SEC Filing | Carlyle Secured Lending

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csl-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2023


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

For the transition period to

Commission File No. 814-00995

Carlyle Secured Lending, Inc.

(Exact name of Registrant as specified in its charter)


Maryland						80-0789789
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

One Vanderbilt Avenue, Suite 3400, New York, NY 10017						(212) 813-4900
(Address of principal executive office) (Zip Code)						(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common stock, $0.01 par value	CGBD	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer

☒

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding at August 7, 2023 was 50,794,941.

Carlyle Secured Lending, Inc.

INDEX



Part I.	Financial Information
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of June 30, 2023 (unaudited) and December 31, 2022	3
	Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 (unaudited)	4
	Consolidated Statements of Changes in Net Assets for the six months ended June 30, 2023 and 2022 (unaudited)	6
	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudited)	7
	Consolidated Schedules of Investments as of June 30, 2023 (unaudited) and December 31, 2022	8
	Notes to Consolidated Financial Statements (unaudited)	37
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	79
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	98
Item 4.	Controls and Procedures	99
Part II.	Other Information
Item 1.	Legal Proceedings	100
Item 1A.	Risk Factors	100
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	100
Item 3.	Defaults Upon Senior Securities	100
Item 4.	Mine Safety Disclosures	101
Item 5.	Other Information	101
Item 6.	Exhibits	101
	Signatures	102

CARLYLE SECURED LENDING, INC.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(dollar amounts in thousands, except per share data)


	June 30, 2023		December 31, 2022
ASSETS	(unaudited)
Investments, at fair value
Investments—non-controlled/non-affiliated, at fair value (amortized cost of $1,646,416 and $1,734,252, respectively)	$	1,588,732	$	1,671,488
Investments—non-controlled/affiliated, at fair value (amortized cost of $45,631 and $44,626, respectively)	51,668		45,367
Investments—controlled/affiliated, at fair value (amortized cost of $271,097 and $271,097, respectively)	256,020		263,022
Total investments, at fair value (amortized cost of $1,963,144 and $2,049,975, respectively)	1,896,420		1,979,877
Cash, cash equivalents and restricted cash	54,150		30,506
Receivable for investments sold	1,396		1,528
Interest and dividend receivable	24,703		24,023
Prepaid expenses and other assets	5,928		5,763
Total assets	$	1,982,597	$	2,041,697
LIABILITIES
Debt and Secured Borrowings, net of unamortized debt issuance costs of $2,256 and $2,449, respectively (Note 7)	$	1,037,185	$	1,077,192
Payable for investments purchased	—		287

Interest and credit facility fees payable (Note 7)	7,097		6,749
Dividend payable (Note 9)	22,320		22,446
Base management and incentive fees payable (Note 4)	12,804		12,681
Administrative service fees payable (Note 4)	1,439		1,711
Other accrued expenses and liabilities	2,071		3,208
Total liabilities	1,082,916		1,124,274
Commitments and contingencies (Notes 8 and 11)
EQUITY
NET ASSETS
Cumulative convertible preferred stock, $0.01 par value; 2,000,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022	50,000		50,000
Common stock, $0.01 par value; 198,000,000 shares authorized; 50,794,941 and 51,060,136 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	508		511
Paid-in capital in excess of par value	1,018,234		1,022,224
Offering costs	(1,633)		(1,633)
Total distributable earnings (loss)	(167,428)		(153,679)
Total net assets	$	899,681	$	917,423
NET ASSETS PER COMMON SHARE	$	16.73	$	16.99

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE SECURED LENDING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollar amounts in thousands, except per share data) (unaudited)


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Investment income:
From non-controlled/non-affiliated investments:
Interest income	$	44,660	$	31,634	$	87,914	$	61,741
PIK income	4,495		3,728		8,683		7,449
Other income	917		1,632		1,878		3,594
Total investment income from non-controlled/non-affiliated investments	50,072		36,994		98,475		72,784
From non-controlled/affiliated investments:
Interest income	1,494		48		3,188		96
PIK income	221		—		221		—
Other income	2		2		4		4
Total investment income from non-controlled/affiliated investments	1,717		50		3,413		100
From controlled/affiliated investments:
Interest income	—		—		—		3,873
Dividend income	8,276		7,524		16,552		15,048
Other income	—		—		—		272
Total investment income from controlled/affiliated investments	8,276		7,524		16,552		19,193
Total investment income	60,065		44,568		118,440		92,077
Expenses:
Base management fees (Note 4)	7,185		7,113		14,421		14,163
Incentive fees (Note 4)	5,593		4,458		11,065		9,686
Professional fees	523		752		1,212		1,535
Administrative service fees (Note 4)	469		461		497		867
Interest expense and credit facility fees (Note 7)	17,873		9,170		35,154		16,786
Directors’ fees and expenses	107		186		230		346
Other general and administrative	490		382		943		776
Total expenses	32,240		22,522		63,522		44,159
Net investment income (loss) before taxes	27,825		22,046		54,918		47,918
Excise tax expense	650		176		1,173		529
Net investment income (loss)	27,175		21,870		53,745		47,389
Net realized gain (loss) and net change in unrealized appreciation (depreciation):
Net realized gain (loss) on investments:
Non-controlled/non-affiliated investments	(7,991)		(653)		(21,494)		3,922

Controlled/affiliated investments	—		707		188		1,971
Net realized currency gain (loss) on non-investment assets and liabilities	45		(39)		(8)		(407)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/non-affiliated investments	(7,826)		(21,439)		5,080		(32,682)
Non-controlled/affiliated investments	320		2,974		5,296		3,588
Controlled/affiliated investments	(5,135)		(3,487)		(7,002)		4,570
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	(1,875)		4,732		(3,105)		6,997
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	(22,462)		(17,205)		(21,045)		(12,041)
Net increase (decrease) in net assets resulting from operations	4,713		4,665		32,700		35,348
Preferred stock dividend	875		875		1,750		1,750
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders	$	3,838	$	3,790	$	30,950	$	33,598

Basic and diluted earnings per common share (Note 9)

CARLYLE SECURED LENDING, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (continued)

(dollar amounts in thousands, except per share data) (unaudited)


Basic	$	0.08	$	0.07	$	0.61	$	0.64
Diluted	$	0.08	$	0.07	$	0.58	$	0.61
Weighted-average shares of common stock outstanding (Note 9)
Basic	50,794,941		52,421,296		50,840,753		52,655,375
Diluted	50,794,941		52,421,296		56,273,633		57,974,987

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE SECURED LENDING, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(dollar amounts in thousands) (unaudited)


	Six months ended June 30,
	2023		2022
Net increase (decrease) in net assets resulting from operations:
Net investment income (loss)	$	53,745	$	47,389
Net realized gain (loss) on investments and non-investment assets and liabilities	(21,314)		5,486
Net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	269		(17,527)

Net increase (decrease) in net assets resulting from operations	32,700		35,348
Capital transactions:



Repurchase of common stock	(3,993)		(13,976)
Dividends declared on preferred and common stock (Note 9)	(46,449)		(43,683)
Net increase (decrease) in net assets resulting from capital transactions	(50,442)		(57,659)
Net increase (decrease) in net assets	(17,742)		(22,311)
Net assets at beginning of period	917,423		948,804
Net assets at end of period	$	899,681	$	926,493

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE SECURED LENDING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollar amounts in thousands) (unaudited)


	Six months ended June 30,
	2023		2022
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations	$	32,700	$	35,348
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Amortization of deferred financing costs	588		504
Net accretion of discount on investments	(3,784)		(5,099)
Paid-in-kind interest	(9,584)		(8,836)
Net realized (gain) loss on investments	21,306		(5,893)
Net realized currency (gain) loss on non-investment assets and liabilities	8		407
Net change in unrealized (appreciation) depreciation on investments	(3,374)		24,524
Net change in unrealized currency (gain) loss on non-investment assets and liabilities	3,105		(6,997)
Cost of investments purchased and change in payable for investments purchased	(92,471)		(301,586)
Proceeds from sales and repayments of investments and change in receivable for investments sold	171,245		231,326
Changes in operating assets:
Interest and dividend receivable	(680)		(1,911)

Prepaid expenses and other assets	(560)		(358)
Changes in operating liabilities:

Interest and credit facility fees payable	348		731
Base management and incentive fees payable	123		(238)
Administrative service fees payable	(272)		456
Other accrued expenses and liabilities	(1,137)		(101)
Net cash provided by (used in) operating activities	117,561		(37,723)
Cash flows from financing activities:

Repurchase of common stock	(3,993)		(13,976)
Borrowings on Credit Facility	74,792		202,500
Repayments of Credit Facility	(118,141)		(159,746)




Debt issuance costs paid	—		(1,290)
Dividends paid in cash	(46,575)		(43,548)
Net cash provided by (used in) financing activities	(93,917)		(16,060)
Net increase (decrease) in cash, cash equivalents and restricted cash	23,644		(53,783)
Cash, cash equivalents, and restricted cash, beginning of period	30,506		93,074
Cash, cash equivalents, and restricted cash, end of period	$	54,150	$	39,291
Supplemental disclosures:
Interest and credit facility fees paid during the period	$	33,954	$	15,442
Taxes, including excise tax, paid during the period	$	1,839	$	774
Dividends declared on preferred stock and common stock during the period	$	46,449	$	43,683

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

First Lien Debt (64.7% of fair value)
ADPD Holdings, LLC	^*	(2)(3)(13)(15)	Consumer Services	SOFR	6.00%	11.24%	8/16/2022	8/15/2028	$	10,144	$	9,904	$	9,832	1.09	%
Advanced Web Technologies Holding Company	^*	(2)(3)(15)	Containers, Packaging & Glass	LIBOR	6.25%	11.31%	12/17/2020	12/17/2026	9,137		9,008		9,110		1.01
Advanced Web Technologies Holding Company	^	(2)(3)	Containers, Packaging & Glass	LIBOR	6.50%	11.80%	12/16/2021	12/17/2026	1,601		1,578		1,607		0.18
Advanced Web Technologies Holding Company	^	(2)(3)(13)	Containers, Packaging & Glass	SOFR	6.75%	12.19%	6/2/2023	12/17/2026	645		626		652		0.07
Alpine Acquisition Corp II	^*	(2)(3)(13)(15)	Transportation: Cargo	SOFR	5.75%	11.01%	4/19/2022	11/30/2026	1,532		1,467		1,417		0.16
American Physician Partners, LLC	^	(2)(3)(8)(13)	Healthcare & Pharmaceuticals	SOFR	10.25% (100% PIK)	15.52%	12/16/2022	6/30/2023	3,209		3,083		—		0.00
American Physician Partners, LLC	^*	(2)(3)(8)(13)(14)	Healthcare & Pharmaceuticals	SOFR	10.25% (100% PIK)	15.52%	1/7/2019	8/5/2022	32,493		30,136		—		0.00
Analogic Corporation	^*	(2)(3)(13)(15)	Capital Equipment	SOFR	5.25%	10.45%	6/22/2018	6/22/2024	2,426		2,417		2,408		0.27
Apex Companies Holdings, LLC	^*	(2)(3)(15)	Environmental Industries	SOFR	6.25%	11.30%	1/31/2023	1/31/2028	10,014		9,698		9,714		1.08
Applied Technical Services, LLC	^	(2)(3)(13)(15)	Business Services	SOFR	5.75%	11.14%	12/29/2020	12/29/2026	560		552		557		0.06
Appriss Health, LLC	^	(2)(3)(15)	Healthcare & Pharmaceuticals	LIBOR	6.75%	11.90%	5/6/2021	5/6/2027	36,739		36,184		35,875		3.99
Apptio, Inc.	^*	(2)(3)(15)	Software	LIBOR	5.00%	10.20%	1/10/2019	1/10/2025	5,894		5,847		5,894		0.66
Ascend Buyer, LLC	^*	(2)(3)(13)(15)	Containers, Packaging & Glass	SOFR	6.40%	11.79%	9/30/2021	9/30/2028	3,403		3,330		3,278		0.36
Associations, Inc.	^	(2)(3)(13)(15)	Construction & Building	SOFR	4.00%, 2.50% PIK	11.76%	7/2/2021	7/2/2027	13,017		12,926		12,764		1.42
Atlas AU Bidco Pty Ltd (Australia)	^	(2)(3)(7)(15)	High Tech Industries	SOFR	7.25%	12.40%	12/15/2022	12/12/2029	2,890		2,801		2,856		0.32
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^*	(2)(3)(7)	Software	LIBOR	6.00%	11.27%	12/24/2019	12/24/2026	31,992		31,539		30,249		3.36
Avalara, Inc.	^	(2)(3)(15)	Diversified Financial Services	SOFR	7.25%	12.49%	10/19/2022	10/19/2028	22,500		21,936		22,612		2.51
Barnes & Noble, Inc.	^	(2)(3)(11)(13)	Retail	SOFR	8.31%	13.50%	8/7/2019	12/20/2026	27,125		26,432		26,677		2.97
Bayside OPCP, LLC	^	(2)(3)(13)(15)	Healthcare & Pharmaceuticals	SOFR	1.00%, 6.00% PIK	12.17%	5/31/2023	5/31/2026	790		790		790		0.09
Bayside OPCP, LLC	^	(2)(3)(13)	Healthcare & Pharmaceuticals	SOFR	1.00%, 6.25% PIK	12.42%	5/31/2023	5/31/2026	12,567		12,567		12,567		1.40
Bayside OPCP, LLC	^	(2)(3)(13)	Healthcare & Pharmaceuticals	SOFR	1.00%, 6.25% PIK	12.42%	5/31/2023	5/31/2026	4,445		4,445		4,445		0.49
BlueCat Networks, Inc. (Canada)	^	(2)(3)(7)(15)	High Tech Industries	SOFR	4.00%, 2.00% PIK	11.23%	8/8/2022	8/8/2028	3,450		3,383		3,399		0.38
BMS Holdings III Corp.	^	(2)(3)	Construction & Building	SOFR	5.50%	10.89%	9/30/2019	9/30/2026	4,808		4,745		4,693		0.52
Bradyifs Holdings, LLC	^*	(2)(3)(13)(15)	Wholesale	SOFR	6.25%	11.56%	2/21/2020	11/22/2025	9,539		9,425		9,386		1.04

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

Bubbles Bidco S.P.A. (Italy)	^	(2)(7)(15)	Consumer Goods: Non-Durable	EURIBOR	9.00% (100% PIK)	12.58%	10/20/2021	10/20/2028	€	5,189	$	5,830	$	5,680	0.63	%
Bubbles Bidco S.P.A. (Italy)	^	(2)(7)(15)	Consumer Goods: Non-Durable	EURIBOR	6.25%	9.83%	10/20/2021	10/20/2028	€	—	—		(24)		0.00
CD&R Madison Parent Ltd (United Kingdom)	^	(2)(7)	Business Services	EURIBOR	8.00%	11.46%	2/27/2023	2/27/2030	€	603	619		638		0.07
CD&R Madison Parent Ltd (United Kingdom)	^	(2)(7)(15)	Business Services	SONIA	8.50%	12.93%	2/27/2023	2/27/2030	£	1,223	1,418		1,513		0.17
Celerion Buyer, Inc.	^*	(2)(3)(15)	Healthcare & Pharmaceuticals	SOFR	6.50%	11.59%	11/3/2022	11/3/2029	3,136		3,046		3,093		0.34
Chartis Holding, LLC	^*	(2)(3)(13)(15)	Business Services	SOFR	5.00%	10.22%	5/1/2019	5/1/2025	771		765		766		0.09
Chemical Computing Group ULC (Canada)	^*	(2)(3)(7)(13)(15)	Software	SOFR	4.50%	9.70%	8/30/2018	8/30/2024	387		387		384		0.04
CircusTrix Holdings, LLC	^*	(2)(3)(13)	Leisure Products & Services	SOFR	5.50%	10.70%	2/2/2018	1/16/2024	10,507		10,500		10,507		1.17
CircusTrix Holdings, LLC	^	(2)(3)(13)	Leisure Products & Services	SOFR	5.50%	10.70%	1/8/2021	7/16/2023	269		212		269		0.03
Comar Holding Company, LLC	^*	(2)(3)(13)	Containers, Packaging & Glass	SOFR	5.75%	10.70%	6/18/2018	6/18/2024	28,969		28,850		26,848		2.98
Cority Software Inc. (Canada)	^*	(2)(3)(7)(15)	Software	SOFR	5.00%	9.89%	7/2/2019	7/2/2026	10,355		10,233		10,267		1.14
Cority Software Inc. (Canada)	^	(2)(3)(7)	Software	SOFR	7.50%	11.89%	9/3/2020	7/2/2026	550		540		549		0.06
Coupa Holdings, LLC	^	(2)(3)(15)	Software	SOFR	7.50%	12.60%	2/27/2023	2/27/2030	8,638		8,397		8,549		0.95
CPI Intermediate Holdings, Inc.	^*	(2)(3)(15)	Telecommunications	SOFR	5.50%	10.57%	10/6/2022	10/6/2029	3,863		3,786		3,670		0.41
CST Holding Company	^*	(2)(3)(13)(15)	Consumer Goods: Non-Durable	SOFR	6.75%	11.95%	11/1/2022	11/1/2028	4,959		4,810		4,862		0.54
DCA Investment Holding LLC	^*	(2)(3)	Healthcare & Pharmaceuticals	SOFR	6.41%	11.64%	3/11/2021	4/3/2028	14,380		14,243		13,935		1.55
Denali Midco 2, LLC	^*	(2)(3)(13)(15)	Consumer Services	SOFR	6.50%	11.70%	9/15/2022	12/22/2027	8,304		8,042		7,907		0.88
Dermatology Associates	^	(2)(3)(13)	Healthcare & Pharmaceuticals	SOFR	6.25% (100% PIK)	11.64%	5/31/2016	9/29/2023	29,121		29,121		29,091		3.23
Dermatology Associates	^	(2)(3)(8)(11)	Healthcare & Pharmaceuticals	SOFR	11.36% (100% PIK)	16.65%	5/31/2016	9/29/2023	45,110		24,963		32,789		3.64
Diligent Corporation	^	(2)(3)(13)(15)	Telecommunications	SOFR	6.25%	11.45%	8/4/2020	8/4/2025	664		654		642		0.07
Dwyer Instruments, Inc.	^*	(2)(3)(13)(15)	Capital Equipment	SOFR	5.75%	11.09%	7/21/2021	7/21/2027	3,954		3,887		3,902		0.43
Eliassen Group, LLC	^*	(2)(3)(15)	Business Services	SOFR	5.50%	10.83%	4/14/2022	4/14/2028	1,572		1,513		1,514		0.17
Ellkay, LLC	^*	(2)(3)(15)	Healthcare & Pharmaceuticals	LIBOR	6.25%	11.47%	9/14/2021	9/14/2027	14,035		13,800		12,696		1.41
Emergency Communications Network, LLC	^*	(2)(3)	Telecommunications	SOFR	2.50%, 5.25% PIK	12.80%	6/1/2017	6/1/2024	27,257		27,237		23,187		2.58
EPS Nass Parent, Inc.	^	(2)(3)(13)(15)	Utilities: Electric	SOFR	5.75%	11.14%	4/19/2021	4/19/2028	938		924		904		0.10
EvolveIP, LLC	^*	(2)(3)(13)(15)	Telecommunications	SOFR	5.50%	10.70%	11/26/2019	6/7/2025	6,036		6,035		5,953		0.66
Excel Fitness Holdings, Inc.	^*	(2)(3)(13)(15)	Leisure Products & Services	SOFR	5.25%	10.63%	4/29/2022	4/29/2029	6,782		6,660		6,438		0.72
Excelitas Technologies Corp.	^	(2)(3)(13)(15)	Capital Equipment	SOFR	5.75%	10.94%	8/12/2022	8/12/2029	3,197		3,134		3,133		0.35

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

Excelitas Technologies Corp.	^	(2)	Capital Equipment	EURIBOR	5.75%	9.05%	8/12/2022	8/12/2029	€	1,269	$	1,279	$	1,362	0.15
FPG Intermediate Holdco, LLC	^	(2)(3)(13)(15)	Consumer Services	SOFR	6.50%	11.91%	8/5/2022	3/5/2027	363		293		240		0.03
Greenhouse Software, Inc.	^	(2)(3)(15)	Software	SOFR	7.00%	12.24%	3/1/2021	9/1/2028	32,796		32,113		32,020		3.56
Guidehouse LLP	^	(2)(3)(13)	Sovereign & Public Finance	SOFR	6.25%	11.45%	9/30/2022	10/16/2028	79		78		78		0.01
Hadrian Acquisition Limited (United Kingdom)	^	(2)(3)(7)(11)	Diversified Financial Services	SONIA	5.26%, 3.47% PIK	13.66%	2/28/2022	2/28/2029	£	14,930	19,447		18,676		2.08
Hadrian Acquisition Limited (United Kingdom)	^	(2)(3)(7)(15)	Diversified Financial Services	SONIA	5.00%, 2.75% PIK	12.68%	2/28/2022	2/28/2029	£	3,784	4,356		4,736		0.53
Harbour Benefit Holdings, Inc.	^*	(2)(3)(15)	Business Services	LIBOR	5.00%	10.39%	12/13/2017	12/13/2024	2,975		2,958		2,938		0.33
Heartland Home Services, Inc.	^*	(2)(3)(13)(15)	Consumer Services	SOFR	5.75%	10.96%	2/10/2022	12/15/2026	10,275		10,165		10,108		1.12
Heartland Home Services, Inc.	^*	(2)(3)(13)(15)	Consumer Services	SOFR	6.00%	11.16%	12/15/2020	12/15/2026	7,152		7,096		7,121		0.79
Hercules Borrower LLC	^*	(2)(3)(13)(15)	Environmental Industries	SOFR	6.25%	11.59%	12/14/2020	12/14/2026	18,404		18,048		18,211		2.02
Higginbotham Insurance Agency, Inc.	^	(2)(3)(13)	Diversified Financial Services	SOFR	5.25%	10.45%	11/25/2020	11/25/2026	449		445		443		0.05
Hoosier Intermediate, LLC	^*	(2)(3)(15)	Healthcare & Pharmaceuticals	LIBOR	5.50%	10.82%	11/15/2021	11/15/2028	9,939		9,742		9,042		1.01
HS Spa Holdings Inc.	^	(2)(3)(15)	Consumer Services	SOFR	5.75%	11.06%	6/2/2022	6/2/2029	8,747		8,575		8,558		0.95
iCIMS, Inc.	^	(2)(3)(15)	Software	SOFR	7.25%	12.38%	8/18/2022	8/18/2028	26,457		26,036		26,166		2.91
Infront Luxembourg Finance S.À R.L. (Luxembourg)	^	(2)(7)	Leisure Products & Services	EURIBOR	9.00%	12.48%	5/28/2021	5/28/2027	€	8,250	9,824		8,935		0.99
Integrity Marketing Acquisition, LLC	^	(2)(3)(13)	Diversified Financial Services	SOFR	6.02%	11.38%	12/3/2021	8/27/2025	427		423		418		0.05
IQN Holding Corp.	^	(2)(3)(15)	Business Services	SOFR	5.25%	10.38%	5/2/2022	5/2/2029	6,871		6,803		6,800		0.76
Jeg's Automotive, LLC	^*	(2)(3)(13)(15)	Automotive	SOFR	6.00%	11.37%	12/22/2021	12/22/2027	20,533		20,145		16,763		1.86
Kaseya, Inc.	^	(2)(3)(15)	High Tech Industries	SOFR	3.75%, 2.50% PIK	11.35%	6/23/2022	6/23/2029	36,036		35,350		35,374		3.93
Lifelong Learner Holdings, LLC	^*	(2)(3)(15)	Business Services	LIBOR	5.75%	11.02%	10/18/2019	10/18/2026	25,842		25,571		23,573		2.62
LinQuest Corporation	*	(2)(3)(13)	Aerospace & Defense	SOFR	5.75%	10.95%	7/28/2021	7/28/2028	9,825		9,672		9,026		1.00
LVF Holdings, Inc.	^*	(2)(3)(13)(15)	Beverage & Food	SOFR	6.25%	11.64%	6/10/2021	6/10/2027	40,863		40,264		39,022		4.34
Material Holdings, LLC	^*	(2)(3)(13)(15)	Business Services	SOFR	6.00%	11.34%	8/19/2021	8/19/2027	7,679		7,554		7,164		0.80
Maverick Acquisition, Inc.	^*	(2)(3)	Aerospace & Defense	LIBOR	6.25%	11.44%	6/1/2021	6/1/2027	35,442		34,942		28,781		3.20
Medical Manufacturing Technologies, LLC	^*	(2)(3)(13)(15)	Healthcare & Pharmaceuticals	SOFR	5.50%	10.44%	12/23/2021	12/23/2027	29,749		29,262		29,188		3.24
NEFCO Holding Company LLC	^*	(2)(3)(13)(15)	Construction & Building	SOFR	6.50%	11.80%	8/5/2022	8/5/2028	6,453		6,327		6,378		0.71
NMI AcquisitionCo, Inc.	^*	(2)(3)(13)(15)	High Tech Industries	SOFR	5.75%	10.95%	9/6/2017	9/6/2025	38,324		38,279		37,690		4.19
North Haven Fairway Buyer, LLC	^*	(2)(3)(15)	Consumer Services	SOFR	6.50%	11.73%	5/17/2022	5/17/2028	16,107		15,814		15,657		1.74
North Haven Stallone Buyer, LLC	^	(2)(3)(15)	Consumer Services	SOFR	5.75%	11.28%	10/11/2022	5/24/2027	49		46		46		0.01
Oak Purchaser, Inc.	^	(2)(3)(15)	Business Services	SOFR	5.50%	10.37%	4/28/2022	4/28/2028	6,013		5,946		5,777		0.64

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

Oranje Holdco, Inc.	^	(2)(3)(15)	Business Services	SOFR	7.75%	12.79%	2/1/2023	2/1/2029	$	8,052	$	7,837	$	7,927	0.88
Performance Health Holdings, Inc.	*	(2)(3)(13)	Healthcare & Pharmaceuticals	SOFR	6.00%	10.96%	7/12/2021	7/12/2027	6,444		6,351		6,192		0.69
Pestco Intermediate, LLC	^	(2)(3)(13)(15)	Environmental Industries	SOFR	6.75%	12.14%	2/6/2023	2/17/2028	3,697		3,547		3,526		0.39
PF Atlantic Holdco 2, LLC	^	(2)(3)(13)(15)	Leisure Products & Services	SOFR	5.50%	10.89%	11/12/2021	11/12/2027	4,769		4,554		4,551		0.51
PF Growth Partners, LLC	*	(2)(3)(13)	Leisure Products & Services	SOFR	5.00%	10.21%	7/1/2019	7/11/2025	7,916		7,870		7,864		0.87
Project Castle, Inc.	*	(2)(3)	Capital Equipment	SOFR	5.50%	10.41%	6/24/2022	6/1/2029	7,444		6,747		6,253		0.70
Prophix Software Inc. (Canada)	^	(2)(3)(7)(15)	Software	LIBOR	6.50%	11.66%	2/1/2021	2/1/2026	10,963		10,799		10,963		1.22
Pushpay USA Inc.	^*	(2)(3)(13)(15)	Diversified Financial Services	SOFR	6.75%	11.97%	5/10/2023	5/10/2030	16,049		15,538		15,531		1.73
PXO Holdings I Corp.	^*	(2)(3)(13)(15)	Chemicals, Plastics & Rubber	SOFR	5.50%	10.85%	3/8/2022	3/8/2028	7,032		6,883		6,802		0.76
QNNECT, LLC	^*	(2)(3)(15)	Aerospace & Defense	SOFR	7.00%	12.08%	11/2/2022	11/2/2029	5,329		5,143		5,279		0.59
Quantic Electronics, LLC	^*	(2)(3)(13)	Aerospace & Defense	SOFR	6.25%	11.47%	11/19/2020	11/19/2026	15,785		15,573		15,222		1.69
Quantic Electronics, LLC	^*	(2)(3)(13)(15)	Aerospace & Defense	SOFR	6.25%	11.62%	3/1/2021	3/1/2027	9,775		9,614		9,351		1.04
Radwell Parent, LLC	^*	(2)(3)(15)	Wholesale	SOFR	6.75%	11.99%	12/1/2022	4/1/2029	18,791		18,234		18,454		2.05
Riveron Acquisition Holdings, Inc.	*	(2)(3)	Diversified Financial Services	LIBOR	5.75%	10.83%	5/22/2019	5/22/2025	1,668		1,645		1,668		0.19
RSC Acquisition, Inc.	^	(2)(3)(13)(15)	Diversified Financial Services	SOFR	5.50%	10.76%	11/1/2019	11/1/2026	10,090		9,997		9,864		1.10
Sapphire Convention, Inc.	^	(2)(3)(15)	Telecommunications	LIBOR	5.25%	10.72%	11/20/2018	11/20/2025	27,906		27,679		27,709		3.08
SCP Eye Care HoldCo, LLC	^	(2)(3)(13)(15)	Healthcare & Pharmaceuticals	SOFR	5.75%	10.99%	10/7/2022	10/7/2029	136		131		132		0.01
Smarsh Inc.	^	(2)(3)(15)	Software	SOFR	6.50%	11.84%	2/18/2022	2/18/2029	7,347		7,201		7,218		0.80
SPay, Inc.	^*	(2)(3)(13)	Leisure Products & Services	SOFR	2.88%, 6.38% PIK	14.46%	6/15/2018	3/15/2025	25,463		25,373		22,013		2.44
Speedstar Holding, LLC	^*	(2)(3)(13)	Automotive	SOFR	7.25%	12.65%	1/22/2021	1/22/2027	26,557		26,208		26,546		2.94
Spotless Brands, LLC	^*	(2)(3)(13)(15)	Consumer Services	SOFR	6.50%	11.71%	6/21/2022	7/25/2028	18,661		18,318		18,236		2.03
Spotless Brands, LLC	^	(2)(3)(13)(15)	Consumer Services	SOFR	6.75%	11.97%	6/21/2022	7/25/2028	—		(420)		(182)		(0.02)
Summit Acquisition, Inc.	^	(2)(3)(15)	Diversified Financial Services	SOFR	6.75%	11.99%	5/4/2023	5/1/2030	—		(60)		(62)		(0.01)
Tank Holding Corp.	^*	(2)(3)(13)(15)	Capital Equipment	SOFR	5.75%	10.95%	3/31/2022	3/31/2028	18,750		18,429		18,245		2.03
TCFI Aevex LLC	^*	(2)(3)(13)	Aerospace & Defense	SOFR	6.00%	11.20%	3/18/2020	3/18/2026	10,990		10,887		10,578		1.18
The Carlstar Group LLC	^*	(2)(3)(13)(15)	Automotive	SOFR	6.50%	11.69%	7/8/2022	7/8/2027	14,080		13,761		13,985		1.55
TIBCO Software Inc.	*	(2)(3)	High Tech Industries	SOFR	4.50%	9.84%	9/30/2022	3/31/2029	14,963		13,722		13,971		1.55
Trader Corporation (Canada)	^	(2)(3)(7)(15)	Automotive	CDOR	6.75%	11.96%	12/22/2022	12/22/2029	C$	12,051	8,634		8,989		1.00
Tufin Software North America, Inc.	^	(2)(3)(13)(15)	Software	SOFR	7.69%	13.07%	8/17/2022	8/17/2028	27,417		26,914		26,773		2.97
Turbo Buyer, Inc.	^	(2)(3)(15)	Automotive	LIBOR	6.00%	11.59%	12/2/2019	12/2/2025	1,706		1,634		1,621		0.18
U.S. Legal Support, Inc.	^*	(2)(3)(13)(15)	Business Services	SOFR	5.75%	11.14%	11/30/2018	11/30/2024	15,680		15,566		15,374		1.71

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets

US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	LIBOR	6.50%, 0.25% PIK	12.13%	4/13/2020	4/13/2026	$	8,908	$	8,818	$	8,271	0.92	%
USALCO, LLC	*	(2)(3)(13)	Chemicals, Plastics & Rubber	SOFR	6.00%	11.22%	10/19/2021	10/19/2027	985		970		966		0.11
USR Parent Inc.	^	(2)(3)(11)	Retail	SOFR	7.60%	12.76%	4/22/2022	4/25/2027	4,000		3,968		3,897		0.43
Westfall Technik, Inc.	^*	(2)(3)	Chemicals, Plastics & Rubber	SOFR	6.75%	12.14%	9/13/2018	9/13/2024	26,340		26,209		24,781		2.74
Wineshipping.com LLC	^*	(2)(3)(13)(15)	Beverage & Food	SOFR	5.75%	11.15%	10/29/2021	10/29/2027	5,044		4,927		4,656		0.52
Yellowstone Buyer Acquisition, LLC	^	(2)(3)	Consumer Goods: Durable	LIBOR	5.75%	11.02%	9/13/2021	9/13/2027	442		435		420		0.05
YLG Holdings, Inc.	^	(2)(3)(13)	Consumer Services	SOFR	5.00%	10.16%	9/30/2020	11/1/2025	1,950		1,915		1,946		0.22
First Lien Debt Total											$	1,282,829	$	1,226,265	136.30	%

Second Lien Debt (14.0% of fair value)
11852604 Canada Inc. (Canada)	^	(2)(3)(7)(13)	Healthcare & Pharmaceuticals	SOFR	9.50% (100% PIK)	14.89%	9/30/2021	9/30/2028	$	8,151	$	8,026	$	7,988	0.89	%
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)(7)	Aerospace & Defense	LIBOR	8.25%	13.64%	1/17/2020	1/17/2028	24,814		24,445		25,186		2.80
Aimbridge Acquisition Co., Inc.	^	(2)	Leisure Products & Services	LIBOR	7.50%	12.67%	2/1/2019	2/1/2027	9,241		9,152		8,787		0.98
AP Plastics Acquisition Holdings, LLC	^	(2)(3)(13)	Chemicals, Plastics & Rubber	SOFR	7.50%	12.69%	8/10/2021	8/10/2029	33,680		32,913		32,720		3.64
AQA Acquisition Holdings, Inc.	^*	(2)(3)(13)	High Tech Industries	SOFR	7.50%	12.70%	3/3/2021	3/3/2029	35,000		34,315		34,811		3.87
Bayside Parent, LLC	^	(2)(3)(8)(9)(13)	Healthcare & Pharmaceuticals	SOFR	10.00% (100% PIK)	15.17%	5/31/2023	5/31/2026	4,445		3,669		1,872		0.21
Blackbird Purchaser, Inc.	^	(2)(3)(13)	Capital Equipment	SOFR	7.50%	12.70%	12/14/2021	4/8/2027	13,791		13,582		13,729		1.53
Brave Parent Holdings, Inc.	^*	(2)	Software	SOFR	7.50%	12.95%	10/3/2018	4/19/2026	18,197		18,001		18,060		2.01
Drilling Info Holdings, Inc.	^	(2)(13)	Energy: Oil & Gas	SOFR	8.25%	13.45%	2/11/2020	7/30/2026	18,600		18,320		18,600		2.07
Jazz Acquisition, Inc.	^	(2)	Aerospace & Defense	LIBOR	8.00%	13.20%	6/13/2019	6/18/2027	23,450		23,246		23,376		2.59
Outcomes Group Holdings, Inc.	^*	(2)	Business Services	LIBOR	7.50%	12.69%	10/23/2018	10/26/2026	1,731		1,729		1,700		0.19
PAI Holdco, Inc.	^	(2)(3)	Automotive	LIBOR	5.50%, 2.00% PIK	12.77%	10/28/2020	10/28/2028	14,230		13,932		13,351		1.48
Peraton Corp.	^*	(2)(3)(13)	Aerospace & Defense	SOFR	7.75%	12.98%	2/24/2021	2/1/2029	5,441		5,376		5,335		0.59
Quartz Holding Company	^*	(2)(13)	Software	SOFR	8.00%	13.20%	4/2/2019	4/2/2027	7,048		6,971		7,016		0.78
Stonegate Pub Company Bidco Limited (United Kingdom)	^	(2)(7)	Beverage & Food	SONIA	8.50%	12.93%	3/12/2020	3/12/2028	£	20,000	24,856		23,947		2.65
TruGreen Limited Partnership	^	(2)(3)	Consumer Services	LIBOR	8.50%	13.77%	11/16/2020	11/2/2028	13,000		12,804		11,664		1.30
World 50, Inc.	^	(9)	Business Services	FIXED	11.50%	11.50%	1/10/2020	1/9/2027	18,098		17,848		17,394		1.93





Second Lien Debt Total											$	269,185	$	265,536	29.51	%

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (5.1% of fair value)
ANLG Holdings, LLC	^	(6)	Capital Equipment	6/22/2018	592	$	592	$	746	0.08	%
Appriss Health, LLC	^	(6)	Healthcare & Pharmaceuticals	5/6/2021	5	5,290		5,125		0.57
Atlas Ontario LP (Canada)	^	(6)(7)	Business Services	4/7/2021	5,114	5,114		5,114		0.57
Avenu Holdings, LLC	^	(6)	Sovereign & Public Finance	9/28/2018	172	104		536		0.06
Blackbird Holdco, Inc.	^	(6)	Capital Equipment	12/14/2021	12	11,552		11,293		1.26
Buckeye Parent, LLC	^	(6)	Automotive	12/22/2021	885	885		64		0.01
Chartis Holding, LLC	^	(6)	Business Services	5/1/2019	433	427		586		0.07
CIP Revolution Holdings, LLC	^	(6)	Media: Advertising, Printing & Publishing	8/19/2016	318	318		250		0.03
Cority Software Inc. (Canada)	^	(6)(7)	Software	7/2/2019	250	250		660		0.07
Derm Growth Partners III, LLC	^	(6)	Healthcare & Pharmaceuticals	5/31/2016	1,000	1,000		—		—
Diligent Corporation	^	(6)	Telecommunications	4/5/2021	12	12,173		11,716		1.30
ECP Parent, LLC	^	(6)	Healthcare & Pharmaceuticals	3/29/2018	268	—		290		0.03
GB Vino Parent, L.P.	^	(6)	Beverage & Food	10/29/2021	4	351		387		0.04
Integrity Marketing Group, LLC	^	(6)	Diversified Financial Services	12/21/2021	17,594	17,396		17,601		1.96
Legacy.com, Inc.	^	(6)	High Tech Industries	3/20/2017	1,500	1,500		1,065		0.12
NearU Holdings LLC	^	(6)	Consumer Services	8/16/2022	25	2,470		2,494		0.28
NEFCO Holding Company LLC	^	(6)	Construction & Building	8/5/2022	1	608		608		0.07
North Haven Goldfinch Topco, LLC	^	(6)	Containers, Packaging & Glass	6/18/2018	2,315	2,315		336		0.04
Pascal Ultimate Holdings, L.P	^	(6)	Capital Equipment	7/21/2021	36	364		943		0.10
Picard Parent, Inc.	^	(6)	High Tech Industries	9/30/2022	9	8,890		9,016		1.00
Profile Holdings I, LP	^	(6)	Chemicals, Plastics & Rubber	3/8/2022	5	523		515		0.06
Sinch AB (Sweden)	^	(6)(7)	High Tech Industries	3/26/2019	106	1,168		240		0.03
Summit K2 Midco, Inc.	^	(6)	Diversified Financial Services	4/27/2023	121	121		121		0.01
Tailwind HMT Holdings Corp.	^	(6)	Energy: Oil & Gas	11/17/2017	22	1,558		1,683		0.19
Talon MidCo 1 Limited	^	(6)	Software	8/17/2022	145,631	1,456		1,717		0.19
Tank Holding Corp.	^	(6)	Capital Equipment	3/26/2019	850	—		3,206		0.36
Titan DI Preferred Holdings, Inc.	^	(6)	Energy: Oil & Gas	2/11/2020	15,664	15,453		15,351		1.71
Turbo Buyer, Inc.	^	(6)	Automotive	12/2/2019	1,925	933		2,436		0.27
U.S. Legal Support Investment Holdings, LLC	^	(6)	Business Services	11/30/2018	641	641		578		0.05
W50 Parent LLC	^	(6)	Business Services	1/10/2020	500	190		657		0.07
Zenith American Holding, Inc.	^	(6)	Business Services	12/13/2017	1,565	760		1,597		0.18
Equity Investments Total						$	94,402	$	96,931	10.78	%
Total investments—non-controlled/non-affiliated						$	1,646,416	$	1,588,732	176.60	%

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/affiliated		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (2.4% of fair value)
Direct Travel, Inc.	^*	(2)(3)(12)(13)	Leisure Products & Services	SOFR	6.50%, 2.00% PIK	13.89%	10/14/2016	10/1/2025	$	43,961	$	42,713	$	43,370	4.82	%
Direct Travel, Inc.	^	(2)(3)(12)(13)(15)	Leisure Products & Services	SOFR	6.00%	11.09%	10/1/2020	10/1/2025	3,015		2,918		3,015		0.34
First Lien Debt Total											$	45,631	$	46,385	5.16	%


Investments—non-controlled/affiliated		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (0.3% of fair value)
Direct Travel, Inc.	^	(6)(12)	Leisure Products & Services	10/1/2020	43	$	—	$	5,283	0.59	%
Equity Investments Total						$	—	$	5,283	0.59	%
Total investments—non-controlled/affiliated						$	45,631	$	51,668	5.74	%


Investments—controlled/affiliated		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par Amount/ LLC Interest **		Cost		Fair Value (5)		% of Net Assets
Investment Funds (13.5% of fair value)
Middle Market Credit Fund II, LLC, Member's Interest	^	(7)(10)	Investment Funds	N/A		14.22%	11/3/2020	12/31/2030	$	78,122	$	78,096	$	66,919	7.44	%
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest	^	(7)(10)	Investment Funds	N/A		11.40%	2/29/2016	12/31/2024	193,000		193,001		189,101		21.03
Middle Market Credit Fund, Mezzanine Loan		(2)(7)(9)(10)	Investment Funds	SOFR	9.00%	14.27%	6/30/2016	5/21/2025	—		—		—		—
Investment Funds Total											$	271,097	$	256,020	28.47	%

Total investments—controlled/affiliated											$	271,097	$	256,020	28.47	%
Total Investments											$	1,963,144	$	1,896,420	210.79	%

^ Denotes that all or a portion of the assets are owned by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 7, Borrowings, to these consolidated financial statements). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”).

* Denotes that all or a portion of the assets are owned by the Company's wholly owned subsidiary, the 2015-1 Issuer, and secure the notes issued in connection with a term debt securitization completed by the Company on June 26, 2015 (see Note 7, Borrowings, to these unaudited consolidated financial statements). Accordingly, such assets are not available to the creditors of the Company.

** Par amount is denominated in USD (“$”) unless otherwise noted, as denominated in Euro (“€”), Canadian Dollar (“C$”) or British Pound (“£”).

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)

held the power to exercise control over the management or policies of the portfolio company. As of June 30, 2023, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of June 30, 2023, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”), the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2023. As of June 30, 2023, the reference rates for our variable rate loans were the 30-day LIBOR at 5.22%, the 90-day LIBOR at 5.55%, the 180-day LIBOR at 5.76%, the 30-day SOFR at 5.14%, the 90-day SOFR at 5.27%, the 180-day SOFR at 5.39%, the daily SONIA at 4.93%, the 90-day EURIBOR at 3.58% and the 30-day CDOR at 5.40%.

(3)Loan includes interest rate floor feature, which generally ranges from 0.50% to 1.00%.

(4)Amortized cost represents original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion/amortization of discounts/premiums, as applicable, on debt investments using the effective interest method.

(5)Fair value is determined in good faith by the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these unaudited consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment funds was determined using significant unobservable inputs.

(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of June 30, 2023, the aggregate fair value of these securities is $102,214, or 11.36% of the Company’s net assets.

(7)The Company has determined the indicated investments are non-qualifying assets under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying assets unless, at the time such acquisition is made, qualifying assets represent at least 70% of the Company’s total assets.

(8)Loan was on non-accrual status as of June 30, 2023.

(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.

(10)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Note 5, Middle Market Credit Fund, LLC, and Note 6, Middle Market Credit Fund II, LLC, to these unaudited consolidated financial statements for more details. Transactions related to investments in controlled affiliates for the six months ended June 30, 2023, were as follows:


Investments—controlled/affiliated	Fair Value as of December 31, 2022		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of June 30, 2023		Dividend Income
Middle Market Credit Fund II LLC, Member's Interest	$	72,957	$	—	$	—	$	—	$	(6,038)	$	66,919	$	5,552
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest	190,065		—		—		—		(964)		189,101		11,000
Middle Market Credit Fund, Mezzanine Loan	—		—		—		—		—		—		—
Total investments—controlled/affiliated	$	263,022	$	—	$	—	$	—	$	(7,002)	$	256,020	$	16,552

(11) In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.

(12) Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio company because the Company owns 5% or more of the portfolio company's outstanding voting securities. Transactions related to the portfolio company during the six months ended June 30, 2023 were as follows:

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/affiliated	Fair Value as of December 31, 2022		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of June 30, 2023		Interest and Other Income
Direct Travel, Inc.	$	42,636	$	700	$	—	$	—	$	34	$	43,370	$	3,231
Direct Travel, Inc.	2,731		305		—		—		(21)		3,015		182
Direct Travel, Inc. (Equity)	—		—		—		—		5,283		5,283		—
Total investments—non-controlled/affiliated	$	45,367	$	1,005	$	—	$	—	$	5,296	$	51,668	$	3,413

(13)Loans include a credit spread adjustment that ranges from 0.10% to 0.43%.

(14)Loan is in forbearance as of June 30, 2023.

(15)As of June 30, 2023, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
ADPD Holdings, LLC	Delayed Draw	1.00%	$	1,795	$	(41)
ADPD Holdings, LLC	Delayed Draw	1.00	1,083		(25)
ADPD Holdings, LLC	Revolver	0.50	621		(14)
Advanced Web Technologies Holding Company	Revolver	0.50	985		(3)
Alpine Acquisition Corp II	Revolver	0.50	2,758		(74)
Analogic Corporation	Revolver	0.50	44		—
Apex Companies Holdings, LLC	Delayed Draw	1.00	2,305		(56)
Applied Technical Services, LLC	Revolver	0.50	8		—
Appriss Health, LLC	Revolver	0.50	2,963		(64)
Apptio, Inc.	Revolver	0.50	1,657		—
Ascend Buyer, LLC	Revolver	0.50	1,284		(34)
Associations, Inc.	Revolver	0.50	723		(13)
Atlas AU Bidco Pty Ltd (Australia)	Revolver	0.50	268		(3)
Avalara, Inc.	Revolver	0.50	2,250		10
Bayside OPCP, LLC	Revolver	0.50	1,185		—
BlueCat Networks, Inc. (Canada)	Delayed Draw	0.50	170		(2)
BlueCat Networks, Inc. (Canada)	Delayed Draw	0.50	240		(3)
Bradyifs Holdings, LLC	Revolver	0.50	661		(10)
Bubbles Bidco S.P.A. (Italy)	Revolver	—	€	537	4
Bubbles Bidco S.P.A. (Italy)	Delayed Draw	2.80	€	873	6
CD&R Madison Parent Ltd (United Kingdom)	Delayed Draw	1.50	£	271	(6)
Celerion Buyer, Inc.	Delayed Draw	1.00	499		(6)
Celerion Buyer, Inc.	Revolver	0.50	249		(3)
Chartis Holding, LLC	Revolver	0.50	129		(1)

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
Chemical Computing Group ULC (Canada)	Revolver	0.50%	$	29	$	—
Cority Software Inc. (Canada)	Revolver	0.50	3,000		(20)
Coupa Holdings, LLC	Delayed Draw	1.00	771		(7)
Coupa Holdings, LLC	Revolver	0.50	591		(5)
CPI Intermediate Holdings, Inc.	Delayed Draw	1.00	927		(37)
CST Holding Company	Revolver	0.50	470		(8)
Denali Midco 2, LLC	Delayed Draw	1.00	1,638		(65)
Diligent Corporation	Revolver	0.50	24		(1)
Direct Travel, Inc.	Delayed Draw	0.50	1,373		—
Dwyer Instruments, Inc.	Delayed Draw	1.00	161		(2)
Dwyer Instruments, Inc.	Revolver	0.50	872		(9)
Eliassen Group, LLC	Delayed Draw	1.00	3,310		(39)
Ellkay, LLC	Revolver	0.50	1,786		(151)
EPS Nass Parent, Inc.	Revolver	0.50	10		—
EvolveIP, LLC	Revolver	0.50	148		(2)
Excel Fitness Holdings, Inc.	Revolver	0.50	296		(14)
Excelitas Technologies Corp.	Delayed Draw	0.50	99		(2)
Excelitas Technologies Corp.	Revolver	0.50	175		(3)
FPG Intermediate Holdco, LLC	Delayed Draw	1.00	3,973		(113)
Greenhouse Software, Inc.	Revolver	0.50	733		(16)
Greenhouse Software, Inc.	Revolver	0.50	1,471		(33)
Hadrian Acquisition Limited (United Kingdom)	Delayed Draw	2.33	£	1,933	(23)
Harbour Benefit Holdings, Inc.	Revolver	0.50	3,180		(19)
Heartland Home Services, Inc.	Delayed Draw	0.75	4,680		(52)
Heartland Home Services, Inc.	Revolver	0.50	619		(2)
Hercules Borrower LLC	Revolver	0.50	1,929		(18)
Hoosier Intermediate, LLC	Revolver	0.50	2,320		(171)
HS Spa Holdings Inc.	Revolver	0.50	1,050		(20)
iCIMS, Inc.	Delayed Draw	—	6,273		(52)
iCIMS, Inc.	Revolver	0.50	2,026		(17)
IQN Holding Corp.	Delayed Draw	1.00	545		(5)
IQN Holding Corp.	Revolver	0.50	407		(4)
Jeg's Automotive, LLC	Delayed Draw	1.00	4,167		(637)
Kaseya, Inc.	Delayed Draw	1.00	1,076		(18)
Kaseya, Inc.	Revolver	0.50	1,541		(26)
Lifelong Learner Holdings, LLC	Revolver	0.50	2		—

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
LVF Holdings, Inc.	Revolver	0.50%	$	1,226	$	(54)
Material Holdings, LLC	Delayed Draw	—	881		(48)
Material Holdings, LLC	Revolver	1.00	959		(52)
Medical Manufacturing Technologies, LLC	Revolver	0.50	1,281		(23)
NEFCO Holding Company LLC	Delayed Draw	1.00	369		(4)
NEFCO Holding Company LLC	Revolver	0.50	356		(4)
NMI AcquisitionCo, Inc.	Revolver	0.50	1,280		(20)
North Haven Fairway Buyer, LLC	Revolver	0.50	1,154		(30)
North Haven Stallone Buyer, LLC	Delayed Draw	1.00	151		(3)
Oak Purchaser, Inc.	Delayed Draw	0.50	1,462		(43)
Oak Purchaser, Inc.	Revolver	0.50	584		(17)
Oranje Holdco, Inc.	Revolver	0.50	1,006		(14)
Pestco Intermediate, LLC	Delayed Draw	2.00	1,387		(45)
Pestco Intermediate, LLC	Revolver	0.50	238		(8)
PF Atlantic Holdco 2, LLC	Delayed Draw	1.00	7,448		(113)
PF Atlantic Holdco 2, LLC	Revolver	0.50	2,138		(32)
Prophix Software Inc. (Canada)	Delayed Draw	—	379		—
Prophix Software Inc. (Canada)	Revolver	0.50	1,993		—
Pushpay USA Inc.	Revolver	0.50	1,235		(37)
PXO Holdings I Corp.	Delayed Draw	1.00	885		(22)
PXO Holdings I Corp.	Revolver	0.50	1,315		(33)
QNNECT, LLC	Delayed Draw	1.00	1,325		(10)
Quantic Electronics, LLC	Delayed Draw	1.00	2,126		(76)
Radwell Parent, LLC	Revolver	0.38	1,116		(19)
RSC Acquisition, Inc.	Revolver	0.50	462		(10)
RSC Acquisition, Inc.	Delayed Draw	1.00	130		(3)
Sapphire Convention, Inc.	Revolver	0.50	4,188		(26)
SCP Eye Care HoldCo, LLC	Delayed Draw	1.00	33		(1)
SCP Eye Care HoldCo, LLC	Revolver	0.50	9		—
Smarsh Inc.	Delayed Draw	1.00	816		(12)
Smarsh Inc.	Revolver	0.50	408		(6)
Spotless Brands, LLC	Delayed Draw	1.00	15,000		(183)
Spotless Brands, LLC	Revolver	0.50	1,096		(24)
Summit Acquisition, Inc.	Delayed Draw	1.00	1,374		(41)
Summit Acquisition, Inc.	Revolver	0.50	687		(21)
Tank Holding Corp.	Revolver	0.38	607		(16)

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
The Carlstar Group LLC	Revolver	0.50%	$	3,657	$	(20)
Trader Corporation (Canada)	Revolver	0.50	C$	906	(15)
Tufin Software North America, Inc.	Revolver	0.50	1,339		(30)
Turbo Buyer, Inc.	Delayed Draw	1.00	2,967		(42)
Turbo Buyer, Inc.	Revolver	0.50	1,217		(17)
U.S. Legal Support, Inc.	Delayed Draw	0.50	2,032		(34)
U.S. Legal Support, Inc.	Revolver	0.50	816		(13)
Wineshipping.com LLC	Delayed Draw	1.00	1,609		(80)
Wineshipping.com LLC	Revolver	0.50	1,112		(56)



Total unfunded commitments			$	150,424	$	(3,286)

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)

As of June 30, 2023, investments at fair value consisted of the following:


Type	Amortized Cost		Fair Value		% of Fair Value


First Lien Debt	$	1,328,460	$	1,272,650	67.1	%
Second Lien Debt	269,185		265,536		14.0
Equity Investments	94,402		102,214		5.4
Investment Funds	271,097		256,020		13.5
Total	$	1,963,144	$	1,896,420	100.0	%

The rate type of debt investments at fair value as of June 30, 2023 was as follows:


Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	1,579,797	$	1,520,792	98.9	%
Fixed Rate	17,848		17,394		1.1
Total	$	1,597,645	$	1,538,186	100.0	%

The industry composition of investments at fair value as of June 30, 2023 was as follows:


Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	138,898	$	132,134	7.0	%
Automotive	86,132		83,755		4.4
Beverage & Food	70,398		68,012		3.6
Business Services	103,811		102,167		5.5
Capital Equipment	61,983		65,220		3.4
Chemicals, Plastics & Rubber	67,498		65,784		3.5
Construction & Building	24,606		24,443		1.3
Consumer Goods: Durable	435		420		0.0
Consumer Goods: Non-Durable	10,640		10,518		0.6
Consumer Services	95,022		93,627		4.9
Containers, Packaging & Glass	45,707		41,831		2.2
Diversified Financial Services	91,244		91,608		4.8
Energy: Oil & Gas	35,331		35,634		1.9
Environmental Industries	40,111		39,722		2.1
Healthcare & Pharmaceuticals	235,849		205,110		10.8
High Tech Industries	139,408		138,422		7.3
Investment Funds	271,097		256,020		13.5
Leisure Products & Services	119,776		121,032		6.4
Media: Advertising, Printing & Publishing	318		250		0.0



Retail	30,400		30,574		1.6
Software	186,684		186,485		9.8

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of June 30, 2023

(dollar amounts in thousands) (unaudited)


Industry	Amortized Cost		Fair Value		% of Fair Value
Sovereign & Public Finance	$	182	$	614	0.0	%
Telecommunications	77,564		72,877		3.8
Transportation: Cargo	1,467		1,417		0.1

Utilities: Electric	924		904		0.0
Wholesale	27,659		27,840		1.5
	$	1,963,144	$	1,896,420	100.0	%

The geographical composition of investments at fair value as of June 30, 2023 was as follows:


Geography	Amortized Cost		Fair Value		% of Fair Value
Australia	$	2,801	$	2,856	0.2	%
Canada	47,366		48,313		2.5

Italy	5,830		5,656		0.3
Luxembourg	41,363		39,184		2.1
Sweden	1,168		240		0.0
United Kingdom	75,141		74,696		3.9
United States	1,789,475		1,725,475		91.0
Total	$	1,963,144	$	1,896,420	100.0	%

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
First Lien Debt (66.3% of fair value)
ADPD Holdings, LLC	^*	(2)(3)(14)(15)	Consumer Services	SOFR	6.00%	10.37%	8/16/2022	8/15/2028	$	9,913	$	9,651	$	9,571	1.04	%
Advanced Web Technologies Holding Company	^*	(2)(3)(14)	Containers, Packaging & Glass	LIBOR	6.25%	10.67%	12/17/2020	12/17/2026	9,315		9,144		9,196		1.00
Airnov, Inc.	^*	(2)(3)(14)	Containers, Packaging & Glass	LIBOR	5.00%	9.75%	12/20/2019	12/19/2025	2,035		2,013		2,019		0.22
Allied Universal Holdco LLC	^	(2)(3)(15)	Business Services	LIBOR	3.75%	8.17%	2/17/2021	5/14/2028	493		494		467		0.05
Alpine Acquisition Corp II	^*	(2)(3)(14)(15)	Transportation: Cargo	SOFR	5.50%	9.76%	4/19/2022	11/30/2026	7,597		7,406		7,188		0.78
American Physician Partners, LLC	^*	(2)(3)(15)	Healthcare & Pharmaceuticals	SOFR	6.75%, 3.50% PIK	14.67%	1/7/2019	8/5/2022	30,121		30,125		26,002		2.83
American Physician Partners, LLC	^	(2)(3)(14)(15)	Healthcare & Pharmaceuticals	SOFR	6.75%, 3.50% PIK	14.67%	12/16/2022	2/15/2023	799		764		751		0.08
Analogic Corporation	^*	(2)(3)(14)	Capital Equipment	LIBOR	5.25%	9.67%	6/22/2018	6/22/2024	2,462		2,449		2,402		0.26
Applied Technical Services, LLC	^	(2)(3)(14)	Business Services	LIBOR	5.75%	10.52%	12/29/2020	12/29/2026	533		524		531		0.06
Appriss Health, LLC	^	(2)(3)(14)	Healthcare & Pharmaceuticals	LIBOR	7.25%	11.54%	5/6/2021	5/6/2027	36,831		36,218		35,303		3.85
Apptio, Inc.	^	(2)(3)(14)	Software	LIBOR	6.00%	9.94%	1/10/2019	1/10/2025	6,604		6,544		6,604		0.72
Ascend Buyer, LLC	^*	(2)(3)(14)(15)	Containers, Packaging & Glass	SOFR	6.25%	10.67%	9/30/2021	9/30/2028	3,420		3,342		3,338		0.36
Associations, Inc.	^	(2)(3)(14)	Construction & Building	SOFR	4.00%, 2.50% PIK	11.04%	7/2/2021	7/2/2027	12,854		12,754		12,451		1.36
Atlas AU Bidco Pty Ltd (Australia)	^	(2)(3)(7)(14)	High Tech Industries	SOFR	7.25%	11.48%	12/15/2022	12/12/2029	2,890		2,796		2,796		0.31
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^*	(2)(3)(7)	Software	LIBOR	6.00%	10.32%	12/24/2019	12/24/2026	32,158		31,649		30,389		3.31
Avalara, Inc.	^	(2)(3)(14)	Diversified Financial Services	SOFR	7.25%	11.83%	10/19/2022	10/19/2028	22,500		21,898		21,752		2.37
Barnes & Noble, Inc.	^	(2)(3)(11)(15)	Retail	SOFR	8.31%	12.73%	8/7/2019	12/20/2026	27,848		27,073		26,771		2.92
BlueCat Networks, Inc. (Canada)	^	(2)(3)(7)(14)	High Tech Industries	SOFR	4.00%, 2.00% PIK	10.46%	8/8/2022	8/8/2028	3,198		3,126		3,092		0.34
BMS Holdings III Corp.	^	(2)(3)(14)	Construction & Building	LIBOR	5.50%	10.23%	9/30/2019	9/30/2026	4,832		4,688		4,658		0.51
Bradyifs Holdings, LLC	^*	(2)(3)(14)(15)	Wholesale	SOFR	6.25%	10.83%	2/21/2020	11/22/2025	12,884		12,650		12,720		1.39
Bubbles Bidco S.P.A. (Italy)	^	(2)(7)(14)	Consumer Goods: Non-Durable	LIBOR	9.25% (100% PIK)	11.38%	10/20/2021	10/20/2028	€	5,189	5,815		5,505		0.60
Bubbles Bidco S.P.A. (Italy)	^	(2)(7)(14)	Consumer Goods: Non-Durable	LIBOR	6.25%	8.38%	10/20/2021	10/20/2028	€	—	—		(40)		0.00
Celerion Buyer, Inc.	^*	(2)(3)(14)	Healthcare & Pharmaceuticals	SOFR	6.50%	10.64%	11/3/2022	11/3/2029	3,152		3,056		3,054		0.33
Chartis Holding, LLC	^*	(2)(3)(14)	Business Services	LIBOR	5.00%	9.77%	5/1/2019	5/1/2025	687		679		680		0.07

