10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________

FORM 10-Q

__________________________________________________

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

For the quarterly period ended June 30, 2019

OR

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

Commission file number: 333-222986

_________________________________________________________

CNL STRATEGIC CAPITAL, LLC

(Exact name of registrant as specified in its charter)

_________________________________________________________

Delaware	32-0503849
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

CNL Center at City Commons 450 South Orange Avenue Orlando, Florida	32801
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (407) 650-1000

______________________________________________________

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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   ☒

As of August 2, 2019, the Company had 3,422,353 Class FA shares, 513,627 Class A shares, 76,991 Class T shares, 230,503 Class D shares and 673,733 Class I shares outstanding.

INDEX

		PAGE
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):	2
	Condensed Consolidated Statements of Assets and Liabilities	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Changes in Net Assets	4
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Schedules of Investments	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43
Item 4.	Controls and Procedures	44
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	47
Exhibit Index		48
Signatures		50

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CNL STRATEGIC CAPITAL, LLC

CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

	June 30, 2019 (Unaudited)		December 31, 2018
Assets
Investments at fair value (amortized cost of $76,774,339 as of June 30, 2019 and December 31, 2018, respectively)	$	84,951,000	$	82,500,000
Cash	43,244,264		21,667,867
Deferred offering expenses	5,142		14,434
Net due from related parties (Note 5)	137,930		—
Prepaid expenses and other assets	211,597		70,833
Total assets	128,549,933		104,253,134
Liabilities
Accounts payable and other accrued expenses	341,007		282,856
Net due to related party (Note 5)	—		782,282
Distributions payable	463,898		358,186
Payable for shares repurchased	308,038		—
Total liabilities	1,112,943		1,423,324
Commitments and contingencies (Note 10)
Members’ Equity (Net Assets)
Preferred shares, $0.001 par value, 50,000,000 shares authorized and unissued	—		—
Class FA Common shares, $0.001 par value, 7,400,000 and 3,400,000 shares authorized, respectively; 3,379,110 and 3,266,260 shares issued, respectively; 3,372,710 and 3,266,260 shares outstanding, respectively	3,373		3,266
Class A Common shares, $0.001 par value, 94,660,000 shares authorized; 468,128 and 192,388 shares issued, respectively; 467,884 and 192,388 shares outstanding, respectively	468		192
Class T Common shares, $0.001 par value, 658,620,000 and 662,620,000 shares authorized, respectively; 68,813 and 31,452 shares issued and outstanding, respectively	69		31
Class D Common shares, $0.001 par value, 94,660,000 shares authorized; 205,333 and 122,889 shares issued and outstanding, respectively	205		123
Class I Common shares, $0.001 par value, 94,660,000 shares authorized; 596,695 and 249,526 shares issued, respectively; 591,950 and 249,526 shares outstanding, respectively	592		250
Capital in excess of par value	119,678,947		97,229,217
Distributable earnings	7,753,336		5,596,731
Total Members’ Equity	$	127,436,990	$	102,829,810
Net assets, Class FA shares	$	91,718,198	$	87,061,758
Net assets, Class A shares	12,509,598		5,086,607
Net assets, Class T shares	1,846,952		834,576
Net assets, Class D shares	5,433,648		3,222,865
Net assets, Class I shares	15,928,594		6,624,004
Total Members’ Equity	$	127,436,990	$	102,829,810

See notes to condensed consolidated financial statements.

2

CNL STRATEGIC CAPITAL, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Investment Income
Interest income	$	1,437,422		$	1,263,063		$	2,800,702		$	1,991,279
Dividend income	405,742			760,923			812,247			760,923
Total investment income	1,843,164			2,023,986			3,612,949			2,752,202
Operating Expenses
Organization and offering expenses	136,303			317,230			322,004			538,794
Base management fees	265,128			194,974			506,766			283,536
Total return incentive fees	496,660			308,735			496,660			308,735
Professional services	182,491			168,862			410,006			232,530
Director fees and expenses	53,380			45,210			111,079			82,280
General and administrative expenses	30,255			61,000			58,311			93,810
Custodian and accounting fees	61,817			39,520			123,967			64,433
Insurance expense	47,079			28,077			93,024			28,077
Annual distribution and shareholder servicing fees	9,048			52			15,817			52
Total operating expenses	1,282,161			1,163,660			2,137,634			1,632,247
Expense support	(610,447		)	(144,146		)	(826,520		)	(187,358		)
Net expenses	671,714			1,019,514			1,311,114			1,444,889
Net investment income	1,171,450			1,004,472			2,301,835			1,307,313
Net change in unrealized appreciation on investments	2,170,000			928,424			2,451,000			1,452,873
Net increase in net assets resulting from operations	$	3,341,450		$	1,932,896		$	4,752,835		$	2,760,186
Common shares per share information:
Net investment income	$	0.27		$	0.31		$	0.55		$	0.40
Net increase in net assets resulting from operations	$	0.76		$	0.59		$	1.13		$	0.84
Weighted average number of common shares outstanding	4,389,711			3,285,912			4,187,979			3,278,742

See notes to condensed consolidated financial statements.

3

CNL STRATEGIC CAPITAL, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2019

(UNAUDITED)

	Common Shares					Capital in Excess of Par Value			Distributable Earnings			Total Net Assets
	Number of Shares		Par Value
Balance as of March 31, 2019	4,265,828		$	4,266		$	107,903,071		$	5,772,145		$	113,679,482
Net investment income	—		—			—			1,171,450			1,171,450
Net change in unrealized appreciation on investments	—		—			—			2,170,000			2,170,000
Distributions to shareholders	—		—			—			(1,360,259		)	(1,360,259		)
Issuance of common shares through the Offerings	445,802		446			11,913,332			—			11,913,778
Issuance of common shares through distribution reinvestment plan	6,449		6			170,571			—			170,577
Repurchase of common shares pursuant to share repurchase program	(11,389	)	(11		)	(308,027		)	—			(308,038		)
Balance as of June 30, 2019	4,706,690		$	4,707		$	119,678,947		$	7,753,336		$	127,436,990

	Common Shares					Capital in Excess of Par Value			Distributable Earnings			Total Net Assets
	Number of Shares		Par Value
Balance as of December 31, 2018	3,862,515		$	3,862		$	97,229,217		$	5,596,731		$	102,829,810
Net investment income	—		—			—			2,301,835			2,301,835
Net change in unrealized appreciation on investments	—		—			—			2,451,000			2,451,000
Distributions to shareholders	—		—			—			(2,596,230		)	(2,596,230		)
Issuance of common shares through the Offerings	845,274		846			22,485,986			—			22,486,832
Issuance of common shares through distribution reinvestment plan	10,290		10			271,771			—			271,781
Repurchase of common shares pursuant to share repurchase program	(11,389	)	(11		)	(308,027		)	—			(308,038		)
Balance as of June 30, 2019	4,706,690		$	4,707		$	119,678,947		$	7,753,336		$	127,436,990

See notes to condensed consolidated financial statements.

4

CNL STRATEGIC CAPITAL, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

FOR THE QUARTER ENDED JUNE 30, 2018 AND FOR THE PERIOD FROM FEBRUARY 7, 2018 TO JUNE 30, 2018

(UNAUDITED)

	Common Shares			Capital in Excess of Par Value		Distributable Earnings			Total Net Assets
	Number of Shares	Par Value
Balance as of March 31, 2018	3,266,260	$	3,266	$	81,653,234	$	524,449		$	82,180,949
Net investment income	—	—		—		1,004,472			1,004,472
Net change in unrealized appreciation on investments	—	—		—		928,424			928,424
Distributions to shareholders	—	—		—		(1,026,590		)	(1,026,590		)
Issuance of common shares through the Offerings	43,070	43		1,083,569		—			1,083,612
Issuance of common shares through distribution reinvestment plan	591	1		14,857		—			14,858
Balance as of June 30, 2018	3,309,921	$	3,310	$	82,751,660	$	1,430,755		$	84,185,725

	Common Shares			Capital in Excess of Par Value		Distributable Earnings			Total Net Assets
	Number of Shares	Par Value
Balance as of February 7, 2018	8,000	$	8	$	199,992	$	—		$	200,000
Net investment income	—	—		—		1,307,313			1,307,313
Net change in unrealized appreciation on investments	—	—		—		1,452,873			1,452,873
Distributions to shareholders	—	—		—		(1,329,431		)	(1,329,431		)
Issuance of common shares through the Offerings	3,301,330	3,301		82,536,811		—			82,540,112
Issuance of common shares through distribution reinvestment plan	591	1		14,857		—			14,858
Balance as of June 30, 2018	3,309,921	$	3,310	$	82,751,660	$	1,430,755		$	84,185,725

See notes to condensed consolidated financial statements.

5

CNL STRATEGIC CAPITAL, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Operating Activities:
Net increase in net assets resulting from operations	$	4,752,835		$	2,760,186
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments	—			(74,374,339		)
Net change in unrealized appreciation on investments	(2,451,000		)	(1,452,873		)
Amortization of deferred offering expenses	14,893			496,922
(Decrease) increase in net due to related parties	(920,212		)	205,195
Increase in accounts payable and other accrued expenses	43,701			306,340
Increase in deferred offering expenses	(5,601		)	(682,964		)
Increase in prepaid expenses and other assets	(126,314		)	(160,398		)
Net cash provided by (used in) operating activities	1,308,302			(72,901,931		)
Financing Activities:
Proceeds from issuance of common shares	22,486,832			80,140,112
Distributions paid, net of distributions reinvested	(2,218,737		)	(997,348		)
Net cash provided by financing activities	20,268,095			79,142,764
Net increase in cash	21,576,397			6,240,833
Cash, beginning of period	21,667,867			199,683
Cash, end of period	$	43,244,264		$	6,440,516
Supplemental disclosure of cash flow information and non-cash financing activities:
Distributions reinvested	$	271,781		$	14,858
Amounts incurred but not paid (including amounts due to related parties):
Distributions payable	$	463,898		$	317,225
Offering costs	$	55,968		$	5,175
Payable for shares repurchased	$	308,038		$	—
Financing costs	$	14,450		$	—
Non-cash contribution from an affiliate of the Sub-Manager	$	—		$	2,400,000
Non-cash purchase of investments	$	—		$	(2,400,000	)

See notes to condensed consolidated financial statements.

6

CNL STRATEGIC CAPITAL, LLC

CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS

AS OF JUNE 30, 2019

(UNAUDITED)

Company (1)		Industry	Interest Rate	Maturity Date	No. Shares/ Principal Amount		Cost		Fair Value
Senior Secured Note – First Lien–12.3%
Polyform Products, Co.		Hobby Goods and Supplies	16.0%	8/7/2023	$	15,700,000	$	15,700,000	$	15,700,000
Senior Secured Note – Second Lien–11.8%
Lawn Doctor		Commercial and Professional Services	16.0%	8/7/2023	15,000,000		15,000,000		15,000,000
Total Senior Secured Notes							$	30,700,000	$	30,700,000
Equity–42.6%
Polyform Products, Co.	(2)	Hobby Goods and Supplies			10,820		$	15,598,788	$	15,600,000
Lawn Doctor	(2)	Commercial and Professional Services			7,746		30,475,551		38,651,000
Total Equity							$	46,074,339	$	54,251,000
TOTAL INVESTMENTS–66.7%	(3)						$	76,774,339	$	84,951,000
OTHER ASSETS IN EXCESS OF LIABILITIES–33.3%									42,485,990
NET ASSETS–100.0%									$	127,436,990

FOOTNOTES:

⁽¹⁾ Security may be an obligation of one or more entities affiliated with the named company.

⁽²⁾  As of June 30, 2019, the Company owned a controlling interest in this portfolio company.

⁽³⁾  As of June 30, 2019, the aggregate gross and net unrealized appreciation for all securities in which there was an excess of value over tax cost was approximately $9.4 million. The aggregate cost of securities for federal income tax purposes was approximately $75.5 million.

See notes to condensed consolidated financial statements.

7

CNL STRATEGIC CAPITAL, LLC

CONDENSED CONSOLIDATED SCHEDULE OF INVESTMENTS

AS OF DECEMBER 31, 2018

Company (1)		Industry	Interest Rate	Maturity Date	No. Shares/ Principal Amount		Cost		Fair Value
Senior Secured Note – First Lien–15.2%
Polyform Products, Co.		Hobby Goods and Supplies	16.0%	8/7/2023	$	15,700,000	$	15,700,000	$	15,700,000
Senior Secured Note – Second Lien–14.6%
Lawn Doctor		Commercial and Professional Services	16.0%	8/7/2023	15,000,000		15,000,000		15,000,000
Total Senior Secured Notes							$	30,700,000	$	30,700,000
Equity–50.4%
Polyform Products, Co.	(2)	Hobby Goods and Supplies			10,820		$	15,598,788	$	15,600,000
Lawn Doctor	(2)	Commercial and Professional Services			7,746		30,475,551		36,200,000
Total Equity							$	46,074,339	$	51,800,000
TOTAL INVESTMENTS–80.2%	(3)						$	76,774,339	$	82,500,000
OTHER ASSETS IN EXCESS OF LIABILITIES–19.8%									20,329,810
NET ASSETS–100.0%									$	102,829,810

FOOTNOTES:

⁽¹⁾ Security may be an obligation of one or more entities affiliated with the named company.

⁽²⁾  As of December 31, 2018, the Company owned a controlling interest in this portfolio company.

⁽³⁾  As of December 31, 2018, the aggregate gross and net unrealized appreciation for all securities in which there was an excess of value over tax cost was approximately $6.6 million. The aggregate cost of securities for federal income tax purposes was approximately $75.9 million.

See notes to condensed consolidated financial statements.

8

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

1. Principal Business and Organization

CNL Strategic Capital, LLC (the “Company”) is a limited liability company that primarily seeks to acquire and grow durable, middle-market U.S. businesses. The Company is externally managed by CNL Strategic Capital Management, LLC (the “Manager”) and sub-managed by Levine Leichtman Strategic Capital, LLC (the “Sub-Manager”). The Manager is responsible for the overall management of the Company’s activities and the Sub-Manager is responsible for the day-to-day management of the Company’s assets. Each of the Manager and the Sub-Manager are registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The Company conducts and intends to continue its operations so that the Company and each of its subsidiaries do not fall within, or are excluded from the definition of an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

The Company intends to target businesses that are highly cash flow generative with annual revenues primarily between $25 million and $250 million and whose management teams seek an ownership stake in the company. The Company’s business strategy is to acquire controlling equity interests in combination with debt positions and in doing so, provide long-term capital appreciation and current income while protecting invested capital. In addition, and to a lesser extent, the Company may acquire other debt and minority equity positions. The Company may also acquire various types of debt in the secondary market including secured and senior unsecured debt and syndicated senior secured corporate loans of U.S. and, to a lesser extent, non-U.S. corporations, partnerships, limited liability companies and other business entities. The Company may also co-invest with other vehicles managed by the Sub-Manager or their affiliates to acquire minority equity positions and debt positions in a co-investment capacity. The Company expects that these positions will comprise a minority of its total assets.

On February 7, 2018, the Company commenced operations when it met the minimum offering requirement of $80 million in Class FA limited liability company interests (the “Class FA shares” or the “Founder shares”) offered through a private offering (the “2018 Private Offering”) and issued approximately 3.3 million shares of Class FA shares for aggregate gross proceeds of approximately $81.7 million. The 2018 Private Offering was closed in February 2018.

In October 2016, the Company confidentially submitted a registration statement on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) in connection with the proposed offering of shares of its limited liability company interests (the “Public Offering”). The Registration Statement for the Public Offering was declared effective by the SEC on March 7, 2018. Through its Public Offering, the Company is offering, in any combination, four classes of shares: Class A shares, Class T shares, Class D shares and Class I shares (collectively, the “Non-founder shares” and together with the Founder shares, the “Shares”).

In April 2019, the Company launched a private offering of up to $50 million of Class FA shares (the “Class FA Private Offering” and together with the 2018 Private Offering and the Public Offering, the “Offerings”) pursuant to Rule 506(c) under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Class FA Private Offering, the Company entered into a placement agent agreement with CNL Securities Corp. (the “Placement Agent”), an affiliate of the Manager. The Class FA Private Offering is being offered on a best efforts basis, which means that the Placement Agent will use its best efforts but is not required to sell any specific amount of shares. There is no selling commission or placement agent fee for the sale of Class FA shares of the Class FA Private Offering. Subject to requirements under the Securities Act and the applicable state securities laws of any jurisdiction, the Company intends to conduct the Class FA Private Offering until the earlier of: (i) the date the Company has sold the maximum offering amount of the Class FA Private Offering or (ii) October 31, 2019. However, the Company reserves the right to extend the outside date of the Class FA Private Offering in its sole discretion but in no event later than December 31, 2019. The minimum offering requirement of the Class FA Private Offering was $2.0 million in Class FA shares. The Company met the minimum offering requirement in June 2019.

In conjunction with the launch of the Class FA Private Offering, the Company’s board of directors reclassified 4,000,000 authorized shares of Class T shares to Class FA shares, resulting in shares authorized of 7,400,000 Class FA shares, 94,660,000 Class A shares, 658,620,000 Class T shares, 94,660,000 Class D shares and 94,660,000 Class I shares.

See Note 7. “Capital Transactions” and Note 12. “Subsequent Events” for additional information related to the Offerings.

2. Significant Accounting Policies

Basis of Presentation

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained in the Financial Accounting Standards Board Accounting Standards Codification (the

9

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

“Codification” or “ASC”), which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties. In the opinion of management, the condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and necessary for the fair presentation of financial results as of and for the periods presented.

Although the Company is organized and intends to conduct its business in a manner so that it is not required to register as an investment company under the Investment Company Act, its financial statements are prepared using the specialized accounting principles of ASC Topic 946 to utilize investment company accounting. The Company obtains funds through the issuance of equity interests to multiple unrelated investors, and provides such investors with investment management services. Further, the Company’s business strategy is to acquire interests in middle-market U.S. businesses to provide current income and long term capital appreciation, while protecting invested capital. Overall, the Company believes that the use of investment company accounting on a fair value basis is consistent with the management of its assets on a fair value basis, and makes the Company’s financial statements more useful to investors and other financial statement users in facilitating the evaluation of an investment in the Company as compared to other investment products in the marketplace.

Principles of Consolidation

Under ASC Topic 946, “Financial Services—Investment Companies” (“ASC Topic 946”) the Company is precluded from consolidating any entity other than an investment company or an operating company which provides substantially all of its services to benefit the Company. In accordance therewith, the Company has consolidated the results of its wholly owned subsidiaries which provide services to the Company in its condensed consolidated financial statements. However, the Company has not consolidated the results of its subsidiaries in which the Company holds debt and equity investments. All intercompany account balances and transactions have been eliminated in consolidation.

Cash

Cash consists of demand deposits at commercial banks. Cash is carried at cost plus accrued interest, which approximates fair value. The Company deposits its cash with highly-rated banking corporations and, at times, cash deposits may exceed the insured limits under applicable law.

Use of Estimates

Management makes estimates and assumptions related to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare the financial statement in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

Valuation of Investments

ASC Topic 820 clarifies that the fair value is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. ASC Topic 820 provides a consistent definition of fair value which focuses on exit price and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs.

In addition, ASC Topic 820 provides a framework for measuring fair value and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels of valuation hierarchy established by ASC Topic 820 are defined as follows:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets. An active market is defined as a market in which transactions for the asset or liability occur with sufficient pricing information on an ongoing basis. Publicly listed equity and debt securities and listed derivatives that are traded on major securities exchanges and publicly traded equity options are generally valued using Level 1 inputs. If a price for an asset cannot be determined based upon this established process, it shall then be valued as a Level 2 or Level 3 asset.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following: (i) quoted prices for similar assets in active markets; (ii) quoted prices for identical or similar assets in markets that are not active; (iii) inputs that are derived principally from or corroborated by observable market data by correlation or other means; and (iv) inputs other than quoted prices that are observable for the assets. Fixed income and derivative assets, where there is an observable secondary trading market and through which pricing

10

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

inputs are available through pricing services or broker quotes, are generally valued using Level 2 inputs. If a price for an asset cannot be determined based upon this established process, it shall then be valued as a Level 3 asset.

Level 3 – Unobservable inputs for the asset or liability being valued. Unobservable inputs will be used to measure fair value to the extent that observable inputs are not available and such inputs will be based on the best information available in the circumstances, which under certain circumstances might include the Manager’s or the Sub-Manager’s own data. Level 3 inputs may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. Certain assets may be valued based upon estimated value of underlying collateral and include adjustments deemed necessary for estimates of costs to obtain control and liquidate available collateral. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence. Debt and equity investments in private companies or assets valued using the market or income approach are generally valued using Level 3 inputs.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls will be determined based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each asset.

The Company’s board of directors is responsible for determining in good faith the fair value of the Company’s investments in accordance with the valuation policy and procedures approved by the board of directors, based on, among other factors, the input of the Manager, the Sub-Manager, its audit committee, and the independent third-party valuation firm. The determination of the fair value of the Company’s assets requires judgment, especially with respect to assets for which market prices are not available. For most of the Company’s assets, market prices will not be available. Due to the inherent uncertainty of determining the fair value of assets that do not have a readily available market value, the fair value of the assets may differ significantly from the values that would have been used had a readily available market value existed for such assets, and the differences could be material. Because the calculation of the Company’s net asset value is based, in part, on the fair value of its assets, the Company’s calculation of net asset value is subjective and could be adversely affected if the determinations regarding the fair value of its assets were materially higher than the values that the Company ultimately realizes upon the disposal of such assets. Furthermore, through the valuation process, the Company’s board of directors may determine that the fair value of the Company’s assets differs materially from the values that were provided by the independent valuation firm.

The Company may also look to private merger and acquisition statistics, public trading multiples adjusted for illiquidity and other factors, valuations implied by third-party investments in the businesses or industry practices in determining fair value. The Company may also consider the size and scope of a business and its specific strengths and weaknesses, as well as any other factors it deems relevant in assessing the value.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

The Company will measure realized gains or losses as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in asset values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Income Recognition

Interest Income – Interest income is recorded on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest on loans and debt securities for accounting purposes if it has reason to doubt its ability to collect such interest.

The Company places loans on non-accrual status when principal and interest are past due 90 days or more or when there is a reasonable doubt that the Company will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are generally restored to accrual status when past due principal and interest amounts are paid and, in management’s judgment, are likely to remain current. To date, the Company has not experienced any past due payments on any of its loans.

Dividend Income – Dividend income is recorded on the record date for privately issued securities, but excludes any portion of distributions that are treated as a return of capital. Each distribution received from an equity investment is evaluated to determine

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CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments as dividend income unless there is sufficient current or accumulated earnings prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. To date, all distributions have been classified as dividend income.

Paid in Capital

The Company records the proceeds from the sale of its common shares on a net basis to (i) capital stock and (ii) paid in capital in excess of par value, excluding upfront selling commissions and dealer manager fees.

Organization and Offering Expenses

Organization expenses are expensed on the Company’s statements of operations as incurred. Offering expenses, which consist of amounts incurred for items such as legal, accounting, regulatory and printing work incurred related to the Offerings, are capitalized on the Company’s statements of assets and liabilities as deferred offering expenses and expensed to the Company’s statements of operations over the lesser of the offering period or 12 months; however, the end of the deferral period will not exceed 12 months from the date the offering expense is incurred by the Manager and the Sub-Manager.

Annual Distribution and Shareholder Servicing Fees

Under the Public Offering, the Company pays annual distribution and shareholder servicing fees with respect to its Class T and Class D shares, as described further below in Note 5. “Related Party Transactions.” The Company records the annual distribution and shareholder servicing fees, which accrue daily, in its statements of operations as they are incurred.

Deferred Financing Costs

Financing costs, including upfront fees, commitment fees and legal fees related to the Line of Credit (as defined and further described in Note 8. “Borrowings”) will be deferred and amortized over the life of the related financing instrument using the effective yield method. The amortization of deferred financing costs will be included in interest expense in the condensed statements of operations.

Allocation of Profit and Loss

Class-specific expenses, including base management fees, total return incentive fees, organization and offering expenses, annual distribution and shareholder servicing fees, expense support and certain transfer agent fees, are allocated to each share class of common shares in accordance with how such fees are attributable to the particular share classes, as determined by the Company’s board of directors, the Company’s governing agreements and, in certain cases, expenses which are specifically identifiable to a specific share class.

Income and expenses which are not class-specific are allocated monthly pro rata among the share classes based on shares outstanding as of the end of the month.

Earnings per Share and Net Investment Income per Share

Earnings per share and net investment income per share are calculated for each share class of common shares based upon the weighted average number of common shares outstanding during the reporting period.

Distributions

In March 2018, the Company’s board of directors began to declare cash distributions to shareholders based on weekly record dates and such distributions were paid on a monthly basis one month in arrears. Effective with distributions declared for January 2019, the Company’s board of directors began to declare distributions based on monthly record dates and such distributions are expected to be paid on a monthly basis one month in arrears. Distributions are made on all classes of the Company’s shares at the same time.

The Company has adopted a distribution reinvestment plan that provides for reinvestment of distributions on behalf of shareholders. Non-founder shareholders participating in the distribution reinvestment plan will have their cash distribution automatically reinvested in additional shares having the same class designation as the class of shares to which such distributions are attributable at a price per share equivalent to the then current public offering price, net of up-front selling commissions and dealer manager

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CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

fees. Cash distributions paid on Founder shares participating in the distribution reinvestment plan are reinvested in additional shares of Class A shares.

U.S. Federal Income Taxes

The Company expects that it will operate so that it will qualify to be treated for U.S. federal income tax purposes as a partnership, and not as an association or a publicly traded partnership taxable as a corporation. Generally, the Company will not be taxable as a corporation if 90% or more of its gross income for each taxable year consists of “qualifying income” (generally, interest (other than interest generated from a financial business), dividends, real property rents, gain from the sale of assets that produce qualifying income and certain other items) and the Company is not required to register under the Investment Company Act (the “qualifying income exception”).

No provision has been made for income taxes since the individual shareholders are responsible for their proportionate share of the Company’s taxable income.

Under U.S. GAAP, the Company is subject to the provisions of ASC 740,“Income Taxes.” This standard defines the threshold for recognizing the benefits of tax-return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50% likely to be realized.

The Company has analyzed its tax positions taken on Federal income tax returns for all open tax years (tax years ended December 31, 2018 and 2017), and has concluded that no provision for income tax is required in the Company’s financial statements. The Company follows the authoritative guidance on accounting for uncertainty in income taxes and concluded it has no material uncertain tax positions to be recognized at this time.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. During the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to December 31, 2018, the Company did not incur any interest or penalties.

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (the “Act”) which reduced U.S. corporate income tax rates, created a territorial tax system, allowed for immediate expensing of certain qualified property, provided other tax related incentives and included various base-broadening provisions. The Act did not have a material impact on the Company.

Reclassifications

Certain prior period amounts in the condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported net assets.

3. Investments

In June 2019, the Company, through its indirect wholly-owned subsidiary, Roundtable Acquisition, LLC (the “Buyer”), entered into a Stock Contribution and Purchase Agreement (the “Purchase Agreement”) with Michael Auriemma, an individual (“Seller”), to acquire a controlling interest in Auriemma U.S. Roundtables (“Roundtables”), a subscription-based information services and data analytics company for the consumer finance industry. The Company acquired an approximately 81% interest in Roundtables in August 2019, as described further in Note 12. “Subsequent Events”.

In February 2018, the Company acquired a controlling equity interest in Lawn Doctor, Inc. (“Lawn Doctor”) from an affiliate of the Sub-Manager, through an investment consisting of common equity and a debt investment in the form of a second lien secured note to Lawn Doctor. As of June 30, 2019, the Company owned approximately 62.5% of the outstanding equity in Lawn Doctor on an undiluted basis. The cost basis of the Company’s investments in Lawn Doctor was approximately $30.5 million of a common equity investment and $15.0 million of a debt investment as of June 30, 2019.

In February 2018, the Company acquired a controlling equity interest in Polyform Holdings, Inc. (“Polyform”) from an affiliate of the Sub-Manager, through an investment consisting of common equity and a debt investment in the form of a first lien secured note to Polyform. As of June 30, 2019, the Company owned approximately 87.1% of the outstanding equity in Polyform on an undiluted basis. The cost basis of the Company’s investments in Polyform was approximately $15.6 million of a common equity investment and $15.7 million of a debt investment as of June 30, 2019.

The debt investments in the form of a second lien secured note to Lawn Doctor and in the form of a first lien secured note to Polyform, as described above, accrue interest at a per annum rate of 16.0%. Each note will mature in August 2023. The note

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CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

purchase agreements contain customary covenants and events of default. As of June 30, 2019, Lawn Doctor and Polyform were in compliance with the Company’s debt covenants.

As of June 30, 2019 and December 31, 2018, the Company’s investment portfolio is summarized as follows:

	As of June 30, 2019
Asset Category	Cost		Fair Value		Fair Value Percentage of Investment Portfolio		Fair Value Percentage of Net Assets
Senior debt
Senior secured debt - first lien	$	15,700,000	$	15,700,000	18.5	%	12.3	%
Senior secured debt - second lien	15,000,000		15,000,000		17.6		11.8
Total senior debt	30,700,000		30,700,000		36.1		24.1
Equity	46,074,339		54,251,000		63.9		42.6
Total investments	$	76,774,339	$	84,951,000	100.0	%	66.7	%

	As of December 31, 2018
Asset Category	Cost		Fair Value		Fair Value Percentage of Investment Portfolio		Fair Value Percentage of Net Assets
Senior debt
Senior secured debt - first lien	$	15,700,000	$	15,700,000	19.0	%	15.2	%
Senior secured debt - second lien	15,000,000		15,000,000		18.2		14.6
Total senior debt	30,700,000		30,700,000		37.2		29.8
Equity	46,074,339		51,800,000		62.8		50.4
Total investments	$	76,774,339	$	82,500,000	100.0	%	80.2	%

As of June 30, 2019 and December 31, 2018, none of the Company’s debt investments were on non-accrual status.

The industry and geographic dispersion of the Company’s investment portfolio as a percentage of total fair value of the Company’s investments as of June 30, 2019 and December 31, 2018 were as follows:

Industry	June 30, 2019		December 31, 2018
Hobby Goods and Supplies	36.8	%	37.9	%
Commercial and Professional Services	63.2		62.1
Total	100.0	%	100.0	%

Geographic Dispersion(1)	June 30, 2019		December 31, 2018
United States	100.0	%	100.0	%
Total	100.0	%	100.0	%

FOOTNOTE:

⁽¹⁾  The geographic dispersion is determined by the portfolio company’s country of domicile or the jurisdiction of the security’s issuer.

All investment positions held at June 30, 2019 and December 31, 2018 were denominated in U.S. dollars.

Summarized Operating Data

The following tables present unaudited summarized operating data for Lawn Doctor and Polyform (the “initial businesses”) for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) through June 30, 2018, and summarized balance sheet data as of June 30, 2019 (unaudited) and December 31, 2018:

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CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

Lawn Doctor

Summarized Operating Data (Unaudited)

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			For the Period from February 7, 2018 (1) to June 30, 2018
Revenues	$	6,973,211		$	5,020,688		$	13,424,712		$	7,951,778
Expenses	(6,585,500		)	(4,258,181		)	(13,276,235		)	(6,911,347		)
Income before taxes	387,711			762,507			148,477			1,040,431
Income tax expense	(103,053		)	(57,200		)	(39,465		)	(46,267		)
Consolidated net income	284,658			$	705,307		109,012			994,164
Net loss attributable to non-controlling interest	28,168			$	22,438		64,803			22,438
Net income attributable to Lawn Doctor	$	312,826		$	727,745		$	173,815		$	1,016,602

Summarized Balance Sheet Data

	As of June 30, 2019 (Unaudited)			As of December 31, 2018
Current assets	$	6,991,954		$	6,347,092
Non-current assets	$	94,900,906		$	94,024,715
Current liabilities	$	4,653,642		$	4,342,064
Non-current liabilities	$	52,301,370		$	50,312,347
Non-controlling interest	$	(11,063	)	$	(40,952	)
Stockholders’ equity	$	44,948,911		$	45,758,348

Polyform

Summarized Operating Data (Unaudited)

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			For the Period from February 7, 2018 (1) to June 30, 2018
Revenues	$	3,815,425		$	4,064,855		$	8,221,289		$	6,482,448
Expenses	(4,094,317		)	(4,315,901		)	(8,491,355		)	(7,310,524		)
Loss before income taxes	(278,892		)	(251,046		)	(270,066		)	(828,076		)
Income tax benefit	79,000			72,000			76,000			146,000
Net loss	$	(199,892	)	$	(179,046	)	$	(194,066	)	$	(682,076	)

Summarized Balance Sheet Data

	As of June 30, 2019 (Unaudited)		As of December 31, 2018
Current assets	$	5,807,621	$	5,481,783
Non-current assets	$	32,179,761	$	29,977,677
Current liabilities	$	4,105,170	$	963,823
Non-current liabilities	$	18,454,623	$	18,530,624
Stockholders’ equity	$	15,427,589	$	15,965,013

FOOTNOTE:

⁽¹⁾ February 7, 2018 is the date the Company acquired the initial businesses.

4. Fair Value of Financial Instruments

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CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

The Company’s investments were categorized in the fair value hierarchy described in Note 2. “Significant Accounting Policies,” as follows as of June 30, 2019 and December 31, 2018:

	As of June 30, 2019								As of December 31, 2018
Description	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Senior debt	$	—	$	—	$	30,700,000	$	30,700,000	$	—	$	—	$	30,700,000	$	30,700,000
Equity	—		—		54,251,000		54,251,000		—		—		51,800,000		51,800,000
Total investments	$	—	$	—	$	84,951,000	$	84,951,000	$	—	$	—	$	82,500,000	$	82,500,000

The ranges of unobservable inputs used in the fair value measurement of the Company’s Level 3 investments as of June 30, 2019 and December 31, 2018 were as follows:

June 30, 2019
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	$	30,700,000	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.3% - 13.8% (11.3%) 7.7x – 12.1x (10.8x) 8.0x – 12.0x (10.9x)	Decrease Increase Increase
Equity	54,251,000		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.3% - 13.8% (11.3%) 7.7x – 12.1x (10.8x) 8.0x – 12.0x (10.9x)	Decrease Increase Increase
Total	$	84,951,000

December 31, 2018
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	$	30,700,000	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.5% - 13.5% (11.4%) 7.9x – 12.2x (10.9x) 8.0x – 12.0x (10.8x)	Decrease Increase Increase
Equity	51,800,000		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.5% - 13.5% (11.4%) 7.9x – 12.2x (10.9x) 8.0x – 12.0x (10.8x)	Decrease Increase Increase
Total	$	82,500,000

FOOTNOTES:

⁽¹⁾  Discount rates are relative to the enterprise value of the portfolio companies and are not the market yields on the associated debt investments. Unobservable inputs were weighted by the relative fair value of the investments.

⁽²⁾  This column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

The preceding tables include the significant unobservable inputs as they relate to the Company’s determination of fair values for its investments categorized within Level 3 as of June 30, 2019 and December 31, 2018. In addition to the techniques and inputs noted in the table above, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining the fair value estimates for the Company’s investments. Any significant increases or decreases in the unobservable inputs would result in significant increases or decreases in the fair value of the Company’s investments.

Investments that do not have a readily available market value are valued utilizing a market approach, an income approach (i.e. discounted cash flow approach), a transaction approach, or a combination of such approaches, as appropriate. The market approach uses prices, including third party indicative broker quotes, and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The transaction approach uses pricing indications derived from recent precedent merger and acquisition transactions involving comparable target companies. The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) that are discounted based on a required or expected discount rate to derive a present value amount range. The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors the Company may take into account to determine

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CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

the fair value of its investments include, as relevant: available current market data, including an assessment of the credit quality of the security’s issuer, relevant and applicable market trading and transaction comparables, applicable market yields and multiples, illiquidity discounts, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, data derived from merger and acquisition activities for comparable companies, and enterprise values, among other factors.

The following tables provide reconciliation of investments for which Level 3 inputs were used in determining fair value for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) through December 31, 2018:

	Six Months Ended June 30, 2019
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2019	$	30,700,000	$	51,800,000	$	82,500,000
Net change in unrealized appreciation (1)	—		2,451,000		2,451,000
Fair value balance as of June 30, 2019	$	30,700,000	$	54,251,000	$	84,951,000
Change in net unrealized appreciation in investments held as of June 30, 2019 (1)	$	—	$	2,451,000	$	2,451,000

	Period from February 7, 2018 (Commencement of Operations) to December 31, 2018
	Senior Debt		Equity		Total
Fair value balance as of February 7, 2018	$	—	$	—	$	—
Additions	30,700,000		46,074,339		76,774,339
Net change in unrealized appreciation (1)	—		5,725,661		5,725,661
Fair value balance as of December 31, 2018	$	30,700,000	$	51,800,000	$	82,500,000
Change in net unrealized appreciation in investments held as of December 31, 2018 (1)	$	—	$	5,725,661	$	5,725,661

FOOTNOTE:

⁽¹⁾   Included in net change in unrealized appreciation on investments in the consolidated statements of operations.

All realized and unrealized gains and losses are included in earnings and are reported as separate line items within the Company’s statements of operations.

5. Related Party Transactions

On February 7, 2018, the Company commenced operations when it met the minimum offering requirement of $80.0 million in Class FA shares under its 2018 Private Offering and issued approximately 3.3 million shares of Class FA shares for aggregate gross proceeds of approximately $81.7 million. The $81.7 million in gross proceeds received included a cash capital contribution of $2.4 million from the Manager in exchange for 96,000 Class FA shares and a cash capital contribution of $9.5 million from CNL Strategic Capital Investment, LLC, which is indirectly controlled by James M. Seneff, Jr., the chairman of the Company, in exchange for 380,000 Class FA shares. The $81.7 million also included 96,000 Class FA shares received in exchange for $2.4 million of non-cash consideration in the form of equity interests in Lawn Doctor received from an affiliate of the Sub-Manager pursuant to an exchange agreement. The $81.7 million in gross proceeds also included a cash capital contribution of approximately $0.4 million in exchange for 15,000 Class FA shares, from other individuals affiliated with the Manager.

