N-2/A

As filed with the Securities and Exchange Commission on December 20, 2013

Securities Act File No. 333-192370

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-2

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

x    Pre-Effective Amendment No. 1

¨    Post-Effective Amendment No.  

CM FINANCE INC

(Exact Name of Registrant as Specified in Charter)

399 Park Avenue, 39th Floor

New York, New York 10022

(Address of Principal Executive Offices)

(212) 257-5199

(Registrant’s Telephone Number, Including Area Code)

Michael C. Mauer

Chief Executive Officer

CM Finance Inc

399 Park Avenue, 39th Floor

New York, New York 10022

(Name and Address of Agent for Service)

COPIES TO:

Steven B. Boehm, Esq. Stephani M. Hildebrandt, Esq.
Sutherland Asbill & Brennan LLP 700 Sixth Street, NW Suite 700 Washington, DC 20001
Tel: (202) 383-0100 Fax: (202) 637-3593 James R. Tanenbaum, Esq.
Anna T. Pinedo, Esq.
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Tel: (212) 468-8000 Fax: (212) 468-7900

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

If any of the securities being registered on this form are offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box.    x

It is proposed that this filing will become effective (check appropriate box):

¨    when declared effective pursuant to section 8(c).

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

Title of Securities Being Registered	Proposed Maximum Aggregate Offering Price (1)(2)(3)	Amount of Registration Fee(4)
Common Stock, $0.001 par value per share	$115,000,000	$14,812 (5)

(1) Includes the underwriters’ option to purchase additional shares.

(2) Estimated pursuant to Rule 457(o) under the Securities Act of 1933 solely for the purpose of determining the registration fee.

(3) This Registration Statement also covers an indeterminate number of shares of the registered Common Stock that may be reoffered and resold on an ongoing basis after their initial sale in market-making transactions by an entity that may be deemed an affiliate of the Registrant.

(4) Pursuant to Rule 457(q) under the Securities Act of 1933, no filing fee is required for the registration of an indeterminate amount of shares of Common Stock to be offered in market-making transactions by an entity that may be deemed an affiliate of the Registrant as described in Note (3) above.

(5) Previously paid.

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

EXPLANATORY NOTE

This Registration Statement contains a prospectus relating to our initial public offering of shares of our common stock, par value $0.001. In addition, this Registration Statement contains a prospectus relating to sales of our common stock, par value $0.001, in connection with certain market-making and other transactions that may be effected by Keefe, Bruyette & Woods, Inc., which may be deemed to be an affiliate of CM Finance Inc, and any other broker-dealer affiliate in the secondary market following the completion of this offering. The complete prospectus relating to this initial public offering of common stock (the “Offering Prospectus”) follows immediately after this Explanatory Note. Following the Offering Prospectus are certain pages of the prospectus relating solely to such secondary market market-making transactions (referred to by us for convenience purposes as the “Market-Making Prospectus”), including an alternate front cover page and alternate sections entitled “Use of Proceeds” and “Plan of Distribution.” Each of such alternate pages has been marked “Alternate Page for Market-Making Prospectus.” A complete version of each of the Offering Prospectus and the Market-Making Prospectus will be filed with the Securities and Exchange Commission in accordance with Rule 497 under the Securities Act.

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

PRELIMINARY PROSPECTUS

Subject to Completion dated     , 2014

6,666,666 Shares

CM Finance Inc

Common Stock

We are a specialty finance company that invests primarily in the debt of U.S. middle-market companies. We seek to invest primarily in middle-market companies that have annual revenues of at least $50 million and earnings before interest, taxes, depreciation and amortization (“EBITDA”) of at least $20 million. Our investment objective is to maximize the total return to stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. The companies in which we invest typically are highly leveraged, and, in most cases, our investments in such companies are not rated by national rating agencies. If such investments were rated, we believe that they would likely receive a rating below investment grade (i.e., below BBB or Baa), which are often referred to as “junk.”

We were formed in February 2012 and commenced operations in March 2012 as CM Finance LLC, a Maryland limited liability company. Immediately prior to the pricing of this offering, CM Finance LLC will be merged with and into CM Finance Inc, a Maryland corporation that is an externally managed, non-diversified closed-end management investment company that intends to file an election to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. We also intend to elect to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code, or the Code, for U.S. federal income tax purposes. Upon our election to be regulated as a BDC, we will be externally managed by CM Investment Partners LLC, which will also provide the administrative services necessary for us to operate.

This is an initial public offering of our shares of common stock. We are selling all of the shares of common stock offered by this prospectus.

Our shares of common stock have no history of public trading. We have applied to have our common stock listed on The Nasdaq Global Market under the symbol “CMFN.”

We currently expect that the initial public offering price per share of our common stock will be $15.00 per share. Assuming an initial offering price per share of $15.00, purchasers of shares of common stock in this offering will experience immediate dilution of approximately $0.33 per share. See “Dilution.” Shares of closed-end investment companies, including BDCs, frequently trade at a discount to their net asset values. If our shares trade at a discount to our net asset value, it will likely increase the risk of loss for purchasers in this offering.

We are an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act of 2012, or the “JOBS Act.”

Investing in our common stock involves an extremely high degree of risk and should be considered highly speculative. Before buying any shares, you should read the discussion of the material risks of investing in our common stock in “Risk Factors” beginning on page 24 of this prospectus.

The Securities and Exchange Commission has not approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This prospectus contains important information you should know before investing in our common stock. Please read it before you invest and keep it for future reference. Upon completion of this offering, we will file annual, quarterly and current reports, proxy statements and other information about us with the SEC. The SEC also maintains a website at http://www.sec.gov that contains such information. This information will also be available free of charge by contacting us at 399 Park Avenue, 39th Floor, New York, New York 10022, Attention: Investor Relations, or by calling us collect at (212) 257-5199 or on our website at www.cmfn-inc.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider that information to be part of this prospectus.

	Per share		Total
Public offering price	$	15.00	$	100,000,000
Sales load (1)	$	0.90	$	6,000,000
Proceeds to us, before expenses (2)(3)	$	14.55	$	96,999,990

(1) The sales load includes underwriting discounts and commissions. CM Investment Partners LLC has agreed to pay to the underwriters a portion of the sales load in an amount equal to $3.0 million, or $0.45 per share. We are not obligated to repay the portion of the sales load paid by CM Investment Partners LLC. See “Underwriting.”

(2) We estimate that we will incur offering expenses of approximately $1,200,000, or approximately $0.18 per share, in connection with this offering.

(3) The Adviser has agreed to pay any offering expenses incurred by the Company that exceed $1,200,000 without recourse against or reimbursement by us. See “Underwriting.”

The underwriters may purchase up to an additional 1,000,000 shares from us at the public offering price, less the sales load, within 30 days from the date of this prospectus to cover over-allotments, if any. If the underwriters exercise this option in full, the total sales load will be $6.9 million, of which CM Investment Partners LLC has agreed to pay $3.45 million or $0.45 per share, resulting in total proceeds, before expenses, of $111.6 million to us.

The underwriters will reserve up to 333,333 shares from this offering for sale, directly or indirectly, to our directors and executive officers, and to certain other parties affiliated with us.

The underwriters expect to deliver the shares to purchasers on or before                 , 2014.

RAYMOND JAMES KEEFE, BRUYETTE & WOODS A Stifel Company

The date of this prospectus is                 , 2014

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
THE OFFERING	14
FEES AND EXPENSES	22
RISK FACTORS	24
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	53
USE OF PROCEEDS	55
DISTRIBUTIONS	56
CAPITALIZATION	58
DILUTION	59
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	61
THE COMPANY	76
PORTFOLIO COMPANIES	89
SENIOR SECURITIES	92
MANAGEMENT	93
MANAGEMENT AGREEMENTS	102
RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS	111
CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS	114
DETERMINATION OF NET ASSET VALUE	116
DIVIDEND REINVESTMENT PLAN	118
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	120
DESCRIPTION OF OUR CAPITAL STOCK	129
REGULATION	137
SHARES ELIGIBLE FOR FUTURE SALE	142
CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR	144
BROKERAGE ALLOCATION AND OTHER PRACTICES	144
UNDERWRITING	145
LEGAL MATTERS	149
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	149
AVAILABLE INFORMATION	150
INDEX TO FINANCIAL STATEMENTS	F-1

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You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations, cash flows and prospects may have changed since that date. We will update these documents to reflect material changes only as required by law.

Through and including                     , 2014 (25 days after the date of this prospectus), U.S. federal securities laws may require all dealers that effect transactions in our common stock, whether or not participating in this offering, to deliver a prospectus. This is in addition to the dealers’ obligations to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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PROSPECTUS SUMMARY

This summary highlights some of the information in this prospectus. It is not complete and may not contain all of the information that you may want to consider. You should read the more detailed information set forth under “Risk Factors” and the other information included in this prospectus carefully.

We were formed in February 2012 and commenced operations in March 2012 as CM Finance LLC, a Maryland limited liability company. Immediately prior to the pricing of this offering and prior to the time we file our election to be regulated as a BDC, CM Finance LLC will be merged with and into CM Finance Inc, a Maryland corporation (the “CM Finance Merger”), that is an externally managed, non-diversified closed-end management investment company that intends to elect to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). Except as otherwise indicated, the terms “we,” “us,” “our” and “CM Finance” refer to CM Finance LLC prior to the CM Finance Merger and CM Finance Inc after the CM Finance Merger; and “CM Investment Partners” and the “Adviser” refer to our investment adviser and administrator, CM Investment Partners LLC.

When reading this prospectus, it is important to note that the historical financial statements and other historical financial information included herein are those of CM Finance LLC. Prior to the CM Finance Merger and this offering, CM Finance LLC did not pay any advisory fees and was not regulated as a BDC under the 1940 Act. Therefore, CM Finance LLC has not been subject to certain restrictions imposed by the 1940 Act on BDCs prior to the CM Finance Merger and the consummation of this offering. If CM Finance LLC had been regulated as a BDC under the 1940 Act, CM Finance LLC’s performance may have been adversely affected. In addition, prior to our election to be regulated as a BDC, we have been externally managed by CM Investment Partners, LP. Although CM Investment Partners, LP was led by Messrs. Mauer and Jansen, the remaining investment team of CM Investment Partners, LP was composed of different investment professionals than the current investment team of the Adviser, which may result in materially different investment performance.

Unless otherwise indicated, all information assumes that the underwriters’ over-allotment option is not exercised.

We define “middle-market companies” generally as those companies that have an enterprise value, which represents the aggregate of debt value and equity value of the entity, of less than $750 million.

CM Finance

We are a specialty finance company that invests primarily in the debt of U.S. middle-market companies. We are externally managed by CM Investment Partners LLC. The Adviser is led by Michael C. Mauer and Christopher E. Jansen, who together have over 40 years of experience in the leveraged debt markets. Our investment objective is to maximize total return to stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns.

We seek to invest primarily in middle-market companies that have annual revenues of at least $50 million and EBITDA of at least $20 million. We focus on companies with leading market positions, significant asset or franchise values, strong free cash flow and experienced senior management teams, with emphasis on companies with high-quality sponsors. Our investments

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will typically range in size from $5 million to $25 million. We expect that our portfolio companies will use our capital for organic growth, acquisitions, market or product expansion, refinancings, and/or recapitalizations. We invest, and intend to continue to invest, in unitranche loans and standalone second and first lien loans, with an emphasis on floating rate debt. Unitranche loans are loans structured as first lien loans with certain characteristics of mezzanine loan risk in one security. We will also selectively invest in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interests as part of a broader investment relationship.

We strive to maintain a strong focus on credit quality, investment discipline and investment selectivity. We believe that investing in the debt of private middle-market companies generally provides a more attractive relative value proposition than investing in broadly syndicated debt due to the conservative capital structures and superior default and loss characteristics typically associated with middle-market companies. We believe that, because private middle-market companies have limited access to capital providers, debt investments in these companies typically carry above-market interest rates and include more favorable protections, resulting in attractive risk-adjusted returns across credit cycles while better preserving capital. The companies in which we invest typically are highly leveraged, and, in most cases, our investments in such companies are not rated by national rating agencies. If such investments were rated, we believe that they would likely receive a rating below investment grade (i.e., below BBB or Baa), which are often referred to as “junk.”

The Adviser’s investment team is led by Messrs. Mauer and Jansen. Messrs. Mauer and Jansen are supported by 17 additional investment professionals, which, together with Messrs. Mauer and Jansen, we refer to as the “Investment Team.” The members of the Investment Team have over 200 combined years of structuring customized debt solutions for middle-market companies, which we believe will enable us to generate favorable returns across credit cycles with an emphasis on preserving capital. The members of the Investment Team have extensive networks for sourcing investment opportunities through direct corporate relationships and relationships with private equity firms, restructuring advisors, law firms, boutique advisory firms and distressed/specialty lenders. The members of the Investment Team also have extensive experience across various industries, including aviation, cable, defense, healthcare, media, oil and gas, power, retail, telecommunications, trucking and asset-backed special situations. In addition, Mr. Jansen has extensive experience restructuring specific debt investments as a portfolio manager, including while at Stanfield Capital Partners, and Mr. Mauer has considerable managerial experience, including having led a restructuring and asset-based lending group at Citigroup Inc. Messrs. Mauer and Jansen have developed an investment process for reviewing lending opportunities, structuring transactions and monitoring investments throughout multiple credit cycles. As a result of the relationships and experience of the members of the Investment Team and the leadership of Messrs. Mauer and Jansen, we believe we will be able to achieve appropriate risk-adjusted returns by investing in companies that have restructured but do not have sufficient track records to receive traditional lending terms from a commercial bank or the broadly syndicated leveraged finance market.

As of September 30, 2013, our portfolio consisted of debt and equity investments in 12 portfolio companies with a fair value of $132.9 million. As of September 30, 2013, our portfolio consisted of 54.8% first lien investments, 44.6% second lien investments and 0.6% warrant positions, and had a weighted average annualized yield of approximately 11.06%. The weighted average yield was computed using the effective interest rates for all of our debt investments at fair value, plus the yield to maturity from September 30, 2013 of all of our debt investments, including our unfunded obligations as if our unfunded obligations were fully funded and is weighted based on each respective investment’s par amount. See “Portfolio Companies.”

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The industry composition of our portfolio at fair value at September 30, 2013 was as follows:

Industry	Percentage of Total Investments
Airlines		8.14	%
Automobiles and Components		10.56
Commercial Services		3.66
Diversified Financial Services		6.32
Healthcare-Products/Services		15.05
Oil and Gas		21.35
Pipelines		7.62
Telecommunications		18.24
Trucking and Leasing		9.06
Total		100.00	%

We have, through CM Finance SPV Ltd. (“CM SPV”), our wholly owned subsidiary, a financing facility (the “Financing Facility”) with UBS AG, London Branch (together with its affiliates, “UBS”). The Financing Facility includes a $76.5 million term securitized financing facility (the “Term Financing”), which expires on May 22, 2016, and a $50.0 million revolving financing (the “Revolving Financing”), which expires on December 4, 2015. The Financing Facility is collateralized by a portion of the debt investments in our portfolio (the “Assets”). We pay interest on the face amount of the Term Financing monthly at a rate of one-month LIBOR plus 2.85% per annum. The Revolving Financing bears interest at a rate of (a) 2.10% per annum from December 4, 2013 through December 4, 2014 and (b) 1.60% per annum from December 5, 2014 through the term of the Revolving Financing. With respect to undrawn amounts, we will pay interest monthly on the daily average of amounts that are not drawn on the Revolving Financing at a rate of 0.50%. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.”

Recent Developments

On December 17, 2013, we entered into an arrangement (the “Stifel Arrangement”) with Stifel Venture Corp. (“Stifel”), a wholly owned subsidiary of Stifel Financial Corp., pursuant to which Stifel made a capital commitment to us in an amount of up to $40.0 million. We intend to call $32.7 million of Stifel’s capital commitment for purposes of repurchasing $32.7 million of the interests of the Cyrus Funds (as defined herein) in us at a per share price of $15.00, equal to the assumed initial public offering price per share, immediately after the CM Finance Merger and prior to our election to be regulated as a BDC and the pricing of this offering. Stifel also owns 20% of the Adviser. See “—Formation Transactions.”

Since September 30, 2013, we made four new investments totaling $56.0 million, one of which was an addition to an existing investment, which increased our investment portfolio to $189.3 million and the average investment per company to $12.6 million as follows:

Ÿ $12.0 million investment in a second lien loan of CT Technologies Intermediate Holdings, Inc.;

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Ÿ $20.0 million additional investment in a first lien, fully funded revolving credit of Endeavour International Corp.

Ÿ $9.0 million investment in a second lien term loan of Bennu Oil & Gas, LLC.; and

Ÿ $15.0 million investment in a second lien term loan of TNT Crane & Rigging.

In addition, we sold our $12.3 million investment in YRC Worldwide Inc. Letter of Credit facility. This investment was unfunded.

On December 4, 2013, we amended the terms of the Financing Facility to add the $50.0 million Revolving Financing, which expires on December 4, 2015. The Revolving Financing bears interest at a rate of (a) 2.10% per annum from December 4, 2013 through December 4, 2014 and (b) 1.60% per annum from December 5, 2014 through the term of the Revolving Financing. With respect to undrawn amounts, we will pay interest monthly on the daily average of amounts that are not drawn on the Revolving Financing at a rate of 0.50%.

The Adviser

Upon our election to be regulated as a BDC, CM Investment Partners LLC will become our external investment adviser. Prior to our election to be regulated as a BDC, CM Investment Partners, LP has served as our investment adviser. The Adviser is responsible for sourcing investment opportunities, conducting industry research, performing diligence on potential investments, structuring our investments and monitoring our portfolio companies on an ongoing basis. The Adviser is led by Mr. Mauer, our Chief Executive Officer, and the Managing Member and Co-Chief Investment Officer of the Adviser, and Mr. Jansen, our President and Secretary, and the Co-Chief Investment Officer of the Adviser. Mr. Mauer was formerly Global Co-Head of Leveraged Finance and Global Co-Head of Fixed Income Currency and Commodity Distribution at Citigroup Inc. and a senior member of its credit committee responsible for all underwriting and principal commitments of leveraged finance capital worldwide. Mr. Jansen was a founding Managing Partner and Senior Portfolio Manager for Stanfield Capital Partners and had a leading role in planning its strategic direction. At Stanfield, Mr. Jansen was responsible for the management of 15 different portfolios aggregating in excess of $7 billion in assets consisting of large corporate loans, middle-market loans, second lien loans, high yield bonds and structured finance securities. See also “Management—Biographical Information.”

The Adviser’s Investment Team is led by Messrs. Mauer and Jansen and includes 17 additional investment professionals of whom 11 support the Adviser pursuant to a services agreement (the “Services Agreement”) with Cyrus Capital Partners, L.P. (“Cyrus Capital”), a separately registered investment adviser that serves as the investment adviser to various private investment funds. The members of the Investment Team have over 200 combined years of structuring customized debt solutions for middle-market companies, which we believe will enable us to generate favorable returns across credit cycles with an emphasis on preserving capital. The members of the Investment Team are highly qualified investment professionals who have a demonstrated ability to identify, source, analyze, invest in and monitor investments in U.S. middle-market companies. We believe the members of the Investment Team share a common investment philosophy built on a framework of rigorous business assessment, extensive due diligence and disciplined risk valuation methodology.

Upon the completion of the CM Finance Merger, we will enter into an investment advisory and management agreement (the “Investment Advisory Agreement”) with CM Investment Partners

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LLC, as our investment adviser. Under the Investment Advisory Agreement, we will pay the Adviser a management fee equal to 1.75% of our gross assets, payable in arrears on a quarterly basis. In addition, pursuant to the Investment Advisory Agreement, we will pay the Adviser an Incentive Fee equal to 20.0% of pre-incentive fee net investment income, subject to an annualized hurdle rate of 8.0% with a “catch up” fee for returns between the annualized 8.0% hurdle and 10.0% as well as 20.0% of aggregate net capital gains. For the period commencing upon the consummation of this offering and ending December 31, 2014, the Adviser has agreed to waive its fees (base management and incentive fee), without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support a minimum dividend payment on shares of common stock outstanding on the relevant dividend payment dates of         % (to be paid on a quarterly basis). For the periods January 1, 2015 to December 31, 2015 and January 1, 2016 to December 31, 2016, the Adviser has agreed to waive its incentive fees, without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support minimum dividend payments on shares of common stock outstanding on the relevant dividend payment dates of         % and         %, respectively (to be paid on a quarterly basis). The annual dividend yield will be based on our initial public offering price per share. Net investment income is defined as Generally Accepted Accounting Principles (“GAAP”) net income before net realized and unrealized gains (losses). See “Management Agreements—Management Fees.”

Under an administration agreement (the “Administration Agreement”) with the Adviser the Adviser will provide us with our interim chief financial officer, our chief compliance officer, other accounting and back-office professionals, equipment and clerical, bookkeeping, recordkeeping and other administrative services at such facilities. The Adviser has retained the services of accounting and back office professionals through the Services Agreement with Cyrus Capital to assist the Adviser in fulfilling certain of its obligations to us under the Administration Agreement. See “Management Agreements—Administration Agreement” and “Related Party Transactions and Certain Relationships—Services Agreement.” Brennan McCaw, our interim Chief Financial Officer, and the other accounting and back-office professionals are Cyrus Capital employees who perform their duties on behalf of the Adviser pursuant to the Services Agreement with Cyrus Capital. Following the completion of this offering, the Adviser intends to hire a chief financial officer, who will also serve as our chief financial officer. We also expect that the Adviser will hire additional investment and other personnel as necessary, to support our growth and reduce the Adviser’s use of Cyrus Capital’s employees over time.

Market Opportunity

We believe that the current investment environment presents a compelling case for investing in secured debt (including unitranche debt and standalone second and first lien loans) and unsecured debt (including mezzanine/structured equity) of middle-market companies. The following factors represent the key drivers of our focus on this attractive market segment:

Ÿ Reduced Availability of Capital for Middle-Market Companies. We believe there are fewer providers of financing and less capital available for middle-market companies compared to prior to the recent economic downturn. We believe that, as a result of that downturn:

Ÿ many financing providers have chosen to focus on large, liquid corporate loans and syndicated capital markets transactions rather than lending to middle-market businesses;

Ÿ recent regulatory changes, including adoption of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, and the introduction of new

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international capital and liquidity requirements under the 2012 Basel III Accords, or Basel III, have caused banks to curtail lending to middle-market companies;

Ÿ hedge funds and collateralized loan obligation managers are less likely to pursue investment opportunities in our target market as a result of reduced availability of funding for new investments; and

Ÿ consolidation of regional banks into money center banks has reduced their focus on middle-market lending.

As a result, we believe that less competition will facilitate higher quality deal flow and allow for greater selectivity throughout the investment process.

Ÿ Robust Demand for Debt Capital. According to PitchBook, a market research firm, private equity firms raised an estimated $1.1 trillion of equity commitments from 2006 to 2012, with approximately $348.2 billion of this capital available for investment as of the end of 2012. In addition, private equity deal flow continues to improve since the 2007-2008 recession, totaling $345 billion in 2012 according to PitchBook. Private equity firms have also refocused their attention towards lower middle-market and middle-market deals (defined for this purpose as generally those companies with an enterprise value of $750 million or less). We expect the large amount of uninvested capital commitments will drive buyout activity over the next several years, which should, in turn, create lending opportunities for us. In addition to increased buyout activity, a high volume of senior secured and high yield debt originated from 2004 through 2007 will need refinancing in the near term and, accordingly, we believe that new financing opportunities will increase as many companies seek to refinance this indebtedness.

Ÿ Attractive Deal Pricing and Structures. We believe that, in general, middle-market debt investments are priced more attractively to lenders than larger, more liquid, public debt financings, due to the more limited universe of lenders as well as the highly negotiated nature of these financings. Middle-market transactions tend to offer stronger covenant packages, higher interest rates, lower leverage levels and better call protection compared to larger financings. In addition, middle-market loans typically offer other investor protections, such as default penalties, lien protection, change of control provisions and information rights for lenders.

Ÿ Specialized Lending Requirements. We believe that several factors render many U.S. financial institutions ill-suited to lend to U.S. middle-market companies. For example, based on the Investment Team’s experience, lending to private U.S. middle-market companies is generally more labor-intensive than lending to larger companies due to the smaller size of each investment and the fragmented nature of information for such companies. Lending to smaller capitalization companies requires due diligence and underwriting practices consistent with the demands and economic limitations of the middle-market and may also require more extensive ongoing monitoring by the lender. As a result, middle-market companies historically have been served by a limited segment of the lending community.

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Competitive Strengths

We believe that the Adviser’s disciplined approach to origination, portfolio construction and risk management should allow us to achieve favorable risk-adjusted returns while preserving our capital. We believe that the following competitive strengths will provide an attractive investment opportunity for investors:

Ÿ Large and Experienced Team with Substantial Resources. The Adviser and its Investment Team is led by Michael C. Mauer and Christopher E. Jansen, who each has over 20 years investing in, providing corporate finance services to, restructuring and consulting with middle-market companies. Messrs. Mauer and Jansen are supported by 17 additional investment professionals, who together have more than 200 combined years of structuring strategic capital for business expansion, refinancings, capital restructuring, post-reorganization financing and servicing the general corporate needs of middle-market companies. We believe that the Investment Team and its resources provide a significant advantage and will contribute to the strength of our business and enhance the quantity and quality of investment opportunities available to us.

Ÿ Capitalize on the Investment Team’s Extensive Relationships with Middle-Market Companies, Private Equity Sponsors and Intermediaries. The members of the Investment Team have extensive networks for sourcing investment opportunities through corporate relationships and relationships with private equity firms, restructuring advisors, law firms, boutique advisory firms and distressed/specialty lenders. We believe that the strength of these relationships in conjunction with the Investment Team’s ability to structure financing solutions for companies that incorporate credit protections at attractive returns will provide us with a competitive advantage in identifying investment opportunities in our target market. In addition, pursuant to our arrangement with Stifel and subject to certain restrictions, Stifel will use its commercially reasonable efforts to present to us the opportunity to review and bid on Stifel Nicolaus & Company, Incorporated-originated leveraged finance and high yield corporate debt opportunities consistent with our investment strategy.

Ÿ Disciplined Underwriting Policies and Rigorous Portfolio Management. Messrs. Mauer and Jansen have an established credit analysis and investment process to analyze investment opportunities thoroughly. This process, followed by the Investment Team, includes structuring loans with appropriate covenants and pricing loans based on our knowledge of the middle market and our rigorous underwriting standards. We focus on capital preservation by extending loans to portfolio companies with assets that we believe will retain sufficient value to repay us even in depressed markets or under liquidation scenarios. Each investment is analyzed from its initial stages by either Mr. Mauer or Mr. Jansen, the Adviser’s Co-Chief Investment Officers, and a senior investment professional of the Investment Team. Every initial investment requires the unanimous approval of the Adviser’s investment committee, consisting of Messrs. Mauer, Jansen and Stephan Kuppenheimer, who will be Stifel’s appointee to our board of directors. See “Prospectus Summary—Formation Transactions.” Every follow-on investment decision in an existing portfolio company and any investment dispositions require approval by at least Messrs. Mauer and Jansen. Under the supervision of Messrs. Mauer and Jansen, the Investment Team also monitor the portfolio for developments on a daily basis, perform credit updates on each investment, review financial performance on at least a quarterly basis, and have regular discussions with the management of portfolio companies. We

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believe the Adviser’s investment and monitoring process and the depth and experience of the Investment Team gives us a competitive advantage in identifying investments and evaluating risks and opportunities throughout the life cycle of an investment.

Ÿ Ability to Structure Investments Creatively. Our Investment Team has the expertise and ability to structure investments across all levels of a company’s capital structure. These individuals have extensive experience in cash flow, asset-based lending, workout situations and investing in distressed debt, which should enable us to take advantage of attractive investments in recently restructured companies. Furthermore, with the additional capital raised in this offering, we believe we will be in a better position to leverage the existing knowledge and relationships that the Investment Team has developed to lead investments that meet our investment criteria. We believe that current market conditions will allow us to structure attractively priced debt investments and may allow us to incorporate other return-enhancing mechanisms such as commitment fees, original issue discounts, early redemption premiums, payment-in-kind, or PIK, interest and certain forms of equity securities.

Investment Strategy

We invest, and intend to continue to invest, in unitranche loans, standalone second and first lien loans, and selectively in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interest as part of an overall relationship. We seek to invest primarily in middle-market companies that have annual revenues of at least $50 million and EBITDA of at least $20 million. Our investments will typically range in size from $5 million to $25 million. We may invest in smaller or larger companies if there is an attractive opportunity, especially when there are dislocations in the capital markets, including the high yield and large syndicated loan markets. During such dislocations, we expect to see more deep value investment opportunities offering prospective returns that are disproportionate to the associated risk profile. We focus on companies with leading market positions, significant asset or franchise values, strong free cash flow and experienced senior management teams, with an emphasis on companies with high-quality sponsors. Our investment objective is to generate both current income and capital appreciation by targeting investment opportunities with favorable risk-adjusted returns.

The Adviser pursues debt investments that offer high cash yields, cash origination fees, and lower leverage levels. The Adviser seeks to structure our debt investments with strong protections, including default penalties, information rights, and affirmative and negative financial covenants, such as lien protection and restrictions concerning change of control. We believe these protections, coupled with the other features of our investments, should allow us to reduce our risk of capital loss and achieve attractive risk-adjusted returns, although there can be no assurance that we will be able to structure our investments to minimize risk of loss and achieve attractive risk-adjusted returns.

The Investment Team will use some or all of the following criteria to evaluate each prospective portfolio company.

Ÿ Established companies with a history of positive operating cash flow. We seek to invest in established companies with sound historical financial performance, operating profitability and significant free cash flow. These companies typically will have proven products and/or services that provide a competitive advantage versus their competitors or new entrants.

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Ÿ Experienced management team with meaningful equity ownership. The Adviser generally requires that our portfolio companies have an experienced management team with meaningful equity ownership and strong corporate governance.

Ÿ Significant invested capital. The Adviser believes that the existence of significant underlying equity value provides important support to our debt investments.

Ÿ Private equity sponsorship. We seek to invest where private equity sponsors have demonstrated capabilities in building enterprise value. In addition, we seek to co-invest with specialty lenders and other financial institutions, including Stifel and Cyrus Capital.

Ÿ Ability to exert meaningful influence. We target, and intend to continue to target, investment opportunities in which we will be a significant investor in the tranche and in which we can add value through active participation in the direction of the company, sometimes through advisory positions.

Ÿ Visible exit strategy. We generally seek to invest in companies that the Adviser believes possess attributes that will provide us with the ability to exit our investments as appropriate

Formation Transactions

We were formed on February 15, 2012 and commenced operations in March 2012. In March 2012, we were originally capitalized with a capital commitment of $50.0 million from funds (the “Cyrus Funds”) managed by Cyrus Capital, which we refer to as our initial private placement. The Cyrus Funds also hold a 38% indirect economic interest, but no voting interest, in the Adviser.

As of September 30, 2013 we had aggregate capital commitments of $110 million by the Cyrus Funds of which $105.3 million, or 95.7%, have been called and used to make investments in accordance with our investment strategy. As of the date of this prospectus, we have called all outstanding capital commitments from the Cyrus Funds, $              million of which, or         %, have been used to make investments in accordance with our investment strategy. See “Control Persons and Principal Stockholders.”

Immediately prior to the pricing of this offering and prior to the time we file our election to be regulated as a BDC, through a series of transactions, CM Finance LLC will be merged with and into CM Finance Inc, a Maryland corporation, leaving CM Finance Inc as the surviving entity. In connection with the CM Finance Merger, we will issue 6.0 million shares of common stock of CM Finance Inc to the Cyrus Funds at a per share price of $15.00, equal to the assumed initial public offering price per share, and approximately $20.0 million in debt (the “Cyrus Funds Debt”) having an aggregate value of $110 million (which represents the Cyrus Funds’ share of our net asset value as of the most recent quarter end for which financial statements have been included in this prospectus, adjusted for earnings, appreciation, depreciation, cash contributions and distributions following such quarter but before the closing of the CM Finance Merger). The Cyrus Funds Debt bears interest at rate of 6.0% per annum and will become due on the fifth anniversary of the closing of the CM Finance Merger. We expect to use a portion of the net proceeds of this offering to repay the Cyrus Funds Debt. The shares of common stock issued to the Cyrus Funds in the CM Finance Merger are not being registered for resale under the registration statement of which this prospectus forms a part.

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On December 17, 2013, we entered into the Stifel Arrangement pursuant to which Stifel made a capital commitment to us in an amount up to $40.0 million at a per share price equal to the per share initial public offering price. We intend to call $32.7 million of Stifel’s capital commitment for purposes of repurchasing $32.7 million of the Cyrus Funds’ interest in us immediately after the CM Finance Merger and prior to our election to be regulated as a BDC and the pricing of this offering. We do not intend to call the remaining portion of Stifel’s capital commitment. We refer to Stifel’s investment in us and the CM Finance Merger as the “formation transactions.” Upon funding of its commitment to us, we will enter into an agreement with Stifel giving Stifel the right to nominate for election a member of our board of directors, who will be considered “interested” (that is, not independent for purposes of the 1940 Act). See “Control Persons and Principal Stockholders.” Under the Stifel Arrangement, Stifel also has a 20% interest in the Adviser and has a right to appoint a member to the Adviser’s investment committee.

Upon consummation of the formation transactions and upon completion of this offering, Stifel will own 2,181,818 shares of our common stock, or approximately 17.2% of our total outstanding common stock, and the Cyrus Funds will own, in the aggregate, 3,818,182 shares of our common stock, or approximately 30.1% of our total outstanding common stock, assuming an offering of $100 million. See “Risk Factors—Risks Relating to this offering—Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.” The shares of our common stock held by Stifel and the Cyrus Funds will be subject to lock-up agreements. See “Shares Eligible for Future Sale—Lock-up Agreements.” In addition, pursuant to an irrevocable proxy, the Cyrus Funds’ shares of our common stock must be voted in the same percentages as our other stockholders (excluding Stifel) vote their shares. No such voting conditions apply to Stifel’s shares of our common stock. We have also granted the Cyrus Funds and Stifel certain post-offering registration rights. See “Shares Eligible for Future Sale—Registration Rights.”

Conflicts of Interests

As described more fully below, we have entered into certain agreements and arrangements with Stifel, Cyrus Capital and the Cyrus Funds that may cause conflicts of interest.

Stifel Arrangement

As described above, Stifel will own approximately 17.2% of our total outstanding common stock upon completion of this offering, assuming an offering of $100 million, and also owns a 20% interest in the Adviser. As a result, Stifel will benefit from our performance and our investments. Stifel will have the right to nominate for election a member of our board of directors, who will be considered “interested” (that is, not independent for purposes of the 1940 Act). In addition, Stifel also has the right to appoint a representative to the Adviser’s three-member board of managers and a member of the Adviser’s investment committee. Stifel will not have any rights to exercise a controlling influence over our day-to-day operations or the operations or investment management function of the Adviser.

Six of the investment professionals employed by the Adviser as part of its Investment Team are also employees of Stifel pursuant to the Stifel Arrangement. Although these investment professionals dedicate a majority of their time to the business and activities of the Adviser, they are concurrent employees of both Stifel and the Adviser, and as a result, may continue to engage in investment advisory activities for Stifel. In addition, until such time as we and the Adviser no longer share office space with Cyrus Capital, these dual employees will not maintain office space with the Adviser or Cyrus Capital. This dual employment arrangement could result in a conflict of

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interest and may distract these investment professionals from their responsibilities to us. Mr. Kuppenheimer is a member of the Adviser’s investment committee and will be a member of our board of directors. Mr. Kuppenheimer is also an employee of Stifel, and as a result, continues to engage in investment advisory activities for Stifel, which could result in a conflict of interest and may distract Mr. Kuppenheimer from his responsibilities to us. Messrs. Mauer and Jansen monitor the activities of the members of the Investment Team for any conflicts of interest and will seek to resolve them on our behalf, subject to the oversight of our board of directors. As a member of the Adviser’s investment committee and our board of directors, Mr. Kuppenheimer will recuse himself from consideration of any potential conflict related to Stifel, should any such conflicts arise.

Under the Stifel Arrangement and subject to certain restrictions, Stifel will use its commercially reasonable efforts to present to us the opportunity to review and bid on all Stifel Nicolaus & Company, Incorporated-originated leveraged finance and high yield corporate debt opportunities consistent with our investment strategy, subject to the approval of our board of directors, as necessary under the 1940 Act, and certain other limitations. Stifel may invest in the same portfolio companies that we invest in, and (regardless of whether our investment arose from a Stifel-originated opportunity) Stifel may, through such investments, have interests that conflict with ours, including receiving fees from the portfolio company directly as well as through its interest in the Adviser. We believe that we may co-invest with Stifel and its affiliates upon approval of a majority of our directors who are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act.

Keefe, Bruyette & Woods, Inc., one of the underwriters in this offering, is a subsidiary of Stifel Financial Corp. (and a sister company to Stifel). Because Stifel will own a 36.4% interest in us immediately prior to the completion of this offering and, assuming an offering of $100 million, approximately 17.2% of our common stock after giving effect to this offering, and owns an interest in the Adviser, and will benefit from our performance, including in this offering, it may be deemed an affiliate under applicable rules of the Financial Industry Regulatory Authority (“FINRA”) and a “conflict of interest” may exist. See “Underwriting” for additional information.

Cyrus Capital Relationship

As described above, the Cyrus Funds will own approximately 30.1% of our outstanding common stock upon completion of this offering, and will also hold a 38% indirect economic interest, but no voting interest, in the Adviser. As a result, Cyrus Capital benefits from our performance and our investments. Pursuant to an irrevocable proxy, the Cyrus Funds’ shares of our common stock must be voted in the same percentages as our other stockholders (excluding Stifel) vote their shares. Cyrus Capital will not have any rights to exercise a controlling influence over our operations or the operations or investment management function of the Adviser. As a result of the relationship with Cyrus Capital and the Cyrus Funds, we could be presumed to be an affiliate of the Cyrus Funds under the 1940 Act. However, a person’s status as an “affiliate” under the 1940 Act is a rebuttable presumption, which we believe we can successfully refute. As a result, we believe that we may invest in the same portfolio companies that the Cyrus Funds invest in, without seeking exemptive relief from the SEC. In addition, the Cyrus Funds may, through such co-investments, have interests that conflict with ours, including receiving fees from the portfolio company directly as well as through its economic interest in the Adviser. Cyrus Capital may also provide us with investment opportunities.

Pursuant to the Services Agreement, the Adviser is supported by 11 investment professionals of Cyrus Capital, selected by Messrs Mauer and Jansen, who will provide investment services to us as

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part of the Adviser’s Investment Team and in connection with the Adviser’s obligations to us under the Investment Advisory Agreement. These investment professionals will continue to engage in investment advisory activities for the private investment funds managed by Cyrus Capital, including the Cyrus Funds, which could result in a conflict of interest, and may distract them from their responsibilities to us. Initially, we expect that the Adviser would rely on the investment professionals that perform analyst functions provided under the Services Agreement for less than 25% of the aggregate time dedicated to the business by the Adviser’s Investment Team.

In addition, our interim Chief Financial Officer is an employee of Cyrus Capital and is provided to us pursuant to the Adviser’s obligations under the Administration Agreement. The Adviser has retained the services of our interim Chief Financial Officer under the terms of the Services Agreement, and we will also be receiving other administrative services from the Adviser, pursuant to the Administration Agreement, which, in turn, are provided to the Adviser by Cyrus Capital under the terms of the Services Agreement. In addition, we currently share office space with the Adviser and Cyrus Capital. Following the completion of this offering, the Adviser intends to hire a chief financial officer, who will also serve as our chief financial officer. We also expect to move our office space during the first calendar quarter of 2014 and will then no longer share office space with Cyrus Capital.

Other Conflicts of Interest

We may also have conflicts of interest arising out of the investment advisory activities of the Adviser. The Adviser may in the future manage other investment funds, accounts or investment vehicles that invest or may invest in assets eligible for purchase by us. To the extent that we compete with entities managed by the Adviser or any of its affiliates for a particular investment opportunity, the Adviser will allocate investment opportunities across the entities for which such opportunities are appropriate, consistent with (a) its internal investment allocation policies, (b) the requirements of the Investment Advisers Act of 1940 as amended (the “Advisers Act”), and (c) certain restrictions under the 1940 Act regarding co-investments with affiliates.

See “Risk Factors—Risks Related to Our Business—There are significant potential conflicts of interest that could affect our investment returns,” “—Conflict related to obligations the Adviser or its affiliates have to other clients” and “—The incentive fee structure we have with the Adviser may create incentives that are not fully aligned with the interests of our stockholders.”

SBIC License

We intend to apply for a license to form a small business investment company subsidiary, or SBIC subsidiary. The application is subject to approval by the United States Small Business Administration, or the SBA, and we can make no assurances that the SBA will approve our application. The SBIC subsidiary would be allowed to issue SBA-guaranteed debentures up to a maximum of $150 million under current SBIC regulations, subject to required capitalization of the SBIC subsidiary and other requirements. SBA-guaranteed debentures generally have longer maturities and lower interest rates than other forms of debt that may be available to us. Neither we nor the Adviser has ever operated an SBIC. See “Risk Factors—Risks Related to Our Business and Structure—If we receive qualification from the SBA to be licensed as an SBIC but we are unable to comply with SBA regulations after the SBIC subsidiary is licensed as an SBIC, our business plan and investment objective could be adversely affected.”

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Corporate Information

Our principal executive offices are currently located at 399 Park Avenue, 39th Floor, New York, New York 10022, and our telephone number is (212) 257-5199. We expect to move our principal executive offices during the first calendar quarter of 2014 and will then no longer share office space with Cyrus Capital. We maintain a website located at www.cmfn-inc.com. Information on our website is not incorporated into or a part of this prospectus.

We are an “emerging growth company,” within the meaning of the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year: (i) following the fifth anniversary of the completion of this offering; (ii) in which we have total annual gross revenue of at least $1.0 billion; or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30^th, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

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THE OFFERING

Common stock offered by us 6,666,666 shares (or 7,666,666 shares if the underwriters exercise their over-allotment in full).

Common stock to be outstanding after this offering 12,666,666 shares (or 13,666,666 shares if the underwriters exercise their over-allotment in full). This includes 6,000,000 shares of common stock issued in connection with the formation transactions.

Use of Proceeds We expect the net proceeds to us from this offering to be approximately $95.8 million (or approximately $110.4 million if the underwriters exercise their over-allotment option in full) after deducting underwriting discounts and commissions and estimated organization and offering expenses payable by us.

We intend to use the net proceeds to repay the Cyrus Funds Debt. We intend to use the remaining net proceeds to invest in unitranche loans and standalone second and first lien loans, and selectively in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments in accordance with our investment objective and for general corporate purposes. Pending such use, we intend to invest the net proceeds of this offering primarily in cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less from the date of investment. These temporary investments may have lower yields than our other investments and, accordingly, may result in lower distributions, if any, during such period. See “Use of Proceeds.”

Investment Advisory Agreement Fees We will pay the Adviser a fee for its services under the Investment Advisory Agreement. This fee consists of two components: a base management fee and an incentive fee. The base management fee is calculated at an annual rate of 1.75% of our gross assets, including assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents. The base management fee will be payable quarterly in arrears.

The incentive fee consists of two parts. The first part, which is calculated and payable quarterly in arrears, equals 20.0% of our “pre-incentive fee net investment income” for the immediately preceding quarter, subject to an annualized hurdle rate of 8.0% with a “catch up” fee for returns between the 8.0% hurdle and 10.0%. The second part is calculated and payable in arrears as of the end of each calendar year (or, upon termination of the Investment Advisory Agreement, as of the termination date) and equals 20.0% of our aggregate cumulative realized capital gains from inception through the end of each calendar year, computed net of aggregate

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cumulative realized capital losses and aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously paid capital gain incentive fees. See “Management Agreements—Management Fee and Incentive Fee.”

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under our Administration Agreement, and any interest expense and any distributions paid on any issued and outstanding 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 (“OID”), debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. The portion of such incentive fee that is attributable to deferred interest (such as PIK interest or OID) will be paid to the Adviser, together with interest thereon from the date of deferral to the date of payment, only if and to the extent we actually receive such interest in cash, and any accrual thereof will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual.

Our net pre-incentive fee investment income used to calculate this part of the incentive fee is also included in the amount of our gross assets used to calculate the 1.75% base management fee.

For the period commencing upon the consummation of this offering and ending December 31, 2014, the Adviser has agreed to waive its fees (base management and incentive fee), without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support a minimum dividend payment on shares of common stock outstanding on the relevant dividend payment dates of             % (to be paid on a quarterly basis). For the periods January 1, 2015 to December 31, 2015 and January 1, 2016 to December 31, 2016, the Adviser has agreed to waive its incentive fees, without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support minimum dividend payments on shares of common stock outstanding on the relevant dividend payment dates of             % and             %,

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respectively (to be paid on a quarterly basis). The annual dividend yield will be based on our initial public offering price per share. Net investment income is defined as GAAP net income before net realized and unrealized gains (losses).

Nasdaq Global Market symbol “CMFN”

Trading at a discount Shares of closed-end investment companies, including BDCs, frequently trade in the secondary market at a discount to their net asset values. We are not generally able to issue and sell our common stock at a price below our net asset value per share unless we have prior stockholder approval. The risk that our shares may trade at a discount to our net asset value is separate and distinct from the risk that our net asset value per share may decline. We cannot predict whether our shares will trade above, at or below net asset value. See “Risk Factors.”

Distributions We intend to make quarterly distributions to our stockholders out of assets legally available for distribution. Our quarterly distributions, if any, will be determined by our board of directors. Our board of directors intends to declare a distribution of approximately $     per share, for the first calendar quarter of 2014, contingent upon the completion of our initial public offering prior to the end of the first calendar quarter of 2014. The amount of any such distribution will be proportionately reduced to reflect the number of days remaining in the quarter after the completion of this offering. We anticipate that this distribution will be paid from income primarily generated by interest and distribution income earned on our investment portfolio. The specific tax characteristics of the distribution will be reported to stockholders after the end of the calendar year.

For the period commencing upon the consummation of this offering and ending December 31, 2014, the Adviser has agreed to waive its fees (base management and incentive fee), without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support a minimum dividend payment on shares of common stock outstanding on the relevant dividend payment dates of     % (to be paid on a quarterly basis). For the periods January 1, 2015 to December 31, 2015 and January 1, 2016 to December 31, 2016, the Adviser has agreed to waive its incentive fees, without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support minimum dividend payments on shares of common stock outstanding on the relevant dividend payment dates of     % and     %, respectively (to be paid on a quarterly basis). The annual dividend yield will be based on our initial public

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offering price per share. Net investment income is defined as GAAP net income before net realized and unrealized gains (losses). Distributions, if any after December 31, 2016, will not be subject to a fee waiver, which could reduce the amount of any such future distributions.

Taxation We intend to elect to be treated for U.S. federal income tax purposes as a RIC. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any net ordinary income or capital gains that we distribute to our stockholders. To maintain our qualification as a RIC and the associated tax benefits, we must meet specified source-of-income and asset diversification requirements and distribute annually at least 90% of our net ordinary income and net short-term capital gains, if any, in excess of our net long-term capital losses. See “Distributions” and “Material U.S. Federal Income Tax Considerations.”

Leverage We expect to continue to use borrowed funds in order to make additional investments. We expect to use this practice, which is known as “leverage,” when the terms and conditions are favorable to long-term investing and aligned with our investment strategy and portfolio composition in an effort to increase returns to our stockholders, but this strategy involves significant risks. See “Risk Factors.” With certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, is at least 200% immediately after each such borrowing. The amount of leverage that we employ will depend on the Adviser’s and our board of directors’ assessment of market and other factors at the time of any proposed borrowing.

In May 2013, we entered into the $76.5 million Term Financing, which has a term of three years and an interest rate of up to LIBOR plus 2.85%. In December 2013, we amended the Financing Facility to add the $50.0 million Revolving Financing, which has a term of two years and bears interest at a rate of (a) 2.10% per annum from December 4, 2013 through December 4, 2014 and (b) 1.60% per annum from December 5, 2014 through the term of the Revolving Financing. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.”

Dividend reinvestment plan We have adopted an “opt out “dividend reinvestment plan for our stockholders. Under this plan, if we declare a cash distribution to our stockholders, the amount of such distribution will be automatically reinvested in additional shares of our common stock unless a stockholder specifically elects not to participate in our dividend reinvestment plan. If a stockholder

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opts out, that stockholder will receive cash distributions. Stockholders who receive distributions in the form of shares of common stock generally will be subject to the same U.S. federal, state and local tax consequences as stockholders who elect to receive their distributions in cash, but will not receive any corresponding cash distributions with which to pay any applicable taxes. See “Dividend Reinvestment Plan.”

Administration Agreement The Administration Agreement requires us to reimburse the Adviser for our allocable portion (subject to the review of our board of directors) of overhead and other expenses, including furnishing us (through the Services Agreement with Cyrus Capital) with office facilities and equipment and providing clerical, bookkeeping, record keeping and other administrative services at such facilities, and our allocable portion of the cost of our chief financial officer and chief compliance officer and their respective staffs. To the extent that the Adviser outsources any of its duties under the Administration Agreement, we will pay the fees associated with such functions on a direct basis, without incremental profit to the Adviser. See “Management Agreements—Administration Agreement.”

License arrangements We have entered into a license agreement with the Adviser under which the Adviser has granted us a non-exclusive, royalty-free license to use the name “CM Finance.” For a description of the License Agreement, see “Management Agreements—License Agreement.”

Custodian and transfer agent State Street Bank and Trust Company will serve as our custodian, and American Stock Transfer & Trust Company, LLC will serve as our transfer and distribution paying agent and registrar. See “Custodian, Transfer and Dividend Paying Agent and Registrar.”

Anti-takeover provisions Our charter and bylaws, as well as certain federal and state statutory and regulatory requirements, contain certain provisions that may have the effect of discouraging a third party from making an acquisition proposal for us. These anti-takeover provisions may inhibit a change in control in circumstances that could give the holders of our common stock the opportunity to realize a premium over the market price for our common stock. See “Description of Capital Stock.”

Fiscal Year June 30

Available information We have filed with the SEC a registration statement on Form N-2, of which this prospectus is a part. This registration statement contains additional information about us and the shares of our common stock being offered by this

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prospectus. After the completion of this offering, we will be required to file periodic reports, proxy statements and other information with the SEC. This information will be available at the SEC’s public reference room at 100 F. Street, N.E., Washington, D.C. 20549 and on the SEC’s website at http://www.sec.gov. Information on the operation of the SEC’s public reference room may be obtained by calling the SEC at 1-800-SEC-0330.

We maintain a website at www.cmfn-inc.com and intend to make all of our annual, quarterly and current reports, proxy statements and other information available, free of charge, on or through our website. Information on our website is not incorporated into or part of this prospectus. You may also obtain such information free of charge by contacting us in writing at 399 Park Avenue, 39th Floor, New York, New York 10022, Attention: Investor Relations.

Risk Factors An investment in our common stock is subject to risks. The following is a summary of the principal risks that you should carefully consider before investing in shares of our common stock. In addition, see “Risk Factors” beginning on page 23 of this prospectus to read about factors you should consider before deciding to invest in shares of our common stock.

Ÿ Neither we nor the Adviser has ever operated as or advised a BDC or a RIC, and we may not be able to operate our business successfully or generate sufficient revenue to make or sustain distributions to our stockholders.

Ÿ We depend on our recent relationship with Stifel and continuing relationship with Cyrus Capital and their expertise and resources made available to us and the Adviser under the Stifel Arrangement and the Services Agreement, respectively.

Ÿ If the Services Agreement is terminated, or if any key personnel, including members of the Investment Team, are no longer available to us, our ability to achieve our investment objective could be harmed.

Ÿ We depend upon key personnel of the Adviser for our future success.

Ÿ Our business model depends to a significant extent upon our Investment Team’s network of relationships. Any inability of the Adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

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Ÿ There are significant potential conflicts of interest that could negatively affect our investment returns.

Ÿ Our financial condition, results of operations and cash flows will depend on our ability to manage our business effectively.

Ÿ The incentive fee structure we have with the Adviser may create incentives that are not fully aligned with the interests of our stockholders and may induce the Adviser to make speculative investments.

Ÿ The valuation process for certain of our portfolio holdings may create a conflict of interest.

Ÿ We may have difficulty paying our required distributions if we recognize income before, or without, receiving cash representing such income, such as the accrual of OID.

Ÿ Regulations governing our operation as a BDC affect our ability to and the way in which we raise additional capital and, as a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.

Ÿ We intend to finance our investments with borrowed money, which will magnify the potential for gain or loss on amounts invested and may increase the risk of investing in us.

Ÿ Because we use debt to finance our investments, changes in interest rates will affect our cost of capital and net investment income.

Ÿ Changes in interest rates may have a substantial negative impact on our investments, particularly floating rate loans, and may make it more expensive for us to borrow money to fund our investments.

Ÿ Uncertainty relating to the LIBOR calculation process may adversely affect the value of our portfolio of LIBOR-indexed, floating-rate debt securities.

Ÿ Most of our portfolio investments will be recorded at fair value as determined in good faith by our board of directors. Quoted prices or observable inputs may not be available to determine such values, resulting in the use of significant unobservable inputs in our quarterly valuation process. As a result, there may be uncertainty as to the value of our portfolio investments.

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Ÿ We are an emerging growth company under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

Ÿ Adverse developments in the credit markets may impair our ability to borrow money.

Ÿ We may make unsecured investments in highly leveraged portfolio companies and there is an increased risk that such portfolio companies will be unable to satisfy their respective obligations to us.

Ÿ There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.

Ÿ Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.

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FEES AND EXPENSES

The following table is intended to assist you in understanding the costs and expenses that an investor in our common stock will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and may vary. Except where the context suggests otherwise, whenever this prospectus contains a reference to fees or expenses paid by “us” or that “we” will pay fees or expenses, common stockholders will indirectly bear such fees or expenses.

Stockholder Transaction Expenses:
Sales load (as a percentage of offering price)	3.00%	(1)
Offering expenses (as a percentage of offering price)	1.20%	(2)
Dividend reinvestment plan expenses	None	(3)
Total Stockholder Transaction Expenses (as a percentage of offering price)	4.20%
Annual Expenses (as percentage of average net assets attributable to common stock): (4)
Base management fees	1.66%	(5)
Incentive fees payable under the Investment Advisory Agreement	0.68%	(6)
Interest payments on borrowed funds	1.78%	(7)
Other expenses	1.48%	(8)
Total annual expenses	5.60%

(1) The underwriting discount and commission with respect to shares of our common stock sold in this offering, which is a one-time fee paid to the underwriters, is the only sales load paid in connection with this offering. The sales load due to the underwriters is 6.0% of the offering price. We have agreed to pay to the underwriters a sales load of 3.0% of the offering price and the Adviser has agreed to pay the remaining sales load, equal to 3.0% of the offering price. We are not obligated to repay the portion of the sales load paid by the Adviser.

(2) Percentage reflects estimated offering expenses of approximately $1,200,000.

(3) The expenses of the dividend reinvestment plan are included in “Other expenses.” See “Dividend Reinvestment Plan.”

(4) Assumes that we do not sell any shares of our common stock during the following twelve months and that we borrow funds equal to 47.8% of our average net assets during such period, or $96.0 million.

(5) Our base management fee, payable quarterly in arrears, is at an annual rate of 1.75% of our gross assets, including assets purchased with borrowed amounts or other forms of leverage and excluding cash and cash equivalents. Assumes a waiver of some or all of the base management fee for the first two quarters of 2014.

(6) We may have capital gains and interest income that result in the payment of an incentive fee to the Adviser in the first year after completion of this offering. The incentive fee payable in this example above assumes a waiver of some or all of the incentive management fee for the first three quarters of 2014. However, the incentive fee payable to the Adviser is based on our performance and will not be paid unless we achieve certain goals. For the period commencing upon the consummation of this offering and ending December 31, 2014, the Adviser has agreed to waive its fees (base management and incentive fee), without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support a minimum dividend payment on shares of common stock outstanding on the relevant dividend payment dates of     % (to be paid on a quarterly basis). For the periods January 1, 2015 to December 31, 2015 and January 1, 2016 to December 31, 2016, the Adviser has agreed to waive its incentive fees, without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support minimum dividend payments on shares of common stock outstanding on the relevant dividend payment dates of     % and     %, respectively (be paid on a quarterly basis). The annual dividend yield will be based on our initial public offering price per share. Net investment income is defined as GAAP net income before net realized and unrealized gains (losses).

The incentive fee consists of two components, ordinary income and capital gains:

The ordinary income component, which is payable quarterly in arrears, will equal 20.0% of the excess, if any, of our “Pre-incentive Fee Net Investment Income” over a 2.0% quarterly (8.0% annualized) hurdle rate, expressed as a rate of return on the value of our net assets attributable to our common stock, and a “catch-up” provision, measured as of the end of each calendar quarter. Under this provision, in any calendar quarter, the Adviser receives no incentive fee until our net investment income equals the hurdle rate of 2.0% but then receives, as a “catch-up,” 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.5% subject to a deferral of non-cash amounts. The effect of the “catch-up” provision is that, subject to the deferral provisions discussed below, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, the Adviser will receive 20.0% of our pre-incentive fee net investment income as if a hurdle rate did not apply. The ordinary income component of the incentive fee will be computed on income that may include interest that is accrued but not yet received in cash. The portion of such incentive fee that is attributable to deferred interest (sometimes referred to as payment-in-kind interest, or PIK, or original issue discount, or OID) will be

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paid to the Adviser only if and to the extent we actually receive such interest in cash, and any accrual thereof will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. Any reversal of such accounts would reduce net income for the quarter by the net amount of the reversal (after taking into account the reversal of incentive fees payable) and would result in a reduction and possibly elimination of the incentive fees for such quarter. There is no accumulation of amounts on the hurdle rate from quarter to quarter and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle and there is no delay of payment if prior quarters are below the quarterly hurdle.

The capital gains component of the incentive fee will equal 20.0% of our “Incentive Fee Capital Gains,” if any, which will equal our aggregate cumulative realized capital gains from inception through the end of each calendar year, computed net of our aggregate cumulative realized capital losses and our aggregate cumulative unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees. The second component of the incentive fee will be payable, in arrears, at the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), commencing with the year ending December 31, 2014, provided that the capital gains component of the incentive fee determined as of December 31, 2014 will be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses and unrealized capital depreciation for the period ending December 31, 2014. See “Management Agreements—Management Fee and Incentive Fee.”

(7) We may borrow funds from time to time to make investments to the extent that the economic situation is conducive to doing so. The costs associated with our borrowings are indirectly borne by our stockholders. For purposes of this section, we have computed interest expense assuming that (i) we maintain no cash or cash equivalents, and (ii) borrow for investment purposes an amount equal to 32.4% of our total assets ($96.0 million out of total assets of $296.4 million). The $96.0 million assumes borrowing up to our capacity of $126.5 million on the Financing Facility.

(8) Includes organizational expenses, our overhead expenses, including payments under the Administration Agreement based on our allocable portion of overhead and other expenses incurred by the Adviser and expenses related to our dividend reinvestment plan based on estimated amounts for the current fiscal year. See “Management Agreements—Administration Agreement.”

Example

The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have $126.5 million of leverage at the end of the calendar year ending December 31, 2014, and that our annual operating expenses would remain at the levels set forth in the table above.

	1 Year		3 Years		5 Years		10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return	$	103	$	224	$	345	$	648

While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. The incentive fee under the Investment Advisory Agreement, which, assuming a 5% annual return, would either not be payable or have an immaterial impact on the expense amounts shown above, is not included in the example. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher. This example also includes estimated sales load and offering expenses of approximately $4.2 million. Further, while the example assumes reinvestment of all distributions at net asset value, participants in our dividend reinvestment plan will receive a number of shares of our common stock, determined by dividing the total dollar amount of the cash distribution payable to a participant by either (i) the greater of (a) the current net asset value per share of our common stock or (b) 95% of the market price per share of our common stock at the close of trading on the payment date fixed by our board of directors in the event that we use newly issued shares to satisfy the share requirements of the dividend reinvestment plan or (ii) the average purchase price, excluding any brokerage charges or other charges, of all shares of common stock purchased by the administrator of the dividend reinvestment plan in the event that shares are purchased in the open market to satisfy the share requirements of the dividend reinvestment plan, which may be at, above or below net asset value.

This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown.

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RISK FACTORS

Investing in our common stock involves a number of significant risks. Before you invest in our common stock, you should be aware of various risks, including those described below. You should carefully consider these risk factors, together with all of the other information included in this prospectus, before you decide whether to make an investment in our common stock. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the following events occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In such case, our net asset value and the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Relating to Our Business and Structure

Neither we nor the Adviser has ever operated as or advised a BDC or a RIC, and we may not be able to operate our business successfully or generate sufficient revenue to make or sustain distributions to our stockholders.

We and the Adviser were formed in February 2012 and commenced operations in March 2012. As a result of our limited operating history, we are subject to the business risks and uncertainties associated with recently formed businesses, including the risk that we will not achieve our investment objective and that the value of your investment could decline substantially.

In addition, the Adviser has never managed or operated a public company, a BDC or a RIC or otherwise managed or operated an investment vehicle under the constraints and limitations imposed on a BDC that is treated as a RIC under the Code. BDCs are required, for example, to invest at least 70% of their total assets primarily in securities of U.S. private or thinly traded public companies, cash, cash equivalents, U.S. government securities and other high-quality debt instruments that mature in one year or less from the date of investment. Moreover, qualification for taxation as a RIC requires satisfaction of source-of-income, asset diversification and distribution requirements. Neither we nor the Adviser has any experience operating or advising under these constraints, which may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective.

We depend upon key personnel of the Adviser for our future success. If the Adviser were to lose any of its key personnel, our ability to achieve our investment objective could be significantly harmed.

We depend on the diligence, skill, experience and network of business contacts of the investment professionals of the Adviser, in particular Messrs. Mauer and Jansen, who are also members of the Adviser’s investment committee, executive officers and members of our board of directors. We can offer no assurance that Messrs. Mauer and Jansen will continue to provide investment advice to us. The loss of either Mr. Mauer or Mr. Jansen would limit our ability to achieve our investment objective and operate as we anticipate.

Messrs. Mauer and Jansen are currently supported by 17 investment professionals of whom 11 support the Adviser pursuant to the Services Agreement as well as other accounting and back-office professionals provided by Cyrus Capital under the Services Agreement. The Services Agreement has an initial term of five years and may be terminated by Cyrus Capital at any time only under certain circumstances, including if the Adviser ceases to provide investment advisory service to us. The Services Agreement may also be terminated by either Cyrus Capital or the Adviser upon 90 days’ notice prior to the initial five-year term and the expiration of each one-year

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anniversary thereafter. Accordingly, we can offer no assurance that the Adviser will continue to be supported by sufficient investment personnel and other personnel directly or pursuant to the Services Agreement. In addition, the termination of the Services Agreement by Cyrus Capital could limit our ability to achieve our investment objective and operate as we anticipate. This could have a material adverse effect on our financial condition, results of operations and cash flows.

Our business model depends to a significant extent upon our Adviser’s network of relationships. Any inability of the Adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect our business.

We depend upon the Adviser to maintain its relationships with private equity sponsors, placement agents, investment banks, management groups and other financial institutions, including Stifel and Cyrus Capital, and we expect to rely to a significant extent upon these relationships to provide us with potential investment opportunities. If the Adviser or members of the Investment Team fail to maintain such relationships, or to develop new relationships with other sources of investment opportunities, we will not be able to grow our investment portfolio. In addition, individuals with whom the Adviser has relationships are not obligated to provide us with investment opportunities, and we can offer no assurance that these relationships will generate investment opportunities for us in the future.

Our relationship with Cyrus Capital may create conflicts of interest.

The Cyrus Funds managed by Cyrus Capital currently own 100% of our outstanding equity, and are expected to own approximately 30.1% of our outstanding common stock upon our repurchase of shares pursuant to the formation transactions and completion of this offering. The Cyrus Funds also have a 38% indirect economic interest in the Adviser. The Investment Team currently includes 11 investment professionals who are employees of Cyrus Capital. These Cyrus Professionals will also be engaging in investment advisory activities for the private investment funds managed by Cyrus Capital, including the Cyrus Funds, which could result in conflicts of interest with respect to, among other things, the allocation of investment opportunities, and may distract them from their responsibilities to us. Cyrus Capital also provides certain financial, accounting and administrative services to the Adviser pursuant to the Services Agreement with the Adviser upon which the Adviser relies to satisfy its obligations under the Administration Agreement, and is reimbursed by the Adviser for the expenses it incurs in connection with providing such services. For example, Brennan McCaw, our interim chief financial officer, is an employee of Cyrus Capital who performs his duties to us pursuant to the Adviser’s obligations under the Administration Agreement and is provided to the Adviser under the terms of the Services Agreement.

In addition, as a result of the relationship with Cyrus Capital and the Cyrus Funds, we could be presumed to be an affiliate of the Cyrus Funds under the 1940 Act. However, a person’s status as an “affiliate” under the 1940 Act is a rebuttable presumption, which we believe we can successfully refute. As a result, we believe that we may invest in the same portfolio companies that the Cyrus Funds invest in, without seeking exemptive relief from the SEC. However, we can provide no assurance that the SEC or its staff will not take a contrary position. If the SEC or its staff does deem us to be an affiliate of Cyrus Capital, we would be required to obtain an exemptive order from the SEC in order to co-invest with affiliates of Cyrus Capital. We can offer no assurance that we will successfully obtain such an order. If we cannot co-invest with affiliates of Cyrus Capital, our business, financial condition, results of operations and cash flows could be materially adversely affected. In addition, the Cyrus Funds may, through such co-investments, have interests that conflict with ours, including receiving fees from the portfolio company directly as well as through its economic interest in the Adviser.

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Our relationship with Stifel may create conflicts of interest.

Stifel has made a capital commitment to us in an amount of up to $40.0 million and we intend to call $32.7 million of Stifel’s capital commitment immediately after the CM Finance Merger and prior to our election to be regulated as a BDC and the pricing of this offering for purposes of repurchasing up to $32.7 million of the Cyrus Funds’ interest in us at a per share price of $15.00, equal to the assumed initial public offering price per share. Stifel will own approximately 17.2% of our outstanding common stock upon completion of this offering assuming an offering of $100 million. Stifel also has a 20% interest in the Adviser. Six members of the Adviser’s Investment Team are dual employees of the Adviser and Stifel, and may also be engaging in investment advisory activities for Stifel, which could result in a conflict of interest and may distract them from their responsibilities to us. Mr. Kuppenheimer is a member of the Adviser’s investment committee and will be a member of our board of directors. Mr. Kuppenheimer is also an employee of Stifel, and will continue to engage in investment advisory activities for Stifel which could result in a conflict of interest and may distract Mr. Kuppenheimer from his responsibilities to us.

Under the Stifel Arrangement and subject to certain restrictions, Stifel will use its commercially reasonable efforts to present to us to review and bid on, Stifel Nicolaus & Company, Incorporated-originated leveraged finance and high yield corporate debt opportunities consistent with our investment strategy, subject to the approval of our board of directors, as necessary under the 1940 Act, and certain other limitations. Stifel may invest in the same portfolio companies that we invest in (regardless of whether our investment arose from a Stifel-originated opportunity), and Stifel may, through such investments, have interests that conflict with ours, including receiving fees from the portfolio company directly as well as through its interest in the Adviser. We believe that we may co-invest with Stifel and its affiliates upon approval of a majority of our directors that are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act. However, we can provide no assurance that the SEC or its staff will not take a contrary position. If the SEC or its staff takes a contrary position, we would be required to obtain an exemptive order from the SEC in order to co-invest with Stifel and its affiliates. We can offer no assurance that we will successfully obtain such an order. If we cannot co-invest with Stifel and its affiliates, our business, financial condition, results of operations and cash flows could be materially adversely affected.

In addition, Stifel, through Keefe, Bruyette & Woods, Inc., a subsidiary of Stifel’s parent, Stifel Financial Corp., will be a “principal underwriter,” as defined in the 1940 Act, by virtue of and during the term of, the underwriting syndicate for this offering and any future offering in which Stifel may be part of the underwriting syndicate. As a result, our ability to co-invest with Stifel will be limited during the term of this offering and the term of any future offering in which Stifel acts as a “principal underwriter.” If we cannot co-invest with affiliates of Stifel, our business, financial condition, results of operations and cash flows could be materially adversely affected.

Keefe, Bruyette & Woods, Inc., one of the underwriters, is also a subsidiary of Stifel Financial Corp. (and a sister company to Stifel) and its affiliates may act as dealers in connection with this offering. Because Stifel will own a 36.4% interest in us immediately prior to the completion of this offering and approximately 17.2% after giving effect to this offering assuming an offering of $100 million and owns an interest in the Adviser, and will benefit from our performance in this offering, it my be deemed an affiliate under applicable FINRA rules and a “conflict of interest” may exist. Raymond James & Associates, Inc., the representative of the underwriters, is an independent underwriter for the offering and will perform a due diligence investigation and review in accordance with its usual standards and will participate in the preparation of the prospectus, although we cannot assure you that this will adequately address any potential conflicts of interest. See “Underwriting” for additional information.

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There are significant potential conflicts of interest that could negatively affect our investment returns.

There may be times when the Adviser or the members of the Investment Team have interests that differ from those of our stockholders, giving rise to conflicts of interest. The members of the Adviser’s investment committee and the Investment Team serve, or may serve, as officers, directors, members, or principals of entities that operate in the same or a related line of business as we do, such as Stifel or Cyrus Capital, or of investment funds, accounts, or investment vehicles managed by the Adviser, Stifel or Cyrus Capital. Similarly, the Adviser or the members of the Investment Team may have other clients with similar, different or competing investment objectives. In serving in these multiple capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the best interests of us or our stockholders. In addition, the Adviser and some of its affiliates, including our officers and our non-independent directors, are not prohibited from raising money for, or managing, another investment entity that makes the same types of investments as those we target. The members of the Investment Team who are employees of Cyrus Capital, manage the Cyrus Funds, and are not prohibited from raising money for, or managing another investment entity that makes the same types of investments as those we target. The members of the Investment Team who are dual employees of the Adviser and Stifel, as well as Mr. Kuppenheimer, who is also an employee of Stifel, may continue to engage in investment advisory activities for Stifel, which could result in a conflict of interest and may distract them from their responsibilities to us. As a result, and although the Adviser and its Investment Team are subject to a written conflicts of interest policy, the time and resources the Adviser’s Investment Team and certain members of the Adviser’s investment committee could devote to us may be diverted. In addition, we may compete with any such investment entity for the same investors and investment opportunities.

The members of the Investment Team may, from time to time, possess material non-public information, limiting our investment discretion.

The investment professionals of the Adviser may serve as directors of, or in a similar capacity with, portfolio companies in which we invest. In the event that material nonpublic information is obtained with respect to such companies, or we become subject to trading restrictions under the internal trading policies of those companies or as a result of applicable law or regulations, we could be prohibited for a period of time from purchasing or selling the securities of such companies, and this prohibition may have an adverse effect on us.

There are conflicts related to other arrangements with the Adviser.

We have entered into a License Agreement with the Adviser under which the Adviser has agreed to grant us a non-exclusive, royalty-free license to use the name “CM Finance.” See “Management Agreements—License Agreement.” In addition, we have entered into an Administration Agreement with the Adviser pursuant to which we are required to pay to the Adviser our allocable portion of overhead and other expenses incurred by the Adviser in performing its obligations under such Administration Agreement, such as rent and our allocable portion of the cost of our chief financial officer and our chief compliance officer and their respective staffs. This will create conflicts of interest that our board of directors will monitor. For example, under the terms of the license agreement, we will be unable to preclude the Adviser from licensing or transferring the ownership of the “CM Finance” name to third parties, some of whom may compete against us. Consequently, we will be unable to prevent any damage to goodwill that may occur as a result of the activities of the Adviser or others. Furthermore, in the event the license agreement is terminated, we will be required to change our name and cease using “CM Finance” as part of our name. Any of these events could disrupt our recognition in the market place, damage any goodwill we may have generated and otherwise harm our business.

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Our financial condition, results of operations and cash flows will depend on our ability to manage our business effectively.

Our ability to achieve our investment objective will depend on our ability to manage our business and to grow our investments and earnings. This will depend, in turn, on the Adviser’s ability to identify, invest in and monitor portfolio companies that meet our investment criteria. The achievement of our investment objective on a cost-effective basis will depend upon the Adviser’s execution of our investment process, its ability to provide competent, attentive and efficient services to us and, to a lesser extent, our access to financing on acceptable terms. The Adviser’s investment professionals may have substantial responsibilities in connection with the management of other investment funds, accounts and investment vehicles. The personnel of the Adviser may also be called upon to provide managerial assistance to our portfolio companies. These activities may distract them from identifying new investment opportunities for us or slow our rate of investment. Any failure to manage our business and our future growth effectively could have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, although CM Investment Partners, LP was led by Messrs. Mauer and Jansen, the remaining investment team of CM Investment Partners, LP was composed of different investment professionals than the current investment team of the Adviser, which may result in materially different investment performance.

The Adviser’s incentive fee structure may create incentives to it that are not fully aligned with the interests of our stockholders.

In the course of our investing activities, we will pay management and incentive fees to the Adviser. We have entered into an Investment Advisory Agreement with the Adviser that provides that these fees will be based on the value of our gross assets. As a result, investors in our common stock will invest on a “gross” basis and receive distributions on a “net” basis after expenses, resulting in a lower rate of return than one might achieve through direct investments. Because these fees are based on the value of our gross assets, the Adviser will benefit when we incur debt or use leverage. This fee structure may encourage the Adviser to cause us to borrow money to finance additional investments. Under certain circumstances, the use of borrowed money may increase the likelihood of default, which would disfavor our stockholders.

Our board of directors is charged with protecting our interests by monitoring how the Adviser addresses these and other conflicts of interests associated with its management services and compensation. While our board of directors is not expected to review or approve each investment decision, borrowing or incurrence of leverage, our independent directors will periodically review the Adviser’s services and fees as well as its portfolio management decisions and portfolio performance. In connection with these reviews, our independent directors will consider whether our fees and expenses (including those related to leverage) remain appropriate. As a result of this arrangement, the Adviser may from time to time have interests that differ from those of our stockholders, giving rise to a conflict.

Our incentive fee may induce the Adviser to make speculative investments.

The Adviser will receive an incentive fee based, in part, upon net capital gains realized on our investments. Unlike that portion of the incentive fee based on income, there is no hurdle rate applicable to the portion of the incentive fee based on net capital gains. Additionally, under the incentive fee structure, the Adviser may benefit when we recognize capital gains and, because the Adviser will determine when to sell a holding, the Adviser will control the timing of the

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recognition of such capital gains. As a result, the Adviser may have a tendency to invest more capital in investments likely to result in capital gains, compared to income-producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.

We may be obligated to pay the Adviser incentive compensation even if we incur a loss and may pay more than 20.0% of our net capital gains because we cannot recover payments made in previous years.

The Adviser will be entitled to incentive compensation for each fiscal quarter in an amount equal to a percentage of the excess of our investment income for that quarter (before deducting incentive compensation) above a threshold return for that quarter. Thus, we may be required to pay the Adviser incentive compensation for a fiscal quarter even if there is a decline in the value of our portfolio or we incur a net loss for that quarter. If we pay an incentive fee of 20% of our realized capital gains (net of all realized capital losses and unrealized capital depreciation on a cumulative basis) and thereafter experience additional realized capital losses or unrealized capital depreciation, we will not be able to recover any portion of the incentive fee previously paid.

PIK interest payments we receive will increase our assets under management and, as a result, will increase the amount of base management fees and incentive fees payable by us to the Adviser.

Certain of our debt investments may contain provisions providing for the payment of PIK interest. Because PIK interest results in an increase in the size of the loan balance of the underlying loan, and receipt of PIK interest will have the effect of increasing our assets under management. As a result, because the base management fee that we pay to the Adviser is based on the value of our gross assets, and receipt of PIK interest will result in an increase in the amount of the base management fee payable by us. In addition, any such increase in a loan balance due to the receipt of PIK interest will cause such loan to accrue interest on the higher loan balance, which will result in an increase in our pre-incentive fee net investment income and, as a result, an increase in incentive fees that are payable to the Adviser.

The involvement of our interested directors in the valuation process may create conflicts of interest.

We expect to make most of our portfolio investments in the form of loans and securities that are not publicly traded and for which there are limited or no market based price quotation is available. As a result, our board of directors will determine the fair value of these loans and securities in good faith as described below in “—Most of our portfolio investments will be recorded at fair value as determined in good faith by our board of directors and, as a result, there may be uncertainty as to the value of our portfolio investments.” In connection with that determination, investment professionals from the Adviser may provide our board of directors with valuations based upon the most recent portfolio company financial statements available and projected financial results of each portfolio company. While the valuation for each portfolio investment will be reviewed by an independent valuation firm quarterly, the ultimate determination of fair value will be made by our board of directors and not by such third-party valuation firm. In addition, Messrs. Mauer and Jansen, each an interested member of our board of directors, has a direct or indirect pecuniary interest in the Adviser. The participation of the Adviser’s investment professionals in our valuation process, and the pecuniary interest in the Adviser by certain members of our board of directors, could result in a conflict of interest as the Adviser’s management fee is based, in part, on the value of our gross assets, and our incentive fees will be based, in part, on realized gains and realized and unrealized losses.

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The Investment Advisory Agreement and the Administration Agreement with the Adviser were not negotiated on an arm’s length basis and may not be as favorable to us as if they had been negotiated with an unaffiliated third party.

The Investment Advisory Agreement and the Administration Agreement were negotiated between related parties. Consequently, their terms, including fees payable to the Adviser, may not be as favorable to us as if they had been negotiated with an unaffiliated third party. In addition, we may choose not to enforce, or to enforce less vigorously, our rights and remedies under these agreements because of our desire to maintain our ongoing relationship with the Adviser and its affiliates. Any such decision, however, would breach our fiduciary obligations to our stockholders.

Our incentive fee arrangements with the Adviser may vary from those of other investment funds, account or investment vehicles that the Adviser may manage in the future, which may create an incentive for the Adviser to devote time and resources to a higher fee-paying fund.

If the Adviser is paid a higher performance-based fee from any other fund that it may manage in the future, it may have an incentive to devote more research and development or other activities, and/or recommend the allocation of investment opportunities, to such higher fee-paying fund. For example, to the extent the Adviser’s incentive compensation is not subject to a hurdle or total return requirement with respect to another fund, it may have an incentive to devote time and resources to such other fund. As a result, the investment professionals of the Adviser may devote time and resources to a higher fee-paying fund.

The Adviser’s liability is limited under the Investment Advisory Agreement and we have agreed to indemnify the Adviser against certain liabilities, which may lead the Adviser to act in a riskier manner on our behalf than it would when acting for its own account.

Under the Investment Advisory Agreement, the Adviser has not assumed any responsibility to us other than to render the services called for under that agreement. It will not be responsible for any action of our board of directors in following or declining to follow the Adviser’s advice or recommendations. Under the Investment Advisory Agreement, the Adviser, its officers, members and personnel, and any person controlling or controlled by the Adviser will not be liable to us, any subsidiary of ours, our directors, our stockholders or any subsidiary’s stockholders or partners for acts or omissions performed in accordance with and pursuant to the Investment Advisory Agreement, except those resulting from acts constituting gross negligence, willful misconduct, bad faith or reckless disregard of the duties that the Adviser owes to us under the Investment Advisory Agreement. In addition, as part of the Investment Advisory Agreement, we have agreed to indemnify the Adviser and each of its officers, directors, members, managers and employees from and against any claims or liabilities, including reasonable legal fees and other expenses reasonably incurred, arising out of or in connection with our business and operations or any action taken or omitted on our behalf pursuant to authority granted by the Investment Advisory Agreement, except where attributable to gross negligence, willful misconduct, bad faith or reckless disregard of such person’s duties under the Investment Advisory Agreement. These protections may lead the Adviser to act in a riskier manner when acting on our behalf than it would when acting for its own account.

We operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.

A number of entities compete with us to make the types of investments that we plan to make. We will compete with public and private funds, other BDCs, commercial and investment banks, commercial financing companies and, to the extent they provide an alternative form of financing, private equity and hedge funds. Many of our competitors are substantially larger and have

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considerably greater financial, technical and marketing resources than we do. For example, we believe some of our competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or the source-of-income, asset diversification and distribution requirements we must satisfy to maintain our RIC qualification. The competitive pressures we face may have a material adverse effect on our business, financial condition, results of operations and cash flows. As a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we may not be able to identify and make investments that are consistent with our investment objective.

With respect to the investments we make, we will not seek to compete based primarily on the interest rates we will offer, and we believe that some of our competitors may make loans with interest rates that will be lower than the rates we offer. With respect to all investments, we may lose some investment opportunities if we do not match our competitors’ pricing, terms and structure. However, if we match our competitors’ pricing, terms and structure, we may experience decreased net interest income, lower yields and increased risk of credit loss.

We will be subject to corporate-level income tax if we are unable to qualify or maintain our qualification as a RIC under Subchapter M of the Code.

To qualify as a RIC under Subchapter M of the Code, we must meet certain source-of-income, asset diversification and distribution requirements. The distribution requirement for a RIC is satisfied if we distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to our stockholders on an annual basis. Because we intend to incur debt, we will be subject to certain asset coverage ratio requirements under the 1940 Act and financial covenants under loan and credit agreements that could, under certain circumstances, restrict us from making distributions necessary to qualify as a RIC. If we are unable to obtain cash from other sources, we may fail to qualify as a RIC and, thus, may be subject to corporate-level income tax. To qualify as a RIC, we must also meet certain asset diversification requirements at the end of each calendar quarter. Failure to meet these tests may result in our having to dispose of certain investments quickly in order to prevent the loss of our qualification as a RIC. Because most of our investments will be in private or thinly traded public companies, any such dispositions may be made at disadvantageous prices and may result in substantial losses. If we fail to qualify as a RIC for any reason and become subject to corporate income tax, the resulting corporate income taxes could substantially reduce our net assets, the amount of income available for distributions to our stockholders and the amount of funds available for new investments. Such a failure would have a material adverse effect on us and our stockholders. See “Material U.S. Federal Income Tax Considerations—Taxation as a RIC.”

We may need to raise additional capital to grow because we must distribute most of our income.

We may need additional capital to fund new investments and grow our portfolio of investments. We intend to access the capital markets periodically to issue debt or equity securities or borrow from financial institutions in order to obtain such additional capital. Unfavorable economic conditions could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. A reduction in the availability of new capital could limit our ability to grow. In addition, we will be required to distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to our stockholders to maintain our qualification as a RIC. As a result, these earnings will

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not be available to fund new investments. An inability on our part to access the capital markets successfully could limit our ability to grow our business and execute our business strategy fully and could decrease our earnings, if any, which would have an adverse effect on the value of our securities.

You may not receive distributions, or our distributions may not grow over time.

We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this prospectus. Due to the asset coverage test applicable to us under the 1940 Act as a BDC, we may be limited in our ability to make distributions. All distributions will be made at the discretion of our board of directors and will depend on our earnings, financial condition, maintenance of RIC status, compliance with applicable BDC, SBA regulations (if applicable) and such other factors as our board of directors may deem relative from time to time. We cannot assure you that we will make distributions to our stockholders in the future.

We may have difficulty paying our required distributions if we recognize income before, or without, receiving cash representing such income.

For U.S. federal income tax purposes, we will include in income certain amounts that we have not yet received in cash, such as the accrual of OID. This may arise if we receive warrants in connection with the making of a loan and in other circumstances, or through contracted PIK interest, which represents contractual interest added to the loan balance and due at the end of the loan term. Such OID, which could be significant relative to our overall investment activities, and increases in loan balances as a result of contracted PIK arrangements will be included in income before we receive any corresponding cash payments. We also may be required to include in income certain other amounts that we will not receive in cash.

Since in certain cases we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to maintain our qualification as a RIC. In such a case, we may have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations to meet these distribution requirements. If we are not able to obtain such cash from other sources, we may fail to qualify as a RIC and thus be subject to corporate-level income tax. See “Material U.S. Federal Income Tax Considerations—Taxation as a RIC.”

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.

We may distribute taxable dividends that are payable in part in our stock. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of shareholders are treated as taxable dividends. The Internal Revenue Service has issued private rulings indicating that this rule will apply even if the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under these rulings, if too many shareholders elect to receive their distributions in cash, each such shareholder would receive a pro rata share of the total cash to be distributed and would receive the remainder of their distribution in shares of stock. If we decide to make any distributions consistent with these rulings that are payable in part in our stock, taxable stockholders receiving such

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dividends will be required to include the full amount of the dividend (whether received in cash, our stock, or combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly designated as a capital gain dividend) to the extent of our current and accumulated earnings and profits for United States federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our stock.

If we form an SBIC subsidiary, such subsidiary may be unable to make distributions to us that could be necessary for us to maintain RIC status.

In order for us to continue to qualify for RIC tax treatment and to minimize corporate-level taxes, we are required to distribute substantially all of our net taxable income and net capital gain income, including income of any SBIC subsidiary that we form. If we form an SBIC subsidiary, we expect that we would be partially dependent on the SBIC subsidiary for cash distributions to enable us to meet the RIC distribution requirements. The SBIC subsidiary may be limited by the Small Business Investment Act of 1958, and SBA regulations governing SBICs, from making certain distributions to us that may be necessary to maintain our status as a RIC. We may have to request a waiver of the SBA’s restrictions for the SBIC subsidiary to make certain distributions to maintain our RIC status. We cannot assure you that the SBA will grant such waiver and if the SBIC subsidiary is unable to obtain a waiver, compliance with the SBA regulations may result in loss of RIC tax treatment and a consequent imposition of corporate-level federal income tax on us.

Regulations governing our operation as a BDC affect our ability to, and the way in which we raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.

We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we will be permitted as a BDC to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 200% of our gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments at a time when such sales may be disadvantageous to us in order to repay a portion of our indebtedness. Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders. If we issue senior securities, we will be exposed to typical risks associated with leverage, including an increased risk of loss.

We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below then-current net asset value per share of our common stock if our board of directors determines that such sale is in our best interests, and if our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our board of directors, closely approximates the market value of such securities (less any distributing commission or discount). If we raise additional funds by issuing common stock or senior securities convertible into, or

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exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease, and you may experience dilution. In addition, neither Stifel nor the Cyrus Funds are subject to these restrictions and may sell their respective shares of our common stock at a per share price that is below net asset value per share, which may negatively affect the prevailing market prices for our common stock and our ability to raise additional capital.

Pending legislation may allow us to incur additional leverage.

As a BDC, under the 1940 Act we generally are not permitted to incur indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our assets). Recent legislation introduced in the U.S. House of Representatives, if passed, would modify this section of the 1940 Act and increase the amount of debt that BDCs may incur by reducing the asset coverage percentage from 200% to 150%. As a result, we may be able to incur additional indebtedness in the future and therefore your risk of an investment in us may increase.

We intend to finance our investments with borrowed money, which will magnify the potential for gain or loss on amounts invested and may increase the risk of investing in us.

The use of leverage magnifies the potential for gain or loss on amounts invested. The use of leverage is generally considered a speculative investment technique and increases the risks associated with investing in our securities. However, we intend to borrow from, and may in the future issue debt securities to, banks, insurance companies and other lenders. Lenders of these funds will have fixed dollar claims on our assets that are superior to the claims of our common stockholders, and we would expect such lenders to seek recovery against our assets in the event of a default. We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms of any debt instruments we may enter into with lenders. In addition, under the terms of the Financing Facility and any borrowing facility or other debt instrument we may enter into, we are likely to be required to use the net proceeds of any investments that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds to any other uses. If the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged, thereby magnifying losses or eliminating our stake in a leveraged investment. Similarly, any decrease in our revenue or income will cause our net income to decline more sharply than it would have had we not borrowed. Such a decline would also negatively affect our ability to make distributions with respect to our common stock or preferred stock. Our ability to service any debt will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures. Moreover, as the base management fee payable to the Adviser will be payable based on the value of our gross assets, including those assets acquired through the use of leverage, the Adviser will have a financial incentive to incur leverage, which may not be consistent with our stockholders’ interests. In addition, our common stockholders will bear the burden of any increase in our expenses as a result of our use of leverage, including interest expenses and any increase in the base management fee payable to the Adviser.

As a BDC, we generally are required to meet a coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings (other than potential leverage in future SBIC subsidiaries, should we receive an SBIC license, subject to exemptive relief) and any preferred stock that we may issue in the future, of at least 200%. If this ratio declines below 200%, we will not be able to incur additional debt and could be required to sell a portion of our investments to repay some debt when it is otherwise disadvantageous for us to do so. This could have a material adverse effect on our operations, and we may not be able to make distributions. The amount of leverage that we employ will depend on the Adviser’s and our board of directors’

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assessment of market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to obtain credit at all or on terms acceptable to us.

Illustration. The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual results may be higher or lower than those appearing below.

Assumed Return on Our Portfolio⁽¹⁾

(net of expenses)

	(10.0)%			(5.0)%			0.0%			5.0%			10.0%
Corresponding net return to common stockholder		(15.0	)%		(8.1	)%		(1.1	)%		5.7	%		12.6	%

(1) Assumes $277.0 million in total assets, $76.5 million in debt outstanding, $200.5 million in net assets, and an average cost of funds of 3.12%. Actual interest payments may be different.

In addition, our debt facilities may impose financial and operating covenants that restrict our business activities, including limitations that hinder our ability to finance additional loans and investments or to make the distributions required to maintain our qualification as a RIC under the Code.

We may default under the Financing Facility or any future borrowing facility we enter into or be unable to amend, repay or refinance any such facility on commercially reasonable terms, or at all, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

In the event we default under the Financing Facility or any other future borrowing facility, our business could be adversely affected as we may be forced to sell a portion of our investments quickly and prematurely at prices that may be disadvantageous to us in order to meet our outstanding payment obligations and/or support working capital requirements under the Financing Facility or such future borrowing facility, any of which would have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, following any such default, the agent for the lenders under the Financing Facility or such future borrowing facility could assume control of the disposition of any or all of our assets, including the selection of such assets to be disposed and the timing of such disposition, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

Provisions in the Financing Facility or any other future borrowing facility may limit our discretion in operating our business.

The Financing Facility is, and any future borrowing facility may be, backed by all or a portion of our loans and securities on which the lenders will or, in the case of a future facility, may have a security interest. We may pledge up to 100% of our assets and may grant a security interest in all of our assets under the terms of any debt instrument we enter into with lenders. We expect that any security interests we grant will be set forth in a pledge and security agreement and evidenced by the filing of financing statements by the agent for the lenders. In addition, we expect that the custodian for our securities serving as collateral for such loan would include in its electronic systems notices indicating the existence of such security interests and, following notice of occurrence of an event of default, if any, and during its continuance, will only accept transfer instructions with respect to any such securities from the lender or its designee. If we were to default under the terms of any debt instrument, the agent for the applicable lenders would be able to assume control of the timing of disposition of any or all of our assets securing such debt, which would have a material adverse effect on our business, financial condition, results of operations and cash flows.

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In addition, any security interests as well as negative covenants under the Financing Facility or any other borrowing facility may limit our ability to create liens on assets to secure additional debt and may make it difficult for us to restructure or refinance indebtedness at or prior to maturity or obtain additional debt or equity financing. In addition, if our borrowing base under the Financing Facility or any other borrowing facility were to decrease, we would be required to secure additional assets in an amount equal to any borrowing base deficiency. In the event that all of our assets are secured at the time of such a borrowing base deficiency, we could be required to repay advances under the Financing Facility or any other borrowing facility or make deposits to a collection account, either of which could have a material adverse impact on our ability to fund future investments and to make stockholder distributions.

In addition, under the Financing Facility or any future borrowing facility we will be subject to limitations as to how borrowed funds may be used, which may include restrictions on geographic and industry concentrations, loan size, payment frequency and status, average life, collateral interests and investment ratings, as well as regulatory restrictions on leverage, which may affect the amount of funding that may be obtained. There may also be certain requirements relating to portfolio performance, including required minimum portfolio yield and limitations on delinquencies and charge-offs, a violation of which could limit further advances and, in some cases, result in an event of default. An event of default under the Financing Facility or any other borrowing facility could result in an accelerated maturity date for all amounts outstanding thereunder, which could have a material adverse effect on our business and financial condition. This could reduce our revenues and, by delaying any cash payment allowed to us under the Financing Facility or any other borrowing facility until the lenders have been paid in full, reduce our liquidity and cash flow and impair our ability to grow our business and maintain our qualification as a RIC.

Because we use debt to finance our investments, if market interest rates were to increase, our cost of capital could increase, which could reduce our net investment income.

Because we borrow money to make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we can offer no assurance that a significant change in market interest rates would not have a material adverse effect on our net investment income in the event we use debt to finance our investments. In periods of rising interest rates, our cost of funds would increase, which could reduce our net investment income. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. There is no limit on our ability to enter derivative transactions.

In addition, a rise in the general level of interest rates typically leads to higher interest rates applicable to our debt investments. Accordingly, an increase in interest rates may result in an increase of the amount of our pre-incentive fee net investment income and, as a result, an increase in incentive fees payable to the Adviser.

We are exposed to risks associated with changes in interest rates including potential effects on our cost of capital and net investment income.

General interest rate fluctuations and changes in credit spreads on floating rate loans may have a substantial negative impact on our investments and investment opportunities and, accordingly, may have a material adverse effect on our rate of return on invested capital. In addition, an increase in interest rates would make it more expensive to use debt to finance our investments. Decreases in credit spreads on debt that pays a floating rate of return would have an

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impact on the income generation of our floating rate assets. Trading prices for debt that pays a fixed rate of return tend to fall as interest rates rise. Trading prices tend to fluctuate more for fixed rate securities that have longer maturities. Although we have no policy governing the maturities of our investments, under current market conditions we expect that we will invest in a portfolio of debt generally having maturities of up to 6 years. This means that we will be subject to greater risk (other things being equal) than an entity investing solely in shorter-term securities.

Uncertainty relating to the LIBOR calculation process may adversely affect the value of our portfolio of LIBOR-indexed, floating-rate debt securities.

Concerns have been publicized that some of the member banks surveyed by the British Bankers’ Association (“BBA”) in connection with the calculation of LIBOR across a range of maturities and currencies may have been under-reporting or otherwise manipulating the inter-bank lending rate applicable to them in order to profit on their derivatives positions or to avoid an appearance of capital insufficiency or adverse reputational or other consequences that may have resulted from reporting inter-bank lending rates higher than those they actually submitted. A number of BBA member banks have entered into settlements with their regulators and law enforcement agencies with respect to alleged manipulation of LIBOR, but investigations and reviews of the framework for setting of LIBOR by regulators and governmental authorities in various jurisdictions are ongoing. In this regard, the recommendation of one governmental committee undertaking such a review will result in the transfer of the administration of LIBOR to NYSE Euronext Rates Administration Limited in early 2014.

Actions by the administrator of LIBOR, regulators or law enforcement agencies may result in changes to the manner in which LIBOR is determined. Uncertainty as to the nature of such potential changes may adversely affect the market for LIBOR-based securities, including our portfolio of LIBOR-indexed, floating-rate debt securities. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based securities or the value of our portfolio of LIBOR-indexed, floating-rate debt securities.

If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.

As a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. See “Regulation.”

We believe that most of the investments that we may acquire in the future will constitute qualifying assets. However, we may be precluded from investing in what we believe to be attractive investments if such investments are not qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could violate the 1940 Act provisions applicable to BDCs. As a result of such violation, specific rules under the 1940 Act could prevent us, for example, from making follow-on investments in existing portfolio companies (which could result in the dilution of our position) or could require us to dispose of investments at inappropriate times in order to come into compliance with the 1940 Act. If we need to dispose of such investments quickly, it could be difficult to dispose of such investments on favorable terms. We may not be able to find a buyer for such investments and, even if we do find a buyer, we may have to sell the investments at a substantial loss. Any such outcomes would have a material adverse effect on our business, financial condition, results of operations and cash flows.

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If we do not maintain our status as a BDC, we would be subject to regulation as a registered closed-end investment company under the 1940 Act. As a registered closed-end investment company, we would be subject to substantially more regulatory restrictions under the 1940 Act, which would significantly decrease our operating flexibility.

Most of our portfolio investments will be recorded at fair value as determined in good faith by our board of directors and, as a result, there may be uncertainty as to the value of our portfolio investments.

We expect that most of our portfolio investments will take the form of securities that are not publicly traded. The fair value of loans, securities and other investments that are not publicly traded may not be readily determinable, and we will value these investments at fair value as determined in good faith by our board of directors, including to reflect significant events affecting the value of our investments. Most, if not all, of our investments (other than cash and cash equivalents) will be classified as Level 3 under the Financial Accountant Standards Board (“FASB”) Accounting Standards Codification Topic 820: Fair Value Measurements and Disclosures (“ASC 820”). This means that our portfolio valuations will be based on unobservable inputs and our own assumptions about how market participants would price the asset or liability in question. We expect that inputs into the determination of fair value of our portfolio investments will require significant management judgment or estimation. Even if observable market data are available, such information may be the result of consensus pricing information or broker quotes, which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimers materially reduces the reliability of such information. We expect to retain the services of one or more independent service providers to review the valuation of these loans and securities. The types of factors that the board of directors may take into account in determining the fair value of our investments generally include, as appropriate, comparison to publicly traded securities including such factors as yield, maturity and measures of credit quality, the enterprise value of a portfolio company, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a ready market for these loans and securities existed. Our net asset value could be adversely affected if our determinations regarding the fair value of our investments were materially higher than the values that we ultimately realize upon the disposal of such loans and securities.

We will adjust quarterly the valuation of our portfolio to reflect our board of directors’ determination of the fair value of each investment in our portfolio. Any changes in fair value are recorded in our statement of operations as net change in unrealized appreciation or depreciation.

We may experience fluctuations in our quarterly operating results.

We could experience fluctuations in our quarterly operating results due to a number of factors, including the interest rate payable on the loans and debt securities we acquire, the default rate on such loans and securities, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. In light of these factors, results for any period should not be relied upon as being indicative of performance in future periods.

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We are an “emerging growth company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are and we will remain an “emerging growth company” as defined in the JOBS Act until the earlier of (a) the last day of the fiscal year (i) following the fifth anniversary of the completion of this offering, (ii) in which we have total annual gross revenue of at least $1.0 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30^th, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. For so long as we remain an “emerging growth company” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict if investors will find our common stock less attractive because we will rely on some or all of these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will take advantage of the extended transition period for complying with new or revised accounting standards, which may make it more difficult for investors and securities analysts to evaluate us since our financial statements may not be comparable to companies that comply with public company effective dates and may result in less investor confidence.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act, or the subsequent testing by our independent registered public accounting firm (when undertaken, as noted below), may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our consolidated financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

We will be required to disclose changes made in our internal control and procedures on a quarterly basis and our management will be required to assess the effectiveness of these controls annually. However, for as long as we are an “emerging growth company” under the recently enacted JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. We could be an emerging growth company for up to five years. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment

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might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

Our status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it.

Because of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.

New or amended laws or regulations governing our operations may adversely affect our business.

We and our portfolio companies will be subject to regulation by laws at the U.S. federal, state and local levels. These laws and regulations, as well as their interpretation, may change from time to time, and new laws, regulations and interpretations may also come into effect. Any such new or changed laws or regulations could have a material adverse effect on our business.

Additionally, changes to the laws and regulations governing our operations related to permitted investments may cause us to alter our investment strategy in order to avail ourselves of new or different opportunities. Such changes could result in material differences to the strategies and plans set forth in this prospectus and may shift our investment focus from the areas of expertise of the Adviser to other types of investments in which the Adviser may have little or no expertise or experience. Any such changes, if they occur, could have a material adverse effect on our results of operations and the value of your investment.

Our board of directors may change our investment objective, operating policies and strategies without prior notice or stockholder approval.

Our board of directors has the authority, except as otherwise provided in the 1940 Act, to modify or waive our investment objective or certain of our operating policies and strategies without prior notice and without stockholder approval. However, absent stockholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC. We cannot predict the effect any changes to our current operating policies and strategies would have on our business, operating results and the market price of our common stock. Nevertheless, any such changes could adversely affect our business and impair our ability to make distributions to our stockholders.

If we receive qualification from the SBA to be licensed as an SBIC but we are unable to comply with SBA regulations thereafter, our business plan and investment objective could be adversely affected.

We intend to apply for license to form an SBIC subsidiary. The application is subject to SBA approval and we can make no assurances that the SBA will approve our application. If we receive this qualification, we will become subject to SBA regulations that may constrain our activities. We may need to make allowances in our investment activity to comply with SBA regulations. In addition, SBA regulations may impose parameters on our business operations and investment objectives that are different from those we otherwise would have if we were not subject to these

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regulations. Failure to comply with the SBA regulations could result in the loss of the SBIC license and the resulting inability to participate in the SBA-sponsored debenture program. The SBA also limits the maximum amount that may be borrowed by any single SBIC. The SBA also prohibits, without prior SBA approval, a “change of control” of an SBIC or transfers that would result in any person (or a group of persons acting in concert) owning 10% or more of a class of capital stock of a licensed SBIC. A “change of control” is any event that would result in the transfer of the power, direct or indirect, to direct the management and policies of an SBIC, whether through ownership, contractual arrangements or otherwise. To the extent that we obtain an SBIC license, this would prohibit a change of control of our SBIC subsidiary without prior SBA approval. If we are unable to comply with SBA regulations, our business plan and growth strategy could be materially adversely affected.

The Adviser can resign as the Adviser or administrator upon 60 days’ notice and we may not be able to find a suitable replacement within that time, or at all, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

The Adviser has the right under the Investment Advisory Agreement to resign as the Adviser at any time upon not less than 60 days’ written notice, whether we have found a replacement or not. Similarly, the Adviser has the right under the Administration Agreement to resign at any time upon not less than 60 days’ written notice, whether we have found a replacement or not. If the Adviser were to resign, we may not be able to find a new investment adviser or administrator or hire internal management with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions to our stockholders are likely to be adversely affected and the market price of our shares may decline. In addition, the coordination of our internal management and investment or administrative activities, as applicable, is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by the Adviser. Even if we are able to retain comparable management, whether internal or external, the integration of such management and their lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our business, financial condition, results of operations and cash flows.

Cyrus Capital can terminate the Services Agreement with the Adviser under certain conditions and we may not be able to find suitable replacement resources, resulting in a disruption in our operations that could adversely affect our financial condition, business and results of operations.

Our Services Agreement with Cyrus Capital is subject to an initial five-year period. However, Cyrus Capital may terminate the Services Agreement under certain circumstances prior to the expiration of its fifth anniversary whether we have found a replacement for the resources under the agreement or not. If Cyrus Capital were to terminate the Services Agreement, we may not be able to hire internal investment professionals with similar expertise and ability to provide the same or equivalent services on acceptable terms. If we are unable to do so quickly, our operations are likely to experience a disruption, our financial condition, business and results of operations as well as our ability to pay distributions to our stockholders are likely to be adversely affected and the market price of our shares may decline. In addition, the coordination of our internal management and investment or administrative activities, as applicable, is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by the investment professionals of Cyrus Capital. Even if we are able to retain comparable professionals, whether internal or external, the integration of such investment

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professionals and their lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our business, financial condition, results of operations and cash flows.

We are highly dependent on information systems, and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to make distributions to our stockholders.

Our business is highly dependent on the communications and information systems of the Adviser, which are provided to the Adviser by Cyrus Capital pursuant to the Services Agreement directly or through third party service providers. Any failure or interruption of such systems, including as a result of the termination of the Services Agreement or an agreement with any such third party service provider, could cause delays or other problems in our activities. This, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to make distributions to our stockholders.

Adverse market conditions for debt and equity capital markets in the United States and around the world could limit the availability of debt capital to us on favorable terms, or at all, which could negatively affect our financial performance and results.

From 2007 through 2009, the global capital markets experienced a period of disruption resulting in increasing spreads between the yields realized on riskier debt securities and those realized on risk-free securities and a lack of liquidity in parts of the debt capital markets, significant write-offs in the financial services sector relating to subprime mortgages and the re-pricing of credit risk in the broadly syndicated market. These events, along with the deterioration of the housing market, illiquid market conditions, declining business and consumer confidence and the failure of major financial institutions in the United States, led to a decline of general economic conditions. As a result, many commercial banks and other financial institutions stopped lending or significantly curtailed their lending activity. In addition, in an effort to stem losses and reduce their exposure to segments of the economy deemed to be high risk, some financial institutions limited refinancing and loan modification transactions and reviewed the terms of existing facilities to identify bases for accelerating the maturity of existing lending facilities. This economic decline materially and adversely affected the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and to financial firms in particular during that time.

These conditions may recur, in which case, to the extent that we wish to use debt to fund our investments, the debt capital that will be available to us, if at all, may be at a higher cost, and on terms and conditions that may be less favorable, than what we expect, which could negatively affect our financial performance and results. In addition, if these conditions recur, it may be difficult for us to enter into a new borrowing facility, obtain other financing to finance the growth of our investments, or refinance any outstanding indebtedness on acceptable economic terms, or at all. A prolonged period of market illiquidity may cause us to reduce the volume of loans and debt securities we originate and/or fund and adversely affect the value of our portfolio investments, which could have a material and adverse effect on our business, financial condition, results of operations and cash flows.

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Our board of directors is authorized to reclassify any unissued shares of common stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.

Under Maryland General Corporation Law and our charter, our board of directors is authorized to classify and reclassify any authorized but unissued shares of stock into one or more classes of stock, including preferred stock. Prior to issuance of shares of each class or series, the board of directors will be required by Maryland law and our charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to stockholder distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the board of directors could authorize the issuance of shares of preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or that otherwise might be in their best interest. The cost of any such reclassification would be borne by our common stockholders. The issuance of preferred shares convertible into shares of common stock may also reduce the net income and net asset value per share of our common stock upon conversion, provided, that we will only be permitted to issue such convertible preferred stock to the extent we comply with the requirements of Section 61 of the 1940 Act, including obtaining common stockholder approval. These effects, among others, could have an adverse effect on your investment in our common stock. Certain matters under the 1940 Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, the 1940 Act provides that holders of preferred stock are entitled to vote separately from holders of common stock to elect two preferred stock directors. We currently have no plans to issue preferred stock.

Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

Our board of directors is divided into three classes of directors serving staggered terms. A classified board may render a change in control of us or removal of our incumbent management more difficult. The Maryland General Corporation Law and our charter and bylaws contain additional provisions that may discourage, delay or make more difficult a change in control of CM Finance Inc or the removal of our directors. We are subject to the Maryland Business Combination Act, subject to any applicable requirements of the 1940 Act. Our board of directors has adopted a resolution exempting from the Business Combination Act any business combination between us and any other person, subject to prior approval of such business combination by our board of directors, including approval by a majority of our independent directors. If the resolution exempting business combinations is repealed or our board of directors does not approve a business combination, the Business Combination Act may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer. Our bylaws exempt from the Maryland Control Share Acquisition Act acquisitions of our stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Acquisition Act, the Control Share Acquisition Act also may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such a transaction.

We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our board of directors in three classes serving staggered three-year terms, and authorizing our board of directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, to amend our charter without stockholder approval and to increase or decrease the number of shares of stock that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders. See “Description of Our Capital Stock—Certain Provisions of the Maryland General Corporation Law and our Charter and Bylaws.”

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Risks Related to our Investments

Economic recessions or downturns could adversely affect our portfolio companies, leading to defaults on our investments, which would harm our operating results.

Many of the portfolio companies in which we expect to make investments, including those currently included in our initial portfolio, are likely to be susceptible to economic slowdowns or recessions and may be unable to repay our loans during such periods. In such event, the number of our non-performing assets is likely to increase and the value of our portfolio is likely to decrease during such periods. Adverse economic conditions may decrease the value of collateral securing some of our loans and debt securities and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing our investments and harm our operating results.

A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its assets, which could trigger cross-defaults under other agreements and jeopardize our portfolio company’s ability to meet its obligations under the loans and debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company.

We may hold the loans and debt securities of leveraged companies that may, due to the significant operating volatility typical of such companies, enter into bankruptcy proceedings, and we could lose all or part of our investment, which would harm our operating results.

Investment in leveraged companies involves a number of significant risks. Leveraged companies in which we invest may have limited financial resources and may be unable to meet their obligations under their loans and debt securities that we hold. Such developments may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing any guarantees that we may have obtained in connection with our investment. Smaller leveraged companies also may have less predictable operating results and may require substantial additional capital to support their operations, finance their expansion or maintain their competitive position.

Leveraged companies may also experience bankruptcy or similar financial distress. The bankruptcy process has a number of significant inherent risks. Many events in a bankruptcy proceeding are the product of contested matters and adversarial proceedings and are beyond the control of the creditors. A bankruptcy filing by a portfolio company may adversely and permanently affect that company. If the proceeding is converted to a liquidation, the value of the portfolio company may not equal the liquidation value that was believed to exist at the time of the investment. The duration of a bankruptcy proceeding is also difficult to predict, and a creditor’s return on investment can be adversely affected by delays until the plan of reorganization or liquidation ultimately becomes effective. The administrative costs in connection with a bankruptcy proceeding are frequently high and would be paid out of the debtor’s estate prior to any return to creditors. Because the standards for classification of claims under bankruptcy law are vague, our influence with respect to the class of securities or other obligations we own may be lost by increases in the number and amount of claims in the same class or by different classification and treatment. In the early stages of the bankruptcy process, it is often difficult to estimate the extent of, or even to identify, any contingent claims that might be made. In addition, certain claims that have priority by law (for example, claims for taxes) may be substantial.

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A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its assets. This could trigger cross-defaults under other agreements and jeopardize such portfolio company’s ability to meet its obligations under the loans or debt or equity securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company.

There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to lender liability claims.

If one of our portfolio companies were to go bankrupt, even though we may have structured our interest as senior debt, depending on the facts and circumstances, including the extent to which we may have actually provided managerial assistance to that portfolio company, a bankruptcy court might re-characterize our debt holding and subordinate all or a portion of our claim to that of other creditors. In addition, lenders can be subject to lender liability claims for actions taken by them where they become too involved in the borrower’s business or exercise control over the borrower. It is possible that we could become subject to a lender’s liability claim, including as a result of actions taken if we actually render significant managerial assistance.

Our investments in private and middle-market portfolio companies are risky, and we could lose all or part of our investment.

Investment in private and middle-market companies involves a number of significant risks. Generally, little public information exists about these companies, and we will rely on the ability of the Adviser’s investment professionals to obtain adequate information to evaluate the potential returns and risks from investing in these companies. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Middle-market companies may have limited financial resources and may be unable to meet their obligations under their loans and debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of our realizing any guarantees we may have obtained in connection with our investment. In addition, such companies typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. Additionally, middle-market companies are more likely to depend on the management talents and efforts of a small group of persons. Therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on one or more of the portfolio companies we invest in and, in turn, on us. Middle-market companies also may be parties to litigation and may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence. In addition, our executive officers, directors and investment adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in portfolio companies.

We may expose ourselves to risks if we engage in hedging transactions.

If we engage in hedging transactions, we may expose ourselves to risks associated with such transactions. We may utilize instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates and market interest rates. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions

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decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Moreover, it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price.

The success of our hedging transactions will depend on our ability to correctly predict movements in currencies and interest rates. Therefore, while we may enter into such transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations.

The lack of liquidity in our investments may adversely affect our business.

All of our assets may be invested in illiquid loans and securities, and a substantial portion of our investments in leveraged companies will be subject to legal and other restrictions on resale or will otherwise be less liquid than more broadly traded public securities. The illiquidity of these investments may make it difficult for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments. Also, as noted above, we may be limited or prohibited in our ability to sell or otherwise exit certain positions in our initial portfolio as such a transaction could be considered a joint transaction prohibited by the 1940 Act.

Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.

As a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by our board of directors. As part of the valuation process, we may take into account the following types of factors, if relevant, in determining the fair value of our investments:

Ÿ available current market data, including relevant and applicable market trading and transaction comparables;

Ÿ applicable market yields and multiples;

Ÿ security covenants;

Ÿ call protection provisions;

Ÿ information rights;

Ÿ the nature and realizable value of any collateral;

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Ÿ the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business;

Ÿ comparisons of financial ratios of peer companies that are public;

Ÿ comparable merger and acquisition transactions; and

Ÿ principal market and enterprise values.

When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we use the pricing indicated by the external event to corroborate our valuation. We record decreases in the market values or fair values of our investments as unrealized depreciation. Declines in prices and liquidity in the corporate debt markets may result in significant net unrealized depreciation in our portfolio. The effect of all of these factors on our portfolio may reduce our net asset value by increasing net unrealized depreciation in our portfolio. Depending on market conditions, we could incur substantial realized losses and may suffer additional unrealized losses in future periods, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are a non-diversified investment company within the meaning of the 1940 Act, and therefore we are not limited with respect to the proportion of our assets that may be invested in securities of a single issuer.

We are classified as a non-diversified investment company within the meaning of the 1940 Act, which means that we are not limited by the 1940 Act with respect to the proportion of our assets that we may invest in securities of a single issuer. Beyond the asset diversification requirements associated with our qualification as a RIC under the Code, we do not have fixed guidelines for diversification. To the extent that we assume large positions in the securities of a small number of issuers or our investments are concentrated in relatively few industries, our net asset value may fluctuate to a greater extent than that of a diversified investment company as a result of changes in the financial condition or the market’s assessment of the issuer. We may also be more susceptible to any single economic or regulatory occurrence than a diversified investment company.

Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.

Following an initial investment in a portfolio company, we may make additional investments in that portfolio company as “follow-on” investments, including exercising warrants, options or convertible securities that were acquired in the original or subsequent financing; in seeking to:

Ÿ increase or maintain in whole or in part our position as a creditor or our equity ownership percentage in a portfolio company;

Ÿ preserve or enhance the value of our investment.

We have discretion to make follow-on investments, subject to the availability of capital resources. Failure on our part to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful operation. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our level of risk, because we prefer other opportunities or because we are inhibited by compliance with BDC requirements of the 1940 Act or the desire to maintain our qualification as a RIC.

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Because we generally do not hold controlling equity interests in our portfolio companies, we may not be able to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.

We do not hold controlling equity positions in any of the portfolio companies included in our portfolio and, although we may do so in the future, we do not currently intend to hold controlling equity positions in our portfolio companies. As a result, we will be subject to the risk that a portfolio company may make business decisions with which we disagree, and that the management and/or stockholders of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity of the debt and equity investments that we expect to hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company and may therefore suffer a decrease in the value of our investments.

Prepayments of our debt investments by our portfolio companies could adversely impact our results of operations and ability to make stockholder distributions and result in a decline in the market price of our shares.

We will be subject to the risk that the debt investments we make in our portfolio companies may be repaid prior to maturity. We expect that our investments will generally allow for repayment at any time subject to certain penalties. When this occurs, we intend to generally reinvest these proceeds in temporary investments, pending their future investment in accordance with our investment strategy. These temporary investments will typically have substantially lower yields than the debt being prepaid, and we could experience significant delays in reinvesting these amounts. Any future investment may also be at lower yields than the debt that was repaid. As a result, our results of operations could be materially adversely affected if one or more of our portfolio companies elects to prepay amounts owed to us. Additionally, prepayments could negatively impact our ability to make, or the amount of, stockholder distributions with respect to our common stock, which could result in a decline in the market price of our shares.

Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.

We intend to invest a portion of our capital in second lien and subordinated loans issued by our portfolio companies. The portfolio companies usually have, or may be permitted to incur, other debt that ranks equally with, or senior to, the loans in which we invest. By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest or principal on or before the dates on which we are entitled to receive payments in respect of the loans in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying senior creditors, a portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with loans in which we invest, we would have to share any distributions on an equal and ratable basis with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

Additionally, certain loans that we may make to portfolio companies may be secured on a second priority basis by the same collateral securing senior secured debt of such companies. The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by the portfolio company under the agreements governing the loans. The holders of

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obligations secured by first priority liens on the collateral will generally control the liquidation of, and be entitled to receive proceeds from, any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of all of the collateral would be sufficient to satisfy the loan obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds were not sufficient to repay amounts outstanding under the loan obligations secured by the second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against the portfolio company’s remaining assets, if any.

We may also make unsecured loans to portfolio companies, meaning that such loans will not benefit from any interest in collateral of such companies. Liens on such portfolio companies’ collateral, if any, will secure the portfolio company’s obligations under its outstanding secured debt and may secure certain future debt that is permitted to be incurred by the portfolio company under its secured loan agreements. The holders of obligations secured by such liens will generally control the liquidation of, and be entitled to receive proceeds from, any realization of such collateral to repay their obligations in full before us. In addition, the value of such collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from sales of such collateral would be sufficient to satisfy our unsecured loan obligations after payment in full of all secured loan obligations. If such proceeds were not sufficient to repay the outstanding secured loan obligations, then our unsecured claims would rank equally with the unpaid portion of such secured creditors’ claims against the portfolio company’s remaining assets, if any.

The rights we may have with respect to the collateral securing the loans we make to our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of such senior debt. Under a typical intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens:

Ÿ the ability to cause the commencement of enforcement proceedings against the collateral;

Ÿ the ability to control the conduct of such proceedings;

Ÿ the approval of amendments to collateral documents;

Ÿ releases of liens on the collateral; and

Ÿ waivers of past defaults under collateral documents.

We may not have the ability to control or direct such actions, even if our rights are adversely affected.

If we make subordinated investments, the obligors or the portfolio companies may not generate sufficient cash flow to service their debt obligations to us.

We may make subordinated investments that rank below other obligations of the obligor in right of payment. Subordinated investments are subject to greater risk of default than senior obligations as a result of adverse changes in the financial condition of the obligor or economic conditions in general. If we make a subordinated investment in a portfolio company, the portfolio company may be highly leveraged, and its relatively high debt-to-equity ratio may create increased risks that its operations might not generate sufficient cash flow to service all of its debt obligations.

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If we make unsecured investments, those investments might not generate sufficient cash flow to service their debt obligations to us.

We may make unsecured investments. Unsecured investments may be subordinated to other obligations of the obligor. Unsecured investments often reflect a greater possibility that adverse changes in the financial condition of the obligor or general economic conditions (including, for example, a substantial period of rising interest rates or declining earnings) or both may impair the ability of the obligor to make payment of principal and interest. If we make an unsecured investment in a portfolio company that is highly leveraged, its relatively high debt-to-equity ratio could increase the risk that its operations might not generate sufficient cash to service its debt obligations, and we would have no right to seize assets to satisfy the obligations to us.

The disposition of our investments may result in contingent liabilities.

We currently expect that substantially all of our investments will involve loans and private securities. In connection with the disposition of such an investment, we may be required to make representations about the business and financial affairs of the portfolio company typical of those made in connection with the sale of a business. We may also be required to indemnify the purchasers of such investment to the extent that any such representations turn out to be inaccurate or with respect to potential liabilities. These arrangements may result in contingent liabilities that ultimately result in funding obligations that we must satisfy through our return of distributions previously made to us.

We may not realize gains from our equity investments.

When we invest in loans and debt securities, we may acquire warrants or other equity securities of portfolio companies as well. We may also invest in equity securities directly. To the extent we hold equity investments, we will attempt to dispose of them and realize gains upon our disposition of them. However, the equity interests we receive may not appreciate in value and, may decline in value. As a result, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

Risks Relating to this Offering

Prior to this offering, there has been no public market for our common stock, and we cannot assure you that the market price of shares of our common stock will not decline following the offering.

