Quarterly Report (10-q)

Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o

Smaller reporting company o

(Do not check if a smaller reporting company)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)



	þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
		OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015



	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
		OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 1-35999

Fifth Street Senior Floating Rate Corp.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



DELAWARE (State or jurisdiction of incorporation or organization)		61-1713295 (I.R.S. Employer Identification No.)

777 West Putnam Avenue, 3rd Floor Greenwich, CT (Address of principal executive office)		06830 (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:

(203) 681-3600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ¨ NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) YES ¨ NO þ

The registrant had 29,466,768 shares of common stock outstanding as of August 7, 2015.

TABLE OF CONTENTS




		PART I — FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (unaudited):
		Consolidated Statements of Assets and Liabilities as of June 30, 2015 and September 30, 2014	1
		Consolidated Statements of Operations for the three and nine months ended June 30, 2015 and June 30, 2014	2
		Consolidated Statements of Changes in Net Assets for the nine months ended June 30, 2015 and June 30, 2014	3
		Consolidated Statements of Cash Flows for the nine months ended June 30, 2015 and June 30, 2014	4
		Consolidated Schedule of Investments as of June 30, 2015	5
		Consolidated Schedule of Investments as of September 30, 2014	11
		Notes to Consolidated Financial Statements	16
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		42
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		62
Item 4.	Controls and Procedures		64
		PART II — OTHER INFORMATION
Item 1.	Legal Proceedings		64
Item 1A.	Risk Factors		64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		65
Item 5.	Other Information		65
Item 6.	Exhibits		66
Signatures

PART I — FINANCIAL INFORMATION



Item 1.	Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Statements of Assets and Liabilities

(unaudited)



	June 30, 2015			September 30, 2014
ASSETS
Investments at fair value:
Control investments (cost June 30, 2015: $53,442,506; cost September 30, 2014: $0)	$	52,870,796		$	—
Non-control/Non-affiliate investments (cost June 30, 2015: $580,171,424; cost September 30, 2014: $299,997,247)	574,714,498			300,001,397
Total investments at fair value (cost June 30, 2015: $633,613,930; cost September 30, 2014: $299,997,247)	627,585,294			300,001,397
Cash and cash equivalents	66,443,565			107,429,760
Restricted cash	3,459,896			2,127,405
Interest, dividends and fees receivable	3,242,254			1,120,010
Due from portfolio companies	509,899			200,840
Receivables from unsettled transactions	43,240,396			—
Deferred financing costs	5,203,456			1,625,932
Other assets	164,009			—
Total assets	$	749,848,769		$	412,505,344
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable, accrued expenses and other liabilities	$	1,938,070		$	1,213,683
Base management fee payable	1,594,864			475,437
Part I incentive fee payable	833,515			926,180
Part II incentive fee payable	—			54,826
Due to FSC CT	236,863			239,617
Interest payable	575,853			205,646
Distributions payable	2,946,677			8,840,030
Payables from unsettled transactions	74,029,636			27,863,000
Credit facility payable	127,366,000			—
Notes payable	180,000,000			—
Total liabilities	389,521,478			39,818,419
Commitments and contingencies (Note 3)
Net assets:
Common stock, $0.01 par value, 150,000,000 shares authorized; 29,466,768 shares issued and outstanding at June 30, 2015 and September 30, 2014	294,668			294,668
Additional paid-in-capital	374,101,816			374,101,816
Net unrealized appreciation (depreciation) on investments	(6,028,636		)	4,150
Net realized loss on investments	(3,272,536		)	—
Accumulated overdistributed net investment income	(4,768,021		)	(1,713,709		)
Total net assets (equivalent to $12.23 and $12.65 per common share at June 30, 2015 and September 30, 2014, respectively) (Note 12)	360,327,291			372,686,925
Total liabilities and net assets	$	749,848,769		$	412,505,344

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Statements of Operations

(unaudited)



	Three months ended June 30, 2015			Three months ended June 30, 2014			Nine months ended June 30, 2015			Nine months ended June 30, 2014
Interest income:
Control investments	$	754,216		$	—		$	754,216		$	—
Non-control/Non-affiliate investments	9,862,889			2,979,029			27,368,097			6,849,976
Interest on cash and cash equivalents	7,042			353			16,227			2,570
Total interest income	10,624,147			2,979,382			28,138,540			6,852,546
Fee income:
Non-control/Non-affiliate investments	3,008,068			866,030			13,245,872			2,705,129
Total fee income	3,008,068			866,030			13,245,872			2,705,129
Dividend and other income:
Control investments	74,375			—			74,375			—
Total dividend and other income	74,375			—			74,375			—
Total investment income	13,706,590			3,845,412			41,458,787			9,557,675
Expenses:
Base management fee	1,594,872			485,544			4,274,950			1,127,180
Part I incentive fee	833,515			349,835			4,587,918			630,432
Part II incentive fee	—			—			(54,826		)	—
Professional fees	259,933			247,967			758,428			573,667
Board of Directors fees	80,250			31,750			264,550			129,250
Interest expense	4,162,905			537,006			6,754,197			1,112,999
Administrator expense	152,647			142,965			576,344			361,589
General and administrative expenses	283,556			187,833			831,447			465,862
Total expenses	7,367,678			1,982,900			17,993,008			4,400,979
Net investment income	6,338,912			1,862,512			23,465,779			5,156,696
Unrealized appreciation (depreciation) on investments:
Control investments	(571,710		)	—			(571,710		)	—
Non-control/Non-affiliate investments	(1,909,861		)	(13,387		)	(5,461,076		)	(626,766		)
Net unrealized depreciation on investments	(2,481,571		)	(13,387		)	(6,032,786		)	(626,766		)
Realized gain (loss) on investments:
Non-control/Non-affiliate investments	(1,716,501		)	(56,332		)	(3,272,536		)	198,481
Net realized gain (loss) on investments	(1,716,501		)	(56,332		)	(3,272,536		)	198,481
Net increase in net assets resulting from operations	$	2,140,840		$	1,792,793		$	14,160,457		$	4,728,411
Net investment income per common share — basic and diluted	$	0.22		$	0.28		$	0.80		$	0.77
Earnings per common share — basic and diluted	$	0.07		$	0.27		$	0.48		$	0.71
Weighted average common shares outstanding — basic and diluted	29,466,768			6,666,768			29,466,768			6,666,768
Distributions per common share	$	0.30		$	0.27		$	0.90		$	0.71

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Statements of Changes in Net Assets

(unaudited)



	Nine months ended June 30, 2015			Nine months ended June 30, 2014
Operations:
Net investment income	$	23,465,779		$	5,156,696
Net unrealized depreciation on investments	(6,032,786		)	(626,766		)
Net realized gain (loss) on investments	(3,272,536		)	198,481
Net increase in net assets resulting from operations	14,160,457			4,728,411
Stockholder transactions:
Distributions to stockholders	(26,520,091		)	(4,733,405		)
Net decrease in net assets from stockholder transactions	(26,520,091		)	(4,733,405		)
Capital share transactions:
Issuance of common stock under dividend reinvestment plan	792,002			15,022
Repurchases of common stock under dividend reinvestment plan	(792,002		)	(15,022		)
Net decrease in net assets from capital share transactions	—			—
Total decrease in net assets	(12,359,634		)	(4,994		)
Net assets at beginning of period	372,686,925			100,842,878
Net assets at end of period	$	360,327,291		$	100,837,884
Net asset value per common share	$	12.23		$	15.13
Common shares outstanding at end of period	29,466,768			6,666,768

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Statements of Cash Flows

(unaudited)



	Nine months ended June 30, 2015			Nine months ended June 30, 2014
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	14,160,457		$	4,728,411
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Net unrealized depreciation on investments	6,032,786			626,766
Net realized (gains) losses on investments	3,272,536			(198,481		)
Recognition of fee income	(13,245,872		)	—
Accretion of original issue discount on investments	(196,574		)	(29,897		)
Amortization of deferred financing costs	2,566,792			153,029
Changes in operating assets and liabilities:
Fee income received	13,368,856			—
Increase in restricted cash	(1,332,491		)	(2,257,512		)
Increase in interest and fees receivable	(2,122,244		)	(333,131		)
Increase in due from portfolio companies	(309,059		)	(21,035		)
Increase in receivables from unsettled transactions	(43,240,396		)	(7,002,881		)
Increase in other assets	(164,009		)	(287,503		)
Increase in accounts payable, accrued expenses and other liabilities	724,387			716,015
Increase in base management fee payable	1,119,427			424,165
Increase (decrease) in incentive fee payable	(147,491		)	349,835
Increase (decrease) in due to FSC CT	(2,754		)	137,896
Increase in interest payable	370,207			333,568
Increase in payables from unsettled transactions	46,166,636			13,630,000
Purchases of investments and net revolver activity	(842,624,902		)	(264,234,393		)
Principal payments applied to investments (scheduled payments)	8,154,900			3,934,589
Principal payments applied to investments (payoffs)	46,238,532			14,937,659
Proceeds from the sale of investments	451,415,841			102,093,236
Net cash used in operating activities	(309,794,435		)	(132,299,664		)
Cash flows from financing activities:
Distributions paid in cash	(31,567,812		)	(2,918,356		)
Borrowings under credit facilities	419,216,000			99,846,610
Repayments of borrowings under credit facilities	(291,850,000		)	(10,019,700		)
Proceeds from notes payable	180,000,000			—
Repurchases of common stock under dividend reinvestment plan	(845,632		)	(15,022		)
Deferred financing costs paid	(6,144,316		)	(1,836,347		)
Net cash provided by financing activities	268,808,240			85,057,185
Net decrease in cash and cash equivalents	(40,986,195		)	(47,242,479		)
Cash and cash equivalents, beginning of period	107,429,760			52,346,831
Cash and cash equivalents, end of period	$	66,443,565		$	5,104,352
Supplemental information:
Cash paid for interest	$	3,898,696		$	649,389
Non-cash financing activities:
Issuance of shares of common stock under dividend reinvestment plan	$	792,002		$	15,022

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

June 30, 2015

(unaudited)



Portfolio Company/Type of Investment (1)(2)	Industry	Principal (5)		Cost		Fair Value
Control Investments (3)
FSFR Glick JV LLC	Multi-sector holdings
Subordinated Note, LIBOR+8% cash due 10/20/2021 (7)(8)(12)(13)		$	48,098,255	$	48,098,255	$	48,055,018
87.5% equity interest (7)				5,344,251		4,815,778
				53,442,506		52,870,796
Total Control Investments (14.7% of net assets)				$	53,442,506	$	52,870,796
Affiliate Investments (4)				$	—	$	—
Non-Control/Non-Affiliate Investments (6)
Triple Point Group Holdings, Inc.	Application software
First Lien Revolver, LIBOR+4.25% (1% floor) cash due 7/10/2018 (8)				$	—	$	—
				—		—
Blackhawk Specialty Tools, LLC	Oil & gas equipment & services
First Lien Term Loan, LIBOR+5.25% (1.25% floor) cash due 8/1/2019 (8)(10)		$	4,562,495	4,562,495		4,425,619
				4,562,495		4,425,619
New Trident Holdcorp, Inc.	Healthcare services
First Lien Term Loan B, LIBOR+5.25% (1.25% floor) cash due 7/31/2019 (8)(10)(14)		11,884,936		11,744,379		11,548,176
Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 7/31/2020 (8)		1,000,000		1,000,000		972,500
				12,744,379		12,520,676
Landslide Holdings, Inc.	Application software
First Lien Revolver, LIBOR+4.25% (1% floor) cash due 8/9/2018 (8)				—		—
				—		—
Smile Brands Group Inc.	Healthcare services
First Lien Term Loan B, LIBOR+6.25% (1.25% floor) cash due 8/16/2019 (8)(14)		4,912,500		4,912,500		3,389,625
				4,912,500		3,389,625
NXT Capital, LLC	Diversified capital markets
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 9/4/2018 (8)(14)		8,832,256		8,832,256		8,876,418
				8,832,256		8,876,418
Vitera Healthcare Solutions, LLC	Healthcare technology
First Lien Term Loan, LIBOR+5% (1% floor) cash due 11/4/2020 (8)(14)		4,925,000		4,925,000		4,943,469
				4,925,000		4,943,469
The Active Network, Inc.	Internet software & services
Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 11/15/2021 (8)(14)		2,400,000		2,305,247		2,304,000
				2,305,247		2,304,000
Accruent, LLC	Internet software & services
First Lien Term Loan, LIBOR+4.5% (1.25% floor) cash due 11/25/2019 (8)(9)(10)(14)		19,922,249		19,922,249		19,632,317
				19,922,249		19,632,317
Pacific Architects and Engineers Incorporated	Diversified support services
First Lien Term Loan B, LIBOR+6.25% (1% floor) cash due 7/17/2018 (8)(14)		3,447,500		3,447,500		3,395,788
				3,447,500		3,395,788
Survey Sampling International, LLC	Research & consulting services
First Lien Term Loan, LIBOR+5.0% (1% floor) cash due 12/16/2020 (8)(10)(14)		8,400,000		8,400,000		8,415,750
Second Lien Term Loan, LIBOR+9% (1% floor) cash due 12/16/2021 (8)		1,000,000		1,000,000		995,000
				9,400,000		9,410,750

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

June 30, 2015

(unaudited)



Portfolio Company/Type of Investment (1)(2)	Industry	Principal (5)		Cost		Fair Value
Answers Corporation	Internet software & services
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 10/1/2021 (8)(10)(14)		$	11,940,000	$	11,569,198	$	10,288,280
Second Lien Term Loan, LIBOR+9% (1% floor) cash due 10/3/2022 (8)		8,000,000		7,818,947		6,240,000
				19,388,145		16,528,280
Maxor National Pharmacy Services, LLC	Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% (1.25% floor) cash due 1/31/2020 (8)(10)(14)		9,850,000		9,850,000		9,855,899
				9,850,000		9,855,899
NextCare, Inc.	Healthcare services
Senior Term Loan, LIBOR+5.75% (1.25% floor) cash due 10/10/2017 (8)(14)		5,315,998		5,315,998		5,310,067
Acquisition Line, LIBOR+5.75% (1.25% floor) cash due 10/10/2017 (8)(10)		1,740,240		1,740,240		1,740,240
Senior Revolver, LIBOR+5.75% (1.25% floor) cash due 10/10/2017 (8)				—		—
				7,056,238		7,050,307
J.A. Cosmetics Holdings, Inc.	Personal products
First Lien Term Loan, LIBOR+5% (1.25% floor) cash due 1/31/2019 (8)(14)		4,843,750		4,843,750		4,849,805
				4,843,750		4,849,805
B&H Education, Inc.	Education services
First Lien Term Loan, LIBOR+5.25% (1.5% floor) cash due 5/3/2015 (8)(15)		5,686,571		5,694,726		5,242,919
				5,694,726		5,242,919
Aptean, Inc.	Application software
Second Lien Term Loan, LIBOR+7.5% (1% floor) cash due 2/24/2021 (8)		1,250,000		1,250,000		1,210,419
				1,250,000		1,210,419
Stratus Technologies, Inc.	Computer hardware
First Lien Term Loan, LIBOR+5% (1% floor) cash due 4/28/2021 (8)(14)		4,194,444		4,194,444		4,185,699
				4,194,444		4,185,699
TravelCLICK, Inc.	Internet software & services
Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/8/2021 (8)(14)		3,380,000		3,370,130		3,363,100
				3,370,130		3,363,100
Language Line, LLC	Integrated telecommunication services
First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 7/7/2021 (8)(10)(14)		25,000,000		25,000,000		25,000,000
Second Lien Term Loan, LIBOR+9.75% (1% floor) cash due 7/7/2021 (8)(14)		8,000,000		8,000,000		7,993,320
				33,000,000		32,993,320
GTCR Valor Companies, Inc.	Advertising
First Lien Term Loan, LIBOR+5% (1% floor) cash due 5/30/2021 (8)(10)(14)		13,490,003		13,490,003		13,498,435
				13,490,003		13,498,435
ConvergeOne Holdings Corp.	Integrated telecommunication services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 6/17/2020 (8)(14)		5,411,335		5,411,335		5,404,598
				5,411,335		5,404,598
Verdesian Life Sciences, LLC	Fertilizers & agricultural chemicals
First Lien Term Loan, LIBOR+5% (1% floor) cash due 7/1/2020 (8)(14)		3,804,959		3,804,959		3,814,471
				3,804,959		3,814,471

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

June 30, 2015

(unaudited)



Portfolio Company/Type of Investment (1)(2)	Industry	Principal (5)		Cost			Fair Value
PR Wireless, Inc.	Wireless telecommunication services
First Lien Term Loan, LIBOR+9% (1% floor) cash due 6/27/2020 (7)(8)		$	5,911,410	$	5,799,164		$	5,645,397
35.5263 Common Stock Warrants (7)				—			167,990
				5,799,164			5,813,387
TV Borrower US, LLC	Integrated telecommunication services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 1/8/2021 (7)(8)(14)		6,947,500		6,947,500			6,956,184
Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 7/8/2021 (7)(8)(14)		3,000,000		2,970,448			2,962,500
				9,917,948			9,918,684
American Dental Partners, Inc.	Healthcare services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 8/29/2021 (8)(10)		5,955,000		5,955,000			5,955,000
				5,955,000			5,955,000
BeyondTrust Software, Inc.	Application software
First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(10)(14)		19,922,249		19,915,038			19,900,365
First Lien Revolver, LIBOR+7% (1% floor) cash due 9/25/2019 (8)(11)				(601		)	—
500,000 Class A membership interest in BeyondTrust Holdings LLC				500,000			636,344
				20,414,437			20,536,709
Reliant Hospital Partners, LLC	Healthcare services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 10/1/2019 (8)(10)(14)		7,406,250		7,406,250			7,332,188
				7,406,250			7,332,188
Hill International, Inc.	Construction and engineering
First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 9/26/2020 (8)(14)		6,054,250		6,054,250			5,990,876
				6,054,250			5,990,876
Teaching Strategies, LLC	Education services
First Lien Term Loan, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (8)(10)(14)		16,785,519		16,774,744			16,839,269
First Lien Revolver, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (8)		1,200,000		1,199,561			1,200,000
				17,974,305			18,039,269
Dynatect Group Holdings, Inc.	Industrial machinery
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2020 (8)(10)		3,980,000		3,980,000			3,968,873
First Lien Delayed Draw Term Loan, LIBOR+4.5% (1% floor) cash due 9/30/2020 (8)(10)				—			—
				3,980,000			3,968,873
Idera, Inc.	Internet software & services
First Lien Term Loan, LIBOR+5.5% (0.5% floor) cash due 10/5/2020 (8)(10)(14)		16,893,750		16,880,984			16,756,196
First Lien Revolver, LIBOR+5.5% (0.5% floor) cash due 10/5/2019 (8)(11)				(511		)	—
				16,880,473			16,756,196
Central Security Group, Inc.	Specialized consumer services
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 11/6/2020 (8)(10)		2,572,038		2,572,038			2,565,607
				2,572,038			2,565,607
Sutherland Global Services, Inc.	Diversified support services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 4/23/2021 (8)(14)		6,749,000		6,749,000			6,796,783
				6,749,000			6,796,783

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

June 30, 2015

(unaudited)



Portfolio Company/Type of Investment (1)(2)	Industry	Principal (5)		Cost			Fair Value
Kellermeyer Bergensons Services, LLC	Diversified support services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/29/2021 (8)(14)		$	5,373,000	$	5,373,000		$	5,373,000
Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 4/29/2022 (8)(14)		410,000		410,000			410,000
				5,783,000			5,783,000
GOBP Holdings Inc.	Food retail
Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 10/21/2022 (8)(14)		6,400,000		6,367,133			6,384,000
				6,367,133			6,384,000
NAVEX Global, Inc.	Internet software & services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 11/19/2021 (8)(14)		6,819,577		6,819,577			6,802,528
Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 11/18/2022 (8)		1,500,000		1,500,000			1,485,000
				8,319,577			8,287,528
Executive Consulting Group, LLC	Healthcare services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2019 (8)(14)		7,000,000		7,000,000			6,995,870
Delayed Draw Term Loan, LIBOR+4.75% (1% floor) cash due 11/21/2017 (8)(10)				—			—
				7,000,000			6,995,870
TIBCO Software, Inc.	Internet software & services
First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 12/4/2020 (8)(10)		8,019,900		7,790,567			8,029,925
First Lien Revolver, LIBOR+4% cash due 11/25/2020 (8)				—			—
				7,790,567			8,029,925
Metamorph US 3, LLC	Internet software & services
First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 12/1/2020 (8)(10)(14)		17,420,991		17,401,824			17,171,264
First Lien Revolver, LIBOR+5.5% (1% floor) cash due 12/1/2020 (8)(11)				(2,149		)	—
				17,399,675			17,171,264
Compuware Corporation	Internet software & services
First Lien Term Loan B1, LIBOR+5.25% (1% floor) cash due 12/11/2019 (8)(10)(14)		8,361,551		8,096,551			8,246,580
First Lien Term Loan B2, LIBOR+5.25% (1% floor) cash due 12/10/2021 (8)(10)		6,467,500		6,348,333			6,332,103
				14,444,884			14,578,683
AMAG Pharmaceuticals, Inc.	Pharmaceuticals
First Lien Term Loan, LIBOR+6.25% (1% floor) cash due 11/12/2020 (8)(10)(14)		14,250,000		14,250,000			14,428,124
				14,250,000			14,428,124
Novetta Solutions, LLC	Diversified support services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 10/2/2020 (8)(14)		5,756,500		5,756,500			5,756,500
				5,756,500			5,756,500
AF Borrower, LLC	IT consulting & other services
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 12/15/2021 (8)(10)		8,279,250		8,279,250			8,302,556
				8,279,250			8,302,556
Ameritox Ltd.	Healthcare services
First Lien Term Loan, LIBOR+7.5% (1% floor) cash due 6/23/2019 (8)(10)(14)		16,893,082		16,886,415			16,679,003
First Lien Revolver, LIBOR+7.5% (1% floor) cash due 6/23/2019 (8)		666,667		666,190			666,667
				17,552,605			17,345,670
TrialCard Incorporated	Healthcare services
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 12/31/2019 (8)(10)(14)		10,789,682		10,776,573			10,688,371
First Lien Revolver, LIBOR+5.25% (1% floor) cash due 12/31/2019 (8)(11)				(936		)	—
				10,775,637			10,688,371
Motion Recruitment Partners LLC	Diversified support services
First Lien Term Loan, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(10)(14)		15,307,500		15,288,671			15,132,202
First Lien Revolver, LIBOR+6% (1% floor) cash due 2/13/2020 (8)(11)				(1,680		)	—
				15,286,991			15,132,202

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

June 30, 2015

(unaudited)



Portfolio Company/Type of Investment (1)(2)	Industry	Principal (5)		Cost			Fair Value
PowerPlan, Inc.	Internet software & services
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 2/23/2022 (8)(10)(14)		$	13,668,333	$	13,668,333		$	13,666,393
First Lien Revolver, LIBOR+5.25% (1% floor) cash due 2/23/2021 (8)				—			—
				13,668,333			13,666,393
Riverbed Technology, Inc.	Application software
First Lien Term Loan, LIBOR+5% (1% floor) cash due 2/25/2022 (8)(14)		7,481,250		7,481,250			7,568,220
				7,481,250			7,568,220
Digital River, Inc.	Internet software & services
First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 2/12/2021 (8)(10) (14)		10,000,000		10,000,000			10,100,000
				10,000,000			10,100,000
Curo Health Services Holdings, Inc.	Healthcare services
First Lien Term Loan B, LIBOR+5.5% (1% floor) cash due 2/5/2022 (8)(10)		6,982,500		6,982,500			7,047,996
				6,982,500			7,047,996
Research Now Group, Inc.	Data processing & outsourced services
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 3/18/2021 (8)(14)		3,750,000		3,750,000			3,759,375
Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 3/18/2022 (8)		4,000,000		4,000,000			4,010,000
				7,750,000			7,769,375
Fineline Technologies, Inc.	Electronic equipment & instruments
First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 5/6/2017 (8)(14)		13,860,000		13,860,000			13,860,000
				13,860,000			13,860,000
My Alarm Center, LLC	Security & alarm services
First Lien Term Loan A, LIBOR+8% (1% floor) cash due 1/9/2018 (8)(14)		16,047,619		16,047,619			16,047,619
First Lien Term Loan B, LIBOR+8% (1% floor) cash due 1/9/2018 (8)		919,168		919,168			919,168
First Lien Term Loan C, LIBOR+8% (1% floor) cash due 1/9/2018 (8)		222,772		222,772			222,772
First Lien Term Revolver, LIBOR+8% (1% floor) cash due 1/9/2018 (8)		113,333		113,333			113,333
				17,302,892			17,302,892
Legalzoom.com, Inc.	Specialized consumer services
First Lien Term Loan, LIBOR+7% (1% floor) cash due 5/13/2020 (8)(10)(14)		19,950,000		19,913,663			19,950,000
First Lien Revolver, LIBOR+7% (1% floor) cash due 5/13/2020 (8)(11)		—		(3,158		)	—
				19,910,505			19,950,000
TWCC Holding Corp.	Specialized consumer services
First Lien Term Loan B1, LIBOR+5% (0.75% floor) cash due 2/11/2020 (8)(14)		6,384,000		6,384,000			6,314,159
				6,384,000			6,314,159
Raley's	Food retail
First Lien Term Loan, LIBOR+6.25% (1% floor) cash due 5/18/2022 (8)(14)		4,100,000		4,100,000			4,092,313
				4,100,000			4,092,313
Retail Solutions Group, Inc.	Data processing & outsourced services
First Lien Term Loan, LIBOR+5.25% (0.75% floor) cash due 6/16/2022 (8)(14)		14,000,000		14,000,000			13,965,000
				14,000,000			13,965,000
Auction.com, LLC	Internet software & services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 5/11/2019 (8)		3,990,000		3,990,000			3,970,050
				3,990,000			3,970,050
Protection One Alarm Monitoring	Security & alarm services
First Lien Term Loan, LIBOR+4% (1% floor) cash due 6/19/2021 (8)		1,350,000		1,350,000			1,353,375
Second Lien Term Loan, LIBOR+8.75% (1% floor) cash due 6/19/2022 (8)		600,000		600,000			592,500
				1,950,000			1,945,875
All Web Leads, Inc.	Advertising
First Lien Term Loan, LIBOR+6.5% (1% floor) cash due 6/30/2020 (8)(10)(14)		27,709,046		27,681,910			27,709,046
First Lien Revolver, LIBOR+6.5% (1% floor) cash due 6/30/2020 (8)(11)				(4,006		)	—
				27,677,904			27,709,046
Total Non-Control/Non-Affiliate Investments (159.5% of net assets)				$	580,171,424		$	574,714,498
Total Portfolio Investments (174.2% of net assets)				$	633,613,930		$	627,585,294

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

June 30, 2015

(unaudited)


(1)	All debt investments are income producing unless otherwise noted. Equity is non-income producing unless otherwise noted.


(2)	See Note 3 to the Consolidated Financial Statements for portfolio composition by geographic region.


(3)	Control Investments are defined by the Investment Company Act of 1940 ("1940 Act") as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.


(4)	Affiliate Investments are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.


(5)	Principal amount is net of repayments, if any.


(6)	Non-Control/Non-Affiliate Investments are defined by the 1940 Act as investments that are neither Control Investments nor Affiliate Investments.


(7)	Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act.

(8)

The principal balance outstanding for all floating rate loans is indexed to LIBOR and an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR based on each respective credit agreement.

(9)

Interest rates have been adjusted on certain term loans from the stated rates in the original credit agreement as shown in the Consolidated Schedule of Investments. These rate adjustments are temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements, or permanent in nature per loan amendment or waiver documents. The table below summarizes these rate adjustments by portfolio company:


(10)	Investment pledged as collateral under the Company's credit facility, in whole or in part.


(11)	Investment has undrawn commitments and a negative cost basis as a result of unamortized fees. Unamortized fees are classified as unearned income which reduces cost basis.


(12)	In addition to the interest earned based on the stated contractual interest rate of this security, the subordinated notes entitle us to receive a portion of the excess cash flow from the FSFR Glick JV LLC's loan portfolio, which may result in a return to the BDC greater than the contractual stated interest rate.

(13)

As defined in the 1940 Act, the Company is deemed to be both an "Affiliated Person" of and to "Control" this portfolio company as the Company owns more than 25% of the portfolio company's outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). See Schedule 12-14 in the accompanying notes to the consolidated financial statements for transactions during the nine months ended June 30, 2015 in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to control.


(14)	Investment pledged as collateral under the Company's 2015 Debt Securitization (as defined in Note 6 — Borrowings), in whole or in part.


(15)	The Company is currently in negotiations with the borrower to extend the maturity date on this loan.

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

September 30, 2014



Portfolio Company/Type of Investment (1)(2)(8)	Industry	Principal (5)		Cost		Fair Value
Control Investments (3)				$	—	$	—
Affiliate Investments (4)				$	—	$	—
Non-Control/Non-Affiliate Investments (6)
Triple Point Group Holdings, Inc.	Application software
First Lien Term Loan, LIBOR+4.25% (1% floor) cash due 7/10/2020 (8)(10)		$	2,181,723	$	2,079,045	$	2,001,494
First Lien Revolver, LIBOR+4.25% (1% floor) cash due 7/10/2018 (8)				—		—
				2,079,045		2,001,494
BioScrip, Inc.	Healthcare services
First Lien Term Loan B, LIBOR+5.25% (1.25% floor) cash due 7/31/2020 (8)(10)		1,670,679		1,670,678		1,671,520
				1,670,678		1,671,520
Blackhawk Specialty Tools, LLC	Oil & gas equipment & services
First Lien Term Loan, LIBOR+5.25% (1.25% floor) cash due 8/1/2019 (8)(10)		4,749,995		4,749,995		4,708,121
				4,749,995		4,708,121
New Trident Holdcorp, Inc.	Healthcare services
First Lien Term Loan B, LIBOR+5.25% (1.25% floor) cash due 7/31/2019 (8)(10)		4,950,000		4,950,000		4,959,019
Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 7/31/2020 (8)		1,000,000		1,000,000		1,003,056
				5,950,000		5,962,075
Landslide Holdings, Inc.	Application software
First Lien Revolver, L+4.25% (1% floor) cash due 8/9/2018				—		—
				—		—
Smile Brands Group Inc.	Healthcare services
First Lien Term Loan B, LIBOR+6.25% (1.25% floor) cash due 8/16/2019 (8)(10)		4,950,000		4,950,000		4,855,860
				4,950,000		4,855,860
NXT Capital, LLC	Diversified capital markets
First Lien Term Loan, LIBOR+5.25% (1% floor) cash due 9/4/2018 (8)(10)		5,447,487		5,447,487		5,459,605
				5,447,487		5,459,605
Vitera Healthcare Solutions, LLC	Healthcare technology
First Lien Term Loan, LIBOR+5% (1% floor) cash due 11/4/2020 (8)(10)		4,962,500		4,962,500		4,980,474
Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 11/4/2021 (8)		3,000,000		3,000,000		3,030,948
				7,962,500		8,011,422
The Active Network, Inc.	Internet software & services
Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 11/15/2021 (8)		2,400,000		2,400,000		2,401,616
				2,400,000		2,401,616
Accruent, LLC	Internet software & services
First Lien Term Loan, LIBOR+4.5% (1.25% floor) cash due 11/25/2019 (8)(10)		6,461,732		6,461,732		6,366,822
				6,461,732		6,366,822
Travel Leaders Group, LLC	Hotels, resorts & cruise lines
First Lien Term Loan B, LIBOR+6% (1% floor) cash due 12/5/2018 (8)(10)		9,625,000		9,625,000		9,592,523
				9,625,000		9,592,523
Pacific Architects and Engineers Incorporated	Diversified support services
First Lien Term Loan B, LIBOR+6.25% (1% floor) cash due 7/17/2018 (8)(10)		3,473,750		3,473,750		3,461,756
				3,473,750		3,461,756
Power Products, LLC	Electrical components & equipment
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 12/13/2019 (8)(10)		4,975,000		4,975,000		4,860,113
				4,975,000		4,860,113
Survey Sampling International, LLC	Research & consulting services
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 12/12/2019 (8)(10)		4,937,500		4,937,500		4,941,631
				4,937,500		4,941,631
Therakos, Inc.	Healthcare services
First Lien Term Loan, LIBOR+6.25% (1.25% floor) cash due 12/27/2017 (8)(10)		1,946,028		1,946,028		1,927,011
				1,946,028		1,927,011

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

September 30, 2014



Portfolio Company/Type of Investment (1)(2)(8)	Industry	Principal (5)		Cost		Fair Value
Answers Corporation	Internet software & services
First Lien Term Loan, LIBOR+4.5% (3.25% floor) cash due 12/20/2018 (8)(10)		$	4,812,500	$	4,812,500	$	4,871,425
Second Lien Term Loan, LIBOR+10% (1% floor) cash due 6/19/2020 (8)(10)		2,000,000		2,000,000		2,046,110
				6,812,500		6,917,535
Maxor National Pharmacy Services, LLC	Pharmaceuticals
First Lien Term Loan, LIBOR+5.25% (1.25% floor) cash due 1/31/2020 (8)(10)		9,925,000		9,925,000		9,887,945
				9,925,000		9,887,945
NextCare, Inc.	Healthcare services
Senior Term Loan, LIBOR+5.75% (1.25% floor) cash due 10/10/2017 (8)(10)		5,384,152		5,384,152		5,396,673
Delayed Draw Term Loan, LIBOR+5.75% (1.25% floor) cash due 10/10/2017 (8)(10)				—		—
Senior Revolver, LIBOR+5.75% (1.25% floor) cash due 10/10/2017 (8)(10)		187,410		187,410		187,410
Acquisition Line, LIBOR+5.75% (1.25% floor) cash due 10/10/2017 (8)(10)		398,781		398,781		398,781
				5,970,343		5,982,864
J.A. Cosmetics Holdings, Inc.	Personal products
First Lien Term Loan, LIBOR+5% (1.25% floor) cash due 1/31/2019 (8)(10)		4,937,500		4,937,500		4,888,194
				4,937,500		4,888,194
Aegis Toxicology Sciences Corporation	Healthcare services
Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 8/24/2021 (8)		3,100,000		3,100,000		3,107,612
				3,100,000		3,107,612
B&H Education, Inc.	Education services
First Lien Term Loan, LIBOR+5.25% (1.5% floor) cash due 5/3/2015 (8)(10)		6,382,886		6,354,343		6,376,798
				6,354,343		6,376,798
Deluxe Entertainment Services Group Inc.	Movies & entertainment
First Lien Term Loan, LIBOR+5.5% (1% floor) cash due 2/28/2020 (8)(10)		4,672,320		4,483,834		4,640,481
				4,483,834		4,640,481
Aptean, Inc.	Application software
Second Lien Term Loan, LIBOR+7.5% (1% floor) cash due 2/24/2021 (8)		1,250,000		1,250,000		1,258,260
				1,250,000		1,258,260
Extreme Reach, Inc.	Advertising
First Lien Term Loan, LIBOR+5.75% (1% floor) cash due 1/24/2020 (8)(10)		5,432,000		5,432,000		5,473,100
				5,432,000		5,473,100
CM Delaware LLC	Advertising
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 3/18/2021 (7)(8)(9)(10)		2,189,000		2,189,000		2,189,687
				2,189,000		2,189,687
Stratus Technologies, Inc.	Computer hardware
First Lien Term Loan, LIBOR+5% (1% floor) cash due 4/28/2021 (8)(10)		4,604,167		4,604,167		4,605,770
				4,604,167		4,605,770
TravelCLICK, Inc.	Internet software & services
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 5/6/2019 (8)(10)		4,987,816		4,987,816		4,993,915
Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/8/2021 (8)		4,000,000		4,000,000		4,002,939
				8,987,816		8,996,854
LTI Flexible Products, Inc.	Electronic components
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 5/1/2021 (8)(10)		4,588,500		4,588,500		4,611,005
				4,588,500		4,611,005
Language Line, LLC	Integrated telecommunication services
Second Lien Term Loan, LIBOR+8.75% (1.75% floor) cash due 12/20/2016 (8)		4,400,000		4,394,774		4,403,484
				4,394,774		4,403,484
IPC Systems, Inc.	Alternative carriers
First Lien Term Loan, LIBOR+5% (1% floor) cash due 11/8/2020 (8)(10)		4,987,500		4,987,500		4,987,468
				4,987,500		4,987,468
LTCG Holdings Corp.	Healthcare services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 6/6/2020 (8)(10)		1,185,000		1,185,000		1,185,844
				1,185,000		1,185,844
GTCR Valor Companies, Inc.	Advertising
First Lien Term Loan, LIBOR+5% (1% floor) cash due 5/30/2021 (8)(10)		3,179,723		3,179,723		3,176,754
Delayed Draw Term Loan, L+5% (1% floor) cash due 5/30/2021				—		—
				3,179,723		3,176,754

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

September 30, 2014



Portfolio Company/Type of Investment (1)(2)(8)	Industry	Principal (5)		Cost			Fair Value
ConvergeOne Holdings Corp.	Integrated telecommunication services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 6/17/2020 (8)(10)		$	3,990,000	$	3,990,000		$	3,992,347
				3,990,000			3,992,347
American Residential Services, L.L.C.	Specialized consumer services
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 6/30/2021 (8)(10)		3,192,000		3,192,000			3,193,060
				3,192,000			3,193,060
Verdesian Life Sciences, LLC	Fertilizers & agricultural chemicals
First Lien Term Loan, LIBOR+5% (1% floor) cash due 7/1/2020 (8)(10)		3,955,000		3,955,000			4,039,398
				3,955,000			4,039,398
PR Wireless, Inc.	Wireless telecommunication services
First Lien Term Loan, LIBOR+9% (1% floor) cash due 6/27/2020 (7)(10)		2,992,500		2,992,500			2,797,378
35.5263 Common Stock Warrants (7)				—			167,990
				2,992,500			2,965,368
TV Borrower US, LLC	Integrated telecommunication services
First Lien Term Loan, LIBOR+5% (1% floor) cash due 1/8/2021 (7)(10)		7,000,000		7,000,000			7,000,000
Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 7/8/2021 (7)		3,000,000		3,000,000			3,000,000
				10,000,000			10,000,000
Symphony Teleca Services, Inc.	Application software
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 8/7/2019 (10)		2,500,000		2,500,000			2,500,000
				2,500,000			2,500,000
St. George's University Scholastic Services LLC	Education services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 8/7/2021 (7)(10)		3,000,000		3,000,000			3,000,000
				3,000,000			3,000,000
CPI Buyer, LLC	Healthcare equipment
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 8/15/2021		8,900,000		8,900,000			8,900,000
				8,900,000			8,900,000
EP Minerals, LLC	Specialty chemicals
First Lien Term Loan, LIBOR+4.5% (1% floor) cash due 8/20/2020 (10)		3,200,000		3,200,000			3,200,000
				3,200,000			3,200,000
American Dental Partners, Inc.	Healthcare services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 8/29/2021		6,000,000		6,000,000			6,000,000
				6,000,000			6,000,000
BeyondTrust Software, Inc.	Application software
First Lien Term Loan, LIBOR+7% (1% floor) cash due 9/25/2019 (10)		67,500,000		67,460,337			67,500,000
First Lien Revolver, LIBOR+7% (1% floor) cash due 9/25/2019 (11)				(3,305		)	—
500,000 Class A membership interest in BeyondTrust Holdings LLC				500,000			500,000
				67,957,032			68,000,000
Reliant Hospital Partners, LLC	Healthcare services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 10/1/2019 (10)		7,500,000		7,500,000			7,500,000
				7,500,000			7,500,000
Hill International, Inc.	Construction and engineering
First Lien Term Loan, LIBOR+6.75% (1% floor) cash due 9/26/2019 (10)		6,100,000		6,100,000			6,100,000
				6,100,000			6,100,000
Scientific Games International, Inc.	Casinos & gaming
First Lien Term Loan, LIBOR+5% (1% floor) cash due 9/17/2021 (10)		13,300,000		13,300,000			13,300,000
				13,300,000			13,300,000
Evergreen Skills Lux S.a.r.l	Internet software & services
First Lien Term Loan, LIBOR+4.75% (1% floor) cash due 4/28/2021 (7)(10)		2,400,000		2,400,000			2,400,000
				2,400,000			2,400,000

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

September 30, 2014



Portfolio Company/Type of Investment (1)(2)(8)	Industry	Principal (5)	Cost		Fair Value
Vestcom International, Inc.	Data processing & outsourced services
First Lien Term Loan, LIBOR+4.25% (1% floor) cash due 9/30/2021 (10)		6,000,000	6,000,000		6,000,000
			6,000,000		6,000,000
Total Non-Control/Non-Affiliate Investments (80.5% of net assets)			$	299,997,247	$	300,001,397
Total Portfolio Investments (80.5% of net assets)			$	299,997,247	$	300,001,397

See notes to Consolidated Financial Statements.

Fifth Street Senior Floating Rate Corp.

Consolidated Schedule of Investments

September 30, 2014


(1)	All debt investments are income producing unless otherwise noted.


(2)	See Note 3 to the Consolidated Financial Statements for portfolio composition by geographic region.


(3)	Control Investments are defined by the 1940 Act as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.


(4)	Affiliate Investments are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.


(5)	Principal amount is net of repayments, if any.


(6)	Non-Control/Non-Affiliate Investments are defined by the 1940 Act as investments that are neither Control Investments nor Affiliate Investments.


(7)	Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act.

(8)

(9)


(10)	Held by the Company, in whole or in part, indirectly through FS Senior Funding LLC and pledged as collateral under the Company's credit facility with Natixis, New York Branch.


(11)	Investment has undrawn commitments and a negative cost basis as a result of unamortized fees. Unamortized fees are classified as unearned income which reduces cost basis.

See notes to Consolidated Financial Statements.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization

Fifth Street Senior Floating Rate Corp. (the "Company") was formed in May 2013 as a Delaware corporation and structured as an externally managed, closed-end, non-diversified management investment company, that has elected to be regulated as a business development company under the Investment Company Act of 1940 (the "1940 Act"). The Company is managed by Fifth Street Management LLC (the "Investment Adviser").

The Company also has wholly-owned subsidiaries that are consolidated for accounting purposes and the portfolio investments held by the subsidiaries are included in the Company's Consolidated Financial Statements. The subsidiaries are operated solely for investment activities of the Company. All significant intercompany balances and transactions have been eliminated.

On July 17, 2013, the Company completed an initial public offering of 6,666,668 shares of its common stock at the public offering price of $15.00 per share. The proceeds of its initial public offering totaled $100.0 million and all offering costs were borne by the Company's Investment Adviser, including $5.3 million of underwriting commissions and $0.4 million of other offering related expenses. The Company's common stock is listed on the NASDAQ Global Select Market, where it trades under the symbol "FSFR."

On August 19, 2014, the Company completed a follow-on public offering of 22,800,000 shares of its common stock at the public offering price of $12.91 per share. The net proceeds totaled $276.2 million after deducting underwriting commissions of $17.7 million and offering costs of $0.5 million.

Note 2. Significant Accounting Policies

Basis of Presentation:

The Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature considered necessary for the fair presentation of the Consolidated Financial Statements have been made. The financial results of the Company’s portfolio investments are not consolidated in the Company’s Consolidated Financial Statements. As provided under ASU 2013-08 which amended Accounting Standards Codification ("ASC") 946 – Financial Services – Investment Companies ("ASC 946"), the Company is an investment company as it is regulated under the 1940 Act and is applying guidance in ASC 946.

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions affecting amounts reported in the financial statements and accompanying notes. These estimates are based on the information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions and conditions. The most significant estimates inherent in the preparation of the Company's Consolidated Financial Statements are the valuation of investments and revenue recognition.

The Consolidated Financial Statements include portfolio investments at fair value of $627.6 million and $300.0 million at June 30, 2015 and September 30, 2014, respectively. The portfolio investments represent 174.2% and 80.5% of net assets at June 30, 2015 and September 30, 2014, respectively, and their fair values have been determined in good faith by the Company's Board of Directors in the absence of readily available market values. Because of the inherent uncertainty of valuation, the determined values may differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could be material.

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, "Control Investments" are defined as investments in companies in which the Company owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation; "Affiliate Investments" are defined as investments in companies in which the Company owns between 5% and 25% of the voting securities; and "Non-Control/Non-Affiliate Investments" are defined as investments that are neither Control Investments nor Affiliate Investments.

Consolidation:

As provided under Regulation S-X and ASC Topic 946-810 – Financial Services – Investment Companies, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company or a controlled operating company whose business consists of providing services to the Company. FS Senior Funding Ltd. would be considered an investment company but for the exceptions under Sections 3(c)(1) and 3(c)(7) under the 1940 Act, and was established solely for the purpose of allowing the Company to borrow funds for the purpose of making investments. The Company owns all of the equity in this entity and controls the decision making power that drives its economic performance. Accordingly, the Company consolidates the results of the Company’s wholly-owned subsidiaries, including FS Senior Funding Ltd., in its Consolidated Financial Statements.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements:

The Financial Accounting Standards Board ("FASB") ASC 820 Fair Value Measurements and Disclosures ("ASC 820") defines fair value as the amount 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. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available or reliable, valuation techniques are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the investments or market and the investments' complexity.

Assets recorded at fair value in the Company's Consolidated Financial Statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

Hierarchical levels, defined by ASC 820 and directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, are as follows:


•	Level 1 — Unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.


•	Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data at the measurement date for substantially the full term of the assets or liabilities.


•	Level 3 — Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Under ASC 820, the Company performs detailed valuations of its debt and equity investments for which quotations are not readily available on an individual basis, using bond yield, market and income approaches as appropriate. In general, the Company utilizes the bond yield method in determining the fair value of its debt investments when there is no readily available market quotation, as long as it is appropriate. If, in the Company's judgment, the bond yield approach is not appropriate, it may use the market or income approach in determining the fair value of the Company's investment in the portfolio company. In certain instances, the Company may use alternative methodologies, including an asset liquidation model, expected recovery model or other alternative approaches.

Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, the Company's capital markets group obtains and analyzes readily available market quotations provided by independent pricing services for all of the Company’s senior secured debt investments for which quotations are available. In determining the fair value of a particular investment, pricing services use observable market information, including both binding and non-binding indicative quotations. These investments are generally classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustment for investment-specific factors or restrictions.

The Company evaluates the prices obtained from independent pricing services based on available market information and company specific data that could affect the credit quality and/or fair value of the investment. Investments for which market quotations are readily available maybe be valued at such market quotations. In order to validate market quotations, the Company looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. The Company does not adjust any of the prices received from these sources unless the Company has a reason to believe any such market quotations are not reflective of the fair value of an investment.

Market quotations may be deemed not to represent fair value where the Company believes that facts and circumstances applicable to an issuer, a seller or purchaser or the market for a particular security causes current market quotations not to reflect the fair value of the security, among other reasons. Examples of these events could include cases when a security trades infrequently causing a quoted purchase or sale price to become stale or in the event of a "fire sale" by a distressed seller. In these instances, the Company values such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available (as discussed below).

If the quotation provided by the pricing service is based on only one or two market sources, the Company performs additional procedures to corroborate such information, generally including but not limited to, the bond yield approach discussed below and a quantitative and qualitative assessment of the credit quality and market trends affecting the portfolio company.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the bond yield approach, the Company uses bond yield models to determine the present value of the future cash flow streams of its debt investments. The Company reviews various sources of transactional data, including private mergers and acquisitions involving debt investments with similar characteristics, and assesses the information in the valuation process.

Under the market approach, the Company estimates the enterprise value of the portfolio companies in which it invests. There is no one methodology to estimate enterprise value and, in fact, for any one portfolio company, enterprise value is best expressed as a range of fair values, from which the Company derives a single estimate of enterprise value. To estimate the enterprise value of a portfolio company, the Company analyzes various factors, including the portfolio company's historical and projected financial results. Typically, private companies are valued based on multiples of EBITDA (earnings before interest, taxes, depreciation and amortization), cash flows, net income, revenues, or, in limited cases, book value. The Company generally requires portfolio companies to provide annual audited and quarterly or monthly unaudited financial statements, as well as annual projections for the upcoming fiscal year.

Under the income approach, the Company generally prepares and analyzes discounted cash flow models based on projections of the future free cash flows of the business.

The Company estimates the fair value of privately held warrants using a Black Scholes pricing model. At each reporting date, privately held warrants are valued based on an analysis of various factors and subjective assumptions including, but not limited to, the current stock price (by analyzing the portfolio company’s operating performance and financial condition and general market conditions), the expected period until exercise, expected volatility of the underlying stock price, expected dividends and the risk free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.

The Company's Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of the Company's investments:


•	The quarterly valuation process begins with each portfolio company or investment being initially valued either by the Company's capital markets group for quoted investments or the Company's finance department for unquoted investments;

•Preliminary valuations are then reviewed and discussed with principals of the Investment Adviser;


•	Separately, independent valuation firms engaged by the Board of Directors prepare preliminary valuations of the Company's investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to the Company;


•	The finance department compares and contrasts its preliminary valuations to the preliminary valuations of the independent valuation firms;


•	The finance department prepares a valuation report for the Audit Committee of the Board of Directors;


•	The Audit Committee of the Board of Directors is apprised of the preliminary valuations of the independent valuation firms;


•	The Audit Committee of the Board of Directors reviews the preliminary valuations with the portfolio managers of the Investment Adviser, and the finance department responds and supplements the preliminary valuations to reflect any comments provided by the Audit Committee;


•	The Audit Committee of the Board of Directors makes a recommendation to the Board of Directors regarding the fair value of the investments in the Company's portfolio; and


•	The Board of Directors discusses valuations and determines the fair value of each investment in the Company's portfolio in good faith.

The fair value of each of the Company's investments at June 30, 2015 and September 30, 2014 was determined in good faith by the Board of Directors. The Board of Directors has authorized the engagement of independent valuation firms to provide valuation assistance. The Company will continue to engage independent valuation firms to provide assistance regarding the determination of the

fair value of a portion of the Company's portfolio securities for which market quotations are not readily available or are readily

available but deemed not reflective of the fair value of the investment each quarter, with a substantial portion being valued over the

course of each fiscal year. However, the Board of Directors is ultimately and solely responsible for the valuation of the portfolio investments at fair value as determined in good faith pursuant to the Company's valuation policy and a consistently applied valuation process.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investment Income:

Interest income, adjusted for accretion of original issue discount ("OID") is recorded on an accrual basis to the extent that such amounts are expected to be collected. The Company stops accruing interest on investments when it is determined that interest is no longer collectible.

The Company generally recognizes dividend income on the ex-dividend date.

The Company may invest in debt securities which contain payment-in-kind ("PIK") interest provisions. PIK interest is computed at the contractual rate specified in each investment agreement and added to the principal balance of the investment and recorded as income.

Fee income consists of the servicing fees, advisory fees, structuring fees and prepayment fees that the Company receives in connection with its debt investments. These fees are recognized as earned.

Cash and Cash Equivalents:

Cash, cash equivalents and restricted cash consist of demand deposits and highly liquid investments with maturities of three months or less, when acquired. The Company places its cash, cash equivalents and restricted cash with financial institutions and, at times, cash held in bank accounts may exceed the Federal Deposit Insurance Corporation ("FDIC") insured limit.

Restricted Cash:

As of June 30, 2015, included in restricted cash is $3.5 million that was held at U.S. Bank, National Association and Wells Fargo in connection with the Company's credit facilities and its 2015 Debt Securitization (as defined in Note 6 — Borrowings). Pursuant to the terms of the credit agreements and the 2015 Debt Securitization, the Company is restricted in terms of access to $2.5 million until such time as the Company submits its required monthly reporting schedules. As of June 30, 2015, $1.0 million of restricted cash could only be used for the payment of interest expense on the notes issued in the 2015 Debt Securitization.

Due from Portfolio Companies:

Due from portfolio companies consists of amounts payable to the Company from its portfolio companies, excluding those amounts attributable to interest, dividends or fees receivable. These amounts are recognized as they become payable to the Company (e.g., principal payments on the scheduled amortization payment date).

Deferred Financing Costs:

Deferred financing costs consist of fees and expenses in connection with the closing or amending of the Company's credit facilities or debt securitizations, and are capitalized at the time of payment. Deferred financing costs are amortized using the straight line method over the terms of the respective credit facilities or debt securitizations. This amortization expense is included in interest expense in the Company's Consolidated Statements of Operations.

Offering Costs:

Offering costs consist of fees and expenses incurred in connection with the public offer and sale of Company's common stock, including legal, accounting and printing fees. There were no offering costs charged to capital during the nine months ended June 30, 2015 and June 30, 2014.

Income Taxes:

As a regulated investment company ("RIC") under Subchapter M of the Internal Revenue Code ("Code"), the Company is not subject to U.S. federal income tax on the portion of its taxable income and gains distributed to its stockholders as a dividend. The Company intends to distribute between 90% and 100% of its taxable income and gains, within the Subchapter M rules, and thus the Company anticipates that it will not incur any U.S. federal or state income tax at the corporate level. As a RIC, the Company is also subject to a U.S. federal excise tax based on distributive requirements of its taxable income on a calendar year basis. The Company anticipates timely distribution of its taxable income within the tax rules; however, the Company incurred a de minimis U.S. federal excise tax for calendar year 2013. The Company does not expect to incur a U.S. federal excise tax for calendar year 2014. The Company may incur a U.S. federal excise tax in future years.

ASC 740 Accounting for Uncertainty in Income Taxes ("ASC 740") provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the Company's Consolidated Financial Statements. ASC 740 requires the evaluation

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management's determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. The Company recognizes the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. The Company identifies its major tax jurisdictions as U.S. Federal and Connecticut, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.

Recent Accounting Pronouncements:

In May 2014, the FASB issued guidance to establish a comprehensive and converged standard on revenue recognition to enable financial statement users to better understand and consistently analyze an entity’s revenue across industries, transactions and geographies. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new guidance also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. The guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. Qualitative and quantitative information is required to be disclosed about: (1) contracts with customers, (2) significant judgments and changes in judgments and (3) assets recognized from costs to obtain or fulfill a contract. The guidance will apply to all entities. The guidance is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. Early application is not permitted. The Company is in the process of evaluating the impact that this guidance will have on its consolidated financial statements.

In April 2015, the FASB issued a new accounting standards update that requires debt issuance costs (deferred financing costs) related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the related debt liability, similar to the presentation of debt discounts. The update is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company is in the process of evaluating the impact this guidance will have on its consolidated financial statements, however, because the update impacts presentation and disclosure only, the Company does not believe adoption will have a significant impact on its Consolidated Financial Statements.

Note 3. Portfolio Investments

At June 30, 2015, 174.2% of net assets, or $627.6 million, was invested in 62 portfolio investments, including 14.7% of net assets, or $52.9 million, in subordinated notes and LLC equity interests of FSFR Glick JV LLC, and 18.4% of net assets, or $66.4 million, was in cash and cash equivalents (excluding restricted cash). In comparison, at September 30, 2014, 80.5% of net assets, or $300.0 million, was invested in 48 portfolio investments and 28.8% of net assets, or $107.4 million, was invested in cash and cash equivalents (excluding restricted cash). As of June 30, 2015, 91.4% of the Company's portfolio at fair value consisted of senior secured debt investments that bore interest at floating rates which are secured by first or second priority liens on the assets of the portfolio companies, 7.7% consisted of investments in the subordinated notes of FSFR Glick JV LLC and 0.8% consisted of investments in the LLC equity interests of FSFR Glick JV LLC. As of September 30, 2014, 99.8% of the Company's portfolio at cost and fair value, consisted of senior secured debt investments that bore interest at floating rates which are secured by first or second priority liens on the assets of the portfolio companies.

During the three and nine months ended June 30, 2015, the Company recorded net unrealized depreciation of $2.5 million and $6.0 million, respectively. During the three and nine months ended June 30, 2014, the Company recorded net unrealized depreciation of $0.0 million and $0.6 million, respectively. During the three and nine months ended June 30, 2015, the Company recorded net realized losses of $1.7 million and $3.3 million, respectively. During the three and nine months ended June 30, 2014, the Company recorded net realized gains (losses) of $(0.1) million and $0.2 million, respectively.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The composition of the Company's investments as of June 30, 2015 and September 30, 2014 at cost and fair value was as follows:



	June 30, 2015				September 30, 2014
	Cost		Fair Value		Cost		Fair Value
Investments in debt securities (senior secured)	$	579,671,424	$	573,910,164	$	299,497,247	$	299,333,407
Investments in equity securities (common stock and warrants)	500,000		804,334		500,000		667,990
Debt investment in FSFR Glick JV LLC	48,098,255		48,055,018		—		—
Equity investment in FSFR Glick JV LLC	5,344,251		4,815,778		—		—
Total	$	633,613,930	$	627,585,294	$	299,997,247	$	300,001,397

The following table presents the financial instruments carried at fair value as of June 30, 2015, on the Company's Consolidated Statements of Assets and Liabilities for each of the three levels of hierarchy established by ASC 820:



	Level 1		Level 2		Level 3		Total
Investments in debt securities (senior secured)	$	—	$	—	$	573,910,164	$	573,910,164
Investments in debt securities (subordinated notes of FSFR Glick JV LLC)	—		—		48,055,018		48,055,018
Investment in equity securities (common stock and warrants, including LLC equity interest of FSFR Glick JV LLC)	—		—		5,620,112		5,620,112
Total investments at fair value	$	—	$	—	$	627,585,294	$	627,585,294

The following table presents the financial instruments carried at fair value as of September 30, 2014, on the Company's Consolidated Statements of Assets and Liabilities for each of the levels of hierarchy established by ASC 820:



	Level 1		Level 2		Level 3		Total
Investments in debt securities (senior secured)	$	—	$	—	$	299,333,407	$	299,333,407
Investment in equity securities (common stock and warrants)	—		—		667,990		667,990
Total investments at fair value	$	—	$	—	$	300,001,397	$	300,001,397

When a determination is made to classify a financial instrument within Level 3 of the valuation hierarchy, the determination is based upon the fact that the unobservable factors are significant to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to the unobservable or Level 3 components, observable components (that is, components that are actively quoted and can be validated by external sources). Accordingly, the appreciation (depreciation) in the tables below includes changes in fair value due in part to observable factors that are part of the valuation methodology.