The Manager and Sub-Manager, along with certain affiliates of the Manager or Sub-Manager, will receive fees and compensation in connection with the Company’s Public Offering as well as the acquisition, management and sale of the assets of the Company, as follows:

Placement Agent/Dealer Manager

Commissions — Under the Class FA Private Offering, there is no selling commission for the sale of Class FA shares. Under the Public Offering, the Company pays CNL Securities Corp. (the “Managing Dealer”), an affiliate of the Manager, a selling commission up to 6.00% of the sale price for each Class A share and 3.00% of the sale price for each Class T share sold in the Public Offering

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CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

(excluding sales pursuant to the Company’s distribution reinvestment plan). The Managing Dealer may reallow all or a portion of the selling commissions to participating broker-dealers.

Placement Agent/Dealer Manager Fee — Under the Class FA Private Offering, there is no placement agent fee for the sale of Class FA shares. Under the Public Offering, the Company pays the Managing Dealer a dealer manager fee of 2.50% of the price of each Class A share and 1.75% of the price of each Class T share sold in the Public Offering (excluding sales pursuant to the Company’s distribution reinvestment plan). The Managing Dealer may reallow all or a portion of such dealer manager fees to participating broker-dealers.

Annual Distribution and Shareholder Servicing Fee — Under the Public Offering, the Company pays the Managing Dealer an annual distribution and shareholder servicing fee, subject to certain limits, with respect to its Class T and Class D shares (excluding Class T shares and Class D shares sold through the distribution reinvestment plan and those received as share distributions) in an annual amount equal to 1.00% and 0.50%, respectively, of its current net asset value per share, as disclosed in its periodic or current reports, payable on a monthly basis. The annual distribution and shareholder servicing fee accrues daily and is paid monthly in arrears. The Managing Dealer may reallow all or a portion of the annual distribution and shareholder servicing fee to the broker-dealer who sold the Class T or Class D shares or, if applicable, to a servicing broker-dealer of the Class T or Class D shares or a fund supermarket platform featuring Class D shares, so long as the broker-dealer or financial intermediary has entered into a contractual agreement with the Managing Dealer that provides for such reallowance. The annual distribution and shareholder servicing fees is an ongoing fee that is allocated among all Class T and Class D shares, respectively, and is not paid at the time of purchase.

Manager and/or Sub-Manager

Organization and Offering Costs — Under the Offerings, the Company reimburses the Manager and its Sub-Manager, along with their respective affiliates, for the organization and offering costs (other than selling commissions and dealer manager fees) they have incurred on the Company’s behalf only to the extent that such expenses do not exceed (A) 1.0% of the cumulative gross proceeds from the 2018 Private Offering and Class FA Private Offering, and (B) 1.5% of the cumulative gross proceeds from the Public Offering. During the six months ended June 30, 2019, the Company incurred an obligation to reimburse the Manager and Sub-Manager for approximately $0.3 million in organization and offering costs based on actual amounts raised through the Offerings, of which $0.1 million was payable as of June 30, 2019. The Manager and the Sub-Manager have incurred additional organization and offering costs of approximately $5.4 million and $0.1 million on behalf of the Company in connection with the Public Offering (exceeding the 1.5% limitation) and the Class FA Private Offering (exceeding the 1.0% limitation), respectively, as of June 30, 2019. These costs will be recognized by the Company in future periods as the Company receives future offering proceeds from its Public Offering and Class FA Private Offering to the extent such costs are within the 1.5% and 1.0% limitations, respectively.

Base Management Fee to Manager and Sub-Manager — The Company pays each of the Manager and the Sub-Manager 50% of the total base management fee for their services under the Management Agreement and the Sub-Management Agreement, subject to any reduction or deferral of any such fees pursuant to the terms of the Expense Support and Conditional Reimbursement Agreement described below. The Company incurred base management fees for the quarter ended June 30, 2019 and 2018 of approximately $0.3 million and $0.2 million, respectively. The Company incurred base management fees of approximately $0.5 million and $0.3 million during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018, respectively.

The base management fee is calculated for each share class at an annual rate of (i) for the Non-founder shares of a particular class, 2% of the product of (x) the Company’s average gross assets and (y) the ratio of Non-founder share Average Adjusted Capital (as defined below), for a particular class to total Average Adjusted Capital and (ii) for the Founder shares, 1% of the product of (x) the Company’s average gross assets and (y) the ratio of outstanding Founder share Average Adjusted Capital to total Average Adjusted Capital, in each case excluding cash, and will be payable monthly in arrears. The management fee for a certain month is calculated based on the average value of the Company’s gross assets at the end of that month and the immediately preceding calendar month. The determination of gross assets reflects changes in the fair market value of the Company’s assets, which does not necessarily equal their notional value, reflecting both realized and unrealized capital appreciation or depreciation. Average Adjusted Capital of an applicable class is computed on the daily Adjusted Capital for such class for the actual number of days in such applicable month. The base management fee may be reduced or deferred by the Manager and the Sub-Manager under the Management Agreement and the Expense Support and Conditional Reimbursement Agreement described below. For purposes of this calculation, “Average Adjusted Capital” for an applicable class is computed on the daily Adjusted Capital for such class for the actual number of days in such applicable quarter. “Adjusted Capital” is defined as cumulative proceeds generated from sales of our shares of a

18

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

particular share class (including proceeds from the sale of shares pursuant to the distribution reinvestment plan, if any), net of sales load (upfront selling commissions and dealer manager fees), if any, reduced for the full amounts paid for share repurchases pursuant to any share repurchase program, if any, for such class.

Total Return Incentive Fee on Income to the Manager and Sub-Manager — The Company also pays each of the Manager and the Sub-Manager 50% of the total return incentive fee for their services under the Management Agreement and the Sub-Management Agreement. The Company recorded total return incentive fees of approximately $0.5 million for the quarter and six months ended June 30, 2019 and approximately $0.3 million for the quarter ended June 30, 2018 and for the period from February 7, 2018 (commencement of operations) to December 31, 2018.

The total return incentive fee is based on the Total Return to Shareholders (as defined below) for each share class in any calendar year, payable annually in arrears. The Company accrues (but does not pay) the total return incentive fee on a quarterly basis, to the extent that it is earned, and performs a final reconciliation and makes required payments at completion of each calendar year. The total return incentive fee may be reduced or deferred by the Manager and the Sub-Manager under the Management Agreement and the Expense Support and Conditional Reimbursement Agreement described below. For purposes of this calculation, “Total Return to Shareholders” for any calendar quarter is calculated for each share class as the change in the net asset value for such share class plus total distributions for such share class calculated based on the Average Adjusted Capital for such class as of such calendar quarter end. The terms “Total Return to Non-founder Shareholders” and “Total Return to Founder Shareholders” means the Total Return to Shareholders specifically attributable to each particular share class of Non-founder shares or Founder shares, as applicable.

The total return incentive fee for each share class is calculated as follows:

• No total return incentive fee will be payable in any calendar year in which the annual Total Return to Shareholders of a particular share class does not exceed 7% (the “Annual Preferred Return”).

• As it relates to the Non-founder shares, all of the Total Return to Shareholders with respect to each particular share class of Non-founder shares, if any, that exceeds the annual preferred return, but is less than or equal to 8.75%, or the “Non-founder breakpoint,” in any calendar year, will be payable to the Manager (“Non-founder Catch Up”). The Non-Founder Catch Up is intended to provide an incentive fee of 20% of the Total Return to Non-founder Shareholders of a particular share class once the Total Return to Non-founder Shareholders of a particular class exceeds 8.75% in any calendar year.

• As it relates to Founder shares, all of the Total Return to Founder Shareholders, if any, that exceeds the annual preferred return, but is less than or equal to 7.777%, or the “founder breakpoint,” in any calendar year, will be payable to the Manager (“Founder Catch Up”). The Founder Catch Up is intended to provide an incentive fee of 10% of the Total Return to Founder Shareholders once the Total Return to Founder Shareholders exceeds 7.777% in any calendar year.

• For any quarter in which the Total Return to Shareholders of a particular share class exceeds the relevant breakpoint, the total return incentive fee of a particular share class shall equal, for Non-founder shares, 20% of the Total Return to Non-founder Shareholders of a particular class, and for Founder shares, 10% of the Total Return to Founder Shareholders, in each case because the annual preferred and relevant catch ups will have been achieved.

• For purposes of calculating the Total Return to Shareholders, the change in the Company’s net asset value is subject to a High Water Mark. The “High Water Mark” is equal to the highest year-end net asset value, for each share class of the Company since inception, adjusted for any special distributions resulting from the sale of the Company’s assets, provided such adjustment is approved by the Company’s board of directors. If, as of each calendar year end, the Company’s net asset value for the applicable share class is (A) above the High Water Mark, then, for such calendar year, the Total Return to Shareholders calculation will include the increase in the Company’s net asset value for such share class in excess of the High Water Mark, and (B) if the Company’s net asset value for the applicable share class is below the High Water Mark, for such calendar year, (i) any increase in the Company’s per share net asset value will be disregarded in the calculation of Total Return to Shareholders for such share class while (ii) any decrease in the Company’s per share net asset value will be included the calculation of Total Return to Shareholders for such share class. For the year ended December 31, 2018, the High Water Mark was $24.75 for all share classes. For the year ending December 31, 2019, the High Water Marks will be $26.65 for Class FA shares, $26.44 for Class A shares, $26.54 for Class T shares, $26.23 for Class D shares and $26.55 for Class I shares.

For purposes of this calculation, “Average Adjusted Capital” for an applicable class is computed on the daily Adjusted Capital for such class for the actual number of days in such applicable quarter. The annual preferred return of 7% and the relevant breakpoints

19

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

of 8.75% and 7.777%, respectively, are also adjusted for the actual number of days in each calendar year, measured as of each calendar quarter end.

Reimbursement to Manager and Sub-Manager for Operating Expenses — The Company reimburses the Manager and the Sub-Manager and their respective affiliates for certain operating costs and expenses of third parties incurred in connection with their provision of services to the Company, including fees, costs, expenses, liabilities and obligations relating to the Company’s activities, acquisitions, dispositions, financings and business, subject to the terms of the Company’s limited liability company agreement, the Management Agreement, the Sub-Management Agreement and the Expense Support and Conditional Reimbursement Agreement (as defined below). The Company does not reimburse the Manager and Sub-Manager for administrative services performed by the Manager or Sub-Manager for the benefit of the Company.

Expense Support and Conditional Reimbursement Agreement — The Company entered into an expense support and conditional reimbursement agreement with the Manager and the Sub-Manager (the “Expense Support and Conditional Reimbursement Agreement”), which became effective on February 7, 2018, pursuant to which each of the Manager and the Sub-Manager agrees to reduce the payment of base management fees, total return incentive fees and the reimbursements of reimbursable expenses due to the Manager and the Sub-Manager under the Management Agreement and the Sub-Management Agreement, as applicable, to the extent that the Company’s annual regular cash distributions exceed its annual net income (with certain adjustments). The amount of such expense support is equal to the annual (calendar year) excess, if any, of (a) the distributions (as defined in the Expense Support and Conditional Reimbursement Agreement) declared and paid (net of the Company’s distribution reinvestment plan) to shareholders minus (b) the available operating funds, as defined in the Expense Support and Conditional Reimbursement Agreement (the “Expense Support”). The Company recorded expense support due from the Manager and Sub-Manager of approximately $0.6 million and $0.8 million during the quarter and six months ended June 30, 2019, respectively, and approximately $0.1 million and $0.2 million during the quarter ended June 30, 2018 and the period from February 7, 2018 (commencement of operations) to December 31, 2018, respectively. Expense support is paid by the Manager and Sub-Manager annually in arrears.

The Expense Support amount is borne equally by the Manager and the Sub-Manager and is calculated as of the last business day of the calendar year. Beginning on February 7, 2018 and continuing until the Expense Support and Conditional Reimbursement Agreement is terminated, the Manager and Sub-Manager shall equally conditionally reduce the payment of fees and reimbursements of reimbursable expenses in an amount equal to the conditional waiver amount (as defined in and subject to limitations described in the Expense Support and Conditional Reimbursement Agreement). The term of the Expense Support and Conditional Reimbursement Agreement has the same initial term and renewal terms as the Management Agreement or the Sub-Management Agreement, as applicable, to the Manager or the Sub-Manager.

If, on the last business day of the calendar year, the annual (calendar year) year-to-date available operating funds exceeds the sum of the annual (calendar year) year-to-date distributions paid per share class (the “Excess Operating Funds”), the Company uses such Excess Operating Funds to pay the Manager and the Sub-Manager all or a portion of the outstanding unreimbursed Expense Support amounts for each share class, as applicable, subject to certain conditions (the “Conditional Reimbursements”) as described further in the Expense Support and Conditional Reimbursement Agreement. The Company’s obligation to make Conditional Reimbursements shall automatically terminate and be of no further effect three years following the date which the Expense Support amount was provided and to which such Conditional Reimbursement relates, as described further in the Expense Support and Conditional Reimbursement Agreement.

As of June 30, 2019, the amount of expense support related to the period from February 7, 2018 (commencement of operations) to December 31, 2018 collected from the Manager and Sub-Manager was approximately $0.4 million. The Company’s obligation to reimburse the Manager and Sub-Manager for expense support collected for the period from February 7, 2018 (commencement of operations) to December 31, 2018 will expire on December 31, 2021. As of June 30, 2019, management believes that reimbursement payments by the Company to the Manager and Sub-Manager are not probable under the terms of the Expense Support and Conditional Reimbursement Agreement.

Distributions

Individuals and entities affiliated with the Manager and Sub-Manager received distributions from the Company of approximately $0.2 million during each of the quarter ended June 30, 2019 and 2018, and approximately $0.4 million and $0.2 million, during the six months ended June 30, 2019 and during the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively.

Related party fees and expenses incurred for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) through June 30, 2018 are summarized below:

20

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

Related Party	Source Agreement & Description	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Managing Dealer	Managing Dealer Agreement: Commissions	$	133,905		$	4,350		$	419,582		$	4,350
	Dealer Manager Fees	73,569			2,038			212,203			2,038
	Annual distribution and shareholder servicing fees	9,048			52			15,817			52
Manager and Sub-Manager	Management Agreement and Sub-Management Agreement: Organization and offering reimbursement (1)(2)	141,445			18,107			312,712			725,153
	Base management fees (1)	265,128			194,974			506,766			283,536
	Total return incentive fees (1)	496,660			308,735			496,660			308,735
Manager and Sub-Manager	Expense Support and Conditional Reimbursement Agreement: Expense support	(610,447		)	(144,146		)	(826,520		)	(187,358		)
Manager	Administrative Services Agreement: Reimbursement of third-party operating expenses (1)	43,086			23,657			54,950			43,551

FOOTNOTE:

⁽¹⁾  Expenses subject to Expense Support.

⁽²⁾  Organization reimbursements are expensed on the Company’s statements of operations as incurred. Offering reimbursements are capitalized on the Company’s statements of assets and liabilities as deferred offering expenses and expensed to the Company’s statements of operations over the lesser of the offering period or 12 months.

The following table presents amounts due from (to) related parties as of June 30, 2019 and December 31, 2018:

	June 30, 2019			December 31, 2018
Due from related parties:
Expense Support	$	826,520		$	389,774
Total due from related parties	826,520			389,774
Due to related parties:
Organization and offering expenses	(55,968		)	(66,894		)
Base management fees	(89,595		)	(78,967		)
Total return incentive fee	(496,660		)	(1,015,228		)
Reimbursement of third-party operating expenses	(43,086		)	(9,101		)
Annual distribution and shareholder servicing fees	(3,281		)	(1,866		)
Total due to related parties	(688,590		)	(1,172,056		)
Net due from (to) related parties	$	137,930		$	(782,282	)

Other Related Party Transactions

Prior to the Company’s acquisition of Lawn Doctor and Polyform as described in Note 3. “Investments,” Lawn Doctor and Polyform were majority owned by an affiliate of the Sub-Manager.

21

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

6. Distributions

The following table reflects the total distributions declared during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018:

	Six Months Ended June 30, 2019						Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Distribution Period	Distributions Declared (1)		Distributions Reinvested (2)		Cash Distributions Net of Distributions Reinvested		Distributions Declared (3)		Distributions Reinvested (4)		Cash Distributions Net of Distributions Reinvested
First Quarter(5)	$	1,235,971	$	121,011	$	1,114,960	$	302,841	$	2,299	$	300,542
Second Quarter(6)	1,360,259		192,895		1,167,364		1,026,590		19,767		1,006,823
	$	2,596,230	$	313,906	$	2,282,324	$	1,329,431	$	22,066	$	1,307,365

FOOTNOTES:

⁽¹⁾ During 2019, the Company’s board of directors declared distributions per share on a monthly basis. See Note 11. “Financial Highlights” for distributions declared by share class. Distributions declared per share for each share class were as follows:    

Record Date Period	Class FA		Class A		Class T		Class D		Class I
January 1, 2019 - June 30, 2019 (6 record dates)	$	0.104167	$	0.104167	$	0.083333	$	0.093750	$	0.104167

⁽²⁾ Includes distributions reinvested in July 2019 of $68,914 related to distributions declared based on record dates in June 2019 and excludes distributions reinvested in January 2019 of $26,789 related to distributions declared based on record dates in December 2018.

⁽³⁾  During 2018, the Company’s board of directors declared distributions per share on a weekly basis. See Note 11. “Financial Highlights” for distributions declared by share class. Distributions declared per share for each share class were as follows:

Record Date Period	Class FA		Class A		Class T		Class D		Class I
March 7, 2018	$	0.020604	$	0.020604	$	0.016484	$	0.018544	$	0.020604
March 13, 2018 - June 26, 2018 (16 record dates)	0.024038		0.024038		0.019231		0.021635		0.024038

⁽⁴⁾ Includes distributions reinvested in July 2018 of $7,208 related to distributions declared based on record dates in June 2018.

⁽⁵⁾ Distributions declared for the record dates in March 2019 and 2018 were paid in April 2019 and 2018, respectively.

⁽⁶⁾ Distributions declared for the record dates in June 2019 and 2018 were paid in July 2019 and 2018, respectively.

The sources of declared distributions on a GAAP basis were as follows:

	Six Months Ended June 30, 2019				Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
	Amount		% of Cash Distributions Declared		Amount		% of Cash Distributions Declared
Net investment income(1)	$	2,301,835	88.7	%	$	1,307,313	98.3	%
Distributions in excess of net investment income(2)	294,395		11.3	%	22,118		1.7	%
Total distributions declared	$	2,596,230	100.0	%	$	1,329,431	100.0	%

FOOTNOTES:

⁽¹⁾ Net investment income includes expense support from the Manager and Sub-Manager of $826,520 and $187,358 for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. See Note 5. “Related Party Transactions” for additional information.

⁽²⁾ Consists of distributions made from offering proceeds for the periods presented.

In June 2019, the Company’s board of directors declared a monthly cash distribution on the outstanding shares of all classes of common shares of record on July 30, 2019 of $0.104167 per share for Class FA shares, $0.104167 per share for Class A shares, $0.083333 per share for Class T shares, $0.093750 per share for Class D shares and $0.104167 per share for Class I shares.

22

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

7. Capital Transactions

2018 Private Offering

On February 7, 2018, the Company commenced operations when it met the minimum offering requirement of $80.0 million in Class FA shares under its 2018 Private Offering and issued approximately 3.3 million shares of Class FA shares for aggregate gross proceeds of approximately $81.7 million. The Company did not incur any selling commissions or placement agent fees from the sale of the approximately 3.3 million Class FA shares sold under the terms of the 2018 Private Offering. See Note 5. “Related Party Transactions” for additional information on Class FA shares issued to the Manager, Sub-Manager and their affiliates.

Public Offering

The Registration Statement became effective on March 7, 2018, and the Company began offering up to $1,000,000,000 of shares, on a best efforts basis, which means that CNL Securities Corp., as the Managing Dealer of the Public Offering, uses its best effort but is not required to sell any specific amount of shares. The Company is offering, in any combination, four classes of shares in the Public Offering: Class A shares, Class T shares, Class D shares and Class I shares. The initial minimum permitted purchase amount is $5,000 in shares. There are differing selling fees and commissions for each share class. The Company also pays annual distribution and shareholder servicing fees, subject to certain limits, on the Class T and Class D shares sold in the Public Offering (excluding sales pursuant to the Company’s distribution reinvestment plan). The Public Offering price, selling commissions and dealer manager fees per share class are determined monthly as approved by the Company’s board of directors. As of June 30, 2019, the Public Offering price was $29.23 per Class A share, $28.20 per Class T share, $26.45 per Class D share and $26.91 per Class I share. See Note 12. “Subsequent Events” for information on changes to the Public Offering price, selling commissions and dealer manager fees by share class.

The Company is also offering, in any combination, up to $100,000,000 of Class A shares, Class T shares, Class D shares and Class I shares to be issued pursuant to its distribution reinvestment plan. See Note 12. “Subsequent Events” for additional information related to the Public Offering.

Class FA Private Offering

In April 2019, the Company began offering up to $50 million of Class FA shares under the Class FA Private Offering, on a best efforts basis, which means that CNL Securities Corp., as the Placement Agent of the Private Offering, uses its best effort but is not required to sell any specific amount of shares. There is no selling commission or placement agent fee for the sale of Class FA shares under the Class FA Private Offering. The Class FA Private Offering will terminate on October 31, 2019, unless extended by the Company’s board of directors. As of June 30, 2019, the purchase price for each Class FA share was $27.16.

The following table summarizes the total shares issued and proceeds received by share class in connection with the Offerings, excluding shares repurchased through the Share Repurchase Program described further below, for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) to June 30, 2018:

	Six Months Ended June 30, 2019
	Proceeds from Class FA Private Offering and Public Offering								Distributions Reinvested(1)			Total
Share Class	Shares Issued	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees (2)(3)			Net Proceeds to Company		Shares	Proceeds to Company		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	112,850	$	3,065,000	$	—		$	3,065,000	—	$	—	112,850	$	3,065,000	$	27.16
Class A	271,104	7,763,365		(582,606		)	7,180,759		4,636	122,579		275,740	7,303,338		26.49
Class T	37,140	1,035,350		(49,179		)	986,171		221	5,900		37,361	992,071		26.55
Class D	79,791	2,100,000		—			2,100,000		2,653	69,442		82,444	2,169,442		26.31
Class I	344,389	9,154,902		—			9,154,902		2,780	73,860		347,169	9,228,762		26.58
	845,274	$	23,118,617	$	(631,785	)	$	22,486,832	10,290	$	271,781	855,564	$	22,758,613	$	26.60

23

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

	Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
	Proceeds from 2018 Private Offering and Public Offering								Distributions Reinvested(4)			Total
Share Class	Shares Issued	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees (2)(3)			Net Proceeds to Company		Shares	Proceeds to Company		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	3,258,260	$	81,456,500	$	—		$	81,456,500	—	$	—	3,258,260	$	81,456,500	$	25.00
Class A	1,824	50,000		(4,250		)	45,750		582	14,620		2,406	60,370		25.09
Class T	1,704	45,000		(2,138		)	42,862		—	—		1,704	42,862		25.15
Class D	6,730	170,000		—			170,000		—	—		6,730	170,000		25.26
Class I	32,812	825,000		—			825,000		9	238		32,821	825,238		25.14
	3,301,330	$	82,546,500	$	(6,388	)	$	82,540,112	591	$	14,858	3,301,921	$	82,554,970	25.00

FOOTNOTES:

⁽¹⁾  Amounts exclude distributions reinvested in July 2019 related to the payment of distributions declared in June 2019 and include distributions reinvested in January 2019 related to the payment of distributions declared in December 2018.

⁽²⁾  The Company incurs selling commissions and dealer manager fees on the sale of Class A and Class T shares sold through its Public Offering. See Note 5. “Related Party Transactions” for additional information regarding up-front selling commissions and dealer manager fees.

⁽³⁾  The Company did not incur any selling commissions or placement agent fees from the sale of the approximately 0.1 million and 3.3 million Class FA shares sold under the terms of the Class FA Private Offering and 2018 Private Offering, respectively.

⁽⁴⁾  Amounts exclude distributions reinvested in July 2018 related to the payment of distributions declared in June 2018.

Share Repurchase Program

On March 29, 2019, the Company’s board of directors approved and adopted a share repurchase program (the “Share Repurchase Program”). The total amount of aggregate repurchases of Class A, Class FA, Class T, Class D and Class I shares will be limited to up to 2.5% of the aggregate net asset value per calendar quarter (based on the aggregate net asset value as of the last date of the month immediately prior to the repurchase date) and up to 10% of the aggregate net asset value per year (based on the average aggregate net asset value as of the end of each of the Company’s trailing four quarters). Unless the Company’s board of directors determines otherwise, the Company will limit the number of shares to be repurchased during any calendar quarter to the number of shares the Company can repurchase with the proceeds received from the sale of shares under its distribution reinvestment plan in the previous quarter. Notwithstanding the foregoing, at the sole discretion of the Company’s board of directors, the Company may also use other sources, including, but not limited to, offering proceeds and borrowings to repurchase shares. 

During the quarter ended June 30, 2019, the Company received requests for the repurchase of approximately $0.3 million of the Company’s common shares, which exceeded proceeds received from its distribution reinvestment plan in the previous quarter by approximately $0.2 million. The Company’s board of directors approved the use of other sources to satisfy repurchase requests received in excess of proceeds received from the distribution reinvestment plan. The following table summarizes the shares repurchased during the six months ended June 30, 2019:

	Six Months Ended June 30, 2019
	Shares Repurchased	Total Consideration		Price Paid per Share
Class FA shares	6,400	$	173,824	$	27.16
Class A shares	244	6,534		26.75
Class I shares	4,745	127,680		26.91
Total	11,389	$	308,038	$	27.05

As of June 30, 2019, the Company had a payable for shares repurchased of approximately $0.3 million. There were no share repurchases during the period from February 7, 2018 (commencement of operations) to June 30, 2018.

24

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

8. Borrowings

In June 2019, the Company, through a wholly-owned subsidiary, entered into a loan agreement and related promissory note (the “Loan Agreement”) with Seaside National Bank & Trust for a $20.0 million line of credit (the “Line of Credit”). The Line of Credit has a maturity date of 364 days from the effective date of the Loan Agreement plus one 12-month extension. The Company is required to pay a fee of 0.4% of each borrowing with a maximum fee of $80,000 over the 364 day period. Under the Loan Agreement, the Company is required to pay interest on the borrowed amount at a rate of 30-day LIBOR plus an applicable spread of 2.75%. Interest payments are due monthly in arrears. The Company may prepay, without penalty, all of any part of the borrowings under the Loan Agreement at any time and such borrowings are required to be repaid within 180 days of the borrowing date. Under the Loan Agreement, the Company is required to comply with reporting requirements and other customary requirements for similar credit facilities. In connection with the Loan Agreement, in June 2019, the Company entered into an assignment and pledge of deposit account agreement (“Deposit Agreement”) in favor of the lender under the Line of Credit. Under the Deposit Agreement, the Company is required to contribute proceeds from its public and private offerings to pay down the outstanding debt to the extent there are any borrowings outstanding under the Loan Agreement above the minimum cash balance.

The Company had not borrowed any amounts under the Line of Credit as of June 30, 2019.

9. Concentrations of Risk

As of June 30, 2019 and for the six months ended June 30, 2019, the Company had the following portfolio companies that individually accounted for 10% or more of the Company’s aggregate total assets or investment income:

Portfolio Company	Percentage of Total Investment Income	Percentage of Total Assets
Lawn Doctor	43.8%	41.7%
Polyform	47.0%	24.3%

The portfolio companies are required to make monthly interest payments on their debt, with the debt principal due upon maturity. Failure of any of these portfolio companies to pay contractual interest payments could have a material adverse effect on the Company’s results of operations and cash flows from operations which would impact its ability to make distributions to shareholders.

10. Commitment & Contingencies

See Note 5. “Related Party Transactions” for information on contingent amounts due to the Manager and Sub-Manager for the reimbursement of organization and offering costs under the Public Offering.

As of June 30, 2019, the Company had a material commitment related to the Purchase Agreement discussed in Note 3. “Investments.” See Note 12. “Subsequent Events” for additional information.

From time to time, the Company and officers or directors of the Company may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its businesses. As of June 30, 2019, the Company was not involved in any legal proceedings.

25

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

11. Financial Highlights

The following are schedules of financial highlights of the Company attributed to each class of shares for the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018.    

	Six Months Ended June 30, 2019
	Class FA  Shares			Class A Shares			Class T Shares			Class D Shares			Class I Shares
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period	$	26.65		$	26.44		$	26.54		$	26.23		$	26.55
Net investment income (loss), before expense support(1)	0.44			0.06			0.07			0.22			(0.01		)
Expense support(1)(2)	0.17			0.26			0.14			—			0.40
Net investment income(1)	0.61			0.32			0.21			0.22			0.39
Net realized and unrealized gains(1)(3)	0.56			0.61			0.59			0.57			0.60
Net increase resulting from investment operations	1.17			0.93			0.80			0.79			0.99
Distributions to shareholders(4)	(0.63		)	(0.63		)	(0.50		)	(0.56		)	(0.63		)
Net decrease resulting from distributions to shareholders	(0.63		)	(0.63		)	(0.50		)	(0.56		)	(0.63		)
Net Asset Value, End of Period	$	27.19		$	26.74		$	26.84		$	26.46		$	26.91
Net assets, end of period	$	91,718,198		$	12,509,598		$	1,846,952		$	5,433,648		$	15,928,594
Average net assets(5)	$	87,542,845		$	8,502,674		$	1,365,893		$	3,721,724		$	10,816,273
Shares outstanding, end of period	3,372,710			467,884			68,813			205,333			591,950
Distributions declared	$	2,041,416		$	198,538		$	25,498		$	79,364		$	251,414
Total investment return based on net asset value(6)	4.37		%	3.55		%	3.05		%	3.06		%	3.76		%
Total investment return based on net asset value after total return incentive fee(6)	4.37		%	3.55		%	3.05		%	3.06		%	3.76		%
RATIOS/SUPPLEMENTAL DATA (not annualized):
Ratios to average net assets:(5)(7)
Total operating expenses before total return incentive fee and expense support	1.06		%	3.05		%	3.29		%	2.67		%	2.84		%
Total operating expenses before expense support	1.50		%	3.42		%	3.29		%	2.67		%	3.63		%
Total operating expenses after expense support	0.84		%	2.43		%	2.75		%	2.67		%	2.13		%
Net investment income before total return incentive fee(9)	2.28		%	1.22		%	0.79		%	0.85		%	1.47		%
Net investment income	2.28		%	1.22		%	0.79		%	0.85		%	1.47		%

26

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

	Period February 7, 2018 (8) through June 30, 2018
	Class FA  Shares			Class A Shares			Class T Shares			Class D Shares			Class I Shares
OPERATING PERFORMANCE PER SHARE(10)
Net Asset Value, Beginning of Period(11)	$	25.00		$	25.00		$	25.16		$	25.26		$	25.00
Net investment income before expense support(1)	0.34			(2.32		)	(0.24		)	(0.12		)	(0.17		)
Expense support(1)(2)	0.06			2.43			0.31			0.12			0.38
Net investment income(1)	0.40			0.11			0.07			—			0.21
Net realized and unrealized gains(1)(3)	0.44			0.55			0.29			0.17			0.45
Net increase resulting from investment operations	0.84			0.66			0.36			0.17			0.66
Distributions to shareholders(4)	(0.41		)	(0.29		)	(0.10		)	(0.02		)	(0.26		)
Net decrease resulting from distributions to shareholders	(0.41		)	(0.29		)	(0.10		)	(0.02		)	(0.26		)
Net Asset Value, End of Period	$	25.43		$	25.37		$	25.42		$	25.41		$	25.40
Net assets, end of period	$	83,076,581		$	61,052		$	43,307		$	171,018		$	833,767
Average net assets(5)	$	82,088,518		$	10,152		$	40,449		$	170,204		$	517,198
Shares outstanding, end of period	3,266,260			2,406			1,704			6,730			32,821
Distributions declared	$	1,323,527		$	126		$	149		$	146		$	5,483
Total investment return based on net asset value(6)(12)	3.52		%	2.64		%	1.43		%	0.68		%	2.67		%
Total investment return based on net asset value after total return incentive fee(6)(12)	3.36		%	2.64		%	1.43		%	0.68		%	2.67		%
RATIOS/SUPPLEMENTAL DATA (not annualized):
Ratios to average net assets:(5)(7)
Total operating expenses before total return incentive fee and expense support	1.58		%	16.17		%	2.61		%	1.70		%	3.35		%
Total operating expenses before expense support	1.96		%	18.13		%	2.98		%	1.87		%	4.03		%
Total operating expenses after expense support	1.74		%	8.50		%	1.78		%	1.41		%	2.52		%
Net investment income before total return incentive fee(9)	1.74		%	0.43		%	0.27		%	(0.01		)%	0.83		%
Net investment income	1.59		%	0.43		%	0.27		%	(0.01		)%	0.83		%

FOOTNOTES:

⁽¹⁾  The per share amounts presented are based on weighted average shares outstanding.

⁽²⁾  Expense support is accrued throughout the year and is subject to a final calculation as of the last business day of the calendar year.

⁽³⁾  The amount shown at this caption is the balancing figure derived from the other figures in the schedule. The amount shown at this caption for a share outstanding throughout the period may not agree with the change in the aggregate gains and losses in portfolio investments for the period because of the timing of sales and repurchases of the Company’s shares in relation to fluctuating fair values for the portfolio investments.

⁽⁴⁾  The per share data for distributions is the actual amount of distributions paid or payable per common share outstanding during the entire period; distributions per share are rounded to the nearest $0.01.

⁽⁵⁾  The computation of average net assets during the period is based on net assets measured at each month end, adjusted for capital contributions or withdrawals during the month.

⁽⁶⁾  Total investment return is calculated for each share class as the change in the net asset value for such share class during the period and assuming all distributions are reinvested. Amounts are not annualized and are not representative of total return as calculated for purposes of the total return incentive fee described in Note 5. “Related Party Transactions.” Since there is no public market for the Company’s shares, terminal market value per share is assumed to be equal to net asset value per share on the last day of the period

27

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

presented. The Company’s performance changes over time and currently may be different than that shown above. Past performance is no guarantee of future results. Investment performance is presented without regard to sales load that may be incurred by shareholders in the purchase of the Company’s shares.

⁽⁷⁾  Actual results may not be indicative of future results. Additionally, an individual investor’s ratios may vary from the ratios presented for a share class as a whole.

⁽⁸⁾  The Company commenced operations on February 7, 2018.

⁽⁹⁾  Amounts represent net investment income before total return incentive fee and related expense support as a percentage of average net assets. For the six months ended June 30, 2019, all of the total return incentive fees were covered by expense support. For the period February 7, 2018 through June 30, 2018, all of the total return incentive fees for the Class A, Class T, Class D and Class I shares were covered by expense support and approximately 58.2% of the total return incentive fees for Class FA shares were covered by expense support.

⁽¹⁰⁾  Operating performance per share for the period from February 7, 2018 to June 30, 2018 was previously calculated based on the first investor for each share class. This presentation has been updated to conform to the current year presentation based on weighted average shares outstanding during the period.

⁽¹¹⁾  The net asset value as of the beginning of the period is based on the price of shares sold, net of any sales load, to the initial investor of each respective share class. All Class FA shares sold in the 2018 Private Offering were sold at the same per share amount. The first investors for Class A, Class T, Class D and Class I shares purchased their shares in April 2018, May 2018, June 2018 and April 2018, respectively.

⁽¹²⁾  Total investment return for the period from February 7, 2018 to June 30, 2018 was previously calculated for each share class as the change in the net asset value for such share class plus total distributions for such share class calculated based on the Average Adjusted Capital for such class. This presentation has been updated to conform to the current year presentation described in footnote (6) above.

12. Subsequent Events

Distributions

In July 2019, the Company’s board of directors declared a monthly cash distribution on the outstanding shares of all classes of common shares of record on August 29, 2019 of $0.104167 per share for Class FA shares, $0.104167 per share for Class A shares, $0.083333 per share for Class T shares, $0.093750 per share for Class D shares, and $0.104167 per share for Class I shares.

Offerings

The Company launched an additional Class FA private offering in July 2019 (the “Follow-On Class FA Private Offering” and collectively with the Class FA Private Offering, the “Class FA Private Offerings”) pursuant to Rule 506(c) under Regulation D of the Securities Act. In connection with the Follow-On Class FA Private Offering, the Company entered into a placement agent agreement with CNL Securities Corp. (the “Placement Agent”), an affiliate of the Manager. The Follow-On Class FA Private Offering is being offered on a best efforts basis, which means that the Placement Agent will use its best efforts but is not required to sell any specific amount of shares. The Company will pay the Placement Agent a selling commission of up to 5.5% and placement agent fee of up to 3.0% of the sale price for each Class FA share sold in the Follow-On Class FA Private Offering. Subject to requirements under the Securities Act and the applicable state securities laws of any jurisdiction, the Company intends to conduct the Follow-On Class FA Private Offering until the earlier of: (i) the date the Company has sold the maximum offering amount of the Follow-On Class FA Private Offering or (ii) October 31, 2019. However, the Company reserves the right to extend the outside date of the Follow-On Class FA Private Offering in its sole discretion but in no event later than December 31, 2019.

