment objective and that of other Carlyle funds, accounts or other similar arrangements, whether focused on a debt strategy or otherwise, Carlyle allocates such opportunities among us and such other Carlyle funds, accounts or other similar arrangements, including other affiliated business development companies, in a manner consistent with the Exemptive Relief, our Investment Adviser’s allocation policies and procedures and Carlyle’s other allocation policies and procedures, where applicable. Carlyle’s, including our Investment Adviser’s, allocation policies and procedures are designed to allocate investment opportunities fairly and equitably among its clients over time, taking into account the sourcing of the transaction, the nature of the investment focus of each such other Carlyle fund, accounts or other similar arrangements, the relative amounts of capital available for investment, the nature and extent of involvement in the transaction on the part of the respective teams of
 
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investment professionals, any requirements contained in the governing agreements of the Carlyle funds, accounts or other similar arrangements and other considerations deemed relevant by Carlyle in good faith, including suitability considerations and reputational matters. The application of these considerations may cause differences in the performance of different Carlyle funds, accounts and similar arrangements that have similar strategies.
Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle.
We are also not permitted to make any co-investments with our Investment Adviser or its affiliates (including any fund managed by Carlyle) without exemptive relief from the SEC, subject to certain exceptions, including with respect to our downstream affiliates. The SEC has granted us Exemptive Relief that permits us and certain of our affiliates to co-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Adviser’s allocation policies and procedures.
While Carlyle and our Investment Adviser seek to implement their respective allocation processes in a fair and equitable manner under the particular circumstances, there can be no assurance that it will result in equivalent allocation of or participation in investment opportunities or equivalent performance of investments allocated to us as compared to the other entities. In some cases, due to information barriers that are in place, the Company and other Carlyle investment funds, accounts or other similar arrangements may compete with each other for specific investment opportunities without being aware that they are competing with each other. Carlyle has a conflict system in place above these information barriers to identify potential conflicts early in the process and determine if an allocation decision needs to be made. If the conflicts system detects a potential conflict, the legal and compliance departments of Carlyle assess investment opportunities to determine whether a particular investment opportunity is required to be allocated to a particular investment fund, account or other similar arrangement (including the Company) or is prohibited from being allocated to a particular investment fund, account or similar arrangement. Subject to a determination by the legal and compliance departments (if applicable), portfolio management teams are then charged with ensuring that investment opportunities are allocated to the appropriate investment fund, account or similar arrangement.
During periods of unusual market conditions, our Investment Adviser may deviate from its normal trade allocation practices. For example, this may occur with respect to the management of unlevered and/or long-only investment funds, accounts or similar arrangements that are typically managed on a side-by-side basis with levered and/or long-short investment funds, accounts or similar arrangements.
Investment Strategy
We target U.S. middle market companies, generally controlled by private equity investment firms that require capital for growth, acquisitions, recapitalizations, refinancings and leveraged buyouts. We may also make opportunistic loans to independently owned and publicly held middle market companies. We seek to partner with strong management teams executing long-term growth strategies. Target businesses typically exhibit some or all of the following characteristics:
 
 	•	 	EBITDA of $10—$100 million;	
 
 	•	 	Minimum of 35% original sponsor cash equity;	
 
 	•	 	Sustainable leading positions in their respective markets;	
 
 	•	 	Scalable revenues and operating cash flow;	
 
 	•	 	Experienced management teams with successful track records;	
 
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 	•	 	Stable, predictable cash flows with low technology and market risks;	
 
 	•	 	Diversified product offering and customer base;	
 
 	•	 	Low capital expenditures requirements;	
 
 	•	 	A North American base of operations;	
 
 	•	 	Strong customer relationships;	
 
 	•	 	Products, services or distribution channels having distinctive competitive advantages; and	
 
 	•	 	Defensible niche strategy or other barriers to entry.	
While we believe that the criteria listed above are important in identifying and investing in prospective portfolio companies, not all of these criteria will be necessarily met by each prospective portfolio company. In addition, we may change our investment objective and/or investment criteria over time without notice to or consent from our investors.
Investment Approach and Risk Monitoring of Investments
Our Investment Adviser utilizes a rigorous, systematic and consistent due diligence underwriting process to evaluate all investment opportunities. Our Investment Adviser’s investment teams primarily consist of origination professionals, research analysts and underwriters. An investment team works on a particular transaction from initial screening through closing, and the same team continues to monitor the credit for the life cycle of the investment.
We view our investment process as consisting of the phases described below:
Origination. Our Investment Adviser has built a strong direct origination platform with coverage of over 200 private equity firms and over 150 lending institutions. Our Investment Adviser’s origination team sources approximately 700 opportunities per year for us with an ultimate investment rate by us of less than 10% annually. The scale of our Investment Adviser’s origination platform allows us to maximize access to investment opportunities and enhance overall investment selectivity. We further seek to reduce risk by partnering with experienced sponsors with strong track records. We believe lending to companies owned by leading private equity firms (versus non-sponsored companies) has several important and potentially defensive characteristics. Sponsor involvement provides for:
 
 	•	 	maximization of investment opportunities as approximately 70% of middle market loan volume is sponsor backed as of December 31, 2016, according to the S&P Global Market Intelligence LCD Middle Market Fact Sheet;	
 
 	•	 	validation of enterprise value;	
 
 	•	 	support, as needed, in strategy, operations and governance of portfolio companies; and	
 
 	•	 	the potential for additional capital commitment by sponsor if company requires financial support.	
The origination team supplements these relationships through personal visits and marketing campaigns focused on maximizing investment deal flow. It is their responsibility to identify specific opportunities, refine opportunities through candid exploration of the underlying facts and circumstances and to apply creative and flexible solutions to solve clients’ financing needs. The origination personnel are located in New York, Chicago and Los Angeles. Each originator maintains long-standing relationships with potential sources of deal flow and is responsible for covering a specified target market. We believe those originators’ strength and breadth of relationships across a wide range of markets generate numerous financing opportunities, which should enable our Investment Adviser to be highly selective in recommending investments.
 
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Transaction Screening. After the senior originator has completed an initial screen, the investment team will prepare and present a consistent screening template that includes business description, proposed transaction financing structures, preliminary financial analysis, initial assessment of investment merits and key risks and market/industry considerations to a subset of our Investment Adviser’s investment committee. During this early stage, the investment team also assesses initial adherence with environmental, social, and governance policies. Based on feedback from the committee, the deal team will prepare and disseminate an outcome email that documents the takeaways from the meeting, including preferred financing structure as well as terms, key diligence items, and next steps.
Underwriting. The next step is full credit analysis and in-depth due diligence. During the investment process, the investment team works closely with the private equity sponsor in all aspects of due diligence, including onsite meetings, due diligence calls, and review of third party diligence reports. Our Investment Adviser also conducts an independent evaluation of the business, utilizing both internal and external sources. A key differentiator is our Investment Adviser’s integrated credit platform and collaborative efforts that leverage Carlyle’s broader resources, which include access to Carlyle’s relationships and institutional knowledge. This includes speaking to the private equity investment professionals (in accordance with information barrier restrictions), Carlyle operating executives, Carlyle’s Chief Economist & Director of Research, Carlyle’s Government Affairs professionals, and any executive within Carlyle’s private equity portfolio. In addition, we utilize multiple third party expert networks to supplement its work to gain further insight into company and industry factors from various thought leaders across the company’s markets. From the multiple diligence sources noted above, the deal team will prepare a highly detailed approval memo that includes, but is not limited to, the following:
 
 	•	 	Overview of the opportunity and investment team recommendation	
 
 	•	 	Structure, terms and pricing of the proposed facilities	
 
 	•	 	Sources and uses	
 
 	•	 	Sponsor background, history	
 
 	•	 	Risks and mitigants	
 
 	•	 	Detailed analysis of historical financial statements, including analysis of EBITDA adjustments, where appropriate	
 
 	•	 	Projections, including management/sponsor case and base case, with assumptions clearly described, including revenue and EBITDA bridge, where appropriate	
 
 	•	 	Downside case analysis	
 
 	•	 	Fixed/variable cost analysis	
 
 	•	 	Business/product description	
 
 	•	 	Customers & suppliers	
 
 	•	 	Industry trends and analysis	
 
 	•	 	Competition	
 
 	•	 	Management	
 
 	•	 	Legal, environmental, regulatory issues (if applicable)	
 
 	•	 	Capital markets/syndication strategy (if applicable)	
 
 	•	 	Items as to which approval is conditional and which require further due diligence and/or subsequent resolution	
 
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Monitoring. We view proactive portfolio monitoring as a vital part of the investment process. Our Investment Adviser utilizes a proprietary credit surveillance report and software system, an objective rules-based Internal Risk Rating system and proprietary valuation model to assess risk in the portfolio. In addition to monthly portfolio reviews, our Investment Adviser compiles a quarterly risk report that examines, among other metrics, migration in portfolio and loan level investment mix, industry diversification, Internal Risk Ratings, revenue, EBITDA, and leverage. Our Investment Adviser supplements these policies with additional analyses and projections, including stress scenarios, to assess the potential exposure of our portfolio to variable macroeconomic factors and market conditions.
Portfolio Composition
As of March 31, 2017 and December 31, 2016, the fair value of our investments was approximately $1,392.5 million and $1,422.8 million, respectively, in 82 and 86 portfolio companies/structured finance obligations/investment fund, respectively. The type, geography and industry composition of our non-controlled/non-affiliated investments as a percentage of fair value as of March 31, 2017 and December 31, 2016 was each as follows:

 	  	As of
March 31,	 	 	As of
December 31,	 	
Type—% of Fair Value	  	2017	 	 	2016	 	
First Lien Debt	  	 	77.95	% 	 	 	80.09	% 	
Second Lien Debt	  	 	11.61	 	 	 	12.08	 	
Structured Finance Obligations	  	 	0.20	 	 	 	0.37	 	
Equity Investments	  	 	0.61	 	 	 	0.46	 	
Investment Fund	  	 	9.63	 	 	 	7.00	 	
 	  	 	 	 	 	 	 	 	
Total	  	 	100.00	% 	 	 	100.00	% 	

 	 	 	 	 	 	 	 	 	
 	  	As of
March 31,	 	 	As of
December 31,	 	
Type—% of Fair Value of First and Second Lien Debt	  	2017	 	 	2016	 	
Floating Rate	  	 	99.20	% 	 	 	99.25	% 	
Fixed Rate	  	 	0.80	 	 	 	0.75	 	
 	  	 	 	 	 	 	 	 	
Total	  	 	100.00	% 	 	 	100.00	% 	

 	 	 	 	 	 	 	 	 	
 	  	As of
March 31,	 	 	As of
December 31,	 	
Geography—% of Fair Value	  	2017	 	 	2016	 	
Cayman Islands	  	 	0.20	% 	 	 	0.37	% 	
United Kingdom	  	 	1.49	 	 	 	1.47	 	
United States	  	 	98.31	 	 	 	98.16	 	
 	  	 	 	 	 	 	 	 	
Total	  	 	100.00	% 	 	 	100.00	% 	

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 	  	As of
March 31,	 	 	As of
December 31,	 	
Industry—% of Fair Value	  	2017	 	 	2016	 	
Aerospace & Defense	  	 	4.44	% 	 	 	4.31	% 	
Automotive	  	 	1.99	 	 	 	2.70	 	
Banking, Finance, Insurance & Real Estate	  	 	10.70	 	 	 	10.59	 	
Beverage, Food & Tobacco	  	 	1.11	 	 	 	1.08	 	
Business Services	  	 	8.73	 	 	 	9.97	 	
Capital Equipment	  	 	2.70	 	 	 	2.62	 	
Chemicals, Plastics & Rubber	  	 	1.42	 	 	 	1.39	 	
Construction & Building	  	 	1.70	 	 	 	1.67	 	
Consumer Services	  	 	6.00	 	 	 	5.62	 	
Containers, Packaging & Glass	  	 	3.43	 	 	 	3.35	 	
Durable Consumer Goods	  	 	1.39	 	 	 	1.40	 	
Energy: Electricity	  	 	2.65	 	 	 	2.59	 	
Energy: Oil & Gas	  	 	0.77	 	 	 	0.77	 	
Environmental Industries	  	 	2.99	 	 	 	2.90	 	
Forest Products & Paper	  	 	1.72	 	 	 	1.68	 	
Healthcare & Pharmaceuticals	  	 	11.84	 	 	 	11.36	 	
High Tech Industries	  	 	3.24	 	 	 	3.26	 	
Hotel, Gaming & Leisure	  	 	2.15	 	 	 	2.11	 	
Investment Fund	  	 	9.63	 	 	 	7.00	 	
Media: Advertising, Printing & Publishing	  	 	4.21	 	 	 	5.06	 	
Metals & Mining	  	 	0.74	 	 	 	0.72	 	
Non-durable Consumer Goods	  	 	2.00	 	 	 	2.06	 	
Retail	  	 	0.59	 	 	 	0.58	 	
Software	  	 	0.81	 	 	 	0.79	 	
Sovereign & Public Finance	  	 	0.13	 	 	 	—  	 	
Structured Finance	  	 	0.20	 	 	 	0.37	 	
Telecommunications	  	 	6.11	 	 	 	7.76	 	
Transportation: Cargo	  	 	2.48	 	 	 	2.41	 	
Transportation: Consumer	  	 	1.97	 	 	 	1.96	 	
Wholesale	  	 	2.16	 	 	 	1.92	 	
 	  	 	 	 	 	 	 	 	
Total	  	 	100.00	% 	 	 	100.00	% 	
 	  	 	 	 	 	 	 	 	
See the Consolidated Schedules of Investments as of March 31, 2017 and December 31, 2016 in our consolidated financial statements for more information on these investments, including a list of companies and type, cost and fair value of investments which are included in our consolidated financial statements included in this prospectus.
Competition
Our primary competitors in providing financing to middle market companies include public and private funds, other BDCs, commercial and investment banks, collateralized loan obligations, commercial finance companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that will not be available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments than we do, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the Investment Company Act and the Code impose on us. We cannot assure you that the competitive pressures we will face will not have a material adverse effect on our business, financial condition
 
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and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.
We expect to use the expertise of the members of our Investment Adviser’s investment committee and its investment team to assess investment risks and determine appropriate pricing for our investments. In addition, we expect that the relationships developed by our Investment Adviser’s investment team will enable us to learn about and compete effectively for, financing opportunities with attractive middle market companies in the industries in which we seek to invest. For additional information concerning the competitive risks we face, see “Risk Factors—Risks Related to Our Investments—We operate in a highly competitive market for investment opportunities, and compete with investment vehicles sponsored or advised by our affiliates.”
Staffing
We do not currently have any employees. Our Chief Financial Officer and Treasurer and Chief Operating Officer, each a Managing Director of Carlyle, and our Chief Compliance Officer and Secretary, a Director of Carlyle, are retained by our Administrator pursuant to the Carlyle Sub-Administration Agreements. Each of these professionals performs their respective functions for us under the terms of our Administration Agreement.
Our day-to-day investment operations are managed by our Investment Adviser. Pursuant to its personnel agreement with Carlyle Employee Co., our Investment Adviser has access to the members of its investment committee, and a team of additional experienced investment professionals who, collectively, comprise the Investment Adviser’s investment team. Our Investment Adviser may hire additional investment professionals to provide services to us.
Properties
We maintain our principal executive office at 520 Madison Avenue, 40th Floor, New York, New York 10022. We do not own any real estate.
Legal Proceedings
From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under loans to or other contracts with our portfolio companies. We and our Investment Adviser are not currently subject to any material legal proceedings, and, to our knowledge, no material legal proceeding is threatened against us.
 
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PORTFOLIO COMPANIES
The table set forth below contains certain information as of March 31, 2017 for each portfolio company in which we had an investment. Other than these investments, our only formal relationships with our portfolio companies are the managerial assistance that we may provide upon request and any board observer or participation rights we may receive in connection with our investment. In general, under the Investment Company Act, we would be presumed to “control” a portfolio company if we owned more than 25% of its voting securities and would be an “affiliate” of a portfolio company if we owned more than 5% of its outstanding voting securities. As a result, for purposes of the Investment Company Act, we are presumed to control Middle Market Credit Fund, LLC.

Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest
Rate	 	Maturity	 	Par/
Principal/
Shares	 	 	Amortized
Cost  (1)	 	 	Fair
Value	 	 	Percentage
of Class
Held	 	
Equity and Debt Investments (6)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Access CIG, LLC	 	Business Services	 	First Lien	 	L + 5.00%
(1% Floor)	 	10/17/2021	 	 	18,289	 	 	 	18,180	 	 	 	18,313	 	 	 	—  	 	
6818 A Patterson Pass Road
Livermore, CA 94550	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Advanced Instruments, LLC	 	Healthcare & Pharmaceuticals	 	First Lien	 	L + 5.25%
(1% Floor)	 	10/31/2022	 	 	10,500	 	 	 	10,287	 	 	 	10,476	 	 	 	—  	 	
2 Technology Way
Norward, MA 02062	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
AIM Group USA Inc.	 	Aerospace & Defense	 	Second Lien	 	L + 9.00%
(1% Floor)	 	8/2/2022	 	 	23,000	 	 	 	22,710	 	 	 	23,025	 	 	 	—  	 	
705 SW 7th Street
Renton, WA 98057	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Alpha Packaging Holdings, Inc.	 	Containers, Packaging & Glass	 	First Lien	 	L + 4.25%
(1% Floor)	 	5/12/2020	 	 	11,293	 	 	 	11,285	 	 	 	11,293	 	 	 	—  	 	
1555 Page Industrial Blvd
St. Louis, MO 63132	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
AmeriLife Group, LLC	 	Banking, Finance, Insurance & Real Estate	 	Second Lien	 	L + 8.75%
(1% Floor)	 	1/10/2023	 	 	20,000	 	 	 	19,665	 	 	 	19,318	 	 	 	—  	 	
2650 McCormick Drive
Clearwater, FL 33759	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Anaren, Inc.	 	Telecommunications	 	First Lien	 	L + 4.50%
(1% Floor)	 	2/18/2021	 	 	3,849	 	 	 	3,826	 	 	 	3,849	 	 	 	—  	 	
6635 Kirkville Road
East Syracuse, NY 13057	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Argon Medical Devices, Inc.	 	Healthcare & Pharmaceuticals	 	Second Lien	 	L + 9.50%
(1% Floor)	 	6/23/2022	 	 	24,000	 	 	 	23,381	 	 	 	24,437	 	 	 	—  	 	
5151 Headquarters Drive
Suite 210
Plano, TX 75024	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Audax AAMP Holdings, Inc.	 	Durable Consumer Goods	 	First Lien	 	L + 6.50%
(1% Floor)	 	6/24/2017	 	 	10,274	 	 	 	10,260	 	 	 	9,789	 	 	 	—  	 	
13190 56th Ct N #401
Clearwater, FL 33760	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
BAART Programs, Inc.	 	Healthcare & Pharmaceuticals	 	First Lien	 	L + 7.75%
(0% Floor)	 	10/9/2021	 	 	7,388	 	 	 	7,339	 	 	 	7,535	 	 	 	—  	 	
401 E. Corporate Drive,
Suite 220
Lewisville, TX 75057	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Berlin Packaging L.L.C.	 	Containers, Packaging & Glass	 	Second Lien	 	L + 6.75%
(1% Floor)	 	10/1/2022	 	 	2,927	 	 	 	2,910	 	 	 	2,949	 	 	 	—  	 	
525 West Monroe Street
14th Floor
Chicago, IL 60661	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Brooks Equipment Company, LLC	 	Construction & Building	 	First Lien	 	L + 5.00%
(1% Floor)	 	8/29/2020	 	 	6,694	 	 	 	6,659	 	 	 	6,682	 	 	 	—  	 	
10926 David Taylor Drive Suite 300
Charlotte, NC 28262	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
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Table of Contents
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest
Rate	 	Maturity	 	Par/
Principal/
Shares	 	 	Amortized
Cost  (1)	 	 	Fair
Value	 	 	Percentage
of Class
Held	 	
 	 	 	 	 	 	 	 	 	
Capstone Logistics Acquisition, Inc.	 	Transportation: Cargo	 	First Lien	 	L + 4.50% (1%
Floor)	 	10/7/2021	 	 	19,478	 	 	 	19,343	 	 	 	19,445	 	 	 	—  	 	
16525 The Corners Parkway
Peachtree Corners, GA 30092	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Captive Resources Midco, LLC	 	Banking, Finance, Insurance & Real Estate	 	First Lien	 	L + 5.75% (1%
Floor)	 	6/30/2020	 	 	29,975	 	 	 	28,630	 	 	 	28,975	 	 	 	—  	 	
201 East Commerce Drive
Schaumburg, IL 60173	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Central Security Group, Inc.	 	Consumer Services	 	First Lien	 	L + 5.63%
(1% Floor)	 	10/6/2020	 	 	28,584	 	 	 	28,247	 	 	 	28,499	 	 	 	—  	 	
2448 E. 81st Street, Suite 4300
Tulsa, OK 74137	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Charter NEX US Holdings, Inc.	 	Chemicals, Plastics & Rubber	 	Second Lien	 	L + 8.25%
(1% Floor)	 	2/5/2023	 	 	7,394	 	 	 	7,305	 	 	 	7,394	 	 	 	—  	 	
1264 East High Street
Milton, WI 53563	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
CIP Revolution Holdings, LLC	 	Media: Advertising,
Printing &
Publishing	 	First Lien	 	L + 6.00%
(1% Floor)	 	8/19/2021	 	 	16,500	 	 	 	16,332	 	 	 	16,783	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
CIP Revolution Investments, LLC	 	 	 	LLC
interest	 	 	 	 	 	 	30,000	 	 	 	300	 	 	 	411	 	 	 	0.58	% 	
4680 Parkway Drive, Suite 202
Mason, OH 45040	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Colony Hardware Corporation	 	Construction &
Building	 	First Lien	 	L + 6.00%
(1% Floor)	 	10/23/2021	 	 	16,995	 	 	 	16,773	 	 	 	16,995	 	 	 	—  	 	
269 S. Lambert Road
Orange, CT 06477	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Confie Seguros Holding II Co.	 	Banking, Finance,
Insurance & Real
Estate	 	Second
Lien	 	L + 9.00%
(1.25% Floor)	 	5/8/2019	 	 	9,000	 	 	 	8,945	 	 	 	8,947	 	 	 	—  	 	
7711 Center Avenue, Suite 200
Huntington Beach, CA 92647	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Datapipe, Inc.	 	Telecommunications	 	First Lien	 	L + 4.75%
(1% Floor)	 	3/15/2019	 	 	9,725	 	 	 	9,650	 	 	 	9,753	 	 	 	—  	 	
10 Exchange Place
Jersey City, NJ 07302	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Dent Wizard International Corporation	 	Automotive	 	First Lien	 	L + 4.75%
(1% Floor)	 	4/7/2020	 	 	7,216	 	 	 	7,192	 	 	 	7,208	 	 	 	—  	 	
4710 Earth City Expressway
Bridgeton, MO 63044-3831	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Derm Growth Partners III, LLC
(Dermatology Associates)	 	Healthcare &
Pharmaceuticals	 	First Lien	 	L + 6.50%
(1% Floor)	 	5/31/2022	 	 	41,005	 	 	 	40,468	 	 	 	40,842	 	 	 	—  	 	
1720 S. Beckham Ave, Suite 102 Tyler,
Texas 75701	 	 	 	LLC
interest	 	 	 	 	 	 	1,000,000	 	 	 	1,000	 	 	 	1,230	 	 	 	0.49	% 	
 	 	 	 	 	 	 	 	 	
DermaRite Industries, LLC	 	Healthcare & Pharmaceuticals	 	First Lien	 	L + 7.00%
(1% Floor)	 	3/3/2022	 	 	16,724	 	 	 	16,381	 	 	 	16,507	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
7777 West Side Ave.
North Bergen, NJ 07047	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
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Table of Contents
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest
Rate	 	Maturity	 	Par/
Principal/
Shares	 	 	Amortized
Cost  (1)	 	 	Fair
Value	 	 	Percentage
of Class
Held	 	
 	 	 	 	 	 	 	 	 	
Dimensional Dental Management, LLC	 	Healthcare &
Pharmaceuticals	 	First
Lien (4)	 	L + 7.00%
(1% Floor)	 	2/12/2021	 	 	19,066	 	 	 	18,684	 	 	 	19,129	 	 	 	—  	 	
1030 St. Georges Avenue
Suite 401
Avenel, NJ 07001-1327	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Drew Marine Group Inc.	 	Chemicals,
Plastics & Rubber	 	Second
Lien	 	L + 7.00%
(1% Floor)	 	5/19/2021	 	 	12,500	 	 	 	12,482	 	 	 	12,373	 	 	 	—  	 	
100 South Jefferson Road
Whippany, NJ 07981	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Dimora Brands, Inc.
(fka TK USA Enterprises, Inc.)	 	Construction & Building	 	First Lien	 	L + 4.50%
(1% Floor)	 	4/4/2022	 	 	—  	 	 	 	(57	) 	 	 	(14	) 	 	 	—  	 	
P.O. Box 779
Bell Mead, NJ 08502	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Direct Travel, Inc.	 	Hotel, Gaming & Leisure	 	First Lien	 	L + 6.50%
(1% Floor)	 	12/1/2021	 	 	12,782	 	 	 	12,382	 	 	 	12,708	 	 	 	—  	 	
7430 E. Caley Avenue
Suite 220 E
Centinnial, CO 80111	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
EIP Merger Sub, LLC (Evolve IP)	 	Telecommunications	 	First Lien (4)	 	L + 6.25%
(1% Floor)	 	6/7/2021	 	 	23,750	 	 	 	23,119	 	 	 	23,356	 	 	 	—  	 	
989 Old Eagle School Road
Wayne, PA 19087	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
EP Minerals, LLC	 	Metals & Mining	 	First Lien	 	L + 4.50%
(1% Floor)	 	8/20/2020	 	 	10,238	 	 	 	10,207	 	 	 	10,237	 	 	 	—  	 	
9785 Gateway Drive
Reno, NV 89521	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
FCX Holdings Corp.	 	Capital Equipment	 	First Lien	 	L + 4.50%
(1% Floor)	 	8/4/2020	 	 	9,849	 	 	 	9,845	 	 	 	9,849	 	 	 	—  	 	
3000 East 14th Avenue
Columbus, OH 43219	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Genex Holdings, Inc.	 	Banking, Finance,
Insurance & Real
Estate	 	First Lien	 	L + 4.25%
(1% Floor)	 	5/30/2021	 	 	4,189	 	 	 	4,177	 	 	 	4,181	 	 	 	—  	 	
440 E Swedesford Rd
Wayne, PA 19087	 	 	 	Second
Lien	 	L + 7.75%
(1% Floor)	 	5/30/2022	 	 	7,990	 	 	 	7,917	 	 	 	7,990	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
Global Software, LLC	 	High Tech
Industries	 	First Lien	 	L + 5.50%
(1% Floor)	 	5/2/2022	 	 	20,963	 	 	 	20,595	 	 	 	20,734	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
GS Holdco LLC (Global Software, LLC)	 	 	 	LLC
interest	 	 	 	 	 	 	1,000,000	 	 	 	1,001	 	 	 	1,207	 	 	 	1.96	% 	
3201 Beechleaf Court, Suite 170
Raleigh, NC 27604	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Green Energy Partners/Stonewall LLC	 	Energy: Electricity	 	First Lien	 	L + 5.50%
(1% Floor)	 	11/13/2021	 	 	16,600	 	 	 	16,479	 	 	 	16,612	 	 	 	—  	 	
4100 Spring Valley Rd. Suite 1001
Dallas, TX 75244	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Green Plains II LLC	 	Beverage, Food & Tobacco	 	First Lien	 	L + 7.00%
(1% Floor)	 	10/3/2021	 	 	15,229	 	 	 	15,089	 	 	 	15,465	 	 	 	—  	 	
12604 Hiddencreek Way
Suite A
Cerritos, CA 90703	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Hummel Station LLC	 	Energy: Electricity	 	First Lien	 	L + 6.00%
(1% Floor)	 	10/27/2022	 	 	21,000	 	 	 	20,331	 	 	 	20,292	 	 	 	—  	 	
5001 Spring Valley Rd. Suite 1150
Dallas, TX 75244	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Imagine! Print Solutions, LLC	 	Media: Advertising,
Printing &
Publishing	 	First Lien	 	L + 6.00%
(1% Floor)	 	3/30/2022	 	 	18,414	 	 	 	18,177	 	 	 	18,414	 	 	 	—  	 	
1000 Valley Park Drive
Minneapolis, MN 55379	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Imperial Bag & Paper Co. LLC	 	Forest Products &
Paper	 	First Lien	 	L + 6.00%
(1% Floor)	 	1/7/2022	 	 	24,013	 	 	 	23,705	 	 	 	23,983	 	 	 	—  	 	
255 Route 1 & 9
Jersey City , NJ 07306	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
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Table of Contents
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest
Rate	 	Maturity	 	Par/
Principal/
Shares	 	 	Amortized
Cost  (1)	 	 	Fair
Value	 	 	Percentage
of Class
Held	 	
 	 	 	 	 	 	 	 	 	
Indra Holdings Corp. (Totes Isotoner)	 	Non-durable
Consumer Goods	 	First Lien	 	L + 4.25%
(1% Floor)	 	5/1/2021	 	 	14,224	 	 	 	14,135	 	 	 	9,264	 	 	 	—  	 	
9655 International Blvd
Cincinnati, OH 45246	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Institutional Shareholder Services Inc.	 	Banking, Finance,
Insurance & Real
Estate	 	Second
Lien	 	L + 8.50%
(1% Floor)	 	4/29/2022	 	 	12,500	 	 	 	12,409	 	 	 	12,448	 	 	 	—  	 	
7 World Trade Center
New York, NY 10007	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
International Medical Group, Inc.	 	Banking, Finance,
Insurance & Real
Estate	 	First
Lien (4)	 	L + 6.50%
(1% Floor)	 	10/30/2020	 	 	30,000	 	 	 	29,526	 	 	 	30,371	 	 	 	—  	 	
2960 North Meridian Street
Indianapolis, IN 46208	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Jackson Hewitt Inc.	 	Retail	 	First Lien	 	L + 7.00%
(1% Floor)	 	7/30/2020	 	 	8,758	 	 	 	8,632	 	 	 	8,276	 	 	 	—  	 	
3 Sylvan Way, Suite 301
Parsippany, NJ 07054	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Jazz Acquisition, Inc. (Wencor)	 	Aerospace &
Defense	 	Second Lien	 	L + 6.75%
(1% Floor)	 	6/19/2022	 	 	6,700	 	 	 	6,677	 	 	 	5,901	 	 	 	—  	 	
1625 N 1100 W
Springville, UT 84663	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Legacy.com Inc.	 	High Tech Industries	 	First Lien	 	L + 6.00%
(1% Floor)	 	3/20/2023	 	 	17,000	 	 	 	16,619	 	 	 	16,708	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
820 Davis Street, Suite 210
Evanston, IL 60201	 	 	 	Shares	 	 	 	 	 	 	1,500,000	 	 	 	1,500	 	 	 	1,500	 	 	 	1.11	% 	
 	 	 	 	 	 	 	 	 	
Metrogistics LLC	 	Transportation Cargo	 	First Lien	 	L + 6.50%
(1% Floor)	 	9/30/2022	 	 	15,105	 	 	 	14,900	 	 	 	15,105	 	 	 	—  	 	
110 Rock Cliff Court
Suite D
Saint Louis, MO 63123	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
MRI Software, LLC	 	Software	 	Second Lien	 	L + 8.00%
(1% Floor)	 	6/23/2022	 	 	11,250	 	 	 	11,115	 	 	 	11,305	 	 	 	—  	 	
28925 Fountain
Parkway Solon, OH 44139	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
National Technical Systems, Inc.	 	Aerospace &
Defense	 	First Lien	 	L + 6.25%
(1% Floor)	 	6/12/2021	 	 	25,123	 	 	 	24,867	 	 	 	24,234	 	 	 	—  	 	
24007 Ventura Boulevard
Calabasas, CA 91302	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
NES Global Talent Finance US LLC(2)	 	Energy:
Oil & Gas	 	First Lien	 	L + 5.50%
(1% Floor)	 	10/3/2019	 	 	11,094	 	 	 	10,985	 	 	 	10,751	 	 	 	—  	 	
Station House Stamford New Road
Altrincham,
Cheshire WA14 1EP Manchester, UK	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
OnCourse Learning Corporation	 	Consumer
Services	 	First Lien	 	L + 6.50%
(1% Floor)	 	9/12/2021	 	 	26,077	 	 	 	25,724	 	 	 	26,288	 	 	 	—  	 	
20225 Water Town Blvd. 4th Floor
Brookfield, WI 53045	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Paradigm Acquisition Corp.	 	Business
Services	 	First Lien	 	L + 5.00%
(1% Floor)	 	6/2/2022	 	 	11,217	 	 	 	11,086	 	 	 	11,217	 	 	 	—  	 	
1277 Treat Boulevard, Suite 800 Walnut
Creek, CA 94597	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Pelican Products, Inc.	 	Containers,
Packaging &
Glass	 	First Lien	 	L + 4.25%
(1% Floor)	 	4/11/2020	 	 	7,623	 	 	 	7,634	 	 	 	7,604	 	 	 	—  	 	
23215 Early Ave
Torrance, CA 90505	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Plano Molding Company, LLC	 	Hotel,
Gaming &
Leisure	 	First Lien	 	L + 7.50%
(1% Floor)	 	5/12/2021	 	 	18,117	 	 	 	17,990	 	 	 	17,262	 	 	 	—  	 	
431 E. South St
Plano, IL 60545	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
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Table of Contents
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest
Rate	 	Maturity	 	Par/
Principal/
Shares	 	 	Amortized
Cost  (1)	 	 	Fair
Value	 	 	Percentage
of Class
Held	 	
 	 	 	 	 	 	 	 	 	
Power Stop, LLC (5)	 	Automotive	 	Mezzanine
Loan	 	11.00%	 	5/29/2022	 	 	10,000	 	 	 	9,836	 	 	 	9,957	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
Power Stop Intermediate Holdings, LLC	 	 	 	LLC
Interest	 	 	 	 	 	 	7,150	 	 	 	715	 	 	 	1,314	 	 	 	0.72	% 	
6112 W. 73rd Street, Unit C
Bedford Park, IL 60638	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
PPT Management Holdings, LLC	 	Healthcare & Pharmaceuticals	 	First Lien	 	L+6.00% (1%
Floor)	 	12/16/2022	 	 	22,444	 	 	 	22,240	 	 	 	22,457	 	 	 	—  	 	
333 Earle Ovington
Suite 225
Uniondale, NY 11553	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Premier Senior Marketing, LLC	 	Banking,
Finance,
Insurance &
Real Estate	 	First Lien	 	L + 5.00%
(1% Floor)	 	7/1/2022	 	 	3,731	 	 	 	3,683	 	 	 	3,731	 	 	 	—  	 	
705 W Benjamin Ave.
Norfolk, NE 68701	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Product Quest Manufacturing, LLC	 	Containers,
Packaging & Glass	 	First Lien (4)	 	L + 5.75%
(1% Floor)	 	9/9/2020	 	 	28,000	 	 	 	27,588	 	 	 	25,864	 	 	 	—  	 	
330 Carswell Avenue
Daytona Beach, FL 32117	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Prowler Acquisition Corp.
(Pipeline Supply and Service, LLC)	 	Wholesale	 	First Lien	 	L + 4.50%
(1% Floor)	 	1/28/2020	 	 	10,769	 	 	 	10,714	 	 	 	8,773	 	 	 	—  	 	
1010 Lamar, Suite 1320
Houston, TX 77022	 	 	 	Second Lien	 	L + 8.50%
(1% Floor)	 	7/28/2020	 	 	3,000	 	 	 	2,962	 	 	 	1,856	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
PSC Industrial Holdings Corp	 	Environmental
Industries	 	First Lien	 	L + 4.75%
(1% Floor)	 	12/5/2020	 	 	11,730	 	 	 	11,653	 	 	 	11,482	 	 	 	—  	 	
5151 San Felipe, Suite 1600
Houston, TX 77056	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
PT Intermediate Holdings III,
LLC (Parts Town)	 	Wholesale	 	First Lien	 	L + 6.50%
(1% Floor)	 	6/23/2022	 	 	19,545	 	 	 	19,336	 	 	 	19,447	 	 	 	—  	 	
1150A N Swift Rd
Addison, IL 60101	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
QW Holding Corporation (Quala)	 	Environmental
Industries	 	First Lien	 	L + 6.75%
(1% Floor)	 	8/31/2022	 	 	29,925	 	 	 	29,122	 	 	 	30,131	 	 	 	—  	 	
1302 N. 19th Street, Suite 300
Tampa, FL 33605	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Reliant Pro Rehab, LLC	 	Healthcare &
Pharmaceuticals	 	First Lien (4)	 	L+10.00%
(1% Floor)	 	12/29/2017	 	 	22,275	 	 	 	22,101	 	 	 	22,264	 	 	 	—  	 	
6860 Dallas Parkway, Suite 500
Plano, TX 75024	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
SolAero Technologies Corp.	 	Telecommunications	 	First Lien	 	L + 5.25%
(1% Floor)	 	12/10/2020	 	 	19,418	 	 	 	19,292	 	 	 	18,049	 	 	 	—  	 	
10420 Research Road, SE
Albuquerque, NM 87123	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Superior Health Linens, LLC	 	Business Services	 	First Lien	 	L + 6.50%
(1% Floor)	 	9/30/2021	 	 	19,208	 	 	 	18,908	 	 	 	19,012	 	 	 	—  	 	
5005 S. Packard Ave.
Cudahy, WI 53110	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
T2 Systems, Inc.	 	Transportation:
Consumer	 	First Lien	 	L + 6.75%
(1% Floor)	 	9/28/2022	 	 	4,040	 	 	 	3,946	 	 	 	4,045	 	 	 
	—  

 	 	 	 	 	 	 	 	 	
T2 Systems Canada, Inc.	 	 	 	First Lien	 	L + 6.75%
(1% Floor)	 	9/28/2022	 	 	22,892	 	 	 	22,298	 	 	 	22,924	 	 	 	—  	 	
T2 Systems Parent Corporation	 	 	 	Shares	 	 	 	 	 	 	555,556	 	 	 	556	 	 	 	533	 	 	 	—  	 	
8900 Keystone Crossing Suite 700
Indianapolis, IN 46240	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
The Hilb Group, LLC	 	Banking, Finance,
Insurance & Real
Estate	 	First Lien (4)	 	L + 6.00%
(1% Floor)	 	6/24/2021	 	 	31,313	 	 	 	30,744	 	 	 	30,849	 	 	 	—  	 	
 
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Table of Contents
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest
Rate	 	Maturity	 	Par/
Principal/
Shares	 	 	Amortized
Cost  (1)	 	 	Fair
Value	 	 	Percentage
of Class
Held	 	
 	 	 	 	 	 	 	 	 	
THG Acquisition, LLC (The Hilb Group,
LLC)	 	 	 	LLC
Interest	 	 	 	 	 	 	1,500,000	 	 	 	1,500	 	 	 	2,256	 	 	 	—  	 	
8720 Stony Point Parkway Suite 125
Richmond, VA 23235	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
The SI Organization, Inc.	 	Aerospace &
Defense	 	First Lien	 	L + 4.75%
(1% Floor)	 	11/23/2019	 	 	8,552	 	 	 	8,507	 	 	 	8,637	 	 	 	—  	 	
15050 Conference Center Drive
Chantilly, VA 20151	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
The Topps Company, Inc.	 	Non-durable
Consumer Goods	 	First Lien	 	L + 6.00%
(1% Floor)	 	10/2/2020	 	 	18,657	 	 	 	18,588	 	 	 	18,654	 	 	 	—  	 	
1 Whitehall Street
New York, NY 10004	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
TruckPro, LLC	 	Automotive	 	First Lien	 	L + 5.00%
(1% Floor)	 	8/6/2018	 	 	9,194	 	 	 	9,173	 	 	 	9,170	 	 	 	—  	 	
1610 Century Center Parkway
Suite 107
Memphis, TN 38134	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Tweddle Group, Inc.	 	Media: Advertising, Printing & Publishing	 	First Lien	 	L + 6.00%
(1% Floor)	 	10/24/2022	 	 	15,998	 	 	 	15,697	 	 	 	16,063	 	 	 	—  	 	
24700 Maplehurt Dr.
Clinton Twp, MI 48036	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
TwentyEighty, Inc. - Revolver (fka Miller
Heiman, Inc.)	 	Business Services	 	First Lien	 	L + 8.00%
(1% Floor)	 	3/21/2020	 	 	—  	 	 	 	(7	) 	 	 	(3	) 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
TwentyEighty, Inc. – (Term A Loans)	 	 	 	First Lien	 	L + 3.50%
(1% Floor)
4.50% PIK	 	3/21/2020	 	 
	2,860
	 
	 	 	2,844	 	 	 	2,843	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
TwentyEighty, Inc. – (Term B Loans)	 	 	 	First Lien	 	1.00% 7.00%
PIK	 	3/21/2020	 	 
	4,698
	 
	 	 	4,698	 	 	 	3,773	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
TwentyEighty, Inc. – (Term C Loans)	 	 	 	First Lien	 	0.25%

8.75% PIK	 	3/21/2020	 	 
	4,485
	 
	 	 	4,485	 	 	 	2,245	 	 	 	—  	 	
 	 	 	 	 	 	 	 	 	
TwentyEighty Investors LLC	 	 	 	LLC
Interest	 	 	 	 	 	 
	51,936
	 
	 	 	—  	 	 	 	—  	 	 	 	5.19	% 	
10901 W. Toller Drive, Suite 203
Littleton, CO 80127	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
U.S. TelePacific Holdings Corp.	 	Telecommunications	 	First Lien	 	L + 8.50%
(1% Floor)	 	2/24/2021	 	 	30,000	 	 	 	29,189	 	 	 	30,027	 	 	 	—  	 	
515 S. Flower St., 47th Floor
Los Angeles, CA 90071	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Vetcor Professional Practices,
LLC	 	Consumer Services	 	First Lien	 	L + 6.00%
(1% Floor)	 	4/20/2021	 	 	28,488	 	 	 	28,028	 	 	 	28,737	 	 	 	—  	 	
350 Lincoln Place
Hingham, MA 02043	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Violin Finco S.A.R.L.
(Alexander Mann Solutions) (2)	 	Business Services	 	First Lien	 	L + 4.75%
(1% Floor)	 	12/20/2019	 	 	10,034	 	 	 	9,985	 	 	 	10,034	 	 	 	—  	 	
3 Waterhouse Square 138-142
Holborn London, EC1N 2SW, UK	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Vistage Worldwide, Inc.	 	Business Services	 	First Lien	 	L + 5.50%
(1% Floor)	 	8/19/2021	 	 	28,757	 	 	 	28,534	 	 	 	28,964	 	 	 	—  	 	
11452 El Camino Real, Suite 400
San Diego, CA 92130	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
VRC Companies, LLC	 	Business Services	 	First Lien	 	L + 6.50%
(1% Floor)	 	3/31/2023	 	 	25,632	 	 	 	24,923	 	 	 	25,140	 	 	 	—  	 	
5400 Meltech Blvd #101
Memphis, TN 38118	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 
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Table of Contents
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest
Rate	 	Maturity	 	 	Par/
Principal/
Shares	 	 	Amortized
Cost  (1)	 	 	Fair
Value	 	 	Percentage
of Class
Held	 	
 	 	 	 	 	 	 	 	 	
Ramundsen Public Sector, LLC	 	Sovereign & Public Finance	 	Second Lien	 	L + 8.50%

(1% Floor)	 	 	1/31/2025	 	 	 	1,800	 	 	 	1,783	 	 	 	1,800	 	 	 	—  	 	
1000 Business Center Drive
Lake Mary, FL 32746	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Watchfire Enterprises, Inc.	 	Media: Advertising,
Printing & Publishing	 	Second
Lien	 	L + 8.00%
(1% Floor)	 	 	10/2/2021	 	 	 	7,000	 	 	 	6,934	 	 	 	6,994	 	 	 	—  	 	
1015 Maple Street
Danville, IL 61832	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Winchester Electronics Corporation	 	Capital Equipment	 	First Lien	 	L + 6.50%
(1% Floor)	 	 	6/30/2022	 	 	 	27,298	 	 	 	26,914	 	 	 	27,749	 	 	 	—  	 	
68 Water Street
Norwalk, CT 06854	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Zest Holdings, LLC	 	Durable Consumer
Goods	 	First Lien	 	L + 4.75%
(1% Floor)	 	 	8/16/2020	 	 	 	9,530	 	 	 	9,530	 	 	 	9,523	 	 	 	—  	 	
2061 Wineridge Place
Escondido, CA 92029	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Zywave, Inc.	 	High Tech Industries	 	Second
Lien	 	L + 9.00%
(1% Floor)	 	 	11/17/2023	 	 	 	4,950	 	 	 	4,881	 	 	 	4,949	 	 	 	—  	 	
10100 W. Innovation Drive
Suite 300
Milwaukee, WI 53226	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Equity and Debt Investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,263,462	 	 	$	1,258,424	 	 	 	 	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest Rate	 	 	Maturity	 	 	Par/LLC
Interest	 	 	Cost	 	 	Fair
Value	 	
Investment Fund(2)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Middle Market Credit Fund, LLC	 	Investment
Fund	 	Mezzanine
Loan	 	 	L+9.50%	 	 	 	6/24/2017	 	 	$	86,044	 	 	$	86,044	 	 	$	86,044	 	
520 Madison Avenue
New York, NY 10022	 	 	 	Subordinated
Loan and
Member’s
Interest	 	 	0.001%	 	 	 	3/1/2021	 	 	 	45,500	 	 	 	45,501	 	 	 	48,077	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investment Fund	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	131,545	 	 	$	134,121	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Name and Address of
Portfolio Company	 	Industry	 	Type of
Investment	 	Interest Rate	 	 	Maturity	 	 	Par/
Principal	 	 	Amortized
Cost  (1)	 	 	Fair Value	 	
Structured Finance Obligations (2)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1776 CLO I, Ltd., Subordinated Notes	 	Structured Finance	 	 	 	 	 	 	 	 	5/8/2020	 	 	$	11,750	 	 	$	6,519	 	 	$	2,761	 	
Clydesdale CLO 2005, Ltd.,
Subordinated Notes	 	Structured Finance	 	 	 	 	 	 	 	 	12/6/2017	 	 	 	5,750	 	 	 	—  	 	 	 	10	 	
MSIM Peconic Bay, Ltd., Subordinated
Notes	 	Structured Finance	 	 	 	 	 	 	 	 	7/20/2019	 	 	 	4,500	 	 	 	63	 	 	 	5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Structured Finance Obligations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	6,582	 	 	$	2,776	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,395,007	 	 	$	1,392,545	 	

(1)	Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. Equity tranche CLO fund investments, which are referred to as “structured finance obligations”, are recorded at amortized cost using the effective interest method.	
(2)	The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.	
 
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(3)	The Company receives less than the stated interest rate of this loan as a result of an agreement among lenders. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.	
(4)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
(5)	Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.	
(6)	Assets are pledged as collateral for the Facilities or 2015-1 Notes.	
(7)	Amounts in thousands, unless disclosed otherwise.	
 
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MANAGEMENT
Our business and affairs are managed under the direction of our Board of Directors (“Board”). Our Board currently consists of five members, three of whom are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (each, an “Independent Director”) and two of whom are “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (each, an “Interested Director”). The Board elects our officers, who serve at the discretion of our Board of Directors. The responsibilities of the Board include quarterly valuation of our assets, corporate governance activities, oversight of our financing arrangements and oversight of our investment activities.
Board of Directors and Executive Officers
Our Board is presently composed of five directors, divided into three classes, each serving staggered three-year terms. The term of our first class of directors will expire at the 2017 annual meeting of stockholders; the term of our second class of directors will expire at the 2018 annual meeting of stockholders; and the term of our third class of directors will expire at the 2019 annual meeting of stockholders.
Each director holds office for the term to which he or she is elected or appointed and until his or her successor is duly elected and qualifies, or until his or her earlier death, resignation, retirement, disqualification or removal.
The following information regarding our Board is as of May 16, 2017:
Directors

Name	  	Age	  	Position	  	Director Since	  	Class	
Interested Directors	  	 	  	 	  	 	  	 	
Michael A. Hart	  	55	  	Chairman of the Board of Directors and Chief Executive Officer	  	2015	  	Class I
(term expires in 2020)	
Eliot P.S. Merrill	  	46	  	Director	  	2013	  	Class II
(term expires in 2018)	
 	 	 	 	 	
Independent Directors	  	 	  	 	  	 	  	 	
Nigel D. T. Andrews	  	70	  	Director	  	2012	  	Class II
(term expires in 2018)	
William P. Hendry	  	67	  	Director	  	2013	  	Class III
(term expires in 2019)	
John G. Nestor	  	72	  	Director	  	2013	  	Class III
(term expires in 2019)	
Executive Officers Who are Not Directors

Name	 	Age	 	Position	 	Officer Since	 	 	
Jeffrey S. Levin	 	37	 	President	 	2016	 	 	
Orit Mizrachi	 	45	 	Chief Operating Officer	 	2014	 	 	
Venugopal Rathi	 	38	 	Chief Financial Officer and Treasurer	 	2015	 	 	
Matthew Cottrell	 	44	 	Chief Compliance Officer and Secretary	 	2012	 	 	
The business address of each director and executive officer who is not a director is 520 Madison Avenue, 40th Floor, New York, NY 10022.
 
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Biographical Information and Discussion of Experience and Qualifications
Set forth below is biographical information of each director, including a discussion of such director’s particular experience, qualifications, attributes or skills that lead us and our Board of Directors to conclude, as of the date of this prospectus, that such individual should serve as a director, in light of the Company’s business and structure.
Interested Directors
Michael A. Hart has served on our Board since March 2015 and as our Chairman of the Board since March 2017 and our Chief Executive Officer since May 2016. Mr. Hart is also Chairman of the Investment Adviser’s Investment Committee. He is a Managing Director of Carlyle and also serves as chairman of the board of directors and as the chief executive officer of NFIC since May 2016. Mr. Hart is also Head of Carlyle Private Credit. Mr. Hart may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. Mr. Hart has over 26 years of capital markets, corporate finance, M&A, risk management, accounting and managerial experience. Prior to joining Carlyle in 2014, Mr. Hart was a Managing Director in the Financial Markets Advisory group at BlackRock Solutions, where he served as co-head of the U.S. advisory practice and was a member of the BlackRock Solutions Operating Committee. Prior to joining BlackRock Solutions, Mr. Hart spent 12 years with Morgan Stanley where his responsibilities included Global Co-Head of Leveraged and Acquisition Finance, Global Head of the Loan Products Group and Co-Chairman of the firm’s Capital Commitment Committee. Mr. Hart is an experienced leader whose extensive experience in capital markets, corporate finance and risk management provides our Board with valuable insight and leadership.
Eliot P.S. Merrill has served on our Board since 2013 and served as Interim Chairman of our Board from May 2016 to March 2017. Mr. Merrill has also served a member of the board of directors of NFIC since March 2016. Mr. Merrill is a Managing Director and Co-head of Carlyle Global Partners based in New York. Carlyle Global Partners seeks to deliver attractive risk-adjusted returns on significant sums of capital over a longer timeframe than typical private equity funds, thereby creating substantial longer-term appreciation. Mr. Merrill may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. Before the launch of Carlyle Global Partners in 2014, Mr. Merrill was a Managing Director of Carlyle primarily focused on U.S. buyout opportunities in the telecommunications and media sectors. Mr. Merrill is a member of the board of directors of Getty Images, TCW Group, Content Partners, and Schon Klinik and Citizen Schools of New York, a non-profit. Mr. Merrill has previously served on the boards of several other Carlyle investments including AMC Loews and Nielson Company B.V. Prior to joining Carlyle in 2001, Mr. Merrill was a Principal at Freeman Spogli & Co., a buyout fund with offices in New York and Los Angeles. Prior to that, Mr. Merrill worked at Dillon Read & Co. Inc. in the Mergers and Acquisitions Group. Before that, Mr. Merrill was a Sail Consultant and Special Project Coordinator for Doyle Sailmakers, Inc. Mr. Merrill’s depth of experience in investment management and capital markets, intimate knowledge of the business and operations of Carlyle’s investment platform, and experience as a director of other public and private companies provides our Board with valuable insight.
Independent Directors
Nigel D.T. Andrews has served on our Board since 2012 and is a member of our Audit Committee. Mr. Andrews has also served as a member of the board of directors and on the audit committee of NFIC since March 2016. Mr. Andrews may from time to time serve as an independent director of other entities affiliated with Carlyle or of investment vehicles managed by Carlyle or its affiliates. Mr. Andrews recently retired from his roles as governor at London Business School, a director and a member of the audit and remuneration committees at Old Mutual plc., and Chairman of Old Mutual Asset Management, where he served from 2002 to 2014. Mr. Andrews continues to actively manage his own private investments and to serve as a trustee of Victory funds, a position he has held since 2002. From 2000 to 2010, Mr. Andrews served on the board of directors of Chemtura Corporation,
 
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a New York Stock Exchange listed company. Mr. Andrews also served as a Managing Director of Internet Capital Group, Inc. from 2000 to 2001. From 1987 to 2000, Mr. Andrews held various senior management positions within General Electric Company, including Executive Vice President of GE Capital from 1993 to 2000 and, prior to that, Vice President and General Manager of GE Plastics-Americas. During Mr. Andrews’ 13-year career with GE, he also served as a Vice President for Corporate Business Development and Strategy reporting to the chairman of the board. Prior to joining GE, Mr. Andrews was a partner at Booz Allen Hamilton Inc. He began his career in business management at Shell International Chemical Company. Mr. Andrews’ broad executive experience with the operations and transactions of industrial and financial services businesses provides our Board with valuable insights and knowledge that will enhance our ability to achieve our investment objectives.
William P. Hendry has served on our Board of Directors since 2013 and is the Chairman of our Audit Committee. Mr. Hendry has also served as a member of the board of directors and as the chairman of the audit committee of NFIC since 2012. Mr. Hendry may from time to time serve as an independent director of other entities affiliated with Carlyle or of investment vehicles managed by Carlyle or its affiliates. Mr. Hendry served as a director and a member of the audit committee of Santander Consumer USA Holdings Inc. Mr. Hendry currently is a Special Adviser to and President of Promethean Investments L.L.P. and is chairman of the board of directors at Pharma-Cycle L.L.C. Mr. Hendry served on the board as a director of FirstCity since August 2010, and chairman of the board since August 2011 until the company was acquired by Varde in the early part of 2013. Mr. Hendry has more than 30 years of experience in the banking industry and headed Bank of Scotland’s operations in the United States before it was acquired in 2009 by Lloyds Banking Group. He launched W.P. Hendry and Associates in August 2009, a bank consulting firm that handles complex business and lending issues. Mr. Hendry has held senior banking positions in Scotland, Northern Ireland, Canada, the Middle East, Africa and the United States. Mr. Hendry has extensive experience in mergers and acquisitions, most notably at Drive Financial Services (a national subprime auto lender) where he led HBOS plc’s investment analysis group in 2000, then becoming chairman of the board until the business was sold to Banco Santander in 2006. Mr. Hendry is an experienced leader whose numerous management positions and global experiences in the financial services sector have provided him with an abundance of skills and valuable insight in handling complex financial transactions and issues, all of which makes him well qualified to serve on our Board.
John G. Nestor has served on our Board since 2013, and is a member of our Audit Committee. Mr. Nestor has also served as a member of the board of directors and on the audit committee of NFIC since 2013. Mr. Nestor may from time to time serve as an independent director of other entities affiliated with Carlyle or of investment vehicles managed by Carlyle or its affiliates. Mr. Nestor joined Kirtland Capital Partners in March 1986. He is chairman and senior managing partner of this private investment firm. Prior to joining Kirtland Capital Partners, Mr. Nestor worked for 16 years for Continental Illinois Bank. For eight years he focused on lending to small businesses in the Chicago area. In 1977 Mr. Nestor was transferred to Philadelphia where he was involved in commercial lending and in 1979 he moved to Cleveland to manage Continental’s Cleveland Office. Mr. Nestor is a member of the advisory board of Kirkland Capital Partners and Gates Group, and is chairman of the board of directors of SmartSource Computer and Audio Visual Rentals. Mr. Nestor is also a member of the board of directors and audit committee of Form Tech Concrete Forms. Mr. Nestor previously served as a board member for Essex Rental Corp. and Truck Bodies and Equipment International, Inc. Mr. Nestor serves as a trustee of the Kelvin and Eleanor Smith Foundation and the Deaconess Community Foundation. He is also a member of the advisory board of the Beech Brook Leadership Advisory Council. Mr. Nestor is the former chairman of the board of trustees of the Cleveland Foodbank and The Diversity Center. Mr. Nestor is an experienced leader whose numerous board and advisory positions and experiences in the middle markets provide our Board valuable insights.
Executive Officers Who Are Not Directors
Jeffrey S. Levin was appointed as our President in May 2016. Mr. Levin also serves as the president of NFIC. Mr. Levin is a Managing Director of Carlyle and, prior to his appointment as our President, served as the Head of
 
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Origination. Mr. Levin may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. Prior to joining Carlyle in 2012, Mr. Levin was a founding member of Morgan Stanley Credit Partners, a corporate debt fund, where he was responsible for originating, structuring and executing credit and private equity investments across various industries. Prior to that role, Mr. Levin was a member of the Leveraged & Acquisition Finance Group at Morgan Stanley where he was responsible for originating and executing high yield bond and leveraged loan transactions.
Venugopal Rathi was appointed as our as our Chief Financial Officer and Treasurer in 2015. Mr. Rathi also serves as the chief financial officer and treasurer of NFIC. Mr. Rathi also serves as the chief financial officer of the Global Market Strategies Segment and is a Managing Director of Carlyle and also serves as the chief financial officer of Carlyle Global Market Strategies based in New York. Mr. Rathi may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. Prior to joining Carlyle, Mr. Rathi worked at Ernst & Young LLP and provided assurance and advisory services to a wide variety of clients in the financial services industry. Mr. Rathi has extensive knowledge of fund-level and vehicle-level accounting, US GAAP and SOX compliance, valuation, and financial reporting practices across a wide range of investment strategies, including carry funds, hedge funds, CLOs, BDCs and mutual funds.
Orit Mizrachi was appointed as our Chief Operating Officer in 2014 and is a Managing Director of Carlyle. She is also the chief operating officer of NFIC. Since joining Carlyle, Ms. Mizrachi has been involved in various roles, including our chief financial officer and Director of Operations for the GMS platform. Ms. Mizrachi may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. Prior to joining Carlyle in 2010, Ms. Mizrachi worked in the hedge fund industry as the chief financial officer of Carlyle Blue Wave Management L.P. and as controller at Sagamore Hill Capital Management L.P., two multi-strategy hedge funds. Ms. Mizrachi started her career at Goldstein Golub & Kessler LLP as an auditor in their financial services group.
Matthew Cottrell was appointed as our as our Chief Compliance Officer and Secretary in 2012 and is a Director of Carlyle based in London. Mr. Cottrell also serves as the chief compliance officer and secretary of NFIC. Since joining Carlyle, Mr. Cottrell has been involved with fund structuring, documentation and management of a range of CLOs, low levered, market value and synthetic funds together with regulation, compliance and operations management for GMS in Europe. Mr. Cottrell may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. Prior to joining Carlyle, Mr. Cottrell was a Director in structured finance and credit policy at Fitch Ratings and he practiced as a banking lawyer in the international finance group at Ashurst, an international law firm.
Board Leadership Structure
Our Board monitors and performs an oversight role with respect to our business and affairs, including with respect to our investment practices and performance, compliance with regulatory requirements and the services, expenses and performance of our service providers. Among other things, our Board approves the appointment of our Investment Adviser and officers, reviews and monitors the services and activities performed by our Investment Adviser and executive officers, and approves the engagement and reviews the performance of our independent registered public accounting firm.
Under our Bylaws, our Board may designate a Chairman to preside over the meetings of our Board and meetings of the stockholders and to perform such other duties as may be assigned to him by the Board. We do not have a fixed policy as to whether the Chairman of the Board should be an Independent Director, and we believe that we should maintain the flexibility to select the Chairman and reorganize the leadership structure, from time to time, based on criteria that are in our best interests and our stockholders’ best interests at such times.
 
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Presently, Mr. Hart serves as Chairman of our Board. Mr. Hart is an Interested Director. We believe that Mr. Hart’s extensive knowledge of the financial services industry and capital markets in particular qualifies him to serve as the Chairman of our Board. We believe that we are best served through this existing leadership structure, as Mr. Hart’s relationship with our Investment Adviser provides an effective bridge and encourages an open dialogue between management and our Board, ensuring that both groups act with a common purpose.
Our Board does not currently have a designated lead Independent Director. We are aware of the potential conflicts that may arise when an Interested Director is Chairman of the Board, but believe these potential conflicts are offset by our strong corporate governance policies. Our corporate governance policies include regular meetings of the Independent Directors in executive session without the presence of Interested Directors and management, the establishment of an Audit Committee comprised solely of Independent Directors and the appointment of a Chief Compliance Officer, with whom the Independent Directors meet regularly without the presence of Interested Directors and other members of management, for administering our compliance policies and procedures.
We recognize that different board leadership structures are appropriate for companies in different situations.
Role in Risk Oversight
Our Board performs its risk oversight function primarily through (a) its standing Audit Committee, which reports to the entire Board and is comprised solely of Independent Directors, and (b) active monitoring by our Chief Compliance Officer and of the operation of our compliance policies and procedures. As described below in more detail under “Committees of the Board of Directors,” the Audit Committee assists our Board in fulfilling its risk oversight responsibilities. The Audit Committee’s risk oversight responsibilities include overseeing the internal audit staff (sourced through our Administrator and Carlyle Employee Co., with whom we have a personnel agreement), accounting and financial reporting processes, our valuation process, our systems of internal controls regarding finance and accounting and audits of our financial statements.
Our Board also performs its risk oversight responsibilities with the assistance of the Chief Compliance Officer. Our Board annually reviews a written report from the Chief Compliance Officer discussing the adequacy and effectiveness of our compliance policies and procedures and our service providers. The Chief Compliance Officer’s annual report addresses, at a minimum: (a) the operation of our compliance policies and procedures and our service providers since the last report; (b) any material changes to such policies and procedures since the last report; (c) any recommendations for material changes to such policies and procedures as a result of the Chief Compliance Officer’s annual review; and (d) any compliance matter that has occurred since the date of the last report about which our Board would reasonably need to know to oversee our compliance activities and risks. In addition, the Chief Compliance Officer meets separately in executive session with the Independent Directors at least once each year.
We believe that our Board’s role in risk oversight is effective and appropriate given the extensive regulation to which we are already subject as a BDC. As a BDC, we are required to comply with certain regulatory requirements that control the levels of risk in our business and operations. For example, our ability to incur indebtedness is limited such that our asset coverage must equal at least 200% immediately after each time we incur indebtedness, we generally have to invest at least 70% of our total assets in “qualifying assets” and we are not generally permitted to invest in any portfolio company in which one of our affiliates currently has an investment.
We recognize that different board roles in risk oversight are appropriate for companies in different situations. We intend to re-examine the manners in which our Board administers its oversight function on an ongoing basis to ensure that they continue to meet our needs.
Committees of the Board of Directors
Our Board has established an Audit Committee and may establish additional committees in the future.
 
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Audit Committee
The Audit Committee is currently composed of Messrs. Andrews, Hendry and Nestor, all of whom are Independent Directors. Mr. Hendry serves as Chairman of the Audit Committee. Our Board has determined that Mr. Hendry is an “audit committee financial expert” as that term is defined under Item 407 of Regulation S-K, as promulgated under the Exchange Act (“Regulation S-K”). Each of Messrs. Andrews, Hendry and Nestor meets the current independence and experience requirements of Rule 10A-3 of the Exchange Act. The Audit Committee operates pursuant to a charter approved by our Board, which sets forth the responsibilities of the Audit Committee. The Audit Committee’s responsibilities include establishing guidelines and making recommendations to our Board regarding the valuation of our loans and investments, selecting our independent registered public accounting firm, reviewing with such independent registered public accounting firm the planning, scope and results of their audit of our financial statements, pre-approving the fees for services performed, reviewing with the independent registered public accounting firm the adequacy of internal control systems, reviewing our annual financial statements, overseeing internal audit staff and periodic filings and receiving our audit reports and financial statements.
During the fiscal year ended December 31, 2016, the Audit Committee met 9 times.
Our audit committee’s charter is available on our website at: www.tcgbdc.com.
Nominating and Governance Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a nominating and governance committee of the Board (the “Nominating Committee”). The members of the Nominating Committee are Messrs. Andrews, Hendry and Nestor, each of whom is independent for purposes of the Investment Company Act and will be independent for listing exchange corporate governance regulations. Mr. Nestor will serve as chairman of the Nominating Committee. The Nominating Committee will be responsible for (i) developing, reviewing and, as appropriate, updating certain policies regarding the nomination of directors and recommending such policies or any changes in such policies to the board of directors for approval, (ii) identifying individuals qualified to become directors, (iii) evaluating and recommending to the board of directors nominees to fill vacancies on the board of directors or committees thereof or to stand for election by the stockholders of the Company, (iv) reviewing the Company’s policies relating to corporate governance and recommending any changes in such policies to the board of directors, and (v) overseeing the evaluation of the board of directors (including its leadership structure) and its committees. The Nominating Committee Charter will be available on our website (www.tcgbdc.com).
Compensation Committee
Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish a compensation committee of the Board (the “Compensation Committee”). The members of the Compensation Committee are Messrs. Andrews, Hendry and Nestor, each of whom is independent for purposes of the Investment Company Act and will be independent for listing exchange corporate governance regulations. Mr. Andrews will serve as chairman of the Compensation Committee. The Compensation Committee will be responsible for determining, or recommending to the Board for determining, any compensation paid directly, if any, by us to our executive officers. The Compensation Committee is also charged with assisting the Board with all matters related to compensation, as directed by the Board. None of our executive officers is directly compensated by us and, as a result, the Compensation Committee does not produce and/or review and report on executive compensation practices. The Compensation Committee Charter will be available on our website (www.tcgbdc.com).
Rule 17j-1 Code of Ethics
We have adopted a code of ethics (the “Code of Ethics”) pursuant to Rule 17j-1 under the Investment Company Act that establishes procedures for personal investments and restricts certain transactions by our
 
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personnel. We have also adopted the Investment Adviser’s Policies and Procedures Regarding Material, Non-Public Information and the Prevention of Insider Trading (the “Code of Conduct and Insider Trading Policies”), intended to comply with Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the Advisers Act of 1940, as amended. The Code of Ethics and the Code of Conduct and Insider Trading Policies generally do not permit investments by our and the Investment Adviser’s personnel in securities that may be purchased or sold by us.
Beneficial Ownership of Our Directors
The following table sets out the dollar range of our equity securities beneficially owned by each of our directors for the fiscal year end December 31, 2016. Beneficial ownership is determined in accordance with Rule 16a-1(a)(2) under the Exchange Act.

Name of Director	  	Dollar Range of
Equity
Securities in
the
Company  (1)(2)	
Interested Directors	  	 	
Michael A. Hart	  	Over $100,000	
Eliot P.S. Merrill	  	Over $100,000	
 	 	
Independent Directors	  	 	
Nigel D.T. Andrews	  	Over $100,000	
William P. Hendry	  	None	
John G. Nestor	  	None	
 
(1)	Dollar ranges are as follows: none, $1 – $10,000, $10,001 – $50,000, $50,001 – $100,000, or over $100,000.	
(2)	Dollar ranges were determined using the number of shares beneficially owned as of December 31, 2016 multiplied by our NAV per share as of March 31, 2017.	
Compensation of Independent Directors
Each of the Company and NFIC, pays a proportionate share of the Independent Director’s compensation. Independent Directors are compensated as follows: (i) a $125,000 annual fee; (ii) for a joint meeting of the Board and the board of directors of NFIC, $4,000 for each such joint board meeting attended in person, plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending such joint board meeting, and $1,500 for each such joint board meeting attended telephonically; (iii) for a meeting of a single Board or board of directors of NFIC, $2,000 for each such single board meeting attended in person, plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending such single board meeting, and $750 for each such single board meeting attended telephonically; (iv) for a joint meeting of a committee of the Board and a committee of the board of directors of NFIC, $2,000 for each such joint committee meeting attended in person, plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending such joint committee meeting, and $1,000 for each such joint committee meeting attended telephonically; (v) for a meeting of a single committee of the Board or committee of the board of directors of NFIC, $1,000 for each such single committee meeting attended in person, plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending such single committee meeting, and $500 for each such single committee meeting attended telephonically; and (vi) an annual fee of $25,000 for the Chairman of the Audit Committee of the Board and the audit committee of the board of directors of NFIC. Once the NFIC Acquisition is completed, if completed at all, the Company will be solely responsible for paying the Independent Director’s compensation.
 
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The following table sets forth information concerning total compensation earned by or paid to each of our Independent Directors during the fiscal year ended December 31, 2016:

 	  	Fees Earned or
Paid
in Cash	 	  	Total
Compensation
from the
Company	 	  	Total
Compensation
from the
Fund
Complex (1)(2)	 	
Nigel D.T. Andrews, Director	  	$	133,500	 	  	$	133,500	 	  	$	151,000	 	
William P. Hendry, Director	  	$	148,000	 	  	$	148,000	 	  	$	186,000	 	
John G. Nestor, Director	  	$	136,500	 	  	$	136,500	 	  	$	172,000	 	
Michael L. Rankowitz, Director (resigned) (2)	  	$	124,000	 	  	$	124,000	 	  	$	158,000	 	
 
(1) 	Messrs. Andrews, Hendry and Nestor serve on the board of directors of NFIC. The Company and NFIC are part of the Fund Complex. Compensation amounts shown include compensation such Directors received from the Company and NFIC for services rendered during the fiscal year ended December 31, 2016. Mr. Andrews was appointed to the board of directors of NFIC effective March 11, 2016.	
(2) 	Mr. Rankowitz resigned from the Board and from the board of directors of NFIC effective November 9, 2016. In connection therewith, Mr. Rankowitz also resigned as a member of the Audit Committee of our Board and a member of the audit committee and the pricing committee of the board of directors of NFIC.	
Compensation of Executive Officers
We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided by individuals who are employees of our Investment Adviser or its affiliates or by subcontractors, pursuant to the terms of the Investment Advisory Agreement, and the Administration Agreement. Each of our executive officers is an employee of our Investment Adviser or its affiliates. Our day-to-day investment operations are managed by our Investment Adviser. Most of the services necessary for the origination and administration of our investment portfolio are provided by investment professionals employed by our Investment Adviser or its affiliates or by subcontractors.
None of our officers receives direct compensation from us. We have agreed to reimburse our Administrator for our allocable portion of the compensation paid to or compensatory distributions received by our Chief Financial Officer and Chief Compliance Officer. In addition, to the extent that our Administrator outsources any of its functions, we will pay the fees associated with such functions at cost. We have agreed to reimburse our Administrator, Carlyle Employee Co., with whom we have entered into a personnel agreement, and our sub-administrator, CELF, for our allocable portion of the compensation of any personnel, other than legal department personnel, that they provide for our use.
No compensation is expected to be paid to Directors who are Interested Directors.
 
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Portfolio Managers
The management of our investment portfolio is the responsibility of our Investment Adviser and its investment committee, and we consider our Investment Adviser’s investment committee to be our portfolio managers. The majority of the members of our Investment Adviser’s investment committee must approve each new investment that we make, including an affirmative vote of the Chairman of the investment committee. The biographical information of the members of our Investment Adviser’s investment committee is set forth below. The members of our Investment Adviser’s investment committee are not employed by us, and receive no compensation from us in connection with their portfolio management activities.

Name	  	Position	
Michael A. Hart	  	Managing Director, Head of CPC, CEO and Chairman of the Board of Directors of the Company and Chairman of Investment Committee	
 	 	
Mark Jenkins	  	Managing Director, Head of Carlyle Global Credit	
 	 	
Jeffrey S. Levin	  	Managing Director, President of the Company	
 	 	
Thomas Hennigan	  	Managing Director, Chief Risk Officer of CPC, Chief Risk Officer and Head of Underwriting and Portfolio Management of the Company	
 	 	
Grishma Parekh	  	Managing Director, Head of Origination of the Company and Carlyle Private Credit	
 	 	
Linda Pace	  	Managing Director, Head of Carlyle Loans and Structured Credit	
 	 	
Erica Frontiero	  	Managing Director, Head of Capital Markets of Carlyle Private Credit	
For biographical information of Mr. Hart, see “—Biographical Information and Discussion of Experience and Qualifications—Interested Directors.” For biographical information about Mr. Levin see “—Biographical Information and Discussion of Experience and Qualifications—Executive Officers Who Are Not Directors.”
Mark Jenkins is a Managing Director of Carlyle and Head of Carlyle Global Credit. Prior to joining Carlyle in 2016, Mr. Jenkins was a Senior Managing Director at Canada Pension Plan Investment Board (CPPIB) where he was responsible for leading CPPIB’s Global Private Investment Group with approximately CAD$56 billion of AUM. He was Chair of the Credit Investment Committee, Chair of the Private Investments Committee and also managed the portfolio value creation group. While at CPPIB, Mr. Jenkins founded CPPIB Credit Investments, which is a multi-strategy platform making direct principal credit investments. He also led CPPIB’s acquisition and oversight of Antares Capital and the subsequent expansion in middle-market direct lending. Prior to CPPIB, he was Managing Director, Co-Head of Leveraged Finance Origination and Execution for Barclays Capital in New York. Before Barclays, Mr. Jenkins worked for 11 years at Goldman Sachs & Co. in senior positions within the Fixed Income and Financing Groups in New York. He served on the boards of Wilton Re, Teine Energy, Antares Capital and Merchant Capital Solutions.
Thomas Hennigan was appointed as our Chief Risk Officer in 2016. He has been our Head of Underwriting and Portfolio Management since inception. In addition, Mr. Hennigan serves as the Chief Risk Officer for Carlyle Private Credit. Mr. Hennigan also serves as the chief risk officer of NFIC. Mr. Hennigan may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. Prior to joining Carlyle in 2011, Mr. Hennigan was as senior vice president and head of underwriting and portfolio management for Churchill Financial LLC, which he joined in 2006. In this role, Mr. Hennigan was responsible for managing Churchill Financial’s underwriting and portfolio management activities, including supervising the professionals involved in the underwriting process and overseeing the firm’s regular portfolio review meetings. Mr. Hennigan joined Churchill Financial from GE Corporate Financial Services. During his four years at GE, Mr. Hennigan had underwriting and portfolio management responsibilities
 
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in the Global Sponsor Finance Group and in the Global Media and Communications Group. Mr. Hennigan began his career with Wachovia Securities, Inc. in 1998, where he worked in middle market investment banking and loan syndications.
Grishma Parekh was appointed as our Head of Origination in 2017. Ms. Parekh is a Managing Director of Carlyle and also serves as the Head of Origination of Carlyle Private Credit, including NFIC, and Head of Carlyle Mezzanine Partners. Since joining Carlyle, Ms. Parekh has been responsible for sourcing, structuring, evaluating and executing middle market private debt and equity investments across various industries. Ms. Parekh may from time to time serve as an officer, director or principal of entities affiliated with Carlyle or of investment vehicles managed by Carlyle and its affiliates. She has served on the Board of Directors for Shari’s Management, Voice Construction, Combined Systems, and as an observer for Document Technologies and FishNet Security. Prior to joining Carlyle in 2007, Ms. Parekh was an investment banker with JPMorgan in New York.
Linda Pace is a Managing Director of Carlyle and the Head of Carlyle Loans and Structured Credit. Since joining Carlyle, Ms. Pace has been responsible for portfolio management for Carlyle High Yield Partners, deploying capital into the U.S. market in cash and synthetic form. Prior to joining Carlyle, Ms. Pace spent 10 years with BHF-Bank AG, where she was co-head of the bank’s syndicated loan group in New York. She invested in leveraged loans on behalf of the bank’s $2 billion on-balance sheet portfolio, as well as their $400 million collateralized loan obligation funds. Prior to that, Ms. Pace worked at Société Générale as a corporate credit analyst.
Erica Frontiero is a Managing Director of Carlyle and the Head of Capital Markets for Carlyle Private Credit. Prior to joining Carlyle in 2016, Ms. Frontiero spent twelve years with Antares/GE Capital in Capital Markets, structuring, syndicating, and trading leveraged loans, across a wide spectrum of industries to investors including, banks, hedge funds, pension funds and other financial institutions. She began her professional career at Banc of America Securities (Bank of America Merrill Lynch) in leveraged finance, in New York and in London. She is currently a member of the Board of Directors of Dress for Success Worldwide and a member of the 2016 class of WomeninPower.org, an executive fellowship program created by the 92Y in Manhattan. Ms. Frontiero is also one of the founding members of the creative advisory board for Orchid Worldwide, a boutique, sales, marketing and Travel Company, and a member of the inaugural class of Pipeline Angels, which aims to increase the number of women angel investors and social entrepreneurs in the US.
The table below shows the dollar range of shares of common stock to be beneficially owned by our portfolio managers prior to our initial public offering.

Name	  	Aggregate Dollar Range
of Equity Securities in
TCG BDC, Inc. (1)	 	
Michael A. Hart	  	$	100,001 – $500,000	 	
Mark Jenkins	  	$	50,001 – $100,000	 	
Jeffrey S. Levin	  	$	100,001 – $500,000	 	
Thomas Hennigan	  	$	100,001 – $500,000	 	
Grishma Parekh	  	$	100,001 – $500,000	 	
Linda Pace	  	$	50,001 – $100,000	 	
Erica Frontiero	  	$	1 – $  10,000	 	
 
(1)	Dollar ranges are as follows: none, $1-$10,000, $10,001-$50,000, $50,001-$100,000, $100,001-$500,000, $500,001-$1,000,000 or over $1,000,000.	
Investment Advisory Agreement
Pursuant to the Investment Advisory Agreement we entered into with our Investment Adviser, we pay our Investment Adviser a fee for investment advisory and management services consisting of two components—a base management fee and an incentive fee.
 
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Base Management Fee
The base management fee is calculated and payable quarterly in arrears at an annual rate of 1.50% of our average gross assets, including assets acquired through the incurrence of debt, excluding cash and cash-equivalents and adjusted for share issuances or repurchases. Cash and cash-equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high-quality investment grade debt investments that mature in 12 months or less from the date of investment. Prior to the completion this offering, our Investment Adviser waived its right to receive one-third (0.50%) of the base management fee. The fee waiver was scheduled terminate when our initial public offering has been consummated. However, our Investment Adviser has agreed to continue the fee waiver until the completion of the first full quarter after the consummation of this offering. As a result, at the start of the second full quarter after the completion of this offering, the base management fee will return to an annual rate of 1.50% of our gross assets, and will be effectively higher than the base management fee prior to the completion of this offering.
Prior to the completion of this offering, the base management fee is calculated based on our average daily gross assets during the most recently completed fiscal quarter. Base management fees for any partial quarter are pro-rated. Upon completion of this offering, the base management fee will be calculated based on the average value of our gross assets at the end of the two most recently completed fiscal quarters, except for the first quarter following this offering, in which case the base management fee will be calculated based on our gross assets as of the end of such fiscal quarter. In each case the base management fee will be appropriately adjusted for any share issuances or repurchases during such fiscal quarter and the base management fees for any partial month or quarter will be pro-rated.
Incentive Fee
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement) in an amount equal to 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees.
We will defer payment of any incentive fee otherwise earned by our Investment Adviser if, during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made, the sum of (a) the aggregate distributions to our stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of our net assets (defined as gross assets less indebtedness) at the beginning of such period. These calculations are adjusted for any share issuances or repurchases. Any deferred incentive fees will be carried over for payment in subsequent calculation periods.
Our Investment Adviser has agreed to waive 2.5% of our incentive fee and to charge 17.5% instead of 20% with respect to the entire calculation of its incentive fee beginning on the first full quarter following the consummation of this offering until the earlier of (i) October 1, 2017 and (ii) the date that our stockholders vote on the approval of the Proposed Amendment. The Proposed Amendment would amend the Investment Advisory Agreement to make certain changes including (i) reducing the 20% incentive fee to 17.5% for both parts of our incentive fee and (ii) deleting the deferral provision related to our incentive fee described in the immediately preceding paragraph. If our stockholders do not approve the Proposed Amendment, the deferral provision will remain in the Investment Advisory Agreement and the incentive fee will again be calculated based on 20% (and not 17.5%) beginning as of the end of the period described above.
Incentive Fee on Pre-Incentive Fee Net Investment Income
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination,
 
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structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses accrued for the quarter (including the base management fee, expenses payable under our administration agreement with our Administrator, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee).
Pre-incentive fee net investment income does not include, in the case of investments with a deferred interest feature (such as OID, debt instruments with pay-in-kind interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
Prior to the completion of this offering, pre-incentive fee net investment income, expressed as a rate of return on the average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.875% per quarter (7.50% annualized), as applicable. “Hurdle Calculation Value” means, on any given day, the sum of (x) the value of our net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or reinvested in us pursuant to our dividend reinvestment plan) from the beginning of the current quarter to such day minus (z) the aggregate amount of distributions (including share repurchases) made by us from the beginning of the current quarter to such day (but only to the extent such distributions were not declared and accounted for on our books and records in a previous quarter).
Upon completing of this offering, pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, will be compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.875% per quarter (7.50% annualized), as applicable.
Our net investment income used to calculate this part of the incentive fee is also included in the amount of our gross assets used to calculate the 1.50% base management fee.
We pay our Investment Adviser an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows:
 
 	•	 	no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;	
 
 	•	 	100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.875% in any calendar quarter (7.50% annualized). We refer to this portion of our pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.875%) as the “catch-up.” The “catch-up” is meant to provide our Investment Adviser with approximately 20% of our pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.875% in any calendar quarter; and	
 
 	•	 	20% of the amount of our pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) is payable to our Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to our Investment Adviser.	
The following is a graphical representation of the calculation of the income-related portion of the incentive fee:

 
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Percentage of pre-incentive fee net investment income allocated to our Investment Adviser
These calculations are pro-rated for any period of less than three months and adjusted for any share issuances or repurchases during the relevant quarter. You should be aware that a rise in the general level of interest rates can be expected to lead to higher interest rates applicable to our debt investments. Accordingly, an increase in interest rates would make it easier for us to meet or exceed the incentive fee hurdle rate and may result in a substantial increase of the amount of incentive fees payable to our Investment Adviser with respect to pre-incentive fee net investment income.
Incentive Fee on Capital Gains
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20% of our realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may 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 on a cumulative basis and unrealized capital depreciation.
Examples of Quarterly Incentive Fee Calculation
The figures provided in the following examples are hypothetical, are presented for illustrative purposes only and are not indicative of actual expenses or returns. Please refer to our SEC filings for information on actual expenses and returns.
These examples assume a 20% incentive fee and a 1.50% management fee. See “—Base Management Fee” and “—Incentive Fee” for a discussion of modifications to these fees.
Example 1: Income Related Portion of Incentive Fee(*):
Alternative 1
Assumptions
Investment income (including interest, dividends, fees, etc.) = 1.25%.
Hurdle rate (1) = 1.50%.
Management fee (2) = 0.375%.
Other expenses (legal, accounting, custodian, transfer agent, etc.) (3) = 0.20%.
Pre-incentive fee net investment income =
(investment income - (management fee + other expenses)) = 0.675%.
Pre-incentive net investment income does not exceed hurdle rate, therefore there is no incentive fee.
Alternative 2
Assumptions
Investment income (including interest, dividends, fees, etc.) = 2.40%.
Hurdle rate (1) = 1.50%.
Management fee (2) = 0.375%.
Other expenses (legal, accounting, custodian, transfer agent, etc.) (3) = 0.20%.
Pre-incentive fee net investment income =
(investment income – (management fee + other expenses)) = 1.825%
Incentive fee = 20% × pre-incentive fee net investment income, subject to the “catch-up”(4)
Catch-up = 1.825% -1.50%
=0.325%
Incentive fee= 100% × (1.825%–1.50%)
= 0.325%.
 
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Alternative 3
Assumptions
Investment income (including interest, dividends, fees, etc.) = 4.00%.
Hurdle rate (1) = 1.50%.
Management fee (2) = 0.375%.
Other expenses (legal, accounting, custodian, transfer agent, etc.) (3) = 0.20%.
Pre-incentive fee net investment income =
(investment income – (management fee + other expenses)) = 3.425%.
Incentive fee = 20% × pre-incentive fee net investment income, subject to the “catch-up” (4)
Incentive fee = 100% × “catch-up” + (20% × (pre-incentive fee net investment income – 1.875%)).
Catch-up = 1.875% – 1.50%.
= 0.375%
Incentive fee = (100% × 0.375%) + (20% × (3.425% – 1.875%))
= 0.375% + (20% × 1.55%)
= 0.375% + 0.31%
= 0.685%.

(*)	The hypothetical amount of pre-incentive fee net investment income shown is expressed, post-completion of this offering, as a rate of return on the average daily Hurdle Calculation Value, and subsequently as a rate of return on the value of our total net assets.	
(1)	Represents 6.00% annualized hurdle rate.	
 
(2)	Represents 1.50% annualized management fee.	
 
(3)	Hypothetical other expenses. Excludes organizational and offering expenses.	
 
(4)	The “catch-up” provision is intended to provide our Adviser with an incentive fee of approximately 20% on all of our pre-incentive fee net investment income as if a hurdle rate did not apply when our net investment income exceeds 1.875% in any calendar quarter.	
Example 2: Capital Gains Portion of Incentive Fee:
Alternative 1
Assumptions
 
 	•	 	Year 1: $20 million investment made in Company A (“Investment A”), and $30 million investment made in Company B (“Investment B”).	
 
 	•	 	Year 2: Investment A sold for $50 million and fair market value (“FMV”) of Investment B determined to be $32 million.	
 
 	•	 	Year 3: FMV of Investment B determined to be $25 million.	
 
 	•	 	Year 4: Investment B sold for $31 million.	
The capital gains portion of the incentive fee, if any, would be:
 
 	•	 	Year 1: None.	
 
 	•	 	Year 2: $6 million capital gains incentive fee, calculated as follows:	
$30 million realized capital gains on sale of Investment A multiplied by 20%.
 
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 	•	 	Year 3: None, calculated as follows:	
$5 million cumulative fee (20% multiplied by $25 million ($30 million cumulative capital gains less $5 million cumulative capital depreciation)) less $6 million (previous capital gains fee paid in Year 2).
 
 	•	 	Year 4: $200,000 capital gains incentive fee, calculated as follows:	
$6.2 million cumulative fee ($31 million cumulative realized capital gains ($30 million from Investment A and $1 million from Investment B) multiplied by 20%) less $6 million (previous capital gains fee paid in Year 2).
Alternative 2
Assumptions
 
 	•	 	Year 1: $20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”).	
 
 	•	 	Year 2: Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million.	
 
 	•	 	Year 3: FMV of Investment B determined to be $27 million and Investment C sold for $30 million.	
 
 	•	 	Year 4: FMV of Investment B determined to be $35 million.	
 
 	•	 	Year 5: Investment B sold for $20 million.	
The capital gains portion of the incentive fee, if any, would be:
 
 	•	 	Year 1: None.	
 
 	•	 	Year 2: $5 million capital gains incentive fee, calculated as follows: 20% multiplied by $25 million ($30 million realized capital gains on sale of Investment A less $5 million unrealized capital depreciation on Investment B).	
 
 	•	 	Year 3: $1.4 million capital gains incentive fee, calculated as follows: $6.4 million cumulative fee (20% multiplied by $32 million ($35 million cumulative realized capital gains less $3 million unrealized capital depreciation)) less $5 million (previous capital gains fee paid in Year 2).	
 
 	•	 	Year 4: $600,000 capital gains incentive fee, calculated as follows: $7 million cumulative fee (20% multiplied by $35 million cumulative realized capital gains) less $6.4 million (previous cumulative capital gains fee paid in Year 2 and Year 3).	
 
 	•	 	Year 5: None $5 million cumulative fee (20% multiplied by $25 million ($35 million cumulative realized capital gains less $10 million realized capital losses)) less $7 million (previous cumulative capital gains fee paid in Years 2, 3 and 4).	
For the three month period ended March 31, 2017, incentive fees related to pre-incentive fee net investment income were $4,777 thousand. For the years ended December 31, 2016 and 2015, incentive fees related to pre-incentive fee net investment income were $14,905 thousand and $8,881 thousand, respectively.
For the three month period ended March 31, 2017, and for the years ended December 31, 2016 and 2015, there were no incentive fees related to realized capital gains.
For the three month period ended March 31, 2017, base management fees were $3,417 thousand (net of waiver of $1,708 thousand). For the years ended December 31, 2016 and 2015, base management fees were $12,359 thousand and $8,907 thousand, respectively (net of waiver of $6,180 thousand and $4,454 thousand, respectively).
As of March 31, 2017 and December 31, 2016, $11,764 thousand and $8,157 thousand, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
 
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Expenses
Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the Investment Advisory Agreement; (ii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement; and (iii) other operating expenses as detailed below:
 
 	•	 	the costs associated with the private offering of our common stock prior to this offering;	
 
 	•	 	the costs of this offering and any other offerings of our common stock and other securities, if any;	
 
 	•	 	calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);	
 
 	•	 	expenses, including travel expenses, incurred by the Investment Adviser, or members of the Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies and, if necessary, expenses of enforcing our rights;	
 
 	•	 	certain costs and expenses relating to distributions paid on our shares;	
 
 	•	 	administration fees payable under sub-administration agreements, including related expenses;	
 
 	•	 	debt service and other costs of borrowings or other financing arrangements;	
 
 	•	 	the allocated costs incurred by the Investment Adviser in providing managerial assistance to those portfolio companies that request it;	
 
 	•	 	amounts payable to third parties relating to, or associated with, making or holding investments;	
 
 	•	 	commissions and other compensation to brokers or dealers and transfer agent and custodial fees;	
 
 	•	 	the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;	
 
 	•	 	costs of hedging;	
 
 	•	 	federal and state registration fees;	
 
 	•	 	any U.S. federal, state and local taxes, including any excise taxes;	
 
 	•	 	independent director fees and expenses;	
 
 	•	 	costs of preparing and filing reports or other documents with the SEC;	
 
 	•	 	the costs of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholders’ meetings, including investor relations personnel;	
 
 	•	 	the costs of specialty and custom software for monitoring risk, compliance and overall portfolio	
 
 	•	 	directors and officers/errors and omissions liability insurance, and any other insurance premiums and indemnification payments;	
 
 	•	 	direct fees and expenses associated with independent audits, agency, consulting and legal costs; and	
 
 	•	 	all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.	
We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset declines.    
Duration, Termination and Amendment
On April 3, 2013, the Company’s Board of Directors, including a majority of the Independent Directors, approved the Investment Advisory Agreement between the Company and the Investment Adviser in accordance
 
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with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The current term of the Investment Advisory Agreement expires March 20, 2018 and, unless terminated earlier, the Investment Advisory Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
Indemnification
The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, our Investment Adviser, its respective officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with our Investment Adviser, including without limitation its sole member, are entitled to indemnification from us for all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by any of them in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise based upon the performance in good faith of any of the Investment Adviser’s duties or obligations under the Investment Advisory Agreement or otherwise as an investment adviser of the Company.
Organization of our Investment Adviser
Our Investment Adviser is a Delaware limited liability company that is registered as an investment adviser under the Advisers Act. The principal executive offices of our Investment Adviser are located at 520 Madison Ave, 40th Floor, New York, New York 10022.
Administration Agreement
CGMSFA, a Delaware limited liability company, serves as our Administrator. Pursuant to the Administration Agreement that we entered into with our Administrator, our Administrator furnishes us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities. Under the Administration Agreement, our Administrator also performs, or oversees the performance of, our required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, operations, technology and investor relations, and being responsible for the financial records that we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, our Administrator assists us in determining and publishing our net asset value, overseeing the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.
Payments under the Administration Agreement are equal to an amount that reimburses our Administrator for its costs and expenses and our allocable portion of overhead incurred by our Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and their respective staff who provide services to us, operations staff who provide services to us, and internal audit staff. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party. Additionally, we ultimately bear the costs of any sub-administration agreements that our Administrator enters into.
For the three months ended March 31, 2017, we incurred $173 thousand in fees under the Administration Agreement, which were included in administration service fees in the accompanying Consolidated Statements of
 
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Operations. For the years ended December 31, 2016 and 2015, we incurred $703 thousand and $595 thousand, respectively, in fees under the Administrative Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of March 31, 2017 and December 31, 2016, $115 thousand and $137 thousand, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
Sub-Administration Agreements
Our Administrator entered into the Carlyle Sub-Administration Agreements pursuant to which Carlyle Employee Co. and CELF agreed to provide our Administrator with access to certain legal, operations, financial, compliance, accounting, internal audit (in their role of performing our Sarbanes-Oxley Act internal control assessment), clerical and administrative personnel that presently support our Investment Adviser’s investment team. Pursuant to the Carlyle Sub-Administration Agreements, our Administrator agreed to reimburse Carlyle Employee Co. and CELF for their respective allocable portion of the compensation or compensatory distribution of any personnel, other than legal department personnel, that Carlyle Employee Co. and CELF provide for its use. In addition, our Administrator, pursuant to a separate sub-administration agreement, has engaged State Street, to act on behalf of our Administrator in its performance of certain other administrative services for us. The principal office of State Street is One Lincoln Street, Boston, MA 02111. State Street also serves as our custodian.
For the three months ended March 31, 2017, $160 thousand fees incurred in connection with the Sub-Administration Agreements were included in other general and administrative in the accompanying Consolidated Statements of Operations. For the years ended December 31, 2016 and 2015, fees incurred in connection with the Sub-Administration Agreements, which amounted to $602 thousand and $486 thousand, respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. As of March 31, 2017 and December 31, 2016, $160 thousand and $159 thousand, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.
Indemnification
The Administration Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, our Administrator, its officers, managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with our Administrator, including without limitation its sole member, the Investment Adviser to the extent that they are providing services for or otherwise acting on behalf of our Administrator, Adviser or the Company, are entitled to indemnification from us for all damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by any of them in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise based upon the performance in good faith of any of our Administrator’s duties or obligations under the Administration Agreement or otherwise as an administrator adviser of the Company.
 
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
As a BDC, we are also subject to certain regulatory requirements that restrict our ability to engage in certain related-party transactions. In the ordinary course of business, we may enter into transactions with affiliates and portfolio companies that may be considered related party transactions. In order to ensure that we do not engage in any prohibited transactions with any persons affiliated with us, we have implemented certain policies and procedures whereby certain of our executive officers screen each of our transactions for any possible affiliations between the proposed portfolio investment, us and other affiliated persons, including our Investment Adviser, stockholders that own more than 5% of us, employees, officers and directors of us and our Investment Adviser and certain persons directly or indirectly controlling, controlled by or under common control with the foregoing persons. Our policies and procedures also assist us in complying with the relevant sections of the Investment Company Act and the restrictions associated with the Exemptive Relief. We will not enter into any agreements unless and until we are satisfied that doing so will not raise concerns under the Investment Company Act or, if such concerns exist, we have taken appropriate actions to seek review and approval by our Board or exemptive relief for such transactions. Our Board will review these procedures on an annual basis.
Investment Advisory Agreement
We are party to the Investment Advisory Agreement with our Investment Adviser, a wholly owned subsidiary of Carlyle, an entity in which certain of our directors and officers and members of our Investment Adviser’s investment team may have indirect ownership and pecuniary interests.    See “Management—Investment Advisory Agreement.”
Our Investment Adviser, members of its investment committee, members of its investment team, our executive officers and directors and other current and future principals of our Investment Adviser may serve as investment advisers, officers, directors or principals of other entities and investment funds that operate in the same or a related line of business as we do and/or investment funds, accounts and other similar arrangements advised by Carlyle, including other affiliated business development companies. Currently, our executive officers, as well as the other principals of our Investment Adviser manage other funds affiliated with Carlyle. In addition, our Investment Adviser’s investment team has responsibilities for sourcing and managing U.S. middle market debt investments for certain other investment funds and accounts. Accordingly, they have obligations to investors in those entities, the fulfillment of which may not be in the best interests of, or may be adverse to the interests of, us or our stockholders. See “Risk Factors—Risks Related to Our Business and Structure—There are significant potential conflicts of interest, including the management of other funds and accounts by our Investment Adviser, which could impact our investment returns”; “Business—Allocation of Investment Opportunities and Potential Conflicts of Interest”; and “Management—Investment Advisory Agreement” for more information. For information on payments made under the Investment Advisory Agreement, see “Management—Investment Advisory Agreement.”
Administration Agreement
Our Administrator, an affiliate of our Investment Adviser, provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to the Administration Agreement which we entered into with our Administrator. Our Administrator receives reimbursements equal to an amount that reimburses it for its costs and expenses and our allocable portion of overhead incurred by it in performing its obligations under the Administration Agreement, including our allocable portion of the compensation paid to or compensatory distributions received by our officers (including our Chief Compliance Officer and Chief Financial Officer) and respective staff who provide services to us, operations staff who provide services to us, and internal audit staff in their role of performing our Sarbanes-Oxley Act internal control assessment. See “Management—Organization of our Investment Adviser—Administration Agreement” for more information. For information on payments made under the Administration Agreement, see “Management—Organization of our Investment Adviser—Administration Agreement.”
 
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Additionally, from time to time our Investment Adviser, our Administrator and their respective affiliates, may pay third-party providers to us of goods or services. We will subsequently reimburse our Investment Adviser, our Administrator or such affiliates thereof for any such amounts paid on our behalf.
10b5-1 Plan
Certain individuals affiliated with Carlyle have indicated that they intend to adopt a 10b5-1 plan (the “10b5-1 Plan”) in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We expect that under such plan the participants will buy up to $15 million in the aggregate of our common stock in the open market during the period beginning four full calendar weeks after the closing of this offering and ending on the earlier of the date on which the capital committed to the 10b5-1 Plan has been exhausted or one year after the closing of this offering, subject to certain conditions. An affiliate of Morgan Stanley will serve as the plan administrator. The 10b5-1 Plan will require Morgan Stanley, as the plan administrator, to purchase shares of common stock (i) beginning with the first full quarter after the consummation of this offering (but not starting prior to four full calendar weeks after the closing of this offering), when the market price per share is $0.01 or more below the initial public offering price per share, and (ii) from and after the completion of the first full quarter after the consummation of this offering until the completion of the fourth full quarter after the consummation of this offering, when the market price per share is below our most recently reported NAV per share (including any updates, corrections or adjustments publicly announced by us to any previously announced NAV per share). The purchase of shares by the participants pursuant to the 10b5-1 Plan is intended to satisfy the conditions of Rules 10b5-1 and 10b-18 under the Exchange Act, and will otherwise be subject to applicable law, including Regulation M under the Exchange Act, which may prohibit purchases under certain circumstances. Whether purchases will be made pursuant to the 10b5-1 Plan and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict. These activities may have the effect of maintaining the market price of the common stock or retarding a decline in the market price of the common stock, and, as a result, the price of our common stock may be higher than the price that otherwise might exist in the open market. See “Risk Factors—Purchases of our common stock under the 10b5-1 Plan may result in the price of our common stock being higher than the price that otherwise might exist in the open market.”
Placement Fees
We are party to a placement fee arrangement with TCG Securities, L.L.C. (“TCG”), a licensed broker-dealer and an affiliate of the Investment Adviser, which may require certain stockholders to pay a placement fee to TCG for TCG’s services.
During the three month period ended March 31, 2017, TCG earned placement fees of $0 thousand. For the years ended December 31, 2016 and 2015 and 2014, TCG earned placement fees of $12 thousand, $6 thousand and $1 thousand, respectively, from the Company’s stockholders in connection with the issuance or sale of the Company’s common stock.
We will terminate this arrangement upon the effectiveness of the registration statement of which this prospectus is a part.
 
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CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS
Immediately prior to the completion of this offering there will be 51,966,283 shares of common stock issued and outstanding and as of June 2, 2017, there were 1,733 stockholders of record.
Beneficial ownership is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Ownership information for those persons who beneficially own 5% or more of the outstanding shares of our common stock is based upon Schedule 13D, Schedule 13G, Form 13F or other filings by such persons with the SEC and other information obtained from such persons.
The following table sets forth, as of June 2, 2017, the beneficial ownership as indicated in the Company’s books and records of each current Director, each nominee for Director, each executive officer of the Company, the executive officers and Directors as a group, and each person known to us to beneficially own 5% or more of the outstanding shares of our common stock. To our knowledge, as of June 2, 2017, there were no other persons than those listed below who owned 5% or more of the outstanding shares of our common stock. Except as indicated in the footnotes to the table, each of the stockholders listed below has sole voting and/or investment power with respect to shares beneficially owned by such stockholder. Unless otherwise indicated by footnote, the address for each listed individual is 520 Madison Avenue, 40th Floor, New York, NY 10022.

Name of Beneficial
Owner	  	Amount and
Nature of
Beneficial
Ownership	 	 	Percent of
Class	 	
Five-Percent Stockholders:	  	 	 	 	 	 	 	 	
State of Connecticut acting through its treasurer as trustee	  	 	2,557,569	(1) 	 	 	5.8	% 	
AFA Sjukforsakringsaktiebolag	  	 	2,296,929	(2) 	 	 	5.2	% 	
Directors and Named Executive Officers:	  	 	 	 	 	 	 	 	
Interested Directors	  	 	 	 	 	 	 	 	
Michael A. Hart	  	 	21,238	(3) 	 	 	*	 	
Eliot P.S. Merrill	  	 	8,507	(4) 	 	 	*	 	
Independent Directors	  	 	 	 	 	 	 	 	
Nigel D.T. Andrews	  	 	8,507	(5) 	 	 	*	 	
William P. Hendry	  	 	—  	 	 	 	—  	 	
John G. Nestor	  	 	—  	 	 	 	—  	 	
Named Executive Officers Who Are Not Directors	  	 	 	 	 	 	 	 	
Mathew Cottrell	  	 	—  	 	 	 	—  	 	
Jeffrey S. Levin	  	 	14,683	(6) 	 	 	*	 	
Orit Mizrachi	  	 	2,221	(7) 	 	 	*	 	
Venugopal Rathi	  	 	526	(8) 	 	 	*	 	
All Directors and Executive Officers Group (nine persons)	  	 	55,682	 	 	 	0.1	% 	
 
*	Represents less than one tenth of one percent.	
 
(1)	Consists of 2,557,569 shares of common stock directly owned. The address of the State of Connecticut is 55 Elm Street, 6th Floor, Hartford, Connecticut 06106.	
(2)	Consists of 2,296,929 shares of common stock directly owned. The address of AFA Sjukforsakringsaktiebolag is Klara Soedra Kyrkogata 18, Stockholm, Sweden SE 10627.	
(3)	Consists of 21,238 shares of common stock directly owned by Mr. Hart.	
(4)	Consists of 8,507 shares of common stock directly owned by Mr. Merrill.	
(5)	Consists of 8,507 shares of common stock directly owned by Mr. Andrews.	
(6)	Consists of 14,683 shares of common stock directly owned by Mr. Levin.	
(7)	Consists of 2,221 shares of common stock directly owned by Ms. Mizrachi.	
(8)	Consists of 526 shares of common stock directly owned by Mr. Rathi.	
 
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DETERMINATION OF NET ASSET VALUE
In accordance with the procedures adopted by our Board of Directors, the NAV per share of our outstanding shares of common stock is determined by dividing the value of total assets minus liabilities by the total number of shares outstanding.
We conduct the valuation of our assets, pursuant to which our net asset value shall be determined, at all times consistent with US GAAP and the Investment Company Act. Our Board of Directors, with the assistance of the Audit Committee, determines the fair value of our assets on at least a quarterly basis, in accordance with the terms of FASB Accounting Standards Codification Topic 820,  Fair Value Measurement  (“ASC 820”). Our valuation procedures are set forth in more detail below.
ASC 820 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same — to estimate the price at which an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).
ASC 820 establishes a hierarchal disclosure framework which ranks the observability of inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instrument, the characteristic specific to the financial instrument and the state of the marketplace, including the existence and transparency of transactions between market participants. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, will generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
The three-level hierarchy for fair value measurement is defined as follows:
Level 1 — inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments included in Level 1 generally include unrestricted securities, including equities and derivatives, listed in active markets. We do not adjust the quoted price for these investments, even in situations where we hold a large position and a sale could reasonably impact the quoted price.
Level 2 — inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.
Level 3 — inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include investments in privately held entities, non-investment grade residual interests in securitizations, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. Our Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.
 
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We value securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. We may also obtain quotes with respect to certain of our investments, such as our securities/instruments traded in active markets and our liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, we determine whether the quote obtained is sufficient according to US GAAP to determine the fair value of the security. We may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or our Board of Directors, does not represent fair value, shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows:
 
 	(i)	the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available;	
 
 	(ii)	preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of our senior management;	
 
 	(iii)	our Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investment portfolio each quarter (such that each non-traded investment (other than Credit Fund) is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value;	
 
 	(iv)	our Audit Committee reviews the assessments of the Investment Adviser and the third-party valuation firm and provide our Board of Directors with any recommendations with respect to changes to the fair value of each investment in our portfolio; and	
 
 	(v)	our Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in our portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.	
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
 
 	•	 	the nature and realizable value of any collateral;	
 
 	•	 	call features, put features and other relevant terms of debt;	
 
 	•	 	the portfolio company’s leverage and ability to make payments;	
 
 	•	 	the portfolio company’s public or “private” credit rating;	
 
 	•	 	the portfolio company’s actual and expected earnings and discounted cash flow;	
 
 	•	 	prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;	
 
 	•	 	the markets in which the portfolio company does business and recent economic and/or market events; and	
 
 	•	 	comparisons to comparable transactions and publicly traded securities.	
 
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Investment performance data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.
Securities for which market quotations are not readily available or for which a pricing source is not sufficient may include, but are not limited to, the following:
 
 	•	 	private placements and restricted securities that do not have an active trading market;	
 
 	•	 	securities whose trading has been suspended or for which market quotes are no longer available;	
 
 	•	 	debt securities that have recently gone into default and for which there is no current market;	
 
 	•	 	securities whose prices are stale; and	
 
 	•	 	securities affected by significant events.	
The Board of Directors is ultimately responsible for the determination, in good faith, of the fair value of our portfolio investments.
Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.
 
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DESCRIPTION OF CAPITAL STOCK
The following description is based on relevant portions of the Maryland General Corporation Law and on our charter and bylaws.
STOCK
Our authorized stock consists of 200,000,000 shares, par value $0.01 per share, all of which are initially designated as common stock. There are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation plans. Under Maryland law, our stockholders generally are not personally liable for our debts or obligations. Under our charter (our “Charter”), our Board of Directors is authorized to classify and reclassify any unissued shares of stock into other classes or series of stock without obtaining stockholder approval. As permitted by the MGCL, our Charter provides that the Board of Directors, without any action by our stockholders, may amend the Charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue.
Common Stock
All shares of our common stock have equal rights as to earnings, assets, voting, and dividends and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. Distributions may be paid to the holders of our common stock if, as and when authorized by our Board of Directors and declared by us out of assets legally available therefor. Shares of our common stock have no preemptive, conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract.
In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time.
Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors, and holders of less than a majority of such shares will be unable to elect any director.
The following are our outstanding classes of capital stock as of March 31, 2017:

(1) Title of Class	  	(2) Amount
Authorized	 	  	(3) Amount
Held
by us or for
Our
Account	 	  	(4) Amount
Outstanding
Exclusive of
Amounts Shown
Under (3)	 	
Common Stock	  	 	200,000,000	 	  	 	None	 	  	 	41,708,155	 	
Preferred Stock
Our Charter authorizes our Board of Directors to classify and reclassify any unissued shares of stock into other classes or series of stock, including preferred stock. The cost of any such reclassification would be borne by our existing common stockholders. Prior to issuance of shares of each class or series, the Board of Directors is required by Maryland law and by our Charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of
 
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redemption for each class or series. Thus, the Board of Directors could authorize the issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest.
You should note, however, that any issuance of preferred stock must comply with the requirements of the Investment Company Act. The Investment Company Act requires, among other things, that (1) immediately after issuance and before any dividend or other distribution is made with respect to our common stock and before any purchase of common stock is made, such preferred stock together with all other senior securities must not exceed an amount equal to 50% of our total assets after deducting the amount of such dividend, distribution or purchase price, as the case may be, and (2) the holders of shares of preferred stock, if any are issued, must be entitled as a class to elect two directors at all times and to elect a majority of the directors if dividends on such preferred stock are in arrears by two full years or more. Certain matters under the Investment Company Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. We believe that the availability for issuance of preferred stock will provide us with increased flexibility in structuring future financings and acquisitions. However, we do not currently have any plans to issue preferred stock.
Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses
Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our Charter contains such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law, subject to the requirements of the Investment Company Act.
Our Charter authorizes us, to the maximum extent permitted by Maryland law and subject to the requirements of the Investment Company Act, to indemnify any present or former director or officer of the corporation or any individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our bylaws obligate us, to the maximum extent permitted by Maryland law and subject to the requirements of the Investment Company Act, to indemnify any present or former director or officer or any individual who, while serving as our director or officer and at our request, serves or has served another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner, trustee, member or manager and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding without requiring a preliminary determination of his or her ultimate entitlement to indemnification. The Charter and bylaws also permit us to indemnify and advance expenses to any person who served a predecessor of us in any of the capacities described above and any of our employees or agents or any employees or agents of our predecessor. In accordance with the Investment Company Act, we will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
Maryland law requires a corporation (unless its charter provides otherwise, which our Charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. Maryland law permits a
 
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corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received unless, in either case a court orders indemnification, and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer in advance of final disposition of a proceeding upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.
We have entered into indemnification agreements with our directors and executive officers that will provide the maximum indemnification permitted under Maryland law and the Investment Company Act.
Certain Provisions of the MGCL and Our Charter and Bylaws
The MGCL and our Charter and bylaws contain provisions that could make it more difficult for a potential acquiror to acquire us by means of a tender offer, proxy contest or otherwise. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our Board of Directors. We believe that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms.
Classified Board of Directors
Our Board of Directors is divided into three classes of directors serving staggered three-year terms. The current terms of the first, second and third classes will expire at the annual meeting of stockholders held in 2017, 2018 and 2019, respectively, and in each case, those directors will serve until their successors are duly elected and qualify. Each year, one class of directors will be elected by the stockholders. A classified board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of our Board of Directors will help to ensure the continuity and stability of our management and policies.
Election of Directors
As permitted by our Charter, our bylaws provide that a plurality of the votes cast at a meeting of stockholders duly called and at which a quorum is present will be required to elect a director. Pursuant to our Charter and bylaws our Board of Directors may amend the bylaws to alter the vote required to elect directors.
Number of Directors; Vacancies; Removal
Our Charter provides that the number of directors will be increased or decreased only by the Board of Directors in accordance with our bylaws. Our bylaws provide that a majority of our entire Board of Directors may at any time increase or decrease the number of directors. However, the number of directors may never be less than one nor more than twelve unless our bylaws are amended in which case we may have more than twelve directors but never less than one. Our Charter provides that, except as may be provided by the Board of Directors
 
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in setting the terms of any class or series of preferred stock, any and all vacancies on the Board of Directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is duly elected and qualifies, subject to any applicable requirements of the Investment Company Act.
Our Charter provides that a director may be removed only for cause, as defined in our Charter, and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast in the election of directors.
Action by Stockholders
Under the MGCL, stockholder action can be taken only at an annual or special meeting of stockholders or (unless the charter provides for stockholder action by less than unanimous written consent, which our charter does not) by unanimous written consent in lieu of a meeting. These provisions, combined with the requirements of our bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed below, may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.
Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals
Our bylaws provide that with respect to an annual meeting of stockholders, nominations of persons for election to the Board of Directors and the proposal of business to be considered by stockholders may be made only (1) pursuant to our notice of the meeting, (2) by the Board of Directors or (3) by a stockholder who is a stockholder of record both at the time of giving notice, as provided by the bylaws, and at the time of the annual meeting and who is entitled to vote at the meeting and who has complied with the advance notice procedures of our bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of persons for election to the Board of Directors at a special meeting may be made only (1) by the Board of Directors or (2) provided that the Board of Directors has determined that directors will be elected at the meeting, by a stockholder who is a stockholder of record both at the time of giving notice, as provided by the bylaws, and at the time of the special meeting and who is entitled to vote at the meeting and who has complied with the advance notice provisions of the bylaws.
The purpose of requiring stockholders to give us advance notice of nominations and other business is to afford our Board of Directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our Board of Directors, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although our bylaws do not give our Board of Directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.
Calling of Special Meetings of Stockholders
Our bylaws provide that special meetings of stockholders may be called by a majority of our Board of Directors, the Chairman of the Board and certain of our officers. Additionally, our bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders will be called by the Secretary of the corporation upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting.
 
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Approval of Extraordinary Corporate Action; Amendment of Charter and Bylaws
Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange, co-invest or engage in similar transactions outside the ordinary course of business, unless advised by its board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our Charter generally provides for approval of Charter amendments and extraordinary transactions by the stockholders entitled to cast at least a majority of the votes entitled to be cast on the matter. Our Charter also provides that the following matters require the approval of stockholders entitled to cast at least 80% of the votes entitled to be cast: (i) certain Charter amendments; (ii) any proposal for our conversion, whether by merger or otherwise, from a closed-end company to an open-end company; (iii) any proposal for our liquidation or dissolution; or (iv) any proposal regarding a merger, consolidation, share exchange or sale or exchange of all or substantially all of our assets that the MGCL requires to be approved by our stockholders. However, if such amendment or proposal is approved by a majority of our continuing directors (in addition to approval by our Board of Directors), such amendment or proposal may be approved by a majority of the votes entitled to be cast on such a matter. The “continuing directors” are defined in our Charter as (1) our current directors, (2) those directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of our current directors then on the Board of Directors or (3) any successor directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of continuing directors or the successor continuing directors then in office.
Our Charter and bylaws provide that the Board of Directors will have the exclusive power to make, alter, amend or repeal any provision of our bylaws.
No Appraisal Rights
As permitted by the MGCL, our Charter provides that stockholders will not be entitled to exercise appraisal rights unless a majority of the Board of Directors shall determine such rights apply.
Control Share Acquisitions
The MGCL, pursuant to the Control Share Act, provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of their increasing ranges of voting power. The requisite stockholder approval must be obtained each time an acquiror crosses one of the thresholds of voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of control shares, subject to certain exceptions.
Our bylaws contain a provision exempting from the Control Share Act any and all acquisitions by any person of our shares of stock. There can be no assurance that such provision will not be amended or eliminated at any time in the future. However, we will amend our bylaws to be subject to the Control Share Act only if the Board of Directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the Investment Company Act. The SEC staff has issued informal guidance setting forth its position that certain provisions of the Control Share Act would, if implemented, violate Section 18(i) of the Investment Company Act.
 
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Business Combinations
Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder (the “Business Combination Act”). These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:
 
 	•	 	any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting stock; or	
 
 	•	 	an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding voting stock of the corporation.	
A person is not an interested stockholder under this statute if the Board of Directors approved in advance the transaction by which the stockholder otherwise would have become an interested stockholder. However, in approving a transaction, the Board of Directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board.
After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the Board of Directors of the corporation and approved by the affirmative vote of at least:
 
 	•	 	80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and	
 
 	•	 	two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.	
These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.
The statute permits various exemptions from its provisions, including business combinations that are exempted by the Board of Directors before the time that the interested stockholder becomes an interested stockholder. Our Board of Directors has adopted a resolution that any business combination between us and any other person is exempted from the provisions of the Business Combination Act, provided that the business combination is first approved by the Board of Directors, including a majority of the directors who are not interested persons (as defined in the Investment Company Act). This resolution may be altered or repealed in whole or in part at any time; however, our Board of Directors will adopt resolutions so as to make us subject to the provisions of the Business Combination Act only if the Board of Directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Business Combination Act does not conflict with the Investment Company Act. If this resolution is repealed, or the Board of Directors does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.
Conflict with Investment Company Act
Our bylaws provide that, if and to the extent that any provision of the MGCL, including the Control Share Act (if we amend our bylaws to be subject to such Act) and the Business Combination Act, or any provision of our Charter or bylaws conflicts with any provision of the Investment Company Act, the applicable provision of the Investment Company Act will control.
 
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Exclusive Forum
Our Charter and bylaws provide that, to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the MGCL, the Charter or bylaws or the securities, antifraud, unfair trade practices or similar laws of any international, national, state, provincial, territorial, local or other governmental or regulatory authority, including, in each case, the applicable rules and regulations promulgated thereunder, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a federal or state court located in the state of Delaware, provided that to the extent the appropriate court located in the state of Delaware determines that it does not have jurisdiction over such action, then the sole and exclusive forum shall be any federal or state court located in the state of Maryland. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed, to the fullest extent permitted by law, to have notice of and consented to these exclusive forum provisions and to have irrevocably submitted to, and waived any objection to, the exclusive jurisdiction of such courts in connection with any such action or proceeding and consented to process being served in any such action or proceeding, without limitation, by United States mail addressed to the stockholder at the stockholder’s address as it appears on the records of the Company, with postage thereon prepaid.
 
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, 60,966,283 shares of our common stock will be outstanding, excluding any shares issued in association with the NFIC Acquisition and assuming no exercise of the underwriters’ option to purchase additional shares. If the underwriters exercise their option to purchase additional shares in full, 62,316,283 shares of our common stock will be issued and outstanding immediately after the completion of this offering.
The 9,000,000 shares of common stock (assuming no exercise of the underwriters’ option to purchase additional shares) sold in the offering will be freely tradable without restriction or limitation under the Securities Act. Any shares purchased in this offering by our affiliates, as defined in the Securities Act, will be subject to the public information, manner of sale and volume limitations of Rule 144 under the Securities Act. The remaining 51,966,283 shares of our common stock (excluding any shares issued in association with the NFIC Acquisition) that were issued prior to the completion of this offering will be “restricted securities” under the meaning of Rule 144 promulgated under the Securities Act and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including exemptions contained in Rule 144.
In general, under Rule 144 as currently in effect, if six months have elapsed since the date of acquisition of restricted securities from us or any of our affiliates and we are subject to the Exchange Act periodic reporting requirements for at least three months prior to the sale, the holder of such restricted securities can sell such securities. However, the number of securities sold by a holder that is an affiliate within any three-month period cannot exceed the greater of:
 
 	•	 	1% of the total number of securities then outstanding; or	
 
 	•	 	the average weekly trading volume of our securities during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC.	
Sales under Rule 144 by our affiliates also are subject to certain manner of sale limitations, notice requirements and the availability of current public information about us. Prior to this offering, there has been no public market for our common stock. No assurance can be given as to (a) the likelihood that an active market for our common stock will develop, (b) the liquidity of any such market, (c) the ability of our stockholders to sell our securities or (d) the prices that stockholders may obtain for any of our securities. No prediction can be made as to the effect, if any, that future sales of securities, or the availability of securities for future sales, will have on the market price prevailing from time to time. Sales of substantial amounts of our securities, or the perception that such sales could occur, may affect adversely prevailing market prices of our common stock.
Prior to this offering, we entered into subscription agreements with our stockholders whereby the stockholders could not transfer shares for a period beginning on the date of completion of an initial public offering and continuing to the earlier of (i) 180 days after the closing of the final secondary offering described in the next sentence or (ii) the second anniversary of such initial public offering. The subscription agreements obligated us to initiate up to four registered underwritten secondary offerings on behalf of the stockholders as follows: (1) the first secondary offering would occur during the period beginning 180 days after the closing of an initial public offering and ending on the 240th day after the closing of such initial public offering and (2) each subsequent secondary offering would occur during the period beginning 180 days after and ending 240 days after the prior secondary offering was completed or cancelled. We have no obligation to conduct any secondary offering unless (a) the stockholders and the Investment Adviser commit, in the aggregate, to sell at least the number of shares expected to result in gross proceeds of at least 7% times the total amount of capital commitments prior to the initial public offering (based on then-current market price per share) and (b) the number of shares that the underwriters in such secondary offering believe they can sell is at least that number of shares. If the aggregate number of shares acquired before the initial public offering still held by stockholders is less than the amount set forth in clause (b), then we are not obligated to conduct any further secondary offerings.
 
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We have advised such stockholders that we will modify these transfer restrictions under the subscription agreements so that after the completion of this offering, the shares of common stock subject to the subscription agreement lock-ups will in addition to the rights they currently have also be released from such lock-ups as described below:
 
 	•	 	During the period commencing on the expiration of the underwriters lock-up described below (the “Release Date”) and 180 days thereafter: 25% of 51,899,651 shares of common stock held by such investor at the time of this offering (the “Pre-IPO Shares”);	
 
 	•	 	During the period beginning 360 days after the Release Date: an additional 25% of 51,966,283 Pre-IPO Shares, together with any Pre-IPO Shares permitted to be but not otherwise sold during the period beginning 180 days after the Release Date;	
 
 	•	 	During the period beginning 540 days after the Release Date: an additional 25% of 51,966,283 Pre-IPO Shares, together with any Pre-IPO Shares permitted to be but not otherwise sold during the period beginning 360 days after the Release Date;	
 
 	•	 	During the period beginning 720 days after the Release Date and thereafter: any remaining Pre-IPO Shares permitted to be but not otherwise previously sold during the above periods.	
Stockholders that purchased shares of our common stock prior to this offering are not permitted to transfer such Pre-IPO Shares without our prior written consent (which we have agreed with the underwriters not to grant a waiver of these restrictions without the consent of certain of the underwriters) for 180 days after the date of this prospectus. Immediately upon the expiration of such 180 day initial lock-up period, an aggregate of 12,974,913 shares of common stock subject to the lock-up will be eligible for sale in the public market in accordance with Rule 144 (with additional amounts becoming eligible for sale 360, 540 and 720 days after the Release Date as described in more detail in the bullets above).
We have agreed not to sell or transfer any common stock or securities convertible into, exchangeable for, exercisable for or repayable with common stock, for 180 days after the date of this prospectus without first obtaining the written consent of certain of the underwriters.
Furthermore, our Investment Adviser, Administrator, and our directors and executive officers have agreed with the underwriters that, for a period of 365 days following the date of this prospectus, they will not transfer shares purchased prior to this offering without the prior written consent of certain of the underwriters, subject to certain exceptions. See “Underwriting—No Sales of Similar Securities.”
 
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DIVIDEND REINVESTMENT PLAN
We currently maintain an “opt in” dividend reinvestment plan. Effective on July 5, 2017, we will convert our current “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of our dividends and other distributions on behalf of our stockholders, other than those stockholders who have “opted out” of the plan. As a result of adopting the plan, if our Board of Directors authorizes, and we declare, a cash dividend or distribution, our stockholders who have not elected to “opt out” of our dividend reinvestment plan, will have their cash dividends or distributions automatically reinvested in additional shares of our common stock, rather than receiving cash.
Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, our plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. The plan administrator will maintain all participants’ accounts in the plan and furnish written confirmation of all transactions in the accounts. Shares in the account of each participant will be held by the plan administrator on behalf of the participant in book entry form in the plan administrator’s name or the plan administrator’s nominee. Those stockholders whose shares are held through a broker or other nominee may receive cash distributions in cash by notifying their broker or nominee of their election. We intend to continue to pay quarterly distributions to our stockholders out of assets legally available for distribution. Future quarterly distributions, if any, will be determined by our Board of Directors. All future distributions will be subject to lawfully available funds therefor, and no assurance can be given that we will be able to declare such distributions in future periods. See “Distributions.”
After this offering, we intend to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless we instruct the plan administrator otherwise. If we are implementing the plan through the issuance of newly issued shares, the number of shares to be issued to a stockholder would be determined by dividing the total dollar amount of the dividend or distribution payable to such stockholder by the market price per share of our common stock on the relevant valuation date. If the plan administrator is purchasing common stock on behalf of participants to implement the plan, the number of shares to be issued to a stockholder would be determined by dividing the total dollar amount of the dividend or distribution payable to such stockholder by the average purchase price per share of all shares of common stock purchased with respect to that dividend or distribution. Market price per share as of any date would be the closing price per share of our common stock on the primary exchange on which our common stock is traded or, if no sale is reported for such day on such exchange, at the average of the electronically reported bid and asked prices for that day. The number of shares of our common stock to be outstanding after giving effect to payment of a dividend or distribution cannot be established until the value per share at which additional shares will be issued has been determined and elections of our stockholders have been tabulated.
The plan administrator’s fees under the plan are paid by us. After this offering, if a participant elects to sell part or all of his, her or its shares and have the proceeds remitted to the participant, such request must first be submitted to the participant’s broker, who will coordinate with the plan administrator and who may deduct a per share brokerage commission from the proceeds.
Participants may terminate their accounts under the plan by notifying the plan administrator.
Stockholders who receive dividends and distributions in the form of stock are generally subject to the same U.S. federal, state and local tax consequences as are stockholders who receive their dividends and distributions in
 
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cash. However, since their cash dividends and distributions will be reinvested in our common stock, such stockholder will not receive cash with which to pay applicable taxes on reinvested dividends and distributions. A stockholder’s basis for determining gain or loss upon the sale of stock received in a dividend or distribution from us will generally be equal to the cash that would have been received if the stockholder had received the dividend or distribution in cash, unless we issue new shares that are trading at or above net asset value, in which case, the stockholder’s basis in the new shares will generally be equal to their fair market value. Any stock received in a dividend or distribution will have a new holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. stockholder’s account.
We reserve the right to amend or terminate the plan upon notice in writing to each participant at least 30 days prior to any record date for the payment of any dividend or distribution by us. There is no direct service charge to participants with regard to purchases in the plan; however, we reserve the right to amend the plan to include a service charge payable by the participants. Notice will be sent to participants of any amendments as soon as practicable after such action by us.
All correspondence concerning the plan should be directed to the plan administrator by mail at State Street Corporation, Attention: Plan Administrator, 100 Huntington Ave Copley Place Tower 2, Floor 3, Mail Code: CPH0255, Boston, MA 02116. Participants who hold their shares through a broker or other nominee should direct correspondence or questions concerning the dividend reinvestment plan to their broker or nominee.
 
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REGULATION
General
We have elected to be regulated as a BDC under the Investment Company Act and have elected to be treated as a RIC under the Code. A BDC must be organized in the United States for the purpose of investing in or lending to primarily private companies and making significant managerial assistance available to them. A BDC may use capital provided by public stockholders and from other sources to make long-term, private investments in businesses. A publicly traded BDC provides stockholders the ability to retain the liquidity of a publicly traded stock while sharing in the possible benefits, if any, of investing in primarily privately owned companies.
We may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC unless authorized by vote of a majority of the outstanding voting securities, as required by the Investment Company Act. A majority of the outstanding voting securities of a company is defined under the Investment Company Act as the lesser of: (a) 67% or more of such company’s voting securities present at a meeting if more than 50% of the outstanding voting securities of such company are present or represented by proxy, or (b) more than 50% of the outstanding voting securities of such company. We do not anticipate any substantial change in the nature of our business.
As with other companies regulated by the Investment Company Act, a BDC must adhere to certain substantive regulatory requirements. A majority of our directors must be persons who are not “interested persons,” as that term is defined in Section 2(a)(19) of the Investment Company Act. We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect the BDC. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.
The Investment Company Act contains prohibitions and restrictions relating to certain transactions between BDCs and certain affiliates (including any investment advisers or sub-advisers), principal underwriters and certain affiliates of those affiliates or underwriters. Because we are a BDC, we are not generally permitted to make loans to companies controlled by Carlyle or other funds managed by Carlyle. We are also not permitted to make any co-investments with our Investment Adviser or its affiliates (including any fund managed by Carlyle) without Exemptive Relief from the SEC, subject to certain exceptions, including with respect to our downstream affiliates. The SEC has granted us Exemptive Relief that permits us and certain present and future funds advised by our Investment Adviser (or a future investment adviser controlling, controlled by or under common control with our Investment Adviser) to co-invest in suitable negotiated investments. Co-investments made under the Exemptive Relief are subject to compliance with the conditions and other requirements contained in the Exemptive Relief, which could limit our ability to participate in a co-investment transaction. We may also co-invest with funds managed by Carlyle or any of its downstream affiliates, subject to compliance with applicable law and regulations, existing regulatory guidance, and our Investment Adviser’s allocation policies and procedures.
As a BDC, we are generally required to meet an asset coverage ratio, defined under the Investment Company Act as the ratio of our total assets (less all liabilities and indebtedness not represented by senior securities) to our outstanding senior securities, of at least 200% after each issuance of senior securities. We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an “underwriter” as that term is defined in the Securities Act. Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities of our portfolio companies. We may enter into hedging transactions to manage the risks associated with interest rate and currency fluctuations. We may purchase or otherwise receive warrants or options to purchase the common stock of our portfolio companies in connection with acquisition financings or other investments. In connection with such an acquisition, we may acquire rights to require the issuers of acquired securities or their affiliates to repurchase them under certain circumstances.
 
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We do not intend to acquire securities issued by any investment company that exceed the limits imposed by the Investment Company Act. Under these limits, except for registered money market funds, we generally cannot acquire more than 3% of the voting stock of any investment company, invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of investment companies in the aggregate. The portion of our portfolio invested in securities issued by investment companies ordinarily will subject our stockholders to additional indirect expenses. Our investment portfolio is also subject to diversification requirements by virtue of our intended status to be a RIC for U.S. tax purposes. See “Risk Factors—Risks Related to Our Business and Structure” for more information.
In addition, investment companies registered under the Investment Company Act and private funds that are excluded from the definition of “investment company” pursuant to either Section 3(c)(1) or 3(c)(7) of the Investment Company Act may not acquire directly or through a controlled entity more than 3% of our total outstanding voting stock (measured at the time of the acquisition), unless the funds comply with an exemption under the Investment Company Act. As a result, certain of our investors may hold a smaller position in our shares than if they were not subject to these restrictions.
We are generally not able to issue and sell our common stock at a price below net asset value per share. See “Risk Factors—Risks Related to Our Business and Structure—Regulations governing our operation as a BDC affect our ability to, and the way in which we will, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.” We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the then-current net asset value of our common stock if our Board of Directors determines that such sale is in our best interests and the best interests of our stockholders, and our stockholders approve such sale. In addition, we may generally issue new shares of our common stock at a price below net asset value in rights offerings to existing stockholders, in payment of dividends and in certain other limited circumstances.
We will be periodically examined by the SEC for compliance with the Investment Company Act.
As a BDC, we are subject to certain risks and uncertainties. See “Risk Factors—Risks Related to Our Business and Structure.”
Qualifying Assets
We may invest up to 30% of our portfolio opportunistically in “non-qualifying assets,” which will be driven primarily through opportunities sourced through the CPC platform. However, under the Investment Company Act, a BDC may not acquire any asset other than assets of the type listed in Section 55(a) of the Investment Company Act, which are referred to as “qualifying assets,” unless, at the time the acquisition is made, qualifying assets represent at least 70% of the BDC’s total assets. The principal categories of qualifying assets relevant to our proposed business are the following:
 
 	(1)	Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the Investment Company Act as any issuer which:	
 
 	(a)	is organized under the laws of, and has its principal place of business in, the United States;	
 
 	(b)	is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the Investment Company Act; and	
 
 	(c)	satisfies any of the following:	
 
 	i.	does not have any class of securities that is traded on a national securities exchange;	
 
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 	ii.	has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;	
 
 	iii.	is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or	
 
 	iv.	is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million.	
 
 	(2)	Securities of any eligible portfolio company which we control.	
 
 	(3)	Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.	
 
 	(4)	Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.	
 
 	(5)	Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.	
 
 	(6)	Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.	
Managerial Assistance to Portfolio Companies
A BDC must have been organized under the laws of, and have its principal place of business in, any state or states within the United States and must be operated for the purpose of making investments in the types of securities described in (1), (2) or (3) above. However, in order to count portfolio securities as qualifying assets for the purpose of the 70% test, the BDC must either control the issuer of the securities or must offer to make available to the issuer of the securities (other than small and solvent companies described above) significant managerial assistance; except that, where the BDC purchases such securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available managerial assistance means, among other things, any arrangement whereby the BDC, through its directors, officers or employees, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. Our Investment Adviser or an affiliate thereof may provide such managerial assistance on our behalf to portfolio companies that request such assistance. We may receive fees for these services.
Temporary Investments
Pending investment in other types of “qualifying assets,” as described above, our investments may consist of cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment, which we refer to, collectively, as “temporary investments,” so that 70% of our assets are qualifying assets. We may also invest in U.S. Treasury bills or in repurchase agreements, provided that such agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price which is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our gross assets constitute repurchase agreements from a single counterparty, we would not meet the diversification tests in order to qualify as a RIC. Thus, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. Our Investment Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.
 
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Indebtedness and Senior Securities
We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the Investment Company Act, is at least equal to 200% immediately after each such issuance. In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see “Risk Factor—Risks Related to Our Business and Structure—Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage . ”
Code of Ethics
We and our Investment Adviser have each adopted a code of ethics pursuant to Rule 17j-1 under the Investment Company Act and Rule 204A-1 under the Advisers Act, respectively, that establishes procedures for personal investments and restricts certain transactions by our personnel. Our codes of ethics generally do not permit investments by our and our Investment Adviser’s personnel in securities that may be purchased or sold by us. Our code of ethics is filed with the SEC. For information on how to obtain a copy of the code of ethics, see “Where You Can Find More Information.”
Compliance Policies and Procedures
We and our Investment Adviser have each adopted and implemented written policies and procedures reasonably designed to detect and prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation and designate a Chief Compliance Officer to be responsible for administering the policies and procedures.
Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act imposes a wide variety of regulatory requirements on publicly held companies and their insiders. Many of these requirements affect us. For example:
 
 	•	 	pursuant to Rule 13a-14 of the Exchange Act, our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports;	
 
 	•	 	pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;	
 
 	•	 	pursuant to Rule 13a-15 of the Exchange Act, our management must prepare a report regarding its assessment of our internal control over financial reporting and, starting from the date on which we cease to be an emerging growth company under the JOBS Act, must obtain an audit of the effectiveness of internal control over financial reporting performed by our independent registered public accounting firm; and	
 
 	•	 	pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to material weaknesses.	
The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.
 
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Proxy Voting Policies and Procedures
We have delegated our proxy voting responsibility to our Investment Adviser. The proxy voting policies and procedures of our Investment Adviser are set forth below. These guidelines are reviewed periodically by our Investment Adviser and our Independent Directors, and, accordingly, are subject to change.
An investment adviser registered under the Advisers Act has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, our Investment Adviser recognizes that it must vote portfolio securities in a timely manner free of conflicts of interest and in the best interests of its clients.
These policies and procedures for voting proxies are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.
Our Investment Adviser will vote proxies relating to our portfolio securities in what it perceives to be the best interest of our stockholders. Our Investment Adviser will review on a case-by-case basis each proposal submitted to a stockholder vote to determine its impact on the portfolio securities held by us. Although our Investment Adviser will generally vote against proposals that may have a negative impact on our portfolio securities, it may vote for such a proposal if there exist compelling long-term reasons to do so.
Our Investment Adviser’s proxy voting decisions will be made by its investment committee. To ensure that the vote is not the product of a conflict of interest, our Investment Adviser will require that: (1) anyone involved in the decision making process disclose to our Investment Adviser’s investment committee, and Independent Directors, any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision making process or vote administration are prohibited from revealing how our Investment Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties.
Stockholders may obtain information regarding how we voted proxies with respect to our portfolio securities during the three month period ended March 31, 2017 free of charge by making a written request for proxy voting information to our Investor Relations Department at TCG BDC, Inc., 520 Madison Avenue, 40th Floor, New York, New York, 10022, by calling us at (212) 813-4900 or on the SEC’s website at www.sec.gov.
Privacy Principles
We endeavor to maintain the privacy of our stockholders and to safeguard their non-public personal information. The following information is provided to help stockholders understand what non-public personal information we collect, how we protect that information and why, in certain cases, we may share that information with select other parties.
We may collect non-public personal information about stockholders from our subscription agreements or other forms, such as name, address, account number and the types and amounts of investments, and information about transactions with us or our affiliates, such as participation in other investment programs, ownership of certain types of accounts or other account data and activity. We may disclose the non-public personal information that we collect from our stockholders or former stockholders, as described above, to our affiliates and service providers and as allowed by applicable law or regulation. Any party that receives this information from us is permitted to use it only for the services required by us and as allowed by applicable law or regulation, and is not permitted to share or use this information for any other purpose. We permit access only by authorized personnel who need access to that non-public personal information to provide services to us and our stockholders. We also maintain physical, electronic and procedural safeguards for non-public personal information that are designed to comply with applicable law.
Compliance with Listing Requirements
We have applied to list our shares of common stock on NASDAQ Global Select Market under the symbol “CGBD”. As a listed company on the NASDAQ Global Select Market, we will be subject to various listing
 
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standards including corporate governance listing standards. We will monitor our compliance with all listing standards and will take actions necessary to ensure that we are in compliance therewith.
Compliance with the JOBS Act
We currently are, and following the completion of this offering expect to remain, an “emerging growth company,” as defined in the JOBS Act until the earliest of:
 
 	•	 	up to five years measured from the date of the first sale of common equity securities pursuant to an effective registration statement;	
 
 	•	 	the last day of the first fiscal year in which our annual gross revenues are $1.07 billion or more;	
 
 	•	 	the date on which we have, during the preceding three-year period, issued more than $1.0 billion in non-convertible debt; and	
 
 	•	 	the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of the common stock that is held by non-affiliates exceeds $700 million as of any June 30.	
Under the JOBS Act, we are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act, which would require that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. This may increase the risk that material weaknesses or other deficiencies in our internal control over financial reporting go undetected. See “Risk Factors—Risks Related to Our Business and Structure—We are obligated to maintain proper and effective internal control over financial reporting. Failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and the value of our common stock.”
In addition, Section 7(a)(2)(B) of the Securities Act and Section 13(a) of the Exchange Act, as amended by Section 102(b) of the JOBS Act, provide that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. However, pursuant to Section 107 of the JOBS Act, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
 
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U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a general summary of the material U.S. federal income tax considerations applicable to us, to our qualification and taxation as a RIC for U.S. federal income tax purposes under Subchapter M of the Code, and to an investment in shares of our common stock. This summary applies only to beneficial owners that acquire shares of our common stock in this initial offering at the offering price and that hold such common stock as capital assets.
This summary does not purport to be a complete description of all the income tax considerations applicable to such an investment. For example, we have not described all of the tax consequences that may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, partnerships or other pass-through entities and their owners, insurance companies, dealers in securities, a trader in securities that elects to use a market-to-market method of accounting for its securities holdings, pension plans and trusts, financial institutions, U.S. persons with a functional currency other than the U.S. dollar, non-U.S. stockholders (as defined below) engaged in a trade or business in the United States or entitled to claim the benefits of an applicable income tax treaty, persons who have ceased to be U.S. citizens or to be taxed as residents of the United States, “controlled foreign corporations,” “passive foreign investment companies,” and persons that will hold common stock as a position in a “straddle,” “hedge,” or as part of a “constructive sale” for U.S. federal income tax purposes. This summary assumes that investors hold our common stock as capital assets (within the meaning of the Code). The discussion is based upon the Code, its legislative history, existing and proposed regulations, and published rulings and court decisions all as currently in effect, all of which are subject to change or differing interpretations, possibly retroactively, which could affect the continuing validity of this discussion. We have not sought, and will not seek, any ruling from the Internal Revenue Service (“IRS”) regarding any matter discussed herein, and this discussion is not binding on the IRS. Accordingly, there can be no assurance that the IRS will not assert, and a court will not sustain, a position contrary to any of the tax consequences discussed herein. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invest in tax-exempt securities or certain other investment assets. For purposes of this discussion, a “U.S. stockholder” generally is a beneficial owner of shares of our common stock who is for U.S. federal income tax purposes:
 
 	•	 	an individual who is a citizen or resident of the United States;	
 
 	•	 	a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof, including, for this purpose, the District of Columbia;	
 
 	•	 	a trust if (i) a U.S. court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons (as defined in the Code) have the authority to control all of the substantial decisions of the trust, or (ii) the trust has in effect a valid election to be treated as a domestic trust for U.S. federal income tax purposes; or	
 
 	•	 	an estate, the income of which is subject to U.S. federal income taxation regardless of its source.	
For purposes of this discussion, a “non-U.S. stockholder” generally is a beneficial owner of the shares of our common stock that is not a U.S. stockholder or a partnership (or an entity or arrangement treated as a partnership) for U.S. federal income tax purposes.
If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership (or entity or arrangement treated as a partnership) and certain determinations made at the partner level. A prospective stockholder that is a partner of a partnership holding shares of our common stock should consult its tax advisors with respect to the partnership’s purchase, ownership and disposition of shares of our common stock.
 