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
Chemical Computing Group ULC (Canada)	^*	(2)(3)(7)(14) (15)	Software	SOFR	4.50%	8.57%	8/30/2018	8/30/2024	$	462	$	461	$	455	0.05	%
CircusTrix Holdings, LLC	^*	(2)(3)	Leisure Products & Services	LIBOR	5.50%	9.88%	2/2/2018	1/16/2024	10,555		10,542		10,476		1.14
CircusTrix Holdings, LLC	^	(2)(3)	Leisure Products & Services	LIBOR	5.50%	9.88%	1/8/2021	7/16/2023	557		500		557		0.06
Comar Holding Company, LLC	^*	(2)(3)(14)	Containers, Packaging & Glass	LIBOR	5.75%	10.47%	6/18/2018	6/18/2024	27,638		27,461		26,671		2.91
Cority Software Inc. (Canada)	^*	(2)(3)(7)(14)	Software	SOFR	5.50%	9.17%	7/2/2019	7/2/2026	10,409		10,266		10,277		1.12
Cority Software Inc. (Canada)	^	(2)(3)(7)	Software	SOFR	7.50%	11.06%	9/3/2020	7/2/2026	1,860		1,823		1,848		0.20
CPI Intermediate Holdings, Inc.	^*	(2)(3)(14)	Telecommunications	SOFR	5.50%	9.68%	10/6/2022	10/6/2029	3,872		3,790		3,776		0.41
CST Holding Company	^*	(2)(3)(14)(15)	Consumer Goods: Non-Durable	SOFR	6.75%	10.97%	11/1/2022	11/1/2028	5,031		4,871		4,868		0.53
DCA Investment Holding LLC	^*	(2)(3)(14)	Healthcare & Pharmaceuticals	SOFR	6.41%	10.46%	3/11/2021	4/3/2028	14,288		14,137		13,523		1.47
Denali Midco 2, LLC	^	(2)(3)(14)(15)	Consumer Services	SOFR	6.50%	10.92%	9/15/2022	12/22/2027	7,696		7,411		7,317		0.80
DermaRite Industries, LLC	^*	(2)(3)(8)	Healthcare & Pharmaceuticals	LIBOR	7.00%	8.00%	3/3/2017	6/30/2023	20,767		20,202		9,261		1.01
Dermatology Associates	^	(2)(3)(15)	Healthcare & Pharmaceuticals	SOFR	6.25% (100% PIK)	10.80%	5/31/2016	3/31/2023	27,548		27,548		27,523		3.00
Dermatology Associates	^	(2)(3)(8)(11)	Healthcare & Pharmaceuticals	SOFR	11.40% (100% PIK)	12.77%	5/31/2016	3/31/2023	38,724		24,963		27,526		3.00
Diligent Corporation	^	(2)(3)(14)	Telecommunications	LIBOR	6.25%	10.63%	8/4/2020	8/4/2025	659		647		630		0.07
Dwyer Instruments, Inc.	^*	(2)(3)(14)	Capital Equipment	LIBOR	6.00%	10.74%	7/21/2021	7/21/2027	3,851		3,777		3,774		0.41
Eliassen Group, LLC	^*	(2)(3)(14)	Business Services	SOFR	5.50%	10.07%	4/14/2022	4/14/2028	1,580		1,515		1,523		0.17
Ellkay, LLC	^*	(2)(3)(14)	Healthcare & Pharmaceuticals	LIBOR	6.25%	11.00%	9/14/2021	9/14/2027	14,107		13,849		13,540		1.48
Emergency Communications Network, LLC	^*	(2)(3)	Telecommunications	SOFR	2.50%, 5.25% PIK	11.84%	6/1/2017	6/1/2024	26,559		26,522		22,753		2.48
EPS Nass Parent, Inc.	^	(2)(3)(14)	Utilities: Electric	LIBOR	5.75%	10.48%	4/19/2021	4/19/2028	922		906		877		0.10
EvolveIP, LLC	^*	(2)(3)(14)(15)	Telecommunications	SOFR	5.50%	10.09%	11/26/2019	6/7/2025	5,556		5,554		5,447		0.59
Excel Fitness Holdings, Inc.	^*	(2)(3)(14)(15)	Leisure Products & Services	SOFR	5.25%	10.25%	4/29/2022	4/29/2029	6,671		6,541		6,344		0.69
Excelitas Technologies Corp.	^	(2)(3)(14)(15)	Capital Equipment	SOFR	5.75%	10.12%	8/12/2022	8/12/2029	3,174		3,107		3,046		0.33
Excelitas Technologies Corp.	^	(2)	Capital Equipment	EURIBOR	5.75%	7.55%	8/12/2022	8/12/2029	€	1,275	1,284		1,317		0.14
FPG Intermediate Holdco, LLC	^	(2)(3)(14)(15)	Consumer Services	SOFR	6.50%	10.92%	8/5/2022	3/5/2027	427		347		235		0.03

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
Greenhouse Software, Inc.	^	(2)(3)(14)	Software	SOFR	7.00%	11.58%	3/1/2021	9/1/2028	$	32,796	$	32,066	$	31,504	3.43	%
Guidehouse LLP	^	(2)(3)	Sovereign & Public Finance	LIBOR	6.25%	10.63%	9/30/2022	10/16/2028	80		78		78		0.01
Hadrian Acquisition Limited (United Kingdom)	^	(2)(3)(7)	Diversified Financial Services	SONIA	5.26%, 3.47% PIK	12.16%	2/28/2022	2/28/2029	£	14,676	19,100		17,343		1.89
Hadrian Acquisition Limited (United Kingdom)	^	(2)(3)(7)(14)	Diversified Financial Services	SONIA	5.00%, 2.75% PIK	11.18%	2/28/2022	2/28/2029	£	3,580	4,094		4,171		0.45
Harbour Benefit Holdings, Inc.	^*	(2)(3)(14)	Business Services	LIBOR	5.25%	9.95%	12/13/2017	12/13/2024	3,000		2,977		2,963		0.32
Heartland Home Services, Inc.	^*	(2)(3)(14)	Consumer Services	LIBOR	5.75%	10.10%	2/10/2022	12/15/2026	9,538		9,414		9,275		1.01
Heartland Home Services, Inc.	^*	(2)(3)(14)	Consumer Services	LIBOR	6.00%	10.38%	12/15/2020	12/15/2026	7,189		7,125		7,114		0.78
Hercules Borrower LLC	^*	(2)(3)(14)	Environmental Industries	LIBOR	6.50%	10.67%	12/14/2020	12/14/2026	18,497		18,097		17,818		1.94
Higginbotham Insurance Agency, Inc.	^	(2)(3)	Diversified Financial Services	LIBOR	5.25%	9.63%	11/25/2020	11/25/2026	451		446		441		0.05
Hoosier Intermediate, LLC	^*	(2)(3)(14)	Healthcare & Pharmaceuticals	LIBOR	5.50%	10.11%	11/15/2021	11/15/2028	10,709		10,497		10,037		1.09
HS Spa Holdings Inc.	^	(2)(3)(14)	Consumer Services	SOFR	5.75%	10.45%	6/2/2022	6/2/2029	8,605		8,422		8,336		0.91
iCIMS, Inc.	^	(2)(3)(14)	Software	SOFR	7.25%	11.52%	8/18/2022	8/18/2028	25,540		25,075		24,272		2.65
Infront Luxembourg Finance S.À R.L. (Luxembourg)	^	(2)(7)	Leisure Products & Services	LIBOR	9.00%	10.95%	5/28/2021	5/28/2027	€	8,250	9,804		8,677		0.95
Integrity Marketing Acquisition, LLC	^	(2)(3)	Diversified Financial Services	LIBOR	6.02%	10.57%	12/3/2021	8/27/2025	429		425		414		0.05
IQN Holding Corp.	^	(2)(3)(14)	Business Services	SOFR	5.25%	9.64%	5/2/2022	5/2/2029	6,823		6,749		6,699		0.73
Jeg's Automotive, LLC	^*	(2)(3)(14)	Automotive	LIBOR	6.00%	10.75%	12/22/2021	12/22/2027	20,624		20,200		19,131		2.09
K2 Insurance Services, LLC	^*	(2)(3)(14)	Diversified Financial Services	LIBOR	5.00%	9.73%	7/3/2019	7/1/2026	3,330		3,283		3,288		0.36
Kaseya, Inc.	^	(2)(3)(14)	High Tech Industries	SOFR	5.75%	10.33%	6/23/2022	6/23/2029	35,453		34,726		34,323		3.74
Lifelong Learner Holdings, LLC	^*	(2)(3)(14)	Business Services	LIBOR	5.75%	10.16%	10/18/2019	10/18/2026	25,965		25,657		24,347		2.65
LinQuest Corporation	*	(2)(3)	Aerospace & Defense	LIBOR	5.75%	9.10%	7/28/2021	7/28/2028	9,875		9,710		8,927		0.97
Liqui-Box Holdings, Inc.	^	(2)(3)(14)	Containers, Packaging & Glass	LIBOR	4.50%	8.35%	6/3/2019	6/3/2024	2,034		2,025		2,034		0.22
LVF Holdings, Inc.	^*	(2)(3)(14)	Beverage & Food	LIBOR	6.25%	10.98%	6/10/2021	6/10/2027	41,295		40,564		38,735		4.22
Material Holdings, LLC	^*	(2)(3)(14)	Business Services	SOFR	6.00%	10.67%	8/19/2021	8/19/2027	8,082		7,944		7,655		0.83
Maverick Acquisition, Inc.	^*	(2)(3)	Aerospace & Defense	LIBOR	6.25%	10.98%	6/1/2021	6/1/2027	35,622		35,069		29,595		3.24
Medical Manufacturing Technologies, LLC	^*	(2)(3)(14)(15)	Healthcare & Pharmaceuticals	SOFR	5.50%	10.18%	12/23/2021	12/23/2027	28,900		28,368		28,308		3.09
NEFCO Holding Company LLC	^*	(2)(3)(14)(15)	Construction & Building	SOFR	6.50%	10.95%	8/5/2022	8/5/2028	5,525		5,389		5,385		0.59
NMI AcquisitionCo, Inc.	^*	(2)(3)(14)	High Tech Industries	LIBOR	5.75%	10.13%	9/6/2017	9/6/2025	39,913		39,860		38,845		4.23

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
North Haven Fairway Buyer, LLC	^*	(2)(3)(14)	Consumer Services	SOFR	6.50%	11.08%	5/17/2022	5/17/2028	$	22,970	$	22,530	$	22,535	2.46	%
North Haven Stallone Buyer, LLC	^	(2)(3)(14)	Consumer Services	SOFR	5.75%	10.34%	10/11/2022	5/24/2027	—		(4)		(4)		0.00
Oak Purchaser, Inc.	^	(2)(3)(14)	Business Services	SOFR	5.50%	9.48%	4/28/2022	4/28/2028	5,851		5,779		5,663		0.62
Performance Health Holdings, Inc.	*	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	6.00%	10.73%	7/12/2021	7/12/2027	6,444		6,342		6,276		0.68
PF Atlantic Holdco 2, LLC	^	(2)(3)(14)	Leisure Products & Services	LIBOR	5.50%	10.25%	11/12/2021	11/12/2027	4,170		3,932		3,918		0.43
PF Growth Partners, LLC	*	(2)(3)	Leisure Products & Services	LIBOR	5.00%	9.48%	7/1/2019	7/11/2025	7,957		7,901		7,902		0.86
PPT Management Holdings, LLC	^	(2)(3)(8)(14)	Healthcare & Pharmaceuticals	LIBOR	8.50% (100% PIK)	9.50%	12/15/2016	1/31/2023	29,446		29,437		21,145		2.30
Project Castle, Inc.	*	(2)(3)	Capital Equipment	SOFR	5.50%	10.08%	6/24/2022	6/1/2029	7,481		6,742		6,013		0.67
Prophix Software Inc. (Canada)	^	(2)(3)(7)(14)	Software	LIBOR	6.50%	10.67%	2/1/2021	2/1/2026	10,963		10,771		10,963		1.19
PXO Holdings I Corp.	^*	(2)(3)(14)(15)	Chemicals, Plastics & Rubber	SOFR	5.50%	9.05%	3/8/2022	3/8/2028	17,068		16,728		16,715		1.82
QNNECT, LLC	^*	(2)(3)(14)	Aerospace & Defense	SOFR	7.00%	11.11%	11/2/2022	11/2/2029	5,281		5,085		5,081		0.55
Quantic Electronics, LLC	^*	(2)(3)(14)	Aerospace & Defense	LIBOR	6.25%	10.97%	11/19/2020	11/19/2026	15,582		15,344		14,768		1.61
Quantic Electronics, LLC	^*	(2)(3)(14)	Aerospace & Defense	LIBOR	6.25%	10.95%	3/1/2021	3/1/2027	9,832		9,652		9,218		1.00
QW Holding Corporation	^*	(2)(3)	Environmental Industries	LIBOR	5.50%	9.64%	8/31/2016	8/31/2026	32,276		32,232		31,718		3.46
Radwell Parent, LLC	^	(2)(3)(14)(15)	Wholesale	SOFR	6.75%	11.33%	12/1/2022	4/1/2029	18,605		18,011		18,005		1.96
Regency Entertainment, Inc.	^	(2)(3)	Media: Diversified & Production	LIBOR	6.75%	11.13%	5/22/2020	10/22/2025	20,000		19,765		19,760		2.15
Riveron Acquisition Holdings, Inc.	*	(2)(3)	Diversified Financial Services	LIBOR	5.75%	10.48%	5/22/2019	5/22/2025	1,676		1,648		1,676		0.18
RSC Acquisition, Inc.	^	(2)(3)(14)(15)	Diversified Financial Services	SOFR	5.50%	9.83%	11/1/2019	11/1/2026	11,010		10,886		10,447		1.14
Sapphire Convention, Inc.	^	(2)(3)(14)	Telecommunications	LIBOR	5.25%	9.80%	11/20/2018	11/20/2025	28,051		27,773		27,341		2.98
SCP Eye Care HoldCo, LLC	^	(2)(3)(14)(15)	Healthcare & Pharmaceuticals	SOFR	5.75%	9.47%	10/7/2022	10/7/2029	122		117		118		0.01
Smarsh Inc.	^	(2)(3)(14)	Software	SOFR	6.50%	11.29%	2/18/2022	2/18/2029	7,347		7,192		6,987		0.76
SPay, Inc.	^*	(2)(3)	Leisure Products & Services	LIBOR	5.75%, 3.50% PIK	13.73%	6/15/2018	6/17/2024	24,292		24,176		21,332		2.33
Speedstar Holding, LLC	^*	(2)(3)	Automotive	LIBOR	7.00%	11.73%	1/22/2021	1/22/2027	26,694		26,305		26,510		2.89
Spotless Brands, LLC	^*	(2)(3)(14)(15)	Consumer Services	SOFR	6.50%	10.80%	6/21/2022	7/25/2028	33,832		33,179		32,779		3.57
Tank Holding Corp.	^*	(2)(3)(14)(15)	Capital Equipment	SOFR	5.75%	10.16%	3/31/2022	3/31/2028	18,067		17,718		17,552		1.91

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
TCFI Aevex LLC	^*	(2)(3)	Aerospace & Defense	LIBOR	6.00%	10.38%	3/18/2020	3/18/2026	$	11,047	$	10,927	$	10,096	1.10	%
The Carlstar Group LLC	^*	(2)(3)(14)(15)	Automotive	SOFR	6.50%	10.92%	7/8/2022	7/8/2027	14,446		14,087		14,210		1.55
TIBCO Software Inc.	*	(2)(3)	High Tech Industries	SOFR	4.50%	9.18%	9/30/2022	3/31/2029	15,000		13,681		13,369		1.46
Trader Corporation (Canada)	^	(2)(3)(7)(14)	Automotive	CDOR	6.75%	11.61%	12/22/2022	12/22/2029	C$	12,081	8,643		8,686		0.95
Trafigura Trading LLC	^	(2)(3)(13)(14)(15)	Metals & Mining	SOFR	8.35%	12.89%	7/26/2021	1/13/2023	8,250		8,076		8,185		0.89
Tufin Software North America, Inc.	^	(2)(3)(14)(15)	Software	SOFR	7.69%	12.01%	8/17/2022	8/17/2028	27,040		26,502		26,162		2.85
Turbo Buyer, Inc.	^	(2)(3)(14)	Automotive	LIBOR	6.00%	11.15%	12/2/2019	12/2/2025	1,714		1,628		1,609		0.18
U.S. Legal Support, Inc.	^*	(2)(3)(14)(15)	Business Services	SOFR	5.75%	10.33%	11/30/2018	11/30/2024	15,844		15,692		15,504		1.69
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage & Food	FIXED	7.50%, 1.00% PIK	8.50%	9/15/2019	9/15/2026	€	4,611	4,935		4,998		0.55
Unifrutti Financing PLC (Cyprus)	^	(7)	Beverage & Food	FIXED	11.00% (100% PIK)	11.00%	10/22/2020	9/15/2026	€	843	953		961		0.10
US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	LIBOR	6.50%, 0.25% PIK	11.47%	4/13/2020	4/13/2026	9,083		8,977		8,619		0.94
USALCO, LLC	*	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	6.00%	10.73%	10/19/2021	10/19/2027	990		973		941		0.10
USR Parent Inc.	^	(2)(3)	Retail	SOFR	7.60%	11.72%	4/22/2022	4/25/2027	4,222		4,185		4,025		0.44
Westfall Technik, Inc.	^*	(2)(3)	Chemicals, Plastics & Rubber	SOFR	6.25%	10.83%	9/13/2018	9/13/2024	21,502		21,396		21,046		2.29
Westfall Technik, Inc.	^	(2)(3)	Chemicals, Plastics & Rubber	SOFR	6.25%	10.79%	7/1/2021	9/13/2024	4,957		4,881		4,852		0.53
Wineshipping.com LLC	^*	(2)(3)(14)	Beverage & Food	LIBOR	5.75%	10.15%	10/29/2021	10/29/2027	4,668		4,539		4,051		0.44
Yellowstone Buyer Acquisition, LLC	^	(2)(3)	Consumer Goods: Durable	LIBOR	5.75%	10.07%	9/13/2021	9/13/2027	444		437		427		0.05
YLG Holdings, Inc.	^	(2)(3)	Consumer Services	LIBOR	5.00%	9.53%	9/30/2020	11/1/2025	1,960		1,918		1,957		0.21
First Lien Debt Total											$	1,371,717	$	1,314,595	143.29

Second Lien Debt (13.3% of fair value)
11852604 Canada Inc. (Canada)	^	(2)(3)(7)	Healthcare & Pharmaceuticals	LIBOR	9.50% (100% PIK)	13.70%	9/30/2021	9/30/2028	$	7,587	$	7,452	$	7,398	0.81	%
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)(7)	Aerospace & Defense	LIBOR	8.25%	12.92%	1/17/2020	1/17/2028	24,814		24,416		25,558		2.80
Aimbridge Acquisition Co., Inc.	^	(2)	Leisure Products & Services	LIBOR	7.50%	11.62%	2/1/2019	2/1/2027	9,241		9,142		8,353		0.91
AP Plastics Acquisition Holdings, LLC	^	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	7.50%	11.85%	8/10/2021	8/10/2029	33,680		32,871		32,320		3.52
AQA Acquisition Holdings, Inc.	^*	(2)(3)	High Tech Industries	LIBOR	7.50%	12.23%	3/3/2021	3/3/2029	35,000		34,275		33,312		3.63

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value(5)		% of Net Assets
Blackbird Purchaser, Inc.	^	(2)(3)(14)	Capital Equipment	LIBOR	7.50%	11.88%	12/14/2021	4/8/2027	$	13,791	$	13,486	$	12,736	1.39	%
Brave Parent Holdings, Inc.	^*	(2)	Software	LIBOR	7.50%	11.88%	10/3/2018	4/19/2026	18,197		17,973		17,504		1.91
Drilling Info Holdings, Inc.	^	(2)	Energy: Oil & Gas	LIBOR	8.25%	12.64%	2/11/2020	7/30/2026	18,600		18,283		18,740		2.04
Jazz Acquisition, Inc.	^	(2)	Aerospace & Defense	LIBOR	8.00%	12.38%	6/13/2019	6/18/2027	23,450		23,227		21,875		2.38
Outcomes Group Holdings, Inc.	^*	(2)	Business Services	LIBOR	7.50%	12.23%	10/23/2018	10/26/2026	1,731		1,728		1,690		0.18
PAI Holdco, Inc.	^	(2)(3)	Automotive	LIBOR	5.50%, 2.00% PIK	11.91%	10/28/2020	10/28/2028	14,089		13,771		13,874		1.51
Peraton Corp.	^*	(2)(3)	Aerospace & Defense	LIBOR	7.75%	12.09%	2/24/2021	2/1/2029	11,941		11,790		11,550		1.26
Quartz Holding Company	^*	(2)	Software	LIBOR	8.00%	12.38%	4/2/2019	4/2/2027	7,048		6,963		6,764		0.74
Stonegate Pub Company Bidco Limited (United Kingdom)	^	(2)(7)	Beverage & Food	SONIA	8.50%	11.74%	3/12/2020	3/12/2028	£	20,000	24,831		22,281		2.43
TruGreen Limited Partnership	^	(2)(3)	Consumer Services	LIBOR	8.50%	13.43%	11/16/2020	11/2/2028	13,000		12,791		11,120		1.21
World 50, Inc.	^	(9)	Business Services	FIXED	11.50%	11.50%	1/10/2020	1/9/2027	18,552		18,267		17,628		1.92
Second Lien Debt Total											$	271,266	$	262,703	28.63


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (4.8% of fair value)
ANLG Holdings, LLC	^	(6)	Capital Equipment	6/22/2018	592	$	592	$	675	0.07	%
Appriss Health, LLC	^	(6)	Healthcare & Pharmaceuticals	5/6/2021	5	5,002		4,821		0.53
Atlas Ontario LP (Canada)	^	(6)(7)	Business Services	4/7/2021	5,114	5,114		5,114		0.56
Avenu Holdings, LLC	^	(6)	Sovereign & Public Finance	9/28/2018	172	104		545		0.06
Blackbird Holdco, Inc.	^	(6)	Capital Equipment	12/14/2021	11	10,809		10,210		1.11
Buckeye Parent, LLC	^	(6)	Automotive	12/22/2021	885	885		576		0.06
Chartis Holding, LLC	^	(6)	Business Services	5/1/2019	433	428		595		0.07
CIP Revolution Holdings, LLC	^	(6)	Media: Advertising, Printing & Publishing	8/19/2016	318	318		257		0.03
Cority Software Inc. (Canada)	^	(6)(7)	Software	7/2/2019	250	250		641		0.07
Derm Growth Partners III, LLC	^	(6)	Healthcare & Pharmaceuticals	5/31/2016	1,000	1,000		—		0.00
Diligent Corporation	^	(6)	Telecommunications	4/5/2021	12	11,509		10,960		1.19
ECP Parent, LLC	^	(6)	Healthcare & Pharmaceuticals	3/29/2018	268	—		290		0.03
GB Vino Parent, L.P.	^	(6)	Beverage & Food	10/29/2021	4	351		249		0.03
Integrity Marketing Group, LLC	^	(6)	Diversified Financial Services	12/21/2021	16,705	16,472		16,597		1.81
K2 Insurance Services, LLC	^	(6)	Diversified Financial Services	7/3/2019	433	306		867		0.09
Legacy.com, Inc.	^	(6)	High Tech Industries	3/20/2017	1,500	1,500		1,079		0.12
NearU Holdings LLC	^	(6)	Consumer Services	8/16/2022	25	2,470		2,470		0.27
NEFCO Holding Company LLC	^	(6)	Construction & Building	8/5/2022	1	628		628		0.07

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated (1)		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
North Haven Goldfinch Topco, LLC	^	(6)	Containers, Packaging & Glass	6/18/2018	2,315	$	2,315	$	1,300	0.14	%
Pascal Ultimate Holdings, L.P	^	(6)	Capital Equipment	7/21/2021	36	364		850		0.09
Picard Parent, Inc.	^	(6)	High Tech Industries	9/30/2022	9	8,520		8,520		0.93
Profile Holdings I, LP	^	(6)	Chemicals, Plastics & Rubber	3/8/2022	5	523		673		0.07
Sinch AB (Sweden)	^	(6)(7)	High Tech Industries	3/26/2019	104	1,168		382		0.04
Tailwind HMT Holdings Corp.	^	(6)	Energy: Oil & Gas	11/17/2017	22	1,558		1,454		0.16
Talon MidCo 1 Limited	^	(6)	Software	8/17/2022	145,631	1,456		1,611		0.18
Tank Holding Corp.	^	(6)	Capital Equipment	3/26/2019	850	—		2,687		0.29
Titan DI Preferred Holdings, Inc.	^	(6)	Energy: Oil & Gas	2/11/2020	14,666	14,439		14,263		1.55
Turbo Buyer, Inc.	^	(6)	Automotive	12/2/2019	1,925	933		2,307		0.25
U.S. Legal Support Investment Holdings, LLC	^	(6)	Business Services	11/30/2018	641	641		551		0.06
Unifrutti Financing PLC (Cyprus)	^	(6)(7)	Beverage & Food	10/22/2020	1	531		702		0.08
Unifrutti Financing PLC (Cyprus)	^	(6)(7)	Beverage & Food	10/22/2020	—	133		306		0.03
W50 Parent LLC	^	(6)	Business Services	1/10/2020	500	190		698		0.08
Zenith American Holding, Inc.	^	(6)	Business Services	12/13/2017	1,565	760		1,312		0.14
Equity Investments Total						$	91,269	$	94,190	10.27	%
Total investments—non-controlled/non-affiliated						$	1,734,252	$	1,671,488	182.19	%


Investments—non-controlled/affiliated		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par/ Principal Amount **		Amortized Cost (4)		Fair Value (5)		% of Net Assets
First Lien Debt (2.3% of fair value)
Direct Travel, Inc.	^*	(2)(3)(12)(15)	Leisure Products & Services	SOFR	8.50%	13.23%	10/14/2016	10/1/2025	$	43,520	$	42,012	$	42,636	4.65	%
Direct Travel, Inc.	^	(2)(3)(12)(14)(15)	Leisure Products & Services	SOFR	6.00%	9.79%	10/1/2020	10/1/2025	2,731		2,614		2,731		0.30
First Lien Debt Total											$	44,626	$	45,367	4.95	%


Investments—non-controlled/affiliated		Footnotes	Industry	Acquisition Date	Shares/ Units	Cost		Fair Value (5)		% of Net Assets
Equity Investments (0.0% of fair value)
Direct Travel, Inc.	^	(6)(12)	Leisure Products & Services	10/1/2020	43	$	—	$	—	—	%
Equity Investments Total					43	$	—	$	—	—	%
Total investments—non-controlled/affiliated						$	44,626	$	45,367	4.95	%

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—controlled/affiliated		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Acquisition Date	Maturity Date	Par Amount/ LLC Interest		Cost		Fair Value(7)		% of Net Assets

Investment Funds (13.3% of fair value)
Middle Market Credit Fund II, LLC, Member's Interest	^	(7)(10)	Investment Funds			13.00%	11/3/2020	12/31/2030	$	78,122	$	78,096	$	72,957	7.96	%
Middle Market Credit Fund, LLC, Subordinated Loan and Member's Interest	^	(7)(10)	Investment Funds			10.40%	2/29/2016	12/31/2024	193,000		193,001		190,065		20.72
Middle Market Credit Fund, Mezzanine Loan		(2)(7)(9)(10)	Investment Funds	LIBOR	9.00%	13.77%	6/30/2016	5/21/2023	—		—		—		—
Investment Funds Total											$	271,097	$	263,022	28.67	%
Total investments—controlled/affiliated											$	271,097	$	263,022	28.67	%
Total investments											$	2,049,975	$	1,979,877	215.81	%

^ Denotes that all or a portion of the assets are owned by Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL” or the “Company”). The Company has entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). The lenders of the Credit Facility have a first lien security interest in substantially all of the portfolio investments held by the Company (see Note 7, Borrowings, to these unaudited consolidated financial statements). Accordingly, such assets are not available to creditors of Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”).

** Par amount is denominated in USD (“$”) unless otherwise noted, as denominated in Euro (“€”), Canadian dollar (“C$”) or British Pound (“£”)

(1)Unless otherwise indicated, issuers of debt and equity investments held by the Company are domiciled in the United States. Under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”), the Company would be deemed to “control” a portfolio company if the Company owned more than 25% of its outstanding voting securities and/or held the power to exercise control over the management or policies of the portfolio company. As of December 31, 2022, the Company does not “control” any of these portfolio companies. Under the Investment Company Act, the Company would be deemed an “affiliated person” of a portfolio company if the Company owns 5% or more of the portfolio company’s outstanding voting securities. As of December 31, 2022, the Company is not an “affiliated person” of any of these portfolio companies. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR (“L”), the Secured Overnight Financing Rate (“SOFR”), or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, the Company has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2022. As of December 31, 2022, the reference rates for our variable rate loans were the 30-day LIBOR at 4.39%, the 90-day LIBOR at 4.77% and the 180-day LIBOR at 5.14%, the 30-day SOFR at 4.36%, and the 90-day SOFR at 4.59%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(5)Fair value is determined in good faith by the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act (see Note 2, Significant Accounting Policies, and Note 3, Fair Value Measurements, to these unaudited consolidated financial statements), pursuant to the Company’s valuation policy. The fair value of all first lien and second lien debt investments, equity investments and the investment fund was determined using significant unobservable inputs.

(6)Security acquired in transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act, unless otherwise noted. As of December 31, 2022, the aggregate fair value of these securities is $94,190, or 10.27% of the Company’s net assets.

(8)Loan was on non-accrual status as of December 31, 2022.

(9)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company/investment fund.

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)

(10)Under the Investment Company Act, the Company is deemed to be an “affiliated person” of and “control” this investment fund because the Company owns more than 25% of the investment fund’s outstanding voting securities and/or has the power to exercise control over management or policies of such investment fund. See Notes 5, Middle Market Credit Fund, LLC and 6, Middle Market Credit Fund II, LLC, to these unaudited consolidated financial statements for more details. Transactions related to investments in controlled affiliates for the year ended December 31, 2022, were as follows:


Investments—controlled/affiliated	Fair Value as of December 31, 2021		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of December 31, 2022		Dividend Income
Middle Market Credit Fund II, LLC, Member’s Interest	$	77,958	$	—	$	—	$	—	$	(5,001)	$	72,957	$	10,348
Middle Market Credit Fund, LLC, Subordinated Loan and Member’s Interest	184,141		—		—		—		5,924		190,065		20,500
Middle Market Credit Fund, Mezzanine Loan	—		—		—		—		—		—		—
Total investments—controlled/affiliated	$	262,099	$	—	$	—	$	—	$	923	$	263,022	$	30,848


Investments—controlled/affiliated	Fair Value as of December 31, 2021		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of December 31, 2022		Interest and Other Income
SolAero Technologies Corp. (Priority Term Loan)	$	2,251	$	—	$	(2,240)	$	—	$	(11)	$	—	$	8
SolAero Technologies Corp. (A1 Term Loan)	2,850		—		(3,166)		—		316		—		1,031
SolAero Technologies Corp. (A2 Term Loan)	7,835		—		(8,707)		—		872		—		2,834
Solaero Technology Corp. (Equity)	—		—		(4,830)		2,015		2,815		—		—
Total investments—controlled/affiliated	$	12,936	$	—	$	(18,943)	$	2,015	$	3,992	$	—	$	3,873

(11)In addition to the interest earned based on the stated interest rate of this loan, which is the amount reflected in this schedule, the Company is entitled to receive additional interest as a result of an agreement among lenders, which has been included in the spread of each applicable investment. Pursuant to the agreement among lenders in respect of this loan, this investment represents a first lien/last out loan, which has a secondary priority behind the first lien/first out loan with respect to principal, interest and other payments.

(12)Under the Investment Company Act, the Company is deemed an “affiliated person” of this portfolio company because the Company owns 5% or more of the portfolio company’s outstanding voting securities. Transactions related to the portfolio company during the year ended December 31, 2022 were as follows:


Investments—non-controlled/affiliated	Fair Value as of December 31, 2021		Additions/Purchases		Reductions/Sales/ Paydowns		Net Realized Gain (Loss)		Net Change in Unrealized Appreciation (Depreciation)		Fair Value as of December 31, 2022		Interest and Other Income
Direct Travel, Inc.	$	27,555	$	7,330	$	(1,177)	$	—	$	8,928	$	42,636	$	9,864
Direct Travel, Inc.	2,731		11		—		—		(11)		2,731		232
Direct Travel, Inc. (Equity)	—		—		—		—		—		—		—
Total investments—non-controlled/affiliated	$	30,286	$	7,341	$	(1,177)	$	—	$	8,917	$	45,367	$	10,096

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)

(13)The investment is secured by receivables purchased from the portfolio company, with an implied discount of 12.10%. The investment was made via a tranched participation arrangement between the purchaser of such receivables and the Company. The investment has a secondary priority behind the rights of such purchaser.

(14)As of December 31, 2022, the Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
First and Second Lien Debt—unfunded delayed draw and revolving term loans commitments
ADPD Holdings, LLC	Delayed Draw	0.50%	$	1,083	$	(27)
ADPD Holdings, LLC	Revolver	0.50	621		(15)
ADPD Holdings, LLC	Delayed Draw	0.50	299		(7)
ADPD Holdings, LLC	Delayed Draw	0.50	1,951		(48)
Advanced Web Technologies Holding Company	Revolver	0.50	854		(9)
Advanced Web Technologies Holding Company	Delayed Draw	1.00	1,602		(16)
Airnov, Inc.	Revolver	0.50	688		(4)
Alpine Acquisition Corp II	Revolver	0.50	3,447		(128)
American Physician Partners, LLC	Delayed Draw	1.00	1,596		(32)
Analogic Corporation	Revolver	0.50	19		—
Applied Technical Services, LLC	Revolver	0.50	37		—
Appriss Health, LLC	Revolver	0.50	2,963		(114)
Apptio, Inc.	Revolver	0.50	947		—
Ascend Buyer, LLC	Revolver	0.50	1,284		(23)
Associations, Inc.	Revolver	0.50	723		(21)
Atlas AU Bidco Pty Ltd (Australia)	Revolver	0.50	268		(8)
Avalara, Inc.	Revolver	0.50	2,250		(68)
Blackbird Purchaser, Inc.	Delayed Draw	1.00	4,597		(264)
BlueCat Networks, Inc. (Canada)	Delayed Draw	0.50	240		(7)
BlueCat Networks, Inc. (Canada)	Delayed Draw	0.50	405		(11)
BMS Holdings III Corp.	Delayed Draw	2.65	4,844		(87)
Bradyifs Holdings, LLC	Revolver	0.50	739		(7)
Bradyifs Holdings, LLC	Delayed Draw	1.00	2,634		(27)
Bubbles Bidco S.P.A. (Italy)	Delayed Draw	2.80	€	873	—
Bubbles Bidco S.P.A. (Italy)	Revolver	—	€	537	—
Celerion Buyer, Inc.	Revolver	0.50	249		(6)
Celerion Buyer, Inc.	Delayed Draw	1.00	499		(12)
Chartis Holding, LLC	Revolver	0.50	217		(1)
Chemical Computing Group ULC (Canada)	Revolver	0.50	29		—
Comar Holding Company, LLC	Revolver	0.50	1,467		(49)
Cority Software Inc. (Canada)	Revolver	0.50	3,000		(29)
CPI Intermediate Holdings, Inc.	Delayed Draw	—	927		(19)

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
CST Holding Company	Revolver	0.50%	$	423	$	(13)
DCA Investment Holding LLC	Delayed Draw	1.00	169		(9)
Denali Midco 2, LLC	Delayed Draw	1.00	2,286		(87)
Diligent Corporation	Revolver	0.50	33		(1)
Direct Travel, Inc.	Delayed Draw	0.50	1,657		—
Dwyer Instruments, Inc.	Revolver	0.50	994		(15)
Dwyer Instruments, Inc.	Delayed Draw	1.00	161		(2)
Eliassen Group, LLC	Delayed Draw	1.00	3,310		(38)
Ellkay, LLC	Revolver	0.50	1,786		(64)
EPS Nass Parent, Inc.	Revolver	0.50	30		(1)
EPS Nass Parent, Inc.	Delayed Draw	1.00	37		(2)
EvolveIP, LLC	Revolver	0.50	655		(12)
Excel Fitness Holdings, Inc.	Revolver	0.50	438		(20)
Excelitas Technologies Corp.	Revolver	0.50	160		(6)
Excelitas Technologies Corp.	Delayed Draw	0.50	152		(6)
FPG Intermediate Holdco, LLC	Delayed Draw	1.00	3,973		(174)
Greenhouse Software, Inc.	Revolver	0.50	1,471		(54)
Greenhouse Software, Inc.	Revolver	0.50	733		(27)
Hadrian Acquisition Limited (United Kingdom)	Delayed Draw	2.33	£	2,086	(39)
Harbour Benefit Holdings, Inc.	Revolver	0.50	3,180		(19)
Heartland Home Services, Inc.	Delayed Draw	0.75	5,469		(96)
Heartland Home Services, Inc.	Revolver	0.50	619		(6)
Hercules Borrower LLC	Revolver	0.50	1,929		(64)
Hoosier Intermediate, LLC	Revolver	0.50	1,600		(87)
HS Spa Holdings Inc.	Revolver	0.50	1,235		(34)
iCIMS, Inc.	Revolver	0.50	2,432		(89)
iCIMS, Inc.	Delayed Draw	—	6,784		(247)
IQN Holding Corp.	Delayed Draw	1.00	696		(11)
IQN Holding Corp.	Revolver	0.50	489		(8)
Jeg's Automotive, LLC	Delayed Draw	1.00	4,167		(251)
K2 Insurance Services, LLC	Revolver	0.50	1,120		(11)
Kaseya, Inc.	Revolver	0.50	2,054		(60)
Kaseya, Inc.	Delayed Draw	0.50	1,146		(33)
Lifelong Learner Holdings, LLC	Revolver	0.50	2		—
Liqui-Box Holdings, Inc.	Revolver	0.50	596		—
LVF Holdings, Inc.	Revolver	0.50	992		(54)
LVF Holdings, Inc.	Delayed Draw	1.00	4,670		(254)

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
Material Holdings, LLC	Delayed Draw	—%	$	977	$	(44)
Material Holdings, LLC	Revolver	1.00	499		(22)
Medical Manufacturing Technologies, LLC	Revolver	0.50	1,446		(27)
Medical Manufacturing Technologies, LLC	Delayed Draw	1.00	826		(16)
NEFCO Holding Company LLC	Delayed Draw	1.00	380		(7)
NEFCO Holding Company LLC	Delayed Draw	1.00	553		(11)
NEFCO Holding Company LLC	Revolver	0.50	763		(15)
NMI AcquisitionCo, Inc.	Revolver	0.50	1,280		(33)
North Haven Fairway Buyer, LLC	Revolver	0.50	1,154		(21)
North Haven Stallone Buyer, LLC	Delayed Draw	1.00	200		(4)
Oak Purchaser, Inc.	Delayed Draw	0.50	1,623		(38)
Oak Purchaser, Inc.	Revolver	0.50	584		(14)
PF Atlantic Holdco 2, LLC	Delayed Draw	1.00	7,448		(130)
PF Atlantic Holdco 2, LLC	Revolver	0.50	2,759		(48)
PPT Management Holdings, LLC	Revolver	0.50	587		(162)
Prophix Software Inc. (Canada)	Revolver	0.50	1,993		—
PXO Holdings I Corp.	Delayed Draw	1.00	885		(16)
PXO Holdings I Corp.	Revolver	0.50	1,315		(24)
QNNECT, LLC	Delayed Draw	1.00	1,386		(42)
Quantic Electronics, LLC	Revolver	0.50	276		(14)
Quantic Electronics, LLC	Delayed Draw	1.00	2,126		(109)
Radwell Parent, LLC	Revolver	0.38	1,395		(42)
RSC Acquisition, Inc.	Revolver	0.50	462		(21)
RSC Acquisition, Inc.	Delayed Draw	1.00	950		(43)
Sapphire Convention, Inc.	Revolver	0.50	4,188		(92)
SCP Eye Care HoldCo, LLC	Revolver	0.50	17		—
SCP Eye Care HoldCo, LLC	Delayed Draw	1.00	39		(1)
Smarsh Inc.	Revolver	0.50	408		(17)
Smarsh Inc.	Delayed Draw	1.00	816		(34)
Spotless Brands, LLC	Revolver	0.50	1,096		(33)
Tank Holding Corp.	Revolver	0.38	1,379		(37)
The Carlstar Group LLC	Revolver	0.50	3,657		(48)
Trader Corporation (Canada)	Revolver	0.50	C$	906	(31)
Trafigura Trading LLC	Revolver	0.50	388		(3)
Tufin Software North America, Inc.	Revolver	0.50	1,339		(41)
Tufin Software North America, Inc.	Delayed Draw	—	115		(4)
Turbo Buyer, Inc.	Delayed Draw	1.00	2,967		(53)

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)


Investments—non-controlled/non-affiliated	Type	Unused Fee	Par/ Principal Amount		Fair Value
Turbo Buyer, Inc.	Revolver	0.50%	$	1,217	$	(22)
U.S. Legal Support, Inc.	Delayed Draw	0.50	2,032		(37)
U.S. Legal Support, Inc.	Revolver	0.50	735		(13)
Wineshipping.com LLC	Delayed Draw	1.00	1,609		(127)
Wineshipping.com LLC	Revolver	0.50	1,509		(120)
Total unfunded commitments			$	158,206	$	(4,549)

(15) Loans include a credit spread adjustment that ranges from 0.10% to 0.26%.

As of December 31, 2022, investments at fair value consisted of the following:


Type	Amortized Cost		Fair Value		% of Fair Value


First Lien Debt	$	1,416,343	$	1,359,962	68.6	%
Second Lien Debt	271,266		262,703		13.3
Equity Investments	91,269		94,190		4.8
Investment Funds	271,097		263,022		13.3
Total	$	2,049,975	$	1,979,877	100.0	%

The rate type of debt investments at fair value as of December 31, 2022 was as follows:


Rate Type	Amortized Cost		Fair Value		% of Fair Value of First and Second Lien Debt
Floating Rate	$	1,663,454	$	1,599,078	98.5	%
Fixed Rate	24,155		23,587		1.5
Total	$	1,687,609	$	1,622,665	100.0	%

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)

The industry composition of investments at fair value as of December 31, 2022 was as follows:


Industry	Amortized Cost		Fair Value		% of Fair Value
Aerospace & Defense	$	145,220	$	136,668	6.9	%
Automotive	86,452		86,903		4.4
Beverage & Food	76,837		72,283		3.6
Business Services	95,138		93,620		4.7
Capital Equipment	60,328		61,262		3.1
Chemicals, Plastics & Rubber	77,372		76,547		3.9
Construction & Building	23,459		23,122		1.2
Consumer Goods: Durable	437		427		0.0
Consumer Goods: Non-Durable	10,686		10,333		0.5
Consumer Services	115,254		112,705		5.7
Containers, Packaging & Glass	46,300		44,558		2.2
Diversified Financial Services	78,558		76,996		3.9
Energy: Oil & Gas	34,280		34,457		1.7
Environmental Industries	59,306		58,155		2.9
Healthcare & Pharmaceuticals	259,077		234,876		11.9
High Tech Industries	139,652		135,718		6.9
Investment Funds	271,097		263,022		13.3
Leisure Products & Services	117,164		112,926		5.7
Media: Advertising, Printing & Publishing	318		257		0.0

Media: Diversified & Production	19,765		19,760		1.0
Metals & Mining	8,076		8,185		0.4
Retail	31,258		30,796		1.6
Software	178,991		175,981		8.9
Sovereign & Public Finance	182		623		0.0
Telecommunications	75,795		70,907		3.6
Transportation: Cargo	7,406		7,188		0.4

Utilities: Electric	906		877		0.0
Wholesale	30,661		30,725		1.6
Total	$	2,049,975	$	1,979,877	100.0	%

CARLYLE SECURED LENDING, INC.

CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)

As of December 31, 2022

(dollar amounts in thousands)

The geographical composition of investments at fair value as of December 31, 2022 was as follows:


Geography	Amortized Cost		Fair Value		% of Fair Value
Australia	$	2,796	$	2,796	0.1	%
Canada	47,906		48,474		2.4
Cyprus	6,552		6,967		0.4
Italy	5,815		5,465		0.3
Luxembourg	41,453		39,066		2.0
Sweden	1,168		382		0.0
United Kingdom	72,441		69,353		3.5
United States	1,871,844		1,807,374		91.3
Total	$	2,049,975	$	1,979,877	100.0	%

The accompanying notes are an integral part of these consolidated financial statements.

CARLYLE SECURED LENDING, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of June 30, 2023

(dollar amounts in thousands, except per share data)

1. ORGANIZATION

Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “CSL” or the “Company”) is a Maryland corporation formed on February 8, 2012, and structured as an externally managed, non-diversified closed-end investment company. The Company has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”). In addition, the Company has elected to be treated, and intends to continue to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).

The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. The Company's core investment strategy focuses on lending to U.S. middle market companies, which the Company defines as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. The Company seeks to achieve its objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of its assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms.

The Company invests primarily in loans to middle market companies whose debt has been rated below investment grade, or would likely be rated below investment grade if it was rated. These securities, which are often referred to as “junk” have predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.

On May 2, 2013, the Company completed its initial closing of capital commitments (the “Initial Closing”) and subsequently commenced substantial investment operations. Effective March 15, 2017, the Company changed its name from “Carlyle GMS Finance, Inc.” to “TCG BDC, Inc.” On June 19, 2017, the Company closed its initial public offering, issuing 9,454,200 shares of its common stock (including shares issued pursuant to the exercise of the underwriters’ over-allotment option on July 5, 2017) at a public offering price of $18.50 per share. Net of underwriting costs, the Company received cash proceeds of $169,488 Shares of common stock of the Company began trading on the Nasdaq Global Select Market under the symbol “CGBD” on June 14, 2017. Effective April 12, 2022, the Company changed its name from “TCG BDC, Inc.” to “Carlyle Secured Lending, Inc.”

The Company is externally managed by its investment adviser, Carlyle Global Credit Investment Management L.L.C. (“CGCIM or “Investment Adviser”), a wholly-owned subsidiary of The Carlyle Group Inc. and an investment adviser registered under the Investment Advisers Act of 1940, as amended. Carlyle Global Credit Administration L.L.C. (the “Administrator”) provides the administrative services necessary for the Company to operate. Both the Investment Adviser and the Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C. (“CIM”), a wholly owned subsidiary of The Carlyle Group Inc. “Carlyle” refers to The Carlyle Group Inc. and its affiliates and its consolidated subsidiaries (other than portfolio companies of its affiliated funds), a global investment firm publicly traded on the Nasdaq Global Select Market under the symbol “CG”. Refer to the sec.gov website for further information on Carlyle.

TCG BDC SPV LLC (the “SPV”) is a Delaware limited liability company that was formed on January 3, 2013. Prior to the termination of its senior secured credit facility on December 11, 2020, the SPV invested in first and second lien senior secured loans. The SPV is a wholly owned subsidiary of the Company and is consolidated in these consolidated financial statements commencing from the date of its formation, January 3, 2013. Effective March 15, 2017, the SPV changed its name from “Carlyle GMS Finance SPV LLC” to “TCG BDC SPV LLC”.

On June 26, 2015, the Company completed a $400,000 term debt securitization (the “2015-1 Debt Securitization”). The notes offered in the 2015-1 Debt Securitization (the “2015-1 Notes”) were issued by Carlyle Direct Lending CLO 2015-1R LLC (formerly known as Carlyle GMS Finance MM CLO 2015-1 LLC) (the “2015-1 Issuer”), a wholly owned and

consolidated subsidiary of the Company. On August 30, 2018, the 2015-1 Issuer refinanced the 2015-1 Debt Securitization (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. Refer to Note 7, Borrowings, for details. The 2015-1 Issuer is consolidated in these consolidated financial statements commencing from the date of its formation, May 8, 2015.

On February 29, 2016, the Company and Credit Partners USA LLC (“Credit Partners”) entered into an amended and restated limited liability company agreement, which was subsequently amended on June 24, 2016, February 22, 2021, May 16, 2022 and April 20, 2023 (as amended, the “Limited Liability Company Agreement”) to co-manage Middle Market Credit Fund, LLC (“Credit Fund”). Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Refer to Note 5, Middle Market Credit Fund, LLC, for details.

On May 5, 2020, the Company issued and sold 2,000,000 shares of cumulative convertible preferred stock, par value $0.01 per share (the “Preferred Stock”), to an affiliate of Carlyle in a private placement at a price of $25 per share. See Note 9, Net Assets, to these unaudited consolidated financial statements for further information about the Preferred Stock.

On November 3, 2020, the Company and Cliffwater Corporate Lending Fund (“CCLF”), an investment vehicle managed by Cliffwater LLC, entered into a limited liability company agreement to co-manage Middle Market Credit Fund II, LLC (“Credit Fund II”). Credit Fund II invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board of managers, on which the Company and CCLF each have equal representation. The Company and CCLF have approximately 84.13% and 15.87% economic ownership of Credit Fund II, respectively. The Company contributed certain senior secured debt investments with an aggregate principal balance of approximately $250 million to Credit Fund II in exchange for its 84.13% economic interest and gross cash proceeds of approximately $170 million. See Note 6, Middle Market Credit Fund II, LLC, to these unaudited consolidated financial statements for details.

As a BDC, the Company is required to comply with certain regulatory requirements. As part of these requirements, the Company must not acquire any assets other than “qualifying assets” specified in the Investment Company Act unless, at the time the acquisition is made, at least 70% of its total assets are qualifying assets (with certain limited exceptions).

To qualify as a RIC, the Company must, among other things, meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders generally at least 90% of its investment company taxable income, as defined by the Code, for each year. Pursuant to this election, the Company generally does not have to pay corporate level taxes on any income that it distributes to stockholders, provided that the Company satisfies those requirements.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company is an investment company for the purposes of accounting and financial reporting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies (“ASC 946”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, the SPV and the 2015-1 Issuer. All significant intercompany balances and transactions have been eliminated. U.S. GAAP for an investment company requires investments to be recorded at fair value. The carrying value for all other assets and liabilities approximates their fair value.

The interim consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X. Accordingly, certain disclosures accompanying the annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments considered necessary for the fair presentation of consolidated financial statements for the interim periods presented have been included. These adjustments are of a normal, recurring nature. This Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2022. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results to be expected for the full year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management’s estimates are based on historical experiences and other factors, including expectations of future events that management believes to be reasonable under the circumstances. It also requires management to exercise judgment in the process of applying the Company’s accounting policies. Assumptions and estimates regarding the valuation of investments and their resulting impact on base management and incentive fees involve a higher degree of judgment and complexity and these assumptions and estimates may be significant to the consolidated financial statements. Actual results could differ from these estimates and such differences could be material.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment at the time of exit using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the accompanying Consolidated Statements of Operations reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized. See Note 3, Fair Value Measurements, to these unaudited consolidated financial statements, for further information about fair value measurements.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consist of demand deposits and highly liquid investments (e.g., money market funds, U.S. treasury notes) with original maturities of three months or less. Cash equivalents are carried at amortized cost, which approximates fair value. The Company’s cash, cash equivalents and restricted cash are held with one large financial institution and cash held in such financial institution may, at times, exceed the Federal Deposit Insurance Corporation insured limit. As of June 30, 2023 and December 31, 2022, the Company had restricted cash balances of $16,382 and $14,412, respectively, which represent amounts that are collected and held by trustees appointed by the Company for payment of interest expense and principal on the outstanding borrowings, or reinvestment into new assets, and as custodians of the assets securing certain of the Company's financing transactions.

Revenue Recognition

Interest from Investments

Interest income is recorded on an accrual basis and includes the accretion of discounts and amortization of premiums. Discounts from and premiums to par value on debt investments purchased are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost, including origination fees and upfront fees received that are deemed to be an adjustment to yield, adjusted for the accretion of discounts and amortization of premiums, if any.

The Company may have loans in its portfolio that contain payment-in-kind (“PIK”) provisions. PIK income represents interest that is accrued and recorded as interest income at the contractual rates, increases the loan principal on the respective capitalization dates, and is generally due at maturity. As of June 30, 2023 and December 31, 2022, the fair value of the loans in the portfolio with PIK provisions was $245,702 and $176,773, respectively, which represents approximately 13.0% and 8.9% of total investments at fair value, respectively. For the three and six months ended June 30, 2023, the Company earned $4,716 and $8,904 in PIK income, respectively. For the three and six months ended June 30, 2022, the Company earned $3,728 and $7,449 in PIK income, respectively. In 2022, the Company began presenting PIK income as a separate financial statement line item in the accompanying Consolidated Statements of Operations, which had previously been included in interest income. Prior periods have been conformed to the current presentation.

In 2022, the Company separately presented interest receivable and dividend receivable on the accompanying Consolidated Statements of Cash Flows. In 2023, the amounts are presented collectively on the Consolidated Statements of Cash Flows. Prior periods have been conformed to the current presentation.

Dividend Income

Dividend income from the investment funds, Credit Fund and Credit Fund II, and other investments funds, if any, is recorded on the record date for the investment fund to the extent that such amounts are payable by the investment funds and are expected to be collected.

Other Income

Other income may include income such as consent, waiver, amendment, unused, underwriting, arranger and prepayment fees associated with the Company’s investment activities as well as any fees for managerial assistance services rendered by the Company to the portfolio companies. Such fees are recognized as income when earned or the services are rendered. The Company may receive fees for guaranteeing the outstanding debt of a portfolio company. Such fees are amortized into other income over the life of the guarantee. The unamortized amount, if any, is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Assets and Liabilities. For the three and six months ended June 30, 2023, the Company earned $919 and $1,882, respectively, in other income, primarily from prepayment fees and commitment fees. For the three and six months ended June 30, 2022, the Company earned $1,634 and $3,870, respectively, in other income, primarily from prepayment fees and amendment fees.

Non-Accrual Income

Loans are generally placed on non-accrual status when principal or interest payments are past due or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Non-accrual loans are restored to accrual status when past due principal and interest are current or there is no longer any reasonable doubt that such principal or interest will be collected in full and, in management’s judgment, are likely to remain current. Management may determine not to place a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection. As of June 30, 2023 and December 31, 2022, the fair value of the loans in the portfolio on non-accrual status was $34,661 and $57,932, respectively. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2023 and December 31, 2022 and for the periods then ended.

Credit Facility, Senior Notes, and 2015-1R Notes – Related Costs, Expenses and Deferred Financing Costs

The Company entered into a senior secured revolving credit facility (as amended, the “Credit Facility”). Interest expense and unused commitment fees on the Credit Facility are recorded on an accrual basis. Unused commitment fees are included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.

On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.75% Senior Unsecured Notes due December 31, 2024 (the “2019 Notes”). On December 11, 2020, the Company issued $75.0 million in aggregate principal amount of 4.50% Senior Unsecured Notes due December 31, 2024 (the “2020 Notes”, and together with the 2019 Notes, the “Senior Notes”). The Credit Facility, the 2015-1R Notes and the Senior Notes are recorded at carrying value, which approximates fair value.

Deferred financing costs include capitalized expenses related to the closing or amendments of the Credit Facility. Amortization of deferred financing costs for the Credit Facility is computed on the straight-line basis over its term. The unamortized balance of such costs is included in prepaid expenses and other assets in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.

Debt issuance costs include capitalized expenses including structuring and arrangement fees related to the offering of the 2015-1R Notes and Senior Notes. Amortization of debt issuance costs for the notes is computed on the effective yield method over the term of the notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the notes in the accompanying Consolidated Statements of Assets and Liabilities. The amortization of such costs is included in interest expense and credit facility fees in the accompanying Consolidated Statements of Operations.

In 2022, the Company began presenting interest expense and credit facility fees together in the accompanying Consolidated Statements of Operations, which had previously been presented as separate financial statement line items. Prior periods have been conformed to the current presentation.

Income Taxes

For federal income tax purposes, the Company has elected to be treated as a RIC under the Code, and intends to make the required distributions to its stockholders as specified therein. In order to qualify as a RIC, the Company must meet certain minimum distribution, source-of-income and asset diversification requirements. If such requirements are met, then the Company is generally required to pay income taxes only on the portion of its taxable income and gains it does not distribute.

The minimum distribution requirements applicable to RICs require the Company to distribute to its stockholders at least 90% of its investment company taxable income (“ICTI”), as defined by the Code, each year. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of current year distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI. For the three and six months ended June 30, 2023, the Company incurred $650 and $1,173 in excise tax expense, respectively. For the three and six months ended June 30, 2022, the Company incurred $176 and $529 in excise tax expense, respectively.

In addition, based on the excise distribution requirements, the Company is subject to a 4% nondeductible federal excise tax on undistributed income unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income realized, but not distributed, in the preceding year. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax is considered to have been distributed. The Company intends to make sufficient distributions each taxable year to satisfy the excise distribution requirements as reasonable.

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more likely than not” to be sustained by the applicable tax authority. The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company. All penalties and interest associated with income taxes, if any, are included in income tax expense.

Dividends and Distributions to Common Stockholders

To the extent that the Company has taxable income available, the Company intends to make quarterly distributions to its common stockholders. Dividends and distributions to common stockholders are recorded on the record date. The amount to be distributed is determined by the Board of Directors each quarter and is generally based upon the taxable earnings estimated by management and available cash. Net realized capital gains, if any, are generally distributed at least annually, although the Company may decide to retain such capital gains for investment.

Prior to July 5, 2017, the Company had an “opt in” dividend reinvestment plan. Effective on July 5, 2017, the Company converted the “opt in” dividend reinvestment plan to an “opt out” dividend reinvestment plan that provides for reinvestment of dividends and other distributions on behalf of the common stockholders, other than those common stockholders who have “opted out” of the plan. As a result of adopting the plan, if the Board of Directors authorizes, and the Company declares, a cash dividend or distribution, the common stockholders who have not elected to “opt out” of the dividend reinvestment plan will have their cash dividends or distributions automatically reinvested in additional shares of the Company’s common stock, rather than receiving cash. Each registered stockholder may elect to have such stockholder’s dividends and distributions distributed in cash rather than participate in the plan. For any registered stockholder that does not so elect, distributions on such stockholder’s shares will be reinvested by State Street Bank and Trust Company, the Company’s plan administrator, in additional shares. The number of shares to be issued to the stockholder will be determined based on the total dollar amount of the cash distribution payable, net of applicable withholding taxes. The Company intends to use primarily newly issued shares to implement the plan so long as the market value per share is equal to or greater than the net asset value per share on the relevant valuation date. If the market value per share is less than the net asset value per share on the relevant valuation date, the plan administrator would implement the plan through the purchase of common stock on behalf of participants in the open market, unless the Company instructs the plan administrator otherwise.

Functional Currency

The functional currency of the Company is the U.S. Dollar. Investments are generally made in the local currency of the country in which the investments are domiciled and are translated into U.S. Dollars with foreign currency translation gains or losses recorded within net change in unrealized appreciation (depreciation) on investments in the accompanying Consolidated Statements of Operations. Foreign currency translation gains and losses on non-investment assets and liabilities are separately reflected in the accompanying Consolidated Statements of Operations.

Earnings Per Common Share

The Company computes earnings per common share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Basic earnings per common share is calculated by dividing the net increase (decrease) in net assets resulting from operations attributable to common stock by the weighted average number of shares of common stock outstanding. Diluted earnings per common share reflects the assumed conversion of all dilutive securities.

Recent Accounting Standards Updates

In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848), which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company does not expect this guidance to impact its consolidated financial statements.

3. FAIR VALUE MEASUREMENTS

The Company applies fair value accounting in accordance with the terms of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.

Securities/instruments that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser, does not represent fair value shall each be valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data is available. These valuation techniques may vary by investment and include comparable public market valuations, comparable precedent transaction valuations and/or discounted cash flow analyses. The process generally used to determine the applicable value is as follows: (i) the value of each portfolio company or investment is initially reviewed by the investment professionals responsible for such portfolio company or investment and, for non-traded investments, a standardized template designed to approximate fair market value based on observable market inputs, updated credit statistics and unobservable inputs is used to determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of personnel of the Investment Adviser; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) if applicable, prior to September 8, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) reviewed the assessments of the Investment Adviser and the third-party valuation firm; and (v) if applicable, prior to September 8, 2022, the Board of Directors discussed the valuation recommendations of the Audit Committee and determined the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:

•the nature and realizable value of any collateral;

•call features, put features and other relevant terms of debt;

•the portfolio company’s leverage and ability to make payments;

•the portfolio company’s public or private credit rating;

•the portfolio company’s actual and expected earnings and discounted cash flow;

•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;

•the markets in which the portfolio company does business and recent economic and/or market events; and

•comparisons to comparable transactions and publicly traded securities.