The following table provides a roll-forward in the changes in fair value from March 31, 2015 to June 30, 2015, for all investments for which the Company determines fair value using unobservable (Level 3) factors:



	Senior Secured Debt			Subordinated Debt (subordinated notes of FSFR Glick JV)			Common Equity (including LLC equity interests of FSFR Glick JV)/Warrants			Total
Fair value at March 31, 2015	$	582,871,055		$	—		$	688,366		$	583,559,421
New investments & net revolver activity	225,949,347			48,098,255			8,844,251			282,891,853
Redemptions/repayments	(231,241,716		)	—			(3,528,125		)	(234,769,841		)
Accretion of original issue discount	102,755			—			—			102,755
Net change in unearned income	(822		)	—			—			(822		)
Net unrealized depreciation on investments	(2,025,829		)	(43,237		)	(412,505		)	(2,481,571		)
Net realized gain (loss) on investments	(1,744,626		)	—			28,125			(1,716,501		)
Fair value as of June 30, 2015	$	573,910,164		$	48,055,018		$	5,620,112		$	627,585,294
Net unrealized depreciation relating to Level 3 assets still held at June 30, 2015 and reported within net unrealized depreciation on investments in the Consolidated Statement of Operations for the three months ended June 30, 2015	$	(1,933,555	)	$	—		$	(412,505	)	$	(2,346,060	)

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a roll-forward in the changes in fair value from March 31, 2014 to June 30, 2014, for all investments for which the Company determines fair value using unobservable (Level 3) factors:



	Senior Secured Debt			Subordinated Debt			Total
Fair value at March 31, 2014	$	179,752,625		$	—		$	179,752,625
New investments & net revolver activity	74,258,530			3,000,000			77,258,530
Redemptions/repayments	(62,401,077		)	(3,033,110		)	(65,434,187		)
Accretion of original issue discount	16,891			—			16,891
Net unrealized depreciation on investments	(13,387		)	—			(13,387		)
Net realized gain (loss) on investments	(89,442		)	33,110			(56,332		)
Fair value as of June 30, 2014	$	191,524,140		$	—		$	191,524,140
Net unrealized depreciation relating to Level 3 assets still held at June 30, 2014 and reported within net unrealized depreciation on investments in the Consolidated Statement of Operations for the three months ended June 30, 2014	$	(69,717	)	$	—		$	(69,717	)

The following table provides a roll-forward in the changes in fair value from September 30, 2014 to June 30, 2015, for all investments for which the Company determines fair value using unobservable (Level 3) factors:



	Senior Secured Debt			Subordinated Debt (subordinated notes of FSFR Glick JV)			Common Equity (including LLC equity interests of FSFR Glick JV)/Warrants			Total
Fair value at September 30, 2014	$	299,333,407		$	—		$	667,990		$	300,001,397
New investments & net revolver activity	785,682,396			48,098,255			8,844,251			842,624,902
Redemptions/repayments	(502,281,148		)	—			(3,528,125		)	(505,809,273		)
Accretion of original issue discount	196,574			—			—			196,574
Net change in unearned income	(122,984		)	—			—			(122,984		)
Net unrealized depreciation on investments	(5,597,420		)	(43,237		)	(392,129		)	(6,032,786		)
Net realized gain (loss) on investments	(3,300,661		)	—			28,125			(3,272,536		)
Fair value as of June 30, 2015	$	573,910,164		$	48,055,018		$	5,620,112		$	627,585,294
Net unrealized depreciation relating to Level 3 assets still held at June 30, 2015 and reported within net unrealized depreciation on investments in the Consolidated Statement of Operations for the nine months ended June 30, 2015	$	(5,541,305	)	$	—		$	(392,129	)	$	(5,933,434	)

The following table provides a roll-forward in the changes in fair value from September 30, 2013 to June 30, 2014, for all investments for which the Company determines fair value using unobservable (Level 3) factors:



	Senior Secured Debt			Subordinated Debt			Total
Fair value at September 30, 2013	$	48,653,617		$	—		$	48,653,617
New investments & net revolver activity	261,234,395			3,000,000			264,234,395
Redemptions/repayments	(117,932,374		)	(3,033,110		)	(120,965,484		)
Accretion of original issue discount	29,897			—			29,897
Net unrealized depreciation on investments	(626,766		)	—			(626,766		)
Net realized gain on investments	165,371			33,110			198,481
Fair value as of June 30, 2014	$	191,524,140		$	—		$	191,524,140
Net unrealized depreciation relating to Level 3 assets still held at June 30, 2014 and reported within net unrealized depreciation on investments in the Consolidated Statement of Operations for the nine months ended June 30, 2014	$	(428,283	)	$	—		$	(428,283	)

The Company generally utilizes a bond yield model to estimate the fair value of its debt investments when there is not a readily available market value (Level 3), which model is based on the present value of expected cash flows from the debt investments. The significant observable inputs into the model are market interest rates for debt with similar characteristics, which are adjusted for the

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

portfolio company's credit risk. The credit risk component of the valuation considers several factors including financial performance, business outlook, debt priority and collateral position. These factors are incorporated into the calculation of the capital structure premium, tranche specific risk premium/(discount), size premium and industry premium/(discount), which are significant unobservable inputs into the model.

Significant Unobservable Inputs for Level 3 Investments

The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which are carried at fair value as of June 30, 2015:



Asset	Fair Value		Valuation Technique	Unobservable Input	Range						Weighted Average (c)
Senior secured debt	$	266,258,731	Bond yield approach	Capital structure premium	(a)	0.0	%	-	0.0%		0.0%
				Tranche specific risk premium / (discount)	(a)	(3.0	)%	-	6.0%		(0.8)%
				Size premium	(a)	0.5	%	-	1.5%		1.2%
				Industry premium / (discount)	(a)	(1.3	)%	-	0.6%		0.2%
	307,651,433		Market quotations	Broker quoted price	(d)	N/A		-	N/A		N/A
FSFR Glick JV subordinated notes	48,055,018		Bond yield approach	Capital structure premium	(a)	2.0	%	-	2.0%		2.0%
				Tranche specific risk premium / (discount)	(a)	(1.4	)%	-	(1.4	)%	(1.4)%
				Size premium	(a)	2.0	%	-	2.0%		2.0%
				Industry premium / (discount)	(a)	(1.5	)%	-	(1.5	)%	(1.5)%
FSFR Glick JV equity	4,815,778		Net asset value	Net asset value		N/A		-	N/A		N/A
Common equity/warrants	804,334		Market and income approaches	Weighted average cost of capital		18.0	%	-	18.0%		18.0%
				Company specific risk premium	(a)	1.0	%	-	1.0%		1.0%
				Revenue growth rate		14.1	%	-	14.1%		14.1%
				EBITDA multiple	(b)	11.5x		-	11.5x		11.5x
				Revenue multiple	(b)	4.1x		-	5.3x		4.7x
Total	$	627,585,294

_____________________

(a) Used when market participant would take into account this premium or discount when pricing the investment.

(b) Used when market participant would use such multiples when pricing the investment.

(d) The Company generally uses prices provided by an independent pricing service which are non-binding indicative prices on or near the valuation date as the primary basis for the fair value determinations for quoted senior secured debt investments. Since these prices are non-binding, they may not be indicative of fair value. Each quoted price is evaluated by the Audit Committee in conjunction with additional information compiled by the Company, including financial performance, recent business developments and various other factors.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides quantitative information related to the significant unobservable inputs for Level 3 investments, which are carried at fair value as of September 30, 2014:



Asset	Fair Value		Valuation Technique	Unobservable Input	Range					Weighted Average (c)
Senior secured debt	$	299,333,407	Bond yield approach	Capital structure premium	(a)	0.0	%	-	2.0%	0.3%
				Tranche specific risk premium / (discount)	(a)	(3.0	)%	-	5.0%	(0.1)%
				Size premium	(a)	0.0	%	-	1.5%	0.5%
				Industry premium / (discount)	(a)	(0.7	)%	-	1.1%	0.3%
Common equity/warrants	667,990		Market and income approaches	Weighted average cost of capital		7.0	%	-	21.0%	17.5%
				Company specific risk premium	(a)	4.0	%	-	5.0%	4.3%
				Revenue growth rate		11.7	%	-	41.9%	34.3%
				EBITDA multiple	(b)	9.5x		-	9.9x	9.6x
				Revenue multiple	(b)	4.1x		-	5.3x	4.7x
Total	$	300,001,397

_____________________

(a) Used when market participant would take into account this premium or discount when pricing the investment.

(b) Used when market participant would use such multiples when pricing the investment.

Under the bond yield approach, the significant unobservable inputs used in the fair value measurement of the Company's investments in debt securities are capital structure premium, tranche specific risk premium/(discount), size premium and industry premium/(discount). Significant increases or decreases in any of those inputs in isolation may result in a significantly lower or higher fair value measurement, respectively.

Under the market and income approaches, the significant unobservable inputs used in the fair value measurement of the Company's investments in debt or equity securities are the weighted average cost of capital, company specific risk premium, revenue growth rate, EBITDA multiple and revenue multiple. Significant increases or decreases in a portfolio company's weighted average cost of capital or company specific risk premium in isolation may result in a significantly lower or higher fair value measurement, respectively. Significant increases or decreases in the revenue growth rate or valuation multiples in isolation may result in a significantly higher or lower fair value measurement, respectively.

Financial Instruments Disclosed, But Not Carried, At Fair Value

The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of June 30, 2015, and the level of each financial liability within the fair value hierarchy:



	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Citibank facility payable	$	127,366,000	$	127,366,000	$	—	$	—	$	127,366,000
Notes payable	180,000,000		180,000,000		—		—		180,000,000
Total	$	307,366,000	$	307,366,000	$	—	$	—	$	307,366,000

The carrying value of credit facility payable and notes payable approximates their fair values and are both included in Level 3 of the hierarchy.

Off-Balance Sheet Arrangements

The Company's off-balance sheet arrangements consisted of $81.6 million and $19.6 million of unfunded commitments to provide debt and equity financing to its portfolio companies as of June 30, 2015 and September 30, 2014, respectively. Such commitments are subject to the portfolio companies' satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Statements of Assets and Liabilities and are not reflected in the Company's Consolidated Statements of Assets and Liabilities.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the composition of the unfunded commitments (consisting of revolvers, term loans and FSFR Glick JV subordinated notes and LLC equity interests) as of June 30, 2015 and September 30, 2014 is shown in the table below:



	June 30, 2015		September 30, 2014
FSFR Glick JV LLC	34,057,494		—
TIBCO Software, Inc.	5,300,000		—
Landslide Holdings, Inc.	5,000,000		5,000,000
Triple Point Group Holdings, Inc.	4,968,590		4,984,375
Executive Consulting Group, Inc.	4,800,000		—
All Web Leads, Inc.	4,090,954		—
BeyondTrust Software, Inc.	3,605,000		5,625,000
Motion Recruitment Partners LLC	2,900,000		—
Legalzoom.com, Inc.	2,607,018		—
Metamorph US 3, LLC	2,400,000		—
Idera, Inc.	2,400,000		—
PowerPlan, Inc.	2,100,000		—
Dynatect Group	1,800,000		—
My Alarm Center, LLC	1,744,727
Ameritox Ltd.	1,333,333
Teaching Strategies, LLC	1,200,000
TrialCard Incorporated	850,000		—
NextCare, Inc.	401,594		1,555,642
GTCR Valor Companies, Inc.	—		2,412,308
Total	$	81,558,710	$	19,577,325

Portfolio Composition

Summaries of the composition of the Company's investment portfolio at cost and fair value as a percentage of total investments are shown in the following tables:



	June 30, 2015				September 30, 2014
Cost:
Senior secured debt	$	579,671,424	91.49	%	$	299,497,247	99.83	%
Subordinated notes of FSFR Glick JV	48,098,255		7.59		—		—
LLC equity interests of FSFR Glick JV	5,344,251		0.84		—		—
Purchased equity	500,000		0.08		500,000		0.17
Total	$	633,613,930	100.00	%	$	299,997,247	100.00	%
Fair Value:
Senior secured debt	$	573,910,164	91.44	%	$	299,333,407	99.78	%
Subordinated notes of FSFR Glick JV	48,055,018		7.66		—		—
LLC equity interests of FSFR Glick JV	4,815,778		0.77		—		—
Purchased equity	636,344		0.10		500,000		0.17
Equity grants	167,990		0.03		167,990		0.05
Total	$	627,585,294	100.00	%	$	300,001,397	100.00	%

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company primarily invests in portfolio companies located in North America. The following tables show the portfolio composition by geographic region at cost and fair value as a percentage of total investments. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company's business.



	June 30, 2015				September 30, 2014
Cost:
Northeast U.S.	$	206,519,927	32.59	%	$	70,932,234	23.64	%
West U.S.	133,150,755		21.01		103,814,102		34.61
Southwest U.S.	125,342,084		19.78		31,308,250		10.44
Midwest U.S.	83,279,623		13.14		32,871,451		10.96
Southeast U.S.	69,604,429		10.99		40,489,710		13.50
International	15,717,112		2.49		20,581,500		6.85
Total	$	633,613,930	100.00	%	$	299,997,247	100.00	%

Fair Value:
Northeast U.S.	$	205,362,906	32.72	%	$	70,855,117	23.62	%
West U.S.	131,475,326		20.95		103,704,012		34.57
Southwest U.S.	124,843,682		19.89		31,405,771		10.47
Midwest U.S.	80,684,162		12.86		32,989,244		11.00
Southeast U.S.	69,487,147		11.07		40,492,198		13.50
International	15,732,071		2.51		20,555,055		6.84
Total	$	627,585,294	100.00	%	$	300,001,397	100.00	%

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The composition of the Company's portfolio by industry at cost and fair values as of June 30, 2015 and September 30, 2014 were as follows:



	June 30, 2015				September 30, 2014
Cost:
Internet software & services	$	137,479,280	21.70	%	$	27,062,048	9.02	%
Healthcare services	80,385,109		12.69		38,272,049		12.76
Multi-sector holdings	53,442,506		8.43		—		—
Integrated telecommunication services	48,329,283		7.63		18,384,774		6.13
Advertising	41,167,907		6.50		10,800,723		3.60
Diversified support services	37,022,991		5.84		3,473,750		1.16
Application software	29,145,687		4.60		73,786,077		24.60
Specialized consumer services	28,866,543		4.56		3,192,000		1.06
Pharmaceuticals	24,100,000		3.80		9,925,000		3.31
Education services	23,669,031		3.74		9,354,343		3.12
Data processing & outsourced services	21,750,000		3.43		6,000,000		2.00
Security & alarm services	19,252,892		3.04		—		—
Electronic equipment & instruments	13,860,000		2.19		—		—
Food retail	10,467,133		1.65		—		—
Research & consulting services	9,400,000		1.48		4,937,500		1.65
Diversified capital markets	8,832,256		1.39		5,447,487		1.81
IT consulting & other services	8,279,250		1.31		—		—
Construction & engineering	6,054,250		0.95		6,100,000		2.03
Wireless telecommunication services	5,799,164		0.92		2,992,500		1.00
Healthcare technology	4,925,000		0.78		7,962,500		2.65
Personal products	4,843,750		0.76		4,937,500		1.65
Oil & gas equipment & services	4,562,495		0.72		4,749,995		1.58
Computer hardware	4,194,444		0.66		4,604,167		1.53
Industrial machinery	3,980,000		0.63		—		—
Fertilizers & agricultural chemicals	3,804,959		0.60		3,955,000		1.32
Specialty chemicals	—		—		3,200,000		1.07
Casinos & gaming	—		—		13,300,000		4.43
Hotels, resorts & cruise lines	—		—		9,625,000		3.21
Healthcare equipment	—		—		8,900,000		2.97
Alternative carriers	—		—		4,987,500		1.66
Electrical components & equipment	—		—		4,975,000		1.66
Electronic components	—		—		4,588,500		1.53
Movies & entertainment	—		—		4,483,834		1.49
Total	$	633,613,930	100.00	%	$	299,997,247	100.00	%

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



	June 30, 2015				September 30, 2014
Fair Value:
Internet software & services	$	134,387,736	21.41	%	$	27,082,827	9.03	%
Healthcare services	78,325,703		12.48		38,192,786		12.73
Multi-sector holdings	52,870,796		8.42		—		—
Integrated telecommunication services	48,316,602		7.70		18,395,831		6.13
Specialized consumer services	28,829,766		4.59		3,193,060		1.06
Advertising	41,207,481		6.57		10,839,541		3.61
Diversified support services	36,864,273		5.87		3,461,756		1.15
Application software	29,315,348		4.67		73,759,754		24.59
Pharmaceuticals	24,284,023		3.87		9,887,945		3.30
Education services	23,282,188		3.71		9,376,798		3.13
Data processing & outsourced services	21,734,375		3.46		6,000,000		2.00
Security & alarm services	19,248,767		3.07		—		—
Electronic equipment & instruments	13,860,000		2.21		—		—
Food retail	10,476,313		1.67		—		—
Research & consulting services	9,410,750		1.50		4,941,631		1.65
Diversified capital markets	8,876,418		1.41		5,459,605		1.80
IT consulting & other services	8,302,556		1.32		—		—
Construction & engineering	5,990,876		0.96		6,100,000		2.03
Wireless telecommunication services	5,813,387		0.93		2,965,368		0.99
Healthcare technology	4,943,469		0.79		8,011,422		2.67
Personal products	4,849,805		0.77		4,888,194		1.63
Oil & gas equipment & services	4,425,619		0.71		4,708,121		1.57
Computer hardware	4,185,699		0.67		4,605,770		1.54
Industrial machinery	3,968,873		0.63		—		—
Fertilizers & agricultural chemicals	3,814,471		0.61		4,039,398		1.35
Casinos & gaming	—		—		13,300,000		4.43
Hotels, resorts & cruise lines	—		—		9,592,523		3.20
Healthcare equipment	—		—		8,900,000		2.97
Alternative carriers	—		—		4,987,468		1.66
Electrical components & equipment	—		—		4,860,113		1.62
Movies & entertainment	—		—		4,640,481		1.55
Electronic components	—		—		4,611,005		1.54
Specialty chemicals	—		—		3,200,000		1.07
Total	$	627,585,294	100.00	%	$	300,001,397	100.00	%

The Company's investments are generally in middle market companies in a variety of industries. At June 30, 2015, the Company had no single investment that represented greater than 10% of the total investment portfolio at fair value. At September 30, 2014, the Company had no single investment that represented greater than 25% of the total investment portfolio at fair value. Income, consisting of interest, dividends, fees, other investment income and realization of gains or losses, can fluctuate upon repayment or sale of an investment and in any given year can be highly concentrated among several investments. For the three and nine months ended June 30, 2015, no individual investment produced income that exceeded 10% of total investment income. For the three and nine months ended June 30, 2014, no individual investment produced income that exceeded 10% of total investment income.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FSFR Glick JV LLC

In October 2014, the Company entered into an LLC agreement with GF Equity Funding 2014 LLC ("GF Equity Funding") to form FSFR Glick JV LLC ("FSFR Glick JV"). On April 21, 2015, FSFR Glick JV began investing primarily in senior secured loans of middle market companies. The Company co-invests in these securities with GF Equity Funding through its investment in FSFR Glick JV. FSFR Glick JV is managed by a four person Board of Directors, two of whom are selected by the Company and two of whom are selected by GF Equity Funding. FSFR Glick JV is capitalized as transactions are completed, and portfolio decisions and investment decisions in respect of the FSFR Glick JV must be approved by an investment committee of the FSFR Glick JV consisting of one representative of the Company and one representative of GF Equity Funding (with approval of each required). The members provide capital to the FSFR Glick JV in exchange for LLC equity interests, and the Company and GF Debt Funding 2014 LLC, an entity advised by affiliates of GF Equity Funding ("GF Debt Funding"), provide capital to the FSFR Glick JV in exchange for subordinated notes (the "Subordinated Notes"). As of June 30, 2015, the Company and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC equity interests and the Company and GF Debt Funding owned 87.5% and 12.5%, respectively, of the Subordinated Notes.

The Company has determined that FSFR Glick JV is an investment company under ASC 946; however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly-owned investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. Accordingly, the Company does not consolidate its noncontrolling interest in FSFR Glick JV.

As of June 30, 2015, FSFR Glick JV had total assets of $147.6 million. The Company's investment in FSFR Glick JV consisted of LLC equity interests of $4.8 million and Subordinated Notes of $48.1 million, at fair value as of June 30, 2015. The Subordinated Notes are junior in right of payment to the repayment of temporary contributions made by the Company to fund investments of FSFR Glick JV. FSFR Glick JV's portfolio consisted of middle market and other corporate debt securities of 20 "eligible portfolio companies" (as defined in the Section 2(a)(46) of the 1940 Act) as of June 30, 2015. As of June 30, 2015, the largest investment in a single company in FSFR Glick JV's portfolio at fair value was $14.6 million, and the five largest investments in portfolio companies in FSFR Glick JV totaled $57.7 million at fair value. The portfolio companies in FSFR Glick JV are in industries similar to those in which the Company may invest directly.

As of June 30, 2015, FSFR Glick JV had available capital of $100.0 million, $87.5 million of which was from the Company and the remaining $12.5 million from GF Equity Funding. Approximately $61.1 million in aggregate principal amount was funded as of June 30, 2015, relating to these commitments, of which $53.4 million was from the Company. As of June 30, 2015, the Company had commitments to fund Subordinated Notes to FSFR Glick JV of $78.8 million, of which $30.7 million was unfunded. As of June 30, 2015, the Company had commitments to fund LLC equity interests in FSFR Glick JV of $8.8 million, of which $3.4 million was unfunded. Additionally, FSFR Glick JV has a senior revolving credit facility with Credit Suisse AG, Cayman Island Branch ("Credit Suisse facility") with a stated maturity date of April 17, 2023, which permitted up to $200.0 million of borrowings as of June 30, 2015. Borrowings under the Credit Suisse facility are secured by all of the assets of FSFR Glick JV and all of the equity interests in FSFR Glick JV and bore interest at a rate equal to the 3-month LIBOR plus 2.5% per annum with no LIBOR floor as of June 30, 2015. Under the Credit Suisse facility, $73.3 million of borrowings were outstanding as of June 30, 2015.

Below is a summary of FSFR Glick JV's portfolio, followed by a listing of the individual loans in FSFR Glick JV's portfolio as of June 30, 2015:



		June 30, 2015
Senior secured loans (1)		$135,639,634
Weighted average current interest rate on senior secured loans (2)		7.19%
Number of borrowers in FSFR Glick JV		20
Largest loan to a single borrower (1)		$14,599,642
Total of five largest loans to borrowers (1)		$57,697,320

__________

(1) At fair value.

(2) Computed as the (a) annual interest on accruing senior secured loans divided by (b) total senior secured loans at fair value.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FSFR Glick JV Loan Portfolio as of June 30, 2015

Portfolio Company

Business Description

Investment Type

Maturity Date

Stated Interest Rate (1)

Principal

Fair Value (2)

Accruent, LLC (3)

Internet software & services

First Lien Term Loan

11/25/2019

LIBOR +6.25% (1% floor) cash

14,815,251

14,599,642

Ameritox Ltd. (3)

Healthcare services

First Lien Term Loan

6/23/2019

LIBOR+7.5% (1% floor) cash

7,844,104

7,757,279

Answers Corporation (3)

Internet software & services

First Lien Term Loan

10/1/2021

LIBOR+5.25% (1% floor) cash

7,979,950

6,876,044

Beyond Trust Software, Inc. (3)

Application software

First Lien Term Loan

9/25/2019

LIBOR+7% (1% floor) cash

13,700,293

13,574,541

Compuware Corporation (3)

Internet software & services

First Lien Term Loan B1

12/15/2019

LIBOR+5.25% (1% floor) cash

7,898,734

7,790,127

Idera, Inc. (3)

Internet software & services

First Lien Term Loan

11/5/2020

LIBOR+5.5% (0.5% floor) cash

3,180,000

3,154,108

Metamorph US 3, LLC (3)

Internet software & services

First Lien Term Loan

12/1/2020

LIBOR+5.5% (1% floor) cash

8,451,509

8,330,359

Motion Recruitment Partners LLC (3)

Diversified support services

First Lien Term Loan

2/13/2020

LIBOR+6% (1% floor) cash

9,812,500

9,700,130

NAVEX Global, Inc. (3)

Internet software & services

First Lien Term Loan

11/19/2021

LIBOR+4.75% (1% floor) cash

2,441,577

2,435,473

Teaching Strategies, LLC (3)

Education services

First Lien Term Loan

10/1/2019

LIBOR+5.5% (0.5% floor) cash

2,809,106

2,793,367

Teaching Strategies, LLC

Education services

First Lien Delayed Draw Term Loan

10/1/2019

LIBOR+5.5% (0.5% floor) cash

7,065,000

7,054,640

Trialcard Incorporated (3)

Healthcare services

First Lien Term Loan

12/31/2019

LIBOR+5.25% (1% floor) cash

7,844,098

7,770,446

Air Newco LLC

IT consulting & other services

First Lien Term Loan B

1/31/2022

LIBOR+5.5% (1% floor) cash

5,985,000

5,992,481

Fineline Technologies, Inc. (3)

Electronic equipment & instruments

First Lien Term Loan

2/25/2022

LIBOR+5% (1% floor) cash

8,910,000

LegalZoom.com, Inc. (3)

Specialized consumer services

First Lien Term Loan

5/13/2020

LIBOR+7% (1% floor) cash

9,975,000

GK Holdings, Inc.

IT consulting & other services

First Lien Term Loan

1/30/2021

LIBOR+5.5% (1% floor) cash

3,482,500

Vitera Healthcare Solutions, LLC

Healthcare technology

Second Lien Term Loan

11/4/2021

LIBOR+8.25% (1% floor) cash

3,000,000

2,955,000

TIBCO Software, Inc. (3)

Internet software & services

First Lien Term Loan

12/4/2020

LIBOR+5.5% (1% floor) cash

2,334,150

2,337,068

CM Delaware LLC

Advertising

First Lien Term Loan

3/18/2021

LIBOR+4.5% (1% floor) cash

2,172,500

2,169,795

New Trident Holdcorp, Inc. (3)

Healthcare services

First Lien Term Loan B

7/31/2019

LIBOR+5.25% (1.25% floor) cash

2,070,296

2,011,634

Central Security Group, Inc. (3)

Specialized consumer services

First Lien Term Loan

11/6/2020

LIBOR+5.25% (1% floor) cash

5,984,962

5,970,000

Total Portfolio Investments

137,756,530

135,639,634

__________

(1) Represents the current interest rate as of June 30, 2015. All interest rates are payable in cash, unless otherwise noted.

(2) Represents the fair value determined utilizing a similar process as the Company in accordance with ASC 820. However, the determination of such fair value is not included in the Company's Board of Directors' valuation process described elsewhere herein.

(3) This investment is held by both the Company and FSFR Glick JV at June 30, 2015.

The amortized cost and fair value of the Subordinated Notes held by the Company was $48.1 million as of June 30, 2015. The Subordinated Notes pay a weighted average interest rate of LIBOR plus 8.0% per annum and also entitle the holders thereof to receive a portion of the excess cash flow from the investment portfolio, which may result in a return greater than the contractual coupon. For the three months ended June 30, 2015, the Company earned interest income of $0.8 million on its investment in the Subordinated Notes. The cost and fair value of the LLC equity interests held by the Company was $5.3 million and $4.8 million, respectively, as of June 30, 2015. The Company earned dividend income of $0.1 million for the three months ended June 30, 2015 with respect to its LLC equity interests. The LLC equity interests are dividend producing to the extent there is residual income to be distributed on a quarterly basis.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Below is certain summarized financial information for FSFR Glick JV as of June 30, 2015 and for the three months ended June 30, 2015:



	June 30, 2015
Selected Balance Sheet Information:
Investments in loans at fair value (cost $136,276,423)	$	135,639,634
Cash and cash equivalents	1,140,556
Restricted cash	8,148,007
Other assets	2,658,786
Total assets	$	147,586,983

Senior credit facility payable	$	73,257,636
Payables from unsettled transactions	12,531,987
Subordinated notes payable at fair value (proceeds $54,969,435)	54,920,021
Other liabilities	1,382,772
Total liabilities	$	142,092,416
Members' equity	5,494,567
Total liabilities and members' equity	$	147,586,983



	Three months ended June 30, 2015
Selected Statement of Operations Information:
Interest income	$	1,427,775
Total investment income	1,427,775
Interest expense	1,344,369
Other expenses	24,179
Total expenses (1)	1,368,548
Net unrealized depreciation on investments and subordinated notes payable	(587,375		)
Net loss	$	(528,148	)

__________

(1) There are no management fees or incentive fees charged at FSFR Glick JV.

FSFR Glick JV has elected to fair value the Subordinated Notes issued to the Company and GF Debt Funding under ASC 825. The Subordinated Notes are valued by calculating the net present value of the future expected cash flow streams using an appropriate risk-adjusted discount rate model.

During the three months ended June 30, 2015, the Company sold $136.9 million of senior secured debt investments at fair value to FSFR Glick JV in exchange for $83.5 million cash consideration, $48.1 million of subordinated notes in FSFR Glick JV and $5.3 million of LLC equity interests in FSFR Glick JV. The Company recognized a $1.6 million realized loss on these transactions.

Note 4. Fee Income

The Company receives a variety of fees in the ordinary course of business including servicing, advisory, structuring and prepayment fees, which are classified as fee income and recognized as they are earned.

Note 5. Share Data

On August 19, 2014, the Company completed a follow-on public offering of 22,800,000 shares of its common stock at the public offering price of $12.91. The net proceeds totaled $276.2 million after deducting underwriting commissions of $17.7 million and offering costs of $0.5 million.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following sets forth the computation of basic and diluted earnings per share, pursuant to ASC 260-10 Earnings per Share, for the three and nine months ended June 30, 2015 and June 30, 2014:



	Three months ended June 30, 2015		Three months ended June 30, 2014		Nine months ended June 30, 2015		Nine months ended June 30, 2014
Earnings per common share — basic and diluted:
Net increase in net assets resulting from operations	$	2,140,840	$	1,792,793	$	14,160,457	$	4,728,411
Weighted average common shares outstanding	29,466,768		6,666,768		29,466,768		6,666,768
Earnings per common share — basic and diluted	$	0.07	$	0.27	$	0.48	$	0.71

The Company's Board of Directors has declared the following distributions, including shares issued under the Company's dividend reinvestment plan ("DRIP"), from inception to June 30, 2015:



Date Declared	Record Date	Payment Date	Amount per Share	Total Distribution	DRIP Shares Issued (1)	DRIP Shares Value
October 8, 2013	October 21, 2013	October 31, 2013	$0.01	$66,668	—	$—
October 8, 2013	December 16, 2013	January 31, 2014	0.20	1,333,354	606	8,288
January 3, 2014	March 31, 2014	April 15, 2014	0.23	1,533,357	469	6,734
February 11, 2014	June 30, 2014	July 15, 2014	0.27	1,800,027	1,279	17,924
May 12, 2014	September 15, 2014	October 15, 2014	0.30	8,840,030	17,127	191,093
September 9, 2014	December 15, 2014	January 15, 2015	0.30	8,840,030	23,183	242,678
November 20, 2014	April 2, 2015	April 15, 2015	0.30	8,840,030	28,296	307,794
February 4, 2015	May 1, 2015	May 15, 2015	0.10	2,946,677	5,045	50,830
February 4, 2015	June 1, 2015	June 15, 2015	0.10	2,946,677	5,296	53,237
February 4, 2015	July 1, 2015	July 15, 2015	0.10	2,946,677	14,572	137,464
February 4, 2015	August 3, 2015	August 17, 2015	0.10

_______________________

(1) Shares were purchased on the open market and distributed.

Note 6. Borrowings

Natixis Facility

On November 1, 2013, FS Senior Funding LLC, the Company's wholly-owned, special purpose financing subsidiary, entered into a $100 million revolving credit facility (the "Natixis facility") with the lenders referred to therein, Natixis, New York Branch, as administrative agent, and U.S. Bank National Association, as collateral agent and custodian.

Borrowings under the Natixis facility were subject to certain customary advance rates and accrued interest at a rate equal to either the applicable commercial paper rate (subject to an overall cap) plus 1.90% in the case of a lender that is a commercial paper conduit or otherwise the three-month LIBOR plus 2.00% per annum. In addition, there was a commitment fee payable on the undrawn amount under the credit facility equal to 1.00% (or 0.50% for the first six months after the closing date) of such undrawn amount. Interest and commitment fees were payable quarterly in arrears. The reinvestment period under the credit facility ended 18 months after the closing date and the credit facility was scheduled to mature on November 1, 2021.

On October 16, 2014, the Company entered into agreements to expand the Natixis facility from $100 million to $200 million, including a $100 million term loan and a $100 million revolving credit facility. Fifth Third Bank ("Fifth Third") also joined the facility as a term loan lender. The $50 million term loan provided by Fifth Third was priced at LIBOR plus 2% per annum, and the $100 million revolving credit facility and $50 million term loan provided by Natixis, New York Branch, were priced at the applicable commercial paper rate plus 1.9% per annum. The facility maturity date remained unchanged.

Borrowings under the Natixis facility were secured by all of the assets of FS Senior Funding LLC and all of the Company's equity interest in FS Senior Funding LLC. The Company used the Natixis facility to fund a portion of its loan origination activities and for general corporate purposes. Each loan origination under the Natixis facility was subject to the satisfaction of certain conditions. The Company's borrowings under the Natixis facility bore interest at a weighted average interest rate of 2.247% and 2.205% for the nine months ended June 30, 2015 and June 30, 2014, respectively. For the three and nine months ended June 30, 2015, the Company recorded interest expense of $2.7 million and $4.8 million, respectively, related to the Natixis facility. For the three and nine months

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ended June 30, 2014, the Company recorded interest expense of $0.5 million and $1.1 million, respectively, related to the Natixis facility.

On May 28, 2015, the Company completed a $309.0 million debt securitization transaction (the "2015 Debt Securitization"), the proceeds of which were used to repay the entire amount outstanding under the Natixis facility. In connection therewith, the Amended and Restated Loan and Servicing Agreement and other related documents governing the Natixis facility were also terminated. As such, the Company has no borrowings outstanding or capacity available under the Natixis facility as of June 30, 2015. Upon termination of the Natixis facility, the Company accelerated the $2.1 million remaining unamortized fee balance into interest expense during the three months ended June 30, 2015.

Citibank Facility

On January 15, 2015, FS Senior Funding II LLC, the Company's wholly-owned, special purpose financing subsidiary, entered into a $175 million revolving credit facility (the "Citibank facility") with the lenders referred to therein, Citibank, N.A., as administrative agent, and Wells Fargo Bank, N. A., as collateral agent and custodian.

Borrowings under the Citibank facility are subject to certain customary advance rates and accrue interest at a rate equal to LIBOR plus 2.00% per annum on broadly syndicated loans and LIBOR plus 2.25% per annum on all other eligible loans during the reinvestment period. In addition, there is a commitment fee payable on the undrawn amount under the credit facility of either 0.50% per annum on the unused amount of the credit facility (if the advances outstanding on the credit facility exceed 50% of the aggregate commitments by lenders to make advances on such day) or 0.75% per annum on the unused amount of the credit facility (if the advances outstanding on the credit facility do not exceed 50% of the aggregate commitments by lenders to make advances on such day) for the duration of the reinvestment period. Interest and commitment fees are payable quarterly in arrears. The reinvestment period under the credit facility ends three years after the closing date and the credit facility will mature on January 15, 2020.

As of June 30, 2015, the Company had $127.4 million outstanding under the Citibank facility. Borrowings under the Citibank facility are secured by all of the assets of FS Senior Funding II LLC and all of the Company's equity interests in FS Senior Funding II LLC. The Company may use the Citibank facility to fund a portion of its loan origination activities and for general corporate purposes. Each loan origination under the Citibank facility is subject to the satisfaction of certain conditions. The Company's borrowings under the Citibank facility bore interest at a weighted average interest rate of 2.809% for the nine months ended June 30, 2015. For the three and nine months ended June 30, 2015, the Company recorded interest expense of $1.0 million and $1.5 million, respectively, related to the Citibank facility.

Debt Securitization

On May 28, 2015, the Company completed its $309.0 million 2015 Debt Securitization consisting of $222.6 million in senior secured notes ("2015 Notes") and $86.4 million of unsecured subordinated notes ("2015 Subordinated Notes"). The notes offered in the 2015 Debt Securitization were issued by FS Senior Funding Ltd. (the "2015 Issuer"), a wholly-owned subsidiary of the Company, through a private placement. The 2015 Notes are secured by the assets held by the 2015 Issuer. The 2015 Debt Securitization consists of $126.0 million Class A-T Senior Secured 2015 Notes of the 2015 Issuer which bear interest at three-month LIBOR plus 1.80% per annum; $29.0 million Class A-S Senior Secured Notes of the 2015 Issuer which bear interest at a rate of three-month LIBOR plus 1.55% per annum, with a step-up in spread to 2.10% to occur in October 2016; $20.0 million Class A-R Senior Secured Revolving Notes of the 2015 Issuer which bear interest at a rate of Commercial Paper plus 1.80% per annum, collectively, the "Class A Notes,"; and $25.0 million Class B Senior Secured Notes of the 2015 Issuer which bear interest at a rate of three-month LIBOR plus 2.65% per annum. In partial consideration for the loans transferred to the 2015 Issuer as part of the 2015 Debt Securitization, the Company currently retains the entire $22.6 million of the Class C Senior Secured Notes (which the Company purchased at 98.0%) and the entire $86.4 million of the 2015 Subordinated Notes. The Class A Notes and Class B Notes are included in the Company's June 30, 2015 Consolidated Statements of Assets and Liabilities as notes payable. As of June 30, 2015, the Class C Notes and the 2015 Subordinated Notes were eliminated in consolidation.

The proceeds of the private placement of the 2015 Notes, net of expenses, were used to repay the entire amount outstanding under the Natixis Facility. As part of the 2015 Debt Securitization, FS Senior Funding LLC, the borrower under the Natixis Facility, merged with and into 2015 Issuer, with the 2015 Issuer remaining as the surviving entity. Upon completion of the 2015 Debt Securitization, the Company’s Natixis credit facility was paid off and terminated.

The Company serves as collateral manager to the 2015 Issuer under a collateral management agreement. The Company is entitled

to a fee for its services as collateral manager. The collateral management fee is eliminated in consolidation. The Company has retained Fifth Street Management LLC, the Company’s Investment Adviser, to furnish collateral management sub-advisory services to the Company pursuant to a sub-collateral management agreement. Fifth Street Management LLC intends to waive its right to such sub-collateral management fees in respect of the 2015 Debt Securitization.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The collateral management agreement does not include any incentive fee payable to the Company as collateral manager or payable to Fifth Street Management LLC as sub-advisor under the sub-collateral management agreement.

Through May 28, 2019, all principal collections received on the underlying collateral may be used by the 2015 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as sub-collateral manager of the 2015 Issuer and in accordance with the Company's investment strategy. All note classes are scheduled to mature on May 28, 2025.

As of June 30, 2015, there were 48 investments in portfolio companies with a total fair value of $275.2 million, securing the 2015 Notes of the 2015 Issuer. The pool of loans in the 2015 Debt Securitization must meet certain requirements, including asset mix and concentration, collateral coverage, term, agency rating, minimum coupon, minimum spread and sector diversity requirements.

The aggregate accrued interest payable on the 2015 Notes at June 30, 2015 was approximately $0.4 million. Deferred debt issuance costs consist of fees and expenses incurred in connection with debt offerings. As of June 30, 2015, the Company had a deferred debt issuance costs balance of approximately $2.9 million associated with the 2015 Debt Securitization.

For the three months ended June 30, 2015, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2015 Debt Securitization were as follows:



FS Senior Funding Ltd.	For the three months ended June 30, 2015
Interest expense	$	397,725
Amortization of debt issuance costs	48,351
Total interest and other debt financing expenses	$	446,076
Cash paid for interest expense	$	—
Annualized average interest rate	2.44		%
Average outstanding balance	$	64,565,217

The classes, interest rates, spread over LIBOR, cash paid for interest and interest expense of each of the Class A-T, A-S, A-R, B and C notes for the three months ended June 30, 2015 is as follows:



				Three Months Ended June 30, 2015
FS Senior Funding Ltd.	Stated Interest Rate	LIBOR Spread (basis points)		Cash Paid for Interest		Interest Expense
Class A-T Notes	2.15394%	180		$	—	$	256,319
Class A-S Notes	1.90394%	155	(1)	—		52,147
Class A-R Notes	2.15394%	180	(2)	—		18,333
Class B Notes	3.00394%	265		—		70,926
Class C Notes	3.60394%	325	(3)	—		—
Total				$	—	$	397,725

_______________________

(1) Step-up in spread to occur in October 2016.

(2) 1.0% undrawn fee. Class A-R Notes were fully undrawn during the period ending June 30, 2015.

(3) The Company holds all Class C Notes outstanding and thus has not recorded any related interest expense.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A, B, C and Subordinated Notes are as follows:

Description

Class A-T Notes

Class A-S Notes

Class A-R

Notes***

Class B Notes

Class C Notes

Subordinated Notes

Type

Senior Secured Floating Rate Term Debt

Senior Secured Floating Rate Revolver

Senior Secured Floating Rate Term Debt

Subordinated Term Notes

Amount Outstanding

$126,000,000

$29,000,000

$20,000,000

$25,000,000

$22,575,680

$86,400,000

Moody's Rating

"Aaa"

"Aa2"

S&P Rating

"AAA"

Interest Rate

LIBOR + 1.80%

LIBOR + 1.55%*

LIBOR + 1.80% **

LIBOR + 2.65%

LIBOR + 3.25%

Stated Maturity

May 28, 2025

_______________________

* Spread to step-up to 2.10% in October 2016.

** Carries a 1.0% undrawn fee.

*** Class A-R Notes were fully undrawn during the period ended June 30, 2015.

The proceeds of the private placement of the Class A Notes and the Class B Notes of the 2015 Securitization Issuer, net of discount and debt issuance costs, may be used to fund a portion of the 2015 Issuer's loan origination activities and for general corporate purposes. The creditors of the 2015 Issuer have received security interests in the assets owned by the 2015 Issuer and such assets are not intended to be available to the Creditors of the Company (or any other affiliate of the Company). As part of the 2015 Debt Securitization, the Company entered into master loan sale agreements under which the Company agreed to directly or indirectly sell or contribute certain senior secured debt investments (or participation interests therein) to the 2015 Issuer, and to purchase or otherwise acquire the 2015 Subordinated Notes of the 2015 Issuer, as applicable. The 2015 Notes (other than the Class C Notes) are the secured obligations of the 2015 Issuer and indentures governing the 2015 Notes include customary covenants and events of default.

Note 7. Interest and Dividend Income

Interest income is recorded on an accrual basis to the extent that such amounts are expected to be collected. In accordance with the Company's policy, accrued interest is evaluated periodically for collectability. The Company stops accruing interest on investments when it is determined that interest is no longer collectible. Distributions of income from portfolio companies are generally recorded as dividend income on the ex-dividend date.

As of June 30, 2015, September 30, 2014 and June 30, 2014, there were no investments on which the Company had stopped accruing interest or OID income. For the three and nine months ended June 30, 2015 and June 30, 2014, there were no income non-accrual amounts.

Note 8. Taxable/Distributable Income and Dividend Distributions

Taxable income may differ from net increase (decrease) in net assets resulting from operations primarily due to unrealized appreciation (depreciation) on investments, as investment gains and losses are not included in taxable income until they are realized.

Listed below is a reconciliation of net increase in net assets resulting from operations to taxable income for the three and nine months ended June 30, 2015 and June 30, 2014:



	Three months ended June 30, 2015			Nine months ended June 30, 2015
Net increase in net assets resulting from operations	$	2,140,840		$	14,160,457
Net unrealized depreciation on investments	2,481,571			6,032,786
Book/tax difference due to deferred loan fees	(152,076		)	(69,914		)
Book/tax difference due to capital losses not recognized	1,716,501			3,272,536
Other book/tax differences	(74,375		)	(74,375		)
Taxable/Distributable Income (1)	$	6,112,461		$	23,321,490

__________________


(1)	The Company's taxable income for the three and nine months ended June 30, 2015 is an estimate and will not be finally determined until the Company files its tax return for the fiscal year ending September 30, 2015. Therefore, the final taxable income may be different than the estimate.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2014, the components of accumulated undistributed income on a tax basis were as follows:



Undistributed ordinary income, net (RIC status)	$	—
Realized capital gains (losses)	—
Unrealized gains, net	4,150

The effect of the permanent book/tax reclassifications during the fiscal year ended September 30, 2014 resulted in increase/(decrease) to the components of net assets on the Consolidated Statements of Assets and Liabilities as of September 30, 2014 as follows:



Undistributed Net Investment Income	$	2,056,904
Accumulated Net Realized Gain/(Loss) on Investments	(269,981		)
Paid-In Capital	(1,786,923		)

For financial reporting purposes, capital accounts have been adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to the tax treatment of prepayment fees, nondeductible excise taxes paid, reclassification of distributions paid and return of capital distributions.

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "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 Act, the Company is permitted to carry forward any net capital losses, if any, incurred in taxable years beginning after the date of enactment for an unlimited period.

Distributions to stockholders are recorded on the ex-dividend date. The Company is required to distribute annually to its stockholders at least 90% of its net taxable income and net realized short-term capital gains in excess of net realized long-term capital losses for each taxable year in order to be eligible for the tax benefits allowed to a RIC under Subchapter M of the Code. The Company anticipates paying out as a dividend all or substantially all of those amounts. The amount to be paid out as a dividend is determined by the Board of Directors and is based on management's estimate of the Company's annual taxable income. The Company maintains an "opt out" dividend reinvestment plan for its stockholders.

For income tax purposes, the Company estimates that its distributions for the calendar year will be composed primarily of ordinary income, and will be reflected as such on the Form 1099-DIV for the calendar year. To the extent that the Company’s taxable earnings fall below the amount of dividends declared, however, a portion of the total amount of the Company’s dividends for the fiscal year may be deemed a return of capital for tax purposes to the Company’s stockholders.

As a RIC, the Company is also subject to a U.S. federal excise tax based on distributive requirements of its taxable income on a calendar year basis. The Company incurred a de minimis U.S. federal excise tax for calendar year 2013. The Company does not expect to incur a U.S. federal excise tax for calendar year 2014.

Note 9. Realized Gains or Losses and Net Unrealized Appreciation or Depreciation on Investments

Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption and the cost basis of the investment without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period, net of recoveries. Realized losses may also be recorded in connection with the Company's determination that certain investments are considered worthless securities and/or meet the conditions for loss recognition per the applicable tax rules.

Net unrealized appreciation or depreciation reflects the net change in the valuation of the portfolio pursuant to the Company's valuation guidelines and the reclassification of any prior period unrealized appreciation or depreciation.

During the nine months ended June 30, 2015, the Company recorded investment realization events, including the following:


•	In October 2014, the Company received a cash payment of $6.8 million from Answers Corporation in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par (plus additional fees) and no realized gain or loss was recorded on the transaction;


•	In December 2014, the Company received a cash payment of $4.9 million from Survey Sampling International, LLC in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par and no realized gain or loss was recorded on the transaction;

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


•	In April 2015, the Company received a cash payment of $9.4 million from Travel Leaders Group, LLC in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par and no realized gain or loss was recorded on the transaction;


•	In April 2015, the Company received a cash payment of $11.2 million from IPC Systems, Inc. in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par and no realized gain or loss was recorded on the transaction;


•	In April 2015, the Company received a cash payment of $2.5 million from Symphony Teleca Services, Inc. in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par (plus additional fees) and no realized gain or loss was recorded on the transaction; and


•	In May 2015, the Company received a cash payment of $4.1 million from GOBP Holdings, Inc. in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par (plus additional fees) and no realized gain or loss was recorded on the transaction;


•	During the nine months ended June 30, 2015, the Company received cash payments of $451.4 million in connection with full or partial sales of debt investments in the open market and recorded a net realized loss of $3.3 million.

During the nine months ended June 30, 2014, the Company received cash payments of $103.2 million in connection with full or partial sales of debt investments in the open market and recorded a net realized gain of $0.2 million.

During the three and nine months ended June 30, 2015, the Company recorded $2.5 million and $6.0 million, respectively, of net unrealized depreciation on its investments. During the three and nine months ended June 30, 2014, the Company recorded $13,387 and $0.6 million, respectively, of net unrealized depreciation on its debt investments. For the three months ended June 30, 2015, the Company's net unrealized depreciation consisted of $412,505 of net unrealized depreciation on equity investments, $1,976,793 of net unrealized depreciation on debt investments and $92,273 of net reclassifications to realized gains on debt and equity investments (resulting in unrealized depreciation). For the nine months ended June 30, 2015, the Company's net unrealized depreciation consisted of $5,929,543 of net unrealized depreciation on debt investments, and $392,129 of net unrealized depreciation on equity investments, offset by $288,886 of net reclassifications to realized loss on debt and equity investments (resulting in unrealized appreciation).

For the three months ended June 30, 2014, the Company's net unrealized depreciation consisted of $57,640 of net unrealized depreciation on debt investments offset by $44,255 of net reclassifications to realized losses on debt investments (resulting in unrealized appreciation). For the nine months ended June 30, 2014, the Company's net unrealized depreciation consisted of $666,422 of net unrealized depreciation on debt investments offset by $39,653 of net reclassifications to realized losses on debt investments (resulting in unrealized appreciation).

Note 10. Concentration of Credit Risks

The Company places its cash in financial institutions and at times such balances may be in excess of the FDIC insured limit. The Company limits its exposure to credit loss by depositing its cash with high credit quality financial institutions and monitoring their financial stability.

Note 11. Related Party Transactions

The Company has entered into an investment advisory agreement with the Investment Adviser. Under the investment advisory agreement, the Company pays the Investment Adviser a fee for its services consisting of two components — a base management fee and an incentive fee.

Base management Fee

The base management fee is calculated at an annual rate of 1% of the Company's gross assets (i.e., total assets held before deduction of any liabilities), which includes any investments acquired with the use of leverage and excludes any cash, cash equivalents and restricted cash. The base management fee is calculated based on the average value of the Company's gross assets at the end of the two most recently completed quarters. The base management fee is payable quarterly in arrears and the fee for any partial month or quarter is appropriately prorated.

For the three and nine months ended June 30, 2015, base management fees were $1.6 million and $4.3 million, respectively. For the three and nine months ended June 30, 2014, base management fees were $0.5 million and $1.1 million, respectively. At June 30, 2015 and September 30, 2014, respectively, the Company had liabilities on its Consolidated Statements of Assets and Liabilities in the amount of $1.6 million and $0.5 million, reflecting the unpaid portion of the base management fee payable to the Investment Adviser.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Incentive Fee

The incentive fee portion of the investment advisory agreement has two parts. The first part ("Part I Incentive Fee" or "income incentive fee") is calculated and payable quarterly in arrears based on the Company's "Pre-Incentive Fee Net Investment Income" for the immediately preceding fiscal quarter. For this purpose, "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 fiscal quarter, minus the Company's operating expenses for the quarter (including the base management fee, expenses payable under the Company's administration agreement, and any interest expense and dividends paid on any issued and outstanding indebtedness or preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK 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. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company's net assets at the end of the immediately preceding fiscal quarter, will be compared to a "hurdle rate" of 1.5% per quarter (6% annualized), subject to a "catch-up" provision measured as of the end of each fiscal quarter. The Company's net investment income used to calculate this part of the incentive fee is also included in the amount of its gross assets used to calculate the 1% base management fee. The operation of the incentive fee with respect to the Company's Pre-Incentive Fee Net Investment Income for each quarter is as follows:


•	No incentive fee is payable to the Investment Adviser in any fiscal quarter in which the Company's Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of 1.5% (the "preferred return" or "hurdle");

•

50% of the Company's 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 or equal to 2.5% in any fiscal quarter (10% annualized) is payable to the Investment Adviser. The Company refers to this portion of its Pre-Incentive Fee Net Investment Income (which exceeds the hurdle rate but is less than or equal to 2.5%) as the "catch-up." The "catch-up" provision is intended to provide the Investment Adviser with an incentive fee of 20% on all of the Company's Pre-Incentive Fee Net Investment Income as if a hurdle rate did not apply when the Company's Pre-Incentive Fee Net Investment Income exceeds 2.5% in any fiscal quarter; and


•	20% of the amount of the Company's Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.5% in any fiscal quarter (10% annualized) is payable to the Investment Adviser once the hurdle is reached and the catch-up is achieved (20% of all Pre-Incentive Fee Net Investment Income thereafter is allocated to the Investment Adviser).

For the three and nine months ended June 30, 2015, the Part I incentive fee was $0.8 million and $4.6 million, respectively, and for the three and nine months ended June 30, 2014, the Part I incentive fee was $0.3 million and $0.6 million, respectively. At June 30, 2015, the Company had a liability on its Consolidated Statements of Assets and Liabilities in the amount of $0.8 million, reflecting the unpaid portion of the Part I incentive fee payable to the Investment Adviser.

The second part ("Part II incentive fee" or "capital gain incentive fee") of the incentive fee is determined and payable in arrears as of the end of each fiscal year (or upon termination of the investment advisory agreement, as of the termination date) and equals 20% of the Company's realized capital gains, if any, on a cumulative basis from inception through the end of each fiscal 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.

In accordance with GAAP, the Company had cumulatively accrued a Part II incentive fee as September 30, 2014 of $54,826 which was reversed due to unrealized losses on the investment portfolio during the nine months ended June 30, 2015. For the three and nine months ended June 30, 2014, there was no Part II incentive fee to the investment adviser. GAAP requires that the capital gains incentive fee accrual consider the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the investment advisory and management agreement. This GAAP accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital depreciation included in the calculation of the Part II incentive fee plus the aggregate cumulative unrealized capital appreciation. If such amount is positive at the end of a period, then GAAP requires the Company to record a capital gains incentive fee equal to 20% of such cumulative amount, less the aggregate amount of actual Part II incentive fees paid or capital gains incentive fees accrued under GAAP in all prior periods. As of June 30, 2015, the Company has not paid any Part II incentive fees since inception. The resulting accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior periods or a reversal of previously recorded expense if such cumulative amount is less than in the prior periods. If such cumulative amount is negative, then there is no accrual. There can be no assurance that such unrealized capital appreciation will be realized in the future.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Indemnification

The investment advisory agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of their respective duties or by reason of the reckless disregard of their respective duties and obligations, the Company's Investment Adviser and its officers, managers, agents, employees, controlling persons, members (or their owners) 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 the Investment Adviser's services under the investment advisory agreement or otherwise as the Company's Investment Adviser.

Administration Agreement

On January 1, 2015, the Company entered into an administration agreement with its administrator, FSC CT LLC ("FSC CT"), under substantially similar terms as its prior administration agreement with FSC CT, Inc. Under the administration agreement with FSC CT, administrative services are provided to the Company, including office facilities and equipment, and clerical, bookkeeping and recordkeeping services at such facilities. Under the administration agreement, FSC CT also performs or oversees the performance of the Company's required administrative services, which includes being responsible for the financial records which the Company is required to maintain and preparing reports to the Company's stockholders and reports filed with the SEC. In addition, FSC CT assists the Company in determining and publishing the Company's net asset value, overseeing the preparation and filing of the Company's tax returns and the printing and dissemination of reports to the Company's stockholders, and generally overseeing the payment of the Company's expenses and the performance of administrative and professional services rendered to the Company by others. For providing these services, facilities and personnel, the Company provides reimbursement for the allocable portion of overhead and other expenses incurred in connection with payments of rent at market rates and the Company's allocable portion of the costs of compensation and related expenses of the Company's chief financial officer and chief compliance officer and their staffs. Such reimbursement is at cost with no profit to, or markup by, FSC CT. FSC CT may also provide, on the Company's behalf, managerial assistance to the Company's portfolio companies. The administration agreement may be terminated by either party without penalty upon 60 days' written notice to the other party.

For the three and nine months ended June 30, 2015, the Company accrued administrative expenses of $0.2 million and $0.8 million, respectively. For the three and nine months ended June 30, 2014, the Company accrued administrative expenses of $0.2 million and $0.5 million, respectively. At both June 30, 2015 and September 30, 2014, $0.2 million was included in Due to FSC CT in the Consolidated Statements of Assets and Liabilities.

FIFTH STREET SENIOR FLOATING RATE CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Financial Highlights



	Three months ended June 30, 2015			Three months ended June 30, 2014			Nine months ended June 30, 2015			Nine months ended June 30, 2014
Net asset value at beginning of period	$	12.46		$	15.13		$	12.65		$	15.13
Net investment income (5)	0.22			0.28			0.80			0.77
Net unrealized depreciation on investments (5)	(0.08		)	—			(0.20		)	(0.09		)
Net realized gain (loss) on investments (5)	(0.07		)	(0.01		)	(0.12		)	0.03
Distributions to stockholders (5)	(0.30		)	(0.27		)	(0.90		)	(0.71		)
Net asset value at end of period	$	12.23		$	15.13		$	12.23		$	15.13
Per share market value at beginning of period	$	10.63		$	14.38		$	11.82		$	13.54
Per share market value at end of period	$	9.22		$	14.03		$	9.22		$	14.03
Total return (1)	(9.09		)%	(0.87		)%	(13.64		)%	6.90		%
Common shares outstanding at beginning of period	29,466,768			6,666,768			29,466,768			6,666,768
Common shares outstanding at end of period	29,466,768			6,666,768			29,466,768			6,666,768
Net assets at beginning of period	$	367,026,481		$	100,845,119		$	372,686,925		$	100,842,878
Net assets at end of period	$	360,327,291		$	100,837,884		$	360,327,291		$	100,837,884
Average net assets (2)	$	366,133,419		$	101,751,366		$	370,852,788		$	101,249.285
Ratio of net investment income to average net assets (3)	6.94		%	7.34		%	8.46		%	6.81		%
Ratio of total expenses to average net assets (3)	8.07		%	7.82		%	6.49		%	5.81		%
Ratio of portfolio turnover to average investments at fair value	5.65		%	34.79		%	15.73		%	89.34		%
Weighted average outstanding debt (4)	$	287,795,516		$	85,205,390		$	219,225,181		$	50,475,640
Average debt per share (5)	$	9.77		$	12.78		$	7.44		$	7.59

_______________



(1)	Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's DRIP. Total return is not annualized during interim periods.
(2)	Calculated based upon the weighted average net assets for the period.
(3)	Interim periods are annualized.
(4)	Calculated based upon the weighted average of loans payable for the period.
(5)	Calculated based upon weighted average shares outstanding for the period.