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Tax matters are very complicated and the tax consequences to an investor of an investment in shares of our common stock will depend on the facts of its particular situation. We encourage investors to consult their own tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of U.S. federal, state, local and foreign tax laws, eligibility for the benefits of any applicable income tax treaty and the effect of any possible changes in the tax laws.
Election to be Taxed as a RIC
We have elected to be treated, and intend to qualify annually, as a RIC for U.S. federal income tax purposes under Subchapter M of the Code. As a RIC, we generally will not pay corporate-level U.S. federal income taxes on any net ordinary income or capital gains that we timely distribute to our stockholders as dividends. Instead, dividends we distribute generally will be taxable to the holders of our common stock, and any net operating losses, foreign tax credits and other tax attributes may not pass through to the holders of our common stock. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, we must comply with the Annual Distribution Requirement for any taxable year. The following discussion assumes that we qualify as a RIC and have satisfied the Annual Distribution Requirement for each taxable year.
Taxation as a Regulated Investment Company
As a RIC, and if we satisfy the Annual Distribution Requirement, then we will not be subject to U.S. federal income tax on the portion of our net taxable income that we timely distribute (or are deemed to timely distribute) to stockholders. We are subject to U.S. federal income tax at regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our stockholders.
In addition, if we fail to distribute in a timely manner an amount at least equal to the sum of (1) 98% of our ordinary income for the calendar year, (2) 98.2% of our capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any undistributed ordinary income and capital gain net income for preceding years on which we paid no U.S. federal income tax less certain over-distributions in prior years (together, the “Excise Tax Distribution Requirements”), we will be liable for a 4% nondeductible excise tax on the portion of the undistributed amounts of such income that are less than the amounts required to be distributed based on the Excise Tax Distribution Requirements. For this purpose, however, any ordinary income or capital gain net income retained by us that is subject to corporate income tax for the tax year ending in that calendar year will be considered to have been distributed by year end (or earlier if estimated taxes are paid). We currently intend to make sufficient distributions each taxable year to satisfy the Excise Tax Distribution Requirements.
In order to qualify as a RIC for U.S. federal income tax purposes under Subchapter M of the Code, we must, among other things:
 
 	•	 	continue to qualify and have in effect an election to be treated as a BDC under the Investment Company Act at all times during each taxable year;	
 
 	•	 	satisfy the 90% Gross Income Test; and	
 
 	•	 	satisfy the Diversification Tests.	
We intend to make distributions as additional shares of our common stock, unless you elect to “opt out” of our dividend reinvestment plan, in which case you will receive your distributions in cash. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable dividends. The IRS has issued private rulings indicating that this rule will apply even if the issuer limits the total amount of cash that may be distributed, provided that the limitation does not cause the cash to be less than 20% of the total distribution. We generally intend to pay
 
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distributions in cash to stockholders who have “opted out” of our dividend reinvestment plan. However, we reserve the right, in our sole discretion from time to time, to limit the total amount of cash distributed to as little as 20% of the total distribution depending on, among other factors, the levels of our cash balances. In such a case, each stockholder receiving cash would receive a pro rata share of the total cash to be distributed and would receive the remainder of their distribution in shares of stock. In no event will any stockholder that has “opted out” of our dividend reinvestment plan, in which case such stockholder will receive cash, receive less than 20% of his or her entire distribution in cash. For U.S. federal income tax purposes, the amount of a dividend paid in stock will be equal to the amount of cash that could have been received instead of stock.
Stockholders receiving dividends in shares of our common stock will be required to include the full amount of the dividend (including the portion payable in stock) as ordinary income (or, in certain circumstances, long-term capital gain) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our stockholders were to determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price (if any) of our common stock. It is unclear whether and to what extent we will be able to pay taxable dividends of the type described in this paragraph. We may make investments that produce income that is not matched by a corresponding cash receipt by us. Any such income would be treated as income earned by us and therefore would be subject to the distribution requirements of the Code. Such investments may require us to borrow money or dispose of other securities in order to comply with those requirements. However, under the Investment Company Act (and possibly certain debt covenants), we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. See “Regulation.”
Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Distribution Requirements, we may make such dispositions at times that, from an investment standpoint, are not advantageous. If we are prohibited from making distributions or are unable to raise additional debt or equity capital or sell assets to make distributions, we may not be able to make sufficient distributions to satisfy the Annual Distribution Requirement, and therefore would not be able to maintain our qualification as a RIC. Additionally, we may make investments that result in the recognition of ordinary income rather than capital gain, or that prevent us from accruing a long-term holding period. These investments may prevent us from making capital gain distributions as described below. We intend to monitor our transactions, make the appropriate tax elections and make the appropriate entries in our books and records when we make any such investments in order to mitigate the effect of these rules.
A RIC is limited in its ability to deduct expenses in excess of its “investment company taxable income” (which is, generally, ordinary income plus net realized short-term capital gains in excess of net realized long-term capital losses). If our expenses in a given year exceed our investment company income, we would have a net operating loss for that year. However, a RIC is not permitted to carry forward net operating losses to subsequent years and such net operating losses generally do not pass through to the holders of its common stock. In addition, expenses can be used only to offset investment company taxable income, not net capital gain. A RIC may not use any net capital losses (that is, realized capital losses in excess of realized capital gains) to offset the RIC’s investment company taxable income, but may carry forward such losses, and use them to offset future capital gains, indefinitely. Due to these limits on the deductibility of expenses and net capital losses, we may for U.S. federal income tax purposes have aggregate taxable income for several years that we are required to distribute and that is taxable to our stockholders even if such income is greater than the aggregate net income we
 
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actually earned during those years. Such distributions may be made from our cash assets or by liquidation of investments, if necessary. We may realize gains or losses from such liquidations. In the event we realize net capital gains from such transactions, you may receive a larger capital gain distribution than you would have received in the absence of such transactions. In addition, if future capital gains are offset by carried forward capital losses, such future capital gains are not subject to any corporate-level U.S. federal income tax, regardless of whether they are distributed to the holders of our common stock.
We may include in our taxable income certain amounts that we have not yet received in cash. For example, if we hold debt obligations that are treated under applicable U.S. federal income tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, that have increasing interest rates or are issued with warrants), we must include in our taxable income in each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether we receive cash representing such income in the same taxable year. We may also have to include in our taxable income other amounts that we have not yet received in cash, such as accruals on a contingent payment debt instrument or deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. Because such original issue discount or other amounts accrued will be included in our investment company taxable income for the year of accrual, we may be required to make distributions to the holders of our common stock in order to satisfy the Annual Distribution Requirement and/or the Excise Tax Avoidance Requirement, even though we will have not received any corresponding cash payments. Accordingly, to enable us to make distributions to the holders of our common stock that will be sufficient to enable us to satisfy the Annual Distribution Requirement, we may need to sell some of our assets at times and/or at prices that we would not consider advantageous, we may need to raise additional equity or debt capital or we may need to forego new investment opportunities or otherwise take actions that are disadvantageous to our business (or be unable to take actions that are advantageous to our business). If we are unable to obtain cash from other sources to enable us to satisfy the Annual Distribution Requirement, we may fail to qualify for the U.S. federal income tax benefits allowable to RICs and, thus, become subject to a corporate-level U.S. federal income tax (and any applicable state and local taxes).
Failure to Qualify as a RIC
If we failed to satisfy the 90% Gross Income Test for any taxable year or the Diversification Tests for any quarter of a taxable year, we might nevertheless continue to qualify as a RIC for such year if certain relief provisions of the Code applied (which might, among other things, require us to pay certain corporate-level U.S. federal taxes or to dispose of certain assets). If we failed to qualify for treatment as a RIC and such relief provisions did not apply to us, we would be subject to U.S. federal income tax on all of our taxable income at regular corporate U.S. federal income tax rates (and we also would be subject to any applicable state and local taxes), regardless of whether we make any distributions to the holders of our common stock. We would not be able to deduct distributions to our stockholders, nor would distributions to the holders of our common stock be required to be made for U.S. federal income tax purposes. Any distributions we make generally would be taxable to the holders of our common stock as ordinary dividend income and, subject to certain limitations under the Code, would be eligible for the 20% maximum rate applicable to individuals and other non-corporate U.S. stockholders, to the extent of our current or accumulated earnings and profits. Subject to certain limitations under the Code, U.S. holders of our common stock that are corporations for U.S. federal income tax purposes would be eligible for the dividends-received deduction. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the holder’s adjusted tax basis in its shares of our common stock, and any remaining distributions would be treated as capital gain.
Subject to a limited exception applicable to RICs that qualified as such under Subchapter M of the Code for at least one year prior to disqualification and that requalify as a RIC no later than the second year following the non-qualifying year, we could be subject to U.S. federal income tax on any unrealized net built-in gains in the assets held by us during the period in which we failed to qualify as a RIC that are recognized during the 5-year period after our requalification as a RIC, unless we made a special election to pay corporate-level U.S. federal
 
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income tax on such net built-in gains at the time of our requalification as a RIC. We may decide to be taxed as a regular corporation even if we would otherwise qualify as a RIC if we determine that treatment as a corporation for a particular year would be in our best interests.
Our Investments—General
Certain of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things, (1) treat dividends that would otherwise constitute qualified dividend income as non-qualified dividend income, (2) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (3) convert lower-taxed long-term capital gain into higher-taxed short-term capital gain or ordinary income, (4) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (5) cause us to recognize income or gain without receipt of a corresponding cash payment, (6) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (7) adversely alter the characterization of certain complex financial transactions and (8) produce income that will not be qualifying income for purposes of the 90% Gross Income Test. We monitor our transactions and may make certain tax elections to mitigate the potential adverse effect of these provisions, but there can be no assurance that we will be eligible for any such tax elections or that any adverse effects of these provisions will be mitigated.
Gain or loss recognized by us from warrants or other securities acquired by us, as well as any loss attributable to the lapse of such warrants, generally will be treated as capital gain or loss. Such gain or loss generally will be long-term or short-term depending on how long we held a particular warrant or security.
A portfolio company in which we invest may face financial difficulties that require us to work-out, modify or otherwise restructure our investment in the portfolio company. Any such transaction could, depending upon the specific terms of the transaction, result in unusable capital losses and future non-cash income. Any such transaction could also result in our receiving assets that give rise to non-qualifying income for purposes of the 90% Gross Income Test or otherwise would not count toward satisfying the Diversification Tests.
Our investment in non-U.S. securities may be subject to non-U.S. income, withholding and other taxes. In that case, our yield on those securities would be decreased. Stockholders generally will not be entitled to claim a U.S. foreign tax credit or deduction with respect to non-U.S. taxes paid by us.
If we purchase shares in a “passive foreign investment company” (a “PFIC”), we may be subject to U.S. federal income tax on a portion of any “excess distribution” received on, or any gain from the disposition of, such shares even if we distribute such income as a taxable dividend to the holders of our common stock. Additional charges in the nature of interest generally will be imposed on us in respect of deferred taxes arising from any such excess distribution or gain. If we invest in a PFIC and elect to treat the PFIC as a “qualified electing fund” under the Code (a “QEF”), in lieu of the foregoing requirements, we will be required to include in income each year our proportionate share of the ordinary earnings and net capital gain of the QEF, even if such income is not distributed by the QEF. Alternatively, we may be able to elect to mark-to-market at the end of each taxable year our shares in a PFIC; in this case, we will recognize as ordinary income any increase in the value of such shares, and as ordinary loss any decrease in such value to the extent that any such decrease does not exceed prior increases included in our income. Our ability to make either election will depend on factors beyond our control, and is subject to restrictions which may limit the availability of the benefit of these elections. Under either election, we may be required to recognize in a year income in excess of any distributions we receive from PFICs and any proceeds from dispositions of PFIC stock during that year, and such income will nevertheless be subject to the Annual Distribution Requirement and will be taken into account for purposes of determining whether we satisfy the Excise Tax Avoidance Requirement. See “—Taxation as a Regulated Investment Company” above.
Under Section 988 of the Code, gains or losses attributable to fluctuations in exchange rates between the time we accrue income, expenses or other liabilities denominated in a foreign currency and the time we actually
 
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collect such income or pay such expenses or liabilities are generally treated as ordinary income or loss. Similarly, gains or losses on foreign currency forward contracts and the disposition of debt obligations denominated in a foreign currency, to the extent attributable to fluctuations in exchange rates between the acquisition and disposition dates, are also treated as ordinary income or loss.
Some of the income that we might otherwise earn, such as fees for providing managerial assistance, certain fees earned with respect to our investments, income recognized in a work-out or restructuring of a portfolio investment or income recognized from an equity investment in an operating partnership, may not satisfy the 90% Gross Income Test. To manage the risk that such income might disqualify us as a RIC for failure to satisfy the 90% Gross Income Test, one or more subsidiary entities treated as U.S. corporations for U.S. federal income tax purposes may be employed to earn such income and (if applicable) hold the related asset. Such subsidiary entities will be required to pay U.S. federal income tax on their earnings, which ultimately will reduce the yield to the holders of our common stock on such fees and income.
Taxation of U.S. Stockholders
The following discussion applies only to U.S. stockholders. If you are not a U.S. stockholder this section does not apply to you.
Distributions by us generally are taxable to U.S. stockholders as ordinary income or capital gains. Distributions of our “investment company taxable income” (which is, generally, our ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to U.S. stockholders to the extent of our current or accumulated earnings and profits, whether paid in cash or reinvested in additional common stock. To the extent such distributions we pay to non-corporate stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations, such distributions (“Qualifying Dividends”) generally are taxable to U.S. stockholders at the preferential rates applicable to long-term capital gains. However, it is anticipated that distributions paid by us will generally not be attributable to dividends and, therefore, generally will not qualify for the preferential rates applicable to Qualifying Dividends or the dividends received deduction available to corporations under the Code. Distributions of our net capital gains (which are generally our realized net long-term capital gains in excess of realized net short-term capital losses) that are properly reported by us as “capital gain dividends” will be taxable to a U.S. stockholder as long-term capital gains that are currently taxable at reduced rates in the case of non-corporate taxpayers, regardless of the U.S. stockholder’s holding period for his, her or its common stock and regardless of whether paid in cash or reinvested in additional common stock. Distributions in excess of our earnings and profits first will reduce a U.S. stockholder’s adjusted tax basis in such stockholder’s common stock and, after the adjusted tax basis is reduced to zero, will constitute capital gains to such U.S. stockholder.
Our stockholders who have not “opted out” of our dividend reinvestment plan will have their cash dividends and distributions automatically reinvested in additional shares of our common stock, rather than receiving cash dividends and distributions. Any dividends or distributions reinvested under the plan will nevertheless remain taxable to U.S. stockholders. A U.S. stockholder will have an adjusted basis in the additional common stock purchased through the plan equal to the dollar amount that would have been received if the stockholder had received the dividend or distribution in cash, unless we were to issue new shares that are trading at or above net asset value, in which case, the stockholder’s basis in the new shares would generally be equal to their fair market value. The additional shares will have a new holding period commencing on the day following the day on which the shares are credited to the U.S. stockholder’s account.
Although we currently intend to distribute any net long-term capital gains at least annually, we may in the future decide to retain some or all of our net long-term capital gains but designate the retained amount as a “deemed distribution.” In that case, among other consequences, we will pay tax on the retained amount, each U.S. stockholder will be required to include such stockholder’s share of the deemed distribution in income as if it had been actually distributed to the U.S. stockholder, and the U.S. stockholder will be entitled to claim a credit
 
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equal to such stockholder’s allocable share of the tax paid on the deemed distribution by us. The amount of the deemed distribution net of such tax will be added to the U.S. stockholder’s tax basis for its shares of common stock. Since we expect to pay tax on any retained capital gains at the regular corporate tax rate, and since that rate is in excess of the maximum rate currently payable by individuals (and other non-corporate U.S. stockholders) on long-term capital gains, the amount of tax that individual stockholders (and other non-corporate U.S. stockholders) will be treated as having paid and for which they will receive a credit will exceed the tax they owe on the retained net capital gain. Such excess generally may be claimed as a credit against the U.S. stockholder’s other U.S. federal income tax obligations or may be refunded to the extent it exceeds a stockholder’s liability for U.S. federal income tax. In order to utilize the deemed distribution approach, we must provide written notice to our stockholders. We cannot treat any of our investment company taxable income as a “deemed distribution.”
For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of capital gain dividends paid for that year, we may, under certain circumstances, elect to treat a dividend that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, the U.S. stockholder will still be treated as receiving the dividend in the taxable year in which the distribution is made. However, any dividend declared by us in October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following year, will be treated as if it had been received by our U.S. stockholders on December 31 of the year in which the dividend was declared.
If an investor purchases shares of our common stock shortly before the record date of a distribution, the price of the shares will include the value of the distribution and the investor will be subject to tax on the distribution even though economically it may represent a return of the investment.
A stockholder generally will recognize taxable gain or loss if the stockholder sells or otherwise disposes of shares of our common stock. The amount of gain or loss will be measured by the difference between such stockholder’s adjusted tax basis in the common stock sold and the amount of the proceeds received in exchange. Any gain or loss arising from such sale or disposition generally will be treated as long-term capital gain or loss if the stockholder has held the shares for more than one year. Otherwise, such gain or loss will be classified as short-term capital gain or loss. However, any capital loss arising from the sale or disposition of shares of our common stock held for six months or less will be treated as long-term capital loss to the extent of the amount of capital gain dividends received, or undistributed capital gain deemed received, with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of shares of our common stock may be disallowed if other shares of our common stock are purchased (whether through reinvestment of distributions or otherwise) within 30 days before or after the disposition. In such a case, the basis of the common stock acquired will be increased to reflect the disallowed loss.
In general, individual and certain other non-corporate U.S. stockholders currently are subject to a maximum federal income tax rate of 20% on their net capital gain (i.e., the excess of realized net long-term capital gains over realized net short-term capital losses), including any long-term capital gain derived from an investment in our shares, and a maximum tax rate of 23.8% on their net taxable gain after taking into account the net investment income tax, discussed below. Such rate is lower than the maximum rate on ordinary income currently payable by individuals. Corporate U.S. stockholders currently are subject to U.S. federal income tax on net capital gain at the maximum 35% rate also applied to ordinary income. Non-corporate stockholders with net capital losses for a year (i.e., capital losses in excess of capital gains) generally may currently deduct up to $3,000 of such losses against their ordinary income each year; any net capital losses of a non-corporate U.S. stockholder in excess of $3,000 generally may be carried forward and used in subsequent years as provided in the Code. Corporate U.S. stockholders generally may not deduct any net capital losses for a year, but may carry back such losses for three years or carry forward such losses for five years.
We believe that we will qualify as a publicly offered RIC and will continue to qualify as a publicly offered RIC for this and future tax years. We qualify as a publicly offered RIC if either (i) shares of our common stock
 
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being held by at least 500 persons at all times during a taxable year or (ii) shares of our common stock being treated as regularly traded on an established securities market. For any period that we are not considered to be a “publicly offered” RIC, for purposes of computing the taxable income of U.S. stockholders that are individuals, trusts or estates, (i) our earnings will be computed without taking into account such U.S. stockholders’ allocable shares of the management and incentive fees paid to our investment adviser and certain of our other expenses, (ii) each such U.S. stockholder will be treated as having received or accrued a dividend from us in the amount of such U.S. stockholder’s allocable share of these fees and expenses for the calendar year, (iii) each such U.S. stockholder will be treated as having paid or incurred such U.S. stockholder’s allocable share of these fees and expenses for the calendar year and (iv) each such U.S. stockholder’s allocable share of these fees and expenses will be treated as miscellaneous itemized deductions by such U.S. stockholder. Miscellaneous itemized deductions generally are deductible by a U.S. stockholder of our common stock that is an individual, trust or estate only to the extent that the aggregate of such U.S. stockholder’s miscellaneous itemized deductions exceeds 2% of such U.S. stockholder’s adjusted gross income for U.S. federal income tax purposes, are not deductible for purposes of the alternative minimum tax and are subject to the overall limitation on itemized deductions under Section 67 of the Code.
We will send to each of our U.S. stockholders, as promptly as possible after the end of each calendar year, a notice detailing, on a per share and per distribution basis, the amounts includible in such U.S. stockholder’s taxable income for such year as ordinary income and as long-term capital gain. In addition, the U.S. federal tax status of each year’s distributions generally will be reported to the IRS (including the amount of dividends, if any, eligible for the preferential rates applicable to long-term capital gains). Dividends paid by us generally will not be eligible for the dividends-received deduction or the preferential tax rate applicable to Qualifying Dividends because our income generally will not consist of dividends. Distributions may also be subject to additional state, local and foreign taxes depending on a U.S. stockholder’s particular situation.
Tax Shelter Reporting Regulations
If a U.S. stockholder recognizes a loss with respect to common stock of the Company of $2 million or more for a non-corporate U.S. stockholder or $10 million or more for a corporate U.S. stockholder, the U.S. stockholder generally must file with the IRS a disclosure statement on Form 8886. Direct U.S. stockholders of portfolio securities are in many cases exempted from this reporting requirement, but under current guidance, U.S. stockholders of a RIC are not exempted. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Significant monetary penalties apply to a failure to comply with this reporting requirement. States may also have a similar reporting requirement. U.S. stockholders should consult their own tax advisors to determine the applicability of these regulations in light of their specific circumstances.
Net Investment Income Tax
A U.S. stockholder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will generally be subject to a 3.8% tax on the lesser of (i) the U.S. stockholder’s “net investment income” for a taxable year and (ii) the excess of the U.S. holder’s modified adjusted gross income for such taxable year over $200,000 ($250,000 in the case of joint filers). For these purposes, “net investment income” will generally include interest and taxable distributions and deemed distributions paid with respect to the notes and our common stock, and net gain attributable to the disposition of the notes and our common stock (in each case, unless such notes or common stock is held in connection with certain trades or businesses), but will be reduced by any deductions properly allocable to such distributions or net gain.
Taxation of Non-U.S. Stockholders
The following discussion applies only to non-U.S. stockholders. If you are not a non-U.S. stockholder, this discussion does not apply to you.
 
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Whether an investment in shares of our common stock is appropriate for a non-U.S. stockholder will depend upon that stockholder’s particular circumstances. An investment in shares of our common stock by a non-U.S. stockholder may have adverse tax consequences.
Distributions of our “investment company taxable income” to non-U.S. stockholders (including interest income and realized net short-term capital gains in excess of realized long-term capital losses, which generally would be free of withholding if paid to non-U.S. stockholders directly) will be subject to withholding of U.S. federal tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current and accumulated earnings and profits unless the distributions are effectively connected with a U.S. trade or business of the non-U.S. stockholder. This withholding may be applied to reduce any future distributions to which you may be entitled. If the distributions are effectively connected with a U.S. trade or business of the non-U.S. stockholder, and, if required by an applicable income tax treaty, attributable to a permanent establishment in the United States, the distributions will be subject to federal income tax at the rates applicable to U.S. stockholders, and we will not be required to withhold U.S. federal income tax if the non-U.S. stockholder complies with applicable certification and disclosure requirements. Special certification requirements apply to a non-U.S. stockholder that is a foreign partnership or a foreign trust, and such entities are urged to consult their own tax advisors.
Certain properly designated dividends received by a non-U.S. stockholder are generally exempt from withholding of U.S. federal income tax where they (1) are paid in respect of our “qualified net interest income” (generally, our U.S.-source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we or the non-U.S. stockholder of our common stock are at least a 10% stockholder, reduced by expenses that are allocable to such income), or (2) are paid in connection with our “qualified short-term capital gains” (generally, the excess of our net short-term capital gain over our long-term capital loss for such taxable year). However, depending on the circumstances, we may designate all, some or none of our potentially eligible dividends as such qualified net interest income or as qualified short-term capital gains, and/or treat such dividends, in whole or in part, as ineligible for this exemption from withholding. In order to qualify for this exemption from withholding, a non-U.S. stockholder must comply with applicable certification requirements relating to its non-U.S. status (including, in general, furnishing an IRS Form W-8 or an acceptable substitute or successor form). In the case of shares held through an intermediary, the intermediary may withhold even if we designate the payment as qualified net interest income or qualified short-term capital gain. Non-U.S. stockholders should contact their intermediaries with respect to the application of these rules to their accounts.
Actual or deemed distributions of our net capital gains to a stockholder that is a non-U.S. stockholder, and gains realized by a non-U.S. stockholder upon the sale or redemption of our common stock, will not be subject to U.S. federal income tax or any withholding of such tax unless (a) the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the non-U.S. stockholder (and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the non-U.S. stockholder in the United States), in which case the distribution or gains will be subject to U.S. federal income tax on a net basis at the rates and in the manner applicable to U.S. stockholders generally or, (b) in the case of an individual, the non-U.S. stockholder was present in the United States for 183 days or more during the taxable year and certain other conditions are met, in which case, except as otherwise provided by an applicable income tax treaty, the distributions or gain, which may be offset by certain U.S.-source capital losses, generally will be subject to a flat 30% U.S. federal income tax, even though the non-U.S. stockholder is not considered a resident alien under the Code.
If we distribute our net capital gains in the form of deemed rather than actual distributions, a stockholder that is a non-U.S. stockholder will be entitled to a U.S. federal income tax credit or tax refund equal to the stockholder’s allocable share of the corporate-level tax we pay on the capital gains deemed to have been distributed; however, in order to obtain the refund, the non-U.S. stockholder must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return even if the non-U.S. stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return.
 
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For a corporate non-U.S. stockholder, distributions (both actual and deemed), and gains realized upon the sale or redemption of our common stock that are effectively connected to a U.S. trade or business may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if provided for by an applicable income tax treaty). Our stockholders who have not “opted out” of our dividend reinvestment plan will have their cash distributions automatically reinvested in additional shares of our common stock, rather than receiving the cash distributions. If a distribution is a distribution of our investment company taxable income and it is not effectively connected with a U.S. trade or business of the non-U.S. stockholder (or, if a treaty applies, is not attributable to a permanent establishment of the non-U.S. stockholder), the amount distributed (to the extent of our current or accumulated earnings and profits) would be subject to withholding of U.S. federal income tax at a 30% rate (or lower rate provided by an applicable income tax treaty) and only the net after-tax amount will be reinvested in shares of our common stock. If the distribution is effectively connected with a U.S. trade or business of the non-U.S. stockholder (or, if a treaty applies, is not attributable to a permanent establishment of the non-U.S. stockholder), generally the full amount of the distribution will be reinvested in the plan and will nevertheless be subject to U.S. federal income tax at the ordinary income rates applicable to U.S. persons. The non-U.S. stockholder will have an adjusted tax basis in the additional shares of our common stock purchased through the plan equal to the total dollar amount that would have been received if the stockholder had received the distribution in cash, unless we issue new shares that are trading at or above net asset value, in which case, the stockholder’s basis in the new shares would generally be equal to their fair market value. The additional shares would have a new holding period commencing on the day following the day on which the shares are credited to the non-U.S. stockholder’s account.
A non-U.S. stockholder who is a non-resident alien individual may be subject to information reporting and backup withholding of U.S. federal income tax on dividends unless the non-U.S. stockholder provides us or the dividend paying agent with an IRS Form W-8 or an acceptable substitute form or otherwise meets documentary evidence requirements for establishing that it is a non-U.S. stockholder or otherwise establishes an exemption from backup withholding.
Non-U.S. persons should consult their own tax advisors with respect to the U.S. federal income tax and withholding tax, and state, local and foreign tax consequences before investing in our common stock.
Certain Additional Tax Considerations
Information Reporting and Backup Withholding
U.S. stockholders. Information returns will generally be filed with the IRS in connection with payments on our common stock and the proceeds from a sale or other disposition of our common stock. We may be required to withhold federal income tax (“backup withholding”) at currently applicable rates, from all taxable distributions to any U.S. stockholder (other than a stockholder that otherwise qualifies for an exemption) (1) who fails to furnish us with a correct taxpayer identification number or a certificate that such stockholder is exempt from backup withholding or (2) with respect to whom the IRS notifies us that such stockholder has failed to properly report certain interest and dividend income to the IRS and to respond to notices to that effect. An individual’s taxpayer identification number generally is his or her social security number. Backup withholding is not an additional tax, and any amount withheld under backup withholding may be refunded or credited against the U.S. stockholder’s federal income tax liability, provided that proper information is timely provided to the IRS.
Non-U.S. stockholders. Generally, we must report to the IRS and to non-U.S. stockholders the amount of interest and dividends paid to the non-U.S. stockholder and the amount of tax, if any, withheld with respect to those payments. Copies of the information returns reporting such dividend payments and any withholding may also be made available to the tax authorities in the country in which the holder resides under the provisions of an applicable tax treaty or agreement. In general, a non-U.S. stockholder will not be subject to backup withholding with respect to payments of dividends if the non-U.S. stockholder provides its name and address, and certifies, under penalties of perjury, to the applicable withholding agent that it is not a U.S. person (which certification
 
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may be made on an IRS W-8BEN or W-8BEN-E (or successor form)) or (b) the non-U.S. stockholder holds our common stock through certain foreign intermediaries or certain foreign partnerships, and satisfies the certification requirements of applicable Treasury regulations. A non-U.S. stockholder will be subject to information reporting and, depending on the circumstances, backup withholding with respect to the proceeds of the sale or other disposition (including a redemption) of shares of our common stock within the United States or conducted through certain U.S.-related payors, unless the payor of the proceeds receives the statement described above or the non-U.S. stockholder otherwise establishes an exemption
Withholding and Information Reporting on Foreign Financial Accounts
Under the Code and recently issued Treasury regulations, the applicable withholding agent generally will be required to withhold 30% of any payments of dividends on our common stock and, after December 31, 2018, 30% of the gross proceeds from a sale or other disposition of our common stock paid, in each case, to (i) a non-U.S. financial institution (whether such financial institution is the beneficial owner or an intermediary) unless such non-U.S. financial institution agrees to verify, report and disclose its U.S. account holders and meets certain other specified requirements or (ii) a non-financial non-U.S. entity (whether such entity is the beneficial owner or an intermediary) unless such entity certifies that it does not have any substantial U.S. owners or provides the name, address and taxpayer identification number of each substantial U.S. owner and such entity meets certain other specified requirements. If payment of this withholding tax is made, non-U.S. stockholders that are otherwise eligible for an exemption from, or a reduction in, withholding of U.S. federal income taxes with respect to such interest, dividends or proceeds will be required to seek a credit or refund from the IRS to obtain the benefit of such exemption or reduction. We will not pay any additional amounts in respect of any amounts withheld. This withholding may be applied to reduce any future distributions to which you may be entitled.
All stockholders should consult their own tax advisers with respect to the U.S. federal income and withholding tax consequences, and state, local and non-U.S. tax consequences, of an investment in our common stock.
 
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CUSTODIAN, TRANSFER AND DISTRIBUTION PAYING AGENT AND REGISTRAR
Our assets are held by State Street Bank and Trust Company pursuant to a custody agreement. State Street also acts as our transfer agent, distribution paying agent and registrar for our common stock. The principal business address of State Street Bank and Trust Company is One Heritage Drive, Floor 1, North Quincy, MA 02171.
 
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BROKERAGE ALLOCATION AND OTHER PRACTICES
Since the Company generally acquires and disposes of its investments in privately negotiated transactions, it infrequently uses brokers in the normal course of business.
Subject to policies established by the Company’s Board of Directors, the Investment Adviser is primarily responsible for the execution of any traded securities in the Company’s portfolio and the Company’s allocation of brokerage commissions. The Investment Adviser does not expect to execute transactions through any particular broker or dealer, but seeks to obtain the best net results for the Company, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operations facilities of the firm and the firm’s risk and skill in positioning blocks of securities.
While the Investment Adviser generally seeks reasonably competitive trade execution costs, the Company will not necessarily pay the lowest spread or commission available. Subject to applicable legal requirements, the Investment Adviser may select a broker based partly upon brokerage or research services provided to the Investment Adviser and the Company and any other clients. In return for such services, the Company may pay a higher commission than other brokers would charge if the Investment Adviser determines in good faith that such commission is reasonable in relation to the services provided.
 
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UNDERWRITING
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us, our Investment Adviser and the underwriters, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the number of shares of common stock set forth opposite its name below.

Underwriter	  	Number
of Shares	 	
Merrill Lynch, Pierce, Fenner & Smith
                       Incorporated	  	 	 	 	
Morgan Stanley & Co. LLC	  	 	 	 	
J.P. Morgan Securities LLC	  	 	 	 	
Citigroup Global Markets Inc.	  	 	 	 	
Keefe, Bruyette & Woods, Inc.	  	 	 	 	
Wells Fargo Securities, LLC	  	 	 	 	
HSBC Securities (USA) Inc.	  	 	 	 	
Mizuho Securities USA LLC	  	 	 	 	
 	  	 	 	 	
                       Total	  	 	9,000,000	 	
 	  	 	 	 	
Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the underwriting agreement if any of these shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.
The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officers’ certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Pursuant to the underwriting agreement in connection with this offering, our Investment Adviser has agreed to pay 50% of the sales load.
Commissions and Discounts
The representatives have advised us that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover of this prospectus and to dealers at that price less a concession not in excess of $         per share. After the initial offering, the public offering price, concession or any other term of the offering may be changed.
 
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The following table shows the public offering price and underwriting discount we will pay to the underwriters and proceeds before expenses to us. The information assumes either no exercise or full exercise by the underwriters of their option to purchase additional shares.

 	  	Per
Share	 	  	Without
Option	 	  	With
Option	 	
Public offering price	  	$	        	 	  	$	        	 	  	$	        	 	
Underwriting discount and commissions(1)	  	$	 	 	  	$	 	 	  	$	 	 	
Proceeds, before expenses, to TCG BDC, Inc.	  	$	 	 	  	$	 	 	  	$	 	 	
 
(1)	Our Investment Adviser has agreed to pay to the underwriters another $         million, or $         per share (or $         million, or $         per share, if the option to purchase additional shares is fully exercised) of the sales load in connection with this offering, which is not reflected in the above table.	
The expenses of the offering, not including the underwriting discount, but including up to $15,000 in reimbursement of certain underwriters’ counsel fees in connection with the review of the terms of this offering by the Financial Industry Regulatory Authority, Inc., are estimated at approximately $1.8 million and are payable by us. Our Investment Adviser has agreed to pay 50% of the total offering expenses in connection with this offering. We are not obligated to repay the expenses paid by our Investment Adviser. In addition, the underwriters have agreed to reimburse us for certain expenses incurred by us in connection with this offering.
Option to Purchase Additional Shares
We have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to 1,350,000 additional shares at the public offering price, less the underwriting discount. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter’s initial amount reflected in the above table.
No Sales of Similar Securities
Stockholders that purchased our shares of common stock prior to our IPO will not sell or transfer any common stock or securities convertible into, exchangeable for, exercisable for or repayable with common stock, for 180 days after the date of this prospectus without first obtaining the written consent of at least three of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Citigroup Global Markets Inc. (in such capacity, the “Representatives”). Pursuant to the subscription agreements and as approved by the Board, upon completion of this offering and the expiration of the 180 day lock-up, the stockholders’ shares held prior to this offering will continue to be locked up subject to the releases described in “Shares Eligible for Future Sale.”
Our executive officers, directors and our investment adviser, have agreed not to sell or transfer any common stock or securities convertible into, exchangeable for, exercisable for or repayable with common stock, for 365 days after the date of this prospectus without first obtaining the written consent of at least three of the Representatives. We have agreed not to sell or transfer any common stock or securities convertible into, exchangeable for, exercisable for or repayable with common stock, for 180 days after the date of this prospectus without first obtaining the written consent of at least three of the Representatives. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:
 
 	•	 	offer, pledge, sell or contract to sell any common stock,	
 
 	•	 	sell any option or contract to purchase any common stock,	
 
 	•	 	purchase any option or contract to sell any common stock,	
 
 	•	 	grant any option, right or warrant for the sale of any common stock,	
 
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 	•	 	lend or otherwise dispose of or transfer any common stock,	
 
 	•	 	request or demand that we file a registration statement related to the common stock, or	
 
 	•	 	enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.	
This lock-up provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.
Listing
We expect the shares to be approved for listing on NASDAQ Global Select Market, subject to notice of issuance, under the symbol “CGBD”.
Determination of the Initial Public Offering Price
Before this offering, there has been no public market for our common stock. The initial public offering price will be determined through negotiations between us and the representatives of the underwriters. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:
 
 	•	 	the information included in this prospectus and otherwise available to the representatives,	
 
 	•	 	the valuation multiples of publicly traded companies that the representatives believe to be comparable to us,	
 
 	•	 	our financial information,	
 
 	•	 	the history of, and the prospects for, our company and the industry in which we compete,	
 
 	•	 	an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues,	
 
 	•	 	the present state of our development,	
 
 	•	 	the general condition of the securities markets at the time of the offering,	
 
 	•	 	the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours, and	
 
 	•	 	other factors deemed relevant by us and the representatives.	
An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial public offering price.
The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.
Price Stabilization, Short Positions and Penalty Bids
Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our common stock. However, the representatives may engage in transactions that stabilize the price of the common stock, such as bids or purchases to peg, fix or maintain that price.
 
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In connection with the offering, the underwriters may purchase and sell our common stock in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the option granted to them. “Naked” short sales are sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of common stock made by the underwriters in the open market prior to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the NASDAQ Global Select Market, in the over-the-counter market or otherwise.
Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
Electronic Distribution
In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.
Other Relationships
Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us, our affiliates or our portfolio companies including certain affiliates of the underwriters having acted as agent in connection with certain of our historical private placement transactions. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
 
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Affiliates of BofA Merrill Lynch, Citigroup and Mizuho are lenders under the SPV Credit Facility and affiliates of BofA Merrill Lynch, Morgan Stanley, J.P. Morgan and HSBC are lenders under the Credit Facility. Accordingly, if we used 100% of the proceeds to repay a portion of our outstanding debt under the SPV Credit Facility or 100% of the proceeds to repay a portion of our outstanding debt under the Credit Facility, it is expected that the highest percentage that could be received by affiliates of BofA Merrill Lynch would be approximately 20% of the net proceeds of the offering, the highest percentage that could be received by affiliates of Morgan Stanley would be approximately 10% of the net proceeds of the offering, the highest percentage that could be received by affiliates of J.P. Morgan would be approximately 18% of the net proceeds of the offering, the highest percentage that could be received by affiliates of Citigroup would be approximately 38% of the net proceeds of the offering, the highest percentage that could be received by affiliates of HSBC would be approximately 18% of the net proceeds of the offering and the highest percentage that could be received by affiliates of Mizuho would be approximately 13% of the net proceeds of the offering, based upon the proposed maximum aggregate offering price set forth on the cover page of this prospectus. These numbers are subject to change depending on how we ultimately decide to allocate the proceeds from this offering between our two Facilities.
An affiliate of Morgan Stanley is acting as agent for the 10b5-1 Plan, under which it will repurchase up to $15 million in the aggregate of common stock during the period ending on the earlier of the date on which the capital committed to the 10b5-1 Plan has been exhausted or one year after the closing of the offering.
Notice to Prospective Investors in Canada
The shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106  Prospectus Exemptions  or subsection 73.3(1) of the  Securities Act  (Ontario), and are permitted clients, as defined in National Instrument 31-103  Registration Requirements, Exemptions and Ongoing Registrant Obligations . Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105  Underwriting Conflicts  ( NI 33-105 ), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering
Notice to Prospective Investors in the Dubai International Financial Centre
This document relates to a company which is not subject to any form of regulation or approval by the Dubai Financial Services Authority (“DFSA”).
The DFSA has not approved this document nor has any responsibility for reviewing or verifying any document or other documents in connection with this company. Accordingly, the DFSA has not approved this document or any other associated documents nor taken any steps to verify the information set out in this document, and has no responsibility for it.
The shares of common stock have not been offered and will not be offered to any persons in the Dubai International Financial Centre except on that basis that an offer is:
(i) an ‘‘Exempt Offer’’ in accordance with the Markets Rules (MKT) module of the DFSA; and
(ii) made only to persons who meet the Professional Client criteria set out in Rule 2.3.2 of the DFSA Conduct of Business Module.
 
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This document must not, therefore, be delivered to, or relied on by, any other type of person. The company to which this document relates may be illiquid and/or subject to restrictions on its resale. Prospective purchasers should conduct their own due diligence on the company.
The DFSA has not taken steps to verify the information set out in this document, and has no responsibility for it. If you do not understand the contents of this document you should consult an authorized financial adviser.
Notice to Prospective Investors in Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act), or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.
The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of twelve months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.
This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
Notice to Prospective Investors in Hong Kong
The securities have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document relating to the securities has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
Principal Business Address
The principal business address of Merrill Lynch, Pierce, Fenner & Smith Incorporated is One Bryant Park, New York, New York 10036. The principal business address of Morgan Stanley & Co. LLC is 1585 Broadway, New York, New York 10036. The principal business address of J.P. Morgan Securities LLC is 383 Madison Avenue, New York, New York 10179. The principal business address of Citigroup Global Markets Inc. is 388 Greenwich Street, New York, New York 10013.
 
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LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the Company by Proskauer Rose LLP, Los Angeles, California, Sullivan & Cromwell LLP, New York, New York and Venable LLP, Baltimore, Maryland. Certain legal matters in connection with the offering will be passed upon for the underwriters by Freshfields Bruckhaus Deringer US LLP, New York, New York.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements of TCG BDC, Inc. at December 31, 2016 and 2015, and for each of the three years in the period ended December 31, 2016, and the senior securities schedule under the heading “Senior Securities” as of December 31, 2016, 2015, 2014 and 2013, appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, 5 Times Square, New York, NY 10036, independent registered public accounting firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form N-2, together with all amendments and related exhibits, under the Securities Act, with respect to our shares of common stock offered by this prospectus. The registration statement contains additional information about us and our shares of common stock being offered by this prospectus.
We also file with or submit to the SEC periodic and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act. You may inspect and copy these reports, proxy statements and other information, as well as the registration statement and related exhibits and schedules, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549-0102. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
We maintain a website (www.tcgbdc.com) and intend to make all of our annual, quarterly and current reports, proxy statements and other publicly filed information available, free of charge, on or through our website. You may also obtain such information by contacting us by mail sent to the attention of the Secretary of the Company, Matthew Cottrell, at our principal executive offices located at 520 Madison Avenue, 40th Floor, New York, NY 10022 or you can call us by dialing 212-813-4900. The SEC maintains an Internet site that contains reports, proxy and information statements and other information filed electronically by us with the SEC which are available on the SEC’s Internet site at http://www.sec.gov. Copies of these reports, proxy and information statements and other information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549-0102.
 
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TCG BDC, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

TCG BDC, Inc.	  	 	 	 	
 	 	
Unaudited Financial Statements	  	 	 	 	
 	 	
Consolidated Statements of Assets and Liabilities as of March 31, 2017 (unaudited) and December 31, 2016	  	 
	F-2

 	 	
Consolidated Statements of Operations for the three month periods ended March 31, 2017 (unaudited) and March 31, 2016 (unaudited)	  	 
	F-3

 	 	
Consolidated Statements of Changes in Net Assets for the three month periods ended March 31, 2017 (unaudited) and March 31, 2016 (unaudited)	  	 
	F-4

 	 	
Consolidated Statements of Cash Flows for the three month periods ended March 31, 2017 (unaudited) and March 31, 2016 (unaudited)	  	 
	F-5

 	 	
Consolidated Schedules of Investments as of March 31, 2017 (unaudited) and December 31, 2016	  	 
	F-6

 	 	
Notes to Consolidated Financial Statements (unaudited)	  	 
	F-20

 	 	
Audited Financial Statements	  	 	 	 	
 	 	
Report of Independent Registered Public Accounting Firm	  	 
	F-56

 	 	
Consolidated Statements of Assets and Liabilities as of December 31, 2016 and 2015	  	 
	F-57

 	 	
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014	  	 
	F-58

 	 	
Consolidated Statements of Changes in Net Assets for the years ended December 31, 2016, 2015 and 2014	  	 
	F-59

 	 	
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	  	 	F-60	 	
 	 	
Consolidated Schedules of Investments as of December  31, 2016 and 2015	  	 
	F-61

 	 	
Notes to Consolidated Financial Statements	  	 
	F-78

 	 	
Unaudited Pro Forma Consolidated Financial Statements	  	 	 	 	
 	 	
Pro Forma Condensed Consolidated Statement of Assets and Liabilities, as of December 31, 2016	  	 	F-114	 	
 	 	
Pro Forma Consolidated Statement of Operations, for the year ended December 31, 2016	  	 	F-116	 	
 	 	
Pro Forma Consolidated Schedule of Investments, as of December 31, 2016	  	 	F-118	 	
 	 	
Notes to Pro Forma Consolidated financial Statements	  	 	F-126	 	
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollar amounts in thousands, except per share data)

 	  	March 31,
2017	 	 	December 31,
2016	 	
 	  	(unaudited)	 	 	 	 	
ASSETS	  	 	 	 	 	 	 	 	
Investments, at fair value	  	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,263,462 and $1,332,596, respectively)	  	$	1,258,424	 	 	$	1,323,102	 	
Investments—controlled/affiliated, at fair value (amortized cost of $131,545 and $97,385, respectively)	  	 	134,121	 	 	 	99,657	 	
 	  	 	 	 	 	 	 	 	
Total investments, at fair value (amortized cost of $1,395,007 and $1,429,981, respectively)	  	 	1,392,545	 	 	 	1,422,759	 	
Cash and cash equivalents	  	 	44,874	 	 	 	38,489	 	
Receivable for investment sold	  	 	11,874	 	 	 	19,750	 	
Deferred financing costs	  	 	3,221	 	 	 	3,308	 	
Interest receivable from non-controlled/non-affiliated investments	  	 	3,272	 	 	 	3,407	 	
Interest and dividend receivable from controlled/affiliated investments	  	 	3,048	 	 	 	2,400	 	
Prepaid expenses and other assets	  	 	159	 	 	 	42	 	
 	  	 	 	 	 	 	 	 	
Total assets	  	$	1,458,993	 	 	$	1,490,155	 	
 	  	 	 	 	 	 	 	 	
LIABILITIES	  	 	 	 	 	 	 	 	
Secured borrowings (Note 6)	  	$	390,608	 	 	$	421,885	 	
2015-1 Notes payable, net of unamortized debt issuance costs of $2,100 and $2,151, respectively (Note 7)	  	 	270,900	 	 	 	270,849	 	
Due to Investment Adviser	  	 	86	 	 	 	215	 	
Interest and credit facility fees payable (Notes 6 and 7)	  	 	3,703	 	 	 	3,599	 	
Dividend payable (Note 9)	  	 	17,100	 	 	 	20,018	 	
Base management and incentive fees payable (Note 4)	  	 	11,764	 	 	 	8,157	 	
Administrative service fees payable (Note 4)	  	 	115	 	 	 	137	 	
Other accrued expenses and liabilities	  	 	1,399	 	 	 	1,158	 	
 	  	 	 	 	 	 	 	 	
Total liabilities	  	 	695,675	 	 	 	726,018	 	
 	  	 	 	 	 	 	 	 	
Commitments and contingencies (Notes 8 and 11)	  	 	 	 	 	 	 	 	
NET ASSETS	  	 	 	 	 	 	 	 	
Common stock, $0.01 par value; 200,000,000 shares authorized; 41,708,155 shares and 41,702,318 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	  	 	417	 	 	 	417	 	
Paid-in capital in excess of par value	  	 	799,688	 	 	 	799,580	 	
Offering costs	  	 	(74	) 	 	 	(74	) 	
Accumulated net investment income (loss), net of cumulative dividends of $146,165 and $129,065 at March 31, 2017 and December 31, 2016, respectively	  	 	(1,200	) 	 	 	(3,207	) 	
Accumulated net realized gain (loss)	  	 	(33,051	) 	 	 	(25,357	) 	
Accumulated net unrealized appreciation (depreciation)	  	 	(2,462	) 	 	 	(7,222	) 	
 	  	 	 	 	 	 	 	 	
Total net assets	  	$	763,318	 	 	$	764,137	 	
 	  	 	 	 	 	 	 	 	
NET ASSETS PER SHARE	  	$	18.30	 	 	$	18.32	 	
 	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share data)
(unaudited)

 	  	For the three month periods
ended	 	
 	  	March 31,
2017	 	 	March 31,
2016	 	
Investment income:	  	 	 	 	 	 	 	 	
Interest income from non-controlled/non-affiliated investments	  	$	28,354	 	 	$	22,111	 	
Other income from non-controlled/non-affiliated investments	  	 	2,536	 	 	 	999	 	
Interest income from controlled/affiliated investments	  	 	1,949	 	 	 	—  	 	
Dividend income from controlled/affiliated investments	  	 	1,260	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	
Total investment income	  	 	34,099	 	 	 	23,110	 	
 	  	 	 	 	 	 	 	 	
Expenses:	  	 	 	 	 	 	 	 	
Base management fees (Note 4)	  	 	5,125	 	 	 	4,140	 	
Incentive fees (Note 4)	  	 	4,777	 	 	 	2,990	 	
Professional fees	  	 	443	 	 	 	431	 	
Administrative service fees (Note 4)	  	 	173	 	 	 	148	 	
Interest expense (Notes 6 and 7)	  	 	5,034	 	 	 	3,599	 	
Credit facility fees (Note 6)	  	 	503	 	 	 	599	 	
Directors’ fees and expenses	  	 	103	 	 	 	120	 	
Other general and administrative	  	 	542	 	 	 	503	 	
 	  	 	 	 	 	 	 	 	
Total expenses	  	 	16,700	 	 	 	12,530	 	
Waiver of base management fees (Note 4)	  	 	1,708	 	 	 	1,380	 	
 	  	 	 	 	 	 	 	 	
Net expenses	  	 	14,992	 	 	 	11,150	 	
 	  	 	 	 	 	 	 	 	
Net investment income (loss)	  	 	19,107	 	 	 	11,960	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments:	  	 	 	 	 	 	 	 	
Net realized gain (loss) on investments—non-controlled/non-affiliated	  	 	(7,694	) 	 	 	(3,577	) 	
Net change in unrealized appreciation (depreciation) on investments—non-controlled/non-affiliated	  	 	4,456	 	 	 	(11,091	) 	
Net change in unrealized appreciation (depreciation) on investments—controlled/affiliated	  	 	304	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	 	(2,934	) 	 	 	(14,668	) 	
 	  	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	$	16,173	 	 	$	(2,708	) 	
 	  	 	 	 	 	 	 	 	
Basic and diluted earnings per common share (Note 9)	  	$	0.39	 	 	$	(0.08	) 	
 	  	 	 	 	 	 	 	 	
Weighted-average shares of common stock outstanding—Basic and Diluted (Note 9)	  	 	41,706,598	 	 	 	31,945,959	 	
 	  	 	 	 	 	 	 	 	
Dividends declared per common share (Note 9)	  	$	0.41	 	 	$	0.40	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(dollar amounts in thousands)
(unaudited)

 	  	For the three month periods ended	 	
 	  	    March 31, 2017    	 	 	    March 31, 2016    	 	
Increase (decrease) in net assets resulting from operations:	  	 	 	 	 	 	 	 	
Net investment income (loss)	  	$	19,107	 	 	$	11,960	 	
Net realized gain (loss) on investments	  	 	(7,694	) 	 	 	(3,577	) 	
Net change in unrealized appreciation (depreciation) on investments	  	 	4,760	 	 	 	(11,091	) 	
 	  	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	 	16,173	 	 	 	(2,708	) 	
 	  	 	 	 	 	 	 	 	
Capital transactions:	  	 	 	 	 	 	 	 	
Common stock issued	  	 	—  	 	 	 	33,000	 	
Reinvestment of dividends	  	 	108	 	 	 	74	 	
Dividends declared (Note 12)	  	 	(17,100	) 	 	 	(13,337	) 	
 	  	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from capital share transactions	  	 	(16,992	) 	 	 	19,737	 	
 	  	 	 	 	 	 	 	 	
Net increase (decrease) in net assets	  	 	(819	) 	 	 	17,029	 	
 	  	 	 	 	 	 	 	 	
Net assets at beginning of period	  	 	764,137	 	 	 	571,726	 	
 	  	 	 	 	 	 	 	 	
Net assets at end of period	  	$	763,318	 	 	$	588,755	 	
 	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)
(unaudited)

 	  	For the three month periods ended	 	
 	  	    March 31, 2017    	 	 	    March 31, 2016    	 	
Cash flows from operating activities:	  	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	$	16,173	 	 	$	(2,708	) 	
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:	  	 	 	 	 	 	 	 	
Amortization of deferred financing costs	  	 	231	 	 	 	264	 	
Net accretion of discount on investments	  	 	(3,576	) 	 	 	(611	) 	
Net realized (gain) loss on investments	  	 	7,694	 	 	 	3,577	 	
Net change in unrealized (appreciation) depreciation on investments	  	 	(4,760	) 	 	 	11,091	 	
Cost of investments purchased and change in payable for investments purchased	  	 	(152,235	) 	 	 	(114,034	) 	
Proceeds from sales and repayments of investments and change in receivable for investments sold	  	 	190,967	 	 	 	28,146	 	
Changes in operating assets:	  	 	 	 	 	 	 	 	
Interest receivable	  	 	(578	) 	 	 	81	 	
Dividend receivable	  	 	65	 	 	 	—  	 	
Prepaid expenses and other assets	  	 	(117	) 	 	 	370	 	
Changes in operating liabilities:	  	 	 	 	 	 	 	 	
Due to Investment Adviser	  	 	(129	) 	 	 	(121	) 	
Interest and credit facility fees payable	  	 	104	 	 	 	438	 	
Base management and incentive fees payable	  	 	3,607	 	 	 	3,163	 	
Administrative service fees payable	  	 	(22	) 	 	 	50	 	
Other accrued expenses and liabilities	  	 	241	 	 	 	238	 	
 	  	 	 	 	 	 	 	 	
Net cash provided by (used in) operating activities	  	 	57,665	 	 	 	(70,056	) 	
 	  	 	 	 	 	 	 	 	
Cash flows from financing activities:	  	 	 	 	 	 	 	 	
Proceeds from issuance of common stock	  	 	—  	 	 	 	33,000	 	
Borrowings on SPV Credit Facility and Credit Facility	  	 	93,000	 	 	 	111,000	 	
Repayments of SPV Credit Facility and Credit Facility	  	 	(124,277	) 	 	 	(66,000	) 	
Debt issuance costs paid	  	 	(93	) 	 	 	—  	 	
Dividends paid in cash	  	 	(19,910	) 	 	 	(18,210	) 	
 	  	 	 	 	 	 	 	 	
Net cash provided by (used in) financing activities	  	 	(51,280	) 	 	 	59,790	 	
 	  	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	6,385	 	 	 	(10,266	) 	
Cash and cash equivalents, beginning of period	  	 	38,489	 	 	 	41,837	 	
 	  	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	  	$	44,874	 	 	$	31,571	 	
 	  	 	 	 	 	 	 	 	
Supplemental disclosures:	  	 	 	 	 	 	 	 	
Interest paid during the period	  	$	4,952	 	 	$	3,227	 	
Dividends declared during the period	  	$	17,100	 	 	$	13,337	 	
Reinvestment of dividends	  	$	108	 	 	$	74	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-5

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of March 31, 2017
(dollar amounts in thousands)
(unaudited)

Investments—
non-controlled/non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
First Lien Debt (77.95%)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Access CIG, LLC (2) (3) (4) (13)	 	Business Services	 	L + 5.00% (1.00% Floor)	 	 	10/17/2021	 	 	$	18,289	 	 	$	18,180	 	 	$	18,313	 	 	 	2.40	% 	
Advanced Instruments,
LLC  (2) (3) (4) (13) (15)	 	Healthcare & Pharmaceuticals	 	L + 5.25% (1.00% Floor)	 	 	10/31/2022	 	 	 	10,500	 	 	 	10,287	 	 	 	10,476	 	 	 	1.37	 	
Alpha Packaging Holdings,
Inc.  (2) (3) (4) (13)	 	Containers, Packaging & Glass	 	L + 4.25% (1.00% Floor)	 	 	5/12/2020	 	 	 	11,293	 	 	 	11,285	 	 	 	11,293	 	 	 	1.48	 	
Anaren, Inc. (2) (3) (4) (13)	 	Telecommunications	 	L + 4.50% (1.00% Floor)	 	 	2/18/2021	 	 	 	3,849	 	 	 	3,826	 	 	 	3,849	 	 	 	0.50	 	
Audax AAMP Holdings,
Inc.  (2) (3) (4) (13)	 	Durable Consumer Goods	 	L + 6.50% (1.00% Floor)	 	 	6/24/2017	 	 	 	10,274	 	 	 	10,260	 	 	 	9,789	 	 	 	1.28	 	
BAART Programs,
Inc.  (2) (4) (13) (16)	 	Healthcare & Pharmaceuticals	 	L + 7.75% (0.00% Floor)	 	 	10/9/2021	 	 	 	7,388	 	 	 	7,339	 	 	 	7,535	 	 	 	0.99	 	
Brooks Equipment Company,
LLC  (2) (3) (4) (13)	 	Construction & Building	 	L + 5.00% (1.00% Floor)	 	 	8/29/2020	 	 	 	6,694	 	 	 	6,659	 	 	 	6,682	 	 	 	0.89	 	
Capstone Logistics Acquisition,
Inc.  (2) (3) (4) (13)	 	Transportation: Cargo	 	L + 4.50% (1.00% Floor)	 	 	10/7/2021	 	 	 	19,478	 	 	 	19,343	 	 	 	19,445	 	 	 	2.55	 	
Captive Resources Midco,
LLC  (2) (3) (4) (13) (15) (16)	 	Banking, Finance, Insurance & Real Estate	 	L + 5.75% (1.00% Floor)	 	 	6/30/2020	 	 	 	28,975	 	 	 	28,630	 	 	 	28,975	 	 	 	3.80	 	
Central Security Group,
Inc.  (2) (3) (4) (13) (16)	 	Consumer Services	 	L + 5.63% (1.00% Floor)	 	 	10/6/2020	 	 	 	28,584	 	 	 	28,247	 	 	 	28,499	 	 	 	3.73	 	
CIP Revolution Holdings,
LLC  (2) (3) (5) (15)	 	Media: Advertising, Printing & Publishing	 	L + 6.00% (1.00% Floor)	 	 	8/19/2021	 	 	 	16,500	 	 	 	16,332	 	 	 	16,783	 	 	 	2.20	 	
Colony Hardware
Corporation  (2) (3) (4) (13)	 	Construction & Building	 	L + 6.00% (1.00% Floor)	 	 	10/23/2021	 	 	 	16,995	 	 	 	16,773	 	 	 	16,995	 	 	 	2.23	 	
Datapipe, Inc. (2) (3) (13) (16)	 	Telecommunications	 	L + 4.75% (1.00% Floor)	 	 	3/15/2019	 	 	 	9,725	 	 	 	9,650	 	 	 	9,753	 	 	 	1.28	 	
Dent Wizard International
Corporation  (2) (3) (4) (13) (16)	 	Automotive	 	L + 4.75% (1.00% Floor)	 	 	4/7/2020	 	 	 	7,216	 	 	 	7,192	 	 	 	7,208	 	 	 	0.94	 	
Derm Growth Partners III,
LLC (Dermatology
Associates)  (2) (3) (4) (5) (13) (15)	 	Healthcare & Pharmaceuticals	 	L + 6.50% (1.00% Floor)	 	 	5/31/2022	 	 	 	41,005	 	 	 	40,468	 	 	 	40,842	 	 	 	5.35	 	
DermaRite Industries,
LLC  (2) (3) (5) (15)	 	Healthcare & Pharmaceuticals	 	L + 7.00% (1.00% Floor)	 	 	3/3/2022	 	 	 	16,724	 	 	 	16,381	 	 	 	16,507	 	 	 	2.16	 	
Dimensional Dental
Management,
LLC  (2) (3) (5) (12) (15)	 	Healthcare & Pharmaceuticals	 	L + 7.00% (1.00% Floor)	 	 	2/12/2021	 	 	 	19,066	 	 	 	18,684	 	 	 	19,129	 	 	 	2.51	 	
Dimora Brands, Inc. (fka TK
USA Enterprises,
Inc.)  (2) (3) (5) (15)	 	Construction & Building	 	L + 4.50% (1.00% Floor)	 	 	4/4/2022	 	 	 	—  	 	 	 	(57	) 	 	 	(14	) 	 	 	0.00	 	
Direct Travel,
Inc.  (2) (3) (4) (5) (13) (15)	 	Hotel, Gaming & Leisure	 	L + 6.50% (1.00% Floor)	 	 	12/1/2021	 	 	 	12,782	 	 	 	12,382	 	 	 	12,708	 	 	 	1.66	 	
EIP Merger Sub, LLC (Evolve
IP)  (2) (3) (5) (12) (13) (16)	 	Telecommunications	 	L + 6.25% (1.00% Floor)	 	 	6/7/2021	 	 	 	23,750	 	 	 	23,119	 	 	 	23,356	 	 	 	3.06	 	
EP Minerals, LLC (2) (3) (4) (13)	 	Metals & Mining	 	L + 4.50% (1.00% Floor)	 	 	8/20/2020	 	 	 	10,238	 	 	 	10,207	 	 	 	10,237	 	 	 	1.34	 	
FCX Holdings
Corp.  (2) (3) (4) (13) (16)	 	Capital Equipment	 	L + 4.50% (1.00% Floor)	 	 	8/4/2020	 	 	 	9,849	 	 	 	9,845	 	 	 	9,849	 	 	 	1.29	 	
Genex Holdings, Inc. (2) (3) (13) (16)	 	Banking, Finance, Insurance & Real Estate	 	L + 4.25% (1.00% Floor)	 	 	5/30/2021	 	 	 	4,189	 	 	 	4,177	 	 	 	4,181	 	 	 	0.55	 	
Global Software,
LLC  (2) (3) (4) (5) (13)	 	High Tech Industries	 	L + 5.50% (1.00% Floor)	 	 	5/2/2022	 	 	 	20,963	 	 	 	20,595	 	 	 	20,734	 	 	 	2.72	 	
Green Energy Partners/Stonewall
LLC  (2) (3) (5) (13)	 	Energy: Electricity	 	L + 5.50% (1.00% Floor)	 	 	11/13/2021	 	 	 	16,600	 	 	 	16,479	 	 	 	16,612	 	 	 	2.18	 	
Green Plains II
LLC  (2) (3) (4) (5) (13) (15) (16)	 	Beverage, Food & Tobacco	 	L + 7.00% (1.00% Floor)	 	 	10/3/2022	 	 	 	15,229	 	 	 	15,089	 	 	 	15,465	 	 	 	2.03	 	
Hummel Station
LLC  (2) (3) (5) (13) (16)	 	Energy: Electricity	 	L + 6.00% (1.00% Floor)	 	 	10/27/2022	 	 	 	21,000	 	 	 	20,331	 	 	 	20,292	 	 	 	2.66	 	
Imagine! Print Solutions,
LLC  (2) (3) (4) (13)	 	Media: Advertising, Printing & Publishing	 	L + 6.00% (1.00% Floor)	 	 	3/30/2022	 	 	 	18,414	 	 	 	18,177	 	 	 	18,414	 	 	 	2.41	 	
Imperial Bag & Paper Co.
LLC  (2) (3) (4) (13) (16)	 	Forest Products & Paper	 	L + 6.00% (1.00% Floor)	 	 	1/7/2022	 	 	 	24,013	 	 	 	23,705	 	 	 	23,983	 	 	 	3.14	 	
 
F-6

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of March 31, 2017
(dollar amounts in thousands)
(unaudited)

Investments—
non-controlled/non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
First Lien Debt (77.95%) (continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Indra Holdings Corp. (Totes
Isotoner)  (2) (3) (5) (13)	 	Non-durable Consumer Goods	 	L + 4.25% (1.00% Floor)	 	 	5/1/2021	 	 	$	14,224	 	 	$	14,135	 	 	$	9,264	 	 	 	1.21	% 	
International Medical Group,
Inc.  (2) (3) (5) (12) (16)	 	Banking, Finance, Insurance & Real Estate	 	L + 6.50% (1.00% Floor)	 	 	10/30/2020	 	 	 	30,000	 	 	 	29,526	 	 	 	30,371	 	 	 	3.98	 	
Jackson Hewitt Inc. (2) (3) (4) (13)	 	Retail	 	L + 7.00% (1.00% Floor)	 	 	7/30/2020	 	 	 	8,758	 	 	 	8,632	 	 	 	8,276	 	 	 	1.08	 	
Legacy.com Inc. (2) (3) (5) (12)	 	High Tech Industries	 	L + 6.00% (1.00% Floor)	 	 	3/20/2023	 	 	 	17,000	 	 	 	16,619	 	 	 	16,708	 	 	 	2.19	 	
Metrogistics LLC (2) (3) (4) (13)	 	Transportation: Cargo	 	L + 6.50% (1.00% Floor)	 	 	9/30/2022	 	 	 	15,105	 	 	 	14,900	 	 	 	15,105	 	 	 	1.98	 	
National Technical Systems,
Inc.  (2) (3) (4) (13) (15)	 	Aerospace & Defense	 	L + 6.25% (1.00% Floor)	 	 	6/12/2021	 	 	 	25,123	 	 	 	24,867	 	 	 	24,234	 	 	 	3.17	 	
NES Global Talent Finance
US LLC (United
Kingdom)  (2) (3) (4) (8) (13)	 	Energy: Oil & Gas	 	L + 5.50% (1.00% Floor)	 	 	10/3/2019	 	 	 	11,094	 	 	 	10,985	 	 	 	10,751	 	 	 	1.41	 	
OnCourse Learning
Corporation  (2) (3) (4) (5) (13) (15)	 	Consumer Services	 	L + 6.50% (1.00% Floor)	 	 	9/12/2021	 	 	 	26,077	 	 	 	25,724	 	 	 	26,288	 	 	 	3.44	 	
Paradigm Acquisition
Corp.  (2) (3) (4) (13)	 	Business Services	 	L + 5.00% (1.00% Floor)	 	 	6/2/2022	 	 	 	11,217	 	 	 	11,086	 	 	 	11,217	 	 	 	1.47	 	
Pelican Products, Inc. (2) (3) (4) (13)	 	Containers, Packaging & Glass	 	L + 4.25% (1.00% Floor)	 	 	4/11/2020	 	 	 	7,623	 	 	 	7,634	 	 	 	7,604	 	 	 	1.00	 	
Plano Molding Company,
LLC  (2) (3) (4) (5) (13)	 	Hotel, Gaming & Leisure	 	L + 7.50% (1.00% Floor)	 	 	5/12/2021	 	 	 	18,117	 	 	 	17,990	 	 	 	17,262	 	 	 	2.26	 	
PPT Management Holdings,
LLC  (2) (3) (5) (13)	 	Healthcare & Pharmaceuticals	 	L + 6.00% (1.00% Floor)	 	 	12/16/2022	 	 	 	22,444	 	 	 	22,240	 	 	 	22,457	 	 	 	2.94	 	
Premier Senior Marketing,
LLC  (2) (3) (5) (16)	 	Banking, Finance, Insurance & Real Estate	 	L + 5.00% (1.00% Floor)	 	 	7/1/2022	 	 	 	3,731	 	 	 	3,683	 	 	 	3,731	 	 	 	0.49	 	
Product Quest Manufacturing,
LLC  (2) (3) (4) (5) (12) (16)	 	Containers, Packaging & Glass	 	L + 5.75% (1.00% Floor)	 	 	9/9/2020	 	 	 	28,000	 	 	 	27,588	 	 	 	25,864	 	 	 	3.39	 	
Prowler Acquisition Corp.
(Pipeline Supply and Service,
LLC)  (2) (3) (4)	 	Wholesale	 	L + 4.50% (1.00% Floor)	 	 	1/28/2020	 	 	 	10,769	 	 	 	10,714	 	 	 	8,773	 	 	 	1.15	 	
PSC Industrial Holdings
Corp  (2) (3) (4) (13)	 	Environmental Industries	 	L + 4.75% (1.00% Floor)	 	 	12/5/2020	 	 	 	11,730	 	 	 	11,653	 	 	 	11,482	 	 	 	1.50	 	
PT Intermediate Holdings III,
LLC (Parts
Town)  (2) (3) (4) (5) (13) (15) (16)	 	Wholesale	 	L + 6.50% (1.00% Floor)	 	 	6/23/2022	 	 	 	19,545	 	 	 	19,336	 	 	 	19,447	 	 	 	2.55	 	
QW Holding Corporation
(Quala)  (2) (3) (4) (5) (13)	 	Environmental Industries	 	L + 6.75% (1.00% Floor)	 	 	8/31/2022	 	 	 	29,925	 	 	 	29,122	 	 	 	30,131	 	 	 	3.95	 	
Reliant Pro Rehab,
LLC  (2) (3) (5) (12)	 	Healthcare & Pharmaceuticals	 	L + 10.00% (1.00% Floor)	 	 	12/29/2017	 	 	 	22,275	 	 	 	22,101	 	 	 	22,264	 	 	 	2.92	 	
SolAreo Technologies
Corp.  (2) (3) (4) (5)	 	Telecommunications	 	L + 5.25% (1.00% Floor)	 	 	12/10/2020	 	 	 	19,418	 	 	 	19,292	 	 	 	18,049	 	 	 	2.36	 	
Superior Health Linens,
LLC  (2) (3) (4) (5) (13) (15)	 	Business Services	 	L + 6.50% (1.00% Floor)	 	 	9/30/2021	 	 	 	19,208	 	 	 	18,908	 	 	 	19,012	 	 	 	2.49	 	
T2 Systems Canada, Inc. (2) (3) (5)	 	Transportation: Consumer	 	L + 6.75% (1.00% Floor)	 	 	9/28/2022	 	 	 	4,040	 	 	 	3,946	 	 	 	4,045	 	 	 	0.53	 	
T2 Systems, Inc. (2) (3) (4) (5) (13) (15)	 	Transportation: Consumer	 	L + 6.75% (1.00% Floor)	 	 	9/28/2022	 	 	 	22,892	 	 	 	22,298	 	 	 	22,924	 	 	 	3.00	 	
The Hilb Group,
LLC  (2) (3) (5) (12) (15)	 	Banking, Finance, Insurance & Real Estate	 	L + 6.00% (1.00% Floor)	 	 	6/24/2021	 	 	 	31,313	 	 	 	30,744	 	 	 	30,849	 	 	 	4.04	 	
The SI Organization,
Inc.  (2) (3) (4) (13)	 	Aerospace & Defense	 	L + 4.75% (1.00% Floor)	 	 	11/23/2019	 	 	 	8,552	 	 	 	8,507	 	 	 	8,637	 	 	 	1.13	 	
The Topps Company,
Inc.  (2) (3) (4) (13)	 	Non-durable Consumer Goods	 	L + 6.00% (1.00% Floor)	 	 	10/2/2020	 	 	 	18,657	 	 	 	18,588	 	 	 	18,654	 	 	 	2.44	 	
Truckpro, LLC .(2) (3) (4) (13) (16)	 	Automotive	 	L + 5.00% (1.00% Floor)	 	 	8/6/2018	 	 	 	9,194	 	 	 	9,173	 	 	 	9,170	 	 	 	1.20	 	
Tweddle Group, Inc. (2) (3) (4) (13)	 	Media: Advertising, Printing & Publishing	 	L + 6.00% (1.00% Floor)	 	 	10/24/2022	 	 	 	15,998	 	 	 	15,697	 	 	 	16,063	 	 	 	2.10	 	
 
F-7

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of March 31, 2017
(dollar amounts in thousands)
(unaudited)

Investments—
non-controlled/non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
First Lien Debt (77.95%) (continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
TwentyEighty, Inc.—Revolver
(fka Miller Heiman,
Inc.)  (2) (3) (5) (10) (15)	 	Business Services	 	L + 8.00% (1.00% Floor)	 	 	3/21/2020	 	 	$	—  	 	 	$	(7	) 	 	$	(3	) 	 	 	0.00	% 	
TwentyEighty, Inc.—(Term A
Loans)  (2) (3) (5) (10)	 	Business Services	 	L + 3.50% (1.00% Floor), 4.50% PIK	 	 	3/31/2020	 	 	 	2,860	 	 	 	2,844	 	 	 	2,843	 	 	 	0.37	 	
TwentyEighty, Inc.—(Term B
Loans)  (5) (10)	 	Business Services	 	1.00%, 7.00% PIK	 	 	3/31/2020	 	 	 	4,698	 	 	 	4,698	 	 	 	3,773	 	 	 	0.50	 	
TwentyEighty, Inc.—(Term C
Loans)  (5) (10)	 	Business Services	 	0.25%, 8.75% PIK	 	 	3/31/2020	 	 	 	4,485	 	 	 	4,485	 	 	 	2,245	 	 	 	0.29	 	
U.S. TelePacific Holdings
Corp.  (2) (3) (5)	 	Telecommunications	 	L + 8.50% (1.00% Floor)	 	 	2/24/2021	 	 	 	30,000	 	 	 	29,189	 	 	 	30,027	 	 	 	3.93	 	
Vetcor Professional Practices,
LLC  (2) (3) (4) (5) (13) (15)	 	Consumer Services	 	L + 6.00% (1.00% Floor)	 	 	4/20/2021	 	 	 	28,488	 	 	 	28,028	 	 	 	28,737	 	 	 	3.76	 	
Violin Finco S.A.R.L. (Alexander
Mann Solutions) (United
Kingdom)  (2) (3) (4) (8) (13)	 	Business Services	 	L + 4.75% (1.00% Floor)	 	 	12/20/2019	 	 	 	10,034	 	 	 	9,985	 	 	 	10,034	 	 	 	1.31	 	
Vistage Worldwide
Inc.  (2) (3) (4) (13) (16)	 	Business Services	 	L + 5.50% (1.00% Floor)	 	 	8/19/2021	 	 	 	28,757	 	 	 	28,534	 	 	 	28,964	 	 	 	3.79	 	
VRC Companies,
LLC  (2) (3) (5) (13) (15) (17)	 	Business Services	 	L + 6.50% (1.00% Floor)	 	 	3/31/2023	 	 	 	25,632	 	 	 	24,923	 	 	 	25,140	 	 	 	3.29	 	
Winchester Electronics
Corporation  (2) (3) (4) (5) (13) (15)	 	Capital Equipment	 	L + 6.50% (1.00% Floor)	 	 	6/30/2022	 	 	 	27,298	 	 	 	26,914	 	 	 	27,749	 	 	 	3.64	 	
Zest Holdings, LLC (2) (3) (4) (13)	 	Durable Consumer Goods	 	L + 4.75% (1.00% Floor)	 	 	8/16/2020	 	 	 	9,530	 	 	 	9,530	 	 	 	9,523	 	 	 	1.25	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,088,396	 	 	$	1,085,554	 	 	 	142.20	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt (11.61%)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
AIM Group USA Inc. (2) (3) (5) (13)	 	Aerospace & Defense	 	L + 9.00% (1.00% Floor)	 	 	8/2/2022	 	 	$	23,000	 	 	$	22,710	 	 	$	23,025	 	 	 	3.02	% 	
AmeriLife Group,
LLC  (2) (3) (5) (13) (16)	 	Banking, Finance, Insurance & Real Estate	 	L + 8.75% (1.00% Floor)	 	 	1/10/2023	 	 	 	20,000	 	 	 	19,665	 	 	 	19,318	 	 	 	2.53	 	
Argon Medical Devices,
Inc.  (2) (3) (4) (5)	 	Healthcare & Pharmaceuticals	 	L + 9.50% (1.00% Floor)	 	 	6/23/2022	 	 	 	24,000	 	 	 	23,381	 	 	 	24,437	 	 	 	3.20	 	
Berlin Packaging L.L.C. (2) (3) (5) (13)	 	Containers, Packaging & Glass	 	L + 6.75% (1.00% Floor)	 	 	10/1/2022	 	 	 	2,927	 	 	 	2,910	 	 	 	2,949	 	 	 	0.39	 	
Charter NEX US Holdings,
Inc.  (2) (3) (5) (13)	 	Chemicals, Plastics & Rubber	 	L + 8.25% (1.00% Floor)	 	 	2/5/2023	 	 	 	7,394	 	 	 	7,305	 	 	 	7,394	 	 	 	0.97	 	
Confie Seguros Holding II
Co.  (2) (3) (5) (13)	 	Banking, Finance, Insurance & Real Estate	 	L + 9.00% (1.25% Floor)	 	 	5/8/2019	 	 	 	9,000	 	 	 	8,945	 	 	 	8,947	 	 	 	1.17	 	
Drew Marine Group
Inc.  (2) (3) (4) (5) (13)	 	Chemicals, Plastics & Rubber	 	L + 7.00% (1.00% Floor)	 	 	5/19/2021	 	 	 	12,500	 	 	 	12,482	 	 	 	12,373	 	 	 	1.62	 	
Genex Holdings, Inc. (2) (3) (5) (16)	 	Banking, Finance, Insurance & Real Estate	 	L + 7.75% (1.00% Floor)	 	 	5/30/2022	 	 	 	7,990	 	 	 	7,917	 	 	 	7,990	 	 	 	1.05	 	
Institutional Shareholder Services
Inc.  (2) (3) (5) (13)	 	Banking, Finance, Insurance & Real Estate	 	L + 8.50% (1.00% Floor)	 	 	4/29/2022	 	 	 	12,500	 	 	 	12,409	 	 	 	12,448	 	 	 	1.63	 	
Jazz Acquisition, Inc.
(Wencor)  (2) (3) (5) (13)	 	Aerospace & Defense	 	L + 6.75% (1.00% Floor)	 	 	6/19/2022	 	 	 	6,700	 	 	 	6,677	 	 	 	5,901	 	 	 	0.77	 	
MRI Software, LLC (2) (3) (5)	 	Software	 	L + 8.00% (1.00% Floor)	 	 	6/23/2022	 	 	 	11,250	 	 	 	11,115	 	 	 	11,305	 	 	 	1.48	 	
Power Stop, LLC (5) (9)	 	Automotive	 	11.00%	 	 	5/29/2022	 	 	 	10,000	 	 	 	9,836	 	 	 	9,957	 	 	 	1.30	 	
Prowler Acquisition Corp.
(Pipeline Supply and Service,
LLC)  (2) (3) (5)	 	Wholesale	 	L + 8.50% (1.00% Floor)	 	 	7/28/2020	 	 	 	3,000	 	 	 	2,962	 	 	 	1,856	 	 	 	0.24	 	
Ramundsen Public Sector,
LLC  (2) (3) (5)	 	Sovereign & Public Finance	 	L + 8.50% (1.00% Floor)	 	 	1/31/2025	 	 	 	1,800	 	 	 	1,783	 	 	 	1,800	 	 	 	0.24	 	
 
F-8

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of March 31, 2017
(dollar amounts in thousands)
(unaudited)

Investments—
non-controlled/non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
Second Lien Debt (11.61%)
(continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Watchfire Enterprises,
Inc.  (2) (3) (5) (13)	 	Media: Advertising, Printing & Publishing	 	L + 8.00% (1.00% Floor)	 	 	10/2/2021	 	 	 	7,000	 	 	$	6,934	 	 	$	6,994	 	 	 	0.92	% 	
Zywave, Inc. (2) (3) (5)	 	High Tech Industries	 	L + 9.00% (1.00% Floor)	 	 	11/17/2023	 	 	 	4,950	 	 	 	4,881	 	 	 	4,949	 	 	 	0.65	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	$	161,912	 	 	$	161,643	 	 	 	21.18	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated (1)	 	Industry	 	Maturity
Date	 	 	Par
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage of
Net Assets	 	
Structured Finance Obligations (0.20%) (5) (8) (11)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1776 CLO I, Ltd., Subordinated Notes	 	Structured Finance	 	 	5/8/2020	 	 	$	11,750	 	 	$	6,519	 	 	$	2,761	 	 	 	0.36	% 	
Clydesdale CLO 2005, Ltd., Subordinated Notes	 	Structured Finance	 	 	12/6/2017	 	 	 	5,750	 	 	 	—  	 	 	 	10	 	 	 	0.00	 	
MSIM Peconic Bay, Ltd., Subordinated Notes	 	Structured Finance	 	 	7/20/2019	 	 	 	4,500	 	 	 	63	 	 	 	5	 	 	 	0.00	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Structured Finance Obligations Total	 	 	 	 	 	 	 	 	 	 	 	$	6,582	 	 	$	2,776	 	 	 	0.36	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated (1)	  	Industry	  	Shares/
Units	 	  	Cost	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Equity Investments (0.61%) (5)	  	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
CIP Revolution Investments, LLC	  	Media: Advertising, Printing & Publishing	  	 	30,000	 	  	$	300	 	  	$	411	 	  	 	0.05	% 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	Healthcare & Pharmaceuticals	  	 	1,000,000	 	  	 	1,000	 	  	 	1,230	 	  	 	0.16	 	
GS Holdco LLC (Global Software, LLC)	  	High Tech Industries	  	 	1,000,000	 	  	 	1,001	 	  	 	1,207	 	  	 	0.16	 	
Legacy.com Inc.	  	High Tech Industries	  	 	1,500,000	 	  	 	1,500	 	  	 	1,500	 	  	 	0.20	 	
Power Stop Intermediate Holdings, LLC	  	Automotive	  	 	7,150	 	  	 	715	 	  	 	1,314	 	  	 	0.17	 	
T2 Systems Parent Corporation	  	Transportation: Consumer	  	 	555,556	 	  	 	556	 	  	 	533	 	  	 	0.07	 	
THG Acquisition, LLC (The Hilb Group, LLC)	  	Banking, Finance, Insurance & Real Estate	  	 	1,500,000	 	  	 	1,500	 	  	 	2,256	 	  	 	0.30	 	
TwentyEighty Investors LLC	  	Business Services	  	 	51,936	 	  	 	—  	 	  	 	—  	 	  	 	0.00	 	
 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Equity Investments Total	  	 	  	 	 	 	  	$	6,572	 	  	$	8,451	 	  	 	1.11	% 	
 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total investments—non-controlled/non-affiliated	  	 	  	 	 	 	  	$	1,263,462	 	  	$	1,258,424	 	  	 	164.86	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments—controlled/affiliated	 	Industry	 	Interest
Rate  (2)	 	Maturity
Date	 	 	Par
Amount/
LLC
Interest	 	 	Cost	 	 	Fair
Value  (7)	 	 	Percentage of
Net Assets	 	
Investment Fund (9.63%) (8)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Middle Market Credit Fund, LLC, Mezzanine Loan  (2) (5) (9) (14)	 	Investment Fund	 	L+9.50%	 	 	6/24/2017	 	 	$	86,044	 	 	$	86,044	 	 	$	86,044	 	 	 	11.27	% 	
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest  (5) (14)	 	Investment Fund	 	0.001	 	 	3/1/2021	 	 	 	45,501	 	 	 	45,501	 	 	 	48,077	 	 	 	6.30	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investment Fund Total	 	 	 	 	 	 	 	 	 	 	 	 	 	$	131,545	 	 	$	134,121	 	 	 	17.57	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments—controlled/affiliated	 	 	 	 	 	 	 	 	 	 	 	 	 	$	131,545	 	 	$	134,121	 	 	 	17.57	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,395,007	 	 	$	1,392,545	 	 	 	182.42	% 	

(1)	Unless otherwise indicated, issuers of debt and equity investments held by TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) are domiciled in the United States and issuers of structured finance obligations are domiciled in the Cayman Islands. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of March 31, 2017, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of March 31, 2017, the Company is not an “affiliated person” of any of these portfolio companies.	
 
F-9

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of March 31, 2017
(dollar amounts in thousands)
(unaudited)
 
(2)	Variable rate loans to the portfolio companies and variable rate notes of structured finance obligations bear interest at a rate that may be determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan and note, the Company has provided the interest rate in effect as of March 31, 2017. As of March 31, 2017, all of our LIBOR loans were indexed to the 90-day LIBOR rate at 1.15%, except for those loans as indicated in Notes 16 and 17 below.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by the Company’s wholly owned subsidiary, TCG BDC SPV LLC (the “SPV”). The SPV has entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or the 2015-1 Issuer.	
(5)	Denotes that all or a portion of the assets are owned by the Company. The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility” and, together with the SPV Credit Facility, the “Facilities”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the SPV or Carlyle GMS Finance MM CLO 2015-1 LLC (the “2015-1 Issuer”).	
(6)	Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. Equity tranche collateralized loan obligation (“CLO”) fund investments, which are referred to as “structured finance obligations”, are recorded at amortized cost using the effective interest method.	
(7)	Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy.	
(8)	The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.	
(9)	Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.	
(10)	Loan was on non-accrual status as of March 31, 2017.	
(11)	As of March 31, 2017, the Company has a greater than 25% but less than 50% equity or subordinated notes ownership interest in certain structured finance obligations. These investments have governing documents that preclude the Company from controlling management of the entity and therefore the Company has determined that the issuer of the investment is not a controlled affiliate or a non-controlled affiliate because the investments are not “voting securities”.	
(12)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Dimensional Dental Management, LLC (4.70%), EIP Merger Sub, LLC (Evolve IP) (3.91%), International Medical Group, Inc. (4.79%), Legacy.com Inc. (3.79%), Product Quest Manufacturing, LLC (3.66%), Reliant Pro Rehab, LLC (nil) and The Hilb Group, LLC (3.33%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
(13)	Denotes that all or a portion of the assets are owned by the 2015-1 Issuer and secure the notes issued in connection with a $400 million term debt securitization completed by the Company on June 26, 2015 (see Note 7, 2015-1 Notes). Accordingly, such assets are not available to the creditors of the SPV or the Company.	
(14)	Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, for more details.	
 
F-10

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of March 31, 2017
(dollar amounts in thousands)
(unaudited)
 
(15)	As of March 31, 2017, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

Investments—non-controlled/non-affiliated	  	Type	  	Unused
Fee	 	 	Par/
Principal
Amount	 	  	Fair
Value	 	
First Lien Debt—unfunded delayed draw and revolving term loans commitments	  	 	  	 	 	 	 	 	 	 	  	 	 	 	
Advanced Instruments, LLC	  	Revolver	  	 	0.50	% 	 	$	1,167	 	  	$	(2	) 	
Captive Resources Midco, LLC	  	Delayed Draw	  	 	1.25	% 	 	 	3,125	 	  	 	—  	 	
Captive Resources Midco, LLC	  	Revolver	  	 	0.50	% 	 	 	1,875	 	  	 	—  	 	
CIP Revolution Holdings, LLC	  	Delayed Draw	  	 	0.75	% 	 	 	1,331	 	  	 	20	 	
CIP Revolution Holdings, LLC	  	Revolver	  	 	0.50	% 	 	 	1,331	 	  	 	20	 	
DermaRite Industries, LLC	  	Revolver	  	 	0.50	% 	 	 	3,276	 	  	 	(35	) 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	Delayed Draw	  	 	1.00	% 	 	 	2,217	 	  	 	(8	) 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	Revolver	  	 	0.50	% 	 	 	704	 	  	 	(3	) 	
Dimensional Dental Management, LLC	  	Delayed Draw	  	 	1.00	% 	 	 	1,442	 	  	 	4	 	
Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)	  	Revolver	  	 	0.50	% 	 	 	4,750	 	  	 	(14	) 	
Direct Travel, Inc.	  	Delayed Draw	  	 	1.00	% 	 	 	9,658	 	  	 	(32	) 	
Green Plains II LLC	  	Revolver	  	 	0.50	% 	 	 	1,291	 	  	 	18	 	
National Technical Systems, Inc.	  	Delayed Draw	  	 	1.00	% 	 	 	4,469	 	  	 	(123	) 	
National Technical Systems, Inc.	  	Revolver	  	 	0.50	% 	 	 	2,031	 	  	 	(73	) 	
OnCourse Learning Corporation	  	Revolver	  	 	0.50	% 	 	 	859	 	  	 	7	 	
PT Intermediate Holdings III, LLC (Parts Town)	  	Revolver	  	 	0.50	% 	 	 	1,429	 	  	 	(7	) 	
Superior Health Linens, LLC	  	Revolver	  	 	0.50	% 	 	 	2,614	 	  	 	(24	) 	
T2 Systems, Inc.	  	Revolver	  	 	0.50	% 	 	 	2,933	 	  	 	4	 	
The Hilb Group, LLC	  	Delayed Draw	  	 	1.00	% 	 	 	10,902	 	  	 	(120	) 	
TwentyEighty, Inc. (f/k/a Miller Heiman, Inc.)	  	Revolver	  	 	0.50	% 	 	 	452	 	  	 	(3	) 	
Vetcor Professional Practices, LLC	  	Delayed Draw	  	 	1.00	% 	 	 	4,384	 	  	 	33	 	
VRC Companies, LLC	  	Delayed Draw	  	 	1.00	% 	 	 	4,513	 	  	 	(69	) 	
VRC Companies, LLC	  	Revolver	  	 	0.50	% 	 	 	1,805	 	  	 	(28	) 	
Winchester Electronics Corporation	  	Delayed Draw	  	 	1.00	% 	 	 	2,500	 	  	 	38	 	
 	  	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	  	 	 	 	 	$	71,058	 	  	$	(397	) 	

(16)	As of March 31, 2017, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.98%.	
(17)	As of March 31, 2017, this LIBOR loan was indexed to the 180-day LIBOR rate at 1.42%.	
As of March 31, 2017, investments at fair value consisted of the following:

Type—% of Fair Value	  	Amortized Cost	 	  	Fair Value	 	  	% of Fair Value	 	
First Lien Debt	  	$	1,088,396	 	  	$	1,085,554	 	  	 	77.95	% 	
Second Lien Debt	  	 	161,912	 	  	 	161,643	 	  	 	11.61	 	
Structured Finance Obligations	  	 	6,582	 	  	 	2,776	 	  	 	0.20	 	
Equity Investments	  	 	6,572	 	  	 	8,451	 	  	 	0.61	 	
Investment Fund	  	 	131,545	 	  	 	134,121	 	  	 	9.63	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,395,007	 	  	$	1,392,545	 	  	 	100.00	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	
Type—% of Fair Value of First and Second Lien Debt	 	Amortized Cost	 	 	Fair Value	 	 	% of Fair Value	 	
Floating Rate	 	$	1,231,289	 	 	$	1,231,222	 	 	 	98.72	% 	
Fixed Rate	 	 	19,019	 	 	 	15,975	 	 	 	1.28	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	1,250,308	 	 	$	1,247,197	 	 	 	100.00	% 	

F-11

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of March 31, 2017
(dollar amounts in thousands)
(unaudited)
 
The industry composition of investments at fair value as of March 31, 2017 was as follows:

Industry	  	Amortized Cost	 	  	Fair Value	 	  	% of Fair Value	 	
Aerospace & Defense	  	$	62,761	 	  	$	61,797	 	  	 	4.44	% 	
Automotive	  	 	26,916	 	  	 	27,649	 	  	 	1.99	 	
Banking, Finance, Insurance & Real Estate	  	 	147,196	 	  	 	149,066	 	  	 	10.70	 	
Beverage, Food & Tobacco	  	 	15,089	 	  	 	15,465	 	  	 	1.11	 	
Business Services	  	 	123,636	 	  	 	121,538	 	  	 	8.73	 	
Capital Equipment	  	 	36,759	 	  	 	37,598	 	  	 	2.70	 	
Chemicals, Plastics & Rubber	  	 	19,787	 	  	 	19,767	 	  	 	1.42	 	
Construction & Building	  	 	23,375	 	  	 	23,663	 	  	 	1.70	 	
Consumer Services	  	 	81,999	 	  	 	83,524	 	  	 	6.00	 	
Containers, Packaging & Glass	  	 	49,417	 	  	 	47,710	 	  	 	3.43	 	
Durable Consumer Goods	  	 	19,790	 	  	 	19,312	 	  	 	1.39	 	
Energy: Electricity	  	 	36,810	 	  	 	36,904	 	  	 	2.65	 	
Energy: Oil & Gas	  	 	10,985	 	  	 	10,751	 	  	 	0.77	 	
Environmental Industries	  	 	40,775	 	  	 	41,613	 	  	 	2.99	 	
Forest Products & Paper	  	 	23,705	 	  	 	23,983	 	  	 	1.72	 	
Healthcare & Pharmaceuticals	  	 	161,881	 	  	 	164,877	 	  	 	11.84	 	
High Tech Industries	  	 	44,596	 	  	 	45,098	 	  	 	3.24	 	
Hotel, Gaming & Leisure	  	 	30,372	 	  	 	29,970	 	  	 	2.15	 	
Investment Fund	  	 	131,545	 	  	 	134,121	 	  	 	9.63	 	
Media: Advertising, Printing & Publishing	  	 	57,440	 	  	 	58,665	 	  	 	4.21	 	
Metals & Mining	  	 	10,207	 	  	 	10,237	 	  	 	0.74	 	
Non-durable Consumer Goods	  	 	32,723	 	  	 	27,918	 	  	 	2.00	 	
Retail	  	 	8,632	 	  	 	8,276	 	  	 	0.59	 	
Software	  	 	11,115	 	  	 	11,305	 	  	 	0.81	 	
Sovereign & Public Finance	  	 	1,783	 	  	 	1,800	 	  	 	0.13	 	
Structured Finance	  	 	6,582	 	  	 	2,776	 	  	 	0.20	 	
Telecommunications	  	 	85,076	 	  	 	85,034	 	  	 	6.11	 	
Transportation: Cargo	  	 	34,243	 	  	 	34,550	 	  	 	2.48	 	
Transportation: Consumer	  	 	26,800	 	  	 	27,502	 	  	 	1.97	 	
Wholesale	  	 	33,012	 	  	 	30,076	 	  	 	2.16	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,395,007	 	  	$	1,392,545	 	  	 	100.00	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The geographical composition of investments at fair value as of March 31, 2017 was as follows:

Geography	  	Amortized Cost	 	  	Fair Value	 	  	% of Fair Value	 	
Cayman Islands	  	$	6,582	 	  	$	2,776	 	  	 	0.20	% 	
United Kingdom	  	 	20,970	 	  	 	20,785	 	  	 	1.49	 	
United States	  	 	1,367,455	 	  	 	1,368,984	 	  	 	98.31	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,395,007	 	  	$	1,392,545	 	  	 	100.00	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-12

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/
non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage of
Net Assets	 	
First Lien Debt (80.09%)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Access CIG, LLC (2) (3) (4) (13)	 	Business Services	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	10/17/2021	 	 	$	18,335	 	 	$	18,222	 	 	$	18,335	 	 	 	2.40	% 	
Advanced Instruments,
LLC  (2) (3) (4) (5) (13) (15)	 	Healthcare & Pharmaceuticals	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	10/31/2022	 	 	 	22,500	 	 	 	22,019	 	 	 	22,252	 	 	 	2.91	 	
AF Borrower LLC
(Accuvant)  (2) (3) (4)	 	High Tech Industries	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	1/28/2022	 	 	 	16,113	 	 	 	15,923	 	 	 	16,113	 	 	 	2.11	 	
Alpha Packaging Holdings,
Inc.  (2) (3) (4) (13)	 	Containers, Packaging & Glass	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	5/12/2020	 	 	 	11,322	 	 	 	11,313	 	 	 	11,322	 	 	 	1.48	 	
Anaren, Inc. (2) (3) (4) (13)	 	Telecommunications	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	2/18/2021	 	 	 	10,869	 	 	 	10,800	 	 	 	10,869	 	 	 	1.42	 	
Audax AAMP Holdings,
Inc.  (2) (3) (4) (13)	 	Durable Consumer Goods	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	6/24/2017	 	 	 	10,424	 	 	 	10,400	 	 	 	10,348	 	 	 	1.35	 	
BAART Programs, Inc. (2) (4) (16)	 	Healthcare & Pharmaceuticals	 	 
	L + 7.75%
(0.00% Floor)	 
 	 	 	10/9/2021	 	 	 	7,406	 	 	 	7,355	 	 	 	7,534	 	 	 	0.99	 	
Brooks Equipment Company,
LLC  (2) (3) (4) (13)	 	Construction & Building	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	8/29/2020	 	 	 	6,694	 	 	 	6,657	 	 	 	6,683	 	 	 	0.87	 	
Capstone Logistics Acquisition,
Inc.  (2) (3) (4) (13)	 	Transportation: Cargo	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	10/7/2021	 	 	 	19,478	 	 	 	19,337	 	 	 	19,212	 	 	 	2.51	 	
Captive Resources Midco,
LLC  (2) (3) (4) (13) (15)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 5.75%
(1.00% Floor)	 
 	 	 	6/30/2020	 	 	 	29,050	 	 	 	28,683	 	 	 	29,009	 	 	 	3.80	 	
Central Security Group,
Inc.  (2) (3) (4) (13) (16)	 	Consumer Services	 	 
	L + 5.63%
(1.00% Floor)	 
 	 	 	10/6/2020	 	 	 	28,658	 	 	 	28,300	 	 	 	28,557	 	 	 	3.74	 	
CIP Revolution Holdings,
LLC  (2) (3) (5) (15)	 	Media: Advertising, Printing & Publishing	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	8/19/2021	 	 	 	16,500	 	 	 	16,325	 	 	 	16,585	 	 	 	2.17	 	
Colony Hardware
Corporation  (2) (3) (4) (13)	 	Construction & Building	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	10/23/2021	 	 	 	17,038	 	 	 	16,806	 	 	 	17,038	 	 	 	2.23	 	
Datapipe, Inc. (2) (3) (13) (16)	 	Telecommunications	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	3/15/2019	 	 	 	9,750	 	 	 	9,666	 	 	 	9,764	 	 	 	1.28	 	
Dent Wizard International
Corporation  (2) (3) (4) (13) (16)	 	Automotive	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	4/7/2020	 	 	 	7,216	 	 	 	7,190	 	 	 	7,216	 	 	 	0.94	 	
Derm Growth Partners III, LLC (Dermatology
Associates)  (2) (3) (4) (5) (13) (15)	 	Healthcare & Pharmaceuticals	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	5/31/2022	 	 	 	32,929	 	 	 	32,393	 	 	 	32,958	 	 	 	4.31	 	
Dimensional Dental Management,
LLC  (2) (3) (5) (12) (15)	 	Healthcare & Pharmaceuticals	 	 
	L + 7.00%
(1.00% Floor)	 
 	 	 	2/12/2021	 	 	 	18,000	 	 	 	17,601	 	 	 	17,811	 	 	 	2.33	 	
Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)  (2) (3) (5) (15)	 	Construction & Building	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	4/4/2022	 	 	 	—  	 	 	 	(60	) 	 	 	(30	) 	 	 	0.00	 	
Direct Travel, Inc. (2) (3) (4) (5) (13) (15)	 	Hotel, Gaming & Leisure	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	12/1/2021	 	 	 	12,842	 	 	 	12,420	 	 	 	12,712	 	 	 	1.66	 	
EIP Merger Sub, LLC (Evolve
IP)  (2) (3) (5) (12)	 	Telecommunications	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	23,750	 	 	 	23,098	 	 	 	23,242	 	 	 	3.04	 	
Emerging Markets Communications,
LLC  (2) (3) (4) (8) (13)	 	Telecommunications	 	 
	L + 5.75%
(1.00% Floor)	 
 	 	 	7/1/2021	 	 	 	17,730	 	 	 	16,299	 	 	 	17,730	 	 	 	2.32	 	
EP Minerals, LLC (2) (3) (4) (13)	 	Metals & Mining	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	8/20/2020	 	 	 	10,264	 	 	 	10,232	 	 	 	10,259	 	 	 	1.34	 	
FCX Holdings Corp. (2) (3) (4) (13) (16)	 	Capital Equipment	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	8/4/2020	 	 	 	9,856	 	 	 	9,852	 	 	 	9,856	 	 	 	1.29	 	
Genex Holdings, Inc. (2) (3) (13) (16)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	5/30/2021	 	 	 	4,200	 	 	 	4,187	 	 	 	4,196	 	 	 	0.55	 	
Global Software,
LLC  (2) (3) (4) (13) (16)	 	High Tech Industries	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	5/2/2022	 	 	 	16,163	 	 	 	15,880	 	 	 	16,163	 	 	 	2.12	 	
Green Energy Partners/Stonewall
LLC  (2) (3) (5) (13)	 	Energy: Electricity	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	11/13/2021	 	 	 	16,600	 	 	 	16,475	 	 	 	16,598	 	 	 	2.17	 	
Green Plains II
LLC  (2) (3) (4) (5) (13) (15)	 	Beverage, Food & Tobacco	 	 
	L + 7.00%
(1.00% Floor)	 
 	 	 	10/03/2022	 	 	 	15,205	 	 	 	15,059	 	 	 	15,379	 	 	 	2.01	 	
 
F-13

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/
non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage of
Net Assets	 	
First Lien Debt (80.09%) (continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Hummel Station LLC (2) (3) (5) (13) (16)	 	Energy: Electricity	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	10/27/2022	 	 	$	21,000	 	 	$	20,308	 	 	$	20,160	 	 	 	2.64	% 	
Imagine! Print Solutions,
LLC  (2) (3) (4) (13)	 	Media: Advertising, Printing & Publishing	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	3/30/2022	 	 	 	18,461	 	 	 	18,213	 	 	 	18,603	 	 	 	2.43	 	
Imperial Bag & Paper Co.
LLC  (2) (3) (4) (13) (16)	 	Forest Products & Paper	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	1/7/2022	 	 	 	24,074	 	 	 	23,752	 	 	 	23,924	 	 	 	3.13	 	
Indra Holdings Corp. (Totes
Isotoner)  (2) (3) (5) (13)	 	Non-durable Consumer Goods	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	5/1/2021	 	 	 	14,224	 	 	 	14,130	 	 	 	10,553	 	 	 	1.38	 	
International Medical Group,
Inc. (2) (3) (5) (12)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	10/30/2020	 	 	 	30,000	 	 	 	29,505	 	 	 	30,237	 	 	 	3.96	 	
Jackson Hewitt Inc. (2) (3) (4) (13)	 	Retail	 	 
	L + 7.00%
(1.00% Floor)	 
 	 	 	7/30/2020	 	 	 	8,758	 	 	 	8,625	 	 	 	8,320	 	 	 	1.09	 	
Metrogistics LLC (2) (3) (4) (5) (13)	 	Transportation: Cargo	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	9/30/2022	 	 	 	15,200	 	 	 	14,986	 	 	 	15,094	 	 	 	1.98	 	
MSX International, Inc. (2) (3) (4) (13)	 	Automotive	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	8/21/2020	 	 	 	8,940	 	 	 	8,882	 	 	 	8,940	 	 	 	1.17	 	
National Technical Systems,
Inc.  (2) (3) (4) (13) (15)	 	Aerospace & Defense	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/12/2021	 	 	 	25,123	 	 	 	24,854	 	 	 	23,927	 	 	 	3.13	 	
NES Global Talent Finance US LLC (United
Kingdom)  (2) (3) (4) (8) (13)	 	Energy: Oil & Gas	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	10/3/2019	 	 	 	11,250	 	 	 	11,132	 	 	 	10,911	 	 	 	1.43	 	
OnCourse Learning
Corporation  (2) (3) (4) (5) (13) (15) (16)	 	Consumer Services	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	9/12/2021	 	 	 	26,141	 	 	 	25,770	 	 	 	26,220	 	 	 	3.43	 	
Paradigm Acquisition
Corp.  (2) (3) (4) (13)	 	Business Services	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	6/2/2022	 	 	 	23,246	 	 	 	22,963	 	 	 	23,223	 	 	 	3.04	 	
Pelican Products, Inc. (2) (3) (4) (13)	 	Containers, Packaging & Glass	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	4/11/2020	 	 	 	7,643	 	 	 	7,654	 	 	 	7,593	 	 	 	0.99	 	
Plano Molding Company,
LLC  (2) (3) (4) (5) (13)	 	Hotel, Gaming & Leisure	 	 
	L + 7.00%
(1.00% Floor)	 
 	 	 	5/12/2021	 	 	 	18,163	 	 	 	18,030	 	 	 	17,302	 	 	 	2.26	 	
PPT Management Holdings,
LLC  (2) (3) (5)	 	Healthcare & Pharmaceuticals	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	12/16/2022	 	 	 	22,500	 	 	 	22,288	 	 	 	22,426	 	 	 	2.93	 	
Premier Senior Marketing,
LLC  (2) (3) (5) (16)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/1/2022	 	 	 	3,741	 	 	 	3,690	 	 	 	3,741	 	 	 	0.49	 	
Product Quest Manufacturing,
LLC  (2) (3) (4) (5) (12)	 	Containers, Packaging & Glass	 	 
	L + 5.75%
(1.00% Floor)	 
 	 	 	9/9/2020	 	 	 	28,000	 	 	 	27,565	 	 	 	25,838	 	 	 	3.38	 	
Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)  (2) (3) (4)	 	Wholesale	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	1/28/2020	 	 	 	10,798	 	 	 	10,739	 	 	 	8,101	 	 	 	1.06	 	
PSC Industrial Holdings
Corp  (2) (3) (4) (13)	 	Environmental Industries	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	12/5/2020	 	 	 	11,760	 	 	 	11,679	 	 	 	11,290	 	 	 	1.48	 	
PSI Services LLC (2) (3) (4) (5) (12) (16)	 	Business Services	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	2/27/2021	 	 	 	32,705	 	 	 	32,022	 	 	 	34,784	 	 	 	4.56	 	
PT Intermediate Holdings III, LLC (Parts Town)  (2) (3) (4) (5) (13) (15)	 	Wholesale	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	6/23/2022	 	 	 	17,417	 	 	 	17,215	 	 	 	17,563	 	 	 	2.30	 	
QW Holding Corporation
(Quala)  (2) (3) (4) (5) (13)	 	Environmental Industries	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	8/31/2022	 	 	 	29,925	 	 	 	29,084	 	 	 	30,009	 	 	 	3.93	 	
Reliant Pro Rehab, LLC (2) (3) (5) (12)	 	Healthcare & Pharmaceuticals	 	 
	L + 10.00%
(1.00% Floor)	 
 	 	 	12/29/2017	 	 	 	22,331	 	 	 	22,024	 	 	 	22,331	 	 	 	2.92	 	
SolAero Technologies
Corp.  (2) (3) (4) (5)	 	Telecommunications	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	12/10/2020	 	 	 	19,677	 	 	 	19,541	 	 	 	18,901	 	 	 	2.47	 	
Superior Health Linens,
LLC  (2) (3) (4) (5) (13) (15)	 	Business Services	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	9/30/2021	 	 	 	19,206	 	 	 	18,891	 	 	 	19,068	 	 	 	2.50	 	
T2 Systems,
Inc.  (2) (3) (4) (5) (13) (15) (16)	 	Transportation: Consumer	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	22,950	 	 	 	22,333	 	 	 	23,208	 	 	 	3.04	 	
T2 Systems Canada, Inc. (2) (3) (5) (16)	 	Transportation: Consumer	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	4,050	 	 	 	3,952	 	 	 	4,090	 	 	 	0.54	 	
 
F-14

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/
non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
First Lien Debt (80.09%) (continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Teaching Strategies, LLC (2) (3) (4) (13)	 	Media: Advertising, Printing & Publishing	 	 
	L + 5.50%
(0.50% Floor)	 
 	 	 	10/1/2019	 	 	$	13,369	 	 	$	13,333	 	 	$	13,369	 	 	 	1.75	% 	
The Hilb Group, LLC (2) (3) (5) (12) (15)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	6/24/2021	 	 	 	29,682	 	 	 	29,113	 	 	 	29,826	 	 	 	3.90	 	
The SI Organization, Inc. (2) (3) (4) (13)	 	Aerospace & Defense	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	11/23/2019	 	 	 	8,574	 	 	 	8,527	 	 	 	8,676	 	 	 	1.15	 	
The Topps Company, Inc. (2) (3) (4) (13)	 	Non-durable Consumer Goods	 	 
	L + 6.00%
(1.25% Floor)	 
 	 	 	10/2/2020	 	 	 	18,707	 	 	 	18,629	 	 	 	18,795	 	 	 	2.46	 	
TruckPro, LLC (2) (3) (4) (13) (16)	 	Automotive	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	8/6/2018	 	 	 	9,292	 	 	 	9,267	 	 	 	9,262	 	 	 	1.21	 	
Tweddle Group, Inc. (2) (3) (4) (13)	 	Media: Advertising, Printing & Publishing	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	10/24/2022	 	 	 	16,200	 	 	 	15,885	 	 	 	16,114	 	 	 	2.11	 	
TwentyEighty, Inc. (fka Miller
Heiman, Inc.)  (2) (3) (5) (10) (13)	 	Business Services	 	 
	L + 6.00%
(1.00% Floor)	 
 	 	 	9/30/2019	 	 	 	18,719	 	 	 	18,571	 	 	 	7,628	 	 	 	1.00	 	
U.S. Farathane, LLC (2) (3) (4) (13)	 	Automotive	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	12/23/2021	 	 	 	1,925	 	 	 	1,895	 	 	 	1,925	 	 	 	0.25	 	
U.S. TelePacific Holdings
Corp.  (2) (3) (5)	 	Telecommunications	 	 
	L + 8.50%
(1.00% Floor)	 
 	 	 	2/24/2021	 	 	 	30,000	 	 	 	29,149	 	 	 	29,853	 	 	 	3.91	 	
Vetcor Professional Practices,
LLC  (2) (3) (4) (5) (13) (15)	 	Consumer Services	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	4/20/2021	 	 	 	25,001	 	 	 	24,623	 	 	 	25,164	 	 	 	3.29	 	
Violin Finco S.A.R.L. (Alexander
Mann Solutions) (United
Kingdom)  (2) (3) (4) (8) (13)	 	Business Services	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	12/20/2019	 	 	 	10,065	 	 	 	10,012	 	 	 	10,058	 	 	 	1.32	 	
Vistage Worldwide, Inc. (2) (3) (4) (13) (16)	 	Business Services	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	8/19/2021	 	 	 	28,757	 	 	 	28,524	 	 	 	28,688	 	 	 	3.75	 	
Vitera Healthcare Solutions,
LLC  (2) (3) (4) (13)	 	Healthcare & Pharmaceuticals	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	11/4/2020	 	 	 	9,104	 	 	 	9,050	 	 	 	9,078	 	 	 	1.19	 	
Winchester Electronics
Corporation  (2) (3) (4) (5) (13) (15)	 	Capital Equipment	 	 
	L + 6.50%
(1.00% Floor)	 
 	 	 	6/30/2022	 	 	 	27,367	 	 	 	26,959	 	 	 	27,460	 	 	 	3.59	 	
Zest Holdings, LLC (2) (3) (4) (13)	 	Durable Consumer Goods	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	8/16/2020	 	 	 	9,530	 	 	 	9,530	 	 	 	9,584	 	 	 	1.25	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,145,326	 	 	$	1,139,548	 	 	 	149.13	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt (12.08%)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
AF Borrower LLC (Accuvant) (2) (3) (5)	 	High Tech Industries	 	 
	L + 9.00%
(1.00% Floor)	 
 	 	 	1/30/2023	 	 	$	8,000	 	 	$	7,934	 	 	$	8,000	 	 	 	1.05	% 	
AIM Group USA Inc. (2) (3) (5) (13)	 	Aerospace & Defense	 	 
	L + 9.00%
(1.00% Floor)	 
 	 	 	8/2/2022	 	 	 	23,000	 	 	 	22,701	 	 	 	23,196	 	 	 	3.04	 	
AmeriLife Group, LLC (2) (3) (5)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 8.75%
(1.00% Floor)	 
 	 	 	1/10/2023	 	 	 	20,000	 	 	 	19,656	 	 	 	19,208	 	 	 	2.51	 	
Argon Medical Devices,
Inc.  (2) (3) (4) (5)	 	Healthcare & Pharmaceuticals	 	 
	L + 9.50%
(1.00% Floor)	 
 	 	 	6/23/2022	 	 	 	24,000	 	 	 	23,363	 	 	 	24,233	 	 	 	3.17	 	
Berlin Packaging L.L.C. (2) (3) (5) (13)	 	Containers, Packaging & Glass	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	10/1/2022	 	 	 	2,927	 	 	 	2,910	 	 	 	2,953	 	 	 	0.39	 	
Charter NEX US Holdings,
Inc.  (2) (3) (5) (13)	 	Chemicals, Plastics & Rubber	 	 
	L + 8.25%
(1.00% Floor)	 
 	 	 	2/5/2023	 	 	 	7,394	 	 	 	7,303	 	 	 	7,468	 	 	 	0.98	 	
Confie Seguros Holding II
Co.  (2) (3) (5) (16)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 9.00%
(1.25% Floor)	 
 	 	 	5/8/2019	 	 	 	12,000	 	 	 	11,921	 	 	 	11,918	 	 	 	1.56	 	
Drew Marine Group Inc. (2) (3) (4) (5) (13)	 	Chemicals, Plastics & Rubber	 	 
	L + 7.00%
(1.00% Floor)	 
 	 	 	5/19/2021	 	 	 	12,500	 	 	 	12,481	 	 	 	12,333	 	 	 	1.61	 	
Genex Holdings, Inc. (2) (3) (5)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 7.75%
(1.00% Floor)	 
 	 	 	5/30/2022	 	 	 	7,990	 	 	 	7,915	 	 	 	7,978	 	 	 	1.04	 	
 
F-15

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/
non-affiliated  (1)	 	Industry	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
Second Lien Debt (12.08%) (continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Institutional Shareholder
Services Inc.  (2) (3) (5) (13)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 8.50%
(1.00% Floor)	 
 	 	 	4/29/2022	 	 	$	12,500	 	 	$	12,408	 	 	$	12,359	 	 	 	1.62	% 	
Jazz Acquisition, Inc.
(Wencor)  (2) (3) (5) (13)	 	Aerospace & Defense	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	6/19/2022	 	 	 	6,700	 	 	 	6,677	 	 	 	5,572	 	 	 	0.73	 	
MRI Software, LLC (2) (3) (5)	 	Software	 	 
	L + 8.00%
(1.00% Floor)	 
 	 	 	6/23/2022	 	 	 	11,250	 	 	 	11,110	 	 	 	11,265	 	 	 	1.47	 	
Power Stop, LLC (5) (9)	 	Automotive	 	 	11.00%	 	 	 	5/29/2022	 	 	 	10,000	 	 	 	9,831	 	 	 	9,863	 	 	 	1.29	 	
Prowler Acquisition Corp. (Pipeline
Supply and Service, LLC)  (2) (3) (5)	 	Wholesale	 	 
	L + 8.50%
(1.00% Floor)	 
 	 	 	7/28/2020	 	 	 	3,000	 	 	 	2,960	 	 	 	1,682	 	 	 	0.22	 	
Vitera Healthcare Solutions,
LLC  (2) (3) (4)	 	Healthcare & Pharmaceuticals	 	 
	L + 8.25%
(1.00% Floor)	 
 	 	 	11/4/2021	 	 	 	2,000	 	 	 	1,979	 	 	 	1,945	 	 	 	0.26	 	
Watchfire Enterprises, Inc. (2) (3) (5) (13)	 	Media: Advertising, Printing & Publishing	 	 
	L + 8.00%
(1.00% Floor)	 
 	 	 	10/2/2021	 	 	 	7,000	 	 	 	6,932	 	 	 	6,976	 	 	 	0.91	 	
Zywave, Inc. (2) (3) (5)	 	High Tech Industries	 	 
	L + 9.00%
(1.00% Floor)	 
 	 	 	11/17/2023	 	 	 	4,950	 	 	 	4,879	 	 	 	4,915	 	 	 	0.64	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	172,960	 	 	$	171,864	 	 	 	22.49	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated (1)	 	Industry	 	 	Maturity
Date	 	 	Par
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
Structured Finance Obligations (0.37%) (5) (8) (11)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1776 CLO I, Ltd., Subordinated Notes	 	 	Structured Finance	 	 	 	5/8/2020	 	 	$	11,750	 	 	$	6,739	 	 	$	2,761	 	 	 	0.36	% 	
Clydesdale CLO 2005, Ltd., Subordinated Notes	 	 	Structured Finance	 	 	 	12/6/2017	 	 	 	5,750	 	 	 	—  	 	 	 	10	 	 	 	0.00	 	
MSIM Peconic Bay, Ltd., Subordinated Notes	 	 	Structured Finance	 	 	 	7/20/2019	 	 	 	4,500	 	 	 	63	 	 	 	5	 	 	 	0.00	 	
Nautique Funding Ltd., Income Notes	 	 	Structured Finance	 	 	 	4/15/2020	 	 	 	5,000	 	 	 	2,437	 	 	 	2,440	 	 	 	0.32	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Structured Finance Obligations Total	 	 	 	 	 	 	 	 	 	 	 	 	 	$	9,239	 	 	$	5,216	 	 	 	0.68	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated (1)	  	Industry	 	  	Shares/
Units	 	  	Cost	 	  	Fair
Value  (7)	 	  	Percentage
of Net
Assets	 	
Equity Investments (0.46%) (5)	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
CIP Revolution Investments, LLC	  	 
	Media: Advertising,
Printing & Publishing	 
 	  	 	30,000	 	  	$	300	 	  	$	352	 	  	 	0.05	% 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	 
	Healthcare &
Pharmaceuticals	 
 	  	 	1,000,000	 	  	 	1,000	 	  	 	976	 	  	 	0.13	 	
GS Holdco LLC (Global Software, LLC)	  	 	High Tech Industries	 	  	 	1,000,000	 	  	 	1,001	 	  	 	1,126	 	  	 	0.15	 	
Power Stop Intermediate Holdings, LLC	  	 	Automotive	 	  	 	7,150	 	  	 	715	 	  	 	1,208	 	  	 	0.16	 	
T2 Systems Parent Corporation	  	 	Transportation: Consumer	 	  	 	555,556	 	  	 	556	 	  	 	584	 	  	 	0.07	 	
THG Acquisition, LLC (The Hilb Group, LLC)	  	 
	Banking, Finance,
Insurance & Real Estate	 
 	  	 	1,500,000	 	  	 	1,499	 	  	 	2,228	 	  	 	0.29	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Equity Investments Total	  	 	 	 	  	 	 	 	  	$	5,071	 	  	$	6,474	 	  	 	0.85	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total investments—non-controlled/non-affiliated	  	 	 	 	  	 	 	 	  	$	1,332,596	 	  	$	1,323,102	 	  	 	173.15	% 	

F-16

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—controlled/affiliated	 	Industry	 	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par
Amount/
LLC
Interest	 	 	Cost	 	 	Fair
Value  (7)	 	 	Percentage
of Net
Assets	 	
Investment Fund (7.00%)(8)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Middle Market Credit Fund, LLC, Mezzanine Loan  (2) (5) (9) (14)	 	 	Investment Fund	 	 	 	L + 9.50%	 	 	 	6/24/2017	 	 	$	62,384	 	 	$	62,384	 	 	$	62,384	 	 	 	8.16	% 	
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest  (5) (14)	 	 	Investment Fund	 	 	 	0.001	 	 	 	3/1/2021	 	 	 	35,001	 	 	 	35,001	 	 	 	37,273	 	 	 	4.88	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investment Fund Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	97,385	 	 	$	99,657	 	 	 	13.04	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments—controlled/affiliated	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	97,385	 	 	$	99,657	 	 	 	13.04	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,429,981	 	 	$	1,422,759	 	 	 	186.19	% 	

(1)	Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States and issuers of structured finance obligations are domiciled in the Cayman Islands. Under the Investment Company Act, the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2016, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2016, the Company is not an “affiliated person” of any of these portfolio companies.	
(2)	Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of our LIBOR loans were indexed to the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 16 below.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by the SPV. The SPV has entered into the SPV Credit Facility. The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or the 2015-1 Issuer, a wholly owned and consolidated subsidiary of the Company.	
(5)	Denotes that all or a portion of the assets are owned by the Company. The Company has entered into the Credit Facility. The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the SPV or the 2015-1 Issuer.	
(6)	Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. Equity tranche CLO fund investments, which are referred to as “structured finance obligations”, are recorded at amortized cost using the effective interest method.	
(7)	Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy.	
(8)	The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.	
(9)	Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.	
(10)	Loan was on non-accrual status as of December 31, 2016.	
(11)	As of December 31, 2016, the Company has a greater than 25% but less than 50% equity or subordinated notes ownership interest in certain structured finance obligations. These investments have governing documents that preclude the Company from controlling management of the entity and therefore the Company has determined that the issuer of the investment is not a controlled affiliate or a non-controlled affiliate because the investments are not “voting securities”.	
(12)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Dimensional Dental Management, LLC (4.54%), EIP Merger Sub, LLC (Evolve IP) (3.84%), International Medical Group, Inc. (4.64%), Product Quest Manufacturing, LLC (3.54%), PSI Services LLC (4.40%), Reliant Pro Rehab, LLC (nil) and The Hilb Group, LLC (3.96%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
 
F-17

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of December 31, 2016
(dollar amounts in thousands)
 
(13)	Denotes that all or a portion of the assets are owned by the 2015-1 Issuer and secure the notes issued in connection with a $400 million term debt securitization completed by the Company on June 26, 2015 (see Note 7, 2015-1 Notes). Accordingly, such assets are not available to the creditors of the SPV or the Company.	
(14)	Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, for more details.	
(15)	As of December 31, 2016, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

Investments—non-controlled/non-affiliated	  	Type	 	  	Unused
Fee	 	 	Par/
Principal
Amount	 	  	Fair Value	 	
First Lien Debt—unfunded delayed draw and revolving term loans commitments	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Advanced Instruments, LLC	  	 	Revolver	 	  	 	0.50	% 	 	$	2,500	 	  	$	(25	) 	
Captive Resources Midco, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,875	 	  	 	(2	) 	
Captive Resources Midco, LLC	  	 	Delayed Draw	 	  	 	1.25	% 	 	 	3,125	 	  	 	(4	) 	
CIP Revolution Holdings, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,331	 	  	 	6	 	
CIP Revolution Holdings, LLC	  	 	Delayed Draw	 	  	 	0.75	% 	 	 	1,331	 	  	 	6	 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	 	Revolver	 	  	 	0.50	% 	 	 	1,672	 	  	 	1	 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	5,247	 	  	 	4	 	
Dimensional Dental Management, LLC	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	2,507	 	  	 	(23	) 	
Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)	  	 	Revolver	 	  	 	0.50	% 	 	 	4,750	 	  	 	(30	) 	
Direct Travel, Inc.	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	9,658	 	  	 	(56	) 	
Green Plains II LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,352	 	  	 	14	 	
National Technical Systems, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,031	 	  	 	(102	) 	
National Technical Systems, Inc.	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	4,469	 	  	 	(165	) 	
OnCourse Learning Corporation	  	 	Revolver	 	  	 	0.50	% 	 	 	859	 	  	 	2	 	
PT Intermediate Holdings III, LLC (Parts Town)	  	 	Revolver	 	  	 	0.50	% 	 	 	2,025	 	  	 	15	 	
Superior Health Linens, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	2,735	 	  	 	(17	) 	
T2 Systems, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,933	 	  	 	29	 	
The Hilb Group, LLC	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	3,810	 	  	 	16	 	
Vetcor Professional Practices, LLC	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	3,057	 	  	 	18	 	
Winchester Electronics Corporation	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	2,500	 	  	 	8	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	 	 	  	 	 	 	 	$	59,767	 	  	$	(305	) 	

(16)	As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.	
As of December 31, 2016, investments at fair value consisted of the following:

Type—% of Fair Value	  	Amortized Cost	 	  	Fair Value	 	  	% of Fair Value	 	
First Lien Debt	  	$	1,145,326	 	  	$	1,139,548	 	  	 	80.09	% 	
Second Lien Debt	  	 	172,960	 	  	 	171,864	 	  	 	12.08	 	
Structured Finance Obligations	  	 	9,239	 	  	 	5,216	 	  	 	0.37	 	
Equity Investments	  	 	5,071	 	  	 	6,474	 	  	 	0.46	 	
Investment Fund	  	 	97,385	 	  	 	99,657	 	  	 	7.00	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,429,981	 	  	$	1,422,759	 	  	 	100.00	% 	

Type—% of Fair Value of First and Second Lien Debt	  	Amortized Cost	 	  	Fair Value	 	  	% of Fair Value	 	
Floating Rate	  	$	1,308,455	 	  	$	1,301,549	 	  	 	99.25	% 	
Fixed Rate	  	 	9,831	 	  	 	9,863	 	  	 	0.75	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,318,286	 	  	$	1,311,412	 	  	 	100.00	% 	

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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)
As of December 31, 2016
(dollar amounts in thousands)
 
The industry composition of investments at fair value as of December 31, 2016 was as follows:

Industry	  	Amortized Cost	 	  	Fair Value	 	  	% of Fair Value	 	
Aerospace & Defense	  	$	62,759	 	  	$	61,371	 	  	 	4.31	% 	
Automotive	  	 	37,780	 	  	 	38,414	 	  	 	2.70	 	
Banking, Finance, Insurance & Real Estate	  	 	148,577	 	  	 	150,700	 	  	 	10.59	 	
Beverage, Food & Tobacco	  	 	15,059	 	  	 	15,379	 	  	 	1.08	 	
Business Services	  	 	149,205	 	  	 	141,784	 	  	 	9.97	 	
Capital Equipment	  	 	36,811	 	  	 	37,316	 	  	 	2.62	 	
Chemicals, Plastics & Rubber	  	 	19,784	 	  	 	19,801	 	  	 	1.39	 	
Construction & Building	  	 	23,403	 	  	 	23,691	 	  	 	1.67	 	
Consumer Services	  	 	78,693	 	  	 	79,941	 	  	 	5.62	 	
Containers, Packaging & Glass	  	 	49,442	 	  	 	47,706	 	  	 	3.35	 	
Durable Consumer Goods	  	 	19,930	 	  	 	19,932	 	  	 	1.04	 	
Energy: Electricity	  	 	36,783	 	  	 	36,758	 	  	 	2.59	 	
Energy: Oil & Gas	  	 	11,132	 	  	 	10,911	 	  	 	0.77	 	
Environmental Industries	  	 	40,763	 	  	 	41,299	 	  	 	2.90	 	
Forest Products & Paper	  	 	23,752	 	  	 	23,924	 	  	 	1.68	 	
Healthcare & Pharmaceuticals	  	 	159,072	 	  	 	161,544	 	  	 	11.36	 	
High Tech Industries	  	 	45,617	 	  	 	46,317	 	  	 	3.26	 	
Hotel, Gaming & Leisure	  	 	30,450	 	  	 	30,014	 	  	 	2.11	 	
Investment Fund	  	 	97,385	 	  	 	99,657	 	  	 	7.00	 	
Media: Advertising, Printing & Publishing	  	 	70,988	 	  	 	71,999	 	  	 	5.06	 	
Metals & Mining	  	 	10,232	 	  	 	10,259	 	  	 	0.72	 	
Non-durable Consumer Goods	  	 	32,759	 	  	 	29,348	 	  	 	2.06	 	
Retail	  	 	8,625	 	  	 	8,320	 	  	 	0.58	 	
ware	  	 	11,110	 	  	 	11,265	 	  	 	0.79	 	
Structured Finance	  	 	9,239	 	  	 	5,216	 	  	 	0.37	 	
Telecommunications	  	 	108,553	 	  	 	110,359	 	  	 	7.76	 	
Transportation: Cargo	  	 	34,323	 	  	 	34,306	 	  	 	2.41	 	
Transportation: Consumer	  	 	26,841	 	  	 	27,882	 	  	 	1.96	 	
Wholesale	  	 	30,914	 	  	 	27,346	 	  	 	1.92	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,429,981	 	  	$	1,422,759	 	  	 	100.00	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The geographical composition of investments at fair value as of December 31, 2016 was as follows:

Geography	  	Amortized Cost	 	  	Fair Value	 	  	% of Fair Value	 	
Cayman Islands	  	$	9,239	 	  	$	5,216	 	  	 	0.37	% 	
United Kingdom	  	 	21,144	 	  	 	20,969	 	  	 	1.47	 	
United States	  	 	1,399,598	 	  	 	1,396,574	 	  	 	98.16	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,429,981	 	  	$	1,422,759	 	  	 	100.00	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
As of March 31, 2017
(dollar amounts in thousands, except per share data)
1. ORGANIZATION
TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company is managed by its investment adviser, Carlyle GMS Investment Management L.L.C. (“CGMSIM” or “Investment Adviser”), a wholly owned subsidiary of The Carlyle Group L.P. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).
The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which the Company defines as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which the Company believes is a useful proxy for cash flow. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, the Company expects that between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans. The Company expects that the composition of its portfolio will change over time given the Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which the Company is operating.
On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. If the Company has not consummated an initial public offering of its common stock that results in an unaffiliated public float of at least 15% of the aggregate capital commitments received prior to the date of such initial public offering (a “Qualified IPO”) by May 2, 2018, then the Board of Directors of the Company (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) will use its best efforts to wind down and/or liquidate and dissolve.
The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. The Company will remain an emerging growth company for up to five years following an initial public offering, although if the market value of the common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, the Company would cease to be an emerging growth company as of the following December 31.
The Company is externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle GMS Finance Administration L.L.C. (the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of The Carlyle Group L.P. “Carlyle” refers to The Carlyle Group L.P. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global alternative asset manager publicly traded on NASDAQ Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.
 
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Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.”
TCG BDC SPV LLC (the “SPV”) is a Delaware limited liability company that was formed on January 3, 2013. The SPV invests in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from “Carlyle GMS Finance SPV LLC” to “TCG BDC SPV LLC”.
On June 26, 2015, the Company completed a $400 million term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle GMS Finance MM CLO 2015-1 LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company, and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 7 for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015.
On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 (as amended, the “Limited Liability Company Agreement”) to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, for details.
As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).
To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“US GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Accounting Standards Update (“ASU”) 2013-08, Financial Services—Investment Companies  (“ASU 2013-08”):  Amendments to the Scope, Measurement and Disclosure Requirements.  The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPV and the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. US GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.
The interim financial statements have been prepared in accordance with US GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X.
 
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Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with US GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the interim period presented have been included. These adjustments are of a normal, recurring nature. This Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2016. The results of operations for the three month period ended March 31, 2017 are not necessarily indicative of the operating results to be expected for the full year.
Use of Estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3 for further information about fair value measurements.
Cash and Cash Equivalents
Cash and cash equivalents consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash and cash equivalents are held with two large financial institutions and cash held in such financial institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit.
Revenue Recognition
Interest from Investments and Realized Gain/Loss on Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan
 
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principal on the respective capitalization dates, and is generally due at maturity. As of March 31, 2017, the fair value of the loan in the portfolio with PIK provisions was $8,861, which represents approximately 0.6% of total investments at fair value. For the three month period ended March 31, 2017, there was no PIK interest accrued. As of December 31, 2016, no loans in the portfolio contained PIK provisions.
Interest income from investments in the “equity” class of collateralized loan obligation (“CLO”) funds, which are included in “structured finance obligations”, is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with Accounting Standards Codification (“ASC”) 325-40,  Beneficial Interests in Securitized Financials Assets . The Company monitors the expected cash inflows from its CLO equity investments, including the expected residual payments and the effective yield is determined and updated at least quarterly. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Company’s estimates if the information was known at the time. As a result, actual results may differ significantly from these estimates.
Dividend Income
Dividend income from the investment fund is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.
Other Income
Other income may include income such as consent, waiver, amendment, syndication and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the three month periods ended March 31, 2017 and 2016, the Company earned $2,536 and $999, respectively, in other income, primarily from syndication and prepayment fees.
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of March 31, 2017, the fair value of the loan in the portfolio on non-accrual status was $8,858, which represents approximately 0.6% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of March 31, 2017. All first and second lien debt investments were performing and current on their interest payments as of March 31, 2016.
SPV Credit Facility, Credit Facility and 2015-1 Notes Related Costs, Expenses and Deferred Financing Costs (See Note 6, Borrowings, and Note 7, 2015-1 Notes)
Interest expense and unused commitment fees on the SPV Credit Facility and Credit Facility are recorded on an accrual basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.
 
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The SPV Credit Facility and Credit Facility are recorded at carrying value, which approximates fair value.
Deferred financing costs include capitalized expenses related to the closing or amendments of the SPV Credit Facility and Credit Facility. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility, except for a portion that was accelerated in connection with the amendment of the SPV Credit Facility as described in Note 6. The unamortized balance of such costs is included in deferred financing costs in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of Operations.
Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1 Notes. Amortization of debt issuance costs for the 2015-1 Notes is computed on the effective yield method over the term of the 2015-1 Notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the 2015-1 Notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense in the accompanying Consolidated Statements of Operations.
The 2015-1 Notes are recorded at carrying value, which approximates fair value.
Organization and Offering Costs
The Company agreed to reimburse the Investment Adviser for initial organization and offering costs incurred on behalf of the Company up to $1,500. As of March 31, 2017 and December 31, 2016, $1,500 of organization and offering costs had been incurred by the Company and $57 of excess organization and offering costs had been incurred by the Investment Adviser since inception. The $1,500 of incurred organization and offering costs are allocated to all stockholders based on their respective capital commitment and are re-allocated amongst all stockholders at the time of each capital drawdown subsequent to the Initial Closing. The Company’s organization costs incurred are expensed and the offering costs are charged against equity when incurred.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.
 
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The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense. The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company.
Capital Calls and Dividends and Distributions to Common Stockholders
The Company records the shares issued in connection with capital calls as of the effective date of the capital call. To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.
The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and The Company declares, a cash dividend or distribution, the stockholders who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
Functional Currency
The functional currency of the Company is the U.S. Dollar and all transactions were in U.S. Dollars.
3. FAIR VALUE MEASUREMENTS
The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 820,  Fair Value Measurement  (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Company’s Board of Directors, does not represent fair value shall each be valued as of the measurement date
 
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using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
 
 	•	 	the nature and realizable value of any collateral;	
 
 	•	 	call features, put features and other relevant terms of debt;	
 
 	•	 	the portfolio company’s leverage and ability to make payments;	
 
 	•	 	the portfolio company’s public or private credit rating;	
 
 	•	 	the portfolio company’s actual and expected earnings and discounted cash flow;	
 
 	•	 	prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;	
 
 	•	 	the markets in which the portfolio company does business and recent economic and/or market events; and	
 
 	•	 	comparisons to comparable transactions and publicly traded securities.	
Investment performance data utilized are the most recently available financial statements and compliance certificate received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of March 31, 2017 and December 31, 2016.
US GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of
 
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factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
 
 	•	 	Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments in Level 1 generally include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.	
 
 	•	 	Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.	
 
 	•	 	Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are in this category generally include investments in privately-held entities, CLOs, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.	
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.
Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur. For the three month periods ended March 31, 2017 and 2016, there were no transfers between levels.
 
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The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of March 31, 2017 and December 31, 2016:

 	  	March 31, 2017	 	
 	  	Level 1	 	  	Level 2	 	  	Level 3	 	  	Total	 	
Assets	 	  	 	 	 	  	 	 	 	
First Lien Debt	  	$	—  	 	  	$	—  	 	  	$	1,085,554	 	  	$	1,085,554	 	
Second Lien Debt	  	 	—  	 	  	 	—  	 	  	 	161,643	 	  	 	161,643	 	
Structured Finance Obligations	  	 	—  	 	  	 	—  	 	  	 	2,776	 	  	 	2,776	 	
Equity Investments	  	 	—  	 	  	 	—  	 	  	 	8,451	 	  	 	8,451	 	
Investment Fund	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Mezzanine Loan	  	 	—  	 	  	 	—  	 	  	 	86,044	 	  	 	86,044	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Subtotal	  	$	—  	 	  	$	—  	 	  	$	1,344,468	 	  	$	1,344,468	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Investments measured at net asset value (1)	  	 	 	 	  	 	 	 	  	 	 	 	  	$	48,077	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	 	 	  	 	 	 	  	 	 	 	  	$	1,392,545	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	December 31, 2016	 	
 	  	Level 1	 	  	Level 2	 	  	Level 3	 	  	Total	 	
Assets	  	 	 	 	  	 	 	 	  	 	 	 	
First Lien Debt	  	$	—  	 	  	$	—  	 	  	$	1,139,548	 	  	$	1,139,548	 	
Second Lien Debt	  	 	—  	 	  	 	—  	 	  	 	171,864	 	  	 	171,864	 	
Structured Finance Obligations	  	 	—  	 	  	 	—  	 	  	 	5,216	 	  	 	5,216	 	
Equity Investments	  	 	—  	 	  	 	—  	 	  	 	6,474	 	  	 	6,474	 	
Investment Fund	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Mezzanine Loan	  	 	—  	 	  	 	—  	 	  	 	62,384	 	  	 	62,384	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Subtotal	  	$	—  	 	  	$	—  	 	  	$	1,385,486	 	  	$	1,385,486	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Investments measured at net asset value (1)	  	 	 	 	  	 	 	 	  	 	 	 	  	$	37,273	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	 	 	  	 	 	 	  	 	 	 	  	$	1,422,759	 	

(1)	Amount represents the Company’s subordinated loan and member’s interest investments in Credit Fund. The fair value of these investments has been estimated using the net asset value of the Company’s ownership interests in Credit Fund.	
 
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The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:

 	  	Financial Assets
For the three month period ended March 31, 2017	 	
 	  	First Lien
Debt	 	 	Second
Lien Debt	 	 	Structured
Finance
Obligations	 	 	Equity
Investments	 	  	Investment
Fund -
Mezzanine
Loan	 	 	Total	 	
Balance, beginning of period	  	$	1,139,548	 	 	$	171,864	 	 	$	5,216	 	 	$	6,474	 	  	$	62,384	 	 	$	1,385,486	 	
Purchases	  	 	92,793	 	 	 	1,782	 	 	 	—  	 	 	 	1,500	 	  	 	45,660	 	 	 	141,735	 	
Sales	  	 	(24,723	) 	 	 	(2,978	) 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	(27,701	) 	
Paydowns	  	 	(120,872	) 	 	 	(10,000	) 	 	 	(2,518	) 	 	 	—  	 	  	 	(22,000	) 	 	 	(155,390	) 	
Accretion of discount	  	 	3,425	 	 	 	151	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	3,576	 	
Net realized gains (losses)	  	 	(7,552	) 	 	 	(3	) 	 	 	(139	) 	 	 	—  	 	  	 	—  	 	 	 	(7,694	) 	
Net change in unrealized appreciation (depreciation)	  	 	2,935	 	 	 	827	 	 	 	217	 	 	 	477	 	  	 	—  	 	 	 	4,456	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Balance, end of period	  	$	1,085,554	 	 	$	161,643	 	 	$	2,776	 	 	$	8,451	 	  	$	86,044	 	 	$	1,344,468	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of March 31, 2017 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated Statements of Operations	  	$	(3,472	) 	 	$	859	 	 	$	220	 	 	$	477	 	  	$	—  	 	 	$	(1,916	) 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	Financial Assets
For the three month period ended March 31, 2016	 	
 	  	First Lien
Debt	 	 	Second
Lien Debt	 	 	Structured
Finance
Obligations	 	 	Equity
Investments	 	  	Total	 	
Balance, beginning of period	  	$	785,459	 	 	$	210,396	 	 	$	44,812	 	 	$	2,424	 	  	$	1,043,091	 	
Purchases	  	 	98,802	 	 	 	33,488	 	 	 	—  	 	 	 	—  	 	  	 	132,290	 	
Sales	  	 	(2,193	) 	 	 	(10,835	) 	 	 	(9,805	) 	 	 	—  	 	  	 	(22,833	) 	
Paydowns	  	 	(3,326	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	(3,326	) 	
Accretion of discount	  	 	532	 	 	 	97	 	 	 	(31	) 	 	 	—  	 	  	 	598	 	
Net realized gains (losses)	  	 	4	 	 	 	—  	 	 	 	(3,581	) 	 	 	—  	 	  	 	(3,577	) 	
Net change in unrealized appreciation (depreciation)	  	 	(5,608	) 	 	 	(5,256	) 	 	 	(1,040	) 	 	 	371	 	  	 	(11,533	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Balance, end of period	  	$	873,670	 	 	$	227,890	 	 	$	30,355	 	 	$	2,795	 	  	$	1,134,710	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of March 31, 2016 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated Statements of Operations	  	$	(5,602	) 	 	$	(5,256	) 	 	$	(4,298	) 	 	$	371	 	  	$	(14,785	) 	

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The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.
Investments in structured finance obligations are generally valued using a discounted cash flow and/or consensus pricing.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes EBITDA multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in the subordinated loan and member’s interest of the investment fund are valued using the net asset value of the Company’s ownership interest in the investment fund and investments in the mezzanine loan of the investment fund are valued using discounted cash flow analysis with expected repayment rate of principal and interest.
 
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The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of March 31, 2017 and December 31, 2016:

 	 	Fair Value as of
March 31,
2017	 	 	Valuation Techniques	 	Significant
Unobservable Inputs	 	Range	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	Low	 	 	High	 	 	Weighted
Average	 	 	 	 	 	 	
Investments in First Lien Debt	 	$	1,010,923	 	 	Discounted Cash Flow	 	Discount Rate	 	 	4.13	% 	 	 	16.25	% 	 	 	8.01	% 	 	 	 	 	 	
 	 	 	72,386	 	 	Consensus Pricing	 	Indicative Quotes	 	 	65.13	 	 	 	101.00	 	 	 	94.09	 	 	 	 	 	 	
 	 	 	2,245	 	 	Income Approach	 	Discount Rate	 	 	19.53	% 	 	 	19.53	% 	 	 	19.53	% 	 	 	 	 	 	
 	 	 	 	 	 	Market Approach	 	Comparable Multiple	 	 	4.06	x 	 	 	4.51	x 	 	 	4.28	x 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total First Lien Debt	 	 	1,085,554	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Second Lien Debt	 	 	156,836	 	 	Discounted Cash Flow	 	Discount Rate	 	 	7.93	% 	 	 	11.01	% 	 	 	9.65	% 	 	 	 	 	 	
 	 	 	2,949	 	 	Consensus Pricing	 	Indicative Quotes	 	 	100.75	 	 	 	100.75	 	 	 	100.75	 	 	 	 	 	 	
 	 	 	1,858	 	 	Income Approach	 	Discount Rate	 	 	10.68	% 	 	 	10.68	% 	 	 	10.68	% 	 	 	 	 	 	
 	 	 	 	 	 	Market Approach	 	Comparable Multiple	 	 	8.87	x 	 	 	9.60x	 	 	 	9.24x	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Second Lien Debt	 	 	161,643	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Structured Finance Obligations	 	 	2,776	 	 	Discounted Cash Flow	 	Discount Rate	 	 	22.00	% 	 	 	22.00	% 	 	 	22.00	% 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Default Rate	 	 	0.78	 	 	 	0.78	 	 	 	0.78	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Prepayment Rate	 	 	35.00	 	 	 	35.00	 	 	 	35.00	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Recovery Rate	 	 	65.00	 	 	 	65.00	 	 	 	65.00	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Structured Finance Obligations	 	 	2,776	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Equity	 	 	8,451	 	 	Income Approach	 	Discount Rate	 	 	8.37	% 	 	 	10.30	% 	 	 	9.13	% 	 	 	 	 	 	
 	 	 	 	 	 	Market Approach	 	Comparable Multiple	 	 	7.55	x 	 	 	14.52	x 	 	 	10.92	x 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Equity Investments	 	 	8,451	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Investment Fund—Mezzanine Loan	 	 	86,044	 	 	Income Approach	 	Repayment Rate	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investment Fund—Mezzanine Loan	 	 	86,044	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Level 3 Investments	 	$	1,344,468	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

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 	 	Fair Value as of
December 31,
2016	 	 	Valuation Techniques	 	Significant
Unobservable Inputs	 	Range	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	Low	 	 	High	 	 	Weighted
Average	 	 	 	 	 	 	
Investments in First Lien Debt	 	$	986,695	 	 	Discounted Cash Flow	 	Discount Rate	 	 	4.50	% 	 	 	16.33	% 	 	 	7.94	% 	 	 	 	 	 	
 	 	 	152,853	 	 	Consensus Pricing	 	Indicative Quotes	 	 	40.75	 	 	 	106.36	 	 	 	97.29	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total First Lien Debt	 	 	1,139,548	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Second Lien Debt	 	 	153,657	 	 	Discounted Cash Flow	 	Discount Rate	 	 	7.93	% 	 	 	11.05	% 	 	 	9.75	% 	 	 	 	 	 	
 	 	 	16,525	 	 	Consensus Pricing	 	Indicative Quotes	 	 	83.17	 	 	 	100.88	 	 	 	94.48	 	 	 	 	 	 	
 	 	 	1,682	 	 	Income Approach	 	Discount Rate	 	 	15.32	% 	 	 	15.32	% 	 	 	15.32	% 	 	 	 	 	 	
 	 	 	 	 	 	Market Approach	 	Comparable Multiple	 	 	8.01	x 	 	 	8.68	x 	 	 	8.34	x 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Second Lien Debt	 	 	171,864	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Structured Finance Obligations	 	 	2,761	 	 	Discounted Cash Flow	 	Discount Rate	 	 	22.00	% 	 	 	22.00	% 	 	 	22.00	% 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Default Rate	 	 	1.13	 	 	 	1.13	 	 	 	1.13	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Prepayment Rate	 	 	35.00	 	 	 	35.00	 	 	 	35.00	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	Recovery Rate	 	 	65.00	 	 	 	65.00	 	 	 	65.00	 	 	 	 	 	 	
 	 	 	2,455	 	 	Consensus Pricing	 	Indicative Quotes	 	 	0.10	 	 	 	48.79	 	 	 	48.50	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Structured Finance Obligations	 	 	5,216	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Equity	 	 	6,474	 	 	Income Approach	 	Discount Rate	 	 	8.68	% 	 	 	10.40	% 	 	 	9.41	% 	 	 	 	 	 	
 	 	 	 	 	 	Market Approach	 	Comparable Multiple	 	 	7.22	x 	 	 	13.71	x 	 	 	11.00	x 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Equity Investments	 	 	6,474	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Investment Fund—Mezzanine Loan	 	 	62,384	 	 	Income Approach	 	Repayment Rate	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	 	 	 	
Total Investment Fund—Mezzanine Loan	 	 	62,384	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Level 3 Investments	 	$	1,385,486	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation may result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in isolation would result in a significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result in a significantly lower fair value measurement.
 
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The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples would result in a significantly lower fair value measurement.
Financial instruments disclosed but not carried at fair value
The following table presents the carrying value and fair value of the Company’s secured borrowings disclosed but not carried at fair value as of March 31, 2017 and December 31, 2016:

 	  	March 31, 2017	 	  	December 31, 2016	 	
 	  	Carrying Value	 	  	Fair Value	 	  	Carrying Value	 	  	Fair Value	 	
Secured borrowings	  	$	390,608	 	  	$	390,608	 	  	$	421,885	 	  	$	421,885	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	390,608	 	  	$	390,608	 	  	$	421,885	 	  	$	421,885	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The carrying values of the secured borrowings approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s secured borrowings are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement.
The following table represents the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1 Notes disclosed but not carried at fair value as of March 31, 2017 and December 31, 2016:

 	  	March 31, 2017	 	  	December 31, 2016	 	
 	  	Carrying Value	 	  	Fair Value	 	  	Carrying Value	 	  	Fair Value	 	
Aaa/AAA Class A-1A Notes	  	$	160,000	 	  	$	160,110	 	  	$	160,000	 	  	$	160,072	 	
Aaa/AAA Class A-1B Notes	  	 	40,000	 	  	 	40,001	 	  	 	40,000	 	  	 	39,960	 	
Aaa/AAA Class A-1C Notes	  	 	27,000	 	  	 	27,030	 	  	 	27,000	 	  	 	26,951	 	
Aa2 Class A-2 Notes	  	 	46,000	 	  	 	46,027	 	  	 	46,000	 	  	 	45,784	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	273,000	 	  	$	273,168	 	  	$	273,000	 	  	$	272,767	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The fair value determination of the Company’s 2015-1 Notes was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement.
The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.
4. RELATED PARTY TRANSACTIONS
Investment Advisory Agreement
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The initial term of the Investment Advisory Agreement is two years from April 3, 2013 and, unless terminated earlier, the Investment Advisory Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent
 
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Directors. On March 20, 2017, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Investment Advisory Agreement for a one year period. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company. For providing these services, the Investment Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
Prior to a Qualified IPO, the base management fee is calculated and payable quarterly in arrears at an annual rate of 1.50% of the average daily gross assets of the Company for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired through the incurrence of debt from use of the SPV Credit Facility, Credit Facility and 2015-1 Notes (see Note 6, Borrowings, and Note 7, 2015-1 Notes). For purposes of this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment. Base management fees for any partial quarter are prorated. The Investment Adviser waived its right to receive one-third (0.50%) of the 1.50% base management fee prior to a Qualified IPO. The fee waiver will terminate if and when a Qualified IPO has been consummated. Any waived base management fees are not subject to recoupment by the Investment Adviser.
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income does not include, in the case of investments with a deferred interest feature (such as original issue discount (“OID”), debt instruments with pay-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
Prior to any Qualified IPO of the Company’s common stock, pre-incentive fee net investment income, expressed as a rate of return on the average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up” of 1.875% per quarter (7.50% annualized), as applicable. “Hurdle Calculation Value” means, on any given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or reinvested in the Company pursuant to a dividend reinvestment plan) from the beginning of the current quarter to such day minus (z) the aggregate amount of distributions (including share repurchases) made by the Company from the beginning of the current quarter to such day, but only to the extent such distributions were not declared and accounted for on the books and records in a previous quarter.
The Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
 
 	•	 	no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;	
 
 	•	 	100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.875% in any calendar	
 
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 	quarter (7.50% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.875%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 20% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.875% in any calendar quarter; and	
 
 	•	 	20% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.	
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may 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 on a cumulative basis and unrealized capital depreciation.
The Company will defer payment of any incentive fee otherwise earned by the Investment Adviser if, during the most recent four full calendar quarter periods (or, if less, the number of full calendar quarters completed since the initial drawdown of capital from the stockholders, “Initial Drawdown”) ending on or prior to the date such payment is to be made, the sum of (a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of net assets (defined as gross assets less indebtedness) at the beginning of such period, provided, that such percentage will be appropriately prorated during the four full calendar quarters immediately following the Initial Drawdown. These calculations are adjusted for any share issuances or repurchases. Any deferred incentive fees are carried over for payment in subsequent calculation periods. The Investment Adviser may earn an incentive fee under the Investment Advisory Agreement on the Company’s repurchase of debt issued by the Company at a gain.
For the three month periods ended March 31, 2017 and 2016, base management fees were $3,417 and $2,760, respectively (net of waiver of $1,708 and $1,380, respectively), incentive fees related to pre-incentive fee net investment income were $4,777 and $2,990, respectively, and there were no incentive fees related to realized capital gains. For the three month periods ended March 31, 2017 and 2016, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of March 31, 2017 and 2016, respectively. The accrual for any capital gains incentive fee under US GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.
As of March 31, 2017 and December 31, 2016, $11,764 and $8,157, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.
Administration Agreement
On April 3, 2013, the Company’s Board of Directors approved an administration agreement (the “Administration Agreement”) between the Company and the Administrator. Pursuant to the Administration
 
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Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Compliance Officer and Chief Financial Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.
The initial term of the Administration Agreement is two years from April 3, 2013 and, unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On March 20, 2017, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
For the three month periods ended March 31, 2017 and 2016, the Company incurred $173 and $148, respectively, in fees under the Administrative Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of March 31, 2017 and December 31, 2016, $115 and $137, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
Sub-Administration Agreements
On April 3, 2013, the Administrator entered into sub-administration agreements with Carlyle Employee Co. and CELF Advisors LLP (“CELF”) (the “Carlyle Sub-Administration Agreements”). Pursuant to the Carlyle Sub-Administration Agreements, Carlyle Employee Co. and CELF provide the Administrator with access to personnel.
On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreements, the “Sub-Administration Agreements”). On March 11, 2015, the Company’s Board of Directors, including a majority of the Independent Directors, approved an amendment to the State Street Sub-Administration Agreement. The initial term of the State Street Sub-Administration Agreement ends on April 1, 2017 and, unless terminated earlier, the State Street Sub-Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
For the three month periods ended March 31, 2017 and 2016, fees incurred in connection with the State Street Sub-Administration Agreement, which amounted to $160 and $140, respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. As of March 31, 2017 and December 31, 2016, $160 and $159, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.
 
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Placement Fees
On April 3, 2013, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (“TCG”), a licensed broker-dealer and an affiliate of the Investment Adviser, which may require stockholders to pay a placement fee to TCG for TCG’s services.
For the three month periods ended March 31, 2017 and 2016, TCG earned placement fees of $0 and $3, respectively, from the Company’s stockholders in connection with the issuance or sale of the Company’s common stock.
Board of Directors
The Company’s Board of Directors currently consists of five members, three of whom are Independent Directors. On April 3, 2013, the Board of Directors established an Audit Committee consisting of its Independent Directors. The Board of Directors also established a Pricing Committee of the Board of Directors (the “Pricing Committee”) and may establish additional committees in the future. For the three month periods ended March 31, 2017 and 2016, the Company incurred $103 and $120, respectively, in fees and expenses associated with its Independent Directors and the Audit Committee. As of March 31, 2017 and December 31, 2016, $0 was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities. As of March 31, 2017 and December 31, 2016, current directors had committed $821 in capital commitments to the Company.
Transactions
For the three month period ended March 31, 2017, the Company sold three investments to Credit Fund for proceeds of $30,743 and realized gains of $177. See Note 5, Middle Market Credit Fund, LLC, for further information about Credit Fund.
5. MIDDLE MARKET CREDIT FUND, LLC
Overview
On February 29, 2016, the Company and Credit Partners entered into the Limited Liability Company Agreement to co-manage Credit Fund, an unconsolidated Delaware limited liability company. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.
Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”), a Delaware limited liability company, was formed on April 5, 2016. Credit Fund Sub primarily invests in first lien loans of middle market companies. Credit Fund Sub is a wholly owned subsidiary of Credit Fund and is consolidated in Credit Fund’s consolidated financial statements commencing from the date of its formation. Credit Fund follows the same Internal Risk Rating System as the Company.
 
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Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle GMS Finance Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Administrative Agent”), pursuant to which the Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at our expense with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Administrative Agent in performing its obligations thereunder
Selected Financial Data
Since inception of Credit Fund and through March 31, 2017 and December 31, 2016, the Company and Credit Partners each made capital contributions of $1 in members’ equity and $45,500 and $35,000, respectively, in subordinated loans to Credit Fund. As of March 31, 2017 and December 31, 2016, Credit Fund had net borrowings of $86,044 and $62,384, respectively, in mezzanine loans under a revolving credit facility with the Company (the “Credit Fund Facility”). As of March 31, 2017 and December 31, 2016, Credit Fund had subordinated loans and members’ capital of $96,155 and $74,547, respectively. As of March 31, 2017 and December 31, 2016, the Company’s ownership interest in such subordinated loans and members’ capital was $48,077 and $37,273 respectively, and in such mezzanine loans was $86,044 and $62,384, respectively.
As of March 31, 2017 and December 31, 2016, Credit Fund held cash and cash equivalents totaling $10,533 and $6,103, respectively.
As of March 31, 2017 and December 31, 2016, Credit Fund had total investments at fair value of $558,694 and $437,829, respectively, which was comprised of first lien senior secured loans and second lien senior secured loans to 35 and 28 portfolio companies, respectively. As of March 31, 2017 and December 31, 2016, no loans in Credit Fund’s portfolio were on non-accrual status or contained PIK provisions. All investments in the portfolio were floating rate debt investments. The portfolio companies in Credit Fund are U.S. middle market companies in industries similar to those in which the Company may invest directly. Additionally, as of March 31, 2017 and December 31, 2016, Credit Fund had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $32,012 and $30,361, respectively.
Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of March 31, 2017 and December 31, 2016:

 	  	As of
March 31,
2017	 	 	As of
December 31,
2016	 	
Senior secured loans (1)	  	$	560,196	 	 	$	439,086	 	
Weighted average yields of senior secured loans based on amortized cost (2)	  	 	6.53	% 	 	 	6.47	% 	
Weighted average yields of senior secured loans based on fair value (2)	  	 	6.46	% 	 	 	6.41	% 	
Number of portfolio companies in Credit Fund	  	 	35	 	 	 	28	 	
Average amount per portfolio company (1)	  	$	16,006	 	 	$	15,682	 	
 
(1)	At par/principal amount.	
(2)	Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of March 31, 2017 and December 31, 2016. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.	
 