Investment performance data utilized are the most recently available financial statements and compliance certificates received from the portfolio companies as of the measurement date which in many cases may reflect a lag in information.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the realized gains or losses on investments to be different from the net change in unrealized appreciation or depreciation currently reflected in the consolidated financial statements as of June 30, 2023 and December 31, 2022.

U.S. GAAP establishes a hierarchical disclosure framework which ranks the level of observability of market price inputs used in measuring investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment and the characteristics specific to the investment and state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets generally have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

Investments measured and reported at fair value are classified and disclosed based on the observability of inputs used in determination of fair values, as follows:

•Level 1—inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date. Financial instruments in this category generally include unrestricted securities, including equities and derivatives, listed in active markets. The Investment Adviser does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably impact the quoted price.

•Level 2—inputs to the valuation methodology are either directly or indirectly observable as of the reporting date and are those other than quoted prices in active markets. Financial instruments in this category generally include less liquid and restricted securities listed in active markets, securities traded in other than active markets, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

•Level 3—inputs to the valuation methodology are unobservable and significant to overall fair value measurement. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments in this category generally include investments in privately-held entities, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Investment Adviser’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Investments in Credit Fund and Credit Fund II are valued based on the legal form of investment. For those structured through LLC membership interests, the practical expedient, or net asset value method, is used. For those structured through subordinated notes, a discounted cash flow method is used.

Transfers between levels, if any, are recognized at the beginning of the quarter in which the transfers occur. For the three and six months ended June 30, 2023 and 2022, there were no transfers between levels.

The following tables summarize the Company’s investments measured at fair value on a recurring basis by the above fair value hierarchy levels as of June 30, 2023 and December 31, 2022:


	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	1,272,650	$	1,272,650
Second Lien Debt	—		—		265,536		265,536
Equity Investments	—		—		102,214		102,214
Investment Funds
Mezzanine Loan	—		—		—		—
Subordinated Loan and Member's Interest	—		—		189,101		189,101
Total	$	—	$	—	$	1,829,501	$	1,829,501
Investments measured at net asset value(1)							66,919
Total							$	1,896,420


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets
First Lien Debt	$	—	$	—	$	1,359,962	$	1,359,962
Second Lien Debt	—		—		262,703		262,703
Equity Investments	—		—		94,190		94,190
Investment Funds
Mezzanine Loan	—		—		—		—
Subordinated Loan and Member's Interest	—		—		190,065		190,065
Total	$	—	$	—	$	1,906,920	$	1,906,920
Investments measured at net asset value(1)							72,957
Total							$	1,979,877

(1) Amount represents the Company's investment in Credit Fund II. The Company, as a practical expedient, estimates the fair value of this investment using the net asset value of the Company's member's interest in Credit Fund II. As such, the fair value of the Company's investment in Credit Fund II has not been categorized within the fair value hierarchy.

The changes in the Company’s investments at fair value for which the Company has used Level 3 inputs to determine fair value and net change in unrealized appreciation (depreciation) included in earnings for Level 3 investments still held are as follows:


	Financial Assets
	For the three months ended June 30, 2023
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,350,740	$	259,429	$	102,241	$	189,970	$	1,902,380
Purchases	42,282		4,051		1,630		—		47,963
Sales	(32,655)		—		(1,495)		—		(34,150)
Paydowns	(72,255)		—		—		—		(72,255)
Accretion of discount	1,630		241		58		—		1,929
Net realized gains (losses)	(9,180)		1		1,188		—		(7,991)
Net change in unrealized appreciation (depreciation)	(7,912)		1,814		(1,408)		(869)		(8,375)
Balance, end of period	$	1,272,650	$	265,536	$	102,214	$	189,101	$	1,829,501
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(7,830)	$	1,814	$	(263)	$	(869)	$	(7,148)



	Financial Assets
	For the six months ended June 30, 2023
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,359,962	$	262,703	$	94,190	$	190,065	$	1,906,920
Purchases	97,107		4,374		3,992		—		105,473
Sales	(64,656)		(6,372)		(1,717)		—		(72,745)
Paydowns	(100,976)		(454)		(607)		—		(102,037)
Accretion of discount	3,251		419		114		—		3,784
Net realized gains (losses)	(22,609)		(48)		1,351		—		(21,306)
Net change in unrealized appreciation (depreciation)	571		4,914		4,891		(964)		9,412
Balance, end of period	$	1,272,650	$	265,536	$	102,214	$	189,101	$	1,829,501
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(10,746)	$	1,814	$	5,797	$	(964)	$	(4,099)


	Financial Assets
	For the three months ended June 30, 2022
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,224,117	$	304,202	$	78,699	$	189,285	$	1,796,303
Purchases	194,313		431		1,287		—		196,031
Sales	(86,311)		(4,013)		(1,031)		—		(91,355)
Paydowns	(69,443)		—		—		—		(69,443)
Accretion of discount	2,446		182		133		—		2,761
Net realized gains (losses)	(504)		(956)		1,514		—		54
Net change in unrealized appreciation (depreciation)	(7,336)		(9,163)		(1,969)		(2,518)		(20,986)
Balance, end of period	$	1,257,282	$	290,683	$	78,633	$	186,767	$	1,813,365
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held at the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(8,529)	$	(9,163)	$	(1,970)	$	(2,519)	$	(22,181)



	Financial Assets
	For the six months ended June 30, 2022
	First Lien Debt		Second Lien Debt		Equity Investments		Investment Fund - Subordinated Loan and Member's Interest		Total
Balance, beginning of period	$	1,232,084	$	341,776	$	77,093	$	184,141	$	1,835,094
Purchases	305,642		681		3,674		—		309,997
Sales	(98,370)		(4,013)		(5,034)		—		(107,417)
Paydowns	(175,416)		(36,325)		(1,083)		—		(212,824)
Accretion of discount	4,218		741		140		—		5,099
Net realized gains (losses)	2,951		(956)		3,898		—		5,893
Net change in unrealized appreciation (depreciation)	(13,827)		(11,221)		(55)		2,626		(22,477)
Balance, end of period	$	1,257,282	$	290,683	$	78,633	$	186,767	$	1,813,365
Net change in unrealized appreciation (depreciation) included in earnings related to investments still held as of the reporting date included in net change in unrealized appreciation (depreciation) on investments on the Consolidated Statements of Operations	$	(11,587)	$	(10,496)	$	(2,871)	$	2,625	$	(22,329)

The Company generally uses the following framework when determining the fair value of investments that are categorized as Level 3:

Investments in debt securities are initially evaluated to determine whether the enterprise value of the portfolio company is greater than the applicable debt. The enterprise value of the portfolio company is estimated using a market approach and an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The Investment Adviser carefully considers numerous factors when selecting the appropriate companies whose multiples are used to value the Company’s portfolio companies. These factors include, but are not limited to, the type of organization, similarity to the business being valued, relevant risk factors, as well as size, profitability and growth expectations. The income approach typically uses a discounted cash flow analysis of the portfolio company.

Investments in debt securities that do not have sufficient coverage through the enterprise value analysis are valued based on an expected probability of default and discount recovery analysis.

Investments in debt securities with sufficient coverage through the enterprise value analysis are generally valued using a discounted cash flow analysis of the underlying security. Projected cash flows in the discounted cash flow typically represent the relevant security’s contractual interest, fees and principal payments plus the assumption of full principal recovery at the security’s expected maturity date. The discount rate to be used is determined using an average of two market-based methodologies. Investments in debt securities may also be valued using consensus pricing.

Investments in equities are generally valued using a market approach and/or an income approach. The market approach utilizes market value (EBITDA) multiples of publicly traded comparable companies and available precedent sales transactions of comparable companies. The income approach typically uses a discounted cash flow analysis of the portfolio company.

Investments in Credit Fund’s mezzanine loan are valued using collateral analysis with the expected recovery rate of principal and interest. Investments in Credit Fund’s subordinated loan and member’s interest are valued using discounted cash flow analysis with the expected discount rate, default rate and recovery rate of principal and interest.

The following tables summarize the quantitative information related to the significant unobservable inputs for Level 3 instruments which are carried at fair value as of June 30, 2023 and December 31, 2022:


	Fair Value as of June 30, 2023		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	1,130,845	Discounted Cash Flow	Discount Rate	5.03	%	18.65	%	8.92	%
	18,753		Consensus Pricing	Indicative Quotes	97.00	%	100.00	%	97.53	%
	123,052		Income Approach	Discount Rate	9.24	%	10.80	%	9.99	%
			Market Approach	Comparable Multiple	8.77x		11.04x		9.96x
Total First Lien Debt	1,272,650
Investments in Second Lien Debt	263,664		Discounted Cash Flow	Discount Rate	8.25	%	13.51	%	9.86	%
	1,872		Income Approach	Discount Rate	13.53	%	13.53	%	13.53	%

Total Second Lien Debt	265,536

Investments in Equity	102,214		Income Approach	Discount Rate	7.22	%	12.90	%	9.32	%
			Market Approach	Comparable Multiple	7.72x		16.50x		10.21x
Total Equity Investments	102,214
Investments in Credit Fund

Subordinated Loan and Member's Interest	189,101		Discounted Cash Flow	Discount Rate	9.50	%	9.50	%	9.50	%
			Discounted Cash Flow	Default Rate	3.00	%	3.00	%	3.00	%
			Discounted Cash Flow	Recovery Rate	65.00	%	65.00	%	65.00	%
Total Investments in Credit Fund	189,101
Total Level 3 Investments	$	1,829,501


	Fair Value as of December 31, 2022		Valuation Techniques	Significant Unobservable Inputs	Range
					Low		High		Weighted Average
Investments in First Lien Debt	$	1,157,414	Discounted Cash Flow	Discount Rate	4.84	%	17.96	%	9.09	%
	74,457		Consensus Pricing	Indicative Quotes	97.00	%	100.00	%	97.95	%
	128,091		Income Approach	Discount Rate	9.03	%	19.31	%	13.34	%
			Market Approach	Comparable Multiple	5.21x		10.51x		9.81x
Total First Lien Debt	1,359,962
Investments in Second Lien Debt	262,703		Discounted Cash Flow	Discount Rate	8.96	%	13.33	%	10.12	%

Total Second Lien Debt	262,703
Investments in Equity	94,190		Income Approach	Discount Rate	7.22	%	12.69	%	9.89	%
			Market Approach	Comparable Multiple	8.40x		17.24x		10.41x
Total Equity Investments	94,190
Investment in Credit Fund

Subordinated Loan and Member's Interest	190,065		Discounted Cash Flow	Discount Rate	10.25	%	10.25	%	10.25	%
			Discounted Cash Flow	Default Rate	3.00	%	3.00	%	3.00	%
			Discounted Cash Flow	Recovery Rate	65.00	%	65.00	%	65.00	%
Total Investments in Credit Fund	190,065
Total Level 3 Investments	$	1,906,920

The significant unobservable inputs used in the fair value measurement of the Company’s investments in first and second lien debt securities are discount rates, indicative quotes and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in indicative quotes or comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Company’s investments in equities are discount rates and comparable EBITDA multiples. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement. Significant decreases in comparable EBITDA multiples in isolation would result in a significantly lower fair value measurement.

The significant unobservable input used in the fair value measurement of the Company’s investment in the mezzanine loan of Credit Fund is the recovery rate of principal and interest. A significant decrease in the recovery rate would result in a significantly lower fair value measurement.

The significant unobservable inputs used in the fair value measurement of the Company’s investments in the subordinated loan and member’s interest of Credit Fund are the discount rate, default rate and recovery rate. Significant increases in the discount rate or default rate in isolation would result in a significantly lower fair value measurement. A significant decrease in the recovery rate in isolation would result in a significantly lower fair value measurement.

Financial instruments disclosed but not carried at fair value

The following table presents the carrying value (before debt issuance costs) and fair value of the Credit Facility, Senior Notes, and 2015-1R Notes disclosed but not carried at fair value as of June 30, 2023 and December 31, 2022:


	June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Secured borrowings	$	400,241	$	400,241	$	440,441	$	440,441
2019 Notes	115,000		104,864		115,000		105,496
2020 Notes	75,000		68,837		75,000		69,180
Aaa/AAA Class A-1-1-R Notes	234,800		231,865		234,800		232,170
Aaa/AAA Class A-1-2-R Notes	50,000		49,645		50,000		49,655
Aaa/AAA Class A-1-3-R Notes	25,000		24,270		25,000		24,013
AA Class A-2-R Notes	66,000		64,376		66,000		63,802
A Class B Notes	46,400		44,813		46,400		44,465
BBB- Class C Notes	27,000		25,583		27,000		25,920
Total	$	1,039,441	$	1,014,494	$	1,079,641	$	1,055,142

The carrying values of the secured borrowings generally approximate their respective fair values due to their variable interest rates. Secured borrowings are categorized as Level 3 within the hierarchy.

The carrying values of the Senior Notes approximate their respective fair values. The Senior Notes are categorized as Level 3 within the hierarchy and are valued generally using discounted cash flow analysis. The significant unobservable inputs used in the fair value measurement of the Company’s Senior Notes are discount rates. Significant increases in discount rates in isolation would result in a significantly lower fair value measurement.

The carrying value of the 2015-1R Notes approximate their respective fair values. The 2015-1R Notes are categorized as Level 3 within the hierarchy and are valued generally using market quotation(s) received from broker/dealer(s), which are significant unobservable inputs.

The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items.

4. RELATED PARTY TRANSACTIONS

Investment Advisory Agreement

On April 3, 2013, the Company’s Board of Directors, including a majority of the directors who are not “interested persons” as defined in Section 2(a)(19) of the Investment Company Act (the “Independent Directors”), approved an investment advisory agreement (the “Original Investment Advisory Agreement”) between the Company and the Investment Adviser in accordance with, and on the basis of an evaluation satisfactory to such directors as required by, Section 15(c) of the Investment Company Act. The Original Investment Advisory Agreement was amended on September 15, 2017 and August 6, 2018 after receipt of requisite Board and stockholders' approvals, as applicable (as amended, the “Investment Advisory Agreement”). Unless terminated earlier, the Investment Advisory Agreement renews automatically for successive annual periods, provided that such continuance is specifically approved at least annually by the vote of the Board of Directors and by the vote of a majority of the Independent Directors. On May 4, 2023, the Company’s Board of Directors, including a majority of the Independent Directors, approved at an in-person meeting the continuance of the Company’s Investment Advisory Agreement with the Adviser for an additional one year term. The Investment Advisory Agreement will automatically terminate in the event of an assignment and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party. Subject to the overall supervision of the Board of Directors, the Adviser provides investment advisory services to the Company. For providing these services, the Adviser receives fees from the Company consisting of two components—a base management fee and an incentive fee.

The Base Management fee is calculated at an annual rate of 1.50% of the average value of the Company’s gross assets at the end of the two most recently completed fiscal quarters; provided, however, the Base Management fee is calculated at an annual rate of 1.00% of the Company’s gross assets as of the end of the two most recently completed calendar quarters that exceeds the product of (A) 200% and (B) the average value of the Company’s net asset value at the end of the two most recently completed calendar quarters. “Gross assets” is determined on a consolidated basis in accordance with U.S. GAAP, include assets acquired through the incurrence of debt (see Note 7, Borrowings, to these unaudited consolidated financial statements), and excludes cash and any temporary investments in cash-equivalents. For purposes of this calculation, cash and cash equivalents includes U.S. government securities and other high quality investment grade debt investments that mature in 12 months or less from the date of investment. The Base Management Fee is payable quarterly in arrears, will be appropriately

adjusted for any share issuances or repurchases during such the applicable fiscal quarters, and will be appropriately pro-rated for any partial month or quarter.

The incentive fee has two parts. The first part is calculated and payable quarterly in arrears based on the pre-incentive fee net investment income for the immediately preceding calendar quarter. The second part is determined and payable in arrears based on capital gains as of the end of each calendar year.

Pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the operating expenses accrued for the quarter (including the base management fee, expenses payable under the administration agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature, accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, has been compared to a “hurdle rate” of 1.50% per quarter (6% annualized) or a “catch-up rate” of 1.82% per quarter (7.28% annualized), as applicable.

Pursuant to the Investment Advisory Agreement, the Company pays its Investment Adviser an incentive fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:

•no incentive fee based on pre-incentive fee net investment income in any calendar quarter in which its pre-incentive fee net investment income does not exceed the hurdle rate of 1.50%;

•100% of pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.82% in any calendar quarter (7.28% annualized). The Company refers to this portion of the pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.82%) as the “catch-up.” The “catch-up” is meant to provide the Investment Adviser with approximately 17.5% of the Company’s pre-incentive fee net investment income as if a hurdle rate did not apply if this net investment income exceeds 1.82% in any calendar quarter; and

•17.5% of the amount of pre-incentive fee net investment income, if any, that exceeds 1.82% in any calendar quarter (7.28% annualized) will be payable to the Investment Adviser. This reflects that once the hurdle rate is reached and the catch-up is achieved, 17.5% of all pre-incentive fee net investment income thereafter is allocated to the Investment Adviser.

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 17.5% of realized capital gains, if any, on a cumulative basis from inception through the date of determination, computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees, provided that, the incentive fee determined at the end of the first calendar year of operations may be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation.

Below is a summary of the base management fees and incentive fees incurred during the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Base management fees	$	7,185	$	7,113	$	14,421	$	14,163
Incentive fees on pre-incentive fee net investment income	5,593		4,458		11,065		9,686




Total base management fees and incentive fees	$	12,778	$	11,571	$	25,486	$	23,849

Accrued capital gains incentive fees are based upon the cumulative net realized and unrealized appreciation (depreciation) from inception. Accordingly, the accrual for any capital gains incentive fee under U.S. GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. During the three and six months ended June 30, 2023 and 2022, there were no accrued or realized capital gains incentive fees.

As of June 30, 2023 and December 31, 2022, $12,804 and $12,681, respectively, was included in base management and incentive fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

On April 3, 2013, the Investment Adviser entered into a personnel agreement with The Carlyle Group Employee Co., L.L.C. (“Carlyle Employee Co.”), an affiliate of the Investment Adviser, pursuant to which Carlyle Employee Co. provides the Investment Adviser with access to investment professionals.

Administration Agreement

On April 3, 2013, the Company's Board of Directors approved the Administration Agreement (the “Administration Agreement”) between the Company and the Administrator. Pursuant to the Administration Agreement, the Administrator provides services and receives reimbursements equal to an amount that reimburses the Administrator for its costs and expenses and the Company’s allocable portion of overhead incurred by the Administrator in performing its obligations under the Administration Agreement, including the Company’s allocable portion of the compensation paid to or compensatory distributions received by the Company’s officers (including the Chief Financial Officer and Chief Compliance Officer) and respective staff who provide services to the Company, operations staff who provide services to the Company, and any internal audit staff, to the extent internal audit performs a role in the Company’s Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), internal control assessment. Reimbursement under the Administration Agreement occurs quarterly in arrears.

Unless terminated earlier, the Administration Agreement will renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by a majority vote of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On May 4, 2023, the Company's Board of Directors, including a majority of the Independent Directors, approved the continuance of the Administration Agreement for a one year period. The Administration Agreement may not be assigned by a party without the consent of the other party and may be terminated by either party without penalty upon at least 60 days’ written notice to the other party.

For the three months ended June 30, 2023 and 2022, the Company incurred $469 and $461, respectively, in fees under the Administration Agreement. For the six months ended June 30, 2023 and 2022, the Company incurred $497 and $867, respectively, in fees under the Administration Agreement. These fees are included in administrative service fees in the accompanying Consolidated Statements of Operations. As of June 30, 2023 and December 31, 2022, $1,439 and $1,711, respectively, was unpaid and included in administrative service fees payable in the accompanying Consolidated Statements of Assets and Liabilities.

Sub-Administration Agreements

On April 3, 2013, the Administrator entered into a sub-administration agreement with Carlyle Employee Co. (the “Carlyle Sub-Administration Agreement”). Pursuant to the Carlyle Sub-Administration Agreement, Carlyle Employee Co. provides the Administrator with access to personnel.

On April 3, 2013, the Administrator entered into a sub-administration agreement with State Street Bank and Trust Company (“State Street” and, such agreement, the “State Street Sub-Administration Agreement” and, together with the Carlyle Sub-Administration Agreement, the “Sub-Administration Agreements”). Unless terminated earlier, the State Street Sub-Administration Agreement renew automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board of Directors or by the vote of a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Company’s Independent Directors. On May 4, 2023, the Company's Board of Directors, including a majority of the Independent Directors, approved the continuance of the State Street Sub-Administration Agreement for a one year period. The State Street Sub-Administration Agreement may be terminated upon at least 60 days’ written notice and without penalty by the vote of a majority of the outstanding securities of the Company, or by the vote of the Board of Directors or by either party to the State Street Sub-Administration Agreement.

For the three months ended June 30, 2023 and 2022, the Company incurred $171 and $174, respectively, in fees under the State Street Sub-Administration Agreement. For the six months ended June 30, 2023 and 2022, the Company incurred $329 and $349, respectively, in fees under the State Street Sub-Administration Agreement. These fees are included in other general and administrative expenses in the accompanying Consolidated Statements of Operations. As of June 30, 2023 and December 31, 2022, $338 and $298, respectively, was unpaid and included in other accrued expenses and liabilities in the accompanying Consolidated Statements of Assets and Liabilities.

License Agreement

The Company has entered into a royalty free license agreement with CIM, which wholly owns the Investment Adviser and is a wholly owned subsidiary of Carlyle, pursuant to which CIM has granted the Company a non-exclusive, revocable and non-transferable license to use the name and mark “Carlyle.”

Board of Directors

The Company’s Board of Directors currently consists of seven members, four of whom are Independent Directors. The Board of Directors has established an Audit Committee, a Pricing Committee, a Nominating and Governance Committee and a Compensation Committee, the members of each of which consist of the Company’s Independent Directors. The Board of Directors may establish additional committees in the future. For the three months ended June 30, 2023 and 2022, the Company incurred $107 and $186, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. For the six months ended June 30, 2023 and 2022, the Company incurred $230 and $346, respectively, in fees and expenses associated with its Independent Directors' services on the Company's Board of Directors and its committees. As of June 30, 2023 and December 31, 2022, no fees or expenses associated with its Independent Directors were payable.

Transactions with Investment Funds

For both the three and six months ended June 30, 2023, the Company sold 3 investments to Credit Fund for proceeds of $18,237 and a realized loss of $94. For both the three and six months ended June 30, 2022, the Company sold three investments to Credit Fund for proceeds of $53,520 and a realized loss of $73. See Note 5, Middle Market Credit Fund, LLC, to these unaudited consolidated financial statements for further information about Credit Fund.

For the three and six months ended June 30, 2023, the Company sold 4 and 5 investments, respectively, to Credit Fund II for proceeds of $10,749 and $20,589, respectively, and realized losses of $183 and $173, respectively. For both the three and six months ended June 30, 2022, the Company sold four investments to Credit Fund II for proceeds of $31,793 and a realized loss of $421. See Note 6, Middle Market Credit Fund II, LLC, to these unaudited consolidated financial statements for further information about Credit Fund II.

Cumulative Convertible Preferred Stock

On May 5, 2020, the Company issued and sold 2,000,000 shares of the cumulative convertible preferred stock, par value $0.01 per share, to an affiliate of Carlyle in a private placement at a price of $25 per share. For the three and six months ended June 30, 2023, the Company declared and paid dividends on the Preferred Stock of $875 and $1,750, respectively. For the three and six months ended June 30, 2022, the Company declared and paid dividends on the Preferred Stock of $875 and $1,750, respectively. See Note 9, Net Assets, to these unaudited consolidated financial statements for further information about the Preferred Stock.

5. MIDDLE MARKET CREDIT FUND, LLC

Overview

On February 29, 2016, the Company and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended and restated on June 24, 2016, February 22, 2021, May 16, 2022 and April 20, 2023 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in the Company’s consolidated financial statements. Credit Fund primarily invests in first lien loans of middle market companies. Credit Fund is managed by a six-member board of managers, on which the Company and Credit Partners each have equal representation. Establishing a quorum for Credit Fund’s board of managers requires at least four members to be present at a meeting, including at least two of the Company’s representatives and two of Credit Partners’ representatives. The Company and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires

the approval of the board of Credit Fund, including the board members appointed by the Company. By virtue of its membership interest, the Company and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.

Together with Credit Partners, the Company co-invests through Credit Fund. Investment opportunities for Credit Fund are sourced primarily by the Company and its affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of the Company and Credit Partners. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund, the Company does not believe that it has control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (the “Credit Fund Sub”) and MMCF Warehouse II, LLC (the “Credit Fund Warehouse II”), each a Delaware limited liability company, were formed on April 5, 2016 and August 16, 2019, respectively. Credit Fund Sub and Credit Fund Warehouse II are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements commencing from the date of their respective formations. Credit Fund Sub primarily invests in first lien loans of middle market companies. Credit Fund and its wholly owned subsidiaries follow the same Internal Risk Rating System as the Company. Refer to “Debt” below in this Note 5 for discussions regarding the credit facility entered into and the notes issued by such wholly-owned subsidiaries.

Credit Fund, the Company and Credit Partners entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund (in such capacity, the “Credit Fund Administrative Agent”), pursuant to which the Credit Fund Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund with the approval of the board of managers of Credit Fund, and is reimbursed by Credit Fund for its costs and expenses and Credit Fund’s allocable portion of overhead incurred by the Credit Fund Administrative Agent in performing its obligations thereunder.

Selected Financial Data

Since inception of Credit Fund and through June 30, 2023 and December 31, 2022, the Company and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $216,000 in subordinated loans, respectively, to Credit Fund. On May 25, 2021, the Company and Credit Partners received an aggregate return of capital on the subordinated loans of $46,000, of which the Company received $23,000. Below is certain summarized consolidated financial information for Credit Fund as of June 30, 2023 and December 31, 2022.


	As of
	June 30, 2023		December 31, 2022
	(unaudited)
Selected Consolidated Balance Sheet Information:
ASSETS
Investments, at fair value (amortized cost of $853,096 and $953,467, respectively)	$	797,867	$	902,720
Cash, cash equivalents and restricted cash(1)	31,504		28,030
Other assets	9,723		9,681
Total assets	$	839,094	$	940,431
LIABILITIES AND MEMBERS’ EQUITY
Secured borrowings	$	499,221	$	588,621



Other liabilities	20,462		19,940
Subordinated loans and members’ equity(2)	319,411		331,870
Total liabilities and members’ equity	$	839,094	$	940,431

(1)As of June 30, 2023 and December 31, 2022, $14,694 and $14,393, respectively, of Credit Fund's cash and cash equivalents was restricted.

(2)As of June 30, 2023 and December 31, 2022, the fair value of Company's ownership interest in the subordinated loans and members’ equity was $189,101 and $190,065, respectively.


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	(unaudited)				(unaudited)
Selected Consolidated Statement of Operations Information:
Total investment income	$	22,491	$	14,807	$	45,445	$	29,486
Expenses
Interest and credit facility expenses	10,440		5,079		20,712		9,125
Other expenses	548		600		1,001		1,097
Total expenses	10,988		5,679		21,713		10,222
Net investment income (loss)	11,503		9,128		23,732		19,264
Net realized gain (loss) on investments	(7,477)		—		(9,709)		—
Net change in unrealized appreciation (depreciation) on investments	(1,606)		(17,169)		(4,482)		(27,038)
Net increase (decrease) resulting from operations	$	2,420	$	(8,041)	$	9,541	$	(7,774)

Below is a summary of Credit Fund’s portfolio, followed by a listing of the loans in Credit Fund’s portfolio as of June 30, 2023 and December 31, 2022:


	As of
	June 30, 2023			December 31, 2022
Senior secured loans(1)	$	860,168		$	955,605


Number of portfolio companies in Credit Fund	41			45
Average amount per portfolio company(1)	$	20,980		$	21,236
Number of loans on non-accrual status	2			—
Fair value of loans on non-accrual status	$	5,566		$	—
Percentage of portfolio at floating interest rates(2)(3)	100.0		%	100.0		%

Fair value of loans with PIK provisions	$	34,774		$	49,950
Percentage of portfolio with PIK provisions(3)	4.4		%	5.5		%

(1)At par/principal amount.

(2)Floating rate debt investments are generally subject to interest rate floors.

(3)Percentages based on fair value.


Consolidated Schedule of Investments as of June 30, 2023
Investments (1)			Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (100.0% of fair value)
ACR Group Borrower, LLC	^+		(2)(3)(8)	Aerospace & Defense	SOFR	4.50%	9.87%	3/31/2028	$	39,417	$	38,979	$	38,807
Alpine Acquisition Corp II	+	(2)(3)(6)	(2)(3)(6)	Transportation: Cargo	SOFR	5.75%	11.01%	11/30/2026	9,950		9,528		9,683
Analogic Corporation	+		(2)(3)(6)(8)	Capital Equipment	SOFR	5.25%	10.45%	6/22/2024	19,844		19,838		19,698
API Technologies Corp.	+		(2)	Aerospace & Defense	LIBOR	4.25%	9.75%	5/9/2026	14,400		14,366		9,864
Avalign Technologies, Inc.	+		(2)(6)	Healthcare & Pharmaceuticals	SOFR	4.50%	9.86%	12/22/2025	14,220		14,163		13,011
BMS Holdings III Corp.	+		(2)(3)	Construction & Building	SOFR	5.50%	10.89%	9/30/2026	11,075		11,002		10,811
Bradyifs Holdings, LLC	+		(2)(3)(6)	Wholesale	SOFR	6.25%	11.56%	11/22/2025	5,984		5,858		5,894
Chartis Holding, LLC	^+		(2)(3)(6)(8)	Business Services	SOFR	5.00%	10.22%	5/1/2025	7,742		7,742		7,693
Chemical Computing Group ULC (Canada)	^+		(2)(3)(6)(8)	Software	SOFR	4.50%	9.70%	8/30/2024	11,559		11,432		11,466
Diligent Corporation	^+		(2)(3)(6)(8)	Telecommunications	SOFR	6.25%	11.45%	8/4/2025	9,957		9,814		9,637
Divisions Holding Corporation	+		(2)(3)	Business Services	LIBOR	4.75%	9.85%	5/27/2028	14,116		14,010		13,780
DTI Holdco, Inc.	+		(2)(3)	High Tech Industries	SOFR	4.75%	9.80%	4/26/2029	29,775		29,258		27,588
Eliassen Group, LLC	+		(2)(3)	Business Services	SOFR	5.50%	10.83%	4/14/2028	19,278		19,068		19,049
EPS Nass Parent, Inc.	^+		(2)(3)(6)(8)	Utilities: Electric	SOFR	5.75%	11.14%	4/19/2028	34,691		34,176		33,442
EvolveIP, LLC	^+		(2)(3)(6)(8)	Telecommunications	SOFR	5.50%	10.70%	6/7/2025	42,323		42,299		41,749
Exactech, Inc.	+		(2)(3)(6)	Healthcare & Pharmaceuticals	SOFR	3.75%	8.95%	2/14/2025	20,969		20,922		10,414
GSM Acquisition Corp.	+		(2)(3)(6)	Leisure Products & Services	SOFR	5.00%	10.50%	11/16/2026	30,808		30,588		29,902
Heartland Home Services, Inc.	+		(2)(3)(6)	Consumer Services	SOFR	5.75%	10.96%	12/15/2026	7,205		7,131		7,125
Heartland Home Services, Inc.	+		(2)(3)(6)(8)	Consumer Services	SOFR	6.00%	11.16%	12/15/2026	24,132		24,061		24,032
Higginbotham Insurance Agency, Inc.	+		(2)(3)(6)	Diversified Financial Services	SOFR	5.25%	10.45%	11/25/2026	4,455		4,402		4,392
HMT Holding Inc.	^+		(2)(3)(6)(8)	Energy: Oil & Gas	SOFR	6.00%	11.41%	11/17/2025	34,802		34,689		33,894
Integrity Marketing Acquisition, LLC	+		(2)(3)(6)	Diversified Financial Services	SOFR	6.05%	11.41%	8/27/2025	36,756		36,490		35,951
Integrity Marketing Acquisition, LLC	^+		(2)(3)(6)	Diversified Financial Services	SOFR	6.02%	11.38%	8/27/2025	6,914		6,851		6,762
Jensen Hughes, Inc.	^+		(2)(3)(8)	Utilities: Electric	LIBOR	4.50%	9.77%	3/22/2024	35,180		35,165		34,527
KAMC Holdings, Inc.	+		(2)(6)	Energy: Electricity	SOFR	4.00%	9.73%	8/14/2026	13,475		13,442		11,454
KBP Investments, LLC	+		(2)(3)(8)	Beverage & Food	SOFR	5.50%, 1.50% PIK	12.42%	5/25/2027	37,336		37,168		34,774
North Haven Fairway Buyer, LLC	+		(2)(3)	Consumer Services	SOFR	6.50%	11.73%	5/17/2028	6,734		6,572		6,558
Output Services Group	+		(2)(3)(7)	Media: Advertising, Printing & Publishing	SOFR	5.25%, 1.50% PIK	7.75%	6/27/2026	19,286		19,219		4,339
PF Atlantic Holdco 2, LLC	+		(2)(3)(6)	Leisure Products & Services	SOFR	5.50%	10.89%	11/12/2027	15,318		15,109		15,085
Premise Health Holding Corp.	+		(2)(6)	Healthcare & Pharmaceuticals	SOFR	3.75%	9.34%	7/10/2025	13,237		13,215		12,641
Radiology Partners, Inc.	+		(2)(6)	Healthcare & Pharmaceuticals	SOFR	4.25%	9.47%	7/9/2025	27,686		27,636		20,756
RevSpring Inc.	+		(2)(6)	Media: Advertising, Printing & Publishing	SOFR	4.00%	9.50%	10/11/2025	28,698		28,605		27,514


Consolidated Schedule of Investments as of June 30, 2023
Investments (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Riveron Acquisition Holdings, Inc.	+	(2)(3)	Diversified Financial Services	LIBOR	5.75%	10.83%	5/22/2025	$	11,226	$	11,226	$	11,226
Striper Buyer, LLC	+	(2)(3)	Containers, Packaging & Glass	LIBOR	5.50%	10.70%	12/30/2026	14,625		14,530		14,543
Summit Acquisition, Inc.	+	(2)(3)	Diversified Financial Services	SOFR	6.75%	11.99%	5/1/2030	5,955		5,778		5,776
Tank Holding Corp.	+	(2)(3)(6)	Capital Equipment	SOFR	5.75%	10.95%	3/31/2028	19,850		19,352		19,332
Turbo Buyer, Inc.	+	(2)(3)(8)	Automotive	LIBOR	6.00%	11.59%	12/2/2025	34,075		33,899		33,575
U.S. TelePacific Holdings Corp.	+	(2)(3)(6)(7)	Telecommunications	SOFR	1.00%, 6.00% PIK	12.57%	5/2/2026	3,686		3,394		1,227
USALCO, LLC	+	(2)(3)(6)	Chemicals, Plastics & Rubber	SOFR	6.00%	11.22%	10/19/2027	14,770		14,544		14,481
VRC Companies, LLC	^+	(2)(3)(8)	Business Services	SOFR	5.50%	10.72%	6/29/2027	28,621		28,305		28,214
Welocalize, Inc.	^+	(2)(3)(6)(8)	Business Services	SOFR	4.75%	10.09%	12/23/2024	32,649		32,473		31,833
WRE Holding Corp.	^+	(2)(3)(6)(8)	Environmental Industries	SOFR	5.00%	10.19%	1/3/2025	8,089		8,086		8,031
Yellowstone Buyer Acquisition, LLC	+	(2)(3)	Consumer Goods: Durable	LIBOR	5.75%	11.02%	9/13/2027	39,300		38,711		37,337
























First Lien Debt Total										$	853,096	$	797,867








Total Investments										$	853,096	$	797,867

^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility with the Company (the “Credit Fund Facility”). Accordingly, such assets are not available to creditors of Credit Fund Sub.

+ Denotes that all or a portion of the assets are owned by Credit Fund Sub. Credit Fund Sub has entered into a revolving credit facility (the “Credit Fund Sub Facility”). The lenders of the Credit Fund Sub Facility have a first lien security interest in substantially all of the assets of Credit Fund Sub. Accordingly, such assets are not available to creditors of Credit Fund.

(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of June 30, 2023, the geographical composition of investments as a percentage of fair value was 1.4% in Canada and 98.6% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR, the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2023. As of June 30, 2023, the reference rates for Credit Fund’s variable rate loans were the 30-day LIBOR at 5.22%, the 90-day LIBOR at 5.55%, the 180-day LIBOR at 5.76%, the 30-day SOFR at 5.14%, the 90-day SOFR at 5.27%, and the 180-day SOFR at 5.39%.

(3)Loan includes interest rate floor feature, which generally ranges from 0.75% to 1.00%.

(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund, pursuant to Credit Fund’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.

(6)Loans include a credit spread adjustment that ranges from 0.05% to 0.43%.

(7)Loan was on non-accrual status as of June 30, 2023.

(8)As of June 30, 2023, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


First Lien Debt – unfunded delayed draw and revolving term loans commitments	Type	Unused Fee	Par/ Principal Amount		Fair Value
ACR Group Borrower, LLC	Revolver	0.38%	$	1,890	$	(28)
Analogic Corporation	Revolver	0.50	512		(4)
Chartis Holding, LLC	Revolver	0.50	1,298		(7)
Chemical Computing Group ULC (Canada)	Revolver	0.50	873		(7)
Diligent Corporation	Revolver	0.50	366		(11)
EPS Nass Parent, Inc.	Revolver	0.50	359		(13)
EvolveIP, LLC	Revolver	0.50	622		(8)
Heartland Home Services, Inc.	Revolver	0.50	772		(3)
HMT Holding Inc.	Revolver	0.50	3,351		(80)
Jensen Hughes, Inc.	Revolver	0.50	682		(12)
KBP Investments, LLC	Delayed Draw	1.00	565		(38)
Turbo Buyer, Inc.	Revolver	0.50	933		(13)
VRC Companies, LLC	Revolver	0.50	833		(11)
Welocalize, Inc.	Revolver	0.50	5,625		(120)
WRE Holding Corp.	Revolver	0.50	1,123		(7)
Total unfunded commitments			$	19,804	$	(362)


Consolidated Schedule of Investments as of December 31, 2022
Investments (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (100.0% of fair value)
ACR Group Borrower, LLC	^+	(2)(3)(7)	Aerospace & Defense	LIBOR	4.50%	9.22%	3/31/2028	$	36,965	$	36,488	$	36,015
Acrisure, LLC	+#	(2)	Diversified Financial Services	LIBOR	3.50%	7.88%	2/13/2027	25,118		25,099		23,485
Alpine Acquisition Corp II	+	(2)(3)(6)	Transportation: Cargo	SOFR	5.50%	9.76%	11/30/2026	10,000		9,527		9,630
Analogic Corporation	^+	(2)(3)(7)	Capital Equipment	LIBOR	5.25%	9.67%	6/22/2024	20,226		20,217		19,725
Anchor Packaging, Inc.	+#	(2)	Containers, Packaging & Glass	LIBOR	4.00%	8.38%	7/18/2026	22,221		22,157		21,360
API Technologies Corp.	+#	(2)	Aerospace & Defense	LIBOR	4.25%	8.98%	5/9/2026	14,475		14,436		13,127
Aptean, Inc.	+#	(2)(6)	Software	SOFR	4.25%	8.98%	4/23/2026	12,031		11,997		11,475
Avalign Technologies, Inc.	+#	(2)(6)	Healthcare & Pharmaceuticals	SOFR	4.50%	9.03%	12/22/2025	14,294		14,227		13,382
BMS Holdings III Corp.	+	(2)(3)	Construction & Building	LIBOR	5.50%	10.23%	9/30/2026	11,131		11,049		10,931
Chartis Holding, LLC	+	(2)(3)(7)	Business Services	LIBOR	5.00%	9.77%	5/1/2025	6,893		6,893		6,832
Chemical Computing Group ULC (Canada)	^+	(2)(3)(6) (7)	Software	SOFR	4.50%	8.57%	8/30/2024	13,769		13,559		13,564
Diligent Corporation	^+	(2)(3)(7)	Telecommunications	LIBOR	6.25%	10.63%	8/4/2025	9,880		9,706		9,449
Divisions Holding Corporation	+#	(2)(3)	Business Services	LIBOR	4.75%	9.13%	5/27/2028	24,688		24,488		24,009
DTI Holdco, Inc.	+	(2)(3)	High Tech Industries	SOFR	4.75%	8.84%	4/26/2029	29,925		29,373		27,363
Eliassen Group, LLC	+	(2)(3)	Business Services	SOFR	5.50%	10.07%	4/14/2028	19,375		19,148		19,150
EPS Nass Parent, Inc.	^+	(2)(3)(7)	Utilities: Electric	LIBOR	5.75%	10.48%	4/19/2028	34,104		33,524		32,432
EvolveIP, LLC	^+	(2)(3)(6) (7)	Telecommunications	SOFR	5.50%	10.09%	6/7/2025	40,392		40,361		39,633
Exactech, Inc.	+#	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	3.75%	8.13%	2/14/2025	21,081		21,022		17,002
GSM Acquisition Corp.	^+	(2)(3)(6)	Leisure Products & Services	SOFR	5.00%	9.83%	11/16/2026	30,958		30,709		29,636
Heartland Home Services, Inc.	+	(2)(3)	Consumer Services	LIBOR	5.75%	10.10%	12/15/2026	7,242		7,158		7,114
Heartland Home Services, Inc.	+	(2)(3)(7)	Consumer Services	LIBOR	6.00%	10.38%	12/15/2026	24,255		24,176		24,014
Higginbotham Insurance Agency, Inc.	+	(2)(3)	Diversified Financial Services	LIBOR	5.25%	9.63%	11/25/2026	4,477		4,418		4,377
HMT Holding Inc.	^+	(2)(3)(6) (7)	Energy: Oil & Gas	SOFR	5.75%	10.15%	11/17/2025	32,148		32,013		30,654
Integrity Marketing Acquisition, LLC	^+	(2)(3)	Diversified Financial Services	LIBOR	6.05%	10.57%	8/27/2025	36,943		36,622		35,614
Integrity Marketing Acquisition, LLC	^+	(2)(3)	Diversified Financial Services	LIBOR	6.02%	10.57%	8/27/2025	6,949		6,873		6,699
Jensen Hughes, Inc.	+	(2)(3)(7)	Utilities: Electric	LIBOR	4.50%	9.43%	3/22/2024	34,584		34,559		33,323
K2 Insurance Services, LLC	+	(2)(3)(7)	Diversified Financial Services	LIBOR	5.00%	9.73%	7/1/2026	12,799		12,799		12,665
KAMC Holdings, Inc.	+#	(2)	Energy: Electricity	LIBOR	4.00%	8.73%	8/14/2026	13,545		13,507		10,881
KBP Investments, LLC	+	(2)(3)(7)	Beverage & Food	SOFR	5.50%, 0.50% PIK	10.53%	5/25/2027	37,241		37,055		34,326
Odyssey Logistics & Technology Corp.	+#	(2)(3)	Transportation: Cargo	LIBOR	4.00%	8.38%	10/12/2024	9,505		9,489		9,277
Output Services Group	^+	(2)(3)	Media: Advertising, Printing & Publishing	SOFR	5.25%, 1.50% PIK	11.30%	6/27/2026	19,190		19,169		13,097
PF Atlantic Holdco 2, LLC	+	(2)(3)	Leisure Products & Services	LIBOR	5.50%	10.25%	11/12/2027	15,396		15,168		15,126
Premise Health Holding Corp.	+#	(2)	Healthcare & Pharmaceuticals	LIBOR	3.75%	7.92%	7/10/2025	13,306		13,280		13,199


Consolidated Schedule of Investments as of December 31, 2022
Investments (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
QW Holding Corporation	^+	(2)(3)(7)	Environmental Industries	LIBOR	5.50%	9.64%	8/31/2026	$	21,574	$	21,437	$	21,105
Radiology Partners, Inc.	+#	(2)	Healthcare & Pharmaceuticals	LIBOR	4.25%	8.64%	7/9/2025	27,686		27,625		23,201
RevSpring Inc.	+#	(2)	Media: Advertising, Printing & Publishing	LIBOR	4.00%	8.73%	10/11/2025	28,848		28,737		27,719
Riveron Acquisition Holdings, Inc.	+	(2)(3)	Diversified Financial Services	LIBOR	5.75%	10.48%	5/22/2025	11,284		11,284		11,284
Striper Buyer, LLC	+	(2)(3)	Containers, Packaging & Glass	LIBOR	5.50%	9.88%	12/30/2026	14,700		14,593		14,604
Tank Holding Corp.	+	(2)(3)(6)	Capital Equipment	SOFR	5.75%	10.16%	3/31/2028	19,950		19,410		19,421
Turbo Buyer, Inc.	+	(2)(3)(7)	Automotive	LIBOR	6.00%	11.13%	12/2/2025	34,251		34,044		33,625
U.S. TelePacific Holdings Corp.	+	(2)(3)(6)	Telecommunications	SOFR	1.00%, 7.25% PIK	11.57%	5/2/2026	7,086		7,073		2,527
USALCO, LLC	+	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	6.00%	10.73%	10/19/2027	14,845		14,598		14,118
VRC Companies, LLC	^+	(2)(3)(7)	Business Services	LIBOR	5.50%	10.59%	6/29/2027	28,767		28,418		28,059
Welocalize, Inc.	+	(2)(3)(7)	Business Services	LIBOR	4.75%	9.13%	12/23/2024	33,853		33,615		32,677
WRE Holding Corp.	^+	(2)(3)(6) (7)	Environmental Industries	SOFR	5.00%	9.84%	1/3/2025	8,155		8,152		7,892
Yellowstone Buyer Acquisition, LLC	+	(2)(3)	Consumer Goods: Durable	LIBOR	5.75%	10.07%	9/13/2027	39,500		38,851		37,922




















First Lien Debt Total										$	948,103	$	902,720



Equity Investments (0.0% of fair value)
DBI Holding, LLC	^		Transportation: Cargo					2,961		$	—	$	—
DBI Holding, LLC	^		Transportation: Cargo					13,996		5,364		—
Equity Investments Total										$	5,364	$	—
Total Investments										$	953,467	$	902,720

^ Denotes that all or a portion of the assets are owned by Credit Fund. Credit Fund has entered into a revolving credit facility (the “Credit Fund Facility”). Accordingly, such assets are not available to creditors of Credit Fund Sub.

(1)Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2022, the geographical composition of investments as a percentage of fair value was 1.5% in Canada and 98.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2022. As of December 31, 2022, the reference rates for Credit Fund's variable rate loans were the 30-day LIBOR at 4.39%, the 90-day LIBOR at 4.77%, the 180-day LIBOR at 5.14%, the 30-day SOFR at 4.36%, and the 90-day SOFR at 4.59%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)Loans include a credit spread adjustment that ranges from 0.10% to 0.26%.

(7)As of December 31, 2022, Credit Fund had the following unfunded commitments to fund delayed draw and revolving senior secured loans:


First Lien Debt—unfunded delayed draw and revolving term loans commitments	Type	Unused Fee		Par/ Principal Amount		Fair Value
ACR Group Borrower, LLC	Revolver	0.38	%	$	4,515	$	(103)
Analogic Corporation	Revolver	0.50		226		(6)
Chartis Holding, LLC	Revolver	0.50		2,183		(15)
Chemical Computing Group ULC (Canada)	Revolver	0.50		873		(12)
Diligent Corporation	Revolver	0.50		492		(20)
EPS Nass Parent, Inc.	Delayed Draw	1.00		1,380		(63)
EPS Nass Parent, Inc.	Revolver	0.50		1,111		(51)
EvolveIP, LLC	Revolver	0.50		2,757		(49)
Heartland Home Services, Inc.	Revolver	0.50		771		(7)
HMT Holding Inc.	Revolver	0.50		6,173		(241)
Jensen Hughes, Inc.	Revolver	0.50		1,455		(51)
K2 Insurance Services, LLC	Revolver	0.50		1,170		(11)
KBP Investments, LLC	Delayed Draw	1.00		565		(44)
QW Holding Corporation	Revolver	0.50		5,498		(95)
Turbo Buyer, Inc.	Revolver	0.50		933		(17)
VRC Companies, LLC	Revolver	0.50		833		(20)
Welocalize, Inc.	Revolver	0.50		3,375		(101)
Welocalize, Inc.	Revolver	0.50		2,250		(67)
WRE Holding Corp.	Revolver	0.50		1,123		(32)



Total unfunded commitments				$	37,683	$	(1,005)

Debt

The Credit Fund and Credit Fund Sub are party to separate credit facilities as described below. Until its termination on June 28, 2022, Credit Fund Warehouse II was party to the Credit Fund Warehouse II Facility, as described below. As of June 30, 2023 and December 31, 2022, Credit Fund and Credit Fund Sub were in compliance with all covenants and other requirements of their respective credit facility agreements. Below is a summary of the borrowings and repayments under the credit facilities for the three and six months ended June 30, 2023 and 2022, and the outstanding balances under the credit facilities for the respective periods.


	Credit Fund Facility				Credit Fund Sub Facility				Credit Fund Warehouse II Facility
	2023		2022		2023		2022			2023		2022
Three Months Ended June 30,
Outstanding Borrowing, beginning of period	$	—	$	—	$	517,221	$	477,621		$	—	$	76,708
Borrowings	—		—		5,000		87,000			—		—
Repayments	—		—		(23,000)		(32,000)			—		(76,708)
Outstanding Borrowing, end of period	$	—	$	—	$	499,221	$	532,621		$	—	$	—

Six Months Ended June 30,
Outstanding Borrowing, beginning of period	$	—	$	—	$	588,621	$	514,621		$	—	$	86,030
Borrowings	—		—		14,000		87,000			—		—
Repayments	—		—		(103,400)		(69,000)			—		(86,030)
Outstanding Borrowing, end of period	$	—	$	—	$	499,221	$	532,621		$	—	$	—

Credit Fund Facility. On June 24, 2016, Credit Fund closed on the Credit Fund Facility, which was subsequently amended on June 5, 2017, October 2, 2017, November 3, 2017, June 22, 2018, June 29, 2018, February 21, 2019, March 20, 2020, February 22, 2021, May 19, 2022, and May 21, 2023 pursuant to which Credit Fund may from time to time request mezzanine loans from the Company. The maximum principal amount of the Credit Fund Facility is $100,000 ($175,000 prior to the May 21, 2023 amendment), subject to availability under the Credit Fund Facility, which is based on certain advance rates multiplied by the value of Credit Fund’s portfolio investments net of certain other indebtedness that Credit Fund may incur in accordance with the terms of the Credit Fund Facility. Proceeds of the Credit Fund Facility may be used for general corporate purposes, including the funding of portfolio investments. Amounts drawn under the Credit Fund Facility bear interest at the greater of zero and LIBOR plus an applicable spread of 9.00% and such interest payments are made quarterly. The availability period under the Credit Fund Facility will terminate on May 21, 2025, (May 21, 2023 prior to the May 21, 2023 amendment), which is also its maturity date upon which Credit Fund is obligated to repay any outstanding borrowings.

Credit Fund Sub Facility. On June 24, 2016, Credit Fund Sub closed on the Credit Fund Sub Facility with lenders, which was subsequently amended on May 31, 2017, October 27, 2017, August 24, 2018, December 12, 2019, March 11, 2020, May 3, 2021, May 3, 2022 and April 20, 2023. The Credit Fund Sub Facility provides for secured borrowings during the applicable revolving period up to an amount equal to $640,000 (the borrowing base as calculated pursuant to the terms of the Credit Fund Sub Facility). The aggregate maximum credit commitment can be increased up to an amount not to exceed $1,400,000, subject to certain restrictions and conditions set forth in the Credit Fund Sub Facility, including adequate collateral to support such borrowings. The Credit Fund Sub Facility has a revolving period through May 23, 2025, (May 23, 2023 prior to the April 20, 2023 amendment) and a maturity date of May 23, 2026, (May 23, 2025 prior to the April 20, 2023 amendment), which may be extended by mutual agreement of the parties to the Credit Fund Sub Facility. Borrowings under the Credit Fund Sub Facility bear interest initially at the applicable commercial paper rate (if the lender is a conduit lender) or SOFR plus 2.70% (2.35% prior to the April 20, 2023 amendment). The Credit Fund Sub is also required to pay an undrawn commitment fee of between 0.50% and 0.75% per year depending on the usage of the Credit Fund Sub Facility. Payments under the Credit Fund Sub Facility are made quarterly. Subject to certain exceptions, the Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Sub.

Credit Fund Warehouse II Facility. On August 16, 2019, Credit Fund Warehouse II closed on a revolving credit facility (the “Credit Fund Warehouse II Facility”) with lenders. The Credit Fund Warehouse II Facility provided for secured borrowings during the applicable revolving period up to an amount equal to $150,000. The Credit Fund Warehouse II Facility was secured by a first lien security interest in substantially all of the portfolio investments held by the Credit Fund Warehouse II Facility. The maturity date of the Credit Fund Warehouse II Facility was August 16, 2022 and Credit Fund Warehouse II repaid all outstanding amounts on June 28, 2022. Amounts borrowed under the Credit Fund Warehouse II Facility during the first 12 months bore interest at a rate of LIBOR plus 1.05%, and amounts borrowed in the second 12 months bore interest at LIBOR plus 1.15%. Other amounts borrowed under the Credit Fund Warehouse II Facility bore interest at a rate of LIBOR plus 1.50%.

6. MIDDLE MARKET CREDIT FUND II, LLC

Overview

On November 3, 2020, the Company and CCLF entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in the Company's consolidated financial statements. Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II is managed by a four-member board, on which the Company and CCLF have equal representation. Establishing a quorum for Credit Fund II's board requires at least one of the Company's representatives and one of CCLF's representatives. The Company and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of its membership interest, each of the Company and CCLF indirectly bears an allocable share of all expenses and other obligations of Credit Fund II.

Credit Fund II's initial portfolio consisted of 45 senior secured loans of middle market companies with an aggregate principal balance of approximately $250 million. Credit Fund II's initial portfolio was funded on November 3, 2020 with existing senior secured debt investments contributed by the Company and as part of the transaction, the Company determined that the contribution met the requirements under ASC 860, Transfers and Servicing.

Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of the Company's representatives and one of CCLF's representatives. Therefore, although the Company owns more than 25% of the voting securities of Credit Fund II, the Company does not believe that it has control over Credit Fund II (other than for purposes of the Investment Company Act).

Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, was formed on September 4, 2020. Credit Fund II Sub is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements commencing from the date of its formation. Credit Fund II Sub primarily holds investments in first lien loans of middle market companies, which are pledged as security for the Credit Fund II Senior Notes. Refer to “Credit Fund II Senior Notes” in this Note 6 for discussions regarding the notes issued by Credit Fund II Sub.

Credit Fund II, the Company and CCLF entered into an administration agreement with Carlyle Global Credit Administration L.L.C., the administrative agent of Credit Fund II (in such capacity, the “Credit Fund II Administrative Agent”), pursuant to which the Credit Fund II Administrative Agent is delegated certain administrative and non-discretionary functions, is authorized to enter into sub-administration agreements at the expense of Credit Fund II with the approval of the board of

managers of Credit Fund II, and is reimbursed by Credit Fund II for its costs and expenses and Credit Fund II’s allocable portion of overhead incurred by the Credit Fund II Administrative Agent in performing its obligations thereunder.

Credit Fund II Senior Notes

On November 3, 2020 and as amended on December 29, 2021, June 30, 2022 and August 4, 2023, Credit Fund II Sub closed on the Credit Fund II Senior Notes (the “Credit Fund II Senior Notes”) with lenders. The Credit Fund II Senior Notes provides for secured borrowings totaling $157,500 with two tranches, A-1 and A-2 outstanding. The facility is secured by a first lien security interest in substantially all of the portfolio investments held by Credit Fund II Sub. The maturity date of the Credit Fund II Senior Notes is November 3, 2030. Amounts issued for the Class A-1 notes totaled $147,500 and bear interest at a rate of Term SOFR plus 2.85%, and amounts issued for the Class A-2 notes totaled $10,000 and bear interest at Term SOFR plus 3.35%. The A-1 Notes were rated AAA, and the A-2 Notes were rated AA by DBRS Morningstar. The terms of the Credit Fund II Senior Notes provide that as loans pay down, up to $100,000 is available from principal proceeds for reinvestment, and then the investment principal proceeds are used to directly pay down the principal balance on the Credit Fund II Senior Notes. As of June 30, 2023 and December 31, 2022, Credit Fund II Sub was in compliance with all covenants and other requirements of its respective credit agreements.

Selected Financial Data

Since inception of Credit Fund II and through June 30, 2023, the Company and CCLF made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. Below is certain summarized consolidated information for Credit Fund II as of June 30, 2023 and December 31, 2022.


	As of
	June 30, 2023		December 31, 2022
Selected Consolidated Balance Sheet Information:
ASSETS
Investments, at fair value (amortized cost of $240,991 and $250,134, respectively)	$	227,985	$	244,739
Cash and cash equivalents(1)	17,287		2,078
Other assets	2,538		5,825
Total assets	$	247,810	$	252,642
LIABILITIES AND MEMBERS’ EQUITY

Notes payable, net of unamortized debt issuance costs of $733 and $783, respectively	$	156,765	$	156,717
Other liabilities	11,552		9,212





Total members' equity(2)	79,493		86,713
Total liabilities and members’ equity	$	247,810	$	252,642

(1) As of June 30, 2023 and December 31, 2022, all of Credit Fund II's cash and cash equivalents was restricted.

(2) As of June 30, 2023 and December 31, 2022, the fair value of Company's ownership interest in the members' equity was $66,919 and $72,957, respectively.


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	(unaudited)				(unaudited)
Selected Consolidated Statement of Operations Information:
Total investment income	$	6,933	$	4,594	$	13,540	$	9,080
Expenses
Interest and credit facility expenses	3,139		1,461		6,083		2,680
Other expenses	192		160		467		346
Total expenses	3,331		1,621		6,550		3,026
Net investment income (loss)	3,602		2,973		6,990		6,054

Net change in unrealized appreciation (depreciation) on investments	(5,531)		(1,171)		(7,611)		(2,600)
Net increase (decrease) resulting from operations	$	(1,929)	$	1,802	$	(621)	$	3,454

Below is a summary of Credit Fund II’s portfolio, followed by a listing of the loans in Credit Fund II’s portfolio as of June 30, 2023 and December 31, 2022:


	As of
	June 30, 2023			December 31, 2022
Senior secured loans(1)	$	244,773		$	253,310


Number of portfolio companies in Credit Fund II	33			35
Average amount per portfolio company(1)	$	7,417		$	7,237
Number of loans on non-accrual status	1			—
Fair value of loans on non-accrual status	$	—		$	—
Percentage of portfolio at floating interest rates(2)(3)	97.9		%	97.9		%
Percentage of portfolio at fixed interest rates(3)	2.1		%	2.1		%
Fair value of loans with PIK provisions	$	2,811		$	10,787
Percentage of portfolio with PIK provisions(3)	1.2		%	4.4		%

(1)At par/principal amount.

(2)Floating rate debt investments are generally subject to interest rate floors.

(3)Percentages based on fair value.