In July 2019, the Company’s board of directors approved new per share offering prices for each share class in the Public Offering and Class FA Private Offerings. The new offering prices are effective as of July 26, 2019. The following table provides the new offering prices and applicable upfront selling commissions and dealer manager fees for each share class available in the Public Offering and Class FA Private Offerings:

	Class FA		Class A		Class T		Class D		Class I
Effective July 26, 2019:
Offering Price, Per Share	$	27.19	$	29.22	$	28.18	$	26.46	$	26.91
Selling Commissions, Per Share	—		1.75		0.85		—		—
Dealer Manager Fees, Per Share	—		0.73		0.49		—		—

Capital Transactions

28

CNL STRATEGIC CAPITAL, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2019

During the period July 1, 2019 through August 2, 2019, the Company received additional net proceeds from the Class FA Private Offering, Public Offering and its distribution reinvestment plan of:

	Class FA Private Offering and Public Offering								Distribution Reinvestment Plan			Total
Share Class	Shares	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees			Net Proceeds to Company		Shares	Gross Proceeds		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	49,643	$	1,350,000	$	—		$	1,350,000	—	$	—	49,643	$	1,350,000	$	27.19
Class A	44,680	1,280,230		(85,699		)	1,194,531		1,063	28,437		45,743	1,222,968		26.74
Class T	8,091	228,000		(10,830		)	217,170		86	2,314		8,177	219,484		26.84
Class D	24,641	652,000		—			652,000		529	13,998		25,170	665,998		26.46
Class I	80,885	2,176,618		—			2,176,618		898	24,164		81,783	2,200,782		26.91
	207,940	$	5,686,848	$	(96,529	)	$	5,590,319	2,576	$	68,913	210,516	$	5,659,232	$	26.88

Acquisition

On August 1, 2019, the Company acquired a controlling interest of approximately 81% in Roundtables, pursuant to the Purchase Agreement described in Note 3. “Investments”. The Company made a $44.5 million investment consisting of approximately $32.4 million of common equity and approximately $12.1 million of senior secured notes. Under the Purchase Agreement, the Seller has the opportunity to earn up to an additional $2.0 million based on the achievement by Roundtables of certain performance metrics. The final purchase price is subject to this and other post-closing adjustments.

29

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

The following discussion is based on the unaudited condensed consolidated financial statements as of June 30, 2019 and December 31, 2018, and for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) through June 30, 2018. Amounts as of December 31, 2018 included in the unaudited condensed consolidated balance sheets have been derived from the audited consolidated financial statements as of that date. This information should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the notes thereto, as well as the audited consolidated financial statements, notes and management’s discussion and analysis included in our Annual Report on Form 10-K for the year ended December 31, 2018 (our “Form 10-K”). Capitalized terms used in this Item 2 have the same meaning as in the accompanying condensed financial statements unless otherwise defined herein.

Statement Regarding Forward-Looking Information

Certain statements in this quarterly report on Form 10-Q for the six months ended June 30, 2019 (this “Quarterly Report”) constitute “forward-looking statements.” Forward-looking statements are statements that do not relate strictly to historical or current facts, but reflect management’s current understandings, intentions, beliefs, plans, expectations, assumptions and/or predictions regarding the future of our business and its performance, the economy and other future conditions and forecasts of future events and circumstances. Forward-looking statements are typically identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” “continues,” “pro forma,” “may,” “will,” “seeks,” “should” and “could,” and words and terms of similar substance, although not all forward-looking statements include these words. The forward-looking statements contained in this Quarterly Report involve risks and uncertainties, including statements as to:

• our future operating results;

• our business prospects and the prospects of our businesses and other assets;

• unanticipated costs, delays and other difficulties in executing our business strategy;

• performance of our businesses and other assets relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these assets;

• our contractual arrangements and relationships with third parties;

• actual and potential conflicts of interest with the Manager, the Sub-Manager and their respective affiliates;

• the dependence of our future success on the general economy and its effect on the industries in which we target;

• events or circumstances which undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large depository institutions or other significant corporations, terrorist attacks, natural or man-made disasters or threatened or actual armed conflicts;

• the use, adequacy and availability of proceeds from our current public offering, financing sources, working capital or borrowed money to finance a portion of our business strategy and to service our outstanding indebtedness;

• the timing of cash flows, if any, from our businesses and other assets;

• the ability of the Manager and the Sub-Manager to locate suitable acquisition opportunities for us and to manage and operate our businesses and other assets;

• the ability of the Manager, the Sub-Manager and their respective affiliates to attract and retain highly talented professionals;

• the ability to operate our business efficiently, manage costs (including general and administrative expenses) effectively and generate cash flow;

• the lack of a public trading market for our shares;

• the ability to make and the amount and timing of anticipated future distributions;

• estimated net asset value per share of our shares;

• the loss of our exemption from the definition of an “investment company” under the Investment Company Act of 1940, as amended (“the Investment Company Act”);

• fiscal policies or inaction at the U.S. federal government level, which may lead to federal government shutdowns or negative impacts on the U.S economy;

• the degree and nature of our competition; or

• the effect of changes to government regulations, accounting rules or tax legislation.

Our forward-looking statements are not guarantees of our future performance and shareholders are cautioned not to place undue reliance on any forward-looking statements. While we believe our forward-looking statements are reasonable, such statements are inherently susceptible to uncertainty and changes in circumstances. As with any projection or forecast, forward-looking statements are necessarily dependent on assumptions, data and/or methods that may be incorrect or imprecise, and may not be realized. Our forward-looking statements are based on our current expectations and a variety of risks, uncertainties and other factors, many of which are beyond our ability to control or accurately predict.

Important factors that could cause our actual results to vary materially from those expressed or implied in our forward-looking statements include, but are not limited to, the factors listed and described under “Management’s Discussion and Analysis of

30

Financial Condition and Results of Operations” and the “Risk Factors” sections of the Company’s documents filed from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, our Form 10-K and Item 1A in Part II of this Quarterly Report.

All written and oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by these cautionary statements. Forward-looking statements speak only as of the date on which they are made; we undertake no obligation to, and expressly disclaim any obligation to, update or revise forward-looking statements to reflect new information, changed assumptions, the occurrence of subsequent events, or changes to future operating results over time unless otherwise required by law.

Overview

CNL Strategic Capital, LLC is a limited liability company that primarily seeks to acquire and grow durable, middle-market U.S. businesses. We are externally managed by the Manager, CNL Strategic Capital Management, LLC, and sub-managed by the Sub-Manager, Levine Leichtman Strategic Capital, LLC, an affiliate of Levine Leichtman Capital Partners, LLC.

The Manager and the Sub-Manager are collectively responsible for sourcing potential acquisitions and debt financing opportunities, subject to approval by the Manager’s management committee that such opportunity meets our investment objectives and final approval of such opportunity by our board of directors, and monitoring and managing the businesses we acquire and/or finance on an ongoing basis. The Sub-Manager is primarily responsible for analyzing and conducting due diligence on prospective acquisitions and debt financings, as well as the overall structuring of transactions.

We seek to acquire businesses that are highly cash flow generative with annual revenues primarily between $25 million and $250 million and whose management teams seek an ownership stake in the company. Our business strategy is to acquire controlling equity interests in combination with debt positions in middle-market U.S. companies and in doing so, provide long-term capital appreciation and current income while protecting invested capital. In addition, and to a lesser extent, we may acquire other debt and minority equity positions. We may also acquire various types of debt in the secondary market including secured and senior unsecured debt and syndicated senior secured corporate loans of U.S. and, to a lesser extent, non-U.S. corporations, partnerships, limited liability companies and other business entities other than companies. We may also co-invest with other vehicles managed by the Sub-Manager or their affiliates to acquire minority equity positions and debt positions in a co-investment capacity. We expect that these positions will comprise a minority of our total assets.

We were formed as a Delaware limited liability company on August 9, 2016 and we intend to operate our business in a manner that will permit us to avoid registration under the Investment Company Act. We are not a “blank check” company within the meaning of Rule 419 of the Securities Act. We commenced operations on February 7, 2018 when aggregate subscription proceeds in excess of the minimum offering amount of $80 million were received in the 2018 Private Offering.

Our Common Shares Offerings

The 2018 Private Offering

We commenced operations on February 7, 2018 when we met our minimum offering requirement of $80 million in Class FA shares under the 2018 Private Offering and issued approximately 3.3 million Class FA shares resulting in gross proceeds of approximately $81.7 million. The 2018 Private Offering was closed in February 2018.

We did not incur any selling commissions or placement agent fees from the sale of the approximately 3.3 million Class FA shares sold under the terms of the 2018 Private Offering. We incurred obligations to reimburse the Manager and Sub-Manager for organization and offering costs of approximately $0.7 million based on actual amounts raised through the 2018 Private Offering. These organization and offering costs related to the 2018 Private Offering had been previously advanced by the Manager and Sub-Manager, as described further in Note 5. “Related Party Transactions” of Item 1. “Financial Statements.”

Public Offering

Once the Registration Statement became effective on March 7, 2018, we began offering up to $1,000,000,000 of shares, on a best efforts basis, which means that CNL Securities Corp., as the Managing Dealer of the Public Offering, will use its best efforts, but is not required to sell any specific amount of shares. We are offering, in any combination, four classes of shares in the Public Offering: Class A shares, Class T shares, Class D shares and Class I shares. There are differing selling fees and commissions for each class. We also pay annual distribution and shareholder servicing fees, subject to certain limits, on the Class T and Class D shares sold in the Public Offering (excluding sales pursuant to our distribution reinvestment plan).

We are also offering, in any combination, up to $100,000,000 of Class A shares, Class T shares, Class D shares and Class I shares to be issued pursuant to our distribution reinvestment plan.

31

Since the Public Offering became effective through June 30, 2019, we have received net proceeds from the Public Offering of approximately $35.3 million, including approximately $0.4 million received through our distribution reinvestment plan. As of June 30, 2019, the Public Offering price was $29.23 per Class A share, $28.20 per Class T share, $26.45 per Class D share and $26.91 per Class I share. See Note 7. “Capital Transactions” and Note 12. “Subsequent Events” in Item 1. “Financial Statements” for additional information regarding the Public Offering.

Since the Public Offering became effective through June 30, 2019, we have incurred selling commissions and dealer manager fees of approximately $1.1 million from the sale of Class A shares and Class T shares. The Class D shares and Class I shares sold through June 30, 2019 were not subject to selling commissions and dealer manager fees. We also incurred obligations to reimburse the Manager and Sub-Manager for organization and offering costs of approximately $0.5 million based on actual amounts raised through the Public Offering since the Public Offering became effective through June 30, 2019. These organization and offering costs related to the Public Offering had been previously advanced by the Manager and Sub-Manager, as described further in Note 5. “Related Party Transactions” of Item 1. “Financial Statements.”

In July 2019, our board of directors approved new per share public offering prices for each share class in the Public Offering. The new public offering prices are effective as of July 26, 2019. The following table provides the new public offering prices and applicable upfront selling commissions and dealer manager fees for each share class available in the Public Offering:

	Class A		Class T		Class D		Class I
Effective July 26, 2019:
Public Offering Price, Per Share	$	29.22	$	28.18	$	26.46	$	26.91
Selling Commissions, Per Share	1.75		0.85		—		—
Dealer Manager Fees, Per Share	0.73		0.49		—		—

Class FA Private Offerings

We are currently conducting separate Class FA Private Offerings of up to $50.0 million each of Class FA shares pursuant to 506(c) under Regulation D. CNL Securities Corp., an affiliate of the Manager, will serve as placement agent for each Class FA Private Offering. Subject to requirements under the Securities Act and the applicable state securities laws of any jurisdiction, we intend to conduct each Class FA Private Offering until the earlier of: (i) the date we have sold the maximum offering amount of each respective Class FA Private Offering or (ii) October 31, 2019. However, we reserve the right to extend the outside date of each Class FA Private Offering in our sole discretion but in no event later than December 31, 2019.

In June 2019, we met our minimum offering amount with approximately $3.1 million in aggregate gross proceeds from subscriptions for Class FA Shares from the Class FA Private Offering and we held our initial escrow closing on subscriptions for the Class FA Private Offering. There are no selling commissions or placement agent fees for the sale of Class FA shares in our Class FA Private Offering.

Under the Follow-On Class FA Private Offering we will pay the Placement Agent a selling commission of up to 5.5% and placement agent fee of up to 3.0% of the sale price for each Class FA share sold in the Follow-On Class FA Private Offering, except where the selling commission or placement agent fee may be reduced.

In conjunction with the launch of the Class FA Private Offering, our board of directors reclassified 4,000,000 authorized shares of Class T shares to Class FA shares, resulting in shares authorized of 7,400,000 Class FA shares, 94,660,000 Class A shares, 658,620,000 Class T shares, 94,660,000 Class D shares and 94,660,000 Class I shares.

In July 2019, our board of directors approved a new per share offering price of $27.19 for the Class FA shares in the Class FA Private Offerings.

Portfolio and Investment Activity

In August 2019, we acquired a controlling interest of approximately 81% in Roundtables, pursuant to the Purchase Agreement entered into in June 2019 described in Note 3. “Investments” of Item 1. “Financial Statements”. The Company made a $44.5 million investment consisting of approximately $32.4 million of common equity and approximately $12.1 million of senior secured notes. Under the Purchase Agreement, the Seller has the opportunity to earn up to an additional $2.0 million based on the achievement by Roundtables of certain performance metrics. The final purchase price is subject to this and other post-closing adjustments.

32

In February 2018, we acquired a controlling equity interest in Lawn Doctor from an affiliate of the Sub-Manager, through an investment consisting of common equity and a debt investment in the form of a secured second lien note to Lawn Doctor. Lawn Doctor is a leading franchisor of residential lawn care programs and services. Lawn Doctor’s core service offerings provide residential homeowners with year-round monitoring and treatment by focusing on weed and insect control, seeding, and professionally and consistently-administered fertilization, using its proprietary line of equipment. Lawn Doctor is not involved in other lawn maintenance services, such as mowing, edging and leaf blowing. As of June 30, 2019, we owned approximately 62.5% of the outstanding equity in Lawn Doctor on an undiluted basis. The cost basis of our investments in Lawn Doctor was approximately $30.5 million for our common equity investment and $15.0 million for our debt investment as of June 30, 2019.    

In February 2018, we acquired a controlling equity interest in Polyform from an affiliate of the Sub-Manager, through an investment consisting of common equity and a debt investment in the form of a first lien secured note to Polyform. Polyform is a leading developer, manufacturer and marketer of polymer clay products worldwide. Through its two primary brands, Sculpey® and Premo!®, Polyform sells a comprehensive line of premium craft products to a diverse mix of customers including specialty and big box retailers, distributors and e-tailers.  As of June 30, 2019, we owned approximately 87.1% of the outstanding equity in Polyform on an undiluted basis. The cost basis of our investments in Polyform was approximately $15.6 million for our common equity investment and $15.7 million for our debt investment as of June 30, 2019.

The debt investments in the form of a second lien secured note issued to Lawn Doctor and in the form of a first lien secured note issued to Polyform as described above accrue interest at a per annum rate of 16.0%. Each note will mature in August 2023. The note purchase agreements contain customary covenants and events of default. As of June 30, 2019, Lawn Doctor and Polyform were in compliance with our debt covenants.

As of June 30, 2019 and December 31, 2018, our investment portfolio included four distinct investment positions comprised of the following:

	As of June 30, 2019						As of December 31, 2018
Asset Category	Cost		Fair Value		Fair Value Percentage of Investment Portfolio		Cost		Fair Value		Fair Value Percentage of Investment Portfolio
Senior debt
Senior secured debt - first lien	$	15,700,000	$	15,700,000	18.5	%	$	15,700,000	$	15,700,000	19.0	%
Senior secured debt - second lien	15,000,000		15,000,000		17.6	%	15,000,000		15,000,000		18.2	%
Total senior debt	30,700,000		30,700,000		36.1	%	30,700,000		30,700,000		37.2	%
Equity	46,074,339		54,251,000		63.9	%	46,074,339		51,800,000		62.8	%
Total investments	$	76,774,339	$	84,951,000	100.0	%	$	76,774,339	$	82,500,000	100.0	%

As of June 30, 2019 and December 31, 2018, the weighted average yield on our debt portfolio was 16.0%.

See Note 3. “Investments” in Item 1. “Financial Statements” for additional information related to our investments.

Concentrations of Risk

As of June 30, 2019 and for the six months ended June 30, 2019, we had the following portfolio companies that individually accounted for 10% or more of our aggregate total assets or investment income:

Portfolio Company	Percentage of Total Investment Income	Percentage of Total Assets
Lawn Doctor	43.8%	41.7%
Polyform	47.0%	24.3%

The portfolio companies are required to make monthly interest payments on their debt, with the debt principal due upon maturity. Failure of any of these portfolio companies to pay contractual interest payments could have a material adverse effect on our results of operations and cash flows from operations which would impact our ability to make distributions to shareholders.

Adjusted EBITDA

When evaluating the performance of our portfolio, we monitor Adjusted EBITDA to measure the financial and operational performance of our portfolio companies and their ability to pay contractually obligated debt payments to us. In connection with this evaluation, the Manager and Sub-Manager review monthly portfolio company operating performance versus budgeted expectations and conduct regular operational review calls with the management teams of the portfolio companies.

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We present Adjusted EBITDA as a supplemental measure of the performance of our portfolio companies. We define Adjusted EBITDA as net income (loss), plus (i) interest expense, net, and loan cost amortization, (ii) taxes and (iii) depreciation and amortization, as further adjusted for certain other non-recurring items that we do not consider indicative of the ongoing operating performance of our portfolio companies. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future our portfolio companies may incur expenses that are the same as or similar to some of the adjustments in this presentation. This presentation of Adjusted EBITDA should not be construed as an inference that the future results of our portfolio companies will be unaffected by unusual or non-recurring items.

We present Adjusted EBITDA because we believe it assists investors in comparing the performance of such businesses across reporting periods on a consistent basis by excluding items that we do not believe are indicative of their core operating performance.

Adjusted EBITDA has limitations as an analytical tool. Some of these limitations are: (i) Adjusted EBITDA does not reflect cash expenditures, or future requirements, for capital expenditures or contractual commitments; (ii) Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; (iii) Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on indebtedness; (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; (v) Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we do not consider to be indicative of the on-going operations of our portfolio companies; and (vi) other companies in similar industries as our portfolio companies may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on the GAAP results and using Adjusted EBITDA only supplementally.

Summarized Net Income to Adjusted EBITDA Reconciliations (Unaudited)

Lawn Doctor

	Quarter Ended June 30, 2019		Quarter Ended June 30, 2018		Six Months Ended June 30, 2019		For the Period from February 7, 2018 (1) to June 30, 2018
Net income attributable to Lawn Doctor (GAAP)	$	312,826	$	727,745	$	173,815	$	1,016,602
Interest and debt related expenses	1,098,544		1,109,998		2,187,878		1,657,897
Depreciation and amortization	619,186		515,886		1,248,860		820,176
Income tax expense	103,053		57,200		39,465		46,267
Adjusted EBITDA (non-GAAP)	$	2,133,609	$	2,410,829	$	3,650,018	$	3,540,942

Polyform

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			For the Period from February 7, 2018 (1) to June 30, 2018
Net loss (GAAP)	$	(199,892	)	$	(179,046	)	$	(194,066	)	$	(682,076	)
Interest and debt related expenses	728,147			728,147			1,448,292			1,157,093
Depreciation and amortization	412,120			625,153			823,564			984,751
Income tax benefit	(79,000		)	(72,000		)	(76,000		)	(146,000		)
Transaction related expenses (2)	—			31,657			—			353,910
Adjusted EBITDA (non-GAAP)	$	861,375		$	1,133,911		$	2,001,790		$	1,667,678

FOOTNOTES:

⁽¹⁾  February 7, 2018 is the date we acquired the initial businesses.

⁽²⁾  Transaction related expenses are non-recurring.

Factors Impacting Our Operating Results

We expect that the results of our operations will be affected by a number of factors. Many of the factors that will affect our operating results are beyond our control.

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We will be dependent upon the earnings of and cash flow from the businesses that we acquire to meet our corporate overhead and management fee expenses and to make distributions. These earnings and cash flows, net of any minority interests in these businesses, will be available:

• first, to meet our management fees and corporate overhead expenses ; and

• second, to fund business operations and distributions by us to shareholders.

Size of assets

If we are unable to raise substantial funds, we will be limited in the number and type of acquisitions we may make. The size of our assets will be a key revenue driver. Generally, as the size of our assets grows, the amount of income we receive will increase. In addition, our assets may grow at an uneven pace as opportunities to acquire assets may be irregularly timed, and the timing and extent of the Manager’s and the Sub-Manager’s success in identifying such opportunities, and our success in making acquisitions, cannot be predicted.

Market conditions

From time to time, the global capital markets may experience periods of disruption and instability, which could materially and adversely impact the broader financial and credit markets and reduce the availability to us of debt and equity capital. Significant changes or volatility in the capital markets may also have a negative effect on the valuations of our businesses and other assets. While all of our assets are likely to not be publicly traded, applicable accounting standards require us to assume as part of our valuation process that our assets are sold in a principal market to market participants (even if we plan on holding an asset long term or through its maturity) and impairments of the market values or fair market values of our assets, even if unrealized, must be reflected in our financial statements for the applicable period, which could result in significant reductions to our net asset value for the period. Significant changes in the capital markets may also affect the pace of our activity and the potential for liquidity events involving our assets. Thus, the illiquidity of our assets may make it difficult for us to sell such assets to access capital if required, and as a result, we could realize significantly less than the value at which we have recorded our assets if we were required to sell them for liquidity purposes.

Liquidity and Capital Resources

General

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments, fund and maintain our assets and operations, repay borrowings, make distributions to our shareholders and other general business needs. We will use significant cash to fund acquisitions, make distributions to our shareholders and fund our operations. Our primary sources of cash will generally consist of:

• the net proceeds from our Offerings;

• distributions and interest earned from our assets; and

• proceeds from sales of assets and principal repayments from our assets.

We expect we will have sufficient cash from current sources to meet our liquidity needs for the next twelve months. However, we may opt to supplement our equity capital and increase potential returns to our shareholders through the use of prudent levels of borrowings. We may use debt when the available terms and conditions are favorable to long-term investing and well-aligned with our business strategy. In determining whether to borrow money, we seek to optimize maturity, covenant packages and rate structures. Most importantly, the risks of borrowing within the context of our business outlook and the impact on our businesses are extensively analyzed by the Manager and our board of directors in making this determination.

While we generally intend to hold our assets for the long term, certain assets may be sold in order to manage our liquidity needs, meet other operating objectives and adapt to market conditions. The timing and impact of future sales of our assets, if any, cannot be predicted with any certainty.

As of June 30, 2019 and December 31, 2018, we had approximately $43.2 million and $21.7 million of cash, respectively.

Sources of Liquidity and Capital Resources

Offerings. We received approximately $22.5 million and $80.1 million in net proceeds (0.8 million shares and 3.3 million shares, respectively) during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively, from our Offerings, which excludes approximately $0.3 million (10,290 shares) and $0.01 million (591 shares) raised through our distribution reinvestment plan during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. Additionally, the amount raised during the period

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from February 7, 2018 (commencement of operations) to June 30, 2018 included a $2.4 million non-cash contribution by an affiliate of the Sub-Manager, as described in Note 5. “Related Party Transactions” of Item 1. “Financial Statements.” As of June 30, 2019, we had approximately 945 million common shares available for sale through the Public Offering and Class FA Private Offerings.

Operating Activities. During the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, we generated operating cash flows (excluding amounts related to purchases of investments) of approximately $1.3 million and $1.5 million, respectively. The decrease in operating cash flows (excluding amounts related to purchases of investments) is primarily attributable to a decrease in net amounts due from related parties of approximately $1.1 million and a decrease in accounts payable of approximately $0.3 million, offset by (i) an increase in net investment income of approximately $1.0 million primarily due to an increase in interest earned on our debt investments and distributions from our equity investments and (ii) a decrease in payments of organization and offering expenses of approximately $0.2 million.

Borrowings. In June 2019, the Company, through a wholly-owned subsidiary, entered into a Loan Agreement for a $20.0 million Line of Credit. The purpose of the Line of Credit is for general Company working capital and acquisition financing purposes. The Line of Credit has a maturity date of 364 days from the effective date of the Loan Agreement plus one 12-month extension. We had not borrowed any amounts under the Line of Credit as of June 30, 2019.

Uses of Liquidity and Capital Resources

Investments.We used approximately $74.4 million of the cash proceeds from the 2018 Private Offering to purchase our initial businesses during the period from February 7, 2018 (commencement of operations) to June 30, 2018. We did not acquire any new businesses or investments during the six months ended June 30, 2019.

Distributions.We paid distributions to our shareholders of approximately $2.2 million and $1.0 million during the six months ended June 30, 2019 and during the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. See “Distributions” below for additional information.

Distributions Declared

In January 2019, our board of directors began declaring cash distributions to shareholders based on monthly record dates, and such distributions were paid monthly in arrears. During the six months ended June 30, 2019, our board of directors declared six monthly distributions totaling approximately $2.6 million, of which approximately $2.3 million was paid to shareholders and $0.3 million was reinvested through the distribution reinvestment plan (including amounts paid and reinvested in July 2019 of approximately $0.4 million and $0.07 million, respectively).

During the period from February 7, 2018 (commencement of operations) to June 30, 2018, our board of directors declared cash distributions to shareholders based on weekly record dates, and such distributions were paid monthly in arrears. Our board of directors declared 17 weekly distributions starting March 7, 2018 through and including June 26, 2018, totaling approximately $1.3 million, of which approximately $1.3 million was paid to shareholders and $0.02 million was reinvested through the distribution reinvestment plan during the period February 7, 2018 (commencement of operations) to June 30, 2018, all of which was paid and reinvested in July 2018. See Note 6. “Distributions” in Item 1. “Financial Statements” for additional information, including distributions declared per share for each share class.

Cash distributions declared during the periods presented were funded from the following sources noted below:

	Six Months Ended June 30, 2019				Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
	Amount		% of Cash Distributions Declared		Amount		% of Cash Distributions Declared
Net investment income(1)	$	2,301,835	88.7	%	$	1,307,313	98.3	%
Distributions in excess of net investment income(2)	294,395		11.3	%	22,118		1.7	%
Total distributions declared(3)	$	2,596,230	100.0	%	$	1,329,431	100.0	%

FOOTNOTES:

⁽¹⁾ Net investment income includes expense support from the Manager and Sub-Manager of $826,520 and $187,358 for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. See Note 5. “Related Party Transactions” of Item 1. “Financial Statements” for additional information.

⁽²⁾ Consists of offering proceeds for both periods presented.

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⁽³⁾  For the six months ended June 30, 2019, includes $313,906 of distributions reinvested pursuant to our distribution reinvestment plan, of which $68,914 was reinvested in July 2019 with the payment of distributions declared in June 2019. For the period from February 7, 2018 to June 30, 2018, includes $22,066 of distributions reinvested pursuant to our distribution reinvestment plan, of which $7,208 was reinvested in July 2018.

We calculate each shareholder’s specific distribution amount for the period using record and declaration dates. Distributions are made on all classes of our shares at the same time. Amounts distributed are allocated among each class in proportion to the number of shares of each class outstanding. Amounts distributed to each class are allocated among the holders of our shares in such class in proportion to their shares. The per share amount of distributions on Class A, Class T, Class D and Class I shares will differ because of different allocations of certain class-specific expenses. Specifically, distributions on Class T shares and Class D shares may be lower than distributions on Class A, Class FA and Class I shares because we are required to pay ongoing annual distribution and shareholder servicing fees with respect to the Class T shares and Class D shares sold in the primary offering. Additionally, distributions on the Non-founder shares may be lower than distributions on Class FA shares because we are required to pay higher management and incentive fees to the Manager and the Sub-Manager with respect to the Non-founder shares. There is no assurance that we will pay distributions in any particular amount, if at all. See Note 6. “Distributions” in Item 1. “Financial Statements” for additional disclosures regarding distributions, including per share amounts declared per share class for the periods presented.

Distribution Reinvestment Plan

We have adopted a distribution reinvestment plan pursuant to which shareholders who purchase shares in the Public Offering have their cash distributions automatically reinvested in additional shares having the same class designation as the class of shares to which such distributions are attributable, unless such shareholders elect to receive distributions in cash, are residents of Opt-In States, or are clients of certain participating broker-dealers that do not permit automatic enrollment in our distribution reinvestment plan. Opt-In States include Alabama, Arkansas, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nebraska, New Hampshire, New Jersey, North Carolina, Ohio, Oregon, and Washington. Shareholders who are residents of Opt-In States, holders of Class FA shares and clients of certain participating broker-dealers that do not permit automatic enrollment in our distribution reinvestment plan automatically receive their distributions in cash unless they elect to have their cash distributions reinvested in additional shares. Cash distributions paid on Class FA shares are reinvested in additional shares of Class A shares.

The purchase price for shares purchased under our distribution reinvestment plan is equal to the most recently determined and published net asset value per share of the applicable class of shares. Because the annual distribution and shareholder servicing fee is calculated based on net asset value, it reduces net asset value and/or distributions with respect to Class T shares and Class D shares, including shares issued under the distribution reinvestment plan with respect to such share classes. To the extent newly issued shares are purchased from us under the distribution reinvestment plan or shareholders elect to reinvest their cash distribution in our shares, we retain and/or receive additional funds for acquisitions and general purposes including the repurchase of shares under the Share Repurchase Program.

We do not pay selling commissions or dealer manager fees on shares sold pursuant to our distribution reinvestment plan. However, the amount of the annual distribution and shareholder servicing fee payable with respect to Class T or Class D shares, respectively, sold in the Public Offering is allocated among all Class T or Class D shares, respectively, including those sold under our distribution reinvestment plan and those received as distributions.

Our shareholders will be taxed on their allocable share of income, even if their distributions are reinvested in additional shares of our common shares and even if no distributions are made.

Share Repurchase Program

We adopted a Share Repurchase Program effective March 2019, pursuant to which we conduct quarterly share repurchases to allow our shareholders to sell all or a portion of their shares (at least 5% of his or her shares) back to us at a price equal to the net asset value per share of the month immediately prior to the repurchase date. The repurchase date is generally the last business day of the month of a calendar quarter end. We are not obligated to repurchase shares under the Share Repurchase Program. If we determine to repurchase shares, the Share Repurchase Program also limits the total amount of aggregate repurchases of Class A, Class FA, Class T, Class D and Class I shares to up to 2.5% of our aggregate net asset value per calendar quarter (based on the aggregate net asset value as of the last date of the month immediately prior to the repurchase date) and up to 10% of our aggregate net asset value per year (based on the average aggregate net asset value as of the end of each of our trailing four quarters). The Share Repurchase Program also includes certain restrictions on the timing, amount and terms of our repurchases intended to ensure our ability to qualify as a partnership for U.S. federal income tax purposes.

The aggregate amount of funds under the Share Repurchase Program is determined on a quarterly basis at the sole discretion of our board of directors. During any calendar quarter, the total amount of aggregate repurchases is limited to the aggregate proceeds from our distribution reinvestment plan during the previous quarter unless our board of directors determines otherwise. At the sole

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discretion of our board of directors, we may also use other sources, including, but not limited to, offering proceeds and borrowings to repurchase shares. 

To the extent that the number of shares submitted to us for repurchase exceeds the number of shares that we are able to purchase, we will repurchase shares on a pro rata basis, from among the requests for repurchase received by us based upon the total number of shares for which repurchase was requested and the order of priority described in the Share Repurchase Program. We may repurchase shares including fractional shares, computed to three decimal places.

During the quarter ended June 30, 2019, we received requests for the repurchase of approximately $0.3 million of our common shares, which exceeded proceeds received from its distribution reinvestment plan in the previous quarter by approximately $0.2 million. Our board of directors approved the use of other sources to satisfy repurchase requests received in excess of proceeds received from the distribution reinvestment plan. The following table summarizes the shares repurchased during the six months ended June 30, 2019:

	Six Months Ended June 30, 2019
	Shares Repurchased	Total Consideration		Price Paid per Share
Class FA shares	6,400	$	173,824	$	27.16
Class A shares	244	6,534		26.75
Class I shares	4,745	127,680		26.91
Total	11,389	$	308,038	$	27.05

Results of Operations

We commenced operations on February 7, 2018, as described above under “Overview.” We acquired our initial businesses on February 7, 2018 using a substantial portion of the net proceeds from the 2018 Private Offering. See “Portfolio and Investment Activity” above for discussion of the general terms and characteristics of our investments, and for information regarding investment activities since we commenced operations on February 7, 2018.

The following is a summary of our operating results for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) to June 30, 2018:

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Total investment income	$	1,843,164		$	2,023,986		$	3,612,949		$	2,752,202
Total operating expenses	(1,282,161		)	(1,163,660		)	(2,137,634		)	(1,632,247		)
Expense support	610,447			144,146			826,520			187,358
Net investment income	1,171,450			1,004,472			2,301,835			1,307,313
Net change in unrealized appreciation on investments	2,170,000			928,424			2,451,000			1,452,873
Net increase in net assets resulting from operations	$	3,341,450		$	1,932,896		$	4,752,835		$	2,760,186

Investment Income

Investment income consisted of the following for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) to June 30, 2018:

	Quarter Ended June 30, 2019		Quarter Ended June 30, 2018		Six Months Ended June 30, 2019		Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Interest income	$	1,437,422	$	1,263,063	$	2,800,702	$	1,991,279
Dividend income	405,742		760,923		812,247		760,923
Total investment income	$	1,843,164	$	2,023,986	$	3,612,949	$	2,752,202

The majority of our interest income is generated from our debt investments, all of which had fixed rate interest as of June 30, 2019 and 2018. As of June 30, 2019 and 2018, our weighted average annual yield on our accruing debt investments was 16.0% based

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on amortized cost, as defined above in “Portfolio and Investment Activity.” Interest income from our debt investments was approximately $1.2 million for each of the quarter ended June 30, 2019 and 2018, while interest income earned on our cash accounts was approximately $0.2 million and $0.02 million, respectively. Interest income from our debt investments was approximately $2.5 million and $2.0 million for the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively, while interest income earned on our cash accounts was approximately $0.3 million and $0.03 million, respectively.

During the quarter ended June 30, 2019 and 2018, we received dividend income of approximately $0.4 million and $0.8 million, respectively, from our equity investments. We received dividend income of approximately $0.8 million during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018.

We do not believe that our interest income, dividend income and total investment income are representative of either our stabilized performance or our future performance. We expect investment income to increase in future periods as we increase our base of investments that we expect to result from existing cash, borrowings and an expected increase in capital available for investment using proceeds from our Offerings.

Operating Expenses

Our operating expenses for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) to June 30, 2018 were as follows:

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Organization and offering expenses	$	136,303		$	317,230		$	322,004		$	538,794
Base management fees	265,128			194,974			506,766			283,536
Total return incentive fees	496,660			308,735			496,660			308,735
Professional services	182,491			168,862			410,006			232,530
Director fees and expenses	53,380			45,210			111,079			82,280
General and administrative expenses	30,255			61,000			58,311			93,810
Custodian and accounting fees	61,817			39,520			123,967			64,433
Insurance expense	47,079			28,077			93,024			28,077
Annual distribution and shareholder servicing fees	9,048			52			15,817			52
Total operating expenses	1,282,161			1,163,660			2,137,634			1,632,247
Expense support	(610,447		)	(144,146		)	(826,520		)	(187,358		)
Net expenses	$	671,714		$	1,019,514		$	1,311,114		$	1,444,889

We consider the following expense categories to be relatively fixed in the near term: insurance expenses and director fees and expenses. Variable operating expenses include general and administrative, custodian and accounting fees, professional services, base management fees, total return incentive fees, and annual distribution and shareholder servicing fees. We expect these variable operating expenses to increase either in connection with the growth in our asset base (base management fees and total return incentive fees), the number of shareholders and open accounts (transfer agency services and shareholder services, distribution and shareholder servicing fees) and the complexity of our investment processes and capital structure (professional services).

Organization and Offering Expenses

Organization expenses are expensed on our statement of operations as incurred. Offering expenses, which consist of amounts incurred for items such as legal, accounting, regulatory and printing work incurred related to our Offerings, are capitalized on our statements of assets and liabilities as deferred offering expenses and expensed to our statement of operations over the lesser of the offering period or 12 months; however, the end of the deferral period will not exceed 12 months from the date the offering expense is incurred by the Manager and the Sub-Manager.

We expensed organization and offering expenses of approximately $0.1 million and $0.3 million for the quarter ended June 30, 2019 and 2018, respectively, and approximately $0.3 million and $0.5 million during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. The decrease in organization and offering expenses is primarily due to a decrease in gross proceeds raised through our Offerings during the quarter and six months ended June 30, 2019, as compared to the same periods of 2018.

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Base Management Fee

Our base management fee is calculated for each share class at an annual rate of (i) for the Non-founder shares, 2% of the product of (x) our average gross assets and (y) the ratio of Non-founder share Average Adjusted Capital for a particular class to total Average Adjusted Capital and (ii) for the Founder shares, 1% of the product of (x) our average gross assets and (y) the ratio of outstanding Founder share Average Adjusted Capital to total Average Adjusted Capital, in each case excluding cash, and is payable monthly in arrears.

We incurred base management fees of approximately $0.3 million and $0.2 million during the quarter ended June 30, 2019 and 2018, respectively, and approximately $0.5 million and $0.3 million during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. The increase in base management fees is primarily attributable to the increase in our average gross assets during the quarter and six months ended June 30, 2019, as compared to the same periods of 2018.

Total Return Incentive Fee

The Manager and Sub-Manager are eligible to receive incentive fees based on the Total Return to Shareholders, as defined in the Management Agreement and Sub-Management Agreement, for each share class in any calendar year, payable annually in arrears. We accrue (but do not pay) the total return incentive fee on a quarterly basis, to the extent that it is earned, and perform a final reconciliation at completion of each calendar year. The total return incentive fee is due and payable to the Manager and Sub-Manager no later than ninety (90) calendar days following the end of the applicable calendar year. The total return incentive fee may be reduced or deferred by the Manager and the Sub-Manager under the Management Agreement and the Expense Support and Conditional Reimbursement Agreement.

We incurred total return incentive fees of approximately $0.5 million during the quarter and six months ended June 30, 2019 and $0.3 million during the quarter ended June 30, 2018 and during the period from February 7, 2018 (commencement of operations) to June 30, 2018. The increase in total return incentive fees during the quarter and six months ended June 30, 2019 is primarily attributable to an increase in unrealized appreciation on investments as compared to the same periods of 2018.

Other Operating Expenses

Other operating expenses (consisting of professional services, director fees and expenses, general and administrative expenses, custodian and accounting fees, and insurance expense) were approximately $0.4 million and $0.3 million during the quarter ended June 30, 2019 and 2018, respectively, and approximately $0.8 million and $0.5 million during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. The increase in other operating expenses during the quarter ended June 30, 2019 is primarily attributable to an increase in the number of shareholders, as compared to the same period of 2018. The increase in other operating expenses during the six months ended June 30, 2019 is primarily attributable to a full six month period of operations as compared to a partial period during the period from February 7, 2018 (commencement of operations) to June 30, 2018, and, to a lesser extent, an increase in the number of shareholders.