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Consolidated Schedule of Investments as of March 31, 2017 (unaudited)	 	
Investments (1)	 	Industry	 	 	Interest
Rate	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
First Lien Debt (99.42% of fair value)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Advanced Instruments,
LLC (2) (3) (4) (10) (11)	 	 
	Healthcare &
Pharmaceuticals	 
 	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	10/31/2022	 	 	$	12,000	 	 	$	11,867	 	 	$	11,972	 	
AM Conservation Holding
Corporation (2) (3) (4)	 	 	Energy: Electricity	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	10/31/2022	 	 	 	29,925	 	 	 	29,657	 	 	 	30,185	 	
Anaren, Inc. (2) (3) (4)	 	 	Telecommunications	 	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	2/18/2021	 	 	 	6,963	 	 	 	6,935	 	 	 	6,963	 	
Borchers, Inc. (2) (3) (4) (7) (10) (11)	 	 
	Chemicals,
Plastics & Rubber	 
 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	1/13/2024	 	 	 	8,142	 	 	 	8,096	 	 	 	8,170	 	
Datapipe, Inc. (2) (3) (4) (11)	 	 	Telecommunications	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	3/15/2019	 	 	 	9,725	 	 	 	9,650	 	 	 	9,753	 	
DBI Holding LLC  (2) (3) (4)	 	 	Business Services	 	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	8/1/2021	 	 	 	19,950	 	 	 	19,774	 	 	 	19,754	 	
Dent Wizard International
Corporation (2) (3) (4) (11)	 	 	Automotive	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	4/7/2020	 	 	 	15,000	 	 	 	14,861	 	 	 	14,984	 	
Dimora Brands, Inc. (fka TK USA
Enterprises, Inc.)  (2) (3) (4) (11)	 	 
	Construction &
Building	 
 	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	4/4/2023	 	 	 	19,800	 	 	 	19,539	 	 	 	19,743	 	
Diversitech Corporation (2) (4) (10)	 	 	Capital Equipment	 	 	 	P + 3.50%	 	 	 	11/19/2021	 	 	 	14,766	 	 	 	14,589	 	 	 	14,766	 	
DTI Holdco, Inc.  (2) (3) (4) (7)	 	 
	High Tech
Industries	 
 	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	9/30/2023	 	 	 	19,900	 	 	 	19,704	 	 	 	19,639	 	
EAG, Inc. (2) (3) (4) (11)	 	 	Business Services	 	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	7/28/2018	 	 	 	8,440	 	 	 	8,430	 	 	 	8,469	 	
EIP Merger Sub, LLC
(Evolve IP) (2) (3) (4) (8) (11)	 	 	Telecommunications	 	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	22,894	 	 	 	22,280	 	 	 	22,539	 	
EIP Merger Sub, LLC
(Evolve IP) (2) (3) (4) (9) (11)	 	 	Telecommunications	 	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	1,500	 	 	 	1,458	 	 	 	1,475	 	
Empower Payments Acquisitions,
Inc.  (2) (3) (7)	 	 

	Media: Advertising,
Printing &
Publishing	 

	L + 5.50%
(1.00% Floor)	 
 	 	 	11/30/2023	 	 	 	17,456	 	 	 	17,115	 	 	 	17,411	 	
Jensen Hughes, Inc. (2) (3) (4) (10) (11)	 	 	Utilities: Electric	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/4/2021	 	 	 	20,408	 	 	 	20,197	 	 	 	20,275	 	
Kestra Financial, Inc.  (2) (3) (4)	 	 

	Banking, Finance,
Insurance & Real
Estate	 

	L + 5.25%
(1.00% Floor)	 
 	 	 	6/24/2022	 	 	 	19,850	 	 	 	19,593	 	 	 	19,725	 	
MSHC, Inc. (2) (3) (4) (10)	 	 
	Construction &
Building	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/19/2021	 	 	 	13,543	 	 	 	13,440	 	 	 	13,423	 	
PAI Holdco, Inc.
(Parts Authority) (2) (3) (4)	 	 	Automotive	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	12/30/2022	 	 	 	9,925	 	 	 	9,864	 	 	 	9,925	 	
Paradigm Acquisition Corp.  (2) (3) (4)	 	 	Business Services	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	6/2/2022	 	 	 	11,970	 	 	 	11,874	 	 	 	11,970	 	
Pasternack Enterprises, Inc.
(Infinite RF) (2) (3) (4)	 	 	Capital Equipment	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/27/2022	 	 	 	11,910	 	 	 	11,817	 	 	 	11,885	 	
PSI Services LLC  (2) (3) (4) (7) (10)	 	 	Business Services	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	1/19/2023	 	 	 	29,623	 	 	 	29,052	 	 	 	29,333	 	
Q Holding Company  (2) (3) (4)	 	 	Automotive	 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/18/2021	 	 	 	13,929	 	 	 	13,798	 	 	 	13,958	 	
QW Holding Corporation
(Quala)  (2) (3) (4) (7) (10)	 	 
	Environmental
Industries	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	8/31/2022	 	 	 	10,983	 	 	 	10,447	 	 	 	11,121	 	
Ramundsen Public Sector,
LLC  (2) (3) (4)	 	 
	Sovereign & Public
Finance	 
 	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	2/1/2024	 	 	 	4,000	 	 	 	3,983	 	 	 	4,008	 	
RelaDyne Inc. (2) (3) (4) (10)	 	 	Wholesale	 	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	7/22/2022	 	 	 	26,228	 	 	 	25,834	 	 	 	25,978	 	
Restaurant Technologies,
Inc.  (2) (3) (4)	 	 	Retail	 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	11/23/2022	 	 	 	14,000	 	 	 	13,876	 	 	 	14,021	 	
Systems Maintenance Services
Holding, Inc.  (2) (3) (4) (11)	 	 
	High Tech
Industries	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	10/30/2023	 	 	 	24,439	 	 	 	24,266	 	 	 	24,561	 	
T2 Systems Canada, Inc. (2) (3) (4)	 	 
	Transportation:
Consumer	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	2,693	 	 	 	2,630	 	 	 	2,696	 	
 
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Consolidated Schedule of Investments as of March 31, 2017 (unaudited)	 	
Investments (1)	 	Industry	 	 	Interest
Rate	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
First Lien Debt (99.42% of fair value) (continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
T2 Systems, Inc. (2) (3) (4) (10)	 	 
	Transportation:
Consumer	 
 	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	$	15,262	 	 	$	14,865	 	 	$	15,282	 	
Teaching Strategies,
LLC  (2) (3) (4) (10)	 	 

	Media: Advertising,
Printing &
Publishing	 

	L + 4.75%
(1.00% Floor)	 
 	 	 	2/27/2023	 	 	 	18,100	 	 	 	17,915	 	 	 	17,980	 	
The Original Cakerie, Ltd.
(Canada)  (2) (3) (4) (10) (11)	 	 
	Beverage, Food &
Tobacco	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	6,992	 	 	 	6,932	 	 	 	6,992	 	
The Original Cakerie, Co.
(Canada)  (2) (3) (4) (11)	 	 
	Beverage, Food &
Tobacco	 
 	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	3,612	 	 	 	3,585	 	 	 	3,612	 	
U.S. Acute Care Solutions,
LLC  (2) (3) (4)	 	 
	Healthcare &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/15/2021	 	 	 	26,334	 	 	 	26,099	 	 	 	26,275	 	
U.S. Anesthesia Partners,
Inc.  (2) (3) (4) (11)	 	 
	Healthcare &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/31/2019	 	 	 	10,348	 	 	 	10,257	 	 	 	10,366	 	
Vantage Specialty Chemicals,
Inc.  (2) (3) (4) (11)	 	 
	Chemicals, Plastics
& Rubber	 
 	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	2/5/2021	 	 	 	17,865	 	 	 	17,748	 	 	 	17,775	 	
WIRB—Copernicus Group,
Inc.  (2) (3) (4)	 	 
	Healthcare &
Pharmaceuticals	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	8/12/2022	 	 	 	12,315	 	 	 	12,232	 	 	 	12,281	 	
Zest Holdings, LLC (2) (3) (4)	 	 
	Durable Consumer
Goods	 
 	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	8/16/2020	 	 	 	8,700	 	 	 	8,661	 	 	 	8,693	 	
Zywave, Inc. (2) (3) (4) (7) (10)	 	 
	High Tech
Industries	 
 	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	11/17/2022	 	 	 	17,456	 	 	 	17,279	 	 	 	17,494	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	550,199	 	 	$	555,452	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt (0.58% of fair value)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ramundsen Public Sector,
LLC  (2) (3) (4) (7)	 	 
	Sovereign & Public
Finance	 
 	 	 
	L + 8.50%
(1.00% Floor)	 
 	 	 	1/31/2025	 	 	$	200	 	 	$	198	 	 	$	200	 	
Vantage Specialty Chemicals,
Inc.  (2) (3) (4) (11)	 	 
	Chemicals, Plastics
& Rubber	 
 	 	 
	L + 8.75%
(1.00% Floor)	 
 	 	 	2/5/2022	 	 	 	2,000	 	 	 	1,969	 	 	 	1,992	 	
Zywave, Inc. (2) (3) (4)	 	 
	High Tech
Industries	 
 	 	 
	L + 9.00%
(1.00% Floor)	 
 	 	 	11/17/2023	 	 	 	1,050	 	 	 	1,035	 	 	 	1,050	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	3,202	 	 	$	3,242	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	553,401	 	 	$	558,694	 	

(1)	Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of March 31, 2017, the geographical composition of investments as a percentage of fair value was 1.90% in Canada and 98.10% in the United States.	
(2)	Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate (“P”)), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of March 31, 2017. As of March 31, 2017, all of Credit Fund’s LIBOR loans were indexed to the 90-day LIBOR rate at 1.15%, except for those loans as indicated in Note 11 below, and the U.S. Prime Rate loan was indexed at 4.00%.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.	
(5)	Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.	
(6)	Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements.	
(7)	Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub.	
(8)	Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.25% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this	
 
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 	loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.	
(9)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.91%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
(10)	As of March 31, 2017, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

First Lien Debt—unfunded delayed draw and revolving term
loans commitments	  	Type	 	  	Unused
Fee	 	 	Par/
Principal
Amount	 	  	Fair Value	 	
Advanced Instruments, LLC	  	 	Revolver	 	  	 	0.50	% 	 	$	1,333	 	  	$	(3	) 	
Borchers, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	1,858	 	  	 	5	 	
Diversitech Corporation	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	5,000	 	  	 	—  	 	
Jensen Hughes, Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,461	 	  	 	(8	) 	
Jensen Hughes, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,000	 	  	 	(11	) 	
MSHC, Inc.	  	 	Delayed Draw	 	  	 	1.50	% 	 	 	1,399	 	  	 	(11	) 	
PSI Services LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	377	 	  	 	(4	) 	
QW Holding Corporation (Quala)	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	4,762	 	  	 	33	 	
QW Holding Corporation (Quala)	  	 	Revolver	 	  	 	1.00	% 	 	 	4,234	 	  	 	29	 	
RelaDyne Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	135	 	  	 	(1	) 	
RelaDyne Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,433	 	  	 	(21	) 	
T2 Systems, Inc.	  	 	Revolver	 	  	 	1.00	% 	 	 	1,955	 	  	 	2	 	
Teaching Strategies, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,900	 	  	 	(11	) 	
The Original Cakerie, Ltd. (Canada)	  	 	Revolver	 	  	 	0.50	% 	 	 	1,665	 	  	 	—  	 	
Zywave, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	1,500	 	  	 	3	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	 	 	  	 	 	 	 	$	32,012	 	  	$	2	 	

(11)	As of March 31, 2017, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.98%.	
 
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Consolidated Schedule of Investments as of December 31, 2016	 	
Investments (1)	 	Industry	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
First Lien Debt (99.31% of fair value)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
AM Conservation Holding
Corporation  (2) (3) (4)	 	Energy: Electricity	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	10/31/2022	 	 	$	30,000	 	 	$	29,721	 	 	$	29,925	 	
Datapipe, Inc. (2) (3) (4) (11)	 	Telecommunications	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	3/15/2019	 	 	 	9,750	 	 	 	9,654	 	 	 	9,764	 	
Dimora Brands, Inc. (fka TK USA
Enterprises, Inc.) (2) (3) (4) (11)	 	Construction & Building	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	4/4/2023	 	 	 	19,850	 	 	 	19,580	 	 	 	19,723	 	
Diversitech Corporation  (2) (4) (10) (11)	 	Capital Equipment	 	 	P + 3.50%	 	 	 	11/19/2021	 	 	 	14,803	 	 	 	14,617	 	 	 	14,803	 	
DTI Holdco, Inc. (2) (3) (4) (7)	 	High Tech Industries	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	9/30/2023	 	 	 	19,950	 	 	 	19,751	 	 	 	19,651	 	
DYK Prime Acquisition LLC (2) (3) (4)	 	Chemicals, Plastics & Rubber	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	4/1/2022	 	 	 	5,775	 	 	 	5,735	 	 	 	5,775	 	
EAG, Inc. (2) (3) (4) (11)	 	Business Services	 	 
	L + 4.25%
(1.00% Floor)	 
 	 	 	7/28/2018	 	 	 	8,713	 	 	 	8,686	 	 	 	8,720	 	
EIP Merger Sub, LLC (Evolve
IP)  (2) (3) (4) (8)	 	Telecommunications	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	22,971	 	 	 	22,323	 	 	 	22,509	 	
EIP Merger Sub, LLC (Evolve
IP)  (2) (3) (4) (9)	 	Telecommunications	 	 
	L + 6.25%
(1.00% Floor)	 
 	 	 	6/7/2021	 	 	 	1,500	 	 	 	1,455	 	 	 	1,468	 	
Empower Payments Acquisitions,
Inc.  (2) (3) (7)	 	Media: Advertising, Printing & Publishing	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	11/30/2023	 	 	 	17,500	 	 	 	17,154	 	 	 	17,279	 	
Generation Brands Holdings,
Inc.  (2) (3) (4)	 	Durable Consumer Goods	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	6/10/2022	 	 	 	19,900	 	 	 	19,712	 	 	 	20,099	 	
Jensen Hughes, Inc. (2) (3) (4) (10)	 	Utilities: Electric	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/4/2021	 	 	 	20,409	 	 	 	20,188	 	 	 	20,327	 	
Kestra Financial, Inc. (2) (3) (4)	 	Banking, Finance, Insurance & Real Estate	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	6/24/2022	 	 	 	19,900	 	 	 	19,632	 	 	 	19,814	 	
MSHC, Inc. (2) (3) (4) (10)	 	Construction & Building	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/19/2021	 	 	 	13,177	 	 	 	13,062	 	 	 	13,003	 	
PAI Holdco, Inc. (Parts
Authority)  (2) (3) (4)	 	Automotive	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	12/30/2022	 	 	 	9,950	 	 	 	9,886	 	 	 	9,950	 	
Pasternack Enterprises, Inc. (Infinite
RF)  (2) (3) (4)	 	Capital Equipment	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/27/2022	 	 	 	11,941	 	 	 	11,844	 	 	 	11,941	 	
Q Holding Company (2) (3) (4)	 	Automotive	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/18/2021	 	 	 	13,964	 	 	 	13,828	 	 	 	13,941	 	
QW Holding Corporation
(Quala)  (2) (3) (4) (7) (10)	 	Environmental Industries	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	8/31/2022	 	 	 	8,975	 	 	 	8,413	 	 	 	9,030	 	
Restaurant Technologies, Inc. (2) (3) (4)	 	Retail	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	11/23/2022	 	 	 	23,514	 	 	 	23,117	 	 	 	23,443	 	
RelaDyne Inc. (2) (3) (4) (10)	 	Wholesale	 	 
	L + 5.25%
(1.00% Floor)	 
 	 	 	7/22/2022	 	 	 	14,000	 	 	 	13,871	 	 	 	13,969	 	
Systems Maintenance Services
Holding, Inc.  (2) (3) (4)	 	High Tech Industries	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	10/30/2023	 	 	 	12,000	 	 	 	11,885	 	 	 	12,001	 	
T2 Systems Canada, Inc.  (2) (3) (4) (11)	 	Transportation: Consumer	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	2,700	 	 	 	2,635	 	 	 	2,727	 	
T2 Systems, Inc. (2) (3) (4) (10) (11)	 	Transportation: Consumer	 	 
	L + 6.75%
(1.00% Floor)	 
 	 	 	9/28/2022	 	 	 	15,300	 	 	 	14,888	 	 	 	15,473	 	
The Original Cakerie, Ltd.
(Canada)  (2) (3) (4) (10)	 	Beverage, Food & Tobacco	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	7,009	 	 	 	6,946	 	 	 	7,009	 	
The Original Cakerie, Co.
(Canada)  (2) (3) (4)	 	Beverage, Food & Tobacco	 	 
	L + 5.50%
(1.00% Floor)	 
 	 	 	7/20/2021	 	 	 	3,621	 	 	 	3,591	 	 	 	3,621	 	
U.S. Acute Care Solutions, LLC  (2) (3) (4)	 	Health & Pharmaceuticals	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	5/15/2021	 	 	 	26,400	 	 	 	26,154	 	 	 	26,336	 	
U.S. Anesthesia Partners, Inc.  (2) (3) (4)	 	Health & Pharmaceuticals	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	12/31/2019	 	 	 	10,374	 	 	 	10,275	 	 	 	10,362	 	
Vantage Specialty Chemicals,
Inc.  (2) (3) (4) (11)	 	Chemicals, Plastics & Rubber	 	 
	L + 4.50%
(1.00% Floor)	 
 	 	 	2/5/2021	 	 	 	17,910	 	 	 	17,786	 	 	 	17,903	 	
 
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Consolidated Schedule of Investments as of December 31, 2016	 	
Investments (1)	 	Industry	 	Interest
Rate  (2)	 	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (5)	 	 	Fair
Value  (6)	 	
First Lien Debt (99.31% of fair value) (continued)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
WIRB—Copernicus Group, Inc.  (2) (3) (4)	 	Health & Pharmaceuticals	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	8/12/2022	 	 	$	7,980	 	 	$	7,916	 	 	$	8,050	 	
Zest Holdings, LLC (2) (3) (4)	 	Durable Consumer Goods	 	 
	L + 4.75%
(1.00% Floor)	 
 	 	 	8/16/2020	 	 	 	8,700	 	 	 	8,658	 	 	 	8,749	 	
Zywave, Inc. (2) (3) (4) (7) (10)	 	High Tech Industries	 	 
	L + 5.00%
(1.00% Floor)	 
 	 	 	11/17/2022	 	 	 	17,500	 	 	 	17,315	 	 	 	17,434	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	430,278	 	 	$	434,799	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt (0.69% of fair value)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Vantage Specialty Chemicals,
Inc.  (2) (3) (4) (11)	 	Chemicals, Plastics & Rubber	 	 
	L + 8.75%
(1.00% Floor)	 
 	 	 	2/5/2022	 	 	$	2,000	 	 	$	1,960	 	 	$	1,987	 	
Zywave, Inc. (2) (3) (4)	 	High Tech Industries	 	 
	L + 9.00%
(1.00% Floor)	 
 	 	 	11/17/2023	 	 	 	1,050	 	 	 	1,034	 	 	 	1,043	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	2,994	 	 	$	3,030	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	433,272	 	 	$	437,829	 	

(1)	Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2016, the geographical composition of investments as a percentage of fair value was 2.43% in Canada and 97.57% in the United States.	
(2)	Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate (“P”)), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of Credit Fund’s LIBOR loans were indexed to the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 11 below, and the U.S. Prime Rate loan was indexed at 3.75%.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.	
(5)	Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.	
(6)	Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, which is substantially similar to the valuation policy of the Company provided in “—Critical Accounting Policies—Fair Value Measurements.”	
(7)	Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub.	
(8)	Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.25% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.	
(9)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.84%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
 
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(10)	As of December 31, 2016, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

First Lien Debt—unfunded delayed draw and revolving term
loans commitments	  	Type	 	  	Unused Fee	 	 	Par/
Principal
Amount	 	  	Fair
Value	 	
Diversitech Corporation	  	 	Delayed Draw	 	  	 	1.00	% 	 	$	5,000	 	  	$	—  	 	
Jensen Hughes, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,000	 	  	 	(7	) 	
Jensen Hughes, Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,461	 	  	 	(5	) 	
MSHC, Inc.	  	 	Delayed Draw	 	  	 	1.50	% 	 	 	1,790	 	  	 	(21	) 	
QW Holding Corporation (Quala)	  	 	Revolver	 	  	 	1.00	% 	 	 	5,086	 	  	 	14	 	
QW Holding Corporation (Quala)	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	5,918	 	  	 	17	 	
RelaDyne Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,162	 	  	 	(6	) 	
RelaDyne Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,824	 	  	 	(5	) 	
T2 Systems, Inc.	  	 	Revolver	 	  	 	1.00	% 	 	 	1,955	 	  	 	20	 	
The Original Cakerie, Ltd. (Canada)	  	 	Revolver	 	  	 	0.50	% 	 	 	1,665	 	  	 	—  	 	
Zywave, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	1,500	 	  	 	(5	) 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	 	 	  	 	 	 	 	$	30,361	 	  	$	2	 	

(11)	As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.	
Below is certain summarized consolidated financial information for Credit Fund as of March 31, 2017 and December 31, 2016, respectively. Credit Fund commenced operations in May 2016.

 	  	March 31, 2017	 	  	December 31, 2016	 	
 	  	(unaudited)	 	  	 	 	
Selected Consolidated Balance Sheet Information	  	 	 	 	  	 	 	 	
ASSETS	  	 	 	 	  	 	 	 	
Investments, at fair value (amortized cost of $553,401 and $433,272, respectively)	  	$	558,694	 	  	$	437,829	 	
Cash and other assets	  	 	15,088	 	  	 	11,326	 	
 	  	 	 	 	  	 	 	 	
Total assets	  	$	573,782	 	  	$	449,155	 	
 	  	 	 	 	  	 	 	 	
LIABILITIES AND MEMBERS’ EQUITY	  	 	 	 	  	 	 	 	
Secured borrowings	  	$	367,375	 	  	$	248,540	 	
Mezzanine loans	  	 	86,044	 	  	 	62,384	 	
Other liabilities	  	 	24,208	 	  	 	63,684	 	
Subordinated loans and members’ equity	  	 	96,155	 	  	 	74,547	 	
 	  	 	 	 	  	 	 	 	
Liabilities and members’ equity	  	$	573,782	 	  	$	449,155	 	

 	 	 	 	 	
 	  	For the three
month period ended
March 31, 2017	 	
 	  	(unaudited)	 	
Selected Consolidated Statement of Operations Information:	  	 	 	 	
Total investment income	  	$	8,182	 	
 	  	 	 	 	
Expenses	  	 	 	 	
Interest and credit facility expenses	  	 	5,473	 	
Other expenses	  	 	318	 	
 	  	 	 	 	
Total expenses	  	 	5,791	 	
 	  	 	 	 	
Net investment income (loss)	  	 	2,391	 	
 	  	 	 	 	
Net realized gain (loss) on investments	  	 	—  	 	
Net change in unrealized appreciation (depreciation) on investments	  	 	737	 	
 	  	 	 	 	
Net increase (decrease) resulting from operations	  	$	3,128	 	

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Debt
Credit Fund Facility
On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $100,000. The maturity date of the Credit Fund Facility is June 24, 2017. Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.50%.
During the three month period ended March 31, 2017, there were mezzanine loan borrowings of $45,660 and repayments of $22,000 under the Credit Fund Facility. As of March 31, 2017 and December 31, 2016, there were $86,044 and $62,384 in mezzanine loans outstanding, respectively.
As of March 31, 2017, Credit Fund was in compliance with all covenants and other requirements of the Credit Fund Facility.
Credit Fund Sub Facility
On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $450,000, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $1,400,000. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub and the Company’s and Credit Partners’ unfunded capital commitments. The maturity date of the Credit Fund Sub Facility is June 24, 2022. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.50%.
During the three month period ended March 31, 2017, there were secured borrowings of $118,835 under the Credit Fund Sub Facility. As of March 31, 2017 and December 31, 2016, there was $367,375 and $248,540 in secured borrowings outstanding, respectively.
As of March 31, 2017, Credit Fund Sub was in compliance with all covenants and other requirements of the Credit Fund Sub Facility.
6. BORROWINGS
In accordance with the Investment Company Act, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 200% after such borrowing. As of March 31, 2017 and December 31, 2016, asset coverage was 215.03%, and 209.97%, respectively. During the three month periods ended March 31, 2017 and 2016, there were secured borrowings of $93,000 and $111,000, respectively, under the SPV Credit Facility and Credit Facility and repayments of $124,277 and $66,000, respectively, under the SPV Credit Facility and Credit Facility. As of March 31, 2017 and December 31, 2016, there was $390,608 and $421,885, respectively, in secured borrowings outstanding.
SPV Credit Facility
The SPV closed on May 24, 2013 on the SPV Credit Facility, which was subsequently amended on June 30, 2014, June 19, 2015 and June 9, 2016. The SPV Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $400,000 (the borrowing base as calculated pursuant to the terms of the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit
 
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Facility has a revolving period through May 23, 2019 and a maturity date of May 24, 2021. Borrowings under the SPV Credit Facility bear interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.00% per year through May 23, 2018, with a pre-determined future interest rate increase of 0.50% during the final year of the revolving period and pre-determined future interest rate increases of 0.875%-1.75% over the two years following the end of the revolving period. The SPV is also required to pay an undrawn commitment fee of between 0.25% and 0.75% per year depending on the drawings under the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The lenders have a first lien security interest on substantially all of the assets of the SPV.
As part of the SPV Credit Facility, the SPV is subject to limitations as to how borrowed funds may be used and the types of loans that are eligible to be acquired by the SPV including, but not limited to, restrictions on sector and geographic concentrations, loan size, payment frequency, tenor and minimum investment ratings (or estimated ratings). In addition, borrowed funds are intended to be used primarily to purchase first lien loan assets, and the SPV is limited in its ability to purchase certain other assets (including, but not limited to, second lien loans, covenant-lite loans, revolving and delayed draw loans and discount loans) and other assets are not permitted to be purchased (including, but not limited to paid-in-kind loans and structured finance obligations). The SPV Credit Facility has certain requirements relating to interest coverage, collateral quality and portfolio performance, including limitations on delinquencies and charge offs, certain violations of which could result in the immediate acceleration of the amounts due under the SPV Credit Facility. The SPV Credit Facility is also subject to a borrowing base that applies different advance rates to assets held by the SPV based generally on the fair market value of such assets. Under certain circumstances as set forth in the SPV Credit Facility, the Company could be obliged to repurchase loans from the SPV.
As of March 31, 2017 and 2016, the SPV was in compliance with all covenants and other requirements of the SPV Credit Facility.
Credit Facility
The Company closed on March 21, 2014 on the Credit Facility, which was subsequently amended on January 8, 2015, May 25, 2016 and March 22, 2017. The maximum principal amount of the Credit Facility is $283,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $550,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either LIBOR plus an applicable spread of 2.25%, or an “alternative base rate” (which is the highest of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the “alternative base rate” at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on March 21, 2021 and the Credit Facility will mature on March 21, 2022. During the period from March 21, 2021 to March 21, 2022, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
 
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Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company and the Company’s unfunded investor equity capital commitments (provided that the amount of unfunded capital commitments ultimately available to the lenders is limited to $100,000). The pledge of unfunded investor equity capital commitments was subject to release once $100,000 of incremental capital had been called and received by the Company subsequent to January 8, 2015. The pledge of unfunded investor equity capital commitments had been released as of March 31, 2017. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
As of March 31, 2017 and December 31, 2016, the Company was in compliance with all covenants and other requirements of the Credit Facility.
Summary of Facilities
The Facilities consisted of the following as of March 31, 2017 and December 31, 2016:

 	  	March 31, 2017	 	
 	  	Total Facility	 	  	Borrowings
Outstanding	 	  	Unused Portion (1)	 	  	Amount
Available  (2)	 	
SPV Credit Facility	  	$	400,000	 	  	$	201,108	 	  	$	198,892	 	  	$	10,476	 	
Credit Facility	  	 	283,000	 	  	 	189,500	 	  	 	93,500	 	  	 	93,500	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	683,000	 	  	$	390,608	 	  	$	292,392	 	  	$	103,976	 	

 	  	December 31, 2016	 	
 	  	Total Facility	 	  	Borrowings
Outstanding	 	  	Unused Portion (1)	 	  	Amount
Available  (2)	 	
SPV Credit Facility	  	$	400,000	 	  	$	252,885	 	  	$	147,115	 	  	$	5,988	 	
Credit Facility	  	 	220,000	 	  	 	169,000	 	  	 	51,000	 	  	 	51,000	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	620,000	 	  	$	421,885	 	  	$	198,115	 	  	$	56,988	 	

(1)	The unused portion is the amount upon which commitment fees are based.	
(2)	Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.	
As of March 31, 2017 and December 31, 2016, $1,666 and $1,667, respectively, of interest expense, $274 and $203, respectively, of unused commitment fees and $23 and $23, respectively, of other fees were included in interest and credit facility fees payable. For the three month periods ended March 31, 2017 and 2016, the weighted average interest rate was 3.07% and 2.60%, respectively, and average principal debt outstanding was $376,532 and $257,170, respectively. As of March 31, 2017 and December 31, 2016, the weighted average interest rate was 3.22% and 2.92%, respectively, based on floating LIBOR rates.
 
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For the three month periods ended March 31, 2017 and 2016, the components of interest expense and credit facility fees on the Facilities were as follows:

 	  	For the three month periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Interest expense	  	$	2,892	 	  	$	1,698	 	
Facility unused commitment fee	  	 	292	 	  	 	361	 	
Amortization of deferred financing costs	  	 	181	 	  	 	213	 	
Other fees	  	 	30	 	  	 	25	 	
 	  	 	 	 	  	 	 	 	
Total interest expense and credit facility fees	  	$	3,395	 	  	$	2,297	 	
 	  	 	 	 	  	 	 	 	
Cash paid for interest expense	  	$	2,893	 	  	$	1,520	 	
7. 2015-1 Notes
On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly-owned and consolidated subsidiary of the Company, and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $160 million of Aaa/AAA Class A-1A Notes which bear interest at the three-month London Interbank Offered Rate (“LIBOR”) plus 1.85%; $40 million of Aaa/AAA Class A-1B Notes which bear interest at the three-month LIBOR plus 1.75% for the first 24 months and the three-month LIBOR plus 2.05% thereafter; $27 million of Aaa/AAA Class A-1C Notes which bear interest at 3.75%; and $46 million of Aa2 Class A-2 Notes which bear interest at the three month LIBOR plus 2.70%. The 2015-1 Notes were issued at par and are scheduled to mature on July 15, 2027. The Company received 100% of the preferred interests (the “Preferred Interests”) issued by the 2015-1 Issuer on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the Issuer of the initial closing date loan portfolio. The Preferred Interests do not bear interest and had a nominal value of $125.9 million at closing. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in the March 31, 2017 consolidated financial statements. The Preferred Interests were eliminated in consolidation.
On the closing date of the 2015-1 Debt Securitization, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1 Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1 Notes, the Company made customary representations, warranties and covenants in the purchase agreement.
During the reinvestment period, pursuant to the indenture governing the 2015-1 Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager of the 2015-1 Issuer and in accordance with the Company’s investment strategy.
The Investment Adviser serves as collateral manager to the 2015-1 Issuer under a collateral management agreement (the “Collateral Management Agreement”). Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and
 
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incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the three month periods ended March 31, 2017 and 2016. Any such waived fees may not be recaptured by the Investment Adviser.
Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization, the Company has agreed to hold on an ongoing basis Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of March 31, 2017, the Company was in compliance with its undertaking.
The 2015-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2015-1 Issuer.
As of March 31, 2017, there were 59 first lien and second lien senior secured loans with a total fair value of approximately $389,003 securing the 2015-1 Notes. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1 Notes.
For the three month periods ended March 31, 2017 and 2016, the effective annualized weighted average interest rate, which includes amortization of debt issuance costs on the 2015-1 Notes, was 3.18% and 2.79%, respectively, based on floating LIBOR rates.
For the three month periods ended March 31, 2017 and 2016, the components of interest expense on the 2015-1 Notes were as follows:

 	  	For the three month periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Interest expense	  	$	2,092	 	  	$	1,850	 	
Amortization of deferred financing costs	  	 	50	 	  	 	51	 	
 	  	 	 	 	  	 	 	 	
Total interest expense and credit facility fees	  	$	2,142	 	  	$	1,901	 	
 	  	 	 	 	  	 	 	 	
Cash paid for interest expense	  	$	2,059	 	  	$	1,707	 	
8. COMMITMENTS AND CONTINGENCIES
A summary of significant contractual payment obligations was as follows as of March 31, 2017 and December 31, 2016:

 	  	SPV Credit Facility and Credit Facility	 	  	2015-1 Notes	 	
Payment Due by Period	  	March 31, 2017	 	  	December 31, 2016	 	  	March 31, 2017	 	  	December 31, 2016	 	
Less than 1 Year	  	$	—  	 	  	$	—  	 	  	$	—  	 	  	$	—  	 	
1-3 Years	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
3-5 Years	  	 	390,608	 	  	 	421,885	 	  	 	—  	 	  	 	—  	 	
More than 5 Years	  	 	—  	 	  	 	—  	 	  	 	273,000	 	  	 	273,000	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	390,608	 	  	$	421,885	 	  	$	273,000	 	  	$	273,000	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the
 
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Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial statements as of March 31, 2017 and December 31, 2016 for any such exposure.
As of March 31, 2017 and December 31, 2016, the Company had $1,274,174 and $1,222,358, respectively, in total capital commitments from stockholders, of which $473,514 and $421,698, respectively, was unfunded. As of March 31, 2017 and December 31, 2016, current directors had committed $821 in capital commitments to the Company.
The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:

 	  	Par Value as of	 	
 	  	March 31, 2017	 	  	December 31, 2016	 	
Unfunded delayed draw commitments	  	$	44,541	 	  	$	35,704	 	
Unfunded revolving term loan commitments	  	 	26,517	 	  	 	24,063	 	
 	  	 	 	 	  	 	 	 	
Total unfunded commitments	  	$	71,058	 	  	$	59,767	 	
 	  	 	 	 	  	 	 	 	
As of March 31, 2017, the Company had remaining commitments to fund, from time to time, capital to Credit Fund of up to $354,499. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. As of March 31, 2017, the Company had remaining commitments to fund, from time to time, mezzanine loans to Credit Fund of up to $13,956, of which $10,438 was available for borrowing based on the computation of collateral to support the borrowings.
9. NET ASSETS
The Company has the authority to issue 200,000,000 shares of common stock, $0.01 per share par value.
During the three month period ended March 31, 2017, the Company issued 5,837 shares for $108 from the reinvestment of dividends. The following table summarizes capital activity during the three month period ended March 31, 2017:

 	 	 
Common Stock	 	 	Capital
in
Excess
of Par
Value	 	 	Offering
Costs	 	 	Accumulated Net
Investment
Income (Loss)	 	 	Accumulated
Net Realized
Gain (Loss)
on
Investments	 	 	Accumulated Net
Unrealized
Appreciation
(Depreciation) on
Investments	 	 	Total
Net
Assets	 	 	
 	 	Shares	 	 	Amount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, beginning of period	 	 	41,702,318	 	 	$	417	 	 	$	799,580	 	 	$	(74	) 	 	$	(3,207	) 	 	$	(25,357	) 	 	$	(7,222	) 	 	$	764,137	 	 	 	 	 	
Reinvestment of dividends	 	 	5,837	 	 	 	—  	 	 	 	108	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	108	 	 	 	 	 	
Net investment income (loss)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	19,107	 	 	 	—  	 	 	 	—  	 	 	 	19,107	 	 	 	 	 	
Net realized gain (loss) on investments	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(7,694	) 	 	 	—  	 	 	 	(7,694	) 	 	 	 	 	
Net change in unrealized appreciation (depreciation) on investments	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	4,760	 	 	 	4,760	 	 	 	 	 	
Dividends declared	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(17,100	) 	 	 	—  	 	 	 	—  	 	 	 	(17,100	) 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of period	 	 	41,708,155	 	 	$	417	 	 	$	799,688	 	 	$	(74	) 	 	$	(1,200	) 	 	$	(33,051	) 	 	$	(2,462	) 	 	$	763,318	 	 	 	 	 	

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During the three month period ended March 31, 2016, the Company issued 1,819,066 shares for $33,074 including reinvestment of dividends. The following table summarizes capital activity during the three month period ended March 31, 2016:

 	 	 
Common Stock	 	 	Capital
in Excess
of Par
Value	 	 	Offering
Costs	 	 	Accumulated
Net Investment
Income (Loss)	 	 	Accumulated
Net Realized
Gain (Loss)
on
Investments	 	 	Accumulated Net
Unrealized
Appreciation
(Depreciation) on
Investments	 	 	Total
Net
Assets	 	 	
 	 	Shares	 	 	Amount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, beginning of period	 	 	31,524,083	 	 	$	315	 	 	$	613,944	 	 	$	(74	) 	 	$	(12,994	) 	 	$	(2,411	) 	 	$	(27,054	) 	 	$	571,726	 	 	 	 	 	
Common stock issued	 	 	1,815,181	 	 	 	18	 	 	 	32,982	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	33,000	 	 	 	 	 	
Reinvestment of dividends	 	 	3,885	 	 	 	—  	 	 	 	74	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	74	 	 	 	 	 	
Net investment income (loss)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	11,960	 	 	 	—  	 	 	 	—  	 	 	 	11,960	 	 	 	 	 	
Net realized gain (loss) on investments	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(3,577	) 	 	 	—  	 	 	 	(3,577	) 	 	 	 	 	
Net change in unrealized appreciation (depreciation) on investments	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(11,091	) 	 	 	(11,091	) 	 	 	 	 	
Dividends declared	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(13,337	) 	 	 	—  	 	 	 	—  	 	 	 	(13,337	) 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of period	 	 	33,343,149	 	 	$	333	 	 	$	647,000	 	 	$	(74	) 	 	$	(14,371	) 	 	$	(5,988	) 	 	$	(38,145	) 	 	$	588,755	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The following table summarizes total shares issued and proceeds received related to capital subscriptions for the Company’s common stock and reinvestment of dividends during the three month period ended March 31, 2017:

 	  	Shares Issued	 	  	Proceeds Received	 	
January 24, 2017*	  	 	5,837	 	  	$	108	 	
 	  	 	 	 	  	 	 	 	
Total	  	 	5,837	 	  	$	108	 	

* 	Represents shares issued upon the reinvestment of dividends	
The following table summarizes total shares issued and proceeds received related to capital subscriptions for the Company’s common stock and reinvestment of dividends during the three month period ended March 31, 2016:

 	  	Shares Issued	 	  	Proceeds Received	 	
January 22, 2016*	  	 	3,885	 	  	$	74	 	
March 11, 2016	  	 	1,815,181	 	  	 	33,000	 	
 	  	 	 	 	  	 	 	 	
Total	  	 	1,819,066	 	  	$	33,074	 	

*	Represents shares issued upon the reinvestment of dividends	
Subscribed but unissued shares are presented in equity with a deduction of subscriptions receivable until cash is received for a subscription. There were no subscribed but unissued shares as of March 31, 2017 and December 31, 2016.
Subscription transactions during the three month periods ended March 31, 2017 and 2016 were executed at an offering price at a premium to net asset value due to the requirement to use prior quarter net asset value as offering price unless it would result in the Company selling shares of its common stock at a price below the current net asset value and also in order to effect a reallocation of organizational costs to subsequent investors. Such subscription transactions increased net asset value by $0.00 per share and $0.01 per share, respectively, for the three month periods ended March 31, 2017 and 2016, respectively.
 
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The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per common share were calculated by dividing net increase (decrease) in net assets resulting from operations attributable to the Company by the weighted-average number of common shares outstanding for the period.
Basic and diluted earnings per common share were as follows:

 	  	For the three month periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Net increase (decrease) in net assets resulting from operations	  	$	16,173	 	  	$	(2,708	) 	
Weighted-average common shares outstanding	  	 	41,706,598	 	  	 	31,945,959	 	
 	  	 	 	 	  	 	 	 	
Basic and diluted earnings per common share	  	$	0.39	 	  	$	(0.08	) 	
 	  	 	 	 	  	 	 	 	
The following table summarizes the Company’s dividends declared and payable since inception through March 31, 2017:

Date Declared	  	Record Date	  	Payment Date	  	Per Share
Amount	 	 	Total
Amount	 	
March 13, 2014	  	March 31, 2014	  	April 14, 2014	  	$	0.19	 	 	$	2,449	 	
June 26, 2014	  	June 30, 2014	  	July 14, 2014	  	$	0.27	 	 	$	3,481	 	
September 12, 2014	  	September 18, 2014	  	October 9, 2014	  	$	0.44	 	 	$	5,956	 	
December 19, 2014	  	December 29, 2014	  	January 26, 2015	  	$	0.35	 	 	$	6,276	 	
March 11, 2015	  	March 13, 2015	  	April 17, 2015	  	$	0.37	 	 	$	7,833	 	
June 24, 2015	  	June 30, 2015	  	July 22, 2015	  	$	0.37	 	 	$	9,902	 	
September 24, 2015	  	September 24, 2015	  	October 22, 2015	  	$	0.42	 	 	$	11,670	 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.40	 	 	$	12,610	 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.18	 (1) 	 	$	5,674	 	
March 10, 2016	  	March 14, 2016	  	April 22, 2016	  	$	0.40	 	 	$	13,337	 	
June 8, 2016	  	June 8, 2016	  	July 22, 2016	  	$	0.40	 	 	$	13,943	 	
September 28, 2016	  	September 28, 2016	  	October 24, 2016	  	$	0.40	 	 	$	15,917	 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.41	 	 	$	17,098	 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.07	 (1) 	 	$	2,919	 	
March 20, 2017	  	March 20, 2017	  	April 24, 2017	  	$	0.41	 	 	$	17,100	 	
 
(1)	Represents a special dividend.	
 
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10. CONSOLIDATED FINANCIAL HIGHLIGHTS
The following is a schedule of consolidated financial highlights for the three month periods ended March 31, 2017 and 2016:

 	  	For the three month periods ended	 	
 	  	March 31, 2017	 	 	March 31, 2016	 	
Per Share Data:	  	 	 	 	 	 	 	 	
Net asset value per share, beginning of period	  	$	18.32	 	 	$	18.14	 	
Net investment income (loss) (1)	  	 	0.46	 	 	 	0.37	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	 	(0.07	) 	 	 	(0.46	) 	
 	  	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	 	0.39	 	 	 	(0.09	) 	
 	  	 	 	 	 	 	 	 	
Dividends declared (2)	  	 	(0.41	) 	 	 	(0.40	) 	
Effect of subscription offering price (3)	  	 	0.00	 	 	 	0.01	 	
 	  	 	 	 	 	 	 	 	
Net asset value per share, end of period	  	$	18.30	 	 	$	17.66	 	
 	  	 	 	 	 	 	 	 	
Number of shares outstanding, end of period	  	 	41,708,155	 	 	 	33,343,149	 	
Total return (4)	  	 	2.14	% 	 	 	(0.44	)% 	
Net assets, end of period	  	$	763,318	 	 	$	588,755	 	
Ratio to average net assets (5):	  	 	 	 	 	 	 	 	
Expenses net of waiver, before incentive fees	  	 	1.32	% 	 	 	1.42	% 	
Expenses net of waiver, after incentive fees	  	 	1.94	% 	 	 	1.94	% 	
Expenses gross of waiver, after incentive fees	  	 	2.16	% 	 	 	2.18	% 	
Net investment income (loss) (6)	  	 	2.48	% 	 	 	2.08	% 	
Interest expense and credit facility fees	  	 	0.72	% 	 	 	0.73	% 	
Ratios/Supplemental Data:	  	 	 	 	 	 	 	 	
Asset coverage, end of period	  	 	215.03	% 	 	 	206.60	% 	
Portfolio turnover	  	 	10.20	% 	 	 	2.57	% 	
Total committed capital, end of period	  	$	1,274,174	 	 	$	1,188,640	 	
Ratio of total contributed capital to total committed capital, end of period	  	 	62.84	% 	 	 	54.53	% 	
Weighted-average shares outstanding	  	 	41,706,598	 	 	 	31,945,959	 	
 
(1)	Net investment income (loss) per share was calculated as net investment income (loss) for the period divided by the weighted average number of shares outstanding for the period.	
(2)	Dividends declared per share was calculated as the sum of dividends declared during the period divided by the number of shares outstanding at each respective quarter-end date (refer to Note 9).	
(3)	Increase is due to offering price of subscriptions during the period (refer to Note 9).	
(4)	Total return (not annualized) is based on the change in net asset value per share during the period plus the declared dividends, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the period. Total return for the three month periods ended March 31, 2017 and 2016 is inclusive of $0.00 and $0.01, respectively, per share increase in net asset value for the periods related to the offering price of subscriptions. Excluding the effects of the higher offering price of subscriptions, total return (not annualized) would have been 2.14% and (0.50%), respectively (refer to Note 9).	
(5)	These ratios to average net assets have not been annualized.	
(6)	The net investment income ratio is net of the waiver of base management fees.	
11. LITIGATION
The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated
 
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financial statements. As of March 31, 2017 and December 31, 2016, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.
In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements.
12. TAX
The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes,  as of March 31, 2017 and December 31, 2016.
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of March 31, 2017 and December 31, 2016, the Company had filed tax returns and therefore is subject to examination.
The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate. The estimated tax character of dividends declared for the three month periods ended March 31, 2017 and 2016 was as follows:

 	  	For the three month periods ended	 	
 	  	March 31, 2017	 	  	March 31, 2016	 	
Ordinary income	  	$	17,100	 	  	$	13,337	 	
Tax return of capital	  	$	—  	 	  	$	—  	 	
13. SUBSEQUENT EVENTS
Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.
Subsequent to March 31, 2017, the Company borrowed $45,000 under the Credit Facility and SPV Credit Facility to fund investment acquisitions. The Company also voluntarily repaid $23,504 under the Credit Facility and SPV Credit Facility.
On April 6, 2017, Credit Fund issued a capital call and delivered capital drawdown notices of $4,000 to each of the Company and Credit Partners. Proceeds from the capital call were due, and the related issuance of $8,000 of subordinated loans occurred, on April 13, 2017.
On May 5, 2017, the Company issued a capital call and delivered capital drawdown notices totaling $39,488. Proceeds from the capital call and the related issuance of 2,141,417 shares is expected on or about May 19, 2017.
On May 3, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with NF Investment Corp. (“NFIC”), a Maryland corporation and an externally managed, non-diversified closed-end investment company that has elected to be regulated as a BDC under the Investment Company Act. Both the Company and NFIC are managed by the Investment Adviser. Pursuant to the Merger Agreement, NFIC will merge with and into the Company (the “Merger”) with the Company as the surviving entity. The completion of
 
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the Merger is subject to the approval of a majority of the outstanding shares of NFIC’s common stock and other customary closing conditions. While there can be no assurances as to the exact timing, or that the Merger will be completed at all, the Company expects to complete the Merger in June 2017. If the proposed Merger is consummated, NFIC will cease to exist as a separate corporation, and each share of common stock of NFIC will be converted into the right to receive a mixture of cash and shares of common stock of the Company, par value $0.01 per share (the “Acquisition Shares” and together with such cash, the “Merger Consideration”), in accordance with the elections of the stockholders of NFIC (under which at least 5% of the Merger Consideration received by each stockholder of NFIC must be in the form of Acquisition Shares).
 
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Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders of
TCG BDC, Inc.
We have audited the accompanying consolidated statements of assets and liabilities of TCG BDC, Inc. (the “Company”), including the consolidated schedules of investments, as of December 31, 2016 and 2015, and the related consolidated statements of operations, cash flows and changes in net assets for the years ended December 31, 2016, 2015 and 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our December 31, 2016 audit in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with auditing standards generally accepted in the United States of America. We conducted our December 31, 2015 and 2014 audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2016 by correspondence with the custodian and debt agents. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of TCG BDC, Inc. at December 31, 2016 and 2015, and the consolidated results of its operations, its cash flows, and the changes in its net assets for the years ended December 31, 2016, 2015 and 2014, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, NY
March 21, 2017
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollar amounts in thousands, except per share data)

 	  	December 31,
2016	 	 	December 31,
2015	 	
ASSETS	  	 	 	 	 	 	 	 	
Investments, at fair value	  	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,332,596 and $1,079,720, respectively)	  	$	1,323,102	 	 	$	1,052,666	 	
Investments—controlled/affiliated, at fair value (amortized cost of $97,385 and $0, respectively)	  	 	99,657	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	
Total investments, at fair value (amortized cost of $1,429,981 and $1,079,720, respectively)	  	 	1,422,759	 	 	 	1,052,666	 	
Cash and cash equivalents	  	 	38,489	 	 	 	41,837	 	
Receivable for investment sold	  	 	19,750	 	 	 	1,987	 	
Deferred financing costs	  	 	3,308	 	 	 	3,877	 	
Interest receivable non-controlled/non-affiliated investments	  	 	3,407	 	 	 	3,279	 	
Interest and dividend receivable from controlled/affiliated investments	  	 	2,400	 	 	 	—  	 	
Prepaid expenses and other assets	  	 	42	 	 	 	386	 	
 	  	 	 	 	 	 	 	 	
Total assets	  	$	1,490,155	 	 	$	1,104,032	 	
 	  	 	 	 	 	 	 	 	
LIABILITIES	  	 	 	 	 	 	 	 	
Secured borrowings (Note 6)	  	$	421,885	 	 	$	234,313	 	
2015-1 Notes payable, net of unamortized debt issuance costs of $2,151 and $2,356, respectively (Note 7)	  	 	270,849	 	 	 	270,644	 	
Due to Investment Adviser	  	 	215	 	 	 	189	 	
Interest and credit facility fees payable (Notes 6 and 7)	  	 	3,599	 	 	 	2,577	 	
Dividend payable (Note 9)	  	 	20,018	 	 	 	18,284	 	
Base management and incentive fees payable (Note 4)	  	 	8,157	 	 	 	5,277	 	
Administrative service fees payable (Note 4)	  	 	137	 	 	 	97	 	
Other accrued expenses and liabilities	  	 	1,158	 	 	 	925	 	
 	  	 	 	 	 	 	 	 	
Total liabilities	  	 	726,018	 	 	 	532,306	 	
 	  	 	 	 	 	 	 	 	
Commitments and contingencies (Notes 8 and 11)	  	 	 	 	 	 	 	 	
NET ASSETS	  	 	 	 	 	 	 	 	
Common stock, $0.01 par value; 200,000,000 shares authorized; 41,702,318 shares and 31,524,083 shares, respectively, issued and outstanding	  	 	417	 	 	 	315	 	
Paid-in capital in excess of par value	  	 	799,580	 	 	 	613,944	 	
Offering costs	  	 	(74	) 	 	 	(74	) 	
Accumulated net investment income (loss), net of cumulative dividends of $129,065 and $65,851, respectively	  	 	(3,207	) 	 	 	(12,994	) 	
Accumulated net realized gain (loss)	  	 	(25,357	) 	 	 	(2,411	) 	
Accumulated net unrealized appreciation (depreciation)	  	 	(7,222	) 	 	 	(27,054	) 	
 	  	 	 	 	 	 	 	 	
Total net assets	  	$	764,137	 	 	$	571,726	 	
 	  	 	 	 	 	 	 	 	
NET ASSETS PER SHARE	  	$	18.32	 	 	$	18.14	 	
 	  	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollar amounts in thousands, except per share data)

 	  	For the years ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
Investment income:	  	 	 	 	 	 	 	 	 	 	 	 	
Interest income from non-controlled/non-affiliated investments	  	$	101,196	 	 	$	68,356	 	 	$	32,740	 	
Other income from non-controlled/non-affiliated investments	  	 	6,635	 	 	 	834	 	 	 	244	 	
Interest income from controlled/affiliated investments	  	 	1,465	 	 	 	—  	 	 	 	—  	 	
Dividend income from controlled/affiliated investments	  	 	1,675	 	 	 	—  	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total investment income	  	 	110,971	 	 	 	69,190	 	 	 	32,984	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	  	 	 	 	 	 	 	 	 	 	 	 	
Base management fees (Note 4)	  	 	18,539	 	 	 	13,361	 	 	 	6,559	 	
Incentive fees (Note 4)	  	 	14,905	 	 	 	8,881	 	 	 	3,578	 	
Professional fees	  	 	2,103	 	 	 	1,845	 	 	 	2,169	 	
Administrative service fees (Note 4)	  	 	703	 	 	 	595	 	 	 	626	 	
Interest expense (Notes 6 and 7)	  	 	16,462	 	 	 	9,582	 	 	 	3,648	 	
Credit facility fees (Note 6)	  	 	2,573	 	 	 	1,898	 	 	 	3,052	 	
Directors’ fees and expenses	  	 	553	 	 	 	419	 	 	 	395	 	
Other general and administrative	  	 	1,692	 	 	 	1,539	 	 	 	883	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	  	 	57,530	 	 	 	38,120	 	 	 	20,910	 	
Waiver of base management fees (Note 4)	  	 	6,180	 	 	 	4,454	 	 	 	2,186	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net expenses	  	 	51,350	 	 	 	33,666	 	 	 	18,724	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net investment income (loss)	  	 	59,621	 	 	 	35,524	 	 	 	14,260	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments:	  	 	 	 	 	 	 	 	 	 	 	 	
Net realized gain (loss) on investments—non-controlled/non-affiliated	  	 	(9,644	) 	 	 	1,164	 	 	 	72	 	
Net change in unrealized appreciation (depreciation) on investments—non-controlled/non-affiliated	  	 	17,560	 	 	 	(18,015	) 	 	 	(8,718	) 	
Net change in unrealized appreciation (depreciation) on investments—controlled/affiliated	  	 	2,272	 	 	 	—  	 	 	 	—  	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	 	10,188	 	 	 	(16,851	) 	 	 	(8,646	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	$	69,809	 	 	$	18,673	 	 	$	5,614	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted earnings per common share (Note 9)	  	$	1.93	 	 	$	0.75	 	 	$	0.43	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average shares of common stock outstanding—Basic and Diluted (Note 9)	  	 	36,152,390	 	 	 	24,830,200	 	 	 	13,091,544	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Dividends declared per common share (Note 9)	  	$	1.68	 	 	$	1.74	 	 	$	1.25	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(dollar amounts in thousands)

 	  	For the years ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
Increase (decrease) in net assets resulting from operations:	  	 	 	 	 	 	 	 	 	 	 	 	
Net investment income (loss)	  	$	59,621	 	 	$	35,524	 	 	$	14,260	 	
Net realized gain (loss) on investments	  	 	(9,644	) 	 	 	1,164	 	 	 	72	 	
Net change in unrealized appreciation (depreciation) on investments	  	 	19,832	 	 	 	(18,015	) 	 	 	(8,718	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	 	69,809	 	 	 	18,673	 	 	 	5,614	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Capital transactions:	  	 	 	 	 	 	 	 	 	 	 	 	
Common stock issued	  	 	185,537	 	 	 	262,354	 	 	 	164,769	 	
Reinvestment of dividends	  	 	279	 	 	 	131	 	 	 	34	 	
Dividends declared (Note 12)	  	 	(63,214	) 	 	 	(47,689	) 	 	 	(18,162	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from capital share transactions	  	 	122,602	 	 	 	214,796	 	 	 	146,641	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets	  	 	192,411	 	 	 	233,469	 	 	 	152,255	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net assets at beginning of year	  	 	571,726	 	 	 	338,257	 	 	 	186,002	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net assets at end of year	  	$	764,137	 	 	$	571,726	 	 	$	338,257	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollar amounts in thousands)

 	  	For the years ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	
Cash flows from operating activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	$	69,809	 	 	$	18,673	 	 	$	5,614	 	
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Amortization of deferred financing costs	  	 	1,417	 	 	 	1,051	 	 	 	1,820	 	
Net accretion of discount on investments	  	 	(5,605	) 	 	 	(3,035	) 	 	 	(1,108	) 	
Net realized (gain) loss on investments	  	 	9,644	 	 	 	(1,164	) 	 	 	(72	) 	
Net change in unrealized (appreciation) depreciation on investments	  	 	(19,832	) 	 	 	18,015	 	 	 	8,718	 	
Cost of investments purchased and change in payable for investments purchased	  	 	(755,654	) 	 	 	(653,154	) 	 	 	(565,432	) 	
Proceeds from sales and repayments of investments and change in receivable for investments sold	  	 	383,591	 	 	 	228,004	 	 	 	121,229	 	
Changes in operating assets:	  	 	 	 	 	 	 	 	 	 	 	 	
Interest receivable	  	 	(1,203	) 	 	 	1,233	 	 	 	(2,828	) 	
Dividend receivable	  	 	(1,325	) 	 	 	—  	 	 	 	—  	 	
Prepaid expenses and other assets	  	 	344	 	 	 	(229	) 	 	 	(117	) 	
Changes in operating liabilities:	  	 	 	 	 	 	 	 	 	 	 	 	
Due to Investment Adviser	  	 	26	 	 	 	148	 	 	 	25	 	
Interest and credit facility fees payable	  	 	1,022	 	 	 	1,384	 	 	 	643	 	
Base management and incentive fees payable	  	 	2,880	 	 	 	(1,042	) 	 	 	5,694	 	
Administrative service fees payable	  	 	40	 	 	 	6	 	 	 	(40	) 	
Other accrued expenses and liabilities	  	 	233	 	 	 	165	 	 	 	91	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) operating activities	  	 	(314,613	) 	 	 	(389,945	) 	 	 	(425,763	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	  	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from issuance of common stock	  	 	185,537	 	 	 	262,354	 	 	 	164,769	 	
Borrowings on SPV Credit Facility and Credit Facility	  	 	566,351	 	 	 	402,200	 	 	 	420,023	 	
Repayments of SPV Credit Facility and Credit Facility	  	 	(378,779	) 	 	 	(476,328	) 	 	 	(178,404	) 	
Proceeds from issuance of 2015-1 Notes	  	 	—  	 	 	 	273,000	 	 	 	—  	 	
Debt issuance costs paid	  	 	(643	) 	 	 	(2,648	) 	 	 	(2,029	) 	
Dividends paid in cash	  	 	(61,201	) 	 	 	(35,550	) 	 	 	(11,852	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net cash provided by (used in) financing activities	  	 	311,265	 	 	 	423,028	 	 	 	392,507	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	(3,348	) 	 	 	33,083	 	 	 	(33,256	) 	
Cash and cash equivalents, beginning of year	  	 	41,837	 	 	 	8,754	 	 	 	42,010	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of year	  	$	38,489	 	 	$	41,837	 	 	$	8,754	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	
Supplemental disclosures:	  	 	 	 	 	 	 	 	 	 	 	 	
Offering expenses and debt issuance costs due	  	$	—  	 	 	$	1	 	 	$	—  	 	
Interest paid during the year	  	$	15,267	 	 	$	8,083	 	 	$	2,882	 	
Dividends declared during the year	  	$	63,214	 	 	$	47,689	 	 	$	18,162	 	
Reinvestment of dividends	  	$	279	 	 	$	131	 	 	$	34	 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)	  	Industry	 	 	Interest
Rate  (2)	  	Maturity
Date	 	  	Par/
Principal
Amount	 	  	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage of
Net Assets	 	
First Lien Debt (80.09%)	  	 	 	 	 	 	 	  	 	 	 	  	 	 	 	 	 	 	 	
Access CIG, LLC (2)(3)(4)(13)	  	 	Business Services	 	 	L + 5.00% (1.00% Floor)	  	 	10/17/2021	 	  	$	18,335	 	  	$	18,222	 	 	$	18,335	 	 	 	2.40	% 	
Advanced Instruments, LLC (2)(3)(4)(5)(13)(15)	  	 	Healthcare & Pharmaceuticals	 	 	L + 5.25% (1.00% Floor)	  	 	10/31/2022	 	  	 	22,500	 	  	 	22,019	 	 	 	22,252	 	 	 	2.91	 	
AF Borrower LLC (Accuvant) (2)(3)(4)	  	 	High Tech Industries	 	 	L + 5.25% (1.00% Floor)	  	 	1/28/2022	 	  	 	16,113	 	  	 	15,923	 	 	 	16,113	 	 	 	2.11	 	
Alpha Packaging Holdings, Inc. (2)(3)(4)(13)	  	 
	Containers, Packaging &
Glass	 
 	 	L + 4.25% (1.00% Floor)	  	 	5/12/2020	 	  	 	11,322	 	  	 	11,313	 	 	 	11,322	 	 	 	1.48	 	
Anaren, Inc. (2)(3)(4)(13)	  	 	Telecommunications	 	 	L + 4.50% (1.00% Floor)	  	 	2/18/2021	 	  	 	10,869	 	  	 	10,800	 	 	 	10,869	 	 	 	1.42	 	
Audax AAMP Holdings, Inc. (2)(3)(4)(13)	  	 	Durable Consumer Goods	 	 	L + 6.00% (1.00% Floor)	  	 	6/24/2017	 	  	 	10,424	 	  	 	10,400	 	 	 	10,348	 	 	 	1.35	 	
BAART Programs, Inc. (2)(4)(16)	  	 	Healthcare & Pharmaceuticals	 	 	L + 7.75% (0.00% Floor)	  	 	10/9/2021	 	  	 	7,406	 	  	 	7,355	 	 	 	7,534	 	 	 	0.99	 	
Brooks Equipment Company, LLC (2)(3)(4)(13)	  	 	Construction & Building	 	 	L + 5.00% (1.00% Floor)	  	 	8/29/2020	 	  	 	6,694	 	  	 	6,657	 	 	 	6,683	 	 	 	0.87	 	
Capstone Logistics Acquisition, Inc. (2)(3)(4)(13)	  	 	Transportation: Cargo	 	 	L + 4.50% (1.00% Floor)	  	 	10/7/2021	 	  	 	19,478	 	  	 	19,337	 	 	 	19,212	 	 	 	2.51	 	
Captive Resources Midco,
LLC  (2)(3)(4)(13)(15)	  	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 5.75% (1.00% Floor)	  	 	6/30/2020	 	  	 	29,050	 	  	 	28,683	 	 	 	29,009	 	 	 	3.80	 	
Central Security Group, Inc. (2)(3)(4)(13)(16)	  	 	Consumer Services	 	 	L + 5.63% (1.00% Floor)	  	 	10/6/2020	 	  	 	28,658	 	  	 	28,300	 	 	 	28,557	 	 	 	3.74	 	
CIP Revolution Holdings, LLC (2)(3)(5)(15)	  	 
	Media: Advertising,
Printing & Publishing	 
 	 	L + 6.00% (1.00% Floor)	  	 	8/19/2021	 	  	 	16,500	 	  	 	16,325	 	 	 	16,585	 	 	 	2.17	 	
Colony Hardware Corporation (2)(3)(4)(13)	  	 	Construction & Building	 	 	L + 6.00% (1.00% Floor)	  	 	10/23/2021	 	  	 	17,038	 	  	 	16,806	 	 	 	17,038	 	 	 	2.23	 	
Datapipe, Inc. (2)(3)(13)(16)	  	 	Telecommunications	 	 	L + 4.75% (1.00% Floor)	  	 	3/15/2019	 	  	 	9,750	 	  	 	9,666	 	 	 	9,764	 	 	 	1.28	 	
Dent Wizard International Corporation (2)(3)(4)(13)(16)	  	 	Automotive	 	 	L + 4.75% (1.00% Floor)	  	 	4/7/2020	 	  	 	7,216	 	  	 	7,190	 	 	 	7,216	 	 	 	0.94	 	
Derm Growth Partners III, LLC
(Dermatology Associates)  (2)(3)(4)(5)(13)(15)	  	 	Healthcare & Pharmaceuticals	 	 	L + 6.50% (1.00% Floor)	  	 	5/31/2022	 	  	 	32,929	 	  	 	32,393	 	 	 	32,958	 	 	 	4.31	 	
Dimensional Dental Management, LLC (2)(3)(5)(12)(15)	  	 	Healthcare & Pharmaceuticals	 	 	L + 7.00% (1.00% Floor)	  	 	2/12/2021	 	  	 	18,000	 	  	 	17,601	 	 	 	17,811	 	 	 	2.33	 	
Dimora Brands, Inc. (fka TK USA Enterprises,
Inc.)  (2)(3)(5)(15)	  	 	Construction & Building	 	 	L + 4.50% (1.00% Floor)	  	 	4/4/2022	 	  	 	—	 	  	 	(60	) 	 	 	(30	) 	 	 	0.00	 	
Direct Travel, Inc. (2)(3)(4)(5)(13)(15)	  	 	Hotel, Gaming & Leisure	 	 	L + 6.50% (1.00% Floor)	  	 	12/1/2021	 	  	 	12,842	 	  	 	12,420	 	 	 	12,712	 	 	 	1.66	 	
EIP Merger Sub, LLC (Evolve IP) (2)(3)(5)(12)	  	 	Telecommunications	 	 	L + 6.25% (1.00% Floor)	  	 	6/7/2021	 	  	 	23,750	 	  	 	23,098	 	 	 	23,242	 	 	 	3.04	 	
Emerging Markets Communications,
LLC  (2)(3)(4)(8)(13)	  	 	Telecommunications	 	 	L + 5.75% (1.00% Floor)	  	 	7/1/2021	 	  	 	17,730	 	  	 	16,299	 	 	 	17,730	 	 	 	2.32	 	
EP Minerals, LLC (2)(3)(4)(13)	  	 	Metals & Mining	 	 	L + 4.50% (1.00% Floor)	  	 	8/20/2020	 	  	 	10,264	 	  	 	10,232	 	 	 	10,259	 	 	 	1.34	 	
FCX Holdings Corp. (2)(3)(4)(13)(16)	  	 	Capital Equipment	 	 	L + 4.50% (1.00% Floor)	  	 	8/4/2020	 	  	 	9,856	 	  	 	9,852	 	 	 	9,856	 	 	 	1.29	 	
Genex Holdings, Inc. (2)(3)(13)(16)	  	 
	Banking, Finance, Insurance &
Real Estate	
 	 	L + 4.25% (1.00% Floor)	  	 	5/30/2021	 	  	 	4,200	 	  	 	4,187	 	 	 	4,196	 	 	 	0.55	 	
Global Software, LLC (2)(3)(4)(13)(16)	  	 	High Tech Industries	 	 	L + 5.50% (1.00% Floor)	  	 	5/2/2022	 	  	 	16,163	 	  	 	15,880	 	 	 	16,163	 	 	 	2.12	 	
Green Energy Partners/Stonewall LLC (2)(3)(5)(13)	  	 	Energy: Electricity	 	 	L + 5.50% (1.00% Floor)	  	 	11/13/2021	 	  	 	16,600	 	  	 	16,475	 	 	 	16,598	 	 	 	2.17	 	
Green Plains II LLC (2)(3)(4)(5)(13)(15)	  	 	Beverage, Food & Tobacco	 	 	L + 7.00% (1.00% Floor)	  	 	10/03/2022	 	  	 	15,205	 	  	 	15,059	 	 	 	15,379	 	 	 	2.01	 	
Hummel Station LLC (2)(3)(5)(13)(16)	  	 	Energy: Electricity	 	 	L + 6.00% (1.00% Floor)	  	 	10/27/2022	 	  	 	21,000	 	  	 	20,308	 	 	 	20,160	 	 	 	2.64	 	
Imagine! Print Solutions, LLC (2)(3)(4)(13)	  	 
	Media: Advertising,
Printing & Publishing	 
 	 	L + 6.00% (1.00% Floor)	  	 	3/30/2022	 	  	 	18,461	 	  	 	18,213	 	 	 	18,603	 	 	 	2.43	 	
 
F-61

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)	  	Industry	 	 	Interest
Rate  (2)	  	Maturity
Date	 	  	Par/
Principal
Amount	 	  	Amortized
Cost  (6)	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
First Lien Debt (80.09%) (continued)	  	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Imperial Bag & Paper Co. LLC (2)(3)(4)(13)(16)	  	 	Forest Products & Paper	 	 	L + 6.00% (1.00% Floor)	  	 	1/7/2022	 	  	$	24,074	 	  	$	23,752	 	  	$	23,924	 	  	 	3.13	% 	
Indra Holdings Corp. (Totes Isotoner) (2)(3)(5)(13)	  	 
	Non-durable Consumer
Goods	 
 	 	L + 4.25% (1.00% Floor)	  	 	5/1/2021	 	  	 	14,224	 	  	 	14,130	 	  	 	10,553	 	  	 	1.38	 	
International Medical Group, Inc. (2)(3)(5)(12)	  	 

	Banking, Finance,
Insurance &
Real Estate	 

 	 	L + 6.50% (1.00% Floor)	  	 	10/30/2020	 	  	 	30,000	 	  	 	29,505	 	  	 	30,237	 	  	 	3.96	 	
Jackson Hewitt Inc. (2)(3)(4)(13)	  	 	Retail	 	 	L + 7.00% (1.00% Floor)	  	 	7/30/2020	 	  	 	8,758	 	  	 	8,625	 	  	 	8,320	 	  	 	1.09	 	
Metrogistics LLC (2)(3)(4)(5)(13)	  	 	Transportation: Cargo	 	 	L + 6.50% (1.00% Floor)	  	 	9/30/2022	 	  	 	15,200	 	  	 	14,986	 	  	 	15,094	 	  	 	1.98	 	
MSX International, Inc. (2)(3)(4)(13)	  	 	Automotive	 	 	L + 5.00% (1.00% Floor)	  	 	8/21/2020	 	  	 	8,940	 	  	 	8,882	 	  	 	8,940	 	  	 	1.17	 	
National Technical Systems, Inc. (2)(3)(4)(13)(15)	  	 	Aerospace & Defense	 	 	L + 6.25% (1.00% Floor)	  	 	6/12/2021	 	  	 	25,123	 	  	 	24,854	 	  	 	23,927	 	  	 	3.13	 	
NES Global Talent Finance US
LLC (United Kingdom)  (2)(3)(4)(8)(13)	  	 	Energy: Oil & Gas	 	 	L + 5.50% (1.00% Floor)	  	 	10/3/2019	 	  	 	11,250	 	  	 	11,132	 	  	 	10,911	 	  	 	1.43	 	
OnCourse Learning Corporation (2)(3)(4)(5)(13)(15)(16)	  	 	Consumer Services	 	 	L + 6.50% (1.00% Floor)	  	 	9/12/2021	 	  	 	26,141	 	  	 	25,770	 	  	 	26,220	 	  	 	3.43	 	
Paradigm Acquisition Corp. (2)(3)(4)(13)	  	 	Business Services	 	 	L + 5.00% (1.00% Floor)	  	 	6/2/2022	 	  	 	23,246	 	  	 	22,963	 	  	 	23,223	 	  	 	3.04	 	
Pelican Products, Inc. (2)(3)(4)(13)	  	 
	Containers, Packaging &
Glass	 
 	 	L + 4.25% (1.00% Floor)	  	 	4/11/2020	 	  	 	7,643	 	  	 	7,654	 	  	 	7,593	 	  	 	0.99	 	
Plano Molding Company, LLC (2)(3)(4)(5)(13)	  	 	Hotel, Gaming & Leisure	 	 	L + 7.00% (1.00% Floor)	  	 	5/12/2021	 	  	 	18,163	 	  	 	18,030	 	  	 	17,302	 	  	 	2.26	 	
PPT Management Holdings, LLC (2)(3)(5)	  	 	Healthcare & Pharmaceuticals	 	 	L + 6.00% (1.00% Floor)	  	 	12/16/2022	 	  	 	22,500	 	  	 	22,288	 	  	 	22,426	 	  	 	2.93	 	
Premier Senior Marketing, LLC (2)(3)(5)(16)	  	 
	Banking, Finance,
Insurance & Real Estate	 
 	 	L + 5.00% (1.00% Floor)	  	 	7/1/2022	 	  	 	3,741	 	  	 	3,690	 	  	 	3,741	 	  	 	0.49	 	
Product Quest Manufacturing, LLC (2)(3)(4)(5)(12)	  	 
	Containers, Packaging &
Glass	 
 	 	L + 5.75% (1.00% Floor)	  	 	9/9/2020	 	  	 	28,000	 	  	 	27,565	 	  	 	25,838	 	  	 	3.38	 	
Prowler Acquisition Corp. (Pipeline Supply and
Service, LLC)  (2)(3)(4)	  	 	Wholesale	 	 	L + 4.50% (1.00% Floor)	  	 	1/28/2020	 	  	 	10,798	 	  	 	10,739	 	  	 	8,101	 	  	 	1.06	 	
PSC Industrial Holdings Corp (2)(3)(4)(13)	  	 	Environmental Industries	 	 	L + 4.75% (1.00% Floor)	  	 	12/5/2020	 	  	 	11,760	 	  	 	11,679	 	  	 	11,290	 	  	 	1.48	 	
PSI Services LLC (2)(3)(4)(5)(12)(16)	  	 	Business Services	 	 	L + 6.75% (1.00% Floor)	  	 	2/27/2021	 	  	 	32,705	 	  	 	32,022	 	  	 	34,784	 	  	 	4.56	 	
PT Intermediate Holdings III,
LLC (Parts Town)  (2)(3)(4)(5)(13)(15)	  	 	Wholesale	 	 	L + 6.50% (1.00% Floor)	  	 	6/23/2022	 	  	 	17,417	 	  	 	17,215	 	  	 	17,563	 	  	 	2.30	 	
QW Holding Corporation (Quala) (2)(3)(4)(5)(13)	  	 	Environmental Industries	 	 	L + 6.75% (1.00% Floor)	  	 	8/31/2022	 	  	 	29,925	 	  	 	29,084	 	  	 	30,009	 	  	 	3.93	 	
Reliant Pro Rehab, LLC (2)(3)(5)(12)	  	 	Healthcare & Pharmaceuticals	 	 	L + 10.00% (1.00% Floor)	  	 	12/29/2017	 	  	 	22,331	 	  	 	22,024	 	  	 	22,331	 	  	 	2.92	 	
SolAero Technologies Corp. (2)(3)(4)(5)	  	 	Telecommunications	 	 	L + 5.25% (1.00% Floor)	  	 	12/10/2020	 	  	 	19,677	 	  	 	19,541	 	  	 	18,901	 	  	 	2.47	 	
Superior Health Linens, LLC (2)(3)(4)(5)(13)(15)	  	 	Business Services	 	 	L + 6.50% (1.00% Floor)	  	 	9/30/2021	 	  	 	19,206	 	  	 	18,891	 	  	 	19,068	 	  	 	2.50	 	
T2 Systems, Inc. (2)(3)(4)(5)(13)(15)(16)	  	 	Transportation: Consumer	 	 	L + 6.75% (1.00% Floor)	  	 	9/28/2022	 	  	 	22,950	 	  	 	22,333	 	  	 	23,208	 	  	 	3.04	 	
T2 Systems Canada, Inc. (2)(3)(5)(16)	  	 	Transportation: Consumer	 	 	L + 6.75% (1.00% Floor)	  	 	9/28/2022	 	  	 	4,050	 	  	 	3,952	 	  	 	4,090	 	  	 	0.54	 	
 
F-62

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)	  	Industry	 	 	Interest
Rate  (2)	  	Maturity
Date	 	  	Par/
Principal
Amount	 	  	Amortized
Cost  (6)	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
First Lien Debt (80.09%) (continued)	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Teaching Strategies, LLC (2)(3)(4)(13)	  	 
	Media: Advertising, Printing &
Publishing	 
 	 	L + 5.50% (0.50% Floor)	  	 	10/1/2019	 	  	$	13,369	 	  	$	13,333	 	  	$	13,369	 	  	 	1.75	% 	
The Hilb Group, LLC (2)(3)(5)(12)(15)	  	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 6.50% (1.00% Floor)	  	 	6/24/2021	 	  	 	29,682	 	  	 	29,113	 	  	 	29,826	 	  	 	3.90	 	
The SI Organization, Inc. (2)(3)(4)(13)	  	 	Aerospace & Defense	 	 	L + 4.75% (1.00% Floor)	  	 	11/23/2019	 	  	 	8,574	 	  	 	8,527	 	  	 	8,676	 	  	 	1.15	 	
The Topps Company, Inc. (2)(3)(4)(13)	  	 	Non-durable Consumer Goods	 	 	L + 6.00% (1.25% Floor)	  	 	10/2/2020	 	  	 	18,707	 	  	 	18,629	 	  	 	18,795	 	  	 	2.46	 	
TruckPro, LLC (2)(3)(4)(13)(16)	  	 	Automotive	 	 	L + 5.00% (1.00% Floor)	  	 	8/6/2018	 	  	 	9,292	 	  	 	9,267	 	  	 	9,262	 	  	 	1.21	 	
Tweddle Group, Inc. (2)(3)(4)(13)	  	 
	Media: Advertising, Printing &
Publishing	 
 	 	L + 6.00% (1.00% Floor)	  	 	10/24/2022	 	  	 	16,200	 	  	 	15,885	 	  	 	16,114	 	  	 	2.11	 	
TwentyEighty, Inc. (fka Miller Heiman, Inc.) (2)(3)(5)(10)(13)	  	 	Business Services	 	 	L + 6.00% (1.00% Floor)	  	 	9/30/2019	 	  	 	18,719	 	  	 	18,571	 	  	 	7,628	 	  	 	1.00	 	
U.S. Farathane, LLC (2)(3)(4)(13)	  	 	Automotive	 	 	L + 4.75% (1.00% Floor)	  	 	12/23/2021	 	  	 	1,925	 	  	 	1,895	 	  	 	1,925	 	  	 	0.25	 	
U.S. TelePacific Holdings Corp. (2)(3)(5)	  	 	Telecommunications	 	 	L + 8.50% (1.00% Floor)	  	 	2/24/2021	 	  	 	30,000	 	  	 	29,149	 	  	 	29,853	 	  	 	3.91	 	
Vetcor Professional Practices, LLC (2)(3)(4)(5)(13)(15)	  	 	Consumer Services	 	 	L + 6.25% (1.00% Floor)	  	 	4/20/2021	 	  	 	25,001	 	  	 	24,623	 	  	 	25,164	 	  	 	3.29	 	
Violin Finco S.A.R.L. (Alexander Mann Solutions) (United Kingdom)  (2)(3)(4)(8)(13)	  	 	Business Services	 	 	L + 4.75% (1.00% Floor)	  	 	12/20/2019	 	  	 	10,065	 	  	 	10,012	 	  	 	10,058	 	  	 	1.32	 	
Vistage Worldwide, Inc. (2)(3)(4)(13)(16)	  	 	Business Services	 	 	L + 5.50% (1.00% Floor)	  	 	8/19/2021	 	  	 	28,757	 	  	 	28,524	 	  	 	28,688	 	  	 	3.75	 	
Vitera Healthcare Solutions, LLC (2)(3)(4)(13)	  	 	Healthcare & Pharmaceuticals	 	 	L + 5.00% (1.00% Floor)	  	 	11/4/2020	 	  	 	9,104	 	  	 	9,050	 	  	 	9,078	 	  	 	1.19	 	
Winchester Electronics Corporation (2)(3)(4)(5)(13)(15)	  	 	Capital Equipment	 	 	L + 6.50% (1.00% Floor)	  	 	6/30/2022	 	  	 	27,367	 	  	 	26,959	 	  	 	27,460	 	  	 	3.59	 	
Zest Holdings, LLC (2)(3)(4)(13)	  	 	Durable Consumer Goods	 	 	L + 4.75% (1.00% Floor)	  	 	8/16/2020	 	  	 	9,530	 	  	 	9,530	 	  	 	9,584	 	  	 	1.25	 	
 	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
First Lien Debt Total	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	$	1,145,326	 	  	$	1,139,548	 	  	 	149.13	% 	
 	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Second Lien Debt (12.08%)	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
AF Borrower LLC (Accuvant) (2)(3)(5)	  	 	High Tech Industries	 	 	L + 9.00% (1.00% Floor)	  	 	1/30/2023	 	  	$	8,000	 	  	$	7,934	 	  	$	8,000	 	  	 	1.05	% 	
AIM Group USA Inc. (2)(3)(5)(13)	  	 	Aerospace & Defense	 	 	L + 9.00% (1.00% Floor)	  	 	8/2/2022	 	  	 	23,000	 	  	 	22,701	 	  	 	23,196	 	  	 	3.04	 	
AmeriLife Group, LLC (2)(3)(5)	  	 
	Banking, Finance, Insurance &Real
Estate	 
 	 	L + 8.75% (1.00% Floor)	  	 	1/10/2023	 	  	 	20,000	 	  	 	19,656	 	  	 	19,208	 	  	 	2.51	 	
Argon Medical Devices, Inc. (2)(3)(4)(5)	  	 	Healthcare & Pharmaceuticals	 	 	L + 9.50% (1.00% Floor)	  	 	6/23/2022	 	  	 	24,000	 	  	 	23,363	 	  	 	24,233	 	  	 	3.17	 	
Berlin Packaging L.L.C. (2)(3)(5)(13)	  	 	Containers, Packaging & Glass	 	 	L + 6.75% (1.00% Floor)	  	 	10/1/2022	 	  	 	2,927	 	  	 	2,910	 	  	 	2,953	 	  	 	0.39	 	
Charter NEX US Holdings, Inc. (2)(3)(5)(13)	  	 	Chemicals, Plastics & Rubber	 	 	L + 8.25% (1.00% Floor)	  	 	2/5/2023	 	  	 	7,394	 	  	 	7,303	 	  	 	7,468	 	  	 	0.98	 	
Confie Seguros Holding II Co. (2)(3)(5)(16)	  	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 9.00% (1.25% Floor)	  	 	5/8/2019	 	  	 	12,000	 	  	 	11,921	 	  	 	11,918	 	  	 	1.56	 	
Drew Marine Group Inc. (2)(3)(4)(5)(13)	  	 	Chemicals, Plastics & Rubber	 	 	L + 7.00% (1.00% Floor)	  	 	5/19/2021	 	  	 	12,500	 	  	 	12,481	 	  	 	12,333	 	  	 	1.61	 	
 
F-63

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)	  	Industry	 	 	Interest
Rate  (2)	  	Maturity
Date	 	  	Par/
Principal
Amount	 	  	Amortized
Cost  (6)	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Second Lien Debt (12.08%) (continued)	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Genex Holdings, Inc. (2)(3)(5)	  	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 7.75% (1.00% Floor)	  	 	5/30/2022	 	  	$	7,990	 	  	$	7,915	 	  	$	7,978	 	  	 	1.04	% 	
Institutional Shareholder Services Inc. (2)(3)(5)(13)	  	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 8.50% (1.00% Floor)	  	 	4/29/2022	 	  	 	12,500	 	  	 	12,408	 	  	 	12,359	 	  	 	1.62	 	
Jazz Acquisition, Inc. (Wencor) (2)(3)(5)(13)	  	 	Aerospace & Defense	 	 	L + 6.75% (1.00% Floor)	  	 	6/19/2022	 	  	 	6,700	 	  	 	6,677	 	  	 	5,572	 	  	 	0.73	 	
MRI Software, LLC (2)(3)(5)	  	 	Software	 	 	L + 8.00% (1.00% Floor)	  	 	6/23/2022	 	  	 	11,250	 	  	 	11,110	 	  	 	11,265	 	  	 	1.47	 	
Power Stop, LLC (5)(9)	  	 	Automotive	 	 	11.00%	  	 	5/29/2022	 	  	 	10,000	 	  	 	9,831	 	  	 	9,863	 	  	 	1.29	 	
Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)  (2)(3)(5)	  	 	Wholesale	 	 	L + 8.50% (1.00% Floor)	  	 	7/28/2020	 	  	 	3,000	 	  	 	2,960	 	  	 	1,682	 	  	 	0.22	 	
Vitera Healthcare Solutions, LLC (2)(3)(4)	  	 	Healthcare & Pharmaceuticals	 	 	L + 8.25% (1.00% Floor)	  	 	11/4/2021	 	  	 	2,000	 	  	 	1,979	 	  	 	1,945	 	  	 	0.26	 	
Watchfire Enterprises, Inc. (2)(3)(5)(13)	  	 
	Media: Advertising, Printing &
Publishing	 
 	 	L + 8.00% (1.00% Floor)	  	 	10/2/2021	 	  	 	7,000	 	  	 	6,932	 	  	 	6,976	 	  	 	0.91	 	
Zywave, Inc. (2)(3)(5)	  	 	High Tech Industries	 	 	L + 9.00% (1.00% Floor)	  	 	11/17/2023	 	  	 	4,950	 	  	 	4,879	 	  	 	4,915	 	  	 	0.64	 	
 	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Second Lien Debt Total	  	 	 	 	 	 	  	 	 	 	  	 	 	 	  	$	172,960	 	  	$	171,864	 	  	 	22.49	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated (1)	  	Industry	 	  	Maturity
Date	 	  	Par
Amount	 	  	Amortized
Cost  (6)	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Structured Finance Obligations (0.37%) (5)(8)(11)	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
1776 CLO I, Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	5/8/2020	 	  	$	    11,750	 	  	$	6,739	 	  	$	    2,761	 	  	 	0.36	% 	
Clydesdale CLO 2005, Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	12/6/2017	 	  	 	5,750	 	  	 	—	 	  	 	10	 	  	 	0.00	 	
MSIM Peconic Bay, Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	7/20/2019	 	  	 	4,500	 	  	 	63	 	  	 	5	 	  	 	0.00	 	
Nautique Funding Ltd., Income Notes	  	 	Structured Finance	 	  	 	4/15/2020	 	  	 	5,000	 	  	 	    2,437	 	  	 	2,440	 	  	 	0.32	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Structured Finance Obligations Total	  	 	 	 	  	 	 	 	  	 	 	 	  	$	9,239	 	  	$	5,216	 	  	 	0.68	% 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments—non-controlled/non-affiliated (1)	  	Industry	 	  	Shares/
Units	 	  	Cost	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Equity Investments (0.46%) (5)	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
CIP Revolution Investments, LLC	  	 	Media: Advertising, Printing & Publishing	 	  	 	30,000	 	  	$	300	 	  	$	352	 	  	 	0.05	% 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	 	Healthcare & Pharmaceuticals	 	  	 	1,000,000	 	  	 	1,000	 	  	 	976	 	  	 	0.13	 	
GS Holdco LLC (Global Software, LLC)	  	 	High Tech Industries	 	  	 	1,000,000	 	  	 	1,001	 	  	 	1,126	 	  	 	0.15	 	
Power Stop Intermediate Holdings, LLC	  	 	Automotive	 	  	 	7,150	 	  	 	715	 	  	 	1,208	 	  	 	0.16	 	
T2 Systems Parent Corporation	  	 	Transportation: Consumer	 	  	 	555,556	 	  	 	556	 	  	 	584	 	  	 	0.07	 	
THG Acquisition, LLC (The Hilb Group, LLC)	  	 	Banking, Finance, Insurance & Real Estate	 	  	 	1,500,000	 	  	 	1,499	 	  	 	2,228	 	  	 	0.29	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Equity Investments Total	  	 	 	 	  	 	 	 	  	$	5,071	 	  	$	6,474	 	  	 	0.85	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total investments—non-controlled/non-affiliated	  	 	 	 	  	 	 	 	  	$	    1,332,596	 	  	$	    1,323,102	 	  	 	173.15	% 	

 
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Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—controlled/affiliated	  	Industry	 	  	Interest
Rate  (2)	 	 	Maturity
Date	 	  	Par
Amount/
LLC
Interest	 	  	
Cost	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Investment Fund (7.00%)(8)	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Middle Market Credit Fund, LLC, Mezzanine Loan  (2)(5)(9)(14)	  	 	Investment Fund	 	  	 	L + 9.50	% 	 	 	6/24/2017	 	  	$	    62,384	 	  	$	62,384	 	  	$	62,384	 	  	 	8.16	% 	
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest  (5)(14)	  	 	Investment Fund	 	  	 	0.001	 	 	 	3/1/2021	 	  	 	35,000	 	  	 	35,001	 	  	 	37,273	 	  	 	4.88	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Investment Fund Total	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	$	97,385	 	  	$	99,657	 	  	 	13.04	% 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total investments—controlled/affiliated	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	$	97,385	 	  	$	99,657	 	  	 	13.04	% 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total investments	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	  	$	    1,429,981	 	  	$	    1,422,759	 	  	 	186.19	% 	

(1)	Unless otherwise indicated, issuers of debt and equity investments held by TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) are domiciled in the United States and issuers of structured finance obligations are domiciled in the Cayman Islands. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2016, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2016, the Company is not an “affiliated person” of any of these portfolio companies.	
(2)	Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR (“L”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of our LIBOR loans were indexed to the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 16 below.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by the Company’s wholly owned subsidiary, TCG BDC SPV LLC (the “SPV”). The SPV has entered into a senior secured revolving credit facility (as amended, the “SPV Credit Facility”). The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or Carlyle GMS Finance MM CLO 2015-1 LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company.	
(5)	Denotes that all or a portion of the assets are owned by the Company. The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the SPV or the 2015-1 Issuer.	
(6)	Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. Equity tranche collateralized loan obligation (“CLO”) fund investments, which are referred to as “structured finance obligations”, are recorded at amortized cost using the effective interest method.	
 
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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)
 
(7)	Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy.	
(8)	The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.	
(9)	Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.	
(10)	Loan was on non-accrual status as of December 31, 2016.	
(11)	As of December 31, 2016, the Company has a greater than 25% but less than 50% equity or subordinated notes ownership interest in certain structured finance obligations. These investments have governing documents that preclude the Company from controlling management of the entity and therefore the Company has determined that the issuer of the investment is not a controlled affiliate or a non-controlled affiliate because the investments are not “voting securities”.	
(12)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: Dimensional Dental Management, LLC (4.54%), EIP Merger Sub, LLC (Evolve IP) (3.84%), International Medical Group, Inc. (4.64%), Product Quest Manufacturing, LLC (3.54%), PSI Services LLC (4.40%), Reliant Pro Rehab, LLC (nil) and The Hilb Group, LLC (3.96%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
(13)	Denotes that all or a portion of the assets are owned by the 2015-1 Issuer and secure the notes issued in connection with a $400 million term debt securitization completed by the Company on June 26, 2015 (see Note 7, 2015-1 Notes). Accordingly, such assets are not available to the creditors of the SPV or the Company.	
(14)	Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, for more details.	
 
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Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)
 
(15)	As of December 31, 2016, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

Investments—non controlled/non-affiliated	  	Type	 	  	Unused
Fee	 	 	Par/
Principal
Amount	 	  	Fair
Value	 	
First Lien Debt—unfunded delayed draw and revolving term loans commitments	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Advanced Instruments, LLC	  	 	Revolver	 	  	 	0.50	% 	 	$	2,500	 	  	$	(25	) 	
Captive Resources Midco, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,875	 	  	 	(2	) 	
Captive Resources Midco, LLC	  	 	Delayed Draw	 	  	 	1.25	% 	 	 	3,125	 	  	 	(4	) 	
CIP Revolution Holdings, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,331	 	  	 	6	 	
CIP Revolution Holdings, LLC	  	 	Delayed Draw	 	  	 	0.75	% 	 	 	1,331	 	  	 	6	 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	 	Revolver	 	  	 	0.50	% 	 	 	1,672	 	  	 	1	 	
Derm Growth Partners III, LLC (Dermatology Associates)	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	5,247	 	  	 	4	 	
Dimensional Dental Management, LLC	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	2,507	 	  	 	(23	) 	
Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)	  	 	Revolver	 	  	 	0.50	% 	 	 	4,750	 	  	 	(30	) 	
Direct Travel, Inc.	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	9,658	 	  	 	(56	) 	
Green Plains II LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	1,352	 	  	 	14	 	
National Technical Systems, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,031	 	  	 	(102	) 	
National Technical Systems, Inc.	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	4,469	 	  	 	(165	) 	
OnCourse Learning Corporation	  	 	Revolver	 	  	 	0.50	% 	 	 	859	 	  	 	2	 	
PT Intermediate Holdings III, LLC (Parts Town)	  	 	Revolver	 	  	 	0.50	% 	 	 	2,025	 	  	 	15	 	
Superior Health Linens, LLC	  	 	Revolver	 	  	 	0.50	% 	 	 	2,735	 	  	 	(17	) 	
T2 Systems, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,933	 	  	 	29	 	
The Hilb Group, LLC	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	3,810	 	  	 	16	 	
Vetcor Professional Practices, LLC	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	3,057	 	  	 	18	 	
Winchester Electronics Corporation	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	2,500	 	  	 	8	 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	 	 	  	 	 	 	 	$	    59,767	 	  	$	    (305	) 	

(16)	As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.	
 
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Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)
 
As of December 31, 2016, investments at fair value consisted of the following:

Type—% of Fair Value	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair
Value	 	
First Lien Debt	  	$	1,145,326	 	  	$	1,139,548	 	  	 	80.09	% 	
Second Lien Debt	  	 	172,960	 	  	 	171,864	 	  	 	12.08	 	
Structured Finance Obligations	  	 	9,239	 	  	 	5,216	 	  	 	0.37	 	
Equity Investments	  	 	5,071	 	  	 	6,474	 	  	 	0.46	 	
Investment Fund	  	 	97,385	 	  	 	99,657	 	  	 	7.00	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,429,981	 	  	$	1,422,759	 	  	 	100.00	% 	

Type—% of Fair Value of First and Second Lien Debt	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair
Value	 	
Floating Rate	  	$	1,308,455	 	  	$	1,301,549	 	  	 	99.25	% 	
Fixed Rate	  	 	9,831	 	  	 	9,863	 	  	 	0.75	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,318,286	 	  	$	1,311,412	 	  	 	100.00	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The industrial composition of investments at fair value as of December 31, 2016 was as follows:

Industry	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair Value	 	
Aerospace & Defense	  	$	62,759	 	  	$	61,371	 	  	 	4.31	% 	
Automotive	  	 	37,780	 	  	 	38,414	 	  	 	2.7	 	
Banking, Finance, Insurance & Real Estate	  	 	148,577	 	  	 	150,700	 	  	 	10.59	 	
Beverage, Food & Tobacco	  	 	15,059	 	  	 	15,379	 	  	 	1.08	 	
Business Services	  	 	149,205	 	  	 	141,784	 	  	 	9.97	 	
Capital Equipment	  	 	36,811	 	  	 	37,316	 	  	 	2.62	 	
Chemicals, Plastics & Rubber	  	 	19,784	 	  	 	19,801	 	  	 	1.39	 	
Construction & Building	  	 	23,403	 	  	 	23,691	 	  	 	1.67	 	
Consumer Services	  	 	78,693	 	  	 	79,941	 	  	 	5.62	 	
Containers, Packaging & Glass	  	 	49,442	 	  	 	47,706	 	  	 	3.35	 	
Durable Consumer Goods	  	 	19,930	 	  	 	19,932	 	  	 	1.04	 	
Energy: Electricity	  	 	36,783	 	  	 	36,758	 	  	 	2.59	 	
Energy: Oil & Gas	  	 	11,132	 	  	 	10,911	 	  	 	0.77	 	
Environmental Industries	  	 	40,763	 	  	 	41,299	 	  	 	2.90	 	
Forest Products & Paper	  	 	23,752	 	  	 	23,924	 	  	 	1.68	 	
Healthcare & Pharmaceuticals	  	 	159,072	 	  	 	161,544	 	  	 	11.36	 	
High Tech Industries	  	 	45,617	 	  	 	46,317	 	  	 	3.26	 	
Hotel, Gaming & Leisure	  	 	30,450	 	  	 	30,014	 	  	 	2.11	 	
Investment Fund	  	 	97,385	 	  	 	99,657	 	  	 	7.00	 	
Media: Advertising, Printing & Publishing	  	 	70,988	 	  	 	71,999	 	  	 	5.06	 	
Metals & Mining	  	 	10,232	 	  	 	10,259	 	  	 	0.72	 	
Non-durable Consumer Goods	  	 	32,759	 	  	 	29,348	 	  	 	2.06	 	
Retail	  	 	8,625	 	  	 	8,320	 	  	 	0.58	 	
Software	  	 	11,110	 	  	 	11,265	 	  	 	0.79	 	
Structured Finance	  	 	9,239	 	  	 	5,216	 	  	 	0.37	 	
 
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Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)
 	 	 	 	 	 	 	 	 	 	 	 	 	
Industry	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair
Value	 	
Telecommunications	  	$	108,553	 	  	$	110,359	 	  	 	7.76	% 	
Transportation: Cargo	  	 	34,323	 	  	 	34,306	 	  	 	2.41	 	
Transportation: Consumer	  	 	26,841	 	  	 	27,882	 	  	 	1.96	 	
Wholesale	  	 	30,914	 	  	 	27,346	 	  	 	1.92	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,429,981	 	  	$	1,422,759	 	  	 	100.00	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The geographical composition of investments at fair value as of December 31, 2016 was as follows:

Geography	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair
Value	 	
Cayman Islands	  	$	9,239	 	  	$	5,216	 	  	 	0.37	% 	
United Kingdom	  	 	21,144	 	  	 	20,969	 	  	 	1.47	 	
United States	  	 	1,399,598	 	  	 	1,396,574	 	  	 	98.16	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,429,981	 	  	$	1,422,759	 	  	 	100.00	% 	

 
The accompanying notes are an integral part of these consolidated financial statements.
 
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Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2015
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)	 	Industry	 	 	Interest
Rate  (2)	 	Maturity
Date	 	 	Par/
Principal
Amount	 	 	Amortized
Cost  (6)	 	 	Fair
Value  (7)	 	 	Percentage of
Net Assets	 	
First Lien Debt (75.53%)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Access CIG, LLC (2)(3)(4)(13)	 	 	Business Services	 	 	L + 5.00% (1.00% Floor)	 	 	10/17/2021	 	 	$	18,522	 	 	$	18,388	 	 	$	18,291	 	 	 	3.20	% 	
AF Borrower LLC (Accuvant) (2)(3)(5)(13)	 	 	High Tech Industries	 	 	L + 5.25% (1.00% Floor)	 	 	1/28/2022	 	 	 	16,277	 	 	 	16,055	 	 	 	15,829	 	 	 	2.77	 	
Alpha Packaging Holdings, Inc. (2)(3)(4)(13)	 	 
	Containers, Packaging &
Glass	 
 	 	L + 4.25% (1.00% Floor)	 	 	5/12/2020	 	 	 	11,409	 	 	 	11,398	 	 	 	11,180	 	 	 	1.96	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Anaren, Inc. (2)(3)(4)(13)	 	 	Telecommunications	 	 	L + 4.50% (1.00% Floor)	 	 	2/18/2021	 	 	 	10,981	 	 	 	10,898	 	 	 	10,759	 	 	 	1.88	 	
APX Group, Inc. (5)(8)	 	 	Consumer Services	 	 	6.38%      	 	 	12/1/2019	 	 	 	10,000	 	 	 	9,749	 	 	 	9,575	 	 	 	1.67	 	
Audax AAMP Holdings, Inc. (2)(3)(4)(13)	 	 	Durable Consumer Goods	 	 	L + 5.50% (1.00% Floor)	 	 	6/24/2017	 	 	 	11,025	 	 	 	10,954	 	 	 	10,885	 	 	 	1.90	 	
BAART Programs, Inc. (2)(4)(15)	 	 	Healthcare & Pharmaceuticals	 	 	L + 8.07% (0.00% Floor)	 	 	10/9/2021	 	 	 	7,481	 	 	 	7,422	 	 	 	7,556	 	 	 	1.32	 	
Blue Bird Body Company (2)(3)(4)(8)(13)	 	 	Transportation: Consumer	 	 	L + 5.50% (1.00% Floor)	 	 	6/26/2020	 	 	 	9,491	 	 	 	9,110	 	 	 	9,361	 	 	 	1.64	 	
Brooks Equipment Company, LLC (2)(3)(4)(13)	 	 	Construction & Building	 	 	L + 5.35% (1.00% Floor)	 	 	8/29/2020	 	 	 	7,209	 	 	 	7,160	 	 	 	7,097	 	 	 	1.24	 	
Capstone Logistics Acquisition, Inc. (2)(3)(4)(13)(15)	 	 	Transportation: Cargo	 	 	L + 4.50% (1.00% Floor)	 	 	10/7/2021	 	 	 	19,750	 	 	 	19,582	 	 	 	19,134	 	 	 	3.35	 	
Captive Resources Midco, LLC (2)(3)(4)(14)	 	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 5.75% (1.00% Floor)	 	 	6/30/2020	 	 	 	29,350	 	 	 	28,890	 	 	 	28,900	 	 	 	5.05	 	
Castle Management Borrower LLC (Highgate Hotels L.P.)  (2)(3)(4)(13)	 	 	Hotel, Gaming & Leisure	 	 	L + 4.50% (1.00% Floor)	 	 	9/18/2020	 	 	 	9,878	 	 	 	9,807	 	 	 	9,535	 	 	 	1.67	 	
Central Security Group, Inc. (2)(3)(4)(13)	 	 	Consumer Services	 	 	L + 5.25% (1.00% Floor)	 	 	10/6/2020	 	 	 	24,750	 	 	 	24,444	 	 	 	23,884	 	 	 	4.18	 	
Colony Hardware Corporation (2)(3)(5)(13)	 	 	Construction & Building	 	 	L + 6.00% (1.00% Floor)	 	 	10/23/2021	 	 	 	13,000	 	 	 	12,787	 	 	 	12,861	 	 	 	2.25	 	
CRCI Holdings Inc. (CLEAResult Consulting, Inc.) (2)(3)(4)(13)(15)	 	 	Utilities: Electric	 	 	L + 4.25% (1.00% Floor)	 	 	7/10/2019	 	 	 	5,910	 	 	 	5,892	 	 	 	5,704	 	 	 	1.00	 	
Dent Wizard International Corporation (2)(3)(4)(13)	 	 	Automotive	 	 	L + 4.75% (1.00% Floor)	 	 	4/7/2020	 	 	 	7,809	 	 	 	7,775	 	 	 	7,591	 	 	 	1.33	 	
Emerging Markets Communications, LLC (2)(3)(4)(13)	 	 	Telecommunications	 	 	L + 5.75% (1.00% Floor)	 	 	7/1/2021	 	 	 	17,910	 	 	 	16,225	 	 	 	16,882	 	 	 	2.95	 	
EP Minerals, LLC (2)(3)(4)(13)	 	 	Metals & Mining	 	 	L + 4.50% (1.00% Floor)	 	 	8/20/2020	 	 	 	10,369	 	 	 	10,329	 	 	 	10,168	 	 	 	1.78	 	
FCX Holdings Corp. (2)(3)(4)(13)(15)	 	 	Capital Equipment	 	 	L + 4.50% (1.00% Floor)	 	 	8/4/2020	 	 	 	10,047	 	 	 	10,041	 	 	 	9,862	 	 	 	1.72	 	
Genex Holdings, Inc. (2)(3)(13)(15)	 	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 4.25% (1.00% Floor)	 	 	5/30/2021	 	 	 	4,243	 	 	 	4,227	 	 	 	4,164	 	 	 	0.73	 	
Green Energy Partners/Stonewall LLC (2)(3)(5)(13)	 	 	Energy: Electricity	 	 	L + 5.50% (1.00% Floor)	 	 	11/13/2021	 	 	 	16,600	 	 	 	16,456	 	 	 	16,354	 	 	 	2.86	 	
Hummel Station LLC (2)(3)(5)(15)	 	 	Energy: Electricity	 	 	L + 6.00% (1.00% Floor)	 	 	10/27/2022	 	 	 	21,000	 	 	 	20,174	 	 	 	20,553	 	 	 	3.59	 	
Indra Holdings Corp. (Totes Isotoner) (2)(3)(5)(13)	 	 	Non-durable Consumer Goods	 	 	L + 4.25% (1.00% Floor)	 	 	5/1/2021	 	 	 	14,285	 	 	 	14,173	 	 	 	13,818	 	 	 	2.42	 	
International Medical Group, Inc. (2)(3)(5)(12)	 	 
	Banking, Finance, Insurance &
Real Estate	 
 	 	L + 4.75% (1.00% Floor)	 	 	10/30/2020	 	 	 	30,000	 	 	 	29,415	 	 	 	30,276	 	 	 	5.30	 	
Jackson Hewitt Inc. (2)(3)(4)(13)	 	 	Retail	 	 	L + 7.00% (1.00% Floor)	 	 	7/30/2020	 	 	 	14,800	 	 	 	14,526	 	 	 	14,600	 	 	 	2.55	 	
Language Line, LLC (2)(3)(4)(13)(15)	 	 	Telecommunications	 	 	L + 5.50% (1.00% Floor)	 	 	7/7/2021	 	 	 	23,896	 	 	 	23,675	 	 	 	23,697	 	 	 	4.14	 	
Ministry Brands, LLC (2)(3)(5)(10)(14)	 	 	High Tech Industries	 	 	L + 7.00% (1.00% Floor)	 	 	11/20/2021	 	 	 	936	 	 	 	926	 	 	 	901	 	 	 	0.16	 	
Ministry Brands, LLC (2)(3)(5)(12)(14)	 	 	High Tech Industries	 	 	L + 7.00% (1.00% Floor)	 	 	11/20/2021	 	 	 	17,471	 	 	 	17,190	 	 	 	17,371	 	 	 	3.04	 	
MSX International, Inc. (2)(3)(4)(13)	 	 	Automotive	 	 	L + 5.00% (1.00% Floor)	 	 	8/21/2020	 	 	 	9,499	 	 	 	9,424	 	 	 	9,218	 	 	 	1.61	 	
National Technical Systems, Inc. (2)(3)(4)(5)(13)(14)	 	 	Aerospace & Defense	 	 	L + 6.00% (1.00% Floor)	 	 	6/12/2021	 	 	 	25,935	 	 	 	25,609	 	 	 	24,919	 	 	 	4.36	 	
NES Global Talent Finance US LLC (United Kingdom)  (2)(3)(4)(8)(13)	 	 	Energy: Oil & Gas	 	 	L + 5.50% (1.00% Floor)	 	 	10/3/2019	 	 	 	11,875	 	 	 	11,715	 	 	 	11,327	 	 	 	1.98	 	
 
F-70

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2015
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated  (1)	  	Industry	 	  	Interest
Rate  (2)	  	Maturity
Date	 	  	Par/
Principal
Amount	 	  	Amortized
Cost  (6)	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
First Lien Debt (75.53%) (continued)	  	 	 	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Paradigm Acquisition Corp. (2)(3)(5)(13)	  	 	Business Services	 	  	L + 5.00% (1.00% Floor)	  	 	6/2/2022	 	  	$	23,482	 	  	$	23,154	 	  	$	22,984	 	  	 	4.02	% 	
Pelican Products, Inc. (2)(3)(4)(13)	  	 	Containers, Packaging & Glass	 	  	L + 4.25% (1.00% Floor)	  	 	4/11/2020	 	  	 	7,817	 	  	 	7,832	 	  	 	7,444	 	  	 	1.30	 	
Plano Molding Company, LLC (2)(3)(5)(13)	  	 	Hotel, Gaming & Leisure	 	  	L + 6.00% (1.00% Floor)	  	 	5/12/2021	 	  	 	22,487	 	  	 	22,294	 	  	 	21,779	 	  	 	3.81	 	
Product Quest Manufacturing, LLC (2)(3)(4)(5)(12)	  	 	Containers, Packaging & Glass	 	  	L + 5.75% (1.00% Floor)	  	 	9/9/2020	 	  	 	28,000	 	  	 	27,477	 	  	 	27,810	 	  	 	4.86	 	
Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)  (2)(3)(4)	  	 	Wholesale	 	  	L + 4.50% (1.00% Floor)	  	 	1/28/2020	 	  	 	10,911	 	  	 	10,836	 	  	 	9,736	 	  	 	1.70	 	
PSC Industrial Holdings Corp (2)(3)(4)(13)	  	 	Environmental Industries	 	  	L + 4.75% (1.00% Floor)	  	 	12/5/2020	 	  	 	11,880	 	  	 	11,782	 	  	 	11,622	 	  	 	2.03	 	
PSI Services LLC (2)(3)(4)(5)(12)	  	 	Business Services	 	  	L + 7.00% (1.00% Floor)	  	 	2/27/2021	 	  	 	23,471	 	  	 	22,885	 	  	 	23,933	 	  	 	4.19	 	
SolAero Technologies Corp. (2)(3)(4)(15)	  	 	Telecommunications	 	  	L + 4.75% (1.00% Floor)	  	 	12/10/2020	 	  	 	10,827	 	  	 	10,744	 	  	 	10,511	 	  	 	1.84	 	
SolAero Technologies Corp. (2)(3)(13)(15)	  	 	Telecommunications	 	  	L + 5.25% (1.00% Floor)	  	 	12/10/2020	 	  	 	9,104	 	  	 	9,023	 	  	 	8,887	 	  	 	1.55	 	
Synarc-Biocore Holdings, LLC (2)(3)(4)(13)	  	 	Healthcare & Pharmaceuticals	 	  	L + 4.50% (1.00% Floor)	  	 	3/10/2021	 	  	 	13,264	 	  	 	13,162	 	  	 	12,599	 	  	 	2.20	 	
Systems Maintenance Services Holding, Inc. (2)(3)(13)	  	 	High Tech Industries	 	  	L + 4.00% (1.00% Floor)	  	 	10/18/2019	 	  	 	2,193	 	  	 	2,187	 	  	 	2,155	 	  	 	0.38	 	
TASC, Inc. (2)(3)(4)(8)(13)	  	 	Aerospace & Defense	 	  	L + 6.00% (1.00% Floor)	  	 	5/23/2020	 	  	 	18,351	 	  	 	17,713	 	  	 	17,916	 	  	 	3.13	 	
Teaching Strategies, LLC (2)(3)(4)(13)(15)	  	 
	Media: Advertising,
Printing & Publishing	 
 	  	L + 5.50% (0.50% Floor)	  	 	10/1/2019	 	  	 	13,953	 	  	 	13,904	 	  	 	13,844	 	  	 	2.42	 	
The Hilb Group, LLC (2)(3)(5)(12)(13)(14)	  	 
	Banking, Finance, Insurance &
Real Estate	 
 	  	L + 5.75% (1.00% Floor)	  	 	6/24/2021	 	  	 	23,458	 	  	 	22,850	 	  	 	23,555	 	  	 	4.12	 	
The Hygenic Corporation (Performance Health)  (2)(3)(4)(13)(15)	  	 	Non-durable Consumer Goods	 	  	L + 5.00% (1.00% Floor)	  	 	10/11/2020	 	  	 	15,920	 	  	 	15,721	 	  	 	15,368	 	  	 	2.69	 	
The SI Organization, Inc. (2)(3)(4)(13)	  	 	Aerospace & Defense	 	  	L + 4.75% (1.00% Floor)	  	 	11/23/2019	 	  	 	8,778	 	  	 	8,716	 	  	 	8,724	 	  	 	1.53	 	
The Topps Company, Inc. (2)(3)(4)(13)	  	 	Non-durable Consumer Goods	 	  	L + 6.00% (1.25% Floor)	  	 	10/2/2018	 	  	 	11,395	 	  	 	11,326	 	  	 	11,395	 	  	 	1.99	 	
TruckPro, LLC (2)(3)(4)(13)(15)	  	 	Automotive	 	  	L + 5.00% (1.00% Floor)	  	 	8/6/2018	 	  	 	9,683	 	  	 	9,648	 	  	 	9,546	 	  	 	1.67	 	
TwentyEighty, Inc. (fka Miller Heiman, Inc.)  (2)(3)(4)(13)	  	 	Business Services	 	  	L + 5.75% (1.00% Floor)	  	 	9/30/2019	 	  	 	19,094	 	  	 	18,901	 	  	 	16,904	 	  	 	2.96	 	
U.S. Farathane, LLC (2)(3)(4)(13)	  	 	Automotive	 	  	L + 5.75% (1.00% Floor)	  	 	12/23/2021	 	  	 	15,818	 	  	 	15,535	 	  	 	15,586	 	  	 	2.73	 	
Vetcor Professional Practices, LLC (2)(3)(4)(5)(13)(14)	  	 	Consumer Services	 	  	L + 6.00% (1.00% Floor)	  	 	4/20/2021	 	  	 	11,085	 	  	 	10,983	 	  	 	11,034	 	  	 	1.93	 	
Violin Finco S.A.R.L. (Alexander Mann Solutions) (United Kingdom)  (2)(3)(4)(8)(13)	  	 	Business Services	 	  	L + 4.75% (1.00% Floor)	  	 	12/20/2019	 	  	 	11,252	 	  	 	11,176	 	  	 	11,241	 	  	 	1.97	 	
Vistage Worldwide, Inc. (2)(3)(4)(13)(15)	  	 	Business Services	 	  	L + 5.50% (1.00% Floor)	  	 	8/19/2021	 	  	 	29,813	 	  	 	29,529	 	  	 	29,505	 	  	 	5.16	 	
Vitera Healthcare Solutions, LLC (2)(3)(4)(13)	  	 	Healthcare & Pharmaceuticals	 	  	L + 5.00% (1.00% Floor)	  	 	11/4/2020	 	  	 	9,437	 	  	 	9,369	 	  	 	9,107	 	  	 	1.59	 	
Zest Holdings, LLC (2)(3)(4)(13)	  	 	Durable Consumer Goods	 	  	L + 4.00% (1.00% Floor)	  	 	8/16/2020	 	  	 	9,694	 	  	 	9,694	 	  	 	9,597	 	  	 	1.69	 	
 	  	 	 	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
First Lien Debt Total	  	 	 	 	  	 	  	 	 	 	  	 	 	 	  	$	800,857	 	  	$	795,034	 	  	 	139.06	% 	

F-71

Table of Contents
TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2015
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated  (1)	  	Industry	 	  	Interest
Rate  (2)	  	Maturity
Date	 	  	Par/
Principal
Amount	 	  	Amortized
Cost  (6)	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Second Lien Debt (19.98%)	  	 	 	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
AF Borrower LLC (Accuvant) (2)(3)(5)	  	 	High Tech Industries	 	  	L + 9.00% (1.00% Floor)	  	 	1/30/2023	 	  	$	8,000	 	  	$	7,927	 	  	$	7,666	 	  	 	1.34	% 	
Allied Security Holdings LLC (2)(3)(5)(13)	  	 	Business Services	 	  	L + 7.00% (1.00% Floor)	  	 	8/13/2021	 	  	 	8,000	 	  	 	7,948	 	  	 	7,460	 	  	 	1.30	 	
AmeriLife Group, LLC (2)(3)(5)	  	 
	Banking, Finance, Insurance &
Real Estate	
 	  	L + 8.75% (1.00% Floor)	  	 	1/10/2023	 	  	 	20,000	 	  	 	19,619	 	  	 	19,598	 	  	 	3.44	 	
Argon Medical Devices, Inc. (2)(3)(4)(5)	  	 	Healthcare & Pharmaceuticals	 	  	L + 9.50% (1.00% Floor)	  	 	6/23/2022	 	  	 	24,000	 	  	 	23,294	 	  	 	23,354	 	  	 	4.09	 	
Berlin Packaging L.L.C. (2)(3)(5)(13)(15)	  	 
	Containers, Packaging &
Glass	 
 	  	L + 6.75% (1.00% Floor)	  	 	10/1/2022	 	  	 	9,200	 	  	 	9,139	 	  	 	8,694	 	  	 	1.52	 	
Charter NEX US Holdings, Inc. (2)(3)(5)(13)	  	 	Chemicals, Plastics & Rubber	 	  	L + 8.25% (1.00% Floor)	  	 	2/5/2023	 	  	 	10,000	 	  	 	9,864	 	  	 	9,459	 	  	 	1.65	 	
Confie Seguros Holding II Co. (2)(3)(5)(15)	  	 
	Banking, Finance, Insurance &
Real Estate	
 	  	L + 9.00% (1.25% Floor)	  	 	5/8/2019	 	  	 	12,000	 	  	 	11,896	 	  	 	11,820	 	  	 	2.07	 	
Creganna Finance (US) LLC (Ireland) (2)(3)(5)(8)	  	 	Healthcare & Pharmaceuticals	 	  	L + 8.00% (1.00% Floor)	  	 	6/1/2022	 	  	 	9,900	 	  	 	9,814	 	  	 	9,740	 	  	 	1.70	 	
DiversiTech Corporation (2)(3)(5)(13)	  	 	Capital Equipment	 	  	L + 8.00% (1.00% Floor)	  	 	11/19/2022	 	  	 	8,400	 	  	 	8,294	 	  	 	8,131	 	  	 	1.42	 	
Drew Marine Group Inc. (2)(3)(4)(5)	  	 	Chemicals, Plastics & Rubber	 	  	L + 7.00% (1.00% Floor)	  	 	5/19/2021	 	  	 	12,500	 	  	 	12,478	 	  	 	11,743	 	  	 	2.05	 	
Genex Holdings, Inc. (2)(3)(5)(15)	  	 
	Banking, Finance, Insurance &
Real Estate	
 	  	L + 7.75% (1.00% Floor)	  	 	5/30/2022	 	  	 	7,990	 	  	 	7,906	 	  	 	7,390	 	  	 	1.29	 	
Genoa, a QoL Healthcare Company, LLC (2)(3)(5)(13)	  	 	Retail	 	  	L + 7.75% (1.00% Floor)	  	 	4/28/2023	 	  	 	9,900	 	  	 	9,807	 	  	 	9,523	 	  	 	1.67	 	
Institutional Shareholder Services Inc. (2)(3)(5)(13)	  	 
	Banking, Finance, Insurance &
Real Estate	
 	  	L + 7.50% (1.00% Floor)	  	 	4/30/2022	 	  	 	12,500	 	  	 	12,397	 	  	 	12,014	 	  	 	2.10	 	
Jazz Acquisition, Inc. (Wencor) (2)(3)(5)(13)	  	 	Aerospace & Defense	 	  	L + 6.75% (1.00% Floor)	  	 	6/19/2022	 	  	 	6,700	 	  	 	6,674	 	  	 	5,759	 	  	 	1.01	 	
Landslide Holdings, Inc. (LANDesk Software) (2)(3)(13)	  	 	Software	 	  	L + 7.25% (1.00% Floor)	  	 	2/25/2021	 	  	 	3,500	 	  	 	3,480	 	  	 	3,113	 	  	 	0.54	 	
MRI Software, LLC (2)(3)(5)(15)	  	 	Software	 	  	L + 8.00% (1.00% Floor)	  	 	6/23/2022	 	  	 	11,250	 	  	 	11,093	 	  	 	10,890	 	  	 	1.91	 	
Phillips-Medisize Corporation (2)(3)(5)(13)	  	 	Chemicals, Plastics & Rubber	 	  	L + 7.25% (1.00% Floor)	  	 	6/16/2022	 	  	 	5,000	 	  	 	4,958	 	  	 	4,700	 	  	 	0.82	 	
Power Stop, LLC (5)(9)	  	 	Automotive	 	  	11.00%	  	 	5/29/2022	 	  	 	10,000	 	  	 	9,811	 	  	 	10,080	 	  	 	1.76	 	
Prime Security Services Borrower, LLC (Protection One, Inc.)  (2)(3)(5)	  	 	Consumer Services	 	  	L + 8.75% (1.00% Floor)	  	 	7/1/2022	 	  	 	6,700	 	  	 	6,607	 	  	 	6,271	 	  	 	1.10	 	
Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)  (2)(3)(5)	  	 	Wholesale	 	  	L + 8.50% (1.00% Floor)	  	 	7/28/2020	 	  	 	3,000	 	  	 	2,953	 	  	 	2,493	 	  	 	0.44	 	
Systems Maintenance Services Holding, Inc. (2)(3)(4)	  	 	High Tech Industries	 	  	L + 8.25% (1.00% Floor)	  	 	10/18/2020	 	  	 	6,000	 	  	 	5,959	 	  	 	5,860	 	  	 	1.02	 	
TASC, Inc. (5)(8)	  	 	Aerospace & Defense	 	  	12.00%	  	 	5/21/2021	 	  	 	6,000	 	  	 	5,891	 	  	 	6,075	 	  	 	1.06	 	
Vitera Healthcare Solutions, LLC (2)(3)(4)(13)	  	 	Healthcare & Pharmaceuticals	 	  	L + 8.25% (1.00% Floor)	  	 	11/4/2021	 	  	 	2,000	 	  	 	1,976	 	  	 	1,784	 	  	 	0.31	 	
Watchfire Enterprises, Inc. (2)(3)(5)(13)	  	 
	Media: Advertising,
Printing & Publishing	 
 	  	L + 8.00% (1.00% Floor)	  	 	10/2/2021	 	  	 	7,000	 	  	 	6,923	 	  	 	6,779	 	  	 	1.19	 	
 	  	 	 	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Second Lien Debt Total	  	 	 	 	  	 	  	 	 	 	  	 	 	 	  	$	216,708	 	  	$	210,396	 	  	 	36.80	% 	

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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2015
(dollar amounts in thousands)

Investments—non-controlled/non-affiliated (1)	  	Industry	 	  	Maturity
Date	 	  	Par/
Principal
Amount	 	  	Amortized
Cost  (6)	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Structured Finance Obligations (4.26%) (5)(8)(11)	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
1776 CLO I, Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	5/8/2020	 	  	$	11,750	 	  	$	8,079	 	  	$	3,347	 	  	 	0.59	% 	
AIMCO CLO, Series 2014-A, Class F, 5.47% (2)	  	 	Structured Finance	 	  	 	7/20/2026	 	  	 	2,700	 	  	 	2,369	 	  	 	1,701	 	  	 	0.30	 	
AIMCO CLO, Series 2014-A, Subordinated Notes	  	 	Structured Finance	 	  	 	7/20/2026	 	  	 	11,500	 	  	 	8,369	 	  	 	5,779	 	  	 	1.00	 	
Ares XXVIII CLO Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	10/17/2024	 	  	 	7,000	 	  	 	4,416	 	  	 	3,255	 	  	 	0.57	 	
Babson CLO Ltd. 2005-I, Subordinated Notes	  	 	Structured Finance	 	  	 	4/15/2019	 	  	 	7,632	 	  	 	333	 	  	 	86	 	  	 	0.02	 	
CIFC Funding 2007-III, Ltd., Income Notes	  	 	Structured Finance	 	  	 	7/26/2021	 	  	 	6,500	 	  	 	2,902	 	  	 	2,453	 	  	 	0.43	 	
Clydesdale CLO 2005, Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	12/6/2017	 	  	 	5,750	 	  	 	—	 	  	 	11	 	  	 	0.00	 	
Flagship VII Limited, Subordinated Notes	  	 	Structured Finance	 	  	 	1/20/2026	 	  	 	7,000	 	  	 	4,781	 	  	 	3,184	 	  	 	0.56	 	
ING IM CLO 2012-1 LLC, Preferred Shares	  	 	Structured Finance	 	  	 	3/14/2022	 	  	 	7,610	 	  	 	4,637	 	  	 	3,789	 	  	 	0.66	 	
ING IM CLO 2012-1 LLC, Subordinated Notes	  	 	Structured Finance	 	  	 	3/14/2022	 	  	 	2,500	 	  	 	1,523	 	  	 	1,245	 	  	 	0.22	 	
MSIM Peconic Bay, Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	7/20/2019	 	  	 	4,500	 	  	 	1,112	 	  	 	923	 	  	 	0.16	 	
Nautique Funding Ltd., Income Notes	  	 	Structured Finance	 	  	 	4/15/2020	 	  	 	5,000	 	  	 	2,760	 	  	 	2,275	 	  	 	0.40	 	
Steele Creek CLO 2014-I, LLC, Subordinated Notes	  	 	Structured Finance	 	  	 	8/21/2026	 	  	 	18,000	 	  	 	13,453	 	  	 	12,241	 	  	 	2.14	 	
Venture VI CDO Limited, Preference Shares	  	 	Structured Finance	 	  	 	8/3/2020	 	  	 	7,000	 	  	 	3,488	 	  	 	3,203	 	  	 	0.56	 	
Westwood CDO I, Ltd., Subordinated Notes	  	 	Structured Finance	 	  	 	3/25/2021	 	  	 	4,000	 	  	 	1,718	 	  	 	1,320	 	  	 	0.23	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Structured Finance Obligations Total	  	 	 	 	  	 	 	 	  	$	59,940	 	  	$	44,812	 	  	 	7.84	% 	

Investments—non-controlled/non-affiliated (1)	  	Industry	 	  	 	 	  	Units	 	  	Cost	 	  	Fair
Value  (7)	 	  	Percentage of
Net Assets	 	
Equity Investments (0.23%) (5)	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Power Stop Intermediate Holdings, LLC	  	 	Automotive	 	  	 	 	 	  	 	7,150	 	  	$	715	 	  	$	788	 	  	 	0.14	% 	
THG Acquisition, LLC (The Hilb Group, LLC)	  	 

	Banking, Finance,
Insurance & Real
Estate	 
 
 	  	 	 	 	  	 	1,500,000	 	  	 	1,500	 	  	 	1,636	 	  	 	0.28	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Equity Investments Total	  	 	 	 	  	 	 	 	  	 	 	 	  	$	2,215	 	  	$	2,424	 	  	 	0.42	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Investments—non-controlled/non-affiliated	  	 	 	 	  	 	 	 	  	 	 	 	  	$	1,079,720	 	  	$	1,052,666	 	  	 	184.12	% 	

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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2015
(dollar amounts in thousands)
 
(1)	Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States and issuers of structured finance obligations are domiciled in the Cayman Islands. Under the Investment Company Act, the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2015, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2015, the Company is not an “affiliated person” of any of these portfolio companies.	
(2)	Variable rate loans to the portfolio companies and variable rate notes of structured finance obligations bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan and note, the Company has provided the interest rate in effect as of December 31, 2015. As of December 31, 2015, all of our LIBOR loans were indexed to the 90-day LIBOR rate at 0.61%, except for those loans as indicated in Note 15 below.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by the SPV. The SPV has entered into the SPV Credit Facility. The lenders of the SPV Credit Facility have a first lien security interest in substantially all of the assets of the SPV (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the Company or the 2015-1 Issuer.	
(5)	Denotes that all or a portion of the assets are owned by the Company. The Company has entered into the Credit Facility. The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 6, Borrowings). Accordingly, such assets are not available to creditors of the SPV or the 2015-1 Issuer.	
(6)	Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method. Equity tranche CLO fund investments, which are referred to as “structured finance obligations”, are recorded at amortized cost using the effective interest method.	
(7)	Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements), pursuant to the Company’s valuation policy.	
(8)	The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.	
(9)	Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.	
(10)	The Company receives less than the stated interest rate of this loan as a result of an agreement among lenders. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.	
(11)	As of December 31, 2015, the Company has a greater than 25% but less than 50% equity or subordinated notes ownership interest in certain structured finance obligations. These investments have governing documents that preclude the Company from controlling management of the entity and therefore the Company has determined that the issuer of the investment is not a controlled affiliate or a non-controlled affiliate because the investments are not “voting securities”.	
 
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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2015
(dollar amounts in thousands)
 
(12)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
(13)	Denotes that all or a portion of the assets are owned by the 2015-1 Issuer and secure the notes issued in connection with a $400 million term debt securitization completed by the Company on June 26, 2015 (see Note 7, 2015-1 Notes). Accordingly, such assets are not available to the creditors of the SPV or the Company.	
(14)	As of December 31, 2015, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

First Lien Debt—unfunded delayed draw and revolving term loans commitments	  	Type	    	Unused
Fee	 	  	Par/
Principal
Amount	 	    	Fair
Value	 	
Captive Resources Midco, LLC	  	Revolver	    	 	0.50	% 	  	$	1,875	 	    	$	(25	) 	
Captive Resources Midco, LLC	  	Delayed Draw	    	 	1.25	% 	  	 	3,125	 	    	 	(41	) 	
Ministry Brands, LLC (First Lien/First Out)	  	Delayed Draw	    	 	1.00	% 	  	 	64	 	    	 	(2	) 	
Ministry Brands, LLC (First Lien/Last Out)	  	Delayed Draw	    	 	1.00	% 	  	 	1,530	 	    	 	(8	) 	
National Technical Systems, Inc.	  	Revolver	    	 	0.50	% 	  	 	2,031	 	    	 	(79	) 	
National Technical Systems, Inc.	  	Delayed Draw	    	 	1.00	% 	  	 	4,469	 	    	 	(138	) 	
The Hilb Group, LLC	  	Delayed Draw	    	 	1.00	% 	  	 	10,034	 	    	 	29	 	
Vetcor Professional Practices, LLC	  	Delayed Draw	    	 	1.00	% 	  	 	1,473	 	    	 	(6	) 	
 	  	 	    	 	 	 	  	 	 	 	    	 	 	 	
Total unfunded commitments	  	 	    	 	 	 	  	$	24,601	 	    	$	(270	) 	
 	  	 	    	 	 	 	  	 	 	 	    	 	 	 	
(15)	As of December 31, 2015, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.43%.	
 
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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2015
(dollar amounts in thousands)
As of December 31, 2015, investments at fair value consisted of the following:

Type—% of Fair Value	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair
Value	 	
First Lien Debt	  	$	800,857	 	  	$	795,034	 	  	 	75.53	% 	
Second Lien Debt	  	 	216,708	 	  	 	210,396	 	  	 	19.98	 	
Structured Finance Obligations	  	 	59,940	 	  	 	44,812	 	  	 	4.26	 	
Equity Investments	  	 	2,215	 	  	 	2,424	 	  	 	0.23	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,079,720	 	  	$	1,052,666	 	  	 	100.00	% 	

Type—% of Fair Value of First and Second Lien Debt	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair
Value	 	
Floating Rate	  	$	992,114	 	  	$	979,700	 	  	 	97.44	% 	
Fixed Rate	  	 	25,451	 	  	 	25,730	 	  	 	2.56	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,017,565	 	  	$	1,005,430	 	  	 	100.00	% 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The industrial composition of investments at fair value as of December 31, 2015 was as follows:

Industry	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair Value	 	
Aerospace & Defense	  	$	64,603	 	  	$	63,393	 	  	 	6.02	% 	
Automotive	  	 	52,908	 	  	 	52,809	 	  	 	5.02	 	
Banking, Finance, Insurance & Real Estate	  	 	138,700	 	  	 	139,353	 	  	 	13.24	 	
Business Services	  	 	131,981	 	  	 	130,318	 	  	 	12.38	 	
Capital Equipment	  	 	18,335	 	  	 	17,993	 	  	 	1.71	 	
Chemicals, Plastics & Rubber	  	 	27,300	 	  	 	25,902	 	  	 	2.46	 	
Construction & Building	  	 	19,947	 	  	 	19,958	 	  	 	1.90	 	
Consumer Services	  	 	51,783	 	  	 	50,764	 	  	 	4.82	 	
Containers, Packaging & Glass	  	 	55,846	 	  	 	55,128	 	  	 	5.24	 	
Durable Consumer Goods	  	 	20,648	 	  	 	20,482	 	  	 	1.94	 	
Energy: Electricity	  	 	36,630	 	  	 	36,907	 	  	 	3.51	 	
Energy: Oil & Gas	  	 	11,715	 	  	 	11,327	 	  	 	1.08	 	
Environmental Industries	  	 	11,782	 	  	 	11,622	 	  	 	1.10	 	
Healthcare & Pharmaceuticals	  	 	65,037	 	  	 	64,140	 	  	 	6.09	 	
High Tech Industries	  	 	50,244	 	  	 	49,782	 	  	 	4.73	 	
Hotel, Gaming & Leisure	  	 	32,101	 	  	 	31,314	 	  	 	2.97	 	
Media: Advertising, Printing & Publishing	  	 	20,827	 	  	 	20,623	 	  	 	1.96	 	
Metals & Mining	  	 	10,329	 	  	 	10,168	 	  	 	0.97	 	
Non-durable Consumer Goods	  	 	41,220	 	  	 	40,581	 	  	 	3.85	 	
Retail	  	 	24,333	 	  	 	24,123	 	  	 	2.29	 	
Software	  	 	14,573	 	  	 	14,003	 	  	 	1.33	 	
Structured Finance	  	 	59,940	 	  	 	44,812	 	  	 	4.26	 	
Telecommunications	  	 	70,565	 	  	 	70,736	 	  	 	6.72	 	
Transportation: Cargo	  	 	19,582	 	  	 	19,134	 	  	 	1.82	 	
Transportation: Consumer	  	 	9,110	 	  	 	9,361	 	  	 	0.89	 	
Utilities: Electric	  	 	5,892	 	  	 	5,704	 	  	 	0.54	 	
Wholesale	  	 	13,789	 	  	 	12,229	 	  	 	1.16	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,079,720	 	  	$	1,052,666	 	  	 	100.00	% 	

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TCG BDC, INC.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2015
(dollar amounts in thousands)
The geographical composition of investments at fair value as of December 31, 2015 was as follows:

Geography	  	Amortized
Cost	 	  	Fair Value	 	  	% of Fair
Value	 	
Cayman Islands	  	$	59,940	 	  	$	44,812	 	  	 	4.26	% 	
Ireland	  	 	9,814	 	  	 	9,740	 	  	 	0.93	 	
United Kingdom	  	 	22,891	 	  	 	22,568	 	  	 	2.14	 	
United States	  	 	987,075	 	  	 	975,546	 	  	 	92.67	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	1,079,720	 	  	$	1,052,666	 	  	 	100.00	% 	

 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
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TCG BDC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016
(dollar amounts in thousands, except per share data)
1. ORGANIZATION
TCG BDC, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “TCG BDC” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company is managed by its investment adviser, Carlyle GMS Investment Management L.L.C. (“CGMSIM” or “Investment Adviser”), a wholly owned subsidiary of The Carlyle Group L.P. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).
The Company’s investment objective is to generate current income and capital appreciation primarily through debt investments in U.S. middle market companies, which the Company defines as companies with approximately $10 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), which the Company believes is a useful proxy for cash flow. The Company seeks to achieve its investment objective primarily through direct originations of secured debt, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with the balance of our assets invested in higher yielding investments (which may include unsecured debt, mezzanine debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms. Depending on market conditions, the Company expects that between 70% and 80% of the value of its assets will be invested in Middle Market Senior Loans. The Company expects that the composition of its portfolio will change over time given the Investment Adviser’s view on, among other things, the economic and credit environment (including with respect to interest rates) in which the Company is operating.
On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. If the Company has not consummated an initial public offering of its common stock that results in an unaffiliated public float of at least 15% of the aggregate capital commitments received prior to the date of such initial public offering (a “Qualified IPO”) by May 2, 2018, then the Board of Directors of the Company (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) will use its best efforts to wind down and/or liquidate and dissolve.
The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. The Company will remain an emerging growth company for up to five years following an initial public offering, although if the market value of the common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, the Company would cease to be an emerging growth company as of the following December 31.
The Company is externally managed by the Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle GMS Finance Administration L.L.C. (the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of The Carlyle Group L.P. “Carlyle” refers to The Carlyle Group L.P. and its affiliates and its
 
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consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global alternative asset manager publicly traded on NASDAQ Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.
Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.”
TCG BDC SPV LLC (the “SPV”) is a Delaware limited liability company that was formed on January 3, 2013. The SPV invests in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from “Carlyle GMS Finance SPV LLC” to “TCG BDC SPV LLC”.
On June 26, 2015, the Company completed a $400 million term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle GMS Finance MM CLO 2015-1 LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of the Company, and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 7 for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015.
On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016 (as amended, the “Limited Liability Company Agreement”) to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, for details.
As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).
To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“US GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Accounting Standards Update (“ASU”) 2013-08, Financial Services—Investment Companies  (“ASU 2013-08”):  Amendments to the Scope, Measurement and Disclosure Requirements.  The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPV and the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. US GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.
 
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The annual financial statements have been prepared in accordance with US GAAP for annual financial information and pursuant to the requirements for reporting on Form 10-K and Article 6 of Regulation S-X. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the years presented have been included.
Use of Estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3 for further information about fair value measurements.
Cash and cash equivalents
Cash and cash equivalents consist of demand deposits and highly liquid investments (e.g. money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash and cash equivalents are held with two large financial institutions and cash held in such financial institutions may, at times, exceed the Federal Deposit Insurance Corporation insured limit.
Revenue Recognition
Interest from Investments and Realized Gain/Loss on Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. As of December 31, 2016 and 2015 and for the years then ended, no loans in the portfolio contained PIK provisions.
 
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Interest income from investments in the “equity” class of collateralized loan obligation (“CLO”) funds, which are included in “structured finance obligations”, is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with Accounting Standards Codification (“ASC”) 325-40,  Beneficial Interests in Securitized Financials Assets . The Company monitors the expected cash inflows from its CLO equity investments, including the expected residual payments and the effective yield is determined and updated at least quarterly. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties, including the amount and timing of principal payments which are impacted by prepayments, repurchases, defaults, delinquencies and liquidations of or within the CLO funds. These uncertainties are difficult to predict and are subject to future events that could have impacted the Company’s estimates if the information was known at the time. As a result, actual results may differ significantly from these estimates.
Other Income
Other income may include income such as consent, waiver, amendment, syndication and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the years ended December 31, 2016, 2015 and 2014, the Company earned $6,635, $834 and $244, respectively, in other income, primarily from syndication and prepayment fees.
Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of December 31, 2016, fair value of the loan on non-accrual status was $7,628, which represents approximately 0.5% of total investments at fair value. The remaining first and second lien debt investments were performing and current on their interest payments as of December 31, 2016 and for the year then ended. As of December 31, 2015, no loans in the portfolio were on non-accrual status.
SPV Credit Facility, Credit Facility and 2015-1 Notes Related Costs, Expenses and Deferred Financing Costs (See Note 6, Borrowings, and Note 7, 2015-1 Notes)
Interest expense and unused commitment fees on the SPV Credit Facility and Credit Facility are recorded on an accrual basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.
The SPV Credit Facility and Credit Facility are recorded at carrying value, which approximates fair value.
Deferred financing costs include capitalized expenses related to the closing or amendments of the SPV Credit Facility and Credit Facility. Amortization of deferred financing costs for each credit facility is computed on the straight-line basis over the respective term of each credit facility, except for a portion that was accelerated in connection with the amendment of the SPV Credit Facility as described in Note 6. The unamortized balance of such costs is included in deferred financing costs in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in credit facility fees in the accompanying Consolidated Statements of Operations.
 
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Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1 Notes. Amortization of debt issuance costs for the 2015-1 Notes is computed on the effective yield method over the term of the 2015-1 Notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the 2015-1 Notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense in the accompanying Consolidated Statements of Operations.
The 2015-1 Notes are recorded at carrying value, which approximates fair value.
Organization and Offering Costs
The Company agreed to reimburse the Investment Adviser for initial organization and offering costs incurred on behalf of the Company up to $1,500. As of December 31, 2016 and 2015, $1,500 of organization and offering costs had been incurred by the Company and $57 of excess organization and offering costs had been incurred by the Investment Adviser since inception. The $1,500 of incurred organization and offering costs are allocated to all stockholders based on their respective capital commitment and are re-allocated amongst all stockholders at the time of each capital drawdown subsequent to the Initial Closing. The Company’s organization costs incurred are expensed and the offering costs are charged against equity when incurred.
Income Taxes
For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.
The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.
In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements.
The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.
The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company.
 
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Capital Calls and Dividends and Distributions to Common Stockholders
The Company records the shares issued in connection with capital calls as of the effective date of the capital call. To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.
The Company has adopted a dividend reinvestment plan that provides for reinvestment of any distributions on behalf of its stockholders, for those who have elected to participate in the plan. As a result of adopting such a plan, if the Board of Directors authorizes, and the Company declares a cash dividend or distribution, the stockholders who have elected to participate in the dividend reinvestment plan would have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Prior to a Qualified IPO, the Company intends to use primarily newly issued shares of its common stock to implement the plan issued at the net asset value per share most recently determined by the Board of Directors. After a Qualified IPO, the Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share as of the close of business on the relevant payment date for such dividend or distribution. If the market value per share is less than the net asset value per share as of the close of business on the relevant payment date, the plan administrator would purchase the common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.
Functional Currency
The functional currency of the Company is the U.S. Dollar and all transactions were in U.S. Dollars.
Recent Accounting Standards Updates
On April 7, 2015, the Financial Accounting Standards Board issued ASU 2015-3, Interest—Imputation of Interest (Subtopic 835-30) Simplifying the Presentation of Debt Issuance Costs  (“ASU 2015-3”). ASU 2015-3 requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts and premiums. This guidance was effective for the Company on January 1, 2016 and the ASU requires the guidance to be applied on a retrospective basis. The Company adopted this guidance on January 1, 2016 and reclassified $2,356 of debt issuance costs from deferred financing costs to 2015-1 Notes payable in the accompanying Consolidated Statement of Assets and Liabilities as of December 31, 2015.
In May 2015, the Financial Accounting Standards Board issued ASU 2015-7, Fair Value Measurement (Topic 820)—Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (“ASU 2015-7”). ASU 2015-7 provides amended guidance on the disclosures for investments in certain entities that calculate net asset value per share (or its equivalent). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The guidance is effective for the Company on January 1, 2016. The Company adopted the new accounting guidance on January 1, 2016 and presented the fair value disclosures accordingly.
 
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In August 2015, the Financial Accounting Standards Board issued ASU 2015-15, Interest—Imputation of Interest (Sub-topic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements  (“ASU 2015-15”). ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. In accordance with ASU 2015-15, an entity may defer and present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This guidance was effective for the Company on January 1, 2016. The Company adopted the new accounting guidance and it did not have a material impact on the Company’s consolidated financial statements.
3. FAIR VALUE MEASUREMENTS
The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 820,  Fair Value Measurement  (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. The Company values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Company determines whether the quote obtained is sufficient according to US GAAP to determine the fair value of the security. The Company may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.
Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or the Company’s Board of Directors, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of members of senior management; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) the Audit Committee of the Board of Directors (the “Audit Committee”) reviews the assessments of the Investment Adviser and the third-party valuation firm and provides the Board of Directors with any recommendations with respect to changes to the fair value of each investment in the portfolio; and (v) the Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.
All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:
 
 	•	 	the nature and realizable value of any collateral;	
 
 	•	 	call features, put features and other relevant terms of debt;	
 
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 	•	 	the portfolio company’s leverage and ability to make payments;	
 
 	•	 	the portfolio company’s public or private credit rating;	
 
 	•	 	the portfolio company’s actual and expected earnings and discounted cash flow;	
 
 	•	 	prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;	
 
 	•	 	the markets in which the portfolio company does business and recent economic and/or market events; and	
 
 	•	 	comparisons to comparable transactions and publicly traded securities.	
Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of December 31, 2016, 2015 and 2014.
US GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.
Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:
 
 	•	 	Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. The types of financial instruments in Level 1 generally include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.	
 
 	•	 	Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. The type of financial instruments in this category generally includes less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.	
 
 	•	 	Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are in this category generally include investments in privately-held entities, CLOs, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.	
 
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In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.
Transfers between levels, if any, are recognized at the beginning of the year in which the transfers occur. For the years ended December 31, 2016 and 2015, there were no transfers between levels.
The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of December 31, 2016 and 2015:

 	  	December 31, 2016	 	
 	  	Level 1	 	  	Level 2	 	  	Level 3	 	  	Total	 	
Assets	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
First Lien Debt	  	$	—  	 	  	$	—  	 	  	$	1,139,548	 	  	$	1,139,548	 	
Second Lien Debt	  	 	—  	 	  	 	—  	 	  	 	171,864	 	  	 	171,864	 	
Structured Finance Obligations	  	 	—  	 	  	 	—  	 	  	 	5,216	 	  	 	5,216	 	
Equity Investments	  	 	—  	 	  	 	—  	 	  	 	6,474	 	  	 	6,474	 	
Investment Fund	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Mezzanine Loan	  	 	—  	 	  	 	—  	 	  	 	62,384	 	  	 	62,384	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Subtotal	  	$	—  	 	  	$	—  	 	  	$	1,385,486	 	  	$	1,385,486	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Investments measured at net asset value (1)	  	 	 	 	  	 	 	 	  	 	 	 	  	$	37,273	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	 	 	  	 	 	 	  	$	1,422,759	 	

 	  	December 31, 2015	 	
 	  	Level 1	 	  	Level 2	 	  	Level 3	 	  	Total	 	
Assets	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
First Lien Debt	  	$	—  	 	  	$	9,575	 	  	$	785,459	 	  	$	795,034	 	
Second Lien Debt	  	 	—  	 	  	 	—  	 	  	 	210,396	 	  	 	210,396	 	
Structured Finance Obligations	  	 	—  	 	  	 	—  	 	  	 	44,812	 	  	 	44,812	 	
Equity Investments	  	 	—  	 	  	 	—  	 	  	 	2,424	 	  	 	2,424	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	—  	 	  	$	9,575	 	  	$	1,043,091	 	  	$	1,052,666	 	

(1)	Amount represents the Company’s subordinated loan and member’s interest investments in Credit Fund. The fair value of these investments has been estimated using the net asset value of the Company’s ownership interests in Credit Fund.	
 
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The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:

 	  	Financial Assets
For the year ended December 31, 2016	 	
 	  	First Lien
Debt	 	 	Second
Lien Debt	 	 	Structured
Finance
Obligations	 	 	Equity
Investments	 	  	Investment
Fund -
Mezzanine
Loan	 	 	Total	 	
Balance, beginning of year	  	$	785,459	 	 	$	210,396	 	 	$	44,812	 	 	$	2,424	 	  	$	—  	 	 	$	1,043,091	 	
Purchases	  	 	594,633	 	 	 	38,380	 	 	 	—  	 	 	 	2,857	 	  	 	84,784	 	 	 	720,654	 	
Sales	  	 	(77,434	) 	 	 	(25,398	) 	 	 	(33,327	) 	 	 	—  	 	  	 	—  	 	 	 	(136,159	) 	
Paydowns	  	 	(167,699	) 	 	 	(57,855	) 	 	 	(7,041	) 	 	 	—  	 	  	 	(22,400	) 	 	 	(254,995	) 	
Accretion of discount	  	 	4,757	 	 	 	850	 	 	 	(31	) 	 	 	—  	 	  	 	—  	 	 	 	5,576	 	
Net realized gains (losses)	  	 	(40	) 	 	 	275	 	 	 	(10,302	) 	 	 	—  	 	  	 	—  	 	 	 	(10,067	) 	
Net change in unrealized appreciation (depreciation)	  	 	(128	) 	 	 	5,216	 	 	 	11,105	 	 	 	1,193	 	  	 	—  	 	 	 	17,386	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Balance, end of year	  	$	1,139,548	 	 	$	171,864	 	 	$	5,216	 	 	$	6,474	 	  	$	62,384	 	 	$	1,385,486	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	 	 	 	 	
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of December 31, 2016 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated Statements of Operations	  	$	(1,000	) 	 	$	3,331	 	 	$	1,372	 	 	$	1,193	 	  	 	—  	 	 	$	4,896	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	Financial Assets
For the year ended December 31, 2015	 	
 	  	First Lien
Debt	 	 	Second
Lien Debt	 	 	Structured
Finance
Obligations	 	 	Equity
Investments	 	  	Total	 	
Balance, beginning of year	  	$	505,212	 	 	$	107,874	 	 	$	76,001	 	 	$	—  	 	  	$	689,087	 	
Purchases	  	 	472,342	 	 	 	113,195	 	 	 	10,059	 	 	 	2,215	 	  	 	597,811	 	
Sales	  	 	(17,454	) 	 	 	—  	 	 	 	(19,930	) 	 	 	—  	 	  	 	(37,384	) 	
Paydowns	  	 	(174,427	) 	 	 	(8,025	) 	 	 	(10,155	) 	 	 	—  	 	  	 	(192,607	) 	
Accretion of discount	  	 	2,677	 	 	 	277	 	 	 	20	 	 	 	—  	 	  	 	2,974	 	
Net realized gains (losses)	  	 	208	 	 	 	—  	 	 	 	956	 	 	 	—  	 	  	 	1,164	 	
Net change in unrealized appreciation (depreciation)	  	 	(3,099	) 	 	 	(2,925	) 	 	 	(12,139	) 	 	 	209	 	  	 	(17,954	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Balance, end of year	  	$	785,459	 	 	$	210,396	 	 	$	44,812	 	 	$	2,424	 	  	$	1,043,091	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of December 31, 2015 included in net change in unrealized appreciation (depreciation) on investments non-controlled/non-affiliated on the Consolidated Statements of Operations	  	$	(4,423	) 	 	$	(2,838	) 	 	$	(12,219	) 	 	$	209	 	  	$	(19,271	) 	

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The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:
Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Company carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value its portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.
Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.
Investments in structured finance obligations are generally valued using a discounted cash flow and/or consensus pricing.
Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes EBITDA multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.
Investments in the subordinated loan and member’s interest of the investment fund are valued using the net asset value of the Company’s ownership interest in the investment fund and investments in the mezzanine loan of the investment fund are valued using discounted cash flow analysis with expected repayment rate of principal and interest.
The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of December 31, 2016 and 2015:

 	  	Fair Value as
of December 31,
2016	 	  	Valuation Techniques	  	Significant
Unobservable
Inputs	  	Range	 	 	Weighted
Average	 	 	
 	  	 	 	  	 	  	 	  	Low	 	 	High	 	 	 	 	 	 	 	 	 	
Investments in First Lien Debt	  	$	986,695	 	  	Discounted Cash Flow	  	Discount Rate	  	 	4.50	% 	 	 	16.33	% 	 	 	7.94	% 	 	 	 	 	 	
 	  	 	152,853	 	  	Consensus Pricing	  	Indicative Quotes	  	 	40.75	 	 	 	106.36	 	 	 	97.29	 	 	 	 	 	 	
 	  	 	 	 	  	 	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total First Lien Debt	  	 	1,139,548	 	  	 	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	 	 	 	  	 	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Second Lien Debt	  	 	153,657	 	  	Discounted Cash Flow	  	Discount Rate	  	 	7.93	% 	 	 	11.05	% 	 	 	9.75	% 	 	 	 	 	 	
 	  	 	16,525	 	  	Consensus Pricing	  	Indicative Quotes	  	 	83.17	 	 	 	100.88	 	 	 	94.48	 	 	 	 	 	 	
 	  	 	1,682	 	  	Income Approach	  	Discount Rate	  	 	15.32	% 	 	 	15.32	% 	 	 	15.32	% 	 	 	 	 	 	
 	  	 	 	 	  	Market Approach	  	Comparable
Multiple	  	 	8.01x	 	 	 	8.68x	 	 	 	8.34x	 	 	 	 	 	 	
 	  	 	 	 	  	 	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Second Lien Debt	  	 	171,864	 	  	 	  	 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

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 	 	Fair Value as
of December 31,
2016	 	 	Valuation Techniques	 	 	Significant
Unobservable
Inputs	 	 	Range	 	 	Weighted
Average	 	 	
 	 	 	 	 	 	 	 	 	 	 	Low	 	 	High	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Structured Finance Obligations	 	 	2,761	 	 	 	Discounted Cash Flow	 	 	 	Discount Rate	 	 	 	22.00	% 	 	 	22.00	% 	 	 	22.00	% 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Default Rate	 	 	 	1.13	 	 	 	1.13	 	 	 	1.13	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Prepayment Rate	 	 	 	35.00	 	 	 	35.00	 	 	 	35.00	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Recovery Rate	 	 	 	65.00	 	 	 	65.00	 	 	 	65.00	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	2,455	 	 	 	Consensus Pricing	 	 	 	Indicative Quotes	 	 	 	0.10	 	 	 	48.79	 	 	 	48.50	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Structured Finance Obligations	 	 	5,216	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Equity	 	 	6,474	 	 	 	Income Approach	 	 	 	Discount Rate	 	 	 	8.68	% 	 	 	10.40	% 	 	 	9.41	% 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Market Approach	 	 	 
	Comparable
Multiple	 
 	 	 	7.22x	 	 	 	13.71x	 	 	 	11.00x	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Equity Investments	 	 	6,474	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Investment Fund – Mezzanine Loan	 	 	62,384	 	 	 	Income Approach	 	 	 	Repayment Rate	 	 	 	100.00	% 	 	 	100.00	% 	 	 	100.00	% 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investment Fund – Mezzanine Loan	 	 	62,384	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Level 3 Investments	 	$	1,385,486	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

 	 	Fair Value as
of December 31,
2015	 	 	Valuation Techniques	 	 	Significant
Unobservable
Inputs	 	 	Range	 	 	Weighted
Average	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Low	 	 	High	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in First Lien Debt	 	$	618,172	 	 	 	Discounted Cash Flow	 	 	 	Discount Rate	 	 	 	5.57	% 	 	 	13.37	% 	 	 	8.19	% 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	167,287	 	 	 	Consensus Pricing	 	 	 	Indicative Quotes	 	 	 	96.50	 	 	 	99.38	 	 	 	97.97	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total First Lien Debt	 	 	785,459	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Second Lien Debt	 	 	161,907	 	 	 	Discounted Cash Flow	 	 	 	Discount Rate	 	 	 	9.37	% 	 	 	15.44	% 	 	 	10.56	% 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	48,489	 	 	 	Consensus Pricing	 	 	 	Indicative Quotes	 	 	 	93.25	 	 	 	101.25	 	 	 	96.86	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Second Lien Debt	 	 	210,396	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Structured Finance Obligations	 	 	43,016	 	 	 	Discounted Cash Flow	 	 	 	Discount Rate	 	 	 	13.00	% 	 	 	17.50	% 	 	 	14.05	% 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Default Rate	 	 	 	0.19	 	 	 	1.56	 	 	 	1.09	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Prepayment Rate	 	 	 	18.16	 	 	 	40.00	 	 	 	22.09	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	Recovery Rate	 	 	 	69.27	 	 	 	75.00	 	 	 	74.36	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	1,796	 	 	 	Consensus Pricing	 	 	 	Indicative Quotes	 	 	 	0.18	 	 	 	63.00	 	 	 	59.69	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Structured Finance Obligations	 	 	44,812	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investments in Equity	 	 	2,424	 	 	 	Income Approach	 	 	 	Discount Rate	 	 	 	10.19	% 	 	 	10.90	% 	 	 	10.42	% 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Market Approach	 	 	 
	Comparable
Multiple	 
 	 	 	9.94x	 	 	 	11.09x	 	 	 	10.71x	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Equity Investments	 	 	2,424	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Level 3 Investments	 	$	1,043,091	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

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The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates and indicative quotes. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in indicative quotes in isolation may result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in structured finance obligations are discount rates, default rates, prepayment rates, recovery rates and indicative quotes. Significant increases in discount rates, default rates or prepayment rates in isolation would result in a significantly lower fair value measurement, while a significant increase in recovery rates in isolation would result in a significantly higher fair value. Significant decreases in indicative quotes in isolation may result in a significantly lower fair value measurement.
The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples would result in a significantly lower fair value measurement.
Financial instruments disclosed but not carried at fair value
The following table presents the carrying value and fair value of the Company’s secured borrowings disclosed but not carried at fair value as of December 31, 2016 and 2015:

 	  	December 31, 2016	 	  	December 31, 2015	 	
 	  	Carrying Value	 	  	Fair Value	 	  	Carrying Value	 	  	Fair Value	 	
Secured borrowings	  	$	421,885	 	  	$	421,885	 	  	$	234,313	 	  	$	234,313	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	421,885	 	  	$	421,885	 	  	$	234,313	 	  	$	234,313	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The carrying values of the secured borrowings approximate their respective fair values and are categorized as Level 3 within the hierarchy. Secured borrowings are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s secured borrowings are discount rates. Significant increases in discount rates would result in a significantly lower fair value measurement.
The following table represents the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1 Notes disclosed but not carried at fair value as of December 31, 2016 and 2015:

 	  	December 31, 2016	 	  	December 31, 2015	 	
 	  	Carrying Value	 	  	Fair Value	 	  	Carrying Value	 	  	Fair Value	 	
Aaa/AAA Class A-1A Notes	  	$	160,000	 	  	$	160,072	 	  	$	160,000	 	  	$	157,200	 	
Aaa/AAA Class A-1B Notes	  	 	40,000	 	  	 	39,960	 	  	 	40,000	 	  	 	39,700	 	
Aaa/AAA Class A-1C Notes	  	 	27,000	 	  	 	26,951	 	  	 	27,000	 	  	 	26,823	 	
Aa2 Class A-2 Notes	  	 	46,000	 	  	 	45,784	 	  	 	46,000	 	  	 	45,122	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	273,000	 	  	$	272,767	 	  	$	273,000	 	  	$	268,845	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
The fair value determination of the Company’s 2015-1 Notes was based on the market quotation(s) received from broker/dealer(s). These fair value measurements were based on significant inputs not observable and thus represent Level 3 measurements as defined in the accounting guidance for fair value measurement.
The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.
 