Note 13. Subsequent Events

The Company's management evaluates subsequent events through the date of issuance of the Consolidated Financial Statements. There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in, the Consolidated Financial Statements as of and for the nine months ended June 30, 2015.

Fifth Street Senior Floating Rate Corp.

Schedule of Investments in and Advances to Affiliates

Nine months ended June 30, 2015



Portfolio Company/Type of Investment (1)	Amount of Interest, Fees or Dividends Credited in Income (2)		Fair Value at October 1, 2014		Gross Additions (3)		Gross Reductions (4)			Fair Value at June 30, 2015
Control Investments
FSFR Glick JV LLC
Subordinated Note, LIBOR+8% cash due 10/20/2021	$	754,216	$	—	$	48,098,255	$	(43,237	)	$	48,055,018
87.5% equity interest (5)	74,375		—		5,344,251		(528,473		)	4,815,778
Total Control Investments	$	828,591	$	—	$	53,442,506	$	(571,710	)	$	52,870,796

This schedule should be read in connection with the Company's Consolidated Financial Statements, including the Consolidated Schedules of Investments and Notes to the Consolidated Financial Statements.

______________________


(1)	The principal amount and ownership detail as shown in the Company's Consolidated Schedules of Investments.


(2)	Represents the total amount of interest, fees and dividends credited to income for the portion of the year an investment was included in the Control or Affiliate categories.

(3)

Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on Investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in unrealized depreciation as well as the movement of an existing portfolio company into this category or out of a different category.

(4)

Gross reductions include decreases in the cost basis of investment resulting from principal payments or sales and exchanges of one or more existing securities for one or more new securities. Gross reductions also include net increases in unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.


(5)	Together with GF Equity Funding, the Company co-invests through FSFR Glick JV. FSFR Glick JV is capitalized as transactions are completed and all portfolio and investment decisions in respect to FSFR Glick JV must be approved by the FSFR Glick JV investment committee consisting of representatives of the Company and GF Equity Funding (with approval from a representative of each required).

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in connection with our Consolidated Financial Statements and the notes thereto included elsewhere in this quarterly report on Form 10-Q.

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:


•	our future operating results and dividend projections;


•	our business prospects and the prospects of our portfolio companies;


•	the impact of the investments that we expect to make;


•	the ability of our portfolio companies to achieve their objectives;


•	our expected financings and investments;


•	the adequacy of our cash resources and working capital; and


•	the timing of cash flows, if any, from the operations of our portfolio companies.

In addition, words such as "anticipate," "believe," "expect," "seek," "plan," "should," "estimate," "project" and "intend" indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Risk Factors" in our annual report on Form 10-K for the year ended September 30, 2014 and elsewhere in this quarterly report on Form 10-Q for the quarter ended June 30, 2015. Other factors that could cause actual results to differ materially include:


•	changes in the economy and the financial markets;


•	risks associated with possible disruption in our operations or the economy generally due to terrorism or natural disasters;


•	future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or RICs; and


•	other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.

We have based the forward-looking statements included in this quarterly report on Form 10-Q on information available to us on the date of this annual report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Except as otherwise specified, references to the "Company," "we," "us," and "our," refer to Fifth Street Senior Floating Rate Corp.

All amounts are in dollars, except share amounts, percentages and as otherwise indicated.

Overview

We were formed in May 2013 as a Delaware corporation and structured as an externally managed, closed-end, non-diversified management investment company. Our investment objective is to maximize our portfolio’s total return by generating current income from our debt investments while seeking to preserve our capital. We have elected to be regulated as a BDC under the 1940 Act. In addition, for U.S. federal income tax purposes we have elected to be treated, and intend to continue to qualify annually, as a RIC under Subchapter M of the Code. Also, we are an "emerging growth company," as defined in the JOBS Act, and intend to take advantage of the exemption for emerging growth companies allowing us to temporarily forego the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We do not intend to take advantage of other disclosure or reporting exemptions for emerging growth companies under the JOBS Act.

On July 17, 2013, we completed an initial public offering of 6,666,668 shares of our common stock at the public offering price of $15.00 per share. The proceeds of our initial public offering totaled $100.0 million and all offering costs were borne by our investment adviser, including $5.3 million of underwriting commissions and $0.4 million of other offering related expenses.

On August 19, 2014, we completed a follow-on public offering of 22,800,000 shares of its common stock at the public offering price of $12.91 per share. The net proceeds totaled $276.2 million after deducting underwriting commissions of $17.7 million and offering costs of $0.5 million. Our common stock is listed on the NASDAQ Global Select Market, where it trades under the symbol "FSFR."

Critical Accounting Policies

Basis of Presentation

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") requires management to make certain estimates and assumptions affecting amounts reported in the consolidated financial statements. We have identified investment valuation and revenue recognition as our most critical accounting estimates. We continuously evaluate our estimates, including those related to the matters described below. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows.

Investment Valuation

We are required to report our investments that are not publicly traded or for which current market values are not readily available at fair value. The fair value is deemed to be 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.

In accordance with authoritative accounting guidance, we perform detailed valuations of our debt and equity investments on an individual basis, using bond yield, market and income approaches as appropriate. In general, we utilize a bond yield method for the majority of our investments where there is no readily available market quotation, as long as it is appropriate. If, in our judgment, the bond yield approach is not appropriate, we may use the market approach, income approach, or, in certain cases, an alternative methodology potentially including market quotations, an asset liquidation model, expected recovery model or other alternative approaches.

Financial instruments with readily available quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment inherent in measuring fair value. As such, our capital markets group obtains and analyzes readily available market quotations provided by independent pricing services for all of our senior secured debt investments for which quotations are available. In determining the fair value of a particular investment, pricing services use observable market information, including both binding and non-binding indicative quotations. These investments are generally classified as Level 3 because the quoted prices may be indicative in nature for securities that are in an inactive market, may be for similar securities or may require adjustment for investment-specific factors or restrictions.

We evaluate the prices obtained from independent pricing services based on available market information and company specific data that could affect the credit quality and/or fair value of the investment. Investments for which market quotations are readily available may be valued at such market quotations. In order to validate market quotations, we look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. We do not adjust any of the prices received from these sources unless we have a reason to believe any such market quotations are not reflective of the fair value of an investment.

Market quotations may be deemed not to represent fair value where we believe that facts and circumstances applicable to an issuer, a seller or purchaser or the market for a particular security causes current market quotations not to reflect the fair value of the security, among other reasons. Examples of these events could include cases when a security trades infrequently causing a quoted purchase or sale price to become stale or in the event of a “fire sale” by a distressed seller. In these instances, we value such investments by using the valuation procedure that we use with respect to assets for which market quotations are not readily available (as discussed below).

If the quotation provided by the pricing service is based on only one or two market sources, we perform additional procedures to corroborate such information, generally including but not limited to, the bond yield approach discussed below and a quantitative and qualitative assessment of the credit quality and market trends affecting the portfolio company.

Under the bond yield approach, we use bond yield models to determine the present value of the future cash flow streams of our debt investments. We review various sources of transactional data, including private mergers and acquisitions involving debt investments with similar characteristics, and assess the information in the valuation process.

Under the market approach, we estimate the enterprise value of the portfolio companies in which we invest. There is no one methodology to estimate enterprise value and, in fact, for any one portfolio company, enterprise value is best expressed as a range of fair values from which we derive a single estimate of enterprise value. To estimate the enterprise value of a portfolio company, we analyze various factors, including the portfolio company's historical and projected financial results. Typically, private companies are valued based on multiples of EBITDA (earnings before interest, taxes, depreciation and amortization), cash flows, net income or revenues. We generally require portfolio companies to provide annual audited and quarterly or monthly unaudited financial statements, as well as annual projections for the upcoming fiscal year.

Under the income approach, we generally prepare and analyze discounted cash flow models based on our projections of the future free cash flows of the business.

We estimate the fair value of privately held warrants using a Black Scholes pricing model. At each reporting date, privately held warrants are valued based on an analysis of various factors and subjective assumptions including, but not limited to, the current stock price (by analyzing the portfolio company’s operating performance and financial condition and general market conditions), the expected period until exercise, expected volatility of the underlying stock price, expected dividends, and the risk free rate. Changes in the subjective input assumptions can materially affect the fair value estimates.

Our Board of Directors undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments:


•	The quarterly valuation process begins with each portfolio company or investment being initially valued either by our capital markets group for quoted investments or our finance department for unquoted investments;

•Preliminary valuations are then reviewed and discussed with principals of the Investment Adviser;


•	Separately, independent valuation firms engaged by the Board of Directors prepare preliminary valuations of our investments, on a selected basis, for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment, and submit the reports to us;


•	Our finance department compares and contrasts its preliminary valuations to the preliminary valuations of the independent valuation firms;


•	Our finance department prepares a valuation report for the Audit Committee of our Board of Directors;


•	The Audit Committee of our Board of Directors is apprised of the preliminary valuations of the independent valuation firms;


•	The Audit Committee of our Board of Directors reviews the preliminary valuations with the portfolio managers of the Investment Adviser, and our finance department responds and supplements the preliminary valuations to reflect any comments provided by the Audit Committee;


•	The Audit Committee of our Board of Directors makes a recommendation to our Board of Directors regarding the fair value of the investments in our portfolio; and


•	Our Board of Directors discusses valuations and determines the fair value of each investment in our portfolio in good faith.

The fair value of all of our investments at June 30, 2015 and September 30, 2014, was determined in good faith by our Board of Directors. Our Board of Directors has authorized the engagement of independent valuation firms to provide us with valuation assistance. We will continue to engage independent valuation firms to provide us with assistance regarding our determination of the fair value of selected portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter; however, our Board of Directors is ultimately and solely responsible for the valuation of our portfolio investments at fair value as determined in good faith pursuant to our valuation policy and a consistently applied valuation process.

In certain cases, an independent valuation firm may perform a portfolio company valuation which is reviewed and, where appropriate, relied upon by our Board of Directors in determining the fair value of such investment.

The percentages of our portfolio, at fair value, valued by independent valuation firms each period during the current and preceding fiscal years were as follows:



For the quarter ended December 31, 2013	34.1	%
For the quarter ended March 31, 2014	30.5	%
For the quarter ended June 30, 2014	56.6	%
For the quarter ended September 30, 2014	44.3	%
For the quarter ended December 31, 2014	54.1	%
For the quarter ended March 31, 2015 (1)	32.1	%
For the quarter ended June 30, 2015 (1)	23.8	%

__________

(1) The decrease from prior quarters is primarily related to the increased use of market quotations to value certain of our portfolio investments.

As of June 30, 2015 and September 30, 2014, approximately 83.7% and 72.7%, respectively, of our total assets represented investments in portfolio companies valued at fair value.

Revenue Recognition

Interest and Dividend Income

Interest income, adjusted for accretion of original issue discount, or OID, is recorded on the accrual basis to the extent that such amounts are expected to be collected. We stop accruing interest on investments when it is determined that interest is no longer collectible. Distributions of income from portfolio companies are generally recorded as dividend income on the ex-dividend date.

Fee Income

We receive a variety of fees in the ordinary course of business including servicing, advisory, structuring and prepayment fees which are classified as fee income and recognized as they are earned.

Payment-in-Kind (PIK) Interest

Although none of our investments bore PIK interest as of June 30, 2015, a portion of our loans may contain contractual PIK interest provisions in the future. The PIK interest, which represents contractually deferred interest, will be added to the loan balance that is generally due at the end of the loan term, and would generally be recorded on the accrual basis to the extent such amounts are expected to be collected. We would generally cease accruing PIK interest if there is insufficient value to support the accrual or if we do not expect the portfolio company to be able to pay all principal and interest due. Our decision to cease accruing PIK interest would involve subjective judgments and determinations based on available information about a particular portfolio company, including whether the portfolio company is current with respect to its payment of principal and interest on its loans and debt securities; monthly and quarterly financial statements and financial projections for the portfolio company; our assessment of the portfolio company's business development success, including product development, profitability and the portfolio company's overall adherence to its business plan; information obtained by us in connection with periodic formal update interviews with the portfolio company's management and, if appropriate, the private equity sponsor; and information about the general economic and market conditions in which the portfolio company operates. Based on this and other information, we would determine whether to cease accruing PIK interest on a loan or debt security. Our determination to cease accruing PIK interest on a loan or debt security would generally be made well before our full write-down of such loan or debt security. There were no investments on which we earned PIK interest for the three and nine months ended June 30, 2015 and June 30, 2014.

For a discussion of risks we are subject to if we were to acquire loans that bear PIK interest, see "Risk Factors — Risks Relating to Our Business and Structure — We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income," "— We may in the future choose to pay dividends in our own stock, in which case you may be required to pay tax in excess of the cash you receive" and "— Our incentive fee may induce our investment adviser to make speculative investments" in our annual report on Form 10-K for the year ended September 30, 2014. In addition, if it is subsequently determined that we will not be able to collect any previously accrued PIK interest, the fair value of our loans or debt securities would decline by the amount of such previously accrued, but uncollectible, PIK interest. The accrual of PIK interest on our debt investments would increase the recorded cost basis of these investments in our financial statements and, as a result, would increase the cost basis of these investments for purposes of computing the capital gains incentive fee payable by us to our Investment Adviser.

To maintain our status as a RIC, PIK income must be paid out to our stockholders in the form of distributions even though we have not yet collected the cash and may never collect the cash relating to the PIK interest. We did not have any accumulated PIK interest as of June 30, 2015 and September 30, 2014.

Portfolio Composition

Our investments principally consist of senior secured loans in privately-held companies. Our loans are typically secured by a first or second lien on the assets of the portfolio company and generally have terms of up to seven years (but an expected average life of between three and four years). We are currently focusing our origination efforts on a prudent mix of first lien and second lien loans which we believe will provide superior risk-adjusted returns while maintaining adequate credit protection. The mix may change over time based on market conditions and management's view of where the best risk-adjusted returns are available.

A summary of the composition of our investment portfolio at cost and fair value as a percentage of total investments is shown in the following tables:



	June 30, 2015		September 30, 2014
Cost:
Senior secured debt	91.49	%	99.83	%
Subordinated notes of FSFR Glick JV	7.59		—
LLC equity interests of FSFR Glick JV	0.84		—
Purchased equity	0.08		0.17
Total	100.00	%	100.00	%



	June 30, 2015		September 30, 2014
Fair value:
Senior secured debt	91.44	%	99.78	%
Subordinated notes of FSFR Glick JV	7.66		—
LLC equity interests of FSFR Glick JV	0.77		—
Purchased equity	0.10		0.17
Equity grants	0.03		0.05
Total	100.00	%	100.00	%

The industry composition of our portfolio at cost and fair value, respectively, as a percentage of total investments was as follows:



	June 30, 2015		September 30, 2014
Cost:
Internet software & services	21.70	%	9.02	%
Healthcare services	12.69		12.76
Multi-sector holdings	8.43		—
Integrated telecommunication services	7.63		6.13
Advertising	6.50		3.60
Diversified support services	5.84		1.16
Application software	4.60		24.60
Specialized consumer services	4.56		1.06
Pharmaceuticals	3.80		3.31
Education services	3.74		3.12
Data processing & outsourced services	3.43		2.00
Security & alarm services	3.04		—
Electronic equipment & instruments	2.19		—
Food retail	1.65		—
Research & consulting services	1.48		1.65
Diversified capital markets	1.39		1.81
IT consulting & other services	1.31		—
Construction & engineering	0.95		2.03
Wireless telecommunication services	0.92		1.00
Healthcare technology	0.78		2.65
Personal products	0.76		1.65
Oil & gas equipment & services	0.72		1.58
Computer hardware	0.66		1.53
Industrial machinery	0.63		—
Fertilizers & agricultural chemicals	0.60		1.32
Specialty chemicals	—		1.07
Casinos & gaming	—		4.43
Hotels, resorts & cruise lines	—		3.21
Healthcare equipment	—		2.97
Alternative carriers	—		1.66
Electrical components & equipment	—		1.66
Electronic components	—		1.53
Movies & entertainment	—		1.49
	100.00	%	100.00	%



Fair value:	June 30, 2015		September 30, 2014
Internet software & services	21.41	%	9.03	%
Healthcare services	12.48		12.73
Multi-sector holdings	8.42		—
Integrated telecommunication services	7.70		6.13
Specialized consumer services	4.59		1.06
Advertising	6.57		3.61
Diversified support services	5.87		1.15
Application software	4.67		24.59
Pharmaceuticals	3.87		3.30
Education services	3.71		3.13
Data processing & outsourced services	3.46		2.00
Security & alarm services	3.07		—
Electronic equipment & instruments	2.21		—
Food retail	1.67		—
Research & consulting services	1.50		1.65
Diversified capital markets	1.41		1.80
IT consulting & other services	1.32		—
Construction & engineering	0.96		2.03
Wireless telecommunication services	0.93		0.99
Healthcare technology	0.79		2.67
Personal products	0.77		1.63
Oil & gas equipment & services	0.71		1.57
Computer hardware	0.67		1.54
Industrial machinery	0.63		—
Fertilizers & agricultural chemicals	0.61		1.35
Casinos & gaming	—		4.43
Hotels, resorts & cruise lines	—		3.20
Healthcare equipment	—		2.97
Alternative carriers	—		1.66
Electrical components & equipment	—		1.62
Movies & entertainment	—		1.55
Electronic components	—		1.54
Specialty chemicals	—		1.07
	100.00	%	100.00	%

Portfolio Asset Quality

We employ a ranking system to assess and monitor the credit risk of our investment portfolio. We rank all investments on a scale from 1 to 4. The system is intended to reflect the performance of the borrower's business, the collateral coverage of the loan, and other factors considered relevant to making a credit judgment. We have determined that there should be an individual ranking assigned to each tranche of securities in the same portfolio company where appropriate. This may arise when the perceived risk of loss on the investment varies significantly between tranches due to their respective seniority in the capital structure.


•	Investment Ranking 1 is used for investments that are performing above expectations and/or capital gains are expected.


•	Investment Ranking 2 is used for investments that are performing substantially within our expectations, and whose risks remain materially consistent with the potential risks at the time of the original or restructured investment. All new investments are initially ranked 2.


•	Investment Ranking 3 is used for investments that are performing below our expectations and for which risk has materially increased since the original or restructured investment. The portfolio company may be out of compliance

with debt covenants and may require closer monitoring. To the extent that the underlying agreement has a PIK interest provision, investments with a ranking of 3 are generally those on which we are not accruing PIK interest.


•	Investment Ranking 4 is used for investments that are performing substantially below our expectations and for which risk has increased substantially since the original or restructured investment. Investments with a ranking of 4 are those for which some loss of principal is expected and are generally those on which we are not accruing cash interest.

The following table shows the distribution of our investments on the 1 to 4 investment ranking scale at fair value as of June 30, 2015 and September 30, 2014:



Investment Ranking	June 30, 2015					September 30, 2014
Investment Ranking	Fair Value		% of Portfolio		Leverage Ratio	Fair Value		% of Portfolio		Leverage Ratio
1	—		—		—	—		—		—
2	$	624,195,669	99.46	%	4.56	$	300,001,397	100.00	%	4.48
3	3,389,625		0.54		6.32	—		—		—
4	—		—		—	—		—		—
Total	$	627,585,294	100.00	%	4.57	$	300,001,397	100.00	%	4.48

We may from time to time modify the payment terms of our investments, either in response to current economic conditions and their impact on certain of our portfolio companies or in accordance with tier pricing provisions in certain loan agreements. Such modified terms may include increased PIK interest provisions and reduced cash interest rates. Any future modifications to our loan agreements, may limit the amount of interest income that we recognize from the modified investments, which may, in turn, limit our ability to make distributions to our stockholders. As of June 30, 2015, we had modified the payment terms of our investment in one portfolio company. As of September 30, 2014, we had modified the payment terms of our investment in one portfolio company.

Loans and Debt Securities on Non-Accrual Status

As of June 30, 2015, September 30, 2014 and June 30, 2014, there were no investments on which we had stopped accruing cash interest or OID income. For the three and nine months ended June 30, 2015 and June 30, 2014, there were no income non-accrual amounts.

FSFR Glick JV LLC

In October 2014, we entered into an LLC agreement with GF Equity Funding 2014 LLC ("GF Equity Funding") to form FSFR Glick JV LLC ("FSFR Glick JV"). On April 21, 2015, FSFR Glick JV began investing in senior secured loans of middle market companies. We co-invest in these securities with GF Equity Funding through our investment in FSFR Glick JV. FSFR Glick JV is managed by a four person Board of Directors, two of whom are selected by us and two of whom are selected by GF Equity Funding. FSFR Glick JV is capitalized as transactions are completed, and portfolio decisions and investment decisions in respect of the FSFR Glick JV must be approved by an investment committee of FSFR Glick JV consisting of one representative of us and one representative of GF Equity Funding (with approval of each required). The members provide capital to the FSFR Glick JV in exchange for LLC equity interests, and we and GF Debt Funding 2014 LLC, an entity advised by affiliates of GF Equity Funding ("GF Debt Funding"), provide capital to the FSFR Glick JV in exchange for subordinated notes (the "Subordinated Notes"). As of June 30, 2015, we and GF Equity Funding owned 87.5% and 12.5%, respectively, of the outstanding LLC interests and we and GF Debt Funding owned 87.5% and 12.5% respectively, of the Subordinated Notes.

We have determined that FSFR Glick JV is an investment company under ASC 946; however, in accordance with such guidance, we will generally not consolidate our investment in a company other than a wholly-owned investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we do not consolidate our noncontrolling interest in FSFR Glick JV.

As of June 30, 2015, FSFR Glick JV had total assets of $147.6 million. Our investment in FSFR Glick JV consisted of LLC equity interests of $5.3 million and Subordinated Notes of $48.1 million, at fair value as of June 30, 2015. The Subordinated Notes are junior in right of payment to the repayment of temporary contributions made by us to fund investments of FSFR Glick JV. FSFR Glick JV's portfolio consisted of middle market and other corporate debt securities of 20 "eligible portfolio companies" (as defined in the Section 2(a)(46) of the 1940 Act) as of June 30, 2015. As of June 30, 2015, the largest investment in a single company in FSFR Glick JV's portfolio at fair value was $14.6 million, and the five largest investments in portfolio companies in FSFR Glick JV totaled $57.7 million at fair value. The portfolio companies in FSFR Glick JV are in industries similar to those in which we may invest directly.

As of June 30, 2015, FSFR Glick JV had available capital of $100.0 million, $87.5 million of which was from us and the remaining $12.5 million from GF Equity Funding. Approximately $61.1 million in aggregate principal amount was funded as of June 30, 2015, relating to these commitments, of which $53.4 million was from us. As of June 30, 2015, we had commitments to fund Subordinated Notes to FSFR Glick JV of $78.8 million, of which $30.7 million was unfunded. As of June 30, 2015, we had commitments to fund LLC equity interests in FSFR Glick JV of $8.8 million, of which $3.4 million was unfunded. Additionally, FSFR Glick JV has a senior revolving credit facility with Credit Suisse AG, Cayman Island Branch ("Credit Suisse facility") with a stated maturity date of April 17, 2023, which permitted up to $200.0 million of borrowings as of June 30, 2015. Borrowings under the Credit Suisse facility were secured by all of the assets of FSFR Glick JV and all of the equity interests in FSFR Glick JV and bore interest at a rate equal to the 3-month LIBOR plus 2.5% per annum with no LIBOR floor as of June 30, 2015. Under the Credit Suisse facility, $73.3 million in borrowings were outstanding as of June 30, 2015.

Below is a summary of FSFR Glick JV's portfolio, followed by a listing of the individual loans in FSFR Glick JV's portfolio as of June 30, 2015:



		June 30, 2015
Senior secured loans (1)		$135,639,634
Weighted average current interest rate on senior secured loans (2)		7.19%
Number of borrowers in FSFR Glick JV		20
Largest loan to a single borrower (1)		$14,599,642
Total of five largest loans to borrowers (1)		$57,697,320

__________

(1) At fair value.

(2) Computed as the (a) annual interest on accruing senior secured loans divided by (b) total senior secured loans at fair value.

FSFR Glick JV Loan Portfolio as of June 30, 2015

Portfolio Company

Business Description

Investment Type

Maturity Date

Stated Interest Rate (1)

Principal

Fair Value (2)

Accruent, LLC (3)

Internet software & services

First Lien Term Loan

11/25/2019

LIBOR +6.25% (1% floor) cash

14,815,251

14,599,642

Ameritox Ltd. (3)

Healthcare services

First Lien Term Loan

6/23/2019

LIBOR+7.5% (1% floor) cash

7,844,104

7,757,279

Answers Corporation (3)

Internet software & services

First Lien Term Loan

10/1/2021

LIBOR+5.25% (1% floor) cash

7,979,950

6,876,044

Beyond Trust Software, Inc. (3)

Application software

First Lien Term Loan

9/25/2019

LIBOR+7% (1% floor) cash

13,700,293

13,574,541

Compuware Corporation (3)

Internet software & services

First Lien Term Loan B1

12/15/2019

LIBOR+5.25% (1% floor) cash

7,898,734

7,790,127

Idera, Inc. (3)

Internet software & services

First Lien Term Loan

11/5/2020

LIBOR+5.5% (0.5% floor) cash

3,180,000

3,154,108

Metamorph US 3, LLC (3)

Internet software & services

First Lien Term Loan

12/1/2020

LIBOR+5.5% (1% floor) cash

8,451,509

8,330,359

Motion Recruitment Partners LLC (3)

Diversified support services

First Lien Term Loan

2/13/2020

LIBOR+6% (1% floor) cash

9,812,500

9,700,130

NAVEX Global, Inc. (3)

Internet software & services

First Lien Term Loan

11/19/2021

LIBOR+4.75% (1% floor) cash

2,441,577

2,435,473

Teaching Strategies, LLC (3)

Education services

First Lien Term Loan

10/1/2019

LIBOR+5.5% (0.5% floor) cash

2,809,106

2,793,367

Teaching Strategies, LLC

Education services

First Lien Delayed Draw Term Loan

10/1/2019

LIBOR+5.5% (0.5% floor) cash

7,065,000

7,054,640

Trialcard Incorporated (3)

Healthcare services

First Lien Term Loan

12/31/2019

LIBOR+5.25% (1% floor) cash

7,844,098

7,770,446

Air Newco LLC

IT consulting & other services

First Lien Term Loan B

1/31/2022

LIBOR+5.5% (1% floor) cash

5,985,000

5,992,481

Fineline Technologies, Inc. (3)

Electronic equipment & instruments

First Lien Term Loan

2/25/2022

LIBOR+5% (1% floor) cash

8,910,000

LegalZoom.com, Inc. (3)

Specialized consumer services

First Lien Term Loan

5/13/2020

LIBOR+7% (1% floor) cash

9,975,000

GK Holdings, Inc.

IT consulting & other services

First Lien Term Loan

1/30/2021

LIBOR+5.5% (1% floor) cash

3,482,500

Vitera Healthcare Solutions, LLC

Healthcare technology

Second Lien Term Loan

11/4/2021

LIBOR+8.25% (1% floor) cash

3,000,000

2,955,000

TIBCO Software, Inc. (3)

Internet software & services

First Lien Term Loan

12/4/2020

LIBOR+5.5% (1% floor) cash

2,334,150

2,337,068

CM Delaware LLC

Advertising

First Lien Term Loan

3/18/2021

LIBOR+4.5% (1% floor) cash

2,172,500

2,169,795

New Trident Holdcorp, Inc. (3)

Healthcare services

First Lien Term Loan B

7/31/2019

LIBOR+5.25% (1.25% floor) cash

2,070,296

2,011,634

Central Security Group, Inc. (3)

Specialized consumer services

First Lien Term Loan

11/6/2020

LIBOR+5.25% (1% floor) cash

5,984,962

5,970,000

Total Portfolio Investments

137,756,530

135,639,634

__________

(1) Represents the current interest rate as of June 30, 2015. All interest rates are payable in cash, unless otherwise noted.

(2) Represents the fair value determined utilizing a similar process as us in accordance with ASC 820. However, the determination of such fair value is not included in the valuation process of the Board of Directors described elsewhere herein.

(3) This investment is held by both us and FSFR Glick JV at June 30, 2015.

The amortized cost and fair value of the Subordinated Notes held by us was $48.1 million as of June 30, 2015. The Subordinated Notes pay a weighted average interest rate of LIBOR plus 8.0% per annum and also entitle the holders thereof to receive a portion of the excess cash flow from the investment portfolio, which may result in a return greater than the contractual coupon. For the three months ended June 30, 2015, we earned interest income of $0.8 million on our investment in the Subordinated Notes. The cost and fair value of the LLC equity interests held by us was $5.3 million and $4.8 million as of June 30, 2015, respectively. We earned dividend income of $0.1 million for the three months ended June 30, 2015 with respect to our LLC equity interests. The LLC equity interests are dividend producing to the extent there is residual income to be distributed on a quarterly basis.

Below is certain summarized financial information for FSFR Glick JV as of June 30, 2015 and for the three months ended June 30, 2015:



	June 30, 2015
Selected Balance Sheet Information:
Investments in loans at fair value (cost $136,276,423)	$	135,639,634
Cash and cash equivalents	1,140,556
Restricted cash	8,148,007
Other assets	2,658,786
Total assets	$	147,586,983

Senior credit facility payable	$	73,257,636
Payables from unsettled transactions	12,531,987
Subordinated notes payable at fair value (proceeds $54,969,435)	54,920,021
Other liabilities	1,382,772
Total liabilities	$	142,092,416
Members' equity	5,494,567
Total liabilities and members' equity	$	147,586,983



	Three months ended June 30, 2015
Selected Statement of Operations Information:
Interest income	$	1,427,775
Total investment income	1,427,775
Interest expense	1,344,369
Other expenses	24,179
Total expenses (1)	1,368,548
Net unrealized depreciation on investments and subordinated notes payable	(587,375		)
Net loss	$	(528,148	)

__________

(1) There are no management fees or incentive fees charged at FSFR Glick JV.

FSFR Glick JV has elected to fair value the Subordinated Notes issued to us and GF Debt Funding under ASC 825 — Financial Instruments, or ASC 825. The Subordinated Notes are valued by calculating the net present value of the future expected cash flow streams using an appropriate risk-adjusted discount rate model.

During the three months ended June 30, 2015, we sold $136.9 million of senior secured debt investments at fair value to FSFR Glick JV in exchange for $83.5 million cash consideration. We recognized a $1.6 million realized loss on these transactions.

Discussion and Analysis of Results and Operations

Results of Operations

The principal measure of our financial performance is the net increase (decrease) in net assets resulting from operations, which includes net investment income (loss), net realized gain (loss) and net unrealized appreciation (depreciation). Net investment income is the difference between our income from interest, dividends, fees, and other investment income and total expenses. Net realized gain (loss) on investments is the difference between the proceeds received from dispositions of portfolio investments and their stated costs. Net unrealized appreciation (depreciation) is the net change in the fair value of our investment portfolio.

Comparison of the three and nine months ended June 30, 2015 and June 30, 2014

Total Investment Income

Total investment income includes interest income on our investments, fee income and other investment income. Fee income consists principally of servicing, advisory, structuring and prepayment fees.

Total investment income for the three months ended June 30, 2015 and June 30, 2014 was $13.7 million and $3.8 million, respectively. For the three months ended June 30, 2015, this amount primarily consisted of $10.6 million of interest income from portfolio investments and $3.0 million of fee income. For the three months ended June 30, 2014, this amount primarily consisted of $3.0 million of interest income from portfolio investments and $0.9 million of fee income.

Total investment income for the nine months ended June 30, 2015 and June 30, 2014 was $41.5 million and $9.6 million, respectively. For the nine months ended June 30, 2015, this amount primarily consisted of $28.1 million of interest income from portfolio investments and $13.2 million of fee income. For the nine months ended June 30, 2014, this amount primarily consisted of $6.9 million of interest income from portfolio investments and $2.7 million of fee income.

The weighted average cash yield on our debt investments at June 30, 2015 and September 30, 2014 was 7.64% and 7.24%, respectively.

The increase in our total investment income for the three and nine months ended June 30, 2015, as compared to the three and nine months ended June 30, 2014, was primarily attributable to higher average levels of outstanding debt investments, which was principally due to a net increase of 20 debt investments in our portfolio year over year and an increase in fees related to investment activity, partially offset by amortization repayments received on our debt investments.

Expenses

Total expenses for the three months ended June 30, 2015 and June 30, 2014 were $7.4 million and $2.0 million, respectively. Total expenses increased for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 by $5.4 million. This was due primarily to increases in:


•	Base management fee, which was primarily attributable to a $436.1 million increase in the fair value of the investment portfolio due to an increase in net investment fundings in the year-over-year period;


•	Part I incentive fee, which was attributable to a $5.0 million increase in pre-incentive fee net investment income for the year-over-year period; and


•	Interest expense, which was attributable to a $202.6 million increase in weighted average debt outstanding for the year-over-year period.

Net expenses for the nine months ended June 30, 2015 and June 30, 2014 were $18.0 million and $4.4 million, respectively. Net expenses increased for the nine months ended June 30, 2015 as compared to the nine months ended June 30, 2014 by $13.6 million. This was due primarily to increases in:


•	Base management fee, which was attributable to the increase in the fair value of the investment portfolio discussed above;


•	Part I incentive fee, which was attributable to a $22.3 million increase in pre-incentive fee net investment income for the year-over-year period; and


•	Interest expense, which was attributable to a $168.7 million increase in weighted average debt outstanding for the year-over-year period.

Net Investment Income

As a result of the $9.9 million increase in total investment income, as compared to the $5.4 million increase in total expenses, net investment income for the three months ended June 30, 2015 reflected a $4.5 million increase, as compared to the three months ended June 30, 2014.

As a result of the $31.9 million increase in total investment income, as compared to the $13.6 million increase in total expenses, net investment income for the nine months ended June 30, 2015 reflected a $18.3 million increase, as compared to the nine months ended June 30, 2014.

Realized Gain (Loss) on Investments

During the nine months ended June 30, 2015, we recorded investment realization events, including the following:


•	In October 2014, we received a cash payment of $6.8 million from Answers Corporation in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par (plus additional fees) and no realized gain or loss was recorded on the transaction;


•	In December 2014, we received a cash payment of $4.9 million from Survey Sampling International, LLC in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par and no realized gain or loss was recorded on the transaction;


•	In April 2015, we received a cash payment of $9.4 million from Travel Leaders Group, LLC in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par and no realized gain or loss was recorded on the transaction;


•	In April 2015, we received a cash payment of $11.2 million from IPC Systems, Inc. in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par and no realized gain or loss was recorded on the transaction;


•	In April 2015, we received a cash payment of $2.5 million from Symphony Teleca Services, Inc. in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par (plus additional fees) and no realized gain or loss was recorded on the transaction;


•	In May 2015, we received a cash payment of $4.1 million from GOBP Holdings, Inc. in full satisfaction of all obligations under the loan agreement. The debt investment was exited at par (plus additional fees) and no realized gain or loss was recorded on the transaction; and


•	During the nine months ended June 30, 2015, we received cash payments of $451.4 million in connection with full or partial sales of debt investments in the open market and recorded a net realized loss of $3.3 million.

During the nine months ended June 30, 2014, we received cash payments of $103.2 million in connection with payoffs and open market sales of debt securities and recorded a net realized gain of $0.2 million.

Net Unrealized Appreciation (Depreciation) on Investments

Net unrealized appreciation or depreciation is the net change in the fair value of our investments during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

During the three and nine months ended June 30, 2015, we recorded net unrealized depreciation of $2.5 million and $6.0 million, respectively. For the three months ended June 30, 2015 this consisted of $0.4 million of net unrealized depreciation on equity investments, $2.0 million of net unrealized depreciation on debt investments and $0.1 million of net reclassifications to realized gains on debt and equity investments (resulting in unrealized depreciation). For the nine months ended June 30, 2015, this consisted of $5.9 million of net unrealized depreciation on debt investments, $0.4 million of net unrealized depreciation on equity investments and $0.3 million of net reclassifications to realized loss on debt and equity investments (resulting in unrealized appreciation).

For the three months ended June 30, 2014, our net unrealized depreciation consisted of $57,640 of net unrealized depreciation on debt investments offset by $44,255 of net reclassifications to realized losses on debt investments (resulting in unrealized appreciation). For the nine months ended June 30, 2014, our net unrealized depreciation consisted of $666,422 of net unrealized depreciation on debt investments offset by $39,653 of net reclassifications to realized losses on debt investments (resulting in unrealized appreciation).

Financial Condition, Liquidity and Capital Resources

Cash Flows

We have a number of alternatives available to fund the growth of our investment portfolio and our operations, including, but not limited to, raising equity, increasing debt and funding from operational cash flow. Additionally, we may reduce investment size by syndicating a portion of any given transaction. We intend to fund our future distribution obligations through operating cash flow or with funds obtained through future equity and debt offerings or as we deem appropriate.

For the nine months ended June 30, 2015, we experienced a net decrease in cash and cash equivalents of $41.0 million. During that period, we used $309.8 million of cash in operating activities, primarily for the funding of $842.6 million of investments and net revolvers, partially offset by $505.8 million of principal payments and proceeds from the sale of

investments and $23.5 million of net investment income. During the same period, cash provided by financing activities was $268.8 million, primarily consisting of $127.4 million of net borrowings under credit facilities and $180.0 million of borrowings under our 2015 Debt Securitization, partially offset by $31.6 million of cash distributions paid and $6.1 million of deferred financing costs paid.

For the nine months ended June 30, 2014, we experienced a net decrease in cash and cash equivalents of $47.2 million. During that period, we used $132.3 million of cash in operating activities, primarily for the funding of $264.2 million of investments and net revolvers, partially offset by $121.0 million of amortization payments and proceeds from the sale of investments and $5.2 million of net investment income. During the same period, cash provided by financing activities was $85.1 million, primarily consisting of $89.8 million of net borrowings under our credit facility, net of $1.8 million of deferred financing costs paid and $2.9 million of dividends paid.

As of June 30, 2015, we had $66.4 million of cash and cash equivalents, $3.5 million of restricted cash, portfolio investments (at fair value) of $627.6 million, distribution payable of $2.9 million, payables from unsettled transactions of $74.0 million and unfunded commitments of $81.6 million. Pursuant to the terms of our credit agreement and 2015 Debt Securitization, we are restricted in terms of access to $2.5 million of restricted cash until such time as we submit required monthly reporting schedules. As of June 30, 2015, $1.0 million of restricted cash could be used only for the payment of interest expense on the notes issued in the 2015 Debt Securitization which is described in further detail in Note 6 to our Consolidated Financial Statements.

As of September 30, 2014, we had $107.4 million of cash and cash equivalents, $2.1 million of restricted cash, portfolio investments (at fair value) of $300.0 million, distribution payable of $8.8 million, payables from unsettled transactions of $27.9 million and unfunded commitments of $19.6 million.

Other Sources of Liquidity

We intend to continue to generate cash primarily from cash flows from operations, including interest earned, future borrowings and future offerings of our securities. Our primary use of funds is investments in our targeted asset classes and cash distributions to holders of our common stock.

Although we expect to fund the growth of our investment portfolio through the net proceeds from future equity offerings and issuances of senior securities or future borrowings to the extent permitted by the 1940 Act, our plans to raise capital may not be successful. In this regard, because our common stock has at times traded at a price below our then-current net asset value per share and we are limited in our ability to sell our common stock at a price below net asset value per share, we may be limited in our ability to raise equity capital.

In addition, we intend to distribute between 90% and 100% of our taxable income to our stockholders in order to satisfy the requirements applicable to RICs under Subchapter M of the Code. See "Regulated Investment Company Status and Dividends" below. Consequently, we may not have the funds or the ability to fund new investments, to make additional investments in our portfolio companies, to fund our unfunded commitments to portfolio companies or to repay borrowings. In addition, the illiquidity of our portfolio investments may make it difficult for us to sell these investments when desired and, if we are required to sell these investments, we may realize significantly less than their recorded value.

Also, as a business development company, we generally are required to meet a coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, to total senior securities, which include all of our borrowings and any outstanding preferred stock, of at least 200%. This requirement limits the amount that we may borrow. As of June 30, 2015, we were in compliance with this requirement. The amount of leverage that we employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing, such as the maturity, covenant package and rate structure of the proposed borrowings, our ability to raise funds through the issuance of shares of our common stock and the risks of such borrowings within the context of our investment outlook. Ultimately, we only intend to use leverage if the expected returns from borrowing to make investments will exceed the cost of such borrowing. To fund growth in our investment portfolio in the future, we anticipate needing to raise additional capital from various sources, including the equity markets and the securitization or other debt-related markets, which may or may not be available on favorable terms, if at all.

Significant Capital Transactions

The following table reflects the dividend distributions per share that our Board of Directors has declared, including shares issued under our DRIP, on our common stock since inception:



Frequency	Date Declared	Record Date	Payment Date	Amount per Share	Total Distribution	DRIP Shares Issued (1)	DRIP Shares Value
Quarterly	October 8, 2013	October 21, 2013	October 31, 2013	$0.01	$66,668	—	—
Quarterly	October 8, 2013	December 16, 2013	January 31, 2014	0.20	1,333,354	606	$8,288
Quarterly	January 3, 2014	March 31, 2014	April 15, 2014	0.23	1,533,357	469	6,734
Quarterly	February 11, 2014	June 30, 2014	July 15, 2014	0.27	1,800,027	1,279	17,924
Quarterly	May 12, 2014	September 15, 2014	October 15, 2014	0.30	8,840,030	17,127	191,093
Quarterly	September 9, 2014	December 15, 2014	January 15, 2015	0.30	8,840,030	23,183	242,678
Quarterly	November 20, 2014	April 2, 2015	April 15, 2015	0.30	8,840,030	28,296	307,794
Monthly	February 4, 2015	May 1, 2015	May 15, 2015	0.10	2,946,677	5,045	50,830
Monthly	February 4, 2015	June 1, 2015	June 15, 2015	0.10	2,946,677	5,296	53,237
Monthly	February 4, 2015	July 1, 2015	July 15, 2015	0.10	2,946,677	14,572	137,464
Monthly	February 4, 2015	August 3, 2015	August 17, 2015	0.10

______________

(1) Shares were purchased on the open market and distributed.

On July 17, 2013, we completed an initial public offering of 6,666,668 shares of our common stock at the public offering price of $15.00 per share. The proceeds totaled $100.0 million and all offering costs were borne by our investment adviser, including $5.3 million of underwriting commissions and $0.4 million of other offering related expenses.

On August 19, 2014, we completed a follow-on public offering of 22,800,000 shares of our common stock at the public offering price of $12.91. The net proceeds totaled $276.2 million after deducting underwriting commissions of $17.7 million and offering costs of $0.5 million.

Borrowings

Natixis Facility

On November 1, 2013, FS Senior Funding LLC, our wholly-owned, special purpose financing subsidiary entered into the $100 million revolving credit Natixis facility with the lenders referred to therein, Natixis, New York Branch, as administrative agent, and U.S. Bank National Association, as collateral agent and custodian.

Borrowings under the Natixis facility are subject to certain customary advance rates and accrue interest at a rate equal to either the applicable commercial paper rate (subject to an overall cap) plus 1.90% in the case of a lender that is a commercial paper conduit or otherwise the three-month LIBOR plus 2.00% per annum. In addition, there is a commitment fee payable on the undrawn amount under the credit facility equal to 1.00% (or 0.50% for the first six months after the closing date) of such undrawn amount. Interest and commitment fees are payable quarterly in arrears. The reinvestment period under the credit facility ended 18 months after the closing date and the credit facility will mature on November 1, 2021.

On October 16, 2014, we entered into agreements to expand the Natixis facility from $100 million to $200 million, including a $100 million term loan and a $100 million revolving credit facility. Fifth Third Bank ("Fifth Third") also joined the facility as a term loan lender. The $50 million term loan provided by Fifth Third is priced at LIBOR plus 2% per annum, and the $100 million revolving credit facility and $50 million term loan provided by Natixis, New York Branch, are priced at the applicable commercial paper rate plus 1.9% per annum. The facility maturity date remained unchanged.

As of June 30, 2015, we had no borrowings outstanding under the Natixis facility. Borrowings under the Natixis facility, were secured by all of the assets of FS Senior Funding LLC and all of our equity interest in FS Senior Funding LLC. We used the Natixis facility to fund a portion of FS Senior Funding LLC's loan origination activities and for general corporate purposes. Each loan origination under the Natixis facility was subject to the satisfaction of certain conditions. Our borrowings under the Natixis facility bore interest at a weighted average interest rate of 2.247% and 2.205% for the nine months ended June 30, 2015 and June 30, 2014, respectively. For the three and nine months ended June 30, 2015, we recorded interest expense of $2.7 million and $4.8 million, respectively, related to the Natixis facility. For the three and nine months ended June 30, 2014, we recorded interest expense of $0.5 million and $1.1 million, respectively, related to the Natixis facility.

On May 28, 2015, we completed a $309.0 million debt securitization transaction (the "2015 Debt Securitization"), the proceeds of which were used to repay the entire amount outstanding under the Natixis facility. In connection therewith, the Amended and Restated Loan and Servicing Agreement and other related documents governing the Natixis facility were also terminated. As such, we have no borrowings outstanding or capacity available under the Natixis facility as of June 30, 2015. Upon termination of the Natixis facility, we accelerated the $2.1 million remaining unamortized fee balance into interest expense.

Citibank Facility

On January 15, 2015, FS Senior Funding II LLC, our wholly-owned, special purpose financing subsidiary, entered into a $175 million revolving credit facility (the "Citibank facility") with the lenders referred to therein, Citibank, N.A., as administrative agent, and Wells Fargo Bank, N. A., as collateral agent and custodian.

As of June 30, 2015, we had $127.4 million outstanding under the Citibank facility. Borrowings under the Citibank facility are secured by all of the assets of FS Senior Funding II LLC and all of our equity interests in FS Senior Funding II LLC. We may use the Citibank facility to fund a portion of its loan origination activities and for general corporate purposes. Each loan origination under the Citibank facility is subject to the satisfaction of certain conditions. Our borrowings under the Citibank facility bore interest at a weighted average interest rate of 2.809% for the nine months ended June 30, 2015. For the three and nine months ended June 30, 2015, we recorded interest expense of $1.0 million and $1.5 million, respectively, related to the Citibank facility.

Debt Securitization

On May 28, 2015, we completed our $309.0 million 2015 Debt Securitization consisting of $222.6 million in senior secured notes ("2015 Notes") and $86.4 million of unsecured subordinated notes ("2015 Subordinated Notes"). The notes offered in the 2015 Debt Securitization were issued by FS Senior Funding Ltd. (the "2015 Issuer"), a wholly-owned subsidiary of us, through a private placement. The 2015 Notes are secured by the assets held by the 2015 Issuer. The 2015 Debt Securitization consists of $126.0 million Class A-T Senior Secured 2015 Notes of the 2015 Issuer which bear interest at three-month LIBOR plus 1.80%; $29.0 million Class A-S Senior Secured Notes of the 2015 Issuer which bear interest at a rate of three-month LIBOR plus 1.55%, with a step-up in spread to 2.10% to occur in October 2016; $20.0 million Class A-R Senior Secured Revolving Notes of the 2015 Issuer which bear interest at a rate of Commercial Paper plus 1.80%, collectively, the "Class A Notes;" and $25.0 million Class B Senior Secured Notes of the 2015 Issuer which bear interest at a rate of three-month LIBOR plus 2.65%. In partial consideration for the loans transferred to the 2015 Issuer as part of the 2015 Debt Securitization, we currently retain the entire $22.6 million of the Class C Senior Secured Notes (which we purchased at 98.0%) and the entire $86.4 million of the 2015 Subordinated Notes. The Class A Notes and Class B Notes are included in our June 30, 2015 Consolidated Statement of Assets and Liabilities as notes payable. As of June 30, 2015, the Class C Notes and the 2015 Subordinated Notes were eliminated in consolidation.

The proceeds of the private placement of the 2015 Notes, net of expenses, were used to repay the entire amount outstanding under the Natixis Facility. As part of the 2015 Debt Securitization, FS Senior Funding LLC, the borrower under the Natixis Facility, merged with and into 2015 Issuer, with the 2015 Issuer remaining as the surviving entity. Upon completion of the 2015 Debt Securitization, our Natixis credit facility was paid off and terminated.

We serve as collateral manager to the 2015 Issuer under a collateral management agreement. We are entitled to a fee for our services as collateral manager. The collateral management fee is eliminated in consolidation. We have retained Fifth Street Management LLC, our Investment Adviser, to furnish collateral management sub-advisory services to us pursuant to a sub-collateral management agreement. Fifth Street Management LLC intends to waive its right to such sub-collateral management fees in respect of the 2015 Debt Securitization.

The collateral management agreement does not include any incentive fee payable to us as collateral manager or payable to Fifth Street Management LLC as sub-advisor under the sub-collateral management agreement.

Through May 28, 2019, all principal collections received on the underlying collateral may be used by the 2015 Issuer to purchase new collateral under the direction of the Investment Adviser in its capacity as collateral manager of the 2015 Issuer and in accordance with our investment strategy. All note classes are scheduled to mature on May 28, 2025.

The aggregate accrued interest payable on the notes of the 2015 Issuer at June 30, 2015 was approximately $0.4 million. Deferred debt issuance costs consist of fees and expenses incurred in connection with debt offerings. As of June 30, 2015, we had a deferred debt issuance costs balance of approximately $2.9 million associated with the 2015 Debt Securitization.

For the three and nine months ended June 30, 2015, the components of interest expense, cash paid for interest, average interest rates and average outstanding balances for the 2015 Debt Securitization were as follows:



FS Senior Funding Ltd.	For the three months ended June 30, 2015
Interest expense	$	397,725
Amortization of debt issuance costs	48,351
Total interest and other debt financing expenses	$	446,076
Cash paid for interest expense	$	—
Annualized average interest rate	2.44		%
Average outstanding balance	$	64,565,217

The classes, interest rates, spread over LIBOR, cash paid for interest, stated interest expense and note discount expense of each of the Class A-T, A-S, A-R and B for the three months ended June 30, 2015 is as follows:



				Three Months Ended June 30, 2015
FS Senior Funding Ltd.	Stated Interest Rate	LIBOR Spread (basis points)		Cash Paid for Interest		Interest Expense
Class A-T Notes	2.15394%	180		$	—	$	256,319
Class A-S Notes	1.90394%	155	(1)	—		52,147
Class A-R Notes	2.15394%	180	(2)	—		18,333
Class B Notes	3.00394%	265		—		70,926
Class C Notes	3.60394%	325	(3)	—		—
Total				$	—	$	397,725

_______________________

(1) Step-up in spread to occur in October 2016.

(2) 1.0% undrawn fee. Class A-R Notes were fully undrawn during the period ending June 30, 2015.

(3) We hold all Class C Notes outstanding and thus have not recorded any related interest expense.

The classes, amounts, ratings and interest rates (expressed as a spread to three-month LIBOR) of the Class A, B, C and Subordinated Notes are as follows:

Description

Class A-T Notes

Class A-S Notes

Class A-R
Notes***

Class B Notes

Class C Notes

Subordinated Notes

Type

Senior Secured Floating Rate Term Debt

Senior Secured Floating Rate Revolver

Senior Secured Floating Rate Term Debt

Subordinated Term Notes

Amount Outstanding

$126,000,000

$29,000,000

$20,000,000

$25,000,000

$22,575,680

$86,400,000

Moody's Rating

"Aaa"

"Aa2"

S&P Rating

"AAA"

Interest Rate

LIBOR + 1.80%

LIBOR + 1.55%*

LIBOR + 1.80% **

LIBOR + 2.65%

LIBOR + 3.25%

Stated Maturity

May 28, 2025

_______________________

* Spread to step-up to 2.10% in October 2016.

** Carries a 1.0% undrawn fee.

*** Class A-R Notes were fully undrawn during the period ended June 30, 2015.

The proceeds of the private placement of the Class A Notes and the Class B Notes of the 2015 Securitization Issuer, net of discount and debt issuance costs, may be used to fund a portion of the 2015 Issuer's loan origination activities and for general corporate purposes. As part of the 2015 Debt Securitization, we entered into master loan sale agreements under which we agreed to directly or indirectly sell or contribute certain senior secured debt investments (or participation interests therein) to the 2015 Issuer, and to purchase or otherwise acquire the 2015 Subordinated Notes of the 2015 Issuer, as applicable. The 2015 Notes (other than the Class C Notes) are the secured obligations of the 2015 Issuer and indentures governing the 2015 Notes include customary covenants and events of default.

Upon completion of the ramp-up period on September 28, 2015, the 2015 Debt Securitization will require us to comply with certain monthly financial covenants including overcollateralization and interest coverage tests.

Off-Balance Sheet Arrangements

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30, 2015 and September 30, 2014, our only off-balance sheet arrangements consisted of $81.6 million and $19.6 million, respectively, of unfunded commitments to provide debt and equity financing to certain of our portfolio companies. Such commitments are subject to our portfolio companies' satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Statements of Assets and Liabilities and are not reflected on our Consolidated Statements of Assets and Liabilities.

A summary of the composition of unfunded commitments (consisting of revolvers, term loans and FSFR Glick JV subordinated notes and LLC equity interests) as of June 30, 2015 and September 30, 2014 is shown in the table below:



	June 30, 2015		September 30, 2014
FSFR Glick JV LLC	$	34,057,494	$	—
TIBCO Software, Inc.	5,300,000		—
Landslide Holdings, Inc.	5,000,000		5,000,000
Triple Point Group Holdings, Inc.	4,968,590		4,984,375
Executive Consulting Group, Inc.	4,800,000		—
All Web Leads, Inc.	4,090,954		—
BeyondTrust Software, Inc.	3,605,000		5,625,000
Motion Recruitment Partners LLC	2,900,000		—
Legalzoom.com, Inc.	2,607,018		—
Metamorph US 3, LLC	2,400,000		—
Idera, Inc.	2,400,000		—
PowerPlan, Inc.	2,100,000		—
Dynatect Group	1,800,000		—
My Alarm Center, LLC	1,744,727		—
Ameritox Ltd.	1,333,333		—
Teaching Strategies, LLC	1,200,000		—
TrialCard Incorporated	850,000		—
NextCare, Inc.	401,594		1,555,642
GTCR Valor Companies, Inc.	—		2,412,308
Total	$	81,558,710	$	19,577,325

Contractual Obligations

The following table reflects information pertaining to our debt outstanding under the Natixis facility, Citibank facility and 2015 Debt Securitization:



	Debt Outstanding as of September 30, 2014		Debt Outstanding as of June 30, 2015		Weighted average debt outstanding for the nine months ended June 30, 2015		Maximum debt outstanding for the nine months ended June 30, 2015
Natixis credit facility payable (1)	$	—	$	—	$	139,024,873	$	200,000,000
Citibank credit facility payable	—		127,366,000		58,442,066		127,366,000
2015 Debt Securitization	$	—	180,000,000		21,758,242		180,000,000
Total debt	$	—	$	307,366,000	$	219,225,181

_______________________

(1) The Natixis facility was terminated in connection with our 2015 Debt Securitization.

The following table reflects our contractual obligations arising from the Citibank Facility and 2015 Debt Securitization:



	Payments due by period as of June 30, 2015
	Total		< 1 year		1-3 years		3-5 years		> 5 years
Citibank facility	$	127,366,000	$	—	$	—	$	127,366,000	$	—
Interest due on Citibank facility	14,266,333		3,136,874		6,273,749		4,855,710		—
Notes payable	180,000,000		—		—		—		180,000,000
Interest due on notes payable	39,840,748		4,017,092		4,017,092		4,017,092		27,789,472
Total	$	361,473,081	$	7,153,966	$	10,290,841	$	136,238,802	$	207,789,472

Regulated Investment Company Status and Distributions

We have elected to be treated as a RIC under Subchapter M of the Code. As long as we continue to qualify as a RIC, we will not be taxed on our investment company taxable income or realized net capital gains, to the extent that such taxable income or gains are distributed, or deemed to be distributed, to stockholders on a timely basis.

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation until realized. Distributions declared and paid by us in a year may differ from taxable income for that year as such distributions may

include the distribution of current year taxable income or the distribution of prior year taxable income carried forward into and distributed in the current year. Distributions also may include returns of capital.

To maintain RIC tax treatment, we must, among other things, distribute, with respect to each taxable year, at least 90% of our investment company net taxable income (i.e., our net ordinary income and our realized net short-term capital gains in excess of realized net long-term capital losses, if any). As a RIC, we are also subject to a U.S. federal excise tax, based on distributive requirements of our taxable income on a calendar year basis (e.g., calendar year 2014). We anticipate timely distribution of our taxable income within the tax rules; however, we incurred a de minimis U.S. federal excise tax for calendar year 2013. We do not expect to incur a U.S. federal excise tax for calendar year 2014. We may incur a U.S. federal excise tax in future years.