Consolidated Schedule of Investments as of June 30, 2023
Investments (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (89.3% of fair value)
Alpine Acquisition Corp II	^	(2)(3)(7)	Transportation: Cargo	SOFR	5.75%	11.01%	11/30/2026	$	9,992	$	9,657	$	9,723
American Physician Partners, LLC	^	(2)(3)(7)(8)(9)	Healthcare & Pharmaceuticals	SOFR	10.25% (100% PIK)	15.52%	8/5/2022	9,789		9,078		—
Appriss Health, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	6.75%	11.90%	5/6/2027	7,483		7,368		7,321
Apptio, Inc.	^	(2)(3)	Software	LIBOR	5.00%	10.20%	1/10/2025	5,357		5,324		5,357
Ascend Buyer, LLC	^	(2)(3)(7)	Containers, Packaging & Glass	SOFR	6.40%	11.79%	9/30/2028	9,031		8,889		8,791
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^	(2)(3)	Software	LIBOR	6.00%	11.27%	12/24/2026	4,289		4,228		4,055
BMS Holdings III Corp.	^	(2)(3)	Construction & Building	SOFR	5.50%	10.89%	9/30/2026	3,224		3,183		3,148
Chartis Holding, LLC	^	(2)(3)(7)	Business Services	SOFR	5.00%	10.22%	5/1/2025	9,772		9,762		9,719
Comar Holding Company, LLC	^	(2)(3)(7)	Containers, Packaging & Glass	SOFR	5.75%	10.70%	6/18/2024	8,576		8,544		7,948
Cority Software Inc. (Canada)	^	(2)(3)	Software	SOFR	5.00%	9.89%	7/2/2026	8,579		8,495		8,522
Cority Software Inc. (Canada)	^	(2)(3)	Software	SOFR	7.50%	11.89%	7/2/2026	1,300		1,297		1,297
Dwyer Instruments, Inc.	^	(2)(3)(7)	Capital Equipment	SOFR	5.75%	11.09%	7/21/2027	9,864		9,818		9,760
EvolveIP, LLC	^	(2)(3)(7)	Telecommunications	SOFR	5.50%	10.70%	6/7/2025	8,577		8,573		8,462
Harbour Benefit Holdings, Inc.	^	(2)(3)	Business Services	LIBOR	5.00%	10.39%	12/13/2024	9,776		9,760		9,716
Hoosier Intermediate, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	5.50%	10.82%	11/15/2028	6,414		6,241		5,945
Integrity Marketing Acquisition, LLC	^	(2)(3)(7)	Diversified Financial Services	SOFR	6.05%	11.41%	8/27/2025	4,845		4,717		4,739
Integrity Marketing Acquisition, LLC	^	(2)(3)(7)	Diversified Financial Services	SOFR	6.02%	11.38%	8/27/2025	4,511		4,374		4,412
Material Holdings, LLC	^	(2)(3)(7)	Business Services	SOFR	6.00%	11.34%	8/19/2027	7,860		7,795		7,435
Maverick Acquisition, Inc.	^	(2)(3)	Aerospace & Defense	LIBOR	6.25%	11.44%	6/1/2027	7,860		7,734		6,383
NMI AcquisitionCo, Inc.	^	(2)(3)(7)	High Tech Industries	SOFR	5.75%	10.95%	9/6/2025	9,951		9,921		9,792
PF Atlantic Holdco 2, LLC	^	(2)(3)(7)	Leisure Products & Services	SOFR	5.50%	10.89%	11/12/2027	9,899		9,632		9,749
PXO Holdings I Corp.	^	(2)(3)(7)	Chemicals, Plastics & Rubber	SOFR	5.50%	10.85%	3/8/2028	9,950		9,795		9,701
Riveron Acquisition Holdings, Inc.	^	(2)(3)	Diversified Financial Services	LIBOR	5.75%	10.83%	5/22/2025	8,048		7,990		8,048
RSC Acquisition, Inc.	^	(2)(3)(7)	Diversified Financial Services	SOFR	5.50%	10.76%	11/1/2026	9,953		9,819		9,742
TCFI Aevex LLC	^	(2)(3)(7)	Aerospace & Defense	SOFR	6.00%	11.20%	3/18/2026	1,675		1,658		1,612
Turbo Buyer, Inc.	^	(2)(3)	Automotive	LIBOR	6.00%	11.59%	12/2/2025	7,967		7,876		7,853
U.S. Legal Support, Inc.	^	(2)(3)(7)	Business Services	SOFR	5.75%	11.14%	11/30/2024	6,138		6,132		6,036
US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	LIBOR	6.50%, 0.25% PIK	12.13%	4/13/2026	3,027		2,996		2,811
Westfall Technik, Inc.	^	(2)(3)	Chemicals, Plastics & Rubber	SOFR	6.75%	12.14%	9/13/2024	6,383		6,345		6,005
Wineshipping.com LLC	^	(2)(3)(7)	Beverage & Food	SOFR	5.75%	11.15%	10/29/2027	9,899		9,587		9,405


















First Lien Debt Total										$	216,588	$	203,487


Consolidated Schedule of Investments as of June 30, 2023
Investments (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Second Lien Debt (10.7% of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)	Aerospace & Defense	LIBOR	8.25%	13.64%	1/17/2028	$	5,514	$	5,432	$	5,596
AP Plastics Acquisition Holdings, LLC	^	(2)(3)(7)	Chemicals, Plastics & Rubber	SOFR	7.50%	12.69%	8/10/2029	4,500		4,423		4,372
AQA Acquisition Holdings, Inc.	^	(2)(3)(7)	High Tech Industries	SOFR	7.50%	12.70%	3/3/2029	5,000		4,899		4,973
Quartz Holding Company	^	(2)(7)	Software	SOFR	8.00%	13.20%	4/2/2027	4,852		4,798		4,830
World 50, Inc.	^	(6)	Business Services	FIXED	11.50%	11.50%	1/9/2027	4,918		4,851		4,727





Second Lien Debt Total										$	24,403	$	24,498
Total Investments										$	240,991	$	227,985

^ Denotes that all or a portion of the assets are owned by Credit Fund II Sub. Credit Fund II Sub has entered into the Credit Fund II Sub Notes. The lenders of the Credit Fund II Sub Notes have a first lien security interest in substantially all of the assets of Credit Fund II Sub. Accordingly, such assets are not available to creditors of Credit Fund II.

(1) Unless otherwise indicated, issuers of investments held by Credit Fund II are domiciled in the United States. As of June 30, 2023, the geographical composition of investments as a percentage of fair value was 4.3% in Canada, 1.8% in Luxembourg, 2.4% in the United Kingdom and 91.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR, the Secured Overnight Financing Rate (“SOFR”) or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of June 30, 2023. As of June 30, 2023, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 5.22%, the 90-day LIBOR at 5.55%, the 180-day LIBOR at 5.76%, the 30-day SOFR at 5.14%, the 90-day SOFR at 5.27%, and the 180-day SOFR at 5.39%.

(3)Loan includes interest rate floor feature, which generally ranges from 0.50% to 1.00%.

(5)Fair value is determined in good faith by or under the direction of the board of managers of Credit Fund II, pursuant to Credit Fund II’s valuation policy, with the fair value of all investments determined using significant unobservable inputs, which is substantially similar to the valuation policy of the Company provided in Note 3, Fair Value Measurements, to these consolidated financial statements.

(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.

(7)Loans include a credit spread adjustment that ranges from 0.10% to 0.25%.

(8)Loan is in forbearance as of June 30, 2023.

(9)Loan was on non-accrual status as of June 30, 2023.


Consolidated Schedule of Investments as of December 31, 2022
Investments (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
First Lien Debt (90.0% of fair value)
Airnov, Inc.	^	(2)(3)	Containers, Packaging & Glass	LIBOR	5.00%	9.75%	12/19/2025	$	9,844	$	9,833	$	9,787
Alpine Acquisition Corp II	^	(2)(3)(7)	Transportation: Cargo	SOFR	5.50%	9.76%	11/30/2026	3,292		3,188		3,170
American Physician Partners, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	SOFR	6.75%, 3.50% PIK	14.67%	2/15/2023	9,074		9,074		7,833
Appriss Health, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	7.25%	11.54%	5/6/2027	7,502		7,375		7,214
Apptio, Inc.	^	(2)(3)	Software	LIBOR	6.00%	9.94%	1/10/2025	5,357		5,314		5,357
Ascend Buyer, LLC	^	(2)(3)(7)	Containers, Packaging & Glass	SOFR	6.25%	10.67%	9/30/2028	9,077		8,924		8,917
Aurora Lux FinCo S.Á.R.L. (Luxembourg)	^	(2)(3)	Software	LIBOR	6.00%	10.32%	12/24/2026	4,311		4,243		4,074
BMS Holdings III Corp.	^	(2)(3)	Construction & Building	LIBOR	5.50%	10.23%	9/30/2026	3,241		3,194		3,183
Chartis Holding, LLC	^	(2)(3)	Business Services	LIBOR	5.00%	9.77%	5/1/2025	9,822		9,810		9,757
Comar Holding Company, LLC	^	(2)(3)	Containers, Packaging & Glass	LIBOR	5.75%	10.47%	6/18/2024	8,621		8,573		8,334
Cority Software Inc. (Canada)	^	(2)(3)	Software	SOFR	5.50%	9.17%	7/2/2026	8,623		8,527		8,539
Dwyer Instruments, Inc.	^	(2)(3)	Capital Equipment	LIBOR	6.00%	10.74%	7/21/2027	9,914		9,863		9,761
EvolveIP, LLC	^	(2)(3)(7)	Telecommunications	SOFR	5.50%	10.09%	6/7/2025	8,621		8,617		8,469
Harbour Benefit Holdings, Inc.	^	(2)(3)	Business Services	LIBOR	5.25%	9.95%	12/13/2024	9,848		9,828		9,789
Hoosier Intermediate, LLC	^	(2)(3)	Healthcare & Pharmaceuticals	LIBOR	5.50%	10.11%	11/15/2028	6,447		6,261		6,094
Integrity Marketing Acquisition, LLC	^	(2)(3)	Diversified Financial Services	LIBOR	6.05%	9.95%	8/27/2025	4,870		4,717		4,708
Integrity Marketing Acquisition, LLC	^	(2)(3)	Diversified Financial Services	LIBOR	6.02%	10.57%	8/27/2025	4,534		4,369		4,371
K2 Insurance Services, LLC	^	(2)(3)	Diversified Financial Services	LIBOR	5.00%	9.73%	7/1/2026	8,922		8,833		8,836
Material Holdings, LLC	^	(2)(3)	Business Services	SOFR	6.00%	10.67%	8/19/2027	7,900		7,829		7,547
Maverick Acquisition, Inc.	^	(2)(3)	Aerospace & Defense	LIBOR	6.25%	10.98%	6/1/2027	7,900		7,760		6,563
NMI AcquisitionCo, Inc.	^	(2)(3)	High Tech Industries	LIBOR	5.75%	10.13%	9/6/2025	8,617		8,617		8,394
PF Atlantic Holdco 2, LLC	^	(2)(3)	Leisure Products & Services	LIBOR	5.50%	10.25%	11/12/2027	9,950		9,657		9,776
QW Holding Corporation	^	(2)(3)	Environmental Industries	LIBOR	5.50%	9.64%	8/31/2026	9,947		9,808		9,775
Riveron Acquisition Holdings, Inc.	^	(2)(3)	Diversified Financial Services	LIBOR	5.75%	10.48%	5/22/2025	8,090		8,018		8,090
RSC Acquisition, Inc.	^	(2)(3)(7)	Diversified Financial Services	SOFR	5.50%	9.83%	11/1/2026	8,315		8,215		7,938
TCFI Aevex LLC	^	(2)(3)	Aerospace & Defense	LIBOR	6.00%	10.38%	3/18/2026	1,684		1,664		1,539
Turbo Buyer, Inc.	^	(2)(3)	Automotive	LIBOR	6.00%	11.15%	12/2/2025	8,009		7,901		7,866
U.S. Legal Support, Inc.	^	(2)(3)(7)	Business Services	SOFR	5.75%	10.33%	11/30/2024	6,170		6,163		6,057
US INFRA SVCS Buyer, LLC	^	(2)(3)	Environmental Industries	LIBOR	6.50%, 0.25% PIK	11.47%	4/13/2026	3,113		3,075		2,954
Westfall Technik, Inc.	^	(2)(3)	Chemicals, Plastics & Rubber	SOFR	6.25%	10.83%	9/13/2024	6,416		6,364		6,280


Consolidated Schedule of Investments as of December 31, 2022
Investments (1)		Footnotes	Industry	Reference Rate (2)	Spread (2)	Interest Rate (2)	Maturity Date	Par/ Principal Amount		Amortized Cost (4)		Fair Value (5)
Wineshipping.com LLC	^	(2)(3)	Beverage & Food	LIBOR	5.75%	10.15%	10/29/2027	$	9,950	$	9,608	$	9,161

















First Lien Debt Total										$	225,222	$	220,133
Second Lien Debt (10.0%) of fair value)
AI Convoy S.A.R.L (United Kingdom)	^	(2)(3)	Aerospace & Defense	LIBOR	8.25%	12.92%	1/17/2028	$	5,514	$	5,425	$	5,679
AP Plastics Acquisition Holdings, LLC	^	(2)(3)	Chemicals, Plastics & Rubber	LIBOR	7.50%	11.85%	8/10/2029	4,500		4,419		4,318
AQA Acquisition Holdings, Inc.	^	(2)(3)	High Tech Industries	LIBOR	7.50%	12.23%	3/3/2029	5,000		4,893		4,760
Quartz Holding Company	^	(2)	Software	LIBOR	8.00%	12.38%	4/2/2027	4,850		4,792		4,656
World 50, Inc.	^	(6)	Business Services	FIXED	11.50%	11.50%	1/9/2027	5,465		5,383		5,193




Second Lien Debt Total										$	24,912	$	24,606
Total Investments										$	250,134	$	244,739

(1) Unless otherwise indicated, issuers of investments held by Credit Fund are domiciled in the United States. As of December 31, 2022, the geographical composition of investments as a percentage of fair value was 3.5% in Canada, 1.7% in Luxembourg, 2.3% in the United Kingdom and 92.5% in the United States. Certain portfolio company investments are subject to contractual restrictions on sales.

(2)Variable rate loans to the portfolio companies bear interest at a rate that is determined by reference to either LIBOR or an alternate base rate (commonly based on the Federal Funds Rate or the U.S. Prime Rate), which generally resets quarterly. For each such loan, Credit Fund II has indicated the reference rate used and provided the spread and the interest rate in effect as of December 31, 2022. As of December 31, 2022, the reference rates for Credit Fund II's variable rate loans were the 30-day LIBOR at 4.39%, the 90-day LIBOR at 4.77%, the 180-day LIBOR at 5.14%, the 30-day SOFR at 4.36%, and the 90-day SOFR at 4.59%.

(3)Loan includes interest rate floor feature, which is generally 1.00%.

(6)Represents a corporate mezzanine loan, which is subordinated to senior secured term loans of the portfolio company.

(7)Loans include a credit spread adjustment that ranges from 0.10% to 0.26%.

7. BORROWINGS

The Company is party to the Credit Facility, as described below. In accordance with the Investment Company Act, the Company is currently only allowed to borrow amounts such that its asset coverage, as defined in the Investment Company Act, is at least 150% after such borrowing. For the purposes of the asset coverage ratio under the Investment Company Act, the Preferred Stock, as defined in Note 1, is considered a senior security and is included in the denominator of the calculation. As of June 30, 2023 and December 31, 2022, asset coverage was 177.99% and 176.79%, respectively, and the Company is in compliance with all covenants and other requirements of the credit facility agreement.

Credit Facility

The Company closed on the Credit Facility on March 21, 2014, which was subsequently amended on January 8, 2015, May 25, 2016, March 22, 2017, September 25, 2018, June 14, 2019, November 8, 2019, October 28, 2020, October 11, 2021 and May 25, 2022. The maximum principal amount of the Credit Facility is $745,000, which was increased from $688,000 on April 21, 2023 pursuant to the terms of the agreement, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. The Company may borrow amounts in U.S. dollars or certain other permitted currencies. Amounts drawn under the Credit Facility, including amounts drawn in respect of letters of credit, bear interest at either (i) a term benchmark rate of the Adjusted Term SOFR Rate, the Adjusted Euribor Rate, or

the applicable Local Rate, as the case may be, or (ii) an Alternate Base Rate (which is the highest of (a) the Prime Rate, (b) the NYFRB Rate plus 0.50%, or (c) the Adjusted Term SOFR Rate for one month plus 1.00%) plus an applicable margin, each capitalized term as defined in the Credit Facility. The applicable margin for a term benchmark rate loan will be up to 1.875% and for an Alternate Base Rate loan will be up to 0.875%, in each case depending on the level of the Gross Borrowing Base compared to the Combined Debt Amount. The Company may elect either the term benchmark rate or the Alternative Base Rate at the time of drawdown, and loans may be converted from one rate to another at any time, subject to certain conditions. The Company also pays a fee of 0.375% on undrawn amounts under the Credit Facility and, in respect of each undrawn letter of credit, a fee and interest rate equal to the then-applicable margin under the Credit Facility while the letter of credit is outstanding. The availability period under the Credit Facility will terminate on May 25, 2026 and the Credit Facility will mature on May 25, 2027. During the period from May 25, 2026 to May 25, 2027, the Company will be obligated to make mandatory prepayments under the Credit Facility out of the proceeds of certain asset sales, other recovery events and equity and debt issuances.

Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature. As of June 30, 2023 and December 31, 2022, the Company was in compliance with all covenants and other requirements of the Credit Facility.

Below is a summary of the borrowings and repayments under the Credit Facility for the three and six months ended June 30, 2023 and 2022, and the outstanding balances under the Credit Facility for the respective periods.


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Outstanding Borrowing, beginning of period	$	455,859	$	359,679	$	440,441	$	407,655
Borrowings	30,000		144,000		74,792		202,500
Repayments	(87,500)		(55,500)		(118,141)		(159,746)
Foreign currency translation	1,882		(4,784)		3,149		(7,014)
Outstanding Borrowing, end of period	$	400,241	$	443,395	$	400,241	$	443,395

The Credit Facility consisted of the following as of June 30, 2023 and December 31, 2022:



	Total Facility		Borrowings Outstanding		Unused Portion(1)		Amount Available(2)

June 30, 2023	$	745,000	$	400,241	$	344,759	$	342,783

December 31, 2022	$	688,000	$	440,441	$	247,559	$	247,559

(1)The unused portion is the amount upon which commitment fees are based.

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

For the three and six months ended June 30, 2023 and 2022, the components of interest expense and credit facility fees were as follows:


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Interest expense	$	7,143		$	2,894		$	14,359		$	5,103
Facility unused commitment fee	258			297			488			630
Amortization of deferred financing costs and debt issuance costs	180			291			355			475

Total interest expense and credit facility fees	$	7,581		$	3,482		$	15,202		$	6,208
Cash paid for interest expense	$	7,535		$	3,251		$	15,152		$	5,475

Weighted average principal debt outstanding	$	411,932		$	383,763		$	432,053		$	366,205
Weighted average interest rate(1)	6.86		%	2.98		%	6.60		%	2.77		%

(1)Excludes facility unused commitment fee and amortization of deferred financing costs and debt issuance costs.

As of June 30, 2023 and December 31, 2022, the components of interest and credit facilities payable were as follows:


	As of
	June 30, 2023			December 31, 2022
Interest expense payable	$	207		$	1,131
Unused commitment fees payable	313			—

Interest and credit facilities payable	$	520		$	1,131

Weighted average interest rate (based on floating benchmark rates)	6.97		%	6.04		%

Senior Notes

On December 30, 2019, the Company closed a private offering of $115.0 million in aggregate principal amount of 4.75% Senior Unsecured Notes due December 31, 2024. Interest is payable quarterly, beginning March 31, 2020. On December 11, 2020, the Company issued an additional $75.0 million aggregate principal amount of senior unsecured notes due December 31, 2024. The 2020 Notes bear interest at an interest rate of 4.50% and the interest is payable quarterly, beginning December 31, 2020.

The interest rate on the Senior Notes is subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event that, subject to certain exceptions, the Senior Notes cease to have an investment grade rating. The Company is obligated to offer to repay the notes at par if certain change in control events occur. The Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. Interest expense on the Senior Notes for the three and six months ended June 30, 2023 and 2022 was $2,209 and $4,418, respectively.

The note purchase agreement, as supplemented by the first supplement, for the Senior Notes contains customary terms and conditions for senior unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a business development company within the meaning of the Investment Company Act and a regulated investment company under the Code, minimum asset coverage ratio and interest coverage ratio, and prohibitions on certain fundamental changes at the Company or any subsidiary guarantor, as well as customary events of default with customary cure and notice, including, without limitation, nonpayment, breach of covenant, material breach of representation or warranty under the note purchase agreement, cross-acceleration under other indebtedness of the Company or certain significant subsidiaries, certain judgments and orders, and certain events of bankruptcy. As of June 30, 2023 and December 31, 2022, the Company was in compliance with these terms and conditions.

2015-1R Notes

On June 26, 2015, the Company completed the 2015-1 Debt Securitization. The 2015-1 Notes were issued by the 2015-1 Issuer, a wholly-owned and consolidated subsidiary of the Company. The 2015-1 Debt Securitization was executed through a private placement of the 2015-1 Notes, consisting of $273,000 in notes that were issued at par and were scheduled to

mature on July 15, 2027. The Company received 100% of the $125,900 in nominal value of the non-interest bearing preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the 2015-1 Issuer of the initial closing date loan portfolio. In connection with the contribution, the Company made customary representations, warranties and covenants to the 2015-1 Issuer in the purchase agreement.

On August 30, 2018, the Company and the 2015-1 Issuer closed the 2015-1 Debt Securitization Refinancing. On the closing date of the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer, refinanced the 2015-1 Notes to the 2015-1R Notes, reduced the 2015-1 Issuer Preferred Interests by approximately $21,375 to approximately $104,525 and extended the reinvestment period end date and maturity date applicable to the 2015-1 Issuer to October 15, 2023 and October 15, 2031, respectively. The 2015-1R Notes consist of:

(a) $234,800 AAA Class A-1-1-R Notes, which bear interest at the three-month LIBOR plus 1.55%;

(b) $50,000 AAA Class A-1-2-R Notes, which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter;

(d) $66,000 Class A-2-R Notes, which bear interest at the three-month LIBOR plus 2.20%;

(e) $46,400 single-A Class B Notes which bear interest at the three-month LIBOR plus 3.15%; and

(f) $27,000 BBB- Class C Notes, which bear interest at the three-month LIBOR plus 4.00%.

Following the 2015-1 Debt Securitization Refinancing, the Company retained the 2015-1 Issuer Preferred Interests. The 2015-1R Notes in the 2015-1 Debt Securitization Refinancing were issued by the 2015-1 Issuer and are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans.

Effective June 30, 2023, the 2015-1R Notes were amended to transition the benchmark rate to the Term SOFR Rate plus a Term SOFR adjustment. The amendment is effective at the commencement of the next succeeding interest accrual period following the date of the amendment.

The Company contributed the loans that comprised the initial closing date loan portfolio (including the loans distributed to the Company from the SPV) to the 2015-1 Issuer pursuant to a contribution agreement. Future loan transfers from the Company to the 2015-1 Issuer will be made pursuant to a sale agreement and are subject to the approval of the Company’s Board of Directors. Assets of the 2015-1 Issuer are not available to the creditors of the SPV or the Company. In connection with the issuance and sale of the 2015-1R Notes, the Company made customary representations, warranties and covenants in the purchase agreement.

During the reinvestment period, pursuant to the indenture governing the 2015-1R Notes, all principal collections received on the underlying collateral may be used by the 2015-1 Issuer to purchase new collateral under the direction of Investment Adviser in its capacity as collateral manager under a collateral management agreement (“the Collateral Management Agreement”) of the 2015-1 Issuer and in accordance with the Company’s investment strategy.

Pursuant to the Collateral Management Agreement, the 2015-1 Issuer pays management fees (comprised of base management fees, subordinated management fees and incentive management fees) to the Investment Adviser for rendering collateral management services. As per the Collateral Management Agreement, for the period the Company retains all of the 2015-1 Issuer Preferred Interests, the Investment Adviser does not earn management fees for providing such collateral management services. The Company currently retains all of the 2015-1 Issuer Preferred Interests, thus the Investment Adviser did not earn any management fees from the 2015-1 Issuer for the three and six months ended June 30, 2023 and 2022. Any such waived fees may not be recaptured by the Investment Adviser.

Pursuant to an undertaking by the Company in connection with the 2015-1 Debt Securitization Refinancing, the Company has agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remain outstanding. As of June 30, 2023, the Company was in compliance with its undertaking.

As of June 30, 2023, the 2015-1R Notes were secured by 79 first lien and second lien senior secured loans with a total fair value of approximately $548,838 and cash of $16,382. The pool of loans in the securitization must meet certain requirements, including asset mix and concentration, term, agency rating, collateral coverage, minimum coupon, minimum spread and sector diversity requirements in the indenture governing the 2015-1R Notes.

The carrying value of the 2015-1R Notes as of June 30, 2023 and December 31, 2022 is $447,152 and $447,029, respectively. The carrying value is presented net of unamortized debt issuance costs of $2,048 and $2,171 as of June 30, 2023 and December 31, 2022, respectively.

For the six months ended June 30, 2023 and 2022, the effective annualized weighted average interest rates, which include amortization of debt issuance costs on the 2015-1R Notes, were 6.85% and 2.73%, respectively, based on floating LIBOR rates. As of June 30, 2023 and December 31, 2022 the weighted average interest rates were 7.12% and 6.00% respectively, based on floating LIBOR rates.

For the three and six months ended June 30, 2023 and 2022, the components of interest expense on the 2015-1R Notes were as follows:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Interest expense	$	7,986	$	3,418	$	15,341	$	6,037
Amortization of deferred financing costs and debt issuance costs	62		61		124		123
Total interest expense and credit facility fees	$	8,048	$	3,479	$	15,465	$	6,160
Cash paid for interest expense	$	7,498	$	2,592	$	14,384	$	5,265

As of June 30, 2023 and December 31, 2022, $6,577 and $5,618, respectively, of interest expense was included in interest and credit facility fees payable.

8. COMMITMENTS AND CONTINGENCIES

A summary of significant contractual payment obligations was as follows as of June 30, 2023 and December 31, 2022:


Payment Due by Period	June 30, 2023		December 31, 2022
Less than one year	$	—	$	—
1-3 years	190,000		190,000
3-5 years	400,241		440,441
More than 5 years	449,200		449,200
Total	$	1,039,441	$	1,079,641

In the ordinary course of its business, the Company enters into contracts or agreements that contain indemnification or warranties. Future events could occur that lead to the execution of these provisions against the Company. The Company believes that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in the consolidated financial statements as of June 30, 2023 and December 31, 2022 for any such exposure.

The Company has in the past, currently is and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments. The Company had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:


	Par / Principal Amount as of
	June 30, 2023		December 31, 2022
Unfunded delayed draw commitments	$	79,211	$	83,743
Unfunded revolving loan commitments	71,213		74,463
Total unfunded commitments	$	150,424	$	158,206

9. NET ASSETS

The Company has the authority to issue 198,000,000 shares of common stock, par value $0.01 per share, and 2,000,000 shares of preferred stock, par value $0.01 per share.

Cumulative Convertible Preferred Stock

On May 5, 2020, the Company issued and sold 2,000,000 shares of Preferred Stock to an affiliate of Carlyle in a private placement at a price of $25 per share. The Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference”) plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at the Company’s option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock. After May 5, 2027, the dividend rate will increase annually, in each case by 1.00% per annum.

The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's articles supplementary (the “Articles Supplementary”) that establishes the terms of the Preferred Stock. The conversion price as of June 30, 2023 was $9.20. Effective as of May 5, 2023, the Company, with the approval of the Board of Directors, including a majority of the Independent Directors, has the option to redeem all of the Preferred Stock for cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends. The holders of the Preferred Stock have the right to convert all or a portion of their shares of Preferred Stock prior to the date fixed for such redemption. Effective as of May 5, 2027, the holders of the Preferred Stock have the option to require the Company to redeem any or all of the then-outstanding Preferred Stock upon 90 days’ notice. The form of consideration used in any such redemption is at the option of the Board of Directors, including a majority of the Independent Directors, and may be cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends, or shares of common stock. Holders also have the right to redeem the Preferred Stock upon a Change in Control (as defined in the Articles Supplementary).

The following table summarizes the Company’s dividends declared on the Preferred Stock during the two most recent fiscal years and the current fiscal year to-date. Unless otherwise noted, dividends were declared and paid, or are payable, in cash.


Date Declared	Record Date	Payment Date	Per Share Amount
2021
March 31, 2021	March 31, 2021	March 31, 2021	$	0.438
June 30, 2021	June 30, 2021	June 30, 2021	$	0.438
September 30, 2021	September 30, 2021	September 30, 2021	$	0.438
December 29, 2021	December 31, 2021	December 31, 2021	$	0.438
Total			$	1.752
2022
March 25, 2022	March 31, 2022	March 31, 2022	$	0.438
June 27, 2022	June 30, 2022	June 30, 2022	$	0.438
September 22, 2022	September 30, 2022	September 30, 2022	$	0.438
December 16, 2022	December 30, 2022	December 30, 2022	$	0.438
Total			$	1.752
2023
March 23, 2023	March 31, 2023	March 31, 2023	$	0.438
June 27, 2023	June 30, 2023	June 30, 2023	$	0.438
Total			$	0.876

Company Stock Repurchase Program

On August 1, 2022, the Company's Board of Directors approved the continuation of the Company's stock repurchase program (the “Company Stock Repurchase Program”) until November 5, 2023, or until the approved dollar amount has been used to repurchase shares of common stock, and increased the size of the Company Stock Repurchase Program by $50 million to an aggregate amount of $200 million. This program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018. Since the inception of the Company Stock Repurchase Program through June 30, 2023, the Company has repurchased 11,773,718 shares of the Company's common stock at an average cost of $13.40 per share, or $157,737 in the aggregate, resulting in accretion to net assets per share of $0.65.

Changes in Net Assets

For the three months ended June 30, 2023, the Company did not repurchase and extinguish shares. For the six months ended June 30, 2023, the Company repurchased and extinguished 265,195 shares for $3,993. The following tables summarize capital activity for the three and six months ended June 30, 2023:


	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, April 1, 2023	2,000,000	$	50,000	50,794,941	$	508	$	1,018,234	$	(1,633)	$	46,443	$	(142,429)	$	(52,930)	$	918,193
Repurchase of common stock	—	—		—	—		—		—		—		—		—		—

Net investment income (loss)	—	—		—	—		—		—		27,175		—		—		27,175
Net realized gain (loss)	—	—		—	—		—		—		—		(7,946)		—		(7,946)
Net change in unrealized appreciation (depreciation)	—	—		—	—		—		—		—		—		(14,516)		(14,516)
Dividends declared on common stock and preferred stock	—	—		—	—		—		—		(23,225)		—		—		(23,225)

Balance, June 30, 2023	2,000,000	$	50,000	50,794,941	$	508	$	1,018,234	$	(1,633)	$	50,393	$	(150,375)	$	(67,446)	$	899,681



	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, January 1, 2023	2,000,000	$	50,000	51,060,136	$	511	$	1,022,224	$	(1,633)	$	43,097	$	(129,061)	$	(67,715)	$	917,423
Repurchase of common stock	—	—		(265,195)	(3)		(3,990)		—		—		—		—		(3,993)

Net investment income (loss)	—	—		—	—		—		—		53,745		—		—		53,745
Net realized gain (loss)	—	—		—	—		—		—		—		(21,314)		—		(21,314)
Net change in unrealized appreciation (depreciation)	—	—		—	—		—		—		—		—		269		269
Dividends declared on common stock and preferred stock	—	—		—	—		—		—		(46,449)		—		—		(46,449)
Balance, June 30, 2023	2,000,000	$	50,000	50,794,941	$	508	$	1,018,234	$	(1,633)	$	50,393	$	(150,375)	$	(67,446)	$	899,681

For the three and six months ended June 30, 2022, the Company repurchased and extinguished 498,947 and 994,243 shares, respectively, for $6,968 and $13,976, respectively. The following tables summarize capital activity for the three and six months ended June 30, 2022:


	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, April 1, 2022	2,000,000	$	50,000	52,647,158	$	527	$	1,045,424	$	(1,633)	$	23,142	$	(117,826)	$	(49,094)	$	950,540
Repurchase of common stock	—	—		(498,947)	(6)		(6,962)		—		—		—		—		(6,968)


Net investment income (loss)	—	—		—	—		—		—		21,870		—		—		21,870
Net realized gain (loss)	—	—		—	—		—		—		—		15		—		15
Net change in unrealized appreciation (depreciation)	—	—		—	—		—		—		—		—		(17,220)		(17,220)
Dividends declared on common stock and preferred stock	—	—		—	—		—		—		(21,744)		—		—		(21,744)

Balance, June 30, 2022	2,000,000	$	50,000	52,148,211	$	521	$	1,038,462	$	(1,633)	$	23,268	$	(117,811)	$	(66,314)	$	926,493



	Preferred Stock			Common Stock			Capital in Excess of Par Value		Offering Costs		Accumulated Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)		Accumulated Net Unrealized Appreciation (Depreciation)		Total Net Assets
	Shares	Amount		Shares	Amount
Balance, January 1, 2022	2,000,000	$	50,000	53,142,454	$	532	$	1,052,427	$	(1,633)	$	19,562	$	(123,297)	$	(48,787)	$	948,804
Repurchase of common stock	—	—		(994,243)	(11)		(13,965)		—		—		—		—		(13,976)


Net investment income (loss)	—	—		—	—		—		—		47,389		—		—		47,389
Net realized gain (loss)	—	—		—	—		—		—		—		5,486		—		5,486
Net change in unrealized appreciation (depreciation)	—	—		—	—		—		—		—		—		(17,527)		(17,527)
Dividends declared	—	—		—	—		—		—		(43,683)		—		—		(43,683)

Balance, June 30, 2022	2,000,000	$	50,000	52,148,211	$	521	$	1,038,462	$	(1,633)	$	23,268	$	(117,811)	$	(66,314)	$	926,493

Earnings Per Share

The Company calculates earnings per share in accordance with ASC 260. Basic earnings per share is calculated by dividing the net increase (decrease) in net assets resulting from operations, less preferred dividends, by the weighted average number of common shares outstanding. Diluted earnings per share gives effect to all dilutive potential common shares outstanding using the if-converted method for the convertible Preferred Stock. Diluted earnings per share excludes all dilutive potential common shares if their effect is anti-dilutive. Basic and diluted earnings per common share were as follows:


	Three months ended June 30,
	2023				2022
	Basic		Diluted(1)		Basic		Diluted(1)
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders	$	3,838	$	3,838	$	3,790	$	3,790
Weighted-average common shares outstanding	50,794,941		50,794,941		52,421,296		52,421,296
Basic and diluted earnings per share	$	0.08	$	0.08	$	0.07	$	0.07

(1)Diluted earnings per share were anti-dilutive for the period presented.


	Six months ended June 30,
	2023				2022
	Basic		Diluted		Basic		Diluted
Net increase (decrease) in net assets resulting from operations attributable to Common Stockholders	$	30,950	$	32,700	$	33,598	$	35,348
Weighted-average common shares outstanding	50,840,753		56,273,633		52,655,375		57,974,987
Basic and diluted earnings per share	$	0.61	$	0.58	$	0.64	$	0.61

The following table summarizes our updates to our dividend policy. Our dividend policy is subject to change by the Board of Directors in its sole discretion at any time.


Record Date	Base Dividend Per Share
September 30, 2020	$	0.32
September 30, 2022	$	0.34
December 30, 2022	$	0.36
March 31, 2023	$	0.37

The following table summarizes the Company’s dividends declared on its common stock during the two most recent fiscal years and the current fiscal year to-date:


Date Declared	Record Date	Payment Date	Per Common Share Amount






















February 22, 2021	March 31, 2021	April 16, 2021	$	0.32
February 22, 2021	March 31, 2021	April 16, 2021	$	0.05	(1)
May 3, 2021	June 30, 2021	July 15, 2021	$	0.32
May 3, 2021	June 30, 2021	July 15, 2021	$	0.04	(1)
August 2, 2021	September 30, 2021	October 15, 2021	$	0.32
August 2, 2021	September 30, 2021	October 15, 2021	$	0.06	(1)
November 1, 2021	December 31, 2021	January 14, 2022	$	0.32
November 1, 2021	December 31, 2021	January 14, 2022	$	0.07	(1)
February 18, 2022	March 31, 2022	April 15, 2022	$	0.32
February 18, 2022	March 31, 2022	April 15, 2022	$	0.08	(1)
May 2, 2022	June 30, 2022	July 15, 2022	$	0.32
May 2, 2022	June 30, 2022	July 15, 2022	$	0.08	(1)
August 8, 2022	September 30, 2022	October 14, 2022	$	0.34
August 8, 2022	September 30, 2022	October 14, 2022	$	0.06	(1)
October 31, 2022	December 30, 2022	January 16, 2023	$	0.36
October 31, 2022	December 30, 2022	January 16, 2023	$	0.08	(1)
February 21, 2023	March 31, 2023	April 14, 2023	$	0.37
February 21, 2023	March 31, 2023	April 14, 2023	$	0.07	(1)
May 4, 2023	June 30, 2023	July 18, 2023	$	0.37
May 4, 2023	June 30, 2023	July 18, 2023	$	0.07	(1)

(1)Represents a special/supplemental dividend.

10. CONSOLIDATED FINANCIAL HIGHLIGHTS

The following is a schedule of consolidated financial highlights for the six months ended June 30, 2023 and 2022:


	Six months ended June 30,
	2023			2022
Per Common Share Data:
Net asset value per common share, beginning of period	$	16.99		$	16.91
Net investment income (loss)(1)	1.02			0.87
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments and non-investment assets and liabilities	(0.41)			(0.23)
Net increase (decrease) in net assets resulting from operations	0.61			0.64
Dividends declared(2)	(0.88)			(0.80)

Accretion due to share repurchases	0.01			0.06
Net asset value per common share, end of period	$	16.73		$	16.81
Market price per common share, end of period	$	14.56		$	12.70

Number of common shares outstanding, end of period	50,794,941			52,148,211
Total return based on net asset value(3)	4.60		%	4.14		%
Total return based on market price(4)	8.08		%	(1.68)		%
Net assets attributable to Common Stockholders, end of period	$	849,681		$	876,493
Ratio to average net assets attributable to Common Stockholders(5):
Expenses before incentive fees	6.22		%	3.92		%
Expenses after incentive fees	7.51		%	5.01		%
Net investment income (loss)	6.24		%	5.31		%
Interest expense and credit facility fees	4.08		%	1.88		%
Ratios/Supplemental Data:
Asset coverage, end of period	177.99		%	177.39		%
Portfolio turnover	5.38		%	16.20		%
Weighted-average shares outstanding	50,840,753			52,655,375

(1)Net investment income (loss) per common share was calculated as net investment income (loss) less the preferred dividend for the period divided by the weighted average number of common shares outstanding for the period.

(2)Dividends declared per common share was calculated as the sum of dividends on common stock declared during the period divided by the number of common shares outstanding at each respective quarter-end date (refer to Note 9, Net Assets).

(3)Total return based on net asset value (not annualized) is based on the change in net asset value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning net asset value for the period.

(4)Total return based on market value (not annualized) is calculated as the change in market value per common share during the period plus the declared dividends on common stock, assuming reinvestment of dividends in accordance with the dividend reinvestment plan, divided by the beginning market price for the period.

(5)These ratios to average net assets attributable to Common Stockholders have not been annualized.

11. LITIGATION

The Company may become party to certain lawsuits in the ordinary course of business. The Company does not believe that the outcome of current matters, if any, will materially impact the Company or its consolidated financial statements. As of June 30, 2023 and December 31, 2022, the Company was not subject to any material legal proceedings, nor, to the Company’s knowledge, is any material legal proceeding threatened against the Company.

In addition, portfolio investments of the Company could be the subject of litigation or regulatory investigations in the ordinary course of business. The Company does not believe that the outcome of any current contingent liabilities of its portfolio investments, if any, will materially affect the Company or these consolidated financial statements.

12. TAX

The Company has not recorded a liability for any uncertain tax positions pursuant to the provisions of ASC 740, Income Taxes, as of June 30, 2023 and December 31, 2022.

In the normal course of business, the Company is subject to examination by federal and certain state, local and foreign tax regulators. As of June 30, 2023 and December 31, 2022, the Company had filed tax returns and therefore is subject to examination.

The Company’s taxable income for each period is an estimate and will not be finally determined until the Company files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate. The estimated tax character of dividends declared on preferred stock and common stock for six months ended June 30, 2023 and 2022 was as follows:


	Six months ended June 30,
	2023		2022
Ordinary income	$	46,449	$	43,683
Tax return of capital	$	—	$	—

13. SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date the consolidated financial statements were issued. There have been no subsequent events that require recognition or disclosure through the date the consolidated financial statements were issued, except as disclosed below and elsewhere in the consolidated financial statements.

On August 3, 2023, the Board of Directors declared a base quarterly common dividend of $0.37 per share plus a supplemental common dividend of $0.07 per share, which are payable on October 17, 2023 to common stockholders of record on September 29, 2023.

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

(dollar amounts in thousands, except per share data, unless otherwise indicated)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

We have included or incorporated by reference in this Form 10-Q, and from time to time our management may make, “forward-looking statements”. These forward-looking statements are not historical facts, but instead relate to future events or the future performance or financial condition of Carlyle Secured Lending, Inc. (together with its consolidated subsidiaries, “we,” “us,” “our,” “CSL” or the “Company”). These statements are based on current expectations, estimates and projections about us, our current or prospective portfolio investments, our industry, our beliefs, and our assumptions. The forward-looking statements contained in this Form 10-Q involve a number of risks and uncertainties, including statements concerning:

•our, or our portfolio companies’, future business, operations, operating results or prospects, including our and their ability to achieve our respective objectives, including as a result of large scale global events such as the COVID-19 pandemic;

•the return or impact of current and future investments;

•the general economy and its impact on the industries in which we invest;

•the impact of any protracted decline in the liquidity of credit markets on our business;

•the impact of fluctuations in interest rates on our business, including from the discontinuation of LIBOR and the implementation of alternatives to LIBOR;

•the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

•the impact of supply chain constraints on our portfolio companies and the global economy;

•the current inflationary environment, and its impact on our portfolio companies and on the industries in which we invest;

•the impact on our business of changes in laws, policies or regulations (including the interpretation thereof) affecting our operations or the operations of our portfolio companies;

•our ability to recover unrealized losses;

•market conditions and our ability to access alternative debt markets and additional debt and equity capital

•our contractual arrangements and relationships with third parties;

•uncertainty surrounding the financial stability of the United States, Europe and China;

•uncertainty surrounding Russia’s military invasion of Ukraine and the impact of geopolitical tensions, such as between China and the United States;

•competition with other entities and our affiliates for investment opportunities;

•the speculative and illiquid nature of our investments;

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

•our expected financings and investments;

•the adequacy of our cash resources and working capital;

•the timing, form and amount of any dividend distributions;

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

•the ability to consummate acquisitions;

•the ability of Carlyle Global Credit Investment Management L.L.C., our investment adviser (the “Investment Adviser”), to locate suitable investments for us and to monitor and administer our investments;

•currency fluctuations and the adverse effect such fluctuations could have on the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;

•the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;

•the ability of The Carlyle Group Employee Co., L.L.C. to attract and retain highly talented professionals that can provide services to our Investment Adviser and Carlyle Global Credit Administration L.L.C. (the “Administrator”);

•our ability to maintain our status as a business development company (“BDC”); and

•our intent to satisfy the requirements of a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (together with the rules and regulations promulgated thereunder, the “Code”).

We use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” “plans,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” in Part II, Item 1A of our annual report on Form 10-K for the year ended December 31, 2022 (our “2022 Form 10-K”).

We have based the forward-looking statements included in this Form 10-Q on information available to us on the date of this Form 10-Q, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.

OVERVIEW

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1 of this Form 10-Q “Financial Statements.” This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in “Risk Factors” in Part I, Item 1A of our 2022 Form 10-K. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” in our 2022 Form 10-K and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-Q.

Carlyle Secured Lending, Inc., a Maryland corporation, is a specialty finance company that is a closed-end, externally managed, non-diversified management investment company. We have elected to be regulated as a BDC under the Investment Company Act and have operated our business as a BDC since we began our investment activities. For U.S. federal income tax purposes, we have elected to be treated as a RIC under Subchapter M of the Code. We were formed in February 2012, commenced investment operations in May 2013 and began trading on the Nasdaq Global Select Market, under the symbol “CGBD,” upon completion of our initial public offering in June 2017. Our principal executive offices are located at One Vanderbilt Avenue, Suite 3400, New York, New York 10017.

Our investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through assembling a portfolio of secured debt investments in U.S. middle market companies. Our core investment strategy focuses on lending to U.S. middle market companies, which we define as companies with approximately $25 million to $100 million of earnings before interest, taxes, depreciation and amortization (“EBITDA”), supported by financial sponsors. This core strategy is opportunistically supplemented with differentiated and complementary lending and investing strategies, which take advantage of the broad capabilities of Carlyle's Global Credit platform while offering risk-diversifying portfolio benefits. We seek to achieve our investment objective primarily through direct origination of secured debt instruments, including first lien senior secured loans (which may include stand-alone first lien loans, first lien/last out loans and “unitranche” loans) and second lien senior secured loans (collectively, “Middle Market Senior Loans”), with a minority of our assets invested in higher yielding investments (which may include unsecured debt, subordinated debt and investments in equities). The Middle Market Senior Loans are generally made to private U.S. middle market companies that are, in many cases, controlled by private equity firms.

We are externally managed by our Investment Adviser, an investment adviser registered under the Investment Advisers Act of 1940, as amended. Our Administrator provides the administrative services necessary for us to operate. Both our Investment Adviser and our Administrator are wholly owned subsidiaries of Carlyle Investment Management L.L.C., a subsidiary of Carlyle. The Investment Committee is responsible for reviewing and approving our investment opportunities. The members of the Investment Committee include several of the most senior credit professionals within the Global Credit segment, with backgrounds and expertise across multiple asset classes with significant industry experience and tenure. As of June 30, 2023, our Investment Adviser’s investment team included a team of 211 investment professionals across the Carlyle Global Credit segment. The Investment Committee has delegated approval of certain amendments, follow-on investments with existing borrowers, investments below certain size thresholds (existing or new platforms), and other matters as determined by the

Investment Committee to the Screening Committee. In addition, our Investment Adviser and its investment team are supported by a team of finance, operations and administrative professionals currently employed by Carlyle Employee Co., a wholly owned subsidiary of Carlyle. In conducting our investment activities, we believe that we benefit from the significant scale, relationships and resources of Carlyle, including our Investment Adviser and its affiliates.

KEY COMPONENTS OF OUR RESULTS OF OPERATIONS

Investments

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt available to middle market companies, the general economic environment and the competitive environment for the type of investments we make.

Revenue

We generate revenue primarily in the form of interest income on debt investments we hold. In addition, we generate income from dividends on direct equity investments, capital gains on the sales of loans and debt and equity securities and various loan origination and other fees. Our debt investments generally have a stated term of five to eight years and generally bear interest at a floating rate usually determined on the basis of a benchmark such as LIBOR or SOFR. Interest on these debt investments is generally paid quarterly. In some instances, we receive payments on our debt investments based on scheduled amortization of the outstanding balances. In addition, we receive repayments of some of our debt investments prior to their scheduled maturity date. The frequency or volume of these repayments fluctuates significantly from period to period. Our portfolio activity also reflects the proceeds of sales of securities. We may also generate revenue in the form of commitment, origination, amendment, structuring or due diligence fees, fees for providing managerial assistance and consulting fees.

Expenses

Our primary operating expenses include the payment of: (i) investment advisory fees, including base management fees and incentive fees, to our Investment Adviser pursuant to the investment advisory agreement between us and our Investment Adviser (as amended, the “Investment Advisory Agreement”); (ii) debt service and other costs of borrowings or other financing arrangements; (iii) costs and other expenses and our allocable portion of overhead incurred by our Administrator in performing its administrative obligations under the Administration Agreement between us and our Administrator; and (iv) other operating expenses summarized below:

•administration fees payable under our Administration Agreement and Sub-Administration Agreements, including related expenses;

•the costs of any offerings of our common stock and other securities, if any;

•calculating individual asset values and our net asset value (including the cost and expenses of any independent valuation firms);

•expenses, including travel expenses, incurred by our Investment Adviser, or members of our Investment Adviser team managing our investments, or payable to third parties, performing due diligence on prospective portfolio companies;

•the allocated costs incurred by our Investment Adviser in providing managerial assistance to those portfolio companies that request it;

•amounts payable to third parties relating to, or associated with, making or holding investments;

•the costs associated with subscriptions to data service, research-related subscriptions and expenses and quotation equipment and services used in making or holding investments;

•transfer agent and custodial fees;

•commissions and other compensation payable to brokers or dealers;

•U.S. federal, state and local taxes;

•independent director fees and expenses;

•costs of preparing financial statements and maintaining books and records, costs of preparing tax returns, costs of Sarbanes-Oxley Act compliance and attestation and costs of filing reports or other documents with the SEC (or other

regulatory bodies), and other reporting and compliance costs, including federal and state registration and any applicable listing fees;

•the costs of any reports, proxy statements or other notices to our stockholders and the costs of any stockholders’ meetings;

•the costs of specialty and custom software for monitoring risk, compliance and overall portfolio;

•fidelity bond, liability insurance, and any other insurance premiums;

•indemnification payments;

•direct fees and expenses associated with independent audits, agency, consulting and legal costs; and

•all other expenses incurred by us or our Administrator in connection with administering our business, including our allocable share of certain officers and their staff compensation.

We expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets during periods of asset growth and to increase during periods of asset decline.

PORTFOLIO AND INVESTMENT ACTIVITY

Below is a summary of certain characteristics of our investment portfolio as of June 30, 2023 and December 31, 2022.


	As of
	June 30, 2023		December 31, 2022

Number of investments	174		173
Number of portfolio companies / investment funds	130		134
Number of industries	26		28

Percentage of total investment fair value:


First lien debt	67.1	%	68.6	%
Second lien debt	14.0	%	13.3	%
Total secured debt	81.1	%	81.9	%
Investment Funds	13.5	%	13.3	%
Equity investments	5.4	%	4.8	%
Percentage of debt investment fair value:
Floating rate(1)	98.9	%	98.5	%
Fixed interest rate	1.1	%	1.5	%

(1)Primarily subject to interest rate floors.

Our investment activity for the three months ended June 30, 2023 and 2022 is presented below (information presented herein is at amortized cost unless otherwise indicated):


	Three months ended June 30,
	2023		2022
Investments:
Total investments, beginning of period	$	2,027,648	$	1,920,253
New investments purchased	47,963		196,031
Net accretion of discount on investments	1,929		2,761
Net realized gain (loss) on investments	(7,991)		54
Investments sold or repaid	(106,405)		(160,798)
Total Investments, end of period	$	1,963,144	$	1,958,301
Principal amount of investments funded:
First Lien Debt	$	44,511	$	198,625
Second Lien Debt	4,825		430
Equity Investments(1)	1,630		51

Total	$	50,966	$	199,106
Principal amount of investments sold or repaid:
First Lien Debt	$	(106,038)	$	(156,301)
Second Lien Debt	—		(5,000)
Equity Investments(1)	(1,495)		(51)

Total	$	(107,533)	$	(161,352)
Number of new funded debt investments(2)	2		11
Average amount of new funded debt investments	$	11,002	$	11,497

(1)Based on cost/proceeds of equity activity. The prior period has been conformed to the current presentation.

(2)For the three months ended June 30, 2023 and 2022, 100% of new funded debt investments were at floating interest rates.

As of June 30, 2023 and December 31, 2022, investments consisted of the following:


	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value


First Lien Debt	$	1,328,460	$	1,272,650	$	1,416,343	$	1,359,962
Second Lien Debt	269,185		265,536		271,266		262,703
Equity Investments	94,402		102,214		91,269		94,190
Investment Funds	271,097		256,020		271,097		263,022
Total	$	1,963,144	$	1,896,420	$	2,049,975	$	1,979,877

The weighted average yields(1) for our first lien debt, second lien debt and income producing investments, based on the amortized cost and fair value as of June 30, 2023 and December 31, 2022, were as follows:


	June 30, 2023				December 31, 2022
	Amortized Cost		Fair Value		Amortized Cost		Fair Value


First Lien Debt	12.4	%	12.8	%	11.5	%	11.9	%
Second Lien Debt	13.5	%	13.6	%	12.8		13.2
First and Second Lien Debt Total	12.6	%	12.9	%	11.7	%	12.1	%
Total Debt and Income Producing Investments(2)	12.6	%	12.9	%	11.8	%	12.2	%

(1)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2023 and December 31, 2022. Weighted average yield on debt and income producing investments at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount (“OID”) and market discount earned, divided by (b) total fair value included in such securities. Weighted average yield on debt and income producing investments at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID

and market discount earned, divided by (b) total amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above. Effective March 31, 2023, weighted average yields exclude investments placed on non-accrual status. Prior periods were conformed to the current presentation. Inclusive of all debt and income producing investments and investments on non-accrual status, the weighted average yield on amortized cost was 12.2% and 11.4% as of June 30, 2023 and December 31, 2022, respectively.

(2)Income Producing Investments include Credit Fund and Credit Fund II, as well as income producing equity investments.

Total weighted average yields (which includes the effect of accretion of discount and amortization of premiums) of our first lien debt, second lien debt and income producing investments as measured on an amortized cost basis increased from 11.8% to 12.6% from December 31, 2022 to June 30, 2023. The increase in weighted average yields was primarily due to the impact of rising benchmark interest rates.

As of June 30, 2023 and December 31, 2022, four and three of our debt investments, respectively, were on non-accrual status. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2023 and December 31, 2022. The following table summarizes the fair value of our performing and non-accrual/non-performing investments as of June 30, 2023 and December 31, 2022:


	June 30, 2023				December 31, 2022
	Fair Value		Percentage		Fair Value		Percentage
Performing	$	1,861,759	98.2	%	$	1,921,945	97.1	%
Non-accrual(1)	34,661		1.8		57,932		2.9
Total	$	1,896,420	100.0	%	$	1,979,877	100.0	%

(1)For information regarding our non-accrual policy, see Note 2, Significant Accounting Policies, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

See the Consolidated Schedules of Investments as of June 30, 2023 and December 31, 2022 in our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on these investments, including a list of companies and type and amount of investments.

As part of the monitoring process, our Investment Adviser has developed risk assessment policies pursuant to which it regularly assesses the risk profile of each of our debt investments and rates each of them based on the following categories, which we refer to as “Internal Risk Ratings”. Pursuant to these risk policies, an Internal Risk Rating of 1 – 5, which are defined below, is assigned to each debt investment in our portfolio. Key drivers of internal risk ratings include financial metrics, financial covenants, liquidity and enterprise value coverage.

Internal Risk Ratings Definitions


Rating						Definition
1						Borrower is operating above expectations, and the trends and risk factors are generally favorable.

2						Borrower is operating generally as expected or at an acceptable level of performance. The level of risk to our initial cost basis is similar to the risk to our initial cost basis at the time of origination. This is the initial risk rating assigned to all new borrowers.

3						Borrower is operating below expectations and level of risk to our cost basis has increased since the time of origination. The borrower may be out of compliance with debt covenants. Payments are generally current although there may be higher risk of payment default.

4						Borrower is operating materially below expectations and the loan’s risk has increased materially since origination. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due, but generally not by more than 120 days. It is anticipated that we may not recoup our initial cost basis and may realize a loss of our initial cost basis upon exit.

5						Borrower is operating substantially below expectations and the loan’s risk has increased substantially since origination. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. It is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit.

Our Investment Adviser monitors and, when appropriate, changes the risk ratings assigned to each debt investment in our portfolio. Our Investment Adviser reviews our investment ratings in connection with our quarterly valuation process. The below table summarizes the Internal Risk Ratings as of June 30, 2023 and December 31, 2022.


	June 30, 2023				December 31, 2022
	Fair Value		% of Fair Value		Fair Value		% of Fair Value
(dollar amounts in millions)
Internal Risk Rating 1	$	28.6	1.9	%	$	30.7	1.9	%
Internal Risk Rating 2	1,248.0		81.1		1,280.1		78.8
Internal Risk Rating 3	226.9		14.7		254.0		15.7
Internal Risk Rating 4	34.7		2.3		48.6		3.0
Internal Risk Rating 5	—		—		9.3		0.6
Total	$	1,538.2	100.0	%	$	1,622.7	100.0	%

As of both June 30, 2023 and December 31, 2022, the weighted average Internal Risk Rating of our debt investment portfolio was 2.2, respectively. As of June 30, 2023, four of our debt investments, with an aggregate fair value of $34.7 million were assigned an Internal Risk Rating of 4-5. As of December 31, 2022, three of our debt investments, with an aggregate fair value of $57.9 million were assigned an Internal Risk Rating of 4-5.

CONSOLIDATED RESULTS OF OPERATIONS

The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and losses and net change in unrealized appreciation and depreciation. As a result, quarterly comparisons may not be meaningful.

Net Investment Income

Net investment income (loss) for the three and six months ended June 30, 2023 and 2022 was as follows:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Total investment income	$	60,065	$	44,568	$	118,440	$	92,077
Total expenses (including Excise tax expense)	(32,890)		(22,698)		(64,695)		(44,688)
Net investment income (loss)	$	27,175	$	21,870	$	53,745	$	47,389

The increase in net investment income for the three and six months ended June 30, 2023 from the comparable periods in 2022 was primarily driven by the changes discussed below.

Investment Income

Investment income for the three and six months ended June 30, 2023 and 2022 was as follows:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Investment income
Interest income	$	46,154	$	31,682	$	91,102	$	65,710
PIK income	4,716		3,728		8,904		7,449
Dividend Income	8,276		7,524		16,552		15,048
Other income	919		1,634		1,882		3,870
Total investment income	$	60,065	$	44,568	$	118,440	$	92,077

The increase in investment income for the three and six months ended June 30, 2023 from the comparable periods in 2022 was primarily driven by an increase in interest income from higher weighted average interest rates, partially offset by a decrease in other income. As of June 30, 2023, the size of our portfolio increased to $1,963,144 from $1,958,301 as of June 30,

2022, at amortized cost. As of June 30, 2023, the weighted average yield of our first and second lien debt investments increased to 12.6% from 8.8% as of June 30, 2022 on amortized cost.

Interest and PIK income on our first and second lien debt investments is dependent on the composition and credit quality of the portfolio. Generally, we expect the portfolio to generate predictable quarterly interest income based on the terms stated in each loan’s credit agreement. As of June 30, 2023 and 2022, four and three of our debt investments, respectively, were on non-accrual status. Non-accrual investments had a fair value of $34,661 and $75,819, respectively, which represented approximately 1.8% and 4.0% of total investments at fair value, respectively, as of June 30, 2023 and 2022. The remaining first and second lien debt investments were performing and current on their interest payments as of June 30, 2023 and 2022.

The decrease in other income for the three and six months ended June 30, 2023 from the comparable periods in 2022 was primarily driven by lower amendment and prepayment fees.

The increase in dividend income for the three and six months ended June 30, 2023 from the comparable periods in 2022 was primarily driven by an increase in dividends declared by the investment funds as a result of higher net investment income each investment fund earned.

Expenses

Expenses for the three and six months ended June 30, 2023 and 2022 comprised the following:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Base management fees	$	7,185	$	7,113	$	14,421	$	14,163
Incentive fees	5,593		4,458		11,065		9,686
Professional fees	523		752		1,212		1,535
Administrative service fees	469		461		497		867
Interest expense and credit facility fees	17,873		9,170		35,154		16,786
Directors’ fees and expenses	107		186		230		346
Other general and administrative	490		382		943		776
Excise tax expense	650		176		1,173		529
Total expenses (including Excise tax expense)	$	32,890	$	22,698	$	64,695	$	44,688

Below is a summary of the base management fees and incentive fees incurred during the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Base management fees	$	7,185	$	7,113	$	14,421	$	14,163
Incentive fees on pre-incentive fee net investment income	5,593		4,458		11,065		9,686




Total base management fees and incentive fees	$	12,778	$	11,571	$	25,486	$	23,849

The increase in incentive fees related to pre-incentive fee net investment income for the three and six months ended June 30, 2023 from the comparable periods in 2022 was driven by higher pre-incentive fee net investment income. Base management fees for the three and six months ended June 30, 2023 remained consistent with the comparable periods in 2022.

For the three and six months ended June 30, 2023 and 2022, there were no accrued capital gains incentive fees based upon the cumulative net realized and unrealized appreciation (depreciation) as of June 30, 2023 and 2022. The accrual for any capital gains incentive fee under accounting principles generally accepted in the United States (“U.S. GAAP”) in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. See Note 4, Related Party Transactions, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on the incentive and base management fees.

Interest expense and credit facility fees for the three and six months ended June 30, 2023 and 2022 comprised the following:


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Interest expense	$	17,339		$	8,582		$	34,119		$	15,681
Facility unused commitment fee	257			297			487			630
Amortization of deferred financing costs and debt issuance costs	277			291			548			475

Total interest expense and credit facility fees	$	17,873		$	9,170		$	35,154		$	16,786
Cash paid for interest expense and credit facility fees	17,242			8,052			$	33,954		$	15,442

Average principal debt outstanding	$	1,051,132		$	1,022,963		$	1,071,253		$	1,005,405
Weighted average interest rate	6.53		%	3.32		%	6.34		%	3.08		%

The increase in interest expense and credit facility fees for the three and six months ended June 30, 2023 compared to the comparable periods in 2022 was primarily driven by higher weighted average interest rates due to higher benchmark rates.

Professional fees include legal, rating agencies, audit, tax, valuation, technology and other professional fees incurred related to the management of the Company. Administrative service fees represent fees paid to the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including our allocable portion of the cost of certain of our executive officers and their respective staff. Other general and administrative expenses include insurance, filing, research, subscriptions and other costs.