Annual Distribution and Shareholder Servicing Fee

The Managing Dealer is eligible to receive an annual distribution and shareholder servicing fee, subject to certain limits, with respect to our Class T and Class D shares sold in the Public Offering (excluding Class T shares and Class D shares sold through our distribution reinvestment plan and those received as share distributions) in an amount equal to 1.00% and 0.50%, respectively, of the current net asset value per share.

We incurred annual distribution and shareholder servicing fees of $9,048 and $52 during the quarter ended June 30, 2019 and 2018, respectively, and $15,817 and $52 during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. The increase in annual distribution and shareholder servicing fees during the quarter and six months ended June 30, 2019, is directly attributable to an increase in Class T and Class D shareholders.

Expense Support and Conditional Reimbursement Agreement

Expense support from the Manager and Sub-Manager partially offsets operating expenses. Expense support totaled approximately $0.6 million and $0.1 million during the quarter ended June 30, 2019 and 2018, respectively, and approximately $0.8 million and $0.2 million during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. The actual amount of expense support is determined as of the last business day of each calendar year and is paid within 90 days after each year end per the terms of the Expense Support and Conditional Reimbursement Agreement described below.

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We have entered into an Expense Support and Conditional Reimbursement Agreement with the Manager and the Sub-Manager, pursuant to which each of the Manager and the Sub-Manager agrees to reduce the payment of base management fees, total return incentive fees and the reimbursements of reimbursable expenses due to the Manager and the Sub-Manager under the Management Agreement and the Sub-Management Agreement, as applicable, to the extent that our annual regular cash distributions exceed our annual net income (with certain adjustments). Expense Support is equal to the annual (calendar year) excess, if any, of (a) the distributions (as defined in the Expense Support and Conditional Reimbursement Agreement) declared and paid (net of our distribution reinvestment plan) to shareholders minus (b) the available operating funds. The Expense Support amount is borne equally by the Manager and the Sub-Manager and is calculated as of the last business day of the calendar year. The Manager and Sub-Manager equally conditionally reduce the payment of fees and reimbursements of reimbursable expenses in an amount equal to the conditional waiver amount (as defined in and subject to limitations described in the Expense Support and Conditional Reimbursement Agreement). The term of the Expense Support and Conditional Reimbursement Agreement has the same initial term and renewal terms as the Management Agreement or the Sub-Management Agreement, as applicable to the Manager or the Sub-Manager.

If, on the last business day of the calendar year, there are Excess Operating Funds, we will use such Excess Operating Funds to pay the Manager and the Sub-Manager all or a portion of the outstanding unreimbursed Expense Support amounts for each share class, as applicable, subject to the Conditional Reimbursements as described further in the Expense Support and Conditional Reimbursement Agreement. Our obligation to make Conditional Reimbursements shall automatically terminate and be of no further effect three years following the date which the Expense Support amount was provided and to which such Conditional Reimbursement relates, as described further in the Expense Support and Conditional Reimbursement Agreement. We did not have any Excess Operating Funds as of June 30, 2019.

Net Change in Unrealized Appreciation

During the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) to June 30, 2018, net unrealized appreciation on investments consisted of the following:

	Quarter Ended June 30, 2019		Quarter Ended June 30, 2018		Six Months Ended June 30, 2019		Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Unrealized appreciation	$	2,170,000	$	928,424	$	2,451,000	$	1,452,873
Unrealized depreciation	—		—		—		—
Total net unrealized appreciation	$	2,170,000	$	928,424	$	2,451,000	$	1,452,873

The net change in unrealized appreciation for all periods presented primarily pertained to our investment in the equity of Lawn Doctor.  Such unrealized appreciation is based on the current fair value of such investment as determined by our board of directors based on inputs from the Sub-Manager and our independent valuation firm and consistent with our valuation policy, which take into consideration, among other factors, Lawn Doctor’s strong performance in comparison to budgeted results for the year, future growth prospects of Lawn Doctor, and the valuations of publicly traded comparable companies as determined by our independent valuation firm. 

We are not aware of any material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from our investments, other than those described above and the risk factors identified in Item 1A in Part I of our Form 10-K and Item 1A in Part II of this Quarterly Report and under “Risk Factors” in our prospectus.

Net Assets

During the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) to June 30, 2018, the change in net assets consisted of the following:

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Operations	$	3,341,450		$	1,932,896		$	4,752,835		$	2,760,186
Distributions to shareholders	(1,360,259		)	(1,026,590		)	(2,596,230		)	(1,329,431		)
Capital share transactions	11,776,317			1,098,470			22,450,575			82,554,970
Change in net assets	$	13,757,508		$	2,004,776		$	24,607,180		$	83,985,725

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Operations increased by approximately $1.4 million and $2.0 million during the quarter and six months ended June 30, 2019, respectively, as compared to the quarter ended June 30, 2018 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. The increase in operations is primarily due to an increase of approximately $1.2 million and $1.0 million in the net change in unrealized appreciation during the quarter and six months ended June 30, 2019, respectively, and an increase of approximately $0.2 million and $1.0 million in net investment income, respectively.

Distributions increased approximately $0.3 million and $1.3 million during the quarter and six months ended June 30, 2019, respectively, as compared to the quarter ended June 30, 2018 and the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively, primarily as a result of an increase in shares outstanding.

Capital share transactions increased approximately $10.7 million during the quarter ended June 30, 2019, as compared to the quarter ended June 30, 2018, primarily due to an increase in proceeds raised through our Public Offering of approximately $7.7 million, an increase in proceeds raised through our Class FA Private Offering of approximately $3.1 million and an increase in proceeds raised through our distribution reinvestment plan of approximately $0.2 million, offset by an increase in share repurchases of approximately $0.3 million. Capital share transactions decreased approximately $60.1 million during the six months ended June 30, 2019, as compared to the period from February 7, 2018 (commencement of operations) to June 30, 2018. The decrease was primarily due to the fact that during the period from February 7, 2018 (commencement of operations) to June 30, 2018, we raised net proceeds of approximately $81.5 million through the 2018 Private Offering, which we closed in February 2018, and approximately $1.1 million through our Public Offering. During the six months ended June 30, 2019, we raised net proceeds of approximately $19.4 million through our Public Offering, approximately $3.1 million through our Class FA Private Offering, and approximately $0.3 million through our distribution reinvestment plan. Capital share transactions were reduced during the six months ended June 30, 2019 as a result of the repurchasing of $0.3 million in shares under the Share Repurchase Program, which became effective in March 2019. No shares were repurchased in 2018.

Cumulative total returns without upfront selling commissions and dealer manager fees from inception to June 30, 2019 were 15.7% for Class FA, 13.4% for Class A, 11.2% for Class T, 9.4% for Class D and 14.0% for Class I. Cumulative total returns assuming full upfront selling commissions and dealer manager fees from inception to June 30, 2019 were 3.8% for Class A and 6.0% for Class T.

Our shares are illiquid investments for which there currently is no secondary market. Investors should not expect to be able to resell their shares regardless of how we perform. If investors are able to sell their shares, they will likely receive less than their purchase price. Our net asset value and annualized returns — which are based in part upon determinations of fair value of Level 3 investments by our board of directors, not active market quotations — are inherently uncertain. Past performance is not a guarantee of future results.

Hedging Activities

As of June 30, 2019, we had not entered into any derivatives or other financial instruments. However, in an effort to stabilize our revenue and input costs where applicable, we may enter into derivatives or other financial instruments in an attempt to hedge our commodity risk. With respect to any potential financings, general increases in interest rates over time may cause the interest expense associated with our borrowings to increase, and the value of our debt investments to decline. We may seek to stabilize our financing costs as well as any potential decline in our assets by entering into derivatives, swaps or other financial products in an attempt to hedge our interest rate risk. In the event we pursue any assets outside of the United States we may have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar. We may in the future, enter into derivatives or other financial instruments in an attempt to hedge any such foreign currency exchange risk. It is difficult to predict the impact hedging activities may have on our results of operations.

Contractual Obligations

We have entered into the Management Agreement with the Manager and the Sub-Management Agreement with the Manager and the Sub-Manager pursuant to which the Manager and the Sub-Manager are entitled to receive a base management fee and reimbursement of certain expenses. Certain incentive fees based on our performance are payable to the Manager and the Sub-Manager after our performance thresholds are met. Each of the Manager and the Sub-Manager is entitled to 50% of the base management fee and incentive fees, subject to any reduction or deferral of any such fees pursuant to the terms of the Expense Support and Conditional Reimbursement Agreement.

If, on the last business day of the calendar year, there are Excess Operating Funds, we will use such Excess Operating Funds to pay the Manager and the Sub-Manager all or a portion of the outstanding unreimbursed Expense Support amounts for each share class, as applicable, subject to certain conditions as described further in the Expense Support and Conditional Reimbursement Agreement. Our obligation to make Conditional Reimbursements will automatically terminate and be of no further effect three years following the date which the Expense Support amount was provided and to which such Conditional Reimbursement relates,

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as described further in the Expense Support and Conditional Reimbursement Agreement. As of June 30, 2019, the amount of Expense Support related to the period from February 7, 2018 (commencement of operations) to December 31, 2018 collected from the Manager and Sub-Manager was $0.4 million. Our obligation to reimburse the Manager and Sub-Manager for Expense Support collected for the period from February 7, 2018 (commencement of operations) to December 31, 2018 will expire on December 31, 2021. As of June 30, 2019, management believes that reimbursement payments by the Company to the Manager and Sub-Manager are not probable under the terms of the Expense Support and Conditional Reimbursement Agreement.

We have also entered into the Administrative Services Agreement with the Administrator and the Sub-Administration Agreement with the Administrator and the Sub-Administrator pursuant to which the Administrator and the Sub-Administrator will provide us with administrative services and are entitled to reimbursement of expenses for such services. For a discussion of the compensation we pay in connection with the management of our business, see Note 5. “Related Party Transactions” in Item 1. “Financial Statements.”

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices.

Inflation

We do not anticipate that inflation will have a significant effect on our results of operations. However, in the event of a significant increase in inflation, interest rates could rise and our assets may be materially adversely affected.

Seasonality

We do not anticipate that seasonality will have a significant effect on our results of operations.

Critical Accounting Policies and Use of Estimates

See our Form 10-K for the year ended December 31, 2018 and Note 2. “Significant Accounting Policies” of Part I of this Quarterly Report for a summary of our critical accounting policies.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We anticipate that our primary market risks will be related to the credit quality of our counterparties, market interest rates and changes in exchange rates. We will seek to manage these risks while, at the same time, seeking to provide an opportunity to shareholders to realize attractive returns through ownership of our shares.

Credit Risk

We expect to encounter credit risk relating to (i) the businesses and other assets we acquire and (ii) our ability to access the debt markets on favorable terms. We will seek to mitigate this risk by deploying a comprehensive review and asset selection process, including scenario analysis, and careful ongoing monitoring of our acquired businesses and other assets as well as mitigation of negative credit effects through back up planning. Nevertheless, unanticipated credit losses could occur, which could adversely impact our operating results.

Changes in Market Interest Rates

We are subject to financial market risks, including changes in interest rates. Our debt investments are currently structured with fixed interest rates. Returns on investments that carry fixed rates are not subject to fluctuations in payments we receive from our borrowers, and will not adjust should rates move up or down. However, the fair value of our debt investments may be negatively impacted by rising interest rates. We may also invest in floating interest rate debt investments in the future.

We had not borrowed any money as of June 30, 2019. However, to the extent that we borrow money to make investments, our net investment income will be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of funds may increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

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Exchange Rate Sensitivity

At June 30, 2019, we were not exposed to any foreign currency exchange rate risks that could have a material effect on our financial condition or results of operations. Although we do not have any foreign operations, some of the portfolio companies we invest in conduct business in foreign jurisdictions and therefore our investments have an indirect exposure to risks associated with changes in foreign exchange rates.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures are effective at the reasonable assurance level as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed by us in the reports we filed under the Securities Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the relevant SEC rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

We have not evaluated any change in our internal control over financial reporting that occurred during our last fiscal quarter due to a transition period established by the rules of the SEC for newly public companies. We expect to issue management’s first assessment regarding internal control over financial reporting for the year ending December 31, 2019 and to evaluate any changes in our internal controls over financial reporting in each quarterly and annual report thereafter.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we and individuals employed by us may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our businesses. In addition, our business and the businesses of the Manager, the Sub-Manager and the Managing Dealer are subject to extensive regulation, which may result in regulatory proceedings. Legal proceedings, lawsuits, claims and regulatory proceedings are subject to many uncertainties and their ultimate outcomes are not predictable with assurance.

As of June 30, 2019, we were not involved in any legal proceedings. Additionally, there is no action, suit or proceeding pending before any court, or, to our knowledge, threatened by any regulatory agency or other third party, against the Manager, the Sub-Manager or the Managing Dealer that would have a material adverse effect on us. 

Item 1A. Risk Factors

We have disclosed under the heading “Risk Factors” in our Form 10-K, risk factors which materially affect our business, financial condition or results of operations. The following risk factor is added to the risk factors previously disclosed. You should be aware that these risk factors and other information may not describe every risk facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

We, and our businesses, are subject to a variety of federal, state and international laws and other obligations regarding data protection.

We, and our businesses, are subject to a variety of federal, state and international laws and other obligations regarding data protection. Several jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional restrictions. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing domestic and international requirements may cause the Company or its businesses to incur substantial costs or require the Company or one of its businesses to change its business practices. Any failure by the Company or by one of its businesses to comply with its own privacy policy, applicable association rules, or with other federal, state or international privacy-related or data protection laws and regulations could result in proceedings against the Company or one of its businesses by governmental entities or others. Additionally, given the data collection and distribution focus of Roundtables’ business, any failure could have a material impact on the use of its services by its customers.

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

Unregistered Sales of Equity Securities

In June 2019, we sold 112,850 Class FA shares under the Class FA Private Offering for net proceeds of approximately $3.1 million. We are conducting the Class FA Private Offering in reliance on the exemption from registration provided under Rule 506 (c) under Regulation D. There is no selling commission or placement agent fee for the sale of Class FA shares under the Class FA Private Offering. See Note 7. “Capital Transactions” in Item 1. “Financial Statements” for additional information related to the Class FA Private Offering. Class FA shares are not offered for sale in the Public Offering.

Use of Proceeds

On March 7, 2018, the Registration Statement covering the Public Offering, of up to $1,100,000,000 Shares, was declared effective under the Securities Act. The Public Offering commenced on March 7, 2018, and is currently expected to terminate on or before Mach 7, 2020, unless extended by our board of directors.

Through CNL Securities Corp., the Managing Dealer for the Public Offering, we are offering to the public on a best efforts basis up to $1,000,000,000 Shares consisting of Class A shares, Class T shares, Class D shares and Class I shares.

We are also offering up to $100,000,000 Shares to be issued pursuant to our distribution reinvestment plan.

The Shares being offered can be reallocated among the different classes and between the primary Public Offering and the distribution reinvestment plan. The following table presents the net offering proceeds received from the Public Offering through June 30, 2019:

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	Total			Payments to Affiliates (1)		Payments to Others
Aggregate price of offering amount registered (2)	$	1,000,000,000
Shares sold (3)	1,324,836
Aggregate amount sold (3)	$	36,002,210
Payment of underwriting compensation (4)	(1,103,635		)	(1,103,635	)	—
Net offering proceeds to the issuer	34,898,575
Distributions to shareholders (5)	(317,514		)	(13	)	(317,501	)
Remaining proceeds from the Offering	$	34,581,061

FOOTNOTES:

⁽¹⁾  Represents direct or indirect payments to our directors or officers, the Manager, the Sub-Manager and their respective affiliates; to persons owning 10% or more of any class of our shares; and to our affiliates.

⁽²⁾  We are also offering up to $100,000,000 of shares to be issued pursuant to our distribution reinvestment plan. The shares being offered can be reallocated among the different classes and between the primary Public Offering and the distribution reinvestment plan.

⁽³⁾  Excludes approximately $0.4 million (14,134 shares) issued pursuant to our distribution reinvestment plan, approximately $0.2 million (8,000 shares) of unregistered shares issued to the Manager, and the Sub-Manager in a private transaction exempt from the registration requirements pursuant to section 4(a)(2) of the Securities Act, approximately $81.5 million (3,258,260 million shares) of unregistered Class FA shares sold in the 2018 Private Offering and approximately $3.1 million (112,850 shares) of unregistered Class FA shares sold in the Class FA Private Offering.

⁽⁴⁾  Underwriting compensation includes selling commissions and dealer manager fees paid to the Managing Dealer; all or a portion of which may be reallowed to participating broker-dealers.

⁽⁵⁾  Until such time as we have sufficient operating cash flows from our assets, we will pay cash distributions, debt service and/or operating expenses from net proceeds of our Public Offering.  The amounts presented above represent the net proceeds used for such purposes.

Repurchase of Shares and Issuer Purchases of Equity Securities

On March 29, 2019, our board of directors approved and adopted a Share Repurchase Program (the “Share Repurchase Program”). The total amount of aggregate repurchases of Class A, Class FA, Class T, Class D and Class I shares will be limited to up to 2.5% of the aggregate net asset value per calendar quarter (based on the aggregate net asset value as of the last date of the month immediately prior to the repurchase date) and up to 10% of the aggregate net asset value per year (based on the average aggregate net asset value as of the end of each of the Company’s trailing four quarters). Unless our board of directors determines otherwise, we will limit the number of shares to be repurchased during any calendar quarter to the number of shares we can repurchase with the proceeds received from the sale of shares under our distribution reinvestment plan in the previous quarter. Notwithstanding the foregoing, at the sole discretion of our board of directors, we may also use other sources, including, but not limited to, offering proceeds and borrowings to repurchase shares. Our board of directors, in its sole discretion, may amend, suspend or terminate the Share Repurchase Program or waive any of its specific conditions to the extent it is in our best interest, including to ensure our ability to qualify as a partnership for U.S. federal income tax purposes

During the quarter ended June 30, 2018, we repurchased the following shares:

Period	Total Number of Shares Repurchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publically Announced Plan	Maximum Value of Shares That May Yet Be Purchased Under the Plan (1)
April 1, 2019 to April 30, 2019	—	$	—	—	$	121,011
May 1, 2019 to May 31, 2019	—	—		—	121,011
June 1, 2019 to June 30, 2019	11,389	27.05		11,389	—

FOOTNOTE:

⁽¹⁾ Repurchases are limited under the Share Repurchase Program as described above. During the quarter ended June 30, 2019, we received requests for the repurchase of approximately $0.3 million of our common shares, which exceeded proceeds received from our distribution reinvestment plan in the previous quarter by approximately $0.2 million. Our board of directors approved the use of other sources to satisfy repurchase requests received in excess of proceeds received from the distribution reinvestment plan.

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Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The exhibits required by this item are set forth in the Exhibit Index attached hereto and are filed or incorporated as part of this report.

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EXHIBIT INDEX

The following exhibits are filed or incorporated as part of this report.

1.1	Amended and Restated Managing Dealer Agreement (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2019).
1.2	Placement Agent Agreement (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2019).
1.3	Placement Agent Agreement (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 16, 2019).
3.1	Certificate of Formation of CNL Strategic Capital, LLC dated August  8, 2016 (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-222986) filed with the SEC on February 12, 2018).
3.2*	Fourth Amended and Restated Limited Liability Company Operating Agreement of CNL Strategic Capital, LLC.
4.1	Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 (File No. 333-222986) filed with the SEC on February 12, 2018).
4.2	Form of Subscription Agreement (incorporated by reference to Appendix B to the Post-Effective Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-222986) filed with the SEC on April 5, 2019).
4.3	Share Repurchase Program (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed with the SEC on April 1, 2019).
10.1	First Amendment to Escrow Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on April 18, 2019).
10.2	Second Amendment to Escrow Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on July 16, 2019).
10.3*	Stock Contribution and Purchase Agreement dated June 26, 2019 by and between Michael Auriemma and Roundtable Acquisition, LLC.
10.4	Loan Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 27, 2019).
10.5	Promissory Note (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 27, 2019).
10.6	Assignment and Pledge of Deposit Account (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the SEC on June 27, 2019).
10.7	Guaranty (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the SEC on June 27, 2019).
31.1*	Certification of Chief Executive Officer of CNL Strategic Capital, LLC, Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer of CNL Strategic Capital, LLC, Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer of CNL Strategic Capital, LLC, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following materials from CNL Strategic Capital, LLC Quarterly Report on Form 10-Q for the quarter and six months ended June 30, 2019 formatted in XBRL (Extensible Business Reporting Language); (i) Condensed Consolidated Statements of Assets and Liabilities, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Changes in Net Assets, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Schedules of Investments, and (vi) Notes to the Condensed Consolidated Financial Statements.

* Filed herewith

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them

48

for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 8th day of August, 2019.

CNL STRATEGIC CAPITAL, LLC
By:	/s/ Chirag J. Bhavsar
	CHIRAG J. BHAVSAR
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Tammy J. Tipton
	TAMMY J. TIPTON
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

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EX-3.2

EXHIBIT 3.2

CNL STRATEGIC CAPITAL, LLCa Delaware Limited Liability Company
	FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT

TABLE OF CONTENTS

		Page
ARTICLE I ORGANIZATION		1
ARTICLE II NAME AND CERTAIN DEFINITIONS		1
Section 2.1	Name	1
Section 2.2	Certain Definitions	1
ARTICLE III POWERS AND PURPOSE		16
Section 3.1	Purpose	16
Section 3.2	No State Law Partnership	16
Section 3.3	Authority	16
ARTICLE IV RESIDENT AGENT AND PRINCIPAL OFFICE		18
ARTICLE V BOARD OF DIRECTORS		18
Section 5.1	Powers	18
Section 5.2	Number and Classification	18
Section 5.3	Committees	21
Section 5.4	Fiduciary Obligations	21
Section 5.5	Resignation or Removal	22
Section 5.6	Approval by Independent Directors	22
Section 5.7	Certain Determinations by Board of Directors	22
Section 5.8	Place of Meetings and Meetings by Telephone	23
Section 5.9	Regular Meetings	23
Section 5.10	Special Meetings	23
Section 5.11	Quorum	23
Section 5.12	Waiver of Notice	24
Section 5.13	Adjournment	24
Section 5.14	Action Without a Meeting	24
Section 5.15	Compensation	24
ARTICLE VI OFFICERS		24
Section 6.1	Officers	24
Section 6.2	Election of Officers	25
Section 6.3	Subordinate Officers	25
Section 6.4	Removal and Resignation of Officers	25
Section 6.5	Vacancies in Offices	25
ARTICLE VII CAPITAL CONTRIBUTIONS; COMMON SHARES; PREFERRED SHARES		25
Section 7.1	Shares	25

- i -

Section 7.2	Authorized Common Shares and Preferred Shares	26
Section 7.3	New Class or Reclassified Shares	27
Section 7.4	Class Rights and Conversions	27
Section 7.5	Capital Contribution by Initial Members	28
Section 7.6	Additional Capital Contributions	28
Section 7.7	Capital Contributions by New Members	28
Section 7.8	Public Offerings	30
Section 7.9	Minimum Capitalization	30
Section 7.10	Escrow Account	30
Section 7.11	Admission of Members	31
Section 7.12	[Reserved]	32
Section 7.13	Suitability Standards	32
Section 7.14	Repurchase of Shares	34
Section 7.15	Distribution Reinvestment Plans	34
Section 7.16	Assessments	35
ARTICLE VIII CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS		35
Section 8.1	Company Capital	35
Section 8.2	Establishment and Determination of Capital Accounts	35
Section 8.3	Computation of Amounts	35
Section 8.4	Negative Capital Accounts	36
Section 8.5	Adjustments to Book Value	36
Section 8.6	Compliance With Treasury Regulations Section 1.704‑1(b)	36
Section 8.7	Transfer of Capital Accounts	37
ARTICLE IX DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES		37
Section 9.1	Generally	37
Section 9.2	Distributions	37
Section 9.3	Allocation of Profit and Loss	38
Section 9.4	Special Allocations	38
Section 9.5	Amounts Withheld	40
Section 9.6	Tax Allocations: Code Section 704(c)	40
Section 9.7	Preparation of Tax Returns	41
Section 9.8	Tax Elections	42
Section 9.9	Tax Matters	42
Section 9.10	Tax Classification	43
Section 9.11	Withholding	43

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ARTICLE X RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES		44
Section 10.1	Withdrawal of a Member	44
Section 10.2	Assignment	44
Section 10.3	Substitution	46
Section 10.4	Status of an Assigning Member	46
Section 10.5	Further Restrictions on Transfers	46
Section 10.6	Elimination or Modification of Restrictions	47
Section 10.7	Records	47
Section 10.8	Monthly Allocation Convention	47
ARTICLE XI MEMBERS, MEETINGS AND VOTING RIGHTS OF THE MEMBERS		47
Section 11.1	Annual Meetings of Members	47
Section 11.2	Special Meetings of Members	47
Section 11.3	Place of Meeting	49
Section 11.4	Notice of Meeting	50
Section 11.5	Record Date	50
Section 11.6	Organization and Conduct	50
Section 11.7	Quorum	50
Section 11.8	Proxies	51
Section 11.9	Voting of Shares by Certain Holders	51
Section 11.10	Notice of Member Business and Nominations	51
Section 11.11	Procedure for Election of Directors; Voting	54
Section 11.12	Inspectors of Elections	54
Section 11.13	Waiver of Notice	54
Section 11.14	Remote Communication	55
Section 11.15	Member Action Without a Meeting	55
Section 11.16	Return on Capital Contribution	55
Section 11.17	Member Compensation	55
Section 11.18	Limited Liability of Members	55
Section 11.19	Representation of Company	55
Section 11.20	Preemptive Rights	56
Section 11.21	Tender Offers	56
Section 11.22	Voting Rights of Members and Limitation on Powers of the Director	56
Section 11.23	Member Vote Required in Connection With Certain Business Combinations Or Transactions	57
ARTICLE XII BOOKS AND RECORDS, REPORTS AND RETURNS		58
Section 12.1	Right of Inspection	58

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Section 12.2	Access to Membership List	58
Section 12.3	Tax Information	59
Section 12.4	Annual Report	59
Section 12.5	Quarterly Reports	59
Section 12.6	Filings	60
Section 12.7	Method of Accounting	60
ARTICLE XIII MANAGER; COMPANY ADMINISTRATORS		60
Section 13.1	Appointment of Manager	60
Section 13.2	Supervision of Manager Compensation and the Manager	61
Section 13.3	Fiduciary Obligations	61
Section 13.4	Termination	61
Section 13.5	Organization and Offering Expenses Limitation	62
Section 13.6	Reimbursement for Operating Expenses	62
Section 13.7	Section 707 Compliance	62
Section 13.8	Exclusive Right to Sell Company Assets	62
Section 13.9	Applicability of this Article	62
ARTICLE XIV INVESTMENT POLICIES AND LIMITATIONS		62
Section 14.1	Review of Policies	62
Section 14.2	Certain Permitted Investments	63
Section 14.3	Reinvestment of Cash Available for Distribution and of Proceeds	63
Section 14.4	Applicability of this Article	63
ARTICLE XV CONFLICTS OF INTEREST		63
Section 15.1	Investments with Affiliates	63
Section 15.2	Voting of Shares Owned by Affiliates	63
Section 15.3	Purchase of Assets from Affiliates	63
Section 15.4	Sale of Assets to Affiliates	64
Section 15.5	Loans to Affiliates	64
Section 15.6	Other Transactions with Affiliates	64
Section 15.7	Rebates, Kickbacks and Reciprocal Arrangements	64
Section 15.8	Commingling	64
Section 15.9	Lending Practices	64
Section 15.10	No Permanent Financing	65
Section 15.11	No Exchange of Interests for Investments	65
Section 15.12	Applicability of this Article	65
ARTICLE XVI LIABILITY LIMITATION AND INDEMNIFICATION		65

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Section 16.1	Limitation of Member Liability	65
Section 16.2	Limitation of Liability	65
Section 16.3	Indemnification	67
Section 16.4	Express Exculpatory Clauses in Instruments	70
ARTICLE XVII AMENDMENTS		70
Section 17.1	Amendments by the Board of Directors	70
Section 17.2	Amendments with the Consent of the Majority of the Members	71
ARTICLE XVIII ROLL-UP TRANSACTIONS		71
Section 18.2	Applicability of this Article	72
ARTICLE XIX DURATION AND DISSOLUTION OF THE COMPANY		72
Section 19.1	Duration	72
Section 19.2	Authority of Directors	72
Section 19.3	Dissolution	73
ARTICLE XX MISCELLANEOUS		74
Section 20.1	Covenant to Sign Documents	74
Section 20.2	Notices	74
Section 20.3	Entire Agreement	75
Section 20.4	Waiver	75
Section 20.5	Severability	75
Section 20.6	Application of Delaware Law	75
Section 20.7	Captions	75
Section 20.8	Number and Gender	75
Section 20.9	Counterparts	75
Section 20.10	Waiver of Action for Partition	75
Section 20.11	Assignability	75
Section 20.12	No Third Party Beneficiaries	75
SCHEDULE A		A‑1

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THIS FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this “Agreement”) of CNL STRATEGIC CAPITAL, LLC (the “Company”) is made and entered into as of August 7, 2019 (the “Effective Date”) by CNL STRATEGIC CAPITAL MANAGEMENT, LLC, a Delaware limited liability company (“CSCM”), and Levine Leichtman Strategic Capital, LLC (“LLSC”), together (the “Members”), and any other Persons who are or hereafter become Members in the Company (as defined below) or parties hereto as provided herein. Capitalized terms used in this Agreement without definition shall have the respective meanings specified in Section 2.2 and, unless otherwise specified, article and section references used herein refer to Articles and Sections of this Agreement.

WHEREAS, the Company was formed on August 9, 2016, pursuant to, and in accordance with, the Delaware Limited Liability Company Act (6 Del. C. § 18‑101 et seq.), as amended from time to time (the “Act”) by the filing of a Certificate of Formation of the Company with the Secretary of State of the State of Delaware;

WHEREAS, CSCM (the “Initial Member”) entered into the limited liability company operating agreement of the Company, dated October 14, 2016 (the “Original Agreement”); and

WHEREAS, CSCM and LLSC entered into the amended and restated limited liability company operating agreement of the Company, dated June 30, 2017 (the “A&R LLC Agreement”);

WHEREAS, CSCM and LLSC entered into the second amended and restated limited liability company operating agreement of the Company, dated December 18, 2017 (the “Second A&R LLC Agreement”); and

WHEREAS, CSCM and LLSC entered into the third amended and restated limited liability company agreement of the Company, dated February 28, 2018 ( the “Third A&R LLC Agreement”); and

WHEREAS, the Members wish to amend and restate the Third A&R LLC Agreement in its entirety by entering into this Fourth Amended and Restated Limited Liability Company Agreement (the “Fourth A&R LLC Agreement”).

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto, intending to be legally bound hereby, agree as follows:

ARTICLE I

ORGANIZATION

The Company has been organized as a Delaware limited liability company by filing its Certificate with the Secretary of State of the State of Delaware on August 9, 2016, pursuant to and in accordance with the Act.

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ARTICLE II

NAME AND CERTAIN DEFINITIONS

Section 2.1Name. The name of the Company is “CNL Strategic Capital, LLC”. The Board of Directors of the Company (the “Board of Directors”) may determine that the Company may use any other designation or name for the Company.

Section 2.2Certain Definitions. As used in this Agreement, the terms set forth below shall have the following respective meanings:

“Account” means the account set up by the Manager for each Member to record the issuance of shares of each such Member.

“Accounting Period” shall mean the following periods: the initial accounting period which shall commence upon the commencement of operations of the Company. Each subsequent Accounting Period shall commence immediately after the close of the preceding Accounting Period. Each Accounting Period hereunder shall close on the earliest of (i) the last Business Day of a month, (ii) the effective date of dissolution of the Company, and (iii) such other day or days in addition thereto or in substitution therefore as may from time to time be determined by the Board of Directors in its discretion either in any particular case or generally.

“Acquisition Expenses” means expenses, including but not limited to legal fees and expenses, travel and communication expenses, costs of appraisals, non‑refundable option payments on assets not acquired, accounting fees and expenses, and miscellaneous expenses relating to the purchase or acquisition of assets, whether or not acquired.

“Acquisition Fee” means the total of all fees and commissions paid by any party to any party other than the Company, in connection with the initial purchase or acquisition of assets by the Company. Included in the computation of such fees or commissions shall be any commission, selection fee, supervision fee, financing fee, non‑recurring management fee or any fee of a similar nature, however designated.

“Act” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18‑101 et. seq., as the same may be amended from time to time. All references herein to sections of the Act shall include any corresponding provisions of succeeding law.

“Adjusted Capital Account” means, with respect to any Member for any taxable year or other period, the balance, if any, in such Member's Capital Account as of the end of such year or other period, after giving effect to the following adjustments:

(a)    Credit to such Capital Account any amounts that such Member is obligated to restore pursuant to Treasury Regulations Section 1.704-1(b)(2)(ii)(c) or is deemed obligated to restore as described in the penultimate sentence of Treasury Regulations Section 1.704‑2(g)(1) and Treasury Regulations Section 1.704‑2(i)(5); and

(b)    Debit to such Capital Account the items described in Treasury Regulations Sections 1.704‑1(b)(2)(ii)(d)(4), (5), and (6).

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The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulations Section 1.704‑1(b)(2)(ii)(d) to the extent relevant thereto and shall be interpreted consistently therewith.

“Adjusted Capital Account Deficit” means, with respect to any Member for any taxable year or other period, the deficit Adjusted Capital Account balance, if any, of such Member as of the end of such year or other period.

“Administrator” means the official or agency administering the securities laws of a state, province, or commonwealth.

An “Affiliate” means, with respect to any specified Person, any of the following: (A) any Person directly or indirectly owning, controlling, or holding, with power to vote, 10% or more of the outstanding voting securities of such specified Person, (B) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with the power to vote, by such specified Person, (C) any Person directly or indirectly controlling, controlled by, or under common control with such specified Person, (D) any executive officer, director, trustee or general partner of such specified Person, or (E) any legal entity for which such specified Person acts as an executive officer, director, trustee or general partner.

“Affiliated Person” means the Sponsor, a Manager, a Director or any Affiliate of the foregoing.

“Agreement” is defined in the preamble.

“ASC Topic 946” is defined in Section 12.7.

“Assessment” means additional amounts of capital which may be mandatorily required of, or paid voluntarily by, a Member beyond his or her subscription commitment excluding deferred payments.

“Assignee” means any Person to whom any Shares have been Assigned, in whole or in part, in a manner permitted by Section 10.2 of this Agreement.

“Assignment” means, with respect to any Shares, the offer, sale, assignment, transfer, gift or other disposition of such Share, whether voluntarily or by operation of law, except that in the case of a bona fide pledge or other hypothecation, no Assignment shall be deemed to have occurred unless and until the secured party has exercised his right of foreclosure with respect thereto; and the terms “Assign” and “Assigning” have a correlative meaning.

“Assignor” means any Person holding Shares for the purpose of transferring some or all of those Shares to another Person or Persons pursuant to an assignment agreement.

“Associate” has the meaning ascribed to such term in Rule 12b‑2 of the rules promulgated under the Exchange Act.

“Benefit Plan Investor” means a Member who is subject to ERISA or to the prohibited transaction provisions of Section 4975 of the Code.

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“Board of Directors” is defined in Section 2.1.

“Book Value” means, with respect to any property contributed by a Member to the Company, the gross fair market value as reasonably determined by the Board of Directors, and with respect to any other Company property, the Company's adjusted basis for federal income tax purposes, in each case as adjusted from time to time to reflect the adjustments required or permitted by Treasury Regulations Section 1.704‑l(b)(2)(iv)(d)-(g).

“Business Combination” means:

(a)    any merger or consolidation of the Company or any Subsidiary thereof with (A) an Interested Member, or (B) any other Person (whether or not itself an Interested Member) that is, or after such merger or consolidation would be, an Affiliate or Associate of an Interested Member; or

(b)    any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with, or proposed by or on behalf of, an Interested Member or an Affiliate or Associate of an Interested Member of any property or assets of the Company or any Subsidiary thereof having a net asset value equal to 10% or more of the net asset value of the Company's outstanding Shares as of the date of the consummation of the transaction giving rise to the Business Combination; or

(c)    the issuance or transfer by the Company or any Subsidiary thereof (in one transaction or a series of transactions) of any securities of the Company or any Subsidiary thereof to, or proposed by or on behalf of, an Interested Member or an Affiliate or Associate of an Interested Member in exchange for cash, securities or other property (or a combination thereof) having a net asset value equal to 10% or more of the net asset value of the Company's outstanding Shares as of the date of the consummation of the transaction giving rise to the Business Combination; or

(d)    any spin‑off or split‑up of any kind of the Company or any Subsidiary thereof, proposed by or on behalf of an Interested Member or any of its Affiliates or Associates; or

(e)    any reclassification of the Shares or securities of a Subsidiary of the Company (including any reverse split of Shares or such securities) or recapitalization of the Company or such Subsidiary, or any merger or consolidation of the Company or such Subsidiary with any other Subsidiary thereof, or any other transaction (whether or not with or into or otherwise involving an Interested Member), that has the effect, directly or indirectly, of increasing the proportionate share of (A) outstanding Shares or such securities or securities of such Subsidiary which are beneficially owned by an Interested Member or any of its Affiliates or Associates or (B) any securities of the Company or such Subsidiary that are convertible into or exchangeable for Shares or such securities of such Subsidiary, that are directly or indirectly owned by an Interested Member or any of its Affiliates or Associates; or

(f)    any agreement, contract or other arrangement providing for any one or more of the actions specified in clauses (a) through (e) above;

- 4 -

provided, however, that a transaction is not a Business Combination if the transaction resulting in the holder of Shares becoming an Interested Member is approved by the Board of Directors prior to the time such Person became an Interested Member.

“Business Day” shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City are authorized or required by law, regulation or executive order to close.

“Capital Account” is defined in Section 8.2.

“Capital Contributions” means the total investment including the initial Book Value of any property contributed by a Member, including the original investment and amounts reinvested pursuant to the Reinvestment Plan, if any, by a Member or by all Members, as the case may be. Unless otherwise specified, Capital Contributions shall be deemed to be included in principal amounts to be received on account of deferred payments.