We cannot assure you that a trading market will develop for our common stock after this offering or, if one develops, that such trading market can be sustained. We have applied to have our common stock listed on The Nasdaq Global Market, but we cannot assure you that our application will be approved. In addition, we cannot predict the prices at which our common stock will trade. The initial public offering price for our common stock will be determined through our negotiations with the underwriters and may not bear any relationship to the market price at which it may trade after our initial public offering. Shares of companies offered in an initial public offering often trade at a discount to the initial offering price due to underwriting discounts and related offering expenses. Also, shares of closed-end investment companies, including BDCs, frequently trade at a discount from their net asset value. This characteristic of closed-end investment companies is separate and distinct from the risk that our net asset value per share of common stock may decline. We cannot predict whether our common stock will trade at, above or below net asset value. The risk of loss associated with this characteristic of closed-end management investment companies may be greater for investors expecting to sell shares of

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common stock purchased in the offering soon after the offering. In addition, if our common stock trades below its net asset value, we will generally not be able to sell additional shares of our common stock to the public at its market price without first obtaining the approval of a majority of our stockholders (including a majority of our unaffiliated stockholders) and our independent directors for such issuance.

There is a risk that you may not receive distributions or that our distributions may not grow over time and a portion of our distributions may be a return of capital.

We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this prospectus. Due to the asset coverage test applicable to us under the 1940 Act as a BDC, we may be limited in our ability to make distributions.

When we make distributions, we will be required to determine the extent to which such distributions are paid out of current or accumulated earnings and profits. Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of an investor’s basis in our stock and, assuming that an investor holds our stock as a capital asset, thereafter as a capital gain. See “Material U.S. Federal Income Tax Considerations.”

Investors in this offering will incur immediate dilution upon the closing of this offering.

We expect the initial public offering price of our shares of common stock to be higher than the pro forma net asset value per share of our outstanding common stock. Accordingly, investors purchasing shares of common stock in this offering will incur immediate dilution upon the closing of this offering.

Investing in our common stock may involve an above average degree of risk.

The investments we make in accordance with our investment objective may result in a higher amount of risk, and higher volatility or loss of principal, than alternative investment options. Our investments in portfolio companies may be speculative and, therefore, an investment in our common stock may not be suitable for someone with lower risk tolerance.

The market price of our common stock may fluctuate significantly.

The market price and liquidity of the market for shares of our common stock may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:

Ÿ significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which is not necessarily related to the operating performance of these companies;

Ÿ changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;

Ÿ loss of our qualification as a RIC or BDC;

Ÿ changes in earnings or variations in operating results;

Ÿ changes in the value of our portfolio of investments;

Ÿ increases in the interest rates we pay;

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Ÿ changes in accounting guidelines governing valuation of our investments;

Ÿ any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;

Ÿ departure of the Adviser’s key personnel;

Ÿ change in the Adviser’s relationship with Cyrus Capital under the Services Agreement;

Ÿ change in the Adviser’s relationship with Stifel under the Stifel Arrangement;

Ÿ sales of our shares by the Cyrus Funds;

Ÿ sales of our shares by Stifel;

Ÿ operating performance of companies comparable to us; and

Ÿ general economic trends and other external factors.

We may allocate the net proceeds from this offering in ways with which you may disagree.

We will have significant flexibility in investing the net proceeds of this offering and may use the net proceeds from this offering in ways with which you may disagree or for purposes other than those contemplated at the time of the offering.

Sales of substantial amounts of our common stock in the public market may have an adverse effect on the market price of our common stock.

Upon completion of the formation transactions described in this prospectus and this offering, Stifel will own an aggregate of 2,181,818 shares of our common stock, or approximately 17.2% of our total outstanding common stock and the Cyrus Funds will own an aggregate of 3,818,182 shares of our common stock, or approximately 30.1% of our total outstanding common stock, assuming an offering of $100 million. Upon expiration or waiver of any applicable lock-up periods, shares issued by us to Stifel and the Cyrus Funds in connection with the CM Finance Merger will generally be freely tradable in the public market, subject to the volume limitations, applicable holding periods and other provisions of Rule 144 under the Securities Act. Sales of substantial amounts of our common stock, the availability of such common stock for sale or the registration of such common stock for sale and the ability of our stockholders, including Stifel and the Cyrus Funds to sell their respective shares at a price per share that is below our then current net asset value per share could adversely affect the prevailing market prices for our common stock. If this occurs and continues, it could impair our ability to raise additional capital through the sale of securities should we desire to do so.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements in this prospectus constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this prospectus involve risks and uncertainties, including statements as to:

Ÿ our future operating results;

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

Ÿ the effect of investments that we expect to make;

Ÿ our contractual arrangements and relationships with Stifel and Cyrus Capital;

Ÿ our contractual arrangements and relationships with lenders and other third parties;

Ÿ actual and potential conflicts of interest with the Adviser;

Ÿ the dependence of our future success on the general economy, interest rates and the effects of each on the industries in which we invest;

Ÿ the ability of our portfolio companies to achieve their objectives or service their debt obligations to us;

Ÿ the use of borrowed money to finance a portion of our investments;

Ÿ the adequacy of our financing sources and working capital;

Ÿ the timing of cash flows, if any, from the operations of our portfolio companies;

Ÿ the ability of the Adviser to locate suitable investments for us and to monitor and administer our investments;

Ÿ the ability of the Adviser to attract and retain highly talented professionals;

Ÿ our ability to qualify and maintain our qualification as a RIC and as a BDC;

Ÿ our ability to obtain exemptive relief from the SEC;

Ÿ our ability to obtain an SBIC license; and

Ÿ the effect of changes to tax legislation and our tax position and other legislative and regulatory changes.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words.

We have based the forward-looking statements included in this prospectus on information available to us on the date of this prospectus. Actual results could differ materially from those anticipated in our forward-looking statements and future results could differ materially from historical performance. We undertake no obligation to revise or update any forward-looking

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statements, whether as a result of new information, future events or otherwise, unless required by law or SEC rule or regulation. 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.

You should understand that, under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)B of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to statements made in connection with any offering of securities pursuant to this prospectus.

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USE OF PROCEEDS

We estimate that the net proceeds we will receive from the sale of 6,666,666 shares of our common stock in this offering will be approximately $95.8 million (or approximately $110.4 million if the underwriters exercise their over-allotment option in full), assuming an initial public offering price of $15.00 per share, after deducting estimated organization and offering expenses of approximately $1,200,000 payable by us. The Adviser has agreed to pay offering expenses incurred by us that exceed $1,200,000 in connection with this offering without recourse against or reimbursement by us.

We intend to use the net proceeds to repay the Cyrus Funds Debt of $         million, which we incurred as part of the merger consideration paid to the Cyrus Funds in connection with the CM Finance Merger. The Cyrus Funds Debt will have a term of five years and will bear interest at a rate of 6.0% per annum. We intend to use the remaining net proceeds to invest in unitranche loans and standalone second and first lien loans and selectively in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments in accordance with our investment objective and for general corporate purposes. We will also pay operating expenses, including management and administrative fees, and may pay other expenses such as due diligence expenses of potential new investments, from the net proceeds of this offering.

We anticipate that we will use substantially all of the net proceeds of this offering for the above purposes within three to six months, depending on the availability of appropriate investment opportunities consistent with our investment objective and market conditions. We cannot assure you we will achieve our expected investment pace.

Pending such use, we intend to invest the net proceeds of this offering primarily in cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less from the date of investment. These temporary investments may have lower yields than our other investments and, accordingly, may result in lower distributions, if any, during such period. See “Regulation—Temporary Investments” for additional information about temporary investments we may make while waiting to make longer-term investments in pursuit of our investment objective.

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DISTRIBUTIONS

To the extent that we have income available, we intend to make quarterly distributions to our stockholders. Our quarterly stockholder distributions, if any, will be determined by our board of directors. Any distribution to our stockholders will be declared out of assets legally available for distribution. Our board of directors intends to declare a distribution of approximately $         per share, for the first calendar quarter of 2014, contingent upon the completion of our initial public offering prior to the end of the first calendar quarter of 2014.

For the period commencing upon the consummation of this offering and ending December 31, 2014, the Adviser has agreed to waive its fees (base management and incentive fee), without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support a minimum dividend payment on shares of common stock outstanding on the relevant dividend payment dates of     % (to be paid on a quarterly basis). For the periods January 1, 2015 to December 31, 2015 and January 1, 2016 to December 31, 2016, the Adviser has agreed to waive its incentive fees, without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support minimum dividend payments on shares of common stock outstanding on the relevant dividend payment dates of     % and     %, respectively (to be paid on a quarterly basis). The annual dividend yield will be based on our initial public offering price per share. Net investment income is defined as GAAP net income before net realized and unrealized gains (losses). Distributions, if any after December 31, 2016, will not be subject to a fee waiver, which could reduce the amount of any such future distributions.

We intend to elect to be treated, and intend to qualify annually thereafter, as a RIC under the Code, beginning with our first taxable year ending December 31, 2014. To obtain and maintain RIC tax treatment, we must distribute at least 90% of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses, if any, to our stockholders. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute during each calendar year an amount at least equal to the sum of: (a) 98% of our net ordinary income for such calendar year; (b) 98.2% of our capital gain net income for the one-year period ending on October 31 of the calendar year; and (c) any net ordinary income and capital gain net income for preceding years that were not distributed during such years and on which we previously paid no U.S. federal income tax.

We currently intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain such capital gains for investment and elect to treat such gains as deemed distributions to you. If this happens, you will be treated for U.S. federal income tax purposes as if you had received an actual distribution of the capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, you would be eligible to claim a tax credit (or in certain circumstances a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. See “Material U.S. Federal Income Tax Considerations.” We cannot assure you that we will achieve results that will permit us to pay any cash distributions, and if we issue senior securities, we may be prohibited from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if such distributions are limited by the terms of any of our borrowings.

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Unless you elect to receive your distributions in cash, we intend to make such distributions in additional shares of our common stock under our dividend reinvestment plan. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, investors participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes. If you hold shares of our common stock in the name of a broker or financial intermediary, you should contact such broker or financial intermediary regarding your election to receive distributions in cash in lieu of shares of our common stock. Any distributions reinvested through the issuance of shares through our dividend reinvestment plan will increase our gross assets on which the base management fee and the incentive fee are determined and paid to the Adviser. See “Dividend Reinvestment Plan.”

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CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2013:

Ÿ on an actual basis;

Ÿ on a pro forma basis to give effect to (a) the issuance of 6,000,000 shares to the Cyrus Funds in connection with the CM Finance Merger at a per share of $15.00 equal to the assumed initial public offering price per share, (b) the issuance of 2,181,818 shares to Stifel upon its funding of its capital commitment to us at a per share of $15.00 equal to the assumed initial public offering price per share, and (c) the repurchase of 2,181,818 shares from the Cyrus Funds immediately prior to pricing this offering at a per share of $15.00 equal to the assumed initial public offering price per share; and

Ÿ on a pro forma, as adjusted, basis to give effect to the sale of 6,666,666 shares of our common stock in this offering at an assumed initial public offering price of $15.00 per share after deducting the estimated organization and offering expenses of approximately $1,200,000 payable by us and the repayment of the Cyrus Funds Debt.

	As of September 30, 2013
	CM Finance  LLC Actual		CM Finance Inc Pro  Forma		Pro Forma, as Adjusted
	(dollars in thousands)
Assets
Cash and cash equivalents	$	33,879	$	51,085	$	127,235
Investments, at fair value		132,909		132,909		132,909
Other assets		4,918		4,918		4,918
Total assets (1)	$	171,706	$	188,912	$	265,062
Liabilities
Note payable	$	76,500	$	76,500	$	76,500
Other liabilities		2,412		22,412		2,412
Total liabilities	$	78,912	$	98,912	$	78,912
Stockholders’ equity
Members’ capital contributions	$	92,794		—		—
Common stock, par value $0.001 per share, 1,000 authorized, actual; 100,000,000 authorized, pro forma and pro forma as adjusted; 0 shares issued and outstanding, actual; 6,000,000 issued and outstanding, pro forma; and 12,666,666 issued and outstanding, pro forma as adjusted		—	$	90,000	$	185,800
Total stockholders’ equity		92,794		90,000		185,800
Total liabilities and stockholders’ equity	$	171,706	$	188,912	$	264,062
Net asset value per share	$	—	$	15.00	$	14.67

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DILUTION

The dilution to investors in this offering is represented by the difference between the offering price per share of our common stock and the pro forma net asset value per share of our common stock after this offering. Net asset value per share is determined by dividing our net asset value, which is our total tangible assets less total liabilities, by the number of outstanding shares of our common stock.

Immediately after the issuance of 6,000,000 shares of our common stock in connection with the CM Finance Merger, the issuance of 2,181,818 shares of our common stock to Stifel upon funding its capital commitment to us, the repurchase of 2,181,818 shares from the Cyrus Funds, our net asset value will be $90.0 million, or approximately $15.00 per share. After giving effect to the sale of the shares of our common stock to be sold in this offering (based on an initial public offering price of $15.00 per share), and the deduction of estimated organizational and offering expenses, our pro forma net asset value would be approximately $185.8 million, or $14.67 per share of common stock, representing an immediate decrease in net asset value of $0.33 per share, or 2.2%, to shares sold in this offering. The foregoing assumes no exercise of the underwriters’ option to purchase additional shares. If the underwriters’ option to purchase additional shares is exercised in full, there would be an immediate decrease in net asset value of $0.31 per share, or 2.1%, to shares sold in this offering.

The following table illustrates the dilution to the shares on a per share basis:

Assumed initial public offering price per share	$	15.00
Net asset value after completion of the formation transactions	$	15.00
Decrease in net asset value attributable to this offering	$	0.33
Pro forma net asset value upon completion of this offering	$	14.67
Dilution per share to stockholders participating in this offering (without exercise of the underwriters’ option to purchase additional shares)	$	0.33

The following table sets forth information with respect to the shares prior to and following this offering (without exercise of the underwriters’ option to purchase additional shares and assuming an initial public offering price of $15.00 per share):

	Shares Purchased					Total Consideration					Avg. Price Per Share
	Number		%			Amount		%
Shares issued in connection with the CM Finance Merger		3,818,182		30.1	%	$	57,272,273		30.1	%	$	15.00
Shares issued to Stifel upon funding of its capital commitment to us		2,181,818		17.2	%		32,727,273		17.2	%	$	15.00
Shares sold in this offering		6,666,666		52.6	%		100,000,000		52.6	%	$	15.00
Total pro forma, as adjusted, shares outstanding(1)		12,666,666		100.0	%	$	190,000,000		100.0	%	$	15.00

(1) Total pro forma, as adjusted, shares reflects the repurchase of shares in the CM Finance Merger issued to the Cyrus Funds using the proceeds from the Stifel purchase of shares from us.

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The pro forma net asset value per share upon completion of this offering (without exercise of the underwriters’ option to purchase additional shares and assuming an initial public offering price of $15.00 per share) is calculated as follows:

Numerator:
Net asset value upon completion of the formation transactions Assumed net proceeds from this offering	$ $	90,000,000 95,800,000
Total pro forma net assets	$	185,800,000
Denominator:
Shares issued in connection with the formation transactions		6,000,000
Shares included in this offering		6,666,666
Total pro forma, as adjusted, shares outstanding		12,666,666

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this prospectus.

We were formed in February 2012 and commenced operations in March 2012 as CM Finance LLC, a Maryland limited liability company. Immediately prior to the pricing of this offering and prior our election to be regulated as a BDC, CM Finance LLC will be merged with and into CM Finance Inc, a Maryland corporation, that is an externally managed, non-diversified closed-end management investment company that intends to file an election to be regulated as a BDC, under the 1940 Act. We also intend to elect to be treated as a RIC, under Subchapter M of the Code, for U.S. federal income tax purposes. We are externally managed by the Adviser, which will also provide the administrative services necessary for us to operate.

When reading this prospectus, it is important to note that the historical financial statements and other historical financial information included herein are those of CM Finance LLC. Prior to the CM Finance Merger and this offering, CM Finance LLC did not pay any advisory fees and was not regulated as a BDC under the 1940 Act. Therefore, CM Finance LLC has not been subject to certain restrictions imposed by the 1940 Act on BDCs prior to the CM Finance Merger and the consummation of this offering. If CM Finance LLC had been regulated as a BDC under the 1940 Act, CM Finance LLC’s performance may have been adversely affected. In addition, prior to our election to be regulated as a BDC, we have been externally managed by CM Investment Partners, LP. Although, CM Investment Partners, LP was led by Messrs. Mauer and Jansen, the remaining investment team of CM Investment Partners, LP was composed of different investment professionals than the current Investment Team of the Adviser, which may result in materially different investment performance.

Overview

We are a specialty finance company that invests primarily in the debt of middle-market companies. We seek to invest primarily in middle-market companies that have annual revenues of at least $50 million and EBITDA of at least $20 million. Our investment objective is to maximize the total return to stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. We are an externally managed, closed-end, non-diversified management investment company that intends to file an election to be regulated as a BDC under the 1940 Act. We intend to elect to be treated as a RIC under Subchapter M of the Code for U.S. federal income tax purposes.

We were formed on February 15, 2012 as a limited liability company and commenced operations in March 2012. In March 2012, we were originally capitalized with commitments of $50 million from the Cyrus Funds, which we refer to as our initial private placement. Subsequent to our initial private placement, the Cyrus Funds increased their aggregate capital commitment to $110 million. As of September 30, 2013 we had capital commitments of $110 million of which $105.3 million, or 95.7%, have been used to make investments in accordance with our investment strategy. As of the date of this prospectus, we have called all outstanding capital commitments from the Cyrus Funds, $         million of which, or         %, have been used to make investments in accordance with our investment strategy.

On December 17, 2013, we entered into the Stifel Arrangement pursuant to which Stifel made a capital commitment to us in an amount up to $40.0 million. We intend to call $32.7 million of Stifel’s capital commitment immediately after the CM Finance Merger and prior to our election to be

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regulated as a BDC and the completion of this offering. We intend to use the investment by Stifel to repurchase up to $32.7 million of the Cyrus Funds’ interest in us, which will reduce the Cyrus Funds’ investment in us to $70.0 million assuming an offering of $100 million. We do not intend to call the remaining portion of Stifel’s capital commitment. We refer to Stifel’s investment in us and the CM Finance Merger as the “formation transactions.”

Immediately prior to pricing this offering and prior to our election to be regulated as a BDC, through a series of transactions, CM Finance LLC will be merged with and into CM Finance Inc, a Maryland corporation, leaving CM Finance Inc as the surviving entity. In connection with CM Finance Merger, we will issue approximately 6.0 million shares of common stock of CM Finance Inc to the Cyrus Funds at a per share price equal to the per share initial offering price and approximately $20.0 million in debt (the “Cyrus Funds Debt”) having an aggregate value of approximately $110 million (which represents the Cyrus Funds’ share of our net asset value as of the most recent quarter end for which financial statements have been included in this prospectus, adjusted for earnings, appreciation, depreciation, cash contributions and distributions following such quarter but before the closing of the CM Finance Merger). The Cyrus Funds Debt will bear interest at rate of 6.0% per annum and will become due on the fifth anniversary of the closing of the CM Finance Merger. We expect to use a portion of the net proceeds of this offering to repay the Cyrus Funds Debt.

Upon completion of the formation transactions and completion of our initial public offering, Stifel will own 2,181,818 shares of our common stock, or approximately 17.2% of our total outstanding common stock and the Cyrus Funds will own 3,818,182 shares of our common stock, or approximately 30.1% of our total outstanding common stock, assuming an offering of $100 million.

Financing Facility

On May 23, 2013, as amended on June 6, 2013, we, through CM SPV, entered into the $76.5 million Term Financing due May 22, 2016 with UBS. On December 4, 2013, we amended the Term Financing to increase the size of the facility by adding the $50 million Revolving Financing, which expires on December 4, 2015. We paid interest on the face amount of the Term Financing monthly at a rate of one-month LIBOR plus a spread of 1.63% per annum from May 23, 2013 to July 14, 2013. We paid interest on the face amount of the Term Financing monthly at a rate of LIBOR plus 1.97% per annum from July 15, 2013 to August 14, 2013. As of August 14, 2013 through the term of the Term Financing, we pay interest on the face amount of the term portion of the Term Financing monthly at a rate of 2.85% per annum. The Revolving Financing bears interest at a rate of (a) 2.10% per annum from December 4, 2013 through December 4, 2014 and (b) 1.60% per annum from December 5, 2014 through the term of the Revolving Financing. With respect to undrawn amounts, we will pay interest monthly on the daily average of amounts that are not drawn on the Revolving Financing at a rate of 0.50%. The Financing Facility is collateralized by a portion of our assets.

In connection with the Financing Facility we organized CM SPV, a consolidated wholly owned bankruptcy remote special-purpose vehicle in the Cayman Islands to purchase the assets through the issuance and sale of notes secured by such assets (the “Notes”). In connection with the Term Financing, CM SPV issued to UBS Notes with a face value of $76.5 million, which represented 51% of the Notes issued and outstanding, for $76.5 million in cash and CM SPV issued to us Notes with a face value of $73.5 million, which represented 49% of the Notes issued and outstanding, in exchange for assets with a fair market value equal to the $73.5 million face amount of the purchased Notes. In addition, in connection with the Revolving Financing, CM SPV issued to UBS additional Notes with a face value of $50 million, which represent 40% of the aggregate Notes issued and outstanding, and CM SPV issued to us additional Notes with a face value of $75 million, which represent 60% of the

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aggregate Notes issued and outstanding. Under the terms of the indenture under which the Notes are issued (the “Indenture”), the holders of the Notes are entitled to periodic interest payments equal to their pro rata portion of the interest collected on the assets held by CM SPV.

Under the terms of the Financing Facility, we and UBS entered into a total return swap transaction under which we will receive from UBS all interest distributions made on the Notes while UBS receives the financing rate. This also incorporates the material terms relating to mark-to-market and collateral posting requirements (including the posting of our portion of the Notes to UBS as security under the total return swap). Under the terms of the Indenture, and subject to certain limitations contained therein, we may access additional funding under the Financing Facility through subsequent sales to CM SPV of debt investments, which will then become part of the portfolio of assets securing the Notes.

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount we have available to invest as well as the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity, the general economic environment and the competitive environment for the types of investments we make.

To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. As a RIC, we generally will not have to pay corporate-level taxes on any income we distribute to our stockholders.

As a BDC, we will be required to comply with certain regulatory requirements. For instance, we generally will have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less.

As a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). Qualifying assets include investments in “eligible portfolio companies.” Under the relevant SEC rules, the term “eligible portfolio company” includes all private companies, companies whose securities are not listed on a national securities exchange, and certain public companies that have listed their securities on a national securities exchange and have a market capitalization of less than $250 million, in each case, the company must be organized in the United States.

Revenues

We generate revenues primarily in the form of interest on the debt we hold. We also generate revenue from dividends on our equity interests and capital gains on the sale of warrants and other debt or equity interests that we acquire. Our investments in fixed income instruments generally have an expected maturity of three to five years, although we have no lower or upper constraint on maturity. Interest on our debt investments is generally payable quarterly or semi-annually. Payments of principal of our debt investments may be amortized over the stated term of the investment, deferred for several years or due entirely at maturity. In some cases, our debt investments and preferred stock investments may defer payments of cash interest or dividends or PIK. Any outstanding principal amount of our debt investments and any accrued but unpaid interest will generally become due at the maturity date. In addition, we may generate revenue in the form of prepayment fees, commitment, origination, structuring or due diligence fees, fees for providing significant managerial assistance, consulting fees and other investment related income.

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Expenses

Our primary operating expenses include the payment of a base management fee and, depending on our operating results, the incentive fees, expenses reimbursable under the Investment Advisory Agreement, administration fees and the allocable portion of overhead under the Administration Agreement. See “Management Agreements —Investment Advisory Agreement” and “—Administration Agreement.” The base management fee and incentive compensation remunerates the Adviser for work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other out-of-pocket costs and expenses of our operations and transactions, including, without limitation, those relating to:

Ÿ our organization, the formation transactions and this offering;

Ÿ calculating our net asset value (including the cost and expenses of any independent valuation firm);

Ÿ fees and expenses payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments;

Ÿ interest payable on debt, if any, incurred to finance our investments and expenses related to unsuccessful portfolio acquisition efforts;

Ÿ other offerings of our common stock and other securities;

Ÿ administration fees and expenses, if any, payable under the Administration Agreement (including our allocable portion of the Adviser’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);

Ÿ transfer agent, dividend agent and custodial fees and expenses;

Ÿ costs associated with our reporting and compliance obligations under the 1940 Act, the Securities Exchange Act of 1934, as amended, and other applicable federal and state securities laws, and stock exchange listing fees;

Ÿ fees and expenses associated with independent audits and outside legal costs;

Ÿ federal, state and local taxes;

Ÿ independent directors’ fees and expenses;

Ÿ costs of any reports, proxy statements or other notices to or communications and meetings with stockholders;

Ÿ costs associated with investor relations;

Ÿ costs and fees associated with any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

Ÿ direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff; and

Ÿ all other expenses incurred by us or the Adviser in connection with administering our business.

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Critical accounting policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. Management considers the following critical accounting policies important to understanding the financial statements. In addition to the discussion below, our critical accounting policies are further described in the notes to our financial statements.

Valuation of portfolio investments

We value our portfolio investments at fair value based upon the principles and methods of valuation set forth in policies adopted by our board of directors. Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Market participants are buyers and sellers in the principal (or most advantageous) market for the asset that (a) are independent of us, (b) are knowledgeable, having a reasonable understanding about the asset based on all available information (including information that might be obtained through due diligence efforts that are usual and customary), (c) are able to transact for the asset, and (d) are willing to transact for the asset or liability (that is, they are motivated but not forced or otherwise compelled to do so).

Investments for which market quotations are readily available are valued at such market quotations unless the quotations are deemed not to represent fair value. We generally obtain market quotations from recognized exchanges, market quotation systems, independent pricing services or one or more broker­ dealers or market makers. However, short term debt investments with remaining maturities within 90 days are generally valued at amortized cost, which approximates fair value.

Debt and equity securities for which market quotations are not readily available or for which market quotations are deemed not to represent fair value are valued at fair value as determined in good faith by our board of directors. Because a readily available market value for many of the investments in our portfolio is often not available, we value many of our portfolio investments at fair value as determined in good faith by our board of directors using a consistently applied valuation process in accordance with a documented valuation policy that has been reviewed and approved by our board of directors. Due to the inherent uncertainty and subjectivity of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments and may differ materially from the values that we may ultimately realize. In addition, changes in the market environment and other events may have differing impacts on the market quotations used to value some of our investments than on the fair values of our investments for which market quotations are not readily available. Market quotations may also be deemed not to represent fair value in certain circumstances 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. Examples of these events could include cases where a security trades infrequently, causing a quoted purchase or sale price to become stale, where there is a “forced” sale by a distressed seller, where market quotations vary substantially among market makers, or where there is a wide bid-ask spread or significant increase in the bid­ask spread.

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With respect to investments for which market quotations are not readily available, our board of directors undertakes a multi-step valuation process each quarter, as described below:

Ÿ Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Adviser responsible for the portfolio investment;

Ÿ Preliminary valuation conclusions are then documented and discussed with our senior management and the Adviser;

Ÿ At least once each quarter, the valuation for each portfolio investment is reviewed by an independent valuation firm;

Ÿ The valuation committee of our board of directors then reviews these preliminary valuations; and

Ÿ The board of directors then discusses valuations and determines the fair value of each investment in our portfolio in good faith, based on the input of the Adviser, the independent valuation firm and the valuation committee.

Those investments for which market quotations are not readily available or for which market quotations are deemed not to represent fair value are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in determining the fair value of our investments include, as relevant and among other factors: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, merger and acquisition comparables, our principal market (as the reporting entity) and enterprise values.

When valuing all of our investments, we strive to maximize the use of observable inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

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Our investments may be categorized based on the types of inputs used in their valuation. The level in the GAAP valuation hierarchy in which an investment falls is based on the lowest level input that is significant to the valuation of the investment in its entirety. Investments are classified by GAAP into the three broad levels as follows:

Level I	Investments valued using unadjusted quoted prices in active markets for identical assets.
Level II	Investments valued using other unadjusted observable market inputs, e.g. quoted prices in markets that are not active or quotes for comparable instruments.
Level III	Investments that are valued using quotes and other observable market data to the extent available, but which also take into consideration one or more unobservable inputs that are significant to the valuation taken as a whole.

As of September 30, 2013, all of our investments were Level III investments valued based on valuations by the Adviser.

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the financial statements.

Revenue recognition

Interest and dividend income, including income paid in kind, is recorded on an accrual basis to the extent that such amounts are determined to be collectible. Origination, structuring, closing, commitment and other upfront fees earned with respect to capital commitments are generally amortized or accreted into interest income over the life of the respective debt investment. Other fees, including certain amendment fees, prepayment fees and commitment fees on broken deals, are recognized as earned. Prepayment fees and similar income received upon the early repayment of a loan or debt security are included in interest income.

Certain of our debt investments are purchased at a considerable discount to par as a result of the underlying credit risks and financial results of the issuer, as well as general market factors that influence the financial markets as a whole. GAAP generally requires that discounts on the acquisition of corporate bonds, municipal bonds and treasury bonds be amortized using the effective-interest or constant-yield method. GAAP also requires that we consider the collectability of interest when making accruals. Accordingly, when accounting for purchase discounts, we recognize discount accretion income when it is probable that such amounts will be collected.

Net realized gains or losses and net change in unrealized appreciation or depreciation

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Realized gains and losses are computed using the specific identification method. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Payment-in-Kind Interest

We have investments in our portfolio that contain a PIK interest provision. Any PIK interest is added to the principal balance of such investments and is recorded as income, if the portfolio

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company valuation indicates that such PIK interest is collectible. In order to maintain our status as a RIC, substantially all of this income must be paid out to stockholders in the form of dividends, even if we have not collected any cash.

Portfolio and investment activity

Portfolio Composition

At September 30, 2013, our investment portfolio of $132.9 million (at fair value) consisted of investments in 12 portfolio companies, of which 54.8% were first lien investments, 44.6% were second lien investments and 0.6% were warrant positions. Our average portfolio company investment at fair value was approximately $11.1 million. Our largest portfolio company investment by fair value was $20.0 million.

At September 30, 2013, 71.1% of our debt investments bore interest based on floating rates (subject to interest rate floors), such as LIBOR, and 28.9% bore interest at fixed rates. The weighted average yield on all of our debt investments at September 30, 2013 was approximately 11.06% as if our unfunded obligations were fully funded and is weighted based on each respective investment’s par amount. The weighted average yield was computed using the effective interest rates for all of our debt investments to maturity from September 30, 2013.

The industry composition of our portfolio at fair value at September 30, 2013 was as follows:

Industry	Percentage of Total Investments
Airlines		8.14	%
Automobiles and Components		10.56
Commercial Services		3.66
Diversified Financial Services		6.32
Healthcare-Products/Services		15.05
Oil and Gas		21.35
Pipelines		7.62
Telecommunications		18.24
Trucking and Leasing		9.06
Total		100.00	%

During the three months ended September 30, 2013, we made five new investments totaling approximately $29.3 million, three of which were additions to an existing investment. Of these new investments, 28.9% consisted of first lien investments and 71.1% consisted of second lien investments at fair value.

At June 30, 2013, our investment portfolio of $119.2 million (at fair value) consisted of investments in eleven portfolio companies, of which 67.3% were first lien investments, 32.2% were second lien investments and 0.5% were warrant positions. Our average portfolio company investment at fair value was approximately $10.8 million. Our largest portfolio company investment by fair value was $18.1 million.

At June 30, 2013, 68.0% of our debt investments bore interest based on floating rates (subject to interest rate floors), such as LIBOR, and 32.0% bore interest at fixed rates. The weighted average yield on all of our debt investments at June 30, 2013 was approximately 10.58%. The weighted

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average yield was computed using the effective interest rates for all of our debt investments at fair value, plus the yield to maturity from June 30, 2013 of all of our debt investments, including our unfunded obligations, as if our unfunded obligations were fully funded and is weighted based on each respective investment’s par amount.

The industry composition of our portfolio at fair value at June 30, 2013 was as follows:

Industry	Percentage of Total Investments
Airlines		9.08	%
Automobiles and Components		13.15
Diversified Financial Services		5.51
Oil and Gas		23.56
Pipelines		8.43
Telecommunications		30.31
Trucking and Leasing		9.96
Total		100	%

During the year ended June 30, 2013, we invested approximately $100.8 million in eleven new portfolio companies. Of these new investments, 60.9% consisted of first lien investments and 39.1% consisted of second lien investments at fair value.

Asset Quality

In addition to various risk management and monitoring tools, we use the Adviser’s investment rating system to characterize and monitor the credit profile and expected level of returns on each investment in our portfolio. This investment rating system uses a five-level numeric rating scale. The following is a description of the conditions associated with each investment rating:

Investment Rating 1	Investments that are performing above expectations, and whose risks remain favorable compared to the expected risk at the time of the original investment.
Investment Rating 2	Investments that are performing within expectations and whose risks remain neutral compared to the expected risk at the time of the original investment. All new loans will initially be rated 2.
Investment Rating 3	Investments that are performing below expectations and that require closer monitoring, but where no loss of return or principal is expected. Portfolio companies with a rating of 3 may be out of compliance with their financial covenants.
Investment Rating 4	Investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are often in workout. Investments with a rating of 4 will be those for which some loss of return but no loss of principal is expected.
Investment Rating 5	Investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are almost always in workout. Investments with a rating of 5 will be those for which some loss of return and principal is expected.

If the Adviser determines that an investment is underperforming, or circumstances suggest that the risk associated with a particular investment has significantly increased, the Adviser will

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increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions. While the investment rating system identifies the relative risk for each investment, the rating alone does not dictate the scope and/or frequency of any monitoring that will be performed. The frequency of the Adviser’s monitoring of an investment will be determined by a number of factors, including, but not limited to, the trends in the financial performance of the portfolio company, the investment structure and the type of collateral securing the investment.

The following table shows the investment rankings of the loans in our portfolio:

	As of September 30, 2013							As of June 30, 2013
Investment Rating	Fair Value		% of Portfolio			Number of Investments		Fair Value		% of Portfolio			Number of Investments
1	$	—		—	%		—	$	24,551,299		20.7	%		2
2		132,142,182		100			12		94,102,014		79.3			9
3		—		—			—		—		—			—
4		—		—			—		—		—			—
5		—		—			—		—		—			—
Total	$	132,142,182		100.0	%		12	$	118,653,313		100.0	%		11

Results of operations of CM Finance LLC

Comparison of the Three Months Ended September 30, 2013 and September 30, 2012

Investment income

Investment income, attributable to interest and fees on our debt investments, for the three months ended September 30, 2013 increased to $3.8 million from $1.0 million for the three months ended September 30, 2012, due to the growth of the portfolio from the comparable period.

Expenses

Total expenses for the three months ended September 30, 2013 increased to $671,296 from $106,611 for the three months ended September 30, 2012, due primarily to the interest expense on the Financing Facility and increased legal fees.

CM Finance LLC does not currently pay a management or incentive fee. CM Finance LLC plans to merge with and into CM Finance Inc, an entity that will pay management and incentive fees. If CM Finance LLC had paid management fees on the same terms that CM Finance Inc is expected to pay management fees, it would have paid $561,818 and $109,500 for the three months ended September 30, 2013 and September 30, 2012, respectively. If CM Finance LLC had paid incentive fees on the same terms that CM Finance Inc is expected to pay incentive fees, it would have paid $469,521 and $154,815 for the three months ended September 30, 2013 and September 30, 2012, respectively.

Net investment income

Net investment income increased to $3.1 million for the three months ended September 30, 2013 from $895,323 for the three months ended September 30, 2012, primarily due to an increase in investment income.

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Net realized and unrealized gain or loss

The net realized gain on investments increased to $258,176 for the three months ended September 30, 2013 from a net realized loss of $(43,798) for the three months ended September 30, 2012, primarily due to the call premium associated with the repayment of a loan during the quarter.

Net change in unrealized appreciation/depreciation on investments

We recorded a change in net unrealized depreciation of $(881,545) for the three months ended September 30, 2013, compared to net unrealized appreciation of $56,205 for the three months ended September 30, 2012, which reflects the net change in the fair value of our investment portfolio relative to its cost basis over this period.

Net increase in members’ capital resulting from operations

Net increase in net assets resulting from operations totaled $2.5 million for the three months ended September 30, 2013, compared to $907,730 for the three months ended September 30, 2012, and is primarily related to an increase in interest income and an increase in net realized gains generated from our investment portfolio offset by our operating expenses and a decrease in net unrealized appreciation on our investment portfolio.

Comparison of fiscal year ended June 30, 2013 and the period from March 7, 2012 to June 30, 2012

Investment income

Investment income, attributable to interest and fees on our debt investments, for the year ended June 30, 2013 increased to $6.8 million from $501,856 for the partial year ended June 30, 2012, due to the growth of the portfolio during the full fiscal year 2013 and as compared to a partial fiscal year for 2012.

Expenses

Total expenses, consisting primarily of legal fees and professional fees, increased to $630,686 for the year ended June 30, 2013 from $197,817 for the partial year ended June 30, 2012, due in part to fiscal 2013 being a full fiscal year as opposed to a partial fiscal year in 2012.

CM Finance LLC does not currently pay a management or incentive fee. CM Finance LLC plans to merge with and into CM Finance Inc, an entity which will pay management and incentive fees. If CM Finance LLC had paid management fees on the same terms that CM Finance Inc is expected to pay management fees, it would have paid $74,375 for the period ended June 30, 2012 and $965,280 for the year ended June 30, 2013. If CM Finance LLC had paid incentive fees on the same terms that CM Finance Inc is expected to pay incentive fees, it would have paid $23 for the period ended June 30, 2012 and $669,170 for the year ended June 30, 2013.

Net investment income

Net investment income increased to $6.1 million for the year ended June 30, 2013 from $304,039 for the partial year ended June 30, 2012.

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Net realized and unrealized gain or loss

The net realized gain on investments increased to $781,262 for the year ended June 30, 2013 from $110 for the partial year ended June 30, 2012.

Net income

Net income increased to $8.0 million for the year ended June 30, 2013 from $297,692 for the partial year ended June 30, 2012, as a result of an increase in net investment income.

Net change in unrealized appreciation/depreciation on investments

We recorded an increase in net unrealized appreciation of $1.1 million for the year ended June 30, 2013, and an increase in net unrealized depreciation of $(6,457) for the year ended June 30, 2012, which reflects the net change in the fair value of our investment portfolio relative to its cost basis over these periods.

Net increase in net assets resulting from operations

Net increase in net assets resulting from operations totaled $8.0 million and $297,692 for the years ended June 30, 2013 and 2012, and is primarily related to interest income and an increase in net unrealized appreciation generated from our investment portfolio offset by our operating expenses and a decrease in net unrealized appreciation on our investment portfolio.

Liquidity and capital resources

In March 2012, we were originally capitalized with a capital commitment of $50 million from the Cyrus Funds. As of September 30, 2013, we had capital commitments of $110 million of which $105.3 million, or 95.7% of the aggregate capital commitments, have been used to make investments in accordance with our investment strategy. As of the date of this prospectus, we have called all outstanding capital commitments from the Cyrus Funds, $         million of which, or         %, have been used to make investments in accordance with our investment strategy. In December 2013, Stifel made a capital commitment to us in an amount of up to $40.0 million. We intend to call $32.7 million of Stifel’s capital commitment for purposes of repurchasing $32.7 million of the Cyrus Funds’ interest in us each at a per share price equal to the assumed initial public of $15.00 per share. We do not intend to call the remaining portion of Stifel’s capital commitment. The issuance of our common stock in this offering will significantly increase our capital resources.

We intend to use the net proceeds from this offering to invest in unitranche loans and standalone second and first lien loans with an emphasis on floating rate debt issued by middle-market companies in accordance with our investment objective and for general corporate purposes. We will also pay operating expenses, including management and administrative fees, and may pay other expenses such as due diligence expenses of potential new investments, from the net proceeds of this offering.

We anticipate that substantially all of the net proceeds of this offering will be used for these purposes within three to six months, depending on the availability of appropriate investment opportunities consistent with our investment objective and market conditions. Pending such use, we will invest the remaining net proceeds of this offering primarily in cash, cash equivalents, U.S. government securities and other high-quality debt instruments that mature in one year or less. These securities may have lower yields than the types of investments we would typically make in accordance with our investment objective and, accordingly, may result in lower returns or distributions, if any, during such period.

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Regulated Investment Company Status and Distributions

We intend to elect to be treated as a RIC under Subchapter M of the Code for the fiscal year ending June 30, 2014. If we 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. Dividends declared and paid by us in a year may differ from taxable income for that year as such dividends 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 qualify for 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). If we qualify as a RIC, we will also be subject to a federal excise tax, based on distributive requirements of our taxable income on a calendar year basis.

We intend to distribute to our stockholders between 90% and 100% of our annual taxable income (which includes our taxable interest and fee income). However, the covenants contained in the Financing Facility may prohibit us from making distributions to our stockholders, and, as a result, could hinder our ability to satisfy the distribution requirement. 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 BDC under the 1940 Act and due to provisions in Financing Facility. 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.

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Off-Balance Sheet Arrangements

As of September 30, 2013 and June 30, 2013, we did not engage in any off-balance sheet financing or hedging arrangements, other than the commitments and contingencies described above.

Recent Developments

On December 17, 2013, we entered into the Stifel Arrangement, pursuant to which Stifel made a capital commitment to us in an amount of up to $40.0 million. We intend to call $32.7 million of Stifel’s capital commitment for purposes of repurchasing $32.7 million of the interests of the Cyrus Funds in us, immediately after the CM Finance Merger and prior to our election to be regulated as a BDC and the pricing of this offering. Stifel also owns 20% of the Adviser.

Since September 30, 2013, we made four new investments totaling $56.0 million, one of which was an addition to an existing investment, which increased our investment portfolio to $189.3 million and the average investment per company to $12.6 million.

Ÿ $12.0 million investment in a second lien loan of CT Technologies Intermediate Holdings, Inc.;

Ÿ $20.0 million additional investment in a first lien, fully funded revolving credit of Endeavour International Corp.

Ÿ $9.0 million investment in a second lien term loan of Bennu Oil & Gas, LLC.; and

Ÿ $15.0 million investment in a second lien term loan of TNT Crane & Rigging.

In addition, we sold our $12.3 million investment in YRC Worldwide Inc. Letter of Credit facility. This investment was unfunded.

On December 4, 2013, we amended the terms of the Financing Facility to add the $50.0 million Revolving Financing, which expires on December 4, 2015. The Revolving Financing bears interest at a rate of (a) 2.10% per annum from December 4, 2013 through December 4, 2014 and (b) 1.60% per annum from December 5, 2014 through the term of the Revolving Financing. With respect to undrawn amounts, we will pay interest monthly on the daily average of amounts that are not drawn on the Revolving Financing at a rate of 0.50%.

Quantitative and qualitative disclosure about market risk

We are subject to financial market risks, including changes in interest rates. At September 30, 2013, 71.1% of our debt investments bore interest based on floating rates, such as LIBOR, EURIBOR, the Federal Funds Rate or the Prime Rate. The interest rates on such investments generally reset by reference to the current market index after one to six months. Floating rate investments subject to a floor generally reset by reference to the current market index after one to six months only if the index exceeds the floor. An additional 13.6% of our portfolio as of September 30, 2013 was invested in a fixed rate investment that matures within 12 months. Due to its short tenor, this investment is not significantly susceptible to changes in interest rates.

Generally, we believe higher yielding assets such as those in our investment portfolio do not necessarily follow a linear interest rate relationship and are less sensitive in price to interest rate changes than many other debt investments. Assuming the composition of a portfolio similar to the

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September 30, 2013 portfolio, a 1% change in interest rates would not significantly impact the value of our portfolio. Variable-rate instruments subject to a floor generally reset periodically to the applicable floor and, in the case of investments in our portfolio, quarterly to a floor based on LIBOR, only if the floor exceeds the index. Under these loans, we do not benefit from increases in interest rates until such rates exceed the floor and thereafter benefit from market rates above any such floor.

Although management believes that this analysis is indicative of our existing sensitivity to interest rate changes, it does not adjust for changes in the credit markets, the size, credit quality or composition of the assets in our portfolio and other business developments, including borrowing, that could affect the net increase in net assets resulting from operations, or net income. It also does not adjust for the effect of the time lag between a change in the relevant interest rate index and the rate adjustment under the applicable loan. Accordingly, we can offer no assurances that actual results would not differ materially from the statement above.

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THE COMPANY

We are a specialty finance company that invests primarily in the debt of U.S. middle-market companies. We were formed in February 2012 and commenced operations in March 2012. We are externally managed by CM Investment Partners LLC. The Adviser is led by Messrs. Mauer and Jansen, who together have over 40 years of experience in the leveraged debt markets. Our investment objective is to maximize total return to stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns.

We seek to invest primarily in middle-market companies that have annual revenues of at least $50 million and EBITDA of at least $20 million. We focus on companies with leading market positions, significant asset or franchise values, strong free cash flow and experienced senior management teams, with emphasis on companies with high-quality sponsors. Our investments will typically range in size from $5 million to $25 million. We expect that our portfolio companies will use our capital for organic growth, acquisitions, market or product expansion, refinancings, and/or recapitalizations. We invest, and intend to continue to invest, in unitranche loans and standalone second and first lien loans, with an emphasis on floating rate debt. Unitranche loans are loans structured as first lien loans with certain characteristics of mezzanine loan risk in one security. We will also selectively invest in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interests as part of a broader investment relationship.

We strive to maintain a strong focus on credit quality, investment discipline and investment selectivity. We believe that investing in the debt of private middle-market companies generally provides a more attractive relative value proposition than investing in broadly syndicated debt due to the conservative capital structures and superior default and loss characteristics typically associated with middle-market companies. We believe that, because private middle-market companies have limited access to capital providers, debt investments in these companies typically carry above-market interest rates and include more favorable protections, resulting in attractive risk-adjusted returns across credit cycles while better preserving capital. The companies in which we invest typically are highly leveraged, and, in most cases, our investments in such companies are not rated by national rating agencies. If such investments were rated, we believe that they would likely receive a rating below investment grade (i.e., below BBB or Baa), which are often referred to as “junk.”

The Adviser’s Investment Team is led by Messrs. Mauer and Jansen, who are supported by 17 additional investment professionals. The members of the Investment Team have over 200 combined years of structuring customized debt solutions for middle-market companies, which we believe will enable us to generate favorable returns across credit cycles with an emphasis on preserving capital. The members of the Investment Team have extensive networks for sourcing investment opportunities through direct corporate relationships and relationships with private equity firms, restructuring advisors, law firms, boutique advisory firms and distressed/specialty lenders. The members of the Investment Team also have extensive experience across various industries, including aviation, cable, defense, healthcare, media, oil and gas, power, retail, telecommunications, trucking and asset-backed special situations. In addition, Mr. Jansen has extensive experience restructuring specific debt investments as a portfolio manager, including while at Stanfield Capital Partners, and Mr. Mauer has considerable managerial experience, including having led a restructuring and asset-based lending group at Citigroup Inc. Messrs. Mauer and Jansen have developed an investment process for reviewing lending opportunities, structuring transactions and monitoring investments throughout multiple credit cycles. As a result, we believe we will be able to achieve appropriate risk-adjusted returns by investing in companies that have

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restructured but do not have sufficient track records to receive traditional lending terms from a commercial bank or the broadly syndicated leveraged finance market.

As of September 30, 2013, our portfolio consisted of debt and equity investments in 12 portfolio companies with a fair value of $132.9 million. As of September 30, 2013, our portfolio consisted of 54.8% first lien investments, 44.6% second lien investments and 0.6% warrant positions, and the debt investments had a weighted average annualized yield of approximately 10.72%. The weighted average yield was computed using the effective interest rates for all of our debt investments at fair value, plus the yield to maturity from September 30, 2013 of all of our debt investments, including our unfunded obligations as if our unfunded obligations were fully funded and is weighted based on each respective investment’s par amount. See “Portfolio Companies.”

The industry composition of our portfolio at fair value at September 30, 2013 was as follows:

Industry	Percentage of Total Investments
Airlines		8.14	%
Automobiles and Components		10.56
Commercial Services		3.66
Diversified Financial Services		6.32
Healthcare-Products/Services		15.05
Oil and Gas		21.35
Pipelines		7.62
Telecommunications		18.24
Trucking and Leasing		9.06
Total		100.00	%

We have, through CM SPV, our wholly owned subsidiary, a $76.5 million Financing Facility, which expires on May 22, 2016, with UBS. The Financing Facility is collateralized by a portion of the debt investments in our portfolio. We pay interest on the face amount of the Financing Facility monthly at a rate of one-month LIBOR plus 2.85% per annum. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.”

The Adviser

Upon our election to be regulated as a BDC, CM Investment Partners LLC will become our external investment adviser. Prior to our election to be regulated as a BDC, CM Investment Partners, LP has served as our investment adviser. The Adviser is responsible for sourcing investment opportunities, conducting industry research, performing diligence on potential investments, structuring our investments and monitoring our portfolio companies on an ongoing basis. The Adviser is led by Mr. Mauer, our Chief Executive Officer, and the Managing Member and Co-Chief Investment Officer of the Adviser, and Mr. Jansen, our President and Secretary, and the Co-Chief Investment Officer of the Adviser. Mr. Mauer was formerly Global Co-Head of Leveraged Finance and Global Co-Head of Fixed Income Currency and Commodity Distribution at Citigroup Inc. and a senior member of its credit committee responsible for all underwriting and principal commitments of leveraged finance capital worldwide. Mr. Jansen was a founding Managing Partner and Senior Portfolio Manager for Stanfield Capital Partners and had a leading role in planning its strategic direction. At Stanfield, Mr. Jansen was responsible for the management of 15 different portfolios aggregating in excess of $7 billion in assets consisting of large corporate loans, middle-market loans, second lien loans, high yield bonds and structured finance securities. See also “Management—Biographical Information.”

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The Adviser’s Investment Team is led by Messrs. Mauer and Jansen and includes 17 additional investment professionals of whom 11 support the Adviser pursuant to the Services Agreement with Cyrus Capital. The members of the Investment Team have over 200 combined years of structuring customized debt solutions for middle-market companies, which we believe will enable us to generate favorable returns across credit cycles with an emphasis on preserving capital. The members of the Investment Team are highly qualified investment professionals who have a demonstrated ability to identify, source, analyze, invest in and monitor investments in U.S. middle-market companies. We believe the members of the Investment Team share a common investment philosophy built on a framework of rigorous business assessment, extensive due diligence and disciplined risk valuation methodology.

Upon the completion of the CM Finance Merger, we will enter into the Investment Advisory Agreement with CM Investment Partners LLC, as our investment adviser. Under the Investment Advisory Agreement, we will pay the Adviser a management fee equal to 1.75% of our gross assets, payable in arrears on a quarterly basis. In addition, pursuant to the Investment Advisory Agreement, we will pay the Adviser an Incentive Fee equal to 20.0% of pre-incentive fee net investment income, subject to an annualized hurdle rate of 8.0% with a “catch up” fee for returns between the 8.0% hurdle and 10.0% as well as 20.0% of net capital gains. See “Management Agreements—Management Fees.”

Under the Administration Agreement with the Adviser, through the Services Agreement, the Adviser will provide us with our interim chief financial officer, other accounting and back-office professionals, equipment and clerical, bookkeeping, recordkeeping and other administrative services at such facilities. Under the Services Agreement, the Adviser has retained the services of accounting and back office professionals to assist the Adviser in fulfilling certain of its obligations to us under the Administration Agreement. See “Management Agreements—Administration Agreement” and “Related Party Transactions and Certain Relationships—Services Agreement.” Brennan McCaw, our interim Chief Financial Officer, and the other accounting and back-office professionals are Cyrus Capital employees who perform their duties on behalf of the Adviser pursuant to the Services Agreement. Following the completion of this offering, the Adviser intends to hire a chief financial officer, who will also serve as our chief financial officer. We also expect that the Adviser will hire additional investment and other personnel as necessary, to support our growth and reduce the Adviser’s use of Cyrus Capital’s employees over time.

Market Opportunity

We believe that the current investment environment presents a compelling case for investing in secured debt (including unitranche debt and standalone second and first lien loans) and unsecured debt (including mezzanine/structured equity) of middle-market companies. The following factors represent the key drivers of our focus on this attractive market segment:

Ÿ Reduced Availability of Capital for Middle-Market Companies. We believe there are fewer providers of financing and less capital available for middle-market companies compared to prior to the recent economic downturn. We believe that, as a result of that downturn:

Ÿ many financing providers have chosen to focus on large, liquid corporate loans and syndicated capital markets transactions rather than lending to middle-market businesses;

Ÿ recent regulatory changes, including adoption of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, and the introduction of new international capital and liquidity requirements under the 2012 Basel III Accords, or Basel III, have caused banks to curtail lending to middle-market companies;

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Ÿ hedge funds and collateralized loan obligation managers are less likely to pursue investment opportunities in our target market as a result of reduced availability of funding for new investments; and

Ÿ consolidation of regional banks into money center banks has reduced their focus on middle-market lending.

As a result, we believe that less competition will facilitate higher quality deal flow and allow for greater selectivity throughout the investment process.

Ÿ Robust Demand for Debt Capital. According to PitchBook, a market research firm, private equity firms raised an estimated $1.1 trillion of equity commitments from 2006 to 2012, with approximately $348.2 billion of this capital available for investment as of the end of 2012. In addition, private equity deal flow continues to improve since the 2007-2008 recession, totaling $345 billion in 2012 according to PitchBook. Private equity firms have also refocused their attention towards lower middle-market and middle-market deals (defined for this purpose as generally those companies with an enterprise value of $750 million or less). We expect the large amount of uninvested capital commitments will drive buyout activity over the next several years, which should, in turn, create lending opportunities for us. In addition to increased buyout activity, a high volume of senior secured and high yield debt originated from 2004 through 2007 will need refinancing in the near term and, accordingly, we believe that new financing opportunities will increase as many companies seek to refinance this indebtedness.

Ÿ Attractive Deal Pricing and Structures. We believe that, in general, middle-market debt investments are priced more attractively to lenders than larger, more liquid, public debt financings, due to the more limited universe of lenders as well as the highly negotiated nature of these financings. Middle-market transactions tend to offer stronger covenant packages, higher interest rates, lower leverage levels and better call protection compared to larger financings. In addition, middle-market loans typically offer other investor protections such as default penalties, lien protection, change of control provisions and information rights for lenders.

Ÿ Specialized Lending Requirements. We believe that several factors render many U.S. financial institutions ill-suited to lend to U.S. middle-market companies. For example, based on the Investment Team’s experience, lending to private U.S. middle-market companies is generally more labor-intensive than lending to larger companies due to the smaller size of each investment and the fragmented nature of information for such companies. Lending to smaller capitalization companies requires due diligence and underwriting practices consistent with the demands and economic limitations of the middle-market and may also require more extensive ongoing monitoring by the lender. As a result, middle-market companies historically have been served by a limited segment of the lending community.

Competitive Strengths

We believe that the Adviser’s disciplined approach to origination, portfolio construction and risk management should allow us to achieve favorable risk-adjusted returns while preserving our capital. We believe that the following competitive strengths will provide an attractive investment opportunity for investors:

Ÿ Large and Experienced Team with Substantial Resources. The Adviser and its Investment Team is led by Michael C. Mauer and Christopher E. Jansen, who each has over 20 years of

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experience investing in, providing corporate finance services to, restructuring and consulting with middle-market companies. Messrs. Mauer and Jansen are supported by 17 additional investment professionals, who together have over 200 combined years of structuring strategic capital for business expansion, refinancings, capital restructuring, post-reorganization financing and servicing the general corporate needs of middle-market companies. We believe that the Investment Team and its resources provide a significant advantage and will contribute to the strength of our business and enhance the quantity and quality of investment opportunities available to us.

Ÿ Capitalize on the Investment Team’s Extensive Relationships with Middle-Market Companies, Private Equity Sponsors and Intermediaries. The members of the Investment Team have extensive networks for sourcing investment opportunities through corporate relationships and relationships with private equity firms, restructuring advisors, law firms, boutique advisory firms and distressed/specialty lenders. We believe that the strength of these relationships in conjunction with the Investment Team’s ability to structure financing solutions for companies that incorporate credit protections at attractive returns for us will provide us with a competitive advantage in identifying investment opportunities in our target market. In addition, pursuant to the Stifel Arrangement and subject to certain restrictions, Stifel will use its commercially reasonable efforts to present to us to review and bid on, Stifel Nicolaus & Company, Incorporated-originated leveraged finance and high yield corporate debt opportunities consistent with our investment strategy.

Ÿ Disciplined Underwriting Policies and Rigorous Portfolio Management. Messrs. Mauer and Jansen have an established credit analysis and investment process to analyze investment opportunities thoroughly. This process, followed by the Investment Team, includes structuring loans with appropriate covenants and pricing loans based on our knowledge of the middle market and our rigorous underwriting standards. We focus on capital preservation by extending loans to portfolio companies with assets that we believe will retain sufficient value to repay us even in depressed markets or under liquidation scenarios. Each investment is analyzed from its initial stages by either Mr. Mauer or Mr. Jansen, the Adviser’s Co-Chief Investment Officers, and a senior investment professional of the Investment Team. Every initial investment requires the unanimous approval of the Adviser’s investment committee, consisting of Messrs. Mauer, Jansen and Stephan Kuppenheimer, who will be Stifel’s appointee to our board of directors. Every follow-on investment decision in an existing portfolio company and any investment dispositions require approval by at least Messrs. Mauer and Jansen. Under the supervision of Messrs. Mauer and Jansen, the Investment Team’s senior investment professionals also monitor the portfolio for developments on a daily basis, perform credit updates on each investment, review financial performance on at least a quarterly basis, and have regular discussions with the management of portfolio companies. We believe the Adviser’s investment and monitoring process and the depth and experience of the Investment Team gives us a competitive advantage in identifying investments and evaluating risks and opportunities throughout the life cycle of an investment.

Ÿ Ability to Structure Investments Creatively. Our Investment Team has the expertise and ability to structure investments across all levels of a company’s capital structure. These individuals have extensive experience in cash flow, asset-based lending, workout situations and investing in distressed debt, which should enable us to take advantage of attractive investments in recently restructured companies. Furthermore, with the additional capital raised in this offering, we believe we will be in a better position to leverage the existing knowledge and relationships that the Investment Team has developed to lead investments that meet our investment criteria. We believe that current market conditions will allow us

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to structure attractively priced debt investments and may allow us to incorporate other return-enhancing mechanisms such as commitment fees, original issue discounts, early redemption premiums, payment-in-kind, or PIK, interest and certain forms of equity securities.

Investment Strategy

We invest, and intend to continue to invest, in unitranche loans, standalone second and first lien loans, and selectively in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments, in most cases taking such upside participation interest as part of an overall relationship. We seek to invest primarily in middle-market companies that have annual revenues of at least $50 million and EBITDA of at least $20 million. Our investments will typically range in size from $5 million to $25 million. We may invest in smaller or larger companies if there is an attractive opportunity, especially when there are dislocations in the capital markets, including the high yield and large syndicated loan markets. During such dislocations, we expect to see more deep value investment opportunities offering prospective returns that are disproportionate to the associated risk profile. We focus on companies with leading market positions, significant asset or franchise values, strong free cash flow and experienced senior management teams, with an emphasis on companies with high-quality sponsors. Our investment objective is to generate both current income and capital appreciation by targeting investment opportunities with favorable risk-adjusted returns.

The Adviser pursues debt investments that offer high cash yields, cash origination fees, and lower leverage levels. The Adviser seeks to structure our debt investments with strong protections, including default penalties, information rights, and affirmative and negative financial covenants, such as lien protection and restrictions concerning change of control. We believe these protections, coupled with the other features of our investments, should allow us to reduce our risk of capital loss and achieve attractive risk-adjusted returns, although there can be no assurance that we will be able to structure our investments to minimize risk of loss and achieve attractive risk-adjusted returns.

Investment Criteria

The principals of the Adviser use the following investment criteria and guidelines to evaluate prospective portfolio companies. However, not all of these criteria and guidelines were, or will be, used or met in connection with each of our investments.

Ÿ Established companies with a history of positive operating cash flow. We seek to invest in established companies with sound historical financial performance. We typically focus on companies with a history of profitability on an operating cash flow basis. We do not intend to invest in start-up companies or companies with speculative business plans.

Ÿ Defensible and sustainable business. We seek to invest in companies with proven products and/or services that provide a competitive advantage versus its competitors or new entrants. The Adviser places an emphasis on the strength of historical operations and profitability and the generation of free cash flow to reinvest in the business or to utilize for debt service. The Adviser also focuses on the relative strength of the valuation and liquidity of collateral used to provide security for our investments, when applicable.

Ÿ Seasoned management team with meaningful equity ownership. The Adviser generally requires that our portfolio companies have a seasoned management team, with strong corporate governance. The Adviser also seeks to invest in companies with management teams that have meaningful equity ownership. The Adviser believes that companies that

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have proper incentives in place, including having significant equity interests, motivate management teams to enhance enterprise value, which will act in accordance with our interests.

Ÿ Significant Invested Capital. The Adviser believes that the existence of significant underlying equity value provides important support to our debt investments. The Adviser seeks investments in portfolio companies where it believes that the aggregate enterprise value significantly exceeds aggregate indebtedness, after consideration of our investment.

Ÿ Investment Partnerships. We seek to invest where private equity sponsors have demonstrated capabilities in building enterprise value. In addition, we seek to partner with specialty lenders and other financial institutions. The Adviser believes that private equity sponsors and specialty lenders can serve as committed partners and advisors that will actively work with the Adviser, the company and its management team to meet company goals and create value.

Ÿ Ability to exert meaningful influence. We target investment opportunities in which we will be a significant investor in the tranche and in which we can add value through active participation in the direction of the company, sometimes through advisory positions.

Ÿ Exit strategy. We generally seek to invest in companies that the Adviser believes possess attributes that will provide us with the ability to exit our investments. We expect to exit our investments typically through one of three scenarios: (i) the sale of the company resulting in repayment of all outstanding debt, (ii) the recapitalization of the company through which our loan is replaced with debt or equity from a third party or parties or (iii) the repayment of the initial or remaining principal amount of our loan then outstanding at maturity. In some investments, there may be scheduled amortization of some portion of our loan, which would result in a partial exit of our investment prior to the maturity of the loan.

Deal Origination

The Adviser’s deal-originating efforts are focused on its direct corporate relationships and relationships with private equity firms, restructuring advisers, law firms, boutique advisory firms and distressed/specialty lenders. The Adviser’s investment team will continue to enhance and expand these relationships. In addition, pursuant to the Stifel Arrangement and subject to certain restrictions, Stifel will use its commercially reasonable efforts to present to us to review and bid on Stifel Nicolaus & Company, Incorporated-originated leveraged finance and high yield corporate debt opportunities consistent with our investment strategy, subject to the approval of our board of directors as necessary, under the 1940 Act and certain other limitations.

The origination process is designed to thoroughly evaluate potential financings and to identify the most attractive of these opportunities on the basis of risk-adjusted returns. Each investment is analyzed from its initial stages through our investment by one of the Co-Chief Investment Officers of the Adviser and a senior investment professional. If an opportunity fits our criteria for investment and merits further review and consideration, the investment is presented to the investment committee. This first stage of analysis involves a preliminary, but detailed, description of the potential financing. An investment summary is then generated after preliminary due diligence. The opportunity may be discussed several times by members of the Investment Team. Prior to funding, every initial investment requires the unanimous approval of the Adviser’s investment committee consisting of the Adviser’s Co-Chief Investment Officers and one member appointed by Stifel, currently Stephan Kuppenheimer, who will also be a member of our board of

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directors. Follow-on investment decisions in existing portfolio companies and investment dispositions require the approval of a majority of the Adviser’s investment committee.

If the Adviser decides to pursue an opportunity, a preliminary term sheet will be produced for the target portfolio company. This term sheet serves as a basis for the discussion and negotiation of the critical terms of the proposed financing. At this stage, the Adviser begins its formal underwriting and investment approval process as described below. After the negotiation of a transaction, the financing is presented to the investment committee of the Adviser for approval. Upon approval of a financing transaction, the parties will prepare the relevant loan documentation. An investment is funded only after all due diligence is satisfactorily completed and all closing conditions have been satisfied. Each of the investments in our portfolio is monitored on a daily basis by a member of our investment committee aided by the senior investment professionals of the Investment Team, who also perform credit updates on each investment quarterly.

Underwriting

Underwriting Process and Investment Approval

The Adviser makes investment decisions only after considering a number of factors regarding the potential investment including, but not limited to:

Ÿ historical and projected financial performance;

Ÿ company and industry specific characteristics, such as strengths, weaknesses, opportunities and threats;

Ÿ composition and experience of the management team; and

Ÿ track record of the private equity sponsor leading the transaction, if applicable.

This methodology is employed to screen a high volume of potential investment opportunities on a consistent basis.

If an investment is deemed appropriate to pursue, a more detailed and rigorous evaluation is made after considering relevant investment parameters. The following outlines the general parameters and areas of evaluation and due diligence for investment decisions, although not all will necessarily be considered or given equal weighting in the evaluation process.

Business model and financial assessment

The Adviser undertakes a review and analysis of the financial and strategic plans for the potential investment. There is significant evaluation of and reliance upon the due diligence performed by the private equity sponsor, if applicable, and third party experts, including accountants and consultants. Areas of evaluation include:

Ÿ historical and projected financial performance;

Ÿ quality of earnings, including source and predictability of cash flows;

Ÿ customer and vendor interviews and assessments;

Ÿ potential exit scenarios, including probability of a liquidity event;

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Ÿ internal controls and accounting systems; and

Ÿ assets, liabilities and contingent liabilities.

Industry dynamics

The Adviser evaluates the portfolio company’s industry, and may, if considered appropriate, consult or retain industry experts. The following factors are among those the Adviser analyzes:

Ÿ sensitivity to economic cycles;

Ÿ competitive environment, including number of competitors, threat of new entrants or substitutes;

Ÿ fragmentation and relative market share of industry leaders;

Ÿ growth potential; and

Ÿ regulatory and legal environment.

Management assessment

The Adviser makes an in-depth assessment of the management team, including evaluation along several key metrics:

Ÿ background checks;

Ÿ the number of years in their current positions;

Ÿ track record;

Ÿ industry experience;

Ÿ management incentive, including the level of direct investment in the enterprise; and

Ÿ completeness of the management team (positions that need to be filled or added).

Sponsor Assessment

Among critical due diligence investigations is the evaluation of a private equity sponsor or specialty lender that has, or is also making, an investment in the portfolio company. A private equity sponsor is typically a controlling stockholder upon completion of an investment and as such is considered critical to the success of the investment. In addition, a management team with meaningful equity ownership can serve as a committed partner to us and any private equity sponsor or specialty lender. The Adviser will evaluate a private equity sponsor or specialty lender along several key criteria, including:

Ÿ investment track record;

Ÿ industry experience;

Ÿ capacity and willingness to provide additional financial support to the company through additional capital contributions, if necessary; and

Ÿ reference checks.

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Investments

The following describes the types of loans we expect to make:

Unitranche loans. Unitranche loans are loans structured as first lien loans with certain characteristics of mezzanine loan risk in one security, such as risk relating to the fact that the loans may be unsecured and will typically rank junior to secured lenders. Unitranche loans typically provide for moderate loan amortization in the initial years of the loan with the majority of the principal repayment deferred until loan maturity. Unitranche loans provide us with greater control over a portfolio company’s capital structure, as they provide a one-stop financing solution and limit “frictional costs” (e.g., negotiations with, and concessions to, other lien holders) in the event of a workout process. Consistent with our focus on capital preservation, unitranche loans typically have less volatile returns than standalone second lien or mezzanine loans. Under market conditions as of the date of this prospectus, we expect that returns on unitranche loans will range between 8% and 15%.

Standalone second lien loans. Standalone second lien loans are loans that are typically senior on a lien basis to other liabilities in the issuer’s capital structure and have the benefit of a security interest over the assets of the borrower, although ranking junior to first lien loans. Standalone second lien loans may provide for moderate loan amortization in the early years of the loan, with the majority of the amortization deferred until loan maturity. Standalone second lien loans can incur greater “frictional costs” (e.g., increased professional costs relating to resolving conflicts among the lenders) in the event of a workout and, partly because of this possible impact on recovery rates, we expect to demand a significantly higher risk premium in the form of higher spreads, call protection and/or warrants for extending standalone second lien loans, compared to first lien loans of similar credit quality. Under market conditions as of the date of this prospectus, we expect that returns on standalone second lien loans will range between 8% and 15%.

Standalone first lien loans. Standalone first lien loans are loans that are typically senior on a lien basis to other liabilities in the issuer’s capital structure and have the benefit of a security interest on the assets of the portfolio company. Standalone first lien loans may provide for moderate loan amortization in the early years of the loan, with the majority of the amortization deferred until loan maturity. Under market conditions as of the date of this prospectus, we expect that returns on standalone first lien loans will range between 8% and 12%.

Mezzanine loans/structured equity. Mezzanine loans are subordinated to senior secured loans on a payment basis, are typically unsecured and rank pari passu with other unsecured creditors of the issuer. As with standalone second lien loans, we expect to demand a significantly higher risk premium in the form of higher spreads, call protection and/or warrants for mezzanine loans, given the lower recovery rates for such securities due in part to the greater “frictional costs” (e.g., increased professional costs relating to resolving conflicts among the lenders) in a protracted workout. We may take mezzanine type risk in the form of “structured equity” investments. In cases where portfolio companies may be constrained in their ability to raise additional capital in the form of debt, we may have the opportunity to structure preferred equity or other equity-like instruments. These equity instruments will typically have redemption rights and will either be convertible into common equity at our option, or will have detachable warrants compensating us for the additional risk inherent in such investments. In most cases, these equity instruments will have debt-like characteristics, which provide more downside protection than a typical equity instrument. Under market conditions as of the date of this prospectus, we expect that the returns on mezzanine loans will range between 15% and 20%.

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Equity components. In connection with some of our debt investments, we will also invest in preferred or common stock or receive nominally priced warrants or options to buy an equity interest in the portfolio company. As a result, as a portfolio company appreciates in value, we may achieve additional investment return from this equity interest. The Adviser may structure such equity investments and warrants to include provisions protecting our rights as a minority-interest holder, as well as a “put,” or right to sell such securities back to the issuer, upon the occurrence of specified events. In many cases, we may also seek to obtain registration rights in connection with these equity interests, which may include demand and “piggyback” registration rights.

Portfolio Management Strategy

Each of the investments in our portfolio is monitored on a daily basis by a member of our investment committee aided by the senior investment professionals of the Investment Team, who also perform credit updates on each investment quarterly.

Risk Ratings

In addition to various risk management and monitoring tools, we use the Adviser’s investment rating system to characterize and monitor the credit profile and expected level of returns on each investment in our portfolio. This investment rating system uses a five-level numeric rating scale. The following is a description of the conditions associated with each investment rating:

Investment Rating 1	Investments that are performing above expectations, and whose risks remain favorable compared to the expected risk at the time of the original investment.
Investment Rating 2	Investments that are performing within expectations and whose risks remain neutral compared to the expected risk at the time of the original investment. All new loans will initially be rated 2.
Investment Rating 3	Investments that are performing below expectations and that require closer monitoring, but where no loss of return or principal is expected. Portfolio companies with a rating of 3 may be out of compliance with their financial covenants.
Investment Rating 4	Investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are often in workout. Investments with a rating of 4 will be those for which some loss of return but no loss of principal is expected.
Investment Rating 5	Investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are almost always in workout. Investments with a rating of 5 will be those for which some loss of return and principal is expected.

If the Adviser determines that an investment is underperforming, or circumstances suggest that the risk associated with a particular investment has significantly increased, the Adviser will increase its monitoring intensity and prepare regular updates for the investment committee, summarizing current operating results and material impending events and suggesting recommended actions. While the investment rating system identifies the relative risk for each investment, the rating alone does not dictate the scope and/or frequency of any monitoring that will be performed. The frequency of the Adviser’s monitoring of an investment will be determined by a number of factors, including, but not limited to, the trends in the financial performance of the portfolio company, the investment structure and the type of collateral securing the investment.

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The following table shows the investment rankings of the debt investments in our portfolio:

	As of September 30, 2013							As of June 30, 2013
Investment Rating	Fair Value		% of Portfolio			Number  of Investments		Fair Value		% of Portfolio			Number  of Investments
1	$	—		—	%		—	$	24,551,299		20.7	%		2
2		132,142,182		100			12		94,102,014		79.3			9
3		—		—			—		—		—			—
4		—		—			—		—		—			—
5		—		—			—		—		—			—
Total	$	132,142,182		100	%		12	$	118,653,313		100	%		11

Realization of Investments

The potential exit scenarios of a portfolio company will play an important role in evaluating investment decisions. The Adviser will formulate specific exit strategies at the time of such investment. Our debt orientation will provide for increased potential exit opportunities, including the sale of investments in the private markets, the refinancing of investments held, often due to maturity or recapitalizations, and other liquidity events including the sale or merger of the portfolio company. Since we seek to maintain a debt orientation in our investments, we expect to receive interest income over the course of the investment period, receiving a significant return on invested capital well in advance of final exit.

Managerial Assistance

As a BDC, we will offer, and must provide upon request, managerial assistance to our portfolio companies. This assistance could involve monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. The Adviser will provide such managerial assistance on our behalf to portfolio companies that request this assistance. We may receive fees for these services and will reimburse the Adviser for its allocated costs in providing such assistance, subject to the review by our board of directors, including our independent directors.

SBIC License

We intend to apply for a license to form a small business investment company subsidiary, or SBIC subsidiary. The application is subject to approval by the United States Small Business Administration, or the SBA, and we can make no assurances that the SBA will approve our application. The SBIC subsidiary would be allowed to issue SBA-guaranteed debentures up to a maximum of $150 million under current SBIC regulations, subject to required capitalization of the SBIC subsidiary and other requirements. SBA-guaranteed debentures generally have longer maturities and lower interest rates than other forms of debt that may be available to us. Neither we nor the Adviser has ever operated an SBIC. See “Risk Factors—Risks Related to Our Business and Structure—If we receive qualification from the SBA to be licensed as an SBIC but we are unable to comply with SBA regulations after the SBIC subsidiary is licensed as an SBIC, our business plan and investment objective could be adversely affected.”

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Competition

Our primary competitors in providing financing to middle-market companies include public and private funds, other BDCs, commercial and investment banks, commercial finance companies and, to the extent they provide an alternative form of financing, private equity funds and hedge funds. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, we believe some competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or to the distribution and other requirements we must satisfy to maintain our qualification as a RIC.

We expect to use the expertise of the investment professionals of the Adviser (including those provided to the Adviser under the Services Agreement) to assess investment risks and determine appropriate pricing for our investments in portfolio companies. In addition, we expect that the relationships of these investment professionals will enable us to learn about, and compete effectively for, financing opportunities with attractive middle-market companies in the industries in which we seek to invest.

Staffing

We will not have any direct employees, and our day-to-day investment operations will be managed by the Adviser. Brennan McCaw, our interim chief financial officer and treasurer is an employee of Cyrus Capital and performs his duties for us pursuant to the Adviser’s obligations under the Administration Agreement and indirectly through the Services Agreement. The Adviser currently has two officers, Messrs Mauer and Jansen, and six employees, who are dual employees of the Adviser and Stifel, under the Stifel Arrangement. Additional investment professionals are provided to the Adviser through its Services Agreement with Cyrus Capital. Edward J. Cook, our chief compliance officer, is a Director of Alaric Compliance Services, LLC, and performs his functions as our chief compliance officer under the terms of an agreement between the Adviser and Alaric Compliance Services, LLC. The Adviser has retained Mr. Cook and Alaric Compliance Services, LLC pursuant to its obligations under our Administration Agreement. In addition, we will reimburse the Adviser for the allocable portion of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions, and the compensation of our chief financial officer and any administrative support staff. The Adviser intends to hire a chief financial officer promptly following completion of this offering and, to the extent necessary, additional investment and other administrative personnel dedicated to us as necessary to support our growth and reduce the Adviser’s use of the Cyrus Capital employees. See Management Agreements – Administration Agreement.

Properties

We do not own any real estate. Our principal executive offices are currently located at 399 Park Avenue, 39th Floor, New York, New York 10022. We expect to move our principal executive offices during the first calendar quarter of 2014 and will then no longer share office space with Cyrus Capital. All locations are provided to us by the Adviser pursuant to the Administration Agreement and indirectly by Cyrus Capital through the Services Agreement. We believe that our office facilities are and will be suitable and adequate for our business as we contemplate conducting it.

Legal Proceedings

We and the Adviser are not subject to any material legal proceedings.

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PORTFOLIO COMPANIES

As of September 30, 2013, our portfolio consisted of debt and equity investments in 12 portfolio companies consisting of 54.8% first lien investments, 44.6% second lien investments and 0.6% warrant positions, at fair value. We do not believe that there are any material differences in the underwriting standards that were used to originate our portfolio and the underwriting standards described in this prospectus.

As of September 30, 2013, the weighted average annualized yield of the debt investments in our portfolio was 11.06% as if our unfunded obligations were fully funded and is weighted based on each respective investment’s par amount. The weighted average annualized yield was computed using the effective interest rates for all debt investments at fair value, plus yield to maturity from September 30, 2013 of our debt investments, including our unfunded obligations. As of September 30, 2013, all portfolio companies were in compliance with the terms of their respective credit agreements.

The following table sets forth certain information as of September 30, 2013 for each portfolio company in which we had an investment. Other than these investments, we expect that our only formal relationships with our portfolio companies will be the managerial assistance we may provide, and the board observation or participation rights we may receive in connection with our investment. We do not “control” any of our portfolio companies, as defined in the 1940 Act. In general, under the 1940 Act, we would “control” a portfolio company if we owned more than 25.0% of its voting securities and we would be an “affiliate” of a portfolio company if we owned 5.0% or more of its voting securities.

Description	Industry	Type of Investment	Interest	Maturity	Principal Amount  (1)			Cost			Fair Value (2)
Active Media Services, Inc. One Blue Hill Plaza Pearl River, NY 10965	Commercial Services	Senior Secured First Lien	L+9.50%	2/1/2018	$	5,000,000		$	4,865,386		$	4,862,500
AM General LLC 105 North Niles Avenue South Bend, IN 16617	Automobiles and Components	Senior Secured First Lien	L+9.00%	3/22/2018		15,600,000			15,374,910			14,040,000
Capitol Petroleum Group 6820-B Commercial Drive Springfield, VA 22151	Oil and Gas	Senior Secured	11% cash, 3% PIK	12/3/2019		10,253,951			10,076,250			10,048,872
Crestwood Holdings, LLC One Lafayette Place Greenwich, CT 06830	Pipelines	Senior Secured First Lien	L+6.00%	6/19/2019		9,975,000			9,927,605			10,124,625
Endeavour International Corporation 811 Main Street Suite 2100 Houston, TX 77002	Oil and Gas	Senior Secured First Lien Warrants	13%	6/30/2014		17,953,305 160,000			17,755,672 160,000			17,953,305 368,000
MF Global Holdings, Ltd. 142 West 57th Street 10th Floor New York, NY 10019	Diversified Financial Services	Senior Secured First Lien	L+6.50%	12/4/2014		8,537,327			8,398,194			8,451,954
		Senior Secured First Lien(3)	0.5%	12/4/2014		(5,122,397	)		(81,190	)		(51,224	)
Telecommunications Management, LLC (New Wave) 8500 W 110th Street Suite 600 Overland Park, KS 66210	Telecommunications	Senior Secured Second Lien	L+8.00%	10/30/2020		8,831,169			8,752,253			8,919,481
Telular Corporation (ACP Tower Holdings, LLC) 311 S Wacker Drive Suite 4300 Chicago, IL 60606	Telecommunications	Senior Secured Second Lien	L+8.00%	6/24/2020		7,500,000			7,392,580			7,387,500
TNS Inc. 11480 Commerce Park Drive Suite 600 Reston, VA 20191	Telecommunications	Senior Secured Second Lien	L+8.00%	8/14/2020		7,862,500			7,868,112			7,941,125
Trident USA Health Services, LLC 930 Ridgebrook Road 3rd Floor Sparks, MD 21152	Healthcare Products/ Services	Senior Secured Second Lien	L+9.00%	7/29/2020		20,000,000			19,941,632			20,000,000

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Description	Industry	Type of Investment	Interest	Maturity	Principal Amount  (1)			Cost			Fair Value (2)
Virgin America Inc. 555 Airport Blvd Burlingame, CA 94010	Airlines	Senior Secured	17% PIK	6/9/2016		5,000,000			4,839,246			5,000,000
		Senior Secured	8.5% cash, 8.5% PIK	6/9/2016		5,425,073			5,007,276			5,425,074
		Warrants				513,333			184,116			272,066
		Warrants				385,000			53,441			127,050
YRCW Receivables Inc. 10990 Roe Avenue Overland Park, KS 66211	Trucking and Leasing	Senior Secured First Lien	L+9.75%	9/30/2014		12,043,559			12,095,804			12,224,212
YRC Worldwide, Inc.(4) 10990 Roe Avenue Overland Park, KS 66211	Trucking and Leasing	Senior Secured First Lien	7.5%	3/31/2015		(12,349,448	)		(86,766	)		(185,242	)

(1) Principal amount includes the amount of PIK interest. See Note 2.b. to the consolidated financial statements included elsewhere in this prospectus for additional information regarding PIK interest.

(2) Indicates fair value as determined in good faith by our board of directors. None of the portfolio companies has (a) been in payment default, (b) extended the original maturity of its loan, (c) converted from cash interest to PIK interest or (d) otherwise entered into a material amendment to its credit facility related to deteriorating financial performance.

(3) This investment is an unfunded obligation.

(4) This investment is an unfunded obligation.

Set forth below is a brief description of each portfolio company in which we have made an investment:

Active Media Services, Inc. is a provider of media, marketing and other business services through corporate trade.

AM General, LLC provides design, engineering, production, and technical and parts support of military and special purpose vehicles.

Capitol Petroleum Group owns, operates or supplies over 140 petroleum retail sites in the metropolitan Washington, D.C. region.

Crestwood Holdings, Inc. is the general partner, owner and manager of Crestwood Midstream Partners LP, a master limited partnership focused on providing midstream infrastructure for the future development of North America shale and unconventional resource basins.

Endeavour International Corporation is an oil and gas exploration and production company focused on the acquisition, exploration and development of oil and natural gas in the North Sea and the United States.

MF Global Holdings, Ltd. and its affiliates, through its regulated and unregulated broker dealers, provide execution and clearing services for exchange-traded OTC derivative products, non-derivative foreign exchange products and securities in the cash market.

Telecommunications Management LLC is a provider of cable television, Internet, and digital telephone services Arkansas, Illinois, Indiana and Missouri.

Telular Corporation is a developer of products and services that utilize wireless networks to provide data and voice connectivity among people and machines.

TNS Inc. is a leading provider of data communications and interoperability solutions.

Trident USA Health Services, LLC is a national provider of outsourced diagnostic healthcare services to post-acute facilities and other customers.

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Virgin America, Inc. is a San Francisco-based airline that provides transportation in the North American Market.

YRCW Receivables Inc. is a bankruptcy remote accounts receivable financing vehicle that is wholly owned by YRC Worldwide, a provider of transportation and global logistics services.

YRC Worldwide, Inc. is a provider of transportation and global logistics services across North America.

Since September 30, 2013, we made four new investments totaling $56.0 million, one of which was an addition to an existing investment, which increased our investment portfolio to $189.3 million and the average investment per company to $12.6 million as follows:

Ÿ $12.0 million investment in a second lien loan of CT Technologies Intermediate Holdings, Inc., a national provider of medical information exchange management services;

Ÿ $20.0 million additional investment in a first lien fully funded, revolving credit of Endeavour International Corp.

Ÿ $9.0 million investment in a second lien term loan of Bennu Oil & Gas, LLC, an oil and gas property in the Gulf of Mexico; and

Ÿ $15.0 million investment in a second lien term loan of TNT Crane & Rigging.

In addition, we sold our $12.3 million investment in YRC Worldwide Inc. Letter of Credit facility. This investment was unfunded. See Consolidated Schedule of Investments (unaudited) as of November 30, 2013 included elsewhere in this prospectus.

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SENIOR SECURITIES

Information about our senior securities is shown in the following table as of June 30, 2013 and June 30, 2012. The report of Ernst & Young, LLP, our independent registered public accountants, on the senior securities table as of June 30, 2013 and June 30, 2012, is attached as an exhibit to the registration statement of which this prospectus is a part. This information has been derived from our consolidated financial statements. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview” for more detailed information regarding the senior securities.

	Total Amount Outstanding Exclusive of Treasury Securities (1)		Asset Coverage per Unit  (2)		Average Market Value per Unit  (3)
	(dollar amounts thousands)
Class and Year
Financing Facility
2013	$	76,500	$	2,141	N/A
2012	$	—	$	—	N/A

(1) Total amount of senior securities outstanding at the end of the period presented.

(2) Asset coverage per unit is the ratio of our total assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.

(3) Not applicable because senior securities are not registered for public trading.

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MANAGEMENT

Board of Directors and Its Leadership Structure

Our business and affairs are managed under the direction of our board of directors. The board of directors consists of seven members, four of whom are not “interested persons” of the Adviser, or its affiliates as defined in Section 2(a)(19) of the 1940 Act. We refer to these individuals as our “independent directors.” The board of directors elects our officers, who serve at the discretion of the board of directors. The responsibilities of the board of directors include quarterly valuation of our assets, corporate governance activities, oversight of our financing arrangements and oversight of our investment activities.

Oversight of our investment activities extends to oversight of the risk management processes employed by the Adviser as part of its day-to-day management of our investment activities. The board of directors anticipates reviewing risk management processes at both regular and special board meetings throughout the year, consulting with appropriate representatives of the Adviser as necessary and periodically requesting the production of risk management reports or presentations. The goal of the board of directors’ risk oversight function is to ensure that the risks associated with our investment activities are accurately identified, thoroughly investigated and responsibly addressed. Investors should note, however, that the board of directors’ oversight function cannot eliminate all risks or ensure that particular events do not adversely affect the value of investments.

The board of directors has established an audit committee, a valuation committee, a nominating and corporate governance committee and a compensation committee, and may establish additional committees from time to time as necessary. The scope of the responsibilities assigned to each of these committees is discussed in greater detail below. Mr. Mauer serves as Chief Executive Officer, Chairman of the Board and as a member of the Adviser’s investment committee. We believe that Mr. Mauer’s history with the Adviser, his familiarity with its investment platform, and his extensive knowledge of and experience in the financial services industry qualify him to serve as the Chairman of the Board.

The board of directors does not have a lead independent director. We are aware of the potential conflicts that may arise when a non-independent director is Chairman of the Board, but believe these potential conflicts are offset by our strong corporate governance practices. Our corporate governance practices include regular meetings of the independent directors in executive session without the presence of interested directors and management, the establishment of an audit committee, a valuation committee, a nominating and corporate governance committee and a compensation committee, each of which is comprised solely of independent directors, and the appointment of a Chief Compliance Officer, with whom the independent directors meet without the presence of interested directors and other members of management, for administering our compliance policies and procedures.

The board of directors believes that its leadership structure is appropriate in light of our characteristics and circumstances because the structure allocates areas of responsibility among the individual directors and the committees in a manner that affords effective oversight. Specifically, the board of directors believes that the relationship of Messrs. Mauer and Jansen with the Adviser provides an effective bridge between the board of directors and management, and encourages an open dialogue between management and our board of directors, ensuring that these groups act with a common purpose. The board of directors also believes that its small size creates an efficient governance structure that provides ample opportunity for direct communication and interaction among our management, the Adviser and the board of directors.

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Board of Directors

We have adopted provisions in our articles of incorporation that divide our board of directors into three classes. At each annual meeting, directors will be elected for staggered terms of three years (other than the initial terms, which extend for up to three years), with the term of office of only one of these three classes of directors expiring each year. Each director will hold office for the term to which he or she is elected and until his or her successor is duly elected and qualifies.

Under the Stifel Arrangement, upon consummation of the formation transactions, Stifel will have a right to appoint a member of our board of directors, who would be considered “interested” (that is, not independent for purposes of the 1940 Act). Stifel intends to appoint Mr. Kuppenheimer. Stifel will also have the right to nominate for election a member of our board of directors upon the expiration of Mr. Kuppenheimer’s term and subsequently for all elections for the seat currently occupied by Mr. Kuppenheimer.

Information regarding the board of directors is as follows:

Name	Year of Birth		Position	Director Since		Term Expires		Other Directorships Held
Interested Directors
Michael C. Mauer		1961	Chief Executive Officer and Chairman of the Board		2013		2016		—
Christopher E. Jansen		1959	President, Secretary and Director		2013		2015		—
Stephan Kuppenheimer (1)		1970	Director		2013		2014		—
Independent Directors
Julie Persily		1965	Director		2013		2014		—
Robert Ryder		1960	Director		2013		2016		—
Robert Wagner		1962	Director		2013		2015		—
Keith Lee		1971	Director		2013		2014		—

(1) Stifel’s nominee upon consummation of the formation transactions.

The address for each of our directors is c/o CM Finance Inc, 399 Park Avenue, 39th Floor, New York, New York 10022.

Executive Officers Who Are Not Directors

Information regarding our executive officers who are not directors is as follows:

Name	Year of Birth		Position
Brennan McCaw		1969	Interim Chief Financial Officer and Treasurer
Edward J. Cook		1964	Chief Compliance Officer

The address for each of our executive officers is c/o CM Finance Inc, 399 Park Avenue, 39th Floor, New York, New York 10022.

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Biographical Information

The board of directors will consider whether each of the directors is qualified to serve as a director, based on a review of the experience, qualifications, attributes and skills of each director, including those described below. The board of directors will also consider whether each director has significant experience in the investment or financial services industries and has held management, board or oversight positions in other companies and organizations. For the purposes of this presentation, our directors have been divided into two groups—independent directors and interested directors. Interested directors are “interested persons” as defined in the 1940 Act.

Independent Directors

Keith Lee serves as a member of our board of directors. Mr. Lee has served as a senior partner and Managing Director at H/2 Capital Partners, a commercial real estate focused investment manager, since August 2013. At H/2, Mr. Lee is responsible for the firm’s Finance and Capital Markets functions. Mr. Lee previously served from 2011 to 2013 as Managing Director at UBS Securities and Head of Structured Financing for the Americas. In this role, Mr. Lee arranged term financing facilities for UBS clients secured by structured finance assets backed primarily by commercial real estate, residential mortgages and corporate loans and bonds. Prior to joining UBS, Mr. Lee was with Goldman Sachs in its Principal Funding and Investments Group from 2010 to 2011. Mr. Lee was the head of the Goldman Sachs U.S. CLO business from 2006 to 2010 and previously held a similar position at Lehman Brothers. Mr. Lee holds a bachelor’s degree in economics and philosophy from Knox College, and a master’s degree in business administration in finance and accounting from the University of Chicago, Booth School of Business. We believe Mr. Lee’s extensive experience with financial institutions and his knowledge of capital markets and structured financing brings important and valuable skills to our board of directors.

Julie Persily serves as a member of our board of directors. Ms. Persily retired from serving as the Co-Head of Leveraged Finance and Capital Markets of Nomura Securities North America, a unit of Nomura Holdings Inc. (NYSE: NMR), a securities and investment banking company, since July 2010. Ms. Persily previously served in various capacities at Citigroup Inc., a financial services company, including as the Co-Head of Leveraged Finance Group from December 2006 to November 2008, the Head of Acquisition Finance Group from December 2001 to November 2006 and as Managing Director from July 1999 to November 2001. From 1990 to 1999, Ms. Persily served in various capacities including as a Managing Director, Leveraged Finance at BT Securities Corp., a financial services company and a subsidiary of Bankers Trust Corp., which was acquired by Deutsche Bank in April 1999. From 1987 to 1989, Ms. Persily served as an analyst at Drexel Burnham Lambert, a securities and investment banking company. Ms. Persily received a B.A. in psychology and economics from Columbia College and a M.B.A in financing and accounting from Columbia Business School. We believe Ms. Persily’s extensive experience with structuring, negotiating and marketing senior loans, high yield and mezzanine financings brings important and valuable skills to our board of directors.

Robert Ryder serves as a member of our board of directors. Mr. Ryder has served as Executive Vice President and Chief Financial Officer of Constellation Brands, Inc. (NYSE: STZ), a wine, beer and spirits company, since May 2007. Mr. Ryder previously served from 2005 to 2006 as Executive Vice President and Chief Financial and Administrative Officer of IMG, a sports marketing and media company. From 2002 to 2005, Mr. Ryder was Senior Vice President and Chief Financial Officer of American Greetings Corporation, a publicly traded, multinational consumer products company. From 1989 to 2002, Mr. Ryder held several management positions of increasing responsibility with PepsiCo, Inc. These included control, strategic planning, mergers and acquisitions, CFO and Controller positions serving at PepsiCo’s corporate headquarters and at its

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Frito-Lay International and Frito-Lay North America divisions. Mr. Ryder received a B.S. in Accounting from the University of Scranton and is a certified public accountant. We believe Mr. Ryder’s extensive experience with public companies, public boards and knowledge of accounting and public company regulatory issues brings important and valuable skills to our board of directors.

Robert Wagner serves as a member of our Board of Directors. Mr. Wagner has been a self-employed management consultant, working closely with client management on company strategy, financing, investor relations and compensation policies since March 2012. In February 2012, Mr. Wagner retired from Silver Point Capital, L.P., a credit opportunity hedge fund, where he had served as a senior management leader and operating committee member and Director of Marketing and Investor Relations since May 2006. While at Silver Point Capital, L.P., Mr. Wagner ran its Global Markets team, a deal-sourcing and relationship development team, and served on the firm’s

private-side, direct lending investment committee. From 1999 to 2005, Mr. Wagner served as a Managing Director and a senior leader in the fixed income division at Goldman, Sachs & Co., a global investment banking, securities and investment management firm. From 1993 to 1999, Mr. Wagner served as a Managing Director and team leader of the leveraged loan capital markets group at BT Securities Corp., a financial services company and a subsidiary of Bankers Trust Corp., which was acquired by Deutsche Bank in April 1999. Mr. Wagner served in a similar capacity at Bank of America from 1989 to 1993. Mr. Wagner received a B.B.A. in Finance and Accounting from the University of Michigan and an M.S. in Journalism from Columbia University—Graduate School of Journalism. We believe Mr. Wagner’s extensive experience in deal-sourcing, investor relations and credit underwriting brings important and valuable skills to our Board of Directors.

Interested Directors

Michael C. Mauer is our Chief Executive Officer and Chairman of our board of directors. Mr. Mauer has also served as the Managing Partner and Co-Chief Investment Officer of CM Investment Partners, LP since January 2012. Mr. Mauer is a member of the Adviser’s investment committee and board of managers. Mr. Mauer served as a Senior Managing Director and head of the leveraged loan effort at Cyrus Capital Partners, L.P. since September 2011. Mr. Mauer intends to resign from Cyrus Capital Partners, L.P. upon our election to be regulated as a BDC. From July 2009 to September 2010, Mr. Mauer worked for Icahn Capital where he was a Senior Managing Director and a member of the investment team. In addition, he was in charge of the firm’s Marketing and Investor Relations. Prior to that, Mr. Mauer was a Managing Director at Citigroup Inc., a financial services company, from 2001 to 2009. During that time he led several businesses including Global Co-Head of Leveraged Finance and Global Co-Head of Fixed Income Currency and Commodity Distribution. In addition, during this period he was a senior member of Citigroup Inc.’s credit committee responsible for all underwriting and principal commitments of leveraged finance capital worldwide. From 1988 to 2001, Mr. Mauer held several positions at JPMorgan including Head of North American Investment Grade and Leverage Loan Syndicate, Sales and Trading businesses. Mr. Mauer began his career in 1982 at Price Waterhouse & Co., where he was a Senior Accountant and a C.P.A. Mr. Mauer received a B.S. from the University of Scranton and an M.B.A. from Columbia University. We believe Mr. Mauer’s extensive investing, finance, and restructuring experience bring important and valuable skills to our board of directors.

Christopher E. Jansen is our President, Secretary and a member of our board of directors. Mr. Jansen has also served as a Partner and Co-Chief Investment Officer of CM Investment Partners, LP since June 2012. Mr. Jansen is a member of the Adviser’s investment committee and board of managers. Mr. Jansen also served as a Senior Managing Director at Cyrus Capital Partners, L.P. since June 2012. Mr. Jansen intends to resign from Cyrus Capital Partners, L.P. upon our election to be regulated as a BDC. Formerly, Mr. Jansen was a founding Managing Partner and Senior Portfolio Manager for Stanfield Capital Partners

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from inception in 1998 until the sale of the company in 2010. As a member of Stanfield Capital Partners’ Management Committee, Mr. Jansen was involved in planning the strategic direction of the firm. Additional responsibilities included the oversight and administration of the investment process and the implementation of portfolio management procedures of the company’s Collateralized Loan Obligation and bank loan businesses. During his tenure at Stanfield, Jansen was responsible for the management of 15 different portfolios aggregating in excess of $7 billion in assets. These portfolios were comprised of large corporate loans, middle-market loans, second lien loans, high yield bonds and structured finance securities. Prior to Stanfield Capital Partners, Mr. Jansen was Managing Director and Portfolio Manager at Chancellor Senior Secured Management from 1990 to 1998. While at Chancellor, Jansen was responsible for the management of 11 different portfolios aggregating in excess of $4 billion in assets. These portfolios were comprised of large corporate loans, middle-market loans and second lien loans. From 1983 to 1990, Mr. Jansen held various positions at Manufacturers Hanover Trust Company, including as Vice President in the Bank’s Acquisition Finance Group and LBO Management Group. Mr. Jansen received a B.A. from Rutgers College and a M.M. from the Kellogg School of Management at Northwestern University. We believe Mr. Jansen’s extensive investing, finance, and restructuring experience bring important and valuable skills to our board of directors.

Stephan Kuppenheimer will serve as a member of our board of directors upon consummation of the formation transactions and serves as a member of the Adviser’s investment committee and board of managers. Mr. Kuppenheimer has served in various capacities, including most recently as Senior Managing Director and Head of Credit Investments, at Stifel Financial Corp., a diversified financial services holding company, since March 2010. Mr. Kuppenheimer has also served as Chief Executive Officer of FSI Capital, LLC, an investment adviser, Chief Executive Officer, President and a Trustee of FSI Realty Trust, a specialty finance realty company, as well as Chief Executive Officer and Chief Operating Officer of FSI Securities, LLC, a registered broker-dealer since June 2006. Prior to joining FSI, Mr. Kuppenheimer was Director and Co-Head of the U.S. Structured Credit Products Group at Merrill Lynch & Co., Inc. with responsibility for collateral loan obligations (CLOs), trust preferred collateral debt obligations (CDOs), structured funds and new products from April 2004 to June 2006. Mr. Kuppenheimer was also responsible for investment grade corporate CDOs and trust preferred securities at Credit Suisse First Boston from July 2000 to March 2004. He began his career as an attorney for Brown & Wood, LLP in New York focused on structured credit derivative transactions. Mr. Kuppenheimer received an A.B., with Honors, in Philosophy from Colgate University and a J.D., with Distinction, from Emory University. We believe Mr. Kuppenheimer’s extensive experience in originations, asset management, portfolio advisory, and structured credit and leveraged finance products brings important and valuable skills to our board of directors.

Executive Officers Who Are Not Directors

Brennan McCaw serves as our Interim Chief Financial Officer. Mr. McCaw has also served as the Chief Financial Officer of Cyrus Capital Partners, L.P. since April 13, 2009. Prior to joining Cyrus Capital Partners, L.P., Mr. McCaw served as Director of Accounting and Operations for DKR Oasis Management Company, LP. from 2006 until 2009. Prior to that, Mr. McCaw served as a Vice President and Manager of Operations with Goldman Sachs Administration Services Co. from 2002 to 2004 and again from 2005 until 2006. Mr. McCaw served as Chief Financial Officer for Oxford Advisors Ltd. from 2004 until 2005. Mr. McCaw qualified as a Chartered Accountant in 1997 and was awarded the Chartered Financial Analyst designation in 2001. He received his Bachelors of Commerce from the University of Alberta in 1996.

Edward J. Cook has served as our Chief Compliance Officer since December 2013. He has also served as a Director of Alaric Compliance Services, LLC since November 2007. Additionally, Mr. Cook serves as the Chief Compliance Officer of WhiteHorse Finance, Inc. another publicly traded BDC, Broadmark Asset Management, LLC, a registered investment adviser, and Solar

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Capital Partners, LLC, a registered investment adviser that advises business development companies, positions he has held since December 2012, March 2011 and November 2008, respectively. Prior to joining Alaric, Mr. Cook was Counsel to the head of U.S. Immigration and Customs Enforcement at the Department of Homeland Security, where he served from April 2004 to October 2007, and he contributed to the development of national anti-money laundering strategy. Mr. Cook received his J.D. from the University of Virginia School of Law and his A.B. from the College of William & Mary.

Audit Committee

The members of the audit committee are Mr. Lee, Ms. Persily, Mr. Ryder and Mr. Wagner, each of whom meets the independence standards established by the SEC and the Nasdaq for audit committees and is independent for purposes of the 1940 Act. Mr. Ryder serves as chairman of the audit committee. Our board of directors has determined that Mr. Ryder is an “audit committee financial expert” as that term is defined under Item 407 of Regulation S-K of the Securities Act. The audit committee is responsible for approving our independent accountants, reviewing with our independent accountants the plans and results of the audit engagement, approving professional services provided by our independent accountants, reviewing the independence of our independent accountants and reviewing the adequacy of our internal accounting controls.

Compensation Committee

The members of the compensation committee are Mr. Lee, Ms. Persily, Mr. Ryder and Mr. Wagner, each of whom is independent for purposes of the 1940 Act and the Nasdaq corporate governance regulations. Ms. Persily serves as chairman of the compensation committee. The compensation committee is responsible for overseeing our compensation policies generally, evaluating executive officer performance, overseeing and setting compensation for our directors and, as applicable, our executive officers and, as applicable, preparing the report on executive officer compensation that SEC rules require to be included in our annual proxy statement. Currently, none of our executive officers is compensated by us, and as such, the compensation committee is not required to produce a report on executive officer compensation for inclusion in our annual proxy statement.

The compensation committee has the sole authority to retain and terminate any compensation consultant assisting the compensation committee, including sole authority to approve all such compensation consultants’ fees and other retention terms. The compensation committee may delegate its authority to subcommittees or the chairman of the compensation committee when it deems appropriate and in our best interests.

Nominating and Corporate Governance Committee

The members of the nominating and corporate governance committee are Mr. Lee, Ms. Persily, Mr. Ryder and Mr. Wagner, each of whom is independent for purposes of the 1940 Act and the Nasdaq corporate governance regulations. Mr. Lee serves as chairman of the nominating and corporate governance committee. The nominating and corporate governance committee is responsible for selecting, researching and nominating directors for election by our stockholders, selecting nominees to fill vacancies on the board or a committee of the board, developing and recommending to the board a set of corporate governance principles and overseeing the evaluation of the board and our management.

The nominating and corporate governance committee will consider nominees to the board of directors recommended by a stockholder if such stockholder complies with the advance notice provisions of our bylaws. Our bylaws provide that a stockholder who wishes to nominate a person

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for election as a director at a meeting of stockholders must deliver written notice to our corporate secretary. This notice must contain, as to each nominee, all of the information relating to such person as would be required to be disclosed in a proxy statement meeting the requirements of Regulation 14A under the Exchange Act, and certain other information set forth in the bylaws. In order to be eligible to be a nominee for election as a director by a stockholder, such potential nominee must deliver to our corporate secretary a written questionnaire providing the requested information about the background and qualifications of such person and a written representation and agreement that such person is not and will not become a party to any voting agreements or any agreement or understanding with any person with respect to any compensation or indemnification in connection with service on the board of directors, and would be in compliance with all of our publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines.

The nominating and corporate governance committee has not adopted a formal policy with regard to the consideration of diversity in identifying individuals for election as members of the board of directors, but the committee will consider such factors as it may deem are in our best interests and those of our stockholders. Those factors may include a person’s differences of viewpoint, professional experience, education and skills, as well as his or her race, gender and national origin. In addition, as part of the board’s annual-self assessment, the members of the nominating and corporate governance committee will evaluate the membership of the board of directors and whether the board maintains satisfactory policies regarding membership selection.

Valuation Committee

The valuation committee is presently composed of Mr. Lee, Ms. Persily, Mr. Ryder and Mr. Wagner, each of whom is not an interested person of us for purposes of the 1940 Act and is independent for purposes of the Nasdaq corporate governance regulations. Mr. Wagner serves as the chairman of the valuation committee. The valuation committee is responsible for aiding our board of directors in fair value pricing of our debt and equity investments that are not publicly traded or for which current market values are not readily available. The board of directors and valuation committee will utilize the services of an independent valuation firm to help them determine the fair value of these securities.

Compensation of Directors

The following table shows information regarding the compensation expected to be received by our independent directors for the fiscal year ending June 30, 2014. No compensation is paid to directors who are “interested persons” for their service as directors.

Name	Aggregate Cash Compensation from CM Finance Inc (1)		Total Compensation from CM Finance Inc Paid to Director (1)
Interested Directors
Michael C. Mauer	$	—	$	—
Christopher E. Jansen	$	—	$	—
Stephan Kuppenheimer	$	—	$	—
Independent Directors
Julie Persily	$	104,000	$	104,000
Robert Ryder	$	109,000	$	109,000
Robert Wagner	$	104,000	$	104,000
Keith Lee	$	104,000	$	104,000

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(1) We are newly organized, and the amounts listed are estimated for the fiscal year ending June 30, 2014. For a discussion of the independent directors’ compensation, see below. We do not have a profit-sharing or retirement plan, and directors do not receive any pension or retirement benefits.

The independent directors will receive an annual fee of $75,000. They will also receive $2,500 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending in person or telephonically each regular board of directors meeting and each special telephonic meeting. They also will receive $1,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with each committee meeting attended in person and each telephonic committee meeting. The chairman of the audit committee will receive an annual fee of $7,500. The chairmen of the valuation committee, the nominating and corporate governance committee and the compensation committee will receive an annual fee of $2,500, $2,500 and $2,500, respectively. We have obtained directors’ and officers’ liability insurance on behalf of our directors and officers. Independent directors will have the option of having their directors’ fees paid in shares of our common stock issued at a price per share equal to the greater of net asset value or the market price at the time of payment. No compensation is paid to directors who are “interested persons.”

Investment Committee

The Adviser’s investment committee consists of Messrs. Mauer, Jansen and one individual that is appointed by Stifel. Initially, Stifel has appointed Stephan Kuppenheimer to the Adviser’s investment committee. The investment committee of the Adviser meets regularly to consider our investments, direct our strategic initiatives and supervise the actions taken by the Adviser on our behalf. In addition, the investment committee reviews and determines, by unanimous vote, whether to make initial prospective investments identified by the Adviser. Follow-on investment decisions in existing portfolio companies and investment dispositions require the approval of a majority of the Adviser’s investment committee. The investment committee also monitors the performance of our investment portfolio. After the completion of this offering, the Adviser may increase the size of its investment committee from time to time.

Portfolio Management

Each initial investment opportunity requires the unanimous approval of the Adviser’s investment committee. Follow-on investment decisions in existing portfolio companies require the approval of Messrs. Mauer and Jansen beyond that obtained when the initial investment in the company was made. In addition, temporary investments, such as those in cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less, may require approval by the investment committee. The day-to-day management of investments approved by the investment committee will be overseen by Messrs. Mauer and Jansen. Biographical information with respect to Messrs. Mauer and Jansen is set out under “—Biographical Information—Interested Directors.”

The members of the investment committee, excluding Mr. Kuppenheimer, receive compensation by the Adviser that includes an annual base salary, an annual individual performance bonus, contributions to 401(k) plans, and a portion of the incentive fee earned in connection with their services.

Executive Compensation

None of our executive officers receive compensation from us. Each of Messrs. Mauer and Jansen has a direct ownership and financial interest in, and may receive compensation and/or profit distributions from, the Adviser. None of Mr. Mauer, Mr. Jansen or Mr. Kuppenheimer

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receives any direct compensation from us. See “Related Party Transactions and Certain Relationships.” Mr. McCaw, our interim chief financial officer and treasurer and, through Alaric Compliance Services, LLC, Mr. Cook, our chief compliance officer, are paid by the Adviser, as our administrator, subject to reimbursement by us of an allocable portion of such compensation for services rendered by such persons to the Adviser. To the extent that the Adviser outsources any of its functions we will pay the fees associated with such functions on a direct basis without profit to the Adviser.

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MANAGEMENT AGREEMENTS

The Adviser was formed in July 2013 and is registered as an investment adviser under the Advisers Act.

Investment Advisory Agreement

Subject to the overall supervision of our board of directors and in accordance with the 1940 Act, the Adviser will manage our day-to-day operations and provide investment advisory services to us. Under the terms of the Investment Advisory Agreement, the Adviser will:

Ÿ determine the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

Ÿ identify, evaluate and negotiate the structure of the investments we make;

Ÿ execute, close, service and monitor the investments we make;

Ÿ determine the securities and other assets that we will purchase, retain or sell;

Ÿ perform due diligence on prospective portfolio companies; and

Ÿ provide us with such other investment advisory, research and related services as we may, from time to time, reasonably require for the investment of our funds.

Pursuant to the Investment Advisory Agreement, we have agreed to pay the Adviser a fee for investment advisory and management services consisting of two components—a base management fee and an incentive fee. The cost of both the base management fee and the incentive fee will ultimately be borne by our stockholders.

For the period commencing upon the consummation of this offering and ending December 31, 2014, the Adviser has agreed to waive its fees (base management and incentive fee), without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support a minimum dividend payment on shares of common stock outstanding on the relevant dividend payment dates of     % (to be paid on a quarterly basis). For the periods January 1, 2015 to December 31, 2015 and January 1, 2016 to December 31, 2016, the Adviser has agreed to waive its incentive fees, without recourse against or reimbursement by us, to the extent required in order for the Company to earn a quarterly net investment income to support minimum dividend payments on shares of common stock outstanding on the relevant dividend payment dates of     % and     %, respectively (to be paid on a quarterly basis). The annual dividend yield will be based on our initial public offering price per share. Net investment income is defined as GAAP net income before net realized and unrealized gains (losses).

Management Fee

The base management fee is calculated at an annual rate of 1.75% of our gross assets, including assets purchased with borrowed funds or other forms of leverage and excluding cash and cash equivalents. For services rendered under the Investment Advisory Agreement, the base management fee is payable quarterly in arrears. The base management fee is calculated based on the average value of our gross assets, excluding cash and cash equivalents, at the end of the two most recently completed calendar quarters. Base management fees for any partial month or quarter will be appropriately pro-rated.

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Incentive Fee

We will pay the Adviser an incentive fee. Incentive fees are calculated as below and payable quarterly in arrears (or, upon termination of the Investment Advisory Agreement, as of the termination date). The incentive fee, which provides the Adviser with a share of the income that it generates for us, has two components, ordinary income and capital gains, calculated as follows:

The ordinary income component is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter, subject to a total return requirement and deferral of non-cash amounts, and will be 20.0% of the amount, if any, by which our pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets attributable to our common stock, for the immediately preceding calendar quarter, exceeds a 2.0% (which is 8.0% annualized) hurdle rate and a “catch-up” provision measured as of the end of each calendar quarter. Under this provision, in any calendar quarter, the Adviser receives no incentive fee until our pre-incentive fee net investment income equals the hurdle rate of 2.0%, but then receives, as a “catch-up,” 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.5% (which is 10.0% annualized). The effect of the “catch-up” provision is that, subject to the total return and deferral provisions discussed below, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, the Adviser receives 20.0% of our pre-incentive fee net investment income as if a hurdle rate did not apply. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial assistance and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and any distributions paid on any issued and outstanding 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 OID, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of the Company’s pre-incentive fee net investment income will be payable except to the extent 20.0% of the cumulative net increase in net assets resulting from operations over the then current and 11 preceding quarters exceeds the cumulative incentive fees accrued and/or paid for the 11 preceding quarters. In other words, any ordinary income incentive fee that is payable in a calendar quarter will be limited to the lesser of (i) 20.0% of the amount by which our pre-incentive fee net investment income for such calendar quarter exceeds the 2.0% hurdle, subject to the “catch-up” provision, and (ii) (x) 20.0% of the cumulative net increase in net assets resulting from operations for the then current and 11 preceding calendar quarters minus (y) the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the amount, if positive, of the sum of pre-incentive fee net investment income, realized gains and losses and unrealized appreciation and depreciation of the Company for the then current and 11 preceding calendar quarters. In addition, the portion of such incentive fee that is attributable to deferred interest (such as PIK interest or OID) will be paid to the Adviser only if and to the extent we actually receive such interest in cash, and any accrual thereof will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. Any reversal of such accounts would reduce net income for the quarter by the net amount of the reversal (after taking into account the reversal of incentive fees payable) and would result in a reduction and possible elimination of the incentive fees for such quarter. There is no accumulation of amounts on the hurdle rate from quarter to quarter, and accordingly there is no clawback of amounts previously paid if subsequent quarters are below the quarterly hurdle, and there is no delay of payment if prior quarters are below the quarterly hurdle.

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Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Because of the structure of the incentive fee, it is possible that we may pay an incentive fee in a quarter where we incur a loss, subject to the total return requirement and deferral of non-cash amounts. For example, if we receive pre-incentive fee net investment income in excess of the quarterly minimum hurdle rate, we will pay the applicable incentive fee even if we have incurred a loss in that quarter due to realized and unrealized capital losses. Our net investment income used to calculate this component of the incentive fee is also included in the amount of our gross assets used to calculate the 1.75% base management fee. These calculations will be appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.

The following is a graphic representation of the calculation of the income-related portion of the incentive fee:

Quarterly Incentive Fee Based on Net Investment Income

Pre-incentive Fee Net Investment Income

(expressed as a percentage of the value of net assets)

Percentage of Pre-incentive Fee Net Investment Income

Allocated to Income-Related Portion of Incentive Fee

The capital gains component of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), commencing on December 31, 2014, and is equal to 20.0% of our cumulative aggregate realized capital gains from inception through the end of that calendar year, computed net of our aggregate cumulative realized capital losses and our aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously paid capital gains incentive fees, provided that the incentive fee determined as of December 31, 2014 will be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses and unrealized capital depreciation for the period ending December 31, 2014. If such amount is negative, then no capital gains incentive fee will be payable for such year. Additionally, if the Investment Advisory Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying the capital gains incentive fee.

Examples of Quarterly Incentive Fee Calculation

Example 1: Income Related Portion of Incentive Fee before Total Return Requirement Calculation:

Alternative 1

Assumptions

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

Hurdle rate ⁽¹⁾ = 2.0%

Management fee ⁽²⁾ = 0.4375%

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

Pre-incentive fee net investment income

(investment income – (management fee + other expenses) = 0.6125%

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Pre-incentive fee net investment income does not exceed hurdle rate, therefore there is no income-related incentive fee.

Alternative 2

Assumptions

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

Hurdle rate ⁽¹⁾ = 2.0%

Management fee ⁽²⁾ = 0.4375%

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

Pre-incentive fee net investment income

(investment income – (management fee + other expenses) = 2.2625%

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

= 100% × (2.2625% – 2.0%)

= 0.2625%

Pre-incentive fee net investment income exceeds the hurdle rate, but does not fully satisfy the “catch-up” provision, therefore the income related portion of the incentive fee is 0.2625%.

Alternative 3

Assumptions

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

Hurdle rate ⁽¹⁾ = 2.0%

Management fee ⁽²⁾ = 0.4375%

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

Pre-incentive fee net investment income

(investment income – (management fee + other expenses) = 2.8625%

Incentive fee = 100% × Pre-incentive fee net investment income

(subject to “catch-up”) ⁽⁴⁾

Incentive fee = 100% × “catch-up” + (20.0% × (Pre-Incentive Fee Net Investment Income – 2.5%))

“Catch-up” = 2.5% – 2.0%

= 0.5%

Incentive fee = (100% × 0.5%) + (20.0% × (2.8625% – 2.5%))

= 0.5% + (20.0% × 0.3625%)

= 0.5% + 0.725%

= 0.5725%

Pre-incentive fee net investment income exceeds the hurdle rate, and fully satisfies the “catch-up” provision, therefore the income related portion of the incentive fee is 0.5725%.

(1) Represents 8.0% annualized hurdle rate.

(2) Represents 1.75% annualized base management fee.

(3) Excludes organizational and offering expenses.

(4) The “catch-up” provision is intended to provide the Adviser with an incentive fee of 20.0% on all pre-incentive fee net investment income as if a hurdle rate did not apply when our net investment income exceeds 2.5% in any fiscal quarter.

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Example 2: Income Portion of Incentive Fee with Total Return Requirement Calculation:

Alternative 1:

Assumptions

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

Hurdle rate ⁽¹⁾ = 2.0%

Management fee ⁽²⁾ = 0.4375%

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

Pre-incentive fee net investment income

(investment income – (management fee + other expenses) = 2.8625%

Cumulative incentive compensation accrued and/or paid for preceding 11 calendar quarters = $9,000,000

20.0% of cumulative net increase in net assets resulting from operations over current and preceding 11 calendar quarters = $8,000,000

Although our pre-incentive fee net investment income exceeds the hurdle rate of 2.0% (as shown in Alternative 3 of Example 1 above), no incentive fee is payable because 20.0% of the cumulative net increase in net assets resulting from operations over the then current and 11 preceding calendar quarters did not exceed the cumulative income and capital gains incentive fees accrued and/or paid for the preceding 11 calendar quarters.

Alternative 2:

Assumptions

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

Hurdle rate ⁽¹⁾ = 2.0%

Management fee ⁽²⁾ = 0.4375%

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

Pre-incentive fee net investment income

(investment income – (management fee + other expenses) = 2.8625%

Cumulative incentive compensation accrued and/or paid for preceding 11 calendar quarters = $9,000,000

20.0% of cumulative net increase in net assets resulting from operations over current and preceding 11 calendar quarters = $10,000,000

Because our pre-incentive fee net investment income exceeds the hurdle rate of 2.0% and because 20.0% of the cumulative net increase in net assets resulting from operations over the then current and 11 preceding calendar quarters exceeds the cumulative income and capital gains incentive fees accrued and/or paid for the preceding 11 calendar quarters, an incentive fee would be payable, as shown in Alternative 3 of Example 1 above.

(1) Represents 8.0% annualized hurdle rate.

(2) Represents 1.75% annualized base management fee.

(3) Excludes organizational and offering expenses.

(4) The “catch-up” provision is intended to provide the Adviser with an incentive fee of 20.0% on all pre-incentive fee net investment income as if a hurdle rate did not apply when our net investment income exceeds 2.5% in any fiscal quarter.