Net Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation)

During the three months ended June 30, 2023, we had realized gains on 5 investments, totaling approximately $1,209, which was offset by realized losses on 7 investments, totaling approximately $9,200. During the three months ended June 30, 2022, we had realized gains on 4 investments, totaling approximately $1,515, partially offset by realized losses on 7 investments totaling $1,461. During the six months ended June 30, 2023, we had realized gains on 9 investments, totaling approximately $1,447, which was offset by realized losses on 12 investments, totaling approximately $22,753. During the six months ended June 30, 2022, we had realized gains on 11 investments, totaling approximately $7,354 and realized losses on 7 investments, totaling approximately $1,461.

During the three months ended June 30, 2023, we had a change in unrealized appreciation on 97 investments, totaling approximately $23,819, which was offset by a change in unrealized depreciation on 69 investments, totaling approximately $36,460. During the three months ended June 30, 2022, we had a change in unrealized appreciation on 28 investments, totaling approximately $13,158, which was offset by a change in unrealized depreciation on 124 investments, totaling approximately $35,110. During the six months ended June 30, 2023, we had unrealized appreciation on 110 investments, totaling approximately $54,686, which was offset by a change in unrealized depreciation on 66 investments, totaling approximately $51,312. During the six months ended June 30, 2022, we had unrealized appreciation on 37 investments, totaling approximately $25,628, which was offset by a change in unrealized depreciation on 135 investments, totaling approximately $50,152.

Net realized gain (loss) and net change in unrealized appreciation (depreciation) for the three and six months ended June 30, 2023 and 2022 were as follows:


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Net realized gain (loss) on investments	$	(7,991)	$	54	$	(21,306)	$	5,893
Net change in unrealized appreciation (depreciation) on investments(1)	(12,641)		(21,952)		3,374		(24,524)
Net realized gain (loss) and net change in unrealized appreciation (depreciation) on investments	$	(20,632)	$	(21,898)	$	(17,932)	$	(18,631)
Net realized currency gain (loss) on non-investment assets and liabilities	45		(39)		(8)		(407)
Net change in unrealized currency gains (losses) on non-investment assets and liabilities	(1,875)		4,732		(3,105)		6,997
Net realized and unrealized gains (losses)	$	(22,462)	$	(17,205)	$	(21,045)	$	(12,041)

(1)For the three and six months ended June 30, 2023, net change in unrealized appreciation (depreciation) on investments included $1,839 and $3,142 related to currency gains (losses), respectively. For the three and six months ended June 30, 2022, net change in unrealized appreciation (depreciation) on investments included $(5,370) and $(7,169) related to currency gains (losses), respectively

Net realized gain (loss) and net change in unrealized appreciation (depreciation) by the type of investments for the three and six months ended June 30, 2023 and 2022 were as follows:


	Three months ended June 30,								Six months ended June 30,
	2023				2022				2023				2022
Type	Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)		Net realized gain (loss)		Net change in unrealized appreciation (depreciation)
First Lien Debt	$	(9,180)	$	(7,912)	$	(504)	$	(7,336)	$	(22,609)	$	571	$	2,951	$	(13,827)
Second Lien Debt	1		1,814		(956)		(9,163)		(48)		4,914		(956)		(11,221)
Equity Investments	1,188		(1,408)		1,514		(1,969)		1,351		4,891		3,898		(55)
Investment Funds	—		(5,135)		—		(3,487)		—		(7,002)		—		579
Total	$	(7,991)	$	(12,641)	$	54	$	(21,955)	$	(21,306)	$	3,374	$	5,893	$	(24,524)

The net realized loss in our investments for the three and six months ended June 30, 2023 was primarily driven by the exit of our investment in DermaRite and the restructuring of PPT Management Holdings. Net change in unrealized appreciation (depreciation) in our investments for the three and six months ended June 30, 2023 was primarily driven by the performance of our investment in American Physician Partners offset by the reversal of prior period unrealized losses on our investment in DermaRite and Bayside OPCP (formerly PPT Management). Net change in unrealized appreciation (depreciation) is also driven by changes in other inputs utilized under our valuation methodology, including, but not limited to, enterprise value multiples, borrower leverage multiples and borrower ratings, and the impact of exits.

Middle Market Credit Fund, LLC (“Credit Fund”)

On February 29, 2016, we and Credit Partners entered into an amended and restated limited liability company agreement, which was subsequently amended and restated on June 24, 2016 and February 22, 2021, May 16, 2022 and April 20, 2023 (as amended, the “Limited Liability Company Agreement”) to co-manage Credit Fund, a Delaware limited liability company that is not consolidated in our consolidated financial statements. Credit Fund is managed by a six-member board of managers, on which we and Credit Partners each have equal representation. We and Credit Partners each have 50% economic ownership of Credit Fund and have commitments to fund, from time to time, capital of up to $250,000 each. Funding of such commitments generally requires the approval of the board of Credit Fund, including the board members appointed by us. By virtue of our respective membership interests, we and Credit Partners each indirectly bear an allocable share of all expenses and other obligations of Credit Fund.

Credit Fund primarily invests in first lien loans of middle market companies sourced primarily by us and our affiliates. Portfolio and investment decisions with respect to Credit Fund must be unanimously approved by a quorum of Credit Fund’s investment committee consisting of an equal number of representatives of us and Credit Partners. Therefore, although we own more than 25% of the voting securities of Credit Fund, we do not believe that we have control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund SPV, LLC (“Credit Fund Sub”), MMCF CLO 2017-1 LLC (the “2017-1 Issuer") and MMCF Warehouse II, LLC (“Credit Fund Warehouse II”), each a Delaware limited liability company are wholly owned subsidiaries of Credit Fund and are consolidated in Credit Fund’s consolidated financial statements.

Since inception of Credit Fund and through June 30, 2023 and December 31, 2022, we and Credit Partners each made capital contributions of $1 and $1 in members’ equity, respectively, and $216,000 and $216,000 in subordinated loans, respectively, to Credit Fund. On May 25, 2021, the Company and Credit Partners received an aggregate return of capital on the subordinated loans of $46,000, of which the Company received $23,000. The cost and fair value of our investment in Credit Fund was $193,001 and $189,101, respectively, as of June 30, 2023 and $193,001 and $190,065, respectively, as of December 31, 2022.

Our portion of the dividend declared by Credit Fund was $5,500 and $5,000 for the three months ended June 30, 2023 and 2022, respectively. Our portion of the dividend declared by Credit Fund was 11,000 and $10,000 for the six months ended June 30, 2023 and 2022, respectively. As of both June 30, 2023 and December 31, 2022, our annualized dividend yield from Credit Fund was 11.4%.

Below is a summary of Credit Fund’s portfolio as of June 30, 2023 and December 31, 2022:


	As of
	June 30, 2023			December 31, 2022
Senior secured loans(1)	$	860,168		$	955,605
Weighted average yields of senior secured loans based on amortized cost(2)	10.9		%	10.0		%
Weighted average yields of senior secured loans based on fair value(2)	11.5		%	10.5		%
Number of portfolio companies in Credit Fund	41			45
Average amount per portfolio company(1)	$	20,980		$	21,236
Number of loans on non-accrual status	2			—
Fair value of loans on non-accrual status	$	5,566		$	—
Percentage of portfolio at floating interest rates(3)(4)	100.0		%	100.0		%

Fair value of loans with PIK provisions	$	34,774		$	49,950
Percentage of portfolio with PIK provisions(4)	4.4		%	5.5		%

(1)At par/principal amount.

(2)Weighted average yields include the effect of accretion of discounts and amortization of premiums and are based on interest rates as of June 30, 2023 and December 31, 2022. Weighted average yield on debt at fair value is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount (“OID”) and market discount earned, divided by (b) total fair value included in such securities. Weighted average yield on debt at amortized cost is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of OID and market discount earned, divided by (b) total amortized cost included in such securities. Actual yields earned over the life of each investment could differ materially from the yields presented above. Effective March 31, 2023, weighted average yields exclude investments placed on non-accrual status. Prior periods were conformed to the current presentation.

(3)Floating rate debt investments are generally subject to interest rate floors.

(4)Percentages based on fair value.

For both the three and six months ended June 30, 2023, the Company sold 3 investments to Credit Fund for proceeds of $18,237 and realized a loss of $94. For both the three and six months ended June 30, 2022, the Company sold three investments to Credit Fund for proceeds of $53,520 and realized a loss of $73. See Note 5, Middle Market Credit Fund, LLC, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Middle Market Credit Fund II, LLC (“Credit Fund II”)

On November 3, 2020, we and Cliffwater Corporate Lending Fund (“CCLF”) entered into a limited liability company agreement to co-manage Credit Fund II, a Delaware limited liability company that is not consolidated in our consolidated financial statements. Credit Fund II is managed by a four-member board, on which we and CCLF have equal representation. We and CCLF have 84.13% and 15.87% economic ownership of Credit Fund II, respectively. By virtue of our respective membership interests, we and CCLF each indirectly bear an allocable share of all expenses and other obligations of Credit Fund II.

Credit Fund II primarily invests in senior secured loans of middle market companies. Credit Fund II's initial portfolio was funded in November 2020 with existing senior secured debt investments contributed by us and as part of the transaction, we determined that the contribution met the requirements under ASC 860, Transfers and Servicing. Credit Fund II is expected to make only limited new investments in senior secured loans of middle market companies. Portfolio and investment decisions with respect to Credit Fund II must be unanimously approved by a quorum of Credit Fund II’s board members consisting of at least one of our representatives and one of CCLF's representatives. Therefore, although we own more than 25% of the voting securities of Credit Fund II, we do not believe that we have control over Credit Fund (other than for purposes of the Investment Company Act). Middle Market Credit Fund II SPV, LLC (“Credit Fund II Sub”), a Delaware limited liability company, is a wholly owned subsidiary of Credit Fund II and is consolidated in Credit Fund II’s consolidated financial statements.

Since inception of Credit Fund II and through June 30, 2023, we and CCLF made capital contributions of $78,096 and $12,709 in members’ equity, respectively, to Credit Fund II. The cost and fair value of our investment in Credit Fund II was $78,096 and $66,919, respectively, as of June 30, 2023 and $78,096 and $72,957, respectively, as of December 31, 2022.

Our portion of the dividend declared by Credit Fund II was 2,776 and 2,524 for the three months ended June 30, 2023 and 2022, respectively. Our portion of the dividend declared by Credit Fund II was 5,552 and 5,048 for the six months ended June 30, 2023 and 2022, respectively. As of both June 30, 2023 and December 31, 2022, our annualized dividend yield from Credit Fund II was 14.2%.

Below is a summary of Credit Fund II’s portfolio as of June 30, 2023 and December 31, 2022:


	As of
	June 30, 2023			December 31, 2022
Senior secured loans(1)	$	244,773		$	253,310
Weighted average yields of senior secured loans based on amortized cost(2)	11.8		%	11.1		%
Weighted average yields of senior secured loans based on fair value(2)	12.0		%	11.3		%
Number of portfolio companies in Credit Fund II	33			35
Average amount per portfolio company(1)	$	7,417		$	7,237
Number of loans on non-accrual status	1			—
Fair value of loans on non-accrual status	$	—		$	—
Percentage of portfolio at floating interest rates(3)(4)	97.9		%	97.9		%
Percentage of portfolio at fixed interest rates(4)	2.1		%	2.1		%
Fair value of loans with PIK provisions	$	2,811		$	10,787
Percentage of portfolio with PIK provisions(4)	1.2		%	4.4		%

(1)At par/principal amount.

(3)Floating rate debt investments are generally subject to interest rate floors.

(4)Percentages based on fair value.

For the three and six months ended June 30, 2023, the Company sold 4 and 5 investments, respectively, to Credit Fund II for proceeds of $10,749 and $20,589, respectively, and realized losses of $183 and $173, respectively. For both the three and six months ended June 30, 2022, the Company sold four investments to Credit Fund II for proceeds of $31,793 and a realized loss of $421. See Note 6, Middle Market Credit Fund II, LLC, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We generate cash from the net proceeds of offerings of our common stock and through cash flows from operations, including investment sales and repayments as well as income earned on investments and cash equivalents. We may also fund a portion of our investments through borrowings under the Credit Facility, as defined below, the issuance of debt, and through securitization of a portion of our existing investments. The primary use of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders and for other general corporate purposes. We believe our current cash position, available capacity on our revolving credit facilities – which is well in excess of our unfunded commitments – and net cash provided by operating activities will provide us with sufficient resources to meet our obligations and continue to support our investment objectives, including reserving for the capital needs which may arise at our portfolio companies.

Credit Facility, Senior Notes, and 2015-1R Notes

On March 21, 2014, we closed on a senior secured revolving credit facility (the “Credit Facility”), as amended from time to time. The maximum principal amount of the Credit Facility is $745,000, which was increased from $688,000 on April 21, 2023 pursuant to the terms of the agreement, subject to availability under the Credit Facility, which is based on certain advance rates multiplied by the value of the Company’s portfolio investments (subject to certain concentration limitations) net of certain other indebtedness that the Company may incur in accordance with the terms of the Credit Facility. Proceeds of the Credit Facility may be used for general corporate purposes, including the funding of portfolio investments. Maximum capacity under the Credit Facility may be increased, subject to certain conditions, to $900,000 through the exercise by the Company of an uncommitted accordion feature through which existing and new lenders may, at their option, agree to provide additional financing. The Credit Facility includes a $50,000 limit for swingline loans and a $20,000 limit for letters of credit. Subject to certain exceptions, the Credit Facility is secured by a first lien security interest in substantially all of the portfolio investments

held by the Company. The Credit Facility includes customary covenants, including certain financial covenants related to asset coverage, shareholders’ equity and liquidity, certain limitations on the incurrence of additional indebtedness and liens, and other maintenance covenants, as well as usual and customary events of default for senior secured revolving credit facilities of this nature.

On December 30, 2019, we closed a private offering of $115.0 million in aggregate principal amount of 4.75% Senior Unsecured Notes due December 31, 2024 (the “2019 Notes”). On December 11, 2020, we issued an additional $75.0 million aggregate principal amount of senior unsecured notes due December 31, 2024 (the “2020 Notes”, together with the 2019 Notes, the “Senior Notes”). The 2020 Notes bear interest at an interest rate of 4.50%. We paid an affiliate of Carlyle a fee of $562 for underwriting services rendered in connection with the issuance of the 2020 Notes in the amount of 0.75% of the aggregate principal amount of the 2020 Notes. The interest rates of the Senior Notes are subject to increase (up to an additional 1.00% over the stated rate of such notes) in the event, subject to certain exceptions, the Senior Notes cease to have an investment grade rating. The Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company. For more information on the Senior Notes, see Note 7, Borrowings, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

On June 26, 2015, we completed the 2015-1 Debt Securitization, which was refinanced on August 30, 2018 (the “2015-1 Debt Securitization Refinancing”) by redeeming in full the 2015-1 Notes and issuing new notes (the “2015-1R Notes”). The 2015-1R Notes were issued by Carlyle Direct Lending CLO 2015-1R LLC (the “2015-1 Issuer”), a wholly owned and consolidated subsidiary of us. The 2015-1R Notes are secured by a diversified portfolio of the 2015-1 Issuer consisting primarily of first and second lien senior secured loans. The 2015-1R Notes consist of:

(a) $234,800 AAA Class A-1-1-R Notes, which bear interest at the three-month LIBOR plus 1.55%;

(b) $50,000 AAA Class A-1-2-R Notes, which bear interest at the three-month LIBOR plus 1.48% for the first 24 months and the three-month LIBOR plus 1.78% thereafter;

(d) $66,000 Class A-2-R Notes, which bear interest at the three-month LIBOR plus 2.20%;

(e) $46,400 single-A Class B Notes, which bear interest at the three-month LIBOR plus 3.15%;

(f) $27,000 BBB- Class C Notes, which bear interest at the three-month LIBOR plus 4.00%; and

The Company received 100% of the $125,900 in nominal value of the non-interest bearing preferred interests issued by the 2015-1 Issuer (the “2015-1 Issuer Preferred Interests”) on the closing date of the 2015-1 Debt Securitization in exchange for the Company’s contribution to the 2015-1 Issuer of the initial closing date loan portfolio. Following the 2015-1 Debt Securitization Refinancing, the 2015-1 Issuer Preferred Interests were reduced by approximately $21,375 to approximately $104,525.

The 2015-1R Notes have a reinvestment period end date and maturity date of October 15, 2023 and October 15, 2031, respectively. In connection with the initial financing, we have made customary representations, warranties and covenants to the 2015-1 Issuer. The Class A-1-1-R, Class A-1-2-R, Class A-1-3-R, Class A-2-R, Class B and Class C Notes are included in the consolidated financial statements included in Part I, Item 1 of this Form 10-Q. The 2015-1 Issuer Preferred Interests were eliminated in consolidation. For more information on the 2015-1R Notes, see Note 7, Borrowing, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

As of June 30, 2023 and December 31, 2022, we had $54,150 and $30,506, respectively, in cash, cash equivalents and restricted cash. The Credit Facility consisted of the following as of June 30, 2023 and December 31, 2022:



	Total Facility		Borrowings Outstanding		Unused Portion(1)		Amount Available(2)

June 30, 2023	$	745,000	$	400,241	$	344,759	$	342,783
December 31, 2022	$	688,000	$	440,441	$	247,559	$	247,559

(1)The unused portion is the amount upon which commitment fees are based.

(2)Available for borrowing based on the computation of collateral to support the borrowings and subject to compliance with applicable covenants and financial ratios.

The following were the carrying values (before debt issuance costs) and fair values of the Company’s 2015-1R Notes and Senior Notes as of June 30, 2023 and December 31, 2022:


	June 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Aaa/AAA Class A-1-1-R Notes	$	234,800	$	231,865	$	234,800	$	232,170
Aaa/AAA Class A-1-2-R Notes	50,000		49,645		50,000		49,655
Aaa/AAA Class A-1-3-R Notes	25,000		24,270		25,000		24,013
AA Class A-2-R Notes	66,000		64,376		66,000		63,802
A Class B Notes	46,400		44,813		46,400		44,465
BBB- Class C Notes	27,000		25,583		27,000		25,920
2019 Notes	115,000		104,864		115,000		105,496
2020 Notes	75,000		68,837		75,000		69,180
Total	$	639,200	$	614,253	$	639,200	$	614,701

As of June 30, 2023 and December 31, 2022, we had $1,039,441 and $1,079,641, respectively, of outstanding consolidated indebtedness under the Credit Facility, the 2015-1R Notes and the Senior Notes. Our annualized interest cost as of June 30, 2023 and December 31, 2022, was 6.50% and 5.78%, excluding fees (such as fees on undrawn amounts and amortization of upfront fees). For the three months ended June 30, 2023 and 2022, we incurred $17,873 and $9,170, respectively, of interest expense and credit facility fees. For the six months ended June 30, 2023 and 2022, we incurred $35,154 and $16,786, respectively, of interest expense and credit facility fees.

Our Credit Facility, the Senior Notes and the 2015-1R Notes impose financial and operating covenants that restrict our business activities, and provide for remedies on default and similar matters. As of June 30, 2023, we were in material compliance with the operating and financial covenants of our Credit Facility, the Senior Notes and the 2015-1R Notes. Although we believe we will continue to be in material compliance, we cannot assure you that we will continue to comply with the covenants in our Credit Facility, the Senior Notes and the 2015-1R Notes. Failure to comply with these covenants could result in a default. If we were unable to obtain a waiver of a default from the lenders or holders of that indebtedness, as applicable, those lenders or holders could accelerate repayment under that indebtedness, which may result in cross-acceleration of other indebtedness, and thereby have a material adverse effect on our business, financial condition and results of operations. Moreover, to the extent that we cannot meet our financing obligations, we risk the loss of some or all of our assets to liquidation or sale to satisfy the obligations. In such an event, we may be forced to sell assets at significantly depressed prices due to market conditions or otherwise, which may result in losses.

Equity Activity

Common shares issued and outstanding as of June 30, 2023 and December 31, 2022 were 50,794,941 and 51,060,136, respectively.

The following table summarizes activity in the number of shares of our common stock outstanding during the six months ended June 30, 2023 and 2022:


	Six months ended June 30,
	2023	2022
Common shares outstanding, beginning of period	51,060,136	53,142,454

Repurchase of common stock(1)	(265,195)	(994,243)
Common shares outstanding, end of period	50,794,941	52,148,211

(1) See Note 9, Net Assets, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the Company Stock Repurchase Program.

On May 5, 2020, we issued and sold 2,000,000 shares of Preferred Stock, par value $0.01, to an affiliate of Carlyle in a private placement at a price of $25 per share. Shares of Preferred Stock issued and outstanding were 2,000,000 as of both June 30, 2023 and December 31, 2022.

Dividends and Distributions

The following table summarizes our updates to our dividend policy. Our dividend policy is subject to change by the Board of Directors in its sole discretion at any time.


Record Date	Base Dividend Per Share
September 30, 2020	$	0.32
September 30, 2022	$	0.34
December 30, 2022	$	0.36
March 31, 2023	$	0.37

The following table summarizes our dividends declared per share of common stock during the two most recent fiscal years and the current fiscal year to-date:


Date Declared	Record Date	Payment Date	Per Share Amount






























2021
February 22, 2021	March 31, 2021	April 16, 2021	$	0.37	(1)
May 3, 2021	June 30, 2021	July 15, 2021	$	0.36	(1)
August 2, 2021	September 30, 2021	October 15, 2021	$	0.38	(1)
November 1, 2021	December 31, 2021	January 14, 2022	$	0.39	(1)
Total			$	1.50
2022
February 18, 2022	March 31, 2022	April 15, 2022	$	0.40	(1)
May 2, 2022	June 30, 2022	July 15, 2022	$	0.40	(1)
August 8, 2022	September 30, 2022	October 14, 2022	$	0.40	(1)
October 31, 2022	December 30, 2022	January 16, 2023	$	0.44	(1)
Total			$	1.64
2023
February 21, 2023	March 31, 2023	April 14, 2023	$	0.44	(1)
May 4, 2023	June 30, 2023	July 18, 2023	$	0.44	(1)
Total			$	0.88

(1) Per Share Amount includes the base dividend and a special/supplemental dividend. For more information on the base dividend and special/supplemental dividend, see Note 9, Net Assets, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Our Preferred Stock has a liquidation preference equal to $25 per share (the “Liquidation Preference) plus any accumulated but unpaid dividends up to but excluding the date of distribution. Dividends on our Preferred Stock are payable on a quarterly basis in an initial amount equal to 7.00% per annum of the Liquidation Preference per share, payable in cash, or at our option, 9.00% per annum of the Liquidation Preference payable in additional shares of Preferred Stock.

The Preferred Stock is convertible, in whole or in part, at the option of the holder of the Preferred Stock into the number of shares of common stock equal to the Liquidation Preference plus any accumulated but unpaid dividends, divided by an initial conversion price of $9.50, subject to certain adjustments to prevent dilution as set forth in the Company's articles supplementary (the “Articles Supplementary”). The conversion price as of June 30, 2023 was $9.20. Effective as of May 5, 2023, the Company, with the approval of the Board of Directors, including a majority of the Independent Directors, has the option to redeem all of the Preferred Stock for cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends. The holders of the Preferred Stock have the right to convert all or a portion of their shares of Preferred Stock prior to the date fixed for such redemption. Effective as of May 5, 2027, the holders of the Preferred Stock have the option to require the Company to redeem any or all of the then-outstanding Preferred Stock upon 90 days’ notice. The form of consideration used in any such redemption is at the option of the Board of Directors, including a majority of the Independent Directors, and may be cash consideration equal to the Liquidation Preference plus any accumulated but unpaid dividends, or

shares of common stock. Holders also have the right to redeem the Preferred Stock upon a Change in Control (as defined in the Articles Supplementary).


Date Declared	Record Date	Payment Date	Per Share Amount
2021
March 31, 2021	March 31, 2021	March 31, 2021	$	0.438
June 30, 2021	June 30, 2021	June 30, 2021	$	0.438
September 30, 2021	September 30, 2021	September 30, 2021	$	0.438
December 29, 2021	December 31, 2021	December 31, 2021	$	0.438
Total			$	1.752
2022
March 25, 2022	March 31, 2022	March 31, 2022	$	0.438
June 27, 2022	June 30, 2022	June 30, 2022	$	0.438
September 22, 2022	September 30, 2022	September 30, 2022	$	0.438
December 16, 2022	December 30, 2022	December 30, 2022	$	0.438
Total			$	1.752
2023
March 23, 2023	March 31, 2023	March 31, 2023	$	0.438
June 27, 2023	June 30, 2023	June 30, 2023	$	0.438
Total			$	0.876

OFF BALANCE SHEET ARRANGEMENTS

In the ordinary course of our business, we enter into contracts or agreements that contain indemnifications or warranties. Future events could occur which may give rise to liabilities arising from these provisions against us. We believe that the likelihood of such an event is remote; however, the maximum potential exposure is unknown. No accrual has been made in these consolidated financial statements as of June 30, 2023 and December 31, 2022 in Part I, Item 1 of this Form 10-Q for any such exposure.

We have in the past, currently are and may in the future become obligated to fund commitments such as revolving credit facilities, bridge financing commitments, or delayed draw commitments.

We had the following unfunded commitments to fund delayed draw and revolving senior secured loans as of the indicated dates:


	Par / Principal Amount as of
	June 30, 2023		December 31, 2022
Unfunded delayed draw commitments	$	79,211	$	83,743
Unfunded revolving commitments	71,213		74,463
Total unfunded commitments	$	150,424	$	158,206

Pursuant to an undertaking by us in connection with the 2015-1 Debt Securitization, we agreed to hold on an ongoing basis the 2015-1 Issuer Preferred Interests with an aggregate dollar purchase price at least equal to 5% of the aggregate outstanding amount of all collateral obligations by the 2015-1 Issuer for so long as any securities of the 2015-1 Issuer remains outstanding. As of June 30, 2023 and December 31, 2022, we were in compliance with this undertaking.

ASSET COVERAGE

In accordance with the Investment Company Act, a BDC is only allowed to borrow amounts such that its “asset coverage,” as defined in the Investment Company Act, satisfies the minimum asset coverage ratio specified in the Investment

Company Act after such borrowing. “Asset coverage” generally refers to a company’s total assets, less all liabilities and indebtedness not represented by “senior securities,” as defined in the Investment Company Act, divided by total senior securities representing indebtedness and, if applicable, preferred stock. “Senior securities” for this purpose includes borrowings from banks or other lenders, debt securities and preferred stock.

Prior to March 23, 2018, BDCs were required to maintain a minimum asset coverage ratio of 200%. On March 23, 2018, an amendment to Section 61(a) of the Investment Company Act was signed into law to permit BDCs to reduce the minimum asset coverage ratio from 200% to 150%, so long as certain approval and disclosure requirements are satisfied. Under the 200% minimum asset coverage ratio, BDCs are permitted to borrow up to one dollar for investment purposes for every one dollar of investor equity, and under the 150% minimum asset coverage ratio, BDCs are permitted to borrow up to two dollars for investment purposes for every one dollar of investor equity. In other words, Section 61(a) of the Investment Company Act, as amended, permits BDCs to potentially increase their debt-to-equity ratio from a maximum of 1 to 1 to a maximum of 2 to 1.

On April 9, 2018 and June 6, 2018, the Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the Investment Company Act), and the stockholders of the Company, respectively, approved the application to the Company of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the Investment Company Act. As a result, the minimum asset coverage ratio applicable to the Company was reduced from 200% to 150%, effective as of June 7, 2018.

As of June 30, 2023 and December 31, 2022, the Company had total senior securities of $1,089,441 and $1,129,641, respectively, consisting of secured borrowings under the Credit Facility, the Senior Notes, the 2015-1R Notes, and the Preferred Stock, and had asset coverage ratios of 177.99% and 176.79%, respectively.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and judgments are based on historical information, information currently available to us and on various other assumptions management believes to be reasonable under the circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations. Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. We believe the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our consolidated financial statements and should be read in conjunction with our consolidated financial statements and related notes in Part II, Item 8, as well as with our “Risk Factors” in Part I, Item 1A of the Company's annual report on Form 10-K for the year ended December 31, 2022.

Fair Value Measurements

The Company applies fair value accounting in accordance with the terms of Financial Accounting Standards Board ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the amount that would be exchanged to sell an asset or transfer a liability in an orderly transfer between market participants at the measurement date. Effective September 8, 2022, the Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, determines in good faith the fair value of the Company’s investment portfolio for which market quotations are not readily available. The Investment Adviser values securities/instruments traded in active markets on the measurement date by multiplying the closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Investment Adviser may also obtain quotes with respect to certain of its investments, such as its securities/instruments traded in active markets and its liquid securities/instruments that are not traded in active markets, from pricing services, brokers, or counterparties (i.e., “consensus pricing”). When doing so, the Investment Adviser determines whether the quote obtained is sufficient according to U.S. GAAP to determine the fair value of the security. The Investment Adviser may use the quote obtained or alternative pricing sources may be utilized including valuation techniques typically utilized for illiquid securities/instruments.

determine a preliminary value, which is also reviewed alongside consensus pricing, where available; (ii) preliminary valuation conclusions are documented and reviewed by a valuation committee comprised of personnel of the Investment Adviser; (iii) the Board of Directors engages a third-party valuation firm to provide positive assurance on portions of the Middle Market Senior Loans and equity investments portfolio each quarter (such that each non-traded investment other than Credit Fund is reviewed by a third-party valuation firm at least once on a rolling twelve month basis) including a review of management’s preliminary valuation and conclusion on fair value; (iv) if applicable, prior to September 8, 2022, the Audit Committee of the Board of Directors (the “Audit Committee”) reviewed the assessments of the Investment Adviser and the third-party valuation firm; and (v) if applicable, prior to September 8, 2022, the Board of Directors discussed the valuation recommendations of the Audit Committee and determined the fair value of each investment in the portfolio in good faith based on the input of the Investment Adviser and, where applicable, the third-party valuation firm.

All factors that might materially impact the value of an investment are considered, including, but not limited to the assessment of the following factors, as relevant:

•the nature and realizable value of any collateral;

•call features, put features and other relevant terms of debt;

•the portfolio company’s leverage and ability to make payments;

•the portfolio company’s public or private credit rating;

•the portfolio company’s actual and expected earnings and discounted cash flow;

•prevailing interest rates and spreads for similar securities and expected volatility in future interest rates;

•the markets in which the portfolio company does business and recent economic and/or market events; and

•comparisons to comparable transactions and publicly traded securities.

For further information on the fair value hierarchies, our framework for determining fair value and the composition of our portfolio, see Note 3, Fair Value Measurements, to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Investments

Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized appreciation or depreciation previously recognized, and includes investments charged off during the period, net of recoveries. Net change in unrealized appreciation or depreciation on investments as presented in the Consolidated Statements of Operations in Part I, Item 1 of this Form 10-Q reflects the net change in the fair value of investments, including the reversal of previously recorded unrealized appreciation or depreciation when gains or losses are realized.

Revenue Recognition

Non-Accrual Income

Income Taxes

The Company evaluates tax positions taken or expected to be taken in the course of preparing its consolidated financial statements to determine whether the tax positions are “more-likely than not” to be sustained by the applicable tax authority. All penalties and interest associated with income taxes, if any, are included in income tax expense.

The SPV and the 2015-1 Issuer are disregarded entities for tax purposes and are consolidated with the tax return of the Company.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are subject to financial market risks, including changes in the valuations of our investment portfolio and interest rates.

Valuation Risk

Our investments may not have a readily available market price, Our Investment Adviser, as the valuation designee pursuant to Rule 2a-5 under the Investment Company Act, values our investments for which market quotations are not readily available in good faith at fair value in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. In addition, because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.

Interest Rate Risk

As of June 30, 2023, on a fair value basis, approximately 1.1% of our debt investments bear interest at a fixed rate and approximately 98.9% of our debt investments bear interest at a floating rate, which primarily are subject to interest rate floors. Interest rates on the investments held within our portfolio of investments are typically based on floating LIBOR or SOFR, with many of these investments also having a reference rate floor. Additionally, our Credit Facility is also subject to floating interest rates and is currently paid based on floating SOFR rates.

Interest rate sensitivity refers to the change in earnings that may result from changes in the level of interest rates. There can be no assurance that a significant change in market interest rates will not have a material adverse effect on our income in the future.

The following table estimates the potential changes in net cash flow generated from interest income, should interest rates increase or decrease by 100, 200 or 300 basis points. Interest income is calculated as revenue from interest generated from our settled portfolio of debt investments held as of June 30, 2023. These hypothetical interest income calculations are based on a model of the settled debt investments in our portfolio, excluding structured finance obligations and our investments in Credit Fund and Credit Fund II, held as of June 30, 2023, and are only adjusted for assumed changes in the underlying base interest rates and the impact of that change on interest income. Interest expense is calculated based on outstanding secured borrowings and notes payable as of June 30, 2023 and based on the terms of our Credit Facility and notes payable. Interest expense on our Credit Facility and notes payable is calculated using the stated interest rate as of June 30, 2023, adjusted for the hypothetical changes in rates, as shown below. We intend to continue to finance a portion of our investments with borrowings and the interest rates paid on our borrowings may impact significantly our net interest income.

We regularly measure exposure to interest rate risk. We assess interest rate risk and manage interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.

Based on our Consolidated Statements of Assets and Liabilities as of June 30, 2023, the following table shows the annual impact on net investment income of base rate changes in interest rates for our settled debt investments (considering interest rate floors for variable rate instruments), excluding our investments in Credit Fund and Credit Fund II, and outstanding secured borrowings and notes payable assuming no changes in our investment and borrowing structure:


	June 30, 2023
Basis Point Change	Interest Income		Interest Expense		Net Investment Income
Up 300 basis points	$	46,341	$	(24,733)	$	21,608
Up 200 basis points	$	30,894	$	(16,489)	$	14,405
Up 100 basis points	$	15,447	$	(8,244)	$	7,203
Down 100 basis points	$	(15,447)	$	8,244	$	(7,203)
Down 200 basis points	$	(30,894)	$	16,489	$	(14,405)
Down 300 basis points	$	(46,341)	$	24,733	$	(21,608)

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and our Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to the Company that is required to be disclosed by us in the reports we file or submit under the Exchange Act.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the three months ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company may become party to certain lawsuits in the ordinary course of business. The Company is not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against the Company. See also Note 11 to the consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors.

In addition to the other information set forth within this Form 10-Q, consideration should be given to the information disclosed in “Risk Factors” in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2022.

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

We did not sell any equity securities during the period covered in this report that were not registered under the Securities Act of 1933, as amended.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information regarding purchases of our common stock made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the three months ended June 30, 2023 for the periods indicated.



Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)(2)	Maximum (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2023 through April 30, 2023	—	$	—	—	$	42,263
May 1, 2023 through May 31, 2023	—	—		—	42,263
June 1, 2023 through June 30, 2023	—	—		—	42,263
Total	—			—

(1)On trade date basis.

(2)On August 1, 2022, the Company's Board of Directors approved the continuation of the Company's Stock Repurchase Program until November 5, 2023, or until the date the approved dollar amount has been used to repurchase shares, and increased the size of the Company’s Stock Repurchase Program by $50 million. Pursuant to the program, the Company is authorized to repurchase up to $200 million in the aggregate of the Company's outstanding stock in the open market and/or through privately negotiated transactions at prices not to exceed the Company’s net asset value per share as reported in its most recent financial statements, in accordance with the guidelines specified in Rule 10b-18 of the Exchange Act. The timing, manner, price and amount of any repurchases will be determined by the Company, in its discretion, based upon the evaluation of economic and market conditions, stock price, available cash, applicable legal and regulatory requirements and other factors, and may include purchases pursuant to Rule 10b5-1 of the Exchange Act. The program does not require the Company to repurchase any specific number of shares and there can be no assurance as to the amount of shares repurchased under the program. The program may be suspended, extended, modified or discontinued by the Company at any time, subject to applicable law. Pursuant to the authorization described above, the Company adopted a 10b5-1 plan (the “Company 10b5-1 Plan”). The Company 10b5-1 Plan provides that purchases will be conducted on the open market in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act and will otherwise be subject to applicable law, which may prohibit purchases under certain circumstances. The amount of purchases made under the Company 10b5-1 Plan or otherwise and how much will be purchased at any time is uncertain, dependent on prevailing market prices and trading volumes, all of which we cannot predict. The Company's Stock Repurchase Program was originally approved by the Company's Board of Directors on November 5, 2018 and announced on November 6, 2018.

Item 3. Defaults Upon Senior Securities.

Not applicable.

100

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the three months ended June 30, 2023, no director or Section 16 officer of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

Item 6. Exhibits.



10.1						Fifth Amended and Restated Limited Liability Company Agreement, dated as of April 20, 2023, between Carlyle Secured Lending, Inc. and Credit Partners USA LLC, as members*

10.2						Second Supplemental Indenture, dated as of June 30, 2023, between Carlyle Direct Lending CLO 2015-1R LLC, as issuer, and State Street Bank and Trust Company, as trustee*

31.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*

31.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

32.1						Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2						Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document*

101.SCH						Inline XBRL Taxonomy Extension Schema Document*

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document*

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document*

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)*

* Filed herewith

101

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	CARLYLE SECURED LENDING, INC.

Dated: August 8, 2023	By	/s/ Thomas M. Hennigan
		Thomas M. Hennigan Chief Financial Officer (principal financial officer)

102

Document

Exhibit 10.1

MIDDLE MARKET CREDIT FUND, LLC

FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

Dated as of April 20, 2023

THE SECURITIES REPRESENTED BY THIS FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND, AS SUCH, THEY MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE SECURITIES HAVE BEEN QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS SUCH QUALIFICATION AND REGISTRATION IS NOT LEGALLY REQUIRED. TRANSFERS OF THE SECURITIES REPRESENTED BY THIS FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT ARE FURTHER SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH HEREIN.

TABLE OF CONTENTS

Page

ARTICLE 1 DEFINITIONS 1

ARTICLE 2 GENERAL PROVISIONS 11

Section 2.1. Formation of the Limited Liability Company 11

Section 2.2. Company Name 11

Section 2.3. Place of Business; Agent for Service of Process 11

Section 2.4. Principal Purpose and Powers of the Company 11

Section 2.5. Fiscal Year 13

ARTICLE 3 MEMBERS 13

Section 3.1. General 13

Section 3.2. Membership Interests 13

Section 3.3. Liability of Members 13

Section 3.4. Non-Solicitation of Senior Management 14

Section 3.5. Representations and Warranties 14

ARTICLE 4 COMPANY CAPITAL AND INTERESTS 17

Section 4.1. Capital Commitments 17

Section 4.2. Temporary Advances 18

Section 4.3. Defaulting Members 19

Section 4.4. Membership Interest or Withdrawals 23

Section 4.5. Admission of Additional Members 23

ARTICLE 5 ALLOCATIONS 23

Section 5.1. Capital Accounts 23

Section 5.2. General Allocations 24

Section 5.3. Special Allocations 24

Section 5.4. Changes of Membership Interests 26

Section 5.5. Income Taxes and Tax Capital Accounts 27

ARTICLE 6 DISTRIBUTIONS 27

Section 6.1. General 27

Section 6.2. Withholding 28

Section 6.3. Reserves; Certain Limitations; Distributions in Kind 28

ARTICLE 7 MANAGEMENT OF COMPANY 29

Section 7.1. Management Generally 29

Section 7.2. Board 29

Section 7.3 Meetings of the Board 30

Section 7.4. Quorum; Acts of the Board 30

Section 7.5. Electronic Communications 31

Section 7.6. Investment Committee 31

Section 7.7. Meetings of the Investment Committee 32

Section 7.8. Quorum of the Investment Committee 32

Section 7.9. Committees of Board Members 33

Section 7.10. Compensation of Board Members; Expenses 33

Section 7.11. Removal of Board Members 33

Section 7.12. Board as Agent 33

Section 7.13. Officers 34

Section 7.14. Officers as Agents 34

Section 7.15. Duties of Board, Board Members and Officers 34

Section 7.16. Reliance by Third Parties 35

Section 7.17. Members’ Outside Transactions; Investment Opportunities;

Time and Attention 35

Section 7.18. Indemnification 37

Section 7.19. Tax Matters Member 38

ARTICLE 8 TRANSFERS OF COMPANY INTERESTS; WITHDRAWALS 39

Section 8.1. Transfers by Members 39

Section 8.2. Withdrawal by Members 41

ARTICLE 9 TERM, DISSOLUTION AND LIQUIDATION OF COMPANY 42

Section 9.1. Term 42

Section 9.2. Dissolution 42

Section 9.3. Wind-down 44

ARTICLE 10 ACCOUNTING, REPORTING AND VALUATION PROVISIONS 46

Section 10.1. Books and Accounts 46

Section 10.2. Financial Reports; Tax Return 47

Section 10.3. Tax Elections 48

Section 10.4. Confidentiality 49

Section 10.5. Valuation 50

Section 10.6. Investment in Public Corporations 51

ARTICLE 11 EXPENSES 51

Section 11.1. Company Expenses 51

ARTICLE 12 MISCELLANEOUS PROVISIONS 52

Section 12.1. Power of Attorney 52

Section 12.2. Determination of Disputes 52

Section 12.3. Certificate of Formation; Other Documents 53

Section 12.4. Force Majeure 53

Section 12.5. Applicable Law 53

Section 12.6. Waivers 53

Section 12.7. Notices 54

Section 12.8. Construction 54

Section 12.9. Amendments 55

Section 12.10. Legal Counsel 56

Section 12.11. Execution 56

Section 12.12. Binding Effect 57

Section 12.13. Severability 57

Section 12.14. Computation of Time 57

Section 12.15. Entire Agreement 57

Section 12.16. Opinions of Counsel 57

Section 12.17. Agreement to Keep Terms Confidential 57

iii

MIDDLE MARKET CREDIT FUND, LLC

FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

This Fifth Amended and Restated Limited Liability Company Agreement, dated as of April 20, 2023, is entered into by and between Carlyle Secured Lending, Inc. (f/k/a TCG BDC, Inc. and Carlyle GMS Finance, Inc.) and Credit Partners USA LLC (collectively, the “Members”).

WHEREAS, Carlyle Secured Lending, Inc. formed the Company (as defined below) on February 4, 2016 and entered into a limited liability company agreement of the Company, dated as of February 12, 2016 (the “Original Agreement”), in each case, as the Company’s sole initial member;

WHEREAS, the Members entered into an amended and restated limited liability company agreement of the Company, dated as of February 29, 2016 (the “A&R LLC Agreement”);

WHEREAS, the Members entered into a second amended and restated limited liability company agreement of the Company, dated as of June 24, 2016 (the “Second A&R LLC Agreement”);

WHEREAS, the Members entered into a third amended and restated limited liability company agreement of the Company, dated as of February 22, 2021 (the “Third A&R LLC Agreement”);

WHEREAS, the Members entered into a fourth amended and restated limited liability company agreement of the Company, dated as of May 16, 2022 (the “Fourth A&R LLC Agreement”);

WHEREAS, the Members desire to amend the Fourth A&R LLC Agreement in its entirety and co-manage the Company under the Act (as defined below) for the purposes and pursuant to the terms set forth herein.

NOW THEREFORE, in consideration of the mutual agreements set forth below, and intending to be legally bound, the Members hereby agree as follows:

ARTICLE 1

DEFINITIONS

For purposes of this Agreement, the following terms shall have the following meanings:

“Act”: the Delaware Limited Liability Company Act, as from time to time in effect.

“Adjusted Capital Account Deficit”: with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the applicable Fiscal Year after (i)

crediting thereto any amounts which such Member is, or is deemed to be, obligated to restore pursuant to Treasury Regulations § 1.704-2(g)(1) and § 1.704-2(i)(5) and (ii) debiting such Capital Account by the amount of the items described in Treasury Regulation § 1.704 1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Treasury Regulation § 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“Administration Agreement”: the Administration Agreement by and among the Company, the Administrative Agent, CSL and Credit Partners, as amended from time to time with Board Approval.

“Administrative Agent”: Carlyle Global Credit Administration L.L.C. (f/k/a Carlyle GMS Finance Administration L.L.C.) or an Affiliate thereof retained by the Company with Board Approval to perform administrative services for the Company.

“Affiliate”: with respect to a Person (other than Credit Parent and Carlyle Parent), any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; provided, that, with respect to Credit Parent and Carlyle Parent, the term “Affiliate” shall only include its direct and indirect subsidiaries.

“Agreement”: this Fourth Amended and Restated Limited Liability Company Agreement, as it may from time to time be amended.

“Allocation Requirements”: the meaning set forth in Section 7.17(b).

“Anti-Corruption Laws”: the meaning set forth in Section 3.5(g).

“A&R LLC Agreement”: the meaning set forth in the recital to this Agreement.

“Board”: the Board of the Company.

“Board Approval”: as to any matter requiring Board approval hereunder, the prior approval of the Board.

“Board Member”: each Person elected, designated or appointed to serve as a member of the Board in accordance with this Agreement.

“Capital Account”: as to each Member, the capital account maintained on the books of the Company for such Member in accordance with Section 5.1.

“Capital Commitment”: as to each Member, the amount of Capital Commitment set forth on Exhibit A attached hereto and on the Member List, in accordance with the terms of this Agreement.

“Capital Contribution”: as to each Member, (i) the aggregate amount of the Initial Capital Contribution actually contributed to the equity capital of the Company by such Member as set forth in Section 4.1 and (ii) all Subsequent Contributions made by such Member as set forth in

Section 4.1. The Capital Contribution of a Member that is an assignee of all or a portion of a Membership Interest in the Company shall include the Capital Contribution of the assignor (or a pro rata portion thereof in the case of an assignment of less than the entire Membership Interest of the assignor). Notwithstanding the foregoing, and subject to Board Approval in each instance, each Member shall be permitted to make a Capital Contribution to the Company in the form of an Investment currently owned by the Member.

“Carlyle Parent”: The Carlyle Group Inc. (f/k/a The Carlyle Group L.P.).

“Carlyle Personnel”: the meaning set forth in Section 3.4(b).

“Cause Event”: (i) the bankruptcy, insolvency, dissolution or liquidation of a Member, or the making of an assignment for the benefit of creditors by a Member, or a default under Section 4.3 by a Member which remains uncured or unwaived after the expiration of the cure period set forth in Section 4.3; (ii) the institution of any lawsuits or legal proceedings against a Member or, solely with respect to CSL, the investment adviser of CSL if such lawsuit or legal proceeding is likely to have a material adverse effect on such Member’s ability to perform its obligations under this Agreement; provided, that the institution of any lawsuit or legal proceeding against a Member by the other Member shall not be a Cause Event; (iii) the commencement of any formal enforcement investigation of a Member or, solely with respect to CSL, the investment adviser of CSL by the SEC or any other U.S. or foreign federal regulatory or administrative body that involves an allegation of a violation of law by any such person and that is likely to have a material adverse effect on such Member’s ability to perform its obligations under this Agreement; or (iv) any other act or omission by a Member that (A) causes or is likely to cause such other Member or its Affiliates to receive materially adverse publicity or (B) otherwise materially adversely affects or may materially adversely affect the reputation of such other Member or its Affiliates.

“Certificate of Formation”: the certificate of formation of the Company filed under the Act, as from time to time amended.

“CGCIM”: Carlyle Global Credit Investment Management L.L.C. (f/k/a Carlyle GMS Investment Management L.L.C.).

“COD Income”: the meaning set forth in Section 5.3(j).

“Code”: the Internal Revenue Code of 1986, as from time to time amended.

“Collateral Agent”: the collateral agent pursuant to the terms of the LSA or any successor thereto pursuant to the terms of the LSA.

“Company”: the limited liability company created and existing pursuant to the Certificate of Formation and this Agreement.

“Company Counsel”: the meaning set forth in Section 12.10(a).

“Company Minimum Gain”: the meaning attributed to “partnership minimum gain” as set forth in Treasury Regulations §§ 1.704-2(b)(2) and 1.704-2(d).

“Credit Parent”: the ultimate parent entity that indirectly, through one or more intermediaries, controls Credit Partners, and such Person’s subsidiaries.

“Credit Parent Personnel”: the meaning set forth in Section 3.4(a).

“Credit Partners”: Credit Partners USA LLC, or any Affiliate of Credit Partners USA LLC substituted for Credit Partners USA LLC as a Member pursuant to the terms of this Agreement; provided that the obligations of such Affiliate substituted for Credit Partners USA LLC as a Member hereunder are unconditionally and fully guaranteed by a U.S. Affiliate of Credit Parent.

“Credit Partners Counsel”: the meaning set forth in Section 12.10(b).

“CSL”: Carlyle Secured Lending, Inc. (f/k/a TCG BDC, Inc. and Carlyle GMS Finance, Inc.), or any Person substituted for Carlyle Secured Lending, Inc. as a Member pursuant to the terms of this Agreement

“Default Date”: the meaning set forth in Section 4.3(a).

“Default Loan”: the meaning set forth in Section 4.3(b)(iii).

“Defaulting Member”: the meaning set forth in Section 4.3(a).

“Disqualified Industry”: paper and pulp, commodity linked, energy, metals and mining, automotive, semiconductors, gaming, munitions, gun manufacturing and such other industries set forth on Exhibit C, as updated from time to time by Board Approval.

“ERISA”: the Employee Retirement Income Security Act of 1974, as from time to time amended.

“ERISA Plan”: a Person that is an “employee benefit plan” within the meaning of, and subject to the provisions of, ERISA.

“Expenses”: all costs and expenses, of whatever nature, directly or indirectly borne by the Company, including, without limitation, those borne under the Administration Agreement, under any sub-administration agreement or with respect to any Financing Subsidiary.

“Facility”: the meaning set forth in Section 2.4(b)(iv).

“Final Maturity Date”: the meaning set forth in the LSA.

“Financing Subsidiary”: a direct or indirect subsidiary of the Company, including without limitation a bankruptcy remote special purpose entity that will enter into a credit facility or issue debt.

“Fiscal Year”: the meaning set forth in Section 2.5.

“GAAP”: United States generally accepted accounting principles.

“GAAP Profit or GAAP Loss”: as to any transaction or fiscal period, the net income or loss of the Company under GAAP.

“Government Authority”: any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector utility, supra-national entity (including the European Union and European Central Bank) and any self-regulatory organization.

“Harm”: the meaning set forth in Section 7.18(a).

“Illiquid Security”: any security other than one which is marketable. For purposes of this definition, a security is marketable only if it (i) is traded on or through a national or other established securities exchange or the National Association of Securities Dealers, Inc. Automated Quotation System, (ii) can be sold, with or without volume limitations, to the general public by a Member receiving a distribution of such security, and (iii) is not subject to contractual restrictions on transfer.

“Initial Capital Contribution”: the meaning set forth in Section 4.1(a).

“Initial Closing Date”: February 29, 2016 or such other date as the Members may agree.

“Investment”: an investment of any type held, directly or indirectly, by the Company or any Financing Subsidiary from time to time. By way of example, Investments may include loans, notes and other debt instruments, total return swaps and other derivative instruments, participation interests, warrants, equity securities including common stock, preferred stock and structured equity products, portfolios of any of the foregoing and derivative instruments related to any of the foregoing. Investments do not include interests in Subsidiaries. Investments do not include any property that has built in gain for U.S. federal income tax purposes without the other Member’s prior written consent.

“Investment Committee”: the Investment Committee of the Company established pursuant to Section 7.6.

“Investment Committee Approval”: as to any matter requiring Investment Committee approval hereunder, the prior approval of the Investment Committee.

“Investment Committee Member”: each Person elected, designated or appointed to serve as a member of the Investment Committee in accordance with this Agreement.

“Investment Company Act”: the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“Investment Period”: the period commencing on the Initial Closing Date and continuing until May 21, 2025 or such time as extended by the agreement of the Members, unless sooner terminated as provided in Section 4.1(f).

“Investor Acknowledgment”: the Investor Acknowledgment Agreement, dated as of June 24, 2016, by CSL or by Credit Partners, as applicable, for the benefit of the Collateral Agent.

“Investor Laws”: the meaning set forth in Section 8.2(b).

“JV Capital Pledge Amount”: the meaning set forth in the LSA.

“LIBOR Rate”: the three-month London InterBank Offered Rate, which for purposes hereof shall be deemed to equal for each day of a calendar quarter such rate as of the first day of such quarter.

“LSA”: the Loan and Servicing Agreement, dated as of June 24, 2016, by and among SPV, as the borrower, the Company, as the transferor and servicer, each of the conduit lenders, liquidity banks, lender agents and institutional lenders from time to time party thereto, Citibank N.A., as the collateral agent, lead arranger and administrative agent, and Wells Fargo Bank, National Association, as the account bank, collateral custodian and collateral administrator, as amended from time to time.

“Member”: each Person identified as a Member in the first sentence hereof, and any Person that is or becomes a Member of the Company.

“Member List”: the meaning set forth in Section 3.1(b).

“Member Loan”: subordinated loans in the form attached hereto as Exhibit D, contributed as Subsequent Contributions to the Company.

“Member Minimum Gain”: an amount, determined in accordance with Treasury Regulation § 1.704-2(i)(3) with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability.

“Member Nonrecourse Debt”: the meaning attributed to “partner nonrecourse debt” as set forth in Treasury Regulation § 1.704-2(b)(4).

“Membership Interest”: a Member’s entire limited liability company interest in the Company, including the right of such Member to any and all of the benefits to which the Member may be entitled as provided in this Agreement.

“Mezzanine Loan”: the loan from CSL to the Company pursuant to the Mezzanine Loan Agreement.

“Mezzanine Loan Agreement”: the Mezzanine Loan Agreement, dated as of June 24, 2016, by and among the Company and CSL, as amended from time to time.

“New Partnership Audit Procedures”: Subchapter C of Chapter 63 of Subtitle F of the Code, as modified by Section 1101 of the Bipartisan Budget Act of 2015, Pub. L. No. 114-74, together with any successor statutes thereto, and any Treasury Regulations promulgated or official guidance issued thereunder.

“Non-Defaulting Member”: the meaning set forth in Section 4.3(a).

“Nonrecourse Deductions”: the meaning set forth in Treasury Regulation § 1.704-2(b)(1).

“Nonrecourse Liability”: the meaning set forth in Treasury Regulation § 1.704-2(b)(3).

“Organization Costs”: all out-of-pocket costs and expenses reasonably incurred directly by the Company or indirectly for the Company by a Member or its Affiliates in connection with the formation, capitalization and financing of the Company, the initial offering of Membership Interests to CSL and Credit Partners, and the preparation by the Company to commence its business operations, including, without limitation, reasonable and documented (i) fees and disbursements of legal counsel to the Company or its Affiliates, (ii) accountant fees and other fees for professional services, (iii) travel costs and other out-of-pocket expenses, and (iv) costs incurred in connection with the establishment of any Facility. The Company shall also pay, or the Board, pursuant to Board Approval, may cause the Company to make capital contributions or advances to any Financing Subsidiary relating to, the organizational costs and expenses of any Financing Subsidiary, including costs associated with borrowing money and entering into credit facilities.

“Original Agreement”: the meaning set forth in the recital to this Agreement.

“Person”: an individual, corporation, partnership, association, joint venture, company, limited liability company, trust, governmental authority or other entity.

“PIK Principal”: the meaning set forth in Section 4.3(b)(iv)(B)(1).

“Pledge Agreement”: the Pledge, Security Agreement and Assignment of Capital Commitments, dated as of June 24, 2016, by and among the Company (together with its successors and permitted assigns) and the Administrative Agent (together with its successors and permitted assigns), collectively as the assignor, and Citibank, N.A., in its capacity as the collateral agent under the LSA and together with its successors and permitted assigns, as the assignee, as amended from time to time.

“Pledge Agreement Shortfall Amount”: with respect to any call of capital by the Collateral Agent pursuant to the Pledge Agreement, an amount equal to the product of (a) the positive difference between (1) the amount paid by the Pledge Non-Defaulting Member in connection with such call and (2) the amount paid by the Pledge Defaulting Member in connection with such call, and (b) the percentage of any capital call that would be funded by the Pledge Defaulting Member if such call had been made by the Company pursuant to Section 4.1(a) hereof.

“Pledge Default Date”: the meaning set forth in Section 4.3(a).

“Pledge Defaulting Member”: the meaning set forth in Section 4.3(b)(iv).

“Pledge Non-Defaulting Member”: the meaning set forth in Section 4.3(b)(iv).

“Portfolio Company”: with respect to any Investment, any Person that is the issuer of any equity securities, equity-related securities or obligations, debt instruments or debt-related securities or obligations (including senior debt instruments, including investments in senior loans, senior debt securities and any notes or other evidences of indebtedness, preferred equity, warrants, options, subordinated debt, mezzanine securities or similar securities or instruments) that are the subject of such Investment. Portfolio Companies do not include Subsidiaries.

“Proceeding”: the meaning set forth in Section 7.18(a).

“Profit or Loss”: as to any transaction or fiscal period, the GAAP Profit or GAAP Loss with respect to such transaction or period, with such adjustments thereto as may be required by this Agreement; provided that in the event that the Value of any Company asset is adjusted under Section 10.5, the amount of such adjustment shall in all events be taken into account in the same manner as gain or loss from the disposition of such asset for purposes of computing Profit or Loss, and the gain or loss from any disposition of such asset shall be calculated by reference to such adjusted Value.

“Proportionate Share”: as to any Member, the percentage that its Capital Contribution represents of all Capital Contributions.

“Public Corporation”: all publicly traded corporations including, without limitation, those corporations with public equity, public debt or any form of publicly traded debt or tradable debt, including any “Term Loan B”, or any other corporation with securities admitted to trading on a recognized investment exchange, traded on an over-the-counter market or registered with the SEC.

“Qualified Investment”: a first lien senior secured loan or other debt instrument of $30 million or more with investment criteria approved by the Board on a quarterly basis (which criteria shall include, but not be limited to, company size (e.g., revenues, net income, EBITDA), investment size, investment yield range, and leverage range), which at the time of investment is not in default and does not include any property that has built in gain for U.S. federal income tax purposes and in which the issuer is not primarily engaged in a Disqualified Industry; provided that the minimum amount of such loan or other debt instrument may be changed from time to time only with the prior written consent of Credit Partners; provided, further, that the initial investment criteria for the first quarter after the Initial Closing Date shall be the criteria set forth in Exhibit E hereto. Notwithstanding the foregoing, if the Board cannot agree as to the investment criteria in any given quarter, the investment criteria for that quarter shall be the investment criteria approved by the Board for the prior quarter or, if the prior quarter is the first quarter following the Initial Closing Date, the initial investment criteria.

“Qualified IPO”: an initial public offering of CSL’s common stock that results in an unaffiliated public float of at least 15% of the aggregate capital commitments received prior to the date of such initial public offering.

“Qualifying JV Pledge Reduction”: the meaning set forth in the LSA.

“Qualifying JV Pledge Release”: the meaning set forth in the LSA.

“Reserved Amount”: the meaning set forth in Section 6.3(a).

“Returned Capital”: the meaning set forth in Section 6.1(c).

“Revolving Credit Loan”: any revolving credit facility or similar credit facility provided by the Company or any Financing Subsidiary, directly or indirectly, to a borrower or acquired from another Person; provided that in the case of any such credit facility provided or acquired indirectly through another entity which is not wholly owned by the Company, the Revolving Credit Loan shall be the Company’s proportionate share thereof.

“SEC”: the U.S. Securities and Exchange Commission.

“Second A&R LLC Agreement”: the meaning set forth in the recital to this Agreement.

“Securities Act”: the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“SOFR Rate”: the three month secured overnight financing rate published by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website, which for purposes hereof shall be deemed to equal for each day of a calendar quarter such published rate as of the first day of such quarter.

“SPV”: Middle Market Credit Fund SPV, LLC.

“Subscription Facility”: a Facility with respect to which the Company has pledged the Capital Commitments and the power and authority to call the Capital Commitments.

“Substantial Investment”: the meaning set forth in Section 3.5(k)(viii).

“Subsequent Contribution”: as to each Member, the aggregate amount of any amounts loaned to the Company by such Member pursuant to a Member Loan as set forth in Section 4.1.

“Subsidiary”: as to any Person, any corporation, partnership, limited liability company, joint venture, trust or estate of or in which more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class of such corporation may have voting power upon the happening of a contingency), (b) the interest in the capital or profits of such partnership, limited liability company, or joint venture or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company.

“Tax Matters Member”: the meaning set forth in Section 7.19(a).

“Temporary Advance”: the meaning set forth in Section 4.2.

“Temporary Advance Rate”: with respect to any period, the rate equal to (i) the sum of the average LIBOR Rate or the average SOFR RATE, as the case may be, as selected by the Member or its Affiliate at the time it makes a Temporary Advance, during such period (expressed as an annual rate) plus three percent (3.0%) per annum, multiplied by (ii) a fraction, the numerator of which is the number of days in such period and the denominator of which is 365; provided that the Temporary Advance Rate for any Temporary Advance outstanding for less than four days shall equal zero.