“Cash Available for Distribution” means Cash Flow plus cash funds available for distribution from the Company reserves less amounts set aside for restoration or creation of reserves.

“Cash Flow” means Company cash funds provided from operations, without deduction for depreciation, but after deducting cash funds used to pay all other expenses, debt payments, capital improvements and replacements. Cash withdrawn from reserves shall not be included in Cash Flow.

“Certificate” means the Certificate of Formation of the Company and any and all amendments thereto and restatements thereof filed on behalf of the Company with the office of the Secretary of State of the State of Delaware pursuant to the Act.

“CFG XVI, Inc.” means CFG XVI, Inc. a Florida corporation which is the sole owner of CSCM.

“Class” means any of Class A Shares, Class I Shares, Class T Shares, Class D Shares, Class FA Shares or any other class of Shares that the Board of Directors may authorize from time to time pursuant to this Agreement.

“Class A Net Asset Value Per Share” means the net asset value of the Company allocable to Class A Shares, determined as described in the Company's Offering Memorandum or as may be modified in any subsequent Prospectus of the Company, divided by the number of outstanding Class A Shares.

“Class A Shares” is defined in Section 7.1.

“Class D Conversion Rate” is defined in Section 7.4(c).

“Class D Net Asset Value Per Share” means the net asset value of the Company allocable to the Class D Shares, determined as described in the Company's Prospectus, divided by the number of outstanding Class D Shares.

“Class D Shares” is defined in Section 7.1

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“Class FA Conversion Rate” is defined in Section 7.4(d).

“Class FA Net Asset Value Per Share” means the net asset value of the Company allocable to the Class FA Shares, determined as described in the Company's Offering Memorandum or as may be modified in any subsequent Prospectus of the Company, divided by the number of outstanding Class FA Shares.

“Class FA Shares” is defined in Section 7.1.

“Class I Conversion Rate” is defined in Section 7.4(e).

“Class I Net Asset Value Per Share” means the net asset value of the Company allocable to the Class I Shares (including any reduction for Distribution Fees as described in the Company’s Prospectus), determined as described in the Company's Prospectus, divided by the number of outstanding Class I Shares.

“Class I Shares” is defined in Section 7.1.

“Class T Conversion Rate” is defined in Section 7.4(b).

“Class T Net Asset Value Per Share” means the net asset value of the Company allocable to the Class T Shares (including any reduction for Distribution Fees as described in the Company’s Prospectus), determined as described in the Company's Prospectus, divided by the number of outstanding Class T Shares.

“Class T Shares” is defined in Section 7.1.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor statute.

“Commencement of the Initial Public Offering” means the date that the Commission declares effective the registration statement filed under the Securities Act for the Initial Public Offering.

“Commencement of the Private Placement” means the date the Company’s Offering Memorandum is first distributed in connection with the Private Placement.

“Commission” means the Securities and Exchange Commission.

“Common Shares” means any Shares that are not Preferred Shares.

“Company” is defined in the preamble.

“Company Administrator” means the Person or Persons, if any, appointed, employed or contracted by the Company as administrator pursuant to an administrative services agreement, including any Person to whom the Company Administrator subcontracts substantially all of, or material aspects of, such functions pursuant to a sub‑administrative services or similar agreement.

- 6 -

“Company Minimum Gain” means “partnership minimum gain” as defined in Treasury Regulations Section 1.704‑2(b)(2) and as computed in accordance with Treasury Regulations Section 1.704‑2(d).

“Company NAV” means the net fair market value of all of the Company's assets, including investments in bank accounts, money market funds or other current assets, as determined by the Board of Directors from time to time pursuant to this Agreement.

“Consent” means either (a) consent given by vote at a meeting called and held in accordance with the provisions of Article XII of this Agreement or (b) the written consent without a meeting, as the case may be, of any Person to do the act or thing for which the consent is solicited, or the act of granting such consent, as the context may require.

“Continuing Director” means (i) any Director of the Company who (A) is neither the Interested Member involved in the Business Combination as to which a determination of Continuing Directors is provided hereunder, nor an Affiliate, Associate, employee, agent or nominee of such Interested Member, or a relative of any of the foregoing, and (B) was a member of the Board of Directors prior to the time that such Interested Member became an Interested Member, or (ii) any successor of a Continuing Director described in clause (i) above who is recommended or elected to succeed a Continuing Director by the affirmative vote of a majority of Continuing Directors then on the Board of Directors.

“Controlling Person” means all Persons, whatever their titles, who perform functions for CFG XVI, Inc. similar to those of the chairman or a member of the board of directors of such specified entity, executive officers of such specified entity, or any Person who holds more than 10% of CFG XVI, Inc.'s equity securities or who has the power to control such specified entity, whether through the ownership of voting securities, by contract or otherwise.

“CSCM” is defined in the preamble.

“CSCM Nominee” is defined in Section 5.3.

“CSCM non - Independent Director” is defined in Section 5.2.

“Effective Date” is defined in the preamble.

“DGCL” means Delaware General Corporation Law.

“Director” is any duly appointed member of the Board of Directors.

“Dissolution Event” is defined in Section 19.3(a).

“Distribution Fee” is defined in Section 7.1(b)

“Distributions” means any distributions of money or other property by the Company to owners of Shares, including distributions of Cash Available for Distribution, distributions of cash from capital events and distributions that may constitute a return of capital for federal income tax purposes.

- 7 -

“Economic Interest” means a Person's right to share in the income, gains, losses, deductions, credits, or similar items of the Company, and to receive Distributions from the Company, but excluding any other rights of a Member, including the right to vote or to participate in management, or, except as may be provided in the Act, any right to information concerning the business and affairs of the Company.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor statute thereto.

“Expense Support Agreement” means the expense support agreement entered into between the Company and the Managers as of the date hereof.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Front End Fees” means fees and expenses paid by any party for any services rendered to organize the Company and to acquire assets for the Company, including Organization and Offering Expenses (in connection with either the Private Placement and/or an Initial Public Offering), Acquisition Fees, Acquisition Expenses, and any other similar fees, however designated by the Sponsor.

“Gross Proceeds” means the aggregate purchase price of all Shares sold for the account of the Company, without deduction for Selling Commissions, any discount (including any special sale or volume discounts), any marketing support and due diligence expense reimbursement, fees paid to the Placement Agreement or Managing Dealer, as applicable, or other Organization and Offering Expenses.

“Incentive Fee” means the incentive fee paid to the Managers pursuant to the terms of the Management Agreements.

“Indemnitee” is defined in Section 16.2(f).

“Independent Director” means a Director who is not, and within the last two (2) years has not been, directly or indirectly associated with the Managers or the Sponsor by virtue of (i) ownership of an interest in the Managers or the Sponsor or any of their Affiliates, (ii) employment by the Managers or the Sponsor or their Affiliates, (iii) service as an officer, director or manager of the Sponsor, the Managers or any of their Affiliates, other than as a director for the Company and up to two (2) other funds organized by the Sponsor or advised by the Managers, (iv) performance of services, other than as a director, for the Company, or (v) maintenance of a material business or professional relationship with the Managers, the Sponsor or any of their Affiliates. An indirect association with the Managers or Sponsor shall include circumstances in which a Director's spouse, parents, children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with the Managers or Sponsor or any of their Affiliates or the Company. A business or professional relationship is considered “material” if the prospective Independent Director received more than five percent (5%) of his annual gross income in the last two (2) years from the Sponsor, the Managers or any Affiliate of the Sponsor or the Managers, or

- 8 -

if more than five percent (5%) of his Net Worth, on a fair market value basis, has come from the Sponsor, the Managers or any Affiliate of the Sponsor or the Managers.

“Independent Expert” means a Person with no material current or prior business or personal relationship with the Sponsor who is engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by the Company, and who is qualified to perform such work.

“Initial Member” is defined in the preamble.

“Initial Closing of the Private Placement” means the initial closing of the Private Placement once the Minimum Offering for the Private Placement has been achieved.

“Initial Public Offering” means the first Offering pursuant to an effective registration statement on Form S-1 filed under the Securities Act (that is a continuous public offering) of Shares which are not listed on a national securities exchange or quoted through a national quotation system through the use of a Prospectus of the Company that is part of such registration statement.

“Interested Member” means any Person (other than the Company or any Subsidiary of the Company, any employee benefit plan maintained by the Company or any Subsidiary thereof or any trustee or fiduciary with respect to any such plan when acting in such capacity) that:

(i)    is, or was at any time within the three-year period immediately prior to the date in question, the Owner of 15% or more of the then outstanding Shares and who did not become the Owner of such amount of Shares pursuant to a transaction that was approved by the affirmative vote of a majority of the Board of Directors; or

(ii)    is an assignee of, or has otherwise succeeded to, any Shares of which an Interested Member was the Owner at any time within the three-year period immediately prior to the date in question, if such assignment or succession occurred in the course of a transaction, or series of transactions, not involving a public offering within the meaning of the Securities Act.

“Investment in Company Assets” means the amount of Capital Contributions actually paid or allocated to the purchase or development of assets acquired by the Company (including working capital reserves allocable thereto, except that working capital reserves in excess of 3% shall not be included) and other cash payments such as interest and taxes, but excluding Front End Fees.

“Joint Ventures” means those joint venture or partnership arrangements in which the Company or any of its subsidiaries is a co‑venturer or general partner in an entity established to acquire or hold assets.

“Liquidation” means the liquidation, dissolution, or winding‑up of the Company pursuant to Article XIX.

“Listing” means the listing of any class of Shares (unless the context otherwise specifies) on a national securities exchange, or a transaction in which Members receive shares of an entity that is listed on a national securities exchange. Upon such Listing, the Shares shall be deemed Listed.

- 9 -

“LLSC” is defined in the preamble.

“LLSC Non-Independent Director” is defined in Section 5.2.

“Loss” for any period means all items of Company loss, deduction and expense for such period determined according to Section 8.3.

“Majority of the Members” means Members holding more than 50% of the total outstanding Percentage Interests of the Company as of a particular date (or if no date is specified, the first day of the then current calendar month).

“Manager” or “Managers” means the Person or Persons, if any, appointed, employed or contracted with by the Company pursuant to Article XIII hereof and responsible for directing or performing the day-to-day business affairs and management of the Company, including any Person to whom a Manager subcontracts substantially all of, or material aspects of, certain management functions pursuant to a sub-management agreement.

“Management Agreements” means an agreement between the Company and the Manager named therein and includes any agreements between such Manager and other Managers appointed as a sub-manager.

“Management Fee” means the base management fee paid to the Managers pursuant to the terms of the Management Agreements.

“Managing Dealer” means CNL Securities Corp., an Affiliate of the Manager, or such other Person or entity selected by the Board of Directors to act as the managing dealer for the Offering of the Shares in an Initial Public Offering. CNL Securities Corp. is a member of FINRA.

“Members” means the holders of record of Shares.

“Member Nonrecourse Debt” means “partner nonrecourse debt” as defined in Treasury Regulations Section 1.704‑2(b)(4).

“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to the Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if the Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704‑2(i)(3).

“Member Nonrecourse Deductions” means “partnership nonrecourse deductions” as defined in Treasury Regulations Section 1.704‑2(i)(1) and as computed in accordance with Treasury Regulations Section 1.704‑2(i)(2). For any taxable year or other period, the amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt equals the excess, if any, of the net increase, if any, in the amount of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt over the aggregate amount of any distributions during such year to the Member that bears the economic risk of loss for such Member Nonrecourse Debt to the extent such distributions are from proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Nonrecourse Debt Minimum Gain, determined according to the provisions of the Treasury Regulations Sections 1.704‑2(h) and 1.704(2)(i).

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“Membership Interest” means a Member's rights in one or more Shares at any particular time, including the Member's Economic Interest in the Company, any right to vote or participate in management of the Company and any right to information concerning the business and affairs of the Company provided by this Agreement or the Act.

“Membership List” means a list, in alphabetical order by name, setting forth the name, address and business or home telephone number of, and number of Shares held by, each Member, which list shall be printed on white paper in a readily readable type size (in no event smaller than 10‑point type) and shall be updated at least quarterly to reflect any changes in the information contained therein.

“Minimum Offering for the Initial Public Offering” means the receipt and acceptance by the Board of Directors of subscriptions for Shares aggregating at least $2,000,000 in Gross Proceeds.

“Minimum Offering Expiration Date for the Initial Public Offering” means the one (1) year anniversary of the date of the Company’s Prospectus.

“Minimum Offering for the Private Placement” means the receipt and acceptance by the Board of Directors of subscriptions for Class FA Shares aggregating at least $80,000,000 in Gross Proceeds or such lower amount as the Board of Directors shall determine in its sole discretion.

“Minimum Offering Expiration Date for the Private Placement” means December 31, 2017 or such later date as the Board of Directors may determine in its sole discretion.

“NASAA Omnibus Guidelines” means the NASAA Omnibus Guidelines adopted by the North American Securities Administrators Association, Inc., on March 29, 1992, as amended on May 7, 2007.

“Net Worth” means the excess of total assets over total liabilities as determined by generally accepted accounting principles.

“Non‑Compliant Tender Offer” is defined in Section 11.21.

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations Section 1.704‑2(b)(1).

“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section 1.704‑2(b)(3).

“Offering” means any offering and sale of Shares (whether pursuant to (i) a registration statement filed with the Commission (including, in connection with the Initial Public Offering) or (ii) an offering memorandum in a transaction exempt for registration under the Securities Act) (including, in connection with the Private Placement)), including pursuant to the Reinvestment Plan, if any.

“Offering Memorandum” means the offering memorandum utilized for the purpose of offering and selling Shares in the Private Placement.

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“Organization and Offering Expenses” means all expenses incurred by and to be paid from the assets of the Company in connection with and in preparing the Company for (i) the preparation of the Company’s Offering Memorandum and subsequent offer and distribution of Shares in the Private Placement and (ii) preparation of a registration statement, including the Company’s Prospectus, and subsequent public offer and distribution of Shares in an Initial Public Offering; and including, but not limited to in each case total underwriting compensation or private placement fees (including fees of the underwriter's or placement agent's attorneys), as applicable, expenses for printing, engraving and mailing, salaries of employees while engaged in sales activities, charges of the escrow holder, registrar, transfer agent, trustees, depositories and experts, reimbursement of bona fide due diligence expenses of broker-dealers and the expenses of qualification and sale of the Shares under federal and state laws, if required, including taxes and fees, accountants' and attorneys' fees.

“Original Agreement” is defined in the preamble.

“Owner” has the meaning ascribed to the term beneficial owner in Rule 13d‑3 of the Rules and Regulations promulgated under the Exchange Act.

“Participating Broker-Dealers” means those broker-dealers that are members of FINRA, registered investment advisors and other entities exempt from broker-dealer registration, that, in each case, enter into participating broker or other selling agreements with the Managing Dealer or Placement Agent, as applicable, to sell Shares.

“Percentage Interest” means, unless specifically provided otherwise, the percentage ownership interest of any Member determined at any time by dividing a Member's current Shares by the total outstanding Shares of all Members. If specifically provided otherwise, the determination of a member's Percentage Interest may be made on a Class-by-Class basis by dividing a Member's current Shares in a given Class by the total outstanding Shares of all Members in that Class. For the avoidance of doubt, the Percentage Interest referred to in Section 9.2(a)(ii) shall be made on a Class-by-Class basis.

“Person” means any natural person, partnership, corporation, association, trust or other legal entity.

“Placement Agent” means CNL Securities Corp., an Affiliate of the Manager, or such other Person or entity selected by the Board of Directors to act as the placement agent for the Offering of the Shares in this Private Placement. CNL Securities Corp. is a member of FINRA.

“Preferred Shares” has the meaning set forth in Section 7.2 hereof.

“Primary Offering” means, with respect to an Offering, the primary portion of such Offering, excluding any Reinvestment Plan portion of such Offering, if any.

“Private Placement” means the Offering of Class FA Shares and Class A Shares in an offering exempt from the registration requirements through the use of the Offering Memorandum.

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“Profit” for any period means all items of Company income and gain for such period determined according to Section 8.3.

“Program” means a limited or general partnership, joint venture, unincorporated association or similar organization other than a corporation formed and operated for the primary purpose of investment in and the operation of or gain from and interest in the assets to be acquired by such entity.

“Prospectus” means the same as that term is defined in Section 2(a)(10) of the Securities Act, including any preliminary prospectus or, in the case of any intrastate or private offering, any document by whatever name known, utilized for the purpose of offering and selling Securities.

“Record Date” means the date established by the Board of Directors for determining (a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Members or entitled to exercise rights in respect of any lawful action of Members or (b) the identity of Record Holders entitled to receive any report or distribution or to participate in any offer.

“Record Date Request Notice” has the meaning set forth in Section 11.2(b).

“Record Holder” means, with respect to any Shares, the Person in whose name such Shares are registered on the Membership List as of the opening of business on a particular Business Day.

“Registration Statement” means any registration statement for the Shares on a proper form filed with the Commission under the Securities Act which registration statement was declared effective by the Commission.

“Regulatory Allocations” is defined in Section 9.4(f).

“Reinvestment Plan” is defined in Section 7.15.

“Request Record Date” has the meaning set forth in Section 11.2(b).

“Roll‑Up Entity” means a partnership, corporation, trust or other entity that would be created or survive after the successful completion of a proposed Roll‑Up Transaction.

“Roll‑Up Transaction” means a transaction involving the acquisition, merger, conversion, or consolidation, directly or indirectly, of the Company and the issuance of securities of a Roll‑Up Entity. Such term does not include: (i) a transaction involving securities of the Company that have been listed on a national securities exchange or that are traded through the National Association of Securities Dealers Automated Quotation System for at least 12 months, or (ii) a transaction involving the reorganization to corporate, partnership, trust, or association form of only the Company if, as a consequence of the proposed reorganization, there will be no significant adverse change in the voting rights of the Members, the term of existence of the Company, compensation to the Manager or Sponsor or the investment objectives of the Company.

“Sale” means the sale, exchange, involuntary conversion, foreclosure, condemnation, taking, casualty (other than a casualty followed by refurbishing or replacement), or other disposition of any of the Company's assets.

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“Securities” means Shares, stock, units, membership interests or other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, stock or participations in, temporary or interim certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing.

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

“Selling Commissions” means any and all commissions payable to underwriters, managing dealers, placement agents, or other Participating Broker-Dealers, as applicable, in connection with the sale of Shares, including commissions payable to the Managing Dealer or the Placement Agent, as applicable.

“Share Designation” is defined in Section 7.3.

“Share Repurchase Program” means, a program, if any, adopted by the Board of Directors pursuant to which the Company may conduct Share repurchases.

“Shares” is defined in Section 7.1. Shares may be Common Shares or Preferred Shares, and may be issued in different classes or series.

“Special Meeting Percentage” has the meaning set forth in Section 11.2(b).

“Special Meeting Request” has the meaning set forth in Section 11.2(b).

“Sponsor” means any Person directly or indirectly instrumental in organizing, wholly or in part, the Company or any Person who will control, manage or participate in the management of the Company, and any Affiliate of such Person. Sponsor does not include any Person whose only relation to the Company is that of an independent manager of a portion of the Company's assets and whose only compensation is as such, nor does it include wholly independent third parties, including attorneys, sub‑managers, accountants and underwriters whose only compensation is for professional services rendered in connection with the offering of Shares. A Person may also be deemed a Sponsor of the Company (as to be determined by the Board of Directors upon both Commencement of the Private Placement and Commencement of the Initial Public Offering) by:

(a)    taking the initiative, directly or indirectly, in founding or organizing the business or enterprise of the Company, either alone or in conjunction with one or more other Persons;

(b)    receiving a material participation in the Company in connection with the founding or organizing of the business of the Company, in consideration of services or property, or both services and property;

(c)    having a substantial number of relationships and contacts with the Company;

(d)    possessing significant rights to control Company properties;

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(e)    receiving fees for providing services to the Company which are paid on a basis that is not customary in the Company's industry; or

(f)    providing goods or services to the Company on a basis which was not negotiated at arm's length with the Company.

“Subscription Agreement” means the document that a Person who buys Shares of the Company must execute and deliver with (x) a capital commitment in connection with subscriptions for Class FA Shares in the Private Placement or (y) with full payment for the Shares for Class A Shares in the Private Placement and Shares in the Initial Public Offering; and which, among other provisions, contains the written consent of each Member to the adoption of and/or joinder, as applicable, to this Agreement.

“Subsidiary” means, with respect to any Person, any corporation, company, joint venture, limited liability company, association or other Person in which such Person owns, directly or indirectly, more than 50% of the outstanding equity securities or interests, the holders of which are generally entitled to vote for the election of the Board of Directors or other governing body of such Person.

“Substitute Member” means any Assignee of Shares who is admitted to the Company as a Member pursuant to Section 10.3 of this Agreement.

“Tax Matters Partner” is defined in Section 9.9(a).

“Total Company-Level Underwriting Compensation” means all underwriting compensation paid or incurred with respect to an Initial Public Offering from all sources, determined pursuant to the rules and guidance of FINRA, including Managing Dealer fees, Selling Commissions, and Distribution Fees, as applicable.

“Total Share-Level Underwriting Compensation” means, with respect to any Common Share sold for the account of the Company through an Initial Public Offering, all Managing Dealer fees, Selling Commissions, Distribution Fees and any other underwriting compensation fees, determined pursuant to the rules and guidance of FINRA, paid to the Managing Dealer or to Participating Broker-Dealers, as applicable, as well as any purchase price discounts from the non-discounted offering price given at the time of purchase.

“Treasury Regulations” means the Treasury Regulations promulgated under the Code.

ARTICLE III

POWERS AND PURPOSE

Section 3.1Purpose. The purposes and powers of the Company shall be to engage in any lawful business or activity that may be engaged in by a limited liability company formed under the Act, as such businesses or other activities may be determined by the Board of Directors from time to time.

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Section 3.2No State Law Partnership. The Company is a Delaware limited liability company that will be treated as a partnership only for federal income tax purposes, and if applicable, state and local tax purposes, and no Member shall be deemed to be a partner or joint venturer of any other Member, for any purposes other than federal income tax purposes and, if applicable, state and local tax purposes, and this Agreement shall not be construed to suggest otherwise. The Members intend that the Company shall be treated as a partnership for federal and, if applicable, state and local income tax purposes, and each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment.

Section 3.3Authority.

(a)By executing the Subscription Agreement and subscribing for Shares, each Member hereby agrees to be bound by the terms of this Agreement and any amendments or supplements thereto or cancellations thereof and authorizes and appoints with full power of substitution as its, his or her true and lawful agent and attorney-in-fact, with full power and authority in its, his or her name, place and stead, the Manager and the Company, and each of their authorized officers and attorneys-in-fact, as the case may be, to execute, swear to, acknowledge, deliver, file and record in the appropriate public offices, as may be required or advisable under the laws of the State of Delaware or any other applicable jurisdiction:

(i)any and all certificates, instruments, agreements or other documents, whether related to this Agreement or otherwise, and any amendment of any thereof (including amendments reflecting the addition of any Person as a Member or any admission or substitution of other Members or the Capital Contribution made by any such Person or by any Member) and any other document, certificate or instrument required to be executed and delivered, at any time, in order to reflect the admission of any Member (including any Substitute Member);

(ii)any other document, certificate or instrument required to reflect any action of the Members duly taken in the manner provided for in this Agreement, whether or not such Member voted in favor of or otherwise consented to such action;

(iii)any other document, certificate or instrument that may be required by any regulatory body or other agency or the applicable laws of the United States, any state or any other jurisdiction in which the Company is doing or intends to do business or that the Board of Directors or CSCM deems necessary or advisable;

(iv)any certificate of dissolution or cancellation of the Certificate that may be reasonably necessary to effect the termination of the Company;

(v)any instrument or papers required to terminate the business of the Company pursuant to Article XIX hereof; provided, however, that no such attorney-in-fact shall take any action as attorney-in-fact for any Member if such action could in any way increase the liability of such Member beyond the liability expressly set forth in this Agreement or alter the rights of such Member under Article XI, unless (in either case) such Member has given a power of attorney to such attorney-in-fact expressly for such purpose; and

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(vi)all ballots, consents, approvals, waivers, certificates, documents and other instruments that the Board of Directors determines to be necessary or appropriate to (i) make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Members hereunder or is consistent with the terms of this Agreement or (ii) effectuate the terms or intent of this Agreement; provided, that when required by Article XII or any other provision of this Agreement that establishes a percentage of the Members or of the Members holding any class or series of Shares required to take any action, the Manager and the Company, and each of their authorized officers and attorneys-in-fact, as the case may be, may exercise the power of attorney made in this Section 3.3 only after the necessary vote, consent, approval, agreement or other action of the Members or of the Members holding such class or series of Shares, as applicable.

(b)Nothing contained in this Section 3.3 shall be construed as authorizing the Manager and the Company, or each of their authorized officers or attorneys-in-fact, as the case may be, to amend, change or modify this Agreement except in accordance with Article XVII or as may be otherwise expressly provided for in this Agreement.

(c)The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Member and the transfer of all or any portion of such Member's Shares and shall extend to such Member's heirs, successors, assigns and personal representatives. Each such Member hereby agrees to be bound by any representation made by the Manager or the Company, and each of their authorized officers or attorneys-in-fact, as the case may be, acting in good faith pursuant to such power of attorney; and each such Member, to the maximum extent permitted by law, hereby waives any and all defenses that may be available to contest, negate or disaffirm the action of the Manager or the Company, and each of their authorized officers or attorneys-in-fact, as the case may be, taken in good faith under such power of attorney in accordance with this Section 3.3.

(d)Each Member hereby agrees to execute and deliver to the Board of Directors within five (5) days after receipt of the Board of Directors' written request therefore, such other and further statements of interest and holdings, designations, and further statements of interest and holdings, designations, powers of attorney and other instruments that the Board of Directors deem necessary to comply with any laws, rules or regulations relating to the Company's activities.

ARTICLE IV

RESIDENT AGENT AND PRINCIPAL OFFICE

The address of the registered agent of the Company in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree Dr., #101, Dover, Delaware 19904. The name of the Company's registered agent is National Registered Agents, Inc. or any successor registered agent for service of process as shall be appointed by the Board of Directors in accordance with the Act. The Company's registered agent, National Registered Agents, Inc., is a Delaware corporation. The address of the principal office of the Company is 450 South Orange Avenue, Orlando, Florida 32801. The Company may have such other offices or places of business as the Board of Directors may from time to time determine.

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ARTICLE V

BOARD OF DIRECTORS

Section 5.1Powers.

(a)Except as otherwise expressly provided in this Agreement, the Board of Directors shall have complete and exclusive discretion to manage the business and affairs of the Company and is authorized to and shall have all powers and rights necessary, appropriate or advisable to effectuate and carry out the purposes, policies and business of the Company. No Member, by reason of its status as such, shall have any authority to act for or bind the Company but shall have only the right to vote on or approve the actions specified herein to be voted on or approved by the Members or, to the extent not inconsistent with this Agreement, in the Act. At any time that there is only one Member, any and all action provided for herein to be taken or approved by the Members shall be taken or approved by the sole Member.

(b)The Company shall have such officers as are provided for in Article VI. The Board of Directors may appoint, employ, or otherwise contract with such other persons or entities for the transaction of the business of the Company or the performance of services for or on behalf of the Company as it shall determine in its sole discretion. The Board of Directors may delegate to a Manager, any officer of the Company or the Manager, or to any such other person or entity such authority to act on behalf of the Company as the Board of Directors may from time to time deem appropriate in its sole discretion.

(c)Except as otherwise provided by the Board of Directors, when the taking of such action has been authorized by the Board of Directors, any Director or officer of the Company or a Manager, or any other person specifically authorized by the Board of Directors, may execute any contract or other agreement or document on behalf of the Company and may execute on behalf of the Company and file with the Secretary of State of the State of Delaware any certificates or filings provided for in the Act.

Section 5.2Number and Classification.

(a)Initially, the Board of Directors has two (2) members, both of whom are non- Independent Directors and were appointed as follows:

(i)CSCM appointed Thomas K. Sittema, an interested director, to serve as Chairman of the Board of Directors (the “CSCM non-Independent Director”) until his successor shall be elected and shall qualify or until his earlier resignation, removal from office, death or incapacity; provided, however, Chairman of the Board of Directors or the Vice-Chairman of the Board of Directors shall always be the CSCM non-Independent Director, and

(ii)LLSC appointed Arthur E. Levine, an interested director, to serve as Vice-Chairman of the Board of Directors (the “LLSC non-Independent Director”), to serve until his successor shall be elected and shall qualify or until his earlier resignation, removal from office, death or incapacity; provided, however, Chairman of the Board of Directors or

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the Vice-Chairman of the Board of Directors shall always be the LLSC non-Independent Director.

The total number of Directors shall never be fewer than the minimum number required by the Act and, as of the Effective Date, shall be five (5); except for a period of up to sixty (60) days after the death, removal resignation or incapacitation of a Director pending the appointment or election of such Director’s successor in accordance with the provisions Article V, and provided, further, however, that, as of the Effective Date and subject to this Section 5.2(a) and Section 5.2(d), at all times there shall be one more Independent Director than non‑Independent Directors.

(b)The names and addresses of the Directors who shall serve on the Board of Directors are set forth in the books and records of the Company.

(c)Subject to Section 5.3, any and all vacancies on the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors in office, even if the remaining Directors do not constitute a quorum and shall serve for the remainder of the full term of the position in which such vacancy occurred and until a successor is duly elected and qualified by the shareholders. Notwithstanding anything herein to the contrary, in the event of a vacancy among the Independent Directors, the remaining Independent Directors shall nominate replacements for such position.

(d)As of the Effective Date, a majority of the Board of Directors will be Independent Directors except for a period of sixty (60) days after the failure to stand for re-election, death, removal, resignation or incapacitation of an Independent Director.

(e)The Board of Directors shall be divided into three classes, designated Class I, Class II and Class III, as nearly equal in number as possible, and the term of office of Directors of one class shall expire at each annual meeting of Members, and in all cases as to each Director such term shall extend until his or her successor shall be elected and shall qualify or until his or earlier resignation, removal from office, death or incapacity. Additional directorships resulting from an increase in number of Directors shall be apportioned among the classes as equally as possible. Class I initially shall consist of one Independent Director, Class II initially shall consist of one Independent Director and one non-Independent Director, and Class III initially shall consist of one Independent Director and one non-Independent Director. The initial term of office of Directors of Class I shall expire at the Company's first annual meeting of the Members following the Initial Closing of the Private Placement, or, if earlier, the Commencement of the Initial Public Offering; the initial term of office of Directors of Class II shall expire at the Company's second annual meeting of the Members following the Initial Closing of the Private Placement, or, if earlier, the Commencement of the Initial Public Offering; and the initial term of office of Directors of Class III shall expire at the Company's third annual meeting of the Members following the Initial Closing of the Private Placement, or, if earlier, the Commencement of the Initial Public Offering. Following such initial terms, at each annual meeting of the Members, a number of Directors equal to the number of Directors of the class whose term expires at the time of such meeting (or, if less, the number of Directors properly nominated and qualified for election) shall be elected to hold office until the third succeeding annual meeting of the Members after their election. Each Director may be reelected to an unlimited number of succeeding terms in accordance with these provisions. At each annual election, Directors chosen to succeed those whose terms then expire shall be of the same class as the Directors they succeed,

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unless by reason of any intervening changes in the authorized number of Directors, the Board of Directors shall designate one or more directorships whose term then expires as directorships of another class in order to more nearly achieve equality of number of Directors among the classes. Notwithstanding the rule that the three classes shall be as nearly equal in number of Directors as possible, in the event of any change in the authorized number of Directors, each Director then continuing to serve as such shall nevertheless continue as a Director of the class of which such Director is a member until the expiration of his or her current term, or his or her prior failure to stand for re-election, death, resignation, removal or incapacitation. If any newly created directorship may, consistently with the rule that the three classes shall be as nearly equal in number of Directors as possible, be allocated to any class, the Board of Directors shall allocate it to that of the available class whose term of office is due to expire at the earliest date following such allocation.

Section 5.3Non-Independent Director Nominations.

(A) nominations for re-elections, vacancies arising through the failure to stand for re-election, resignation, removal from office, death or incapacity of the CSCM non-Independent Director may be filled by the Board only with a Person nominated by CSCM (the “CSCM Nominee”), and the Director so chosen shall hold office until the next election or until his or her successor shall be elected and shall qualify or until his or her earlier resignation, removal from office, death or incapacity; (B) nominations for re-elections, vacancies arising through the failure to stand for re-election, resignation, removal from office, death or incapacity of the LLSC non-Independent Director may be filled by the Board only with a Person nominated by LLSC (the “LLSC Nominee”), and the Director so chosen shall hold office until the next election or until his or her successor shall be elected and shall qualify or until his or her earlier resignation, removal from office, death or incapacity.

Notwithstanding the provisions of this Section 5.3, neither CSCM nor LLSC shall be entitled to designate a Person as a nominee to the Board of Directors if the nominating and corporate governance committee of the Company or such other committee with similar responsibilities reasonably determines in writing (which determination shall set forth the reasonable grounds for such determination) that such Person would not be qualified under any applicable law, rule or regulation to serve as a Director of the Company; provided, that in such event, CSCM or LLSC, as applicable, shall be entitled to designate another Person as the CSCM Nominee or LLSC Nominee, as applicable and the provisions of Section 5.3 shall apply to such alternate Person. Only the nominating and corporate governance committee of the Company or such other committee with similar responsibilities shall have the right to object to any CSCM Nominee or LLSC Nominee.

In the event the Members fail to elect or consent to a CSCM Director or an LLSC Director at a duly called meeting of Members, (i) CSCM and/or LLSC, as applicable, shall designate another Person as the CSCM Nominee or the LLSC Nominee, as applicable, and the provisions of Section 5.3 shall apply to such alternate Person, and (ii) the Company shall promptly appoint the CSCM Nominee or the LLSC Nominee, as applicable, to any such vacancy on the Board of Directors created by the Members failure to elect or consent to such Director. For the avoidance of doubt, in no event shall the Company be required to nominate

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or appoint a CSCM Nominee or an LLSC Nominee to the Board of Directors of the Company if the Members fail to elect or consent to such nominee, as applicable.

Section 5.4Committees. The Board of Directors may establish an audit committee and such other committees as they deem appropriate, and may delegate to such committees such powers as the Board of Directors deem appropriate, in their discretion, except as prohibited by the Act; provided that, followingthe Initial Closing of the Private Placement or, if earlier, the Commencement of the Initial Public Offering, at least a majority of the members of the audit committee are Independent Directors. The responsibilities and duties of the committees shall be set forth in the respective charters for such committees.

Section 5.5Fiduciary Obligations.

(a)Following the Initial Closing of the Private Placement or, if earlier, the Commencement of the Initial Public Offering, the Directors serve in a fiduciary capacity to the Company and have a fiduciary duty to the Members, including a specific fiduciary duty to supervise the relationship of the Company with a Manager, a Company Administrator and their Affiliates. Prior to the Initial Closing of the Private Placement or, if earlier, the Commencement of the Initial Public Offering, the responsibilities of the Directors to the Company and its Members shall be as set forth in the Act.

(b)Notwithstanding anything herein to the contrary, the Company hereby acknowledges that a Manager has the same and equal fiduciary duty to the Company as it does to its other various clients and accounts (the “Advisory Clients”) and that the Directors have the same and equal fiduciary duty to the Company as it does to its other companies for which it serves as a director (the “Other Companies”). In connection therewith, the Company hereby acknowledges that a Manager and its respective affiliated directors, managers, partners, members, officers and employees and other affiliates (“Affiliated Persons”) perform investment advisory services for the Advisory Clients and further acknowledges that a Manager and Affiliated Persons may (i) give advice and take action with respect to any of its other Advisory Clients that may differ from advice given or the timing or nature of action taken with respect to any Advisory Client, so long as it is consistent with the provisions of a Manager’s allocation policy and its obligations under a Management Agreement, and (ii) subject to any exclusivity agreement by and between Managers and its obligations under a Management Agreement, engage in activities that overlap with or compete with those in which the Company and its subsidiaries, directly or indirectly, may engage. The Company, on its own behalf and on behalf of its subsidiaries, hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Other Company or an Advisory Client to the extent such opportunity has been determined in good faith by a Director or Manager, as the case may be, not to be allocated to the Company, all in accordance with the Company’s and a Manager’s allocation policy.

(c)The Company acknowledges that, subject to the Company’s investment policy and a Manager’s obligations under a Management Agreement, a Manager shall not have any obligation to recommend for purchase or sale any securities or loans which its principals, affiliates or employees may purchase or sell for its or their own accounts or for any other client or account if, in the opinion of a Manager, such transaction or investment appears unsuitable, impractical or undesirable for the Company.

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Section 5.6Resignation or Removal. Any Director may resign by written notice to the Board of Directors, effective upon execution and delivery to the Company of such written notice or upon any future date specified in the notice. Any Director, or the entire Board of Directors, may be removed from office at any time, with or without cause, only by the affirmative vote of a majority of the votes entitled to be cast at a meeting called, pursuant to Article XI, for the purpose of the proposed removal (excluding any Shares of any Director being considered for removal) without the necessity for concurrence by the Board of Directors.

Section 5.7Approval by Independent Directors. A majority of Independent Directors must approve all applicable matters if so specified in this Agreement. In addition, and notwithstanding anything else herein to the contrary, the Independent Directors shall have the sole discretion to interpret any provision herein, if any, which was included at the request of any Administrator or pursuant to Section VIII.D. of the NASAA Omnibus Guidelines.

Section 5.8Certain Determinations by Board of Directors. The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board of Directors consistent with this Agreement, shall be final and conclusive and shall be binding upon the Company and every holder of Shares: the amount of the net income for any period and the amount of assets at any time legally available for the payment of distributions or redemption of Shares, the amount of net assets, annual or other cash flow, funds from operations or net profit; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); any interpretation of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of any class or series of Shares; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Company or any Shares; the number of Shares of any class of the Company; any conflict between the Act and the provisions set forth in the NASAA Omnibus Guidelines; any matter relating to the acquisition, holding and disposition of any assets by the Company; transactions with any Affiliate; payment of fees and expenses to a Manager; or any other matter relating to the business and affairs of the Company or required or permitted by applicable law, this Agreement or otherwise to be determined by the Board of Directors; provided, however, that any determination by the Board of Directors as to any of the preceding matters shall not render invalid or improper any action taken or omitted prior to such determination and no Director shall be liable for making or failing to make such a determination.