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Example 3: Capital Gains Portion of Incentive Fee(*):

Alternative 1:

Assumptions

Year 1: $2.0 million investment made in Company A (“Investment A”), and $3.0 million investment made in Company B (“Investment B”)

Year 2: Investment A sold for $5.0 million and fair market value (“FMV”) of Investment B determined to be $3.5 million

Year 3: FMV of Investment B determined to be $2.0 million

Year 4: Investment B sold for $3.25 million

The capital gains portion of the incentive fee would be:

Year 1: None

Year 2: Capital gains incentive fee of $0.6 million—($3.0 million realized capital gains on sale of Investment A multiplied by 20.0%)

Year 3: None—$0.4 million (20.0% multiplied by ($3.0 million cumulative capital gains less $1.0 million cumulative capital depreciation)) less $0.6 million (previous capital gains fee paid in Year 2)

Year 4: Capital gains incentive fee of $50,000—$0.65 million ($3.25 million cumulative realized capital gains multiplied by 20%) less $0.6 million (capital gains incentive fee taken in Year 2)

Alternative 2

Assumptions

Year 1: $2.0 million investment made in Company A (“Investment A”), $5.25 million investment made in Company B (“Investment B”) and $4.5 million investment made in Company C (“Investment C”)

Year 2: Investment A sold for $4.5 million, FMV of Investment B determined to be $4.75 million and FMV of Investment C determined to be $4.5 million

Year 3: FMV of Investment B determined to be $5.0 million and Investment C sold for $5.5 million

Year 4: FMV of Investment B determined to be $6.0 million

Year 5: Investment B sold for $4.0 million

The capital gains incentive fee, if any, would be:

Year 1: None

Year 2: $0.4 million capital gains incentive fee—20.0% multiplied by $2.0 million ($2.5 million realized capital gains on Investment A less $0.5 million unrealized capital depreciation on Investment B)

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Year 3: $0.25 million capital gains incentive fee ⁽¹⁾—$0.65 million (20.0% multiplied by $3.25 million ($3.5 million cumulative realized capital gains less $0.25 million unrealized capital depreciation)) less $0.4 million capital gains incentive fee received in Year 2

Year 4: $0.05 million capital gains incentive fee—$0.7 million ($3.50 million cumulative realized capital gains multiplied by 20.0%) less $0.65 million cumulative capital gains incentive fee paid in Year 2 and Year 3

Year 5: None—$0.45 million (20.0% multiplied by $2.25 million (cumulative realized capital gains of $3.5 million less realized capital losses of $1.25 million)) less $0.7 million cumulative capital gains incentive fee paid in Year 2, Year 3 and Year 4 ⁽²⁾

* The hypothetical amounts of returns shown are based on a percentage of our total net assets and assume no leverage. There is no guarantee that positive returns will be realized and actual returns may vary from those shown in this example.

(1) As illustrated in Year 3 of Alternative 1 above, if a portfolio company were to be wound up on a date other than its fiscal year end of any year, it may have paid aggregate capital gains incentive fees that are more than the amount of such fees that would be payable if such portfolio company had been wound up on its fiscal year end of such year.

(2) As noted above, it is possible that the cumulative aggregate capital gains fee received by the Adviser ($0.70 million) is effectively greater than $0.45 million (20% of cumulative aggregate realized capital gains less net realized capital losses or net unrealized depreciation ($2.25 million)).

Payment of Our Expenses

The base management fee and incentive compensation remunerates the Adviser for work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other out-of-pocket costs and expenses of our operations and transactions, including, without limitation, those relating to:

Ÿ our organization, the Formation Transactions and this offering;

Ÿ calculating our net asset value (including the cost and expenses of any independent valuation firm);

Ÿ fees and expenses payable to third parties, including agents, consultants or other advisors, in monitoring financial and legal affairs for us and in monitoring our investments and performing due diligence on our prospective portfolio companies or otherwise relating to, or associated with, evaluating and making investments;

Ÿ interest payable on debt, if any, incurred to finance our investments and expenses related to unsuccessful portfolio acquisition efforts;

Ÿ other offerings of our common stock and other securities;

Ÿ administration fees and expenses, if any, payable under the Administration Agreement (including our allocable portion of the Adviser’s overhead in performing its obligations under the Administration Agreement, including rent and the allocable portion of the cost of our chief compliance officer, chief financial officer and their respective staffs);

Ÿ transfer agent, dividend agent and custodial fees and expenses;

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Ÿ costs associated with our reporting and compliance obligations under the 1940 Act, as amended, and other applicable federal and state securities laws, and stock exchange listing fees;

Ÿ fees and expenses associated with independent audits and outside legal costs;

Ÿ federal, state and local taxes;

Ÿ independent directors’ fees and expenses;

Ÿ costs of any reports, proxy statements or other notices to or communications and meetings with stockholders;

Ÿ costs associated with investor relations;

Ÿ costs and fees associated with any fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;

Ÿ direct costs and expenses of administration, including printing, mailing, long distance telephone, copying, secretarial and other staff; and

Ÿ all other expenses incurred by us or the Adviser in connection with administering our business.

Duration and Termination

Unless terminated earlier as described below, the Investment Advisory Agreement will continue in effect for a period of two years from its effective date. It will remain in effect from year to year thereafter if approved annually by our board of directors or by the affirmative vote of the holders of a majority of our outstanding voting securities, and, in either case, if also approved by a majority of our directors who are not “interested persons.” The Investment Advisory Agreement automatically terminates in the event of its assignment, as defined in the 1940 Act, by the Adviser and may be terminated by either party without penalty upon not less than 60 days’ written notice to the other. The holders of a majority of our outstanding voting securities may also terminate the Investment Advisory Agreement without penalty upon 60 days’ written notice.

Indemnification

The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations under the Investment Advisory Agreement, the Adviser and its officers, managers, partners, agents, employees, controlling persons and members, and any other person or entity affiliated with it, are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of the Adviser’s services under the Investment Advisory Agreement or otherwise as the Adviser.

Board Approval of the Investment Advisory Agreement

Our board of directors approved the Investment Advisory Agreement at its first meeting, held on October 8, 2013. A discussion regarding the basis for our board of directors’ approval of our Investment Advisory Agreement will be included in our first quarterly report on Form 10-Q filed subsequent to completion of this offering.

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Administration Agreement

The Administration Agreement provides that the Adviser will furnish us with office facilities and equipment and will provide us with clerical, bookkeeping, recordkeeping and other administrative services at such facilities. Under the Administration Agreement, the Adviser will perform, or oversee the performance of, our required administrative services, which will include being responsible for the financial and other records that we are required to maintain and preparing reports to our stockholders and reports and other materials filed with the SEC. In addition, the Adviser will assist us in determining and publishing our net asset value, oversee the preparation and filing of our tax returns and the printing and dissemination of reports and other materials to our stockholders, and generally oversees the payment of our expenses and the performance of administrative and professional services rendered to us by others. Under the Administration Agreement, the Adviser will also provide managerial assistance on our behalf to those portfolio companies that have accepted our offer to provide such assistance. The Adviser will satisfy certain of its obligations under the Administration Agreement to us through the Services Agreement with Cyrus Capital, including supplying us with our interim chief financial officer. See “Related Party Transactions and Certain Relationships – Services Agreement.”

Payments under the Administration Agreement will be equal to an amount based upon our allocable portion (subject to the review of our board of directors) of the Adviser’s overhead in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions and our allocable portion of the cost of our chief financial officer and chief compliance officer and their respective staffs. In addition, if requested to provide significant managerial assistance to our portfolio companies, the Adviser will be paid an additional amount based on the services provided, which shall not exceed the amount we receive from such portfolio companies for providing this assistance. The Administration Agreement will have an initial term of two years and may be renewed with the approval of our board of directors. The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party. To the extent that the Adviser outsources any of its functions, we will pay the fees associated with such functions on a direct basis without any incremental profit to the Adviser.

Indemnification

The Administration Agreement provides that, absent criminal conduct, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, the Adviser and its officers, managers, partners, agents, employees, controlling persons and members, and any other person or entity affiliated with it, are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of the Adviser’s services under the Administration Agreement or otherwise as our administrator.

License Agreement

We have entered into a license agreement with the Adviser under which the Adviser has agreed to grant us a non-exclusive, royalty-free license to use the name “CM Finance.” Under this agreement, we have a right to use the “CM Finance” name for so long as the Adviser or one of its affiliates remains the Adviser. Other than with respect to this limited license, we have no legal right to the “CM Finance” name. This license agreement will remain in effect for so long as the Investment Advisory Agreement with the Adviser is in effect.

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RELATED PARTY TRANSACTIONS AND CERTAIN RELATIONSHIPS

Policies and Procedures for Managing Conflicts; Co-investment Opportunities

We have entered into agreements with the Adviser, in which our senior management and members of the Adviser’s investment committee have direct ownership and other financial interests. Mr. Mauer, our Chief Executive Officer, Mr. Jansen, our President and Secretary and members of our board of directors together hold a 42% interest in the Adviser. The Adviser may in the future manage other investment funds, accounts or investment vehicles that invest or may invest in assets eligible for purchase by us. To the extent that we compete with entities managed by the Adviser or any of its affiliates for a particular investment opportunity, the Adviser will allocate investment opportunities across the entities for which such opportunities are appropriate, consistent with (a) its internal investment allocation policies, (b) the requirements of the Advisers Act, and (c) certain restrictions under the 1940 Act regarding co-investments with affiliates.

Stifel Arrangement

On December 17, 2013, we entered into the Stifel Arrangement pursuant to which Stifel made a capital commitment to us in an amount of up to $40.0 million, and will have certain rights, such as a right to nominate for election a member of our board of directors, who would be considered “interested” (that is, not independent for purposes of the 1940 Act). We intend to call $32.7 million of Stifel’s capital commitment immediately after the CM Finance Merger and prior to our election to be regulated as a BDC and the pricing of this offering for purposes of repurchasing $32.7 million of the Cyrus Funds’ interest in us assuming an offering of $100 million. Under the Stifel Arrangement, upon the completion of this offering, Stifel will own approximately 17.2% of our outstanding common stock. In addition, Stifel holds a 20% interest in the Adviser. As a result of its interest in the Adviser, Stifel will benefit from our performance and our investments. Stifel will not have any rights to exercise a controlling influence over our operations or the operations or investment management function of the Adviser.

Six of the investment professionals employed by the Adviser as part of the Investment Team are also employees of Stifel pursuant to the Stifel Arrangement. Although these investment professionals dedicate a majority of their time to the business and activities of the Adviser, they are concurrent employees of both Stifel and the Adviser, and as a result, may continue to engage in investment advisory activities for Stifel. In addition, until such time as we and the Adviser no longer share office space with Cyrus Capital, these dual employees will not maintain office space with the Adviser or Cyrus Capital. This dual employment arrangement could result in a conflict of interest and may distract them from their responsibilities to us. Mr. Kuppenheimer, a member of the Adviser’s investment committee and member of our board of directors, is an employee of Stifel, and as a result, continues to engage in investment advisory activities for Stifel, which could result in a conflict of interest and may distract Mr. Kuppenheimer from his responsibilities to us. Messrs. Mauer and Jansen monitor the activities of the members of the Investment Team for any conflicts of interest and will seek to resolve them on our behalf, subject to the oversight of our board of directors. As a member of the Adviser’s investment committee and our board of directors, Mr. Kuppenheimer will recuse himself from consideration of any potential conflict related to Stifel should any such conflict arise.

Under the Stifel Arrangement and subject to certain restrictions, Stifel will use its commercially reasonable efforts to present to us to review and bid on Stifel Nicolaus & Company, Incorporated-originated leveraged finance and high yield corporate debt opportunities consistent with our investment strategy, subject to the approval of our board of directors, as necessary under the 1940 Act, and certain other limitations. Stifel may invest in the same portfolio companies that we invest in, and (regardless of whether our investment arose from a Stifel-originated opportunity) Stifel

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may, through such investments, have interests that conflict with ours, including receiving fees from the portfolio company directly as well as through its interest in the Adviser. We believe that we may co-invest with Stifel and its affiliates upon approval of a majority of our directors who are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act.

Keefe, Bruyette & Woods, Inc., one of the underwriters in this offering, is also a subsidiary of Stifel Financial Corp. and a sister company to Stifel and its affiliates may act as dealers in connection with this offering. Because Stifel will own a 36.4% interest in us immediately prior to the completion of this offering and approximately 17.2% after giving effect to this offering, assuming an offering of $100 million, and owns an interest in the Adviser, and will benefit from our performance, including in this offering, it may be deemed an affiliate under applicable FINRA rules and a “conflict of interest” may exist. See “Underwriting” for additional information.

Cyrus Capital Relationship

The Cyrus Funds currently own 100% of our outstanding equity and will own approximately 30.1% of our outstanding common stock upon the completion of the formation transactions and this offering. Pursuant to an irrevocable proxy, the shares of our common stock held by the Cyrus Funds upon completion of this offering must be voted in the same manner as our other stockholders (excluding Stifel) vote their shares. The Cyrus Funds also hold a 38% indirect economic interest, but no voting interest, in the Adviser. As a result of its economic interest in the Adviser, the Cyrus Funds benefit from our performance and our investments. Neither the Cyrus Funds nor Cyrus Capital will have any rights to exercise a controlling influence over our operations or the operations or investment management function of the Adviser. As a result of the relationship with Cyrus and the Cyrus Funds, we could be presumed to be an affiliate of the Cyrus Funds under the 1940 Act. However, a person’s status as an “affiliate” under the 1940 Act is a rebuttable presumption, which we believe we can successfully refute. As a result, we believe that we may invest in the same portfolio companies that the Cyrus Funds invest in, without seeking exemptive relief from the SEC. In addition, the Cyrus Funds may, through such co-investments, have interests that conflict with ours, including receiving fees from the portfolio company directly as well as through its economic interest in the Adviser. Cyrus Capital may also provide us with investment opportunities.

The Adviser has entered into a Services Agreement with Cyrus Capital, pursuant to which Cyrus Capital will provide the Adviser on a non-exclusive basis, with the services of certain employees, who will provide investment services, including analysis of investment opportunities, for us as part of the Adviser’s Investment Team and in connection with the Adviser’s obligations to us under the Investment Advisory Agreement. Although we expect that the Adviser will rely on the Cyrus Capital employees that perform analyst functions for less than 25% of the aggregate time dedicated to our business by the Adviser’s Investment Team, the Cyrus Capital employees will also be engaging in investment advisory activities for the private investment funds managed by Cyrus Capital, including the Cyrus Funds, as well as other funds, which could result in a conflict of interest, with respect to, among other things, the allocation of investment opportunities and may distract them from their responsibilities to us. Messrs. Mauer and Jansen will monitor the activities of these investment professionals for any such conflicts and will seek to resolve them on our behalf, subject to the oversight of our board of directors. In addition, under the Services Agreement, the Adviser has retained the services of accounting and back office professionals to assist the Adviser in fulfilling certain of its obligations to us under the Administration Agreement. Our interim Chief Financial Officer is provided to us pursuant to the Adviser’s obligations under the Administration Agreement. We also will be sharing information technology with and receiving other administrative services

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from Cyrus Capital through the Services Agreement pursuant to the Adviser’s obligations under the Administration Agreement. In addition, we currently share office space with the Adviser and Cyrus Capital. We expect to move our office space during the first calendar quarter of 2014 and will then no longer share office space with Cyrus Capital. The Services Agreement has an initial term of five years and may be terminated by Cyrus Capital at any time only under certain circumstances, including if the Adviser ceases to provide investment advisory service to us. The Services Agreement may also be terminated by either Cyrus Capital or the Adviser upon 90 days’ notice prior to the initial five-year term and the expiration of each one-year anniversary thereafter.

Investment Advisory Agreement

We have entered into an Investment Advisory Agreement with the Adviser. Pursuant to this agreement, we have agreed to pay to the Adviser a base management fee and an incentive fee. Messrs. Mauer and Jansen, each an interested member of our board of directors, has a direct or indirect pecuniary interest in the Adviser. See “Management Agreements.” The incentive fee will be computed and paid on income that we may not have yet received in cash at the time of payment. This fee structure may create an incentive for the Adviser to invest in certain types of speculative securities. Additionally, we will rely on investment professionals from the Adviser (including through the Services Agreement) to assist our board of directors with the valuation of our portfolio investments. The Adviser’s management fee and incentive fee is based on the value of our investments and, therefore, there may be a conflict of interest when personnel of the Adviser are involved in the valuation process for our portfolio investments.

License Agreement

We have entered into a license agreement with the Adviser pursuant to which the Adviser has granted us a non-exclusive, royalty-free license to use the name “CM Finance.”

Administration Agreement

We have entered into an Administration Agreement with the Adviser pursuant to which the Adviser (through the Services Agreement with Cyrus Capital) will furnish us with office facilities and equipment and will provide us with the clerical, bookkeeping, recordkeeping and other administrative services necessary to conduct day-to-day operations. Under this Administration Agreement, the Adviser will perform, or oversees the performance of, our required administrative services, which include, among other things, being responsible for the financial records which we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. See “Management Agreements.” We will reimburse the Adviser for the allocable portion (subject to the review of our board of directors) of overhead and other expenses incurred by it in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions, and our allocable portion of the cost of our chief financial officer and chief compliance officer and their respective staffs. In addition, the Adviser will satisfy certain of its obligations to us under the Administration Agreement through the Services Agreement with Cyrus Capital.

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CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS

The following table sets out certain ownership information with respect to our common stock for those persons who directly or indirectly own, control or hold with the power to vote five percent or more of our outstanding common stock, each of our directors and officers and all officers and directors as a group. Immediately after this offering, there will be 12,666,666 shares of common stock outstanding.

		Percentage of Common Stock Outstanding
		Immediately Prior to This Offering (1)					Immediately after This Offering (2)
Name and Address	Type of Ownership	Shares Owned		Percentage			Shares Owned		Percentage
Cyrus Opportunities Master Fund II, Ltd. (3) Crescent 1, L.P. CRS Master Fund, L.P. Cyrus Select Opportunities Master Fund, Ltd. c/o Cyrus Capital Partners, L.P. 399 Park Avenue, 39th Floor New York, New York 10022	Beneficial		3,818,182		63.6	%		3,818,182		30.1	%
Stifel Venture Corp. (4) 237 Park Avenue, 8th Floor New York, NY 10017	Beneficial		2,181,818		36.4	%		2,181,818		17.2	%
Directors and Executive Officers:
Michael C. Mauer	Beneficial		—		—	%		66,667		*	%
Christopher E. Jansen	Beneficial		—		—			66,667		*
Stephan Kuppenheimer	Beneficial		—		—			—		—
Brennan McCaw	Beneficial		—		—			—		—
Edward J. Cook	Beneficial		—		—			—		—
Julie Persily	Beneficial		—		—			3,334		*
Robert Ryder	Beneficial		—		—			10,000		*
Robert Wagner	Beneficial		—		—			3,334		*
Keith Lee	Beneficial		—		—			3,334		*
All officers and directors as a group (10 persons)	Beneficial		—		—			153,336		1.2	%

* Less than 1.0%

(1) Assumes the issuance of 6,000,000 shares in connection with the CM Finance Merger and our repurchase of 2,181,818 shares held by the Cyrus Funds.

(2) Assumes the issuance of 6,666,666 shares offered hereby.

(3) Includes 1,890,000 shares held by Cyrus Opportunities Master Fund II, Ltd., 823,581 shares held by Crescent 1, L.P., 740,345 shares held by CRS Master Fund, L.P., and 364,256 shares held by Cyrus Select Opportunities Master Fund, Ltd. Each of the Cyrus Funds is subject to a lock-up agreement with respect to the shares of common stock issued to it in connection with the CM Finance Merger. Pursuant to an irrevocable proxy, 3,818,182 shares held by the Cyrus Funds must be voted in the same manner as our other stockholders, excluding Stifel Venture Corp., vote their shares.

(4) Stifel Venture Corp. is subject to a lock-up agreement with respect to the shares of common stock issued to it in connection with the formation transactions.

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The following table sets out the dollar range of our equity securities beneficially owned by each of our directors upon completion of this offering. We are not part of a “family of investment companies,” as that term is defined in the 1940 Act.

Name of Director	Dollar Range of Equity Securities in CM Finance Inc (1)(2)
Independent Directors
Julie Persily		$10,001—$50,000
Robert Ryder		over $100,000
Robert Wagner		$10,001—$50,000
Keith Lee		$10,000—50,000
Interested Directors
Michael C. Mauer		over $100,000
Christopher E. Jansen		over $100,000
Stephan Kuppenheimer		—

(1) Dollar ranges are as follows: none, $1-$10,000, $10,001-$50,000, $50,001-$100,000, or over $100,000.

(2) Beneficial ownership has been determined in accordance with Rule 16a-1(a)(2) of the Exchange Act.

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DETERMINATION OF NET ASSET VALUE

The net asset value per share of our outstanding shares of common stock will be determined quarterly by dividing the value of total assets minus liabilities by the total number of shares outstanding.

In calculating the value of our total assets, investment transactions will be recorded on the trade date. Realized gains or losses will be computed using the specific identification method. Investments for which market quotations are readily available will be valued at such market quotations. Debt and equity securities that are not publicly traded or whose market price is not readily available will be valued at fair value as determined in good faith by our board of directors based on the input of our management and valuation committee. In addition, our board of directors will retain one or more independent valuation firms to review the valuation of each portfolio investment for which a market quotation is not available at least quarterly. We also have adopted ASC 820. This accounting statement requires us to assume that the portfolio investment is assumed to be sold in the principal market to market participants, or in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820, the market in which we can exit portfolio investments with the greatest volume and level activity is considered our principal market.

The valuation process will be conducted at the end of each fiscal quarter, with each of our valuations of portfolio companies without market quotations subject to review by one or more independent valuation firm each quarter. When an external event with respect to one of our portfolio companies, such as a purchase transaction, public offering or subsequent equity sale occurs, we expect to use the pricing indicated by the external event to corroborate our valuation.

A readily available market value is not expected to exist for most of the investments in our portfolio, and we will value these portfolio investments at fair value as determined in good faith by our board of directors under our valuation policy and process. The types of factors that our board of directors may take into account in determining the fair value of our investments generally include, as appropriate, comparisons of financial ratios of the portfolio companies that issued such private equity securities to peer companies that are public, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the company will consider the pricing indicated by the external event to corroborate the private equity valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different from the valuations currently assigned. See “Risk Factors—Risks Related to our Investments—Price declines and illiquidity in the corporate debt markets may adversely affect the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.”

With respect to investments for which market quotations are not readily available, our board of directors will undertake a multi-step valuation process each quarter, as described below:

Ÿ our quarterly valuation process will begin with each portfolio company or investment being initially valued by the investment professionals of the Adviser responsible for the portfolio investment;

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Ÿ preliminary valuation conclusions will then be documented and discussed with our senior management and the Adviser;

Ÿ at least once quarterly, the valuation for each portfolio investment will be reviewed by an independent valuation firm and/or independent auditors;

Ÿ the valuation committee of our board of directors will then review these preliminary valuations; and

Ÿ the board of directors will then discuss valuations and determine the fair value of each investment in our portfolio in good faith, based on the input of the Adviser, the independent valuation firm, the independent auditors and the valuation committee.

In following these approaches, the types of factors that will be taken into account in fair value pricing investments will include, as relevant, but not be limited to:

Ÿ available current market data, including relevant and applicable market trading and transaction comparables;

Ÿ applicable market yields and multiples;

Ÿ security covenants;

Ÿ call protection provisions;

Ÿ information rights;

Ÿ the nature and realizable value of any collateral;

Ÿ the portfolio company’s ability to make payments, its earnings and discounted cash flows and the markets in which it does business;

Ÿ comparisons of financial ratios of peer companies that are public;

Ÿ comparable merger and acquisition transactions; and

Ÿ the principal market and enterprise values.

Determination of fair values involves subjective judgments and estimates not susceptible to substantiation by auditing procedures. Under current auditing standards, the notes to our financial statements refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.

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DIVIDEND REINVESTMENT PLAN

We have adopted a dividend reinvestment plan that will provide for reinvestment of our stockholder distributions, unless a stockholder elects to receive cash as provided below. As a result, if our board of directors authorizes, and we declare, a cash distribution, then our stockholders who have not “opted out” of such dividend reinvestment plan will have their cash distribution automatically reinvested in additional shares of our common stock, rather than receiving the cash distribution.

No action is required on the part of a registered stockholder to have its cash distribution reinvested in shares of our common stock. A registered stockholder may elect to receive an entire distribution in cash by notifying American Stock Transfer and Trust Company, LLC, the plan administrator and our transfer agent, registrar and distribution disbursing agent, in writing so that such notice is received by the plan administrator by the record date for distributions to stockholders. The plan administrator will set up an account for shares acquired through the plan for each stockholder who has not elected to receive distributions in cash and hold such shares in non-certificated form. Upon request by a stockholder participating in the plan, received in writing not less than three business days prior to the payment date, the plan administrator will, instead of crediting shares to the participant’s account, issue a certificate registered in the participant’s name for the number of whole shares of our common stock and a check for any fractional share. The plan administrator is authorized to deduct a $15.00 transaction fee plus a brokerage commission of $0.10 per share from the proceeds of the sale of any fractional share.

Those stockholders whose shares are held by a broker or other financial intermediary may receive distributions in cash by notifying their broker or other financial intermediary of their election.

We expect to use primarily newly issued shares to implement the plan, whether our shares are trading at a premium or at a discount to net asset value. Under such circumstances, the number of shares to be issued to a stockholder is determined by dividing the total dollar amount of the distribution payable to such stockholder by 95% of the market price per share of our common stock at the close of trading on the payment date fixed by our board of directors. Market price per share on that date will be the closing price for such shares on The Nasdaq Global Market or, if no sale is reported for such day, at the average of their reported bid and asked prices. We reserve the right to purchase shares in the open market in connection with our implementation of the plan. Shares purchased in open market transactions by the plan administrator will be allocated to a stockholder based on the average purchase price, excluding any brokerage charges or other charges, of all shares of common stock purchased in the open market.

There will be no brokerage charges or other charges to stockholders who participate in the plan. The plan administrator’s fees will be paid by us. If a participant elects by written notice to the plan administrator prior to termination of his or her account to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a $15.00 transaction fee plus a brokerage commission of $0.10 per share from the proceeds.

Stockholders who receive distributions in the form of stock are generally subject to the same U.S. federal, state and local tax consequences as are stockholders who elect to receive their distributions in cash. The amount of the distribution for federal income tax purposes will be equal to the fair market value of the stock received. However, since a participating stockholder’s cash distributions will be reinvested, such stockholder will not receive cash with which to pay any applicable taxes on reinvested distributions. A stockholder’s basis for determining gain or loss

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upon the sale of stock received in a distribution from us will generally be equal to the amount treated as a distribution for federal income tax purposes. Any stock received in a distribution will have a new holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. stockholder’s account.

Participants may terminate their accounts under the plan by notifying the plan administrator by filling out the transaction request form located at the bottom of the participant’s statement and sending it to the plan administrator at the address below. Those stockholders whose shares are held by a broker or other nominee who wish to terminate his or her account under the plan may do so by notifying his or her broker or nominee. You may also terminate your account online at www.amstock.com or via the toll free number (800) 937-5449. You may also call the toll free number with any inquiries you may have. Representatives are available Monday to Friday 8 a.m. to 8 p.m. Eastern Standard Time.

The plan may be terminated by us upon notice in writing mailed to each participant at least 30 days prior to any record date for the payment of any stockholder distribution by us. All correspondence concerning the plan should be directed to the plan administrator by mail at American Stock Transfer and Trust Company LLC, 6201 15^th Avenue, Brooklyn, New York, 11219, or by calling the plan administrator at (718) 921-8124.

If you withdraw or the plan is terminated, you will receive the number of whole shares in your account under the plan and a cash payment for any fraction of a share in your account.

If you hold your common stock with a brokerage firm that does not participate in the plan, you will not be able to participate in the plan and any distribution reinvestment may be effected on different terms than those described above. Consult your financial adviser for more information.

Neither we nor American Stock Transfer & Trust Co, LLC will be liable for any act performed in good faith or for any good faith omission to act or failure to act, including, without limitation, any claim of liability (a) arising out of failure to terminate a participant’s account, sell shares held in the Plan or reinvest dividends; (b) with respect to the prices at which stock is purchased or sold for the participant’s account and the time such purchases or sales are made. Without limiting the foregoing, American Stock Transfer & Trust Co, LLC will not be liable for any claim made more than 30 days after any instruction to buy or sell stock was given to American Stock Transfer & Trust Co, LLC.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is a general summary of the material U.S. federal income tax considerations applicable to us and to an investment in our shares of common stock. This summary does not purport to be a complete description of the U.S. federal income tax considerations applicable to such an investment. For example, we have not described certain considerations that may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, insurance companies, dealers in securities, pension plans and trusts, and financial institutions. This summary assumes that investors hold our common stock as a capital asset (within the meaning of the Code). The discussion is based upon the Code, Treasury regulations, and administrative and judicial interpretations, each as of the date of this prospectus and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion. We have not sought and will not seek any ruling from the Internal Revenue Service, or the IRS, regarding this offering. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment assets.

A “U.S. stockholder” is a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:

Ÿ an individual who is a citizen or resident of the United States;

Ÿ a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

Ÿ an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

Ÿ a trust if either a U.S. court can exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or the trust was in existence on August 20, 1996, was treated as a U.S. person prior to that date, and has made a valid election to be treated as a U.S. person.

A “Non-U.S. stockholder” is a beneficial owner of shares of our common stock that is not a U.S. stockholder.

If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of shares of our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A prospective investor that is a partner in a partnership that will hold shares of our common stock should consult its tax advisors with respect to the partnership’s purchase, ownership and disposition of shares of our common stock.

Tax matters are very complicated and the tax consequences to an investor of an investment in our shares of common stock will depend on the facts of his, her or its particular situation. We encourage investors to consult their tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of U.S. federal, state, local and foreign tax laws, eligibility for the benefits of any applicable tax treaty, and the effect of any possible changes in the tax laws.

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Election to be Taxed as a RIC

As a BDC, we intend to elect to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that we timely distribute to our stockholders as dividends. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary taxable income plus the excess of our realized net short-term capital gains over our realized net long-term capital losses (the “Annual Distribution Requirement”).

Taxation as a RIC

If we:

Ÿ qualify as a RIC; and

Ÿ satisfy the Annual Distribution Requirement;

then we will not be subject to U.S. federal income tax on the portion of our investment company taxable income and net capital gain, defined as net long-term capital gains in excess of net short-term capital losses, we distribute to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any net income or net capital gain not distributed (or deemed distributed) to our stockholders.

We will be subject to a 4% nondeductible U.S. federal excise tax on our undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (a) 98% of our net ordinary income for each calendar year, (b) 98.2% of our capital gain net income for the one-year period ending October 31 in that calendar year and (c) any income realized, but not distributed, in the preceding year and on which we paid no U.S. federal income tax (the “Excise Tax Avoidance Requirement”). We currently intend to make sufficient distributions each taxable year to satisfy the Excise Tax Avoidance Requirement.

In order to qualify as a RIC for U.S. federal income tax purposes, we must, among other things:

Ÿ qualify to be regulated as a BDC under the 1940 Act at all times during each taxable year;

Ÿ derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities, or other income derived with respect to our business of investing in such stock or securities, and net income derived from interests in “qualified publicly traded partnerships” (which generally are partnerships that are traded on an established securities market or tradable on a secondary market, other than partnerships that derive 90% of their income from interest, dividends and other permitted RIC income) (the “90% Income Test”); and

Ÿ diversify our holdings so that at the end of each quarter of the taxable year:

Ÿ at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer; and

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Ÿ no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer or of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or in the securities of one or more qualified publicly traded partnerships (the “Diversification Tests”).

We may invest in partnerships, including qualified publicly traded partnerships, which may result in our being subject to state, local or foreign income, franchise or withholding liabilities.

We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, with increasing interest rates or issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. Because any original issue discount accrued will be included in our investment company taxable income for the year of accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount. If we are not able to obtain sufficient cash from other sources to satisfy the Annual Distribution Requirement, we may fail to qualify as a RIC and become subject to corporate-level U.S. federal income taxes on all of our taxable income without the benefit of the dividends-paid deduction.

If we form an SBIC subsidiary, we expect that we would be partially dependent on the SBIC subsidiary for cash distributions to enable us to meet the RIC distribution requirements. The SBIC subsidiary may be limited by the Small Business Investment Act of 1958, and SBA regulations governing SBICs, from making certain distributions to us that may be necessary to maintain our status as a RIC. We may have to request a waiver of the SBA’s restrictions for the SBIC subsidiary to make certain distributions to maintain our RIC status. We cannot assure you that the SBA will grant such waiver and if the SBIC subsidiary is unable to obtain a waiver, compliance with the SBA regulations may result in loss of RIC tax treatment and a consequent imposition of corporate-level federal income tax on us.

Although we do not presently expect to do so, we are authorized to borrow funds and to sell assets in order (i) to satisfy the Annual Distribution Requirement and to otherwise eliminate our liability for U.S. federal income and excise taxes and (ii) to satisfy the Diversification Tests. However, under the 1940 Act, we are not permitted to borrow additional funds or to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. See “Regulation—Senior Securities.” Moreover, our ability to dispose of assets to meet the Annual Distribution Requirement, the Excise Tax Avoidance Requirement or the Diversification Tests may be limited by (a) the illiquid nature of our portfolio and/or (b) other requirements relating to our qualification as a RIC. If we dispose of assets in order to meet the Annual Distribution Requirement, the Excise Tax Avoidance Requirement, or the Diversification Tests, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

We anticipate that, as a result of the CM Finance Merger, we may hold assets (including intangible assets not reflected on the balance sheet, such as goodwill) with “built-in gain,” which are assets whose fair market value as of the effective date of the merger exceed their tax basis. In general, to the extent that such built-in gain is attributable to members of CM Finance LLC as of the date of the merger that are C corporations for tax purposes (“C-corporation members”), we will be required to pay a corporate-level tax on the net amount of any such built-in gains that we

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recognize during the ten-year period beginning on the effective date of our election to be treated as a RIC. Alternatively, we may make a special election to cause the C-corporation members to recognize an allocable portion of net built-in gain as of the date of the merger. In that event, CM Finance LLC would be required to recognize such built-in gain as if a proportionate share of its assets were sold at the time of the merger. The amount of any such gain recognized is required to be allocated to the C-corporation members as of the date of the merger. We do not anticipate making this election at this time. Any corporate-level built-in gain tax is payable at the time the built-in gains are recognized (which generally will be the years in which the built-in gain assets are sold in a taxable transaction). The amount of this tax will vary depending on the assets that are actually sold by us in this 10-year period, the actual amount of net built-in gain or loss present in those assets as of the effective date of our election to be treated as a RIC, and effective tax rates. The payment of any such corporate-level tax on built-in gains will be a company expense that will be borne by all stockholders (not just any former C-corporation members) and will reduce the amount available for distribution to shareholders. Recognized built-in gains that are ordinary in character and the excess of short-term capital gains over long-term capital losses will be included in our investment company taxable income, and generally we must distribute annually at least 90% of any such amounts (net of corporate taxes we pay on those gains) in order to be eligible for RIC tax treatment. Any such amount distributed likely will be taxable to stockholders as ordinary income. Built-in gains (net of taxes) that are recognized within the 10-year period and that are long-term capital gains likely will also be distributed (or deemed distributed) annually to our stockholders. Any such amount distributed (or deemed distributed) likely will be taxable to stockholders as long-term capital gains.

Certain of our investment practices may be subject to special and complex U.S. federal income tax provisions that may, among other things, (a) treat dividends that would otherwise constitute qualified dividend income as non-qualified dividend income, (b) treat dividends that would otherwise be eligible for the corporate dividends received deduction as ineligible for such treatment, (c) disallow, suspend or otherwise limit the allowance of certain losses or deductions, (d) convert lower-taxed long term capital gain into higher-taxed short-term capital gain or ordinary income, (e) convert an ordinary loss or a deduction into a capital loss (the deductibility of which is more limited), (f) cause us to recognize income or gain without a corresponding receipt of cash, (g) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (h) adversely alter the characterization of certain complex financial transactions and (i) produce income that will not be qualifying income for purposes of the 90% Income Test. We intend to monitor our transactions and may make certain tax elections to mitigate the effect of these provisions and prevent our disqualification as a RIC.

We may in the future acquire equity interests in companies that are treated for U.S. federal income tax purposes as shares in PFICs. We may be subject to U.S. federal income tax on our allocable share of a portion of any “excess distribution” received on, or any gain from the disposition of, such shares even if our allocable share of such income is distributed as a taxable dividend to the PFIC’s stockholders. Additional charges in the nature of interest generally will be imposed on us in respect of deferred taxes arising from any such excess distribution or gain. If we elect to treat a PFIC as a “qualified electing fund” under the Code (a “QEF”), in lieu of the foregoing requirements, we will be required to include in income each year our proportionate share of the ordinary earnings and net capital gain of the QEF, even if such income is not distributed by the QEF. Alternatively, we may elect mark-to-market treatment for a PFIC; in this case, we will recognize as ordinary income our allocable share of any increase in the value of such shares, and as ordinary loss our allocable share of any decrease in such value to the extent that any such decrease does not exceed prior increases included in our income. Under either election, we may be required to recognize in a year income in excess of distributions from PFICs and proceeds from dispositions of PFIC shares during that year, and we must distribute such income to satisfy the Annual Distribution Requirement and the Excise

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Tax Avoidance Requirement. Some of the income and fees that we may recognize will not satisfy the 90% Income Test. In order to ensure that such income and fees do not disqualify us as a RIC for a failure to satisfy the 90% Income Test, we may hold assets that generate such income and provide services that generate such fees indirectly through one or more entities treated as corporations for U.S. federal income tax purposes. Such corporations will be required to pay U.S. federal corporate income tax on their earnings, which ultimately will reduce our return on such income and fees.

Failure to Qualify as a RIC

If we were unable to qualify for treatment as a RIC, and if certain remedial provisions are not available, we would be subject to tax on all of our taxable income at regular corporate rates. We would not be able to deduct distributions to stockholders, nor would they be required to be made. Distributions, including distributions of net long-term capital gain, would generally be taxable to our stockholders as ordinary dividend income to the extent of our current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate stockholders would be eligible to claim a dividends received deduction with respect to such distributions, and non-corporate stockholders would be able to treat such dividend income as “qualified dividend income,” which is subject to reduced rates of U.S. federal income tax. Distributions in excess of our current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder’s tax basis, and any remaining distributions would be treated as a capital gain. If we fail to qualify as a RIC for a period greater than two taxable years, to qualify as a RIC in a subsequent year we may be subject to regular corporate tax on any net built-in gains with respect to certain of our assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if we had been liquidated) that we elect to recognize on requalification or when recognized over the next ten years.

The remainder of this discussion assumes that we will qualify as a RIC and will satisfy the Annual Distribution Requirement.

Taxation of U.S. Stockholders

Distributions by us generally are taxable to U.S. stockholders as ordinary income or capital gains. Distributions of our “investment company taxable income” (which is, generally, our net ordinary income plus net short-term capital gains in excess of net long-term capital losses) will be taxable as ordinary income to U.S. stockholders to the extent of our current and accumulated earnings and profits, whether paid in cash or reinvested in additional shares of our common stock. To the extent such distributions paid by us to non-corporate stockholders (including individuals) are attributable to dividends from U.S. corporations and certain qualified foreign corporations and if certain holding period requirements are met, such distributions generally will be treated as qualified dividend income and will be eligible for a maximum U.S. federal income tax rate of 20%. In this regard, it is anticipated that distributions paid by us will generally not be attributable to dividends and, therefore, generally will not qualify for the 20% maximum U.S. federal income tax rate. Distributions of our net capital gains (which is generally our realized net long-term capital gains in excess of realized net short-term capital losses) properly reported by us as “capital gain dividends” will be taxable to a U.S. stockholder as long-term capital gains (currently at a maximum U.S. federal income tax rate of 20%) in the case of individuals, trusts or estates, regardless of the U.S. stockholder’s holding period for his, her or its common stock and regardless of whether paid in cash or reinvested in additional shares of common stock. Distributions in excess of our earnings and profits first will reduce a U.S. stockholder’s adjusted tax basis in such stockholder’s common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to such U.S. stockholder. U.S. stockholders receiving distributions in the form of additional shares of our common stock should be treated for U.S. federal income tax purposes as receiving a

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distribution in an amount equal to the fair market value of the shares received, and should have a cost basis in the shares received equal to such amount. Although we currently intend to distribute any net long-term capital gains at least annually, we may in the future decide to retain some or all of our net long-term capital gains but designate the retained amount as a “deemed distribution.” In that case, among other consequences, we will pay tax on the retained amount, each U.S. stockholder will be required to include its share of the deemed distribution in income as if it had been distributed to the U.S. stockholder, and the U.S. stockholder will be entitled to claim a credit equal its allocable share of the tax paid on the deemed distribution by us. The amount of the deemed distribution net of such tax will be added to the U.S. stockholder’s tax basis for their shares of common stock. Since we expect to pay tax on any retained capital gains at our regular corporate tax rate, and since that rate is in excess of the maximum rate currently payable by individuals on long-term capital gains, the amount of tax that individual U.S. stockholders will be treated as having paid and for which they will receive a credit will exceed the tax they owe on the retained net capital gain. Such excess generally may be claimed as a credit against the U.S. stockholder’s other U.S. federal income tax obligations or may be refunded to the extent it exceeds a stockholder’s liability for U.S. federal income tax. A stockholder that is not subject to U.S. federal income tax or otherwise required to file a U.S. federal income tax return would be required to file a U.S. federal income tax return on the appropriate form in order to claim a refund for the taxes we paid. In order to utilize the deemed distribution approach, we must provide written notice to our stockholders prior to the expiration of 60 days after the close of the relevant taxable year. We cannot treat any of our investment company taxable income as a “deemed distribution.”

We may distribute taxable dividends that are payable in part in our stock. Under certain applicable provision of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of shareholders are treated as taxable dividends. The Internal Revenue Service has issued private rulings indicating that this rule will apply even if the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under these rulings, if too many shareholders elect to receive their distributions in cash, each such shareholder would receive a pro rata share of the total cash to be distributed and would receive the remainder of their distribution in shares of stock. If we decide to make any distributions consistent with these rulings that are payable in part in our stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend (whether received in cash, our stock, or combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly designated as a capital gain dividend) to the extent of our current and accumulated earnings and profits for United States federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our stock.

For purposes of determining (a) whether the Annual Distribution Requirement is satisfied for any year and (b) the amount of capital gain dividends paid for that year, we may, under certain circumstances, elect to treat a dividend that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, the U.S. stockholder will still be treated as receiving the dividend in the taxable year in which the distribution is made. However, any dividend declared by us in October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during

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January of the following year, will be treated as if it had been received by our stockholders on December 31 of the year in which the dividend was declared.

If an investor purchases shares of our common stock shortly before the record date of a distribution, the price of the shares of our common stock will include the value of the distribution and the investor will be subject to tax on the distribution even though it represents a return of their investment.

A U.S. stockholder generally will recognize taxable gain or loss if the stockholder sells or otherwise disposes of their shares of our common stock. Any gain arising from such sale or disposition generally will be treated as long-term capital gain or loss if the stockholder has held their shares of common stock for more than one year. Otherwise, it would be classified as short-term capital gain or loss. However, any capital loss arising from the sale or disposition of shares of our common stock held for six months or less will be treated as long-term capital loss to the extent of the amount of capital gain dividends received, or undistributed capital gain deemed received, with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of shares of our common stock may be disallowed if other shares of our common stock are purchased (whether through reinvestment of distributions or otherwise) within 30 days before or after the disposition. In such a case, the basis of the common stock acquired will be increased to reflect the disallowed loss.

In general, individual U.S. stockholders currently are subject to a maximum U.S. federal income tax rate of 20% on their net capital gain (i.e., the excess of realized net long-term capital gain over realized net short-term capital loss for a taxable year), including a long-term capital gain derived from an investment in our shares of common stock. Such rate is lower than the maximum rate on ordinary income currently payable by individuals. In addition, individuals with income in excess of $200,000 ($250,000 in the case of married individuals filing jointly) and certain estates and trusts are subject to an additional 3.8% tax on their “net investment income,” which generally includes net income from interest, dividends, annuities, royalties, and rents, and net capital gains (other than certain amounts earned from trades or businesses). Corporate U.S. stockholders currently are subject to U.S. federal income tax on net capital gain at the maximum 35% rate also applied to ordinary income. Non-corporate stockholders with net capital losses for a year (i.e., net capital losses in excess of net capital gains) generally may deduct up to $3,000 of such losses against their ordinary income each year; any net capital losses of a non-corporate stockholder in excess of $3,000 generally may be carried forward and used in subsequent years as provided in the Code. Corporate stockholders generally may not deduct any net capital losses for a year, but may carryback such losses for three years or carry forward such losses for five years.

We (or the applicable withholding agent) will send to each of our U.S. stockholders after the end of each calendar year, a notice reporting the amounts includible in such U.S. stockholder’s taxable income for such year as ordinary income and as long-term capital gain. In addition, the U.S. federal income tax status of each year’s distributions generally will be reported to the IRS. Distributions may also be subject to additional state, local and foreign taxes depending on a U.S. stockholder’s particular situation. Dividends distributed by us generally will not be eligible for the dividends-received deduction or the lower tax rates applicable to certain qualified dividends.

We may be required to withhold U.S. federal income tax (“backup withholding”) from all distributions to any non-corporate U.S. stockholder (a) who fails to furnish us with a correct taxpayer identification number or a certificate that such stockholder is exempt from backup withholding or (b) with respect to whom the IRS notifies us that such stockholder has failed to properly report certain interest and dividend income to the IRS and to respond to notices to that effect. An individual’s taxpayer identification number is his or her social security number. Any

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amount withheld under backup withholding is allowed as a credit against the U.S. stockholder’s U.S. federal income tax liability and may entitle such stockholder to a refund, provided that proper information is timely provided to the IRS.

The Foreign Account Tax Compliance Act generally imposes a 30% U.S. federal withholding tax on payments of certain types of income to foreign financial institutions that fail to enter into an agreement with the U.S. Treasury to report certain required information with respect to accounts held by U.S. persons (or held by foreign entities that have U.S. persons as substantial owners). The types of income subject to the tax include U.S. source interest and dividends paid after June 30, 2014, and the gross proceeds from the sale of any property that could produce U.S.-source interest or dividends paid after December 31, 2016. The information required to be reported includes the identity and taxpayer identification number of each account holder that is a U.S. person and transaction activity within the holder’s account. In addition, subject to certain exceptions, this legislation also imposes a 30% withholding on payments to foreign entities that are not financial institutions unless the foreign entity certifies that it does not have a greater than 10% U.S. owner or provides the withholding agent with identifying information on each greater than 10% U.S. owner. When these provisions become effective, a U.S. stockholder that holds its shares through foreign intermediaries or foreign entities could be subject to this 30% withholding tax with respect to distributions on their shares and proceeds from the sale of their shares. Under certain circumstances, a U.S. stockholder might be eligible for refunds or credits of such taxes.

Taxation of Non-U.S. Stockholders

Whether an investment in the shares of our common stock is appropriate for a Non-U.S. stockholder will depend upon that person’s particular circumstances. Non-U.S. stockholders should consult their tax advisors before investing in our common stock.

Distributions of our “investment company taxable income” to Non-U.S. stockholders (including interest income, net short-term capital gain or foreign-source dividend and interest income, which generally would be free of withholding if paid to Non-U.S. stockholders directly) will be subject to withholding of U.S. federal income tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current and accumulated earnings and profits unless the distributions are effectively connected with a U.S. trade or business of the Non-U.S. stockholder, and, if an income tax treaty applies, attributable to a permanent establishment in the United States, in which case the distributions will be subject to U.S. federal income tax at the rates applicable to U.S. persons. In that case, we will not be required to withhold U.S. federal income tax if the Non-U.S. stockholder complies with applicable certification and disclosure requirements. Special certification requirements apply to a Non-U.S. stockholder that is a foreign partnership or a foreign trust, and such entities are urged to consult their tax advisors.

Under a provision that applies to taxable years beginning before January 1, 2014, properly reported dividends received by a Non-U.S. stockholder generally are exempt from U.S. federal withholding tax when they (a) are paid in respect of our “qualified net interest income” (generally, our U.S. source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which we are at least a 10% stockholder, reduced by expenses that are allocable to such income), or (b) are paid in connection with our “qualified short-term capital gains” (generally, the excess of our net short-term capital gain over our long-term capital loss for such taxable year). Although this provision has been subject to previous extensions, we cannot be certain whether this exception will apply for any taxable years beginning after December 31, 2014. In addition, we cannot provide any certainty that we will report any of our distributions as eligible for this exception.

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Actual or deemed distributions of our net capital gains to a Non-U.S. stockholder, and gains realized by a Non-U.S. stockholder upon the sale of our common stock, will not be subject to U.S. federal withholding tax and generally will not be subject to U.S. federal income tax unless the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the Non-U.S. stockholder and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the Non-U.S. stockholder in the United States or, in the case of an individual Non-U.S. stockholder, the stockholder is present in the United States for 183 days or more during the year of the sale or capital gain dividend and certain other conditions are met.

If we distribute our net capital gains in the form of deemed rather than actual distributions (which we may do in the future), a Non-U.S. stockholder will be entitled to a U.S. federal income tax credit or tax refund equal to the stockholder’s allocable share of the tax we pay on the capital gains deemed to have been distributed. In order to obtain the refund, the Non-U.S. stockholder must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return even if the Non-U.S. stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return. For a corporate Non-U.S. stockholder, distributions (both actual and deemed), and gains realized upon the sale of our common stock that are effectively connected with a U.S. trade or business may, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if provided for by an applicable treaty).

A Non-U.S. stockholder who is a non-resident alien individual, and who is otherwise subject to withholding of U.S. federal income tax, may be subject to information reporting and backup withholding of U.S. federal income tax on dividends unless the Non-U.S. stockholder provides us or the applicable withholding agent with an IRS Form W-8BEN (or an acceptable substitute form) or otherwise meets documentary evidence requirements for establishing that it is a Non-U.S. stockholder or otherwise establishes an exemption from backup withholding.

The Foreign Account Tax Compliance Act generally imposes a 30% U.S. federal withholding tax on payments of certain types of income to foreign financial institutions that fail to enter into an agreement with the U.S. Treasury to report certain required information with respect to accounts held by U.S. persons (or held by foreign entities that have U.S. persons as substantial owners). The types of income subject to the tax include U.S. source interest and dividends paid after June 30, 2014, and the gross proceeds from the sale of any property that could produce U.S.-source interest or dividends paid after December 31, 2016. The information required to be reported includes the identity and taxpayer identification number of each account holder that is a U.S. person and transaction activity within the holder’s account. In addition, subject to certain exceptions, this legislation also imposes a 30% withholding on payments to foreign entities that are not financial institutions unless the foreign entity certifies that it does not have a greater than 10% U.S. owner or provides the withholding agent with identifying information on each greater than 10% U.S. owner. When these provisions become effective, depending on the status of a Non-U.S. stockholder and the status of the intermediaries through which they hold their shares, Non-U.S. stockholders could be subject to this 30% withholding tax with respect to distributions on their shares and proceeds from the sale of their shares. Under certain circumstances, a Non-U.S. stockholder might be eligible for refunds or credits of such taxes.

An investment in shares by a non-U.S. person may also be subject to U.S. estate tax. Non-U.S. persons should consult their tax advisors with respect to the U.S. federal income tax and withholding tax, U.S. estate tax and state, local and foreign tax consequences of an investment in the shares of our common stock.

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DESCRIPTION OF OUR CAPITAL STOCK

The following description is based on relevant portions of the Maryland General Corporation Law and our articles of incorporation and bylaws and relevant contracts. This summary is not necessarily complete, and we refer you to the Maryland General Corporation Law and our articles of incorporation and bylaws for a more detailed description of the provisions summarized below.

Our authorized stock consists of 100,000,000 shares of stock, par value $0.001 per share, all of which are initially designated as common stock. We have applied to have our common stock listed on The Nasdaq Global Market under the ticker symbol “CMFN.” There are no outstanding options or warrants to purchase our stock. No stock has been authorized for issuance under any equity compensation plans. Under Maryland law, our stockholders generally are not personally liable for our debts or obligations.

Our outstanding classes of securities immediately following the completion of this offering will be as follows:

(1) Title of Class	(2) Amount Authorized		(3) Amount Held by Us or for Our Account		(4) Amount Outstanding Exclusive of Amounts Shown Under (3)
Common Stock		100,000,000		—		12,666,666

Under our charter, our board of directors is authorized to classify and reclassify any unissued shares of stock into other classes or series of stock without obtaining stockholder approval. As permitted by the Maryland General Corporation Law, our charter provides that the board of directors, without any action by our stockholders, may amend the charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue.

Common Stock

All shares of our common stock have equal rights as to earnings, assets, voting, and distributions and, when they are issued, will be duly authorized, validly issued, fully paid and nonassessable. Distributions may be paid to the holders of our common stock if, as and when authorized by our board of directors and declared by us out of assets legally available therefor. Shares of our common stock have no preemptive, conversion or redemption rights and are freely transferable, except where their transfer is restricted by federal and state securities laws or by contract. In the event of our liquidation, dissolution or winding up, each share of our common stock would be entitled to share ratably in all of our assets that are legally available for distribution after we pay all debts and other liabilities and subject to any preferential rights of holders of our preferred stock, if any preferred stock is outstanding at such time. Each share of our common stock is entitled to one vote on all matters submitted to a vote of stockholders, including the election of directors. Except as provided with respect to any other class or series of stock, the holders of our common stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that holders of a majority of the outstanding shares of common stock can elect all of our directors, and holders of less than a majority of such shares will be unable to elect any director.

Preferred Stock

Our charter authorizes our board of directors to classify and reclassify any unissued shares of stock into other classes or series of stock, including preferred stock. The cost of any such

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reclassification would be borne by our existing common stockholders. Prior to issuance of shares of each class or series, the board of directors is required by Maryland law and by our charter to set the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the board of directors could authorize the issuance of shares of preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. You should note, however, that any issuance of preferred stock must comply with the requirements of the 1940 Act. The 1940 Act requires, among other things, that (a) immediately after issuance and before any distribution is made with respect to our common stock and before any purchase of common stock is made, such preferred stock together with all other senior securities must not exceed an amount equal to 50% of our gross assets after deducting the amount of such distribution or purchase price, as the case may be, and (b) the holders of shares of preferred stock, if any are issued, must be entitled as a class to elect two directors at all times and to elect a majority of the directors if distributions on such preferred stock are in arrears by two full years or more. Certain matters under the 1940 Act require the separate vote of the holders of any issued and outstanding preferred stock. For example, holders of preferred stock would vote separately from the holders of common stock on a proposal to cease operations as a BDC. We believe that the availability for issuance of preferred stock will provide us with increased flexibility in structuring future financings and acquisitions. However, we do not currently have any plans to issue preferred stock.

Limitation on Liability of Directors and Officers; Indemnification and Advance of Expenses

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment and which is material to the cause of action. Our charter contains such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law, subject to the requirements of the 1940 Act.

Our charter authorizes us, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while a director and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her status as a present or former director or officer and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. Our bylaws obligate us, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while a director and at our request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee and who is made a party to the proceeding by reason of his service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her status as a present or former director or officer and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. The charter and bylaws also permit us to indemnify and advance expenses to any person who served a predecessor of us in any of the capacities described above and any of our employees or agents or any employees or agents of our predecessor. In accordance with the 1940 Act, we will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

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Maryland law requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received, unless in either case a court orders indemnification, and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

Our insurance policy does not currently provide coverage for claims, liabilities and expenses that may arise out of activities that our present or former directors or officers have performed for another entity at our request. There is no assurance that such entities will in fact carry such insurance. However, we note that we do not expect to request our present or former directors or officers to serve another entity as a director, officer, partner or trustee unless we can obtain insurance providing coverage for such persons for any claims, liabilities or expenses that may arise out of their activities while serving in such capacities.

Certain Provisions of the Maryland General Corporation Law and Our Charter and Bylaws

The Maryland General Corporation Law and our charter and bylaws contain provisions that could make it more difficult for a potential acquirer to acquire us by means of a tender offer, proxy contest or otherwise. These provisions are expected to discourage certain coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of these provisions outweigh the potential disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms.

Classified board of directors

Our board of directors is divided into three classes of directors serving staggered three-year terms. Upon expiration of their terms, directors of each class will be elected to serve for three-year terms and until their successors are duly elected and qualify and each year one class of directors will be elected by the stockholders. A classified board may render a change in control of us or removal of our incumbent management more difficult. We believe, however, that the longer time required to elect a majority of a classified board of directors will help to ensure the continuity and stability of our management and policies.

Election of Directors

Our charter and bylaws provide that the affirmative vote of the holders of a plurality of the outstanding shares of stock entitled to vote in the election of directors cast at a meeting of

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stockholders duly called and at which a quorum is present will be required to elect a director. Pursuant to our charter our board of directors may amend the bylaws to alter the vote required to elect directors.

Number of Directors; Vacancies; Removal

Our charter provides that the number of directors will be set only by the board of directors in accordance with our bylaws. Our bylaws provide that a majority of our entire board of directors may at any time increase or decrease the number of directors. However, unless our bylaws are amended, the number of directors may never be less than one nor more than nine. Our charter provides that, at such time as we have at least three independent directors and our common stock is registered under the Securities Exchange Act of 1934, as amended, we elect to be subject to the provision of Subtitle 8 of Title 3 of the Maryland General Corporation Law regarding the filling of vacancies on the board of directors. Accordingly, at such time, except as may be provided by the board of directors in setting the terms of any class or series of preferred stock, any and all vacancies on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is elected and qualifies, subject to any applicable requirements of the 1940 Act.

Our charter provides that a director may be removed only for cause, as defined in our charter, and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast in the election of directors.

Action by Stockholders

Under the Maryland General Corporation Law, stockholder action can be taken only at an annual or special meeting of stockholders or (unless the charter provides for stockholder action by less than unanimous written consent, which our charter does not) by unanimous written consent in lieu of a meeting. These provisions, combined with the requirements of our bylaws regarding the calling of a stockholder-requested special meeting of stockholders discussed below, may have the effect of delaying consideration of a stockholder proposal until the next annual meeting.

Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals

Our bylaws provide that with respect to an annual meeting of stockholders, nominations of persons for election to the board of directors and the proposal of business to be considered by stockholders may be made only (a) pursuant to our notice of the meeting, (b) by the board of directors or (c) by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice procedures of our bylaws. With respect to special meetings of stockholders, only the business specified in our notice of the meeting may be brought before the meeting. Nominations of persons for election to the board of directors at a special meeting may be made only (1) pursuant to our notice of the meeting, (2) by the board of directors or (3) provided that the board of directors has determined that directors will be elected at the meeting, by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice provisions of the bylaws. The purpose of requiring stockholders to give us advance notice of nominations and other business is to afford our board of directors a meaningful opportunity to consider the qualifications of the proposed nominees and the advisability of any other proposed business and, to the extent deemed necessary or desirable by our board of directors, to inform stockholders and make recommendations about such qualifications or business, as well as to provide a more orderly procedure for conducting meetings of stockholders. Although our bylaws do not give our board of

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directors any power to disapprove stockholder nominations for the election of directors or proposals recommending certain action, they may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if proper procedures are not followed and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholders.

Calling of Special Meetings of Stockholders

Our bylaws provide that special meetings of stockholders may be called by our board of directors and certain of our officers. Additionally, our bylaws provide that, subject to the satisfaction of certain procedural and informational requirements by the stockholders requesting the meeting, a special meeting of stockholders will be called by the secretary of the corporation upon the written request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting.

Approval of Extraordinary Corporate Action; Amendment of Charter and Bylaws

Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter generally provides for approval of charter amendments and extraordinary transactions by the stockholders entitled to cast at least a majority of the votes entitled to be cast on the matter. Our charter also provides that certain charter amendments, any proposal for our conversion, whether by charter amendment, merger or otherwise, from a closed-end company to an open-end company and any proposal for our liquidation or dissolution requires the approval of the stockholders entitled to cast at least 80% of the votes entitled to be cast on such matter. However, if such amendment or proposal is approved by a majority of our continuing directors (in addition to approval by our board of directors), such amendment or proposal may be approved by a majority of the votes entitled to be cast on such a matter. In either event, in accordance with the requirements of the 1940 Act, any such amendment or proposal that would have the effect of changing the nature of our business so as to cause us to cease to be, or to withdraw our election as, a BDC would be required to be approved by a majority of our outstanding voting securities, as defined under the 1940 Act. The “continuing directors” are defined in our charter as (a) our current directors, (b) those directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of our current directors then on the board of directors or (c) any successor directors whose nomination for election by the stockholders or whose election by the directors to fill vacancies is approved by a majority of continuing directors or the successor continuing directors then in office.

Our charter and bylaws provide that the board of directors will have the exclusive power to make, alter, amend or repeal any provision of our bylaws.

No Appraisal Rights

Except with respect to appraisal rights arising in connection with the Control Share Act discussed below, as permitted by the Maryland General Corporation Law, our charter provides that stockholders will not be entitled to exercise appraisal rights unless a majority of the board of directors shall determine such rights apply.

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Control Share Acquisitions

The Maryland General Corporation Law provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter (the “Control Share Act”). Shares owned by the acquirer, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power:

Ÿ one-tenth or more but less than one-third;

Ÿ one-third or more but less than a majority; or

Ÿ a majority or more of all voting power.

The requisite stockholder approval must be obtained each time an acquirer crosses one of the thresholds of voting power set forth above. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the acquisition of control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days of the demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations, including, as provided in our bylaws compliance with the 1940 Act. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or of any meeting of stockholders at which the voting rights of the shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.

The Control Share Act does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. Our bylaws contain a provision exempting from the Control Share Act any and all acquisitions by any person of our shares of stock. There can be no assurance that such provision will not be amended or eliminated at any time in the future. However, we will not amend our bylaws to be subject to the Control Share Act unless the board of directors determines that it would be in the best interests of our stockholders and we obtain the express approval by the SEC staff of our determination that our being subject to the Control Share Act does not conflict with the 1940 Act.

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Business Combinations

Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder (the “Business Combination Act”). These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:

Ÿ any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or

Ÿ an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of then outstanding voting stock of the corporation.

A person is not an interested stockholder under this statute if the board of directors approved in advance the transaction by which the stockholder otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board.

After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:

Ÿ 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and

Ÿ two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. Our board of directors has adopted a resolution that any business combination between us and any other person is exempted from the provisions of the Business Combination Act, provided that the business combination is first approved by the board of directors, including a majority of the directors who are not interested persons as defined in the 1940 Act. This resolution may be altered or repealed in whole or in part at any time; however, our board of directors will adopt resolutions so as to make us subject to the provisions of the Business Combination Act only if the board of directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Business Combination Act does not conflict with the 1940 Act. If this resolution is repealed, or the board of directors does not otherwise approve a business combination, the statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

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Conflict with 1940 Act

Our bylaws provide that, if and to the extent that any provision of the Maryland General Corporation Law, including the Control Share Act (if we amend our bylaws to be subject to such Act) and the Business Combination Act, or any provision of our charter or bylaws conflicts with any provision of the 1940 Act, the applicable provision of the 1940 Act will control.

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REGULATION

We are a BDC under the 1940 Act and intend to elect to be treated as a RIC under the Code. The 1940 Act contains prohibitions and restrictions relating to transactions between BDCs and their affiliates (including any investment advisers), principal underwriters and affiliates of those affiliates or underwriters and requires that a majority of the directors be persons other than “interested persons,” as that term is defined in the 1940 Act. In addition, the 1940 Act provides that we may not change the nature of our business so as to cease to be, or to withdraw our election as, a BDC unless approved by a majority of our outstanding voting securities.

We may invest up to 100% of our assets in securities acquired directly from issuers in privately negotiated transactions. With respect to such securities, we may, for the purpose of public resale, be deemed an “underwriter” as that term is defined in the Securities Act. Our intention is to not write (sell) or buy put or call options to manage risks associated with the publicly traded securities of our portfolio companies, except that we may enter into hedging transactions to manage the risks associated with interest rate fluctuations. However, we may purchase or otherwise receive warrants to purchase the common stock of our portfolio companies in connection with acquisition financing or other investments. Similarly, in connection with an acquisition, we may acquire rights to require the issuers of acquired securities or their affiliates to repurchase them under certain circumstances. We also do not intend to acquire securities issued by any investment company that exceed the limits imposed by the 1940 Act. Under these limits, we generally cannot acquire more than 3% of the voting stock of any registered investment company, invest more than 5% of the value of our total assets in the securities of one investment company or invest more than 10% of the value of our total assets in the securities of more than one investment company. With regard to that portion of our portfolio invested in securities issued by investment companies, it should be noted that such investments might subject our stockholders to additional expenses. None of these policies is fundamental and may be changed without stockholder approval upon 60 days’ prior written notice to stockholders.

Qualifying Assets

Under the 1940 Act, a BDC may not acquire any asset other than assets of the type listed in section 55(a) of the 1940 Act, which are referred to as “qualifying assets,” unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. The principal categories of qualifying assets relevant to our proposed business are the following:

(1) Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. Under the 1940 Act and the rules thereunder, “eligible portfolio companies” include (1) private domestic operating companies, (2) public domestic operating companies whose securities are not listed on a national securities exchange (e.g., The Nasdaq Global Market) or registered under the Exchange Act, and (3) public domestic operating companies having a market capitalization of less than $250 million. Public domestic operating companies whose securities are quoted on the over-the-counter bulletin board or through Pink Sheets LLC are not listed on a national securities exchange and therefore are eligible portfolio companies.

(2) Securities of any eligible portfolio company which we control.

(3) Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident to

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such a private transaction, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.

(4) Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.

(5) Securities received in exchange for or distributed on or with respect to securities described above, or pursuant to the exercise of warrants or rights relating to such securities.

(6) Cash, cash equivalents, U.S. government securities or high-quality debt securities that mature in one year or less from the date of investment.

The regulations defining qualifying assets may change over time. We may adjust our investment focus as needed to comply with and/or take advantage of any regulatory, legislative, administrative or judicial actions in this area.

Managerial Assistance to Portfolio Companies

In order to count portfolio securities as qualifying assets for the purpose of the 70% test, a BDC must either control the issuer of the securities or must offer to make available to the issuer of the securities significant managerial assistance. However, when the BDC purchases securities in conjunction with one or more other persons acting together, one of the other persons in the group may make available such managerial assistance. Making available managerial assistance means any arrangement whereby the BDC, through its directors, officers, employees or agents, offers to provide, and, if accepted, does so provide, significant guidance and counsel concerning the management, operations or business objectives and policies of a portfolio company. The Adviser will provide such managerial assistance on our behalf to portfolio companies that request this assistance.

Temporary Investments

Pending investment in other types of qualifying assets, as described above, our investments may consist of cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt investments that mature in one year or less from the date of investment, which we refer to, collectively, as temporary investments, so that 70% of our assets are qualifying assets or temporary investments. Typically, we will invest in U.S. Treasury bills or in repurchase agreements, so long as the agreements are fully collateralized by cash or securities issued by the U.S. government or its agencies. A repurchase agreement involves the purchase by an investor, such as us, of a specified security and the simultaneous agreement by the seller to repurchase it at an agreed-upon future date and at a price that is greater than the purchase price by an amount that reflects an agreed-upon interest rate. There is no percentage restriction on the proportion of our assets that may be invested in such repurchase agreements. However, if more than 25% of our total assets constitute repurchase agreements from a single counterparty, we would not meet the Diversification Tests in order to qualify as a RIC for U.S. federal income tax purposes. Accordingly, we do not intend to enter into repurchase agreements with a single counterparty in excess of this limit. The Adviser will monitor the creditworthiness of the counterparties with which we enter into repurchase agreement transactions.

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Senior Securities

We are permitted, under specified conditions, to issue multiple classes of indebtedness and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 200% immediately after each such issuance. In addition, while any senior securities remain outstanding, we must make provisions to prohibit any distribution to our stockholders or the repurchase of such securities or shares unless we meet the applicable asset coverage ratios at the time of the distribution or repurchase. We may also borrow amounts up to 5% of the value of our total assets for temporary or emergency purposes without regard to asset coverage. For a discussion of the risks associated with leverage, see “Risk Factors—Risks Relating to our Business and Structure—Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital. As a BDC, the necessity of raising additional capital may expose us to risks, including the typical risks associated with leverage.”

Codes of Ethics

We and the Adviser have each adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to each such code may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with such code’s requirements. You may read and copy our code of ethics at the SEC’s Public Reference Room in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090. In addition, each code of ethics is attached as an exhibit to the registration statement of which this prospectus is a part, and is available on the EDGAR Database on the SEC’s website at www.sec.gov. You may also obtain copies of each code of ethics, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549.

Proxy Voting Policies and Procedures

We have delegated our proxy voting responsibility to the Adviser. The Proxy Voting Policies and Procedures of the Adviser are set out below. The guidelines will be reviewed periodically by the Adviser and our directors who are not “interested persons,” and, accordingly, are subject to change.

Introduction

As an investment adviser registered under the Advisers Act, the Adviser has a fiduciary duty to act solely in our best interests. As part of this duty, the Adviser recognizes that it must vote our securities in a timely manner free of conflicts of interest and in our best interests.

The Adviser’s policies and procedures for voting proxies for its investment advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.

Proxy Policies

The Adviser votes proxies relating to our portfolio securities in what it perceives to be the best interest of our stockholders. The Adviser reviews on a case-by-case basis each proposal submitted to a stockholder vote to determine its effect on the portfolio securities we hold. In most cases, the Adviser will vote in favor of proposals that the Adviser believes are likely to increase the value of the portfolio securities we hold. Although the Adviser will generally vote against proposals that

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may have a negative effect on our portfolio securities, the Adviser may vote for such a proposal if there exist compelling long-term reasons to do so.

The Adviser has established a proxy voting committee and adopted proxy voting guidelines and related procedures. The proxy voting committee establishes proxy voting guidelines and procedures, oversees the internal proxy voting process, and reviews proxy voting issues. To ensure that the Adviser’s vote is not the product of a conflict of interest, the Adviser requires that (1) anyone involved in the decision-making process disclose to our Chief Compliance Officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision-making process or vote administration are prohibited from revealing how the Adviser intends to vote on a proposal in order to reduce any attempted influence from interested parties. Where conflicts of interest may be present, the Adviser will disclose such conflicts to us, including our independent directors and may request guidance from us on how to vote such proxies.

Proxy Voting Records

You may obtain information about how the Adviser voted proxies by making a written request for proxy voting information to: CM Finance Inc, Attention: [Investor Relations], 399 Park Avenue, 39th Floor, New York, New York 10022, or by calling us collect at (212) 257-5199. The SEC also maintains a website at www.sec.gov that contains this information.

Privacy Principles

We are committed to maintaining the privacy of our stockholders and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information we collect, how we protect that information and why, in certain cases, we may share information with select other parties.

Generally, we do not receive any nonpublic personal information relating to our stockholders, although certain nonpublic personal information of our stockholders may become available to us. We do not disclose any nonpublic personal information about our stockholders or former stockholders to anyone, except as permitted by law or as is necessary in order to service stockholder accounts (for example, to a transfer agent or third-party administrator).

We restrict access to nonpublic personal information about our stockholders to employees of the Adviser and its affiliates with a legitimate business need for the information. We intend to maintain physical, electronic and procedural safeguards designed to protect the nonpublic personal information of our stockholders.

Other

We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.

We and the Adviser will each be required to adopt and implement written policies and procedures reasonably designed to prevent violation of relevant federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of their implementation, and designate a chief compliance officer to be responsible for administering the policies and procedures.

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We may be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our board of directors who are not interested persons and, in some cases, prior approval by the SEC. Thus, based on current SEC interpretations, co-investment transactions involving a BDC like us and an entity that is advised by the Adviser or an affiliated adviser generally could not be effected without SEC relief. The staff of the SEC has, however, granted no-action relief permitting purchases of a single class of privately placed securities, provided that the adviser negotiates no term other than price and certain other conditions are met.

Under the Stifel Arrangement and subject to certain restrictions, Stifel will use its commercially reasonable efforts to present to us the opportunity to review and bid on Stifel Nicolaus & Company, Incorporated-originated leveraged finance and high yield corporate debt opportunities, consistent with our investment strategy and subject to the approval of our board of directors as necessary under the 1940 Act and certain other limitations. Stifel may invest in the same portfolio companies that we invest in (regardless of whether our investment arose from a Stifel-originated opportunity) and Stifel may, through such investments, have interests that conflict with ours, including receiving fees from the portfolio company directly as well as through its interest in the Adviser. We believe that we may co-invest with Stifel and its affiliates upon approval of a majority of our directors who are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act.

As a result of the relationship with Cyrus and the Cyrus Funds, we could be presumed to be an affiliate of the Cyrus Funds under the 1940 Act. However, a person’s status as an “affiliate” under the 1940 Act is a rebuttable assumption, which we believe we can successfully rebut. As a result, we believe that we may invest in the same portfolio companies that the Cyrus Funds invest in, without seeking exemptive relief from the SEC.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 imposes a wide variety of regulatory requirements on publicly held companies and their insiders. Many of these requirements affect us. For example:

Ÿ pursuant to Rule 13a-14 under the Exchange Act, our principal executive officer and principal financial officer must certify the accuracy of the financial statements contained in our periodic reports;

Ÿ pursuant to Item 307 under Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;

Ÿ pursuant to Rule 13a-15 under the Exchange Act, our management must prepare an annual report regarding its assessment of our internal control over financial reporting; and

Ÿ pursuant to Item 308 of Regulation S-K and Rule 13a-15 under the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, 12,666,666 shares of our common stock will be outstanding, assuming no exercise of the underwriters’ over-allotment option and an initial public offering price of $15.00 per share. Of these shares, the 6,666,666 shares sold in this offering will be freely tradable without restriction or limitation under the Securities Act. The remaining 6,000,000 shares which consists of 3,818,182 shares held by the Cyrus Funds and 2,181,818 shares held by Stifel will be deemed “restricted securities” as that term is defined under Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under the Securities Act or may be sold pursuant to the safe harbors found in Rule 144 under the Securities Act, which are summarized below.

In general, a person who has beneficially owned “restricted” shares of our common stock for at least six months would be entitled to sell their securities provided that (a) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (b) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who have beneficially owned “restricted” shares of our common stock for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

Ÿ 1% of the total number of securities then outstanding; or

Ÿ the average weekly trading volume of our securities during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC.

Sales by affiliates under Rule 144 also are subject to certain manners of sale provisions, notice requirements and the availability of current public information about us. We can give no assurance as to (a) the likelihood that an active market for our common stock will develop, (b) the liquidity of any such market, (c) the ability of our stockholders to sell our securities or (d) the prices that stockholders may obtain for any of our securities. We can make no prediction as to the effect, if any, that future sales of securities, or the availability of securities for future sales, will have on the market price prevailing from time to time. Sales of substantial amounts of our securities, or the perception that such sales could occur, may affect adversely prevailing market prices of our common stock.

Lock-up Agreements

We, our executive officers and our directors will enter into lock-up agreements with the underwriters. Under these agreements, subject to certain exceptions, we and each of these persons will agree not to, without the prior written approval of the representative, offer, sell, offer to sell, contract or agree to sell, hypothecate, hedge, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock. These restrictions will be in effect for a period of 180 days after the date of this prospectus. At any time, the representatives may, in their sole discretion, release some or all of the securities from these lock-up agreements.

Each of Stifel and the Cyrus Funds, will enter into a lock-up agreement with the underwriters. Under these agreements, subject to certain exceptions, each of Stifel and the Cyrus Funds will agree not to, without the prior written approval of the representative of the underwriter, offer, sell,

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offer to sell, contract or agree to sell, hypothecate, hedge, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock. These restrictions will be in effect for a period of 365 days after the date of this prospectus. At any time, the representatives may, in their sole discretion, release some or all of the securities from these lock-up agreements. See “Risk Factors—Risks Relating to this offering—sales of substantial amounts of our common stock may have an adverse effect on the market price of our common stock.”

Registration Rights

We have granted Stifel and the Cyrus Funds certain registration rights pursuant to which we have agreed to prepare and file with the SEC a registration statement on Form N-2 pursuant to Rule 415 to register the resale of the shares of our common stock we issued to the Cyrus Funds and Stifel in connection with the formation transactions. Specifically, we have agreed to use our commercially reasonable efforts to file with the SEC promptly after a request by either Stifel or the Cyrus Funds to file such a registration statement with the SEC. We agreed to use our commercially reasonable efforts to cause such a registration statement to be declared effective by the SEC within 90 days of the initial filing thereof with the SEC. We have also granted certain piggyback registration rights to Stifel and the Cyrus Funds. Stifel and the Cyrus Funds may only exercise these registration rights after the expiration of the lock-up period described above.

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CUSTODIAN, TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR

Our securities are held by State Street Bank and Trust Company pursuant to a custody agreement. The principal business address of State Street Bank and Trust Company is 225 Franklin Street, Boston, Massachusetts 02110. American Stock Transfer & Trust Company, LLC will serve as our transfer agent, distribution paying agent and registrar. The principal business address of American Stock Transfer & Trust Company, LLC is 6201 15th Avenue, Brooklyn, NY 11219.

BROKERAGE ALLOCATION AND OTHER PRACTICES

Since we will acquire and dispose of many of our investments in privately negotiated transactions, many of the transactions that we engage in will not require the use of brokers or the payment of brokerage commissions. Subject to policies established by our board of directors, the Adviser will be primarily responsible for selecting brokers and dealers to execute transactions with respect to the publicly traded securities portion of our portfolio transactions and the allocation of brokerage commissions. The Adviser does not expect to execute transactions through any particular broker or dealer but will seek to obtain the best net results for us under the circumstances, 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. The Adviser generally will seek reasonably competitive trade execution costs but will not necessarily pay the lowest spread or commission available. Subject to applicable legal requirements and consistent with Section 28(e) of the Exchange Act, the Adviser may select a broker based upon brokerage or research services provided to the Adviser and us and any other clients. In return for such services, we may pay a higher commission than other brokers would charge if the Adviser determines in good faith that such commission is reasonable in relation to the services provided.

144

UNDERWRITING

We are offering the shares of our common stock described in this prospectus through the underwriters named below. Raymond James & Associates, Inc., is the representative of the underwriters and Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. are the book-running managers of this offering. Subject to the terms and conditions contained in an underwriting agreement among us and the underwriters named below, each of the underwriters have severally agreed to purchase the number of shares of common stock listed next to its name in the following table.

Underwriters	Number of Shares
Raymond James & Associates, Inc.
Keefe, Bruyette & Woods, Inc.
Total		6,666,666

The underwriting agreement provides that the underwriters must buy all of the shares if they buy any of them. However, the underwriters are not required to take or pay for the shares covered by the underwriters’ over-allotment option described below.

Our common stock is offered subject to a number of conditions, including:

Ÿ receipt and acceptance of our common stock by the underwriters; and

Ÿ the underwriters’ right to reject orders in whole or in part.

We have been advised by the representative that the underwriters expect to make a market in our common stock but that they are not obligated to do so and may discontinue making a market at any time without notice.

In connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses electronically.

Over-allotment Option

We will grant the underwriters an option to buy up to an aggregate of 1,000,000 additional shares of our common stock at the public offering price less the underwriting discount. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with this offering. The underwriters will have 30 days from the date of our final prospectus to exercise this option. If the underwriters exercise this option, they will each purchase additional shares approximately in proportion to the amounts specified in the table above.

Commissions and Discounts

Shares sold by the underwriters to the public will initially be offered at the initial offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $             per share from the initial public offering price. Any of these securities dealers may resell any shares purchased from the underwriters to other brokers or dealers at a discount of up to $             per share from the initial public offering price. Sales of shares made outside of the U.S. may be made by affiliates of the underwriters. If all the

145

shares are not sold at the initial public offering price, the representative may change the offering price and the other selling terms.

The following table shows the public offering price and underwriting discounts. The Adviser has agreed to pay the underwriters a portion of the sales load in an amount equal to $3.0 million. We are not obligated to repay the portion of the sales load paid by the Adviser. The information assumes either no exercise or full exercise by the underwriters of the over-allotment option.

	Per Share		Without Option		With Option
Public Offering Price	$	15.00	$	100,000,000	$	115,000,000
Sales load (underwriting discount and commission) payable by us	$	0.45	$	3,000,000	$	3,450,000
Sales load (underwriting discount and commission) payable by the Adviser	$	0.45	$	3,000,000	$	3,450,000
Total sales load (underwriting discount and commission)	$	0.90	$	6,000,000	$	6,900,000

In addition, under FINRA Rule 5110, a portion of the Stifel Arrangement is considered underwriting compensation to Keefe, Bruyette & Woods, Inc. such that the 6% aggregate underwriting commissions and discounts payable to the underwriters is increased by an additional     % although there is no out-of-pocket cost to either us or the investors in this offering.

We and the Adviser have agreed to indemnify the underwriters against certain liabilities, including certain liabilities under the Securities Act, or contribute to payments the underwriters may be required to make in respect of those liabilities.

No Sales of Similar Securities

We, our executive officers and directors, will enter into lock-up agreements with the underwriters. Under these agreements, subject to certain exceptions, we and each of these persons will agree not to, without the prior written approval of the representative, offer, sell, offer to sell, contract or agree to sell, hypothecate, hedge, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any of our common stock or any securities convertible into or exercisable or exchangeable for our common stock. These restrictions will be in effect for a period of 180 days after the date of the final prospectus relating to this offering. At any time, the representative may, in its sole discretion, release some or all of the securities from these lock-up agreements.

Each of Stifel and the Cyrus Funds, will enter into a lock-up agreement with the underwriters. Under these agreements, subject to certain exceptions, each of Stifel and the Cyrus Funds will agree not to, without the prior written approval of Raymond James & Associates, Inc., as the representative of the underwriter, offer, sell, offer to sell, contract or agree to sell, hypothecate, hedge, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock. These restrictions will be in effect for a period of 365 days after the date of this prospectus. At any time, the representative may, in its sole discretion, release some or all of the securities from these lock-up agreements.

The Nasdaq Global Market Listing

We have applied to have our common stock listed on The Nasdaq Global Market under the symbol “CMFN.”

146

Price Stabilization; Short Positions

In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price of our common stock, including:

Ÿ stabilizing transactions;

Ÿ short sales;

Ÿ purchases to cover positions created by short sales;

Ÿ imposition of penalty bids; and

Ÿ syndicate covering transactions.

Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our common stock while this offering is in progress. These transactions may also include making short sales of our common stock, which involve the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering and purchasing shares of common stock on the open market to cover positions created by short sales. Short sales may be “covered short sales,” which are short positions in an amount not greater than the underwriters’ over-allotment option referred to above, or may be “naked short sales,” which are short positions in excess of that amount.

The underwriters may close out any covered short position by either exercising their over-allotment option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.

Naked short sales are in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchased in this offering.

The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representative have repurchased shares sold by or for the account of that underwriter in stabilizing or short covering transactions.

As a result of these activities, the price of our common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the underwriters at any time. The underwriters may carry out these transactions on The Nasdaq Global Market, in the over-the-counter market or otherwise.

Determination of Offering Price

Prior to this offering, there was no public market for our common stock. The initial public offering price will be determined by negotiation by us and the representative of the underwriters. The principal factors to be considered in determining the initial public offering price will include:

Ÿ the information set forth in this prospectus and otherwise available to the representative;

Ÿ our history and prospects and the history of and prospects for the industry in which we compete;

147

Ÿ our past and present financial performance and an assessment of the ability of the Adviser;

Ÿ our prospects for future earnings and the present state of our development;

Ÿ the general condition of the securities markets at the time of this offering;

Ÿ the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

Ÿ other factors deemed relevant by the underwriters and us.

Conflict of Interest

Keefe, Bruyette & Woods, Inc., one of the underwriters, is a subsidiary of Stifel Financial Corp. and a sister company to Stifel and its affiliates may act as dealers in connection with this offering. Because Stifel will own a 36.4% interest in us before the completion of this offering and approximately 17.2% after giving effect to this offering and will own an interest in the Adviser, and benefit from our performance, including in this offering, it may be deemed an affiliate under applicable FINRA rules and a “conflict of interest” may exist. Raymond James & Associates, Inc. is an independent underwriter for the offering and will participate in the preparation of the prospectus and perform its usual standard of due diligence with respect to the prospectus. Keefe, Bruyette & Woods, Inc. also expects to make a market in our shares of common stock.

Direct Participation Program and Discretionary Accounts

We are considered a “direct participation program” within the meaning of FINRA Rule 2310, which imposes certain obligations on underwriters participating in this offering, including that any affiliated underwriter participating in this offering may not confirm sales to accounts in which it exercises discretionary authority without the prior written consent of the customer.

Keefe Bruyette & Woods, Inc. has informed us that it anticipates confirming up to     % of the aggregate number of shares offered hereby to discretionary accounts.

Additional Information

The underwriters and their affiliates may from time to time in the future engage in transactions with us and perform services for us in the ordinary course of their business.

The principal business address of Raymond James & Associates, Inc. is 880 Carillon Parkway, St. Petersburg, FL 33716. The principal business address of Keefe, Bruyette & Woods, Inc. is 787 Seventh Avenue, 4th Floor, New York, NY 10019.

148

LEGAL MATTERS

Certain legal matters regarding the securities offered by this prospectus will be passed upon for us by Sutherland Asbill & Brennan LLC, Washington, DC 20001. Sutherland Asbill & Brennan LLC also represents the Adviser and certain of its affiliates. Certain legal matters in connection with the offering will be passed upon for the underwriters by Morrison & Foerster LLP, New York, New York 10104.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements as of June 30, 2013 and 2012, and for the year ended June 30, 2013 and the period from March 7, 2012 (commencement of operations) to June 30, 2012, as set forth in their report. We have included our consolidated financial statements in this prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing. Ernst & Young LLP’s principal business address is 5 Times Square, New York, New York 10036.

149

AVAILABLE INFORMATION

We have filed with the SEC a registration statement on Form N-2, together with all amendments and related exhibits, under the Securities Act, with respect to our shares of common stock offered by this prospectus. The registration statement contains additional information about us and our shares of common stock being offered by this prospectus.

Upon completion of this offering, we will file with or submit to the SEC annual, quarterly and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act. You may inspect and copy these reports, proxy statements and other information, as well as the registration statement and related exhibits and schedules, at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549-0102. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090.

We plan to maintain a website at www.cmfn-inc.com and intend to make all of our annual, quarterly and current reports, proxy statements and other publicly filed information available, free of charge, on or through our website. Information contained on our website is not incorporated into this prospectus, and you should not consider information on our website to be part of this prospectus. You may also obtain such information by contacting us in writing at 399 Park Avenue, 39th Floor, New York, New York 10022, Attention: [Investor Relations]. The SEC maintains a website that contains reports, proxy and information statements and other information we file with the SEC at www.sec.gov. Copies of these reports, proxy and information statements and other information may also be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549-0102.

150

INDEX TO FINANCIAL STATEMENTS OF

CM FINANCE, LLC AND SUBSIDIARY

	Page
Unaudited Consolidated Schedule of Investment as of November 30, 2013		F-2

For the three months ended September 30, 2013 and September 30, 2012

	Page
Unaudited Consolidated Statements of Financial Condition		F-5
Unaudited Consolidated Schedules of Investments		F-6
Unaudited Consolidated Statements of Operations		F-10
Unaudited Consolidated Statements of Changes in Members’ Capital		F-11
Unaudited Consolidated Statements of Cash Flows		F-12
Notes to unaudited Consolidated Financial Statements		F-13

For the year ended

June 30, 2013 and the period from March 7, 2012

(date of inception) to June 30, 2012

	Page
Report of Independent Registered Public Accounting Firm		F-30
Audited Consolidated Statement of Financial Condition		F-31
Audited Consolidated Schedule of Investments		F-32
Audited Consolidated Statement of Operations		F-35
Audited Consolidated Statement of Changes in Members’ Capital		F-36
Audited Consolidated Statement of Cash Flows		F-37
Notes to Audited Consolidated Financial Statements		F-38

F-1

CM FINANCE, LLC AND SUBSIDIARY

Consolidated Schedule of Investments

(Unaudited)

November 30, 2013

Investments (1)	Industry	Principal Amount (2)		Amortized Cost		Fair Value		% of Members’ Capital (3)
Investments:
Non-Controlled/Non-Affiliates
Senior Secured First Lien Term Loans
Active Media Services, Inc. Term Loan, L+9.50%, due 2/1/2018 (4)	Commercial Services	$	5,000,000	$	4,870,563	$	4,925,000		4.57	%
AM General, LLC Term Loan B, L+9.00%, due 3/22/2018 (4)	Automobiles and Components		15,600,000		15,383,307		14,196,000		13.18	%
Crestwood Holdings, LLC Term Loan B-1, L+6.00%, due 6/19/2019 (4)	Pipelines		9,949,766		9,903,890		10,099,012		9.38	%
Endeavour International Corporation Letter of Credit, 13%, due 6/30/2014 (4)	Oil and Gas		17,953,305		17,971,009		17,953,305		16.67	%
Endeavour International Corporation Revolver, 13%, due 6/30/2014 (5)	Oil and Gas		20,000,000		20,473,333		20,400,000		18.95	%
MF Global Holdings, Ltd. Exit Facility, L+6.50%, due 12/4/2014 (4)	Diversified Financial Services		9,134,940		8,986,068		9,134,940		8.48	%
YRCW Receivables, LLC ABL Term Loan B, L+9.75%, due 9/30/2014 (4)	Trucking and Leasing		12,012,836		12,056,523		12,012,836		11.16	%
Total Senior Secured First Lien Term Loans					89,644,693		88,721,093		82.40	%
Senior Secured Second Lien Term Loans
Bennu Oil & Gas, LLC 2nd lien, L+9.00%, due 11/01/2018	Oil and Gas		8,982,857		8,958,687		9,027,771		8.38	%
CT Technologies Intermediate Holdings, Inc. 2nd lien, L+8.00%, due 10/05/2020	Healthcare-Products/ Services		12,000,000		11,824,147		12,000,000		11.14	%
Telecommunications Management LLC 2nd lien, L+8.00%, due 10/30/2020 (4)	Telecommunications		8,831,169		8,754,255		8,919,481		8.28	%
Telular Corporation 2nd Lien, L+8.00%, due 6/24/2020 (4)	Telecommunications		7,500,000		7,395,251		7,387,500		6.86	%
North American Lifting Holdings, Inc. 2nd Lien, L+9.00%, due 11/26/2021	Industrial		15,000,000		13,801,642		13,800,000		12.82	%
TNS Inc., 2nd Lien, L+8.00%, due 8/14/2020 (4)	Telecommunications		7,862,500		7,867,975		7,941,125		7.38	%
Trident USA Health Services, LLC, 2nd Lien, L+9.00%, due 7/29/2020 (6)	Healthcare-Products/ Services		20,000,000		19,943,059		20,000,000		18.57	%
Total Senior Secured Second Lien Term Loans					78,545,016		79,075,877		73.44	%

F-2

CM FINANCE, LLC AND SUBSIDIARY

Consolidated Schedule of Investments (continued)

(Unaudited)

November 30, 2013

Investments (1)	Industry	Principal Amount (2)			Amortized Cost			Fair Value		% of Members’ Capital (3)
Senior Secured Notes
Capitol Petroleum Group, 11.00% cash, 3.00% PIK, due 12/3/2019 (4)	Oil and Gas		10,253,951			10,081,055			10,048,872		9.33	%
Virgin America, Inc. Notes, 17.00% PIK due 6/9/2016	Airlines		5,000,000			4,849,211			5,000,000		4.64	%
Virgin America, Inc. Notes, 8.50% cash, 8.50% PIK, due 6/9/2016	Airlines		5,425,073			5,033,176			5,425,074		5.04	%
Total Senior Secured Notes						19,963,442			20,473,946		19.01	%
Warrants
Endeavour International Corporation $3.01 strike, due 4/30/18	Oil and Gas	$	160,000		$	160,000		$	368,000		0.34	%
Virgin America, Inc.	Airlines
$2.50 strike, due 5/10/43			513,333			184,116			407,262		0.38	%
$3.50 strike, due 5/10/43			385,000			53,441			204,157		0.19	%
Total Warrants						397,557			979,419		0.91	%
Total Term Loans and Warrants						188,550,708			189,250,335		175.76	%
Unfunded Obligations
MF Global Holdings, Ltd. Exit Facility 0.50%, due 12/4/2014 (4)	Diversified Financial		(4,524,784	)		(70,436	)		—		0.00	%
Total Unfunded Obligations						(70,436	)		—		0.00	%
Total Investments					$	188,480,272		$	189,250,335		175.76	%

(1) All investments are in non-controlled and non-affiliated issuers. All investments are in U.S. based issuers.

(2) Principal amount includes capitalized PIK interest and is net of repayments and unfunded commitments.

(3) Percentage is based on members’ capital of $107,673,534 as of November 30, 2013.

(4) Held by the Company indirectly through CM Finance SPV.

(5) $14,500,000 held by the Company indirectly through CM Finance SPV.

(6) $15,000,000 held by the Company indirectly through CM Finance SPV.

F-3

The following table summarizes the classifications within the fair value hierarchy of the Company’s assets and liabilities measured at fair value as of November 30, 2013:

	Fair Value Measurements as of November 30, 2013
Assets	Level 1		Level 2		Level 3		Total
Investments
Senior Secured First Lien Term Loans	$	—	$	—	$	88,721,093	$	88,721,093
Senior Secured Second Lien Term Loans		—		—		79,075,877		79,075,877
Senior Secured Notes		—		—		20,473,946		20,473,946
Total investments		—		—		188,270,916		188,270,916
Derivatives
Warrants		—		—		979,419		979,419
Total Derivatives		—		—		979,419		979,419
Total Assets	$	—	$	—	$	189,250,335	$	189,250,335

F-4

CM FINANCE LLC AND SUBSIDIARY

Consolidated Statements of Financial Condition

	(Unaudited)
	September 30, 2013		June 30, 2013
Assets
Investments at fair value (amortized cost of $132,724,521 and $118,142,962 respectively)	$	132,909,298	$	119,209,284
Cash, restricted		33,879,449		42,601,338
Due from broker		2,964,047		22,975,552
Interest receivable		1,609,601		1,012,042
Deferred debt issuance costs (net of accumulated amortization of $36,973 and $10,924, respectively)		270,007		296,056
Deferred offering costs		74,182		—
Total Assets	$	171,706,584	$	186,094,272
Liabilities and Members’ Capital
Due to broker	$	2,151,074	$	—
Note payable		76,500,000		76,500,000
Distributions payable		—		22,000,000
Interest payable		25,396		149,198
Accrued expenses		235,238		194,437
Total Liabilities		78,911,708		98,843,635
Members’ capital		92,794,876		87,250,637
Total Liabilities and Members’ Capital	$	171,706,584	$	186,094,272

F-5

CM FINANCE LLC AND SUBSIDIARY

Consolidated Schedule of Investments

(Unaudited)

September 30, 2013

Investments (1)	Industry	Principal Amount (2)		Amortized Cost		Fair Value		% of Members’ Capital (3)
Investments:
Non-Controlled/Non-Affiliates
Senior Secured First Lien Term Loans
Active Media Services, Inc. Term Loan, L+9.50%, due 2/1/2018 (5)	Commercial Services	$	5,000,000	$	4,865,386	$	4,862,500		5.24	%
AM General, LLC Term Loan B, L+9.00%, due 3/22/2018 (5)	Automobiles and Components		15,600,000		15,374,910		14,040,000		15.13	%
Crestwood Holdings, LLC Term Loan B-1, L+6.00%, due 6/19/2019 (5)	Pipelines		9,975,000		9,927,605		10,124,625		10.91	%
Endeavour International Corporation Letter of Credit, 13%, due 6/30/2014 (5)	Oil and Gas		17,953,305		17,955,672		17,953,305		19.35	%
MF Global Holdings, Ltd. Exit Facility, L+6.50%, due 12/4/2014 (5)	Diversified Financial Services		8,537,327		8,398,194		8,451,954		9.11	%
YRCW Receivables, LLC ABL Term Loan B, L+9.75%, due 9/30/2014 (5)	Trucking and Leasing		12,043,559		12,095,804		12,224,212		13.17	%
Total Senior Secured First Lien Term Loans					68,617,571		67,656,596		72.91	%
Senior Secured Second Lien Term Loans
Telecommunications Management LLC 2nd lien, L+8.00%, due 10/30/2020 (5)	Telecommunications		8,831,169		8,752,253		8,919,481		9.61	%
Telular Corporation 2nd Lien, L+8.00%, due 6/24/2020 (5)	Telecommunications		7,500,000		7,392,580		7,387,500		7.96	%
TNS Inc., 2nd Lien, L+8.00%, due 8/14/2020 (5)	Telecommunications		7,862,500		7,868,112		7,941,125		8.56	%
Trident USA Health Services, LLC, 2nd Lien, L+9.00%, due 7/29/2020 (6)	Healthcare-Products/Services		20,000,000		19,941,632		20,000,000		21.55	%
Total Senior Secured Second Lien Term Loans					43,954,577		44,248,106		47.68	%
Senior Secured Notes
Capitol Petroleum Group, 11.00% cash, 3.00% PIK, due 12/3/2019 (5)	Oil and Gas		10,253,951		10,076,250		10,048,872		10.83	%
Virgin America, Inc. Notes, 17.00% PIK due 6/9/2016	Airlines		5,000,000		4,839,246		5,000,000		5.39	%
Virgin America, Inc. Notes, 8.50% cash, 8.50% PIK, due 6/9/2016	Airlines		5,425,073		5,007,276		5,425,074		5.85	%
Total Senior Secured Notes					19,922,772		20,473,946		22.07	%

See accompanying notes to consolidated financial statements.

F-6

CM FINANCE LLC AND SUBSIDIARY

Consolidated Schedule of Investments (continued)

(Unaudited)

September 30, 2013

Investments (1)	Industry	Principal Amount (2)			Amortized Cost			Fair Value			% of Members’ Capital (3)
Warrants
Endeavour International Corporation $3.01 strike, due 4/30/18	Oil and Gas	$	160,000		$	160,000		$	368,000			0.40	%
Virgin America, Inc. $2.50 strike, due 5/10/43	Airlines		513,333			184,116			272,066			0.29	%
$3.50 strike, due 5/10/43			385,000			53,441			127,050			0.14	%
Total Warrants						397,557			767,116			0.83	%
Total Term Loans and Warrants						132,892,477			133,145,764			143.49	%
Unfunded Obligations
MF Global Holdings, Ltd. Exit Facility 0.50%, due 12/4/2014 (5)	Diversified Financial		(5,122,397	)		(81,190	)		(51,224	)		-0.06	%
YRC Worldwide, Inc. Letter of Credit 7.50%, due 3/31/2015 (4)	Trucking and Leasing		(12,349,448	)		(86,766	)		(185,242	)		-0.20	%
Total Unfunded Obligations						(167,956	)		(236,466	)		-0.26	%
Total Investments					$	132,724,521		$	132,909,298			143.23	%

(1) All investments are in non-controlled and non-affiliated issuers. All investments are in U.S. based issuers.

(2) Principal amount includes capitalized PIK interest and is net of repayments and unfunded commitments.

(3) Percentage is based on members’ capital of $92,794,876 as of September 30, 2013.

(4) At the option of the issuer, this rate may be either 5.50% + the greater of the prime rate and the fed funds effective rate or L+6.50%.

(5) Held by the Company indirectly through CM Finance SPV.

(6) $15,000,000 held by the Company indirectly through CM Finance SPV.

See accompanying notes to consolidated financial statements.

F-7

CM FINANCE LLC AND SUBSIDIARY

Consolidated Schedule of Investments

June 30, 2013

Investments (1)	Industry	Principal Amount (2)		Amortized Cost		Fair Value		% of Members’ Capital (3)
Investments:
Senior Secured First Lien Term Loans
Alcatel-Lucent USA Term Loan C, L+6.25%, due 1/30/2019	Telecommunications	$	12,680,639	$	12,621,632	$	12,680,639		14.53	%
AM General, LLC Term Loan B, L+9.00%, due 3/22/2018	Automobiles and Components		16,000,000		15,766,198		15,680,000		17.97	%
Crestwood Holdings, LLC Term Loan B-1, L+6.00%, due 6/19/2019	Pipelines		10,000,000		9,950,368		10,050,000		11.52	%
Endeavour International Corporation Letter of Credit, 13%, due 6/30/2014	Oil and Gas		17,953,305		17,972,433		17,953,305		20.59	%
MF Global Holdings, Ltd. Exit Facility, L+6.50%, due 12/4/2014	Diversified Financial Services		6,679,814		6,496,119		6,613,016		7.58	%
YRCW Receivables, LLC ABL Term Loan B, L+9.75%, due 9/30/2014	Trucking and Leasing		12,074,283		12,139,434		12,255,397		14.05	%
Total Senior Secured First Lien Term Loans					74,946,184		75,232,357		86.24	%
Senior Secured Second Lien Term Loans
Telecommunications Management LLC 2nd lien, L+8.00%, due 10/30/2020	Telecommunications		8,000,000		7,922,272		8,100,000		9.28	%
Telular Corporation 2nd Lien, L+8.00%, due 6/24/2020	Telecommunications		7,500,000		7,388,551		7,387,500		8.47	%
TNS Inc., 2nd Lien, L+8.00%, due 8/14/2020	Telecommunications		7,862,500		7,920,381		7,960,781		9.12	%
Total Senior Secured Second Lien Term Loans					23,231,204		23,448,281		26.87	%
Senior Secured Notes
Capitol Petroleum Group, 11.00% cash, 3.00% PIK, due 12/3/2019	Oil and Gas		10,175,935		9,990,986		9,972,417		11.43	%
Virgin America, Inc. Notes, 17.00% PIK due 6/9/2016	Airlines		5,000,000		4,824,216		5,000,000		5.73	%
Virgin America, Inc. Notes, 8.50% cash, 8.50% PIK, due 6/9/2016	Airlines		5,425,073		4,968,213		5,425,074		6.22	%
Total Senior Secured Notes					19,783,415		20,397,491		23.38	%

See accompanying notes to consolidated financial statements.

F-8

CM FINANCE LLC AND SUBSIDIARY

Consolidated Schedule of Investments (continued)

June 30, 2013

Investments (1)	Industry	Principal Amount (2)			Amortized Cost			Fair Value			% of Members’ Capital (3)
Warrants
Endeavour International Corporation $3.01 strike, due 4/30/18	Oil and Gas	$	160,000		$	160,000		$	160,000			0.18	%
Virgin America, Inc.
$2.50 strike, due 5/10/43	Airlines		513,333			184,116			299,955			0.34	%
$3.50 strike, due 5/10/43			385,000			53,441			96,016			0.11	%
Total Warrants						397,557			555,971			0.63	%
Total Term Loans and Warrants						118,358,360			119,634,100			137.12	%
Unfunded Obligations
MF Global Holdings, Ltd. Exit Facility 0.50%, due 12/4/2014	Diversified Financial		(4,007,888	)		(109,645	)		(40,079	)		-0.05	%
YRC Worldwide, Inc. Letter of Credit 7.50%, due 3/31/2015 (4)	Trucking and Leasing		(12,824,547	)		(105,753	)		(384,737	)		-0.44	%
Total Unfunded Obligations						(215,398	)		(424,816	)		-0.49	%
Total Investments					$	118,142,962		$	119,209,284			136.63	%

(1) All investments are in non-controlled and non-affiliated issuers. All investments are in U.S. based issuers.

(2) Principal amount includes capitalized PIK interest and is net of repayments and unfunded commitments.

(3) Percentage is based on members’ capital of $87,250,637 as of June 30, 2013.

(4) At the option of the issuer, this rate may be either 5.50% + the greater of the prime rate and the fed funds effective rate or L+6.50%.

See accompanying notes to consolidated financial statements.

F-9

CM FINANCE LLC AND SUBSIDIARY

Consolidated Statements of Operations

(Unaudited)

	For the three months ended September 30,
	2013			2012
Investment Income
Investment income:
Loan interest income	$	3,276,493		$	983,325
Payment in-kind interest income		408,492			—
Other fee income		115,099			18,609
Total investment income		3,800,084			1,001,934
Expenses:
Interest		501,402			—
Legal fees		91,228			6,611
Professional fees		40,000			100,000
Other expenses		12,617			—
Amortization of deferred debt issuance costs		26,049			—
Total expenses		671,296			106,611
Net investment income		3,128,788			895,323
Net realized and unrealized gain (loss)
Net realized gain (loss) on investments		258,176			(43,798	)
Net change in unrealized (depreciation) appreciation on investments		(881,545	)		56,205
Net realized and unrealized gain (loss)		(623,369	)		12,407
Net increase in members’ capital resulting from operations	$	2,505,419		$	907,730

See accompanying notes to consolidated financial statements.

F-10

CM FINANCE LLC AND SUBSIDIARY

Consolidated Statements of Changes in Members’ Capital

(Unaudited)

	For the three months ended September 30,
	2013			2012
Members’ Capital, at beginning of period	$	87,250,637		$	18,141,667
Capital contributions		3,038,820			9,524,304
Net investment income		3,128,788			895,323
New realized gain (loss) on investments in securities		258,176			(43,798	)
Net change in unrealized (depreciation) appreciation on investments		(881,545	)		56,205
Members’ Capital, at end of period	$	92,794,876		$	28,573,701

See accompanying notes to consolidated financial statements.

F-11

CM FINANCE LLC AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Unaudited)

	For the three months ended September 30,
	2013			2012
Cash Flows from Operating Activities
Net increase in members’ capital resulting from operations	$	2,505,419		$	907,730
Adjustments to reconcile net increase in members’ capital resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments		(29,223,450	)		(16,098,803	)
Sales of investments		14,979,583			10,090,942
Net realized (gain) loss on investments in securities		(258,176	)		43,798
Net change in unrealized depreciation (appreciation) on investments		881,545			(56,205	)
Amorization of discount/premium		(79,516	)		(11,750	)
Net (increase) decrease in operating assets:
Cash, restricted		8,721,889			—
Due from broker		20,011,505			(1,096,562	)
Deferred offering costs		(74,182	)
Interest receivable		(597,559	)		118,072
Deferred debt issuance costs		26,049			—
Net increase (decrease) in operating liabilities:
Due to broker		2,151,074			(3,528,138	)
Interest payable		(123,802	)		—
Accrued expenses		40,801			106,612
Net Cash Provided by (Used in) Operating Activities		18,961,180			(9,524,304	)
Cash Flows from Financing Activities
Capital contributions		3,038,820			9,524,304
Capital distributions		(22,000,000	)		—
Net Cash (Used in) Provided by Financing Activities		(18,961,180	)		9,524,304
Net Change in Cash		—			—
Cash
Beginning of period		—			—
End of period	$	—		$	—
Supplemental cash flow information:
Cash paid for interest	$	625,204		$	—

See accompanying notes to consolidated financial statements.

F-12

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements

September 30, 2013

1. Organization

CM Finance LLC (the “Company”) is a limited liability company organized under the laws of the state of Maryland and commenced operations on March 7, 2012. The Company was formed to invest primarily in the debt of U.S. middle-market companies, maximizing the total return to stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns.

CM Investment Partners, LP (the “Investment Manager”) serves as the investment manager for the Company, and in such capacity, provides investment advisory and certain administrative services for the Company. The Investment Manager is also the Managing Member of the Company and is responsible for the management and control of the Company.

The Company plans to merge with and into CM Finance Inc, an affiliated corporation organized under the laws of the state of Maryland, immediately prior to its initial public offering. CM Finance Inc will be an externally managed, non-diversified closed-end management investment company that intends to file an election to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. CM Finance Inc also intends to elect to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code, for U.S. federal income tax purposes.

Pursuant to a services arrangement, the Investment Manager will use Cyrus Capital Partners, L.P. (“Cyrus”), a Delaware limited partnership, for services including, but not limited to, trading, execution, research, transaction-related analytical support, operations, finance and accounting, legal, technology and investor services and certain other administrative and clerical services.

The Company has been capitalized with capital commitments from funds (the “Cyrus Funds”) managed by Cyrus.

The Company has consolidated its investments in CM Finance SPV, Ltd (“SPV”), a special purpose vehicle that is used to warehouse certain investments, in accordance with its consolidation policy as discussed in Note 2.

2. Significant Accounting Policies

The following is a summary of significant accounting policies followed by the Company.

a. Basis of Accounting

The accompanying financial statements are prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and all values are stated in United States dollars, unless noted otherwise. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period as required by U.S. GAAP. The results for the interim period are not necessarily reflective of results for the full year.

F-13

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

b. Revenue Recognition

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis.

Dividend income is recorded on the ex-dividend date.

Origination, closing and/or commitment fees associated with investments in portfolio companies are accreted into interest income over the respective terms of the applicable loans. Accretion of purchase discounts or premiums is calculated by the effective interest method as of the purchase date and adjusted only for material amendments or prepayments. Upon the prepayment of a loan or debt security, any prepayment penalties and unamortized loan origination, closing and commitment fees are recorded as interest income.

Structuring fees and similar fees are recognized as income as earned, usually when paid. Structuring fees, excess deal deposits, net profits interests and overriding royalty interests are included in other income.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of the investments, without regard to unrealized gains or losses previously recognized. Realized gains or losses on the sale of investments are calculated using the specific identification method. The Company reports changes in fair value of investments as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Management reviews all loans that become 90 days or more past due on principal or interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. Accrued interest is generally reserved when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although the Investment Manager may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection.

Prepayment penalties received by the Company for debt instruments paid back to the Company prior to the maturity date are recorded as income upon receipt.

The Company may hold debt investments in its portfolio that contain a payment-in-kind (“PIK”) interest provision. The PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is recorded on the accrual basis to the extent such amounts are expected to be collected. PIK interest is not accrued if the Company does not expect the issuer to be able to pay all principal and interest when due. For the three months ended September 30, 2013 and September 30, 2012, the Company earned $408,492 and $0 in PIK, respectively.

F-14

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

c. Cash, restricted

The Company deposits its cash in a financial institution and, at times, such balance may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company has restrictions on the uses of the cash held by SPV based on the terms of the Note Payable. For more information on the Note Payable, see Note 6.

d. Investment Transactions and Expenses

Purchases of bank debt, including revolving credit agreements, are recorded on a fully committed basis until the funded and unfunded portions are known or estimable, which in many cases may not be until settlement.

Expenses are accrued as incurred.

Organizational expenses consist principally of legal and accounting fees incurred in connection with the organization of the Company and have been expensed as incurred.

Deferred debt issuance costs, incurred in connection with our notes payable, are amortized using the straight line method over the life of the notes.

Offering costs will be charged to paid-in capital upon sale of shares in the initial public offering of CM Finance, Inc.

e. Investment Valuation

The Company applies fair value accounting to all of its financial instruments in accordance with the 1940 Act and ASC Topic 820 – Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Company has categorized its investments and financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 5. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Securities that are traded on securities exchanges (including such securities traded in the after hours market) are valued on the basis of the closing price on the valuation date (if such prices are available). Securities that are traded on more than one securities exchange are valued at the closing price on the primary securities exchange on which such securities are traded on the valuation date (or if reported on the consolidated tape, then their last sales price on the consolidated tape). Listed options for which the last sales price falls between the last “bid” and “ask” prices for such options, are valued at their last sales price on the date of the valuation on the primary securities exchange on which such options are traded. Options for which the last sales price on the valuation date does

F-15

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

not fall between the last “bid” and “ask” prices are valued at the average of the last “bid” and “ask” prices for such options on that date. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. The Company did not hold any Level 1 investments as of September 30, 2013 or June 30, 2013.

Investments that are not traded on securities exchanges but are traded on the over-the-counter (“OTC”) markets (such as bank debt and warrants) are valued using various techniques, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (when observable) and fundamental data relating to the issuer. These investments are categorized in Level 2 of the fair value hierarchy, or in instances when lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in Level 3.

Investments for which market quotations are not readily available or may be considered unreliable are fair valued by the Investment Manager, in good faith, using a method determined to be appropriate in the given circumstances. The valuation methods used include the Cost Approach, the Market Approach and the Income Approach. Inputs used in these approaches may include, but are not limited to, interest rate yield curves, credit spreads, recovery rates, comparable company transactions, trading multiples, and volatilities. The Investment Manager will typically make changes in the valuation method as changes in the underlying company dictates, such as moving from the Cost Approach to Market Approach when underlying conditions change at the company. Because of the inherent uncertainty of valuation in these circumstances, the estimated fair values for the aforementioned investments may differ significantly from values that would have been used had a ready and liquid market for such investments existed or from the amounts that might ultimately be realized, and such differences could be material. At September 30, 2013 and June 30, 2013, investments fair valued in good faith by the Investment Manager based on management developed models represented approximately 12% and 33% of Members’ Capital, respectively.

The Company’s valuation policies and procedures are developed by the Investment Manager, which is also responsible for ensuring that the valuation policies and procedures are consistently applied across all investments of the Company. The valuation process for Level 3 investments is completed on a monthly basis and is designed to subject the valuation of Level 3 investments to an appropriate level of consistency, oversight and review. The valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Investment Manager responsible for the portfolio investment. The investment professionals prepare the valuations based on their evaluation of financial and operating data, company-specific developments, market valuations of comparable securities from the same company or that of comparable companies as well as any other relevant factors including recent purchases and sales that may have occurred preceding month-end. Valuation models are typically calibrated upon initial funding, and are re-calibrated accordingly upon subsequent material events (including, but not limited to additional financing activity, changes in comparable companies, and recent trades). The preliminary valuation conclusions are then documented and discussed with senior management of the Investment Manager. Independent valuation firms engaged by the Investment Manager conduct independent appraisals and review the Investment Manager’s preliminary valuations and make their own independent assessment. The Investment Manager’s Valuation Committee (consisting of all of the partners of the Investment Manager) then reviews the preliminary valuations of the Investment Manager and that of the independent valuation firm and

F-16

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

responds to the valuation recommendation of the independent valuation firm to reflect any comments. The Valuation Committee discusses the valuations and determines the fair value of each investment in good faith based on the input of the Investment Manager and the respective independent valuation firm. The Investment Manager has also engaged third party valuation service providers to provide independent valuations on a quarterly basis for all of the Level 3 investments reviewed by the Valuation Committee.

For more information on the classification of the Company’s investments by major categories, see Note 5.

The fair value of the Company’s assets and liabilities that qualify as financial instruments under U.S. GAAP approximates the carrying amounts presented in the Statement of Financial Condition.

f. Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the fair value of investments and other amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing the Company’s financial statements are reasonable and prudent. Actual results could differ materially from these estimates.

g. Income Taxes

The Company is not subject to federal, state or local income taxes. Members are individually liable for the taxes on their share of the Company’s income. As a result, no income tax liability or expense has been recorded in the accompanying financial statements.

U.S. GAAP requires the evaluation 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 a more-likely-than-not threshold would be recorded as a tax expense in the current year. The Company’s policy is to recognize accrued interest and penalties associated with uncertain tax positions as part of the tax provision.

The Investment Manager has analyzed such tax positions and has concluded that no unrecognized tax benefits should be recorded for uncertain tax positions for tax years that may be open for the periods ended September 30, 2013 and September 30, 2012. This conclusion may be subject to review and adjustment at a later date based on factors, including but not limited to, ongoing analysis and changes to laws, regulations, and interpretations thereof.

h. Consolidation

The Company consolidates its controlled and wholly owned subsidiaries. Accordingly, the Company consolidated SPV, since the Company owns 100% of the equity of SPV. All material inter-company balances and transactions have been eliminated.

F-17

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

3. Due from and due to Broker

Due from and due to brokers consists of cash in U.S. dollars held as collateral, and the amounts receivable or payable for securities transactions pending settlement at the end of the year.

The Company’s principal trading activities are primarily with brokers and other financial institutions located in North America.

4. Investments

The Company’s investments at any time may include securities and other financial instruments or other assets of any sort, including, without limitation, corporate and government bonds, convertible securities, collateralized loan obligations, bank loans, trade claims, equity securities, privately negotiated securities, direct placements, and investment derivatives (such as credit default swaps, recovery swaps, total return swaps, options, forward contracts, warrants, and futures) (all of the foregoing collectively referred to in these financial statements as “investments”).

a. Certain Risk Factors

In the ordinary course of business, the Company manages a variety of risks including market risk, liquidity risk and credit risk. The Company identifies, measures and monitors risk through various control mechanisms, including trading limits and diversifying exposures and activities across a variety of instruments, markets and counterparties.

Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions, including as a result of changes in the credit quality of a particular issuer, credit spreads, interest rates, and other movements and volatility in security prices or commodities. In particular, the Company invests in issuers that are experiencing or have experienced financial or business difficulties (including difficulties resulting from the initiation or prospect of significant litigation or bankruptcy proceedings), which involves significant risks. The Company manages its exposure to market risk through the use of risk management strategies and various analytical monitoring techniques.

The Company’s assets may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

Credit risk is the potential loss the Company may incur from a failure of an issuer to make payments according to the terms of a contract. The Company is subject to credit risk because of its strategy of investing in the debt of financially distressed issuers. The Company’s exposure to credit risk on its investments is limited to the fair value of the investments.

F-18

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

b. Investments

The composition of the Company’s investments as of September 30, 2013 as a percentage of the total portfolio, at amortized cost and fair value are as follows:

	Investments at Amortized Cost		Percentage			Investments at Fair Value		Percentage
Senior Secured First Lien Term Loans	$	68,449,615		51.57	%	$	67,420,130		50.73	%
Senior Secured Second Lien Term Loans		43,954,577		33.12	%		44,248,106		33.29	%
Senior Secured Notes		19,922,772		15.01	%		20,473,946		15.40	%
Warrants		397,557		0.30	%		767,116		0.58	%
Total	$	132,724,521		100.00	%	$	132,909,298		100.00	%

The composition of the Company’s investments as of June 30, 2013 as a percentage of the total portfolio, at amortized cost and fair value are as follows:

	Investments at Amortized Cost		Percentage			Investments at Fair Value		Percentage
Senior Secured First Lien Term Loans	$	74,730,786		63.25	%	$	74,807,541		62.75	%
Senior Secured Second Lien Term Loans		23,231,204		19.66	%		23,448,281		19.67	%
Senior Secured Notes		19,783,415		16.75	%		20,397,491		17.11	%
Warrants		397,557		0.34	%		555,971		0.47	%
Total	$	118,142,962		100.00	%	$	119,209,284		100.00	%

The following table shows the portfolio composition by industry grouping at fair value at September 30, 2013:

	Investments at Fair Value		Percentage of Total Portfolio
Airlines	$	10,824,190		8.14	%
Automobiles and Components		14,040,000		10.56	%
Commercial Services		4,862,500		3.66	%
Diversified Financial Services		8,400,730		6.32	%
Healthcare-Products/Services		20,000,000		15.05	%
Oil and Gas		28,370,177		21.35	%
Pipelines		10,124,625		7.62	%
Telecommunications		24,248,106		18.24	%
Trucking and Leasing		12,038,970		9.06	%
Total	$	132,909,298		100.00	%

F-19

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

The following table shows the portfolio composition by industry grouping at fair value at June 30, 2013:

	Investments at Fair Value		Percentage of Total Portfolio
Airlines	$	10,821,045		9.08	%
Automobiles and Components		15,680,000		13.15	%
Diversified Financial Services		6,572,937		5.51	%
Oil and Gas		28,085,722		23.56	%
Pipelines		10,050,000		8.43	%
Telecommunications		36,128,920		30.31	%
Trucking and Leasing		11,870,660		9.96	%
Total	$	119,209,284		100.00	%

The following table shows the portfolio composition by geographic grouping at fair value at September 30, 2013:

	Investments at Fair Value		Percentage of Total Portfolio
Midwest	$	42,385,951		31.90	%
West		10,824,190		8.14	%
Southwest		18,321,305		13.78	%
Northeast		10,124,625		7.62	%
Mid-Atlantic		51,253,227		38.56	%
Total	$	132,909,298		100.00	%

The following table shows the portfolio composition by geographic grouping at fair value at June 30, 2013:

	Investments at Fair Value		Percentage of Total Portfolio
Midwest	$	43,038,160		36.11	%
West		10,821,045		9.08	%
Southwest		18,113,305		15.19	%
Northeast		10,050,000		8.43	%
Mid-Atlantic		37,186,774		31.19	%
Total	$	119,209,284		100.00	%

c. Derivatives

Derivative contracts include warrants. The Company enters into derivative contracts as part of its investment strategies.

F-20

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

The Company may enter into warrants through securities exchanges and the OTC market. Upon the purchase of a warrant, the premium paid is recorded as an investment, at fair value. When a purchased warrant expires unexercised, the Company realizes a loss in the amount of the premium paid. When the Company enters into a closing sale transaction, the Company will realize a gain or loss without regard to any unrealized gain or loss on the underlying security. When the Company exercises a warrant, the cost of the security which the Company purchases upon such exercise will be increased by the premium originally paid. Realized and unrealized gains and losses on warrants are included in the net realized gain or loss on derivatives, and net unrealized appreciation (depreciation) on derivatives.