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4. RELATED PARTY TRANSACTIONS
Investment Advisory Agreement
On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The initial term of the Investment Advisory Agreement is two years from April 3, 2013 and, unless terminated earlier, the Investment Advisory Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On March 20, 2017, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Investment Advisory Agreement for a one year period. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Investment Adviser provides investment advisory services to the Company. For providing these services, the Investment Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.
Prior to a Qualified IPO, the base management fee is calculated and payable quarterly in arrears at an annual rate of 1.50% of the average daily gross assets of the Company for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired through the incurrence of debt from use of the SPV Credit Facility, Credit Facility and 2015-1 Notes (see Note 6, Borrowings, and Note 7, 2015-1 Notes). For purposes of this calculation, cash and cash equivalents include any temporary investments in cash-equivalents, U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment. Base management fees for any partial quarter are prorated. The Investment Adviser waived its right to receive one-third (0.50%) of the base management fee prior to a Qualified IPO. The fee waiver will terminate if and when a Qualified IPO has been consummated. Any waived base management fees are not subject to recoupment by the Investment Adviser.
The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.
Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income does not include, in the case of investments with a deferred interest feature (such as OID, debt instruments with pay-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.
Prior to any Qualified IPO of the Company’s common stock, pre-incentive fee net investment income, expressed as a rate of return on the average daily Hurdle Calculation Value (as defined below) throughout the immediately preceding calendar quarter, is compared to a “hurdle rate” of 1.50% per quarter (6% annualized). “Hurdle Calculation Value” means, on any given day, the sum of (x) the value of net assets as of the end of the calendar quarter immediately preceding such day plus (y) the aggregate amount of capital drawn from investors (or reinvested in the Company pursuant to a dividend reinvestment plan) from the beginning of the current
 
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quarter to such day minus (z) the aggregate amount of distributions (including share repurchases) made by the Company from the beginning of the current quarter to such day but only to the extent such distributions were not declared and accounted for on the books and records in a previous quarter.
The Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:
 
 	•	 	no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle of 1.50%;	
 
 	•	 	100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle but is less than 1.875% in any calendar quarter (7.50% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle but is less than 1.875%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 20% of the Company’s pre-incentive fee net investment income as if a hurdle did not apply if this net investment income exceeds 1.875% in any calendar quarter; and	
 
 	•	 	20% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.875% in any calendar quarter (7.50% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle is reached and the catch-up is achieved, 20% of all pre-incentive fee investment income thereafter is allocated to the Investment Adviser.	
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may 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 on a cumulative basis and unrealized capital depreciation.
The Company will defer payment of any incentive fee otherwise earned by the Investment Adviser if, during the most recent four full calendar quarter periods (or, if less, the number of full calendar quarters completed since the initial drawdown of capital from the stockholders, “Initial Drawdown”) ending on or prior to the date such payment is to be made, the sum of (a) the aggregate distributions to stockholders and (b) the change in net assets (defined as gross assets less indebtedness and before taking into account any incentive fees payable during the period) is less than 6.0% of net assets (defined as gross assets less indebtedness) at the beginning of such period, provided, that such percentage will be appropriately prorated during the four full calendar quarters immediately following the Initial Drawdown. These calculations are adjusted for any share issuances or repurchases. Any deferred incentive fees are carried over for payment in subsequent calculation periods. The Investment Adviser may earn an incentive fee under the Investment Advisory Agreement on the Company’s repurchase of debt issued by the Company at a gain.
For the years ended December 31, 2016, 2015 and 2014, base management fees were $12,359, $8,907 and $4,373, respectively (net of waiver of $6,180, $4,454 and $2,186, respectively), incentive fees related to pre-incentive fee net investment income were $14,905, $8,881 and $3,578, respectively, and there were no incentive fees related to realized capital gains. For the years ended December 31, 2016, 2015 and 2014, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of December 31, 2016, 2015 and 2014, respectively. The accrual for any capital gains incentive fee under US GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual.
 
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As of December 31, 2016 and 2015, $8,157 and $5,277, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.
Administration Agreement
On April 3, 2013, the Company’s Board of Directors approved an administration agreement (the “Administration Agreement”) between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Compliance Officer and Chief Financial Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.
The initial term of the Administration Agreement is two years from April 3, 2013 and, unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On March 20, 2017, the Company’s Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.
For the years ended December 31, 2016, 2015 and 2014, the Company incurred $703, $595 and $626, respectively, in fees under the Administrative Agreement, which were included in administrative service fees in the accompanying Consolidated Statements of Operations. As of December 31, 2016 and 2015, $137 and $97, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.
Sub-Administration Agreements
On April 3, 2013, the Administrator entered into sub-administration agreements with Carlyle Employee Co. and CELF Advisors LLP (“CELF”) (the “Carlyle Sub-Administration Agreements”). Pursuant to the Carlyle Sub-Administration Agreements, Carlyle Employee Co. and CELF provide the Administrator with access to personnel.
On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreements, the “Sub-Administration Agreements”). On March 11, 2015, the Company’s Board of Directors, including a majority of the Independent Directors, approved an amendment to the State Street Sub-Administration Agreement. The initial term of the State Street Sub-Administration Agreement ends on April 1, 2017 and, unless terminated earlier, the State Street Sub-Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’
 
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written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.
For the years ended December 31, 2016, 2015 and 2014, fees incurred in connection with the State Street Sub-Administration Agreement, which amounted to $602, $486 and $222, respectively, were included in other general and administrative in the accompanying Consolidated Statements of Operations. As of December 31, 2016 and 2015, $159 and $138, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.
Placement Fees
On April 3, 2013, the Company entered into a placement fee arrangement with TCG Securities, L.L.C. (“TCG”), a licensed broker-dealer and an affiliate of the Investment Adviser, which may require stockholders to pay a placement fee to TCG for TCG’s services.
For the years ended December 31, 2016, 2015 and 2014, TCG earned placement fees of $12, $6 and $1, respectively, from the Company’s stockholders in connection with the issuance or sale of the Company’s common stock.
Board of Directors
The Company’s Board of Directors currently consists of five members, three of whom are Independent Directors. On April 3, 2013, the Board of Directors also established an Audit Committee consisting of its Independent Directors, and may establish additional committees in the future. For the years ended December 31, 2016, 2015 and 2014, the Company incurred $553, $419 and $395, respectively, in fees and expenses associated with its Independent Directors and Audit Committee. As of December 31, 2016 and 2015, $0 was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities. As of December 31, 2016 and 2015, current directors had committed $765 in capital commitments to the Company.
Transactions
On May 13, 2016 and October 14, 2016, the Company sold investments to a wholly owned subsidiary of Credit Fund for proceeds of $20,038 and $19,800, respectively. The Company had no realized gain or loss on these trades. See Note 5, Middle Market Credit Fund, LLC, for further information about Credit Fund.
5. MIDDLE MARKET CREDIT FUND, LLC
Overview
On February 29, 2016, the Company and Credit Partners entered into the Limited Liability Company Agreement to co-manage Credit Fund, an unconsolidated Delaware limited liability company. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $400,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company.
Together with Credit Partners, the Company co-invests through Credit Fund. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle
 
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Market Credit Fund SPV, LLC (the “Credit Fund Sub”), a Delaware limited liability company, was formed on April 5, 2016. Credit Fund Sub primarily invests in first lien loans of middle market companies. Credit Fund Sub is a wholly owned subsidiary of Credit Fund and is consolidated in Credit Fund’s consolidated financial statements commencing from the date of its formation.
Selected Financial Data
Since inception of Credit Fund and through December 31, 2016, the Company and Credit Partners each made capital contributions of $1 in members’ equity and $35,000 in subordinated loans to Credit Fund. Additionally, Credit Fund had net borrowings of $62,384 in mezzanine loans under a revolving credit facility with the Company (the “Credit Fund Facility”). As of December 31, 2016, Credit Fund had subordinated loans and members’ capital of $74,547 and mezzanine loans of $62,384. The Company’s ownership interest in such subordinated loans and members’ capital was $37,273 and in such mezzanine loans was $62,384.
As of December 31, 2016, Credit Fund held cash and cash equivalents totaling $6,103.
As of December 31, 2016, Credit Fund had total investments at fair value of $437,829, which was comprised of first lien senior secured loans and second lien senior secured loans to 28 portfolio companies. As of December 31, 2016, no loans in Credit Fund’s portfolio were on non-accrual status or contained PIK provisions. All investments in the portfolio were floating rate debt instruments with interest rate floors. The portfolio companies in Credit Fund are U.S. middle market companies in industries similar to those in which the Company may invest directly. Additionally, as of December 31, 2016, Credit Fund had commitments to fund various undrawn revolvers and delayed draw investments to its portfolio companies totaling $30,361.
Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of December 31, 2016:

 	  	As of December 31,
2016	 	
Senior secured loans (1)	  	$	439,086	 	
Weighted average yields of senior secured loans based on amortized cost  (2)	  	 	6.47	% 	
Weighted average yields of senior secured loans based on fair value  (2)	  	 	6.41	% 	
Number of portfolio companies in Credit Fund	  	 	28	 	
 
(1)	At par/principal amount.	
(2)	Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of December 31, 2016. Weighted average yield on debt and income producing securities at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at fair value included in such securities. Weighted average yield on debt and income producing securities at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned on accruing debt included in such securities, divided by (b) total first lien and second lien debt at amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above.	
 
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Consolidated Schedule of Investments as of December 31, 2016	 	
Investments (1)	  	Industry	  	Interest Rate (2)	  	Maturity
Date	  	Par/
Principal
Amount	 	  	Amortized
Cost  (5)	 	  	Fair
Value  (6)	 	
First Lien Debt (99.31% of fair value)	  	 	  	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	
AM Conservation Holding Corporation  (2)(3)(4)	  	Energy: Electricity	  	L + 4.75% (1.00% Floor)	  	10/31/2022	  	$	30,000	 	  	$	29,721	 	  	$	29,925	 	
Datapipe, Inc. (2)(3)(4)(11)	  	Telecommunications	  	L + 4.75% (1.00% Floor)	  	3/15/2019	  	 	9,750	 	  	 	9,654	 	  	 	9,764	 	
Dimora Brands, Inc. (fka TK USA Enterprises, Inc.) (2)(3)(4)(11)	  	Construction & Building	  	L + 4.50% (1.00% Floor)	  	4/4/2023	  	 	19,850	 	  	 	19,580	 	  	 	19,723	 	
Diversitech Corporation  (2)(4)(10)(11)	  	Capital Equipment	  	P + 3.50%	  	11/19/2021	  	 	14,803	 	  	 	14,617	 	  	 	14,803	 	
DTI Holdco, Inc. (2)(3)(4)(7)	  	High Tech Industries	  	L + 5.25% (1.00% Floor)	  	9/30/2023	  	 	19,950	 	  	 	19,751	 	  	 	19,651	 	
DYK Prime Acquisition LLC  (2)(3)(4)	  	Chemicals, Plastics & Rubber	  	L + 4.75% (1.00% Floor)	  	4/1/2022	  	 	5,775	 	  	 	5,735	 	  	 	5,775	 	
EAG, Inc. (2)(3)(4)(11)	  	Services: Business	  	L + 4.25% (1.00% Floor)	  	7/28/2018	  	 	8,713	 	  	 	8,686	 	  	 	8,720	 	
EIP Merger Sub, LLC (Evolve IP)  (2)(3)(4)(8)	  	Telecommunications	  	L + 6.25% (1.00% Floor)	  	6/7/2021	  	 	22,971	 	  	 	22,323	 	  	 	22,509	 	
EIP Merger Sub, LLC (Evolve IP)  (2)(3)(4)(9)	  	Telecommunications	  	L + 6.25% (1.00% Floor)	  	6/7/2021	  	 	1,500	 	  	 	1,455	 	  	 	1,468	 	
Empower Payments Acquisitions, Inc.  (2)(3)(7)	  	Media: Advertising, Printing & Publishing	  	L + 5.50% (1.00% Floor)	  	11/30/2023	  	 	17,500	 	  	 	17,154	 	  	 	17,279	 	
Generation Brands Holdings, Inc.  (2)(3)(4)	  	Durable Consumer Goods	  	L + 5.00% (1.00% Floor)	  	6/10/2022	  	 	19,900	 	  	 	19,712	 	  	 	20,099	 	
Jensen Hughes, Inc.  (2)(3)(4)(10)	  	Utilities: Electric	  	L + 5.00% (1.00% Floor)	  	12/4/2021	  	 	20,409	 	  	 	20,188	 	  	 	20,327	 	
Kestra Financial, Inc.  (2)(3)(4)	  	Banking, Finance, Insurance & Real Estate	  	L + 5.25% (1.00% Floor)	  	6/24/2022	  	 	19,900	 	  	 	19,632	 	  	 	19,814	 	
MSHC, Inc. (2)(3)(4)(10)	  	Construction & Building	  	L + 5.00% (1.00% Floor)	  	7/19/2021	  	 	13,177	 	  	 	13,062	 	  	 	13,003	 	
PAI Holdco, Inc. (Parts Authority)  (2)(3)(4)	  	Automotive	  	L + 4.75% (1.00% Floor)	  	12/30/2022	  	 	9,950	 	  	 	9,886	 	  	 	9,950	 	
Pasternack Enterprises, Inc. (Infinite RF)  (2)(3)(4)	  	Capital Equipment	  	L + 5.00% (1.00% Floor)	  	5/27/2022	  	 	11,941	 	  	 	11,844	 	  	 	11,941	 	
Q Holding Company (2)(3)(4)	  	Automotive	  	L + 5.00% (1.00% Floor)	  	12/18/2021	  	 	13,964	 	  	 	13,828	 	  	 	13,941	 	
QW Holding Corporation (Quala)  (2)(3)(4)(7)(10)	  	Environmental Industries	  	L + 6.75% (1.00% Floor)	  	8/31/2022	  	 	8,975	 	  	 	8,413	 	  	 	9,030	 	
Restaurant Technologies, Inc. (2)(3)(4)	  	Retail	  	L + 4.75% (1.00% Floor)	  	11/23/2022	  	 	23,514	 	  	 	23,117	 	  	 	23,443	 	
RelaDyne Inc. (2)(3)(4)(10)	  	Wholesale	  	L + 5.25% (1.00% Floor)	  	7/22/2022	  	 	14,000	 	  	 	13,871	 	  	 	13,969	 	
Systems Maintenance Services Holding, Inc.  (2)(3)(4)	  	High Tech Industries	  	L + 5.00% (1.00% Floor)	  	10/30/2023	  	 	12,000	 	  	 	11,885	 	  	 	12,001	 	
T2 Systems Canada, Inc.  (2)(3)(4)(11)	  	Transportation: Consumer	  	L + 6.75% (1.00% Floor)	  	9/28/2022	  	 	2,700	 	  	 	2,635	 	  	 	2,727	 	
T2 Systems, Inc.  (2)(3)(4)(10)(11)	  	Transportation: Consumer	  	L + 6.75% (1.00% Floor)	  	9/28/2022	  	 	15,300	 	  	 	14,888	 	  	 	15,473	 	
The Original Cakerie, Ltd. (Canada)  (2)(3)(4)(10)	  	Beverage, Food & Tobacco	  	L + 5.00% (1.00% Floor)	  	7/20/2021	  	 	7,009	 	  	 	6,946	 	  	 	7,009	 	
The Original Cakerie, Co. (Canada)  (2)(3)(4)	  	Beverage, Food & Tobacco	  	L + 5.50% (1.00% Floor)	  	7/20/2021	  	 	3,621	 	  	 	3,591	 	  	 	3,621	 	
U.S. Acute Care Solutions, LLC  (2)(3)(4)	  	Health & Pharmaceuticals	  	L + 5.00% (1.00% Floor)	  	5/15/2021	  	 	26,400	 	  	 	26,154	 	  	 	26,336	 	
U.S. Anesthesia Partners, Inc.  (2)(3)(4)	  	Health & Pharmaceuticals	  	L + 5.00% (1.00% Floor)	  	12/31/2019	  	 	10,374	 	  	 	10,275	 	  	 	10,362	 	
Vantage Specialty Chemicals, Inc.  (2)(3)(4)(11)	  	Chemicals, Plastics & Rubber	  	L + 4.50% (1.00% Floor)	  	2/5/2021	  	 	17,910	 	  	 	17,786	 	  	 	17,903	 	
 
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Consolidated Schedule of Investments as of December 31, 2016	 	
Investments (1)	  	Industry	  	Interest Rate (2)	  	Maturity
Date	  	Par/
Principal
Amount	 	  	Amortized
Cost  (5)	 	  	Fair
Value  (6)	 	
WIRB – Copernicus Group, Inc.  (2)(3)(4)	  	Health & Pharmaceuticals	  	L + 5.00% (1.00% Floor)	  	8/12/2022	  	$	7,980	 	  	$	7,916	 	  	$	8,050	 	
Zest Holdings, LLC (2)(3)(4)	  	Durable Consumer Goods	  	L + 4.75% (1.00% Floor)	  	8/16/2020	  	 	8,700	 	  	 	8,658	 	  	 	8,749	 	
Zywave, Inc. (2)(3)(4)(7)(10)	  	High Tech Industries	  	L + 5.00% (1.00% Floor)	  	11/17/2022	  	 	17,500	 	  	 	17,315	 	  	 	17,434	 	
 	  	 	  	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	
First Lien Debt Total	  	 	  	 	  	 	  	 	 	 	  	$	430,278	 	  	$	434,799	 	
 	  	 	  	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	
Second Lien Debt (0.69% of fair value)	  	 	  	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	
Vantage Specialty Chemicals, Inc.  (2)(3)(4)(11)	  	Chemicals, Plastics & Rubber	  	L + 8.75% (1.00% Floor)	  	2/5/2022	  	$	2,000	 	  	$	1,960	 	  	$	1,987	 	
Zywave, Inc. (2)(3)(4)	  	High Tech Industries	  	L + 9.00% (1.00% Floor)	  	11/17/2023	  	 	1,050	 	  	 	1,034	 	  	 	1,043	 	
 	  	 	  	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	
Second Lien Debt Total	  	 	  	 	  	 	  	 	 	 	  	$	2,994	 	  	$	3,030	 	
 	  	 	  	 	  	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Investments	  	 	  	 	  	 	  	 	 	 	  	$	433,272	 	  	$	437,829	 	

(1)	Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2016, the geographical composition of investments as a percentage of fair value was 2.43% in Canada and 97.57% in the United States.	
(2)	Variable rate loans to the portfolio companies bear interest at a rate that may be determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate (“P”)), which generally resets quarterly. For each such loan, Credit Fund has provided the interest rate in effect as of December 31, 2016. As of December 31, 2016, all of Credit Fund’s LIBOR loans were indexed to the 90-day LIBOR rate at 1.00%, except for those loans as indicated in Note 11 below, and the U.S. Prime Rate loan was indexed at 3.75%.	
(3)	Loan includes interest rate floor feature.	
(4)	Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.	
(5)	Amortized cost represents original cost, including origination fees, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.	
(6)	Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements.	
(7)	Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into the Credit Fund Facility. The lenders of the Credit Fund Facility have a first lien security interest in substantially all of the assets of Credit Fund. Accordingly, such assets are not available to creditors of Credit Fund Sub.	
(8)	Credit Fund receives less than the stated interest rate of this loan as a result of an agreement among lenders. The interest rate reduction is 1.25% on EIP Merger Sub, LLC (Evolve IP). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/first out loan, which has first priority ahead of the first lien/last out loan with respect to principal, interest and other payments.	
(9)	In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders as follows: EIP Merger Sub, LLC (Evolve IP) (3.84%). Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.	
 
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(10)	As of December 31, 2016, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:	

First Lien Debt – unfunded delayed draw and
revolving term loans commitments	  	Type	 	  	Unused Fee	 	 	Par/
Principal
Amount	 	  	Fair
Value	 	
Diversitech Corporation	  	 	Delayed Draw	 	  	 	1.00	% 	 	$	5,000	 	  	$	—  	 	
Jensen Hughes, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,000	 	  	 	(7	) 	
Jensen Hughes, Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,461	 	  	 	(5	) 	
MSHC, Inc.	  	 	Delayed Draw	 	  	 	1.50	% 	 	 	1,790	 	  	 	(21	) 	
QW Holding Corporation (Quala)	  	 	Revolver	 	  	 	1.00	% 	 	 	5,086	 	  	 	14	 	
QW Holding Corporation (Quala)	  	 	Delayed Draw	 	  	 	1.00	% 	 	 	5,918	 	  	 	17	 	
RelaDyne Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	2,162	 	  	 	(6	) 	
RelaDyne Inc.	  	 	Delayed Draw	 	  	 	0.50	% 	 	 	1,824	 	  	 	(5	) 	
T2 Systems, Inc.	  	 	Revolver	 	  	 	1.00	% 	 	 	1,955	 	  	 	20	 	
The Original Cakerie, Ltd. (Canada)	  	 	Revolver	 	  	 	0.50	% 	 	 	1,665	 	  	 	—  	 	
Zywave, Inc.	  	 	Revolver	 	  	 	0.50	% 	 	 	1,500	 	  	 	(5	) 	
 	  	 	 	 	  	 	 	 	 	 	 	 	  	 	 	 	
Total unfunded commitments	  	 	 	 	  	 	 	 	 	$	30,361	 	  	$	2	 	

(11)	As of December 31, 2016, this LIBOR loan was indexed to the 30-day LIBOR rate at 0.77%.	
Below is certain summarized consolidated financial information for Credit Fund as of December 31, 2016. Credit Fund commenced operations in May 2016.

 	  	December 31,
2016	 	
Selected Consolidated Balance Sheet Information	  	 	 	 	
ASSETS	  	 	 	 	
Investments, at fair value (amortized cost of $433,272)	  	$	437,829	 	
Cash and other assets	  	 	11,326	 	
 	  	 	 	 	
Total assets	  	$	449,155	 	
 	  	 	 	 	
LIABILITIES AND MEMBERS’ EQUITY	  	 	 	 	
Secured borrowings	  	$	248,540	 	
Mezzanine loans	  	 	62,384	 	
Other liabilities	  	 	63,684	 	
Subordinated loans and members’ equity	  	 	74,547	 	
 	  	 	 	 	
Liabilities and members’ equity	  	$	449,155	 	
 	  	 	 	 	
Selected Consolidated Statement of Operations Information:	 	
Total investment income	  	$	9,973	 	

Expenses	 	
Interest and credit facility expenses	  	 	5,410	 	
Other expenses	  	 	1,266	 	
 	  	 	 	 	
Total expenses	  	 	6,676	 	
 	  	 	 	 	
Net investment income (loss)	  	 	3,297	 	
 	  	 	 	 	
Net realized gain (loss) on investments	  	 	41	 	
Net change in unrealized appreciation (depreciation) on investments	  	 	4,557	 	
 	  	 	 	 	
Net increase (decrease) resulting from operations	  	$	7,895	 	

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Debt
Credit Fund Facility
On June 24, 2016, Credit Fund entered into the Credit Fund Facility with the Company pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $100,000. The maturity date of the Credit Fund Facility is June 24, 2017. Amounts borrowed under the Credit Fund Facility bear interest at a rate of LIBOR plus 9.50%.
During the year ended December 31, 2016, there were mezzanine loan borrowings of $84,784 and repayments of $22,400 under the Credit Fund Facility. As of December 31, 2016, there were $62,384 in mezzanine loans outstanding.
As of December 31, 2016, Credit Fund was in compliance with all covenants and other requirements of the Credit Fund Facility.
Credit Fund Sub Facility
On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $450,000, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $1,400,000. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund Sub and the Company’s and Credit Partners’ unfunded capital commitments. The maturity date of the Credit Fund Sub Facility is June 24, 2022. Amounts borrowed under the Credit Fund Sub Facility bear interest at a rate of LIBOR plus 2.50%.
During the year ended December 31, 2016, there were secured borrowings of $248,540 under the Credit Fund Sub Facility. As of December 31, 2016, there was $248,540 in secured borrowings outstanding.
As of December 31, 2016, Credit Fund Sub was in compliance with all covenants and other requirements of the Credit Fund Sub Facility.
6. BORROWINGS
In accordance with the Investment Company Act, the Company is only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 200% after such borrowing. As of December 31, 2016 and 2015, asset coverage was 209.97% and 212.70%, respectively. During the years ended December 31, 2016, 2015 and 2014, there were secured borrowings of $566,351, $402,200 and $420,023, respectively, under the SPV Credit Facility and Credit Facility and repayments of $378,779, $476,328 and $178,404, respectively, under the SPV Credit Facility and Credit Facility. As of December 31, 2016 and 2015, there were $421,885 and $234,313, respectively, in secured borrowings outstanding.
SPV Credit Facility
The SPV closed on May 24, 2013 on the SPV Credit Facility, which was subsequently amended on June 30, 2014, June 19, 2015 and June 9, 2016. The SPV Credit Facility provides for secured borrowings during the applicable revolving period up to an amount equal to the lesser of $400,000 (the borrowing base as calculated pursuant to the terms of the SPV Credit Facility) and the amount of net cash proceeds and unpledged capital commitments the Company has received, with an accordion feature that can, subject to certain conditions, increase the aggregate maximum credit commitment up to an amount not to exceed $750,000, subject to restrictions imposed on borrowings under the Investment Company Act and certain restrictions and conditions set forth in the SPV Credit Facility, including adequate collateral to support such borrowings. The SPV Credit Facility has a revolving period through May 23, 2019 and a maturity date of May 24, 2021. Borrowings under the
 
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SPV Credit Facility bear interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or LIBOR (or, if applicable, a rate based on the prime rate or federal funds rate) plus 2.00% per year through May 23, 2018, with a pre-determined future interest rate increase of 0.50% during the final year of the revolving period and pre-determined future interest rate increases of 0.875%-1.75% over the two years following the end of the revolving period. The SPV is also required to pay an undrawn commitment fee of between 0.25% and 0.75% per year depending on the usage of the SPV Credit Facility. Payments under the SPV Credit Facility are made quarterly. The lenders have a first lien security interest on substantially all of the assets of the SPV.
As part of the SPV Credit Facility, the SPV is subject to limitations as to how borrowed funds may be used and the types of loans that are eligible to be acquired by the SPV including, but not limited to, restrictions on sector and geographic concentrations, loan size, payment frequency, tenor and minimum investment ratings (or estimated ratings). In addition, borrowed funds are intended to be used primarily to purchase first lien loan assets, and the SPV is limited in its ability to purchase certain other assets (including, but not limited to, second lien loans, covenant-lite loans, revolving and delayed draw loans and discount loans) and other assets are not permitted to be purchased (including, but not limited to paid-in-kind loans and structured finance obligations). The SPV Credit Facility has certain requirements relating to interest coverage, collateral quality and portfolio performance, including limitations on delinquencies and charge offs, certain violations of which could result in the immediate acceleration of the amounts due under the SPV Credit Facility. The SPV Credit Facility is also subject to a borrowing base that applies different advance rates to assets held by the SPV based generally on the fair market value of such assets. Under certain circumstances as set forth in the SPV Credit Facility, the Company could be obliged to repurchase loans from the SPV.
As of December 31, 2016 and 2015, the SPV was in compliance with all covenants and other requirements of the SPV Credit Facility.
Credit Facility
The Company closed on March 21, 2014 on the Credit Facility, which was subsequently amended on January 8, 2015 and May 25, 2016 (the “Second Facility Amendment”). The maximum principal amount of the Credit Facility is $220,000, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $225,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $20,000 limit for swingline loans and a $5,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either LIBOR plus an applicable spread of 2.25%, or an “alternative base rate” (which is the highest of a prime rate, the federal funds effective rate plus 0.50%, or one month LIBOR plus 1.00%) plus an applicable spread of 1.25%. The Company may elect either the LIBOR or the “alternative base rate” at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on March 21, 2020 and the Credit Facility will mature on March 21, 2021. During the period from March 21, 2020 to March 21, 2021, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.
Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company and the Company’s unfunded investor equity capital commitments (provided that the amount of unfunded capital commitments ultimately available to the lenders is
 
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limited to $100,000). The pledge of unfunded investor equity capital commitments was subject to release once $100,000 of incremental capital had been called and received by the Company subsequent to January 8, 2015. The pledge of unfunded investor equity capital commitments had been released as of December 31, 2016. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.
Related to the Second Credit Facility Amendment, $380 of deferred financing costs (representing the prorated financing costs related to a departing lender) were immediately expensed on May 25, 2016 in lieu of continuing to amortize over the term of the Credit Facility.
As of December 31, 2016 and 2015, the Company was in compliance with all covenants and other requirements of the Credit Facility.
Summary of Facilities
The facilities of the Company and the SPV consisted of the following as of December 31, 2016 and 2015:

 	  	December 31, 2016	 	
 	  	Total
Facility	 	  	Borrowings
Outstanding	 	  	Unused Portion (1)	 	  	Amount
Available  (2)	 	
SPV Credit Facility	  	$	400,000	 	  	$	252,885	 	  	$	147,115	 	  	$	5,988	 	
Credit Facility	  	 	220,000	 	  	 	169,000	 	  	 	51,000	 	  	 	51,000	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	620,000	 	  	$	421,885	 	  	$	198,115	 	  	$	56,988	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	  	December 31, 2015	 	
 	  	Total
Facility	 	  	Borrowings
Outstanding	 	  	Unused Portion (1)	 	  	Amount
Available  (2)	 	
SPV Credit Facility	  	$	400,000	 	  	$	170,313	 	  	$	229,687	 	  	$	3,155	 	
Credit Facility	  	 	150,000	 	  	 	64,000	 	  	 	86,000	 	  	 	86,000	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	550,000	 	  	$	234,313	 	  	$	315,687	 	  	$	89,155	 	

(1)	The unused portion is the amount upon which commitment fees are based.	
(2)	Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.	
As of December 31, 2016 and 2015, $1,667 and $966, respectively, of interest expense, $203 and $141, respectively, of unused commitment fees and $23 and $22, respectively, of other fees were included in interest and credit facility fees payable. For the years ended December 31, 2016, 2015 and 2014, the weighted average interest rate was 2.73%, 2.23% and 2.18%, respectively, and average principal debt outstanding was $307,734, $265,277 and $164,980, respectively. As of December 31, 2016, 2015 and 2014, the weighted average interest rate was 2.92%, 2.37% and 2.17%, respectively, based on floating LIBOR rates.
 
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For the years ended December 31, 2016, 2015 and 2014, the components of interest expense and credit facility fees were as follows:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Interest expense	  	$	8,559	 	  	$	6,008	 	  	$	3,648	 	
Facility unused commitment fee	  	 	1,253	 	  	 	847	 	  	 	1,129	 	
Amortization of deferred financing costs	  	 	1,213	 	  	 	945	 	  	 	1,820	 	
Other fees	  	 	107	 	  	 	106	 	  	 	103	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total interest expense and credit facility fees	  	$	11,132	 	  	$	7,906	 	  	$	6,700	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Cash paid for interest expense	  	$	7,828	 	  	$	6,062	 	  	$	2,882	 	
7. 2015-1 Notes
On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly owned and consolidated subsidiary of the Company, and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $160 million of Aaa/AAA Class A-1A Notes which bear interest at the three-month London Interbank Offered Rate (“LIBOR”) plus 1.85%; $40 million of Aaa/AAA Class A-1B Notes which bear interest at the three-month LIBOR plus 1.75% for the first 24 months and the three-month LIBOR plus 2.05% thereafter; $27 million of Aaa/AAA Class A-1C Notes which bear interest at 3.75%; and $46 million of Aa2 Class A-2 Notes which bear interest at the three month LIBOR plus 2.70%. The 2015-1 Notes were issued at par and are scheduled to mature on July 15, 2027. The Company received 100% of the preferred interests (the “Preferred Interests”) issued by the 2015-1 Issuer on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the Issuer of the initial closing date loan portfolio. The Preferred Interests do not bear interest and had a nominal value of $125.9 million at closing. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement. The Class A-1A, Class A-1B and Class A-1C and Class A-2 Notes are included in the December 31, 2016 consolidated financial statements. The Preferred Interests were eliminated in consolidation.
On the closing date of the 2015-1 Debt Securitization, the 2015-1 Issuer effected a one-time distribution to the Company of a substantial portion of the proceeds of the private placement of the 2015-1 Notes, net of expenses, which distribution was used to repay a portion of certain amounts outstanding under the SPV Credit Facility and the Credit Facility. As part of the 2015-1 Debt Securitization, certain first and second lien senior secured loans were distributed by the SPV to the Company pursuant to a distribution and contribution agreement. The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1 Notes, the Company made customary representations, warranties and covenants in the purchase agreement.
During the reinvestment period, pursuant to the indenture governing the 2015-1 Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager of the 2015-1 Issuer and in accordance with the Company’s investment strategy.
The Investment Adviser serves as collateral manager to the 2015-1 Issuer under a collateral management agreement (the “Collateral Management Agreement”). Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and
 
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incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the year ended December 31, 2016. Any such waived fees may not be recaptured by the Investment Adviser.
Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization, the Company has agreed to hold on an ongoing basis Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of December 31, 2016, the Company was in compliance with its undertaking.
The 2015-1 Issuer pays ongoing administrative expenses to the trustee, independent accountants, legal counsel, rating agencies and independent managers in connection with developing and maintaining reports, and providing required services in connection with the administration of the 2015-1 Issuer.    
As of December 31, 2016, there were 62 first lien and second lien senior secured loans with a total fair value of approximately $389,437 securing the 2015-1 Notes. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1 Notes.
For the years ended December 31, 2016 and 2015, the weighted average interest rate, which includes amortization of debt issuance costs on the 2015-1 Notes, was 2.89% and 2.45%, respectively, based on floating LIBOR rates.
For the years ended December 31, 2016, 2015 and 2014, the components of interest expense on the 2015-1 Notes were as follows:

 	  	For the years ended
December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Interest expense	  	$	7,698	 	  	$	3,468	 	  	$	—  	 	
Amortization of debt issuance costs	  	 	205	 	  	 	106	 	  	 	—  	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Total interest expense and credit facility fees	  	$	7,903	 	  	$	3,574	 	  	$	—  	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Cash paid for interest expense	  	$	7,439	 	  	$	2,021	 	  	$	—  	 	
8. COMMITMENTS AND CONTINGENCIES
A summary of significant contractual payment obligations was as follows as of December 31, 2016 and 2015:

 	  	SPV Credit Facility and Credit Facility	 	  	2015-1 Notes	 	
Payment Due by Period	  	December 31,
2016	 	  	December 31,
2015	 	  	December 31,
2016	 	  	December 31,
2015	 	
Less than 1 Year	  	$	—  	 	  	$	—  	 	  	$	—  	 	  	$	—  	 	
1-3 Years	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
3-5 Years	  	 	421,885	 	  	 	64,000	 	  	 	—  	 	  	 	—  	 	
More than 5 Years	  	 	—  	 	  	 	170,313	 	  	 	273,000	 	  	 	273,000	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	$	421,885	 	  	$	234,313	 	  	$	273,000	 	  	$	273,000	 	

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In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial statements as of December 31, 2016 and 2015 for any such exposure.
As of December 31, 2016 and 2015, the Company had $1,222,358 and $1,174,340, respectively, in total capital commitments from stockholders, of which $421,698 and $559,214, respectively, was unfunded. As of December 31, 2016 and 2015, current directors had committed $765 in capital commitments to the Company.
The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:

 	  	Par Value as of	 	
 	  	December 31, 2016	 	  	December 31, 2015	 	
Unfunded delayed draw commitments	  	$	35,704	 	  	$	20,695	 	
Unfunded revolving term loan commitments	  	 	24,063	 	  	 	3,906	 	
 	  	 	 	 	  	 	 	 	
Total unfunded commitments	  	$	59,767	 	  	$	24,601	 	
 	  	 	 	 	  	 	 	 	
As of December 31, 2016, the Company had remaining commitments to fund, from time to time, capital to Credit Fund of up to $364,999. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by the Company. As of December 31, 2016, the Company had remaining commitments to fund, from time to time, mezzanine loans to Credit Fund of up to $37,617, of which $13,500 was available for borrowing based on the computation of collateral to support the borrowings.
9. NET ASSETS
The Company has the authority to issue 200,000,000 shares of common stock, $0.01 per share par value.
During the year ended December 31, 2016, the Company issued 10,178,235 shares for $185,816 including reinvestment of dividends. The following table summarizes capital activity during the year ended December 31, 2016:

 	 	Common Stock	 	 	Capital
in Excess
of Par
Value	 	 	Offering
Costs	 	 	Accumulated
Net Investment
Income (Loss)	 	 	Accumulated
Net Realized
Gain (Loss)
on Investments	 	 	Accumulated Net
Unrealized
Appreciation
(Depreciation) on
Investments	 	 	Total
Net
Assets	 	 	
 	 	Shares	 	 	Amount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, beginning of year	 	 	31,524,083	 	 	$	315	 	 	$	613,944	 	 	$	(74	) 	 	$	(12,994	) 	 	$	(2,411	) 	 	$	(27,054	) 	 	$	571,726	 	 	 	 	 	
Common stock issued	 	 	10,162,898	 	 	 	102	 	 	 	185,435	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	185,537	 	 	 	 	 	
Reinvestment of dividends	 	 	15,337	 	 	 	—  	 	 	 	279	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	279	 	 	 	 	 	
Net investment income (loss)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	59,621	 	 	 	—  	 	 	 	—  	 	 	 	59,621	 	 	 	 	 	
Net realized gain (loss) on investments	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(9,644	) 	 	 	—  	 	 	 	(9,644	) 	 	 	 	 	
Net change in unrealized appreciation (depreciation) on investments	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	19,832	 	 	 	19,832	 	 	 	 	 	
Dividends declared	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(63,214	) 	 	 	—  	 	 	 	—  	 	 	 	(63,214	) 	 	 	 	 	
Tax reclassification of stockholders’ equity in accordance with US GAAP	 	 	—  	 	 	 	—  	 	 	 	(78	) 	 	 	—  	 	 	 	13,380	 	 	 	(13,302	) 	 	 	—  	 	 	 	—  	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of year	 	 	41,702,318	 	 	$	417	 	 	$	799,580	 	 	$	(74	) 	 	$	(3,207	) 	 	$	(25,357	) 	 	$	(7,222	) 	 	$	764,137	 	 	 	 	 	

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During the year ended December 31, 2015, the Company issued 13,591,386 shares for $262,485 including reinvestment of dividends. The following table summarizes capital activity during the year ended December 31, 2015:

 	 	Common Stock	 	 	Capital
in Excess
of Par
Value	 	 	Offering
Costs	 	 	Accumulated
Net Investment
Income (Loss)	 	 	Accumulated
Net Realized
Gain (Loss)
on Investments	 	 	Accumulated Net
Unrealized
Appreciation
(Depreciation) on
Investments	 	 	Total
Net
Assets	 	 	
 	 	Shares	 	 	Amount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, beginning of year	 	 	17,932,697	 	 	$	179	 	 	$	351,636	 	 	$	(74	) 	 	$	(4,388	) 	 	$	(57	) 	 	$	(9,039	) 	 	$	338,257	 	 	 	 	 	
Common stock issued	 	 	13,584,508	 	 	 	136	 	 	 	262,218	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	262,354	 	 	 	 	 	
Reinvestment of dividends	 	 	6,878	 	 	 	—  	 	 	 	131	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	131	 	 	 	 	 	
Net investment income (loss)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	35,524	 	 	 	—  	 	 	 	—  	 	 	 	35,524	 	 	 	 	 	
Net realized gain (loss) on investments—non-controlled/ non-affiliated	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1,164	 	 	 	—  	 	 	 	1,164	 	 	 	 	 	
Net change in unrealized appreciation (depreciation) on investments—non-controlled/ non-affiliated	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(18,015	) 	 	 	(18,015	) 	 	 	 	 	
Dividends declared	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(47,689	) 	 	 	—  	 	 	 	—  	 	 	 	(47,689	) 	 	 	 	 	
Tax reclassification of stockholders’ equity in accordance with US GAAP	 	 	—  	 	 	 	—  	 	 	 	(41	) 	 	 	—  	 	 	 	3,559	 	 	 	(3,518	) 	 	 	—  	 	 	 	—  	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of year	 	 	31,524,083	 	 	$	315	 	 	$	613,944	 	 	$	(74	) 	 	$	(12,994	) 	 	$	(2,411	) 	 	$	(27,054	) 	 	$	571,726	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
During the year ended December 31, 2014, the Company issued 8,356,707 shares for $164,803 including reinvestment of dividends. The following table summarizes capital activity during the year ended December 31, 2014:

 	 	Common Stock	 	 	Capital
in Excess
of Par
Value	 	 	Offering
Costs	 	 	Accumulated
Net Investment
Income (Loss)	 	 	Accumulated
Net Realized
Gain (Loss)
on Investments	 	 	Accumulated Net
Unrealized
Appreciation
(Depreciation) on
Investments	 	 	Total
Net
Assets	 	 	
 	 	Shares	 	 	Amount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, beginning of year	 	 	9,575,990	 	 	$	96	 	 	$	186,965	 	 	$	(74	) 	 	$	(664	) 	 	$	—  	 	 	$	(321	) 	 	$	186,002	 	 	 	 	 	
Common stock issued	 	 	8,354,987	 	 	 	83	 	 	 	164,686	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	164,769	 	 	 	 	 	
Reinvestment of dividends	 	 	1,720	 	 	 	—  	 	 	 	34	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	34	 	 	 	 	 	
Net investment income (loss)	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	14,260	 	 	 	—  	 	 	 	—  	 	 	 	14,260	 	 	 	 	 	
Net realized gain (loss) on investments—non-controlled/ non-affiliated	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	72	 	 	 	—  	 	 	 	72	 	 	 	 	 	
Net change in unrealized appreciation (depreciation) on investments—non-controlled/ non-affiliated	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(8,718	) 	 	 	(8,718	) 	 	 	 	 	
Dividends declared	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(18,162	) 	 	 	—  	 	 	 	—  	 	 	 	(18,162	) 	 	 	 	 	
Tax reclassification of stockholders’ equity in accordance with US GAAP	 	 	—  	 	 	 	—  	 	 	 	(49	) 	 	 	—  	 	 	 	178	 	 	 	(129	) 	 	 	—  	 	 	 	—  	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance, end of year	 	 	17,932,697	 	 	$	179	 	 	$	351,636	 	 	$	(74	) 	 	$	(4,388	) 	 	$	(57	) 	 	$	(9,039	) 	 	$	338,257	 	 	 	 	 	

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The following table summarizes total shares issued and proceeds received related to capital subscriptions for the Company’s common stock and reinvestment of dividends during the year ended December 31, 2016:

 	  	Shares Issued	 	  	Proceeds Received	 	
January 22, 2016*	  	 	3,885	 	  	$	74	 	
March 11, 2016	  	 	1,815,181	 	  	 	33,000	 	
April 22, 2016*	  	 	2,988	 	  	 	54	 	
May 6, 2016	  	 	1,510,859	 	  	 	26,999	 	
June 24, 2016	  	 	1,660,333	 	  	 	30,102	 	
July 22, 2016*	  	 	3,756	 	  	 	66	 	
August 26, 2016	  	 	1,909,449	 	  	 	35,000	 	
September 16, 2016	  	 	1,360,948	 	  	 	25,001	 	
October 24, 2016*	  	 	4,708	 	  	 	85	 	
November 18, 2016	  	 	1,906,128	 	  	 	35,435	 	
 	  	 	 	 	  	 	 	 	
Total	  	 	10,178,235	 	  	$	185,816	 	
 	  	 	 	 	  	 	 	 	
* Represents shares issued upon the reinvestment of dividends.
The following table summarizes total shares issued and proceeds received related to capital subscriptions for the Company’s common stock and reinvestment of dividends during the year ended December 31, 2015:

 	  	Shares Issued	 	  	Proceeds Received	 	
January 16, 2015	  	 	924,977	 	  	$	18,000	 	
January 26, 2015*	  	 	1,051	 	  	 	20	 	
February 26, 2015	  	 	2,312,659	 	  	 	45,005	 	
April 21, 2015*	  	 	1,351	 	  	 	25	 	
May 1, 2015	  	 	1,462,746	 	  	 	28,085	 	
May 22, 2015	  	 	1,708,068	 	  	 	33,000	 	
June 25, 2015	  	 	2,412,386	 	  	 	46,992	 	
July 22, 2015*	  	 	2,018	 	  	 	38	 	
August 21, 2015	  	 	1,032,504	 	  	 	20,002	 	
September 30, 2015	  	 	104,954	 	  	 	2,009	 	
October 9, 2015	  	 	1,255,914	 	  	 	24,038	 	
October 22, 2015*	  	 	2,458	 	  	 	47	 	
December 21, 2015	  	 	2,370,300	 	  	 	45,224	 	
 	  	 	 	 	  	 	 	 	
Total	  	 	13,591,386	 	  	$	262,485	 	
 	  	 	 	 	  	 	 	 	
* Represents shares issued upon the reinvestment of dividends.
The following table summarizes total shares issued and proceeds received related to capital subscriptions for the Company’s common stock and reinvestment of dividends during the year ended December 31, 2014:

 	  	Shares Issued	 	  	Proceeds Received	 	
January 27, 2014	  	 	1,020,810	 	  	$	19,998	 	
February 21, 2014	  	 	491,849	 	  	 	9,689	 	
March 21, 2014	  	 	1,802,772	 	  	 	35,785	 	
April 14, 2014*	  	 	148	 	  	 	3	 	
July 14, 2014*	  	 	586	 	  	 	12	 	
September 17, 2014	  	 	643,060	 	  	 	12,790	 	
October 9, 2014*	  	 	986	 	  	 	19	 	
October 16, 2014	  	 	1,134,723	 	  	 	22,502	 	
November 3, 2014	  	 	1,008,570	 	  	 	20,000	 	
December 9, 2014	  	 	2,253,203	 	  	 	44,005	 	
 	  	 	 	 	  	 	 	 	
Total	  	 	8,356,707	 	  	$	164,803	 	
 	  	 	 	 	  	 	 	 	
* Represents shares issued upon the reinvestment of dividends.
 
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Subscribed but unissued shares are presented in equity with a deduction of subscriptions receivable until cash is received for a subscription. There were no subscribed but unissued shares as of December 31, 2016, 2015 and 2014.
Subscription transactions during the years ended December 31, 2016, 2015 and 2014 were executed at an offering price at a premium to net asset value due to the requirement to use prior quarter net asset value as offering price unless it would result in the Company selling shares of its common stock at a price below the current net asset value and also in order to effect a reallocation of organizational costs to subsequent investors. Such subscription transactions increased net asset value by $0.01 per share, $0.11 per share, and $0.09 per share, respectively, for the years ended December 31, 2016, 2015 and 2014, respectively.
The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share. Basic earnings per common share were calculated by dividing net increase (decrease) in net assets resulting from operations attributable to the Company by the weighted-average number of common shares outstanding for the year.
Basic and diluted earnings per common share were as follows:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Net increase (decrease) in net assets resulting from operations	  	$	69,809	 	  	$	18,673	 	  	$	5,614	 	
Weighted-average common shares outstanding	  	 	36,152,390	 	  	 	24,830,200	 	  	 	13,091,544	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
Basic and diluted earnings per common share	  	$	1.93	 	  	$	0.75	 	  	$	0.43	 	
 	  	 	 	 	  	 	 	 	  	 	 	 	
The following table summarizes the Company’s dividends declared and payable since inception through the year ended December 31, 2016:

Date Declared	  	Record Date	  	Payment Date	  	Per Share
Amount	 	 	Total
Amount	 	
March 13, 2014	  	March 31, 2014	  	April 14, 2014	  	$	0.19	 	 	$	2,449	 	
June 26, 2014	  	June 30, 2014	  	July 14, 2014	  	$	0.27	 	 	$	3,481	 	
September 12, 2014	  	September 18, 2014	  	October 9, 2014	  	$	0.44	 	 	$	5,956	 	
December 19, 2014	  	December 29, 2014	  	January 26, 2015	  	$	0.35	 	 	$	6,276	 	
March 11, 2015	  	March 13, 2015	  	April 17, 2015	  	$	0.37	 	 	$	7,833	 	
June 24, 2015	  	June 30, 2015	  	July 22, 2015	  	$	0.37	 	 	$	9,902	 	
September 24, 2015	  	September 24, 2015	  	October 22, 2015	  	$	0.42	 	 	$	11,670	 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.40	 	 	$	12,610	 	
December 29, 2015	  	December 29, 2015	  	January 22, 2016	  	$	0.18	(1) 	 	$	5,674	 	
March 10, 2016	  	March 14, 2016	  	April 22, 2016	  	$	0.40	 	 	$	13,337	 	
June 8, 2016	  	June 8, 2016	  	July 22, 2016	  	$	0.40	 	 	$	13,943	 	
September 28, 2016	  	September 28, 2016	  	October 24, 2016	  	$	0.40	 	 	$	15,917	 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.41	 	 	$	17,098	 	
December 29, 2016	  	December 29, 2016	  	January 24, 2017	  	$	0.07	(1) 	 	$	2,919	 	
 
(1)	Represents a special dividend.	
 
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10. CONSOLIDATED FINANCIAL HIGHLIGHTS
The following is a schedule of consolidated financial highlights for the years ended December 31, 2016, 2015, 2014 and 2013:

 	  	For the years ended December 31,	 	
 	  	2016	 	 	2015	 	 	2014	 	 	2013	 	
Per Share Data:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net asset value per share, beginning of year	  	$	18.14	 	 	$	18.86	 	 	$	19.42	 	 	$	20.00	 	
Net investment income (loss) (1)	  	 	1.65	 	 	 	1.43	 	 	 	1.09	 	 	 	(0.55	) 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	 	0.20	 	 	 	(0.52	) 	 	 	(0.49	) 	 	 	(0.34	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	  	 	1.85	 	 	 	0.91	 	 	 	0.60	 	 	 	(0.89	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Dividends declared (2)	  	 	(1.68	) 	 	 	(1.74	) 	 	 	(1.25	) 	 	 	—  	 	
Effect of subscription offering price (3)	  	 	0.01	 	 	 	0.11	 	 	 	0.09	 	 	 	0.32	 	
Offering costs	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(0.01	) 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net asset value per share, end of year	  	$	18.32	 	 	$	18.14	 	 	$	18.86	 	 	$	19.42	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Number of shares outstanding, end of year	  	 	41,702,318	 	 	 	31,524,083	 	 	 	17,932,697	 	 	 	9,575,990	 	
Total return (4)	  	 	10.25	% 	 	 	5.41	% 	 	 	3.55	% 	 	 	(2.90	)% 	
Net assets, end of year	  	$	764,137	 	 	$	571,726	 	 	$	338,257	 	 	$	186,002	 	
Ratio to average net assets (5):	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses net of waiver, before incentive fees	  	 	5.46	% 	 	 	5.11	% 	 	 	5.78	% 	 	 	9.75	% 	
Expenses net of waiver, after incentive fees	  	 	7.69	% 	 	 	6.94	% 	 	 	7.15	% 	 	 	9.75	% 	
Expenses gross of waiver, after incentive fees	  	 	8.62	% 	 	 	7.86	% 	 	 	7.98	% 	 	 	10.21	% 	
Net investment income (loss) (6)	  	 	8.93	% 	 	 	7.33	% 	 	 	5.45	% 	 	 	(2.45	)% 	
Interest expense and credit facility fees	  	 	2.85	% 	 	 	2.37	% 	 	 	2.56	% 	 	 	2.23	% 	
Ratios/Supplemental Data:	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Asset coverage, end of period	  	 	209.97	% 	 	 	212.70	% 	 	 	209.67	% 	 	 	378.35	% 	
Portfolio turnover	  	 	32.39	% 	 	 	26.04	% 	 	 	28.06	% 	 	 	6.43	% 	
Total committed capital, end of year	  	$	1,222,358	 	 	$	1,174,340	 	 	$	1,129,522	 	 	$	877,408	 	
Ratio of total contributed capital to total committed capital, end of year	  	 	65.50	% 	 	 	52.38	% 	 	 	31.23	% 	 	 	21.43	% 	
Weighted-average shares outstanding	  	 	36,152,390	 	 	 	24,830,200	 	 	 	13,091,544	 	 	 	3,016,298	 	
 
(1)	For the years ended December 31, 2016, 2015 and 2014, net investment income (loss) per share was calculated as net investment income (loss) for the year divided by the weighted-average number of shares outstanding for the year. For the year ended December 31, 2013, net investment income (loss) per share was calculated as net investment income (loss) for the period divided by the weighted average number of shares outstanding for the period June 5, 2013 (date of issuance of shares related to the first capital drawdown) through December 31, 2013.	
(2)	For the years ended December 31, 2016, 2015 and 2014, dividends declared per share was calculated as the sum of dividends declared during the year divided by the number of shares outstanding at each respective quarter-end date (refer to Notes 9 and 12).	
(3)	Increase is due to offering price of subscriptions during the year (refer to Note 9).	
(4)	Total return is based on the change in net asset value per share during the year plus the declared dividends, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the year. Total return based on change in net asset value for the year ended December 31, 2013 was calculated for the period from commencement of operations through December 31, 2013. Total return for the	
 
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 	years ended December 31, 2016, 2015, 2014 and 2013 was inclusive of $0.01, $0.11, $0.09, and $0.32, respectively, per share increase in net asset value related to the offering price of subscriptions. Excluding the effects of the higher offering price of subscriptions, total return would have been 10.20%, 4.83%, 3.09%, and (4.50%), respectively (refer to Note 9).	
(5)	The Company commenced operations on May 2, 2013; therefore, ratios to average net assets and portfolio turnover for the year ended December 31, 2013 may have been different had there been a full year of operations.	
(6)	The net investment income ratio is net of the waiver of base management fees.	
11. LITIGATION
The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of December 31, 2016 and 2015, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.
In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements.
12. TAX
The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes , as of December 31, 2016 and 2015.
In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign authorities for 2013-2016. As of December 31, 2016 and 2015, the Company had filed tax returns and therefore is subject to examination.
Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified among the Company’s capital accounts. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from US GAAP. As of December 31, 2016 and 2015, permanent differences primarily due to the tax treatment of passive foreign investment companies and non- deductible excise tax resulted in a net decrease in accumulated net investment loss by $13,380 and $3,559, respectively, net decrease in accumulated net realized gain by $13,302 and $3,518, respectively, and net decrease in additional paid-in capital in excess of par by $78 and $41, respectively, on the Consolidated Statements of Assets and Liabilities. Total earnings and net asset value were not affected.
The tax character of the distributions paid for the fiscal years ended December 31, 2016, 2015 and 2014 was as follows:

 	  	For the years ended December 31,	 	
 	  	2016	 	  	2015	 	  	2014	 	
Ordinary income	  	$	63,214	 	  	$	47,689	 	  	$	18,162	 	
Tax return of capital	  	$	—  	 	  	$	—  	 	  	$	—  	 	
 
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Income Tax Information and Distributions to Stockholders
As of December 31, 2016 and 2015, the components of accumulated earnings (deficit) on a tax basis were as follows:

 	  	2016	 	  	2015	 	
Undistributed ordinary income	  	$	5,365	 	  	$	2,691	 	
Other book/tax temporary differences (1)	  	 	(2,108	) 	  	 	(2,012	) 	
Capital loss carryforwards	  	 	(25,414	) 	  	 	(2,411	) 	
Net unrealized appreciation (depreciation) on investments (2)	  	 	(13,629	) 	  	 	(40,727	) 	
 	  	 	 	 	  	 	 	 	
Total accumulated earnings (deficit)	  	$	(35,786	) 	  	$	(42,459	) 	

(1)	Consists of the unamortized portion of organization costs as of December 31, 2016 and 2015, respectively.	
(2)	The difference between the book-basis and tax-basis unrealized appreciation (depreciation) on investments is attributable primarily to the tax treatment of passive foreign investment companies, which include the structured finance obligations.	
Also, consists of book to tax difference on interest income on CLO equity investments recognized using the effective yield method for financial statement purposes.
As of December 31, 2016 and 2015, the cost of investments for federal income tax purposes and gross unrealized appreciation and depreciation on investments were as follows:

 	  	2016	 	  	2015	 	
Cost of investments	  	$	1,436,387	 	  	$	1,093,393	 	
Gross unrealized appreciation on investments	  	 	22,390	 	  	 	5,911	 	
Gross unrealized depreciation on investments	  	 	(36,019	) 	  	 	(46,638	) 	
 	  	 	 	 	  	 	 	 	
Net unrealized appreciation (depreciation) on investments	  	$	(13,629	) 	  	$	(40,727	) 	
 	  	 	 	 	  	 	 	 	
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “RIC Modernization Act”) was enacted which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. Under the RIC Modernization Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law. As of December 31, 2016 and 2015, the Company did not have any pre-enactment capital loss carryforwards, and had $25,414 and $2,411, respectively, of post enactment capital loss carryforwards, $614 and $727 of which were post-enactment short-term capital loss carryforwards, respectively, and $24,800 and $1,684, of which were post-enactment long-term capital loss carryforwards, respectively.
 
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13. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

 	  	2016	 	
 	  	Q4	 	 	Q3	 	  	Q2	 	  	Q1	 	
Total investment income	  	$	33,156	 	 	$	28,957	 	  	$	25,748	 	  	$	23,110	 	
Net expenses	  	 	14,807	 	 	 	13,111	 	  	 	12,282	 	  	 	11,150	 	
Net investment income (loss)	  	 	18,349	 	 	 	15,846	 	  	 	13,466	 	  	 	11,960	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	 	(953	) 	 	 	13,324	 	  	 	12,485	 	  	 	(14,668	) 	
Net increase (decrease) in net assets resulting from operations	  	 	17,396	 	 	 	29,170	 	  	 	25,951	 	  	 	(2,708	) 	
Net asset value per share	  	 	18.32	 	 	 	18.38	 	  	 	18.02	 	  	 	17.66	 	
Basic and diluted earnings per common share	  	$	0.48	 	 	$	0.78	 	  	$	0.75	 	  	$	(0.08	) 	

 	  	2015	 	
 	  	Q4	 	 	Q3	 	 	Q2	 	  	Q1	 	
Total investment income	  	$	20,685	 	 	$	19,601	 	 	$	15,925	 	  	$	12,979	 	
Net expenses	  	 	9,920	 	 	 	9,267	 	 	 	7,980	 	  	 	6,499	 	
Net investment income (loss)	  	 	10,765	 	 	 	10,334	 	 	 	7,945	 	  	 	6,480	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	 	(20,748	) 	 	 	(681	) 	 	 	1,270	 	  	 	3,308	 	
Net increase (decrease) in net assets resulting from operations	  	 	(9,983	) 	 	 	9,653	 	 	 	9,215	 	  	 	9,788	 	
Net asset value per share	  	 	18.14	 	 	 	19.02	 	 	 	19.09	 	  	 	19.05	 	
Basic and diluted earnings per common share	  	$	(0.34	) 	 	$	0.35	 	 	$	0.40	 	  	$	0.50	 	

 	  	2014	 	
 	  	Q4	 	 	Q3	 	 	Q2	 	  	Q1	 	
Total investment income	  	$	5,885	 	 	$	10,522	 	 	$	9,944	 	  	$	6,633	 	
Net expenses	  	 	4,906	 	 	 	4,816	 	 	 	5,408	 	  	 	3,594	 	
Net investment income (loss)	  	 	979	 	 	 	5,706	 	 	 	4,536	 	  	 	3,039	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	  	 	(4,910	) 	 	 	(4,769	) 	 	 	56	 	  	 	977	 	
Net increase (decrease) in net assets resulting from operations	  	 	(3,931	) 	 	 	937	 	 	 	4,592	 	  	 	4,016	 	
Net asset value per share	  	 	18.86	 	 	 	19.35	 	 	 	19.71	 	  	 	19.63	 	
Basic and diluted earnings per common share	  	$	(0.25	) 	 	$	0.07	 	 	$	0.36	 	  	$	0.37	 	
14. SUBSEQUENT EVENTS
Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below.
Subsequent to December 31, 2016, the Company borrowed $81,000 under the Credit Facility and SPV Credit Facility to fund investment acquisitions. The Company also voluntarily repaid $124,277 under the Credit Facility and SPV Credit Facility.
Effective January 31, 2017, TwentyEighty, Inc. (fka Miller Heiman, Inc.) completed a restructuring whereby the first lien debt held by us was converted into new term loans and equity. Such term loan investments contain cash interest and PIK provisions. As a result, we realized a loss of $7,738 during the period.
On February 28, 2017, Credit Fund issued a capital call and delivered capital drawdown notices of $3,000 to each of the Company and Credit Partners. Proceeds from the capital call were due, and the related issuance of $6,000 of subordinated loans occurred, on March 7, 2017.
 
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On March 20, 2017, the Company’s Board of Directors, including a majority of the Independent Directors, approved the renewal of the Company’s Investment Advisory Agreement with the Investment Adviser and the Company’s Administration Agreement with the Administrator, each for an additional one year term.
On March 20, 2017, the Company’s Board of Directors declared a dividend of $0.41 per share, which is payable on or about April 24, 2017 to holders of record of the Company’s common stock at the close of business on March 20, 2017.
 
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
Pursuant to the Merger Agreement, at the effective time, subject to the satisfaction of specified closing conditions, NFIC will merge with and into us with us as the surviving entity in the NFIC Acquisition. Upon the completion of the NFIC Acquisition, each share of NFIC common stock issued and outstanding immediately prior to the effective time of the NFIC Acquisition will be converted into the right to receive the Merger Consideration from us, in accordance with the elections of NFIC stockholders. Each NFIC stockholder is permitted to elect its Cash Percentage Election with respect to all shares of NFIC common stock held by such stockholder. The Cash Election Percentage elected by an NFIC stockholder shall not exceed 95%. The net asset value of the Merger Consideration (consisting of Acquisition Shares and cash, if any) that each NFIC stockholder is entitled to under the Merger Agreement will be equal to the net asset value of such NFIC stockholder’s shares of common stock in NFIC.
We cannot assure you that the NFIC Acquisition will be consummated as scheduled, or at all. See “Business—NFIC Acquisition” for a description of the terms of the NFIC Acquisition and “Risk Factors—Risks Related to the NFIC Acquisition—We may fail to complete the NFIC Acquisition” for a description of the risks associated with a failure to consummate the NFIC Acquisition.
The unaudited pro forma consolidated financial data is based on our historical consolidated financial statements and the related notes, which are included elsewhere in this document. See “Financial Statements—Index to Financial Statements.”
The following unaudited pro forma consolidated financial data is adjusted to give effect of the NFIC Acquisition on our consolidated financial position and results of operations.
In accordance with GAAP, the acquired assets and assumed liabilities of NFIC will be recorded by us at their estimated fair values as of the effective date. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2016 give effect to the NFIC Acquisition as if it had occurred on January 1, 2016. The unaudited pro forma consolidated balance sheet as of December 31, 2016 gives effect to the NFIC Acquisition as if it had occurred on December 31, 2016.
The unaudited pro forma consolidated financial data is presented for illustrative purposes only and does not necessarily indicate the consolidated results of operations or the financial position that would have resulted had the NFIC Acquisition been completed at the beginning of the applicable period presented, nor the impact of potential expense efficiencies of the NFIC Acquisition and other factors. In addition, the unaudited pro forma consolidated financial data does not include any estimated net increase (decrease) in stockholders’ equity resulting from operations or asset sales and repayments that are not already reflected that may occur between December 31, 2016 and the completion of the NFIC Acquisition.
 
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TCG BDC, Inc.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
As of December 31, 2016 (unaudited)
(dollar amounts in thousands, except per share data)

 	  	TCG BDC(2)	 	 	NFIC(2)	 	 	Adjustments(1)(3)	 	 	TCG BDC
(Pro Forma) (6)	 	
ASSETS	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investments, at fair value	  	$	1,422,759	 	 	$	286,181	 	 	$	—  	 	 	$	1,708,940	 	
Deferred financing costs & prepaid expenses	  	 	3,350	 	 	 	1,096	 	 	 	(1,084	) 	 	 	3,362	 	
Cash and other assets	  	 	64,046	 	 	 	8,012	 	 	 	(5,205	) 	 	 	66,853	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	  	$	1,490,155	 	 	$	295,289	 	 	$	(6,289	) 	 	$	1,779,155	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
LIABILITIES	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Secured borrowings	  	$	421,885	 	 	$	130,427	 	 	$	5,861	 	 	$	558,173	 	
2015-1 Notes payable, net of unamortized debt issuance costs of $2,151	  	 	270,849	 	 	 	—  	 	 	 	—  	 	 	 	270,849	 	
Other liabilities	  	 	33,284	 	 	 	9,316	 	 	 	(223	)(4)	 	 	42,377	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities	  	 	726,018	 	 	 	139,743	 	 	 	5,638	 	 	 	871,399	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NET ASSETS	  	$	764,137	 	 	$	155,546	 	 	$	(11,927	) 	 	$	907,756	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NET ASSETS PER SHARE	  	$	18.32	 	 	$	19.07	 	 	 	 	 	 	$	18.32	 	
 	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Shares Outstanding	  	 	41,702,318	 	 	 	8,156,316	 	 	 	(295,424	)(5)	 	 	49,563,210	 	
Asset Coverage Ratio	  	 	209.97	% 	 	 	219.26	% 	 	 	—  	 	 	 	209.21	% 	
 
(1) 	Assumes all NFIC stockholders elect 95% as their Cash Election Percentage and that (i) TCG BDC assumes all the assets and liabilities by operation of law as of the effective time under the Merger Agreement, except for deferred financing costs associated with NFIC’s outstanding debt, which will be written off in connection with the NFIC Acquisition, (ii) TCG BDC intends to finance the NFIC Acquisition through the cash raised from a combination of capital calls under its subscription agreements with its stockholders (50%) and borrowing from the Facilities (50%), and (iii) $393, which represents 50% of the NFIC Acquisition expenses, will be allocated pro rata between TCG BDC and NFIC based on their relative net assets as of the business day immediately prior to the closing date of the NFIC Acquisition (such time of valuation, the “Valuation Time”).	
(2) 	Amounts are from the respective audited Consolidated Statement of Assets and Liabilities as of December 31, 2016 on the Form 10-K filed March 22, 2017 by TCG BDC or NFIC.	
 
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(3) 	Reflects the effect of the write off of NFIC’s deferred financing costs and changes in outstanding cash, secured borrowings and net assets balances as result of the NFIC Acquisition. The gross amounts by line item are as follows:	

(amounts in
thousands)	 	  	Cash and other assets	
 	 	
 	$    136,288	 	  	Estimated capital calls from TCG BDC stockholders to fund the NFIC Acquisition	
 	 	
 	136,288	 	  	Estimated secured borrowing from TCG BDC facilities to fund the NFIC Acquisition	
 	 	
 	(146,739)	 	  	TCG BDC to pay NFIC stockholders in cash, representing approximately 95% of the Merger Consideration	
 	 	
 	(130,427)	 	  	TCG BDC to repay NFIC’s facilities principal outstanding balances as a result of the NFIC Acquisition	
 	 	
 	(616)	 	  	TCG BDC to pay the interest payable to NFIC’s lenders on the existing debt facilities as a result of the NFIC Acquisition	

 	$    (5,205)	 	  	Net change in cash and other assets	
 	 	
 	 	 	  	Secured borrowings	
 	 	
 	$    136,288	 	  	Estimated secured borrowing from TCG BDC’s facilities to fund the NFIC Acquisition	
 	 	
 	(130,427)	 	  	TCG BDC to repay NFIC’s facilities principal outstanding balances as result of the NFIC Acquisition	

 	$    5,861	 	  	Net change in secured borrowings	
 	 	
 	 	 	  	Net Assets	
 	 	
 	$    136,288	 	  	Estimated capital calls from TCG BDC’s stockholders to fund the NFIC Acquisition	
 	 	
 	7,723	 	  	Issuance of additional shares of TCG BDC to NFIC’s stockholders, representing approximately 5% of the Merger Consideration	
 	 	
 	(155,546)	 	  	Cancellation of NFIC’s stockholders’ equity upon the NFIC Acquisition with and into TCG BDC	
 	 	
 	(393)	 	  	Estimated allocated transaction costs of TCG BDC and NFIC	

 	$    (11,927)	 	  	Net change in net assets	
 
(4) 	Reflects an estimated allocated transaction expense of approximately $393, to be incurred as a result of the NFIC Acquisition, offset by the payment of the $616 interest payable to NFIC’s lenders on the existing credit facilities.	
(5) 	Change in the number of shares reflects the net result of the cancellation of NFIC’s existing shares and the issuance of additional shares by TCG BDC to NFIC stockholders as consideration for the NFIC Acquisition and to TCG BDC’s stockholders for capital calls to fund the NFIC Acquisition.	
(6) 	Reflects the pro forma assets and liabilities of TCG BDC as if the NFIC Acquisition were to close as of December 31, 2016. The total investments reflects the fair value of the illiquid debt securities held by NFIC as of December 31, 2016 that will be transferred to TCG BDC in connection with the NFIC Acquisition. The values are derived based on the fair value of these investments as of December 31, 2016, which may not reflect the current fair value of these securities.	
 
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TCG BDC, Inc.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended December 31, 2016 (unaudited)
(dollar amounts in thousands, except per share data)

 	 	TCG
BDC (1)	 	 	NFIC(1)	 	 	Adjustments(2)	 	 	TCG BDC
Combined
Pro-Forma	 	
Investment income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income from non-controlled/non-affiliated investments	 	$	101,196	 	 	$	20,209	 	 	$	—  	 	 	$	121,405	 	
Other income from non-controlled/non-affiliated investments	 	 	6,635	 	 	 	—  	 	 	 	—  	 	 	 	6,635	 	
Interest income from controlled/affiliated investments	 	 	1,465	 	 	 	—  	 	 	 	—  	 	 	 	1,465	 	
Dividend income from controlled/affiliated investments	 	 	1,675	 	 	 	—  	 	 	 	—  	 	 	 	1,675	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total investment income	 	 	110,971	 	 	 	20,209	 	 	 	—  	 	 	 	131,180	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Base management fees	 	 	18,539	 	 	 	677	 	 	 	4,062	(4)	 	 	23,278	 	
Incentive fees	 	 	14,905	 	 	 	—  	 	 	 	2,523	(5)	 	 	17,428	 	
Professional fees	 	 	2,103	 	 	 	703	 	 	 	—  	(3)	 	 	2,806	 	
Administrative service fees	 	 	703	 	 	 	185	 	 	 	—  	(3)	 	 	888	 	
Interest expense	 	 	16,462	 	 	 	2,822	 	 	 	899	(6)	 	 	20,183	 	
Credit facility fees	 	 	2,573	 	 	 	762	 	 	 	(1,508	)(7)	 	 	1,827	 	
Directors’ fees and expenses	 	 	553	 	 	 	138	 	 	 	—  	 	 	 	691	 	
Other general and administrative	 	 	1,692	 	 	 	432	 	 	 	—  	(3)	 	 	2,124	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	57,530	 	 	 	5,719	 	 	 	5,976	 	 	 	69,225	 	
Waiver of base management fees	 	 	6,180	 	 	 	—  	 	 	 	1,579	(4)	 	 	7,759	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net expenses	 	 	51,350	 	 	 	5,719	 	 	 	4,397	 	 	 	61,466	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net investment income (loss)	 	 	59,621	 	 	 	14,490	 	 	 	(4,397	) 	 	 	69,714	 	
 	 	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net realized gain (loss) on investments, non-controlled/non affiliated	 	 	(9,644	) 	 	 	50	 	 	 	—  	 	 	 	(9,594	) 	
Net change in unrealized appreciation (depreciation) on investments—non-controlled/non-affiliated	 	 	17,560	 	 	 	(951	) 	 	 	—  	 	 	 	16,609	 	
Net change in unrealized appreciation (depreciation) on investments—controlled/affiliated	 	 	2,272	 	 	 	—  	 	 	 	—  	 	 	 	2,272	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	 	 	10,188	 	 	 	(901	) 	 	 	—  	 	 	 	9,287	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in net assets resulting from operations	 	$	69,809	 	 	$	13,589	 	 	$	(4,397	) 	 	$	79,001	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted earnings per common share	 	$	1.93	 	 	$	1.79	 	 	 	 	 	 	$	1.79	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average shares of common stock
outstanding—Basic and Diluted	 	 	36,152,390	 	 	 	7,587,210	 	 	 	273,682	 	 	 	44,013,282	 	

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(1) 	Amounts are from the respective audited Consolidated Statement of Operations for the year ended December 31, 2016 on the Form 10-K filed March 22, 2017 by TCG BDC or NFIC.	
(2) 	Reflects the changes in management fees, incentive fees, and interest expense as result of the NFIC Acquisition.	
(3) 	Amounts exclude an estimated expense of approximately $393 to be incurred as a result of the NFIC Acquisition and estimated annual savings of approximately $800.	
(4) 	Management fees are based on average gross assets for the period adjusted for share issuances or repurchases, excluding any cash and cash equivalents and including assets acquired through the incurrence of debt. See “Management—Investment Advisory Agreement.”	
(5) 	The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement) in an amount equal to 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. See “Management—Investment Advisory Agreement.”	
(6) 	Amount is reflective of removing NFIC’s interest expense of $2,822 and adding interest expense of $3,721 related to the estimated secured borrowing of $136,288 from TCG BDC’s existing facilities to fund the NFIC Acquisition as if such borrowing had occurred on January 1, 2016 at the same weighted average interest rate of 2.73% as TCG BDC’s existing secured borrowings for the year ended December 31, 2016.	
(7) 	Reduction is reflective of removing NFIC’s credit facility fees of $762 and savings on TCG BDC’s unused commitment fees of $746 from the higher utilization of TCG BDC’s existing facilities resulting in lower unused commitment fees. Amount excludes an estimate of $1,084 to be written off as a result of the NFIC Acquisition.	
 
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TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2016
(dollar amounts in thousands)
 
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TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of December 31, 2016
(dollar amounts in thousands)

 	 	 	 	 	 	 	 	 	TCG BDC	 	 	NFIC	 	 	Combined Pro-Forma	 	
Investments—non controlled/
non-affiliated	 	Industry	 	Interest
Rate	 	 	Maturity
Date	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	% of
Fair
Value	 	
First Lien Debt	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Access CIG, LLC	 	Business Services	 	 	L + 5.00% (1.00% Floor)	 	 	10/17/2021	 	 	18,335	 	 	 	18,335	 	 	 	6,079	 	 	 	6,079	 	 	 	24,414	 	 	 	24,414	 	 	 	1.4	% 	
Advanced Instruments, LLC	 	Healthcare & Pharmaceuticals	 	 	L + 5.25% (1.00% Floor)	 	 	10/31/2022	 	 	22,500	 	 	 	22,252	 	 	 	—  	 	 	 	—  	 	 	 	22,500	 	 	 	22,252	 	 	 	1.3	% 	
AF Borrower LLC (Accuvant)	 	High Tech Industries	 	 	L + 5.25% (1.00% Floor)	 	 	1/28/2022	 	 	16,113	 	 	 	16,113	 	 	 	4,028	 	 	 	4,028	 	 	 	20,141	 	 	 	20,141	 	 	 	1.2	% 	
Alpha Packaging Holdings, Inc.	 	Containers, Packaging & Glass	 	 	L + 4.25% (1.00% Floor)	 	 	5/12/2020	 	 	11,322	 	 	 	11,322	 	 	 	3,774	 	 	 	3,774	 	 	 	15,096	 	 	 	15,096	 	 	 	0.9	% 	
Anaren, Inc.	 	Telecommunications	 	 	L + 4.50% (1.00% Floor)	 	 	2/18/2021	 	 	10,869	 	 	 	10,869	 	 	 	3,170	 	 	 	3,170	 	 	 	14,039	 	 	 	14,039	 	 	 	0.8	% 	
APX Group Inc.	 	Consumer Services	 	 	6.38%	 	 	12/1/2019	 	 	—  	 	 	 	—  	 	 	 	2,500	 	 	 	2,572	 	 	 	2,500	 	 	 	2,572	 	 	 	0.2	% 	
Aquilex LLC	 	Environmental Industries	 	 	L + 4.00% (1.00% Floor)	 	 	12/31/2020	 	 	—  	 	 	 	—  	 	 	 	3,212	 	 	 	3,207	 	 	 	3,212	 	 	 	3,207	 	 	 	0.2	% 	
Audax AAMP Holdings, Inc.	 	Durable Consumer Goods	 	 	L + 6.00% (1.00% Floor)	 	 	6/24/2017	 	 	10,424	 	 	 	10,348	 	 	 	2,552	 	 	 	2,533	 	 	 	12,976	 	 	 	12,881	 	 	 	0.8	% 	
BAART Programs, Inc.	 	Healthcare & Pharmaceuticals	 	 	L + 7.75% (0.00% Floor)	 	 	10/9/2021	 	 	7,406	 	 	 	7,534	 	 	 	—  	 	 	 	—  	 	 	 	7,406	 	 	 	7,534	 	 	 	0.4	% 	
Brooks Equipment Company, LLC	 	Construction & Building	 	 	L + 5.00% (1.00% Floor)	 	 	8/29/2020	 	 	6,694	 	 	 	6,683	 	 	 	1,674	 	 	 	1,671	 	 	 	8,368	 	 	 	8,354	 	 	 	0.5	% 	
Capstone Logistics Acquisition, Inc.	 	Transportation: Cargo	 	 	L + 4.50% (1.00% Floor)	 	 	10/7/2021	 	 	19,478	 	 	 	19,212	 	 	 	4,870	 	 	 	4,803	 	 	 	24,348	 	 	 	24,015	 	 	 	1.4	% 	
Captive Resources Midco, LLC	 	Banking, Finance, Insurance & Real Estate	 	 	L + 5.75% (1.00% Floor)	 	 	6/30/2020	 	 	29,050	 	 	 	29,009	 	 	 	4,150	 	 	 	4,144	 	 	 	33,200	 	 	 	33,153	 	 	 	1.9	% 	
Central Security Group, Inc.	 	Consumer Services	 	 	L + 5.63% (1.00% Floor)	 	 	10/6/2020	 	 	28,658	 	 	 	28,557	 	 	 	5,692	 	 	 	5,672	 	 	 	34,350	 	 	 	34,229	 	 	 	2.0	% 	
CIBT Holdings, Inc.	 	Transportation: Consumer	 	 	L + 5.25% (1.00% Floor)	 	 	6/28/2022	 	 	—  	 	 	 	—  	 	 	 	4,211	 	 	 	4,211	 	 	 	4,211	 	 	 	4,211	 	 	 	0.2	% 	
CIP Revolution Holdings, LLC	 	Media: Advertising, Printing & Publishing	 	 	L + 6.00% (1.00% Floor)	 	 	8/19/2021	 	 	16,500	 	 	 	16,585	 	 	 	—  	 	 	 	—  	 	 	 	16,500	 	 	 	16,585	 	 	 	1.0	% 	
Colony Hardware Corporation	 	Construction & Building	 	 	L + 6.00% (1.00% Floor)	 	 	10/23/2021	 	 	17,038	 	 	 	17,038	 	 	 	2,621	 	 	 	2,621	 	 	 	19,659	 	 	 	19,659	 	 	 	1.2	% 	
Cvent, Inc.	 	High Tech Industries	 	 	L + 5.00% (1.00% Floor)	 	 	6/30/2023	 	 	—  	 	 	 	—  	 	 	 	4,000	 	 	 	3,996	 	 	 	4,000	 	 	 	3,996	 	 	 	0.2	% 	
Datapipe, Inc.	 	Telecommunications	 	 	L + 4.75% (1.00% Floor)	 	 	3/15/2019	 	 	9,750	 	 	 	9,764	 	 	 	4,875	 	 	 	4,882	 	 	 	14,625	 	 	 	14,646	 	 	 	0.9	% 	
Dent Wizard International Corporation	 	Automotive	 	 	L + 4.75% (1.00% Floor)	 	 	4/7/2020	 	 	7,216	 	 	 	7,216	 	 	 	3,374	 	 	 	3,374	 	 	 	10,590	 	 	 	10,590	 	 	 	0.6	% 	
 
F-119

Table of Contents
TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

 	 	 	 	 	 	 	 	 	TCG BDC	 	 	NFIC	 	 	Combined Pro-Forma	 	
Investments—non controlled/
non-affiliated	 	Industry	 	Interest
Rate	 	 	Maturity
Date	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	% of
Fair
Value	 	
Derm Growth Partners III, LLC (Dermatology Associates)	 	Healthcare & Pharmaceuticals	 	 	L + 6.50% (1.00% Floor)	 	 	5/31/2022	 	 	32,929	 	 	 	32,958	 	 	 	—  	 	 	 	—  	 	 	 	32,929	 	 	 	32,958	 	 	 	1.9	% 	
Dimensional Dental Management, LLC	 	Healthcare & Pharmaceuticals	 	 	L + 7.00% (1.00% Floor)	 	 	2/12/2021	 	 	18,000	 	 	 	17,811	 	 	 	2,500	 	 	 	2,474	 	 	 	20,500	 	 	 	20,285	 	 	 	1.2	% 	
Dimora Brands, Inc. (fka TK USA Enterprises, Inc.)	 	Construction & Building	 	 	L + 4.50% (1.00% Floor)	 	 	4/4/2022	 	 	—  	 	 	 	(30	) 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(30	) 	 	 	0.0	% 	
Direct Travel, Inc.	 	Hotel, Gaming & Leisure	 	 	L + 6.50% (1.00% Floor)	 	 	12/1/2021	 	 	12,842	 	 	 	12,712	 	 	 	1,427	 	 	 	1,413	 	 	 	14,269	 	 	 	14,125	 	 	 	0.8	% 	
DTI Holdco, Inc.	 	High Tech Industries	 	 	L + 5.25% (1.00% Floor)	 	 	9/23/2023	 	 	—  	 	 	 	—  	 	 	 	4,988	 	 	 	4,913	 	 	 	4,988	 	 	 	4,913	 	 	 	0.3	% 	
EIP Merger Sub, LLC (Evolve IP)	 	Telecommunications	 	 	L + 6.25% (1.00% Floor)	 	 	6/7/2021	 	 	23,750	 	 	 	23,242	 	 	 	—  	 	 	 	—  	 	 	 	23,750	 	 	 	23,242	 	 	 	1.4	% 	
Emerging Markets Communications, LLC	 	Telecommunications	 	 	L + 5.75% (1.00% Floor)	 	 	7/1/2021	 	 	17,730	 	 	 	17,730	 	 	 	1,970	 	 	 	1,970	 	 	 	19,700	 	 	 	19,700	 	 	 	1.2	% 	
EP Minerals, LLC	 	Metals & Mining	 	 	L + 4.50% (1.00% Floor)	 	 	8/20/2020	 	 	10,264	 	 	 	10,259	 	 	 	3,421	 	 	 	3,419	 	 	 	13,685	 	 	 	13,678	 	 	 	0.8	% 	
FCX Holdings Corp.	 	Capital Equipment	 	 	L + 4.50% (1.00% Floor)	 	 	8/4/2020	 	 	9,856	 	 	 	9,856	 	 	 	3,672	 	 	 	3,672	 	 	 	13,528	 	 	 	13,528	 	 	 	0.8	% 	
Genex Holdings, Inc.	 	Banking, Finance, Insurance & Real Estate	 	 	L + 4.25% (1.00% Floor)	 	 	5/30/2021	 	 	4,200	 	 	 	4,196	 	 	 	5,007	 	 	 	5,002	 	 	 	9,207	 	 	 	9,198	 	 	 	0.5	% 	
Generation Brands Holdings, Inc.	 	Durable Consumer Goods	 	 	L + 5.00% (1.00% Floor)	 	 	6/10/2022	 	 	—  	 	 	 	—  	 	 	 	4,975	 	 	 	5,025	 	 	 	4,975	 	 	 	5,025	 	 	 	0.3	% 	
Global Software, LLC	 	High Tech Industries	 	 	L + 5.50% (1.00% Floor)	 	 	5/2/2022	 	 	16,163	 	 	 	16,163	 	 	 	—  	 	 	 	—  	 	 	 	16,163	 	 	 	16,163	 	 	 	0.9	% 	
Green Energy Partners/Stonewall LLC	 	Energy: Electricity	 	 	L + 5.50% (1.00% Floor)	 	 	11/13/2021	 	 	16,600	 	 	 	16,598	 	 	 	3,400	 	 	 	3,400	 	 	 	20,000	 	 	 	19,998	 	 	 	1.2	% 	
Green Plains II LLC	 	Beverage, Food & Tobacco	 	 	L + 7.00% (1.00% Floor)	 	 	10/3/2022	 	 	15,205	 	 	 	15,379	 	 	 	—  	 	 	 	—  	 	 	 	15,205	 	 	 	15,379	 	 	 	0.9	% 	
Hummel Station LLC	 	Energy: Electricity	 	 	L + 6.00% (1.00% Floor)	 	 	10/27/2022	 	 	21,000	 	 	 	20,160	 	 	 	4,000	 	 	 	3,840	 	 	 	25,000	 	 	 	24,000	 	 	 	1.4	% 	
Imagine! Print Solutions, LLC	 	Media: Advertising, Printing & Publishing	 	 	L + 6.00% (1.00% Floor)	 	 	3/30/2022	 	 	18,461	 	 	 	18,603	 	 	 	2,382	 	 	 	2,400	 	 	 	20,843	 	 	 	21,003	 	 	 	1.2	% 	
Imperial Bag & Paper Co. LLC	 	Forest Products & Paper	 	 	L + 6.00% (1.00% Floor)	 	 	1/7/2022	 	 	24,074	 	 	 	23,924	 	 	 	4,012	 	 	 	3,987	 	 	 	28,086	 	 	 	27,911	 	 	 	1.6	% 	
Indra Holdings Corp. (Totes Isotoner)	 	Non-durable Consumer Goods	 	 	L + 4.25% (1.00% Floor)	 	 	5/1/2021	 	 	14,224	 	 	 	10,553	 	 	 	4,741	 	 	 	3,518	 	 	 	18,965	 	 	 	14,071	 	 	 	0.8	% 	
Integro Parent Inc	 	Banking, Finance, Insurance & Real Estate	 	 	L + 5.75% (1.00% Floor)	 	 	10/30/2022	 	 	—  	 	 	 	—  	 	 	 	4,951	 	 	 	4,853	 	 	 	4,951	 	 	 	4,853	 	 	 	0.3	% 	
International Medical Group, Inc.	 	Banking, Finance, Insurance & Real Estate	 	 	L + 6.50% (1.00% Floor)	 	 	10/30/2020	 	 	30,000	 	 	 	30,237	 	 	 	5,000	 	 	 	5,040	 	 	 	35,000	 	 	 	35,277	 	 	 	2.1	% 	
Jackson Hewitt Inc.	 	Retail	 	 	L + 7.00% (1.00% Floor)	 	 	7/30/2020	 	 	8,758	 	 	 	8,320	 	 	 	1,302	 	 	 	1,237	 	 	 	10,060	 	 	 	9,557	 	 	 	0.6	% 	
Metrogistics LLC	 	Transportation: Cargo	 	 	L + 6.50% (1.00% Floor)	 	 	9/30/2022	 	 	15,200	 	 	 	15,094	 	 	 	1,800	 	 	 	1,787	 	 	 	17,000	 	 	 	16,881	 	 	 	1.0	% 	
Ministry Brands, LLC	 	High Tech Industries	 	 	L + 5.00% (1.00% Floor)	 	 	12/2/2022	 	 	—  	 	 	 	—  	 	 	 	4,708	 	 	 	4,702	 	 	 	4,708	 	 	 	4,702	 	 	 	0.3	% 	
 
F-120

Table of Contents
TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

 	 	 	 	 	 	 	 	 	TCG BDC	 	 	NFIC	 	 	Combined Pro-Forma	 	
Investments—non controlled/
non-affiliated	 	Industry	 	Interest
Rate	 	 	Maturity
Date	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	% of
Fair
Value	 	
MSX International, Inc.	 	Automotive	 	 	L + 5.00% (1.00% Floor)	 	 	8/21/2020	 	 	8,940	 	 	 	8,940	 	 	 	1,962	 	 	 	1,962	 	 	 	10,902	 	 	 	10,902	 	 	 	0.6	% 	
National Technical Systems, Inc.	 	Aerospace & Defense	 	 	L + 6.25% (1.00% Floor)	 	 	6/12/2021	 	 	25,123	 	 	 	23,927	 	 	 	5,798	 	 	 	5,522	 	 	 	30,921	 	 	 	29,449	 	 	 	1.7	% 	
NES Global Talent Finance US LLC	 	Energy: Oil & Gas	 	 	L + 5.50% (1.00% Floor)	 	 	10/3/2019	 	 	11,250	 	 	 	10,911	 	 	 	3,150	 	 	 	3,055	 	 	 	14,400	 	 	 	13,966	 	 	 	0.8	% 	
Netsmart Technologies, Inc.	 	High Tech Industries	 	 	L + 4.50% (1.00% Floor)	 	 	4/19/2023	 	 	—  	 	 	 	—  	 	 	 	4,577	 	 	 	4,538	 	 	 	4,577	 	 	 	4,538	 	 	 	0.3	% 	
OnCourse Learning Corporation	 	Consumer Services	 	 	L + 6.50% (1.00% Floor)	 	 	9/12/2021	 	 	26,141	 	 	 	26,220	 	 	 	2,905	 	 	 	2,913	 	 	 	29,046	 	 	 	29,133	 	 	 	1.7	% 	
Paradigm Acquisition Corp.	 	Business Services	 	 	L + 5.00% (1.00% Floor)	 	 	6/2/2022	 	 	23,246	 	 	 	23,223	 	 	 	4,334	 	 	 	4,330	 	 	 	27,580	 	 	 	27,553	 	 	 	1.6	% 	
Pasternack Enterprises	 	Capital Equipment	 	 	L + 5.00% (1.00% Floor)	 	 	5/27/2022	 	 	—  	 	 	 	—  	 	 	 	2,985	 	 	 	2,985	 	 	 	2,985	 	 	 	2,985	 	 	 	0.2	% 	
Pelican Products, Inc.	 	Containers, Packaging & Glass	 	 	L + 4.25% (1.00% Floor)	 	 	4/11/2020	 	 	7,643	 	 	 	7,593	 	 	 	2,924	 	 	 	2,905	 	 	 	10,567	 	 	 	10,498	 	 	 	0.6	% 	
Plano Molding Company, LLC	 	Hotel, Gaming & Leisure	 	 	L + 7.00% (1.00% Floor)	 	 	5/12/2021	 	 	18,163	 	 	 	17,302	 	 	 	3,536	 	 	 	3,369	 	 	 	21,699	 	 	 	20,671	 	 	 	1.2	% 	
PPT Management Holdings, LLC	 	Healthcare & Pharmaceuticals	 	 	L + 6.00% (1.00% Floor)	 	 	12/16/2022	 	 	22,500	 	 	 	22,426	 	 	 	2,500	 	 	 	2,492	 	 	 	25,000	 	 	 	24,918	 	 	 	1.5	% 	
Premier Senior Marketing, LLC	 	Banking, Finance, Insurance & Real Estate	 	 	L + 5.00% (1.00% Floor)	 	 	7/1/2022	 	 	3,741	 	 	 	3,741	 	 	 	3,741	 	 	 	3,741	 	 	 	7,482	 	 	 	7,482	 	 	 	0.4	% 	
Product Quest Manufacturing, LLC	 	Containers, Packaging & Glass	 	 	L + 5.75% (1.00% Floor)	 	 	9/9/2020	 	 	28,000	 	 	 	25,838	 	 	 	5,000	 	 	 	4,614	 	 	 	33,000	 	 	 	30,452	 	 	 	1.8	% 	
Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)	 	Wholesale	 	 	L + 4.50% (1.00% Floor)	 	 	1/28/2020	 	 	10,798	 	 	 	8,101	 	 	 	4,270	 	 	 	3,204	 	 	 	15,068	 	 	 	11,305	 	 	 	0.7	% 	
PSC Industrial Holdings Corp	 	Environmental Industries	 	 	L + 4.75% (1.00% Floor)	 	 	12/5/2020	 	 	11,760	 	 	 	11,289	 	 	 	2,940	 	 	 	2,822	 	 	 	14,700	 	 	 	14,111	 	 	 	0.8	% 	
PSI Services LLC	 	Business Services	 	 	L + 6.75% (1.00% Floor)	 	 	2/27/2021	 	 	32,705	 	 	 	34,785	 	 	 	5,681	 	 	 	6,042	 	 	 	38,386	 	 	 	40,827	 	 	 	2.4	% 	
PT Intermediate Holdings III, LLC (Parts Town)	 	Wholesale	 	 	L + 6.50% (1.00% Floor)	 	 	6/23/2022	 	 	17,417	 	 	 	17,563	 	 	 	1,935	 	 	 	1,952	 	 	 	19,352	 	 	 	19,515	 	 	 	1.1	% 	
Q Holding Company	 	Automotive	 	 	L + 5.00% (1.00% Floor)	 	 	12/18/2021	 	 	—  	 	 	 	—  	 	 	 	3,491	 	 	 	3,485	 	 	 	3,491	 	 	 	3,485	 	 	 	0.2	% 	
QW Holding Corporation (Quala)	 	Environmental Industries	 	 	L + 6.75% (1.00% Floor)	 	 	8/31/2022	 	 	29,925	 	 	 	30,009	 	 	 	—  	 	 	 	—  	 	 	 	29,925	 	 	 	30,009	 	 	 	1.8	% 	
Reliant Pro Rehab, LLC	 	Healthcare & Pharmaceuticals	 	 	L + 10.00% (1.00% Floor)	 	 	12/29/2017	 	 	22,331	 	 	 	22,331	 	 	 	2,481	 	 	 	2,481	 	 	 	24,812	 	 	 	24,812	 	 	 	1.5	% 	
Restaurant Technologies, Inc.	 	Retail	 	 	L + 4.75% (1.00% Floor)	 	 	11/23/2022	 	 	—  	 	 	 	—  	 	 	 	3,500	 	 	 	3,492	 	 	 	3,500	 	 	 	3,492	 	 	 	0.2	% 	
SolAreo Technologies Corp.	 	Telecommunications	 	 	L + 5.25% (1.00% Floor)	 	 	12/10/2020	 	 	19,677	 	 	 	18,901	 	 	 	6,527	 	 	 	6,270	 	 	 	26,204	 	 	 	25,171	 	 	 	1.5	% 	
Superior Health Linens, LLC	 	Business Services	 	 	L + 6.50% (1.00% Floor)	 	 	9/30/2021	 	 	19,206	 	 	 	19,068	 	 	 	1,980	 	 	 	1,966	 	 	 	21,186	 	 	 	21,034	 	 	 	1.2	% 	
T2 Systems Canada, Inc.	 	Transportation: Consumer	 	 	L + 6.75% (1.00% Floor)	 	 	9/28/2022	 	 	4,050	 	 	 	4,090	 	 	 	—  	 	 	 	—  	 	 	 	4,050	 	 	 	4,090	 	 	 	0.2	% 	
T2 Systems, Inc.	 	Transportation: Consumer	 	 	L + 6.75% (1.00% Floor)	 	 	9/28/2022	 	 	22,950	 	 	 	23,208	 	 	 	—  	 	 	 	—  	 	 	 	22,950	 	 	 	23,208	 	 	 	1.4	% 	
Teaching Strategies, LLC	 	Media: Advertising, Printing & Publishing	 	 	L + 5.50% (0.50% Floor)	 	 	10/1/2019	 	 	13,369	 	 	 	13,369	 	 	 	4,454	 	 	 	4,454	 	 	 	17,823	 	 	 	17,823	 	 	 	1.0	% 	
The Hilb Group, LLC	 	Banking, Finance, Insurance & Real Estate	 	 	L + 6.50% (1.00% Floor)	 	 	6/24/2021	 	 	29,682	 	 	 	29,826	 	 	 	—  	 	 	 	—  	 	 	 	29,682	 	 	 	29,826	 	 	 	1.7	% 	
 
F-121

Table of Contents
TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

 	 	 	 	 	 	 	 	 	TCG BDC	 	 	NFIC	 	 	Combined Pro-Forma	 	
Investments—non controlled/
non-affiliated	 	Industry	 	Interest
Rate	 	 	Maturity
Date	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	% of
Fair
Value	 	
The SI Organization, Inc.	 	Aerospace & Defense	 	 	L + 4.75% (1.00% Floor)	 	 	11/23/2019	 	 	8,574	 	 	 	8,676	 	 	 	5,879	 	 	 	5,949	 	 	 	14,453	 	 	 	14,625	 	 	 	0.9	% 	
The Topps Company, Inc.	 	Non-durable Consumer Goods	 	 	L + 6.00% (1.25% Floor)	 	 	10/2/2020	 	 	18,707	 	 	 	18,795	 	 	 	4,677	 	 	 	4,699	 	 	 	23,384	 	 	 	23,494	 	 	 	1.4	% 	
Transilwrap Company, Inc.	 	Chemicals, Plastics & Rubber	 	 	L + 4.50% (1.00% Floor)	 	 	11/22/2019	 	 	—  	 	 	 	—  	 	 	 	1,762	 	 	 	1,761	 	 	 	1,762	 	 	 	1,761	 	 	 	0.1	% 	
Transilwrap Company, Inc.	 	Chemicals, Plastics & Rubber	 	 	L + 3.75% (1.00% Floor)	 	 	11/22/2019	 	 	—  	 	 	 	—  	 	 	 	4,829	 	 	 	4,829	 	 	 	4,829	 	 	 	4,829	 	 	 	0.3	% 	
Truckpro, LLC	 	Automotive	 	 	L + 5.00% (1.00% Floor)	 	 	8/6/2018	 	 	9,292	 	 	 	9,262	 	 	 	—  	 	 	 	—  	 	 	 	9,292	 	 	 	9,262	 	 	 	0.5	% 	
Tweddle Group, Inc.	 	Media: Advertising, Printing & Publishing	 	 	L + 6.00% (1.00% Floor)	 	 	10/24/2022	 	 	16,200	 	 	 	16,114	 	 	 	1,800	 	 	 	1,790	 	 	 	18,000	 	 	 	17,904	 	 	 	1.0	% 	
TwentyEighty, Inc. (fka Miller Heiman, Inc.)	 	Business Services	 	 	L + 6.00% (1.00% Floor)	 	 	9/30/2019	 	 	18,719	 	 	 	7,628	 	 	 	6,433	 	 	 	2,621	 	 	 	25,152	 	 	 	10,249	 	 	 	0.6	% 	
U.S. Acute Care Solutions, Inc.	 	Healthcare & Pharmaceuticals	 	 	L + 5.00% (1.00% Floor)	 	 	5/15/2021	 	 	—  	 	 	 	—  	 	 	 	5,955	 	 	 	5,941	 	 	 	5,955	 	 	 	5,941	 	 	 	0.3	% 	
U.S. Anesthesia Partners, Inc.	 	Healthcare & Pharmaceuticals	 	 	L + 5.00% (1.00% Floor)	 	 	12/31/2019	 	 	—  	 	 	 	—  	 	 	 	2,594	 	 	 	2,590	 	 	 	2,594	 	 	 	2,590	 	 	 	0.2	% 	
U.S. Farathane, LLC	 	Automotive	 	 	L + 4.75% (1.00% Floor)	 	 	12/23/2021	 	 	1,925	 	 	 	1,925	 	 	 	4,950	 	 	 	4,950	 	 	 	6,875	 	 	 	6,875	 	 	 	0.4	% 	
U.S. TelePacific Holdings Corp.	 	Telecommunications	 	 	L + 8.50% (1.00% Floor)	 	 	2/24/2021	 	 	30,000	 	 	 	29,853	 	 	 	—  	 	 	 	—  	 	 	 	30,000	 	 	 	29,853	 	 	 	1.7	% 	
Vantage Specialty Chemicals, Inc.	 	Chemicals, Plastics & Rubber	 	 	L + 4.50% (1.00% Floor)	 	 	2/5/2021	 	 	—  	 	 	 	—  	 	 	 	4,477	 	 	 	4,476	 	 	 	4,477	 	 	 	4,476	 	 	 	0.3	% 	
Vetcor Professional Practices, LLC	 	Consumer Services	 	 	L + 6.25% (1.00% Floor)	 	 	4/20/2021	 	 	25,001	 	 	 	25,164	 	 	 	4,763	 	 	 	4,791	 	 	 	29,764	 	 	 	29,955	 	 	 	1.8	% 	
Violin Finco S.A.R.L. (Alexander Mann Solutions)	 	Business Services	 	 	L + 4.75% (1.00% Floor)	 	 	12/20/2019	 	 	10,065	 	 	 	10,058	 	 	 	2,818	 	 	 	2,816	 	 	 	12,883	 	 	 	12,874	 	 	 	0.8	% 	
Vistage Worldwide Inc.	 	Business Services	 	 	L + 5.50% (1.00% Floor)	 	 	8/19/2021	 	 	28,757	 	 	 	28,688	 	 	 	4,793	 	 	 	4,781	 	 	 	33,550	 	 	 	33,469	 	 	 	2.0	% 	
Vitera Healthcare Solutions, LLC	 	Healthcare & Pharmaceuticals	 	 	L + 5.00% (1.00% Floor)	 	 	11/4/2020	 	 	9,104	 	 	 	9,078	 	 	 	3,186	 	 	 	3,177	 	 	 	12,290	 	 	 	12,255	 	 	 	0.7	% 	
W/S Packaging Group, Inc.	 	Containers, Packaging & Glass	 	 	L + 5.00% (1.00% Floor)	 	 	8/9/2019	 	 	—  	 	 	 	—  	 	 	 	4,058	 	 	 	3,831	 	 	 	4,058	 	 	 	3,831	 	 	 	0.2	% 	
Watchfire Enterprises, Inc.	 	Media: Advertising, Printing & Publishing	 	 	L + 4.00% (1.00% Floor)	 	 	10/2/2020	 	 	—  	 	 	 	—  	 	 	 	3,342	 	 	 	3,342	 	 	 	3,342	 	 	 	3,342	 	 	 	0.2	% 	
Winchester Electronics Corporation	 	Capital Equipment	 	 	L + 6.50% (1.00% Floor)	 	 	6/30/2022	 	 	27,367	 	 	 	27,460	 	 	 	4,562	 	 	 	4,577	 	 	 	31,929	 	 	 	32,037	 	 	 	1.9	% 	
WIRB - Copernicus Group, Inc.	 	Healthcare & Pharmaceuticals	 	 	L + 5.00% (1.00% Floor)	 	 	8/12/2022	 	 	—  	 	 	 	—  	 	 	 	1,995	 	 	 	2,013	 	 	 	1,995	 	 	 	2,013	 	 	 	0.1	% 	
Zest Holdings, LLC	 	Durable Consumer Goods	 	 	L + 4.75% (1.00% Floor)	 	 	8/16/2020	 	 	9,530	 	 	 	9,584	 	 	 	4,822	 	 	 	4,849	 	 	 	14,352	 	 	 	14,433	 	 	 	0.8	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
First Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,139,548	 	 	 	 	 	 	 	275,766	 	 	 	 	 	 	 	1,415,314	 	 	 	82.8	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
AF Borrower LLC (Accuvant)	 	High Tech Industries	 	 	L + 9.00% (1.00% Floor)	 	 	1/30/2023	 	 	8,000	 	 	 	8,000	 	 	 	2,000	 	 	 	2,000	 	 	 	10,000	 	 	 	10,000	 	 	 	0.6	% 	
AIM Group USA Inc.	 	Aerospace & Defense	 	 	L + 9.00% (1.00% Floor)	 	 	8/2/2022	 	 	23,000	 	 	 	23,196	 	 	 	—  	 	 	 	—  	 	 	 	23,000	 	 	 	23,196	 	 	 	1.4	% 	
 
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Table of Contents
TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

 	 	 	 	 	 	 	 	 	TCG BDC	 	 	NFIC	 	 	Combined Pro-Forma	 	
Investments—non controlled/
non-affiliated	 	Industry	 	Interest
Rate	 	 	Maturity
Date	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	Par/
Principal
Amount	 	 	Fair
Value	 	 	% of
Fair
Value	 	
AmeriLife Group, LLC	 	Banking, Finance, Insurance & Real Estate	 	 	L + 8.75% (1.00% Floor)	 	 	1/10/2023	 	 	20,000	 	 	 	19,208	 	 	 	2,000	 	 	 	1,921	 	 	 	22,000	 	 	 	21,129	 	 	 	1.2	% 	
Argon Medical Devices, Inc.	 	Healthcare & Pharmaceuticals	 	 	L + 9.50% (1.00% Floor)	 	 	6/23/2022	 	 	24,000	 	 	 	24,233	 	 	 	1,000	 	 	 	1,010	 	 	 	25,000	 	 	 	25,243	 	 	 	1.5	% 	
Berlin Packaging L.L.C.	 	Containers, Packaging & Glass	 	 	L + 6.75% (1.00% Floor)	 	 	10/1/2022	 	 	2,927	 	 	 	2,953	 	 	 	573	 	 	 	578	 	 	 	3,500	 	 	 	3,531	 	 	 	0.2	% 	
Charter NEX US Holdings, Inc.	 	Chemicals, Plastics & Rubber	 	 	L + 8.25% (1.00% Floor)	 	 	2/5/2023	 	 	7,394	 	 	 	7,468	 	 	 	1,479	 	 	 	1,494	 	 	 	8,873	 	 	 	8,962	 	 	 	0.5	% 	
Confie Seguros Holding II Co.	 	Banking, Finance, Insurance & Real Estate	 	 	L + 9.00% (1.25% Floor)	 	 	5/8/2019	 	 	12,000	 	 	 	11,918	 	 	 	—  	 	 	 	—  	 	 	 	12,000	 	 	 	11,918	 	 	 	0.7	% 	
Drew Marine Group Inc.	 	Chemicals, Plastics & Rubber	 	 	L + 7.00% (1.00% Floor)	 	 	5/19/2021	 	 	12,500	 	 	 	12,333	 	 	 	—  	 	 	 	—  	 	 	 	12,500	 	 	 	12,333	 	 	 	0.7	% 	
Genex Holdings, Inc.	 	Banking, Finance, Insurance & Real Estate	 	 	L + 7.75% (1.00% Floor)	 	 	5/30/2022	 	 	7,990	 	 	 	7,978	 	 	 	1,000	 	 	 	998	 	 	 	8,990	 	 	 	8,976	 	 	 	0.5	% 	
Institutional Shareholder Services Inc.	 	Banking, Finance, Insurance & Real Estate	 	 	L + 8.50% (1.00% Floor)	 	 	4/29/2022	 	 	12,500	 	 	 	12,359	 	 	 	—  	 	 	 	—  	 	 	 	12,500	 	 	 	12,359	 	 	 	0.7	% 	
Jazz Acquisition, Inc. (Wencor)	 	Aerospace & Defense	 	 	L + 6.75% (1.00% Floor)	 	 	6/19/2022	 	 	6,700	 	 	 	5,572	 	 	 	800	 	 	 	665	 	 	 	7,500	 	 	 	6,237	 	 	 	0.4	% 	
MRI Software, LLC	 	Software	 	 	L + 8.00% (1.00% Floor)	 	 	6/23/2022	 	 	11,250	 	 	 	11,265	 	 	 	1,250	 	 	 	1,252	 	 	 	12,500	 	 	 	12,517	 	 	 	0.7	% 	
Power Stop, LLC	 	Automotive	 	 	11.00%	 	 	5/29/2022	 	 	10,000	 	 	 	9,863	 	 	 	—  	 	 	 	—  	 	 	 	10,000	 	 	 	9,863	 	 	 	0.6	% 	
Prowler Acquisition Corp. (Pipeline Supply and Service, LLC)	 	Wholesale	 	 	L + 8.50% (1.00% Floor)	 	 	7/28/2020	 	 	3,000	 	 	 	1,682	 	 	 	—  	 	 	 	—  	 	 	 	3,000	 	 	 	1,682	 	 	 	0.1	% 	
Vantage Specialty Chemicals, Inc.	 	Chemicals, Plastics & Rubber	 	 	L + 8.75% (1.00% Floor)	 	 	2/5/2022	 	 	—  	 	 	 	—  	 	 	 	500	 	 	 	497	 	 	 	500	 	 	 	497	 	 	 	0.0	% 	
Vitera Healthcare Solutions, LLC	 	Healthcare & Pharmaceuticals	 	 	L + 8.25% (1.00% Floor)	 	 	11/4/2021	 	 	2,000	 	 	 	1,945	 	 	 	—  	 	 	 	—  	 	 	 	2,000	 	 	 	1,945	 	 	 	0.1	% 	
Watchfire Enterprises, Inc.	 	Media: Advertising, Printing & Publishing	 	 	L + 8.00% (1.00% Floor)	 	 	10/2/2021	 	 	7,000	 	 	 	6,976	 	 	 	—  	 	 	 	—  	 	 	 	7,000	 	 	 	6,976	 	 	 	0.4	% 	
Zywave, Inc.	 	High Tech Industries	 	 	L + 9.00% (1.00% Floor)	 	 	11/17/2023	 	 	4,950	 	 	 	4,915	 	 	 	—  	 	 	 	—  	 	 	 	4,950	 	 	 	4,915	 	 	 	0.3	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second Lien Debt Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	171,864	 	 	 	 	 	 	 	10,415	 	 	 	 	 	 	 	182,279	 	 	 	10.7	% 	

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Table of Contents
TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments—non controlled/
non-affiliated	 	 	 	 	 	 	 	 	 	Par
Amount	 	 	Fair
Value	 	 	Par
Amount	 	 	Fair
Value	 	 	Par
Amount	 	 	Fair
Value	 	 	 	 	
Structured Finance Obligations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
1776 CLO I, Ltd., Subordinated Notes	 	Structured Finance	 	 	 	 	 	 	5/8/2020	 	 	 	11,750	 	 	 	2,761	 	 	 	—  	 	 	 	—  	 	 	 	11,750	 	 	 	2,761	 	 	 	0.2	% 	
Clydesdale CLO 2005, Ltd., Subordinated Notes	 	Structured Finance	 	 	 	 	 	 	12/6/2017	 	 	 	5,750	 	 	 	10	 	 	 	—  	 	 	 	—  	 	 	 	5,750	 	 	 	10	 	 	 	0.0	% 	
MSIM Peconic Bay, Ltd., Subordinated Notes	 	Structured Finance	 	 	 	 	 	 	7/20/2019	 	 	 	4,500	 	 	 	5	 	 	 	—  	 	 	 	—  	 	 	 	4,500	 	 	 	5	 	 	 	0.0	% 	
Nautique Funding Ltd., Income Notes	 	Structured Finance	 	 	 	 	 	 	4/15/2020	 	 	 	5,000	 	 	 	2,440	 	 	 	—  	 	 	 	—  	 	 	 	5,000	 	 	 	2,440	 	 	 	0.1	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Structured Finance Obligations Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	5,216	 	 	 	 	 	 	 	—  	 	 	 	 	 	 	 	5,216	 	 	 	0.3	% 	

Investments—non controlled/
non-affiliated	 	 	 	 	 	 	 	 	 	Shares/Units	 	 	Fair
Value	 	 	Shares/
Units	 	 	Fair
Value	 	 	Shares/
Units	 	 	Fair
Value	 	 	 	 	
Equity Investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
CIP Revolution Investments, LLC	 	Media: Advertising, Printing & Publishing	 	 	 	 	 	 	 	 	 	 	30,000	 	 	 	352	 	 	 	—  	 	 	 	—  	 	 	 	30,000	 	 	 	352	 	 	 	0.0	% 	
Derm Growth Partners III, LLC (Dermatology Associates)	 	Healthcare & Pharmaceuticals	 	 	 	 	 	 	 	 	 	 	1,000,000	 	 	 	976	 	 	 	—  	 	 	 	—  	 	 	 	1,000,000	 	 	 	976	 	 	 	0.1	% 	
GS Holdco LLC (Global Software, LLC)	 	High Tech Industries	 	 	 	 	 	 	 	 	 	 	1,000,000	 	 	 	1,126	 	 	 	—  	 	 	 	—  	 	 	 	1,000,000	 	 	 	1,126	 	 	 	0.1	% 	
Power Stop Intermediate Holdings, LLC	 	Automotive	 	 	 	 	 	 	 	 	 	 	7,150	 	 	 	1,208	 	 	 	—  	 	 	 	—  	 	 	 	7,150	 	 	 	1,208	 	 	 	0.1	% 	
T2 Systems Parent Corporation	 	Transportation: Consumer	 	 	 	 	 	 	 	 	 	 	555,556	 	 	 	584	 	 	 	—  	 	 	 	—  	 	 	 	555,556	 	 	 	584	 	 	 	0.0	% 	
THG Acquisition, LLC (The Hilb Group, LLC)	 	Banking, Finance, Insurance & Real Estate	 	 	 	 	 	 	 	 	 	 	1,500,000	 	 	 	2,228	 	 	 	—  	 	 	 	—  	 	 	 	1,500,000	 	 	 	2,228	 	 	 	0.1	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity Investments Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	6,474	 	 	 	 	 	 	 	—  	 	 	 	 	 	 	 	6,474	 	 	 	0.4	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments—non-controlled/non-affiliated	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,323,102	 	 	 	 	 	 	 	286,181	 	 	 	 	 	 	 	1,609,283	 	 	 	94.2	% 	

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Table of Contents
TCG BDC, INC. & NF INVESTMENT CORP.
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
As of December 31, 2016
(dollar amounts in thousands)

Investments - non controlled/non-
affiliated	 	 	 	 	 	 	 	 	 	Par Amount/
LLC Interest	 	 	Fair
Value	 	 	Par Amount/
LLC Interest	 	 	Fair
Value	 	 	Par Amount/
LLC Interest	 	 	Fair
Value	 	 	 	 	
Investment Fund	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Middle Market Credit Fund, LLC, Mezzanine Loan	 	Investment Fund	 	 	L + 9.50%	 	 	 	6/24/2017	 	 	 	62,384	 	 	 	62,384	 	 	 	—  	 	 	 	—  	 	 	 	62,384	 	 	 	62,384	 	 	 	3.7	% 	
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest	 	Investment Fund	 	 	0.001%	 	 	 	3/1/2021	 	 	 	35,001	 	 	 	37,273	 	 	 	—  	 	 	 	—  	 	 	 	35,001	 	 	 	37,273	 	 	 	2.2	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investment Fund Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	99,657	 	 	 	 	 	 	 	—  	 	 	 	 	 	 	 	99,657	 	 	 	5.8	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments—controlled/affiliated	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	99,657	 	 	 	 	 	 	 	—  	 	 	 	 	 	 	 	99,657	 	 	 	5.8	% 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Investments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,422,759	 	 	 	 	 	 	 	286,181	 	 	 	 	 	 	 	1,708,940	 	 	 	100.0	% 	

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TCG BDC, Inc.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share information)
Basis of presentation
The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“US GAAP”). TCG BDC is an investment company for the purposes of accounting and financial reporting in accordance with Accounting Standards Update (“ASU”) 2013-08, Financial Services—Investment Companies  (“ASU 2013-08”):  Amendments to the Scope, Measurement and Disclosure Requirements.  All significant intercompany balances and transactions have been eliminated. US GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.
The historical consolidated financial statements as of December 31, 2016 and for the year ended December 31, 2016 have been adjusted in the pro forma consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the NFIC Acquisition, (2) factually supportable and (3) with respect to the pro forma consolidated statement of operations, expected to have a continuing impact on the combined results following the NFIC Acquisition.
The NFIC Acquisition was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As the acquirer for accounting purposes, we have estimated the fair value of NFIC’s assets acquired and liabilities assumed. The pro forma consolidated financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the date indicated. These pro forma consolidated financial statements also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The pro forma consolidated financial data does not reflect the realization of any expected cost savings or other synergies from the merger of NFIC with us as a result of the completion of the NFIC Acquisition.
Financing transactions
Assuming all NFIC stockholders elect 95% as their Cash Election Percentage and remaining 5% in our stock that (i) we assume all the assets and liabilities by operation of law as of the effective time under the Merger Agreement, except for deferred financing costs associated with NFIC’s outstanding debt, which will be written off in connection with the NFIC Acquisition, (ii) we intend to finance the NFIC Acquisition through the cash raised from a combination of capital calls under its subscription agreements with its stockholders (50%) and additional borrowing from the Facilities (50%), and (iii) $393, which represents 50% of the NFIC Acquisition expenses, will be allocated pro rata between us and NFIC based on their relative net assets as of the Valuation Time. We will use the proceeds from capital call and borrowings to extinguish NFIC’s existing debt of approximately $130 million.
 
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Preliminary purchase price allocation
We have used the fair market value of NFIC’s assets and liabilities as of December 31, 2016 to account for the NFIC Acquisition. The following table summarizes the assets and liabilities of NFIC as of the acquisition date (in thousands):

ASSETS	  	 	 	 	
Total investments, at fair value	  	$	286,181	 	
Cash and other assets	  	 	8,024	 	
 	  	 	 	 	
Total assets	  	 	294,205	 	
 	  	 	 	 	
LIABILITIES	  	 	 	 	
Secured borrowings	  	 	130,427	 	
Other liabilities	  	 	9,316	 	
 	  	 	 	 	
Total liabilities	  	 	139,743	 	
 	  	 	 	 	
NET ASSETS	  	$	154,462	 	
 	  	 	 	 	
This preliminary allocation amounts have been used to prepare pro forma adjustments in the pro forma balance sheet and income statement. The final purchase price allocation will be determined when we have completed the detailed valuations and necessary calculations in accordance with the Merger Agreement. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include (1) changes in fair values of investments, and (2) other changes to assets and liabilities.
Critical Accounting Policies
The preparation of pro forma consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting policies are summarized below. The critical accounting policies should be read in connection with the consolidated financial statements in this prospectus. See “Financial Statements—Index to Financial Statements.”
Investment transactions are recorded on the trade date.
Cash and cash equivalents consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value.
Interest from Investments and Realized Gain/Loss on Investments
Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any. At time of exit, the realized gain or loss on an investment is the difference between the amortized cost at time of exit and the cash received at exit using the specific identification method.
Dividend Income
Dividend income from the investment fund is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment fund and are expected to be collected.
 
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Non-Accrual Income
Loans are generally placed on non-accrual status when principal or interest payments are past due 30 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are paid current and, in management’s judgment, are likely to remain current. Management may not place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.
Interest expense and unused commitment fees on the secured borrowings are recorded on an accrual basis. Unused commitment fees are included in credit facility fees in the accompanying Consolidated Statements of Operations.
The functional currency of the Company is the U.S. Dollar and all transactions were in U.S. Dollars.
Use of Estimates
The preparation of pro forma consolidated financial statements in conformity with US GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying our accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.
Pro forma adjustments
The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The assumptions and adjustments have been reflected in the unaudited pro forma consolidated financial data as footnotes to respective statements.
 
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9,000,000 Shares

Common Stock

 
BofA Merrill Lynch
Morgan Stanley
J.P. Morgan
Citigroup
Keefe, Bruyette & Woods
               A Stifel Company
Wells Fargo Securities
HSBC
Mizuho Securities

 

 

Table of Contents
PART C
Other Information
Item 25. Financial Statements and Exhibits
(2) Exhibits

(a)(1)	 	Articles of Amendment and Restatement (1)	
 	 	
(a)(2)	 	Articles of Amendment (2)	
 	 	
(b)(1)	 	Amended and Restated Bylaws (3)	
 	 	
(b)(2)	 	First Amendment to the Amended and Restated Bylaws (4)	
 	 	
(c)	 	Not Applicable	
 	 	
(d)(1)	 	Form of Subscription Agreement for Private Offerings (5)	
 	 	
(d)(2)	 	Indenture, dated as of June 26, 2015, between Carlyle GMS Finance MM CLO 2015-1 LLC, as issuer, and State Street Bank and Trust Company, as trustee  (6)	
 	 	
(e)(1)	 	Dividend Reinvestment Plan*	
 	 	
(e)(2)	 	Dividend Reinvestment Plan (effective July 5, 2017)*	
 	 	
(f)	 	Not Applicable	
 	 	
(g)	 	Investment Advisory Agreement, dated as of April 3, 2013, between Carlyle GMS Finance, Inc. and Carlyle GMS Investment Management L.L.C., as adviser  (7)	
 	 	
(h)	 	Form of Underwriting Agreement*	
 	 	
(i)	 	Not Applicable	
 	 	
(j)	 	Custodian Agreement, dated March 21, 2012, between Carlyle GMS Finance, Inc. and State Street Bank and Trust Company, as custodian  (8)	
 	 	
(k)(1)	 	Administration Agreement, dated as of April 3, 2013 by and between Carlyle GMS Finance, Inc. and Carlyle GMS Finance Administration L.L.C., as administrator  (9)	
 	 	
(k)(2)	 	Form of Indemnification Agreement (10)	
 	 	
(k)(3)	 	Loan and Servicing Agreement, dated as of May 24, 2013, among Carlyle GMS Finance SPV LLC, as borrower, Carlyle GMS Finance, Inc., as servicer and transferor, each of the Conduit Lenders, Liquidity Banks, Lender Agent and Institutional Lenders party thereto, Citibank, N.A. as collateral and administrative agent, Wells Fargo Bank, National Association, as account bank, backup servicer and collateral administrator, and Citibank, N.A. and Suntrust Robinson Humphrey, Inc., as joint lead arrangers  (11)	
 	 	
(k)(4)	 	Senior Secured Revolving Credit Agreement, dated as of March 21, 2014, among Carlyle GMS Finance, Inc., as borrower, the Lenders party thereto, Suntrust Bank, as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent  (12)	
 	 	
(k)(5)	 	First Amendment to the Loan and Servicing Agreement, dated as of June 30, 2014, among Carlyle GMS Finance SPV LLC, as borrower, Carlyle GMS Finance, Inc., as servicer and transferor, each of the Conduit Lenders, Liquidity Banks, Lender Agent and Institutional Lenders party thereto, Citibank, N.A. as collateral and administrative agent, Wells Fargo Bank, National Association, as account bank, backup servicer and collateral administrator, and Citibank, N.A. and Suntrust Robinson Humphrey, Inc., as joint lead arrangers  (13)	
 	 	
(k)(6)	 	Omnibus Amendment No. 1, dated as of January 8, 2015, among Carlyle GMS Finance, Inc., as borrower, the Lenders party thereto, Suntrust Bank, as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent (14)	
 
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(k)(7)	 	Omnibus Amendment No. 2, dated as of May 25, 2016, among Carlyle GMS Finance, Inc., as borrower, the Lenders party thereto, Suntrust Bank, as existing administrative agent, and HSBC Bank USA, N.A., as successor administrative agent  (15)	
 	 	
(k)(8)	 	Second Amendment to the Loan and Servicing Agreement, dated as of June 19, 2015, among Carlyle GMS Finance SPV LLC, as borrower, Carlyle GMS Finance, Inc., as servicer and transferor, each of the Conduit Lenders, Liquidity Banks, Lender Agent and Institutional Lenders party thereto, Citibank, N.A. as collateral and administrative agent, Wells Fargo Bank, National Association, as account bank, backup servicer and collateral administrator, and Citibank, N.A. and Suntrust Robinson Humphrey, Inc., as joint lead arrangers  (16)	
 	 	
(k)(9)	 	Collateral Management Agreement, dated as of June 26, 2015, by and between Carlyle GMS Finance MM CLO 2015-1 LLC, as issuer, and Carlyle GMS Investment Management L.L.C., as collateral manager  (17)	
 	 	
(k)(10)	 	Contribution Agreement, dated as of June 26, 2015, by and between Carlyle GMS Finance, Inc., as the contributor, and Carlyle GMS Finance MM CLO 2015-1 LLC, as the contributee  (18)	
 	 	
(k)(11)	 	Third Amendment to the Loan and Servicing Agreement, dated as of June 9, 2016, among Carlyle GMS Finance SPV LLC, as borrower, Carlyle GMS Finance, Inc., as servicer and transferor, each of the Conduit Lenders, Liquidity Banks, Lender Agent and Institutional Lenders party thereto, Citibank, N.A. as collateral and administrative agent, Wells Fargo Bank, National Association, as account bank, backup servicer and collateral administrator, and Citibank, N.A., as lead arranger  (19)	
 	 	
(k)(12)	 	Omnibus Amendment No. 3, dated as of March 22, 2017, among TCG BDC, Inc., as borrower, the Lenders party thereto and HSBC Bank USA, N.A, as administrative agent and collateral agent  (20)	
 	 	
(k)(13)	 	Fourth Amendment to the Loan and Servicing Agreement, dated as of May 26, 2017, among TCG BDC SPV LLC, as borrower, TCG BDC, Inc., as servicer and transferor, each of the Conduit Lenders, Liquidity Banks, Lender Agents and Institutional Lenders party thereto, Citibank, N.A. as collateral and administrative agent, Wells Fargo Bank, National Association, as account bank, backup servicer and collateral administrator, and Citibank, N.A., as lead arranger*	
 	 	
(k)(14)	 	Second Amended and Restated Limited Liability Company Agreement, dated as of June 24, 2016, between Carlyle GMS Finance, Inc. and Credit Partners USA LLC, as members  (21)	
 	 	
(k)(15)	 	Agreement and Plan of Merger, dated as of May 3, 2017, between TCG BDC, Inc. and NF Investment Corp.(22)	
 	 	
(l)	 	Opinion and Consent of Venable LLP, Maryland counsel for TCG BDC, Inc. **	
 	 	
(m)	 	Not Applicable	
 	 	
(n)(1)	 	Consent of Independent Registered Public Accounting Firm for TCG BDC, Inc.*	
 	 	
(n)(2)	 	Report of Independent Registered Public Accounting Firm for TCG BDC, Inc., regarding “senior securities” table contained herein  (23)	
 	 	
(o)	 	Not Applicable	
 	 	
(p)	 	Not Applicable	
 	 	
(q)	 	Not Applicable	
 	 	
(r)(1)	 	Code of Ethics for TCG BDC, Inc.**	
 	 	
(r)(2)	 	Code of Ethics for Carlyle GMS Investment Management L.L.C.**	
 
*	Filed herewith.	
**	To be filed by amendment.	
 
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(1)	Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)	
(2)	Incorporated by reference to Exhibit 3.2 to the Company’s Form 10-K filed by the Company on March 22, 2017 (File No. 000-54899)	
(3)	Incorporated by reference to Exhibit 3.2 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)	
(4)	Incorporated by reference to Exhibit 3.4 to the Company’s Form 10-K filed by the Company on March 22, 2017 (File No. 000-54899)	
(5)	Incorporated by reference to Exhibit 4.1 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)	
(6)	Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)	
(7)	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)	
(8)	Incorporated by reference to Exhibit (j) to the Company’s Registration Statement on Form N-2 filed by the Company on May 19, 2017 (File No. 333-218114)	
(9)	Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)	
(10)	Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-12G/A filed by the Company on April 11, 2013 (File No. 000-54899)	
(11)	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on July 31, 2013 (File No. 814-00995)	
(12)	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on May 9, 2014 (File No. 814-00995)	
(13)	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on August 13, 2014 (File No. 814-00995)	
(14)	Incorporated by reference to Exhibit 10.7 to the Company’s Form 10-K filed by the Company on March 27, 2015 (File No. 814-00995)	
(15)	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on August 8, 2016 (File No. 814-00995)	
(16)	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)	
(17)	Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)	
(18)	Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed by the Company on August 12, 2015 (File No. 814-00995)	
(19)	Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed by the Company on August 8, 2016 (File No. 814-00995)	
(20)	Incorporated by reference to Exhibit 10.1 to the Company’s form 10-Q filed by the Company on May 10, 2017 (File No. 814-00995)	
(21)	Incorporated by reference to Exhibit 10.1 to the Company’s form 10-Q filed by the Company on November 10, 2016 (File No. 814-00995)	
(22)	Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed by the Company on May 9, 2017 (File No. 814-00995)	
(23)	Incorporated by reference to Exhibit (n)(2) to the Company’s registration statement on Form N-2 filed by the Company on May 19, 2017 (File No. 333-218114)	
Item 26. Marketing Arrangements
The information contained under the heading “Underwriting” on this Registration Statement is incorporated herein by reference.
 
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Item 27. Other Expenses of Issuance and Distribution

Commission registration fee	  	$	22,392	 	
NASDAQ listing fee	  	$	200,000	 	
FINRA filing fee	  	$	30,774	 	
Accounting fees and expenses	  	$	250,000	 	
Legal fees and expenses	  	$	2,650,000	 	
Printing	  	$	300,000	 	
Miscellaneous fees and expenses	  	$	146,834	 	
 	  	 	 	 	
Total	  	$	3,600,000	 	
Item 28. Persons Controlled by or Under Common Control with Registrant
Direct Subsidiaries
The following list sets forth each of our subsidiaries, the state or country under whose laws the subsidiary is organized, and the percentage of voting securities or membership interests owned by us in such subsidiary:

Carlyle GMS Finance MM CLO 2015-1 LLC (Delaware)	  	 	100	% 	
TCG BDC Finance SPV LLC (Delaware)	  	 	100	% 	
Each of our direct subsidiaries listed above is consolidated for financial reporting purposes.
In addition, we may be deemed to control certain portfolio companies. See “Portfolio Companies” in the Prospectus.
Item 29. Number of Holders of Securities
The following table sets forth the approximate number of record holders of the Registrant’s common stock and each class of the Registrant’s senior securities (including bank loans) as of May 3, 2017.

Title of Class	  	Number of Record
Holders	 	
Common shares, par value $0.001 per share	  	 	1,681	 	
Item 30. Indemnification
Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final adjudication as being material to the cause of action. Our charter contains such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law, subject to the requirements of the Investment Company Act.
Our charter authorizes us, to the maximum extent permitted by Maryland law and subject to the requirements of the Investment Company Act, to obligate us to indemnify any present or former director or officer or any individual who, while a director or officer and at our request, serves or has served another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her status as a present or former director or officer and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our bylaws obligate us, to the maximum extent permitted by Maryland law and the Investment Company Act, to indemnify any present or former director or officer or any individual who, while a director or officer and at our request, serves or has
 
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served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee and who is made or threatened to be made a party to a proceeding by reason of his or her service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in that capacity and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. The charter and bylaws also permit us to, with the approval of the board of directors or a duly authorized committee thereof, indemnify and advance expenses to any person who served a predecessor of us in any of the capacities described above and any of our employees or agents or any employees or agents of our predecessor. In accordance with the Investment Company Act, we will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. In addition to the indemnification provided for in our bylaws, we have entered into indemnification agreements with each of our current directors and certain of our officers and with members of our investment adviser’s investment committee and we intend to enter into indemnification agreements with each of our future directors, members of our investment adviser’s investment committee and certain of our officers. The indemnification agreements provide these directors and senior officers the maximum indemnification permitted under Maryland law and the Investment Company Act. The agreements provide, among other things, for the advancement of expenses and indemnification for liabilities which such person may incur by reason of his or her status as a present or former director or officer or member of our investment adviser’s investment committee in any action or proceeding arising out of the performance of such person’s services as a present or former director or officer or member of our investment adviser’s investment committee.
Maryland law requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made or are threatened to be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received unless, in either case a court order indemnification, and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.
The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, our Investment Adviser and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of our investment Adviser’s services under the Investment Advisory Agreement or otherwise as an Adviser of the Company.
The Administration Agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, the Administrator and its officers, manager, partners, agents, employees, controlling persons, members and any other person or
 
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entity affiliated with it are entitled to indemnification from the Company for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of services under the Administration Agreement or otherwise as Administrator for the Company.
Insofar as indemnification for liability arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Item 31. Business and Other Connections of Our Investment Adviser
A description of any other business, profession, vocation or employment of a substantial nature in which our investment adviser, and each managing director, director or executive officer of our investment adviser, is or has been during the past two fiscal years, engaged in for his or her own account or in the capacity of director, officer, employee, partner or trustee, is set forth in Part A of this Registration Statement in the section entitled “Management.” Additional information regarding our investment adviser and its officers and directors is set forth in its Form ADV, as filed with the Securities and Exchange Commission (SEC File No. 801-77691), and is incorporated herein by reference.
Item 32. Locations of Accounts and Records
All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, and the rules thereunder are maintained at the offices of:
 
 	(1)	the Registrant, TCG BDC, Inc., 520 Madison Avenue 40th Floor, New York, NY 10022;	
 
 	(2)	the Transfer Agent, State Street Bank and Trust Company, One Heritage Drive, Floor 1, North Quincy, MA 02171;	
 
 	(3)	the Custodian, State Street Bank and Trust Company, One Heritage Drive, Floor 1, North Quincy, MA 02171; and	
 
 	(4)	the Investment Adviser, Carlyle GMS Investment Management L.L.C., 520 Madison Avenue 40th Floor, New York, NY 10022.	
Item 33. Management Services
Not applicable.
Item 34. Undertakings
 
 	1.	The Registrant undertakes to suspend the offering of shares until the Prospectus is amended if (1) subsequent to the effective date of its registration statement, the net asset value declines more than ten percent from its net asset value as of the effective date of the registration statement; or (2) the net asset value increases to an amount greater than the net proceeds as stated in the Prospectus.	
 
 	2.	Not applicable.	
 
 	3.	Not applicable.	
 
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Table of Contents
 	4.	Not applicable.	
 
 	5.	The Registrant undertakes that:	
 
 	(a)	For the purpose of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective; and	
 
 	(b)	For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.	
 
 	6.	Not applicable.	
 
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Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, and the State of New York on the 5 th  day of June 2017.

TCG BDC, INC.	
 	 	
By:	 	/s/ Michael A. Hart	
Name:	 	Michael A. Hart	
Title:	 	Chief Executive Officer	
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. This document may be executed by the signatories hereto on any number of counterparts, all of which constitute one and the same instrument.

 	 	 	 	TCG BDC, INC.	
 	 	 	 	
Dated: June 5, 2017	 	 	 	By	 	/s/ Michael A. Hart	
 	 	 	 	 	 	Michael A. Hart	
 	 	 	 	 	 	Chairman, Director and Chief Executive Officer (principal executive officer)	
 	 	 	 	
Dated: June 5, 2017	 	 	 	By	 	/s/ Venugopal Rathi	
 	 	 	 	 	 	Venugopal Rathi	
 	 	 	 	 	 	Chief Financial Officer
(principal financial and accounting officer)	
 	 	 	 	
Dated: June 5, 2017	 	 	 	By	 	*	
 	 	 	 	 	 	Nigel D. T. Andrews	
 	 	 	 	 	 	Director	
 	 	 	 	
Dated: June 5, 2017	 	 	 	By	 	*	
 	 	 	 	 	 	William P. Hendry	
 	 	 	 	 	 	Director	
 	 	 	 	
Dated: June 5, 2017	 	 	 	By	 	*	
 	 	 	 	 	 	Eliot P.S. Merrill	
 	 	 	 	 	 	Director	
 	 	 	 	
Dated: June 5, 2017	 	 	 	By	 	*	
 	 	 	 	 	 	John G. Nestor	
 	 	 	 	 	 	Director	

 	 	*By:	 	/s/ Orit Mizrachi	 	 	
 	 	 	 	Orit Mizrachi	 	 	
 	 	 	 	Attorney-in-fact	 	 	

Exhibit (e)(1)
DIVIDEND REINVESTMENT PLAN OF
CARLYLE GMS FINANCE, INC.
Carlyle GMS Finance, Inc., a Maryland corporation (the “Company”), hereby adopts the following plan (the “ Plan ”) with respect to net investment income dividends and capital gains distributions paid in cash and declared by its Board of Directors (the “ Board ”) on shares of its common stock, par value $0.01 per share (the “ Common Stock ”):
 
 	1.	Unless a stockholder of the Company specifically elects to have his or its net investment income dividends and capital gains distributions reinvested by the Company in newly issued shares of Common Stock as set forth below, all net investment income dividends and all capital gains distributions hereafter declared by the Board to be payable in cash shall be paid in cash and no action shall be required on such stockholder’s part to receive a dividend or distribution in cash. A stockholder of the Company that elects to receive Common Stock as set forth below is referred to herein as a “ Participant ”.	
 
 	2.	Such net investment income dividends and capital gains distributions shall be payable on such date or dates as may be fixed from time to time by the Board to stockholders of record at the close of business on the record date(s) established by the Board for the net investment income dividend and/or capital gains distribution involved.	
 
 	3.	Prior to the completion of an initial public offering of Common Stock (an “IPO”) that results in an unaffiliated public float of at least 15% of the aggregate capital commitments received prior to the date of such initial public offering (a “ Qualified IPO ”), the Company is offering Common Stock pursuant to a private placement memorandum (i) in the United States under the exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the “ 1933 Act ”) and Rule 506 of Regulation D promulgated thereunder and other exemptions of similar import in the laws of the states and jurisdictions where the offering will be made, and (ii) outside of the United States in accordance with Regulation S of the 1933 Act.	
 
 	4.	Prior to the completion of a Qualified IPO, the Company will reinvest dividends and distributions payable to Participants in newly issued shares of Common Stock to implement the Plan issued at the net asset value (“ Net Asset Value ”) per share most recently determined by the Board by dividing the total dollar amount of the dividend or distribution payable to such Participant by NAV and crediting such number of shares to the Participant, as described below.	
 
 	5.	After a Qualified IPO, the Company intends to use primarily newly issued shares of Common Stock to implement the Plan if as of the Valuation Date the Market Price (as defined below) is at NAV per share or a premium to NAV per share and in the event that the Market Price as of the close of business on the payment date for such dividend or distribution (such date, the “ Valuation Date ”) is below NAV per share, the Plan Administrator (as defined below) shall implement the Plan through the purchase of Common Stock on behalf of Participants in the open market, unless the Company instructs the Plan Administrator otherwise. “ Market Price ” as of any day shall mean the closing price per share of the Common Stock on the primary exchange on which the Common Stock is traded or, if no sale is reported for that day on such exchange, at the average of the electronically reported bid and asked prices for that day.	
 
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 	6.	After a Qualified IPO, if the Company is issuing newly issued Common Stock to implement the Plan, the number of shares to be issued and credited to a Participant shall be determined by dividing the total dollar amount of the dividend or distribution payable to such Participant by the Market Price on the Valuation Date.	
 
 	7.	After a Qualified IPO, if the Plan Administrator is buying shares of Common Stock in the open market to implement the Plan, such shares shall be allocated and credited to a Participant by dividing the total dollar amount of the dividend or distribution payable to such Participant by the average purchase price per share of all shares of Common Stock purchased with respect to the applicable dividend or distribution.	
 
 	8.	A stockholder may elect to have his or its net investment income dividends and capital gains distributions reinvested by the Company in newly issued shares of Common Stock. To exercise this option, such stockholder shall notify State Street Bank and Trust Company, the plan administrator and the Company’s transfer agent and registrar (referred to as the “ Plan Administrator ”), in writing at State Street Bank and Trust Company 200 Clarendon Street, 16th Floor, Mailstop 1651 Boston MA 02116 Attn: Multi Client Operations so that such notice is received by the Plan Administrator no later than 10 days prior to the record date fixed by the Board for the net investment income dividend and/or capital gains distribution involved. Such election shall remain in effect until the stockholder shall notify the Plan Administrator in writing of such stockholder’s withdrawal of the election, which notice shall be delivered to the Plan Administrator no later than 10 days prior to the record date fixed by the Board for the next net investment income dividend and/or capital gains distribution by the Company.	
 
 	9.	The Plan Administrator will maintain an account for shares acquired pursuant to the Plan for each Participant. The Plan Administrator may hold each Participant’s shares, together with the shares of other Participants, in non-certificated form in the Plan Administrator’s name or that of its nominee.	
 
 	10.	The Plan Administrator will confirm to each Participant each acquisition made pursuant to the Plan as soon as practicable but not later than 10 business days after the date thereof. Each Participant may from time to time have an undivided fractional interest (computed to three decimal places) in a share of Common Stock of the Company and dividends and distributions on fractional shares will be credited to each Participant’s account. In the event of termination of a Participant’s account under the Plan, the Plan Administrator will adjust for any such undivided fractional-interest in cash at the NAV per share (prior to a Qualified IPO) or the Market Price (after a Qualified IPO) at the time of termination.	
 
 	11.	The Plan Administrator will forward to each Participant any Company related proxy solicitation materials and each Company report or other communication to stockholders, and will vote any shares held by it under the Plan in accordance with the instructions set forth on proxies returned by Participants to the Company.	
 
 	12.	In the event that the Company makes available to its stockholders rights to purchase additional shares or other securities, the shares held by the Plan Administrator for each Participant under the Plan will be added to any other shares held by the Participant in calculating the number of rights to be issued to the Participant.	
 
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 	13.	The Plan Administrator’s service fee, if any, and expenses for administering the Plan will be paid for by the Company.	
 
 	14.	The Plan may be terminated by the Company upon notice in writing mailed to each Participant at least 30 days prior to any record date for the payment of any dividend or distribution by the Company. Upon any termination described in the paragraph, shares will be held by the Plan Administrator in non-certificated form in the name of the Participant.	
 
 	15.	After a Qualified IPO, if a Participant elects to sell part or all of his or its shares and to have the proceeds remitted to the Participant, such request must be first submitted to the participant’s broker, who will coordinate with the Plan Administrator.	
 
 	16.	These terms and conditions may be amended or supplemented by the Company at any time but, except when necessary or appropriate to comply with applicable law or the rules or policies of the Securities and Exchange Commission or any other regulatory authority, only by mailing to each Participant appropriate written notice at least 30 days prior to the effective date thereof. The amendment or supplement shall be deemed to be accepted by each Participant unless, prior to the effective date thereof, the Plan Administrator receives written notice of the termination of his or its account under the Plan. Any such amendment may include an appointment by the Plan Administrator in its place and stead of a successor agent under these terms and conditions, with full power and authority to perform all or any of the acts to be performed by the Plan Administrator under these terms and conditions. Upon any such appointment of any agent for the purpose of receiving dividends and distributions, the Company will be authorized to pay to such successor agent, for each Participant’s account, all dividends and distributions payable on shares of the Company held in the Participant’s name or under the Plan for retention or application by such successor agent as provided in these terms and conditions.	
 
 	17.	The Plan Administrator will at all times act in good faith and use its best efforts within reasonable limits to ensure its full and timely performance of all services to be performed by it under this Plan and to comply with applicable law, but assumes no responsibility and shall not be liable for loss or damage due to errors unless such error is caused by the Plan Administrator’s negligence, bad faith, or willful misconduct or that of its employees or agents.	
 
 	18.	The automatic reinvestment of dividends and distributions does not relieve Participants of any taxes which may be payable on dividends and distributions. Participants will receive tax information annually for their personal records and to help them prepare their federal income tax return. For further information as to tax consequences of participation in the Plan, Participants should consult with their own tax advisors.	
 
 	19.	These terms and conditions shall be governed by the laws of the State of New York, without regard to the conflicts of law principles thereof, to the extent such principles would require or permit the application of the laws of another jurisdiction.	
 
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Exhibit (e)(2)
DIVIDEND REINVESTMENT PLAN OF
TCG BDC, INC.
TCG BDC, Inc., a Maryland corporation (the “Company”), hereby adopts the following dividend reinvestment plan (the “ Plan ”) with respect to net investment income dividends and capital gains distributions paid in cash and declared by its Board of Directors (the “ Board ”) on shares of its common stock, par value $0.01 per share (the “ Common Stock ”) effective as of July 5, 2017:
 
 	1.	Unless a stockholder of the Company specifically elects to “opt out” of the Plan and to have his, her or its net investment income dividends and capital gains distributions paid in cash, all net investment income dividends and all capital gains distributions hereafter declared by the Board to be payable in cash shall be reinvested by the Company in newly issued shares of Common Stock as set forth below. No action shall be required on a stockholder’s part to have his, her or its net investment income dividends and capital gains distributions reinvested by the Company in newly issued shares of Common Stock. A stockholder of the Company that receives Common Stock as set forth below is referred to herein as a “ Participant .”	
 
 	2.	Such net investment income dividends and capital gains distributions shall be payable on such date or dates as may be fixed from time to time by the Board to stockholders of record at the close of business on the record date(s) established by the Board for the net investment income dividend and/or capital gains distribution involved.	
 
 	3.	The Company intends to use primarily newly issued shares of Common Stock to implement the Plan if as of the Valuation Date the Market Price (as defined below) is at net asset value (“ NAV ”) per share or a premium to NAV per share and in the event that the Market Price as of the close of business on the payment date for such dividend or distribution (such date, the “ Valuation Date ”) is below NAV per share, the Plan Administrator (as defined below) shall implement the Plan through the purchase of Common Stock on behalf of Participants in the open market, unless the Company instructs the Plan Administrator otherwise. “ Market Price ” as of any day shall mean the closing price per share of the Common Stock on the primary exchange on which the Common Stock is traded or, if no sale is reported for that day on such exchange, at the average of the electronically reported bid and asked prices for that day.	
 
 	4.	If the Company is issuing newly issued Common Stock to implement the Plan, the number of shares to be issued and credited to a Participant shall be determined by dividing the total dollar amount of the dividend or distribution payable to such Participant by the Market Price on the Valuation Date.	
 
 	5.	If the Plan Administrator is buying shares of Common Stock in the open market to implement the Plan, such shares shall be allocated and credited to a Participant by dividing the total dollar amount of the dividend or distribution payable to such Participant by the average purchase price per share of all shares of Common Stock purchased with respect to the applicable dividend or distribution.	
 
 	6.	A stockholder may elect to opt out of the Plan and to have his, her or its net investment income dividends and capital gains distributions paid in cash. To exercise this option, such stockholder shall notify State Street Bank and Trust Company, the plan administrator and the Company’s transfer agent and registrar (referred to as the “ Plan Administrator ”), in writing at State Street Bank and Trust Company, One Heritage Drive, Floor 1, North Quincy, MA 02171 Attn: Multi	

 	Client Operations, so that such notice is received by the Plan Administrator no later than 10 days prior to the record date fixed by the Board for the net investment income dividend and/or capital gains distribution involved. Such election shall remain in effect until the stockholder shall notify the Plan Administrator in writing of such stockholder’s withdrawal of the election, which notice shall be delivered to the Plan Administrator no later than 10 days prior to the record date fixed by the Board for the next net investment income dividend and/or capital gains distribution by the Company.	
 
 	7.	The Plan Administrator will maintain an account for shares acquired pursuant to the Plan for each Participant. The Plan Administrator may hold each Participant’s shares, together with the shares of other Participants, in non-certificated form in the Plan Administrator’s name or that of its nominee.	
 
 	8.	The Plan Administrator will confirm to each Participant each acquisition made pursuant to the Plan as soon as practicable but not later than 10 business days after the date thereof. Each Participant may from time to time have an undivided fractional interest (computed to three decimal places) in a share of Common Stock of the Company and dividends and distributions on fractional shares will be credited to each Participant’s account. In the event of termination of a Participant’s account under the Plan, the Plan Administrator will adjust for any such undivided fractional-interest in cash at the Market Price at the time of termination.	
 
 	9.	The Plan Administrator will forward to each Participant any Company related proxy solicitation materials and each Company report or other communication to stockholders, and will vote any shares held by it under the Plan in accordance with the instructions set forth on proxies returned by Participants to the Company.	
 
 	10.	In the event that the Company makes available to its stockholders rights to purchase additional shares or other securities, the shares held by the Plan Administrator for each Participant under the Plan will be added to any other shares held by the Participant in calculating the number of rights to be issued to the Participant.	
 
 	11.	The Plan Administrator’s service fee, if any, and expenses for administering the Plan will be paid for by the Company.	
 
 	12.	The Plan may be terminated by the Company upon notice in writing mailed to each Participant at least 30 days prior to any record date for the payment of any dividend or distribution by the Company. Upon any termination described in the paragraph, shares will be held by the Plan Administrator in non-certificated form in the name of the Participant.	
 
 	13.	If a Participant elects to sell part or all of his or its shares and to have the proceeds remitted to the Participant, such request must be first submitted to the participant’s broker, who will coordinate with the Plan Administrator.	
 
 	14.	These terms and conditions may be amended or supplemented by the Company at any time but, except when necessary or appropriate to comply with applicable law or the rules or policies of the Securities and Exchange Commission or any other regulatory authority, only by mailing to each Participant appropriate written notice at least 30 days prior to the effective date thereof. The amendment or supplement shall be deemed to be accepted by each Participant unless, prior to the effective date thereof, the Plan Administrator receives written notice of the termination of his or its account under the Plan. Any such amendment may include an appointment by the Plan Administrator in its place and stead of a successor agent under these terms and conditions, with	

 	full power and authority to perform all or any of the acts to be performed by the Plan Administrator under these terms and conditions. Upon any such appointment of any agent for the purpose of receiving dividends and distributions, the Company will be authorized to pay to such successor agent, for each Participant’s account, all dividends and distributions payable on shares of the Company held in the Participant’s name or under the Plan for retention or application by such successor agent as provided in these terms and conditions.	
 
