On June 2, 2015, the Company entered into the administration agreement with the Administrator, as amended and restated on February 1, 2020 (the “Administration Agreement”). Under the terms of the Administration Agreement, the Administrator provides administrative services to the Company. These services include providing office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing the payment of expenses and the performance of administrative and professional services rendered by others. Certain of these services are reimbursable to the Administrator under the terms of the Administration Agreement. In addition, the Administrator is permitted to delegate its duties under the Administration Agreement to affiliates or third parties. To the extent the Administrator outsources any of its functions, the Company will pay the fees associated with such functions on a direct basis, without incremental profit to the Administrator. The Administration Agreement may be terminated by either party without penalty on 60 days’ written notice to the other party.

For the years ended December 31, 2022, 2021 and 2020, the Company incurred administrative services expenses of $1,316, $1,028 and $819, respectively, which are included in other general and administrative expenses on the Consolidated Statements of Operations. As of December 31, 2022 and December 31, 2021, $511 and $354, respectively, was payable to the Administrator. In addition to administrative services expenses, the payable balances may include other operating expenses paid by the Administrator on behalf of the Company.

No person who is an officer, director or employee of the Administrator or its affiliates and who serves as a director of the Company receives any compensation from the Company for his or her services as a director. However, the Company reimburses the Administrator (or its affiliates) for an allocable portion of the compensation paid by the Administrator or its affiliates to the Company’s accounting professionals, legal counsel, and compliance professionals who spend time on such related activities (based on the percentage of time those individuals devote, on an estimated basis, to the business and affairs of the Company). The allocable portion of the compensation for these officers and other professionals are included in the administration expenses paid to the Administrator. Directors who are not affiliated with the Administrator or its affiliates receive compensation for their services and reimbursement of expenses incurred to attend meetings, which are included as directors’ fees on the Consolidated Statements of Operations.

On June 2, 2015, the Company entered into an investment advisory agreement with the Adviser which was most recently amended and restated on January 5, 2021 (the “Investment Advisory Agreement”). Under the terms of the Investment Advisory Agreement, the Adviser provides investment advisory services to the Company and its portfolio investments. The Adviser’s services under the Investment Advisory Agreement are not exclusive, and the Adviser is free to furnish similar or other services to others so long as its services to the Company are not impaired. Under the terms of the Investment Advisory Agreement, the Adviser is entitled to receive a base management fee and may also receive incentive fees, as discussed below.

The base management fee is calculated and payable quarterly in arrears at an annual rate of 1.25% of the Company’s gross assets, including assets acquired through the incurrence of debt but excluding any cash, cash equivalents and restricted cash. The base management fee is calculated based on the average value of gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. For purposes of the Investment Advisory Agreement, cash equivalents means U.S. government securities and commercial paper maturing within one year of purchase.

Under the terms of the Investment Advisory Agreement, the Adviser agreed to waive a portion of the management fee from February 1, 2020 through July 31, 2021 after the closing of the Alcentra Acquisition so that only 0.75% was charged for such time period. The Adviser has also voluntarily waived its right to receive management fees on the Company’s investments in GACP II LP and WhiteHawk III Onshore Fund LP for any period in which these investments remain in the investment portfolio.

Prior to February 1, 2020, the base management fee was calculated and payable quarterly in arrears at an annual rate of 1.50% of the Company’s gross assets, including assets acquired through the incurrence of debt but excluding any cash and cash equivalents. The Adviser agreed to waive its right to receive management fees in excess of the sum of (i) 0.25% of the aggregate committed but undrawn capital and (ii) 0.75% of the aggregate gross assets excluding cash and cash equivalents during the period prior to February 3, 2020, the date of the Company’s qualified initial public offering.

For the years ended December 31, 2022, 2021 and 2020, the Company incurred management fees of $16,344, $14,118 and $11,438, of which $229, $3,302 and $4,672, respectively, were waived. As of December 31, 2022 and 2021, management fees of $4,056 and $3,830, respectively, were unpaid.

Incentive Fee per Investment Advisory Agreement

Under the Investment Advisory Agreement, the incentive fee consists of two parts:

The first part, the income incentive fee, is calculated and payable quarterly in arrears and (a) equals 100% of the excess of the pre-incentive fee net investment income for the immediately preceding calendar quarter, over a preferred return of 1.75% (1.50% prior to February 1, 2020) per quarter (7.0% annualized or 6.0% annualized prior to February 1, 2020) (the “Hurdle”), and a catch-up feature until the Adviser has received 17.5% (15.0% prior to February 1, 2020) of the pre-incentive fee net investment income for the current quarter up to 2.1212% (1.7647% prior to February 1, 2020) (the “Catch-up”), and (b) 17.5% (15.0% prior to February 1, 2020) of all remaining pre-incentive fee net investment income above the “Catch-up.”

The second part, the capital gains incentive fee, is determined and payable in arrears as of the end of each fiscal year at a rate of 17.5% of the Company’s realized capital gains, if any, on a cumulative basis from the Company’s inception through the end of the fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. In the event that the Investment Advisory Agreement shall terminate as of a date that is not a fiscal year end, the termination date shall be treated as though it were a fiscal year end for purposes of calculating and paying a capital gains incentive fee.