The following table reflects the fair value and notional amount or number of contracts of the Company’s derivative contracts, none of which were designated as hedging instruments under U.S. GAAP, which are presented on a gross basis, at September 30, 2013.

	Assets		Contracts
Equity contracts	$	767,116		1,058,333
Gross fair value of derivative contracts	$	767,116

In the preceding table, the number of contracts as of September 30, 2013 is reflective of the volume of derivatives activity during the period.

The following table reflects the fair value and notional amount or number of contracts of the Company’s derivative contracts, none of which were designated as hedging instruments under U.S. GAAP, which are presented on a gross basis, at June 30, 2013.

	Assets		Contracts
Equity contracts	$	555,971		1,058,333
Gross fair value of derivative contracts	$	555,971

In the preceding table, the number of contracts as of June 30, 2013 is reflective of the volume of derivatives activity during the period.

The following table reflects the amount of gains (losses) on derivatives included in the Statement of Operations for the three months ended September 30, 2013. None of the derivatives were designated as hedging instruments under U.S. GAAP. The Company did not hold any derivative positions during the three months ended September 30, 2012.

	Included in net change in unrealized appreciation (depreciation) on investments
Equity contracts	$	211,145
Total	$	211,145

F-21

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

d. Fair Value Measurements

ASC 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a framework for measuring fair value and a valuation hierarchy that prioritizes the inputs used in the valuation of an asset or liability based upon their transparency. The valuation hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assets and liabilities measured at fair value have been classified in the following three categories:

Level 1 – valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 – valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as (a) quoted prices for similar assets or liabilities in active markets; (b) quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly; (c) inputs other than quoted prices that are observable for the asset or liability; or (d) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – valuation is based on unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an exit price from the perspective of a market participant that holds the asset or owes the liability. Therefore, unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Unobservable inputs are developed based on the best information available in the circumstances, which might include the Company’s own data. The Company’s own data used to develop unobservable inputs is adjusted if information is reasonably available without undue cost and effort that indicates that market participants would use different assumptions.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of the market and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

F-22

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

The following table summarizes the classifications within the fair value hierarchy of the Company’s assets and liabilities measured at fair value as of September 30, 2013:

	Fair Value Measurements as of September 30, 2013
Assets	Level 1		Level 2		Level 3*		Total
Investments
Senior Secured First Lien Term Loans	$	—	$	—	$	67,420,130	$	67,420,130
Senior Secured Second Lien Term Loans		—		—		44,248,106		44,248,106
Senior Secured Notes		—		—		20,473,946		20,473,946
Total investments		—		—		132,142,182		132,142,182
Derivatives
Warrants		—		—		767,116		767,116
Total Derivatives		—		—		767,116		767,116
Total Assets	$	—	$	—	$	132,909,298	$	132,909,298

* Total Level 3 includes fair value of unfunded commitments of $17,471,845 on revolving credit facilities and delayed draw term loan facilities.

The following table summarizes the classifications within the fair value hierarchy of the Company’s assets and liabilities measured at fair value as of June 30, 2013:

	Fair Value Measurements as of June 30, 2013
Assets	Level 1		Level 2		Level 3*		Total
Investments
Senior Secured First Lien Term Loans	$	—	$	—	$	74,807,541	$	74,807,541
Senior Secured Second Lien Term Loans		—		—		23,448,281		23,448,281
Senior Secured Notes		—		—		20,397,491		20,397,491
Total investments		—		—		118,653,313		118,653,313
Derivatives
Warrants		—		—		555,971		555,971
Total Derivatives		—		—		555,971		555,971
Total Assets	$	—	$	—	$	119,209,284	$	119,209,284

* Total Level 3 includes fair value of unfunded commitments of $16,832,435 on revolving credit facilities and delayed draw term loan facilities.

F-23

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended September 30, 2013:

	Senior Secured First Lien Term Loans			Senior Secured Second Lien Term Loans			Senior Secured Notes			Warrants		Total
Balance as of June 30, 2013	$	74,807,541		$	23,448,281		$	20,397,491		$	555,971	$	119,209,284
Purchases		8,380,920			20,764,514			78,016			—		29,223,450
Sales		(14,979,583	)		—			—			—		(14,979,583	)
Amortization		5,551			12,626			61,339			—		79,516
Net realized gains (losses)		311,942			(53,766	)		—			—		258,176
Net change in unrealized (depreciation) appreciation		(1,106,241	)		76,451			(62,900	)		211,145		(881,545	)
Balance as of September 30, 2013	$	67,420,130		$	44,248,106		$	20,473,946		$	767,116	$	132,909,298

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended September 30, 2012:

	Senior Secured First Lien Term Loans			Senior Secured Second Lien Term Loans		Total
Balance as of June 30, 2012	$	21,571,479		$	—	$	21,571,479
Purchases		13,865,688			2,233,115		16,098,803
Sales		(10,090,942	)		—		(10,090,942	)
Amortization		11,750			—		11,750
Net realized losses		(43,798	)		—		(43,798	)
Net change in unrealized appreciation		56,205			—		56,205
Balance as of September 30, 2012	$	25,370,382		$	2,233,115	$	27,603,497

Transfers into Level 3 during or at the end of the reporting period are reported under Level 1 or Level 2 as of the beginning of the period. Transfers out of Level 3 during or at the end of the reporting period are reported under Level 3 as of the beginning of the period. Changes in unrealized gains (losses) relating to Level 3 instruments are included in unrealized appreciation (depreciation) on investments and derivatives on the Consolidated Statement of Operations.

During the three months ended September 30, 2013 and 2012, the Company did not transfer any investments between Levels 1 and 2 and 3.

The following table presents the changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held as of September 30, 2013 and 2012. Both observable and unobservable

F-24

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses within the Level 3 category presented in the table below may include changes in fair value that were attributable to both observable and unobservable inputs.

	Changes in unrealized gains (losses) relating to assets and liabilities still held as of September 30,
	2013			2012
Assets
Investments
Senior Secured First Lien Term Loans	$	(1,035,181	)	$	58,611
Senior Secured Second Lien Term Loans		26,228			—
Senior Secured Notes		(62,898	)		—
Total investments		(1,071,851	)		58,611
Derivatives
Warrants		211,145			—
Total Derivatives		211,145			—
Total Assets	$	(860,706	)	$	58,611

The following tables present the ranges of significant unobservable inputs used to value the Company’s Level 3 investments as of September 30, 2013 and June 30, 2013. These ranges represent the significant unobservable inputs that were used in the valuation of each type of investment. These inputs are not representative of the inputs that could have been used in the valuation of any one investment. For example, the highest PIK discount presented in the table for senior secured notes is appropriate for valuing a specific investment but may not be appropriate for valuing any other investment. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 investments.

	Fair Value as of September 30, 2013		Valuation Methodology	Unobservable Input(s)	Weighted Average	Range
Senior Secured First Lien Term Loans	$	67,420,130	Indicative Market Quotations	Broker quotes	N/A	N/A
Senior Secured Second Lien Term Loans		44,248,106	Indicative Market Quotations	Broker quotes	N/A	N/A
Senior Secured Notes		10,425,074	Market Comparables	Illiquidity discount	3%	3%
				PIK discount	2.2%	1.5% - 3%
				Yield	7.0%	7.0%
		10,048,872	Indicative Market Quotations	Broker quotes	N/A	N/A
Warrants		767,116	Market Comparables	Implied volatility	37%	37%
				LTM EBITDA	5.2x	4.7x - 5.7x

F-25

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

	Fair Value as of June 30, 2013		Valuation Methodology	Unobservable Input(s)	Weighted Average	Range
Senior Secured First Lien Term Loans	$	74,807,541	Indicative Market Quotes	Broker quotes	N/A	N/A
Senior Secured Second Lien Term Loans		23,448,281	Indicative Market Quotes	Broker quotes	N/A	N/A
Senior Secured Notes		10,425,074	Market Comparables	Illiquidity discount	3%	3%
				PIK discount	2.2%	1.5% - 3%
				Yield	7.3%	7.3%
		9,972,417	Indicative Market Quotes	Broker quotes	N/A	N/A
Warrants		395,971	Market Comparables	Implied volatility	37%	37%
		160,000	Other Approach	Recent funding	N/A	N/A

Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value and such changes could result in a significant increase or decrease in the fair value. Significant increases in illiquidity discounts, PIK discounts and market yields would result in significantly lower fair value measurements. Significant increases in implied volatility would result in significantly higher fair value measurements.

6. Note Payable

On May 23, 2013, as amended on June 6, 2013, the Company, through SPV, entered into a $76.5 million financing transaction (the “Financing Facility”) due May 22, 2016 with a major European bank. The Financing Facility is collateralized by substantially all of the Company’s assets. The Company will pay interest on the face amount of the Financing Facility monthly at a rate of one-month LIBOR plus a spread that increases from 1.63% per annum from May 23, 2013 to July 14, 2013 to 1.97% per annum from July 15, 2013 to August 14, 2013 to 2.85% per annum from August 15, 2013 through the end of the term. This financing transaction was executed in two steps. First, the Company organized SPV, a consolidated wholly owned bankruptcy remote special-purpose vehicle in the Cayman Islands to purchase the assets through the issuance and sale of notes secured by such assets (the “Notes”). The bank purchased Notes with a face value of $76.5 million, which represent 51% of the Notes issued and outstanding, for $76.5 million in cash. The Company purchased Notes with a face value of $73.5 million, which represent 49% of the Notes issued and outstanding and received $18.7 million in cash, in exchange for assets with a fair market value of $92.2 million. Under the terms of the indenture under which the Notes were issued (the “Indenture”), the holders of the Notes are entitled to periodic interest payments equal to their pro rata portion of the interest collected on the assets held by SPV. Second, the Company and the bank entered into a total return swap transaction under which the Company will receive from the bank all interest distributions made on the Notes, while the bank receives the financing rate. This also incorporates the material terms relating to mark-to-market and collateral posting requirements (including the posting of the Company’s 49%-portion of the Notes to the bank as security under the total return swap). Under the terms of the Indenture, and subject to certain limitations contained therein, the Company may access additional funding under the Financing Facility through subsequent sales to SPV of debt investments, which will then become part of the portfolio of assets securing the Notes. Cash shall be held by the trustee of the Financing Facility and is restricted to uses defined by the Indenture. Purchases of investments must meet certain eligibility criteria identified by the Indenture. As of September 30, 2013, SPV had assets of $151.5 million, which included $116.9 million of the Company’s portfolio investments at fair

F-26

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

value, $0.7 million of accrued interest receivable and $33.9 million in cash held by the trustee of the Financing Facility. Because of the substance of the transactions, the Company has presented the results of the transactions as a Note Payable on the Consolidated Statement of Financial Condition, and the financing on the TRS is recorded as Interest Expense on the Consolidated Statement of Operations. The Company’s decision to record these entries in this manner is due to the inherent economic substance of the transactions in accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Concepts No. 8. At September 30 and June 30, 2013, the carrying amount of the Notes approximates the fair value. For the three months ended September 30, 2013, the weighted average outstanding debt balance and the weighted average stated interest rate was $76.5 million and 2.54%, respectively. Under the terms of the TRS, for the three months ended September 30, 2013, SPV accrued $501,402 in interest expense, which represents the bank’s contractual interest on the $76.5 million in financing.

7. Indemnification, Guarantees, Commitments and Contingencies

In the normal course of business, the Company enters into contracts which provide a variety of representations and warranties, and that provide general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

Loans purchased by the Company may include revolving credit agreements or other financing commitments obligating the Company to advance additional amounts on demand. As of September 30 and June 30, 2013, the Company held unfunded commitments in the amount of approximately $17.6 million and $16.8 million, respectively.

The following table details the unfunded commitments as of September 30, 2013:

Investments	Principal			Amortized Cost			Fair Value
MF Global Holdings, Ltd. Exit Facility, 0.50%, due 12/4/2014	$	(5,122,397	)	$	(81,190	)	$	(51,224	)
YRC Worldwide, Inc. Letter of Credit, 7.5%, due 3/31/2015	$	(12,349,448	)		(86,766	)		(185,242	)
Total Unfunded Commitments				$	(167,956	)	$	(236,466	)

The following table details the unfunded commitments as of June 30, 2013:

Investments	Principal			Amortized Cost			Fair Value
MF Global Holdings, Ltd. Exit Facility, 0.50%, due 12/4/2014	$	(4,007,888	)	$	(109,645	)	$	(40,079	)
YRC Worldwide, Inc. Letter of Credit, 7.5%, due 3/31/2015	$	(12,824,547	)		(105,753	)		(384,737	)
Total Unfunded Commitments				$	(215,398	)	$	(424,816	)

F-27

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

8. Related Party Transactions

The Managing Member is responsible for the Company’s Members’ Capital calculation, investment policy, valuation policy, performance of the Company and supervision of the conduct of its affairs.

The Company pays (or reimburses the Investment Manager or Cyrus) for investment expenses, legal expenses, systems and technology, auditing and tax preparation expenses, organizational expenses, expenses relating to the offering and sale of the limited company interests in the Company and extraordinary expenses. Expenses incurred by the Company that are of benefit to one or more other investment vehicles managed by the Investment Manager or its affiliates are allocated among such other investment vehicles on a pro rata basis generally in accordance with the relative amount of investment capital of such other investment vehicles. The Company has not utilized soft dollar arrangements to pay for any third party expenses.

The Company does not currently pay a management or incentive fee, and no management or incentive fees have been paid since the inception of the Company. As mentioned in Note 1, the Company plans to merge with and into CM Finance Inc, an entity that will pay management and incentive fees. If the Company had paid incentive fees similar to CM Finance Inc, the Company would have paid $469,521 and $154,815 for the three months ended September 30, 2013 and 2012, respectively. If the Company had paid management fees similar to CM Finance Inc, the Company would have paid $561,818 and $109,500 for the three months ended September 30, 2013 and 2012, respectively.

9. Financial Highlights

The following represents the expense ratios to average members’ capital:

	For the three months ended September 30,
	2013			2012
Total return		2.82	%		3.61	%
Ratio of net investment income to average members’ capital		3.44	%		3.40	%
Ratio of total expenses to average members’ capital		(0.74	%)		(0.40	%)
Portfolio turnover rate		11.89	%		35.32	%

Total return is calculated based on a time-weighted rate of return methodology for the members, and is not annualized. Total return is reflected after all investment-related and operating expenses. An individual member’s return may vary from these returns based on the timing of capital transactions. The ratios to average members’ capital are calculated based on the monthly average members’ capital during the period.

F-28

CM FINANCE LLC AND SUBSIDIARY

Notes to Unaudited Consolidated Financial Statements (continued)

The following represents supplemental ratios and data:

	For the three months ended September 30,
	2013			2012
Ratio of operating expenses to average members’ capital		(0.71	%)		(0.40	%)
Ratio of credit facility related expenses to average members’ capital		(0.58	%)		0.00	%
	(in thousands)
Members’ capital at end of period	$	92,795		$	87,251
Average members’ capital	$	90,992		$	26,331

The ratios to average members’ capital are calculated based on the monthly average members’ capital during the period. Credit facility related expenses include interest expense and amortization of deferred debt issuance costs.

10. Subsequent Events

As required by U.S. GAAP, the Company evaluated subsequent events through the date of issuance. As discussed in Note 1, the Company plans to merge with and into CM Finance Inc immediately prior to its initial public offering.

F-29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Investment Manager of

CM Finance, LLC

We have audited the accompanying consolidated statements of financial condition of CM Finance, LLC and subsidiary (the “Company”), including the consolidated schedules of investments, as of June 30, 2013 and 2012, and the related consolidated statements of operations, changes in members’ capital, and cash flows for the year ended June 30, 2013 and for the period from March 7, 2012 (commencement of operations) to June 30, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of CM Finance, LLC and subsidiary at June 30, 2013 and 2012, and the consolidated results of their operations, changes in their members’ capital and their cash flows for the year ended June 30, 2013 and for the period from March 7, 2012 (commencement of operations) to June 30, 2012, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

New York, New York

September 4, 2013

F-30

CM FINANCE, LLC AND SUBSIDIARY

Consolidated statements of financial condition

	As of June 30,
	2013		2012
Assets
Investments at fair value (amortized cost of $118,142,962 and $21,577,936 respectively)	$	119,209,284	$	21,571,479
Cash and cash equivalents, restricted		42,601,338		—
Due from broker		22,975,552		—
Interest receivable		1,012,042		296,143
Deferred debt issuance costs (net of accumulated amortization of $10,924 and $0, respectively)		296,056		—
Total Assets	$	186,094,272	$	21,867,622
Liabilities and Members’ Capital
Due to broker	$	—	$	3,528,138
Note payable (Financing Facility)		76,500,000		—
Distributions payable (Return of Members Capital)		22,000,000		—
Interest payable (Interest due on Finance Facility)		149,198		—
Accrued expenses		194,437		197,817
Total Liabilities		98,843,635		3,725,955
Members’ capital		87,250,637		18,141,667
Total Liabilities and Members’ Capital	$	186,094,272	$	21,867,622

See accompanying notes to consolidated financial statements.

F-31

CM FINANCE, LLC AND SUBSIDIARY

Consolidated schedule of investments

June 30, 2013

Investments (1)	Industry	Principal Amount (2)		Amortized Cost		Fair Value		% of Members’ Capital (3)
Investments:
Senior Secured First Lien Term Loans
Alcatel-Lucent USA Term Loan C, L+6.25%, due 1/30/2019	Telecommunications	$	12,680,639	$	12,621,632	$	12,680,639		14.53	%
AM General, LLC Term Loan B, L+9.00%, due 3/22/2018	Automobiles and Components		16,000,000		15,766,198		15,680,000		17.97	%
Crestwood Holdings, LLC Term Loan B-1, L+6.00%, due 6/19/2019	Pipelines		10,000,000		9,950,368		10,050,000		11.52	%
Endeavour International Corporation Letter of Credit, 13%, due 6/30/2014	Oil and Gas		17,953,305		17,972,433		17,953,305		20.59	%
MF Global Holdings, Ltd. Exit Facility, L+6.50%, due 12/4/2014	Diversified Financial Services		6,679,814		6,496,119		6,613,016		7.58	%
YRCW Receivables, LLC ABL Term Loan B, L+9.75%, due 9/30/2014	Trucking and Leasing		12,074,283		12,139,434		12,255,397		14.05	%
Total Senior Secured First Lien Term Loans					74,946,184		75,232,357		86.24	%
Senior Secured Second Lien Term Loans
Telecommunications Management LLC 2nd lien, L+8.00%, due 10/30/2020	Telecommunications		8,000,000		7,922,272		8,100,000		9.28	%
Telular Corporation 2nd Lien, L+8.00%, due 6/24/2020	Telecommunications		7,500,000		7,388,551		7,387,500		8.47	%
TNS Inc., 2nd Lien, L+8.00%, due 8/14/2020	Telecommunications		7,862,500		7,920,381		7,960,781		9.12	%
Total Senior Secured Second Lien Term Loans					23,231,204		23,448,281		26.87	%
Senior Secured Notes
Capitol Petroleum Group, 11.00% cash, 3.00% PIK, due 12/3/2019	Oil and Gas		10,175,935		9,990,986		9,972,417		11.43	%
Virgin America, Inc. Notes, 17.00% PIK due 6/9/2016	Airlines		5,000,000		4,824,216		5,000,000		5.73	%
Virgin America, Inc. Notes, 8.50% cash, 8.50% PIK, due 6/9/2016	Airlines		5,425,073		4,968,213		5,425,074		6.22	%
Total Senior Secured Notes					19,783,415		20,397,491		23.38	%

See accompanying notes to consolidated financial statements.

F-32

CM FINANCE, LLC AND SUBSIDIARY

Consolidated schedule of investments (continued)

June 30, 2013

Investments (1)	Industry	Principal Amount (2)			Amortized Cost			Fair Value			% of Members’ Capital (3)
Warrants
Endeavour International Corporation $3.01 strike, due 4/30/18	Oil and Gas	$	160,000		$	160,000		$	160,000			0.18	%
Virgin America, Inc. $2.50 strike, due 5/10/43	Airlines		513,333			184,116			299,955			0.34	%
$3.50 strike, due 5/10/43			385,000			53,441			96,016			0.11	%
Total Warrants						397,557			555,971			0.63	%
Total Term Loans and Warrants						118,358,360			119,634,100			137.12	%
Unfunded Obligations
MF Global Holdings, Ltd. Exit Facility 5.00%, due 12/4/2014 (4)	Diversified Financial		(4,007,888	)		(109,645	)		(40,079	)		(0.05	)%
YRC Worldwide, Inc. Letter of Credit 7.50%, due 3/31/2015	Trucking and Leasing		(12,824,547	)		(105,753	)		(384,737	)		(0.44	)%
Total Unfunded Obligations						(215,398	)		(424,816	)		(0.49	)%
Total Investments					$	118,142,962		$	119,209,284			136.63	%

(1) All investments are in Non-controlled and Non-affiliated issuers. All investments are in US based issuers.

(2) Principal amount includes capitalized PIK interest and is net of repayments and unfunded commitments.

(3) Percentage is based on members’ capital of $87,250,637 as of June 30, 2013.

(4) At the option of the issuer, this rate may be either 5.00% + the greater of the prime rate and the fed funds effective rate or L+6.50%.

See accompanying notes to consolidated financial statements.

F-33

CM FINANCE, LLC AND SUBSIDIARY

Consolidated schedule of investments

June 30, 2012

Investments (1)	Industry	Principal Amount (2)		Amortized Cost		Fair Value		% of Members’ Capital (3)
Investments:
Senior Secured First Lien Term Loans
Crestwood Holdings, LLC Term Loan B, L+8.25%, due 3/26/2018	Pipelines	$	5,000,000	$	4,928,480	$	5,025,000		27.70	%
Endeavour International Corporation Letter of Credit, 13%, due 10/12/2013	Oil and Gas	$	10,000,000		10,000,000		10,000,000		55.13	%
YRCW Receivables, LLC ABL Term Loan B, L+9.75%, due 9/30/2014	Trucking and Leasing	$	6,714,337		6,649,456		6,546,479		36.09	%
Total Senior Secured First Lien Term Loans				$	21,577,936	$	21,571,479		118.92	%
Total investments				$	21,577,936	$	21,571,479		118.92	%

(1) All investments are in Non-controlled and Non-affiliated issuers and in US based issuers.

(2) Principal amount includes capitalized PIK interest and is net of repayments.

(3) Percentage is based on members’ capital of $18,141,667 as of June 30, 2012.

See accompanying notes to consolidated financial statements.

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CM FINANCE, LLC AND SUBSIDIARY

Consolidated statements of operations

	Year ended June 30, 2013		Period from March 7, 2012 to June 30, 2012
Investment income
Investment Income:
Loan interest income	$	5,890,673	$	486,894
Payment in-kind interest income		641,008		—
Other fee income		241,135		14,962
Total investment income		6,772,816		501,856
Expenses:
Interest		149,198		—
Legal fees		180,809		—
Professional fees		250,000		—
Other expenses		39,755		38
Organization costs		—		197,779
Amortization of deferred debt issuance costs		10,924		—
Total expenses		630,686		197,817
Net Investment Income		6,142,130		304,039
Net Realized and Unrealized Gain (Loss)
Net realized gain on investments		781,262		110
Net change in unrealized appreciation (depreciation) on investments		1,072,779		(6,457	)
Net Realized and Unrealized Gain (Loss)		1,854,041		(6,347	)
Net income	$	7,996,171	$	297,692

See accompanying notes to consolidated financial statements.

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CM FINANCE, LLC AND SUBSIDIARY

Consolidated statements of changes in members’ capital

	Members’ Capital
Members’ Capital, at March 7, 2012	$	—
Capital contributions		17,843,975
Net investment income		304,039
New realized gain on investments		110
Net change in unrealized (depreciation) on investments		(6,457	)
Members’ Capital, at June 30, 2012	$	18,141,667
Capital contributions		84,453,413
Capital distributions		(23,340,614	)
Net investment income		6,142,130
New realized gain on investments in securities		781,262
Net change in unrealized appreciation on investments		1,072,779
Members’ Capital, at June 30, 2013	$	87,250,637

See accompanying notes to consolidated financial statements.

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CM FINANCE, LLC AND SUBSIDIARY

Consolidated statements of cash flows

	Year ended June 30, 2013			Period from March 7, 2012 to June 30, 2012
Cash Flows from Operating Activities
Net income	$	7,996,171		$	297,692
Adjustments to reconcile net income to net cash used in operating activities:
Purchases of investments		(133,955,675	)		(25,573,961	)
Sales of investments		38,236,069			4,007,538
Net realized gain on investments in securities		(781,262	)		(110	)
Net change in unrealized (appreciation) depreciation on investments		(1,072,779	)		6,457
Amorization of discount/premium		(64,158	)		(11,403	)
Net (increase) decrease in operating assets:
Cash and cash equivalents, restricted		(42,601,338	)		—
Due from broker		(22,975,552	)		—
Interest receivable		(715,899	)		(296,143	)
Deferred debt issuance costs		(296,056	)		—
Net increase (decrease) in operating liabilities:
Due to broker		(3,528,138	)		3,528,138
Interest payable		149,198			—
Accrued expenses		(3,380	)		197,817
Net Cash Used in Operating Activities		(159,612,799	)		(17,843,975	)
Cash Flows from Financing Activities
Capital contributions		84,453,413			17,843,975
Capital distributions		(1,340,614	)		—
Proceeds from borrowing on Notes payable		76,500,000			—
Net Cash Provided by Financing Activities		159,612,799			17,843,975
Net Change in Cash and Cash equivalents		—			—
Cash and cash equivalents
Beginning of year/period		—			—
End of year/period	$	—		$	—

See accompanying notes to consolidated financial statements.

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CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements

June 30, 2013

1. Organization

CM Finance, LLC (the “Company”) is a limited liability company organized under the laws of the state of Maryland and commenced operations on March 7, 2012. The Company was formed to invest primarily in the debt of U.S. middle-market companies, maximizing the total return to stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns.

CM Investment Partners, L.P. (the “Investment Manager”) serves as the investment manager for the Company, and in such capacity, provides investment advisory and certain administrative services for the Company. The Investment Manager is also the Managing Member of the Company and is responsible for the management and control of the Company.

The Company plans to merge with and into CM Finance Inc, an affiliated corporation organized under the laws of the state of Maryland, immediately prior to its initial public offering. CM Finance Inc will be an externally managed, non-diversified closed-end management investment company that intends to file an election to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act. CM Finance Inc. also intends to elect to be treated as a regulated investment company, or RIC, under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code, for U.S. federal income tax purposes.

Pursuant to a services arrangement, the Investment Manager will use Cyrus Capital Partners, L.P. (“Cyrus”), a Delaware limited Partnership, for services related, but not limited to, trading, execution, research, transaction related analytical support, operations, finance and accounting, legal and compliance, technology and client services.

The Company has been capitalized with a capital commitment from funds (the “Cyrus Funds”) managed by Cyrus.

The Company has consolidated its investments in CM Finance SPV, Ltd (“SPV”), a special purpose vehicle that is used to warehouse certain investments, in accordance with its consolidation policy as discussed in Note 2.

2. Significant accounting policies

The following is a summary of significant accounting policies followed by the Company.

a. Basis of accounting

The accompanying financial statements are prepared in conformity with U.S. generally accepted accounting principles (“US GAAP”) and all values are stated in United States dollars, unless noted otherwise.

b. Revenue recognition

Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis.

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CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

Dividend income is recorded on the ex-dividend date.

Origination, closing and/or commitment fees associated with investments in portfolio companies are accreted into interest income over the respective terms of the applicable loans. Accretion of purchase discounts or premiums is calculated by the effective interest method as of the purchase date and adjusted only for material amendments or prepayments. Upon the prepayment of a loan or debt security, any prepayment penalties and unamortized loan origination, closing and commitment fees are recorded as interest income.

Structuring fees and similar fees are recognized as income as earned, usually when paid. Structuring fees, excess deal deposits, net profits interests and overriding royalty interests are included in other income.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. Realized gains or losses on the sale of investments are calculated using the specific identification method. The Company reports changes in fair value of investments as a component of the net change in unrealized appreciation (depreciation) on investments in the consolidated statements of operations.

Management reviews all loans that become 90 days or more past due on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on non-accrual status. Accrued interest is generally reserved when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although the Investment Manager may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection.

Prepayment penalties received by the Company for debt instruments paid back to the Company prior to the maturity date are recorded as income upon receipt.

The Company may hold debt investments in its portfolio that contain a payment-in-kind (“PIK”) interest provision. The PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is recorded on the accrual basis to the extent such amounts are expected to be collected. PIK interest is not accrued if the Company does not expect the issuer to be able to pay all principal and interest when due. For the year ended June 30, 2013 and for the period from March 7, 2012 to June 30, 2012, the Company earned $641,008 and $0 in PIK, respectively.

c. Cash and cash equivalent, restricted

The Company considers cash equivalents to be highly liquid investments with original maturities of three months or less. Cash and cash equivalents include deposits in a money market account. The Company deposits its cash in a financial institution and, at times, such balance may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company has

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Notes to consolidated financial statements (continued)

restrictions on the uses of the cash held by SPV based on the terms of the Note Payable. For more information on the Note Payable, see Note 6.

d. Investment transactions and expenses

Purchases of bank debt, including revolving credit agreements, are recorded on a fully committed basis until the funded and unfunded portions are known or estimable, which in many cases may not be until settlement.

Expenses are accrued as incurred.

Organizational expenses consist principally of legal and accounting fees incurred in connection with the organization of the Company and have been expensed as incurred.

Deferred debt issuance costs, incurred in connection with our notes payable, are deferred and amortized using the straight line method over the life of the notes.

e. Investment valuation

The Company applies fair value accounting to all of its financial instruments in accordance with the 1940 Act and ASC Topic 820—Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Company has categorized its investments and financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 5. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Securities that are traded on securities exchanges (including such securities traded in the after hours market) are valued on the basis of the closing price on the valuation date (if such prices are available). Securities which are traded on more than one securities exchange are valued at the closing price on the primary securities exchange on which such securities are traded on the valuation date (or if reported on the consolidated tape then their last sales price on the consolidated tape). Listed options for which the last sales price falls between the last “bid” and “ask” prices for such options, are valued at their last sales price on the date of the valuation on the primary securities exchange on which such options are traded. Options for which the last sales price on the valuation date does not fall between the last “bid” and “ask” prices are valued at the average of the last “bid” and “ask” prices for such options on that date. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. The Company did not hold any Level 1 investments as of June 30, 2013 or June 30, 2012.

For investments that are not traded on securities exchanges but are traded on the over-the-counter (“OTC”) markets (such as bank debt) are valued using various techniques, which may consider recently executed transactions in securities of the issuer or comparable issuers, market

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CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

price quotations (when observable) and fundamental data relating to the issuer. Although most of these investments are categorized in Level 2 of the fair value hierarchy, in instances when lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in Level 3.

Investments for which market quotations are not readily available or may be considered unreliable are fair valued by the Investment Manager, in good faith, using a method determined to be appropriate in the given circumstances. The valuation methods used include the Cost Approach, the Market Approach and the Income Approach. Inputs used in these approaches may include, but are not limited to, interest rate yield curves, credit spreads, recovery rates, comparable company transactions, trading multiples, and volatilities. The Investment Manager will typically make changes in the valuation method as changes in the underlying company dictates, such as moving from the Cost Approach to Market Approach when underlying conditions change at the company. Because of the inherent uncertainty of valuation in these circumstances, the estimated fair values for the aforementioned investments may differ significantly from values that would have been used had a ready and liquid market for such investments existed or from the amounts that might ultimately be realized, and such differences could be material. At June 30, 2013 and June 30, 2012, investments fair valued in good faith by the Investment Manager based on a management developed models represented approximately 33% and 55% of Members’ Capital respectively.

The Company’s valuation policies and procedures are developed by the Investment Manager, which is also responsible for ensuring that the valuation policies and procedures are consistently applied across all investments of the Company. The valuation process for Level 3 investments is completed on a monthly basis and is designed to subject the valuation of Level 3 investments to an appropriate level of consistency, oversight and review. The valuation process begins with each portfolio company or investment being initially valued by the investment professionals of the Investment Manager responsible for the portfolio investment. The investment professionals prepare the valuations based on their evaluation of financial and operating data, company specific developments, market valuations of comparable securities from the same company or that of comparable companies as well as any other relevant factors including recent purchases and sales that may have occurred preceding month-end. Valuation models are typically calibrated upon initial funding, and are re-calibrated accordingly upon subsequent material events (including, but not limited to additional financing activity, changes in comparable companies, and recent trades). The preliminary valuation conclusions are then documented and discussed with senior management of the Investment Manager. Independent valuation firms engaged by the Investment Manager conduct independent appraisals and review the Investment Manager’s preliminary valuations and make their own independent assessment. The Investment Manager’s Valuation Committee (consisting of all of the partners of the Investment Manager) then reviews the preliminary valuations of the Investment Manager and that of the independent valuation firm and responds to the valuation recommendation of the independent valuation firm to reflect any comments. The Valuation Committee discusses the valuations and determines the fair value of each investment in good faith based on the input of the Investment Manager and the respective independent valuation firm. The Investment Manager has also engaged third party valuation service providers to provide independent valuations on a quarterly basis for all of the Level 3 investments reviewed by the Valuation Committee.

For more information on the classification of the Company’s investments by major categories, see Note 5.

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CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

The fair value of the Company’s assets and liabilities which qualify as financial instruments under US GAAP approximates the carrying amounts presented in the Statement of Financial Condition.

f. Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments and other amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing the Company’s financial statements are reasonable and prudent. Actual results could differ materially from these estimates.

g. Income taxes

The Company is not subject to federal, state or local income taxes. Members are individually liable for the taxes on their share of the Company’s income. As a result, no income tax liability or expense has been recorded in the accompanying financial statements.

US GAAP requires the evaluation 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 a more-likely-than-not threshold would be recorded as a tax expense in the current year. The Company’s policy is to recognize accrued interest and penalties associated with uncertain tax positions as part of the tax provision.

The Investment Manager has analyzed such tax positions and has concluded that no unrecognized tax benefits should be recorded for uncertain tax positions for tax years that may be open for the periods ended June 30, 2012 and 2013. This conclusion may be subject to review and adjustment at a later date based on factors, including but not limited to, ongoing analysis and changes to laws, regulations, and interpretations thereof.

h. Consolidation

The Company consolidates its controlled and wholly owned subsidiaries. Accordingly, the Company consolidated SPV, since the Company owns 100% of the equity of SPV. All material inter-company balances and transactions have been eliminated.

3. New accounting pronouncements

During 2012, the Company adopted Accounting Standards Update 2011-04 ‘Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRS’ (ASU 2011-04). ASU 2011-04 requires additional disclosure such as quantitative information about the significant unobservable inputs used for all Level 3 measurements. While the update had an impact on the Company’s financial statement disclosures, it did not have an impact on the Company’s financial condition, results of operations, members’ capital or cash flows.

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CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

4. Due from and due to broker

Due from and due to brokers consists of cash in U.S. dollars and the amounts receivable or payable for securities transactions pending settlement at the end of the year.

The Company’s principal trading activities are primarily with brokers and other financial institutions located in North America.

5. Investments

The Company’s investments at any time may include securities and other financial instruments or other assets of any sort, including, without limitation, corporate and government bonds, convertible securities, collateralized loan obligations, bank loans, trade claims, equity securities, privately negotiated securities, direct placements, and investment derivatives (such as credit default swaps, recovery swaps, total return swaps, options, forward contracts, warrants, and futures) (all of the foregoing collectively referred to in these financial statements as “investments”).

a. Certain risk factors

In the ordinary course of business, the Company manages a variety of risks including market risk, liquidity risk and credit risk. The Company identifies, measures and monitors risk through various control mechanisms, including trading limits and diversifying exposures and activities across a variety of instruments, markets and counterparties.

Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions, including as a result of changes in the credit quality of a particular issuer, credit spreads, interest rates, and other movements and volatility in security prices or commodities. In particular, the Company invests in issuers that are experiencing or have experienced financial or business difficulties (including difficulties resulting from the initiation or prospect of significant litigation or bankruptcy proceedings), which involves significant risks. The Company manages its exposure to market risk through the use of risk management strategies and various analytical monitoring techniques.

The Company’s assets may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

Credit risk is the potential loss the Company may incur from a failure of an issuer to make payments according to the terms of a contract. The Company is subject to credit risk because of its strategy of investing in the debt of financially distressed issuers. The Company’s exposure to credit risk on its investments is limited to the fair value of the investments.

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Notes to consolidated financial statements (continued)

b. Investments

The composition of the Company’s investments as of June 30, 2013 as a percentage of the total portfolio, at amortized cost and fair value are as follows:

	Investments at Amortized Cost		Percentage			Investments at Fair Value		Percentage
Senior Secured First Lien Term Loans	$	74,730,786		63.25	%	$	74,807,541		62.75	%
Senior Secured Second Lien Term Loans		23,231,204		19.66	%		23,448,281		19.67	%
Senior Secured Notes		19,783,415		16.75	%		20,397,491		17.11	%
Warrants		397,557		0.34	%		555,971		0.47	%
Total	$	118,142,962		100.00	%	$	119,209,284		100.00	%

The composition of the Company’s investments as of June 30, 2012 as a percentage of the total portfolio, at amortized cost and fair value are as follows:

	Investments at Amortized Cost		Percentage			Investments at Fair Value		Percentage
Senior Secured First Lien Term Loans	$	21,577,936		100.00	%	$	21,571,479		100.00	%
Total	$	21,577,936		100.00	%	$	21,571,479		100.00	%

The following table shows the portfolio composition by industry grouping at fair value at June 30, 2013:

	Investments at Fair Value		Percentage of Total Portfolio
Airlines	$	10,821,045		9.08	%
Automobiles and Components		15,680,000		13.15	%
Diversified Financial Services		6,572,937		5.51	%
Oil and Gas		28,085,722		23.56	%
Pipelines		10,050,000		8.43	%
Telecommunications		36,128,920		30.31	%
Trucking and Leasing		11,870,660		9.96	%
Total	$	119,209,284		100.00	%

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CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

The following table shows the portfolio composition by industry grouping at fair value at June 30, 2012:

	Investments at Fair Value		Percentage of Total Portfolio
Oil and Gas	$	10,000,000		46.36	%
Pipelines		5,025,000		23.29	%
Trucking and Leasing		6,546,479		30.35	%
Total	$	21,571,479		100.00	%

The following table shows the portfolio composition by geographic grouping at fair value at June 30, 2013:

	Investments at Fair Value		Percentage of Total Portfolio
Midwest	$	43,038,160		36.11	%
West		10,821,045		9.08	%
Southwest		18,113,305		15.19	%
Northeast		10,050,000		8.43	%
Mid-Atlantic		37,186,774		31.19	%
Total	$	119,209,284		100.00	%

The following table shows the portfolio composition by geographic grouping at fair value at June 30, 2012:

	Investments at Fair Value		Percentage of Total Portfolio
Midwest	$	6,546,479		30.35	%
Southwest		10,000,000		46.36	%
Northeast		5,025,000		23.29	%
Total	$	21,571,479		100.00	%

c. Derivatives

Derivative contracts include warrants. The Company enters into derivative contracts as part of its investment strategies.

The Company may enter into warrants through securities exchanges and the OTC market. Upon the purchase of a warrant, the premium paid is recorded as an investment, at fair value. When a purchased warrant expires unexercised, the Company realizes a loss in the amount of the premium paid. When the Company enters into a closing sale transaction, the Company will realize a gain or loss without regard to any unrealized gain or loss on the underlying security.

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Notes to consolidated financial statements (continued)

When the Company exercises a warrant, the cost of the security which the Company purchases upon such exercise will be increased by the premium originally paid. Realized and unrealized gains and losses on warrants are included in the net realized gain or loss on derivatives, and net unrealized appreciation (depreciation) on derivatives.

The following table reflects the fair value and notional amount or number of contracts of the Company’s derivative contracts, none of which were designated as hedging instruments under US GAAP, which are presented a gross basis, at June 30, 2013. The Company did not hold any derivative positions at June 30, 2012.

	Assets		Contracts
Equity contracts	$	555,971		1,058,333
Gross fair value of derivative contracts	$	555,971

In the preceding table, the number of contracts as of June 30, 2013 is reflective of the volume of derivatives activity during the year.

The following table reflects the amount of gains (losses) on derivatives included in the Statement of Operations for the year ended June 30, 2013. None of the derivatives were designated as hedging instruments under US GAAP. The Company did not hold any derivative positions during the period ended June 30, 2012.

	Included in net change in unrealized appreciation (depreciation) on derivatives
Equity contracts	$	158,414
Total	$	158,414

d. Fair value measurements

ASC 820 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a framework for measuring fair value and a valuation hierarchy that prioritizes the inputs used in the valuation of an asset or liability based upon their transparency. The valuation hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assets and liabilities measured at fair value have been classified in the following three categories:

Level 1 – valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 – valuation is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as (a) quoted prices for similar assets or liabilities in active markets; (b) quoted prices for identical or similar assets or

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Notes to consolidated financial statements (continued)

liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers, or in which little information is released publicly; (c) inputs other than quoted prices that are observable for the asset or liability; or (d) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – valuation is based on unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an exit price from the perspective of a market participant that holds the asset or owes the liability. Therefore, unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Unobservable inputs are developed based on the best information available in the circumstances, which might include the Company’s own data. The Company’s own data used to develop unobservable inputs is adjusted if information is reasonably available without undue cost and effort that indicates that market participants would use different assumptions.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of the market and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The following table summarizes the classifications within the fair value hierarchy of the Company’s assets and liabilities measured at fair value as of June 30, 2013:

	Fair Value Measurements as of June 30, 2013
Assets	Level 1		Level 2		Level 3*		Total
Investments
Senior Secured First Lien Term Loans	$	—	$	—	$	74,807,541	$	74,807,541
Senior Secured Second Lien Term Loans		—		—		23,448,281		23,448,281
Senior Secured Notes		—		—		20,397,491		20,397,491
Total investments		—		—		118,653,313		118,653,313
Derivatives
Warrants		—		—		555,971		555,971
Total Derivatives		—		—		555,971		555,971
Total Assets	$	—	$	—	$	119,209,284	$	119,209,284

* Total Level 3 includes fair value of unfunded commitments of $16,832,435 on revolving credit facilities and delayed draw term loan facilities.

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CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

The following table summarizes the classifications within the fair value hierarchy of the Company’s assets and liabilities measured at fair value as of June 30, 2012:

	Fair Value Measurements as of June 30, 2012
Assets	Level 1		Level 2		Level 3		Total
Investments
Senior Secured First Lien Term Loans	$	—	$	—	$	21,571,479	$	21,571,479
Total investments		—		—		21,571,479		21,571,479
Total Assets	$	—	$	—	$	21,571,479	$	21,571,479

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs:

	Senior Secured First Lien Term Loans			Senior Secured Second Lien Term Loans			Senior Secured Notes		Warrants		Total
Balance as of March 7, 2012	$	—		$	—		$	—	$	—	$	—
Purchases		33,210,324			—			—		—		33,210,324
Sales		(11,643,901	)		—			—		—		(11,643,901	)
Amortization		11,403			—			—		—		11,403
Net realized gains		110			—			—		—		110
Net change in unrealized (depreciation)		(6,457	)		—			—		—		(6,457	)
Balance as of June 30, 2012	$	21,571,479		$	—		$	—	$	—	$	21,571,479
Purchases		86,991,984			26,829,052			19,737,082		397,557		133,955,675
Sales		(34,543,042	)		(3,693,027	)		—		—		(38,236,069	)
Amortization		14,935			2,889			46,334		—		64,158
Net realized gains		688,972			92,290			—		—		781,262
Net change in unrealized appreciation		83,213			217,077			614,075		158,414		1,072,779
Balance as of June 30, 2013	$	74,807,541		$	23,448,281		$	20,397,491	$	555,971	$	119,209,284

Transfers into Level 3 during or at the end of the reporting year are reported under Level 1 or Level 2 as of the beginning of the year. Transfers out of Level 3 during or at the end of the reporting year are reported under Level 3 as of the beginning of the year. Changes in unrealized gains (losses) relating to Level 3 instruments are included in unrealized appreciation (depreciation) on investments and derivatives on the Consolidated Statement of Operations.

During the year ended June 30, 2013 and the period ended June 30, 2012, the Company did not transfer any investments between Levels 1 and 2 and 3.

F-48

CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

The following table presents the changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held as of June 30, 2013 and 2012. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the unrealized gains and losses within the Level 3 category presented in the table below may include changes in fair value that were attributable to both observable and unobservable inputs.

	Changes in unrealized gains/(losses) relating to assets and liabilities still held as of June 30,
	2013		2012
Assets
Investments
Senior Secured First Lien Term Loans	$	171,819	$	(6,457	)
Senior Secured Second Lien Term Loans		217,077		—
Senior Secured Notes		614,075		—
Total investments		1,002,971		(6,457	)
Derivatives
Warrants		158,414		—
Total Derivatives		158,414		—
Total Assets	$	1,161,385	$	(6,457	)

For June 30, 2012, the Company used a market comparables model to value its Level 3 investment in bank debt. The unobservable input used was a yield of 7.3%.

The following table presents the ranges of significant unobservable inputs used to value the Company’s Level 3 investments as of June 30, 2013. These ranges represent the significant unobservable inputs that were used in the valuation of each type of investment. These inputs are not representative of the inputs that could have been used in the valuation of any one investment. For example, the highest PIK discount presented in the table for corporate fixed income is appropriate for valuing a specific investment but may not be appropriate for valuing any other investment. Accordingly, the ranges of inputs presented below do not represent uncertainty in, or possible ranges of, fair value measurements of the Company’s Level 3 investments.

	Fair Value as of June 30, 2013		Valuation Methodology	Unobservable Input(s)	Weighted Average	Range
Senior Secured First Lien Term Loans	$	74,807,541	Other Approach (1)	Other metrics	N/A	N/A
Senior Secured Second Lien Term Loans		23,448,281	Other Approach (1)	Other metrics	N/A	N/A
Senior Secured Notes		20,397,491	Market Comparables	Illiquidity discount	3%	3%
				PIK discount	2.2%	1.5% - 3%
				Yield	7.3%	7.3%
			Other Approach (1)	Other metrics	N/A	N/A
Warrants	$	555,971	Market Comparables	Implied volatility	37%	37%
			Other Approach (2)	Other metrics	N/A	N/A

F-49

CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

(1) Other metrics include marking to broker quotes (100% of Senior Secured First Lien Term Loans and Senior Secured Second Lien Term Loans and 49% of Senior Secured Notes).

(3) Other metrics include marking to recent funding activity (29% of Warrants).

Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value and such changes could result in a significant increase or decrease in the fair value. Significant increases in illiquidity discounts, PIK discounts and market yields would result in significantly lower fair value measurements. Significant increases in implied volatility would result in significantly higher fair value measurements.

6. Note payable

On May 23, 2013, as amended on June 6, 2013, the Company, through SPV, entered into a $76.5 million financing transaction (the “Financing Facility”) due May 22, 2016 with a major European bank. The Financing Facility is collateralized by a portion of the Company’s assets. The Company will pay interest on the face amount of the Financing Facility monthly at a rate of one-month LIBOR plus a spread that increases from 1.63% per annum from May 23, 2013 to July 14, 2013 to 1.97% per annum from July 15, 2013 to August 14, 2013 to 2.85% per annum from August 15, 2013 through the end of the term. This financing transaction was executed in two steps. First, the Company organized SPV, a consolidated wholly owned bankruptcy remote special-purpose vehicle in the Cayman Islands to purchase the assets through the issuance and sale of notes secured by such assets (the “Notes”). The bank purchased Notes with a face value of $76.5 million, which represent 51% of the Notes issued and outstanding, for $76.5 million in cash. The Company purchased Notes with a face value of $73.5 million, which represent 49% of the Notes issued and outstanding, in exchange for assets with a fair market value of $92.2 million, while receiving cash of $18.7 million. Under the terms of the indenture under which the Notes were issued (the “Indenture”), the holders of the Notes are entitled to periodic interest payments equal to their pro rata portion of the interest collected on the assets held by SPV. Second, the Company and the bank entered into a total return swap transaction (the “TRS”) referencing the Notes and incorporating the material terms relating to the financing, such as the financing rate payable to the bank and other payment obligations as well as mark-to-market triggers and collateral posting requirements (including the posting of the Company’s 49%-portion of the Notes to the bank as security under the total return swap). Under the terms of the Indenture, and subject to certain limitations contained therein, the Company may access additional funding under the Financing Facility through subsequent sales to SPV of debt investments, which will then become part of the portfolio of assets securing the Notes. Cash shall be held by the trustee of the Financing Facility and is restricted to uses defined by the Indenture. Purchases of investments must meet certain eligibility criteria identified by the Indenture. Because of the substance of the transactions, the Company has presented the results of the transactions as a Note Payable on the Consolidated Statement of Financial Condition, and the financing on the TRS is recorded as Interest Expense on the Consolidated Statement of Operations. At June 30, 2013, the carrying amount of the Notes approximates the fair value. For the year ended June 30, 2013, the weighted average outstanding debt balance and the weighted average stated interest rate was $8.4 million and 0.19%, respectively.

F-50

CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

7. Indemnification, guarantees, commitments and contingencies

In the normal course of business, the Company enters into contracts which provide a variety of representations and warranties, and which provide general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.

Loans purchased by the Company may include revolving credit agreements or other financing commitments obligating the Company to advance additional amounts on demand. As of June 30, 2013 and June 30, 2012, the Company held unfunded commitments in the amount of approximately $16.8 million and $0 respectively.

The following table details the unfunded commitments as of June 30, 2013:

Investments	Principal			Amortized Cost			Fair Value
MF Global Holdings, Ltd. Exit Facility, 5.00%, due 12/4/2014	$	(4,007,888	)	$	(109,645	)	$	(40,079	)
YRC Worldwide, Inc. Letter of Credit, 7.5%, due 3/31/2015	$	(12,824,547	)		(105,753	)		(384,737	)
Total Unfunded Commitments				$	(215,398	)	$	(424,816	)

8. Related party transactions

The Managing Member is responsible for the Company’s Members’ Capital calculation, investment policy, valuation policy, performance of the Company and supervision of the conduct of its affairs.

The Company pays (or reimburses the Investment Manager or Cyrus) for investment expenses, legal expenses, systems and technology, auditing and tax preparation expenses, organizational expenses, expenses relating to the offering and sale of the limited company interests in the Company and extraordinary expenses. Expenses incurred by the Company which are of benefit to one or more other investment vehicles managed by the Investment Manager or its affiliates are allocated among such other investment vehicles on a pro rata basis generally in accordance with the relative amount of investment capital of such other investment vehicles. The Company has not utilized soft dollar arrangements to pay for any third party expenses.

The Company does not currently pay a management or incentive fee. As mentioned in Note 1, the Company plans to merge with and into CM Finance Inc, an entity which will pay management and incentive fees. If the Company had paid incentive fees similar to CM Finance Inc, the Company would have paid $23 for the period ended June 30, 2012 and $669,170 for the year ended June 30, 2013. If the Company had paid management fees similar to CM Finance Inc, the Company would have paid $74,375 for the period ended June 30, 2012 and $965,280 for the year ended June 30, 2013.

F-51

CM FINANCE, LLC AND SUBSIDIARY

Notes to consolidated financial statements (continued)

9. Financial highlights

The following represents the total returns and ratios to average members’ capital:

	Year ended June 30, 2013			Period from March 7, 2012 to June 30, 2012
Total return		16.16	%		2.58	%
Ratio of net investment income to average members’ capital		11.11	%		2.06	%
Ratio of operating expenses to average members’ capital		(1.12	%)		(1.34	%)
Ratio of credit facility related expenses to average members’ capital		(0.29	%)		0.00	%
Ratio of total expenses to average members’ capital		(1.14	%)		(1.34	%)
Portfolio turnover rate		68.37	%		69.68	%
Supplemental Data:		(in thousands)
Members’ capital at end of period/year	$	87,251		$	18,142
Average members’ capital	$	55,294		$	14,790

Total return is calculated based on a time-weighted rate of return methodology for the members, and is not annualized. Total return is reflected after all investment-related and operating expenses. An individual member’s return may vary from these returns based on the timing of capital transactions. The ratios to average members’ capital are calculated based on the monthly average members’ capital during the year/period. Credit facility related expenses include interest expense and amortization of deferred debt issuance costs.

10. Subsequent events

As required by US GAAP, the Company evaluated subsequent events through the date of issuance. As discussed in Note 1, the Company plans to merge with and into CM Finance Inc immediately prior to its initial public offering.

F-52

6,666,666 Shares

CM Finance Inc

Common Stock

PRELIMINARY PROSPECTUS

RAYMOND JAMES

KEEFE, BRUYETTE & WOODS

A Stifel Company

                , 2014

CM Finance Inc PART C OTHER INFORMATION

Item 25. Financial Statements and Exhibits

(1) Financial statements

None.

(2) Exhibits

(a)(1)	Amended and Restated Articles of Incorporation(1)
(b)(1)	Bylaws(1)
(c)	Irrevocable Proxy of the Cyrus Funds
(d)	Form of Stock Certificate(1)
(e)	Form of Dividend Reinvestment Plan
(f)	Not applicable
(g)(1)	Form of Investment Advisory Agreement between Registrant and CM Investment Partners LLC(1)
(g)(2)	Collateral Management Agreement, dated as of May 23, 2013, by and between CM Finance SPV Ltd and CM Investment Partners, LP(1)
(g)(3)	Form Letter Agreement between the Registrant and CM Investment Partners LLC*
(h)	Form of Underwriting Agreement*
(i)	Not applicable
(j)	Form of Custody Agreement
(k)(1)	Form of Administration Agreement between Registrant and CM Investment Partners LLC(1)
(k)(2)	Form of License Agreement between the Registrant and CM Investment Partners LLC(1)
(k)(3)	Form of Indemnification Agreement between the Registrant and the Directors(1)
(k)(4)	2002 Master Agreement, dated as of May 20, 2013, between Registrant and UBS AG(1)
(k)(5)	Indenture, dated as of May 23, 2013, between CM Finance SPV Ltd., as Issuer and State Street Bank and Trust Company, as Trustee(1)
(k)(6)	Master Assignment and Participation Agreement, dated as of May 23, 2013 between Registrant and CM Finance SPV Ltd.(1)
(k)(7)	Collateral Administration Agreement, dated as of May 23, 2013 by and among CM Finance SPV Ltd., CM Investment Partners, LP and State Street Bank and Trust Company(1)
(k)(8)	Amended and Restated Confirmation Letter Agreement, dated as of May 23, 2013, between UBS, AG and CM Finance LLC(1)
(k)(9)	Contribution Agreement, dated as of May 23, 2013, between CM Finance LLC and State Street Bank and Trust Company(1)
(k)(10)	First Supplemental Indenture, dated as of June 6, 2013, between CM Finance SPV Ltd., as Issuer and State Street Bank and Trust Company, as Trustee(1)
(k)(11)	Amended and Restated Indenture, dated as of December 4, 2013, between CM Finance SPV Ltd., as Issuer and State Street Bank and Trust Company, as Trustee
(k)(12)	Revolving Credit Note Agreement, dated as of December 4, 2013, by and among CM Finance SPV Ltd., State Street Bank and Trust Company and the noteholders party thereto

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(k)(13)	Amendment Agreement, dated as of December 4, 2013, between CM Finance SPV Ltd. and State Street Bank and Trust Company
(k)(14)	Amendment Agreement to 2002 ISDA Master Agreement, dated as of December 4, 2013 between Registrant and UBS AG.
(k)(15)	Omnibus Amendment Agreement, dated as of December 4, 2013, by and between CM Finance SPV Ltd. and State Street Bank and Trust Company
(k)(16)	Assignment of Collateral Management Agreement by and among CM Investment Partners, LP and CM Investment Partners LLC*
(k)(17)	Assignment of Collateral Administration Agreement by and among CM Investment Partners, LP and CM Investment Partners LLC*
(k)(18)	Registration Right Agreement, dated as of December 17, 2013, between Registrant and certain stockholders
(k)(19)	Stockholder Agreement, dated as of December 17, 2013, between the Registrant and Stifel Venture Corp.
(l)(1)	Form of Opinion and Consent of Sutherland Asbill & Brennan LLP, counsel for Registrant
(m)	Not applicable
(n)(1)	Consent of Ernst & Young LLP
(n)(2)	Report of Ernst & Young LLP with respect to the “Senior Securities” table(1)
(o)	Not applicable
(p)	Not applicable
(q)	Not applicable
(r)(1)	Code of Ethics of CM Finance Inc(1)
(r)(2)	Code of Ethics of CM Investment Partners LLC(1)

* To be filed by amendment.

(1) Previously filed.

Item 26. Marketing Arrangements

The information contained under the heading “Underwriting” on this Registration Statement is incorporated herein by reference.

Item 27. Other Expenses of Issuance and Distribution

Securities and Exchange Commission registration fee	$	14,812
FINRA filing fee		17,750
Nasdaq Global Market listing fees		5,000
Printing expenses (1)		250,000
Accounting fees and expenses (1)		100,000
Legal fees and expenses (1)		800,000
Miscellaneous (1)		12,438
Total	$	1,200,000

(1) These amounts are estimates.

Item 28. Persons Controlled by or Under Common Control

None.

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Item 29. Number of Holders of Securities

The following table sets forth the approximate number of record holders of the Company’s common stock as of December 1, 2013.

Title of Class	Number of Record Holders
Common Stock, $0.001 par value		1

Item 30. Indemnification

Reference is made to Section 2-418 of the Maryland General Corporation Law, Article VII of the Registrant’s charter and Article XI of the Registrant’s Amended and Restated Bylaws.

Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. The Registrant’s charter contains such a provision which eliminates directors’ and officers’ liability to the maximum extent permitted by Maryland law, subject to the requirements of the 1940 Act.

The Registrant’s charter authorizes the Registrant, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while serving as the Registrant’s director or officer and at the Registrant’s request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee, from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse their reasonable expenses in advance of final disposition of a proceeding. The Registrant’s bylaws obligate the Registrant, to the maximum extent permitted by Maryland law and subject to the requirements of the 1940 Act, to indemnify any present or former director or officer or any individual who, while serving as the Registrant’s director or officer and at the Registrant’s request, serves or has served another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise as a director, officer, partner or trustee and who is made, or threatened to be made, a party to the proceeding by reason of his or her service in that capacity from and against any claim or liability to which that person may become subject or which that person may incur by reason of his or her service in any such capacity and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. The charter and bylaws also permit the Registrant to indemnify and advance expenses to any person who served a predecessor of the Registrant in any of the capacities described above and any of the Registrant’s employees or agents or any employees or agents of the Registrant’s predecessor. In accordance with the 1940 Act, the Registrant will not indemnify any person for any liability to which such person would be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

Maryland law requires a corporation (unless its charter provides otherwise, which the Registrant’s charter does not) to indemnify a director or officer who has been successful in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. Maryland law permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those or other

C-3

capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received unless, in either case, a court orders indemnification, and then only for expenses. In addition, Maryland law permits a corporation to advance reasonable expenses to a director or officer in advance of final disposition of a proceeding upon the corporation’s receipt of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not met.

Adviser and Administrator

The Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, the Adviser and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Registrant for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of the Adviser’s services under the Investment Advisory Agreement or otherwise as an investment adviser of the Registrant.

The Administration Agreement provides that, absent criminal conduct, willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, CM Investment Partners LLC and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from the Registrant for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of CM Investment Partners LLC’s services under the Administration Agreement or otherwise as administrator for the Registrant.

The law also provides for comparable indemnification for corporate officers and agents. Insofar as indemnification for liability arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The Registrant has entered into indemnification agreements with its directors. The indemnification agreements are intended to provide the Registrant’s directors the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement

C-4

provides that the Registrant shall indemnify the director who is a party to the agreement (an “Indemnitee”), including the advancement of legal expenses, if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, other than a proceeding by or in the right of the Registrant.

Item 31. Business and Other Connections of Investment Adviser

A description of any other business, profession, vocation or employment of a substantial nature in which the Adviser, and each managing director, director or executive officer of the Adviser, is or has been during the past two fiscal years, engaged in for his or her own account or in the capacity of director, officer, employee, partner or trustee, is set forth in Part A of this Registration Statement in the sections entitled “Management.” Additional information regarding the Adviser and its officers and directors will be set forth in its Form ADV to be filed with the Securities and Exchange Commission.

Item 32. Location of Accounts and Records

All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, and the rules thereunder are maintained at the offices of:

(1) the Registrant, CM Finance Inc, 399 Park Avenue, 39th Floor, New York, New York 10022;

(2) the Transfer Agent, American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, NY 11219;

(3) the Custodian, State Street Bank and Trust Company, 225 Franklin Street, Boston, MA 02110; and

(4) the Adviser, CM Investment Partners, LP, 399 Park Avenue, 39th Floor, New York, New York 10022.

Item 33. Management Services

Not Applicable.

Item 34. Undertakings

(1) The Registrant undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, the Registrant undertakes to suspend the offering of shares until the prospectus is amended if (1) subsequent to the effective date of its registration statement, the net asset value declines more than ten percent from its net asset value as of the effective date of the registration statement; or (2) the net asset value increases to an amount greater than the net proceeds as stated in the prospectus; and

(c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

C-5

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) Not applicable.

(4) Not applicable.

(5) The Registrant undertakes that:

(a) For the purpose of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(6) Not applicable.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, in the State of New York, on the 20th day of December 2013.

CM Finance Inc
	/s/ Michael C. Mauer
By:	Name:   Michael C. Mauer Title:     Chief Executive Officer and Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2 has been signed below by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/ Michael C. Mauer Michael C. Mauer	Chief Executive Officer and Chairman of the Board (Principal Executive Officer)	December 20, 2013
/s/ Christopher E. Jansen Christopher E. Jansen	President, Secretary and Director	December 20, 2013
/s/ Brennan McCaw Brennan McCaw	Interim Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	December 20, 2013
* Keith Lee	Director	December 20, 2013
* Julie Persily	Director	December 20, 2013
* Robert Ryder	Director	December 20, 2013
* Robert Wagner	Director	December 20, 2013

* Signed by Michael C. Mauer pursuant to a power of attorney signed by each individual on November 15, 2013.

C-7

EX-99.C

Exhibit (c)

IRREVOCABLE PROXY

The undersigned stockholders (“Stockholders”) of CM Finance Inc, a Maryland corporation (the “Company”), hereby (i) grants to, and appoints, the Company, and any person designated in writing by the Company, and each of them individually, Stockholders’ proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of Stockholders, to vote all of the shares (the “Covered Shares”) of common stock, par value $0.001 per share (the “Common Stock”) of the Company, or grant a consent or approval in respect of the Covered Shares, in accordance with the terms of this Proxy and (ii) revokes any and all proxies heretofore given in respect of the Covered Shares.

The attorneys-in-fact and proxies named above are hereby authorized and empowered by the undersigned at any time after the date hereof to act as the undersigned’s attorney-in-fact and proxy to vote the Covered Shares in the same proportion as the vote of all other holders of the Common Stock, excluding any shares of Common Stock held by Stifel Financial Corporation, and to exercise all voting, consent and similar rights of the undersigned with respect to the Covered Shares (including, without limitation, the power to execute and deliver written consents), at every annual, special, adjourned or postponed meeting of the stockholders of the Company and in every written consent in lieu of such a meeting (such authorization and empowerment, the “Proxy”). The Stockholders shall not commit or agree to take any action inconsistent with the foregoing.

In the event that the U.S. Securities and Exchange Commission determines that any (or all) of the Stockholders or Cyrus Capital Partners, L.P. (collectively, “Cyrus”) is a person who is related to CM Finance Inc in a manner described in Section 57(b) of the Investment Company Act of 1940, as amended, then the Proxy shall be considered cancelled from the date of such determination and thereafter.

Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the undersigned.

Dated:             , 2013

STOCKHOLDERS:
Cyrus Opportunities Master Fund II, Ltd.
Crescent 1, L.P.
CRS Master Fund, L.P.
Cyrus Select Opportunities Master Fund, Ltd.
By:	Cyrus Capital Partners, L.P., as investment manager
By:
	Name:
	Title:

EX-99.E

Exhibit (e)

DIVIDEND REINVESTMENT PLAN

OF

CM Finance Inc

CM Finance Inc, a Maryland corporation (the “Company”), hereby adopts the following plan (the “Plan”) with respect to dividends and distributions (collectively, “Cash Distributions”) declared by its Board of Directors (the “Board of Directors”) on shares of its common stock (the “Common Stock”).

1. Unless a stockholder specifically elects to receive cash as set forth below, all Cash Distributions hereafter declared by the Board of Directors will be payable in shares of the Common Stock of the Company, and no action will be required on such stockholder’s part to receive a Cash Distribution in Common Stock.

2. Such Cash Distributions will be payable on such date or dates as may be fixed from time to time by the Board of Directors to stockholders of record at the close of business on the record date(s) established by the Board of Directors for the Cash Distribution involved.

3. The Company intends to use primarily newly issued shares of its Common Stock to implement the Plan, whether shares of its Common Stock are trading at a premium or at a discount to net asset value per share of the Common Stock. However, the Company reserves the right to instruct American Stock Transfer and Trust Company LLC, the plan administrator (the “Plan Administrator”), to purchase shares of its Common Stock in the open market in connection with its obligations under the Plan. Such purchase will be effected through a broker-dealer selected by the Plan Administrator. The broker-dealer selected by the Plan Administrator is acting as a dealer and not in a fiduciary, agency or similar capacity (regardless of any relationship between the Plan Administrator and the Fund) and may be an affiliate of the Plan Administrator. The broker-dealer may charge brokerage commissions, fees and transaction costs for such trading services (“Transaction Processing Fees”), which Transaction Processing Fees are in addition to and not in lieu of any compensation the Plan Administrator receives as Plan Administrator.

In the case that newly issued shares of Common Stock are used to implement the Plan, the number of shares of Common Stock to be delivered to a stockholder shall be determined by dividing the total dollar amount of the Cash Distribution payable to such stockholder by 95% of the market price per share of the Common Stock at the close of trading on the date fixed by the Board of Directors for purposes thereof. The market price per share of the Common Stock on that date will be the closing price for the shares of Common Stock on the NASDAQ Global Market or, if no sale is reported for such day, at the average of the electronically-reported bid and asked prices of the shares of Common Stock. The Company reserves the right to purchase shares of Common Stock in the open market in connection with its implementation of the plan.

Shares of Common Stock purchased in open market transactions by the Plan Administrator will be allocated to a stockholder based upon the average purchase price, excluding any brokerage charges or other charges, of all shares of Common Stock purchased with respect to the Cash Distribution.

Adopted December 2, 2013

4. A stockholder may, however, elect to receive his, her or its Cash Distributions in cash. To exercise this option, such stockholder will notify the Plan Administrator in writing so that such notice is received by the Plan Administrator by the record date fixed by the Board of Directors for the Cash Distribution involved. Such election will remain in effect until the Participant (as defined below) notifies the Plan Administrator in writing of such Participant’s withdrawal of elections, which notice will be delivered to the Plan Administrator by the record date fixed by the Board of Directors for the Cash Distribution involved. Persons who hold their shares of Common Stock through a broker or other nominee and who wish to elect to receive any Cash Distribution in cash must contact their broker or nominee.

5. The Plan Administrator will set up an account for shares of Common Stock acquired pursuant to the Plan for each stockholder who has not elected to receive distributions in cash (each a “Participant”). The Plan Administrator may hold each Participant’s shares, together with the shares of other Participants, in non-certificated form in the Plan Administrator’s name or that of its nominee. In the case of shareholders such as banks, brokers or nominees that hold Common Stock for others who are the beneficial owners, the Plan Administrator will administer the Plan on the basis of the number of shares of Common Stock certified from time to time by the record shareholder and held for the account of beneficial owners who participate in the Plan. Upon request by a Participant, received in writing no later than five (5) business days prior to the payment date, the Plan Administrator will, promptly following the Cash Distribution, instead of crediting shares to and/or carrying shares in a Participant’s account, issue, without charge to the Participant, a certificate registered in the Participant’s name for the number of whole shares of Common Stock payable to the Participant and a check for any fractional interest.

6. The Plan Administrator will confirm to each Participant each acquisition made pursuant to the Plan as soon as practicable but not later than ten (10) business days after the date thereof. Although each Participant may from time to time have an undivided fractional interest (computed to three decimal places) in a share of Common Stock of the Company, no certificates for a fractional share will be issued. However, Cash Distributions on fractional shares will be credited to each Participant’s account. In the event of termination of a Participant’s account under the Plan, the Plan Administrator will adjust for any such undivided fractional interest in cash at the market price per share of the Common Stock at the time of termination.

7. In the event that the Company makes available to its stockholders rights or warrants to purchase additional shares or other securities, the shares of Common Stock held by the Plan Administrator for each Participant under the Plan will be added to any other shares of Common Stock held by the Participant (in book-entry or certificated form) in calculating the number of rights or warrants to be issued to the Participant.

8. The Plan Administrator’s service fee, if any, and expenses for administering the Plan will be paid for by the Company.

9. Each Participant may terminate his, her or its account under the Plan by so notifying the Plan Administrator in writing, by telephone or on the Plan Administrator’s website at

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www.amstock.com. Such termination will be effective immediately if the Participant’s notice is received by the Plan Administrator not less than five (5) days prior to the record date fixed by the Board of Directors for the Cash Distribution; otherwise such termination will be effective only with respect to any subsequent Cash Distribution. The Plan may be terminated by the Company upon notice in writing mailed to each Participant at least 30 days prior to any record date for the payment of any Cash Distribution by the Company. Persons who hold their shares of Common Stock through a broker or other nominee and who wish to terminate his or its account under the Plan may do so by notifying their broker or nominee. If a Participant elects by his, her or its written notice to the Plan Administrator in advance of termination to have the Plan Administrator sell part or all of his, her or its shares and remit the proceeds to the Participant, the Plan Administrator is authorized to deduct a $15.00 transaction fee plus a brokerage commission of $0.10 per share from the proceeds.

10. These terms and conditions may be amended or supplemented by the Company at any time but, except when necessary or appropriate to comply with applicable law or the rules or policies of the Securities and Exchange Commission or any other regulatory authority, only by mailing to each Participant appropriate written notice at least 30 days prior to the effective date thereof. The amendment or supplement will be deemed to be accepted by each Participant unless, prior to the effective date thereof, the Plan Administrator receives written notice of the termination of his, her or its account under the Plan. Any such amendment may include an appointment by the Plan Administrator in its place and stead of a successor agent under these terms and conditions, with full power and authority to perform all or any of the acts to be performed by the Plan Administrator under these terms and conditions. Upon any such appointment of any agent for the purpose of receiving dividends and distributions, the Company will be authorized to pay to such successor agent, for each Participant’s account, all dividends and distributions payable on shares of the Company held in the Participant’s name or under the Plan for retention or application by such successor agent as provided in these terms and conditions.

11. The Plan Administrator will at all times act in good faith and use its best efforts to ensure its full and timely performance of all services to be performed by it under this Plan and to comply with applicable law, but assumes no responsibility and will not be liable for loss or damage due to errors unless such error is caused by the Plan Administrator’s negligence, bad faith, or willful misconduct or that of its employees or agents.

12. Neither the Company nor the Plan Administrator will be liable for any act performed in good faith or for any good faith omission to act or failure to act, including, without limitation, any claim of liability (a) arising out of failure to terminate a Participant’s account, sell shares held in the Plan or reinvest dividends; (b) with respect to the prices at which stock is purchased or sold for the Participant’s account and the time such purchases or sales are made. Without limiting the foregoing, the Plan Administrator will not be liable for any claim made more than 30 days after any instruction to buy or sell stock was given to the Plan Administrator.

13. These terms and conditions will be governed by the laws of the State of New York.

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EX-99.J

Exhibit (j)

CUSTODIAN AGREEMENT

This Agreement, dated as of November     , 2013, is between CM FINANCE INC, a corporation organized and existing under the laws of the State of Maryland (the “Fund”), and STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company (the “Custodian”).

WITNESSETH: that in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:

SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT.

The Fund hereby employs the Custodian as the custodian of its assets, including securities (including stocks, shares, bonds, debentures, notes, mortgages or other obligations and any certificates, receipts, warrants or other instruments representing rights to receive, purchase, or subscribe for the same, or evidencing or representing any other rights or interests therein, or in any property or assets) which the Fund desires to be held in places within the United States (“domestic securities”) and securities it desires to be held outside the United States (“foreign securities”). The Fund agrees to deliver to the Custodian all securities and cash owned by it, and all payments of income, payments of principal or capital distributions received by it with respect to all securities owned by it from time to time, and the cash consideration received by it for such new or treasury shares of beneficial interest of the Fund (“Shares”) as may be issued or sold from time to time. The Custodian shall not be responsible for any property of the Fund held or received by the Fund but not delivered to the Custodian including, without limitation, Fund property (i) held by brokers, private bankers or other entities on behalf of the Fund, (ii) held by entities which have advanced monies to or on behalf of the Fund and which have received Fund property as security for such advance(s), or (iii) delivered or otherwise removed from the custody of the Custodian in connection with any Free Trade (as such term is defined in Sections 2.2(14) and 2.6(7) hereof). With respect to uncertificated shares (the “Underlying Shares”) of registered “investment companies” (as defined in Section 3(a)(1) of the Investment Company Act of 1940, as amended from time to time (the “1940 Act”)), whether in the same “group of investment companies” (as defined in Section 12(d)(1)(G)(ii) of the 1940 Act) or otherwise, including pursuant to Section 12(d)(1)(F) of the 1940 Act (hereinafter sometimes referred to as the “Underlying Portfolios”) the holding of confirmation statements that identify the shares as being recorded in the Custodian’s name on behalf of the Fund will be deemed custody for purposes hereof.

Upon receipt of “Proper Instructions” (as such term is defined in Section 6 hereof), the Custodian shall from time to time employ one or more sub-custodians located in the United States, but only in accordance with an applicable vote by the Board of Directors of the Fund (the “Board”). The Custodian may employ as sub-custodian for the Fund’s foreign securities the foreign banking institutions and foreign securities depositories designated in Schedules A and B hereto, but only in accordance with the applicable provisions of Sections 3 and 4. The Custodian shall have no more or less responsibility or liability to the Fund on account of any actions or omissions of any sub-custodian so employed than any such sub-custodian has to the Custodian.

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SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE CUSTODIAN IN THE UNITED STATES.

SECTION 2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate for the account of the Fund all non-cash property, to be held by it in the United States, including all domestic securities owned by the Fund other than (a) securities which are maintained pursuant to Section 2.8 in a clearing agency which acts as a securities depository or in a book-entry system authorized by the U.S. Department of the Treasury (each, a “U.S. Securities System”) and (b) Underlying Shares owned by the Fund which are maintained pursuant to Section 2.13 hereof in an account with State Street Bank and Trust Company or such other entity which may from time to time act as a transfer agent for the Underlying Portfolios and with respect to which the Custodian is provided with Proper Instructions (each, an “Underlying Transfer Agent”).

SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver domestic securities owned by the Fund held by the Custodian, in a U.S. Securities System account of the Custodian, or in an account at the Underlying Transfer Agent, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

1) Upon sale of such securities for the account of the Fund and receipt of payment therefor;

2) Upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by the Fund;

3) In the case of a sale effected through a U.S. Securities System, in accordance with the provisions of Section 2.8 hereof;

4) To the depository agent in connection with tender or other similar offers for securities of the Fund;

5) To the issuer thereof or its agent when such securities are called, redeemed, retired or otherwise become payable; provided that, in any such case, the cash or other consideration is to be delivered to the Custodian;

6) To the issuer thereof, or its agent, for transfer into the name of the Fund or into the name of any nominee or nominees of the Custodian or into the name or nominee name of any agent appointed pursuant to Section 2.7 or into the name or nominee name of any sub-custodian appointed pursuant to Section 1; or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units; provided that, in any such case, the new securities are to be delivered to the Custodian;

7) Upon the sale of such securities for the account of the Fund, to the broker or its clearing agent, against a receipt, for examination in accordance with “street delivery” custom; provided that in any such case, the Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Custodian’s own negligence or willful misconduct;

8) For exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;

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9) In the case of warrants, rights or similar securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities; provided that, in any such case, the new securities and cash, if any, are to be delivered to the Custodian;

10) For delivery in connection with any loans of securities made by the Fund, but only against receipt of adequate collateral as agreed upon from time to time by the Custodian and the Fund, which may be in the form of cash or obligations issued by the United States government, its agencies or instrumentalities, except that in connection with any loans for which collateral is to be credited to the Custodian’s account in the book-entry system authorized by the U.S. Department of the Treasury, the Custodian will not be held liable or responsible for the delivery of securities owned by the Fund prior to the receipt of such collateral;

11) For delivery as security in connection with any borrowing by the Fund requiring a pledge of assets by the Fund, but only against receipt of amounts borrowed;

12) For delivery in accordance with the provisions of any agreement among the Fund, the Custodian and a broker-dealer registered under the Securities Exchange Act of 1934 (the “Exchange Act”) and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”, formerly known as The National Association of Securities Dealers, Inc.), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Fund;

13) For delivery in accordance with the provisions of any agreement among the Fund, the Custodian, and a futures commission merchant registered under the Commodity Exchange Act, relating to compliance with the rules of the Commodity Futures Trading Commission (“CFTC”) and/or any contract market, or any similar organization or organizations, regarding account deposits in connection with transactions by the Fund;

14) Upon the sale or other delivery of such investments (including, without limitation, to one or more additional custodians appointed by the Fund, and communicated to the Custodian from time to time via a writing duly executed by an authorized officer of the Fund, for the purpose of engaging in repurchase agreement transactions(s), each a “Repo Custodian”), and prior to receipt of payment therefor, as set forth in written Proper Instructions (such delivery in advance of payment, along with payment in advance of delivery made in accordance with Section 2.6(7), as applicable, shall each be referred to herein as a “Free Trade”), provided that such Proper Instructions shall set forth (a) the securities of the Fund to be delivered and (b) the person(s) to whom delivery of such securities shall be made;

15) Upon receipt of instructions from the transfer agent for the Fund (the “Transfer Agent”) for delivery to such Transfer Agent or to the holders of Shares in connection

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with distributions in kind, as may be described from time to time in the Fund’s currently effective prospectus and statement of additional information (the “Prospectus”), in satisfaction of requests by holders of Shares for repurchase or redemption;

16) For delivery as initial or variation margin in connection with futures or options on futures contracts entered into by the Fund;

17) In the case of a sale processed through the Underlying Transfer Agent of Underlying Shares, in accordance with Section 2.13 hereof; and

18) For any other purpose, but only upon receipt of Proper Instructions specifying the securities of the Fund to be delivered and naming the person or persons to whom delivery of such securities shall be made.

SECTION 2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian (other than bearer securities) shall be registered in the name of the Fund or in the name of any nominee of the Fund or of any nominee of the Custodian which nominee shall be assigned exclusively to the Fund, unless the Fund has authorized in writing the appointment of a nominee to be used in common with other registered investment companies having the same investment advisor as the Fund, or in the name or nominee name of any agent appointed pursuant to Section 2.7 or in the name or nominee name of any sub-custodian appointed pursuant to Section 1. All securities accepted by the Custodian on behalf of the Fund under the terms of this Agreement shall be in “street name” or other good delivery form. If, however, the Fund directs the Custodian to maintain securities in “street name”, the Custodian shall utilize its best efforts only to timely collect income due the Fund on such securities and to notify the Fund on a best efforts basis only of relevant corporate actions including, without limitation, pendency of calls, maturities, tender or exchange offers.

SECTION 2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank account or accounts in the United States in the name of the Fund, subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement, and shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Fund, other than cash maintained by the Fund in a bank account established and used in accordance with Rule 17f-3 under the 1940 Act. Monies held by the Custodian for the Fund may be deposited by it to its credit as Custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable; provided, however, that every such bank or trust company shall be qualified to act as a custodian under the 1940 Act and that each such bank or trust company and the monies to be deposited with each such bank or trust company shall be approved by vote of a majority of the Board. Such monies shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that capacity.

SECTION 2.5 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the Custodian shall collect on a timely basis all income and other payments with respect to registered domestic securities held hereunder to which the Fund shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payments with respect to bearer domestic securities if, on the date of payment by the issuer, such securities are held by the Custodian or its agent thereof and shall credit such income, as collected, to the Fund’s custodian account. Without limiting the generality of the foregoing, the Custodian shall detach and

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present for payment all coupons and other income items requiring presentation as and when they become due and shall collect interest when due on securities held hereunder. Income due the Fund on securities loaned pursuant to the provisions of Section 2.2 (10) shall be the responsibility of the Fund. The Custodian will have no duty or responsibility in connection therewith, other than to provide the Fund with such information or data as may be necessary to assist the Fund in arranging for the timely delivery to the Custodian of the income to which the Fund is properly entitled.

SECTION 2.6 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out monies of the Fund in the following cases only:

1) Upon the purchase of domestic securities, options, futures contracts or options on futures contracts for the account of the Fund but only (a) against the delivery of such securities or evidence of title to such options, futures contracts or options on futures contracts to the Custodian (or any bank, banking firm or trust company doing business in the United States or abroad which is qualified under the 1940 Act to act as a custodian and has been designated by the Custodian as its agent for this purpose) registered in the name of the Fund or in the name of a nominee of the Custodian referred to in Section 2.3 hereof or in proper form for transfer; (b) in the case of a purchase effected through a U.S. Securities System, in accordance with the conditions set forth in Section 2.8 hereof; (c) in the case of a purchase of Underlying Shares, in accordance with the conditions set forth in Section 2.13 hereof; (d) repurchase agreements entered into between the Fund and the Custodian, or another bank, or a broker-dealer which is a member of FINRA, (i) against delivery of the securities either in certificate form or through an entry crediting the Custodian’s account at the Federal Reserve Bank with such securities or (ii) against delivery of the receipt evidencing purchase by the Fund of securities owned by the Custodian along with written evidence of the agreement by the Custodian to repurchase such securities from the Fund; or (e) for transfer to a time deposit account of the Fund in any bank, whether domestic or foreign; such transfer may be effected prior to receipt of a confirmation from a broker and/or the applicable bank pursuant to Proper Instructions from the Fund as defined herein;

2) In connection with conversion, exchange or surrender of securities owned by the Fund as set forth in Section 2.2 hereof;

3) For the redemption or repurchase of Shares issued as set forth in Section 5 hereof;

4) For the payment of any expense or liability incurred by the Fund, including but not limited to the following payments for the account of the Fund: interest, taxes, management, accounting, transfer agent and legal fees, and operating expenses of the Fund whether or not such expenses are to be in whole or part capitalized or treated as deferred expenses;

5) For the payment of any dividends on Shares declared pursuant to the governing documents of the Fund;

6) For payment of the amount of dividends received in respect of securities sold short;

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7) Upon the purchase of domestic investments including, without limitation, repurchase agreement transactions involving delivery of Fund monies to Repo Custodian(s), and prior to receipt of such investments, as set forth in written Proper Instructions (such payment in advance of delivery, along with delivery in advance of payment made in accordance with Section 2.2(14), as applicable, shall each be referred to herein as a “Free Trade”), provided that such Proper Instructions shall also set forth (a) the amount of such payment and (b) the person(s) to whom such payment is made;

8) For the fulfillment of the Fund’s obligations with respect to unfunded commitments incurred in connection with Loans (as such term is defined in the Loan Services Addendum attached hereto);

9) For delivery as initial or variation margin in connection with futures or options on futures contracts entered into by the Fund; and

10) For any other purpose, but only upon receipt of Proper Instructions specifying the amount of such payment and naming the person or persons to whom such payment is to be made.

SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its discretion appoint (and may at any time remove) any other bank or trust company which is itself qualified under the 1940 Act to act as a custodian, as its agent to carry out such of the provisions of this Section 2 as the Custodian may from time to time direct; provided, however, that the appointment of any agent shall not relieve the Custodian of its responsibilities or liabilities hereunder. The Underlying Transfer Agent shall not be deemed an agent or sub-custodian of the Custodian for purposes of this Section 2.7 or any other provision of this Agreement.

SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The Custodian may deposit and/or maintain securities owned by the Fund in a U.S. Securities System in compliance with the conditions of Rule 17f-4 of the 1940 Act, as amended from time to time.

SECTION 2.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper Instructions establish and maintain a segregated account or accounts for and on behalf of the Fund, into which account or accounts may be transferred cash and/or securities, including securities maintained in an account by the Custodian pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any agreement among the Fund, the Custodian and a broker-dealer registered under the Exchange Act and a member of FINRA (or any futures commission merchant registered under the Commodity Exchange Act), relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange (or the CFTC or any registered contract market), or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Fund, (ii) for purposes of segregating cash or government securities in connection with options purchased, sold or written by the Fund or commodity futures contracts or options thereon purchased or sold by the Fund, (iii) for the purposes of compliance by the Fund with the procedures required by Investment Company Act Release No. 10666, or any subsequent release of the U.S. Securities and Exchange Commission (the “SEC”), or interpretative opinion of the staff of the SEC, relating to the maintenance of segregated accounts by registered investment companies, and (iv) for any other purpose upon receipt of Proper Instructions.

SECTION 2.10 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to domestic securities of the Fund held by it and in connection with transfers of securities.

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SECTION 2.11 PROXIES. The Custodian shall, with respect to the domestic securities held hereunder, cause to be promptly executed by the registered holder of such securities, if the securities are registered otherwise than in the name of the Fund or a nominee of the Fund, all proxies, without indication of the manner in which such proxies are to be voted, and shall promptly deliver to the Fund such proxies, all proxy soliciting materials and all notices relating to such securities.

SECTION 2.12 COMMUNICATIONS RELATING TO FUND SECURITIES. Subject to the provisions of Section 2.3, the Custodian shall transmit promptly to the Fund all written information (including, without limitation, pendency of calls and maturities of domestic securities and expirations of rights in connection therewith and notices of exercise of call and put options written by the Fund and the maturity of futures contracts purchased or sold by the Fund) received by the Custodian from issuers of the securities being held for the Fund. With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund all written information received by the Custodian from issuers of the securities whose tender or exchange is sought and from the party (or its agents) making the tender or exchange offer. The Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with domestic securities or other property of the Fund at any time held by it unless (i) the Custodian is in actual possession of such domestic securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least three business days prior to the date on which the Custodian is to take action to exercise such right or power. The Custodian shall also transmit promptly to the Fund all written information received by the Custodian regarding any class action or other litigation in connection with securities or other assets issued in the United States and then held, or previously held, during the term of this Agreement by the Custodian for the account of the Fund, including, but not limited to, opt-out notices and proof-of-claim forms. For avoidance of doubt, upon and after the effective date of any termination of this Agreement, the Custodian shall have no responsibility to so transmit any information under this Section 2.12.

SECTION 2.13 DEPOSIT OF FUND ASSETS WITH THE UNDERLYING TRANSFER AGENT. Underlying Shares beneficially owned by the Fund shall be deposited and/or maintained in an account or accounts maintained with an Underlying Transfer Agent and the Custodian’s only responsibilities with respect thereto shall be limited to the following:

1) Upon receipt of a confirmation or statement from an Underlying Transfer Agent that such Underlying Transfer Agent is holding or maintaining Underlying Shares in the name of the Custodian (or a nominee of the Custodian) for the benefit of the Fund, the Custodian shall identify by book-entry that such Underlying Shares are being held by it as custodian for the benefit of the Fund.

2) In respect of the purchase of Underlying Shares for the account of the Fund, upon receipt of Proper Instructions, the Custodian shall pay out monies of the Fund as so directed, and record such payment from the account of the Fund on the Custodian’s books and records.

3) In respect of the sale or redemption of Underlying Shares for the account of the Fund, upon receipt of Proper Instructions, the Custodian shall transfer such Underlying Shares as so directed, record such transfer from the account of the Fund on the Custodian’s books and records and, upon the Custodian’s receipt of the proceeds therefor, record such payment for the account of the Fund on the Custodian’s books and records.

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The Custodian shall not be liable to the Fund for any loss or damage to the Fund resulting from the maintenance of Underlying Shares with an Underlying Transfer Agent except for losses resulting directly from the fraud, negligence or willful misconduct of the Custodian or any of its agents or of any of its or their employees.

SECTION 3. PROVISIONS RELATING TO RULES 17F-5 AND 17F-7.

SECTION 3.1. DEFINITIONS. As used throughout this Agreement, the following capitalized terms shall have the indicated meanings:

“Country Risk” means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country including, but not limited to, such country’s political environment, economic and financial infrastructure (including any Eligible Securities Depository operating in the country), prevailing or developing custody and settlement practices, insolvency of a Foreign Sub-Custodian, and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country.

“Eligible Foreign Custodian” has the meaning set forth in section (a)(1) of Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5) of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of the 1940 Act; the term does not include any Eligible Securities Depository.

“Eligible Securities Depository” has the meaning set forth in section (b)(1) of Rule 17f-7.

“Foreign Assets” means any of the Fund’s investments (including foreign currencies) for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect the Fund’s transactions in such investments.

“Foreign Custody Manager” has the meaning set forth in section (a)(3) of Rule 17f-5.

“Rule 17f-5” means Rule 17f-5 promulgated under the 1940 Act.

“Rule 17f-7” means Rule 17f-7 promulgated under the 1940 Act.

SECTION 3.2. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.

3.2.1 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The Fund, by resolution adopted by its Board, hereby delegates to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 3.2 with respect to Foreign Assets held outside the United States, and the Custodian hereby accepts such delegation as Foreign Custody Manager of the Fund.

3.2.2 COUNTRIES COVERED. The Foreign Custody Manager shall be responsible for performing the delegated responsibilities defined below only with respect to the countries and custody arrangements for each such country listed on Schedule A to this Agreement, which list of

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countries may be amended from time to time by the Fund with the agreement of the Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign Custodians selected by the Foreign Custody Manager to maintain the Fund’s assets, which list of Eligible Foreign Custodians may be amended from time to time in the sole discretion of the Foreign Custody Manager. The Foreign Custody Manager will provide amended versions of Schedule A in accordance with Section 3.2.5 hereof.

Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account or to place or maintain Foreign Assets in a country listed on Schedule A, and the fulfillment by the Fund of the applicable account opening requirements for such country, the Foreign Custody Manager shall be deemed to have been delegated by the Board responsibility as Foreign Custody Manager with respect to that country and to have accepted such delegation. Execution of this Agreement by the Fund shall be deemed to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in each country listed on Schedule A in which the Custodian has previously placed or currently maintains Foreign Assets pursuant to the terms of the Agreement. Following the receipt of Proper Instructions directing the Foreign Custody Manager to close the account of the Fund with the Eligible Foreign Custodian selected by the Foreign Custody Manager in a designated country, the delegation by the Board to the Custodian as Foreign Custody Manager for that country shall be deemed to have been withdrawn and the Custodian shall immediately cease to be the Foreign Custody Manager of the Fund with respect to that country.

The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect to a designated country upon written notice to the Fund. Thirty days (or such longer period to which the parties agree in writing) after receipt of any such notice by the Fund, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund with respect to the country as to which the Custodian’s acceptance of delegation is withdrawn.

3.2.3 SCOPE OF DELEGATED RESPONSIBILITIES:

(a) SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the provisions of this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign Assets in the care of the Eligible Foreign Custodian selected by the Foreign Custody Manager in each country listed on Schedule A, as amended from time to time. In performing its delegated responsibilities as Foreign Custody Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by that Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1).

(b) CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign Custody Manager shall determine that the contract governing the foreign custody arrangements with each Eligible Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).

(c) MONITORING. In each case in which the Foreign Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian selected by the Foreign Custody Manager, the Foreign Custody Manager shall establish a system to monitor (i) the appropriateness of maintaining the Foreign Assets with such Eligible Foreign Custodian and (ii) the contract governing the custody arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian. In the event the Foreign Custody Manager determines that the custody arrangements with an Eligible

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Foreign Custodian it has selected are no longer appropriate, the Foreign Custody Manager shall (i) notify the Board in accordance with Section 3.2.5 hereunder, and (ii) withdraw the Foreign Assets as directed by the Board or pursuant to Proper Instructions.

3.2.4 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes of this Section 3.2, the Board shall be deemed to have considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for which the Custodian is serving as Foreign Custody Manager of the Fund.

3.2.5 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the placement of such Foreign Assets with another Eligible Foreign Custodian by providing to the Board an amended Schedule A at the end of the calendar quarter in which an amendment to such Schedule has occurred. The Foreign Custody Manager shall make written reports notifying the Board of any other material change in the foreign custody arrangements of the Fund described in this Section 3.2 after the occurrence of the material change.

3.2.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE FUND. In performing the responsibilities delegated to it, the Foreign Custody Manager agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of assets of management investment companies registered under the 1940 Act would exercise.

3.2.7 REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as defined in section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the Board has determined that it is reasonable for the Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Agreement to the Custodian as the Foreign Custody Manager of the Fund.

3.2.8 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The Board’s delegation to the Custodian as Foreign Custody Manager of the Fund shall be effective as of the date hereof and shall remain in effect until terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective sixty (60) days after receipt by the non-terminating party of such notice. The provisions of Section 3.2.2 hereof shall govern the delegation to and termination of the Custodian as Foreign Custody Manager of the Fund with respect to designated countries.

SECTION 3.3 ELIGIBLE SECURITIES DEPOSITORIES.

3.3.1 ANALYSIS AND MONITORING. The Custodian shall (a) provide the Fund (or its duly-authorized investment manager or investment advisor) with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B hereto in accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a continuing basis, and promptly notify the Fund (or its duly-authorized investment manager or investment advisor) of any material change in such risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7. If a custody arrangement with an Eligible Securities Depository no longer meets the requirements of this Section, the Fund’s Foreign Assets must be withdrawn from the depository as soon as reasonably practicable and the Custodian shall act in accordance with Proper Instructions to withdraw such Foreign Assets.

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3.3.2 STANDARD OF CARE. The Custodian agrees to exercise reasonable care, prudence and diligence in performing the duties set forth in Section 3.3.1.

SECTION 4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD OUTSIDE THE UNITED STATES.

SECTION 4.1 DEFINITIONS. As used throughout this Agreement, the following capitalized terms shall have the indicated meanings:

“Foreign Securities System” means an Eligible Securities Depository listed on Schedule B hereto.

“Foreign Sub-Custodian” means an Eligible Foreign Custodian.

SECTION 4.2. HOLDING SECURITIES. The Custodian shall identify on its books as belonging to the Fund the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities for all of its customers, including the Fund, with any Foreign Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers, provided however, that (i) the records of the Custodian with respect to foreign securities of the Fund which are maintained in such account shall identify those securities as belonging to the Fund and (ii), to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

SECTION 4.3. FOREIGN SECURITIES SYSTEMS. Foreign securities shall be maintained in a Foreign Securities System in a designated country through arrangements implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in such country.

SECTION 4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.

4.4.1. DELIVERY OF FOREIGN ASSETS. The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of the Fund held by the Custodian or such Foreign Sub-Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

(i) upon the sale of such foreign securities for the Fund in accordance with commercially reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System;

(ii) in connection with any repurchase agreement related to foreign securities;

(iii) to the depository agent in connection with tender or other similar offers for foreign securities of the Fund;

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(iv) to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;

(v) to the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;

(vi) to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case the Foreign Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Foreign Sub-Custodian’s own negligence or willful misconduct;

(vii) for exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;

(viii) in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;

(ix) for delivery as security in connection with any borrowing by the Fund requiring a pledge of assets by the Fund;

(x) for delivery as initial or variation margin in connection with futures or options on futures contracts entered into by the Fund;

(xi) in connection with the lending of foreign securities; and

(xii) for any other purpose, but only upon receipt of Proper Instructions specifying the foreign securities to be delivered and naming the person or persons to whom delivery of such securities shall be made.

4.4.2. PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of the Fund in the following cases only:

(i) upon the purchase of foreign securities for the Fund, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System;

(ii) in connection with the conversion, exchange or surrender of foreign securities of the Fund;

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(iii) for the payment of any expense or liability of the Fund, including but not limited to the following payments: interest, taxes, investment advisory fees, transfer agency fees, fees under this Agreement, legal fees, accounting fees, and other operating expenses;

(iv) for the purchase or sale of foreign exchange or foreign exchange contracts for the Fund, including transactions executed with or through the Custodian or its Foreign Sub-Custodians;

(v) for delivery as initial or variation margin in connection with futures or options on futures contracts entered into by the Fund;

(vi) for payment of part or all of the dividends received in respect of securities sold short;

(vii) in connection with the borrowing or lending of foreign securities; and

(viii) for any other purpose, but only upon receipt of Proper Instructions specifying the amount of such payment and naming the person or persons to whom such payment is to be made.

4.4.3. MARKET CONDITIONS. Notwithstanding any provision of this Agreement to the contrary, settlement and payment for Foreign Assets received for the account of the Fund and delivery of Foreign Assets maintained for the account of the Fund may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer.

The Custodian shall provide to the Board the information with respect to custody and settlement practices as described on Schedule C in countries in which the Custodian employs a Foreign Sub-Custodian at the time or times set forth on such Schedule. The Custodian may revise Schedule C from time to time, provided that no such revision shall result in the Board being provided with substantively less information than had been previously provided hereunder.

SECTION 4.5. REGISTRATION OF FOREIGN SECURITIES. The foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer securities) shall be registered in the name of the Fund or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and the Fund agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of the Fund under the terms of this Agreement unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice.

SECTION 4.6 BANK ACCOUNTS. The Custodian shall identify on its books as belonging to the Fund cash (including cash denominated in foreign currencies) deposited with the Custodian. Where the Custodian is unable to maintain, or market practice does not facilitate the maintenance of, cash on the books of the Custodian, a bank account or bank accounts shall be opened and maintained outside the United States on behalf of the Fund with a Foreign Sub-Custodian. All accounts referred to in this Section shall be subject only to draft or order by the Custodian (or, if applicable, such

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Foreign Sub-Custodian) acting pursuant to the terms of this Agreement to hold cash received by or from or for the account of the Fund. Cash maintained on the books of the Custodian (including its branches, subsidiaries and affiliates), regardless of currency denomination, is maintained in bank accounts established under, and subject to the laws of, The Commonwealth of Massachusetts.

SECTION 4.7. COLLECTION OF INCOME. The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which the Fund shall be entitled and shall credit such income, as collected, to the Fund. In the event that extraordinary measures are required to collect such income, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures.

SECTION 4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held pursuant to this Section 4, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. The Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Fund to exercise shareholder rights.

SECTION 4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall transmit promptly to the Fund written information with respect to materials received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Fund (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith). With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund written information with respect to materials so received by the Custodian from issuers of the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer. The Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with foreign securities or other property of the Fund at any time held by it unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual possession of such foreign securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least three business days prior to the date on which the Custodian is to take action to exercise such right or power. The Custodian shall also transmit promptly to the Fund all written information received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Fund regarding any class action or other litigation in connection with foreign securities or other assets issued outside the United States and then held, or previously held, during the term of this Agreement by the Custodian for the account of the Fund, including, but not limited to, opt-out notices and proof-of-claim forms. For avoidance of doubt, upon and after the effective date of any termination of this Agreement, the Custodian shall have no responsibility to so transmit any information under this Section 4.9.

SECTION 4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the extent possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties, and to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian’s performance of such obligations. At the Fund’s election, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Fund has not been made whole for any such loss, damage, cost, expense, liability or claim.

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SECTION 4.11 TAX LAW. The Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on the Fund or the Custodian as custodian of the Fund by the tax law of the United States or of any state or political subdivision thereof. It shall be the responsibility of the Fund to notify the Custodian of the obligations imposed on the Fund or the Custodian as custodian of the Fund by the tax law of countries other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist the Fund with respect to any claim for exemption or refund under the tax law of countries for which the Fund has provided such information.

SECTION 4.12. LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth with respect to sub-custodians generally in the Agreement and, regardless of whether assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign Securities System, the Custodian shall not be liable for any loss, damage, cost, expense, liability or claim resulting from nationalization, expropriation, currency restrictions, or acts of war or terrorism, or any other loss where the Sub-Custodian has otherwise acted with reasonable care.

SECTION 5. PAYMENTS FOR SALES OF SHARES.

The Custodian shall receive from the distributor for the Shares or from the Transfer Agent and deposit into the Fund’s account such payments as are received for Shares thereof issued or sold from time to time by the Fund. The Custodian will provide timely notification to the Fund and the Transfer Agent of any receipt by it of payments for Shares of the Fund.

SECTION 6. PROPER INSTRUCTIONS.

Proper Instructions, which may also be standing instructions, as used throughout this Agreement, shall mean instructions received by the Custodian from the Fund and signed by any two Authorized Persons (as defined below). Such instructions may be in writing signed by the Authorized Persons or may be in a tested communication or in a communication utilizing access codes effected between electro-mechanical or electronic devices or may be by such other means and utilizing such intermediary systems and utilities as may be agreed to from time to time by the Custodian and the persons giving such instructions, provided that the Fund has followed any security procedures agreed to from time to time by the Fund and the Custodian, including, but not limited to, the security procedures selected by the Fund in the Funds Transfer Addendum to this Agreement, the terms of which are hereby agreed to. Oral instructions will be considered Proper Instructions if the Custodian reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved. The Fund shall cause all oral instructions to be confirmed in writing and signed by two Authorized Persons. For purposes of this Section, Proper Instructions shall include instructions received by the Custodian pursuant to any multi-party agreement which requires a segregated asset account in accordance with Section 2.9 of this Agreement. The Fund or the Fund’s investment manager shall cause its duly authorized officer to certify to the Custodian in writing the names and specimen signatures of persons authorized to give Proper Instructions (“Authorized Persons”) in Schedule D attached hereto. The Custodian shall be entitled to rely upon the identity and authority of such persons until it receives notice from the Fund to the contrary.

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SECTION 7. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY.

The Custodian may in its discretion, without express authority from the Fund:

1) make payments to itself or others for minor expenses of handling securities or other similar items relating to its duties under this Agreement, provided that all such payments shall be accounted for and reported to the Fund;

2) surrender securities in temporary form for securities in definitive form;

3) endorse for collection, in the name of the Fund, checks, drafts and other negotiable instruments; and

4) in general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and property of the Fund except as otherwise directed by the Board.

SECTION 8. EVIDENCE OF AUTHORITY.

The Custodian shall be protected in acting upon any instructions, notice, request, consent, certificate or other instrument or paper believed by it to be genuine and to have been properly executed by or on behalf of the Fund. The Custodian may receive and accept a copy of a resolution of the Board, certified by the Secretary or an Assistant Secretary of the Fund (“Certified Resolution”), as conclusive evidence (a) of the authority of any person to act in accordance with such resolution or (b) of any determination or of any action by the Board as described in such resolution, and such resolution may be considered as in full force and effect until receipt by the Custodian of written notice to the contrary.

SECTION 9. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF NET ASSET VALUE AND NET INCOME.

The Custodian shall cooperate with and supply necessary information to the entity or entities appointed by the Board to keep the books of account of the Fund or, if directed in writing to do so by the Fund, shall itself keep such books of account. The Fund acknowledges and agrees that, with respect to investments maintained with the Underlying Transfer Agent, the Underlying Transfer Agent is the sole source of information on the number of shares of a fund held by it on behalf of the Fund and that the Custodian has the right to rely on holdings information furnished by the Underlying Transfer Agent to the Custodian in performing its duties under this Agreement, including without limitation, the duties set forth in this Section 9 and in Section 10 hereof; provided, however, that the Custodian shall be obligated to reconcile information as to purchases and sales of Underlying Shares contained in trade instructions and confirmations received by the Custodian and to report promptly any discrepancies to the Underlying Transfer Agent.

SECTION 10. RECORDS.

The Custodian shall create and maintain all records relating to its activities and obligations under this Agreement in such manner as will meet the obligations of the Fund under the 1940 Act, including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund and shall at all times during the regular business hours of the Custodian be open for

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inspection by duly authorized officers, employees or agents of the Fund and employees and agents of the SEC. The Custodian shall, at the Fund’s request, supply the Fund with a tabulation of securities owned by the Fund and held by the Custodian and shall, when requested to do so by the Fund and for such compensation as shall be agreed upon between the Fund and the Custodian, include certificate numbers in such tabulations.

SECTION 11. INTENTIONALLY OMITTED.

SECTION 12. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS.

The Custodian shall provide the Fund, at such times as the Fund may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding securities, futures contracts and options on futures contracts, including securities deposited and/or maintained in a U.S. Securities System or a Foreign Securities System (either, a “Securities System”), relating to the services provided by the Custodian under this Agreement; such reports, shall be of sufficient scope and in sufficient detail, as may reasonably be required by the Fund to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are no such inadequacies, the reports shall so state.

SECTION 13. COMPENSATION OF CUSTODIAN.

The Custodian shall be entitled to reasonable compensation for its services and expenses as Custodian, as agreed upon from time to time between the Fund and the Custodian.

SECTION 14. RESPONSIBILITY OF CUSTODIAN.

So long as and to the extent that it is in the exercise of reasonable care, the Custodian shall not be responsible for the title, validity or genuineness of any property or evidence of title thereto received by it or delivered by it pursuant to this Agreement and shall be held harmless in acting upon any notice, request, consent, certificate or other instrument reasonably believed by it to be genuine and to be signed by the proper party or parties, including any futures commission merchant acting pursuant to the terms of a three-party futures or options agreement. The Custodian shall be held to the exercise of reasonable care in carrying out the provisions of this Agreement, but shall be kept indemnified by and shall be without liability to the Fund for any action taken or omitted by it in good faith without negligence, including, without limitation, acting in accordance with any Proper Instruction. It shall be entitled to rely on and may act upon advice of counsel (who may be counsel for the Fund) on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice. The Custodian shall be without liability to the Fund for any loss, liability, claim or expense resulting from or caused by anything that is part of Country Risk (as defined in Section 3 hereof), including without limitation nationalization, expropriation, currency restrictions, insolvency of a Foreign Sub-Custodian, acts of war, revolution, riots or terrorism.

Except as may arise from the Custodian’s own negligence or willful misconduct or the negligence or willful misconduct of a sub-custodian or agent, the Custodian shall be without liability to the Fund for any loss, liability, claim or expense resulting from or caused by; (i) events or circumstances beyond the reasonable control of the Custodian or any sub-custodian or Securities System or any agent or nominee of any of the foregoing, including, without limitation, the interruption, suspension or restriction of trading on or the closure of any securities market, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, natural disasters, or other similar events or acts; (ii) errors by the Fund or its duly-authorized

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investment manager or investment advisor in their instructions to the Custodian provided such instructions have been in accordance with this Agreement; (iii) the insolvency of or acts or omissions by a Securities System; (iv) any delay or failure of any broker, agent or intermediary, central bank or other commercially prevalent payment or clearing system to deliver to the Custodian’s sub-custodian or agent securities purchased or in the remittance or payment made in connection with securities sold; (v) any delay or failure of any company, corporation, or other body in charge of registering or transferring securities in the name of the Custodian, the Fund, the Custodian’s sub-custodians, nominees or agents or any consequential losses arising out of such delay or failure to transfer such securities including non-receipt of bonus, dividends and rights and other accretions or benefits; (vi) delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security or Securities System; and (vii) any provision of any present or future law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction. The Custodian shall be liable for the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth with respect to sub-custodians generally in this Agreement.

If the Fund requires the Custodian to take any action with respect to securities, which action involves the payment of money or which action may, in the opinion of the Custodian, result in the Custodian or its nominee assigned to the Fund being liable for the payment of money or incurring liability of some other form, the Fund, as a prerequisite to requiring the Custodian to take such action, shall provide indemnity to the Custodian in an amount and form satisfactory to it.

If the Custodian, its affiliates, subsidiaries or agents advances cash or securities for any purpose (including but not limited to securities settlements, foreign exchange contracts and assumed settlement), or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee’s own negligent action, negligent failure to act or willful misconduct, or if the Fund fails to compensate the Custodian pursuant to Section 13 hereof, any property at any time held for the account of the Fund shall be security therefor and should the Fund fail to repay the Custodian promptly, the Custodian shall be entitled to utilize available cash and to dispose of the Fund’s assets to the extent necessary to obtain reimbursement.

In no event shall the Custodian be liable for indirect, special or consequential damages.

SECTION 15. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT.

This Agreement shall become effective as of its execution, shall continue in full force and effect until terminated as hereinafter provided, may be amended at any time by mutual agreement of the parties hereto and may be terminated by either party by an instrument in writing delivered or mailed, postage prepaid to the other party, such termination to take effect not sooner than sixty (60) days after the date of such delivery or mailing; provided, however, that the Fund shall not amend or terminate this Agreement in contravention of any applicable federal or state regulations, or any provision of the Fund’s Articles of Incorporation, and further provided, that the Fund may at any time by action of its Board (i) substitute another bank or trust company for the Custodian by giving notice as described above to the Custodian, or (ii) immediately terminate this Agreement in the event of the appointment of a conservator or receiver for the Custodian by the Comptroller of the Currency or upon the happening of a like event at the direction of an appropriate regulatory agency or court of competent jurisdiction.

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Upon termination of the Agreement, the Fund shall pay to the Custodian such compensation as may be due as of the date of such termination and shall likewise reimburse the Custodian for its costs, expenses and disbursements. The provisions of Sections 4.11, 13 and 14 of this Agreement shall survive termination of this Agreement for any reason.

SECTION 16. SUCCESSOR CUSTODIAN.

If a successor custodian for the Fund shall be appointed by the Board, the Custodian shall, upon termination, deliver to such successor custodian at the office of the Custodian, duly endorsed and in the form for transfer, all securities of the Fund then held by it hereunder and shall transfer to an account of the successor custodian all of the securities of the Fund held in a Securities System or at the Underlying Transfer Agent.

If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of a Certified Resolution, deliver at the office of the Custodian and transfer such securities, funds and other properties in accordance with such resolution. Unless so directed by the Certified Resolution, in no event shall the Custodian deliver the securities, funds and other properties to the Fund.

In the event that no written order designating a successor custodian or Certified Resolution shall have been delivered to the Custodian on or before the date when such termination shall become effective, then the Custodian shall have the right to deliver to a bank or trust company, which is a “bank” as defined in the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of its own selection, having an aggregate capital, surplus, and undivided profits, as shown by its last published report, of not less than $25,000,000, all securities, funds and other properties held by the Custodian hereunder and all instruments held by the Custodian relative thereto and all other property held by it under this Agreement on behalf of the Fund, and to transfer to an account of such successor custodian all of the Fund’s securities held in any Securities System or at the Underlying Transfer Agent. Thereafter, such bank or trust company shall be the successor of the Custodian under this Agreement.

In the event that securities, funds and other properties remain in the possession of the Custodian after the date of termination hereof owing to failure of the Fund to procure the Certified Resolution to appoint a successor custodian, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian retains possession of such securities, funds and other properties and the provisions of this Agreement relating to the duties and obligations of the Custodian shall remain in full force and effect.

SECTION 17. INTERPRETIVE AND ADDITIONAL PROVISIONS.

In connection with the operation of this Agreement, the Custodian and the Fund may from time to time agree on such provisions interpretive of or in addition to the provisions of this Agreement as may in their joint opinion be consistent with the general tenor of this Agreement. Any such interpretive or additional provisions shall be in a writing signed by both parties and shall be annexed hereto, provided that no such interpretive or additional provisions shall contravene any applicable federal or state regulations or any provision of the Fund’s Articles of Incorporation. No interpretive or additional provisions made as provided in the preceding sentence shall be deemed to be an amendment of this Agreement.

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SECTION 18. MASSACHUSETTS LAW TO APPLY.

This Agreement shall be construed and the provisions thereof interpreted under and in accordance with laws of The Commonwealth of Massachusetts.

SECTION 19. ASSIGNMENT.

This Agreement may not be assigned by (a) the Fund without the written consent of the Custodian or (b) by the Custodian without the written consent of the Fund.

SECTION 20. PRIOR AGREEMENTS.

This Agreement supersedes and terminates, as of the date hereof, all prior Agreements between the Fund and the Custodian relating to the custody of the Fund’s assets.

SECTION 21. NOTICES.

Any notice, instruction or other instrument required to be given hereunder may be delivered in person to the offices of the parties as set forth herein during normal business hours or delivered prepaid registered mail or by telex, cable or telecopy to the parties at the following addresses or such other addresses as may be notified by any party from time to time.

To the Fund:	CM FINANCE INC
	375 Park Avenue, 33rd Floor
	New York, NY 10152
	Attention:
	Telephone:
	Facsimile:
To the Custodian:	STATE STREET BANK AND TRUST COMPANY
	State Street Financial Center
	One Lincoln Street
	Boston, MA 02111-2900
	Attention: Bhagesh Malde, Senior Vice President
	Telephone: (617) 664-4112

Such notice, instruction or other instrument shall be deemed to have been served in the case of a registered letter at the expiration of five business days after posting, in the case of cable twenty-four hours after dispatch and, in the case of telex, immediately on dispatch and if delivered outside normal business hours it shall be deemed to have been received at the next time after delivery when normal business hours commence and in the case of cable, telex or telecopy on the business day after the receipt thereof. Evidence that the notice was properly addressed, stamped and put into the post shall be conclusive evidence of posting.

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SECTION 22. COUNTERPARTS.

This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts taken together shall constitute one and the same Agreement.

SECTION 23. SEVERABILITY.

Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision or provisions of this Agreement shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

SECTION 24. CONFIDENTIALITY.

The parties hereto agree that each shall treat confidentially all information provided by each party to the other party regarding its business and operations. All confidential information provided by a party hereto shall be used by any other party hereto solely for the purpose of rendering or receiving services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party. The foregoing shall not be applicable to any information (i) that is publicly available when provided or thereafter becomes publicly available, other than through a breach of this Agreement, (ii) that is independently derived by any party hereto without the use of any information provided by the other party hereto in connection with this Agreement, (iii) that is required in any legal or regulatory proceeding, investigation, audit, examination, subpoena, civil investigative demand or other similar process, or by operation of law or regulation, or (iv) where the party seeking to disclose has received the prior written consent of the party providing the information, which consent shall not be unreasonably withheld. Notwithstanding anything herein to the contrary, the Custodian and its affiliates may report and use nonpublic portfolio holdings information of its clients, including a Fund, on an aggregated basis with all or substantially all other client information and without specific reference to any Fund.

SECTION 25. REPRODUCTION OF DOCUMENTS.

This Agreement and all schedules, addenda, exhibits, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto all/each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

SECTION 26. REMOTE ACCESS SERVICES ADDENDUM.

The Custodian and the Fund agree to be bound by the terms of the Remote Access Services Addendum attached hereto.

SECTION 27. REGULATION GG.

The Fund hereby represents and warrants that it does not engage in an “Internet gambling business,” as such term is defined in Section 233.2(r) of Federal Reserve Regulation GG (12 CFR 233) (“Regulation GG”). The Fund hereby covenants and agrees that it shall not engage in an Internet gambling business. In accordance with Regulation GG, the Fund is hereby notified that “restricted

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transactions,” as such term is defined in Section 233.2(y) of Regulation GG, are prohibited in any dealings with the Custodian pursuant to this Agreement or otherwise between or among any party hereto.

SECTION 28. DATA PRIVACY.

The Custodian will implement and maintain a written information security program that contains appropriate security measures to safeguard the personal information of the Fund’s shareholders, employees, directors and/or officers that the Custodian receives, stores, maintains, processes or otherwise accesses in connection with the provision of services hereunder. For these purposes, “personal information” shall mean (i) an individual’s name (first initial and last name or first name and last name), address or telephone number plus (a) social security number, (b) drivers license number, (c) state identification card number, (d) debit or credit card number, (e) financial account number or (f) personal identification number or password that would permit access to a person’s account or (ii) any combination of the foregoing that would allow a person to log onto or access an individual’s account. Notwithstanding the foregoing “personal information” shall not include information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public.

SECTION 29. LOAN SERVICES ADDENDUM.

In the event the Fund directs Custodian in writing to perform loan services, Custodian and the Fund hereby agree to be bound by the terms of the Loan Services Addendum attached hereto and the Fund shall reimburse Custodian for its fees and expenses related thereto as agreed upon from time to time in writing by the Fund and Custodian.

SECTION 30. SHAREHOLDER COMMUNICATIONS ELECTION.

SEC Rule 14b-2 requires banks which hold securities for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, the Custodian needs the Fund to indicate whether it authorizes the Custodian to provide the Fund’s name, address, and share position to requesting companies whose securities the Fund owns. If the Fund tells the Custodian “no”, the Custodian will not provide this information to requesting companies. If the Fund tells the Custodian “yes” or does not check either “yes” or “no” below, the Custodian is required by the rule to treat the Fund as consenting to disclosure of this information for all securities owned by the Fund or any funds or accounts established by the Fund. For the Fund’s protection, the Rule prohibits the requesting company from using the Fund’s name and address for any purpose other than corporate communications. Please indicate below whether the Fund consents or objects by checking one of the alternatives below.

YES [    ]	The Custodian is authorized to release the Fund’s name, address, and share positions.
NO [X]	The Custodian is not authorized to release the Fund’s name, address, and share positions.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and behalf by its duly authorized representative under seal as of the date first above-written.

CM FINANCE INC
By:
	Name:
	Title:
STATE STREET BANK AND TRUST COMPANY
By:
Name:	George Sullivan
Title:	Executive Vice President

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SCHEDULE A

SEE ATTACHED.

24

SCHEDULE B

SEE ATTACHED.

25

SCHEDULE C

SEE ATTACHED.

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SCHEDULE D

CERTIFICATE OF AUTHORIZED PERSONS

The undersigned hereby certifies that he/she is the duly elected and acting                      of CM FINANCE INC (the “Client”), and further certifies that the following officers or employees of the Client have been duly authorized to deliver instructions to the Custodian pursuant to the Custodian Agreement between the Client and Custodian dated November     , 2013, and that the signatures appearing opposite their names are true and correct:

Name	Title	Signature
Name	Title	Signature
Name	Title	Signature
Name	Title	Signature
Name	Title	Signature
Name	Title	Signature
Name	Title	Signature

This certificate supersedes any certificate of Authorized Persons you may currently have on file.

By:

Title:

Date:

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EX-99.K.11

Exhibit (k)(11)

AMENDED AND RESTATED INDENTURE (this Indenture), dated as of December 4, 2013, between CM FINANCE SPV LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the Issuer) and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as trustee (herein, together with its permitted successors and assigns in the trusts hereunder, the Trustee) and, solely as expressly specified herein, in its individual capacity (the Bank).

This Indenture amends, restates and supersedes that certain Indenture, dated as of May 23, 2013 (as supplemented by the First Supplemental Indenture, dated as of June 6, 2013, between the Issuer and the Trustee), between the Issuer, the Trustee and the Bank.

PRELIMINARY STATEMENT

The Issuer is duly authorized to execute and deliver this Indenture to provide for the Notes issuable as provided in this Indenture. Except as otherwise provided herein, all covenants and agreements made by the Issuer herein are for the benefit and security of the Secured Parties. The Issuer is entering into this Indenture, and the Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

All things necessary to make this Indenture a valid agreement of the Issuer in accordance with the agreement’s terms have been done.