Section 5.9Place of Meetings and Meetings by Telephone. All meetings of the Board of Directors may be held at any place that has been designated from time to time by resolution of the Board of Directors. In the absence of such a designation, regular meetings shall be held at the principal place of business of the Company. Any meeting, regular or special, may be held by conference telephone or similar communication equipment so long as all Directors participating in the meeting can hear one another, and all Directors participating by telephone or similar communication equipment shall be deemed to be present in person at the meeting.

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Section 5.10Regular Meetings. Regular meetings of the Board of Directors shall be held at such times and at such places as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors.

Section 5.11Special Meetings. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by any Director or by the Chief Executive Officer, the President or the Secretary. Notice of the time and place of a special meeting shall be delivered personally or by telephone to each Director and sent by electronic mail (or similar electronic means) or by nationally recognized overnight courier, charges prepaid, addressed to each Director at that Director's address as it is shown on the records of the Company. In case the notice is mailed, it shall be deposited in the United States mail at least five (5) Business Days before the time of the holding of the meeting. In case notice is delivered by overnight courier, it shall be given at least two (2) Business Days before the time of the holding of the meeting. In case the notice is delivered personally or by telephone or electronic mail (or similar electronic means), it shall be given at least one (1) Business Day before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the Directors or to a person at the office of the Directors who the person giving the notice has reason to believe will promptly communicate it to the Director. The notice need not specify the purpose of the meeting.

Section 5.12Quorum. At all meetings of the Board of Directors, the presence of all of the Directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 5.14. To the extent the Board of Directors has more than two (2) Directors, the presence of two-thirds of the authorized number of Directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 5.14. Every act or decision done or made by the affirmative vote of a majority of the Directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors, except to the extent that the vote of a higher number of Directors is required by this Agreement or applicable law.

Section 5.13Waiver of Notice. Notice of any meeting need not be given to any Director who either before or after the meeting signs a written waiver of notice, a consent to holding the meeting, or an approval of the minutes. The waiver of notice or consent need not specify the purpose of the meeting. All such waivers, consents, and approvals shall be filed with the records of the Company or made a part of the minutes of the meeting. Notice of a meeting shall also be deemed given to any Director who attends the meeting without protesting before or at its commencement the lack of notice to that Director.

Section 5.14Adjournment. A majority of the Directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place. Notice of the time and place of holding an adjourned meeting need not be given unless the meeting is adjourned for more than 48 hours, in which case notice of the time and place shall be given before the time of the adjourned meeting.

Section 5.15Action Without a Meeting. Any action to be taken by the Board of Directors at a meeting may be taken without such meeting by the written consent of each Director then in office and entitled to vote on the matter. Any such written consent may be executed and given by electronic mail or similar electronic means. Such written consents shall be filed with the minutes of the proceedings of the Board of Directors.

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Section 5.16Compensation. Each Independent Director is entitled to receive annually for serving on the Board of Directors or on a committee thereof a retainer or compensation in an amount to be determined by the audit committee of the Board of Directors to be fair and reasonable, and also will be reimbursed for reasonable out-of-pocket expenses incurred with attending meetings of the Board of Directors and committees of the Board of Directors. The Company will not pay compensation to any Director who also serves as an officer or director of a Manager or are employees of an Affiliate. No additional compensation shall be paid to any Director for attending the annual meeting of shareholders. Nothing herein contained shall be construed to preclude any Director from serving the Company in any other capacity and receiving compensation therefor.

ARTICLE VI

OFFICERS

Section 6.1Officers. The officers of the Company shall be a Chief Executive Officer, a President, a Chief Financial Officer, a General Counsel and a Secretary. The Company may also have, at the discretion of the Board of Directors, such other officers as may be appointed in accordance with the provisions of Section 6.3. Any number of offices may be held by the same person. Each of the officers of the Company may but need not be a Director. The descriptions of the duties and responsibilities of the officers of the Company are set forth in Schedule A, which may be amended from time to time at the discretion of the Board of Directors.

Section 6.2Election of Officers. The officers of the Company, except such officers as may be appointed in accordance with the provisions of Section 6.3 or Section 6.5, shall be chosen by the Board of Directors, and each shall serve at the pleasure of the Board of Directors.

Section 6.3Subordinate Officers. The Board of Directors may appoint and may empower the Chief Executive Officer, or any other officer, to appoint such other officers as the business of the Company may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in this Agreement or as the Board of Directors (or, to the extent the power to prescribe authorities and duties of subordinate officers is delegated to him or her, the Chief Executive Officer, or such other officer) may from time to time determine.

Section 6.4Removal and Resignation of Officers. Any officer may be removed, with or without cause, by the Board of Directors at any regular or special meeting of the Board of Directors or by such officer, if any, upon whom such power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and unless otherwise specified in notice of a resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.

Section 6.5Vacancies in Offices. A vacancy in any office because of death, resignation, removal, disqualification or other cause shall be filled in the manner prescribed in this Agreement for regular appointment to that office. The Chief Executive Officer may make temporary appointments to a vacant office pending action by the Board of Directors.

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ARTICLE VII

CAPITAL CONTRIBUTIONS; COMMON SHARES; PREFERRED SHARES

Section 7.1Shares. A Member's Membership Interest in the Company, including such Member's right to receive Distributions from the Company, shall be represented by the “Share” or “Shares” held by such Member. Initially, there shall be five Classes of Common Shares: (i) class A Shares (“Class A Shares”), (ii) class T Shares (“Class T Shares”), (iii) class I Shares (“Class I Shares”), (iv) class D Shares (“Class D Shares”), and (v) class FA Shares (“Class FA Shares”), and such Classes shall have the following commissions and fees relating to them:

(a)With respect to the Private Placement:

(i)Each Class FA Share issued in the Private Placement shall not be subject to any Selling Commissions or Placement Agent fees; and

(ii)Each Class A Share issued in the Private Placement shall be subject to a Selling Commission of up to 5.5% per Class A Share and a Placement Agent fee of up to 3.0% per Class A Share.

(b)With respect to the Initial Public Offering (subject to any changes set forth in a Prospectus of the Company after the date hereof):

(i)Each Class A Share issued in the Primary Offering shall be subject to a Selling Commission of up to 6.0% per Share and a Managing Dealer fee of up to 2.5% per Share, which underwriting compensation is subject to change in the Company’s Prospectus or subsequent offerings. No Selling Commissions or Managing Dealer fees shall be paid with respect to any Class A Shares issued pursuant to any Reinvestment Plan.

(ii)Each Class T Share issued in the Primary Offering shall be subject to a Selling Commission of up to 3.0% per Share and a Managing Dealer fee of up to 1.75% per Share, which underwriting compensation is subject to change in the Company’s Prospectus or subsequent offerings. In addition, with respect to Class T Shares, the Company shall pay the Managing Dealer an annual distribution and shareholder servicing fee (“Distribution Fee”) in an annual amount equal to 1.0% of the current net asset value per Class T Share, payable on a monthly basis or as otherwise determined by the Board of Directors. No Selling Commission or Managing Dealer fee shall be paid with respect to any Class T Shares issued pursuant to any Reinvestment Plan.

(iii)With respect to each Class D Share, the Company shall pay the Managing Dealer a Distribution Fee in an annual amount equal to 0.50% of the of the current net asset value per Class D Share, payable on a monthly basis or as otherwise determined by the Board of Directors.

(iv) Each Class I Share issued in the Primary Offering shall not be subject to any Selling Commissions or Managing Dealer fees.

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Section 7.2Authorized Common Shares and Preferred Shares. The Company is initially authorized to issue up to 1,000,000,000 Shares, of which 950,000,000 Common Shares are designated as Class A Shares, Class D Shares, Class T Shares, Class I Shares and Class FA Shares, and 50,000,000 are designated as Preferred Shares (“Preferred Shares”). All Shares issued pursuant to, and in accordance with the requirements of, this Article VII shall be validly issued, fully paid and nonassessable Shares in the Company. Except as may be provided otherwise in this Agreement, each holder of Common Shares shall vote together with the holders of all other Common Shares and the holders of the Common Shares shall have the exclusive right to vote on all matters (as to which a holder of Common Shares shall be entitled to vote pursuant to applicable law) at all meetings of the Members. If Shares of one class or series are classified or reclassified into Shares of another class or series pursuant to Section 7.3, the number of authorized Shares of the former class or series shall be automatically decreased and the number of Shares of the latter class or series shall be automatically increased, in each case by the number of Shares so classified or reclassified, so that the aggregate number of Shares of all classes or series that the Company has authority to issue shall not be more than the total number of Shares set forth in the first sentence of this paragraph. The Board of Directors, with the approval of a majority of the entire Board of Directors and without any action by the Members, may amend this Agreement from time to time to increase or decrease the aggregate number of Shares or the number of Shares of any class or series that the Company has authority to issue.

Section 7.3New Class or Reclassified Shares.

(a)Prior to the creation of a new class or reclassification of Shares of any class or series, the Board of Directors by resolution shall (a) designate that class or series to distinguish it from all other classes and series of Shares of the Company, (b) specify the number of Shares to be included in the class or series, and (c) set or change, subject to the provisions of Articles X and XI and subject to the express terms of any class or series of Shares of the Company outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series (a “Share Designation”). A Share Designation shall be effective when a duly executed original of the same is delivered to the Secretary of the Company for inclusion among the books and records of the Company, and shall be annexed to, and constitute part of, this Agreement.

(b)New Class or Reclassified Preferred Shares.    Notwithstanding the provisions of the foregoing Section 7.3(a), a majority of the Independent Directors who do not have an interest in the transaction must approve any offering of Preferred Shares and have access, at the Company’s expense, to the Company’s legal counsel or independent legal counsel.

Section 7.4Class Rights and Conversions.

(a)Rights Upon Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or any distribution of the assets of the Company, the aggregate assets available for distribution to the holders of Common Shares shall be determined in accordance with applicable law. Immediately before any liquidation, dissolution or winding up of the Company, or any distribution of the assets of the Company pursuant to a plan of liquidation, dissolution or winding up, the Class T Shares will automatically convert to Class A Shares at the Class T Conversion Rate, the Class I Shares will automatically convert to Class A Shares at the

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Class I Conversion Rate, the Class D Shares will automatically convert to Class A Shares at the Class D Conversion Rate, the Class FA Shares will automatically convert to Class A Shares at the Class FA Conversion Rate, and the aggregate assets of the Company available for distribution, or the proceeds therefrom, shall be distributed to the holders of Class A Shares, in accordance with their Percentage Interests (after accounting for all converted Class T Shares, Class D, Class I Shares and Class FA Shares).

(b)Conversion of Class T Shares. Each Class T Share held in a Member's Account shall automatically and without any action on the part of the holder thereof convert into such number of Class A Shares equal to the product of each Class T Share to be converted and a fraction, the numerator of which is the Class T Net Asset Value Per Share and the denominator of which is the Class A Net Asset Value Per Share (the “Class T Conversion Rate”), on the earlier of (a) a Listing of the Class A Shares, (b) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of the Company's assets; (c) after the termination of the Primary Offering in which the initial Class T Shares in the Account were sold, the end of the month in which Total Company-Level Underwriting Compensation in such Primary Offering is not less than 10% of the Gross Proceeds of that Primary Offering, as calculated by the Company with the assistance of the Managing Dealer; and (d) the end of the month in which the Total Share-Level Underwriting Compensation paid in a Primary Offering with respect to all Class T Shares held by such Member within such Account and purchased in such Primary Offering (including Shares purchased through a Reinvestment Plan or received as stock dividends) is not less than 8.5% of the aggregate total of the non-discounted offering price at the time of purchase of each of such Class T Shares purchased in such Primary Offering.

(c)Conversion of Class D Shares. Each Class D Share held in a Member's Account shall automatically and without any action on the part of the holder thereof convert into such number of Class A Shares equal to the product of each Class D Share to be converted and a fraction, the numerator of which is the Class D Net Asset Value Per Share and the denominator of which is the Class A Net Asset Value Per Share (the “Class D Conversion Rate”), on the earlier of (a) a Listing of the Class A Shares, a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of the Company's assets; (c) after the termination of the Primary Offering in which the initial Class D Shares in the Account were sold, the end of the month in which Total Company-Level Underwriting Compensation in such Primary Offering is not less than 10% of the Gross Proceeds of such Primary Offering, as calculated by the Company with the assistance of the Managing Dealer; and (d) the end of the month in which the Total Share-Level Underwriting Compensation paid in a Primary Offering with respect to all Class D Shares held by such stockholder within such Account and purchased in such Primary Offering (including Shares purchased through a Reinvestment Plan or received as stock dividends) is not less than 8.5% of the aggregate total of the non-discounted offering price at the time of purchase of each of such Class D Shares purchased in such Primary Offering.

(d)Conversion of Class FA Shares. Each Class FA Share held in a Member's Account shall automatically and without any action on the part of the holder thereof convert into such number of Class A Shares equal to the product of each Class FA Share to be converted and a fraction, the numerator of which is the Class FA Net Asset Value Per Share and the denominator of which is the Class A Net Asset Value Per Share (the “Class FA Conversion Rate”), on the earlier of (a) a Listing

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of the Class A Shares and (b) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of the Company's assets.

(e)Conversion of Class I Shares. Each Class I Share held in a Member's Account shall automatically and without any action on the part of the holder thereof convert into such number of Class A Shares equal to the product of each Class I Share to be converted and a fraction, the numerator of which is the Class I Net Asset Value Per Share and the denominator of which is the Class A Net Asset Value Per Share (the “Class I Conversion Rate”), on the earlier of (a) a Listing of the Class A Shares and (b) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of the Company's assets.

Section 7.5Capital Contribution by Initial Members. CSCM shall, as of the date hereof, make or have made an aggregate initial cash Capital Contribution to the Company of $1,000 and has no obligation to make any further Capital Contributions to the Company, except that each of CSCM and LLSC or its respective Affiliates will contribute in exchange for Class A or Class FA Shares an additional $2,500,000, respectively, in aggregate before accepting Capital Contributions from non-affiliated Members in the Private Placement or if earlier, an Initial Public Offering; provided, however, that such Capital Contribution by LLSC may be an in-kind property contribution.

Section 7.6Additional Capital Contributions. No Member shall be required to make any Capital Contribution in addition to the purchase price paid for such Member's Shares pursuant to an Offering. No Shares shall be sold on a deferred-payment basis.

Section 7.7Capital Contributions by New Members. The Directors are authorized and directed to raise capital for the Company as may be provided in each of the Company’s Offering Memorandum and the Company’s Prospectus by offering and selling Shares to Members as follows:

(a)In connection with the Company’s Private Placement (and except as may otherwise be provided in the Company’s Offering Memorandum):

(i)Each Class FA Share shall initially be issued for a purchase price of $25.00, subject to certain possible discounts until such time as the Board of Directors adjusts such purchase price; and

(ii)Each Class A Share shall initially be issued for a purchase price of $27.32, subject to certain possible discounts until such time as the Board of Directors adjusts such purchase price.

(iii)Except as set forth below the initial minimum purchase of Shares in the Private Placement shall be $50,000 in Class FA Shares or $25,000 in Class A Shares, as applicable, (or such (x) greater minimum number as may be required under applicable state or federal laws or (y) lesser amount as CSCM may permit in its sole discretion) per Member (including subscriptions from entities which such Member is the sole beneficial owner) and any additional purchases of Shares shall be $500 (or such greater minimum number as may be required under applicable state or federal laws) per Member (including subscriptions

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from entities of which such Member is the sole beneficial owner). The minimum offering requirement for Class FA Shares is $80,000,000.

(b)In connection with the Initial Public Offering:

(i)Each Class A Share, Class T Share, Class D and Class I Share shall initially be issued at the prices set forth in the Company’s Prospectus, subject to certain possible discounts until such time as the Board of Directors adjusts such purchase price.

(ii)Except as set forth below or in any Prospectus of the Company, the initial minimum purchase of Shares in the Initial Public Offering shall be $5,000 (or such (x) greater minimum number as may be required under applicable state or federal laws or (y) lesser amount as CSCM may permit in its sole discretion) per Member (including subscriptions from entities of which such Member is the sole beneficial owner) and any additional purchases of Shares shall be $500 (or such greater minimum number as may be required under applicable state or federal laws) per Member (including subscriptions from entities of which such Member is the sole beneficial owner). Notwithstanding the foregoing, the provisions set forth above relating to the minimum number of Shares which may be purchased shall not apply to purchases of Shares pursuant to the Reinvestment Plan.

(c)The Board of Directors may accept subscriptions for fractional Shares.

(d)The Board of Directors may refuse to accept subscriptions for Shares and contributions tendered therewith for any reason whatsoever.

(e)Each Share sold to a subscriber shall be fully paid and nonassessable.

(f)The Board of Directors are further authorized to cause the Company to issue additional Shares of any class or series to Members pursuant to the terms of this Agreement, including pursuant to any plan of merger, plan of exchange or plan of conversion adopted by the Company.

Section 7.8Public Offerings. Except as otherwise provided in this Agreement, the Board of Directors shall have sole and complete discretion in determining the terms and conditions of the offer and sale of Shares and are hereby authorized and directed to do all things which the Board of Directors deems to be necessary, convenient, appropriate and advisable in connection therewith, including the preparation of the Company’s Offering Memorandum, the preparation and filing of a Registration Statement with the Commission and the securities commissioners (or similar agencies or officers) of such jurisdictions as the Board of Directors shall determine, and the execution or performance of agreements with selling agents and others concerning the marketing of the Shares, all on such basis and upon such terms as the Board of Directors shall determine.

Section 7.9Minimum Capitalization.

(a)The Private Placement will terminate if the Company has not received and accepted subscriptions for the Minimum Offering for the Private Placement on or before the Minimum Offering Expiration Date for the Private Placement.

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(b)The Initial Public Offering will terminate if the Company has not received and accepted subscriptions for the Minimum Offering for the Initial Public Offering on or before the Minimum Offering Expiration Date for the Initial Public Offering.

Section 7.10Escrow Account.

(a)Subscriptions for Class FA Shares in the Private Placement will made through a capital commitment payable upon the Initial Closing for the Private Placement. Each subscriber for Class FA Shares will irrevocably commit to purchase its committed amount of Class FA Shares in the Initial Closing of the Private Placement. Such subscribers will be required to fund a purchase of the Class FA Shares up to the amount of their respective capital commitments upon delivery of a notice in connection with the Initial Closing of the Private Placement. Such capital call notice shall specify: (i) the amount of the capital call, (ii) the portion of the capital call amount to be paid by such subscriber, which will include the subscription amount and the number of Class FA Shares to be purchased by such subscriber, (iii) the date on which the capital call amount is due and (iv) the payee and the address to which to send the subscription proceeds. The Company will use its best efforts to deliver the capital call notice to each accepted subscriber at least ten (10) Business Days prior to the capital call date.

(b)Once an Initial Closing for the Private Placement occurs, subscriptions for the Class A shares, if any, shall be held in an escrow Account separate and apart from all other funds of the Company which account shall be invested in obligations of, or obligations guaranteed by, the United States government, or bank money-market accounts or certificates of deposit of national or state banks that have deposits insured by the Federal Deposit Insurance Corporation (including certificates of deposit of any bank acting as a depository or custodian for any such funds), which mature on or before the Minimum Offering Expiration Date for the Private Placement, unless such instrument cannot be readily sold or otherwise disposed of for cash by the Minimum Offering Expiration Date for the Private Placement without any dissipation of the subscription proceeds invested, all in the discretion of such escrow agent or agents appointed by the Board of Directors. All moneys tendered by Persons whose subscriptions are rejected shall be returned, without interest, to such Persons promptly after such rejection.

(c)In connection with an Initial Public Offering, until subscriptions for the Minimum Offering for the Initial Public Offering are received and accepted by the Board of Directors, or until the Minimum Offering Expiration Date for the Initial Public Offering, whichever first occurs, all subscription proceeds shall be held in an escrow account separate and apart from all other funds of the Company which account shall be invested in obligations of, or obligations guaranteed by, the United States government, or bank money-market accounts or certificates of deposit of national or state banks that have deposits insured by the Federal Deposit Insurance Corporation (including certificates of deposit of any bank acting as a depository or custodian for any such funds), which mature on or before the Minimum Offering Expiration Date for the Initial Public Offering, unless such instrument cannot be readily sold or otherwise disposed of for cash by the Minimum Offering Expiration Date for the Initial Public Offering without any dissipation of the subscription proceeds invested, all in the discretion of such escrow agent or agents appointed by the Board of Directors. All moneys tendered by Persons whose subscriptions are rejected shall be returned, without interest, to such Persons promptly after such rejection. If subscriptions for the Minimum Offering for the

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Initial Public Offering are not received and accepted before the Minimum Offering Expiration Date for the Initial Public Offering, those subscriptions and funds in escrow on such date shall be returned to the subscribers, together with any interest earned thereon.

(d)Notwithstanding the above, the escrow agreement shall be modified to reflect any particular requirements of federal law or any state in which the Shares are offered. The Company is authorized to enter into one or more escrow agreements on behalf of the Company in such form as is satisfactory to the Board of Directors reflecting the requirements of this Section 7.10 and containing such additional terms as are not inconsistent with this Section 7.10. Upon approval of subscriptions for Class A Shares in the Private Placement or satisfying the Minimum Offering for the Initial Public Offering requirement, as applicable, funds shall be released from escrow to the Company within approximately thirty (30) days and investors with subscription funds held in the escrow shall be admitted as Members as soon as practicable, but in no event later than ten (10) days after such release.

Section 7.11Admission of Members.

(a)No action or consent by any Members shall be required for the admission of Members to the Company.

(b)Private Placement Subscriptions. Subscriptions in connection with the Private Placement (i) for Class FA Shares will be accepted or rejected before the Initial Closing of the Private Placement and (ii) for Class A Shares subscriptions will be accepted or rejected within thirty (30) days of receipt of each completed Subscription Agreement by the Company and, if rejected, all funds held in escrow shall be returned to such subscribers and without deduction for any expenses within ten (10) Business Days from the date the subscription is rejected. Prior to satisfying the Minimum Offering requirement for the Private Placement, funds of subscribers for Class A Shares pursuant to the Offering shall be held in the escrow account described in Section 7.10 above. Such funds shall not be released from escrow, and no subscribers for Shares shall be admitted to the Company unless and until the receipt and acceptance by the Company. Any subscriber of Class A Shares shall be admitted as a Member no later than the last day of the calendar month following the date his or her subscription was accepted by the Company.

(c)Initial Public Offering Subscriptions. In connection with the Initial Public Offering subscriptions will be accepted or rejected within thirty (30) days of receipt of each completed Subscription Agreement by the Company and, if rejected, all funds shall be returned to such subscribers and without deduction for any expenses within ten (10) Business Days from the date the subscription is rejected. Prior to satisfying the Minimum Offering requirement for the Initial Public Offering, funds of subscribers for Shares pursuant to the Offering shall be held in the escrow account described in Section 7.10 above. Such funds shall not be released from escrow, and no subscribers for Shares shall be admitted to the Company unless and until the receipt and acceptance by the Company of the Minimum Offering for the Initial Public Offering. Any subscriber shall be admitted as a Member no later than the last day of the calendar month following the date his or her subscription was accepted by the Company.

(d)No Person who subscribes for Shares in the Offering shall be admitted as a Member who has not executed and delivered to the Company the Subscription Agreement specified in the

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Company’s Offering Memorandum or Prospectus, as applicable, together with such other documents and instruments as the Board of Directors may deem necessary or desirable to effect such admission. Subscription Agreements may be executed by Members via electronic means permitted under the requirements of the Uniform Electronic Transaction Act or equivalent similar state law or amendment regarding use of electronic signatures and the requirements of the Electronic Signatures in Global and National Commerce Act, as applicable.

(e)If any Person is admitted to the Company on any day other than the last day of a calendar month, then Profits, Losses, each item thereof and all other items of income, gain, loss, deduction and credit for the calendar month in which an admission of any new Limited Partner occurs shall be allocated among all the Partners including such new Limited Partner, in accordance with the principles described in Section 10.8 hereof. All distributions of with respect to which the Record Date is before the date of such admission shall be made solely to Members other than the new Member, and all distributions thereafter shall be made to all the Members including such new Member.

Section 7.12[Reserved]

Section 7.13Suitability Standards.

(a)The Company’s Offering Memorandum will set forth any applicable suitability standards in connection with the Private Placement

(b)Following the Commencement of the Initial Public Offering, the following provisions shall apply with respect to the purchase of Common Shares in a public offering:

(c)Subject to suitability standards established by individual states or any higher standards established by the Board of Directors to become a Member as disclosed in the Company’s Prospectus, each prospective Member shall represent to the Company, among other requirements as the Company may require from time to time:

(i)that such individual (or, in the case of sales to a fiduciary account, that the fiduciary account, the beneficiary or the donor or grantor who directly or indirectly supplies the funds to purchase the Shares if the donor or grantor is the fiduciary) has a minimum annual gross income of $70,000 and a Net Worth (excluding home, home furnishings and automobiles) of not less than $70,000; or

(ii)that such individual (or, in the case of sales to a fiduciary account, that the fiduciary account, the beneficiary or the donor or the grantor who directly or indirectly supplies the funds to purchase the Shares if the donor or grantor is the fiduciary) has a Net Worth (excluding home, home furnishings and automobiles) of not less than $250,000.

(d)The Company and each Person selling Shares on behalf of the Sponsor or the Company shall make every reasonable effort to determine that the purchase of Shares is a suitable and appropriate investment for each Member. In making this determination, the Sponsor or each Person selling Shares on behalf of the Company shall ascertain that the prospective Member:

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(i)meets the minimum income and Net Worth standards established for the Company;

(ii)can reasonably benefit from the Company based on the prospective Member's overall investment objectives and portfolio structure;

(iii)is able to bear the economic risk of the investment based on the prospective Member's overall financial situation; and

(iv)has apparent understanding of: (1) the fundamental risks of the investment; (2) the risk that the Member may lose the entire investment; (3) the lack of liquidity of the Shares; (4) the restrictions on transferability of the Shares; (5) the background and qualifications of the Sponsor or the Persons responsible for directing and managing the Company; and (6) the tax consequences of the investment. The Sponsor or each Person selling Shares on behalf of the Sponsor or the Company shall make this determination on the basis of information or representations it has obtained from a prospective Member. Relevant information for this purpose will include at least the age, investment objectives, investment experiences, income, Net Worth, financial situation, and other investments of the prospective Member, as well as any other pertinent factors. The Sponsor or each Person selling Shares on behalf of the Sponsor or the Company shall maintain records of the information used to determine that an investment in Shares is suitable and appropriate for a Member. The Sponsor or each Person selling Shares on behalf of the Sponsor or the Company shall maintain these records or copies of representations made for at least 6 years.

(e)Subject to certain individual state requirements or higher standards established by the Board of Directors from time to time, no Member will be permitted to make an initial investment in the Company in a public offering by purchasing a number of Shares valued at less than $5,000.

Section 7.14Repurchase of Shares. The Board of Directors may establish, from time to time, a Share Repurchase Program; provided, however, that such repurchase does not impair the capital or operations of the Company. The Sponsor, the Manager, the Directors or any Affiliate thereof may not receive any fees on the repurchase of Shares by the Company. The Company may, but shall not be obligated to, provide for redemption rights under the following circumstances: (a) death or legal incapacity of the Member, or (b) a substantial reduction in the Member's Net Worth or income provided that all of the following are met: (i) the Company has sufficient cash to make the purchase; (ii) the purchase will not be in violation of applicable legal requirements; and (iii) not more than 2.5% of the aggregate net asset value per calendar quarter (nor more than 10% of the aggregate net asset value per calendar year) of the Company’s outstanding Shares are transferred, as determined in accordance with the methodology specified in Treasury Regulations Section 1.7704-1(k). A penalty may be assessed on the redemption of Shares if the penalty accrues to the benefit of the Company. Such Share Repurchase Program may be amended, suspended or terminated at any time in the discretion of the Board of Directors.

Section 7.15Distribution Reinvestment Plans. The Board of Directors may establish, from time to time, a distribution reinvestment plan or plans (a “Reinvestment Plan”) which may be amended, suspended or terminated at any time in the discretion of the Board of Directors. Following the Commencement of the Initial Public Offering, if the Reinvestment Plan allows Members to

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reinvest in additional Shares in the Company, the following conditions shall be met: (i) the offering of the Company in which the Members reinvest is registered or exempted under applicable state securities laws; (ii) no Selling Commissions, Placement Agent fees or Managing Dealer fees shall be deducted directly or indirectly from the reinvested funds by the Sponsor; (iii) the Members are free to elect or revoke reinvestment within a reasonable time and such right is fully disclosed in the offering documents; and (iv) the Members shall have received a Prospectus of the Company prior to initial enrollment. Following the Commencement of the Initial Public Offering, if the Reinvestment Plan allows Members to invest in a Program other than the Company, the following conditions shall be met: (i) the offering of the Program in which the Members reinvest is registered or exempted under applicable state securities laws; (ii) no Selling Commissions or fees shall be deducted directly or indirectly from the reinvested funds by the Sponsor; (iii) the Program in which the Members reinvest has substantially identical investment objectives as the Company; (iv) the Members are free to elect or revoke reinvestment within a reasonable time and such right is fully disclosed in the offering documents; (v) the Members shall have received a Prospectus of the Company, which is current as of the date of each such reinvestment; and (vi) a broker-dealer or the issuer assumes responsibility for blue sky compliance and performance of due diligence responsibilities and has contacted the Members to ascertain whether the Members continue to meet the applicable states' suitability standard for participation in each reinvestment. Members participating in a Reinvestment Plan will be treated for U.S. federal income tax purposes as receiving all cash distributions reinvested in Shares pursuant to the Reinvestment Plan.

Section 7.16Assessments. Mandatory Assessments of any kind shall be prohibited.

ARTICLE VIII

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS

Section 8.1Company Capital. No Member shall be paid interest on any Capital Contribution to the Company or on such Member's Capital Account, and no Member shall have any right (i) to demand the return of such Member's Capital Contribution or any other distribution from the Company (whether upon resignation, withdrawal or otherwise), except upon dissolution of the Company pursuant to Section 19.3 hereof, (ii) to cause a partition of the Company's assets, or (iii) to own or use any particular or individual assets of the Company.

Section 8.2Establishment and Determination of Capital Accounts. A capital account (“Capital Account”) shall be established for each Member. The Capital Account of the Member shall consist of such Member's initial Capital Contribution and shall be (i) increased by (a) any additional Capital Contributions (net, in the case of a contribution of property, of liabilities secured by such contributed property that the Company assumes or takes subject to) made by such Member pursuant to the terms of this Agreement, (b) the amount of any Company liabilities that are assumed by such Member, and (c) such Member's share of Profits allocated to such Member pursuant to Section 9.3, (ii) decreased by (a) such Member's share of Losses allocated to such Member pursuant to Section 9.3 and (b) any Distributions (other than deemed distributions pursuant to Section 9.2(a)(ii)) to such Member (net, in the case of a distribution of property, of liabilities assumed by such Member and liabilities to which such property is subject) distributed to such Member and (iii) adjusted as otherwise required by the Code and Treasury Regulations, including the rules of Treasury Regulations Section 1.704‑1(b)(2)(iv). Any references in this Agreement to the Capital

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Account of a Member shall be deemed to refer to such Capital Account as the same may be increased or decreased from time to time as set forth above.

Section 8.3Computation of Amounts. For purposes of computing the amount of any item of income, gain, loss, deduction or expense to be reflected in Capital Accounts, the determination, recognition and classification of each such item shall be the same as its determination, recognition and classification for federal income tax purposes; provided that:

(a)any income that is exempt from federal income tax shall be added to such taxable income or losses;

(b)any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704‑1(b)(2)(iv)(i), shall be subtracted from such taxable income or losses;

(c)if the Book Value of any Company property is adjusted pursuant to Treasury Regulations Section 1.704‑1(b)(2)(iv)(e) (in connection with a distribution of such property) or Treasury Regulations Section 1.704‑1(b)(2)(iv)(f) (in connection with a revaluation of Capital Accounts), then the amount of such adjustment shall be taken into account as gain or loss from the disposition of such property;

(d)if property that is reflected on the books of the Company has a Book Value that differs from the adjusted tax basis of such property, then depreciation, amortization and gain or loss with respect to such property shall be determined by reference to such Book Value; and

(e)the computation of all items of income, gain, loss, deduction and expense shall be made without regard to any election pursuant to Section 754 of the Code that may be made by the Company, unless the adjustment to basis of Company property pursuant to such election is reflected in Capital Accounts pursuant to Treasury Regulations Section 1.704‑l(b)(2)(iv)(m).

Section 8.4Negative Capital Accounts. No Member shall be required to pay to the Company or any other Member any deficit or negative balance which may exist from time to time in such Member's Capital Account.

Section 8.5Adjustments to Book Value. The Company shall adjust the Book Value of its assets to fair market value in accordance with Treasury Regulations Section l.704‑l(b)(2)(iv)(f) as of the following times: (a) at the Board of Directors' discretion, in connection with the issuance of Membership Interests in the Company and the computation of Company NAV; (b) at the Board of Directors' discretion, in connection with the Distribution by the Company to a Member of more than a de minimis amount of Company assets, including cash, if as a result of such Distribution, such Member's interest in the Company is reduced (including a redemption); and (c) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704‑1 (b)(2)(ii)(g). Any such increase or decrease in Book Value of an asset made pursuant to Section 8.5(a) or (b) shall, as a matter of administrative convenience, occur on a monthly basis to take into consideration the contributions by and distributions to Members over the course of a given month. Furthermore, any such increase or decrease in Book Value of an asset shall be allocated as a Profit or Loss to the

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Capital Accounts of the Members under Section 9.3 (determined immediately prior to the issuance of the new Membership Interests or the distribution of assets in an ownership reduction transaction).

Section 8.6Compliance With Treasury Regulations Section 1.704‑1(b). The provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704‑1(b), and shall be interpreted and applied in a manner consistent with such Treasury Regulations. If the Board of Directors determines that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or any Member), are computed in order to comply with such regulation, the Board of Directors may make such modification; provided that it is not likely to have a material effect on the amount distributable to any Member pursuant to Section 9.2 on the dissolution of the Company. The Board of Directors also shall (a) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of Company capital reflected on the Company's balance sheet, as computed for book purposes, in accordance with Treasury Regulations Section 1.704‑1(b)(2)(iv)(g), and (b) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704‑1(b).

Section 8.7Transfer of Capital Accounts. The original Capital Account established for each substituted Member shall be in the same amount as the Capital Account of the Member (or portion thereof) to which such substituted Member succeeds, at the time such substituted Member is admitted to the Company. The Capital Account of any Member whose interest in the Company shall be increased or decreased by means of the transfer of Membership Interests to or from such Member shall be appropriately adjusted to reflect such transfer. Any reference in this Agreement to a Capital Contribution of or Distribution to a Member that has succeeded any other Member shall include any Capital Contributions or Distributions previously made by or to the former Member on account of the Membership Interests of such former Member transferred to such Member.

ARTICLE IX

DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES

Section 9.1Generally. Subject to the provisions of Section 18‑607 of the Act, the Board of Directors shall have sole discretion regarding the amounts and timing of distributions to Members, in each case subject to the retention of, or payment to third parties of, such funds or reserves as it deems necessary with respect to anticipated business needs of the Company which shall include (but not by way of limitation) the payment or the making of provision for the payment when due of Company obligations, including the payment of any management or administrative fees and expenses or any other obligations.

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Section 9.2Distributions.

(a)From time to time and not less than monthly, the Board of Directors shall review the Company’s accounts to determine whether the Company has available cash which is not necessary to retain and can be distributed to its Members. The Board of Directors shall cause the Company to set aside adequate reserves for normal replacements and contingencies (but not for the payment of fees payable to the Manager). The Company shall make Distributions to the Members pursuant to this Section 9.2(a) as follows:

(i)First, subject to the rights of any holders of Preferred Shares specified in any Share Designation, distributions shall be allocated among the Class A Shares, the Class T Shares, the Class I Shares, the Class D and the Class FA Shares (as well as any subsequently authorized Class) pro rata in proportion to the outstanding shares of each Class, if any;

(ii)Second, the Distributions allocable to any given Class pursuant to Section 9.2(a)(i) shall be distributed among the respective holders of Shares of such Class pro rata based on their Percentage Interests of such Class (with (x) the amount of the Distribution Fee payable by the Company with respect to Class T Shares being deducted from the Distributions available to Class T Shares pursuant to Section 9.2(a)(i) and reserved by the Company for payment or paid by the Company to the Managing Dealer which amounts shall be deemed distributed to such holders of Class T Shares, (y) the amount of the Distribution Fee payable by the Company with respect to Class D Shares being deducted from the Distributions available to Class D Shares pursuant to Section 9.2(a)(i) and reserved by the Company for payment or paid by the Company to the Managing Dealer which amounts shall be deemed distributed to such holders of Class D Shares and (z) the amount of the Management Fee and Incentive Fee payable by the Company with respect to each Class of Shares being deducted from the Distributions available to each such Class of Shares pursuant to Section 9.2(a)(i) and reserved by the Company for payment or paid by the Company to the Manager).

(b)Following the Commencement of the Initial Public Offering, the Company will make no Distributions of in-kind property except for Distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for the dissolution of the Company or Distributions in connection with the liquidation of the assets in accordance with the terms of this Agreement unless: (i) the Board of Directors advises each Member of the risks associated with direct ownership of the property, (ii) the Board of Directors offers each Member the election of receiving in-kind property Distributions, and (iii) the Company distributes in-kind property only to those Members who accept such offer by the Board of Directors. A Member, regardless of the nature of the Member’s Capital Contribution, has no right to demand and receive any distribution from the Company in any form other than money.

Section 9.3Allocation of Profit and Loss.