Under the terms of the Investment Advisory Agreement, the Adviser agreed to waive the income based portion of the incentive fee from February 1, 2020 through July 31, 2021. The income and capital gains incentive fees were previously waived from April 1, 2018 through February 1, 2020. Additionally, on February 22, 2021, the Adviser notified the Board of Directors of its intent to voluntarily waive income incentive fees to the extent net investment income, excluding the effect of the GAAP incentive fee, falls short of the regular declared dividend on a full dollar basis. The waiver became effective on July 31, 2021 and, pursuant to an extension of the waiver announced on October 4, 2022, will continue through December 31, 2023. The Adviser has also voluntarily waived its right to receive the income incentive fees attributable to the investment income accrued by the Company as a result of its investments in GACP II LP and WhiteHawk III Onshore Fund LP.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during each calendar quarter, minus operating expenses for such quarter (including the base management fee, expenses payable under the Administration Agreement and any interest expense and distributions paid on any issued and outstanding debt or preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as market discount, original issue discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income will be compared to a “Hurdle Amount” equal to the product of (i) the Hurdle rate of 1.75% per quarter, or 7.0% annualized (1.50% per quarter and 6.0% annualized prior to February 1, 2020), and (ii) our net assets (defined as total assets less indebtedness, before taking into account any incentive fees payable during the period), at the end of the immediately preceding calendar quarter, subject to a “catch-up” provision incurred at the end of each calendar quarter.

For the years ended December 31, 2022, 2021 and 2020, the Company incurred income incentive fees of $11,214, $9,849 and $8,639, of which $538, $7,517 and $8,639, respectively, were waived. As of December 31, 2022 and 2021, income incentive fees of $3,112 and $600, respectively, were unpaid.

The Company accrues, but does not pay, a portion of the incentive fee based on capital gains with respect to net unrealized appreciation. Under GAAP, the Company is required to accrue an incentive fee based on capital gains that includes net realized capital gains and losses and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the accrual for the incentive fee based on capital gains, the Company considers the cumulative aggregate unrealized capital appreciation in the calculation, since an incentive fee based on capital gains would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee payable under the Investment Advisory Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and aggregate cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then the Company records a capital gains incentive fee equal to 17.5% (15% prior to February 1, 2020) of such amount, minus the aggregate amount of actual incentive fees based on capital gains paid in all prior periods. If such amount is negative, then there is no accrual for such period. There can be no assurance that such unrealized capital appreciation will be realized in the future.

For the years ended December 31, 2022, 2021 and 2020, the Company recorded a (reversal) accrual of capital gains incentive fees on unrealized capital appreciation of $(6,324), $6,324 and $0, respectively. As of December 31, 2022 and 2021, capital gains incentive fees of $0 and $6,324, respectively, were accrued and unpaid.

From time to time, the Administrator may pay amounts owed by the Company to third-party providers of goods or services, including the Board, and the Company will subsequently reimburse the Administrator for such amounts paid on its behalf. Amounts payable to the Administrator are settled in the normal course of business without formal payment terms.

A portion of the outstanding shares of the Company’s common stock is owned by Crescent, its employees and certain officers and directors of the Company. As of December 31, 2022 and 2021, Crescent, its employees and certain officers and directors of the Company owned 3.10% and 2.95%, respectively, of the Company’s outstanding common stock. Crescent is also the majority member of the Adviser and sole member of the Administrator. The Company has entered into a license agreement with Crescent under which Crescent granted the Company a non-exclusive, royalty-free license to use the name “Crescent Capital”. The Adviser has entered into a resource sharing agreement with Crescent. Crescent will provide the Adviser with the resources necessary for the Adviser to fulfill its obligations under the Investment Advisory Agreement.

On January 5, 2021, Sun Life acquired a majority interest in Crescent. Consummation of the Sun Life Transaction resulted in a change of control of Crescent. There were no changes to the Company’s investment objective, strategies and process or to the Crescent team responsible for the investment operations of the Company as a result of the Sun Life Transaction. As of December 31 2022 and 2021, Sun Life owned 3.49% and 2.15%, respectively, of the Company’s outstanding common stock. Sun Life is the sole lender of the Company’s 2023 Unsecured Notes and a $10,000 participating lender in the Company’s 2026 Unsecured Notes, both described further in Note 6.

In connection with the November 18, 2021 common equity offering totaling $58,018, the Adviser provided transaction support of $5,386, which is reflective of the difference between the actual public offering price and the net proceeds per share received by the Company in this offering and represents payments to the underwriters. In addition, the Adviser paid the sales load payable to the underwriters totaling $2,105. The Company is not obligated to repay the transaction support and sales load paid by the Adviser.

Under the 1940 Act, the Company is required to separately identify non-controlled investments where it owns 5% or more of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “affiliated” companies. In addition, under the 1940 Act, the Company is required to separately identify investments where it owns more than 25% of a portfolio company’s outstanding voting securities and/or has the power to exercise control over the management or policies of such portfolio company as investments in “controlled” companies. Detailed information with respect to the Company’s non-controlled, non-affiliated; non-controlled, affiliated; and controlled affiliated investments is contained in the accompanying consolidated financial statements, including the Consolidated Schedule of Investments and the summary tables below.