GRANTING CLAUSES

The Issuer hereby Grants to the Trustee, for the benefit and security of the Holders of the Notes, the Trustee and the Collateral Administrator (collectively, the Secured Parties) (or, where particular Secured Parties are specified as the beneficiaries of such Grant with respect to items of personal property identified in any of the sub-clauses below, for the benefit and security of such Secured Parties only), except as expressly set forth below, all of its right, title and interest in, to and under, in each case, whether now owned or existing, or hereafter acquired or arising, (a) the Portfolio Assets as of the Closing Date which the Issuer causes to be Delivered to the Trustee (directly or through an intermediary or bailee, including the Custodian) herewith and all payments thereon or with respect thereto, and all Portfolio Assets which are Delivered to the Trustee (directly or through an intermediary or bailee, including the Custodian) in the future pursuant to the terms hereof and all payments thereon or with respect thereto, (b) each of the Accounts (excluding any Class A-R Prepayment Account), and any Eligible Investments purchased with funds on deposit in any of the Accounts (excluding any Class A-R Prepayment Account), and all income from the investment of funds therein and all other property standing to the credit of each such Account, (c) the Collateral Management Agreement as set forth in Article 15 hereof, the Collateral Administration Agreement, each Placement Agency Agreement, each Subscription Agreement, the Revolving Credit Note Agreement, the Issuer Contribution Agreement, the Issuer Account Control Agreement, the Master Participation and Assignment Agreement and the Side Letter Security Agreement, (d) all Cash delivered to the Trustee (or the Custodian) for the

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benefit of the Secured Parties, (e) for the exclusive benefit of each Class A-R Noteholder, the Issuer’s interest in such Class A-R Noteholder’s Class A-R Prepayment Account, (f) all accounts, chattel paper, Deposit Accounts, general intangibles, instruments and investment property, and all letter-of-credit rights and other supporting obligations relating to the foregoing (in each case as defined in the UCC), (g) any other property otherwise delivered to the Trustee (directly or through an intermediary or bailee, including the Custodian) by or on behalf of the Issuer (including any other securities or investments not listed above and whether or not constituting Portfolio Assets or Eligible Investments) and (h) all proceeds with respect to the foregoing; provided that such Grants shall not include any Excepted Property (the assets referred to in (a) through (h), excluding the Excepted Property, are collectively referred to as the Collateral).

The above Grant of Collateral is made in favor of the Trustee to hold in trust to secure the Notes and certain other amounts payable by the Issuer as described herein. Except as set forth in the Priority of Payments and Article 13 of this Indenture, the Notes are secured by the Grant equally and ratably without prejudice, priority or distinction between any Note and any other Note by reason of difference in time of issuance or otherwise; provided that, amounts on deposit in a Class A-R Prepayment Account shall be available only for distribution to the Class A-R Noteholders pursuant to the Revolving Credit Note Agreement and shall not be available to the Issuer to pay amounts owed to any Secured Parties other than the Class A-R Noteholders. The Grant is made to secure, in accordance with the priorities set forth in the Priority of Payments and Article 13 of this Indenture, (i) the payment of all amounts due on the Notes in accordance with their terms, (ii) the payment of all other sums payable under this Indenture, (iii) the payment of amounts owing by the Issuer under the Collateral Administration Agreement and (iv) compliance with the provisions of this Indenture, in each case as provided in this Indenture (collectively, the Secured Obligations). The foregoing Grant shall, for the purpose of determining the property subject to the lien of this Indenture, be deemed to include any interests in any securities and any investments granted to the Trustee by or on behalf of the Issuer, whether or not such securities or investments satisfy the Asset Eligibility Criteria or other criteria set forth in the definitions of Portfolio Asset or Eligible Investments, as the case may be.

The Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions hereof, and agrees to perform the duties herein in accordance with the terms hereof.

1. DEFINITIONS

1.1 Definitions

Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms. Except as otherwise specified herein or as the context may otherwise require: (i)

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references to an agreement or other document are to it as amended, supplemented, restated and otherwise modified from time to time and to any successor document (whether or not already so stated); (ii) references to a statute, regulation or other government rule are to it as amended from time to time and, as applicable, are to corresponding provisions of successor governmental rules (whether or not already so stated); (iii) the word “including” and correlative words shall be deemed to be followed by the phrase “without limitation” unless actually followed by such phrase or a phrase of like import; (iv) the word “or” is always used inclusively herein (for example, the phrase “A or B” means “A or B or both,” not “either A or B but not both”), unless used in an “either … or” construction; (v) references to a Person are references to such Person’s successors and assigns (whether or not already so stated); (vi) all references in this Indenture to designated “Articles”, “Sections”, “sub-Sections”, other subdivisions, Schedules and Exhibits are to the designated articles, sections, sub-sections, other subdivisions, schedules and exhibits of this Indenture; and (vii) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular article, section, sub-section or other subdivision.

Acceleration Event: The meaning specified in Section 5.4(a).

Accounts: (i) The Payment Account, (ii) the Collection Account, (iii) the Expense Account, (iv) the Delayed Draw/Committed Proceeds Account, (v) the Custodial Account and (vi) each Class A-R Prepayment Account.

Accredited Investor: The meaning set forth in Rule 501(a) of Regulation D of the Securities Act.

Act and Act of Holders: The meanings specified in Section 14.2(a).

Adjusted Principal Balance: With respect to any Portfolio Asset on any date of determination, the product of (i) the Principal Balance of such Portfolio Asset as of such date of determination and (ii) the Purchase Price of such Portfolio Asset.

Administrative Expenses: The fees, expenses (including indemnities) and other amounts due or accrued and payable by the Issuer from funds standing to the credit of the Expense Account in the following order by the Issuer:

first, on a pro rata basis, (i) to the Trustee pursuant to Section 6.7 and the other provisions of this Indenture and (ii) to the Revolving Credit Note Agent pursuant to the Revolving Credit Note Agreement,

second, to the Collateral Administrator and Collateral Manager pursuant to the Collateral Administration Agreement and Collateral Management Agreement, respectively,

third, on a pro rata basis, to any other Person in respect of any other fees or expenses permitted under this Indenture and the documents delivered pursuant to

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or in connection with this Indenture (including all legal and other fees and expenses incurred in connection with the purchase or sale of any Portfolio Assets and any other expenses incurred in connection with the Portfolio Assets) and the Notes, and

fourth, on a pro rata basis, indemnities payable to any Person pursuant to any Transaction Document;

provided that Administrative Expenses shall not include (a) any amounts due or accrued with respect to the actions taken on or in connection with the Closing Date or (b) amounts payable in respect of the Notes.

Administrator: Appleby Trust (Cayman) Ltd. and any successor thereto.

Affected Bank: A “bank” for purposes of Section 881 of the Code or an entity affiliated with such a bank that is neither (x) a United States Person nor (y) entitled to the benefits of an income tax treaty with the United States under which withholding taxes on interest payments made by obligors resident in the United States to such bank are reduced to 0%.

Affiliate: With respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is an Officer or employee (a) of such Person, (b) of any subsidiary or parent company of such Person or (c) of any Person described in clause (i) above. For the purposes of this definition, “control” of a Person shall mean the power, direct or indirect, (x) to vote more than 50% of the securities having ordinary voting power for the election of directors of such Persons or (y) to direct or cause the direction of the management and policies of such Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

Agent Members: Members of, or participants in, DTC Euroclear or Clearstream.

Aggregate Outstanding Amount: With respect to any of the Notes of any Class as of any date, the aggregate unpaid principal amount of such Notes Outstanding on such date (which, in the case of the Class A-R Notes, shall be the Outstanding Class A-R Funded Amount).

Aggregate Principal Balance: When used with respect to all or a portion of the Portfolio Assets or the Collateral, the sum of the Principal Balances of all or of such portion of the Portfolio Assets or Collateral, respectively.

Amendment and Restatement Date: December 4, 2013.

Asset-backed Commercial Paper: Commercial paper or other short-term obligations of a program that primarily issues externally rated commercial paper backed by assets or exposures held in a bankruptcy-remote, special purpose entity.

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Asset Eligibility Criteria: Criteria satisfied in respect of a Portfolio Asset or prospective Portfolio Asset on the trade date for the acquisition thereof (the Portfolio Asset Trade Date) if:

(a) the obligation is a Loan (or a Participation Interest therein) or a Bond;

(b) the obligation is denominated in USD and is neither convertible by the related Portfolio Asset Obligor thereon or thereof into, nor payable in, any other currency;

(c) the obligation constitutes a legal, valid, binding and enforceable obligation of each related Portfolio Asset Obligor, enforceable against such person in accordance with its terms;

(d) the obligation is not a lease;

(e) the obligation provides for a fixed amount of principal payable at no less than par, in cash, no later than its stated maturity;

(f) the obligation is in the form of, and is treated as, indebtedness for U.S. Federal income tax purposes;

(g) no principal, interest, fee or other amount owing on such obligation that became payable prior to the Portfolio Asset Trade Date remains unpaid;

(h) the obligation is not a Defaulted Obligation or Margin Stock;

(i) the Issuer is entitled to receive all payments on such obligation free of U.S. Federal or foreign withholding tax;

(j) the obligation is not a Bridge Security, Structured Finance Obligation or Synthetic Security;

(k) the obligation is not, by its terms, convertible into or exchangeable for an Equity Security at any time over its life, provided that the obligation may have attached warrants the aggregate value of which does not exceed 5% of the purchase price of such obligation (which valuation will be based on the reasonable business judgment of the Collateral Manager, without regard to any Portfolio Asset Obligor’s valuation of such warrants);

(l) the obligation does not require any future advances to be made to any Portfolio Asset Obligor on or after the Portfolio Asset Trade Date; provided that this claim shall be deemed not to apply to any Delayed-Draw Loan if the undrawn portion of such Delayed-Draw Loan is deposited in the Delayed-Draw Committed Proceeds Account; and

(m) the obligation is Registered.

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Authenticating Agent: The Person designated by the Trustee to authenticate the Notes on behalf of the Trustee pursuant to Section 6.14 hereof.

Authorized Representative: With respect to the Issuer, any Officer or any other Person who is authorized to act for the Issuer in matters relating to, and binding upon, the Issuer; provided that the Collateral Manager is not an Authorized Officer of the Issuer. With respect to the Collateral Manager, any Officer, employee, member or agent of the Collateral Manager who is authorized to act for the Collateral Manager in matters relating to, and binding upon, the Collateral Manager with respect to the subject matter of the request, certificate or order in question. With respect to the Collateral Administrator, any Officer, employee, partner or agent of the Collateral Administrator who is authorized to act for the Collateral Administrator in matters relating to, and binding upon, the Collateral Administrator with respect to the subject matter of the request, certificate or order in question. With respect to the Trustee or any other bank or trust company acting as trustee of an express trust or as custodian, a Trust Officer. With respect to any Authenticating Agent, any Officer of such Authenticating Agent who is authorized to authenticate the Notes. 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.

Authorizing Resolution: With respect to (i) the Issuer, any action or resolution taken by the Board of Directors or the Sole Shareholder within the powers vested to it pursuant to the Constitutive Documents of the Issuer and (ii) the Sole Shareholder, any action taken by its manager, CM Investment Partners, LP, any Officer of, or other Person authorized by, such manager or any Officer of the Sole Shareholder, within the powers vested to it pursuant to the Constitutive Documents of the Sole Shareholder.

Balance: On any date, with respect to Cash or Eligible Investments in any account, the aggregate of the (i) current balance of Cash, demand deposits, time deposits, bankers’ acceptances and certificates of deposit; (ii) principal amount of any interest-bearing Eligible Investments; and (iii) the accreted amount (but not greater than the face amount) of any non-interest-bearing Eligible Investments other than Cash.

Bank: State Street Bank and Trust Company, in its individual capacity and not as Trustee, or any successor thereto.

Bankruptcy Law: The federal Bankruptcy Code, Title 11 of the United States Code, Part V of the Companies Law (2012 Revision) of the Cayman Islands, the Bankruptcy Law (1997 Revision) of the Cayman Islands, the Foreign Bankruptcy Proceedings (International Cooperation) Rules 2008 of the Cayman Islands and the Companies Winding Up Rules 2008 of the Cayman Islands, each as amended from time to time.

Benefit Plan Investor: An employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to Part 4 of Title I of ERISA, a plan to which Section 4975 of the Code applies or an entity whose underlying assets include “plan assets” by reason of such an employee benefit plan’s or a plan’s investment in such entity, in each case within the meaning of the Plan Asset Regulation or otherwise.

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Board of Directors: With respect to the Issuer, the directors of the Issuer duly appointed by the Sole Shareholder of the Issuer or the board of directors of the Issuer in accordance with the Issuer’s Constitutive Documents.

Bond: A debt security (that is not a loan) that is issued by a corporation, limited liability company, partnership or trust.

Borrowing: The meaning specified for such term in the Revolving Credit Note Agreement.

Borrowing Request: The meaning specified for such term in the Revolving Credit Note Agreement.

Bridge Security: Any obligation or security that (x) is a debt obligation incurred in connection with a merger, acquisition, consolidation, sale of all or substantially all of the assets of a Person, restructuring or similar transaction and (y), which debt obligation by its terms is required to be repaid within one year of the incurrence thereof with proceeds from additional borrowings or other refinancings (other than any additional borrowing or refinancing if one or more financial institutions shall have provided the obligor on such debt obligation with a binding written commitment to provide the same) (it being understood that any such obligation or security that has a nominal maturity date of one year or less from the incurrence thereof but has a term-out or other provision whereby (automatically or at the sole option of the obligor thereof) the maturity of the indebtedness thereunder may be extended to a later date is not a Bridge Security).

Business Day: A day on which commercial banks and foreign exchange markets settle payments in New York, Boston and London and that is also a TARGET Settlement Day, other than a Saturday, Sunday or other day that is a legal holiday in the city in which the Corporate Trust Office is located or on which the New York Stock Exchange or banks are authorized or obligated by law or executive order to close in New York, New York or Boston, Massachusetts.

Cash: Such funds denominated in currency of the United States of America as at the time shall be legal tender for payment of all public and private debts in the United States of America, including funds standing to the credit of an Account.

Certificate of Authentication: The meaning specified in Section 2.1.

Certificated Note: A Note issued in the form of a definitive, fully registered note without coupons substantially in the applicable form attached as Exhibit A2 (in the case of a Class A Note) or Exhibit A3 (in the case of a Class A-R Note) which shall be registered in the name of the owner thereof, duly executed by the Issuer and authenticated by the Trustee as herein provided.

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Certificated Security: The meaning specified in Section 8-102(a)(4) of the UCC.

Class: Each of the Class A Notes and the Class A-R Notes.

Class A Note Register: The meaning specified in Section 2.5(a).

Class A Note Registrar: The meaning specified in Section 2.5(a).

Class A Noteholder: With respect to any Class A Note, the Person in whose name such Class A Note is registered in the Class A Note Register.

Class A Notes: The Class A Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

Class A Placement Agency Agreement: The Placement Agency Agreement, dated as of May 23, 2013, between the Issuer and the Placement Agent.

Class A-R Commitment Amount: The meaning specified in the Revolving Credit Note Agreement.

Class A-R Note Register: The meaning specified in Section 2.5(a).

Class A-R Note Registrar: The meaning specified in Section 2.5(a).

Class A-R Noteholder: With respect to any Class A-R Note, the Person in whose name such Class A-R Note is registered in the Class A-R Note Register, each of which is required to be a party to the Revolving Credit Note Agreement.

Class A-R Notes: The Class A-R Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

Class A-R Placement Agency Agreement: The Placement Agency Agreement, dated as of December 4, 2013, between the Issuer and the Placement Agent.

Class A-R Prepayment Account: The meaning specified in the Revolving Credit Note Agreement.

Clearing Agency: An organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

Clearing Corporation: (i) Clearstream, (ii) DTC, (iii) Euroclear and (iv) any entity included within the meaning of “clearing corporation” under Section 8-102(a)(5) of the UCC.

Clearing Corporation Security: Securities which are in the custody of or maintained on the books of a Clearing Corporation or a nominee subject to the control of a Clearing Corporation and, if they are Certificated Securities in registered form, properly endorsed to or registered in the name of the Clearing Corporation or such nominee.

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Clearstream: Clearstream Banking, société anonyme, a corporation organized under the laws of the Duchy of Luxembourg (formerly known as Cedelbank, société anonyme).

Closing Date: May 23, 2013.

Code: The U.S. Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder.

Collateral: The meaning assigned in the Granting Clauses hereof.

Collateral Administration Agreement: An agreement dated as of the Closing Date relating to the administration of the Collateral among the Issuer, the Collateral Manager and the Collateral Administrator.

Collateral Administrator: State Street Bank and Trust Company, acting as collateral administrator under the Collateral Administration Agreement, and any successor thereto.

Collateral Management Agreement: The agreement dated as of the Closing Date, between the Issuer and the Collateral Manager relating to the management of the Portfolio Assets and the other Collateral by the Collateral Manager on behalf of the Issuer.

Collateral Manager: CM Investment Partners, L.P., a limited partnership formed under the laws of the State of Delaware.

Collection Account: The account established pursuant to Section 10.2, which consists of the Principal Collection Subaccount and the Interest Collection Subaccount.

Commitment Amount: With respect to any Portfolio Asset that is a Delayed-Draw Loan as of any date of determination, the maximum outstanding principal amount of such Portfolio Asset that a registered holder of the amount of such Portfolio Asset held by the Issuer would on such date be obligated to fund (including all amounts previously funded and outstanding, whether or not such amounts, if repaid, may be reborrowed).

Commitment Termination Date: The meaning specified for such term in the Revolving Credit Note Agreement.

Committed Proceeds Asset: A Portfolio Asset that is the subject of a Committed Proceeds Transaction.

Committed Proceeds Transaction: Any transaction for the acquisition of a Portfolio Asset listed in Schedule 1 hereto with respect to which, as of the Closing Date, the Issuer has entered into a contractual commitment to acquire such Portfolio Asset but for which the settlement date of such transaction has not yet occurred.

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Confidential Information: The meaning specified in Section 14.15(b).

Constitutive Documents: With respect to (i) the Issuer, the Issuer’s Certificate of Incorporation, dated as of May 14, 2013, and Amended and Restated Memorandum of Association and Articles of Association, dated as of May 23, 2013, as they may be amended, revised or restated from time to time and (ii) the Sole Shareholder, the Sole Shareholder’s articles of organization, dated as of February 15, 2013 and as amended by the articles of amendment dated February 28, 2012, and operating agreement, dated as of March 1, 2012.

Corporate Trust Office: The principal corporate trust office of the Trustee, currently located at 200 Clarendon Street, Boston, Massachusetts 02116, Attention: Structured Trust and Analytics, or such other address as the Trustee may designate from time to time by notice to the Holders of the Notes, the Collateral Manager and the Issuer or the principal corporate trust office of any successor Trustee.

Costs of Assignment: With respect to any Portfolio Asset, the sum of (a) any costs of any purchase, exchange, sale, transfer or assignment transaction with respect to such Portfolio Asset that would be paid by a Person effecting such transaction under the terms of such Portfolio Asset or otherwise actually imposed on such Person by any applicable trustee, administrative agent, registrar, borrower or obligor incurred in connection with any such transaction with respect to such Portfolio Asset (including, without limitation, any amounts reimbursable by such Person in respect of any tax or other governmental charge incurred with respect thereto), (b) any reasonable expenses that are incurred by such Person in connection with any such transaction and (c) any reasonable administrative, legal or accounting fees, costs and expenses (including, without limitation, any fees and expenses of the trustee of or outside counsel to the Obligor) that are incurred by such Person in connection with any such transaction.

Cov-Lite Loan: An obligation, the Underlying Instruments for which do not (i) contain any financial covenants or (ii) require the Obligor thereunder to comply with any Maintenance Covenants (regardless of whether compliance with one or more Incurrence Covenants is otherwise required by such Underlying Instruments).

Current Price: On any date with respect to any Portfolio Asset, the determination by the Valuation Agent of the net cash proceeds that would be received from the sale on such date of determination of such Portfolio Asset, exclusive of accrued interest and capitalized interest and net of the related Costs of Assignment. The “Current Price” shall be (a) expressed as a percentage of par and (b) determined exclusive of accrued interest and capitalized interest.

Custodial Account: The account established pursuant to Section 10.3(b).

Custodian: The meaning specified in the first sentence of Section 3.2(a) with respect to items of collateral referred to therein, and each entity with which an Account is maintained, as the context may require, each of which shall be a Securities Intermediary.

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Daily Report: The meaning specified in Section 10.5(c).

Default: Any Event of Default or any occurrence that is, or with notice or the lapse of time or both would unless cured or waived become, an Event of Default.

Defaulted Obligation: Any Portfolio Asset as to which (a) there has occurred a default as to the payment of principal and/or interest and/or capitalized interest (without regard to any notice requirement or grace period) (provided that such default may continue for a period of up to three Business Days from the date of such default if the Collateral Manager has certified to the Trustee that the payment failure is not due to credit-related reasons), (b) such Portfolio Asset is a Participation Interest with respect to which the Selling Institution has defaulted in any respect in the performance of any of its payment obligations under the Participation Interest or (c) such Portfolio Asset is a Participation Interest in a Loan that would, if such Loan were a Portfolio Asset, constitute a “Defaulted Obligation”; provided that, in each of the cases set forth in clauses (a) through (c) above, such Portfolio Asset will only constitute a “Defaulted Obligation” for so long as such default has not been cured or waived.

Deferrable Security: A Portfolio Asset which by its terms permits the deferral and/or capitalization of payment of accrued, unpaid interest.

Delayed-Draw Loan: Any Loan with respect to which the Issuer is obligated to make or otherwise fund future term-loan advances to a borrower, but such future term-loan advances may not be paid back and reborrowed.

Delayed-Draw/Committed Proceeds Account:: The account established pursuant to Section 10.3(d).

Deliver or Delivered or Delivery: The taking of the following steps:

(i) in the case of each Certificated Security (other than a Clearing Corporation Security) and Instrument,

(a) causing the delivery of such Certificated Security or Instrument to the Custodian by registering the same in the name of the Custodian or its affiliated nominee or by endorsing the same to the Custodian or in blank;

(b) causing the Custodian to indicate continuously on its books and records that such Certificated Security or Instrument is credited to the applicable Account; and

(c) causing the Custodian to maintain continuous possession of such Certificated Security or Instrument;

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(ii) in the case of each Uncertificated Security (other than a Clearing Corporation Security),

(a) causing such Uncertificated Security to be continuously registered on the books of the issuer thereof in the name of the Custodian; and

(b) causing the Custodian to indicate continuously on its books and records that such Uncertificated Security is credited to the applicable Account;

(iii) in the case of each Clearing Corporation Security,

(a) causing the relevant Clearing Corporation to credit such Clearing Corporation Security to a securities account in the name of the Custodian, and

(b) causing the Custodian to indicate continuously on its books and records that such Clearing Corporation Security is credited to the applicable Account;

(iv) in the case of each security issued or guaranteed by the United States of America or agency or instrumentality thereof and that is maintained in book-entry records of a Federal Reserve Bank (FRB) (each such security, a Government Security),

(a) causing the creation of a Security Entitlement to such Government Security by the credit of such Government Security to a securities account in the name of the Custodian at such FRB, and

(b) causing the Custodian to indicate continuously on its books and records that such Government Security is credited to the applicable Account;

(v) in the case of each Security Entitlement with respect to a Financial Asset not governed by clauses (iii) through (iv) above,

(a) causing the relevant Securities Intermediary to indicate on its books and records that the underlying Financial Asset has been credited to the Custodian’s securities account,

(b) causing such Securities Intermediary to make entries on its books and records continuously identifying such Financial Asset as belonging to the Custodian and continuously indicating on its books and records that such Financial Asset is credited to the Custodian’s securities account, and

(c) causing the Custodian to indicate continuously on its books and records that such Security Entitlement (or all rights and property of the Custodian representing such Security Entitlement) is credited to the applicable Account;

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(vi) in the case of Cash,

(a) causing the delivery of such Cash to the Custodian,

(b) causing the Custodian to credit such Cash to the applicable Account or sub-account (which shall be a Deposit Account), and

(c) causing the Custodian to indicate continuously on its books and records that such Cash is credited to the applicable Account; and

(vii) in the case of each general intangible (including any Participation Interest),

(a) causing the filing of a Financing Statement in the office of the Recorder of Deeds of the District of Columbia, Washington, DC naming the Issuer as debtor and the Trustee as secured party and describing such Participation Interest as the collateral or indicating that the collateral includes “all assets” or “all personal property” of the Issuer (or a similar description), and

(b) causing the registration of this Indenture in the Secured Note Register of Mortgages of the Issuer at the Issuer’s registered office in the Cayman Islands.

In addition, the Collateral Manager on behalf of the Issuer will obtain any and all consents required by the Underlying Instruments relating to any general intangibles for the transfer of ownership and/or pledge of Collateral hereunder (except to the extent that the requirement for such consent is rendered ineffective under Section 9-406 of the UCC).

Deposit Account: The meaning of “deposit accounts” as defined in Section 9-102(a)(29) of the UCC, as to which the Issuer is the “customer” (within the meaning of Section 4-104(1)(e) of the UCC) of such Accounts.

Determination Date: The last day of each Monthly Period.

DIP Loan: A loan made to a debtor-in-possession pursuant to Section 364 of the U.S. Bankruptcy Code having the priority allowed by either Section 364(c) or 364(d) of the U.S. Bankruptcy Code and fully secured by senior liens.

Dollar, USD or U.S.$: Such coin or currency of the United States of America as at the time shall be legal tender for all debts, public and private.

DTC: The Depository Trust Company, its nominees, and their respective successors.

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Due Date: Each date on which any payment is due on a Portfolio Asset, Eligible Investment or other financial asset held by the Issuer in accordance with its terms.

Eligible Investment Required Ratings: (a) If such obligation or security (i) has both a long-term and a short-term credit rating from Moody’s, such ratings are “Aa3” or better (not on credit watch for possible downgrade) and “P-1” (not on credit watch for possible downgrade), respectively, (ii) has only a long-term credit rating from Moody’s, such rating is “Aaa” (not on credit watch for possible downgrade) or (iii) has only a short-term credit rating from Moody’s, such rating is “P-1” (not on credit watch for possible downgrade) and (b) “A-1” or better (or, in the absence of a short-term credit rating, a long-term credit rating of “A+” or better) from S&P.

Eligible Investments: Any Dollar investment that, at the time it is Delivered (directly or through an intermediary), (x) matures not later than the Business Day immediately preceding the Payment Date immediately following the date of Delivery thereof (or such earlier date as expressly provided herein), and (y) is one or more of the following obligations or securities:

(i) direct Registered obligations of, and Registered obligations the timely payment of principal and interest on which is fully and expressly guaranteed by, the United States of America or any agency or instrumentality of the United States of America the obligations of which are expressly backed by the full faith and credit of the United States of America;

(ii) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by (a) the Valuation Agent or (b) any depository institution or trust company incorporated under the laws of the United States of America or any State thereof (including the Bank) and subject to supervision and examination by Federal and/or State banking authorities, in each case payable within 183 days after issuance, so long as the commercial paper and/or the debt obligations of such depository institution or trust company (or, in the case of the principal depository institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing for such investment have the Eligible Investment Required Ratings;

(iii) unleveraged repurchase obligations (if treated as debt by the Issuer and the counterparty) with respect to (a) any security described in clause (i) above or (b) any other Registered security issued or guaranteed by an agency or instrumentality of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii) above or entered into with (1) the Valuation Agent or (2) an entity (acting as principal) with, or whose parent company has (in addition to a guarantee agreement with such

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entity, which guarantee agreement complies with S&P’s then-current criteria with respect to guarantees), the Eligible Investment Required Ratings;

(iv) Registered debt securities bearing interest or sold at a discount issued by (a) the Valuation Agent or (b) a corporation formed under the laws of the United States of America or any State thereof that satisfies the Eligible Investment Required Ratings at the time of such investment or contractual commitment providing for such investment;

(v) commercial paper or other short-term obligations (other than Asset-backed Commercial Paper) that (a) either (1) are issued by the Valuation Agent or (2) have the Eligible Investment Required Ratings, (b) either (1) bear interest or (2) are sold at a discount from the face amount thereof and (c) have a maturity of not more than 183 days from their date of issuance; and

(vi) money market funds that have, at all times, credit ratings of “Aaa-mf” by Moody’s and “AAAm” or “AAAm-G” by S&P, respectively;

provided that (1) Eligible Investments purchased with funds in the Collection Account shall be held until maturity except as otherwise specifically provided herein and shall include only such obligations or securities, other than those referred to in clause (vi) above, as mature (or are putable at par to the issuer thereof) no later than the Business Day prior to the next Payment Date unless such Eligible Investments are issued by the Trustee in its capacity as a banking institution, in which event such Eligible Investments may mature on such Payment Date; and (2) none of the foregoing obligations or securities shall constitute Eligible Investments if (a) such obligation or security has an “f”, “r”, “p”, “pi”, “q” or “t” subscript assigned by S&P, (b) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments, (c) payments with respect to such obligations or securities or proceeds of disposition are subject to withholding taxes by any jurisdiction and the payor is not required to make “gross-up” payments that cover the full amount of any such withholding tax on an after-tax basis, (d) such obligation or security is secured by real property, (e) such obligation or security is purchased at a price greater than 100% of the principal or face amount thereof, (f) such obligation or security is subject of a tender offer, voluntary redemption, exchange offer, conversion or other similar action, (g) in the Collateral Manager’s judgment (as certified to the Trustee in writing), such obligation or security is subject to material non-credit related risks, (h) such obligation is a Structured Finance Obligation or (i) such obligation or security is represented by a certificate of interest in a grantor trust. Eligible Investments may include, without limitation, those investments for which the Trustee or an Affiliate of the Trustee provides services and receives compensation.

Eligible Investment Income: The meaning specified in Section 2.7(a)(ii).

Enforcement Event: The meaning specified in Section 11.1(a)(iii).

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Equity Security: Any equity or other security that is not eligible for purchase by the Issuer as a Portfolio Asset.

ERISA: The United States Employee Retirement Income Security Act of 1974, as amended.

Euroclear: Euroclear Bank S.A./N.V.

Event of Default: The meaning specified in Section 5.1.

Excepted Property: The U.S.$250 transaction fee paid to the Issuer in consideration of the issuance of the Notes and the funds attributable to the issuance and allotment of the Issuer’s ordinary shares or the bank account in the Cayman Islands in which such funds are deposited (or any interest thereon).

Exchange Act: The U.S. Securities Exchange Act of 1934, as amended.

Expense Account: The account established pursuant to Section 10.3(c).

FATCA: The meaning specified in Section 2.12(b).

FATCA Compliance: Compliance with Sections 1471 through 1474 of the Code and any related provisions of law, court decisions, or administrative guidance.

Financial Asset: The meaning specified in Section 8-102(a)(9) of the UCC.

Financing Statements: The meaning specified in Section 9-102(a)(39) of the UCC.

GAAP: The meaning specified in Section 6.3(j).

Global Note: Any Regulation S Global Note or Rule 144A Global Note.

Grant or Granted: To grant, bargain, sell, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over and confirm. A Grant of Collateral, or of any other instrument, shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including, the immediate continuing right to claim for, collect, receive and receipt for principal and interest payments in respect of Collateral, and all other Cash payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

Holder: With respect to any Note, the Person whose name appears on the applicable Note Register as the registered holder of such Note.

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Incurrence Covenant: A covenant by any borrower to comply with one or more financial covenants only upon the occurrence of certain actions of the borrower, including a debt issuance, dividend payment, share purchase, merger, acquisition or divestiture.

Indebtedness: With respect to any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all guarantees by such Person of Indebtedness of others, (h) all capital lease obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.

Indenture: This instrument as originally executed and, if from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended.

Independent: As to any Person, any other Person (including, in the case of an accountant or lawyer, a firm of accountants or lawyers, and any member thereof, or an investment bank and any member thereof) who (i) does not have and is not committed to acquire any material direct or any material indirect financial interest in such Person or in any Affiliate of such Person, and (ii) is not connected with such Person as an Officer, employee, promoter, underwriter, voting trustee, partner, director or Person performing similar functions. “Independent” when used with respect to any accountant may include an accountant who audits the books of such Person if in addition to satisfying the criteria set forth above the accountant is independent with respect to such Person within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants.

Whenever any Independent Person’s opinion or certificate is to be furnished to the Trustee, such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof.

Any pricing service, certified public accountant or legal counsel that is required to be Independent of another Person under this Indenture must satisfy the criteria above with respect to the Issuer, the Collateral Manager and their Affiliates.

Insolvency Event: With respect to any Person, an event that occurs when such Person shall (1) be dissolved (other than pursuant to a consolidation, amalgamation or merger);

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(2) become insolvent or unable to pay its debts or fail or admit in writing its inability generally to pay its debts as they become due; (3) make a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institute or have instituted against it a 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, or a petition shall be presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 45 days of the institution or presentation thereof; (5) have a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seek or become subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) have a secured party take possession of all or substantially all its assets or have a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party shall maintain possession, or any such process shall not be dismissed, discharged, stayed or restrained, in each case within 45 days thereafter; (8) cause or become subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

Instrument: The meaning specified in Section 9-102(a)(47) of the UCC.

Interest Collection Subaccount: The meaning specified in Section 10.2(a).

Interest Collections: With respect to any Monthly Period, (a) all collections of interest, capitalized interest, fees and other amounts (other than Principal Collections) paid in respect of any Portfolio Asset and received by the Issuer during such Monthly Period (whether or not directly from the relevant Portfolio Asset Obligor), including the portion of the proceeds of any sale properly attributable to any of the foregoing or, in the case of any sale of a Portfolio Asset permitted hereunder, any Realized Gains that are attributable to such sale (but not including any amounts deducted or withheld by any Obligor on a Portfolio Asset for or on account of any present or future taxes, duties, assessments or governmental charges with respect to payments by such Obligor on such Portfolio Asset); and (b) with respect to Eligible Investments credited to the Interest Collection Subaccount at any time during such Monthly Period, all interest paid on, and proceeds of, such Eligible Investments.

Investment Company Act: The U.S. Investment Company Act of 1940, as amended from time to time, and the rules promulgated thereunder.

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ISDA Master Agreement: The ISDA 2002 Master Agreement (together with the Schedule and Credit Support Annex thereto and Confirmation exchanged thereunder), each dated as of May 20, 2013, between UBS AG and the Sole Shareholder.

Issuer: The Person named as such on the first page of this Indenture until a successor Person shall have become the Issuer pursuant to the applicable provisions of this Indenture, and thereafter “Issuer” shall mean such successor Person.

Issuer Account Control Agreement: The Account Control Agreement dated as of the Closing Date between the Issuer, the Trustee and State Street Bank and Trust Company, as Custodian.

Issuer Contribution Agreement: The Equity Contribution Agreement dated as of May 23, 2013 between the Sole Shareholder and the Trustee.

Issuer Order and Issuer Request: A written order or request (which may be a standing order or request) to be provided by the Issuer or by the Collateral Manager on behalf of the Issuer in accordance with the provisions of this Indenture, dated and signed in the name of the Issuer by an Authorized Representative of the Issuer, as applicable, or, in the case of an order or request executed by the Collateral Manager, by an Authorized Representative thereof, on behalf of the Issuer.

LC Commitment Amount: With respect to any Pre-funded Letter of Credit, the amount which the Issuer could be required to pay to the Pre-funded LOC Agent Bank in respect thereof (including, for the avoidance of doubt, any portion thereof which the Issuer has collateralized or deposited into a trust or with the Pre-funded LOC Agent Bank for the purpose of making such payments).

Lien: With respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

Loan: Any obligation for the payment or repayment of borrowed money that is documented by a term loan agreement, revolving loan agreement or other similar credit agreement.

Maintenance Covenant: A covenant by any Obligor to comply with one or more financial covenants during each reporting period, whether or not such Obligor has taken any specified action.

Majority Noteholders: The Holders of more than 50% of the Aggregate Outstanding Amount of the Class A Notes.

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Margin Stock: The meaning specified under Regulation U.

Master Participation and Assignment Agreement: The Master Participation and Assignment Agreement dated as of May 23, 2013 between the Issuer and the Sole Shareholder in respect of the purchase of Portfolio Assets as identified therein.

Material Adverse Effect: A material adverse effect on (a) the business, assets, operations, prospects or condition, financial or otherwise, of the Issuer, (b) the ability of the Issuer or the Sole Shareholder to perform any of its obligations under the Notes or any other Transaction Document to which it is a party or (c) the rights of or benefits available to any of the Holders or the Trustee under the Notes or any of the other Transaction Documents.

Maturity: With respect to any Note, the date on which the unpaid principal of such Note becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration or otherwise.

Monthly Period: Each period from, and including, the 15th calendar day of each calendar month (each, a Monthly Date) to, but excluding, the next following Monthly Date, except that (a) the initial Monthly Period will commence on, and include, the Closing Date and will end on, but exclude, the 15^th day of June 2013 and (b) the final Monthly Period will end on, but exclude, the date on which the Notes are paid in full.

Moody’s: Moody’s Investors Service, Inc. and any successor thereto.

Moody’s Industry Classification: The industry classifications set forth in Schedule 2 hereto, as such industry classifications shall be updated at the option of the Collateral Manager if Moody’s publishes revised industry classifications.

Non-Permitted ERISA Holder: As defined in Section 2.11(c).

Non-Permitted Holder: As defined in Section 2.11(b).

Non-USD Currency: Any lawful coin or currency other than Dollars.

Noteholder Reporting Obligations: The obligations set forth in Section 2.12(b).

Note Register: The meaning specified in Section 2.5(a).

Note Registrar: The meaning specified in Section 2.5(a).

Notes: The Class A Notes and the Class A-R Notes, collectively.

Obligor: The issuer, obligor or guarantor in respect of a Portfolio Asset or Eligible Investment or other loan or security, whether or not Collateral.

Offer: As defined in Section 10.6(c).

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Officer: (a) With respect to the Issuer, any director, Chairman of the Board of Directors or any Person authorized thereby to take any and all actions necessary to consummate the transactions contemplated by the Transaction Documents; (b) with respect to any other entity that is a partnership, any general partner thereof or any Person authorized by such entity; (c) with respect to any other entity that is a limited liability company, any member thereof or any Person authorized by such entity; and (d) with respect to the Trustee and any bank or trust company acting as trustee of an express trust or as custodian or agent, any vice president or assistant vice president of such entity or any officer customarily performing functions similar to those performed by a vice president or assistant vice president of such entity.

offshore transaction: The meaning specified in Regulation S.

Opinion of Counsel: A written opinion addressed to the Trustee (or upon which the Trustee is permitted to rely) and the Issuer, in form and substance reasonably satisfactory to the Trustee, of a nationally or internationally recognized and reputable law firm. Whenever an Opinion of Counsel is required hereunder, such Opinion of Counsel may rely on opinions of other counsel who are so admitted and so satisfactory, which opinions of other counsel shall accompany such Opinion of Counsel and shall either be addressed to the Trustee or shall state that the Trustee shall be entitled to rely thereon.

Other Plan Law: Any State, local, Federal or non-U.S. laws or regulations that are substantially similar to the prohibited transaction provisions of ERISA or Section 4975 of the Code.

Outstanding: With respect to the Notes, as of any date of determination, all of the Notes theretofore authenticated and delivered under this Indenture, except:

(i) Notes theretofore canceled by the applicable Note Registrar or delivered to such Note Registrar for cancellation in accordance with the terms of Section 2.9;

(ii) Notes for whose payment funds in the necessary amount have been theretofore irrevocably deposited with the Trustee or any Paying Agent in trust for the Holders of such Notes pursuant to Section 4.1(a)(ii);

(iii) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, unless proof satisfactory to the Trustee is presented that any such Notes are held by a “protected purchaser” (within the meaning of Section 8-303 of the UCC); and

(iv) Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.6;

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provided that, (A) in determining whether the Holders of the requisite Aggregate Outstanding Amount have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Issuer shall be disregarded and deemed not to be Outstanding; (B) the Aggregate Outstanding Amount of the Class A-R Notes, for purposes of payment of Interest Collections and Principal Collections shall be the Outstanding Class A-R Funded Amount and, for all other purposes, shall be deemed to include the Remaining Unfunded Facility Commitment; and (C) the Class A-R Notes will be deemed to be Outstanding so long as the Commitment Termination Date has not occurred, irrespective of whether there exists an Outstanding Class A-R Funded Amount.

Outstanding Class A-R Funded Amount: The meaning specified in the Revolving Credit Note Agreement.

Par Amount: In relation to any Portfolio Asset, the outstanding principal amount of such Portfolio Asset.

Participation Interest: An obligation of the Issuer in respect of a Pre-funded Letter of Credit or a participation interest of the Issuer in a Loan (other than a Delayed-Draw Loan) that, if acquired directly by the Issuer, would qualify as a Portfolio Asset as of the Portfolio Asset Trade Date.

Paying Agent: Any Person authorized by the Issuer to pay the principal of or interest on any Notes on behalf of the Issuer as specified in Section 7.2.

Payment Account: The account established pursuant to Section 10.3(a).

Payment Date: Each date occurring eight Business Days after the last day of any Monthly Period.

Payment Date Report: The meaning specified in Section 10.5(a).

Person: An individual, corporation (including a business trust), partnership, limited partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated association or government or any agency or political subdivision thereof.

Placement Agent: UBS Securities LLC, in its capacity as placement agent under each Placement Agency Agreement.

Placement Agency Agreement: The Class A Placement Agency Agreement and/or the Class A-R Placement Agency Agreement, as applicable.

Plan Asset Regulation: U.S. Department of Labor regulations, 29 C.F.R. §2510.3-101, as modified by Section 3(42) of ERISA.

Portfolio: At any time, all Portfolio Assets held by the Issuer at such time.

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Portfolio Asset: A Loan (or a Participation Interest therein) or Bond.

Portfolio Asset Obligor: In relation to any Portfolio Asset, the borrower or issuer of or obligor on the Portfolio Asset. In addition, “Portfolio Asset Obligor”, unless the context otherwise requires, shall also refer to any guarantor of or other obligor on the Portfolio Asset.

Portfolio Asset Trade Date: The meaning set forth in the definition of “Asset Eligibility Criteria”.

Pre-funded Letter of Credit: A multi-lender credit facility to which the Issuer is party whereby (i) a fronting bank (the Pre-funded LOC Agent Bank) issues or will issue a letter of credit (LC) for account of an Obligor under an Underlying Instrument, (ii) in the event that the LC is drawn, and such Obligor does not reimburse the Pre-funded LOC Agent Bank, each lender is obligated to fund its portion of the facility, (iii) the Pre-funded LOC Agent Bank passes on (in whole or in part) the fees and any other amounts it receives for providing the LC to the lenders and (iv)(a) the related Underlying Instrument requires the Issuer to fully collateralize the Issuer’s obligations to the related Pre-funded LOC Agent Bank or obligate the Issuer to contribute to a trust an aggregate amount equal to the related LC Commitment Amount, (b) either (i) the collateral posted by the Issuer to the related Pre-funded LOC Agent Bank is held by a depository institution meeting the requirement set forth in Section 10.1 at the time such collateral is posted or (ii) the trust in which the contribution by the Issuer is held at is a depository institution that meets the requirement set forth in Section 10.1 and (c) if clause (b)(ii) applies, the Issuer’s contribution to a trust is invested in Eligible Investments only.

Pre-funded LOC Agent Bank: The meaning specified in the definition of the term “Pre-funded Letter of Credit”.

Principal Balance: Subject to Section 1.2, with respect to (a) any item of Collateral other than a Delayed-Draw Loan, the outstanding principal amount of such Collateral (excluding any capitalized interest) and (b) any Delayed-Draw Loan, the outstanding principal of such Delayed-Draw Loan (excluding any capitalized interest), plus (except as expressly set forth herein) any undrawn commitments that have not been irrevocably reduced or withdrawn with respect to such Delayed-Draw Loan; provided that for all purposes the Principal Balance of any Defaulted Obligation that has remained a Defaulted Obligation for a continuous period of three years after becoming a Defaulted Obligation and has not been sold or terminated during such three year period shall be deemed to be zero.

Principal Collections: With respect to any Monthly Period, (a) all collections of principal on a Portfolio Asset (excluding any capitalized interest) paid in respect of any Portfolio Asset and received by the Issuer during such Monthly Period (whether or not directly from the relevant Portfolio Asset Obligor), including the proceeds of any sale properly attributable to principal (excluding proceeds of any sale properly attributable to capitalized interest) (but not including any amounts deducted or withheld by any Obligor

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on a Portfolio Asset for or on account of any present or future taxes, duties, assessments or governmental charges with respect to payments by such Obligor on such Portfolio Asset), and (b) with respect to Eligible Investments credited to the Principal Collection Subaccount at any time during such Monthly Period, all interest paid on, and proceeds of, such Eligible Investments; provided that for the purposes of attributing collections to principal and capitalized interest, such attribution shall be made (i) if the Underlying Instruments include provisions for such attribution, then in accordance with such provisions and (ii) if the Underlying Instruments do not include any such provisions, then on a pro rata basis.

Principal Collection Subaccount: The meaning specified in Section 10.2(a).

Priority of Payments: The meaning specified in Section 11.1(a).

Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.

Purchase Amount: (i) with respect to any Portfolio Asset that is not a Delayed-Draw Loan as of any date of determination, the product of the Purchase Price and the Par Amount and (ii) with respect to any Portfolio Asset that is a Delayed-Draw Loan as of any date of determination, the product of the Purchase Price and the Commitment Amount.

Purchase Price: In relation to any Portfolio Asset, (a) in the case of a Portfolio Asset other than a Delayed-Draw Loan, the original purchase price therefor paid by the Issuer to acquire such Portfolio Asset (expressed as a percentage of par and exclusive of accrued interest and capitalized interest, but inclusive of any costs incurred by the Issuer to acquire such Portfolio Asset) and (b) in the case of a Portfolio Asset that is a Delayed-Draw Loan, the original purchase price therefor paid by the Issuer to acquire such Portfolio Asset (expressed as a percentage of par and the Commitment Amount in respect of such Portfolio Asset and exclusive of accrued interest and capitalized interest, but inclusive of any costs incurred by the Issuer to acquire such Portfolio Asset).

Qualified Institutional Buyer: The meaning specified in Rule 144A under the Securities Act.

Qualified Purchaser: The meaning specified in the Investment Company Act.

Realized Gains: Any gain realized by the Issuer from the repayment, sale or other disposition of any Portfolio Asset or any portion thereof by reason of the fact that the net principal proceeds received in respect of such repayment or sale is greater than the Purchase Amount thereof (or, if applicable, the portion of the Purchase Amount attributable to the portion of the Portfolio Asset repaid, sold or otherwise disposed of).

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Record Date: With respect to the Global Notes, the date one day prior to the applicable Payment Date and, with respect to the Certificated Notes, the date 15 days prior to the applicable Payment Date.

Registered: In registered form for U.S. Federal income tax purposes and issued after July 18, 1984, provided that a certificate of interest in a grantor trust shall not be treated as Registered unless each of the obligations or securities held by the trust was issued after that date.

Registered Form has the meaning specified in Section 8-102(a)(13) of the UCC.

Registered Office Agreement: The Registered Office Agreement, between the Administrator, the Sole Shareholder and the Issuer dated May 23, 2013, providing for the provision of registered office services to the Issuer, as modified, amended and supplemented from time to time.

Regulation S: Regulation S, as amended, under the Securities Act.

Regulation S Class A-R Note has the meaning set forth in Section 2.2(b).

Regulation S Global Note: The meaning specified in Section 2.2(b)(i).

Regulation U: Regulation U (12 C.F.R. 221) issued by the Board of Governors of the Federal Reserve System.

Remaining Unfunded Facility Commitment: The meaning specified for such term in the Revolving Credit Note Agreement.

Restricted Class A-R Note has the meaning set forth in Section 2.2(b).

Revolving Credit Note Agent: The Bank, as note agent acting on behalf of the Issuer under the Revolving Credit Note Agreement.

Revolving Credit Note Agreement: The Revolving Credit Note Agreement, dated as of the Amendment and Restatement Date, by and among the Issuer, the Revolving Credit Note Agent, the Trustee and the Holders from time to time of the Class A-R Notes.

Rule 144A: Rule 144A, as amended, under the Securities Act.

Rule 144A Global Note: The meaning specified in Section 2.2(b)(i).

S&P: Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor or successors thereto.

S&P Industry Classification: The S&P Industry Classifications set forth in Schedule 3 hereto, and such industry classifications shall be updated at the option of the Collateral Manager if S&P publishes revised industry classifications.

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Sale: The meaning specified in Section 5.17.

Scheduled Distribution: With respect to any Portfolio Asset or Eligible Investment, for each Due Date, the scheduled payment of principal and/or interest and/or capitalized interest due on such Due Date with respect to such Collateral, determined in accordance with the assumptions specified in Section 1.2 hereof.

Second Lien Loan: Any Loan that: (i) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the Obligor of the Loan; (ii) is secured by a valid first-priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under the Loan; (iii) the value of the collateral securing the Loan together with other attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager, as certified to the Trustee in writing) to repay the Loan in accordance with its terms and to repay all other Loans of equal seniority secured by a first lien or security interest in the same collateral and (iv) is not secured solely or primarily by common stock or other equity interests; provided that the limitation set forth in this clause (iv) shall not apply with respect to a Loan made to a parent entity that is secured solely or primarily by the stock of one or more of the subsidiaries of such parent entity to the extent that the granting by any such subsidiary of a lien on its own property would violate law or regulations applicable to such subsidiary (whether the obligation secured is such Loan or any other similar type of Indebtedness owing to third parties).

Secured Obligations: The meaning assigned in the Granting Clauses hereof.

Secured Parties: The meaning specified in the Granting Clauses.

Securities Act: The U.S. Securities Act of 1933, as amended.

Securities Intermediary: The meaning specified in Section 8-102(a)(14) of the UCC.

Security Entitlement: The meaning specified in Section 8-102(a)(17) of the UCC.

Selling Institution: The entity obligated to make payments to the Issuer under the terms of a Participation Interest.

Senior Secured Loan: Any Loan that: (i) is not (and by its terms is not permitted to become) subordinate in right of payment to any other debt for borrowed money incurred by the obligor of such Loan and (ii) is secured by a valid first priority perfected security interest or lien on specified collateral (such collateral, together with any other pledged assets, having a value (as reasonably determined by the Collateral Manager at the time of acquisition, which determination will not be questioned based on subsequent events) equal to or greater than the Principal Balance of the Loan) securing the obligor’s obligations under the Loan, which security interest or lien is subject to customary liens.

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Side Letter Security Agreement: The letter agreement dated as of May 23, 2012 between the Issuer and the Sole Shareholder in contemplation of the sale from time to time of Portfolio Assets from the Sole Shareholder to the Issuer.

Similar Law: Any Federal, State, local, non-U.S. or other law or regulation that could cause the underlying assets of the Issuer to be treated as assets of the investor in any Note (or any interest therein) by virtue of its interest and thereby subject the Issuer and the Collateral Manager (or other Persons responsible for the investment and operation of the Issuer’s assets) to laws or regulations that are similar to the fiduciary responsibility or prohibited transaction provisions contained in Title I of ERISA or Section 4975 of the Code.

Sole Shareholder: CM Finance LLC, a limited liability company formed under the law of the State of Maryland and sole shareholder of the Issuer.

Stated Maturity: With respect to the Notes, the date specified as such in Section 2.3.

Structured Finance Obligation: Any debt obligation secured directly by, or representing ownership of, a pool of consumer receivables, auto loans, auto leases, equipment leases, home or commercial mortgages, corporate debt or sovereign debt obligations, including collateralized bond obligations, collateralized loan obligations, mortgage-backed securities or any similar security or other asset backed security or similar investment or equipment trust certificate or trust certificate of the type generally considered to be a repackaged security.

Subscription Agreements: (i) The agreement dated as of May 23, 2013 by and between the Issuer and CM Finance LLC relating to the sale of U.S.$73,500,000 of the Class A Notes, (ii) the agreement dated as of May 23, 2013 by and between the Issuer and UBS AG relating to the sale of U.S.$76,500,000 of the Class A Notes, (iii) the agreement dated as of December 4, 2013 by and between the Issuer and CM Finance LLC relating to the sale of U.S.$75,000,000 of the Class A-R Notes and (iv) the agreement dated as of December 4, 2013 by and between the Issuer and UBS AG relating to the sale of U.S.$50,000,000 of the Class A-R Notes.

Support Document: Each of the Issuer Account Control Agreement and the Issuer Contribution Agreement.

Synthetic Security: Any U.S. Dollar denominated swap transaction (including any default swap), LCDX, structured bond investment, credit linked note or other derivative investment, which investment contains a probability of default, recovery upon default and expected loss characteristics closely correlated to a reference obligation, but which may provide for a different maturity, interest rate or other non credit characteristics than such reference obligation.

TARGET Settlement Day: Any day on which TARGET (the Trans-European Automated Real-time Gross settlement Express Transfer system) is open.

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Tax: Any tax, levy, impost, duty, charge or assessment of any nature (including interest, penalties and additions thereto) imposed by any governmental taxing authority.

Tax Event: An event that occurs if (i) any Obligor under any Portfolio Asset is required to deduct or withhold from any payment under such Portfolio Asset for or on account of any Tax for whatever reason (other than (x) withholding tax on (1) fees received with respect to a Pre-funded Letter of Credit and (2) amendment, waiver, consent and extension fees and (y) withholding tax imposed as a result of the failure by any Holder to comply with its Noteholder Reporting Obligations, so long as the Issuer, within 60 days after the imposition of such withholding tax, exercises its right to demand that such Non-Permitted Holder transfer its interest to a Person that is not a Non-Permitted Holder and, if such Non-Permitted Holder fails to so transfer its Notes, the Issuer (or the Collateral Manager acting for the Issuer) exercises its right to sell such Notes or interest therein to a Person that is not a Non-Permitted Holder) and such Obligor is not required to pay to the Issuer such additional amount as is necessary to ensure that the net amount actually received with respect to any payment under such Portfolio Asset (free and clear of Taxes, whether assessed against such Obligor or the Issuer) will equal the full amount that the Issuer would have received had no such deduction or withholding occurred or (ii) any jurisdiction imposes net income, profits or similar Tax on the Issuer, provided that the sum of (A) the tax or taxes imposed on the Issuer as described in clause (ii) of this definition and (B) the total amount withheld from payments under the Portfolio Assets described in clause (i) of this definition and which are not compensated for by payment of additional amounts is in excess of 5% of the aggregate interest due and payable on the Portfolio Assets for the relevant Monthly Period.

Transaction Documents: The Indenture, the Issuer Account Control Agreement, Collateral Management Agreement, the Registered Office Agreement, the Collateral Administration Agreement, the Side Letter Security Agreement, each Placement Agency Agreement, each Subscription Agreement, the Revolving Credit Note Agreement and the Issuer Contribution Agreement.

Transfer Agent: The Person or Persons, which may be the Issuer, authorized by the Issuer to exchange or register the transfer of Notes.

Trust Officer: When used with respect to the Trustee, any Officer within the Corporate Trust Office (or any successor group of the Trustee) including any Officer to whom any corporate trust matter is referred at the Corporate Trust Office because of such person’s knowledge of and familiarity with the particular subject and, in each case, having direct responsibility for the administration of this transaction.

Trustee: As defined in the first sentence of this Indenture.

UBS: UBS AG.

UCC: The Uniform Commercial Code as in effect in the State of New York, as amended from time to time.

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Uncertificated Security: The meaning specified in Section 8-102(a)(18) of the UCC.

Underlying Instrument: The indenture, credit agreement or other agreement pursuant to which a Portfolio Asset has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Portfolio Asset or of which the holders of such Portfolio Asset are the beneficiaries.

United States Person: The meaning specified in Section 7701(a)(30) of the Code.

Unregistered Securities: The meaning specified in Section 5.17(c).

U.S. Person or U.S. person: The meaning specified in Regulation S.

Valuation Agent: UBS AG in its capacity as valuation agent, as appointed by the Issuer pursuant to the appointment letter dated the date hereof between the Issuer and UBS AG, and its permitted successors and assigns.

1.2 Assumptions as to Collateral

In connection with all calculations required to be made pursuant to this Indenture with respect to Scheduled Distributions on any Portfolio Asset or Eligible Investment, or any payments on any other assets included in the Collateral, with respect to the sale of and reinvestment in Portfolio Assets, and with respect to the income that can be earned on Scheduled Distributions on such Collateral and on any other amounts that may be received for deposit in the Collection Account, the provisions set forth in this Section 1.2 shall be applied. The provisions of this Section 1.2 shall be applicable to any determination or calculation that is covered by this Section 1.2, whether or not reference is specifically made to Section 1.2, unless some other method of calculation or determination is expressly specified in the particular provision.

(a) All calculations with respect to Scheduled Distributions on the Collateral securing the Notes shall be made on the basis of information as to the terms of each such item of Collateral and upon reports of payments, if any, received on such item of Collateral that are furnished by or on behalf of the Obligor of such item of Collateral and, to the extent they are not manifestly in error, such information or reports may be conclusively relied upon in making such calculations.

(b) For each Monthly Period and as of any date of determination, the Scheduled Distribution on any item of Collateral (other than a Defaulted Obligation, which shall be assumed to have a Scheduled Distribution of zero) shall be the sum of (i) the total amount of payments and collections to be received during such Monthly Period in respect of such item of Collateral (including the proceeds of the sale of such Collateral received and, in the case of sales which have not yet settled, to be received during the Monthly Period and not reinvested in additional Portfolio Assets or Eligible Investments or retained in the Collection Account for subsequent reinvestment pursuant to Section 12.2(b)) that, if received as

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scheduled, will be available in the Collection Account at the end of the Monthly Period and (ii) any such amounts received in prior Monthly Periods that were not disbursed on a previous Payment Date.

(c) All calculations, unless otherwise set forth herein or the context otherwise requires, shall be rounded to the nearest ten-thousandth if expressed as a percentage, and to the nearest one-hundredth if expressed otherwise.

(d) All monetary calculations under this Indenture shall be in Dollars.

(e) Any reference in this Indenture to an amount of the Trustee’s or the Collateral Administrator’s fees calculated with respect to a period at a per annum rate shall be computed on the basis of a 360-day year of twelve 30-day months prorated for the related Monthly Period and shall be based on the aggregate face amount of the Portfolio Assets and the Eligible Investments.

(f) To the extent of any ambiguity in the interpretation of any definition or term contained in this Indenture or to the extent more than one methodology can be used to make any of the determinations or calculations set forth herein, the Collateral Administrator shall request direction from the Collateral Manager as to the interpretation and/or methodology to be used, and the Collateral Administrator shall follow such direction, and together with the Trustee, shall be entitled to conclusively rely thereon without any responsibility or liability therefor.

(g) For purposes of calculating compliance with any tests hereunder, the trade date (and not the settlement date) with respect to any acquisition or disposition of a Portfolio Asset or Eligible Investment shall be used by the Collateral Administrator to determine whether and when such acquisition or disposition has occurred.

2. THE NOTES

2.1 Forms Generally

The Notes and the Trustee’s or Authenticating Agent’s certificate of authentication thereon (the Certificate of Authentication) shall be in substantially the forms required by this Article 2, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be consistent herewith, determined by the Authorized Representatives of the Issuer executing such Notes as evidenced by their execution of such Notes. Any portion of the text of any such Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of such Note.

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2.2 Forms of Notes

(a) The forms of the Notes, including the forms of Certificated Notes, Regulation S Global Notes and Rule 144A Global Notes, shall be as set forth in the applicable part of Exhibit A hereto.

(b) Regulation S Global Notes, Rule 144A Global Notes; Certificated Notes.

(i) The Class A Notes sold to Persons who are not U.S. persons in offshore transactions in reliance on Regulation S shall be issued initially in the form of one permanent global note, in definitive, fully registered form without interest coupons, substantially in the applicable form attached as Exhibit A1 hereto (the Regulation S Global Note), and shall be deposited on behalf of the subscribers for such Class A Notes represented thereby with the Bank as custodian for, and registered in the name of a nominee of, DTC for the respective accounts of Euroclear and Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

(ii) The Class A Notes sold to Persons that are initial purchasers that are also both (A) a Qualified Purchaser or an entity owned (or in the case of Qualified Purchasers, beneficially owned) by one or more Qualified Purchasers and (B)(I) a Qualified Institutional Buyer or (II) an Accredited Investor who is purchasing such Class A Notes in a non-public transaction shall be issued initially in the form of one permanent global note, in definitive, fully registered form without interest coupons, substantially in the form attached as Exhibit A2 hereto (the Rule 144A Global Note) and shall be deposited on behalf of the subscribers for such Class A Notes represented thereby with the Bank as custodian for, and registered in the name of a nominee of, DTC, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

(iii) The aggregate principal amount of the Regulation S Global Note and the Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee or DTC or its nominee, as the case may be, as hereinafter provided.

(iv) The Class A-R Notes offered and sold in offshore transactions in reliance on Regulation S to persons who are not U.S. Persons (each a Regulation S Class A-R Note) shall be issued in the form of one or more certificated securities in definitive, fully Registered Form, without interest coupons and with the applicable legends set forth in Exhibit A3 hereto, as applicable, which shall be registered in the name of the Holder or a nominee thereof and duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. Class A-R Notes offered and sold in the United States pursuant to an exemption from the registration requirements

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of the Securities Act (each, a Restricted Class A-R Note) shall be issued in the form of one or more certificated securities in definitive, fully registered form, without interest coupons and with the applicable legends set forth in Exhibit A3 hereto, which shall be registered in the name of the Holder or a nominee thereof and duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

(c) The Issuer in issuing the Notes shall use “CUSIP,” “ISIN” or “private placement” numbers (if then generally in use), and, if so, the Issuer will indicate the “CUSIP,” “ISIN” or “private placement” numbers of the Notes in related materials as a convenience to Holders.

(d) Book Entry Provisions. This Section 2.2(d) shall apply only to Global Notes deposited with or for account of DTC.

The provisions of the “Operating Procedures of the Euroclear System” of Euroclear and the “Terms and Conditions Governing Use of Participants” of Clearstream, respectively, will be applicable to the Global Notes insofar as interests in such Global Notes are held by the Agent Members of Euroclear or Clearstream, as the case may be.

Agent Members shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Bank, as custodian for DTC and DTC may be treated by the Issuer, the Trustee, and any agent of the Issuer or the Trustee as the absolute owner of such Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee, or any agent of the Issuer or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

2.3 Authorized Amount; Stated Maturity; Denominations

(a) The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to, with respect to the Class A Notes, U.S.$150,000,000 and, with respect to the Class A-R Notes, U.S.$125,000,000, excluding (i) Notes issued upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.5, 2.6 or 8.5 of this Indenture or (ii) additional notes issued in accordance with Section 2.13 and other applicable provisions of Article 8.

(b) The Notes shall have the designations, aggregate principal amounts and other characteristics as follows:

Class Designation	Class A Note	Class A-R Note
Original Aggregate Principal Amount	U.S.$150,000,000	U.S.$125,000,000
Stated Maturity	May 22, 2016	May 22, 2016

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The Class A Notes shall be issued in minimum denominations of U.S.$500,000 and integral multiples of U.S.$1,000 in excess thereof and shall only be transferred or resold in compliance with the terms of this Indenture.

The Class A-R Notes shall be issued in minimum denominations of U.S.$500,000 (which may represent a combination of the Outstanding Class A-R Funded Amount, if any, and the Remaining Unfunded Facility Commitment attributable to such Class A-R Notes) and integral multiples of U.S.$1,000 in excess thereof and shall only be transferred or resold in compliance with the terms of this Indenture and the Revolving Credit Note Agreement.

All of the Class A Notes and Class A-R Notes are entitled to receive payments of Interest Proceeds and Principal Proceeds on each Payment Date and on the date of Maturity, in each case, pro rata and pari passu among themselves in accordance with the Priority of Payments.

2.4 Execution, Authentication, Delivery and Dating

The Notes shall be executed on behalf of the Issuer by one of its Authorized Representatives. The signature of such Authorized Representative on the Notes may be manual or facsimile.

Notes bearing the manual or facsimile signatures of any individual who was at any time an Authorized Representative of the Issuer shall bind the Issuer notwithstanding the fact that such individual has ceased to hold such office prior to the authentication and delivery of such Notes or did not hold such office at the date of issuance of such Notes.

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes executed by the Issuer to the Trustee or the Authenticating Agent for authentication and the Trustee or the Authenticating Agent, upon Issuer Order, shall authenticate and deliver such Notes as provided in this Indenture and not otherwise.

Each Class A Note authenticated and delivered by the Trustee or the Authenticating Agent upon Issuer Order on the Closing Date shall be dated as of the Closing Date. Each Class A-R Note authenticated and delivered by the Trustee or the Authenticating Agent upon Issuer Order on the Amendment and Restatement Date shall be dated as of the Amendment and Restatement Date. All other Notes that are authenticated and delivered after the Closing Date for any other purpose under this Indenture shall be dated the date of their authentication.

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Notes issued upon transfer, exchange or replacement of other Notes shall be issued in authorized denominations reflecting the original Aggregate Outstanding Amount of the Notes so transferred, exchanged or replaced, but shall represent only the current Outstanding principal amount of the Notes so transferred, exchanged or replaced. In the event that any Note (including, in the case of the Class A-R Notes, the Remaining Unfunded Facility Commitment) is divided into more than one Note in accordance with this Article 2, the original principal amount of such Note shall be proportionately divided among the Notes delivered in exchange therefor and shall be deemed to be the original aggregate principal amount of such subsequently issued Notes.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a Certificate of Authentication, substantially in the form provided for herein, executed by the Trustee or by the Authenticating Agent by the manual signature of one of their Authorized Representatives, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

2.5 Registration, Registration of Transfer and Exchange

(a) The Trustee is hereby appointed as the registrar of the Class A Notes (the Class A Note Registrar) and the Revolving Credit Note Agent has been appointed as the registrar of the Class A-R Notes under the Revolving Credit Note Agreement (in such capacity, the Class A-R Note Registrar and together with the Class A Note Registrar, each a Note Registrar). The Trustee is hereby appointed as a Transfer Agent with respect to the Notes. Each Note Registrar shall keep, on behalf of the Issuer, a register (the Class A Note Register) for the Class A Notes and a register (the Class A-R Note Register and, together with the Class A Note Register, the Note Registers) for the Class A-R Notes, in its Corporate Trust Office in which, subject to such reasonable regulations as it may prescribe, such Note Registrar shall provide for the registration of and the registration of transfers of Class A Notes and the Class A-R Notes. Upon any resignation or removal of either Note Registrar, the Issuer shall promptly appoint a successor or, in the absence of such appointment, assume the duties of such Note Registrar. The Issuer may not terminate the appointment of the Note Registrars or any Transfer Agent or appoint a new Note Registrar or Transfer Agent without the consent of the Majority Noteholders.

If a Person other than the Trustee is appointed as a Class A Note Registrar, the Issuer will give the Trustee prompt written notice of the appointment of a Class A Note Registrar, and of the location, and any change in the location, of the Class A Note Registrar, and the Trustee shall have the right to inspect the Class A Note Register at all reasonable times and to obtain copies thereof and the Trustee shall have the right to rely upon a certificate executed on behalf of the Class A Note Registrar by an Officer thereof as to the names and addresses of the Holders of the Class A Notes and the principal or face amounts and numbers of such Class A Notes. Upon written request at any time, the Class A Note Registrar shall provide to the Issuer, the Collateral Manager or any Holder of a Class A Note a current list of Class A Noteholders as reflected in the Class A Note Register.

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If a Person other than the Revolving Credit Note Agent is appointed as a Class A-R Note Registrar, the Issuer will give the Revolving Credit Note Agent prompt written notice of the appointment of a Class A-R Note Registrar, and of the location, and any change in the location, of the Class A-R Note Registrar, and the Revolving Credit Note Agent shall have the right to inspect the Class A-R Note Register at all reasonable times and to obtain copies thereof and the Revolving Credit Note Agent shall have the right to rely upon a certificate executed on behalf of the Class A-R Note Registrar by an Officer thereof as to the names and addresses of the Holders of the Class A-R Notes and the principal or face amounts and numbers of such Class A-R Notes. Upon written request at any time, the Class A-R Note Registrar shall provide to the Issuer, the Collateral Manager or any Holder of a Class A-R Note a current list of Class A-R Noteholders as reflected in the Class A-R Note Register.

Subject to this Section 2.5, upon surrender for registration of transfer of any Notes at the office or agency of the Issuer to be maintained as provided in Section 7.2, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal or face amount.

At the option of the Holder, Notes may be exchanged for Notes of like terms, in any authorized denominations and of like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Note is surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive.

All Notes authenticated and delivered upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt (to the extent they evidence debt), and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the applicable Note Registrar duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing.

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer, the Note Registrars or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The applicable Note Registrar or the Trustee shall be permitted to request such evidence reasonably satisfactory to it documenting the identity and/or signatures of the transferor and transferee.

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Each Note Registrar shall ensure that the applicable Note Register is maintained in a manner such that the Notes are treated as Registered.

(b) No Note may be sold or transferred (including, without limitation, by pledge or hypothecation) unless such sale or transfer is exempt from the registration requirements of the Securities Act, is exempt from the registration requirements under applicable State securities laws and will not cause the Issuer to become subject to the requirement that it register as an investment company under the Investment Company Act.

(c)	(i)	No Note may be transferred to a Benefit Plan Investor and neither the Issuer, the Trustee nor the Note Registrars will recognize any such transfer to a Person that has represented that it is a Benefit Plan Investor. Each initial purchaser of a Note or an interest therein will be required and deemed to represent and warrant, and each subsequent transferee of a Note or an interest therein will be deemed to have represented and warranted, that: (A) for so long as it holds such Note or interest therein, it is not, and is not acting on behalf of, a Benefit Plan Investor; and (B) if such Person is a governmental, church, non-U.S. or other plan, (i) it is not, and for so long as it holds such Note or interest therein will not be, subject to any Similar Law, and (ii) its acquisition, holding and disposition of its interest in such Note will not constitute or result in a violation of any applicable Other Plan Laws.
	(ii)	Each purchaser and subsequent transferee of Notes will be required or deemed to represent that such purchaser or subsequent transferee, as applicable, is not an Affected Bank. Each subsequent transferee of any Notes will be deemed to represent that such purchaser or subsequent transferee, as applicable, is not an Affected Bank. No transfer of any Note to an Affected Bank will be effective, and neither the Issuer, the Trustee nor the Note Registrars will recognize any such transfer, unless such transfer is specifically authorized by the Issuer in writing.

(d) Notwithstanding anything contained herein to the contrary, the Trustee shall not be responsible for ascertaining whether any transfer complies with, or for otherwise monitoring or determining compliance with, the registration provisions of or any exemptions from the Securities Act, applicable State securities laws or the applicable laws of any other jurisdiction, ERISA, the Code or the Investment Company Act; provided that if a certificate is specifically required by the terms of this Section 2.5 to be provided to the Trustee by a prospective transferor or transferee, the Trustee shall be under a duty to receive and examine the same to determine whether or not the certificate substantially conforms on its face to the applicable requirements of this Indenture and shall promptly notify the party delivering the same if such certificate does not comply with such terms.

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(e) Transfers of Notes shall only be made in accordance with the following requirements:

(i) Rule 144A Global Note to Regulation S Global Note. If a holder of a beneficial interest in a Rule 144A Global Note deposited with DTC wishes at any time to exchange its interest in such Rule 144A Global Note for an interest in the corresponding Regulation S Global Note, or to transfer its interest in such Rule 144A Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Note, such holder (provided that such holder or, in the case of a transfer, the transferee is not a U.S. person and is acquiring such interest in an offshore transaction) may, subject to the immediately succeeding sentence and the rules and procedures of DTC, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Regulation S Global Note. Upon receipt by the Class A Note Registrar of (A) instructions given in accordance with DTC’s procedures from an Agent Member directing the Class A Note Registrar to credit or cause to be credited a beneficial interest in the corresponding Regulation S Global Note, but not less than the minimum denomination applicable to such holder’s Notes, in an amount equal to the beneficial interest in the Rule 144A Global Note to be exchanged or transferred, (B) a written order given in accordance with DTC’s procedures containing information regarding the participant account of DTC and the Euroclear or Clearstream account to be credited with such increase, (C) a certificate in the form of Exhibit B1 attached hereto given by the holder of such beneficial interest stating that the exchange or transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Notes, including that the holder or the transferee, as applicable, is not a U.S. person, and in an offshore transaction pursuant to and in accordance with Regulation S, and (D) a written certification in the form of Exhibit B5 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is a non-U.S. person purchasing such beneficial interest in an offshore transaction pursuant to Regulation S, then the Class A Note Registrar shall approve the instructions at DTC to reduce the principal amount of the Rule 144A Global Note and to increase the principal amount of the Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Note to be exchanged or transferred, and to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Regulation S Global Note equal to the reduction in the principal amount of the Rule 144A Global Note.

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(ii) Regulation S Global Note to Rule 144A Global Note. If a holder of a beneficial interest in a Regulation S Global Note deposited with DTC wishes at any time to exchange its interest in such Regulation S Global Note for an interest in the corresponding Rule 144A Global Note or to transfer its interest in such Regulation S Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Rule 144A Global Note. Upon receipt by the Class A Note Registrar of (A) instructions from Euroclear, Clearstream and/or DTC, as the case may be, directing the Class A Note Registrar to cause to be credited a beneficial interest in the corresponding Rule 144A Global Note in an amount equal to the beneficial interest in such Regulation S Global Note, but not less than the minimum denomination applicable to such holder’s Notes to be exchanged or transferred, such instructions to contain information regarding the participant account with DTC to be credited with such increase, (B) a certificate in the form of Exhibit B3 attached hereto given by the holder of such beneficial interest and stating, among other things, that, in the case of a transfer, the Person transferring such interest in such Regulation S Global Note reasonably believes that the Person acquiring such interest in a Rule 144A Global Note is a Qualified Institutional Buyer and also a Qualified Purchaser or an entity beneficially owned exclusively by Qualified Purchasers, is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction and (C) a written certification in the form of Exhibit B4 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is a Qualified Institutional Buyer and also a Qualified Purchaser or an entity beneficially owned exclusively by Qualified Purchasers, then such Note Registrar will approve the instructions at DTC to reduce, or cause to be reduced, such Regulation S Global Note by the aggregate principal amount of the beneficial interest in such Regulation S Global Note to be transferred or exchanged and such Note Registrar shall instruct DTC, concurrently with such reduction, to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Rule 144A Global Note equal to the reduction in the principal amount of such Regulation S Global Note.

(iii) Transfer of Global Note to Certificated Note. A Holder of a beneficial interest in a Global Note may not transfer its interest in such Global Note to a Person who wishes to take delivery thereof in the form of a

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corresponding Certificated Note. A Holder of a beneficial interest in a Global Note may not exchange such interest for a corresponding Certificated Note unless it satisfies the requirements of Section 2.10.

(iv) Transfer of Certificated Notes to Certificated Notes. Upon receipt by the applicable Note Registrar of (A) a Holder’s Certificated Note properly endorsed for assignment to the transferee, and (B) a certificate substantially in the form of Exhibit B2 executed by the transferee, such Note Registrar shall cancel such Certificated Note in accordance with Section 2.9, record the transfer in the applicable Note Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more Certificated Notes bearing the same designation as the Certificated Note endorsed for transfer, registered in the names specified in the assignment described in clause (A) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the Certificated Note surrendered by the transferor), and in authorized denominations.

(v) Transfer of Certificated Notes to Global Notes. If a Class A Noteholder wishes at any time to transfer its interest in a Certificated Note to a Person who wishes to take delivery thereof in the form of a Global Note, such Class A Noteholder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such Certificated Note for a beneficial interest in an applicable Global Note. Upon receipt by the Class A Note Registrar of (A) a Holder’s Certificated Note properly endorsed for assignment to the transferee, (B) a certificate substantially in the form of Exhibit B1 (in the case of transfer to a Regulation S Global Note) or Exhibit B3 (in the case of transfer to a Rule 144A Global Note) attached hereto executed by the transferor and a certificate substantially in the form of Exhibit B4 (in case of transfer to a Rule 144A Global Note) or Exhibit B5 (in case of transfer to a Regulation S Global Note) attached hereto executed by the transferee, (C) instructions given in accordance with Euroclear, Clearstream or DTC’s procedures, as the case may be, from an Agent Member to instruct DTC to cause to be credited a beneficial interest in the applicable Global Note in an amount equal to the Certificated Notes to be transferred or exchanged, and (D) a written order given in accordance with DTC’s procedures containing information regarding the participant’s account at DTC and/or Euroclear or Clearstream to be credited with such increase, the Class A Note Registrar shall cancel such Certificated Note in accordance with Section 2.9, record the transfer in the Class A Note Register in accordance with Section 2.5(a) and approve the instructions at DTC, concurrently with such cancellation, to credit or cause to be credited to the securities account of the Person

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specified in such instructions a beneficial interest in the applicable Global Note equal to the principal amount of the Certificated Note transferred or exchanged.

(f) Legends. Any Note issued upon the transfer, exchange or replacement of Notes shall bear such applicable legend substantially as set forth in the applicable part of Exhibit A hereto.

(g) Each Person who becomes a beneficial owner of Notes represented by an interest in a Global Note, and any original purchaser of any Notes, by its acquisition of a Note, will be deemed to have represented and agreed as follows:

(i) In connection with the purchase of such Notes:

(A) none of the Issuer, the Sole Shareholder, the Collateral Manager, the Placement Agent, the Valuation Agent, the Trustee, the Collateral Administrator or any of their respective Affiliates is acting as a fiduciary or financial or investment advisor for such beneficial owner;

(B) such beneficial owner is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Sole Shareholder, the Collateral Manager, the Trustee, the Collateral Administrator, the Placement Agent, the Valuation Agent, or any of their respective Affiliates;

(C) such beneficial owner has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary and has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to this Indenture) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the Sole Shareholder, the Collateral Manager, the Placement Agent, the Valuation Agent, the Trustee, the Collateral Administrator or any of their respective Affiliates;

(D) such beneficial owner (1) in the case of an initial purchaser, is both (x) a Qualified Purchaser, or an entity owned (or in the case of Qualified Purchasers, beneficially owned) by one or more Qualified Purchasers, and (y)(I) a Qualified Institutional Buyer or (II) an Accredited Investor who is purchasing such Notes in a non-public transaction and (2) in the case of a Person who becomes a beneficial owner subsequent to the Closing Date (in the case of the Class A Notes) or the Amendment and Restatement Date (in the

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case of the Class A-R Notes), is both (x) a Qualified Purchaser, or an entity owned (or in the case of Qualified Purchasers, beneficially owned) by one or more Qualified Purchasers, and (y) a Qualified Institutional Buyer that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A under the Securities Act or a trust fund referred to in paragraph (a)(1)(i)(f) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan, who is purchasing the Notes in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder;

(E) such beneficial owner is acquiring its interest in such Notes for its own account for investment and not with a view to the resale, distribution or other disposition thereof in violation of the Securities Act;

(F) such beneficial owner was not formed for the purpose of investing in such Notes;

(G) such beneficial owner understands that the Issuer may receive a list of participants holding interests in the Notes from one or more book-entry depositories;

(H) such beneficial owner will hold and transfer at least the minimum denomination of such Notes;

(I) such beneficial owner is a sophisticated investor and is purchasing the Notes with a full understanding of all of the terms, conditions and risks thereof, and is capable of and willing to assume those risks;

(J) such beneficial owner will provide notice of the relevant transfer restrictions to subsequent transferees, including that such beneficial owners are relying on the exemption from registration under the Securities Act provided by Rule 144A thereunder;

(K) none of such beneficial owner or any of its affiliates (as such term is defined in Rule 501(b) of Regulation D under the Securities Act) or any other Person acting on any of their behalf has engaged or will engage, in connection with such Notes, in any form of (i) general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (ii) directed selling efforts within the meaning of Rule 902(c) of Regulation S thereunder;

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(L) such beneficial owner has not solicited and will not solicit offers for such Notes, and has not arranged and will not arrange commitments to purchase such Notes, except in accordance with this Indenture and any applicable U.S. Federal and State securities laws and the securities laws of any other jurisdiction in which such Notes have been offered; and

(M) if such beneficial owner is not a United States person, it is not acquiring any Note as part of a plan to reduce, avoid or evade U.S. Federal income tax.

(ii) Each Person who purchases a Note or any interest therein will be required or deemed to represent, warrant and agree that (A) for so long as it holds such Note or interest therein, such Person is not, and is not acting on behalf of, a Benefit Plan Investor, and (B) if such Person is a governmental, church, non-U.S. or other plan which is subject to any Other Plan Law, (1) it is not, and for so long as it holds such Notes or interest therein it will not be, subject to any Similar Law, and (2) its purchase, holding and disposition of such Note will not constitute or result in a violation of any applicable Other Plan Laws.

(iii) Such beneficial owner understands that such Notes are being offered only in a transaction not involving any public offering in the United States of America 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 such beneficial owner 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 this Indenture and the legend on such Notes, including any requirement for written certifications. In particular, such beneficial owner understands that the Notes may be transferred only to a Person that is either (a) both (1)(x) a Qualified Purchaser, or (y) an entity owned (or in the case of Qualified Purchasers, beneficially owned) by one or more Qualified Purchasers and (2) a Qualified Institutional Buyer that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A under the Securities Act or a trust fund referred to in paragraph (a)(1)(i)(f) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan, who is purchasing the Notes in reliance on the exemption from Securities Act registration provided by Rule 144A or (b) a Person that is not a U.S. Person and is acquiring the

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Notes in an offshore transaction in reliance on the exemption from registration provided by Regulation S thereunder. Such beneficial owner 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 such Notes. Such beneficial owner understands that the Issuer has not been registered under the Investment Company Act, and that the Issuer is exempt from registration as such by virtue of Section 3(c)(7) of the Investment Company Act.

(iv) Such beneficial owner is aware that, except as otherwise provided in this Indenture, any Class A Notes being sold to it in reliance on Regulation S will be represented by a Regulation S Global Note and that beneficial interests therein may be held only through DTC for the respective accounts of Euroclear or Clearstream.

(v) Such beneficial owner 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 Section 2.5, including the Exhibits referenced herein, Sections 2.11 and 2.12 hereunder, and the legends on the Notes.

(vi) Such beneficial owner understands that the Issuer, the Sole Shareholder, the Collateral Manager, the Trustee, the Placement Agent, the Valuation Agent, and their respective counsel will rely upon the accuracy and truth of the foregoing representations and agreements, and such beneficial owner hereby consents to such reliance.

(h) Each Person who becomes an owner of a Certificated Note will be required to make the representations and agreements set forth in Exhibit B2.

(i) Any purported transfer of a Note not in accordance with this Section 2.5 shall be null and void and shall not be given effect for any purpose whatsoever.

(j) The Note Registrars, the Trustee and the Issuer shall be entitled to conclusively rely on any transferor and transferee certificate delivered pursuant to this Section 2.5 and shall be able to presume conclusively the continuing accuracy thereof, in each case without further inquiry or investigation.

2.6 Mutilated, Defaced, Destroyed, Lost or Stolen Note

If (a) any mutilated or defaced Note is surrendered to a Transfer Agent, or if there shall be delivered to the Issuer, the Trustee and the relevant Transfer Agent evidence to their reasonable satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the Issuer, the Trustee and such Transfer Agent such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Issuer, the Trustee or such Transfer Agent that such Note has been acquired by a

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protected purchaser, the Issuer shall execute and, upon Issuer Order, the Trustee shall authenticate and deliver to the Holder, in lieu of any such mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor (including the same date of issuance) and equal principal or face amount, registered in the same manner, dated the date of its authentication, bearing interest from the date to which interest has been paid on the mutilated, defaced, destroyed, lost or stolen Note and bearing a number not contemporaneously outstanding.

If, after delivery of such new Note, a protected purchaser of the predecessor Note presents for payment, transfer or exchange such predecessor Note, the Issuer, the Transfer Agent and the Trustee shall be entitled to recover such new Note from the Person to whom it was delivered or any Person taking therefrom, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer, the Trustee and the Transfer Agent in connection therewith.

In case any such mutilated, defaced, destroyed, lost or stolen Note has become due and payable, the Issuer in their discretion may, instead of issuing a new Note pay such Note without requiring surrender thereof except that any mutilated or defaced Note shall be surrendered.

Upon the issuance of any new Note under this Section 2.6, the Issuer may require the payment by the Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Note issued pursuant to this Section 2.6 in lieu of any mutilated, defaced, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer and such new Note shall be entitled, subject to the second paragraph of this Section 2.6, to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section 2.6 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, defaced, destroyed, lost or stolen Notes.

2.7 Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved

(a)

(i) Interest on the Notes shall accrue on the outstanding principal amount (or, in the case of the Class A-R Notes, the Outstanding Class A-R Funded Amount) of the Notes for each day during any Monthly Period in amount equal to (i) all Interest Collections received during such Monthly Period divided by (ii) the actual number of days during such Monthly Period.

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Interest Collections received by the Issuer will be credited to the Interest Collection Subaccount. Interest Collections that are received in a Monthly Period will be payable to the Holders on the related Payment Date.

(ii) Any Class A-R Noteholder that has deposited a prefunding amount in a Class A-R Prepayment Account pursuant to and in accordance with the Revolving Credit Note Agreement shall be entitled to receive an amount equal to earnings in respect of Eligible Investments in such Class A-R Prepayment Account (or subaccount, if applicable) received during the preceding Monthly Period (such amount, the Eligible Investment Income for the applicable Monthly Period with respect to such Class A-R Prepayment Account), and the Trustee shall withdraw the Eligible Investment Income from each Class A-R Prepayment Account on the last day of each Monthly Period and distribute it to the relevant Class A-R Noteholder on the applicable Payment Date without regard to the Priority of Payments.

(iii) All of the Class A-R Notes are entitled to receive payments pari passu among themselves except as otherwise expressly provided for herein or in the Revolving Credit Note Agreement.

(iv) The Outstanding Class A-R Funded Amount shall be increased by Borrowings under the Revolving Credit Note Agreement. The Outstanding Class A-R Funded Amount will be decreased by repayments pursuant to (A) the Priority of Payments or (B) Sections 2.2 and 2.5 of the Revolving Credit Note Agreement.

(b) Principal Collections received by the Issuer will be credited to the Principal Collection Subaccount. Principal Collections that are received in a Monthly Period will, at the election of the Collateral Manager acting on behalf of the Issuer, either be invested in Eligible Investments to be credited to the Collection Account pursuant to Section 10.2 or reinvested in Portfolio Assets that satisfy the requirements of Section 12.2. No payments of principal will be payable on any Class A Notes or Class A-R Notes prior to their Stated Maturity except (i) upon the occurrence of an Enforcement Event, and (ii) so long as no Event of Default has occurred and is continuing, on any Business Day, as determined by the Issuer at the direction of the Collateral Manager in accordance with Sections 2.2 and 2.5 of the Revolving Credit Note Agreement.

(c) All payments in respect of interest on and principal of the Notes will be made in accordance with the Priority of Payments and Article 13 and, with respect to principal of the Class A-R Notes, Sections 2.2 and 2.5 of the Revolving Credit Note Agreement.

(d) The Paying Agent shall require the previous delivery of properly completed and signed applicable tax certifications (generally, in the case of U.S. Federal income

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tax, either (i) in the case of a United States Person, an Internal Revenue Service Form W-9 (or applicable successor form) or (ii) in the case of a Person that is not a United States Person, (A) if an Event of Default has occurred and is continuing, the applicable Internal Revenue Service Form W-8 (or applicable successor form) and (B) at any other time, an Internal Revenue Service Form W-8IMY to which an Internal Revenue Service Form W-9 in respect of the beneficial owner is attached (or, in each case, the applicable successor form)), any information requested pursuant to the Noteholder Reporting Obligations, or any other certification acceptable to it to enable the Issuer, the Trustee and any Paying Agent to determine their duties and liabilities with respect to any taxes or other charges that they may be required to pay, deduct or withhold from payments in respect of such Note or the Holder or beneficial owner of such Note under any present or future law or regulation of the Cayman Islands, the United States of America, any other jurisdiction or any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation. The Issuer shall not be obligated to pay any additional amounts to the Holders or beneficial owners of the Notes as a result of deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges with respect to the Notes.

(e) Payments in respect of interest on and principal of any Note shall be made by the Trustee, in Dollars to DTC or its nominee with respect to a Global Note and to the Holder or its nominee with respect to a Certificated Note, by wire transfer, as directed by the Holder, in immediately available funds to a Dollar account maintained by DTC or its nominee with respect to a Global Note, and to the Holder or its nominee with respect to a Certificated Note; provided that (1) in the case of a Certificated Note, the Holder thereof shall have provided written wiring instructions to the Trustee on or before the related Record Date and (2) if appropriate instructions for any such wire transfer are not received by the related Record Date, then such payment shall be made by check drawn on a U.S. bank mailed to the address of the Holder specified in the applicable Note Register. Upon final payment due on the Maturity of a Note, the Holder thereof shall present and surrender such Note at the Corporate Trust Office of the Trustee or at the office of any Paying Agent on or prior to such Maturity; provided that in the absence of notice to the Issuer or the Trustee that the applicable Note has been acquired by a protected purchaser, such final payment shall be made without presentation or surrender, if the Trustee and the Issuer shall have been furnished such security or indemnity as may be required by them to save each of them harmless and an undertaking thereafter to surrender such certificate. None of the Issuer, the Trustee, the Collateral Manager, and any Paying Agent will have any responsibility or liability for any aspects of the records maintained by DTC, Euroclear, Clearstream or any of the Agent Members relating to or for payments made thereby on account of beneficial interests in a Global Note. In the case where any final payment of principal and interest is to be made on any Note (other than on the Stated Maturity thereof), the Trustee, in the name and at the

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expense of the Issuer shall, not more than 30 nor less than 10 days prior to the date on which such payment is to be made, mail (by first class mail, postage prepaid) to the Persons entitled thereto at their addresses appearing on the applicable Note Register a notice which shall specify the date on which such payment will be made, the amount of such payment per U.S.$1,000 aggregate principal amount of Notes and the place where Notes may be presented and surrendered for such payment.

(f) Payments to Holders shall be made ratably in the proportion that the Aggregate Outstanding Amount of the Notes registered in the name of each such Holder on the applicable Record Date bears to the Aggregate Outstanding Amount of all Notes on such Record Date.

(g) Notwithstanding any other provision of this Indenture or any other document to which the Issuer may be party, the obligations of the Issuer under the Notes and this Indenture or any other document to which either the Issuer may be party are limited recourse obligations of the Issuer payable solely from the Collateral and following realization of the Collateral, and application of the proceeds thereof in accordance with this Indenture, all obligations of and any claims against the Issuer hereunder or in connection herewith after such realization shall be extinguished and shall not thereafter revive. No recourse shall be had against any Officer, director, employee, shareholder or incorporator of the Issuer, the Collateral Manager or their respective Affiliates, successors or assigns for any amounts payable under the Notes or this Indenture. It is understood that the foregoing provisions of this paragraph (g) shall not (i) prevent recourse to the Collateral for the sums due or to become due under any security, instrument or agreement which is part of the Collateral; or (ii) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Notes or secured by this Indenture until such Collateral has been realized. It is further understood that the foregoing provisions of this paragraph (g) shall not limit the right of any Person to name the Issuer as a party defendant in any Proceeding or in the exercise of any other remedy under the Notes or this Indenture, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any such Person.

(h) Subject to the foregoing provisions of this Section 2.7, each Note delivered under this Indenture and upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to unpaid interest and principal (or other applicable amount) that were carried by such other Note.

2.8 Persons Deemed Owners

The Issuer and the Trustee, and any agent of the Issuer or the Trustee shall treat as the owner of each Note (a) for the purpose of receiving payments on such Note (whether or not such Note is overdue), the Person in whose name such Note is registered on the applicable Note Register at the close of business on the applicable Record Date and (b)

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on any other date for all other purposes whatsoever (whether or not such Note is overdue), the Person in whose name such Note is then registered on the applicable Note Register, and none of the Issuer the Trustee or any agent of the Issuer or the Trustee shall be affected by notice to the contrary.

2.9 Cancellation

All Notes surrendered for payment, registration of transfer, exchange, or mutilated, defaced or deemed lost or stolen, shall be promptly canceled by the Trustee and may not be reissued or resold. No Note may be surrendered (including any surrender in connection with any abandonment, donation, gift, contribution or other event or circumstance) except for payment as provided herein under Section 2.6 or 2.7(e), or for registration of transfer, exchange or for replacement in connection with any Note mutilated, defaced or deemed lost or stolen. Any such Notes shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. No Notes shall be authenticated or registered in lieu of or in exchange for any Notes canceled as provided in this Section 2.9, except as expressly permitted by this Indenture. All canceled Notes held by the Trustee shall be destroyed or held by the Trustee in accordance with its standard retention policy unless the Issuer shall direct by an Issuer Order received prior to destruction that they be returned to it.

2.10 DTC Ceases to be Depository

(a) A Global Note deposited with DTC pursuant to Section 2.2 shall be transferred in the form of a corresponding Certificated Note to the beneficial owners thereof only if (A) such transfer complies with Section 2.5 of this Indenture and (B) either (x) (i) DTC notifies the Issuer that it is unwilling or unable to continue as depository for such Global Note or (ii) DTC ceases to be a Clearing Agency registered under the Exchange Act and, in each case, a successor depository is not appointed by the Issuer within 90 days after such event or (y) an Event of Default has occurred and is continuing and such transfer is requested by the Holder of such Global Note.

(b) Any Global Note that is transferable in the form of a corresponding Certificated Note to the beneficial owner thereof pursuant to this Section 2.10 shall be surrendered by DTC to the Trustee’s office located in the Borough of Manhattan, the City of New York to be so transferred, in whole or from time to time in part, without charge, and the Issuer shall execute and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of definitive physical certificates (pursuant to the instructions of DTC) in authorized denominations. Any Certificated Note delivered in exchange for an interest in a Global Note shall, except as otherwise provided by Section 2.5, bear the legends set forth in the applicable Exhibit A and shall be subject to the transfer restrictions referred to in such legends.

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(c) Subject to the provisions of sub-Section (b) of this Section 2.10, the Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which such Holder is entitled to take under this Indenture or the Notes.

(d) In the event of the occurrence of either of the events specified in sub-Section (a) of this Section 2.10, the Issuer will promptly make available to the Trustee a reasonable supply of Class A Notes in the form of Certificated Notes.

In the event that Certificated Notes are not so issued by the Issuer to such beneficial owners of interests in Global Notes as required by sub-Section (a) of this Section 2.10, the Issuer expressly acknowledges that the beneficial owners shall be entitled to pursue any remedy that the Holders of a Global Note would be entitled to pursue in accordance with Article 5 of this Indenture (but only to the extent of such beneficial owner’s interest in the Global Note) as if corresponding Certificated Notes had been issued; provided that the Trustee shall be entitled to rely upon any certificate of ownership provided by such beneficial owners and/or other forms of reasonable evidence of such ownership (including a certificate in the form of Exhibit E).

2.11 Non-Permitted Holders or Violation of ERISA Representations or Noteholder Reporting Obligations

(a) Notwithstanding anything to the contrary elsewhere in this Indenture, any transfer of a beneficial interest in any Note to a person that is not (i) a Qualified Institutional Buyer and (ii) a Qualified Purchaser (or an entity beneficially owned exclusively by Qualified Purchasers) and that is not made pursuant to an applicable exemption under the Securities Act and the Investment Company Act shall be null and void and any such purported transfer of which the Issuer or the Trustee shall have notice may be disregarded by the Issuer, the Trustee and the Note Registrars for all purposes.

(b) If (x) any person that is not permitted to acquire an interest in a Note or Notes (including in such form) pursuant to Section 2.11(a) shall become the beneficial owner of an interest in such Note or Notes or (y) any Holder of Notes shall fail to comply with the Noteholder Reporting Obligations (any such Person, a Non-Permitted Holder), the Issuer shall, promptly after discovery that such Person is a Non-Permitted Holder by the Issuer or the Trustee (and notice by the Trustee (if a Trust Officer of the Trustee obtains actual knowledge) to the Issuer if the Trustee makes the discovery), send notice to such Non-Permitted Holder demanding that such Non-Permitted Holder transfer its interest in the Notes held by such Person to a Person that is not a Non-Permitted Holder within 30 days after the date of such notice. If such Non-Permitted Holder fails to so transfer such Notes, the Issuer or the Collateral Manager acting for the Issuer shall have the right, without further notice to the Non-Permitted Holder, to sell such Notes or interest in such

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Notes to a purchaser selected by the Issuer that is not a Non-Permitted Holder on such terms as the Issuer may choose. The Issuer, or the Collateral Manager acting on behalf of the Issuer, may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to the Notes and sell such Notes to the highest such bidder, provided that the Collateral Manager, its Affiliates and accounts, funds, clients or portfolios established and controlled by the Collateral Manager or any of its Affiliates shall be entitled to bid in any such sale (to the extent any such entity is not a Non-Permitted Holder). However, the Issuer or the Collateral Manager may select a purchaser by any other means determined by it in its sole discretion. The Holder of each Note, the Non-Permitted Holder and each other Person in the chain of title from the Holder to the Non-Permitted Holder, by its acceptance of an interest in the Notes, agrees to cooperate with the Issuer, the Collateral Manager and the Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted Holder. The terms and conditions of any sale under this Section 2.11(b) shall be determined in the sole discretion of the Issuer, and none of the Issuer, the Trustee, the Note Registrars or the Collateral Manager or any of their Affiliates shall be liable to any Person having an interest in the Notes sold as a result of any such sale or the exercise of such discretion.

(c) Any transfer of a beneficial interest in a Note to a Person who is a Benefit Plan Investor or acting on behalf of or using the assets of any Benefit Plan Investor to acquire such Note (any such Person, a Non-Permitted ERISA Holder) shall be null and void and any such purported transfer of which the Issuer or the Trustee shall have notice may be disregarded by the Issuer, the Trustee and the Note Registrars for all purposes.

(d) If any Non-Permitted ERISA Holder shall become the beneficial owner of an interest in any Note, the Issuer shall, promptly after discovery that such Person is a Non-Permitted ERISA Holder by the Issuer or upon notice from the Trustee (if a Trust Officer of the Trustee obtains actual knowledge), if the Trustee makes the discovery and who agrees to notify the Issuer of such discovery, send notice to such Non-Permitted ERISA Holder demanding that such Non-Permitted ERISA Holder transfer all or any portion of the Notes held by such Person to a Person that is not a Non-Permitted ERISA Holder (and that is otherwise eligible to hold such Notes or an interest therein) within 20 days after the date of such notice. If such Non-Permitted ERISA Holder fails to so transfer such Notes the Issuer or the Collateral Manager acting for the Issuer shall have the right, without further notice to the Non-Permitted ERISA Holder, to sell such Notes or interest in such Notes to a purchaser selected by the Issuer that is not a Non-Permitted ERISA Holder (and that is otherwise eligible to hold such Notes or an interest therein) on such terms as the Issuer may choose. The Issuer, or the Collateral Manager acting on behalf of the Issuer, may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in

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securities similar to the Notes and sell such Notes to the highest such bidder, provided that the Collateral Manager, its Affiliates and accounts, funds, clients or portfolios established and controlled by the Collateral Manager or any of its Affiliates shall be entitled to bid in any such sale (to the extent any such entity is not a Non-Permitted ERISA Holder). However, the Issuer or the Collateral Manager may select a purchaser by any other means determined by it in its sole discretion. The Holder of each Note, the Non-Permitted ERISA Holder and each other Person in the chain of title from the Holder to the Non-Permitted ERISA Holder, by its acceptance of an interest in the Notes agrees to cooperate with the Issuer, the Collateral Manager and the Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted ERISA Holder. The terms and conditions of any sale under this Section 2.11(d) shall be determined in the sole discretion of the Issuer, and none of the Issuer, the Trustee, the Note Registrars or the Collateral Manager or any of their Affiliates shall be liable to any Person having an interest in the Notes sold as a result of any such sale or the exercise of such discretion.

2.12 Tax Certification and Noteholder Reporting Obligations

(a) Each Holder and beneficial owner of a Note, by acceptance of such Note or an interest in such Note, shall be deemed to understand and acknowledge that failure to provide the Issuer, the Trustee or any Paying Agent with the properly completed and signed applicable tax certifications (generally, in the case of U.S. Federal income tax, either (i) in the case of a United States Person, an Internal Revenue Service Form W-9 (or applicable successor form) or (ii) in the case of a Person that is not a United States Person, (A) if an Event of Default has occurred and is continuing, the applicable Internal Revenue Service Form W-8 (or applicable successor form) and (B) at any other time, an Internal Revenue Service Form W-8IMY to which an Internal Revenue Service Form W-9 in respect of the beneficial owner is attached (or, in each case, the applicable successor form)) or the failure to meet its Noteholder Reporting Obligations may result in withholding from payments in respect of such Note, including U.S. Federal withholding or back-up withholding.

(b) If a payment made to a Holder under this Indenture is subject to U.S. federal withholding tax imposed by Sections 1471 through 1474 of the Code (FATCA) then any Holder that may be subject to such withholding shall deliver to the Issuer (or its authorized agent), the Trustee and any Paying Agent at the time or times prescribed by law and at such time or times reasonably requested by the Issuer (or its authorized agent), the Trustee or a Paying Agent, documentation necessary for the Issuer, Trustee or Paying Agent to determine their obligations under FATCA and shall update any such information or documentation provided upon learning that any such information or documentation previously provided has become obsolete or incorrect or is otherwise required (the foregoing requirements of this Section 2.12(b), the Noteholder Reporting Obligations).

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2.13 Additional Issuance of Notes

At the direction of the Collateral Manager, the Issuer may issue and sell, pursuant to a supplemental indenture issued in accordance with Section 8.2 and the other applicable provisions of Article 8, additional notes of any one or more new classes of notes that are fully subordinated to the existing Notes (or to the most junior class of securities of the Issuer issued pursuant to this Indenture, if any class of securities issued pursuant to this Indenture other than the Notes is then Outstanding) and/or additional Notes and use the proceeds to purchase additional Portfolio Assets or as otherwise permitted under this Indenture; provided that, in the case of additional issuances of notes of any one or more new classes of notes and/or additional Notes pursuant to this Indenture, the following conditions are met:

(a) each Holder shall have provided its prior written consent to such issuance;

(b) the terms of each additional note issued must be substantially identical to the respective terms of previously issued notes (except that the interest due on such additional notes will accrue from the issue date of such additional notes and interest, seniority of payments and certain consent or approval rights hereunder may differ among notes that are subordinated to the existing Notes);

(c) receipt by the Trustee of an Opinion of Counsel that such issuance shall not cause the Issuer, the Sole Shareholder or the pool of Collateral to become an investment company required to be registered under the Investment Company Act;

(d) the proceeds of any additional notes (net of fees and expenses incurred in connection with such issuance) shall be treated as Principal Collections and used to purchase additional Portfolio Assets, to invest in Eligible Investments or to apply pursuant to the Priority of Payments;

(e) an opinion of tax counsel of nationally recognized standing in the United States experienced in such matters shall be delivered to the Trustee to the effect that in the case of additional Notes, such issuance would not cause the Holders or beneficial owners of previously issued Notes to be deemed to have sold or exchanged such Notes under Section 1001 of the Code; and

(f) any additional notes issued as described above will, to the extent reasonably practicable, be offered first to Holders of Notes in such amounts as are necessary to preserve their pro rata holdings of Notes.

2.14 Borrowings under the Revolving Credit Note Agreement

(a) On or prior to the Commitment Termination Date, the Issuer (or the Collateral Manager on behalf of the Issuer) may request Borrowings under the Revolving Credit Note Agreement by submitting a Borrowing Request in the form required by the Revolving Credit Note Agreement to the Revolving Credit Note Agent and the Class A-R Noteholders.

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(b) Each Borrowing Request shall (i) be made in writing and delivered to the Revolving Credit Note Agent and the Class A-R Noteholders in accordance with the Revolving Credit Note Agreement, (ii) contain details of the applicable Borrowing requested in the form attached as Exhibit A to the Revolving Credit Note Agreement and (iii) be required to satisfy the conditions applicable to a Borrowing as set forth in the Revolving Credit Note Agreement.

(c) Transfers of the Class A-R Notes are subject to the terms and restrictions set forth in this Indenture and the Revolving Credit Note Agreement.

3. CONDITIONS PRECEDENT

3.1 Conditions to Issuance of Notes on Closing Date

The Notes to be issued on the Closing Date may be registered in the names of the respective Holders thereof and may be executed by the Issuer and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered by the Trustee upon Issuer Order and upon receipt by the Trustee of the following:

(a) Officers’ Certificate of the Issuer Regarding Limited Liability Company Matters. An Officer’s certificate of the Issuer (A) evidencing the authorization of the execution and delivery on behalf of the Issuer of (1) the Transaction Documents to which the Issuer is a party and (2) such related documents as may be required for the purpose of the transactions contemplated therein and (B) certifying that (1) the attached copy of the Authorizing Resolution and Constitutive Documents is, in each case, a true and complete copy thereof, (2) such authorizations have not been amended or rescinded and are in full force and effect on and as of the Closing Date, (3) the Officers of the Issuer authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon and (4) all Portfolio Asset Obligors on all Portfolio Assets have been directed to make all payments under the relevant Underlying Instrument in respect of such Portfolio Asset directly to the Collection Account.

(b) Officers’ Certificate of the Sole Shareholder Regarding Limited Liability Company Matters. An Officer’s certificate of the Sole Shareholder (A) evidencing the authorization by Authorizing Resolution of the execution and delivery of (1) the Transaction Documents to which it is a party and (2) such related documents as may be required for the purpose of the transactions contemplated therein and (B) certifying that (1) the attached copy of the Authorizing Resolution and Constitutive Documents is in each case a true and complete copy thereof, (2) such resolutions have not been amended or rescinded and are in full force and effect on and as of the Closing Date, and (3) the Officers of the Sole Shareholder or its manager authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

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(c) Governmental Approvals. From the Issuer either (A) a certificate of the Issuer, or other official document, evidencing the due authorization, approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of the Issuer that no other authorization, approval or consent of any governmental body is required for the valid issuance of the Notes or (B) an Opinion of Counsel of the Issuer that no such authorization, approval or consent of any governmental body is required for the valid issuance of the Notes except as has been given.

(d) U.S. Counsel Opinions. Opinion of Nixon Peabody LLP, counsel to the Trustee and the Collateral Administrator, and Bingham McCutchen LLP, counsel to the Issuer, Sole Shareholder and Collateral Manager, each dated the Closing Date, substantially in the respective forms of Exhibit C and Exhibit D attached hereto.

(e) Cayman Counsel Opinion. An opinion of Appleby (Cayman) Ltd., Cayman Islands counsel to the Issuer, dated the Closing Date, substantially in the form of Exhibit E attached hereto.

(f) Officers’ Certificates of Issuer Regarding Indenture. A certificate of the Issuer stating that, to the undersigned officer’s knowledge, the Issuer is not in default under this Indenture and that the issuance of the Notes applied for by it will not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its organizational documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in this Indenture relating to the authentication and delivery of the Notes applied for by it have been complied with; and that all expenses due or accrued with respect to the issuance and sale of such Notes or relating to actions taken on or in connection with the Closing Date have been paid or reserves therefor have been made. The Officer’s certificate of the Issuer shall also state that all of its representations and warranties contained herein are true and correct as of the Closing Date.

(g) Transaction Documents. An executed counterpart of each Transaction Document.

(h) Grant of Portfolio Assets. The Grant by the Issuer pursuant to the Granting Clauses of this Indenture of all of the Issuer’s right, title and interest in and to the Portfolio Assets pledged to the Trustee for inclusion in the Collateral on the Closing Date shall be effective, and Delivery of such Collateral (including any promissory note and all other Underlying Instruments related thereto to the extent received by the Issuer) as contemplated by Section 3.2 shall have been effected.

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(i) Certificate of the Issuer Regarding Collateral. A certificate of an Authorized Representative of the Issuer, dated as of the Closing Date, to the effect that:

(i) in the case of each Portfolio Asset pledged to the Trustee, on the Closing Date and immediately prior to the Delivery thereof on the Closing Date;

(A) the Issuer is the owner of each Portfolio Asset free and clear of any liens, claims or encumbrances of any nature whatsoever except for (i) those which are being released on the Closing Date and (ii) those Granted pursuant to this Indenture;

(B) the Issuer has acquired its ownership in each Portfolio Asset in good faith without notice of any adverse claim, except as described in paragraph (A) above;

(C) the Issuer has not assigned, pledged or otherwise encumbered any interest in any such Portfolio Asset (or, if any such interest has been assigned, pledged or otherwise encumbered, it has been released or will be released on the Closing Date) other than interests Granted pursuant to this Indenture;

(D) the Issuer has full right to Grant a security interest in and assign and pledge each Portfolio Asset to the Trustee;

(E) Schedule 1 hereto is a complete list of the Portfolio Assets as of the Closing Date and the information set forth with respect to such Portfolio Asset in Schedule 1 hereto is correct; and

(F) upon Grant by the Issuer, the Trustee has (or will have, upon the filing of the Financing Statement(s) contemplated in Section 7.5 of this Indenture and the execution and delivery of the Issuer Account Control Agreement) a first priority perfected security interest in the Portfolio Assets and other Collateral, except as permitted by this Indenture; and

(ii) each Portfolio Asset that the Collateral Manager on behalf of the Issuer purchased or committed to purchase on or prior to the Closing Date satisfies, or will upon its acquisition satisfy, the requirements of Section 12.2(a).

(j) Accounts. Evidence of the establishment of each of the Accounts.

(k) [Reserved]

(l) Withholding Certificates. From each Holder acquiring Notes on the Closing Date, either (A) a properly completed and duly executed Internal Revenue Service Form W-9 or (B) a properly completed and duly executed Internal Revenue Service Form W-8IMY to which are attached forms described in clause (A) in respect of each beneficial owner of the Notes.

(m) Other Documents. Such other documents as the Trustee may reasonably require.

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3.2 Custodianship; Delivery of Portfolio Assets and Eligible Investments

(a) The Issuer, shall deliver or cause to be delivered to a custodian appointed by the Issuer, which shall be a Securities Intermediary (the Custodian), all Collateral in accordance with the definition of “Deliver”. Initially, the Custodian shall be the Bank. Any successor custodian shall be a State or national bank or trust company that has capital and surplus of at least U.S.$200,000,000 acting as a Securities Intermediary. The Trustee or the Custodian, as applicable, shall hold (i) all Portfolio Assets, Eligible Investments, Cash and other investments purchased in accordance with this Indenture and (ii) all other Collateral otherwise Delivered to the Trustee or the Custodian, as applicable, by or on behalf of the Issuer, in the relevant Account established and maintained pursuant to Article 10; as to which in each case the Trustee shall have entered into the Issuer Account Control Agreement (or an agreement substantially in the form thereof, in the case of a successor custodian) providing, inter alia, that the establishment and maintenance of such Account will be governed by a law of a jurisdiction satisfactory to the Issuer and the Trustee.

(b) Each time that the Collateral Manager on behalf of the Issuer directs or causes the acquisition of any Portfolio Asset, Eligible Investment or other investment, the Collateral Manager (on behalf of the Issuer) shall, if the Portfolio Asset or Eligible Investment is required to be, but has not already been, transferred to the relevant Account, cause the Portfolio Asset, Eligible Investment or other investment to be Delivered to the Custodian to be held in the Custodial Account, or in the case of any Eligible Investment, in the Account in which the funds used to purchase the investment are held in accordance with Article 10, for the benefit of the Trustee in accordance with this Indenture. The security interest of the Trustee in the funds or other property used in connection with the acquisition shall, immediately and without further action on the part of the Trustee, be released. The security interest of the Trustee shall nevertheless come into existence and continue in the related Portfolio Asset or Eligible Investment so acquired, including all interests of the Issuer in to any contracts related to and proceeds of such Portfolio Asset or Eligible Investment.

3.3 Application of Proceeds of Issuance

The Issuer shall apply the proceeds of issuance of the Notes (a) for the purchase of Portfolio Assets, (b) to fund the Expense Account and the Delayed-Draw/Committed Proceeds Account pursuant to and in accordance with Sections 10.3(c) and 10.3(d), respectively, and (c) to fund Eligible Investments.

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4. SATISFACTION AND DISCHARGE

4.1 Satisfaction and Discharge of Indenture

This Indenture shall be discharged and shall cease to be of further effect except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Notes, (iii) rights of Holders to receive payments of principal thereof and interest thereon, (iv) the rights, obligations and immunities of the Trustee hereunder, (v) the rights, obligations and immunities of the Collateral Manager hereunder and under the Collateral Management Agreement, (vi) the rights, obligations and immunities of the Collateral Administrator hereunder and under the Collateral Administration Agreement, and (vii) the rights of Holders as beneficiaries hereof with respect to the property deposited with the Trustee and payable to all or any of them (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture) when:

(a) either:

(i) all Notes theretofore authenticated and delivered to Holders (other than (A) Notes which have been mutilated, defaced, destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.6, (B) Notes for whose payment Cash has theretofore irrevocably been deposited in trust and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 7.3, and (C) Notes in respect of which final payment has been made without presentation or surrender pursuant to Section 2.7(e) have been delivered to the Trustee for cancellation; or

(ii) all Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable, or (B) will become due and payable at their Stated Maturity within one year, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee, in trust for such purpose, Cash or non-callable direct obligations of the United States of America; provided that the obligations are entitled to the full faith and credit of the United States of America or are debt obligations which are rated “Aaa” by Moody’s and “AAA” by S&P, in an amount sufficient, as verified by a firm of Independent certified public accountants which are nationally recognized, to pay and discharge the entire indebtedness on such Notes, for principal and interest to the date of such deposit (in the case of Notes which have become due and payable), or to their Stated Maturity, as the case may be, and shall have Granted to the Trustee a valid perfected security interest in such Eligible Investment that is of first priority or free of any adverse claim, as applicable, and shall have furnished an Opinion of Counsel with respect thereto; provided that this sub-section (ii) shall not apply if an election to act in accordance with the provisions of Section 5.5(a) shall have been made and not rescinded;

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(b) the Issuer has paid or caused to be paid all other sums then due and payable hereunder and the Transaction Documents (including any amounts then due and payable pursuant to the Collateral Administration Agreement and the Collateral Management Agreement) by the Issuer and no other amounts are scheduled to be due and payable by the Issuer;

(c) the Issuer has delivered to the Trustee Officers’ certificates and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with; and

(d) the Issuer has delivered to the Trustee a certificate stating that (i) there is no Collateral that remains subject to the lien of this Indenture and (ii) all funds on deposit in the Accounts have been distributed in accordance with the terms of this Indenture (including the Priority of Payments) or have otherwise been irrevocably deposited in trust with the Trustee for such purpose.

Notwithstanding the satisfaction and discharge of this Indenture, the rights and obligations of the Issuer, the Trustee and, if applicable, the Holders, as the case may be, under Sections 2.7, 4.2, 5.4(d), 5.9, 5.18, 6.6, 6.7, 7.1 and 7.3 shall survive.

4.2 Application of Trust Cash

All Cash and obligations deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it in accordance with the provisions of the Notes, the Revolving Credit Note Agreement and this Indenture, including, without limitation, the Priority of Payments, to the payment of principal and interest, either directly or through any Paying Agent, as the Trustee may determine; and such Cash and obligations shall be held in a segregated account identified as being held in trust for the benefit of the Secured Parties.

4.3 Repayment of Cash Held by Paying Agent

In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all Cash then held by any Paying Agent other than the Trustee under the provisions of this Indenture shall, upon demand of the Issuer, be paid to the Trustee to be held and applied pursuant to Section 7.3 hereof and in accordance with the Priority of Payments and thereupon such Paying Agent shall be released from all further liability with respect to such Cash.

5. REMEDIES

5.1 Events of Default

Event of Default, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a) the Issuer shall default in the payment of any principal, interest or other amount owing under the Notes when due (whether at Stated Maturity, by acceleration, upon optional or mandatory prepayment or otherwise) and such default shall continue for at least three Business Days after notice thereof to the Issuer by any Holder; or

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(b) the failure (i) on any Payment Date to disburse amounts available in the Payment Account in accordance with the Priority of Payments and the continuation of such failure for a period of three Business Days, or (ii) by the Sole Shareholder to make any equity contribution or other amount owing to the Issuer pursuant to the Issuer Contribution Agreement and the continuation of such failure for a period of three Business Days; or

(c) any representation, warranty or certification made herein or pursuant hereto or in or pursuant to any Support Document (or in any modification or supplement hereto or thereto) by the Issuer or the Sole Shareholder shall prove to have been false or misleading as of the time made in any material respect; provided, however, that if any such representation, warranty or certification is (i) remediable and (ii) not the result of fraud or willful misconduct on the part of the Issuer or Sole Shareholder, such representation, warranty or certification continues unremedied for a period of 30 days after the Issuer becomes aware of such false or misleading representation, warranty or certification; or

(d) (i) the Issuer shall default in the performance of any of its other obligations hereunder or (ii) the Issuer or the Sole Shareholder shall default in the performance of any of its obligations under any Support Document, and in each case such default (A) has a material adverse effect on the Holders of the Notes and (B) if remediable, continues unremedied for a period of 10 days after notice thereof to the Issuer by any Holder; or

(e) the Issuer or the Sole Shareholder shall (1) be dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) become insolvent or unable to pay its debts or fail or admit in writing its inability generally to pay its debts as they become due; (3) make a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institute or have instituted against it a 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, or a petition shall be presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) have a resolution

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passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seek or become subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) have a secured party take possession of all or substantially all its assets or have a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party shall maintain possession, or any such process shall not be dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) cause or become subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or

(f) the Issuer or the Sole Shareholder shall consolidate or amalgamate with, or merge with or into, or transfer all or substantially all its assets to, another Person and, at the time of such consolidation, amalgamation, merger or transfer:

(i) the resulting, surviving or transferee Person shall fail to assume all the obligations of the Issuer or the Sole Shareholder under the Notes or any Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement satisfactory to the Holders of all Notes then Outstanding;

(ii) the benefits of any Support Document shall fail to extend (without the unanimous consent of the Holders of all Notes then Outstanding) to the performance by such resulting, surviving or transferee Person of its obligations under such Support Document; or

(iii) the creditworthiness of the resulting, surviving or transferee Person shall be materially weaker than that of the Issuer or the Sole Shareholder, as the case may be, immediately prior to such advance; or

(g) any Transaction Document shall cease to be in full force or effect or the Issuer or the Sole Shareholder shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, any Transaction Document to which it is a party; or

(h) the Constitutive Documents of the Issuer shall be amended, supplemented or otherwise modified, or shall be terminated, without the consent of each Holder, except for any amendment, supplement or other modification that could not reasonably be expected to have a Material Adverse Effect; or

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(i) any of the Issuer, the Sole Shareholder or the pool of Collateral becomes an investment company required to be registered under the Investment Company Act; or

(j) any default, event of default or other similar condition or event (however described) in respect of Sole Shareholder under any obligation for the payment of Indebtedness under any agreement or instrument in an amount greater than U.S.$10,000,000 has resulted in such Indebtedness becoming, or becoming capable at such time of being declared, due and payable under, such agreement or instrument (including as a result of the early termination thereof), before it would otherwise have been due and payable; or

(k) an “Event of Default” or “Additional Termination Event” occurs and is continuing under the ISDA Master Agreement with respect to which the Sole Shareholder is the “Defaulting Party” or “Affected Party” (as each such term is defined therein).

Upon obtaining knowledge of the occurrence of an Event of Default, each of (i) the Issuer, (ii) the Trustee, (iii) the Revolving Credit Note Agent and (iv) the Collateral Manager shall notify each other. Upon the occurrence of an Event of Default known or made known pursuant to the foregoing to a Trust Officer of the Trustee, the Trustee shall, not later than one Business Day thereafter, notify the Holders (as their names appear on the Note Registers), each Paying Agent and DTC of such Event of Default in writing (unless such Event of Default has been waived as provided in Section 5.14).

5.2 Acceleration of Maturity; Rescission and Annulment

(a) If an Event of Default occurs and is continuing (other than an Event of Default specified in Section 5.1(e)), the Trustee may, and shall (upon the written direction of the Majority Noteholders), by notice to the Issuer, declare the principal of all Notes (including, in the case of the Class A-R Notes, the Outstanding Class A-R Funded Amount (including any future additions to such Outstanding Class A-R Funded Amount as a result of additional Borrowings under the Revolving Credit Note Agreement)) to be immediately due and payable, and upon any such declaration such principal, together with all accrued and unpaid interest thereon and other amounts payable hereunder, shall become immediately due and payable. If an Event of Default specified in Section 5.1(e) occurs, such accelerations shall automatically occur without any declaration or other act on the part of the Trustee or any Holder.