“Treasury Regulations”: the regulations issued by the United States Department of the Treasury under the Code as now in effect and as they may be amended from time to time, and any successor regulations.

“Unfunded Capital Commitments”: with respect to each Member, the amount of such Member’s Capital Commitment as of any date reduced by the aggregate amount of Capital Contributions made by that Member pursuant to all previous capital calls pursuant to Article IV, and increased by the aggregate amount of Returned Capital by that Member as set forth in Section 6.1(c).

“Valid Company Purposes”: shall include the purposes set forth in clauses (i) through (vi) during the Investment Period and shall include the purposes set forth in clauses (ii) through (vi) during any suspension of the Investment Period and any time after the expiration or earlier termination of the Investment Period: (i) during the Investment Period, with Investment Committee Approval, making Investments or acquiring assets (other than temporary investments for short term cash management purposes), (ii) making Investments which the Company was committed to make in whole or in part (as evidenced by a revolver, a binding commitment letter, a binding term sheet, a binding letter of intent or other definitive legal documents with respect to which there was prior Investment Committee Approval under which less than all advances have been made) on or before the suspension or termination of the Investment Period and satisfying funding or other obligations with respect to all Investments including any ongoing funding obligations relating to all Revolving Credit Loans that are revolving loans and delayed draw term loans at any time during or after the Investment Period, (iii) funding, with Board Approval, Reserved Amounts, (iv) making, with Investment Committee Approval, protective investments (including making protective advances and/or exchanges), which may require capital commitments and ongoing obligations of the Company or any Financing Subsidiary, (v) avoiding or curing any imminent borrowing base deficiency, default, event of default, or termination event relating to any indebtedness incurred by the Company or a Financing Subsidiary, repaying any indebtedness in the event that such repayment is mandatory, or using cash on hand that is not required for disbursements of the Company within five (5) business days to repay any indebtedness under the Company’s revolving credit facility, or (vi) repaying Temporary Advances and paying Expenses, Organizational Costs, and such other costs and expenses as set forth herein.

“Value”: as of the date of computation with respect to some or all of the assets of the Company or any assets acquired by the Company, the value of such assets determined in accordance with Section 10.5.

ARTICLE 2

GENERAL PROVISIONS

Section 2.1. Formation of the Limited Liability Company. The Company was formed under and pursuant to the Act upon the filing of the Certificate of Formation in the office of the Secretary of State of the State of Delaware, and the Members hereby agree to continue the Company under and pursuant to the Act. The Members agree that the rights, duties and liabilities of the Members shall be as provided in the Act, except as otherwise provided herein. Each Person being admitted as a Member as of the date hereof shall be admitted as a Member at the time such Person has executed this Agreement or a counterpart of this Agreement.

Section 2.2. Company Name. The name of the Company shall be “Middle Market Credit Fund, LLC,” or such other name as approved by Board Approval.

Section 2.3. Place of Business; Agent for Service of Process.

(a) The registered office of the Company in the State of Delaware shall be The Corporation Trust Company at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, or such other place as the Members may designate. The principal business office of the Company shall be at 1 Vanderbilt Avenue, 36th Floor, New York, NY 10017, or such other place as may be approved by Board Approval. The Company may also maintain additional offices at such place or places as may be approved by Board Approval.

(b) The agent for service of process on the Company pursuant to the Act shall be The Corporation Trust Company at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, or such other Person as the Members may designate with Board Approval.

Section 2.4. Principal Purpose and Powers of the Company.

(a) The principal purpose of the Company is (i) to make Investments, either directly or indirectly through Subsidiaries or other Persons, in debt instruments of U.S. middle-market companies, and (ii) to engage in any other lawful acts or activities as the Board deems reasonably necessary or advisable pursuant to Board Approval for which limited liability companies may be organized under the Act.

(b) In furtherance of such purpose, the Company, either directly or indirectly, shall have the following powers:

(i) to originate or otherwise acquire and finance U.S. middle-market leveraged loans sourced primarily by CGCIM or its Affiliates, including, without limitation, first lien loans, second lien loans, mezzanine loans and unitranche loans, and other corporate debt securities;

(ii) to form, invest in or through, transfer, dispose of or otherwise deal in the interests of, and exercise all rights, powers, privileges and other incidents of ownership with respect to, investment and financing vehicles (formed in the United States

or otherwise), including Financing Subsidiaries which hold one or more Investments, including, without limitation, investment and financing vehicles that are wholly or partially controlled, managed or administered by the Company, by a Member or by any Affiliate of any thereof, and investment and financing vehicles that are partially owned by Persons other than the Company (including but not limited to Persons that may be controlled, managed or administered by a Member or any of its Affiliates), and investment vehicles formed for the purpose of making and administering Investments and allocating related Profit or Loss;

(iii) to originate, purchase or otherwise acquire, transfer, finance, dispose of or otherwise deal in, and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, Investments without regard to whether such Investments are publicly traded, readily marketable or restricted as to transfer;

(iv) to incur indebtedness for borrowed money, and to pledge, hypothecate, mortgage, collaterally assign, or otherwise grant security interests or liens on any assets owned directly or indirectly by the Company, including, without limitation, the Capital Commitments and the power and authority to call the Capital Commitments (any credit facility secured by any such assets, a “Facility”);

(v) to guarantee, or otherwise become liable for, the obligations of other Persons, including, without limitation, Portfolio Companies and Financing Subsidiaries;

(vi) to engage personnel and do such other acts and things as may be necessary or advisable in connection therewith;

(vii) to engage and compensate attorneys, accountants, administrative agents, investment advisors, technical advisors, consultants, custodians, contractors and agents;

(viii) to pay and incur other expenses and obligations incident to the operation of the Company and/or Financing Subsidiaries and to make capital contributions to Financing Subsidiaries;

(ix) to establish, maintain, and close bank accounts and draw checks or other orders for the payment of money;

(x) to establish, maintain, and close accounts with brokers;

(xi) to enter into, make and perform all such contracts, agreements and other undertakings, and to take any and all actions and engage in any and all activities, as may be incidental to, or necessary, advisable or appropriate to, the carrying out of the foregoing purpose; and

(xii) to take any other action permitted to be taken by a limited liability company under the Act.

Section 2.5. Fiscal Year. The fiscal year of the Company for financial, accounting, federal, state and local income tax purposes shall be the period ending on December 31 of each year (the “Fiscal Year”), except as otherwise decided by the Members or as required by the Code or the Treasury Regulations.

ARTICLE 3

MEMBERS

Section 3.1. General.

(a) Members. The membership of the Company shall consist of the Members listed from time to time in Exhibit A hereto, and such additional and substituted Members as may be admitted to the Company pursuant to Section 4.5 or Section 8.1. The Members shall cause Exhibit A hereto to be amended from time to time to reflect the admission of any Member, the removal or withdrawal of any Member for any reason or the receipt by the Company of notice of any change of name or address of a Member.

(b) Member List. The Administrative Agent shall cause to be maintained in the principal office of the Company a list (the “Member List”) setting forth, with respect to each Member, such Member’s name, address, Capital Commitment, Capital Contributions and such other information as the Administrative Agent may deem necessary or desirable or as required by the Act. The Administrative Agent shall from time to time update the Member List as necessary to reflect accurately the information therein. Any reference in this Agreement to the Member List shall be deemed to be a reference to the Member List as in effect from time to time. No action of the Members shall be required to supplement or amend the Member List. Revisions to the Member List made by the Administrative Agent as a result of changes to the information set forth therein made in accordance with this Agreement shall not constitute an amendment of this Agreement. The Administrative Agent shall provide each Member written notice of any revisions to the Member List made by the Administrative Agent pursuant to this Section 3.1(b) within three (3) business days.

Section 3.2. Membership Interests.

(a) Creation and Issuance. A class of Membership Interests has been created having the relative rights, powers and duties specified in this Section 3.2 and as expressly set forth elsewhere in this Agreement. The Membership Interests have been issued to CSL and Credit Partners and, as of the date hereof, are held by CSL and Credit Partners, in consideration of their respective Initial Capital Contributions.

(b) Voting Rights. Except to the extent otherwise required by the Act or expressly provided in this Agreement, the Members shall not be entitled to vote on any matter. Subject to such limitation, the voting rights of the Members shall, in the aggregate, constitute 100% of the voting rights of all Members entitled to vote and, as among the Members, voting rights shall be apportioned based on their respective Capital Contributions.

Section 3.3. Liability of Members. Except as expressly provided in this Agreement, a Member shall have such liability for the repayment, satisfaction and discharge of the debts, liabilities and obligations of the Company only as is provided by the Act. A Member that receives a distribution made in violation of the Act shall be liable to the Company for the amount of such distribution to the extent, and only to the extent, required by the Act. The Members shall not otherwise be liable for the repayment, satisfaction or discharge of the Company’s debts, liabilities and obligations, except that each Member shall be required to make Capital Contributions in accordance with the terms of this Agreement and shall be required to repay any distributions which are not made in accordance with this Agreement.

Section 3.4. Non-Solicitation of Senior Management.

(a) CSL hereby agrees that during the term of this Agreement, none of Carlyle Parent, CGCIM, CSL, the Administrative Agent or any of their respective controlled Affiliates shall solicit Credit Parent Personnel for employment or hire any such persons while they are employed with Credit Partners or Credit Parent or within one year of their departure from Credit Partners and Credit Parent, without the prior written consent of Credit Parent. For the purpose of this Section 3.4(a), “Credit Parent Personnel” means any Managing Director or more senior investment personnel at Credit Parent or Credit Partners who recommended or approved any investment by Credit Parent or Credit Partners, directly or indirectly, in the Company or its Affiliates.

(b) Credit Partners hereby agrees that during the term of this Agreement, none of Credit Partners, Credit Parent or any of their respective controlled Affiliates shall solicit Carlyle Personnel for employment or hire any such persons while they are employed with CSL, the Administrative Agent or any of their Affiliates within one year of their departure from CSL, the Administrative Agent and their Affiliates, without the prior written consent of Carlyle Parent. For the purpose of this Section 3.4(b), “Carlyle Personnel” means any Managing Director or more senior investment personnel providing services to CGCIM, the Administrative Agent or any of their Affiliates who recommended or approved any investment by Carlyle Parent or CSL, directly or indirectly, in the Company or its Affiliates.

Section 3.5. Representations and Warranties. Each Member hereby makes the following representations and warranties to the Company and each other Member as of the date of such Member’s admittance to the Company.

(a) Organization and Good Standing. It is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation, and if required by law is duly qualified to conduct business and is in good standing in the jurisdiction of its principal place of business (if not formed in such jurisdiction);

(b) Due Authorization. It has full corporate, limited liability company, partnership, trust or other applicable power and authority to execute and deliver this Agreement and to perform its obligations hereunder and all necessary actions by its board of directors, shareholders, managers, members, partners, trustees, beneficiaries or other persons necessary for the due authorization, execution, delivery and performance of this Agreement by that Member have been duly taken;

(c) Binding Obligation. It has duly executed and delivered this Agreement, and this Agreement is enforceable against such Member in accordance with its terms, subject to bankruptcy, moratorium, insolvency and other laws generally affecting creditors’ rights and general principles of equity (whether applied in a proceeding in a court of law or equity);

(d) No Conflict. Its authorization, execution, delivery, and performance of this Agreement does not breach or conflict with or constitute a default under (i) such Member’s charter or other governing documents or (ii) any material obligation under any other material agreement or arrangement to which that Member is a party or by which it is bound;

(e) Securities Matters. It (i) has been furnished with such information about the Company and the Membership Interest as that Member has requested, (ii) has made its own independent inquiry and investigation into, and based thereon has formed an independent judgment concerning, the Company and such Member’s Membership Interest herein, (iii) has adequate means of providing for its current needs and possible contingencies, is able to bear the economic risks of this investment and has a sufficient net worth to sustain a loss of its entire investment in the Company in the event such loss should occur, (iv) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company, (v) is a “qualified purchaser” within the meaning of Section 2(a)(51)(A)(iv) of the Investment Company Act, and an “accredited investor” within the meaning of Regulation D under the Securities Act, and (vi) understands and agrees that its Membership Interest shall not be sold, or otherwise transferred except in accordance with the terms of this Agreement; and

(f) No Proceedings. As to each Member, there are no proceedings or investigations pending or, to the knowledge of such Member, threatened against such Member before any Government Authority asserting the illegality, invalidity or unenforceability, or seeking any determination or ruling that would affect the legality, binding effect, validity or enforceability, of this Agreement, or seeking any determination or ruling that is reasonably likely to materially and adversely affect the financial condition or operations of such Member or the performance by such Member of its obligations under this Agreement.

(g) It is in compliance with the UN Convention Against Corruption, the Corruption of Foreign Public Officials Act (Canada), as amended, the United States Foreign Corrupt Practices Act of 1977, as amended, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and any other applicable anti-bribery or anticorruption laws (together, “Anti-Corruption Laws”). It shall promptly give written notice to the other Member of any breach by such Member of any Anti-Corruption Law. It shall not cause the Company to make any investment which, to such Member’s knowledge, would constitute a breach of any Anti-Corruption Law.

(h) It shall comply and shall cause the Company to comply in all material respects with all laws applicable to the conduct of the business of the Company.

(i) There is no pending (i) SEC or other regulatory enforcement proceedings (whether federal, state, local or foreign), (ii) governmental investigation, inquiry or proceeding (whether federal, state, local or foreign) regarding material violations of applicable law or

regulations of any governmental agency, including any material violation of any federal, state, local or foreign tax law that could result in criminal prosecution, (iii) material litigation, suit or arbitration (with respect to any such material litigation relating to a Member only to the extent such material litigation is brought against such Member in a management capacity or otherwise in a fiduciary capacity), or (iv) criminal proceeding of any kind (whether federal, state, local or foreign), in each case, (x) as to each Member, brought against the Company, such Member or any entity wholly-owned by such Member, except as previously disclosed to the other Member in writing, and (y) as to CSL, brought against the Administrative Agent, except as previously disclosed to Credit Partners in writing.

(j) During the six (6) years prior to the date hereof, there were no (i) SEC or other regulatory enforcement proceedings (whether federal, state, local or foreign), (ii) governmental investigation, inquiry or proceeding (whether federal, state, local or foreign) regarding material violations of applicable law or regulations of any governmental agency, including any criminal investigation, inquiry or proceeding regarding violation of any federal, state, local or foreign tax law, or (iii) material litigation, suit or arbitration or any criminal proceeding of any kind (whether or not resulting in a conviction, an indictment, plea of nolo contendere or other disposition) (with respect to any such material litigation relating to a Member only to the extent such material litigation is brought against such Member in a management capacity or otherwise in a fiduciary capacity), in each case, (x) as to each Member, brought against the Company, such Member or any entity wholly-owned by such Member, except as previously disclosed to the other Members in writing, and (y) as to CSL, brought against the Administrative Agent, except as previously disclosed to Credit Partners in writing.

(k) As to CSL, to its knowledge, none of the Administrative Agent, CSL nor the employees providing services to the Administrative Agent or CSL is, or has been within the 12-month period preceding the date hereof:

(i) a director, officer or employee of Credit Partners or Credit Parent;

(ii) a person responsible for holding or investing the assets of Credit Partners or Credit Parent, or any director, officer or employee of the person;

(iii) a contributor within the meaning of subsection 2(1) of the Canadian Forces Superannuation Act, subsection 3(1) of the Public Service Superannuation Act or subsection 3(1) of the Royal Canadian Mounted Police Superannuation Act or a participant or former participant in the Reserve Force Pension Plan established by the Reserve Force Pension Plan Regulations;

(iv) a survivor within the meaning of subsection 2(1) of the Canadian Forces Superannuation Act, paragraph 36(1)(b) of the Reserve Force Pension Plan Regulations, subsection 3(1) of the Public Service Superannuation Act or subsection 3(1) of the Royal Canadian Mounted Police Superannuation Act;

(v) an association or union representing a person referred to in any of paragraphs (i) to (iv), or a director, an officer or an employee of that association or union;

(vi) the spouse, common-law partner or child of any Person referred to in any of paragraphs (i) to (v) or the spouse or common-law partner of that child;

(vii) a corporation that is directly or indirectly controlled by a Person referred to in any of paragraphs (i) to (vi); or

(viii) an entity in which a Person referred to in any of paragraphs (i) to (vi) has a Substantial Investment. For the purpose of this paragraph, “Substantial Investment” shall mean, (a) where a Person has an investment in an unincorporated entity, if the Person or an entity controlled by the Person beneficially owns more than 25% of the ownership interests in the unincorporated entity; and (b) where a Person has an investment in a corporation, if (i) the voting rights attached to voting shares of the corporation that are beneficially owned by the Person, or by an entity controlled by the Person, exceed 10% of the voting rights attached to all of the outstanding voting shares of the corporation, or (ii) shares of the corporation that are beneficially owned by the Person, or by an entity controlled by the person, represent ownership of more than 25% of the shareholders’ equity of the corporation.

ARTICLE 4

COMPANY CAPITAL AND INTERESTS

Section 4.1. Capital Commitments.

(a) Each Member has made an initial Capital Contribution of $1,000 in U.S. dollars to the Company (“Initial Capital Contribution”) and, as of the date hereof, a Subsequent Contribution of $216,000,000 in U.S. dollars to the Company. Each Member agrees to make additional Subsequent Contributions to the Company up to the amount of its Unfunded Capital Commitment set forth on Exhibit A attached hereto in accordance with the terms of this Agreement. Each Subsequent Contribution shall be made from time to time within five (5) business days after the date of notice from the Administrative Agent (or any other Person with the power and authority to call the Capital Commitments) specifying the amount then to be paid, or at such later date as may be specified in such notice, and the bank account of the Company to which such amount is then to be paid; provided that the capital call of any such amount shall be subject to Board Approval. Capital Contributions shall be made by all Members pro rata based on their respective Capital Commitments; provided, in the event that one or more Member is considered a Defaulting Member, then such Capital Contributions called by the Administrative Agent pursuant to this Section 4.1 shall first be paid by such Defaulting Member until the Defaulting Member has satisfied all unpaid amounts due and owing to the Company, and all remaining amounts shall then be paid by all Members pro rata based on their respective Capital Commitments. The Members agree that, within five (5) business days after the date of each

notice from the Administrative Agent (or any other Person with the power and authority to call the Capital Commitments) specifying the amount then to be paid or such later date as may be specified in such notice on which such amount is then to be paid, the Administrative Agent, on behalf of the Company shall undertake a Qualifying JV Pledge Reduction in accordance with the LSA so that, following the effectiveness of such Qualifying JV Pledge Reduction, the aggregate amount of JV Capital Pledge Amount under the LSA will be reduced to no more than (x) the aggregate amount of Capital Commitments of the Members, minus (y) the aggregate amount of Capital Commitments called to date. The Administrative Agent shall notify the Members promptly if the Administrative Agent (as defined in the LSA) refuses to agree to effect a Qualifying JV Pledge Reduction and/or a Qualifying JV Pledge Release, as the case may be.

(b) Notwithstanding anything else herein, at any time that CSL is a Pledge Defaulting Member and Credit Partners is a Pledge Non-Defaulting Member, (i) the Administrative Agent shall not call any Capital Contributions and (ii) Capital Contributions may be called by the Board.

(c) Any call of Capital Contributions shall be called by delivering to each Member a notice, substantially in the form as set forth on Exhibit B hereto.

(d) Capital Contributions which are not used for their intended purpose shall be returned to the Members within ninety (90) days after the date of receipt by the Company of such Capital Contributions in the same proportion in which made, in which case such amount shall be added back to the Unfunded Capital Commitments of the Members and may be recalled by the Company as set forth in this Article 4.

(e) A Member may suspend the Investment Period (and thus the Member’s Unfunded Capital Commitment with respect thereto) immediately upon notice to the other Member following a Cause Event with respect to such other Member. Notwithstanding the foregoing, each Member shall remain liable for such Member’s Unfunded Capital Commitment for Valid Company Purposes set forth in clauses (ii) through (vi) thereof during any suspension of the Investment Period.

(f) Following the end of the Investment Period or during the suspension of the Investment Period pursuant to Section 4.1(e), the Company shall not issue capital calls pursuant to this Section 4.1 except for Valid Company Purposes, and each Member shall remain liable for such Member’s Unfunded Capital Commitment for Valid Company Purposes set forth in clauses (ii) through (vi) thereof during any suspension or termination of the Investment Period.

(g) Notwithstanding anything else herein, in the event a Capital Contribution is called for the purpose of repaying the Mezzanine Loan, Credit Partners is under no obligation to fund such Capital Contribution unless CSL makes a concurrent Capital Contribution. Credit Partners’ failure to pay in full its Capital Contribution pursuant to this Section 4.1(g) shall not by itself be cause for any claim or action by CSL pursuant to the terms of Section 4.3 hereof.

Section 4.2. Temporary Advances. A Member or its Affiliates, with Board Approval, may make loans (“Temporary Advances”) to temporarily fund obligations for Valid Company Purposes until Capital Contributions are made by the Members as set forth in Section 4.1. Such

Temporary Advances plus interest at the Temporary Advance Rate shall be returned from any Capital Contributions by the Members under Section 4.1, with any unreturned Temporary Advances plus interest at the Temporary Advance Rate paid in accordance with Section 6.1.

Section 4.3. Defaulting Members.

(a) (x) Upon the failure of any Member (a “Defaulting Member”) to pay in full any portion of such Member’s Unfunded Capital Commitment within ten (10) days after written notice from the other Member (the “Default Date”) that such payment is overdue, the other Member (so long as it is not a Defaulting Member) (a “Non-Defaulting Member”), in its sole discretion, shall have the right to pursue one or more of the following remedies on behalf of the Company if such failure has not been cured in full within such ten-day period; provided, that, in the case of CSL, CSL shall be considered a “Defaulting Member” for purposes of this Agreement automatically if CSL fails to make such payment within ten (10) days following the date upon which such payment was due by all Members, and the “Default Date” for CSL shall be considered the 11th day following the date upon which such payment was due, or (y) on the date that a Member becomes a Pledge Defaulting Member (the “Pledge Default Date”), the Pledge Non-Defaulting Member, in its sole discretion, shall have the right to pursue one or more of the following remedies on behalf of the Company:

(i) collect such unpaid portion (and all attorneys’ fees and other costs incident thereto) by exercising and/or pursuing any legal remedy the Company may have;

(ii) upon thirty (30) days’ written notice to the Defaulting Member or the Pledge Defaulting Member, as applicable (which period may commence during the ten (10) day notice period provided above in the case of the Defaulting Member), and provided that the overdue payment has not been made, dissolve and wind down the Company in accordance with Article 9 as long as such action is not prohibited by Section 9.2(b); and

(iii) upon thirty (30) days’ written notice to the Defaulting Member or the Pledge Defaulting Member, as applicable (which period may commence during the ten (10) day notice period provided above in the case of the Defaulting Member) and if such failure has not been cured in full within such thirty (30) day period, compel the Defaulting Member or the Pledge Defaulting Member, as applicable, to sell or transfer all or a portion of its Membership Interest in whole or in part subject to the following:

(A) If the other Member notifies the Defaulting Member or the Pledge Defaulting Member, as applicable, to sell or transfer all or a part of its Membership Interest, such Defaulting Member or Pledge Defaulting Member, as applicable, shall do so within sixty (60) days after the expiration of such thirty (30) day period.

(B) Upon any failure of the Defaulting Member or the Pledge Defaulting Member, as applicable, under any circumstances, to sell or transfer all of its Membership Interests that are required to be sold within such sixty (60) day period, the Non-Defaulting Member or the Pledge Non-Defaulting Member, as

applicable, may purchase such Membership Interest or sell or transfer such Membership Interest to a third party or, subject to applicable law, to an Affiliate of a Member or the Company. The price for such sale or transfer shall be the lower of (x) the cost of such Membership Interests, and (y) the fair market value of such Membership Interests, as determined by an investment bank selected by the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, for a hypothetical sale of such Membership Interest to an unaffiliated third party willing to purchase such Membership Interest within a ninety (90) day time period; provided, however, that if no such buyer is found within such ninety (90) day period to purchase the Membership Interest of the Defaulting Member or the Pledge Defaulting Member, as applicable, at such price or a higher price, then the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, may direct the sale or transfer of the Membership Interest of the Defaulting Member or the Pledge Defaulting Member, as applicable, at a price and subject to such terms and conditions as it deems commercially reasonable in its good faith judgment and sole discretion, which terms and conditions may include the acceptance by the Defaulting Member or the Pledge Defaulting Member, as applicable, of a promissory note issued by the purchaser thereof.

(C) To the extent any amounts are owed by a Defaulting Member to a non-Defaulting Member or by a Pledge Defaulting Member to a Pledge Non-Defaulting Member, as applicable, with respect to a Default Loan, any purchase price that would otherwise be payable to the Defaulting Member or the Pledge Defaulting Member, as applicable, under this Section 4.3(a)(iii) shall instead first be paid to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, pursuant to the terms of Section 4.3(b)(iii) hereof, until each such Default Loan (and any accrued interest thereon) has been repaid in full with the remainder of such purchase price, if any, payable to the Defaulting Member or the Pledge Defaulting Member, as applicable.

Except as set forth below, the election of the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, to pursue any one of such remedies shall not be deemed to preclude such Member from pursuing any other such remedy, or any other available remedy, simultaneously or subsequently.

(b) Notwithstanding any provision of this Agreement to the contrary,

(i) a Defaulting Member or a Pledge Defaulting Member, as applicable, shall not be entitled to distributions made after the Default Date or the Pledge Default Date, as applicable, until the default is cured and any such distributions to which such Defaulting Member or Pledge Defaulting Member, as applicable, would otherwise have been entitled if such default had not occurred shall be debited against the Capital Account of the Defaulting Member or the Pledge Defaulting Member, as applicable, so as to reduce the remaining amount of the default;

(ii) the Company shall not make new Investments after the Default Date or the Pledge Default Date, as applicable, until the default is cured except as permitted pursuant to clauses (ii) through (vi) of Valid Company Purposes; and

(iii) the Non-Defaulting Member, in its or their sole discretion, may fund all or any portion of the defaulted amount on behalf of the Defaulting Member with notice to the Board and to the other Members. The Members agree and acknowledge that any amount so funded by the Non-Defaulting Member shall be treated as a loan from the Non-Defaulting Member to the Defaulting Member (a “Default Loan”), the proceeds of which are used by the Defaulting Member to make a Capital Contribution to the Company which, if in a sufficient amount, may cure a related default by such Defaulting Member. A Default Loan shall (A) bear interest from the date of such funding until repaid by the Defaulting Member or the Pledge Defaulting Member, as applicable, at a rate equal to 20% per annum, (B) be pre-payable by the Defaulting Member or the Pledge Defaulting Member, as applicable, at any time and (C) be fully recourse to the Defaulting Member or the Pledge Defaulting Member, as applicable. Until such time that there is no outstanding balance owed under any Default Loan (including any accrued interest thereon), (x) any amounts that would otherwise be distributable to the Defaulting Member or the Pledge Defaulting Member, as applicable, under Section 6.1(b) hereof shall instead be distributed to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, and (y) any purchase price payable to the Defaulting Member or the Pledge Non-Defaulting Member, as applicable, in connection with any sale of its or their respective Membership Interests in the Company shall first be paid to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, and in each case of (x) and (y), as repayment of the Default Loan(s) until the repayment in full of such Default Loan(s) (including any accrued interest thereon) proportionate to the amount of Default Loan(s) so extended by the Non-Defaulting Member to such Defaulting Member or by the Pledge Non-Defaulting Member to such Pledge Defaulting Member, as applicable. Any amounts distributed to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, pursuant to the previous sentence shall be treated for all purposes of this Agreement and for U.S. federal, state and local income tax purposes as having been made by the Company to the Defaulting Member or the Pledge Defaulting Member, as applicable, notwithstanding the Company’s distribution of such amounts to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, and any amounts distributed or payable to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, pursuant to the previous sentence shall reduce the amounts owed to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, under the related Default Loan, first as to interest and then as to principal.

(iv) In the event that (I) the Collateral Agent calls capital from a Member pursuant to the Pledge Agreement, (II) one Member pays in full all of such capital call (the “Pledge Non-Defaulting Member”) and (III) the other Member either (x) fails to pay in full all or any portion of a concurrent call of capital by the Collateral Agent or (y) was not required by the Collateral Agent to make a concurrent Capital Contribution (in either case, a “Pledge Defaulting Member”), then at the sole election of the Pledge

Non-Defaulting Member, the Pledge Agreement Shortfall Amount shall be treated as a Default Loan. Notwithstanding the foregoing:

(A) if the Pledge Non-Defaulting Member does not elect to treat such called capital as a Default Loan within five (5) days of paying the Pledge Agreement Shortfall Amount, then additional Membership Interests in the Company will be issued to the Pledge Non-Defaulting Member such that each Member’s percentage ownership of the Company is equal to the aggregate Capital Contributions made by such Member divided by the aggregate Capital Contributions made by both Members; and

(B) if the Pledge Non-Defaulting Member is Credit Partners, and Credit Partners does not elect to treat such called capital as a Default Loan within five (5) days of paying the Pledge Agreement Shortfall Amount, then:

(1) (x) the interest earned on the Mezzanine Loan shall be added to the principal amount of such Mezzanine Loan (such principal, the “PIK Principal”), (y) notwithstanding the maturity date provided in the Mezzanine Loan Agreement, the Mezzanine Loan shall be payable on the date that is six (6) months after the Final Maturity Date under the LSA, and (z) at the election of Credit Partners, CSL will irrevocably cancel the PIK Principal and such cancellation will be deemed to be a Capital Contribution by CSL for all purposes hereunder (it being understood that CSL shall execute any and all documentation in connection with such deemed Capital Contribution). In the event the PIK Principal is canceled pursuant to this Section 4.3(b)(iv)(B), additional Membership Interests in the Company will be issued to CSL such that each Member’s percentage ownership of the Company is equal to the aggregate Capital Contributions made by such Member divided by the aggregate Capital Contributions made by both Members;

(2) notwithstanding Section 7.2 hereof or any other provision in this Agreement to the contrary, Credit Partners shall have the right to elect, designate or appoint one (1) additional Board Member, upon notice to all Board Members; and

(3) notwithstanding Section 7.4 hereof or any other provision in this Agreement to the contrary, (i) any act or decision done or made by the Board shall require the approval of a majority of Board Members and (ii) a quorum of the Board shall require at least four (4) Board Members as long as at least three (3) Board Members are present that were elected, designated or appointed by Credit Partners; provided that, without limiting Section 7.3 hereof, all Board Members shall be given notice of any meeting of the Board (including the agenda of such meeting which shall be prepared in good faith and with reasonable efforts to describe all actions to be taken by the Board at such meeting); and

(4) notwithstanding Section 7.6 hereof or any other provision in this Agreement to the contrary, Credit Partners shall have the right to elect, designate or appoint one (1) additional Investment Committee Member, upon notice to all Investment Committee Members; and

(5) notwithstanding Section 7.8 hereof or any other provision in this Agreement to the contrary, (i) any act or decision done or made by the Investment Committee shall require the approval of a majority of Investment Committee Members and (ii) a quorum of the Investment Committee shall require at least three (3) Investment Committee Members as long as at least two (2) Investment Committee Members are present that were elected, designated or appointed by Credit Partners provided that, without limiting Section 7.7 hereof, all Investment Committee Members shall be given notice of any meeting of the Investment Committee (including the agenda of such meeting, which shall be prepared in good faith and with reasonable efforts to describe all actions to be taken by the Board at such meeting).

Section 4.4. Membership Interest or Withdrawals. No Member shall be entitled to receive any interest on any Capital Contribution to the Company. Except as otherwise specifically provided herein, no Member shall be entitled to withdraw any part of its Capital Contributions or Capital Account balance.

Section 4.5. Admission of Additional Members.

(a) The Members may, with Board Approval, (i) admit additional Members upon terms approved by Board Approval, or (ii) permit existing Members to subscribe for additional Membership Interests in the Company; provided, however, that, subject to Section 4.3(b)(iv), CSL shall at all times retain a Proportionate Share of at least 50%; and provided, further, that the admission of Substituted Members shall be governed by Section 8.1.

(b) Each additional Member shall execute and deliver a written instrument satisfactory to the existing Members and the Board whereby such Member becomes a party to this Agreement and any other documents required by the existing Members. Each such additional Member shall thereafter be entitled to all the rights and subject to all the obligations of Members as set forth herein. Upon the admission of or the increase in the Membership Interest of any Member as herein provided, the Administrative Agent is hereby authorized to update the Member List, as required, to reflect such admission or increase.

ARTICLE 5

ALLOCATIONS

Section 5.1. Capital Accounts.

(a) An individual capital account (a “Capital Account”) shall be maintained for each Member in accordance with Treasury Regulation § 1.704-1(b)(2)(iv). Without limiting the foregoing, each Member’s Capital Account shall be credited with the sum of (i) (A) the

amount of cash and (B) the fair value of Investments transferred by such Member to the Company as Capital Contributions, net of any proceeds such Member receives from the Company in consideration of contributing such Investments, and (ii) the amount of all income (or items thereof) credited to the account of such Member pursuant to Sections 5.2 and 5.3. Each Member’s Capital Account shall be reduced by the sum of (x) the cash and the fair value of property distributed to such Member and (y) allocations to it pursuant to Article 5 of deductions or loss (or items thereof). The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the provisions of Treasury Regulation § 1.704-1(b)(2) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

(b) Profit or Loss shall be allocated among Members as of the end of each quarter of the Company; provided that Profit or Loss shall also be allocated at the end of (i) each period terminating on the date of any withdrawal by any Member, (ii) each period terminating immediately before the date of any admission or increase in Capital Commitment of any Member, (iii) each period terminating immediately before the date of any change in the relative Capital Account balances of the Members, (iv) the liquidation of the Company, or (v) any period which is determined by Board Approval to be appropriate.

(c) The Capital Accounts of the Members shall be increased or decreased in accordance with Treasury Regulation § 1.704-1(b)(2)(iv)(f) to reflect a revaluation of the property of the Company on the Company’s books as of the following times: (i) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of the Company assets as consideration for an interest in the Company; and (iii) the liquidation of the Company within the meaning of Treasury Regulation § 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clause (i) and clause (ii) of this sentence shall be made only if the Board reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company.

Section 5.2. General Allocations. Profit and Loss of the Company for each Fiscal Year shall be allocated among the Members in a manner such that, as of the end of such Fiscal Year and taking into account all prior allocations of Profit and Loss of the Company and all distributions made by the Company through such date, the Capital Account of each Member is, as nearly as possible, equal to the distributions that would be made to such Member if the Company were dissolved, its affairs wound up and assets sold for cash equal to their book value, all the Company liabilities were satisfied (limited with respect to each nonrecourse liability to the adjusted tax basis of the assets securing such liability), and the net assets of the Company were distributed immediately after such allocation.

Section 5.3. Special Allocations. Notwithstanding any of the provisions set forth above to the contrary, the following special allocations shall be made in the following order:

(a) Minimum Gain Chargeback. If there is a net decrease in the Company Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of the Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in

an amount equal to such Member’s share of the net decrease in the Company Minimum Gain, determined in accordance with Treasury Regulation § 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations § 1.704-2(f)(6) and § 1.704-2(j)(2). This Section 5.3(a) is intended to comply with the minimum gain chargeback requirement in Treasury Regulation § 1.704-2(f) and shall be interpreted consistently therewith.

(b) Member Minimum Gain Chargeback. Notwithstanding any other provision of this Article 5, if there is a net decrease in Member Minimum Gain attributable to Member Nonrecourse Debt during any Fiscal Year, each Member which has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations § 1.704-2(i)(5), shall be specially allocated items of the Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulation § 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Treasury Regulations § 1.704-2(i)(4) and § 1.704-2(j)(2)(ii). This Section 5.3(b) is intended to comply with the minimum gain chargeback requirement in Treasury Regulation § 1.704-2(i)(4) and shall be interpreted consistently therewith.

(c) Qualified Income Offset. In the event that any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations § 1.704 1(b)(2)(ii)(d)(4), (5) or (6), items of the Company income and gain shall be specifically allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 5.3(c) shall be made if and only to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article 5 have been tentatively made as if this Section 5.3(c) were not applicable. The foregoing provision is intended to comply with Treasury Regulations § 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

(d) Gross Income Allocation. In the event that any Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year, then each such Member shall be specially allocated items of the Company income and gain as quickly as possible, provided that an allocation pursuant to this Section 5.3(d) shall be made only if and to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article 5 have been tentatively made as if Section 5.3(c) and this Section 5.3(d) were not applicable.

(e) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year will be allocated to the Members in the same manner in which such items would have been allocated pursuant to Section 5.2.

(f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal Year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Treasury Regulations § 1.704-2(i).

(g) Code Section 754 Adjustment. To the extent an adjustment to the adjusted tax basis of any the Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulation § 1.704 1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts as the result of a distribution to a Member in complete liquidation of its interest in the Company, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Treasury Regulations Section.

(h) Tax Allocations. Subject to Section 704(c) of the Code, for U.S. federal, state and local income tax purposes, all items of the Company income, gain, loss, deduction, credit and any other allocations not otherwise provided for shall be allocated among the Members in the same manner as the corresponding item of income, gain, loss or deduction was allocated pursuant to the preceding paragraphs of this Article 5.

(i) Section 704(c) Allocations. In accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Company, or any property owned by the Company at the time of any revaluation of the Company’s assets pursuant to Section 5.1(c), shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted tax basis of such property to the Company for federal income tax purposes and its fair market value at the time of contribution or revaluation. Allocations pursuant to this Section 5.3(i) are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Profit, Loss or other items or distributions

(j) Notwithstanding anything to the contrary contained in this Agreement, in the event that the Company realizes cancellation of indebtedness income (“COD Income”) with respect to all or any portion of the Mezzanine Loan as a result of the cancellation of the PIK Principal, such COD Income shall be specially allocated to CSL.

Section 5.4. Changes of Membership Interests. For purposes of allocating Profit or Loss for any fiscal year or other fiscal period between any permitted transferor and transferee of a Membership Interest, or between any Members whose relative Membership Interests have changed during such period, or to any withdrawing Member that is no longer a Member in the Company, the Company shall allocate according to any method allowed by the Code and selected by Board Approval. Distributions with respect to a Membership Interest in the Company shall be payable to the owner of such Membership Interest on the date of distribution subject to the provisions of this Agreement. For purposes of determining the Profit or Loss allocable to or the distributions payable to a permitted transferee of a Membership Interest in the Company or to a Member whose Membership Interest has otherwise increased or decreased,

Profit or Loss allocations and distributions made to predecessor owners with respect to such transferred Membership Interest or increase of Membership Interest shall be deemed allocated and made to the permitted transferee or other holder.

Section 5.5. Income Taxes and Tax Capital Accounts. Each item of income, gain, loss, deduction or credit shall be allocated in the same manner as such item is allocated pursuant to Section 5.2.

ARTICLE 6

DISTRIBUTIONS

Section 6.1. General.

(a) To the extent of available cash and cash equivalents, the Company shall make distributions quarterly in an amount equal to the investment company taxable income and net capital gains (each as computed under Sub-chapter M of the Code) earned in the preceding quarter, shared among the Members pro rata based on their respective Membership Interests; provided that the amount of any such distribution may be reduced as provided by Section 6.2 and Section 6.3, including, without limitation, for the purpose of reinvesting proceeds received from Investments as set forth in Section 6.3. Available cash and cash equivalents shall exclude Reserved Amounts and amounts that are likely to be used for Valid Company Purposes within a 60 day period.

(b) Except as otherwise provided in this Article 6 or Section 9.3, distributions shall be shared among the Members as set forth in this Section 6.1(b). The Members, with Board Approval, may determine to make a distribution in addition to that required by Section 6.1(a) hereof from available cash or cash equivalents received from one or more Investments (whether from principal repayment or otherwise and after reduction as provided by Section 6.2 and Section 6.3). Any such distribution shall be shared among the Members as follows:

(i) First, to pay any outstanding Temporary Advances and any interest accrued thereon;

(ii) Second, to the Members in respect of any accrued and unpaid interest on their Member Loans in proportion to the outstanding balances of such Member Loans;

(iii) Third, to the Members in respect of any unpaid principal amount of their Member Loans in proportion to the outstanding balance of such Member Loans; and

(iv) Fourth, to the Members as distributions in respect of their Membership Interests in the Company in proportion to their respective Capital Account balances.

Notwithstanding anything to the contrary in the foregoing, to the extent any amounts are owed by a Defaulting Member to a Non-Defaulting Member or by a Pledge Defaulting Member to a Pledge Non-Defaulting Member, as applicable, with respect to a Default Loan, any amounts

that would otherwise be distributable to the Defaulting Member or the Pledge Defaulting Member, as applicable, under Sections 6.1(b)(ii), (iii) or (iv) shall instead be distributed to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, pursuant to the terms of Section 4.3(b)(iii).

(c) The Board may determine that any portion of distributions made by the Company to a Member shall represent a return of such Member’s Capital Contributions to the Company (such amount, “Returned Capital”).

Section 6.2. Withholding.

(a) The Company may withhold from any distribution to any Member any amount which the Company has paid or is obligated to pay in respect of any withholding or other tax, including, without limitation, any interest, penalties or additions with respect thereto, imposed on any interest or income of or distributions to such Member, and such withheld amount shall be considered an interest payment or other distribution, as the case may be, to such Member for purposes hereof. If no payment is then being made to such Member in an amount sufficient to pay the Company’s withholding obligation, any amount which the Company is obligated to pay shall be deemed an interest-free advance from the Company to such Member, payable by such Member by withholding from subsequent distributions or within ten (10) days after receiving written request for payment from the Company.

(b) If a Member delivers to the Company a properly executed withholding tax exemption certificate (or such other form as the Internal Revenue Service or the applicable foreign or state taxing authority may require) providing for a complete exemption from withholding tax, the Company shall not withhold from distributions (or with respect to such allocations) covered by such exemption certificate.

Section 6.3. Reserves; Certain Limitations; Distributions in Kind. Notwithstanding the foregoing provisions:

(a) The Company may withhold from any distribution a reasonable reserve which the Members, with Board Approval, determine to be appropriate for working capital of the Company or to discharge costs, Expenses and liabilities of the Company (whether or not accrued or contingent), or otherwise to be in the best interests of the Company for any Valid Company Purpose. Any part or all of such reserved amount (“Reserved Amount”) that is released from reserve (other than to make payments on account of a purpose for which the reserve was established) shall be distributed to the Members in accordance with Section 6.1 and Section 6.2.

(b) During the Investment Period, amounts received by the Company with respect to the payment of principal or return of capital may be retained and used, or reserved to be used, to make any Investment.

(c) In no event shall the Company be required to make a distribution to the extent that it would (i) render the Company insolvent, or (ii) violate Section 18-607(a) of the Act.

(d) No part of any distribution shall be paid to any Member from which there is due and owing to the Company, at the time of such distribution, any amount required to be

paid to the Company pursuant to Article 4. Any such withheld distribution shall (i) be paid to such Member, without interest, when all past due installments of such Member’s Capital Commitment have been paid in full by such Member or (ii) be applied against the past due amounts under such Member’s Capital Commitment.

(e) The Company shall not distribute Illiquid Securities other than with Board Approval. Distributions of securities and of other non-cash assets of the Company other than upon the dissolution and liquidation of the Company shall only be made pro rata to all Members (in proportion to their respective shares of the total distribution) with respect to each security or other such asset distributed. Securities listed on a national securities exchange that are not restricted as to transferability and unlisted securities for which an active trading market exists and that are not restricted as to transferability shall be valued in the manner contemplated by Section 10.5 as of the close of business on the day preceding the distribution, and all other securities and non-cash assets shall be valued as determined in the last valuation made pursuant to Section 10.5.

ARTICLE 7

MANAGEMENT OF COMPANY

Section 7.1. Management Generally.

(a) The management of the Company and its affairs shall be vested in the Board, which shall act as the “manager” of the Company for the purposes of the Act. Unless otherwise provided herein, all consents, approvals, votes, waivers or other decisions to be made collectively by the Members or the Company shall require Board Approval. Matters requiring Board Approval are set forth in further detail in Exhibit F hereto, which is incorporated by reference herein.

(b) The Company and the Members entered into the Administration Agreement with the Administrative Agent, pursuant to which certain administrative functions are delegated to the Administrative Agent. The Administration Agreement is hereby approved by the Members, provided that material amendments thereto are subject to Board Approval. The function of the Administrative Agent shall be non-discretionary and administrative only. The Company shall provide the Board with copies of all notices to the Company from the Administrative Agent. For the avoidance of doubt, with Board Approval, the Administrative Agent is authorized to enter into sub-administration agreements at the expense of the Company.

Section 7.2. Board.

(a) Subject to matters requiring Board Approval, the business and affairs of the Company shall be managed by or under the direction of the Board designated by the Members.

(b) Subject to Section 4.3(b) hereof:

(i) the Members may determine at any time by mutual agreement the number of Board Members to constitute the Board; and

(ii) the authorized number of Board Members may be increased or decreased by the Members at any time by mutual agreement, upon notice to all Board Members. The initial number of Board Members shall be six (6), and each Member shall have the right to elect, designate or appoint three (3) Board Members and their respective successors. Each Board Member elected, designated or appointed by a Member shall hold office until a successor is elected and qualified or until such Board Member’s earlier death, resignation, expulsion or removal. The number of Board Members that shall constitute the Board may be changed from time to time by Board Approval.

(c) A Board Member need not be a Member, but shall have the skill and experience necessary to act as a member of the Board.

(d) Subject to matters requiring Board Approval, the Board shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise. The Board shall have the power to ratify matters requiring Board Approval and any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein. The Board has the authority to bind the Company.

Section 7.3 Meetings of the Board. Subject to Section 4.3(b) hereof, the Board may hold meetings, both regular and special, within or outside the State of Delaware. Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board. Special meetings of the Board may be called by a Board Member on not less than one day’s notice to each Board Member by telephone, facsimile, mail, telegram, email or any other means of communication, with such notice stating the place, date and hour of the meeting (and the means by which each Board Member may participate by telephone conference or similar communications equipment in accordance with Section 7.5) and the purpose or purposes for which such meeting is called. Special meetings shall be called by a Board Member in like manner and with like notice upon the written request of any one or more of the Board Members. Attendance of a Board Member at any meeting shall constitute a waiver of notice of such meeting, except where a Board Member attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 7.4. Quorum; Acts of the Board.

(a) Subject to Section 4.3(b) hereof:

(i) for so long as the Board is comprised of six (6) Board Members, at all meetings of the Board, a quorum requires at least four (4) Board Members as long as at least two (2) Board Members are present that were elected, designated or appointed by each Member; and

(ii) any act or decision done or made by the Board shall require the unanimous approval of all of the Board Members present at any meeting duly held at which a quorum is present.

(b) Notwithstanding Section 7.4(a), (i) in the event that a Non-Defaulting Member or a Pledge Non-Defaulting Member, as applicable, has the right to pursue one or more of the remedies on behalf of the Company pursuant to Section 4.3 herein, then all Board Members designated to the Board by the Defaulting Member or the Pledge Non-Defaulting Member, as applicable, shall recuse themselves from a vote or consent to approve such act pursued by the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, under Section 4.3 (and shall not be counted for purposes of determining whether or not a quorum has been established), and (ii) if the Administrative Agent intentionally materially breaches the Administration Agreement, and, to the extent such material breach can be cured, following a thirty (30) day cure period such material breach remains, then all Board Members designated to the Board by CSL shall recuse themselves from any vote or consent to approve the removal of the Administrative Agent, the termination of the Administration Agreement, and the selection and appointment of a new administrative agent in connection therewith (and such Board Members shall not be counted for purposes of determining whether or not a quorum has been established) and Credit Partners shall be permitted, on behalf of the Company, to send notice to the Administrative Agent of any such removal or termination. The Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, shall give prompt notice to the Defaulting Member or the Pledge Defaulting Member, as applicable, of any actions taken pursuant to the immediately preceding sentence (if such Defaulting Member or the Pledge Defaulting Member, as applicable, is not present). If a quorum shall not be present at any meeting of the Board, the Board Members present at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

(c) Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing (including, without limitation, by email), and the writing or writings are filed with the minutes of proceedings of the Board or committee, as the case may be.

Section 7.5. Electronic Communications. Members of the Board, or any committee designated by the Board, may participate in meetings of the Board, or any committee, by means of telephone conference or similar communications equipment that allows all persons participating in the meeting to hear each other, and such participation in a meeting shall constitute presence in person at the meeting. If all the participants are participating by telephone conference or similar communications equipment, the meeting shall be deemed to be held at the principal place of business of the Company.

Section 7.6. Investment Committee.

(a) Subject to Section 4.3(b) hereof:

(i) the Members shall appoint an Investment Committee initially comprised of four (4) Investment Committee Members. Each Member shall have the right to elect, designate or appoint two (2) Investment Committee Members and their respective successors; and

(ii) the authorized number of Investment Committee Members may be increased or decreased by the Members at any time by mutual agreement, upon notice to all Investment Committee Members and Board Members, but the authorized number of Investment Committee Members may not be decreased to below two (2) and shall be proportionate to each Member. Each Investment Committee Member elected, designated or appointed by a Member shall hold office until a successor is elected and qualified or until such Investment Committee Member’s earlier death, resignation, expulsion or removal by the Member that appointed such Investment Committee Member.

(b) An Investment Committee Member need not be a Board Member, but shall have the skill and experience necessary to act as a member of the Investment Committee.

(c) Matters requiring Investment Committee Approval are set forth in further detail in Exhibit G hereto, which is incorporated by reference herein.

Section 7.7. Meetings of the Investment Committee. The Investment Committee may hold meetings, both regular and special, within or outside the State of Delaware. Regular meetings of the Investment Committee may be held without notice at such time and at such place as shall from time to time be determined by the Investment Committee. Special meetings of the Investment Committee may be called by an Investment Committee Member on not less than one day’s notice to each Investment Committee Member by telephone, facsimile, mail, telegram, email or any other means of communication, with such notice stating the place, date and hour of the meeting (and the means by which each Investment Committee Member may participate by telephone conference or similar communications equipment in accordance with Section 7.5) and the purpose or purposes for which such meeting is called. Special meetings shall be called by an Investment Committee Member in like manner and with like notice upon the written request of any one or more of the Investment Committee Members. Attendance of an Investment Committee Member at any meeting shall constitute a waiver of notice of such meeting, except where an Investment Committee Member attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.

Section 7.8. Quorum of the Investment Committee.

(a) Subject to Section 4.3(b) hereof:

(i) for so long as the Investment Committee is comprised of four (4) Investment Committee Members, at all meetings of the Investment Committee, a quorum requires at least two (2) Investment Committee Members as long as at least one (1) Investment Committee Member is present that was designated or appointed by each Member.

(ii) Any act or decision done or made by the Investment Committee shall require the unanimous approval of all of the Investment Committee Members present at any meeting duly held at which a quorum is present.

(b) If a quorum shall not be present at any meeting of the Investment Committee, the Investment Committee Members present at such meeting may adjourn the

meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 7.9. Committees of Board Members.

(a) The Board may, by Board Approval, designate one or more committees, each committee to consist of one or more of the Board Members of the Company; provided that, unless otherwise agreed by the Members, the composition of Board committees shall be proportionate to the designation rights of each Member to designate persons to the Board and the quorum requirements of all committees shall be consistent with the quorum requirements for the meetings of the Board. The Board, by Board Approval, may designate one or more Board Members as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee; provided, that, for the avoidance of doubt, any such Board Member so designated as an alternate must serve as an alternate for a member of such committee that was designated by the same Member that designated the alternate.

(b) In the absence or disqualification of a member of a committee, the members thereof present at any meeting and not disqualified from voting, whether or not such members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member; provided that at least one committee member designated by each Member is present and voting.

(c) Any such committee, to the extent provided in the resolution of the Board, and subject to, in all cases, matters requiring Board Approval or Investment Committee Approval (other than those matters expressly delegated to such committee by the Board), shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.

Section 7.10. Compensation of Board Members; Expenses. The Board Members will not receive any compensation. However, the Board Members shall be reimbursed for their reasonable out-of-pocket expenses, if any, of attendance at meetings of the Board.

Section 7.11. Removal of Board Members. Unless otherwise restricted by law, any Board Member may be removed or expelled, with or without cause, at any time by the Member that elected, designated or appointed such Board Member, and any vacancy caused by any such removal or expulsion may be filled solely by action of such Member.

Section 7.12. Board as Agent. To the extent of its powers set forth in this Agreement, the Board is the manager of the Company for the purpose of the Company’s business, and the actions of the Board taken in accordance with such powers set forth in this Agreement shall bind the Company. Notwithstanding the last sentence of Section 18-402 of the Act, except as provided in this Agreement or in a resolution of the Board, neither a Member nor a Board Member may bind the Company.

Section 7.13. Officers.

(a) Except as otherwise provided in this Agreement, the Board shall have the power and authority to appoint such officers that the Board deems appropriate, and to grant to such officers its rights and powers to manage and control the business and affairs of the Company, including delegating such rights and powers to the officers. The Board may authorize any officer to enter into any document on behalf of the Company, perform the obligations of the Company thereunder, and perform any action on behalf of the Company. Notwithstanding the foregoing, the Board shall not have the power and authority to delegate any rights or powers (i) requiring Board Approval, Investment Committee Approval or otherwise requiring the approval of the Members or (ii) customarily requiring the approval of the managing member of a Delaware limited liability company.

(b) The initial officers of the Company shall be designated by the Board. The additional or successor officers of the Company shall be chosen by the Board and shall consist of at least a President, a Secretary and a Treasurer. The Board may also choose other officers in its sole discretion. Any number of offices may be held by the same person. The officers of the Company shall hold office until their successors are chosen and qualified. Any officer may be removed at any time, with or without cause, by the affirmative vote of a majority of the Board. Any vacancy occurring in any office of the Company shall be filled by the Board.

(c) No officer of the Company shall receive or be entitled to receive any salary or compensation for services performed by such officer to the Company; provided, that such officers shall be reimbursed for all reasonable costs and expenses incurred in connection with the ordinary course duties of such officer on behalf of the Company.

Section 7.14. Officers as Agents. The officers, to the extent of their powers set forth in this Agreement or otherwise vested in them by action of the Board, not inconsistent with this Agreement, are agents of the Company for the purpose of the Company’s business, and the actions of the officers taken in accordance with such powers shall bind the Company.

Section 7.15. Duties of Board, Board Members and Officers. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY ELSEWHERE IN THIS AGREEMENT, TO THE EXTENT THAT, AT LAW OR IN EQUITY, THE BOARD, A BOARD MEMBER, THE INVESTMENT COMMITTEE, AN INVESTMENT COMMITTEE MEMBER, OFFICERS OF THE COMPANY OR ANY MEMBER HAS ANY DUTIES (FIDUCIARY OR OTHERWISE) AND LIABILITIES RELATING THERETO TO THE COMPANY OR ANY OTHER MEMBER OF THE COMPANY, (A) THE BOARD, A BOARD MEMBER, THE INVESTMENT COMMITTEE, AN INVESTMENT COMMITTEE MEMBER, OFFICERS OF THE COMPANY OR ANY MEMBER ACTING IN GOOD FAITH PURSUANT TO THE TERMS OF THIS AGREEMENT SHALL NOT BE LIABLE TO THE COMPANY OR THE OTHER MEMBERS FOR ACTIONS TAKEN BY THE BOARD, A BOARD MEMBER, THE INVESTMENT COMMITTEE, AN INVESTMENT COMMITTEE MEMBER, OFFICERS OF THE COMPANY OR ANY MEMBER OR ANY OF THEIR AFFILIATES IN GOOD FAITH RELIANCE UPON THE PROVISIONS OF THIS AGREEMENT AND (B) THE DUTIES (FIDUCIARY OR OTHERWISE) OF THE BOARD, A BOARD MEMBER, THE INVESTMENT COMMITTEE, AN INVESTMENT COMMITTEE MEMBER, OFFICERS OF

THE COMPANY OR ANY MEMBER ARE INTENDED TO BE MODIFIED AND LIMITED TO THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT, AND NO IMPLIED COVENANTS, FUNCTIONS, RESPONSIBILITIES, DUTIES, OBLIGATIONS OR LIABILITIES SHALL BE READ INTO THIS AGREEMENT, OR OTHERWISE EXIST AGAINST THE BOARD, A BOARD MEMBER, THE INVESTMENT COMMITTEE, AN INVESTMENT COMMITTEE MEMBER, OFFICERS OF THE COMPANY OR ANY MEMBER.

Section 7.16. Reliance by Third Parties. Notwithstanding any other provision of this Agreement, any contract, instrument or act on behalf of the Company by a Member, a Board Member, an officer or any other Person acting pursuant to Board Approval, shall be conclusive evidence in favor of any third party dealing with the Company that such Person has the authority, power and right to execute and deliver such contract or instrument and to take such act on behalf of the Company. This Section 7.16 shall not be deemed to limit the liabilities and obligations of such Person to seek Board Approval as set forth in this Agreement.

Section 7.17. Members’ Outside Transactions; Investment Opportunities; Time and Attention.

(a) Board Members, Investment Committee Members and officers shall devote such time as he or she determines in his or her sole discretion is necessary to diligently administer the activities and affairs of the Company, but shall not be obligated to spend full time or any specific portion of their time to the activities and affairs of the Company.

(b) The investment adviser of CSL and its Affiliates may manage or administer other investment funds and other accounts with similar or dissimilar mandates, and may be subject to the provisions of the Investment Company Act, including, without limitation, Section 57 thereof, and the Investment Advisers Act of 1940, as amended, and the rules, regulations and interpretations thereof, with respect to the allocation of investment opportunities among such other investment funds and other accounts (the “Allocation Requirements”). Except for any Allocation Requirement that may be applicable to the Company, a Member shall not be obligated to offer any Investment opportunity, or portion thereof, to the Company. Notwithstanding anything to the contrary in the foregoing, and subject to Section 7.17(e), during the Investment Period, CSL and its Affiliates that are controlled, managed or advised by CGCIM agree to refer all investment opportunities that are Qualified Investments to the Company.

(c) Subject to the provisions of this Section 7.17 and other provisions of this Agreement, each of the Members, Board Members, officers and each of their respective Affiliates and their respective owners, principals, shareholders, members, directors, officers, employees and agents may engage in, invest in, participate in or otherwise enter into other business ventures of any kind, nature and description, individually and with others, including, without limitation, the formation and management of other investment funds with or without the same or similar purposes as the Company, and the ownership of and investment in assets, and neither the Company nor any other Member shall have any right in or to any such activities or the income or profits derived therefrom. In connection therewith, subject to the provisions of Section 7.17(e) and other provisions of this Agreement, it is expressly agreed that in no event shall it be considered a violation of this Agreement (whether under Section 7.17(a) with respect

to time devotion or under any other section herein with respect to investment allocations or otherwise) for a Member or any of its Affiliates or their respective owners, principals, shareholders, members, directors, officers, employees and agents to continue to engage in such investments and transactions nor shall the provisions of this Agreement in any way limit or prohibit any future investments or transactions by a Member or any of its Affiliates (or any of their investment managers or sponsors) or their respective owners, principals, shareholders, members, directors, officers, employees and agents directly or with third parties or in any way constrain the ability of a Member or any of its Affiliates (or any of their investment managers or sponsors) or their respective owners, principals, shareholders, members, directors, officers, employees and agents to manage and invest their assets.

(d) For the avoidance of doubt, Credit Partners (or its Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their respective permitted transferees will have no duty (contractual or otherwise) to (1) communicate or present any Investment opportunities to the Company or (2) refrain from pursuing, directly or indirectly, any Investment opportunities for itself, and directing any such opportunity to another Person; provided that Section 7.17(d)(2) shall not apply to, and Credit Partners and its Affiliates shall not pursue or direct any Qualified Investment opportunity if such Qualified Investment opportunity was presented to the Investment Committee, unless (A) such Qualified Investment opportunity was first identified by or to Credit Partners or Affiliates of Credit Partners independently of the personnel of CSL or CGCIM (in which case Credit Partners shall notify the Investment Committee and CSL as soon as practicable), or (B) the Company fails to consummate such Qualified Investment opportunity other than due to the action or inaction on the part of Credit Partners or its Affiliates. Notwithstanding the foregoing, Credit Partners shall be permitted to direct or pursue Qualified Investment opportunities approved for the Company by the Investment Committee with the prior approval of the Investment Committee. The Company, on its own behalf and on behalf of its respective Affiliates, hereby renounces and waives any right to require Credit Partners (or its Affiliates, associated investment funds, portfolio companies or employees, as applicable) and their permitted transferees to act in a manner inconsistent with the provisions of this Section 7.17(d). For purposes of the foregoing, (x) any external investment managers with discretion or authorization who manages debt investments on behalf of Credit Partners or its Affiliates and (y) any other investment team within Credit Parent or its Affiliates (other than the U.S. private debt employees of Credit Parent’s Affiliates) will be excluded from the foregoing and any limitations contained therein, unless, in the case of (x) or (y), Credit Partners or any of its Affiliates acting on Credit Partners behalf, shares any confidential information regarding the potential Investment opportunity with such investment team.