 	15.	The Plan Administrator will at all times act in good faith and use its best efforts within reasonable limits to ensure its full and timely performance of all services to be performed by it under this Plan and to comply with applicable law, but assumes no responsibility and shall not be liable for loss or damage due to errors unless such error is caused by the Plan Administrator’s negligence, bad faith, or willful misconduct or that of its employees or agents.	
 
 	16.	The automatic reinvestment of dividends and distributions does not relieve Participants of any taxes which may be payable on dividends and distributions. Participants will receive tax information annually for their personal records and to help them prepare their federal income tax return. For further information as to tax consequences of participation in the Plan, Participants should consult with their own tax advisors.	
 
 	17.	These terms and conditions shall be governed by the laws of the State of New York, without regard to the conflicts of law principles thereof, to the extent such principles would require or permit the application of the laws of another jurisdiction.	

Exhibit (h)

 
 
TCG BDC, INC.
(a Maryland corporation)
[—] Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: [—], 2017

 

TCG BDC, INC.
(a Maryland corporation)
[—] Shares of Common Stock
UNDERWRITING AGREEMENT
[—], 2017
Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
Citigroup Global Markets Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
                            Incorporated
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
TCG BDC, Inc., a Maryland corporation (the “Company”), confirms its agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Morgan Stanley & Co. LLC (“Morgan Stanley”), J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are acting as Representatives (in such capacity, the “Representatives”), with respect to (i) the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of shares of Common Stock, par value $0.01 per share, of the Company (“Common Stock”) set forth in Schedule A hereto and (ii) the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of [—] additional shares of Common Stock. The aforesaid [—] shares of Common Stock (the “Initial Securities”) to be purchased by the Underwriters and all or any part of the [—] shares of Common Stock subject to the option described in Section 2(b) hereof (the “Option Securities”) are herein called, collectively, the “Securities.”
The Company understands that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Underwriting Agreement (this “Agreement”) has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form N-2 (No. 333-218114), including the related preliminary prospectus or prospectuses, covering the registration of the sale of the Securities under the Securities Act of 1933, as amended (the “1933 Act”). Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”) and paragraph (h) of Rule 497 (“Rule 497(h)”) of the 1933 Act Regulations. The information included in such prospectus that
 
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was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to Rule 430A(b) is herein called the “Rule 430A Information.” Such registration statement, including the amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A Information, is herein called the “Registration Statement.” Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein called the “Rule 462(b) Registration Statement” and, after such filing, the term “Registration Statement” shall include the Rule 462(b) Registration Statement. Each prospectus used prior to the effectiveness of the Registration Statement in the form furnished to the Underwriters for use in connection with the offering of the Securities, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement is herein called a “preliminary prospectus.” The final prospectus, in the form first furnished to the Underwriters for use in connection with the offering of the Securities, is herein called the “Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system or any successor system (“EDGAR”).
A Form N-54A Notification of Election to be Subject to Sections 55 through 65 of the Investment Company Act of 1940 Filed Pursuant to Section 54(a) of the Investment Company Act (File No. 814-00995) (the “Notification of Election”) was filed with the Commission on May 2, 2013 under the Investment Company Act of 1940, as amended (the “1940 Act”), and the rules and regulations and any applicable guidance and/or interpretation of the Commission or its staff thereunder (the “1940 Act Regulations”).
The Company has entered into an Investment Advisory Agreement, effective as of April 3, 2013 (the “Investment Management Agreement”), with Carlyle GMS Investment Management L.L.C. (the “Adviser”), a Delaware limited liability company registered as an investment adviser, under the Investment Advisers Act of 1940, as amended, and the rules and regulations thereunder (collectively, the “Advisers Act”).
As used in this Agreement:
“Applicable Time” means [—] [A.M./P.M.], New York City time, on [—], 2017 or such other time as agreed by the Company and the Representatives.
“General Disclosure Package” means the preliminary prospectus, dated June 5, 2017, the information included on Schedule B hereto.
“Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the 1933 Act.
“Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the 1933 Act.
 
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and warrants to each Underwriter as of the date hereof, the Applicable Time, the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriter, as follows:
(i) Registration Statement and Prospectuses. The Company is eligible to use Form N-2. Each of the Registration Statement and any amendment thereto has become effective under the 1933 Act. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated. The Company has complied with each request (if any) from the Commission for additional information in connection with the Registration Statement.
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the 1940 Act and the 1940 Act Regulations. Each preliminary prospectus, the Prospectus and any amendment or supplement thereto, at the time each was filed with the Commission, complied in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the 1940 Act and the 1940 Act Regulations. Each preliminary prospectus delivered to the Underwriters for use in connection with this offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Accurate Disclosure. Neither the Registration Statement nor any amendment thereto, at its effective time, at the Closing Time or at any Date of Delivery, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein, not misleading. As of the Applicable Time, none of the General Disclosure Package, nor any individual preliminary prospectus, when considered together with the General Disclosure Package, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Prospectus nor any amendment or supplement thereto, as of their respective date(s), at the time of any filing with the Commission pursuant to Rule 497(h), at the Closing Time or at any Date of Delivery, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use therein. For purposes of this Agreement, the only information so furnished shall be the information in the fourth paragraph under the heading “Underwriting,” the information in the first paragraph under the heading “Underwriting–Commissions and Discounts,” the information in the third paragraph under the heading “Underwriting–Determination of the Initial Public Offering Price,” the information in the second paragraph and third paragraph under the heading “Underwriting–Price Stabilization, Short Positions and Penalty Bids,” the information under the heading “Underwriting–Electronic Distribution” and the information under the heading “Underwriting–Principal Business Address,” in each case contained in the Prospectus (collectively, the “Underwriter Information”).
 
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(iii) Testing-the-Waters Materials. The Company (A) has not engaged in any Testing-the-Waters Communication and (B) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any Written Testing-the-Waters Communications.
(iv) Company Not Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or another offering participant made a  bona fide  offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
(v) Emerging Growth Company Status. From the time of the initial filing of the Registration Statement with the Commission (or, if earlier, the first date on which the Company engaged directly or through any Person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the 1933 Act (an “Emerging Growth Company”).
(vi) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the Registration Statement, the General Disclosure Package and the Prospectus are independent public accountants as required by the 1933 Act, the 1933 Act Regulations, the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the Public Accounting Oversight Board.
(vii) Financial Statements. The financial statements included in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial position of the Company and the Subsidiaries (as defined below) at the dates indicated and the results of their operations and the changes in the cash flows for the periods specified; said financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement present fairly in all material respects in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Registration Statement, the General Disclosure Package and the Prospectus have been derived from the accounting records and other books and records of the Company and the Subsidiaries and present fairly in all material respects the information shown therein. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement, the General Disclosure Package or the Prospectus under the 1933 Act or the 1933 Act Regulations.
(viii) No Material Adverse Change in Business. Except as otherwise stated therein, since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and the Subsidiaries considered as
 
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one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company or any of the Subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and the Subsidiaries considered as one enterprise and (C) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.
(ix) Good Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Maryland and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement and the Investment Management Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not reasonably be expected to result in a Material Adverse Effect.
(x) Subsidiaries of the Company; Portfolio Companies. The Company’s only subsidiaries that are consolidated with the Company for financial reporting purposes under GAAP are those listed on Schedule C hereto (each a “Subsidiary” and, collectively, the “Subsidiaries”). Each of the Subsidiaries has been duly organized and is validly existing as a corporation, limited liability company or limited partnership in good standing under the laws of the jurisdiction of its organization, has power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation, limited liability company or limited partnership to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to be so qualified or in good standing would not reasonably be expected to result in a Material Adverse Effect; except as disclosed in the Registration Statement, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly issued and is fully paid and non-assessable; none of the outstanding shares of capital stock of any of the Subsidiaries was issued in violation of the preemptive or other similar rights of any securityholder of such Subsidiary. Except for any investments made in the ordinary course of business since the most recent quarter end, the Company does not own, directly or indirectly, any investments or shares of stock or any other equity or long-term debt securities of any corporation or other entity other than (A) the Subsidiaries, (B) Middle Market Credit Fund, LLC, an unconsolidated limited liability company in which the Company owns a 50% economic interest and co-manages with Credit Partners USA LLC, and its wholly owned and consolidated subsidiary and (C) those corporations or other entities described in the Registration Statement, the General Disclosure Package and the Prospectus under the caption “Portfolio Companies” (each a “Portfolio Company” and collectively the “Portfolio Companies”). Except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company does not control (as such term is defined in Section 2(a)(9) of the 1940 Act), any of the Portfolio Companies or any corporation or other entity in which it invested since the most recent quarter end.
 
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(xi) Capitalization. The authorized, issued and outstanding shares of capital stock of the Company are as set forth in the Registration Statement, the General Disclosure Package and the Prospectus in the column entitled “Actual” under the caption “Capitalization.” The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. None of the outstanding shares of capital stock of the Company were issued in violation of the preemptive or other similar rights of any securityholder of the Company.
(xii) Authorization of Agreements. This Agreement and the Investment Management Agreement have each been duly authorized, executed and delivered by the Company. This Agreement and the Investment Management Agreement are each valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or thereafter in effect relating to creditors’ rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought.
(xiii) Authorization and Description of Securities. The Securities to be purchased by the Underwriters from the Company have been duly authorized and, when issued and delivered by the Company pursuant to this Agreement against payment of the purchase price set forth herein, will be validly issued and fully paid and non-assessable; and the issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. The Common Stock conforms to all statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus and such description conforms to the rights set forth in the instruments defining the same.
(xiv) Registration Rights. Except as disclosed in the General Disclosure Package and the Prospectus, there are no persons with registration rights or other similar rights to have any securities of the Company registered for sale pursuant to the Registration Statement or otherwise registered for sale or sold by the Company under the 1933 Act pursuant to this Agreement.
(xv) Absence of Violations, Defaults and Conflicts. Neither the Company nor any of the Subsidiaries is (A) in violation of its charter, bylaws or similar organizational document, each as amended or supplemented as of the date of this Agreement, the Closing Time and any Date of Delivery, as applicable, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of the Subsidiaries is a party or by which it or any of them may be bound or to which any of the properties or assets of the Company or any of the Subsidiaries is subject (collectively, “Agreements and Instruments”), except for such defaults that would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect, or (C) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Company or any of the Subsidiaries or any of their respective properties, assets or operations (each, a “Governmental Entity”), except for such violations that would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect. The execution, delivery and performance of this Agreement and the Investment Management Agreement and the consummation of the transactions contemplated herein and therein and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance and sale of the
 
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Securities and the use of the proceeds from the sale of the Securities as described therein under the caption “Use of Proceeds”) and compliance by the Company with its obligations hereunder and thereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or any of the Subsidiaries pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect), nor will such action result in any violation of the provisions of (a) the charter, bylaws or similar organizational document of the Company or any of the Subsidiaries or (b) any law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity, except, in the case of (b) above, for any violation that would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect. As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of the Subsidiaries.
(xvi) Employees. As of the date hereof, neither the Company nor any of the Subsidiaries has, and as of the Closing Time neither the Company nor any of the Subsidiaries will have, any employees.
(xvii) Absence of Proceedings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there is no action, suit, proceeding or, to the knowledge of the Company, inquiry or investigation before or brought by any Governmental Entity now pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of the Subsidiaries, which would reasonably be expected to result in a Material Adverse Effect, or which would reasonably be expected to materially and adversely affect the properties or assets of the Company and the Subsidiaries taken as a whole, or the properties or assets of any of the Company’s “Significant Subsidiaries” (as defined in Rule 1-02(w) of Regulation S-X) and their respective subsidiaries taken as a whole, or the consummation of the transactions contemplated in this Agreement or the Investment Management Agreement or the performance by the Company of its obligations hereunder or thereunder; and the aggregate of all pending legal or governmental proceedings to which the Company or any of the Subsidiaries is a party or of which any of their respective properties or assets is the subject which are not described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect.
(xviii) Accuracy of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement which have not been so described and filed as required.
(xix) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities
 
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hereunder or the consummation of the transactions contemplated by this Agreement or the Investment Management Agreement, except (A) such as have been already obtained or as may be required under the 1933 Act, the 1933 Act Regulations, the 1940 Act, the 1940 Act Regulations, the rules of the Nasdaq Global Select Market, state securities laws or the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and (B) where the failure to obtain any such filing, authorization, approval, consent, license, order, registration, qualification or decree would not reasonably be expected, singly or in the aggregate, to have a Material Adverse Effect.
(xx) Possession of Licenses and Permits. The Company and the Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them, except where the failure so to possess would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect. The Company and the Subsidiaries are in compliance with the terms and conditions of all Governmental Licenses, except where the failure so to comply would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect. Neither the Company nor any of the Subsidiaries has received any notice of proceedings relating to the revocation or modification of any Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in a Material Adverse Effect.
(xxi) Title to Property. The Company and the Subsidiaries do not own any real property; and all of the leases and subleases material to the business of the Company and the Subsidiaries, considered as one enterprise, and under which the Company or any of the Subsidiaries holds properties, are in full force and effect, and neither the Company not any such Subsidiary has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease.
(xxii) Possession of Intellectual Property. Except as would not reasonably be expected, singly or in the aggregate, to have a Material Adverse Effect, the Company and the Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and neither the Company nor any of the Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of the Subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.
 
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(xxiii) Accounting Controls. The Company, on a consolidated basis, maintains a system of internal control over financial reporting (as defined under Rule 13a-15(f) and 15d-15(f) under the rules and regulations of the Commission under the 1934 Act (the “1934 Act Regulations”)) and a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to the Company’s consolidated assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting (it being understood that the Company is not as of the date hereof required to comply with the auditor attestation requirements under Section 404 of the Sarbanes Oxley Act of 2002).
(xxiv) Payment of Taxes. All United States federal income tax returns of the Company and the Subsidiaries required by law to have been filed by them (taking into account any applicable extensions) have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, in each case, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided or insofar as the failure to do so would not reasonably be expected, singly or in the aggregate, to result in a Material Adverse Effect. The United States federal income tax returns of the Company through the fiscal year ended December 31, 2015 have been filed and no assessment in connection therewith has been made against the Company. The Company and the Subsidiaries have filed all other tax returns that are required to have been filed by them (taking into account any applicable extensions) pursuant to applicable foreign, state, local or other law and has paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and the Subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been established by the Company or, in each case, insofar as the failure to pay such taxes or file such returns would not reasonably be expected to result in a Material Adverse Effect. The charges, accruals and reserves on the books of the Company in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any current assessments or re-assessments for additional income tax for any years not finally determined, except to the extent of any inadequacy that would not reasonably be expected to result in a Material Adverse Effect.
(xxv) Insurance. The Company and the Subsidiaries carry or are entitled to the benefits of insurance, with financially sound and reputable insurers, in such amounts and covering such risks as the Company reasonably believes is prudent, and all such insurance is in full force and effect. The Company has no reason to believe that it or any of the Subsidiaries will not be able (A) to renew its existing insurance coverage as and when such policies expire or (B) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not reasonably be expected to result in a Material Adverse Effect.
 
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(xxvi) Investment Company Act. The Company is not required, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be required, to register as a “management investment company” under the 1940 Act.
(xxvii) Stabilization and Manipulation. The Company has not taken, nor will take, directly or indirectly, without giving effect to any activities by the Underwriters, any action designed, or that would reasonably be expected, to cause or result in, or that constitutes, any stabilization or manipulation of the price of the Shares, other than activity permitted pursuant to Rule 10b-18 under the 1934 Act.
(xxviii) Foreign Corrupt Practices Act. None of the Company, any of the Subsidiaries, or, to the knowledge of the Company, any director, officer or employee of the Company or any of the Subsidiaries or any agent, controlled affiliate or other person acting on behalf of the Company or any of the Subsidiaries is aware of, has taken or will take any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and to the knowledge of the Company, the Company and its Subsidiaries have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(xxix) Money Laundering Laws. The operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of the jurisdictions in which the Company and the Subsidiaries conduct business, the rules and regulations thereunder and any other relevant laws, rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company or any of the Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(xxx) OFAC. None of the Company, any of the Subsidiaries, or, to the knowledge of the Company, any director, officer or employee of the Company or any of the Subsidiaries or any agent, controlled affiliate or other person acting on behalf of the Company or any of the Subsidiaries is an individual or entity (“Person”), or is controlled by a Person that is, (i) currently the subject or target of any sanctions administered or enforced by the United States Government, including the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council (“UNSC”), the European Union, Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), or (ii) located, organized or resident in a country or territory that is itself the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend,
 
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contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions (to the extent that such action would result in the violation by any person (including any person participating in the transaction, whether as underwriter, adviser, investor or otherwise) of Sanctions) or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. Since its inception, the Company and the Subsidiaries have not knowingly engaged in, and are not now knowingly engaged in, any unauthorized dealings or transactions with any Person that at the time of the dealing or transaction is or was the subject or target of Sanctions.
(xxxi) Lending Relationship. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any Underwriter and (ii) does not intend to use any of the proceeds from the sale of the Securities to repay any outstanding debt owed to any affiliate of any Underwriter.
(xxxii) Statistical and Market-Related Data. Any statistical and market-related data included in the Registration Statement, the General Disclosure Package or the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.
(xxxiii) Ratings. The Company does not have any debt securities or preferred stock that are rated by any “nationally recognized statistical rating agency” (as that term is defined by the Commission for purposes of Section 3(a)(62) under the 1934 Act).
(xxxiv) Related Party Transactions. There are no business relationships or related party transactions involving the Company, any of the Subsidiaries or any other person required to be described in the Registration Statement, the General Disclosure Package or the Prospectus which have not been described as required.
(xxxv) Notification of Election. When the Notification of Election was filed with the Commission, it (A) contained all statements required to be stated therein in accordance with, and complied in all material respects with the requirements of, the 1940 Act and (B) did not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(xxxvi) Investment Management Agreement. (A) The terms of the Investment Management Agreement, including compensation terms, comply in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Regulations and the Advisers Act and (B) the approvals by the board of directors and the stockholders of the Company of the Investment Management Agreement have been made in accordance with the requirements of Section 15(a) and (c) of the 1940 Act and the 1940 Act Regulations applicable to companies that have elected to be regulated as business development companies under the 1940 Act.
 
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(xxxvii) Interested Persons. Except as disclosed in the Registration Statement and the Prospectus (A) no person is serving or acting as an officer, director or investment adviser of the Company, except in accordance with the provisions of the 1940 Act and the Advisers Act, and (B) to the knowledge of the Company, no director of the Company is an “interested person” (as defined in the 1940 Act) of the Company or an “affiliated person” (as defined in the 1940 Act) of any of the Underwriters.
(xxxviii) Business Development Company. (A) The Company has duly elected to be treated by the Commission under the 1940 Act as a business development company, such election is effective and all required action has been taken by the Company under the 1933 Act and the 1940 Act to make the public offering and consummate the sale of the Securities as provided in this Agreement; (B) the provisions of the charter and bylaws of the Company, and the investment objectives, policies and restrictions described in the Prospectus, assuming they are implemented as described, will comply in all material respects with the requirements of the 1940 Act; and (C) the operations of the Company are in compliance in all material respects with the provisions of the 1940 Act and the 1940 Act Regulations applicable to business development companies.
(xxxix) No Extension of Credit. The Company has not, directly or indirectly, extended credit, agreed to extend credit, arranged to extend credit or renewed any extension of credit, in the form of a personal loan, to or for any director or executive officer of the Company or any of the Subsidiaries, or to or for any family member or affiliate of any director or executive officer of the Company or any of the Subsidiaries.
(xl) Regulated Investment Company. The Company has elected to be treated, and has operated, and intends to continue to operate, its business in such a manner as to enable the Company to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company intends to direct the investment of the proceeds of the offering of the Securities in a manner as to comply with the requirements of Subchapter M of the Code.
(xli) Shareholders Locked Up. All existing shareholders of the Company, with the exception of those subject to the lock-up agreement described in Section 5(i) hereto, for a period of 180 days after the date of the Prospectus may not, without the consent of the Company, directly or indirectly, transfer any shares of the Company’s Common Stock owned on the date of this Agreement. The Company will not grant its consent to any such transfer without the consent of at least three of the Representatives.
(b) Representations and Warranties by the Adviser. The Adviser represents to each Underwriter as of the date hereof, the Applicable Time, the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriter, as follows:
(i) No Material Adverse Change in Business. Except as otherwise stated therein, since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, business prospects or regulatory status of the Adviser, whether or not arising in the ordinary course of business, or on the ability of the Adviser to carry out its obligations under this Agreement or the Investment Management Agreement (collectively, an “Adviser Material Adverse Effect”).
 
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(ii) Good Standing. The Adviser has been duly organized and is validly existing as a limited liability company, in good standing under the laws of its state of organization and has limited liability company power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement; the Adviser has limited liability company power and authority to enter into and perform its obligations under the Investment Management Agreement; and the Adviser is duly qualified as a foreign entity to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not otherwise reasonably be expected to result in an Adviser Material Adverse Effect.
(iii) Registration Under Advisers Act. The Adviser is duly registered with the Commission as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act or the 1940 Act from acting under the Investment Management Agreement for the Company as contemplated by the Registration Statement, the General Disclosure Package and the Prospectus. There does not exist any proceeding or, to the Adviser’s knowledge, any facts or circumstances the existence of which could lead to any proceeding which might adversely affect the registration of the Adviser with the Commission.
(iv) Absence of Proceedings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there is no action, suit, proceeding or, to the knowledge of the Adviser, inquiry or investigation before or brought by any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Adviser or any of its properties, assets or operations now pending or, to the knowledge of the Adviser, threatened, against or affecting the Adviser, which is required to be disclosed in the Registration Statement (other than as disclosed therein) or which would reasonably be expected to result in an Adviser Material Adverse Effect, or which would reasonably be expected to materially and adversely affect its properties or assets or the consummation of the transactions contemplated in this Agreement or the Investment Management Agreement or the performance by the Adviser of its obligations hereunder or thereunder; and the aggregate of all pending legal or governmental proceedings to which the Adviser is a party or of which any of its properties or assets is the subject which are not described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to their business, would not reasonably be expected to result in an Adviser Material Adverse Effect.
(v) Absence of Violations, Defaults and Conflicts. The Adviser is not (A) in violation of its limited liability company agreement, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Adviser is a party or by which it may be bound or to which any of its properties or assets is subject (collectively, the “Adviser Agreements and Instruments”), except for such defaults that would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect, or (C) in violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Adviser or any of its properties,
 
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assets or operations, except for such violations that would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect. The execution, delivery and performance of this Agreement and the Investment Management Agreement and the consummation of the transactions contemplated herein and therein and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described therein under the caption “Use of Proceeds”) and compliance by the Adviser with its obligations hereunder and under the Investment Management Agreement do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Adviser or pursuant to, the Adviser Agreements and Instruments (except for such conflicts, breaches, defaults, events or conditions giving the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Adviser, or liens, charges or encumbrances that would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect), nor will such action result in any violation of the provisions of (a) the limited liability company agreement of the Adviser, or (b) any applicable law, statute, rule, regulation, judgment, order, writ or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Adviser or any of its properties, assets or operations except, in the case of (b) above, for any violation that would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect.
(vi) Authorization of Agreements. This Agreement and the Investment Management Agreement have each been duly authorized, executed and delivered by the Adviser. This Agreement and the Investment Management Agreement are valid and binding obligations of the Adviser, enforceable against it in accordance with their terms, except as the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or thereafter in effect relating to creditors’ rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding therefor may be brought.
(vii) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Adviser of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement or the Investment Management Agreement, except (A) such as have been already obtained or as may be required under the 1933 Act, the 1933 Act Regulations, the 1940 Act, the 1940 Act Regulations, the rules of the Nasdaq Global Select Market, state securities laws or the rules of FINRA and (B) where the failure to obtain any such filing, authorization, approval, consent, license, order, registration, qualification or decree would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect.
 
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(viii) Description of Adviser. The description of the Adviser contained in the Registration Statement, the General Disclosure Package and the Prospectus does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(ix) Possession of Licenses and Permits. The Adviser possesses such Governmental Licenses issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by it, except where the failure so to possess would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect. The Adviser is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect. The Adviser has not received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in an Adviser Material Adverse Effect.
(x) Stabilization and Manipulation. The Adviser has not taken, nor will take, directly or indirectly, without giving effect to any activities by the Underwriters, any action designed, or that would reasonably be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of the Shares, other than activity permitted pursuant to Rule 10b-18 under the 1934 Act.
(xi) Foreign Corrupt Practices Act. None of the Adviser or, to the knowledge of the Adviser, any director, officer or employee of the Adviser or any agent, controlled affiliate or other person acting on behalf of the Adviser is aware of, has taken or will take any action, directly or indirectly, that would result in a violation by such persons of the FCPA, in connection with the business of the Company, including making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and to the knowledge of the Adviser, the Adviser has conducted its business, in relation to the Company, in compliance with the FCPA and has instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(xii) Money Laundering Laws. The operations of the Adviser are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Money Laundering Laws; and no action, suit or proceeding by or before any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction over the Adviser or any of its properties, assets or operations involving the Adviser with respect to the Money Laundering Laws is pending or, to the best knowledge of the Adviser, threatened.
 
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(xiii) OFAC. None of the Adviser or, to the knowledge of the Adviser, any director, officer or employee of the Adviser or any agent, controlled affiliate or other person acting on behalf of the Adviser is a Person, or is controlled by a Person that is, (i) currently the subject or target of Sanctions, or (ii) located, organized or resident in a country or territory that is itself the subject of Sanctions. During the last five years, the Adviser has not knowingly engaged in, and is not now knowingly engaged in, any unauthorized dealings or transactions with any Person that at the time of the dealing or transaction is or was the subject or target of Sanctions.
(xiv) Key Employees. The Adviser is not aware that (i) any of the executive officers, key employees or significant group of employees that provide services to the Company pursuant to the Investment Management Agreement plans to terminate employment with the Adviser’s affiliate, The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”) or (ii) any such executive officer or key employee is subject to any noncompete, nondisclosure, confidentiality, employment, consulting or similar agreement that would be violated by either the Adviser’s present or proposed business activities, except, in each case, as would not reasonably be expected, singly or in the aggregate, to result in an Adviser Material Adverse Effect.
(xv) No Labor Disputes. No labor disturbance by or dispute with employees of Carlyle Employee Co. that provide services to the Company pursuant to the Investment Management Agreement exists or, to the knowledge of the Adviser, is contemplated or threatened, and the Adviser is not aware of any existing or imminent labor disturbance by, or dispute with, the employees, except in each case as would not reasonably be expected to result in an Adviser Material Adverse Effect.
(xvi) Accounting Controls. The Adviser maintains a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions effectuated by it under the Investment Management Agreement are executed in accordance with its management’s general or specific authorization; (B) access to the Company’s consolidated assets that are in its possession or control is permitted only in accordance with its management’s general or specific authorization; (C) transactions for which it has bookkeeping and record-keeping responsibility under the Investment Management Agreement are recorded as necessary to permit preparation of the Company’s financial statements in conformity with GAAP and to maintain financial statements in conformity with GAAP and to maintain accountability for the Company’s assets and (D) the recorded accountability for such assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(xvii) Financial Resources. The Adviser has the financial resources available to it necessary for the performance of its services and obligations as contemplated by the Registration Statement, the General Disclosure Package, the Prospectus and the Investment Management Agreement.
(c) Officer’s Certificates. Any certificate signed by any officer of the Company, any of the Subsidiaries or the Adviser delivered to the Representatives or to counsel for the Underwriters shall be deemed a representation and warranty by the Company or the Adviser, as applicable, to each Underwriter as to the matters covered thereby.
 
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SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule A, that number of Initial Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof, subject, in each case, to such adjustments among the Underwriters as Merrill Lynch in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
(b) Option Securities. In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the Underwriters, severally and not jointly, to purchase up to an additional [—] shares of Common Stock, as may be necessary to cover overallotments made in connection with the offering of the Initial Securities, at the price per share set forth in Schedule A, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. The option hereby granted may be exercised for 30 days after the date hereof and may be exercised in whole or in part at any time from time to time upon notice by the Representatives to the Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities. Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Representatives, and may be the same date as the Closing Time, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time (unless such time and date are postponed in accordance with Section 10 hereof). If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject, in each case, to such adjustments as Merrill Lynch in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of (i) the initial public offering price for the Initial Securities (less 50% of the underwriting discount for which the Company is responsible) by the Underwriters to the Company and (ii) 50% of the underwriting discount for the Initial Securities by the Adviser to the Underwriters (in each case in the amounts set forth in Schedule A), and delivery of the Initial Securities, shall be made at the offices of Freshfields Bruckhaus Deringer US LLP, 601 Lexington Avenue, 31 st  Floor, New York, New York 10022 or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. (New York City time) on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery being herein called “Closing Time”).
In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of (i) the initial public offering price for the Option Securities (less 50% of the underwriting discount for which the Company is responsible) by the Underwriters to the Company and (ii) 50% of the underwriting discount for the Option Securities by the Adviser to the Underwriters (in each case in the amounts set forth in Schedule A), and delivery of the Option Securities, shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Company, on each Date of Delivery as specified in the notice from Merrill Lynch to the Company.
Payment of the initial public offering price (less 50% of the underwriting discount for which the Company is responsible) shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against (a) delivery to the Representatives through the facilities of the Depository Trust Company for the respective accounts of the Underwriters of the
 
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Securities to be purchased by them and (b) payment of 50% of the underwriting discount by the Adviser to Merrill Lynch by wire transfer of immediately available funds to a bank account designated by Merrill Lynch. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, which it has agreed to purchase. Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder.
SECTION 3. Covenants of the Company. The Company covenants with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements of Rule 430A and Rule 497, and will notify the Representatives immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus, or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the 1933 Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities. The Company will effect all filings required under Rule 497(h) within the time period required by Rule 497, and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 497(h) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will use its commercially reasonable efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Continued Compliance with Securities Laws. The Company will use its commercially reasonable efforts to comply with the 1933 Act and the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration Statement, the General Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly (A) give the Representatives notice of such event, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount
 
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of time prior to any proposed filing or use, furnish the Representatives with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representatives or counsel for the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will give the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Time and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Commission Filings. The Company has furnished or, upon written request of the Representatives, will deliver to the Representatives and counsel for the Underwriters, without charge, conformed copies of (i) the Notification of Election and (ii) the Registration Statement, each as originally filed, and of each amendment thereto (including exhibits filed therewith) and conformed copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Notification of Election and the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Notification of Election and Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Blue Sky Qualifications. The Company will use its commercially reasonable efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representatives may designate and to maintain such qualifications in effect so long as reasonably required to complete the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
(f) Rule 158. The Company will make generally available to its securityholders as soon as practicable an earnings statement that satisfies the provisions of Section 11(a) of the 1933 Act and Rule 158 of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement; provided that the Company will be deemed to have complied with such request by filing such an earnings statement on EDGAR.
 
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(g) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Registration Statement, the General Disclosure Package and the Prospectus under “Use of Proceeds.”
(h) Listing. The Company will use its commercially reasonable efforts to effect and maintain the listing of the Common Stock (including the Securities) on the Nasdaq Global Select Market.
(i) Restriction on Sale of Securities. During a period of 180 days from the date of the Prospectus, the Company will not, without the prior written consent of at least three of the Representatives, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder or (B) any shares of Common Stock issued pursuant to any dividend reinvestment plan referred to in the Registration Statement, the General Disclosure Package and the Prospectus.
(j) Reporting Requirements. The Company, during the period when a Prospectus relating to the Securities is required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and 1934 Act Regulations.
(k) Business Development Company Status. The Company, during the period of at least two years from the effective date of the Company’s Registration Statement, will use its commercially reasonably efforts to maintain its status as a business development company; provided, however, the Company may cease to be, or withdraw its election as, a business development company, with the approval of the board of directors and a vote of stockholders as required by Section 58 of the 1940 Act or any successor provision.
(l) Regulated Investment Company Status. The Company will use its commercially reasonable efforts to maintain its qualification as a regulated investment company under Subchapter M of the Code for each full fiscal year during which it is a business development company under the 1940 Act.
(m) Annual Compliance Reviews. The Company will retain qualified accountants and qualified tax experts to (i) test procedures and conduct annual compliance reviews designed to determine compliance with the regulated investment company provisions of the Code and (ii) otherwise assist the Company in monitoring appropriate accounting systems and procedures designed to determine compliance with the regulated investment company provisions of the Code.
(n) Accounting Controls. The Company will use commercially reasonable efforts to establish and maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management’s authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to the Company’s consolidated assets is permitted only in accordance with management’s authorization; (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; (E) material information relating to the Company and the assets managed by the Adviser
 
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is promptly made known to the officers responsible for establishing and maintaining the system of internal accounting controls; and (F) any significant deficiencies or weaknesses in the design or operation of internal accounting controls that could adversely affect the Company’s ability to record, process, summarize and report financial data, and any fraud whether or not material that involves management or other employees who have a significant role in internal controls, are adequately and promptly disclosed to the Company’s independent auditors and the audit committee of the Company’s board of directors.
(o) Disclosure Controls. The Company will use commercially reasonable efforts to establish and employ disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate to allow timely decisions regarding disclosure.
(p) Emerging Growth Company Status. The Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Securities within the meaning of the 1933 Act and (ii) completion of the 180-day restricted period referred to in Section 3(i).
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of copies of each preliminary prospectus and the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company’s and the Adviser’s counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(e) hereof, (vi) the fees and expenses of any transfer agent or registrar for the Securities, (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, reasonable and documented expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, documented travel and lodging expenses of the representatives and officers of the Company and any such consultants, and 50% of the cost of aircraft and other transportation chartered in connection with the road show, (viii) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms of the sale of the Securities, (ix) the fees and expenses incurred in connection with the listing of the Securities on the Nasdaq Global Select Market and (x) the costs and expenses (including, without limitation, any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the third sentence of Section 1(a)(ii).
 
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(b) Termination of Agreement. If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5 or Section 9(a)(i) or (iii) hereof, the Company shall reimburse the Underwriters for all of their reasonable and documented out-of-pocket expenses, including the reasonable and documented fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company and the Adviser contained herein or in certificates of any officer of the Company, any of the Subsidiaries or the Adviser delivered pursuant to the provisions hereof, to the performance by the Company and the Adviser of their respective covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement; Rule 430A Information. The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and, at the Closing Time, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated; and the Company has complied with each request (if any) from the Commission for additional information in connection with the Registration Statement. A prospectus containing the Rule 430A Information shall have been filed with the Commission in accordance with Rule 497(h) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.
(b) Opinions of Counsel for Company. At the Closing Time, the Representatives shall have received the favorable opinions, dated the Closing Time, of Proskauer Rose LLP, counsel for the Company, Sullivan & Cromwell LLP, special regulatory counsel for the Company, and Venable LLP, special Maryland counsel for the Company, in each case, in form and substance reasonably satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letters for each of the other Underwriters to the effect set forth in Exhibit A-1, Exhibit A-2 and Exhibit A-3 hereto and to such further effect as counsel to the Underwriters may reasonably request. Such counsels may state that insofar as such opinions involve factual matters, they have relied upon certificates of officers of the Company and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Freshfields Bruckhaus Deringer US LLP, counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to the sale of the Securities and other related matters as the Representatives may require. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the General Corporation Law of the State of Delaware and the federal securities laws of the United States, upon the opinions of counsel satisfactory to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers and other representatives of the Company and the Subsidiaries and certificates of public officials.
(d) Officers’ Certificates.
(i) At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and the Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representatives shall have received a
 
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certificate of the chief executive officer or the president of the Company and of the chief financial or chief accounting officer of the Company, dated the Closing Time, to the effect that (A) there has been no such material adverse change, (B) the representations and warranties of the Company in Section 1(a) of this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (C) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time, and (D) no stop order suspending the effectiveness of the Registration Statement under the 1933 Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to their knowledge, contemplated by the Commission.
(ii) At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectus, an Adviser Material Adverse Effect, and the Representatives shall have received a certificate of the chief executive officer or the president and the chief financial or chief accounting officer of the Adviser, dated the Closing Time, to the effect that (A) there has been no such Adviser Material Adverse Effect, (B) the representations and warranties of the Adviser in Section 1(b) of this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time and (C) the Adviser has complied with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Time.
(e) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the Representatives shall have received from Ernst & Young LLP a letter, dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.
(f) Bring-down Comfort Letter. At the Closing Time, the Representatives shall have received from Ernst & Young LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.
(g) Approval of Listing. At the Closing Time, the Securities shall have been approved for listing on the Nasdaq Global Select Market, subject only to official notice of issuance.
(h) No Objection. FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements relating to the offering of the Securities.
(i) Lock-up Agreements. At the date of this Agreement, the Representatives shall have received an agreement substantially in the form of Exhibit B hereto signed by the persons listed on Schedule D hereto.
 
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(j) Conditions to Purchase of Option Securities. In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company and the Adviser contained herein and the statements in any certificates furnished by the Company, any of the Subsidiaries and the Adviser hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representatives shall have received:
(i) Officers’ Certificates.
(A) A certificate, dated such Date of Delivery, of the chief executive officer or the president or a vice president of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(d)(i) hereof remains true and correct as of such Date of Delivery.
(B) A certificate, dated such Date of Delivery, of the chief executive officer or the president or a vice president and the chief financial or chief accounting officer of the Adviser confirming that the certificates delivered at the Closing Time pursuant to Section 5(d)(ii) hereof remain true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. If requested by the Representatives, the favorable opinion of Proskauer Rose LLP, counsel for the Company, Sullivan & Cromwell LLP, special regulatory counsel for the Company, and Venable LLP, special Maryland counsel for the Company, each in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinions required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. If requested by the Representatives, the favorable opinion of Freshfields Bruckhaus Deringer US LLP, counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. If requested by the Representatives, a letter from Ernst & Young LLP, in form and substance satisfactory to the Representatives and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the Representatives pursuant to Section 5(f) hereof, except that the “specified date” in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery.
(k) Additional Documents. At the Closing Time and at each Date of Delivery (if any) counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and the Adviser in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representatives and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities on a Date of Delivery which is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representatives by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7, 8, 14, 15 and 16 survive any such termination and remain in full force and effect.
 
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SECTION 6. Indemnification.
(a) Indemnification of Underwriters by the Company and the Adviser. The Company and the Adviser, severally and not jointly, agree to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”)), its selling agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including any Rule 430A Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included (A) in any preliminary prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto), or (B) in any road show as defined in Rule 433(h) under the 1933 Act (a “road show”), or the omission or alleged omission in any preliminary prospectus, the Prospectus, any road show or the General Disclosure Package of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred (including the reasonably incurred and documented fees and disbursements of counsel chosen by the Representatives), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement (or any amendment thereto), including any Rule 430A Information, any preliminary prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information, and provided, further, that the Adviser’s indemnity agreement shall only apply to statements described in (i) above regarding the Adviser.
(b) Indemnification of Company, Directors, Officers and Adviser. Each Underwriter severally agrees to indemnify and hold harmless the Company, the Adviser, their directors, each of the Company’s officers who signed the Registration Statement and each person, if any, who controls the Company or the Adviser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including any Rule 430A Information, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.
 
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(c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced (through the forfeiture of substantive rights and defenses) as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by the Representatives, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Adviser, on the one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Adviser, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. For the avoidance of doubt, the Adviser’s contribution agreement shall only apply to instances in which the Adviser has an indemnity obligation as described above in Section 6(a).
 
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The relative benefits received by the Company and the Adviser, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company (and net of the portion of the underwriting discount paid by the Adviser), on the one hand, and the total underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company and the Adviser, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Adviser or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company, the Adviser and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions received by such Underwriter in connection with the Securities underwritten by it and distributed to the public.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
Notwithstanding anything in this Agreement to the contrary, any indemnification and contribution by the Company shall be subject to the requirements and limitations of Section 17(i) of the 1940 Act and any applicable guidance from the Commission or its staff thereunder.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company or the Adviser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company or the Adviser, as the case may be. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint.
 
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SECTION 8. Representations, Warranties and Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company, any of the Subsidiaries or the Adviser submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company and (ii) delivery of and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination. The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, in the judgment of the Representatives, since the time of execution of this Agreement or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and the Subsidiaries taken as one enterprise or the Adviser, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the completion of the offering or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the Nasdaq Global Market, or (iv) if trading generally on the NYSE MKT or the New York Stock Exchange or in the Nasdaq Global Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Commission, FINRA or any other governmental authority, or (v) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 14, 15 and 16 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time or a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Company to sell, the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting Underwriter.
 
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No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Securities, as the case may be, either the (i) Representatives or (ii) the Company shall have the right to postpone Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to (i) Merrill Lynch at One Bryant Park, New York, New York 10036, attention of Syndicate Department (facsimile: (646) 855-3073), with a copy to ECM Legal (facsimile: (212) 230-8730); (ii) Morgan Stanley & Co. LLC at 1585 Broadway, New York, New York 10036, attention of Equity Syndicate Desk, with a copy to Legal Department; (iii) J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179 (facsimile: (212) 622-8358), Attention Equity Syndicate Desk; (iv) Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013 (facsimile: (646) 291-1469), Attention: General Counsel; notices to the Company and the Adviser shall be directed to them at 520 Madison Avenue, 40 th  Floor, New York, New York 10022, Attention: Michael Hart.
SECTION 12. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the initial public offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, any of the Subsidiaries or their respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering of the Securities or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or any of its subsidiaries on other matters) and no Underwriter has any obligation to the Company with respect to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering of the Securities and the Company has consulted its own respective legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
SECTION 13. Parties. This Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company and the Adviser and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and
 
30

exclusive benefit of the Underwriters, the Company and the Adviser and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. Trial by Jury. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
SECTION 15. GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.
SECTION 16. Consent to Jurisdiction; Waiver of Immunity. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby shall be instituted in (i) the federal courts of the United States of America located in the City and County of New York, Borough of Manhattan or (ii) the courts of the State of New York located in the City and County of New York, Borough of Manhattan (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
SECTION 19. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.
 
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Company and the Adviser in accordance with its terms.
 	 	 	
Very truly yours,
 
TCG BDC, INC.	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 	
Carlyle GMS Investment Management L.L.C.	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 
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CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
                               INCORPORATED
MORGAN STANLEY & CO. LLC
J.P. MORGAN SECURITIES LLC
CITIGROUP GLOBAL MARKETS INC.

By:	 	MERRILL LYNCH, PIERCE, FENNER & SMITH
                               INCORPORATED	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 	 	
By:	 	MORGAN STANLEY & CO LLC	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 	 	
By:	 	J.P. MORGAN SECURITIES LLC	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 	 	
By:	 	CITIGROUP GLOBAL MARKETS INC.	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
For themselves and as Representatives of the other Underwriters named in Schedule A hereto.
 
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Exhibit (k)(13)
Execution Version
FOURTH AMENDMENT, dated as of May 26, 2017 (“Fourth Amendment”), to the LOAN AND SERVICING AGREEMENT, dated as of May 24, 2013 (as amended by the First Amendment, dated as of June 30, 2014, the Second Amendment dated as of June 19, 2015, and the Third Amendment dated as of June 9, 2016, and prior to the effectiveness of this Fourth Amendment, the “ Existing Agreement ” and following the effectiveness of this Fourth Amendment, the “ Agreement ”), among TCG BDC SPV LLC (F/K/A CARLYLE GMS FINANCE SPV LLC), a Delaware limited liability company (the “ Borrower ”), TCG BDC, INC. (F/K/A CARLYLE GMS FINANCE, INC.), a Maryland corporation (“ Carlyle ”), as the Transferor and the Servicer, each of the Conduit Lenders, Liquidity Banks, Lender Agents and Institutional Lenders party to the Existing Agreement, CITIBANK, N.A., as the Collateral Agent, WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Account Bank, the Backup Servicer, the Collateral Custodian and the Collateral Administrator, CITIBANK, N.A., as the Lead Arranger, and CITIBANK, N.A., as the Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Existing Agreement.
The parties to the Existing Agreement desire to extend and amend the Existing Agreement in the manner set forth herein.
Accordingly, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1.    Amendments to the Existing Agreement. The Existing Agreement, including each of the Exhibits and Schedules thereto, is hereby amended to incorporate the changes shown on the marked pages attached hereto as Annex A. The redline markings contained in Annex A showing deletions and additions are for convenience only and such markings (as opposed to the additions and deletions themselves) shall not constitute part of the amended text of the Agreement.
2.    Effective Date. This Fourth Amendment shall become effective (the “Effective Date”) upon the satisfaction of the following conditions (in form and substance reasonably acceptable to the Administrative Agent):
(a)    The Administrative Agent shall have received a copy of this Fourth Amendment duly executed by each of the Borrower, Carlyle, the Lender Agents, the Conduit Lenders, the Liquidity Banks, the Institutional Lenders, the Collateral Agent, the Lead Arranger, the Administrative Agent and the Account Bank, Backup Servicer, Collateral Custodian and Collateral Administrator.
(b)    The Administrative Agent shall have received a copy of (i) the Structuring Fee Letter, signed by the Borrower and Carlyle and accepted and agreed to by the Administrative Agent, and (ii) the Fifth Amendment to Transaction Fee Letter, signed by the Borrower, Carlyle, the Lender Agents, the Administrative Agent and the Collateral Agent.
(c)    The Administrative Agent shall have received Opinions of Counsel with respect to such matters as requested by the Administrative Agent.
3.    Miscellaneous.
(a)    Amended Terms. On and after the date hereof, all references to the Agreement in each of the Transaction Documents shall hereafter mean the Agreement as amended by this Fourth Amendment. Except as specifically amended hereby or otherwise agreed, the Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

(b)    Representations and Warranties of the Borrower and Servicer.    Each of the Borrower and the Servicer, severally, for itself only, represents and warrants as of the date of this Fourth Amendment as follows:
(i)    It has taken all necessary action to authorize the execution, delivery and performance of this Fourth Amendment.
(ii)    This Fourth Amendment has been duly executed and delivered by such Person and each of this Fourth Amendment and the Agreement, as amended by this Fourth Amendment constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(iii)    No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by such Person of this Fourth Amendment other than such as has been met or obtained and are in full force and effect.
(iv)    The representations and warranties set forth in Sections 4.01, 4.02 and 4.03 of the Agreement are true and correct in all material respects as of the date hereof (except for those which expressly relate to an earlier date).
(v)    No event has occurred and is continuing which constitutes an Event of Default or an Unmatured Event of Default.
(c)    Transaction Document. This Fourth Amendment shall constitute a Transaction Document under the terms of the Agreement.
(d)    Counterparts; Electronic Signatures; Severability; Integration. This Fourth Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Fourth Amendment by e-mail in portable document format (.pdf) or facsimile shall be effective as delivery of a manually executed counterpart of this Fourth Amendment.
(e)    GOVERNING LAW. THIS FOURTH AMENDMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS FOURTH AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER.
(f)    Successors and Assigns. This Fourth Amendment shall be binding upon and inure to the benefit of the Borrower, the Servicer, the Administrative Agent, each Lender, the Lender Agents, the Collateral Agent, the Backup Servicer, the Account Bank, the Collateral Custodian, the Collateral Administrator and their respective successors and permitted assigns.
[Signature pages to follow.]
 
2

IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be duly executed as of the date first above written.

THE BORROWER:
 	
TCG BDC SPV LLC (F/K/A CARLYLE GMS FINANCE SPV LLC)	

By:	 	/s/ Orit Mizrachi	
Name:	 	Orit Mizrachi	
Title:	 	Officer	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

 	 	 	
THE SERVICER:	
 
TCG BDC, INC. (F/K/A CARLYLE GMS FINANCE, INC.)	

By:	 	/s/ Orit Mizrachi	
Name:	 	Orit Mizrachi	
Title:	 	Officer	

THE TRANSFEROR:
 	
TCG BDC, INC. (F/K/A CARLYLE GMS FINANCE, INC.)	

By:	 	/s/ Orit Mizrachi	
Name:	 	Orit Mizrachi	
Title:	 	Officer	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

 	 	 	
THE ADMINISTRATIVE AGENT:	
 	
CITIBANK, N.A.	

By:	 	/s/ Brett Bushinger	
Name:	 	Brett Bushinger	
Title:	 	Vice President	

THE COLLATERAL AGENT:	
 	
CITIBANK, N.A.	

By:	 	/s/ Brett Bushinger	
Name:	 	Brett Bushinger	
Title:	 	Vice President	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

 	 	 	
THE ACCOUNT BANK, COLLATERAL CUSTODIAN AND	
COLLATERAL ADMINISTRATOR:	
 	
WELLS FARGO BANK, NATIONAL ASSOCIATION	

By:	 	/s/ Rupinder Suri	
Name:	 	Rupinder Suri	
Title:	 	Vice President	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

 	 	 	
THE BACKUP SERVICER:	
 	
WELLS FARGO BANK, NATIONAL ASSOCIATION	

By:	 	/s/ Joneen Noyle	
Name:	 	Joneen Noyle	
Title:	 	Assistant Vice President	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

 	 	 	
LIQUIDITY BANK AND CONDUIT LENDER:	
 	
CIESCO, LLC	
 	 	
By:	 	Citibank, N.A., as Attorney-in-Fact	

By:	 	/s/ Brett Bushinger	
Name:	 	Brett Bushinger	
Title:	 	Vice President	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

LENDER AGENT:
CITIBANK, N.A.

By:	 	/s/ Brett Bushinger	
Name:	 	Brett Bushinger	
Title:	 	Vice President	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

INSTITUTIONAL LENDER:
BANK OF AMERICA, N.A.

By:	 	/s/ Allen D. Shifflet	
Name:	 	Allen D. Shifflet	
Title:	 	Managing Director	
LENDER AGENT:
BANK OF AMERICA, N.A.

By:	 	/s/ Allen D. Shifflet	
Name:	 	Allen D. Shifflet	
Title:	 	Managing Director	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

LIQUIDITY BANK:
NATIXIS, NEW YORK BRANCH

By:	 	/s/ Lorraine Medvecky	
Name:	 	Lorraine Medvecky	
Title:	 	Managing Director	
LENDER AGENT:
NATIXIS, NEW YORK BRANCH

By:	 	/s/ Lorraine Medvecky	
Name:	 	Lorraine Medvecky	
Title:	 	Managing Director	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

INSTITUTIONAL LENDER:
MIZUHO BANK, LTD.

By:	 	/s/ James Fayen	
Name:	 	James Fayen	
Title:	 	Managing Director	
LENDER AGENT:
MIZUHO BANK, LTD.

By:	 	/s/ James Fayen	
Name:	 	James Fayen	
Title:	 	Managing Director	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

INSTITUTIONAL LENDER:
KEY EQUIPMENT FINANCE, a division of KeyBank National Association

By:	 	/s/ Richard Andersen	
Name:	 	Richard Andersen	
Title:	 	Designated Signer	
LENDER AGENT:    
KEY EQUIPMENT FINANCE, a division of KeyBank National Association    

By:	 	/s/ Richard Andersen	
Name:	 	Richard Andersen	
Title:	 	Designated Signer	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
[Fourth Amendment – Signature Page]

INSTITUTIONAL LENDER:
STATE STREET BANK AND TRUST COMPANY

By:	 	/s/ C.A. Garrity	
Name:	 	C.A. Garrity	
Title:	 	Senior Vice President	
LENDER AGENT:
STATE STREET BANK AND TRUST COMPANY

By:	 	/s/ C.A. Garrity	
Name:	 	C.A. Garrity	
Title:	 	Senior Vice President	
 
[Fourth Amendment – Signature Page]

Annex A
Cumulative Conformed Loan and Servicing Agreement
(attached)

EXECUTION VERSION
Conformed Copy – Including First Amendment (June 30, 2014)
Second Amendment (June 19, 2015)
Third Amendment (June 9, 2016)
Name Change (March 15, 2017)
Fourth Amendment (May 26, 2017)

LOAN AND SERVICING AGREEMENT
among
TCG BDC SPV LLC (F/K/A CARLYLE GMS FINANCE SPV LLC),
as the Borrower,
TCG BDC, INC. (F/K/A CARLYLE GMS FINANCE, INC.)
as the Transferor,
TCG BDC, INC. (F/K/A CARLYLE GMS FINANCE, INC.)
as the Servicer,
Each of the Conduit Lenders, Liquidity Banks, Lender Agents and Institutional Lenders from time to time party hereto,
CITIBANK, N.A.,
as the Collateral Agent,
WELLS FARGO BANK, NATIONAL ASSOCIATION
as the Account Bank, the Backup Servicer, the Collateral Custodian
and the Collateral Administrator,
CITIBANK, N.A.
as the Lead Arranger
and
CITIBANK, N.A.,
as the Administrative Agent
Dated as of May 24, 2013

TABLE OF CONTENTS

 	 	 	  	Page	 	
 	 	
ARTICLE I. DEFINITIONS	  	 	1	 	
SECTION 1.01	 	Certain Defined Terms	  	 	1	 	
SECTION 1.02	 	Other Terms	  	 	5253	 	
SECTION 1.03	 	Computation of Time Periods	  	 	53	 	
SECTION 1.04	 	Interpretation	  	 	53	 	
 	 	
ARTICLE II. THE FACILITY	  	 	5454	 	
SECTION 2.01	 	Revolving Note and Advances	  	 	5454	 	
SECTION 2.02	 	Procedure for Advances	  	 	5555	 	
SECTION 2.03	 	Determination of Yield; Conversions of Advances; Limitations on Fixed LIBOR Advances	  	 	5656	 	
SECTION 2.04	 	Remittance Procedures	  	 	5757	 	
SECTION 2.05	 	Instructions to the Collateral Agent and the Account Bank	  	 	6161	 	
SECTION 2.06	 	Borrowing Base Deficiency Payments	  	 	6161	 	
SECTION 2.07	 	Substitution and Sale of Loan Assets; Affiliate Transactions	  	 	6262	 	
SECTION 2.08	 	Payments and Computations, Etc.	  	 	6868	 	
SECTION 2.09	 	Undrawn Fee	  	 	6969	 	
SECTION 2.10	 	Increased Costs; Capital Adequacy	  	 	6969	 	
SECTION 2.11	 	Taxes	  	 	7071	 	
SECTION 2.12	 	Collateral Assignment of Agreements	  	 	7272	 	
SECTION 2.13	 	Grant of a Security Interest	  	 	7272	 	
SECTION 2.14	 	Evidence of Debt	  	 	7373	 	
SECTION 2.15	 	Survival of Representations and Warranties	  	 	7373	 	
SECTION 2.16	 	Release of Loan Assets	  	 	7374	 	
SECTION 2.17	 	Treatment of Amounts Deposited by the Borrower	  	 	7474	 	
SECTION 2.18	 	Mandatory and Voluntary Prepayments; Termination	  	 	7474	 	
SECTION 2.19	 	Collections and Allocations	  	 	7575	 	
SECTION 2.20	 	Reinvestment of Principal Collections	  	 	7676	 	
SECTION 2.21	 	Extension of Scheduled Commitment Termination Date	  	 	7777	 	
SECTION 2.22	 	Defaulting Lenders	  	 	7878	 	
 	 	
ARTICLE III. CONDITIONS PRECEDENT	  	 	7979	 	
SECTION 3.01	 	Conditions Precedent to Effectiveness	  	 	7979	 	
SECTION 3.02	 	Conditions Precedent to All Advances	  	 	8081	 	
SECTION 3.03	 	Advances Do Not Constitute a Waiver	  	 	8383	 	
SECTION 3.04	 	Conditions to Pledges of Loan Assets	  	 	8383	 	
 	 	
ARTICLE IV. REPRESENTATIONS AND WARRANTIES	  	 	8484	 	
SECTION 4.01	 	Representations and Warranties of the Borrower	  	 	8484	 	
SECTION 4.02	 	Representations and Warranties of the Borrower Relating to the Agreement and the Collateral Portfolio	  	 	9292	 	
SECTION 4.03	 	Representations and Warranties of the Servicer	  	 	9393	 	
SECTION 4.04	 	Representations and Warranties of each Lender	  	 	9797	 	
SECTION 4.05	 	Representations and Warranties of the Collateral Custodian	  	 	9798	 	
SECTION 4.06	 	Representations and Warranties of the Backup Servicer	  	 	9898	 	
 
i

 	 	 	 	 	 	 	
 	 	 	  	Page	 	
 	 	
ARTICLE V. GENERAL COVENANTS	  	 	9999	 	
SECTION 5.01	 	Affirmative Covenants of the Borrower	  	 	9999	 	
SECTION 5.02	 	Negative Covenants of the Borrower	  	 	106106	 	
SECTION 5.03	 	Financial Covenants of the Borrower	  	 	109109	 	
SECTION 5.04	 	Affirmative Covenants of the Servicer	  	 	109109	 	
SECTION 5.05	 	Negative Covenants of the Servicer	  	 	114114	 	
SECTION 5.06	 	Affirmative Covenants of the Collateral Custodian	  	 	116116	 	
SECTION 5.07	 	Negative Covenants of the Collateral Custodian	  	 	116116	 	
SECTION 5.08	 	Affirmative Covenants of the Backup Servicer	  	 	116116	 	
SECTION 5.09	 	Negative Covenants of the Backup Servicer	  	 	116116	 	
SECTION 5.10	 	Affirmative Covenants of the Account Bank	  	 	117117	 	
SECTION 5.11	 	Affirmative Covenants of the Collateral Administrator	  	 	117117	 	
 	 	
ARTICLE VI. ADMINISTRATION AND SERVICING OF CONTRACTS	  	 	117117	 	
SECTION 6.01	 	Appointment and Designation of the Servicer	  	 	117117	 	
SECTION 6.02	 	Duties of the Servicer	  	 	119119	 	
SECTION 6.03	 	Authorization of the Servicer	  	 	122122	 	
SECTION 6.04	 	Collection of Payments; Accounts	  	 	123122	 	
SECTION 6.05	 	Realization Upon Loan Assets	  	 	124124	 	
SECTION 6.06	 	Servicing Compensation	  	 	125125	 	
SECTION 6.07	 	Payment of Certain Expenses by Servicer	  	 	125125	 	
SECTION 6.08	 	Reports to the Administrative Agent; Account Statements; Servicing Information	  	 	125125	 	
SECTION 6.09	 	Annual Statement as to Compliance	  	 	127127	 	
SECTION 6.10	 	Annual Independent Public Accountant’s Servicing Reports	  	 	127127	 	
SECTION 6.11	 	The Servicer Not to Resign	  	 	128128	 	
 	 	
ARTICLE VII. THE BACKUP SERVICER	  	 	128128	 	
SECTION 7.01	 	Designation of the Backup Servicer	  	 	128128	 	
SECTION 7.02	 	Duties of the Backup Servicer	  	 	128128	 	
SECTION 7.03	 	Merger or Consolidation	  	 	129129	 	
SECTION 7.04	 	Backup Servicing Compensation	  	 	129129	 	
SECTION 7.05	 	Backup Servicer Removal	  	 	130129	 	
SECTION 7.06	 	Limitation on Liability	  	 	130130	 	
SECTION 7.07	 	The Backup Servicer Not to Resign	  	 	130130	 	
 	 	
ARTICLE VIII. EVENTS OF DEFAULT	  	 	131130	 	
SECTION 8.01	 	Events of Default	  	 	131130	 	
SECTION 8.02	 	Additional Remedies of the Administrative Agent	  	 	134134	 	
SECTION 8.03	 	Volcker Extension	  	 	137137	 	
 	 	
ARTICLE IX. INDEMNIFICATION	  	 	137	 	
SECTION 9.01	 	Indemnities by the Borrower	  	 	137	 	
SECTION 9.02	 	Indemnities by Servicer	  	 	140	 	
SECTION 9.03	 	Legal Proceedings	  	 	142	 	
SECTION 9.04	 	After-Tax Basis	  	 	143143	 	
 
ii

 	 	 	 	 	 	 	
 	 	 	  	Page	 	
 	 	
ARTICLE X. THE ADMINISTRATIVE AGENT AND THE LENDER AGENTS	  	 	143143	 	
SECTION 10.01	 	The Administrative Agent	  	 	143143	 	
SECTION 10.02	 	The Lender Agents	  	 	147146	 	
 	 	
ARTICLE XI. COLLATERAL AGENT	  	 	149148	 	
SECTION 11.01	 	Designation of Collateral Agent	  	 	149148	 	
SECTION 11.02	 	Duties of Collateral Agent	  	 	149149	 	
SECTION 11.03	 	Merger or Consolidation	  	 	151151	 	
SECTION 11.04	 	Collateral Agent Compensation	  	 	151151	 	
SECTION 11.05	 	Collateral Agent Removal	  	 	151151	 	
SECTION 11.06	 	Limitation on Liability	  	 	152151	 	
SECTION 11.07	 	Collateral Agent Resignation	  	 	153153	 	
 	 	
ARTICLE XII. MISCELLANEOUS	  	 	153153	 	
SECTION 12.01	 	Amendments and Waivers	  	 	153153	 	
SECTION 12.02	 	Notices, Etc.	  	 	154154	 	
SECTION 12.03	 	No Waiver Remedies	  	 	156156	 	
SECTION 12.04	 	Binding Effect; Assignability; Multiple Lenders	  	 	157157	 	
SECTION 12.05	 	Term of This Agreement	  	 	158158	 	
SECTION 12.06	 	GOVERNING LAW; JURY WAIVER	  	 	158158	 	
SECTION 12.07	 	Costs, Expenses and Taxes	  	 	158158	 	
SECTION 12.08	 	No Proceedings	  	 	160159	 	
SECTION 12.09	 	Recourse Against Certain Parties	  	 	160159	 	
SECTION 12.10	 	Execution in Counterparts; Severability; Integration	  	 	161161	 	
SECTION 12.11	 	Consent to Jurisdiction; Service of Process	  	 	161161	 	
SECTION 12.12	 	Characterization of Conveyances Pursuant to the Contribution Agreement	  	 	162161	 	
SECTION 12.13	 	Confidentiality	  	 	163162	 	
SECTION 12.14	 	Non-Confidentiality of Tax Treatment	  	 	164164	 	
SECTION 12.15	 	Waiver of Set Off	  	 	164164	 	
SECTION 12.16	 	Headings and Exhibits	  	 	165164	 	
SECTION 12.17	 	Ratable Payments	  	 	165164	 	
SECTION 12.18	 	Failure of Borrower or Servicer to Perform Certain Obligations	  	 	165165	 	
SECTION 12.19	 	Power of Attorney	  	 	165165	 	
SECTION 12.20	 	Delivery of Termination Statements, Releases, etc	  	 	165165	 	
SECTION 12.21	 	USA PATRIOT Act	  	 	166165	 	
SECTION 12.22	 	Permitted Mergers	  	 	166	 	
 	 	
ARTICLE XIII. COLLATERAL CUSTODIAN	  	 	166166	 	
SECTION 13.01	 	Designation of Collateral Custodian	  	 	166166	 	
SECTION 13.02	 	Duties of Collateral Custodian	  	 	166166	 	
SECTION 13.03	 	Merger or Consolidation	  	 	169169	 	
SECTION 13.04	 	Collateral Custodian Compensation	  	 	169169	 	
SECTION 13.05	 	Collateral Custodian Removal	  	 	169169	 	
SECTION 13.06	 	Limitation on Liability	  	 	169169	 	
 
iii

 	 	 	 	 	 	 	
 	 	 	  	Page	 	
 	 	 	
SECTION 13.07	 	Collateral Custodian Resignation	  	 	170170	 	
SECTION 13.08	 	Release of Documents	  	 	171171	 	
SECTION 13.09	 	Return of Required Loan Documents	  	 	171171	 	
SECTION 13.10	 	Access to Certain Documentation and Information Regarding the Collateral Portfolio; Audits of Servicer	  	 	172172	 	
SECTION 13.11	 	Bailment	  	 	172172	 	
 	 	
ARTICLE XIV. ACCOUNT BANK	  	 	172172	 	
SECTION 14.01	 	Designation of Account Bank	  	 	172172	 	
SECTION 14.02	 	Duties of Account Bank	  	 	173173	 	
SECTION 14.03	 	Merger or Consolidation	  	 	173173	 	
SECTION 14.04	 	Account Bank Compensation	  	 	173173	 	
SECTION 14.05	 	Account Bank Removal	  	 	173173	 	
SECTION 14.06	 	Limitation on Liability	  	 	173173	 	
SECTION 14.07	 	Account Bank Resignation	  	 	174174	 	
 	 	
ARTICLE XV. COLLATERAL ADMINISTRATOR	  	 	174174	 	
SECTION 15.01	 	Designation of Collateral Administrator	  	 	174174	 	
SECTION 15.02	 	Duties of Collateral Administrator	  	 	174174	 	
SECTION 15.03	 	Merger or Consolidation	  	 	175175	 	
SECTION 15.04	 	Collateral Administrator Compensation	  	 	176176	 	
SECTION 15.05	 	Collateral Administrator Removal	  	 	176176	 	
SECTION 15.06	 	Limitation on Liability	  	 	176176	 	
SECTION 15.07	 	Collateral Administrator Resignation	  	 	176176	 	
 
iv

LIST OF SCHEDULES AND EXHIBITS

SCHEDULES	  	 	
 	 	
SCHEDULE I	  	Conditions Precedent Documents	
SCHEDULE II	  	Prior Names, Tradenames, Fictitious Names and “Doing Business As” Names	
SCHEDULE III	  	Eligibility Criteria	
SCHEDULE IV	  	Loan Asset Schedule	
SCHEDULE V	  	Advance Date Assigned Values	
SCHEDULE VI	  	Industry Categories	
 	 	
EXHIBITS	  	 	
 	 	
EXHIBIT A	  	Form of Notice of Permitted Securitization	
EXHIBIT B	  	Risk and Collection Policies	
EXHIBIT C	  	Form of Borrowing Base Certificate	
EXHIBIT D	  	Form of Disbursement Request	
EXHIBIT E	  	Form of Joinder Supplement	
EXHIBIT F	  	Form of Notice of Borrowing	
EXHIBIT G	  	Form of Notice of Reduction (Reduction of Advances Outstanding)	
EXHIBIT H	  	Form of Revolving Note	
EXHIBIT I	  	Form of Notice of Loan Asset Dividend	
EXHIBIT J	  	Form of Certificate of Closing Attorneys	
EXHIBIT K	  	Form of Servicing Report	
EXHIBIT L	  	Form of Servicer’s Certificate (Servicing Report)	
EXHIBIT M	  	Form of Release of Required Loan Documents	
EXHIBIT N	  	Form of Transferee Letter	
EXHIBIT O	  	Form of Power of Attorney for Servicer	
EXHIBIT P	  	Form of Power of Attorney for Borrower	
EXHIBIT Q	  	Form of Servicer’s Certificate (Loan Asset Register)	
EXHIBIT R	  	Form of Tax Certificate	
EXHIBIT S	  	Form of Compliance Certificate (Required Asset Coverage Ratio)	
EXHIBIT T	  	Form of Qualifying Agreement Among Lenders	
 	 	
ANNEXES	  	 	
 	 	
ANNEX A	  	Commitments	
ANNEX B	  	Borrowing Base Model	
ANNEX C	  	Diversity Score Model	
ANNEX D	  	WARR and WARF Matrix Models	
ANNEX E	  	WARR and WARF Related Definitions	
ANNEX F	  	Internal Valuation Protocol	
 
v

LOAN AND SERVICING AGREEMENT, dated as of May 24, 2013, by and among:
(1) TCG BDC SPV LLC (F/K/A CARLYLE GMS FINANCE SPV LLC), a Delaware limited liability company (together with its successors and assigns in such capacity, the “ Borrower ”);
(2) TCG BDC, INC. (F/K/A CARLYLE GMS FINANCE, INC.), a Maryland corporation, as the Transferor (as defined herein);
(3) TCG BDC, INC. (F/K/A CARLYLE GMS FINANCE, INC.), a Maryland corporation, as the Servicer (as defined herein);
(4) EACH OF THE CONDUIT LENDERS FROM TIME TO TIME PARTY HERETO, as a Conduit Lender (as defined herein);
(5) EACH OF THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO, as a Liquidity Bank (as defined herein);
(6) EACH OF THE LENDER AGENTS FROM TIME TO TIME PARTY HERETO, as a Lender Agent (as defined herein);
(7) EACH OF THE INSTITUTIONAL LENDERS FROM TIME TO TIME PARTY HERETO, as an Institutional Lender (as defined herein);
(8) CITIBANK, N.A., as the Collateral Agent (as defined herein);
(9) WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Account Bank (as defined herein), the Backup Servicer (as defined herein), the Collateral Custodian (as defined herein) and the Collateral Administrator (as defined herein);
(10) CITIBANK, N.A., as the Lead Arranger (as defined herein); and
(11) CITIBANK, N.A., as Administrative Agent (as defined herein).
The Lenders have agreed, on the terms and conditions set forth herein, to provide a secured revolving credit facility which shall provide for Advances from time to time in the amounts and in accordance with the terms set forth herein.
Accordingly, the parties agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.01 Certain Defined Terms.
(a) Certain capitalized terms used throughout this Agreement are defined above or in this Section 1.01.
(b) As used in this Agreement and the exhibits and schedules thereto (each of which is hereby incorporated herein and made a part hereof), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“1940 Act” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“Account Bank” means Wells Fargo Bank, National Association, in its capacity as the “Account Bank” pursuant to this Agreement and the Collection Account Agreement.
“Account Bank Fees” means the fees set forth in the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter that are payable to the Account Bank, as such fee letter may be amended, restated, supplemented or otherwise modified from time to time.
“Account Bank Termination Notice” has the meaning assigned to that term in Section 14.05.
“Action” has the meaning assigned to that term in Section 9.03.
“Additional Amount” has the meaning assigned to that term in Section 2.11(a).
“Adjusted Pro Rata Share” means, (i) with respect to each Liquidity Bank and each Institutional Lender that is a Non-Defaulting Lender, (x) with respect to the determination of Advances, the Pro Rata Share with respect to each Liquidity Bank and each Institutional Lender determined when assessing a value of zero to the “Undrawn Amount” of all Defaulting Lenders in the calculation thereunder, and (y) with respect to the allocation of Collections on any Payment Date or otherwise in connection with any distribution hereunder, the Pro Rata Share with respect to each Liquidity Bank and each Institutional Lender determined when assessing a value of zero to the “Advances Outstanding” of all Defaulting Lenders in the calculation thereunder, and (ii) with respect to each Defaulting Lender, 0%.
“Administrative Agent” means Citibank, N.A., in its capacity as administrative agent for the Lenders, together with its successors and assigns, including any successor appointed pursuant to  Article X .
“Advance” means each loan advanced by the Lenders to the Borrower on an Advance Date pursuant to Article II .
“Advance Date” means, with respect to any Advance, the Business Day during the Revolving Period on which such Advance is made.
“Advance Date Assigned Value” means, with respect to any Loan Asset included in the calculation of the Borrowing Base, the value (expressed as a percentage of the Outstanding Principal Balance of such Loan Asset) equal to the value initially set forth on  Schedule V  hereto as of the Closing Date or, with respect to Loan Assets included after the Closing Date, the value determined by the Servicer and reflected on the books and records of the Transferor as of the Cut-Off Date; provided,  in no event shall the Advance Date Assigned Value exceed 100%, and  provided, further , any Loan Asset that is determined to have an Advance Date Assigned Value equal to or greater than 97% shall be deemed to have an Assigned Value equal to 100%.
 
2

“Advances Outstanding” means, at any time, the sum of the outstanding principal amounts of Advances loaned to the Borrower for the initial and any subsequent borrowings pursuant to  Sections 2.01  and  2.02  as of such time.
“Affected Party” has the meaning assigned to that term in Section 2.10(a).
“Affiliate” means either:
(i) when used with respect to the Borrower, CGMS or Carlyle Management, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Borrower, CGMS or Carlyle Management, as applicable. Anything herein to the contrary notwithstanding, the term “Affiliate” shall not include any Person that constitutes an Investment held by the Borrower in the ordinary course of business; or
(ii) when used with respect to any Person other than the Borrower, CGMS or Carlyle Management, any other Person controlling, controlled by or under common control with such Person (where, for the purposes of this clause (ii) of this definition, “ control, ” when used with respect to any specified Person, means the power to vote 10% or more of the voting securities of such Person or to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing);
provided that for purposes of (A) determining whether any Loan Asset is an Eligible Loan Asset, (B) the definition of “Minimum Credit Enhancement”, (C) the determination of the Diversity Score and compliance with the Diversity Score Test, and (D)  Section 5.01(b)(xix) , in each case, the term “ Affiliate ” shall not include any Affiliate relationship which may exist solely as a result of direct or indirect ownership of, or control by, a common Financial Sponsor.
“Agented Note” means any Loan Asset (i) originated as a part of a syndicated loan transaction that has been closed (without regard to any contemporaneous or subsequent syndication of such Loan Asset) prior to such Loan Asset becoming part of the Collateral Portfolio and (ii) with respect to which, upon an assignment of the note under the Contribution Agreement to the Borrower, the Borrower, as assignee of the note, will have all of the rights but none of the obligations of the Transferor with respect to such note and the Underlying Collateral.
“Aggregate Outstanding Loan Balance” or “AOLB” means the aggregate Outstanding Loan Balances of all Eligible Loan Assets.
“Aggregate Outstanding Principal Balance” means the aggregate Outstanding Principal Balances of all Eligible Loan Assets.
“Aggregate Commitments” for all Liquidity Banks and Institutional Lenders as of any date of determination, means the aggregate of the Commitments of all Liquidity Banks and Institutional Lenders as of such date, which amount is set forth in  Annex A , as such amount may be decreased pursuant to  Section 2.18(c)  or increased (with the consent of the Administrative Agent) by the addition of Commitments to  Annex A  by a Lender executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower as contemplated by  Section 12.04(a) , up to an aggregate amount not to exceed $750,000,000,.
 
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“Agreement” means this Loan and Servicing Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time hereafter.
“Amortization Advances Outstanding” means the Advances Outstanding as of the Scheduled Commitment Termination Date.
“Amortization Period” means the date commencing on the Scheduled Commitment Termination Date and ending on the Final Maturity Date.
“Amortization Principal Reduction Amount” means, with respect to:
(i) the 4th Payment Date after the Scheduled Commitment Termination Date, the positive difference, if any, equal to (x) 15.00% of the Amortization Advances Outstanding;
(ii) the 8th Payment Date after the Scheduled Commitment Termination Date, the positive difference, if any, equal to (x) 40.00% of the Amortization Advances Outstanding; and
(iii) the Scheduled Maturity Date, the positive difference, if any, equal to (x) 100.00% of the Amortization Advances Outstanding;
in each case (with respect to clauses (i), (ii) and (iii) above), minus the sum of (x) the aggregate amount of prepayments of principal of the Advances Outstanding made pursuant to  Section 2.18(b)  or  2.06(a)  during the Amortization Period,  plus  (and without duplication) (y) any previous payments of Advances Outstanding pursuant to clause  fifth  of  Section 2.04(c)  made on any prior Payment Date during the Amortization Period.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction in which the Borrower, the Servicer or their respective Affiliates conduct business and applicable to the Borrower, the Servicer or their respective Affiliates from time to time concerning or relating to bribery or corruption.
“Applicable Index” means, (i) with respect to Broadly Syndicated Loan Assets, the S&P/LSTA U.S. Leveraged Loan 100 Index, and (ii) with respect to Middle Market Loan Assets, the S&P/LSTA Middle Market Leveraged Loan Index;  or , if either such index is unavailable, such other recognized metric or determination method proposed by the Administrative Agent and consented to by the Servicer (such consent not to be unreasonably withheld).
“Applicable Law” means for any Person all existing and future laws, rules, regulations (including temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders, licenses of and interpretations by any Governmental Authority applicable to such Person (including, without limitation, predatory lending laws, usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations “B” and “Z”, the Servicemembers Civil Relief Act of 2003 and state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and all other consumer credit laws and equal credit opportunity and disclosure laws) and applicable judgments, decrees, injunctions, writs, awards or orders of any court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.
“Applicable Spread” means the applicable percentage set forth in the Transaction Fee Letter.
 
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“Assigned Documents” has the meaning assigned to that term in Section 2.12.
“Assigned Value” means, with respect to any Loan Asset, as of any date of determination and expressed as a percentage of the Outstanding Principal Balance of such Loan Asset, (A) prior to the occurrence of an Assigned Value Adjustment Event (and the determination of a Value Adjusted Assigned Value), either: (i) prior to the determination of any Updated Assigned Value, the Advance Date Assigned Value, or (ii) the most recently determined Updated Assigned Value, and (B) following the occurrence of an Assigned Value Adjustment Event (and the determination of a Value Adjusted Assigned Value), the most recently determined Value Adjusted Assigned Value, of such Loan Asset;  provided,  in no event shall any Assigned Value exceed 100%, and  provided, further , any Assigned Value determined to be equal to or greater than 97% shall be deemed to have an Assigned Value equal to 100%.
“Assigned Value Adjustment Event” means, with respect to any Loan Asset, any occurrence of one or more of the following events (any of which, for the avoidance of doubt, may occur more than once):
(iv) an Obligor payment default under any Loan Asset (without consideration of waivers but after giving effect to any grace or cure period set forth in the Loan Agreement);
(v) any other Obligor default under any Loan Asset for which the Borrower (or agent or required lenders pursuant to the Loan Agreement, as applicable) has elected to exercise any of its rights and remedies under or with respect to such Obligor default under the Loan Asset (including the acceleration of the loan relating thereto);
(vi) a Bankruptcy Event with respect to the related Obligor;
(vii) the occurrence of a Material Modification with respect to such Loan Asset; or
(viii) the Administrative Agent has failed to receive ongoing loan level information as required hereunder (subject to grace periods set forth herein and in underlying Loan Agreements).
“Available Collections” means all cash Collections and other cash proceeds with respect to any Loan Asset deposited in the Collection Account, including, without limitation, all Principal Collections, all Interest Collections, all proceeds of any sale or disposition with respect to such Loan Asset, cash proceeds or other funds received by the Borrower or the Servicer with respect to any Underlying Collateral (including from any guarantors), all other amounts on deposit in the Collection Account from time to time, and all proceeds of Permitted Investments with respect to the Collection Account.
“Availability” as of any date of determination, means the positive difference, if any, of (i) Maximum Availability  minus  (ii) Advances Outstanding.
“Average Life” means, for any Loan Asset, as of any date of determination, the quotient of (i) the amount of each Scheduled Payment of principal to be paid after such date of determination multiplied by the number of years (rounded to the nearest hundredth) from such date of determination until such Scheduled Payment of principal is due, divided by (ii) the Outstanding Principal Balance of such Loan Asset.
 
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“Backup Servicer” means Wells Fargo Bank, National Association, not in its individual capacity, but solely as Backup Servicer, its successor in interest pursuant to  Section 7.03  or such Person as shall have been appointed as Backup Servicer pursuant to  Section 7.05 .
“Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter” means the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter, dated as of March 22, 2013, by and among the Servicer, the Administrative Agent, the Backup Servicer, the Account Bank, the Collateral Custodian and the Collateral Administrator, as such letter may be amended, modified, supplemented, restated or replaced from time to time.
“Backup Servicer Succession Expenses” means the reasonable fees, costs and expenses (including reasonable attorneys’ fees, costs and expenses) incurred by the Backup Servicer in connection with the succession of the Backup Servicer to the obligations of the Servicer hereunder.
“Backup Servicer Termination Notice” has the meaning assigned to that term in Section 7.05.
“Backup Servicing Fee” has the meaning set forth in the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter.
“Bankruptcy Code” means Title 11, United States Code, 11 U.S.C. §§ 101 etseq., as amended from time to time.
“Bankruptcy Event” shall be deemed to have occurred with respect to a Person if either:
(ix) a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person, in each case, under the Bankruptcy Laws, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days (or 30 consecutive days with respect to the Borrower); or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect;
(x) such Person shall commence a voluntary case or other proceeding under any Bankruptcy Laws now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such Person or all or substantially all of its assets under the Bankruptcy Laws, or shall make any general assignment for the benefit of creditors, or shall fail to, or admit in writing its inability to, pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors or members shall vote to implement any of the foregoing; or
(xi) with respect to an insured depository institution, including a national banking association, the appointment of the Federal Deposit Insurance Corporation as a conservator or receiver of such bank pursuant to Section 11(c) of the Federal Deposit Insurance Act.
“Bankruptcy Laws” means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.
 
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“Bankruptcy Proceeding” means any case, action or proceeding before any court or other Governmental Authority relating to any Bankruptcy Event.
“Base Rate” means, on any date, a fluctuating per annum interest rate equal to the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 0.5%;  provided  that in no event shall the Base Rate equal less than 0%.
“Basel II” means the second Basel Accord issued by the Basel Committee on Banking Supervision.
“Basel III” means the consultative papers of The Basel Committee on Banking Supervision of December 2009 entitled “Strengthening the resilience of the banking sector” and “International framework for liquidity risk measurement, standards and monitoring”, in each case together with any amendments thereto.
“Bid Price” means a bid price on a Loan Asset obtained from a bank or a broker-dealer registered under the Securities Exchange Act of 1934 of nationally recognized standing or an Affiliate thereof.
“Bilateral Loan Asset” means any Loan Asset under which the Borrower serves as the sole lender thereunder.
“Borrower” has the meaning assigned to that term in the preamble hereto.
“Borrowing Base” means, as of any date of determination, an amount (calculated under the Borrowing Base Model set forth as  Annex B ) equal to the lesser of:
(i) the sum of (A) the Aggregate Outstanding Loan Balance as of such date, minus (B) the Minimum Credit Enhancement as of such date,  minus  (C) the Excess Concentration Amounts as of such date,  plus  (D) the amount on deposit in the Principal Collection Subaccount as of such date; and
(ii) the Maximum Facility Amount;
provided that, for the avoidance of doubt, any Loan Asset which at any time is no longer an Eligible Loan Asset shall not be included in the calculation of “Borrowing Base”.
“Borrowing Base Certificate” means a certificate setting forth the calculation of the Borrowing Base as of the applicable date of determination substantially in the form of  Exhibit C  hereto, prepared by the Servicer.
“Borrowing Base Deficiency” means, as of any date of determination, the extent to which the aggregate Advances Outstanding on such date exceeds the Borrowing Base.
“Breakage Fee” means, for Advances which are repaid (in whole or in part) on any date other than a Payment Date, the breakage costs, if any, related to such repayment, based upon the assumption that the Lender funded its loan commitment in the London Interbank Eurodollar market and using any reasonable attribution or averaging methods which the Lender deems appropriate and practical, it
 
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hereby being understood that the amount of any loss, costs or expense payable by the Borrower to any Lender as Breakage Fee shall be determined in the respective Lender Agent’s reasonable discretion and shall be conclusive absent manifest error.
“Broadly Syndicated Loan Asset” means a Loan Asset that (i) is a broadly syndicated commercial loan, (ii) has a Tranche Size of $200,000,000 or greater (without consideration of reductions thereon from scheduled amortization payments), and (iii) is either (x) an Initial Unrated Loan Asset, or (y) as of the Cut-Off Date related thereto, has a facility rating (or the Obligor with respect to such Loan Asset has a long-term senior unsecured debt rating) of not less than ‘B-’ (or the equivalent, ‘B3’, in the case of Moody’s), from at least two of the Rating Agencies.
“Business Day” means a day of the year other than (i) Saturday or a Sunday or (ii) any other day on which commercial banks in New York, New York or Atlanta, Georgia or the city in which the offices of the Collateral Custodian and the Account Bank are authorized or required by applicable law, regulation or executive order to close;  provided  that, if any determination of a Business Day shall relate to an Advance bearing interest at LIBOR, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
“Capital Lease Obligations” means, with respect to any entity, the obligations of such entity to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such entity under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Carlyle” means, collectively, (i) TC Group, L.L.C., (ii) TC Group Investment Holdings, L.P., (iii) TC Group Cayman, L.P. and (iv) TC Group Cayman Investment Holdings, L.P., in each case, including any successor entities thereto.
“Carlyle Management” means Carlyle GMS Investment Management, L.L.C., a Delaware limited liability company.
“CGMS” means TCG BDC, Inc. (f/k/a Carlyle GMS Finance, Inc.), a Maryland corporation.
“Change of Control” shall be deemed to have occurred if any of the following occur:
(a) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) or two or more Persons acting in concert shall have acquired “beneficial ownership” (as such term is defined in Sections 13(d)-3 and 13(d)-6 of the Exchange Act), directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, or Control over, Carlyle Management or membership interests representing 35% or more of the combined voting power of all membership interests in either entity in Carlyle Management;
(b) the adoption by the members of either entity in Carlyle Management of a plan or proposal for the liquidation or dissolution of either such entity or of CGMS;  provided  that it shall not be a Change of Control if (i) the board of directors of CGMS elects to liquidate or dissolve CGMS and place its assets into a liquidating trust and (ii) the Administrative Agent and the Lead Arranger provide their consent thereto (such consent to be provided or withheld in the Administrative Agent’s or the Lead Arranger’s sole discretion);
 
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(c) the replacement of greater than 35% of the investment committee or management committee of CGMS with individuals who are not officers, directors or employees of Carlyle Management or its Affiliates,
(d) the failure by Carlyle Management to perform its material obligations under the Management Agreement, the Management Agreement shall fail to be in full force and effect or Carlyle Management ceases to serve as the exclusive investment advisor for CGMS (although Carlyle Management may utilize sub-advisors at its discretion so long as such engagement does not relieve Carlyle Management of its duties and responsibilities under the Management Agreement);
(e) the failure by CGMS to own 100% of the limited liability company membership interests in the Borrower, free and clear of any Lien other than tax-related Permitted Liens or to exercise all power to direct the management policies of the Borrower; or
(f) the dissolution, termination or liquidation in whole or in part, transfer or other disposition, in each case, of all or substantially all of the assets of, CGMS (except any merger or consolidation that does not violate  Section 5.05(a) ).
“Charged-Off Asset” means a Loan Asset with respect to which either of the following occurs: (i) the Servicer has classified such Loan Asset as “charged-off” pursuant to the criteria set forth in the Risk and Collection Policies, or (ii) all or any portion of one or more principal or interest payments (other than in respect of default rate interest thereon) under such Loan Asset remains unpaid for at least 120 days from the original due date for such payment (without giving effect to any Servicer Advances thereon).
“Charged-Off Ratio” means, as of any date of determination, the percentage equivalent of a fraction (i) the numerator of which is equal to (a) the sum of all Outstanding Principal Balance, each multiplied by a factor of 1 minus the applicable Moody’s Recovery Rate, of all Loan Assets that become Charged-Off Assets during the immediately prior 3-Month period, (b) multiplied by 4, and (ii) the denominator of which is equal (a) the sum of the Aggregate Outstanding Principal Balance as of the first day of each Month of such 3-Month period being tested, (b) divided by 3.
“Citi Conduits” means any of (i) CRC Funding, LLC, (ii) CIESCO, LLC, (iii) CHARTA, LLC, and (iv) CAFCO, LLC, together with their respective successors and assigns.
“Citibank” means Citibank, N.A., a national banking association, together with its successors and assigns.
“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.
“Closing Date” means May 24, 2013.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral Administrator” means Wells Fargo Bank, National Association, in its capacity as the Collateral Administrator pursuant to this Agreement.
“Collateral Administrator Fees” means the fees set forth in the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter that are payable to the Collateral Administrator, as such fee letter may be amended, restated, supplemented or otherwise modified from time to time.
 
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“Collateral Administrator Termination Notice” has the meaning assigned to that term in Section 15.05.
“Collateral Agent” means Citibank, not in its individual capacity, but solely as collateral agent pursuant to the terms of this Agreement.
“Collateral Agent Expenses” means the reasonable expenses (including reasonable attorneys’ fees, costs and expenses) and indemnity amounts, in each case payable by the Borrower to the Collateral Agent under the Transaction Documents.
“Collateral Agent Fees” means the fees agreed from time to time between the Collateral Agent and the Borrower that are payable to the Collateral Agent.
“Collateral Agent Termination Notice” has the meaning assigned to that term in Section 11.05.
“Collateral Custodian” means Wells Fargo Bank, National Association, not in its individual capacity, but solely as collateral custodian pursuant to the terms of this Agreement.
“Collateral Custodian Fees” means the fees set forth in the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter that are payable to the Collateral Custodian, as such fee letter may be amended, restated, supplemented or otherwise modified from time to time.
“Collateral Custodian Termination Notice” has the meaning assigned to that term in Section 13.05.
“Collateral Portfolio” means all right, title, and interest (whether now owned or hereafter acquired or arising, and wherever located) of the Borrower in all assets of the Borrower, including the property identified below in  clauses (i) through  (vi)  and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, contract rights, general intangibles, instruments, certificates of deposit, certificated securities, uncertificated securities, financial assets, securities entitlements, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, software, supporting obligations, accessions, or other property consisting of, arising out of, or related to any of the following, (but excluding in each case any Retained Interest and the Excluded Amounts):
(xii) the Loan Assets, and all monies due or to become due in payment under such Loan Assets on and after the related Cut-Off Date, including, but not limited to, all Available Collections;
(xiii) the Portfolio Assets with respect to the Loan Assets referred to in clause (i);
(xiv) the Collection Account, the Interest Collection Subaccount, the Principal Collection Subaccount, and any other subaccount thereof, and all Permitted Investments purchased with funds on deposit in any such account; and
(xv) all income and Proceeds of the foregoing;
 
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provided, that the Collateral Portfolio does not include (A) any Loan Assets that were sold, substituted or repurchased in accordance with the requirements of  Section 2.07  hereof effective as of its applicable Release Date, and (B) any deposit account or securities account of the Borrower (other than, for the avoidance of doubt, the Collection Account, the Interest Collection Subaccount, the Principal Collection Subaccount, or any other subaccount thereof) into which amounts payable to the Borrower pursuant to  Section 2.04(a)(xiii) ,  Section 2.04(b)(vii)  or  Section 2.04(c)(ix)  are deposited or held, and all amounts and investments on deposit in any such account.
“Collateral Quality Improvement” means, as of any date of determination, (x) in respect of any Collateral Quality Test that is not then satisfied, that the degree of non-compliance with such Collateral Quality Test is either not made worse or is improved after giving effect to such transaction proposed under  Section 2.07  or such Advance proposed to be funded in connection with the addition of an Asset to the Collateral Portfolio, and (y) in respect of any Collateral Quality Test that is satisfied prior to such Substitution or Advance, that such test remains satisfied after giving effect to such Substitution or Advance.
“Collateral Quality Test” means the Weighted Average Life Test, the Weighted Average Spread Test, the Diversity Score Test, the WARF Test and the WARR Test.
“Collection Account” means a trust account (account number 46455700 at the Account Bank) in the name of the Borrower for the benefit of and under the “control” (within the meaning of Section 9-104 of the UCC or 9-106 /8-106 of the UCC, as applicable) of the Collateral Agent for the benefit of the Secured Parties, and each subaccount that may be established from time to time, including the Interest Collection Subaccount and Principal Collection Subaccount;  provided  that, subject to the rights of the Collateral Agent hereunder with respect to such funds, the funds deposited therein (including any interest and earnings thereon) from time to time shall constitute the property and assets of the Borrower, and the Borrower shall be solely liable for any Taxes payable with respect to the Collection Account.
“Collection Account Agreement” means that certain Collection Account Agreement, dated the Closing Date, among the Borrower, the Servicer, the Account Bank, the Administrative Agent and the Collateral Agent, governing the Collection Account and which permits the Collateral Agent on behalf of the Secured Parties to direct disposition of the funds in the Collection Account, as such agreement may be amended, modified or supplemented from time to time in accordance with its terms.
“Collection Date” means the date on which the aggregate outstanding principal amount of the Advances have been indefeasibly repaid in full and all Yield and Fees and all other Obligations have been indefeasibly paid in full (other than contingent obligations that survive the termination of any Transaction Document), the commitments of the Lenders hereunder have been terminated and the Borrower shall have no further right to request any additional Advances.
“Collections” means all collections and other cash proceeds with respect to any Loan Asset (including, without limitation, payments on account of interest, principal, prepayments, fees, guaranty payments and all other amounts received in respect of such Loan Asset), all Recoveries, all Insurance Proceeds, and proceeds of any liquidations, sales or dispositions, in each case, attributable to such Loan Asset, and all other proceeds or other funds of any kind or nature received by the Borrower or the Servicer with respect to any Underlying Collateral.
 
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“Commercial Paper Notes” means, any short-term promissory notes of any Conduit Lender or a participant thereof issued by such Conduit Lender or participant thereof in the commercial paper market.
“Commitment” means, with respect to each Liquidity Bank and Institutional Lender as of any date of determination, the Commitment of such Person listed on Annex A as in effect at such time.
“Commitment Termination Date” means the earliest to occur of (i) the Scheduled Commitment Termination Date, (ii) the date of the declaration, or automatic occurrence, of an Event of Default (unless waived or rescinded), or (iii) the occurrence of the termination of this Agreement pursuant to  Section 2.18(d)  hereof.
“Competitor” means the Persons listed in the Transaction Fee Letter as “Competitors” of Carlyle.
“Concentration Limits” means, as of any date of determination prior to (x) the Commitment Termination Date with respect to all items below and (y) the Final Maturity Date with respect to the concentration limit set forth in  clause (d) below, for purposes of determining the Excess Concentration Amount and the Borrowing Base, the concentration limitations set forth below:
(a) the sum of Outstanding Loan Balances of all Eligible Loan Assets with Obligors:
 
 	(i)	in the Industry with the highest aggregate Outstanding Loan Balances shall not exceed 20% of the Concentration Test Amount;	
 
 	(ii)	in the Industry with the second highest aggregate Outstanding Loan Balances shall not exceed 15% of the Concentration Test Amount;	
 
 	(iii)	in the Industry with the third highest aggregate Outstanding Loan Balances shall not exceed 12.5% of the Concentration Test Amount; and	
 
 	(iv)	in any Industry (other than the Industries considered under clauses (i), (ii) and (iii) above) shall not exceed 10% of the Concentration Test Amount;	
(b) the sum of Outstanding Loan Balances of all Fixed Rate Loan Assets that are Eligible Loan Assets shall not exceed 10% of the Concentration Test Amount (or such greater percentage to accommodate the non-exclusion by this clause (b) of certain Fixed Rate Loan Assets subject to Hedging Agreements (which, for the avoidance of doubt and in accordance with the definition of “Hedging Agreement”, the Administrative Agent shall have approved of in writing);
(c) following the end of the Ramp-Up Period, the sum of Outstanding Loan Balances of all First Lien Loan Assets that are Eligible Loan Assets shall not be less than 70% of the AOLB;
(d) the sum of Outstanding Loan Balances of Eligible Loan Assets that are:
 
 	(i)	Second Lien Loan Assets (other than Last Out Senior Secured Loan Assets) shall not exceed 15% of the Concentration Test Amount; and	
 
 	(ii)	Last Out Senior Secured Loan Assets shall not exceed 10% of the Concentration Test Amount;	
 
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(e) the sum of Outstanding Loan Balances of all Discount Loan Assets that are Eligible Loan Assets shall not exceed 20% of the Concentration Test Amount;
(f) the sum of Outstanding Loan Balances of all Eligible Loan Assets that currently maintain a credit rating of (i) CCC+ or CCC from S&P or Fitch, or (ii) Caa1 or Caa2 from Moody’s, shall not exceed 25% of the Concentration Test Amount;
(g) the sum of Outstanding Loan Balances of all Eligible Loan Assets as to which the highest rating assigned by any Rating Agency is ‘CCC+’ or ‘CCC’ (or the equivalent, ‘Caa1’ or ‘Caa2,’ in the case of Moody’s) shall not exceed 15% of the Concentration Test Amount;
(h) the sum of Outstanding Loan Balances of all Eligible Loan Assets:
 
 	(i)	for all Foreign Eligible Obligors shall not exceed 10% of the Concentration Test Amount;	
 
 	(ii)	for all Foreign Eligible Obligors formed and existing under the laws of any of Germany, Ireland, Sweden, Switzerland and France, shall not exceed 7.5% of the Concentration Test Amount; and	
 
 	(iii)	for all Foreign Eligible Obligors formed and existing under the laws of France shall not exceed 5% of the Concentration Test Amount.	
(i) the sum of Outstanding Loan Balances of all Eligible Loan Assets that are:
 
 	(i)	Unrated Loan Assets shall not exceed 5% of the Concentration Test Amount; and;	
 
 	(ii)	Initial Unrated Loan Assets shall not exceed 10% of the Concentration Test Amount”;	
(j) the sum of Outstanding Loan Balances of all Eligible Loan Assets that do not provide for scheduled payments of interest in cash on at least an every three month basis shall not exceed 10% of the Concentration Test Amount;
(k) the sum of Outstanding Loan Balances of all Eligible Loan Assets in which the Borrower holds a participation interest (excluding any Permitted Merger Participations)  shall not exceed 5% of the Concentration Test Amount;
(l) the sum of Outstanding Loan Balances of the Eligible Loan Assets
 
 	(i)	of each Obligor Group with the three highest Outstanding Loan Balances shall each not exceed (x) during the Ramp-Up Period, 5% of the Concentration Test Amount, and (y) at all times thereafter, 6.67% of the Concentration Test Amount; and	
 
 	(ii)	of each Obligor Group not included in clause (i) above shall each not exceed 5% of the Concentration Test Amount;	
 
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(m) the sum of Outstanding Loan Balances of all DIP Loan Assets that are Eligible Loan Assets shall not exceed 10% of the Concentration Test Amount;
(n) the sum of Outstanding Loan Balances of all Bilateral Loan Assets that are Eligible Loan Assets shall not exceed 10% of the Concentration Test Amount;
(o) the sum of Outstanding Loan Balances of all Revolving Loan Assets (which definition includes delayed draw term loans) that are Eligible Loan Assets shall not exceed 10% of the Concentration Test Amount;
(p) the sum of Outstanding Loan Balances of all Foreign Currency Loan Assets denominated in a currency other than Canadian Dollars that are Eligible Loan Assets shall not exceed 15% of the Concentration Test Amount;
(q) the sum of Outstanding Loan Balances of all Foreign Currency Loan Assets denominated in Canadian Dollars that are Eligible Loan Assets shall not exceed 10% of the Concentration Test Amount;
(r) the sum of Outstanding Loan Balances of all Eligible Loan Assets for which the Senior Debt/EBITDA Ratio (determined as of its related Cut-Off Date) of the related Obligor (i) with respect to all Large-Market Loan Assets, is greater than 4.50:1.00,  plus  (ii) with respect to all Mid-Market Loan Assets, is greater than 3.75:1.00, shall not exceed 15% of the Concentration Test Amount;
(s) the sum of Outstanding Loan Balances of all Unitranche Loan Assets that are Eligible Loan Assets:
 
 	(i)	for which the Total Debt/EBITDA Ratio (determined as of its related Cut-Off Date) of the related Obligor (and for which the Obligor thereunder has no other senior Indebtedness outstanding) (A) with respect to Unitranche Loan Assets that are Large-Market Loan Assets, is greater than 5.25:1.00,  plus  (B) with respect to Unitranche Loan Assets that are Mid-Market Loan Assets, is greater than 4.50:1.00, shall not exceed 15% of the Concentration Test Amount; and	
 
 	(ii)	that are included in sub-clause (i)(B) of this clause (s) shall not exceed 10% of the Concentration Test Amount;	
(t) the sum of Outstanding Loan Balances of all Eligible Loan Assets for which the Total Debt/EBITDA Ratio (determined as of its related Cut-Off Date) of the related Obligor (other than an Obligor subject to the test under clause (s) above) (i) with respect to all Loan Assets, is greater than 6.00:1.00 shall not exceed 10% of the Concentration Test Amount,  and (ii) with respect to all Mid-Market Loan Assets, is greater than 5.00:1.00, shall not exceed 5% of the Concentration Test Amount;
(u) the sum of Outstanding Loan Balances of all Eligible Loan Assets for which the EBITDA of the related Obligor (determined as of its related Cut-Off Date) is less than $15,000,000 shall not exceed 10% of the Concentration Test Amount;
(v) the sum of Outstanding Loan Balances of all HLT Loan Assets Obligor (determined as of its related Cut-Off Date) that are Eligible Loan Assets shall not exceed 15% of the Concentration Test Amount;
 
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(w) the sum of Outstanding Loan Balances of Senior B Loan Assets that are Eligible Loan Assets shall not exceed 15% of the Concentration Test Amount;
(x) the sum of Outstanding Loan Balances of all Cov-Lite Loan Assets that are Eligible Loan Assets (including all Special Cov-Lite Loan Assets) shall not exceed 30% of the Concentration Test Amount;
(y) the sum of Outstanding Loan Balances of all Special Cov-Lite Loan Assets that are Eligible Loan Assets shall not exceed 10% of the Concentration Test Amount;
(z) the sum of Outstanding Loan Balances of Second Lien Loan Assets that are Eligible Loan Assets and have an original term to maturity in excess of 7 years shall not exceed 7.5% of the Concentration Test Amount;  and
(aa) the sum of Outstanding Loan Balances of PIK Loan Assets that are Eligible Loan Assets shall not exceed 5% of the Concentration Test Amount ; and
(bb)the sum of Outstanding Loan Balances of First Lien Loan Assets that are Eligible Loan Assets and are subject to a Qualifying Agreement Among Lenders shall not exceed 25% of the Concentration Test Amount .
“Concentration Test Amount” has the meaning specified in the Transaction Fee Letter.
“Conduit Lender” means each of the Citi Conduits and each other commercial paper conduit that may from time to time become a Conduit Lender hereunder by executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower as contemplated by  Section 12.04(a) .
“Conduit Trustee” means, with respect to any Conduit Lender, a trustee or collateral agent for the benefit of the holders of the Commercial Paper Notes or other senior indebtedness of such Conduit Lender appointed pursuant to such Conduit Lender’s program documents.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.
“Contribution Agreement” means that certain Contribution Agreement, dated as of the Closing Date, among CGMS, as the contributor of Loan Assets, and the Borrower, as the contributee, as applicable, as such agreement may be amended, modified, waived, supplemented, restated or replaced from time to time.
“Controlling Sponsor Equity” means the combined equity investment (or combined implied equity investment, as applicable) in an Obligor held by not more than four Persons and their respective Affiliates representing (i) at least 40% of the capital structure of the Obligor, (ii) at least 50.1% of the combined voting power of all stock or membership interests in such Obligor, and (iii) at least $18,370,000 in value as reasonably determined by the Servicer as of the related Cut-Off Date.
“Cov-Lite Loan Asset” means a Loan Asset that does not (x) contain any financial covenants or (y) require the Obligor thereunder to comply with any Maintenance Covenant (regardless of whether compliance with one or more Incurrence Covenants is otherwise required by the Loan Documents for
 
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such Loan Asset). For the purposes of this definition, “Maintenance Covenant” means a covenant by the Obligor to comply with one or more financial covenants during each reporting period, whether or not such Obligor has taken any specified action, and “ Incurrence Covenant ” means a covenant by the Obligor to comply with one or more financial covenants only upon the occurrence of certain actions of the Obligor, including a debt issuance, dividend payment, share purchase, merger, acquisition or divestiture.
“CP Rate” means for any Remittance Period for any Advances made by a Conduit Lender, the per annum rate equivalent to the weighted average of the per annum rates paid or payable by such Conduit Lender from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of the Commercial Paper Notes issued by such Conduit Lender during such period, as determined by such Conduit Lender that are allocated, in whole or in part, by such Conduit Lender (or such Conduit Lender’s Lender Agent on behalf of such Conduit Lender) to fund the purchase or maintenance of Advances during such Remittance Period as determined by such Conduit Lender (or such Conduit Lender’s Lender Agent on behalf of such Conduit Lender) and reported to the Borrower and the Servicer, which rates shall reflect and give effect to the commissions of placement agents and dealers in respect of such Commercial Paper Notes, to the extent such commissions are allocated, in whole or in part, to such Commercial Paper Notes by such Conduit Lender (or such Conduit Lender’s Lender Agent on behalf of such Conduit Lender) plus without duplication of other interest and costs allocated by such Conduit Lender to fund or maintain the loans associated with the funding by such Conduit Lender of small or odd lot amounts that are not funded with Commercial Paper Notes,  provided, however , that that (i) if any component of such rate is a discount rate, in calculating the “CP Rate” for such Remittance Period the Conduit Lender (or such Conduit Lender’s Lender Agent on behalf of such Conduit Lender) shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum; (ii) the CP Rate with respect to Advances funded by participants of such Conduit Lender shall be the same rate as in effect from time to time on Advances or portions thereof that are not funded by a participant; and (iii) if all of the Advances maintained by such Conduit Lender are funded by participants of such Conduit Lender, then the CP Rate shall be such Conduit Lender’s pool funding rate in effect from time to time for its largest size pool of transactions which settles monthly.
“CQI Advance Determination Date” means, with respect to any Advance related to a Loan Asset, either (i) if the Borrower delivered its documented, enforceable and binding commitment to advance funds with respect to such Loan Asset less than fifteen Business Days prior to the Advance date related to such Loan Asset, the date that such commitment was provided, or (ii) in all other cases, the date of the Advance.
“CQT Matrix Trigger Date” means the first date after the Closing Date on which (i) the Diversity Score equals or is greater than 20, (ii) the Weighted Average Spread equals or exceeds 3.50%, and (iii) the Weighted Average Recovery Ratio equals or exceeds 48%.
“CQT Non-Qualification Period” means any period of time during which any Collateral Quality Test is not satisfied.
“Credit Revised Loan Asset” means any Loan Asset identified to the Administrative Agent by the Servicer in a Servicer Report or Borrowing Base Certificate that, in the reasonable judgment of the Servicer, has either (i) significantly improved in credit quality, or (ii) has a significant risk of declining in credit quality and, with the passage of time, suffering an Assigned Value Adjustment Event, in each case, since its related Cut-Off Date.
 
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“Cure Date” has the meaning assigned to that term in Section 2.07(e).
“Cut-Off Date” means, with respect to each Loan Asset, either (i) the date (which may be the Closing Date) such Loan Asset is Pledged and an Advance based on a Borrowing Base including such Loan Asset is funded hereunder, or (ii) with respect to a Loan Asset that is part of the Collateral Portfolio and either (A) the term of this Agreement is extended, or (B) the term of the Loan Agreement thereunder has been extended during the Revolving Period, the effective date of the amendment extending this Agreement or the term of such Loan Agreement, as applicable (the evaluation as of such Cut-Off Date being in accordance with the Servicing Standard and the valuation practices of the Servicer and relying upon the most recent compliance certificates and financial information provided by each Obligor under  Section 6.08(f)  or otherwise).
“Daily LIBOR” means, for any day during the Remittance Period, with respect to any Advance (or portion thereof) other than a Fixed LIBOR Advance (a) the rate  per annum  appearing on Reuters Screen LIBOR01 Page (or any successor or substitute page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, for such day,  provided , if such day is not a Business Day, the immediately preceding Business Day, for a one-month maturity; and (b) if no rate specified in  clause (a)  of this definition so appears on Reuters Screen LIBOR01 Page (or any successor or substitute page), the interest rate  per annum  at which dollar deposits of $5,000,000 and for a one-month maturity are offered by the principal London office of Citibank in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, for such day;  provided  that in no event shall Daily LIBOR equal less than 0%.
“Daily LIBOR Advance” means an Advance to which the Daily LIBOR is applicable.
“Delinquency Ratio” means, as of any Reporting Date, (x) the sum of the Monthly Delinquency Ratio on such Determination Date and for each of the two preceding Determination Dates (or such lesser number as shall have elapsed as of such Reporting Date), divided by (y) 3 (or 1 plus the corresponding lesser number of Reporting Dates included in the calculations described herein).
“Default Excess” means, with respect to any Defaulting Lender Group, an amount equal to (i) such Defaulting Lender Group’s Pro Rata Share of Advances Outstanding (calculated as if all Defaulting Lenders (including the Defaulting Lenders of such Defaulting Lender Group) had funded all of their respective Advances, including Advances not funded by such Defaulting Lender which resulted in such Defaulted Lender being deemed a Defaulting Lender and part of a Defaulting Lender Group),  minus  (ii) the aggregate outstanding principal amount of Advances Outstanding of such Defaulting Lender Group.
“Default Period” means, with respect to any Defaulting Lender Group, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates: (i) the date on which all Commitments are cancelled or terminated or the Obligations are declared or become immediately due and payable; (ii) with respect to any Funding Default (other than any such Funding Default arising pursuant to clause (iv) of the definition of Defaulting Lender), the date on which (A) the Default Excess with respect to such Defaulting Lender Group has been reduced to zero (whether by the funding by such Defaulting Lender Group of all payments resulting in such Funding Default of such Defaulting Lender, the non-pro rata application of any voluntary or mandatory prepayments of the Loans in accordance with the terms of this Agreement, or any combination thereof) and (B) such Defaulting Lender has delivered to the Administrative Agent a written reaffirmation of its intention to honor its obligations under this Agreement with respect to its Commitment; and (iii) the date on which the Borrower, the Administrative Agent, and the Majority Lenders waive all Funding Defaults of such Defaulting Lender in writing.
 
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“Defaulting Lender” means any Liquidity Bank or Institutional Lender, as determined by the Administrative Agent, that (i) fails to make available its ratable share of any Advance as required to be funded under  Section 2.02(b)  or fails to make any other payment or provide funds to the Administrative Agent as required under this Agreement, and such failure is not cured within two Business Days; (ii) has notified the Administrative Agent, the Borrower or the Servicer in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or under other agreements in which it commits to extend credit; (iii) has failed, within one Business Day after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund Advances under this Agreement; or (iv) becomes, or has a parent company that becomes, the subject of any Bankruptcy Event.
“Defaulting Lender Group” means any Lender Group that includes a Defaulting Lender.
“Delinquent Asset” means a Loan Asset that is not a Charged-Off Asset and as to which either of the following has occurred: (i) the Servicer has classified such Loan Asset, as “delinquent” pursuant to the criteria set forth in the Risk and Collection Policies, or (ii) all or any portion of one or more principal or interest payments (other than in respect of default rate interest) under such Loan Asset remains unpaid for at least 60 days from the original due date for such payment (without giving effect to any Servicer Advances thereon).
“Demand” means a written demand on the Unpledged Capital Commitments pursuant to and in compliance with the requirements set forth in the subscription agreement of CGMS that has been received by the shareholders of CGMS.
“Determination Date” means the fifth Business Day after the end of each Month.
“DIP Loan Asset” means any Loan Asset to an Obligor that is a Chapter 11 debtor under the Bankruptcy Code which is permitted to be owned by the Borrower under the Risk and Collection Policies and also satisfies the following criteria: (a) the Loan Agreement is duly authorized by a final order of the applicable bankruptcy or federal district court under the provisions of subsection (b), (c) or (d) of 11 U.S.C. § 364, (b) the Obligor’s bankruptcy case is still pending as a case under the provisions of Chapter 11 of Title 11 of the Bankruptcy Code and has not been dismissed or converted to a case under the provisions of Chapter 7 of Title 11 of the Bankruptcy Code, (c) the Obligor’s obligations under such Loan Agreement have not been (i) disallowed, in whole or in part, or (ii) subordinated, in whole or in part, to the claims or interests of any other Person under the provisions of 11 U.S.C. § 510, (d) the Loan Asset is secured and the liens and security interests granted by the applicable federal bankruptcy or district court in relation to the Loan have not been subordinated, in whole or in part, to the liens or interests of any other lender under the provisions of 11 U.S.C. § 364(d) or otherwise, (e) the Obligor is not in default on its payment obligations under the Loan Asset and (f) neither the Obligor nor any party in interest has filed a Chapter 11 plan with the applicable federal bankruptcy or district court that, upon confirmation, would (i) disallow or subordinate the Loan Asset and obligations under the Loan Agreement, in whole or in part, (ii) subordinate, in whole or in part, any lien or security interest granted in connection with such Loan Asset, (iii) fail to provide for the repayment, in full and in cash, of the Loan Asset upon the effective date of such plan or (iv) otherwise impair, in any manner, the claim evidenced
 
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by the Loan Asset and related Loan Agreement. For the purposes of this definition, an order is a “final order” if the applicable period for filing a motion to reconsider or notice of appeal in respect of a permanent order authorizing the obligor to obtain credit has lapsed and no such motion or notice has been filed with the applicable federal bankruptcy or district court or the clerk thereof.
“Disbursement Request” means a disbursement request from the Borrower to the Administrative Agent and the Collateral Agent in the form attached hereto as  Exhibit D  in connection with a disbursement request from the Principal Collection Subaccount in accordance with  Section 2.20 .
“Discount Loan Asset” means a Loan Asset that (i) qualifies under all criteria set forth on Schedule III except for clause I(c)(i) thereof, and (ii) has an Advance Date Assigned Value, and maintains an Assigned Value at all times thereafter, of not less than the greater of (x) 70% of the Outstanding Principal Balance thereof, and (y) 90% of the Applicable Index; provided  that a Loan Asset initially designated as a Discount Loan Asset that subsequently obtains an Assigned Value of greater than or equal to 90% for more than 3 consecutive Business Days shall no longer be considered a Discount Loan Asset.
“Discretionary Sale” has the meaning assigned to that term in Section 2.07(b).
“Dispute” means any dispute, claim, offset or defense (other than the discharge in bankruptcy of an Obligor) to the payment of any Loan Asset included in the Collateral Portfolio (including, without limitation, a defense based on such Loan Asset (or the Loan Agreement evidencing such Loan Asset) not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms);  provided,  that a Dispute shall not arise solely as a result of a Loan Asset being uncollectible due to the Obligor’s insolvency or financial inability to pay.
“Diversity Score” means a single number that indicates Collateral Portfolio concentration in terms of both issuer and industry concentration. The Diversity Score for the Loan Assets is calculated as set forth in  Annex C .
“Diversity Score Test” means, as of any date of determination with respect to Eligible Loan Assets in the Collateral Portfolio, a test that is satisfied if the Diversity Score is equal to or greater than (i) if such date of determination is prior to the CQT Matrix Trigger Date, 18, or (ii) if such date of determination is on or after the CQT Matrix Trigger Date, the “Minimum Diversity Score” selected by the Servicer by reference to the matrix set forth on  Annex D .
“Dodd-Frank” means the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203 (2010).
“EBITDA” means, with respect to any period and any Loan Asset, the meaning of “EBITDA”, “Adjusted EBITDA” or any comparable definition as set forth in, or as calculated in connection with, the Underwriting Memoranda for such Loan Asset and, at any time after the Cut-Off Date and after receipt by the Servicer of such Obligor’s most recent financial reporting under the applicable Loan Agreement, as set forth in the Loan Agreement for each such Loan Asset (together with all add-backs and exclusions as designated in such Loan Agreement), and in any case that “EBITDA”, “Adjusted EBITDA” or such comparable definition is not defined in such Underwriting Memoranda or such Loan Agreement, as applicable, an amount, for the principal obligor on such Loan Asset and any of its parents or Subsidiaries that are obligated pursuant to the Loan Agreement for such Loan Asset (determined on a consolidated basis without duplication in accordance with GAAP) equal to earnings from continuing operations for
 
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such period plus interest expense, income taxes and unallocated depreciation and amortization for such period (to the extent deducted in determining earnings from continuing operations for such period), and any other item the Borrower and the Administrative Agent mutually deem to be appropriate.
“Eligible Assignee” means (i) a Liquidity Bank or any of its Affiliates, (ii) any Person managed by a Liquidity Bank or any of its Affiliates, or (iii) any financial or other institution acceptable to the Administrative Agent (other than the Borrower or an Affiliate thereof) and that, prior to the declaration, or automatic occurrence, of an Event of Default (unless waived or rescinded), is not a Competitor.
“Eligible Bid” means a bid made in good faith (and acceptable as a valid bid in the Administrative Agent’s reasonable discretion) by a bidder for all or any portion of the Collateral Portfolio in connection with a sale of the Collateral Portfolio in whole or in part pursuant to  Section 8.02(i) .
“Eligible Loan Asset” means, at any time, a Loan Asset that (i) is a First Lien Broadly Syndicated Loan Asset, First Lien Middle Market Loan Asset, Unitranche Loan Asset, Second Lien Broadly Syndicated Loan Asset or Second Lien Middle Market Loan Asset, and (ii) each of the representations and warranties contained in  Section 4.02  hereto is true and correct and the standards set forth  Schedule III  are satisfied in full.
“Environmental Laws” means any and all foreign, federal, State and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, interpretations (with force of law) and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials. Environmental Laws include, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601  et seq. ), the Hazardous Material Transportation Act (49 U.S.C. § 331  et seq. ), the Resource Conservation and Recovery Act (42 U.S.C. § 6901  et seq. ), the Federal Water Pollution Control Act (33 U.S.C. § 1251  et seq. ), the Clean Air Act (42 U.S.C. § 7401  et seq. ), the Toxic Substances Control Act (15 U.S.C. § 2601  et seq. ), the Safe Drinking Water Act (42 U.S.C. § 300,  et seq. ), the Environmental Protection Agency’s regulations relating to underground storage tanks (40 C.F.R. Parts 280 and 281), and the Occupational Safety and Health Act (29 U.S.C. § 651  et seq. ), and the rules and regulations thereunder, each as amended or supplemented from time to time.
“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means (a) any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as a specified Person, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with such Person, or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as such Person, any corporation described in  clause (a)  above or any trade or business described in  clause (b)  above.
“Eurodollar Disruption Event” means the occurrence of any of the following: (a) any Lender Agent shall have notified the Administrative Agent of a determination by such Lender Agent or any of its assignees that it would be contrary to law or to the directive of any central bank or other Governmental Authority (whether or not having the force of law) to obtain United States dollars in the London interbank market to fund any Advance, (b) any Lender Agent shall have notified the Administrative
 
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Agent of the inability, for any reason, of such Lender Agent or any Lender in such Lender Agent’s Lender Group or any of its respective assignees to determine LIBOR, (c) any Lender Agent shall have notified the Administrative Agent of a determination by such Lender Agent or any of its respective assignees that the rate at which deposits of United States dollars are being offered to any Lender in such Lender Agent’s Lender Group or any of its respective assignees in the London interbank market does not accurately reflect the cost to such Lender or its assignee of making, funding or maintaining any Advance or (d) any Lender Agent shall have notified the Administrative Agent of the inability of a Lender in such Lender Agent’s Lender Group or any of its respective assignees to obtain United States dollars in the London interbank market to make, fund or maintain any Advance.
“Event of Default” has the meaning assigned to that term in Section 8.01.
“Excepted Persons” has the meaning assigned to that term in Section 12.13(a).
“Excess Concentration Amount” means, as of any date of determination prior to the Commitment Termination Date, the sum of all amounts of Outstanding Loan Balance of all Eligible Loan Assets that exceed each of the Concentration Limits (or, in the case of  clause (c)  of the definition of “Concentration Limits”, the amount of the deficiency), as applied sequentially and without duplication in accordance with the Borrowing Base Model set forth in  Annex B .
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Amounts” means (a) any amount received in the Collection Account with respect to any Loan Asset included as part of the Collateral Portfolio, which amount is attributable to the payment of any Tax, fee or other charge imposed by any Governmental Authority on such Loan Asset or on any Underlying Collateral and (b) any amount received in the Collection Account representing (i) any amount representing a reimbursement of insurance premiums, (ii) any escrows relating to Taxes, insurance and other amounts in connection with Loan Assets which are held in an escrow account for the benefit of the Obligor and the secured party pursuant to escrow arrangements under a Loan Agreement, and (iii) any amount received in the Collection Account with respect to any Loan Asset retransferred or substituted for upon the occurrence of a Warranty Event or that is otherwise replaced by a Substitute Eligible Loan Asset, or that is otherwise sold or transferred by the Borrower pursuant to  Section 2.07 , to the extent such amount is attributable to a time after the effective date of such replacement, transfer or sale.
“Excluded Taxes” means, with respect to any payment made by or on account of any obligation of the Borrower or the Servicer under this Agreement, any of the following Taxes imposed on or with respect to a Lender (a) any income or franchise Taxes imposed on (or measured by) net income and any branch profits Taxes, in each case by (i) the United States of America, (ii) the jurisdiction under the laws of which such Lender is organized, in which its principal office is located, or in which its applicable lending office is located or (iii) a jurisdiction as the result of any other present or former connection between such Lender and the jurisdiction imposing such Tax (other than connections arising from such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any loan document, or sold or assigned an interest in any loan or loan document), (b) in the case of a Lender, US. Federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment, or (ii) such Lender changes its lending office, except in each case, to the extent that, pursuant to  Section 2.11 ,
 
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amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to Lender immediately before it changed its lending office, (c) Taxes attributable to such Lender’s failure to comply with  Section 2.11 , and (d) any Taxes imposed under FATCA.
“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code as in effect on the date hereof (or any amended version that is substantively comparable) and any regulations promulgated thereunder or official interpretations thereof.
“FDIC” means the Federal Deposit Insurance Corporation, and any successor thereto.
“Federal Funds Rate” means, for any period, a fluctuating interest per annum rate equal, for each day during such period, to the weighted average of the overnight federal funds rates as in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by the Administrative Agent (or, if such day is not a Business Day, for the next preceding Business Day), or, if for any reason such rate is not available on any day, the rate determined, in the sole discretion of the Administrative Agent, to be the rate at which overnight federal funds are being offered in the national federal funds market at 9:00 a.m. on such day.
“Fee Letter” means the Transaction Fee Letter, the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter, and each fee letter agreement that shall be entered into by and among the Borrower, the Servicer, the applicable Lender and its related Lender Agent in connection with the transactions contemplated by this Agreement, in each case, as amended, modified, waived, supplemented, restated or replaced from time to time.
“Fees” means (i) the Undrawn Fee and (ii) the fees payable to each Lender or Lender Agent pursuant to the terms of the Fee Letters.
“Final Maturity Date” means the earliest to occur of (i) the Scheduled Maturity Date, (ii) the date of the automatic occurrence of an Event of Default, or the date of the declaration of the Final Maturity Date upon the occurrence of an Event of Default, or (iii) the occurrence of the termination of this Agreement pursuant to  Section 2.18(d)  hereof.
“Financial Asset” has the meaning specified in Section 8-102(a)(9) of the UCC.
“Financial Covenants” means the financial covenants (i) of the Borrower set forth in Section 5.03, and (ii) of CGMS set forth in clauses  (i) ,  (j)  and  (k)  of the defined term “Servicer Termination Event”.
“Financial Sponsor” means any Person, including any Subsidiary of such Person, whose principal business activity is acquiring, holding, and selling investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate management, books and records and bank accounts, whose operations are not integrated with one another and whose financial condition and creditworthiness are independent of the other companies so owned by such Person.
“First Lien Broadly Syndicated Loan Asset” means a Broadly Syndicated Loan Asset that is a First Lien Loan Asset.
 
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“First Lien Loan Asset” means any Loan Asset(i) that (i) is secured by a valid and perfected first priority Lien on substantially all of the Obligor’s assets constituting Underlying Collateral for the Loan Asset, subject to any expressly permitted liens under the applicable Loan Agreement for such Loan Asset, including those set forth in “permitted liens” as defined in such Loan Agreement, or such comparable definition if “permitted liens” is not defined therein, (ii) that  provides that the payment obligation of the Obligor on such Loan Asset is either senior to, or  pari passu  with, and is not (and cannot by its terms become) subordinate in right of payment to all other Indebtedness of such Obligor, (iii) for which Liens on the assets constituting Underlying Collateral securing any other outstanding Indebtedness of the Obligor (including Liens securing Second Lien Loan Assets, but otherwise excluding expressly permitted liens referred to above)  is are either (x)  expressly subject to and contractually or structurally subordinate to the priority claim under the Loan Agreement governing such Loan Asset or the related documentation of the “first lien” lenders under such “First Lien Loan Asset” or (y) subject to a Qualifying Agreement Among Lenders , and (iv) is not a Last Out Senior Secured Loan Asset;  provided,  that a Senior B Loan Asset shall be considered a First Lien Loan Asset.
“Fitch” means Fitch Ratings, Inc. (or its successors in interest).
“First Lien Middle Market Loan Asset” means a Middle Market Loan Asset that is a First Lien Loan Asset.
“Fixed LIBOR” means, for any day during each Fixed Period, with respect to any Fixed LIBOR Advance (a) the rate  per annum  appearing on Reuters Screen LIBOR01 Page (or any successor or substitute page) as the London interbank offered rate for deposits in dollars for a period equal to such Fixed Period at approximately 11:00 a.m., London time, two Business Days prior to the beginning of such Fixed Period; and (b) if the rate specified in clause (a) of this definition does not so appear on Reuters Screen LIBOR01 Page (or any successor or substitute page), the interest rate  per annum  at which dollar deposits of $5,000,000 and for such Fixed Period are offered by the principal London office of Citibank in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, for such day;  provided  that in no event shall Fixed LIBOR equal less than 0%.
“Fixed LIBOR Advance” means an Advance to which the Fixed LIBOR is applicable.
“Fixed Period” means, with respect to any Fixed LIBOR Advance, (a) if the CP Rate is not available from a Conduit Lender that is funding any Advance or portion thereof through the issuance of Commercial Paper Notes, (x) as to the initial Fixed Period for such Fixed LIBOR Advance, a period commencing on, and including, the Advance Date or conversion date, as the case may be, with respect to such Advance and ending on, but excluding, the earlier of (1) the next Determination Date, and (2) the Scheduled Maturity Date, and (y) as to any other Fixed Period for such Fixed LIBOR Advance, a period commencing on, and including, a Determination Date with respect to such Advance and ending on, but excluding, the earlier of (1) the next Determination Date, and (2) the Scheduled Maturity Date, and (b) in all other cases, (x) as to the initial Fixed Period for such Fixed LIBOR Advance, a period commencing on, and including, the Advance Date or conversion date, as the case may be, with respect to such Advance and ending on, but excluding, the earlier of (1) the next Determination Date that occurs in January, April, July or October, and (2) the Scheduled Maturity Date, and (y) as to any other Fixed Period for such Fixed LIBOR Advance, a period commencing on, and including, a Determination Date with respect to such Advance and ending on, but excluding, the earlier of (1) the next Determination Date that occurs in January, April, July or October, and (2) the Scheduled Maturity Date;  provided  that, subject to  Section 2.03 , after the end of the Revolving Period and prior to the Final Maturity Date, the Borrower shall use commercially reasonable efforts to select Fixed Periods or to maintain a portion of the Advances as Daily LIBOR Advances so as not to require the payment of any Breakage Fees for such Advance.
 
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“Fixed Rate Loan Asset” means a Loan Asset other than a Floating Rate Loan Asset.
“Floating Rate Loan Asset” means a Loan Asset (i) that provides for scheduled payments of floating-rate interest in cash on a semi-annual or more frequent basis, (ii) under which the interest rate payable by the Obligor thereof is based on a prime rate or the London Interbank Offered Rate, plus some specified interest percentage in addition thereto, and (iii) that provides that such interest rate will reset immediately (or at the end of designated interest period) upon any change in the related prime rate or the London Interbank Offered Rate.
“Foreign Currency Loan Asset” means a Loan Asset denominated in Canadian dollars, British pounds sterling, Euros, Australian dollars, New Zealand dollars, Swedish kronas or Swiss francs.
“Foreign Eligible Obligor” means an Obligor of a Loan Asset that (i) is not a legal entity, duly formed, existing and in good standing under the laws of a State, or (ii) whose principal Underlying Collateral is not located in the United States, and (iii) is duly formed, existing and in good standing under the laws of Canada, England, France, Germany, the Netherlands, Australia, New Zealand, Ireland, Sweden or Switzerland.
“Funding Default” means, with respect to any Defaulting Lender, the occurrence of any of the events set forth in the definition of Defaulting Lender.
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States.
“Governmental Authority” means, with respect to any Person, any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person.
“Group Advance Limit” means for each Lender Group, as of any date of determination, the sum of the Commitments of the Liquidity Banks or the Institutional Lender, as applicable, for such Lender Group.
“Hazardous Materials” means all materials subject to any Environmental Law, including, without limitation, materials listed in 49 C.F.R. § 172.010, materials defined as hazardous pursuant to § 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, flammable, explosive or radioactive materials, hazardous or toxic wastes or substances, lead-based materials, petroleum or petroleum distillates or asbestos or material containing asbestos, polychlorinated biphenyls, radon gas, urea formaldehyde and any substances classified as being “in inventory”, “usable work in process” or similar classification that would, if classified as unusable, be included in the foregoing definition.
“Hedge Breakage Costs” means, for any Hedge Transaction, any amount payable by the Borrower for the early termination of that Hedge Transaction or any portion thereof.
 
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“Hedge Counterparty” means (1) any Lender or Affiliate of a Lender, to the extent such Person satisfies the requirements of clause (a)(ii) below, and (2) any other entity, to the extent that such other entity (a) on the date of entering into a Hedging Agreement (i) is an interest rate swap dealer that has been approved in writing by the Administrative Agent in its sole discretion, and (ii) has a long-term unsecured debt rating of not less than “A” by S&P, not less than “A2” by Moody’s and not less than “A” by Fitch (if such entity is rated by Fitch) (the “ Long-term Rating Requirement ”) and a short-term unsecured debt rating of not less than “A-1” by S&P, not less than “P-1” by Moody’s and not less than “F-1” by Fitch (if such entity is rated by Fitch) (the “ Short-term Rating Requirement ”) (or whose obligations under a Hedging Agreement are unconditionally guaranteed by an Affiliate with such ratings), and (b) in a Hedging Agreement (i) consents to the assignment of the Borrower’s rights under the Hedging Agreement to the Administrative Agent, and (ii) agrees that in the event that Moody’s, S&P or Fitch reduces its long-term unsecured debt rating below the Long-term Rating Requirement, or reduces its short-term unsecured debt rating below the Short-term Rating Requirement, it shall either collateralize its obligations in a manner satisfactory to the Administrative Agent or transfer its rights and obligations under each Hedge Transaction to another entity that meets the requirements of clause (a) and (b) hereof which has entered into a Hedging Agreement with the Borrower on or prior to the date of such transfer.
“Hedge Transaction” means each interest rate swap transaction, interest rate cap transaction, interest rate floor transaction or other derivative transaction approved in writing by the Administrative Agent, between the Borrower and a Hedge Counterparty and is governed by a Hedging Agreement.
“Hedging Agreement” means each agreement between the Borrower and a Hedge Counterparty that governs one or more Hedge Transactions entered into by the Borrower and such Hedge Counterparty, which agreement shall consist of a “Master Agreement” in a form published by the International Swaps and Derivatives Association, Inc., together with a “Schedule” thereto in such form as the Administrative Agent shall approve in writing, and each “Confirmation” thereunder confirming the specific terms of each such Hedge Transaction;  provided  that, the “Schedule” to any Hedging Agreement with respect to any Hedge Counterparty other than Citibank N.A., New York shall be subject to the written approval of the Administrative Agent.
“Highest Required Investment Category” means (i) with respect to ratings assigned by Moody’s, “Aa2” or “P-1” for one month instruments, “Aa2” and “P-1” for three month instruments, “Aa3” and “P-1” for six month instruments and “Aa2” and “P-1” for instruments with a term in excess of six months and (ii) with respect to ratings assigned by S&P, “A-1” for short-term instruments and “A” for long-term instruments.
“HLT Loan Asset” means a Loan Asset funded in connection with a leveraged acquisition under which the related Obligor’s pro forma ratio of equity to total capital is less than 25%.
“Indebtedness” means:
(xvi) with respect to any Obligor under any Loan Asset, for the purposes of clause (s) of the definition of “Concentration Limits” and the definitions of “First Lien Loan Asset”, “Second Lien Loan Asset”, “Senior Debt/EBITDA Ratio”, “Total Debt/EBITDA Ratio” and “Unitranche Loan Asset”, the meaning of “Indebtedness” or any comparable definition as set forth in, or as calculated in connection with, the Underwriting Memoranda for such Loan Asset and, at any time after the Cut-Off Date and after receipt by the Servicer of such Obligor’s most recent financial reporting under the applicable Loan Agreement, as set forth in the Loan Agreement for each such Loan Asset, and in any case that
 
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“Indebtedness” or such comparable definition is not defined in such Underwriting Memoranda or such Loan Agreement, as applicable, without duplication, (a) all obligations of such entity for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such entity evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such entity under conditional sale or other title retention agreements relating to property acquired by such entity, (d) all obligations of such entity in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such entity, whether or not the indebtedness secured thereby has been assumed, (f) all guarantees by such entity of indebtedness of others, (g) all Capital Lease Obligations of such entity, (h) all obligations, contingent or otherwise, of such entity as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such entity in respect of bankers’ acceptances; and
(xvii) for all other purposes, with respect to any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current liabilities incurred in the ordinary course of business and payable in accordance with customary trade practices) or that is evidenced by a note, bond, debenture or similar instrument or other evidence of indebtedness customary for indebtedness of that type, (b) all obligations of such Person under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (c) all obligations of such Person in respect of acceptances issued or created for the account of such Person, (d) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof, (e) all indebtedness, obligations or liabilities of that Person in respect of derivatives, and (f) all obligations under direct or indirect guaranties in respect of obligations (contingent or otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor against loss in respect of, indebtedness or obligations of others of the kind referred to in  clauses (a)  through  (e)  of this  clause (ii) .
“Indemnified Amounts” has the meaning assigned to that term in Section 9.01(a).
“Indemnified Party” has the meaning assigned to that term in Section 9.01(a).
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under this Agreement and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnifying Party” has the meaning assigned to that term in Section 9.03.
“Independent Director” means a natural person who, (A) for the five-year period prior to his or her appointment as Independent Director, has not been, and during the continuation of his or her service as Independent Director is not: (i) an employee, director, stockholder, member, manager, partner or officer of the Borrower, CGMS, Carlyle or any of their respective Affiliates (other than his or her service as an Independent Director (or in a functionally similar independent role, including as an independent officer) of the Borrower or other Affiliates that are structured to be “bankruptcy remote”); (ii) a customer or supplier of the Borrower or any of their Affiliates (other than his or her service as an Independent Director (or in a functionally similar independent role, including as an independent officer) of the Borrower); or (iii) any member of the immediate family of a person described in (i) or (ii), and (B) has, (i) prior experience as an Independent Director for a corporation or limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such
 
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corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.
“Indorsement” has the meaning specified in Section 8-102(a)(11) of the UCC, and “Indorsed” has a corresponding meaning.
“Industry” means the industry categories listed on Schedule VI.
“Initial Advance” means the first Advance made pursuant to Article II.
“Initial Extension” has the meaning assigned to that term in Section 2.21.
“Initial Payment Date” means July 20, 2013.
“Initial Unrated Loan Asset” means a Loan Asset that is not rated by at least two Rating Agencies but for which, as of five Business Days after the Cut-Off Date relating thereto, the Servicer (whether directly or through an Affiliate) has applied for a credit rating or credit estimate with respect thereto (to the extent not obtained) from at least two Rating Agencies.
“Institutional Lender” means each financial institution (other than a Conduit Lender or a Liquidity Bank) which may from time to time become a Lender hereunder by executing and delivering a Joinder Supplement to the Administrative Agent and the Borrower as contemplated by  Section 12.04(a) .
“Instrument” has the meaning specified in Section 9-102(a)(47) of the UCC.
“Insurance Policy” means, with respect to any Loan Asset, an insurance policy covering liability and physical damage to, or loss of, the Underlying Collateral.
“Insurance Proceeds” means any amounts received on or with respect to a Loan Asset under any Insurance Policy or with respect to any condemnation proceeding or award in lieu of condemnation, other than any such amount received which is required to be used to restore, improve or repair the related real estate or other assets or required to be paid to the Obligor under the Loan Agreement.
“Interest Collection Subaccount” means the account established at the Account Bank with account number 46455702 for U.S. Dollar deposits into which Interest Collections shall be segregated, and each other subaccount of the Collection Account that may be established from time to time for administration or convenience into which Interest Collections are to be segregated.
“Interest Collections” means, (i) with respect to any Loan Asset, all cash Collections attributable to interest on such Loan Asset, including, without limitation, all scheduled payments of interest and payments of interest relating to principal prepayments, all guaranty payments attributable to interest and proceeds of any liquidations, sales or dispositions attributable to interest on such Loan Asset and (ii) amendment fees, late fees, waiver fees, prepayment fees or other amounts received in respect of Loan Assets.
 
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“Interest Coverage Ratio” means as of any Reporting Date, the percentage equivalent of a fraction (i) the numerator of which is equal to the sum of Interest Collections deposited in the Interest Collection Subaccount during the immediately preceding 3-Month period, and (ii) the denominator of which is equal to the sum of the cash distributions made pursuant to items  first  through  ninth  (excluding item  seventh ) of  Section 2.04(a)  hereof on the Payment Dates during such preceding 3-Month period, all as set forth in the latest Servicing Report.
“Joinder Supplement” means an agreement among the Borrower, a Lender, its Lender Agent and the Administrative Agent in the form of  Exhibit E  to this Agreement (appropriately completed) delivered in connection with a Person becoming a Lender hereunder after the Closing Date.
“Joint Lead Arranger” or “Joint Lead Arrangers” means the Lead Arranger.
“Large-Market Loan Asset” means a Loan Asset for which the EBITDA of the related Obligor thereof (as set forth in, or as calculated in connection with, the Underwriting Memoranda for such Loan Asset) is equal to or greater than $20,000,000.
“Last Out Senior Secured Loan Asset” means any Loan Asset that: (a) may, by its terms, become subordinate in right of payment to any other obligation of the Obligor of the Loan Asset; (b) is secured by a valid first-priority perfected Lien in, to or on specified collateral securing the Obligor’s obligations under the Loan Asset (subject to any expressly permitted Liens, including typical and customary “permitted liens” under the applicable Loan Agreement); and (c) is not secured solely or primarily by common stock or other equity interests.
“Lead Arranger” means Citibank, not in its individual capacity, but solely as the Lead Arranger pursuant to the terms of this Agreement.
“Lender” means collectively, any Institutional Lender, the Conduit Lenders, the Liquidity Banks or any other Person to whom an Institutional Lender, a Conduit Lender or Liquidity Bank assigns any part of its rights and obligations under this Agreement and the other Transaction Documents in accordance with the terms of  Section 12.04 .
“Lender Agent” means, with respect to (i) the Lender Group containing the Citi Conduits and their related Liquidity Bank, Citibank, (ii) each other Conduit Lender and Liquidity Bank which may from time to time become party hereto, the Person designated as the “Lender Agent” with respect to such Conduit Lender or such Liquidity Bank in the applicable Joinder Supplement and (iii) each Institutional Lender which may from time to time become a party hereto, such Institutional Lender as Lender Agent for itself, and, in each case, each of their respective successors and assigns.
“Lender Group” means (i) a group consisting of related Conduit Lenders, their related Liquidity Banks and their related Lender Agent and (ii) with respect to each Institutional Lender, such Institutional Lender, as Lender and as Lender Agent for itself, and, in each case, each of their respective successors and assigns.
“LIBOR” means, with respect to Daily LIBOR Advances, the Daily LIBOR and, with respect to Fixed LIBOR Advances, the applicable Fixed LIBOR.
“Lien” means any mortgage or deed of trust, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, claim, preference, priority or other
 
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security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale, lease or other title retention agreement, sale subject to a repurchase obligation, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing) or the filing of or agreement to give any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction.
“Liquidity Agreement” means (i) with respect to any Liquidity Bank other than Citibank, any agreement entered into in connection with this Agreement pursuant to which a Liquidity Bank agrees to make purchases from or advances to, or purchase assets from, any Conduit Lender in order to provide liquidity support for such Conduit Lender’s Advances hereunder and (b) in the case of Citibank, each secondary market agreement, asset purchase agreement or other similar liquidity agreement entered into by Citibank for the benefit of each Conduit Lender for which it is acting as Liquidity Bank, to the extent relating to the sale or transfer of interests in Advances.
“Liquidity Bank” means (i) with respect to the Lender Group that includes the Citi Conduits, CIESCO, and (ii) with respect to such Lender Group or any other Lender Group that includes a Conduit Lender, such Person or Persons who provide liquidity support to such Conduit Lender pursuant to a Liquidity Agreement in connection with the issuance by such Conduit Lender of Commercial Paper Notes or as may from time to time become a Liquidity Bank hereunder by executing and delivering a Joinder Supplement.
“Loan Agreement” means the loan agreement, credit agreement or other agreement pursuant to which a Loan Asset has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Loan Asset or of which the holders of such Loan Asset are the beneficiaries.
“Loan Asset” means any loan or loan participation(x) originated by the Borrower or, (y) originated or acquired by the Transferor in the ordinary course of its business and transferred pursuant to the Contribution Agreement or (z) acquired by the Borrower directly from any other Affiliate of the Transferor ( provided  that, for all other purposes of this Agreement and the other Transaction Documents, any such directly acquired loan or loan participation shall be certified by the Transferor as an approved Eligible Loan Asset and included in the “Contributed Portfolio” under the Contribution Agreement) , which loan or loan participation includes, without limitation, (i) the Required Loan Documents and Loan Asset File, and (ii) all right, title and interest of the Transferor in and to the loan or loan participation and any Underlying Collateral, but excluding, in each case, any Retained Interest and any Excluded Amounts, and which loan or loan participation (A) was approved and certified as an “Eligible Loan Asset” by the Transferor, and (B) (x) as of the initial Advance Date, is set forth on the Loan Asset Schedule delivered on the initial Advance Date, or (y) at all times after the initial Advance Date, if transferred pursuant to the Contribution Agreement, is listed on Schedule I to the Loan Assignment as of its Cut-Off Date.
“Loan Asset Checklist” means an electronic or hard copy, as applicable, of a checklist delivered by or on behalf of the Borrower to the Collateral Custodian and the Backup Servicer, for each Loan Asset, of all Required Loan Documents to be included within the respective Loan Asset File, which shall specify whether such document is an original or a copy.
“Loan Asset Dividend” has the meaning assigned to that term in Section 2.07(d)(i).
 
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“Loan Asset Dividend Certificate” has the meaning assigned to that term in Section 2.07(d)(i).
“Loan Asset Dividend Date” means any Business Day prior to the Commitment Termination Date identified by the Borrower in a written notice to the Administrative Agent, Collateral Agent and Collateral Custodian of its intent to effect a Loan Asset Dividend on a date not more than 45 days’ and at least 20 days’ following the delivery date of such written notice, all in accordance with  Section 2.07(d)(i) .
“Loan Asset File” means, with respect to each Loan Asset, a file containing (a) each of the documents and items as set forth on the Loan Asset Checklist with respect to such Loan Asset and (b) duly executed originals (to the extent required by the Servicing Standard) and copies of any other Records relating to such Loan Assets and Portfolio Assets pertaining thereto.
“Loan Asset Register” has the meaning assigned to that term in Section 5.04(m)(i).
“Loan Asset Schedule” means the schedule of information with respect to the Loan Assets delivered by the Borrower to the Collateral Custodian and the Administrative Agent. Each such schedule shall set forth, as to any Eligible Loan Asset to be Pledged hereunder, the applicable information specified on  Schedule IV , which shall also be provided to the Collateral Custodian in electronic format acceptable to the Collateral Custodian.
“Loan Assignment” has the meaning assigned to that term in the Contribution Agreement.
“Majority Lenders” means, as of any date of determination, Liquidity Banks and Institutional Lenders with Commitments representing an aggregate of more than 50% of the Aggregate Commitments at such time (which, so long as there exists at least two unaffiliated Lender Groups, shall be comprised of at least two Lender Groups that are not Affiliates);  provided, that the Commitments of Defaulting Lenders shall be excluded for the purposes of making a determination of Majority Lenders.
“Management Agreement” means the Investment Advisory Agreement, dated as of April 3, 2013, by and between CGMS and Carlyle Management.
“Margin Stock” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.
“Material Adverse Effect” means, with respect to any event or circumstance, a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance or properties of the Transferor, the Servicer or the Borrower, (b) the validity, enforceability or collectability of this Agreement or any other Transaction Document or the validity, enforceability or collectability of the Loan Assets generally or any material portion of the Loan Assets, (c) the rights and remedies of the Collateral Agent, the Collateral Custodian, the Backup Servicer, the Account Bank, the Administrative Agent, any Lender, any Lender Agent and the Secured Parties with respect to matters arising under this Agreement or any other Transaction Document, (d) the ability of each of the Borrower and the Servicer, to perform their respective obligations under this Agreement or any other Transaction Document, or (e) the status, existence, perfection, priority or enforceability of the Collateral Agent’s, the Administrative Agent’s or the other Secured Parties’ lien on the Collateral Portfolio.
“Material Modification” means any amendment or waiver of, or modification or supplement to, a Loan Agreement governing a Loan Asset executed or effected on or after the Cut-Off Date for such Loan Asset which:
(i) reduces or forgives any or all of the principal amount due under such Loan Asset;
 
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(ii) delays or extends the maturity date for such Loan Asset; provided, that an extension of the term of a Loan Agreement with respect to an Eligible Loan Asset that is part of the Collateral Portfolio and not in default during the Revolving Period shall not be considered a Material Modification and such Loan Asset shall be considered a newly transferred Loan Asset for all purposes hereunder;
(iii) waives one or more cash interest payments, permits any interest due in cash to be deferred or capitalized and added to the principal amount of such Loan Asset, or reduces the cash spread (giving effect to any LIBOR floor) or cash coupon with respect to such Loan Asset (other than due to automatic changes in grid pricing existing at the Cut-Off Date for such Loan Asset) to less than (i) 7.00% for a Fixed Rate Loan Asset, and (ii) LIBOR  plus  3.00% for any Floating Rate Loan Asset;
(iv) (1) in the case of a Unitranche Loan Asset or First Lien Loan Asset, contractually or structurally subordinates such Loan Asset by operation of a priority of payments, turnover provisions, the transfer of assets in order to limit recourse to the related Obligor or the granting of Liens (other than any expressly permitted Liens, including “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein) on any of the Underlying Collateral securing such Loan Asset or (2) in the case of a Second Lien Loan Asset, contractually or structurally subordinates such Loan Asset to any obligation (other than any first lien loan which existed at the Cut-Off Date for such Loan Asset) by operation of a priority of payments, turnover provisions, the transfer of assets in order to limit recourse to the related Obligor or the granting of Liens (other than expressly permitted Liens, including any “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein) on any of the Underlying Collateral securing such Loan Asset; or
(v) substitutes, alters or releases the Underlying Collateral securing such Loan Asset and each such substitution, alteration or release, as determined in the sole reasonable discretion of the Administrative Agent, materially and adversely affects the value of such Loan Asset (other than releases for value with application of 100% of net proceeds in permanent reductions of amounts outstanding under the Loan Asset (or in the case of a Second Lien Loan Asset, under such Loan Asset or the related first lien loan asset) as may be permitted in the underlying Loan Agreement).
“Maximum Availability” means the lesser of (i) the result of (A) the Maximum Facility Amount, minus (B) an amount equal to the sum of, for each Revolving Loan Asset that is an Eligible Loan Asset, (x) the aggregate Unfunded Revolving Commitments for such Revolving Loan Asset,  multiplied by  (y) 100% minus the percentage that would be applied to such Revolving Loan Asset under clause (4) of the definition of “Minimum Credit Enhancement”, and (ii) the Maximum Draw Amount.
“Maximum Draw Amount” means, at any time, the sum of the Borrowing Base plus (solely to the extent not included in the calculation of the Borrowing Base) the aggregate Principal Collections received but not distributed pursuant to Section 2.04 ;  provided  that the Maximum Draw Amount shall not be increased by any Available Collections or other amounts if at any time such Available Collections or other amounts are rescinded, unavailable for distribution or must be returned for any reason.
“Maximum Facility Amount” means, as of any date of determination, the lesser of (i) the Aggregate Commitments then in effect, and (ii) the amount of net cash proceeds received by and
 
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Unpledged Capital Commitments provided to CGMS from public offerings and private placements of equity in CGMS; provided that at all times after the Revolving Period, the Maximum Facility Amount shall mean the aggregate Advances Outstanding at such time.
“Mid-Market Loan Asset” A Loan Asset for which the EBITDA of the related Obligor thereof (as set forth in, or as calculated in connection with, the Underwriting Memoranda for such Loan Asset) is less than $20,000,000.
“Middle Market Loan Asset” means a Loan Asset that is not a Broadly Syndicated Loan Asset.
“Minimum Credit Enhancement” means, as of any date of determination, the sum of (A) the URC Reserve Requirement,  plus  (B) the greatest of (1) $30,000,000; (2) the aggregate amount of the six largest Outstanding Principal Balances of all Eligible Loan Assets (and, for the purpose of this calculation, all Eligible Loan Assets funded to an Obligor and its Affiliates shall constitute a single Eligible Loan Asset), (3) either (x) if such date of determination is prior to the CQT Matrix Trigger Date, 45% of the Aggregate Outstanding Loan Balance other than the Excess Concentration Amounts for all Eligible Loan Assets, or (y) if such date of determination is on or after the CQT Matrix Trigger Date, 35% of the Aggregate Outstanding Loan Balance other than the Excess Concentration Amounts for all Eligible Loan Assets, and (4) the sum of the following:
(i) 35% of the aggregate Outstanding Loan Balance of all First Lien Broadly Syndicated Loan Assets that are Eligible Loan Assets (but excluding Senior B Loan Assets that are subject to  clause (iii)  below), other than the Excess Concentration Amount for such First Lien Broadly Syndicated Loan Assets, if any;
(ii) 40% of the aggregate Outstanding Loan Balance of all First Lien Middle Market Loan Assets that are Eligible Loan Assets (but excluding Senior B Loan Assets that are subject to  clause (iii)  below), other than the Excess Concentration Amount for such First Lien Middle Market Loan Assets, if any;
(iii) 50% of the aggregate Outstanding Loan Balance of all Senior B Loan Assets that are Eligible Loan Assets, other than the Excess Concentration Amount for such Senior B Loan Assets, if any;
(iv) 75% of the aggregate Outstanding Loan Balance of all Second Lien Loan Assets that are Eligible Loan Assets, other than the Excess Concentration Amount for all Second Lien Loan Assets, if any; and
(v) 60% of the aggregate Outstanding Loan Balance of all Last Out Senior Secured Loan Assets that are Eligible Loan Assets, other than the Excess Concentration Amount for all Last Out Senior Secured Loan Assets, if any.
“Minimum Demand Amount” has the meaning specified in clause (i) of the definition of “Servicer Termination Event” in this  Section 1.01(b) .
“Moody’s” means Moody’s Investors Service, Inc. (or its successors in interest).
“Moody’s Recovery Rate” has the meaning assigned to that term in Annex E.
 