(b) At any time after such a declaration of acceleration of maturity has been made and before a judgment or decree for payment of the Cash due has been obtained by the Trustee as hereinafter provided in this Article 5, such declaration may not be rescinded except by the Majority Noteholders.

No such rescission shall affect any subsequent Default or impair any right consequent thereon.

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5.3 Collection of Indebtedness and Suits for Enforcement by Trustee

The Issuer covenants that if a default shall occur in respect of the payment of any principal of or interest when due and payable on any Note, the Issuer will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holder of such Note, the whole amount, if any, then due and payable on such Note for principal and interest with interest upon the overdue principal and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel.

If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may, and shall upon direction of the Majority Noteholders, institute a Proceeding for the collection of the sums so due and unpaid, may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or the Sole Shareholder and collect the Cash adjudged or decreed to be payable in the manner provided by law out of the Collateral.

If an Event of Default has occurred and is continuing, the Trustee may in its discretion, and shall upon written direction of the Majority Noteholders, proceed to protect and enforce its rights and the rights of the Secured Parties by such appropriate Proceedings as the Trustee shall deem most effectual (if no such direction is received by the Trustee) or as the Trustee may be directed by the Majority Noteholders, to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Trustee by this Indenture or by law.

Subject always to the provisions of Section 5.8, in case there shall be pending Proceedings relative to the Issuer or the Sole Shareholder under the Bankruptcy Law or any other applicable bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or the Sole Shareholder or their respective property or such other obligor or its property, or in case of any other comparable Proceedings relative to the Issuer or the Sole Shareholder, or the creditors or property of the Issuer or the Sole Shareholder, the Trustee, regardless of whether the principal of any Note shall then be due and payable as therein expressed or by declaration or otherwise and regardless of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.3, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

(a) to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes upon direction by the Majority Noteholders and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their

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respective agents, attorneys and counsel, and for reimbursement of all reasonable expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Holders allowed in any Proceedings relative to the Issuer or the Sole Shareholder or to the creditors or property of the Issuer or the Sole Shareholder;

(b) unless prohibited by applicable law and regulations, to vote on behalf of the Holders upon the direction of the Majority Noteholders, in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency Proceedings or Person performing similar functions in comparable Proceedings; and

(c) to collect and receive any Cash or other property payable to or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Holders and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or other similar official is hereby authorized by each of the Holders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Holders to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Holders, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holders, as applicable, in any such Proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

In any Proceedings brought by the Trustee on behalf of the Holders of the Notes (and any such Proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Notes.

Notwithstanding anything in this Section 5.3 to the contrary, the Trustee may not sell or liquidate the Collateral or institute Proceedings in furtherance thereof pursuant to this Section 5.3 except according to the provisions specified in Section 5.5(a).

5.4 Remedies

(a) If an Event of Default shall have occurred and be continuing, and the Notes have been declared or have become due and payable (an Acceleration Event) and such Acceleration Event and its consequences have not been rescinded and annulled, the Issuer agrees that the Trustee may, and shall, upon written direction of the Majority Noteholders, to the extent permitted by applicable law, exercise one or more of the following rights, privileges and remedies:

(i) with respect to each Portfolio Asset, the Trustee (at the direction of the Majority Noteholders) may direct each Portfolio Asset Obligor thereon under the relevant Underlying Instrument to pay all amounts payable under such Underlying Instrument to (or to the order of) the Trustee in satisfaction of all payment obligations thereunder;

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(ii) the Trustee in its discretion may, in its name or in the name of the Issuer or otherwise, demand, sue for, collect or receive any money or property at any time payable or receivable on account of or in exchange for the Portfolio Assets and other Collateral but shall be under no obligation to do so;

(iii) the Trustee may set-off any amounts payable by the Issuer with respect to any obligations against any Collateral in the form of Cash; and

(iv) institute Proceedings for the collection of all amounts then payable on the Notes or otherwise payable under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Portfolio Assets and other Collateral any Cash adjudged due;

(v) sell or cause the sale of all or a portion of the Portfolio Assets and other Collateral or rights or interests therein, at one or more public or private sales called and conducted in any manner permitted by law and in accordance with Section 5.17 hereof;

(vi) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Portfolio Assets and other Collateral;

(vii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Trustee and the Holders of the Notes hereunder (including exercising all rights of the Trustee under any Support Document); and

(viii) exercise any other rights and remedies that may be available at law or in equity;

provided that the Trustee may not sell or liquidate the Collateral or institute Proceedings in furtherance thereof pursuant to this Section 5.4 except according to the provisions of Section 5.5(a).

The Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking firm of national reputation (the cost of which shall be payable

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as an Administrative Expense) in structuring and distributing securities similar to the Notes, which may be the Valuation Agent, as to the feasibility of any action proposed to be taken in accordance with this Section 5.4 and as to the sufficiency of the proceeds and other amounts receivable with respect to the Collateral to make the required payments of principal of and interest on the Notes which opinion shall be conclusive evidence as to such feasibility or sufficiency.

(b) If an Event of Default as described in Section 5.1(d) hereof shall have occurred and be continuing the Trustee shall be entitled, and at the direction of the Majority Noteholders shall, institute (or cause the Issuer to institute, in which case the Issuer shall comply with any instruction of the Trustee with respect to such Proceeding) a Proceeding solely to compel performance of the covenant or agreement or to cure the representation or warranty, the breach of which gave rise to the Event of Default under such Section, and enforce any equitable decree or order arising from such Proceeding.

(c) Upon any sale, whether made under the power of sale hereby given or by virtue of judicial Proceedings, any Secured Party may bid for and purchase the Collateral or any part thereof and, upon compliance with the terms of sale, may hold, retain, possess or dispose of such property in its or their own absolute right without accountability.

Upon any sale, whether made under the power of sale hereby given or by virtue of judicial Proceedings, the receipt of Cash by the Trustee, or of the Officer making a sale under judicial Proceedings, shall be a sufficient discharge to the purchaser or purchasers at any sale for its or their purchase, and such purchaser or purchasers shall not be obliged to see to the application thereof.

Any such sale, whether under any power of sale hereby given or by virtue of judicial Proceedings, shall bind the Issuer, the Trustee and the Holders of the Notes, shall operate to divest all right, title and interest whatsoever, either at law or in equity, of each of them in and to the property sold, and shall be a perpetual bar, both at law and in equity, against each of them and their successors and assigns, and against any and all Persons claiming through or under them.

(d) Notwithstanding any other provision of this Indenture, none of the Trustee, the Secured Parties or the Holders may, prior to the date which is one year (or if longer, any applicable preference period) and one day after the payment in full of all Notes and any other debt obligations of the Issuer that have been rated upon issuance by any rating agency at the request of the Issuer, 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 Cayman Islands, U.S. Federal or State bankruptcy or similar laws. Nothing in this Section 5.4 shall preclude, or be deemed to estop, the Trustee, any Secured Party or any Holder (i) from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily

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filed or commenced by the Issuer or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Trustee, such Secured Party or such Holder, respectively, or (ii) from commencing against the Issuer or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceeding.

5.5 Optional Preservation of Collateral

(a) Notwithstanding anything to the contrary herein, if an Event of Default shall have occurred and be continuing, the Trustee shall retain the Collateral securing the Notes intact, collect and cause the collection of the proceeds thereof and make and apply all payments and deposits and maintain all accounts in respect of the Collateral and the Notes in accordance with the Priority of Payments and the provisions of Article 10 and Article 12 unless either:

(i) (A) the Trustee, pursuant to Section 5.5(c), determines that the anticipated proceeds of a sale or liquidation of the Collateral (after deducting the reasonable expenses of such sale or liquidation) would be sufficient to discharge in full (1) the Outstanding Class A-R Funded Amount and any other amounts due and unpaid in respect of the Class A-R Notes, (2) the amounts then due (or, in the case of interest, accrued) and unpaid on the Class A Notes for principal and interest, and in the case of clauses (1) and (2), all other amounts that, pursuant to the Priority of Payments, are required to be paid prior to such payments on such Notes (including amounts due and owing as Administrative Expenses); and (B) the Majority Noteholders agree with such determination; or

(ii) the Majority Noteholders direct the sale and liquidation of the Collateral.

The Trustee shall give written notice of the retention of the Collateral to the Issuer with a copy to the Collateral Manager and to the Revolving Credit Note Agent. So long as such Event of Default is continuing, any such retention pursuant to this Section 5.5(a) may be rescinded at any time when the conditions specified in clause (i) or (ii) exist.

(b) Nothing contained in Section 5.5(a) shall be construed to require the Trustee to sell the Collateral securing the Notes if the conditions set forth in clause (i) or (ii) of Section 5.5(a) are not satisfied. Nothing contained in Section 5.5(a) shall be construed to require the Trustee to preserve the Collateral securing the Notes if prohibited by applicable law.

(c) In determining whether the condition specified in Section 5.5(a)(i) exists, the Trustee shall compute the anticipated proceeds of sale or liquidation on the basis of the Current Price of each Portfolio Asset. In addition, for the purposes of determining issues relating to the execution of a sale or liquidation of the Collateral and the execution of a sale or other liquidation thereof in connection

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with a determination whether the condition specified in Section 5.5(a)(i) exists, the Trustee may retain and rely on an opinion of an Independent investment banking firm of national reputation (the cost of which shall be payable as an Administrative Expense).

The Trustee shall deliver to the Holders and the Collateral Manager a report stating the results of any determination required pursuant to Section 5.5(a)(i) no later than 10 days after such determination is made. The Trustee shall make the determinations required by Section 5.5(a)(i) within 30 days after an Event of Default and at the request of the Majority Noteholders at any time during which the Trustee retains the Collateral pursuant to Section 5.5(a)(i).

(d) This Section 5.5 shall in all respects be subject to the application of Section 12.1(c). In the event of any conflicting notice or instruction delivered to the Trustee pursuant to Section 12.1(c) and pursuant to this Section 5, the notice or instruction delivered to the Trustee pursuant to Section 12.1(c) shall govern and the Trustee shall follow, and entitled to rely upon, such notice or instruction delivered to the Trustee pursuant to Section 12.1(c).

5.6 Trustee May Enforce Claims Without Possession of Notes

All rights of action and claims under this Indenture or under any of the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceeding relating thereto, and any such action or Proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be applied as set forth in Section 5.7 hereof.

5.7 Application of Cash Collected

Any Cash collected by the Trustee with respect to the Notes pursuant to this Article 5 and any Cash that may then be held or thereafter received by the Trustee with respect to the Notes hereunder shall be applied, in accordance with the provisions of Section 11.1(a)(iii), at the date or dates fixed by the Trustee (each such date to occur on a Payment Date). Upon the final distribution of all proceeds of any liquidation effected hereunder, the provisions of Section 4.1(b) shall be deemed satisfied for the purposes of discharging this Indenture pursuant to Article 4.

5.8 Limitation on Suits

No Holder of any Note shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(a) such Holder has previously given to the Trustee written notice of an Event of Default;

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(b) the Majority Noteholders shall have made written request to the Trustee to institute Proceedings in respect of such Event of Default in its own name as Trustee hereunder and such Holder or Holders have provided the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities to be incurred in compliance with such request;

(c) the Trustee, for 30 days after its receipt of such notice, request and provision of such indemnity, has failed to institute any such Proceeding; and

(d) no direction inconsistent with such written request has been given to the Trustee during such 30-day period by the Majority Noteholders; it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders subject to and in accordance with the Priority of Payments.

5.9 Unconditional Rights of Holders to Receive Principal and Interest

Subject to Section 2.7(g), but notwithstanding any other provision of this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Note, as such principal, interest and other amounts become due and payable in accordance with the Priority of Payments, as the case may be, and, subject to the provisions of Section 5.8, to institute proceedings for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

5.10 Restoration of Rights and Remedies

If the Trustee or any Holder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Issuer, the Trustee and the Holder shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holder shall continue as though no such Proceeding had been instituted.

5.11 Rights and Remedies Cumulative

No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

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5.12 Delay or Omission Not Waiver

No delay or omission of the Trustee or any Holder of Notes to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein or of a subsequent Event of Default. Every right and remedy given by this Article 5 or by law to the Trustee or to the Holders of the Notes may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of the Notes.

5.13 Control by Majority Noteholders

Notwithstanding any other provision of this Indenture, the Majority Noteholders shall have the right following the occurrence, and during the continuance of, an Event of Default to cause the institution of and direct the time, method and place of conducting any Proceeding for any remedy available to the Trustee; provided that:

(a) such direction shall not conflict with any rule of law or with any express provision of this Indenture;

(b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction; provided that subject to Section 6.1, the Trustee need not take any action that it determines might involve it in liability (unless the Trustee has received the indemnity as set forth in sub-Section (c) below);

(c) the Trustee shall have been provided with indemnity reasonably satisfactory to it; and

(d) notwithstanding the foregoing, any direction to the Trustee to undertake a Sale of the Collateral must satisfy the requirements of Section 5.5.

5.14 Waiver of Past Defaults

Prior to the time a judgment or decree for payment of the Cash due has been obtained by the Trustee, as provided in this Article 5, Holders of the Notes may waive any past Event of Default or any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default and its consequences; provided that any such Event of Default or occurrence in respect of a covenant or provision hereof cannot be modified or amended without the waiver or consent of each Holder.

In the case of any such waiver, the Issuer, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. The Trustee shall promptly give written notice of any such waiver to the Collateral Manager, the Revolving Credit Note Agent and each Holder.

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Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

5.15 Undertaking for Costs

All parties to this Indenture agree, and each Holder of any Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in Aggregate Outstanding Amount of the Notes, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Note on or after the applicable Stated Maturity.

5.16 Waiver of Stay or Extension Laws

The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any valuation, appraisement, redemption or marshalling law or rights, in each case wherever enacted, now or at any time hereafter in force, which may affect the covenants, the performance of or any remedies under this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law or rights, and covenant that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted or rights created.

5.17 Sale of Collateral

(a) The power to effect any sale or other disposition (a Sale) of any portion of the Collateral pursuant to Sections 5.4 and 5.5 shall not be exhausted by any one or more Sales as to any portion of such Collateral remaining unsold, but shall continue unimpaired until the entire Collateral shall have been sold or all amounts secured by the Collateral shall have been paid. The Trustee may upon notice to the Holders, and shall, upon direction of the Majority Noteholders, from time to time postpone any Sale by public announcement made at the time and place of such Sale. The Trustee hereby expressly waives its rights to any amount fixed by law as compensation for any Sale; provided that the Trustee shall be authorized to deduct the reasonable costs, charges and expenses incurred by it in connection with such Sale from the proceeds thereof notwithstanding the provisions of Section 6.7.

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(b) The Trustee, the Collateral Manager or any of the Collateral Manager’s Affiliates may bid for and acquire any portion of the Collateral in connection with a public Sale thereof, and may pay all or part of the purchase price by crediting against amounts owing on the Notes in the case of the Collateral or other amounts secured by the Collateral, all or part of the net proceeds of such Sale after deducting the reasonable costs, charges and expenses incurred by the Trustee, the Collateral Manager or an Affiliate of the Collateral Manager, as the case may be, in connection with such Sale notwithstanding the provisions of Section 6.7 hereof. The Notes need not be produced in order to complete any such Sale, or in order for the net proceeds of such Sale to be credited against amounts owing on the Notes. The Trustee and the Collateral Manager may hold, lease, operate, manage or otherwise deal with any property so acquired in any manner permitted by law in accordance with this Indenture and the Collateral Management Agreement, respectively.

(c) If any portion of the Collateral consists of securities issued without registration under the Securities Act (Unregistered Securities), the Trustee may seek an Opinion of Counsel, or, if no such Opinion of Counsel can be obtained and with the consent of the Majority Noteholders, seek a no action position from the Securities and Exchange Commission or any other relevant Federal or State regulatory authorities, regarding the legality of a public or private Sale of such Unregistered Securities.

(d) The Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Collateral in connection with a Sale thereof. In addition, the Trustee is hereby irrevocably appointed the agent and attorney in fact of the Issuer to transfer and convey its interest in any portion of the Collateral in connection with a Sale thereof, and to take all action necessary to effect such Sale. No purchaser or transferee at such a sale shall be bound to ascertain the Trustee’s authority, to inquire into the satisfaction of any conditions precedent or see to the application of any Cash.

5.18 Action on the Notes

The Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking or obtaining of or application for any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Trustee or the Holders shall be impaired by the recovery of any judgment by the Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the assets of the Issuer.

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6. THE TRUSTEE

6.1 Certain Duties and Responsibilities

(a) Except during the continuance of an Event of Default:

(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; provided that in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they substantially conform to the requirements of this Indenture 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 conform. If a corrected form shall not have been delivered to the Trustee within 15 days after such notice from the Trustee, the Trustee shall so notify the Holders.

(b) In case an Event of Default known to the Trustee has occurred and is continuing, the Trustee shall, prior to the receipt of directions, if any, from the Majority Noteholders, or such other percentage as permitted by this Indenture, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this sub-Section (c) shall not be construed to limit the effect of sub-Section (a) of this Section 6.1;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it shall be proven that the Trustee was negligent in ascertaining the pertinent facts;

(iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Issuer or the Collateral Manager in accordance with this Indenture and/or the Majority Noteholders (or such other percentage as may be required by

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the terms hereof) relating to the time, method and place of conducting any Proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

(iv) no provision of this Indenture shall require the Trustee 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 adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it (if the amount of such funds or risk or liability is reasonably expected not to exceed the amount available for payment to the Trustee pursuant to Section 6.7(a) on the immediately succeeding Payment Date net of the amounts specified in Section 6.7(a), the Trustee shall be deemed to be reasonably assured of such repayment) unless such risk or liability relates to the performance of its ordinary services, including mailing of notices under Article 5, under this Indenture; and

(v) in no event shall the Trustee be liable for special, indirect or consequential loss or damage (including lost profits) even if the Trustee has been advised of the likelihood of such damages and regardless of such action.

(d) For all purposes under this Indenture, the Trustee shall not be deemed to have notice or knowledge of any Event of Default described in Sections 5.1(e) or 5.1(i) unless a Trust Officer assigned to and working in the Corporate Trust Office has actual knowledge thereof or unless written notice of any event which is in fact such an Event of Default or Default is received by the Trustee at the Corporate Trust Office, and such notice references the Notes generally, the Issuer, the Collateral or this Indenture. For purposes of determining the Trustee’s responsibility and liability hereunder, whenever reference is made in this Indenture to such an Event of Default or a Default, such reference shall be construed to refer only to such an Event of Default or Default of which the Trustee is deemed to have notice as described in this Section 6.1.

(e) Upon the Trustee receiving written notice from the Collateral Manager that an event constituting “Cause” as defined in the Collateral Management Agreement has occurred, the Trustee shall, not later than one Business Day thereafter, notify the Holders (as their names appear in the Note Registers).

(f) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.1.

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6.2 Notice of Default

Promptly (and in no event later than three Business Days) after the occurrence of any Default actually known to a Trust Officer of the Trustee or after any declaration of acceleration has been made or delivered to the Trustee pursuant to Section 5.2, the Trustee shall transmit by mail to the Issuer, Collateral Manager, the Revolving Credit Note Agent and all Holders of Notes, as their names and addresses appear on the Note Registers, notice of all Defaults hereunder known to the Trustee, unless such Default shall have been cured or waived.

6.3 Certain Rights of Trustee

Except as otherwise provided in Section 6.1:

(a) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b) any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer Order, as the case may be;

(c) whenever in the administration of this Indenture the Trustee shall (i) deem it desirable that a matter of fact be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s certificate or (ii) be required to determine the value of any Collateral or funds hereunder or the cash flows projected to be received therefrom, the Trustee may, in the absence of bad faith on its part, rely on reports of nationally recognized accountants, investment bankers or other Persons qualified to provide the information required to make such determination, including nationally recognized dealers in securities of the type being valued and securities quotation services;

(d) as a condition to the taking or omitting of any action by it hereunder, the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise or to honor any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have provided to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities which might reasonably be incurred by it in compliance with such request or direction;

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(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note or other paper or document, but the Trustee, in its discretion, may, and upon the written direction of Holders of at least 25% of the Outstanding Notes shall, make such further inquiry or investigation into such facts or matters as it may see fit or as it shall be directed, and the Trustee shall be entitled, on reasonable prior notice to the Issuer and the Collateral Manager, to examine the books and records relating to the Notes and the Collateral, personally or by agent or attorney, during the Issuer’ or the Collateral Manager’s normal business hours; provided that the Trustee shall, and shall cause its agents to, hold in confidence all such information, except (i) to the extent disclosure may be required by law by any regulatory or governmental authority and (ii) to the extent that the Trustee, in its sole discretion, may determine that such disclosure is consistent with its obligations hereunder; provided, further, that the Trustee may disclose on a confidential basis any such information to its agents, attorneys and auditors in connection with the performance of its responsibilities hereunder;

(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys; provided that the Trustee shall not be responsible for any misconduct or negligence on the part of any non-Affiliated agent appointed and supervised, or non-Affiliated attorney appointed, with due care by it hereunder;

(h) Subject to Section 6.1(b), the Trustee shall not be liable for any action it takes or omits to take in good faith that it reasonably believes to be authorized or within its rights or powers hereunder;

(i) nothing herein shall be construed to impose an obligation on the part of the Trustee to recalculate, evaluate or verify or independently determine the accuracy of any report, certificate or information received from the Issuer or Collateral Manager (unless and except to the extent otherwise expressly set forth herein); provided that nothing in this clause (i) shall supersede or modify the responsibilities and duties of the Collateral Administrator under the Collateral Administration Agreement;

(j) to the extent any defined term hereunder, or any calculation required to be made or determined by the Trustee hereunder, is dependent upon or defined by reference to generally accepted accounting principles (as in effect in the United States of America) (GAAP), the Trustee shall be entitled to request and receive (and rely upon) instruction from the Issuer or, in the absence of its receipt of timely instruction therefrom, shall be entitled to obtain from an Independent accountant at the expense of the Issuer, as to the application of GAAP in such connection, in any instance;

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(k) the Trustee shall not be liable for the actions or omissions of the Collateral Manager, the Issuer and any Paying Agent (other than the Trustee) and without limiting the foregoing, the Trustee shall not be under any obligation to monitor, evaluate or verify compliance by the Collateral Manager with the terms of the Collateral Management Agreement, or to verify or independently determine the accuracy of information received by the Trustee from the Collateral Manager (or from any selling institution, agent bank, trustee or similar source) with respect to the Collateral;

(l) notwithstanding any term hereof (or any term of the UCC that might otherwise be construed to be applicable to a “securities intermediary” as defined in the UCC) to the contrary, neither the Trustee nor the Custodian shall be under a duty or obligation in connection with the acquisition or Grant by the Issuer to the Trustee of any item constituting the Collateral, or to evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Issuer in connection with its Grant or otherwise, or in that regard to examine any Underlying Instrument, in each case, in order to determine compliance with applicable requirements of and restrictions on transfer in respect of such Collateral;

(m) in the event the Bank is also acting in the capacity of Paying Agent, Note Registrar, Transfer Agent, Collateral Administrator or Custodian, the rights, protections, benefits, immunities and indemnities afforded to the Trustee pursuant to this Article 6 shall also be afforded to the Bank acting in such capacities;

(n) any permissive right of the Trustee to take or refrain from taking actions enumerated in this Indenture shall not be construed as a duty;

(o) to the extent permitted by applicable law, the Trustee shall not be required to give any bond or surety in respect of the execution of this Indenture or otherwise;

(p) the Trustee shall not be deemed to have notice or knowledge of any matter unless a Trust Officer has actual knowledge thereof or unless written notice thereof is received by the Trustee at the Corporate Trust Office and such notice references the Notes generally, the Issuer or this Indenture. Whenever reference is made in this Indenture to a Default or an Event of Default such reference shall, insofar as determining any liability on the part of the Trustee is concerned, be construed to refer only to a Default or an Event of Default of which the Trustee is deemed to have knowledge in accordance with this paragraph;

(q) the Trustee shall not be responsible for delays or failures in performance resulting from acts beyond its control;

(r) to help fight the funding of terrorism and money laundering activities, the Trustee will obtain, verify, and record information that identifies individuals or entities that establish a relationship or open an account with the Trustee. The Trustee will

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ask for the name, address, tax identification number and other information that will allow the Trustee to identify the individual or entity who is establishing the relationship or opening the account. The Trustee may also ask for formation documents such as articles of incorporation, an offering memorandum, or other identifying documents to be provided. In accordance with the U.S. Unlawful Internet Gambling Act (the Gambling Act), the Issuer may not use the Accounts or other facilities of the Bank in the United States to process “restricted transactions” as such term is defined in U.S. 31 CFR Section 132.2(y). Therefore, neither the Issuer nor any Person who has an ownership interest in or control over the Accounts may use it to process or facilitate payments for prohibited internet gambling transactions. For more information about the Gambling Act, including the types of transactions that are prohibited, please refer to the following link: HTTP://WWW.FEDERALRESERVE.GOV/NEWSEVENTS/PRESS/BCREG/20081112B.HTM;

(s) the protections and immunities afforded to the Trustee pursuant to this Indenture and the rights of the Trustee under Section 6.3, 6.4 and 6.5 also shall be afforded to the Collateral Administrator, except to the extent they are inconsistent with the terms of the Collateral Administration Agreement;

(t) in making or disposing of any investment permitted by this Indenture, the Trustee is authorized to deal with itself (in its individual capacity) or with any one or more of its Affiliates, in each case on an arm’s-length basis, whether it or such Affiliate is acting as a subagent of the Trustee or for any third person or dealing as principal for its own account. If otherwise qualified, obligations of the Bank or any of its Affiliates shall qualify as Eligible Investments hereunder;

(u) the Trustee or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder, servicing agent, custodian or subcustodian with respect to certain of the Eligible Investments, (ii) using Affiliates to effect transactions in certain Eligible Investments and (iii) effecting transactions in certain Eligible Investments. Such compensation is not payable or reimbursable under Section 6.7 of this Indenture; and

(v) the Trustee shall have no duty (i) to see to any recording, filing, or depositing of this Indenture or any supplemental indenture or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording, filing or depositing or to any rerecording, refiling or redepositing of any thereof or (ii) to maintain any insurance.

(w) The Trustee is hereby authorized and directed to execute in its capacity as Trustee and deliver in the form presented to it all Transaction Documents to which it is a party, as Trustee.

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6.4 Not Responsible for Recitals or Issuance of Notes

The recitals contained herein and in the Notes, other than the Certificate of Authentication thereon, shall be taken as the statements of the Issuer; and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Indenture (except as may be made with respect to the validity of the Trustee’s obligations hereunder), the Collateral or the Notes. The Trustee shall not be accountable for the use or application by the Issuer of the Notes or the proceeds thereof or any Cash paid to the Issuer pursuant to the provisions hereof.

6.5 May Hold Notes

The Trustee, any Paying Agent, Note Registrar or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of their Affiliates with the same rights it would have if it were not Trustee, Paying Agent, Note Registrar or such other agent.

6.6 Cash Held in Trust

Cash held by the Trustee hereunder shall be held in trust to the extent required herein. The Trustee shall be under no liability for interest on any Cash received by it hereunder except to the extent of income or other gain on investments which are deposits in or certificates of deposit of the Bank in its commercial capacity and income or other gain actually received by the Trustee on Eligible Investments.

6.7 Compensation and Reimbursement

(a) Subject to Section 6.7(b) below, the Issuer agrees:

(i) to pay the Trustee on each Payment Date reasonable compensation, as set forth in a separate fee letter, for all services rendered by it hereunder and under the other Transaction Documents (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(ii) except as otherwise expressly provided herein, to reimburse the Trustee in a timely manner upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture or other Transaction Document (including, without limitation, securities transaction charges and the reasonable compensation and expenses and disbursements of its agents and legal counsel and of any accounting firm or investment banking firm employed by the Trustee pursuant to Section 5.4, 5.5 or 6.3(c) except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith) but with respect to securities transaction charges, only to the extent any such

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charges have not been waived during a Monthly Period due to the Trustee’s receipt of a payment from a financial institution with respect to certain Eligible Investments, as specified by the Collateral Manager;

(iii) to indemnify the Trustee and its Officers, directors, employees and agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on their part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending themselves (including reasonable attorney’s fees and costs) against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder and under any other Transaction Document; and

(iv) to pay the Trustee reasonable additional compensation together with its expenses (including reasonable counsel fees) for any collection action taken pursuant to Section 6.13 hereof.

(b) The Trustee shall receive amounts pursuant to this Section 6.7 and any other amounts payable to it under this Indenture only as provided in Section 10.3(c) and only to the extent that funds are available for the payment thereof. Subject to Section 6.9, the Trustee shall continue to serve as Trustee under this Indenture notwithstanding the fact that the Trustee shall not have received amounts due it hereunder; provided that nothing herein shall impair or affect the Trustee’s rights under Section 6.9. No direction by the Holders shall affect the right of the Trustee to collect amounts owed to it under this Indenture. If on any date when a fee shall be payable to the Trustee pursuant to this Indenture insufficient funds are available for the payment thereof, any portion of a fee not so paid shall be deferred and payable on such later date on which a fee shall be payable and sufficient funds are available therefor.

(c) The Trustee hereby agrees not to cause the filing of a petition in bankruptcy against the Issuer 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 of all Notes (and any other debt obligations of the Issuer that have been rated upon issuance by any rating agency at the request of the Issuer) issued under this Indenture.

(d) The Issuer’s payment obligations to the Trustee under this Section 6.7 shall be secured by the lien of this Indenture, and shall survive the discharge of this Indenture and the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default or an Event of Default under Section 5.1(e), the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable Federal or State bankruptcy, insolvency or similar law.

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6.8 Corporate Trustee Required; Eligibility

There shall at all times be a Trustee hereunder which shall be an Independent organization or entity organized and doing business under the laws of the United States of America or of any State thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least U.S.$200,000,000, subject to supervision or examination by Federal or State authority, having a rating of at least “Baa1” by Moody’s and at least “BBB+” by S&P and having an office within the United States of America. If such organization or entity publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 6.8, the combined capital and surplus of such organization or entity shall be deemed to be its combined capital and surplus as set forth in its most recent published report of condition. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.8, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

6.9 Resignation and Removal; Appointment of Successor

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article 6 shall become effective until the acceptance of appointment by the successor Trustee under Section 6.10.

(b) The Trustee may resign at any time by giving not less than 30 days’ written notice thereof to the Issuer, the Collateral Manager, the Revolving Credit Note Agent and the Holders of the Notes. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees satisfying the requirements of Section 6.8 by written instrument, in duplicate, executed by an Authorized Representative of the Issuer, one copy of which shall be delivered to the Trustee so resigning and one copy to the successor Trustee or Trustees, together with a copy to each Holder and the Collateral Manager; provided that such successor Trustee shall be appointed only upon the written consent of each Holder or, at any time when an Event of Default shall have occurred and be continuing, by an Act of the Majority Noteholders. If no successor Trustee shall have been appointed and an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee or any Holder, on behalf of itself and all others similarly situated, may petition any court of competent jurisdiction for the appointment of a successor Trustee satisfying the requirements of Section 6.8.

(c) The Trustee may be removed at any time by an Act of Holders of 100% of the Aggregate Outstanding Amount of Notes delivered to the Trustee and to the Issuer.

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(d) If at any time:

(i) the Trustee shall cease to be eligible under Section 6.8 and shall fail to resign after written request therefor by the Issuer or by any Holder; or

(ii) the Trustee shall become incapable of acting or shall be adjudged as bankrupt or insolvent or a receiver or liquidator of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case (subject to Section 6.9(a)), (A) the Issuer, by Issuer Order, may remove the Trustee, or (B) subject to Section 5.15, any Holder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Trustee for any reason (other than resignation), the Issuer, by Issuer Order, shall promptly appoint a successor Trustee, provided that any such appointment shall be subject to the prior consent of each Holder. If the Issuer shall fail to appoint a successor Trustee within 60 days after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee may be appointed by Holders of 100% of the Aggregate Outstanding Amount of Notes by written instrument delivered to the Issuer and the retiring Trustee. The successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede any successor Trustee proposed by the Issuer. If no successor Trustee shall have been so appointed by the Issuer or Holders of 100% of the Aggregate Outstanding Amount of Notes and shall have accepted appointment in the manner hereinafter provided, subject to Section 5.15, any Holder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

(f) The Issuer shall give prompt notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event by first class mail, postage prepaid, to the Collateral Manager, the Holders of the Notes as their names and addresses appear in the Note Registers. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. If the Issuer fail to mail such notice within ten days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be given at the expense of the Issuer.

(g) If the Bank shall resign or be removed as Trustee, the Bank shall also resign or be removed as Custodian, Paying Agent, Note Registrar and any other capacity in which the Bank is then acting pursuant to this Indenture or any other Transaction Document.

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6.10 Acceptance of Appointment by Successor

Every successor Trustee appointed hereunder shall meet the requirements of Section 6.8 and shall execute, acknowledge and deliver to the Issuer and the retiring Trustee an instrument accepting such appointment. Upon delivery of the required instruments, the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of the retiring Trustee; but, on request of the Issuer or the Majority Noteholders or the successor Trustee, such retiring Trustee shall, upon payment of its charges then unpaid, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and Cash held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

6.11 Merger, Conversion, Consolidation or Succession to Business of Trustee

Any organization or entity into which the Trustee may be merged or converted or with which it may be consolidated, or any organization or entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any organization or entity succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such organization or entity shall be otherwise qualified and eligible under this Article 6, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any of the Notes has been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes.

6.12 Co-Trustees

At any time or times, for the purpose of meeting the legal requirements of any jurisdiction in which any part of the Collateral may at the time be located, the Issuer and the Trustee shall have power to appoint one or more Persons to act as co-trustee, jointly with the Trustee, of all or any part of the Collateral, with the power to file such proofs of claim and take such other actions pursuant to Section 5.6 herein and to make such claims and enforce such rights of action on behalf of the Holders, as such Holders themselves may have the right to do, subject to the other provisions of this Section 6.12.

The Issuer shall join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint a co-trustee. If the Issuer does not join in such appointment within 15 days after the receipt by them of a request to do so, the Trustee shall have the power to make such appointment.

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Should any written instrument from the Issuer be required by any co-trustee so appointed, more fully confirming to such co-trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer. The Issuer agrees to pay as Administrative Expenses, to the extent funds are available therefor under the Priority of Payments, for any reasonable fees and expenses in connection with such appointment.

Every co-trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms:

(a) the Notes shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of securities, Cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised, solely by the Trustee;

(b) the rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by the appointment of a co-trustee shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co-trustee jointly as shall be provided in the instrument appointing such co-trustee;

(c) the Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Issuer evidenced by an Issuer Order, may accept the resignation of or remove any co-trustee appointed under this Section 6.12, and in case an Event of Default has occurred and is continuing, the Trustee shall have the power to accept the resignation of, or remove, any such co-trustee without the concurrence of the Issuer. A successor to any co-trustee so resigned or removed may be appointed in the manner provided in this Section 6.12;

(d) no co-trustee hereunder shall be personally liable by reason of any act or omission of the Trustee hereunder;

(e) the Trustee shall not be liable by reason of any act or omission of a co-trustee; and

(f) any Act of Holders delivered to the Trustee shall be deemed to have been delivered to each co-trustee.

6.13 Certain Duties of Trustee Related to Delayed Payment of Proceeds

In the event that the Collateral Administrator provides the Trustee with notice that a payment with respect to any item of Collateral has not been received on its Due Date, (a) the Trustee shall promptly notify the Issuer and the Collateral Manager in writing and (b) unless within three Business Days (or the end of the applicable grace period for such payment, if any) after such notice (x) such payment shall have been received by the Trustee or (y) the Trustee has received notice from the Collateral Manager that it is taking action in respect of such payment, the Trustee shall request the issuer of or obligor

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on such item of Collateral, the trustee under the related Underlying Instrument or the paying agent designated by either of them, as the case may be, to make such payment as soon as practicable after such request but in no event later than three Business Days after the date of such request. In the event that such payment is not made within such time period, the Trustee, subject to the provisions of clause (iv) of Section 6.1(c), shall take such action as the Collateral Manager shall direct. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture. In the event that the Issuer or the Collateral Manager requests a release of any Collateral and/or delivers an additional Portfolio Asset in connection with any such action under the Collateral Management Agreement, such release and/or substitution shall be subject to Section 10.6 and Article 12 of this Indenture, as the case may be. Notwithstanding any other provision hereof, the Trustee shall deliver to the Issuer or its designee any payment with respect to any additional Portfolio Asset or other Collateral received after the Due Date thereof to the extent the Issuer previously made provisions for such payment satisfactory to the Trustee in accordance with this Section 6.13 and such payment shall not be deemed part of the Collateral. The foregoing shall not preclude any other exercise of any right or remedy by the Issuer with respect to any default or event of default arising under a Portfolio Asset.

6.14 Authenticating Agents

Upon the request of the Issuer, the Trustee shall, and if the Trustee so chooses the Trustee may, appoint one or more Authenticating Agents with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.4, 2.5, 2.6 and 8.6, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes. For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the authentication of Notes by the Trustee.

Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any further act on the part of the parties hereto or such Authenticating Agent or such successor corporation.

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and the Issuer. The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Issuer. Upon receiving such notice of resignation or upon such a termination, the Trustee shall promptly appoint a successor Authenticating Agent and shall give written notice of such appointment to the Issuer.

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Unless the Authenticating Agent is also the same entity as the Trustee, the Issuer agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services, and reimbursement for its reasonable expenses relating thereto as an Administrative Expense. The provisions of Sections 2.8, 6.4 and 6.5 shall be applicable to any Authenticating Agent.

6.15 Withholding

All payments made to a Holder under this Indenture shall be made without any deduction or withholding for or on account of any present or future Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If any withholding Tax is imposed on the Issuer’s payment (or allocations of income) under the Notes by any such applicable law, such Tax shall reduce the amount otherwise distributable to the relevant Holder. The Trustee is hereby authorized and directed to retain from amounts otherwise distributable to any Holder sufficient funds for the payment of any Tax that is legally owed or required to be withheld by the Issuer by law or pursuant to the Issuer’s agreement with a governmental authority (but such authorization shall not prevent the Trustee from contesting any such Tax in appropriate proceedings and withholding payment of such Tax, if permitted by law, pending the outcome of such proceedings) and to timely remit such amounts to the appropriate taxing authority. The amount of any withholding Tax imposed by law or pursuant to the Issuer’s agreement with a governmental authority with respect to any Note shall be treated as having been paid as interest or principal on such Note to the relevant Holder at the time such amounts are withheld by the Trustee. If there is a possibility that withholding Tax is payable with respect to a distribution, the Paying Agent or the Trustee may, in its sole discretion, withhold such amounts in accordance with this Section 6.15. If any Holder or beneficial owner wishes to apply for a refund of any such withholding Tax, the Trustee shall reasonably cooperate with such Person in providing readily available information so long as such Person agrees to reimburse the Trustee for any out-of-pocket expenses incurred. Nothing herein shall impose an obligation on the part of the Trustee to determine the amount of any Tax or withholding obligation on the part of the Issuer or in respect of the Notes.

6.16 Fiduciary for Holders Only; Agent for each other Secured Party

With respect to the security interest created hereunder, the delivery of any Collateral to the Trustee is to the Trustee as trustee for the Holders and agent for each other Secured Party. In furtherance of the foregoing, the possession by the Trustee of any Collateral, the endorsement to or registration in the name of the Trustee of any Collateral (including without limitation as entitlement holder of the Custodial Account) are all undertaken by the Trustee in its capacity as trustee for the Holders, and agent for each other Secured Party. The Trustee shall not by reason of this Indenture be deemed to be acting as fiduciary for the Collateral Manager, provided that the foregoing shall not limit any of the express obligations of the Trustee under this Indenture.

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6.17 Representations and Warranties of the Bank

The Bank hereby represents and warrants as follows:

(a) Organization. The Bank has been duly organized and is validly existing as a trust company with trust powers under the laws of the Commonwealth of Massachusetts and has the power to conduct its business and affairs as a trustee, paying agent, registrar, transfer agent, custodian and calculation agent.

(b) Authorization; Binding Obligations. The Bank has the corporate power and authority to perform the duties and obligations of Trustee, Paying Agent, Note Registrar, Transfer Agent and Custodian under this Indenture. The Bank has taken all necessary corporate action to authorize the execution, delivery and performance of this Indenture, and all of the documents required to be executed by the Bank pursuant hereto. This Indenture has been duly authorized, executed and delivered by the Bank and constitutes the legal, valid and binding obligation of the Bank enforceable in accordance with its terms subject, as to enforcement, (i) 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 Bank and (ii) to general equitable principles (whether enforcement is considered in a proceeding at law or in equity).

(c) Eligibility. The Bank is eligible under Section 6.8 to serve as Trustee hereunder.

(d) No Conflict. Neither the execution, delivery and performance of this Indenture, nor the consummation of the transactions contemplated by this Indenture, (i) is prohibited by, or requires the Bank to obtain any consent, authorization, approval or registration under, any law, statute, rule, regulation, judgment, order, writ, injunction or decree that is binding upon the Bank or any of its properties or assets, or (ii) will violate any provision of, result in any default or acceleration of any obligations under, result in the creation or imposition of any lien pursuant to, or require any consent under, any material agreement to which the Bank is a party or by which it or any of its property is bound.

7. COVENANTS

7.1 Payment of Principal and Interest

The Issuer will duly and punctually pay the principal of and interest on the Notes, in accordance with the terms of such Notes, the Revolving Credit Note Agreement and this Indenture pursuant to the Priority of Payments.

Amounts properly withheld under the Code or other applicable law or pursuant to the Issuer’s agreement with a governmental authority by any Person from a payment under a Note shall be considered as having been paid by the Issuer to the relevant Holder for all purposes of this Indenture.

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7.2 Maintenance of Office or Agency

The Issuer hereby appoints the Trustee as a Paying Agent for payments on the Notes and the Issuer hereby appoints the Trustee at its applicable Corporate Trust Office, as the Issuer’s agent where Notes may be surrendered for registration of transfer or exchange. The Issuer may at any time and from time to time appoint additional paying agents; provided that no paying agent shall be appointed in a jurisdiction which subjects payments on the Notes to withholding tax solely as a result of such Paying Agent’s activities. If at any time the Issuer shall fail to maintain the appointment of a paying agent, or shall fail to furnish the Trustee with the address thereof, presentations and surrenders may be made (subject to the limitations described in the preceding sentence), and Notes may be presented and surrendered for payment, to the Trustee at its main office.

The Issuer irrevocably consents to service of process on the Issuer by registered or certified mail or hand delivery to the address for notices to the Issuer specified in Section 14.3. Nothing in this Indenture will affect the right of any party to this Indenture to serve process in any other manner permitted by law.

The Issuer shall at all times maintain duplicate copies of the Note Registers at the Corporate Trust Office. The Issuer shall give prompt written notice to the Trustee and the Holders of the appointment or termination of any such agent and of the location and any change in the location of any such office or agency.

7.3 Cash for Note Payments to be Held in Trust

All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Payment Account shall be made on behalf of the Issuer by the Trustee or a Paying Agent.

When the Issuer shall have a Paying Agent that is not also a Note Registrar, it shall furnish, or cause the applicable Note Registrar to furnish, no later than the fifth calendar day after each Record Date a list, if necessary, in such form as such Paying Agent may reasonably request, of the names and addresses of the Holders and of the certificate numbers of individual Notes held by each such Holder.

Whenever the Issuer shall have a Paying Agent with respect to the Notes other than the Trustee, it shall, on or before the Business Day next preceding each Payment Date, direct the Trustee to deposit on such Payment Date with such Paying Agent, if necessary, an aggregate sum sufficient to pay the amounts then becoming due (to the extent funds are then available for such purpose in the Payment Account), such sum to be held in trust for the benefit of the Persons entitled thereto and (unless such Paying Agent is the Trustee) the Issuer shall promptly notify the Trustee of its action or failure so to act. Any

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Cash deposited with a Paying Agent (other than the Trustee) in excess of an amount sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall be paid over by such Paying Agent to the Trustee for application in accordance with Article 10.

The initial Paying Agent shall be as set forth in Section 7.2. Any additional or successor Paying Agents shall be appointed by Issuer Order with written notice thereof to the Trustee. The Issuer shall not appoint any Paying Agent that is not, at the time of such appointment, a depository institution or trust company subject to supervision and examination by Federal and/or State and/or national banking authorities. The Issuer shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee and if the Trustee acts as Paying Agent, it hereby so agrees, subject to the provisions of this Section 7.3, that such Paying Agent will:

(a) allocate all sums received for payment to the Holders of Notes for which it acts as Paying Agent on each Payment Date among such Holders in the proportion specified in the applicable Payment Date Report to the extent permitted by applicable law;

(b) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(c) if such Paying Agent is not the Trustee, immediately resign as a Paying Agent and forthwith pay to the Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment;

(d) if such Paying Agent is not the Trustee, immediately give the Trustee notice of any default by the Issuer (or any other obligor upon the Notes) in the making of any payment required to be made; and

(e) if such Paying Agent is not the Trustee, during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such Cash.

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Except as otherwise required by applicable law, any Cash deposited with the Trustee or any Paying Agent (with respect to Notes) in trust for any payment on any Note and remaining unclaimed for two years after such amount has become due and payable shall be paid to the Issuer on Issuer Order; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment of such amounts (but only to the extent of the amounts so paid to the Issuer) and all liability of the Trustee or such Paying Agent with respect to such trust Cash shall thereupon cease. The Trustee or such Paying Agent, before being required to make any such release of payment, may, but shall not be required to, adopt and employ, at the expense of the Issuer any reasonable means of notification of such release of payment, including, but not limited to, mailing notice of such release to Holders whose right to or interest in Cash due and payable but not claimed is determinable from the records of any Paying Agent, at the last address of record of each such Holder.

7.4 Existence of Issuer

(a) The Issuer shall, to the maximum extent permitted by applicable law, maintain in full force and effect its existence and rights as a company incorporated under the laws of the Cayman Islands, and shall obtain and preserve its qualification to do business as a foreign entity in each jurisdiction in which such qualifications are or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, or any of the Collateral; provided that (x) the Issuer shall be entitled to change its jurisdiction of incorporation from the Cayman Islands to any other jurisdiction reasonably selected by the Issuer so long as (i) the Issuer has received a legal opinion (upon which the Trustee may conclusively rely) to the effect that such change is not disadvantageous in any material respect to the Holders, (ii) the Issuer has taken all necessary steps to ensure that Trustee’s security interest in the Collateral continues in effect and has received an Opinion of Counsel similar to closing date opinion given by counsel to the Issuer to the effect that, after giving effect to such change, Trustee has a first priority perfected security interest in the Collateral and that the Issuer shall not be subject to any obligations for payment of Taxes that it would not have been subject to but for such change of jurisdiction, (iii) written notice of such change shall have been given by the Trustee to the Holders and the Collateral Manager, and (iv) on or prior to the 15th Business Day following receipt of such notice the Trustee shall not have received written notice from Holders of at least 25% of the Outstanding Notes objecting to such change and (y) the Issuer shall be entitled to take any action required by this Indenture within the United States notwithstanding any provision of this Indenture requiring the Issuer to take such action outside of the United States so long as prior to taking any such action the Issuer receives a legal opinion from nationally recognized legal counsel to the effect that it is not necessary to take such action outside of the United States or any political subdivision thereof in order to prevent the Issuer from becoming subject to United States federal, state or local income taxes on a net income basis or any material other taxes to which the Issuer would not otherwise be subject.

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(b) The Issuer shall ensure that all limited liability company or other formalities regarding its existence (including holding regular members’, managers’ or other similar meetings) are followed. The Issuer shall not take any action or conduct its affairs in a manner, that is likely to result in its separate existence being ignored (other than for U.S. Federal income tax purposes) or in its assets and liabilities being substantively consolidated with any other Person in a bankruptcy, reorganization or other insolvency proceeding. Without limiting the foregoing, (i) the Issuer shall not have any subsidiaries, (ii) the Issuer shall not (A) have any employees, (B) engage in any transaction with any Person that would constitute a conflict of interest (provided that its entering into and performance of its obligations under the Transaction Documents shall not be deemed to be a transaction that would constitute a conflict of interest) or (C) pay distributions to its equity owners other than in accordance with the terms of this Indenture and its Constitutive Documents and (iii) the Issuer shall (A) maintain books and records separate from any other Person, (B) maintain its accounts separate from those of any other Person, (C) not commingle its assets with those of any other Person, (D) conduct its own business in its own name, (E) maintain separate financial statements, (F) pay its own liabilities out of its own funds, (G) maintain an arm’s length relationship with its Affiliates, (H) use separate stationery, invoices and checks, (I) hold itself out as a separate Person and (J) correct any known misunderstanding regarding its separate identity.

7.5 Protection of Collateral

(a) The Issuer will take such action as is necessary to maintain the perfection and priority of the security interest of the Trustee in the Collateral; provided that the Issuer shall be entitled to rely on any Opinion of Counsel delivered pursuant to Section 7.6 and any Opinion of Counsel with respect to the same subject matter delivered pursuant to Section 3.1(d) to determine what actions are necessary, and shall be fully protected in so relying on such an Opinion of Counsel, unless the Issuer has actual knowledge that the procedures described in any such Opinion of Counsel are no longer adequate to maintain such perfection and priority. The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and file or authorize the filing of all such Financing Statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action as may be necessary or advisable or desirable to secure the rights and remedies of the Holders of the Notes hereunder and to:

(i) Grant more effectively all or any portion of the Collateral;

(ii) maintain, preserve and perfect any Grant made or to be made by this Indenture including, without limitation, the first priority nature of the lien or carry out more effectively the purposes hereof;

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(iii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture (including any and all actions necessary or desirable as a result of changes in law or regulations);

(iv) enforce any of the Collateral or other instruments or property included in the Collateral;

(v) preserve and defend title to the Collateral and the rights therein of the Trustee and the Holders of the Notes in the Collateral against the claims of all Persons and parties; or

(vi) pay or cause to be paid any and all taxes levied or assessed upon all or any part of the Collateral.

The Issuer hereby authorizes the Trustee to prepare and file any Financing Statement, continuation statement and all other instruments, and take all other actions, required pursuant to this Section 7.5. Such designation shall not impose upon the Trustee, or release or diminish, the Issuer’s obligations under this Section 7.5. The Issuer further authorizes, and shall cause the Issuer’s United States counsel to file, a Financing Statement that names the Issuer as debtor and the Trustee as secured party and that describes “all personal property of the Debtor now owned or hereafter acquired, other than ‘Excepted Property’” (and that defines Excepted Property in accordance with its definition herein) or words of similar effect as the Collateral in which the Trustee has a Grant.

(b) The Issuer shall enforce all of its material rights and remedies under each Transaction Document to which it is a party.

7.6 Opinions as to Collateral

On or before May 31 in each calendar year, commencing in 2014, the Issuer shall furnish to the Trustee an Opinion of Counsel relating to the security interest granted by the Issuer to the Trustee, stating that, as of the date of such opinion, the lien and security interests created by this Indenture with respect to the Collateral remain in effect and that no further action (other than as specified in such opinion) needs to be taken to ensure the continued effectiveness of such lien over the next year.

7.7 Performance of Obligations

(a) The Issuer shall not take any action that would release any Person from any of such Person’s covenants or obligations under any instrument included in the Collateral, except (i) in the case of enforcement action taken with respect to any Defaulted Obligation in accordance with the provisions hereof or (ii) actions by the Collateral Manager under the Collateral Management Agreement and in conformity with this Indenture or as otherwise required hereby (including consenting to any amendment or modification to the documents governing any

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Portfolio Asset); provided, however, that the Issuer shall not be required to take any action following the release of any Obligor under any Portfolio Asset to the extent such release is completed pursuant to the Underlying Instruments related to such Portfolio Asset in accordance with their terms.

(b) The Issuer may, with the prior written consent of each Holder (except in the case of the Collateral Management Agreement and the Collateral Administration Agreement, in which case no consent shall be required), contract with other Persons, including the Collateral Manager, the Trustee and the Collateral Administrator for the performance of actions and obligations to be performed by the Issuer hereunder and under the Collateral Management Agreement by such Persons. Notwithstanding any such arrangement, the Issuer shall remain primarily liable with respect thereto. In the event of such contract, the performance of such actions and obligations by such Persons shall be deemed to be performance of such actions and obligations by the Issuer; and the Issuer will punctually perform, and use their best efforts to cause the Collateral Manager, the Trustee, the Collateral Administrator and such other Person to perform, all of their obligations and agreements contained in the Collateral Management Agreement, this Indenture, the Collateral Administration Agreement or any such other agreement.

7.8 Negative Covenants

(a) The Issuer will not at any time from and after the Closing Date:

(i) sell, transfer, exchange or otherwise dispose of, or pledge, mortgage, hypothecate or otherwise encumber (or permit such to occur or suffer such to exist), any part of the Collateral, except as expressly permitted by this Indenture;

(ii) claim any credit on, make any deduction from, or dispute the enforceability of payment of the principal or interest payable (or any other amount) in respect of the Notes (other than amounts withheld or deducted in accordance with the Code or any applicable laws of the Cayman Islands or other applicable jurisdiction);

(iii) incur or assume or guarantee any Indebtedness, other than the Notes, this Indenture and the transactions contemplated hereby;

(iv) issue any additional class of securities or any additional membership interests;

(v) permit the validity or effectiveness of this Indenture or any Support Document or any Grant hereunder or thereunder to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to this Indenture or the Notes except as may be permitted hereby;

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(vi) except as permitted by this Indenture, take any action that would permit the lien of this Indenture not to constitute a valid first priority security interest in the Collateral;

(vii) amend the Collateral Management Agreement (except pursuant to the terms thereof and Article 15 of this Indenture) or the Issuer Contribution Agreement;

(viii) dissolve or liquidate in whole or in part, except as permitted hereunder or required by applicable law;

(ix) other than as otherwise expressly provided herein, pay any distributions other than in accordance with the Priority of Payments;

(x) permit the formation of any subsidiaries;

(xi) conduct business under any name other than its own;

(xii) have any employees (other than directors to the extent they are employees);

(xiii) sell, transfer, exchange or otherwise dispose of Collateral, or enter into an agreement or commitment to do so or enter into or engage in any business with respect to any part of the Collateral, except as expressly permitted by this Indenture; or

(xiv) apply proceeds of the issuance of Notes for any purpose other than as described in Section 3.3; or

(b) The Issuer will not be party to any agreements without including customary “non-petition” and “limited recourse” provisions therein (and shall not amend or eliminate such provisions in any agreement to which it is party), except for any agreements related to the purchase and sale of any Portfolio Assets or Eligible Investments which contain customary purchase or sale terms or which are documented using customary loan trading documentation.

(c) The Issuer may not acquire any of the Notes (including any Notes surrendered or abandoned).

(d) The Issuer shall not hold Cash in any accounts other than the Accounts and shall not permit any Interest Collections or Principal Collections to be paid into any account except the Collection Account. In the event that any Interest Collections or Principal Collections are paid to any account other than the Collection Account, the Issuer shall procure that such funds are promptly transferred to the Collection Account.

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(e) In the event that, for any reason, the Issuer receives Cash denominated in a Non-USD Currency (from any source), the Issuer shall promptly exchange (or cause the Trustee to exchange at the spot rate of exchange customarily offered by the Trustee for such purposes) such Cash into Dollars and credit such USD funds to the appropriate Account.

7.9 Statement as to Compliance

On or before May 31 in each calendar year commencing in 2014, or immediately if there has been a Default under this Indenture, the Issuer shall deliver to the Trustee (to be forwarded by the Trustee to the Collateral Manager and each Holder making a written request therefor) a certificate of the Issuer that, having made reasonable inquiries of the Collateral Manager, and to the best of the knowledge, information and belief of the Issuer, there did not exist, as at a date not more than five days prior to the date of the certificate, nor had there existed at any time prior thereto since the date of the last certificate (if any), any Default hereunder or, if such Default did then exist or had existed, specifying the same and the nature and status thereof, including actions undertaken to remedy the same, and that the Issuer has complied with all of its obligations under this Indenture or, if such is not the case, specifying those obligations with which it has not complied.

7.10 Issuer May Not Consolidate Except on Certain Terms

The Issuer will not consolidate or merge with or into any other Person or transfer or convey all or substantially all of its assets to any Person, in each case without the prior consent of each Holder.

7.11 Successor Substituted

Upon any consolidation or merger, or transfer or conveyance of all or substantially all of the assets of the Issuer, in accordance with Section 7.10 in which the Issuer is not the surviving corporation, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein. In the event of any such consolidation, merger, transfer or conveyance, the Person named as the “Issuer” in the first paragraph of this Indenture or any successor which shall theretofore have become such in the manner prescribed in this Article 7 may be dissolved, wound up and liquidated at any time thereafter, and such Person thereafter shall be released from its liabilities as obligor and maker on all the Notes and from its obligations under this Indenture.

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7.12 No Other Business

The Issuer shall not have any employees and shall not engage in any business or activity other than issuing, paying and redeeming the Notes issued pursuant to this Indenture and the Revolving Credit Note Agreement, acquiring, holding, selling, exchanging, redeeming and pledging, solely for its own account, Portfolio Assets, Eligible Investments and any other Collateral, and other activities incidental thereto, including entering into, and performing its obligations under, the Transaction Documents to which it is a party and other documents contemplated thereby and/or incidental thereto. The Issuer shall not hold itself out as originating loans, lending funds or securities, making a market in loans or other assets or selling loans or other assets to customers or as willing to enter into, assume, offset, assign or otherwise terminate positions in derivative financial instruments with customers. The Issuer shall not hold itself out as a derivatives dealer willing to enter into either side of, or to offer to enter into, assume, offset, assign or otherwise terminate positions in (i) interest rate, currency, equity, or commodity swaps or caps or (ii) derivative financial instruments (including options, forward contracts, short positions and similar instruments) in any commodity, currency, share of stock, partnership or trust, note, bond, debenture or other evidence of indebtedness, swap or cap. The Issuer shall not amend, or permit the amendment of, its Constitutive Documents without prior written consent of the Trustee and each Holder (unless such amendment could not reasonably be expected to materially adversely affect any of the Issuer, the Holders, the Collateral or the interests of the Trustee and Issuer therein and notice thereof has been given to the Trustee and the Valuation Agent).

7.13 Acquisition of Portfolio Assets

No Portfolio Asset may be acquired by the Issuer at any time unless (a) such Portfolio Asset, and the acquisition thereof, complies with the requirements of Section 12.2 and (b) the purchase of such Portfolio Asset is financed with (i) proceeds of the issuance of the Notes or any additional issuance pursuant to Section 2.13 or (ii) Principal Collections.

7.14 Reporting

At any time when the Issuer is not subject to Section 13 or 15(d) of the Exchange Act and are not exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, upon the request of a Holder or beneficial owner of a Note, the Issuer shall promptly furnish or cause to be furnished Rule 144A Information to such Holder or beneficial owner, to a prospective purchaser of such Note designated by such Holder or beneficial owner, or to the Trustee for delivery to such Holder or beneficial owner or a prospective purchaser designated by such Holder or beneficial owner, as the case may be, in order to permit compliance by such Holder or beneficial owner with Rule 144A under the Securities Act in connection with the resale of such Note. “Rule 144A Information” shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).

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7.15 Certain Tax Matters

(a) The Issuer represents that (i) it is treated as an entity disregarded from its owner, the Sole Shareholder, for U.S. Federal income tax purposes and (ii) the Sole Shareholder is treated as a U.S. person not classified as a corporation for U.S. Federal tax purposes. The Issuer shall not take any action, and shall not permit or cause the Sole Shareholder to take any action, that would result in the Issuer being classified other than as a disregarded entity for U.S. Federal tax purposes.

(b) The Issuer will treat each purchase of Portfolio Assets as a “purchase” for tax accounting and reporting purposes.

(c) The Issuer shall file, or cause to be filed, any tax returns, including information tax returns, required by any governmental authority.

(d) Notwithstanding anything herein to the contrary, the Collateral Manager, the Issuer, the Trustee, the Collateral Administrator, the Placement Agent, the Holders and beneficial owners of the Notes and each employee, representative or other agent of those Persons, may disclose to any and all Persons, without limitation of any kind, the U.S. tax treatment and tax structure of the transactions contemplated by this Indenture and all materials of any kind, including opinions or other tax analyses, that are provided to those Persons. This authorization to disclose the U.S. tax treatment and tax structure does not permit disclosure of information identifying the Collateral Manager, the Issuer, the Trustee, the Collateral Administrator, the Placement Agent, the Holders or any other party to the transactions contemplated by this Indenture, the issuance and sale of the Notes or the pricing (except to the extent such information is relevant to U.S. tax structure or tax treatment of such transactions).

(e) Each of the Collateral Manager, the Issuer, the Trustee, the Collateral Administrator, the Holders and each beneficial owner of the Notes agrees, for U.S. federal income tax purposes, (i) not to treat the Notes as a partnership interest or any other equity interest in the Issuer, (ii) to treat the Issuer as the beneficial owner of the Portfolio Assets; and to report the investment by the Holders in the Notes consistently with such treatment on all tax and information returns and other written communications with any taxing authority.

(f) The Issuer shall not be obligated to pay any additional amounts to Holders or beneficial owners of Notes in respect of any Portfolio Asset as a result of deduction or withholding by an Obligor on such Portfolio Asset for or on account of any present or future taxes, duties, assessments or governmental charges in respect of such Portfolio Asset.

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7.16 Side Letter Security Agreement

The Issuer shall, at the direction of the Majority Noteholders, exercise its rights and remedies under the Side Letter Security Agreement in accordance with their instructions.

8. SUPPLEMENTAL INDENTURES

8.1 Supplemental Indentures Without Consent of Holders of Notes

(a) Without the consent of any Holders (except any consent required by clause (iii) or (vi) below), but only with the prior written consent of the Collateral Manager, the Issuer and the Trustee, at any time and from time to time may, with an Opinion of Counsel (which may be based on an Officer’s certificate provided by the Issuer or the Collateral Manager on behalf of the Issuer) being provided to the Issuer or the Trustee that the Holders of the Notes would not be materially and adversely affected thereby (except in the case of clause (iii) or (vi) below for which no such Opinion of Counsel shall be required), enter into one or more indentures supplemental hereto, in form reasonably satisfactory to the Trustee, for any of the following purposes:

(i) to evidence the succession of another Person to the Issuer and the assumption by any such successor Person of the covenants of the Issuer herein and in the Notes;

(ii) to add to the covenants of the Issuer or the Trustee for the benefit of the Secured Parties;

(iii) to convey, transfer, assign, mortgage or pledge any property to or with the Trustee or add to the conditions, limitations or restrictions on the authorized amount, terms and purposes of the issue, authentication and delivery of the Notes, provided that, if the Holders would be materially and adversely affected by such supplemental indenture entered into pursuant to this clause (iii), the consent to such supplemental indenture has been obtained from each Holder;

(iv) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Sections 6.9, 6.10 and 6.12 hereof;

(v) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or to better assure, convey and confirm unto the Trustee any property subject or required to be subjected to the lien of this Indenture (including, without limitation, any and all actions necessary or desirable as a result of changes in law or regulations, whether pursuant to Section 7.5 or otherwise) or to subject to the lien of this Indenture any additional property;

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(vi) to modify the restrictions on and procedures for resales and other transfers of Notes to reflect any changes in ERISA or other applicable law or regulation (or the interpretation thereof) or to enable the Issuer to rely upon any exemption from registration under the Securities Act or the Investment Company Act or to remove restrictions on resale and transfer to the extent not required thereunder, provided that, if the Holders of any Class would be materially and adversely affected by such supplemental indenture entered into pursuant to this clause (vi), the consent to such supplemental indenture has been obtained from each Holder of such Class;

(vii) otherwise to correct any inconsistency or cure any ambiguity, omission or manifest errors in this Indenture;

(viii) to take any action necessary or advisable to prevent the Issuer or the Trustee from becoming subject to (or otherwise reducing) withholding or other taxes, fees or assessments, including by achieving FATCA Compliance;

(ix) to change the name of the Issuer in connection with the change in name or identity of the Collateral Manager or as otherwise required pursuant to a contractual obligation or to avoid the use of a trade name or trademark in respect of which the Issuer does not have a license; or

(x) to amend, modify or otherwise accommodate changes to this Indenture to comply with any rule or regulation enacted by regulatory agencies of the United States federal government after the Closing Date that are applicable to the Notes or the transactions contemplated by this Indenture.

8.2 Supplemental Indentures With Consent of Holders of Notes

The Trustee and the Issuer shall not execute any indenture supplemental hereto to add any provisions to, or change in any manner or eliminate any of the provisions of, this Indenture or modify in any manner the rights of the Holders of any Class under this Indenture without the written consent of each Holder of such Class and the Collateral Manager, except as otherwise permitted under Section 8.1.

8.3 Execution of Supplemental Indentures

(a) The Trustee shall join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise, except to the extent required by law.

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(b) With respect to any supplemental indenture permitted by Section 8.1, the Trustee and the Issuer shall be entitled to receive and conclusively rely upon an Opinion of Counsel (stating that the supplemental indenture is authorized or permitted by the Indenture and all conditions precedent have been satisfied) as to matters of law (which does not include whether or not the Holders of any Class would be materially and adversely affected by a supplemental indenture), which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering such Opinion of Counsel) or, with respect to matters of fact (including whether or not the Holders of any Class would be materially and adversely affected by a supplemental indenture), a certificate of the Issuer, the Collateral Manager, any investment banking firm or other Independent expert familiar with the market for the Notes pursuant to Section 8.4; provided that, for any supplemental indenture (other than any supplemental indenture entered into pursuant to sub-clauses (iii) and (vi) of Section 8.1(a) for which the consent of the Holders of the Notes would not otherwise be required except as expressly set forth in such clauses) if Holders of at least 25% of the Outstanding Notes of any Class have provided notice to the Trustee at least one Business Day prior to the execution of such supplemental indenture that the Holders of such Class would be materially and adversely affected thereby, the Trustee shall not be entitled so to rely upon a certificate of the Issuer, the Collateral Manager, any investment banking firm or other Independent expert as to whether or not the Holders of such Class would be materially and adversely affected by such supplemental indenture and the Trustee shall not enter into such supplemental indenture without the prior written consent of each Holder of such Class. Such determination shall be conclusive and binding on all present and future Holders. In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article 8 or the modifications thereby of the trusts created by this Indenture, the Trustee and the Issuer shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent thereto have been satisfied. Neither the Trustee nor the Issuer shall be liable for any reliance made in good faith upon such an Opinion of Counsel or a certificate of the Issuer, the Collateral Manager, any investment banking firm or other Independent expert pursuant to Section 8.4.

(c) At the cost of the Issuer, for so long as any Notes shall remain Outstanding, not later than 15 Business Days prior to the execution of any proposed supplemental indenture pursuant to Section 8.1, the Trustee shall deliver to the Collateral Manager, the Revolving Credit Note Agent, the Collateral Administrator and the Holders a notice attaching a copy of such supplemental indenture and indicating

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the proposed date of execution of such supplemental indenture. Following such delivery by the Trustee, if any changes are made to such supplemental indenture other than to correct typographical errors or to adjust formatting, then at the cost of the Issuer, for so long as any Notes shall remain Outstanding, not later than 5 Business Days prior to the execution of such proposed supplemental indenture (provided that the execution of such proposed supplemental indenture shall not in any case occur earlier than the date 15 Business Days after the initial distribution of such proposed supplemental indenture pursuant to the first sentence of this Section 8.3(c)), the Trustee shall deliver to the Collateral Manager, the Revolving Credit Note Agent, the Collateral Administrator and the Holders a copy of such supplemental indenture as revised, indicating the changes that were made. At the cost of the Issuer, the Trustee shall provide to the Holders a copy of the executed supplemental indenture after its execution. Any failure of the Trustee to publish or deliver such copy of the executed supplemental indenture shall not in any way impair or affect the validity of any such supplemental indenture.

(d) It shall not be necessary for any consent or Act of any Holders of Notes to approve the particular form of any proposed supplemental indenture, but it shall be sufficient, if the consent of any such Holders to such proposed supplemental indenture is required, that such Act or consent shall approve the substance thereof.

(e) The Issuer agrees that it will not permit to become effective any supplement or modification to this Indenture which would (i) increase the duties or liabilities of, reduce or eliminate any right or privilege of (including as a result of an effect on the amount or priority of any fees or other amounts payable to the Collateral Manager), or adversely change the economic consequences to, the Collateral Manager, (ii) modify the restrictions on the Sales of Portfolio Assets or (iii) expand or restrict the Collateral Manager’s discretion, and the Collateral Manager shall not be bound thereby unless the Collateral Manager shall have consented in advance thereto in writing.

8.4 Determination of Effect on Holders

(a) Unless notified prior to the execution of a supplemental indenture by Holders of at least 25% of the Outstanding Notes of any Class that the Holders of the Notes of such Class would be materially and adversely affected as set forth in Section 8.3(b), the determination of whether any Holder is materially adversely affected by any proposed supplemental indenture under this Article 8 shall be made based on a certificate of any of the Issuer, the Collateral Manager, any investment banking firm or other Independent expert familiar with the market for the Notes as to the economic effect of the proposed supplemental indenture. Such determination shall be conclusive and binding on all present and future Holders.

(b) The Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated

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to enter into any such supplemental indenture which affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise, except to the extent required by law.

(c) The Trustee shall not be liable for any such determination made in good faith and in reliance upon any certificate referred to in Section 8.4(a), if applicable, and an Opinion of Counsel delivered to the Trustee as described in Section 8.3.

8.5 Effect of Supplemental Indentures

Upon the execution of any supplemental indenture under this Article 8, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore and thereafter authenticated and delivered hereunder shall be bound thereby.

8.6 Reference in Notes to Supplemental Indentures

Notes authenticated and delivered, including as part of a transfer, exchange or replacement pursuant to Article 2 of Notes originally issued hereunder, after the execution of any supplemental indenture pursuant to this Article 8 may, and if required by the Issuer shall, bear a notice in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Notes, so modified as to conform in the opinion of the Trustee and the Issuer to any such supplemental indenture, may be prepared and executed by the Issuer and, upon Issuer Order, authenticated and delivered by the Trustee in exchange for Outstanding Notes.

9. [RESERVED]

10. ACCOUNTS, ACCOUNTINGS AND RELEASES

10.1 Collection of Cash

Except as otherwise expressly provided herein, the Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all Cash and other property payable to or receivable by the Trustee pursuant to this Indenture, including all payments due on the Collateral, in accordance with the terms and conditions of such Collateral. The Trustee shall segregate and hold all such Cash and property received by it in trust for the Holders of the Notes and shall apply it as provided in this Indenture. Each Account shall be established and maintained with (a) a Federal or state-chartered depository institution rated (1) at least “A-1” by S&P (or at least “A+” by S&P if such institution has no short-term rating) and if such institution’s rating falls below “A-1” by S&P (or below “A+” by S&P if such institution has no short-term rating), the assets held in such Account shall be moved within 60 calendar days to another institution that is rated at least “A-1” by S&P (or at least “A+” by S&P if such institution has no short-term rating) and (2) at least “P-1” by Moody’s (or at least “A1” by Moody’s if such institution has no short-term rating) and

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if such institution’s rating falls below “P-1” by Moody’s (or below “A1” by Moody’s if such institution has no short-term rating), the assets held in such Account shall be moved within 60 calendar days to another institution that is rated at least “P-1” by Moody’s (or at least “A1” by Moody’s if such institution has no short-term rating) or (b) in segregated securities accounts with the corporate trust department of a Federal or state-chartered deposit institution subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulation Section 9.10(b). Such institution shall have a combined capital and surplus of at least U.S.$200,000,000. All Cash deposited in the Accounts shall be invested only in Eligible Investments or Portfolio Assets in accordance with the terms of this Indenture. To avoid the consolidation of the Collateral of the Issuer with the general assets of the Bank under any circumstances, the Trustee shall comply, and shall cause the Custodian to comply, with all law applicable to it as a national bank with trust powers holding segregated trust assets in a fiduciary capacity; provided that the foregoing shall not be construed to prevent the Trustee or Custodian from investing the Collateral of the Issuer in Eligible Investments described in clause (ii) of the definition thereof that are obligations of the Bank.

10.2 Collection Account

(a) In accordance with this Indenture and the Issuer Account Control Agreement, the Trustee shall, prior to the Closing Date, cause to be established by the Custodian two segregated securities accounts, one of which will be designated the “Interest Collection Subaccount” and one of which will be designated the “Principal Collection Subaccount” (and which together will comprise the Collection Account), each in the name of the Issuer, subject to the security interest of State Street Bank and Trust Company, as Trustee, for the benefit of the Secured Parties and each of which shall be maintained with the Custodian in accordance with the Issuer Account Control Agreement. The Trustee shall from time to time deposit into the Interest Collection Subaccount, in addition to the deposits required pursuant to Section 10.4(a), immediately upon receipt thereof or upon transfer from the Expense Account or Payment Account, (i) all proceeds received from the disposition of any Collateral to the extent such proceeds constitute “Interest Collections” and (ii) all other Interest Collections. The Trustee shall deposit immediately upon receipt thereof all other amounts remitted to the Collection Account into the Principal Collection Subaccount, including in addition to the deposits required pursuant to Section 10.4(a), all Principal Collections (unless simultaneously reinvested in additional Portfolio Assets in accordance with Section 10.2(c) and Article 12 or in Eligible Investments). All Cash deposited from time to time in the Collection Account pursuant to this Indenture shall be held by the Trustee as part of the Collateral and shall be applied to the purposes herein provided. Subject to Section 10.2(c), amounts in the Collection Account shall be reinvested pursuant to Section 10.4(a).

(b) The Trustee, within one Business Day after receipt of any distribution or other proceeds in respect of the Collateral which are not Cash, shall so notify the Issuer and the Valuation Agent, and the Issuer shall use its commercially reasonable

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efforts to, within five Business Days after receipt of such notice from the Trustee (or as soon as practicable thereafter), sell such distribution or other proceeds for Cash in an arm’s length transaction and deposit the proceeds thereof in the Collection Account; provided that the Issuer need not be required to sell such distributions or other proceeds if it delivers an Issuer Order or an Officer’s certificate to the Trustee and the Valuation Agent certifying that such distributions or other proceeds constitute (i) Portfolio Assets that would have satisfied the requirements of Section 12.2 on the date of receipt thereof had they been acquired directly by the Issuer or (ii) Eligible Investments.

(c) The Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, withdraw funds on deposit in the Principal Collection Subaccount representing Principal Collections (together with Interest Collections but only to the extent used to pay for accrued interest or capitalized interest on an additional Portfolio Asset) and reinvest such funds in additional Portfolio Assets or exercise a warrant held in the Collateral, in each case in accordance with the requirements of Article 12 and such Issuer Order.

(d) At any time, the Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, withdraw funds on deposit in the Principal Collection Subaccount representing Principal Collections and deposit such funds in the Delayed-Draw/Committed Proceeds Account to the extent necessary for the Issuer to comply with funding requirements on Delayed-Draw Loans and Committed Proceeds Assets.

(e) The Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, pay from amounts on deposit in the Principal Collection Subaccount on any Business Day during any Monthly Period any amount required to exercise a warrant or right to acquire securities held in the Collateral in accordance with the requirements of Article 12 and such Issuer Order.

(f) The Trustee shall transfer to the Payment Account, from the Collection Account, for application pursuant to Section 11.1(a), no later than the close of business on the Business Day immediately preceding each Payment Date, the amount set forth to be so transferred in the Payment Date Report for such Payment Date.

(g) The Trustee shall, at the direction of the Issuer (or the Collateral Manager on behalf of the Issuer) and pursuant to and in accordance with Section 2.5(e) of the Revolving Credit Note Agreement, be permitted to transfer the amount of any permitted repayments under the Revolving Credit Note Agreement from the Principal Collection Subaccount to the relevant Class A-R Noteholder’s Class A-R Prepayment Account (or to such account or accounts as such Class A-R Noteholder shall otherwise direct the Trustee in writing).

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10.3 Transaction Accounts

(a) Payment Account. In accordance with this Indenture and the Issuer Account Control Agreement, the Trustee shall, prior to the Closing Date, cause to be established by the Custodian a single, segregated non-interest bearing securities account in the name of the Issuer, subject to the security interest of State Street Bank and Trust Company, as Trustee, for the benefit of the Secured Parties, which shall be designated as the Payment Account, which shall be maintained with the Custodian in accordance with the Issuer Account Control Agreement. The only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Payment Account shall be to pay amounts due and payable on the Notes in accordance with their terms and the provisions of this Indenture. The Issuer shall not have any legal, equitable or beneficial interest in the Payment Account. Amounts in the Payment Account shall remain uninvested.

(b) Custodial Accounts. In accordance with this Indenture and the Issuer Account Control Agreement, the Trustee shall, prior to the Closing Date, cause to be established by the Custodian a single, segregated non-interest bearing securities account in the name of the Issuer, subject to the security interest of State Street Bank and Trust Company, as Trustee, for the benefit of the Secured Parties, which shall be designated as the Custodial Account, which shall be maintained with the Custodian in accordance with the Issuer Account Control Agreement. All Portfolio Assets shall be credited to the Custodial Account. The only permitted withdrawals from the Custodial Account shall be in accordance with the provisions of this Indenture. The Trustee agrees to give the Issuer immediate notice if (to the actual knowledge of a Trust Officer of the Trustee) the Custodial Account or any assets or securities on deposit therein, or otherwise to the credit of the Custodial Account, shall become subject to any writ, order, judgment, warrant of attachment, execution or similar process.

(c) Expense Account. In accordance with this Indenture and the Issuer Account Control Agreement, the Trustee shall, prior to the Closing Date, cause to be established by the Custodian a single, segregated non-interest bearing securities account in the name of the Issuer, subject to the security interest of State Street Bank and Trust Company, as Trustee, for the benefit of the Secured Parties, which shall be designated as the Expense Account, which shall be maintained with the Custodian in accordance with the Issuer Account Control Agreement. On the Closing Date, a portion of the proceeds of the Notes in an amount equal to U.S.$270,275 shall be deposited into the Expense Account for use pursuant to this Section 10.3(c). On any Business Day from and including the Closing Date, the Trustee shall apply funds from the Expense Account, as directed by the Collateral Manager, (A) to pay expenses of the Issuer incurred in connection with the establishment of the Issuer and the structuring and consummation of the Offering and the issuance of the Notes and (B) from time to time to pay accrued and unpaid Administrative Expenses of the Issuer. All funds on deposit in the Expense Account will be invested in Eligible Investments at the direction of the Collateral

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Manager. Any income earned on amounts deposited in the Expense Account will be deposited in the Expense Account upon receipt thereof. All amounts remaining on deposit in the Expense Account at the time when substantially all of the assets of the Issuer have been sold or otherwise disposed of will be deposited by the Trustee into the Principal Collection Subaccount for application as Principal Collections on the immediately succeeding Payment Date. If on any date the Trustee obtains knowledge (or is notified by the Collateral Manager or the Valuation Agent) that the aggregate Administrative Expenses payable at any time during a Monthly Period exceeds, or will exceed, the sum of Cash and Eligible Investments then credited to the Expense Account, the Trustee shall so inform the Collateral Manager, the Valuation Agent and the Sole Shareholder and the Sole Shareholder shall be required, pursuant to the Issuer Contribution Agreement and within one Business Day of such notification, to make a capital contribution to the Issuer in an amount at least equal to such shortfall and the Trustee shall credit any such contribution payment to the Expense Account.

In connection with the application of funds from the Expense Account to pay Administrative Expenses of the Issuer, as the case may be, in accordance with this Section 10.3(c), the Trustee shall remit such funds, to the extent available, as directed and designated in an Issuer Order (which may be in the form of standing instructions, including standing instructions to pay Administrative Expenses in such amounts on any Payment Date and to such entities as indicated in the Payment Date Report in respect of such Payment Date) delivered to the Trustee no later than the Business Day prior to the date of payment of such Administrative Expense.

(d) Delayed-Draw/Committed Proceeds Account. Upon the purchase of any Delayed-Draw Loan or Committed Proceeds Asset not listed on Schedule 1 hereto, funds in an amount equal to the sum of (i) the amounts required to fund the purchase of such Committed Proceeds Asset or (ii) the undrawn portion of any such Delayed-Draw Loan, as the case may be, shall be withdrawn from the Principal Collections Subaccount and deposited by the Trustee in a single, segregated non-interest bearing trust account established at the Custodian and held in the name of the Issuer subject to the security interest of the Trustee for the benefit of the Secured Parties (the Delayed Draw/Committed Proceeds Account). On the Closing Date, a portion of the proceeds of the Notes in an amount equal to U.S.$19,250,000 (being the aggregate amount equal to the sum of (i) the amounts required to fund the purchase of the Committed Proceeds Assets listed in Schedule 1 hereto and (ii) the undrawn portion of the Delayed-Draw Loans listed in Schedule 1 hereto) shall be deposited in the Delayed-Draw/Committed Proceeds Account.

Upon the purchase of any Delayed-Draw Loan or Committed Proceeds Asset, funds deposited in the Delayed Draw/Committed Proceeds Account in respect of any such Portfolio Asset will be treated as part of the purchase price therefor. Amounts on deposit in the Delayed Draw/Committed Proceeds Account will be

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invested in Eligible Investments selected by the Collateral Manager having stated maturities no later than the next Business Day immediately succeeding the date such Eligible Investment was acquired and earnings from all such investments will be deposited in the Interest Collection Subaccount as Interest Collections.

Any funds in the Delayed Draw/Committed Proceeds Account (other than earnings from Eligible Investments therein) will be available solely to cover (i) with respect to any Delayed-Draw Loan, drawdowns thereunder and (ii) with respect to any Committed Proceeds Asset, the payment of the purchase price (and related acquisition costs, as applicable) therefor; provided that, on any date of determination, any excess of (A) the amounts on deposit in the Delayed Draw/Committed Proceeds Account over (B) the sum of (I) the aggregate unfunded funding obligations under all Delayed-Draw Loans (which excess may occur for any reason, including upon (i) the sale or maturity of a Delayed-Draw Loan, (ii) the occurrence of an event of default with respect to any such Delayed-Draw Loan and the termination of any commitment to fund obligations thereunder or (iii) any other event or circumstance which results in the irrevocable reduction of the undrawn commitments under such Delayed-Draw Loan) and (II) the aggregate amount required to fund the acquisition of the Committed Proceeds Assets pursuant to the terms of the Committed Proceeds Transactions, may be transferred by the Trustee (at the written direction of the Collateral Manager on behalf of the Issuer) from time to time as Principal Collections to the Principal Collection Subaccount.

(e) Class A-R Prepayment Account. If required to do so pursuant to the terms of the Revolving Credit Note Agreement, the Trustee shall cause to be established and maintained by the Custodian a single, segregated non-interest bearing securities account, which shall be designated as a Class A-R Prepayment Account, for each Class A-R Noteholder that elects from time to time to prepay (in whole or in part) its Remaining Ununded Facility Commitment, which securities account shall be established in the name of the Trustee as Entitlement Holder in trust for the benefit of the Issuer and such Class A-R Noteholder. The Trustee shall deposit any amounts received from a Class A-R Noteholder to prepay (in whole or in part) its Remaining Unfunded Facility Commitment and all proceeds received from the issuance of such Class A-R Noteholder’s Class A-R Notes into such Class A-R Noteholder’s Class A-R Prepayment Account.

The Trustee shall, pursuant to the written directions of a Class A-R Noteholder, invest and reinvest funds standing to the credit of such Class A-R Noteholder’s Class A-R Prepayment Account in Eligible Investments.

Funds and other property on deposit in any Class A-R Prepayment Account shall only be withdrawn from such account, or paid or transferred to the relevant Class A-R Noteholder with respect to such account, pursuant to and in accordance with the Revolving Credit Note Agreement, and shall not be available to the Issuer for payments to any Secured Parties other than such Class A-R Noteholder.

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With respect to any Holder of Class A-R Notes that has deposited its Class A-R Commitment Amount in a Class A-R Prepayment Account pursuant to the Revolving Credit Note Agreement, on each Payment Date and without regard to the Priority of Payments, the Trustee shall pay directly to such Class A-R Noteholder any Eligible Investment Income received on Eligible Investments standing to the credit of the Class A-R Prepayment Account of such Holder during the preceding Due Period. Eligible Investment Income in a Class A-R Prepayment Account shall not be transferred to the Interest Collection Account or treated as Interest Proceeds. None of the Issuer or the Noteholders other than the related Holder of Class A-R Notes shall have any rights to the amounts in a Class A-R Prepayment Account except to satisfy the obligations of the related Holder under the Class A-R Notes to the Issuer.

The Class A-R Noteholder Prepayment Account and the income arising in such account shall be treated for U.S. Federal, state and local tax purposes as the property and the income of the Class A-R Noteholder.

10.4 Reinvestment of Funds in Accounts; Reports by Trustee

(a) By Issuer Order (which may be in the form of standing instructions), the Issuer (or the Collateral Manager on behalf of the Issuer) shall at all times direct the Trustee to, and, upon receipt of such Issuer Order, the Trustee shall, invest all funds on deposit in the Interest Collection Subaccount, the Principal Collection Subaccount and the Expense Account (other than Principal Collections reinvested in Portfolio Assets pursuant to Section 10.2(c)) as so directed in Eligible Investments having stated maturities no later than the Business Day preceding the next Payment Date (or such shorter maturities expressly provided herein). If prior to the occurrence of an Event of Default, the Issuer shall not have given any such investment directions, the Trustee shall seek instructions from the Collateral Manager within three Business Days after transfer of any funds to such accounts. If the Trustee does not thereafter receive written instructions from the Collateral Manager within five Business Days after transfer of such funds to such accounts, it shall invest and reinvest the funds held in such accounts, as fully as practicable, but only in one or more Eligible Investments of the type described in clause (ii) of the definition of “Eligible Investments” maturing no later than the Business Day immediately preceding the next Payment Date (or such shorter maturities expressly provided herein). If after the occurrence of an Event of Default, the Issuer shall not have given such investment directions to the Trustee for three consecutive days, the Trustee shall invest and reinvest such Cash as fully as practicable in Eligible Investments of the type described in clause (ii) of the definition of “Eligible Investments” maturing not later than the earlier of (i) 30 days after the date of such investment (unless putable at par to the Obligor thereof) or (ii) the Business Day immediately preceding the next Payment Date (or such shorter maturities expressly provided herein). Except to the extent expressly provided otherwise herein, all Eligible Investments shall be credited to the same Account (or subaccount, as the case may be) from which Cash was

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applied to acquire such Eligible Investment, all interest and other income from such Eligible Investment shall be deposited in such Account (or subaccount) and any gain realized from, or loss resulting from, such Eligible Investment shall be credited or charged to such Account (or subaccount). The Trustee shall not in any way be held liable by reason of any insufficiency of such accounts which results from any loss relating to any such investment, provided that nothing herein shall relieve the Bank of (i) its obligations or liabilities under any security or obligation issued by the Bank or any Affiliate thereof or (ii) liability for any loss resulting from gross negligence, willful misconduct or fraud on the part of the Bank or any Affiliate thereof.

(b) The Trustee agrees to give the Issuer immediate notice if any Account or any funds on deposit in any Account, or otherwise to the credit of an Account, shall become subject to any writ, order, judgment, warrant of attachment, execution or similar process.

(c) The Trustee shall supply, in a timely fashion, to the Issuer, the Valuation Agent, each Holder and the Collateral Manager any information regularly maintained by the Trustee that the Issuer, the Valuation Agent, each Holder or the Collateral Manager may from time to time reasonably request with respect to the Portfolio Assets, the Accounts and the other Collateral and provide any other requested information reasonably available to the Trustee by reason of its acting as Trustee hereunder and under the other Transaction Documents to which it is party and required to be provided by Section 10.5 or to permit the Collateral Manager to perform its obligations under the Collateral Management Agreement or the Issuer’s obligations hereunder that have been delegated to the Collateral Manager. The Trustee shall promptly forward to the Collateral Manager, each Holder and the Valuation Agent copies of notices and other writings received by it from the Obligor of any Portfolio Asset or from any Clearing Agency with respect to any Portfolio Asset which notices or writings advise the holders of such Portfolio Asset of any rights that the holders might have with respect thereto (including, without limitation, requests to vote with respect to amendments or waivers and notices of prepayments and redemptions) as well as all periodic financial reports received from such Obligor and Clearing Agencies with respect to such Obligor.

(d) In addition to any credit, withdrawal, transfer or other application of funds with respect to any Account set forth in Article 10, any credit, withdrawal, transfer or other application of funds with respect to any Account authorized elsewhere in this Indenture is hereby authorized.

(e) Any account established under this Indenture may include any number of subaccounts deemed necessary or advisable by the Trustee in the administration of the Accounts.

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10.5 Accountings

(a) Payment Date Report. Not later than the eighth Business Day after the last day of each Monthly Period and commencing in June 2013, the Issuer shall compile and make available (or cause the Collateral Administrator to compile and make available) to the Trustee, the Collateral Manager, the Valuation Agent and, upon written request therefor, to any Holder shown on the Note Registers, a monthly payment date report on a trade date basis (each such report a Payment Date Report). The first Payment Date Report shall be delivered in June 2013 as described above and shall be determined with respect to the Monthly Period ending in May 2013. The Payment Date Report for a calendar month shall contain the following information with respect to the Portfolio Assets and Eligible Investments included in the Collateral, and shall be determined as of the Determination Date for such calendar month:

(i) A schedule titled “Distributions” showing: (A) The Aggregate Outstanding Amount of the Class A Notes at the beginning of the Monthly Period and such amount as a percentage of the original Aggregate Outstanding Amount of the Notes; (B) the Outstanding Class A-R Funded Amount at the beginning of the Monthly Period; (C) Interest Collections payable on the next Payment Date; and (D) the amount of Outstanding Class A-R Funded Amount (if any) to be repaid on the next Payment Date.

(ii) The amounts payable pursuant to each clause of Section 11.1(a)(i), each clause of Section 11.1(a)(ii) and each clause of Section 11.1(a)(iii), as applicable, on the related Payment Date.

(iii) For the Collection Account:

(A) the Balance on deposit in the Collection Account at the end of the related Monthly Period;

(B) the amounts of (x) Interest Collections payable from the Interest Collection Subaccount and (y) Principal Collections payable from the Principal Collection Subaccount, in each case to the Payment Account in order to make payments pursuant to Section 11.1(a)(i) and Section 11.1(a)(ii) on the next Payment Date; and

(C) the Balance remaining in the Collection Account immediately after all payments and deposits to be made on such Payment Date.

Upon receipt of each Payment Date Report, the Trustee shall compare the information contained in such Payment Date Report to the information contained in its records with respect to the Collateral and shall, within three Business Days after receipt of such Payment Date Report, notify the Issuer, the Collateral Administrator, the Valuation Agent, the Revolving Credit Note Agent, and the

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Collateral Manager if the information contained in the Payment Date Report does not conform to the information maintained by the Trustee with respect to the Collateral. In the event that any discrepancy exists, the Trustee and the Issuer, or the Collateral Manager on behalf of the Issuer, shall attempt to resolve the discrepancy. If such discrepancy cannot be promptly resolved, the Trustee shall within five Business Days notify the Collateral Manager and the Valuation Agent, and the Valuation Agent shall review such Payment Date Report and the Trustee’s records to determine the cause of such discrepancy. If such review reveals an error in the Payment Date Report or the Trustee’s records, the Payment Date Report or the Trustee’s records shall be revised accordingly and, as so revised, shall be utilized in making all calculations pursuant to this Indenture and notice of any error in the Payment Date Report shall be sent as soon as practicable by the Issuer to all recipients of such report which may be accomplished by making a notation of such error in the subsequent Payment Date Report.

Each Payment Date Report shall constitute instructions to the Trustee to withdraw funds from the Payment Account and pay or transfer such amounts set forth in such Payment Date Report in the manner specified and in accordance with the priorities established in Section 11.1.

(b) [Reserved]

(c) Daily Reporting. Not later than 12:00 p.m. on each Business Day, the Issuer shall cause the Collateral Administrator to compile and make available to the Trustee, the Revolving Credit Note Agent, the Collateral Manager, the Valuation Agent and, upon written request therefor, any Holder shown on the Note Registers, a daily report in a form agreed to by the parties (each such report, a Daily Report). The Daily Report shall contain the following information:

(i) (x) The Aggregate Principal Balance of Portfolio Assets and (y) with respect to each Account, (I) the Aggregate Principal Balance of Eligible Investments and (II) the Cash balance thereof;

(ii) For each Account, the cash balance of, the Eligible Investments credited to, and each credit or debit (specifying the nature, source and amount);

(iii) A schedule showing the amount of Interest Collections received from the date of determination of the immediately preceding Payment Date Report for (A) Interest Collections from Portfolio Assets (with any Interest Collections consisting of Realized Gains reflected as a separate line item) and (B) Interest Collections from Eligible Investments (with any Interest Collections consisting of Realized Gains reflected as a separate line item);

(iv) A schedule titled “Distributions” showing: (A) The Aggregate Outstanding Amount of the Class A Notes and such amount as a percentage of the original Aggregate Outstanding Amount of the Notes;

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(B) (1) the Outstanding Class A-R Funded Amount, (2) the Outstanding Class A-R Funded Amount as a percentage of the original Aggregate Outstanding Amount of the Class A-R Notes, (3) the Class A-R Commitment Amount with respect to each Class A-R Noteholder and (4) the amount of the Remaining Unfunded Facility Commitment; and (C) the Interest Collections payable on the next Payment Date;

(v) Purchases, prepayments, and sales:

(A) The identity, Principal Balance (other than any accrued interest that was purchased with Principal Collections (but excluding any capitalized interest)), Principal Collections and Interest Collections received, and date for (X) each Portfolio Asset that was released for sale or disposition by the Issuer (and the identity and Principal Balance of each Portfolio Asset which the Issuer has entered into a commitment to sell or dispose) pursuant to Section 12.1 since the end of the last Monthly Period and (Y) each prepayment or redemption of a Portfolio Asset; and

(B) The identity, Principal Balance, Principal Collections and Interest Collections expended, and date for each Portfolio Asset that was purchased by the Issuer (and the identity and Purchase Price of each Portfolio Asset which the Issuer has entered into a commitment to purchase) since the end of the last Monthly Period.

(vi) Trade Date;

(vii) Settlement Date;

(viii) Trade Type;

(ix) Par Amount;

(x) Trade Price;

(xi) Counter Bank Name;

(xii) Trade Amount;

(xiii) Trade Quantity;

(xiv) Trade Settled;

(xv) Accrued Interest;

(xvi) Facility Original Amount Global;

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(xvii) Rate Type (fixed versus floating);

(xviii) Par Amount Traded;

(xix) Par Amount Settled;

(xx) Commitment Settled;

(xxi) Commitment Traded;

(xxii) Outstanding Settled;

(xxiii) Moody’s rating;

(xxiv) S&P rating;

(xxv) With respect to any Portfolio Asset not included in Schedule 1 hereto, the following information:

(A) The Obligor(s) thereon (including the issuer ticker, if any);

(B) The CUSIP or security identifier thereof;

(C) The Principal Balance thereof (other than any accrued interest that was purchased with Principal Collections (but excluding any capitalized interest)) with any capitalized interest reflected as a separate line item;

(D) The related interest rate or spread (including any applicable LIBOR floors), the related interest payment period (quarterly, semi-annually, etc.) and if interest may be capitalized;

(E) The stated maturity thereof;

(F) The related Moody’s Industry Classification;

(G) The related S&P Industry Classification;

(H) The country of domicile of the Portfolio Asset Obligor;

(I) An indication as to whether each such Portfolio Asset (1) is a Senior Secured Loan, (2) is a Second Lien Loan, (3) is a Defaulted Obligation, (4) is a DIP Loan, (5) is a Cov-Lite Loan; (6) is a Bond; (7) pays interest less frequently than quarterly; (8) is an unsecured Loan; (9) is a Deferrable Security; and (10) is a Participation Interest (including the name of the applicable Selling Institution);

(J) The date, if applicable, such Portfolio Asset has become a Defaulted Obligation;

(xxvi) Cash balance of each Account.

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(d) Failure to Provide Accounting. If the Trustee is not the Collateral Administrator and shall not have received any accounting provided for in this Section 10.5 on the first Business Day after the date on which such accounting is due to the Trustee, the Trustee shall notify the Collateral Manager who shall use all reasonable efforts to obtain such accounting by the applicable Payment Date. To the extent the Collateral Manager is required to provide any information or reports pursuant to this Section 10.5 as a result of the failure of the Issuer to provide such information or reports, the Collateral Manager shall do so at its own expense.

(e) Required Content of Certain Reports. Each Payment Date Report or Daily Report sent to any Holder or beneficial owner of an interest in a Note shall contain, or be accompanied by, the following notices:

“The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”). The Notes may be beneficially owned only by Persons that (i) (A) are not U.S. persons (within the meaning of Regulation S under the Securities Act) who purchased their beneficial interest in an offshore transaction or (B) (I) are both (1) (x) a Qualified Purchaser, within the meaning of the Investment Company Act of 1940, as amended, and the rules thereunder or (y) an entity owned (or in the case of Qualified Purchasers, beneficially owned) exclusively by Qualified Purchasers and (2) (x) in the case of a Person that is an initial purchaser of the Notes, an Accredited Investor, within the meaning of Rule 105(a) under the Securities Act, or a Qualified Institutional Buyer or (y) in the case of a Person who becomes a beneficial owner subsequent to the date of the Indenture, a Qualified Institutional Buyer that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A under the Securities Act or a trust fund referred to in paragraph (a)(1)(i)(f) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan, who is purchasing the Notes in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder and (II) can make the representations set forth in Section 2.5 of the Indenture and, if applicable, the appropriate Exhibit B to the Indenture and (c) otherwise comply with the restrictions set forth in the applicable Note legends. In addition, (i) beneficial ownership interests in Rule 144A Global Notes may only be transferred to a Person that is both a Qualified Institutional Buyer and a Qualified Purchaser or a Person beneficially owned exclusively by Qualified Purchasers and (ii) Certificated Notes may only be owned by a Person that is both a Qualified Institutional Buyer and a Qualified Purchaser or a Person

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beneficially owned exclusively by a Person that is both a Qualified Institutional Buyer and a Qualified Purchaser, and, in each case, that can make the representations referred to in clause (b) of the preceding sentence. The Issuer has the right to compel any beneficial owner of a Note that does not meet the qualifications set forth in the preceding sentences to sell its interest in such Note, or may sell such interest on behalf of such owner, pursuant to Section 2.11 of the Indenture.

Each Holder receiving this report agrees to keep all non-public information herein confidential and not to use such information for any purpose other than its evaluation of its investment in the Notes, provided that any Holder may provide such information on a confidential basis to any prospective purchaser of such Holder’s Notes that is permitted by the terms of the Indenture to acquire such Holder’s Notes and that agrees to keep such information confidential in accordance with the terms of the Indenture.”

(f) Availability of Information. The Issuer (or the Trustee on behalf of the Issuer) may post the information contained in a Payment Date Report or Daily Report to a password-protected internet site accessible only to the Holders of the Notes and to the Collateral Manager.

10.6 Release of Collateral

(a) If no Event of Default has occurred and is continuing (in the case of sales pursuant to Sections 12.1(a) and (d)) and subject to Article 12, the Issuer may, by Issuer Order executed by an Authorized Representative of the Collateral Manager, delivered to the Trustee at least one Business Day prior to the settlement date for any sale of any Collateral certifying that the sale of such Collateral is being made in accordance with Section 12.1 hereof and such sale complies with all applicable requirements of Section 12.1, direct the Trustee to release or cause to be released such Collateral from the lien of this Indenture and, upon receipt of such Issuer Order, the Trustee shall deliver any such Collateral, if in physical form, duly endorsed to the broker or purchaser designated in such Issuer Order or, if such Collateral is a Clearing Corporation Security, cause an appropriate transfer thereof to be made, in each case against receipt of the sales price therefor as specified by the Collateral Manager in such Issuer Order; provided that the Trustee may deliver any such Collateral in physical form for examination in accordance with street delivery custom.

(b) Subject to the terms of this Indenture, the Trustee shall upon an Issuer Order (i) deliver any Collateral, and release or cause to be released such Collateral from the lien of this Indenture, which is set for any mandatory call or payment in full to the appropriate paying agent on or before the date set for such call or payment, in each case against receipt of the call or payment in full thereof and (ii) provide notice thereof to the Collateral Manager.

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(c) Upon receiving actual notice of any offer or any request for a waiver, consent, amendment or other modification with respect to any Portfolio Asset, the Trustee on behalf of the Issuer shall notify the Valuation Agent of any Portfolio Asset that is subject to a tender offer, voluntary redemption, exchange offer, conversion or other similar action (an Offer) or such request. Unless the Notes have been accelerated following an Event of Default, the Collateral Manager may direct (x) the Trustee to accept or participate in or decline or refuse to participate in such Offer and, in the case of acceptance or participation, to release from the lien of this Indenture such Portfolio Asset in accordance with the terms of the Offer against receipt of payment therefor, or (y) the Issuer or the Trustee to agree to or otherwise act with respect to such consent, waiver, amendment or modification; provided that in the absence of any such direction, the Trustee shall not respond or react to such Offer or request.

(d) As provided in Section 10.2(a), the Trustee shall deposit any proceeds received by it from the disposition of a Portfolio Asset in the applicable subaccount of the Collection Account, unless simultaneously applied to the purchase of additional Portfolio Assets or Eligible Investments as permitted under and in accordance with the requirements of this Article 10 and Article 12.

(e) The Trustee shall, upon receipt of an Issuer Order at such time as there are no Notes Outstanding and all obligations of the Issuer hereunder have been satisfied, release any remaining Collateral from the lien of this Indenture.

(f) Any security, Portfolio Asset or amounts that are released pursuant to Section 10.6(a), (b) or (c) shall be released from the lien of this Indenture.

10.7 Procedures Relating to the Establishment of Accounts Controlled by the Trustee

Notwithstanding anything else contained herein, the Trustee agrees that with respect to each of the Accounts, it will cause each Securities Intermediary establishing any such Account to enter into an account control agreement and, if the Securities Intermediary is the Bank, shall cause the Bank to comply with the provisions of such account control agreement. The Trustee shall have the right to cause the establishment of such subaccounts of any such Account as it deems necessary or appropriate for convenience of administration.

10.8 Section 3(c)(7) Procedures

(a) DTC Actions. The Issuer will direct (or cause its agent to direct) DTC to take the following steps in connection with the Global Notes (or such other appropriate steps regarding legends of restrictions on the Global Notes under Section 3(c)(7) of the Investment Company Act and Rule 144A as may be customary under DTC procedures at any given time):

(i) The Issuer will direct (or cause its agent to direct) DTC to include the marker “3c7” in the DTC 20-character security descriptor and the 48-character additional descriptor for the Global Notes.

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(ii) The Issuer will direct (or cause its agent to direct) DTC to cause each physical deliver order ticket that is delivered by DTC to purchasers to contain the 20-character security descriptor. The Issuer will direct (or cause its agent to direct) DTC to cause each deliver order ticket that is delivered by DTC to purchasers in electronic form to contain a “3c7” indicator and a related user manual for participants. Such user manual will contain a description of the relevant restrictions imposed by Section 3(c)(7).

(iii) On or prior to the Closing Date, the Issuer will instruct (or cause its agent to direct) DTC to send a Section 3(c)(7) Notice to all DTC participants in connection with the offering of the Global Notes.

(iv) In addition to the obligations of the Note Registrars set forth in Section 2.5, the Issuer will from time to time (upon the request of the Trustee) make a request (or cause its agent to request) to DTC to deliver to the Issuer a list of all DTC participants holding an interest in the Global Notes.

(v) The Issuer will cause each CUSIP number obtained for a Global Note to have a fixed field containing “3c7” and “144A” indicators, as applicable, attached to such CUSIP number.

(b) Bloomberg Screens, Etc. The Issuer will from time to time request (or cause its agent to request) all third-party vendors to include on screens maintained by such vendors appropriate legends regarding restrictions on the Global Notes under Section 3(c)(7) of the Investment Company Act and Rule 144A.

11. APPLICATION OF CASH

11.1 Disbursements of Cash from Payment Account

(a) Notwithstanding any other provision in this Indenture, the Transaction Documents or the Notes, the Trustee shall disburse amounts transferred from the Collection Account to the Payment Account pursuant to Section 10.2(f) in accordance with the following (the Priority of Payments):

(i) On each Payment Date, unless an Enforcement Event has occurred, all amounts transferred to the Payment Account from the Interest Collection Subaccount shall be applied to the payment of accrued and unpaid interest on the Class A Notes and the Class A-R Notes pro rata according to the respective Aggregate Outstanding Amounts thereof.

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(ii) On the date of Maturity, unless an Enforcement Event has occurred, all amounts transferred to the Payment Account from the Principal Collection Subaccount shall be applied (A) first, pro rata, to the repayment of (1) principal of the Class A Notes until the Class A Notes have been paid in full; and (2) the Outstanding Class A-R Funded Amount until the Outstanding Class A-R Funded Amount has been reduced to zero and (B) second, all remaining Principal Collections shall be paid to the Issuer (in accordance with directions of the Issuer to the Trustee).

(iii) If a declaration of acceleration of the maturity of the Notes has occurred following an Event of Default and such declaration of acceleration has not been rescinded (an Enforcement Event), the Trustee shall apply proceeds in respect of the Portfolio Assets on each date or dates fixed by the Trustee (each such date to occur on a Payment Date), in accordance with clause (i) (in the case of Interest Collections) and clause (ii) (in the case of Principal Collections) of this Section 11.1(a).

(b) [Reserved].

12. SALE OF PORTFOLIO ASSETS; PURCHASE OF ADDITIONAL PORTFOLIO ASSETS

12.1 Sales of Portfolio Assets

(a) The Issuer will not sell or otherwise dispose of any Portfolio Asset unless each of the following conditions is satisfied:

(i) the Sole Shareholder is not in default of any payment obligation or contribution obligation owing under the Issuer Contribution Agreement (provided that this condition shall not apply to dispositions pursuant to Section 12.1(b) or Section 12.1(c)); and

(ii) such sale or other disposition is made solely for consideration consisting of cash and otherwise on arms’ length terms.

(b) Mandatory Dispositions.

(i) If (A) a “Bankruptcy”, “Failure to Pay” or “Restructuring” (each as defined in the ISDA 2003 Credit Derivatives Definitions) occurs with respect to any Portfolio Asset, or such Portfolio Asset becomes a Defaulted Obligation or (B) any Portfolio Asset fails to satisfy any Asset Eligibility Criteria on the applicable Portfolio Asset Trade Date (or is the subject of a breach of a representation, warranty or certification as to the characteristics thereof), then the Issuer shall, within 14 days after the occurrence of such event, dispose of such Portfolio Asset.

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(ii) If on any date of determination by the Valuation Agent the Adjusted Principal Balance of all Portfolio Assets forming part of the Portfolio that are Second Lien Loans exceeds 50% of the Aggregate Outstanding Amount of the Notes as of such date (provided that, for purposes of such determination, the Aggregate Outstanding Amount of the Class A-R Notes shall be the Outstanding Class A-R Funded Amount) (such event, a Second Lien Loan Excess), then the Issuer shall, within five Business Days after the occurrence of such event, dispose of one or more Second Lien Loans as necessary to remedy such Second Lien Loan Excess.

(c) Right of Valuation Agent to Direct Dispositions. If an Event of Default has occurred and is continuing, the Valuation Agent may require the Issuer to sell all or any portion of the Portfolio Assets in the Portfolio, and by notice (or multiple notices, so long as such Event of Default is continuing) to the Trustee (with a copy to the Issuer and Collateral Manager) may direct the Trustee to sell such Portfolio Assets as identified by the Valuation Agent in such notice, and the Trustee shall sell such Portfolio Assets as identified in such notice.

(d) [Reserved]

12.2 Acquisition of Portfolio Assets; Eligible Investments

(a) Acquisition of Portfolio Assets. The Issuer will not acquire any Portfolio Asset (other than a Portfolio Asset included in the Portfolio on the Closing Date) unless as of the Portfolio Asset Trade Date (x) such Portfolio Asset satisfies each of the Asset Eligibility Criteria and (y) each of the following conditions is satisfied:

(i) the acquisition of such Portfolio Asset and the purchase price thereof shall be on arm’s length terms;

(ii) the Sole Shareholder is not in default of any payment obligation or contribution obligation owing under the Issuer Contribution Agreement;

(iii) no Event of Default (or any event that, with the giving of notice or the lapse of time or both, would become an Event of Default) shall have occurred and be continuing immediately prior to or immediately after giving effect to such acquisition;

(iv) if such Portfolio Asset is to be acquired from the Sole Shareholder, the acquisition will not cause the aggregate of the Adjusted Principal Balance of all Portfolio Assets that the Issuer has acquired from the Sole Shareholder and forming part of the Portfolio (after giving effect to such proposed acquisition) to exceed 85% of the Aggregate Outstanding Amount of the Class A Notes as of such date; and

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(v) if such Portfolio Asset to be acquired is a Second Lien Loan, the acquisition will not cause the aggregate of the Adjusted Principal Balances of all Portfolio Assets forming part of the Portfolio that are Second Lien Loans (measured as of the trade date of the proposed acquisition, and after giving effect to such proposed acquisition) to exceed 50% of the Aggregate Outstanding Amount of the Notes as of such date (provided that, for purposes of such determination, the Aggregate Outstanding Amount of the Class A-R Notes shall be the Outstanding Class A-R Funded Amount).

(b) Investment in Eligible Investments. Cash on deposit in any Account (other than the Payment Account) may be invested at any time in Eligible Investments in accordance with Article 10.

12.3 Conditions Applicable to All Sale and Purchase Transactions

(a) Any transaction effected under this Article 12 or in connection with the acquisition of additional Portfolio Assets shall be conducted on an arm’s length basis and, if effected with a Person Affiliated with the Collateral Manager (or with an account or portfolio for which the Collateral Manager or any of its Affiliates serves as investment adviser), shall be effected in accordance with the requirements of Section 6(e) of the Collateral Management Agreement on terms no less favorable to the Issuer than would be the case if such Person were not so Affiliated, provided that the Trustee shall have no responsibility to oversee compliance with this clause (a) by the other parties.

(b) Upon any acquisition of a Portfolio Asset pursuant to this Article 12, all of the Issuer’s right, title and interest to the Collateral or Collateral shall be Granted to the Trustee pursuant to this Indenture, such Collateral or Collateral shall be Delivered to the Custodian, and, if applicable, the Custodian shall receive such Collateral or Collateral.

13. RELATIONS AMONG HOLDERS

13.1 Relations among Holders

(a) Each Holder agrees, for the benefit of all Holders, not to cause the filing of a petition in bankruptcy against the Issuer until the payment in full of all Notes (and any other debt obligations of the Issuer that have been rated upon issuance by any rating agency at the request of the Issuer) and the expiration of a period equal to one year and one day or, if longer, the applicable preference period then in effect plus one day, following such payment in full. In the event one or more Holders of Notes cause the filing of a petition in bankruptcy against the Issuer prior to the expiration of such period, any claim that such Holder(s) have against the Issuer or with respect to any Collateral (including any proceeds thereof) shall be fully subordinate in right of payment to the claims of each Holder of any Note that does

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not seek to cause any such filing, with such subordination being effective until each Note held by each Holder of any Note that does not seek to cause any such filing is paid in full in accordance with the Priority of Payments set forth herein (after giving effect to such subordination). The foregoing sentence shall constitute a “subordination agreement” within the meaning of Section 510(a) of the Bankruptcy Code, Title 11 of the United States Code, as amended.

13.2 Standard of Conduct

In exercising any of its or their voting rights, rights to direct and consent or any other rights as a Holder under this Indenture, a Holder or Holders shall not have any obligation or duty to any Person or to consider or take into account the interests of any Person and shall not be liable to any Person for any action taken by it or them or at its or their direction or any failure by it or them to act or to direct that an action be taken, without regard to whether such action or inaction benefits or adversely affects any Holder, the Issuer, or any other Person, except for any liability to which such Holder may be subject to the extent the same results from such Holder’s taking or directing an action, or failing to take or direct an action, in bad faith or in violation of the express terms of this Indenture.

14. MISCELLANEOUS

14.1 Form of Documents Delivered to Trustee

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an Officer of the Issuer or the Collateral Manager may and, where required by the Issuer shall, be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel (provided that such counsel is a nationally or internationally recognized and reputable law firm), unless such Officer knows, or should know that the certificate or opinion or representations with respect to the matters upon which such certificate or opinion is based are erroneous. Any such certificate of an Officer of the Issuer or the Collateral Manager or Opinion of Counsel may and, where required by the Issuer, shall be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, the Issuer, the Collateral Manager or any other Person, stating that the information with respect to such factual matters is in the possession of the Issuer, the Collateral Manager or such other Person, unless such Officer of the Issuer or the Collateral Manager or such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. Any Opinion of Counsel may also be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer of the Collateral Manager, the

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Issuer, stating that the information with respect to such matters is in the possession of the Collateral Manager, the Issuer, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Trustee at the request or direction of the Issuer, then notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s right to make such request or direction, the Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.1(d).

14.2 Acts of Holders

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in writing or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action or actions embodied therein and evidenced thereby) are herein sometimes referred to as the Act of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 14.2.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee deems sufficient.

(c) The principal amount or face amount, as the case may be, and registered numbers of Notes held by any Person, and the date of such Person’s holding the same, shall be proved by the applicable Note Register.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder (and any transferee thereof) of such and of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee, the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

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14.3 Notices, etc., to Trustee, the Revolving Credit Note Agent, the Issuer, the Collateral Manager, the Collateral Administrator, the Paying Agent, the Valuation Agent

(a) Any request, demand, authorization, direction, instruction, order, notice, consent, waiver or Act of Holders or other documents provided or permitted by this Indenture to be made upon, given, delivered, e-mailed or furnished to, or filed with:

(i) the Trustee shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to and mailed, by certified mail, return receipt requested, hand delivered, sent by overnight courier service guaranteeing next day delivery, by electronic mail, or by facsimile in legible form, to the Trustee addressed to it at its applicable Corporate Trust Office, or at any other address previously furnished in writing to the other parties hereto by the Trustee, and executed by an Authorized Representative of the entity sending such request, demand, authorization, direction, instruction, order, notice, consent, waiver or other document, provided that any demand, authorization, direction, instruction, order, notice, consent, waiver or other document sent to State Street Bank and Trust Company, 200 Clarendon Street, Mail Code: JHT06, Attention: Structured Trust & Analytics, Boston, MA 02116, Facsimile No. 617-937-0583, E-mail: statestreet_CDO_services@statestreet.com (in any capacity hereunder) will be deemed effective only upon receipt thereof;

(ii) the Revolving Credit Note Agent shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to and mailed, by certified mail, return receipt requested, hand delivered, sent by overnight courier service guaranteeing next day delivery, by electronic mail, or by facsimile in legible form, to the Revolving Credit Note Agent addressed to it at its applicable Corporate Trust Office, or at any other address previously furnished in writing to the other parties hereto by the Revolving Credit Note Agent, and executed by an Authorized Representative of the entity sending such request, demand, authorization, direction, instruction, order, notice, consent, waiver or other document, provided that any demand, authorization, direction, instruction, order, notice, consent, waiver or other document sent to State Street Bank and Trust Company, 200 Clarendon Street, Mail Code: JHT06, Attention: Structured Trust & Analytics, Boston, MA 02116, Facsimile No. 617-937-0583, E-mail: statestreet_CDO_services@statestreet.com (in any capacity hereunder) will be deemed effective only upon receipt thereof;

(iii) the Issuer shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Issuer addressed to it at c/o CM Finance LLC,

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399 Park Avenue, 39^th Floor, New York, NY 10022, Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer, telephone no. (212) 380-5904, Facsmile no. (212) 380-5915, email: cjansen@cyruscapital.com, mmauer@cyruscapital.com and ops@cyruscapital.com or at any other address previously furnished in writing to the other parties hereto by the Issuer, as the case may be, with a copy to the Collateral Manager at its address below;

(iv) the Collateral Manager shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Collateral Manager addressed to it at 399 Park Avenue, 39^th Floor, New York, NY 10022, Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer, telephone no.: (212) 380-5904, Facsmile no. (212) 380-5915, email: cjansen@cyruscapital.com, mmauer@cyruscapital.com and ops@cyruscapital.com or at any other address previously furnished in writing to the parties hereto;

(v) the Bank shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by telecopy in legible form, addressed to State Street Bank and Trust Company, 200 Clarendon Street, Mail Code: JHT06, Attention: Structured Trust & Analytics, Boston, MA 02116, Facsimile No. 617-937-0583, E-mail: statestreet_CDO_services@statestreet.com, or at any other address previously furnished in writing to the Issuer and the Trustee by the Bank;

(vi) the Collateral Administrator shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by facsimile in legible form, to the Collateral Administrator at State Street Bank and Trust Company, 200 Clarendon Street, Mail Code: JHT06, Attention: Structured Trust & Analytics, Boston, MA 02116, Facsimile No. 617-937-0583, E-mail: statestreet_CDO_services@statestreet.com, or at any other address previously furnished in writing to the parties hereto; and

(vii) the Valuation Agent shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service or by telecopy in legible form, addressed to UBS AG, London Branch, Structured Funding, Attn: Ben Stewart, 1285 Avenue of the Americas, New York, NY 10019-6064, Tel: (203) 719-1611, E-mail: OL-Cyrus-TRS@ubs.com, or at any other address previously furnished in writing to the Issuer and the Trustee by UBS.

(b) In the event that any provision in this Indenture calls for any notice or document to be delivered simultaneously to the Trustee and any other Person, the Trustee’s

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receipt of such notice or document shall entitle the Trustee to assume that such notice or document was delivered to such other Person unless otherwise expressly specified herein.

(c) Any reference herein to information being provided “in writing” shall be deemed to include each permitted method of delivery specified in sub clause (a) above.

14.4 Notices to Holders; Waiver

Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event,

(a) such notice shall be sufficiently given to Holders if in writing and mailed, first class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Note Registers (or, in the case of Holders of Global Notes, emailed to DTC for distribution to each Holder affected by such event), not earlier than the earliest date and not later than the latest date, prescribed for the giving of such notice; and

(b) such notice shall be in the English language.

Such notices will be deemed to have been given on the date of such mailing.

Notwithstanding clause (a) above, a Holder may give the Trustee a written notice that it is requesting that notices to it be given by electronic mail or by facsimile transmissions and stating the electronic mail address or facsimile number for such transmission. Thereafter, the Trustee shall give notices to such Holder by electronic mail or facsimile transmission, as so requested; provided that if such notice also requests that notices be given by mail, then such notice shall also be given by mail in accordance with clause (a) above.

The Trustee will deliver to the Holders any information or notice relating to this Indenture requested to be so delivered by at least 25% of the Holders (by Aggregate Outstanding Amount), at the expense of the Issuer. The Trustee may require the requesting Holders to comply with its standard verification policies in order to confirm Holder status.

Neither the failure to mail any notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. In case by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity or by reason of any other cause it shall be impracticable to give such notice by mail of any event to Holders when such notice is required to be given pursuant to any provision of this Indenture, then such notification to Holders as shall be made with the approval of the Trustee shall constitute a sufficient notification to such Holders for every purpose hereunder.

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Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

14.5 Effect of Headings and Table of Contents

The Article and Section headings herein (including those used in cross-references herein) and the Table of Contents are for convenience only and shall not affect the construction hereof.

14.6 Successors and Assigns

All covenants and agreements in this Indenture by the Issuer shall bind their respective successors and assigns, whether so expressed or not.

14.7 Severability

If any term, provision, covenant or condition of this Indenture or the Notes, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Indenture or the Notes, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Indenture or the Notes, as the case may be, so long as this Indenture or the Notes, as the case may be, as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Indenture or the Notes, as the case may be, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

14.8 Benefits of Indenture

The Valuation Agent and the Collateral Manager shall each be an express third party beneficiary of each agreement or obligation in this Indenture (including, without limitation, any right to make a determination, receive a notice, report or certificate, make a request, give consent or direct a disposition expressed as being exercisable by the Valuation Agent or Collateral Manager hereunder). Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Holders, the Collateral Manager and the Valuation Agent, any benefit or any legal or equitable right, remedy or claim under this Indenture.