(e) Notwithstanding the foregoing provisions of this Section 7.17 and other provisions of this Agreement, during the Investment Period, neither Carlyle Parent or its Affiliates may, without Credit Partners’ prior written consent, enter into the formation and management of any investment fund, investment vehicle or account that is primarily engaged in and principally marketed as having an investment mandate that substantially overlaps with Qualified Investments until at least 75% of Capital Commitments have been contributed to the Company.

(f) Notwithstanding the foregoing provisions of this Section 7.17 and other provisions of this Agreement, the Members agree that the Company and one or more of the

Members may co-invest in investment opportunities where appropriate, subject to the approval of the board of directors of CSL and in accordance to the terms of this Agreement; provided that, to the extent that the demand from the Members and the Company is higher than the total Investment opportunity available to the Members and the Company, such Investment opportunity shall be allocated in a manner such that the Company will not receive a smaller allocation than any Member participating in such investment unless approved by the Investment Committee.

Section 7.18. Indemnification.

(a) Subject to the limitations and conditions as provided in this Section 7.18, each Board Member and each Member and its employees, directors, officers, owners, principals, shareholders, members, and partners who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or arbitrative or in the nature of an alternative dispute resolution in lieu of any of the foregoing (other than any of the foregoing between the two Members, hereinafter a “Proceeding”), or any appeal in such a Proceeding or any inquiry or investigation that could lead to such a Proceeding, by reason of the fact that such Person, is or was a Board Member, an officer or representative or agent of the Company, a Member or an employee, director, officer, owner, principal, shareholder, member, or partner of a Member, shall be indemnified by the Company to the fullest extent permitted by applicable law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment) against all liabilities and expenses (including, without limitation, judgments, penalties (including, without limitation, excise and similar taxes and punitive damages), losses, fines, settlements and reasonable expenses (including, without limitation, reasonable attorneys’ and experts’ fees)) actually incurred by such Person in connection with such Proceeding, appeal, inquiry or investigation (each a “Harm”), unless such Harm shall have been primarily the result of gross negligence, fraud or intentional misconduct by the Person seeking indemnification hereunder, in which case such indemnification shall not cover such Harm to the extent resulting from such gross negligence, fraud or intentional misconduct. Indemnification under this Section 7.18 shall continue as to a Person who has ceased to serve in the capacity which initially entitled such Person to indemnity hereunder. The rights granted pursuant to this Section 7.18 shall be deemed contract rights, and no amendment, modification or repeal of this Section 7.18 shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings, appeals, inquiries or investigations arising prior to any amendment, modification or repeal. To the fullest extent permitted by law, no individual entitled to indemnification under this shall be liable to the Company or any Member for any act or omission performed or omitted by or on behalf of the Company; provided that such act or omission has not been fully adjudicated to constitute fraud, willful misconduct or gross negligence. In addition, any Person entitled to indemnification under this Section 7.18 may consult with legal counsel selected with reasonable care and shall incur no liability to the Company or any Member to the extent that such Person acted or refrained from acting in good faith in reliance upon the opinion or advice of such counsel and such Person provided such counsel all material facts. Notwithstanding the foregoing, the Company shall not indemnify any Member or an employee, director, officer, owner,

principal, shareholder, member, or partner of a Member, in the event that the Proceeding involves a Member as the defendant and another Member as the respondent in such Proceeding.

(b) The right to indemnification conferred in Section 7.18(a) shall include the right to be paid or reimbursed by the Company for the reasonable expenses incurred by a Person entitled to be indemnified under Section 7.18(a) who was, is or is threatened to be made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to the Person’s ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such Person in advance of the final disposition of a Proceeding shall be made only upon delivery to the Company of a written undertaking by such Person to repay all amounts so advanced if it shall be finally adjudicated that such indemnified Person is not entitled to be indemnified under this Section 7.18 or otherwise; provided, further, that such advancement of expenses by the Company shall not be made to such Person in the event that the Proceeding involves a Member as the defendant and another Member as the respondent in such Proceeding.

(c) The right to indemnification and the advancement and payment of expenses conferred in this Section 7.18 shall not be exclusive of any other right that a Member or other Person indemnified pursuant to this Section 7.18 may have or hereafter acquire under any law (common or statutory), this Agreement, any contract of insurance or any other contract, arrangement or understanding.

(d) The indemnification rights provided by this Section 7.18 shall inure to the benefit of the heirs, executors, administrators, successors, and assigns of each Person indemnified pursuant to this Section 7.18.

Section 7.19. Tax Matters Member.

(a) CGMSF shall be the “tax matters partner” of the Company within the meaning of Section 6231(a)(7) of the Code and shall also the “partnership representative” within the meaning of Section 6223 of the New Partnership Audit Procedures (collectively, in such capacity, the “Tax Matters Member”). The provisions of Section 7.18 shall apply to all actions taken on behalf of the Members by the Tax Matters Member in its capacity as such. The Tax Matters Member shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the tax matters partner of the Company.

(b) The Tax Matters Member shall, at all times, keep all Members informed as to any discussions with any taxing administration with respect to any material tax issue concerning the Company or its subsidiaries. Without limiting the generality of the immediately preceding sentence, the Tax Matters Member shall provide notice to the other Members promptly (and in any event, no later than 30 days) after it receives notice from any taxing authority of any pending or threatened examination, adjustment or proceeding relating to any tax items of the Company or its subsidiaries. The Tax Matters Member shall (i) consult with the other Members with respect to the conduct of such examination or proceedings, or any court proceedings with respect to tax, (ii) afford the other Members a reasonable opportunity to participate in any such examination, proceeding or court proceeding and any meeting (whether in person, phone or otherwise) with any taxing authority or appearance in court, and (iii) afford the other Members a

reasonable opportunity to review drafts of any submission to any taxing authority or court, including requests for administrative adjustments. Without the approval of other Members, the Tax Matters Member shall not take any action with respect to the conduct of any examination or proceeding and shall not make any submission to any taxing authority or court if any Member has objected to such action. The Tax Matters Member shall not extend the statute of limitations or file a tax claim in any court without the approval of the other Members. Additionally, the Tax Matters Member shall not submit any request for administrative adjustment on behalf of the Company without the approval of the other Members. The Tax Matters Member agrees that it will not bind any Member to any tax settlement without the approval of such Member. Further, for the sake of clarity, the Tax Matters Member will take no action that affects another Member without the approval of such Member. The Tax Matters Member shall not take any action without Prior Board Approval.

(c) The Tax Matters Member shall have the right to retain professional assistance in respect of any audit of the Company and all reasonable, documented out-of-pocket expenses and fees incurred by the Tax Matters Member on behalf of the Company as Tax Matters Member shall be reimbursed by the Company.

(d) Any election proposed to be made or action proposed to be taken by the Tax Matters Member pursuant to the New Partnership Audit Procedures shall require the prior written consent of the other Members.

(e) Unless otherwise expressly provided herein, wherever in this Agreement the Tax Matters Member is empowered to make a decision or determination, take an action, consent, vote, or provide any approval, in doing so, the Tax Matters Member shall use its reasonable discretion, shall consult with all other Members and shall take into account the concerns and tax objectives of such other Members.

ARTICLE 8
TRANSFERS OF COMPANY INTERESTS; WITHDRAWALS

Section 8.1. Transfers by Members.

(a) Within a period of five (5) years after the Initial Closing Date, other than with respect to the sale and transfer of the Membership Interest of a Defaulting Member or a Pledge Defaulting Member, as applicable, in accordance with Section 4.3, the Membership Interest of a Member may not be transferred or assigned without the prior written consent of the other Member and may not be pledged or otherwise hypothecated without the prior written consent of the other Member; provided, however, that CSL may pledge and/or assign its Membership Interest to the senior credit facility provider(s) for CSL with notice to the other Member within a reasonable time thereafter. After the expiration of such five (5) year period, the Membership Interest of a Member may not be assigned without first offering the other Member a right of first refusal to purchase the Membership Interest as set forth in Section 8.1(f). Notwithstanding the foregoing, without the prior written consent of the other Member or the offering of such right of first refusal, any Member may assign its entire Membership Interest to a wholly owned Affiliate of such Member, if the assignor remains liable for its Capital Commitment. No assignment by a Member shall be binding upon the Company until the

Company receives an executed copy of such assignment, which shall be in form and substance satisfactory to the other Member, and any assignment pursuant to this Section 8.1(a) shall be subject to satisfaction of the conditions set forth in Section 8.1(e).

(b) Any Person which acquires a Membership Interest by assignment in accordance with the provisions of this Agreement shall be admitted as a substitute Member only upon approval of the other Member. The admission of an assignee as a substitute Member shall be conditioned upon the assignee’s written assumption, in form and substance satisfactory to the other Member, of all obligations of the assignor in respect of the assigned Membership Interest and execution of an instrument satisfactory to the other Member whereby such assignee becomes a party to this Agreement.

(c) In the event any Member shall be adjudicated as bankrupt, or in the event of the winding up or liquidation of a Member, the legal representative of such Member shall, upon written notice to the other Member of the happening of any of such events and satisfaction of the conditions set forth in Section 8.1(e), become an assignee of such Member’s Membership Interest, subject to all of the terms of this Agreement as then in effect.

(d) Any assignee of the Membership Interest of a Member, irrespective of whether such assignee has accepted and adopted in writing the terms and provisions of this Agreement, shall be deemed by the acceptance of such assignment to have agreed to be subject to the terms and provisions of this Agreement in the same manner as its assignor.

(e) As additional conditions to the validity of any assignment of a Member’s Membership Interest, such assignment shall not:

(i) cause the securities issued by the Company to be required to be registered under the registration provisions of the Securities Act of 1933, as amended, or the securities laws of any applicable jurisdiction;

(ii) cause the Company to cease to be entitled to the exemption from the definition of an “investment company” pursuant to Section 3(c)(7) of the Investment Company Act, and the rules and regulations of the SEC thereunder;

(iii) result in the Company being classified as a “publicly traded partnership” under the Code;

(iv) unless the other Member waives in writing the application of this clause (iv) with respect to such assignment (which the other Member may refuse to do in its absolute discretion), be to a Person which is an ERISA Plan;

(v) adversely impact CSL’s treatment of its investment in the Company for purposes of the Investment Company Act or for financial reporting purposes; or

(vi) cause the Company or the other Member to be in violation of, or effect an assignment to a Person that is in violation of, applicable Investor Laws.

The non-assigning Member may require reasonable evidence as to the foregoing, including, without limitation, an opinion of counsel reasonably acceptable to the non-assigning member. Any purported assignment as to which the conditions set forth in the foregoing clauses (i) through (vi) are not satisfied shall be void ab initio. An assigning Member shall be responsible for all costs and expenses incurred by the Company, including, without limitation, reasonable legal fees and expenses, in connection with any assignment or proposed assignment.

(f) Except for assignments under the third sentence or the proviso of the first sentence of Section 8.1(a) or with respect to sales or transfers pursuant to Section 4.3, each Member hereby unconditionally and irrevocably grants to the other Member or its designee a right of first refusal to purchase all, but not less than all, of any Membership Interest in the Company that such assigning Member may propose to assign to another Person, at the same price and on the same terms and conditions as those offered to the prospective assignee. Each Member proposing to make an assignment that is subject to this Section 8.1(f) must deliver a notice to the other Member not later than sixty (60) days prior to the proposed closing date of such assignment. Such notice shall contain the material terms and conditions (including, without limitation, price and form of consideration) of the proposed assignment and the identity of the prospective assignee. To exercise its right of first refusal under this Section 8.1(f), the other Member must deliver a notice to the selling Member within forty-five (45) days of receipt of such notice, stating that it elects to exercise its right of first refusal and, if applicable, providing the identity of any Person that the non-assigning Member designates as the purchaser.

(g) Notwithstanding anything in this Agreement to the contrary, each Member acknowledges and agrees that in the event such Member is entitled to transfer its Membership Interest from the Company, prior to the effectiveness of such transfer, such Member shall be obligated to fund such Capital Contributions as may be required under the terms of the Facility as a result of such transfer; provided, that in no event shall any amounts funded by such Member exceed its Unfunded Capital Commitment.

Section 8.2. Withdrawal by Members.

Members may withdraw from the Company only as provided by this Agreement.

(a) Notwithstanding any provision contained herein to the contrary, if a Member shall obtain an opinion of counsel to the effect that, as a result of the other Member’s ownership of a Membership Interest in the Company, the Company would be required to register as an investment company under the Investment Company Act, such other Member shall, upon written notice from such first Member, withdraw from or reduce (in accordance with the provisions of Section 8.2(c) below) its Membership Interest in the Company (including its Capital Commitment) to the extent such first Member has determined, based upon such opinion of counsel, to be necessary in order for the Company not to be required to so register. Each Member shall, upon written request from the other Member, promptly furnish to the other Member such information as the other Member may reasonably request from time to time in order to make a determination pursuant to this Section 8.2(a), but in no event later than ten (10) business days after such request.

(b) Notwithstanding any provision herein to the contrary, if a Member shall violate the United States Bank Secrecy Act, the United States Money Laundering Act of 1986, the United States International Money Laundering Abatement and Anti- Terrorist Financing Act of 2001, the USA Patriot Act or any other law or regulation to which the Company, a Member, or such Member’s investment in the Company may be subject from time to time (collectively, “Investor Laws”), or if the other Member shall obtain an opinion of counsel to the effect that any contribution or payment by a Member to the Company would cause the Company or the other Member to be in violation of, or to the effect that such Member is in violation of, any of the Investor Laws, such Member shall, upon written notice from the other Member, withdraw from the Company in accordance with the provisions of Section 8.2(c) below. Each Member shall, upon written request from the other Member, promptly furnish to the other Member such information as the other Member may reasonably request from time to time in order to make a determination pursuant to this Section 8.2(b), but in no event later than ten (10) business days after such request.

(c) If a Member partially withdraws its Membership Interest in the Company pursuant to this Section 8.2, it shall receive, in full payment for such withdrawn Membership Interest from first cash and cash equivalents available for distribution pursuant to Article 6 (and subject to the proviso in Section 6.1(b) if then applicable to such Member as the obligor with respect to an outstanding Default Loan), the sum of the portion of the Capital Account attributable to such withdrawn Membership Interest (adjusted to reflect the Value of the Company as determined as of the date of the last valuation pursuant to Section 10.5 and taking into account all Capital Contributions contributed by such Member to the Company with respect to a Subscription Facility pursuant to Section 8.2(d)). If a Member withdraws its entire Membership Interest in the Company pursuant to this Section 8.2, then, subject to Section 9.2(b), the Company shall dissolve as provided by Article 9.

(d) Notwithstanding anything in this Agreement to the contrary, each Member acknowledges and agrees that in the event such Member is entitled to withdraw its Membership Interest from the Company, prior to the effectiveness of such withdrawal, such Member shall be obligated to fund such Capital Contributions as may be required under the terms of a Subscription Facility as a result of such withdrawal (taking into account all Capital Contributions already contributed by such Member to the Company with respect to the Subscription Facility); provided, that in no event shall any amounts funded by such Member exceed its Unfunded Capital Commitment.

ARTICLE 9

TERM, DISSOLUTION AND LIQUIDATION OF COMPANY

Section 9.1. Term. Except as provided in Section 9.2, the Company and this Agreement shall continue in full force and effect and without dissolution until all the Investments are amortized, liquidated or are otherwise transferred or disposed of by the Company and, if applicable, any Financing Subsidiary.

Section 9.2. Dissolution.

(a) The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events:

(i) the expiration of the term of the Company determined pursuant to Section 9.1;

(ii) distribution of all assets of the Company;

(iii) the full withdrawal of a Member of the Company pursuant to Section 8.2, or a bankruptcy, insolvency, dissolution or liquidation of a Member, or the making of an assignment for the benefit of creditors by a Member, or a default under Section 4.3 by a Member which remains uncured or unwaived after the expiration of the cure period set forth in Section 4.3, in each case at the election of the other Member by providing written notice of such election;

(iv) at the election of Credit Partners (i) on or after May 2, 2018 by providing written notice of such election to CSL if the board of directors of CSL (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) determines to wind down and/or liquidate and dissolve CSL because CSL has not consummated a Qualified IPO on or prior to May 2, 2018 or (ii) if the board of directors of CSL (subject to any necessary stockholder approvals and applicable requirements of the Investment Company Act) determines to wind down and/or liquidate and dissolve CSL for any other reason;

(v) at the election of CSL by providing written notice of such election to Credit Partners, if the number of Qualified Investments that are presented to the Investment Committee by or on behalf of CSL or any Affiliate of CSL and vetoed or otherwise blocked by one or more Investment Committee Members appointed by Credit Partners represents twenty-five percent (25%) or more of the aggregate number of Qualified Investments that are presented to the Investment Committee by or on behalf of CSL or any Affiliate of CSL in any trailing twelve (12) month period (for the avoidance of doubt, any Qualified Investments that are presented to the Investment Committee by or on behalf of CSL or any Affiliate of CSL shall have been approved by the investment committee of CGCIM); provided, that, any Qualified Investments that are made as Capital Contributions by a Member shall be disregarded for purposes of determining the twenty-five percent (25%) threshold for purposes of this Section 9.2(a)(v);

(vi) at the election of CSL by providing written notice of such election to Credit Partners, if (A) a determination is made by the SEC or its staff to subject, or a rule is adopted by the SEC that subjects, CSL’s participation in the Company to an accounting or reporting treatment or other consequence which CSL reasonably determines to be materially adverse to it, or (B) there is a change by the SEC of its approval (to the extent required) of CSL’s Membership Interest in the Company or the terms of such approval or its conclusions regarding the accounting or reporting treatment or other consequence which CSL reasonably determines to be materially adverse to it;

provided that CSL provides Credit Partners with a description of the relevant SEC determination or change;

(vii) the entry of a decree of judicial dissolution pursuant to the Act, in which event the provisions of Section 9.3, as modified by said decree, shall govern the winding up of the Company’s affairs;

(viii) in the event of a Cause Event with respect to a Member, at the election of the other Member;

(ix) at the election of Credit Partners if CSL assigns or transfers its Membership Interest to senior credit facility provider(s) for CSL pursuant to Section 8.1(a), whether pursuant to foreclosure or otherwise; or

(x) at the election of Credit Partners (A) if the Administrative Agent resigns or terminates the Administration Agreement or (B) if the Administrative Agent intentionally materially breaches the Administration Agreement and, to the extent such material breach can be cured, following a thirty (30) day cure period such material breach remains.

(b) Notwithstanding Section 9.2(a), and subject to applicable law, the Company shall not be required to wind up, dissolve or terminate if any such action would cause the Company or any wholly-owned Financing Subsidiary to violate any law or contract applicable to any such Person.

Section 9.3. Wind-down.

(a) Upon the dissolution of the Company, the Company shall be liquidated in accordance with this Article and the Act. The liquidation shall be conducted and supervised by the Board in the same manner provided by Article 7 with respect to the operation of the Company during its term; provided that in the case of a dissolution and winding up of the Company pursuant to Section 9.2(a)(iii) to Section 9.2(a)(vi), the Member that elects such dissolution and winding up may elect further (subject to all of the provisions of this Agreement), by written notice to the other Member, to exercise as liquidating agent all of the rights, powers and authority with respect to the assets and liabilities of the Company in connection with the liquidation of the Company, to the same extent as the Members would have during the term of the Company.

(b) From and after the date on which an event set forth in Section 9.2(a) becomes effective, the Company shall cease to make Investments after that date, except for Investments permitted pursuant to clauses (ii) through (vi) of Valid Company Purposes. Capital calls against the Capital Commitment of the Members shall cease from and after such effective date; provided that capital calls against the Capital Commitment of the Members may continue to fund all items in clauses (ii) through (vi) of Valid Company Purposes. Subject to the foregoing, the Members shall continue to bear an allocable share of Expenses and other obligations of the Company until all Investments in which the Company participates (including through any

applicable Financing Subsidiaries) are repaid or otherwise disposed of in the normal course of the Company’s activities.

(c) Distributions to the Members during the winding down of the Company shall be made no less frequently than quarterly to the extent consisting of a Member’s allocable share of cash and cash equivalents, after taking into account reasonable reserves deemed appropriate by Board Approval (or in the event of a dissolution and winding up of the Company pursuant to Section 9.2(a)(iii) to Section 9.2(a)(vi), by a Member that has elected to act as liquidating agent pursuant to Section 9.3(a)), to fund Investments in which the Company continues to participate, Expenses and all other obligations (including without limitation contingent obligations) of the Company (each as set forth in the immediately preceding paragraph). Unless waived by Board Approval, the Company also shall withhold ten percent (10%) of distributions in any calendar year, which withheld amount shall be distributed within sixty (60) days after the completion of the annual audit covering such year. Except as otherwise provided herein, a Member shall remain a member of the Company until all Investments in which the Company participates are repaid or otherwise disposed of, all equity interests of the Company in each Financing Subsidiary are redeemed or such Financing Subsidiary is dissolved, the Member’s allocable share of all Expenses and all other obligations (including without limitation contingent obligations) of the Company are paid, and all distributions are made hereunder, at which time the Member shall have no further rights under this Agreement. Notwithstanding the foregoing, in case of the dissolution and winding up of the Company, and subject to this Section 9.3, distributions may be made in-kind, or a combination of cash and assets (including any debt or equity held by the Company in any Financing Subsidiary), as the Board or liquidating agent may select in its sole and absolute discretion provided that any distribution-in-kind shall not cause a breach by the Company or any Financing Subsidiary of any applicable law or contract. In the event of any distributions in-kind, the assets to be distributed will be valued at fair value.

(d) Upon dissolution of the Company, final allocations of all items of Company Profit and Loss shall be made in accordance with Section 5.2. Upon dissolution of the Company, the assets of the Company shall be applied in the following order of priority:

(i) To creditors (other than Members) in satisfaction of liabilities of the Company (whether by payment or by the making of reasonable provision for payment thereof), including, without limitation, to establish any reasonable reserves which the Board may, in its reasonable judgment, deem necessary or advisable for any contingent, conditional or unmatured liability of the Company and to establish any reasonable reserves with respect to amounts the Company may pay or contribute in connection with Financing Subsidiaries;

(ii) To establish any reserves which the Board may, in its reasonable judgment, deem necessary or advisable for any contingent, conditional or unmatured liability of the Company to Members; and

(iii) The balance, if any, to the Members in accordance with Section 6.1(b).

(e) Notwithstanding the foregoing, upon the occurrence of an event described in any of Section 9.2(a)(iii) to Section 9.2(a)(vi), the Member that may elect a dissolution and winding up may elect alternatively, by written notice to the other Member, to purchase all of the other Member’s Membership Interest in the Company. Other than in connection with a sale or transfer of the Membership Interest of a Defaulting Member or a Pledge Defaulting Member, as applicable, pursuant to Section 4.3, the purchase price for such Membership Interest shall be payable in cash within ninety (90) days after the election to purchase is delivered to the other Member, and shall be equal to the Capital Account of the other Member adjusted to reflect the Value of the Company as determined as of the date of the last valuation pursuant to Section 10.5; provided, however, that to the extent any amounts are owed by the other Member to a Non-Defaulting Member or a Pledge Non-Defaulting Member, as applicable, with respect to a Default Loan, any purchase price that would otherwise be payable to such other Member under this section shall instead first be paid to the Non-Defaulting Member or the Pledge Non-Defaulting Member, as applicable, pursuant to the terms of Section 4.3(b)(iii) hereof, until each such Default Loan (and any interest thereon) has been repaid in full with the remainder thereof, if any, payable to such other Member. After such purchase, the other Member shall no longer be a member of the Company, and the Member that has elected to purchase the other Member’s Membership Interest may dissolve or continue the Company as it may determine.

(f) In the event that an audit or reconciliation relating to the fiscal year in which a Member receives a distribution under this Section 9.3 reveals that such Member received a distribution in excess of that to which such Member was entitled, the Company or the other Member may, in its discretion, seek repayment of such distribution to the extent that such distribution exceeded what was due to such Member.

(g) Each Member shall be furnished with a statement prepared by the Company’s accountant, which shall set forth the assets and liabilities of the Company as at the date of complete liquidation, and each Member’s share thereof. Upon compliance with the distribution plan set forth in this Section 9.3, the Members shall cease to be such, and either Member may execute, acknowledge and cause to be filed a certificate of cancellation of the Company.

ARTICLE 10

ACCOUNTING, REPORTING AND VALUATION PROVISIONS

Section 10.1. Books and Accounts.

(a) Complete and accurate books and accounts shall be kept and maintained for the Company at its principal office. Such books and accounts shall be kept on the accrual basis method of accounting and shall include separate Capital Accounts for each Member. Capital Accounts for financial reporting purposes and for purposes of this Agreement shall be maintained in accordance with Section 5.1, and for U.S. federal income tax purposes the Members shall cause the Administrative Agent to maintain the Members’ Capital Accounts in accordance with the Code and applicable Treasury Regulations and subject to instructions from the Tax Matters Member; provided, however, that the Tax Matters Member will not take action that would adversely affect the other Members without the prior approval of such other

Members. Each Member or its duly authorized representative, at its own expense, shall at all reasonable times and upon reasonable prior written notice to the Administrative Agent have access to, and may inspect, such books and accounts and any other records of the Company for any purpose reasonably related to its Membership Interest in the Company.

(b) CSL will provide Investment Committee Members,

(i) investment materials prepared and presented by CGCIM and its affiliates for any loans originated by CSL and presented to the Company, subject to customary confidentiality obligations; and

(ii) all due diligence material prepared and/or received by CSL and its affiliates for any loans originated by CGCIM and presented to the Company, subject to customary confidentiality obligations; provided that CSL and its affiliates shall use commercially reasonable efforts to ensure that such information can be shared with Credit Parent and Credit Partners and their respective officers, directors, employees, legal counsel or representatives without requiring Credit Parent or Credit Partners to execute a confidentiality agreement with respect to such information.

(c) The Administrative Agent will provide Investment Committee Members quarterly reporting (within thirty (30) days after of the end of each quarter) and annual reporting (within sixty (60) days after the end of such Fiscal Year) for the Company that are consistent with CSL’s current practice, which shall include,

(i) portfolio reviews;

(ii) liability management reports;

(iii) workout reports regarding troubled assets;

(iv) valuation reports and models; and

(v) any other information reasonably requested by an Investment Committee Member.

(d) All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts or with such custodian, and assets owned by the Company may be deposited with such custodian, as may be designated by Board Approval from time to time and withdrawals therefrom shall be made upon such signature or signatures on behalf of the Company as may be designated by Board Approval from time to time.

Section 10.2. Financial Reports; Tax Return.

(a) The Company shall engage an independent certified public accountant selected and approved by Board Approval to act as the accountant for the Company and to audit the Company’s books and accounts as of the end of each fiscal year, commencing for the fiscal year in which the Company is formed; provided that such accountant shall be one of the top four (4) accounting firms. As soon as practicable, but no later than ninety (90) days (except that in

the case of Schedule K-1 pursuant to Section 10.2(a)(iii), no later than ninety (90) days for an estimate of the information to be included in Schedule K-1 and no later than one hundred and twenty (120) days for Schedule K-1), after the end of such fiscal year, the Board shall cause the Administrative Agent to deliver, by any of the methods described in Section 12.7, to each Member and to each former Member who withdrew during such fiscal year:

(i) audited financial statements of the Company as at the end of and for such fiscal year, including a balance sheet and statement of income, together with the report thereon of the Company’s independent certified public accountant, which annual financial statements shall be approved by Board Approval;

(ii) a statement of holdings of assets of the Company, including both the cost and the valuation of such assets as determined pursuant to Section 10.5, and a statement of such Member’s Capital Account;

(iii) to the extent that the requisite information is then available, a Schedule K-1 for such Member with respect to such fiscal year, prepared in accordance with the Code, together with corresponding forms for state income tax purposes, setting forth such Member’s distributive share of Company items of Profit or Loss for such fiscal year and the amount of such Member’s Capital Account at the end of such fiscal year; and

(iv) such other financial information and documents respecting the Company and its business as the Administrative Agent deems appropriate, or as a Member may reasonably require and request, to enable such Member to monitor and evaluate its Membership Interest in the Company, to comply with regulatory requirements applicable to it or to prepare its federal and state income tax returns.

(b) The Members shall cause the Administrative Agent to prepare and timely file after the end of each fiscal year of the Company all federal and state income tax returns of the Company for such fiscal year.

(c) As soon as practicable, but in no event later than sixty (60) days, after the end of each of the first three fiscal quarters of a fiscal year, the Members shall cause the Administrative Agent to prepare and deliver, by any of the methods described in Section 12.7, to each Member (i) unaudited financial information with respect to such Member’s allocable share of Profit or Loss and changes to its Capital Account as of the end of such fiscal quarter and for the portion of the fiscal year then ended, (ii) a statement of holdings of assets of the Company as to which such Member participates, including both the cost and the valuation of such assets as determined pursuant to Section 10.5, (iii) unaudited primary financial statements, including a balance sheet and statement of income but excluding notes to financials and related disclosures, (iv) summaries of all capital calls, distribution notices, funded commitments, aggregate funded commitments and aggregate unfunded commitments for the previous quarter, and (v) such other financial information as the Administrative Agent deems appropriate, or as a Member may reasonably require and request, to enable such Member to monitor and evaluate its Membership Interest in the Company or to comply with regulatory requirements applicable to it.

Section 10.3. Tax Elections. The Company may, by Board Approval, but shall not be required to, make any election pursuant to the provisions of Section 754 or 1045 of the Code, or any other election required or permitted to be made by the Company under the Code; provided, however, that no election to apply the New Partnership Audit Procedures prior to the effective date of such procedures shall be made. Notwithstanding the foregoing, the Company shall make an election pursuant to the provisions of Section 754 of the Code in the event that a Member transfers its Membership Interest pursuant to the terms of this Agreement and such Member agrees to reimburse the Company against any costs associated with the making of such election. To the extent permitted by applicable law, with respect to taxable years beginning after the effective date of the New Partnership Audit Procedures, the Company shall elect out of the application of the New Partnership Audit Procedures. The Company is intended to be treated as a partnership for federal income tax purposes and no Member shall make any election (for tax purposes or otherwise) inconsistent with such treatment.

Section 10.4. Confidentiality.

(a) Each Member agrees to maintain the confidentiality of the Company’s records, reports and affairs, and all information and materials furnished to such Member by the Company, any Financing Subsidiary, any other Member, CSL’s investment adviser, the Administrative Agent or their Affiliates with respect to their respective businesses and activities; each Member agrees not to provide to any other Person copies of any financial statements, tax returns or other records or reports, or other information or materials, provided or made available to such Member; and each Member agrees not to disclose to any other Person any information contained therein (including any information respecting Portfolio Companies), without the express prior written consent of the disclosing party; provided, that each Member may disclose (x) any such information as may be required by law in connection with the filing of a Registration Statement on Form N-2 and any periodic reports under the Securities Exchange Act of 1934, as amended, and (y) the names of borrowers of loans made by the Company and summaries of such loan transactions in any marketing materials (including tombstone ads) in connection with the public offering of such Member’s common shares; provided, further, that any Member may provide financial statements, tax returns and other information contained therein (i) to such Member’s accountants, internal and external auditors, legal counsel, financial advisors and other fiduciaries and representatives (who may be Affiliates of such Member) as long as such Member instructs such Persons to maintain the confidentiality thereof and not to disclose to any other Person any information contained therein, (ii) to potential transferees of such Member’s Membership Interest that agree in writing, for the benefit of the Company, to maintain the confidentiality thereof, but only after reasonable advance notice to the Company, (iii) if and to the extent required by law (including judicial or administrative order); provided that, to the extent legally permissible, the Company is given prior notice to enable it to seek a protective order or similar relief, (iv) to representatives of any governmental regulatory agency or authority with jurisdiction over such Member, or as otherwise may be necessary to comply with regulatory requirements applicable to such Member; (v) as required or advisable to obtain financing directly by the Company or by a Financing Subsidiary or as required or permitted to be disclosed under any related offering or transaction documents; and (vi) in order to enforce rights under this Agreement. Notwithstanding the foregoing, nothing in this Section 10.4 shall prevent Credit Partners, Credit Parent, the members of the Board designated by Credit Partners or the

members of the Investment Committee designated by Credit Partners from providing information relating to the Company’s records, reports and affairs, and all information and materials furnished to such Person by the Company, any Financing Subsidiary, any other Member, CSL’s investment adviser, the Administrative Agent or their Affiliates with respect to their respective business activities to Credit Partners, Credit Parent and their respective officers, directors and employees. Notwithstanding the foregoing, the following shall not be considered confidential information for purposes of this Agreement: (a) information generally known to the public; (b) information obtained by a Member from a third party who is not prohibited from disclosing the information; (c) information in the possession of a Member prior to its disclosure by the Company, a Financing Subsidiary, another Member, CSL’s investment adviser, the Administrative Agent or their Affiliates; or (d) information which a Member can show by written documentation was developed independently of disclosure by the Company, a Financing Subsidiary, another Member, CSL’s investment adviser, the Administrative Agent or their Affiliates. Without limitation to the foregoing, no Member shall engage in the purchase, sale or other trading of securities or derivatives thereof based upon confidential information received from the Company, a Financing Subsidiary, another Member, CSL’s investment adviser, the Administrative Agent or their Affiliates.

(b) Each Member: (i) acknowledges that the Company, another Member, CSL’s investment adviser, the Administrative Agent, its Affiliates, and their respective direct or indirect members, members, managers, officers, directors and employees are expected to acquire confidential third-party information (e.g., through Portfolio Company directorships held by such Persons or otherwise) that, pursuant to fiduciary, contractual, legal or similar obligations, cannot be disclosed to the Company or the Member; and (ii) agree that none of such Persons shall be in breach of any duty under this Agreement or the Act as a result of acquiring, holding or failing to disclose such information to the Company or the Member.

Section 10.5. Valuation.

(a) Valuations shall be made as of the end of each fiscal quarter and upon liquidation of the Company in accordance with the following provisions and the Company’s valuation guidelines then in effect (which shall be consistent with CSL’s valuation guidelines then in effect):

(i) Within forty-five (45) days after the date as of which a valuation is to be made, the Administrative Agent shall deliver to the Board a report as to the recommended valuation as of such date, and provide such Persons with a reasonable opportunity to request information and to provide comments with respect to the report.

(ii) If the recommended valuation as of such date is approved by Board Approval, then the valuation that has been approved shall be final.

(iii) If there is an objection by a Member to the recommended valuation by the Board that is presented in writing by such Member to the Board within five (5) business days of such valuation, then the Administrative Agent shall cause a valuation of the asset(s) subject to unresolved objection to be made as of such date by an approved valuation expert, and shall determine a valuation of such asset(s) consistent with the

valuation as of such date by the approved valuation expert, and such valuation shall be final. For this purpose, a valuation of an asset as of such date shall be considered consistent with a valuation of an approved valuation expert if it is equal to the recommended value or within the recommended range of values determined by the approved valuation expert as of such date. An approved valuation expert shall mean an independent valuation consultant that has been approved by Board Approval. The Members acknowledge and agree that in the event a Member objects to the valuation of an Investment, the preparation and delivery of the Company’s financial statements and other data could be delayed until the resolution of such objection.

(iv) Liabilities of the Company shall be taken into account at the amounts at which they are carried on the books of the Company, and provision shall be made in accordance with GAAP for contingent or other liabilities not reflected on such books and, in the case of the liquidation of the Company, for the expenses (to be borne by the Company) of the liquidation and winding up of the Company’s affairs.

(v) No value shall be assigned to the Company name and goodwill or to the office records, files, statistical data, or any similar intangible assets of the Company not normally reflected in the Company’s accounting records.

(b) All valuations shall be made in accordance with the foregoing shall be final and binding on all Members, absent actual and apparent error. Valuations of the Company’s assets by independent valuation consultants shall be at the Company’s expense.

Section 10.6. Investment in Public Corporations. CSL agrees that it shall not provide any material non-public information about or relating to a Public Corporation to the Company or Credit Partners without Credit Partner’s prior written consent.

ARTICLE 11

EXPENSES

Section 11.1. Company Expenses. By virtue of its Membership Interest, each Member shall indirectly bear an allocable share of Expenses and other obligations of the Company. Such Expenses will include the Organizational Costs and all Expenses of the Company, including, without limitation: expenses for legal (including, without limitation, all costs associated with the formation of the Company and the fees and expenses of Sullivan & Cromwell LLP, Weil, Gotshal & Manges LLP and Skadden, Arps, Slate, Meagher & Flom LLP in connection with its preparation of this Agreement and other related agreements and documents), audit, tax (including, without limitation, all costs associated with the preparation and filing of tax returns), appraisal, and investment diligence, and incurrence of indebtedness and any other expenses associated with investing in or valuing the Investments. The Members agree that the Organizational Costs incurred by each Member on behalf of the Company shall not exceed one-hundred thousand dollars ($100,000), unless expressly authorized by the Board pursuant to Board Approval. Notwithstanding the foregoing, the Members agree that the Company shall reimburse each Member an amount not to exceed fifty thousand dollars ($50,000) in connection

with expenses incurred by such Member in connection with this Agreement, the Mezzanine Loan Agreement, the Pledge Agreement, the LSA or the Investor Acknowledgement.

ARTICLE 12

MISCELLANEOUS PROVISIONS

Section 12.1. Power of Attorney.

(a) Each Member irrevocably constitutes and appoints CSL the true and lawful attorney-in-fact of such Member to execute, acknowledge, swear to and file any of the following:

(i) Any certificate or other instrument which may be required to be filed by the Company under the laws of the United States, the State of Delaware, or any other jurisdiction; provided that no such certificate or instrument shall have the effect of amending this Agreement other than as permitted hereby; and

(ii) Any amendment or modification of any certificate or other instrument referred to in this Section 12.1.

It is expressly acknowledged by each Member that the foregoing power of attorney is coupled with an interest and shall survive death, legal incapacity and assignment by such Member of its Membership Interest in the Company; provided, however, that if a Member shall assign all of its Membership Interest in the Company and the assignee shall, in accordance with the provisions of this Agreement, become a substitute Member, such power of attorney shall survive such assignment only for the purpose of enabling each attorney-in-fact to execute, acknowledge, swear to and file any and all instruments necessary to effect such substitution and provided further that such power of attorney shall terminate upon the bankruptcy of the Member.

(b) Each Member irrevocably constitutes and appoints the other Member the true and lawful attorney-in-fact of such Member to execute, acknowledge, swear to and file any agreement, document, certificate or other instrument in connection with the sale and transfer of such Member’s Membership Interest in the Company pursuant to Section 4.3 by the other Member.

It is expressly acknowledged by each Member that the foregoing power of attorney is coupled with an interest and shall survive death, legal incapacity, bankruptcy, termination and dissolution by such Member of its Membership Interest in the Company and shall survive the delivery of an assignment by the Member of the whole or any portion of such Member’s Membership Interest in the Company, except that where the assignee thereof has been approved as a substituted Member of the Company.

Section 12.2. Determination of Disputes. Any dispute or controversy among the Members (other than a suit brought against a Defaulting Member or a Pledge Defaulting Member, as applicable) arising in connection with (i) this Agreement or any amendment hereof, (ii) the breach or alleged breach hereof, (iii) the actions of any of the Members, or (iv) the formation, operation or dissolution and liquidation of the Company, shall be determined and settled by arbitration in New York, New York, by a panel of three members who shall be

selected, and such arbitration shall be conducted, in accordance with the commercial rules of the American Arbitration Association. Any award rendered therein shall be final and binding upon the Members and the Company and judgment upon any such award rendered by said arbitrators may be entered in any court having jurisdiction thereof. The party or parties against which an award is made shall bear its or their own expenses and those of the prevailing party or parties, including, without limitation, fees and disbursements of attorneys, accountants, and financial experts, and shall bear all arbitration fees and expenses of the arbitrators.

Section 12.3. Certificate of Formation; Other Documents. The Members hereby approve and ratify the filing of the Certificate of Formation on behalf of the Company and all actions taken in connection thereunder. The Members agree to execute such other instruments and documents as may be required by law or which a Member or the Board deems necessary or appropriate to carry out the intent of this Agreement; provided that a Member shall not be required to execute any instrument or document that is adverse to such Member. Each Member further agrees to deliver, if requested by the Company for provision to a third-party lender, (i) its most recent financials; (ii) a certificate confirming the amount of its Unfunded Capital Commitment; and (iii) a customary investor letter and authority documentation relating to its entry into this Agreement, and such other instruments as the Company or such lender may reasonably require in order to effect any such borrowings by the Company or any of its Affiliates; provided that any such letter, document or instrument is reasonably acceptable to such Member.

Section 12.4. Force Majeure. Whenever any act or thing is required of the Company or a Member hereunder to be done within any specified period of time, the Company and the Member shall be entitled to such additional period of time to do such act or thing as shall equal any period of delay resulting from causes beyond the reasonable control of the Company or the Member, including, without limitation, bank holidays, and actions of governmental agencies, and excluding, without limitation, economic hardship; provided that this provision shall not have the effect of relieving the Company or the Member from the obligation to perform any such act or thing.

Section 12.5. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the internal law of the State of Delaware, without regard to the principles of conflicts of laws thereof.

Section 12.6. Waivers.

(a) No waiver of the provisions hereof shall be valid unless in writing and then only to the extent therein set forth. Any right or remedy of the Members hereunder may be waived by Board Approval, and any such waiver shall be binding on all Members. Except as specifically herein provided, no failure or delay by any party in exercising any right or remedy hereunder shall operate as a waiver thereof, and a waiver of a particular right or remedy on one occasion shall not be deemed a waiver of any other right or remedy or a waiver on any subsequent occasion.

(b) Except as otherwise provided in this Agreement, any approval or consent of the Members may be given by Board Approval, and any such approval or consent shall be binding on all Members.

Section 12.7. Notices. All notices, demands, solicitations of consent or approval, and other communications hereunder shall be in writing or by electronic mail (with or without attached PDFs), and shall be sufficiently given if personally delivered or sent by postage prepaid, registered or certified mail, return receipt requested, or sent by electronic mail, overnight courier or facsimile transmission, addressed as follows: if intended for the Company, to the Company’s principal office determined pursuant to Section 2.3; and if intended for any Member, to the address of such Member set forth on the Company’s records, or to such other address as any Member may designate by written notice. Notices shall be deemed to have been given (i) when personally delivered, (ii) if sent by registered or certified mail, on the earlier of (A) three days after the date on which deposited in the mails or (B) the date on which received, (iii) if sent by overnight courier or facsimile transmission, on the date on which received or (iv) if sent by electronic mail, on the date on which received or on the next business day if the date received is either not a business day or the electronic mail was received after 5:00 p.m. local time at the address of the recipient; provided that notices of a change of address shall not be deemed given until the actual receipt thereof. The provisions of this Section 12.7 shall not prohibit the giving of written notice in any other manner; any such written notice shall be deemed given only when actually received.

Section 12.8. Construction.

(a) The captions used herein are intended for convenience of reference only and shall not modify or affect in any manner the meaning or interpretation of any of the provisions of this Agreement.

(b) As used herein, the singular shall include the plural (and vice versa), the masculine gender shall include the feminine and neuter, and the neuter gender shall include the masculine and feminine, unless the context otherwise requires.

(c) The words “hereof,” “herein,” and “hereunder,” and words of similar import, when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(d) References in this Agreement to Articles, Sections and Schedules are intended to refer to Articles, Sections and Schedules of this Agreement unless otherwise specifically stated.

(e) Nothing in this Agreement shall be deemed to create any right in or benefit for any creditor of the Company that is not a party hereto, and this Agreement shall not be construed in any respect to be for the benefit of any creditor of the Company that is not a party hereto. Notwithstanding the foregoing, the lenders under a Facility are express, intended third-party beneficiaries hereof, entitled to enforce the provisions of Section 4.1 in their own name in accordance with the terms governing such Facility.

(f) References to any Person include such Person’s successors (including any successor by merger, consolidation, conversion or acquisition of all or substantially all of such Person’s assets) and assigns provided that, if restricted by this Agreement, only if such successors and assigns are permitted hereunder.

(g) Reference to day or days without further qualification means calendar days.

(h) References to any agreement, document or instrument means such agreement, document or instrument, together with all schedules, exhibits and annexes thereto, in each case as amended, modified, waived, supplemented, restated or replaced and in effect from time to time in accordance with the terms thereof.

(i) References to any applicable law means such applicable law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any applicable law means that provision of such applicable law from time to time in effect including those constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision.

(j) The term “including” shall mean “including without limitation.”

Section 12.9. Amendments.

(a) This Agreement may be amended at any time and from time to time by Board Approval and approval of each Member.

(b) Notwithstanding the foregoing, a Member may amend this Agreement and the Member List at any time and from time to time to reflect the admission or withdrawal of any Member or the change in any Member’s Capital Commitment, as contemplated by this Agreement. Each Member shall promptly receive notice of any amendments to the Member List.

Section 12.10. Legal Counsel.

(a) CSL has engaged Sullivan & Cromwell LLP (“Company Counsel”), as legal counsel to the Company and CSL. Moreover, Company Counsel has previously represented and/or concurrently represents the interests of the Company, CSL and/or parties related thereto in connection with matters other than the preparation of this Agreement and may represent such Persons in the future. Each Member: (i) approves Company Counsel’s representation of the Company and CSL in the preparation of this Agreement; and (ii) acknowledges that Company Counsel has not been engaged by any other Member to protect or represent the interests of such Member vis-à-vis the Company or the preparation of this Agreement, and that actual or potential conflicts of interest may exist among the Members in connection with the preparation of this Agreement. In addition, each Member: (i) acknowledges the possibility of a future conflict or dispute among Members or between any Member or Members and the Company; and (ii) acknowledges the possibility that, under the laws and ethical rules governing the conduct of attorneys, Company Counsel may be precluded from representing the Company and/or CSL (or any equity holder thereof) in connection with any such conflict or dispute. Nothing in this Section 12.10(a) shall preclude the Company from selecting different legal counsel to represent it at any time in the future and no Member shall be deemed by virtue of this Section 12.10(a) to have waived its right to object to any conflict of interest relating to matters other than this Agreement or the transactions contemplated herein provided that any Member may otherwise waive such right.

(b) Credit Parent has engaged Weil, Gotshal & Manges LLP and Skadden, Arps, Slate, Meagher & Flom LLP (“Credit Partners Counsel”), as legal counsel to Credit Partners and Credit Parent. Moreover, Credit Partners Counsel has previously represented and/or concurrently represents the interests of Credit Partners and/or parties related thereto in connection with matters other than the preparation of this Agreement and may represent such Persons in the future. Each Member: (i) approves Credit Partners Counsels’ representation of Credit Partners in the preparation of this Agreement; and (ii) acknowledges that Credit Partners Counsel has not been engaged by any other Member to protect or represent the interests of such Member vis-à-vis the Company or the preparation of this Agreement, and that actual or potential conflicts of interest may exist among the Members in connection with the preparation of this Agreement. In addition, each Member: (i) acknowledges the possibility of a future conflict or dispute among Members or between any Member or Members and the Company; and (ii) acknowledges the possibility that, under the laws and ethical rules governing the conduct of attorneys, Credit Partners Counsel may be precluded from representing Credit Partners (or any equity holder thereof) in connection with any such conflict or dispute. Nothing in this Section 12.10(b) shall preclude the Company from selecting different legal counsel to represent it at any time in the future and no Member shall be deemed by virtue of this Section 12.10(b) to have waived its right to object to any conflict of interest relating to matters other than this Agreement or the transactions contemplated herein provided that any Member may otherwise waive such right.

Section 12.11. Execution. This Agreement may be executed in any number of counterparts and all such counterparts together shall constitute one agreement binding on all Members.

Section 12.12. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto; provided that this provision shall not be construed to permit any assignment or transfer which is otherwise prohibited hereby.

Section 12.13. Severability. If any one or more of the provisions contained in this Agreement, or any application thereof, shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and all other applications thereof shall not in any way be affected or impaired thereby.

Section 12.14. Computation of Time. In computing any period of time under this Agreement, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, Sunday or legal holiday on which banks in New York are closed, in which event the period shall run until the end of the next day which is not a Saturday, Sunday or such a legal holiday. Any reference to “business day” shall refer to any day in New York which is not a Saturday, Sunday or such a legal holiday. Any references to time of day shall refer to New York time.

Section 12.15. Entire Agreement. This Agreement, entered into between the Company and each Member in connection with the Members’ subscription of Membership Interests in the Company and any other agreements that may be entered into in connection with a Facility set forth the entire understanding among the parties relating to the subject matter hereof, any and all prior correspondence, conversations, memoranda or other writings being merged herein and replaced and being without effect hereon. No promises, covenants or representations of any character or nature other than those expressly stated herein or in any such other agreement have been made to induce any party to enter into this Agreement.

Section 12.16. Opinions of Counsel. In any event in which this Agreement requires or permits a Member to deliver an opinion of legal counsel, the Company and each Member will accept an opinion from internal legal counsel of the Member.

Section 12.17. Agreement to Keep Terms Confidential. Each of the parties hereto agrees that it will not, and that it will cause its respective agents and Affiliates to not, (x) discuss the terms agreed to by the parties in connection with their respective investment in the Company, whether contained in this Agreement or any other documents or conversations, with any person other than its officers, directors, affiliates, or attorneys, without the express written consent of the other party, or (y) disclose Credit Parent’s participation in the Company with any Person other than its officers, directors, affiliates, or attorneys, without Credit Partners’ express written consent, in each case of (x) and (y), unless required by applicable law or by a Governmental Authority after written notice to the Members, or the other Member, as the case may be, and commercially reasonable efforts by the party subject to such requirement to avoid such disclosure. For the avoidance of doubt, the name and identity of Credit Parent or any of its Affiliates (other than Credit Partners) shall not be used without Credit Partners’ express written consent in any materials including but not limited to (i) marketing and promotional materials, (ii) press releases, (iii) other public disclosures and (iv) any Government Authority filings; provided, however, that Credit Partners consents to the filing of this Agreement by CSL with the

SEC and the disclosure in filings of CSL and its Affiliates with the SEC that is consistent with Exhibit H hereto, and CSL shall use commercially reasonable efforts to submit disclosures consistent with Exhibit H hereto.

[Remainder of page left blank]

IN WITNESS WHEREOF, the Members have caused this Agreement to be executed and delivered as of the date first written above.

Carlyle Secured Lending, Inc.

By: /s/ Tom Hennigan

Name: Tom Hennigan
Title: Chief Financial Officer

[Signature Page to Middle Market Credit Fund, LLC
Fifth Amended and Restated Limited Liability Company Agreement]

Credit Partners USA LLC

By: /s/ Charlotte Muellers

Name: Charlotte Muellers

By: /s/ Joseph Stivaletti Jr.

Name: Joseph Stivaletti Jr.

[Signature Page to Middle Market Credit Fund, LLC
Fifth Amended and Restated Limited Liability Company Agreement]

Exhibit A

List of Members as of April 20, 2023


Member	Initial Capital Contribution	Subsequent Contributions Through the Date Hereof	Unfunded Capital Commitment	Capital Commitment
Carlyle Secured Lending, Inc.	$1,000	$193,000,000	$56,999,000	$250,000,000
Credit Partners USA LLC	$1,000	$193,000,000	$56,999,000	$250,000,000

A-1

Exhibit B
Capital Call Notice

MIDDLE MARKET CREDIT FUND, LLC

1 VANDERBILT AVENUE, 36TH FLOOR

NEW YORK, NY 10017

[●], 20[●]

[●]

Attention: [●]

RE: Notice of Middle Market Credit Fund, LLC Capital Call

Dear [●]

Please see below for your funding obligations as set forth in Section 4.1(a) of the Fifth Amended and Restated Limited Liability Company Agreement between you and [●] (the “Agreement”). Capitalized terms used but not defined herein shall have the respective meanings given thereto in the Agreement.

Funding Obligation

Your funding obligation must be sent to us according to the following wiring instructions no later than [●].


Capital Call
$[●]
State Street Bank & Trust Co. ABA# 011 000 028 Account #: 10708758 Account Name: Middle Market Credit Fund, LLC REF: Middle Market Credit Fund, LLC / CYMN / DDA# 10708758

Upon receipt of funds, we shall, pursuant to the LSA deliver a notice to Citibank, N.A. which effects a Qualifying JV Pledge Reduction. We will notify the Members promptly if the Administrative Agent (as defined in the LSA) refuses to agree to effect a Qualifying JV Pledge Reduction and/or a Qualifying JV Pledge Release as the case may be.

If you have any questions regarding this notice, please contact [●] at [●] or by email at [●].

Sincerely,

Carlyle Global Credit Administration, L.L.C.

By:

[●]

Officer

B-1

Exhibit C

Other Disqualified Industries

C-1

Exhibit D

Form of Amended and Restated Revolving Subordinated Loans Promissory Note


$249,999,000			[●]

FOR VALUE RECEIVED, the undersigned, Middle Market Credit Fund, LLC, a Delaware limited liability company (the “Company”), does hereby promise to pay to [INSERT NAME OF MEMBER], a [INSERT TYPE OF ENTITY] (the “Payee”), or its order, at its offices in New York, New York, or such other address as may be duly designated by the holder of this Amended and Restated Revolving Subordinated Loans Promissory Note (this “Note”), Two Hundred Forty-Nine Million Nine Hundred Ninety-Nine Thousand Dollars ($249,999,000), or if less, the aggregate unpaid principal amount of all advances made by the Payee to the undersigned hereunder, with interest thereon as set forth herein. The initial advance, all subsequent advances and all payments made on account of principal shall be endorsed by the holder on the attached schedule to this Note. The principal amount of the loan together with any interest thereon shall be payable on the Maturity Date (as defined below). “Business Day” means a day upon which banks in New York City are not authorized or required by law to be closed.

1. Capitalized terms used but not defined herein shall have the meaning set forth in the Company’s Fifth Amended and Restated Limited Liability Company Agreement, dated as of [], 2023, as amended from time to time (the “LLC Agreement”).

2. The Payee agrees that from time to time during the term of this Note it shall lend to the Company, subject to the terms of the LLC Agreement and the terms of this Note, sums which, in the aggregate principal amount outstanding at any one time, shall not exceed Two Hundred Forty-Nine Million Nine Hundred Ninety-Nine Thousand Dollars ($249,999,000) (the “Credit”), and the Company agrees to borrow said sum from Payee upon the terms and conditions set forth herein.

3. The Credit shall be a revolving credit and the Company may, subject to the provisions of paragraphs 5 and 6 below governing prepayments and repayments and the terms of the LLC Agreement, request advances, repay and reborrow amounts during the continuation of this Note, subject to the terms of this Note and the LLC Agreement. Each revolving credit loan hereunder (an “Advance”) shall have a scheduled maturity date of December 31, 2024, unless an earlier date is listed on the Schedule attached hereto (such date, the “Maturity Date”) and made a part hereof (the “Schedule”). No Advance shall be made on or after December 31, 2024. All Advances shall be noted on the Schedule. Payee shall, and is hereby authorized by the Company to, endorse on the Schedule, or on a continuation of such Schedule attached hereto and made a part thereof and hereof, appropriate notations regarding the Advances; provided, however, that the failure to make, or error in making, any such notation shall not limit or otherwise affect the obligations of the Company hereunder.

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4. Interest due on this Note shall be 0.001% per annum, calculated on the basis of a 360-day year for the actual number of days elapsed prior to the Maturity Date and shall be compounded monthly.

5. This Note evidences a loan made to the Company by Payee and shall be treated as a Capital Contribution for purposes of Article 4 of the LLC Agreement and as a Member Loan. This Note may be prepaid at any time by the Company in whole or in part at the election of the Company, in an amount equal to the outstanding principal amount thereof plus accrued interest, subject to the provisions of paragraph 6.

6. (a) Payee, for itself and its successors and assigns, covenants and agrees that the obligation of the Company to make any payment on account of the principal of and interest on any Advance shall be subordinate and junior in right of payment to the Company’s obligations to the holders of Senior Indebtedness.

(b) Upon the occurrence and during the continuance of any default in the payment of principal of, premium, if any, or interest on any Senior Indebtedness beyond any applicable grace period, or in the event that any event of default with respect to any Senior Indebtedness shall have occurred and be continuing, or would occur as a result of the payment referred to hereinafter, permitting the holders of such Senior Indebtedness (or a trustee on behalf of the holders thereof) to accelerate the maturity thereof, then, unless and until such default or event of default shall have been cured or waived or shall have ceased to exist, no payment of principal of or interest on the Advances shall be made by the Company.

(c) Subject to the provisions of this paragraph 6, nothing contained in this paragraph 6 is intended to or shall impair, as between Payee and the Company, the obligation of the Company, which is absolute and unconditional, to pay to Payee the principal of and interest on the Advances when, where and as the same shall become due and payable, all in accordance with the terms of this Agreement, or is intended to or shall affect the relative rights of Payee and creditors of the Company other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent Payee from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if any, under this paragraph 6 of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy.

(d) No right of any present or future holders of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof with which any such holder may have or be otherwise charged. The holders of Senior Indebtedness may, at any time or from time to time and in their absolute discretion, change the manner, place or terms of payment, change or extend the time of payment of, or renew or alter, any such Senior Indebtedness, or amend or supplement any instrument

D-2

pursuant to which any such Senior Indebtedness is issued or by which it may be secured, or release any security therefor, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness including, without limitation, the waiver of default thereunder, all without notice to or assent from Payee and without affecting the obligations of the Company or Payee under this paragraph 6.

(e) Subject to the payment in full of all Senior Indebtedness, Payee shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of assets of the Company applicable to such Senior Indebtedness until the Advances shall be paid in full, and none of the payments or distributions to the holders of such Senior Indebtedness to which Payee would be entitled except for the provisions of this paragraph 6 or of payments over, pursuant to the provisions of this paragraph 6, to the holders of such Senior Indebtedness by Payee shall, as among the Company, its creditors other than the holders of such Senior Indebtedness, and Payee, be deemed to be a payment by the Company to or on account of such Senior Indebtedness; it being understood that the provisions of this paragraph 6 are and are intended solely for the purpose of defining the relative rights of Payee, on one hand, and the holders of the Senior Indebtedness, on the other hand.

(f) “Senior Indebtedness” means any and all indebtedness or liabilities of the Company other than the Advances and indebtedness and liabilities of the Company that are expressly of equal priority to the Advances.

7. The Payee hereby authorizes the Company to make any and all distributions that would otherwise be payable by the Company pursuant to Articles 6 of the LLC Agreement directly to the Payee and any other Members that have made Member Loans to the Company (to be split among them pro rata in accordance with the relative amounts of such Member Loans to the Company) until such time as the obligations evidenced by this Note have been paid in full.

8. If the Company fails to repay this Note on the Maturity Date, the Company shall reimburse the holder of this Note for all of its costs and expenses incurred in enforcing this Note, including reasonable attorneys’ fees and expenses. The obligations of the Company hereunder shall be recourse only to the Company’s Interest in the Company.

9. This Note may be discharged, terminated, amended, supplemented or otherwise modified only by an instrument in writing signed by the party against which enforcement of such discharge, termination or modification is sought.

10. To the fullest extent permitted by law, the Company hereby waives diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this Note and expressly agrees that, without in any way affecting the liability of the Company hereunder, the holder hereof may extend the time for payment of any amount due hereunder, accept additional security, release any party liable hereunder or any security now or hereafter securing this Note, without in any other way affecting the liability and obligation of the Company or any other person.

D-3

11. No failure by the holder hereof to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a breach thereof will constitute a waiver of any such term or of any such breach. No waiver of any breach will affect or alter this Note, which will continue in full force and effect, nor will such waiver affect or alter the rights of the holder hereof with respect to any other then existing or subsequent breach. The acceptance by the holder hereof of any payment hereunder that is less than payment in full of all amounts due at the time of such payment will not, without the express written consent of the holder hereof: (i) constitute a waiver of the right to exercise any of such holder’s remedies at that time or at any subsequent time, (ii) constitute an accord and satisfaction, or (iii) nullify any prior exercise of any remedy.

12. No acceptance of a past due payment or indulgences granted from time to time may be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of the holder hereof thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by law.

13. In case any one or more of the provisions of this Note are determined to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

14. Nothing contained in this Note or elsewhere may be deemed or construed to create a partnership or joint venture between the holder hereof and the Company or between the holder hereof and any other person, or cause the holder hereof to be responsible in any way for the debts or obligations of the Company or any other person.