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“Month” means a calendar month.
“Monthly Delinquency Ratio” means, as of any Reporting Date, the amount, expressed as percentage, of (i) the sum of the Outstanding Principal Balances of all Delinquent Assets on such date,  divided by  and (ii) the Aggregate Outstanding Principal Balance on such date.
“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or the Servicer, as the case may be, or any ERISA Affiliate thereof, contributed or had any obligation to contribute on behalf of its employees at any time during the current year or the preceding five years.
“Nationally Recognized Valuation Firm” means each of: (i) FTI Consulting, Inc. (ii) Lincoln International LLC (f/k/a Lincoln Partners LLC), (iii) Valuation Research Corporation, and (iv) any other nationally recognized accounting firm or valuation firm approved by the Administrative Agent in its reasonable discretion.
“Non-Defaulting Lender” means any Liquidity Bank or Institutional Lender that is not a Defaulting Lender.
“Non-Defaulting Lender Group” means, at any time, each Lender Group that does not include a Defaulting Lender at such time.
“Non-U.S. Lender” has the meaning assigned to that term in Section 2.11(d).
“Noteless Loan Asset” means a Loan Asset with respect to which the Loan Agreements (i) do not require the Obligor to execute and deliver a promissory note to evidence the indebtedness created under such Loan Asset or (ii) require any holder of the indebtedness created under such Loan Asset to affirmatively request a promissory note from the related Obligor.
“Notice of Borrowing” means an irrevocable written notice of borrowing from the Borrower to the Administrative Agent and each Lender Agent in the form attached hereto as  Exhibit F .
“Notice of Exclusive Control” has the meaning specified in the Collection Account Agreement.
“Notice of Reduction” means a notice of a reduction of the Advances Outstanding pursuant to Section 2.18, in the form attached hereto as  Exhibit G .
“Obligations” means all present and future indebtedness and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Borrower to the Lenders, the Lender Agents, the Administrative Agent, the Account Bank, the Collateral Agent or the Collateral Custodian arising under this Agreement or any other Transaction Document and shall include, without limitation, all liability for principal of and interest on the Advances, Breakage Fees, Fees, Hedge Breakage Costs, indemnifications and other amounts due or to become due by the Borrower to the Lenders, the Administrative Agent, the Lender Agents, the Collateral Agent, the Collateral Custodian, the Collateral Administrator and the Account Bank under this Agreement or any other Transaction Document, including, without limitation, any Fee Letter, any costs and expenses payable by the Borrower to the Lenders, the Administrative Agent, the Lender Agents, the Account Bank, the Collateral Agent or the Collateral Custodian, including reasonable attorneys’ fees, costs and expenses, including without limitation, interest, fees and other obligations that accrue after the commencement of an insolvency proceeding (in each case whether or not allowed as a claim in such insolvency proceeding).
 
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“Obligor” means, collectively, each Person obligated to make payments under a Loan Agreement, including any guarantor thereof.
“Obligor Group” means, collectively, each Obligor and its direct corporate or entity parents and subsidiaries; provided,  that Obligors will not be considered members of the same Obligor Group solely as a result of a relationship based on the direct or indirect ownership of, or control by, a common owner which is a financial institution, asset manager, private equity sponsor, fund, investment vehicle or similar entity which is in the business of making diversified investments.
“Officer’s Certificate” means a certificate signed by the president, the secretary, an assistant secretary, the chief financial officer or any vice president, as an authorized officer, of any Person.
“Opinion of Counsel” means a written opinion of counsel, which opinion and counsel are acceptable to the Administrative Agent in its sole discretion;  provided  that Latham & Watkins LLP, Richards, Layton & Finger, P.A., Venable LLP and Sullivan & Cromwell LLP, shall be considered acceptable counsel for purposes of this definition.
“Optional Sale” has the meaning assigned to that term in Section 2.07(c).
“Optional Sale Date” means any Business Day prior to the Commitment Termination Date identified by the Borrower in a written notice to the Administrative Agent, Collateral Agent and Collateral Custodian of its intent to effect an Optional Sale on a date not more than 45 days’ and at least 10 days’ following the delivery date of such written notice, all in accordance with  Section 2.07(c) .
“Other Taxes” has the meaning assigned to that term in Section 12.07(b).
“Outstanding Loan Balance” means for any Loan Asset, for any date of determination, an amount equal to the Assigned Value of such Loan Asset at such time multiplied by the Outstanding Principal Balance of such Loan Asset;  provided that the parties hereby agree that the Outstanding Loan Balance of any Loan Asset that is no longer an Eligible Loan Asset shall equal zero.
“Outstanding Principal Balance” means the principal balance of a Loan Asset, expressed exclusive of the portion of the outstanding principal balance of a Loan Asset, if any, that represents interest which has accrued in kind and has been added to the principal balance of such Loan Asset, and any accrued interest;  provided,  that the Outstanding Principal Balance of a Foreign Currency Loan Balance as of any date shall equal the U.S. Dollar equivalent of the principal balance of such Loan Asset under the applicable Hedging Agreement.
“Participant Register” has the meaning assigned to that term in Section 2.14.
“Payment Date” means the 20th day of each of January, April, July and October, or, if such day is not a Business Day, the next succeeding Business Day;  provided  that the final Payment Date shall occur on the Collection Date.
“Payment Duties” has the meaning assigned to that term in Section 11.02(b)(ii).
 
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“Pension Plan” has the meaning assigned to that term in Section 4.01(z).
“Permitted BDC Merger” has the meaning assigned to that term in Section 12.22.
“Permitted Investments” means U.S. Dollar denominated negotiable instruments or securities or other investments (which may include securities or investments in which Citibank, the Account Bank or either of their Affiliates provide services or receive compensation) that (i) except in the case of demand or time deposits, certificates of deposit and investments in money market funds, are represented by instruments in bearer or registered form or ownership of which is represented by book entries by a Clearing Agency or by a Federal Reserve Bank in favor of depository institutions eligible to have an account with such Federal Reserve Bank who hold such investments on behalf of their customers, (ii) as of any date of determination, mature (or, in the case of money market funds, are redeemable) by their terms on or prior to the Business Day preceding the next Payment Date, and (iii) evidence:
(g) direct obligations of, and obligations fully guaranteed as to full and timely payment by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States);
(h) certificates of deposit of depository institutions or trust companies incorporated under the laws of the United States or any state thereof and subject to supervision and examination by federal or state banking or depository institution authorities; provided  that at the time of the Borrower’s investment or contractual commitment to invest therein, the commercial paper, if any, and short-term unsecured debt obligations (other than such obligation whose rating is based on the credit of a Person other than such institution or trust company) of such depository institution or trust company shall have a credit rating from at least two of the Rating Agencies, each of which is in the Highest Required Investment Category granted by such Rating Agency;
(i) commercial paper obligations having, at the time of the Borrower’s investment or contractual commitment to invest therein, a rating in the Highest Required Investment Category granted by two or more of the Rating Agencies;
(j) certificates of deposit that are fully insured by the FDIC and are maintained at a depository institution whose certificates of deposit or short-term deposits are (i) rated by at least two Rating Agencies and (ii) not rated lower than ‘A-1’ (or the equivalent, ‘P 1’ or ‘F1,’ in the case of Moody’s or Fitch, respectively) by any Rating Agency;
(k) notes that are payable on demand or bankers’ acceptances issued by any depository institution or trust company referred to in clause (b) above;
(l) investments in taxable, registered money market funds having, at the time of the Borrower’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category from two or more of the Rating Agencies; or
(m) time deposits (having maturities of not more than 90 days) by an entity the commercial paper of which has, at the time of the Borrower’s investment or contractual commitment to invest therein, a rating of the Highest Required Investment Category granted by two or more of the Rating Agencies.
 
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In connection with the acquisition or disposition of Permitted Investments pursuant to the terms of the Transaction Documents, the Collateral Agent may pursuant to the direction of the Servicer or the Administrative Agent, as applicable, purchase or sell to itself or an Affiliate, as principal or agent, the Permitted Investments described above.
“Permitted Liens” means any of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced (a) Liens for state, municipal or other local Taxes if such Taxes shall not at the time be due and payable or if a Person shall currently be contesting the validity thereof in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of such Person, (b) Liens imposed by law, such as materialmen’s, warehousemen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens, arising by operation of law in the ordinary course of business for sums that are not overdue or are being contested in good faith, and (c) Liens granted pursuant to or by the Transaction Documents.
“Permitted Offset” has the meaning assigned to that term in Section 2.07(c).
“Permitted Merger Participations” means the participations entered into between the Borrower and NFIC SPV LLC with respect to the Loan Assets to be purchased by the Borrower from NFIC SPV LLC that are (i) entered into pursuant to documentation substantially identical to the documentation previously provided to and approved by the Administrative Agent in its reasonable discretion and consistent with the representations and warranties set forth herein and (ii) elevated to a full assignment no later than 90 days from the related Cut-Off Date.
“Permitted Mergers” has the meaning assigned to that term in Section 12.22.
“Permitted Refinancing” means any refinancing transaction undertaken by CGMS or an Affiliate of the CGMS that is secured (or to be secured), directly or indirectly, by any Loan Asset currently included in the Collateral Portfolio or any portion thereof or any interest therein released from the Lien of this Agreement.
“Permitted Securitization” means a private or public term or conduit securitization transaction undertaken by the CGMS, the Borrower or an Affiliate of the CGMS that is secured (or to be secured), directly or indirectly, by any Loan Asset currently included in the Collateral Portfolio or any portion thereof or any interest therein released from the Lien of this Agreement, including, without limitation, any collateralized loan obligation or collateralized debt obligation offering or other asset securitization.
“Permitted SPV Merger” has the meaning assigned to that term in Section 12.22.
“Person” means an individual, partnership, corporation (including a statutory or business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.
“PIK Loan Asset” means a Loan Asset which provides for a portion of the interest that accrues thereon to be added to the principal amount of such Loan Asset (whether as of the Cut-Off Date or in the future) for some period of the time prior to such Loan Asset requiring the current cash payment of such previously capitalized interest, which cash payment shall be treated as an Interest Collection at the time it is received.
 
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“Pledge” means the pledge of any Eligible Loan Asset or other Portfolio Asset pursuant to Article II, whether such Eligible Loan Asset was originated by the Borrower or acquired by the Borrower pursuant to the Contribution Agreement.
“Portfolio Assets” means all Loan Assets owned by the Borrower, together with all proceeds thereof and other assets or property related thereto, including all right, title and interest of the Borrower in and to:
(n) any amounts on deposit in any cash reserve, collection, custody or lockbox accounts securing the Loan Assets;
(o) all rights with respect to the Loan Assets to which the Borrower is entitled as lender under the applicable Loan Agreement;
(p) the Collection Account, together with all cash and investments in each of the foregoing other than amounts earned on investments therein;
(q) any Underlying Collateral securing a Loan Asset and all Recoveries related thereto, all payments paid in respect thereof and all monies due, to become due and paid in respect thereof accruing after the applicable Cut-Off Date and all liquidation proceeds;
(r) all Required Loan Documents, the Loan Asset Files related to any Loan Asset, any Records, and the documents, agreements, and instruments included in the Loan Asset Files or Records;
(s) all Insurance Policies with respect to any Loan Asset;
(t) all Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank accounts and property subject thereto from time to time purporting to secure or support payment of any Loan Asset, together with all UCC financing statements, mortgages or similar filings signed or authorized by an Obligor relating thereto;
(u) the Contribution Agreement (including, without limitation, rights of recovery of the Borrower against the Transferor) and the assignment to the Collateral Agent, for the benefit of the Secured Parties, of all UCC financing statements filed by the Borrower against the Transferor under or in connection with the Contribution Agreement;
(v) all records (including computer records) with respect to the foregoing; and
(w) all Collections, income, payments, proceeds and other benefits of each of the foregoing.
“Prime Rate” means the rate announced by Citibank from time to time as its prime rate in the United States, such rate to change as and when such designated rate changes. The Prime Rate is not intended to be the lowest rate of interest charged by Citibank or any other specified financial institution in connection with extensions of credit to debtors.
“Principal Collection Subaccount” means the account established at the Account Bank with account number 46455701 for U.S. Dollar deposits into which Principal Collections shall be segregated, and each other subaccount of the Collection Account that may be established from time to time for administration or convenience into which Principal Collections are to be segregated.
 
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“Principal Collections” means (i) any cash Collections deposited by the Borrower in the Collection Account accordance with  Section 2.06(a)(i)  or  Section 2.07(b) ,  (c)  or  (e)  with respect to any Loan Asset, all cash Collections received which are not Interest Collections, including, without limitation, all Recoveries, all Insurance Proceeds, all scheduled payments of principal and principal prepayments and all guaranty payments and proceeds of any Permitted Refinancings, Permitted Securitizations, liquidations, sales or dispositions, in each case, attributable to the principal of such Loan Asset.
“Pro Rata Share” means, with respect to each Liquidity Bank and each Institutional Lender, (1) at any time during the Revolving Period (i) with respect to the determination of Advances, the Undrawn Percentage of such Liquidity Bank or Institutional Lender, and (ii) with respect to the allocation of Collections on any Payment Date or otherwise in connection with any distribution hereunder, the Funded Percentage of such Liquidity Bank or Institutional Lender, and (2) on or after the Revolving Period, with respect to the allocation of Collections on any Payment Date or otherwise in connection with any distribution hereunder, such Liquidity Bank’s or Institutional Lender’s Funded Percentage,
where:
“Drawn Amount” of each Liquidity Bank and each Institutional Lender, means the Advances Outstanding of such Liquidity Bank or Institutional Lender.
“Funded Percentage” for any Liquidity Bank or Institutional Lender as of any date of determination, means the amount, expressed as a percentage, obtained by dividing (i) the Drawn Amount of such Liquidity Bank or Institutional Lender, by (ii) the Advances Outstanding of all Liquidity Banks and Institutional Lenders.
“Undrawn Amount” for any Liquidity Bank or Institutional Lender as of any date of determination, means the positive difference, if any, between (i) the Commitment of such Person, and (ii) the Drawn Amount of such Person.
“Undrawn Percentage” for any Liquidity Bank or Institutional Lender as of any date of determination, means the amount, expressed as a percentage, obtained by dividing (i) the Undrawn Amount of such Liquidity Bank or Institutional Lender, by (ii) the aggregate Undrawn Amounts of all Liquidity Banks and Institutional Lenders.
“Proceeds” means, with respect to any Collateral Portfolio, all property that is receivable or received when such Collateral Portfolio is collected, sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to any insurance relating to such Collateral Portfolio.
“Qualified Lender” means a Person that is a “qualified purchaser” for purposes of section 3(c)(7) of the 1940 Act.
“Qualifying Agreement Among Lenders” means an agreement among lenders who are each Affiliates of the Servicer substantially in the form of Exhibit T or as otherwise approved by the Administrative Agent in its reasonable discretion.
 
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“Quoted Price” means, with respect to each Loan Asset as of any date, the net value (expressed as a percentage of the Outstanding Principal Balance) of such Loan Asset quoted by a Nationally Recognized Valuation Firm selected by the Agent and valuing such Loan Asset.
“RAC Reporting Date” means the earlier to occur of (i) the date on which the Servicer or the Borrower has actual knowledge that the Servicer is not or will not be in compliance with the Required Asset Coverage Ratio with respect to the immediately prior fiscal quarter, and (ii) the date 45 days following the end of any fiscal quarter on which the Borrower shall fail to deliver to the Administrative Agent written certification that demonstrates that CGMS is in compliance with the Required Asset Coverage Ratio as at the end of such fiscal quarter.
“Ramp-Up Period” means the period commencing on the Closing Date and ending on the earlier to occur of (x) the initial date on which AOLB exceeds $250,000,000, and (y) January 24, 2014.
“Rating Agency” means each of S&P, Moody’s and Fitch.
“Records” means all documents relating to the Loan Assets, including books, records and other information executed in connection with the origination or acquisition of the Collateral Portfolio or maintained with respect to the Collateral Portfolio and the related Obligors that the Borrower, the Transferor or the Servicer have generated, in which the Borrower or the Transferor has acquired an interest pursuant to the Contribution Agreement or in which the Borrower or the Transferor has otherwise obtained an interest.
“Recoveries” means, as of the time any Underlying Collateral with respect to any Loan Asset that is subject to clauses (i) ,  (ii)  or  (iii)  of the definition of “Assigned Value Adjustment Event” is sold, discarded or abandoned (after a determination by the Servicer that such Underlying Collateral has little or no remaining value) or otherwise determined to be fully liquidated by the Servicer in accordance with the Servicing Standard, the proceeds from the sale of the Underlying Collateral, the proceeds of any related Insurance Policy, any other recoveries (including interest proceeds recovered) with respect to such Loan Asset, as applicable, the Underlying Collateral, and amounts representing late fees and penalties, net of any amounts received that are required under such Loan Asset, as applicable, to be refunded to the related Obligor.
“Register” has the meaning assigned to that term in Section 2.14.
“Release Date” has the meaning assigned to that term in Section 2.07(f).
“Release Period” means any period following the Ramp-Up Period and prior to the Commitment Termination Date that the Borrower is in compliance with the Collateral Quality Tests.
“Remittance Period” means, (i) as to the Initial Payment Date, the period beginning on the Closing Date and ending on, but excluding, the Determination Date immediately preceding such Payment Date and (ii) as to any subsequent Payment Date, the period beginning on, and including, the Determination Date prior to the immediately preceding Payment Date and ending on, but excluding, the Determination Date immediately preceding such Payment Date, or, with respect to the final Remittance Period, the Collection Date.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.
 
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“Replacement Servicer” has the meaning assigned to that term in Section 6.01(c).
“Reporting Date” means the date that is the 12th day of each Month, commencing June 12, 2013, or if such date is not a Business Day, the  immediate preceding next succeeding  Business Day.
“Required Asset Coverage Ratio” means, as of any date of determination, “asset coverage” (as understood under the 1940 Act) of CGMS of at least 200 per centum, as determined in accordance with the terms and requirements of the 1940 Act, including Sections 6(f), 18 and 61(a)(1) thereof, and otherwise in accordance with GAAP.
“Required Lenders” means, as of any date of determination, Liquidity Banks and Institutional Lenders with Commitments representing an aggregate of more than 66.667% of the Aggregate Commitments at such time (which, so long as there exists at least two unaffiliated Lender Groups, shall be comprised of at least two Lender Groups that are not Affiliates); provided,  that the Commitments of Defaulting Lenders shall be excluded for the purposes of making a determination of Required Lenders.
“Required Loan Documents” means, for each Loan Asset, originals (except as otherwise indicated) of the following documents or instruments, all as specified on the related Loan Asset Checklist:
(x) (i) the original executed promissory note or, in the case of a lost note, a copy of the executed underlying promissory note accompanied by an original executed affidavit and indemnity endorsed by the Borrower in blank (and an unbroken chain of endorsements from each prior holder of such promissory note to the Borrower), or (ii) if such promissory note is not issued in the name of the Borrower or is a Noteless Loan Asset, an executed copy of each assignment and assumption agreement, transfer document or instrument relating to such Loan Asset evidencing the assignment of such Loan Asset from any prior third party owner thereof to the Borrower and from the Borrower in blank; and
(y) to the extent applicable for the related Loan Asset, copies of the executed (a) guaranty, (b) credit agreement, (c) loan agreement, (d) note purchase agreement, (e) sale and servicing agreement, (f) acquisition agreement (or similar agreement) and (g) security agreement or mortgage, in each case as set forth on the Loan Asset Checklist.
“Required Reports” means, collectively, the Servicing Report required pursuant to Section 6.08(b), the Servicer’s Certificate required pursuant to  Section 6.08(c) , the financial statements of the Servicer required pursuant to Section 6.08(d) , the tax returns of the Borrower and the Servicer required pursuant to  Section 6.08(e) , the financial statements and valuation reports of each Obligor required pursuant to  Section 6.08(f) , the annual statements as to compliance required pursuant to  Section 6.09 , and the annual independent public accountant’s report required pursuant to  Section 6.10 .
“Responsible Officer” means, with respect to any Person, any duly authorized officer of such Person with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other duly authorized officer of such Person to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any class of membership interests of the Borrower now or hereafter outstanding, except a dividend paid solely in interests of that class of membership interests or in any junior class of
 
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membership interests of the Borrower; (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of membership interests of the Borrower now or hereafter outstanding, (iii) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire membership interests of the Borrower now or hereafter outstanding, and (iv) any payment of management fees by the Borrower (except for reasonable management fees to the Servicer or its Affiliates in reimbursement of actual management services performed, which management fees shall be paid pursuant to  Section 2.04(a)(vii) ,  Section 2.04(b)(iii) and  Section 2.04(c)(vi) ). For the avoidance of doubt, (x) payments and reimbursements due to the Servicer in accordance with this Agreement or any other Transaction Document do not constitute Restricted Junior Payments, and (y) distributions by the Borrower to holders of its membership interests of Loan Assets or of cash or other proceeds relating thereto which have been substituted by the Borrower in accordance with this Agreement shall not constitute Restricted Junior Payments.
“Retained Interest” means (A) with respect to any Revolving Loan Asset, all obligations to provide additional funding (in excess of principal amounts outstanding) with respect to such Loan Asset, and (B) with respect to any Agented Note that is originated or transferred to the Borrower, (i) all of the obligations, if any, including obligations to provide additional funding, of the agent(s) under the documentation evidencing such Agented Note, and (ii) the applicable portion of the interests, rights and obligations under the documentation evidencing such Agented Note that relate to such portion(s) of the indebtedness that is owned by another lender or is being retained by the Transferor pursuant to clause (A) of this definition.
“Review Criteria” has the meaning assigned to that term in Section 13.02(b)(i).
“Revolving Loan Asset” means a Loan Asset that is not a Term Loan Asset (including a Loan Asset that contains revolving loan or delayed draw term loan provisions).
“Revolving Loan Principal Collections” means Principal Collections with respect to Revolving Loan Assets.
“Revolving Note” has the meaning assigned to that term in Section 2.01(a).
“Revolving Period” means the date commencing on the Closing Date and ending on the Commitment Termination Date.
“Risk and Collection Policies” means collectively, the Risk Policy Manual of TCG BDC, Inc. (f/k/a Carlyle GMS Finance, Inc.) and the Collection Policy Manual of TCG BDC, Inc. (f/k/a Carlyle GMS Finance, Inc.), each as attached hereto as  Exhibit B .
“Rule 17g-5” means Rule 17g-5 under the Securities Exchange Act of 1934, as amended, as such rule may be amended from time to time, and subject to the interpretations provided by the Securities and Exchange Commission or its staff from time to time.
“S&P” means Standard & Poor’s Ratings Group, a Standard & Poor’s Financial Services LLC business (or its successors in interest).
“Sanctions” has the meaning assigned to that term in Section 4.01(kk).
 
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“Scheduled Commitment Termination Date” means May 24, 2019,22, 2020, as such date may be extended by mutual agreement of the parties hereto (each, in their sole and absolute discretion) pursuant to  Sections 2.21  and  12.01(b) .
“Scheduled Maturity Date” means May 22, 2021,23, 2022, as such date may be extended by mutual agreement of the parties hereto (in their sole and absolute discretion) pursuant to  Sections 2.21  and  12.01(b) .
“Scheduled Payment” means each scheduled payment of principal or interest required to be made by an Obligor on the related Loan Asset, as adjusted pursuant to the terms of the related Loan Agreement.
“Scheduled Valuation Process” has the meaning assigned to that term in Section 6.02(d).
“Second Extension” has the meaning assigned to that term in Section 2.21.
“Second Lien Broadly Syndicated Loan Asset” means a Broadly Syndicated Loan Asset that is a Second Lien Loan Asset or a Last Out Senior Secured Loan Asset.
“Second Lien Loan Asset” means any Loan Asset that (i) is secured by a valid and perfected Lien on substantially all of the Obligor’s assets constituting Underlying Collateral for the Loan Asset, subject only to (i) the prior lien provided to secure the obligations under a “first lien” loan pursuant to typical commercial terms, and any other expressly permitted liens under the applicable Loan Agreement for such Loan Asset, including those set forth in “permitted liens” as defined in such Loan Agreement, or such comparable definition if “permitted liens” is not defined therein, and (ii) provides that the payment obligation of the Obligor on such Loan Asset is “senior debt” and, except for the express priority provisions under the documentation of the “first lien” lenders, is either senior to, or  pari passu  with, all other Indebtedness of such Obligor.
“Second Lien Middle Market Loan Asset” means a Middle Market Loan Asset that is a Second Lien Loan Asset or a Last Out Senior Secured Loan Asset.
“Secured Party” means each of the Administrative Agent, each Lender (together with its successors and assigns), each Lender Agent, each Affected Party, each Indemnified Party, the Collateral Custodian, the Collateral Agent, the Collateral Administrator and the Account Bank.
“Senior Debt/EBITDA Ratio” means for any Obligor, the ratio of (x) senior Indebtedness (i.e., Indebtedness that is not subject to contractual or structural subordination) of such Obligor, to (y) EBITDA of such Obligor, as set forth in, or as calculated in connection with, the Underwriting Memoranda for such Loan Asset.
“Senior B Loan Asset” means, with respect to a Loan Asset (a “Combined Facility”) with a revolving loan facility (“ Revolving Facility ”) and term loan facility (“ Term Facility ”), where the Revolving Facility may be part of the same facility as the Term Facility or may be a standalone revolving loan facility, the Term Facility of such Combined Facility that, as of any date of determination, would qualify as a First Lien Loan Asset but for the seniority in right of payment of the Revolving Facility and the seniority of the Lien securing the Revolving Facility, so long as such Loan Asset satisfies the following criteria: (1) as of the related Cut-Off Date, the committed amount of the Revolving Facility is equal to or less than 25% of the Combined Facility; (2) as of the related Cut-Off Date, the ratio of (x) the sum of the
 
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committed amount of the Revolving Facility to (y) the EBITDA of the related Obligor shall not exceed 1.00:1.00; (3) as of the related Cut-Off Date, the ratio of (x) the amount of the Combined Facility, to (y) EBITDA of the related Obligor, shall not exceed 4.50:1.00; and (4) at all times, the Senior B Loan Asset has been assigned a Moody’s Recovery Rate of at least 45%.
“Senior Fee Limit” means, as of any date of determination, an amount equal to the sum of (i) the product of (a) 0.025% and (b) either (x) from the Closing Date until the first anniversary of the Closing Date, $250,000,000, or (y) at all times after the first anniversary of the Closing Date, the weighted average Aggregate Outstanding Principal Balance of all Loan Assets over the twelve month period ending on such date of determination, and (ii) $175,000.
“Senior Servicing Fees” means the fee payable to the Servicer on each Payment Date in arrears in respect of each Remittance Period, which fee shall be equal to the product of (i) 0.25%, (ii) the weighted average daily Aggregate Outstanding Principal Balance of all Eligible Loan Assets for such Remittance Period, and (iii) the actual number of days in such Remittance Period divided by 360;  provided  that so long as CGMS or any Affiliate of CGMS is acting as Servicer, the Servicer shall have the right to irrevocably waive payment of any Senior Servicing Fees payable on any Payment Date; and  provided, further  that the rate set forth in  clause (i)  hereof may be increased up to a level determined by the Majority Lenders as then reflecting the arm’s length servicing fee in the event that the Backup Servicer or other replacement Servicer is appointed pursuant to  Section 6.01(c) .
“Servicer” means at any time the Person then authorized, pursuant to Section 6.01 to service, administer, and collect on the Loan Assets and exercise rights and remedies in respect of the same.
“Servicer Advance” means a discretionary advance of funds by the Servicer (or the Borrower) to an Obligor that does not constitute a revolving advance in the ordinary course under a Revolving Loan Asset.
“Servicer Pension Plan” has the meaning assigned to that term in Section 4.03(p).
“Servicer Termination Event” means the occurrence of any one or more of the following events:
(z) any failure by the Servicer to make any payment, transfer or deposit into the Collection Account (including, without limitation, with respect to bifurcation and remittance of Interest Collections and Principal Collections), as required by this Agreement or any Transaction Document which continues unremedied for a period of two Business Days (unless such failure was due solely to an administrative error by the financial institution holding the Collection Account crediting any such payment to the wrong account and the Servicer and such financial institution work diligently to resolve as promptly as possible and in any event within two Business Days after such error was discovered);
(aa) any withdrawal by the Servicer from the Collection Account in contravention of or otherwise not in accordance with the terms of this Agreement;
(bb) any failure on the part of the Servicer duly to (i) observe or perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement or the other Transaction Documents to which the Servicer is a party (including, without limitation, any delegation of the Servicer’s duties that is not permitted by  Section 6.01  of this Agreement, but excluding a covenant that is specifically addressed by  clause (t)  below) or (ii) comply in any material respect with the Risk and Collection Policies or Servicing Standard regarding the servicing of the Collateral Portfolio,
 
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and in each case the same continues unremedied for a period of 30 days (if such failure can be remedied) after the earlier to occur of (x) the date on which written notice of such misrepresentation or failure requiring the same to be remedied shall have been given to the Servicer by the Administrative Agent, the Collateral Agent (at the direction of the Administrative Agent) or the Borrower and (y) the date on which a Responsible Officer of the Servicer acquires knowledge thereof;
(cc) the failure of the Servicer to make any payment when due (after giving effect to any related grace period) under one or more agreements for borrowed money to which it is a party in an aggregate amount in excess of $25,000,000 (or its U.S. Dollar equivalent), individually or in the aggregate, or the occurrence of any event or condition that has resulted in the acceleration of such amount of recourse debt whether or not waived;
(dd) the Servicer shall have made payments of amounts in excess of $25,000,000 in the settlement of any litigation, claim or dispute (excluding payments made from insurance proceeds); or
(ee) the effectuation of any material change in the Risk and Collection Policies without the prior written consent of the Administrative Agent where, pursuant to  Section 5.04(f) , and giving effect to the  proviso  thereto, such material change would require consent of the Administrative Agent;
(ff) a Bankruptcy Event shall occur with respect to the Servicer;
(gg) CGMS shall assign its rights or obligations as “Servicer” hereunder to any Person without the consent of each Lender Agent and the Administrative Agent (as required in the last sentence of  Section 12.04(a) );
(hh) CGMS fails to maintain the Required Asset Coverage Ratio; unless (x) on the applicable RAC Reporting Date, the Servicer provides the Administrative Agent with an Officer’s Certificate attaching a copy of a Demand that the Servicer certifies has been made and is in an amount at least equal to the amount required to cure the circumstance giving rise to such Servicer Termination Event (the “ Minimum Demand Amount ”), (y) as of the date of such Demand the Unpledged Capital Commitments equal at least 125% of the Minimum Demand Amount, and (z) the funding of at least the Minimum Demand Amount arising from such Demand occurs (and the Required Asset Coverage Ratio is maintained) not later than 10 Business Days from the date of such Demand;
(ii) CGMS permits (1) the sum of (x) Shareholders’ Equity (as reflected in its 10Q or 10K (or financial statements to the extent CGMS is not required to make such public filings) without any deductions) plus (y) without duplication of any Unpledged Capital Commitments included in the determination of clause (1)(x) above, the Unpledged Capital Commitments at the last day of any fiscal quarter, to be less than (2) the greater of (A) 40% of the total assets of CGMS and its Subsidiaries, in each case, as of the last day of such fiscal quarter (determined on a consolidated basis, without duplication, in accordance with GAAP), and (B) the sum of (i) $0 (being 80% of the aggregate net proceeds of the initial and any secondary equity offering of CGMS prior to the Closing Date), plus (ii) 80% of the net proceeds of the aggregate net proceeds of any secondary equity offering of CGMS following the Closing Date or of the proceeds of the drawing of any Unpledged Capital Commitment, plus (iii) Unpledged Capital Commitments;
 
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(jj) CGMS fails as of any date of determination to maintain (i) Unrestricted Cash plus (ii) Unpledged Capital Commitments, that are, in the aggregate, equal to or greater than the amount of principal payments due or to become due (whether scheduled, upon maturity or otherwise) under Indebtedness of the Servicer in the next 30 days of such date of determination;
(kk) CGMS fails to maintain its status as a “business development company” under the 1940 Act;
(ll) any failure by the Servicer to deliver (i) any required Servicing Report on or before the date occurring two Business Days after the date such report is required to be made or given, as the case may be, (ii) the valuations required to be delivered on a quarterly basis or an annual basis, as applicable, pursuant to the Scheduled Valuation Process set forth under Section 6.02(d)  on or before the date occurring ten Business Days after the date such valuations are required to be delivered, or (iii) any other Required Reports hereunder on or before the date occurring ten Business Days after the date such report is required to be made or given, as the case may be, in each case under the terms of this Agreement;
(mm) any representation, warranty or certification made by the Servicer in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made (other than a representation or warranty that is specifically addressed by  clause (t)  below), which has a Material Adverse Effect on the Administrative Agent or any of the Secured Parties and continues to be unremedied for a period of 30 days after the earlier to occur of (i) the date on which written notice of such incorrectness requiring the same to be remedied shall have been given to the Servicer by the Administrative Agent, the Collateral Agent (at the direction of the Administrative Agent) or the Borrower and (ii) the date on which a Responsible Officer of the Servicer acquires knowledge thereof;
(nn) any financial or other information reasonably requested by the Administrative Agent or the Collateral Agent is not provided as requested within a reasonable amount of time following such request;
(oo) the rendering against the Servicer of one or more final judgments, decrees or orders by a court or arbitrator of competent jurisdiction for the payment of money in excess individually or in the aggregate of $25,000,000, and the continuance of such judgment, decree or order unsatisfied and in effect for any period of more than 60 consecutive days without a stay of execution;
(pp) any event or series of events that would result in a “Change of Control”;
(qq) the occurrence of an Event of Default (past any applicable notice or cure period provided in the definition thereof);
(rr) any other event which has caused a Material Adverse Effect on the assets, liabilities, financial condition, business or operations of the Servicer or the ability of the Servicer to meet its obligations under the Transaction Documents to which it is a party; or
(ss) the Servicer shall breach or violate any of the representations, warranties or covenants set forth in Section 4.03(q) or  5.04(a)(ii) .
“Servicer Termination Notice” has the meaning assigned to that term in Section 6.01(b).
 
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“Servicer’s Certificate” has the meaning assigned to that term in Section 6.08(c).
“Servicing Fees” means the Senior Servicing Fee and the Subordinate Servicing Fee, collectively.
“Servicing File” means, for each Loan Asset, (a) copies of each of the Required Loan Documents and (b) any other portion of the Loan Asset File which is not part of the Required Loan Documents.
“Servicing Report” has the meaning assigned to that term in Section 6.08(b)(i).
“Servicing Standard” means, with respect to any Loan Assets included in the Collateral Portfolio, to service and administer such Loan Assets on behalf of the Secured Parties in accordance with the Risk and Collection Policies, which Risk and Collection Policies provides the servicing and administration of the Loan Assets in accordance with Applicable Law, the terms of this Agreement, the Loan Agreements, all customary and usual servicing practices for loans like the Loan Assets and, to the extent consistent with the foregoing, (a) the higher of: (A) the standards, policies and procedures that the Servicer reasonably believes to be customarily followed by institutional managers of national standing relating to assets of the nature and character of the Collateral Portfolio and (B) the same care, skill, prudence and diligence with which the Servicer services and administers loans for its own account or for the account of others; (b) with a view to maximize the value of the Loan Assets; and (c) without regard to: (i) any relationship that the Servicer or any Affiliate of the Servicer may have with any Obligor or any Affiliate of any Obligor, (ii) the Servicer’s obligations to incur servicing and administrative expenses with respect to a Loan Asset, (iii) the Servicer’s right to receive compensation for its services hereunder or with respect to any particular transaction, (iv) the ownership by the Servicer or any Affiliate thereof of any Loan Assets, (v) the ownership, servicing or management for others by the Servicer of any other loans or property by the Servicer or (vi) any relationship that the Servicer or any Affiliate of the Servicer may have with any holder of other loans of the Obligor with respect to such Loan Assets.
“Shareholders’ Equity” means, at any date, the amount determined on a consolidated basis and without duplication, and in accordance with GAAP of shareholders’ equity for CGMS and its Subsidiaries at such date.
“Side Quote” means, with respect to any Loan Asset, bid side quotes for such Loan Asset obtained from one or more of Loan Pricing Corporation, MarkIt Partners or any other nationally recognized loan pricing service selected by the Servicer and approved in writing by the Administrative Agent.
“Solvent” means, as to any Person at any time, having a state of affairs such that all of the following conditions are met: (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value of the property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in a business or a transaction, and does not propose to engage in a business or a transaction, for which such Person’s property assets would constitute unreasonably small capital.
 
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“Special Cov-Lite Loan Asset” means a Cov-Lite Loan Asset that (i) does not qualify as a Broadly Syndicated Loan Asset solely because such Loan Asset has a Tranche Size of $150,000,000 or greater but less than $200,000,000 (without consideration of reductions thereon from scheduled amortization payments), or (ii) has only one current Bid Price or a Side Quote that is based on only one current Bid Price.
“Spread” means, with respect to any Floating Rate Loan Asset as of any date of determination, (i) to the extent that such Floating Rate Loan Asset determines the applicable interest rate thereunder based on the London Interbank Offered Rate without reference to a “LIBOR floor”, the specified cash interest percentage in excess of the London Interbank Offered Rate thereunder as of such date of determination, (ii) to the extent that such Floating Rate Loan Asset determines the applicable interest rate thereunder based on a “LIBOR floor”, the specified cash interest percentage in excess of the Daily LIBOR as of such date of determination, or (iii) to the extent that such Floating Rate Loan Asset determines the applicable interest rate thereunder based on the prime rate or a rate other than the London Interbank Offered Rate or a “LIBOR floor”, the specified cash interest percentage in excess of the Daily LIBOR as of such date of determination.
“Spreadsheet” has the meaning assigned to that term in Section 7.02(b)(ii).
“State” means one of the fifty states of the United States or the District of Columbia.
“Subordinate Servicing Fees” means the fee payable to the Servicer on each Payment Date in arrears in respect of each Remittance Period, which fee shall be equal to the product of (i) 0.25%, (ii) the weighted average daily Aggregate Outstanding Principal Balance of all Eligible Loan Assets for such Remittance Period, and (iii) the actual number of days in such Remittance Period divided by 360;  provided  that so long as CGMS or any Affiliate of CGMS is acting as Servicer, the Servicer shall have the right to irrevocably waive payment of any Subordinate Servicing Fees payable on any Payment Date; and  provided, further  that the rate set forth in  clause (i)  hereof may be increased up to a level determined by the Administrative Agent in its sole and absolute discretion as then reflecting the arm’s length servicing fee in the event that the Backup Servicer or other replacement Servicer is appointed pursuant to  Section 6.01(c) .
“Subsidiary” means with respect to a person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such person.
“Substitute Eligible Loan Asset” means each Eligible Loan Asset Pledged by the Borrower to the Collateral Agent, on behalf of the Secured Parties, pursuant to  Section 2.07(a)  or  Section 2.07(e)(ii) .
“Substitution” has the meaning assigned to that term in Section 2.07(a).
“Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including interest, penalties, and additions thereto) that are imposed by any Governmental Authority.
 
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“Term Loan Asset” means a Loan Asset that is a term loan that has been fully funded and does not contain any unfunded commitment on the part of the Transferor arising from an extension of credit by the Transferor to an Obligor.
“Total Debt/EBITDA Ratio” means for any Obligor, the ratio of (x) Indebtedness of such Obligor, to (y) EBITDA of such Obligor, as set forth in, or as calculated in connection with, the Underwriting Memoranda for such Loan Asset.
“Tranche Size” means, with respect to any Broadly Syndicated Loan Asset, the tranche currently held or contemplated for purchase by the Borrower;  provided , that (i) to the extent, there are multiple  pari passu  tranches issued by an Obligor, such other tranches shall be included in the calculation of “Tranche Size” if and to the extent that the related Loan Agreement provides that (x) such tranches are governed by the same material terms, and (y) each of such tranches are each widely distributed, and (ii) the calculation of “Tranche Size” hereunder shall include any last out component (but not any second lien component) relating thereto.
“TransactionDocuments” means this Agreement, the Revolving Note(s), any Joinder Supplement, the Contribution Agreement, the Collection Account Agreement, the Fee Letters, each collateral assignment agreement and each document, instrument or agreement related to any of the foregoing.
“Transaction Fee Letter” means the Fee Letter, dated as of May 24, 2013, between Citibank, in its capacities as Administrative Agent and Collateral Agent, each Lender Agent party hereto from time to time, the Borrower and CGMS, as Servicer and Transferor, as such letter may be amended, modified, supplemented, restated or replaced from time to time.
“Transferee Letter” has the meaning assigned to that term in Section 12.04(a).
“Transferor” means CGMS as the transferor under the Contribution Agreement.
“Underlying Collateral” means, with respect to a Loan Asset, any property or other assets designated and pledged or mortgaged as collateral to secure repayment of such Loan Asset, as applicable, including, without limitation, mortgaged property or a pledge of the stock, membership or other ownership interests in the related Obligor and all proceeds from any sale or other disposition of such property or other assets.
“Underwriting Memoranda” means for any Loan Asset, the underwriting or investment approval memoranda utilized by the Transferor or the Borrower, as applicable, in evaluating and approving such Loan Asset for investment (which Underwriting Memoranda shall provide for a method for calculation of “EBITDA” and “Indebtedness” of the related Obligor).
“Undrawn Fee” has the meaning assigned to that term in Section 2.09.
“Undrawn Fee Calculation Basis” has the meaning set forth in the Transaction Fee Letter.
“Undrawn Fee Rate” means the applicable percentages set forth in the Transaction Fee Letter.
“Unfunded Revolving Commitments” means, as of any Determination Date, the aggregate amount of commitments under Revolving Loan Assets to provide additional funding thereunder, after
 
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taking into account as of any Determination Date (i) the increase or decrease of such aggregate commitments under the Loan Agreements governing such Revolving Loan Assets, (ii) the increase or reduction of such aggregate commitments resulting from the sales, substitutions and repurchases of Revolving Loan Assets under  Section 2.07  prior to such Determination Date, and (iii) the increase or decrease (as reflected in Revolving Loan Principal Collections received in the Collection Account) of the principal amount outstanding under such Revolving Loan Assets, or otherwise.
“United States” means the United States of America.
“Unitranche Loan Asset” means any Loan Asset that (i) is secured by a valid and perfected first priority Lien on substantially all of the Obligor’s assets constituting Underlying Collateral for the Loan Asset, subject to expressly permitted Liens, including any “permitted liens” as defined in the applicable Loan Agreement for such Loan Asset or such comparable definition if “permitted liens” is not defined therein, (ii) provides that the payment obligation of the Obligor on such Loan Asset is either senior to, or  pari passu  with, all other Indebtedness of such Obligor, and (iii) for which no other Indebtedness of the Obligor exists or is outstanding.
“Unmatured Event of Default” means any event that, if it continues uncured, will, with lapse of time, notice or lapse of time and notice, constitute an Event of Default.
“Unpledged Capital Commitments” means the sum of (i) any unfunded, undrawn and readily available capital commitments of shareholders of CGMS that are not pledged or subject to any Lien, including without limitation, any subscription line credit facility, shareholder’s note or similar instrument relating thereto,  plus , without duplication, (ii) the result (not to be less than zero), of (A) any unfunded, undrawn and readily available capital commitments of shareholders of CGMS that have been pledged by CGMS to a lender to secure the obligations of CGMS under a subscription line working capital credit facility in form and substance reasonably satisfactory to the Administrative Agent, where the maximum indebtedness possible under such credit facility does not exceed an amount equal to 3.33% of the undrawn capital commitments pledged as collateral therefor, minus (B) the maximum principal amount possibly outstanding under such credit facility.
“Unrated Loan Asset” means a Loan Asset that is not rated by at least two Rating Agencies and is not an Initial Unrated Loan Asset.
“Unrestricted Cash” means, for any Person, cash of such Person available for use for general corporate purposes and not held in any reserve account or legally or contractually restricted for any particular purposes.
“Unused Portion” has the meaning assigned to that term in Section 2.09.
“Updated Assigned Value” means, with respect to each Loan Asset as of any date, the value (expressed as a percentage of the Outstanding Principal Balance) of such Loan Asset reflected on the books and records of CGMS, as adjusted to the Quoted Price established pursuant to the Scheduled Valuation Process, or otherwise adjusted pursuant to any periodic valuation required by, and in accordance with, the 1940 Act and any orders of the Securities and Exchange Commission issued to CGMS, to be determined by the Board of Directors of CGMS and reviewed by its auditors;  provided  if CGMS does not report the Quoted Price established pursuant to the Scheduled Valuation Process to the Servicer, the Administrative Agent and the Backup Servicer as required pursuant to  Section 6.02(d)  (or more frequently to the extent required under the 1940 Act), the “Updated Assigned Value” of such Loan
 
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Asset shall be deemed to equal zero until CGMS provides such report; provided, in no event shall any Updated Assigned Value exceed 100%, and  provided, further , any Loan Asset that is determined to have an Updated Assigned Value equal to or greater than 97% shall be deemed to have an Assigned Value equal to 100%.
“URC Loan Asset Dividend” has the meaning assigned to that term in Section 2.07(d)(ii).
“URC Reserve Requirement” means, as of any date of determination, an amount equal to the aggregate Unfunded Revolving Commitments of all Loan Assets that are included in the Collateral Portfolio.
“Value Adjusted Assigned Value” means, with respect to any Loan Asset included in the calculation of the Borrowing Base as of any date following the occurrence of an Assigned Value Adjustment Event, the value (expressed as a percentage of the Outstanding Principal Balance) of such Loan Asset established by the Administrative Agent from time to time in its sole and absolute discretion (and the Administrative Agent shall promptly notify the Servicer of any change to Value Adjusted Assigned Value it may establish from time to time),
provided, that:
 
 	(1)	the Value Adjusted Assigned Value of any Loan Asset subject to a Material Modification under clause (i) of such defined term shall in all events equal zero;	
 
 	(2)	except with respect to a Loan Asset described in clause (1) above, the Value Adjusted Assigned Value shall not be less than any Quoted Price (when it becomes available) issued after the occurrence of the related Assigned Value Adjustment Event from a Nationally Recognized Valuation Firm selected by the Administrative Agent (at the Borrower’s expense) and retained to value such Loan Asset; and	
 
 	(3)	except with respect to a Loan Asset described in clause (1) above, in the event the Borrower disagrees with the Administrative Agent’s determination of the Value Adjusted Assigned Value, the Borrower may (at its expense) retain any Nationally Recognized Valuation Firm to value such Loan Asset, and if the value determined by such Nationally Recognized Valuation Firm is greater than the Administrative Agent’s determination of the Value Adjusted Assigned Value, such Nationally Recognized Valuation Firm’s valuation shall become the Value Adjusted Assigned Value hereunder;  provided  that until the completion of such valuation process, the Value Adjusted Assigned Value of such Loan Asset shall be the value assigned by the Administrative Agent.	
“Volcker Event” has the meaning assigned to that term in Section 8.03(a).
“Volcker Extension Deadline” has the meaning assigned to that term in Section 8.03(a).
“Volcker Rule” means Section 13 of the Bank Holding Company Act of 1956, as amended, 12 USC § 1851 (added pursuant to Section 619 of Dodd-Frank), as implemented by  Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships With, Hedge Funds and Private Equity Funds; Final Rule , 79 F.R. 5536 (January 31, 2014), and together with any other rules, regulations, interpretations and pronouncements of any Governmental Authority with respect to the foregoing.
 
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“WARF Test” means, as of any date of determination, a test that is satisfied if WARF is not greater than either (i) during the Ramp-Up Period, 3490, and (ii) after the Ramp-Up Period, either (a) if such date of determination is prior to the CQT Matrix Trigger Date, 3800, or (b) if such date of determination is on or after the CQT Matrix Trigger Date, the numeric figure selected by the Servicer by reference to the matrix set forth on  Annex D .
“WARR Test” means, as of any date of determination, a test that is satisfied if the WARR is not less than (i) if such date of determination is prior to the CQT Matrix Trigger Date, 48%, or (ii) if such date of determination is on or after the CQT Matrix Trigger Date, the “Minimum Recovery Rate” selected by the Servicer by reference to the matrix set forth on  Annex D .
“Warranty Event” means, as to any Loan Asset, the discovery (i) that as of the related Cut-Off Date for such Loan Asset there existed a breach of any representation or warranty relating to such Loan Asset (other than any representation or warranty that the Loan Asset satisfies the criteria of the definition of Eligible Loan Asset), or (ii) following the Cut-Off Date for such Loan Asset, of a Dispute.
“Warranty Loan Asset” means (i) any Loan Asset that fails to satisfy any criteria of the definition of Eligible Loan Asset as of the Cut-Off Date for such Loan Asset or a Loan Asset with respect to which a Warranty Event has occurred, or (ii) any Loan Asset, or if not affecting the full Loan Asset, the portion thereof, subject to a Dispute following the Cut-Off Date.
“Weighted Average Life” means, as of any date of determination with respect to all Eligible Loan Assets, the number of years following such date obtained by summing the products obtained for each of the Eligible Loan Assets, by multiplying: (a) the Average Life of each such Eligible Loan Asset as at such date of determination, by the Outstanding Principal Balance of such Eligible Loan Asset, and dividing such sum by: (b) the aggregate Outstanding Principal Balance of all Eligible Loan Assets.
“Weighted Average Life Test” means, as of any date of determination, that the Weighted Average Life of all Eligible Loan Assets is equal to or less than 6.0 years.
“Weighted Average Rating Factor” or “WARF” means, as of any date of determination, the number obtained by dividing (i) the sum of the products obtained for each of the Eligible Loan Assets, by multiplying (a) the Moody’s Rating Factor (as defined in  Annex E ) of each such Eligible Loan Asset as at such date of determination , ; provided  that Eligible Loan Assets comprising up to 15% of the aggregate Outstanding Principal Balance of all Eligible Loan Assets that do not have a Moody’s Rating may utilize the lower of the equivalent rating provided by S&P or Fitch as the “Moody’s Default Probability Rating” for purposes of determining the WARF under this clause (a);  by (b) the Outstanding Principal Balance of such Eligible Loan Asset, by (ii) the aggregate Outstanding Principal Balance of all Eligible Loan Assets.
“Weighted Average Recovery Ratio” or “WARR” means, as of any date of determination, the percentage obtained by dividing (i) the sum of the products obtained for each of the Eligible Loan Assets, by multiplying (a) the Moody’s Recovery Rate of each such Eligible Loan Asset as at such date of determination, by (b) the Outstanding Principal Balance of such Eligible Loan Asset, by (ii) the aggregate Outstanding Principal Balance of all Eligible Loan Assets.
“Weighted Average Spread” means, as of any date of determination with respect to all Eligible Loan Assets, the Spread obtained by summing the products obtained for each of the Eligible Loan Assets that are Floating Rate Loan Assets, by multiplying: (a) the Spread of each such Eligible Loan Asset, by the maximum committed funding amount, and dividing such sum by: (b) the aggregate maximum committed funding amounts of all Eligible Loan Assets that are Floating Rate Loan Assets.
 
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“Weighted Average Spread Test” means, as of any date of determination, a test that is satisfied if the Weighted Average Spread of all Eligible Loan Assets that are Floating Rate Loan Assets is equal to or greater than (i) if such date of determination is prior to the CQT Matrix Trigger Date, 3.50%, or (ii) if such date of determination is on or after the CQT Matrix Trigger Date, the “Minimum WAS” selected by the Servicer by reference to the matrix set forth on  Annex D .
“Yield” means with respect to any Remittance Period (or portion thereof), the sum for all Advances Outstanding for each day in such Remittance Period (or portion thereof) determined in accordance with the following formula for each such Advance:

 	  	 	  	          YR x L	
 	  	 	  	               D	
 	 	 	 	
where:	  	YR	  	=	  	the Yield Rate applicable on such day to such Advance;	
 	 	 	 	
 	  	L	  	=	  	the principal amount of such Advance on such day; and	
 	 	 	 	
 	  	D	  	=	  	360 or, to the extent the Yield Rate is the Base Rate, 365 or 366 days, as applicable;	
provided that (i) no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by Applicable Law and (ii) Yield shall not be considered paid by any distribution if at any time such distribution is later required to be rescinded by any Lender to the Borrower or any other Person for any reason including, without limitation, such distribution becoming void or otherwise avoidable under any statutory provision or common law or equitable action, including, without limitation, any provision of the Bankruptcy Code.
“Yield Rate” means, as of any date of determination, an interest rate per annum equal to
(i) to the extent the Lender is a Conduit Lender that is funding the applicable Advance or portion thereof through the issuance of Commercial Paper Notes, a rate equal to the CP Rate for such Remittance Period  plus  the Applicable Spread on such portion; or
(ii) to the extent the relevant Lender is not funding the applicable Advance or portion thereof through the issuance of Commercial Paper Notes, a rate equal to LIBOR for such date  plus  the Applicable Spread on such portion;
provided that: (x) the Yield Rate shall be the Base Rate plus the Applicable Spread for any Remittance Period for any Advance as to which a Conduit Lender has funded the making or maintenance thereof by a sale of an interest therein to any Liquidity Bank under the applicable Liquidity Agreement on any day other than the first day of such Remittance Period and without giving such Liquidity Bank at least two Business Days’ prior notice of such assignment, and (y) if any Lender Agent shall have notified the Administrative Agent that a Eurodollar Disruption Event has occurred and is continuing, the Administrative Agent shall in turn so notify the Borrower, whereupon the Yield Rate shall be equal to the
 
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Base Rate plus the Applicable Spread until such Lender Agent shall have notified the Administrative Agent that such Eurodollar Disruption Event has ceased, at which time the Yield Rate shall again be equal to Daily LIBOR for such date  plus  the Applicable Spread.
SECTION 1.02 Other Terms. All accounting terms used but not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York, and used but not specifically defined herein, are used herein as defined in such Article 9.
SECTION 1.03 Computation of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”
SECTION 1.04 Interpretation.
In each Transaction Document, unless a contrary intention appears:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person’s successors and assigns but only if such successors and assigns are not prohibited by the Transaction Documents;
(c) reference to any gender includes each other gender;
(d) reference to day or days without further qualification means calendar days;
(e) reference to any time means New York, New York time;
(f) the term “or” is not exclusive;
(g) reference to the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”;
(h) reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, waived, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefor;
(i) reference to any Applicable Law means such Applicable Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any Section or other provision of any Applicable Law means that provision of such Applicable Law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision;
(j) reference to any Event of Default shall not include any Event of Default that has been expressly waived in writing in accordance with the terms of this Agreement; and
 
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(k) where any formulation requires the determination of (i) the greater or greatest of a series of options and two of the available options yield the same result (which result is greater than the result(s) yielded by the other options, if any), then such shared result shall be the result used for such determination, (ii) the lesser or least of a series of options and two of the available options yield the same result (which result is less than the result(s) yielded by the other options, if any), then such shared result shall be the result used for such determination, (iii) the later or latest of a series of options and two of the available options yield the same result (which result is later than the result(s) yielded by the other options, if any), then such shared result shall be the result used for such determination, and (iv) the earlier or earliest of a series of options and two of the available options yield the same result (which result is earlier than the result(s) yielded by the other options, if any), then such shared result shall be the result used for such determination.
ARTICLE II.
THE FACILITY
SECTION 2.01 Revolving Note and Advances.
(a) Revolving Note. The Borrower has heretofore delivered or shall, on the date hereof (and on the terms and subject to the conditions hereinafter set forth), deliver, to each Lender Agent so requesting, at the address set forth in  Section 12.02  of this Agreement, and on the effective date of any Joinder Supplement, to each additional Lender Agent, at the address set forth in the applicable Joinder Supplement, a duly executed Revolving Note (the “ Revolving Note ”) to the extent requested by such Lender Agent, in substantially the form of  Exhibit H , in an aggregate face amount equal to the applicable Lender Group’s Group Advance Limit as of the Closing Date or the effective date of any Joinder Supplement, as applicable, and otherwise duly completed. Interest shall accrue on the Revolving Note and the Advances, and the Revolving Note and the Advances shall be payable, as described herein.
(b) Advances. On the terms and conditions hereinafter set forth, the Borrower may at its option, by delivery of a Notice of Borrowing to the Administrative Agent and each Lender Agent, from time to time on any Business Day from the Closing Date until the end of the Revolving Period (but in no event more than 2 times per calendar week), request that the Lenders make Advances to it in an amount which after giving effect to such Advances, would not cause the aggregate Advances Outstanding to exceed the Maximum Availability on such date;  provided  that with respect to an Advance proposed to be funded in connection with the addition of a Loan Asset to the Collateral Portfolio, such Advance resulted in, or results in, Collateral Quality Improvement, determined as of the CQI Advance Determination Date. Such Advances shall be used for the purposes contemplated in  Section 5.02(h)  hereof. Upon receipt of such Notice of Borrowing, the Lender Agent for each Lender Group containing one or more Conduit Lenders shall notify the Conduit Lenders in its Lender Group of the requested Advance, and such Conduit Lenders may, in their sole discretion, agree or decline to make the Advance. If any Conduit Lender declines to make all or any part of a proposed Advance, the Lender Agent for such Conduit Lender shall so notify the Liquidity Banks in its Lender Group and the applicable portion of the Advance shall be made by such Liquidity Banks in accordance with their ratable shares of the Group Advance Limit for their Lender Group. Under no circumstances shall any Conduit Lender make any Advance or shall any Liquidity Bank or any Institutional Lender be required to make any Advance if after giving effect to such Advance and the addition to the Collateral Portfolio of the Eligible Loan Assets being acquired by the Borrower using the proceeds of such Advance, (i) an Event of Default has occurred and is continuing or would result therefrom or an Unmatured Event of Default exists or would result therefrom or (ii) the aggregate Advances Outstanding would exceed the Maximum Availability. Notwithstanding anything
 
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contained in this Section 2.01 or elsewhere in this Agreement to the contrary, (A) no Liquidity Bank shall be obligated to make any Advance in an amount that would, after giving effect to such Advance, exceed such Liquidity Bank’s Commitment less the sum of (x) the aggregate outstanding amount of any Advances funded by such Liquidity Bank under such Liquidity Bank’s Liquidity Agreement plus (y) such Liquidity Bank’s ratable share of the aggregate outstanding Advances made by the Conduit Lenders in such Liquidity Bank’s Lender Group (whether or not any portion thereof has been assigned under a Liquidity Agreement), (B) no Institutional Lender shall be obligated to make any Advance in an amount that would, after giving effect to such Advance, exceed such Institutional Lender’s Commitment less the aggregate outstanding amount of any Advances funded by such Institutional Lender, (C) no Conduit Lender shall make any Advance in an amount that would, after giving effect to such Advance, result in the aggregate Advances then funded by all of the Conduit Lenders in a Lender Group exceeding the Group Advance Limit for such Lender Group then in effect and (D) no Conduit Lender shall make any Advance and no Liquidity Bank or Institutional Lender shall be required to make any Advance if after giving effect to such Advance, the aggregate amount of Advances Outstanding would exceed the Maximum Availability. Each Advance to be made hereunder shall be made ratably among the Lender Groups in accordance with their Group Advance Limits.
(c) Notations on Revolving Note. Each Lender Agent is hereby authorized to enter on a schedule attached to the Revolving Note with respect to each Lender in such Lender Agent’s Lender Group a notation (which may be computer generated) with respect to each Advance under the Revolving Note made by the applicable Lender of: (i) the date and principal amount thereof, and (ii) each repayment of principal thereof, and any such recordation, absent manifest error, shall constitute prima facie evidence of the accuracy of the information so recorded. The failure of any Lender Agent to make any such notation on the schedule attached to any Revolving Note shall not limit or otherwise affect the obligation of the Borrower to repay the Advances in accordance with their respective terms as set forth herein.
SECTION 2.02 Procedure for Advances.
(a) On any Business Day during the Revolving Period, the Borrower may request that the Lenders make Advances, subject to and in accordance with the terms and conditions of  Sections 2.01  and  2.02  and subject to the provisions of  Article III  hereof.
(b) Each Advance shall be made upon delivery of an irrevocable request for an Advance from the Borrower to the Administrative Agent and each Lender Agent, with a copy to the Collateral Agent, the Collateral Administrator and the Collateral Custodian, no later than 3:00 p.m. on the Business Day immediately prior to the proposed date of such Advance (which shall be a Business Day), or such shorter notice period as may be agreed upon by the Borrower, the Administrative Agent and the Lenders, in the form of a Notice of Borrowing. Each Notice of Borrowing shall include a duly completed Borrowing Base Certificate (updated to the date such Advance is requested and giving  pro forma  effect to the Advance requested and the use of the proceeds thereof), and shall specify:
(i) the aggregate amount of such Advance, which amount shall not cause the Advances Outstanding to exceed the Borrowing Base;  provided  that the amount of such Advance must be at least equal to $500,000;
(ii) the proposed date of such Advance and, if such Advance is to be a Fixed LIBOR Advance, the related Fixed Period (it being understood that if notice of such Advance is not provided at least two Business Days prior to the proposed Cut-Off Date, then such Advance shall be a Daily LIBOR Advance for two Business Days following which the Advance shall convert to a Fixed LIBOR Advance);
 
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(iii) with respect to an Advance proposed to be funded in connection with the Pledge of a Loan Asset, a written certification of the Servicer demonstrating that such Advance resulted in, or results in, Collateral Quality Improvement, determined as of the CQI Advance Determination Date; and
(iv) a representation that all conditions precedent for an Advance described in Article III hereof have been satisfied.
No later than 1:00 p.m. on the date of each Advance, upon satisfaction of the applicable conditions set forth in Article III, each Conduit Lender may, or the related Liquidity Banks, as applicable, and the Institutional Lenders shall, in accordance with instructions received by the Lender Agent for such Lenders from the Borrower, make available to the Borrower, in same day funds, an amount equal to such Lender’s ratable share of such Advance, by payment into the account which the Borrower has designated in writing. With respect to any Advance, no Lender shall be responsible to fund an amount greater than such Lender’s ratable share of such Advance, including if any other Lender becomes a Defaulting Lender.
(c) The Advances shall bear interest at the Yield Rate.
(d) Subject to Section 2.18 and the other terms, conditions, provisions and limitations set forth herein, the Borrower may borrow, repay or prepay and reborrow Advances without any penalty, fee or premium on and after the Closing Date and prior to the end of the Revolving Period.
(e) A determination by the Administrative Agent or any Lender Agent of the existence of any Eurodollar Disruption Event (any such determination to be communicated to the Borrower by written notice from the Administrative Agent or such Lender Agent promptly after the Administrative Agent or such Lender Agent learns of such event), or of the effect of any Eurodollar Disruption Event on its making or maintaining Advances at LIBOR, shall be conclusive absent manifest error.
(f) The obligation of each Liquidity Bank and Institutional Lender to remit its Pro Rata Share of any Advance shall be several from that of each other Liquidity Bank and Institutional Lender and the failure of any Liquidity Bank or Institutional Lender to so make such amount available to the Borrower shall not relieve any other Liquidity Bank or Institutional Lender of its obligation hereunder.
SECTION 2.03 Determination of Yield; Conversions of Advances; Limitations on Fixed LIBOR Advances.
(a) The Administrative Agent (and the Lender Agents with respect to the Conduit Lenders in their respective Lender Groups) shall determine the Yield for the Advances (including unpaid Yield related thereto, if any, due and payable on a prior Payment Date) to be paid by the Borrower on each Payment Date for the related Remittance Period and shall advise the Servicer thereof no later than the Business Day prior to the Reporting Date.
(b) The Borrower may elect from time to time to convert Fixed LIBOR Advances to Daily LIBOR Advances by giving the Administrative Agent, the Collateral Administrator and Lender Agents prior irrevocable notice of such election no later than 2:00 p.m. on the Business Day two Business Days prior to the proposed conversion date;  provided  that any such conversion of Fixed LIBOR Advances may only
 
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be made on the last day of a Fixed Period with respect thereto. The Borrower may elect from time to time to convert Daily LIBOR Advances to Fixed LIBOR Advances by giving the Administrative Agent and the Lender Agents prior irrevocable notice of such election no later than 2:00 p.m. on the second Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Fixed Period therefor);  provided  that no Daily LIBOR Advances may be converted into Fixed LIBOR Advances after the earliest to occur of an Event of Default, an Unmatured Event of Default or the Final Maturity Date.
(c) Any Fixed LIBOR Advance may be continued in whole or in part (including by combining with other Fixed LIBOR Advances that have Fixed Periods expiring on the same date or with Daily LIBOR Advances) upon the expiration of the then current Fixed Period with respect thereto by the Borrower giving prior irrevocable notice to the Administrative Agent and Lender Agents not later than 2:00 p.m. on the date that is two Business Days prior to the last day of the then current Fixed Period setting forth the length of the next Fixed Period to be applicable to such Fixed LIBOR Advance;  provided  that no Fixed LIBOR Advance may be continued after the earliest to occur of an Event of Default, an Unmatured Event of Default or the Final Maturity Date;  provided ,  further , that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Advance shall be automatically converted to a Daily LIBOR Advance on the last day of such then expiring Fixed Period.
(d) Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of Fixed LIBOR Advances and all selections of Fixed Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of Fixed LIBOR Advances allocated to each Fixed Period shall be equal to $10,000,000 or an integral multiple of $1,000,000 in excess thereof and (b) no more than ten Fixed Periods shall be outstanding at any one time.
SECTION 2.04 Remittance Procedures. On each Payment Date, the Servicer, as agent for the Administrative Agent and the Lender Agents, shall instruct the Collateral Agent (and the Collateral Agent shall instruct the Account Bank) and, if the Servicer fails to do so, the Administrative Agent may instruct the Collateral Agent (and the Collateral Agent shall instruct the Account Bank), to apply funds on deposit in the Collection Account as described in this  Section 2.04 ;  provided  that, at any time after delivery of Notice of Exclusive Control, the Administrative Agent shall instruct the Collateral Agent (and the Collateral Agent shall instruct the Account Bank) to apply funds on deposit in the Collection Account as described in this  Section 2.04 .
(a) Interest Payments Prior to the Commitment Termination Date. Prior to the occurrence of the Commitment Termination Date, the Collateral Agent shall (as directed pursuant to the first paragraph of this  Section 2.04 ) instruct the Account Bank to transfer Interest Collections held by the Account Bank in the Collection Account, in accordance with the Servicing Report, to the following Persons in the following amounts, calculated as of the most recent Determination Date, in the following order and priority:
(i) first, to the Administrative Agent for distribution to the Collateral Agent, the Collateral Custodian, the Backup Servicer, the Collateral Administrator and the Account Bank, payment in full of all accrued fees and expenses (including Backup Servicer Succession Expenses) due hereunder and under the Fee Letters; provided that fees and expenses paid pursuant to this clause  first  for the twelve month period ending on such date shall not exceed the Senior Fee Limit;
 
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(ii) second, to the Servicer, in payment in full of the accrued Senior Servicing Fees (to the extent not waived);
(iii) third, (1) if no Default Period is in effect, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender,  pro rata,  in accordance with the amounts due under this clause  third , all Yield accrued and unpaid as of the last day of the related Remittance Period, and (2) if a Default Period is in effect, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, in accordance with the Adjusted Pro Rata Shares and in accordance with the amounts due under this clause  third,  all Yield accrued and unpaid as of the last day of the related Remittance Period to Lenders constituting part of a Non-Defaulting Lender Group;
(iv) fourth, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender (other than any Defaulting Lender),  pro rata,  in accordance with the amounts due under this clause  fourth,  the Undrawn Fee that is accrued and unpaid as of the last day of the related Remittance Period;
(v) fifth, if a Default Period is in effect, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender  pro rata  with respect to each applicable Defaulting Lender, all Yield accrued and unpaid as of the last day of the related Remittance Period to such Defaulting Lenders;
(vi) sixth, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, all accrued and unpaid fees, expenses (including attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower to the Administrative Agent, any Lender Agent or any Lender under the Transaction Documents;
(vii) seventh, (1) if no Default Period is in effect, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender,  pro rata , to pay the Advances Outstanding to the extent required to satisfy any outstanding Borrowing Base Deficiency, and (2) if a Default Period is in effect, to the Administrative Agent (x) first, for distribution to each Lender Agent for the account of the applicable Lender, in accordance with the Adjusted Pro Rata Shares and to pay the Advances Outstanding to the extent required to satisfy any outstanding Borrowing Base Deficiency, and (y) second, if all Advances Outstanding of all Non-Defaulting Lenders are reduced to zero, to each Lender Agent of a Defaulting Lender Group for the account of the applicable Lender (including any Defaulting Lender),  pro rata,  to pay the Advances Outstanding to the extent required to satisfy any outstanding Borrowing Base Deficiency;
(viii) eighth, to the Servicer, in payment in full of the accrued Subordinate Servicing Fees, including any unpaid Subordinate Servicing Fees with respect to any prior Remittance Period (to the extent not waived);
(ix) ninth, to the Administrative Agent for the benefit of the Collateral Agent, Collateral Custodian, Backup Servicer, the Collateral Administrator and Account Bank in payment in full of all accrued fees and expenses (including Backup Servicer Succession Expenses) or other
 
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amounts due hereunder and under the Fee Letters to the extent not previously paid (including to the extent of any such fees and expenses in excess of the Senior Fee Limit and not paid pursuant to clause  first  above);
(x) tenth, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, to pay the Advances Outstanding in connection with any complete refinancing or termination of this Agreement in accordance with  Section 2.18(d) ;
(xi) eleventh, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender or any other Person making claim for a payment pursuant to the terms hereof, to pay any other amounts due and payable to such Persons (other than with respect to the repayment of Advances) under this Agreement and the other Transaction Documents;
(xii) twelfth, to the Servicer, in respect of all reasonable expenses (except allocated overhead) incurred in connection with the performance of its duties hereunder;
(xiii) thirteenth, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, to pay the Advances Outstanding in connection with any voluntary prepayment of Advances hereunder in accordance with  Section 2.18(b) ; and
(xiv) fourteenth, during any Release Period, to the Borrower, any remaining amounts.
(b) Principal Payments Prior to the Commitment Termination Date. Prior to the Commitment Termination Date, the Collateral Agent shall (as directed pursuant to the first paragraph of this  Section 2.04 ) instruct the Account Bank to transfer Principal Collections held by the Account Bank in the Collection Account, in accordance with the Servicing Report, to the following Persons in the following amounts, calculated as of the most recent Determination Date, in the following order and priority:
(i) first, to the Administrative Agent for distribution to the appropriate Person to pay amounts due under Section 2.04(a)(i)  to the extent not paid thereunder;
(ii) second, to the Servicer, in payment in full of the accrued Senior Servicing Fees due under Section 2.04(a)(ii) to the extent not paid thereunder;
(iii) third, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender to pay amounts due under  Section 2.04(a)(iii)  through  (viii)  (including, without limitation, any Borrowing Base Deficiency under  clause (vii) ) to the extent not paid thereunder;
(iv) fourth, to the Administrative Agent for distribution to the Collateral Agent, the Collateral Custodian, the Backup Servicer and the Account Bank, payment in full of all accrued fees and expenses (including Backup Servicer Succession Expenses) due hereunder and under the Fee Letters to the extent not previously paid;
(v) fifth, to the Administrative Agent and each Lender Agent (for the account of the applicable Lender) to pay any other amounts due and payable to such Persons (other than with respect to the repayment of Advances) under this Agreement and the other Transaction Documents to the extent not paid thereunder;
 
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(vi) sixth, to the Servicer, in respect of all reasonable expenses (except allocated overhead) incurred in connection with the performance of its duties hereunder to the extent not paid thereunder;
(vii) seventh, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, to pay the Advances Outstanding in connection with any voluntary prepayment of Advances hereunder in accordance with  Section 2.18(b) ; and
(viii) eighth, during any Release Period, to the Borrower, any remaining amounts.
(c) Payment Date Transfers Upon the Occurrence of the Commitment Termination Date. Upon the occurrence of the Commitment Termination Date or, in any case, after the declaration, or automatic occurrence, of the Final Maturity Date, the Collateral Agent shall (as directed pursuant to the first paragraph of this  Section 2.04 ) instruct the Account Bank to transfer collected funds held by the Account Bank in the Collection Account, in accordance with the Servicing Report, to the following Persons in the following amounts, calculated as of the most recent Determination Date, in the following order and priority:
(i) first, to the Administrative Agent for distribution to the Collateral Agent, the Collateral Custodian, the Backup Servicer, the Collateral Administrator and the Account Bank, payment in full of all accrued fees and expenses (including Backup Servicer Succession Expenses and Collateral Agent Expenses) due hereunder, and amounts due under the Fee Letters;
(ii) second, to the Servicer, in payment in full of the accrued Senior Servicing Fees (to the extent not waived);
(iii) third, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, pro rata,  in accordance with the amounts due under this clause  third , all Yield and the Undrawn Fee accrued and unpaid as of the last day of the related Remittance Period;
(iv) fourth, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, all accrued and unpaid fees, expenses (including attorneys’ fees, costs and expenses) and indemnity amounts payable by the Borrower to the Administrative Agent, any Lender Agent or any Lender under the Transaction Documents;
(v) fifth, to the Administrative Agent for distribution to each Lender Agent for the account of the applicable Lender, pro rata , to pay the Advances Outstanding until paid in full;
(vi) sixth, to the Administrative Agent for the benefit of the Collateral Agent, Collateral Custodian, Backup Servicer and Account Bank in payment in full of all accrued expenses or other amounts due to the extent not previously paid;
(vii) seventh, to the Servicer, in payment of the accrued Subordinate Servicing Fees (to the extent not waived) and all reasonable expenses (except allocated overhead) incurred in connection with the performance of its duties hereunder;
 
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(viii) eighth, to the Administrative Agent and each Lender Agent (for the account of the applicable Lender) to pay any other amounts due and payable to such Persons (other than with respect to the repayment of Advances) under this Agreement and the other Transaction Documents; and
(ix) ninth, to the Borrower, any remaining amounts.
(d) Insufficiency of Funds. The parties hereby agree that if the funds on deposit in the Collection Account are insufficient to pay any amounts due and payable on a Payment Date or otherwise, the Borrower shall nevertheless remain responsible for, and shall pay when due, all amounts payable under this Agreement and the other Transaction Documents in accordance with the terms of this Agreement and the other Transaction Documents, together with interest accrued as set forth in  Section 2.08(a) , from the Payment Date when due and unpaid hereunder.
SECTION 2.05 Instructions to the Collateral Agent and the Account Bank. All instructions and directions given to the Collateral Agent or the Account Bank by the Servicer, the Borrower or the Administrative Agent pursuant to  Section 2.04  shall be in writing (including instructions and directions transmitted to the Collateral Agent or the Account Bank by telecopy or e-mail), and such written instructions and directions shall be delivered with a written certification that such instructions and directions are in compliance with the provisions of  Section 2.04 . The Servicer and the Borrower shall transmit to the Administrative Agent by telecopy or e-mail a copy of all instructions and directions given to the Collateral Agent or the Account Bank by such party pursuant to  Section 2.04  substantially currently with the delivery thereof. The Administrative Agent shall transmit to the Servicer and the Borrower by telecopy or e-mail a copy of all instructions and directions given to the Collateral Agent or the Account Bank by the Administrative Agent, pursuant to  Section 2.04  substantially currently with the delivery thereof. If either the Administrative Agent or Collateral Agent disagrees with the computation of any amounts to be paid or deposited by the Borrower or the Servicer under  Section 2.04  or otherwise pursuant to this Agreement, or upon their respective instructions, it shall so notify the Borrower, the Servicer and the Collateral Agent in writing and in reasonable detail to identify the specific disagreement. If such disagreement cannot be resolved within two Business Days, the determination of the Administrative Agent as to such amounts shall be conclusive and binding on the parties hereto absent manifest error. In the event the Collateral Agent or the Account Bank receives instructions from the Servicer or the Borrower which conflict with any instructions received by the Administrative Agent, the Collateral Agent or the Account Bank, as applicable, (i) shall rely on and follow the instructions given by the Administrative Agent, and (ii) shall promptly notify the Borrower, the Servicer and the Administrative Agent of such conflicting instructions.
SECTION 2.06 Borrowing Base Deficiency Payments.
(a) In addition to any other obligation of the Borrower to cure any Borrowing Base Deficiency pursuant to the terms of this Agreement, if, on any day prior to the Collection Date, any Borrowing Base Deficiency exists, then the Borrower may eliminate such Borrowing Base Deficiency in its entirety by effecting one or more (or any combination thereof) of the following actions in order to eliminate such Borrowing Base Deficiency as of such date of determination: (i) deposit cash in United States dollars into the Principal Collection Subaccount, (ii) repay Advances (together with any Breakage Fees and all accrued and unpaid costs and expenses of the Administrative Agent, the Lender Agents and the Lenders, in each case in respect of the amount so prepaid), (iii) sell Eligible Loan Assets in accordance with  Section 2.07 , or (iv) during the Revolving Period, Pledge additional Eligible Loan Assets.
 
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(b) No later than 2:00 p.m. on the Business Day prior to the proposed repayment of Advances or Pledge of additional Eligible Loan Assets pursuant to  Section 2.06(a) , the Borrower (or the Servicer on its behalf) shall deliver (i) to the Administrative Agent and Lender Agents (with a copy to the Collateral Agent, the Collateral Administrator and the Collateral Custodian), notice of such repayment or Pledge and a duly completed Borrowing Base Certificate, updated to the date such repayment or Pledge is being made and giving  pro forma  effect to such repayment or Pledge, and (ii) to the Administrative Agent, if applicable, a description of any Eligible Loan Asset and each Obligor of such Eligible Loan Asset to be Pledged and added to the updated Loan Asset Schedule. Any notice pertaining to any repayment or any Pledge pursuant to this  Section 2.06 shall be irrevocable.
(c) Until such time as any Borrowing Base Deficiency has been cured in full and no other Event of Default or Unmatured Event of Default has occurred and is continuing, the Borrower shall not request the right to transfer (by sale, dividend, distribution or otherwise), and the Administrative Agent and Collateral Agent shall not grant the release of Lien or the transfer of any Eligible Loan Asset from the Collateral Portfolio.
SECTION 2.07 Substitution and Sale of Loan Assets; Affiliate Transactions.
(a) Substitutions. The Borrower may, with the consent of the Administrative Agent in its sole discretion, replace any Loan Asset (a “ Substitution ”)  so long as  (i) such Substitution results in Collateral Quality Improvement, and (ii) no Event of Default has occurred and is continuing, or would result from such Substitution, and no event has occurred and is continuing, or would result from such Substitution, which constitutes an Unmatured Event of Default or a Borrowing Base Deficiency; provided  that the Borrower may effect a Substitution as necessary to cure a Borrowing Base Deficiency and any related Unmatured Event of Default arising therefrom; and (iii) simultaneously therewith, the Borrower Pledges (in accordance with all of the terms and provisions contained herein) a Substitute Eligible Loan Asset. The Administrative Agent shall use all commercially reasonable efforts to respond to any approval request in a timely manner.
(b) Discretionary Sales. The Borrower may sell Loan Assets from time to time, without the consent of the Administrative Agent to Persons including the Transferor or its Affiliates (a “ Discretionary Sale ”);  so long as  (i) the purchase price in cash deposited in the Collection Account with respect to such Discretionary Sale is at least equal to the Outstanding Loan Balance and otherwise complies with the pricing requirements set forth in clause (f) below, (ii) 100% of the net proceeds of such Discretionary Sale shall be deposited into the Collection Account to be disbursed in accordance with  Section 2.04  hereof, (iii) such Discretionary Sale results in Collateral Quality Improvement, and (iv) no event has occurred and is continuing, or would result from such Discretionary Sale, which constitutes an Event of Default and no event has occurred and is continuing, or would result from such Discretionary Sale, which constitutes an Unmatured Event of Default or a Borrowing Base Deficiency;  provided that the Borrower may effectuate a Discretionary Sale as necessary to cure in full (simultaneously with the application of the amounts deposited under  clauses (i)  and  (ii)  above and any substitution under  Section 2.07(a) ) a Borrowing Base Deficiency and any Unmatured Event of Default arising therefrom so long as such Loan Asset is sold for an amount at least equal to the Outstanding Loan Balance.
(c) Optional Sales. The Borrower may on any Optional Sale Date, prepay all or portion of the Advances Outstanding in connection with the sale or other transfer of all or a portion of the Loan Assets in connection with a Permitted Securitization or a Permitted Refinancing (each, an “ Optional Sale ”), without the consent of the Administrative Agent;  so long as (i) except as otherwise agreed by the
 
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Administrative Agent pursuant to Section 2.07(j)(i)(A), the Borrower shall have provided to the Administrative Agent (with a copy to the Collateral Agent, the Collateral Administrator and the Collateral Custodian) not more than 45 days’ and at least 10 days’ prior written notice of its intent to effect an Optional Sale on the Optional Sale Date, (ii) the purchase price in cash deposited in the Collection Account with respect to the Optional Sale is at least equal to the aggregate Outstanding Loan Balance of the Loan Assets being sold and purchased in connection therewith, and otherwise complies with the pricing requirements set forth in  clause (h)  below), (iii) 100% of the net proceeds of such Optional Sale shall be deposited into the Collection Account to be disbursed in accordance with  Section 2.04  hereof, and (iv) no event has occurred and is continuing, or would result from such Optional Sale, which constitutes an Event of Default and no event has occurred and is continuing, or would result from such Optional Sale, which constitutes an Unmatured Event of Default or a Borrowing Base Deficiency; provided , that so long as all other conditions in this  clause (c)  and the Agreement are satisfied in full, the Administrative Agent, in its sole and absolute discretion (upon the delivery of a Notice of Permitted Securitization in the form attached as  Exhibit A setting forth the proposed offset and demonstrating compliance with  clause (iv)  above in connection therewith), may permit the offset (a “ Permitted Offset ”) by the Servicer against the required purchase price to be deposited in the Collection Account under  clause (ii)  or  (iii)  of this  Section 2.07(c)  (and, if applicable,  clause (i)  of  Section 2.07(h)  below) by an amount not to exceed the Minimum Credit Enhancement applicable to the Loan Assets subject to an Optional Sale.
(d) Loan Asset Dividend; URC Loan Asset Dividend.
(i) The Borrower may, on any Loan Asset Dividend Date, distribute by dividend to its member a portion of the Loan Assets (each, a “ Loan Asset Dividend ”), without the consent of the Administrative Agent;  so long as (A) except as otherwise agreed by the Administrative Agent pursuant to  Section 2.07(j)(i)(B) , the Borrower shall have provided to the Administrative Agent (with a copy to the Collateral Agent, the Collateral Administrator and the Collateral Custodian) not more than 45 days’ and at least 10 days’ prior written notice of its intent to effect a Loan Asset Dividend on the Loan Asset Dividend Date, (B) no event has occurred and is continuing, or would result from such Loan Asset Dividend, which constitutes an Event of Default and no event has occurred and is continuing, or would result from such Loan Asset Dividend, which constitutes an Unmatured Event of Default or a Borrowing Base Deficiency, and (C) except as provided in  Section 2.07(j)(ii)(B) , not more than five days’ and at least two days’ prior to the related Loan Asset Dividend Date the Borrower and the Servicer shall have delivered to the Administrative Agent a written certificate (a “ Loan Asset Dividend Certificate ”) that (x) lists all Loan Assets to be subject to the Loan Asset Dividend, and (y) certifies on a  pro forma  basis as of the Loan Asset Dividend Date that such Loan Asset Dividend (after giving effect thereto) results in Collateral Quality Improvement.
(ii) The Borrower may either (x) if the Commitment Termination Date occurs before the date that is 10 Business Days before the Scheduled Commitment Termination Date, during the 10 Business Day period following the occurrence of the Commitment Termination Date or, (y) if the Commitment Termination Date occurs on or after the date that is 10 Business Days before the Scheduled Commitment Termination Date, during the 10 Business Day period prior to the Scheduled Commitment Termination Date, make a one-time distribution by dividend to its member of all or any Loan Assets with Unfunded Revolving Commitments (the “ URC Loan Asset Dividend ”), without the consent of the Administrative Agent;  so long as  (A) the Borrower shall have provided to the Administrative Agent (with a copy to the Collateral Agent, the Collateral
 
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Administrator and the Collateral Custodian) at least two Business Days’ prior written notice of its intent to effect an URC Loan Asset Dividend, (B) no event has occurred and is continuing, or would result from such URC Loan Asset Dividend, which constitutes an Event of Default and no event has occurred and is continuing, or would result from such URC Loan Asset Dividend, which constitutes an Unmatured Event of Default or a Borrowing Base Deficiency, and (C) at least two Business Days’ prior to the URC Loan Asset Dividend, the Borrower and the Servicer shall have delivered to the Administrative Agent a written certificate that lists all Loan Assets to be subject to the URC Loan Asset Dividend. The Borrower and the Servicer (on behalf of the Borrower) shall pay the reasonable legal fees and expenses of the Administrative Agent, the Collateral Agent, the Collateral Custodian and the Collateral Administrator in connection with any URC Loan Asset Dividend (including, but not limited to, expenses incurred in connection with the release of the Lien of the Collateral Agent, on behalf of the Secured Parties, and any other party having an interest in the Loan Asset in connection with dividend).
(e) Purchase or Substitution of Warranty Loan Assets. If on any day a Loan Asset is (or becomes) a Warranty Loan Asset, subject to the proviso below, no later than 10 days following the earlier of knowledge by the Borrower or the Servicer of such Loan Asset becoming a Warranty Loan Asset or receipt by the Borrower from the Administrative Agent or the Servicer of written notice thereof, the Borrower (or the Servicer on the Borrower’s behalf) shall either:
(i) make a deposit to the Collection Account (for allocation pursuant to Section 2.04) in immediately available funds in an amount equal to (x) the Advance Date Assigned Value multiplied by the principal amount then outstanding of such Loan Asset, plus on such amount interest from the Cut-Off Date at the Yield Rate, and (y) any expenses or fees with respect to such Loan Asset and costs and damages incurred by the Administrative Agent, any Lender Agent or any Lender in connection with any violation by such Loan Asset of any predatory or abusive lending law which is an Applicable Law (a notification regarding the amount of such expenses or fees to be provided by the Administrative Agent to the Borrower); provided  that the Administrative Agent shall have the right to determine whether the amount so deposited is sufficient to satisfy the foregoing requirements; or
(ii) with the prior written consent of the Administrative Agent, in its sole discretion, substitute for such Warranty Loan Asset a Substitute Eligible Loan Asset;
provided, that so long as (i) no Event of Default, Unmatured Event of Default or CQT Non-Qualification Period is continuing or would result therefrom, (ii) the Commitment Termination Date has not occurred and is not scheduled or anticipated to occur within the later of (A) 30 days from the related Cut-Off Date or (B) 10 days from the date on which a Responsible Officer of the Borrower or the Servicer had knowledge of such Loan Asset being or becoming a Warranty Loan Asset (a “ Cure Date ”), (iii) the Servicer believes in good faith that such breach of representation or warranty is capable of being rectified prior to the relevant Cure Date, and (iv) the Servicer delivers a written notice to the Administrative Agent setting forth that a breach of one or more representations or warranties relating to a Loan Asset existed as of its related Cut-Off Date (and describing such breach), and that the Servicer is actively seeking to rectify such breach prior to the relevant Cure Date,  then (x) the Servicer shall not be required to take the actions set forth in clauses (i) or (ii) above until the relevant Cure Date therefor, and (y) if, prior to such Cure Date the Servicer and the Borrower each certifies to the Administrative Agent that all breaches of representations or warranties that resulted in the occurrence of a Warranty Event have been cured in full, then such Loan Asset shall no longer be considered a “Warranty Loan Asset” hereunder;  provided , that until such time, such Loan Asset shall not constitute an Eligible Loan Asset.
 
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(f) Release of Lien. Upon confirmation by the Administrative Agent and Collateral Agent, as the case may be, of:
(i) the delivery by the Borrower of a Substitute Eligible Loan Asset pursuant to a Substitution under Section 2.07(a) and the fulfillment of the other terms and conditions set forth in  Section 2.07(a), (g), (h) and (i) ;
(ii) the deposit of the purchase price in cash into the Collection Account pursuant to a Discretionary Sale set forth in Section 2.07(b)  and the fulfillment of the other terms and conditions set forth in  Section 2.07(b), (g), (h) and (i) ;
(iii) the deposit of the purchase price in cash into the Collection Account pursuant to an Optional Sale set forth in Section 2.07(c)  and the fulfillment of the other terms and conditions set forth in  Section 2.07(c), (g), (h) and (i) ;
(iv) the deposit of the amounts set forth in Section 2.07(e)(i) in cash into the Collection Account or the delivery by the Borrower of a Substitute Eligible Loan Asset for each Warranty Loan Asset under  Section 2.07(e)(ii)  and the fulfillment of the other terms and conditions set forth in  Section 2.07(e), (g), (h) and (i) ;
(v) the recordation of the dividend of Loan Assets subject to the Loan Asset Dividend on the books and records of the Borrower and the fulfillment of the other terms and conditions set forth in  Section 2.07(d)(i), (g), (h) and (i) ;
(vi) the recordation of the dividend of Loan Assets subject to the URC Loan Asset Dividend on the books and records of the Borrower and the fulfillment of the other terms and conditions set forth in  Section 2.07(d)(ii) ;
(such date of fulfillment, a “Release Date”),
then, the Warranty Loan Asset, or the Loan Assets and related Portfolio Assets subject of the Substitution, Discretionary Sale, Optional Sale, Loan Asset Dividend or URC Loan Asset Dividend, as the case may be, shall be removed from the Collateral Portfolio and, as applicable, the Substitute Eligible Loan Asset and related Portfolio Assets shall be included in the Collateral Portfolio. Subject to compliance by the Borrower with the immediately prior sentence, on the Release Date of each subject Loan Asset or Warranty Loan Asset, as the case may be, the Collateral Agent, for the benefit of the Secured Parties, shall automatically and without further action be deemed to release to the Borrower, without recourse, representation or warranty of any kind or nature, all the right, title and interest and any Lien of the Collateral Agent, for the benefit of the Secured Parties in, to and under the Loan Asset subject of the Substitution, Discretionary Sale, Optional Sale, Loan Asset Dividend, URC Loan Asset Dividend or the Warranty Loan Asset under this  Section 2.07  and any related Portfolio Assets and all future monies due or to become due with respect thereto.
(g) Conditions to Sales, Substitutions, Repurchases and Loan Asset Dividend. Any Substitution, Discretionary Sale, Optional Sale or Loan Asset Dividend, or transfer of a Warranty Loan Asset effected pursuant to  Sections 2.07(a) ,  (b) ,  (c) ,  (d)(i)  or  (e) shall be subject to the satisfaction of the following conditions (as certified in writing to the Administrative Agent and Collateral Agent by the Borrower):
(i) the Borrower shall deliver a Borrowing Base Certificate to the Administrative Agent in connection with (and reflecting) such sale, substitution or repurchase;
 
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(ii) the Borrower shall deliver a list of all Loan Assets to be sold, substituted, repurchased or subject to dividend;
(iii) no selection procedures adverse to the interests of the Administrative Agent, the Lender Agents or the Lenders were utilized by the Borrower in the selection of the Loan Assets to be sold, repurchased, substituted or subject to dividend;
(iv) except with respect to (x) an Optional Sale requiring the additional notice set forth in Section 2.07(c) and (y) a Loan Asset Dividend requiring the additional notice set forth in  Section 2.07(d)(i) , the Borrower shall give two Business Days’ notice of such sale, substitution or repurchase;
(v) the Borrower shall notify the Administrative Agent of any amount to be deposited into the Collection Account in connection with any sale, substitution or repurchase;
(vi) the representations and warranties contained in Sections 4.01, 4.02 and 4.03 hereof shall continue to be correct in all material respects, except to the extent relating to an earlier date;
(vii) any repayment of Advances Outstanding in connection with any sale, substitution or repurchase of Loan Assets hereunder shall comply with the requirements set forth in  Section 2.18 ;
(viii) with respect to any Warranty Loan Asset, the Borrower shall have made a claim under Section 6.1 of the Contribution Agreement for a repurchase therefor;
(ix) except with respect to a transfer of a Warranty Loan Asset, such Substitution, Discretionary Sale, Optional Sale or Loan Asset Dividend, as the case may be, results in Collateral Quality Improvement;
(x) the Borrower and the Servicer (on behalf of the Borrower) shall pay the reasonable legal fees and expenses of the Administrative Agent, the Collateral Agent, the Account Bank, the Collateral Administrator and the Collateral Custodian in connection with any such sale, substitution, repurchase or dividend (including, but not limited to, expenses incurred in connection with the release of the Lien of the Collateral Agent, on behalf of the Secured Parties, and any other party having an interest in the Loan Asset in connection with such sale, substitution, repurchase or dividend);
(xi) except as otherwise provided in Section 2.07(j)(ii)(B), with respect to a proposed Loan Asset Dividend, the Borrower and the Servicer shall have delivered, not more than five days’ and at least two days’ prior to the related Loan Asset Dividend Date, a Loan Asset Dividend Certificate; and
(xii) with respect to a proposed Loan Asset Dividend, following the effectuation thereof as of the Loan Asset Dividend Date, the Administrative Agent shall be satisfied that such Loan Asset Dividend results in Collateral Quality Improvement.
 
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(h) Affiliate Transactions. Notwithstanding anything to the contrary set forth herein or in any other Transaction Document, no Transferor (or any Affiliate thereof) shall reacquire from the Borrower and the Borrower shall not transfer to the Transferor or any Affiliate of the Transferor, and neither the Transferor nor any of its Affiliates will have a right or ability to purchase, any Loan Asset unless (i) such transfer is pursuant to the terms of the Contribution Agreement applicable to Warranty Loan Assets, or on an arms’ length basis and (other than in the case of a Loan Asset Dividend or an URC Loan Asset Dividend) for an acquisition price in cash (subject to any Permitted Offset, if applicable, under the proviso to  Section 2.07(c) ) equal to the greater of (x) the Outstanding Loan Balance, and (y) the fair market value, of such Loan Asset, (ii) such transfer is pursuant to (and in compliance with the terms, conditions and requirements elsewhere set forth in) this  Section 2.07 , and (iii) to the extent any Loan Asset is sold for less than the Outstanding Loan Balance thereof in cash, the prior written consent of the Administrative Agent has been obtained.
(i) Limitations on Repurchases and Substitutions.
(i) The Outstanding Principal Balance of all Loan Assets (other than Warranty Loan Assets) sold to the Transferor or any Affiliate thereof pursuant to  Section 2.07(b)  or substituted pursuant to  Section 2.07(a)  during the 12-month period immediately preceding the proposed date of sale or substitution (or such lesser number of months as shall have elapsed as of such date) does not exceed 20% (excluding Credit Revised Loan Assets) of the highest aggregate Outstanding Principal Balance of any month during such 12-month period (or such lesser number of months as shall have elapsed as of such date).
(ii) The Outstanding Principal Balance of all Loan Assets subject to clause (i) or (iii) of the definition of “Assigned Value Adjustment Event” (other than Warranty Loan Assets) sold or transferred to the Transferor (or any Affiliate thereof) or substituted pursuant to  Section 2.07(a)  during the 12-month period immediately preceding the proposed date of sale or substitution (or such lesser number of months as shall have elapsed as of such date) does not exceed 10% of the highest aggregate Outstanding Principal Balance of any month during such 12-month period (or such lesser number of months as shall have elapsed as of such date).
(iii) True Contribution. Notwithstanding anything in this Section 2.07, the Borrower shall not, and the Servicer shall not on the Borrower’s behalf, purchase, sell or substitute any Loan Asset in contravention with the assumptions set forth in the legal opinion of (i) Latham & Watkins LLP, as special counsel to the Borrower, issued in connection with the Transaction Documents and relating to the issues of substantive consolidation and “true contribution” of the Loan Assets, and (ii) Richards, Layton & Finger, P.A., as special counsel to the Borrower, issued in connection with the Transaction Documents and relating to the issue of “true contribution” of the Loan Assets.
(j) Permitted Securitizations.
(i) The Administrative Agent may, in its sole and absolute discretion, waive the notice required to be delivered pursuant to (A)  Section 2.07(c)(i)  with respect to any Optional Sale or (B)  Sections 2.07(d)(i)(A)  with respect to any Loan Asset Dividend to be made in connection with a Permitted Securitization.
 
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(ii) The delivery of a Notice of Permitted Securitization in the form set forth in Exhibit A on or prior to the second Business Day prior to the closing of the applicable Permitted Securitization shall be deemed to satisfy the requirement to deliver, if and to the extent applicable:
(A) a Notice of Reduction pursuant to Section 2.18(b);
(B) a Loan Asset Dividend Certificate pursuant to Sections 2.07(d)(i) and 2.07(g)(xi);
(C) the notice, if any, required to be delivered pursuant to Section 2.07(g)(iv); and
(D) the certifications and notices otherwise required to be delivered pursuant to (but not the other conditions set forth in)  Section 2.07(g) ,
in each case with respect to any repayment of Advances, Loan Asset Dividend or Optional Sale to be made in connection with, and substantially contemporaneously with the closing of, such Permitted Securitization.
SECTION 2.08Payments and Computations, Etc.
(a) All amounts to be paid or deposited by the Borrower or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof so that funds are received by the Lenders no later than 1:00 p.m. on the day when due in lawful money of the United States (including, with respect to Foreign Currency Loan Assets, pursuant to Hedging Agreements) in immediately available funds to the Collection Account or such other account as is designated by the Administrative Agent. The Borrower or the Servicer, as applicable, shall, to the extent permitted by law, pay to the Secured Parties interest on all amounts not paid or deposited when due to any of the Secured Parties hereunder at 2.25%  per annum  above the Base Rate (other than with respect to any Advances outstanding, which shall accrue at the Yield Rate), payable on demand, from the date of such nonpayment until such amount is paid in full (as well after as before judgment);  provided  that such interest rate shall not at any time exceed the maximum rate permitted by Applicable Law. Any Obligation hereunder shall not be reduced by any distribution of any portion of Available Collections if at any time such distribution is rescinded or required to be returned by any Lender to the Borrower or any other Person for any reason. All computations of interest and all computations of Yield and other fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed, other than calculations with respect to the Base Rate, which shall be based on a year consisting of 365 or 366 days, as applicable.
(b) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of Yield or any fee payable hereunder, as the case may be.
 
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(c) If any Advance requested by the Borrower and approved by the Administrative Agent and the Lender Agents pursuant to Section 2.02  is not for any reason whatsoever, except as a result of the gross negligence or willful misconduct of, or failure to fund such Advance on the part of, the Lenders, the Administrative Agent or an Affiliate thereof as determined in a final decision by a court of competent jurisdiction, made or effectuated, as the case may be, on the date specified therefor, the Borrower shall indemnify such Lender against any loss, cost or expense incurred by such Lender related thereto (other than any such loss, cost or expense solely due to the gross negligence or willful misconduct or failure to fund such Advance on the part of the Lenders, the Administrative Agent or an Affiliate thereof as determined in a final decision by a court of competent jurisdiction), including, without limitation, any loss (including cost of funds and reasonable out-of-pocket expenses but excluding lost profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund Advances or maintain the Advances. Any such Lender shall provide to the Borrower documentation setting forth the amounts of any loss, cost or expense referred to in the previous sentence, such documentation to be conclusive absent manifest error.
SECTION 2.09 Undrawn Fee. The Borrower shall pay, in accordance with Section 2.04, pro rata to each Lender (either directly or through the applicable Lender Agent), an undrawn fee (the “ Undrawn Fee ”) payable in arrears for each Remittance Period, equal to the sum of the products for each day during such Remittance Period of (i) one divided by 360, (ii) the applicable Undrawn Fee Rate on such day, and (iii) the Undrawn Fee Calculation Basis on such day minus the Advances Outstanding on such day (the amount set forth in this clause (iii), the “ Unused Portion ”).
SECTION 2.10 Increased Costs; Capital Adequacy.
(a) If, due to either (i) the introduction of or any change that becomes effective following the date hereof (including, without limitation, any change by way of imposition or increase of reserve requirements) in or in the interpretation, administration or application following the date hereof of any Applicable Law (including, without limitation, any law or regulation resulting in any interest payments paid to any Lender under this Agreement being subject to any Tax, except for Indemnified Taxes and Excluded Taxes), in each case whether foreign or domestic, including under Basel III or Dodd-Frank, or (ii) the compliance with any guideline or request following the date hereof from any central bank or other Governmental Authority (whether or not having the force of law), including under Basel III or Dodd-Frank, there shall be any increase in the cost to the Administrative Agent, any Lender, any Lender Agent, any Liquidity Bank or any Affiliate, participant, successor or assign thereof (each of which shall be an “ Affected Party ”) of agreeing to make or making, funding or maintaining any Advance (or any reduction of the amount of any payment (whether of principal, interest, fee, compensation or otherwise) to any Affected Party hereunder), as the case may be, or there shall be any reduction in the amount of any sum received or receivable by an Affected Party under this Agreement, under any other Transaction Document or any Liquidity Agreement, the Borrower shall, from time to time, after written demand by the Administrative Agent (which demand shall be accompanied by a statement setting forth in reasonable detail the basis for such demand), on behalf of such Affected Party, pay to the Administrative Agent, on behalf of such Affected Party, additional amounts sufficient to compensate such Affected Party for such increased costs or reduced payments within 10 days after such demand;  provided  that the amounts payable under this  Section 2.10  shall be without duplication of amounts payable under  Section 2.11  and shall not include any Excluded Taxes.
(b) If either (i) the introduction of or any change that becomes effective following the date hereof in or in the interpretation, administration or application following the date hereof of any law,
 
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guideline, rule or regulation, directive or request or (ii) the compliance by any Affected Party with any law, guideline, rule, regulation, directive or request following the date hereof, from any central bank, any Governmental Authority or agency, including, without limitation, compliance by an Affected Party with any request or directive regarding capital adequacy, including under Basel III or Dodd-Frank, has or would have the effect of reducing the rate of return on the capital of any Affected Party, as a consequence of its obligations hereunder or any related document or arising in connection herewith or therewith to a level below that which any such Affected Party could have achieved but for such introduction, change or compliance (taking into consideration the policies of such Affected Party with respect to capital adequacy), by an amount deemed by such Affected Party to be material, then, from time to time, after demand by such Affected Party (which demand shall be accompanied by a statement setting forth in reasonable detail the basis for such demand and certifying that such demand is being made as a general policy of such Affected Party in the majority of similar transactions in which such claim had or would have an impact on such Affected Party’s rate of return, capital requirements or other economic loss), the Borrower shall pay the Administrative Agent on behalf of such Affected Party such additional amounts as will compensate such Affected Party for such reduction. For the avoidance of doubt, any increase in cost or reduction in Yield with respect to any Affected Party caused by regulatory capital allocation adjustments due to FAS 166, 167 and subsequent statements and interpretations shall constitute a circumstance on which such Affected Party may base a claim for reimbursement under this  Section 2.10 .
(c) If as a result of any event or circumstance similar to those described in clause (a) or (b) of this Section 2.10, (i) any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of Advances hereunder, then within ten days after demand by such Affected Party, the Borrower shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts payable or paid by it, or (ii) the Administrative Agent (whether in its own judgment or, if Citibank is no longer serving as Administrative Agent, at the request of the Majority Lenders) deems it necessary or appropriate to obtain a credit rating on the Revolving Notes and the Advances, the Borrower shall (x) provide (as promptly as possible and in any event no later than 60 days following receipt by the Borrower of such reasonable request) at least one Rating Agency designated by the Administrative Agent with all information and documents reasonably requested by such Rating Agency (to the extent such information or documents are in the possession of or reasonably available to the Borrower) and otherwise cooperate with such Rating Agency’s review of the Transaction Documents and transactions contemplated hereby, and (y) pay the costs and expenses of such Rating Agency in respect of the rating of the Revolving Notes and the Advances.
(d) For avoidance of doubt, in connection with the interpretation of clause (a) and (b) of this Section 2.10, any regulatory changes, rules, guidelines or directives under or issued in connection with Basel III or Dodd-Frank will be considered as a “change” hereunder, and will not be treated as having been adopted or having come into effect before the date hereof.
(e) In determining any amount provided for in this Section 2.10, the Affected Party may use any reasonable averaging and attribution methods. The Administrative Agent, on behalf of any Affected Party making a claim under this  Section 2.10 , shall submit to the Borrower a certificate setting forth in reasonable detail the basis for and the computations of such additional or increased costs, which certificate shall be conclusive absent manifest error.
(f) Failure or delay on the part of any Affected Party to demand compensation pursuant to this Section 2.10 shall not constitute a waiver of such Affected Party’s right to demand or receive such compensation.
 
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SECTION 2.11 Taxes.
(a) All payments made by an Obligor in respect of a Loan Asset and all payments made by the Borrower or made by the Servicer on behalf of the Borrower under this Agreement will be made free and clear of and without deduction or withholding for or on account of any Taxes. If any Taxes are required to be withheld from any amounts payable to any Indemnified Party, then the amount payable to such Person will be increased (the amount of such increase, the “ Additional Amount ”) such that every net payment made under this Agreement after withholding for or on account of any Taxes (including, without limitation, any Taxes on such increase) is not less than the amount that would have been paid had no such deduction or withholding been made. The foregoing obligation to pay Additional Amounts with respect to payments required to be made by the Borrower or Servicer under this Agreement will not, however, apply with respect to Excluded Taxes, and no Borrower or Servicer shall have an obligation to indemnify any Lender for Excluded Taxes.
(b) The Borrower will indemnify from funds available to it pursuant to Section 2.04 (and to the extent the funds available for indemnification provided by the Borrower are insufficient the Servicer, on behalf of the Borrower, will indemnify) each Indemnified Party for the full amount of Taxes payable by such Person in respect of Additional Amounts and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. All payments in respect of this indemnification shall be made within 10 days from the date a written invoice therefor is delivered to the Borrower.
(c) Within 30 days after the date of any payment by the Borrower or by the Servicer on behalf of the Borrower of any Taxes, the Borrower or the Servicer, as applicable, will furnish to the Administrative Agent and the Lender Agents at the applicable address set forth on this Agreement, appropriate evidence of payment thereof.
(d) Each Lender (including any assignee thereof) that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “ Non-U.S. Lender ”) shall deliver to the Borrower and the Servicer two copies of either U.S. Internal Revenue Service Form W-8BEN (claiming the benefits of an applicable tax treaty), W-8IMY, W-8EXP or W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest” a statement substantially in the form of  Exhibit R  to the effect that such Lender is eligible for an exemption from withholding of U.S. taxes under Section 871(h) or 881(c) of the Code and a Form W-8BEN, or any subsequent versions thereof or successors thereto, in every case with any required attachments and properly completed and duly executed and claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower under this Agreement. In addition, each Lender (including any assignee thereof) that is not a Non-U.S. Lender shall deliver to the Borrower and the Servicer two copies of U.S. Internal Revenue Service Form W-9, properly completed and duly executed and claiming complete exemption, or shall otherwise establish an exemption, from U.S. backup withholding. Such forms shall be delivered by each Lender on or before the date it becomes a party to this Agreement. In addition, each Lender shall deliver such forms promptly upon receiving notice of the obsolescence, expiration or invalidity of any form previously delivered by such Lender. Each Lender shall promptly notify the Borrower and the Servicer at any time it determines that it is no longer in a position to provide any previously delivered certificate to the
 
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Borrower or the Servicer (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Lender shall not be required to deliver any form pursuant to this paragraph that such Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower and the Servicer, at the time or times prescribed by applicable law and reasonably requested by the Borrower or the Servicer, such properly completed and executed documentation or information prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate (or otherwise permit the Borrower and the Servicer to determine the applicable rate of withholding),  provided  that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Lender.
(f) If any Lender determines, in its reasonable discretion, that it has received a refund of any Taxes for which it was indemnified by the Borrower pursuant to this  Section 2.11  or with respect to which the Borrower or the Servicer has paid Additional Amounts pursuant to this  Section 2.11 or Section 2.10 , it shall pay to the Borrower or the Servicer, as applicable, an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or the Servicer under this  Section 2.11  or  Section 2.10  with respect to the Taxes or Additional Amounts giving rise to such refund), net of all reasonable out-of-pocket expenses (including additional Taxes, if any) of such Lender, as the case may be, incurred in obtaining such refund, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund)
(g) Without prejudice to the survival of any other agreement of the Borrower and the Servicer hereunder, the agreements and obligations of the Borrower and the Servicer contained in this  Section 2.11  shall survive the termination of this Agreement.
SECTION 2.12 Collateral Assignment of Agreements. The Borrower hereby collaterally assigns to the Collateral Agent, for the benefit of the Secured Parties, all of the Borrower’s right and title to and interest in, to and under (but not any obligations under) the Contribution Agreement (and any UCC financing statements filed under or in connection therewith), the Loan Agreements related to each Loan Asset, all other agreements, documents and instruments evidencing, securing or guarantying any Loan Asset and all other agreements, documents and instruments related to any of the foregoing but excluding any Excluded Amounts or Retained Interest (the “ Assigned Documents ”). In furtherance and not in limitation of the foregoing, the Borrower hereby collaterally assigns to the Collateral Agent, for the benefit of the Secured Parties, its right to indemnification under  Article IX  of the Contribution Agreement. The Borrower confirms that until the Collection Date the Collateral Agent (at the direction of the Administrative Agent) on behalf of the Secured Parties shall have the sole right to enforce the Borrower’s rights and remedies under the Contribution Agreement and any UCC financing statements filed under or in connection therewith for the benefit of the Secured Parties. The parties hereto agree that such collateral assignment to the Collateral Agent, for the benefit of the Secured Parties, shall terminate upon the Collection Date.
SECTION 2.13 Grant of a Security Interest. To secure the prompt, complete and indefeasible payment in full when due, whether by lapse of time, acceleration or otherwise, of the Obligations and the performance by the Borrower of all of the covenants and obligations to be performed by it pursuant to
 
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this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, the Borrower hereby (a) collaterally assigns and pledges to the Collateral Agent, on behalf of the Secured Parties, and (b) grants a security interest to the Collateral Agent, on behalf of the Secured Parties, in all of the Borrower’s right, title and interest in, to and under (but none of the obligations under) all of the Collateral Portfolio, whether now existing or hereafter arising or acquired by the Borrower, and wherever the same may be located. For the avoidance of doubt, the Collateral Portfolio shall not include any Excluded Amounts, and the Borrower does not hereby assign, pledge or grant a security interest in any such amounts. Anything herein to the contrary notwithstanding, (a) the Borrower shall remain liable under the Collateral Portfolio to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Collateral Agent, for the benefit of the Secured Parties, of any of its rights in the Collateral Portfolio shall not release the Borrower from any of its duties or obligations under the Collateral Portfolio, and (c) none of the Administrative Agent, the Collateral Agent, any Lender (nor its successors and assigns), any Lender Agent, any Liquidity Bank nor any Secured Party shall have any obligations or liability under the Collateral Portfolio by reason of this Agreement, nor shall the Administrative Agent, the Collateral Agent, any Lender (nor its successors and assigns), any Lender Agent, any Liquidity Bank nor any Secured Party be obligated to perform any of the obligations or duties of the Borrower thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.
SECTION 2.14 Evidence of Debt. The Administrative Agent shall maintain, solely for this purpose as the agent of the Borrower, at its address referred to in  Section 12.02  a copy of each assignment and acceptance agreement and participation agreement delivered to and accepted by it and a register for the recordation of the names and addresses and interests of the Lenders (the “ Register ”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Administrative Agent, each Lender and each Lender Agent shall treat each person whose name is recorded in the Register as a Lender under this Agreement for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender Agent at any reasonable time and from time to time upon reasonable prior notice. If a Lender sells a participation, the Administrative Agent shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Loan or other obligations under the Transaction Documents (the “ Participant Register ”);  provided  that the Administrative Agent shall have no obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive and binding for all purposes, absent manifest error, and the Administrative Agent shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.
SECTION 2.15 Survival of Representations and Warranties. It is understood and agreed that the representations and warranties set forth in  Sections 4.01 ,  4.02  and  4.03  are made and are true and correct on the date of this Agreement and on each Cut-Off Date unless such representations and warranties are made as of a specific date.
 
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SECTION 2.16 Release of Loan Assets.
(a) The Borrower may obtain the release of (i) any Loan Asset (and the related Portfolio Assets pertaining thereto) removed from the Collateral Portfolio pursuant to a Loan Asset Dividend or an URC Loan Asset Dividend or sold or substituted in accordance with the applicable provisions of  Section 2.07  and any Portfolio Assets pertaining to such Loan Asset and (ii) any Loan Asset or any other asset in the Collateral Portfolio that expires by its terms and all amounts in respect thereof have been paid in full by the related Obligor and deposited in the Collection Account. The Collateral Agent, for the benefit of the Secured Parties, shall at the sole expense of the Borrower and at the direction of the Administrative Agent, execute such documents and instruments of release as may be prepared by the Servicer on behalf of the Borrower, give notice of such release to the Collateral Custodian (in the form of  Exhibit M ) (unless the Collateral Custodian and Collateral Agent are the same Person) and take other such actions as shall reasonably be requested by the Borrower to effect such release of the Lien created pursuant to this Agreement. Upon receiving such notification by the Collateral Agent as described in the immediately preceding sentence, if applicable, the Collateral Custodian shall deliver the Required Loan Documents to the Borrower.
(b) Promptly after the Collection Date has occurred, the Collateral Agent (and to the extent that the Borrower identifies Liens held by such Persons, any Lender, Lender Agent or the Administrative Agent), at the direction of the Administrative Agent shall release to the Borrower, for no consideration but at the sole expense of the Borrower, its remaining interests in the Portfolio Assets, free and clear of any Lien resulting solely from an act by the Collateral Agent (and to the extent that the Borrower identifies Liens held by such Persons, any Lender, Lender Agent or the Administrative Agent), but without any other representation or warranty, express or implied, by or recourse against the Collateral Agent, any Lender, any Lender Agent or the Administrative Agent.
SECTION 2.17 Treatment of Amounts Deposited by the Borrower. Amounts deposited by the Borrower in the Collection Account pursuant to  Section 2.07  on account of Loan Assets shall be treated as payments of Principal Collections or Interest Collections, as applicable, on Loan Assets hereunder.
SECTION 2.18 Mandatory and Voluntary Prepayments; Termination.
(a) On each of the 4th and 8th Payment Dates following the Scheduled Commitment Termination Date and on the Scheduled Maturity Date, the Borrower shall reduce the Advances Outstanding by depositing in the Collection Account an amount equal to the Amortization Principal Reduction Amount applicable to each such Payment Date.
(b) Except as expressly permitted or required herein (including, without limitation, pursuant to (A) Section 2.06, with respect to any repayment necessary to cure a Borrowing Base Deficiency, and (B)  Section 2.07(j)(ii)(A) , with respect to any repayment in connection with a Permitted Securitization), Advances may only be prepaid in whole or in part at the option of the Borrower at any time by delivering a Notice of Reduction (which notice shall include a Borrowing Base Certificate) to the Administrative Agent, the Collateral Agent and the Lender Agents at least three Business Days prior to such reduction. Upon any prepayment, the Borrower shall also pay in full any Breakage Fees (solely to the extent such prepayment occurs on any day other than a Payment Date) and other accrued and unpaid costs and expenses of Administrative Agent, the Lender Agents and Lenders related to such prepayment;  provided  that no reduction in Advances Outstanding shall be given effect unless (i) sufficient funds have been remitted to pay all such amounts in full, as determined by the Administrative Agent, in its sole discretion and (ii) no event has occurred or would result from such prepayment which would constitute an Event of
 
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Default or an Unmatured Event of Default. The Administrative Agent shall apply amounts received from the Borrower pursuant to this  Section 2.18(b)  to the payment of any Breakage Fees and to the  pro rata  reduction of the Advances Outstanding. Any notice relating to any repayment pursuant to this  Section 2.18(b)  shall be irrevocable.
(c) The Borrower may, at its option, permanently reduce the Aggregate Commitments hereunder upon not less than 15 Business Days’ prior written notice to the Administrative Agent and the Lender Agents, subject to the payment of any Borrowing Base Deficiency resulting from such permanent reduction, together with accrued and unpaid Yield and Breakage Fees (if any) relating thereto, all accrued and unpaid costs and expenses of the Administrative Agent, the Lender Agents and Lenders, pro rata  to each Lender Agent (for the account of the applicable Lender);  provided,  in no event shall the Borrower have the right under this  Section 2.18(c)  to permanently reduce Aggregate Commitments below $250,000,000 without the prior written consent of the Majority Lenders. Upon the effectuation of any reduction in Aggregate Commitments in accordance with this  Section 2.18(c) , the Administrative Agent shall distribute to each Lender Agent a revised  Annex A  indicating the  pro rata  reduction of each Liquidity Bank’s and Institutional Lender’s Commitment effectuated under this  Section 2.18(c)  (unless a non- pro rata  allocation is otherwise agreed to in writing by any Liquidity Bank or Institutional Lender in its sole discretion).
(d) The Borrower may, at its option, terminate this Agreement and the other Transaction Documents upon 15 Business Days’ prior written notice to the Administrative Agent and the Lender Agents and upon payment in full of all outstanding Advances; all accrued and unpaid Yield; any Breakage Fees; all accrued and unpaid costs and expenses of the Administrative Agent, the Lender Agents and Lenders and payment of all other Obligations (other than unmatured contingent indemnification obligations). Any termination of this Agreement shall be subject to  Section 12.05 .
SECTION 2.19 Collections and Allocations.
(a) The Servicer shall direct any agent or administrative agent for any Loan Asset to remit all cash Collections with respect to such Loan Asset, and, if applicable, to direct the Obligor with respect to such Loan Asset to remit all cash Collections with respect to such Loan Asset directly to the Collection Account and all other Collections as directed by the Collateral Agent. The Borrower and the Servicer shall take commercially reasonable steps to ensure that only funds constituting cash Collections relating to Loan Assets shall be deposited into the Collection Account
(b) The Servicer shall promptly identify any Collections received as being on account of Interest Collections, Principal Collections or other Available Collections and shall transfer, or cause to be transferred, all Available Collections received directly by it to the Collection Account by the close of business two Business Days after such Collections are received. Upon the transfer of Available Collections to the Collection Account, the Servicer shall segregate Principal Collections and Interest Collections and direct the Account Bank to transfer the same to the Principal Collection Subaccount and the Interest Collection Subaccount, respectively. The Servicer shall further include a statement as to the amount of Principal Collections and Interest Collections on deposit in the Principal Collection Subaccount and the Interest Collection Subaccount on each Reporting Date in the Servicing Report delivered pursuant to  Section 6.08(b) .
(c) On the Cut-Off Date with respect to any Loan Asset, the Servicer will deposit into the Collection Account all Available Collections received in respect of Eligible Loan Assets being transferred to and included as part of the Collateral Portfolio on such date.
 
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(d) With the prior written consent of the Administrative Agent (a copy of which will be provided by the Servicer to the Collateral Agent and the Account Bank), (i) prior to any Notice of Exclusive Control, the Servicer may withdraw from the Collection Account any deposits thereto constituting Excluded Amounts, or (ii) from and after any Notice of Exclusive Control, the Servicer may request the Administrative Agent to, and the Administrative Agent shall, withdraw from the Collection Account and deliver to the Servicer any deposits thereto constituting Excluded Amounts, in each case, if the Servicer has, prior to such withdrawal and consent or request and consent, as applicable, delivered to the Administrative Agent and each Lender Agent a report setting forth the calculation of such Excluded Amounts in form and substance reasonably satisfactory to the Administrative Agent and each Lender Agent.
(e) Prior to any Notice of Exclusive Control, the Servicer shall, pursuant to written instruction (which may be in the form of standing instructions), direct the Collateral Agent (and the Collateral Agent shall direct the Account Bank) to invest, or cause the investment of, funds on deposit in the Collection Account in Permitted Investments, from the date of this Agreement until the Collection Date. Absent any such written instruction, such funds shall not be invested. A Permitted Investment acquired with funds deposited in the Collection Account shall mature not later than the Business Day immediately preceding any Payment Date, and shall not be sold or disposed of prior to its maturity, unless the Servicer determines in its good faith commercial judgment that there is substantial risk of material deterioration of such Permitted Investment. All such Permitted Investments shall be registered in the name of the Account Bank or its nominee for the benefit of the Administrative Agent or Collateral Agent, and otherwise comply with assumptions of the legal opinions of Latham & Watkins LLP and Richards, Layton & Finger, P.A., each dated the Closing Date and delivered in connection with this Agreement;  provided  that compliance shall be the responsibility of the Borrower and the Servicer and not the Collateral Agent and Account Bank. All income and gain realized from any such investment, as well as any interest earned on deposits in the Collection Account shall be distributed in accordance with the provisions of  Article II  hereof. In the event the Borrower or Servicer direct the funds to be invested in investments which are not Permitted Investments, the Borrower shall deposit in the Collection Account (with respect to investments made hereunder of funds held therein), as the case may be, an amount equal to the amount of any actual loss incurred, in respect of any such investment, immediately upon realization of such loss. None of the Account Bank, the Collateral Agent, the Administrative Agent, any Lender Agent or any Lender shall be liable for the amount of any loss incurred, in respect of any investment, or lack of investment, of funds held in the Collection Account, other than with respect to fraud or their own gross negligence or willful misconduct as determined in a final decision by a court of competent jurisdiction. The parties hereto acknowledge that the Collateral Agent or the Account Bank or any of their respective Affiliates may receive compensation with respect to the Permitted Investments.
(f) Until the Collection Date, neither the Borrower nor the Servicer shall have any rights of direction or withdrawal, with respect to amounts held in the Collection Account, except to the extent explicitly set forth in  Section 2.04 , this  Section 2.19 , and Section 2.20 .
SECTION 2.20 Reinvestment of Principal Collections.
On the terms and conditions hereinafter set forth as certified in writing to the Collateral Agent, the Administrative Agent and the Lender Agents, prior to the end of the Revolving Period, the Servicer may, to the extent of any Principal Collections on deposit in the Principal Collection Subaccount:
(a) withdraw such funds for the purpose of reinvesting in additional Eligible Loan Assets to be Pledged hereunder; provided that the following conditions are satisfied:
(i) all conditions precedent set forth in Section 3.04 have been satisfied;
 
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(ii) no Servicer Termination Event or Event of Default has occurred and is continuing, or would result from such withdrawal and reinvestment, and no Unmatured Event of Default or Borrowing Base Deficiency exists or would result from such withdrawal and reinvestment;
(iii) the representations and warranties contained in Sections 4.01, 4.02 and 4.03 hereof shall continue to be correct in all material respects, except to the extent relating to an earlier date;
(iv) the Servicer provides same day written notice to the Administrative Agent and the Collateral Agent by facsimile or email (to be received no later than 1:00 p.m. on such day) of the request to withdraw Principal Collections and the amount of such request;
(v) the notice required in clause (iv) above shall be accompanied by a Disbursement Request and a Borrowing Base Certificate, each executed by the Borrower and a Responsible Officer of the Servicer; and
(vi) the Collateral Agent provides to the Administrative Agent by facsimile (to be received no later than 1:30 p.m. on that same day) a statement reflecting the total amount on deposit as of the opening of business on such day in the Principal Collection Subaccount; or
(b) withdraw such funds for the purpose of making payments in respect of the Advances Outstanding at such time in accordance with and subject to the terms of  Section 2.18 .
Upon the satisfaction of the applicable conditions set forth in this Section 2.20 (as certified by the Borrower to the Account Bank, Collateral Agent and the Administrative Agent), the Collateral Agent shall direct the Account Bank to release funds from the Principal Collection Subaccount to the Servicer, and the Account Bank shall release such funds as directed, in an amount not to exceed the lesser of (A) the amount requested by the Servicer and (B) the amount on deposit in the Principal Collection Subaccount on such day.
SECTION 2.21 Extension of Scheduled Commitment Termination Date. The Borrower may, within 60 days but not less than 45 days prior to the Scheduled Commitment Termination Date, make a request to extend the date set forth in the definition of “Scheduled Commitment Termination Date” for an additional period of one year. The Scheduled Commitment Termination Date may be extended by one year by mutual agreement among the Administrative Agent, each Lender, the Borrower, the Servicer and each of the other parties hereto and in conformance with  Section 12.01(b)  (such extension, the “ Initial Extension ”). Following such Initial Extension, the Borrower may, within 60 days but not less than 45 days prior to the Scheduled Commitment Termination Date (as revised by the Initial Extension), make a request to extend the date set forth in the definition of “Scheduled Commitment Termination Date” (as revised by the Initial Extension) for an additional period of one year. The Scheduled Commitment Termination Date (as revised by the Initial Extension) may be extended by one year upon the mutual agreement among the Administrative Agent, each Lender, the Borrower, the Servicer and each of the other parties hereto and in conformance with  Section 12.01(b)  (such extension, the “ Second Extension ”).
 
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The effectiveness of either the Initial Extension or the Second Extension shall be conditioned upon the payment in immediately available funds of an additional fee to be agreed among the Administrative Agent, each Lender, the Borrower, the Servicer and each of the other parties hereto. The Borrower confirms that each other party hereto, in their sole and absolute discretion, without regard to the value or performance of the Loan Assets or any other factor, may elect not to extend the Scheduled Commitment Termination Date.
In connection with the Initial Extension or the Second Extension, unless the parties expressly indicate to the contrary, the Scheduled Maturity Date shall be automatically extended by the same extension period, in conformance with  Section 12.01(b) .
SECTION 2.22 Defaulting Lenders. If any Liquidity Bank or Institutional Lender becomes a Defaulting Lender, then the provisions of this  Section 2.22  will apply to the applicable Defaulting Lender Group until the Default Period has ended, to the extent permitted by Applicable Law:
(a) Each such Defaulting Lender’s right to approve or disapprove any amendment, waiver, or consent with respect to this Agreement shall be restricted as set forth in the definition of Majority Lenders, Required Lenders and  Section 12.01 .
(b) Until such time as the Default Excess of any such Defaulting Lender Group has been reduced to zero, any prepayment of the aggregate Advances outstanding will be applied to the Advances of the Non-Defaulting Lender Groups in accordance with Section 2.04(a)  and  (b)  in accordance with the Adjusted Pro Rata Shares.
(c) The amount of each such Defaulting Lender’s Commitment and Advances will be excluded for purposes of calculating the Undrawn Fee, and each such Defaulting Lender will not be entitled to receive any Undrawn Fee in connection with such Defaulting Lender’s Commitment for any Default Period relating to such Defaulting Lender.
(d) All or any part of each such Defaulting Lender’s participation in Advances will be reallocated among the Non-Defaulting Lender Groups in accordance with their respective Adjusted Pro Rata Shares, but only to the extent that (i) the conditions set forth in  Section 3.02  are satisfied at the time of such reallocation (and, unless the Borrower has otherwise notified the Administrative Agent at such time, the Borrower will be deemed to have represented and warranted that such conditions are satisfied at such time); and (ii) such reallocation does not cause the aggregate Advances of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. No such reallocation will constitute a waiver or release of any claim of any party under this Agreement against a Defaulting Lender arising from that Lender’s having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.
(e) If each of the Administrative Agent, the Servicer and the Borrower agree that a Defaulting Lender has adequately remedied all matters that resulted in it becoming a Defaulting Lender, then the Advances of the Lender Groups will be readjusted to reflect the inclusion of such Defaulting Lender’s Commitment and on such date such Defaulting Lender shall purchase at par so much of the Advances of the other Lender Groups or take such other actions as the Administrative Agent determines to be necessary to cause the aggregate Advances outstanding to be held by the Lender Groups in accordance with their respective Commitments and Pro Rata Shares (without giving effect to  Section 2.22(d) ), whereupon such Lender will cease to be a Defaulting Lender;  provided  that notwithstanding  Section 2.18(b) , the Borrower shall not be liable for any Breakage Fees that may be incurred in connection with such readjustment of Advances.
 
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(f) No amount of the Commitment of any Liquidity Bank or Institutional Lender will be increased or otherwise affected by, and, except as otherwise expressly provided in this  Section 2.22 , performance by the Borrower of its obligations under this Agreement and the other Transaction Documents will not be excused or otherwise modified as a result of, any Funding Default or the operation of this  Section 2.22 . The rights and remedies against a Defaulting Lender under this  Section 2.22  are in addition to other rights and remedies that the Borrower may have against such Defaulting Lender with respect to any Funding Default and that the Administrative Agent or any Lender, Lender Agent or Lender Group may have against such Defaulting Lender with respect to any Funding Default.
ARTICLE III.
CONDITIONS PRECEDENT
SECTION 3.01 Conditions Precedent to Effectiveness.
(a) This Agreement shall be effective upon, and no Lender shall be obligated to make any Advance hereunder from and after the Closing Date, nor shall any Lender, the Collateral Custodian, the Account Bank, the Backup Servicer, the Collateral Administrator or the Administrative Agent be obligated to take, fulfill or perform any other action hereunder, until, the satisfaction of the following conditions precedent, as determined in the sole discretion of, or waived in writing by, the Administrative Agent and the Lead Arranger:
(i) this Agreement, each Liquidity Agreement, each Hedging Agreement, each collateral assignment agreement (including, without limitation, the assignment of the Contribution Agreement) and all other Transaction Documents and all other agreements and opinions of counsel listed on  Schedule I  hereto or counterparts hereof or thereof shall have been duly executed by, and delivered to, the parties hereto and thereto and the Administrative Agent shall have received such other documents, instruments, agreements and legal opinions as any Lender Agent shall reasonably request in connection with the transactions contemplated by this Agreement, on or prior to the Closing Date, each in form and substance reasonably satisfactory to the Administrative Agent;
(ii) all reasonable up-front expenses and fees (including legal fees, any fees required under the Fee Letters) that are invoiced at or prior to the Closing Date shall have been paid in full;
(iii) all other acts and conditions (including, without limitation, the obtaining of any necessary consents and regulatory approvals and the making of any required filings, recordings or registrations) required to be done and performed and to have happened prior to the execution, delivery and performance of this Agreement and all related Transaction Documents and to constitute the same legal, valid and binding obligations, enforceable in accordance with their respective terms, shall have been done and performed and shall have occurred in due and strict compliance with all Applicable Law;
(iv) in the reasonable judgment of the Administrative Agent, there has not been any change after the date hereof in Applicable Law which adversely affects any Lender’s or the
 
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Administrative Agent’s ability to enter into the transactions contemplated by the Transaction Documents or any Material Adverse Effect or material disruption in the financial, banking or commercial loan or capital markets generally;
(v) any and all information submitted to the Administrative Agent by the Borrower, the Transferor, the Servicer, Carlyle Management or any of their Affiliates is true, accurate, complete in all material respects and not misleading in any material respect;
(vi) the representations and warranties contained in Sections 4.01, 4.02 and 4.03 are true and correct in all material respects, and there exists no breach of any covenant on and as of the Closing Date (other than any representation and warranty that is made as of a specific date);
(vii) CGMS has received an aggregate amount equal to or exceeding $150,000,000 in (x) net cash proceeds, plus (y) Unpledged Capital Commitments pursuant to one or more equity private placements;
(viii) the Administrative Agent shall have received all documentation and other information requested by the Administrative Agent in its sole discretion or required by regulatory authorities with respect to the Borrower, the Transferor and the Servicer under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act, all in form and substance reasonably satisfactory to the Administrative Agent and each Lender Agent;
(ix) no material adverse change on the business, assets, financial conditions or performance of the Servicer and its subsidiaries, including the Borrower, on a consolidated basis, or any material portion of the initial proposed Eligible Loan Assets has occurred;
(x) the results of Administrative Agent’s legal due diligence relating to the Transferor, the Borrower, the Servicer, the Eligible Loan Assets and the transactions contemplated hereunder are satisfactory to Administrative Agent;
(xi) each applicable Lender Agent shall have received a duly executed copy of its Revolving Note, in a principal amount equal to the Commitment of the related Lender;
(xii) Each Liquidity Bank whose commercial paper is being rated by one or more Rating Agency shall have received, to the extent required under the terms of such CP Lender’s program documents, the written confirmation of each such Rating Agency that the execution and delivery of this Agreement will not result in a withdrawal or downgrading of the then-current rating of such commercial paper by such Rating Agency;
(xiii) The Collection Account (including the Principal Collection Subaccount and Interest Collection Subaccount thereunder) has been established pursuant to the Collection Account Agreement; and
(xiv) the Borrower has a valid ownership interest in the agreed-upon initial pool of Eligible Loan Assets (as set forth in  Schedule IV  as of the Closing Date).
 
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(b) By its execution and delivery of this Agreement, each of the Borrower and the Servicer hereby certifies that each of the conditions precedent to the effectiveness of this Agreement set forth in this  Section 3.01  have been satisfied.
SECTION 3.02 Conditions Precedent to All Advances. Each Advance (including the Initial Advance, except as explicitly set forth below) to the Borrower from the Lenders shall be subject to the further conditions precedent that:
(a) On the related Advance Date of such Advance, the following statements shall be true and correct, and the Borrower by accepting any amount of such Advance shall be deemed to have certified that:
(i) the Servicer (on behalf of the Borrower) shall have delivered to the Administrative Agent and each Lender Agent (with a copy to the Collateral Custodian, the Collateral Administrator and the Collateral Agent) no later than 3:00 p.m. on the Business Day immediately prior to the date of such Advance: (A) a Notice of Borrowing, and (B) a Borrowing Base Certificate;
(ii) if the Advance is in connection with the Pledge of an Eligible Loan Asset, the Borrower shall have delivered to the Collateral Custodian (with a copy to the Administrative Agent), no later than 12:00 p.m. on the related Advance Date, (w) a Loan Asset Schedule, (x) a Loan Assignment in the form of  Exhibit A  to the Contribution Agreement (including Schedule I thereto) and containing such additional information as may be reasonably requested by the Administrative Agent; and (y) a faxed or e-mailed copy of the duly executed original promissory notes of the Loan Assets (and, in the case of any Noteless Loan Asset, a fully executed assignment agreement) and (z) if any Loan Assets are closed in escrow, a certificate (in the form of  Exhibit J ) from the closing attorneys of such Loan Assets certifying the possession of the Required Loan Documents;  provided  that, notwithstanding the foregoing, the Borrower shall cause the Loan Asset Checklist and the Required Loan Documents to be in the possession of the Collateral Custodian and the Backup Servicer within five Business Days of any related Advance Date as to any Loan Assets;
(iii) the representations and warranties contained in Sections 4.01, 4.02 and 4.03 are true and correct in all material respects, and there exists no breach of any covenant before and after giving effect to the Advance to take place on such Advance Date and to the application of proceeds therefrom, on and as of such day as though made on and as of such date (other than any representation and warranty that is made as of a specific date);
(iv) on and as of such Advance Date, after giving effect to such Advance and the addition to the Collateral Portfolio of the Eligible Loan Assets being acquired by the Borrower using the proceeds of such Advance, the Advances Outstanding does not exceed the Borrowing Base;
(v) no Event of Default or Unmatured Event of Default has occurred and is continuing, or would result from such Advance or application of proceeds therefrom;
(vi) no Borrowing Base Deficiency exists or would result from such Advance;
 
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(vii) no event has occurred and is continuing, or would result from such Advance, which constitutes a Servicer Termination Event or any event which, if it continues uncured, will, with notice or lapse of time, constitute a Servicer Termination Event;
(viii) since the Closing Date, no material adverse change has occurred in the ability of the Servicer, the Transferor or the Borrower to perform their respective obligations under any Transaction Document;
(ix) no Liens exist in respect of Taxes which are prior to the lien of the Collateral Agent on the Eligible Loan Assets to be Pledged on such Advance Date; and
(x) all terms and conditions of the Contribution Agreement required to be satisfied in connection with the assignment of each Eligible Loan Asset being Pledged hereunder on such Advance Date (and the Portfolio Assets related thereto), including, without limitation, the perfection of the Borrower’s interests therein, shall have been satisfied in full, and all filings (including, without limitation, UCC filings) required to be made by any Person and all actions required to be taken or performed by any Person in any jurisdiction to give the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest (subject only to Permitted Liens) in such Eligible Loan Assets and the Portfolio Assets related thereto and the proceeds thereof shall have been made, taken or performed.
(b) On or prior to such applicable Advance Date, the Servicer shall have provided to the Administrative Agent (which may be provided electronically) the Loan Asset Schedule set forth on  Schedule IV  with respect to each of the Eligible Loan Assets identified in the applicable Loan Asset Schedule for inclusion in the Collateral Portfolio on the applicable Advance Date.
(c) No Applicable Law shall prohibit, and no order, judgment or decree of any federal, State or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of such Advances by any Lender or the proposed Pledge of Eligible Loan Assets in accordance with the provisions hereof.
(d) Neither the Commitment Termination Date nor the Final Maturity Date shall have occurred.
(e) The Borrower shall have paid all reasonable fees then required to be paid, including all fees required hereunder and under the applicable Fee Letters and shall have reimbursed the Lenders, the Administrative Agent, each Lender Agent, the Collateral Custodian, the Collateral Administrator, the Account Bank and the Collateral Agent for all invoiced fees, costs and expenses of closing the transactions contemplated hereunder and under the other Transaction Documents, including the reasonable attorney fees of outside counsel and any other legal and document preparation costs incurred by the Lenders, the Administrative Agent and each Lender Agent.
(f) On or prior such Advance, the Minimum Credit Enhancement shall have been established.
(g) Solely with respect to the Initial Advance, the Borrower shall have delivered evidence satisfactory to the Administrative Agent that the Borrower (i) has obtained all licenses and approvals under the laws of the States of New York necessary to own its assets and to transact the business in which it is engaged, and (ii) is duly qualified, and in good standing under the laws of the State of New York.
 
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The failure of the Borrower to satisfy any of the foregoing conditions precedent in respect of any Advance shall give rise to a right of the Administrative Agent and the applicable Lender Agent, which right may be exercised at any time on the demand of the applicable Lender Agent, to rescind the related Advance and direct the Borrower to pay to the applicable Lender Agent for the benefit of the applicable Lender an amount equal to the Advances made during any such time that any of the foregoing conditions precedent were not satisfied or waived in writing.
SECTION 3.03 Advances Do Not Constitute a Waiver. No Advance made hereunder shall constitute a waiver of any condition to any Lender’s obligation to make such an advance unless such waiver is in writing and executed by such Lender.
SECTION 3.04 Conditions to Pledges of Loan Assets. Each Pledge of an additional Eligible Loan Asset pursuant to Section 2.06 , a Substitute Eligible Loan Asset pursuant to  Section 2.07(a)  or  (e) , an additional Eligible Loan Asset pursuant to  Section 2.20  or any other Pledge of a Loan Asset hereunder shall be subject to the further conditions precedent that (as certified to the Collateral Agent by the Borrower):
(a) the Servicer (on behalf of the Borrower) shall have delivered to the Administrative Agent and each Lender Agent (with a copy to the Collateral Custodian, the Collateral Administrator and the Collateral Agent) no later than 12:00 p.m. on the related Cut-Off Date: (A) a Borrowing Base Certificate, (B) a Loan Asset Schedule and (C) a Loan Assignment in the form of  Exhibit A  to the Contribution Agreement (including Schedule I thereto) and containing such additional information as may be reasonably requested by the Administrative Agent;
(b) the Borrower shall have delivered to the Collateral Custodian (with a copy to the Administrative Agent and the Backup Servicer), no later than 12:00 p.m. on the related Cut-Off Date, a faxed or e-mailed copy of the duly executed original promissory notes of the Loan Assets (and, in the case of any Noteless Loan Asset, a fully executed assignment agreement) and if any Loan Assets are closed in escrow, a certificate (in the form of  Exhibit J ) from the closing attorneys of such Loan Assets certifying the possession of the Required Loan Documents;  provided  that, notwithstanding the foregoing, the Borrower shall cause the Loan Asset Checklist and the Required Loan Documents to be in the possession of the Collateral Custodian and the Backup Servicer within five Business Days of any related Cut-Off Date as to any Loan Assets;
(c) no Liens exist in respect of Taxes which are prior to the lien of the Collateral Agent on the Eligible Loan Assets to be Pledged on such Cut-Off Date;
(d) all terms and conditions of the Contribution Agreement required to be satisfied in connection with the assignment of each Eligible Loan Asset being Pledged hereunder on such Cut-Off Date (and the Portfolio Assets related thereto), including, without limitation, the perfection of the Borrower’s interests therein, shall have been satisfied in full, and all filings (including, without limitation, UCC filings) required to be made by any Person and all actions required to be taken or performed by any Person in any jurisdiction to give the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest (subject only to Permitted Liens) in such Eligible Loan Assets and the Portfolio Assets related thereto and the proceeds thereof shall have been made, taken or performed;
 
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(e) no Event of Default or Unmatured Event of Default exists, or would result from such Pledge (other than, with respect to any Pledge of an Eligible Loan Asset necessary to cure a Borrowing Base Deficiency in accordance with  Section 2.06  or  Section 2.07 , an Unmatured Event of Default arising solely pursuant to such Borrowing Base Deficiency and being cured as a result of such Pledge); and
(f) the representations and warranties contained in Sections 4.01, 4.02 and 4.03 are true and correct in all material respects, and there exists no breach of any covenant contained in  Sections 5.01 ,  5.02 ,  5.03 ,  5.04  and  5.05  before and after giving effect to the Pledge to take place on such Cut-Off Date, on and as of such day as though made on and as of such date (other than any representation and warranty that is made as of a specific date).
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the Borrower. The Borrower hereby represents and warrants, as of the Closing Date, as of each applicable Cut-Off Date, as of each applicable Advance Date, as of each Reporting Date and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made (unless a specific date is specified below):
(a) Organization, Good Standing and Due Qualification. The Borrower is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, with all requisite limited liability company power and authority necessary to own the Loan Assets and the Collateral Portfolio and to conduct its business as such business is presently conducted and to enter into and perform its obligations pursuant to this Agreement. The Borrower is duly qualified to do business as a limited liability company, and has obtained all licenses and approvals under the laws of the State of Delaware and, at all times after the date of the Initial Advance, has obtained all licenses and approvals under the laws of the State of New York, and in all other jurisdictions, in each case, necessary to own its assets and to transact the business in which it is engaged, and is duly qualified, and in good standing under the laws of the State of Delaware and, at all times after the date of the Initial Advance, is duly qualified, and in good standing under the laws of the State New York, and in each other jurisdiction where the transaction of such business or its ownership of the Loan Assets and the Collateral Portfolio and the conduct of its business requires such qualification where the failure to obtain such qualification, licenses or approvals could reasonably be expected to result in a Material Adverse Effect.
(b) Power and Authority; Due Authorization; Execution and Delivery. The Borrower (i) has the power, authority and legal right to (x) execute and deliver this Agreement and the other Transaction Documents to which it is a party and (y) perform and carry out the terms of this Agreement and the other Transaction Documents to which it is a party and the transactions contemplated thereby, and (ii) has taken all necessary action to (x) authorize the execution, delivery and performance of this Agreement and each of the other Transaction Documents to which it is a party and (y) grant to the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest in the Collateral Portfolio on the terms and conditions of this Agreement, subject only to Permitted Liens. This Agreement and each other Transaction Document to which the Borrower is a party have been duly executed and delivered by the Borrower.
(c) Binding Obligation. This Agreement and each of the other Transaction Documents to which the Borrower is a party constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as the enforceability hereof and thereof may be limited by Bankruptcy Laws and by general principles of equity.
 
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(d) All Consents Required. No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any Governmental Authority, bureau or agency is required in connection with the execution, delivery or performance by the Borrower of this Agreement or any Transaction Document to which it is a party or the validity or enforceability of this Agreement or any such Transaction Document or the Loan Assets or the transfer of an ownership interest or security interest in such Loan Assets, other than such as have been met or obtained and are in full force and effect.
(e) No Violation. The execution, delivery and performance of this Agreement and all other agreements and instruments executed and delivered or to be executed and delivered pursuant hereto or thereto in connection with the Pledge of the Collateral Portfolio will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Borrower’s certificate of formation or limited liability company agreement (ii) result in the creation or imposition of any Lien on the Collateral Portfolio other than Permitted Liens, (iii) violate any Applicable Law in any material respect, or (iv) violate any contract or other agreement to which the Borrower is a party or by which the Borrower or any property or assets of the Borrower may be bound.
(f) No Proceedings. There is no litigation, proceeding or investigation pending or, to the knowledge of the Borrower, threatened against the Borrower or any properties of the Borrower, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which the Borrower is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which the Borrower is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.
(g) Selection Procedures. In selecting the Loan Assets to be Pledged pursuant to this Agreement, no selection procedures have been employed by the Borrower or any Affiliate of the Borrower (including the Transferor and the Servicer) which are intended to be adverse to the interests of the Lenders.
(h) Bulk Sales. The grant of the security interest in the Collateral Portfolio by the Borrower to the Collateral Agent, for the benefit of the Secured Parties, pursuant to this Agreement, and the execution, delivery and performance of this Agreement, is in the ordinary course of business for the Borrower and is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.
(i) No Liens. The Collateral Portfolio is owned by the Borrower free and clear of any Liens except for Permitted Liens as provided herein. No effective financing statement or other instrument similar in effect covering any Collateral Portfolio is on file in any recording office except such as may be filed in favor of the Administrative Agent, for the benefit of the Secured Parties, relating to this Agreement or reflecting the transfer of the Collateral Portfolio from the Transferor to the Borrower.
(j) Pledge of Collateral Portfolio. Except as otherwise expressly permitted by the terms of this Agreement, no item of Collateral Portfolio has been sold, transferred, assigned or pledged by the Borrower to any Person, other than as contemplated by Article II  and the Pledge of such Collateral Portfolio to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the terms of this Agreement.
 
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(k) Indebtedness. The Borrower has no Indebtedness or other indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than Indebtedness incurred under the terms of the Transaction Documents or ordinary course business expenses incurred in the ordinary course of business pursuant to the transactions contemplated hereunder and under the other Transaction Documents.
(l) Sole Purpose. The Borrower has been formed solely for the purpose of engaging in transactions contemplated by this Agreement, and has not engaged in any business activity other than the negotiation, execution and to the extent applicable, performance of this Agreement and the transactions contemplated by the Transaction Documents. The Borrower is not party to any agreements other than the applicable Transaction Documents to which it is a party and the Required Loan Documents in respect of which the Borrower is a lender.
(m) Separate Entity. The Borrower is operated as an entity with assets and liabilities distinct from those of the Transferor and Carlyle Management, and any Affiliates thereof, and the Borrower hereby acknowledges that the Administrative Agent and the Lenders are entering into the transactions contemplated by this Agreement in reliance upon the Borrower’s identity as a separate legal entity from, the Transferor and Carlyle Management, and from each such other Affiliate of the Transferor and Carlyle Management.
(n) No Injunctions. No injunction, writ, restraining order or other order of any nature adversely affects the Borrower’s performance of its obligations under this Agreement or any Transaction Document to which the Borrower is a party.
(o) Taxes. The Borrower has filed or caused to be filed (on a consolidated basis or otherwise) on a timely basis all material tax returns (including, without limitation, all foreign, federal, state, local and other tax returns) required to be filed by it (subject to any extensions to file properly obtained by the same) and is not liable for Taxes payable by any other Person. The Borrower has paid or made adequate provisions for the payment of all material Taxes, assessments and other governmental charges made against it or any of its property except for those Taxes being contested in good faith by appropriate proceedings and in respect of which it has established proper reserves in accordance with GAAP on its books. No Tax lien or similar adverse claim has been filed, and no claim is being asserted, with respect to any such Tax, assessment or other governmental charge. Any Taxes, fees and other governmental charges due and payable by the Borrower, as applicable, in connection with the execution and delivery of this Agreement and the other Transaction Documents and the transactions contemplated hereby or thereby have been paid or shall have been paid if and when due.
(p) Location. The Borrower’s location (within the meaning of Article 9 of the UCC) is Delaware. The chief executive office of the Borrower (and the location of the Borrower’s records regarding the Collateral Portfolio (other than those delivered to the Collateral Custodian)) is located at the address set forth under its name in  Section 12.02  (or at such other address as shall be designated by such party in a written notice to the other parties hereto).
(q) Tradenames. Except as permitted hereunder, the Borrower’s legal name is as set forth in this Agreement. Except as permitted hereunder, the Borrower has not changed its name since its formation; does not have tradenames, fictitious names, assumed names or “doing business as” names
 
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other than as disclosed on Schedule II hereto (as such schedule may be updated from time to time by the Administrative Agent upon receipt of a notice delivered to the Administrative Agent pursuant to  Section 5.02(p) ); the Borrower’s only jurisdiction of formation is Delaware, and, except as permitted hereunder, the Borrower has not changed its jurisdiction of formation.
(r) Solvency. The Borrower is not the subject of any Bankruptcy Proceedings or Bankruptcy Event. The Borrower is Solvent, and the transactions under this Agreement and any other Transaction Document to which the Borrower is a party do not and will not render the Borrower not Solvent. The Borrower is paying its debts as they become due; and the Borrower, after giving effect to the transactions contemplated hereby, will have adequate capital to conduct its business.
(s) No Subsidiaries. The Borrower has no Subsidiaries.
(t) Value Given. The Borrower has given fair consideration and reasonably equivalent value to each applicable Transferor in exchange for the purchase of each of the Loan Assets (or any number of them) from the Transferor pursuant to the Contribution Agreement. No such transfer has been made for or on account of an antecedent debt owed by the Borrower to the Transferor and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.
(u) Reports Accurate. All information relating to the Borrower and prepared or supplied by the Borrower or the Servicer and contained in the Servicer’s Certificates or Servicing Reports, Notices of Borrowing, Borrowing Base Certificates and other written or electronic information, exhibits, financial statements, documents, books, records or reports furnished by the Borrower to the Administrative Agent, the Collateral Agent or the Collateral Custodian in connection with this Agreement are, as of their date, accurate, true and correct in all material respects, and no such document or certificate contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not misleading;  provided  that, solely with respect to written or electronic information furnished by the Borrower that was provided to the Borrower from an Obligor with respect to a Loan Asset, such information need only be accurate, true and correct in all material respects to the knowledge of the Borrower;  provided ,  further , that the foregoing proviso shall not apply to any information presented in a Servicer’s Certificate, Servicing Report, Notice of Borrowing or Borrowing Base Certificate.
(v) Exchange Act Compliance; Regulations T, U and X. None of the transactions contemplated herein or in the other Transaction Documents (including, without limitation, the use of Proceeds from the sale of the Collateral Portfolio) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Borrower does not own or intend to carry or purchase, and no proceeds from the Advances will be used to carry or purchase, any “margin stock” within the meaning of Regulation U or to extend “purpose credit” within the meaning of Regulation U.
(w) No Adverse Agreements. There are no agreements in effect adversely affecting the rights of the Borrower to make, or cause to be made, the grant of the security interest in the Collateral Portfolio contemplated by  Section 2.13 .
(x) Event of Default/Unmatured Event of Default. No event has occurred which constitutes an Event of Default, and no event has occurred and is continuing which constitutes an Unmatured Event of Default (other than any Event of Default or Unmatured Event of Default which has previously been disclosed to the Administrative Agent as such).
 