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14.9 Legal Holidays

In the event that the date of any Payment Date or Stated Maturity shall not be a Business Day, then notwithstanding any other provision of the Notes or this Indenture, payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of any such Payment Date or Stated Maturity date, as the case may be, and except as provided in the definition of “Monthly Period”, no interest shall accrue on such payment for the period from and after any such nominal date.

14.10 Governing Law

This Indenture and the Notes shall be construed in accordance with, and this Indenture and the Notes and any matters arising out of or relating in any way whatsoever to this Indenture or the Notes (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

14.11 Submission to Jurisdiction

With respect to any suit, action or proceedings relating to this Indenture or any matter between the parties arising under or in connection with this Indenture (Proceedings), each party irrevocably: (i) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Indenture precludes any of the parties from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

14.12 WAIVER OF JURY TRIAL

EACH OF THE ISSUER AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby (i) certifies that no representative, agent or attorney of the other has represented, expressly or otherwise, that the other would not, in the event of a Proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it has been induced to enter into this Indenture by, among other things, the mutual waivers and certifications in this paragraph.

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14.13 Counterparts

This Indenture (and each amendment, modification and waiver in respect of this Indenture) may be executed and delivered in any number of counterparts (including by e-mail (PDF) or facsimile), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument, and each of the parties hereto may execute this Indenture by signing any such counterpart. Delivery of an executed counterpart of this Indenture by e-mail (PDF) or facsimile shall be deemed to constitute due and sufficient delivery of such counterpart

14.14 Acts of Issuer

Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or performed by the Issuer shall be effective if given or performed by the Issuer or by the Collateral Manager on the Issuer’s behalf.

14.15 Confidential Information

(a) The Trustee and each Holder of Notes will maintain the confidentiality of all Confidential Information in accordance with procedures adopted by the Issuer or such Holder in good faith to protect Confidential Information of third parties delivered to such Person; provided that such Person may deliver or disclose Confidential Information to: (i) such Person’s directors, trustees, officers, employees, agents, attorneys and Affiliates who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 14.15 and to the extent such disclosure is reasonably required for the administration of this Indenture, the matters contemplated hereby or the investment represented by the Notes; (ii) such Person’s financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 14.15 and to the extent such disclosure is reasonably required for the administration of this Indenture, the matters contemplated hereby or the investment represented by the Notes; (iii) any other Holder; (iv) any Person of the type that would be, to such Person’s knowledge, permitted to acquire Notes in accordance with the requirements of Section 2.5 hereof to which such Person sells or offers to sell any such Note or any part thereof (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 14.15); (v) any other Person from which such former Person offers to purchase any security of the Issuer (if such other Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 14.15); (vi) any Federal or State or other regulatory, governmental or judicial authority having jurisdiction over such Person; (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about the investment portfolio of such Person, reinsurers and liquidity and credit providers that agree to hold confidential the Confidential Information substantially in

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accordance with this Section 14.15; (viii) any other Person with the consent of the Issuer and the Collateral Manager; or (ix) any other Person to which such delivery or disclosure may be necessary or appropriate (A) to effect compliance with any law, rule, regulation or order applicable to such Person, (B) in response to any subpoena or other legal process upon prior notice to the Issuer (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law), (C) in connection with any litigation to which such Person is a party upon prior notice to the Issuer (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law) or (D) if an Event of Default has occurred and is continuing, to the extent such Person may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under the Notes or this Indenture or (E) in the Trustee’s or Collateral Administrator’s performance of its obligations under this Indenture, the Collateral Administration Agreement or other transaction document related thereto; and provided that delivery to Holders by the Trustee or the Collateral Administrator of any report of information required by the terms of this Indenture to be provided to Holders shall not be a violation of this Section 14.15. Each Holder of Notes agrees, except as set forth in clauses (vi), (vii) and (ix) above, that it shall use the Confidential Information for the sole purpose of making an investment in the Notes or administering its investment in the Notes; and that the Trustee and the Collateral Administrator shall neither be required nor authorized to disclose to Holders any Confidential Information in violation of this Section 14.15. In the event of any required disclosure of the Confidential Information by such Holder, such Holder agrees to use reasonable efforts to protect the confidentiality of the Confidential Information. Each Holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 14.15.

(b) For the purposes of this Section 14.15, Confidential Information means information delivered to the Trustee, the Collateral Administrator or any Holder of Notes by or on behalf of the Issuer in connection with and relating to the transactions contemplated by or otherwise pursuant to this Indenture; provided that such term does not include information that: (i) was publicly known or otherwise known to the Trustee, the Collateral Administrator or such Holder prior to the time of such disclosure; (ii) subsequently becomes publicly known through no act or omission by the Trustee, the Collateral Administrator, any Holder or any person acting on behalf of the Trustee, the Collateral Administrator or any Holder; (iii) otherwise is known or becomes known to the Trustee, the Collateral Administrator or any Holder other than (x) through disclosure by the Issuer or (y) to the knowledge of the Trustee, the Collateral Administrator or a Holder, as the case may be, in each case after reasonable inquiry, as a result of the breach of a fiduciary duty to the Issuer or a contractual duty to the Issuer; or (iv) is allowed to be treated as non-confidential by consent of the Issuer.

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(c) Notwithstanding the foregoing, the Trustee and the Collateral Administrator may disclose Confidential Information to the extent disclosure thereof may be required by law or by any regulatory or governmental authority and the Trustee and the Collateral Administrator may disclose on a confidential basis any Confidential Information to its agents, attorneys and auditors in connection with the performance of its responsibilities hereunder.

15. ASSIGNMENT OF CERTAIN AGREEMENTS

15.1 Assignment of Collateral Management Agreement, Revolving Credit Note Agreement, Collateral Administration Agreement and Issuer Contribution Agreement

(a) The Issuer hereby acknowledges that its Grant pursuant to the first Granting Clause hereof includes all of the Issuer’s estate, right, title and interest in, to and under the Collateral Management Agreement, the Revolving Credit Note Agreement, the Collateral Administration Agreement and the Issuer Contribution Agreement including (i) the right to give all notices, consents and releases thereunder, (ii) the right to receive all notices, accountings, consents, releases and statements thereunder, (iii) the right to do any and all other things whatsoever that the Issuer is or may be entitled to do thereunder, (iv) with respect to the Collateral Management Agreement, the right to give all notices of termination and to take any legal action upon the breach of an obligation of the Collateral Manager thereunder, including the commencement, conduct and consummation of proceedings at law or in equity, and (v) with respect to the Issuer Contribution Agreement, the right to give equity contribution notices and to do any and all other things whatsoever that the Issuer is or may be entitled to do thereunder; provided that notwithstanding anything herein to the contrary, the Issuer shall retain, and the Trustee shall not have, the authority to exercise any of the rights set forth in (i) through (v) above or that may otherwise arise as a result of the Grant until the occurrence of an Event of Default hereunder and such authority shall terminate at such time, if any, as such Event of Default is cured or waived.

(b) The assignment made hereby is executed as collateral security, and the execution and delivery hereby shall not in any way impair or diminish the obligations of the Issuer under the provisions of the Collateral Management Agreement, the Revolving Credit Note Agreement, the Collateral Administration Agreement and the Issuer Contribution Agreement nor shall any of the obligations contained in such agreements be imposed on the Trustee.

(c) Upon the retirement of the Notes, the payment of all amounts required to be paid pursuant to the Priority of Payments and the release of the Collateral from the lien of this Indenture, this assignment and all rights herein assigned to the Trustee for the benefit of the Holders shall cease and terminate and all the estate, right, title and interest of the Trustee in, to and under the Collateral Management Agreement, the Revolving Credit Note Agreement, the Collateral Administration

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Agreement and the Issuer Contribution Agreement shall revert to the Issuer and no further instrument or act shall be necessary to evidence such termination and reversion.

(d) The Issuer represents that the Issuer has not executed any other assignment of the Collateral Management Agreement, the Revolving Credit Note Agreement, the Collateral Administration Agreement or the Issuer Contribution Agreement.

(e) The Issuer agrees that this assignment is irrevocable, and that it will not take any action which is inconsistent with this assignment or make any other assignment inconsistent herewith. The Issuer will, from time to time, execute all instruments of further assurance and all such supplemental instruments with respect to this assignment as may be necessary to continue and maintain the effectiveness of such assignment.

(f) Subject to Section 15.1(a), the Issuer hereby agrees, and hereby undertakes to obtain the agreement and consent of the Collateral Manager in the Collateral Management Agreement, to the following:

(i) The Collateral Manager shall consent to the provisions of this assignment and agree to perform any provisions of this Indenture applicable to the Collateral Manager subject to the terms (including the standard of care set forth in the Collateral Management Agreement) of the Collateral Management Agreement.

(ii) The Collateral Manager shall acknowledge that the Issuer is assigning all of its right, title and interest in, to and under the Collateral Management Agreement to the Trustee as representative of the Holders and the Collateral Manager shall agree that all of the representations, covenants and agreements made by the Collateral Manager in the Collateral Management Agreement are also for the benefit of the Trustee, subject to Section 15.1(a).

(iii) The Collateral Manager shall deliver to the Trustee copies of all notices, statements, communications and instruments delivered or required to be delivered by the Collateral Manager to the Issuer pursuant to the Collateral Management Agreement.

(iv) Neither the Issuer nor the Collateral Manager will enter into any agreement amending, modifying or terminating the Collateral Management Agreement (other than an amendment to correct inconsistencies, typographical or other errors, defects or ambiguities) or selecting or consenting to a successor manager except with the consents and satisfaction of the conditions specified in the Collateral Management Agreement entered into on the Closing Date.

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(v) The Collateral Manager agrees not to cause the filing of a petition in bankruptcy against or on behalf of the Issuer until the payment in full of all Notes issued under this Indenture and the expiration of a period equal to one year and a day, or, if longer, the applicable preference period, following such payment. Nothing in this Section 15.1 shall preclude, or be deemed to stop, the Collateral Manager from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer (other than any such Proceeding filed or commenced on behalf of the Issuer at the direction of the Collateral Manager or Sole Shareholder) or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Collateral Manager or Sole Shareholder.

(g) Upon a Trust Officer of the Trustee (i) receiving written notice from the Collateral Manager that an event constituting “Cause” as defined in the Collateral Management Agreement has occurred, (ii) receiving written notice that the Collateral Manager is resigning or is being removed, with or without “Cause” or (iii) written notice of a successor collateral manager, the Trustee shall, not later than one Business Day thereafter, notify the Holders (as their names appear in the Note Registers).

(h) Subject to Section 15.1(a), the Issuer hereby agrees, and hereby undertakes to obtain the agreement and consent of the Sole Shareholder in the Issuer Contribution Agreement, to the following:

(i) The Sole Shareholder shall consent to the provisions of this assignment and agree to perform any provisions of this Indenture applicable to the Sole Shareholder subject to the terms of the Issuer Contribution Agreement.

(ii) The Sole Shareholder shall acknowledge that the Issuer is assigning all of its right, title and interest in, to and under the Issuer Contribution Agreement to the Trustee as representative of the Holders and the Sole Shareholder shall agree that all of the representations, covenants and agreements made by the Sole Shareholder in the Issuer Contribution Agreement are also for the benefit of the Trustee, subject to Section 15.1(a).

(iii) The Sole Shareholder shall deliver to the Trustee copies of all notices, statements, communications and instruments delivered or required to be delivered by the Sole Shareholder to the Issuer pursuant to the Issuer Contribution Agreement.

(iv) Neither the Issuer nor the Sole Shareholder will enter into any agreement amending, modifying or terminating the Issuer Contribution Agreement (other than an amendment to correct inconsistencies, typographical or

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other manifest errors, defects or ambiguities) without prior written consent of the Trustee and the Valuation Agent (unless such amendment could not reasonably be expected to materially adversely affect any of the Issuer, the Collateral or the interests of the Trustee and Issuer therein and notice thereof has been given to the Trustee and Valuation Agent).

(v) The Sole Shareholder agrees not to cause the filing of a petition in bankruptcy against or on behalf of the Issuer until the payment in full of all Notes issued under this Indenture and the expiration of a period equal to one year and a day, or, if longer, the applicable preference period, following such payment. Nothing in this Section 15.1 shall preclude, or be deemed to preclude, the Sole Shareholder from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer (other than any such Proceeding filed or commenced on behalf of the Issuer at the direction of the Collateral Manager or Sole Shareholder) or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Sole Shareholder or Collateral Manager.

- Signature Page Follows -

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IN WITNESS WHEREOF, we have set our hands as of the day and year first written above.

EXECUTED AS A DEED BY

CM FINANCE SPV LTD.,

as Issuer

By:

Name:

Title:

Witness:

Name:

Occupation:

Address:

Indenture – Signature Page

STATE STREET BANK AND TRUST COMPANY,

as Trustee and, solely as expressly specified herein, as Bank

By:

Name:

Title:

Indenture – Signature Page

Schedule 1

Portfolio Assets as of Closing Date

Committed Loans:

Status	Name	Tranche	Security Type	Price		Par Value		Market Value
Committed	Virgin America	1st Lien Note	1st Lien	$	90.0000	$	5,000,000	$	4,500,000
Committed	Virgin America	2nd Lien Note	2nd Lien	$	100.0000	$	5,000,000	$	5,000,000
Committed	MF Global	Delayed Draw TL (Exit Facility)	1st Lien	$	97.5000	$	10,000,000	$	9,750,000
Total					Total	$	20,000,000	$	19,250,000

Funded Loans:

Status	Name	Tranche	Security Type	Price		Par Value		Market Value
Funded	Crestwood	Term Loan	1st Lien	$	101.7500	$	11,954,510	$	12,163,714
Funded	Endeavour	Term Loan (Refund Guarantee Facility)	1st Lien	$	100.0000	$	17,953,305	$	17,953,305
Funded	YRC	Receivables Facility (aka 2nd Out ABL)	1st Lien	$	100.5000	$	12,074,283	$	12,134,654
Funded	Capitol Petroleum Group	Senior Secured Note	1st Lien	$	98.3600	$	10,096,891	$	9,931,302
Funded	TNS	2nd Lien	2nd Lien	$	100.5000	$	9,250,000	$	9,296,250
Funded	AM General	Term Loan	1st Lien	$	98.0000	$	10,000,000	$	9,800,000
Funded	Alcatel	Term Loan C	1st Lien	$	102.0000	$	12,712,500	$	12,966,750
Funded	New Wave Communications	2nd Lien Term Loan	2nd Lien	$	99.5000	$	8,000,000	$	7,960,000
Total					Total	$	92,041,489	$	92,205,975

Page S-1-1

Schedule 2

Moody’s Industry Classifications

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

Page S-2-1

Schedule 3

S&P Industry Classifications

Collateral Code	Collateral Description
1	Aerospace & Defense
2	Air transport
3	Automotive
4	Beverage & Tobacco
5	Radio & Television
6
7	Building & Development
8	Business equipment & services
9	Cable & satellite television
10	Chemicals & plastics
11	Clothing/textiles
12	Conglomerates
13	Containers & glass products
14	Cosmetics/toiletries
15	Drugs
16	Ecological services & equipment
17	Electronics/electrical
18	Equipment leasing
19	Farming/agriculture
20	Financial intermediaries
21	Food/drug retailers
22	Food products
23	Food service
24	Forest products
25	Health care
26	Home furnishings
27	Lodging & casinos
28	Industrial equipment
29
30	Leisure goods/activities/movies
31	Nonferrous metals/minerals
32	Oil & gas
33	Publishing
34	Rail industries
35	Retailers (except food & drug)
36	Steel
37	Surface transport
38	Telecommunications
39	Utilities
43	Life Insurance
44	Health Insurance
45	Property & Casualty Insurance
46	Diversified Insurance

i

CONTENTS

SECTION		PAGE
1.	Definitions		2
1.1	Definitions		2
1.2	Assumptions as to Collateral		29
2.	The Notes		30
2.1	Forms Generally		30
2.2	Forms of Notes		31
2.3	Authorized Amount; Stated Maturity; Denominations		32
2.4	Execution, Authentication, Delivery and Dating		33
2.5	Registration, Registration of Transfer and Exchange		34
2.6	Mutilated, Defaced, Destroyed, Lost or Stolen Note		43
2.7	Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved		44
2.8	Persons Deemed Owners		47
2.9	Cancellation		48
2.10	DTC Ceases to be Depository		48
2.11	Non-Permitted Holders or Violation of ERISA Representations or Noteholder Reporting Obligations		49
2.12	Tax Certification and Noteholder Reporting Obligations		51
2.13	Additional Issuance of Notes		52
2.14	Borrowings under the Revolving Credit Note Agreement		52

ii

3.	Conditions Precedent	53
3.1	Conditions to Issuance of Notes on Closing Date	53
3.2	Custodianship; Delivery of Portfolio Assets and Eligible Investments	56
3.3	Application of Proceeds of Issuance	56
4.	Satisfaction And Discharge	57
4.1	Satisfaction and Discharge of Indenture	57
4.2	Application of Trust Cash	58
4.3	Repayment of Cash Held by Paying Agent	58
5.	Remedies	58
5.1	Events of Default	58
5.2	Acceleration of Maturity; Rescission and Annulment	61
5.3	Collection of Indebtedness and Suits for Enforcement by Trustee	62
5.4	Remedies	63
5.5	Optional Preservation of Collateral	66
5.6	Trustee May Enforce Claims Without Possession of Notes	67
5.7	Application of Cash Collected	67
5.8	Limitation on Suits	67
5.9	Unconditional Rights of Holders to Receive Principal and Interest	68
5.10	Restoration of Rights and Remedies	68
5.11	Rights and Remedies Cumulative	68
5.12	Delay or Omission Not Waiver	69
5.13	Control by Majority Noteholders	69
5.14	Waiver of Past Defaults	69
5.15	Undertaking for Costs	70
5.16	Waiver of Stay or Extension Laws	70
5.17	Sale of Collateral	70
5.18	Action on the Notes	71
6.	The Trustee	72
6.1	Certain Duties and Responsibilities	72
6.2	Notice of Default	74
6.3	Certain Rights of Trustee	74
6.4	Not Responsible for Recitals or Issuance of Notes	78
6.5	May Hold Notes	78
6.6	Cash Held in Trust	78

iii

6.7	Compensation and Reimbursement	78
6.8	Corporate Trustee Required; Eligibility	80
6.9	Resignation and Removal; Appointment of Successor	80
6.10	Acceptance of Appointment by Successor	82
6.11	Merger, Conversion, Consolidation or Succession to Business of Trustee	82
6.12	Co-Trustees	82
6.13	Certain Duties of Trustee Related to Delayed Payment of Proceeds	83
6.14	Authenticating Agents	84
6.15	Withholding	85
6.16	Fiduciary for Holders Only; Agent for each other Secured Party	85
6.17	Representations and Warranties of the Bank	86
7.	Covenants	86
7.1	Payment of Principal and Interest	86
7.2	Maintenance of Office or Agency	87
7.3	Cash for Note Payments to be Held in Trust	87
7.4	Existence of Issuer	89
7.5	Protection of Collateral	90
7.6	Opinions as to Collateral	91
7.7	Performance of Obligations	91
7.8	Negative Covenants	92
7.9	Statement as to Compliance	94
7.10	Issuer May Not Consolidate Except on Certain Terms	94
7.11	Successor Substituted	94
7.12	No Other Business	95
7.13	Acquisition of Portfolio Assets	95
7.14	Reporting	95
7.15	Certain Tax Matters	96
7.16	Side Letter Security Agreement	97
8.	Supplemental Indentures	97
8.1	Supplemental Indentures Without Consent of Holders of Notes	97
8.2	Supplemental Indentures With Consent of Holders of Notes	98
8.3	Execution of Supplemental Indentures	98
8.4	Determination of Effect on Holders	100

iv

8.5	Effect of Supplemental Indentures	101
8.6	Reference in Notes to Supplemental Indentures	101
9.	[Reserved]	101
10.	Accounts, Accountings And Releases	101
10.1	Collection of Cash	101
10.2	Collection Account	102
10.3	Transaction Accounts	104
10.4	Reinvestment of Funds in Accounts; Reports by Trustee	107
10.5	Accountings	109
10.6	Release of Collateral	114
10.7	Procedures Relating to the Establishment of Accounts Controlled by the Trustee	115
10.8	Section 3(c)(7) Procedures	115
11.	Application Of Cash	116
11.1	Disbursements of Cash from Payment Account	116
12.	Sale of Portfolio Assets; purchase of additional Portfolio Assets	117
12.1	Sales of Portfolio Assets	117
12.2	Acquisition of Portfolio Assets; Eligible Investments	118
12.3	Conditions Applicable to All Sale and Purchase Transactions	119
13.	Relations among Holders	119
13.1	Relations among Holders	119
13.2	Standard of Conduct	120
14.	Miscellaneous	120
14.1	Form of Documents Delivered to Trustee	120
14.2	Acts of Holders	121
14.3	Notices, etc., to Trustee, the Revolving Credit Note Agent, the Issuer, the Collateral Manager, the Collateral Administrator, the Paying Agent, the Valuation Agent	122
14.4	Notices to Holders; Waiver	124
14.5	Effect of Headings and Table of Contents	125
14.6	Successors and Assigns	125
14.7	Severability	125
14.8	Benefits of Indenture	125

v

14.9	Legal Holidays	126
14.10	Governing Law	126
14.11	Submission to Jurisdiction	126
14.12	WAIVER OF JURY TRIAL	126
14.13	Counterparts	127
14.14	Acts of Issuer	127
14.15	Confidential Information	127
15.	Assignment Of Certain Agreements	129
15.1	Assignment of Collateral Management Agreement, Revolving Credit Note Agreement, Collateral Administration Agreement and Issuer Contribution Agreement	129

Schedules and Exhibits

Schedule 1	List of Portfolio Assets as of Closing Date
Schedule 2	Moody’s Industry Classifications
Schedule 3	S&P Industry Classifications
Exhibit A	Forms of Notes
A1	Form of Global Class A Note
A2	Form of Certificated Class A Note
A3	Form of Class A-R Note
Exhibit B	Forms of Transfer and Exchange Certificates
B1	Form of Transferor Certificate for Transfer of Rule 144A Global Note or Certificated Note to Regulation S Global Note
B2	Form of Purchaser Representation Letter for Certificated Notes
B3	Form of Transferor Certificate for Transfer of Certificated Note to Rule 144A Global Note
B4	Form of Transferee Certificate of Rule 144A Global Note
B5	Form of Transferee Certificate of Regulation S Global Note
Exhibit C	Form of Opinion of Nixon Peabody LLP
Exhibit D	Form of Opinion of Bingham McCutchen LLP
Exhibit E	Form of Opinion of Applyby (Cayman) Ltd.
Exhibit F	Form of Beneficial Owner Certificate

vi

Dated as of December 4, 2013

CM FINANCE SPV LTD.,

as Issuer

STATE STREET BANK AND TRUST COMPANY,

as Trustee

INDENTURE

EXHIBIT A

FORMS OF NOTES

EXHIBIT A1

FORM OF GLOBAL CLASS A NOTE

[RULE 144A][REGULATION S] GLOBAL NOTE

representing

CLASS A NOTES DUE 2016

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO A PERSON (1) THAT IS A “QUALIFIED PURCHASER” (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”) AND THE RULES THEREUNDER) OR AN ENTITY BENEFICIALLY OWNED EXCLUSIVELY BY QUALIFIED PURCHASERS (AS DEFINED FOR PURPOSES OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT), (2) THAT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT, AS AMENDED (“RULE 144A”)), (3) THAT WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE HOLDER IS A QUALIFIED PURCHASER), (4) THAT HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL OWNERS WHEN THE HOLDER IS A PRIVATE INVESTMENT COMPANY FORMED BEFORE APRIL 30, 1996, (5) THAT IS NOT A BROKER-DEALER WHICH OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25 MILLION IN SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED PERSONS OF THE DEALER AND (6) THAT IS NOT A PLAN REFERRED TO IN PARAGRAPH (A)(1)(i)(D) OR (A)(1)(i)(E) OF RULE 144A OR A TRUST FUND REFERRED TO IN PARAGRAPH (A)(1)(i)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH A PLAN, IF INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE MADE BY THE BENEFICIARIES OF THE PLAN OR (B) TO A PERSON THAT IS NOT A “U.S. PERSON” (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATION AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY APPLICABLE JURISDICTION. THE ISSUER OF THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT COMPANY ACT.

THE ISSUER, OR ON ITS BEHALF, THE COLLATERAL MANAGER, HAS THE RIGHT, UNDER THE INDENTURE, TO COMPEL ANY BENEFICIAL OWNER OF AN INTEREST IN THIS NOTE THAT IS A U.S. PERSON AND IS NOT BOTH (A) A “QUALIFIED PURCHASER” OR AN ENTITY BENEFICIALLY OWNED EXCLUSIVELY BY QUALIFIED PURCHASERS (AS DEFINED FOR PURPOSES OF SECTION 3(c)(7) OF THE

A1-1

INVESTMENT COMPANY ACT) AND (B) A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) TO SELL ITS INTEREST IN THE NOTE, OR MAY SELL SUCH INTEREST ON BEHALF OF SUCH OWNER.

EACH PURCHASER OR TRANSFEREE OF THIS NOTE WILL BE REQUIRED OR DEEMED TO REPRESENT AND WARRANT THAT (A) FOR SO LONG AS IT HOLDS THIS NOTE OR INTEREST HEREIN, IT IS NOT, AND IS NOT ACTING ON BEHALF OF, A BENEFIT PLAN INVESTOR; AND (B) IF SUCH PERSON IS A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, (I) IT IS NOT, AND FOR SO LONG AS IT HOLDS THIS NOTE OR INTEREST HEREIN WILL NOT BE, SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAW OR REGULATION THAT COULD CAUSE THE UNDERLYING ASSETS OF THE ISSUER TO BE TREATED AS ASSETS OF THE PURCHASER OR TRANSFEREE BY VIRTUE OF ITS INTEREST IN THIS NOTE AND THEREBY SUBJECT THE ISSUER AND THE COLLATERAL MANAGER (OR OTHER PERSONS RESPONSIBLE FOR THE INVESTMENT AND OPERATION OF THE ISSUER’S ASSETS) TO LAWS OR REGULATIONS THAT ARE SIMILAR TO THE FIDUCIARY RESPONSIBILITY OR PROHIBITED TRANSACTION PROVISIONS CONTAINED IN TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND (II) ITS ACQUISITION, HOLDING AND DISPOSITION OF ITS INTEREST IN THIS NOTE WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY STATE, LOCAL, OTHER FEDERAL OR NON-U.S. LAW OR REGULATION THAT IS SUBSTANTIALLY SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (ANY SUCH LAW OR REGULATION, AN “OTHER PLAN LAW”). EACH PURCHASER OR TRANSFEREE OF THIS NOTE WILL ALSO BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE APPLICABLE EXHIBIT B TO THE INDENTURE. “BENEFIT PLAN INVESTOR” MEANS A BENEFIT PLAN INVESTOR, AS DEFINED IN SECTION 3(42) OF ERISA AND INCLUDES (X) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF TITLE I OF ERISA) THAT IS SUBJECT TO PART 4 OF TITLE I OF ERISA, (Y) A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (Z) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY SUCH EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN THE ENTITY.

ANY TRANSFER OF A BENEFICIAL INTEREST IN THIS NOTE IN VIOLATION OF THE FOREGOING OR TO A PERSON WHO IS A BENEFIT PLAN INVESTOR OR ACTING ON BEHALF OF OR USING THE ASSETS OF ANY BENEFIT PLAN INVESTOR TO ACQUIRE THIS NOTE SHALL BE NULL AND VOID AB INITIO AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY NOTICE OR INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE TRUSTEE, THE NOTE REGISTRAR OR ANY INTERMEDIARY.

A1-2

ANY TRANSFER, PLEDGE OR OTHER USE OF THIS NOTE FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN, UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR OF SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.).

TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE.

TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.

THE FAILURE TO PROVIDE THE ISSUER, THE TRUSTEE OR ANY PAYING AGENT WITH THE PROPERLY COMPLETED AND SIGNED APPLICABLE TAX CERTIFICATIONS (GENERALLY, IN THE CASE OF U.S. FEDERAL INCOME TAX, AN INTERNAL REVENUE SERVICE FORM W-9 (OR APPLICABLE SUCCESSOR FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE OR THE APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR APPLICABLE SUCCESSOR FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE) OR THE FAILURE TO MEET ITS NOTEHOLDER REPORTING OBLIGATIONS MAY RESULT IN WITHHOLDING FROM PAYMENTS IN RESPECT OF SUCH NOTE, INCLUDING U.S. FEDERAL WITHHOLDING OR BACK-UP WITHHOLDING.

EACH HOLDER AND BENEFICIAL OWNER OF THIS NOTE OR AN INTEREST IN THIS NOTE WILL BE REQUIRED TO PROVIDE ANY INFORMATION AS IS NECESSARY (IN THE SOLE DETERMINATION OF THE ISSUER, THE TRUSTEE AND ANY PAYING AGENT) FOR THE ISSUER, THE TRUSTEE AND ANY PAYING AGENT TO DETERMINE THEIR OBLIGATIONS UNDER SECTIONS 1471-1474 OF THE CODE.

A1-3

CM FINANCE SPV LTD.

[RULE 144A][REGULATION S] GLOBAL NOTE

representing

CLASS A NOTES DUE 2016

Up to U.S.$150,000,000

[Date]

CUSIP No.: [125745 AA7]¹ [G3164B AA2]²

ISIN No.: [US125745AA78]³ [USG3164BAA29]⁴

CM FINANCE SPV LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”), for value received, hereby promise to pay to CEDE & CO. or registered assigns, upon presentation and surrender of this Class A Note (except as otherwise permitted by the Indenture referred to below), the principal sum as indicated on Schedule A hereto on May 22, 2016 (the “Stated Maturity”) except as provided below and in the Indenture.

The obligations of the Issuer under this Class A Note and the Indenture are limited recourse obligations of the Issuer payable solely from the Collateral in accordance with the Indenture, and following the realization of the Collateral in accordance with the Indenture and the application of such amounts in accordance with the terms of the Indenture, all claims of the Holders of Class A Notes shall be extinguished and shall not thereafter revive.

The Issuer promises to pay interest, if any, on each Payment Date commencing June 26, 2013 (or, if any such day is not a Business Day, the next succeeding Business Day), in accordance with Section 11.1(a)(i) of the Indenture. The interest so payable on any Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Class A Note (or one or more predecessor Class A Notes) is registered at the close of business on the Record Date for such interest, which shall be the day (whether or not a Business Day) immediately prior to such Payment Date.

The principal of this Class A Note matures at par and is due and payable on the Stated Maturity, unless the principal of this Class A Note becomes due and payable at an earlier date by declaration of acceleration or otherwise. Notwithstanding the foregoing, the payment of principal of this Class A Note may only occur in accordance with the Priority of Payments.

¹  Insert in case of Rule 144A Global Note.

²  Insert in case of Regulation S Global Note.

³  Insert in case of Rule 144A Global Note.

⁴  Insert in case of Regulation S Global Note.

A1-4

All payments made by the Issuer under this Class A Note will be made without any deduction or withholding for or on account of any tax unless such deduction or withholding is required by applicable law, as modified by the practice of any relevant governmental authority, then in effect. If the Issuer is so required to deduct or withhold, then the Issuer will not be obligated to pay any additional amounts in respect of such withholding or deduction.

Unless the certificate of authentication hereon has been executed by the Trustee or the Authenticating Agent by the manual signature of one of their Authorized Officers, this Class A Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

This Class A Note is one of a duly authorized issue of Class A Notes due 2016 (the “Class A Notes”) issued and to be issued under the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity. Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee and the Holders of the Class A Notes and the terms upon which the Class A Notes are, and are to be, authenticated and delivered.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Indenture.

Transfers of this [Rule 144A][Regulation S] Global Note shall be limited to transfers of such Global Note in whole, but not in part, to a nominee of the DTC or to a successor of the DTC or such successor of the DTC or such successor’s nominee, except as otherwise set forth in the Indenture.

The Issuer and the Trustee, and any agent of the Issuer or the Trustee shall treat as the owner of this Class A Note (a) for the purpose of receiving payments on this Class A Note (whether or not this Class A Note is overdue), the Person in whose name this Class A Note is registered on the Note Register at the close of business on the applicable Record Date and (b) on any other date for all other purposes whatsoever (whether or not this Class A Note is overdue), the Person in whose name this Class A Note is then registered on the Note Register, and none of the Issuer, the Trustee or any agent of the Issuer or the Trustee shall be affected by notice to the contrary.

If an Event of Default shall occur and be continuing, the Class A Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

Interests in this [Rule 144A][Regulation S] Global Note may be exchanged for an interest in, or transferred to a transferee taking an interest in, the corresponding [Regulation S][Rule 144A] Global Note subject to and in accordance with the restrictions set forth in the Indenture and in the legend attached to this Class A Note and are otherwise transferable in accordance with DTC’s rules and procedures in use at such time. This [Rule 144A][Regulation S] Global Note is subject to mandatory exchange for Certificated Notes under the limited circumstances set forth in the Indenture.

A1-5

[The provisions of the “Operating Procedures of the Euroclear System” of Euroclear and the “Terms and Conditions Governing Use of Participants” of Clearstream, respectively, will be applicable to this Global Secured Note insofar as interests in this Global Secured Note are held by Agent Members of Euroclear or Clearstream, as the case may be.]⁵

Upon exchange of or increase in any interest represented by this [Rule 144A][Regulation S] Global Note, this [Rule 144A][Regulation S] Global Note shall be endorsed (or deemed to have been endorsed) on Schedule A hereto to reflect the reduction of or increase in the principal amount evidenced hereby.

The Class A Notes will be issued in minimum denominations of U.S.$500,000 and integral multiples of U.S.$1,000 in excess thereof.

Title to Class A Notes shall pass by registration in the Note Register kept by the Note Registrar.

No service charge shall be made for registration of transfer or exchange of this Class A Note, but the Issuer, the Note Registrar or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Note Registrar or the Trustee shall be permitted to request such evidence reasonably satisfactory to it documenting the identity and/or signature of the transferor and the transferee.

AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THE CLASS A NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THE INDENTURE AND THE CLASS A NOTES AND ANY MATTERS ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER TO THE INDENTURE AND THE CLASS A NOTES (WHETHER IN CONTRACT, TORT OR OTHERWISE), SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.

- signature page follows -

⁵  Insert in case of Regulation S Global Note.

A1-6

IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed as of the date first set forth above.

CM FINANCE SPV LTD.,
By:
	Name:
	Title:	Director

A1-7

CERTIFICATE OF AUTHENTICATION

This is one of the Class A Notes referred to in the within-mentioned Indenture.

STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
	Authorized Signatory

A1-8

SCHEDULE A

SCHEDULE OF EXCHANGES

The outstanding principal amount of the Class A Notes represented by this [Rule 144A][Regulation S] Global Note on the Closing Date is U.S.$[—]. The following exchanges of or increases in the whole or a part of the Class A Notes represented by this [Rule 144A][Regulation S] Global Note have been made:

Date exchange/ increase made Original principal
amount of this
[Rule 144A][Regulation S]
Global Note Part of principal amount
of this
[Rule 144A][Regulation S]
Global Note exchanged/
increased Remaining principal
amount of this
[Rule 144A][Regulation S]
Global Note
following such
exchange/ increase Notation
made by or
on behalf
of the
Issuer

A1-9

EXHIBIT A2

FORM OF CERTIFICATED CLASS A NOTE

[RULE 144A][REGULATION S] CERTIFICATED NOTE

representing

CLASS A NOTES DUE 2016

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO A PERSON (1) THAT IS A “QUALIFIED PURCHASER” (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”) AND THE RULES THEREUNDER) OR AN ENTITY BENEFICIALLY OWNED EXCLUSIVELY BY QUALIFIED PURCHASERS (AS DEFINED FOR PURPOSES OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT), (2) THAT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT, AS AMENDED (“RULE 144A”)), (3) THAT WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE HOLDER IS A QUALIFIED PURCHASER), (4) THAT HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL OWNERS WHEN THE HOLDER IS A PRIVATE INVESTMENT COMPANY FORMED BEFORE APRIL 30, 1996, (5) THAT IS NOT A BROKER-DEALER WHICH OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25 MILLION IN SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED PERSONS OF THE DEALER AND (6) THAT IS NOT A PLAN REFERRED TO IN PARAGRAPH (A)(1)(i)(D) OR (A)(1)(i)(E) OF RULE 144A OR A TRUST FUND REFERRED TO IN PARAGRAPH (A)(1)(i)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH A PLAN, IF INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE MADE BY THE BENEFICIARIES OF THE PLAN OR (B) TO A PERSON THAT IS NOT A “U.S. PERSON” (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATION AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY APPLICABLE JURISDICTION. THE ISSUER OF THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT COMPANY ACT.

THE ISSUER, OR ON ITS BEHALF, THE COLLATERAL MANAGER, HAS THE RIGHT, UNDER THE INDENTURE, TO COMPEL ANY BENEFICIAL OWNER OF AN INTEREST IN THIS NOTE THAT IS A U.S. PERSON AND IS NOT BOTH (A) A “QUALIFIED PURCHASER” OR AN ENTITY BENEFICIALLY OWNED EXCLUSIVELY BY QUALIFIED PURCHASERS (AS DEFINED FOR PURPOSES OF SECTION 3(c)(7) OF THE

A2-1

INVESTMENT COMPANY ACT) AND (B) A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) TO SELL ITS INTEREST IN THE NOTE, OR MAY SELL SUCH INTEREST ON BEHALF OF SUCH OWNER.

EACH PURCHASER OR TRANSFEREE OF THIS NOTE WILL BE REQUIRED OR DEEMED TO REPRESENT AND WARRANT THAT (A) FOR SO LONG AS IT HOLDS THIS NOTE OR INTEREST HEREIN, IT IS NOT, AND IS NOT ACTING ON BEHALF OF, A BENEFIT PLAN INVESTOR; AND (B) IF SUCH PERSON IS A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, (I) IT IS NOT, AND FOR SO LONG AS IT HOLDS THIS NOTE OR INTEREST HEREIN WILL NOT BE, SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAW OR REGULATION THAT COULD CAUSE THE UNDERLYING ASSETS OF THE ISSUER TO BE TREATED AS ASSETS OF THE PURCHASER OR TRANSFEREE BY VIRTUE OF ITS INTEREST IN THIS NOTE AND THEREBY SUBJECT THE ISSUER AND THE COLLATERAL MANAGER (OR OTHER PERSONS RESPONSIBLE FOR THE INVESTMENT AND OPERATION OF THE ISSUER’S ASSETS) TO LAWS OR REGULATIONS THAT ARE SIMILAR TO THE FIDUCIARY RESPONSIBILITY OR PROHIBITED TRANSACTION PROVISIONS CONTAINED IN TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND (II) ITS ACQUISITION, HOLDING AND DISPOSITION OF ITS INTEREST IN THIS NOTE WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY STATE, LOCAL, OTHER FEDERAL OR NON-U.S. LAW OR REGULATION THAT IS SUBSTANTIALLY SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (ANY SUCH LAW OR REGULATION, AN “OTHER PLAN LAW”). EACH PURCHASER OR TRANSFEREE OF THIS NOTE WILL ALSO BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE APPLICABLE EXHIBIT B TO THE INDENTURE. “BENEFIT PLAN INVESTOR” MEANS A BENEFIT PLAN INVESTOR, AS DEFINED IN SECTION 3(42) OF ERISA AND INCLUDES (X) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF TITLE I OF ERISA) THAT IS SUBJECT TO PART 4 OF TITLE I OF ERISA, (Y) A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (Z) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY SUCH EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN THE ENTITY.

TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.

THE FAILURE TO PROVIDE THE ISSUER, THE TRUSTEE OR ANY PAYING AGENT WITH THE PROPERLY COMPLETED AND SIGNED

A2-2

APPLICABLE TAX CERTIFICATIONS (GENERALLY, IN THE CASE OF U.S. FEDERAL INCOME TAX, AN INTERNAL REVENUE SERVICE FORM W-9 (OR APPLICABLE SUCCESSOR FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE OR THE APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR APPLICABLE SUCCESSOR FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE) OR THE FAILURE TO MEET ITS NOTEHOLDER REPORTING OBLIGATIONS MAY RESULT IN WITHHOLDING FROM PAYMENTS IN RESPECT OF SUCH NOTE, INCLUDING U.S. FEDERAL WITHHOLDING OR BACK-UP WITHHOLDING.

EACH HOLDER AND BENEFICIAL OWNER OF THIS NOTE OR AN INTEREST IN THIS NOTE WILL BE REQUIRED TO PROVIDE ANY INFORMATION AS IS NECESSARY (IN THE SOLE DETERMINATION OF THE ISSUER, THE TRUSTEE AND ANY PAYING AGENT) FOR THE ISSUER, THE TRUSTEE AND ANY PAYING AGENT TO DETERMINE THEIR OBLIGATIONS UNDER SECTIONS 1471-1474 OF THE CODE.

A2-3

CM FINANCE SPV LTD.

[RULE 144A][REGULATION S] CERTIFICATED NOTE

representing

CLASS A NOTES DUE 2016

U.S.$ [—]

[Date]

CUSIP No.: [125745 AA7]⁶ [G3164B AA2]⁷

ISIN No.: [US125745AA78]⁸ [USG3164BAA29]⁹

CM FINANCE SPV LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”), for value received, hereby promise to pay to [                            ], or registered assigns, upon presentation and surrender of this Class A Note (except as otherwise permitted by the Indenture referred to below), the principal sum of [                                        ] UNITED STATES DOLLARS (U.S.$[—]) on May 22, 2016 (the “Stated Maturity”) except as provided below and in the Indenture. The obligations of the Issuer under this Class A Note and the Indenture are limited recourse obligations of the Issuer payable solely from the Assets in accordance with the Indenture, and following realization of the Assets in accordance with the Indenture, all claims of the Holders of Class A Notes shall be extinguished and shall not thereafter revive.

The principal of this Class A Note matures at part and, except as otherwise provided in the Indenture, is due

The obligations of the Issuer under this Class A Note and the Indenture are limited recourse obligations of the Issuer payable solely from the Collateral in accordance with the Indenture, and following the realization of the Collateral in accordance with the Indenture and the application of such amounts in accordance with the terms of the Indenture, all claims of Holders of the Class A Notes shall be extinguished and shall not thereafter revive.

The Issuer promises to pay interest, if any, on each Payment Date commencing June 26, 2013 (or, if any such day is not a Business Day, the next succeeding Business Day) in accordance with Section 11.1(a)(i) of the Indenture. The

⁶  Insert in case of Rule 144A Global Note.

⁷  Insert in case of Regulation S Global Note.

⁸  Insert in case of Rule 144A Global Note.

⁹  Insert in case of Regulation S Global Note.

A2-4

interest so payable on any Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Class A Note (or one or more predecessor Class A Notes) is registered at the close of business on the Record Date for such interest, which shall be the day (whether or not a Business Day) immediately prior to such Payment Date.

The principal of this Class A Note matures at par and is due and payable on the Stated Maturity, unless the principal of such Class A Note becomes due and payable at an earlier date by declaration of acceleration or otherwise. Notwithstanding the foregoing, the payment of principal of this Class A Notes may only occur in accordance with the Priority of Payments.

All payments made by the Issuer under this Class A Note will be made without any deduction or withholding for or on account of any tax unless such deduction or withholding is required by applicable law, as modified by the practice of any relevant governmental authority, then in effect. If the Issuer is so required to deduct or withhold, then the Issuer will not be obligated to pay any additional amounts in respect of such withholding or deduction.

Unless the certificate of authentication hereon has been executed by the Trustee or the Authenticating Agent by the manual signature of one of their Authorized Officers, this Class A Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

This Class A Note is one of a duly authorized issue of Class A Notes due 2016 (the “Class A Notes”) issued and to be issued under the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity. Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee and the Holders of the Class A Notes and the terms upon which the Class A Notes are, and are to be, authenticated and delivered.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Indenture.

Transfers of this Note shall be limited to transfers made in accordance with the restrictions set forth in the Indenture referred to herein.

The Issuer and the Trustee, and any agent of the Issuer or the Trustee shall treat as the owner of this Class A Note (a) for the purpose of receiving payments on this Class A Note (whether or not this Class A Note is overdue), the Person in whose name this Class A Note is registered on the Note Register at the close of business on the applicable Record Date and (b) on any other date for all other purposes whatsoever (whether or not this Class A Note is overdue), the Person in whose name this Class A Note is then registered on the Note Register, and none of the Issuer, the Trustee or any agent of the Issuer or the Trustee shall be affected by notice to the contrary.

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If an Event of Default shall occur and be continuing, the Class A Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

This [Rule 144A][Regulation S] Certificated Note may be exchanged for an interest in, or transferred to a transferee taking an interest in, a [Regulation S][Rule 144A] Certificated Note subject to and in accordance with the restrictions set forth in the Indenture and in the legend attached to this Class A Note

The Class A Notes will be issued in minimum denominations of U.S.$500,000 and integral multiples of U.S.$1,000 in excess thereof.

Title to Class A Notes shall pass by registration in the Note Register kept by the Note Registrar.

No service charge shall be made for registration of transfer or exchange of this Class A Note, but the Issuer, the Note Registrar or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Note Registrar or the Trustee shall be permitted to request such evidence reasonably satisfactory to it documenting the identity and/or signature of the transferor and the transferee.

This Class A Note shall be a security governed by Article 8 of the UCC.

AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THE CLASS A NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH, AND THE INDENTURE AND THE CLASS A NOTES AND ANY MATTERS ARISING OUT OF OR RELATING IN ANY WAY WHATSOEVER TO THE INDENTURE AND THE CLASS A NOTES (WHETHER IN CONTRACT, TORT OR OTHERWISE), SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.

- signature page follows -

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IN WITNESS WHEREOF, the Issuer has caused this Class A Note to be duly executed as of the date first set forth above.

CM FINANCE SPV LTD.,
By:
	Name:
	Title:	Director

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CERTIFICATE OF AUTHENTICATION

This is one of the Class A Notes referred to in the within-mentioned Indenture.

STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
	Authorized Signatory

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ASSIGNMENT FORM

For value received

does hereby sell, assign, and transfer to

Please insert social security or
other identifying number of assignee

Please print or type name
and address, including zip code,
of assignee:

the within Security and does hereby irrevocably constitute and appoint                                          Attorney to transfer the Security on the books of the Trustee with full power of substitution in the premises.

                  Date: Your Signature

(Sign exactly as your name appears in the security)

A2-9

EXHIBIT A3

FORM OF CERTIFICATED CLASS A-R NOTE

[RULE 144A][REGULATION S] CERTIFICATED NOTE

representing

CLASS A-R NOTES DUE 2016

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO A PERSON (1) THAT IS A “QUALIFIED PURCHASER” (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE INVESTMENT COMPANY ACT) AND THE RULES THEREUNDER) OR AN ENTITY BENEFICIALLY OWNED EXCLUSIVELY BY QUALIFIED PURCHASERS (AS DEFINED FOR PURPOSES OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT), (2) THAT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT, AS AMENDED (RULE 144A)), (3) THAT WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE HOLDER IS A QUALIFIED PURCHASER), (4) THAT HAS RECEIVED THE NECESSARY CONSENT FROM ITS BENEFICIAL OWNERS WHEN THE HOLDER IS A PRIVATE INVESTMENT COMPANY FORMED BEFORE APRIL 30, 1996, (5) THAT IS NOT A BROKER-DEALER WHICH OWNS AND INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25 MILLION IN SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED PERSONS OF THE DEALER AND (6) THAT IS NOT A PLAN REFERRED TO IN PARAGRAPH (A)(1)(i)(D) OR (A)(1)(i)(E) OF RULE 144A OR A TRUST FUND REFERRED TO IN PARAGRAPH (A)(1)(i)(F) OF RULE 144A THAT HOLDS THE ASSETS OF SUCH A PLAN, IF INVESTMENT DECISIONS WITH RESPECT TO THE PLAN ARE MADE BY THE BENEFICIARIES OF THE PLAN OR (B) TO A PERSON THAT IS NOT A “U.S. PERSON” (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN COMPLIANCE WITH THE CERTIFICATION AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE AND THE REVOLVING CREDIT NOTE AGREEMENT REFERRED TO HEREIN AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY APPLICABLE JURISDICTION. THE ISSUER OF THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT COMPANY ACT.

THE ISSUER, OR ON ITS BEHALF, THE COLLATERAL MANAGER, HAS THE RIGHT, UNDER THE INDENTURE, TO COMPEL ANY BENEFICIAL OWNER OF AN INTEREST IN THIS NOTE THAT IS A U.S. PERSON AND IS NOT BOTH (A) A “QUALIFIED PURCHASER” OR AN ENTITY BENEFICIALLY OWNED EXCLUSIVELY BY QUALIFIED PURCHASERS (AS DEFINED FOR PURPOSES OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT) AND (B) A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) TO SELL ITS INTEREST IN THE NOTE, OR MAY SELL SUCH INTEREST ON BEHALF OF SUCH OWNER.

A3-1

EACH PURCHASER OR TRANSFEREE OF THIS NOTE WILL BE REQUIRED OR DEEMED TO REPRESENT AND WARRANT THAT (A) FOR SO LONG AS IT HOLDS THIS NOTE OR INTEREST HEREIN, IT IS NOT, AND IS NOT ACTING ON BEHALF OF, A BENEFIT PLAN INVESTOR; AND (B) IF SUCH PERSON IS A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, (I) IT IS NOT, AND FOR SO LONG AS IT HOLDS THIS NOTE OR INTEREST HEREIN WILL NOT BE, SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAW OR REGULATION THAT COULD CAUSE THE UNDERLYING ASSETS OF THE ISSUER TO BE TREATED AS ASSETS OF THE PURCHASER OR TRANSFEREE BY VIRTUE OF ITS INTEREST IN THIS NOTE AND THEREBY SUBJECT THE ISSUER AND THE COLLATERAL MANAGER (OR OTHER PERSONS RESPONSIBLE FOR THE INVESTMENT AND OPERATION OF THE ISSUER’S ASSETS) TO LAWS OR REGULATIONS THAT ARE SIMILAR TO THE FIDUCIARY RESPONSIBILITY OR PROHIBITED TRANSACTION PROVISIONS CONTAINED IN TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (ERISA) OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE CODE), AND (II) ITS ACQUISITION, HOLDING AND DISPOSITION OF ITS INTEREST IN THIS NOTE WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY STATE, LOCAL, OTHER FEDERAL OR NON-U.S. LAW OR REGULATION THAT IS SUBSTANTIALLY SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE (ANY SUCH LAW OR REGULATION, AN OTHER PLAN LAW). EACH PURCHASER OR TRANSFEREE OF THIS NOTE WILL ALSO BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE APPLICABLE EXHIBIT B TO THE INDENTURE. BENEFIT PLAN INVESTOR MEANS A BENEFIT PLAN INVESTOR, AS DEFINED IN SECTION 3(42) OF ERISA AND INCLUDES (X) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF TITLE I OF ERISA) THAT IS SUBJECT TO PART 4 OF TITLE I OF ERISA, (Y) A PLAN AS DEFINED IN SECTION 4975(e)(1) OF THE CODE THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (Z) ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY SUCH EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN THE ENTITY.

TRANSFERS OF THIS NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE AND THE REVOLVING CREDIT NOTE AGREEMENT REFERRED TO HEREIN.

THE FAILURE TO PROVIDE THE ISSUER, THE TRUSTEE OR ANY PAYING AGENT WITH THE PROPERLY COMPLETED AND SIGNED APPLICABLE TAX CERTIFICATIONS (GENERALLY, IN THE CASE OF U.S. FEDERAL INCOME TAX, AN INTERNAL REVENUE SERVICE FORM W-9 (OR APPLICABLE SUCCESSOR FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE OR THE APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR APPLICABLE SUCCESSOR FORM) IN THE CASE OF A PERSON THAT IS

A3-2

NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE) OR THE FAILURE TO MEET ITS NOTEHOLDER REPORTING OBLIGATIONS MAY RESULT IN WITHHOLDING FROM PAYMENTS IN RESPECT OF SUCH NOTE, INCLUDING U.S. FEDERAL WITHHOLDING OR BACK-UP WITHHOLDING.

EACH HOLDER AND BENEFICIAL OWNER OF THIS NOTE OR AN INTEREST IN THIS NOTE WILL BE REQUIRED TO PROVIDE ANY INFORMATION AS IS NECESSARY (IN THE SOLE DETERMINATION OF THE ISSUER, THE TRUSTEE AND ANY PAYING AGENT) FOR THE ISSUER, THE TRUSTEE AND ANY PAYING AGENT TO DETERMINE THEIR OBLIGATIONS UNDER SECTIONS 1471-1474 OF THE CODE.

A3-3

CM FINANCE SPV LTD.

[RULE 144A][REGULATION S] CERTIFICATED NOTE

representing

CLASS A-R NOTES DUE 2016

Up to U.S.$ [—]

[Date]

CUSIP No.: [125745 AB5]¹⁰ [G3164B AB0]¹¹

ISIN No.: [US125745AB51]¹² [USG3164BAB02]¹³

CM FINANCE SPV LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”), for value received, hereby promise to pay to [                            ] (the “Class A-R Noteholder”), or registered assigns, upon presentation and surrender of this Class A-R Note (except as otherwise permitted by the Indenture and the Revolving Credit Note Agreement referred to below), the principal sum of up to [                                        ] UNITED STATES DOLLARS (U.S.$[—]) or such other principal sum as is equal to the Class A-R Noteholder’s applicable portion of the Outstanding Class A-R Funded Amount and any portion of the Class A-R Noteholder’s Class A-R Commitment Amount on deposit in the Class A-R Noteholder’s Class A-R Prepayment Account as identified from time to time on the Class A-R Note Register as being represented by this Class A-R Note on May 22, 2016 (the “Stated Maturity”) or as otherwise provided in (a) the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the Trustee) and, solely as expressly specified in the Indenture, in its individual capacity; and (b) the Revolving Credit Note Agreement, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Revolving Credit Note Agreement”), between the Issuer, each entity party thereto as a Class A-R Noteholder, State Street Bank and Trust Company, as revolving credit note agent, and the Trustee.

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Indenture or, if not defined in the Indenture, in the Revolving Credit Note Agreement.

¹⁰  Insert in case of Rule 144A Note.

¹¹  Insert in case of Regulation S Note.

¹²  Insert in case of Rule 144A Note.

¹³  Insert in case of Regulation S Note.

A3-4

References herein to “principal” shall be deemed to refer to amounts payable in respect of the applicable portion of the Outstanding Class A-R Funded Amount.

This Class A-R Note is one of a duly authorized issue of Class A-R Notes due 2016 (the “Class A-R Notes”) issued and to be issued under the Indenture. Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee and the Holders of the Class A-R Notes and the terms upon which the Class A-R Notes are, and are to be, authenticated and delivered.

This Class A-R Note evidences the advances (as reflected on the Class A-R Note Register) made by the Class A-R Noteholder to the Issuer pursuant to the Revolving Credit Note Agreement. Amounts may be borrowed, repaid and reborrowed from time to time in respect of this Class A-R Note in accordance with the Revolving Credit Note Agreement. This Class A-R Note is subject to transfer restrictions set forth in the Indenture and the Revolving Credit Note Agreement.

The obligations of the Issuer under this Class A-R Note, the Indenture and the Revolving Credit Note Agreement are limited recourse obligations of the Issuer payable solely from the Collateral in accordance with the Indenture, and following the realization of the Collateral in accordance with the Indenture and the application of such amounts in accordance with the terms of the Indenture, all claims of Holders of the Class A-R Notes shall be extinguished and shall not thereafter revive.

The Issuer promises to pay interest, if any, on each Payment Date commencing December 27, 2013 (or, if any such day is not a Business Day, the next succeeding Business Day) in accordance with Section 11.1(a)(i) of the Indenture. The interest so payable on any Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Class A-R Note (or one or more predecessor Class A-R Notes) is registered at the close of business on the Record Date for such interest, which shall be the day (whether or not a Business Day) immediately prior to such Payment Date.

The principal of this Class A-R Note matures at par and is due and payable on the Stated Maturity, unless the principal of such Class A-R Note becomes due and payable at an earlier date by declaration of acceleration or otherwise. Repayments of principal on this Class A-R Note shall be applied, and the Outstanding Class A-R Funded Amount and Class A-R Commitment Amount shall be increased and decreased, as described in Section 2 of the Revolving Credit Note Agreement. Notwithstanding the foregoing, the payment of principal of this Class A-R Notes may only occur in accordance with the Priority of Payments.

All payments made by the Issuer under this Class A-R Note will be made without any deduction or withholding for or on account of any tax unless such deduction or withholding is required by applicable law, as modified by the practice of any relevant governmental authority, then in effect. If the Issuer is so required to deduct or withhold, then the Issuer will not be obligated to pay any additional amounts in respect of such withholding or deduction.

A3-5

Unless the certificate of authentication hereon has been executed by the Trustee or the Authenticating Agent by the manual signature of one of their Authorized Officers, this Class A-R Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

Transfers of this Note shall be limited to transfers made in accordance with the restrictions set forth in the Indenture and the Revolving Credit Note Agreement.

The Issuer and the Trustee, and any agent of the Issuer or the Trustee shall treat as the owner of this Class A-R Note (a) for the purpose of receiving payments on this Class A-R Note (whether or not this Class A-R Note is overdue), the Person in whose name this Class A-R Note is registered on the Class A-R Note Register at the close of business on the applicable Record Date and (b) on any other date for all other purposes whatsoever (whether or not this Class A-R Note is overdue), the Person in whose name this Class A-R Note is then registered on the Class A-R Note Register, and none of the Issuer, the Trustee or any agent of the Issuer or the Trustee shall be affected by notice to the contrary.

If an Event of Default shall occur and be continuing, the Class A-R Notes may become or be declared due and payable in the manner and with the effect provided in the Indenture.

This [Rule 144A][Regulation S] Class A-R Note may be exchanged for an interest in, or transferred to a transferee taking an interest in, a [Regulation S][Rule 144A] Class A-R Note subject to and in accordance with the restrictions set forth in the Indenture, the Revolving Credit Note Agreement and in the legend attached to this Class A-R Note.

The Class A-R Notes will be issued in minimum denominations of U.S.$[        ] (which may represent a combination of the Outstanding Class A-R Funded Amount, if any, and any Remaining Unfunded Facility Commitment attributable to such Class A-R Notes) and integral multiples of U.S.$[1,000] in excess thereof. After issuance, this Class A-R Note may fail to be in compliance with the minimum denomination requirement as a result of the repayment of principal hereof in accordance with the Priority of Payments. The aggregate principal amount of this Class A-R Note may from time to time be increased or decreased by adjustments made on the Class A-R Note Register in the manner provided in Section 4.4(b) of the Revolving Credit Note Agreement.

Title to Class A-R Notes shall pass by registration in the Class A-R Note Register kept by the Class A-R Note Registrar.

No service charge shall be made for registration of transfer or exchange of this Class A-R Note, but the Issuer, the Class A-R Note Registrar or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Class A-R Note Registrar or the Trustee shall be permitted to request such evidence reasonably satisfactory to it documenting the identity and/or signature of the transferor and the transferee.

A3-6

This Class A-R Note shall be a security governed by Article 8 of the UCC.

This Class A-R Note shall be construed in accordance with, and this Class A-R Note and any matters arising out of or relating in any way whatsoever to this Class A-R Note (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

A3-7

IN WITNESS WHEREOF, the Issuer has caused this Class A-R Note to be duly executed as of the date first set forth above.

CM FINANCE SPV LTD.,

By:

Name:

Title:

CERTIFICATE OF AUTHENTICATION

This is one of the Class A-R Notes referred to in the within-mentioned Indenture.

STATE STREET BANK AND TRUST COMPANY,

as Trustee

By:

Name:

Title:

A3-8

ASSIGNMENT FORM

For value received

does hereby sell, assign, and transfer to

Please insert social security or other identifying number of assignee.

Please print or type name and address, including zip code, of assignee:

the within Class A-R Note and does hereby irrevocably constitute and appoint                                          as attorney to transfer the Class A-R Note on the books of the Issuer with full power of substitution in the premises.

Date: Your Signature:

A3-9

EXHIBIT B

FORMS OF TRANSFER AND EXCHANGE CERTIFICATES

EXHIBIT B1

FORM OF TRANSFEROR CERTIFICATE FOR TRANSFER OF RULE 144A GLOBAL NOTE OR CERTIFICATED NOTE TO REGULATION S GLOBAL NOTE

State Street Bank and Trust Company, as Trustee

200 Clarendon Street

Mail Code: JHT06

Boston, MA 02116

Attention: Structured Trust & Analytics

Re: CM FINANCE SPV LTD. (the “Issuer”)

Class A Notes due 2016 (the “Notes”)

Reference is hereby made to the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.

This letter relates to U.S.$[        ] aggregate principal amount of Notes which are held in the form of a [Rule 144A Global Note] [Certificated Note][with the depository] in the name of [                    ] (the “Transferor”) to effect the transfer of the Notes in exchange for an equivalent beneficial interest in a Regulation S Global Note.

In connection with such transfer, and in respect of such Notes, the Transferor does hereby certify that such Notes are being transferred to [                    ] (the “Transferee”) in accordance with Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”) and the transfer restrictions set forth in the Indenture and the legends attached to such Notes and that:

a. the offer of such Notes was not made to a person in the United States;

b. at the time the buy order was originated, the Transferee was outside the United States or the Transferor and any person acting on its behalf reasonably believed that the Transferee was outside the United States;

c. no directed selling efforts have been made in contravention of the requirements of Rule 903 or 904 of Regulation S, as applicable;

d. none of the Transferor or any of its affiliates (as such term is defined in Rule 501(b) of Regulation D under the Securities Act) or any other Person acting on any of their behalf has engaged, in connection with such Notes, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act;

B1-1

e. the Transferor has not solicited offers for such Notes, and has not arranged commitments to purchase Notes, except in accordance with the Indenture and any applicable U.S. federal and state securities laws and the securities laws of any other jurisdiction in which such Notes have been offered;

f. the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and

g. the Transferee is not a U.S. Person.

- signature page follows -

B1-2

The Transferor understands that the Issuer, the Sole Shareholder, the Collateral Manager and the Trustee and their respective counsel will rely upon the accuracy and truth of the foregoing representations, and the Transferor hereby consents to such reliance.

(Name of Transferor)
By:
	Name:
	Title:

Dated:             ,         

cc:	CM FINANCE SPV LTD.
	c/o CM Finance LLC
	399 Park Avenue, 39th Floor New York, NY 10022
	Facsimile Number: (212) 380-5915
	Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer

B1-3

EXHIBIT B2

FORM OF PURCHASER REPRESENTATION LETTER FOR CERTIFICATED NOTES

[DATE]                    

State Street Bank and Trust Company, as Trustee

200 Clarendon Street,

Mail Code: JHT06,

Boston, MA 02116

Attn: Structured Trust & Analytics

Re: CM FINANCE SPV LTD. (the “Issuer”)

Class A Notes due 2016

Reference is hereby made to (a) the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity[; and (b) the Revolving Credit Note Agreement, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Revolving Credit Note Agreement”), between the Issuer, each entity party thereto as a Class A-R Noteholder, State Street Bank and Trust Company, as revolving credit note agent, and the Trustee]. Capitalized terms not defined in this Certificate shall have the meanings ascribed to them in the Indenture[ or, if not defined in the Indenture, in the Revolving Credit Note Agreement].

This letter relates to U.S.$[        ] aggregate outstanding principal amount of Class A[-R] Notes (the “Notes”), in the form of one or more Certificated Notes to effect the transfer of the Notes to [                    ] (the “Transferee”).

In connection with such request, and in respect of such Notes, the Transferee does hereby certify that the Notes are being transferred (i) in accordance with the transfer restrictions set forth in the Indenture [and in the Revolving Credit Note Agreement] and (ii) pursuant to an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”) and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction.

In addition, the Transferee hereby represents, warrants and covenants for the benefit of the Issuer and its counsel that it is:

(a) a “qualified institutional buyer” that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A under the Securities Act or a fund referred to in paragraph (a)(1)(i)(f) of Rule

B2-1

144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan, who is purchasing the Notes in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder who is also a “qualified purchaser” (within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules thereunder, a “Qualified Purchaser”) or an entity beneficially owned exclusively by Qualified Purchasers;

and

(b) acquiring the Notes for its own account (and not for the account of any other Person) in a minimum denomination of U.S.$[500,000] and in integral multiples of U.S.$[1,000] in excess thereof.

The Transferee further represents, warrants and covenants for the benefit of the Issuer as follows:

1. It understands that the Notes are being offered only in a transaction not involving any public offering in the United States of America 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 the Notes, such Notes may be offered, resold, pledged or otherwise transferred only in accordance with the provisions of the Indenture[, the Revolving Credit Note Agreement] and the legends on such Notes, including any requirement for written certifications. In particular, it understands that the Notes may be transferred only to a person that is either (a) both (1)(x) a Qualified Purchaser or (y) an entity owned (or in the case of Qualified Purchasers, beneficially owned) exclusively by Qualified Purchasers and (2) a “qualified institutional buyer” that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A under the Securities Act or a fund referred to in paragraph (a)(1)(i)(f) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan, who is purchasing the Notes in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder or (b) a person that is not a “U.S. person” as defined in Regulation S under the Securities Act, and is acquiring the Notes in an offshore transaction (as defined in Regulation S thereunder) in reliance on the exemption from registration provided by Regulation S. It acknowledges that no representation is 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 the Issuer has not been registered under the Investment Company Act, and that the Issuer is exempt from registration as such by virtue of Section 3(c)(7) of the Investment Company Act. It understands and acknowledges that the Issuer has the right, under the Indenture, to compel any beneficial owner of an interest in the Notes that fails to comply with the foregoing requirements to sell its interest in such Notes, or may sell such interest on behalf of such owner.

2. In connection with its purchase of the Notes: (i) none of the Issuer, the Sole Shareholder, the Collateral Manager, the Valuation Agent, the Trustee, the Collateral Administrator, the Administrator[, the Revolving Credit Note Agent] or any of their respective Affiliates is acting as a fiduciary or financial or investment adviser for it; (ii) it is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Sole Shareholder, the Collateral Manager, the Valuation Agent, the Trustee, the Collateral Administrator, the Administrator[, the Revolving Credit Note Agent] or any of their respective Affiliates; (iii) it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary, and

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has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to the Indenture [and the Revolving Credit Note Agreement]) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the Sole Shareholder, the Collateral Manager, the Valuation Agent, the Trustee, the Collateral Administrator, the Administrator[, the Revolving Credit Note Agent] or any of their respective Affiliates; (iv) it will hold and transfer at least the minimum denomination of such Notes; (v) it was not formed for the purpose of investing in the Notes; (vi) it has received the necessary consent from its beneficial owners if the holder is a private investment company formed before April 30, 1996; (vii) it is a sophisticated investor and is purchasing the 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; (viii) none of it or any of its affiliates (as such term is defined in Rule 501(b) of Regulation D under the Securities Act) or any other Person acting on any of their behalf has engaged or will engage, in connection with such Notes, in any form of (A) general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) directed selling efforts within the meaning of Rule 902(c) of Regulation S thereunder; (ix) it has not solicited and will not solicit offers for such Notes, and has not arranged and will not arrange commitments to purchase such Notes, except in accordance with the Indenture and any applicable U.S. federal and state securities laws and the securities laws of any other jurisdiction in which such Notes have been offered; and (x) it has not acquired any Note as part of a plan to reduce, avoid or evade U.S. Federal income tax.

3.(i) It is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act and also a Qualified Purchaser for purposes of Section 3(c)(7) of the Investment Company Act (or an entity beneficially owned exclusively by Qualified Purchasers); (ii) it is acquiring the Notes as principal solely for its own account for investment and not with a view to the resale, distribution or other disposition thereof in violation of the Securities Act; (iii) it is not a broker dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A under the Securities Act or a trust fund referred to in paragraph (a)(1)(i)(f) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan; (iv) it agrees that it shall not hold any Notes for the benefit of any other person, that it shall at all times be the sole beneficial owner thereof for purposes of the Investment Company Act and all other purposes and that it shall not sell participation interests in the Notes or enter into any other arrangement pursuant to which any other person shall be entitled to a beneficial interest in the distributions on the Notes; and (v) it will hold and transfer at least the minimum denomination of the Notes and provide notice of the relevant transfer restrictions to subsequent transferees, including that it may be relying on the exemption from registration under the Securities Act provided by Rule 144A thereunder.

4. It represents, warrants and agrees that (a) it is not, and is not acting on behalf of, a Benefit Plan Investor, as defined in Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and (b) if it is a governmental, church, non-U.S. or other plan which is subject to any state, local, other federal or non-U.S. law or regulation that is substantially similar to the prohibited transaction provisions of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (any such law or regulation an “Other Plan Law”), it is not, and for so long as it holds such Notes or interest therein it will not be, subject to any Similar Law, and its acquisition, holding and disposition of such Notes will not constitute or result in a non-exempt violation of any such Other Plan Law.

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5. It will treat its Notes as debt of the Issuer for United States federal and, to the extent permitted by law, state and local income and franchise tax purposes unless otherwise required by any relevant taxing authority.

6. It is          (check if applicable) a “United States person” within the meaning of Section 7701(a)(30) of the Code, and a properly completed and signed Internal Revenue Service Form W-9 (or applicable successor form) is attached hereto; or          (check if applicable) not a “United States person” within the meaning of Section 7701(a)(30) of the Code, and a properly completed and signed applicable Internal Revenue Service Form W-8 (or applicable successor form) is attached hereto. It understands and acknowledges that failure to provide the Issuer or the Trustee with the applicable tax certifications or the failure to meet its Noteholder Reporting Obligations may result in withholding or back-up withholding from payments to it in respect of the Notes.

7. It hereby agrees to provide the Issuer and Trustee (i) any information as is necessary (in the sole determination of the Issuer or the Trustee, as applicable) for the Issuer and the Trustee to determine whether it is a specified United States person as defined in Section 1473(3) of the Code (a “specified United States person”), a United States owned foreign entity as described in Section 1471(d)(3) of the Code (a “United States owned foreign entity”) or a foreign financial institution as defined in Section 1471(d)(4) of the Code and (ii) any additional information that the Issuer or its agent requests in connection with Sections 1471-1474 of the Code. If it is a specified United States person or a United States owned foreign entity, it also hereby agrees to (x) provide the Issuer and Trustee its name, address, U.S. taxpayer identification number and, if it is a United States owned foreign entity, the name, address and taxpayer identification number of each of its “substantial United States owners” (as defined in Section 1473(2) of the Code) and any other information requested by the Issuer or its agent upon request and (y) update any such information provided in clause (x) promptly upon learning that any such information previously provided has become obsolete or incorrect or is otherwise required. It understands and acknowledges that the Issuer may provide such information and any other information concerning its investment in the Notes to the U.S. Internal Revenue Service. It understands and acknowledges that the Issuer has the right, under the Indenture, to compel any beneficial owner of an interest in the Notes that fails to comply with the foregoing requirements to sell its interest in such Notes, or may sell such interest on behalf of such owner.

8. If it is not a “United States person” (as defined in Section 7701(a)(30) of the Code), it hereby represents that (i) either (A) it is not a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business (within the meaning of Section 881(c)(3)(A) of the Code), or (B) it is a person that is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S. source interest not attributable to a permanent establishment in the United States, and (ii) it is not purchasing the Notes in order to reduce its U.S. federal income tax liability pursuant to a tax avoidance plan.

9. It hereby represents and warrants that it is not an Affected Bank and it agrees and acknowledges that no transfer of a Note to an Affected Bank will be effective and none of the Issuer, the Trustee or the Note Registrar will recognize any such transfer, unless such transfer is specifically authorized by the Issuer in writing. An “Affected Bank” is a “bank” for purposes of Section 881 of the Code or an entity affiliated with such a bank that is neither (x) a United States person (within the meaning of Section 7701(a)(30) of the Code) nor (y) entitled to the benefits of an income tax treaty with the United States under which withholding taxes on interest payments made by obligors resident in the United States to such bank are reduced to 0%.

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10. It agrees not to seek to commence, 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 U.S. Federal or State bankruptcy or similar laws prior to the date which is one year and one day (or if longer, any applicable preference period) after the payment in full of all notes issued under the Indenture and any other debt obligations of the Issuer that have been rated upon issuance by any rating agency at the request of the Issuer.

11. To the extent required by the Issuer, as determined by the Issuer or the Collateral Manager on behalf of the Issuer, the Issuer may, upon notice to the Trustee, impose additional transfer restrictions on the Notes to comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and other similar laws or regulations, including, without limitation, requiring each transferee of a Note to make representations to the Issuer in connection with such compliance.

12. 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 Section 2.5 (Registration, Registration of Transfer and Exchange) of the Indenture, including the Exhibits referenced therein, Sections 2.11 and 2.12 of the Indenture[, the Revolving Credit Note Agreement] and the legends on the Notes.

13. It understands that the Issuer, the Sole Shareholder, the Collateral Manager, the Valuation Agent[, the Revolving Credit Note Agent] and the Trustee and their respective counsel will rely upon the accuracy and truth of the foregoing representations, and it hereby consents to such reliance.

14. It is not a member of the public in the Cayman Islands.

[The remainder of this page has been intentionally left blank.]

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Name of Purchaser:

Dated:

By:

Name:

Title:

Outstanding principal amount of Class A[-R] Notes: U.S.$ [        ]

Taxpayer identification number:

Address for notices:	Wire transfer information for payments:
	Bank:
	Address:
	Bank ABA#:
	Account #:
Telephone:	FAO:
Facsimile:	Attention:
Attention:

Denominations of certificates (if more than one):

Registered name:

cc:	CM Finance LLC
	399 Park Avenue, 39th Floor
	New York, NY 10022
	Re: CM FINANCE SPV LTD.
	Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer

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Annex

Tax Form

B2-7

EXHIBIT B3

FORM OF TRANSFEROR CERTIFICATE FOR TRANSFER OF REGULATION S GLOBAL NOTE, RULE 144A GLOBAL NOTE OR CERTIFICATED NOTE TO RULE 144A GLOBAL NOTE OR CERTIFICATED NOTE

State Street Bank and Trust Company, as Trustee

200 Clarendon Street

Mail Code: JHT06

Boston, MA 02116

Attention: Structured Trust & Analytics

Re: CM FINANCE SPV LTD. (the “Issuer”) Class A[-R] Notes due 2016 (the “Notes”)

Reference is hereby made to (a) the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity[ and (b) and the Revolving Credit Note Agreement, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Revolving Credit Note Agreement”), between the Issuer, each entity party thereto as a Class A-R Noteholder, State Street Bank and Trust Company, as revolving credit note agent, and the Trustee]. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture[ or, if not defined in the Indenture, in the Revolving Credit Note Agreement].

This letter relates to U.S. $         aggregate principal amount of Notes which are held in the form of a [[Regulation S][Rule 144A] Global Note][Certificated Note] representing Class A[-R] Notes in the name of                     (the “Transferor”) to effect the transfer of the Notes in exchange for an equivalent beneficial interest in a [Rule 144A Global Note][Certificated Note] representing Class A[-R] Notes.

In connection with such transfer, and in respect of such Notes, the Transferor does hereby certify that such Notes are being transferred to [                    ] (the “Transferee”) (i) in accordance with the transfer restrictions set forth in the Indenture[,the Revolving Credit Note Agreement] and the legends attached to such Notes and (ii) in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”) (if such transfer is made pursuant to Rule 144A under the Securities Act), and it reasonably believes that the Transferee is purchasing the Notes for its own account or an account with respect to which the Transferee exercises sole investment discretion, the Transferee and any such account is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act and also a “qualified purchaser” (within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), a “Qualified Purchaser”) or an entity beneficially exclusively by Qualified Purchasers and is purchasing such Notes in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction. The Transferor further certifies that it has notified the Transferee that it may be relying on the exemption from registration under the Securities Act provided by Rule 144A thereunder. The Transferor further certifies (a) that none of itself or any of its affiliates (as such term is defined in

B3-1

Rule 501(b) of Regulation D under the Securities Act) or any other Person acting on any of their behalf, has engaged, in connection with such Notes, in general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act; and (b) that it has not solicited offers for such Notes, and has not arranged commitments to purchase such Notes, except in accordance with the Indenture and any applicable U.S. federal and state securities laws and the securities laws of any other jurisdiction in which such Notes have been offered.

The Transferor understands that the Issuer, the Sole Shareholder, the Collateral Manager, the Valuation Agent, the Trustee, the Collateral Administrator, the Administrator[, Revolving Credit Note Agent] and their counsel will rely upon the accuracy and truth of the foregoing representations, and the Transferor hereby consents to such reliance.

(Name of Transferor)
By:
	Name:
	Title:

Dated:             ,         

cc:	CM Finance LLC
	399 Park Avenue, 39th Floor
	New York, NY 10022
	Re: CM FINANCE SPV LTD.
	Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer

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EXHIBIT B4

FORM OF TRANSFEREE CERTIFICATE OF RULE 144A GLOBAL NOTE

State Street Bank and Trust Company, as Trustee

200 Clarendon Street,

Mail Code: JHT06,

Boston, MA 02116

Attn: Structured Trust & Analytics

Re: CM FINANCE SPV LTD. (the “Issuer”) Class A Notes due 2016

Reference is hereby made to the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.

This letter relates to [                    ] Aggregate Outstanding Amount of the Class A Notes (the “Notes”) which are to be transferred to the undersigned transferee (the “Transferee”) in the form of a Rule 144A Global Note representing Class A Notes pursuant to Section 2.5(e) of the Indenture.

In connection with such request, and in respect of such Notes, the Transferee does hereby certify that the Notes are being transferred (i) in accordance with the transfer restrictions set forth in the Indenture and (ii) pursuant to an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”) and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction.

In addition, the Transferee hereby represents, warrants and covenants for the benefit of the Issuer and its counsel that it is:

(a) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act (a “Qualified Institutional Buyer”) who is also a “qualified purchaser” (within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”) and the rules thereunder, a “Qualified Purchaser”) or an entity beneficially owned exclusively by Qualified Purchasers, and are acquiring the Notes in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder; and

(b) acquiring the Notes for its own account (and not for the account of any other Person) in a minimum denomination of U.S.$500,000 and in integral multiples of U.S.$1,000 in excess thereof.

The Transferee further represents, warrants and agrees as follows:

1. In connection with the purchase of the Notes: (A) none of the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral

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Administrator, the Administrator or any of their respective Affiliates is acting as a fiduciary or financial or investment adviser for the Transferee; (B) the Transferee is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator or any of their respective Affiliates; (C) the Transferee has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary and has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to the Indenture) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator or any of their respective Affiliates; (D) the Transferee is both (x) a Qualified Institutional Buyer that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A or a trust fund referred to in paragraph (a)(1)(i)(f) of Rule 144A that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan and (y) a Qualified Purchaser for purposes of Section 3(c)(7) of the Investment Company Act or an entity beneficially owned exclusively by Qualified Purchasers; (E) the Transferee is acquiring its interest in such Notes for its own account for investment and not with a view to the resale, distribution or other disposition thereof in violation of the Securities Act; (F) the Transferee was not formed for the purpose of investing in such Notes; (G) the Transferee has received the necessary consent from its beneficial owners if the holder is a private investment company formed before April 30, 1996, (H) the Transferee understands that the Issuer may receive a list of participants holding interests in the Notes from one or more book-entry depositories; (I) the Transferee will hold and transfer at least the minimum denomination of such Notes; (J) the Transferee is a sophisticated investor and is purchasing the 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; (K) the Transferee will provide notice of the relevant transfer restrictions to subsequent transferees, including that the Transferee may be relying on the exemption from registration under the Securities Act provided by Rule 144A thereunder; (L) none of the Transferee or any of its affiliates (as such term is defined in Rule 501(b) of Regulation D under the Securities Act) or any other Person acting on any of their behalf has engaged or will engage, in connection with such Notes, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act; (M) the Transferee has not solicited and will not solicit offers for such Notes and has not arranged and will not arrange commitments to purchase such Notes, except in accordance with the Indenture and any applicable U.S. federal and state securities laws and the securities laws of any other jurisdiction in which such Notes have been offered; and (N) the Transferee is not acquiring any Note as part of a plan to reduce, avoid or evade U.S. Federal income tax.

2. The Transferee understands that the Notes are being offered only in a transaction not involving any public offering in the United States of America 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 the Transferee decides to offer, resell, pledge or otherwise transfer the 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, including any requirement for written certifications. In particular, the Transferee understands that the Notes may be transferred only to a person that is either (a) both (1)(x) a “qualified purchaser” (as defined in the Investment Company Act, and the rules thereunder) or (y) an entity owned (or in the case of Qualified

B4-2

Purchasers, beneficially owned) exclusively by one or more “qualified purchasers” and (2) a “qualified institutional buyer” that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A or a trust fund referred to in paragraph (a)(1)(i)(f) of Rule 144A that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan, who is purchasing the notes in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder or (b) a person that is not a “U.S. person” as defined in Regulation S under the Securities Act, and is acquiring the Notes in an offshore transaction (as defined in Regulation S thereunder) in reliance on the exemption from registration provided by Regulation S. The Transferee 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. The Transferee understands that the Issuer has not been registered under the Investment Company Act, and that the Issuer is exempt from registration as such by virtue of Section 3(c)(7) of the Investment Company Act. The Transferee understands and acknowledges that the Issuer has the right, under the Indenture, to compel any beneficial owner of an interest in the Notes that fails to comply with the foregoing requirements to sell its interest in such Notes, or may sell such interest on behalf of such owner.

3. The Transferee 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 Section 2.5 (Registration, Registration of Transfer and Exchange) of the Indenture, including the Exhibits referenced therein, Sections 2.11 and 2.12 of the Indenture, and the legends on the Notes.

4. The Transferee represents, warrants and agrees that (a) it is not, and is not acting on behalf of, a Benefit Plan Investor, as defined in Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and (b) if the Transferee is a governmental, church, non-U.S. or other plan which is subject to any state, local, other federal or non-U.S. law or regulation that is substantially similar to the prohibited transaction provisions of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (any such law or regulation an “Other Plan Law”), it is not, and for so long as it holds such Notes or interest therein it will not be, subject to any Similar Law, and the Transferee’s acquisition, holding and disposition of such Notes will not constitute or result in a non-exempt violation of any such Other Plan Law.

5. The Transferee agrees not to seek to commence, 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 U.S. Federal or State bankruptcy or similar laws prior to the date which is one year and one day (or if longer, any applicable preference period) after the payment in full of all Notes and any other debt obligations of the Issuer that have been rated upon issuance by any rating agency at the request of the Issuer.

6. The Transferee will treat its Notes as debt of the Issuer for United States federal and, to the extent permitted by law, state and local income and franchise tax purposes unless otherwise required by any relevant taxing authority.

7. The Transferee is                      (check if applicable) a “United States person” within the meaning of Section 7701(a)(30) of the Code, and a properly completed and signed Internal Revenue Service Form W-9 (or applicable successor form) is attached hereto; or                     

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(check if applicable) not a “United States person” within the meaning of Section 7701(a)(30) of the Code, and a properly completed and signed applicable Internal Revenue Service Form W-8 (or applicable successor form) is attached hereto. The Transferee understands and acknowledges that failure to provide the Issuer or the Trustee with the applicable tax certifications or the failure to meet its Noteholder Reporting Obligations may result in withholding or back-up withholding from payments to the Transferee in respect of the Notes.

8. If the Transferee is not a “United States person” (as defined in Section 7701(a)(30) of the Code), the Transferee hereby represents that (i) either (A) it is not a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business (within the meaning of Section 881(c)(3)(A) of the Code), or (B) it is a person that is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S. source interest not attributable to a permanent establishment in the United States, and (ii) it is not purchasing the Notes in order to reduce its U.S. federal income tax liability pursuant to a tax avoidance plan.

9. The Transferee hereby agrees to provide the Issuer and Trustee (i) any information as is necessary (in the sole determination of the Issuer or the Trustee, as applicable) for the Issuer and the Trustee to determine whether it (or any Person through which it holds the Notes) is a specified United States person as defined in Section 1473(3) of the Code (a “specified United States person”), a United States owned foreign entity as described in Section 1471(d)(3) of the Code (a “United States owned foreign entity”) or a foreign financial institution as defined in Section 1471(d)(4) of the Code and (ii) any additional information that the Issuer or its agent requests in connection with Sections 1471-1474 of the Code. If the Transferee is a specified United States person or a United States owned foreign entity, it also hereby agrees to (x) provide the Issuer and Trustee its name, address, U.S. taxpayer identification number and, if it is a United States owned foreign entity, the name, address and taxpayer identification number of each of its “substantial United States owners” (as defined in Section 1473(2) of the Code) and any other information requested by the Issuer or its agent upon request and (y) update any such information provided in clause (x) promptly upon learning that any such information previously provided has become obsolete or incorrect or is otherwise required. The Transferee understands and acknowledges that the Issuer may provide such information and any other information concerning its investment in the Notes to the U.S. Internal Revenue Service. The Transferee understands and acknowledges that the Issuer has the right, under the Indenture, to compel any beneficial owner of an interest in the Notes that fails to comply with the foregoing requirements to sell its interest in such Notes, or may sell such interest on behalf of such owner.

10. The Transferee hereby represents and warrants that it is not an Affected Bank and it agrees and acknowledges that no transfer of a Note to an Affected Bank will be effective and none of the Issuer, the Trustee or the Note Registrar will recognize any such transfer, unless such transfer is specifically authorized by the Issuer in writing. An “Affected Bank” is a “bank” for purposes of Section 881 of the Code or an entity affiliated with such a bank that is neither (x) a United States person (within the meaning of Section 7701(a)(30) of the Code) nor (y) entitled to the benefits of an income tax treaty with the United States under which withholding taxes on interest payments made by obligors resident in the United States to such bank are reduced to 0%.

11. To the extent required by the Issuer, as determined by the Issuer or the Collateral Manager on behalf of the Issuer, the Issuer may, upon notice to the Trustee, impose additional transfer restrictions on the Notes to comply with the Uniting and Strengthening

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America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and other similar laws or regulations, including, without limitation, requiring each transferee of a Note to make representations to the Issuer in connection with such compliance.

12. The Transferee understands that the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator and their respective counsel will rely upon the accuracy and truth of the foregoing representations, and the Transferee hereby consents to such reliance.

13. The Transferee is aware that, except as otherwise provided in the Indenture, the Notes being sold to it, if any, in reliance on 144A will be represented by a Rule 144A Global Note, and that beneficial interests therein may be held only through DTC.

14. The Transferee is not a member of the public in the Cayman Islands

Name of Purchaser:

Dated:

By:

Name:

Title:

Aggregate Outstanding Amount of Notes: U.S.$        

cc: CM Finance LLC

399 Park Avenue, 39^th Floor

New York, NY 10022

Re: CM FINANCE SPV LTD.

Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer

B4-5

Annex

Tax Form

B4-6

EXHIBIT B5

FORM OF TRANSFEREE CERTIFICATE OF REGULATION S GLOBAL NOTE

State Street Bank and Trust Company, as Trustee

200 Clarendon Street,

Mail Code: JHT06,

Boston, MA 02116

Attn: Structured Trust & Analytics

Re: CM FINANCE SPV LTD. (the “Issuer”) Class A Notes due 2016

Reference is hereby made to the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity. Capitalized terms not defined in this Certificate shall have the meanings ascribed to them in the Indenture.

This letter relates to [                    ] Aggregate Outstanding Amount of the Class A Notes (the “Notes”), which are to be transferred to the undersigned transferee (the “Transferee”) in the form of a Regulation S Global Note of such Class pursuant to Section 2.5(e) of the Indenture.

In connection with such request, and in respect of such Notes, the Transferee does hereby certify that the Notes are being transferred (i) in accordance with the transfer restrictions set forth in the Indenture and (ii) pursuant to an exemption from registration under the United States Securities Act of 1933, as amended (the “Securities Act”) and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction.

In addition, the Transferee hereby represents, warrants and covenants for the benefit of the Issuer and its counsel that it is a person that is not a “U.S. person” as defined in Regulation S under the Securities Act (a “U.S. Person”), and is acquiring the Notes in an offshore transaction (as defined in Regulation S) in reliance on, and in accordance with, the exemption from Securities Act registration provided by Regulation S.

The Transferee further represents, warrants and agrees as follows:

1. In connection with the purchase of the Notes: (A) none of the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator or any of their respective Affiliates is acting as a fiduciary or financial or investment adviser for the Transferee; (B) the Transferee is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator or any of their respective Affiliates; (C) the Transferee has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary and has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to the Indenture) based upon its own judgment and upon any advice from such advisors

B5-1

as it has deemed necessary and not upon any view expressed by the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator or any of their respective Affiliates; (D) the Transferee is not a U.S. Person and is acquiring such Notes in an offshore transaction (as defined in Regulation S) in reliance on the exemption from registration provided by Regulation S; (E) the Transferee is acquiring its interest in such Notes for its own account for investment and not with a view to the resale, distribution or other disposition thereof in violation of the Securities Act; (F) the Transferee was not formed for the purpose of investing in such Notes; (G) the Transferee understands that the Issuer may receive a list of participants holding interests in the Notes from one or more book-entry depositories; (H) the Transferee will hold and transfer at least the minimum denomination of such Notes; (I) the Transferee is a sophisticated investor and is purchasing the 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; (J) the Transferee will provide notice of the relevant transfer restrictions to subsequent transferees, including that such beneficial owner may be relying on the exemption from registration under the Securities Act provided by Rule 144A thereunder; (K) none of the Transferee or any of its affiliates (as such term is defined in Rule 501(b) of Regulation D under the Securities Act) or any other Person acting on any of their behalf has engaged or will engage, in connection with such Notes, in any form of (i) general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (ii) directed selling efforts within the meaning of Rule 902(c) of Regulation S thereunder; (L) the Transferee has not solicited and will not solicit offers for such Notes, and has not arranged and will not arrange commitments to purchase such Notes, except in accordance with the Indenture and any applicable U.S. federal and state securities laws and the securities laws of any other jurisdiction in which such Notes have been offered; and (M) the Transferee is not acquiring any Note as part of a plan to reduce, avoid or evade U.S. Federal Income Tax.

2. The Transferee understands that the Notes are being offered only in a transaction not involving any public offering in the United States of America 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 the Transferee decides to offer, resell, pledge or otherwise transfer the 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, including any requirement for written certifications. In particular, the Transferee understands that the Notes may be transferred only to a person that is either (A) both (1)(x) a “qualified purchaser” (as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules thereunder) or (y) an entity owned (or in the case of Qualified Purchasers, beneficially owned) exclusively by one or more “qualified purchasers” and (2) a “qualified institutional buyer” that is not a broker-dealer which owns and invests on a discretionary basis less than U.S. $25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(d) or (a)(1)(i)(e) of Rule 144A under the Securities Act or a trust fund referred to in paragraph (a)(1)(i)(f) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan, who is purchasing the Notes in reliance on the exemption from Securities Act registration provided by Rule 144A thereunder or (B) a person that is not a U.S. Person, and is acquiring the Notes in an Offshore Transaction (as defined in Regulation S thereunder) in reliance on the exemption from registration provided by Regulation S. The Transferee 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. The Transferee understands that the Issuer has not been registered under the Investment Company Act, and that the Issuer is exempt from registration as such by

B5-2

virtue of Section 3(c)(7) of the Investment Company Act. The Transferee understands and acknowledges that the Issuer has the right, under the Indenture, to compel any beneficial owner of an interest in the Notes that fails to comply with the foregoing requirements to sell its interest in such Notes, or may sell such interest on behalf of such owner.

3. The Transferee is aware that, except as otherwise provided in the Indenture, the Notes being sold to it, if any, in reliance on Regulation S will be represented by a Regulation S Global Note, and that beneficial interests therein may be held only through DTC for the respective accounts of Euroclear or Clearstream.

4. The Transferee 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 Section 2.5 (Registration, Registration of Transfer and Exchange) of the Indenture, including the Exhibits referenced therein, Sections 2.11 and 2.12 of the Indenture, and the legends on the Notes.

5. The Transferee represents, warrants and agrees that (a) it is not, and is not acting on behalf of, a Benefit Plan Investor, as defined in Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and (b) if the Transferee is a governmental, church, non-U.S. or other plan which is subject to any state, local, other federal or non-U.S. law or regulation that is substantially similar to the prohibited transaction provisions of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (any such law or regulation an “Other Plan Law”), it is not, and for so long as it holds such Notes or interest therein it will not be, subject to any Similar Law, and the Transferee’s acquisition, holding and disposition of such Notes will not constitute or result in a non-exempt violation of any such Other Plan Law.

6. The Transferee agrees not to seek to commence, institute against, or join any other Person in instituting against, the Issuer or the Investment Subsidiary any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceedings, or other Proceedings under U.S. Federal or State bankruptcy or similar laws prior to the date which is one year and one day (or if longer, any applicable preference period) after the payment in full of all Notes and any other debt obligations of the Issuer that have been rated upon issuance by any rating agency at the request of the Issuer.

7. The Transferee will treat its Notes as debt of the Issuer for United States federal and, to the extent permitted by law, state and local income and franchise tax purposes unless otherwise required by any relevant taxing authority.

8. The Transferee is                      (check if applicable) a “United States person” within the meaning of Section 7701(a)(30) of the Code, and a properly completed and signed Internal Revenue Service Form W-9 (or applicable successor form) is attached hereto; or                      (check if applicable) not a “United States person” within the meaning of Section 7701(a)(30) of the Code, and a properly completed and signed applicable Internal Revenue Service Form W-8 (or applicable successor form) is attached hereto. The Transferee understands and acknowledges that failure to provide the Issuer or the Trustee with the applicable tax certifications or the failure to meet its Noteholder Reporting Obligations may result in withholding or back-up withholding from payments to The Transferee in respect of the Notes.

B5-3

9. If the Transferee is not a “United States person” (as defined in Section 7701(a)(30) of the Code), the Transferee hereby represents that (i) either (A) it is not a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business (within the meaning of Section 881(c)(3)(A) of the Code), or (B) it is a person that is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S. source interest not attributable to a permanent establishment in the United States, and (ii) it is not purchasing the Notes in order to reduce its U.S. federal income tax liability pursuant to a tax avoidance plan.

10. The Transferee hereby agrees to provide the Issuer and Trustee (i) any information as is necessary (in the sole determination of the Issuer or the Trustee, as applicable) for the Issuer and the Trustee to determine whether it (or any Person through which it holds the Notes) is a specified United States person as defined in Section 1473(3) of the Code (a “specified United States person”), a United States owned foreign entity as described in Section 1471(d)(3) of the Code (a “United States owned foreign entity”) or a foreign financial institution as defined in Section 1471(d)(4) of the Code and (ii) any additional information that the Issuer or its agent requests in connection with Sections 1471-1474 of the Code. If the Transferee is a specified United States person or a United States owned foreign entity, it also hereby agrees to (x) provide the Issuer and Trustee its name, address, U.S. taxpayer identification number and, if it is a United States owned foreign entity, the name, address and taxpayer identification number of each of its “substantial United States owners” (as defined in Section 1473(2) of the Code) and any other information requested by the Issuer or its agent upon request and (y) update any such information provided in clause (x) promptly upon learning that any such information previously provided has become obsolete or incorrect or is otherwise required. The Transferee understands and acknowledges that the Issuer may provide such information and any other information concerning its investment in the Notes to the U.S. Internal Revenue Service. The Transferee understands and acknowledges that the Issuer has the right, under the Indenture, to compel any beneficial owner of an interest in the Notes that fails to comply with the foregoing requirements to sell its interest in such Notes, or may sell such interest on behalf of such owner.

11. The Transferee hereby represents and warrants that it is not an Affected Bank and it agrees and acknowledges that no transfer of a Note to an Affected Bank will be effective and none of the Issuer, the Trustee or the Note Registrar will recognize any such transfer, unless such transfer is specifically authorized by the Issuer in writing. An “Affected Bank” is a “bank” for purposes of Section 881 of the Code or an entity affiliated with such a bank that is neither (x) a United States person (within the meaning of Section 7701(a)(30) of the Code) nor (y) entitled to the benefits of an income tax treaty with the United States under which withholding taxes on interest payments made by obligors resident in the United States to such bank are reduced to 0%.

12. To the extent required by the Issuer, as determined by the Issuer or the Collateral Manager on behalf of the Issuer, the Issuer may, upon notice to the Trustee, impose additional transfer restrictions on the Notes to comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and other similar laws or regulations, including, without limitation, requiring each transferee of a Note to make representations to the Issuer in connection with such compliance.

13. The Transferee understands that the Issuer, the Sole Shareholder, the Valuation Agent, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator and their respective counsel will rely upon the accuracy and truth of the foregoing representations, and the Transferee hereby consents to such reliance.

B5-4

Name of Purchaser:

Dated:

By:

Name:

Title:

Aggregate Outstanding Amount of Notes: U.S.$        

cc: CM Finance LLC

399 Park Avenue, 39^th Floor

New York, NY 10022

Re: CM FINANCE SPV LTD.

Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer

B5-5

Annex

Tax Form

B5-6

EXHIBIT C

FORM OF OPINION OF NIXON PEABODY LLP

[to be attached]

B5-1

EXHIBIT D

FORM OF OPINION OF BINGHAM MCCUTCHEN LLP

[to be attached]

D-1

EXHIBIT E

FORM OF OPINION OF APPLEBY (CAYMAN) LTD.

[to be attached]

E-1

EXHIBIT F

FORM OF BENEFICIAL OWNER CERTIFICATE

State Street Bank and Trust Company, as Trustee

200 Clarendon Street,

Mail Code: JHT06

Boston, MA 02116

Attention: Structured Trust & Analytics

Reference: CM FINANCE SPV LTD.

CM FINANCE SPV LTD.

c/o CM Finance LLC

399 Park Avenue, 39^th Floor

New York, NY 10022

Attention: Stephon Barnes, Christopher E. Jansen and Michael C. Mauer

Ladies and Gentlemen:

Reference is hereby made to (a) the Amended and Restated Indenture, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”) and, solely as expressly specified in the Indenture, in its individual capacity; and (b) the Revolving Credit Note Agreement, dated as of December 4, 2013 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Revolving Credit Note Agreement”), between the Issuer, each entity party thereto as a Class A-R Noteholder, State Street Bank and Trust Company, as revolving credit note agent, and the Trustee. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Indenture or, if not defined in the Indenture, in the Revolving Credit Note Agreement.

The undersigned hereby certifies that it is the beneficial owner of U.S.$[        ] in principal amount of the Class A[-R] Notes of [CM FINANCE SPV LTD., held with State Street Bank and Trust Company]¹⁴ [registered in the name of [INSERT NAME]]¹⁵, and hereby requests the Trustee to grant it access, via its password protected website, to the following:

             Payment Date Report specified in Section 10.5(a) of the Indenture

             Daily Report specified in Section 10.5(c) of the Indenture

¹⁴  Insert if Note is a Global Note.

¹⁵  Insert if Note is a Certificated Note.

F-1

In addition, the undersigned hereby requests the Trustee to provide it at the address below the following:

             Notices of Default pursuant to Section 6.2 of the Indenture

Name:

Address:

[             [Other]]

Submission of this certificate bearing the beneficial owner’s electronic signature shall constitute effective delivery hereof. This certificate shall be construed in accordance with, and this certificate and all matters arising out of or relating in any way whatsoever (whether in contract, tort or otherwise) to this certificate shall be governed by, the law of the State of New York.

F-2

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly executed this      day of                 .

[NAME OF CERTIFYING HOLDER]
By:
	Authorized Signature
	Name:
	Title:

F-3

EX-99.K.12

Exhibit (k)(12)

Dated as of December 4, 2013

CM FINANCE SPV LTD.,

as Issuer

THE ENTITIES FROM TIME TO TIME PARTY HERETO,

as the Class A-R Noteholders

STATE STREET BANK AND TRUST COMPANY,

as Revolving Credit Note Agent

and

STATE STREET BANK AND TRUST COMPANY,

as Trustee

REVOLVING CREDIT NOTE AGREEMENT

CONTENTS

SECTION		PAGE
1.	Definitions and Interpretation		1
1.1.	Definitions		1
1.2.	Interpretation		3
2.	The Class A-R Notes		4
2.1.	Borrowings		4
2.2.	Advances; Repayments; Class A-R Commitment Amounts		6
2.3.	Outstanding Class A-R Funded Amount		6
2.4.	Agency Compensation		6
2.5.	Class A-R Prepayment Account; Withdrawals		7
2.6.	Class A-R Note Interest		9
3.	Conditions Precedent to Borrowings		9
3.1.	Conditions to Funding		9
3.2.	Representations regarding Conditions		10
4.	Assignments		10
4.1.	Assignment		10
4.2.	Rights of Assignee under this Agreement		11
4.3.	Notice of Assignment		12
4.4.	Class A-R Note Register; Information		12
5.	Representations and Warranties		12
5.1.	Representations and Warranties of the Issuer		12
5.2.	Representations and Warranties of each Class A-R Noteholder		13
6.	The Revolving Credit Note Agent		14
7.	Miscellaneous		18
7.1.	Waivers; Amendments; Etc.		18
7.2.	Notices, Etc.		19
7.3.	Captions		19
7.4.	Governing Law; Jurisdiction; Venue		19
7.5.	Consent to Service of Process		20

7.6.	Waiver of Jury Trial	20
7.7.	Execution in Counterparts	20
7.8.	Tax Treatment of Notes	20
7.9.	Transfer Taxes	20
7.10.	Severability	20
7.11.	Further Assurances	21
7.12.	Limited Recourse, Non-Petition as to the Issuer	21

Exhibit A - Form of Notice of Borrowing

Exhibit B - Form of Assignment and Acceptance

REVOLVING CREDIT NOTE AGREEMENT, dated as of December 4, 2013 (this “Agreement”), between:

CM FINANCE SPV LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Issuer”);

each of UBS AG, LONDON BRANCH and CM FINANCE LLC, as an initial Class A-R Noteholder on the Amendment and Restatement Date, as evidenced by its execution of this Agreement on the Amendment and Restatement Date (each, an “Initial Holder” and a “Class A-R Noteholder”), and any entity that becomes a party hereto as a Class A-R Noteholder (each, a “Class A-R Noteholder”);

STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as agent for the Issuer (in such capacity, together with its successors in such capacity, the “Revolving Credit Note Agent”); and

STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as trustee under the Indenture (the Trustee).

WHEREAS, the Issuer and the Trustee are parties to the amended and restated Indenture, dated as of December 4, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which the Issuer proposes to issue up to U.S.$125,000,000 Class A-R Notes (the “Class A-R Notes”).

ACCORDINGLY, the parties hereto agree as follows:

1. DEFINITIONS AND INTERPRETATION

1.1. Definitions

Capitalized terms used but not defined herein (including any Exhibits hereto) have the meanings given to them in the Indenture. As used in this Agreement (including any Exhibits hereto), the following terms have the meanings specified below:

“Advance” means any advance made or to be made by (or on behalf of) a Class A-R Noteholder to the Issuer in respect of any Borrowing.

“Assignment and Acceptance” means an assignment and acceptance entered into by a Class A-R Noteholder and any assignee of such Class A-R Noteholder, and delivered to the Revolving Credit Note Agent on behalf of the Issuer, in substantially the form of Exhibit B, pursuant to which a Class A-R Noteholder assigns all, but not less than all, of its rights and obligations under this Agreement with respect to the portion of such Class A-R Noteholder’s Class A-R Notes being assigned in accordance with the terms of Section 4.1.

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“Borrowing” means any advance of funds to the Issuer contemplated by Section 2.1; provided that, the term “Borrowing” shall exclude any amounts that remain on deposit in any Class A-R Prepayment Account.

“Borrowing Date” means the date of any proposed Borrowing, as set forth in the applicable Notice of Borrowing.

“Borrowing Request” has the meaning set forth in Section 2.1(a).

“Class A-R Commitment Amount” means, on any date and as to any Class A-R Noteholder, the product of (a) the Commitment Percentage of such Class A-R Noteholder as of such day and (b) an amount which is the Remaining Unfunded Facility Commitment (expressed as a Dollar amount) on such date.

“Class A-R Noteholder” means, with respect to any Class A-R Note, the Person in whose name such Class A-R Note is registered in the Class A-R Note Register.

“Class A-R Prepayment Account” has the meaning set forth in Section 2.5(a).

“Commitment Percentage” means, for any Class A-R Noteholder as of any date of determination, a percentage equal to (a)(i) the pro rata portion of the Remaining Unfunded Facility Commitment represented by the Class A-R Notes of such Class A-R Noteholder divided by (ii) the Remaining Unfunded Facility Commitment multiplied by (b) 100%; provided that, the Commitment Percentage for the Initial Holders as of the Amendment and Restatement Date shall be as set out below:

Initial Holder	Commitment Percentage
UBS AG, London Branch		40	%
CM Finance LLC		60	%

“Commitment Termination Date” means the earliest to occur of (a) the Stated Maturity of the Class A-R Notes; and (b) the occurrence of an Enforcement Event.

“Maximum RCN Facility Funding Commitment” means, in the aggregate, U.S.$125,000,000.

“Notice of Borrowing” has the meaning set forth in Section 2.1(b).

“Notice of Repayment” has the meaning set forth in Section 2.5(e).

“Outstanding Class A-R Funded Amount” means the aggregate outstanding principal amount of Borrowings funded by Class A-R Noteholders pursuant to Section 2.1 of this Agreement which have not been repaid. The Outstanding Class A-R Funded Amount shall be subject to adjustment as described in Sections 2.2 and 2.5 of this Agreement.

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“Prepayment Refund Date” means, with respect to any Class A-R Noteholder that has deposited all (or a portion of) its Class A-R Commitment Amount into such Class A-R Noteholder’s Class A-R Prepayment Account in accordance with Section 2.5(a), the Business Day after the Commitment Termination Date has occurred (or such earlier date designated by the relevant Class A-R Noteholder by notice to the Trustee, the Issuer and the Revolving Credit Note Agent).

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“Remaining Unfunded Facility Commitment” means, with respect to any date of determination, the excess (if any) of: (a) the Maximum RCN Facility Funding Commitment over (b) the Outstanding Class A-R Funded Amount. For the avoidance of doubt, the Remaining Unfunded Facility Commitment shall not be reduced by the amount of any funds deposited in any Class A-R Prepayment Account by the relevant Class A-R Noteholder.

“Revolving Credit Note Agent Expenses” has the meaning set forth in Section 2.4(b).

“Substitution Notice” has the meaning set forth in Section 2.5(f).

1.2. Interpretation

Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Agreement, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms. Except as otherwise specified herein or as the context may otherwise require: (i) references to an agreement or other document are to it as amended, supplemented, restated and otherwise modified from time to time and to any successor document (whether or not already so stated); (ii) references to a statute, regulation or other government rule are to it as amended from time to time and, as applicable, are to corresponding provisions of successor governmental rules (whether or not already so stated); (iii) the word “including” and correlative words shall be deemed to be followed by the phrase “without limitation” unless actually followed by such phrase or a phrase of like import; (iv) the word “or” is always used inclusively herein (for example, the phrase “A or B” means “A or B or both,” not “either A or B but not both”), unless used in an “either … or” construction; (v) references to a Person are references to such Person’s successors and assigns (whether or not already so stated); (vi) all references in this Agreement to designated “Articles”, “Sections”, “sub-Sections”, other subdivisions, Schedules and Exhibits are to the designated articles, sections, sub-sections, other subdivisions, schedules and exhibits of this Agreement; and

Page 3

(vii) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular article, section, sub-section or other subdivision.

2. THE CLASS A-R NOTES

2.1. Borrowings

(a) Subject to the terms and conditions hereof, on any Business Day prior to the Commitment Termination Date, the Issuer (or the Collateral Manager on behalf of the Issuer) may request Borrowings (each a “Borrowing Request”) hereunder.

(b) From time to time as required pursuant to and in accordance with the terms of the Indenture, the Issuer (or the Collateral Manager on behalf of the Issuer) may deliver to the Revolving Credit Note Agent and the Class A-R Noteholders a notice (with a copy to the Trustee and the Collateral Manager, if not the notifying party), substantially in the form of Exhibit A hereto (each, a “Notice of Borrowing”), of a proposed Borrowing no later than 5:00 p.m. (New York City time) on the third Business Day prior to the proposed Borrowing Date. Each of the Issuer and, if applicable, the Collateral Manager agrees that any Notice of Borrowing delivered pursuant to this Section 2.1(b) shall be transmitted to the Revolving Credit Note Agent and the Class A-R Noteholders by facsimile or electronic mail (to the facsimile number or electronic mail address, as the case may be, specified on the Revolving Credit Note Agent’s and each Class A-R Noteholder’s respective signature pages to this Agreement), shall be substantially in the form of Exhibit A hereto, and shall specify the proposed Borrowing Date (which shall be a Business Day), the amount of such proposed Borrowing and relevant wire transfer instructions. In the event any Notice of Borrowing is not transmitted to the Revolving Credit Note Agent and the Class A-R Noteholders until after 5:00 p.m. (New York City time) on a Business Day, it will be treated as having been transmitted on the following Business Day for all purposes hereunder. The Revolving Credit Note Agent shall notify the Collateral Manager promptly (and in any event within one Business Day) of any change to the facsimile number or electronic mail address specified on each Class A-R Noteholder’s signature page to this Agreement to the extent that the Revolving Credit Note Agent has received notice of such change from a Class A-R Noteholder.

(c) So long as (x) the Commitment Termination Date has not occurred and (y) the conditions to funding set out in Section 3.1 have been satisfied, the Class A-R Noteholders shall make Advances to the Issuer on the Borrowing Date specified in the Notice of Borrowing (pro rata based on their respective Commitment Percentages) as follows:

(i) each Class A-R Noteholder obligated to make an Advance hereunder, no later than 12:00 p.m. (New York City time) on the Borrowing Date

Page 4

specified in the Notice of Borrowing, shall have made available to the Trustee, in immediately available funds, an amount equal to its Commitment Percentage of the Borrowing in respect of such Advance in accordance with the wire transfer instructions set forth in the Notice of Borrowing;

(ii) a Class A-R Noteholder that has elected to establish a Class A-R Prepayment Account pursuant to Section 2.5(a) shall be deemed to satisfy its obligation under clause (i) if, no later than 12:00 p.m. (New York City time) on the Borrowing Date specified in the Notice of Borrowing, such Class A-R Noteholder has cash standing to the credit of its Class A-R Prepayment Account in an amount no less than its Commitment Percentage of the Borrowing in respect of such Advance;

If, as of 12:00 p.m. (New York City time) on the Borrowing Date specified in the related Notice of Borrowing:

(A) each Class A-R Noteholder has satisfied its Advance payment obligation (either by payment to the Trustee in accordance with Section 2.1(c)(i) or deemed satisfaction pursuant to Section 2.1(c)(ii) above), (I) the Trustee shall transfer all funds received pursuant to Section 2.1(c)(i) to the Principal Collection Subaccount and (II) in the case of any Class A-R Noteholder that has satsified such obligation pursuant to Section 2.1(c)(ii), the Trustee shall instruct the Custodian (without consent of such Class A-R Noteholder) to transfer cash in an amount equal to such Class A-R Noteholder’s Commitment Percentage of the Borrowing in respect of such Advance from such Class A-R Prepayment Account to the Principal Collection Subaccount; or

(B) any Class A-R Noteholder has failed to satisfy its Advance payment obligation (whether by payment to the Trustee in accordance with Section 2.1(c)(i) or deemed satisfaction pursuant to Section 2.1(c)(ii) above), (I) if the Trustee has received funds from a Class A-R Noteholder pursuant to Section 2.1(c)(i), the Trustee shall return such funds to such Class A-R Noteholder and (II) with respect to any funds standing to the credit of a Class A-R Prepayment Account, the Trustee shall instruct the Custodian to return such funds to the related Class A-R Noteholder.

For the avoidance of doubt, if with respect to any Advance, a Class A-R Noteholder has satisfied its Advance payment obligation pursuant to Section 2.1(c)(ii) but any other Class A-R Noteholder has failed to satisfy its own Advance payment obligation as of 12:00 p.m. (New York City time) on the Borrowing Date, the Trustee shall not be entitled to instruct the Custodian to transfer cash from such Class A-R Prepayment Account to the Issuer or any other Person (other than such Class A-R Noteholder as required by sub-clause (B) above) without the consent of such Class A-R Noteholder.

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(d) The Issuer hereby agrees that each Class A-R Noteholder, acting in good faith, (i) is entitled to rely upon any Notice of Borrowing furnished to such Class A-R Noteholder hereunder by the Collateral Manager purporting to act on behalf of the Issuer, is genuine and authorized and (ii) shall not be liable to the Issuer with respect to any action taken or omitted to be taken by such Class A-R Noteholder in good faith in accordance with any such Notice of Borrowing.

2.2. Advances; Repayments; Class A-R Commitment Amounts

(a) All Advances to the Issuer hereunder may be repaid by the Issuer pursuant to Section 2.5(e), notwithstanding the Priority of Payments, and any such Advances repaid by the Issuer may, subject to the conditions set forth herein, be reborrowed from time to time by the Issuer hereunder.

(b) Repayments of Advances to any Class A-R Noteholders under Section 2.2(a) and Section 2.5(e) of this Agreement or Section 11.1(a)(ii) of the Indenture shall be applied to pay the Class A-R Noteholders, pro rata, based on the respective portions of the Outstanding Class A-R Funded Amount represented by their Class A-R Notes, and such payment shall reduce the Outstanding Class A-R Funded Amount.

(c) Any deposit by a Class A-R Noteholder of any amount into such Class A-R Noteholder’s Class A-R Prepayment Account pursuant to the terms hereof will not reduce such Class A-R Noteholder’s Class A-R Commitment Amount.

2.3. Outstanding Class A-R Funded Amount

The parties hereto hereby acknowledge and agree that all Borrowings shall be deemed to be part of the Outstanding Class A-R Funded Amount, regardless of whether the conditions to the related Borrowing set forth herein or in the Indenture were in fact satisfied, until such amounts are repaid in accordance with the terms of this Agreement, the Indenture and such Class A-R Notes. Each of the Class A-R Noteholders acknowledges that the obligations of the Issuer to pay any Outstanding Class A-R Funded Amount under the Class A-R Notes, and the terms of repayment thereof, are governed by this Agreement and the Indenture.

2.4. Agency Compensation

(a) The Issuer agrees to reimburse the Revolving Credit Note Agent (subject to any written agreement between the Issuer and the Revolving Credit Note Agent) forthwith upon its request for all reasonable expenses incurred or made by the Revolving Credit Note Agent in accordance with any provision of this Agreement or the Indenture.

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(b) The Issuer will reimburse, and does hereby indemnify and hold harmless, the Revolving Credit Note Agent and its affiliates, directors, officers, shareholders, agents and employees with respect to all expenses, losses, damages, liabilities, demands, charges and claims of any nature (including the reasonable fees and expenses of counsel and other experts) in respect of or arising from its appointment as Revolving Credit Note Agent or from any acts or omissions performed or omitted by the Revolving Credit Note Agent, its affiliates, directors, officers, shareholders, agents or employees hereunder in good faith except to the extent resulting from gross negligence, willful misconduct or fraud on the part of the Revolving Credit Note Agent or any Affiliate thereof (any such amounts, together with expenses reimbursable under Section 2.4(b), “Revolving Credit Note Agent Expenses”). The indemnification obligations of the Issuer shall survive termination of this Agreement and the resignation or removal of the Revolving Credit Note Agent.

(c) The Revolving Credit Note Agent Expenses shall be considered Administrative Expenses and shall be payable from the Expense Account in accordance with the Indenture.

(d) The Revolving Credit Note Agent hereby agrees not to cause the filing of a petition in bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings under any law or jurisdiction against the Issuer for the non-payment to the Revolving Credit Note Agent of any amounts provided by this Section 2.4 before 366 days have elapsed or, if longer, the applicable preference period then in effect (including, without limitation, any period established pursuant to the laws of the Cayman Islands) (plus one day) after the payment in full of all Notes issued under the Indenture.

2.5. Class A-R Prepayment Account; Withdrawals

(a) The Trustee shall cause to be established and maintained by the Custodian, as Securities Intermediary, a separate securities account (each such account, a “Class A-R Prepayment Account”) for each Class A-R Noteholder that elects to establish such an account, which securities account shall be established in the name of the Trustee as entitlement holder in trust for the benefit of the Issuer and such Class A-R Noteholder. The Trustee shall deposit any amounts received from a Class A-R Noteholder to pay an Advance payment obligation into such Class A-R Noteholder’s Class A-R Prepayment Account. UBS AG, London Branch, as an Initial Holder as of the date hereof, hereby elects to establish such a Class A-R Prepayment Account, and the Trustee shall cause to be established (on or prior to the Amendment and Restatement Date) and maintained by the Custodian, as Securities Intermediary, a Class A-R Prepayment Account in the name of the Trustee as entitlement holder in trust for the benefit of the Issuer and UBS AG, London Branch, as Initial Holder, in accordance with the terms of this Agreement and Section 10.3(e) of the Indenture.

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(b) Subject to the terms of this Agreement and the Indenture, the only permitted withdrawal from or application of funds or other property standing to the credit of any Class A-R Prepayment Account shall be for the purpose of (i) investing or reinvesting such funds or other property in Eligible Investments pursuant to Section 2.5(c); (ii) any withdrawal in connection with an Advance pursuant to Section 2.1(c); (iii) any withdrawal in connection with a Prepayment Refund Date pursuant to Section 2.5(d); or (iv) any withdrawal in connection with any other payment pursuant to Section 2.5(e).

(c) The Trustee shall, pursuant to the written directions of a Class A-R Noteholder, invest and reinvest funds standing to the credit of such Class A-R Noteholder’s Class A-R Prepayment Account in Eligible Investments. None of the Issuer, the Revolving Credit Note Agent, the Trustee or the Custodian shall in any way be held liable for reason of any insufficiency of any Class A-R Prepayment Account resulting from any loss relating to any investment of funds standing to the credit of such Class A-R Prepayment Account, except to the extent such loss results from the Issuer’s, the Revolving Credit Note Agent’s, the Trustee’s or the Custodian’s fraud, gross negligence or willful misconduct.

(d) The Trustee shall, at any time (including any time on or following any Prepayment Refund Date) with respect to a Class A-R Prepayment Account, upon and pursuant to the written directions of the related Class A-R Noteholder, withdraw all (or any portion) of the funds and other property (including any funds and other property in excess of such Class A-R Noteholder’s Class A-R Commitment Amount, whether as a result of increased market value or otherwise) standing to the credit of such Class A-R Noteholder’s Class A-R Prepayment Account, and direct the Custodian to pay or transfer the same to such Class A-R Noteholder (or to such account or accounts as such Class A-R Noteholder shall otherwise direct the Trustee in writing).

(e) So long as no Event of Default has occurred and is continuing, the Issuer (or the Collateral Manager on behalf of the Issuer) shall have the right at any time to repay any Advance by delivering to the Revolving Credit Note Agent and the relevant Class A-R Noteholders a notice (with a copy to the Trustee and the Collateral Manager, if not the notifying party) (each, a “Notice of Repayment”) of a proposed repayment no later than 5:00 p.m. (New York City time) on the third Business Day prior to the proposed repayment. Each of the Issuer and, if applicable, the Collateral Manager agrees that any Notice of Repayment delivered pursuant to this Section 2.5(e) shall be transmitted to the Revolving Credit Note Agent and the relevant Class A-R Noteholders by facsimile or electronic mail (to the facsimile number or electronic mail address, as the case may be, specified on the Revolving Credit Note Agent’s and such Class A-R Noteholders’ respective signature pages to this Agreement) and shall specify the proposed repayment date (which shall be a Business Day) and the amount of such proposed repayment. In the event any Notice of Repayment is not transmitted to the Revolving Credit Note

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Agent and the Class A-R Noteholders until after 5:00 p.m. (New York City time) on a Business Day, it will be treated as having been transmitted on the following Business Day for all purposes hereunder. The Trustee shall, on the proposed repayment date and in accordance with Section 2.2(b) of this Agreement and Section 11.1(a)(ii) of the Indenture, direct the Custodian to pay or transfer the amount of such proposed repayment from the Principal Collection Subaccount to each Class A-R Noteholder in accordance with the wire instructions provided by such Class A-R Noteholder in the Subscription Agreement pursuant to which it subscribed for the Class A-R Notes or such such account or accounts as such Class A-R Noteholder shall otherwise direct the Trustee in writing). Pursuant to Section 2.2(b), any repayment under this Section 2.5(e) shall reduce the Outstanding Class A-R Funded Amount.