(a)For each Accounting Period of the Company, (i) after adjusting each Member's Capital Account for all special allocations pursuant to Section 9.3(b) and Section 9.4 and (ii) subject to the rights of any holders of Preferred Shares specified in any Share Designation, all Profits and Losses (other than Profits and Losses (or items thereof) specially allocated pursuant to Section

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9.3(b) or Section 9.4) shall be allocated to the Members' Capital Accounts pro rata in accordance with their Percentage Interests. Notwithstanding the foregoing, the Board of Directors may make such allocations as it deems necessary to give economic effect to Section 9.2 and Section 19.3(c)(v), taking into account facts and circumstances as the Board of Directors deems reasonably necessary for this purpose, including the timing and amounts of distributions pursuant to Section 9.2, if any.

(b)Distribution Fees, Management Fees and Incentive Fees shall be allocated to the Classes of Shares in accordance with how such fees are attributable to particular Classes of Shares as determined by the Board of Directors.

Section 9.4Special Allocations. Notwithstanding the provisions of Section 9.3:

(a)Nonrecourse Deductions shall be allocated to the Members, pro rata in proportion to the value of their respective interests in the Company, as determined by the Board of Directors. If there is a net decrease in Company Minimum Gain during any taxable year, each Member shall be specially allocated items of taxable income or gain for such taxable year (and, if necessary, subsequent taxable years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704‑2(g) (subject to the exceptions thereunder). The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704‑2(f)(6). This paragraph is intended to comply with the minimum gain chargeback requirements in Treasury Regulations Section 1.704‑2(f) and shall be interpreted consistently therewith.

(b)Member Nonrecourse Deductions shall be allocated in the manner required by Treasury Regulations Section 1.704‑2(i). Except as otherwise provided in Treasury Regulations Section 1.704‑2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any taxable year, each Member that has a share of each Member Nonrecourse Debt Minimum Gain shall be specially allocated items of taxable income or gain for such taxable year (and, if necessary, subsequent taxable years) in an amount equal to that Member's share of the net decrease in Member Nonrecourse Debt Minimum Gain (subject to the exceptions thereunder). Items to be allocated pursuant to this paragraph shall be determined in accordance with Treasury Regulations Sections 1.704‑2(i)(4) and 1.704‑2(j)(2). This paragraph is intended to comply with the minimum gain chargeback requirements in Treasury Regulations Section 1.704‑2(i)(4) and shall be interpreted consistently therewith.

(c)If any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Section 1.704‑l(b)(2)(ii)(d)(4), (5) or (6), items of taxable income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit (determined according to Treasury Regulations Section 1.704‑1(b)(2)(ii)(d)) created by such adjustments, allocations or distributions as quickly as possible. This paragraph is intended to comply with the qualified income offset requirements in Treasury Regulations Section 1.704‑1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

(d)No allocation of Loss shall be made pursuant to Section 9.3 to the extent that it causes or increases a deficit balance in any Member's Adjusted Capital Account. To the extent any allocation of Loss would cause the Adjusted Capital Account balance of any of the Members to have a deficit

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balance, such Loss shall be allocated to the Members with positive balances in their Adjusted Capital Accounts in proportion with such relative positive Adjusted Capital Account balances.

(e)The allocations set forth in paragraphs (a), (b), (c) and (d) above (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations under Code Section 704.

(f)To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, 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 item of 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 Section of the Treasury Regulations.

Each Member hereby agrees to provide the Company with all information necessary to give effect to an election made under Section 754 of the Code if the Board of Directors determines to make such an election; provided, that the cost associated with such an election shall be borne by the Company as a whole. With respect to such election:

(i)Any change in the amount of the depreciation deducted by the Company and any change in the gain or loss of the Company, for federal income tax purposes, resulting from an adjustment pursuant to Section 743(b) of the Code shall be allocated entirely to the transferee of the Shares so transferred. Neither the Capital Contribution obligations of, nor the Membership Interest of, nor the amount of any cash distributions to, the Members shall be affected as a result of such election, and except as provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(m), the making of such election shall have no effect except for federal and (if applicable) state and local income tax purposes.

(ii)Solely for federal and, if applicable, state and local income tax purposes and not for the purpose of maintaining the Members' Capital Accounts (except as provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(m)), the Company shall keep a written record for those assets, the bases of which are adjusted as a result of such election, and the amount at which such assets are carried on such record shall be debited (in the case of an increase in basis) or credited (in the case of a decrease in basis) by the amount of such basis adjustment. Any change in the amount of the depreciation deducted by the Company and any change in the gain or loss of the Company, for federal and (if applicable) state and local income tax purposes, attributable to the basis adjustment made as a result of such election shall be debited or credited, as the case may be, on such record.

(g)Notwithstanding any other provisions of this Section 9.4 (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating Profits and Losses among Members so that, to the extent possible, the net amount of such allocations of Profits and Losses and other items and the Regulatory Allocations (including Regulatory Allocations that, although not yet made, are expected to be made in the future) to each Member shall be equal to the net amount that would have been allocated to each Member if the Regulatory Allocations had not occurred.

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Section 9.5Amounts Withheld. All amounts withheld pursuant to Section 9.11 from any distribution to a Member or otherwise withheld or paid with respect to a Member by the Company or withheld from any payment to the Company shall be treated as amounts distributed to such Member pursuant to Section 9.2 for all purposes under this Agreement. Notwithstanding the preceding sentence, if any amount required to be withheld or paid with respect to a Member is not associated with a distribution to or by the Company or there are insufficient distributable amounts to pay the withholding taxes with respect to such Member, the Board of Directors is authorized in its sole discretion to treat such amount (or balance, as applicable) as a loan, which loan shall bear interest at a rate reasonably determined by the Board of Directors if not repaid within ten (10) days of notice from the Company. Each Member agrees to indemnify and hold harmless the Company from and against any liability with respect to its allocable share of any taxes withheld pursuant to Section 9.11.

Section 9.6Tax Allocations: Code Section 704(c).

(a)The income, gains, losses, deductions and expenses of the Company shall be allocated, for federal, state and local income tax purposes, among the Members in accordance with the allocation of such income, gains, losses, deductions and expenses among the Members for computing their Capital Accounts, except that if any such allocation is not permitted by the Code or other applicable law, the Company's subsequent income, gains, losses, deductions and expenses shall be allocated among the Members so as to reflect as nearly as possible the allocations set forth herein in computing their Capital Accounts.

(b)In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income, gain, loss, deduction and expense with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value at the time of contribution using any reasonable method (including the “Traditional Method”) provided for in the Treasury Regulations as selected by the Board of Directors in its sole discretion.

(c)If the Book Value of any Company asset is adjusted pursuant to Section 8.5, subsequent allocations of items of taxable income, gain, loss, deduction and expense with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c). Any elections or other decisions relating to such allocations shall be made by the Board of Directors in any manner that reasonably reflects the purpose and intent of this Agreement. Allocations pursuant to this Section 9.6 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 Profits, Losses, other items or Distributions pursuant to any provisions of this Agreement.

(d)Notwithstanding the foregoing provisions of this Agreement, the Board of Directors in its sole discretion shall make such allocations as may be needed to ensure that allocations are in accordance with the interests of the Members, within the meaning of the Code and Treasury Regulations. The Board of Directors shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion. Notwithstanding anything to the contrary contained in this Agreement, the proper administration of the Company and for preservation

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of uniformity of Shares within a particular class or series (i.e., Class A Shares, Class T Shares, Class I Shares, Class D Shares and Class FA Shares), the Board of Directors may (i) amend the provisions of this Agreement as appropriate (1) to reflect the proposal or promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (2) otherwise to preserve or achieve uniformity of Shares within each respective class or series, and (ii) adopt and employ or modify such conventions and methods the Board of Directors determines in its sole discretion to be appropriate for (1) the determination of each item of income, gain, loss or deduction of the Company and the allocation of such items among Members and between transferors and transferees under this Agreement pursuant to the Code and Treasury Regulations promulgated thereunder, including without limitation adopting a monthly or weekly convention, (2) the determination of the identities and tax classifications of Members, (3) the valuation of the Company’s assets and the determination of tax basis, (4) the allocation of asset values and tax basis, (5) the adoption and maintenance of accounting methods, and (6) taking into account differences between the Book Values of the assets of the Company and adjusted tax basis pursuant to Section 704(c) of the Code and the Treasury Regulations promulgated thereunder.

Section 9.7Preparation of Tax Returns. The Board of Directors shall arrange for the preparation and timely filing of all returns with respect to Company income, gains, deductions, losses and other items required of the Company for federal and state income tax purposes and shall use all reasonable effort to furnish the tax information reasonably required by Members for federal and state income tax reporting purposes pursuant to Section 12.3.

Section 9.8Tax Elections. Except as otherwise provided herein, the Board of Directors shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code. The Board of Directors shall have the right to seek to revoke any such election upon the Board of Directors' determination in its sole and absolute discretion that such revocation is in the best interests of the Members.

Section 9.9Tax Matters.

(a)CSCM is designated the “tax matters partner” as defined in Section 6231(a)(7) of the Code with respect to operations conducted by the Company pursuant to this Agreement for taxable years of the Company beginning before January 1, 2018 and the “partnership representative” as defined in Section 6223 of the Code for taxable years of the Company beginning after December 31, 2017 (the tax matters partner and the partnership representative are collectively referred to herein as the “Tax Matters Partner”). The Tax Matters Partner is authorized and required to represent the Company (at the expense of the Company) in connection with all examinations of the affairs of the Company by any U.S. federal, state or local tax authorities, including any resulting administrative and judicial proceedings, and to expend funds of the Company for professional services and costs associated therewith. The Tax Matters Partner shall furnish the Members and any former Members that were members in the Company during the reviewed taxable year with status reports regarding any negotiation between the Internal Revenue Service (or any relevant state or local taxing authority) and the Company. As the Tax Matters Partner, CSCM may cause the Company to make all elections required or permitted to be made by the Company under the Code or any state or local tax law, including the election under Section 6226 of the Code applicable to taxable years of the Company beginning after December 31, 2017. In exercising its responsibilities as Tax Matters

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Partner, CSCM shall have final decision making authority with respect to all federal, state, local, and foreign tax matters involving the Company, but may in its discretion seek the approval of Members and former Members that were members in the Company during the reviewed taxable year to contest a partnership adjustment in respect of a taxable year of the Company beginning after December 31, 2017. Any expenses incurred by the Tax Matters Partner in carrying out its responsibilities and duties under this Agreement shall be allocated to and charged to the Company as an expense of the Company for which the Tax Matters Partner shall be reimbursed.

(b)Each Member shall give prompt notice to the Tax Matters Partner of any and all notices it receives from the Internal Revenue Service or any relevant state or local taxing authority concerning the Company and its federal, state or local income tax return. The Members shall, upon request by the Tax Matters Partner, notify the Tax Matters Partner of their treatment of any Company item on their federal income tax return, if applicable, which is or may be inconsistent with the treatment of that item on the Company's return. Any Member who enters into a settlement agreement with the Internal Revenue Service with respect to Company items shall notify the Tax Matters Partner of such settlement agreement and its terms within thirty (30) days after the date of such settlement.

(c)The Tax Matters Partner shall use its commercially reasonable efforts to minimize the financial burden of any partnership adjustment to each Member and former Member that held Shares during the reviewed taxable year, through the application of the procedures established pursuant to Section 6225(c) of the Code, or through an election and the furnishing of statements pursuant to Section 6226 of the Code, in each case as applicable to taxable years beginning after December 31, 2017.

(d)Each Member and former Member agrees to indemnify and hold harmless the Company from and against any liability for any “imputed underpayment” as defined in Section 6225 of the Code (including any interest and penalties) (and any similar provision of state or local law) imposed on the Company and attributable to such Member's allocable share of any adjustment to an item of income, gain, loss, deduction or credit, in any taxable year of the Company in which such Member or former Member was a member, as determined by the Board of Directors in its discretion.  Each Member agrees to reimburse the Tax Matters Partner and the Company for the costs of the Tax Matters Partner and the Company in contesting the partnership adjustment, and to advance any deposit required to contest such partnership adjustment, in accordance with the interests of the Members and former Members in the Company during the reviewed taxable year, as determined by the Board of Directors in its discretion.

(e)The obligations of this Section 9.9 shall survive the transfer or assignment of Shares, the withdrawal of any Member, and the termination of the Company and this Agreement.

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Section 9.10Tax Classification. The Company shall be classified for U.S. federal income tax purposes as a partnership and not as an association or a publicly traded partnership taxable as a corporation.

Section 9.11Withholding. Each Member hereby authorizes the Company to withhold from or pay on behalf of or with respect to such Member any amount of federal, state, local or foreign taxes that the Board of Directors determines, in its sole and absolute discretion, that the Company is required to withhold or pay with respect to any amount distributable to such Member pursuant to this Agreement, including any taxes required to be withheld or paid by the Company pursuant to sections 1441, 1442, 1445, 1446, 1471 or 1472 of the Code.

Section 9.12FATCA Information. Each Member agrees to timely provide to the Company such information (and, in the case of any non-natural Member, such Member will seek to obtain from its owners, beneficiaries, or account holders, and to provide to the Company, such information) and to take such actions as may be necessary (in the reasonable discretion of the Company) (i) for the purpose of obtaining any exemption, reduction or refund of any withholding or other taxes imposed by any taxing authority or other governmental agency (including amounts required to be withheld by the Company or any of its subsidiaries under Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code), and (ii) to comply with Company’s obligation under any automatic exchange of information law, common reporting standards requirements, or other similar law. The Members acknowledge and agree that the Company is authorized to disclose such information to any governmental authority as the Company determines it is sole discretion as is necessary to comply with such laws.

ARTICLE X

RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

Section 10.1Withdrawal of a Member. A Member may withdraw from the Company only by Assigning his or her Shares in accordance with this Article X or having all of his or her Shares redeemed or repurchased in accordance with a Share Repurchase Program, if any. The withdrawal of a Member shall not dissolve or terminate the Company. In the event of the withdrawal of any such Member because of death, legal incompetence, dissolution or other termination, the estate, legal representative or successor of such Member shall be deemed to be the Assignee of the Shares of such Member and may become a Substitute Member upon compliance with the provisions of Section 10.3.

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Section 10.2Assignment.

(a)Subject to the provisions of Sections 10.2(b), 10.2(c) and 10.3 of this Agreement, any Member may Assign all or any portion of the Shares owned by such Member to any Person (the “Assignee”); provided, that:

(i)such Member and such Assignee shall each execute a written Assignment instrument, which shall:

(A)set forth the terms of such Assignment;

(B)evidence the acceptance by the Assignee of all of the terms and provisions of this Agreement;

(C)include a representation by both such Member and such Assignee that such Assignment was made in accordance with all applicable laws and regulations (including such minimum investment and investor suitability requirements as may then be applicable under state securities laws); and

(D)otherwise be satisfactory in form to the Board of Directors.

(b)Notwithstanding the foregoing, unless the Board of Directors shall specifically consent, which consent shall not be unreasonably withheld, no Shares may be Assigned:

(i)to a minor or incompetent (unless a guardian, custodian or conservator has been appointed to handle the affairs of such Person);

(ii)to any Person if, in the opinion of counsel, such Assignment would result in the termination of the Company for federal income tax purposes; provided, however, that the Company may permit such Assignment to become effective if and when, in the opinion of counsel, such Assignment would no longer result in the termination of the Company for federal income tax purposes;

(iii)at all times prior to a Listing, to any Person if the Company determines that such transfer or Assignment would result in the Company being classified as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code;

(iv)to any Person if such Assignment would affect the Company's existence or qualification as a limited liability company under the Act or the applicable laws of any other jurisdiction in which the Company is then conducting business;

(v)to any Person not permitted to be an Assignee under applicable law, including applicable federal and state securities laws;

(vi)if such Assignment would result in the transfer of less than the minimum required Share purchase as described in the Company’s Prospectus, unless such Assignment is of all of the Shares owned by such Member;

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(vii)if such Assignment would result in the retention by such Member of less than the minimum required Share purchase as described in the Company’s Prospectus;

(viii)if, in the reasonable belief of the Board of Directors, such Assignment might violate applicable law; or

(ix)if the Assignment would cause the Shares to be owned by non‑United States citizens.

Any attempt to make any Assignment of Shares in violation of this Section 10.2(b) shall be null and void ab initio.

(c)Assignments made in accordance with this Section 10.2 shall be considered consummated on the last day of the month upon which all of the conditions of this Section 10.2 shall have been satisfied and effective for record purposes and for purposes of Article IX as of the first day of the month following the date upon which all of the conditions of this Section 10.2 shall have been satisfied. Distributions to the Assignee shall commence the month following effectiveness of the Assignment. The Company will not charge the Assigning Member for Assignments except for necessary and reasonable costs actually incurred by the Company.

(d)All Assignors shall have the same rights as if they were Members except as prohibited by applicable law. The assignment agreement and Prospectus of the Company shall provide that the Assignor's management, if applicable, shall have fiduciary responsibility for the safekeeping and use of all funds and assets of the Assignees, whether or not in the Assignor management's possession or control, and that the management of the Assignor shall not employ, or permit another to employ, such funds or assets in any manner except for the exclusive benefit of the Assignees. In addition, the agreement shall not permit the Assignees to contract away the fiduciary duty owed to the Assignees by the Assignor's management under the common law of agency.

Section 10.3Substitution.

(a)An Assignee shall be admitted to the Company as a Substitute Member only if:

(i)the Board of Directors has reasonably determined that all conditions specified in Section 10.2 have been satisfied and that no adverse effect to the Company does or may result from such admission; and

(ii)such Assignee shall have executed a transfer agreement and such other forms as the Board of Directors reasonably may require to determine compliance with this Section 10.3, and shall be deemed to have authorized and appointed with full power of substitution as its, his or her true and lawful agent and attorney-in-fact, with full power and authority in its, his or her name, place and stead, the Manager and the Company, and each of their authorized officers and attorneys-in-fact, as the case may be, to take such actions as set forth in Section 3.3.

(b)An Assignee who does not become a Substitute Member in accordance with this Section 10.3 and who desires to make a further Assignment of his or her Shares shall be subject to

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all the provisions of Sections 10.2, 10.3 and 10.4 to the same extent and in the same manner as a Member desiring to make an Assignment of Shares. Failure or refusal of the Board of Directors to admit an Assignee as a Substitute Member shall in no way affect the right of such Assignee to receive distributions of cash and the share of the Profits or Losses for tax purposes to which his or her predecessor in interest would have been entitled in accordance with Section 8.

Section 10.4Status of an Assigning Member. Any Member that shall Assign all of his or her Shares to an Assignee who becomes a Substitute Member shall cease to be a Member and shall no longer have any of the rights or privileges of a Member.

Section 10.5Further Restrictions on Transfers. Notwithstanding any provision to the contrary contained herein, the following restrictions shall also apply to any and all proposed sales, assignments and transfer of Membership Interests or Economic Interests, and any proposed sale, assignment or transfer in violation of same shall be void ab initio.

(a)No Member shall make any transfer or assignment of all or any part of his Membership Interest or Economic Interest if said transfer or assignment, when considered with all other transfers during the same applicable 12 month period, would, in the opinion of the Board of Directors, result in the termination of the Company's status as a partnership for federal or state income tax purposes.

(b)Following the Commencement of the Initial Public Offering, until the Common Shares are Listed, no Member shall make any transfer or assignment of all or any of his Membership Interest or Economic Interest unless the transferee (i) would have been qualified to purchase Shares in the Offering and (ii) acquires or holds at least 200 Shares.

(c)Each Member that is a legal entity (other than a Benefit Plan Investor) acknowledges that its management shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of any assignee to all or a portion of its interest as a Member, and that the management of each Member that is a legal entity (other than a Benefit Plan Investor) shall not employ, or permit another to employ such funds or assets that are attributable to any assignee of all or a portion of such Member's interest as a Member in any manner except for the exclusive benefit of the assignee. Each Member, other than a Benefit Plan Investor, agrees that it will not contract away the foregoing fiduciary duty.

(d)The provisions of this Article X are in all respects subject to the additional restrictions on the transfer and ownership of Shares provided in Article XI of this Agreement.

Section 10.6Elimination or Modification of Restrictions. Notwithstanding any of the foregoing provisions of this Article X, the Board of Directors shall amend this Agreement to eliminate or modify any restriction on substitution or assignment at such time as the restriction is no longer necessary or advisable.

Section 10.7Records. The Membership List shall be updated to reflect Assignees' admission as Members no less than once each calendar quarter.

Section 10.8Monthly Allocation Convention. If any Shares are transferred in

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compliance with the provisions of this Article X, or is redeemed by the Company pursuant to Section 7.14 hereof, on any day other than the last day of a calendar month, then Profits, Losses, each item thereof and all other items of income, gain, loss, deduction and credit attributable to such Shares for such month shall be allocated to the transferor Member. All distributions attributable to such Shares with respect to which the Record Date is before the date of such transfer, assignment or redemption shall be made to the transferor Member, and, in the case of a transfer other than a redemption, all distributions thereafter attributable to such Shares shall be made to the transferee Member.

ARTICLE XI

MEMBERS, MEETINGS AND VOTING RIGHTS OF THE MEMBERS

Section 11.1Annual Meetings of Members. An annual meeting of the Members for the election of Directors and the transaction of any business within the powers of the Company shall be held on a date and at the time set by the Board of Directors.

Section 11.2Special Meetings of Members.

(a)General. The Chairman of the Board of Directors, the Vice-Chairman of the Board of Directors, the President, the Chief Executive Officer or the Board of Directors may call a special meeting of the Members.

(b)Member Requested Special Meetings.

(i)Any Record Holder seeking to have Members request a special meeting of Members shall, by sending written notice to the Secretary of the Company (the “Record Date Request Notice”) by registered mail, return receipt requested, request that the Board of Directors fix a record date to determine the Members entitled to request a special meeting of Members (the “Request Record Date”). The Record Date Request Notice shall set forth the purpose of the meeting and the matters proposed to be presented to Members for their consideration, shall be signed by one or more Record Holders as of the date of signature (or their agents duly authorized in a writing accompanying the Record Date Request Notice), shall bear the date of signature of each such Member (or such agent) and shall set forth all information relating to each such Member that must be disclosed in solicitations of proxies for election of Directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act. Upon receiving the Record Date Request Notice, the Board of Directors may fix a Request Record Date. The Request Record Date shall not precede and shall not be more than ten (10) days after the close of business on the date on which the resolution fixing the Request Record Date is adopted by the Board of Directors. If the Board of Directors, within ten (10) days after the date on which a valid Record Date Request Notice is received, fails to adopt a resolution fixing the Request Record Date, the Request Record Date shall be the close of business on the 10th day after the first date on which the Record Date Request Notice is received by the Secretary.

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(ii)A special meeting of Members to act on any matter that the Members are entitled to vote on pursuant to this Agreement shall be called by the Secretary of the Company upon the written request delivered to the Secretary of the Company of Record Holders (or their agents duly authorized in a writing accompanying the request) as of the Request Record Date entitled to cast not less than 10% (the “Special Meeting Percentage”) of all of the votes entitled to be cast at such meeting (the “Special Meeting Request”) at the time and place convenient for such Members. In addition, in order for the Secretary of the Company to be required to call a special meeting of Members, the Special Meeting Request shall (a) set forth the purpose of the meeting and the matters proposed to be presented to the Members for their consideration (which shall be limited to those matters specified in Section 11.22(a)), (b) bear the date of signature of each such Member (or such agent) signing the Special Meeting Request, (c) set forth the name and address, as they appear in the Company's books, of each Member signing such request (or on whose behalf the Special Meeting Request is signed), the class, series and number of all Shares of the Company which are owned by each such Member, and the nominee holder for, and number of, Shares owned by such Member beneficially but not of record, (d) be sent to the Secretary by registered mail, return receipt requested, and (e) be received by the Secretary within sixty (60) days after the Request Record Date. Any requesting Member (or agent duly authorized in a writing accompanying the revocation or Special Meeting Request) may revoke his, her or its request for a special meeting of Members at any time by written revocation delivered to the Secretary.

(iii)The Secretary shall inform the requesting Member of the reasonably estimated cost of preparing and mailing the notice of meeting (including the Company's proxy materials). The Secretary shall not be required to call a special meeting of Members upon Member request and such meeting shall not be held unless, in addition to the documents required by paragraph (2) of this Section 11.2(b), the Secretary on behalf of the Company receives payment of such reasonably estimated cost prior to the preparation and mailing of any notice of the meeting.

(iv)If Members representing the requisite Shares present to the Board of Directors a written request stating the purpose of the meeting, the Board of Directors shall fix a date for such meeting and shall, within ten (10) days after receipt of such request, provide written notice in accordance with Section 11.4 below to all of the Members of the date of such meeting and the purpose for which it has been called. With respect to a meeting duly requested by Members, such meeting shall be held at a date not less than 15 and not more than sixty (60) days after the Company's receipt of the Members' written request for the meeting, and, unless otherwise specified in the notice for such meeting, the meeting shall be held at 2:00 p.m. Eastern Time on such date at the principal place of business of the Company. At any meeting of the Company, Members may vote in person or by proxy. A Majority of the Members, present in person or by proxy, shall constitute a quorum at any meeting of Members. Any question relating to the Company which may be considered and acted upon by the Members hereunder may be considered and acted upon by vote at a meeting of Members, and any consent required to be in writing shall be deemed given by a vote by written ballot. Except as expressly provided above, additional meeting and voting procedures shall be in conformity with Section 18‑302 of the Act. In fixing a date for any special meeting of Members, the Chairman of the Board of Directors, the Vice-Chairman

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of the Board of Directors, President, Chief Executive Officer or Board of Directors may consider such factors as he, she or it deems relevant within the good faith exercise of business judgment, including the nature of the matters to be considered, the facts and circumstances surrounding any request for the meeting and any plan of the Board of Directors to call an annual meeting of Members or a special meeting of Members. The Board of Directors may revoke the notice for any special meeting of Members called by the Secretary upon the request of Members in the event that the requesting Members fail to comply with the provisions of this Section 11.2(b).

(v)If written revocations of requests for the special meeting of Members have been delivered to the Secretary and the result is that Members of record (or their agents duly authorized in writing), as of the Request Record Date, entitled to cast less than the Special Meeting Percentage have delivered, and not revoked, requests for a special meeting of Members to the Secretary, the Secretary shall: (i) if the notice of meeting has not already been mailed, refrain from mailing the notice of the meeting, or (ii) if the notice of meeting has been mailed, revoke the notice of the meeting at any time before ten (10) days before the commencement of the meeting. Any request for a special meeting of Members received after a revocation by the Secretary of a notice of a meeting shall be considered a request for a new special meeting of Members.

(vi)The Chairman of the Board of Directors, the Vice-Chairman of the Board of Directors, President or Board of Directors may appoint regionally or nationally recognized independent inspectors of elections to act as the agent of the Company for the purpose of performing a ministerial review of the validity of any purported Special Meeting Request received by the Secretary.

Section 11.3Place of Meeting. Subject to Section 11.2, all meetings of Members shall be held at the place designated by the Board of Directors and stated in the notice of the meeting.

Section 11.4Notice of Meeting. Not less than 15 nor more than sixty (60) days before each meeting of Members, the Secretary shall give to each Member entitled to vote at such meeting written notice stating the time, place and purpose of the meeting either in person, electronically, or by mail. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Member at the Member's address as it appears on the records of the Company, with postage thereon prepaid.

Subject to Section 11.10, any business of the Company may be transacted at an annual meeting of Members without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of Members except as specifically designated in the notice.

Section 11.5Record Date. The Board of Directors may set, in advance, a record date for the purpose of determining Members entitled to notice of or to vote at any meeting of Members or determining Members entitled to receive payment of any distribution or the allotment of any other rights, or in order to make a determination of Members for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than ninety (90) days and, in the case of a meeting of Members, not less than ten

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(10) days, before the date on which the meeting or particular action requiring such determination of Record Holders is to be held or taken.

Section 11.6Organization and Conduct. Every meeting of Members shall be conducted by an individual appointed by the Board of Directors to be chairman of the meeting or, in the absence of such appointment, by the Chairman of the Board of Directors or, in the case of a vacancy in the office or absence of the Chairman of the Board of Directors, by one of the following officers present at the meeting in the following order: the Vice-Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, the General Counsel, or the Secretary or, in the absence of such officers, a chairman chosen by the Members by the vote of a majority of the votes cast by Members present in person or by proxy. The order of business and all other matters of procedure at any meeting of Members shall be determined by the chairman of the meeting. The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of such chairman, are appropriate for the proper conduct of the meeting, including, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to Members that are Record Holders, their duly authorized proxies or other such individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to Members that are Record Holders entitled to vote on such matter, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments by participants; (e) determining when the polls should be opened and closed, (f) maintaining order and security at the meeting; (g) removing any Members or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; and (h) concluding the meeting or recessing or adjourning the meeting to a later date and time and place announced at the meeting.

Section 11.7Quorum. At any meeting of Members, the presence in person or by proxy of Members entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under applicable law for the vote necessary for the adoption of any measure. If, however, such quorum shall not be present at any meeting of the Members, the chairman of the meeting shall have the power (but shall not be required) to adjourn the meeting from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

The Members present either in person or by proxy, at a meeting which has been duly called and convened, may continue to transact business until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum.

Section 11.8Proxies. At all meetings of Members, a Member may vote by proxy as may be permitted by law; provided, that no proxy shall be voted after eleven months from its date. Any proxy to be used at a meeting of Members must be filed with the Secretary of the Company or his or her representative at or before the time of the meeting. A Member may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or a new proxy bearing a later date. The Board of Directors may adopt procedures with respect to the use of proxies at any meeting of Members.

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Section 11.9Voting of Shares by Certain Holders. Shares registered in the name of a corporation, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, a general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other Person who has been appointed to vote such Shares pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such Person may vote such Shares. Any Director or other fiduciary may vote Shares registered in his or her name as such fiduciary, either in person or by proxy.

Shares of the Company directly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding Shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding Shares at any given time.

The Board of Directors may adopt a procedure by which a Member may certify in writing to the Company that any Shares registered in the name of the Member are held for the account of a specified Person other than the Member.

Section 11.10Notice of Member Business and Nominations.

(a)Annual Meetings of Members.

(i)Nominations of individuals for election to the Board of Directors and the proposal of other business to be considered by the Members may be made at an annual meeting of Members (i) pursuant to the Company's notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any Member who was a Member of record both at the time of giving of notice by the Member as provided for in this Section 11.10(a) and at the time of the annual meeting, who is entitled to vote at the meeting and who has complied with this Section 11.10(a).

(ii)For nominations or other business to be properly brought before an annual meeting of Members by a Member pursuant to clause (iii) of paragraph (a)(1) of this Section 11.10, the Member must have given timely notice thereof in writing to the Secretary and such other business must otherwise be a proper matter for action by the Members. To be timely, a Member's notice shall set forth all information required under this Section 11.10 and shall be delivered to the Secretary at the principal executive office of the Company not earlier than the 150th day nor later than 5:00 p.m., Eastern Time on the 120th day prior to the first anniversary of the date of mailing of the notice for the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced or delayed by more than thirty (30) days from the first anniversary of the date of the preceding year's annual meeting, notice by the Member to be timely must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time on the later of the 120th day prior to the date of such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the

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giving of a Member's notice as described above. Such Member's notice shall set forth (i) as to each individual whom the Member proposes to nominate for election or reelection as a Director, (A) the name, age, business address and residence address of such individual, (B) the class, series and number of any Shares that are beneficially owned by such individual, (C) the date such Shares were acquired and the investment intent of such acquisition and (D) all other information relating to such individual that is required to be disclosed in solicitations of proxies for election of Directors in an election contest (even if an election contest is not involved), or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder (including such individual's written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); (ii) as to any other business that the Member proposes to bring before the meeting, a description of such business, the reasons for proposing such business at the meeting and any material interest in such business of such Member and any Member Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the Member and the Member Associated Person therefrom; (iii) as to the Member giving the notice and any Member Associated Person, the class, series and number of all Shares which are owned by such Member and by such Member Associated Person, if any, and the nominee holder for, and number of, Shares owned beneficially but not of record by such Member and by any such Member Associated Person; (iv) as to the Member giving the notice and any Member Associated Person covered by clauses (ii) or (iii) of this paragraph (2) of this Section 11.10(a), the name and address of such Member, as they appear on the Membership List and current name and address, if different, and of such Member Associated Person; and (v) to the extent known by the Member giving the notice, the name and address of any other Member supporting the nominee for election or reelection as a Director or the proposal of other business on the date of such Member's notice.

(iii)For purposes of this Section 11.10, “Member Associated Person” of any Member shall mean (i) any person controlling, directly or indirectly, or acting in concert with, such Member, (ii) any Owner of Shares owned of record or beneficially by such Member and (iii) any person controlling, controlled by or under common control with such Member Associated Person.

(b)Special Meetings of Members. Only such business shall be conducted at a special meeting of Members as shall have been brought before the meeting pursuant to the Company's notice of meeting. Nominations of individuals for election to the Board of Directors may be made at a special meeting of Members at which Directors are to be elected (i) pursuant to the Company's notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) provided that the Board of Directors has determined that Directors shall be elected at such special meeting, by any Member who is a Record Holder Member both at the time of giving of notice provided for in this Section 11.10 and at the time of the special meeting, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 11.10. In the event the Company calls a special meeting of Members for the purpose of electing one or more individuals to the Board of Directors, any such Member may nominate an individual or individuals (as the case may be) for

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election as a Director as specified in the Company's notice of meeting, if the Member's notice required by paragraph (2) of Section 11.10(a) shall be delivered to the Secretary at the principal executive office of the Company not earlier than the 150th day prior to such special meeting and not later than 5:00 p.m., Eastern Time on the later of the 120th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a Member notice as described above.

(c)General.

(i)Upon written request by the Secretary or the Board of Directors or any committee thereof, any Member proposing a nominee for election as a Director or any proposal for other business that may be properly considered at a meeting of Members shall provide, within five (5) Business Days of delivery of such request (or such other period as may be specified in such request), written verification, satisfactory, in the discretion of the Board of Directors or any committee thereof or any authorized officer of the Company, to demonstrate the accuracy of any information submitted by the Member pursuant to this Section 11.10. If a Member fails to provide such written verification within such period, the information as to which written verification was requested may be deemed not to have been provided in accordance with this Section 11.10.

(ii)For purposes of this Section 11.10, only such individuals who are nominated in accordance with this Section 11.10 shall be eligible for election by Members as Directors, and only such business shall be conducted at a meeting of Members as shall have been brought before the meeting in accordance with this Section 11.10. The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 11.10.

(iii)For purposes of this Section 11.10, (a) the “date of mailing of the notice” shall mean the date of the proxy statement for the solicitation of proxies for election of Directors and (b) ”public announcement” shall mean disclosure (i) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or comparable news service or (ii) in a document publicly filed or furnished by the Company with the Commission pursuant to the Exchange Act.

(iv)Notwithstanding the foregoing provisions of this Section 11.10, a Member shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 11.10. Nothing in this Section 11.10 shall be deemed to affect any right of a Member to request inclusion of a proposal in, nor the right of the Company to omit a proposal from, the Company's proxy statement pursuant to Rule 14a‑8 (or any successor provision) under the Exchange Act.

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Section 11.11Procedure for Election of Directors; Voting. The election of Directors submitted to Members at any meeting shall be decided by a plurality of the votes cast by the Members entitled to vote thereon. Except as otherwise provided by applicable law or this Agreement, all matters other than the election of Directors submitted to the Members at any meeting shall be decided by the affirmative vote of the holders of a majority of the then Outstanding Shares entitled to vote thereon present in person or represented by proxy at the meeting of Members. The vote on any matter at a meeting, including the election of Directors, shall be by written ballot. Each ballot shall be signed by the Member voting, or by such Member's proxy, and shall state the number of Shares voted.

Section 11.12Inspectors of Elections. The Board of Directors, in advance of any meeting, may, but need not, appoint one or more individual inspectors or one or more entities that designate individuals as inspectors to act at the meeting or any adjournment thereof. If an inspector or inspectors are not appointed, the individual presiding at the meeting may, but need not, appoint one or more inspectors.

Section 11.13Waiver of Notice. Whenever any notice is required to be given to any Member by the terms of this Agreement or pursuant to applicable law, a waiver thereof in writing, signed by the Person or Persons entitled to such notice, or a waiver thereof by electronic transmission by the Person or Persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the Members need be specified in any written waiver of notice or any waiver by electronic transmission of such meeting, unless specifically required by statute. Notice of any meeting of Members need not be given to any Member if waived by such Member either in a writing signed by such Member or by electronic transmission, whether such waiver is given before or after such meeting is held. If any such waiver is given by electronic transmission, the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the Member. The attendance of any Person at any meeting shall constitute a waiver of notice of such meeting, except where such Person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 11.14Remote Communication. For the purposes of this Agreement, if authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, Members and proxyholders may, by means of remote communication:

(a)participate in a meeting of Members; and

(b)to the fullest extent permitted by applicable law, be deemed present in person and vote at a meeting of Members, whether such meeting is to be held at a designated place or solely by means of remote communication; provided, however, that (i) the Company shall implement reasonable measures to verify that each Person deemed present and permitted to vote at the meeting by means of remote communication is a Member or proxyholder, (ii) the Company shall implement reasonable measures to provide such Members and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the Members, including an opportunity to read or hear the proceedings of the meeting substantially and concurrently with such proceedings,

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and (iii) if any Member or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Company.

Section 11.15Member Action Without a Meeting. On any matter that is to be voted on, consented to or approved by Members, the Members may take such action without a meeting, without prior notice and without a vote, if a written consent, setting forth the action so taken, shall be signed by Members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Members entitled to vote thereon were present and voted.

Section 11.16Return on Capital Contribution. Except as otherwise provided in Article XIX, no Member shall demand a return on or of its Capital Contributions.

Section 11.17Member Compensation. No Member shall receive any interest, salary or draw with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company, or otherwise, in its capacity as a Member, except as otherwise provided in this Agreement, the Management Agreement or any agreement to which the Manager subcontracts substantially all of or material aspects of certain management functions, including any sub-management agreement.

Section 11.18Limited Liability of Members. No Member shall be liable for any debts or obligations of the Company other than as provided in Section 16.1.

Section 11.19Representation of Company. Each of the Members hereby acknowledges and agrees that the attorneys representing the Company and the Directors and their Affiliates do not represent and shall not be deemed under the applicable codes of professional responsibility to have represented or be representing any or all of the Members in any respect at any time. Each of the Members further acknowledges and agrees that such attorneys shall have no obligation to furnish the Members with any information or documents obtained, received or created in connection with the representation of the Company, the Directors and/or their Affiliates.