We intend to distribute to our stockholders between 90% and 100% of our annual taxable income (which includes our taxable interest and fee income). In addition, we may retain for investment some or all of our net taxable capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) and treat such amounts as deemed distributions to our stockholders. If we do this, our stockholders will be treated as if they received actual distributions of the capital gains we retained and then reinvested the net after-tax proceeds in our common stock. Our stockholders also may be eligible to claim tax credits (or, in certain circumstances, tax refunds) equal to their allocable share of the tax we paid on the capital gains deemed distributed to them. To the extent our taxable earnings for a fiscal taxable year fall below the total amount of our dividends for that fiscal year, a portion of those dividend distributions may be deemed a return of capital to our stockholders.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage test for borrowings applicable to us as a business development company under the 1940 Act and due to provisions in our Natixis facility. If we do not distribute a certain percentage of our taxable income annually, we will suffer adverse tax consequences, including possible loss of our status as a RIC. We cannot assure stockholders that they will receive any distributions or distributions at a particular level.

In accordance with certain applicable Treasury regulations and private letter rulings issued by the Internal Revenue Service, a RIC may treat a distribution of its own stock as fulfilling its RIC distribution requirements if each stockholder may elect to receive his or her entire distribution in either cash or stock of the RIC, subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 20% of the aggregate declared distribution. If too many stockholders elect to receive cash, each stockholder electing to receive cash must receive a pro rata amount of cash (with the balance of the distribution paid in stock). In no event will any stockholder, electing to receive cash, receive less than 20% of his or her entire distribution in cash. If these and certain other requirements are met, for U.S federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. We have no current intention of paying dividends in shares of our stock in accordance with these Treasury regulations or private letter rulings.

Related Party Transactions

We have entered into an investment advisory agreement with Fifth Street Management. Messrs. Berman, Dimitrov and Owens, each an interested member of our Board of Directors, have a direct or indirect pecuniary interest in Fifth Street Management. Fifth Street Management is a registered investment adviser under the Investment Adviser's Act of 1940, that is partially and indirectly owned by Fifth Street Asset Management Inc. Pursuant to the investment advisory agreement, fees payable to our investment adviser will be equal to (a) a base management fee of 1.0% of the average value of our gross assets at the end of the two most recently completed quarters, which includes any borrowings for investment purposes and excludes cash, cash equivalents and restricted cash and (b) an incentive fee based on our performance. The incentive fee consists of two parts. The income incentive fee is calculated and payable quarterly in arrears and equals 20% of our "Pre-Incentive Fee Net Investment Income" for the immediately preceding quarter, subject to a preferred return, or "hurdle," and a "catch up" feature. The capital gains incentive fee is determined and payable in arrears as of the end of each fiscal year (or upon termination of the investment advisory agreement) and equals 20% of our "Incentive Fee Capital Gains," which equals our realized capital gains on a cumulative basis from inception through the end of the year, if any, 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 fee. The investment advisory agreement may be terminated by either party without penalty upon no fewer than 60 days' written notice to the other. During the three and nine months ended June 30, 2015, we incurred fees of $2.4 million and $8.8 million, respectively, under the investment advisory agreement. During the three and nine months ended June 30, 2014, we incurred fees of $0.8 million and $1.8 million, respectively, under the investment advisory agreement.

The Company serves as collateral manager to the 2015 Issuer under a collateral management agreement in connection with the 2015 Debt Securitization and will receive a fee for providing these services. We have retained Fifth Street

Management LLC to furnish collateral management sub-advisory services to us pursuant to a sub-collateral management agreement. Fifth Street Management LLC will be entitled to receive 100% of the collateral management fees paid to us under the collateral management agreement.

Pursuant to the administration agreement with FSC CT LLC, a wholly-owned subsidiary of our Investment Adviser, FSC CT will furnish us with the facilities, including our principal executive offices and administrative services necessary to conduct our day-to-day operations, including equipment, clerical, bookkeeping and recordkeeping services at such facilities. In addition, FSC CT assists us in connection with the determination and publishing of our net asset value, the preparation and filing of tax returns and the printing and dissemination of reports to our stockholders. We pay FSC CT its allocable portion of overhead and other expenses incurred by FSC CT in performing its obligations under the administration agreement, including a portion of the rent at market rates and the compensation of our chief financial officer and chief compliance officer and their respective staffs. The administration agreement may be terminated by either party without penalty upon no fewer than 60 days' written notice to the other. During the three and nine months ended June 30, 2015, we incurred expenses of $0.2 million and $0.8 million, respectively, under the administration agreements. During the three and nine months ended June 30, 2014, we incurred expenses of $0.2 million and $0.5 million, respectively, under the administration agreements.

We have also entered into a license agreement with Fifth Street Capital LLC pursuant to which Fifth Street Capital LLC has agreed to grant us a non-exclusive, royalty-free license to use the name "Fifth Street." Under this agreement, we will have a right to use the "Fifth Street" name for so long as Fifth Street Management LLC or one of its affiliates remains our Investment Adviser. Other than with respect to this limited license, we will have no legal right to the "Fifth Street" name. Fifth Street Capital LLC is controlled by Mr. Tannenbaum, our Investment Adviser's chief executive officer.

Recent Developments

Effective July 10, 2015, our Board of Directors promoted Steven M. Noreika to Chief Financial Officer, replacing Richard A. Petrocelli.

On August 5, 2015, our Board of Directors declared the following dividends:


•	$0.075 per share, payable on September 15, 2015 to stockholders of record on September 4, 2015;


•	$0.075 per share, payable on October 15, 2015 to stockholders of record on October 6, 2015; and


•	$0.075 per share, payable on November 16, 2015 to stockholders of record on November 5, 2015.

Recently Issued Accounting Standards

See Note 2 to the Consolidated Financial Statements for a description of recent accounting pronouncements, including the expected dates of adoption and the anticipated impact on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments, cash and cash equivalents and idle funds investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks and limits by means of reliable administrative and information systems and other policies and programs. Our investment income will be affected by changes in various interest rates, including LIBOR and prime rates, to the extent our debt investments include floating interest rates. In accordance with applicable loan agreements, certain of our portfolio companies may elect benchmark indices with various tenors on which to base the floating interest rate accruals on their loans, either in whole or in part. For example, if a borrower elects to pay interest at a floating rate that is indexed to the 30-day or 90-day LIBOR rate, the interest rate on the borrowing would be locked at such interest rate for 30 days or 90 days, respectively, at which time the borrower would again elect a rate for the subsequent period. Further, certain of our portfolio companies may elect from time to time to split the total principal balances of their loans between multiple benchmark indices for a given period. In addition, our investments are carried at fair value as determined in good faith by our Board of Directors in accordance with the 1940 Act (See "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies — Investment Valuation"). Our valuation methodology utilizes discount rates in part in valuing our investments, and changes in those discount rates may have an impact on the valuation of our investments.

As of June 30, 2015, 100% of our debt investment portfolio (at cost and fair value) bore interest at floating rates and had interest rate floors between 0.5% and 1.75%. As of September 30, 2014, 100% of our debt investment portfolio (at cost and fair value) bore interest at floating rates and had interest rate floors between 1% and 2%.

Based on our Consolidated Statement of Assets and Liabilities as of June 30, 2015, the following table shows the approximate annualized increase (decrease) in components of net assets resulting from operations of hypothetical base rate

changes in interest rates, assuming no changes in our investment and capital structure. However, there can be no assurances our portfolio companies will be able to meet their contractual obligations at any or all levels of increases in interest rates.



Basis point increase(1)	Interest Income		Interest Expense			Net increase (decrease)
500	$	27,049,259	$	(15,368,300	)	$	11,680,959
400	20,829,607		(12,294,640		)	8,534,967
300	14,609,956		(9,220,980		)	5,388,976
200	8,390,304		(6,147,320		)	2,242,984
100	2,182,671		(3,073,660		)	(890,989		)

__________________


(1)	A decline in interest rates would not have a material impact on our Consolidated Financial Statements.

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on this review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates. The following table shows a comparison of the interest rate base for our interest-bearing cash and outstanding investments, at principal, and our outstanding borrowings as of June 30, 2015 and September 30, 2014:



	June 30, 2015				September 30, 2014
	Interest Bearing Cash and Investments		Borrowings		Interest Bearing Cash and Investments
Money market rate	$	69,903,461	$	—	$	109,557,165
Prime rate	6,308,596		—		5,177,783
LIBOR:
30 day	161,860,549		—		29,929,483
60 day	27,918,333		—		3,221,875
90 day	433,425,200		180,000,000		261,536,008
180 day	—		127,366,000		—
Fixed rate	—		—		—
Total	$	699,416,139	$	307,366,000	$	409,422,314

Item 4. Controls and Procedures

All controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Securities Exchange Act of 1934). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, in timely identifying, recording, processing, summarizing, and reporting any material information relating to us that is required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934.

There have been no changes in our internal control over financial reporting that occurred during the three months ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, we are currently not a party to any pending material legal proceedings.

Item 1A. Risk Factors

Except as indicated below, there have been no material changes during the nine months ended June 30, 2015 to the risk factors discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2014.

Our portfolio may be concentrated in a limited number of industries, which may subject us to a risk of significant loss if there is a downturn in a particular industry in which a number of our investments are concentrated.

As of June 30, 2015, our investments in the internet software and services industry represented approximately 21% of the fair value of our portfolio and our investments in the healthcare services industry represented approximately 12% of the fair value of our portfolio. If an industry in which we have significant investments suffers from adverse business or economic conditions, as these industries have to varying degrees, a material portion of our investment portfolio could be affected adversely, which, in turn, could adversely affect our financial position and results of operations.

Healthcare companies often must obtain and maintain regulatory approvals to market many of their products, change prices for certain regulated products and consummate some of their acquisitions and divestitures. Delays in obtaining or failing to obtain or maintain these approvals could reduce revenue or increase costs. Policy changes on the local, state and federal level, such as the expansion of the government’s role in the healthcare arena and alternative assessments and tax increases specific to the healthcare industry or healthcare products as part of federal health care reform initiatives, could fundamentally change the dynamics of the healthcare industry.

We are subject to risks associated with the 2015 Debt Securitization.

As a result of the 2015 Debt Securitization, we are subject to a variety of risks, including those set forth below. We use the term “debt securitization” to describe a form of secured borrowing under which an operating company (sometimes referred to as an “originator” or “sponsor”) acquires or originates mortgages, receivables, loans or other assets that earn income, whether on a one-time or recurring basis (collectively, “income producing assets”), and borrows money on a non-recourse basis against a legally separate pool of loans or other income producing assets. In a typical debt securitization, the originator transfers the loans or income producing assets to a single-purpose, bankruptcy-remote subsidiary (also referred to as a “special purpose entity”), which is established solely for the purpose of holding loans and income producing assets and issuing debt secured by these income producing assets. The special purpose entity completes the borrowing through the issuance of notes secured by the loans or other assets. The special purpose entity may issue the notes in the capital markets to a variety of investors, including banks, non-bank financial institutions and other investors. In the 2015 Debt Securitization, institutional investors purchased the 2015 Notes issued by FS Senior Funding Ltd., our wholly-owned subsidiary, in a private placement.

Restructurings of investments of our 2015 Debt Securitization may decrease their value and reduce amounts payable on the 2015 Notes.

We and FS Senior Funding Ltd. have entered into a collateral management agreement, an agreement entered into between a manager and a debt securitization vehicle or similar issuer, which sets forth the terms and conditions pursuant to which the manager provides advisory and/or management services with respect to the client’s securities portfolio. Under the collateral management agreement, we serve as collateral manager of the 2015 Debt Securitization. In addition, we retained our Investment Adviser to furnish collateral management sub-advisory services to us pursuant to a sub-collateral management

agreement with our Investment Adviser. Our Investment Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended.

We have broad authority to direct and supervise the investment and reinvestment of the investments held by the 2015 Debt Securitization, which may include exercising or enforcing, or refraining from exercising or enforcing, any or all of the 2015 Debt Securitization’s rights in connection with the execution of amendments, waivers, modifications and other changes to the investment documentation in accordance with the collateral management agreement. During periods of economic uncertainty and recession, the incidence of amendments, waivers, modifications and restructurings of investments may increase. Such amendments, waivers, modifications and other restructurings will change the terms of the investments and in some cases may result in the 2015 Debt Securitization holding assets not meeting its criteria for investments. This could adversely impact the coverage tests under the indenture governing the 2015 Notes. Any amendment, waiver, modification or other restructuring that reduces the 2015 Debt Securitization’s compliance with certain financial tests will make it more likely that the 2015 Debt Securitization will need to utilize cash to pay down the unpaid principal amount of the 2015 Notes to cure any breach in such test instead of making payments on the 2015 Notes. Any such use of cash would reduce distributions available and delay the timing of payments to us.

We cannot assure you that any particular restructuring strategy pursued by us or any successor collateral manager will maximize the value of or recovery on any investment. Any restructuring can fundamentally alter the nature of the related investment, and restructurings are not subject to the same underwriting standards that are employed in connection with the origination or acquisition of investments. Any restructuring could alter, reduce or delay the payment of interest or principal on any investment, which could delay the timing and reduce the amount of payments made to us. Restructurings of investments might also result in extensions of the term thereof, which could delay the timing of payments made to us.

The 2015 Debt Securitization depends on the managerial expertise available to the collateral manager and its key personnel.

The 2015 Debt Securitization’s activities are directed by us (or any successor collateral manager). We have retained our Investment Adviser to furnish collateral management sub-advisory services. In our capacity as holder of the 2015 Notes, we are generally not able to make decisions with respect to the management, disposition or other realization of any investment, or other decisions regarding the business and affairs of the 2015 Debt Securitization. Consequently, the success of the 2015 Debt Securitization will depend, in large part, on the financial and managerial expertise of our Investment Adviser’s investment professionals. There can be no assurance that such investment professionals will continue to serve in their current positions or continue to be authorized persons of the investment adviser. Although such investment professionals will devote such time as they determine in their discretion is reasonably necessary to fulfill the collateral manager’s obligations to the 2015 Debt Securitization effectively, they will not devote all of their professional time to the affairs of the 2015 Debt Securitization.

Our ability to transfer the 2015 Notes is limited.

The notes issued pursuant to the 2015 Debt Securitization are illiquid investments and subject to extensive transfer restrictions, and no party is under any obligation to make a market for the notes. There is no market for the notes, and we may not be able to sell or otherwise transfer the 2015 Notes at their fair value, or at all, in the event that we determine to sell them. During economic downturns, notes issued in securitization transactions may experience high volatility and significant fluctuations in market value. Additionally, some potential buyers of such notes now view securitization products as an inappropriate investment, thereby reducing the number of potential buyers and/or potentially affecting liquidity in the secondary market.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 5. Other Information

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 5, 2015, Alexander C. Frank resigned as a member of the Board of Directors of the Company, effective August 5, 2015. Mr. Frank will continue to serve as the chief operating officer and chief financial officer of Fifth Street Asset Management Inc. (NASDAQ: FSAM) (“FSAM”).

Following Mr. Frank’s resignation, the Board of Directors announced that it appointed Todd G. Owens, President of the Company, to serve on the Board of Directors from August 6, 2015 until the Company’s 2017 Annual Meeting of Stockholders or until his successor is duly elected and qualified.

Todd G. Owens has served as the Company’s president since September 2014, a member of Fifth Street Finance Corp’s Board of Directors since November 2014 and as Fifth Street Finance Corp’s chief executive officer since January 2015. Mr. Owens has also served as co-president of FSAM since September 2014. Prior to joining the Company in September 2014, Mr. Owens spent 24 years at Goldman, Sachs & Co, where he became a managing director in 2001 and a partner in 2008. While at

Goldman, Sachs & Co., he also served as Head of the West Coast Financial Institutions Group (FIG) for 15 years, Head of the Specialty Finance Group for nearly 10 years and was a senior member of the Bank Group. He holds a B.A. in history and political economy from Williams College. Mr. Owens serves as a trustee for Good Samaritan Hospital in Los Angeles and for City Year Los Angeles. Mr. Owens brings with him experience in a broad range of industries including commercial finance, asset management, alternative asset management, commercial banking and business development companies. The foregoing qualifications led to our conclusion that Mr. Owens should serve as a member of the Board of Directors.

There are no arrangements or understandings between Mr. Owens and any other persons pursuant to which he was selected as a director. There are no current or proposed transactions between the Company and Mr. Owens or his immediate family members that would require disclosure under Item 404(a) of Regulation S-K promulgated by the SEC.

Item 6. Exhibits



Exhibit Number		Description of Exhibit

10.1*		Class A-R Note Purchase Agreement, by and among FS Senior Funding Ltd., as issuer, FS Senior Funding CLO LLC, as co-issuer, Natixis, New York Branch, as Class A-R Note Agent, and each of the Class A-R Noteholders parties thereto, dated as of May 28, 2015.

10.2*		Master Transfer Agreement by and between Fifth Street Senior Floating Rate Corp., as the seller, and FS Senior Funding Ltd., as the buyer, dated as of May 28, 2015.

10.3*		Collateral Management Agreement by and between FS Senior Funding Ltd., as issuer, and Fifth Street Senior Floating Rate Corp., as collateral manager, dated as of May 28, 2015.

10.4*		Sub-Advisory Agreement between Fifth Street Senior Floating Rate Corp., as collateral manager, and Fifth Street Management LLC, as sub-advisor, dated as of May 28, 2015.

31.1*		Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

_______________________

* Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




FIFTH STREET SENIOR FLOATING RATE CORP.

By:		/s/ Ivelin M. Dimitrov
		Ivelin M. Dimitrov
		Chief Executive Officer

By:		/s/ Steven M. Noreika
		Steven M. Noreika
		Chief Financial Officer

Date: August 10, 2015

EXHIBIT INDEX



Exhibit Number		Description of Exhibit

10.1*		Class A-R Note Purchase Agreement, by and among FS Senior Funding Ltd., as issuer, FS Senior Funding CLO LLC, as co-issuer, Natixis, New York Branch, as Class A-R Note Agent, and each of the Class A-R Noteholders parties thereto, dated as of May 28, 2015.

10.2*		Master Transfer Agreement by and between Fifth Street Senior Floating Rate Corp., as the seller, and FS Senior Funding Ltd., as the buyer, dated as of May 28, 2015.

10.3*		Collateral Management Agreement by and between FS Senior Funding Ltd., as issuer, and Fifth Street Senior Floating Rate Corp., as collateral manager, dated as of May 28, 2015.

10.4*		Sub-Advisory Agreement between Fifth Street Senior Floating Rate Corp., as collateral manager, and Fifth Street Management LLC, as sub-advisor, dated as of May 28, 2015.

31.1*		Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

_______________________

* Filed herewith.

EXECUTION VERSION

CLASS A‑R NOTE PURCHASE AGREEMENT

dated as of May 28, 2015

by and among

FS SENIOR FUNDING LTD.,
as Issuer,

FS SENIOR FUNDING CLO LLC,
as Co-Issuer,

NATIXIS, NEW YORK BRANCH,
as Class A‑R Note Agent,

and

EACH OF THE CLASS A‑R NOTEHOLDERS PARTY HERETO



TABLE OF CONTENTS
		Page
ARTICLE I
DEFINITIONS
Section 1.01	Defined Terms	2
Section 1.02	Terms Generally	4

ARTICLE II
PURCHASE, SALE, PAYMENT AND DELIVERY
Section 2.01	Purchase, Sale, Payment and Delivery of the Class A-R Notes on the Closing Date	4

ARTICLE III
CLASS A-R COMMITMENTS AND BORROWINGS
Section 3.01	Class A-R Commitments	5
Section 3.02	Class A-R Borrowings	5
Section 3.03	Requests for Borrowings	6
Section 3.04	Funding of Borrowings	8
Section 3.05	Termination and Reduction of Commitments	8
Section 3.06	Prepayment of Borrowings	9
Section 3.07	Procedures with Respect to Rating Requirement	11
Section 3.08	Class A-R Commitment Fee; Breakage Costs	13
Section 3.09	Class A-R Commitment Register	14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01	Representations and Warranties	15
Section 4.02	Several Representations of Each Class A-R Noteholder	16
ARTICLE V
CONDITIONS
Section 5.01	Closing Date	20
Section 5.02	Conditions to Each Class A-R Borrowing	20
ARTICLE VI
THE CLASS A-R NOTE AGENT
Section 6.01	Appointment	21
Section 6.02	Certain Duties and Responsibilities	22
Section 6.03	Compensation	23
Section 6.04	Resignation and Removal; Appointment of a Successor	24
Section 6.05	Acceptance of Appointment by Successor	25
Section 6.06	Class A-R Note Agent Criteria	25
ARTICLE VII
MISCELLANEOUS
Section 7.01	Notices	26
Section 7.02	Waivers, Amendments	26
Section 7.03	Successors and Assigns	27

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Section 7.04	Survival	28
Section 7.05	Counterparts; Integration; Effectiveness	29
Section 7.06	Severability	29
Section 7.07	Governing Law, Jurisdiction; Consent to Service of Process; Waiver of Jury Trial Right	29
Section 7.08	Benefits of Indenture	30
Section 7.09	Headings	30
Section 7.10	Non-Recourse Obligations	30
Section 7.11	Non-Petition	30
Section 7.12	Issuer Orders	31
Section 7.13	Special Provisions Applicable to CP Conduits	31

SCHEDULE 2.01	LIST OF CLASS A-R NOTEHOLDERS AND THEIR COMMITMENTS
SCHEDULE 2.02	LIST OF SHORT SETTLEMENT COMMITMENTS

EXHIBIT A	FORM OF CLASS A-R SALE AND TRANSFER AGREEMENT
EXHIBIT B	FORM OF BORROWING REQUEST
EXHIBIT C	FORM OF CLASS A-R PREPAYMENT NOTICE

SCHEDULE 2.01 LIST OF CLASS A‑R NOTEHOLDERS AND THEIR COMMITMENTS
SCHEDULE 2.02 LIST OF SHORT SETTLEMENT COMMITMENTS

EXHIBIT A FORM OF CLASS A‑R SALE AND TRANSFER AGREEMENT

EXHIBIT B FORM OF BORROWING REQUEST

EXHIBIT C FORM OF CLASS A‑R PREPAYMENT NOTICE

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CLASS A‑R NOTE PURCHASE AGREEMENT (as amended, restated, supplemented or modified from time to time, this "Agreement") dated as of May 28, 2015, among:

(1) FS SENIOR FUNDING LTD., an exempted company incorporated with limited liability in the Cayman Islands (the "Issuer");

(2) FS SENIOR FUNDING CLO LLC, a limited liability company formed and existing under the laws of the State of Delaware (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers");

(3) each of the CLASS A‑R NOTEHOLDERS party hereto from time to time; and

(4) NATIXIS, NEW YORK BRANCH, as agent for the Class A‑R Noteholders (in such capacity, together with its successors in such capacity, the "Class A‑R Note Agent").

WHEREAS, the Issuer, the Co-Issuer and Wells Fargo Bank, National Association, as Trustee, are party to an Indenture, dated as of May 28, 2015, as modified and supplemented and in effect from time to time (the "Indenture"), pursuant to which the Co‑Issuers (or the Issuer, as applicable) have issued the Notes (as defined in the Indenture), including the Class A‑R Senior Secured Revolving Floating Rate Notes Due 2025 (the "Class A‑R Notes"), in an aggregate principal amount up to U.S.$20,000,000;

WHEREAS, the Co-Issuers, the Class A‑R Note Agent and the Class A-R Noteholders from time to time of the Class A‑R Notes wish to evidence certain agreements relating to, among other things, the right of the Co-Issuers to borrow, repay and re‑borrow amounts under the Class A‑R Notes during the Class A-R Commitment Period and the appointment of the Class A‑R Note Agent as agent for the Class A‑R Noteholders, all as provided in this Agreement and in the Indenture;

WHEREAS, the Class A‑R Noteholders are willing, on the terms and subject to the conditions hereinafter set forth, to extend commitments to make advances of funds to the Co-Issuers during the Class A-R Commitment Period to fund Class A‑R Borrowings (as defined herein); and

WHEREAS, the proceeds of advances made by the Class A‑R Noteholders to fund Class A‑R Borrowings hereunder will be used by the Issuer to fund Exposure Amounts under Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations included in the Assets, including by funding the Revolver Funding Account to cover anticipated draws on any such Revolving Collateral Obligations or Delayed Drawdown Collateral Obligations to the extent permitted or required under the Indenture, or to purchase additional Collateral Obligations.

Accordingly, in consideration of the covenants contained in this Agreement, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Defined Terms. Capitalized terms used but not defined in this Agreement shall have the respective meanings ascribed thereto in the Indenture, which meanings shall prevail in the case of an inconsistency. As used in this Agreement, the following terms shall have the meanings specified below:

"Agency Fee": The fee payable to the Class A-R Note Agent in the amount of $5,000 per annum.

"Borrowing Request": The meaning specified in Section 3.03(a).

"Class A‑R Borrowing" or "Borrowing": The meaning specified in Section 3.02(a).

"Class A‑R Borrowing Conditions": The meaning specified in Section 5.02.

"Class A‑R Borrowing Date": Each day on which a Class A‑R Borrowing is made, which day will be a Business Day occurring during the Class A-R Commitment Period.

"Class A‑R Commitment Register": The meaning specified in Section 3.09(a).

"Class A‑R Commitment Registrar": The meaning specified in Section 3.09(b).

"Class A‑R Commitments": The commitments (whether or not utilized) of a Class A‑R Noteholder to fund a portion of each Class A‑R Borrowing pursuant to this Agreement from time to time in an aggregate amount up to but not exceeding the commitment amount set forth for such Class A‑R Noteholder in Schedule 2.01 attached hereto; provided, that each Class A‑R Commitment must be undertaken in a minimum amount of not less than U.S.$1,000,000, unless otherwise agreed by the Issuer and the Collateral Manager, and may be (i) reduced from time to time as provided in Section 3.05 and (ii) adjusted from time to time pursuant to transfers by or to a Class A‑R Noteholder as provided in Section 7.03. The aggregate amount of Class A‑R Commitments as of the date of this Agreement is U.S.$20,000,000.

"Class A‑R Initial Noteholder": Versailles Assets LLC.

"Class A‑R Note Agent": Initially, Natixis, New York Branch.

"Class A‑R Note Interest": The meaning specified in Section 3.02(d).

"Class A‑R Noteholders": The Class A‑R Initial Noteholder and each other Person who is or becomes a party to this Agreement by virtue of its acquisition of any Class A‑R Notes and constitutes a Class A‑R Noteholder under the Indenture.

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"Class A‑R Prepayment": The meaning specified in Section 3.06(a).

"Class A‑R Prepayment Notice Date": The meaning specified in Section 3.06(c).

"Class A‑R Sale and Transfer Agreement": A transfer agreement entered into by a Class A‑R Noteholder and its transferee for the transfer of Class A‑R Notes and the assignment of a relative portion of such Class A‑R Noteholder's Commitment, and delivered to the Issuer, the Trustee and the Class A‑R Note Agent, substantially in the form of Exhibit A hereto.

"Closing Date": May 28, 2015.

"Commitment Shortfall Test": A test that will be satisfied at any time (or after giving effect to any event) if there is no Commitment Shortfall at such time (or would result after giving effect to such event).

"Conduit Rating Agency": Each nationally recognized investment rating agency that is then rating the Commercial Paper Notes of any CP Conduit.

"Defaulting Holder": A Class A‑R Noteholder that has at any time failed to discharge its obligations with respect to funding Borrowings when and as required hereunder (other than failures so to fund (a) solely as a result of a bona fide dispute as to whether the conditions to borrowing were satisfied on the relevant Class A‑R Borrowing Date, but only for such time as such Class A‑R Noteholder is continuing to engage in good faith discussions regarding the determination or resolution of such dispute or (b) solely as a result of a failure so to fund due to an administrative error or omission by such Class A‑R Noteholder, unless such failure continues for five Business Days after such Class A‑R Noteholder receives written notice or has actual knowledge of such administrative error or omission).

"Designated First Funding Holder": The meaning specified in Section 3.03(c).

"Downgrade Draw": The meaning specified in Section 3.07(a).

"Downgrade Draw Date": The meaning specified in Section 3.07(a).

"Exposure Amount": The meaning specified in Section 3.02(a).

"First Funding Holders": The meaning specified in Section 3.03(c).

"Guarantor": The meaning specified in Section 3.07(a).

"Pro Rata Share": With respect to any Class A‑R Noteholder on any date of determination, the ratio (expressed as percentage) of (a) such Class A‑R Noteholder's Commitment on such date to (b) the aggregate amount of Class A‑R Commitments on such date (or, if so specified, the aggregate amount of Class A-R Commitments of certain specified Class A-R Noteholders on such date).

‑3‑

"Program Manager": The investment manager, administrator or funding agent (or other Person acting in a similar capacity) of a CP Conduit, as applicable.

"Request Date": The meaning specified in Section 3.03(c).

"Second Funding Holder": The meaning specified in Section 3.03(c).

"Short Settlement Commitment": The meaning specified in Section 3.03(c).

Section 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth therein, herein or in the Indenture), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof and (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

ARTICLE II

PURCHASE, SALE, PAYMENT AND DELIVERY

Section 2.01 Purchase, Sale, Payment and Delivery of the Class A‑R Notes on the Closing Date. (a) On the basis of the representations, warranties and agreements contained herein and in the Indenture, but subject to the terms and conditions set forth herein and in the Indenture, each of the Class A‑R Noteholders agrees to acquire from the Co-Issuers, on the Closing Date, Class A‑R Notes with a maximum principal amount (when fully funded by such Class A‑R Noteholder in accordance with this Agreement and the Indenture) as set forth for such Class A‑R Noteholder in Schedule 2.01 hereto.

(b) The Aggregate Outstanding Amount of the Class A‑R Notes shall, at any time, evidence only the amount of Borrowings made but not repaid. Upon delivery by the Co-Issuers to each Class A‑R Noteholder of the Class A‑R Notes acquired by such Class A-R Noteholder, duly executed by the Co-Issuers and authenticated by the Trustee, such Class A-R Noteholder will be deemed to have acquired such Class A-R Noteholder's Class A‑R Notes.

(c) Principal on the Class A Debt, other than in the case of a Class A-R Prepayment, shall be repaid in accordance with the Class A Principal Allocation Formula, and the Class A-R Commitments shall be reduced by the Class A-R Commitment Reduction Amount. Any such reduction or termination of the Class A-R Commitments shall be permanent.

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ARTICLE III

CLASS A‑R COMMITMENTS AND BORROWINGS

Section 3.01 Class A‑R Commitments. (a) Subject to the terms and conditions set forth herein, each Class A‑R Noteholder agrees to extend funds to the Issuer from time to time during the Class A-R Commitment Period to fund Class A‑R Borrowings in an aggregate amount at any one time up to but not exceeding such Class A‑R Noteholder's Class A‑R Commitment at such time.

(b) All extensions of funds by a Class A‑R Noteholder to the Issuer to fund Class A‑R Borrowings shall be evidenced by an increase in the Aggregate Outstanding Amount of the Class A‑R Notes held by such Class A‑R Noteholder in an amount equal to each such funding.

(c) Within the foregoing limits and subject to the terms and conditions set forth herein and in the Indenture, the Issuer may borrow, prepay and re‑borrow funds under the Class A‑R Commitments on a revolving basis during the Class A-R Commitment Period.

Section 3.02 Class A‑R Borrowings. (a) The Issuer, or the Collateral Manager acting on behalf of the Issuer, shall be permitted to request Borrowings, on a revolving basis and in U.S. dollars hereunder (each borrowing made under this Agreement, including any borrowing made by depositing funds in a Class A-R Rating Requirement Funding Subaccount pursuant to Section 3.07, a "Class A‑R Borrowing" or "Borrowing") (i) on any Business Day during the Reinvestment Period (A) to fund the purchase of additional Collateral Obligations and (B) fund anticipated draws relating to Revolving Collateral Obligations or Delayed Drawdown Collateral Obligations (any such draws, an "Exposure Amount")), (ii) on any Business Day after the last day of the Reinvestment Period and prior to the end of the Class A-R Commitment Period, to fund Exposure Amounts relating to Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations and to acquire Collateral Obligations pursuant to commitments entered into by the Issuer prior to the last day of the Reinvestment Period and (iii) on any Business Day a Class A-R Noteholder is required to fund a Downgrade Draw pursuant to Section 3.07(a), in order to fund such Class A-R Rating Requirement Funding Subaccount in the amount of such Downgrade Draw.

(b) Except as provided in Section 3.07(a) and any Borrowing made pursuant to clause (a)(iii) above, each Class A‑R Borrowing shall be made pro rata from each Class A‑R Noteholder in accordance with its Pro Rata Share. The failure of any Class A‑R Noteholder to extend funds required to be advanced by it shall not relieve any other Class A‑R Noteholder of its obligations hereunder; provided, that the Class A‑R Commitments constitute several and separate, not joint, obligations and no Class A‑R Noteholder shall be responsible for any other Class A‑R Noteholder's failure to advance funds as so required.

(c) Each Class A‑R Noteholder at its option may fund its Pro Rata Share of any Borrowing by causing any domestic or foreign branch or Affiliate of such Class A‑R Noteholder to make such funding; provided that any exercise of such option shall not affect the obligation of such Class A‑R Noteholder to fund its Pro Rata Share of any Borrowing on the specified Class A‑R Borrowing Date or the date of a Downgrade Draw or the obligation of the Issuer to repay such

‑5‑

Borrowing in accordance with the terms of this Agreement. Any Class A‑R Borrowing pursuant to Section 3.02(a) (other than a Short Settlement Borrowing) shall be in a minimum amount of U.S. $1,000,000 or any integral multiple of U.S. $10,000 in excess thereof (or the remaining available amount of the Aggregate Undrawn Amount if such remaining amount is less than U.S. $1,000,000).

(a) Interest shall accrue on the drawn balance of the Class A‑R Notes at the applicable Class A-R Note Interest Rate as set forth in the Indenture. With respect to any Distribution Date, interest on the drawn balance of the Class A‑R Notes (the "Class A‑R Note Interest") will be an amount payable in arrears equal to the sum of (x)(i) the product of (A) the Aggregate Outstanding Amount of the Class A-R Notes (as determined daily for each day during each Interest Accrual Period with respect to such Distribution Date, but not including any portion of the aggregate principal amount of the Class A-R Notes that represent any Borrowing the proceeds of which are deposited into the Class A-R Rating Requirement Funding Account (for so long as such proceeds remain on deposit therein)), (B) the Class A-R Note Interest Rate applicable to such portion of the Aggregate Outstanding Amount of the Class A-R Notes and (C) the actual number of days elapsed in such Interest Accrual Period, divided by (ii) 360 and (y)(i) the product of (A) the Aggregate Outstanding Amount of the Class A-R Notes that represent any Borrowing the proceeds of which are deposited into the Class A-R Rating Requirement Funding Account (for so long as such proceeds remain on deposit therein) (as determined daily for each day during each Interest Accrual Period with respect to such Distribution Date) and (B) the Class A-R Note Interest Rate applicable to such portion of the Aggregate Outstanding Amount of the Class A-R Notes, divided by (ii) 360; provided that with respect to each Class A-R Noteholder, the Class A-R Note Interest Rate shall be calculated by the Class A-R Note Agent and payable separately by the Paying Agent as set forth in the Indenture. The Class A-R Note Agent shall notify the Trustee and any Paying Agent of the Class A-R Note Interest payable on any Distribution Date to each Class A-R Noteholder. The interest accrued on the portion of the outstanding principal balance of the Class A‑R Notes from a Borrowing made after the end of the Collection Period for the relevant Distribution Date will not be payable on that Distribution Date, but instead will be payable on the next Distribution Date.

Section 3.03 Requests for Borrowings. (a) To request a Borrowing (other than in respect of a Downgrade Draw), the Issuer (or the Collateral Manager on behalf of the Issuer) shall notify the Class A‑R Note Agent (with a copy to the Trustee) of such request, by electronic messaging system, in the form attached hereto as Exhibit B and signed by the Issuer or an Authorized Officer of the Collateral Manager on behalf of the Issuer (a "Borrowing Request") by not later than 1:00 p.m. (New York time) on the third Business Day immediately preceding a Class A‑R Borrowing Date or such shorter notice as is acceptable to the Class A-R Note Agent; provided that, the Issuer may, on any Business Day prior to the end of the Class A-R Commitment Period, notify the Class A-R Note Agent (with a copy to the Trustee) of a proposed Short Settlement Borrowing that is necessary to fund a same day funding requirement, not later than 10:00 a.m. (New York time) on the date of the proposed Short Settlement Borrowing (which shall be a Business Day); provided, further, that within one Business Day of the Issuer receiving notice of a Class A-R Noteholder's failure to satisfy the Rating Requirement a Borrowing Request must be delivered to such Class A-R Noteholder, and such Class A-R Noteholder must fund a Downgrade Draw within 30 Business Days, unless the Rating Requirement is again satisfied prior thereto. Promptly following receipt of a request for a Borrowing, the Class A-R Note Agent shall forward by fax or electronic mail to

‑6‑

each Class A-R Noteholder (with a copy to the Trustee) a copy of such request. Each such electronic Borrowing Request shall be irrevocable. Each such Borrowing Request shall specify the following information:

(i) the aggregate amount of the requested Borrowing;

(ii) the Borrowing Date;

(iii) the Aggregate Outstanding Amount of the Class A-R Notes both before and after giving effect to such Borrowing; and

(iv) whether such requested Borrowing would be a Short Settlement Borrowing.

(b) The Issuer may request a Borrowing only if the Class A-R Borrowing Conditions are satisfied.

(c) Each Class A-R Noteholder that has agreed to fund Borrowings on a same day basis (a "Designated First Funding Holder") in accordance with the commitment amounts set forth on Schedule 2.02 attached hereto (each such commitment, a "Short Settlement Commitment") shall fund a Short Settlement Borrowing on a same day basis. Any other Class A-R Noteholder shall not be obligated to do so. Any Designated First Funding Holder may, from time to time, in its sole discretion, agree with the Issuer, the Collateral Manager and the Class A-R Note Agent to increase its Short Settlement Commitment. Any such increased Short Settlement Commitment shall be reflected on an amended Schedule 2.02 that shall be attached to this Agreement by the Class A-R Note Agent. With respect to any Borrowing Request for a Short Settlement Borrowing: (a) as to any Class A-R Noteholder that has no Short Settlement Commitment (any such Class A-R Noteholder, a "Second Funding Holder"), such Borrowing Request shall be deemed to be a request for a Borrowing no later than three Business Days after the date of receipt of such Borrowing Request by the Trustee and the Class A-R Note Agent (the date of receipt being the "Request Date"); (b) the Class A-R Note Agent shall by 11:00 a.m. (New York time) on the Request Date notify each Class A-R Noteholder that has a Short Settlement Commitment (collectively, the "First Funding Holders") of the amount of such Short Settlement Borrowing to be funded by such First Funding Holder (determined as provided in the following clause (c)); (c) each First Funding Holder shall on the Request Date make an advance in respect of such Short Settlement Borrowing in an amount equal to the least of (x) such First Funding Holder's unfunded Class A-R Commitment, (y) such First Funding Holder's unfunded Short Settlement Commitment and (z) such First Funding Holder's Pro Rata Share of the requested amount of such Short Settlement Borrowing (determined according to the Class A-R Commitments of all First Funding Holders) (provided that, if the limitations specified in the foregoing clauses (x) or (y) would result in the total amount of such Short Settlement Borrowing funded on the Request Date being less than the amount specified in the related Borrowing Request, the total amount of such Short Settlement Borrowing funded on the Request Date shall be reduced accordingly); (d) each Second Funding Holder will on the date three Business Days after the Request Date make an advance in an amount equal to such Second Funding Holder's Pro Rata Share of the total Borrowing originally requested in the related Borrowing Request (determined according to the Class A-R Commitments of all Class A-R Noteholders), and the proceeds received by the Issuer from all such Second Funding Holders shall on the date received be applied in

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accordance with the written instructions of the Class A-R Note Agent to reimburse any First Funding Holder the principal amount that it advanced in excess of its Pro Rata Share of the total Borrowing originally requested in the related Borrowing Request (determined according to the Class A-R Commitments of all Class A-R Noteholders) prior to any other permitted application by the Issuer; and (e) if any Second Funding Holder fails to fund the Borrowing contemplated by the foregoing clause (a), each other Second Funding Holder shall forthwith purchase (for cash at face value plus accrued interest and Class A-R Commitment Fees) participations in the advances, if any, made by each First Funding Holder as part of such Short Settlement Borrowing, together with any related claims for interest and Class A-R Commitment Fees, to the extent necessary so that the total Borrowings funded under the related Borrowing Request, together with related claims for interest and Class A-R Commitment Fees, shall be held by all Class A-R Noteholders (other than such Second Funding Holder that fails to fund any such Borrowing as required) ratably in accordance with their respective Pro Rata Shares. The aggregate amount of Short Settlement Borrowings outstanding at any given time shall not exceed U.S.$5,000,000.

(d) Upon receipt of its copy of a Borrowing Request and, as applicable, upon receipt of notice that amounts have been withdrawn from the Class A-R Rating Requirement Funding Account in response to a Borrowing Request, the Calculation Agent shall determine LIBOR applicable to such Borrowing from a Class A-R Noteholder that is not a CP Conduit, such determination to be conclusive absent manifest error.

(e) The obligation of each Class A-R Noteholder to fund a Borrowing terminates on the earliest to occur of (x) an Event of Default as described in clause (c), (e) or (f) of the definition thereof, (y) the sale, foreclosure, liquidation or other disposition of all of the Assets pursuant to an Event of Default and (z) the termination, expiration or reduction to zero of the aggregate amount of the Class A-R Commitments.

Section 3.04 Funding of Borrowings. Subject to Sections 3.07(d) and 5.02 and except with respect to Borrowings made upon a Downgrade Draw and deposited in a Class A-R Rating Requirement Funding Account for so long as such amounts remain on deposit therein, each Class A‑R Noteholder shall fund its Pro Rata Share of each Borrowing requested by the Issuer hereunder by wire transfer of immediately available funds by 3:00 p.m. (New York time) on the applicable Class A-R Borrowing Date, to a specified Account under the Indenture.

Section 3.05 Termination and Reduction of Commitments. (a) The total Class A‑R Commitments (and the Class A-R Commitments of each Class A-R Noteholder) shall automatically be reduced to zero and terminate at the close of business (New York time) on the last day of the Class A-R Commitment Period (or, if earlier, the date on which the Class A‑R Notes are optionally redeemed by the Issuer pursuant to Article IX of the Indenture or reduced to zero pursuant to clause (d) below).

(b) On each Distribution Date occurring after the end of the Reinvestment Period, but during the Class A-R Commitment Period (and after giving effect to the payment made under the Priority of Distributions on such date), the total Class A-R Commitments shall be reduced automatically to an amount equal to (i) the Aggregate Outstanding Amount of all Class A-R Notes less the amount of funds deposited into the Class A-R Rating Requirement Funding Account (for

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so long as such proceeds remain on deposit therein) plus (ii) the Unfunded Amount (which shall be determined including any Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations that the Issuer entered into binding commitments before the end of the Reinvestment Period to purchase after the end of the Reinvestment Period), but only to the extent that such reduction does not result in a Commitment Shortfall.

(c) The Class A-R Commitments shall be permanently reduced in part by the amount of each payment of principal applied to the Class A-R Notes pursuant to the Priority of Distribution in connection with (i) a Mandatory Redemption or Special Redemption or (ii) on a Post-Acceleration Distribution Date, so long as no Commitment Shortfall would result.

(d) At the option of the Collateral Manager on behalf of the Issuer by written notice to the Class A-R Note Agent, the Class A-R Commitments may be reduced in whole or in part, on any day after the end of the Non-Call Period to the extent that, after giving effect to such reduction and any Class A-R Prepayment made on such date, (i) the Commitment Shortfall Test is satisfied and (b) each of the Coverage Tests, Collateral Quality Test and Concentration Limitations are satisfied, or if any such test is not satisfied prior to giving effect to such reduction, compliance with such test is maintained or improved. In the event that such optional reduction described herein results in the Aggregate Outstanding Amount of the Class A-R Notes exceeding the Class A-R Commitments, any such excess portion, once repaid, shall not be available for re-borrowing.

(e) Any termination or reduction of the Class A‑R Commitments shall be permanent. Each reduction of the Class A‑R Commitments shall be made ratably among the Class A‑R Noteholders in accordance with their respective Pro Rata Shares. For the avoidance of doubt, once the Class A-R Commitments have been reduced to zero or terminated, there will be no requirement that the Class A-R Noteholder or transferee of a Class A-R Note satisfy the Rating Requirement.

(f) No termination or reduction of the Class A‑R Commitments shall occur except as permitted under clause (a), (b), (c), (d) or (e) of this Section 3.05.

(g) The Collateral Manager shall provide the Class A‑R Note Agent with no less than one Business Day's prior written notice of any reduction in the Class A‑R Commitments pursuant to clause (d) above.

Section 3.06 Prepayment of Borrowings. (a) Subject to Section 3.07(b)(ii), and upon the terms and subject to the conditions of this Section 3.06, during the Reinvestment Period, the Co-Issuers, at the direction of the Collateral Manager, shall have the right to prepay the Class A‑R Notes (in whole or in part) together with accrued interest thereon (each, a "Class A-R Prepayment") on (i) any Distribution Date from Interest Proceeds or Principal Proceeds, in accordance with, and as specifically provided for in, the Priority of Distributions or (ii) any Interim Distribution Date other than during a Stub Period, in each case subject to the satisfaction (after giving effect to such Class A-R Prepayment) of each Coverage Test and the other conditions specified in this Section 3.06, at the option of the Collateral Manager (on behalf of the Issuer), from Principal Proceeds upon not less than three Business Days' notice to the Class A-R Note Agent and the Trustee (and any such notice may be revoked on or prior to two Business Days prior to such date). On any such Interim

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Distribution Date, at the direction of the Collateral Manager, the Trustee shall transfer the amount of the Class A-R Prepayment from the Collection Account to the Payment Account and shall apply such amount to repay the principal of the Class A-R Notes on a pro rata basis. Any Class A-R Note Additional Amounts shall be paid (x) in the case of a Class A-R Prepayment on an Interim Distribution Date, on the Distribution Date next succeeding the Collection Period in which such Interim Distribution Date occurs and (y) in the case of a failed Borrowing, on the Distribution Date following the Collection Period in which such failed Borrowing occurs, in each case pursuant to the Priority of Distributions. Notwithstanding the foregoing, the Issuer shall not be required to compensate any Holder for any loss incurred more than six months prior to the date that such Class A-R Noteholder notifies the Issuer of the Break Funding Event or Class A-R Note Increased Costs giving rise to such loss and of such Class A-R Noteholder's intention to claim compensation therefor. In addition, if such notice and the certificate required pursuant to Section 3.08(d) are not delivered to the Issuer, the Collateral Manager and the Trustee at least two Business Days prior to a Distribution Date in the case of a Break Funding Event or ten Business Days prior to a Distribution Date in the case of Class A-R Note Increased Costs, payment of such Class A-R Note Additional Amounts shall be made on the next succeeding Distribution Date.

(b) The aggregate principal amount of any Class A-R Prepayment (taken as a whole) shall be at least U.S.$1,000,000 (and integral multiples of U.S.$10,000, in excess thereof) (or if the aggregate drawn amount is less than U.S.$1,000,000, such lesser amount), unless otherwise agreed to, in writing (which includes via email) by all of the Class A-R Noteholders. Any Class A-R Prepayment shall be made by the Issuer pro rata according to the Aggregate Outstanding Amount of the Class A-R Notes.

(c) In order to effect a Class A-R Prepayment, the Collateral Manager shall give not less than three Business Days' notice (such Business Day, the "Class A-R Prepayment Notice Date") thereof in the form attached hereto as Exhibit C to the Trustee and the Class A-R Note Agent. Such notice shall specify the Business Day on which such Class A-R Prepayment shall occur, the amount of such Class A-R Prepayment (being a stated amount, subject to the limitation referred to above) and whether a draw made on the Class A-R Notes during the same Interest Accrual Period is being repaid. The Class A-R Note Agent shall give a copy of such notice or other facsimile transmission to each Class A-R Noteholder at its address in the Class A-R Commitment Register.

(d) After any such notice referred to in clause (c) is given, the amount of such Class A-R Prepayment shall be payable by 11:00 a.m. on the date specified in such notice, provided that such notice may be revoked on or prior to two Business Days prior to such date.

(e) The amount of any Class A-R Prepayment shall reduce the Aggregate Outstanding Amount of the Class A-R Notes and increase the Aggregate Undrawn Amount by a corresponding amount, but shall not reduce the Class A-R Commitments.

(f) Accrued interest on the principal amount of the Class A-R Notes so repaid in any Class A-R Prepayment shall be paid to the Class A-R Noteholders at the time of such Class A-R Prepayment.

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Section 3.07 Procedures with Respect to Rating Requirement.

(a) Each Class A-R Noteholder shall be required to satisfy the Rating Requirement during the Class A-R Commitment Period. If any Class A-R Noteholder or a Guarantor, if any, fails to satisfy the Rating Requirement during the Class A-R Commitment Period, such Class A-R Noteholder or Guarantor, if any, shall be required, within 30 Business Days after such failure (a "Downgrade Draw Date"), to fully fund a Borrowing in the amount of such Class A-R Noteholder's pro rata share of the Aggregate Undrawn Amount (a "Downgrade Draw") to be deposited in a subaccount of the Class A-R Rating Requirement Funding Account in accordance with the provisions set forth in Sections 3.4(d) and 10.3(j) of the Indenture. If within 30 Business Days after a Ratings Trigger Event (unless such Class A-R Noteholder or Guarantor, if any, satisfies the Rating Requirement within 30 days of such failure), such Class A-R Noteholder or Guarantor, if any, has failed to either (i) transfer all of its rights and obligations in respect of its Class A-R Notes to a purchaser that satisfies the Rating Requirement and that is eligible to purchase such Notes under the terms hereof and the Indenture, as applicable, (ii) have all of its obligations and commitments hereunder unconditionally guaranteed by an institution which satisfies the Rating Requirement (any such entity, a "Guarantor"), or (iii) fund the Borrowing or cause to be funded the Borrowing referred to above, the Issuer shall have the right hereunder, and shall be obligated to use reasonable efforts to replace such Class A-R Noteholder or Guarantor (at the cost of such Class A-R Noteholder), if any, with another entity that meets the Rating Requirement (by requiring the replaced Class A-R Noteholder or Guarantor, if any, of the Class A-R Notes to transfer all of its rights and obligations in respect of such Notes to the transferee entity). Each of the Trustee, the Class A-R Note Agent and the Class A-R Noteholder being replaced agree to cooperate with all reasonable requests of the Issuer for the purpose of effecting such transfer.

(b) From and after the date on which a Class A-R Noteholder funds a Borrowing, the proceeds of which are deposited into its Class A-R Rating Requirement Funding Subaccount and until the earliest to occur of (a) the assignment by such Class A-R Noteholder of all of its rights and obligations under the Class A-R Notes and this Agreement, (b) the satisfaction by such Class A-R Noteholder of the Rating Requirement, (c) the Stated Maturity of the Class A-R Notes and (d) the date of the permanent reduction of the Class A-R Commitments to zero, the Borrowing deposited in such Class A-R Rating Requirement Funding Subaccount in connection with a Downgrade Draw shall be applied in accordance with the following:

(i) On any date on which such Class A-R Noteholder is required to fund its Pro Rata Share of any Borrowing Request, amounts which would otherwise have been drawn on such Class A-R Noteholder's Class A-R Note pursuant to Section 3.02 absent such Downgrade Draw shall instead be transferred by the Trustee, at the direction of the Issuer or the Collateral Manager, on the Issuer's behalf, from such Class A-R Noteholder's Class A-R Rating Requirement Funding Subaccount to be applied in accordance with the Indenture, whereupon interest shall accrue thereon at a rate equal to the applicable Note Interest Rate in accordance with the Indenture.

(ii) On any date on which a Borrowing (other than a Borrowing in respect of a Downgrade Draw, so long as such funds remain on deposit in the Class A-R Rating

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Requirement Funding Account) is repayable to such Class A-R Noteholder pursuant to Section 3.06, such repayment shall instead be deposited to the applicable Class A-R Rating Requirement Funding Subaccount and be available to fund future Borrowings as described in Section 3.07(b)(i) above, whereupon interest shall continue to accrue thereon at the applicable Class A-R Note Interest Rate.

(iii) Funds on deposit in or credited to the Class A-R Rating Requirement Funding Account shall be invested by the Trustee, at the direction of the Class A-R Note Agent, in securities selected by the Class A-R Note Agent which satisfy the definition of Eligible Investments having a maturity on the day following the date of acquisition thereof. Absent any such direction from the Class A-R Note Agent, the amounts on deposit in any Class A-R Rating Requirement Funding Subaccount will be invested in Eligible Investments specified by the Collateral Manager in accordance with Section 10.6 of the Indenture pending the application of such funds in accordance with the terms hereof and the Indenture.

(c) The Issuer, or the Collateral Manager on the Issuer's behalf, shall have the right to cause a transfer of any Class A-R Note held by a Class A-R Noteholder that fails to satisfy the Rating Requirement and that has not made a Downgrade Draw pursuant to Section 3.07(a) (and the related Class A-R Commitment) to a transferee who, or whose Guarantor, if any, satisfies the Rating Requirement (and the related Class A-R Noteholder agrees to take all necessary and reasonably requested action to facilitate such transfer and assignment); provided that in connection with such transfer, the transferring Class A-R Noteholder shall receive payment in cash for its Class A-R Notes in an amount at least equal to the Aggregate Outstanding Amount thereof plus any accrued but unpaid Class A-R Note Interest and Class A-R Commitment Fees thereon and any due and unpaid Class A-R Note Additional Amounts, unless such transferring Class A-R Noteholder provides its written consent (in its sole discretion) to receive a lesser amount; provided, further, if the Class A-R Note Agent has advanced amounts on behalf of the related Class A-R Noteholder pursuant to Section 3.04 of this Agreement and has not been reimbursed in full for such advance (including in respect of any interest accrued thereon), such transfer shall not be made without the written consent of the Class A-R Note Agent (in its sole discretion). For the avoidance of doubt, the Class A-R Note Agent shall have no obligation to advance amounts on behalf of a Class A-R Noteholder without its written consent (in its sole discretion).

(d) Any Class A-R Noteholder that no longer satisfies the Rating Requirement at any time during the Reinvestment Period or defaults in its obligation to fund its Pro Rata Share of any Class A-R Borrowing shall (i) promptly give written notice of such fact to the Issuer, the Collateral Manager, the Class A-R Note Agent, the Trustee, Moody's and S&P and (ii) in the case of a failure to satisfy the Rating Requirement, comply with clause (a) of this Section 3.07 within 30 days after the date on which such Class A-R Noteholder first fails to satisfy the Rating Requirement.

(e) Any Borrowings made by a Class A-R Noteholder to be deposited in a Class A-R Rating Requirement Funding Subaccount in connection with a Downgrade Draw pursuant to Section 3.07(a), along with any interest accumulated up to that date, shall be released by the Trustee, at the direction of the Collateral Manager, to the Class A-R Noteholder promptly following notice

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of the earlier to occur of (i) the transfer by the Class A-R Noteholder of its Class A-R Note to one or more eligible transferees under Section 7.03(b), or (ii) the date on which the Class A-R Noteholder satisfies the Rating Requirement.

(f) If, at any time prior to the termination in full of its Class A-R Commitments in accordance with this Agreement, a Class A-R Noteholder becomes a Defaulting Holder, the Issuer (or the Collateral Manager on its behalf) shall have the right to require such Class A-R Noteholder to assign and, at the Issuer's request in such circumstances, such Class A-R Noteholder shall assign all of its rights and obligations hereunder and under the Indenture, with such Class A-R Noteholder bearing all out‑of‑pocket costs and expenses relating thereto, as promptly as practicable to one or more Persons designated by the Issuer or the Collateral Manager on its behalf that satisfies the Rating Requirement; provided, that in connection with such transfer, the transferring Class A-R Noteholder shall receive payment in cash for its Class A-R Notes in an amount at least equal to the Aggregate Outstanding Amount thereof plus any accrued but unpaid Class A-R Note Interest and Class A-R Commitment Fees thereon and any due and unpaid Class A-R Note Additional Amounts, unless such transferring Class A-R Noteholder provides its written consent (in its sole discretion) to receive a lesser amount; provided, further that so long as such Defaulting Holder has not been replaced by another holder that meets the Rating Requirement and satisfies such Defaulting Holder's failed funding obligation, any payments of principal of or interest on any Class A-R Note held by such Defaulting Holder, and any payments of Class A-R Commitment Fees otherwise payable to such Defaulting Holder, shall be remitted to a subaccount of the Class A-R Rating Requirement Funding Account and held to secure the obligation of such Defaulting Holder to fund Borrowings, and applied to fund such Borrowings. In addition, the Issuer may apply Principal Proceeds (including Sale Proceeds) as provided under the Indenture to the extent that the Issuer has entered into commitments on transactions for which trades have been entered into but not settled or is required to fund any unfunded commitment with respect to a Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation and there are insufficient funds for that purpose on deposit in the Revolver Funding Account. Nothing herein shall be deemed to relieve any Class A-R Noteholder from its obligations to fulfill its commitments hereunder or to prejudice any rights which the Issuer (or the Collateral Manager on behalf of the Issuer) may have against a Class A-R Noteholder as a result of any such default by such Class A-R Noteholder hereunder. Any assignment of a Class A-R Noteholder's interest in a Class A-R Note must comply with Section 7.03 hereof.

(g) Neither the Trustee nor the Class A-R Note Agent shall have any obligation to monitor whether any Class A-R Noteholder, transferee or Guarantor satisfies the Rating Requirement or, in the event that any such person fails to satisfy such criteria, to determine whether such person has complied with the requirements of the Indenture and this Agreement with respect thereto.

Section 3.08 Class A-R Commitment Fee; Breakage Costs. (a) The Class A-R Commitment Fees shall accrue on the Aggregate Undrawn Amount for each day from and including the Closing Date to but excluding the date the Class A-R Commitments terminate, expire or are permanently reduced to zero and shall be payable by the Co-Issuers in arrears on each Distribution Date as and to the extent provided in Section 11.1 of the Indenture. The Class A-R Commitment

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Fees shall accrue for each day from and including the first day of each Collection Period to and including the last day of such Collection Period.