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(y) Servicing Standard. Each of the Loan Assets was underwritten or acquired and is being serviced in conformance with the Servicing Standard established under the Risk and Collection Policies and the standard underwriting, credit, collection, operating and reporting procedures and systems of the Servicer or the Transferor.
(z) ERISA. The present value of all vested benefits under each “employee pension benefit plan” as such term is defined in Section 3(2) of ERISA, other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate of the Borrower or to which the Borrower or any ERISA Affiliate of the Borrower contributes or has an obligation to contribute, or has any liability (each, a “ Pension Plan ”), does not exceed by a material amount the value of the assets of the Pension Plan allocable to such vested benefits (based on the value of such assets as of the last annual valuation date for the Pension Plan) determined in accordance with the assumptions used for funding such Pension Plan pursuant to Sections 412 and 430 of the Code for the applicable plan year. No prohibited transactions (within the meaning of ERISA Section 406(a) or (b) or Code Section 4975, for which an exemption is not available or has not previously been obtained from the United States Department of Labor), failure by the Borrower to meet the minimum funding standard set forth in Section 302(a) of ERISA and Section 412(a) of the Code, withdrawal by the Borrower or any ERISA Affiliate of the Borrower from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA), or Reportable Events have occurred with respect to any Pension Plan, which either individually or in the aggregate is reasonably expect to result in a material liability to the Borrower. No notice of intent to terminate a Pension Plan has been filed by the plan administrator under Section 4041 of ERISA, nor has any Pension Plan been terminated under Section 4041 of ERISA, in either event, that is reasonably expected to result in a material liability to the Borrower. The Pension Benefit Guaranty Corporation has not instituted proceedings to terminate or appointed a trustee to administer a Pension Plan under Section 4042 of ERISA, and no event has occurred or condition exists which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan.
(aa) Allocation of Charges. There is no agreement or understanding between the Servicer and the Borrower (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any taxes, fees, assessments or other governmental charges;  provided  that it is understood and acknowledged that the Borrower will be consolidated with the Servicer for tax purposes.
(bb) Broker-Dealer. The Borrower is not a broker-dealer or subject to the Securities Investor Protection Act of 1970, as amended.
(cc) Instructions to Obligors. The Collection Account is the only account to which Obligors have been instructed by the Borrower, or the Servicer on the Borrower’s behalf, to send Principal Collections and Interest Collections on the Collateral Portfolio. The Borrower has not granted any Person other than the Collateral Agent, on behalf of the Secured Parties, an interest in the Collection Account.
(dd) Contribution Agreement. The Contribution Agreement and the Loan Assignment contemplated therein are the only agreements pursuant to which the Borrower acquires the Collateral Portfolio (other than with respect to a Loan Asset that is a loan or loan participation originated by
 
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Borrower). The Borrower accounts for the transfers of Loan Assets under the Contribution Agreement as contributions of such Loan Assets in its books, records and financial statements (although the financial statements of the Borrower and CGMS may be consolidated), in each case consistent with GAAP.
(ee) Investment Company Act. Neither the Borrower nor CGMS is required to register as an “investment company” under the provisions of the 1940 Act;  provided,  that CGMS is regulated as a “business development company” under the 1940 Act. Each Advance hereunder and each Loan Asset acquired by the Borrower is an “eligible asset” as defined in Rule 3a-7 under the 1940 Act.
(ff) Compliance with Applicable Law. The Borrower has complied in all material respects with all Applicable Law to which it may be subject, and no item of the Collateral Portfolio contravenes any Applicable Law (including, without limitation, all applicable predatory and abusive lending laws, laws, rules and regulations relating to licensing, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy).
(gg) Collections. The Borrower acknowledges that all Available Collections received by it or its Affiliates with respect to the Collateral Portfolio transferred or Pledged hereunder are held and shall be held in trust for the benefit of the Collateral Agent, on behalf of the Secured Parties, until deposited into the Collection Account within two Business Days after receipt as required herein.
(hh) Set-Off, etc. No Loan Asset has been compromised, adjusted, extended, satisfied, subordinated, rescinded, set-off or modified by the Borrower, the Transferor or the Obligor thereof, and no Collateral Portfolio is subject to compromise, adjustment, extension, satisfaction, subordination, rescission, set-off, counterclaim, defense, abatement, suspension, deferment, deduction, reduction, termination or modification, whether arising out of transactions concerning the Collateral Portfolio or otherwise, by the Borrower, the Transferor or the Obligor with respect thereto, except, in each case, for amendments, extensions and modifications, if any, to such Collateral Portfolio otherwise permitted pursuant to  Section 6.04(a)  of this Agreement and in accordance with the Risk and Collection Policies and the Servicing Standard.
(ii) Full Payment. As of the applicable Cut-Off Date thereof, the Borrower has no knowledge of any fact which should lead it to expect that any Loan Asset will not be paid in full.
(jj) Environmental. With respect to each item of Underlying Collateral as of the applicable Cut-Off Date for the Loan Asset related to such Underlying Collateral, to the actual knowledge of a Responsible Officer of the Borrower: (a) the related Obligor’s operations comply in all material respects with all applicable Environmental Laws; (b) none of the related Obligor’s operations is the subject of a Federal or state investigation evaluating whether any remedial action, involving expenditures, is needed to respond to a release of any Hazardous Materials into the environment; and (c) the related Obligor does not have any material contingent liability in connection with any release of any Hazardous Materials into the environment. As of the applicable Cut-Off Date for the Loan Asset related to such Underlying Collateral, none of the Borrower, the Transferor nor the Servicer has received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Underlying Collateral, nor does any such Person have knowledge or reason to believe that any such notice will be received or is being threatened.
 
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(kk) USA PATRIOT Act, Sanctions, Etc. (i) Neither the Borrower nor, to the knowledge of the Borrower, any Affiliate of the Borrower is (A) a country, territory, organization, person or entity that is the subject or target of any list-based or territorial sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the U.S. Department of State, the United Nations Security Council, the European Union, or Her Majesty’s Treasury (collectively, “ Sanctions ”), (B) located, organized or resident of a country, region or territory that is, or whose government is, the subject of Sanctions, (C) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e. , a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision, or (D) a person or entity that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns, (ii) the Borrower and, to the knowledge of the Borrower, its Affiliates have implemented, and each maintain in effect, policies and procedures designed to ensure compliance by the Borrower and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and (iii) the Borrower, and to the knowledge of the Borrower, its Affiliates and its Affiliates’ respective directors, officers, employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.
(ll) Confirmation. The Borrower has received a letter in writing (which letters have been provided to the Administrative Agent for the benefit of the Secured Parties, who are intended third party beneficiaries thereunder) from CGMS and Carlyle Management stating that such Persons, to the fullest extent of their control and voting rights, will not suffer or permit the Borrower to file a voluntary bankruptcy petition under the Bankruptcy Code, except to the extent that any action precluding or otherwise allowing such petition would be in breach of its fiduciary obligations.
(mm) Accuracy of Representations and Warranties. Each representation or warranty by the Borrower contained herein or in any certificate or other document furnished by the Borrower pursuant hereto or in connection herewith is true and correct in all material respects.
(nn) Reaffirmation of Representations and Warranties. On each day that any Advance is made hereunder, the Borrower shall be deemed to have certified that all representations and warranties described in  Section 4.01  and  Section 4.02  are correct in all material respects on and as of such day as though made on and as of such day, except for any such representations or warranties which are made as of a specific date.
(oo) Security Interest.
(i) This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Borrower’s rights in the Collateral Portfolio in favor of the Collateral Agent, on behalf of the Secured Parties, which security interest is prior to all other Liens (except for Permitted Liens), and is enforceable as such against creditors of and purchasers from the Borrower;
(ii) the Collateral Portfolio is comprised of “instruments”, “financial assets”, “security entitlements”, “general intangibles”, “chattel paper”, “accounts”, “certificated securities”, “uncertificated securities”, “securities accounts”, “deposit accounts”, “supporting obligations” or “insurance” (each as defined in the applicable UCC) and the proceeds of the foregoing or real property or such other category of collateral under the applicable UCC as to which the Borrower has complied with its obligations under this  Section 4.01(oo) ;
 
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(iii) with respect to Collateral Portfolio that constitute “financial assets”:
(A) all of such financial assets (other than financial assets covered by subparagraphs (x), (xi), (xiii) or (xiv) of this Section 4.01(oo) ) have been credited to the Collection Account and the securities intermediary for the Collection Account has agreed to treat all assets credited to the Collection Account as “financial assets” within the meaning of the applicable UCC; and
(B) the Collection Account is not in the name of any Person other than the Borrower, subject to the lien of the Collateral Agent, for the benefit of the Secured Parties. The securities intermediary of the Collection Account which is a “securities account” under the UCC has agreed to comply with the entitlement orders and instructions of the Borrower, the Servicer and the Collateral Agent (acting at the direction of the Administrative Agent) in accordance with the Transaction Documents, including causing cash to be invested in Permitted Investments;  provided that, upon the delivery of a Notice of Exclusive Control by the Collateral Agent (acting at the direction of the Administrative Agent), the securities intermediary has agreed to only follow the entitlement orders and instructions of the Collateral Agent, on behalf of the Secured Parties, including with respect to the investment of cash in Permitted Investments.
(iv) the Collection Account constitutes a “securities account” as defined in the applicable UCC;
(v) the Borrower, the Account Bank and the Collateral Agent, on behalf of the Secured Parties, have entered into the Collection Account Agreement; and the Collection Account Agreement, together with this Agreement, grants to the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest in the Collection Account;
(vi) the Borrower owns and has good and marketable title to (or with respect to assets securing any Loan Assets, a valid security interest in) the Collateral Portfolio free and clear of any Lien (other than Permitted Liens) of any Person;
(vii) the Borrower has received all consents and approvals required by the terms of any Loan Asset to the granting of a security interest in the Loan Assets hereunder to the Collateral Agent, on behalf of the Secured Parties;
(viii) the Borrower has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under Applicable Law in order to perfect the security interest in the Collateral Portfolio and that portion of the Loan Assets in which a security interest may be perfected by filing granted to the Collateral Agent, on behalf of the Secured Parties, under this Agreement;  provided  that filings in respect of real property shall not be required;
(ix) other than as expressly permitted by the terms of this Agreement and the security interest granted to the Collateral Agent, on behalf of the Secured Parties, pursuant to this Agreement, the Borrower has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral Portfolio. The Borrower has not authorized the filing of and is not aware of any financing statements against the Borrower that include a description
 
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of collateral covering the Collateral Portfolio other than any financing statement (A) relating to the security interests granted to the Borrower under the Contribution Agreement, (B) that has been terminated or fully and validly assigned to the Collateral Agent on or prior to the date hereof, or (C) reflecting the transfer of assets on a Release Date pursuant to (and simultaneously with or subsequent to) the consummation of any transaction contemplated under (and in compliance with the conditions set forth in)  Section 2.07 . The Borrower is not aware of the filing of any judgment or Tax lien filings against the Borrower;
(x) all original executed copies of each underlying promissory note or copies of each Loan Asset Register, as applicable, that constitute or evidence each Loan Asset has been, or subject to the delivery requirements contained herein, will be delivered to the Collateral Custodian;
(xi) other than in the case of Noteless Loan Assets, the Borrower has received, or subject to the delivery requirements contained herein will receive, a written acknowledgment from the Collateral Custodian that the Collateral Custodian, as the bailee of the Collateral Agent, is holding the underlying promissory notes that constitute or evidence the Loan Assets solely on behalf of and for the Collateral Agent, for the benefit of the Secured Parties;
(xii) none of the underlying promissory notes, or Loan Asset Registers, as applicable, that constitute or evidence the Loan Assets has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Collateral Agent, on behalf of the Secured Parties;
(xiii) with respect to any Collateral Portfolio that constitutes a “certificated security,” unless credited to the Collection Account and in the control of the Account Bank, such certificated security has been delivered to the Collateral Custodian, on behalf of the Secured Parties and, if in registered form, has been specially Indorsed to the Collateral Agent, for the benefit of the Secured Parties, or in blank by an effective Indorsement or has been registered in the name of the Collateral Agent, for the benefit of the Secured Parties, upon original issue or registration of transfer by the Borrower of such certificated security; and
(xiv) with respect to any Collateral Portfolio that constitutes an “uncertificated security”, unless credited to the Collection Account and in the control of the Account Bank, the Borrower shall cause the issuer of such uncertificated security to register the Collateral Agent, on behalf of the Secured Parties, as the registered owner of such uncertificated security, or enter into a control agreement granting a perfected first Lien in such uncertificated security in a manner acceptable to the Collateral Agent and the Administrative Agent.
SECTION 4.02 Representations and Warranties of the Borrower Relating to the Agreement and the Collateral Portfolio. The Borrower (and the Servicer, with respect to clauses (b)(ii) below) hereby represent and warrant, as of the Closing Date, as of each applicable Cut-Off Date, as of each applicable Advance Date, as of each Reporting Date and any date which Loan Assets are Pledged hereunder and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made:
(a) Valid Transfer and Security Interest. This Agreement constitutes a grant of a security interest in all of the Collateral Portfolio to the Collateral Agent, for the benefit of the Secured Parties, which upon the delivery of the Required Loan Documents to the Collateral Custodian, the crediting of
 
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Loan Assets to the Collection Account and the filing of the financing statements, shall be a valid and first priority perfected security interest in the Loan Assets forming a part of the Collateral Portfolio and in that portion of the Loan Assets in which a security interest may be perfected by filing a UCC financing statement subject only to Permitted Liens. Neither the Borrower nor any Person claiming through or under Borrower shall have any claim to or interest in the Collection Account and, if this Agreement constitutes the grant of a security interest in such property, except for the interest of the Borrower in such property as a debtor for purposes of the UCC. The Collection Account Agreement, together with this Agreement, grants to the Collateral Agent for the benefit of the Secured Parties a first priority perfected security interest in the Collection Account.
(b) Eligibility of Collateral Portfolio. (i) The Loan Asset Schedule and the information contained in each Notice of Borrowing, is an accurate and complete listing of all the Loan Assets contained in the Collateral Portfolio as of the related Cut-Off Date and the information contained therein with respect to the identity of such item of Collateral Portfolio and the amounts owing thereunder is true and correct as of the related Cut-Off Date, (ii) each Loan Asset designated on any Borrowing Base Certificate as an Eligible Loan Asset and each Loan Asset included as an Eligible Loan Asset in any calculation of Borrowing Base, Borrowing Base Deficiency is an Eligible Loan Asset and (iii) with respect to each item of Collateral Portfolio, all consents, licenses, approvals or authorizations of or registrations or declarations of any Governmental Authority or any Person required to be obtained, effected or given by the Borrower in connection with the grant of a security interest in each item of Collateral Portfolio to the Collateral Agent, for the benefit of the Secured Parties, have been duly obtained, effected or given and are in full force and effect. For the avoidance of doubt, any inaccurate representation that a Loan Asset is an Eligible Loan Asset hereunder or under the Contribution Agreement shall not constitute an Event of Default if the Borrower complies with  Section 2.07(e)  hereunder and the Transferor complies with Section 6.1 of the Contribution Agreement (subject to the grace period set forth in such provisions);  provided  that any such Loan Asset will not be included in the calculation of the Borrowing Base during such grace period.
(c) No Fraud. Each Loan Asset was originated without any fraud or misrepresentation by the Transferor or the Borrower or, to the best of the Borrower’s knowledge, on the part of the Obligor.
(d) Special Volcker Representation. The Advances are loans and are not “ownership interests” (as defined in the Volcker Rule) in the Borrower.
SECTION 4.03 Representations and Warranties of the Servicer. The Servicer hereby represents and warrants, as of the Closing Date, as of each applicable Cut-Off Date, as of each applicable Advance Date, as of each Reporting Date and as of each other date provided under this Agreement or the other Transaction Documents on which such representations and warranties are required to be (or deemed to be) made (unless a specific date is specified below):
(a) Organization and Good Standing. The Servicer is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Maryland (except as such jurisdiction is changed as permitted hereunder), with all requisite corporate power and authority necessary to own or lease its properties and to conduct its business as such business is presently conducted and to enter into and perform its obligations pursuant to this Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business as a corporation, and has obtained all necessary licenses and approvals in the State of New York and in all other jurisdictions in which the ownership or lease of its property and the conduct of its business requires such qualification, licenses or approvals, except where the failure to obtain such qualification, licenses or approvals could reasonably be expected to result in a Material Adverse Effect.
 
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(c) Power and Authority; Due Authorization; Execution and Delivery. The Servicer (i) has all necessary power, authority and legal right to (x) execute and deliver this Agreement and the other Transaction Documents to which it is a party and (y) carry out the terms of this Agreement and the other Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary corporate action the execution, delivery and performance of this Agreement and each of the other Transaction Documents to which it is a party. This Agreement and each other Transaction Document to which the Servicer is a party have been duly executed and delivered by the Servicer.
(d) Binding Obligation. This Agreement and each of the other Transaction Documents to which the Servicer is a party constitutes a legal, valid and binding obligation of the Servicer, enforceable against the Servicer in accordance with their respective terms, except as the enforceability hereof and thereof may be limited by Bankruptcy Laws and by general principles of equity.
(e) No Violation. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and the fulfillment of the terms hereof and thereof will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Servicer’s articles of incorporation or by-laws, (ii) result in the creation or imposition of any Lien upon any of the Servicer’s properties pursuant to the terms of any such contractual obligation, other than this Agreement, (iii) violate any Applicable Law in any material respect or (iv) violate any material contract or other material agreement to which the Servicer is a party or by which the Servicer or any property or assets of the Servicer may be bound.
(f) No Proceedings. There is no litigation, proceeding or investigation pending or, to the knowledge of the Servicer, threatened against the Servicer or any properties of the Servicer, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which the Servicer is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which the Servicer is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.
(g) All Consents Required. No consent of any other party and no consent, license, approval or authorization of, or registration or declaration with, any Governmental Authority, bureau or agency is required in connection with the execution, delivery or performance by the Servicer of this Agreement or any other Transaction Document to which it is a party or the validity or enforceability of this Agreement or any such Transaction Document or the Loan Assets or the transfer of an ownership interest or security interest in such Loan Assets, other than such as have been met or obtained and are in full force and effect.
(h) Reports Accurate. All Servicer’s Certificates, Servicing Reports (with respect to information prepared or supplied by the Borrower or the Servicer), Notices of Borrowing, Borrowing Base Certificates and other written or electronic information, exhibits, financial statements, documents, books, records or reports furnished by the Servicer to the Administrative Agent, the Collateral Agent or the Collateral Custodian in connection with this Agreement are, as of their date, accurate, true and correct in all material respects, and no such document or certificate contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not misleading;  provided¸  that solely with respect to written or electronic information furnished by the
 
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Servicer that was provided to the Servicer from an Obligor with respect to a Loan Asset, such information is accurate, true and correct in all material respects to the best knowledge of the Servicer. Each Loan Asset designated on any Servicing Report as an Eligible Loan Asset and each Loan Asset included as an Eligible Loan Asset in any calculation of Borrowing Base, Borrowing Base Deficiency in any Servicing Report is an Eligible Loan Asset.
(i) Servicing Standard. The Servicer has complied in all material respects with the Risk and Collection Policies and the Servicing Standard with regard to the servicing of the Loan Assets.
(j) Collections. The Servicer acknowledges that all Available Collections received by it or its Affiliates with respect to the Collateral Portfolio transferred or Pledged hereunder are held and shall be held in trust for the benefit of the Collateral Agent, on behalf of the Secured Parties, until deposited into the Collection Account as promptly as possible and in any event within two Business Days from receipt as required herein.
(k) Bulk Sales. The execution, delivery and performance of this Agreement is in the ordinary course of business for the Servicer and is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction.
(l) Solvency. The Servicer is Solvent and not the subject of any Bankruptcy Proceedings or Bankruptcy Event. The transactions under this Agreement and any other Transaction Document to which the Servicer is a party do not and will not render the Servicer not Solvent.
(m) Taxes. The Servicer has filed or caused to be filed (on a consolidated basis or otherwise) on a timely basis all material tax returns (including, without limitation, all foreign, federal, state, local and other tax returns) required to be filed by it (subject to any extensions to file properly obtained by the same). The Servicer has paid or made adequate provisions for the payment of all material Taxes, assessments and other governmental charges due made against it or any of its property except for those Taxes being contested in good faith by appropriate proceedings and in respect of which it has established proper reserves in accordance with GAAP on the books of the Servicer. No Tax lien or similar adverse claim has been filed and, to the Servicer’s knowledge, no claim is being asserted, with respect to any material Tax, assessment or other governmental charge.
(n) Exchange Act Compliance; Regulations T, U and X. None of the transactions contemplated herein or the other Transaction Documents (including, without limitation, the use of the Proceeds from the sale of the Collateral Portfolio) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.
(o) Security Interest. The Servicer has taken and will take all steps necessary to ensure that the Borrower has granted and will maintain a security interest (as defined in the UCC) to the Collateral Agent, for the benefit of the Secured Parties, in the Collateral Portfolio, which is enforceable in accordance with Applicable Law upon execution and delivery of this Agreement prior to all other Liens other than Permitted Liens. Upon the filing of UCC-1 financing statements naming the Collateral Agent as secured party and the Borrower as debtor, the Collateral Agent, for the benefit of the Secured Parties, shall have a valid and first priority perfected security interest in the Loan Assets and that portion of the Collateral Portfolio in which a security interest may be perfected by filing a UCC financing statement (except for any Permitted Liens). All filings (including, without limitation, such UCC filings) as are necessary for the perfection of the Secured Parties’ security interest in the Loan Assets and that portion of the Collateral Portfolio in which a security interest may be perfected by filing have been (or prior to the applicable Advance will be) made.
 
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(p) ERISA. The present value of all vested benefits under each “employee pension benefit plan” as such term is defined in Section 3(2) of ERISA, other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Servicer or any ERISA Affiliate of the Servicer or to which the Servicer or any ERISA Affiliate of the Servicer contributes or has an obligation to contribute, or has any liability (each, a “ Servicer Pension Plan ”) does not exceed by a material amount the value of the assets of the Servicer Pension Plan allocable to such vested benefits (based on the value of such assets as of the last annual valuation date for the Servicer Pension Plan) determined in accordance with the assumptions used for funding such Servicer Pension Plan pursuant to Sections 412 and 430 of the Code for the applicable plan year. No prohibited transactions (within the meaning of ERISA Section 406(a) or (b) or Code Section 4975, for which an exemption is not available or has not previously been obtained from the United States Department of Labor), failure by the Servicer to meet the minimum funding standard set forth in Section 302(a) of ERISA and Section 412(a) of the Code, withdrawal by the Servicer or any ERISA Affiliate of the Servicer from a Servicer Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, or Reportable Events have occurred with respect to any Servicer Pension Plan which either individually or in the aggregate is reasonably expected to result in a material liability to the Servicer. No notice of intent to terminate a Servicer Pension Plan has been filed by the plan administrator under Section 4041 of ERISA, nor has any Servicer Pension Plan been terminated under Section 4041 of ERISA, in either event, that is reasonably expected to result in a material liability to the Servicer. The Pension Benefit Guaranty Corporation has not instituted proceedings to terminate or appointed a trustee to administer a Servicer Pension Plan under Section 4042 of ERISA, and no event has occurred or condition exists which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Servicer Pension Plan.
(q) USA PATRIOT Act, Sanctions, Etc. (i) Neither the Servicer nor, to the knowledge of the Servicer, any Affiliate of the Servicer is (A) a country, territory, organization, person or entity that is the subject or target of any Sanctions, (B) located, organized or resident of a country, region or territory that is, or whose government is, the subject of Sanctions, (C) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical presence in any country and that is not affiliated with a bank that has a physical presence and an acceptable level of regulation and supervision, or (D) a person or entity that resides in or is organized under the laws of a jurisdiction designated by the United States Secretary of the Treasury under Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to money laundering concerns, (ii) the Servicer and, to the knowledge of the Servicer, its Affiliates have implemented, and each maintain in effect, policies and procedures designed to ensure compliance by the Servicer and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and (iii) the Servicer, and to the knowledge of the Servicer, its Affiliates and its Affiliates’ respective directors, officers, employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.
(r) Environmental. With respect to each item of Underlying Collateral as of the applicable Cut-Off Date for the Loan Asset related to such Underlying Collateral, to the actual knowledge of a Responsible Officer of the Servicer: (a) the related Obligor’s operations comply in all material respects with all applicable Environmental Laws; (b) none of the related Obligor’s operations is the subject of a Federal or state investigation evaluating whether any remedial action, involving expenditures, is needed
 
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to respond to a release of any Hazardous Materials into the environment; and (c) the related Obligor does not have any material contingent liability in connection with any release of any Hazardous Materials into the environment. As of the applicable Cut-Off Date for the Loan Asset related to such Underlying Collateral, none of the Borrower, the Transferor nor the Servicer has received any written or verbal notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Underlying Collateral, nor does any such Person have knowledge or reason to believe that any such notice will be received or is being threatened.
(s) No Injunctions. No injunction, writ, restraining order or other order of any nature adversely affects the Servicer’s performance of its obligations under this Agreement or any Transaction Document to which the Servicer is a party.
(t) Instructions to Obligors. The Collection Account is the only account to which Obligors have been instructed by the Servicer on the Borrower’s behalf to send Principal Collections and Interest Collections on the Collateral Portfolio. The Servicer has not granted any Person other than the Collateral Agent, on behalf of the Secured Parties, an interest in the Collection Account
(u) Allocation of Charges. There is no agreement or understanding between the Servicer and the Borrower (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any taxes, fees, assessments or other governmental charges;  provided  that it is understood and acknowledged that the Borrower will be consolidated with the Servicer for tax purposes.
(v) Servicer Termination Event. No event has occurred which constitutes a Servicer Termination Event (other than any Servicer Termination Event which has previously been disclosed to the Administrative Agent as such).
(w) Broker-Dealer. The Servicer is not a broker-dealer or subject to the Securities Investor Protection Act of 1970, as amended.
(x) Compliance with Applicable Law. The Servicer has complied in all material respects with all Applicable Law to which it may be subject, and no item in the Collateral Portfolio contravenes in any respect any Applicable Law (including, without limitation, all applicable predatory and abusive lending laws, laws, rules and regulations relating to licensing, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy).
(y) Liquidity. At all times following the earlier of (x) the date that is 10 Business Days after the occurrence of the Commitment Termination Date or (y) the commencement of the Amortization Period, the Servicer maintains (i) Unrestricted Cash plus  (ii) Unpledged Capital Commitments in an aggregate amount equal to or greater than the amount of the Unfunded Revolving Commitments, if any, then in effect.
SECTION 4.04 Representations and Warranties of each Lender. Each Lender hereby individually represents and warrants, as to itself, that it, acting for its own account, in the aggregate owns and invests on a discretionary basis, not less than $25,000,000 in investments. Notwithstanding any provision herein to the contrary, the parties hereto intend that the Advances made hereunder shall constitute a “loan” and not a “security” for all purposes, including under Section 8-102(15) of the UCC.
 
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SECTION 4.05 Representations and Warranties of the Collateral Custodian. The Collateral Custodian in its individual capacity and as the Collateral Custodian represents and warrants as follows:
(a) Organization; Power and Authority. It is a duly organized and validly existing national banking association in good standing under the laws of the United States. It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Collateral Custodian under this Agreement.
(b) Due Authorization. The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Collateral Custodian, as the case may be.
(c) No Conflict. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its articles of incorporation or bylaws or any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Collateral Custodian is a party or by which it or any of its property is bound.
(d) No Violation. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with or violate, in any respect, any Applicable Law.
(e) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Collateral Custodian, required in connection with the execution and delivery of this Agreement, the performance by the Collateral Custodian of the transactions contemplated hereby and the fulfillment by the Collateral Custodian of the terms hereof have been obtained.
(f) Validity, Etc. The Agreement constitutes the legal, valid and binding obligation of the Collateral Custodian, enforceable against the Collateral Custodian in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy Laws and general principles of equity.
SECTION 4.06 Representations and Warranties of the Backup Servicer. The Backup Servicer in its individual capacity and as Collateral Custodian represents and warrants as follows:
(a) Organization; Power and Authority. It is a duly organized and validly existing national banking association in good standing under the laws of the United States. It has full corporate power, authority and legal right to execute, deliver and perform its obligations as Backup Servicer under this Agreement.
(b) Due Authorization. The execution and delivery of this Agreement and the consummation of the transactions provided for herein have been duly authorized by all necessary association action on its part, either in its individual capacity or as Backup Servicer, as the case may be.
(c) No Conflict. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with, result in any breach of its articles of incorporation or bylaws or any of the terms and provisions of, or constitute
 
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(with or without notice or lapse of time or both) a default under any indenture, contract, agreement, mortgage, deed of trust, or other instrument to which the Backup Servicer is a party or by which it or any of its property is bound.
(d) No Violation. The execution and delivery of this Agreement, the performance of the transactions contemplated hereby and the fulfillment of the terms hereof will not conflict with or violate, in any respect, any Applicable Law.
(e) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or Governmental Authority applicable to the Backup Servicer, required in connection with the execution and delivery of this Agreement, the performance by the Backup Servicer of the transactions contemplated hereby and the fulfillment by the Backup Servicer of the terms hereof have been obtained.
(f) Validity, Etc. The Agreement constitutes the legal, valid and binding obligation of the Collateral Custodian, enforceable against the Backup Servicer in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy Laws and general principles of equity (whether considered in a suit at law or in equity).
ARTICLE V.
GENERAL COVENANTS
SECTION 5.01 Affirmative Covenants of the Borrower.
From the Closing Date until the Collection Date:
(a) Organizational Procedures and Scope of Business. The Borrower will observe all organizational procedures required by its certificate of formation, limited liability company agreement and the laws of its jurisdiction of formation. Without limiting the foregoing, the Borrower will limit the scope of its business to: (i) the acquisition of Eligible Loan Assets and the ownership and management of the Portfolio Assets and the related assets in the Collateral Portfolio; (ii) the sale, transfer or other disposition of Loan Assets as and when permitted under the Transaction Documents; (iii) entering into and performing under the Transaction Documents; (iv) consenting or withholding consent as to proposed amendments, waivers and other modifications of the Loan Agreements to the extent not in conflict with the terms of this Agreement or any other Transaction Document; (v) exercising any rights (including but not limited to voting rights and rights arising in connection with a Bankruptcy Event with respect to an Obligor or the consensual or non-judicial restructuring of the debt or equity of an Obligor) or remedies in connection with the Loan Assets and participating in the committees (official or otherwise) or other groups formed by creditors of an Obligor to the extent not in conflict with the terms of this Agreement or any other Transaction Document; and (vi) to engage in any activity and to exercise any powers permitted to limited liability companies under the laws of the State of Delaware that are related to the foregoing and necessary, convenient or advisable to accomplish the foregoing.
(b) Special Purpose Entity Requirements. The Borrower will at all times: (i) maintain at least one Independent Director; (ii) maintain its own separate books and records and bank accounts; (iii) hold itself out to the public and all other Persons as a legal entity separate from the Transferor and any other Person (although, in connection with certain advertising, filings and marketing, the Borrower may be identified as a Subsidiary of CGMS); (iv) have a Board of Directors separate from that of the Transferor and any other Person; (v) file its own tax returns, if any, as may be required under Applicable
 
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Law, to the extent it is (1) not part of a consolidated group filing a consolidated return or returns or (2) not treated as a division or disregarded entity for Tax purposes of another taxpayer, and pay any Taxes so required to be paid under Applicable Law in accordance with the terms of this Agreement; (vi) not commingle its assets with assets of any other Person; (vii) conduct its business in its own name and strictly comply with all organizational formalities to maintain its separate existence (although, in connection with certain advertising, filings and marketing, the Borrower may be identified as a Subsidiary of CGMS); (viii) maintain separate financial statements, except to the extent that the Borrower’s financial and operating results are consolidated with those of CGMS in consolidated financial statements; (ix) pay its own liabilities only out of its own funds; (x) maintain an arm’s-length relationship with its Affiliates and the Transferor; (xi) pay the salaries of its own employees, if any; (xii) not hold out its credit or assets as being available to satisfy the obligations of others; (xiii) allocate fairly and reasonably any overhead for shared office space; (xiv) to the extent used, use separate stationery, invoices and checks (although, in connection with certain advertising and marketing, the Borrower may be identified as a Subsidiary of CGMS); (xv) except as expressly permitted by this Agreement, not pledge its assets as security for the obligations of any other Person; (xvi) correct any known misunderstanding regarding its separate identity; (xvii) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities and pay its operating expenses and liabilities from its own assets; (xviii) cause its Board of Directors to meet at least annually or act pursuant to written consent and keep minutes of such meetings and actions and observe in all material respects all other Delaware limited liability company formalities; (xix) not acquire the obligations or any securities of its Affiliates; and (xx) cause the directors, officers, agents and other representatives of the Borrower to act at all times with respect to the Borrower consistently and in furtherance of the foregoing and in the best interests of the Borrower. Where necessary, the Borrower will obtain proper authorization from its members for limited liability company action.
(c) Preservation of Company Existence. The Borrower will preserve and maintain its limited liability company existence, rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain in good standing as a limited liability company under the laws of its jurisdiction of formation, and will promptly obtain and thereafter maintain qualifications to do business as a foreign limited liability company in any other state in which it does business and in which it is required to so qualify under Applicable Law.
(d) Compliance with Legal Opinions. The Borrower shall take all other actions necessary to maintain the accuracy of the factual assumptions set forth in the legal opinions of Latham & Watkins LLP and Richards, Layton & Finger, P.A., each as special counsel to the Borrower and issued in connection with the Transaction Documents and relating to the issues of substantive consolidation and “true contribution” of the Loan Assets.
(e) Deposit of Collections. The Borrower shall promptly (but in no event later than two Business Days after receipt) deposit or cause to be deposited into the Collection Account any and all Available Collections received by the Borrower, the Servicer or any of their Affiliates.
(f) Disclosure of Purchase Price. The Borrower shall disclose to the Administrative Agent the purchase price for each Loan Asset proposed to be transferred to the Borrower pursuant to the terms of the Contribution Agreement.
(g) Compliance With Loan Agreements. The Borrower will act in conformity with all material terms and conditions of the Loan Agreements and Required Loan Documents.
 
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(h) Obligor Defaults and Bankruptcy Events. The Borrower shall give, or shall cause the Servicer to give, notice to the Administrative Agent within five Business Days of the Borrower’s, the Transferor’s or the Servicer’s actual knowledge of the occurrence of any default by an Obligor under any Loan Asset, including any payment default or Bankruptcy Event with respect to any Obligor under any Loan Asset.
(i) Required Loan Documents. The Borrower shall deliver to the Collateral Custodian and the Backup Servicer a copy of the Required Loan Documents and the Loan Asset Checklist pertaining to each Loan Asset within five Business Days of the Cut-Off Date pertaining to such Loan Asset.
(j) Taxes. The Borrower will file or cause to be filed its tax returns and pay any and all Taxes imposed on it or its property as required by the Transaction Documents (except as contemplated in  Section 4.01(o) ).
(k) Notice of Event of Default. The Borrower shall notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) with prompt (and in any event within two Business Days) written notice of the occurrence of each Event of Default of which the Borrower has knowledge or has received notice. In addition, no later than two Business Days following the Borrower’s knowledge or notice of the occurrence of any Event of Default, the Borrower will provide to the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) a written statement of a Responsible Officer of the Borrower setting forth the details of such event and the action that the Borrower proposes to take with respect thereto.
(l) Notice of Material Events. The Borrower shall promptly notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) of any event or other circumstance that is reasonably likely to have a Material Adverse Effect.
(m) Notice of Income Tax Liability. The Borrower shall furnish to the Administrative Agent telephonic or facsimile notice within 10 Business Days (confirmed in writing within five Business Days thereafter) of the receipt of revenue agent reports or other written proposals, determinations or assessments of the Internal Revenue Service or any other taxing authority which propose, determine or otherwise set forth positive adjustments (i) to the Tax liability of CGMS or any “ affiliated group ” (within the meaning of Section 1504(a)(1) of the Code) of which CGMS is a member in an amount equal to or greater than $10,000,000 in the aggregate, or (ii) to the Tax liability of the Borrower itself in an amount equal to or greater than $500,000 in the aggregate. Any such notice shall specify the nature of the items giving rise to such adjustments and the amounts thereof.
(n) Notice of Auditors’ Management Letters. The Borrower shall promptly notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) after the receipt of any auditors’ management letters received by the Borrower or by its accountants.
(o) Notice of Breaches of Representations and Warranties under this Agreement. The Borrower shall, upon receipt of notice or discovery thereof, promptly notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) if any representation or warranty set forth in  Section 4.01  or  Section 4.02  was incorrect at the time it was given or deemed to have been given and at the same time deliver to the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) a written notice setting forth in reasonable detail the nature of such facts and circumstances. In particular, but without limiting the foregoing, the Borrower shall notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) in the manner set
 
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forth in the preceding sentence before any Cut-Off Date of any facts or circumstances within the knowledge of the Borrower which would render any of the said representations and warranties untrue at the date when such representations and warranties were made or deemed to have been made.
(p) Notice of Breaches of Representations and Warranties under the Contribution Agreement. The Borrower confirms and agrees that the Borrower will, upon receipt of notice or discovery thereof, promptly send to the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) a notice of (i) any breach of any representation, warranty, agreement or covenant under the Contribution Agreement or (ii) any event or occurrence that, upon notice, or upon the passage of time or both, would constitute such a breach.
(q) Notice of Proceedings. The Borrower shall notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent), as soon as possible and in any event within three Business Days, after the Borrower receives notice or obtains knowledge thereof, of any settlement of, material judgment (including a material judgment with respect to the liability phase of a bifurcated trial) in or commencement of any material labor controversy, material litigation, material action, material suit or material proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Collateral Portfolio, the Transaction Documents, the Collateral Agent’s, for the benefit of the Secured Parties, interest in the Collateral Portfolio, or the Borrower, the Servicer, the Transferor or any of their Affiliates. For purposes of this  Section 5.01(p) , (i) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral Portfolio, the Transaction Documents, the Collateral Agent’s, for the benefit of the Secured Parties, interest in the Collateral Portfolio, or the Borrower in excess of $500,000 shall be deemed to be material and (ii) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Servicer, the Transferor or any of their Affiliates (other than the Borrower) in excess of $25,000,000 shall be deemed to be material.
(r) Notice of ERISA Reportable Events. The Borrower shall promptly notify the Administrative Agent after receiving notice of the occurrence of any Reportable Event with respect to any Pension Plan (except as would not reasonably be expected to result in a Material Adverse Effect) and provide the Administrative Agent with a copy of such notice.
(s) Notice of Accounting Changes. As soon as possible and in any event within three Business Days after the effective date thereof, the Borrower will provide to the Administrative Agent notice of any change in the accounting policies of the Borrower (other than changes that have an immaterial impact on the financial statements of the Borrower).
(t) Additional Documents. The Borrower shall provide the Administrative Agent with copies of such documents as the Administrative Agent may reasonably request evidencing the truthfulness of the representations set forth in this Agreement.
(u) Protection of Security Interest. With respect to the Collateral Portfolio acquired by the Borrower, the Borrower will (i) acquire such Collateral Portfolio pursuant to and in accordance with the terms of the Contribution Agreement, (ii) at the expense of the Servicer, on behalf of the Borrower take all action necessary to perfect, protect and more fully evidence the Borrower’s ownership of such Collateral Portfolio free and clear of any Lien other than the Lien created hereunder and Permitted Liens, including, without limitation, (a) with respect to the Loan Assets and that portion of the Collateral Portfolio in which a security interest may be perfected by filing, filing and maintaining (at the expense of the Servicer, on behalf of the Borrower) effective financing statements against the Transferor in all
 
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necessary or appropriate filing offices, (including any amendments thereto or assignments thereof) and filing continuation statements, amendments or assignments with respect thereto in such filing offices, (including any amendments thereto or assignments thereof) and (b) executing or causing to be executed such other instruments or notices as may be necessary or appropriate, (iii) at the expense of the Servicer, on behalf of the Borrower, take all action necessary to cause a valid, subsisting and enforceable first priority perfected security interest, subject only to Permitted Liens, to exist in favor of the Collateral Agent (for the benefit of the Secured Parties) in the Borrower’s interests in all of the Collateral Portfolio being Pledged hereunder including the filing of a UCC financing statement in the applicable jurisdiction adequately describing the Collateral Portfolio (which may include an “all asset” filing), and naming the Borrower as debtor and the Collateral Agent as the secured party, and filing continuation statements, amendments or assignments with respect thereto in such filing offices (including any amendments thereto or assignments thereof), (iv) permit the Administrative Agent or its agents or representatives to visit the offices of the Borrower during normal office hours and, unless a Servicer Termination Event, Default or Event of Default has occurred and is continuing, upon reasonable advance notice, examine and make copies of all documents, books, records and other information concerning the Collateral Portfolio and discuss matters related thereto with any of the officers or employees of the Borrower having knowledge of such matters, and (v) take all additional action that the Administrative Agent or the Collateral Agent may reasonably request to perfect, protect and more fully evidence the respective first priority perfected security interests of the parties to this Agreement in the Collateral Portfolio, or to enable the Administrative Agent or the Collateral Agent to exercise or enforce any of their respective rights hereunder.
(v) Liens. The Borrower will promptly notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) of the existence of any Lien on the Collateral Portfolio (other than Permitted Liens) and the Borrower shall defend the right, title and interest of the Collateral Agent, for the benefit of the Secured Parties, in, to and under the Collateral Portfolio against all claims of third parties.
(w) Other Documents. At any time from time to time upon prior written request of the Administrative Agent, at the sole expense of the Borrower, the Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement including the first priority security interest (subject only to Permitted Liens) granted hereunder and of the rights and powers herein granted (including, among other things, authorizing the filing of such UCC financing statements as the Administrative Agent may reasonably request).
(x) Compliance with Applicable Law. The Borrower shall at all times (i) comply in all material respects with all Applicable Law applicable to Borrower or any of its assets (including, without limitation, Environmental Laws, and all federal securities laws), (ii) do or cause to be done all things necessary to preserve and maintain in full force and effect its legal existence, and all licenses material to its business, and (iii) maintain in effect and enforce policies and procedures designed to ensure compliance in all material respects by the Borrower and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
(y) Proper Records. The Borrower shall at all times keep proper books of records and accounts in which full, true and correct entries shall be made of its transactions in accordance with GAAP and, if applicable, set aside on its books from its earning for each fiscal year all such proper reserves in accordance with GAAP. The Borrower shall account for transfers to it from the Transfer of Loan Assets
 
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under the Contribution Agreement as contributions of such Loan Assets in its books, records and financial statements (although the financial statements of the Borrower and CGMS may be consolidated), in each case consistent with GAAP.
(z) Satisfaction of Obligations. The Borrower shall pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves with respect thereto have been provided on the books of the Borrower.
(aa) Performance of Covenants. The Borrower shall observe, perform and satisfy all the material terms, provisions, covenants and conditions required to be observed, performed or satisfied by it, and shall pay when due all costs, fees and expenses required to be paid by it, under the Transaction Documents. The Borrower shall pay and discharge all Taxes, levies, liens and other charges on it or its assets and on the Collateral Portfolio that, in each case, in any manner would create any lien or charge upon the Collateral Portfolio, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided in accordance with GAAP.
(bb) Tax Treatment. The Borrower, the Transferor and the Lenders shall treat the Advances advanced hereunder as indebtedness of the Borrower (or, so long as the Borrower is treated as a disregarded entity for U.S. federal income tax purposes, as indebtedness of the entity of which it is considered to be a part) for U.S. federal income tax purposes and to file any and all tax forms in a manner consistent therewith.
(cc) Maintenance of Records. The Borrower will maintain records with respect to the Collateral Portfolio and the conduct and operation of its business with no less a degree of prudence than if the Collateral Portfolio were held by the Borrower for its own account and will furnish the Administrative Agent, upon the reasonable request by the Administrative Agent, information with respect to the Collateral Portfolio and the conduct and operation of its business.
(dd) Obligor Notification Forms. The Borrower shall furnish the Collateral Agent and the Administrative Agent with an appropriate power of attorney to send (at the Administrative Agent’s discretion on the Collateral Agent’s behalf, after the occurrence and during the continuance of an Event of Default or the Facility Maturity Date) Obligor notification forms to give notice to the Obligors of the Collateral Agent’s interest in the Collateral Portfolio and the obligation to make payments as directed by the Administrative Agent on the Collateral Agent’s behalf.
(ee) Officer’s Certificate. On each anniversary of the date of this Agreement, the Borrower shall deliver an Officer’s Certificate, in form and substance acceptable to the Administrative Agent, providing (i) a certification, based upon a review and summary of UCC search results, that there is no other interest in the Collateral Portfolio perfected by filing of a UCC financing statement other than in favor of the Collateral Agent and (ii) a certification, based upon a review and summary of tax and judgment lien searches satisfactory to the Administrative Agent, that there is no other interest in the Collateral Portfolio based on any tax or judgment lien.
(ff) Continuation Statements. The Borrower shall, not earlier than six months and not later than three months prior to the fifth anniversary of the date of filing of the financing statement referred to in  Schedule I  hereto or any other financing statement filed pursuant to this Agreement or in connection with any Advance hereunder, unless the Collection Date shall have occurred:
(i) authorize and deliver and file or cause to be filed an appropriate continuation statement with respect to such financing statements (and, to the extent that it does not make such a filing, the Collateral Agent hereby authorizes the Borrower to file such continuation statements); and
(ii) deliver or cause to be delivered to the Collateral Agent and the Administrative Agent an opinion of the counsel for the Borrower, in form and substance reasonably satisfactory to the Administrative Agent, confirming and updating the opinion delivered pursuant to  Schedule I  with respect to perfection and otherwise to the effect that the security interest hereunder continues to be an enforceable and perfected security interest, subject to no other Liens of record except as provided herein or otherwise permitted hereunder, which opinion may contain usual and customary assumptions, limitations and exceptions.
 
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(gg) Disregarded Entity. The Borrower will be disregarded as an entity separate from its owner pursuant to Treasury Regulation Section 301.7701-3(b), and neither the Borrower nor any other Person on its behalf shall make an election to be, or take any other action that is reasonably likely to result in the Borrower being, treated as other than an entity disregarded from its owner under Treasury Regulation Section 301.7701-3(c).
(hh) Audits. Subject to the proviso hereto, annually (or more frequently as the Administrative Agent, for itself and as agent for the Lenders may require after the occurrence of and during the continuance of an Event of Default) and at the sole cost and expense of the Borrower, during normal office hours and, so long as there exists no Event of Default, upon reasonable prior notice, (i) cause an independent nationally recognized accounting firm or an independent audit and consulting firm specializing in securitization transactions reasonably satisfactory to the Administrative Agent, to enter the premises of the Borrower and any Person to whom the Borrower delegates all or any portion of its duties under any Transaction Document to which it is a party and examine and audit the books, records and accounts of the Borrower and such other Person relating to its business, financial condition and operations (in each case, relating to or impacting the transactions contemplated under the Transaction Documents) and the Borrower’s and such other Person’s performance under the Transaction Documents to which it is a party, (ii) permit such firm to discuss the Borrower’s and such other Person’s affairs and finances (in each case, relating to or impacting the transactions contemplated under the Transaction Documents) with the officers, partners, employees and accountants of any of them, (iii) cause such firm to provide to the Administrative Agent and each Lender Agent, with a report in respect of the foregoing, which shall be in form and scope reasonably satisfactory to the Administrative Agent, and (iv) authorize such firm to discuss such affairs, finances and performance with representatives of the Administrative Agent and Lender Agent and their designees;  provided  that (x) so long as the Borrower’s financial and operating results are consolidated with those of CGMS in consolidated financial statements, (y) the Administrative Agent, each Lender Agent, any Liquidity Bank, the Backup Servicer and the Collateral Agent have received all audited consolidated financial statements required to be delivered pursuant to Section 6.08(d)  that consolidate the Borrower’s financial and operating results with those of CGMS, and (z) there exists no Event of Default, the Administrative Agent and each Lender Agent agree that they will not request, commence or cause an audit and examination of the Borrower pursuant to this  Section 5.01(hh) .
 
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(ii) Access to Records. Annually (or more frequently as the Administrative Agent, for itself and as agent for the Lenders may require after the occurrence of and during the continuance of a Default or an Event of Default) permit the Administrative Agent, the Lender Agents or any Person designated by the Administrative Agent or the Lender Agents, and at the sole cost and expense of the Borrower, to, during normal hours and unless a Servicer Termination Event, Default or Event of Default has occurred and is continuing upon reasonable advance notice, visit and inspect at reasonable intervals its and any Person to which it delegates any of its duties under the Transaction Documents to which it is a party books, records and accounts relating to its business, financial condition, operations and assets (in each case, relating to or impacting the transactions contemplated under the Transaction Documents) and its performance under the Transaction Documents to which it is a party and to discuss the foregoing with its and such Person’s officers, partners, employees and accountants, all as often as the Administrative Agent or the Lender Agents, as the case may be, may reasonably request;  provided, that , the Administrative Agent and the Lender Agents shall use all reasonable efforts to coordinate their inspections;  provided, however , that if under the terms of any agreement with any Person which is not an Affiliate of the Borrower or the Transferor to whom the Borrower has delegated any of its duties under any Transaction Document, only the Borrower or the Transferor, as the case may be, is permitted to visit and inspect such Person’s books, records and accounts, it shall at the request of the Administrative Agent or any Lender Agent, exercise or cause the Transferor or the Borrower, as the case may be, to exercise the rights specified in this  Section 5.01(ii)  on behalf of such requesting parties, as frequently as the terms of any such agreement permit, but in no event less frequently than annually.
SECTION 5.02 Negative Covenants of the Borrower.
From the Closing Date until the Collection Date:
(a) Special Purpose Requirements. Except as otherwise permitted by this Agreement, the Borrower shall not (i) guarantee any obligation of any Person, including any Affiliate; (ii) engage, directly or indirectly, in any business, other than the actions to be performed under the Transaction Documents or with respect to the Loan Assets or, in each case, as may be necessary or appropriate in connection therewith; (iii) incur, create or assume any Indebtedness, other than Indebtedness incurred under the Transaction Documents; (iv) make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that the Borrower may invest in those Loan Assets and other investments permitted under the Transaction Documents; (v) become insolvent or fail to pay its debts and liabilities from its assets when due; (vi) create, form or otherwise acquire any Subsidiaries or (vii) release, sell, transfer, convey or assign any Loan Asset unless in accordance with the Transaction Documents.
(b) Requirements for Material Actions. The Borrower shall at all times maintain at least one Independent Director, shall not fail to provide (and at all times the Borrower’s organizational documents shall reflect) that the unanimous consent of all members (including the consent of the Independent Director) is required for the Borrower to (i) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (ii) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (iii) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (iv) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (v) make any assignment for the benefit of the Borrower’s creditors, (vi) admit in writing its inability to pay its debts generally as they become due, or (vii) take any action in furtherance of any of the foregoing.
 
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(c) Protection of Title. The Borrower shall not take any action which would directly or indirectly impair or adversely affect Borrower’s title to the Collateral Portfolio.
(d) Transfer Limitations. The Borrower shall not transfer, assign, convey, grant, bargain, sell, set over, deliver or otherwise dispose of, or pledge or hypothecate, directly or indirectly, any interest in the Collateral Portfolio to any person other than the Collateral Agent for the benefit of the Secured Parties, or engage in financing transactions or similar transactions with respect to the Collateral Portfolio with any person other than the Administrative Agent and the Lender Agents, in each case, except as otherwise expressly permitted by the terms of this Agreement.
(e) Liens. The Borrower shall not create, incur or permit to exist any Lien in or on any of the Collateral Portfolio subject to the Lien granted by the Borrower pursuant to this Agreement, other than Permitted Liens.
(f) Organizational Documents. The Borrower shall not modify or terminate any of the organizational or operational documents of the Borrower without the prior written consent of the Administrative Agent.
(g) Merger, Acquisitions, Sales, etc. The Borrower shall not amend its certificate of formation or operating agreement, change its organizational structure, enter into any transaction of merger or consolidation or amalgamation, or asset sale (other than (x) the Permitted SPV Merger and (y)  pursuant to  Section 2.07 ), or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) without the prior written consent of the Administrative Agent and the Majority Lenders.
(h) Use of Proceeds. The Borrower shall not use the proceeds of any Advance other than (x) to finance the acquisition by the Borrower of Collateral Portfolio, or (y) to distribute such proceeds to CGMS (so long as such distribution is permitted pursuant to  Section 5.02(m) ).
(i) Limited Assets. The Borrower shall not hold or own any assets that are not part of the Collateral Portfolio or powers and rights incidental to the Transaction Documents other than cash, Permitted Investments (made in accordance with this Agreement) and Loan Assets sold, substituted, distributed or repurchased in accordance with the requirements of  Sections 2.07 .
(j) Tax Treatment. The Borrower shall not elect to be, or take any other action that is reasonably likely to result in the Borrower being, treated as a corporation for U.S. federal income tax purposes and shall take all steps necessary to avoid being treated as a corporation for U. S. federal income tax purposes.
(k) Extension or Amendment of Collateral Portfolio. The Borrower will not, except as otherwise permitted in Section 6.04(a)  of this Agreement and in accordance with the Risk and Collection Policies and the Servicing Standard, extend, amend or otherwise modify the terms of any Loan Asset (including the Underlying Collateral).
(l) Contribution Agreement. The Borrower will not amend, modify, waive or terminate any provision of the Contribution Agreement without the prior written consent of the Administrative Agent.
(m) Restricted Junior Payments. Neither the Borrower nor the Servicer shall make any Restricted Junior Payment, except that, (i) so long as no Event of Default or Unmatured Event of Default has occurred or would result therefrom, the Borrower may declare and make distributions to its
 
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member on its membership interests that comply with the terms of its operating agreement and Applicable Law; provided, that, without the prior consent of the Administrative Agent in its sole discretion, the Borrower may not make distributions of Loan Assets except as expressly contemplated under  Section 2.07 , and (ii) following the Commitment Termination Date, the Servicer may withdraw amounts from the Interest Collection Subaccount for the express purpose of declaring and making distributions to its shareholders on their capital stock in an amount certified in writing by the Servicer to the Administrative Agent as being advised by its outside legal counsel or outside accounting firm for CGMS as being necessary to continue to qualify as a regulated investment company under the 1940 Act and not become subject to income or excise tax under Sections 851 and 855 of the Code.
(n) ERISA Matters. Except as would not reasonably be expected to result in a Material Adverse Effect, the Borrower will not (a) engage, and will exercise its best efforts not to permit any ERISA Affiliate of the Borrower to engage, in any prohibited transaction (within the meaning of ERISA Section 406(a) or (b) or Code Section 4975) for which an exemption is not available or has not previously been obtained from the United States Department of Labor, (b) fail to meet the minimum funding standard set forth in Section 302(a) of ERISA and Section 412(a) of the Code with respect to any Pension Plan, (c) fail to make any payments to a Multiemployer Plan that the Borrower may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto, (d) terminate any Pension Plan so as to result, directly or indirectly in any liability to the Borrower, or (e) permit to exist any occurrence of any Reportable Event with respect to any Pension Plan.
(o) Instructions to Obligors. The Borrower will not make any change, or permit the Servicer to make any change, in its instructions to Obligors regarding payments to be made with respect to the Collateral Portfolio to the Collection Account, unless the Administrative Agent has consented to such change.
(p) Change of Jurisdiction, Location, Names or Location of Loan Asset Files. The Borrower shall not change the jurisdiction of its formation, make any change to its name or use any tradenames, fictitious names, assumed names, “doing business as” names or other names (other than those listed on  Schedule II  hereto, as such schedule may be revised from time to time to reflect name changes and name usage permitted under the terms of this  Section 5.02(p)  after compliance with all terms and conditions of this  Section 5.02(p)  related thereto) unless, prior to the effective date of any such change in the jurisdiction of its formation, name change or use, the Borrower has provided 30 days’ prior written notice to the Administrative Agent of such change and the Borrower has delivered to the Administrative Agent such financing statements as the Administrative Agent may request to reflect such name change or use, together with such Opinions of Counsel and other documents and instruments as the Administrative Agent may request in connection therewith. The Borrower shall not change the location of its principal place of business and chief executive office unless prior to the effective date of any such change of location, the Borrower notifies the Administrative Agent of such change of location in writing. The Borrower shall not move, or consent to the Collateral Custodian or the Servicer moving, the Required Loan Documents and Loan Asset Files from the location thereof on the Closing Date, unless the Borrower has provided 30 days’ prior written notice to the Administrative Agent of such change and the Servicer has provided the Administrative Agent with such Opinions of Counsel and other documents and instruments as the Administrative Agent may request in connection therewith, and the Servicer has provided a certificate to the Administrative Agent together with evidence demonstrating that it has taken all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral Portfolio.
 
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(q) Sanctions, Etc. The Borrower shall not directly or, to the knowledge of the Borrower, indirectly use the proceeds of the Advances, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) to fund any activities or business of or with any Person, or in any country or territory that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (iii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Advances, whether as underwriter, advisor, investor or otherwise).
(r) Allocation of Charges. There will not be any agreement or understanding between the Servicer and the Borrower (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any Taxes, fees, assessments or other governmental charges;  provided that it is understood and acknowledged that the Borrower will be consolidated with or treated as a disregarded entity of the Servicer for tax purposes.
SECTION 5.03 Financial Covenants of the Borrower.
(a) Interest Coverage Ratio. At all times, the Interest Coverage Ratio (as set forth in the latest Servicing Report) shall not be less than 125%.
(b) Charged-Off Ratio. At all times following the Ramp-Up Period, the Charged-Off Ratio (as set forth in the latest Servicing Report) shall not exceed 2.75%.
(c) Delinquency Ratio. At all times following the Ramp-Up Period, the Delinquency Ratio (as set forth in the latest Servicing Report) shall not exceed 7.5%.
(d) WARR Test. At all times during the Ramp-Up Period, WARR shall not be less than 44%.
SECTION 5.04 Affirmative Covenants of the Servicer.
From the Closing Date until the Collection Date:
(a) Compliance with Applicable Law. The Servicer will at all times (i) comply in all material respects with all Applicable Law, including those with respect to servicing the Collateral Portfolio or any part thereof, and (ii) maintain in effect and enforce policies and procedures designed to ensure compliance in all material respects by the Servicer and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
(b) Preservation of Company Existence. The Servicer will preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.
(c) Obligations and Compliance with Collateral Portfolio. The Servicer will duly fulfill and comply with all obligations on the part of the Borrower to be fulfilled or complied with under or in connection with the administration of each item of Collateral Portfolio and will do nothing to impair the
 
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rights of the Collateral Agent, for the benefit of the Secured Parties, or of the Secured Parties in, to and under the Collateral Portfolio. It is understood and agreed that the Servicer does not hereby assume any obligations of the Borrower in respect of any Advances or assume any responsibility for the performance by the Borrower of any of its obligations hereunder or under any other agreement executed in connection herewith that would be inconsistent with the limited recourse undertaking of the Servicer, in its capacity as seller, under Section 2.1(e) of the Contribution Agreement.
(d) Keeping of Records and Books of Account.
(i) The Servicer will maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Collateral Portfolio in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Collateral Portfolio and the identification of the Collateral Portfolio.
(ii) Subject to the proviso of Section 5.04(u), the Servicer shall permit the Administrative Agent or its agents or representatives to visit the offices of the Servicer during normal hours and unless a Servicer Termination Event, Default or Event of Default has occurred and is continuing upon reasonable advance notice, and examine and make copies of all documents, books, records and other information concerning the Collateral Portfolio and the Servicer’s servicing thereof and discuss matters related thereto with any of the officers or employees of the Servicer having knowledge of such matters.
(iii) The Servicer will on or prior to the date hereof, mark its master data processing records and other books and records relating to the Collateral Portfolio with a legend, acceptable to the Administrative Agent describing (i) the contribution of the Collateral Portfolio from the Transferor to the Borrower and (ii) the Pledge from the Borrower to the Collateral Agent, for the benefit of the Secured Parties.
(iv) The Servicer agrees (subject to any applicable confidentiality provisions) to use commercially reasonable efforts to promptly provide the Administrative Agent and each Lender any and all additional information and financial reporting reasonably available to it and reasonably requested by Administrative Agent or any Lender with respect to each Obligor of each Loan Asset that is required for compliance with the requests, rules, guidelines or directives promulgated by the Bank of International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel II or Basel III.
(e) Preservation of Security Interest. The Servicer (at its own expense, on behalf of the Borrower) will file such financing and continuation statements and any other documents that may be required by any law or regulation of any Governmental Authority to preserve and protect fully the first priority perfected security interest of the Collateral Agent, for the benefit of the Secured Parties, in, to and under the Loan Assets and that portion of the Collateral Portfolio in which a security interest may be perfected by filing.
(f) Risk and Collection Policies. The Servicer will (i) comply in all material respects with the Risk and Collection Policies and the Servicing Standard in regard to the Collateral Portfolio, and (ii) furnish to the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent), prior to its effective date, prompt written notice of any changes in the Risk and Collection Policies. The Servicer
 
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will not agree to or otherwise permit to occur any material change in the Risk and Collection Policies that is adverse to the interests and rights and remedies of the Collateral Agent, the Collateral Custodian, the Backup Servicer, the Account Bank, the Administrative Agent, any Lender, any Lender Agent and the Secured Parties without the prior written consent of the Administrative Agent;  provided  that, so long as prior written notice thereof is provided to the Administrative Agent, no consent shall be required from the Administrative Agent in connection with (i) any change certified by the Servicer to the Administrative Agent as being not adverse to the interests of any Lender Group (except in an immaterial manner), or (ii) any change mandated by Applicable Law or a Governmental Authority and, if requested by the Administrative Agent at the direction of the Majority Lenders, as evidenced by an Opinion of Counsel to that effect delivered to the Administrative Agent.
(g) Compliance With Loan Agreements. The Servicer will act in conformity with all material terms and conditions of the Loan Agreements and Required Loan Documents.
(h) Notice of Events of Default. The Servicer shall notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) with prompt (and in any event within two Business Days) written notice of the occurrence of each Event of Default of which a Responsible Officer of the Servicer has knowledge or has received notice. In addition, no later than two Business Days following the Servicer’s knowledge or notice of the occurrence of any Event of Default, the Servicer will provide to the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) a written statement of the chief financial officer or chief accounting officer of the Servicer setting forth the details of such event and the action that the Servicer proposes to take with respect thereto.
(i) Taxes. The Servicer will file its tax returns and pay any and all Taxes imposed on it or its property as required under the Transaction Documents (except as contemplated by  Section 4.03(m) ).
(j) Other. The Servicer will promptly furnish to the Collateral Agent and the Administrative Agent (with a copy to each Lender Agent) such other information, documents, records or reports respecting the Collateral Portfolio or the condition or operations, financial or otherwise, of the Borrower or the Servicer as the Collateral Agent or the Administrative Agent may from time to time reasonably request in order to protect the interests of the Administrative Agent, the Collateral Agent or Secured Parties under or as contemplated by this Agreement.
(k) Proceedings Related to the Borrower, the Transferor and the Servicer and the Transaction Documents. The Servicer shall notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) as soon as possible and in any event within three Business Days after any executive officer of the Servicer receives notice or obtains knowledge thereof of any settlement of, judgment (including a judgment with respect to the liability phase of a bifurcated trial) in or commencement of any labor controversy, litigation, action, suit or proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that could reasonably be expected to have a Material Adverse Effect on the Borrower, the Transferor or the Servicer (or any of their Affiliates) or the Transaction Documents. For purposes of this Section 5.04(k) ,  (i)  any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Transaction Documents or the Borrower in excess of $500,000 shall be deemed to be expected to have such a Material Adverse Effect and (ii) any settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Servicer, the Transferor or any of their Affiliates (other than the Borrower) in excess of $25,000,000 shall be deemed to be expected to have such a Material Adverse Effect.
 
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(l) Deposit of Misdirected Collections. The Servicer shall promptly (but in no event later than two Business Days after receipt) deposit or cause to be deposited into the Collection Account any and all Available Collections received by the Borrower, the Servicer or any of their Affiliates.
(m) Loan Asset Register.
(i) The Servicer shall maintain, or cause to be maintained, with respect to each Noteless Loan Asset a register (which may be in physical or electronic form and readily identifiable as the loan asset register) (each, a “ Loan Asset Register ”) in which it will record, or cause to be recorded, (w) the original principal amount of such Noteless Loan Asset, (x) the current principal amount of such Noteless Loan Asset, (y) the date of origination of such Noteless Loan Asset, and (z) the maturity date of such Noteless Loan Asset.
(ii) At any time a Noteless Loan Asset is included as part of the Collateral Portfolio pursuant to this Agreement, the Servicer shall deliver to the Administrative Agent, the Collateral Agent and the Collateral Custodian a copy of the related Loan Asset Register, together with a certificate of a Responsible Officer of the Servicer (in the form of  Exhibit Q ) certifying to the accuracy of such Loan Asset Register as of the applicable Cut-Off Date.
(n) Special Purpose Entity Requirements. The Servicer shall take such actions as are necessary to cause the Borrower to be in compliance with the special purpose entity requirements set forth in  Sections 5.01(a)  and  (b)  and  5.02(a)  and  (b) .
(o) Notice of Accounting Changes. As soon as possible and in any event within three Business Days after the effective date thereof, the Servicer will provide to the Administrative Agent notice of any material change in the accounting policies of the Servicer.
(p) Proceedings Related to the Collateral Portfolio. The Servicer shall notify the Administrative Agent as soon as possible and in any event within three Business Days after any Responsible Officer of the Servicer receives notice or has actual knowledge of any settlement of, judgment (including a judgment with respect to the liability phase of a bifurcated trial) in or commencement of any labor controversy, litigation, action, suit or proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that could reasonably be expected to have a Material Adverse Effect on the interests of the Collateral Agent or the Secured Parties in, to and under the Collateral Portfolio. For purposes of this  Section 5.04(p) , any adverse settlement, judgment, labor controversy, litigation, action, suit or proceeding affecting the Collateral Portfolio or the Collateral Agent’s or the Secured Parties’ interest in the Collateral Portfolio in excess of $1,000,000 or more shall be deemed to be expected to have such a Material Adverse Effect.
(q) Compliance with Legal Opinions. The Servicer shall take all other actions necessary to maintain the accuracy of the factual assumptions set forth in the legal opinions of Latham & Watkins LLP and Richards, Layton & Finger, P.A., each as special counsel to the Servicer, issued in connection with the Transaction Documents and relating to the issues of substantive consolidation and “true contributions” of the Loan Assets.
(r) Instructions to Agents and Obligors. The Servicer shall direct, or shall cause the Transferor to direct, any agent or administrative agent for any Loan Asset to remit all Collections with respect to such Loan Asset, and, if applicable, to direct the Obligor with respect to such Loan Asset to
 
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remit all such Collections with respect to such Loan Asset directly to the Collection Account. The Borrower and the Servicer shall take commercially reasonable steps to ensure, and shall cause the Transferor to take commercially reasonable steps to ensure, that only funds constituting Collections relating to Loan Assets shall be deposited into the Collection Account.
(s) Capacity as Servicer. The Servicer will ensure that, at all times when it is dealing with or in connection with the Loan Assets in its capacity as Servicer, it holds itself out as Servicer, and not in any other capacity.
(t) Notice of Breaches of Representations and Warranties under the Contribution Agreement. The Servicer confirms and agrees that the Servicer will, upon receipt of notice or discovery thereof, promptly send to the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) a notice of (i) any breach of any representation, warranty, agreement or covenant under the Contribution Agreement or (ii) any event or occurrence that, upon notice, or upon the passage of time or both, would constitute such a breach, in each case, promptly upon learning thereof.
(u) Audits. Prior to the Closing Date and periodically thereafter, the Servicer, at its sole cost and expense, shall allow the Administrative Agent and the Lender Agents, or their respective agents or representatives (during normal office hours and upon reasonable advance notice) to (i) review the Servicer’s books and records relating to, and collection and administration of, the Collateral Portfolio in order to assess compliance by the Servicer with the Servicing Standard, as well as with the Transaction Documents and to conduct an audit of the Collateral Portfolio and Required Loan Documents in conjunction with such a review, (ii) to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of the Borrower or Servicer, as the case may be, and relating to the Collateral Portfolio, and (iii) to visit the offices and properties of the Borrower or Servicer, as the case may be, during normal hours and unless a Servicer Termination Event, Default or Event of Default has occurred and is continuing upon reasonable advance notice for the purpose of examining such materials described in clause (ii) above, and to discuss matters relating to the Collateral Portfolio and Required Loan Documents or the Borrowers or Servicers performance under the Transaction Documents with any of the officers or employees of the Borrower or Servicer, as the case may be, having knowledge of such matters; provided , that so long as no Servicer Termination Event or Event of Default has occurred and is continuing, (i) the Administrative Agent and the Lender Agents shall use all reasonable efforts to (A) coordinate their inspections as a single group, (B) coordinate any inspection under this  Section 5.04(u)  with any audit and examination of the Borrower undertaken pursuant to Section 5.01(hh)  and (C) if the Servicer provides reasonable advance notice in writing to the Administrative Agent and each Lender Agent of the details of the annual audit of the Servicer being undertaken for the purposes of the Servicer’s preparation of its consolidated audited financial statements required to be delivered pursuant to  Section 6.08(d) , coordinate their inspections under this  Section 5.04(u)  with such annual audit, and (ii) the Servicer shall be responsible for the costs and expenses of no more than one on-site visit in any 12-month period. The rights of the Administrative Agent and the Lender Agents pursuant to this  Section 5.04(u)  and the inspections referenced herein are in addition to, and not in replacement of, any audit and examination pursuant to  Section 5.01(hh) . Nothing herein shall be read to limit the Borrower’s obligation to comply with the inspection requirements set forth in  Section 5.01(ii) .
(v) Notice of Breaches of Representations and Warranties under this Agreement. The Servicer shall, upon receipt of notice or discovery thereof, promptly notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) if any representation or warranty set forth
 
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in Section 4.03 was incorrect at the time it was given or deemed to have been given and at the same time deliver to the Collateral Agent and the Administrative Agent (with a copy to each Lender Agent) a written notice setting forth in reasonable detail the nature of such facts and circumstances. In particular, but without limiting the foregoing, the Servicer shall notify the Administrative Agent (with a copy to the Collateral Agent and each Lender Agent) in the manner set forth in the preceding sentence before any Cut-Off Date of any facts or circumstances within the knowledge of the Servicer which would render any of the said representations and warranties untrue at the date when such representations and warranties were made or deemed to have been made.
(w) Insurance Policies. The Servicer has caused, and will cause, to be performed any and all acts reasonably required to be performed to preserve the rights and remedies of the Collateral Agent and the Secured Parties in any Insurance Policies applicable to Loan Assets (to the extent the Servicer or an Affiliate of the Servicer is the agent or servicer under the applicable Loan Agreement) including, without limitation, in each case, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of co-insured, joint loss payee and mortgagee rights in favor of the Collateral Agent and the Secured Parties;  provided  that, unless the Borrower is the sole lender under such Loan Agreement, the Servicer shall only take such actions that are customarily taken by or on behalf of a lender in a syndicated loan facility to preserve the rights of such lender.
(x) Disregarded Entity. The Servicer shall cause the Borrower to be disregarded as an entity separate from its owner pursuant to Treasury Regulation Section 301.7701-3(b) and shall cause that neither the Borrower nor any other Person on its behalf shall make an election to be, or take any other action that is reasonably likely to result in the Borrower being, treated as other than an entity disregarded from its owner under Treasury Regulation Section 301.7701-3(c).
SECTION 5.05 Negative Covenants of the Servicer.
From the Closing Date until the Collection Date:
(a) Mergers, Acquisition, Sales, etc. The Servicer will not consolidate with or merge into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person, unless the Servicer is the surviving entity and unless:
(i)other than with respect to the Permitted BDC Merger, the Servicer has delivered to the Administrative Agent an Officer’s Certificate and an Opinion of Counsel each stating that any such consolidation, merger, conveyance or transfer and any supplemental agreement executed in connection therewith comply with this  Section 5.05  and that all conditions precedent herein provided for relating to such transaction have been complied with and, in the case of the Opinion of Counsel, that such supplemental agreement is legal, valid and binding with respect to the Servicer and such other matters as the Administrative Agent may reasonably request;
(ii)other than with respect to the Permitted BDC Merger, the Servicer shall have delivered notice of such consolidation, merger, conveyance or transfer to the Administrative Agent; and
(iii) after giving effect thereto, no Event of Default or Servicer Termination Event or event that with notice or lapse of time would constitute either an Event of Default or a Servicer Termination Event shall have occurred.
 
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(b) Change of Jurisdiction, Location, Names or Location of Loan Asset Files. The Servicer shall not change the jurisdiction of its incorporation, make any change to its corporate name, change the location of its principal place of business and chief executive office unless prior to the effective date of any such change of location, the Servicer shall have provided not less than 30 days’ prior written notice to the Administrative Agent of such change of location. The Servicer shall not change the offices where it keeps records concerning the Collateral Portfolio from the address set forth under its name in  Section 12.02 , or move, or consent to the Collateral Custodian moving, the Required Loan Documents and Loan Asset Files from the location thereof on the Closing Date, unless the Servicer shall have provided not less than 30 days’ prior written notice to the Administrative Agent of such change of location and the Servicer shall have provided the Administrative Agent with such Opinions of Counsel and other documents and instruments as the Administrative Agent may request in connection therewith, and the Servicer has provided a certificate to the Administrative Agent together with evidence demonstrating that it has taken all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral Portfolio.
(c) Change in Payment Instructions to Obligors. The Servicer will not make any change in its instructions to Obligors regarding payments to be made with respect to the Collateral Portfolio exclusively to the Collection Account (other than new direction letters in connection with any change to the Collateral Account), except to another account subject to the “control” (as such term is defined under Section 9-102 of the UCC) of the Collateral Agent and the Administrative Agent has consented to such change.
(d) Liens. The Servicer shall not pledge, create, incur or permit to exist any Lien in or on any unfunded capital commitments of shareholders of CGMS, including without limitation, any pledge of a shareholder’s note or similar instrument relating thereto, except for (i) Liens expressly consented to by the Administrative Agent in its sole reasonable discretion, (ii) tax-related Permitted Liens, and (iii) a pledge by CGMS of the capital commitments of its shareholders to a lender to secure the obligations of CGMS under a subscription line working capital credit facility in form and substance reasonably satisfactory to the Administrative Agent, where the maximum indebtedness possible under such credit facility does not exceed an amount equal to 3.33% of the undrawn capital commitments pledged as collateral therefor.
(e) Extension or Amendment of Loan Assets. The Servicer will not, except as otherwise permitted in Section 6.04(a), extend, amend or otherwise modify the terms of any Loan Asset (including the Underlying Collateral).
(f) Allocation of Charges. There will not be any agreement or understanding between the Servicer and the Borrower (other than as expressly set forth herein or as consented to by the Administrative Agent), providing for the allocation or sharing of obligations to make payments or otherwise in respect of any Taxes, fees, assessments or other governmental charges;  provided that it is understood and acknowledged that the Borrower will be consolidated with or treated as a disregarded entity of the Servicer for tax purposes.
 
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SECTION 5.06 Affirmative Covenants of the Collateral Custodian.
From the Closing Date until the Collection Date:
(a) Compliance with Applicable Law. The Collateral Custodian will comply in all material respects with all Applicable Law.
(b) Preservation of Existence. The Collateral Custodian will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.
(c) Location of Required Loan Documents. Subject to Article XIII of this Agreement, the Required Loan Documents shall remain at all times in the possession of the Collateral Custodian at the address set forth under its name in  Section 12.02  unless notice of a different address is given in accordance with the terms hereof or unless the Administrative Agent agrees to allow certain Required Loan Documents to be released to the Servicer on a temporary basis in accordance with the terms hereof, except as such Required Loan Documents may be released pursuant to the terms of this Agreement.
SECTION 5.07 Negative Covenants of the Collateral Custodian.
From the Closing Date until the Collection Date:
(a) Required Loan Documents. The Collateral Custodian will not dispose of any documents constituting the Required Loan Documents in any manner that is inconsistent with the performance of its obligations as the Collateral Custodian pursuant to this Agreement and will not dispose of any Collateral Portfolio except as contemplated by this Agreement.
SECTION 5.08 Affirmative Covenants of the Backup Servicer.
From the Closing Date until the Collection Date:
(a) Compliance with Applicable Law. The Backup Servicer will comply in all material respects with all Applicable Law.
(b) Preservation of Existence. The Backup Servicer will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.
SECTION 5.09 Negative Covenants of the Backup Servicer.
From the Closing Date until the Collection Date:
(a) Required Loan Documents. The Backup Servicer will not dispose of any documents constituting the Required Loan Documents in any manner that is inconsistent with the performance of its obligations as the Backup Servicer pursuant to this Agreement and will not dispose of any Collateral Portfolio except as contemplated by this Agreement.
(b) No Changes in Backup Servicer Fees. The Backup Servicer will not make any changes to the Backup Servicer Fees without the prior written approval of the Administrative Agent and the Borrower.
 
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SECTION 5.10 Affirmative Covenants of the Account Bank.
From the Closing Date until the Collection Date:
(a) Compliance with Applicable Law. The Account Bank will comply in all material respects with all Applicable Law.
(b) Preservation of Existence. The Account Bank will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.
SECTION 5.11 Affirmative Covenants of the Collateral Administrator.
From the Closing Date until the Collection Date:
(a) Compliance with Applicable Law. The Collateral Administrator will comply in all material respects with all Applicable Law.
(b) Preservation of Existence. The Collateral Administrator will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation and qualify and remain qualified in good standing in each jurisdiction where failure to preserve and maintain such existence, rights, franchises, privileges and qualification could reasonably be expected to have a Material Adverse Effect.
ARTICLE VI.
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 6.01 Appointment and Designation of the Servicer.
(a) Initial Servicer. The Borrower, each Lender Agent and the Administrative Agent hereby appoint CGMS, pursuant to the terms and conditions of this Agreement, as Servicer, with the authority to service, administer and exercise rights and remedies, on behalf of the Borrower, in respect of the Collateral Portfolio. CGMS hereby accepts such appointment and agrees to perform the duties and responsibilities of the Servicer pursuant to the terms hereof until such time as it receives a Servicer Termination Notice from the Administrative Agent. The Servicer and the Borrower hereby acknowledge that the Administrative Agent and the Secured Parties are third party beneficiaries of the obligations undertaken by the Servicer hereunder.
(b) Servicer Termination Notice. The Borrower, the Servicer, each Lender Agent, and the Administrative Agent hereby agree that, upon the occurrence and during the continuance of a Servicer Termination Event, the Administrative Agent, by written notice to the Servicer (with a copy to the
 
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Collateral Agent and the Backup Servicer) (a “Servicer Termination Notice”), may (and shall, upon the direction of the Majority Lenders) terminate all of the rights, obligations, power and authority of the Servicer under this Agreement. On and after the receipt by the Servicer of a Servicer Termination Notice pursuant to this  Section 6.01(b) , the Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Servicer Termination Notice or otherwise specified by the Administrative Agent in writing or, if no such date is specified in such Servicer Termination Notice or otherwise specified by the Administrative Agent, until a date mutually agreed upon by the Servicer and the Administrative Agent and shall be entitled to receive, to the extent of funds available therefor pursuant to  Section 2.04 , the Servicing Fees therefor accrued until such date. After such date, the Servicer agrees that it will terminate its activities as Servicer hereunder in a manner that the Administrative Agent believes will facilitate the transition of the performance of such activities to a successor Servicer, and the successor Servicer shall assume each and all of the Servicer’s obligations to service and administer the Collateral Portfolio, on the terms and subject to the conditions herein set forth, and the Servicer shall use its best efforts to assist the successor Servicer in assuming such obligations.
(c) Appointment of Replacement Servicer. At any time following the delivery of a Servicer Termination Notice, the Administrative Agent may, at its discretion (and shall, upon the direction of the Majority Lenders), (i) appoint the Backup Servicer as Servicer under this Agreement and, in such case, all authority, power, rights and obligations of the Servicer shall pass to and be vested in the Backup Servicer or (ii) appoint a new Servicer (the “ Replacement Servicer ”), with the consent of the Backup Servicer (which consent shall not be unreasonably withheld), which appointment shall take effect upon the Replacement Servicer accepting such appointment by a written assumption in a form satisfactory to the Administrative Agent in its sole discretion;  provided  that so long as no Event of Default is then continuing, the Administrative Agent may not propose a Competitor as a Replacement Servicer. Any Replacement Servicer shall be an established financial institution, having a net worth of not less than $50,000,000 and whose regular business includes the servicing of assets similar to the Collateral Portfolio.
(d) Liabilities and Obligations of Replacement Servicer. Upon its appointment, the Backup Servicer (or any Replacement Servicer) shall be the successor in all respects to the Servicer with respect to servicing functions under this Agreement and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and all references in this Agreement to the Servicer shall be deemed to refer to the Backup Servicer (or the Replacement Servicer);  provided  that the Backup Servicer (or any Replacement Servicer) shall have (i) no liability with respect to any action performed by the terminated Servicer prior to the date that the Backup Servicer (or the Replacement Servicer) becomes the successor to the Servicer or any claim of a third party based on any alleged action or inaction of the terminated Servicer, (ii) no obligation to perform any advancing obligations, if any, of the Servicer unless it elects to in its sole discretion, (iii) no obligation to pay any Taxes required to be paid by the Servicer ( provided  that the Backup Servicer shall pay any income Taxes for which it is liable), (iv) no obligation to pay any of the fees and expenses of any other party to the transactions contemplated hereby, and (v) no liability or obligation with respect to any Servicer indemnification obligations of any prior Servicer, including the original Servicer. The indemnification obligations of the Backup Servicer or Replacement Servicer upon becoming a Servicer, are expressly limited to those arising on account of its gross negligence or willful misconduct, or the failure to perform materially in accordance with its duties and obligations set forth in this Agreement. In addition, the Backup Servicer or Replacement Servicer shall have no liability relating to the representations and warranties of the Servicer contained in  Section 4.03 .
 
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(e) Authority and Power. All authority and power granted to the Servicer under this Agreement shall automatically cease and terminate upon termination of this Agreement and shall pass to and be vested in the Borrower and, without limitation, the Borrower is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such transfer of servicing rights. The Servicer agrees to cooperate with the Borrower in effecting the termination of the responsibilities and rights of the Servicer to conduct servicing of the Collateral Portfolio.
(f) Subcontracts. The Servicer may, with the prior written consent of the Administrative Agent, subcontract with any other Person for servicing, administering or collecting the Collateral Portfolio;  provided  that (i) the Servicer shall select any such Person with reasonable care and shall be solely responsible for the fees and expenses payable to any such Person, (ii) the Servicer shall not be relieved of, and shall remain liable for, the performance of the duties and obligations of the Servicer pursuant to the terms hereof without regard to any subcontracting arrangement and (iii) any such subcontract shall be terminable upon the occurrence of a Servicer Termination Event.
(g) Waiver. The Borrower acknowledges that the Administrative Agent or any of its Affiliates may act as the Collateral Agent or the Servicer, and the Borrower waives any and all claims against the Administrative Agent, each Lender Agent, each Lender or any of their respective Affiliates, the Collateral Agent and the Servicer (other than claims relating to such party’s gross negligence or willful misconduct as determined in a final decision by a court of competent jurisdiction) relating in any way to the custodial or collateral administration functions having been performed by the Administrative Agent or any of its Affiliates in accordance with the terms and provisions (including the standard of care) set forth in the Transaction Documents.
SECTION 6.02 Duties of the Servicer.
(a) Duties. The Servicer shall take or cause to be taken all such actions as may be necessary or advisable to service, administer and collect on the Collateral Portfolio from time to time, all in accordance with Applicable Law, the Risk and Collection Policies (if CGMS is the Servicer) and the Servicing Standard. Prior to the occurrence of a Servicer Termination Event, but subject to the terms of this Agreement (including, without limitation,  Section 6.04 ), the Servicer has the sole and exclusive authority to make any and all decisions with respect to the Collateral Portfolio and take or refrain from taking any and all actions with respect to the Collateral Portfolio. Without limiting the foregoing, the duties of the Servicer shall include the following:
(i) supervising the Collateral Portfolio, including communicating with Obligors, negotiating and executing amendments, restatements, supplements and other modifications (including, without limitation, in respect of restructuring agreements, prepackaged plans and other documents related to restructuring arrangements), negotiating and providing consents and waivers, enforcing and collecting on the Collateral Portfolio and otherwise managing the Collateral Portfolio on behalf of the Borrower;
(ii) maintaining all necessary servicing records with respect to the Collateral Portfolio and providing such reports to the Administrative Agent and each Lender Agent (with a copy to the Collateral Agent and the Collateral Custodian and the Backup Servicer) in respect of the servicing of the Collateral Portfolio (including information relating to its performance under this Agreement) as may be required hereunder or as the Administrative Agent, the Backup Servicer or any Lender Agent may reasonably request;
 
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(iii) maintaining and implementing administrative and operating procedures (including, without limitation, an ability to recreate servicing records evidencing the Collateral Portfolio in the event of the destruction of the originals thereof) and keeping and maintaining all documents, books, records and other information reasonably necessary or advisable for the collection of the Collateral Portfolio;
(iv) promptly delivering to the Administrative Agent, each Lender Agent, the Collateral Agent, the Account Bank, the Backup Servicer, the Collateral Administrator or the Collateral Custodian, from time to time, such information and servicing records (including information relating to its performance under this Agreement) as the Administrative Agent, each Lender Agent, the Account Bank, the Collateral Custodian, the Backup Servicer, the Collateral Administrator or the Collateral Agent may from time to time reasonably request;
(v) identifying each Loan Asset clearly and unambiguously in its servicing records to reflect that such Loan Asset is owned by the Borrower and that the Borrower is Pledging a security interest therein to the Secured Parties pursuant to this Agreement;
(vi) notifying the Administrative Agent, the Backup Servicer and each Lender Agent of any material action, suit, proceeding, dispute, offset, deduction, defense or counterclaim (1) that is or is threatened to be asserted by an Obligor with respect to any Loan Asset (or portion thereof) of which it has knowledge or has received notice; or (2) that could reasonably be expected to have a Material Adverse Effect;
(vii) notifying the Administrative Agent and each Lender Agent of any change to the Risk and Collection Policies;
(viii) maintaining the perfected first priority security interest of the Collateral Agent, for the benefit of the Secured Parties, in the Collateral Portfolio;
(ix) maintaining the Loan Asset File with respect to Loan Assets included as part of the Collateral Portfolio; provided that, so long as the Servicer is in possession of any Required Loan Documents, the Servicer will hold such Required Loan Documents in a fireproof safe or fireproof file cabinet;
(x) directing the Collateral Agent to make payments pursuant to the terms of the Servicing Report in accordance with Section 2.04 ;
(xi) directing the sale or substitution of Collateral Portfolio in accordance with Section 2.07;
(xii) providing assistance to the Borrower with respect to the Contribution of and payment for the Loan Assets;
(xiii) instructing the Obligors and the administrative agents on the Loan Assets to make payments directly into the Collection Account established and maintained with the Collateral Agent;
 
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(xiv) delivering the Loan Asset Files and the Loan Asset Schedule to the Collateral Custodian;
(xv) taking all actions necessary in establishing the Advance Date Assigned Value, Updated Assigned Value, and Value Adjusted Assigned Value, including, without limitation, taking all actions necessary (including paying the compensation of the Nationally Recognized Valuation Firms) in establishing and maintaining the Scheduled Valuation Process in accordance with  Section 6.02(d)  below; and
(xvi) complying with such other duties and responsibilities as may be required of the Servicer by this Agreement.
It is acknowledged and agreed that in circumstances in which a Person other than the Borrower, the Transferor (so long as the Transferor is also the Servicer) or the Servicer acts as lead agent with respect to any Loan Asset, the Servicer shall perform its servicing duties hereunder only to the extent a lender under the related loan syndication Loan Agreements has the right to do so. Notwithstanding anything to the contrary contained herein, it is acknowledged and agreed that the performance by the Servicer of its duties hereunder shall be limited insofar as such performance would conflict with or result in a breach of any of the express terms of the related Loan Agreements;  provided  that the Servicer shall (a) provide prompt written notice to the Administrative Agent and the Backup Servicer upon becoming aware of such conflict or breach, (b) have determined that there is no other commercially reasonable performance that it could render consistent with the express terms of the Loan Agreements which would result in all or a portion of the servicing duties being performed in accordance with this Agreement, and (c) undertake all commercially reasonable efforts to mitigate the effects of such non-performance including performing as much of the servicing duties as possible and performing such other commercially reasonable or similar duties consistent with the terms of the Loan Agreements.
(b) Notwithstanding anything to the contrary contained herein, the exercise by the Administrative Agent, the Collateral Agent, the Backup Servicer, each Lender Agent and the Secured Parties of their rights hereunder shall not release the Servicer, the Transferor or the Borrower from any of their duties or responsibilities with respect to the Collateral Portfolio. The Secured Parties, the Administrative Agent, the Backup Servicer, each Lender Agent and the Collateral Agent shall not have any obligation or liability with respect to any Collateral Portfolio, nor shall any of them be obligated to perform any of the obligations of the Servicer hereunder.
(c) Any payment by an Obligor in respect of any indebtedness owed by it to the Transferor or the Borrower shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Administrative Agent, be applied as a collection of a payment by such Obligor (starting with the oldest such outstanding payment due) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor.
(d) The Servicer shall establish and maintain an internal valuation protocol as set forth in the template attached hereto as Annex F  and obtain valuations for quoted securities and third party valuations for unquoted investments (the “ Scheduled Valuation Process ”) under which (i) Loan Assets representing approximately 25% of AOLB will be reviewed and an updated Quoted Price will be obtained at the end of each fiscal quarter of the Borrower, and (ii) each Loan Asset will be reviewed and an updated Quoted Price will be obtained at least once annually, all effectuated in a manner consistent with Financial Accounting Standard 157 and consistent with the standards of a publicly traded business
 
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development company. The Servicer shall be responsible for all costs and expenses (including the fees and expenses of the Nationally Recognized Valuation Firms) in connection with the Scheduled Valuation Process.
(e) The Servicer may engage subservicers in the performance of its duties and responsibilities set forth in this Agreement, including this  Section 6.02 ;  provided , that any such engagement shall not release the Servicer from any of its duties or responsibilities as Servicer set forth hereunder.
SECTION 6.03 Authorization of the Servicer.
(a) Each of the Borrower, the Administrative Agent, each Lender Agent and each Lender hereby authorizes the Servicer (including any successor thereto) to take any and all reasonable steps in its name and on its behalf necessary or desirable in the determination of the Servicer and not inconsistent with the contribution of the Collateral Portfolio by the Transferor to the Borrower under the Contribution Agreement and, thereafter, the Pledge by the Borrower to the Collateral Agent on behalf of the Secured Parties hereunder, to collect all amounts due under any and all Collateral Portfolio, including, without limitation, endorsing any of their names on checks and other instruments representing Interest Collections and Principal Collections, executing and delivering any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Collateral Portfolio and, after the delinquency of any Collateral Portfolio and to the extent permitted under and in compliance with Applicable Law, to commence proceedings with respect to enforcing payment thereof, to the same extent as the Transferor could have done if it had continued to own such Collateral Portfolio. The Transferor, the Borrower and the Collateral Agent on behalf of the Secured Parties shall furnish the Servicer (and any successors thereto) with any powers of attorney and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder, and shall cooperate with the Servicer to the fullest extent in order to ensure the collectability of the Collateral Portfolio. In no event shall the Servicer be entitled to make the Secured Parties, the Administrative Agent, the Backup Servicer, the Collateral Agent, any Lender or any Lender Agent a party to any litigation without such party’s express prior written consent, or to make the Borrower a party to any litigation (other than any routine foreclosure or similar collection procedure) without the Administrative Agent’s, the Backup Servicer’s and each Lender Agent’s consent.
(b) After the declaration of the Final Maturity Date, at the direction of the Administrative Agent, the Servicer shall take such action as the Administrative Agent may deem necessary or advisable to enforce collection of the Collateral Portfolio; provided  that the Administrative Agent may, at any time that an Event of Default has occurred and is continuing, notify any Obligor with respect to any Collateral Portfolio of the assignment of such Collateral Portfolio to the Collateral Agent on behalf of the Secured Parties and direct that payments of all amounts due or to become due be made directly to the Administrative Agent or any servicer, collection agent or account designated by the Administrative Agent and, upon such notification and at the expense of the Borrower, the Administrative Agent may enforce collection of any such Collateral Portfolio, and adjust, settle or compromise the amount or payment thereof.
SECTION 6.04 Collection of Payments; Accounts.
(a) Collection Efforts, Modification of Collateral Portfolio. The Servicer will use its reasonable best efforts to collect or cause to be collected, all payments called for under the terms and
 
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provisions of the Loan Assets included in the Collateral Portfolio as and when the same become due, all in accordance with the Risk and Collection Policies and the Servicing Standard. The Servicer may not waive, modify or otherwise vary any provision of an item of Collateral Portfolio in a manner that would impair the collectability of the Collateral Portfolio or in any manner contrary to the Servicing Standard.
(b) Acceleration. If consistent with the Risk and Collection Policies and the Servicing Standard, the Servicer shall accelerate or vote to accelerate, as applicable, the maturity of all or any Scheduled Payments and other amounts due under any Loan Asset promptly after such Loan Asset becomes defaulted.
(c) Taxes and other Amounts. The Servicer will use its best efforts to collect all payments with respect to amounts due for Taxes, assessments and insurance premiums relating to each Loan Asset to the extent required to be paid to the Borrower for such application under the applicable Loan Agreement and remit such amounts to the appropriate Governmental Authority or insurer as required by the Loan Agreements.
(d) Payments to Collection Account. On or before the applicable Cut-Off Date, the Servicer shall have instructed all Obligors to make all payments in respect of the Collateral Portfolio directly to the Collection Account;  provided  that the Servicer is not required to so instruct any Obligor which is solely a guarantor or other surety (or an Obligor that is not designated as the “lead borrower” or another such similar term) unless and until the Servicer calls on the related guaranty or secondary obligation.
(e) Collection Account. Each of the parties hereto hereby agrees that (i) the Collection Account is intended to be a “securities account” within the meaning of the UCC and (ii) except as otherwise expressly provided herein and in the Collection Account Agreement, prior to the delivery of a Notice of Exclusive Control, the Borrower (or the Servicer) shall be entitled to exercise the rights that comprise each Financial Asset held in the Collection Account and have the right to direct the disposition of funds in the Collection Account;  provided  that after the delivery of a Notice of Exclusive Control, such rights shall be exclusively held by the Collateral Agent (acting at the direction of the Administrative Agent). Each of the parties hereto hereby agrees to cause the Account Bank (or other securities intermediary) that holds any money or other property for the Borrower in the Collection Account to agree with the parties hereto that (A) the Collection Account is a “securities account” within the meaning of the UCC, the cash and other property credited thereto is to be treated as a Financial Asset under Article 8 of the UCC, (B) regardless of any provision in any other agreement, for purposes of the UCC, with respect to the Collection Account, New York shall be deemed to be the Account Bank’s (or other securities intermediary’s) jurisdiction (within the meaning of Section 8-110 of the UCC), and (C) it shall comply with all entitlement orders and all directions to dispose of funds in the Collection Account in each case without further consent of the Borrower. To the extent that the Collection Account is re-characterized as a “deposit account” (within the meaning of Section 9-102(a)(29) of the UCC), New York shall be deemed to be the “bank’s jurisdiction” (within the meaning of Section 9-304(b) of the UCC), the Account Bank shall be the “bank” and the Collateral Agent shall be the bank’s “customer” (within the meaning of Section 9-104 of the UCC). All securities or other property underlying any Financial Assets credited to the Collection Account in the form of securities or instruments shall be registered in the name of the Account Bank or if in the name of the Borrower or the Collateral Agent, Indorsed to the Account Bank, Indorsed in blank, or credited to another securities account maintained in the name of the Account Bank, and in no case will any Financial Asset credited to the Collection Account be registered in the name of the Borrower, payable to the order of the Borrower or specially Indorsed to the Borrower, except to the extent the foregoing have been specially Indorsed to the Account Bank or Indorsed in blank.
 
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(f) Loan Agreements. Notwithstanding any term hereof (or any term of the UCC that might otherwise be construed to be applicable to a “securities intermediary” as defined in the UCC) to the contrary, none of the Collateral Agent, the Account Bank, the Collateral Custodian nor any securities intermediary shall be under any duty or obligation in connection with the acquisition by the Borrower, or the grant by the Borrower to the Collateral Agent, of any Loan Asset in the nature of a loan or a participation in a loan to examine or evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Borrower under the related Loan Agreements, or otherwise to examine the Loan Agreements, in order to determine or compel compliance with any applicable requirements of or restrictions on transfer (including without limitation any necessary consents). The Collateral Custodian shall hold any Instrument delivered to it evidencing any Loan Asset granted to the Collateral Agent hereunder as custodial agent for the Collateral Agent in accordance with the terms of this Agreement.
(g) Adjustments. If (i) the Servicer makes a deposit into the Collection Account in respect of an Interest Collection or Principal Collection of a Loan Asset and such Interest Collection or Principal Collection was received by the Servicer in the form of a check that is not honored for any reason or (ii) the Servicer makes a mistake with respect to the amount of any Interest Collection or Principal Collection and deposits an amount that is less than or more than the actual amount of such Interest Collection or Principal Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or mistake. Any Scheduled Payment in respect of which a dishonored check is received shall be deemed not to have been paid.
SECTION 6.05 Realization Upon Loan Assets. The Servicer will use reasonable efforts consistent with the Risk and Collection Policies and the Servicing Standard to foreclose upon or repossess, as applicable, or otherwise comparably convert the ownership of any Underlying Collateral relating to a defaulted Loan Asset as to which no satisfactory arrangements can be made for collection of delinquent payments, and may, consistent with the Risk and Collection Policies and the Servicing Standard and exercising its reasonably good faith judgment to maximize value, hold for value, sell or transfer any equity or other securities the Borrower or the Servicer (on behalf of the Borrower) shall have received in connection with a default, workout, restructuring or plan of reorganization with respect to a Loan Asset. The Servicer will comply with the Risk and Collection Policies and the Servicing Standard and Applicable Law in realizing upon such Underlying Collateral, and employ practices and procedures including reasonable efforts consistent with the Risk and Collection Policies and the Servicing Standard to enforce all obligations of Obligors foreclosing upon, repossessing and causing the sale of such Underlying Collateral at public or private sale in circumstances other than those described in the preceding sentence. Without limiting the generality of the foregoing, unless the Administrative Agent has specifically given instruction to the contrary, the Servicer may cause the sale of any such Underlying Collateral to the Servicer or its Affiliates for a purchase price equal to the then fair value thereof, any such sale to be evidenced by a certificate of a Responsible Officer of the Servicer delivered to the Administrative Agent setting forth the Loan Asset, the Underlying Collateral, the sale price of the Underlying Collateral and certifying that such sale price is the fair value of such Underlying Collateral. In any case in which any such Underlying Collateral has suffered damage, the Servicer will have no obligation to expend funds in connection with any repair or toward the foreclosure or repossession of such Underlying Collateral unless it reasonably determines that such repair or foreclosure or repossession will increase the Recoveries by an amount greater than the amount of such expenses. The Servicer will remit to the Collection Account the Recoveries received in connection with the sale or disposition of Underlying Collateral relating to a defaulted Loan Asset.
 
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SECTION 6.06 Servicing Compensation. As compensation for its activities hereunder and reimbursement for its expenses, the Servicer shall be entitled to be paid the Servicing Fees and reimbursed its reasonable out-of-pocket expenses as provided in Section 2.04 ;  provided,  that the Servicer acknowledges and agrees that Subordinate Servicing Fees not paid under  Section 2.04 on any Payment Date shall accrue and shall not constitute a default or basis to terminate the Servicer duties under this Article VI.
SECTION 6.07 Payment of Certain Expenses by Servicer. The Servicer will be required to pay all expenses incurred by it in connection with its activities under this Agreement, including fees and disbursements of its independent accountants, Taxes imposed on the Servicer, expenses incurred by the Servicer in connection with payments and reports pursuant to this Agreement, and all other fees and expenses not expressly stated under this Agreement for the account of the Borrower. The Servicer, on behalf of the Borrower, will be required to pay all reasonable fees and expenses owing to any bank in connection with the maintenance of the Collection Account. The Servicer may be reimbursed for any reasonable out-of-pocket expenses incurred hereunder (including out-of-pocket expenses paid by the Servicer on behalf of the Borrower), subject to the availability of funds pursuant to  Section 2.04 ;  provided  that, to the extent funds are not so available on any Payment Date to reimburse such expenses incurred during the immediately ended Remittance Period, such reimbursement amount shall be deferred and payable on the next Payment Date on which funds are available therefor pursuant to  Section 2.04 .
SECTION 6.08 Reports to the Administrative Agent; Account Statements; Servicing Information.
(a) Notice of Borrowing. On or before each Advance Date and on each reduction of Advances Outstanding pursuant to Section 2.18 , the Borrower (and the Servicer on its behalf) will provide a Notice of Borrowing or a Notice of Reduction, as applicable, and a Borrowing Base Certificate, each updated as of such date, to the Administrative Agent and each Lender Agent (with a copy to the Collateral Agent). On each date the Assigned Value for any Loan Asset is modified, the Borrower (or the Servicer on its behalf) will deliver an updated Borrowing Base Certificate to the Administrative Agent and each Lender Agent.
(b) Servicing Report.
(i) On each Reporting Date (other than any Reporting Date that includes a Payment Date in the same month), the Servicer will provide to the Borrower, each Lender Agent, the Administrative Agent, the Collateral Agent, the Account Bank, the Backup Servicer, the Collateral Administrator and any Liquidity Bank, a monthly statement including (A) a Borrowing Base Certificate calculated as of the most recent Determination Date, and (B) a summary prepared with respect to each Obligor and with respect to each Loan Asset for such Obligor prepared as of the most recent Determination Date setting forth (x) calculations of the Charge-Off Ratio and the Delinquency Ratio as of such Reporting Date, and (y) whether or not each such Loan Asset shall have become subject to an amendment, restatement, supplement, waiver or other modification and whether such amendment, restatement, supplement, waiver or other modification is a Material Modification, signed by a Responsible Officer of the Servicer and the Borrower and substantially in the form of  Exhibit K (such monthly statement, a “ Servicing Report ”).
(ii) On each Payment Date, the Servicer will provide to the Borrower, each Lender Agent, the Administrative Agent, the Collateral Agent, the Account Bank, the Backup Servicer, the Collateral Administrator and any Liquidity Bank, a Servicing Report containing all of the information required to be included in a Servicing Report under  clause (i)  above, and, in addition, the Servicer will include in such Servicing Report (A) a summary prepared with respect to each Obligor and with respect to each Loan Asset for such Obligor prepared as of the most recent Determination Date setting forth calculations of the Financial Covenants as of the Reporting Date immediately preceding such Payment Date, (B) the updated valuations received pursuant to the Scheduled Valuation Process since the immediately prior Payment Date, and (C) the amounts to be remitted pursuant to  Section 2.04  to the applicable parties (which shall include any applicable wiring instructions of the parties receiving payment) with respect to such Payment Date.
 
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(c) Servicer’s Certificate. Together with each Servicing Report, the Servicer shall submit to the Administrative Agent, each Lender Agent, the Collateral Agent, the Backup Servicer and any Liquidity Bank a certificate substantially in the form of  Exhibit L  (a “ Servicer’s Certificate ”), signed by a Responsible Officer of the Servicer, which shall include a certification by such Responsible Officer that no Event of Default or Unmatured Event of Default has occurred (or describing in detail any such Event of Default or Unmatured Event of Default) and is continuing.
(d) Financial Statements. The Servicer will submit to the Administrative Agent, each Lender Agent, any Liquidity Bank, the Backup Servicer and the Collateral Agent, (i) within 45 days after the end of each of its first three fiscal quarters (excluding the fiscal quarter ending on the date specified in  clause (ii) ), commencing for the fiscal quarter ending June 30, 2013, consolidated unaudited financial statements of the Servicer for the most recent fiscal quarter, and (ii) within 90 days after the end of each fiscal year, commencing with the fiscal year ended December 31, 2013, consolidated audited financial statements of the Servicer, audited by a firm of nationally recognized independent public accountants, as of the end of such fiscal year.
(e) Tax Returns. Upon demand by the Administrative Agent, each Lender Agent or any Liquidity Bank, the Servicer shall deliver, copies of all federal, state and local tax returns and reports filed by the Borrower, or in which the Borrower was included on a consolidated or combined basis (excluding sales, use and similar Taxes).
(f) Obligor Financial Statements; Valuation Reports; Other Reports. The Servicer will deliver to the Administrative Agent, the Lender Agents, the Backup Servicer and the Collateral Agent, with respect to each Obligor, (i) prior to making an Advance with respect thereto, three years’ historical audited or unaudited financial statements and related information and a copy of the Underwriting Memoranda utilized by the Transferor or the Borrower, as applicable, in evaluating and approving such Loan Asset for investment, (ii) to the extent received by the Borrower or the Servicer pursuant to the Loan Agreement, the complete financial reporting package with respect to such Obligor and with respect to each Loan Asset for such Obligor provided to the Borrower or the Servicer either monthly or quarterly, as the case may be, by such Obligor, which delivery shall be made prior to the later of (x) 45 days after of the end of each quarter end (or such longer period provided therein with respect to the end of an Obligor’s fiscal quarter or fiscal year), and (y) 10 Business Days after receipt by the Borrower or Servicer thereof, which reporting package shall include any covenant compliance certificates under the related Loan Agreement, (iii) asset and portfolio level monitoring reports prepared by the Servicer with respect to the Loan Assets, which delivery shall be made within 45 days of the end of each quarter
 
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end (or such longer period provided therein with respect to the end of an Obligor’s fiscal quarter or fiscal year) which would include, at a minimum, covenant and financial covenant testing as required hereunder, and (iv) the loan amortization schedule of each Loan Asset within 15 days of the end of each Month (which may be included in the Borrowing Base Model that is delivered on each Reporting Date). The Servicer will promptly deliver to the Administrative Agent, the Backup Servicer and any Lender Agent, upon reasonable request and to the extent received by the Borrower or the Servicer, all other documents and information required to be delivered by the Obligors to the Borrower with respect to any Loan Asset included in the Collateral Portfolio.
(g) Amendments to Loan Assets. The Servicer will deliver to the Administrative Agent, the Lender Agents, the Backup Servicer and the Collateral Custodian a copy of any amendment, restatement, supplement, waiver or other modification to the Loan Agreement of any Loan Asset (along with any internal documents prepared by the Servicer and provided to its investment committee in connection with such amendment, restatement, supplement, waiver or other modification) (i) with respect to any Material Modification, promptly and in any event within 10 Business Days of request of the Administrative Agent thereof and (ii) with respect to any amendment, restatement, supplement, waiver or other modification which is not a Material Modification, within 45 days after the end of each quarter end.
(h) Website Access to Information. Notwithstanding anything to the contrary contained herein, information required to be delivered or submitted to any Secured Party pursuant to  Section 5.02(i)  and this  Article VI  shall be deemed to have been delivered on the date upon which such information is received through e-mail (with confirmation of receipt) or another delivery method acceptable to the Administrative Agent.
(i) Required Asset Coverage Ratio. On or prior to the RAC Reporting Date with respect to the immediately prior fiscal quarter, the Servicer shall deliver to the Administrative Agent written certificate that demonstrates CGMS’s compliance or non-compliance with the Required Asset Coverage Ratio substantially in the form of  Exhibit S .
SECTION 6.09 Annual Statement as to Compliance. The Servicer will provide to the Administrative Agent, each Lender Agent, the Backup Servicer and the Collateral Agent within 90 days following the end of each fiscal year of the Servicer, commencing with the fiscal year ending on December 31, 2013, a fiscal report signed by a Responsible Officer of the Servicer certifying that (a) a review of the activities of the Servicer, and the Servicer’s performance pursuant to this Agreement, for the fiscal period ending on the last day of such fiscal year has been made under such Person’s supervision and (b) either that the Servicer has performed or has caused to be performed in all material respects all of its obligations under this Agreement throughout such year and no Servicer Termination Event has occurred and is continuing, or specifying in what respect the foregoing is not true.
SECTION 6.10 Annual Independent Public Accountant’s Servicing Reports. The Servicer will cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer) to furnish to the Administrative Agent, each Lender Agent, the Backup Servicer and the Collateral Agent within 90 days following the end of each fiscal year of the Servicer, commencing with the fiscal year ending on December 31, 2013, a report covering such fiscal year to the effect that such accountants have applied certain agreed-upon procedures to be structured by and agreed-upon between the Servicer and the Administrative Agent to certain documents and records relating to the Collateral Portfolio under any Transaction Document, compared the information contained in the
 
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Servicing Reports and the Servicer’s Certificates delivered during the period covered by such report with such documents and records and that no matters came to the attention of such accountants that caused them to believe that such servicing was not conducted in compliance with this  Article VI , except for such exceptions as such accountants shall believe to be immaterial and such other exceptions as shall be set forth in such statement.
SECTION 6.11 The Servicer Not to Resign. The Servicer shall not resign from the obligations and duties hereby imposed on it except upon the Servicer’s determination that (i) the performance of its duties hereunder is or becomes impermissible under Applicable Law and (ii) there is no reasonable action that the Servicer could take to make the performance of its duties hereunder permissible under Applicable Law. Any such determination permitting the resignation of the Servicer shall be evidenced as to  clause (i)  above by an Opinion of Counsel to such effect delivered to the Administrative Agent and each Lender Agent. No such resignation shall become effective until a Replacement Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with  Section 6.02 .
ARTICLE VII.
THE BACKUP SERVICER
SECTION 7.01 Designation of the Backup Servicer.
(a) Initial Backup Servicer. The backup servicing role with respect to the Collateral shall be conducted by the Person designated as Backup Servicer hereunder from time to time in accordance with this  Section 7.01 . Until the Administrative Agent shall give to Wells Fargo Bank, National Association a Backup Servicer Termination Notice, Wells Fargo Bank, National Association is hereby designated as, and hereby agrees to perform the duties and obligations of, a Backup Servicer pursuant to the terms hereof.
(b) Successor Backup Servicer. Upon the Backup Servicer’s receipt of Backup Servicer Termination Notice from the Administrative Agent of the designation of a replacement Backup Servicer pursuant to the provisions of  Section 7.05 , the Backup Servicer agrees that it will terminate its activities as Backup Servicer hereunder.
SECTION 7.02 Duties of the Backup Servicer.
(a) Appointment. The Borrower and the Administrative Agent, as agent for the Secured Parties, each hereby appoints Wells Fargo Bank, National Association to act as Backup Servicer, for the benefit of the Administrative Agent and the Secured Parties, as from time to time designated pursuant to  Section 7.01 . The Backup Servicer hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein.
(b) Duties. On or before the Initial Advance, and until its removal pursuant to Section 7.05, the Backup Servicer shall perform, on behalf of the Administrative Agent and the Secured Parties, the following duties and obligations:
(i) On or before the Closing Date, the Backup Servicer shall accept from the Servicer delivery of the information required to be set forth in the Servicing Report referred to in  Section 6.08(b)(i)  of this Agreement (if any) on an excel spreadsheet or other format to be agreed upon by the Backup Servicer and the Servicer on or prior to closing.
(ii) Not later than 12:00 noon (New York City, New York time) on each Reporting Date, the Servicer shall deliver to the Backup Servicer the loan asset spreadsheet, which shall include but not be limited to the following information: (x) for each Loan Asset, the name of the related Obligor, the collection status, the loan status, the date of each Scheduled Payment, the Outstanding Principal Balance, the initial Assigned Value, and the Outstanding Loan Balance, (y) the Borrowing Base and (z) the Aggregate Outstanding Loan Balance (the “ Spreadsheet ”). The Backup Servicer shall accept delivery of the Spreadsheet.
(c) Reliance on Spreadsheet. With respect to the duties described in Section 7.02(b), the Backup Servicer is entitled to rely conclusively, and shall be fully protected in so relying, on the contents of each Spreadsheet, including, but not limited to, the completeness and accuracy thereof, provided by the Servicer.
 
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SECTION 7.03 Merger or Consolidation.
Any Person (i) into which the Backup Servicer may be merged or consolidated, (ii) that may result from any merger or consolidation to which the Backup Servicer shall be a party, or (iii) that may succeed to the properties and assets of the Backup Servicer substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Backup Servicer hereunder, shall be the successor to the Backup Servicer under this Agreement without further act on the part of any of the parties to this Agreement provided such Person is organized under the laws of the United States of America or any one of the States thereof or the District of Columbia (or any domestic branch of a foreign bank), (i) (a) that has either (1) a long-term unsecured debt rating of “A” or better by S&P and “A2” or better by Moody’s or (2) a short-term unsecured debt rating or certificate of deposit rating of “A-1” or better by S&P or “P-1” or better by Moody’s, (b) the parent corporation which has either (1) a long-term unsecured debt rating of “A” or better by S&P and “A2” or better by Moody’s or (2) a short-term unsecured debt rating or certificate of deposit rating of “A-1” or better by S&P and “P-1” or better by Moody’s or (c) is otherwise acceptable to the Administrative Agent.
SECTION 7.04 Backup Servicing Compensation.
As compensation for its back-up servicing activities hereunder, the Backup Servicer shall be entitled to receive the Backup Servicing Fee from the Servicer. To the extent that such Backup Servicing Fee is not paid by the Servicer, the Backup Servicer shall be entitled to receive the unpaid balance of its Backup Servicing Fee to the extent of funds available therefor pursuant to Section 2.04(a)(i)  and  Section 2.04(b)(iv) , as applicable. The Backup Servicer’s entitlement to receive the Backup Servicing Fee shall cease (excluding any unpaid outstanding amounts as of that date) on the earliest to occur of: (i) it becoming the Successor Servicer, (ii) its removal as Backup Servicer pursuant to  Section 7.05 , or (iii) the termination of this Agreement. Upon becoming Successor Servicer pursuant to  Section 6.01 , the Backup Servicer shall be entitled to the Servicing Fee.
SECTION 7.05 Backup Servicer Removal.
The Backup Servicer may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Backup Servicer (the “ Backup Servicer Termination Notice ”). In the event of any such removal, a replacement Backup Servicer shall be appointed by the Administrative Agent (acting upon the direction of the Majority Lenders).
 
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SECTION 7.06 Limitation on Liability.
(a) The Backup Servicer undertakes to perform only such duties and obligations as are specifically set forth in this Agreement, it being expressly understood by all parties hereto that there are no implied duties or obligations of the Backup Servicer hereunder. Without limiting the generality of the foregoing, the Backup Servicer, except as expressly set forth herein, shall have no obligation to supervise, verify, monitor or administer the performance of the Servicer. The Backup Servicer may act through its agents, nominees, attorneys and custodians in performing any of its duties and obligations under this Agreement, it being understood by the parties hereto that the Backup Servicer will be responsible for any  willfull willful  misconduct or gross negligence on the part of such agents, attorneys or custodians acting on the routine and ordinary day-to-day operations for and on behalf of the Backup Servicer. Neither the Backup Servicer nor any of its officers, directors, employees or agents shall be liable, directly or indirectly, for any damages or expenses arising out of the services performed under this Agreement other than damages or expenses that result from the gross negligence or willful misconduct of it or them or the failure to perform materially in accordance with this Agreement.
(b) The Backup Servicer shall not be liable for any obligation of the Servicer contained in this Agreement or for any errors of the Servicer contained in any computer tape, certificate or other data or document delivered to the Backup Servicer hereunder or on which the Backup Servicer must rely in order to perform its obligations hereunder, and the Secured Parties, the Administrative Agent, the Backup Servicer and the Collateral Custodian each agree to look only to the Servicer to perform such obligations. The Backup Servicer shall have no responsibility and shall not be in default hereunder or incur any liability for any failure, error, malfunction or any delay in carrying out any of its duties under this Agreement if such failure or delay results from the Backup Servicer acting in accordance with information prepared or supplied by a Person other than the Backup Servicer or the failure of any such other Person to prepare or provide such information. The Backup Servicer shall have no responsibility, shall not be in default and shall incur no liability for (i) any act or failure to act of any third party, including the Servicer, (ii) any inaccuracy or omission in a notice or communication received by the Backup Servicer from any third party, (iii) the invalidity or unenforceability of any Collateral under Applicable Law, (iv) the breach or inaccuracy of any representation or warranty made with respect to any Collateral, or (v) the acts or omissions of any successor Backup Servicer.
SECTION 7.07 The Backup Servicer Not to Resign.
The Backup Servicer shall not resign (except with prior consent of the Administrative Agent which consent shall not be unreasonably withheld) from the obligations and duties hereby imposed on it except upon the Backup Servicer’s determination that (i) the performance of its duties hereunder is or becomes impermissible under Applicable Law and (ii) there is no reasonable action that the Backup Servicer could take to make the performance of its duties hereunder permissible under Applicable Law. Any such determination permitting the resignation of the Backup Servicer shall be evidenced as to clause (i) above by an Opinion of Counsel to such effect delivered to the Administrative Agent. No such resignation shall become effective until a successor Backup Servicer shall have assumed the responsibilities and obligations of the Backup Servicer hereunder.
ARTICLE VIII.
EVENTS OF DEFAULT
SECTION 8.01 Events of Default. If any of the following events (each, an “Event of Default”) shall occur:
(a) the Borrower fails to:
(i) to make any payment of principal when due hereunder;
 
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(ii) eliminate any Borrowing Base Deficiency within three Business Days of the occurrence thereof, provided, if during such three Business Day period the Servicer provides the Administrative Agent with a certified copy of a Demand in an amount at least equal to the Borrowing Base Deficiency, and the Servicer certifies the proceeds thereof shall be utilized to cure such Event of Default under  Section 8.01(a)(ii) , then the three Business Day grace period shall be extended an additional 10 Business Days from the date of such Borrowing Base Deficiency;
(iii) make payment of outstanding principal of all outstanding Advances, if any, and all Yield and all Fees accrued and unpaid thereon together with all other Obligations on the Final Maturity Date; or
(iv) make payment of any other Obligation when due hereunder, whether of Yield on each Payment Date, fees or payment of any other Obligations under any other Transaction Document when due, and such failure continues unremedied for two Business Days; or
(b) the Borrower or the Transferor defaults in making any payment required to be made under one or more agreements for borrowed money to which it is a party (x) in any amount for the Borrower, or (y) in an aggregate principal amount in excess of $25,000,000 for the Transferor, or an event of default is declared under any such facility (without regard to waivers granted thereunder), and, in each case, such default is not cured or remedied within the applicable cure period, if any, provided for under such agreement; or
(c) any failure on the part of the Borrower or the Transferor duly to observe or perform any covenants or agreements of the Borrower or the Transferor set forth in this Agreement or the other Transaction Documents to which the Borrower or the Transferor is a party (other than (x) covenants or agreements with respect to which another clause of this  Section 8.01  expressly relates, and (y) failure to meet any of the Concentration Limits or any Collateral Quality Test) and the same continues unremedied for a period of 30 days (if such failure can be remedied) after the earlier to occur of (i) the date on which written notice of such failure requiring the same to be remedied shall have been given to the Borrower or the Transferor by the Administrative Agent or Collateral Agent, and (ii) the date on which the Borrower or the Transferor acquires knowledge thereof;
(d) the occurrence of a Bankruptcy Event relating to CGMS or the Borrower; or
(e) the Financial Covenants have been breached; or
(f) the occurrence of a Servicer Termination Event past any applicable notice or cure period provided in the definition thereof; or
(g) (1) the rendering of one or more final judgments, decrees or orders by a court or arbitrator of competent jurisdiction for the payment of money in excess individually or in the aggregate of $500,000, against the Borrower, and the Borrower shall not have either (i) discharged or provided for the discharge of any such judgment, decree or order in accordance with its terms or (ii) perfected a timely appeal of such judgment, decree or order and caused the execution of same to be stayed during
 
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the pendency of the appeal or (2) the Borrower shall have made payments of amounts in excess of $500,000 in the settlement of any litigation, claim or dispute (excluding payments made from insurance proceeds); or
(h) the breach of the Borrower of the covenants set forth in Section 5.01(b) or Section 5.02(a), or the Borrower shall otherwise fail to qualify as a bankruptcy-remote entity based upon customary criteria such that reputable counsel could no longer render a substantive nonconsolidation opinion with respect to the Borrower and the Transferor; or
(i) (1) any Transaction Document, or any Lien or security interest granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of the Borrower, the Transferor or the Servicer,
(2) the Borrower, the Transferor or the Servicer or any Affiliate of any of them shall, directly or indirectly, contest in any manner the effectiveness, validity, binding nature or enforceability of any Transaction Document or any lien or security interest thereunder, or
(3) any security interest securing any obligation under any Transaction Document shall, in whole or in part, cease to be a first priority perfected security interest except as otherwise expressly permitted to be released in accordance with the applicable Transaction Document; or
(j) failure on the part of the Borrower, the Transferor or the Servicer to make any payment or deposit (including, without limitation, with respect to bifurcation and remittance of Interest Collections and Principal Collections or any other payment or deposit required to be made by the terms of the Transaction Documents, including, without limitation, to any Secured Party, Affected Party or Indemnified Party) required by the terms of any Transaction Document (other than any payment set forth in clause (a)  above) within two Business Days after the date when such payment is due (unless such failure was due solely to an administrative error by the financial institution holding the applicable account crediting any such payment to the wrong account and the Borrower, the Transferor or Servicer and such financial institution work diligently to resolve as promptly as possible and in any event within two Business Days after such error was discovered); or
(k) either the Borrower or CGMS shall be required to be registered as an “investment company” within the meaning of Section 8 of the 1940 Act (the parties hereto acknowledging that CGMS is regulated as a “business development company” under the 1940 Act) or the arrangements contemplated by the Transaction Documents shall require registration as an “investment company” within the meaning of the 1940 Act, or the business and other activities of the Borrower or CGMS, including but not limited to, the acceptance of the Advances by the Borrower made by the Lenders, violate the 1940 Act or the rules and regulations promulgated thereunder (other than in an immaterial manner); or
(l) the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Code with regard to any assets of the Borrower, the Transferor and such lien shall not have been released within five Business Days, or the Pension Benefit Guaranty Corporation shall file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of the Borrower, or the Transferor and such lien shall not have been released within five Business Days; or
 
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(m) either (A) a Governmental Authority with the authority to determine the permissibility of the Lenders’ making Advances hereunder or the appropriateness of the accounting or regulatory capital treatment thereof asserts that (i) the Borrower is (or may be deemed) a “covered fund” under the Volcker Rule, and (ii) the terms of this Agreement create an ownership interest (as defined in the Volcker Rule) in the Borrower or (B) the Administrative Agent has reasonably determined that an event of the type described in the foregoing subclause (A) of this  clause (m)  will, with notice or lapse of time, occur; or
(n) any Change of Control shall occur; or
(o) any representation, warranty or certification made by the Borrower or the Transferor in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made, such incorrectness can reasonably be expected to result in a Material Adverse Effect, and continues to be unremedied for a period of 30 days after the earlier to occur of (i) the date on which written notice of such incorrectness requiring the same to be remedied shall have been given to the Borrower or the Transferor by the Administrative Agent or the Collateral Agent (which shall be given at the direction of the Administrative Agent) and (ii) the date on which a Responsible Officer of the Borrower or the Transferor acquires knowledge thereof; or
(p) the Borrower ceases to have a valid, perfected first priority ownership interest in all of the Collateral Portfolio (subject to Permitted Liens); or
(q) the Borrower makes any assignment or attempted assignment of their respective rights or obligations under this Agreement or any other Transaction Document without first obtaining the specific written consent of each of the Lender Agents and the Administrative Agent, which consent may be withheld by any Lender Agent or the Administrative Agent in the exercise of its sole and absolute discretion; or
(r) the Borrower, the Servicer or the Transferor fails to observe or perform any covenant, agreement or obligation with respect to the management and distribution of funds received with respect to the Collateral Portfolio, and such failure is not cured within two Business Days; or
(s) (i) the failure of the Borrower to maintain at least one Independent Director, (ii) the removal of any Independent Director of the Borrower without “cause” (as such term is defined in the organizational document of the Borrower) or without giving prior written notice to the Administrative Agent and the Lender Agents, each as required in the organizational documents of the Borrower or (iii) an Independent Director of the Borrower which is not provided by Puglisi & Associates or a nationally recognized service reasonably acceptable to the Administrative Agent shall be appointed without the consent of the Administrative Agent; or
then the Administrative Agent or the Majority Lenders, may, by notice to the Borrower, declare the Final Maturity Date to have occurred;  provided  that, in the case of any events described in  Section 8.01(i)  (to the extent such Event of Default relates to greater than 7.5% of the Advances Outstanding or 7.5% of the Collateral Portfolio, as applicable) and  Section 8.01(d)  above, the Final Maturity Date shall be deemed to have occurred automatically upon the occurrence of such event. Upon any such declaration or automatic occurrence, (i) the Borrower shall cease purchasing Loan Assets from the Transferor under the Contribution Agreement, (ii) the Administrative Agent or the Majority Lenders may declare the Revolving Notes to be immediately due and payable in full (without presentment, demand, protest or notice of any kind all of which are hereby waived by the Borrower) and any other Obligations to be
 
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immediately due and payable, and (iii) all proceeds and distributions in respect of the Portfolio Assets shall be distributed by the Account Bank, acting at the direction of the Collateral Agent (acting at the direction of the Administrative Agent) as described in Section 2.04(c)  ( provided  that the Borrower shall in any event remain liable to pay such Advances and all such amounts and Obligations immediately in accordance with  Section 2.04(d)  hereof). In addition, upon any such declaration or upon any such automatic occurrence, the Collateral Agent, on behalf of the Secured Parties and at the direction of the Administrative Agent, shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the UCC of the applicable jurisdiction and other Applicable Law, which rights shall be cumulative. Without limiting any obligation of the Servicer hereunder, the Borrower confirms and agrees that the Collateral Agent, on behalf of the Secured Parties and at the direction of the Administrative Agent, (or any designee thereof, including, without limitation, the Servicer), following an Event of Default, shall, at its option, have the sole right to enforce the Borrower’s rights and remedies under each Assigned Document, but without any obligation on the part of the Administrative Agent, the Lenders, the Lender Agents or any of their respective Affiliates to perform any of the obligations of the Borrower under any such Assigned Document. If any Event of Default shall have occurred, the Yield Rate shall be increased pursuant to the increase set forth in the definition of “Applicable Spread”, effective as of the date of the occurrence of such Event of Default, and shall apply after the occurrence of such Event of Default; or
(t) the breach or violation by the Borrower of any of the representations, warranties or covenants set forth in set forth in Section 4.01(kk) ,  5.01(x)(iii)  or  5.02(q) .
SECTION 8.02 Additional Remedies of the Administrative Agent.
(a) If, (i) upon the Administrative Agent’s or the Majority Lenders’ declaration that the Advances made to the Borrower hereunder are immediately due and payable pursuant to  Section 8.01  upon the occurrence of an Event of Default, or (ii) on the Final Maturity Date, the aggregate outstanding principal amount of the Advances, all accrued and unpaid Fees and Yield and any other Obligations are not immediately paid in full, then the Collateral Agent (acting as directed by the Administrative Agent) or the Administrative Agent (acting as directed by the Majority Lenders), in addition to all other rights specified hereunder, shall have the right, in its own name and as agent for the Lenders and Administrative Agent, to immediately sell (at the Servicer’s expense) in a commercially reasonable manner, in a recognized market (if one exists) at such price or prices as the Administrative Agent may reasonably deem satisfactory, any or all of the Collateral Portfolio and apply the proceeds thereof to the Obligations.
(b) The parties recognize that it may not be possible to sell all of the Collateral Portfolio on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for the assets constituting the Collateral Portfolio may not be liquid. Accordingly, the Administrative Agent may elect, in its sole discretion, the time and manner of liquidating any of the Collateral Portfolio, and nothing contained herein shall obligate the Administrative Agent to liquidate any of the Collateral Portfolio on the date the Administrative Agent or the Majority Lenders declare the Advances made to the Borrower hereunder to be immediately due and payable pursuant to  Section 8.01  or to liquidate all of the Collateral Portfolio in the same manner or on the same Business Day.
(c) If the Collateral Agent (acting as directed by the Administrative Agent) or the Administrative Agent proposes to sell the Collateral Portfolio or any part thereof in one or more parcels at a public or private sale, at the request of the Collateral Agent or the Administrative Agent, as
 
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applicable, the Borrower and the Servicer shall make available to (i) the Administrative Agent, on a timely basis, all information (including any information that the Borrower and the Servicer is required by law or contract to be kept confidential, to the extent such information can be provided without violation of laws or contracts, including through entering into any confidentiality agreements in forms acceptable to the Collateral Agent or the Administrative Agent, as applicable, to the extent required to prevent violation of such laws or contracts) relating to the Collateral Portfolio subject to sale, including, without limitation, copies of any disclosure documents, contracts, financial statements of the applicable Obligors, covenant certificates and any other materials requested by the Administrative Agent, and (ii) each prospective bidder, on a timely basis, all reasonable non-confidential information relating to the Collateral Portfolio subject to sale, including, without limitation, copies of any disclosure documents, contracts, financial statements of the applicable Obligors, covenant certificates and any other materials reasonably requested by each such bidder.
(d) Each of the Borrower and the Servicer agrees, to the full extent that it may lawfully so agree, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where any Collateral Portfolio may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of any of the Collateral Portfolio or any part thereof, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and each of the Borrower and the Servicer, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws, and any and all right to have any of the properties or assets constituting the Collateral Portfolio marshaled upon any such sale, and agrees that the Collateral Agent, or the Administrative Agent on its behalf, or any court having jurisdiction to foreclose the security interests granted in this Agreement may sell the Collateral Portfolio as an entirety or in such parcels as the Collateral Agent (acting at the direction of the Administrative Agent) or such court may determine.
(e) Any amounts received from any sale or liquidation of the Collateral Portfolio pursuant to this Section 8.02 in excess of the Obligations will be applied by the Collateral Agent (as directed by the Administrative Agent) in accordance with the provisions of  Section 2.04(c) , or as a court of competent jurisdiction may otherwise direct.
(f) The Administrative Agent, the Lender Agents and the Lenders shall have, in addition to all the rights and remedies provided herein and provided by applicable federal, state, foreign, and local laws (including, without limitation, the rights and remedies of a secured party under the UCC of any applicable state, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), all rights and remedies available to the Lenders at law, in equity or under any other agreement between any Lender and the Borrower.
(g) Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, each and every remedy shall be cumulative and in addition to any other remedy, and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Event of Default.
(h) Each of the Borrower and the Servicer hereby irrevocably appoints each of the Collateral Agent and the Administrative Agent its true and lawful attorney (with full power of substitution) in its name, place and stead and at its expense, in connection with the enforcement of the rights and remedies after the occurrence and during the continuance of an Event of Default provided for in this
 
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Agreement, including without limitation the following powers: (a) to give any necessary receipts or acquittance for amounts collected or received hereunder, (b) to make all necessary transfers of the Collateral Portfolio in connection with any such sale or other disposition made pursuant hereto, (c) to execute and deliver for value all necessary or appropriate bills of sale, assignments and other instruments in connection with any such sale or other disposition, the Borrower and the Servicer hereby ratifying and confirming all that such attorney (or any substitute) shall lawfully do hereunder and pursuant hereto, and (d) to sign any agreements, orders or other documents in connection with or pursuant to any Transaction Document. Nevertheless, if so requested by the Collateral Agent or the Administrative Agent, the Borrower shall ratify and confirm any such sale or other disposition by executing and delivering to the Collateral Agent or the Administrative Agent or all proper bills of sale, assignments, releases and other instruments as may be designated in any such request. Notwithstanding anything to the contrary in any power of attorney furnished hereunder, the Administrative Agent shall not exercise any power of attorney unless an Event of Default has occurred.
(i) (1) If the Collateral Agent (acting as directed by the Administrative Agent) or the Administrative Agent elects to sell the Collateral Portfolio in whole, but not in part, at a public or private sale, the Borrower may exercise its right of first refusal to repurchase the Collateral Portfolio, in whole but not in part, prior to such sale at a purchase price that is not less than the amount of the Obligations as of the date of such proposed sale. The Borrower’s right of first refusal shall terminate at 4:00 p.m. on the second Business Day following the Business Day on which the Borrower receives notice of the Collateral Agent’s or the Administrative Agent’s election to sell such Collateral Portfolio, such notice to attach copies of all Eligible Bids received by the Collateral Agent or the Administrative Agent in respect of such Collateral Portfolio.
(2) If the Collateral Agent (acting as directed by the Administrative Agent) or the Administrative Agent elects to sell less than all of the Collateral Portfolio in one or more parcels at a public or private sale, the Borrower may exercise its right of first refusal to repurchase such portion of the Collateral Portfolio prior to such sale at a purchase price of not less than the highest Eligible Bid received in respect of such portion of the Collateral Portfolio as of the date of such proposed sale, as notified by the Collateral Agent or the Administrative Agent to the Borrower. The Borrower’s right of first refusal shall terminate not later than 4:00 p.m. on the Business Day on which the Borrower receives notice of the Collateral Agent’s or the Administrative Agent’s election to sell such portion of the Collateral Portfolio, if such notice is delivered by 12:00 p.m. on such Business Day;  provided  that if such notice is delivered after 12:00 p.m. on the Business Day on which the Borrower receives such notice, or if the highest Eligible Bid received in respect of such portion of the Collateral Portfolio is greater than $25,000,000, the Borrower’s right of first refusal shall terminate not later than 12:00 p.m. on the following Business Day.
(3) If the Borrower elects not to exercise its right of first refusal as provided in clauses (1) or (2) above, the Collateral Agent (acting as directed by the Administrative Agent) or the Administrative Agent shall sell such Collateral Portfolio or portion thereof for a purchase price equal to the highest of the Eligible Bids then received. For the avoidance of doubt, any determination of the highest Eligible Bid shall only consider bids for the same parcels of the Collateral Portfolio.
(4) It is understood that the Borrower may submit its bid for the Collateral Portfolio or any portion thereof as a combined bid with the bids of other members of a group of bidders, and shall have the right to find bidders to bid on the Collateral Portfolio or any portion thereof.
 
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It is understood that the Borrower’s right of first refusal shall apply to each proposed sale of the same parcel of the Collateral Portfolio.
SECTION 8.03 Volcker Extension.
(a) If an Event of Default shall have occurred and be continuing pursuant to Section 8.01(m) (any such event, a “ Volcker Event ”), then, notwithstanding  Section 8.02 , the Administrative Agent may declare the Final Maturity Date to have occurred pursuant to  Section 8.01  (which declaration shall be effective) but shall not, prior to the close of business (New York time) on the 30th day following the date on which the Administrative Agent shall have delivered notice to Borrower of the occurrence of such Volcker Event (such time, the “ Volcker Extension Deadline ”), exercise any of the other remedies set forth in  Section 8.02 , if and for so long as:
(i) no Event of Default, other than the Volcker Event, shall have occurred and be continuing;
(ii) the Borrower and its Affiliates shall be actively engaged in soliciting or making arrangements to cause the repayment in full of the Obligations (whether by refinancing or otherwise); and
(iii) on or prior to the fifth Business Day following the date on which the Administrative Agent shall have delivered notice to Borrower of the Event of Default relating to the Volcker Event, the Servicer shall have delivered an Officer’s Certificate certifying that the conditions set forth in the foregoing  clauses (i)  and  (ii)  have been satisfied.
(b) Section 8.03(a) shall apply only to a Volcker Event and shall not be deemed to limit the rights of the Administrative Agent in respect of any other Event of Default.
(c) If any of the Obligations shall, upon the occurrence of the Volcker Extension Deadline, remain outstanding, then the Administrative Agent shall be entitled to exercise immediately, and without further notice to the Borrower or any other Person, any and all of the remedies set forth in  Section 8.02  and elsewhere in this Agreement and the other Transaction Documents.
ARTICLE IX.
INDEMNIFICATION
SECTION 9.01 Indemnities by the Borrower.
(a) Without limiting any other rights which the Affected Parties, the Secured Parties, the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Account Bank, the Collateral Administrator, the Backup Servicer, the Collateral Custodian or any of their respective Affiliates may have hereunder or under Applicable Law, the Borrower hereby agrees to indemnify the Affected Parties, the Secured Parties, Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Backup Servicer, the Account Bank, the Backup Servicer, the Collateral Administrator, the Collateral Custodian, any Conduit Trustee and each of their respective Affiliates,
 
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assigns, officers, directors, employees and agents (each, an “Indemnified Party” for purposes of this Article IX) from and against any and all damages, losses, claims, liabilities and related reasonable and documented out-of-pocket costs and expenses, including attorneys’ fees and disbursements of one firm of counsel to the Administrative Agent and the Lenders and, if necessary, one firm of local counsel in each appropriate jurisdiction (all of the foregoing being collectively referred to as “ Indemnified Amounts ”), awarded against or actually incurred by such Indemnified Party arising out of or as a result of this Agreement or in respect of any of the Collateral Portfolio, excluding, however, Indemnified Amounts to the extent resulting solely from (a) gross negligence, bad faith or willful misconduct on the part of an Indemnified Party as determined in a final decision by a court of competent jurisdiction or (b) Loan Assets which are uncollectible due to the Obligor’s financial inability to pay. Without limiting the foregoing, the Borrower shall indemnify each Indemnified Party for Indemnified Amounts relating to or resulting from any of the following (to the extent not resulting from the conditions set forth in (a) or (b) above):
(i) any Loan Asset treated as or represented by the Borrower to be an Eligible Loan Asset which is not at the applicable time an Eligible Loan Asset, or the purchase by any party or origination of any Loan Asset which violates Applicable Law;
(ii) reliance on any representation or warranty made or deemed made by the Borrower, the Servicer (if CGMS or one of its Affiliates is the Servicer) or any of their respective officers under or in connection with this Agreement or any Transaction Document, which shall have been false or incorrect in any material respect when made or deemed made or delivered;
(iii) the failure by the Borrower or the Servicer (if CGMS or one of its Affiliates is the Servicer) to comply with any term, provision or covenant contained in this Agreement or any agreement executed in connection with this Agreement, or with any Applicable Law with respect to any item of Collateral Portfolio, or the nonconformity of any item of Collateral Portfolio with any such Applicable Law;
(iv) the failure to vest and maintain vested in the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest in the Collateral Portfolio, free and clear of any Lien other than Permitted Liens, whether existing at the time of the related Advance or at any time thereafter;
(v) the failure to file, or any delay in filing, financing statements, continuation statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other Applicable Law with respect to any Loan Assets included in the Collateral Portfolio or the other Portfolio Assets related thereto, whether at the time of any Advance or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than the discharge in bankruptcy of an Obligor) to the payment of any Loan Asset included in the Collateral Portfolio (including, without limitation, a defense based on such Loan Asset (or the Loan Agreement evidencing such Loan Asset) not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services related to such Collateral Portfolio or the furnishing or failure to furnish such merchandise or services;
 
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(vii) any failure of the Borrower or the Servicer (if CGMS or one of its Affiliates is the Servicer) to perform its duties or obligations in accordance with the provisions of the Transaction Documents to which it is a party or any failure by CGMS, the Borrower or any Affiliate thereof to perform its respective duties under any Collateral Portfolio;
(viii) any inability to obtain any judgment in, or utilize the court or other adjudication system of, any state in which an Obligor may be located as a result of the failure of the Borrower or the Transferor to qualify to do business or file any notice or business activity report or any similar report;
(ix) any action taken by the Borrower or the Servicer in the enforcement or collection of the Collateral Portfolio which results in any claim, suit or action of any kind pertaining to the Collateral Portfolio or which reduces or impairs the rights of the Administrative Agent, Lender Agent or Lender with respect to any Loan Asset or the value of any such Loan Asset;
(x) any products liability claim or personal injury or property damage suit or other similar or related claim or action of whatever sort arising out of or in connection with the Underlying Collateral or services that are the subject of any Collateral Portfolio;
(xi) any claim, suit or action of any kind arising out of or in connection with Environmental Laws relating to the Borrower or the Collateral Portfolio, including any vicarious liability;
(xii) the failure by the Borrower to pay when due any Taxes for which the Borrower is liable, including, without limitation, sales, excise or personal property Taxes payable in connection with the Collateral Portfolio;
(xiii) any repayment by the Administrative Agent, the Lender Agents, the Lenders or a Secured Party of any amount previously distributed in payment of Advances or payment of Yield or Fees or any other amount due hereunder, in each case which amount the Administrative Agent, the Lender Agents, the Lenders or a Secured Party believes in good faith is required to be repaid;
(xiv) the commingling by the Borrower or the Servicer of Collections required to be remitted to the Collection Account with other funds;
(xv) any investigation, litigation or proceeding related to this Agreement (or the Transaction Documents), or the use of proceeds of Advances or the Collateral Portfolio, or the administration of the Loan Assets by the Borrower or the Servicer (unless such administration is carried out by the Backup Servicer in the capacity of the Servicer, if applicable);
(xvi) any failure by the Borrower to give reasonably equivalent value to the Transferor in consideration for the transfer by the Transferor to the Borrower of any item of Collateral Portfolio or any attempt by any Person to void or otherwise avoid any such transfer under any statutory provision or common law or equitable action, including, without limitation, any provision of the Bankruptcy Code;
 
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(xvii) the use of the proceeds of any Advance in a manner other than as provided in this Agreement and the Transaction Documents; or
(xviii) any failure of the Borrower, the Servicer or any of their respective agents or representatives to remit to the Collection Account within two Business Days of receipt, Collections with respect to the Collateral Portfolio remitted to the Borrower, the Servicer or any such agent or representative (other than such a failure on the part of the Backup Servicer in the capacity of Servicer, if applicable).
(b) Any amounts subject to the indemnification provisions of this Section 9.01 shall be paid by the Borrower to the Administrative Agent on behalf of the applicable Indemnified Party within five Business Days following receipt by the Borrower of the Administrative Agent’s written demand therefor on behalf of the applicable Indemnified Party (and the Administrative Agent shall pay such amounts to the applicable Indemnified Party promptly after the receipt by the Administrative Agent of such amounts). The Administrative Agent, on behalf of any Indemnified Party making a request for indemnification under this  Section 9.01 , shall submit to the Borrower a certificate setting forth in reasonable detail the basis for and the computations of the Indemnified Amounts with respect to which such indemnification is requested, which certificate shall be conclusive absent demonstrable error.
(c) If for any reason the indemnification provided above in this Section 9.01 is unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless in respect of any losses, claims, damages or liabilities, then the Borrower shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and the Borrower on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable considerations;  provided  that the Borrower shall not be required to contribute in respect of any Indemnified Amounts excluded in Section 9.01(a) .
(d) If the Borrower has made any payments in respect of Indemnified Amounts to the Administrative Agent on behalf of an Indemnified Party pursuant to this  Section 9.01  and such Indemnified Party thereafter collects any of such amounts from others, such Indemnified Party will promptly repay such amounts collected to the Borrower in an amount equal to the amount it has collected from others in respect of such Indemnified Amounts, without interest.
(e) The obligations of the Borrower under this Section 9.01 shall survive the resignation or removal of the Administrative Agent, the Lenders, the Lender Agents, the Servicer, the Collateral Agent, the Account Bank, the Backup Servicer, the Collateral Administrator or the Collateral Custodian and the termination of this Agreement.
SECTION 9.02 Indemnities by Servicer.
(a) Without limiting any other rights which any Indemnified Party may have hereunder or under Applicable Law, the Servicer hereby agrees to indemnify each Indemnified Party from and against any and all Indemnified Amounts, awarded against or incurred by any Indemnified Party as a consequence of any of the following, excluding, however, Indemnified Amounts to the extent resulting from gross negligence, bad faith or willful misconduct on the part of any Indemnified Party claiming indemnification hereunder as determined in a final decision by a court of competent jurisdiction:
(i) the inclusion, in any computations made by it in connection with any Borrowing Base Certificate or other report prepared by it hereunder, of any Loan Assets which were not Eligible Loan Assets as of the date of any such computation;
 
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(ii) reliance on any representation or warranty made or deemed made by the Servicer or any of its officers under or in connection with this Agreement or any other Transaction Document, any Servicing Report, Servicer’s Certificate or any other information or report delivered by or on behalf of the Servicer pursuant hereto, which shall have been false, incorrect or misleading in any material respect when made or deemed made or delivered;
(iii) the failure by the Servicer to comply with (A) any term, provision or covenant contained in this Agreement or any other Transaction Document, or any other agreement executed in connection with this Agreement, or (B) any Applicable Law applicable to it with respect to any Portfolio Assets;
(iv) any litigation, proceedings or investigation against the Servicer;
(v) any action or inaction by the Servicer that causes the Collateral Agent, for the benefit of the Secured Parties, not to have a first priority perfected security interest in the Collateral Portfolio, free and clear of any Lien other than Permitted Liens, whether existing at the time of the related Advance or any time thereafter;
(vi) the commingling by the Servicer of Collections required to be remitted to the Collection Account with other funds;
(vii) any failure of the Servicer or any of its agents or representatives (including, without limitation, agents, representatives and employees of such Servicer acting pursuant to authority granted under  Section 6.01  hereof) to remit to Collection Account, Collections with respect to Loan Assets remitted to the Servicer or any such agent or representative within two Business Days of receipt;
(viii) the Servicer or any of its agents or representatives (including, without limitation, agents, representatives and employees of such Servicer acting pursuant to authority granted under  Section 6.01  hereof) permits or causes or authorizes the withdraw from the Collection Account of amounts not expressly authorized for withdrawal hereunder;
(ix) the failure by the Servicer to perform any of its duties or obligations in accordance with the provisions of this Agreement or any other Transaction Document or errors or omissions related to such duties;
(x) failure or delay in assisting a successor Servicer in assuming each and all of the Servicer’s obligations to service and administer the Collateral Portfolio, or failure or delay in complying with instructions from the Administrative Agent with respect thereto; or
(xi) any of the events or facts giving rise to a breach of any of the Servicer’s representations, warranties, agreements or covenants set forth in  Article IV ,  Article V  or  Article VI  of this Agreement.
 