(f) Upon three Business Days prior written notice (the “Substitution Notice”) by any Class A-R Noteholder to the Trustee and the Collateral Manager specifying which Eligible Investments standing to the credit of the Class A-R Prepayment Account of such Class A-R Noteholder are to be exchanged (and the principal amount and CUSIP (if applicable) of the new Eligible Investments to be delivered), a Class A-R Noteholder may on any Business Day, at its own expense, deposit into its Class A-R Prepayment Account substitute Eligible Investments and the Trustee shall, not later than the Business Day following the date on which the Trustee receives such substitute Eligible Investments, transfer to such Class A-R Noteholder the Eligible Investments specified in such written notice; provided that, the Trustee shall not transfer Eligible Investments to any Class A-R Noteholder as specified in such written notice if and to the extent that such transfer would cause the balance of such Class A-R Prepayment Account to decrease.

2.6. Class A-R Note Interest

Eligible Investment Income received on Eligible Investments standing to the credit of Class A-R Prepayment Accounts shall be payable to the applicable Holders of the Class A-R Notes as and to the extent provided in the Indenture.

3. CONDITIONS PRECEDENT TO BORROWINGS

3.1. Conditions to Funding.

The obligation of any Class A-R Noteholder to fund its Commitment Percentage of any Borrowing under Section 2.1 is subject to the following conditions:

(a) at the time of such Borrowing, the Commitment Termination Date shall not have occurred;

(b) UBS AG, London Branch shall have received all fees referred to in that certain fee letter between UBS AG, London Branch and CM Finance LLC, dated as of the Amendment and Restatement Date, which are payable on or prior to the time of such Borrowing;

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(c) the Indenture shall have been executed and delivered by each party thereto; and

(d) no Event of Default shall have occurred and be continuing.

3.2. Representations regarding Conditions.

Each Borrowing shall be deemed to constitute a representation and warranty by the Issuer on the date thereof that the conditions specified in sub-sections (a) through (d) of Section 3.1 are satisfied.

4. ASSIGNMENTS

4.1. Assignment

(a) Successors and Assigns; General Prohibition. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except as provided in Section 7.1(b) hereof, no Person other than the parties hereto, their respective successors and assigns and, to the extent expressly contemplated by the Indenture, the Secured Parties as beneficiaries of the Grant of the Issuer provided for in the Indenture shall have any rights under this Agreement. Neither this Agreement nor any right or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) or delegated by any party hereto. Any purported transfer that is not in compliance with this provision will be void.

(b) Permitted Assignments of Class A-R Notes and Obligations under this Agreement. Subject to the requirements set forth in the Indenture with respect to transfers of Notes, a Class A-R Noteholder may assign all of its rights and obligations hereunder (in whole but not in part) in respect of a specified Aggregate Outstanding Amount of its Class A-R Notes to an assignee if (i) all conditions precedent to the transfer of the relevant Class A-R Notes specified in the Indenture and in the legend on the Class A-R Note have been satisfied; (ii) the transferee and transferor have complied with all the requirements set forth in the Indenture, including Section 2.5 of the Indenture and any eligibility requirements for any Noteholder of Class A-R Notes; (iii) the representations set forth on the transfer certificates or other documents required under the Indenture with respect to its acquisition of a Class A-R Note are true with respect to such assignee; and (iv) the parties to such assignment shall have executed and delivered to the Trustee a duly completed Assignment and Acceptance. Any such assignment by a Class A-R Noteholder shall be effected by the execution and delivery to the Revolving Credit Note Agent of (A) a duly completed Assignment and Acceptance executed by the transferee and any other items required under Section 2.5 of the Indenture and (B)

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the physical security representing the Class A-R Notes to be transferred by the Class A-R Noteholder. Upon satisfaction of the conditions to such assignment, (1) the Issuer shall execute (x) a new Class A-R Note in the name of the assignee; and (y) if the assigning Class A-R Noteholder is retaining a portion of the Aggregate Outstanding Amount of its Class A-R Notes following such transfer, a new Class A-R Note in the name of the assigning Class A-R Noteholder reflecting the portion so retained; and (2) the Trustee shall authenticate and deliver such Class A-R Note(s) to the relevant Class A-R Noteholder(s). From and after the Effective Date (as defined in the applicable Assignment and Acceptance), the Revolving Credit Note Agent shall reflect the assignment of the Class A-R Notes in the Class A-R Note Register and shall direct the Trustee to make all payments in respect of the assigned portion of the Class A-R Notes (including, without limitation, all payments of principal, interest and fees with respect thereto) to the new Class A-R Noteholder as reflected in the Class A-R Note Register. For avoidance of doubt, in transferring all or a portion of a Class A-R Note to a transferee in accordance with this Section 4.1, such Class A-R Noteholder is simultaneously transferring an equivalent share of its then-existing Class A-R Commitment Amount to such transferee.

(c) Trustee and Revolving Credit Note Agent Duties in Respect of Assignments. The Trustee and the Revolving Credit Note Agent shall have no obligation with respect to determining whether any transfer or assignment is permitted hereunder and whether the representations set forth in any transfer certificate or other document are true with respect to it; provided that, in the case of any such certificates or forms which by any provision of this Agreement are specifically required to be furnished to the Trustee or the Revolving Credit Note Agent, the Trustee and the Revolving Credit 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 (or the Indenture, as the case may be) and shall promptly notify the party delivering the same and the Collateral Manager if such certificate or form does not conform.

4.2. Rights of Assignee under this Agreement

Upon any assignment in accordance with Section 4.1(b), the assignee receiving such assignment shall be a party hereto and have all of the rights and obligations of a Class A-R Noteholder hereunder with respect to its Class A-R Notes and all of the rights and obligations hereunder. In addition, the related assigning Noteholder shall, to the extent of the interest assigned, be released from its obligations hereunder (and, in the case of an Assignment and Acceptance covering all of the assigning Noteholder’s rights and obligations under this Agreement and in respect of Class A-R Notes, such Noteholder shall cease to be a party hereto).

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4.3. Notice of Assignment

Each Class A-R Noteholder that is assigning any of its rights and obligations under this Agreement or any Class A-R Notes shall provide notice to the Revolving Credit Note Agent, the Issuer, the Trustee and the Collateral Manager of such assignment of any interest in any Class A-R Note or any of its rights or obligations under this Agreement.

4.4. Class A-R Note Register; Information

(a) The Class A-R Note Registrar shall record in the Class A-R Note Register: (i) the names and addresses of the Class A-R Noteholders, (ii) the Class A-R Commitment Amount of and Outstanding Class A-R Funded Amount owing to each Class A-R Noteholder from time to time and (iii) the amounts (if any) that each Class A-R Noteholder has deposited in a Class A-R Prepayment Account. The entries in the Class A-R Note Register shall be conclusive and binding for all purposes (including as to the entitlement to exercise voting and other consensual rights), absent manifest error, and the Issuer, the Trustee, the Revolving Credit Note Agent and the Class A-R Noteholders may treat each Person whose name is recorded in the Class A-R Note Register as a Class A-R Noteholder hereunder for all purposes of this Agreement.

(b) On each date that (i) a Borrowing is funded pursuant to the terms hereof, (ii) any Outstanding Class A-R Funded Amount or Class A-R Prepayment Account or any interest therein is assigned to any other Person or (iii) the Outstanding Class A-R Funded Amount is, or funds or other property on deposit in any Class A-R Prepayment Account are, reduced or increased, a duly authorized officer, employee or agent of the Class A-R Note Registrar shall make appropriate notations in the Class A-R Note Register of the amount of such Borrowing, assignment, reduction or increase, as applicable, and the allocation of the amount of such Borrowing, assignment, reduction or increase, as applicable, among the Holders of the Class A-R Notes, as applicable, and shall promptly report the same to the Trustee for notation in its records.

(c) The Class A-R Note Registrar will, promptly following a request from the Trustee, provide such information to the Trustee regarding the date and amount of each Borrowing and any other information pertinent to the performance by the Trustee of its duties under the Indenture as the Trustee may reasonably request.

5. REPRESENTATIONS AND WARRANTIES

5.1. Representations and Warranties of the Issuer

The Issuer hereby represents and warrants to each Class A-R Noteholder as follows:

(a) it has full power and authority, and has taken all corporate action necessary, to execute and deliver this Agreement and to fulfill its obligations under, and consummate the transactions contemplated by, this Agreement;

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(b) the execution, delivery and performance by it of this Agreement and all documents required to be executed and delivered by it hereunder do not and will not violate in any material respect any law or regulation of the jurisdiction of its organization or any other law or regulation applicable to it or any material agreement to which it is a party or is bound or subject;

(c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or 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)); and

(d) all approvals and authorizations of, all filings with, and all actions by, any governmental or other administrative or judicial authority necessary for the validity or enforceability of its obligations under this Agreement have been obtained.

5.2. Representations and Warranties of each Class A-R Noteholder

Each Class A-R Noteholder hereby represents and warrants to the Issuer as follows:

(a) it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to fulfill its obligations under, and consummate the transactions contemplated by, this Agreement;

(b) the execution, delivery and performance by it of this Agreement and all documents required to be executed and delivered by it hereunder do not and will not violate any law or regulation of the jurisdiction of its organization or any other law or regulation applicable to it;

(c) this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or 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));

(d) all approvals and authorizations of, all filings with and all actions by any governmental or other administrative or judicial authority necessary for the validity or enforceability of its obligations under this Agreement have been obtained;

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(e) on the date on which it becomes a party to this Agreement (whether on the date hereof or thereafter pursuant to Section 4), all representations set forth in the transfer certificates or other documents required under the Indenture with respect to its acquisition of a Class A-R Note and the Assignment and Acceptance, as applicable, are true with respect to it; and

(f) such Class A-R Noteholder has delivered to the Issuer (or shall promptly deliver upon request by the Trustee or the Issuer) an investor letter and certification (generally, an Internal Revenue Service Form W-9 (or applicable successor form) in the case of a person that is a “United States person” within the meaning of Section 7701(a)(30) of the Code or an Internal Revenue Service Form W-8 (or applicable successor form) in the case of a person that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code) in a form satisfactory to the Issuer, each duly executed and completed.

6. THE REVOLVING CREDIT NOTE AGENT

(a) The Issuer hereby irrevocably appoints the Revolving Credit Note Agent as its agent hereunder and under the Indenture as provided herein.

(b) The Revolving Credit Note Agent shall not have any duties or obligations except those expressly set forth herein and in the Indenture. Without limiting the generality of the foregoing, (i) the Revolving Credit Note Agent shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing, (ii) the Revolving Credit Note Agent shall not have any duty to take any discretionary action or exercise any discretionary powers and (iii) the Revolving Credit Note Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Issuer or any of its subsidiaries that is communicated to or obtained by the bank serving as Revolving Credit Note Agent or any of its Affiliates in any capacity. The Revolving Credit Note Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Issuer or in the absence of its own fraud, gross negligence or willful misconduct. The Revolving Credit Note Agent shall be deemed not to have knowledge of any Event of Default unless and until written notice thereof is given to the Revolving Credit Note Agent by the Issuer or a Class A-R Noteholder, and the Revolving Credit Note Agent shall not be responsible for or have any duty to ascertain or inquire into (A) any statement, warranty or representation made in or in connection with this Agreement, (B) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (C) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein, (D) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document or (E) the satisfaction of any condition set forth in Section 3 or elsewhere herein or therein, other than (in each case) to confirm receipt of items expressly required to be delivered to the Revolving Credit Note Agent.

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(c) The Revolving Credit Note Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, in the absence of bad faith on its part, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Revolving Credit Note Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Revolving Credit Note Agent may consult with legal counsel (who may be counsel for the Issuer), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

(d) The Revolving Credit Note Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Revolving Credit Note Agent. The Revolving Credit Note Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding sub-sections shall apply to any such sub-agent and to the Related Parties of the Revolving Credit Note Agent and any such sub-agent; provided that, the Revolving Credit Note Agent shall not be relieved of any of its obligations hereunder by virtue of any appointment of a sub-agent.

(e) Subject to the appointment and acceptance of a successor Revolving Credit Note Agent as provided in this sub-section (e), the Revolving Credit Note Agent may resign at any time by notifying the Issuer (with a copy to the Collateral Manager). Upon any such resignation, the Issuer (or the Collateral Manager on the Issuer’s behalf) shall appoint a successor Revolving Credit Note Agent meeting the requirements set forth below. If no successor shall have been so appointed by the Issuer and shall have accepted such appointment within 30 days after the retiring Revolving Credit Note Agent gives notice of its resignation, then the retiring Revolving Credit Note Agent may, on behalf of the Issuer, petition a court of competent jurisdiction for the appointment of a successor Revolving Credit Note Agent. Any successor Revolving Credit Note Agent shall be a bank with an office in New York City or an Affiliate of any such bank having a combined capital and surplus of at least U.S.$200,000,000, having a credit rating of “BBB+” or better by S&P and “Baa1” or better by Moody’s (and if rated “Baal”, such rating not on watch for downgrade). Upon the acceptance of its appointment as Revolving Credit Note Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Revolving Credit Note Agent and the retiring Revolving Credit Note Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Issuer to a successor Revolving Credit Note Agent (including a successor appointed

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pursuant to the last sentence of this sub-section (e)) shall be the same as those payable to its predecessor unless otherwise agreed between the Issuer and such successor. After the Revolving Credit Note Agent’s resignation hereunder, the provisions of Section 2.4(c) and this Section 6 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Revolving Credit Note Agent. Notwithstanding the foregoing, the Revolving Credit Note Agent may resign its duties hereunder without any requirement that a successor Revolving Credit Note Agent be obligated hereunder and without any liability for further performance of any duties hereunder upon at least 60 days prior written notice to the Issuer of termination upon the occurrence of any of the following events and the failure to cure such event within such 60-day notice period: (i) failure of the Issuer to pay any of the Revolving Credit Note Agent Expenses or (ii) failure of the Issuer to provide any indemnity payment or expense reimbursement to the Revolving Credit Note Agent required under this Agreement upon the receipt by the Issuer of a written request for such payment or reimbursement, in each case, when funds are available therefor in the Expense Account. Upon receipt of any such resignation notice, the Issuer (or the Collateral Manager on the Issuer’s behalf) shall appoint a successor Revolving Credit Note Agent meeting the requirements set forth above and shall use its reasonable best efforts to effect such appointment within such notice period.

(f) Every successor Revolving Credit Note Agent appointed hereunder shall execute, acknowledge and deliver to the Issuer and the retiring Revolving Credit Note Agent an instrument accepting such appointment. Upon delivery of the required instrument, the resignation or removal of the retiring Revolving Credit Note Agent shall become effective and such successor Revolving Credit Note Agent, without any other act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of the retiring Revolving Credit Note Agent; provided that, upon request of the Issuer or the successor Revolving Credit Note Agent, such retiring Revolving Credit Note Agent shall, upon payment of its fees and expenses then unpaid, execute and deliver an instrument transferring to such successor Revolving Credit Note Agent all the rights, powers and trusts of the retiring Revolving Credit Note Agent.

(g) Each Class A-R Noteholder acknowledges that it has, independently and without reliance upon the Revolving Credit Note Agent or any other Person and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Class A-R Noteholder also acknowledges that it will, independently and without reliance upon the Revolving Credit Note Agent or any other Person and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any related agreement or any document furnished hereunder.

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(h) The Revolving Credit Note Agent shall be obligated only for the performance of such duties as are specifically set forth in this Agreement and in the Indenture and may rely and shall be protected in acting or refraining from acting on any written notice, request, waiver, consent or instrument reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties. The Revolving Credit Note Agent may exercise any of its rights or powers hereunder or perform any of its duties hereunder either directly or by or through agents or attorneys, and the Revolving Credit Note Agent shall not be responsible for any misconduct or negligence on the part of any non-affiliated appointed and supervised agent, or non-affiliated attorney, appointed hereunder with due care by it.

(i) Anything in this Agreement notwithstanding, in no event shall the Revolving Credit Note Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Revolving Credit Note Agent has been advised of such loss or damage and regardless of the form of action.

(j) No provision of this Agreement shall be construed to relieve the Revolving Credit Note Agent from liability for its own fraud, gross negligence or willful misconduct, except that (i) this subsection shall not be construed to limit the effect of sub-sections (b) and (c) of this Section 6; (ii) the Revolving Credit Note Agent shall not be liable for any error of judgment made in good faith by an Officer, unless it shall be proven that the Revolving Credit Note Agent was grossly negligent in ascertaining the pertinent facts; and (iii) no provision of this Agreement shall require the Revolving Credit 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 adequate indemnity against such risk or liability is not reasonably assured to it.

(k) The Revolving Credit Note Agent shall not be accountable for the use by the Issuer of the proceeds from the Class A-R Notes, shall not be responsible for any statement of the Issuer or a Class A-R Noteholder in this Agreement or the Indenture or in any document issued in connection with the sale of the Class A-R Notes and shall in no event assume or incur any liability, duty or obligation to any Class A-R Noteholder. Under no circumstances shall the Revolving Credit Note Agent be liable for indebtedness evidenced by or arising under the Indenture or any related documents, including the amounts payable on the Class A-R Notes.

(l) Notwithstanding anything in this Agreement to the contrary, the Revolving Credit Note Agent shall not be responsible for enforcing the provisions of this Agreement (including collection actions hereunder) against any Class A-R Noteholder at any time.

(m) The provisions of this Section 6 shall survive the termination of this Agreement and the resignation or removal of the Revolving Credit Note Agent.

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7. MISCELLANEOUS

7.1. Waivers; Amendments; Etc.

(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties to this Agreement hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by Section 7.1(b), 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 a Borrowing shall not be construed as a waiver of any Event of Default, regardless of whether the Revolving Credit Note Agent or any Class A-R Noteholder may have had notice or knowledge of such Event of Default at the time.

(b) Amendments. 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 Issuer and the Class A-R Noteholders or by the Issuer and the Revolving Credit Note Agent with the consent of the Class A-R Noteholders; provided that, no such agreement shall amend, modify or otherwise affect the (i) rights or duties of the Revolving Credit Note Agent or the Trustee hereunder without the prior written consent of the Revolving Credit Note Agent or the Trustee, as the case may be; or (ii) rights or duties of the Collateral Manager hereunder or under the Collateral Management Agreement or the Indenture without the prior written consent of the Collateral Manager.

(c) Third Party Beneficiaries. Each covenant and other agreement under this Agreement stated to be owing by any party hereto to the Collateral Manager is expressly intended to be made for the benefit of the Collateral Manager, and the Collateral Manager is an express third party beneficiary of each such covenant or other agreement and is entitled to enforce each such covenant or agreement (without regard to any modification thereof which is adverse to the Collateral Manager) without any act or notice of acceptance hereof or reliance hereon, all as if the Collateral Manager were a party hereto.

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7.2. Notices, Etc.

All notices and other communications under or in connection with this Agreement shall be given or made in writing (including by telex or facsimile) to the intended recipient at its “Address for Notices” specified under its signature hereto or in its Assignment and Acceptance; or, as to any party (including the Collateral Manager), at such other address as shall be set forth in Section 14.3 of the Indenture or as shall be designated by such party in a notice to each other party. The Revolving Credit Note Agent shall (a) forward any Notices received by the Revolving Credit Note Agent under the Indenture to each Class A-R Noteholder; and (b) promptly (and in any event within one Business Day after receipt of the information) notify the Collateral Manager if any existing Class A-R Noteholder disposes of its Class A-R Notes or any additional Class A-R Noteholder acquires any Class A-R Notes (together with the notice details for Notices of Borrowing for such additional Class A-R Noteholder) such that the Collateral Manager has the information that it requires with respect to the Class A-R Noteholders in order to deliver Notices of Borrowing on behalf of the Issuer.

7.3. Captions

The captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

7.4. Governing Law; Jurisdiction; Venue

This Agreement shall be construed in accordance with, and this Agreement and any matters arising out of or relating in any way whatsoever to this Agreement (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

With respect to any suit, action or proceedings relating to this Agreement or any matter between the parties arising under or in connection with this Agreement (“Proceedings”), each party irrevocably: (a) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (b) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes any party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

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7.5. Consent to Service of Process

Each party to this Agreement irrevocably consents to service of process by personal delivery, certified mail, postage prepaid or overnight courier. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

7.6. Waiver of Jury Trial

EACH PARTY 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. Each party hereby (a) certifies that no representative, agent or attorney of any other has represented, expressly or otherwise, that such other would not, in the event of a Proceeding, seek to enforce the foregoing waiver; and (b) acknowledges that it has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this paragraph.

7.7. Execution in Counterparts

This Agreement (and each amendment, modification and waiver in respect of this Agreement) may be executed and delivered in any number of counterparts (including by e-mail (PDF) or facsimile), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument, and each of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed counterpart of this Agreement by e-mail (PDF) or facsimile shall be deemed to constitute due and sufficient delivery of such counterpart.

7.8. Tax Treatment of Notes

Each of the Issuer, the Revolving Credit Note Agent, the Trustee and each Class A-R Noteholder hereby agrees to treat the Class A-R Notes as indebtedness solely of the Issuer for U.S. Federal, and, to the extent permitted by law, state and local income and franchise tax purposes, to report all income (or loss) in accordance with such characterization and not to take any action inconsistent with such treatment unless otherwise required by any relevant taxing authority.

7.9. Transfer Taxes

Any applicable stamp duties or other transfer taxes and duties (including notarial fees) and any costs attributable to the sale and purchase of the Class A-R Notes shall be payable by the Issuer in accordance with the Priority of Payments.

7.10. Severability

If any term, provision, covenant or condition of this Agreement, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal (in

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whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Agreement, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Agreement, so long as this Agreement, as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Agreement, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

7.11. Further Assurances

Each of the Issuer and each Class A-R Noteholder hereby agrees to execute and deliver such other instruments, and take such other actions, as the other parties may reasonably request in connection with the transactions contemplated by this Agreement.

7.12. Limited Recourse, Non-Petition as to the Issuer

The Class A-R Notes will be limited recourse debt obligations of the Issuer, and all obligations of the Issuer under this Agreement are limited-recourse obligations of the Issuer, and are payable solely from the Collateral Granted by the Issuer to secure the Notes in accordance with the Priority of Payments and, following the exhaustion of the Collateral under the Indenture, all obligations of and claims against the Issuer hereunder or arising in connection herewith shall be extinguished and shall not thereafter revive. None of the Collateral Manager, the Trustee or the Collateral Administrator or any incorporator, stockholder, affiliate, officer, member, manager, partner, employee or director of the Issuer, the Collateral Manager, the Trustee or the Collateral Administrator, or any of their respective affiliates or any other Person will be obligated to make payments on the Class A-R Notes or hereunder. No recourse shall be had against any officer, member, director, employee, securityholder or incorporator of the Issuer or its successors or assigns for the payment of any amounts payable under the Class A-R Notes or this Agreement. Notwithstanding any provision of this Agreement, each Class A-R Noteholder hereby agrees not to cause the filing of a petition in bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under any law or jurisdiction against the Issuer before 366 days have elapsed or, if longer, the applicable preference period then in effect (including, without limitation, any period established pursuant to the laws of the Cayman Islands) (plus one day) after the payment in full of all Notes issued under the Indenture. The provisions of this Section 7.12 shall survive the termination of this Agreement.

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

CM FINANCE SPV LTD.,

as Issuer

By:

Name:

Title:

Address for Notices:

c/o CM Finance LLC

399 Park Avenue, 39th Floor

New York, NY 10022

Attention:	Stephon Barnes, Christopher E. Jansen and Michael C. Mauer
Telephone no.:	(212) 380-5904
Facsimile no.:	(212) 380-5915
Email:	cjansen@cyruscapital.com,
	mmauer@cyruscapital.com
	ops@cyruscapital.com

Revolving Credit Note Agreement

STATE STREET BANK AND TRUST COMPANY,

as Revolving Credit Note Agent

By:

Name:

Title:

Address for Notices:

200 Clarendon Street

Mail Code: JHT06

Boston, MA 02116

Attention:	Structured Trust & Analytics
Facsimile No.:	617-937-0583
E-mail:	statestreet_CDO_services@statestreet.com

Revolving Credit Note Agreement

STATE STREET BANK AND TRUST COMPANY,

as Trustee

By:

Name:

Title:

Address for Notices:

200 Clarendon Street

Mail Code: JHT06

Boston, MA 02116

Attention:	Structured Trust & Analytics
Facsimile No.:	617-937-0583
E-mail:	statestreet_CDO_services@statestreet.com

Wire Instructions:

State Street Bank,

Boston, MA

ABS #: 011-000-028

Account #: 00608836

Account Name: CM Finance SPV Loan Account

Reference: CYB1 – Borrower Name & Activity

Revolving Credit Note Agreement

COMMITMENT PERCENTAGE AS OF THE DATE HEREOF: 60%

CM FINANCE LLC,

as an Initial Holder

By:

Name:

Title:

Address for Notices:

399 Park Avenue, 39th Floor

New York, NY 10022

Revolving Credit Note Agreement

COMMITMENT PERCENTAGE AS OF THE DATE HEREOF: 40%

UBS AG, LONDON BRANCH,

as an Initial Holder

By:

Name:

Title:

By:

Name:

Title:

Address for Notices:

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: Structured Funding

Telephone Number: 203-719-7390

Email: OL-Cyrus-TRS@ubs.com

Revolving Credit Note Agreement

EXHIBIT A

FORM OF NOTICE OF BORROWING

[DATE]

STATE STREET BANK AND TRUST COMPANY,

as Revolving Credit Note Agent and as Trustee

200 Clarendon Street,

Mail Code: JHT06,

Attention: Structured Trust & Analytics, Boston, MA 02116

[Insert Notice Details for each current Class A-R Noteholder]

Ladies and Gentlemen:

Reference is hereby made to (i) that certain amended and restated Indenture, dated as of December 4, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Indenture”) between CM Finance SPV Ltd., an exempted company with limited liability incorporated under the law of the Cayman Islands (the “Issuer”), and State Street Bank and Trust Company, as Trustee and as Bank; and (ii) that certain Revolving Credit Note Agreement, dated as of December 4, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) between the Issuer, certain other parties, State Street Bank and Trust Company, as Revolving Credit Note Agent and the Trustee. Terms defined in the Indenture or the Agreement and used herein shall have the meanings given such terms in the Indenture or the Agreement.

The Issuer hereby gives you notice, irrevocably, pursuant to Section 2.1(b) of the Agreement that the Issuer hereby requests a Borrowing under the Agreement (the “Proposed Borrowing”) and, in that connection, sets forth below the information relating to such Proposed Borrowing as required pursuant to the terms of the Agreement:

(a) The Business Day of the Proposed Borrowing is [                    ].

(b) The aggregate principal amount of the Proposed Borrowing is U.S.$[            ].

(c) The total amount of outstanding Borrowings after giving effect to the Proposed Borrowing is U.S.$[            ].

(d) The total amount of the Remaining Unfunded Facility Commitment after giving effect to the Proposed Borrowing is U.S.$[            ].

Payment shall be made by wire transfer to the Trustee pursuant to the following wire transfer instructions:

[INSERT PAYMENT INSTRUCTIONS]

Page I

The submission of this notice constitutes a certification of the Issuer that the conditions to such Borrowing set forth in Section 3 of the Agreement have been satisfied or waived by each Class A-R Noteholder as of the date of the Proposed Borrowing.

CM FINANCE SPV LTD.
By:	CM INVESTMENT PARTNERS, L.P.,
as Collateral Manager

By:

Name:

Title:

Page II

EXHIBIT B

FORM OF ASSIGNMENT AND ACCEPTANCE

[DATE]

ASSIGNMENT AND ACCEPTANCE, dated [                    ] (the “Assignment and Acceptance”), among                     (“Assignor”) and                     (“Assignee”).

Reference is hereby made to (i) that certain amended and restated Indenture, dated as of December 4, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), between CM Finance SPV Ltd., an exempted company with limited liability incorporated under the law of the Cayman Islands (the “Issuer”), and State Street Bank and Trust Company, as Trustee and as Bank; and (ii) that certain Revolving Credit Note Agreement, dated as of December 4, 2013 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), between the Issuer, certain other parties, State Street Bank and Trust Company, as Revolving Credit Note Agent and the Trustee. Terms defined in the Indenture or the Agreement and used herein shall have the meanings given such terms in the Indenture or the Agreement.

Assignor hereby sells and assigns, without recourse, to Assignee, and Assignee hereby purchases and assumes, without recourse, from Assignor, effective as of the Effective Date (as defined below), a [        ]% interest (the “Assigned Interest”) in all of Assignor’s rights and obligations under the Agreement, the Indenture and under any other Transaction Documents, and in the interests in the Class A-R Notes of Assignor in existence on the Effective Date, together with the rights of Assignor to payment in respect of outstanding principal and accrued and unpaid interest relating to such Assigned Interest. The Outstanding Class A-R Funded Amount allocated to the Assigned Interest is U.S.$[            ].

Each of Assignor and Assignee hereby agrees to be bound by all the agreements set forth in the Indenture or the Agreement (including Section 4.1 of the Agreement), a copy of each of which has been received by each such party. From and after the Effective Date, (i) Assignee shall be a party to and be bound by the provisions of the Agreement and the Indenture and, to the extent of the interests assigned pursuant to this Assignment and Acceptance, have the rights and obligations of a Class A-R Noteholder thereunder, and (ii) to the extent of the interests assigned by this Assignment and Acceptance, Assignor hereby relinquishes its rights and is released from its obligations under the Agreement.

Assignor hereby represents and warrants that the Assigned Interest to be sold hereby is owned by Assignor free and clear of any liens, claims or encumbrances created or suffered to exist by Assignor. Except as otherwise set forth in the foregoing sentence, or as otherwise agreed in writing by Assignor, Assignor makes no representation or warranty and assumes no responsibility with respect to (i) any statements, representations or warranties made in or in connection with the Agreement, any Class A-R Note or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement or any Class A-R Note, or (ii) the business condition (financial or otherwise), operations, properties or prospects of the Issuer, the Collateral Manager or any Affiliate of any thereof or the performance or observance by any party of any of its obligations under the Indenture, the Agreement or otherwise.

Page III

Assignee hereby (i) confirms that it has received a copy of the Agreement, the Indenture, and such other documents and information requested by it, and that it has, independently and without reliance upon the Trustee, the Revolving Credit Note Agent, the Collateral Manager, the Assignor, or any other Person, and based on such documentation and information as it has deemed appropriate, made its own decision to enter into this Assignment and Acceptance; (ii) agrees that it shall, independently and without reliance upon the Trustee, the Revolving Credit Note Agent, the Collateral Manager, the Assignor, or any other Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement; (iii) confirms that it satisfies the eligibility requirements for any Noteholder of Class A-R Notes set forth in the Indenture and that the representations set forth in the transfer certificates or other documents required under the Indenture with respect to its acquisition of a Class A-R Note are true with respect to it; (iv) makes each representation and warranty set forth in Section 5.2 of the Agreement as if set out in full herein, each of which is true and correct on and as of the date hereof; (v) agrees that it shall perform in accordance with their terms all of the obligations that by the terms of the Agreement and the Indenture are required to be performed by it as a Class A-R Noteholder; (vi) specifies as its address for notices the office set forth below; and (vii) in the event that Assignee is organized under the laws of a jurisdiction other than the United States or a state thereof, represents and warrants that attached to this Assignment and Acceptance are the forms and certificates required pursuant to Section 2.5 of the Indenture, accurately completed and duly executed, pursuant to which forms and certificates each of the Issuer and the Trustee may make payments to, and deposit funds to or for the account of, Assignee hereunder and under the Indenture without any deduction or withholding for or on account of any tax.

The effective date for this Assignment and Acceptance shall be the later of (A) the date on which the Revolving Credit Note Agent confirms that this Assignment and Acceptance on its face satisfies the requirements of the Agreement, and (B) [            , 20    ] (the later of such dates being the “Effective Date”).

Each of the Assignor and the Assignee hereby agrees that the Trustee, the Revolving Credit Note Agent, the Issuer and the Collateral Manager are third-party beneficiaries of this Assignment and Acceptance.

From and after the Effective Date, the Revolving Credit Note Agent shall reflect the assignment of the Assigned Interest hereunder in the Class A-R Note Register and shall direct the Trustee to make all payments in respect of the Assigned Interests assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to Assignee as reflected in the Class A-R Note Register. Assignor and Assignee shall make all appropriate adjustments in payments under the Agreement and the Assigned Interests for periods prior to the Effective Date directly between themselves.

This Assignment and Acceptance shall be construed in accordance with, and this Assignment and Acceptance and any matters arising out of or relating in any way whatsoever to this Assignment and Acceptance (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

Page IV

Legal Name of Assignor:

Legal Name of Assignee:

Registered Name on Class A-R Note:

[Federal Tax Identification Number of Assignee:]

Assignee’s Address for Notices:

[Address]

[Telephone]

[Facsimile]

[Email]

Assignee’s Wiring Instructions:

[                    ]

A. Immediately after giving effect to this Assignment and Acceptance, the aggregate Outstanding Class A-R Funded Amount of Assignee’s interest in the Class A-R Note is U.S.$[            ] and its Class A-R Commitment Amount is U.S.$[            ].

B. Immediately after giving effect to this Assignment and Acceptance, the aggregate Outstanding Class A-R Funded Amount of Assignor’s interest in the Class A-R Note is U.S.$[            ] and its Class A-R Commitment Amount is U.S.$[            ].

[ASSIGNOR]

By:

Name:

Title:

[ASSIGNEE]

By:

Name:

Title:

Attachment: Duly endorsed certificate representing the Class A-R Notes

Page V

EX-99.K.13

Exhibit (k)(13)

AMENDMENT AGREEMENT, dated as of December 4, 2013 (this Amendment Agreement), between CM FINANCE SPV LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as issuer (the Issuer); and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the Trustee) and, solely as expressly specified in the Indenture, in its individual capacity (the Bank).

WHEREAS, the Issuer, the Trustee and the Bank have previously entered into that certain Indenture, dated as of May 23, 2013 (as supplemented by the First Supplemental Indenture, dated as of June 6, 2013, between the Issuer and the Trustee, the Original Indenture), between the Issuer, the Trustee and the Bank.

WHEREAS, the parties agree that this Amendment Agreement shall constitute a supplemental indenture for purposes of Article VIII of the Indenture and wish to amend and restate the Original Indenture by entering into this Amendment Agreement.

WHEREAS, Section 8.2 of the Original Indenture provides that the Original Indenture may be amended for a purpose not permitted under Section 8.1 of the Original Indenture, with the written consent of each Holder and the Collateral Manager.

WHEREAS, the Issuer has requested that, pursuant to and in accordance with the terms and conditions of this Amendment Agreement, the Trustee enter into, and that each Holder and the Collateral Manager consent to, the Amended and Restated Indenture, dated as of December 4, 2013 (as attached hereto as Exhibit A, the Indenture), between the Issuer, the Trustee and the Bank, pursuant to which the Issuer proposes to issue and sell (the Issuance) up to U.S.$125,000,000 in aggregate principal amount of Class A-R Notes (the Class A-R Notes) in accordance with (a) the Revolving Credit Note Agreement, dated as of December 4, 2013 (the Revolving Credit Note Agreement), between the Issuer, each entity party thereto as a Class A-R Noteholder, State Street Bank and Trust Company, as revolving credit note agent, and the Trustee; and (b) the Class A-R Placement Agency Agreement, dated as of December 4, 2013 (the Class A-R Placement Agency Agreement), between the Issuer and UBS Securities LLC, as placement agent.

ACCORDINGLY, in consideration of the promises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions

Capitalized terms used but not defined herein have the respective meanings given to such terms in the Original Indenture.

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2. Amendments

With effect from and including the Effective Date (as defined in Section 3), the Original Indenture shall be amended and restated so that it shall be read and construed as set out in the Indenture attached hereto as Exhibit A.

3. Conditions Precedent to Effective Date

This Amendment Agreement shall become effective on and as of the date (the Effective Date) on which each of the following conditions precedent shall have been satisfied:

(a) Amendment Agreement. This Amendment Agreement shall have been duly executed and delivered by each party hereto.

(b) Indenture. The Indenture shall have been duly executed and delivered by each party thereto.

(c) Revolving Credit Note Agreement and Class A-R Placement Agency Agreement. The Revolving Credit Note Agreement shall have been duly executed and delivered by each party thereto and the Class A-R Placement Agency Agreement shall have been duly executed and delivered by each party thereto.

(d) Amendments to Transaction Documents. Amendments to each of the following Transaction Documents shall have been duly executed and delivered by each party thereto: (i) the Issuer Account Control Agreement, (ii) the Collateral Management Agreement and (iii) the Collateral Administration Agreement (collectively, together with the Revolving Credit Note Agreement and the Class A-R Placement Agency Agreement, the Amendment Documents).

(e) Representations and Warranties. Each of the representations and warranties contained in the Indenture, this Amendment Agreement and each Amendment Document described in sub-section (d) is true and correct on and as of the Effective Date with the same force and effect as if made on and as of the Effective Date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(f) No Event of Default. No Event of Default shall have occurred and be continuing.

(g) Corporate Documents. The Trustee shall have received in form and substance reasonably satisfactory to the Trustee the following corporate documents:

(i) Officers’ Certificates of the Issuer.

(A) An Officer’s certificate of the Issuer, dated as of the date hereof, (A) evidencing the authorization of the execution and delivery on behalf of the Issuer of (1) the Amendment Documents to which the Issuer

Page 2

is a party; and (2) such related documents as may be required for the purpose of the Issuance and the transactions contemplated in the Indenture, this Amendment Agreement and the Amendment Documents; and (B) certifying that (1) the copies of the Authorizing Resolution and Constitutive Documents attached thereto are, in each case, a true and complete copy thereof; (2) such authorizations have not been amended or rescinded and are in full force and effect on and as of the date hereof; and (3) the Officers of the Issuer authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

(B) An Officer’s certificate of the Issuer, dated as of the date hereof, stating that, to the Officer’s knowledge, (i) the Issuer is not in default under the Indenture; (ii) the issuance of the Class A-R Notes applied for by it will not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its organizational documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; (iii) if applicable, all conditions precedent provided in the Indenture relating to the authentication and delivery of the Class A-R Notes applied for by it have been complied with; (iv) if applicable, all expenses due or accrued with respect to the issuance and sale of such Class A-R Notes or relating to actions taken on or in connection with the date hereof have been paid or reserves therefor have been made; and (v) all of its representations and warranties contained in the Indenture, this Amendment Agreement and each Amendment Agreement are true and correct as of the date hereof.

(ii) Officers’ Certificate of the Sole Shareholder. An Officer’s certificate of the Sole Shareholder, dated as of the date hereof, (A) evidencing the authorization by Authorizing Resolution of the execution and delivery of (1) the Amendment Documents to which the Sole Shareholder is a party; and (2) such related documents as may be required for the purpose of the Issuance and the transactions contemplated in the Indenture, this Amendment Agreement and the Amendment Documents; and (B) certifying that (1) the copies of the Authorizing Resolution and Constitutive Documents attached thereto are, in each case, a true and complete copy thereof; (2) such resolutions have not been amended or rescinded and are in full force and effect on and as of the date hereof; and (3) the Officers of the Sole Shareholder or its manager authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

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(iii) Officers’ Certificate of the Collateral Manager. An Officer’s certificate of the Collateral Manager, dated as of the date hereof, (A) evidencing the authorization of the execution and delivery on behalf of the Collateral Manager of (1) the Amendment Documents to which the Collateral Manager is a party; and (2) such related documents as may be required for the purpose of the Issuance and the transactions contemplated in the Indenture, this Amendment Agreement and the Amendment Documents; and (B) certifying that (1) the copies of the Authorizing Resolution and Constitutive Documents attached thereto are, in each case, a true and complete copy thereof; (2) such authorizations have not been amended or rescinded and are in full force and effect on and as of the date hereof; and (3) the Officers of the Collateral Manager authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

(h) Legal Opinions. The Trustee shall have received the following legal opinions:

(i) U.S. Counsel Opinions. An opinion of Nixon Peabody LLP, counsel to the Trustee and the Collateral Administrator, and Bingham McCutchen LLP, counsel to the Issuer, Sole Shareholder and Collateral Manager, each dated the date hereof, each in form and substance satisfactory to the Trustee and UBS AG.

(ii) Cayman Counsel Opinion. An opinion of Appleby (Cayman) Ltd., Cayman Islands counsel to the Issuer, dated the date hereof, in form and substance satisfactory to the Trustee and UBS AG.

4. Representations and Warranties; Covenants; other Agreements

(a) Each party hereto represents and warrants that this Amendment Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

(b) From time to time, each of the parties hereto will promptly execute and deliver all such further instruments, certificates and documents, and take all such further actions as any one of them may deem to be necessary, advisable, convenient or proper to carry out the intent of this Amendment Agreement.

(c) For the purposes of this Amendment Agreement: (i) each of the Trustee, the Collateral Administrator, the Collateral Manager and each Holder, by executing and delivering a counterpart of this Amendment Agreement, hereby waives any right under the Transaction Documents to prior notice of this Amendment Agreement; (ii) each Holder and the Collateral Manager, by executing and delivering a counterpart of this Amendment Agreement, hereby provides their

Page 4

written consent to the execution of this Amendment Agreement, the Indenture and the Omnibus Amendment Agreement, dated on or about the date hereof, between the Issuer, the Collateral Manager, the Trustee and the Collateral Administrator, by the Trustee and the Issuer pursuant to Section 8.2 of the Original Indenture; (iii) each of the Issuer, the Collateral Manager and each Holder, by executing and delivering a counterpart of this Amendment Agreement, hereby agrees that the execution of this Amendment Agreement is authorized and permitted by the Original Indenture and that all conditions precedent thereto have been satisfied and that, for all purposes under the Original Indenture, including Section 8.3(b) thereof, the Trustee shall be permitted to rely on this Section 4(c), and shall be as fully protected in so relying on this Section 4(c), in lieu of an Opinion of Counsel; and (iv) each of UBS AG, London Branch and CM Finance LLC, by executing and delivering a counterpart of this Amendment Agreement, hereby represents that it is the beneficial owner of Notes having an aggregate principal amount as indicated above its signature hereto.

5. Miscellaneous

(a) Successors and Assigns. This Amendment Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No person or entity other than the parties hereto and their respective successors and permitted assigns shall have any rights under this Amendment Agreement.

(b) Entire Agreement. This Amendment Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings (except as otherwise provided herein) with respect thereto.

(c) Headings. The headings used in this Amendment Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Amendment Agreement.

(d) Governing Law. This Amendment Agreement shall be construed in accordance with, and this Amendment Agreement and any matters arising out of or relating in any way whatsoever to this Amendment Agreement (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

(e) Jurisdiction. With respect to any suit, action or proceedings relating to this Amendment Agreement or any matter between the parties arising under or in connection with this Amendment Agreement (Proceedings), each party irrevocably: (i) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (ii) waives any objection which it may have at any time to the

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laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Amendment Agreement precludes any party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(f) Waiver of Jury Trial Right. EACH PARTY 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 PROCEEDINGS. Each party hereby (a) certifies that no representative, agent or attorney of any other has represented, expressly or otherwise, that such other would not, in the event of a Proceeding, seek to enforce the foregoing waiver; and (b) acknowledges that it has been induced to enter into this Amendment Agreement by, among other things, the mutual waivers and certifications in this paragraph.

(g) Counterparts. This Amendment Agreement (and each amendment, modification and waiver in respect of this Amendment Agreement) may be executed and delivered in any number of counterparts (including by e-mail (PDF) or facsimile), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument, and each of the parties hereto may execute this Amendment Agreement by signing any such counterpart. Delivery of an executed counterpart of this Amendment Agreement by e-mail (PDF) or facsimile shall be deemed to constitute due and sufficient delivery of such counterpart.

(h) Severability. If any term, provision, covenant or condition of this Amendment Agreement, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Amendment Agreement, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Amendment Agreement, so long as this Amendment Agreement, as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Amendment Agreement, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed and delivered by their respective signatories thereunto duly authorized as of the date first written above.

CM FINANCE SPV LTD.,

as Issuer

By:

Name:

Title:

STATE STREET BANK AND TRUST COMPANY,

as Trustee and as Bank

By:

Name:

Title:

STATE STREET BANK AND TRUST COMPANY,

as Collateral Administrator

By:

Name:

Title:

CM INVESTMENT PARTNERS, L.P.,

as Collateral Manager

By:

Name:

Title:

Amendment Agreement

UBS AG, LONDON BRANCH,
as Holder of Notes having an aggregate principal amount of U.S.$76,500,000
By:
Name:
Title:
By:
Name:
Title:
CM FINANCE LLC, as Holder of Notes having an aggregate principal amount of U.S.$73,500,000 and as Sole Shareholder
By:	CM Investment Partners, L.P., as Manager
By:
Name:
Title:

Amendment Agreement

EXHIBIT A

AMENDED AND RESTATED INDENTURE

EX-99.K.14

Exhibit (k)(14)

AMENDMENT AGREEMENT TO 2002 ISDA MASTER AGREEMENT

This AMENDMENT AGREEMENT, dated as of December 4, 2013 (this Amendment Agreement), between UBS AG, a banking corporation organized under the law of Switzerland (Party A), and CM FINANCE LLC, a limited liability company organized under the laws of the State of Maryland (Party B), acting by and through CM Investment Partners, L.P., except as otherwise indicated, not in its individual capacity but as agent of Party B (in such capacity, Investment Adviser).

WHEREAS, Party A and Party B have previously entered into that certain 2002 ISDA Master Agreement, dated as of May 20, 2013 (together with the Schedule thereto, the Credit Support Annex to the Schedule and each Confirmation exchanged thereunder, and as amended, supplemented or otherwise modified from time to time, the Agreement).

WHEREAS, Party A and Party B wish to amend the Agreement in accordance with the terms of this Amendment Agreement.

ACCORDINGLY, in consideration of the promises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions

Capitalized terms used but not defined herein have the respective meanings given to such terms in the Agreement.

2. Amendments

With effect from and including the Effective Date (as defined in Section 3), the Agreement shall be amended as follows:

(a) Amendment of the Schedule to the Agreement

(i) Part 1(g) of the Schedule is hereby deleted in its entirety and replaced with the following:

“(g) Payments on Early Termination. For the purpose of Section 6(e) of this Agreement: with respect to each Subject Transaction, as specified in the Specified Confirmation (as defined in Part 5(i) below) for such Subject Transaction.”

(ii) Part 1(i)(viii) of the Schedule is hereby amended by replace the reference to “(as such term is defined in the Specified Confirmation)” with “(as such term is defined in the Specified Confirmations)”.

(iii) Part 3 of the Schedule is hereby amended by (A) replacing each reference to “the Specified Confirmation” with the phrase “each Specified Confirmation” and (B) deleting the reference to “and each Confirmation forming a part of this Agreement”.

(iv) Part 4(d) of the Schedule is hereby deleted in its entirety and replaced with the following:

“(d) Calculation Agent. The Calculation Agent is Party A unless otherwise specified, with respect to each Subject Transaction, in the Specified Confirmation (as defined in Part 5(i) below) for such Subject Transaction.”

(v) Part 5(i) of the Schedule is hereby deleted in its entirety and replaced with the following:

“(i) Scope of Agreement. Party A and Party B agree that the terms of this Agreement shall relate solely and specifically to the Transactions (each a Subject Transaction and together the Subject Transactions) set forth in the Confirmations (each a Specified Confirmation and together the Specified Confirmations) entered into between Party A and Party after the date hereof substantially in the form of Exhibit A attached hereto, and shall not apply to any other transactions. Party A and Party B agree that (i) the only Transactions entered into under this Agreement will be the Subject Transactions as evidenced by the respective Specified Confirmations and (b) this Agreement will automatically terminate upon the termination of all Specified Confirmations and satisfaction by Party A and Party B of all of their respective obligations (whether matured or contingent) arising out of such termination.”

(vi) Exhibit A to the Schedule is hereby amended by (A) replacing the reference to “Specified Confirmation” with “Specified Confirmations” and (B) inserting in Exhibit A to the Schedule the Specified Confirmation attached hereto as Exhibit 1.

(b) Amendments to the Credit Support Annex – Paragraph 13

(i) Paragraph 13(b)(iv)(A) is hereby amended by replacing the reference to “the Specified Confirmation” with “the Specified Confirmations”.

(ii) Paragraph 13(j)(i) is hereby amended by replacing the reference to “the Specified Confirmation” with “the Specified Confirmations”.

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(iii) Paragraph 13(m)(i) is hereby amended by replacing the reference to “the Specified Confirmation” with “the Specified Confirmations”.

(iv) Paragraph 13(m)(iv) is hereby amended by replacing the reference to “the Specified Confirmation” with “the Specified Confirmations”.

(v) Paragraph 13(m)(v) is hereby deleted in its entirety and replaced with the following:

“(v) “Specified Confirmation” has the meaning set forth in the ISDA Schedule.”

(vi) Paragraph 13(n)(v) is hereby amended by replacing the reference to “the Subject Confirmation” with “the Specified Confirmations”.

(vii) Paragraph 13(n)(viii) is hereby amended by adding immediately after the phrase “Effective Date” the phrase “(as specified in the applicable Specified Confirmation)”.

(viii) Paragraph 13(n)(x) is hereby amended by adding immediately after the phrase “Effective Date” the phrase “(as specified in the applicable Specified Confirmation)”.

(ix) Paragraph 13(n)(ix) is hereby amended by replacing the reference to “the Specified Confirmation” with “the applicable Specified Confirmation”.

3. Conditions Precedent to Effective Date

This Amendment Agreement shall become effective on and as of the date (the Effective Date) on which this Amendment Agreement shall have been duly executed and delivered by each party hereto.

4. Representations and Warranties; Covenants; Other Agreements

(a) Representations and Warranties.

(i) Each party represents to the other party that each of the representations and warranties contained in the Agreement (including all representations set forth in the Credit Support Annex) is true and correct on and as of the Effective Date with the same force and effect as if made on and as of the Effective Date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(ii) Each party represents and warrants to the other party that this Amendment Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

Page 3

(b) Further Assurance. From time to time, each of the parties hereto will promptly execute and deliver all such further instruments, certificates and documents, and take all such further actions as any one of them may deem to be necessary, advisable, convenient or proper to carry out the intent of this Amendment Agreement.

(c) Agreement Continuation. The Agreement, as modified by this Amendment Agreement, shall continue in full force and effect, and nothing herein contained shall be construed as a waiver or modification of existing rights under the Agreement, except as such rights are expressly modified hereby.

5. Miscellaneous

(a) Successors and Assigns. This Amendment Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No person or entity other than the parties hereto and their respective successors and permitted assigns shall have any rights under this Amendment Agreement.

(b) Entire Agreement. This Amendment Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings (except as otherwise provided herein) with respect thereto.

(c) Headings. The headings used in this Amendment Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Amendment Agreement.

(d) Governing Law. This Amendment Agreement shall be construed in accordance with, and this Amendment Agreement and any matters arising out of or relating in any way whatsoever to this Amendment Agreement (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

(e) Jurisdiction. With respect to any suit, action or proceedings relating to this Amendment Agreement or any matter between the parties arising under or in connection with this Amendment Agreement (Proceedings), each party irrevocably: (i) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such

Page 4

party. Nothing in this Amendment Agreement precludes any party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(f) Waiver of Jury Trial Right. EACH PARTY 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 PROCEEDINGS. Each party hereby (a) certifies that no representative, agent or attorney of any other has represented, expressly or otherwise, that such other would not, in the event of a Proceeding, seek to enforce the foregoing waiver; and (b) acknowledges that it has been induced to enter into this Amendment Agreement by, among other things, the mutual waivers and certifications in this paragraph.

(g) Counterparts. This Amendment Agreement (and each amendment, modification and waiver in respect of this Amendment Agreement) may be executed and delivered in any number of counterparts (including by e-mail (PDF) or facsimile), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument, and each of the parties hereto may execute this Amendment Agreement by signing any such counterpart. Delivery of an executed counterpart of this Amendment Agreement by e-mail (PDF) or facsimile shall be deemed to constitute due and sufficient delivery of such counterpart.

(h) Severability. If any term, provision, covenant or condition of this Amendment Agreement, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Amendment Agreement, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Amendment Agreement, so long as this Amendment Agreement, as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Amendment Agreement, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be executed and delivered by their respective authorized officers or representatives as of the date first above written.

UBS AG	CM FINANCE LLC
By:	By:
Name:	Name:
Title:	Title:
By:
Name:
Title:

Amendment Agreement - ISDA

Exhibit 1

1

EX-99.K.15

Exhibit (k)(15)

Execution Copy

OMNIBUS AMENDMENT AGREEMENT, dated as of December 4, 2013 (this Amendment Agreement), between CM FINANCE SPV LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as issuer (the Issuer); CM INVESTMENT PARTNERS, L.P., a limited partnership organized under the laws of the State of Delaware, as collateral manager (in such capacity, together with its permitted successors and assigns under the Indenture, the Collateral Manager); STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the Trustee); and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as collateral administrator (in such capacity, together with its permitted successors and assigns under the Collateral Administration Agreement, the Collateral Administrator).

WHEREAS, the Collateral Manager, the Issuer and the Collateral Administrator have previously entered into that certain Collateral Administration Agreement, dated as of May 23, 2013 (the Collateral Administration Agreement). Section 10 of the Collateral Administration Agreement states that the Collateral Administration Agreement may not be amended, changed, modified or terminated except by the Collateral Manager, the Issuer and the Collateral Administrator in writing.

WHEREAS, the Issuer and the Collateral Manager have previously entered into that certain Collateral Management Agreement, dated as of May 23, 2013 (the Collateral Management Agreement). Section 13 of the Collateral Management Agreement states that the Collateral Management Agreement may not be modified or amended without the prior written consent of the Trustee and the Majority Noteholders and in writing executed by the parties thereto.

WHEREAS, the Issuer, the Trustee and State Street Bank and Trust Company, in its individual capacity (the Bank) have previously entered into that certain Indenture, dated as of May 23, 2013 (as supplemented by the First Supplemental Indenture, dated as of June 6, 2013, between the Issuer and the Trustee, the Original Indenture), between the Issuer, the Trustee and the Bank. The Issuer, the Trustee and the Bank have agreed to enter into an Amendment Agreement, dated on or about the date hereof (the Indenture Amendment Agreement), pursuant to which the Original Indenture is amended and restated, and pursuant to which the Issuer proposes to issue (the Issuance) up to U.S.$125,000,000 in aggregate principal amount of Class A-R Notes (the Class A-R Notes) in accordance with the Revolving Credit Note Agreement, dated as of December 4, 2013 (the Revolving Credit Note Agreement), between the Issuer, each entity party thereto as a Class A-R Noteholder, State Street Bank and Trust Company, as revolving credit note agent, and the Trustee.

WHEREAS, each party to the Collateral Administration Agreement has agreed to amend the Collateral Administration Agreement, and each party to the Collateral Management Agreement has agreed to amend the Collateral Management Agreement, in each case, in accordance with the terms of this Amendment Agreement, in order to reflect the Issuance and the transactions contemplated in the Indenture, the Indenture Amendment Agreement and the Revolving Credit Note Agreement.

Page 1

ACCORDINGLY, in consideration of the promises and the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Definitions

Capitalized terms used but not defined herein have the respective meanings given to such terms in the Collateral Administration Agreement and the Collateral Management Agreement and, if not defined therein, in the Indenture.

2. Amendments

With effect from and including the Effective Date (as defined in Section 3):

(a) the Collateral Administration Agreement is hereby amended by deleting in its entirety the first whereas clause and replacing it with the following:

“WHEREAS, the Issuer intends to issue certain Class A Notes due 2016 (the “Class A Notes”) and certain Class A-R Notes due 2016 (the “Class A-R Notes” and, together with the Class A Notes, the “Notes”;”

(b) the Collateral Management Agreement is hereby amended as follows:

(i) the first paragraph of the recitals shall be deleted in its entirety and replaced with the following:

“The Issuer intends to issue certain Class A Notes due 2016 (the “Class A Notes”) and certain Class A-R Notes due 2016 (the “Class A-R Notes” and, together with the Class A Notes, the “Notes” pursuant to (a) the Amended and Restated Indenture, dated as of the date hereof (the “Indenture”), between the Issuer and State Street Bank and Trust Company, a Massachusetts trust company, as trustee (in such capacity, together with its permitted successors and assigns in the trusts under the Indenture, the “Trustee”), and, solely as expressly specified in the Indenture, in its individual capacity (the “Bank”); and (b) with respect to the Class-R Notes, the Revolving Credit Note Agreement, dated as of the date hereof (the “Revolving Credit Note Agreement”), between the Issuer, each entity party thereto as a Class A-R Noteholder, State Street Bank and Trust Company, as revolving credit note agent, and the Trustee; and (b) the Class A-R Placement Agency Agreement, dated as of the date hereof (the “Class A-R Placement Agency Agreement”), between the Issuer and UBS Securities LLC, as placement agent;”

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(ii) the phrase “and Class A-R Notes” shall be inserted immediately after each reference (other than in the first paragraph of the recitals) in the Collateral Management Agreement to “Class A Notes”, except that the phrase “or Class A-R Notes” shall be inserted immediately after the reference to “Class A Notes” in Section 10(b)(ii);

(iii) the phrase “, the Revolving Credit Note Agreement” shall be inserted immediately before the reference to “and the Indenture” in the fourth paragraph of the recitals;

(iv) the phrase “, the Revolving Credit Note Agreement” shall be inserted immediately after the reference to “the Indenture” in the first line of Section 2;

(v) the phrase “, the Revolving Credit Note Agreement” shall be inserted immediately before the reference to “and in the Indenture” in Section 2(a) and immediate after the reference to “under the Indenture” in Section 2(a);

(vi) the phrase “and the Revolving Credit Note Agreement” shall be inserted immediately after the reference to “the Indenture” in Section 2(d);

(vii) the phrase “, the Revolving Credit Note Agreement” shall be inserted immediately after the reference to “the Indenture” in Section 2(g);

(viii) the phrase “and the Revolving Credit Note Agreement” shall be inserted immediately after the reference to “the Indenture” in the tenth line of Section 5;

(ix) the phrase “and the Revolving Credit Note Agreement” shall be inserted immediately after the reference to “the Indenture” in the first sentence of Section 7, and immediately after each reference to “under the Indenture” in the second sentence of Section 7; and

(x) the phrase “and the Revolving Credit Note Agreement” shall be inserted immediately after each reference to “the Indenture” in Section 12(b).

3. Conditions Precedent to Effective Date

This Amendment Agreement shall become effective on and as of the date (the Effective Date) on which this Amendment Agreement shall have been duly executed and delivered by each party hereto.

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4. Representations and Warranties; Covenants; Other Agreements

(a) Representations and Warranties.

(i) Each party represents to the other party that each of the representations and warranties contained in the Agreement (including all representations set forth in the Credit Support Annex) is true and correct on and as of the Effective Date with the same force and effect as if made on and as of the Effective Date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(ii) Each party represents and warrants to the other party that this Amendment Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

(b) Further Assurance. From time to time, each of the parties hereto will promptly execute and deliver all such further instruments, certificates and documents, and take all such further actions as any one of them may deem to be necessary, advisable, convenient or proper to carry out the intent of this Amendment Agreement.

(c) Agreement Continuation.

(i) The Collateral Administration Agreement, as modified by this Amendment Agreement, shall continue in full force and effect, and nothing herein contained shall be construed as a waiver or modification of existing rights under the Collateral Administration Agreement, except as such rights are expressly modified hereby.

(ii) The Collateral Management Agreement, as modified by this Amendment Agreement, shall continue in full force and effect, and nothing herein contained shall be construed as a waiver or modification of existing rights under the Collateral Management Agreement, except as such rights are expressly modified hereby.

(d) Consent of the Trustee and each of the Holders. For the purposes of this Amendment Agreement: (i) each of the Holders, by executing and delivering a counterpart of this Amendment Agreement, hereby represents that it is the beneficial owner of Notes having an aggregate principal amount as indicated above its signature hereto; (ii) each of (A) the Trustee (at the direction of each of the Holders) and (B) each of the Holders, who together constitute the Majority Noteholders, by executing and delivering a counterpart of this Amendment Agreement, hereby provides its written consent to the execution of this Amendment Agreement by the Issuer and the Collateral Manager pursuant to Section 13 of the Collateral Management Agreement, and to the amendment of the Collateral Management Agreement in accordance with the terms of this Amendment Agreement.

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5. Miscellaneous

(a) Successors and Assigns. This Amendment Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No person or entity other than the parties hereto and their respective successors and permitted assigns shall have any rights under this Amendment Agreement.

(b) Entire Agreement. This Amendment Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings (except as otherwise provided herein) with respect thereto.

(c) Headings. The headings used in this Amendment Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Amendment Agreement.

(d) Governing Law. This Amendment Agreement shall be construed in accordance with, and this Amendment Agreement and any matters arising out of or relating in any way whatsoever to this Amendment Agreement (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

(e) Jurisdiction. With respect to any suit, action or proceedings relating to this Amendment Agreement or any matter between the parties arising under or in connection with this Amendment Agreement (Proceedings), each party irrevocably: (i) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Amendment Agreement precludes any party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(f) Waiver of Jury Trial Right. EACH PARTY 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 PROCEEDINGS. Each party hereby (a) certifies that no representative, agent or attorney of any other has represented, expressly or otherwise, that such other would not, in the event of a Proceeding, seek to enforce the foregoing waiver; and (b) acknowledges that it has been induced to enter into this Amendment Agreement by, among other things, the mutual waivers and certifications in this paragraph.

Page 5

(g) Counterparts. This Amendment Agreement (and each amendment, modification and waiver in respect of this Amendment Agreement) may be executed and delivered in any number of counterparts (including by e-mail (PDF) or facsimile), each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument, and each of the parties hereto may execute this Amendment Agreement by signing any such counterpart. Delivery of an executed counterpart of this Amendment Agreement by e-mail (PDF) or facsimile shall be deemed to constitute due and sufficient delivery of such counterpart.

(h) Severability. If any term, provision, covenant or condition of this Amendment Agreement, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Amendment Agreement, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Amendment Agreement, so long as this Amendment Agreement, as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Amendment Agreement, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed and delivered by their respective signatories thereunto duly authorized as of the date first written above.

CM FINANCE SPV LTD.,

as Issuer

By:

Name:

Title:

STATE STREET BANK AND TRUST COMPANY,

as Trustee and as Bank

By:

Name:

Title:

STATE STREET BANK AND TRUST COMPANY,

as Collateral Administrator

By:

Name:

Title:

CM INVESTMENT PARTNERS, L.P.,

as Collateral Manager

By:

Name:

Title:

Omnibus Amendment Agreement

UBS AG, LONDON BRANCH,
as Holder of Notes having an aggregate principal amount of U.S.$76,500,000
By:
Name:
Title:
By:
Name:
Title:
CM FINANCE LLC, as Holder of Notes having an aggregate principal amount of U.S.$73,500,000 and as Sole Shareholder
By:	CM Investment Partners, LP, as Manager
By:
Name:
Title:

Omnibus Amendment Agreement

EX-99.K.18

Exhibit (k) (18)

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of November [    ], 2013, by and among (i) CM Finance LLC, a Maryland limited liability company (“Private Fund”), (ii) CM Finance Inc, a Maryland corporation (the “Company”), (iii) Stifel Venture Corp. (“Stifel”), (iv) Cyrus Opportunities Master Fund II, Ltd., (v) Crescent 1, L.P., (vi) CRS Master Fund, L.P., and (vii) Cyrus Select Opportunities Master Fund, Ltd. (the forgoing (iv) through (vii), the “Cyrus Funds”) (each of Stifel and the Cyrus Funds an “Investor” and collectively, the “Investors”) and is effective upon consummation of the IPO (as defined below).

WHEREAS, the Cyrus Funds have purchased and/or committed capital to purchase an interest in the Private Fund as indicated in that certain Limited Liability Company Agreement of Private Fund;

WHEREAS, in connection with its initial public offering (the “IPO”), the Private Fund will merge with and into the Company, and the Cyrus Funds’ interests in the Private Fund will be exchanged for shares of common stock, par value $0.001 per share (the “Common Stock”), of the Company (the “CM Finance Merger”) as described in the Company’s registration statement on Form N-2, initially filed with the Commission on November 15, 2013 (SEC File No. 333-192370) (the “IPO Registration Statement”), as may be amended or supplemented from time to time; and

WHEREAS, Stifel has committed to purchase shares of Common Stock pursuant that certain Subscription Agreement executed by Stifel as of the date hereof (the “Subscription Agreement”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

(a) Agreement has the meaning set forth in the Introductory Paragraph of this Agreement.

(b) Affiliate means, as to any specified Person, (i) any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified Person, (ii) any executive officer, director, trustee, general partner, managing member or similar position of the specified Person or (iii) any legal entity for which the specified Person acts as an executive officer, director, trustee, general partner, managing member or similar position. For purposes of this definition, “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to

any Person, means the possession, directly, or indirectly through one or more intermediaries, of the power to direct or cause the direction of the management and policies of such Person, whether by contract, through the ownership of voting securities, partnership interests or other equity interests or otherwise.

(c) Business Day means, with respect to any act to be performed hereunder, each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New York are authorized or obligated by applicable law, regulation or executive order to close.

(d) CM Finance Merger has the meaning set forth in the Recitals of this Agreement.

(e) Company has the meaning set forth in the Introductory Paragraph of this Agreement.

(f) Commission means the U.S. Securities and Exchange Commission.

(g) Common Stock has the meaning set forth in the Recitals of this Agreement.

(h) Controlling Person has the meaning set forth in Section 8(a) of this Agreement.

(i) Cyrus Funds has the meeting set forth in the Introductory Paragraph of this Agreement.

(j) Cyrus Funds Shares means the Common Stock issued by the Company to the Cyrus Funds in exchange for their interests in the Private Fund in connection with the CM Finance Merger.

(k) Demanding Holder has the meaning in Section 2(a).

(l) Demand Notice has the meaning in Section 2(a).

(m) Demand Registration has the meaning in Section 2(a).

(n) End of Suspension Notice has the meaning set forth in Section 7(c) of this Agreement.

(o) Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission pursuant thereto.

(p) FINRA means the Financial Industry Regulatory Authority.

(q) Holder means each Investor that is a record owner of any Registrable Securities from time to time.

(r) IPO has the meaning set forth in the Recitals of this Agreement.

(s) IPO Registration Statement has the meaning set forth in the Recitals of this Agreement.

(t) Indemnified Party has the meaning set forth in Section 8(c) of this Agreement.

(u) Indemnifying Party has the meaning set forth in Section 8(c) of this Agreement.

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(v) Liabilities has the meaning set forth in Section 8(a) of this Agreement.

(w) Person means an individual, partnership, corporation, trust, unincorporated organization, government or agency or political subdivision thereof, or any other legal entity.

(x) Private Fund has the meaning set forth in the Introductory Paragraph of this Agreement.

(y) Prospectus means the prospectus included in any Registration Statement, including any preliminary prospectus, and all other amendments and supplements to any such prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference, if any, in such prospectus.

(z) Purchaser Indemnitee has the meaning set forth in Section 8(a) of this Agreement.

(aa) Registrable Securities means (i) the Shares and (ii) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event relating to the Shares; provided, however, that Registrable Securities shall not include any securities of the Company that have previously been registered and remain subject to a currently effective Registration Statement or which have been sold to the public either pursuant to a Registration Statement or Rule 144, or which may be sold immediately without registration under the Securities Act and without volume restrictions pursuant to Rule 144.

(bb) Registration Expenses means any and all expenses incident to the performance of or compliance with Sections 2, 3 and 6 of this Agreement, including, without limitation: (i) all Commission, securities exchange, FINRA filings, listing, inclusion and filing fees; (ii) any fees and expenses incurred in connection with compliance with federal or state securities or blue sky laws; (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, duplicating, printing, delivering and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements, certificates and any other documents relating to the performance under and compliance with this Agreement; (iv) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company (including, without limitation, the expenses of any special audit and “cold comfort” letters required by or incident to such performance), and reasonable fees and disbursements of one counsel for the selling Holders to review any Registration Statement; and (v) any fees and disbursements customarily paid in issues and sales of securities (including the fees and expenses of any experts retained by the Company in connection with any Registration Statement). For the avoidance of doubt, Registration Expenses shall exclude brokers’ or underwriters’ discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder and the fees and disbursements of any counsel to the Holders other than as provided for in subparagraph (iv) above.

(cc) Registration Statement means the Registration Statement or any other registration statement that covers the resale of any Registrable Securities, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement.

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(dd) Regulation D means Regulation D promulgated by the Commission pursuant to the Securities Act, as such regulation may be amended from time to time, or any similar regulation or rule hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such regulation.

(ee) Rule 144 means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.

(ff) Rule 158 means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.

(gg) Rule 415 means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.

(hh) Rule 497 means Rule 497 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.

(ii) Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

(jj) Shares mean the Stifel Shares and the Cyrus Funds Shares.

(kk) Stifel Shares means the shares of Common Stock issued to Stifel upon its contribution pursuant to the Subscription Agreement.

(ll) Stifel has the meaning set forth in the Introductory Paragraph of this Agreement.

(mm) Subscription Agreement has the meaning set forth in the Recitals to this Agreement

(nn) Suspension Event has the meaning set forth in Section 7(b) of this Agreement.

(oo) Suspension Notice has the meaning set forth in Section 7(c) of this Agreement.

(pp) Underwritten Offering means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.

2. Demand Registration.

(a) Right to Demand Registration. Commencing on the expiration of the lock-up period applicable to the Investors in connection with the IPO, each Holder shall have the right at any time to make a written request of the Company for registration with the Commission, under and in accordance with the provisions of the Securities Act, of all or part of its Registrable

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Securities (each a “Demand Registration” and the Holder, the “Demanding Holder”); provided, however, that (x) the Company need not effect a Demand Registration of less than $10 million of gross proceeds, and (y) the Company may defer such Demand Registration for a single period not to exceed 90 days during any one year period if the Company shall, within 10 Business Days of such receipt of such request, furnish to the Demanding Holder a certificate signed by the Chief Executive Officer, President or any other senior officer of the Company stating that the Company has pending or in process a material transaction, the disclosure of which would, in the good faith judgment of the Board of Directors of the Company, after consultation with its outside counsel, materially and adversely affect such transaction and that the filing of a registration statement would require disclosure of such material transaction. If the Company shall so defer the filing of a Registration Statement, the Demanding Holder shall have the right to withdraw the request for registration by giving written notice to the Company within 20 days of the anticipated termination date of the postponement period, as provided in such certificate delivered to the Demanding Holder, and in the event of such withdrawal, such request shall not be counted for purposes of the number of Demand Registrations to which such Holder is entitled pursuant to the terms herein. Within ten (10) days after receipt of the request for a Demand Registration, the Company will send written notice (the “Demand Notice”) of such registration request and its intention to comply therewith to all Holders and, subject to Section 2(c), the Company will include in such registration all the Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 Business Days after the date such Demand Notice is given. All requests made pursuant to this Section 2(a) will specify the aggregate number of Registrable Securities requested to be registered and will also specify the intended methods of disposition thereof. Upon receipt of a Demand Notice, the Company shall use its commercially reasonable efforts to file a registration statement registering for resale such number of Registrable Securities as requested to be so registered pursuant to this Section 2(a) within 60 days after the Demanding Holder’s request therefor and (ii) if necessary, to cause such registration statement to be declared effective by the Commission as soon as practical thereafter.

(b) Number of Demand Registrations.

(i) The Cyrus Funds shall be limited to four (4) Demand Registrations pursuant to this Section 2; provided, however, to the extent the Cyrus Funds include any of its Registrable Securities in a Demand Registration by Stifel or in a registration pursuant to Section 3, such Demand Registration or registration, as the case may be, shall reduce the number of Demand Registrations to which the Cyrus Funds’ are entitled.

(ii) Stifel shall be limited to four (4) Demand Registrations pursuant to this Section 2; provided, however, to the extent Stifel includes any of its Registrable Securities in a Demand Registration by the Cyrus Funds or in a registration pursuant to Section 3, such Demand Registration or registration, as the case may be, shall reduce the number of Demand Registrations to which the Stifel is entitled.

(iv) The Company shall not be required to cause a registration pursuant to Section 2(a) to be declared effective within a period of 90 days after the date any other Company registration statement was declared effective pursuant to a Demand Registration request or a filing of a Registration Statement for the Company’s own behalf. The Company shall not be required to cause a Demand Registration pursuant to Section 2(a) if the Company is not eligible to file a shelf registration statement on Form N-2 pursuant to Rule 415 (or such other form under the Securities Act then available to the Company providing for resale pursuant to Rule 415 from time to time).

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(c) Priority on Demand Registrations. If, in any Demand Registration, the managing underwriter or underwriters thereof (or, in the case of a Demand Registration not being underwritten, the Demanding Holder, after consultation with an investment banker of nationally recognized standing) advises the Company in writing that in its or their reasonable opinion the number of securities proposed to be sold in such Demand Registration exceeds the number that can be sold in such offering without having a material adverse effect on the success of the offering (including, without limitation, an impact on the selling price), then the Company will include in such registration only the number of securities that, in the reasonable opinion of such underwriter or underwriters (or the Demanding Holder, as the case may be), can be sold without having a material adverse effect on the success of the offering, as follows: first, the securities that the Holders (pro rata among all such Holders on the basis of the relative percentage of Registrable Securities owned by all Holders who have requested that securities owned by them be so included), propose to sell, and second, the securities of any additional holders of the Company’s securities eligible to participate in such offering, pro rata among all such persons on the basis of the relative percentage of such securities held by each of them. In the event that the managing underwriter (or, in the case of a Demand Registration not being underwritten, the Demanding Holder, after consultation with an investment banker of nationally recognized standing) determines that additional Registrable Securities may be sold in any Demand Registration without having a material adverse effect on the success of the offering, the Company may include comparable securities to be issued and sold by the Company or comparable securities held by persons other than the parties. In connection with any Demand Registration to which the provisions of this subsection (c) apply, such registration shall not reduce the number of available Demand Registrations under this Section 2 to the Cyrus Funds or Stifel in the event that the Registration Statement excludes more than 20% of the aggregate number of Registrable Securities requested to be included by the Cyrus Funds or Stifel, as applicable.

(d) Selection of Underwriters. If a Demand Registration is to be an underwritten offering, the Company will select a managing underwriter or underwriters of recognized national standing to administer the offering, subject to reasonable approval of the Demanding Holder.

3. Piggyback Registrations. If the Company at any time proposes to register under the Securities Act any of its securities, whether or not for sale for its own account and other than pursuant to a Demand Registration, on a form and in a manner which would permit registration of the Registrable Securities held by a Holder for sale to the public under the Securities Act, the Company shall give written notice of the proposed registration to each Holder not later than ten (10) days prior to the filing thereof. Each Holder shall have the right to request that all or any part of its Registrable Securities be included in such registration. Each Holder can make such a request by giving written notice to the Company within five (5) days after the receipt of such notice by the Holder; provided, however, that if the registration is an underwritten registration and the managing underwriters of such offering determine that the aggregate amount of securities of the Company which the Company and all Holders propose to include in such registration statement exceeds the maximum amount of securities that may be sold without having a material adverse effect on the success of the offering, including without limitation the selling price and other terms of such offering, the Company will include in such registration, first, the securities that the Company proposes to sell, second, the Registrable Securities of such Holders, pro rata among all such Holders on the basis of the relative percentage of Registrable Securities owned by all Holders who have requested that securities owned by them be so

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included (it being further agreed and understood, however, that such underwriters shall have the right to eliminate entirely the participation of the Holders), and third, the comparable securities of any additional holders of the Company’s securities, pro rata among all such holders on the basis of the relative percentage of such securities held by each of them. Registrable Securities proposed to be registered and sold pursuant to an underwritten offering for the account of any Holder shall be sold to the prospective underwriters selected or approved by the Company and on the terms and subject to the conditions of one or more underwriting agreements negotiated between the Company and the prospective underwriters. Any Holder who holds Registrable Securities being registered in any offering shall have the right to receive a copy of the form of underwriting agreement and shall have an opportunity to hold discussions with the lead underwriter of the terms of such underwriting agreement. The Company may withdraw any registration statement at any time before it becomes effective, or postpone or terminate the offering of securities, without obligation or liability to any Holder.

4. Expenses.

(a) The Company shall only pay Registration Expenses in connection with the registration of the Registrable Securities for up to two (2) registrations by the Cyrus Funds of the Registrable Securities pursuant to Section 2 and Section 3.

(b) The Company shall only pay Registration Expenses in connection with the registration of the Registrable Securities for up to two (2) registrations by Stifel of the Registrable Securities pursuant to Section 2 and Section 3.

(c) Each Holder participating in a registration pursuant to Section 2 or Section 3 shall bear such Holder’s proportionate share (based on the total number of Registrable Securities sold in such registration) of all discounts and commissions payable to underwriters or brokers and all transfer taxes in connection with a registration of Registrable Securities pursuant to this Agreement and any other expense of the Holders not specifically allocated to the Company pursuant to this Agreement relating to the sale or disposition of such Holder’s Registrable Securities pursuant to any Registration Statement.

5. Rules 144 and 144A Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Company agrees, so long as any Holder owns any Registrable Securities:

(a) at all times after the effective date of the IPO Registration Statement under the Securities Act, make and keep public information available, as those terms are understood and defined in Rule 144(c) under the Securities Act;

(b) file with the Commission in a timely manner all reports and other documents required to be filed by the Company under the Exchange Act (at any time after it has become subject to such reporting requirements);

(c) confirm to any Holder promptly upon request (i) that the Company has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the IPO Registration Statement), the Exchange Act (at any time after it has become subject to the reporting requirements of the Exchange Act), and (ii) provide such other information as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder to sell any such Registrable Securities without registration (provided that the Company shall not be required to provide any information that is publicly accessible to the Holder).

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6. Registration Procedures. In connection with the obligations of the Company with respect to any registration pursuant to this Agreement, and subject to Section 7 of this Agreement, the Company shall use its commercially reasonable efforts to effect or cause to be effected the registration of the Registrable Securities under the Securities Act to permit the resale of such Registrable Securities by the Holder or Holders in accordance with the Holders’ intended method or methods of resale and distribution and such commercially reasonable efforts shall include responding to any comments issued by the staff of the Commission with respect to any Registration Statement and filing any related amendment to such Registration Statement as soon as reasonably practicable after receipt of such comments. In addition, the Company shall:

(a) prepare and file with the Commission, as specified in Section 2(a) of this Agreement, a Registration Statement, which Registration Statement shall comply as to form with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith, and use its commercially reasonable efforts to cause such Registration Statement to become effective as soon as practicable after filing;

(b) (i) prepare and file with the Commission such amendments and supplements to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of 270 days and to comply with the provisions of the Securities Act with respect to the disposition of all securities registered pursuant to such Registration Statement during the period in which such registration statement remains effective in accordance with the intended method or methods of distribution by the selling Holders thereof;

(c) furnish to the Holders as many copies of the Registration Statement and each Prospectus included in such Registration Statement (including any documents incorporated by reference therein, unless such documents are otherwise available through the Commission’s EDGAR system), and any amendment or supplement thereto, in conformity with the requirements of the Securities Act;

(d) use its commercially reasonable efforts to register or qualify, or obtain exemption from registration or qualification for, such Registrable Securities covered by the Registration Statement by the time the Registration Statement is declared effective by the Commission under all applicable state securities or “blue sky” laws of such domestic jurisdictions as any Holder with securities covered by a Registration Statement shall reasonably request in writing, keep each such registration or qualification or exemption effective during the Effectiveness Period and do any and all other acts and things that may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction or to register as a broker or dealer in connection therewith, (ii) subject itself to taxation in any such jurisdiction, (iii) submit to the general service of process in any such jurisdiction or (iv) register as a foreign corporation in any such jurisdiction;

(e) notify each Holder with securities covered by a Registration Statement promptly (i) when such Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of the issuance by the Commission or any state securities authority of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose, (iii) of any request

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by the Commission or any other federal or state governmental authority for amendments or supplements to such Registration Statement or related Prospectus or for additional information and (iv) of the happening of any event during the period such Registration Statement is effective as a result of which such Registration Statement or the related Prospectus or any document incorporated by reference therein contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein (which, in the case of the Prospectus, shall be determined in light of the circumstances in which such Prospectus is to be used) not misleading (which information shall be accompanied by an instruction to suspend the use of the Registration Statement and the Prospectus until the requisite changes have been made);

(f) use its commercially reasonable efforts to avoid the issuance of, or if issued, to obtain the withdrawal of, any order enjoining or suspending the use or effectiveness of a Registration Statement or suspending of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as promptly as practicable;

(g) upon the occurrence of any event contemplated by Section 6(e)(iv) of this Agreement, use its commercially reasonable efforts to promptly prepare a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (which, in the case of the Prospectus, shall be determined in light of the circumstances in which such Prospectus is to be used) not misleading, and, upon request, promptly furnish to each requesting Holder a reasonable number of copies each such supplement or post-effective amendment;

(h) enter into customary agreements and take all other action in connection therewith in order to expedite or facilitate the distribution of the Registrable Securities included in a Registration Statement;

(i) in connection with an Underwritten Offering that includes Registrable Securities, use its commercially reasonable efforts to make available for inspection by representatives of the Holders of the Registrable Securities included in such Underwritten Offering and the representative of any underwriters participating in any disposition pursuant to a Registration Statement and any special counsel or accountants retained by such Holders or underwriters, all financial and other records, pertinent corporate documents and properties of the Company and cause the respective officers, directors and employees of the Company to supply all information reasonably requested by any such representatives, the representative of the underwriters, counsel thereto or accountants in connection with a Registration Statement;

(j) use its commercially reasonable efforts to qualify for, and list or include all Registrable Securities on, a national securities exchange or the Nasdaq Global Market (including, without limitation, seeking to cure in the listing or inclusion application of the Company any deficiencies cited by the exchange or market) on which the Common Stock is then listed or authorized for quotation if such Registrable Securities are not already so listed or authorized for quotation;

(k) (i) comply with all applicable rules and regulations of the Commission, (ii) make generally available to its security holders, as soon as reasonably practicable, earnings statements covering at least twelve (12) months that satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and

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(l) in connection with any sale or transfer of the Registrable Securities (whether or not pursuant to a Registration Statement) that will result in the security being delivered no longer being Registrable Securities, cooperate with the Holders and the representative of the underwriters, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold and to enable such Registrable Securities to be in such denominations and registered in such names as the representative of the underwriters, if any, or the Holders may request.

The Company may require the Holders to furnish to the Company such information regarding the proposed distribution by such Holder as the Company may from time to time reasonably request in writing or as shall be required to effect the registration of the Registrable Securities and no Holder shall be entitled to be named as a selling security holder in any Registration Statement and no Holder shall be entitled to use the Prospectus forming a part thereof if such Holder does not provide such information to the Company. Each Holder further agrees to furnish promptly to the Company in writing all information required from time to time to make the information previously furnished by such Holder not misleading.

Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 6(e)(iii) or 6(e)(iv) of this Agreement, such Holder will immediately discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus. If so directed by the Company, such Holder will deliver to the Company all copies in its possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice.

7. Suspension of Offering.

(a) Subject to the provisions of this Section 7, the Company shall have the right, but not the obligation, from time to time to suspend the use of any Registration Statement, following the effectiveness of such Registration Statement (and the filings with any federal or state securities commissions). The Company, by written notice to the Holders, may direct the Holders to suspend sales of the Registrable Securities pursuant to a Registration Statement for such times as the Company reasonably may determine is necessary and advisable if any of the following events occur:

(i) a primary Underwritten Offering by the Company where the Company is advised by the representative of the underwriters for such Underwritten Offering that the sale of Registrable Securities pursuant to the Registration Statement would have a material adverse effect on such primary Underwritten Offering;

(ii) a majority of the independent members of the Board of Directors of the Company shall have determined in good faith that (A) the offer or sale of any Registrable Securities pursuant to the Registration Statement would materially impede, delay or interfere with any proposed financing, offer or sale of securities, acquisition, merger, tender offer, business combination, corporate reorganization or other significant transaction involving the Company; (B) after the advice of counsel, the sale of the Registrable Securities pursuant to the Registration Statement would require the disclosure of non-public material information not otherwise required to be disclosed under applicable law; and (C) either (1) the Company has a bona fide business purpose for preserving confidentiality of the proposed transaction or information, (2) disclosure would have a material adverse effect on the Company or its ability to consummate the proposed transaction or (3) the proposed transaction renders the Company unable to

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comply with Commission requirements, in each case under circumstances that would make it unduly burdensome to cause the Registration Statement (or such filings) to become effective or to promptly amend or supplement the Registration Statement on a post-effective basis, as applicable; or

(iii) a majority of the independent members of the Board of Directors of the Company shall have determined in good faith, after the advice of counsel, that the Company is required by law, rule or regulation, or that it is in the best interests of the Company, to supplement the Registration Statement or file a post-effective amendment to the Registration Statement in order to incorporate information into the Registration Statement for the purpose of: (A) reflecting in the Prospectus included in the Registration Statement any facts or events arising after the effective date of the Registration Statement (or of the most-recent post-effective amendment) that, individually or in the aggregate, represents a fundamental change in the information set forth in the Prospectus; (B) including in the Prospectus included in the Registration Statement any material information with respect to the plan of distribution not disclosed in the Registration Statement or any material change to such information; or (C) to update the Prospectus included in the Registration Statement in accordance with Section 10(a)(3) of the Securities Act.

(b) In the event that the Company suspends sales of the Registrable Securities pursuant to clause (a) above (a “Suspension Event”), no such suspension shall last for more than an aggregate of ninety (90) days in any rolling twelve (12) month period commencing on the date of the expiration of the lock-up period in connection with the IPO or for more than an aggregate of sixty (60) days in any rolling ninety (90) day period, except as a result of a refusal by the Commission to declare any post-effective amendment to the Registration Statement effective provided that the Company shall have used all commercially reasonable efforts to cause such post-effective amendment to be declared effective, in which case the suspension shall be terminated immediately following the effective date of the post-effective amendment to the Registration Statement. Upon the occurrence of any such suspension, the Company shall use its commercially reasonable efforts to cause the Registration Statement to become effective or to promptly amend or supplement the Registration Statement on a post-effective basis or to take such action as is necessary to make resumed use of the Registration Statement, as applicable, so as to permit the Holders to resume sales of the Registrable Securities as soon as possible.

(c) Upon the occurrence of a Suspension Event, the Company shall give written notice (a “Suspension Notice”) to the Holders to suspend sales of the Registrable Securities pursuant to the Registration Statement and such notice shall state generally the basis for the notice and that such suspension shall continue only for so long as the Suspension Event or its effect is continuing and the Company is using its commercially reasonable efforts and taking all reasonable steps to terminate suspension of the use of the Registration Statement as promptly as possible. No Holder shall effect any sales of the Registrable Securities pursuant to such Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice (as defined below). Each Holder agrees to keep confidential the fact that the Company has issued a Suspension Notice and the contents thereof. If so directed by the Company, each Holder will deliver to the Company all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering the Registrable Securities at the time of receipt of the Suspension Notice. The Holders may recommence effecting sales of the Registrable Securities pursuant to the Registration Statement (or such filings) following further notice to such effect (an “End of Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the Company to the Holders in the manner described above promptly following the conclusion of any Suspension Event.

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8. Indemnification and Contribution.

(a) The Company agrees to indemnify and hold harmless (i) each Holder, (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act), any of the foregoing (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “Controlling Person”), and (iii) the respective officers, directors, partners, employees, representatives and agents of each Holder or any Controlling Person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as a “Purchaser Indemnitee”) from and against any and all losses, claims, damages, judgments, actions, reasonable out-of-pocket expenses, and other liabilities (the “Liabilities”), including, without limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing, pursuing or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of outside counsel to any Purchaser Indemnitee, joint or several, directly or indirectly related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus (as amended or supplemented if the Company shall have furnished to such Purchaser Indemnitee any amendments or supplements thereto), or any preliminary Prospectus or any other document prepared by the Company used to sell the Registrable Securities, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such Liabilities arise out of or are based upon (i) any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information relating to any Purchaser Indemnitee furnished to the Company or any underwriter in writing by such Purchaser Indemnitee expressly for use therein, or (ii) any untrue statement contained in or omission from a preliminary Prospectus if a copy of the Prospectus (as then amended or supplemented, if the Company shall have furnished to or on behalf of the Holder participating in the distribution relating to the relevant Registration Statement any amendments or supplements thereto) was not sent or given by or on behalf of such Holder to the Person asserting any such Liabilities who purchased Registrable Securities, if such Prospectus (or Prospectus as amended or supplemented) is required by law to be sent or given at or prior to the written confirmation of the sale of such Registrable Securities to such Person and the untrue statement contained in or omission from such preliminary Prospectus was corrected in the Prospectus (or the Prospectus as amended or supplemented). The Company shall notify the Holders promptly of the institution, threat or assertion of any claim, proceeding (including, without limitation, any investigation) or litigation in connection with the matters addressed by this Agreement which involves the Company or a Purchaser Indemnitee of which it shall become aware. The indemnity provided for herein shall remain in full force and effect regardless of any investigation made by or on behalf of any Purchaser Indemnitee.

(b) In connection with any Registration Statement in which a Holder is participating, such Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, each Person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act and the respective partners, directors, officers, members, representatives, employees and agents of such Person or Controlling Person to the same extent as the foregoing indemnity from the Company to each Purchaser Indemnitee, but only with reference to untrue statements or omissions or alleged untrue statements or omissions made in reliance upon and in strict conformity with written information relating to such Purchaser

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Indemnitee furnished to the Company in writing by such Purchaser Indemnitee expressly for use in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary Prospectus. The liability of any Purchaser Indemnitee pursuant to this paragraph shall in no event exceed the net proceeds received by such Purchaser Indemnitee from sales of Registrable Securities giving rise to such obligations. If the Holder elects to include Registrable Securities in an Underwritten Offering, the Holder shall be required to agree to such customary indemnification provisions as may reasonably be required by the underwriter in connection with such Underwritten Offering.

(c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to paragraph (a) or (b) above, such Person (the “Indemnified Party”), shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”), in writing of the commencement thereof (but the failure to so notify an Indemnifying Party shall not relieve it from any liability which it may have under this Section 8, except to the extent the Indemnifying Party is materially prejudiced by the failure to give notice), and the Indemnifying Party, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may reasonably designate in such proceeding and shall assume the defense of such proceeding and pay the reasonable fees and expenses actually incurred by such counsel related to such proceeding. Notwithstanding the foregoing, in any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party, unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed in writing to the contrary, (ii) the Indemnifying Party failed within a reasonable time after notice of commencement of the action to assume the defense and employ counsel reasonably satisfactory to the Indemnified Party, (iii) the Indemnifying Party and its counsel do not pursue in a reasonable manner the defense of such action or (iv) the named parties to any such action (including any impleaded parties), include both such Indemnified Party and the Indemnifying Party, or any affiliate of the Indemnifying Party, and such Indemnified Party shall have been reasonably advised by counsel that, either (x) there may be one or more legal defenses available to it which are different from or additional to those available to the Indemnifying Party or such affiliate of the Indemnifying Party or (y) a conflict may exist between such Indemnified Party and the Indemnifying Party or such affiliate of the Indemnifying Party, then the Indemnifying Party shall not have the right to assume nor direct the defense of such action on behalf of such Indemnified Party, it being understood, however, that the Indemnifying Party shall not, in connection with any one such action or separate but substantially similar or related actions arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one (1) separate firm of attorneys (in addition to any local counsel), for all such indemnified parties, which firm shall be designated in writing by those indemnified parties who sold a majority of the Registrable Securities sold by all such indemnified parties and any such separate firm for the Company, the directors, the officers and such control Persons of the Company as shall be designated in writing by the Company. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify any Indemnified Party from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such proceeding.

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(d) If the indemnification provided for in paragraphs (a) and (b) of this Section 8 is for any reason held to be unavailable to an Indemnified Party in respect of any Liabilities referred to therein (other than by reason of the exceptions provided therein) or is insufficient to hold harmless a party indemnified thereunder, then each Indemnifying Party under such paragraphs, in lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Liabilities (i) in such proportion as is appropriate to reflect the relative benefits of the Indemnified Party on the one hand and the Indemnifying Parties on the other in connection with the statements or omissions that resulted in such Liabilities, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Indemnifying Parties and the Indemnified Party, as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and any Purchaser Indemnitees, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by such Purchaser Indemnitees and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if such indemnified parties were treated as one entity for such purpose), or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8(d) above. The amount paid or payable by an Indemnified Party as a result of any Liabilities referred to Section 8(d) shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, in no event shall a Purchaser Indemnitee be required to contribute any amount in excess of the amount by which proceeds received by such Purchaser Indemnitee from sales of Registrable Securities exceeds the amount of any damages that such Purchaser Indemnitee has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. For purposes of this Section 8, each Person, if any, who controls (within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) a Holder shall have the same rights to contribution as such Holder, as the case may be, and each Person, if any, who controls (within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) the Company, and each officer, director, partner, employee, representative, agent or manager of the Company shall have the same rights to contribution as the Company. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 8 or otherwise, except to the extent that any party is materially prejudiced by the failure to give notice. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act), shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

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(f) The indemnity and contribution agreements contained in this Section 8 will be in addition to any liability which the indemnifying parties may otherwise have to the indemnified parties referred to above. The Purchaser Indemnitee’s obligations to contribute pursuant to this Section 8 are several in proportion to the respective number of Registrable Securities sold by each of the Purchaser Indemnitees hereunder and not joint.

9. Market Stand-off Agreement. Each Holder hereby agrees that it shall enter into a lock-up agreement, to the extent requested by the Company or an underwriter of securities of the Company, in which such Holder shall agree to not directly or indirectly sell, offer to sell (including, without limitation, any short sale), grant any option or otherwise transfer or dispose of any securities of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly bound) for a period of not more than [365] days following the effective date of the IPO Registration Statement. In order to enforce the foregoing covenant, the Company shall have the right to place restrictive legends on the certificates representing the securities subject to this Section 9 and to impose stop transfer instructions with respect to the Registrable Securities and such other securities of each Holder (and the securities of every other Person subject to the foregoing restriction) until the end of such period.

10. Miscellaneous.

(a) Remedies. In the event of a breach by the Company of any of its obligations under this Agreement, each Holder of Registrable Securities, in addition to being entitled to exercise all rights provided herein, or granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. Subject to Section 8, the Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions of this Agreement may not be given, without the written consent of the Company, the Investors and Holders beneficially owning not less than fifty percent (50%) of the then outstanding Registrable Securities; provided, however, that for purposes of this Agreement, Registrable Securities that are owned, directly or indirectly, by an Affiliate of the Company shall not be deemed to be outstanding. Notwithstanding the foregoing, a waiver or consent to or departure from the provisions of this Agreement with respect to a matter that relates exclusively to the rights of a Holder whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders may be given by such Holder; provided that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the immediately preceding sentence.

(c) Notices. All notices and other communications, provided for or permitted hereunder shall be made in writing by delivered by facsimile (with receipt confirmed), overnight courier or registered or certified mail, return receipt requested, or by telegram:

(i) if to the Company, at the offices of the Company at 399 Park Avenue, 39^th Floor, New York, New York, 10022, Attention: Michael C. Mauer (facsimile 212-257-5198); and

(ii) if to a Holder, at the most current address given by the Holder to the Company; and

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(d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto and shall inure to the benefit of each Holder, including, without limitation, any Person who purchases Registrable Securities from the foregoing.

(e) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of this Agreement.

(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE COURT IN THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(h) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties hereto that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(i) Entire Agreement. This Agreement, together with the Subscription Agreements, is intended by the parties hereto as a final expression of their agreement, and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein.

(j) Registrable Securities Held by the Company or its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

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(k) Survival. This Agreement is intended to survive the consummation of the transactions contemplated by the CM Finance Merger. The indemnification and contribution obligations under Section 8 of this Agreement shall survive the termination of the obligations of the Company under this Agreement.

(l) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the provisions of this Agreement. All references made in this Agreement to “Section” refer to such Section of this Agreement, unless expressly stated otherwise.

(m) No Third Party Beneficiaries. Except as set forth in Section 10(d), it is the explicit intention of the parties hereto that no person or entity other than the parties hereto is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, other than a person entitled to indemnity under Section 8 of this Agreement, and the covenants, undertakings and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto or their respective successors, heirs, executors, administrators, legal representatives and permitted assigns and, to the extent applicable, any person entitled to indemnity under Section 8 of this Agreement.

[Signature page follows]

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

CM FINANCE LLC
By:
	Name:	Michael C. Mauer
	Title:	Chief Executive Officer
CM FINANCE INC
By:
	Name:	Michael C. Mauer
	Title:	Chief Executive Officer
CYRUS OPPORTUNITIES MASTER FUND II, LTD.
CRESCENT 1, L.P.
CRS MASTER FUND, L.P.
CYRUS SELECT OPPORTUNITIES MASTER FUND, LTD.
By:	Cyrus Capital Partners, L.P., as investment manager
By:
	Name:
	Title:
STIFEL VENTURE CORP.
By:
	Name:
	Title:

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EX-99.K.19

Exhibit (k) (19)

STOCKHOLDER AGREEMENT

THIS STOCKHOLDER AGREEMENT is entered into as of November [    ], 2013 (this “Agreement”), by and among CM Finance Inc, a Maryland corporation (the “Company”), CM Finance LLC, a Maryland limited liability company (the “Private Fund”), CM Investment Partners, LP, a Delaware limited partnership (the “Old Adviser”), CM Investment Partners LLC, a Delaware limited liability company (the “New Adviser”), Stifel Venture Corp., a Missouri corporation (“Stifel”) and for purposes of Section 3 only, Stifel, Nicolaus & Company, Incorporated, and is effective as of the effective time of the Merger (as defined below).

WHEREAS, the Company has determined that it is in its best interests to effect an initial public offering (“IPO”) of shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”);

WHEREAS, the Private Fund and the Company have determined that it is in their best interests to effect a merger (the “Merger”) immediately prior to the IPO, such that the Company will be the surviving entity;

WHEREAS, Stifel has made a capital commitment to the Private Fund and the Company pursuant to that certain Subscription Agreement, dated as of November [    ], 2013 (the “Subscription Agreement”), pursuant to which Stifel may contribute up to $40,000,000 to the Company immediately following the Merger but prior to the Company’s election to be regulated as a business development company;

WHEREAS, in connection with the IPO, the Company and Stifel desire to enter into this Agreement setting forth certain rights and obligations with respect to the nomination of directors to the Board of Directors of the Company (the “Board”) and other matters relating to the Board from and after the IPO.

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

Section 1. Definitions. As used in this Agreement, the following terms shall have the meanings ascribed to them below:

“Adviser” means, (i) prior to the date of the advisory agreement between the New Adviser and the Company, the Old Adviser and (ii) from and after the date of the advisory agreement between the New Adviser and the Company, the New Adviser.

“Affiliate” means, with respect to any Person that is an entity, any other Person directly or indirectly controlling, controlled by or under common control with such Person. As used in this definition, the term “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

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“Articles of Incorporation” means the Articles of Amendment and Restatement of the Company, as may be amended from time to time.

“Bylaws” means the Bylaws of the Company, as may be amended from time to time.

“Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, Governmental Entity or other entity.

Section 2. Board Nomination.

(a) Upon completion of the Merger, the Company shall appoint the Stifel Nominee (as defined below) as a director to serve on the Board of Directors of the Company (the “Board”). Thereafter, for so long as Stifel holds ownership interests in the New Adviser (the “New Adviser Interests”) equal to at least 15% (except as provided in Section 2(h)) of the total ownership interests in the New Adviser (such time period, the “Stifel Nomination Period”), the Company shall nominate the Stifel Nominee to serve as a director as part of the Company’s slate of directors at each annual or special meeting of the stockholders (the “Stockholders”) of the Company (or, if permitted, by any action by written consent of the Stockholders) at or by which directors of the Company are to be elected during the Stifel Nomination Period, and recommend that the Stockholders vote to elect the Stifel Nominee at each such meeting or by such written consent. The “Stifel Nominee” means (1) Person designated in writing (the “Stifel Nominee Notice”) by Stifel to the Company in advance of the applicable meeting or written consent date. Stifel has initially designated Stephan Kuppenheimer as the Stifel Nominee.

(b) Subject to Section 2(f), vacancies arising through the death, resignation or removal of the Stifel Nominee who was elected or appointed to the Board pursuant to this Section 2, may be filled by the Board only with a Stifel Nominee, and the director so chosen shall hold office until the next election or until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal.

(c) Notwithstanding the provisions of this Section 2, Stifel shall not be entitled to designate a Person as a nominee to the Board if the Nominating and Corporate Governance Committee of the Company reasonably determines in writing (which determination shall set forth the reasonable grounds for such determination) that such Person would not be qualified under any applicable law, rule or regulation to serve as a director of the Company; provided, that in such event, Stifel shall be entitled to designate another Person as the Stifel Nominee and the provisions of Section 2 shall apply to such alternate Person. Only the Nominating and Corporate Governance Committee of the Company shall have the right to object to any Stifel Nominee.

(d) During the Stifel Nomination Period, the Company shall notify Stifel in writing of the date on which proxy materials are expected to be mailed by the Company in connection with an

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election of directors at an annual or special meeting of the Stockholders at least 45 days prior to such expected mailing date. Following receipt of such Company notice, Stifel shall deliver a Stifel Nominee Notice setting forth (i) the name and address of the Stifel Nominee and (ii) the information required for director nominees under Items 401, 403 and 404 of Regulation S-K under the federal securities laws. The Company shall provide Stifel with a reasonable opportunity to review and provide comments on any portion of the proxy materials relating to the Stifel Nominee and the rights and obligations provided under this Agreement and to discuss any such comments with the Company. The Company shall include Stifel’s reasonable comments in the proxy materials relating to such matters. The Company shall notify Stifel of any opposition to a Stifel Nominee sufficiently in advance of the date on which such proxy materials are to be mailed by the Company in connection with such election of directors so as to enable Stifel to propose a replacement Stifel Nominee, if necessary, in accordance with the terms of this Agreement.

(e) In the event the Stockholders fail to elect or consent to a Stifel Nominee in accordance with the preceding sentence, (i) Stifel shall designate another Person as the Stifel Nominee and the provisions of Section 2 shall apply to such alternate Person and (ii) the Company shall promptly appoint the Stifel Nominee to any such vacancy on the Board created by the Stockholders failure to elect or consent to a Stifel Nominee. For the avoidance of doubt, in no event shall the Company be required to nominate or appoint a Stifel Nominee to the Board of Directors of the Company if the Stockholders fail to elect or consent to such Stifel Nominee.

(f) In the event that Stifel ceases to have the right to designate a person to serve as a director pursuant to this Section 2, Stifel shall use its best efforts to cause the applicable Stifel Nominee to resign immediately.

(g) The Company agrees that at all times during the Stifel Nomination Period (i) subject to applicable legal requirements, the Bylaws and the Articles of Incorporation shall accommodate, be subject to, and shall not in any way conflict with, Stifel’s rights and obligations set forth herein and (ii) the Company shall not enter into any other agreements or understandings that in any way conflict with Stifel’s rights and obligations set forth herein. The Company further agrees that it shall not enter into any agreements or understandings with any Stockholders (other than agreements or understandings equally applicable to all Stockholders) without prior notice to Stifel; provided, that the Company shall provide to Stifel (x) substantially final copies of all documentation relating to such agreements or understandings no later than five (5) business days prior to the signing of such documentation and (y) fully executed copies of such documentation promptly following their execution.

(h) The Stifel Nomination Period shall not terminate in the event Stifel’s ownership of New Adviser Interests falls below 15% as a result of a transfer of New Adviser Interests made on a pro rata basis with all members of the New Adviser. In the event of such a pro rata transfer, the 15% threshold set forth the definition of “Stifel Nomination Period” shall be deemed reduced by a percentage equal to the percentage by which Stifel’s ownership of New Adviser Interests was reduced in such pro rata transfer (by way of example only, if all existing members transfer 10% of their New Adviser Interests to a third party, the 15% threshold shall become 13.5%).

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Section 3. Stifel Originated Opportunities.

(a) Stifel agrees to use its commercially reasonable efforts to offer to the Company all applicable (i.e., reasonably appropriate for the Company) leveraged finance and high yield corporate debt investment opportunities originated by Stifel, Nicolaus & Company, Incorporated (each a “Stifel Opportunity”) subject to the terms and conditions of this Section 3, and also subject to any other restrictions pursuant to applicable law (including any requirements that Stifel, Nicolaus & Company, Incorporated act in the best interests of its clients in connection with any Stifel Opportunity) or pursuant to restrictions in engagements with clients or Affiliates related to such Stifel Opportunity.

(b) Subject to the limitations in Section 3(a), Stifel, Nicolaus & Company, Incorporated shall provide notice (the “Opportunity Notice”) to the Company and the Adviser of each Stifel Opportunity setting forth: (i) any material terms and conditions of the Stifel Opportunity and (ii) the last date and time on which Stifel will accept bids for such Stifel Opportunity, which date and time may be adjusted from time to time by Stifel, Nicolaus & Company, Incorporated upon prior notice to the Company and the Adviser (the “End Date”). For the avoidance of doubt, Stifel, Nicolaus & Company, Incorporated agrees that unless otherwise mutually agreed to by the Company and Stifel, Nicolaus & Company, Incorporated, Stifel, Nicolaus & Company, Incorporated will not consummate the Stifel Opportunity prior to the End Date. If the Company submits a bid for the Stifel Opportunity (a “Company Bid”) prior to the End Date, Stifel, Nicolaus & Company, Incorporated shall use commercially reasonable efforts to accept the Company Bid; provided, however, that Stifel, Nicolaus & Company, Incorporated shall not be required to accept the Company Bid if: (x) the Company Bid was not received by Stifel, Nicolaus & Company, Incorporated on or prior to the End Date or (y) Stifel, Nicolaus & Company, Incorporated received bids from third parties with terms more favorable to the Stifel, Nicolaus & Company, Incorporated client, prior to the End Date, sufficient to fill the Stifel Opportunity.

(c) In the event that Stifel, Nicolaus & Company, Incorporated intends to accept the Company Bid pursuant to Section 3(b) above, Stifel, Nicolaus & Company, Incorporated shall use commercially reasonable efforts to allow the Company to consummate the Company Bid in an amount equal to the lesser of (x) 30% of the value of the Stifel Opportunity set forth in the Opportunity Notice and (y) 5% of the Pro Forma AUM of the Company on the End Date. For purposes of this Section 3(c), “Pro Forma AUM” means the assets under management as of the most recently completed fiscal quarter; provided, that, as of the date hereof, 5% of the Pro Forma AUM shall be deemed to equal $15,000,000, and 5% of the Pro Forma AUM shall at no time exceed $35,000,000.

(d) The provisions of this Section 3 shall apply for so long as Stifel holds New Adviser Interests equal to at least 15% of the total ownership interests in the New Adviser; provided, however, if Stifel unilaterally sells its New Adviser Interests, the provisions of this Section 3 shall continue to apply, unless Stifel sells 75% or more of its New Advisor Interests, in which case the provisions of this Section 3 shall cease to apply on the third anniversary of such sale. Any attempt by Stifel to transfer all or a portion of its New Advisor Interests that is not consummated because that sale was not approved by the Board of CM Investment Partners LLC will be deemed to have been sold by Stifel for purposes of this Section 3.

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Section 4. AUM and Performance.

Upon completion of the Merger and the contribution by Stifel pursuant to the Subscription Agreement, neither the Company nor the Adviser shall object to Stifel’s (a) inclusion of the performance results of the Company and all assets managed by the Adviser in any and all reports, publications, marketing materials, prospectuses, press releases, advertisements, webpages, conference materials or other oral or written communications, in each case in a manner that is consistent with applicable law or regulation or (b) description of the Company’s relationship with Stifel in any and all reports, publications, marketing materials, prospectuses, press releases, advertisements, webpages, conference materials or other oral or written communications, in each case, that the Adviser would have been entitled to so include or describe under applicable law or regulation. To this end, the Company agrees that Stifel shall have the right to access and retain copies of any records reasonably necessary to substantiate the foregoing. The aforementioned communications and written materials that include information pertaining to the Company and all assets managed by the Adviser shall be subject to the approval of the Adviser, but only to the extent necessary to ensure the satisfaction of regulatory requirements.

Section 5. Miscellaneous.

(a) Effective Date. This Agreement shall become effective upon the date that the Company’s registration statement on Form N-2 in connection with the IPO becomes effective.

(b) Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Maryland without regard to principles of conflict of laws.

(c) Certain Adjustments. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the shares of Common Stock, by combination, recapitalization, reclassification, merger, consolidation or otherwise and the term “Common Stock” shall include all such other securities.

(d) Enforcement. Each of the parties hereto acknowledges and agrees that irreparable injury to the other party hereto would occur in the event any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that such injury would not be adequately compensable in damages. It is accordingly agreed that Stifel, on the one hand, and the Company, on the other hand, shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof and the other party hereto will not take any action, directly or indirectly, in opposition to the party seeking relief on the grounds that any other remedy is available at law or in equity, and each party further agrees to waive any requirement for the security or posting of any bond in connection with such remedy. Such remedies, shall be cumulative and not exclusive, and shall be in addition to any other remedy which any party hereto may have.

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(e) Successors and Assigns. This Agreement may not be assigned, whether outright or by operation of law, by any party hereto without the prior written consent of the non-assigning party. Subject to the foregoing, this Agreement shall be binding upon the parties hereto, their heirs, executors, personal representatives, successors, and assigns.

(f) Entire Agreement; Termination. This Agreement contains the entire understanding among the parties hereto and supersedes all prior written or oral agreements among them respecting the within subject matter, unless otherwise provided herein. There are no representations, agreements, arrangements or understandings, oral or written, among the parties hereto relating to the subject matter of this Agreement that are not fully expressed herein. This Agreement may be terminated at any time by written consent of all of the parties hereto.

(g) Dispute Resolution. Any dispute, controversy or claim arising out of, or in connection with, this Agreement shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association then in effect. The arbitration shall be conducted on an expedited basis at a location to be determined by the parties by an independent arbitrator selected by the American Arbitration Association. The arbitration shall be subject to, and the arbitrator shall have the powers and rights afforded by, the rules of the American Arbitration Association. The decision of such arbitrator, including any award of attorneys’ fees and costs, may be entered in any court with jurisdiction.

(h) Notices. All notices and demands under this Agreement and other communications required to be delivered pursuant to this Agreement, shall be in writing or by facsimile, with a copy via email (which shall not constitute notice hereunder), and shall be deemed to have been duly given if delivered personally or by overnight courier or if mailed by certified mail, return receipt requested, postage prepaid, or sent by facsimile, to the following addresses (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

If to the Company:

CM Finance Inc

399 Park Avenue, 39^th Floor

New York, New York 10002

Attn: Michael C. Mauer

If to the New Adviser:

CM Investment Partners LLC

399 Park Avenue, 39^th Floor

New York, New York 10002

Attn: Michael C. Mauer

6

If to the Old Adviser:

CM Investment Partners, LP

399 Park Avenue, 39^th Floor

New York, New York 10002

Attn: Michael C. Mauer

If to Stifel:

Stifel Venture Corp.

237 Park Avenue, 8th Floor

New York, NY 10017

Attn: Stephan Kuppenheimer

All such notices shall be effective: (a) if delivered personally, when received (with written confirmation of receipt), (b) if sent by overnight courier, when receipted for, (c) if mailed, five (5) days after being mailed as described above and (d) upon transmission by facsimile if a customary confirmation of delivery is received during normal business hours and, if not, the next business day after confirmation of delivery is received.

(i) Waiver. No consent or waiver, express or implied, by any party to, or of any breach or default by another party in the performance of, this Agreement shall be construed as a consent to or waiver of any subsequent breach or default in the performance by such other party of the same or any other obligations hereunder.

(j) Counterparts. This Agreement may be executed in several counterparts, which shall be treated as originals for all purposes, and all counterparts so executed shall constitute one agreement, binding on all the parties hereto, notwithstanding that not all the parties are signatory to the original or the same counterpart. Any such counterpart shall be admissible into evidence as an original hereof against the Person who executed it.

(k) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein.

(l) Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

(m) Amendments and Waivers. The provisions of this Agreement may be modified or amended at any time and from time to time, and particular provisions of this Agreement may be waived or modified, with and only with an agreement or consent in writing signed by each of the parties hereto.

(n) Further Assistance. The parties hereto shall execute and deliver all documents, provide all information and take or refrain from all such action as may be necessary or appropriate to achieve the purposes of this Agreement.

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(o) No Third-Party Beneficiaries. This Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF this Agreement has been signed by each of the parties hereto, and shall be effective as of the date first above written.

CM FINANCE LLC
By CM Investment Partners, LP, its manager
By:	Cyrus Capital Partners GP, L.L.C., its general partner
By:
Name:	Stephen C. Freidheim
Title:	Manager
CM FINANCE INC
By:
Name:	Michael C. Mauer
Title:	Chief Executive Officer
CM INVESTMENT PARTNERS, LP
By Cyrus Capital Partners GP, L.L.C., its general partner
By:
Name:	Stephen C. Freidheim
Title:	Manager
CM INVESTMENT PARTNERS LLC
By MMCMIP LLC, its managing member
By:
Name:	Michael C. Mauer
Title:	Sole Member

[Signature Page to Stockholder Agreement]

Agreed and accepted as of the date first set forth above:

STIFEL VENTURE CORP.

By:

Name:

Title:

Agreed and accepted with respect to Section 3 only as of the date first set forth above:

STIFEL NICOLAUS & COMPANY, INCORPORATED

By:

Name:

Title:

[Signature Page to Stockholder Agreement]

EX-99.L.1

Exhibit (l)(1)

[Letterhead of Sutherland Asbill & Brennan LLP]

                    , 2013

CM Finance Inc

399 Park Avenue, 39^th Floor

New York, New York 10022

Re: CM Finance Inc

Registration Statement on Form N-2

Ladies and Gentlemen:

We have acted as counsel to CM Finance Inc, a Maryland corporation (the “Company”), in connection with the preparation and filing by the Company with the Securities and Exchange Commission (the “Commission”) of a registration statement on Form N-2 (as amended from time to time, the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the offer, issuance and sale of up to $115,000,000 of shares (the “Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”), together with any additional Shares that may be issued by the Company pursuant to Rule 462(b) under the Securities Act (as prescribed by the Commission pursuant to the Securities Act) in connection with the offering described in the Registration Statement.

As counsel to the Company, we have participated in the preparation of the Registration Statement and have examined the originals or copies, certified or otherwise identified to our satisfaction as being true copies, of the following:

(i) The Articles of Incorporation of the Company, certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the “SDAT”);

(ii) The form of Articles of Amendment and Restatement of the Company to be filed with the SDAT prior to the issuance of the Shares (the “New Charter”), certified as of the date hereof by an officer of the Company;

(iii) The Bylaws of the Company, certified as of the date hereof by an officer of the Company;

(iv) A Certificate of Good Standing with respect to the Company issued by SDAT as of a recent date (the “Certificate of Good Standing”); and

(v) The resolutions of the board of directors (the “Board”) of the Company relating to, among other things, (a) the authorization and approval of the preparation and filing of the Registration Statement, and (b) the authorization, issuance, offer and sale of the Shares pursuant to the Registration Statement, certified as of the date hereof by an officer of the Company (collectively, the “Resolutions”).

Exhibit (l)(1)

With respect to such examination and our opinion expressed herein, we have assumed, without any independent investigation or verification, (i) the genuineness of all signatures on all documents submitted to us for examination, (ii) the legal capacity of all natural persons, (iii) the authenticity of all documents submitted to us as originals, (iv) the conformity to original documents of all documents submitted to us as conformed or reproduced copies and the authenticity of the originals of such copied documents, (v) that all certificates issued by public officials have been properly issued, and (vi) the form and content of all documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion letter from the form and content of such documents as executed and delivered. We also have assumed without independent investigation or verification the accuracy and completeness of all corporate records made available to us by the Company.

Where factual matters material to this opinion letter were not independently established, we have relied upon certificates of public officials (which we have assumed remain accurate as of the date of this opinion), upon certificates and/or representations of officers and employees of the Company, upon such other certificates as we deemed appropriate, and upon such other data as we have deemed to be appropriate under the circumstances. Except as otherwise stated herein, we have undertaken no independent investigation or verification of factual matters.

The opinions set forth below are limited to the effect of the Maryland General Corporation Law, as in effect on the date hereof, and we express no opinion as to the applicability or effect of any other laws of such jurisdiction or the laws of any other jurisdictions. Without limiting the preceding sentence, we express no opinion as to any state securities or broker-dealer laws or regulations thereunder relating to the offer, issuance and sale of the Shares pursuant to the Registration Statement. This opinion letter has been prepared, and should be interpreted, in accordance with customary practice followed in the preparation of opinion letters by lawyers who regularly give, and such customary practice followed by lawyers who on behalf of their clients regularly advise opinion recipients regarding, opinion letters of this kind.

On the basis of and subject to the foregoing, and in reliance thereon, and subject to the limitations and qualifications set forth in this opinion letter, and assuming that (i) prior to the issuance of the Shares, the New Charter will have been filed with, and accepted for record by, the SDAT; (ii) the Board or a duly authorized committee thereof will approve the final terms and conditions of the issuance, offer and sale of the Shares, including those relating to price and amount of Shares to be issued, offered and sold, in accordance with the Resolutions; (iii) the Shares have been delivered to, and the agreed consideration has been fully paid at the time of such delivery by, the purchasers thereof; (iv) upon the issuance of any Shares pursuant to the Registration Statement, the total number of shares of Common Stock issued and outstanding does not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the New Charter; and (v) the Certificate of Good Standing remains accurate, the Resolutions remain in effect, without amendment, and the Registration Statement has become effective under the Securities Act and remains effective at the time of the issuance, offer and sale of the Shares, we are of the opinion that the Shares have been duly authorized and, when issued and paid for in accordance with the Registration Statement, will be validly issued, fully paid and nonassessable.

Exhibit (l)(1)

The opinions expressed in this opinion letter (i) are strictly limited to the matters stated in this opinion letter, and without limiting the foregoing, no other opinions are to be implied and (ii) are only as of the date of this opinion letter, and we are under no obligation, and do not undertake, to advise the addressee of this opinion letter or any other person or entity either of any change of law or fact that occurs, or of any fact that comes to our attention, after the date of this opinion letter, even though such change or such fact may affect the legal analysis or a legal conclusion in this opinion letter.

We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement or any registration statement filed by the Company under the Securities Act pursuant to Rule 462(b) thereunder as described in the first paragraph of this opinion letter. We do not admit by giving this consent that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules or regulations thereunder.

Respectfully submitted,

/s/ SUTHERLAND ASBILL & BRENNAN LLP

EX-99.N.1

Exhibit (n) (1)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the reference to our firm under the captions “Independent Registered Public Accounting Firm” and “Senior Securities” and to the use of our report dated September 4, 2013 with respect to the consolidated financial statements of CM Finance, LLC and subsidiary in this Pre-Effective Amendment No. 1 to the Registration Statement (Form N-2 No. 333-192370) and related Prospectus of CM Finance Inc.

We also consent to the incorporation by reference herein of our report dated November 15, 2013 with respect to the senior securities table included in the Initial Registration Statement dated November 15, 2013 filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

New York, New York

December 20, 2013