(b) The amount of the Class A-R Commitment Fees due and payable on each Distribution Date shall be equal to the accrued and unpaid Class A-R Commitment Fees as of the corresponding Determination Date in respect of such Distribution Date. The Class A-R Commitment Fee shall rank pari passu with the payment of interest on the Class A Debt. Class A-R Commitment Fees are computed on the basis of a 360 day year and the actual number of days elapsed. Interest at the highest rate then applicable to the Class A-R Notes (or, if there are no Borrowings then outstanding, at the Base Rate) shall accrue on the portion of any Class A-R Commitment Fee payable to the Class A-R Noteholders that is not paid when due.

(c) If the Issuer (i) pays any principal of any Borrowing on any date other than a Distribution Date (whether in connection with a Class A-R Prepayment, due to acceleration or otherwise), (ii) fails to effect a Borrowing on the scheduled date therefor after having submitted a Borrowing Request to the Class A-R Note Agent in accordance with Section 3.03 or (iii) fails to prepay any Class A-R Note after notice thereof has been given in accordance with Section 3.06 and not revoked as permitted by this Agreement, then upon demand therefor from any Class A-R Noteholder, any Breakage Costs, shall be payable by the Issuer on the next Distribution Date pursuant to the Priority of Distributions. Notwithstanding the foregoing, the Issuer shall not be required to compensate any Class A-R Noteholder for any loss incurred more than six months prior to the date that such Class A-R Noteholder notifies the Issuer of the Break Funding Event giving rise to such loss or any Class A-R Note Increased Costs and of such Class A-R Noteholder's intention to claim compensation therefor.

(d) A certificate of any Class A-R Noteholder setting forth any amount or amounts that such Class A-R Noteholder is entitled to receive pursuant to this Section 3.08, and the calculation of such amount or amounts, shall be delivered to the Co-Issuers, the Trustee and the Class A-R Note Agent and shall be conclusive absent manifest error.

Section 3.09 Class A-R Commitment Register. (a) The Issuer shall cause to be kept a register (the "Class A-R Commitment Register") in which, subject to such reasonable procedures as it may prescribe, the Issuer shall provide for the recording and registering of the following information with respect to each Class A-R Noteholder:

(i) the name, notice details, wiring instructions and taxpayer identification number of such Class A-R Noteholder, together with the names of the authorized representatives of such Class A-R Noteholder and their mailing address, electronic mail address, telephone and facsimile numbers;

(ii) the Aggregate Outstanding Amount and stated interest of Class A-R Notes held by such Class A-R Noteholder, the aggregate amount of related Commitment of such Class A-R Noteholder and the amount (if any) of any Borrowing, the proceeds of which are deposited into a Class A-R Rating Requirement Funding Subaccount with respect to such Class A-R Noteholder (for so long as such proceeds remain on deposit therein);

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(iii) the date upon which such Class A-R Noteholder became a holder of such Class A-R Notes; and

(iv) whether such Class A-R Noteholder is a Defaulting Holder.

(b) The Trustee, in its capacity as Registrar pursuant to the Indenture, shall act as the "Class A-R Commitment Registrar" for the purpose of registering and recording the information described in clauses (i) through (iv) above, provided that the Class A-R Note Agent shall maintain a duplicate register and shall, on an ongoing basis, provide all information in its possession necessary for the Trustee to perform its duties pursuant to the Indenture.

(c) The Class A-R Note Agent shall provide the Trustee any information necessary so that the Trustee may update the information contained in the Class A-R Commitment Register (as identified in items (a)(i) through (iv) above) upon (i) the transfer of any Class A-R Note, (ii) each Borrowing, (iii) each prepayment or repayment of a Borrowing, (iv) each reduction in the Class A-R Commitments and (v) the receipt of written notice confirming a change in the notice details or the authorized representatives of any Class A-R Noteholder.

(d) Absent manifest error, the information contained in the Class A-R Commitment Register will be prima facie evidence of the rights and obligations of each Class A-R Noteholder with respect to its Class A-R Commitment and the Class A-R Notes held by such Class A-R Noteholder.

(e) Upon request at any time, the Class A-R Commitment Registrar shall provide to the Registrar, the Class A-R Note Agent, the Issuer and the Collateral Manager a copy of the information contained in the Class A-R Commitment Register and, upon request at any time by a Class A-R Noteholder, the Class A-R Commitment Registrar shall provide such Class A-R Noteholder a copy of the information contained in the Class A-R Commitment Register relating to its Class A-R Commitment and the Class A-R Notes held by such Class A-R Noteholder.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.01 Representations and Warranties. Each of the Co-Issuers represents and warrants to the Class A-R Noteholders, the Class A-R Note Agent and the Trustee that:

(b) It is (i) an exempted company incorporated with limited liability and validly existing and in good standing under the law of the Cayman Islands (in the case of the Issuer) and (ii) a limited liability company duly formed and validly existing and in good standing under the law of the State of Delaware (in the case of the Co-Issuer).

(c) It has the power to execute and deliver this Agreement and the Indenture and to perform its obligations under this Agreement and the Indenture and has taken all necessary action to authorize such execution, delivery and performance.

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(d) Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets.

(e) All governmental and other consents that are required to have been obtained by it with respect to the execution, delivery and performance of this Agreement and the Indenture have been obtained and are in full force and effect and all conditions of any such consents have been complied with.

(f) Its obligations under this Agreement and the Indenture, when executed by all parties, as applicable, constitute its legal, valid and binding obligations, enforceable against it in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).

(g) There is not pending or, to its knowledge, threatened against it, any action, suit or proceeding at law or in equity or before any court, tribunal, government body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or the Indenture or its ability to perform its obligations under this Agreement or the Indenture.

(h) Assuming (i) that all representations and warranties of the Class A-R Noteholders in clauses (c), (i) and (l) of Section 4.02 of this Agreement are true and correct and assuming compliance by each such Class A-R Noteholder with applicable transfer restriction provisions and other provisions herein and in the Indenture and (ii) that all representations and warranties of all of the holders of the Notes in the Indenture (whether deemed or delivered in any representation letter required under the Indenture) relating to their status under Section 3(c)(7) of the Investment Company Act of 1940, as amended, and the related rules and regulations are true and correct and assuming compliance by each Holder of Notes with applicable transfer restriction provisions and other provisions in the Indenture, it is not required to register as an investment company under the Investment Company Act of 1940, as amended.

(i) As of the Closing Date (which representations and warranties shall survive the execution of this Agreement and be deemed to be repeated on each date on which an Asset is Granted to the Trustee under the Indenture) each payment of principal or interest with respect to the Class A-R Notes made under this Agreement and the Indenture will have been made (i) in payment of a debt incurred by the Co-Issuers in the ordinary course of business or financial affairs of the Co-Issuers and (ii) in the ordinary course of business or financial affairs of the Co-Issuers.

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Section 4.02 Several Representations of Each Class A-R Noteholder. Each Class A-R Noteholder severally represents and warrants (as to itself only) to the Issuer, the Co-Issuer and the Class A-R Note Agent, as of the date hereof (in the case of the Class A-R Initial Noteholder), as of the date each transferee becomes a Class A-R Noteholder in accordance with Section 7.03 hereof (in the case of each other Class A-R Noteholder) and as of the date of each Borrowing, that:

(f) In connection with its purchase of the Class A-R Notes: (i) none of the Co-Issuers, the Trustee, the Collateral Administrator, the Class A-R Note Agent, the Collateral Manager, the Placement Agent or any of their respective affiliates are acting as a fiduciary (except to the extent specifically set forth in the Indenture) or financial or investment adviser for it; (ii) it is not relying on any written or oral advice, counsel or representations of the Co-Issuers, the Trustee, the Collateral Administrator, the Class A-R Note Agent, the Collateral Manager, the Placement Agent or any of their respective affiliates other than in the Offering Circular, if applicable; (iii) it has read and understands the Offering Circular (including, without limitation, the descriptions therein of the structure of the transaction in which the Class A-R Notes are being issued and the risks to purchasers thereof); (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial, and accounting advisers to the extent it has deemed necessary, and has made its own investment decisions based upon its own judgment and upon any advice from such advisers as it has deemed necessary and not upon any view expressed by the Co-Issuers, the Trustee, the Collateral Administrator, the Class A-R Note Agent, the Collateral Manager, the Placement Agent or any of their respective affiliates; and (v) it is a sophisticated investor and is purchasing the Class A-R Notes with a full understanding of all of the terms, conditions and risks thereof, and it is capable of assuming and willing to assume those risks.

(g) It is not a member of the public of the Cayman Islands.

(h) It is, and on each date that it purchases or funds its Class A-R Commitment hereunder it will be (i) both a "qualified institutional buyer" as defined in Rule 144A under the Securities Act and a "qualified purchaser" for purposes of Section 3(c)(7) of the Investment Company Act ("Qualified Purchaser") or (ii) both an institutional accredited investor meeting the requirements of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and a Qualified Purchaser.

(i) On each day from the date on which it acquires its interest in the Class A-R Notes through and including the date on which it disposes of its interest in such Notes that either (i) it is neither a Plan nor any entity whose underlying assets are treated as "plan assets" by reason of such Plan's investment in the entity for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), nor a governmental, church, non-U.S. or other plan which is subject to any federal, state, local or non-U.S. law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code") or (ii) its purchase, holding and disposition of any such Note will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or, in the case of a governmental, church, non-U.S. or other plan, a non-exempt violation of any substantially similar law). Any purported transfer of a Class A-R Note or interest therein that does not comply with the foregoing representations shall be null and void ab initio.

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(j) It will treat the Issuer, the Co-Issuer and the Class A-R Notes as described in the "Certain U.S. Federal Income Tax Considerations" section of the Offering Circular for all U.S. federal, state and local income tax purposes and will take no action inconsistent with such treatment unless required by law. It understands that it is the intent of the Issuer that, for U.S. federal, state and local income tax purposes, the Issuer be treated as a disregarded entity and the Class A-R Notes (to the extent of Borrowings outstanding on the Closing Date) be treated as indebtedness, and it agrees (i) to treat the Issuer as a disregarded entity for U.S. federal, state and local income tax purposes and further agrees for so long as a single person owns all of the equity in the Issuer for U.S. federal income tax purposes, not to take any action inconsistent with such treatment and (ii) to treat the Class A-R Notes as indebtedness for U.S. federal, state and local income tax purposes and further agrees not to take any action inconsistent with such treatment. In the event that the equity interests in the Issuer are held by more than a single person for U.S. federal income tax purposes, it agrees to treat the Issuer as a partnership for U.S. federal, state and local income tax purposes.

(k) It will timely furnish the Issuer and its agents with any tax certifications, information or documentation (including, without limitation, IRS Form W-9 or the applicable IRS Form W-8, or any successors to such IRS forms) that the Issuer or its agents reasonably request (A) to permit the Issuer or its agents to make payments to it without, or at a reduced rate of, deduction or withholding, (B) to enable the Issuer or its agents to qualify for a reduced rate of withholding or deduction in any jurisdiction from or through which they receive payments, and (C) to enable the Issuer or its agents to satisfy reporting and other obligations under any applicable law or regulation, and will update or replace such certifications, information, and documentation in accordance with its terms or subsequent amendments. It acknowledges that the failure to provide, update or replace any such certifications, information, and documentation may result in the imposition of withholding or back-up withholding on payments to such Holder. Amounts withheld pursuant to applicable tax laws will be treated as having been paid to the Holder by the Issuer.

(l) It will provide the Issuer and its agents with any correct, complete and accurate information, and will take any other actions, that may be required for the Issuer (or its sole owner) to comply with FATCA or necessary to provide the Cayman Islands Tax Information Authority pursuant to the Tax Information Authority (International Tax Compliance) (United Kingdom) Regulations, 2014 (as amended from time to time) and/or to avoid the imposition of tax under FATCA on any payment to the Issuer or to or for the benefit of the Holders and/or in the event the Holder fails to provide such information or take such actions or in the event that its ownership of any Class A-R Notes would otherwise cause the Issuer (or its sole owner) to be subject to withholding tax under FATCA or otherwise not to comply with FATCA, (A) the Issuer is authorized to withhold under FATCA, and (B) to the extent necessary to avoid an adverse effect on the Issuer (or its sole owner) as a result of such failure or its ownership of Class A-R Notes, the Issuer will have the right to compel the Holder to sell its Class A-R Notes and, if such Holder does not sell its Class A-R Notes within ten business days after notice from the Issuer or an agent of the Issuer, to sell such Class A-R Notes at a public or private sale called and conducted in any manner permitted by law, and to remit the net proceeds of such sale (taking into account any taxes incurred by the Issuer in connection with such sale) to the Holder as payment in full for such Class A-R Notes. The Issuer may also assign each such Class A-R Note a separate CUSIP number in the Issuer's sole

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discretion. It agrees and represents that the Issuer and/or the Trustee or their agents or representatives may (1) provide any information and documentation provided to them in connection with FATCA and any other information concerning its investment in such Notes to the Cayman Islands Tax Information Authority, the U.S. Internal Revenue Service and any other relevant tax authority and (2) take such other steps as they deem necessary or helpful to achieve FATCA compliance. It agrees to indemnify the Issuer and the Trustee for all damages, costs and expenses that result from its failure to take the actions required of it herein in connection with FATCA.

(m) It shall provide to the Issuer and the Trustee a properly completed and executed (i) IRS Form W-9 (December 2014 version or successor form thereto) or applicable IRS Form W-8 with appropriate attachments (2014 version or successor form thereto) and (ii) Annex A attached hereto, in each case prior to or as of becoming a party to this Agreement.

(n) It acknowledges that the Offering Circular does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the Class A-R Notes. Distribution of the Offering Circular, or disclosure of any of its contents to any person other than the Class A-R Noteholder and those persons, if any, retained to advise the Class A-R Noteholder with respect thereto and other persons (including, without limitation, any financial guarantor) meeting the requirements of Rule 144A and Regulation S is unauthorized and any disclosure of any of its contents, without the prior written consent of the Co-Issuers and the Collateral Manager, is prohibited.

(o) It has received and reviewed such information as it deems necessary in order to make its investment decision and it is not relying on any information that differs from the information included in the Offering Circular, this Agreement and the Indenture.

(p) It acknowledges that by entering into this Agreement it is deemed to warrant and represent as to all the warranties and representations required to be made or deemed to be made by each purchaser or transferee of Class A-R Notes under the Indenture.

(q) It understands that such Notes are being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, such Notes have not been and will not be registered under the Securities Act, and, if in the future it decides to offer, resell, pledge or otherwise transfer such Notes, such Notes may be offered, resold, pledged or otherwise transferred only in accordance with the provisions of the Indenture and the legend on such Notes. It acknowledges that no representation has been made as to the availability of any exemption under the Securities Act or any state securities laws for resale of the Notes. It understands that neither of the Co-Issuers has been registered under the Investment Company Act, and that the Co-Issuers are exempt from registration as such by virtue of Section 3(c)(7) of the Investment Company Act. It will provide notice to each Person to whom it proposes to transfer any interest in the Notes of the transfer restrictions and representations set forth in this Agreement and Section 2.6 of the Indenture, including the Exhibits referenced therein.

(r) As of the date the Class A-R Noteholder became a noteholder, it satisfies the Rating Requirement.

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(s) In the case of each transfer of the Class A-R Notes after the Closing Date, as of the date the Class A-R Noteholder became a noteholder, it shall notify S&P and Moody's of such transfer at its address set forth in the Indenture.

ARTICLE V

CONDITIONS

Section 5.01 Closing Date. The obligations of the Class A-R Noteholders to fund their respective Pro Rata Share of Class A-R Borrowings shall not become effective until the date on which the Indenture and this Agreement are executed and delivered and the Class A-R Notes are duly authorized, issued, authenticated and delivered thereunder.

Section 5.02 Conditions to Each Class A-R Borrowing. Except as otherwise provided in this Section 5.02, the obligation of each Class A-R Noteholder to make an advance to the Issuer on the occasion of any Class A-R Borrowing pursuant to this Agreement (other than the funding of a Downgrade Draw) is subject to the satisfaction of the following conditions (the "Class A-R Borrowing Conditions"):

(a) the Class A-R Note Agent shall have received a Borrowing Request given in accordance with this Agreement;

(b) (i) such Class A-R Borrowing shall not exceed the sum of (1) the Aggregate Undrawn Amount under the Class A-R Commitments at such time and (2) the amounts on deposit in the Class A-R Rating Requirement Funding Account at such time and (ii) for each Holder of Class A-R Notes, its Pro Rata Share of such Class A-R Borrowing shall not exceed the undrawn amount under such Holder's Class A-R Commitment;

(c) subject to clause (e) below, at the time of and immediately after giving effect to such Borrowing, no Event of Default or event, the occurrence of which with notice or lapse of time or both would become an Event of Default, has occurred and is continuing or would result from such Borrowing;

(d) subject to clause (e) below, at the time of and immediately after giving effect to such Borrowing, the Coverage Tests are satisfied (or deemed satisfied as provided below), or if any such Coverage Test is not satisfied prior to giving effect to such Borrowing, compliance with such test is maintained or improved; provided that the condition in this clause will be deemed to be satisfied with respect to the funding of the purchase of any Collateral Obligation if the Coverage Tests were satisfied, or if any such Coverage Test is not satisfied prior to such date, compliance with such test is maintained or improved, as of the date the commitment was made to acquire the Collateral Obligation with respect to which such notice of Borrowing is given, so long as such commitment provides for settlement in accordance with customary procedures in the relevant markets;

(e) the proceeds of such Borrowing shall be used to (i) fund the purchase of Collateral Obligations, (ii) fund Exposure Amounts relating to Revolving Collateral Obligations

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and Delayed Funding Obligations or (iii) to fund the Class A-R Rating Requirement Funding Subaccount, in each case as provided herein or in the Indenture; provided that, if such Borrowing is made for the purpose of funding Exposure Amounts under Revolving Collateral Obligations or Delayed Drawdown Collateral Obligations, then compliance with the conditions in clauses (c) and (d) above and (h) below shall not be required other than in respect of an Event of Default set forth in clause (c), (e) or (f) of such term, provided further that the Class A-R Commitments remain in effect and there has been no foreclosure upon or other disposition of all of the Collateral;

(f) if such Borrowing Date occurs after the Reinvestment Period, after giving effect to the requested Borrowing and any contemporaneous application of amounts on deposit in the Revolver Funding Account, no amounts shall be on deposit in the Revolver Funding Account;

(g) none of the proceeds of such Borrowing shall be used by the Issuer, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any Margin Stock, and no Borrowing shall be secured, directly or indirectly, by Margin Stock and the Assets shall not include any Margin Stock;

(h) subject to clause (e) above, the representations and warranties of the Issuer contained in Section 4.01 and in the Indenture shall be true and correct in all material respects on and as of the date of such Borrowing (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) both before and after giving effect to the making of such advance;

(i) no law or regulation shall have been adopted, no order, judgment or decree of any governmental authority shall have been issued, and no litigation shall be pending or, to the actual knowledge of an Authorized Officer of the Issuer, threatened, which does or, with respect to any threatened litigation, seeks to enjoin, prohibit or restrain, the making or repayment of the advances or the consummation of the transactions contemplated by the Indenture;

(j) each of the Transaction Documents remains in full force and effect and is the binding and enforceable obligation of the Co-Issuers (except for those provisions of any Transaction Document not material, individually or in the aggregate with other affected provisions, to the interests of any of the Class A-R Noteholders); and

(k) there shall be no Commitment Shortfall immediately after giving effect to such Borrowing and the application of the proceeds of such Borrowing.

Each Borrowing shall be deemed to constitute a representation and warranty by the Issuer on the date thereof as to the matters specified in paragraphs (a) through (k) of this Section 5.02.

ARTICLE VI

THE CLASS A-R NOTE AGENT

Section 6.01 Appointment. Each of the Class A-R Noteholders hereby irrevocably appoints the Class A-R Note Agent as its agent and authorizes the Class A-R Note Agent to take

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such actions on its behalf and to exercise such powers as are delegated to the Class A-R Note Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. The appointment of the Class A-R Note Agent shall terminate immediately following the last day of the Class A-R Commitment Period.

Section 6.02 Certain Duties and Responsibilities. (h) The Class A-R Note Agent undertakes to perform such duties and only such duties as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Class A-R Note Agent.

(i) Upon certificates and other notices furnished to the Class A-R Note Agent and conforming to the requirements of this Agreement, the Class A-R Note Agent may, in the absence of bad faith on its part, conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein; provided, that, in the case of any such certificates which by any provision hereof are specifically required to be furnished to the Class A-R Note Agent, the Class A-R Note Agent shall be under a duty to examine the same to determine whether or not they substantially conform on their face to the requirements of this Agreement and shall promptly, but in any event within three Business Days in the case of an Officer's certificate furnished by the Collateral Manager, notify the party delivering the same if such certificate or opinion does not so conform. If a corrected form shall not have been delivered to the Class A-R Note Agent within 15 days after such notice from the Class A-R Note Agent, the Class A-R Note Agent shall so notify the Issuer, the Collateral Manager and each Class A-R Noteholder.

(j) No provision of this Agreement shall be construed to relieve the Class A-R Note Agent from liability for its own grossly negligent action, its own grossly negligent failure to act, its own willful misconduct, its own bad faith or its own material breach, except that:

(i) this subsection shall not be construed to limit the effect of subsections (a) and (b) of this Section 6.02;

(ii) the Class A-R Note Agent shall not be liable for any error of judgment made in good faith by an Authorized Officer, unless it shall be proven that the Class A-R Note Agent was grossly negligent in ascertaining the pertinent facts;

(iii) no provision of this Agreement shall require the Class A-R Note Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers contemplated hereunder, if it shall have reasonable grounds for believing that repayment of such funds or indemnity reasonably satisfactory to it against such risk or liability is not reasonably assured to it; and

(iv) in no event shall the Class A-R Note Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits) even if the Class A-R Note Agent has been advised of the likelihood of such damages and regardless of the form of such action.

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(k) For all purposes under this Agreement, the Class A-R Note Agent shall not be deemed to have notice or knowledge of any Event of Default unless an Officer of the Class A-R Note Agent has actual knowledge thereof or unless written notice of any event which is in fact such an Event of Default is received by the Class A-R Note Agent.

(l) Whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Class A-R Note Agent shall be subject to the provisions of this Section 6.02. The Class A-R Note Agent shall be afforded the same protections and benefits (including the right to rely on any written document delivered to the Class A-R Note Agent under this Agreement) as that afforded to the Trustee pursuant to Section 6.3 of the Indenture (but in no event shall Section 6.1(b) of the Indenture apply).

(m) For all purposes under this Agreement, the Trustee shall be afforded the same protections and benefits under this Agreement as that afforded to the Trustee pursuant to Article VI of the Indenture.

Section 6.03 Compensation. (g) The Issuer agrees, subject to this Section 6.03(b):

(i) to pay the Class A-R Note Agent on each Distribution Date in accordance with, and subject to, the Indenture, the Agency Fee for all services rendered by it hereunder or under the Indenture;

(ii) to reimburse the Class A-R Note Agent (subject to any written agreement between the Issuer and the Class A-R Note Agent) forthwith upon its request for all reasonable and documented out-of-pocket costs and expenses (including reasonable attorneys' fees and expenses of one outside counsel and, if deemed necessary by the Class A-R Note Agent, any local counsel) incurred or made by the Class A-R Note Agent in accordance with any provision of this Agreement or the Indenture; and

(iii) to indemnify the Class A-R Note Agent and its officers, directors, employees and agents for, and to hold them harmless against, any loss, liability or reasonable and documented out-of-pocket expense (including reasonable attorneys' fees and expenses of one outside counsel and, if deemed necessary by the Class A-R Note Agent, any local counsel) incurred without gross negligence, willful misconduct, bad faith or material breach on their part, arising out of or in connection with the exercise or performance of any of the Class A-R Note Agent's obligations or duties under this Agreement or the Indenture, including the costs and expenses of defending themselves against any claim or liability in connection therewith; provided, however that notwithstanding the foregoing or any other provision to the contrary herein, the Issuer shall not in any event be liable to the Class A-R Note Agent or its officers, directors, employees and agents for any consequential, indirect, or special damages arising under, or incurred in connection with, this Agreement or the Indenture.

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(h) Any amounts payable to the Class A-R Note Agent pursuant to Section 6.03 shall be payable as Administrative Expenses on each Distribution Date only to the extent that funds are available for such purpose in accordance with the Priority of Distributions, and any such amounts not paid on or prior to any Distribution Date shall remain outstanding and shall be payable on the next Distribution Date on which funds are available for such purpose pursuant to the Priority of Distributions.

(i) The provisions of this Section 6.03 shall survive the termination of this Agreement and the removal or resignation of the Class A-R Note Agent (to the extent of any fees or indemnified liabilities, costs, expenses and other amounts arising or incurred prior to, or arising out of actions or omissions occurring prior to, such termination, resignation or removal).

Section 6.04 Resignation and Removal; Appointment of a Successor. (h)Except as provided in Section 6.04(d) below, no resignation or removal of the Class A-R Note Agent and no appointment of a successor Class A-R Note Agent pursuant to this Section 6.04 shall become effective until the acceptance of appointment by the successor Class A-R Note Agent pursuant to Section 6.05 and in accordance with Section 6.06.

(i) The Class A-R Note Agent may resign at any time by giving 60 days' prior written notice thereof to the Co-Issuers, the Trustee, the Class A-R Noteholders, the Collateral Manager, S&P and Moody's.

(j) If at any time prior to the last day of the Class A-R Commitment Period the Class A-R Note Agent shall materially breach its obligations hereunder or under the Indenture, or shall become incapable of acting then, in either such case (subject to Section 6.04(a)), (i) the Co-Issuers, by Issuer Order, may remove the Class A-R Note Agent, or (ii) any Class A-R Noteholder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Class A-R Note Agent and the appointment of a successor Class A-R Note Agent. If at any time prior to the last day of the Class A-R Commitment Period the Class A-R Note Agent shall be adjudged as bankrupt or insolvent or a receiver or liquidator of the Class A-R Note Agent or of its property shall be appointed or any public officer shall take charge or control of the Class A-R Note Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, subject to Section 6.04(a), the Class A-R Note Agent shall be removed.

(k) Notwithstanding the foregoing, the Class A-R Note Agent may resign its duties hereunder without any requirement that a successor Class A-R Note Agent be obligated hereunder and without any liability for further performance of any duties hereunder upon at least 30 days' prior written notice to the Collateral Manager and the Issuer of termination upon the occurrence of any of the following events and the failure to cure such event within such 30 day notice period: (i) failure of the Issuer to pay any of the amounts specified in Section 6.03 on a Distribution Date as to which the Issuer and the Collateral Manager have received an invoice from the Class A-R Note Agent for such amount due pursuant to Section 6.03 at least 15 Business Days prior thereto, to the extent that amounts are available therefor under Section 11.1(a) of the Indenture or (ii) failure of the Issuer to provide any indemnity payment or expense reimbursement to the Class A-R Note Agent required under Section 6.03 on a Distribution Date as to which the Issuer and the

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Collateral Manager have received a written request for such payment or reimbursement at least 60 days prior thereto.

(l) If the Class A-R Note Agent shall resign or be removed in accordance with the terms hereof, or if a vacancy shall occur in the office of the Class A-R Note Agent for any reason, the Co-Issuers, by Issuer Order, shall, by written instrument executed by an Authorized Officer of each of the Co-Issuers and the successor Class A-R Note Agent, promptly appoint a successor Class A-R Note Agent meeting the requirements of Section 6.06; provided, that such successor Class A-R Note Agent shall be appointed only upon the written consent of a Majority of the Class A-R Notes and the Collateral Manager. If the Co-Issuers shall fail to appoint a successor Class A-R Note Agent meeting the requirements of Section 6.06 within 30 days after such notice of resignation, removal or the occurrence of such vacancy, a successor Class A-R Note Agent meeting the requirements of Section 6.06 may be appointed by a Majority of the Class A-R Notes delivered to the Issuer, the Collateral Manager and the retiring Class A-R Note Agent. The successor Class A-R Note Agent so appointed shall, forthwith upon its acceptance of such appointment, become the successor Class A-R Note Agent and supersede any successor Class A-R Note Agent proposed by the Co-Issuers. If no successor Class A-R Note Agent shall have been so appointed by the Co-Issuers or such Class A-R Noteholders and shall have accepted appointment in the manner hereinafter provided, the retiring Class A-R Note Agent or any Class A-R Noteholder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Class A-R Note Agent.

(m) The Co-Issuers shall give prompt notice of each resignation and each removal of the Class A-R Note Agent and each appointment of a successor Class A-R Note Agent on or prior to the last day of the Class A-R Commitment Period by mailing written notice of such event by first‑class mail, postage prepaid, to the Trustee, the Collateral Manager, S&P, Moody's and each Class A-R Noteholder and the related Guarantor, if any, as their names and addresses appear in the Note Register. Each notice shall include the name and address of the successor Class A-R Note Agent. If the Co-Issuers fail to mail any such notice within ten days after acceptance of appointment by the successor Class A-R Note Agent, the successor Class A-R Note Agent shall cause such notice to be given at the expense of the Co-Issuers.

Section 6.05 Acceptance of Appointment by Successor. Every successor Class A-R Note Agent appointed hereunder shall execute, acknowledge and deliver to the Co-Issuers and the retiring Class A-R Note Agent an instrument accepting such appointment. Upon delivery of the required instrument, the resignation or removal of the retiring Class A-R Note Agent shall become effective and such successor Class A-R Note Agent, without any other act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of the retiring Class A-R Note Agent; provided, that upon request of the Co-Issuers or a Majority of the Class A-R Notes or the successor Class A-R Note Agent, such retiring Class A-R Note Agent shall, upon payment of its fees and expenses then unpaid, execute and deliver an instrument transferring to such successor Class A-R Note Agent all the rights, powers, duties and obligations of the retiring Class A-R Note Agent.

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Section 6.06 Class A-R Note Agent Criteria. The Class A-R Note Agent, and any entity appointed as a successor Class A-R Note Agent, shall be required to have (i) a combined capital and surplus of at least $200,000,000, (ii) a long-term debt rating assigned by S&P of at least "A‑" unless the S&P Rating Condition is satisfied with respect thereto, (iii) a long-term debt rating assigned by Moody's of at least "A3" unless the Moody's Rating Condition is satisfied with respect thereto and (iv) an office within the U.S. If the Class A-R Note Agent publishes reports of condition at least annually, then for the purposes of this Section 6.06, the combined capital and surplus of the Class A-R Note Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Class A-R Note Agent shall cease to be eligible in accordance with the provisions of this Section 6.06, it shall resign immediately in the manner and with the effect specified in this Article VI.

ARTICLE VII

MISCELLANEOUS

Section 7.01 Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein (including each consent, notice, direction or request) shall be in writing and shall be delivered by hand or overnight courier service or sent by fax or electronic messaging system, as follows:

(n) if to the Co-Issuers, the Trustee or the Collateral Manager, at its address or fax number set forth in the Indenture;

(o) if to the Class A-R Note Agent, at its address or fax number set forth on Schedule 2.01 or at such other address as shall be designated by the Class A-R Note Agent in a notice to the Issuer, each Class A-R Noteholder and the Trustee;

(p) if to any Class A-R Noteholder, at its address or fax number set forth on Schedule 2.01 (in the case of the Class A-R Initial Noteholder) or in the Class A-R Sale and Transfer Agreement delivered by it; or at such other address as shall be designated by a Class A-R Noteholder in a notice to the Issuer, the Class A-R Note Agent and the Trustee;

(q) if to S&P, in the manner specified in the Indenture; and

(r) if to Moody's, in the manner specified in the Indenture.

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

Section 7.02 Waivers; Amendments. (j) No waiver of any provision of this Agreement or consent to any departure by the Issuer therefrom shall in any event be effective unless the same shall be permitted by Section 7.02(b) and the Indenture, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the funding of any Borrowing shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Trustee, the Class A-R Note Agent, any

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Class A-R Noteholder or any other holder of the Notes may have had notice or knowledge of such Default or Event of Default at the time.

(k) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Co-Issuers, the Class A-R Note Agent, the Trustee, the Collateral Manager and each of the Class A-R Noteholders; provided that any amendment to this Agreement of a type described in clauses (vi), (viii)(A), (ix), (xi), (xii), (xiii), (xviii), (xxii)(A) and (xxiii) of Section 8.1(a) of the Indenture (the "Applicable Clauses") (for this purpose, any reference in the Applicable Clauses to the Indenture being construed as a reference to this Agreement instead) shall require the consent of only the Co-Issuers, the Class A-R Note Agent, the Trustee, the Collateral Manager and such other parties specified in the Applicable Clauses. The Issuer will give written notice to S&P and Moody's and, unless all have consented thereto, each of the Class A-R Noteholders of any waiver, amendment or modification of any provision of this Agreement.

(l) No waiver, amendment or modification of the Indenture or any other agreement referred to herein or therein to which either of the Co-Issuers is a party (other than this Agreement) shall affect any of the rights or obligations under this Agreement of the parties hereto unless such waiver, amendment or modification is effected in accordance with the applicable provisions of the Indenture; provided that no such waiver, amendment or modification shall increase, or extend the term of any of the Class A-R Commitments, or extend the time or waive any requirement for the reduction or termination of any of the Class A-R Commitments, without the consent of each of the Class A-R Noteholders.

(m) A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.

Section 7.03 Successors and Assigns. (n) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and transferees. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and transferees) any legal or equitable right, remedy or claim under or by reason of this Agreement. Any purported transfer not in compliance with this Section 7.03 shall be null and void.

(o) Neither of the Co-Issuers may assign or delegate any of its rights or obligations under this Agreement without the prior consent of each Class A-R Noteholder, the Class A-R Note Agent and the Trustee. No Class A-R Noteholder may assign any of its rights or obligations under this Agreement or under any Class A-R Notes, except that any Class A-R Noteholder may transfer to one or more transferees all or a portion of its Class A-R Notes and the related rights and obligations under this Agreement (including all or a portion of its Class A-R Commitment and the advances at the time owing to it), to the extent that (i) any transfer by a Class A-R Noteholder of less than all of a Class A-R Note or the related Class A-R Commitment by such Class A-R Noteholder shall be of the same ratable portion of such Class A-R Note and the related Class A-R Commitment, (ii) no such transfer shall be effected unless all conditions precedent to the transfer of the relevant

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Class A-R Note specified herein and in the Indenture have been satisfied, (iii) no such transfer shall be effected during the Class A-R Commitment Period unless the transferee satisfies the Rating Requirement on the date of such transfer (as evidenced by a Class A-R Sale and Transfer Agreement executed and delivered by such transferee), (iv) no such transfer shall be effected unless the parties to such transfer shall have executed and delivered to the Class A-R Note Agent (with a copy to the Trustee) a duly completed Class A-R Sale and Transfer Agreement and the Class A-R Note Agent shall have consented to such transfer, and (v) all interests in a Class A-R Note shall be evidenced in definitive, registered form. Each Class A-R Noteholder may grant (and the Class A-R Initial Noteholder has granted) the right to an investment manager or other agent to take certain actions hereunder on its behalf. Class A-R Notes can only be held in the form of one or more Certificated Notes and cannot be exchanged for a beneficial interest in a Global Note. Upon acceptance and recording pursuant to Section 7.03(c), from and after the effective date specified in each Class A-R Sale and Transfer Agreement, the transferee thereunder shall be a party hereto and, to the extent of the interest transferred by such Class A-R Sale and Transfer Agreement, have the rights and obligations of a Class A-R Noteholder under this Agreement, and the transferring Class A-R Noteholder thereunder shall, to the extent of the interest transferred by such Class A-R Sale and Transfer Agreement, be released from its obligations under this Agreement (and, in the case of a Class A-R Sale and Transfer Agreement covering all of the transferring Class A-R Noteholder's rights and obligations under this Agreement and in respect of Class A-R Notes, such Class A-R Noteholder shall cease to be a party hereto). The Issuer shall provide, or cause to be provided, notice of any such transfer to S&P and Moody's.

(p) Upon its receipt of a duly completed Class A-R Sale and Transfer Agreement executed by a transferring Class A-R Noteholder and a transferee and surrender of its Class A-R Note, the Class A-R Note Agent shall accept such Class A-R Sale and Transfer Agreement and record the Class A-R Noteholder identification and amount transferred in the Class A-R Commitment Register (and the Class A-R Note Agent shall record such transfer in its duplicate register). No transfer shall be effective for purposes of this Agreement unless it has been recorded in the Class A-R Commitment Register as provided in this paragraph. Upon receipt by the Trustee of (A) the instructions from the Class A-R Note Agent as set forth above, (B) a Holder's Class A-R Note properly endorsed for assignment to the transferee and (C) a copy of the Class A-R Sale and Transfer Agreement, then the Class A-R Commitment Registrar shall cancel such Class A-R Note, record the transfer in the Register and the Class A-R Commitment Register and, upon execution by the Issuer, authenticate and deliver one or more Class A-R Notes bearing the same designation as the Class A-R Note endorsed for transfer and registered in the names and amounts specified in the Class A-R Sale and Transfer Agreement described in clause (C) above.

(q) Any Class A-R Noteholder may at any time grant a security interest in all or any portion of its rights under this Agreement to secure obligations of such Class A-R Noteholder, including any such grant to a Federal Reserve Bank, and this Section 7.03 shall not apply to any such grant of a security interest; provided that no such grant of a security interest shall release a Class A-R Noteholder from any of its obligations hereunder or substitute any such transferee for such Class A-R Noteholder as a party hereto.

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Section 7.04 Survival. All covenants, agreements, representations and warranties made by the Co-Issuers and each Class A-R Noteholder herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or the Indenture shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any advances, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Trustee, the Class A-R Note Agent or any Class A-R Noteholder may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as any Class A-R Note or any amount payable under this Agreement or the Indenture in respect of any Class A-R Note is outstanding and unpaid and so long as the Class A-R Commitments have not expired or terminated.

Section 7.05 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the Indenture constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Class A-R Note Agent and when the Class A-R Note Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by fax or pdf. shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 7.06 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any respect in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability in such matter without affecting the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 7.07 Governing Law; Jurisdiction; Consent to Service of Process; Waiver of Jury Trial Right. (a) THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, THE RELATIONSHIP OF THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE RIGHTS AND DUTIES OF THE PARTIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED IN ALL RESPECTS (WHETHER IN CONTRACT OR IN TORT) BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any documents related thereto, or for recognition or enforcement

‑29‑

of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees 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.

(c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 7.07(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

(e) EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING.

Section 7.08 Benefits of Indenture. Each of the Class A-R Noteholders hereby acknowledges and approves the pledge and assignment by the Co-Issuers of all of its right, title and interest in, to and under this Agreement to the Trustee for the benefit and security of the Secured Parties pursuant to the Indenture.

Section 7.09 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

Section 7.10 Non‑Recourse Obligations. The Class A-R Notes and all obligations of the Co-Issuers under this Agreement are non‑recourse obligations of the Co-Issuers. The Class A-R Notes are payable solely from the Assets pursuant to the Priority of Distributions. Upon realization of the Assets and the application of the proceeds thereof in accordance with the Indenture, any outstanding obligations of the Co-Issuers hereunder shall be extinguished and shall not thereafter revive. None of the Collateral Manager, the Trustee, the Class A-R Note Agent, the Administrator, any of their respective affiliates, security holders (including shareholders), members, partners, officers, directors or employees, or the security holders (including shareholders), members, partners, officers, directors, employees or incorporators of the Co-Issuers, or any other person or entity will be obligated to make payments on the Class A-R Notes. Consequently, the Class A-R Noteholders must rely solely on amounts received in respect of the Assets for the payment of principal thereof and interest and the Class A-R Commitment Fee thereon. This section shall survive the termination of this Agreement.

Section 7.11 Non‑Petition. Notwithstanding any other provision of this Agreement, neither any of the Class A-R Noteholders nor the Class A-R Note Agent, in its own

‑30‑

capacity, may, prior to the date which is one year (or, if longer, the applicable preference period) and one day after the payment in full of all Notes, institute against, or join any other Person in instituting against, the Issuer or the Co-Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, or other proceedings under federal or state bankruptcy or similar laws. Nothing in this Section 7.11 shall preclude, or be deemed to estop, the Class A-R Noteholders or the Class A-R Note Agent (i) from taking any action prior to the expiration of the aforementioned one year and one day (or longer) period in (A) any case or proceeding voluntarily filed or commenced by the Issuer or the Co-Issuer or (B) any involuntary insolvency proceeding filed or commenced by a Person other than such Class A-R Noteholder, the Class A-R Note Agent or any of their respective Affiliates, as applicable, or (ii) from commencing against the Issuer or the Co-Issuer or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding, subject to Section 7.10. This Section shall survive the termination of this Agreement.

Section 7.12 Issuer Orders. The Issuer hereby agrees that if an Issuer Order is required to be delivered in accordance with the terms hereof, it shall cause such Issuer Order to be delivered promptly following receipt of the applicable request therefor.

Section 7.13 Special Provisions Applicable to CP Conduits. (a) Each of the parties hereto (each, a "Restricted Person") hereby agrees that it will not institute against any CP Conduit, or join any other Person in instituting against, or encourage, cooperate with or join any Person in instituing against, any CP Conduit, any proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, present a petition for the winding up or liquidation of any CP Conduit or seek the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for any CP Conduit or for all or substantially all of its assets prior to the date that is two years and a day (or, if longer, the applicable preference period then in effect) after the last day on which any Commercial Paper Notes shall have been outstanding. The obligations under this Section 7.13(a) shall survive the termination of this Agreement and the payment of the Notes.

(b) Nothing in clause (a) above shall limit the right of any Restricted Person to file any claim in or otherwise take any action with respect to (i) any proceeding of the type described in clause (a) above that was instituted against any CP Conduit by any person other than such Restricted Person, so long as such Restricted Person did not encourage, cooperate with or join any Person in instituting such proceeding or (ii) any proceeding not of a type described in clause (a) above.

(c) Notwithstanding anything to the contrary contained herein, the obligations of any CP Conduit under this Agreement are solely the corporate obligations of such CP Conduit and, in the case of obligations of any CP Conduit other than Commercial Paper Notes, shall be payable at such time as funds are received by or are available to such CP Conduit in excess of funds necessary to pay in full all outstanding Commercial Paper Notes and, to the extent funds are not available to pay such obligations, the claims relating thereto shall not constitute a claim against such CP Conduit but shall continue to accrue. Each party hereto agrees that the payment of any claim (as defined in Section 101 of the Bankruptcy Law) of any such party shall be subordinated

‑31‑

to the payment in full of all Commercial Paper Notes. The provisions of this Section 7.13(c) shall survive the termination of this Agreement and the payment of the Notes.

(d) No recourse under any obligation, covenant or agreement of any CP Conduit contained in this Agreement shall be had against any incorporator, stockholder, officer, director, employee or agent of such CP Conduit or any agent of such CP Conduit or any of their Affiliates (solely by virtue of such capacity and excluding such CP Conduit's Guarantor, if applicable) 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 this Agreement is solely a corporate obligation of any such CP Conduit individually, and that no personal liability whatever shall attach to or be incurred by any incorporator, stockholder, officer, director, employee or agent of such CP Conduit or any agent thereof or any of their Affiliates (solely by virtue of such capacity and excluding such CP Conduit's Guarantor, if applicable) or any of them under or by reason of any of the obligations, covenants or agreements of such CP Conduit contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by any CP Conduit of any of such obligations, covenants or agreements, either at common law or at equity, or by statute, rule or regulation, of every such incorporator, stockholder, officer, director, employee or agent is hereby expressly waived as a condition of and in consideration for the execution of this Agreement, provided that the foregoing shall not relieve any such Person from any liability it might otherwise have as a result of fraudulent actions taken or omissions made by them. The provisions of this Section 7.13(d) shall survive termination of this Agreement.

(e) Each CP Conduit may act hereunder by and through its Program Manager.

(f) Each of the parties hereto waives any right to set‑off and to appropriate and apply any and all deposits (other than amounts in the Class A-R Rating Requirement Funding Account and any subaccount thereof) and any other indebtedness at any time held or owing thereby to or for the credit or the account of any CP Conduit against and on account of the obligations and liabilities of such CP Conduit to such party under this Agreement.

(g) Each CP Conduit agrees that it shall maintain confidentiality in accordance with the confidentiality provisions of the Indenture, provided that, notwithstanding anything to the contrary herein or in the Indenture, each CP Conduit may disclose to (i) its respective Conduit Rating Agencies, (ii) conduit support providers, (iii) any Affiliates of any such party and (iv) governmental authorities having jurisdiction over such CP Conduit, conduit support provider, any Affiliate of such party and any Conduit Rating Agency, the identities of (and other material information regarding) the Co-Issuers, any other obligor on, or in respect of, any Note issued to such CP Conduit, the Assets constituting collateral for such Notes and any of the terms and provisions of the Transaction Documents that it may deem necessary or advisable, provided that, in the case of clauses (ii) and (iii), such recipient is subject to customary confidentiality obligations.

(h) Notwithstanding anything herein to the contrary, each party hereto, and each assignee or potential assignee of any Class A-R Note is authorized to disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and tax structure of the offering and the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to investors relating to such tax treatment or tax structure. For this

‑32‑

purpose, "tax structure" is defined as facts relevant to the U.S. tax treatment of the offering and such transactions and does not include information relating to the identity of the Co-Issuers. This authorization to disclose the U.S. tax treatment and tax structure does not permit disclosure of information identifying the Co-Issuers, the Placement Agent, the Collateral Manager, any of their affiliates or any other party to the transactions contemplated hereby (except to the extent such information is relevant to U.S. tax structure or tax treatment).

(i) No pledge and/or collateral assignment by any CP Conduit to a conduit support provider of an interest in the rights of such CP Conduit in any Note issued to such CP Conduit and the Obligations shall constitute an assignment and/or assumption of such CP Conduit's obligations under this Agreement or the Transaction Documents, such obligations in all cases remaining with such CP Conduit. Moreover, any such pledge and/or collateral assignment of the rights of such CP Conduit shall be permitted hereunder without further action or consent and any such pledgee may foreclose on any such pledge and perfect an assignment of such interest and enforce such CP Conduit's right hereunder notwithstanding anything to the contrary in this Agreement or the Transaction Documents.

(j) Each CP Conduit represents, warrants and covenants, on behalf of itself, that each payment to the Issuer under this Agreement will have been made (i) in payment of a loan made by such CP Conduit in the ordinary course of business or financial affairs of such CP Conduit and (ii) in the ordinary course of business or financial affairs of such CP Conduit.

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

FS SENIOR FUNDING LTD.,
as Issuer


By:	___________________________ Name: Title:

FS SENIOR FUNDING CLO LLC,
as Co-Issuer


By:	___________________________ Name: Title:

Class A-R Purchase Agreement

NATIXIS, NEW YORK BRANCH,

as Class A-R Note Agent


By:	___________________________ Name:

Title:

Class A-R Purchase Agreement

VERSAILLES ASSETS LLC,
as Class A-R Initial Noteholder


By:	___________________________ Name: Title:

ACKNOWLEDGED:

WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee


By:	___________________________ Name: Title:

Class A-R Purchase Agreement

SCHEDULE 2.01

COMMITMENTS;
ADDRESSES FOR NOTICES; WIRE INSTRUCTIONS

CLASS A-R INITIAL NOTEHOLDERS



Name of Holder	Registered Name	Commitment
Versailles Assets LLC	SAILORLAUNCH & CO., as nominee of State Street Bank, as custodian for Deutsche Bank Trust Company Americas, as Collateral Trustee for Versailles Assets LLC, and other parties	U.S.$20,000,000

Address for Notices

Versailles Assets LLC

c/o Global Securitization Services, LLC

68 South Service Road, Suite 120

Melville, New York 11747

Attention: Bernard J. Angelo
Tel: (631) 587-4700

With a copy to:

Versailles Assets LLC

c/o Natixis, New York Branch

1251 Avenue of the Americas, 4^th Floor

New York, NY 10020

Attention: Henry Sandlass

Tel: (212) 891-5868

E-mail: versaillestransactions@us.natixis.com

Wire Instructions for Payments

To: Deutsche Bank Trust Company Americas

Acct Name: CTAS

Acct No.: 01419647

ABA: 021001033

Ref: Versailles Assets

Taxpayer Identification Numbers

Versailles Assets LLC: 13-4069428

Sailorlaunch & Co.: 13-4251510

CLASS A-R NOTE AGENT

Natixis, New York Branch
1251 Avenue of the Americas
New York, NY 10020
Attention: Evelyn Clarke
Tel: (212) 891‑5879
Facsimile: (646) 282‑2361
Email: evelyn.clarke@us.natixis.com
with a copy to scsgnotices@us.natixis.com

Class A-R Purchase Agreement

SCHEDULE 2.02

SHORT SETTLEMENT COMMITMENTS



Name of Holder	Short Settlement Commitment
Versailles Assets LLC	U.S.$5,000,000

EXHIBIT A

FORM OF CLASS A-R SALE AND TRANSFER AGREEMENT

Reference is made to the Class A-R Note Purchase Agreement, dated as of May 28, 2015 (as modified and supplemented and in effect from time to time, the "Class A-R Note Purchase Agreement"), by and among FS Senior Funding Ltd. (the "Issuer"), FS Senior Funding CLO LLC (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers"), each of the Class A-R Noteholders party thereto from time to time and Natixis, New York Branch, as Class A-R Note Agent (together with any successor in such capacity, the "Class A-R Note Agent") and the Indenture, dated as of May 28, 2015 (as modified and supplemented and in effect from time to time, the "Indenture"), entered into among the Issuer, the Co-Issuer and Wells Fargo Bank, National Association, as trustee (the "Trustee"). Terms used but not defined herein shall have the respective meanings ascribed thereto in the Class A-R Note Purchase Agreement and, if not defined in the Class A-R Note Purchase Agreement, in the Indenture.

The Transferor named below (the "Transferor") hereby sells and assigns to the Transferee named below (the "Transferee"), and the Transferee hereby purchases and assumes from the Transferor, effective as of the transfer date (the "Transfer Date") set forth below, the interests set forth below (the "Transferred Interest") in the Transferor's rights and obligations under the Class A-R Note Purchase Agreement, including, without limitation, the interests set forth below in the Class A-R Notes held by (and the related Class A-R Commitment of and outstanding principal amount of advances made by) the Transferor on the Transfer Date. The Transferee hereby acknowledges receipt of a copy of the Indenture and the Class A-R Note Purchase Agreement and confirms that, on the Transfer Date, it satisfies the Rating Requirement and the other conditions of the Indenture and the Class A-R Note Purchase Agreement. From and after the Transfer Date (A) the Transferee shall be a party to and be bound by the provisions of the Class A-R Note Purchase Agreement and, to the extent of the Transferred Interest, have the rights and obligations of a Class A-R Noteholder thereunder and (B) the Transferor shall, to the extent of the Transferred Interest, relinquish its rights and be released from its obligations under the Class A-R Note Purchase Agreement. The Transferee hereby represents and warrants to the Issuer that, as of the Transfer Date, the representations and warranties contained in the Class A-R Note Purchase Agreement (including, without limitation, in Sections 3.08 and 4.02 thereof) or any other documents to which the Transferor is a party are, and will be as of the date of any Borrowing, true and correct in all respects with respect to the Transferee. The Transferor hereby represents and warrants to the Transferee that, as of the Transfer Date, the Transferor (1) owns the Transferred Interest free and clear of any lien or other encumbrance and (2) is not aware of any Default or Event of Default under the Indenture.

The Transferee acknowledges that by entering into this Class A-R Sale and Transfer Agreement it is deemed to warrant and represent all the warranties and representations required to be made by each transferee of Class A-R Notes under the Indenture and the Class A-R Note Purchase Agreement.

A-1

The Transferee understands that the Co-Issuers, the Trustee, the Class A-R Note Agent and their counsel will rely upon the accuracy and truth of the foregoing representations, and it hereby consents to such reliance.

This Class A-R Sale and Transfer Agreement shall be governed by and construed in accordance with the law of the State of New York.

Legal Name of Transferor: [l]

Legal Name of Transferee: [l]

Transferee's Address for Notices: [l]

Fax No.: [l]

Details of electronic messaging system: [l]

Payment Instructions: [l]

Federal Taxpayer ID No. of Transferee: [l]

[Transferee is not a CP Conduit].

If Transferee has a Guarantor, the guaranty executed by such Guarantor is attached hereto.

The completed tax forms required to be delivered by Transferee pursuant to clause (ii) of Section 2.6(l) of the Indenture are attached hereto.

Effective Date of Transfer (Transfer Date): [l]



	Amount Transferred	Amount Retained by Transferor
Class A-R Commitment:	U.S.$ [l]	U.S.$ [l]
Short Settlement Commitment:	U.S.$ [l]	U.S.$ [l]
Outstanding Principal Amount of Advances:	U.S.$ [l]	U.S.$ [l]

The terms set forth above are hereby agreed to:

[NAME OF TRANSFEROR], as Transferor


By:	___________________________ Name: Title:

A-2

[NAME OF TRANSFEREE], as Transferee


By:	___________________________ Name: Title:

ACCEPTED AS OF [l], 20[l]

NATIXIS, NEW YORK BRANCH, as Class A-R Note Agent

By:___________________________
Name:

Title:

A-3

EXHIBIT B

FORM OF BORROWING REQUEST

Natixis, New York Branch
1251 Avenue of the Americas
New York, NY 10020

Wells Fargo Bank, National Association

9062 Old Annapolis Road,

Columbia, Maryland, 21045,

Attention: CDO Trust Services - FS Senior Funding Ltd.

Ladies and Gentlemen:

This Borrowing Request is delivered to you pursuant to Section 3.03 of the Class A-R Note Purchase Agreement, dated as of May 28, 2015 (together with all amendments, if any, from time to time made thereto, the "Class A-R Note Purchase Agreement"), by and among FS Senior Funding Ltd. (the "Issuer"), FS Senior Funding CLO LLC (the "Co-Issuer"), each of the Class A-R Noteholders party thereto and Natixis, New York Branch, as Class A-R Note Agent (the "Class A-R Note Agent"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings ascribed thereto in the Class A-R Note Purchase Agreement.

The Issuer hereby requests that a Borrowing be made in the aggregate principal amount of $____________ on ___________, 20___. [Such Borrowing is a Short Settlement Borrowing.][Such Borrowing is a Downgrade Draw.][delete if not applicable]

The Issuer hereby acknowledges and agrees that each of the delivery of this Borrowing Request and the acceptance by the Issuer of the proceeds of the Borrowing requested hereby constitute a representation and warranty by the Issuer that, on the date of such Borrowing, and before and after giving effect thereto and to the application of the proceeds therefrom, all statements set forth in Section 4.01 and Section 5.02 of the Class A-R Note Purchase Agreement are true and correct in all material respects on and as of the date of the requested Borrowing (unless stated to relate solely to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date) and all conditions set forth in Section 5.02 of the Class A-R Note Purchase Agreement have been satisfied.

The Issuer agrees that if prior to the time of the Borrowing requested hereby any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify the Class A-R Note Agent and each Class A-R Noteholder. Except to the extent, if any, that prior to the time of the Borrowing requested hereby the Class A-R Note Agent and each Class A-R Noteholder shall receive written notice to the contrary from the Issuer, each matter certified to herein shall be deemed once again to be certified as true and correct at the date of such Borrowing as if then made.

B-1

Please wire transfer the proceeds of the Borrowing to the accounts of the following persons at the financial institutions indicated respectively:



Payment Instructions:	[l]
	ABA: [l]
	Account Number: [l]
	Account Name: [l]
	Reference: [l]

The Issuer has caused this Borrowing Request to be executed and delivered by its duly Authorized Officer (or an Authorized Officer of the Collateral Manager) this ____ day of _______________, 20___.

It is understood and acknowledged that the undersigned is executing this certificate not in an individual capacity but solely as an Authorized Officer of the Issuer or the Collateral Manager and is without any personal liability as to the matters contained in this certificate.

FS SENIOR FUNDING LTD.


By:___________________________	Name: Title:

B-2

EXHIBIT C

FORM OF CLASS A-R PREPAYMENT NOTICE

Natixis, New York Branch
1251 Avenue of the Americas
New York, NY 10020

FS Senior Funding Ltd.
c/o Appleby Trust (Cayman) Ltd.

Clifton House, 75 Fort Street, P.O. Box 1350

Grand Cayman, KY1-1108, Cayman Islands

Attention: The Directors

FS Senior Funding CLO LLC

c/o CICS, LLC

225 West Washington Street, Suite 2200

Chicago, IL 60606

Attention: Melissa Stark

Wells Fargo Bank, National Association

9062 Old Annapolis Road,

Columbia, Maryland, 21045,

Attention: CDO Trust Services - FS Senior Funding CLO Ltd.

Ladies and Gentlemen:

This Class A-R Prepayment Notice is delivered to you pursuant to Section 3.06(c) of the Class A-R Note Purchase Agreement, dated as of May 28, 2015 (together with all amendments, if any, from time to time made thereto, the "Class A-R Note Purchase Agreement"), by and among FS Senior Funding Ltd. (the "Issuer"), FS Senior Funding CLO LLC (the "Co-Issuer"), each of the Class A-R Noteholders party thereto and Natixis, New York Branch, as Class A-R Note Agent (the "Class A-R Note Agent"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings ascribed thereto in the Class A-R Note Purchase Agreement.

This is to give you notice that a Class A-R Prepayment in the aggregate principal amount of $____________ will be made on ___________, 20___. [If a draw made on the Class A-R Notes during the same Interest Accrual Period is being repaid, also include: Kindly note that the draw made on __________, 20__ is being repaid hereby.]