15. It is hereby expressly agreed that, if from any circumstances whatsoever fulfillment of any provision of this Note, at the time performance of such provision will be due, violate any applicable usury statute or any other law, then ipso facto such provision will be conformed to comply with such statute or law. In no event shall the Company be bound to pay for the use, forbearance or detention of the money lent pursuant hereto, interest of more than the current legal limit; the right to demand any such excess being hereby expressly waived by the holder hereof.

16. THIS NOTE IS MADE UNDER AND IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CHOICE-OF-LAW RULES.

17. Any legal action or proceeding with respect to this Note may be brought in any state or federal court located in the State of New York. By execution and delivery hereof, the Company hereby accepts for itself and in respect of property, generally and unconditionally, the jurisdiction of the aforesaid courts. Nothing herein, however, shall affect the right of the holder hereof to commence legal proceedings or otherwise proceed against the Company in any other jurisdiction.

D-4

18. WITH RESPECT TO ANY SUCH LEGAL ACTION OR PROCEEDING, THE COMPANY HEREBY IRREVOCABLY WAIVES TRIAL BY JURY, AND THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS. SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE MADE BY THE PAYEE ON THE COMPANY BY MAILING A COPY OF THE SUMMONS AND ANY COMPLAINT TO THE MAKER, BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AT THE COMPANY’S PRINCIPAL OFFICE DETERMINED PURSUANT TO THE LLC AGREEMENT.

19. The parties agree to treat the loan as equity for U.S. federal income tax purposes.

20. This Note is issued in replacement for (but not in satisfaction of the indebtedness evidenced by) that certain Subordinated Loans Promissory Note, dated May 18, 2016 (the “Original Note”), issued by the Company in favor of Payee in connection with the execution and delivery of the Company’s Amended and Restated Limited Liability Company Agreement, dated as of February 29, 2016. All outstanding Advances under the Original Note shall continue in full force and effect under this Note and the LLC Agreement.

[Remainder of Page Intentionally Left Blank]

D-5

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on the date in the year first above written.


BORROWER:

Middle Market Credit Fund, LLC

By:
			Name:
			Title:

D-6

Schedule attached to Amended and Restated Revolving Subordinated Loans Promissory Note dated [●] of Middle Market Credit Fund, LLC payable to the order of Payee

Date

Amount of

Loan Made

Scheduled

Maturity

Date

Amount of

Principal

Repaid

Unpaid

Principal

Balance

Notation

Made By

The aggregate unpaid principal amount shown on this schedule shall be rebuttable presumptive evidence of the principal amount owing and unpaid on this Amended and Restated Revolving Subordinated Loans Promissory Note. The failure to record the date and amount of any revolving subordinated loan on this schedule shall not, however, limit or otherwise affect the obligations of Middle Market Credit Fund, LLC under this Amended and Restated Revolving Subordinated Loans Promissory Note to repay the principal amount of the loans, together with all interest accruing thereon.

D-7

Exhibit E

Initial Investment Criteria

1. Proposed Minimum Investment Size: $30 million

2. Yield (four year life for OID): 550-650 basis points

3. Minimum Revenue: $30 million

4. Minimum EBITDA: $15 million

5. Minimum First Lien and Corporate Rating (Actual or Expected): B3/B equivalent.

6. Transactions With Senior and Junior Debt:

a. Net Senior Leverage: up to 4.0x

b. Net Total Leverage: up to 6.0x

7. Transactions with Senior Debt Only:

a. Net Senior Leverage: to 4.75x

E-1

Exhibit F

Management Decisions

1. Matters requiring Board Approval include without limitation the following items contained in Sections 2 and 3 of this Exhibit F. Notwithstanding the matters specified in Sections 2 and 3 of this Exhibit F, all powers not designated to the Administrative Agent under the Administration Agreement or to the Investment Committee under Exhibit G hereto are retained, and shall be decided by the Board. Notwithstanding the foregoing or the powers reserved to the Board, the Members agree that CGCIM shall be able to use the Company’s cash on hand that is not required for disbursements of the Company within five (5) business days to repay any debt of the Company under the Company’s revolving credit facility payable to third parties without a penalty.

2. Board Approval shall be required for the Company or any Financing Subsidiary that is wholly-owned or otherwise controlled by the Company to do any of the following:

(i) Enter into any transaction with a Member or an Affiliate of a Member (except as permitted by this Agreement);

(ii) Make short sales of assets or engage in hedging or other derivative or commodities transactions;

(iii) Enter into any credit facility, including in particular enter into a senior credit facility to leverage the Company’s Investments, or materially modify or waive the terms thereof or make a voluntary prepayment;

(iv) Guarantee, or otherwise become liable for, the obligations of other Persons, including, without limitation, Portfolio Companies;

(v) Replace the Administrative Agent for the Company, or materially modify or waive the terms of the Administration Agreement;

(vi) Approve a sub-administration agreement, or materially modify or waive the terms of a sub-administration agreement;

(vii) File for bankruptcy;

(viii) Commence or settle any material claims or litigation;

(ix) Distribute Illiquid Securities;

(x) Make material changes to tax or accounting methods of the Company or its subsidiaries including tax elections;

(xi) Modify or waive any material provision of this Agreement;

F-1

(xii) Change the name or principal office, or open additional offices;

(xiii) Form, acquire an interest in, or transfer or otherwise dispose of an interest in, any Financing Subsidiary, or any other subsidiary owned by it, or materially modify or waive the terms thereof;

(xiv) Retain a custodian of its assets and open bank accounts on its behalf; and

(xv) Take any action or decision which pursuant to any provision of this Agreement requires Board Approval.

3. Each Member and each Board Member and their respective designees may, in the name and on behalf of the Company, do all things which it deems necessary, advisable or appropriate to make investment opportunities available to the Company, to carry out and implement matters approved by Board Approval, and to administer the activities of the Company, including:

(i) Execute and deliver all agreements, amendments and other documents and exercise and perform of all rights and obligations with respect to any Person in which the Company holds an interest, including Subsidiaries and other investment and financing vehicles;

(ii) Execute and deliver other agreements, amendments and other documents and exercise and perform all rights and obligations with respect to matters approved by Board Approval, or which are necessary, advisable or appropriate for the administration of the Company, including with respect to any contracts evidencing indebtedness for borrowed funds; and

(iii) Take any and all other acts delegated to such Member or Board Member by this Agreement or by Board Approval; provided that if such acts require Board Approval, such Board Approval has been obtained.

F-2

Exhibit G

Investment Committee Decisions

1. Matters requiring Investment Committee Approval include without limitation the following items contained in Section 2 of this Exhibit G and the definition of Valid Company Purpose in the Agreement.

2. Investment Committee Approval shall be required for the Company or any Financing Subsidiary that is wholly-owned or otherwise controlled by the Company to do any of the following:

(i) Take any action or decision which results in the investment of any amount (including any additional amount) in an Investment (other than an amount invested pursuant to a binding obligation previously entered into with Investment Committee Approval) or the sale, transfer or other disposition of any Investment (other than an amount sold, transferred or other disposed of pursuant to a binding obligation previously entered into with Investment Committee Approval);

(ii) Exercise remedies following a default under an Investment or materially modify or waive the terms of any Investment (including, without limitation, any distressed Investments) which results in any of the following: (A) an extension of additional capital or commitments; (B) an amendment or waiver of a financial covenant; (C) an approval of an acquisition which is expected to represent more than 20% of the earnings before interest, taxes, depreciation and amortization of the obligor or issuer; (D) an approval of a sale of assets which represents more than 20% of the earnings before interest, taxes, depreciation and amortization of the obligor or issuer; (E) the incurrence of additional senior debt by the obligor or issuer equal to or greater than 20% of the existing senior commitments or which results in leverage increasing by more than 0.5 times; (F) an amendment or waiver of any payment term, including mandatory prepayments; (G) an extension of the maturity of any payment; or (H) a forgiveness of principal or reduction in interest payable by any Investment; subject to the following: if the Investment Committee cannot agree as to any such action in respect of an Investment as set forth in (A) through (H) of this provision, then so long as there is at least one participant in such Investment that is not an Affiliate of a Member, the Investment Committee shall vote in a manner consistent with a majority in interest of the other participants in such Investment (excluding other participants that are Affiliates of a Member) unless such vote would result in a default by the Company under any Facility.

3. Each Investment Committee Member and their respective designees may, in the name and on behalf of the Company, do all things which it deems necessary, advisable or appropriate to make investment opportunities available to the Company, to carry out and implement matters approved by Investment Committee Approval and to administer the activities of the Company, including:

(i) Execute and deliver other agreements, amendments and other documents and exercise and perform all rights and obligations with respect to matters approved by Investment Committee Approval or which are necessary, advisable or appropriate for the

G-1

administration of the Company, including with respect to any contracts evidencing indebtedness for borrowed funds; and

(ii) Take any and all other acts delegated to such Investment Committee Member by this Agreement or by Investment Committee Approval; provided that if such acts require Investment Committee Approval, such Investment Committee Approval has been obtained.

G-2

Exhibit H

SEC Disclosure

On February 29, 2016, we agreed to co-invest with Credit Partners USA LLC (“Credit Partners”), a wholly-owned subsidiary of a Canadian pension fund, through Middle Market Credit Fund, LLC (the “MMCF”), an unconsolidated Delaware limited liability company. The purpose of MMCF is to invest primarily in first lien loans to middle-market companies. MMCF is managed by a six-member board of managers, on which we and Credit Partners each have equal representation. Investment decisions must be unanimously approved by a quorum of the investment committee, which is comprised of persons appointed equally by us and Credit Partners. Establishing a quorum for MMCF’s board of managers requires at least four members to be present at a meeting, including at least two of our representatives and two of Credit Partners’ representatives. We and Credit Partners each have 50% economic ownership of MMCF and have subscribed to fund from time to time capital of MMCF of $250 million, subject in each case to the prior approval of MMCF’s board of managers.

H-1

Document

Exhibit 10.2

EXECUTION VERSION

Second Supplemental Indenture

This Second Supplemental Indenture, expected to be dated on or about June 30, 2023 (the “Second Supplemental Indenture”) to the Indenture dated as of June 26, 2015 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Indenture”) between Carlyle Direct Lending CLO 2015-1R LLC, a Delaware limited liability company (f/k/a Carlyle GMS Finance MM CLO 2015-1 LLC, the “Issuer”) and State Street Bank and Trust Company, as trustee (the “Trustee”). Capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Indenture.

WITNESSETH:

WHEREAS, pursuant to Section 8.1(c) of the Indenture, the Trustee and the Issuer may execute one or more indentures supplemental to the Indenture without obtaining the consent of any Holders and without being required to determine whether or not any Class of Securities would be materially and adversely affected thereby if the proposed Alternative Reference Rate is the Market Replacement Reference Rate;

WHEREAS, the conditions set forth for an amendment to the Indenture pursuant to Article VIII of the Indenture have been satisfied;

WHEREAS, notice and a copy substantially in the form of this Supplemental Indenture has been delivered to the Servicer, the Collateral Administrator, the Rating Agencies, the Noteholders and the Fiscal Agent at least 10 Business Days prior to the execution of this Supplemental Indenture in accordance with the provisions of Section 8.3 of the Indenture;

WHEREAS, the Issuer wishes to amend the Indenture as set forth below;

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the parties agree as follows:

1. Amendments.

(a) As of the date hereof, the Indenture is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the bold and double-underlined text (indicated textually in the same manner as the following example: bold and double- underlined text) as set forth on the pages of the Indenture attached as Appendix A hereto. For the avoidance of doubt, the Rated Notes will continue to accrue interest using LIBOR as the Reference Rate for the remainder of the current Interest Accrual Period and the conforming changes will be effective at the commencement of the next succeeding Interest Accrual Period following the date hereof.

2. Transaction Documents.

By their execution or consent hereto, each party hereto agrees that any references to “LIBOR” or equivalent terms in the Transaction Documents are hereby amended and replaced with the “Reference Rate”, as applicable.

3. Governing Law.

THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

4. Execution in Counterparts.

This Second Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of an executed counterpart of this Second Supplemental Indenture by electronic means (including email or telecopy) will be effective as delivery of a manually executed counterpart of this Second Supplemental Indenture.

5. Concerning the Trustee.

The recitals contained in this Second Supplemental Indenture 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 Second Supplemental Indenture (except as may be made with respect to the validity of the Trustee’s obligations hereunder). In entering into this Second Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

6. No Other Changes.

Except as provided herein, the Indenture shall remain unchanged and in full force and effect and each reference to the Indenture and words of similar import in the Indenture, as amended hereby, shall be a reference to the Indenture as amended hereby and as the same may be further amended, supplemented and otherwise modified and in effect from time to time.

7. Execution, Delivery and Validity.

The Issuer represents and warrants to the Trustee that this Second Supplemental Indenture has been duly and validly executed and delivered by the Issuer and constitutes its legal, valid and binding obligation, enforceable against the Issuer in accordance with its terms.

8. Binding Effect.

This Second Supplemental Indenture shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

9. Amended and Restated Indenture.

This Second Supplemental Indenture may be incorporated into an amended and restated Indenture.

10. Limited Recourse.

The obligations of the Issuer hereunder are limited recourse obligations of the Issuer payable solely from the Assets in accordance with the Priority of Payments.

11. Non-Petition.

Each party and each Holder of the First Refinancing Replacement Notes agrees not to, prior to the date which is one year (or, if longer, the applicable preference period then in effect) plus one day after the payment in full of all Securities, institute against, or join any other Person in instituting against, the Issuer

any bankruptcy, reorganization, arrangement, insolvency, winding-up, moratorium or liquidation proceedings, or other similar proceedings under U.S. federal or state bankruptcy or similar laws.

12. Direction to Trustee.

The Issuer hereby directs the Trustee to execute this Second Supplemental Indenture and acknowledges and agrees that the Trustee will be fully protected in relying upon the foregoing direction.

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

CARLYLE DIRECT LENDING CLO 2015-1R LLC, as

Issuer


By:						/s/ Tom Hennigan
						Name: Tom Hennigan
						Title: Managing Director

STATE STREET BANK AND TRUST COMPANY, as

Trustee


By:
						Name:
						Title:

CARLYLE DIRECT LENDING CLO 2015-1R LLC, as

Issuer

Executed as a Deed


By:
						Name:
						Title:

STATE STREET BANK AND TRUST COMPANY, as

Trustee


By:						/s/ Brian Peterson
						Name: Brian Peterson
						Title: Vice President

APPENDIX A

or expenses of any third party unless the Collateral Manager shall have first paid the fees or expenses that are the subject of such reimbursement.

“Affected Class”: Any Class of Rated Notes that, as a result of the occurrence of a Tax Event described in the definition of Tax Redemption, has not received 100% of the aggregate amount of principal and interest that would otherwise be due and payable to such Class on any Payment Date.

“Affiliate”: With respect to a Person, (a) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (b) any other Person who is a director, Officer, employee or general partner (i) of such Person, (ii) of any subsidiary or parent company of such Person or (iii) of any Person described in clause (a) of this sentence. For the purposes of this definition, “control” of a Person means 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 Person or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. For purposes of this definition, no entity to which the Collateral Manager provides collateral management or advisory services shall be deemed an Affiliate of the Collateral Manager solely because the Collateral Manager acts in such capacity, unless either of the foregoing clauses (a) or (b) is satisfied as between such entity and the Collateral Manager. For the avoidance of doubt, an obligor will not be considered an Affiliate of any other obligor (A) solely due to the fact that each such obligor is under the control of the same financial sponsor or (B) if they have distinct corporate family ratings and/or distinct issuer credit ratings.

“Agent Members”: Members of, or participants in, DTC, Euroclear or Clearstream.

“Aggregate Coupon”: As of any Measurement Date, the sum of (A) the sum of the products obtained by multiplying, in the case of each Fixed Rate Obligation (other than Purchased Discount Obligations), (a) the stated coupon on such Collateral Obligation (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation and, in the case of any security that in accordance with its terms is making payments due thereon “in kind” in lieu of Cash, any interest to the extent not paid in Cash) expressed as a percentage; and (b) the Principal Balance (including for this purpose any capitalized interest) of such Collateral Obligation plus (B) the Discount-Adjusted Coupon.

“Aggregate Excess Funded Spread”: As of any Measurement Date, the amount obtained by multiplying: (a) the amount equal to the Reference RateTerm SOFR Rate-based rate applicable to the Rated Notes during the Interest Accrual Period in which such Measurement Date occurs; by (b) the amount (not less than zero) equal to (i) the Aggregate Principal Balance (including for this purpose any capitalized interest) of the Collateral Obligations as of such Measurement Date minus (ii) the Reinvestment Target Par Balance.

“Aggregate Funded Spread”: As of any Measurement Date, the sum of

(a) in the case of each Floating Rate Obligation (other than Purchased Discount Obligations) that bears interest at a spread over a London interbank offered rate based indexan index based on the Term SOFR Reference Rate, (i) the

stated interest rate spread (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation and, in the case of any security that in accordance with its terms is making payments due thereon “in kind” in lieu of Cash, any interest to the extent not paid in Cash) on such Collateral Obligation above such index multiplied by (ii) the Principal Balance (including for this purpose any capitalized interest but excluding the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation) of such Collateral Obligation; and

(b) in the case of each Floating Rate Obligation (other than Purchased Discount Obligations) that bears interest at a spread over an index other than a London interbank offered rate based indexan index based on the Term SOFR Reference Rate, (i) the excess of the sum of such spread and such index (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation and, in the case of any security that in accordance with its terms is making payments due thereon “in kind” in lieu of Cash, any interest to the extent not paid in Cash) over the ReferenceTerm SOFR Rate as of the immediately preceding Interest Determination Date (which spread or excess may be expressed as a negative percentage) multiplied by (ii) the Principal Balance (including for this purpose any capitalized interest but excluding the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation) of each such Collateral Obligation; and

provided that for purposes of this definition, the interest rate spread will be deemed to be, with respect to any Floating Rate Obligation that has a ReferenceTerm SOFR Rate floor, the stated interest rate spread plus, if positive, (x) the ReferenceTerm SOFR Rate floor value minus (y) the ReferenceTerm SOFR Rate as in effect for the current Interest Accrual Period.

“Aggregate Outstanding Amount”: As of any date, with respect to any of the (i) Notes, the aggregate unpaid principal amount of such Notes Outstanding (including any Deferred Interest previously added to the principal amount of any Class of Rated Notes that remains unpaid) on such date and (ii) Preferred Interests, the amount represented by such Outstanding Preferred Interests, assuming an amount of $1.00 per Preferred Interest.

“Aggregate Principal Balance”: When used with respect to all or a portion of the Collateral Obligations or the Assets, the sum of the Principal Balances of all or of such portion of the Collateral Obligations or Assets, respectively.

“Aggregate Unfunded Spread”: As of any Measurement Date, the sum of the products obtained by multiplying (i) for each Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation (other than Defaulted Obligations), the related commitment fee then in effect as of such date and (ii) the undrawn commitments of each such Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation as of such date.

(xv) is not the subject of an Offer for a price less than its purchase price plus all accrued and unpaid interest;

(xvi) unless such obligation is a Long-Dated Obligation, does not mature after the Stated Maturity of the Notes;

(xvii) if a Floating Rate Obligation, accrues interest at a floating rate determined by reference to (a) the Dollar prime rate, federal funds rate or LIBORthe Reference Rate or (b) a similar interbank offered rate or commercial deposit rate or (c) any other then-customary index;

(xviii) is Registered;

(xix) is not a Synthetic Security;

(xx) does not pay interest less frequently than semi-annually;

(xxi) does not include or support a letter of credit;

(xxii) is not an interest in a grantor trust;

(xxiii) is purchased at a price at least equal to 60.0% of its par amount;

(xxiv) is issued by an obligor Domiciled in the United States, Canada, a Group I Country, a Group II Country, a Group III Country or a Tax Jurisdiction;

(xxv) is not issued by a sovereign, or by a corporate issuer located in a country, which sovereign or country on the date on which the obligation is acquired by the Issuer imposed foreign exchange controls that effectively limit the availability or use of

U.S. Dollars to make when due the scheduled payments of principal thereof and interest thereon;

(xxvi) is not a Bond, Senior Secured Bond, Senior Secured Floating Rate Note, Senior Unsecured Bond, Step-Down Obligation, Step-Up Obligation, commodity forward contract, Bridge Loan, letter of credit or Letter of Credit Reimbursement Obligation;

(xxvii) is not issued by obligors Domiciled in Greece, Ireland, Italy, Portugal, Spain, Anguilla, Curacao, Indonesia, Jamaica, Kazakhstan, Marshall Islands, Trinidad and Tobago, Sint Maarten and Turkey;

(xxviii) is an obligation of an obligor that had earnings before interest, taxes, depreciation and amortization (as defined in the Underlying Instrument for such obligation) of at least $5,000,000 during its most recent fiscal year; and

Amount and (z) the third-largest S&P Industry Classification may represent up to 15.0% of the Collateral Principal Amount;

(xv) not more than 17.5% of the Collateral Principal Amount may consist of Broadly Syndicated Cov-Lite Loans;

(xvi) not more than 2.5% of the Collateral Principal Amount may consist of Middle Market Cov-Lite Loans; and

(xvii) not more than 50.0% of the Collateral Principal Amount may consist of debt obligations that are part of a credit facility with a facility size on the date of origination thereof greater than U.S.$500,000,000.

“Confidential Information”: The meaning specified in Section 14.15(b).

“Contribution Agreement”: The Contribution Agreement dated as of the Closing Date between the Issuer and the Originator, as amended from time to time.

“Controlling Class”: The Class A-1 Notes so long as any Class A-1 Notes are Outstanding; then the Class A-2 Notes so long as any Class A-2 Notes are Outstanding; then the Class B Notes so long as any Class B Notes are Outstanding; then the Class C Notes so long as any Class C Notes are Outstanding; and then the Preferred Interests.

“Controlling Person”: A Person (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of the Issuer or any Person who provides investment advice for a fee (direct or indirect) with respect to such assets or an affiliate of any such Person. For this purpose, an “affiliate” of a person includes any person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the person. “Control,” with respect to a person other than an individual, means the power to exercise a controlling influence over the management or policies of such person.

“Corporate Trust Office”: The designated corporate trust office of the Trustee, currently located at 1 Iron Street, Boston1776 Heritage Drive, Mail Stop: JAB0527, North Quincy, Massachusetts 0221002171, Attention: Structured Trust and Analytics, Email: StructuredTrustandAnalytics@StateStreet.com, or such other address as the Trustee may designate from time to time by notice to the Holders, the Collateral Manager, the Issuer and the Fiscal Agent, or the principal corporate trust office of any successor Trustee.

“Cov-Lite Loan”: A Senior Secured Loan whose Underlying Instrument (i) does not contain any financial covenants or (ii) does not require the borrower to comply with a Maintenance Covenant; provided that a Loan described in clause (i) or (ii) above which contains either a cross‐default provision to, or is pari passu with, another loan of the underlying obligor or

cross-acceleration that requires the underlying obligor to comply with an Incurrence Covenant or a Maintenance Covenant will be deemed not to be a Cov‐Lite Loan. For the avoidance of doubt,

a loan that is capable of being described in clause (i) or (ii) above only (x) until the expiration of a certain period of time after the initial issuance thereof or (y) for so long as there is no funded balance in respect thereof, in each case as set forth in the related Underlying Instruments, will be

Floating Rate Notes, if the 15th day of the relevant month is not a Business Day, then the Interest Accrual Period with respect to such Payment Date shall end on but exclude the Business Day on which payment is made and the succeeding Interest Accrual Period shall begin on and include such date.

“Interest Coverage Ratio”: For any designated Class or Classes of Rated Notes, as of any date of determination, the percentage derived from the following equation: (A – B) / C, where:

A = The Collateral Interest Amount as of such date of determination;

B = Amounts payable (or expected as of the date of determination to be payable) on the following Payment Date as set forth in clauses (A) and (B) under the Priority of Interest Proceeds; and

C = Interest due and payable on the Rated Notes of such Class or Classes and each Class of Rated Notes that rank senior to or pari passu with such Class or Classes (excluding Deferred Interest, but including any interest on Deferred Interest with respect to the Deferred Interest Notes) on such Payment Date.

“Interest Coverage Test”: A test that is satisfied with respect to any Class or Classes of Rated Notes as of any date of determination after the second Payment Date following the First Refinancing Date if (i) the Interest Coverage Ratio for such Class or Classes is at least equal to the Required Interest Coverage Ratio for such Class or Classes or (ii) such Class or Classes is no longer Outstanding.

“Interest Determination Date”: With respect to (a) the first Interest Accrual Period, (x) for the period from the Closing Date to but excluding the First Interest Determination End Date, the second London BankingU.S. Government Securities Business Day preceding the Closing Date, and (y) for the remainder of the first Interest Accrual Period, the second London BankingU.S. Government Securities Business Day preceding the First Interest Determination End Date, and (b) each Interest Accrual Period thereafter, the second London BankingU.S. Government Securities Business Day preceding the first day of such Interest Accrual Period.

“Interest Diversion Test”: A test that shall be satisfied on any Measurement Date after the first Payment Date following the First Refinancing Date on which the Class C Notes remain outstanding, if the Overcollateralization Ratio for the Class C Notes is at least equal to 117.4%.

“Interest Only Security”: Any obligation or security that does not provide in the related Underlying Instruments for the payment or repayment of a stated principal amount in one or more installments on or prior to its stated maturity.

“Interest Proceeds”: With respect to any Collection Period or Determination Date, without duplication, the sum of:

(i) all payments of interest and delayed compensation (representing compensation for delayed settlement) received in Cash by the Issuer during the related Collection Period on the Collateral Obligations and Eligible Investments, including the accrued interest received in connection with a sale thereof during the related

facility, (iii) the LOC Agent Bank passes on (in whole or in part) the fees and any other amounts it receives for providing the LC to the lender/participant and (iv)(a) the related Underlying Instruments require the Issuer to fully collateralize the Issuer’s obligations to the related LOC Agent Bank or obligate the Issuer to make a deposit into a trust in an aggregate amount equal to the related LC Commitment Amount, (b) the collateral posted by the Issuer is held by, or the Issuer’s deposit is made in, a depository institution meeting the requirement set forth in the definition of “Eligible Accounts” and (c) the collateral posted by the Issuer is invested in Eligible Investments.

“ LIBOR”: With respect to the Rated Notes for any Interest Accrual Period (or, for the fir st Interest Accrual Period, the relevant portion thereof), will equal (a) the rate appearing on the Reuters Screen for deposits with the Index Maturity; provided that LIBOR with respect to the Rated Notes for the fir st Interest Accrual Period will equal the linear interpolation between the rate appearing on the Reuters Screen for deposits with the next shorter term and the rate appearing on the Reuters Screen for deposits with the next longer term or (b) if such rate is unavailable at the time LIBOR is to be determined, LIBOR shall be determined on the basis of the rates at which deposits in U.S. Dollars are offered by four major banks in the London market selected by the Calculation Agent after consultation with the Collateral Manager (the “ Reference Banks”) at approximately 11:00 a.m., London time, on the Interest Determination Date to prime banks in the London interbank market for a period approximately equal to such Interest Accrual Period and an amount approximately equal to the amount of the Aggregate Outstanding Amount of the Rated Notes. The Calculation Agent will request the London office of each Reference Bank to provide a quotation of its rate. If at least two such quotations are provided, LIBOR shall be the arithmetic mean of such quotations (rounded upward to the next higher 1/100,000). If fewer than two quotations are provided as requested, LIBOR with respect to such period will be the arithmetic mean of the rates quoted by three major banks in New York, New York selected by the Calculation Agent after consultation with the Collateral Manager at approximately 11:00 a.m., New York time, on such Interest Determination Date for loans in U.S. Dollars to leading European banks for a term approximately equal to such Interest Accrual Period and an amount approximately equal to the amount of the Rated Notes. If the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures described above, LIBOR will be LIBOR as determined on the previous Interest Determination Date. LIBOR, when used with respect to a Collateral Obligation, means the LIBOR rate determined in accordance with the terms of such Collateral Obligation.

“Limited Liability Company Agreement”: The limited liability company agreement of the Issuer, effective as of June 26, 2015, as amended from time to time.

“Listed Notes”: The Rated Notes specified as such in Section 2.3 for so long as such Class of Rated Notes is listed on the Irish Stock Exchange.

“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.

“Long-Dated Obligation”: Any Collateral Obligation received in connection with a workout or restructuring that has a stated maturity later than the Stated Maturity of the Rated Notes.

“LOC Agent Bank”: The meaning specified in the definition of the term Letter of Credit Reimbursement Obligation.

“ London Banking Day”: A day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London, England.

“Maintenance Covenant”: A covenant by any borrower to comply with one or more financial covenants during each reporting period (but not more frequently than quarterly), whether or not such borrower has taken any specified action; provided that a covenant that otherwise satisfies the definition hereof and only applies when amounts are outstanding under the related loan shall be a Maintenance Covenant.

“Majority”: With respect to any Class or Classes, the Holders of more than 50% of the Aggregate Outstanding Amount of the Securities of such Class or Classes.

“Management Fee”: The Base Management Fee, the Subordinated Management Fee and the Incentive Management Fee.

“Manager Securities”: As of any date of determination, (a) all Securities held on such date by

(i) the Collateral Manager, (ii) any Affiliate of the Collateral Manager, or (iii) any account, fund, client or portfolio managed or advised on a discretionary basis by the Collateral Manager or any of its Affiliates and (b) all Securities as to which economic exposure is held on such date (whether through any derivative financial transaction or otherwise) by any Person identified in the foregoing clause (a).

“Margin Stock”: “Margin Stock” as defined under Regulation U issued by the Board of Governors of the Federal Reserve System, including any debt security which is by its terms convertible into Margin Stock.

“Market Replacement Reference Rate”: The reference rate and, if applicable, the methodology for calculating such base rate (which in all cases may include a Reference Rate Modifier recognized or acknowledged by the Loan Syndications and Trading Association®) determined by the Collateral Manager (in its commercially reasonable discretion) based on (1) the rate recognized as a replacement for LIBORthe Term SOFR Rate in the leveraged loan market by the Alternative Reference Rates Committee convened by the Federal Reserve (which may be in the form of a press release, a member announcement, a member advice, a letter, protocol, publication of standard terms or other writing), (2) the rate acknowledged as a standard replacement in the leveraged loan market for LIBORthe Term SOFR Rate by the Loan Syndications and Trading Association® (which may be in the form of a press release, a member announcement, a member advice, a letter, protocol, publication of standard terms or other writing) or (3) the rate that is consistent with the reference rate being used in at least 50% (by principal amount) of (x) the quarterly pay Floating Rate Obligations included in the Assets or (y)

the floating rate securities issued in the new-issue collateralized loan obligation market in the prior month that bear interest based on a base rate other than LIBORthe Term SOFR Rate.

“Market Value”: With respect to any Loans or other Assets, the amount (determined by the Collateral Manager) equal to the product of the principal amount thereof and the price determined in the following manner:

(i) the bid price determined by the Loan Pricing Corporation, Markit Group Limited, Loan X Mark-It Partners, FT Interactive, Bridge Information Systems, KDP, IDC, Bank of America High Yield Index, Interactive Data Pricing and Reference Data, Inc., Pricing Direct Inc., S&P Security Evaluations Service, Thompson Reuters Pricing Service, TradeWeb Markets LLC or any other nationally recognized loan or bond pricing service selected by the Collateral Manager (with notice to the Rating Agencies); or

(ii) if a price described in clause (i) is not available,

(A) the average of the bid prices determined by three broker-dealers active in the trading of such asset that are Independent from each other and the Issuer and the Collateral Manager;

(B) if only two such bids can be obtained, the lower of the bid prices of such two bids; or

(C) if only one such bid can be obtained, and such bid was obtained from a Qualified Broker/Dealer, the bid price of such bid; provided that the aggregate principal balance of Collateral Obligations held by the Issuer at any one time with Market Values determined pursuant to this clause (ii)(C) may not exceed 5% of the Collateral Principal Amount; or

(iii) if a price described in clause (i) or (ii) is not available, then the Market Value of an asset will be the lower of (x) 70% of the notional amount of such asset, (y) the price at which the Collateral Manager reasonably believes such asset could be sold in the market within 30 days, as certified by the Collateral Manager to the Trustee and determined by the Collateral Manager consistent with the manner in which it would determine the market value of an asset for purposes of other funds or accounts managed by it; provided, however, that, if the Collateral Manager is not a registered investment adviser (or, relying adviser) under the Advisers Act, the Market Value of any such asset may not be determined in accordance with this clause (iii)(y) for more than 30 days; and (z) solely if such asset either was purchased within the three preceding months or was previously assigned a Market Value within the three preceding months in accordance with clause (i) or (ii), either (A) if such asset was purchased within the three preceding months, its purchase price or (B) otherwise, the last Market Value that was assigned to it; or

“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 last Business Day of the month preceding the applicable Payment Date.

“Redemption Date”: Any Business Day specified for a redemption of Securities pursuant to Article IX.

“Redemption Price”: (a) For each Class of Rated Notes to be redeemed or re-priced (x) 100% of the Aggregate Outstanding Amount of such Class, plus (y) accrued and unpaid interest thereon (including interest on any accrued and unpaid Deferred Interest, in the case of the Deferred Interest Notes) to the Redemption Date or Re-Pricing Redemption Date, as applicable, and

(b) for each Preferred Interest and Reinvesting Holder Note, its proportional share (based on the Aggregate Outstanding Amount of the Preferred Interests or Reinvesting Holder Notes, as applicable) of the portion of the proceeds of the remaining Assets (after giving effect to the Optional Redemption or Tax Redemption of the Rated Notes in whole or after all of the Rated Notes have been repaid in full, payment in full of (and/or creation of a reserve for) all expenses (including all Management Fees and Administrative Expenses) of the Issuer) and payment of all other amounts senior to such Securities that is distributable to the Preferred Interests or Reinvesting Holder Notes, as applicable, in accordance with the Priority of Payments; provided that Holders of 100% of the Aggregate Outstanding Amount of any Class of Rated Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Rated Notes in any Optional Redemption (including a Refinancing) in which all Outstanding Classes of Rated Notes will be redeemed.

“Reference Rate”: With respect to the Rated Notes, the greater of (a) zero and (b)(i) LIBORthe Term SOFR Rate plus the Term SOFR Adjustment, or (ii) the Alternativealternative Reference Rate adopted in a Reference Rate Amendment. With respect to the Collateral Obligations, the reference rate applicable to such Collateral Obligations calculated in accordance with the related Underlying Instruments.

“Reference Rate Amendment”: A supplemental indenture to modify the Reference Rate.

“Reference Rate Modifier”: A modifier applied to a reference rate in order to cause such rate to be comparable to LIBORthe Reference Rate, which may include an addition to or subtraction from such unadjusted rate.

“Refinancing”: The meaning specified in Section 9.2(d). “Refinancing Proceeds”: The Cash proceeds from the Refinancing.

“Register” and “Registrar”: The respective meanings specified in Section 2.5(a).

“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.

“Regulation S”: Regulation S under the Securities Act.

obligor; (b) is secured by a valid second-priority perfected security interest or lien in, to or on specified collateral securing the obligor’s obligations under the Second Lien Loan the value of which is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal or higher seniority secured by a lien or security interest in the same collateral and (c) is not secured solely or primarily by common stock or other equity interests; provided that the limitation set forth in this clause (c) 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 specified in the Granting Clauses. “Secured Parties”: The meaning specified in the Granting Clauses.

“Securities”: The Rated Notes, the Reinvesting Holder Notes and the Preferred Interests, collectively.

“Securities Act”: The United States Securities Act of 1933, as amended. “Securities Intermediary”: As defined in Section 8-102(a)(14) of the UCC.

“Selling Institution”: The entity obligated to make payments to the Issuer under the terms of a Participation Interest.

“Selling Institution Collateral”: The meaning specified in Section 10.4.

“Senior Secured Bond”: Any obligation that: (a) constitutes borrowed money, (b) is in the form of, or represented by, a bond, note, certificated debt security or other debt security (other than any of the foregoing that evidences a Loan, a Senior Secured Floating Rate Note or a Participation Interest), (c) is not secured solely by common stock or other equity interests, (d) if it is subordinated by its terms, is subordinated only to indebtedness for borrowed money, trade claims, capitalized leases or other similar obligations and (e) is secured by a valid first priority perfected security interest or lien in, to or on specified collateral securing the obligor’s obligations under such obligation.

“Senior Secured Floating Rate Note”: Any obligation that: (a) constitutes borrowed money,

(b) is in the form of, or represented by, a bond, note (other than any note evidencing a Loan), certificated debt security or other debt security, (c) is expressly stated to bear interest based upon a London interbank offered rateat a spread over an index based on the Term SOFR Reference Rate for Dollar deposits in Europe or a relevant reference bank’s published base rate or prime rate for Dollar-denominated obligations in the United States or the United Kingdom,

(d) does not constitute, and is not secured by, Margin Stock, (e) if it is subordinated by its terms, is subordinated only to indebtedness for borrowed money, trade claims, capitalized leases or other similar obligations and (f) is secured by a valid first priority perfected security interest or lien in, to or on specified collateral securing the obligor’s obligations under such obligation.

“Senior Secured Loan”: Any assignment of, or Participation Interest in, a Loan (other than a First Lien Last Out Loan) that: (a) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the obligor of the Loan (other than with respect to a Senior Working Capital Facility, if any, or trade claims, capitalized leases or similar obligations); (b) 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, which security interest or lien is subject to customary liens and liens securing a Senior Working Capital Facility, if any; (c) 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) 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 (d) is not secured solely or primarily by common stock or other equity interests; provided that, other than for purposes of the S&P Recovery Rate, the limitation set forth in this clause (d) shall not apply with respect to a Loan made to an obligor that is secured solely or primarily by the stock of, or other equity interests in, such obligor or one or more of its subsidiaries to the extent that either (1) in the Collateral Manager’s judgment, the applicable Underlying Instruments of such Loan limit the activities of such obligor or such subsidiary, as applicable, in such a manner so as to provide a reasonable expectation that (x) cash flows from such obligor or from such subsidiary and such obligor, as applicable, are sufficient to provide debt service on such Loan and (y) assets of such obligor or of such subsidiary and such obligor, as applicable, would be available to repay principal of and interest on such Loan in the event of the enforcement of such Underlying Instruments or (2) the granting by such obligor or any such subsidiary of a lien on its own property (whether to secure such Loan or to secure any other similar type of indebtedness owing to third parties) would violate laws or regulations applicable to such obligor or to such subsidiary.

“Senior Unsecured Bond”: Any unsecured obligation that: (a) constitutes borrowed money,

(b) is in the form of, or represented by, a bond, note, certificated debt security or other debt security (other than any of the foregoing that evidences a Loan or Participation Interest) and (c) if it is subordinated by its terms, is subordinated only to indebtedness for borrowed money, trade claims, capitalized leases or other similar obligations.

“Senior Working Capital Facility”: With respect to a Loan, a working capital facility incurred by the obligor of such Loan; provided that the outstanding principal balance and unfunded commitments of such working capital facility do not exceed 20% of the sum of (x) the outstanding principal balance and unfunded commitments of such working capital facility, plus

(y) the outstanding principal balance of the Loan, plus (z) the outstanding principal balance of any other debt for borrowed money incurred by such obligor that is pari passu with such Loan.

“ SIFMA Website”: The internet website of the Securities Industry and Financial Markets Association, currently located at https://www.sifma.org/resources/general/holidayschedule, or such successor website as identified by the Collateral Manager to the Trustee and the Calculation Agent.

“Similar Laws”: Local, state, federal or non-U.S. laws that are substantially similar to the fiduciary responsibility provisions of ERISA and Section 4975 of the Code.

“ SOFR”: With respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York' s Website.

“Sole Equity Owner”: A person who is treated for U.S. federal income tax purposes as the sole owner of the Preferred Interests, the Reinvesting Holder Notes and the other securities that are treated as equity of the Issuer for U.S. federal income tax purposes.

“Solvency II”: Article 135(2) of European Union Directive 2009/138/EC, as amended from time to time.

“Solvency II Level 2 Regulation”: Article 254 of European Union Commission Delegated Regulation (EU) 2015/35 supplementing Solvency II, as amended from time to time.

“Solvency II Retention Requirements”: Solvency II, as supplemented by the Solvency II Level 2 Regulation, together with any implementing or delegated regulations, technical standards and guidance related thereto as may be adopted, amended, replaced or supplemented from time to time, provided that any reference to the Solvency II Retention Requirements shall be deemed to include any successor or replacement provisions of Solvency II or the Solvency II Level 2 Regulation (without prejudice to the availability and benefit of any grandfathering arrangements that are implemented in connection with the successor or replacement provisions in respect of securitisations issued or closed prior to the relevant provisions becoming effective).

“Special Petition Expenses”: Petition Expenses in an amount up to U.S.$250,000 in the aggregate (such limit to be in effect throughout the transaction and until the dissolution of the Issuer).

“Special Priority of Payments”: The meaning specified in Section 11.1(a)(iii). “Special Redemption”: The meaning specified in Section 9.6.

“Special Redemption Date”: The meaning specified in Section 9.6.

“Specified Amendment”: With respect to any Carlyle Collateral Obligation, any amendment, waiver or modification which would:

(a) modify the amortization schedule with respect to such Carlyle Collateral Obligation in a manner that (i) reduces the dollar amount of any Scheduled Distribution by more than the greater of (x) 25% and (y) U.S.$250,000,

(ii) postpones any Scheduled Distribution by more than two payment periods or

(iii) causes the Weighted Average Life of the applicable Carlyle Collateral Obligation to increase by more than 25%;

Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations) 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 by the Issuer (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.

“Tax Jurisdiction”: (a) A sovereign jurisdiction that is commonly used as the place of organization of special purpose vehicles (including but not limited to the Bahamas, Bermuda, the British Virgin Islands, the U.S. Virgin Islands, Jersey, Singapore, the Cayman Islands, St. Maarten, the Channel Islands, the Netherlands Antilles and Curaçao) and (b) any other jurisdiction as may be designated a Tax Jurisdiction by the Collateral Manager with notice to S&P from time to time.

“Tax Matters Partner”: The meaning specified in Section 7.17(g)(ii). “Tax Redemption”: The meaning specified in Section 9.3(a).

“Temporary Global Note”: Any Note sold in an “offshore transaction” to non-“U.S. persons” (each as defined in Regulation S) in reliance on Regulation S and issued in the form of a Temporary Global Note as specified in Section 2.2(c) in definitive, fully registered form without interest coupons substantially set forth in the applicable Exhibit A hereto.

“ Term SOFR Adjustment” : The spread adjustment of 0.26161% (26.161 basis points).

“ Term SOFR Administrator”: CME Group Benchmark Administration Limited, or a successor administrator of the Term SOFR Reference Rate selected by the Collateral Manager with notice to the Trustee and the Collateral Administrator.

“ Term SOFR Rate”: The Term SOFR Reference Rate for the Index Maturity, as such rate is published by the Term SOFR Administrator; provided that if as of 5:00 p.m. (New York City time) on any Interest Determination Date the Term SOFR Reference Rate for the Index Maturity has not been published by the Term SOFR Administrator, then the Term SOFR Rate will be (x) the Term SOFR Reference Rate for the Index Maturity as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for the Index Maturity was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than five Business Days prior to such Interest Determination Date or (y) if the Term SOFR Reference Rate cannot be determined in accordance with clause (x) of this proviso, the Term SOFR Rate shall be the Term SOFR Reference Rate as determined in the previous Interest Determination Date. When used in the definitions of Aggregate Excess Funded Spread and Aggregate Funded Spread, if the Term SOFR Rate with respect to the Notes would be a rate less than zero, the Term SOFR Rate with respect to the Notes for such period shall be zero.

“ Term SOFR Reference Rate”: The forward-looking term rate based on SOFR.

“Transfer Certificate”: A duly executed certificate substantially in the form of the applicable Exhibit B.

“Transfer Deposit Amount”: On any date of determination with respect to any Carlyle Collateral Obligation, an amount equal to the sum of the outstanding principal balance of such Carlyle Collateral Obligation, together with accrued interest thereon through such date of determination.

“Treasury Regulations”: The regulations promulgated under the Code.

“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.

“Trustee’s Website”: The Trustee’s internet website, which shall initially be located at www.mystatestreet.com, or such other address as the Trustee may provide to the Issuer, the Collateral Manager and the Rating Agencies.

“UCC”: The Uniform Commercial Code, as in effect from time to time in the State of New York.

“Uncertificated Security”: The meaning specified in Article 8 of the UCC.

“Underlying Instrument”: The indenture or other agreement pursuant to which an Asset has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Asset or of which the holders of such Asset are the beneficiaries.

“Unregistered Securities”: The meaning specified in Section 5.17(c).

“Unsecured Loan”: A senior unsecured Loan which 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 under such Loan.

“ U.S. Government Securities Business Day”: Any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities as indicated on the SIFMA Website.

“U.S. Person” and “U.S. person”: The meanings specified in Section 7701(a)(30) of the Code or in Regulation S, as the context requires.

“U.S. Retention Requirements”: The credit risk retention requirements under Section 15G of the Exchange Act and the applicable rules and regulations.

(b) The Notes shall be divided into the Classes, having the designations, original principal amounts and other characteristics as follows:

Prior to the First Refinancing:

Notes

Designation

Class A-1A Notes

Class A-1B Notes

Class A-1C Notes

Class A-2 Notes

Type

Senior Secured Floating Rate

Senior Secured Fixed Rate

Senior Secured Floating Rate

Initial Principal Amount

(U.S.$)

$160,000,000

$40,000,000

$27,000,000

$46,000,000

Expected Moody’s Initial

Rating

“ Aaa(sf)”

“ Aa2(sf)”

Expected Fitch Initial

Rating

“ AAAsf”

N/A

Index Maturity

3 month

N/A

3 month

Interest Rate(1)

LIBOR + 1.85%

(2)

3.75%

LIBOR + 2.70%

Interest Deferrable

Stated Maturity

(Payment Date)

July 15, 2027

Minimum Denominations

(U.S.$) (Integral Multiples)

$1,000,000 ($1)

Priority Class(es)(3)

None

A-1

Pari Passu Class(es)

A-1B, A-1C

A-1A, A-1C

A-1A, A-1B

None

Junior Class(es)(4)

A-2, Reinvesting Holder, Preferred Interests

Reinvesting Holder, Preferred Interests

Listed Notes

Yes

1 Amounts payable to the Fiscal Agent in respect of the Preferred Interests on each Payment Date will consist solely of Excess Interest payable in respect of the Preferred Interests, if any, on such Payment Date as determined on the related Determination Date and payable in accordance with the Priority of Payments and the Fiscal Agency Agreement. The interest rate applicable with respect to any Class of Rated Notes other than the Class A-1 Notes may be reduced in connection with a Re-Pricing of such Class of Rated Notes, subject to the conditions set forth in Section 9.8.

2 The Interest Rate for the Class A-1B Notes will be the LIBOR + 1.75% through the Interest Accrual Period that ends on the Payment Date in July, 2017 and will be the LIBOR + 2.05% thereafter. As used herein prior to the First Refinancing, “LIBOR” shall have the meaning set forth in the Indenture prior to the Second Supplemental Indenture.

3 The Reinvesting Holder Notes will be a Class of Notes and (i) each Reinvesting Holder Note will have an initial principal amount and a Minimum Denomination of zero, (ii) such Notes will not be rated, (iii) such Notes will not bear interest, (iv) such Notes will have the same Stated Maturity as the Rated Notes, (v) such Class will be a Priority Class in respect of the Preferred Interests, and the Preferred Interests will be a Junior Class of Securities in respect of the Reinvesting Holder Notes and (vi) will not be listed.

4 The Preferred Interests will not have a principal balance but will be issued with a notional amount.

After the First Refinancing:

Notes

Designation

Class A-1-1-R Notes

Class A-1-2-R Notes

Class A-1-3-R Notes

Class A-2-R Notes

Class B Notes

Class C Notes

Type

Senior Secured Floating Rate

Senior Secured Fixed Rate

Senior Secured Floating Rate

Senior Secured

Deferrable Floating Rate

Senior Secured

Deferrable Floating Rate

Designation

Class A-1-1-R

Notes

Class A-1-2-R

Notes

Class A-1-3-R

Notes

Class A-2-R Notes

Class B Notes

Class C Notes

Initial Principal

Amount (U.S.$)

$234,800,000

$50,000,000

$25,000,000

$66,000,000

$46,400,000

$27,000,000

Expected S&P

Initial Rating

“ AAA (sf)”

“ AA (sf)”

“ A (sf)”

“ BBB- (sf)”

Expected Fitch

Initial Rating

“ AAAsf”

N/A

Index Maturity

3 month

N/A

3 month

Interest Rate(1)(2)

The Reference Rate

+ 1.55%

(3)

4.56%

The Reference Rate

+ 2.20%

The Reference Rate

+ 3.15%

The Reference Rate

+ 4.00%

Interest Deferrable

Yes

Re-Pricing Eligible

Yes

Stated Maturity

(Payment Date in)

October 2031

Minimum

Denominations (U.S.$) (Integral Multiples)

$250,000 ($1)

Priority Class(es)

None

A-1

A-1, A-2

A-1, A-2, B

Pari Passu Class(es)

A-1-2-R, A-1-3-R

A-1-1-R, A-1-3-R

A-1-1-R, A-1-2-R

None

Junior Class(es)(4)

A-2, B, C,

Reinvesting Holder, Preferred Interests

A-2, B, C,

Reinvesting Holder, Preferred Interests

A-2, B, C,

Reinvesting Holder, Preferred Interests

B, C, Reinvesting Holder, Preferred Interests

C, Reinvesting Holder, Preferred Interests

Reinvesting Holder, Preferred Interests

Listed Notes

1 The Reference Rate will be determined as set forth in Section 7.16. The Reference Rate will initially be LIBORbe the Term SOFR Rate plus the Term SOFR Adjustment, but may be changed as set forth in this Indenture. The Interest Rate for each Re-Pricing Eligible Class may be reduced in connection with a Re-Pricing of such Class, subject to the conditions set forth in Section 9.8.

2 The interest rate applicable with respect to any Re-Pricing Eligible Class may be reduced in connection with a Re-Pricing of such Class of Rated Notes, subject to the conditions set forth in Section 9.8. The Preferred Interests do not have a principal balance but have been issued with a notional amount.

3 The Interest Rate for the Class A-1-2-R Notes will be the Reference Rate + 1.48% through the Interest Accrual Period that ends on the Payment Date in October 2020 and will be the Reference Rate + 1.78% thereafter.

4 Amounts payable to the Fiscal Agent in respect of the Preferred Interests on each Payment Date will consist solely of Excess Interest payable in respect of the Preferred Interests, if any, on such Payment Date as determined on the related Determination Date and payable in accordance with the Priority of Payments and the Fiscal Agency Agreement. The Reinvesting Holder Notes are a Class of Notes and (i) each Reinvesting Holder Note has an initial principal amount and a Minimum Denomination of zero, (ii) such Notes are not rated, (iii) such Notes do not bear interest, (iv) such Notes have the same Stated Maturity as the Rated Notes, (v) such Class are a Priority Class in respect of the Preferred Interests, and the Preferred Interests are a Junior Class of Securities in respect of the Reinvesting Holder Notes and (vi) are not listed.

Section 2.4. Execution, Authentication, Delivery and Dating

The Notes shall be executed on behalf of the Issuer by one of its Authorized Officers. The signature of such Authorized Officer on the Notes may be manual or facsimile.

Notes bearing the manual or facsimile signatures of individuals who were at any time the Authorized Officers of the Issuer shall bind the Issuer, notwithstanding the fact that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices 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

accordance with the definition of the Reference Rate (the “Calculation Agent”). The Issuer hereby appoints the Trustee as the Calculation Agent. The Calculation Agent may be removed by the Issuer or the Collateral Manager, on behalf of the Issuer, at any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Issuer or the Collateral Manager, on behalf of the Issuer, the Issuer or the Collateral Manager, on behalf of the Issuer, will promptly appoint a replacement Calculation Agent which does not control or is not controlled by or under common control with the Issuer or its Affiliates or the Collateral Manager or its Affiliates. The Calculation Agent may not resign its duties or be removed without a successor having been duly appointed.

(b) The Calculation Agent shall be required to agree (and the Collateral Administrator as Calculation Agent does hereby agree) that, as soon as possible after 11:00 a.m. LondonNew York time on each Interest Determination Date, but in no event later than 11:00 a.m. New York time on the London BankingU.S. Government Securities Business Day immediately following each Interest Determination Date, the Calculation Agent will calculate the Interest

Rate applicable to each Class of Rated Notes during the related Interest Accrual Period (or, in the case of the first Interest Accrual Period, for the relevant portion thereof) and the Note Interest Amount (in each case, rounded to the nearest cent, with half a cent being rounded upward) payable on the related Payment Date in respect of such Class of Rate Notes and the related Interest Accrual Period. At such time, the Calculation Agent will communicate such rates and amounts to the Issuer, the Trustee, each Paying Agent, the Collateral Manager, Euroclear, Clearstream and the Irish Stock Exchange by email to rates@ise.ie. The Calculation Agent will also specify to the Issuer the quotations upon which the foregoing rates and amounts are based, and in any event the Calculation Agent shall notify the Issuer (with a copy to the Collateral Manager) before 5:00 p.m. (New York time) on every Interest Determination Date if it has not determined and is not in the process of determining any such Interest Rate or Note Interest Amount together with its reasons therefor. The Calculation Agent’s determination of the foregoing rates and amounts for any Interest Accrual Period (or portion thereof) will (in the absence of manifest error) be final and binding upon all parties.

Section 7.17. Certain Tax Matters

(a) The Issuer intends to be treated as a pass-through entity for U.S. federal income tax purposes. For so long as all of the Preferred Interests, Reinvesting Holder Notes and any other interests that are treated as equity of the Issuer for U.S. federal income tax purposes are held by the Originator (the “Carlyle Owner”) or any applicable Sole Equity Owner, as the case may be, the Issuer will be disregarded as separate from the Carlyle Owner or such Sole Equity Owner for

U.S. federal income tax purposes. If and when the Preferred Interests, the Reinvesting Holder Notes and any other interests that are treated as equity of the Issuer for U.S. federal income tax purposes are transferred such that those interest are considered held by two or more tax owners for U.S. federal income tax purposes, the Issuer intends to treat itself as a partnership for U.S. tax purposes. Each Holder or beneficial owner of a Note or interest therein, by investing in a Note, is deemed to agree to such treatment.

(b) The Issuer has not and will not elect to be treated other than as a partnership or disregarded entity for U.S. federal, state or local income or franchise tax purposes and shall make

154

an investment company under the Investment Company Act (other than

Section 3(c)(1) or Section 3(c)(7) thereof), (C) for the Issuer to not otherwise be considered a “covered fund” as defined for purposes of the Volcker Rule or

(D) for the Rated Notes to be permitted to be owned by “banking entities” (as defined in the Volcker Rule) under the Volcker Rule, in each case so long as any such modification or amendment would not have a material adverse effect on any Class of Notes;

(xv) to make modifications determined by the Collateral Manager to be necessary or advisable (in its commercially reasonable judgment based upon advice of nationally recognized counsel experienced in such matters) in order for any transaction contemplated by this Indenture (including an issuance of additional Notes, a Refinancing or a Re-Pricing) to comply with, or avoid the application of, the U.S. Retention Requirements or the E.U. Retention Requirements; provided, that no amendment or modification effected solely under this clause may modify the definitions of the terms “Redemption Price” or “Non-Call Period”;

(xvi) to provide administrative procedures and any related modifications of this Indenture (but not a modification of the Reference Rate itself) necessary or advisable in respect of the determination of an Alternative Reference Rate;

(xvii) to modify the procedures in this Indenture relating to compliance with Rule 17g-5 under the Exchange Act or to permit compliance, or reduce the costs to the Issuer of compliance, with the Dodd-Frank Act and any rules or regulations thereunder applicable to the Issuer, the Collateral Manager or the Securities.

(b) In addition, the Issuer and the Trustee may enter into supplemental indentures to

(A) evidence any waiver by any Rating Agency of Rating Agency Confirmation required hereunder, (B) conform to ratings criteria and other guidelines relating generally to collateral debt obligations published by any Rating Agency, including any alternative methodology published by any Rating Agency or to remove references to any Rating Agency if such Rating Agency ceases to rate any Notes or (C) effect a Re-Pricing; provided, however, that any supplemental indenture pursuant to this clause (b) that necessitates a modification or waiver in the definition or application of the term “Concentration Limitations” and/or the definitions related to the Concentration Limitations, any Collateral Quality Test, any definition related to the Coverage Tests, the provisions of this Indenture governing Maturity Amendments, or the definitions of “Defaulted Obligation,” “Credit Improved Obligation,” “Credit Risk Obligation” and/or “Collateral Obligation” shall meet the modification requirements in Section 8.2(b).

(c) Subject only to the requirements of this clause (c), the Collateral Manager may propose a Reference Rate Amendment if, in its reasonable judgment:

(i) LIBORthe Term SOFR Rate is no longer reported or updated on the Reuters screen;

(ii) a material disruption to LIBORthe Term SOFR Rate has occurred or is reasonably likely to occur;

165

(iii) a change in the methodology of calculating LIBORthe Term SOFR Rate has occurred or is reasonably likely to occur; or

(iv) at least a majority (based on the par amount) of quarterly pay Floating Rate Obligations included in the Assets rely on reference rates other than LIBORthe Term SOFR Rate, determined as of the first day of the Interest Accrual Period during which the Reference Rate Amendment is proposed.

The Issuer and the Trustee shall execute a Reference Rate Amendment (and make related changes advisable or necessary to implement the use of such replacement rate):

(i) without obtaining the consent of any Holders and without being required to determine whether or not any Class of Securities would be materially and adversely affected thereby if the proposed Alternative Reference Rate is the Market Replacement Reference Rate; provided that in connection with any such Reference Rate Amendment, the Trustee shall be entitled to rely on an Officer’s certificate of the Collateral Manager dated even date therewith stating that such Market Replacement Reference Rate (A) is consistent with standards of the current collateralized loan obligations market and (B) is used, based on reasonable and due inquiry, by other similarly situated collateral managers of like experience for transactions of similar size and collateral composition; or

(ii) if clause (i) does not apply, with the consent of a Majority of the Preferred Interests, the consent of a Majority of the Controlling Class and Rating Agency Confirmation.

In connection with any Reference Rate Amendment, the Trustee shall be entitled to rely on an Officer’s certificate of the Collateral Manager dated even date therewith stating that such Reference Rate Amendment is not designed to benefit any Class of Securities at the expense of any other Class of Securities in a commercially unreasonable manner.

(d) Any supplemental indenture entered into for a purpose other than the purposes set forth in this Section 8.1 or for the purposes of a Reset Amendment or a Reference Rate Amendment

must be executed pursuant to Section 8.2 with the consent of the percentage of Holders specified therein.

(e) Reset Amendments are not subject to the sections above and instead are exclusively governed by the provisions set forth in Section 8.7.

(f) Pari Passu Classes will be treated as a single class except in connection with any supplemental indenture that affects any such Class in a manner that is materially different from the effect of such supplemental indenture on other Classes with which it is pari passu, in which case each such Class will vote only as a separate class; provided that any Pari Passu Classes will always be treated as a single Class in connection with clause (a)(viii) above.

Section 8.2. Supplemental Indentures With Consent of Holders

166

Document

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

CERTIFICATION

I, Aren C. LeeKong, certify that:


1.			I have reviewed this quarterly report on Form 10-Q of Carlyle Secured Lending, Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			a.			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			b.			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			c.			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			d.			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.			The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


			a.			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


			b.			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2023



/s/ Aren C. LeeKong
Aren C. LeeKong President and Chief Executive Officer (Principal Executive Officer)

Document

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

CERTIFICATION

I, Thomas M. Hennigan, certify that:


1.			I have reviewed this quarterly report on Form 10-Q of Carlyle Secured Lending, Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			a.			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			b.			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			c.			Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			d.			Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.			The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


			a.			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


			b.			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2023



/s/ Thomas M. Hennigan
Thomas M. Hennigan Chief Financial Officer (Principal Financial Officer)

Document

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER, SECTION 906

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Aren C. LeeKong, the Chief Executive Officer (Principal Executive Officer) of Carlyle Secured Lending, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•the Form 10-Q of the Company for the quarter ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

•the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated: August 8, 2023

/s/ Aren C. LeeKong
Aren C. LeeKong President and Chief Executive Officer (Principal Executive Officer)


*			The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

Document

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER, SECTION 906

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas M. Hennigan, the Chief Financial Officer (Principal Financial Officer) of Carlyle Secured Lending, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated: August 8, 2023

/s/ Thomas M. Hennigan
Thomas M. Hennigan Chief Financial Officer (Principal Financial Officer)


*			The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.