The Company’s investments in non-controlled affiliates for the year ended December 31, 2022 were as follows (in thousands):


	Fair Value as of December 31, 2021		Gross Additions (2)		Gross Reductions (3)			Net Realized Gains/ (Losses)		Change in Unrealized Gains/ (Losses)			Fair Value as of December 31, 2022		Dividend, Interest, PIK and Other Income
Non-Controlled Affiliates
AX VI INV2 Holding AB	$	—	$	11,436	$	—		$	—	$	681		$	12,117	$	321
ASP MCS Acquisition		1,616		263		(3	)		—		(1,050	)		826		28
Battery Solutions, Inc.		7,031		2,129		(14,712	)		7,098		(1,546	)		—		2,113
GACP II, LP		12,619		—		(7,804	)		—		74			4,889		1,593
Slickdeals Holdings, LLC		15,847		93		(148	)		—		(359	)		15,433		1,268
Southern Technical Institute, Inc.		7,686		—		—			—		(7,686	)		—		2,932
Vivid Seats Ltd.		922		—		—			—		22			944		—
WhiteHawk III Onshore Fund L.P.		5,980		4,710		(2,265	)		—		446			8,871		645
Total Non-Controlled Affiliates	$	51,701	$	18,631	$	(24,932	)	$	7,098	$	(9,418	)	$	43,080	$	8,900

The Company’s investments in non-controlled affiliates for the year ended December 31, 2021 were as follows (in thousands):


	Fair Value as of December 31, 2020		Gross Additions (2)		Gross Reductions (3)			Net Realized Gains/ (Losses)		Change in Unrealized Gains/ (Losses)			Fair Value as of December 31, 2021		Dividend, Interest, PIK and Other Income
Non-Controlled Affiliates
ASP MCS Acquisition	$	1,793	$	3	$	(3	)		—	$	(177	)	$	1,616	$	25
Battery Solutions, Inc.		3,565		567		—			—		2,899			7,031		230
Conisus, LLC		22,865		1,026		(38,628	)		27,440		(12,703	)		—		1,026
GACP II, LP(1)		16,154		—		(3,332	)		—		(203	)		12,619		1,373
Slickdeals Holdings, LLC		16,010		88		(381	)		72		58			15,847		1,127
Southern Technical Institute, Inc.		7,253		—		—			—		433			7,686		1,041
Vivid Seats Ltd.		3,714		—		(3,190	)		1,298		(900	)		922		—
WhiteHawk III Onshore Fund L.P.		—		5,851		—			—		129			5,980		—
Total Non-Controlled Affiliates	$	71,354	$	7,535	$	(45,534	)	$	28,810	$	(10,464	)	$	51,701	$	4,822

(1)

Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the presentation of the current period financial statements. The Company’s investment in GACP II, LP and the related income generated by it were reclassified from non-controlled non-affiliated to non-controlled affiliated investment for the prior periods presented in the consolidated financial statements.

(2)

Gross additions may include increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.

(3)

Gross reductions may include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.

The Company’s investments in controlled affiliates for the year ended December 31, 2022 were as follows (in thousands):


	Fair Value as of December 31, 2021		Gross Additions (2)		Gross Reductions (3)			Net Realized Gains/ (Losses)			Change in Unrealized Gains/ (Losses)			Fair Value as of December 31, 2022		Dividend, Interest, PIK and Other Income
Controlled Affiliates
CBDC Senior Loan Fund LLC(1)	$	39,360	$	—	$	(36,699	)		(3,301	)	$	640		$	—	$	2,358
Envocore LLC		13,408		1,999		(1,793	)		—			(2,239	)		11,375		1,477
Total Controlled Affiliates	$	52,768	$	1,999	$	(38,492	)	$	(3,301	)	$	(1,600	)	$	11,375	$	3,835

The Company’s investments in controlled affiliates for the year ended December 31, 2021 were as follows (in thousands):


	Fair Value as of December 31, 2020		Gross Additions (2)		Gross Reductions (3)		Net Realized Gains/ (Losses)		Change in Unrealized Gains/ (Losses)			Fair Value as of December 31, 2021		Dividend, Interest, PIK and Other Income
Controlled Affiliates
CBDC Senior Loan Fund LLC(1)	$	38,735	$	—	$	—	$	—	$	625		$	39,360	$	3,200
Envocore LLC		-		13,431		—		—		(23	)		13,408		2
Total Controlled Affiliates	$	38,735	$	13,431	$	—	$	—	$	602		$	52,768	$	3,202

(1)

Prior to the Senior Loan Fund's dissolution during the fourth quarter of 2022, the Company owned more than 25% of the voting securities of the Senior Loan Fund, but the Company did not have control over the Senior Loan Fund (other than for purposes of the 1940 Act) given the shared power/voting rights with its investing partner. Additionally, the Company’s investment strategy focuses on middle market lending in senior secured first lien, second lien and equity investments, while the Senior Loan Fund focused on senior secured broadly syndicated loans.

(2)

(3)