C-1

FIFTH STREET SENIOR FLOATING RATE CORP., as Collateral Manager


By:___________________________	___________________________ Name: Title:

C-2

ANNEX A


(A)	UK/Cayman Islands Intergovernmental Agreement


1.	(a) The Class A-R Noteholder _______ (is) _______(is not) (please initial one) resident in the United Kingdom for tax purposes.^*


(b)	If the Class A-R Noteholder is an individual that is resident in the United Kingdom for tax purposes, is the Class A-R Noteholder a Specified United Kingdom Person?^**

(please check one) Yes____ No____

If yes, please provide the following:

Date of Birth:

United Kingdom National Insurance Number:

_______________________

For informational purposes only, the Investor is treated as resident in the United Kingdom for tax purposes if the Investor is (i) resident solely in the United Kingdom (under the domestic laws of the United Kingdom) or (ii) resident both in the United Kingdom and another jurisdiction (under the respective domestic laws of the United Kingdom and such other jurisdiction). An entity, such as a partnership, limited liability partnership or similar arrangement, is treated as resident in the United Kingdom if the control and management of the business of the entity takes place in the United Kingdom.


^**	For purposes of this item, the term "Specified United Kingdom Person" means a person or entity that is resident in the United Kingdom for tax purposes (including a person who is resident both in the United Kingdom and in any other jurisdiction under the respective domestic laws of the United Kingdom and such other jurisdiction), other than:


(i)	a corporation the stock of which is regularly traded on one or more established securities markets;


(ii)	any corporation that is a Related Entity of a corporation described in clause (i);


(iii)	a Depository Institution;


(iv)	a broker or dealer in securities, commodities or derivative financial instruments (including notional principal contracts, futures, forwards and options) that is registered as such under the laws of the United Kingdom;


(v)	a United Kingdom Governmental Organisation, being any political subdivision of the UK government or any wholly owned agency or instrumentality of any one or more of the foregoing;


(vi)	the United Kingdom Central Bank (the Bank of England and any of its wholly owned subsidiaries);


(vii)	a United Kingdom office of an International Organisation (examples of which include the International Monetary Fund, the World Bank, the International Bank for Reconstruction and Development and the European Community);

(viii) a pension scheme or other arrangement registered with HMRC under Part 4 of the Finance Act 2004 or the United Kingdom Pension Protection Fund.

An entity is a Related Entity of another entity if either entity controls the other entity or both entities are under common control. For this purpose, control includes direct or indirect ownership of more than 50% of the vote or value in an entity.

Annex A-1


(c)	If the Class A-R Noteholder is an entity that is resident in the United Kingdom for tax purposes, is the Class A-R Noteholder a Specified United Kingdom Person?

(please check one) Yes____ No____


2.	(a) If the Class A-R Noteholder is an entity that is not resident in the United Kingdom for tax purposes, is the Class A-R Noteholder a Passive Non-Financial Foreign Entity ("Passive NFFE")?^***

(please check one) Yes____ No____


(b)	If the Class A-R Noteholder is a Passive NFFE, is any person who is a Controlling Person^****in respect of the Class A-R Noteholder resident in the United Kingdom for tax purposes?

(please check one) Yes____ No____

_______________________


^***	For purposes of this item, the term "Passive NFFE" means any NFFE that is not an Active NFFE. An NFFE is any Non-United Kingdom resident entity that is not a Financial Institution. A Financial Institution is a Custodial Institution, a Depository Institution, an Investment Entity or a Specified Insurance Company, each as defined for the purposes of the U.S. Foreign Account Tax Compliance Act.

An Active NFFE is any NFFE that meets any of the following criteria:


(i)	less than 50% of the NFFE's gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50% of the assets held by the NFFE during the preceding calendar year or other appropriate reporting period are assets that produce or are held for the production of passive income;


(ii)	the stock of the NFFE is regularly traded on an established securities market or the NFFE is a Related Entity of an entity the stock of which is traded on an established securities market;


(iii)	the NFFE is a government, a political subdivision of such government or a public body performing a function of such government or a political subdivision thereof, or an entity wholly owned by one or more of the foregoing;

(iv)

substantially all of the activities of the NFFE consist of holding (in whole or in part) the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a Financial Institution, except that an NFFE shall not qualify for this status if the NFFE functions (or holds itself out) as an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes;


(v)	the NFFE is not yet operating a business and has no prior operating business, but is investing capital into assets with the intent to operate a business other than that of a Financial Institution; provided, that the NFFE shall not qualify for this exception after the date that is 24 months after the date of the initial organization of the NFFE;


(vi)	the NFFE was not a Financial Institution in the past five years, and is in the process of liquidating its assets or is reorganizing with the intent to commence operations in a business other than that of a Financial Institution; or


(vii)	the NFFE primarily engages in financing and hedging transactions with or for Related Entities that are not Financial Institutions, and does not provide financing or hedging services to any entity that is not a Related Entity, provided that the group of any such Related Entity is primarily engaged in a business other than that of a Financial Institution.

^**** For purposes of this item and item (B) below, the term "Controlling Persons" means the natural persons who exercise control over an entity. In the case of a trust, such term means the settlor, the trustees, the protector (if any), the beneficiaries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust, and in the case of a legal arrangement other than a trust, such term means persons in equivalent or similar positions. In the case of a company and similar legal persons, such term also means any persons owning 25% or more of the company (or legal person). The term "Controlling Persons" shall be interpreted in a manner consistent with the Recommendations of the Financial Action Task Force.

Annex A-2


(c)	If the Class A-R Noteholder answered "Yes" to item 2(b), please provide the following information with respect to each such United Kingdom tax resident Controlling Person:

(Attach additional pages if necessary.)

Name:

Address:

Date of Birth:

United Kingdom National Insurance Number:


(B)	U.S./Cayman Islands Intergovernmental Agreement


1.	If the Class A-R Noteholder has indicated on the applicable Form W-8 (or question 2 below) that it is a Passive NFFE, is any person who is a Controlling Person in respect of the Class A-R Noteholder resident in the United States for tax purposes?

(please check one) Yes____ No____

If yes, please provide the following information with respect to each such United States tax resident Controlling Person:

(Attach additional pages if necessary.)

Name:

Address:

Date of Birth:

United States Taxpayer Identification Number:


2.	If the Class A-R Noteholder has provided a Form W-8ECI or is treated as a disregarded entity for U.S. tax purposes, please indicate the Class A-R Noteholder's U.S. FATCA status:^*

(Please initial one and provide the Global Intermediary Identification Number ("GIIN"), as appropriate)

_______________________


^*	Definitions of the following U.S. FATCA statuses can be found in the Instructions to the U.S. Internal Revenue Service Form W-8BEN-E (available at http://www.irs.gov/pub/irs-pdf/iw8bene.pdf).

Annex A-3



_____ Initial	Participating FFI (including a Reporting Model 2 FFI) GIIN:
_____ Initial	Registered Deemed Compliant FFI (including a Reporting Model 1 FFI) GIIN:
_____ Initial	Certified Deemed Compliant FFI/Exempt Beneficial Owner/Nonreporting IGA FFI GIIN (if any):
_____ Initial	Nonparticipating FFI
_____ Initial	NFFE (other than a Passive NFFE)
_____ Initial	Passive NFFE
_____ Initial	Other

Annex A-4

EXECUTION

MASTER TRANSFER AGREEMENT

by and between

FIFTH STREET SENIOR FLOATING RATE CORP.,
as the Seller

and

FS SENIOR FUNDING LTD.,
as the Buyer

Dated as of May 28, 2015

TABLE OF CONTENTS

Page



ARTICLE I		DEFINITIONS	1
	Section 1.01	Definitions	1
	Section 1.02	Other Terms	4
	Section 1.03	Computation of Time Periods	4
	Section 1.04	Interpretation	4
	Section 1.05	References	5
	Section 1.06	Calculations	5

ARTICLE II		TRANSFER OF COLLATERAL OBLIGATIONS	5
	Section 2.01	Sale, Transfer and Assignment	5
	Section 2.02	Purchase Price	7
	Section 2.03	Payment of Purchase Price	8
	Section 2.04	[Reserved.]	9
	Section 2.05	Characterization	9

ARTICLE III		CONDITIONS PRECEDENT	9
	Section 3.01	Conditions Precedent to Closing	9
	Section 3.02	Conditions Precedent to all Purchases	9
	Section 3.03	Release of Excluded Amounts	10

ARTICLE IV		REPRESENTATIONS AND WARRANTIES	11
	Section 4.01	Representations and Warranties Regarding the Seller	11
	Sections 4.02	Representations and Warranties of the Seller Relating to the Agreement and the Collateral	15
	Section 4.03	Representations and Warranties Regarding the Buyer	15

ARTICLE V		COVENANTS	17
	Section 5.01	Affirmative Covenants of the Seller	17
	Section 5.02	Negative Covenants of the Seller	18

ARTICLE VI		OPTION TO REPURCHASE AND SUBSTITUTE COLLATERAL OBLIGATIONS	19
	Section 6.01	Substitution of Collateral Obligations	19
	Section 6.02	Seller's Optional Right to Repurchase Collateral Obligations	20

ARTICLE VII		INDEMNIFICATION BY THE ORIGINATOR	21
	Section 7.01	Indemnification	21
	Section 7.02	Liabilities to Obligors	21
	Section 7.03	Limitation on Liability	22
	Section 7.04	Operation of Indemnities	22

ARTICLE VIII		TERM AND TERMINATION	22
	Section 8.01	Termination	22

ARTICLE IX		MISCELLANEOUS	22
	Section 9.01	Amendments and Waivers	22
	Section 9.02	Notices, Etc.	23

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TABLE OF CONTENTS

(continued)

Page



Section 9.03	Binding Effect; Benefit of Agreement	23
Section 9.04	Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue Service of Process	23
Section 9.05	Waiver of Jury Trial	24
Section 9.06	Certain Taxes	24
Section 9.07	Non-Petition	24
Section 9.08	Recourse Against Certain Parties	24
Section 9.09	Protection of Right, Title and Interest in, to and under the Assets; Further Action Evidencing Purchases	26
Section 9.10	Execution in Counterparts; Severability; Integration	26
Section 9.11	Heading and Exhibits	27
Section 9.12	Assignment	27
Section 9.13	No Waiver; Cumulative Remedies	27
Exhibit A	Form of Assignment
Schedule 1	Initial Collateral Obligations

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MASTER TRANSFER AGREEMENT

THIS MASTER TRANSFER AGREEMENT, dated as of May 28, 2015 (this “Agreement”), is by and between FIFTH STREET SENIOR FLOATING RATE CORP., a Delaware corporation (“Fifth Street,” and in its capacity as seller hereunder, the “Seller”) and FS SENIOR FUNDING LTD., an exempted company incorporated with limited liability in the Cayman Islands (the “Buyer”).

WHEREAS, in the regular course of its business, the Seller originates and/or otherwise acquires Collateral Obligations; and

WHEREAS, pursuant to this Agreement, the Buyer will purchase and may from time to time continue to purchase certain assets from the Seller and the Seller will sell and may from time to time continue to sell and/or contribute to the Buyer certain assets originated or acquired by the Seller in its normal course of business, together with, among other things, certain related security interests and rights of payment thereunder.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions.

Capitalized terms used but not defined in this Agreement shall have the meanings attributed to such terms in the Indenture. In addition, as used herein, the following defined terms shall have the following meanings:

“Agreement” shall have the meaning provided in the first paragraph of this Agreement.

“Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, public body, administrative tribunal, central bank, public office, court, arbitration or mediation panel, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of government, including the FINRA, the SEC, the stock exchanges, any Federal, state, territorial, county, municipal or other government or governmental agency, arbitrator, board, body, branch, bureau, commission, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign.

“Buyer” shall have the meaning provided in the first paragraph of this Agreement.

“Closing Date” means May 28, 2015.

“Collateral” shall have the meaning provided in Section 2.01.

“Collateral Management Agreement” means the Collateral Management Agreement, dated as of May 28, 2015, by and between Fifth Street, in its capacity as the Collateral Manager, and the Buyer, as the Issuer, as the same may be amended, supplemented, restated or modified from time to time.

“Collateral Obligation List” means the list of Collateral Obligations provided by the Seller to the Buyer on each Purchase Date and incorporated as Schedule I to this Agreement by reference, as such list may be amended, supplemented or modified from time to time in accordance with this Agreement.

“Constituent Documents” means, in respect of any Person, the certificate or articles of formation or organization, the limited liability company agreement, operating agreement, partnership agreement, joint venture agreement or other applicable agreement of formation or organization (or equivalent or comparable constituent documents) and other organizational documents and by-laws and any certificate of incorporation, certificate of formation, certificate of limited partnership and other agreement, or similar instrument filed or made in connection with its formation or organization, in each case, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Event of Bankruptcy” means (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Seller or its debts, or of all or a substantial part of its assets, under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of all or a receiver, trustee, custodian, sequestrator, conservator or similar official for the Seller or for all or a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 consecutive days; (b) an order or decree approving or ordering any of the actions described in clause (a) shall be entered and the continuance of any such order or decree is unstayed and in effect for a period of 60 consecutive days; or (c) the Seller shall: (i) be wound up or dissolved, (ii) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (iii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) of this definition, (iv) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Seller or for all or a substantial part of its assets, (v) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (vi) cease to be able to, or admit in writing its inability to, pay its debts as they become due and payable, or make a general assignment for the benefit of creditors or (vii) take any action for the purpose of effecting any of the foregoing.

“Excluded Amounts” means (a) any amount received by, on or with respect to any Collateral Obligation in the Collateral, which amount is attributable to the payment of any tax, fee or other charge imposed by any applicable Authority on such Collateral Obligation and to the extent such amount is attributable to a time prior to the Purchase Date; (b) any amount representing escrows relating to taxes, insurance and other amounts in connection with any Collateral Obligation which is held in an escrow account for the benefit of the related Obligor and the secured party (other than the Seller in its capacity as lender with respect to such Collateral Obligation) pursuant to escrow

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arrangements; (c) any amount with respect to any Collateral Obligation repurchased or substituted by the Seller under Article VI to the extent such amount is attributable to a time after the effective date of such repurchase or substitution; (d) any origination fee retained by the Seller in connection with the origination of any Collateral Obligation; and (e) any Equity Security related to any Collateral Obligation that the Seller determines will not be transferred to the Buyer by the Seller in connection with the sale of any related Collateral Obligation hereunder.

“Fifth Street” shall have the meaning provided in the first paragraph of this Agreement.

“Governmental Authorizations” means all franchises, permits, licenses, approvals, consents, orders and other authorizations of all Authorities.

“Governmental Filings” means all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such filings with all Authorities.

“Indemnified Party” shall have the meaning provided in Section 7.01.

“Indenture” means the agreement dated as of the Closing Date, by and among the Issuer, the Co-Issuer, the Trustee and the Collateral Agent.

“Participation” shall have the meaning provided in Section 2.04(a).

“Payment in Full” means payment in full in cash of all Obligations (other than any unasserted contingent obligations), including all principal, interest, Class A-R Commitment Fees, Aggregate Collateral Management Fees, Administrative Expenses and fees, if any, payable under the Transaction Documents.

“Payment in Full Date” means the date on which a Payment in Full occurs and the Class A-R Commitments are terminated.

“Purchase” means a purchase, transfer, settlement or other acquisition by the Buyer of Collateral from or as directed by the Seller pursuant to Section 2.01.

“Purchase Date” means any day on which any Collateral is acquired by the Buyer pursuant to the terms of this Agreement (including any Substitution Date), and including, for the avoidance of doubt, any day on which any Collateral is settled directly with the Buyer from a third party in a transaction intermediated, arranged and underwritten by the Seller and any day on which any Collateral is settled with the Buyer in a transaction in which the Buyer is the designee of the Seller under the instruments of conveyance relating to the applicable Collateral.

“Purchase Price” shall have the meaning provided in Section 2.02.

“Related Contracts” means all credit agreements, indentures, notes, security agreements, leases, financing statements, guaranties, and other contracts, agreements, instruments and other papers evidencing, securing, guaranteeing or otherwise relating to any Collateral Obligation or Eligible Investment or other investment with respect to any Collateral or proceeds thereof (including

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the related Underlying Instruments), together with all of the Seller’s right, title and interest in, to and under all property or assets securing or otherwise relating to any Collateral Obligation or other loan or security of the Seller or Eligible Investment or other investment with respect to any Collateral or proceeds thereof or any Related Contract.

“Replaced Collateral Obligation” shall have the meaning provided in Section 6.01.

“Repurchase Price” means, on any date of determination with respect to any Credit Risk Obligation or Defaulted Obligation with respect to which the Seller elects to exercise its option to repurchase pursuant to Section 6.02, an amount equal to at least the Market Value of such Credit Risk Obligation or Defaulted Obligation in accordance with Section 12.1 of the Indenture.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, all as from time to time in effect, or any successor law, rules or regulations, and any reference to any statutory or regulatory provisions shall be deemed to be a reference to any successor statutory or regulatory provision.

“Seller” shall have the meaning provided in the first paragraph of this Agreement.

“Substitute Collateral Obligation” shall have the meaning provided in Section 6.01.

“Substitution Date” means any date on which the Seller transfers a Substitute Collateral Obligation to the Buyer.

Section 1.02 Other Terms.

All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States. The symbol “$” shall mean the lawful currency of the United States of America. All terms used in Article 9 of the UCC in the State of New York, and 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,” the words “to” and “until” each mean “to but excluding”.

Section 1.04 Interpretation.

In this Agreement, unless a contrary intention appears:

(i) the singular number includes the plural number and vice versa;

(ii) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;

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(iii) references to “including” means “including, without limitation”;

(iv) reference to day or days without further qualification means calendar days;

(v) unless otherwise stated, reference to any time means New York, New York time;

(vi) references to “writing” include printing, typing, lithography, electronic or other means of reproducing words in a visible form;

(vii) reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, supplemented, replaced, restated, waived or extended 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 therefore; and

(viii) 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.

Section 1.05 References.

All section references (including references to the preamble), unless otherwise indicated, shall be to Sections (and the preamble) in this Agreement.

Section 1.06 Calculations.

Except as otherwise provided herein, all interest rate and basis point calculations hereunder will be made on the basis of a 360-day year and the actual days elapsed in the relevant period and will be carried out to at least three decimal places.

ARTICLE II

TRANSFER OF COLLATERAL OBLIGATIONS

Section 2.01 Sale, Transfer and Assignment.

(a) On the terms and subject to the conditions set forth in this Agreement (including the conditions to purchase set forth in Article III), on each Purchase Date, the Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Buyer, and the Buyer hereby Purchases and takes from the Seller all right, title and interest (whether now owned or hereafter acquired or arising and wherever located) of the Seller (including all obligations of the Seller as lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the

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Seller to Buyer hereunder which obligations Buyer hereby assumes) in the property identified in clauses (i)–(v) below and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, accessions, proceeds and other property consisting of, arising out of, or related to any of the following (in each case excluding the Excluded Amounts) (collectively, the “Collateral”):

(i) the Collateral Obligations listed on each Collateral Obligation List delivered by the Seller to the Buyer from time to time pursuant to this Agreement, all payments paid in respect thereof, all monies due, to become due or paid in respect of such Collateral Obligations on and after the related Purchase Date (including all Sale Proceeds and other recoveries thereon, in each case as they arise after the related Purchase Date) and any related Assets;

(ii) all Liens with respect to the Collateral Obligations referred to in clause (i) above;

(iii) all Related Contracts with respect to the Collateral Obligations referred to in clause (i) above;

(iv) all collateral security granted under any Related Contracts; and

(v) all income and proceeds of the foregoing.

For the avoidance of doubt, and without limiting the foregoing, the term “Collateral” shall, for all purposes of this Agreement, be deemed to include any Collateral Obligation settled directly with the Buyer from a third party in a transaction intermediated, arranged and underwritten by the Seller or any Collateral Obligation acquired by the Buyer in a transaction in which the Seller passes its equitable title to the Buyer as designee of the Seller under the instruments of conveyance relating to the applicable Collateral Obligation.

(b) From and after each Purchase Date, the Collateral listed on the Collateral Obligation List shall be deemed to be Collateral hereunder.

(c) On any Purchase Date with respect to the Collateral to be acquired by the Buyer on that date, the Seller shall be deemed to, and hereby does, reaffirm and certify to the Buyer, the Collateral Agent, on behalf of the Secured Parties, the Loan Agent and the Trustee, as of such Purchase Date, that each of the representations and warranties in Section 4.02 is true and correct as of such Purchase Date.

(d) Except as specifically provided in this Agreement, the sale and purchase of Collateral under this Agreement shall be without recourse to the Seller, it being understood that the Seller shall be liable to the Buyer for all representations, warranties, covenants and indemnities made by the Seller pursuant to the terms of this Agreement, all of which obligations are limited so as not to constitute recourse to the Seller for the credit risk of the Obligors.

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(e) In connection with each Purchase of Collateral as contemplated by this Agreement, the Buyer hereby directs the Seller to, and the Seller agrees that it will deliver in accordance with the Indenture, or cause to be delivered in accordance with the Indenture (on behalf of the Buyer), to the Custodian, as agent and custodian for the Collateral Agent, each Collateral Obligation being transferred to the Buyer on such Purchase Date in accordance with the applicable provisions of the Indenture. Each item of Collateral shall be delivered to the Custodian in accordance with the definition of “Deliver” under the Indenture.

The Seller represents and warrants that each Collateral Obligation purchased prior to the date hereof has been delivered in accordance with the requirements of Section 2.01 of the Amended and Restated Loan Sale and Contribution Agreement, dated as of October 16, 2014, between the Seller and FS Senior Funding LLC.

The Seller shall record and file (or cause to be recorded or filed) on or before the related Purchase Date all financing statements, amendments and terminations statements, as required, and the Seller agrees to record and file (or cause to be recorded or filed) after the related Purchase Date all appropriate financing statements, continuation statements, and other amendments, meeting the requirements of applicable law in such manner and in such jurisdictions as are necessary to perfect and protect the interests of the Collateral Agent and the Secured Parties in the Collateral under the applicable Uniform Commercial Code against all creditors of and purchasers from the Seller. The Seller promptly shall deliver (or cause to be delivered) file-stamped copies of such financing statements, continuation statements, and amendments to the Collateral Agent, the Trustee and the Loan Agent. The Seller shall also take such action requested by the Buyer, the Trustee or the Loan Agent, from time to time hereafter, that may be necessary or appropriate to ensure that the Buyer has an enforceable ownership interest and its assigns under the Indenture have an enforceable and perfected security interest in the Collateral Purchased by the Buyer as contemplated by this Agreement.

(f) In connection with the Purchase by the Buyer of the Collateral as contemplated by this Agreement, the Seller further agrees that it will, at its own expense, indicate clearly and unambiguously in its computer files and its financial statements, on or prior to each Purchase Date, that such Collateral has been Purchased by the Buyer in accordance with this Agreement.

(g) The Seller further agrees to deliver to the Buyer on or before each Purchase Date a computer file containing a true, complete and correct Collateral Obligation List (which shall contain the related Principal Balance, outstanding principal balance, loan number and Obligor name for each Collateral Obligation) as of the related Purchase Date. Such file or list shall be marked as Schedule I to this Agreement, shall be delivered to the Buyer as confidential and proprietary, and is hereby incorporated into and made a part of this Agreement as such Schedule I may be supplemented and amended from time to time.

Section 2.02 Purchase Price.

The purchase price for each item of Collateral sold to the Buyer by the Seller under this Agreement shall be a dollar amount equal to the fair market value thereof as determined from time to time by the Seller and the Buyer and each such transaction shall be on terms no less favorable

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to the Buyer than it would obtain in an comparable arm’s length transaction with a Person that is not an Affiliate (in each case, the “Purchase Price”).

Section 2.03 Payment of Purchase Price.

(b) For any transfer or purchases the Purchase Price for any Collateral sold by the Seller to the Buyer on any Purchase Date shall be paid in a combination of (i) immediately available funds in cash and (ii) if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price, Additional Subordinated Notes Proceeds.

(c) The Purchase Price for any Collateral Purchased by the Buyer to be settled directly with a third party on any Purchase Date shall be paid in immediately available funds, which may comprise, if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price, Additional Subordinated Notes Proceeds.

(d) Notwithstanding any provision herein to the contrary, the Seller may on any Purchase Date elect to designate all or a portion of the Collateral proposed to be transferred to the Buyer on such date as a capital contribution to the Buyer. In such event, the cash portion of the Purchase Price payable with respect to such transfer shall be reduced by that portion of the Purchase Price of the Collateral that was so contributed; provided that, Collateral contributed to the Buyer as capital shall constitute Collateral for all purposes of this Agreement. To the extent that the fair market value of any Collateral purchased or acquired by replacement and substitution by Buyer pursuant to this Agreement exceeds the amount of cash paid or other consideration exchanged therefore, such excess shall be deemed to be a capital contribution from the Seller to the Buyer.

(e) The Seller, in connection with each Purchase hereunder relating to any Collateral, shall be deemed to have certified, and hereby does certify, with respect to the Collateral to be Purchased by the Buyer on such day, that its representations and warranties contained in Article IV are true and correct in all material respects on and as of such day, with the same effect as though made on and as of such day.

(f) Upon the payment of the Purchase Price for any Purchase, title to the Collateral included in such Purchase shall vest in Buyer, whether or not the conditions precedent to such Purchase and the other covenants and agreements contained herein were in fact satisfied; provided that, the Buyer shall not be deemed to have waived any claim it may have under this Agreement for the failure by the Seller in fact to satisfy any such condition precedent, covenant or agreement.

(g) The Seller and the Buyer acknowledge and agree that, solely for administrative convenience, any transfer document or assignment agreement (or, in the case of any underlying promissory note, any chain of endorsement) required to be executed and delivered in connection with the transfer of a Collateral Obligation in accordance with the terms of any Related Contracts may reflect that the Seller is assigning such Collateral Obligation directly to the Buyer. Nothing in such assignment agreements shall be deemed to impair the transfers of the Collateral Obligations by the Seller to the Buyer in accordance with the terms of this Agreement.

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Section 2.04 [Reserved.]

Section 2.05 Characterization.

It is the intention of the parties hereto that the conveyance of all right, title and interest in, to and under the Collateral to the Buyer as provided in this Article II shall constitute an absolute sale, conveyance and transfer conveying good title, free and clear of any Lien (other than Permitted Liens) and that the Collateral shall not be part of the Seller’s bankruptcy estate in the event of an Event of Bankruptcy with respect to the Seller. Furthermore, it is not intended that such conveyance be deemed a pledge of the Collateral Obligations and the other Collateral to the Buyer to secure a debt or other obligation of the Seller. If, however, notwithstanding the intention of the parties, the conveyance provided for in this Article II is determined to be a transfer for security and not to be an absolute sale, then this Agreement shall also be deemed to be, and hereby is, a “security agreement” within the meaning of Article 9 of the UCC and the Seller hereby grants to the Buyer a security interest in all right, title and interest in, to and under the Collateral, now existing and hereafter created, to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the aggregate Purchase Price of the Collateral together with all of the other obligations of the Seller hereunder. The Buyer shall have, in addition to the rights and remedies which it may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law, which rights and remedies shall be cumulative. The Seller authorizes the Buyer and the Collateral Agent on behalf of the Secured Parties to file UCC financing statements naming the Seller as “debtor”, the Buyer as “assignor secured party” and the Collateral Agent as “assignee secured party”, or similar applicable designations, and describing the Collateral, in each jurisdiction that the Buyer deems necessary in order to protect the security interests in the Collateral granted under this Section 2.05.

ARTICLE III

CONDITIONS PRECEDENT

Section 3.01 Conditions Precedent to Closing.

The closing hereunder is subject to the satisfaction of the conditions precedent set forth in Section 3.1 of the Indenture.

Section 3.02 Conditions Precedent to all Purchases.

The obligations of the Buyer to Purchase the Collateral from the Seller on any Purchase Date (including the initial Purchase Date) shall be subject to the satisfaction of the following conditions precedent that:

(h) all representations and warranties of the Seller contained in Sections 4.01 and 4.02 shall be true and correct in all material respects on and as of such date as though made on and as of such date and shall be deemed to have been made on and as of such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date);

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(i) the Seller shall have delivered to the Buyer a duly completed Collateral Obligation List that is true, accurate and complete in all respects as of the related Purchase Date, which list shall be as of such date incorporated into and made a part of this Agreement;

(j) on and as of such Purchase Date, the Seller shall have performed all of the obligations, covenants and agreements required to be performed by it on or prior to such date pursuant to the provisions of this Agreement, including ensuring that all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s ownership interest in the Collateral Obligations have been duly filed;

(k) no event has occurred and is continuing, or would result from such Purchase, that constitutes a Default or an Event of Default (unless such purchase would cure such Default or Event of Default) and the Buyer makes such Purchase in accordance with the applicable provisions hereof and of the Indenture;

(l) except in connection with the transfer of a Substitute Collateral Obligation in accordance with the provisions of this Agreement and of the Indenture, the final day of the Reinvestment Period shall not have occurred;

(m) the Purchase Date shall be a Business Day falling during the Class A-R Commitment Period;

(n) no applicable law shall prohibit or enjoin, 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 any such Purchase by the Buyer in accordance with the provisions hereof; and

(o) all corporate and legal proceedings and all instruments in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Buyer and its assignees, and the Buyer shall have received from the Seller copies of all documents (including records of corporate proceedings, approvals and opinions) relevant to the transactions herein contemplated as the Buyer may reasonably have requested.

Section 3.03 Release of Excluded Amounts.

The parties acknowledge and agree that the Buyer has no interest in the Excluded Amounts. Promptly upon the receipt by or release to the Buyer of any Excluded Amounts, the Buyer hereby irrevocably agrees to deliver and release to the Seller such Excluded Amounts, which release shall be automatic and shall require no further act by the Buyer; provided that, the Buyer shall execute and deliver such instruments of release and assignment or other documents, or otherwise confirm the foregoing release of such Excluded Amounts, as may be reasonably requested by the Seller in writing.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Section 4.01 Representations and Warranties Regarding the Seller.

As of the Closing Date and as of each Purchase Date, the Seller represents and warrants to the Buyer for the benefit of the Buyer and each of its successors and assigns that:

(p) Due Organization. The Seller is a corporation duly incorporated and validly existing under the laws of the State of Delaware, with full power, authority and legal right to own its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is a party.

(q) Due Qualification and Good Standing. The Seller is in good standing in the State of Delaware. The Seller is duly qualified to do business and, to the extent applicable, is in good standing and has obtained all material governmental licenses and approvals as required in Delaware and each other jurisdiction in which the failure to be so qualified, maintain good standing or obtain such license or approval, would reasonably be expected to have a Material Adverse Effect.

(r) Due Authorization; Execution and Delivery; Legal, Value and Binding; Enforceability. The execution and delivery by the Seller of, and the performance of its obligations under this Agreement and the other Transaction Documents to which it is a party and the other instruments, certificates and agreements contemplated hereby and thereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

(s) Non-Contravention. None of the execution and delivery by the Seller of this Agreement or the other Transaction Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect the terms of any Constituent Documents of the Seller, or any amendment thereof; (ii) (A) contravene in any material respect any applicable law, (B) conflict in any material respect, with or result in any breach of, any of the terms and provisions of, or constitute a default under, any indenture, loan, agreement, mortgage, deed of trust or other contractual restriction binding on or affecting it or any of its assets, or (C) contravene in any material respect any order, writ, injunction or decree binding on or affecting it or any of its assets or properties; or (iii) result in a breach or violation of, or constitute a default under, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would reasonably be expected to have a Material Adverse Effect.

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(t) Governmental Authorizations; Governmental Filings. Other than any filings the Seller may be required to file after the Closing Date as a public company subject to the Exchange Act and any registration it may be required to make after the Closing Date as an investment adviser pursuant to the Investment Advisers Act, the Seller has obtained, maintained and kept in full force and effect all Governmental Authorizations which are necessary for it to properly carry out its business, and has made all Governmental Filings necessary for the execution and delivery by it of the Transaction Documents to which it is a party and the performance by the Seller of its obligations under this Agreement and the other Transaction Documents, and no Governmental Authorization or Governmental Filing which has not been obtained or made is required to be obtained or made by it in connection with the execution and delivery by it of any Transaction Document to which it is a party or the performance of its obligations under this Agreement and the other Transaction Documents to which it is a party.

(u) Compliance with Applicable Law. The Seller has duly observed and complied with all applicable laws, including the Securities Act and the Investment Company Act, relating to the conduct of its business and its assets except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

(v) Taxes. The Seller has filed or caused to be filed all tax returns which, to its actual knowledge, are required to be filed and has paid all taxes shown to be due and payable on such returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any applicable Authority (other than any amount of tax due, (i) the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Seller and (ii) the non-payment of which could not reasonably be expected to lead to a Material Adverse Effect.

(w) Place of Business; No Changes. The Seller’s location (within the meaning of Article 9 of the UCC) is the State of Delaware. The Seller has not changed its name, whether by amendment of its certificate of incorporation, by reorganization or otherwise, and has not changed its location within the four months preceding the Closing Date.

(x) [Reserved.]

(y) Sale Treatment. Other than for accounting and tax purposes, the Seller has treated the transfer of Collateral Obligations to the Buyer for all purposes as a sale and/or capital contribution and purchase on all of its relevant books and records.

(z) Security Interest.

(i) As described in Section 2.05, it is the intention of the parties hereto that the conveyance of the Collateral to the Buyer be, and be construed as, an absolute sale without recourse. If, however, notwithstanding the intention of the parties, such conveyance is determined for any reason not to be an absolute sale, this Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in favor of the Buyer in all right, title and interest of the Seller in, to and under the Collateral Obligations, which security

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interest shall be a first priority perfected security interest prior to all other Liens (other than Permitted Liens), and is enforceable as such against creditors of and purchasers from the Seller upon execution and delivery of this Agreement, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity);

(ii) the Collateral Obligations, along with the Related Contracts, constitute “general intangibles,” “instruments,” “accounts,” “investment property,” or “chattel paper,” within the meaning of the applicable UCC;

(iii) the Seller owns and has, and upon the sale and transfer thereof by the Seller to the Buyer the Buyer will have, good and marketable title to such Collateral Obligations free and clear of any Lien (other than Permitted Liens), claim or encumbrance of any Person;

(iv) the Seller has received all consents and approvals required by the terms of the Collateral Obligations to the sale of the Collateral Obligations hereunder to the Buyer (except (A) to the extent that the requirement for such consent is rendered ineffective under Section 9-406 of the UCC and (B) for any customary procedural requirements and agents’ and/or Obligors’ consents expected to be obtained in due course in connection with the transfer of the Collateral Obligations to the Buyer (except, in the case of clause (B), for any such agents’ consents where the Seller or any of its Affiliates is the agent which the Seller has or will obtain));

(v) the Seller 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 Obligations granted to the Buyer under this Agreement to the extent perfection can be achieved by filing a financing statement;

(vi) other than the security interest granted to the Buyer pursuant to this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Collateral Obligations. The Seller has not authorized the filing of and is not aware of any financing statements naming the Seller as debtor that include a description of collateral covering the Collateral Obligations other than any financing statement (A) relating to the security interest granted to the Buyer under this Agreement or (B) that has been terminated or for which a release or partial release has been or will be timely filed. The Seller is not aware of the filing of any judgment or tax Lien filings against the Seller;

(vii) except with respect to any Collateral Obligation for which there is no promissory note, all original executed copies of each promissory note that constitutes or evidences the Collateral Obligations have been delivered in accordance with the Indenture by the Seller at the direction of the Buyer as required under the Indenture; and

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(viii) none of the promissory notes, if any, that constitute or evidence any Collateral Obligations has any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Buyer.

(aa) Value Given. The cash payments received by the Seller and the increase in the Seller’s equity interest in the Buyer as a result of any capital contribution by the Seller to the Buyer in respect of the Purchase Price of the Collateral Obligations sold hereunder constitute reasonably equivalent value in consideration for the transfer to the Buyer of such Collateral Obligations under this Agreement, such transfer was not made for or on account of an antecedent debt owed by the Seller to the Buyer, and such transfer was not and is not voidable or subject to avoidance under any applicable bankruptcy laws.

(bb) Bulk Transfer Laws. The transfer, assignment and conveyance of the Collateral Obligations by the Seller pursuant to this Agreement are not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction.

(cc) Origination and Collection Practices. The origination and collection practices used by the Seller and any of its Affiliates with respect to each Collateral Obligation prior to the Purchase Date with respect thereto have been consistent with the Collateral Manager Standard.

(dd) Lack of Intent to Hinder, Delay or Defraud. Neither the Seller nor any of its Affiliates has sold, or will sell, any interest in any Collateral Obligations with any intent to hinder, delay or defraud any of their respective creditors.

(ee) Nonconsolidation. The Seller conducts its affairs such that (i) the Buyer would not be substantively consolidated in the estate of the Seller and their respective separate existences would not be disregarded in the event of the Seller’s bankruptcy and (ii) in its capacity as board of directors of the Buyer, such that Buyer is in compliance with the provisions of the corporate bylaws of the Buyer; provided that, the Seller does not hereby agree to maintain the solvency of the Buyer.

(ff) No Proceedings. There is no action, suit or proceeding pending against or, to the actual knowledge of an Officer of the Seller after due inquiry, threatened against or adversely affecting (i) the Seller or (ii) the transactions contemplated by this Agreement, before any court, arbitrator or any governmental body, agency or official, in each case, which has had or would reasonably be expected to have a Material Adverse Effect.

(gg) [Reserved.]

(hh) Externally Managed Company. The Seller is an externally managed, non-diversified, closed-end management investment company that has made an election to be treated as a “business development company” within the meaning of the Investment Company Act.

The representations and warranties set forth in this Section 4.01 shall survive the sale, transfer and assignment of the Collateral Obligations to the Buyer. Upon discovery by an Officer of either the Seller or the Buyer of a breach of any of the foregoing representations and warranties, the party

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discovering such breach shall give prompt written notice thereof to the other upon obtaining actual knowledge of such breach.

Section 4.02 Representations and Warranties of the Seller Relating to the Agreement and the Collateral.

The Seller hereby represents and warrants to the Buyer as of the Closing Date and as of each Purchase Date:

(a) Valid Transfer and Security Interest. This Agreement constitutes a valid transfer to the Buyer of all right, title and interest of the Seller in, to and under all of the Collateral, free and clear of any Lien (other than Permitted Liens) of any Person claiming through or under the Seller or its Affiliates; provided that, the existence of any lien imposed by law on the property of an Obligor (as described in the Indenture) of which the Seller has no actual knowledge shall not cause a breach of this Section 4.02(a). If the conveyances contemplated by this Agreement are determined to be a transfer for security, then this Agreement constitutes a grant of a security interest in all of the Collateral to the Buyer, which security interest is a valid and first priority perfected security interest in all Collateral, subject only to Permitted Liens. Neither the Seller nor any Person claiming through or under Seller 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 Seller in such property as a debtor for purposes of the UCC.

(b) Eligibility of Collateral. As of the Closing Date and each Purchase Date, (i) the Collateral Obligation List is an accurate and complete listing of all Collateral as of the related Purchase Date and the information contained therein with respect to the identity of such Collateral and the amounts owing thereunder is true and correct in all material respects as of the related Purchase Date and (ii) as of its Purchase Date, each such Collateral Obligation satisfies or satisfied, as applicable, the definition of Collateral Obligation.

(d) No Fraud. Each Collateral Obligation was originated without any fraud or material misrepresentation by the Seller or, to the Seller’s knowledge, on the part of the Obligor.

(e) Ordinary Course of Business. Any sale of Collateral Obligations pursuant to this Agreement is in the ordinary course of business and financial affairs of the Seller. Each remittance of Sale Proceeds by the Seller to the Buyer, as transferee under this Agreement, will have been (i) in payment of a debt incurred by the Seller in the ordinary course of business or financial affairs of the Seller and the Buyer and (ii) made in the ordinary course of business or financial affairs of the Seller and the Buyer.

Section 4.03 Representations and Warranties Regarding the Buyer.

By its execution of this Agreement, the Buyer represents and warrants to the Seller that:

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(a) Due Organization. The Buyer is an exempted company incorporated with limited liability in the Cayman Islands, with full power and authority to own its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is a party.

(b) Due Qualification and Good Standing. The Buyer is in good standing in the Cayman Islands. The Buyer is duly qualified to do business and, to the extent applicable, is in good standing and has obtained or will obtain all material governmental licenses and approvals in the Cayman Islands and each other jurisdiction in which the failure to be so qualified, maintain good standing or obtain such license or approval, would reasonably be expected to have a Material Adverse Effect.

(c) Due Authorization; Execution and Delivery; Legal, Valid and Binding; Enforceability; Valid Sale. The execution and delivery by the Buyer of, and the performance of its obligations under, this Agreement, the other Transaction Documents to which it is a party and the other instruments, certificates and agreements contemplated hereby or thereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally or general principles of equity, regardless of whether considered in a proceeding in equity or at law. This Agreement shall effect a valid sale, transfer and assignment of or grant of a security interest in the Collateral Obligations from the Seller to the Buyer, enforceable against the Seller and creditors of and purchasers from the Seller, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

(d) Non-Contravention. None of the execution and delivery by the Buyer of this Agreement or the other Transaction Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect or result in any breach of, any of the terms and provisions of, and will not constitute a default under, its Constituent Documents; (ii) conflict with or contravene in any material respect (A) any applicable law, (B) any indenture, agreement or other contractual restriction binding on or affecting it or any of its assets, or (C) contravene in any material respect any order, writ, injunction or decree binding on or affecting it or any of its assets or properties; or (iii) result in a breach or violation of, or constitute a default under, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case which would reasonably be expected to have a Material Adverse Effect.

(e) Governmental Authorizations; Governmental Filings. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize,

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or is required in connection with the execution, delivery and performance of any Transaction Document (to which it is a party) or the consummation of any of the transactions contemplated thereby other than those that have already been duly made or obtained and remain in full force and effect or those recordings and filings in connection with the Liens granted to the Collateral Agent under the Transaction Documents, except for any order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption, that, if not obtained, would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(f) [Reserved.]

(g) Place of Business; No Changes. The Buyer’s location (within the meaning of Article 9 of the UCC) is the District of Columbia. The Buyer has not changed its name, whether by amendment of its certificate of formation, by reorganization or otherwise, and has not changed its location, within the four months preceding the Closing Date.

(h) Sale Treatment. Other than for accounting and tax purposes, the Buyer has treated the transfer of Collateral Obligations from the Seller for all purposes as a sale and purchase on all of its relevant books and records and other applicable documents

(i) Ordinary Course of Business. Any purchase or sale of Collateral Obligations pursuant to this Agreement is in the ordinary course of business and financial affairs of the Buyer. Each remittance of Sale Proceeds by the Seller to the Buyer, as transferee under this Agreement, will have been received by the Buyer in the ordinary course of business or financial affairs of the Buyer.

ARTICLE V

COVENANTS

Section 5.01 Affirmative Covenants of the Seller.

From the date hereof until the Payment in Full Date:

(f) Compliance with Laws. The Seller will comply in all material respects with all applicable requirements of law with respect to the Collateral Obligations.

(g) Preservation of Corporate Existence. The Seller will preserve and maintain its corporate existence, material rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or would reasonably be expected to have, a Material Adverse Effect.

(h) Performance and Compliance with Collateral. The Seller will, at its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under all agreements related to such Collateral.

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(i) Protection of Interest in Collateral. With respect to the Collateral Purchased by the Buyer, the Seller will (i) sell such Collateral pursuant to and in accordance with the terms of this Agreement; (ii) at the Seller’s expense take all action necessary to perfect, protect and more fully evidence the Buyer’s or its assignee’s ownership of or security interest in such Collateral free and clear of any Lien (other than the Lien created hereunder and Permitted Liens), including (a) filing and maintaining (at the Seller’s expense), effective financing statements naming the Seller, as debtor, the Buyer, as secured party, and the Collateral Agent, as assignee, in all necessary or appropriate filing offices, and filing continuation statements, amendments or assignments with respect thereto in such filing offices and (b) executing or causing to be executed such other instruments or notices as may be necessary or appropriate; and (iii) take all additional action that the Buyer and the Collateral Agent, the Trustee or the Loan Agent may reasonably request to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in the Collateral and of the Collateral Agent under the Indenture.

(j) Delivery of Collections. The Seller will cause all payments relating to all Collateral to be remitted directly to the Collection Account. In the event any payments relating to any Collateral are remitted directly to the Seller or any Affiliate of the Seller, the Seller will remit (or will cause all such payments to be remitted) directly to the Collection Account within two Business Days following receipt thereof, and, at all times prior to such remittance, the Seller will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the Buyer (and its assignees).

(k) Separate Identity. The Seller shall take or refrain from taking, as applicable, each of the activities specified or assumed in the true sale and non-consolidation opinions of Dechert LLP delivered on May 28, 2015, upon which the conclusions expressed therein are based.

(l) Cooperation with Requests for Information or Documents. The Seller will cooperate fully with all reasonable requests of the Buyer regarding the provision of any information or documents in the possession of or reasonably obtainable by the Seller without undue burden or expense which are necessary or desirable, including the provision of such information or documents in electronic or machine-readable format, to allow each of the Buyer and its assignees to carry out their responsibilities under the Transaction Documents.

Section 5.02 Negative Covenants of the Seller.

From the date hereof until the Payment in Full Date:

(i) Security Interests. Except for the transfers hereunder, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) on any Collateral Obligation, whether now existing or hereafter transferred hereunder, or any interest therein. The Seller will promptly notify the buyer of the existence of any Lien on any Collateral Obligation and the Seller shall defend the right, title and interest of the Buyer and its assignees in, to and under the Collateral Obligations, against all claims of third parties; provided that, nothing in this Section 5.02(a) shall prevent or be deemed to prohibit the Liens created under the Indenture; provided further that, the existence of any lien imposed by

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law on the property of an Obligor (as described in the Indenture) of which the Seller has no actual knowledge shall not cause a breach of this Section 5.02(a).

(j) Change of Name or Location of Loan Files. The Seller shall not change its name, move the location of its principal place of business and chief executive office, or change the jurisdiction of its incorporation, unless the Seller gives 30 days’ prior written notice thereof to the Buyer, the Collateral Agent, the Loan Agent and the Trustee and takes all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Buyer and the Collateral Agent, for the benefit of the Secured Parties, in the Collateral.

(k) Accounting of Purchases. Other than for tax and accounting purposes, the Seller will not account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other than as a sale of the Collateral by the Seller to the Buyer; provided that, for federal income tax reporting purposes, the Buyer will be treated as a “disregarded entity” and the transfer of Collateral by the Seller to the Buyer hereunder will not be recognized.

(l) Change in Payment Instructions to Obligor. The Seller shall not make any change in its instructions to Obligors regarding payments to be made to the Collection Account, unless the Collateral Agent, the Trustee and the Loan Agent shall have each given its prior written consent to such change.

ARTICLE VI

OPTION TO REPURCHASE AND SUBSTITUTE COLLATERAL OBLIGATIONS

Section 6.01 Substitution of Collateral Obligations.

On any day prior to the occurrence of an Event of Default (and thereafter with the prior consent of the Collateral Agent) and so long as the Buyer is permitted to do so pursuant to Section 12.5 of the Indenture, the Seller may, subject to the conditions set forth in this Section 6.01, replace any Credit Risk Obligation or Defaulted Obligation with one or more other Collateral Obligations; provided that, no such replacement shall occur unless each of the following conditions is satisfied as of the date of such replacement and substitution:

(m) the Seller has notified the Buyer, the Collateral Manager and the Collateral Agent in writing identifying the Collateral Obligation to be replaced (a “Replaced Collateral Obligation”) and the Collateral Obligation(s) to be substituted therefore (each, a “Substitute Collateral Obligation”);

(n) each Substitute Collateral Obligation is a Collateral Obligation meeting the requirements set forth in the definition of Collateral Obligation on the date of substitution;

(o) the aggregate outstanding principal balance of such Substitute Collateral Obligation(s) shall be equal to or greater than the outstanding principal balance of such Replaced Collateral Obligation(s);

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(p) the substitution of any Substitute Collateral Obligation will not cause a Default or an Event of Default to occur;

(q) the Repurchase and Substitution Limits applicable to any such substitution are satisfied;

(r) after giving effect to any such substitution, each Coverage Test shall be satisfied;

(s) after giving effect to any such substitution, each Collateral Quality Test is maintained or improved;

(t) after giving effect to any such substitution, the Eligibility Criteria shall be satisfied;

(u) the Seller shall deliver to the Buyer on the date of such substitution a revised Schedule I that shall include such Substitute Collateral Obligation(s) and shall have deleted such Replaced Collateral Obligation(s); and

(v) the Seller shall deliver to the Buyer, the Collateral Agent, the Loan Agent and the Trustee on the date of such substitution a certificate of an Officer stating that the foregoing conditions have been or will be met upon such replacement and substitution and an assignment substantially in the form of Exhibit A hereto with respect to such Substitute Collateral Obligation(s).

Section 6.02 Seller’s Optional Right to Repurchase Collateral Obligations.

(a) In addition to its right of substitution hereunder, on any day prior to the occurrence of an Event of Default (and thereafter with the prior consent of the Collateral Agent) and so long as the Buyer is permitted to do so pursuant to Section 12.5 of the Indenture, the Seller may, subject to the conditions set forth in this Section 6.02, repurchase any Credit Risk Obligation or Defaulted Obligation at the Repurchase Price; provided that, no such repurchase shall occur unless each of the following conditions is satisfied as of the date thereof:

(i) the Repurchase and Substitution Limits applicable to any such repurchase are satisfied; and

(ii) the Seller shall deposit in the Collection Account the Repurchase Price with respect to such Credit Risk Obligation or Defaulted Obligation as of the date of such repurchase.

(b) Promptly upon request of the Seller, the Buyer (or the Collateral Manager on its behalf) shall determine the Repurchase Price and shall notify the Seller of each thereof and of the Repurchase Price with respect thereto should the Seller elect to exercise its repurchase option. No later than 10 Business Days after receipt of such information, the Seller may, at its option, by written notice to the Buyer, the Collateral Manager, the Trustee, the Loan Agent and the Collateral Agent, elect to exercise its right to repurchase such Credit Risk Obligation or Defaulted Obligation and, on such date or within five Business Days thereafter, repurchase such Credit Risk Obligation or Defaulted Obligation. Failure by the Seller to exercise such option to repurchase any Credit Risk Obligation or Defaulted Obligation at any time shall not affect the ability of the Seller to exercise

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such right at a later date with respect to such Credit Risk Obligation or Defaulted Obligation provided the Repurchase Price is redetermined at such later time.

(c) Contemporaneously with the receipt of the Repurchase Price, the Buyer shall sell, transfer, assign, set over and otherwise convey to the Seller, without recourse, all the right, title and interest of the Buyer in, to and under any Credit Risk Obligation or Defaulted Obligation repurchased by the Seller pursuant to Section 6.02(a), and the Buyer shall cause the Collateral Agent to release the Lien of the Indenture thereon.

ARTICLE VII

INDEMNIFICATION BY THE ORIGINATOR

Section 7.01 Indemnification.

The Seller agrees to indemnify, defend and hold harmless the Buyer, its officers, directors, employees and agents (any one of which is an “Indemnified Party”) from and against any and all claims, losses, penalties, fines, forfeitures, judgments (provided that any indemnification for damages is limited to actual damages, not consequential, special or punitive damages), reasonable legal fees and related costs and any other reasonable costs, fees and expenses that such Person may sustain as a result of the Seller’s fraud or the failure of the Seller to perform its duties in compliance in all material respects with the terms of this Agreement, except to the extent arising from gross negligence, willful misconduct or fraud by the Person claiming indemnification; provided that, the Seller shall not be liable for any consequential (including loss of profit), indirect, special or punitive damages hereunder. Any Person seeking indemnification hereunder shall promptly notify the Seller if such Person receives a complaint, claim, compulsory process or other notice of any loss, claim, damage or liability giving rise to a claim of indemnification hereunder, but failure to provide such notice shall not relieve the Seller of its indemnification obligations hereunder unless and to the extent the Seller is deprived of material substantive or procedural rights or defenses as a result thereof. The Seller shall assume (with the consent of the Indemnified Party, such consent not to be unreasonably withheld) the defense and any settlement of any such claim and pay all expenses in connection therewith, including reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against the Indemnified Party in respect of such claim. The parties agree that the provisions of this Section 7.01 shall not be interpreted to provide recourse to the Seller against loss by reason of the bankruptcy, insolvency or lack of creditworthiness of an Obligor with respect to a Collateral Obligation. The Seller shall have no liability for making indemnification hereunder to the extent any such indemnification constitutes recourse for uncollectible or uncollected Collateral Obligations.

Section 7.02 Liabilities to Obligors.

Except with respect to the funding commitment assumed by the Buyer with respect to any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation, no obligation or liability to any Obligor under any of the Collateral Obligations is intended to be assumed by the Buyer, the Collateral Agent or any of the other the Secured Parties under or as a result of this Agreement and the transactions contemplated hereby.

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Section 7.03 Limitation on Liability

The Seller shall be liable under this Agreement (i) only to the extent of the obligations specifically undertaken by the Seller under this Agreement and (ii) pursuant to the terms of Section 7.01 above. The Seller and any member, manager, director, officer, employee or agent of the Seller may rely in good faith on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder. Subject to Section 7.01, the Seller shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under this Agreement (including its obligations under Section 7.01) or the other Transaction Documents and that in its opinion may involve it in any expense or liability.

Section 7.04 Operation of Indemnities.

If the Seller has made any indemnity payments to an Indemnified Party pursuant to this Article VII and such Indemnified Party thereafter collects any such amounts from others, such Indemnified Party will repay such amounts collected to the Seller.

ARTICLE VIII

TERM AND TERMINATION

Section 8.01 Termination.

This Agreement shall commence as of the date of execution and delivery hereof and shall continue in full force and effect until the earlier of (i) the Payment in Full Date and (ii) with the prior written consent of the Collateral Agent, the date specified by either party upon 30 days’ prior written notice to the other party as the termination date; provided that, the termination of this Agreement pursuant to this Section 8.01 shall not discharge any Person from obligations incurred prior to any such termination of this Agreement.

ARTICLE IX

MISCELLANEOUS

Section 9.01 Amendments and Waivers.

Except as provided in this Section 9.01, no amendment, waiver or other modification of any provision of this Agreement shall be effective unless it is (a) signed by the Buyer and Seller, after providing notice of such amendment, waiver or other modification to the Trustee, the Loan Agent, the Collateral Agent and the Rating Agencies, (b) consented to in writing by a Majority of the Controlling Class and (c) not objected to in writing by a Majority of the Subordinated Notes; provided that no such consent of the Controlling Class will be required, and no such objection right of the Subordinated Notes shall exist, in connection with any amendment to this Agreement (i) to incorporate by reference and/or amend a Collateral Obligation List on the related Purchase Date, (ii) for which the sole purpose of which is to (x) correct inconsistencies, typographical or other errors, defects or ambiguities or (y) conform this Agreement to the Final Offering Circular or the Indenture (as it may be amended from time to time), (iii) to comply with changes in the Code, (iv)

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to enable the Buyer to rely upon any exemption from registration under the Securities Act or the 1940 Act or (v) to enable the Buyer to comply with any applicable securities law (including the regulations implementing such laws). The Buyer shall provide the Holders with notice of any amendment of this Agreement; provided that, the Buyer and the Seller shall provide the Holders of the Controlling Class of Obligations and the Holders of Subordinated Notes with notice of any amendment of this Agreement that does not require the consent of such Holders at least 15 Business Days prior to the proposed execution date thereof; provided, further, that if the Holders of at least 33-1/3% of the Aggregate Outstanding Amount of either the Controlling Class of Obligations or the Subordinated Notes object to such amendment after receiving such notice, then the consent of a Majority of such objecting Class or Classes must be obtained to effect such amendment.

Section 9.02 Notices, Etc.

All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing and mailed, e-mailed, transmitted or delivered, as to each party hereto, at its address set forth under its name on the signature pages hereof or at such other address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall be effective, upon receipt, or in the case of (a) notice by mail, three Business Days after being deposited in the United States mail, first class postage prepaid and (b) notice by e-mail or by facsimile mail, when electronic confirmation or verbal communication of receipt is obtained.

Section 9.03 Binding Effect; Benefit of Agreement.

This Agreement shall inure to the benefit of, and the obligations hereunder shall be binding upon, the parties hereto and their respective successors and permitted assigns. The Seller agrees that the Collateral Agent, as agent for the Secured Parties under the Indenture, shall be a third party beneficiary hereof. Any permitted assigns of the Buyer shall be third-party beneficiaries of this Agreement.

Section 9.04 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE SERVICE OF PROCESS.

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON–EXCLUSIVE JURISDICTION OF ANY COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.

Each of the Buyer and the Seller agrees that service of process may be effected by mailing a copy thereof by registered or certified mail, postage prepaid, to the Buyer or the Seller, as applicable, at its address specified in the signature pages to this Agreement or at such other address as the Collateral Agent, the Loan Agent and the Trustee shall have been notified in accordance with

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the Indenture. Nothing in this Section 9.04 shall affect the right of the Collateral Agent, the Loan Agent or the Trustee to serve legal process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Buyer in any other jurisdiction.

Section 9.05 WAIVER OF JURY TRIAL.

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

Section 9.06 Certain Taxes. The Seller shall pay on demand any and all stamp, sales, excise and other taxes and fees payable or determined to be payable to any applicable Authority in connection with the execution, delivery, filing and recording of this Agreement and the other documents to be delivered hereunder.

Section 9.07 Non-Petition.

(a) The Seller hereby agrees not to institute against, or join, cooperate with or encourage any other Person in instituting against the Buyer any bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under federal or state bankruptcy or similar laws until at least one year and one day, or if longer, the applicable preference period then in effect plus one day, after the Payment in Full Date; provided that, nothing in this Section 9.07 shall preclude the Seller (i) from taking any action prior to the expiration of the aforementioned one year and one day period, or if longer the applicable preference period then in effect plus one day, in (a) any case or proceeding voluntarily filed or commenced by the Buyer or (b) any involuntary insolvency proceeding filed or commenced against the Buyer by a Person other than the Seller or its Affiliates, or (ii) from commencing against the Buyer or any properties of the Buyer any legal action which is not a bankruptcy, reorganization, receivership, arrangement, insolvency, moratorium or liquidation proceeding or other proceeding under federal or state bankruptcy or similar laws.