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(b) Any amounts subject to the indemnification provisions of this Section 9.02 shall be paid by the Servicer to the Administrative Agent on behalf of the applicable Indemnified Party within five Business Days following receipt by the Servicer of the Administrative Agent’s written demand therefor on behalf of the applicable Indemnified Party (and the Administrative Agent shall pay such amounts to the applicable Indemnified Party promptly after the receipt by the Administrative Agent of such amounts). The Administrative Agent, on behalf of any Indemnified Party making a request for indemnification under this  Section 9.02 , shall submit to the Servicer a certificate setting forth in reasonable detail the basis for and the computations of the Indemnified Amounts with respect to which such indemnification is requested, which certificate shall be conclusive absent demonstrable error.
(c) If for any reason the indemnification provided above in this Section 9.02 is unavailable to the Indemnified Party or is insufficient to hold an Indemnified Party harmless in respect of any losses, claims, damages or liabilities, then the Servicer shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and the Servicer on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable considerations;  provided  that the Servicer shall not be required to contribute in respect of any Indemnified Amounts excluded in Section 9.02(a) .
(d) If the Servicer has made any payments in respect of Indemnified Amounts to the Administrative Agent on behalf of an Indemnified Party pursuant to this  Section 9.02  and such Indemnified Party thereafter collects any of such amounts from others, such Indemnified Party will promptly repay such amounts collected to the Servicer in an amount equal to the amount it has collected from others in respect of such Indemnified Amounts, without interest.
(e) The Servicer shall have no liability for making indemnification hereunder to the extent any such indemnification constitutes recourse for uncollectible or uncollected Loan Assets.
(f) The obligations of the Servicer under this Section 9.02 shall survive the resignation or removal of the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Account Bank, the Backup Servicer or the Collateral Custodian and the termination of this Agreement.
(g) Any indemnification pursuant to this Section 9.02 shall not be payable from the Collateral Portfolio.
Each applicable Indemnified Party shall deliver to the Indemnifying Party under Section 9.01 and Section 9.02, within a reasonable time after such Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by such Indemnified Party relating to the claim giving rise to the Indemnified Amounts.
SECTION 9.03 Legal Proceedings. In the event an Indemnified Party becomes involved in any action, claim, or legal, governmental or administrative proceeding (an “ Action ”) for which it seeks indemnification hereunder, the Indemnified Party shall promptly notify the other party or parties against whom it seeks indemnification (the “ Indemnifying Party ”) in writing of the nature and particulars of the Action;  provided  that its failure to do so shall not relieve the Indemnifying Party of its obligations hereunder except to the extent such failure has a material adverse effect on the Indemnifying Party. Upon written notice to the Indemnified Party acknowledging in writing that the indemnification provided hereunder applies to the Indemnified Party in connection with the Action (subject to the exclusion in the first sentence of Section 9.01 , the first sentence of  Section 9.02  or  Section 9.02(d) , as
 
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applicable), the Indemnifying Party may assume the defense of the Action at its expense with counsel reasonably acceptable to the Indemnified Party. The Indemnified Party shall have the right to retain separate counsel in connection with the Action, and the Indemnifying Party shall not be liable for the legal fees and expenses of the Indemnified Party after the Indemnifying Party has done so;  provided  that if the Indemnified Party determines in good faith that there may be a conflict between the positions of the Indemnified Party and the Indemnifying Party in connection with the Action, or that the Indemnifying Party is not conducting the defense of the Action in a manner reasonably protective of the interests of the Indemnified Party, the reasonable legal fees and expenses of the Indemnified Party shall be paid by the Indemnifying Party;  provided ,  further , that the Indemnifying Party shall not, in connection with any one Action or separate but substantially similar or related Actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees or expenses of more than one separate firm of attorneys (and any required local counsel) for such Indemnified Party, which firm (and local counsel, if any) shall be designated in writing to the Indemnifying Party by the Indemnified Party. If the Indemnifying Party elects to assume the defense of the Action, it shall have full control over the conduct of such defense;  provided  that the Indemnifying Party and its counsel shall, as reasonably requested by the Indemnified Party or its counsel, consult with and keep them informed with respect to the conduct of such defense. The Indemnifying Party shall not settle an Action without the prior written approval of the Indemnified Party unless such settlement provides for the full and unconditional release of the Indemnified Party from all liability in connection with the Action. The Indemnified Party shall reasonably cooperate with the Indemnifying Party in connection with the defense of the Action.
SECTION 9.04 After-Tax Basis. Indemnification under Section 9.01 and 9.02 shall be in an amount necessary to make the Indemnified Party whole after taking into account any Tax consequences to the Indemnified Party of the receipt of the indemnity provided hereunder, including the effect of such Tax or refund on the amount of Tax measured by net income or profits that is or was payable by the Indemnified Party.
ARTICLE X.
THE ADMINISTRATIVE AGENT AND THE LENDER AGENTS
SECTION 10.01 The Administrative Agent.
(a) Appointment. Each Lender Agent and each Secured Party hereby appoints and authorizes the Administrative Agent as its agent hereunder and hereby further authorizes the Administrative Agent to appoint additional agents to act on its behalf and for the benefit of each Lender Agent and each Secured Party. Each Lender Agent and each Secured Party further authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are delegated to the Administrative Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Transaction Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth in this Agreement, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or Lender Agent, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Agreement with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express)
 
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obligations arising under agency doctrine of any Applicable Law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(b) Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects with reasonable care.
(c) Administrative Agent’s Reliance, Etc. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Administrative Agent under or in connection with this Agreement or any of the other Transaction Documents, except for its or their own bad faith, gross negligence or willful misconduct as determined in a final decision by a court of competent jurisdiction. Each Lender, Lender Agent and each Secured Party hereby waives any and all claims against the Administrative Agent or any of its Affiliates for any action taken or omitted to be taken by the Administrative Agent or any of its Affiliates under or in connection with this Agreement or any of the other Transaction Documents, except for its or their own bad faith, gross negligence or willful misconduct as determined in a final decision by a court of competent jurisdiction. Without limiting the foregoing, the Administrative Agent: (i) may consult with legal counsel (including counsel for the Borrower or the Transferor), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation and shall not be responsible for any statements, warranties or representations made in or in connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any of the other Transaction Documents on the part of the Borrower, the Transferor or the Servicer or to inspect the property (including the books and records) of the Borrower, the Transferor or the Servicer; (iv) shall not be responsible for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any of the other Transaction Documents or any other instrument or document furnished pursuant hereto or thereto; and (v) shall incur no liability under or in respect of this Agreement or any of the other Transaction Documents by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile) believed by it to be genuine and signed or sent by the proper party or parties.
(d) Actions by Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of any Lender Agent as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lender Agents and Lenders (other than the Conduit Lenders) against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Lender Agent or Lenders;  provided  that, notwithstanding anything to the contrary herein, the Administrative Agent shall not be required to take any action hereunder if the taking of such action, in the reasonable determination of the Administrative Agent, shall be in violation of any Applicable Law or contrary to any provision of this Agreement or shall expose the Administrative Agent to liability hereunder or otherwise. In the event the Administrative Agent requests the consent of a Lender Agent or Lender pursuant to the foregoing provisions and the
 
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Administrative Agent does not receive a consent (either positive or negative) from such Person within ten Business Days of such Person’s receipt of such request, then such Lender or Lender Agent shall be deemed to have declined to consent to the relevant action.
(e) Notice of Event of Default, Unmatured Event of Default or Servicer Termination Event. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of an Event of Default, Unmatured Event of Default or Servicer Termination Event, unless the Administrative Agent has received written notice from a Lender, Lender Agent, the Borrower or the Servicer referring to this Agreement, describing such Event of Default, Unmatured Event of Default or Servicer Termination Event and stating that such notice is a “Notice of Event of Default,” “Notice of Unmatured Event of Default” or “Notice of Servicer Termination Event,” as applicable. The Administrative Agent shall (subject to Section 10.01(c) ) take such action with respect to such Event of Default, Unmatured Event of Default or Servicer Termination Event as may be requested by any Lender Agent acting jointly or as the Administrative Agent shall deem advisable or in the best interest of the Administrative Agent.
(f) Credit Decision with Respect to the Administrative Agent. Each Lender Agent and each Secured Party acknowledges that none of the Administrative Agent or any of its Affiliates has made any representation or warranty to it, and that no act by the Administrative Agent hereinafter taken, including any consent to and acceptance of any assignment or review of the affairs of the Borrower, the Servicer, the Transferor or any of their respective Affiliates or review or approval of any of the Collateral Portfolio, shall be deemed to constitute any representation or warranty by any of the Administrative Agent or its Affiliates to any Lender Agent as to any matter, including whether the Administrative Agent has disclosed material information in its possession. Each Lender Agent and each Secured Party acknowledges that it has, independently and without reliance upon the Administrative Agent, or any of the Administrative Agent’s Affiliates, and based upon such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and the other Transaction Documents to which it is a party. Each Lender Agent and each Secured Party also acknowledges that it will, independently and without reliance upon the Administrative Agent, or any of the Administrative Agent’s Affiliates, and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents to which it is a party. Each Lender Agent and each Secured Party hereby agrees that the Administrative Agent shall not have any duty or responsibility to provide any Lender Agent with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower, the Servicer, the Transferor or their respective Affiliates which may come into the possession of the Administrative Agent or any of its Affiliates.
(g) Indemnification of the Administrative Agent. Each Lender and Lender Agent (other than the Conduit Lenders) agrees to indemnify the Administrative Agent (to the extent not reimbursed by the Borrower or the Servicer), ratably in accordance with its Pro Rata Share, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent in any way relating to or arising out of this Agreement or any of the other Transaction Documents, or any action taken or omitted by the Administrative Agent hereunder or thereunder;  provided  that the Lender Agents and Lender shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent’s bad faith, gross negligence or willful misconduct as determined in a final decision by a court of competent jurisdiction;  provided ,  further , that
 
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no action taken in accordance with the directions of any Lender or Lender Agent shall be deemed to constitute bad faith, gross negligence or willful misconduct for purposes of this  Article X . Without limitation of the foregoing, each Lender (other than the Conduit Lenders) agrees to reimburse the Administrative Agent, ratably in accordance with its Pro Rata Share, promptly upon demand for any out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent in connection with the administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and the other Transaction Documents, to the extent that such expenses are incurred in the interests of or otherwise in respect of the Administrative Agent, the Lender Agents or Lenders hereunder or thereunder and to the extent that the Administrative Agent is not reimbursed for such expenses by the Borrower or the Servicer.
(h) Successor Administrative Agent. The Administrative Agent may resign at any time, effective upon the appointment and acceptance of a successor Administrative Agent as provided below, by giving at least five days’ written notice thereof to each Lender Agent and the Borrower and may be removed at any time with cause by the Lender Agents and the Borrower acting jointly. Upon any such resignation or removal, the Lender Agents acting jointly shall appoint a successor Administrative Agent (which, so long as no Event of Default is then continuing, shall not be a Competitor and shall otherwise be subject to the consent of the Borrower, such consent not to be unreasonably withheld with respect to a proposed successor that is not a Competitor). Each Lender Agent agrees that it shall not unreasonably withhold or delay its approval of the appointment of a successor Administrative Agent. If no such successor Administrative Agent shall have been so appointed, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation or the removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Secured Parties, appoint a successor Administrative Agent which successor Administrative Agent shall be either (i) a commercial bank organized under the laws of the United States or of any state thereof and have a combined capital and surplus of at least $50,000,000 or (ii) an Affiliate of such a bank, and (iii) so long as no Event of Default is continuing, shall not be a Competitor. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this  Article X  shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
(i) Payments by the Administrative Agent. Unless specifically allocated to a specific Lender Agent pursuant to the terms of this Agreement, all amounts received by the Administrative Agent on behalf of the Lenders shall be allocated in accordance with their related Lender’s respective Pro Rata Share on the Business Day received by the Administrative Agent, unless such amounts are received after 1:00 p.m. on such Business Day, in which case the Administrative Agent shall use its reasonable efforts to pay such amounts to each Lender Agent on such Business Day, but, in any event, shall pay such amounts to such Lender Agent not later than the following Business Day.
SECTION 10.02 The Lender Agents.
(a) Authorization and Action. Each Lender, respectively, hereby designates and appoints its applicable Lender Agent to act as its agent hereunder and under each other Transaction Document, and
 
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authorizes such Lender Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to such Lender Agent by the terms of this Agreement and the other Transaction Documents, together with such powers as are reasonably incidental thereto. No Lender Agent shall have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, or any fiduciary relationship with its related Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of such Lender Agent shall be read into this Agreement or any other Transaction Document or otherwise exist for such Lender Agent. In performing its functions and duties hereunder and under the other Transaction Documents, each Lender Agent shall act solely as agent for its related Lender and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Borrower or the Servicer or any of the Borrower’s or the Servicer’s successors or assigns. No Lender Agent shall be required to take any action that exposes such Lender Agent to personal liability or that is contrary to this Agreement, any other Transaction Document or Applicable Law. The appointment and authority of each Lender Agent hereunder shall terminate upon the indefeasible payment in full of all Obligations. Each Lender Agent hereby authorizes the Administrative Agent to file any UCC financing statement deemed necessary by the Administrative Agent on behalf of such Lender Agent (the terms of which shall be binding on such Lender Agent ).
(b) Delegation of Duties. Each Lender Agent may execute any of its duties under this Agreement and each other Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Lender Agent shall be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
(c) Exculpatory Provisions. Neither any Lender Agent nor any of its directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement or any other Transaction Document (except for its, their or such Person’s own gross negligence or willful misconduct as determined in a final decision by a court of competent jurisdiction), or (ii) responsible in any manner to its related Lender for any recitals, statements, representations or warranties made by the Borrower or the Servicer contained in  Article IV , any other Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement or any other Transaction Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, any other Transaction Document or any other document furnished in connection herewith or therewith, or for any failure of the Borrower or the Servicer to perform its obligations hereunder or thereunder, or for the satisfaction of any condition specified in this Agreement, or for the perfection, priority, condition, value or sufficiency of any collateral pledged in connection herewith. No Lender Agent shall be under any obligation to its related Lender to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Borrower or the Servicer. No Lender Agent shall be deemed to have knowledge of any Event of Default or Unmatured Event of Default unless such Lender Agent has received notice from the Borrower or its related Lender.
(d) Reliance by Lender Agent. Each Lender Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by such Lender Agent. Each Lender Agent shall in all cases be
 
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fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of its related Lender as it deems appropriate and it shall first be indemnified to its satisfaction by its related Lenders (other than the Conduit Lenders);  provided  that, unless and until such Lender Agent shall have received such advice, such Lender Agent may take or refrain from taking any action, as the Lender Agent shall deem advisable and in the best interests of its related Lender. Each Lender Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of its related Lender, and such request and any action taken or failure to act pursuant thereto shall be binding upon its related Lender.
(e) Non-Reliance on Lender Agent. Each Lender expressly acknowledges that neither its related Lender Agent, nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by such Lender Agent hereafter taken, including, without limitation, any review of the affairs of the Borrower or the Servicer, shall be deemed to constitute any representation or warranty by such Lender Agent. Each Lender represents and warrants to its related Lender Agent that it has and will, independently and without reliance upon its related Lender Agent, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Borrower and made its own decision to enter into this Agreement, the other Transaction Documents and all other documents related hereto or thereto.
(f) The Lender Agents are in their Respective Individual Capacities. Each Lender Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as though such Lender Agent were not a Lender Agent hereunder. With respect to Advances pursuant to this Agreement, each Lender Agent shall have the same rights and powers under this Agreement in its individual capacity as any Lender and may exercise the same as though it were not a Lender Agent, and the terms “Lender,” and “Lenders,” shall include the Lender Agent in its individual capacity.
(g) Successor Lender Agent. Each Lender Agent may, upon five days’ notice to the Borrower and its related Lender, and such Lender Agent will, upon the direction of its related Lender resign as the Lender Agent for such Lender. If any Lender Agent shall resign, then its related Lender during such five day period shall appoint a successor agent that, so long as no Event of Default is continuing, shall not be a Competitor. If for any reason no successor agent is appointed by such Lender during such five day period, then effective upon the termination of such five day period, and the Borrower shall make all payments in respect of the Obligations due to such Lender directly to such Lender, and for all purposes shall deal directly with such Lender. After any retiring Lender Agent’s resignation hereunder as a Lender Agent, the provisions of  Articles IX  and  X  shall inure to its benefit with respect to any actions taken or omitted to be taken by it while it was a Lender Agent under this Agreement.
ARTICLE XI.
COLLATERAL AGENT
SECTION 11.01 Designation of Collateral Agent.
(a) Initial Collateral Agent. Each of the Borrower, the Administrative Agent and the Lender Agents hereby designate and appoint the Collateral Agent to act as its agent for the purposes of perfection of a security interest in the Collateral Portfolio and hereby authorizes the Collateral Agent to take such actions on its behalf and on behalf of each of the Secured Parties and to exercise such powers and perform such duties as are expressly granted to the Collateral Agent by this Agreement. The
 
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Collateral Agent hereby accepts such agency appointment to act as Collateral Agent pursuant to the terms of this Agreement, until its resignation or removal as Collateral Agent pursuant to the terms hereof.
(b) Successor Collateral Agent. Upon the Collateral Agent’s receipt of a Collateral Agent Termination Notice from the Administrative Agent of the designation of a successor Collateral Agent pursuant to the provisions of  Section 11.05 , the Collateral Agent agrees that it will terminate its activities as Collateral Agent hereunder.
(c) Secured Party. The Administrative Agent, the Lender Agents and the Lenders hereby appoint Citibank, in its capacity as Collateral Agent hereunder, as their agent for the purposes of perfection of a security interest in the Collateral Portfolio. Citibank, in its capacity as Collateral Agent hereunder, hereby accepts such appointment and agrees to perform the duties set forth in Section 11.02(b) .
SECTION 11.02 Duties of Collateral Agent.
(a) Appointment. The Borrower, the Administrative Agent and the Lender Agents each hereby appoints Citibank to act as Collateral Agent, for the benefit of the Secured Parties. The Collateral Agent hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein.
(b) Duties. On or before the initial Advance Date, and until its removal pursuant to Section 11.05, the Collateral Agent shall perform, on behalf of the Secured Parties, the following duties and obligations:
(i) The Collateral Agent shall calculate amounts to be remitted pursuant to Section 2.04 to the applicable parties and notify the Servicer and the Administrative Agent in the event of any discrepancy between the Collateral Agent’s calculations and the Servicing Report (such dispute to be resolved in accordance with  Section 2.05 );
(ii) The Collateral Agent shall instruct the Account Bank to make payments pursuant to the terms of the Servicing Report or as otherwise directed in accordance with  Sections 2.04  or  2.05  (the “ Payment Duties ”).
(iii) The Collateral Agent shall provide to the Servicer a copy of all written notices and communications identified as being sent to it in connection with the Loan Assets and the other Collateral Portfolio held hereunder which it receives from the related Obligor, participating bank or agent bank. In no instance shall the Collateral Agent be under any duty or obligation to take any action on behalf of the Servicer in respect of the exercise of any voting or consent rights, or similar actions, unless it receives specific written instructions from the Servicer, prior to the occurrence of an Event of Default or the Administrative Agent, after the occurrence of Event of Default, in which event the Collateral Agent shall vote, consent or take such other action in accordance with such instructions.
(c) (i) The Administrative Agent, each Lender Agent and each Secured Party further authorizes the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the other Transaction Documents as are expressly delegated to the Collateral Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto.
 
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In furtherance, and without limiting the generality of the foregoing, each Secured Party hereby appoints the Collateral Agent (acting at the direction of the Administrative Agent) as its agent to execute and deliver all further instruments and documents, and take all further action that the Administrative Agent deems necessary or desirable in order to perfect, protect or more fully evidence the security interests granted by the Borrower hereunder, or to enable any of them to exercise or enforce any of their respective rights hereunder, including, without limitation, the execution by the Collateral Agent as secured party/assignee of such financing or continuation statements, or amendments thereto or assignments thereof, relative to all or any of the Loan Assets now existing or hereafter arising, and such other instruments or notices, as may be necessary or appropriate for the purposes stated hereinabove. Nothing in this  Section 11.02(c)  shall be deemed to relieve the Borrower or the Servicer of their respective obligations to protect the interest of the Collateral Agent (for the benefit of the Secured Parties) in the Collateral Portfolio, including to file financing and continuation statements in respect of the Collateral Portfolio in accordance with  Section 5.01(t) .
(ii) The Administrative Agent may direct the Collateral Agent to take any such incidental action hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Collateral Agent hereunder, the Collateral Agent shall not be required to take any such incidental action hereunder, but shall be required to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) upon the direction of the Administrative Agent; provided  that the Collateral Agent shall not be required to take any action hereunder at the request of the Administrative Agent, any Secured Party or otherwise if the taking of such action, in the reasonable determination of the Collateral Agent, (x) shall be in violation of any Applicable Law or contrary to any provisions of this Agreement or (y) shall expose the Collateral Agent to liability hereunder or otherwise (unless it has received indemnity which it reasonably deems to be satisfactory with respect thereto). In the event the Collateral Agent requests the consent of the Administrative Agent and the Collateral Agent does not receive a consent (either positive or negative) from the Administrative Agent within 10 Business Days of its receipt of such request, then the Administrative Agent shall be deemed to have declined to consent to the relevant action.
(iii) Except as expressly provided herein, the Collateral Agent shall not be under any duty or obligation to take any affirmative action to exercise or enforce any power, right or remedy available to it under this Agreement (x) unless and until (and to the extent) expressly so directed by the Administrative Agent or (y) prior to the Final Maturity Date (and upon such occurrence, the Collateral Agent shall act in accordance with the written instructions of the Administrative Agent pursuant to clause (x)). The Collateral Agent shall not be liable for any action taken, suffered or omitted by it in accordance with the request or direction of any Secured Party, to the extent that this Agreement provides such Secured Party the right to so direct the Collateral Agent, or the Administrative Agent. The Collateral Agent shall not be deemed to have notice or knowledge of any matter hereunder, including an Event of Default, unless a Responsible Officer of the Collateral Agent has knowledge of such matter or written notice thereof is received by the Collateral Agent.
(d) If, in performing its duties under this Agreement, the Collateral Agent is required to decide between alternative courses of action, the Collateral Agent may request written instructions from the Administrative Agent as to the course of action desired by it. If the Collateral Agent does not receive such instructions within two Business Days after it has requested them, the Collateral Agent may, but shall be under no duty to, take or refrain from taking any such courses of action. The Collateral Agent
 
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shall act in accordance with instructions received after such two Business Day period except to the extent it has already, in good faith, taken or committed itself to take, action inconsistent with such instructions. The Collateral Agent shall be entitled to rely on the advice of legal counsel and independent accountants in performing its duties hereunder and shall be deemed to have acted in good faith if it acts in accordance with such advice.
(e) Concurrently herewith, the Administrative Agent directs the Collateral Agent and the Collateral Agent is authorized to enter into the Collection Account Agreement. For the avoidance of doubt, all of the Collateral Agent’s rights, protections and immunities provided herein shall apply to the Collateral Agent for any actions taken or omitted to be taken under the Collection Account Agreement in such capacity.
SECTION 11.03 Merger or Consolidation.
Any Person (i) into which the Collateral Agent may be merged or consolidated, (ii) that may result from any merger or consolidation to which the Collateral Agent shall be a party, or (iii) that may succeed to the properties and assets of the Collateral Agent substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Collateral Agent hereunder, shall be the successor to the Collateral Agent under this Agreement without further act of any of the parties to this Agreement.
SECTION 11.04 Collateral Agent Compensation.
(a) Compensation. As compensation for its Collateral Agent activities hereunder, the Collateral Agent shall be entitled to the Collateral Agent Fees and Collateral Agent Expenses from the Borrower, payable to the extent of funds available therefor pursuant to the provisions of  Section 2.04 . The Collateral Agent’s entitlement to receive the Collateral Agent Fees shall cease on the earlier to occur of: (i) its removal as Collateral Agent pursuant to  Section 11.05 , (ii) its resignation as Collateral Agent pursuant to  Section 11.07  or (ii) the termination of this Agreement.
(b) Negative Covenant Regarding Compensation. The Collateral Agent will not make any changes to the Collateral Agent Fees without the prior written approval of the Administrative Agent and the Borrower.
SECTION 11.05 Collateral Agent Removal.
The Collateral Agent may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Collateral Agent (the “ Collateral Agent Termination Notice ”);  provided  that, notwithstanding its receipt of a Collateral Agent Termination Notice, the Collateral Agent shall continue to act in such capacity until a successor Collateral Agent (who, so long as no Event of Default is continuing, shall not be a Competitor) has been appointed and has agreed to act as Collateral Agent hereunder;  provided  that the Collateral Agent shall continue to receive compensation of its fees and expenses in accordance with  Section 11.04  above while so serving as the Collateral Agent prior to a successor Collateral Agent being appointed.
SECTION 11.06 Limitation on Liability.
(a) The Collateral Agent may conclusively rely on and shall be fully protected in acting upon any certificate, instrument, opinion, notice, letter, telegram or other document delivered to it and that
 
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in good faith it reasonably believes to be genuine and that has been signed by the proper party or parties. The Collateral Agent may rely conclusively on and shall be fully protected in acting upon (a) the written instructions of any designated officer of the Administrative Agent or (b) the verbal instructions of the Administrative Agent.
(b) The Collateral Agent may consult counsel satisfactory to it and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(c) The Collateral Agent shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or law, or for anything that it may do or refrain from doing in connection herewith except in the case of its willful misconduct or grossly negligent performance or omission of its duties.
(d) The Collateral Agent makes no warranty or representation and shall have no responsibility (except as expressly set forth in this Agreement) as to the content, enforceability, completeness, validity, sufficiency, value, genuineness, ownership or transferability of the Collateral Portfolio, and will not be required to and will not make any representations as to the validity or value (except as expressly set forth in this Agreement) of any of the Collateral Portfolio. The Collateral Agent shall not be obligated to take any legal action hereunder that might in its judgment involve any expense or liability unless it has been furnished with an indemnity reasonably satisfactory to it.
(e) The Collateral Agent shall have no duties or responsibilities except such duties and responsibilities as are specifically set forth in this Agreement and no covenants or obligations shall be implied in this Agreement against the Collateral Agent. Notwithstanding any provision to the contrary elsewhere in the Transaction Documents, the Collateral Agent shall not have any fiduciary relationship with any party hereto or any Secured Party in its capacity as such, and no implied covenants, functions, obligations or responsibilities shall be read into this Agreement, the other Transaction Documents or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing, it is hereby expressly agreed and stipulated by the other parties hereto that the Collateral Agent shall not be required to exercise any discretion hereunder and shall have no investment or management responsibility.
(f) The Collateral Agent shall not be required to expend or risk its own funds in the performance of its duties hereunder.
(g) It is expressly agreed and acknowledged that the Collateral Agent is not guaranteeing performance of or assuming any liability for the obligations of the other parties hereto or any parties to the Collateral Portfolio.
(h) Subject in all cases to the last sentence of Section 2.05, in case any reasonable question arises as to its duties hereunder, the Collateral Agent may, prior to the occurrence of an Event of Default or the Final Maturity Date, request instructions from the Servicer and may, after the occurrence of an Event of Default or the Final Maturity Date, request instructions from the Administrative Agent, and shall be entitled at all times to refrain from taking any action unless it has received instructions from the Servicer or the Administrative Agent, as applicable. The Collateral Agent shall in all events have no liability, risk or cost for any action taken pursuant to and in compliance with the instruction of the Administrative Agent. In no event shall the Collateral Agent be liable for special, indirect or
 
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consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
(i) The Collateral Agent shall not be liable for the acts or omissions of the Collateral Custodian under this Agreement and shall not be required to monitor the performance of the Collateral Custodian. Notwithstanding anything herein to the contrary, the Collateral Agent shall have no duty to perform any of the duties of the Collateral Custodian under this Agreement.
SECTION 11.07 Collateral Agent Resignation.
The Collateral Agent may resign at any time by giving not less than 90 days written notice thereof to the Administrative Agent and with the consent of the Administrative Agent, which consent shall not be unreasonably withheld (and, so long as no Event of Event of Default or Unmatured Event of Default is then continuing, with the consent of the Borrower, such consent not to be unreasonably withheld). Upon receiving such notice of resignation, the Administrative Agent (acting at the direction of the Majority Lenders) shall promptly appoint a successor collateral agent or collateral agents by written instrument, in duplicate, executed by the Administrative Agent, one copy of which shall be delivered to the Collateral Agent so resigning and one copy to the successor collateral agent or collateral agents, together with a copy to the Borrower, Servicer and Collateral Custodian. If no successor collateral agent shall have been appointed and an instrument of acceptance by a successor Collateral Agent shall not have been delivered to the Collateral Agent within 45 days after the giving of such notice of resignation, the resigning Collateral Agent may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent. Notwithstanding anything herein to the contrary, the Collateral Agent may not resign prior to a successor Collateral Agent being appointed.
ARTICLE XII.
MISCELLANEOUS
SECTION 12.01 Amendments and Waivers.
(a) (i) No amendment or modification of any provision of this Agreement shall be effective without the written agreement of the Borrower, the Servicer, the Majority Lenders and, solely if such amendment or modification would adversely affect the rights and obligations of the Administrative Agent, the Collateral Agent, the Backup Servicer, the Account Bank or the Collateral Custodian, the written agreement of the Administrative Agent, the Collateral Agent, the Account Bank, the Backup Servicer or the Collateral Custodian, as applicable and (ii) no termination or waiver of any provision of this Agreement or consent to any departure therefrom by the Borrower or the Servicer shall be effective without the written concurrence of the Majority Lenders. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
(b) Notwithstanding the provisions of Section 12.01(a), (i) the written consent of all of the Lenders holding Commitments shall be required for any amendment, modification or waiver (A) reducing (without payment thereon) the principal amount due and owing under any outstanding Advances or the Yield thereon, or any fees payable to Lenders holding Commitments pursuant to this Agreement, (B) postponing any date for any payment of any Advance, or the Yield thereon, (C) modifying the provisions of this  Section 12.01 , (D) extending the Scheduled Commitment Termination Date or the Scheduled Maturity Date, (E) of any of the following defined terms (and any defined terms used in and material to calculating any of the following defined terms): Borrowing Base, Collateral Quality Test,
 
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Concentration Limits, Eligible Loan Asset, Minimum Credit Enhancement, and Assigned Value Adjustment Event, and (F) of any provision of  Section 2.04 , and (ii) the written consent of the Required Lenders shall be required for any amendment, modification or waiver not otherwise set forth in clause (i) of this  Section 12.01(b)  which (A) amends, modifies or waives any Financial Covenant (whether of the Borrower or of CGMS) or (B) amends, modifies or waives any negative covenant of the Borrower or Servicer set forth in  Sections 5.02  or  5.05 .
(c) The Administrative Agent shall provide S&P with a copy of any amendment, restatement, supplement or other modification of this Agreement or any of the other Transaction Documents as long as the transaction is funded in a Conduit Lender and the commercial paper of which is rated by S&P.
(d) Notwithstanding anything to the contrary contained herein, no Defaulting Lender shall have any right to approve or vote on any amendment, waiver or consent hereunder, except that the Commitment of such Defaulting Lender shall not be increased or extended without the consent of such Defaulting Lender.
SECTION 12.02 Notices, Etc. All notices and other communications hereunder shall, unless otherwise stated herein, be in writing (which shall include facsimile communication and communication by e-mail) and faxed, e-mailed or delivered, to each party hereto, at its address set forth below:

If to the Borrower:	  	TCG BDC SPV LLC (f/k/a Carlyle GMS Finance SPV LLC)	
 	  	520 Madison Avenue	
 	  	New York, NY 10022	
 	  	Attention: Orit Mizrachi, Chief Operating Officer	
 	  	Facsimile No.: (212) 813-4508	
 	  	Phone No.: (212) 813-4939	
 	 	
If to the Servicer:	  	TCG BDC, Inc. (f/k/a Carlyle GMS Finance, Inc.)	
 	  	520 Madison Avenue	
 	  	New York, NY 10022	
 	  	Attention: Orit Mizrachi, Chief Operating Officer	
 	  	Facsimile No.: (212) 813-4508	
 	  	Phone No.: (212) 813-4939	
 	  	Attention: Tom Hennigan, Chief Risk Officer	
 	  	Facsimile No.: (212) 813-4508	
 	  	Phone No.: (212) 813-4827	
 
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If to the Transferor:	  	TCG BDC, Inc. (f/k/a Carlyle GMS Finance, Inc.)	 	
 	  	520 Madison Avenue	 	
 	  	New York, NY 10022	 	
 	  	Attention: Orit Mizrachi, Chief Operating Officer	 	
 	  	Facsimile No.: (212) 813-4508	 	
 	  	Phone No.: (212) 813-4939	 	
 	  	Attention: Tom Hennigan, Chief Risk Officer	 	
 	  	Facsimile No.: (212) 813-4508	 	
 	  	Phone No.: (212) 813-4827	 	
 	 	 	
With a copy to (with respect to the Borrower, the Servicer and the Transferor):	  	Dominic K.L. Yoong, Esq.	 	
 	  	Latham & Watkins LLP	 	 	
 	  	355 South Grand Avenue	 	 	
 	  	Los Angeles, California 90071	 	 	
 	  	Facsimile No.: (213) 891-8763	 	 	
 	  	Email: dominic.yoong@lw.com	 	 	
 	 	 	 	
If to the Lender:	  	Citibank, N.A.,	 	 	
 	  	390388 Greenwich Street, 7th Floor	 	 	
 	  	New York, New York 10013	 	 	
 	  	Attention: Mr. Brett Bushinger, Vice President	 	 	
 	  	Facsimile No.: (646) 308-6744	 	 	
 	  	Email: brett.bushinger@citi.com	 	 	
 	 	 	 	
If to the Collateral Agent:	  	Citibank, N.A.,	 	 	
 	  	390388 Greenwich Street, 7th Floor	 	 	
 	  	New York, New York 10013	 	 	
 	  	Attention: Mr. Brett Bushinger, Vice President	 	 	
 	  	Facsimile No.: (646) 308-6744	 	 	
 	  	Email: brett.bushinger@citi.com	 	 	
 	 	 	 	
If to the Administrative Agent	  	Citibank, N.A.,	 	 	
 	  	390388 Greenwich Street, 7th Floor	 	 	
 	  	New York, New York 10013	 	 	
 	  	Attention: Mr. Brett Bushinger, Vice President	 	 	
 	  	Facsimile No.: (646) 308-6744	 	 	
 	  	Email: brett.bushinger@citi.com	 	 	
 	 	 	 	
With a copy to (with respect to the Collateral Agent and Administrative Agent):	  	Terry D. Novetsky, Esq.	 	 	
 	  	Kaye Scholer,King & Spalding LLP	 	 	
 	  	425 Park1185 Avenue of the Americas	 	 	
 	  	New York, New York 1002210036	 	 	
 	  	Facsimile No.: (212) 836-6490556-2222	 	 	
 	  	Email: tnovetsky@kayescholerkslaw.com	 	 	
 	 	 	 	
If to the Account Bank:	  	Wells Fargo Bank, National Association	 	 	
 	  	9062 Old Annapolis Road	 	 	
 	  	Columbia, MD 21045	 	 	
 
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 	  	Attention: Corporate Trust Services	 	
 	  	Facsimile No.: (410) 715-4513	 	
 	  	Email: Carlyle1@wellsfargo.com	 	
 	 	 	
If to the Collateral Administrator:	  	Wells Fargo Bank, National Association	 	
 	  	9062 Old Annapolis Road	 	
 	  	Columbia, MD 21045	 	
 	  	Attention: Corporate Trust Services	 	
 	  	Facsimile No.: (410) 715-4513	 	
 	  	Email: Carlyle1@wellsfargo.com	 	
 	 	 	
If to the Backup Servicer or Collateral Custodian:	  	Wells Fargo Bank, National Association	 	
 	  	Corporate Trust Services, Asset Backed Securities	 	
 	  	625 Marquette Avenue,	 	
 	  	Minneapolis, Minnesota 55402	 	
 	  	Attention: Chad Schafer	 	
 	  	Facsimile No.: (612) 667 3464	 	
 	  	Email: chad.d.schafer@wellsfargo.com	 	
 	 	 	
With files delivered to:	  	Wells Fargo Bank, National Association	 	
 	  	ABS Custody Vault	 	
 	  	1055 10th Ave. SE	 	
 	  	MAC N9401-011	 	
 	  	Minneapolis, MN 55414	 	
 	  	Attention: Corporate Trust Services –	 	
 	  	Asset-Backed Securities Vault	 	
 	  	Facsimile No.: (612) 667-8058	 	
 	  	Phone No: (612) 667-1080	 	
 	 	 	
With a copy to:	  	Citibank, N.A.,	 	
 	  	390388 Greenwich Street, 7th Floor	 	
 	  	New York, New York 10013	 	
 	  	Attention: Mr. Brett Bushinger, Vice President	 	
 	  	Facsimile No.: (646) 308-6744	 	
 	  	Email: brett.bushinger@citi.com	 	
or at such other address as shall be designated by such party in a written notice to the other parties hereto. Notices and communications by facsimile and e-mail shall be effective when sent, and notices and communications sent by other means shall be effective when received.
SECTION 12.03 No Waiver Remedies. No failure on the part of the Administrative Agent, the Collateral Agent, any Lender or any Lender Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
 
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SECTION 12.04 Binding Effect; Assignability; Multiple Lenders.
(a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the Servicer, the Administrative Agent, each Lender, the Lender Agents, the Collateral Agent, the Account Bank, the Collateral Custodian and their respective successors and permitted assigns. Each Lender and their respective successors and assigns may assign (with the consent of the Administrative Agent, such consent not to be unreasonably withheld), or grant a security interest or sell a participation interest in, (i) this Agreement and such Lender’s rights and obligations hereunder and interest herein in whole or in part (including by way of the sale of participation interests therein) or (ii) any Advance (or portion thereof) or any Revolving Note (or any portion thereof) to any Eligible Assignee;  provided  that prior to an Event of Default (unless waived or rescinded), consent of the Borrower (such consent not to be unreasonably withheld) shall be required for (x) a Liquidity Bank to assign to any Eligible Assignee that is not a Liquidity Bank, a Conduit Lender in such Liquidity Bank’s Lender Group or an Affiliate of a Liquidity Bank or (y) an Institutional Lender to assign to any Eligible Assignee that is not an Affiliate of such Lender;  provided , further ,  that , a Conduit Lender may at any time pledge or grant a security interest or Lien in all or any portion of its rights under this Agreement to secure any obligations of such Conduit Lender, without notice to or consent of the Borrower, the Servicer or any other Person so long as such pledge or grant of a security interest or Lien shall not release such Conduit Lender from any of its obligations hereunder, or substitute any such pledgee or guarantee for such Conduit Lender as a party hereto. Any such assignee, that is not, immediately prior thereto, a Lender hereunder (which, for the avoidance of doubt, shall not include the purchaser of a participation interest or the grantee of a security interest, but which shall include any such grantee of a security interest at the time of completion, but not before, of any foreclosure on such security interest where such grantee seeks to become a Lender hereunder) shall execute and deliver to the Servicer, the Borrower and the Administrative Agent a fully-executed Transferee Letter substantially in the form of  Exhibit N  hereto (a “ Transferee Letter ”) and a fully-executed Joinder Supplement. The parties to any such assignment, grant or sale of a participation interest shall execute and deliver to the related Lender Agent for its acceptance and recording in its books and records, such agreement or document as may be satisfactory to such parties and the applicable Lender Agent. None of the Borrower, the Transferor or the Servicer may assign, or permit any Lien to exist upon, any of its rights or obligations hereunder or under any Transaction Document or any interest herein or in any Transaction Document without the prior written consent of each Lender Agent and the Administrative Agent. Nothing in this Agreement, the Transferee Letter or Joinder Supplement shall restrict or delay a Conduit Lender’s ability to assign its interests hereunder to its Liquidity Bank or an Affiliate or to any other Conduit Lender in its Lender Group or to grant a security interest in its interests hereunder to a Conduit Trustee.
(b) Notwithstanding any other provision of this Section 12.04, any Lender may at any time pledge or grant a security interest in all or any portion of its rights (including, without limitation, rights to payment of principal and interest) under this Agreement or under a Liquidity Agreement to secure obligations of such Lender to a Federal Reserve Bank, without notice to or consent of the Borrower or the Administrative Agent;  provided  that no such pledge or grant of a security interest shall release such Lender from any of its obligations hereunder or under such Liquidity Agreement, or substitute any such pledgee or grantee for such Lender as a party hereto or to such Liquidity Agreement, as the case may be.
(c) If a Lender (i) is a Defaulting Lender, (ii) fails to give its consent to any amendment, waiver or action for which consent of all Lenders was required and the Majority Lenders consented (whether pursuant to  Section 12.01  or otherwise), or (iii) requests that the Administrative Agent deliver a demand for payment by the Borrower of amounts payable pursuant to  Section 2.10(a)  or (b) , then, in
 
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addition to any other rights and remedies that any Person may have, the Borrower may, by notice to the applicable Lender Agent within 120 days after such event (with a copy of such notice concurrently delivered to the Administrative Agent), require such Lender Group to assign all of its rights and obligations under the Transaction Documents to one or more Eligible Assignees specified by the Borrower or the Administrative Agent within 20 days after the Borrower’s notice. The Administrative Agent is irrevocably appointed as attorney-in-fact to execute any such assignment if any member of the affected Lender Group fails to execute same. The affected Lender Agent on behalf of the Lender Group shall be entitled to receive, in cash, concurrently with such assignment, all amounts owed to it under the Transaction Documents, including all principal, interest and fees through the date of assignment (and including, for the avoidance of doubt, any amounts payable pursuant to  Section 2.10(a)  or  (b)  the request for which resulted in the application of this  Section 12.04(c) ).
(d) Upon the effectuation of any assignment by any Lender of all or any of its rights and obligations under the Transaction Documents pursuant to  Section 12.04(a)  or  Section 12.04(c)  and the delivery to the Administrative Agent of all assignment documentation and the Transferee Letter, the Administrative Agent shall revise  Annex A  to reflect such assignment.
(e) Each Affected Party and each Indemnified Party shall be an express third party beneficiary of this Agreement.
SECTION 12.05 Term of This Agreement. This Agreement, including, without limitation, the Borrower’s representations and covenants set forth in  Articles IV  and  V  and the Servicer’s representations, covenants and duties set forth in  Articles IV ,  V  and  VI , shall remain in full force and effect until the Collection Date;  provided  that the rights and remedies with respect to any breach of any representation and warranty made or deemed made by the Borrower or the Servicer pursuant to  Articles III and  IV  and the indemnification and payment provisions of  Article IX ,  X  and  Article XII  and the provisions of  Section 2.10 , Section 2.11 ,  Section 12.07 ,  Section 12.08  and  Section 12.09  shall be continuing and shall survive any termination of this Agreement.
SECTION 12.06GOVERNING LAW; JURY WAIVER. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER.
SECTION 12.07 Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the Collateral Agent, the Account Bank, the Backup Servicer, the Administrative Agent, the Lenders, the Lender Agents, the Collateral Custodian, the Collateral Administrator and their respective Affiliates under  Section 9.01  and  Section 9.02  hereof, each of the Borrower and the Servicer agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Account Bank, the Backup Servicer, the Collateral Administrator and the Collateral Custodian incurred in connection with the pre-closing due diligence, preparation, execution, delivery, administration (including due diligence and periodic auditing and inspections incurred in connection with  clauses (hh)  and  (ii)  of  Section 5.01  or following an Event of Default or Servicer Termination Event and all other related fees and expenses), syndication, renewal, amendment or modification of, any waiver or consent issued in connection with, this Agreement, the Transaction
 
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Documents and the other documents to be delivered hereunder or in connection herewith, including, without limitation, the reasonable and documented fees, disbursements and other charges of rating agency and accounting costs and fees, the reasonable and documented fees and out-of-pocket expenses of counsel for the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Account Bank, the Backup Servicer, the Collateral Administrator and the Collateral Custodian with respect thereto and with respect to advising the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Account Bank, the Collateral Administrator and the Collateral Custodian as to their respective rights and remedies under this Agreement and the other documents to be delivered hereunder or in connection herewith, and all reasonable out-of-pocket costs and expenses, if any (including counsel fees and expenses), incurred by the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Account Bank, the Backup Servicer, the Collateral Administrator or the Collateral Custodian in connection with the enforcement or potential enforcement of this Agreement or any Transaction Document by such Person and the other documents to be delivered hereunder or in connection herewith.
(b) The Borrower, the Servicer and the Transferor shall pay on demand any and all present and future stamp, sales, excise, property and other similar Taxes and fees (“ Other Taxes ”) payable or determined to be payable to any Governmental Authority in connection with the execution, delivery, enforcement of, filing and recording of this Agreement, the other Transaction Documents or any other document providing liquidity support, credit enhancement or other similar support to the Lenders in connection with this Agreement or the funding or maintenance of Advances hereunder.
(c) The Servicer and the Transferor shall pay on demand all other reasonable and documented out-of-pocket costs, expenses and Taxes (excluding Taxes imposed on or measured by net income or Excluded Taxes) incurred by the Administrative Agent, the Lenders, the Lender Agents, the Collateral Agent, the Collateral Custodian, the Backup Servicer, the Collateral Administrator and the Account Bank, including, without limitation, all costs and expenses incurred by the Administrative Agent, the Lender Agents and the Lenders in connection with periodic audits of the Borrower’s, the Transferor’s or the Servicer’s books and records.
(d) In addition, the Borrower shall pay (i) to the extent not included in the calculation of Yield, any and all commissions of placement agents and dealers in respect of Commercial Paper Notes issued to fund the purchase or maintenance of Advances, and (ii) any and all costs and expenses of any issuing and paying agent or other Person responsible for the administration of the Conduit Lenders’ Commercial Paper Notes program in connection with the preparation, completion, issuance, delivery or payment of Commercial Paper Notes issued to fund the purchase or maintenance of Advances.
SECTION 12.08 No Proceedings. Each of the parties hereto (by accepting the benefits of this Agreement) hereby agrees that it will not institute against, or join any other Person in instituting against, any Conduit Lender any Bankruptcy Proceeding so long as any commercial paper or other senior indebtedness issued by such Conduit Lender shall be outstanding and there shall not have elapsed one year and one day since the last day on which any such commercial paper or other senior indebtedness shall have been outstanding.
SECTION 12.09 Recourse Against Certain Parties.
(a) No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees or any other obligations) of the Administrative Agent, the Lenders, the Lender Agents or any Secured Party as contained in this Agreement or any other
 
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agreement, instrument or document entered into by the Administrative Agent, the Lenders, the Lender Agents or any Secured Party pursuant hereto or in connection herewith shall be had against any administrator of the Administrative Agent, the Lenders, the Lender Agents or any Secured Party or any incorporator, affiliate, stockholder, officer, employee or director of the Administrative Agent, the Lenders, the Lender Agents or any Secured Party or of any such administrator, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise;  it being expressly agreed and understood  that the agreements of each party hereto contained in this Agreement and all of the other agreements, instruments and documents entered into by the Administrative Agent, the Lenders, the Lender Agents or any Secured Party pursuant hereto or in connection herewith are, in each case, solely the corporate obligations of such party (and nothing in this Section 12.09  shall be construed to diminish in any way such corporate obligations of such party), and that no personal liability whatsoever shall attach to or be incurred by any administrator of the Administrative Agent, the Lenders, the Lender Agents or any Secured Party or any incorporator, stockholder, affiliate, officer, employee or director of the Lenders, the Administrative Agent or the Lender Agents or of any such administrator, as such, or any of them, under or by reason of any of the obligations, covenants or agreements of the Administrative Agent, the Lenders, the Lender Agents or any Secured Party contained in this Agreement or in any other such instruments, documents or agreements, or are implied therefrom, and that any and all personal liability of every such administrator of the Administrative Agent, the Lenders, the Lender Agents or any Secured Party and each incorporator, stockholder, affiliate, officer, employee or director of the Administrative Agent, the Lenders, the Lender Agents or any Secured Party or of any such administrator, or any of them, for breaches by the Administrative Agent, the Lenders, the Lender Agents or any Secured Party of any such obligations, covenants or agreements, which liability may arise either at common law or in equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement.
(b) Notwithstanding any contrary provision set forth herein, no claim may be made by the Borrower, the Transferor or the Servicer or any other Person against the Administrative Agent, the Lender Agents, the Lenders, or any Secured Party or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect to any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and the Borrower, the Transferor and the Servicer each hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected.
(c) No obligation or liability to any Obligor under any of the Loan Assets is intended to be assumed by the Administrative Agent, the Lenders, the Lender Agents or any Secured Party under or as a result of this Agreement and the transactions contemplated hereby.
(d) Notwithstanding anything in this Agreement to the contrary, no Conduit Lender shall have any obligation to pay any amount required to be paid by it hereunder in excess of any amount available to such Conduit Lender after paying or making provision for the payment of its Commercial Paper Notes. All payment obligations of each Conduit Lender hereunder are contingent on the availability of funds in excess of the amounts necessary to pay its Commercial Paper Notes; and each of the other parties hereto agrees that it will not have a claim under Section 101(5) of the Bankruptcy Code if and to the extent that any such payment obligation owed to it by a Conduit Lender exceeds the amount available to such Conduit Lender to pay such amount after paying or making provision for the payment of its Commercial Paper Notes.
(e) The provisions of this Section 12.09 shall survive the termination of this Agreement.
 
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SECTION 12.10 Execution in Counterparts; Severability; Integration. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by e-mail in portable document format (.pdf) or facsimile shall be effective as delivery of a manually executed counterpart of this Agreement. In the event that any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. This Agreement and any agreements or letters (including Fee Letters) executed in connection herewith contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings other than any Fee Letter delivered by the Servicer to the Administrative Agent and the Lender Agents.
SECTION 12.11 Consent to Jurisdiction; Service of Process.
(a) Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in New York City in any action or proceeding arising out of or relating to the Transaction Documents, and each party hereto hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. The parties hereto hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the Borrower and the Servicer agrees that service of process may be effected by mailing a copy thereof by registered or certified mail, postage prepaid, to the Borrower or the Servicer, as applicable, at its address specified in Section 12.02  or at such other address as the Administrative Agent shall have been notified in accordance herewith. Nothing in this  Section 12.11  shall affect the right of the Lenders, the Administrative Agent or the Lender Agents to serve legal process in any other manner permitted by law.
SECTION 12.12 Characterization of Conveyances Pursuant to the Contribution Agreement.
(a) It is the express intent of the parties hereto that the conveyance of the Eligible Loan Assets by the Transferor to the Borrower as contemplated by the Contribution Agreement be, and be treated for all purposes (other than accounting purposes and subject to the tax characterization of the Borrower and the Advances described in  Section 5.01(bb)  and  Section 5.02(j)  hereof) as a contribution by the Transferor of such Eligible Loan Assets. It is, further, not the intention of the parties that such contribution be deemed a pledge of the Eligible Loan Assets by the Transferor to the Borrower to secure a debt or other obligation of the Transferor. However, in the event that, notwithstanding the intent of the parties, the Eligible Loan Assets are held to continue to be property of the Transferor, then the
 
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parties hereto agree that: (i) the Contribution Agreement shall also be deemed to be a security agreement under Applicable Law; (ii) as set forth in the Contribution Agreement, the transfer of the Eligible Loan Assets provided for in the Contribution Agreement shall be deemed to be a grant by the Transferor to the Borrower of a first priority security interest (subject only to Permitted Liens) in all of the Transferor’s right, title and interest in and to the Eligible Loan Assets and all amounts payable to the holders of the Eligible Loan Assets in accordance with the terms thereof and all proceeds of the conversion, voluntary or involuntary, of the foregoing into cash, instruments, securities or other property, including, without limitation, all amounts from time to time held or invested in the Collection Account, whether in the form of cash, instruments, securities or other property; (iii) the possession by the Borrower (or the Collateral Custodian on its behalf) of Loan Assets and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be, subject to  clause (iv) , for purposes of perfecting the security interest pursuant to the UCC; and (iv) acknowledgements from Persons holding such property shall be deemed acknowledgements from custodians, bailees or agents (as applicable) of the Borrower for the purpose of perfecting such security interest under Applicable Law. The parties further agree that any assignment of the interest of the Borrower pursuant to any provision hereof shall also be deemed to be an assignment of any security interest created pursuant to the terms of the Contribution Agreement. The Borrower shall, to the extent consistent with this Agreement and the other Transaction Documents, take such actions as may be necessary to ensure that, if the Contribution Agreement was deemed to create a security interest in the Eligible Loan Assets, such security interest would be deemed to be a perfected security interest of first priority (subject only to Permitted Liens) under Applicable Law and will be maintained as such throughout the term of this Agreement.
(b) It is the intention of each of the parties hereto that the Eligible Loan Assets conveyed by the Transferor to the Borrower pursuant to the Contribution Agreement shall constitute assets owned by the Borrower and shall not be part of the Transferor’s estate in the event of the filing of a bankruptcy petition by or against the Transferor under any bankruptcy or similar law.
(c) The Borrower agrees to treat, and the Borrower shall cause the Transferor to treat, for all purposes (other than accounting purposes and subject to the tax characterization of the Borrower and the Advances described in  Section 5.01(bb)  and Section 5.02(j)  hereof), the transactions effected by the Contribution Agreement as contribution of assets to the Borrower. The Borrower and the Servicer each hereby agrees to cause the Transferor to reflect in the Transferor’s financial records and to include a note in the publicly filed annual and quarterly financial statements of CGMS indicating that: (i) assets related to transactions (including transactions pursuant to the Transaction Documents) that do not meet SFAS 140 requirements for accounting sale treatment are reflected in the consolidated balance sheet of CGMS within the “investments” line and are disclosed in CGMS’ schedule of investments, and (ii) those assets are owned by a special purpose entity that is consolidated in the financial statements of CGMS, and the creditors of that special purpose entity have received ownership or security interests in such assets and such assets are not intended to be available to the creditors of sellers (or any affiliate of the sellers) of such assets to that special purpose entity.
SECTION 12.13 Confidentiality.
(a) Each of the Administrative Agent, the Lenders, the Lender Agents, the Servicer, the Collateral Agent, the Borrower, the Account Bank, the Transferor, the Backup Servicer and the Collateral Custodian shall maintain and shall cause each of its employees and officers to maintain the confidentiality of the Agreement and all information with respect to the other parties, including all
 
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information regarding the business of the Borrower and the Servicer hereto and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein (including written non-public information relating to an Obligor that is required under the terms of the related Loan Agreement to be maintained as confidential), except that each such party and its officers and employees may (i) disclose such information to its respective Affiliates and to such party’s and its respective Affiliates’ officers, directors, managers, administrators, trustees, employees, agents, external accountants, investigators, auditors, attorneys or other representatives, in each case, having a need to know the same (including in connection with any potential assignment, sale of a participation interest or other transfer of an interest), and to any Rating Agency or valuation firm engaged by such party in connection with any due diligence or comparable activities with respect to the transactions and Loan Assets contemplated herein and the agents of such Persons (“ Excepted Persons ”);  provided  that each Excepted Person shall, as a condition to any such disclosure, agree for the benefit of the Administrative Agent, the Lenders, the Lender Agents, the Servicer, the Collateral Agent, the Borrower, the Account Bank, the Backup Servicer, the Transferor and the Collateral Custodian that such information shall be used solely in connection with such Excepted Person’s evaluation of, or relationship with, the Borrower and its affiliates, (ii) disclose the existence of the Agreement, but not the financial terms thereof, (iii) disclose such information as is required by Applicable Law and (iv) disclose the Agreement and such information in any suit, action, proceeding or investigation (whether in law or in equity or pursuant to arbitration) involving any of the Transaction Documents for the purpose of defending itself, reducing its liability, or protecting or exercising any of its claims, rights, remedies, or interests under or in connection with any of the Transaction Documents. Notwithstanding the foregoing provisions of this  Section 12.13(a) , the Servicer may, subject to Applicable Law and the terms of any Loan Agreements, make available copies of the documents in the Servicing Files and such other documents it holds in its capacity as Servicer pursuant to the terms of this Agreement, to any of its creditors. It is understood that the financial terms that may not be disclosed except in compliance with this  Section 12.13(a)  include, without limitation, all fees and other pricing terms, and all Events of Default, Servicer Termination Events, and priority of payment provisions.
(b) Anything herein to the contrary notwithstanding, the Borrower and the Servicer each hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Administrative Agent, the Lenders, the Lender Agent, the Account Bank, the Backup Servicer, the Collateral Agent or the Collateral Custodian by each other, (ii) by the Administrative Agent, the Lenders, the Lender Agent, the Account Bank, the Collateral Agent, the Backup Servicer and the Collateral Custodian to any prospective or actual assignee or participant of any of them provided such Person would qualify as an assignee or participant under the terms of  Section 12.04  and such Person agrees to hold such information confidential in accordance with the terms hereof, or (iii) by the Administrative Agent, the Lenders, the Lender Agent, the Account Bank, the Collateral Agent, the Backup Servicer and the Collateral Custodian to any commercial paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to any Lender or Conduit Trustee or any Person providing financing to, or holding equity interests in, any Conduit Lender, as applicable, and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of the confidential nature of such information. In addition, the Lenders, the Administrative Agent, the Lender Agent, the Collateral Agent, the Account Bank, the Backup Servicer and the Collateral Custodian may disclose any such nonpublic information as required pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).
 
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(c) Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known; (ii) disclosure of any and all information (a) if required to do so by any applicable statute, law, rule or regulation (including, without limitation Rule 17g-5), (b) to any government agency or regulatory body having or claiming authority to regulate or oversee any aspects of the Lenders’, the Administrative Agent’, the Lender Agents’, the Collateral Agent’s, the Account Bank’s, the Backup Servicer’s or the Collateral Custodian’s business or that of their affiliates, (c) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Administrative Agent, any Lender, any Lender Agent, the Collateral Agent, the Collateral Custodian, the Backup Servicer or the Account Bank or an officer, director, employer, shareholder or affiliate of any of the foregoing is a party, (d) in any preliminary or final offering circular, registration statement or contract or other document approved in advance by the Borrower, the Servicer or the Transferor, or (e) to any affiliate, independent or internal auditor, agent, employee or attorney of the Collateral Agent, the Backup Servicer or the Collateral Custodian having a need to know the same,  provided  that the disclosing party advises such recipient of the confidential nature of the information being disclosed; or (iii) any other disclosure authorized by the Borrower, Servicer or the Transferor.
SECTION 12.14 Non-Confidentiality of Tax Treatment.
All parties hereto agree that each of them and each of their employees, representatives, and other agents may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including, without limitation, opinions or other tax analyses) that are provided to any of them relating to such tax treatment and tax structure. “Tax treatment” and “tax structure” shall have the same meaning as such terms have for purposes of Treasury Regulation Section 1.6011-4;  provided  that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, the provisions of this  Section 12.14  shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the transactions contemplated hereby.
SECTION 12.15 Waiver of Set Off.
Each of the parties hereto hereby waives any right of setoff it may have or to which it may be entitled under this Agreement from time to time against the Administrative Agent, the Lenders, the Lender Agents or their respective assets.
SECTION 12.16 Headings and Exhibits.
The headings herein are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof. The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.
SECTION 12.17 Ratable Payments.
If any Lender, whether by setoff or otherwise, shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of Advances owing to it (other than pursuant to Breakage Fees, Section 2.10  or  Section 2.11 ) in excess of its ratable share of payments on account of the Advances obtained by all the Lenders, such Lender shall forthwith purchase
 
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from the other Lenders such participations in the Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them;  provided  that, if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.
SECTION 12.18 Failure of Borrower or Servicer to Perform Certain Obligations.
If the Borrower or the Servicer, as applicable, fails to perform any of its agreements or obligations under Section 5.01(u), Section 5.02(p)  or  Section 5.04(e) , the Administrative Agent may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Administrative Agent incurred in connection therewith shall be payable by the Borrower or the Servicer (on behalf of the Borrower), as applicable, upon the Administrative Agent’s demand therefor.
SECTION 12.19 Power of Attorney.
The Borrower irrevocably authorizes the Administrative Agent and appoints the Administrative Agent as its attorney-in-fact to act on behalf of the Borrower (i) to file financing statements necessary or desirable in the Administrative Agent’s sole discretion to perfect and to maintain the perfection and priority of the interest of the Secured Parties in the Collateral Portfolio and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral Portfolio as a financing statement in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Secured Parties in the Collateral Portfolio. This appointment is coupled with an interest and is irrevocable.
SECTION 12.20 Delivery of Termination Statements, Releases, etc.
Upon payment in full of all of the Obligations (other than unmatured contingent indemnification obligations) and the termination of this Agreement, the Administrative Agent and the Collateral Agent shall deliver to the Borrower termination statements, reconveyances, releases and other documents necessary or appropriate to evidence the termination of the Pledge and other Liens securing the Obligations, all at the expense of the Borrower.
SECTION 12.21 USA PATRIOT Act.
Each of the Lender, the Lead Arranger, the Collateral Agent and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower, the Servicer and the Transferor that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify, and record information that identifies each of the Borrower, the Servicer and the Transferor, which information includes the name of each of the Borrower, the Servicer and the Transferor and other information that will allow each Lender, the Lead Arranger, Collateral Agent or the Administrative Agent, as applicable, to identify the Borrower, the Servicer and the Transferor in accordance with the USA PATRIOT Act, and each of the Borrower, the Servicer and the Transferor agree to provide such information from time to time to each Lender, the Lead Arranger, Collateral Agent and the Administrative Agent, as applicable.
 
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SECTION 12.22Permitted Mergers.
Each party hereto hereby acknowledges that (i) TCG BDC, Inc. (f/k/a Carlyle GMS Finance, Inc.), in each of its capacities under the Transaction Documents, intends to acquire or merge with NF Investment Corp. (the “Permitted BDC Merger”), and (ii) the Borrower may acquire or merge with NFIC SPV LLC (the “Permitted BDC Merger”; collectively, the (“Permitted Mergers”). Provided that such acquisition or merger is entered into pursuant to documentation substantially identical to the documentation previously provided to and approved by the Administrative Agent in its reasonable discretion and consistent with the representations and warranties set forth herein effecting each such Permitted Merger, each party hereto hereby agrees and consents to such Permitted Mergers. In connection with the Permitted Mergers, the Servicer and the Borrower hereby agree to utilize all efforts to elevate any participations entered into in connection with the Permitted Mergers to full assignment as promptly as practicable.
ARTICLE XIII.
COLLATERAL CUSTODIAN
SECTION 13.01 Designation of Collateral Custodian.
(a) Initial Collateral Custodian. The role of Collateral Custodian with respect to the Required Loan Documents shall be conducted by the Person designated as Collateral Custodian hereunder from time to time in accordance with this  Section 13.01 . Each of the Borrower, the Administrative Agent and the Lender Agent hereby designate and appoint the Collateral Custodian to act as its agent and hereby authorizes the Collateral Custodian to take such actions on its behalf and to exercise such powers and perform such duties as are expressly granted to the Collateral Custodian by this Agreement. The Collateral Custodian hereby accepts such agency appointment to act as Collateral Custodian pursuant to the terms of this Agreement, until its resignation or removal as Collateral Custodian pursuant to the terms hereof.
(b) Successor Collateral Custodian. Upon the Collateral Custodian’s receipt of a Collateral Custodian Termination Notice from the Administrative Agent of the designation of a successor Collateral Custodian pursuant to the provisions of Section 13.05 , the Collateral Custodian agrees that it will terminate its activities as Collateral Custodian hereunder.
SECTION 13.02 Duties of Collateral Custodian.
(a) Appointment. The Borrower, the Administrative Agent and the Lender Agent each hereby appoints Wells Fargo Bank, National Association to act as Collateral Custodian, for the benefit of the Secured Parties. The Collateral Custodian hereby accepts such appointment and agrees to perform the duties and obligations with respect thereto set forth herein.
(b) Duties. From the Closing Date until its removal pursuant to Section 13.05 or its resignation pursuant to Section 13.07, the Collateral Custodian shall perform, on behalf of the Secured Parties, the following duties and obligations:
(i) The Collateral Custodian shall take and retain custody of the Required Loan Documents delivered by the Borrower pursuant to  Section 3.02(a)  and  Section 3.04(b)  hereof in accordance with the terms and conditions of this Agreement, all for the benefit of the Secured
 
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Parties. Within five Business Days of its receipt of any Required Loan Documents, the related Loan Asset Schedule and a hard copy of the Loan Asset Checklist, the Collateral Custodian shall review the Required Loan Documents to confirm that (A) such Required Loan Documents have been executed (either an original or a copy, as indicated on the Loan Asset Checklist) and have no mutilated pages, (B) filed stamped copies of the UCC and other filings (identified on the Loan Asset Checklist) are included, (C) if listed on the Loan Asset Checklist, a copy of an Insurance Policy with respect to any real or personal property constituting the Underlying Collateral is included, and (D) the related original balance (based on a comparison to the note or assignment agreement, as applicable), Loan Asset number and Obligor name, as applicable, with respect to such Loan Asset is referenced on the related Loan Asset Schedule (such items (A) through (D) collectively, the “ Review Criteria ”). In order to facilitate the foregoing review by the Collateral Custodian, in connection with each delivery of Required Loan Documents hereunder to the Collateral Custodian, the Servicer shall provide to the Collateral Custodian a hard copy of the related Loan Asset Checklist which contains the Loan Asset information with respect to the Required Loan Documents being delivered, identification number and the name of the Obligor with respect to such Loan Asset. Notwithstanding anything herein to the contrary, the Collateral Custodian’s obligation to review the Required Loan Documents shall be limited to reviewing such Required Loan Documents based on the information provided on the Loan Asset Checklist. If, at the conclusion of such review, the Collateral Custodian shall determine that (i) the original balance of the Loan Asset with respect to which it has received Required Loan Documents is less than as set forth on the Loan Asset Schedule, the Collateral Custodian shall notify the Administrative Agent and the Servicer of such discrepancy within one Business Day, or (ii) any Review Criteria is not satisfied, the Collateral Custodian shall within one Business Day notify the Servicer of such determination and provide the Servicer with a list of the non-complying Loan Assets and the applicable Review Criteria that they fail to satisfy. The Servicer shall have five Business Days after notice or knowledge thereof to correct any non-compliance with any Review Criteria. In addition, if requested in writing (in the form of  Exhibit M ) by the Servicer and approved by the Administrative Agent within 10 Business Days of the Collateral Custodian’s delivery of such report, the Collateral Custodian shall return any Loan Asset which fails to satisfy a Review Criteria to the Borrower. Other than the foregoing, the Collateral Custodian shall not have any responsibility for reviewing any Required Loan Documents.
(ii) In taking and retaining custody of the Required Loan Documents, the Collateral Custodian shall be deemed to be acting as the agent of the Secured Parties;  provided  that the Collateral Custodian makes no representations as to the existence, perfection or priority of any Lien on the Required Loan Documents or the instruments therein; and  provided , further , that, the Collateral Custodian’s duties shall be limited to those expressly contemplated herein.
(iii) All Required Loan Documents shall be kept in fire resistant vaults, rooms or cabinets at the locations specified on the address of the Collateral Custodian in  Section 12.02 , or at such other office as shall be specified to the Administrative Agent and the Servicer by the Collateral Custodian in a written notice delivered at least 30 days prior to such change. All Required Loan Documents shall be placed together with an appropriate identifying label and maintained in such a manner so as to permit retrieval and access. The Collateral Custodian shall segregate the Required Loan Documents on its inventory system and will not commingle the physical Required Loan Documents with any other files of the Collateral Custodian other than those, if any, relating to CGMS and its Affiliates and subsidiaries;  provided ,  however , the Collateral Custodian shall segregate any commingled files upon written request of the Administrative Agent and the Borrower.
 
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(iv) On the 12th calendar day of every Month (or if such day is not a Business Day, the next succeeding Business Day), the Collateral Custodian shall provide a written report to the Administrative Agent and the Servicer (in a form mutually agreeable to the Administrative Agent and the Collateral Custodian) identifying each Loan Asset for which it holds Required Loan Documents and the applicable Review Criteria that any Loan Asset fails to satisfy.
(v) Notwithstanding any provision to the contrary elsewhere in the Transaction Documents, the Collateral Custodian shall not have any fiduciary relationship with any party hereto or any Secured Party in its capacity as such, and no implied covenants, functions, obligations or responsibilities shall be read into this Agreement, the other Transaction Documents or otherwise exist against the Collateral Custodian. Without limiting the generality of the foregoing, it is hereby expressly agreed and stipulated by the other parties hereto that the Collateral Custodian shall not be required to exercise any discretion hereunder and shall have no investment or management responsibility.
(c) (i) The Collateral Custodian agrees to cooperate with the Administrative Agent and the Collateral Agent and deliver any Required Loan Documents to the Collateral Agent or Administrative Agent (pursuant to a written request in the form of Exhibit M ), as applicable, as requested in order to take any action that the Administrative Agent deems necessary or desirable in order to perfect, protect or more fully evidence the security interests granted by the Borrower hereunder, or to enable any of them to exercise or enforce any of their respective rights hereunder, including any rights arising with respect to  Article VIII . In the event the Collateral Custodian receives instructions from the Collateral Agent, the Servicer or the Borrower which conflict with any instructions received by the Administrative Agent, the Collateral Custodian shall rely on and follow the instructions given by the Administrative Agent.
(ii) The Administrative Agent may direct the Collateral Custodian to take any such incidental action hereunder. With respect to other actions which are incidental to the actions specifically delegated to the Collateral Custodian hereunder, the Collateral Custodian shall not be required to take any such incidental action hereunder, but shall be required to act or to refrain from acting (and shall be fully protected in acting or refraining from acting) upon the direction of the Administrative Agent;  provided  that the Collateral Custodian shall not be required to take any action hereunder at the request of the Administrative Agent, any Secured Party or otherwise if the taking of such action, in the reasonable determination of the Collateral Custodian, (x) shall be in violation of any Applicable Law or contrary to any provisions of this Agreement or (y) shall expose the Collateral Custodian to liability hereunder or otherwise (unless it has received indemnity which it reasonably deems to be satisfactory with respect thereto). In the event the Collateral Custodian requests the consent of the Administrative Agent and the Collateral Custodian does not receive a consent (either positive or negative) from the Administrative Agent within 10 Business Days of its receipt of such request, then the Administrative Agent shall be deemed to have declined to consent to the relevant action.
(iii) The Collateral Custodian shall not be liable for any action taken, suffered or omitted by it in accordance with the request or direction of any Secured Party, to the extent that this Agreement provides such Secured Party the right to so direct the Collateral Custodian, or
 
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the Administrative Agent. The Collateral Custodian shall not be deemed to have notice or knowledge of any matter hereunder, including an Event of Default, unless a Responsible Officer of the Collateral Custodian has knowledge of such matter or written notice thereof is received by the Collateral Custodian.
SECTION 13.03 Merger or Consolidation.
Any Person (i) into which the Collateral Custodian may be merged or consolidated, (ii) that may result from any merger or consolidation to which the Collateral Custodian shall be a party, or (iii) that may succeed to the properties and assets of the Collateral Custodian substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Collateral Custodian hereunder, shall be the successor to the Collateral Custodian under this Agreement without further act of any of the parties to this Agreement.
SECTION 13.04 Collateral Custodian Compensation.
(a) Compensation. As compensation for its Collateral Custodian activities hereunder, the Collateral Custodian shall be entitled to the Collateral Custodian Fees from the Borrower as set forth in the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter, payable pursuant to the extent of funds available therefor pursuant to the provisions of  Section 2.04 . The Collateral Custodian’s entitlement to receive the Collateral Custodian Fees shall cease on the earlier to occur of: (i) its removal as Collateral Custodian pursuant to  Section 13.05 , (ii) its resignation as Collateral Custodian pursuant to  Section 13.07  of this Agreement or (iii) the termination of this Agreement.
(b) Negative Covenant Regarding Compensation. The Collateral Custodian will not make any changes to the Collateral Custodian Fees without the prior written approval of the Administrative Agent and the Borrower.
SECTION 13.05 Collateral Custodian Removal.
The Collateral Custodian may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Collateral Custodian (the “ Collateral Custodian Termination Notice ”);  provided  that, notwithstanding its receipt of a Collateral Custodian Termination Notice, the Collateral Custodian shall continue to act in such capacity until a successor Collateral Custodian has been appointed and has agreed to act as Collateral Custodian hereunder.
SECTION 13.06 Limitation on Liability.
(a) The Collateral Custodian may conclusively rely on and shall be fully protected in acting upon any certificate, instrument, opinion, notice, letter, telegram or other document delivered to it and that in good faith it reasonably believes to be genuine and that has been signed by the proper party or parties. The Collateral Custodian may rely conclusively on and shall be fully protected in acting upon (a) the written instructions of any designated officer of the Administrative Agent or (b) the verbal instructions of the Administrative Agent.
(b) The Collateral Custodian may consult counsel satisfactory to it and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
 
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(c) The Collateral Custodian shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any mistakes of fact or law, or for anything that it may do or refrain from doing in connection herewith except in the case of its willful misconduct or grossly negligent performance or omission of its duties.
(d) The Collateral Custodian makes no warranty or representation and shall have no responsibility (except as expressly set forth in this Agreement) as to the content, enforceability, completeness, validity, sufficiency, value, genuineness, ownership or transferability of the Collateral Portfolio, and will not be required to and will not make any representations as to the validity or value (except as expressly set forth in this Agreement) of any of the Collateral Portfolio. The Collateral Custodian shall not be obligated to take any legal action hereunder that might in its judgment involve any expense or liability unless it has been furnished with an indemnity reasonably satisfactory to it.
(e) The Collateral Custodian shall have no duties or responsibilities except such duties and responsibilities as are specifically set forth in this Agreement and no covenants or obligations shall be implied in this Agreement against the Collateral Custodian.
(f) The Collateral Custodian shall not be required to expend or risk its own funds in the performance of its duties hereunder.
(g) It is expressly agreed and acknowledged that the Collateral Custodian is not guaranteeing performance of or assuming any liability for the obligations of the other parties hereto or any parties to the Collateral Portfolio.
(h) Subject in all cases to the last sentence of Section 13.02(c)(i), in case any reasonable question arises as to its duties hereunder, the Collateral Custodian may, prior to the occurrence of an Event of Default or the Final Maturity Date, request instructions from the Servicer and may, after the occurrence of an Event of Default or the Final Maturity Date, request instructions from the Administrative Agent, and shall be entitled at all times to refrain from taking any action unless it has received instructions from the Servicer or the Administrative Agent, as applicable. The Collateral Custodian shall in all events have no liability, risk or cost for any action taken pursuant to and in compliance with the instruction of the Administrative Agent. In no event shall the Collateral Custodian be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Custodian has been advised of the likelihood of such loss or damage and regardless of the form of action.
SECTION 13.07 Collateral Custodian Resignation.
Collateral Custodian may resign and be discharged from its duties or obligations hereunder, not earlier than 90 days after delivery to the Administrative Agent of written notice of such resignation specifying a date when such resignation shall take effect. Upon the effective date of such resignation, or if the Administrative Agent gives Collateral Custodian written notice of an earlier termination hereof, Collateral Custodian shall (i) be reimbursed for any costs and expenses Collateral Custodian shall incur in connection with the termination of its duties under this Agreement and (ii) deliver all of the Required Loan Documents in the possession of Collateral Custodian to the Administrative Agent or to such Person as the Administrative Agent may designate to Collateral Custodian in writing upon the receipt of a request in the form of  Exhibit M ;  provided  that the Borrower shall have consented to any successor Collateral Custodian appointed by the Administrative Agent at the direction of the Majority Lenders (such consent not to be unreasonably withheld). Notwithstanding anything herein to the contrary, the Collateral Custodian may not resign prior to a successor Collateral Custodian being appointed.
 
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SECTION 13.08 Release of Documents.
(a) Release for Servicing. From time to time and as appropriate for the enforcement or servicing of any of the Collateral Portfolio, the Collateral Custodian is hereby authorized (unless and until such authorization is revoked by the Administrative Agent), upon written receipt from the Servicer of a request for release of documents and receipt in the form annexed hereto as Exhibit M , to release to the Servicer within two Business Days of receipt of such request, the related Required Loan Documents or the documents set forth in such request and receipt to the Servicer. All documents so released to the Servicer shall be held by the Servicer in trust for the benefit of the Collateral Agent, on behalf of the Secured Parties in accordance with the terms of this Agreement. The Servicer shall return to the Collateral Custodian the Required Loan Documents or other such documents (i) promptly upon the request of the Administrative Agent, or (ii) when the Servicer’s need therefor in connection with such foreclosure or servicing no longer exists, unless the Loan Asset shall be liquidated, in which case, the Servicer shall deliver an additional request for release of documents to the Collateral Custodian and receipt certifying such liquidation from the Servicer to the Collateral Agent, all in the form annexed hereto as  Exhibit M .
(b) Limitation on Release. The foregoing provision with respect to the release to the Servicer of the Required Loan Documents and documents by the Collateral Custodian upon request by the Servicer shall be operative only to the extent that the Administrative Agent has consented to such release. Promptly after delivery to the Collateral Custodian of any request for release of documents, the Servicer shall provide notice of the same to the Administrative Agent. Any additional Required Loan Documents or documents requested to be released by the Servicer may be released only upon written authorization of the Administrative Agent. The limitations of this paragraph shall not apply to the release of Required Loan Documents to the Servicer pursuant to the immediately succeeding subsection.
(c) Release for Payment. Upon receipt by the Collateral Custodian of the Servicer’s request for release of documents and receipt in the form annexed hereto as  Exhibit M  (which certification shall include a statement to the effect that all amounts received in connection with such payment or repurchase have been credited to the Collection Account as provided in this Agreement), the Collateral Custodian shall promptly release the related Required Loan Documents to the Servicer.
SECTION 13.09 Return of Required Loan Documents.
The Borrower may, with the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), require that the Collateral Custodian return each Required Loan Document (a) delivered to the Collateral Custodian in error or (b) released from the Lien of the Collateral Agent hereunder pursuant to  Section 2.16 , in each case by submitting to the Collateral Custodian and the Administrative Agent a written request in the form of  Exhibit M  hereto (signed by both the Borrower and the Administrative Agent) specifying the Collateral Portfolio to be so returned and reciting that the conditions to such release have been met (and specifying the Section or Sections of this Agreement being relied upon for such release). The Collateral Custodian shall upon its receipt of each such request for return executed by the Borrower and the Administrative Agent promptly, but in any event within five Business Days, return the Required Loan Documents so requested to the Borrower.
 
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SECTION 13.10 Access to Certain Documentation and Information Regarding the Collateral Portfolio; Audits of Servicer.
The Collateral Custodian shall provide to the Administrative Agent and each Lender Agent access to the Required Loan Documents and all other documentation regarding the Collateral Portfolio including in such cases where the Administrative Agent and each Lender Agent is required in connection with the enforcement of the rights or interests of the Secured Parties, or by applicable statutes or regulations, to review such documentation, such access being afforded without charge but only (i) upon two Business Days prior written request, (ii) during normal business hours and (iii) subject to the Servicer’s and the Collateral Custodian’s normal security and confidentiality procedures. Prior to the Closing Date and periodically thereafter at the discretion of the Administrative Agent and each Lender Agent, the Administrative Agent and each Lender Agent may review the Servicer’s collection and administration of the Collateral Portfolio in order to assess compliance by the Servicer with the Servicing Standard, as well as with this Agreement and may conduct an audit of the Collateral Portfolio, and Required Loan Documents in conjunction with such a review. Such review shall be (subject to  Section 5.04(d)(ii) ) reasonable in scope and shall be completed in a reasonable period of time. Without limiting the foregoing provisions of this  Section 13.10 , from time to time (and, in any case, a minimum of three times during each fiscal year of the Servicer) upon reasonable notice to the Administrative Agent, the Collateral Custodian shall permit independent public accountants or other auditors appointed by the Servicer to conduct, at the expense of the Servicer (on behalf of the Borrower), a review of the Required Loan Documents and all other documentation regarding the Collateral Portfolio.
SECTION 13.11 Bailment.
The Collateral Custodian agrees that, with respect to any Required Loan Documents at any time or times in its possession or held in its name, the Collateral Custodian shall be the agent and bailee of the Collateral Agent, for the benefit of the Secured Parties, for purposes of perfecting (to the extent not otherwise perfected) the Collateral Agent’s security interest in the Collateral Portfolio and for the purpose of ensuring that such security interest is entitled to first priority status under the UCC.
ARTICLE XIV.
ACCOUNT BANK
SECTION 14.01 Designation of Account Bank.
(a) Initial Account Bank. The role of Account Bank shall be conducted by the Person designated as Account Bank hereunder and under the Collection Account Agreement from time to time in accordance with this  Section 14.01  and the Collection Account Agreement. Each of the Borrower, the Administrative Agent and the Lender Agent hereby designate and appoint the Account Bank and hereby authorizes the Account Bank to take such actions and to perform such duties as are expressly set forth in this Agreement and the Collection Account Agreement. The Account Bank hereby accepts such appointment to act as Account Bank pursuant to the terms of this Agreement and the Collection Account Agreement, until its resignation or removal as Account Bank pursuant to the terms hereof.
(b) Successor Account Bank. Upon the Account Bank’s receipt of an Account Bank Termination Notice from the Administrative Agent and the designation of a successor Account Bank pursuant to the provisions of  Section 14.05 , the Account Bank agrees that it will terminate its activities as Account Bank hereunder.
 
172

SECTION 14.02 Duties of Account Bank.
From the Closing Date until its removal pursuant to Section 14.05 or its resignation pursuant to Section 14.07, the Account Bank shall perform such duties and obligations as expressly set forth in this Agreement and the Collection Account Agreement.
SECTION 14.03 Merger or Consolidation.
Any Person (i) into which the Account Bank may be merged or consolidated, (ii) that may result from any merger or consolidation to which the Account Bank shall be a party, or (iii) that may succeed to the properties and assets of the Account Bank substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Account Bank hereunder, shall be the successor to the Account Bank under this Agreement without further act of any of the parties to this Agreement.
SECTION 14.04 Account Bank Compensation.
(a) Compensation. As compensation for its Account Bank activities hereunder and the Collection Account Agreement, the Account Bank shall be entitled to the Account Bank Fees from the Borrower as set forth in the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter, payable pursuant to the extent of funds available therefor pursuant to the provisions of  Section 2.04 . The Account Bank’s entitlement to receive the Account Bank Fees, shall cease on the earlier to occur of (i) its removal as Account Bank pursuant to  Section 14.05 , (ii) its resignation as Account Bank pursuant to Section 14.07  or (iii) the termination of this Agreement.
(b) Negative Covenant Regarding Compensation. The Account Bank will not make any changes to the Account Bank Fees without the prior written approval of the Administrative Agent and the Borrower.
SECTION 14.05 Account Bank Removal.
The Account Bank may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Account Bank (the “ Account Bank Termination Notice ”);  provided  that, notwithstanding its receipt of an Account Bank Termination Notice, the Account Bank shall continue to act in such capacity until a successor Account Bank has been appointed and has agreed to act as Account Bank hereunder and under the Collection Account Agreement.
SECTION 14.06 Limitation on Liability.
Each of the rights, protections, benefits, immunities and indemnities afforded to the Collateral Custodian pursuant to Section 13.06  hereof shall also be afforded to the Account Bank acting in such capacity;  provided  that such rights, protections, benefits, immunities and indemnities shall be in addition to, and not in limitation of, any rights, protections, benefits, immunities and indemnities provided in the Collection Account Agreement or any other documents to which the Account Bank in such capacity is a party.
 
173

SECTION 14.07 Account Bank Resignation.
The Account Bank may resign and be discharged from its duties or obligations hereunder, not earlier than 90 days after delivery to the Administrative Agent of written notice of such resignation specifying a date when such resignation shall take effect. Upon the effective date of such resignation, or if the Administrative Agent gives the Account Bank written notice of an earlier termination hereof, the Account Bank shall (i) be reimbursed for any reasonable documented out-of-pocket costs and expenses the Account Bank shall incur in connection with the termination of its duties under this Agreement and (ii) transfer all amounts in the Collection Account pursuant to the instructions of the Administrative Agent;  provided  that the Borrower shall have consented to any successor Account Bank appointed by the Administrative Agent at the direction of the Majority Lenders (such consent not to be unreasonably withheld). Notwithstanding anything herein to the contrary, the Account Bank may not resign prior to a successor Account Bank being appointed.
ARTICLE XV.
COLLATERAL ADMINISTRATOR
SECTION 15.01 Designation of Collateral Administrator.
(a) Initial Collateral Administrator. The role of Collateral Administrator shall be conducted by the Person designated as Collateral Administrator hereunder and under the Collection Account Agreement from time to time in accordance with this Section 15.01 . Each of the Borrower, the Administrative Agent and the Lender Agent hereby designate and appoint the Collateral Administrator to act as its agent and hereby authorizes the Collateral Administrator to take such actions and to perform such duties as are expressly set forth in this Agreement. The Collateral Administrator hereby accepts such agency appointment to act as Collateral Administrator pursuant to the terms of this Agreement, until its resignation or removal as Collateral Administrator pursuant to the terms hereof.
(b) Successor Collateral Administrator. Upon the Collateral Administrator’s receipt of a Collateral Administrator Termination Notice from the Administrative Agent and the designation of a successor Collateral Administrator pursuant to the provisions of  Section 15.05 , the Collateral Administrator agrees that it will terminate its activities as Collateral Administrator hereunder.
SECTION 15.02 Duties of Collateral Administrator.
(a) Duties. From the Closing Date until its removal pursuant to Section 15.05 or its resignation pursuant to Section 15.07, the Collateral Administrator shall perform, on behalf of the Secured Parties, the following duties and obligations:
(i) On or before the Closing Date, the Collateral Administrator shall accept from the Servicer delivery of the information required to be set forth in the Servicing Report referred to in Section 6.08(b)(i) of this Agreement (if any) on an excel spreadsheet or other format to be agreed upon by the Collateral Administrator and the Servicer on or prior to closing.
(ii) Not later than 12:00 noon (New York City, New York time) on each Reporting Date, the Servicer shall deliver to the Collateral Administrator the loan asset spreadsheet, which shall include but not be limited to the following information: (x) for each Loan Asset, the name of the related Obligor, the collection status, the loan status, the date of each Scheduled Payment, the Outstanding Principal Balance, the initial Assigned Value, and the Outstanding Loan Balance, (y) the Borrowing Base and (z) the Aggregate Outstanding Loan Balance (the “Spreadsheet”). The Collateral Administrator shall accept delivery of the Spreadsheet.
 
174

(iii) Provided that it receives the Servicing Report and the loan data pursuant to Section 6.08(b), prior to the related Payment Date, the Collateral Administrator shall review the Servicing Report to ensure that it is complete on its face and that the following items in such Servicing Report have been accurately calculated, if applicable, and reported: (A) the Borrowing Base, (B) the Backup Servicing Fee, (C) the Aggregate Outstanding Loan Balance of the Loan Assets that are current and not past due, (D) the Charged-Off Ratio, (E) the Delinquency Ratio, (F) the Interest Coverage Ratio and (G) the Aggregate Outstanding Loan Balance. The Collateral Administrator by a separate written report shall notify the Administrative Agent, the Servicer and the Backup Servicer of any discrepancies in the Servicing Report based on such review not later than the Business Day preceding such Payment Date to such Persons.
(iv) If the Servicer disagrees with the report provided under paragraph (iii) above by the Collateral Administrator or if the Servicer or any subservicer has not reconciled such discrepancy, the Collateral Administrator agrees to confer with the Servicer to resolve such discrepancies on or prior to the next succeeding Determination Date and shall settle such discrepancy with the Servicer if possible, and notify the Administrative Agent of the resolution thereof. The Servicer hereby agrees to cooperate at its own expense with the Collateral Administrator in reconciling any discrepancies in any Servicing Report. If within 20 days after the delivery of the report provided under paragraph (iii) above by the Collateral Administrator, such discrepancy is not resolved, the Collateral Administrator shall promptly notify the Administrative Agent of the continued existence of such discrepancy. Following receipt of such notice by the Administrative Agent, the Servicer shall deliver to the Administrative Agent, the Secured Parties and the Collateral Administrator no later than the related Payment Date a certificate describing the nature and amount of such discrepancies and the actions the Servicer proposes to take with respect thereto.
(b) Reliance on Spreadsheet. With respect to the duties described in Section 15.02(a), the Collateral Administrator is entitled to rely conclusively, and shall be fully protected in so relying, on the contents of each Spreadsheet, including, but not limited to, the completeness and accuracy thereof, provided by the Servicer.
(c) Collateral Administrator May Request Direction. If, in performing its duties under this Agreement, the Collateral Administrator is required to decide between alternative courses of action, the Collateral Administrator may request written instructions from the Administrative Agent as to the course of action desired by it. If the Collateral Administrator does not receive such instructions within two Business Days after it has requested them, the Collateral Administrator may, but shall be under no duty to, take or refrain from taking any such courses of action. The Collateral Administrator shall act in accordance with instructions received after such two-Business Day period except to the extent it has already taken, or committed itself to take, action inconsistent with such instructions.
SECTION 15.03 Merger or Consolidation.
Any Person (i) into which the Collateral Administrator may be merged or consolidated, (ii) that may result from any merger or consolidation to which the Collateral Administrator shall be a party, or (iii) that may succeed to the properties and assets of the Collateral Administrator substantially as a whole, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Collateral Administrator hereunder, shall be the successor to the Collateral Administrator under this Agreement without further act of any of the parties to this Agreement.
 
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SECTION 15.04 Collateral Administrator Compensation.
(a) Compensation. As compensation for its Collateral Administrator activities hereunder, the Collateral Administrator shall be entitled to the Collateral Administrator Fees from the Borrower as set forth in the Backup Servicer, Account Bank, Collateral Custodian and Collateral Administrator Fee Letter, payable pursuant to the extent of funds available therefor pursuant to the provisions of  Section 2.04 . The Collateral Administrator’s entitlement to receive the Collateral Administrator Fees, shall cease on the earlier to occur of (i) its removal as Collateral Administrator pursuant to  Section 15.05 , (ii) its resignation as Collateral Administrator pursuant to  Section 15.07  or (iii) the termination of this Agreement.
(b) Negative Covenant Regarding Compensation. The Collateral Administrator will not make any changes to the Collateral Administrator Fees without the prior written approval of the Administrative Agent and the Borrower.
SECTION 15.05 Collateral Administrator Removal.
The Collateral Administrator may be removed, with or without cause, by the Administrative Agent by notice given in writing to the Collateral Administrator (the “ Collateral Administrator Termination Notice ”);  provided  that, notwithstanding its receipt of a Collateral Administrator Termination Notice, the Collateral Administrator shall continue to act in such capacity until a successor Collateral Administrator has been appointed and has agreed to act as Collateral Administrator hereunder.
SECTION 15.06 Limitation on Liability.
Each of the rights, protections, benefits, immunities and indemnities afforded to the Collateral Custodian pursuant to Section 13.06  hereof shall also be afforded to the Collateral Administrator acting in such capacity;  provided  that such rights, protections, benefits, immunities and indemnities shall be in addition to, and not in limitation of, any rights, protections, benefits, immunities and indemnities provided in this Agreement or any other documents to which the Collateral Administrator in such capacity is a party.
SECTION 15.07 Collateral Administrator Resignation.
The Collateral Administrator may resign and be discharged from its duties or obligations hereunder, not earlier than 90 days after delivery to the Administrative Agent of written notice of such resignation specifying a date when such resignation shall take effect. Upon the effective date of such resignation, or if the Administrative Agent gives the Collateral Administrator written notice of an earlier termination hereof, the Collateral Administrator shall (i) be reimbursed for any reasonable documented out-of-pocket costs and expenses the Collateral Administrator shall incur in connection with the termination of its duties under this Agreement and (ii) transfer all amounts in the Collection Account pursuant to the instructions of the Administrative Agent; provided  that the Borrower shall have consented to any successor Collateral Administrator appointed by the Administrative Agent at the direction of the Majority Lenders (such consent not to be unreasonably withheld). Notwithstanding anything herein to the contrary, the Collateral Administrator may not resign prior to a successor Collateral Administrator being appointed.
[SIGNATURE PAGES TO FOLLOW]
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

THE BORROWER:	
 	
CARLYLE GMS FINANCE SPV LLC	

By:	 	 	
 	 	Name:	
 	 	Title:	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
177

 	 	 	
THE SERVICER:	
 	
CARLYLE GMS FINANCE, INC.	

By:	 	 	
 	 	Name:	
 	 	Title:	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
178

 	 	 	
THE TRANSFEROR:	
 	
CARLYLE GMS FINANCE, INC.	

By:	 	 	
 	 	Name:	
 	 	Title:	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
179

 	 	 	
THE ADMINISTRATIVE AGENT:	
 	
CITIBANK, N.A.	

By:	 	 	
 	 	Name:	
 	 	Title:	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
180

 	 	 	
THE COLLATERAL AGENT:	
 	
CITIBANK, N.A.	

By:	 	 	
 	 	Name:	
 	 	Title:	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
181

 	 	 	
THE ACCOUNT BANK, COLLATERAL CUSTODIAN AND, COLLATERAL ADMINISTRATOR :	
 	
WELLS FARGO BANK, NATIONAL ASSOCIATION	

By:	 	 	
 	 	Name:	
 	 	Title:	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
182

 	 	 	
THE BACKUP SERVICER:	
 	
WELLS FARGO BANK, NATIONAL ASSOCIATION	

By:	 	 	
 	 	Name:	
 	 	Title:	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
183

 	 	 	
CONDUIT LENDER:	
 	
CRC FUNDING, LLC	
 	 	
By:	 	Citibank, N.A., as Attorney-in-Fact	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	

CRC Funding, LLC
c/o Citibank, N.A.	
750 Washington Boulevard	
Stamford, CT 06901	
Attention: Global Securitization	
Tel No.: (203) 975-6417	
Fax No.: (914) 274-9027	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
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LIQUIDITY BANK AND CONDUIT LENDER:	
 	
CIESCO, LLC	
 	 	
By:	 	Citibank, N.A., as Attorney-in-Fact	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 	
CIESCO, LLC
c/o Citibank, N.A.	
750 Washington Boulevard	
Stamford, CT 06901	
Attention: Global Securitization	
Tel No.: (203) 975-6417	
Fax No.: (914) 274-9027	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
185

 	 	 	
CONDUIT LENDER:	
 	
CHARTA, LLC	
 	 	
By:	 	Citibank, N.A., as Attorney-in-Fact	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 	
CHARTA, LLC
c/o Citibank, N.A.
750 Washington Boulevard
Stamford, CT 06901
Attention: Global Securitization
Tel No.: (203) 975-6417
Fax No.: (914) 274-9027	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
186

 	 	 	
CONDUIT LENDER:	
 	
CAFCO, LLC	
 	 	
By:	 	Citibank, N.A., as Attorney-in-Fact	
 	 	
By:	 	 	
 	 	Name:	
 	 	Title:	
 	
CAFCO, LLC
c/o Citibank, N.A.
750 Washington Boulevard
Stamford, CT 06901
Attention: Global Securitization
Tel No.: (203) 975-6417
Fax No.: (914) 274-9027	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
187

 	 	 	
LENDER AGENT:	
 	
CITIBANK, N.A.	

By:	 	 	
Name:	 	 	
Title:	 	 	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
188

 	 	 	
INSTITUTIONAL LENDER:	
 	
PNC BANK, NATIONAL ASSOCIATION	

By:	 	 	
Name:	 	 	
Title:	 	 	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
189

 	 	 	
LENDER AGENT:	
 	
PNC BANK, NATIONAL ASSOCIATION	

By:	 	 	
Name:	 	 	
Title:	 	 	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
190

 	 	 	
INSTITUTIONAL LENDER:	
 	
KEY EQUIPMENT FINANCE INC.	

By:	 	 	
Name:	 	 	
Title:	 	 	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
191

 	 	 	
LENDER AGENT:	
 	
KEY EQUIPMENT FINANCE INC.	

By:	 	 	
Name:	 	 	
Title:	 	 	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
192

 	 	 	
INSTITUTIONAL LENDER:	
 	
STATE STREET BANK AND TRUST COMPANY	

By:	 	 	
Name:	 	 	
Title:	 	 	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
193

 	 	 	
LENDER AGENT:	
 	
STATE STREET BANK AND TRUST COMPANY	

By:	 	 	
Name:	 	 	
Title:	 	 	
[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]
 
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Schedule I
Condition Precedent Documents
As required by Section 3.01 of the Agreement, each of the following items must be delivered to the Administrative Agent prior to the effectiveness of the Agreement:
(a) A copy of this Agreement duly executed by each of the parties hereto;
(b) A certificate of the Secretary, Assistant Secretary or managing member, as applicable, of each of the Borrower and the Servicer, dated the date of this Agreement, certifying (i) the names and true signatures of the incumbent officers of such Person authorized to sign on behalf of such Person the Transaction Documents to which it is a party (on which certificate the Administrative Agent, the Lenders, the Collateral Custodian, the Backup Servicer and the Lender Agents may conclusively rely until such time as the Administrative Agent and the Lender Agents shall receive from the Borrower or CGMS, as applicable, a revised certificate meeting the requirements of this paragraph (b)(i)), (ii) that the copy of the certificate of formation or articles of incorporation of such Person, as applicable, is a complete and correct copy and that such certificate of formation or articles of incorporation have not been amended, modified or supplemented and are in full force and effect, (iii) that the copy of the limited liability company agreement or by-laws, as applicable, of such Person are a complete and correct copy, and that such limited liability company agreement or by-laws have not been amended, modified or supplemented and are in full force and effect, and (iv) the resolutions of the board of directors of such Person or managing member, as applicable, approving and authorizing the execution, delivery and performance by such Person of the Transaction Documents to which it is a party;
(c) A good standing certificate, dated as of a recent date for each of the Borrower and CGMS, issued by the Secretary of State of such Person’s State of formation or organization, as applicable;
(d) Duly executed Revolving Notes to the extent requested by a Lender Agent;
(e) Financing statements (the “Facility Financing Statements”) describing the Collateral Portfolio, and (i) naming the Borrower as debtor and the Collateral Agent, on behalf of the Secured Parties, as secured party, (ii) naming the Transferor as debtor, the Borrower as assignor and the Collateral Agent, on behalf of the Secured Parties, as secured party/total assignee and (iii) other, similar instruments or documents, as may be necessary or, in the opinion of the Administrative Agent, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the Collateral Agent’s, on behalf of the Secured Parties, interests in all Collateral Portfolio;
(f) Financing statements, if any, necessary to release all security interests and other rights of any Person in the Collateral Portfolio previously granted by the Transferor;
(g) Copies of tax and judgment lien searches in all jurisdictions reasonably requested by the Administrative Agent and requests for information (or a similar UCC search report certified by a party acceptable to the Administrative Agent), dated a date reasonably near to the Closing Date, and with respect to such requests for information or UCC searches, listing all effective financing statements which name the Borrower (under its present name and any previous name) or CGMS (under its present name and any previous name) as debtor(s) and which are filed in Maryland, together with copies of such financing statements (none of which shall cover any Collateral Portfolio);
 
195

(h) One or more favorable Opinions of Counsel of counsel to the Borrower, acceptable to the Administrative Agent and addressed to the Administrative Agent, the Lenders, the Lender Agents, Backup Servicer, Collateral Custodian and the Collateral Agent, with respect to such matters as the Administrative Agent may reasonably request;
(i) One or more favorable Opinions of Counsel of counsel to CGMS, acceptable to the Administrative Agent and addressed to the Administrative Agent, the Lenders, the Lender Agents, the Backup Servicer, the Collateral Custodian and the Collateral Agent, with respect to, such matters as the Administrative Agent may reasonably request;
(j) Duly completed copies of IRS Form W-9 (or any successor forms or other certificates or statements that may be required from time to time by the relevant United States taxing authorities or Applicable Law) for the Borrower; and
(k) A copy of each of the other Transaction Documents duly executed by the parties thereto including, without limitation, the Collection Account Agreement.
 
196

Schedule II
Prior Names, Tradenames, Fictitious Names and “Doing Business As” Names
None.

Schedule III
Eligible Loan Assets
The following criteria shall be true and correct with respect to such Loan Asset to be considered an Eligible Loan Asset:
 
I.	As of the Cut-Off Date with respect to such Loan Asset:	
 
 	(a)	The Loan Asset has been originated or acquired by the Borrower in accordance with the Risk and Collection Policies.	
 
 	(b)	The Loan Asset has an original term to maturity of not greater than (i) 8 years with respect to Second Lien Loan Assets and (ii) 7 years with respect to all other Loan Assets.	
 
 	(c)	The Loan Asset either (i) has an Advance Date Assigned Value of not less than 90%, or (ii) is a Discount Loan (unless the Eligibility Criteria under this clause (c) is waived in writing by the Administrative Agent in its sole discretion).	
 
 	(d)	The Servicer has obtained and provided to the Administrative Agent a RiskCalc score for such Loan Asset.	
 
 	(e)	The Loan Asset was originated or acquired in the ordinary course of the Borrower’s or the Transferor’s business.	
 
 	(f)	The origination of the Loan Asset or the acquisition of a Loan Asset from the Transferor, as applicable does not violate Applicable Law.	
 
 	(g)	If the Loan Asset is funded in connection with a leveraged acquisition, the Loan Asset is either (i) a HLT Loan Asset (subject to the Concentration Limits), or (ii) the related Obligor’s pro forma ratio of equity to total capital is not less than 25%.	
 
 	(h)	The EBITDA of the related Obligor of the Loan Asset is greater than $10,000,000.	
 
 	(i)	If the Loan Asset is a Second Lien Loan Asset with an original term to maturity that is greater than 7 years, then (i) the EBITDA of the related Obligor (as of the related Cut-Off Date) is equal to at least $40,000,000 and (ii) its remaining term to maturity, as of the Cut-Off Date, is not greater than 7 years.	
 
II.	At all times (including as of the Cut-Off Date) with respect to such Loan Asset:	
 
 	(a)	The Loan Asset has an Assigned Value of not less than either (i) 70% if and to the extent that the Applicable Index is above 70%, and (ii) 60% in all other cases (unless the Eligibility Criteria under this clause (a) is waived in writing by the Administrative Agent in its sole discretion).	

 	(b)	The Loan Asset is either a Unitranche Loan Asset, a First Lien Loan Asset or a Second Lien Loan Asset.	
 
 	(c)	If such Loan Asset is rated by (i) S&P, such rating is not lower than “CCC,” (ii) Moody’s, such rating is not lower than “Caa2” and (iii) Fitch, such rating is not lower than “CCC.”	
 
 	(d)	If the Loan Asset is a Broadly Syndicated Loan Asset that is an Initial Unrated Loan Asset, the Servicer has obtained for such Loan Asset within 90 days from the related Cut-Off Date ratings in compliance with  clause (c)  of this  Part II from at least two Rating Agencies;  provided  that with respect to a Loan Asset where the related total loan facilities are greater than $200,000,000 that is an Initial Unrated Loan Asset that is a Broadly Syndicated Loan Asset, the 90 day period set forth above shall be extended to an aggregate period of 210 days after the related Cut-Off Date if the Servicer has applied for a credit rating from at least two Rating Agencies prior to the date that is five Business Days after the related Cut-Off Date with respect to such Loan Asset and has thereafter used good faith efforts to respond to any request or enquiry from each such Rating Agency and has requested each such Rating Agency to promptly provide such ratings.	
 
 	(e)	If the Loan Asset is an Initial Unrated Loan Asset that is not a Broadly Syndicated Loan Asset, the Servicer has obtained for such Loan Asset (i) a rating in compliance with  clause (c)  of this  Part II  from at least one Rating Agency within 90 days from the related Cut-Off Date, and (ii) ratings in compliance with  clause (c)  of this  Part II  from at least two Rating Agencies within 180 days from the related Cut-Off Date;  provided  that with respect to a Loan Asset where the related total loan facilities are greater than $200,000,000 that is an Initial Unrated Loan Asset that is not a Broadly Syndicated Loan Asset, the 90 day period set forth in clause (i) above and the 180 day period set forth in clause (ii)  above shall be extended by a further 30 days (i.e., to an aggregate period of 120 days after the related Cut-Off Date with respect to clause (i) and an aggregate period of 210 days after the related Cut-Off Date with respect to clause (ii)) if the Servicer has applied for a credit rating from at least two Rating Agencies prior to the date that is five Business Days after the related Cut-Off Date with respect to such Loan Asset and has thereafter used good faith efforts to respond to any request or enquiry from each such Rating Agency and has requested each such Rating Agency to promptly provide such ratings.	
 
 	(f)	The Loan Asset is either (i) a Foreign Currency Loan Asset (subject to the Concentration Limits), or (ii) denominated and payable only in the United States in U.S. dollars and does not permit the currency to be changed or place of payment to be modified outside of the United States.	

 	(g)	If the Loan Asset is a Foreign Currency Loan Asset, such Loan Asset is subject to a Hedging Agreement.	
 
 	(h)	No default or event of default is continuing under the related Loan Agreement or other documentation relating to such Loan Agreement as of the date of the Pledge of such Loan Asset, and the Loan Asset is not a Delinquent Asset or Charged-Off Asset.	
 
 	(i)	The Loan Asset is either (i) a Fixed Rate Loan Asset (subject to the Concentration Limits), or (ii) a Floating Rate Loan Asset.	
 
 	(j)	The Loan Asset is not a loan primarily for personal, family or household use.	
 
 	(k)	The Loan Asset and related Loan Agreement and related documents are in full force and effect and free and clear of Liens (other than Permitted Liens).	
 
 	(l)	The Servicer has delivered to the Collateral Agent three years (or, if in existence for a shorter period, such shorter period) historical financial statements of the related Obligor.	
 
 	(m)	The Loan Asset and related Loan Agreement and related documents and Loan Asset File is fully assignable or, if such assignment is subject to the consent of the underlying Obligor or lender agent under the related Loan Agreement, the related Loan Agreement provides that such consent to assignment shall not be unreasonably withheld;  provided  that all consents required to be obtained with respect to such Loan Asset shall have obtained prior to the related Cut-Off Date.	
 
 	(n)	The Loan Asset Agreement qualifies as an “instrument” or a “payment intangible” under article 9 of the UCC.	
 
 	(o)	The Loan Asset and obligations under the Loan Agreement are not subject to any litigation, dispute, refund, claims of rescission, setoff, netting, counterclaim or defense.	
 
 	(p)	Payments under the Loan Asset not subject to withholding tax (unless grossed up).	
 
 	(q)	The Loan Asset was not adversely selected by the Transferor or the Servicer.	
 
 	(r)	The Loan Asset is not secured by margin stock nor exchangeable for equity.	

 	(s)	The Loan Asset is not a commercial real estate loan, construction loan or otherwise principally secured by real property.	
 
 	(t)	The Loan Asset is not comprised of structured finance obligations.	
 
 	(u)	The Borrower, the Servicer and the related Obligor treat the payment obligations under the Loan Asset as indebtedness for tax purposes.	
 
 	(v)	The Transferor records the Loan Asset on its books and records as a “true contribution”, and contributed and transferred to the Borrower.	
 
 	(w)	The related Loan Asset File for the Loan Asset is, or will be, in the possession of the Collateral Custodian in the manner required under the Agreement.	
 
 	(x)	Each of the Transferor, the Servicer and the Borrower has all necessary licenses and permits under Applicable Law, to purchase, own and service the Loan Asset in the state where the related Obligor is located.	
 
 	(y)	The Loan Asset and the related Loan Asset Agreement do not contain confidentiality restrictions that would prohibit or otherwise prevent the reporting and deliveries required from the Servicer to the Administrative Agent hereunder, (ii) prohibit or impede in any material manner the Administrative Agent from conducting its audits in a reasonable manner as contemplated hereunder, or (iii) prohibit or impede in any material manner the Backup Servicer or any Replacement Servicer from performing their respective duties hereunder or under any other Transaction Document.	
 
 	(z)	If the Loan Asset is a Cov-Lite Loan Asset (i) it is a First Lien Loan Asset, (ii) it is either (x) a Broadly Syndicated Loan Asset with at least two current Bid Prices or a Side Quote that is based on two current Bid Prices or (y) a Special Cov-Lite Loan Asset, (iii) it has an Assigned Value of at least 90%, and (iv) the EBITDA of the related Obligor thereof as of the Cut-Off Date is greater than or equal to $40,000,000.	
 
 	(aa)	If the Loan Asset is a Special Cov-Lite Loan Asset, such Loan Asset maintains ratings from at least two Rating Agencies.	
 
 	(bb)	If the EBITDA of the related Obligor of the Loan Asset (determined as of its related Cut-Off Date) was less than $15,000,000, ratio of equity to total capital (or, with respect to an Obligor of a Loan Asset funded other than in connection with a leveraged acquisition, implied equity to total capital) shall equal at least 35%.	

 	(cc)	Other than Foreign Eligible Obligors, the related Obligor for such Loan Asset is a legal entity, duly formed, existing and in good standing under the laws of a state in the United States and whose principal Underlying Collateral is located in the United States.	
 
 	(dd)	The related Obligor for such Loan Asset is not a Governmental Authority.	
 
 	(ee)	The related Obligor for such Loan Asset is not an Affiliate of the Borrower, CGMS, Carlyle Management or any of their respective Affiliates.	
 
 	(ff)	The Loan Asset is either (i) a DIP Loan Asset (subject to the Concentration Limits), or (ii) the related Obligor thereunder is Solvent and not subject of a Bankruptcy Event.	
 
 	(gg)	The related Loan Agreement for such Loan Asset requires the Obligor thereunder to pay all maintenance, repair, insurance and taxes related to the Underlying Collateral	
 
 	(hh)	If such Loan Asset is a PIK Loan Asset, such Loan Asset is currently paying interest in cash at a per annum rate equal to at least 2.5%.	

Schedule IV
Loan Asset Schedule
None.

Schedule V
Advance Date Assigned Values
None.

Schedule VI
Industry Categories
1. Aerospace & Defense;
2. Automotive;
3. Banking, Finance, Insurance & Real Estate;
4. Beverage, Food & Tobacco;
5. Capital Equipment;
6. Chemicals, Plastics & Rubber;
7. Construction & Building;
8. Consumer goods: Durable;
9. Consumer goods: Non-durable;
10. Containers, Packaging & Glass;
11. Energy: Electricity;
12. Energy: Oil & Gas;
13. Environmental Industries;
14. Forest Products & Paper;
15. Healthcare & Pharmaceuticals;
16. High Tech Industries;
17. Hotel, Gaming & Leisure;
18. Media: Advertising, Printing & Publishing;
19. Media: Broadcasting & Subscription;
20. Media: Diversified & Production;
21. Metals & Mining;
22. Retail;
23. Services: Business;
24. Services: Consumer;
25. Sovereign & Public Finance;
26. Telecommunications;
27. Transportation: Cargo;
28. Transportation: Consumer;
29. Utilities: Electric;
30. Utilities: Oil & Gas;
31. Utilities: Water;
32. Wholesale.

Annex A
Commitments

Liquidity Bank or Institutional Lender	  	Name of Institution	  	Commitment	 	
 	 	 	
Liquidity Bank	  	Ciesco, LLC	  	$	150,000,000	 	
 	 	 	
Institutional Lender	  	Bank of America, N.A.	  	$	80,000,000	 	
 	 	 	
Institutional Lender	  	Mizuho Bank, Ltd.	  	$	50,000,000	 	
 	 	 	
Liquidity Bank	  	Natixis, New York Branch	  	$	50,000,000	 	
 	 	 	
Institutional Lender	  	State Street Bank and Trust Company	  	$	45,000,000	 	
 	 	 	
Institutional Lender	  	Key Equipment Finance, a division of Keybank National Association	  	$	25,000,000	 	
 	 	 	
AGGREGATE COMMITMENT	  	 	  	$	400,000,000	 	

Annex B
Borrowing Base Model
SEE ATTACHED

Annex C
Diversity Score Model
Diversity Score
Calculated as follows:
(a) An “Issuer Par Amount” is calculated for each issuer of an Eligible Loan Asset, and is equal to the Outstanding Principal Balance of all Eligible Loan Assets issued by that issuer and all Affiliates.
(b) An “Average Par Amount” is calculated by summing the Issuer Par Amounts for all issuers, and dividing by the number of issuers.
(c) An “Equivalent Unit Score” is calculated for each issuer, and is equal to the lesser of (i) one and (ii) the Issuer Par Amount for such issuer  divided by  the Average Par Amount.
(d) An “Aggregate Industry Equivalent Unit Score” is then calculated for each of the Moody’s industry classification groups (as set forth in  Schedule VI  of the Agreement) and is equal to the sum of the Equivalent Unit Scores for each issuer in such industry classification group.
(e) An “Industry Diversity Score” is then established for each Moody’s industry classification group by reference to the following table for the related Aggregate Industry Equivalent Unit Score;  provided , that if any Aggregate Industry Equivalent Unit Score falls between any two such scores, the applicable Industry Diversity Score will be the lower of the two Industry Diversity Scores:

Aggregate
Industry
Equivalent Unit
Score	 	 	Industry
Diversity Score	 	 	Aggregate
Industry
Equivalent Unit
Score	 	 	Industry
Diversity Score	 	 	Aggregate
Industry,
Equivalent Unit
Score	 	 	Industry
Diversity Score	 	 	Aggregate
Industry
Equivalent Unit
Score	 	 	Industry
Diversity
Score	 	
 	0.0000	 	 	 	0.0000	 	 	 	5.0500	 	 	 	2.7000	 	 	 	10.1500	 	 	 	4.0200	 	 	 	15.2500	 	 	 	4.5300	 	
 	0.0500	 	 	 	0.1000	 	 	 	5.1500	 	 	 	2.7333	 	 	 	10.2500	 	 	 	4.0300	 	 	 	15.3500	 	 	 	4.5400	 	
 	0.1500	 	 	 	0.2000	 	 	 	5.2500	 	 	 	2.7667	 	 	 	10.3500	 	 	 	4.0400	 	 	 	15.4500	 	 	 	4.5500	 	
 	0.2500	 	 	 	0.3000	 	 	 	5.3500	 	 	 	2.8000	 	 	 	10.4500	 	 	 	4.0500	 	 	 	15.5500	 	 	 	4.5600	 	
 	0.3500	 	 	 	0.4000	 	 	 	5.4500	 	 	 	2.8333	 	 	 	10.5500	 	 	 	4.0600	 	 	 	15.6500	 	 	 	4.5700	 	
 	0.4500	 	 	 	0.5000	 	 	 	5.5500	 	 	 	2.8667	 	 	 	10.6500	 	 	 	4.0700	 	 	 	15.7500	 	 	 	4.5800	 	
 	0.5500	 	 	 	0.6000	 	 	 	5.6500	 	 	 	2.9000	 	 	 	10.7500	 	 	 	4.0800	 	 	 	15.8500	 	 	 	4.5900	 	
 	0.6500	 	 	 	0.7000	 	 	 	5.7500	 	 	 	2.9333	 	 	 	10.8500	 	 	 	4.0900	 	 	 	15.9500	 	 	 	4.6000	 	
 	0.7500	 	 	 	0.8000	 	 	 	5.8500	 	 	 	2.9667	 	 	 	10.9500	 	 	 	4.1000	 	 	 	16.0500	 	 	 	4.6100	 	
 	0.8500	 	 	 	0.9000	 	 	 	5.9500	 	 	 	3.0000	 	 	 	11.0500	 	 	 	4.1100	 	 	 	16.1500	 	 	 	4.6200	 	
 	0.9500	 	 	 	1.0000	 	 	 	6.0500	 	 	 	3.0250	 	 	 	11.1500	 	 	 	4.1200	 	 	 	16.2500	 	 	 	4.6300	 	
 	1.0500	 	 	 	1.0500	 	 	 	6.1500	 	 	 	3.0500	 	 	 	11.2500	 	 	 	4.1300	 	 	 	16.3500	 	 	 	4.6400	 	
 	1.1500	 	 	 	1.1000	 	 	 	6.2500	 	 	 	3.0750	 	 	 	11.3500	 	 	 	4.1400	 	 	 	16.4500	 	 	 	4.6500	 	
 	1.2500	 	 	 	1.1500	 	 	 	6.3500	 	 	 	3.1000	 	 	 	11.4500	 	 	 	4.1500	 	 	 	16.5500	 	 	 	4.6600	 	
 	1.3500	 	 	 	1.2000	 	 	 	6.4500	 	 	 	3.1250	 	 	 	11.5500	 	 	 	4.1600	 	 	 	16.6500	 	 	 	4.6700	 	
 	1.4500	 	 	 	1.2500	 	 	 	6.5500	 	 	 	3.1500	 	 	 	11.6500	 	 	 	4.1700	 	 	 	16.7500	 	 	 	4.6800	 	
 	1.5500	 	 	 	1.3000	 	 	 	6.6500	 	 	 	3.1750	 	 	 	11.7500	 	 	 	4.1800	 	 	 	16.8500	 	 	 	4.6900	 	
 	1.6500	 	 	 	1.3500	 	 	 	6.7500	 	 	 	3.2000	 	 	 	11.8500	 	 	 	4.1900	 	 	 	16.9500	 	 	 	4.7000	 	
 	1.7500	 	 	 	1.4000	 	 	 	6.8500	 	 	 	3.2250	 	 	 	11.9500	 	 	 	4.2000	 	 	 	17.0500	 	 	 	4.7100	 	
 	1.8500	 	 	 	1.4500	 	 	 	6.9500	 	 	 	3.2500	 	 	 	12.0500	 	 	 	4.2100	 	 	 	17.1500	 	 	 	4.7200	 	
 	1.9500	 	 	 	1.5000	 	 	 	7.0500	 	 	 	3.2750	 	 	 	12.1500	 	 	 	4.2200	 	 	 	17.2500	 	 	 	4.7300	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Aggregate
Industry
Equivalent Unit
Score	 	 	Industry
Diversity Score	 	 	Aggregate
Industry
Equivalent Unit
Score	 	 	Industry
Diversity Score	 	 	Aggregate
Industry,
Equivalent Unit
Score	 	 	Industry
Diversity Score	 	 	Aggregate
Industry
Equivalent Unit
Score	 	 	Industry
Diversity
Score	 	
 	2.0500	 	 	 	1.5500	 	 	 	7.1500	 	 	 	3.3000	 	 	 	12.2500	 	 	 	4.2300	 	 	 	17.3500	 	 	 	4.7400	 	
 	2.1500	 	 	 	1.6000	 	 	 	7.2500	 	 	 	3.3250	 	 	 	12.3500	 	 	 	4.2400	 	 	 	17.4500	 	 	 	4.7500	 	
 	2.2500	 	 	 	1.6500	 	 	 	7.3500	 	 	 	3.3500	 	 	 	12.4500	 	 	 	4.2500	 	 	 	17.5500	 	 	 	4.7600	 	
 	2.3500	 	 	 	1.7000	 	 	 	7.4500	 	 	 	3.3750	 	 	 	12.5500	 	 	 	4.2600	 	 	 	17.6500	 	 	 	4.7700	 	
 	2.4500	 	 	 	1.7500	 	 	 	7.5500	 	 	 	3.4000	 	 	 	12.6500	 	 	 	4.2700	 	 	 	17.7500	 	 	 	4.7800	 	
 	2.5500	 	 	 	1.8000	 	 	 	7.6500	 	 	 	3.4250	 	 	 	12.7500	 	 	 	4.2800	 	 	 	17.8500	 	 	 	4.7900	 	
 	2.6500	 	 	 	1.8500	 	 	 	7.7500	 	 	 	3.4500	 	 	 	12.8500	 	 	 	4.2900	 	 	 	17.9500	 	 	 	4.8000	 	
 	2.7500	 	 	 	1.9000	 	 	 	7.8500	 	 	 	3.4750	 	 	 	12.9500	 	 	 	4.3000	 	 	 	18.0500	 	 	 	4.8100	 	
 	2.8500	 	 	 	1.9500	 	 	 	7.9500	 	 	 	3.5000	 	 	 	13.0500	 	 	 	4.3100	 	 	 	18.1500	 	 	 	4.8200	 	
 	2.9500	 	 	 	2.0000	 	 	 	8.0500	 	 	 	3.5250	 	 	 	13.1500	 	 	 	4.3200	 	 	 	18.2500	 	 	 	4.8300	 	
 	3.0500	 	 	 	2.0333	 	 	 	8.1500	 	 	 	3.5500	 	 	 	13.2500	 	 	 	4.3300	 	 	 	18.3500	 	 	 	4.8400	 	
 	3.1500	 	 	 	2.0667	 	 	 	8.2500	 	 	 	3.5750	 	 	 	13.3500	 	 	 	4.3400	 	 	 	18.4500	 	 	 	4.8500	 	
 	3.2500	 	 	 	2.1000	 	 	 	8.3500	 	 	 	3.6000	 	 	 	13.4500	 	 	 	4.3500	 	 	 	18.5500	 	 	 	4.8600	 	
 	3.3500	 	 	 	2.1333	 	 	 	8.4500	 	 	 	3.6250	 	 	 	13.5500	 	 	 	4.3600	 	 	 	18.6500	 	 	 	4.8700	 	
 	3.4500	 	 	 	2.1667	 	 	 	8.5500	 	 	 	3.6500	 	 	 	13.6500	 	 	 	4.3700	 	 	 	18.7500	 	 	 	4.8800	 	
 	3.5500	 	 	 	2.2000	 	 	 	8.6500	 	 	 	3.6750	 	 	 	13.7500	 	 	 	4.3800	 	 	 	18.8500	 	 	 	4.8900	 	
 	3.6500	 	 	 	2.2333	 	 	 	8.7500	 	 	 	3.7000	 	 	 	13.8500	 	 	 	4.3900	 	 	 	18.9500	 	 	 	4.9000	 	
 	3.7500	 	 	 	2.2667	 	 	 	8.8500	 	 	 	3.7250	 	 	 	13.9500	 	 	 	4.4000	 	 	 	19.0500	 	 	 	4.9100	 	
 	3.8500	 	 	 	2.3000	 	 	 	8.9500	 	 	 	3.7500	 	 	 	14.0500	 	 	 	4.4100	 	 	 	19.1500	 	 	 	4.9200	 	
 	3.9500	 	 	 	2.3333	 	 	 	9.0500	 	 	 	3.7750	 	 	 	14.1500	 	 	 	4.4200	 	 	 	19.2500	 	 	 	4.9300	 	
 	4.0500	 	 	 	2.3667	 	 	 	9.1500	 	 	 	3.8000	 	 	 	14.2500	 	 	 	4.4300	 	 	 	19.3500	 	 	 	4.9400	 	
 	4.1500	 	 	 	2.4000	 	 	 	9.2500	 	 	 	3.8250	 	 	 	14.3500	 	 	 	4.4400	 	 	 	19.4500	 	 	 	4.9500	 	
 	4.2500	 	 	 	2.4333	 	 	 	9.3500	 	 	 	3.8500	 	 	 	14.4500	 	 	 	4.4500	 	 	 	19.5500	 	 	 	4.9600	 	
 	4.3500	 	 	 	2.4667	 	 	 	9.4500	 	 	 	3.8750	 	 	 	14.5500	 	 	 	4.4600	 	 	 	19.6500	 	 	 	4.9700	 	
 	4.4500	 	 	 	2.5000	 	 	 	9.5500	 	 	 	3.9000	 	 	 	14.6500	 	 	 	4.4700	 	 	 	19.7500	 	 	 	4.9800	 	
 	4.5500	 	 	 	2.5333	 	 	 	9.6500	 	 	 	3.9250	 	 	 	14.7500	 	 	 	4.4800	 	 	 	19.8500	 	 	 	4.9900	 	
 	4.6500	 	 	 	2.5667	 	 	 	9.7500	 	 	 	3.9500	 	 	 	14.8500	 	 	 	4.4900	 	 	 	19.9500	 	 	 	5.0000	 	
 	4.7500	 	 	 	2.6000	 	 	 	9.8500	 	 	 	3.9750	 	 	 	14.9500	 	 	 	4.5000	 	 	 	 	 	 	 	 	 	
 	4.8500	 	 	 	2.6333	 	 	 	9.9500	 	 	 	4.0000	 	 	 	15.0500	 	 	 	4.5100	 	 	 	 	 	 	 	 	 	
 	4.9500	 	 	 	2.6667	 	 	 	10.0500	 	 	 	4.0100	 	 	 	15.1500	 	 	 	4.5200	 	 	 	 	 	 	 	 	 	
(f) The Diversity Score is then calculated by summing each of the Industry Diversity Scores for each Moody’s industry classification group.
For purposes of calculating the Diversity Score, Affiliated issuers in the same industry are deemed to be a single issuer, except as otherwise agreed to by the Administrative Agent

Annex D
WARR and WARF Matrix Models
Collateral Quality Matrix
For any date of determination, the intersection set forth in the matrices below that has been selected by the Servicer for use in determining the scores that are required to satisfy the Diversity Score Test, the WARF Test, the WARR Test and the Weighted Average Spread Test. The Servicer may elect from time to time to apply a different intersection in the matrices set forth below upon notice to the Administrative Agent, however the Servicer may not elect to apply an intersection in which any Collateral Quality Test is not satisfied if there exists an intersection in which all of the Collateral Quality Tests would be satisfied. In determining whether the criteria set forth in the matrices are satisfied, the Servicer may interpolate linearly between either Weighted Average Spread or Minimum Recovery Rate (but not both) while leaving the other values in the matrices constant.
Collateral Quality Matrix

 	 	 	Minimum Diversity Score	 	
Minimum	 	 	20 - 25	 	 	25 - 30	 	 	30 - 35	 	 	35 - 40	 	 	>=40	 	
WAS	 	 	Minimum Recovery Rate 50%	 	
 	3.50%	 	 	 	3100	 	 	 	3500	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	
 	4.00%	 	 	 	3300	 	 	 	3600	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	4.50%	 	 	 	3400	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	5.00%	 	 	 	3600	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	5.50%	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	6.00%	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	 	
 	 	 	Minimum Diversity Score	 	
Minimum	 	 	20 - 25	 	 	25 - 30	 	 	30 - 35	 	 	35 - 40	 	 	>=40	 	
WAS	 	 	Minimum Recovery Rate 49%	 	
 	3.50%	 	 	 	3000	 	 	 	3300	 	 	 	3500	 	 	 	3700	 	 	 	3800	 	
 	4.00%	 	 	 	3100	 	 	 	3500	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	
 	4.50%	 	 	 	3300	 	 	 	3600	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	5.00%	 	 	 	3400	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	5.50%	 	 	 	3600	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	 	
 	 	 	Minimum Diversity Score	 	
Minimum	 	 	20 - 25	 	 	25 - 30	 	 	30 - 35	 	 	35 - 40	 	 	>=40	 	
WAS	 	 	Minimum Recovery Rate 49%	 	
 	3.50%	 	 	 	3000	 	 	 	3300	 	 	 	3500	 	 	 	3700	 	 	 	3800	 	
 	4.00%	 	 	 	3100	 	 	 	3500	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	
 	4.50%	 	 	 	3300	 	 	 	3600	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	5.006.00%	 	 	 	34003800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Minimum Diversity Score	 	
Minimum	 	 	20 -25	 	 	25 -30	 	 	30 -35	 	 	35 -40	 	 	>=40	 	
WAS	 	 	Minimum Recovery Rate 48%	 	
 	3.50%	 	 	 	2900	 	 	 	3200	 	 	 	3400	 	 	 	3600	 	 	 	3700	 	
 	4.00%	 	 	 	3000	 	 	 	3400	 	 	 	3600	 	 	 	3700	 	 	 	3800	 	
 	4.50%	 	 	 	3200	 	 	 	3500	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	
 	5.00%	 	 	 	3300	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	5.50%	 	 	 	3500	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	6.00%	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	 	
 	 	 	Minimum Diversity Score	 	
Minimum	 	 	20 -25	 	 	25 -30	 	 	30 -35	 	 	35 -40	 	 	>=40	 	
WAS	 	 	Minimum Recovery Rate 47%	 	
 	3.50%	 	 	 	2800	 	 	 	3100	 	 	 	3300	 	 	 	3500	 	 	 	3600	 	
 	4.00%	 	 	 	2900	 	 	 	3300	 	 	 	3500	 	 	 	3600	 	 	 	3700	 	
 	4.50%	 	 	 	3100	 	 	 	3400	 	 	 	3600	 	 	 	3700	 	 	 	3800	 	
 	5.00%	 	 	 	3200	 	 	 	3600	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	
 	5.50%	 	 	 	3400	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	6.00%	 	 	 	3600	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	 	
 	 	 	Minimum Diversity Score	 	
Minimum	 	 	20 -25	 	 	25 -30	 	 	30 -35	 	 	35 -40	 	 	>=40	 	
WAS	 	 	Minimum Recovery Rate 46%	 	
 	3.50%	 	 	 	2700	 	 	 	3000	 	 	 	3200	 	 	 	3400	 	 	 	3500	 	
 	4.00%	 	 	 	2800	 	 	 	3200	 	 	 	3400	 	 	 	3500	 	 	 	3600	 	
 	4.50%	 	 	 	3000	 	 	 	3300	 	 	 	3500	 	 	 	3600	 	 	 	3700	 	
 	5.00%	 	 	 	3100	 	 	 	3500	 	 	 	3600	 	 	 	3700	 	 	 	3800	 	
 	5.50%	 	 	 	3300	 	 	 	3600	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	
 	6.00%	 	 	 	3500	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	 	 	3800	 	
 	 	
 	 	 	Minimum Diversity Score	 	
Minimum	 	 	20 -25	 	 	25 -30	 	 	30 -35	 	 	35 -40	 	 	>=40	 	
WAS	 	 	Minimum Recovery Rate 45%	 	
 	3.50%	 	 	 	2600	 	 	 	2900	 	 	 	3100	 	 	 	3300	 	 	 	3400	 	
 	4.00%	 	 	 	2700	 	 	 	3100	 	 	 	3300	 	 	 	3400	 	 	 	3500	 	
 	4.50%	 	 	 	2900	 	 	 	3200	 	 	 	3400	 	 	 	3500	 	 	 	3600	 	
 	5.00%	 	 	 	3000	 	 	 	3400	 	 	 	3500	 	 	 	3600	 	 	 	3700	 	
 	5.50%	 	 	 	3200	 	 	 	3500	 	 	 	3600	 	 	 	3700	 	 	 	3800	 	
 	6.00%	 	 	 	3400	 	 	 	3600	 	 	 	3700	 	 	 	3800	 	 	 	3800	 	

Annex E
WARR and WARF Related Definitions
“Assigned Moody’s Rating” means the monitored publicly available rating or the monitored estimated rating expressly assigned to a debt obligation (or facility) by Moody’s that addresses the full amount of the principal and interest promised;  provided  that, if application has been made for such estimated rating, pending its receipt, the Assigned Moody’s Rating will be the lower of (i) the rating as may be estimated in good faith by the Servicer in accordance with the Moody’s RiskCalc Calculation described herein and (ii) a rating of “B3”;  provided, further , that with respect to any Loan Asset for which Moody’s has provided an estimated rating, the Servicer (on behalf of the Borrower) will (x) if such estimated rating was provided to the Borrower more than 6 months prior to the Closing Date, request that Moody’s confirm or update such estimate within 6 months after the Closing Date, and in all other cases and thereafter, request that Moody’s confirm or update such estimate annually (and pending receipt of such confirmation or new estimate, the Loan Asset will have the prior estimated rating) and (y) notify Moody’s if the Servicer becomes aware of any restructuring, recapitalization or other material amendment that, in the reasonable judgment of the Servicer, would have a material adverse effect on such Loan Asset.
“Moody’s Default Probability Rating” means, with respect to any date of determination, the rating as determined in accordance with the following, in the following order of priority;  provided  that, with respect to the Loan Assets generally, if at any time Moody’s or any successor to it ceases to provide rating services, references to rating categories of Moody’s shall be deemed instead to be references to the equivalent categories of any other nationally recognized investment rating agency selected by the Borrower (with written notice to the Administrative Agent), as of the most recent date on which such other rating agency and Moody’s published ratings for the type of security in respect of which such alternative rating agency is used:
(a)(uu) with respect to a Moody’s First Lien Loan Asset:
(i)(xviii) if the obligor thereunder has a corporate family rating from Moody’s, such corporate family rating;
(ii)(xix) if the preceding clause does not apply and such Loan Asset has an Assigned Moody’s Rating, such Assigned Moody’s Rating;
(iii)(xx) if the preceding clauses do not apply and a rating or rating estimate has been assigned by Moody’s to such Loan Asset upon the request of the Borrower or the Servicer, such rating or rating estimate, as applicable; and
(iv)(xxi) if the preceding clauses do not apply, the Moody’s Derived Rating;
(b)(vv) with respect to a Loan Asset other than a Moody’s First Lien Loan Asset or DIP Loan Asset:
(i)(xxii) if the obligor thereunder has a senior unsecured obligation with an Assigned Moody’s Rating, such rating;

(ii)(xxiii) if the preceding clause does not apply and such Loan Asset has an Assigned Moody’s Rating, such Assigned Moody’s Rating;
(iii)(xxiv) if the preceding clauses do not apply and a rating or rating estimate has been assigned by Moody’s to such Loan Asset upon the request of the Borrower or the Servicer, such rating or rating estimate, as applicable; and
(iv)(xxv) if the preceding clauses do not apply, the Moody’s Derived Rating; and
(c)(ww) with respect to a DIP Loan Asset, the rating that is one rating subcategory below the Moody’s Rating thereof . ;
provided, that with respect to any Loan Asset for which Moody’s has provided an estimated rating, the Servicer (on behalf of the Borrower) will (x) if such estimated rating was provided to the Borrower more than 6 months prior to the Closing Date, request that Moody’s confirm or update such estimate within 6 months after the Closing Date, and in all other cases and thereafter, request that Moody’s confirm or update such estimate annually (and pending receipt of such confirmation or new estimate, the Loan Asset will have the prior estimated rating) and (y) notify Moody’s if the Servicer becomes aware of any restructuring, recapitalization or other material amendment that, in the reasonable judgment of the Servicer, would have a material adverse effect on such Loan Asset.
Notwithstanding the foregoing, (x) if the Moody’s rating or ratings used to determine the Moody’s Default Probability Rating are on watch for downgrade or upgrade by Moody’s, such rating or ratings will be adjusted down one subcategory (if on watch for downgrade) or up one subcategory (if on watch for upgrade), in each case without duplication of any adjustments made pursuant to the last sentence of the definition of Moody’s Rating and (y) for purposes of the Moody’s Default Probability Rating used for purposes of determining the Moody’s Rating Factor of a Loan Asset, if the Moody’s rating or ratings used to determine the Moody’s Default Probability Rating are on watch for downgrade or upgrade by Moody’s, the Moody’s Default Probability Rating will be adjusted down two subcategories (if on watch for downgrade) or up one subcategory (if on watch for upgrade) and down one subcategory (if negative outlook), in each case without duplication of any adjustments made pursuant to the last sentence of the definition of Moody’s Rating or Moody’s Derived Rating.
“Moody’s Derived Rating” means, with respect to any Loan Asset and the Obligor thereof as of any date of determination, the rating determined in accordance with the following, in the following order of priority:
(a)(xx) if the Obligor has a senior unsecured obligation with an Assigned Moody’s Rating, such Assigned Moody’s Rating;
(b)(yy) if the preceding clause does not apply, but the Obligor has a subordinated obligation with an Assigned Moody’s Rating, then:
(i)(xxvi) if such Assigned Moody’s Rating is at least “B3” (and, if rated “B3,” not on watch for downgrade), the Moody’s Derived Rating shall be the rating which is one rating subcategory higher than such Assigned Moody’s Rating, or
(ii)(xxvii) if such Assigned Moody’s Rating is less than “B3” (or rated “B3” and on watch for downgrade), the Moody’s Derived Rating shall be such Assigned Moody’s Rating;

(c)(zz) if the preceding clauses do not apply, but the Obligor has a senior secured obligation with an Assigned Moody’s Rating, then:
(i)(xxviii) if such Assigned Moody’s Rating is at least “B2” (and, if rated “B2,” not on watch for downgrade), the Moody’s Derived Rating shall be the rating which is one subcategory below such Assigned Moody’s Rating, or
(i)(xxix) if such Assigned Moody’s Rating is less than “B2” (or rated “B2” and on watch for downgrade), then the Moody’s Derived Rating shall be “C”;
(d)(aaa) if the preceding clauses do not apply, but such Obligor has a corporate family rating from Moody’s, the Moody’s Derived Rating shall be one rating subcategory below such corporate family rating;
(e)(bbb) with respect to Loan Assets that do not have a Moody’s Derived Rating determined pursuant to any of the foregoing clauses (a) through (d), the Moody’s Derived Rating of such Loan Asset shall be the lower of (i) the rating as may be estimated in good faith by the Servicer in accordance with the Moody’s RiskCalc Calculation described herein subject to the satisfaction of the qualifications set forth therein (and with notice of such calculation provided to the Administrative Agent) and (ii) a rating of “B3”;  provided  that if the Borrower or the Servicer on behalf of the Borrower has applied to Moody’s for a Moody’s credit estimate (such request having been made within 10 Business Days after the purchase of such Loan Asset), then upon receipt of such Moody’s credit estimate, the Moody’s Derived Rating for purposes of this Agreement shall be such Moody’s credit estimate;  provided  that as of any date of determination, the aggregate principal amount of Loan Assets with a Moody’s Derived Rating determined pursuant to this clause (e) may not exceed (1) at any time during the Ramp-Up Period, 20% of the Concentration Test Amount, or (2) at all times following the Ramp-Up Period, 10% of the Concentration Test Amount. The Servicer shall (x) determine and report to Moody’s the Moody’s Derived Rating within 10 Business Days of the purchase of such Loan Asset and (y) redetermine and report to Moody’s the Moody’s Derived Rating for each loan with a Moody’s Derived Rating determined in accordance with the Moody’s RiskCalc Calculation under this clause (e) within 30 days after receipt of annual financial statements from the related Obligor;
(f)(ccc) if the preceding clauses do not apply and each of the following clauses (i) through (viii) does apply, the Moody’s Derived Rating shall be “Caa1”:
(i)(xxx) neither the Obligor nor any of its Affiliates is subject to reorganization or bankruptcy proceedings,
(ii)(xxxi) no debt securities or obligations of the Obligor are in default,
(iii)(xxxii) neither the Obligor nor any of its Affiliates has defaulted on any debt during the preceding two years,
(iv)(xxxiii) the Obligor has been in existence for the preceding five years,
(v) (xxxiv) the Obligor is current on any cumulative dividends,
(vi) (xxxv) the fixed charge ratio for the Obligor exceeds 125% for each of the preceding two fiscal years and for the most recent quarter,

(vii)(xxxvi) the Obligor had a net profit before tax in the past fiscal year and the most recent quarter, and
(viii)(xxxvii) the annual financial statements of such Obligor are unqualified and certified by a firm of independent accountants of international reputation, and quarterly statements are unaudited but signed by a corporate officer;
(g)(ddd) if the preceding clauses do not apply but each of the following clauses (i) and (ii) do apply, the Moody’s Derived Rating shall be “Caa3”:
(i)(xxxviii) neither the Obligor nor any of its Affiliates is subject to reorganization or bankruptcy proceedings; and
(ii)(xxxix) no debt security or obligation of such Obligor has been in default during the past two years; and
(h)(eee) if the preceding clauses do not apply and a debt security or obligation of the Obligor has been in default during the past two years, the Moody’s Derived Rating shall be “Ca.”
provided, that with respect to any Loan Asset for which Moody’s has provided an estimated rating, the Servicer (on behalf of the Borrower) will (x) if such estimated rating was provided to the Borrower more than 6 months prior to the Closing Date, request that Moody’s confirm or update such estimate within 6 months after the Closing Date, and in all other cases and thereafter, request that Moody’s confirm or update such estimate annually (and pending receipt of such confirmation or new estimate, the Loan Asset will have the prior estimated rating) and (y) notify Moody’s if the Servicer becomes aware of any restructuring, recapitalization or other material amendment that, in the reasonable judgment of the Servicer, would have a material adverse effect on such Loan Asset.
“Moody’s First Lien Loan Asset” means any of the following types of Loan Assets:
(a)(fff) a Senior Secured Loan:
(i)(xl) that is not (and cannot by its terms become) subordinate in right of payment to indebtedness of the Obligor for borrowed money;
(ii)(xli) that is secured by a valid first priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under such Loan Asset; and
(iii)(xlii) with respect to which the value of the collateral securing such Loan Asset, together with other attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow), is adequate (in the reasonable business judgment of the Servicer, which judgment shall not be called into question as a result of subsequent events) to repay such loan in accordance with its terms, and to repay all other loans of equal seniority secured by a first lien or security interest in the same collateral; or
(b)(ggg) Senior Secured Floating Rate Note:
(i)(xliii) that is not (and cannot by its terms become) subordinated in right of payment by its terms to indebtedness of the Obligor for borrowed money (other than with respect to liquidation of such Obligor or the collateral for such Senior Secured Floating Rate Note);

(ii)(xliv) that, in the case of a Senior Secured Floating Rate Note, is secured by a valid first priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under the Senior Secured Floating Rate Note; and
(iii)(xlv) with respect to which the value of the collateral securing such Senior Secured Floating Rate Note, together with other attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the reasonable business judgment of the Servicer, which judgment shall not be called into question as a result of subsequent events) to repay such Senior Secured Floating Rate Note in accordance with its terms, and to repay all other loans of equal or higher seniority secured by a first lien (in the case of a Senior Secured Floating Rate Note) or security interest in the same collateral; and
(iv)(xlvi) that has an Assigned Moody’s Rating determined pursuant to the definition thereof, and such Assigned Moody’s Rating (calculated such that, if the Moody’s rating used to determine such Assigned Moody’s Rating is on watch for downgrade or upgrade by Moody’s, such rating will be adjusted down one subcategory (if on watch for downgrade) or up one subcategory (if on watch for upgrade)) is not lower than the Loan Asset’s Moody’s corporate family rating;
provided that (x) the Assigned Moody’s Rating of such Senior Secured Floating Rate Note is not lower than the Moody’s corporate family rating of the Obligor under such Senior Secured Floating Rate Note; and (y) the Senior Secured Floating Rate Note is not: (a) a DIP Loan Asset, (b) a Loan Asset for which the security interest or lien (or the validity or effectiveness thereof) in substantially all of its collateral attaches, becomes effective, or otherwise “springs” into existence after the origination thereof, or (c) a type of Loan Asset that Moody’s has identified as having unusual terms and with respect to which its Moody’s Recovery Rate has been or is to be determined on a case by case basis.
“Moody’s Non-First Lien Loan Asset” means any assignment of or participation interest in or other interest in a Loan Asset that is not a Moody’s First Lien Loan Asset.
“Moody’s Rating” means, with respect to any Loan Asset, as of any date of determination a rating determined as follows:
(a)(hhh) with respect to a Moody’s First Lien Loan Asset:
(i)(xlvii) if it has an Assigned Moody’s Rating, such Assigned Moody’s Rating;
(ii)(xlviii) if the preceding clause does not apply and a rating or rating estimate has been assigned by Moody’s to such Loan Asset upon the request of the Borrower or the Servicer, such rating or the rating estimate;
(iii)(xlix) if the preceding clauses do not apply and the obligor of such Loan Asset has a corporate family rating by Moody’s, then such corporate family rating;

(iv)(l) if the preceding clauses do not apply and the obligor of such Loan Asset has a senior unsecured obligation with an Assigned Moody’s Rating, such rating; or
(v)(li) if the preceding clauses do not apply, the Moody’s Derived Rating;
(b)(iii) with respect to a Moody’s Non-First Lien Loan Asset (other than a DIP Loan Asset):
(i)(lii) if it has an Assigned Moody’s Rating, such Assigned Moody’s Rating;
(ii)(liii) if the preceding clause does not apply and a rating or rating estimate has been assigned by Moody’s to such Loan Asset upon the request of the Borrower or the Servicer, such rating or the rating estimate;
(iii)(liv) if the preceding clauses do not apply and the obligor of such Loan Asset has a senior unsecured obligation with an Assigned Moody’s Rating, such rating; or
(iv)(lv) if the preceding clauses do not apply, the Moody’s Derived Rating; and
(c)(jjj) with respect to a DIP Loan Asset, the Assigned Moody’s Rating thereof.
provided, that with respect to any Loan Asset for which Moody’s has provided an estimated rating, the Servicer (on behalf of the Borrower) will (x) if such estimated rating was provided to the Borrower more than 6 months prior to the Closing Date, request that Moody’s confirm or update such estimate within 6 months after the Closing Date, and in all other cases and thereafter, request that Moody’s confirm or update such estimate annually (and pending receipt of such confirmation or new estimate, the Loan Asset will have the prior estimated rating) and (y) notify Moody’s if the Servicer becomes aware of any restructuring, recapitalization or other material amendment that, in the reasonable judgment of the Servicer, would have a material adverse effect on such Loan Asset.
For purposes of calculating a Moody’s Rating, (i) any Loan Asset that is on any “credit watch” list with positive implications by Moody’s shall be deemed to have a rating one sub-category above the actual rating of such Loan Asset, (ii) any Loan Asset that is on any “credit watch” list with negative implications by Moody’s shall be deemed to have a rating two sub-categories below the actual rating of such Loan Asset and (iii) any Loan Asset that is on “negative outlook” by Moody’s shall be deemed to have a rating one sub-category below the actual rating of such Loan Asset.

“Moody’s Rating Factor” means, with respect to any Loan Asset, is the number set forth in the table below opposite the Moody’s Default Probability Rating of such Loan Asset:

Moody’s Default Probability Rating	  	Moody’s
Rating Factor	 	  	Moody’s Default Probability Rating	  	Moody’s
Rating Factor	 	
 	 	 	 	
“Aaa”	  	 	1	 	  	“Ba1”	  	 	940	 	
“Aa1”	  	 	10	 	  	“Ba2”	  	 	1350	 	
“Aa2”	  	 	20	 	  	“Ba3”	  	 	1766	 	
“Aa3”	  	 	40	 	  	“B1”	  	 	2220	 	
“A1”	  	 	70	 	  	“B2”	  	 	2720	 	
“A2”	  	 	120	 	  	“B3”	  	 	3490	 	
“A3”	  	 	180	 	  	“Caa1”	  	 	4770	 	
“Baa1”	  	 	260	 	  	“Caa2”	  	 	6500	 	
“Baa2”	  	 	360	 	  	“Caa3”	  	 	8070	 	
“Baa3”	  	 	610	 	  	“Ca” or lower	  	 	10000	 	
Any Loan Asset issued or guaranteed by the U.S. government or any agency or instrumentality thereof is assigned a Moody’s Rating Factor of 1.
“Moody’s Recovery Rate” means, with respect to any Loan Asset, as of any date of determination, the recovery rate determined in accordance with the following, in the following order of priority:
(a)(kkk) if the Loan Asset has been specifically assigned a recovery rate by Moody’s (for example, in connection with the assignment by Moody’s of an estimated rating (including, without limitation, an estimated rating determined in accordance with the Moody’s RiskCalc Calculation)), such recovery rate;
(b)(lll) if the preceding clause does not apply to the Loan Asset, and the Loan Asset is a Moody’s First Lien Loan Asset or a Moody’s Non-First Lien Loan Asset (in each case other than a DIP Loan Asset), the rate determined pursuant to the table below based on the number of rating subcategories difference between the Loan Asset’s Moody’s Rating and its Moody’s Default Probability Rating (for purposes of clarification, if the Moody’s Rating is higher than the Moody’s Default Probability Rating, the rating subcategories difference will be positive and if it is lower, negative):

Number of Moody’s Ratings Subcategories Difference
Between the Moody’s Rating and the Moody’s Default
Probability Rating	  	Moody’s First Lien
Loan Assets (%)	 	  	Moody’s Non-First
Lien Loan Asset (%)	 	  	Bonds and all other
Loan Assets
(%)	 	
+2 or more	  	 	60.0	 	  	 	35.0	 	  	 	35.0	 	
+1	  	 	50.0	 	  	 	30.0	 	  	 	30.0	 	
0	  	 	45.0/50.0	1 	  	 	25.0	 	  	 	25.0	 	
-1	  	 	40.0	 	  	 	10.0	 	  	 	10.0	 	
-2	  	 	30.0	 	  	 	5.0	 	  	 	5.0	 	
-3 or less	  	 	20.0	 	  	 	0.0	 	  	 	0.0	 	
or	  	 	 	 	  	 	 	 	  	 	 	 	
(c)(mmm) if the Loan Asset is a DIP Loan Asset (other than a DIP Loan Asset which has been specifically assigned a recovery rate by Moody’s), 50%.
 
1 	If such Loan Asset is an Initial Unrated Loan Asset, 50.0%. For all other Loan Assets, 45.0%	

“Moody’s RiskCalc Calculation” means, for purposes of the determination of the Moody’s Derived Rating (to the extent necessary in accordance with the definition of “Assigned Moody’s Rating” or clause (e) of the definition of “Moody’s Derived Rating”) and the determination of the Moody’s Recovery Rate (to the extent necessary in accordance with clause (a) of the definition of “Moody’s Recovery Rate”), the calculation made as follows:
(a)(nnn) For purposes of this calculation, the following terms have the meanings provided below.
“.EDF” means, with respect to any Loan Asset, the lowest 5 year expected default frequency for such Loan Asset as determined by running the current version Moody’s RiskCalc in both the Financial Statement Only (FSO) and the Credit Cycle Adjusted (CAA) modes.
“Pre Qualifying Conditions” means, with respect to any Loan Asset, conditions that will be satisfied if the Obligor with respect to the applicable Loan Asset satisfies the following criteria:
(a) the independent accountants of such Obligor shall have issued an unqualified audit opinion with respect to the most recent fiscal year financial statements, including no explanatory paragraph addressing “going concern” or other issues;
(b) the Obligor’s EBITDA is equal to or greater than U.S.$5,000,000;
(c) the Obligor’s annual sales are equal to or greater than U.S.$10,000,000;
(d) the Obligor’s book assets are equal to or greater than U.S.$10,000,000;
(e) the Obligor represents not more than 4.0% of the Concentration Test Amount;
(f) the Obligor is a private company with no public rating from Moody’s;
(g) for the current and prior fiscal year, such Obligor’s:
(i) EBIT/interest expense ratio is greater than 1.0:1.0 and 1.25:1.00 with respect to retail (adjusted for rent expense);
(ii) debt/EBITDA ratio is less than 6.0:1.0; provided that the debt/EBITDA ratio is less than 8.0:1.0 for any Loan Assets with respect to the following Moody’s Industry Classification Groups: (A) Telecommunications, (B) Printing and Publishing or (C) Broadcasting and Entertainment;
(h) no greater than 25% of the company’s revenue is generated from any one customer of the Obligor; and
(i) the Obligor is a for profit operating company in any one of the Moody’s Industry Classification Groups with the exception of (i) Buildings and Real Estate, (ii) Finance, and (iii) Insurance.
(b)(ooo) The Servicer shall calculate the .EDF for each of the Loan Assets to be rated pursuant to this calculation. The Servicer shall also provide Moody’s with the .EDF and the information

necessary to calculate such .EDF upon request from Moody’s. Moody’s shall have the right (in its sole discretion) to (i) amend or modify any of the information utilized to calculate the .EDF and recalculate the .EDF based upon such revised information, in which case such .EDF shall be determined using the table in paragraph (c) below in order to determine the applicable Moody’s Derived Rating, or (ii) have a Moody’s credit analyst provide a credit estimate for any Loan Asset, in which case such credit estimate provided by such credit analyst shall be the applicable Moody’s Derived Rating.
(c)(ppp) As of any date of determination, the Moody’s Derived Rating for each Loan Asset that satisfies the Pre Qualifying Conditions shall be the lower of (i) the Servicer’s internal rating or (ii) the Maximum Corporate Family Rating (in the case of a senior secured loan) or the Maximum Senior Unsecured Rating (in the case of a senior unsecured loan) based on the .EDF for such Loan Asset, in each case determined in accordance with the table below (and the Servicer shall give the Administrative Agent notice of such Moody’s Derived Rating):

Lowest .EDF	 	Maximum Corporate Family Rating	 	Maximum Senior Unsecured Rating	
 	 	 	
less than or equal to .baa	 	Ba3	 	Ba3	
.ba1	 	B1	 	B1	
.ba2, .ba3 or .b1	 	B2	 	B2	
.b2 or .b3	 	B3	 	B3	
.caa	 	Caa1	 	Caa1	
provided that the Servicer may assign a lower rating to a Loan Asset if it so determines in its reasonable business judgment.
(d)(qqq) As of any date of determination, the Moody’s Recovery Rate for each Loan Asset that meets the Pre Qualifying Conditions shall be the lower of (i) the Servicer’s internal recovery rate or (ii) the recovery rate as determined in accordance with the table below (and the Servicer shall give the Administrative Agent notice of such Moody’s Recovery Rate):

Type of Loan	  	Moody’s Recovery Rate	 	
 	 	
Senior secured, first priority and first out	  	 	50	% 	
Second lien, first lien and last out, all other senior secured	  	 	25	% 	
Senior unsecured	  	 	25	% 	
All other loans	  	 	25	% 	
provided that Moody’s shall have the right (in its sole discretion) to issue a recovery rate assigned by one of its credit analysts, in which case such recovery rate provided by such credit analyst shall be the applicable Moody’s Recovery Rate.

Annex F
Internal Valuation Protocol
SEE ATTACHED

Exhibit (n)(1)
Consent of Independent Registered Public Accounting Firm
We consent to the references to our firm under the captions “Senior Securities” and “Independent Registered Public Accounting Firm” and to the use of our reports dated (i) March 21, 2017, with respect to the consolidated financial statements of TCG BDC, Inc. as of December 31, 2016 and 2015 and for each of the three years in the period ended December 31, 2016, and (ii) March 21, 2017, with respect to the senior securities table as of December 31, 2016, 2015, 2014, and 2013, included in Pre-Effective Amendment No. 2 to the Registration Statement (Form N-2 No. 333-218114) and related Prospectus of TCG BDC, Inc. for the registration of common stock.
/s/ Ernst & Young LLP
New York, NY
June 2, 2017