(b) The provisions of this Section 9.07 shall survive the termination of this Agreement.

Section 9.08 Recourse Against Certain Parties.

(a) No recourse under or with respect to any obligation, covenant or agreement (including the payment of any fees or any other obligations) of the Seller as contained in this Agreement, any other Transaction Document or any other agreement, instrument or document entered into by it pursuant to or in connection with this Agreement or any other Transaction Document shall be had against any stockholder, incorporator, authorized representative, officer, employee or director of the Seller by the enforcement of any assessment or by any legal or equitable

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proceeding, by virtue of any statute or otherwise it being expressly agreed and understood that the agreements of the Seller contained in this Agreement, any other Transaction Document and all of the other agreements, instruments and documents entered into by it pursuant to or in connection with this Agreement or any other Transaction Document are, in each case, solely the corporate obligations of the Seller, and that no personal liability whatsoever shall attach to or be incurred by any stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them, under or by reason of any of the obligations, covenants or agreements of the Seller contained in this Agreement, any other Transaction Document or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each stockholder, incorporator, authorized representative, officer, employee or director of the Seller, or any of them, for breaches by the Seller of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement. The provisions of this Section 9.08(a) shall survive the termination of this Agreement.

(b) Notwithstanding any other provision of this Agreement, the obligations of the Buyer under this Agreement and any other Transaction Document are limited recourse obligations of the Buyer payable solely from the Collateral and, following realization of the Collateral, and application of the proceeds thereof in accordance with the Priority of Distributions and all obligations of and any claims by the Seller against the Buyer hereunder after any such realization and application shall be extinguished and shall not thereafter revive. No recourse under or with respect to any obligation, covenant or agreement (including the payment of any fees or any other obligations) of the Buyer as contained in this Agreement, any other Transaction Document or any other agreement, instrument or document entered into by it pursuant to or in connection with this Agreement or any other Transaction Document shall be had against any member, manager, authorized representative, officer, employee or director of the Buyer 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 the Buyer contained in this Agreement, any other Transaction Document and all of the other agreements, instruments and documents entered into by it pursuant to or in connection with this Agreement and any other Transaction Document are, in each case, solely the limited liability company obligations of the Buyer, and that no personal liability whatsoever shall attach to or be incurred by any authorized representative, member, manager, officer, employee or director of the Buyer or any of them, under or by reason of any of the obligations, covenants or agreements of the Buyer contained in this Agreement, any other Transaction Document or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each authorized representative, member, manager, officer, employee or director of the Buyer, or any of them, for breaches by the Buyer of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement. The provisions of this Section 9.08(b) shall survive the termination of this Agreement.

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Section 9.09 Protection of Right, Title and Interest in, to and under the Assets; Further Action Evidencing Purchases.

(a) The Seller shall cause all financing statements and continuation statements and any other necessary documents perfecting the Buyer’s security and interest in the Assets to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the perfection and priority of the security interest of the Buyer in all property comprising the Assets. The Seller shall deliver to the Buyer the file–stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Seller shall cooperate fully with the Buyer in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 9.09(a).

(b) The Seller agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that the Buyer or the Collateral Agent, on behalf of the Secured Parties, may reasonably request in order to perfect, protect or more fully evidence the Purchases hereunder and the security and/or interest granted in the Assets.

(c) If the Seller fails to perform any of its obligations hereunder, the Buyer may (but shall not be required to) perform, or cause performance of, such obligation; and the Buyer’s or the Collateral Agent’s costs and expenses incurred in connection therewith shall be payable by the Seller. The Seller irrevocably authorizes the Buyer at any time (so long as it has filed to perform its obligations hereunder) at the Buyer’s sole discretion and appoints the Collateral Agent as its attorney–in–fact to act on behalf of the Seller (i) to execute on behalf of the Seller and to file financing statements on behalf of the Seller, as debtor, necessary or desirable in the Buyer’s sole discretion to perfect and to maintain the perfection and priority of the security interest of the Buyer (and its assignees) in the Assets and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Assets as a financing statement in such offices as the Buyer in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the security interests of the Buyer (and its assignees) in the Assets. This appointment is coupled with an interest and is irrevocable.

Section 9.10 Execution in Counterparts; Severability; Integration.

This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts (including by facsimile), 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. In case 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, together with the Indenture and the other Transaction Documents, to the extent that a party is a signatory thereto, 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

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entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

Section 9.11 Heading 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 9.12 Assignment.

Notwithstanding anything to the contrary contained herein, this Agreement may not be assigned by the Buyer or the Seller except as permitted by this Section 9.12. Simultaneously with the execution and delivery of this Agreement, the Buyer shall collaterally assign all of its right, title and interest herein to the Collateral Agent for the benefit of the Secured Parties, to which assignment the Seller hereby expressly consents. Upon such assignment, the Seller agrees to perform its obligations hereunder for the benefit of the Collateral Agent for the benefit of the Secured Parties and the Collateral Agent, in such capacity, shall be a third party beneficiary hereof. The Collateral Agent on behalf of the Secured Parties under the Indenture upon such assignment may enforce the provisions of this Agreement, exercise the rights of the Buyer and enforce the obligations of the Seller hereunder without joinder of the Buyer.

Section 9.13 No Waiver; Cumulative Remedies.

No failure to exercise and no delay in exercising, on the part of the Buyer or the Seller, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given.

[Remainder of Page Intentionally Left Blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.

FIFTH STREET SENIOR FLOATING RATE CORP.,
as the Seller

By:
    Name:
    Title:

EXECUTED as a DEED for and on behalf of:

FS SENIOR FUNDING LTD.,
as the Buyer

By:
    Name:
    Title:

Exhibit A

Form of Assignment

[Date]

In accordance with the Master Transfer Agreement (together with all amendments and modifications from time to time thereto, the “Agreement”), dated as of May 28, 2015, made by and between the undersigned, Fifth Street Senior Floating Rate Corp., as the Seller (together with its successors and permitted assigns, the “Seller”), and FS Senior Funding Ltd., as the Buyer (together with its successors and permitted assigns, the “Buyer”), as assignee thereunder, the undersigned does hereby sell, transfer, convey and assign, set over and otherwise convey to the Buyer, all of the Seller’s right, title and interest in, to and under the following (including all obligations of the lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the undersigned to the Buyer hereunder which obligations the Buyer hereby assumes):

(i) the Collateral Obligations listed on Schedule I attached hereto (which Schedule I is hereby incorporated by reference in and shall become part of the Collateral Obligation List referred to as Schedule I in the Agreement), all payments paid in respect thereof, all monies due, to become due or paid in respect thereof accruing on and after the Purchase Date (including all Sale Proceeds and other recoveries thereon, in each case as they arise after the Purchase Date) and any related Assets;

(ii) all Liens with respect to the Collateral Obligations referred to in clause (i) above;

(iii) all Related Contracts with respect to the Collateral Obligations referred to in clause (i) above;

(iv) all collateral security granted under any Related Contracts; and

(v) all income, payments, proceeds and other benefits of any and all of the foregoing, including all accounts, cash and currency, chattel paper, electronic chattel paper, tangible chattel paper, copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property, letter of credit rights, software, supporting obligations, accessions, proceeds and other property consisting of, arising out of, or related to the foregoing, but excluding any Excluded Amount with respect thereto.

Capitalized terms used herein have the meaning given such terms in the Agreement or, if not defined therein, in the Indenture.

This Assignment is made pursuant to and in reliance upon the representations and warranties on the part of the undersigned contained in Article IV and no others.

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

A-1

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed on the date written above.

FIFTH STREET SENIOR FLOATING RATE CORP.

By:
    Name:
    Title:

A-2

Schedule I

Collateral Obligation List

Sch. I-1

EXECUTION

COLLATERAL MANAGEMENT AGREEMENT

dated May 28, 2015

by and between

FS SENIOR FUNDING LTD.,
as Issuer

and

FIFTH STREET SENIOR FLOATING RATE CORP.,
as Collateral Manager

TABLE OF CONTENTS

Page



Section 1.	Definitions	1
Section 2.	General Duties and Authority of the Collateral Manager	5
Section 3.	Purchase and Sale Transactions; Brokerage	10
Section 4.	Additional Activities of the Collateral Manager	12
Section 5.	Conflicts of Interest	15
Section 6.	Records; Confidentiality	15
Section 7.	Obligations of Collateral Manager	16
Section 8.	Compensation	17
Section 9.	Benefit of the Agreement	19
Section 10.	Limits of Collateral Manager Responsibility	19
Section 11.	Limites Duties and Obligations; No Joint Venture	20
Section 12.	Term; Termination	21
Section 13.	Assignments	22
Section 14.	Removal for Cause	24
Section 15.	Obligations of Resigning or Removed Collateral Manager	27
Section 16.	Representations and Warranties	27
Section 17.	Limited Recourse; No Petition	31
Section 18.	Notices	32
Section 19.	Binding Nature of Agreement; Successors and Assigns	33
Section 20.	Entire Agreement; Amendment	34
Section 21.	Governing Law	34
Section 22.	Submission to Jurisdiction	34
Section 23.	Waiver of Jury Trial	34
Section 24.	Conflict with the Indenture	35
Section 25.	Subordination; Assignment of Agreement	35
Section 26.	Indulgences Not Waivers	35
Section 27.	Costs and Expenses	35
Section 28.	Third Party Beneficiary	36
Section 29.	Titles Not to Affect Interpretation	36
Section 30.	Execution to Counterparts	36
Section 31.	Provisions Separable	36

COLLATERAL MANAGEMENT AGREEMENT

THIS COLLATERAL MANAGEMENT AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”), dated as of May 28, 2015, is entered into by and between FS SENIOR FUNDING LTD., an exempted company incorporated with limited liability in the Cayman Islands, as issuer (the “Issuer”), and FIFTH STREET SENIOR FLOATING RATE CORP., a Delaware corporation, as collateral manager (together with its successors and permitted assigns, the “Collateral Manager”).

WITNESSETH:

WHEREAS, the Notes will be issued pursuant to an indenture to be dated as of the date hereof (the “Indenture”), between the Issuer, FS Senior Funding CLO LLC, as co-issuer (the “Co-Issuer”) and Wells Fargo Bank, National Association, as trustee (the “Trustee”);

WHEREAS, the Issuer intends to pledge all Collateral Obligations and the other Assets, all as set forth in the Indenture, to the Trustee as security for the Issuer’s obligations under the Indenture;

WHEREAS, the Issuer desires to appoint Fifth Street Senior Floating Rate Corp. as the Collateral Manager to provide the services described herein and Fifth Street Senior Floating Rate Corp. desires to accept such appointment;

WHEREAS, the Indenture authorizes the Issuer to enter into this Agreement, pursuant to which the Collateral Manager agrees to perform, on behalf of the Issuer, certain investment management duties with respect to the acquisition, administration and disposition of Assets in the manner and on the terms set forth herein and to perform such additional duties as are consistent with the terms of this Agreement and the Indenture as the Issuer may from time to time reasonably request; and

WHEREAS, the Collateral Manager has the capacity to provide the services required hereby and is prepared to perform such services upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements herein set forth and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.Definitions.

(a) As used in this Agreement:

“1940 Act” shall mean the Investment Company Act of 1940, as amended.

“Advisers Act” shall mean the U.S. Investment Advisers Act of 1940, as amended.

“Aggregate Collateral Management Fees” shall have the meaning set forth in Section 8(a).

“Agreement” shall have the meaning set forth in the preamble.

“Approved Replacement” shall have the meaning set forth in Section 14(a)(vi).

“Authority” shall mean any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, administrative tribunal, central bank, public office, court, arbitration or mediation panel, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of government, including the SEC, the stock exchanges, any federal, state, territorial, county, municipal or other government or governmental agency, arbitrator, board, body, branch, bureau, commission, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign.

“Cause” shall have the meaning set forth in Section 14(a).

“Client” shall mean, with respect to any specified Person, any Person or account for which the specified Person provides investment management services or investment advice.

“Collateral Management Fee” shall have the meaning set forth in Section 8(a).

“Collateral Management Fee Shortfall Amount” shall have the meaning set forth in Section 8(a).

“Collateral Manager” shall have the meaning set forth in the preamble.

“Collateral Manager Breaches” shall have the meaning set forth in Section 10(a).

“Collateral Manager Offering Circular Information” shall mean the information concerning the Collateral Manager in the Final Offering Circular set forth under the headings “Risk Factors—Relating to the Collateral Manager”, “Risk Factors—Relating to Certain Conflicts of Interest—Certain conflicts of interest relating to the Collateral Manager and its Affiliates”, and “The Collateral Manager”.

“Collateral Manager Standard” shall mean the standard of care set forth in Section 2(a).

“Cumulative Deferred Management Fee” shall have the meaning set forth in Section 8(a).

“Current Deferred Management Fee” shall have the meaning set forth in Section 8(a).

“Expenses” shall have the meaning set forth in Section 10(b).

“Fifth Preliminary Offering Circular” shall mean shall mean the Fifth Preliminary Offering Circular, dated May 4, 2015, with respect to the Offered Securities.

“Fifth Street Entities” shall have the meaning set forth in Section 14(a)(iv).

“Final Offering Circular” shall mean the Final Offering Circular, dated as of May 26, 2015, with respect to the Offered Securities and any information in any amendment or supplement to the Final Offering Circular.

“Fourth Preliminary Offering Circular” shall mean shall mean the Fourth Preliminary Offering Circular, dated May 1, 2015, with respect to the Offered Securities.

“Governmental Authorizations” shall mean all franchises, permits, licenses, approvals, consents and other authorizations of all Authorities.

“Governmental Filings” shall mean all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such filings with all Authorities.

“Indemnified Party” shall have the meaning set forth in Section 10(b).

“Indenture” shall have the meaning set forth in the recitals hereto.

“Independent Investment Professional” shall have the meaning set forth in Section 5(a).

“Instrument of Acceptance” shall have the meaning set forth in Section 12(c).

“Internal Policies” shall have the meaning set forth in Section 3(c).

“Issuer” shall have the meaning set forth in the preamble.

“Key Person” shall have the meaning set forth in Section 14(a)(vi).

“Losses” shall have the meaning set forth in Section 10(b).

“Material Adverse Effect” shall mean, with respect to any event or circumstance, a material adverse effect on (a) the business, financial condition (other than the performance of the Assets) or operations of the Issuer, taken as a whole, (b) the validity or enforceability of the Indenture, this Agreement or the Issuer’s Amended and Restated Memorandum and Articles of Association or (c) the existence, perfection, priority or enforceability of the Trustee’s lien on the Assets.

“Offering Circular” shall mean, collectively, the Final Offering Circular, the Preliminary Offering Circular and the Second Preliminary Offering Circular, the Third Preliminary Offering Circular, the Fourth Preliminary Offering Circular and the Fifth Preliminary Offering Circular.

“Organizational Instruments” shall mean the memorandum and articles of association or certificate of incorporation and bylaws (or the comparable documents for the applicable jurisdiction), in the case of a corporation, or the partnership agreement, in the case of a partnership, or the certificate of formation and limited liability company agreement (or the comparable documents for the applicable jurisdiction), in the case of a limited liability company.

“Owner” shall mean, with respect to any Person, any direct or indirect shareholder, member, partner or other equity or beneficial owner thereof.

“Preliminary Offering Circular” shall mean the Preliminary Offering Circular, dated March 20, 2015, with respect to the Offered Securities.

“Principal Transaction” shall mean any transaction that requires the consent of the Issuer under Section 206(3) of the Advisers Act.

“Registered Investment Adviser” shall mean a Person duly registered as an investment adviser in accordance with and pursuant to Section 203 of the Advisers Act.

“Related Person” shall mean, with respect to any Person, the owners of the equity interests therein, directors, officers, employees, personnel, managers, agents and professional advisors thereof.

“Responsible Officer” shall mean, with respect to any Person, any duly authorized director, officer or manager of such Person with direct responsibility for the administration of the applicable agreement and also, with respect to a particular matter, any other duly authorized director, officer or manager of such Person to whom such matter is referred because of such director’s, officer’s or manager’s knowledge of and familiarity with the particular subject. Each party may receive and accept a certification of the authority of any other party as conclusive evidence of the authority of any Person to act, and such certification may be considered as in full force and effect until receipt by such other party of written notice to the contrary.

“Second Preliminary Offering Circular” shall mean shall mean the Second Preliminary Offering Circular, dated April 15, 2015, with respect to the Offered Securities.

“Section 28(e)” shall have the meaning set forth in Section 3(b).

“Statement of Cause” shall have the meaning set forth in Section 14(a).

“Termination Notice” shall have the meaning set forth in Section 14(a).

“Third Preliminary Offering Circular” shall mean shall mean the Third Preliminary Offering Circular, dated April 27, 2015, with respect to the Offered Securities.

“Transaction” shall mean any action taken by the Collateral Manager on behalf of the Issuer with respect to the Assets, including, without limitation, (i) selecting the Collateral Obligations and Eligible Investments to be acquired, sold, terminated or otherwise disposed of by the Issuer or any Issuer Subsidiary, (ii) investing and reinvesting the Assets, (iii) amending, waiving and/or taking any other action commensurate with managing the Assets and (iv) instructing the Trustee with respect to any acquisition, disposition or tender of, or Offer with respect to, a Collateral Obligation, Equity Security, Eligible Investment or other assets received in respect thereof in the open market or otherwise by the Issuer.

“Trustee” shall have the meaning set forth in the recitals hereto.

(b) Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned thereto in the Indenture. The following rules apply to the use of defined terms and the interpretation of this Agreement: (i) the singular includes the plural and the plural includes the singular; (ii) “or” is not exclusive (unless preceded by “either”) and “include” and “including” are not limiting; (iii) unless the context otherwise requires, references to agreements shall be deemed to mean and include such agreements as the same may be amended, supplemented, waived and otherwise modified from time to time; (iv) a reference to a law includes any amendment or modification to such law and any rules or regulations issued thereunder or any law enacted in substitution or replacement therefor; (v) a reference to a Person includes its successors and assigns; (vi) a reference to a Section without further reference is to the relevant Section of this Agreement; (vii) the headings of the Sections and subsections are for convenience and shall not affect the meaning of this Agreement; (viii) “writing”, “written” and comparable terms refer to printing, typing, lithography and other means of reproducing words in a visible form (including telefacsimile and electronic mail); (ix) “hereof”, “herein”, “hereunder” and comparable terms refer to the entire instrument in which such terms are used and not to any particular article, section or other subdivision thereof or attachment thereto; and (x) references to any gender include any other gender, masculine, feminine or neuter, as the context requires.

Section 2. General Duties and Authority of the Collateral Manager.

(a) Fifth Street Senior Floating Rate Corp. is hereby appointed as Collateral Manager of the Issuer for the purpose of performing certain investment management functions including, without limitation, supervising and directing the investment and reinvestment of the Collateral Obligations and Eligible Investments and performing certain administrative and advisory functions on behalf of the Issuer in accordance with the applicable provisions of this Agreement and the Indenture and Fifth Street Senior Floating Rate Corp. hereby accepts such appointment. The Collateral Manager will perform its obligations hereunder and under the Indenture with reasonable care and in good faith, (i) in a manner which the Collateral Manager believes to be consistent with the practices and procedures followed by institutional managers of national standing relating to assets of the same nature and character as the Collateral Obligations and (ii) substantially in accordance with its existing practices and procedures with respect to investing in assets of the nature and character of the Assets (the “Collateral Manager Standard”). To the extent not inconsistent with the foregoing, the Collateral Manager will follow its customary standards, policies and procedures in performing its duties under this Agreement and the Indenture.

(b) Subject to Section 2(a), Section 2(c)(i), Section 2(e), Section 5, Section 7 and Section 10, and to the applicable provisions of the Indenture, the Collateral Manager shall, and is hereby authorized to:

(i) select the Collateral Obligations and Eligible Investments to be acquired, sold, terminated or otherwise disposed of by the Issuer or any Issuer Subsidiary;

(ii) invest and reinvest the Assets as provided in the Indenture;

(iii) instruct the Issuer or the Trustee (as applicable) with respect to any acquisition, disposition or tender of, or Offer with respect to, a Collateral Obligation, Equity Security, Eligible Investment, asset held by the Issuer or any Issuer Subsidiary or other assets received in respect thereof in the open market or otherwise by the Issuer; and

(iv) perform all other tasks and take all other actions that any of the Indenture, the Master Transfer Agreement, the Class A-R Note Purchase Agreement or this Agreement specify are to be taken by the Collateral Manager.

The Collateral Manager shall, and is hereby authorized to, perform its obligations hereunder and under the Indenture in a manner which is consistent with the terms hereof and the applicable terms of the Indenture. The Collateral Manager will not be bound to comply with any supplement to the Indenture, however, until it has received a copy of any such supplement from the Issuer or the Trustee and unless the Collateral Manager has consented thereto, as provided in the Indenture.

Notwithstanding anything to the contrary in this Section 2(b), none of the services performed by the Collateral Manager shall result in or be construed as resulting in an obligation to perform any of the following: (i) the Collateral Manager acting repeatedly or continuously as an intermediary in securities for the Issuer; (ii) the Collateral Manager providing investment banking services to the Issuer; or (iii) the Collateral Manager having direct contact with, or actively soliciting or finding, outside investors to invest in the Issuer.

(c) Subject to the provisions concerning its general duties and obligations as set forth in paragraphs (a) and (b) above, and to the terms of the Indenture, the Collateral Manager shall provide, and is hereby authorized to provide, the following services to the Issuer:

(i) The Collateral Manager shall perform the investment-related duties and functions (including, without limitation, the furnishing of Issuer Orders and Responsible Officer’s certificates) as are expressly required hereunder and under the Indenture with regard to acquisitions, sales or other dispositions of Collateral Obligations, Equity Securities, Eligible Investments and other assets permitted to be acquired or sold under, and subject to, the Indenture (including any proceeds received by way of Offers, workouts and restructurings of assets owned by the Issuer) and shall comply with the requirements in the Indenture. The Collateral Manager shall have no obligation to perform any other duties other than as expressly specified herein, in the Indenture as applicable to it, and the Collateral Manager shall be subject to no implicit obligations of any kind. The Issuer hereby irrevocably (except as provided below) appoints the Collateral Manager as its true and lawful agent and attorney-in-fact (with full power of substitution) in its name, place and stead and at its expense, in connection with the performance of its duties provided for in this Agreement, in the Indenture including, without limitation, the following powers: (A) to give or cause to be given any necessary receipts or acquittance for amounts collected or received hereunder or thereunder, (B) to make or cause to be made all necessary transfers of the Collateral Obligations, Equity Securities and Eligible Investments in connection with any acquisition, sale, termination or other disposition made pursuant hereto and the Indenture, (C) to execute (under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf of the Issuer all necessary or appropriate bills of sale, assignments, agreements and other instruments in connection with any such acquisition,

sale, termination or other disposition and (D) to execute (under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf of the Issuer any consents, votes, proxies, waivers, notices, amendments, modifications, agreements, instruments, orders or other documents in connection with or pursuant to this Agreement or the Indenture relating to any Collateral Obligation, Equity Security or Eligible Investment. The Issuer hereby ratifies and confirms all that such attorney-in-fact (or any substitute) shall lawfully do hereunder and pursuant hereto and authorizes such attorney-in-fact to exercise full discretion and act for the Issuer in the same manner and with the same force and effect as the members, managers or officers of the Issuer might or could do in respect of the performance of such services, as well as in respect of all other things the Collateral Manager deems necessary or incidental to the furtherance or conduct of such services, subject in each case to the other terms of this Agreement. The Issuer hereby authorizes such attorney-in-fact, in its sole discretion (but subject to applicable law and the provisions of this Agreement and the Indenture), to take all actions that it considers reasonably necessary and appropriate in respect of the Assets, this Agreement, the Indenture and the other Transaction Documents. Nevertheless, if so requested by the Collateral Manager or by a purchaser of any Collateral Obligation or Eligible Investment, the Issuer shall ratify and confirm any such sale, termination or other disposition by executing and delivering to the Collateral Manager or such purchaser all proper bills of sale, assignments, releases, powers of attorney, proxies, other orders and other instruments as may reasonably be designated in any such request. Except as otherwise set forth and provided for herein, this grant of power of attorney is coupled with an interest, and it shall survive and not be affected by the subsequent dissolution or bankruptcy of the Issuer. Notwithstanding anything herein to the contrary, the appointment herein of the Collateral Manager as the Issuer’s agent and attorney-in-fact shall automatically cease and terminate upon any termination of this Agreement or upon the effective date of the appointment of a successor Collateral Manager following the resignation of the Collateral Manager pursuant to Section 12 or any removal of the Collateral Manager pursuant to Section 14. Each of the Collateral Manager and the Issuer shall take such other actions, and furnish such certificates, opinions and other documents, as may be reasonably requested by the other party hereto in order to effectuate the purposes of this Agreement and to facilitate compliance with applicable laws and regulations and the terms of this Agreement and the Indenture.

(ii) The Collateral Manager shall instruct the Issuer with respect to the acquisition of Collateral Obligations by the Issuer in accordance with the Indenture.

(iii) Pursuant to the terms of this Agreement and subject to any applicable terms of the Indenture, the Collateral Manager shall monitor the Assets on behalf of the Issuer on an ongoing basis and shall provide or cause to be provided to the Issuer all reports, schedules and other data reasonably available to the Collateral Manager that the Issuer is required to prepare and deliver or cause to be prepared and delivered under the Indenture, in such forms and containing such information required thereby, in reasonably sufficient time for such required reports, schedules and data to be reviewed and delivered by or on behalf of the Issuer to the parties entitled thereto under the Indenture. The obligation of the Collateral Manager to furnish such reports, schedules and other data is subject to the Collateral Manager’s timely receipt of necessary information, reports, schedules and other data from the Person responsible for the delivery or preparation thereof (including without limitation, Obligors of the Collateral Obligations, Moody’s and the Trustee) and to any

confidentiality restrictions with respect thereto. The Collateral Manager shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing reasonably believed by it to be genuine and to have been signed or sent by a Person that the Collateral Manager reasonably believes in good faith is duly authorized. The Collateral Manager also may rely upon any statement made to it orally or by telephone and made by a Person the Collateral Manager reasonably believes in good faith is duly authorized, and shall not incur any liability for relying thereon. The Collateral Manager is entitled to rely on any other information furnished to it by third parties that it reasonably believes in good faith to be genuine.

(iv) The Collateral Manager, on behalf of the Issuer, shall be responsible for obtaining, to the extent reasonably practicable and to the extent such information is readily available to it, any information concerning whether a Collateral Obligation is a Discount Obligation or has become a Defaulted Obligation, a Credit Risk Obligation, a Current Pay Obligation or a Credit Improved Obligation.

(v) The Collateral Manager may, subject to and in accordance with the Indenture, as agent of the Issuer and on behalf of the Issuer, direct the Trustee to take any of the following actions with respect to a Collateral Obligation, Equity Security or Eligible Investment, as applicable:

(A) purchase or otherwise acquire such Collateral Obligation or Eligible Investment;

(B) retain such Collateral Obligation, Equity Security or Eligible Investment;

(C) sell or otherwise dispose of such Collateral Obligation, Equity Security or Eligible Investment (including any assets received by way of Offers, workouts and restructurings on assets owned by the Issuer) in the open market or otherwise;

(D) if applicable, tender such Collateral Obligation, Equity Security or Eligible Investment;

(E) if applicable, consent to or refuse to consent to any proposed amendment, modification, restructuring, exchange or waiver;

(F) retain or dispose of any securities or other property (if other than cash) received by the Issuer;

(G) waive any default with respect to any Defaulted Obligation;

(H) vote to accelerate the maturity of any Defaulted Obligation;

(I) participate in a committee or group formed by creditors of an issuer or a borrower under a Collateral Obligation, Equity Security or Eligible Investment;

(J) after or in connection with the payment in full of all amounts owed under the Obligations and the termination without replacement of the Indenture or in connection with any redemption of the Obligations, advise the Issuer as to when, in the view of the Collateral Manager, it would be in the best interest of the Issuer to liquidate the Issuer’s investment portfolio (and, if applicable, after discharge of the Indenture) and render such assistance as may be necessary or required by the Issuer in connection with such liquidation or any actions necessary to effectuate a redemption of the Obligations;

(K) advise and assist the Issuer with respect to the valuation of the Assets, to the extent required or permitted by the Indenture;

(L) provide strategic and financial planning (including advice on utilization of assets), financial statements and other similar reports;

(M) negotiate, modify or amend any indebtedness of the Issuer as authorized by the Indenture in connection with an additional issuance of Obligations or a Refinancing; and

(N) exercise any other rights or remedies with respect to such Collateral Obligation, Equity Security or Eligible Investment as provided in the Underlying Instruments of the Obligor or issuer of such Assets or the other documents governing the terms of such Assets or take any other action consistent with the terms of this Agreement and the Indenture, which the Collateral Manager reasonably and in good faith determines to be in the best interests of the Issuer.

(vi) The Collateral Manager may: (A) upon request of the Issuer, retain accounting, tax, legal counsel and other professional services on behalf of the Issuer as may be needed by the Issuer; and (B) consult on behalf of the Issuer with each Rating Agency at such times as may be reasonably requested in connection with each Rating Agency’s monitoring of the acquisition and disposition of Collateral Obligations and each Rating Agency’s maintenance of their ratings of the Secured Debt.

(vii) In connection with the acquisition of any Collateral Obligation by the Issuer, the Collateral Manager shall prepare, on behalf of the Issuer, the information required to be delivered to the Trustee pursuant to the Indenture.

(viii) Where the Collateral Manager executes on behalf of the Issuer an agreement or instrument pursuant to which any security interest over any assets of the Issuer is created or released, the Collateral Manager shall reasonably promptly give written notice thereof to the Issuer and shall provide the Issuer with such information and/or a copy of documentation in respect thereof as the Issuer may reasonably require.

(d) In performing its duties hereunder and when exercising its discretion and judgment in connection with any transactions involving the Assets, the Collateral Manager shall carry out any reasonable written directions of the Issuer for the purpose of the Issuer’s compliance with its

Organizational Instruments and the Indenture; provided that, such directions are not inconsistent with any provision of this Agreement or the Indenture by which the Collateral Manager is bound or prohibited by applicable law.

(e) In providing services hereunder, the Collateral Manager may, without the consent of any Person, delegate to third parties (including without limitation its affiliates) the duties assigned to the Collateral Manager under this Agreement, and employ third parties (including without limitation its affiliates) to render advice (including investment advice), to provide services to arrange for trade execution and otherwise provide assistance to the Issuer, and to perform any of the Collateral Manager’s duties under this Agreement; provided that, the Collateral Manager shall not (i) delegate investment advice responsibilities including, without limitation, asset selection, credit review and the negotiation and determination of the acquisition price of a Collateral Obligation, to non-affiliates or (ii) be relieved of any of its duties hereunder regardless of the performance of any services by third parties, including affiliates.

Section 3. Purchase and Sale Transactions; Brokerage.

(a) The Collateral Manager, subject to and in accordance with the Indenture, hereby agrees that it shall cause any Transaction to be conducted on terms and conditions negotiated on an arm’s-length basis (except as otherwise expressly required by the Indenture) and in accordance with applicable law. Except as expressly permitted under the Indenture, no Assets (other than any Delayed Drawdown Collateral Obligations or Revolving Collateral Obligations) shall be purchased if such Assets may give rise to any obligation or liability on the Issuer’s part to the Obligor or issuer thereof to take any action or make any payment other than at the Issuer’s option.

(b) To the extent required by applicable law, the Collateral Manager will use all commercially reasonably efforts to obtain best execution (but shall have no obligation to obtain the lowest price available) for all orders placed with respect to any Transaction, in a manner permitted by law and in a manner it believes to be in the best interests of the Issuer. Subject to the preceding sentence, the Collateral Manager may, in the allocation of business, select brokers and/or dealers with whom to effect trades on behalf of the Issuer and may open cash trading accounts with such brokers and dealers; provided that, none of the Assets may be credited to, held in or subject to the lien of the broker or dealer with respect to any such account. In addition, subject to the first sentence of this paragraph, the Collateral Manager may, in the allocation of business, take into consideration research and other brokerage services furnished to the Collateral Manager or its affiliates by brokers and dealers which are not affiliates of the Collateral Manager; provided that, the Collateral Manager in good faith believes that the compensation for such services rendered by such brokers and dealers complies with the requirements of Section 28(e) of the Exchange Act (“Section 28(e)”), or in the case of principal or fixed income transactions for which the “safe harbor” of Section 28(e) is not available, the amount of the spread charged is reasonable in relation to the value of the research and other brokerage services provided. Such services may be used by the Collateral Manager in connection with its other advisory activities or investment operations. The Collateral Manager may aggregate sales and purchase orders placed with respect to the Assets with similar orders being made simultaneously for itself, its Affiliates or other accounts managed by the Collateral Manager or by Affiliates of the Collateral Manager, if in the Collateral Manager’s reasonable judgment such

aggregation shall result in an overall economic benefit to the Issuer, taking into consideration the advantageous selling or purchase price, brokerage commission or other expenses, as well as the availability of such obligations or securities on any other basis. In accounting for such aggregated order price, commissions and other expenses may be apportioned on a weighted average basis. The Issuer acknowledges and agrees that (i) the determination by the Collateral Manager of any benefit to the Issuer will be subjective and will represent the Collateral Manager’s evaluation at the time that the Issuer will be benefited by relatively better purchase or sale prices, lower brokerage commissions, lower transaction costs and expenses and beneficial timing of transactions or any combination of any of these and/or other factors and (ii) the Collateral Manager shall be fully protected with respect to any such determination to the extent the Collateral Manager acts in accordance with the Collateral Manager Standard.

(c) The Collateral Manager may, from time to time, be presented with investment opportunities that fall within the investment objectives of the Issuer, of the Collateral Manager and its Affiliates, of Clients of the Collateral Manager or its Affiliates and of Persons with whom the Collateral Manager has entered into co-investment arrangements. In such circumstances, the Collateral Manager expects to allocate such opportunities among the Collateral Manager, its Affiliates, Clients of the Collateral Manager or its Affiliates and any other Persons with whom the Collateral Manager has entered into any co-investment arrangement, as applicable, in accordance with the allocation policy of the Collateral Manager, as such policy may be amended from time to time, and on a basis that the Collateral Manager determines in good faith is appropriate taking into consideration such factors as any allocation and/or co-investment policy agreed to with any such Persons, as applicable, and the contractual and legal duties owed to such Persons, as applicable, the primary investment mandates of each, the capital available to each, any restrictions on investment applicable thereto, the sourcing of the transaction, the size of the transaction, the amount of potential follow-on investing that may be required for such investment and the other investments held by each, the relation of such opportunity to the investment strategy thereof, reasons of portfolio balance, the remaining investment or reinvestment period thereof and any other consideration deemed relevant by the Collateral Manager in good faith. The Collateral Manager will use reasonable efforts to allocate investment opportunities across the Persons for which such opportunities are appropriate in a manner that is fair and equitable over time and that the Collateral Manager believes, in its reasonable business judgment, to be appropriate and in accordance with (1) its internal conflict of interest and allocation policies (as the same may be amended from time to time, the “Internal Policies”), (2) any allocation and/or co-investment policy or agreement entered into with any such Person, as each may be amended from time to time, and (3) the requirements of applicable law.

(d) The Collateral Manager may effect Client cross Transactions where the Collateral Manager causes a Transaction to be effected between the Issuer and another Client of the Collateral Manager or any of its Affiliates at any time that the Collateral Manager believes such Transaction to be fair to the Issuer and its other Client. The Collateral Manager may direct the Issuer to acquire or dispose of Collateral Obligations in trades between the Issuer and other Clients of the Collateral Manager or its Affiliates in accordance with applicable contractual and regulatory requirements. In such case, the Collateral Manager and such Affiliates may have a potentially conflicting division of loyalties and responsibilities regarding the Issuer and the other parties to such trade. Under

certain circumstances, the Collateral Manager and its Affiliates may determine that it is appropriate to avoid such conflicts by purchasing or selling a Collateral Obligation at a fair value that has been calculated pursuant to the Collateral Manager’s valuation procedures to another Client of the Collateral Manager or such Affiliates.

(e) In addition, in the future and with the prior blanket authorization of the Issuer, which can be revoked at any time thereafter, the Collateral Manager may enter into agency cross transactions where it or any of its Affiliates acts as broker for the Issuer and for the other party to the transaction, to the extent permitted under applicable law.

(f) The Issuer acknowledges and agrees that the Collateral Manager or any of its Affiliates may acquire or sell Assets, for its own account or for the accounts of its Clients, without either requiring or precluding the acquisition or sale of such Assets for the account of the Issuer. Such investments may be the same or different from those made on behalf of the Issuer. The Issuer acknowledges that the Collateral Manager and its Affiliates may enter into, for their own accounts or for the accounts of others, credit default swaps relating to Obligors and issuers with respect to the Collateral Obligations and Eligible Investments included in the Assets.

Section 4. Additional Activities of the Collateral Manager.

Nothing herein shall prevent the Collateral Manager or any of its Affiliates from engaging in other businesses, or from rendering services of any kind to the Issuer, the Trustee, the Placement Agent, any Holder or their respective Affiliates or any other Person or entity regardless of whether such business is in competition with the Issuer or otherwise. Without limiting the generality of the foregoing, partners, members, managers, shareholders, directors, officers, employees and agents of the Collateral Manager, Affiliates of the Collateral Manager, and the Collateral Manager may:

(a) serve as managers or directors (whether supervisory or managing), officers, employees, members, shareholders, partners, agents, nominees or signatories for the Issuer or any Affiliate thereof, or for any Obligor or issuer in respect of any of the Collateral Obligations, Equity Securities or Eligible Investments or any Affiliate thereof, to the extent permitted by their respective Organizational Instruments and Underlying Instruments, as from time to time amended, or by any resolutions duly adopted by the Issuer, its Affiliates or any Obligor or issuer in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities (or any Affiliate thereof) pursuant to their respective Organizational Instruments or otherwise, and neither the Holders of any Class of Obligations nor the Issuer shall have the right to any such fees;

(b) receive fees for services of whatever nature, including, without limitation, origination, closing, structuring and other fees, rendered to the Obligor or issuer in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities or any Affiliate thereof (which fees shall be for the benefit of the Collateral Manager’s own account);

(c) be retained to provide services unrelated to this Agreement to the Issuer or its Affiliates and be paid therefor, on an arm’s-length basis;

(d) be a secured or unsecured creditor of, or hold a debt obligation of or equity interest in, the Issuer or any Affiliate thereof or any Obligor or issuer of any Collateral Obligation, Eligible Investment or Equity Security or any Affiliate thereof;

(e) subject to the applicable provisions of this Agreement and the Indenture, sell any Collateral Obligation or Eligible Investment to, or purchase or acquire any Collateral Obligation or Equity Security from, the Issuer while acting in the capacity of principal or agent;

(f) underwrite, arrange, structure, originate, syndicate, act as a distributor of or make a market in any Collateral Obligation, Equity Security or Eligible Investment;

(g) act as an advisor, including as a restructuring advisor or financial advisor, to Obligors or issuers in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities or any Affiliate thereof, or to other interested parties, such as bondholders, equityholders, “creditors’ committees” and potential purchasers;

(h) serve as a member of any “creditors’ board”, “creditors’ committee” or similar creditor group with respect to any Collateral Obligation, Defaulted Obligation, Eligible Investment or Equity Security; or

(i) act as collateral manager, portfolio manager, investment manager and/or investment adviser or sub-adviser for Persons issuing securities backed by loans and other assets similar to the Assets, collateralized loan obligation vehicles, separately managed accounts, private funds or other pooled investment vehicles and other similar investment vehicles owned in whole or in part by any of the Collateral Manager, any Affiliate thereof, any other Related Person or any non-affiliated third party.

As a result, such individuals and Persons may possess information relating to Obligors and issuers of Collateral Obligations that is (a) not known to or (b) known but restricted as to its use by the individuals at the Collateral Manager responsible for monitoring the Collateral Obligations and performing the other obligations of the Collateral Manager under this Agreement. Each of such ownership and other relationships may result in securities laws restrictions on transactions in such securities by the Issuer and otherwise create conflicts of interest for the Issuer. The Issuer acknowledges and agrees that, in all such instances, the Collateral Manager and its Affiliates may in their discretion make investment recommendations and decisions that may be the same as or different from those made with respect to the Issuer’s investments and they have no duty, in making or managing such investments, to act in a way that is favorable to the Issuer.

The Issuer acknowledges that the Collateral Manager does not expect to maintain information barriers with respect to confidential communications which restrict the Collateral Manager from purchasing securities for itself, its Affiliates or its Clients. The officers, employees or Affiliates of the Collateral Manager may possess information relating to Obligors and issuers of Collateral Obligations that is not known to the individuals at the Collateral Manager responsible for monitoring the Collateral Obligations and performing the other obligations under this Agreement. The Collateral Manager may from time to time come into possession of material non-public

information that limits the ability of the Collateral Manager to effect a transaction for the Issuer, and the Issuer's investments may be constrained as a consequence of the Collateral Manager's inability to use such information for advisory purposes or otherwise to effect transactions that otherwise may have been initiated on behalf of the Issuer.

The Collateral Manager in its discretion may not, or if prohibited by applicable law will not, acquire or sell Collateral Obligations, Equity Securities or Eligible Investments issued by (i) Persons of which the Collateral Manager, any of its Affiliates or any of its officers, directors or employees are directors or officers, (ii) Persons of which the Collateral Manager, or any of its respective Affiliates act as principal or (iii) Persons about which the Collateral Manager or any of its Affiliates have material non-public information which the Collateral Manager deems would prohibit it from advising as to the trading of such obligations or securities in accordance with applicable law.

It is understood that the Collateral Manager and any of its Affiliates may engage in any other business and furnish investment management and advisory services to others, including Persons which may have investment policies similar to those followed by the Collateral Manager with respect to the Assets and which may own obligations or securities of the same class, or which are of the same type, as the Collateral Obligations or the Eligible Investments or other obligations or securities of the Obligors or issuers of the Collateral Obligations or the Eligible Investments. The Collateral Manager will be free, in its sole discretion, to make recommendations to others, or effect transactions on behalf of itself or for others, which may be the same as or different from those effected with respect to the Assets. Nothing in the Indenture and this Agreement shall prevent the Collateral Manager or any of its Affiliates, acting either as principal or agent on behalf of others, from buying or selling, or from recommending to or directing any other account to buy or sell, at any time, obligations or securities of the same kind or class, or obligations or securities of a different kind or class of the same Obligor or issuer, as those directed by the Collateral Manager to be purchased or sold on behalf of the Issuer. It is understood that, to the extent permitted by applicable law, the Collateral Manager, its Owners, their Affiliates or their respective Related Persons or any member of their families or a Person or entity advised by the Collateral Manager may have an interest in a particular transaction or in obligations or securities of the same kind or class, or obligations or securities of a different kind or class of the same Obligor or issuer, as those whose acquisition or sale the Collateral Manager may direct hereunder. If, in light of market conditions and investment objectives, the Collateral Manager determines that it would be advisable to purchase the same Collateral Obligation both for the Issuer, the Collateral Manager, any of its Affiliates, any Client of the Collateral Manager or of its Affiliates and any other Person with whom the Collateral Manager has entered into any co-investment arrangement, as applicable, the Collateral Manager will use reasonable efforts to allocate such investment opportunities across such Persons for which such opportunities that the Collateral Manager believes, in its reasonable business judgment, to be appropriate and in accordance with (i) its Internal Policies, (ii) any allocation and/or co-investment policy or agreement entered into with any such Person, as applicable, as each may be amended from time to time, and (iii) any applicable requirements of the Advisers Act. The Issuer agrees that, in the course of managing the Collateral Obligations held by the Issuer, the Collateral Manager may consider its relationships with its Clients (including Obligors and issuers) and its Affiliates. The

Collateral Manager may decline to make a particular investment for the Issuer in view of such relationships.

The Issuer acknowledges and agrees that the Collateral Manager and its Affiliates may make and/or hold investments on behalf of themselves or on behalf of their respective Clients in an Obligor’s or issuer’s obligations or securities that may be pari passu, senior or junior in ranking to an investment in such Obligor’s or issuer’s obligations or securities made and/or held by the Issuer, or otherwise may have interests different from or adverse to those of the Issuer and may consider such interests in the course of managing the Collateral Obligations held by the Issuer.

Section 5. Conflicts of Interest.

(a) The Issuer shall appoint an Independent third party to act on behalf of the Issuer (such party, the “Independent Investment Professional”) with respect to Principal Transactions and, if referred thereto by the Collateral Manager in its sole discretion, other actual or potential conflicts of interest relating to the Collateral Manager, its Affiliates and any other Related Persons. Decisions of the Independent Investment Professional shall be binding on the Collateral Manager, the Issuer, the Holders of the Obligations and the beneficial owners thereof.

(b) The Independent Investment Professional (i) shall be an Independent Person appointed by the Issuer (or at the request of the Issuer, selected by the Collateral Manager), (ii) when requested to do so by the Collateral Manager, shall be required to assess the potential conflicts and merits of each applicable Principal Transaction and either grant or withhold consent to such Principal Transaction in its sole judgment, and (iii) shall be Independent with respect to the Issuer, the Collateral Manager and their respective Affiliates and not be (A) affiliated with the Issuer (other than as a Holder or beneficial owner of an Obligation or as a passive investor in the Issuer or an Affiliate of the Issuer) or the Collateral Manager or (B) involved in the daily administration of the Issuer or the Collateral Manager.

(c) The Issuer (i) shall be responsible for any fees relating to the services provided by the Independent Investment Professional and shall reimburse the Independent Investment Professional for its out-of-pocket expenses and (ii) may indemnify the Independent Investment Professional to the maximum extent permitted by law, subject to terms and conditions satisfactory to the Collateral Manager.

Section 6. Records; Confidentiality.

The Collateral Manager shall maintain or cause to be maintained appropriate books of account and records relating to its services performed hereunder, and such books of account and records shall be accessible for inspection by representatives of the Issuer, the Trustee, the Holders and the Independent accountants appointed by the Collateral Manager on behalf of the Issuer pursuant to Section 10.9 of the Indenture at any time during normal business hours and upon not less than three Business Days’ prior notice. The Collateral Manager shall keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to non-affiliated third parties (excluding any Holders of the Obligations)

except (a) with the prior written consent of the Issuer, (b) such information as a Rating Agency shall reasonably request in connection with its rating of the Obligations or supplying credit ratings or estimates on any obligation included in the Assets, (c) in connection with establishing trading or investment accounts or otherwise in connection with effecting Transactions on behalf of the Issuer, (d) as required by (i) applicable law, regulation, court order, or a request by a governmental regulatory agency with jurisdiction over the Collateral Manager or any of its Affiliates, (ii) the rules or regulations of any self-regulating organization, body or official having jurisdiction over the Collateral Manager or any of its Affiliates or (iii) the Irish Stock Exchange, (e) to its professional advisors (including, without limitation, legal, tax and accounting advisors) and consultants, (f) such information as shall have been publicly disclosed other than in known violation of this Agreement or the provisions of the Indenture or shall have been obtained by the Collateral Manager on a non-confidential basis, (g) to nationally recognized statistical rating agencies in accordance with Rule 17g-5 under the Exchange Act, (h) such information as is necessary or appropriate to disclose so that the Collateral Manager may perform its duties hereunder, under the Indenture or any other Transaction Document or (i) general performance information which may be used by the Collateral Manager, its Affiliates or Owners in connection with their marketing activities. Notwithstanding the foregoing, it is agreed that the Collateral Manager may disclose (i) that it is serving as collateral manager of the Issuer, (ii) the nature, aggregate principal amount and overall performance of the Issuer’s Assets, (iii) the amount of earnings on the Assets, (iv) such other information about the Issuer, the Assets and the Obligations as is customarily disclosed by managers of collateralized loan obligations and (v) each of its respective employees, representatives or other agents may disclose to any and all Persons, without limitation, the United States federal income tax treatment and United States federal income tax structure of the transactions contemplated by the Indenture, this Agreement and the related documents and all materials of any kind (including opinions and other tax analyses) that are provided to them relating to such United States federal income tax treatment and United States income tax structure. For purposes of this Section 6, the Holders of the Obligations shall not be considered “non-affiliated third parties.”

Section 7. Obligations of Collateral Manager.

In accordance with the Collateral Manager Standard, the Collateral Manager shall take care to avoid taking any action that would (a) materially adversely affect the status of the Issuer for purposes of United States federal or state law, or other law that is known by the Collateral Manager to be applicable to the Issuer, (b) not be permitted by the Issuer’s Organizational Instruments, copies of which the Collateral Manager acknowledges the Issuer has provided to the Collateral Manager, (c) violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer, including, without limitation, actions which would violate any United States federal, state or other applicable securities law that is known by the Collateral Manager to be applicable to it and, in each case, the violation of which would have a Material Adverse Effect on the Issuer or have a material adverse effect on the ability of the Collateral Manager to perform its obligations hereunder, (d) require registration of the Issuer or the pool of Assets as an “investment company” under Section 8 of the 1940 Act, or (e) knowingly and willfully adversely affect the interests of the Holders of the Obligations in the Assets in any material respect (other than (i) as expressly permitted hereunder or under the Indenture or (ii) in connection with any action taken in the ordinary course

of business of the Collateral Manager in accordance with its fiduciary duties to its Clients). If the Collateral Manager is directed by the Issuer or the requisite Holders of the Obligations, as applicable, to take any action which would, or could reasonably be expected to, in each case in its reasonable business judgment, have any such consequences, the Collateral Manager shall promptly notify the Issuer that such action would, or could reasonably be expected to, in each case in its reasonable business judgment, have one or more of the consequences set forth above and shall not take such action unless the Issuer then requests the Collateral Manager to do so and both a Majority of the Controlling Class and a Majority of the Subordinated Notes have consented thereto in writing. Notwithstanding any such request, the Collateral Manager may, in its sole discretion, choose not to take such action unless (1) arrangements satisfactory to it are made to insure or indemnify the Collateral Manager, Affiliates of the Collateral Manager and stockholders, partners, members, managers, directors, officers or employees of the Collateral Manager or such Affiliates from any liability and expense it may incur as a result of such action and (2) if the Collateral Manager so requests in respect of a question of law, the Issuer delivers to the Collateral Manager an opinion of counsel (from outside counsel satisfactory to the Collateral Manager) that the action so requested does not violate any material law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer or over the Collateral Manager. Neither the Collateral Manager, its Affiliates, nor stockholders, partners, members, managers, directors, officers or employees of the Collateral Manager or of its Affiliates shall be liable to the Issuer or any other Person, except as provided in Section 10. Notwithstanding anything contained in this Agreement to the contrary, any indemnification or insurance by the Issuer provided for in this Section 7 or Section 10 shall be payable out of the Assets in accordance with the Priority of Distributions, and the Collateral Manager may take into account such Priority of Distributions in determining whether any proposed indemnity arrangements contemplated by this Section 7 are satisfactory.

Section 8. Compensation.

(a) As compensation for the performance of its obligations as Collateral Manager, the Collateral Manager under this Agreement and the Indenture will be entitled to receive on each Distribution Date (in accordance with the Priority of Distributions) a fee, which will accrue quarterly in arrears on each Distribution Date (prorated for the related Interest Accrual Period), in an amount equal to 0.40% per annum (calculated on the basis of the actual number of days in the applicable Collection Period divided by 360) of the Fee Basis Amount at the beginning of the Collection Period relating to such Distribution Date (the "Collateral Management Fee"); provided that the Collateral Management Fees due on any Distribution Date shall not include any such fees (or any portion thereof) that have been waived or deferred by the Collateral Manager pursuant to this Agreement no later than the Determination Date immediately prior to such Distribution Date. The Collateral Management Fees will be payable on each Distribution Date to the extent of funds available for such purpose in accordance with the Priority of Distributions.

The Collateral Management Fee is payable on each Distribution Date only to the extent that sufficient Interest Proceeds or Principal Proceeds are available in accordance with the Priority of Distributions. To the extent the Collateral Management Fee is not paid on a Distribution Date due to insufficient Interest Proceeds or Principal Proceeds (and such fee was not voluntarily deferred

or waived by the Collateral Manager), the Collateral Management Fee due on such Distribution Date (or the unpaid portion thereof, as applicable, the "Collateral Management Fee Shortfall Amount") will be automatically deferred for payment on the succeeding Distribution Date, with interest, in accordance with the Priority of Distributions. Interest on the Collateral Management Fee Shortfall Amounts shall accrue at LIBOR + 0.25% for the period beginning on the first Distribution Date on which the related Collateral Management Fee was due (and not paid) through the Distribution Date on which such Collateral Management Fee Shortfall Amount (including accrued interest) is paid.

At the option of the Collateral Manager, by written notice to the Trustee, no later than the Determination Date immediately prior to such Distribution Date, on each Distribution Date, (i) all or a portion of the Collateral Management Fee or the Collateral Management Fee Shortfall Amount (including accrued interest thereon) due and owing on such Distribution Date may be deferred for payment on a subsequent Distribution Date, without interest (the "Current Deferred Management Fee") and (ii) all or a portion of the previously deferred Collateral Management Fees or Collateral Management Fee Shortfall Amounts (including accrued interest thereon) (collectively, the "Cumulative Deferred Management Fee") may be declared due and payable and will be payable in accordance with the Priority of Distributions. At such time as the Obligations are redeemed or repaid in whole in connection with an Optional Redemption (other than a Refinancing), all accrued and unpaid Collateral Management Fees, Current Deferred Management Fees, Cumulative Deferred Management Fees and Collateral Management Fee Shortfall Amounts (collectively, the "Aggregate Collateral Management Fees") shall be due and payable to the Collateral Manager.

(b) The Collateral Manager may, in its sole discretion (but shall not be obligated to), elect to waive all or any portion of the Collateral Management Fees or Aggregate Collateral Management Fees payable to the Collateral Manager on any Distribution Date. Any such election shall be made by the Collateral Manager delivering written notice thereof to the Trustee no later than the Determination Date immediately prior to such Distribution Date. Any election to waive the Collateral Management Fees or the Aggregate Collateral Management Fees may also be made by written standing instructions to the Trustee; provided that such standing instructions may be rescinded by the Collateral Manager at any time.

(c) Except as otherwise set forth herein and in the Indenture, the Collateral Manager will continue to serve as collateral manager under this Agreement notwithstanding that the Collateral Manager will not have received amounts due it under this Agreement because sufficient funds were not then available thereunder to pay such amounts in accordance with the Priority of Distributions.

(d) If this Agreement is terminated for any reason, or if the Collateral Manager resigns or is removed, (i) the Collateral Management Fee shall be prorated for any partial period elapsing from the last Distribution Date on which such Collateral Manager received such Collateral Management Fees to the effective date of such termination, resignation or removal and (ii) any unpaid Cumulative Deferred Management Fees shall be determined as of the effective date of such termination, resignation or removal and, in each case, shall be due and payable on each Distribution Date following the effective date of such termination, resignation or removal in accordance with the Priority of Distributions until paid in full. Otherwise, such Collateral Manager shall not be

entitled to any further compensation for further services but shall be entitled to receive any expense reimbursement accrued to the effective date of termination, resignation or removal and any indemnity amounts owing (or that may become owing) under this Agreement. Any such Collateral Management Fees, expense reimbursement and indemnities owed to such Collateral Manager or owed to any successor Collateral Manager on any Distribution Date shall be paid pro rata based on the amount thereof then owing to each such Person, subject to the Priority of Distributions.

Section 9. Benefit of the Agreement.

The Collateral Manager shall perform its obligations hereunder and under the Indenture in accordance with the terms of this Agreement and the terms of the Indenture applicable to it. The Collateral Manager agrees and consents to the provisions contained in Article XV of the Indenture. In addition, the Collateral Manager acknowledges the pledge under the granting clause of the Indenture.

Section 10. Limits of Collateral Manager Responsibility.

(a) The Collateral Manager shall not be responsible for any action or inaction of the Issuer, the Independent Investment Professional or the Trustee in following or declining to follow any advice, recommendation or direction of the Collateral Manager including as set forth in Section 7. The Indemnified Parties (as defined below) shall not be liable to the Issuer, the Trustee, any Holder of Obligations, the Placement Agent, any of their respective Affiliates, Owners or Related Persons or any other Persons for any act, omission, error of judgment, mistake of law, or for any claim, loss, liability, damage, judgment, assessment, settlement, cost, or other expense (including attorneys’ fees and expenses and court costs) arising out of any investment, or for any other act or omission in the performance of the Collateral Manager’s obligations under or in connection with this Agreement or the terms of any other Transaction Document applicable to the Collateral Manager, incurred as a result of actions taken or recommended or for any omissions of the Collateral Manager, or for any decrease in the value of the Assets, except the Collateral Manager shall be liable (i) by reason of acts or omissions constituting bad faith, willful misconduct or gross negligence in the performance of its duties hereunder and under the terms of the Indenture applicable to the Collateral Manager or (ii) with respect to the Collateral Manager Offering Circular Information, as of the date made, containing any untrue statement of a material fact or omitting to state a material fact, in each case necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (the preceding clauses (i) and (ii) collectively referred to for purposes of this Section 10 as “Collateral Manager Breaches”). The Collateral Manager shall not be liable for any consequential, punitive, exemplary or treble damages or lost profits hereunder or under the Indenture. Nothing contained herein shall be deemed to waive any liability which cannot be waived under applicable state or federal law or any rules or regulations adopted thereunder.

(b) (i) The Issuer shall indemnify and hold harmless the Collateral Manager, its Affiliates and Owners and their respective Related Persons (any such party in each such case, an “Indemnified Party”) from and against any and all losses, claims, damages, judgments, assessments, costs or other liabilities (collectively, “Losses”) and will promptly reimburse each such Indemnified Party for all reasonable fees and expenses incurred by an Indemnified Party with respect thereto (including

reasonable fees and expenses of counsel) (collectively, “Expenses”) arising out of or in connection with the issuance and borrowing of the Obligations (including, without limitation, any untrue statement of material fact contained in the Offering Circular, or omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than Collateral Manager Offering Circular Information), the transactions contemplated by the Offering Circular, the Indenture or this Agreement and any acts or omissions of any such Indemnified Party; provided that, such Indemnified Party shall not be indemnified for any Losses or Expenses incurred as a result of any Collateral Manager Breach. Notwithstanding anything contained herein to the contrary, the obligations of the Issuer under this Section 10 to indemnify any Indemnified Party for any Losses or Expenses are non-recourse obligations of the Issuer payable solely out of the Assets in accordance with the Priority of Distributions.

(ii) The Collateral Manager shall indemnify and hold harmless the Issuer, its Affiliates and their respective partners, members, managers, stockholders, directors, officers, employees and agents (any such party in each such case, an “Indemnified Party”) from and against any and all Losses or Expenses arising out of or in connection with a Collateral Manager Breach; provided that the Collateral Manager will not be liable for any Losses to the extent that such Losses are incurred as a result of any acts or omissions by such Indemnified Party that constitute bad faith, willful misconduct, gross negligence or fraud by such Indemnified Party hereunder or under the terms of any other Transaction Document applicable to it.

Section 11. Limited Duties and Obligations; No Joint Venture.

The Collateral Manager shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (i) the Collateral Manager shall not be subject to any fiduciary or other implied duties and (ii) the Collateral Manager shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby. The Issuer and the Collateral Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them partners or joint venturers or impose any liability as such on either of them. The Collateral Manager shall be deemed, for all purposes herein, an independent contractor and shall, except as otherwise expressly provided herein or in the Indenture or authorized by the Issuer from time to time, have no authority to act for or represent the Issuer in any way or otherwise be deemed an agent of the Issuer. It is acknowledged that neither the Collateral Manager nor any of its Affiliates has provided or shall provide any tax, accounting or legal advice or assistance to the Issuer or any other Person in connection with the transactions contemplated hereby.

Section 12. Term; Termination.

(a) This Agreement shall commence as of the date first set forth above and shall continue in force until the first of the following occurs: (i) the final liquidation of the Assets and the final distribution of the proceeds of such liquidation to the Holders of the Obligations, (ii) the payment in full of the Obligations and the satisfaction and discharge of the Indenture in accordance with its terms or (iii) the early termination of this Agreement with respect to the Collateral Manager in

accordance with Section 12(c), in connection with the resignation of such Collateral Manager pursuant to Section 12(b) or in connection with the removal of such Collateral Manager pursuant to Section 14.

(b) Subject only to clause (c) below, the Collateral Manager may resign upon 90 days’ prior written notice to the Issuer (or such shorter notice as is acceptable to the Issuer), the Holders and the Trustee; provided that, the Collateral Manager shall have the right to resign immediately upon the effectiveness of any material change in applicable law or regulation which renders the performance by the Collateral Manager of its duties hereunder or under the Indenture to be a violation of such law or regulation.

(c) Notwithstanding the provisions of clause (b) above, no resignation or removal of the Collateral Manager or termination of this Agreement with respect to such Collateral Manager in connection with such resignation or removal shall be effective until the date as of which a successor Collateral Manager shall have been appointed in accordance with Section 12(d) or Section 12(e), and has accepted all of the Collateral Manager’s duties and obligations pursuant to this Agreement in writing (an “Instrument of Acceptance”) and has assumed such duties and obligations.

(d) Promptly after notice of any removal under Section 14 or any resignation of the Collateral Manager that is to take place while any of the Obligations are Outstanding, the Issuer shall transmit copies of such notice to the Trustee (which shall forward a copy of such notice to the Holders) and the Rating Agencies (provided that, in the case of S&P, only for so long as any Class A Debt remains Outstanding) and shall appoint a successor Collateral Manager, at the direction of a Majority of the Subordinated Notes, which (i) has demonstrated an ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager hereunder, (ii) is legally qualified and has the capacity to assume all of the responsibilities, duties and obligations of the Collateral Manager hereunder and under the applicable terms of the Indenture, (iii) does not cause or result in the Issuer becoming, or require the pool of Assets to be registered as, an investment company under the 1940 Act, (iv) with respect to which the Global Rating Agency Condition has been satisfied, (v) the appointment of which does not subject the issuer to material adverse tax consequences and (vi) has been approved by a Majority of the Controlling Class.

(e) If (i) a Majority of the Subordinated Notes fails to nominate a successor within 30 days of initial notice of the resignation or removal of the Collateral Manager or (ii) a Majority of the Controlling Class does not approve the proposed successor nominated by a Majority of the Subordinated Notes within 20 days of the date of the notice of such nomination, then a Majority of the Controlling Class shall, within 60 days of the failure described in clauses (i) or (ii) of this sentence, as the case may be, nominate a successor Collateral Manager that meets the criteria set forth in Section 12(d). If a Majority of the Subordinated Notes approves such Controlling Class nominee, such nominee shall become the Collateral Manager. If no successor Collateral Manager is appointed within 90 days (or, in the event of a change in applicable law or regulation which renders the performance by the Collateral Manager of its duties under this Agreement or the Indenture to be a violation of such law or regulation, within 30 days) following the termination or resignation of the Collateral Manager, any of the Collateral Manager, the Issuer, a Majority of the Subordinated Notes and a Majority of the Controlling Class shall have the right to petition a court of competent

jurisdiction to appoint a successor Collateral Manager, in any such case whose appointment shall become effective after such successor has accepted its appointment and without the consent of any Holder of any Obligation.

(f) The successor Collateral Manager shall be entitled to the Collateral Management Fees set forth in Section 8(a) (except such portion of the Collateral Management Fees due and payable to the former Collateral Manager as set forth in Section 8(d)) and no compensation payable to such successor Collateral Manager shall be greater than as set forth in Section 8(a) without the prior written consent of 100% of the Holders of each Class of Obligations. Upon the later of the expiration of the applicable notice periods with respect to termination specified in this Section 12 or in Section 14 and the acceptance of its appointment hereunder by the successor Collateral Manager, all authority and power of the Collateral Manager hereunder, whether with respect to the Assets or otherwise, shall automatically and without action by any Person or entity pass to and be vested in the successor Collateral Manager. The Issuer, the Trustee and the successor Collateral Manager shall take such action (or the Issuer shall cause the outgoing Collateral Manager to take such action) consistent with this Agreement and as shall be necessary to effect any such succession.

(g) If this Agreement is terminated pursuant to this Section 12, such termination shall be without any further liability or obligation of either party to the other, except as provided in clause (h) below.

(h) Sections 6, 10, 12(g), 15, 17, 21, 22, 23 and 25 shall survive any termination of this Agreement pursuant to this Section 12 or Section 14.

Section 13. Assignments.

(a) Except as otherwise provided in this Section 13, the Collateral Manager may not assign or delegate (except as provided in Section 2(e)) its rights or responsibilities under this Agreement unless it has (i) notified Moody’s and directed the Trustee to provide notice to each registered holder, (ii) the Issuer and a Majority of the Controlling Class have consented thereto and (iii) a Majority of the Subordinated Notes has not objected thereto. The Collateral Manager shall not be required to obtain such consent with respect to a change of control transaction that is deemed to be an assignment within the meaning of Section 202(a)(1) of the Advisers Act, as interpreted by the SEC and its Staff and relevant courts, at the time of any such transaction; provided that, if the Collateral Manager or the Sub-Advisor is a Registered Investment Adviser, the Collateral Manager shall obtain the consent of the Majority of the Holders of Obligations, on behalf of the Issuer, in a manner consistent with SEC Staff interpretations of Section 205(a)(2) of the Advisers Act, to any such transaction. For the avoidance of doubt, such consent by the Majority of the Holders of Obligations shall be presumed to be granted should the Majority of the Holders of Obligations fail to object within a reasonable period following appropriate notice by the Collateral Manager of an actual, potential or intended change of control transaction.

(b) The Collateral Manager may, without notifying Moody’s and without obtaining the consent of any Holder (and without respect to the objection of any Holder) and, so long as such assignment does not constitute an “assignment” for purposes of Section 205(a)(2) of the Advisers

Act during such time as the Collateral Manager or the Sub-Advisor is a Registered Investment Adviser, without obtaining the prior consent of the Majority of the Holders of Obligations on behalf of the Issuer, (1) assign any of its rights or obligations under this Agreement to an Affiliate; provided that, such Affiliate (i) has demonstrated an ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager pursuant to this Agreement, (ii) has the legal right and capacity to act as Collateral Manager under this Agreement, (iii) shall not cause the Issuer or the pool of Assets to become required to register under the provisions of the 1940 Act or (2) enter into (or have its parent, if any, enter into) any consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all of its assets to, another entity and (iv) shall have the benefit of the Sub-Advisory Agreement to the same extent as the Collateral Manager; provided that, at the time of such consolidation, merger, amalgamation or transfer the resulting, surviving or transferee entity assumes all the obligations of the Collateral Manager under this Agreement generally and the other entity has substantially the same investment personnel; provided, further, that such action does not cause the Issuer to be subject to tax in any jurisdiction; provided, further, that the Collateral Manager shall deliver prior notice to Moody’s of any assignment or combination made pursuant to this sentence. Upon the execution and delivery of any such assignment by the assignee, the Collateral Manager will be released from further obligations pursuant to this Agreement except with respect to its obligations and agreements arising under Section 10, 12(g), 17, 21 through 23, and 25 in respect of acts or omissions occurring prior to such assignment and except with respect to its obligations under Section 15 after such assignment.

(c) This Agreement shall not be assigned by the Issuer without (i) the prior written consent of (A) the Collateral Manager and (B) a Majority of each Class of Obligations (voting separately) and (ii) satisfaction of the Global Rating Agency Condition, except in the case of assignment by the Issuer (1) to an entity which is a successor to the Issuer permitted under the Indenture, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Issuer is bound hereunder or (2) to the Trustee as contemplated by the granting clause of the Indenture. The Issuer has assigned its rights, title and interest in (but not its obligations under) this Agreement to the Trustee pursuant to the Indenture, and the Collateral Manager by its signature below agrees to, and acknowledges, such assignment. Upon assignment by the Issuer, the Issuer shall use reasonable efforts to cause such assignee to execute and deliver to the Collateral Manager such documents as the Collateral Manager shall consider reasonably necessary to effect fully such assignment.

(d) The Issuer shall provide the Rating Agencies and the Trustee (who shall provide a copy of such notice to the Controlling Class) with notice of any assignment pursuant to this Section 13.

Section 14. Removal for Cause.

(a) The Collateral Manager may be removed for Cause upon 10 Business Days’ prior written notice by the Issuer (“Termination Notice”) at the direction of a Majority of the Controlling Class or a Majority of the Subordinated Notes. Simultaneous with its direction to the Issuer to remove the Collateral Manager for Cause, a Majority of the Controlling Class or a Majority of the Subordinated Notes, as applicable, shall give to the Issuer a written statement setting forth the reason

for such removal (“Statement of Cause”). The Issuer shall deliver to the Trustee (who shall deliver a copy of such notice to the Holders) a copy of the Termination Notice and the Statement of Cause within five Business Days of receipt. No such removal shall be effective (A) until the date as of which a successor Collateral Manager shall have been appointed in accordance with Sections 12(d) and (e) and delivered an Instrument of Acceptance to the Issuer and the removed Collateral Manager and the successor Collateral Manager has effectively assumed all of the Collateral Manager’s duties and obligations and (B) unless the Statement of Cause has been delivered to the Issuer as set forth in this Section 14(a). “Cause” shall mean any of the following:

(i) the Collateral Manager shall willfully and intentionally violate or breach any provision of this Agreement or the Indenture applicable to it (not including a willful and intentional breach that results from a good faith dispute regarding reasonable alternative courses of action or interpretation of instructions), which breach, in each case or taken in the aggregate, shall have or could be reasonably expected to have a material adverse effect on the Issuer or the Holders of any Class of Obligations;

(ii) the Collateral Manager shall breach any provision of this Agreement or any terms of the Indenture or any other Transaction Document applicable to it (other than as covered by clause (i) and it being understood that the failure to meet any Concentration Limitation, Collateral Quality Test or Coverage Test is not a breach for purposes of this clause (ii)), which breach would have a material adverse effect on the holders of any Class of Obligations and shall not cure such breach (if capable of being cured) within 30 days after the earlier to occur of a Responsible Officer of the Collateral Manager receiving notice or having actual knowledge of such breach, unless, if such breach is remediable, the Collateral Manager has taken action commencing the cure thereof within such 30 day period that the Collateral Manager believes in good faith will remedy such breach within 60 days after the earlier to occur of a Responsible Officer receiving notice or having actual knowledge thereof;

(iii) the failure of any representation, warranty, certification or statement made or delivered by the Collateral Manager in or pursuant to this Agreement or the Indenture to be correct in any material respect when made which failure (A) would have a material adverse effect on the holders of any Class of Obligation and (B) is not corrected by the Collateral Manager within 30 days of a Responsible Officer of the Collateral Manager receiving notice of such failure, unless, if such failure is remediable, the Collateral Manager has taken action commencing the cure thereof within such 30-day period that the Collateral Manager believes in good faith will remedy such failure within 60 days after the earlier to occur of a Responsible Officer receiving notice thereof or having actual knowledge thereof;

(iv) the Collateral Manager, Fifth Street Management LLC or any successor sub-adviser of the Collateral Manager (collectively, the “Fifth Street Entities”) is wound up or dissolved or there is appointed over it or a substantial part of its assets a receiver, administrator, administrative receiver, trustee or similar officer; or any of the Fifth Street Entities (A) ceases to be able to, or admits in writing its inability to, pay its debts as they become due and payable, or makes a general assignment for the benefit of, or enters into any composition or arrangement with, its creditors generally; (B) applies for or consents (by admission of material allegations of a petition or otherwise)

to the appointment of a receiver, trustee, assignee, custodian, liquidator or sequestrator (or other similar official) of any of the Fifth Street Entities or of any substantial part of its properties or assets in connection with any winding up, liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law, or authorizes such an application or consent, or proceedings seeking such appointment are commenced without such authorization, consent or application against any of the Fifth Street Entities and continue undismissed for 60 days; (C) authorizes or files a voluntary petition in bankruptcy, or applies for or consents (by admission of material allegations of a petition or otherwise) to the application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, or similar law, or authorizes such application or consent, or proceedings to such end are instituted against any of the Fifth Street Entities without such authorization, application or consent and are approved as properly instituted and remain undismissed for 60 days or result in adjudication of bankruptcy or insolvency or the issuance of an order for relief; or (D) permits or suffers all or any substantial part of its properties or assets to be sequestered or attached by court order and the order (if contested in good faith) remains undismissed for 60 days;

(v) the occurrence and continuation of an Event of Default pursuant to Section 5.1(a), (b) or (c) of the Indenture that results primarily from any material breach by the Collateral Manager of its duties under this Agreement or under the Indenture which breach or default is not cured within any applicable cure period;

(vi) Two or more of the Key Persons shall (i) not be an officer or employee of the Collateral Manager (or an Affiliate of the Collateral Manager that is acting on behalf of the Collateral Manager) or (ii) not be actively involved in the management of the Collateral Manager or any Affiliate thereof for any continuous 60-day period, other than due to temporary absences for family leave (each such occurrence, a “Key Person Event”), and the responsibilities of any such Key Person that are relevant to the Collateral Manager's responsibilities hereunder are not assumed by an individual who is an Approved Replacement within 60 days after the last day on which such Key Person ceased to comply with the provisions of clause (i) or (ii) above. “Key Persons” shall initially mean Bernard Berman, Ivelin Dimitrov and Leonard Tannenbaum and may subsequently include any Approved Replacements therefor. “Approved Replacement” any replacement Key Person approved in accordance with the following procedures: The Collateral Manager may, at any time and by notice to the Trustee (who shall forward such notice to the Controlling Class and the holders of the Subordinated Notes) propose any person to be an Approved Replacement. Any such proposed individual shall become an Approved Replacement if such person is (i) affirmatively approved in writing by a Majority of the Controlling Class prior to the expiration of a period of 90 consecutive days after the occurrence of any Key Person Event or (ii) not objected to by a Majority of the Controlling Class within 30 days after notice of such proposed replacement is sent to the Holders of the Controlling Class; provided that the Collateral Manager must propose any such replacement not later than 60 days after the occurrence of any Key Person Event. If any proposed replacement (whether or not it was the first to be proposed) is not approved in accordance with the procedures described in this paragraph, the Collateral Manager may, subject to the approval rights in the preceding sentence, propose another replacement within the time periods specified in the preceding sentence;

(vii) (A) the occurrence of an act by any of the Fifth Street Entities that constitutes fraud or criminal activity in the performance of its obligations under this Agreement, the Sub-Advisory Agreement, any other advisory agreement, any staffing agreement or similar agreement that is entered into for the benefit of the Collateral Manager or the Issuer (as determined pursuant to a final adjudication by a court of competent jurisdiction) or any of the Fifth Street Entities being indicted or convicted for a criminal offense materially related to its business of providing asset management services and, in the case of an indictment, such indictment remains undismissed for at least 90 days, or (B) any Responsible Officer of any of the Fifth Street Entities primarily responsible (directly or indirectly) for the performance by the Collateral Manager of its obligations under this Agreement (in the performance of his or her investment management duties) is indicted or convicted for a criminal offense materially related to the business of the Collateral Manager or the Sub-Advisor providing asset management services and continues to have responsibility for the performance (directly or indirectly) by the Collateral Manager under this Agreement for a period of 10 days after such indictment or conviction; or

(viii) the inability of the Collateral Manager to perform its duties hereunder, under the Indenture for a period of 30 consecutive days due to termination of, non-performance under, or any other reason relating to the Sub-Advisory Agreement, any other advisory agreement, any staffing agreement or other similar agreement that is entered into with any of the Fifth Street Entities for the benefit of the Collateral Manager or the Issuer.

(b) If any of the events specified in clauses (a)(i) through (viii) of this Section 14 shall occur, the Collateral Manager shall give prompt written notice thereof to the Issuer, the Holders, the Trustee and the Rating Agencies; provided that, if any of the events specified in Section 14(a)(iv) shall occur, the Collateral Manager shall give written notice thereof to the Issuer, the Trustee and the Rating Agencies immediately upon the Collateral Manager’s becoming aware of the occurrence of such event. A Majority of each Class of Obligations, voting separately by Class, and a Majority of the Subordinated Notes may waive any event described in Section 14(a)(i), (ii), (iii), (v), (vi), (vii) or (viii) as a basis for termination of this Agreement and removal of the Collateral Manager under this Section 14. In no event will the Trustee be required to determine whether or not Cause exists for the removal of the Collateral Manager.

(c) If the Collateral Manager is removed pursuant to this Section 14, the Issuer shall have, in addition to the rights and remedies set forth in this Agreement, all of the rights and remedies available with respect thereto at law or equity.

(d) Obligations owned or beneficially owned by the Collateral Manager or any Affiliate of the Collateral Manager or held in accounts with respect to which the Collateral Manager exercises discretionary voting rights will be disregarded and deemed not to be outstanding with respect to a vote to (1) remove the Collateral Manager, (2) waive an event constituting Cause and (3) appoint or disapprove a successor Collateral Manager, if the Collateral Manager is being terminated for Cause.

Section 15. Obligations of Resigning or Removed Collateral Manager.

(a) On, or as soon as practicable after, the date any resignation or removal is effective, the Collateral Manager shall (at the Issuer’s expense):

(i) deliver to the Issuer or to such other Person as the Issuer shall instruct all property and documents of the Issuer or otherwise relating to the Assets then in the custody of the Collateral Manager;

(ii) deliver to the Trustee an accounting with respect to the books and records delivered to the Trustee or the successor Collateral Manager appointed pursuant to Section 12; and

(iii) agree to cooperate with all reasonable requests related to any proceedings, even after its resignation or removal, which arise in connection with this Agreement or the Indenture, assuming the Collateral Manager has received an indemnity in form reasonably satisfactory to the Collateral Manager from an entity reasonably satisfactory to the Collateral Manager, and expense reimbursement reasonably satisfactory to the Collateral Manager.

(b) Notwithstanding such resignation or removal, the Collateral Manager shall remain liable for its obligations under Section 10 and its acts or omissions giving rise thereto and for any expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees) in respect of or arising out of a Collateral Manager Breach, subject to the limitations of liability set forth in Section 10.

Section 16. Representations and Warranties.

(a) The Issuer hereby represents and warrants to the Collateral Manager as follows:

(i) The Issuer has been duly organized and is validly existing under the laws of the jurisdiction of its organization, has the full power and authority to own its assets and the securities proposed to be owned by it and included in the Assets and to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property, the conduct of its business or the performance of this Agreement or the Indenture and the Obligations require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a Material Adverse Effect on the Issuer.

(ii) The Issuer has full power and authority to execute, deliver and perform all of its obligations under this Agreement, the Indenture and the Obligations and has taken all necessary action to authorize this Agreement and the execution and delivery of this Agreement and the performance of all obligations imposed upon it hereunder, and, as of the Closing Date, will have taken all necessary action to authorize the Indenture and the Obligations and the execution, delivery and performance of this Agreement, the Indenture and the Obligations and the performance of all obligations imposed upon it thereunder. No consent of any other Person including, without limitation, the holders of Subordinated Notes and creditors of the Issuer, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing (other than any filings pursuant to the UCC required under the Indenture and necessary to perfect any security

interest granted thereunder) or declaration with, any governmental authority is required by the Issuer in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Indenture or the Obligations or the obligations imposed upon the Issuer hereunder and thereunder other than those that have been obtained or made. This Agreement has been, and each instrument and document to which the Issuer is a party required hereunder or under the Indenture or the Obligations will be, executed and delivered by a Responsible Officer of the Issuer, and this Agreement constitutes, and each instrument or document required hereunder to which the Issuer is a party, when executed and delivered hereunder, will constitute, the legally valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, receivership, insolvency, winding-up or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency, winding-up or similar event applicable to the Issuer and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

(iii) The execution, delivery and performance of this Agreement and the documents and instruments required hereunder and under the Indenture will not violate any provision of any existing law or regulation binding on the Issuer, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Issuer, or the Organizational Instruments of, or any securities issued by, the Issuer or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Issuer is a party or by which the Issuer or any of its assets may be bound, the violation of which would have a Material Adverse Effect on the Issuer, and will not result in or require the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking (other than the lien of the Indenture).

(iv) The Issuer is not in violation of its Organizational Instruments or in breach or violation of or in default under any contract or agreement to which it is a party or by which it or any of its property may be bound, or any applicable statute or any rule, regulation or order of any court, government agency or body having jurisdiction over the Issuer or its properties, the breach or violation of which or default under which would have a material adverse effect on the validity or enforceability of this Agreement or the provisions of the Indenture applicable to the Issuer, or the performance by the Issuer of its duties hereunder or thereunder.

(v) The Issuer acknowledges receipt of the Sub-Advisor’s Form ADV, Part 2A at or prior to execution of this Agreement, as well as Part 2B reflecting relevant personnel, as required by the Advisers Act on behalf of the Collateral Manager. The Issuer acknowledges that such Form ADV, Part 2A includes a description of the Sub-Advisor’s proxy voting policies. The Issuer understands that it may receive a copy of such proxy voting policies as well as information as to how the Sub-Advisor has voted proxies, if any, related to securities held by the Issuer by contacting the Collateral Manager.

(b) The Collateral Manager hereby represents and warrants to the Issuer, as of the date hereof, as follows:

(i) The Collateral Manager is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction of its organization and has full power and authority to own its assets and to transact the business in which it is currently engaged, and is duly qualified to do business and is in good standing under the laws of each jurisdiction where the performance of this Agreement and any other Transaction Document to which it is a party would require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a material adverse effect on the ability of the Collateral Manager to perform its obligations under this Agreement, the provisions of the Indenture applicable to the Collateral Manager and any other Transaction Document to which it is a party, or on the validity or enforceability of this Agreement, the provisions of the Indenture applicable to the Collateral Manager and any other Transaction Document to which it is a party.

(ii) The Collateral Manager has full power and authority to execute and deliver this Agreement and any other Transaction Document to which it is a party and to perform all of its obligations required hereunder and under the provisions of the Indenture and such other Transaction Documents applicable to the Collateral Manager, and has taken all necessary action to authorize this Agreement and any other Transaction Document to which it is a party on the terms and conditions hereof and thereof and the execution and delivery of this Agreement and any other Transaction Document to which it is a party and the performance of all obligations required hereunder and thereunder applicable to the Collateral Manager. No consent of any other Person, including, without limitation, members and creditors of the Collateral Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Collateral Manager hereof in connection with this Agreement or any other Transaction Document to which it is a party or the execution, delivery, performance, validity or enforceability of this Agreement or any other Transaction Document to which it is a party or the obligations imposed on the Collateral Manager hereunder or under the terms of the Indenture or any other Transaction Document applicable to the Collateral Manager other than those which have been obtained or made. No representation is made herein with respect to the requirements of state securities laws or regulations. This Agreement has been executed and delivered by a Responsible Officer of the Collateral Manager, and this Agreement and any other Transaction Document to which it is a party constitutes the valid and legally binding obligation of the Collateral Manager enforceable against the Collateral Manager in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency, winding-up or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency, winding-up or similar event applicable to the Collateral Manager and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

(iii) The execution, delivery and performance of this Agreement and the terms of the Indenture and any other Transaction Document applicable to the Collateral Manager will not violate any provision of any existing law or regulation binding on the Collateral Manager (except that no representation is made herein with respect to the requirements of state securities laws or regulations), or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Collateral Manager, or the Organizational Instruments of, or any securities

issued by, the Collateral Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Collateral Manager is a party or by which the Collateral Manager or any of its assets may be bound, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of the Collateral Manager or which would reasonably be expected to materially adversely affect its ability to perform its obligations hereunder or under the Indenture or any other Transaction Document to which it is a party.

(iv) There is no charge, investigation, action, suit or proceeding before or by any court pending or, to the actual knowledge of the Collateral Manager, threatened, that, if determined adversely to the Collateral Manager, would have a material adverse effect upon the performance by the Collateral Manager of its duties under this Agreement or the provisions of the Indenture and any other Transaction Document applicable to the Collateral Manager.

(v) The Collateral Manager Offering Circular Information in the Final Offering Circular, as of the date of the Final Offering Circular and the Closing Date, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(vi) Other than any filings the Collateral Manager may be required to file after the Closing Date as a public company subject to the Exchange Act, the Collateral Manager has obtained, maintained and kept in full force and effect all Governmental Authorizations which are necessary for it to properly carry out its business, and has made all Governmental Filings necessary for the execution and delivery by it of the Transaction Documents to which it is a party and the performance by the Collateral Manager of its obligations under this Agreement and the other Transaction Documents, and no Governmental Authorization or Governmental Filing which has not been obtained or made is required to be obtained or made by it in connection with the execution and delivery by it of any Transaction Document to which it is a party or the performance of its obligations under this Agreement and the other Transaction Documents to which it is a party.

(vii) The Collateral Manager has duly observed and complied with all applicable laws, including the Securities Act and the 1940 Act, relating to the conduct of its business and its assets except where the failure to do so could not reasonably be expected to result in a material adverse effect upon the performance by the Collateral Manager of its duties under, or on the validity or enforceability of this Agreement and the provisions of the Indenture and any other Transaction Document applicable to the Collateral Manager thereunder or could reasonably be expected to constitute “Cause” hereunder. The Collateral Manager has preserved and kept in full force and effect its legal existence. The Collateral Manager has preserved and kept in full force and effect its rights, privileges, qualifications and franchises, except where the failure to do so is not likely to have a have a material adverse effect on the Issuer or the Holders of any Class of Obligations.

(viii) To the Collateral Manager’s knowledge, no event constituting Cause hereunder has occurred and is continuing and no event that with the giving of notice or passage of time would become an event constituting Cause has occurred or is continuing and no such event would occur as a result of its entering into or performing its obligations under this Agreement.

(ix) (i) The Collateral Manager does not hold itself out to the public as an investment adviser and to the extent the Collateral Manager provides any investment advice to any Person, it provides investment advice solely to its wholly-owned subsidiaries, and (ii) the Collateral Manager is not required to register as an investment adviser under the Advisers Act.

(c) The Collateral Manager makes no representation, express or implied, with respect to the Issuer or the disclosure in the Offering Circular with respect to the Issuer.

Section 17. Limited Recourse; No Petition.

The Collateral Manager hereby agrees that it shall not institute against, or join any other Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under United States federal or state or other bankruptcy or similar laws until at least one year (or, if longer, the applicable preference period then in effect) plus one day after payment in full of all Obligations issued or borrowed under the Indenture; provided that, nothing in this Section 17 shall preclude the Collateral Manager from (A) taking any action prior to the expiration of such applicable preference period in (i) any case or proceeding voluntarily filed or commenced by the Issuer or (ii) any insolvency proceeding filed or commenced against the Issuer by any Person other than the Collateral Manager or (B) commencing against the Issuer or any of its properties any legal action that is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding. The Collateral Manager hereby acknowledges and agrees that the Issuer’s obligations hereunder will be solely the exempted company obligations of the Issuer, and that the Collateral Manager will not have any recourse to any of the Affiliates of the Issuer or any of the shareholders, partners, managers, members, officers or employees of the Issuer or of any Affiliate of the Issuer with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any Transactions contemplated hereby. Notwithstanding any other provisions hereof or of any other Transaction Document, recourse in respect of any obligations of the Issuer to the Collateral Manager hereunder or thereunder will be limited to the Assets as applied in accordance with the Priority of Distributions pursuant to the Indenture and, on the exhaustion of the Assets, all claims against the Issuer arising from this Agreement, the Indenture or any other Transaction Document or any Transactions contemplated hereby or thereby shall be extinguished and shall not revive. This Section 17 shall survive the termination of this Agreement for any reason whatsoever.

The Issuer hereby acknowledges and agrees that the Collateral Manager’s obligations hereunder will be solely the corporate obligations of the Collateral Manager, and that the Issuer will not have any recourse to any of the directors, officers, employees, shareholders or Affiliates of the Collateral Manager with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any Transactions contemplated hereby.

Section 18. Notices.

Unless expressly provided otherwise herein, all notices, demands, certificates, requests, directions and communications hereunder shall be in writing and shall be effective (a) upon receipt when sent through the U.S. mails, registered or certified mail, return receipt requested, postage

prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (b) one Business Day after delivery to any overnight courier, (c) on the date personally delivered to a Responsible Officer of the party to which sent, (d) on the date transmitted by legible facsimile transmission with a confirmation of receipt, or (e) upon receipt when transmitted by electronic mail transmission, in all cases addressed to the recipient at such recipient’s address for notices as set forth below:

(a) If to the Issuer:

FS Senior Funding Ltd.
c/o Appleby Trust (Cayman) Ltd.
Clifton House, 75 Fort Street, PO Box 1350
Grand Cayman KY1-1108
Cayman Islands
Attention: The Directors
Telephone No.: (345)-949-4900
Facsimile No.: (345)-949-4901
Email: atclsf@applebyglobal.com

(b) If to the Collateral Manager:

Fifth Street Senior Floating Rate Corp.
777 W. Putnam Ave. 3^rd Floor
Greenwich, CT 06830
Attention: Ivelin Dimitrov
Telephone No.: 203-681-3142
Facsimile No.: 203-681-3879
Email: ivelin@fifthstreetfinance.com

Wells Fargo Bank, National Association

9062 Old Annapolis Road

Columbia, Maryland 21045

Attention: CDO Trust Services – FS Senior Funding Ltd.

Telephone No.: (410) 884-2000

Facsimile No.: 410-715-3748

Email: FifthStreet@wellsfargo.com

(d) If to the Holders:

At their respective addresses set forth in the Register, as applicable.

Any party may change the address, telecopy number, or email address to which communications or copies directed to such party are to be sent by giving notice to the other parties

of such change of address, telecopy number, or email address in conformity with the provisions of this Section 18 for the giving of notice.

Unless the parties hereto otherwise agree, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, if any such notice or other communication is not sent or posted during normal business hours, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day; provided, further, that if in any instance the intended recipient declines or opts out of the receipt acknowledgment, then such notice or communication shall be deemed to have been received on the Business Day sent or posted, if sent or posted during normal business hours on such Business Day, or if otherwise, at the opening of business on the next Business Day.

Section 19. Binding Nature of Agreement; Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns as provided herein.

Section 20. Entire Agreement; Amendment.

This Agreement, the Sub-Advisory Agreement (along with any other advisory agreement, any staffing agreement or other similar agreement that is entered into with any of the Fifth Street Entities for the benefit of the Collateral Manager or the Issuer) and the Indenture contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof and thereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing executed by each of the parties hereto. Neither the Issuer nor the Collateral Manager will enter into any agreement amending, modifying or terminating this Agreement (i) without notifying Moody’s, (ii) without obtaining the consent of a Majority of the Controlling Class and (iii) unless no objection has been received from a Majority of the Subordinated Notes; provided that, no such consent of the Controlling Class will be required, and no such objection right of the Subordinated Notes shall exist, in connection with any amendment hereto the sole purpose of which is to (i) correct inconsistencies, typographical or other errors, defects or ambiguities or (ii) conform this Agreement to the Final Offering Circular or the Indenture (as it may be amended from time to time). The Issuer shall provide the Holders with notice of any amendment of this Agreement; provided that the Issuer shall provide the Holders of the Controlling Class of Obligations and the Holders of Subordinated Notes with notice of any amendment of this Agreement that does not require the consent of such Holders at least 15 Business Days prior to the proposed execution date of such amendment; provided, further, that if the Holders of at least 33-1/3%

of the Aggregate Outstanding Amount of either the Controlling Class of Obligations or the Subordinated Notes object to such amendment after receiving such notice, then the consent of a Majority such objecting Class or Classes must be obtained to effect such amendment.

Section 21. Governing Law.

THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW); provided that, nothing herein shall be construed in a manner that is inconsistent with the Advisers Act to the extent the Advisers Act is applicable.

Section 22. Submission to Jurisdiction.

Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court sitting in the Borough of Manhattan in The City of New York in any action or proceeding arising out of or relating this Agreement, and hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York State or Federal court. Each party hereto hereby irrevocably waives, to the fullest extent that it may legally do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each party hereto irrevocably consents to the service of any and all process in any action or proceeding by the mailing or delivery of copies of such process to it the address set forth in Section 18. Each party hereto agrees 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.

Section 23. Waiver of Jury Trial.

EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING.

Section 24. Conflict with the Indenture.

In respect of any conflict between the terms of this Agreement and the Indenture or actions required under the terms of the Indenture and the terms of this Agreement, the terms of the Indenture shall control.

Section 25. Subordination; Assignment of Agreement.

The Collateral Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement shall be subordinated to the extent set forth in, and the Collateral Manager agrees to be bound by the provisions of, Article XI of the Indenture as if the Collateral Manager were a party to the Indenture and hereby consents to the assignment of this Agreement as provided in Section 15.1 of the Indenture.

Section 26. Indulgences Not Waivers.

Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

Section 27. Costs and Expenses.

Except as otherwise agreed to by the parties hereto, the costs and expenses (including the fees and disbursements of legal counsel and accountants) of the Collateral Manager and of the Issuer incurred in connection with the negotiation and preparation of and the execution of this Agreement and any amendment hereto, and all matters incidental thereto, shall be paid by the Issuer in accordance with the Indenture. The Issuer will pay or reimburse the Collateral Manager for expenses including fees and out-of-pocket expenses reasonably incurred by the Collateral Manager in connection with the services provided by the Collateral Manager under this Agreement or the Indenture, including with respect to (a) legal advisers, consultants, rating agencies, accountants, brokers and other professionals retained by the Issuer or the Collateral Manager (on behalf of the Issuer), (b) asset pricing and asset rating services, compliance services and software, and accounting, programming and data entry services directly related to the management of the Assets, (c) all taxes, regulatory and governmental charges (not based on the income of the Collateral Manager), insurance premiums or expenses, (d) any and all costs and expenses incurred in connection with the acquisition or disposition of investments on behalf of the Issuer (whether or not actually consummated) and management thereof, including attorneys’ fees and disbursements, (e) any fees, expenses or other amounts payable to the Rating Agencies, (f) expenses and fees relating to any issuance of additional Obligations, redemption or Refinancing, as applicable, by the Issuer, (g) any extraordinary costs and expenses incurred by the Collateral Manager in the performance of its obligations under this Agreement and the Indenture and (h) as otherwise agreed upon by the Issuer and the Collateral Manager. In addition, the Issuer will pay or reimburse the costs and expenses (including fees and disbursements of legal counsel and accountants) of the Collateral Manager and the Issuer incurred in connection with or incidental to the entering into of this Agreement or any amendment thereof. The fees and expenses payable to the Collateral Manager on any Distribution Date are payable in accordance with the Priority of Distributions.

Section 28. Third Party Beneficiary.

The parties hereto agree that the Trustee on behalf of the Secured Parties shall be a third party beneficiary of this Agreement, and shall be entitled to rely upon and enforce such provisions of this Agreement to the same extent as if it were a party hereto.

Section 29. Titles Not to Affect Interpretation.

The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

Section 30. Execution in Counterparts.

This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by e-mail (.pdf) or facsimile transmission), each of which will be deemed an original, and all of which together constitute one and the same instrument. Delivery of an executed counterpart signature page of this Agreement by e-mail (.pdf) or facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 31. Provisions Separable.

The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

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

EXECUTED as a DEED for and on behalf of:

FS SENIOR FUNDING LTD., as Issuer

By:     ___________________________________
Name:
Title:

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

FIFTH STREET SENIOR FLOATING RATE CORP.,

as Collateral Manager

By:     _____________________________________
Name:
Title:

EXECUTION

SUB-ADVISORY AGREEMENT

BETWEEN

FIFTH STREET SENIOR FLOATING RATE CORP.

AND

FIFTH STREET MANAGEMENT LLC

This Agreement made this 28th day of May, 2015 (this “Agreement”), by and between Fifth Street Senior Floating Rate Corp., a Delaware corporation (the “Collateral Manager”), and Fifth Street Management LLC, a Delaware limited liability company (the “Sub-Advisor”).

WHEREAS, the Notes (as defined in the Indenture) will be issued pursuant to an Indenture dated as of the date hereof (the “Indenture”), among FS Senior Funding CLO Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”), FS Senior Funding CLO LLC, a limited liability company formed under the laws of the State of Delaware, as co-issuer (the “Co-Issuer”), and Wells Fargo Bank, National Association, as trustee (together with any successor trustee permitted under the Indenture, the “Trustee”);

WHEREAS, in connection with the transactions contemplated by the Indenture, the Collateral Manager has entered into that certain Collateral Management Agreement, dated as of the date hereof, by and between the Collateral Manager, as collateral manager, and the Issuer, as amended or supplemented from time to time (the “Collateral Management Agreement”);

WHEREAS, pursuant to Section 2(e) of the Collateral Management Agreement, the Collateral Manager is permitted to delegate certain of its obligations and duties under the Collateral Management Agreement to the Sub-Advisor, all on the terms and conditions set forth therein;

WHEREAS, the Collateral Manager desires to retain the Sub-Advisor to furnish collateral management sub-advisory services to the Collateral Manager on the terms and conditions hereinafter set forth, and the Sub-Advisor wishes to be retained to provide such services; and

WHEREAS, the Sub-Advisor believes that it will benefit from the transactions contemplated by the Indenture;

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

1.Defined Terms. Capitalized terms used herein that are not otherwise defined herein shall have the respective meanings ascribed thereto in the Indenture.

2. Duties of the Sub-Advisor.

(a) The Collateral Manager hereby engages the Sub-Advisor to advise the Collateral Manager in connection with its management, administration and servicing of the Collateral Obligations belonging to the Issuer, and the Sub-Advisor hereby accepts such engagement, in each case, upon the terms and subject to the conditions set forth herein. In furtherance of the foregoing, the Sub-Advisor shall use its commercially reasonable efforts to assist the Collateral Manager in the performance of the Collateral Manager’s duties and obligations pursuant to the Collateral Management Agreement and the other Transaction Documents.

(b) The Sub-Advisor shall for all purposes herein provided be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Collateral Manager in any way or otherwise be deemed to be an agent of the Collateral Manager.

(c) The Sub-Advisor shall render its services as Sub-Advisor hereunder with reasonable care and in good faith (i) in a manner which the Sub-Advisor believes to be consistent with the practices and procedures followed by institutional managers of national standing relating to assets of the same nature and character as the Collateral Obligations and (ii) substantially in accordance with its existing practices and procedures with respect to investing in assets of the nature and character of the Assets, except as expressly provided otherwise in this Agreement, the Collateral Management Agreement or the Indenture. To the extent not inconsistent with the foregoing, the Sub-Advisor will follow its customary standards, policies and procedures in performing its duties under this Agreement. The Sub-Advisor shall not be bound to follow any amendment to any Transaction Document that affects its duties, responsibilities, obligations or rights, unless the Sub-Advisor or the Collateral Manager has consented in writing thereto. The Sub-Advisor shall cause any purchase or sale of any Collateral Obligations or other asset of the Issuer to be conducted on terms and conditions negotiated on an arm’s length basis or on terms and conditions that would be obtained in an arm’s length transaction in compliance with Section 3 and Section 5 of the Collateral Management Agreement and Article XII of the Indenture.

3. Compensation.

(a) As compensation for the performance of its obligations as Sub-Advisor, the Sub-Advisor will be entitled to receive 100% of the Collateral Management Fees paid to the Collateral Manager under the Collateral Management Agreement.

(b) The Sub-Advisor will continue to serve as sub-advisor under this Agreement notwithstanding that the Collateral Manager will not have received the Collateral Management Fees under the Collateral Management Agreement because sufficient funds were not then available thereunder to pay such amounts in accordance with the Priority of Distributions or were not then payable for any other reason.

(c) All investment professionals of the Sub-Advisor and/or its Affiliates, when and to the extent engaged in providing collateral management sub-advisory services hereunder, and the compensation and routine overhead expenses of such personnel allocable to such services, shall be provided and paid for by the Sub-Advisor and not by the Collateral Manager.

4. Covenants.

(a) Each of the parties hereto shall comply in all material respects with all applicable material laws, ordinances, rules, regulations, and requirements of governmental authorities except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.

(b) The Sub-Advisor shall remain qualified to do business and in good standing (as applicable) in every jurisdiction in which the nature of its businesses so requires, except where the failure to be so qualified and in good standing could reasonably be expected to have a material adverse effect on its ability to perform collateral management sub-advisory services hereunder.

5. Representations and Warranties. (a) The Sub-Advisor represents and warrants to the Collateral Manager as of the Closing Date as follows:

(i)

The Sub-Advisor has been duly organized and is validly existing under the laws of Delaware, has the full power and authority to own its assets and to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires, or the performance of its duties under this Agreement would require, such qualification, except for failures to be so qualified, authorized or licensed would have a material adverse effect on its ability to perform its duties hereunder.


(ii)	The Sub-Advisor has full limited liability company power and authority to execute, deliver and perform its duties under this Agreement.


(iii)	There is not pending or, to the Sub-Advisor’s knowledge, threatened, any action, suit or proceeding before or by any court or other governmental or self-regulatory authority to which the Sub-Advisor is a party which might reasonably be expected to result in any material adverse effect on its ability to perform its duties hereunder.

(iv)

This Agreement has been duly authorized, executed and delivered by it and constitutes its valid and binding obligation, enforceable in accordance with its terms except that the enforceability thereof may be subject to (A) bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship or other similar laws now or hereafter in effect relating to creditors’ rights and (B) general principles of equity (regardless of whether such enforcement is considered in a Proceeding in equity or at law).


(v)	No consent, approval, authorization or order of or declaration or filing with any government, governmental instrumentality or court or other person is required for the performance by the Sub-Advisor of its duties hereunder, except such as have been duly made or obtained.

(vi)

Neither the execution and delivery of this Agreement nor the fulfillment of the terms hereof conflicts with or results in a breach or violation of any of the material terms or provisions of or constitutes a material default under (A) the Sub-Advisor’s certificate of formation, limited liability company agreement or other constituent documents, (B) the terms of any indenture, contract, lease, mortgage, deed of trust, note, agreement or other evidence of indebtedness or other agreement, obligation, condition, covenant or instrument to which the Sub-Advisor is a party or is bound, (C) any statute applicable to the Sub-Advisor, or (D) any law, decree, order, rule or regulation applicable to the Sub-Advisor of any court or regulatory, administrative or governmental agency, body or authority or arbitrator having or asserting jurisdiction over the Sub-Advisor or its properties, and which would have, in the case of clause (B), (C) or (D) of this paragraph (v), a material adverse effect upon the performance by the Sub-Advisor of its duties under this Agreement.


(vii)	The Sub-Advisor is, in all material respects, in compliance with all applicable material laws, ordinances, rules, regulations, and requirements of governmental authorities except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.


(viii)	The Sub-Advisor is registered as an investment adviser under the Investment Advisers Act of 1940, as amended.


(ix)	The Sub-Advisor acknowledges receipt of, and has read and is familiar with the provisions of, each of the documents delivered by the Collateral Manager to the Sub-Advisor pursuant to Section 5(b)(viii) hereof.


(b)	The Collateral Manager represents and warrants to the Sub-Advisor as of the Closing Date as follows:

(i)

The Collateral Manager has been duly incorporated and is validly existing under the laws of Delaware, has the full power and authority to own its assets and to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires, or the performance of its duties under this Agreement would require, such qualification, except for failures to be so qualified, authorized or licensed would have a material adverse effect on its ability to perform its duties under this Agreement, the Collateral Management Agreement or the Indenture.


(ii)	The Collateral Manager has full corporate power and authority to execute, deliver and perform its duties under this Agreement, the Collateral Management Agreement and the Indenture.

(iii)

There is not pending or, to the Collateral Manager’s knowledge, threatened, any action, suit or proceeding before or by any court or other governmental or self-regulatory authority to which the Collateral Manager is a party which might reasonably be expected to result in any material adverse effect on its ability to perform its duties under this Agreement, the Collateral Management Agreement or the Indenture.

(iv)


(v)	No consent, approval, authorization or order of or declaration or filing with any government, governmental instrumentality or court or other person is required for the performance by the Collateral Manager of its duties hereunder, except such as have been duly made or obtained.

(vi)

Neither the execution and delivery of this Agreement nor the fulfillment of the terms hereof conflicts with or results in a breach or violation of any of the material terms or provisions of or constitutes a material default under (A) the Collateral Manager’s certificate of incorporation, bylaws or other constituent documents, (B) the terms of any indenture, contract, lease, mortgage, deed of trust, note, agreement or other evidence of indebtedness or other agreement, obligation, condition, covenant or instrument to which the Collateral Manager is a party or is bound, (C) any statute applicable to the Collateral Manager, or (D) any law, decree, order, rule or regulation applicable to the Collateral Manager of any court or regulatory, administrative or governmental agency, body or authority or arbitrator having or asserting jurisdiction over the Collateral Manager or its properties, and which would have, in the case of clause (C) or (D) of this paragraph (v), would have a material adverse effect upon the performance by the Collateral Manager of its duties under this Agreement.


(vii)	The Collateral Manager is, in all material respects, in compliance with all applicable material laws, ordinances, rules, regulations, and requirements of governmental authorities except where the necessity of compliance therewith is contested in good faith by appropriate proceedings.


(viii)	The Collateral Manager has heretofore delivered to the Sub-Advisor true and complete copies of the Collateral Management Agreement and the Indenture.


(ix)	In accordance with the terms of the Collateral Management Agreement, the delegation of the Collateral Manager’s obligations and duties hereunder shall not relieve it from any liability under the Collateral Management Agreement.

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

7. Limitations on the Employment of the Sub-Advisor.

(a) The services of the Sub-Advisor to the Collateral Manager are not exclusive, and the Sub-Advisor may engage in any other business or render similar or different services to others including, without limitation, the direct or indirect sponsorship or management of other investment-based accounts or commingled pools of capital, however structured, having investment objectives similar to those of the Issuer, so long as its services to the Collateral Manager hereunder are not impaired thereby. Moreover, nothing in this Agreement shall limit or restrict the right of any manager, partner, officer or employee of the Sub-Advisor to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature to the Issuer, or to receive any fees or compensation in connection therewith.

(b) So long as this Agreement or any extension, renewal or amendment of this Agreement remains in effect, the Sub-Advisor shall be the only collateral management sub-advisor for the Collateral Manager. The Sub-Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood that directors, officers, employees, members and managers of the Collateral Manager are or may become interested in the Sub-Advisor and its Affiliates as directors, officers, employees, partners, stockholders, members, managers or otherwise, and that the Sub-Advisor and directors, officers, employees, partners, stockholders, members and managers of the Adviser and its Affiliates are or may become similarly interested in the Collateral Manager as members or otherwise.

8. Responsibility of Dual Directors, Officers and/or Employees. If any person who is a director, manager, partner, member, officer or employee of the Sub-Advisor is or becomes a director, manager, member, officer and/or employee of the Collateral Manager and acts as such in any business of the Collateral Manager, then such director, manager, partner, officer and/or employee of the Sub-Advisor shall be deemed to be acting in such capacity solely for the Collateral Manager, and not

as a director, manager, partner, officer or employee of the Sub-Advisor or under the control or direction of the Sub-Advisor, even if paid by the Sub-Advisor.

9. Liability of Sub-Advisor; Indemnification.

(a) The Sub-Advisor assumes no responsibility under this Agreement other than to render the services called for hereunder to the Collateral Manager in good faith. The Sub-Advisor shall not be responsible for any action or inaction of the Collateral Manager in declining to follow any advice, recommendation, or direction of the Sub-Advisor. The Sub-Advisor shall have no liability to the Collateral Manager, the Issuer or any other Person for any act, omission, error of judgment, mistake of law, or for any claim, loss, liability, damage, judgment, settlement, cost or other expense (including attorney’s fees and expenses) arising out of or with respect to any investment, or for any other act or omission in the performance of its obligations hereunder, except for any liability to which it would be subject by reason of willful misfeasance, gross negligence in performance, or reckless disregard, of its obligations hereunder. The Sub-Advisor shall not be liable for any consequential, special, punitive, exemplary or treble damages or lost profits hereunder.

(b) The Collateral Manager shall reimburse, indemnify and hold harmless the directors, managers, members, officers and employees of the Sub-Advisor and any of its Affiliates from any and all actual and reasonable out-of-pocket expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees and expenses), as are incurred in investigating, preparing, pursuing or defending any Proceeding or investigation with respect to any pending or threatened litigation caused by, or arising out of or in connection with, any acts or omissions of the Sub-Advisor, its directors, managers, members, officers, stockholders, agents and employees made in good faith and in the performance of the Sub-Advisor’s duties under this Agreement except to the extent resulting from such person’s bad faith, willful misfeasance, gross negligence or reckless disregard of its duties hereunder. The Sub-Advisor, its directors, managers, members, officers, stockholders, agents and employees may consult with counsel and accountants with respect to the affairs of the Collateral Manager and shall be fully protected and justified, to the extent allowed by law, in acting, or failing to act, if such action or failure to act is taken or made in good faith and is in accordance with the advice or opinion of such counsel or accountants if such counsel or accountants were selected with reasonable care.

10. Effectiveness, Duration and Termination of Agreement. This Agreement shall become effective as of the first date above written. This Agreement shall remain in effect until the earlier of (a) 30 days following the Collateral Manager’s written notice to the Sub-Advisor terminating this Agreement, (b) the termination of the Collateral Management Agreement or (c) the effective date of the resignation or removal of the Collateral Manager as “Collateral Manager” under the Collateral Management Agreement. No assignment of this Agreement shall be made by the Sub-Advisor unless (i) the Collateral Manager has notified Moody’s and directed the Trustee to provide notice to each registered Holder, (ii) the Issuer and a Majority of the Controlling Class has consented thereto in writing and (iii) a Majority of the Subordinated Notes has not objected thereto; provided that, any such assignment to an Affiliate shall comply with the requirements of Section 13(b) of the

Collateral Management Agreement. No assignment of this Agreement shall be made by the Collateral Manager. The Sub-Advisor shall not delegate its duties or responsibilities under this Agreement unless (i) the Collateral Manager has notified Moody’s and directed the Trustee to provide notice to each registered Holder, (ii) the Issuer and a Majority of the Controlling Class has consented thereto in writing and (iii) a Majority of the Subordinated Notes has not objected thereto; provided, further, that (x) any such delegation to an Affiliate shall comply with the requirements of Section 13(b) of the Collateral Management Agreement and (y) the Sub-Advisor shall not be relieved of its duties or responsibilities hereunder in connection with any such delegation. The parties hereto acknowledge and agree to the consequences under the Collateral Management Agreement of a termination of this Agreement, including a potential "Cause" event under the Collateral Management Agreement.

11. Inspection of Property, Books and Records; Audits; Etc. The Sub-Advisor will maintain or cause to be maintained appropriate books of account and records relating to its services performed hereunder, and, to the extent such books of record and accounts are different from those prepared by the Collateral Manager pursuant to the terms of the Collateral Management Agreement, such books of account and records shall be accessible for inspection, at the request of the Collateral Manager, by representatives of the Issuer, the Trustee and the Independent accountants appointed by the Collateral Manager on behalf of the Issuer pursuant to Article X of the Indenture at any time during normal business hours and upon not less than three Business Days’ prior notice.

12. Notices.

(a) Unless expressly provided otherwise herein, all notices, demands, certificates, requests, directions and communications hereunder shall be in writing and shall be effective (a) upon receipt when sent through the U.S. mails, registered or certified mail, return receipt requested, postage prepaid, with such receipt to be effective the date of delivery indicated on the return receipt, (b) one Business Day after delivery to any overnight courier, (c) on the date personally delivered to a Responsible Officer of the party to which sent, (d) on the date transmitted by legible facsimile transmission with a confirmation of receipt, or (e) upon receipt when transmitted by electronic mail transmission, in all cases addressed to the recipient at such recipient’s address on the signature page hereof.

(b) Unless the parties hereto otherwise agree, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, if any such notice or other communication is not sent or posted during normal business hours, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day; provided, further, that if in any instance the intended recipient declines or opts out of the receipt acknowledgment, then such notice or communication shall be deemed to have been received

on the Business Day sent or posted, if sent or posted during normal business hours on such Business Day, or if otherwise, at the opening of business on the next Business Day.

13. Amendments. This Agreement may be amended only (i) by the mutual written consent of the parties hereto and (ii) in accordance with the same procedures and requirements for an amendment as set forth in Section 20 of the Collateral Management Agreement.

14. Entire Agreement; Governing Law. This Agreement contains the entire agreement of the parties hereto and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW); provided that, nothing herein shall be construed in a manner that is inconsistent with the Advisers Act to the extent the Advisers Act is applicable.

15. No Waiver. The failure of either party to enforce at any time for any period the provisions of or any rights deriving from this Agreement shall not be construed to be a waiver of such provisions or rights or the right of such party thereafter to enforce such provisions, and no waiver shall be binding unless executed in writing by all parties hereto.

16. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

17. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

18. Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original instrument and all of which taken together shall constitute one and the same agreement.

19. Beneficiaries of this Agreement. Nothing in this Agreement, expressed or implied, shall give to any Person, other than the parties hereto and their successors and permitted assigns hereunder, any benefit or any legal or equitable right, remedy or claim under this Agreement; provided that the parties hereto agree that the Trustee on behalf of the Secured Parties shall be a third party beneficiary of this Agreement to the extent that the rights of the Trustee on behalf of the Secured Parties under Section 28 of the Collateral Management Agreement extend to this Agreement.

[The remainder of this page intentionally left blank]

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

FIFTH STREET SENIOR FLOATING RATE CORP.

By: _______________________

Name: Ivelin M. Dimitrov
Title: Chief Executive Officer


Address:	Fifth Street Senior Floating Rate Corp. 777 W. Putnam Ave. 3^rd Floor Greenwich, CT 06830 Attention: Ivelin Dimitrov Telephone No.: 203-681-3142 Facsimile No.: 203-681-3879 Email: ivelin@fifthstreetfinance.com

FIFTH STREET MANAGEMENT LLC

By: _______________________

Name: Ivelin M. Dimitrov
Title: Chief Investment Officer

Address: Fifth Street Management LLC

777 W. Putnam Ave. 3^rd Floor
Greenwich, CT 06830
Attention: Ivelin Dimitrov
Telephone No.: 203-681-3142
Facsimile No.: 203-681-3879
Email: ivelin@fifthstreetfinance.com

Exhibit 31.1

I, Ivelin M. Dimitrov, Chief Executive Officer of Fifth Street Senior Floating Rate Corp., certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2015 of Fifth Street Senior Floating Rate Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 10^th day of August, 2015.




By:		/s/ Ivelin M. Dimitrov
		Ivelin M. Dimitrov Chief Executive Officer

Exhibit 31.2

I, Steven M. Noreika, Chief Financial Officer of Fifth Street Senior Floating Rate Corp., certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2015 of Fifth Street Senior Floating Rate Corp.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 10^th day of August, 2015.




By:		/s/ Steven M. Noreika
		Steven M. Noreika Chief Financial Officer

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

In connection with the quarterly report on Form 10-Q for the quarterly period ended June 30, 2015 (the “Report”) of Fifth Street Senior Floating Rate Corp. (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, Ivelin M. Dimitrov, the Chief Executive Officer of the Registrant, hereby certify, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Ivelin M. Dimitrov

Name: Ivelin M. Dimitrov

Date: August 10, 2015

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

In connection with the quarterly report on Form 10-Q for the quarterly period ended June 30, 2015 (the “Report”) of Fifth Street Senior Floating Rate Corp . (the “Registrant”), as filed with the Securities and Exchange Commission on the date hereof, I, Steven M. Noreika, the Chief Financial Officer of the Registrant, hereby certify, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Steven M. Noreika

Name: Steven M. Noreika

Date: August 10, 2015

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