Section 11.20Preemptive Rights. Except as may be provided by the Board of Directors, or as may otherwise be provided by contract approved by the Board of Directors, no holder of Shares shall, as such holder, have any preemptive right to purchase or subscribe for any additional Shares or any other Securities which the Company may issue or sell.

Section 11.21Tender Offers. If any Person makes a tender offer, including a “mini-tender” offer, such Person must comply with all of the provisions set forth in Regulation 14D of the Exchange Act, including disclosure and notice requirements, that would be applicable if the tender offer was for more than 5% of the outstanding Shares; provided, however, that such documents are not required to be filed with the Commission. In addition, any such Person must provide notice to the Company at least ten (10) Business Days prior to initiating any such tender offer. Any Person who initiates a tender offer without complying with the provisions set forth above (a “Non‑Compliant Tender Offer”), shall be responsible for all expenses incurred by the Company in connection with the enforcement of the provisions of this Section 11.21, including expenses incurred in connection with the review of all documents related to such tender offer. In addition, the Company may seek injunctive relief, including a temporary or permanent restraining order, in connection with any

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Non‑Compliant Tender Offer. This Section 11.21 shall be of no force or effect with respect to any Shares that are then listed.

Section 11.22Voting Rights of Members and Limitation on Powers of the Directors. The Members shall be entitled to vote only on the following matters specified in this Section 11.22.

(a)Subject to the mandatory provisions of any applicable law or regulations, the Members shall have the right to take the actions specified in Sections 11.22(a)(i)‑(iv) upon the affirmative vote or consent of the Majority of the Members, without the concurrence of the Board of Directors:

(i)amend this Agreement except as provided in Article XVII hereof;

(ii)dissolve the Company;

(iii)remove a Director and elect a new Director; and

(iv)approve or disapprove of the Sale or series of Sales of all or substantially all the assets of the Company except for any Sale or series of Sales in the ordinary course of business.

Except with respect to the foregoing matters, no action taken by the Members at any meeting shall in any way bind the Board of Directors.

(b)Without the affirmative vote or consent of the Majority of the Members, the Board of Directors shall not:

(i)amend this Agreement, other than as set forth in Article XVII of this Agreement;

(ii)dissolve the Company;

(iii)merge or consolidate with or into any limited liability company, corporation, statutory trust, business trust or association, real estate investment trust, common-law trust or any other unincorporated business, including a partnership;

(iv)sell all or substantially all of its assets other than in the ordinary course of business;

(v)cause the Company to be treated as other than a partnership for federal income tax purposes;

(vi)take any action that would cause the Company to be treated as being engaged in the active conduct of a lending (excluding, for this purpose, loans to Company Subsidiaries), banking or financial business;

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(vii)cause the Company to be registered as an investment company under the Investment Company Act of 1940, as amended; or

(viii)take any action on such other matters with respect to which the Board of Directors has adopted a resolution declaring that a proposed action is advisable and directed that the matter be submitted to the Members for approval or ratification.

Section 11.23Member Vote Required in Connection With Certain Business Combinations Or Transactions.

(a)Vote for Business Combinations. The affirmative vote of the Majority of the Members (excluding Shares owned by the Interested Member or any Affiliate or Associate of the Interested Member) shall be required to approve any Business Combination. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by applicable law or in any agreement with any securities exchange or otherwise.

(b)Power of Continuing Directors. The Continuing Directors shall have the power and duty to determine, on the basis of information known to them after reasonable inquiry, all facts necessary to determine compliance with this Section 11.23, including (a) whether a Person is an Interested Member, (b) the number of Shares of the Company beneficially owned by any Person, (c) whether a Person is an Affiliate or Associate of another, and (d) the net asset value of the Company's outstanding Shares, and the good faith determination of the Continuing Directors on such matters shall be conclusive and binding for all the purposes of this Section 11.23.

(c)No Effect on Fiduciary Obligations. Nothing contained in this Section 11.23 shall be construed to relieve the Directors or an Interested Member from any fiduciary obligation imposed by applicable law.

ARTICLE XII

BOOKS AND RECORDS, REPORTS AND RETURNS

Section 12.1Right of Inspection. As permitted hereunder, any Member and any designated representative thereof shall have the right, upon written request, subject to reasonable notice and at their own expense, to access the records of the Company during normal business hours, and may inspect and copy any of them for a reasonable charge. Inspection of the Company's books and records by the office or agency administering the securities laws of a jurisdiction shall be provided upon reasonable notice during normal working hours. Upon receipt of a written request to access the book and records of the Company that is properly submitted pursuant to this section, the Company shall permit inspection or respond to such request within thirty (30) business days of the date of receipt of the request.

Section 12.2Access to Membership List.

(a)The Membership List shall be maintained as part of the books and records of the Company and shall be available for inspection by any Member or the Member's designated agent at the home office of the Company upon the request of the Member. For any of the purposes

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described below, the Membership List shall be updated at least quarterly to reflect changes in the information contained therein. A copy of such list, for any of the purposes described below, shall be mailed to any Member so requesting within ten (10) days of receipt by the Company of the request. The copy of the Membership List shall be printed in alphabetical order, on white paper, and in a readily readable type size (in no event smaller than ten (10)‑point type). The Company may impose a reasonable charge for postage costs and expenses incurred in reproduction pursuant to the Member's request. A Member may request a copy of the Members List in connection with, without limitation, matters relating to Member's voting rights and the exercise of Member rights under federal proxy laws.

(b)If the Company neglects or refuses to exhibit, produce or mail a copy of the Membership List as requested, the Company shall be liable to any Member requesting the list for the costs, including reasonable attorney's fees, incurred by that Member for compelling the production of the Membership List, and for actual damages suffered by any Member by reason of such refusal or neglect. Notwithstanding anything herein to the contrary, the Company need not produce the Membership List if the actual purpose and reason for the requests for inspection or for a copy of the Membership List is to secure such list of Members or other information for the purpose of selling such list or copies thereof, or of using the same for a commercial purposeother than in the interest of the applicant as a Member relative to the affairs of the Company. The Company may require the Member requesting the Membership List to represent that the list is not requested for a commercial purpose unrelated to the Member's Membership Interest in the Company. The remedies provided hereunder to Members requesting copies of the Membership List are in addition to and shall not in any way limit other remedies available to Members under federal law, or the laws of any state.

Section 12.3Tax Information. The Company shall use commercially reasonable efforts, at the Company's expense, to cause to be prepared and distributed to the Members all information necessary for the preparation of the Members' federal income tax returns as soon as reasonably practicable (and the Company will use its reasonable best efforts to provide such information not later than seventy-five (75) days) after the end of the Company's fiscal year.

Section 12.4Annual Report.

(a)From the Initial Closing of the Private Placement until the Commencement of the Initial Public Offering, the Company shall cause to be prepared and furnished or made available to Members at least annually, (A) an audited year-end balance sheet, income statement and a statement of changes in financial position as soon as such statements become available, which is expected to be ninety (90) days after the end of each fiscal year; (B) all information necessary for the preparation of Members' individual income tax returns, which is expected to be available not later than ninety (90) days after the end of each fiscal year; and (c) such other information as the Manager may, un its sole discretion, elect to distribute from time to time.

(b)From commencement of the Initial Public Offering the Company shall cause to be prepared and furnished or made available to Members (in a form and manner consistent with then-current requirements of the Commission) at least annually, at Company expense, within 120 days after the end of the Company's fiscal year, or such shorter period as may be required by law, an annual report, which will include financial statements audited and reported upon by the Company's

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independent public accountants, and will contain: (A) a balance sheet as of the end of each fiscal year and statements of income, Members' equity, and cash flow, for the year then ended, all of which shall be prepared in accordance with generally accepted accounting principles and accompanied by an auditor's report containing an opinion of an independent certified public accountant; (B) a report of the activities of the Company during the period covered by the report; (C) where forecasts have been provided to the Members, a table comparing the forecasts previously provided with the actual results during the period covered by the report; and (D) a report setting forth Distributions to Members for the period covered thereby and separately identifying Distributions from: (i) cash flow from operations during the period, (ii) cash flow from operations during a prior period which have been held as reserves, (iii) proceeds from disposition of Company assets and (iv) reserves from the Gross Proceeds of the Offering originally obtained from the Members. The annual financial statements will contain or be accompanied by a complete statement of transactions with the Managers or their Affiliates and of compensation and fees paid or payable by the Company to the Managers or their Affiliates. The annual report shall also contain or be accompanied by a breakdown of the costs reimbursed to the Sponsor.

Section 12.5Quarterly Reports. From commencement of the Initial Public Offering, if and for as long as the Company is required to file quarterly reports on Form 10‑Q with the Commission, the information contained in each such report shall be furnished or made available to Members (in a form and manner consistent with then-current requirements of the Commission) after such report is filed with the Commission. Such quarterly report on Form 10‑Q shall be deemed to have been made available to Members upon filing with the Commission. If and when such reports are not required to be filed, each Member will be furnished (in a form and manner consistent with then-current requirements of the Commission), within sixty (60) days after the end of the first 6 months of the Company's fiscal year, an unaudited financial report for that period including a balance sheet, a statement of income, a statement of Members' equity and a cash flow statement. Such reports shall be prepared on the same accounting basis to be utilized in the annual report and shall also include such other information as is deemed reasonably necessary by the Board of Directors to advise the Members of the activities of the Company during the quarter covered by the report.

Section 12.6Filings. The Company shall use commercially reasonable efforts to cause the income tax returns for the Company to be prepared and timely filed with the appropriate authorities (with due regard for any extension of time for filing any such income tax returns as elected by the Board of Directors). The Company shall also use commercially reasonable efforts to cause to be prepared and timely filed, with appropriate federal and state regulatory and administrative bodies, all reports required to be filed with those entities under then current applicable laws, rules and regulations. The reports shall be prepared by the accounting or reporting basis required by the regulatory bodies. Any Member shall be provided with a copy of any of the reports upon request without expense to him or her. The Company shall file, with the Administrators for the various states in which this Company is registered, as required by such states, a copy of each report referred to in this Article XII.

Section 12.7Method of Accounting. The Company shall use the accrual method of accounting in accordance with accounting principles generally accepted in the United States and by the American Institute of Certified Public Accountants Audit and expects to qualify for and prepare its financial statements using the specialized accounting principles as set forth by the

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Accounting Standards Codification Topic 946, Financial Services—Investment Companies (“ASC Topic 946”). If the Company subsequently fails to qualify for the specialized accounting principles set forth under ASC Topic 946, such change shall be disclosed in a report publicly filed by the Company with the Commission or disclosed in a written notice sent to Members.

ARTICLE XIII

MANAGER; COMPANY ADMINISTRATORS

Section 13.1Appointment of Manager; Company Administrator.

(a)Manager. The Board of Directors shall appoint a Manager of the Company pursuant to the Management Agreement and such Manager shall have the authority to appoint a sub-manager pursuant to a sub-management agreement. The term of retention of any Manager shall not exceed an initial term of one year, although there is no limit to the number of times that a particular Manager may be retained.

(b)Company Administrator. The Board of Directors shall appoint a Company Administrator pursuant to an administrative services agreement and such Company Administrator(s) shall have the authority to appoint one or more sub-administrators pursuant to a sub-administrative services or similar agreement. The term of retention of any Company Administrator shall not exceed an initial term of one year, although there is no limit to the number of times that a particular Company Administrator may be retained.

Section 13.2Supervision of the Manager; Company Administrator.

(a)The Board of Directors may exercise broad discretion in allowing a Manager or Company Administrator to administer and regulate the operations of the Company, to act as agent for the Company, to execute documents on behalf of the Company and to make executive decisions that conform to general policies and principles established by the Board of Directors. The Board of Directors shall monitor the Company Administrators and Managers to assure that the administrative procedures, operations and programs of the Company are in the best interests of the Company and are fulfilled, and upon Commencement of the Initial Public Offering, that (i) the expenses incurred are reasonable, (ii) all Front End Fees shall be reasonable and shall not exceed 18% of the Gross Proceeds of any offering, regardless of the source of payment, and (iii) the percentage of Gross Proceeds of any offering committed to Investment in Company Assets shall be at least 82%. All items of compensation to underwriters or dealers, including Selling Commissions, expenses, rights of first refusal, consulting fees, finders' fees and all other items of compensation of any kind or description paid by the Company, directly or indirectly, shall be taken into consideration in computing the amount of allowable Front End Fees.

(b)The Board of Directors is responsible for determining that compensation paid to a Manager is reasonable in relation to the nature and quality of services performed and the investment performance of the Company and that the provisions of the Management Agreement are being carried out. All agreements between a Manager and the Company must be approved by a majority of the Independent Directors. The Board of Directors may consider all factors that they deem relevant in making these determinations.

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Section 13.3Fiduciary Obligations. Any management agreement with a Manager shall provide that the Manager has a fiduciary responsibility to the Company. A Manager shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Company, whether or not in the Manager's immediate possession or control, and shall not employ or permit another to employ such funds or assets in any manner except for the exclusive benefit of the Company. The Company shall not permit a Member to contract away any fiduciary obligations owed to the Members by the Managers under common law.

Section 13.4Termination. The Company may not enter into a Management Agreement unless such agreement provides that a Manager may not voluntarily terminate its contractual relationship with the Company without cause unless it provides 120 days prior written notice and that if the Manager fails to give such notice, the terminating Manager shall pay all expenses incurred as a result of its termination. In the event that a Manager voluntarily terminates its contractual relationship with the Company without cause and provides 120 days prior written notice to the Company pursuant to this section, the terminating Manager shall pay all reasonable expenses that the Company incurs as a direct result of the Manager’s termination, beginning on the first calendar day following the effective date of termination. Upon termination of the Management Agreement, the Company shall be required to pay to the terminated Manager all amounts then accrued and owing. The method of payment to the terminated Manager must be fair and protect the solvency and liquidity of the Company. When the termination is voluntary, the method payment will be presumed to be fair if it provides for a non-interest bearing unsecured promissory note with principal payable, if at all, from distributions that the Manager would have received had the Management Agreement not been terminated. When the termination is involuntary, the method of payment will be presumed to be fair if it provides for an interest bearing promissory note maturing in not less than five years with equal installments each year.

Section 13.5Organization and Offering Expenses Limitation. The Company may reimburse a Manager and its Affiliates and/or a Company Administrator and its Affiliates for Organization and Offering Expenses incurred by a Manager or its Affiliates and/or a Company Administrator and its Affiliates; provided, however, that the total amount of all Organization and Offering Expenses shall be reasonable and shall be included in Front End Fees for purposes of the limit on such Front End Fees set forth in Section 13.2.

Section 13.6Reimbursement for Operating Expenses.

(a)All expenses of a Manager and/or a Company Administrator shall be billed to and paid by the Company. Subject to Section 13.6(b) below, the Company may reimburse a Manager or its Affiliates, at the end of each fiscal month, for the actual costs of goods and services as provided for in writing pursuant to a Management Agreement, including, without limitation, the reimbursement of all third party reimbursable expenses permitted thereunder. A Company Administrator and its Affiliates may be reimbursed for the administrative services necessary to the operation of the Company as provided for in writing pursuant to an administrative services or similar agreement; provided, the reimbursement shall be the lower of the Company Administrator 's actual cost or the amount the Company would be required to pay Persons other than the Company Administrator’s Affiliates for comparable administrative services in the same geographic location; and provided, further, that such costs are reasonably allocated to the Company on the basis of

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assets, revenues, time records or other method conforming with generally accepted accounting principles. No reimbursement shall be permitted for services for which a Manager or a Company Administrator, as applicable, is entitled to compensation by way of a separate fee.

(b)Excluded from the allowable reimbursement shall be: (i) overhead, rent or depreciation, utilities, capital equipment and other administrative items of the Manager and/or Company Administrator; and (ii) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any Controlling Person.

Section 13.7Section 707 Compliance. Any fees paid to a Member (including those pursuant to this Article XIII) shall be treated as payments governed by Section 707 of the Code.

Section 13.8Intentionally Omitted.

Section 13.9Applicability of this Article. Notwithstanding anything to the contrary herein, and without limiting anything that is permitted under Delaware law even when not addressed in this Agreement, the Sections of this Article XIII, other than Section 13.1, shall apply only following Commencement of the Initial Public Offering.

ARTICLE XIV

INVESTMENT POLICIES AND LIMITATIONS

Section 14.1Review of Policies. The Board of Directors, including the Independent Directors, shall review the investment and borrowing policies of the Company with sufficient frequency (and, upon the Initial Closing of the Private Placement or, if earlier, the Commencement of the Initial Public Offering, at least annually) to determine that the policies being followed by the Company at any time are in the best interests of its Members. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of the Board of Directors.

Section 14.2Certain Permitted Investments. The Company may invest in Joint Ventures with an Affiliated Person if a majority of Directors (including a majority of Independent Directors) not otherwise interested in the transaction, approve such investment as being fair and reasonable to the Company and on terms substantially similar to the terms of third parties making comparable investments.

Section 14.3Reinvestment of Cash Available for Distribution and of Proceeds. Any reinvestment of Cash Available for Distribution shall be reinvested on behalf of all Members on the same terms and shall not create differing classes of Shares resulting from inequitable allocations of tax or economic benefits. Reinvestment of proceeds resulting from the sale or refinancing of a Company asset may take place if sufficient cash will be distributed to pay state and federal income tax, if any (assuming investors are in a specified tax bracket) created by the sale or refinancing of such asset. Such reinvested proceeds, as well as the reinvestment of any Cash Available for Distribution, shall not be considered “investments” in the Company for the purposes of calculating Capital Contributions.

Section 14.4Applicability of this Article. Notwithstanding anything to the contrary

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herein, and without limiting anything that is permitted under Delaware law even when not addressed in this Agreement, the Sections of this Article XIV, other than Section 14.1, shall apply only following Commencement of the Initial Public Offering.

ARTICLE XV

CONFLICTS OF INTEREST

Section 15.1Investments with Affiliates. The Company shall not invest in any asset or company in which a Manager, any of the Directors or officers or any of their Affiliates has a direct economic interest without a determination by a majority of the Board of Directors (including a majority of the Independent Directors) that such an investment or co-investment is fair and reasonable to the Company.

Section 15.2Voting of Shares Owned by Affiliates. The Sponsor may not vote its Shares or consent on matters submitted to the holders of Shares regarding any transaction between the Company and the Sponsor. Any Shares owned by the Sponsor shall be excluded in determining the requisite Percentage Interest in Shares necessary to approve a matter on which the Sponsor may not vote or consent.

Section 15.3Purchase of Assets from Affiliates. The Company shall not purchase assets from the Sponsor, a Manager, the Directors or any of their Affiliates unless a majority of the Board of Directors (including a majority of the Independent Directors) not otherwise interested in the transaction determines that such transaction is fair and reasonable to the Company and at a price to the Company no greater than the cost of the assets to the Sponsor, a Manager, such Director or such Affiliates, unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event shall the cost of such asset to the Company exceed its then-current appraised value.

Section 15.4Sale of Assets to Affiliates. The Company shall not sell or lease assets to the Sponsor, a Manager, the Directors or any of their Affiliates without a determination by a majority of the Board of Directors (including a majority of the Independent Directors) not otherwise interested in the transaction, that such transaction is fair and reasonable to the Company.

Section 15.5Loans to Affiliates. Except for the advancement of funds pursuant to Section 16.3, no loans shall be made by the Company to the Sponsor.

Section 15.6Other Transactions with Affiliates. The Company shall not engage in a transaction with an Affiliated Person not otherwise addressed by this Agreement unless a majority of the Board of Directors (including a majority of the Independent Directors) not otherwise interested in the transaction concludes that such transactions between the Company and the Sponsor, a Manager, any of the Directors or any of their Affiliates are fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from unaffiliated third parties. The Company shall not engage in a transaction with an Affiliated Person that is not otherwise addressed by this Agreement and pursuant to which the Affiliated Person provides services to the Company unless such Affiliated Person can demonstrate the capacity and capability to provide such services on a competitive basis and that the services are provided at the lesser of cost or the

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competitive rate charged by Persons other than Affiliated Persons providing comparable services. The terms pursuant to which any goods or services are provided to the Company by the Manager, shall be embodied in a written contract, the material terms of which must be fully disclosed to the Members. Any contract between the Company and an Affiliated Person not otherwise addressed by this Agreement shall contain a clause allowing termination without penalty on 60 days’ notice.

Section 15.7Rebates, Kickbacks and Reciprocal Arrangements.

(a)No rebates or give‑ups may be received by the Sponsor nor may the Sponsor participate in any reciprocal business arrangements which would circumvent the NASAA Omnibus Guidelines or the provisions contained in this Agreement.

(b)No Sponsor may directly or indirectly pay or award any commission or other compensation to any Person in exchange for selling Shares or giving investment advice to a potential Member except for payments of normal Selling Commissions and other items of underwriting compensation paid to registered broker-dealers or other properly licensed Persons and bona fide due diligence expenses, all in compliance with applicable FINRA rules.

Section 15.8Commingling. The funds of the Company shall not be commingled with the funds of any other Person; provided, however, that the foregoing shall not prohibit the Sponsor from establishing a master fiduciary account pursuant to which separate subtrust accounts are established for the benefit of Affiliated Programs, if Company funds are protected from claims and creditors of such other Programs. The foregoing prohibition shall not be interpreted to prohibit joint ventures or co-investment structures.

Section 15.9Lending Practices. The Company may not borrow money from the Sponsor, a Manager, the Directors, or any of their Affiliates, unless a majority of the Board of Directors (including a majority of Independent Directors) not otherwise interested in such transaction approve the transaction as being fair, competitive, and commercially reasonable and no less favorable to the Company than loans between unaffiliated parties under the same circumstances. On financing made available to the Company by the Sponsor, the Sponsor may not receive interest in excess of the lesser of such lender's cost of funds or the amounts that would be charged by unrelated lending institutions on comparable loans for the same purpose. The Sponsor shall not impose a prepayment charge or penalty in connection with such financing and the Sponsor shall not receive points or other financing charges.

Section 15.10No Permanent Financing. The Sponsor shall be prohibited from providing permanent financing for the Company. For purposes of this Section 15.10, “permanent financing” shall mean any financing with a term in excess of 12 months.

Section 15.11No Exchange of Interests for Investments.Afterthe Company has satisfied the Minimum Offering for the Initial Public Offering, it shall not acquire any assets in exchange for Shares.

Section 15.12Applicability of this Article. Notwithstanding anything to the contrary herein, and without limiting anything that is permitted under Delaware law even when not addressed

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in this Agreement, the Sections of this Article XV shall apply only following the Commencement of the Initial Public Offering.

ARTICLE XVI

LIABILITY LIMITATION AND INDEMNIFICATION

Section 16.1Limitation of Member Liability. The liability of each Member in such capacity shall be limited to the amount of such Member's Capital Contribution and pro rata share of any undistributed Profits. Except as otherwise provided in this Agreement (including, without limitation, Section 9.9(d)) or as may otherwise be required by law, after the payment of all subscription proceeds for the Shares purchased by such Member, no Member shall have any further obligations to the Company, be subject to any additional assessment or be required to contribute any additional capital to, or to loan any funds to, the Company. No Member shall have any personal liability on account of any obligations and liabilities of, including any amounts payable by, the Company under or pursuant to, or otherwise in connection with, this Agreement or the conduct of the business of the Company.

Section 16.2Limitation of Liability.

(a)Each Director of the Company shall, in the performance of such Director's duties, be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by a Manager, or employees of a Manager, or any of the officers of the Company, or committees of the Board of Directors, or by any other Person as to matters the Director reasonably believes are within such other Person's professional or expert competence, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of the Company, or the value and amount of assets or reserves or contracts, agreements or other undertakings that would be sufficient to pay claims and obligations of the Company or to make reasonable provision to pay such claims or obligations, or any other facts pertinent to the existence and amount of the assets of the Company from which distributions to Members might properly be paid.

(b)No Director shall be liable to the Company, any subsidiary of the Company or the Members for monetary damages for any acts or omissions arising from the performance of any of such Director's obligations or duties in connection with the Company, including any breach of fiduciary duty, except as follows: (i) for breach of the Director's duty of loyalty to the Company or its Members, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) for any transaction from which the Director derived an improper benefit. To the extent the provisions of this Agreement restrict or eliminate the duties and liabilities of a Director of the Company or the Members or a Manager otherwise existing at law or in equity, the provisions of this Agreement shall replace such duties and liabilities.

(c)To the fullest extent permitted by law, a Director of the Company shall not be liable to the Company, any Member or any other Person for: (i) any action taken or not taken as required by this Agreement; (ii) any action taken or not taken as permitted by this Agreement and, with respect to which, such Director acted on an informed basis, in good faith and with the honest belief

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that such action, taken or not taken, was in the best interests of the Company; or (iii) the Company's compliance with an obligation incurred or the performance of any agreement entered into prior to such Director having become a Director of the Company.

(d)Any Director shall not be liable to the Company or to any other Director or Member of the Company or any such other Person that is a party to or otherwise bound by this Agreement for breach of fiduciary duty for the Director's good faith reliance on the provisions of this Agreement.

(e)Except as otherwise required by the Act, the debts, obligations and liabilities of the Company shall be solely the debts, obligations and liabilities of the Company and no Director shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Director of the Company.

(f)Notwithstanding anything to the contrary contained in paragraphs (a) through (e) above, following the Commencement of the Initial Public Offering, the Company shall not indemnify a Sponsor, a Director, the Manager or any of their Affiliates (the “Indemnitee”) for any loss or liability suffered by such Person nor hold harmless any such Person for any loss or liability suffered by the Company, unless all of the following conditions are met:

(i)The Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company.

(ii)The Indemnitee was acting on behalf of or performing services for the Company.

(iii)Such liability or loss was not the result of (A) negligence or misconduct in the case that the Indemnitee is a Director (other than an Independent Director), or a Manager or their respective Affiliates or (B) gross negligence or willful misconduct in the case the Indemnitee is an Independent Director.

(iv)Such indemnification or agreement to hold harmless is recoverable only out of the Company's assets and not from the Members.

Section 16.3Indemnification.

(a)The Company may indemnify, to the fullest extent permitted by law, each Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company), by reason of the fact that the Person is or was a Director, officer, employee, Tax Matters Partner or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Person in connection with such action, suit or proceeding, if the Person acted in good faith and in a manner the Person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the Person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or

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upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Person did not act in good faith and in a manner which the Person reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the Person's conduct was unlawful.

To the extent that a present or former Director or officer of the Company has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in this Section 16.3(a), or in defense of any claim, issue or matter therein, such Person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such Person in connection therewith.

Each of the Persons entitled to be indemnified for expenses and liabilities as contemplated above may, in the performance of his, her or its duties, consult with legal counsel and accountants at the Company's expense, and any act or omission by such Person on behalf of the Company in furtherance of the interests of the Company in good faith in reliance upon, and in accordance with, the advice of such legal counsel or accountants will be full justification for any such act or omission, and such Person will be fully protected for such acts and omissions; provided, that such legal counsel or accountants were selected with reasonable care by or on behalf of the Company.

(b)Any indemnification of a present or former Director, officer, employee or agent of the Company under Section 16.3(a) or (c) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the present or former Director, officer, employee or agent of the Company is proper in the circumstances because the Person has met the applicable standard of conduct set forth in Section 17.3(a) or pursuant to Section 16.3(c), as the case may be. Such determination shall be made, with respect to a Person who is a Director, officer, employee or agent of the Company at the time of such determination, (i) by a majority vote of the Directors who are not parties to any such action, suit or proceeding, even though less than a quorum, (ii) by a committee of such Directors designated by a majority vote of such Directors, even though less than a quorum, (iii) if there are no such Directors, or if a majority, even though less than a quorum, of such Directors so direct, by independent legal counsel in a written opinion, or (iv) by the Members. The indemnification, and the advancement of expenses incurred in defending an action, suit or proceeding prior to its final disposition, provided by or granted pursuant to this Agreement shall not be exclusive of any other right which any Person may have or hereafter acquire under any statute, other provision of this Agreement, vote of Members or Independent Directors or otherwise. No repeal, modification or amendment of, or adoption of any provision inconsistent with, this Section 16.3, nor, to the fullest extent permitted by applicable law, any modification of law, shall adversely affect any right or protection of any Person granted pursuant hereto existing at, or with respect to any events that occurred prior to, the time of such repeal, amendment, adoption or modification. The indemnification and advancement of expenses provided by, or granted pursuant to, this Agreement shall, unless otherwise provided when authorized or ratified, continue as to a Person who has ceased to be a Director, officer, employee or agent of the Company and shall inure to the benefit of the heirs, executors and administrators of such a Person.

(c)The Company may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to be paid by the Company the expenses incurred in defending any such action, suit or proceeding in advance of its final disposition, to any Person

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who is or was an employee or agent of the Company or any subsidiary of the Company (other than those Persons indemnified pursuant to clause (a) of this Section 16.3) and to any Person who is or was serving at the request of the Company or a subsidiary of the Company as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Company or a subsidiary of the Company, to the fullest extent of the provisions of this Agreement with respect to the indemnification and advancement of expenses of directors, officers, employees, and agents of the Company. The payment of any amount to any Person pursuant to this clause (c) shall subrogate the Company to any right such Person may have against any other Person.

(d)To the fullest extent permitted by law, expenses (including attorneys' fees) incurred by a Director, officer, employee or agent of the Company in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Person to repay such amount if it shall ultimately be determined that such Person is not entitled to be indemnified by the Company as authorized in this Section 16.3.

With respect to any Person who is a present or former Director, officer, employee or agent of the Company, any undertaking required by this Section 16.3(d) shall be an unlimited general obligation but need not be secured and shall be accepted without reference to financial ability to make repayment; provided, however, that such present or former Director, officer, employee or agent of the Company does not transfer assets with the intent of avoiding such repayment.

(e)The indemnification and advancement provided in this Section 16.3 is intended to comply with the requirements of, and provide indemnification and advancement rights substantially similar to those that may be available to directors, officers, employees and agents of corporations incorporated under, the DGCL as it relates to the indemnification of officers, directors, employees and agents of a Delaware corporation and, as such (except to the extent greater rights are expressly provided in this Agreement), the parties intend that they should be interpreted consistently with the provisions of, and jurisprudence regarding, the DGCL.

(f)Any notice, request or other communications required or permitted to be given to the Company under this Section 16.3 shall be in writing and either delivered in person or sent by electronic mail, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary and shall be effective only upon receipt by the Secretary, as the case may be.

(g)To the fullest extent permitted by the law of the State of Delaware, each Director, officer, employee and agent of the Company agrees that all actions for the advancement of expenses or indemnification brought under this Section 16.3 or under any vote of Members or Independent Directors or otherwise shall be a matter to which Section 18‑111 of the Act shall apply and which shall be brought exclusively in the Court of Chancery of the State of Delaware. Each of the parties hereto agrees that the Court of Chancery of the State of Delaware may summarily determine the Company's obligations to advance expenses (including attorneys' fees) under this Section 16.3.

(h)Notwithstanding anything to the contrary contained in paragraphs (a) to (g) above, following the Commencement of the Initial Public Offering, the Company shall not provide

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indemnification to the Sponsor, a Manager, a Director or any of their Affiliates, or any Person acting as a broker-dealer for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnitee, (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court of law considering the request for indemnification has been advised of the position of the Commission and of the published position of any state securities regulatory authority in which Securities were offered or sold as to indemnification for violations of securities laws.

(i)The Company may not incur the cost of that portion of liability insurance which insures the Manager or its Affiliates for any liability as to which a Manager or its Affiliates is prohibited from being indemnified under this section.

(j)Following the Commencement of the Initial Public Offering, the advancement of Company funds to a Manager or its Affiliates for reasonable legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought is permissible only if all of the following conditions are satisfied:

(i)The legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company or its subsidiaries.

(ii)A Manager or its Affiliates undertake to repay the advanced funds to the Company, together with the applicable legal rate of interest thereon, in cases in which the Manager or its Affiliates are found not to be entitled to indemnification.

(iii)The legal action is initiated by a third party who is not a Member, or the legal action is initiated by a Member and a court of competent jurisdiction specifically approves such advancement.

Section 16.4Express Exculpatory Clauses in Instruments. Neither the Members nor the Directors, officers, employees or agents of the Company shall be liable under any written instrument creating an obligation of the Company by reason of their being Members, Directors, officers, employees or agents of the Company, and all Persons shall look solely to the Company's assets for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity or enforceability of such instrument and shall not render any Member, Director, officer, employee or agent liable thereunder to any third party, nor shall the Directors or any officer, employee or agent of the Company be liable to anyone as a result of such omission.

ARTICLE XVII

AMENDMENTS

Section 17.1Amendments by the Board of Directors. Subject to Section 17.2 of this

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Agreement and all applicable law, this Agreement may be amended, at any time and from time to time, by the Board of Directors without the Consent of the Majority of the Members to effect any change in this Agreement for the benefit or protection of the Members, or as otherwise permitted by this Agreement, including:

(a)to add to the representations, duties or obligations of the Board of Directors or to surrender any right or power granted to the Board of Directors herein;

(b)to create any class or series of Shares, to increase the number of the Company's authorized Shares to issue additional Shares of authorized but unissued Shares and to set the offering terms of such Shares;

(c)to cure any ambiguity, to correct or supplement any provision herein that may be inconsistent with any other provision herein or to add any other provision with respect to matters or questions arising under this Agreement that will not be inconsistent with the terms of this Agreement;

(d)to preserve the status of the Company as a “partnership” for U.S. federal income tax purposes;

(e)to ensure that the Company will not be treated as an association or publicly traded partnership taxable as a corporation for federal income tax purposes;

(f)to delete or add any provision of or to this Agreement required to be so deleted or added by the staff of the Commission, by any other federal or state regulatory body or other agency (including any “blue sky” commission) or by any government administrator or similar such official;

(g)to facilitate the trading of Class A Shares, Class T Shares, Class I Shares, Class D or Class FA Shares (including any division of such class or series or other actions to facilitate the uniformity of tax items and attributes within each such class or series of Shares that are Listed);

(h)to permit the Shares to fall within any exemption from the definition of “plan assets” contained in Section 2510.3‑101 of Title 29 of the Code of Federal Regulations;

(i)if the Company is advised by counsel, by the Company's accountants or by the IRS that any allocations of income, gain, loss or deduction provided for in this Agreement are unlikely to be respected for federal income tax purposes, to amend the allocation provisions of this Agreement, in accordance with the advice of such counsel, such accountants or the IRS, to the minimum extent necessary to effect as nearly as practicable the plan of allocations and distributions provided in this Agreement;

(j)to change the name of the Company or the location of its principal office; and

(k)to elect for the Company to be governed by any successor Delaware statute governing limited liability companies.

Section 17.2Amendments with the Consent of the Majority of the Members. In addition to the amendments permitted to be made by the Board of Directors pursuant to Section 17.1,

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the Board of Directors may propose to the Members, in writing, any other amendment to this Agreement. The Board of Directors may include in any such submission a statement of the purpose for the proposed amendment and of the Manager's opinion with respect thereto. Upon the Consent of the Majority of the Members, such amendment shall take effect; provided, however, that no such amendment shall increase the liability of any Member or adversely affect in a disproportionate manner (other than any disproportionate results that are due to a difference in relative number of Shares owned) any Member's share of distributions of cash or allocations of Profits or Losses for tax purposes without the consent of each Member affected thereby;

ARTICLE XVIII

ROLL-UP TRANSACTIONS

Section 18.1     In connection with any proposed Roll‑Up Transaction, an appraisal of all of the Company's assets shall be obtained from a competent Independent Expert. The Company's assets shall be appraised on a consistent basis, and the appraisal shall be based on the evaluation of all relevant information and shall indicate the value of the assets as of a date immediately prior to the announcement of the proposed Roll‑Up Transaction. The appraisal shall assume an orderly liquidation of the assets over a 12‑month period. The terms of the engagement of the Independent Expert shall clearly state that the engagement is for the benefit of the Company and the Members. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to Members in connection with a proposed Roll‑Up Transaction. If the appraisal will be included in a Prospectus of the Company used to offer the securities of a Roll-Up Entity, the appraisal will be filed as an exhibit to the registration statement with the Commission and with any state where such securities are registered. In connection with a proposed Roll‑Up Transaction, the Person sponsoring the Roll‑Up Transaction shall offer to holder of Shares who vote against the proposed Roll‑Up Transaction the choice of:

(a)accepting the securities of a Roll‑Up Entity offered in the proposed Roll‑Up Transaction; or

(b)one of the following:

(i)remaining as Members of the Company and preserving their interests therein on the same terms and conditions as existed previously; or

(ii)receiving cash in an amount equal to the Members' pro rata share of the appraised value of the net assets of the Company.

The Company is prohibited from participating in any proposed Roll‑Up Transaction:

(c)that would result in the holder of Shares having voting rights in a Roll‑Up Entity that are less than the rights provided for in Sections 11.2 and 11.22(a) of this Agreement;

(d)which includes provisions that would operate as a material impediment to, or frustration of, the accumulation of Shares by any purchaser of the securities of the Roll‑Up Entity (except to the minimum extent necessary to preserve the tax status of the Roll‑Up Entity), or which

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would limit the ability of a Member to exercise the voting rights of its securities of the Roll‑Up Entity on the basis of the number of Shares held by that Member;

(e)in which the Member's rights to access of records of the Roll‑Up Entity will be less than those provided for under Sections 12.1 and 12.2 herein; or

(f)in which any of the costs of the Roll‑Up Transaction would be borne by the Company if the Roll‑Up Transaction is not approved by the Members.

Section 18.2Applicability of this Article. Notwithstanding anything to the contrary herein, and without limiting anything that is permitted under Delaware law even when not addressed in this Agreement, the Sections of this Article XVIII shall apply only following the Commencement of the Initial Public Offering.

ARTICLE XIX

DURATION AND DISSOLUTION OF THE COMPANY

Section 19.1Duration. The Company shall continue perpetually unless terminated pursuant to Section 19.3 or pursuant to any applicable provision of the Act.

Section 19.2Authority of Directors. Subject to the provisions of any class or series of Shares at the time outstanding, the Board of Directors shall have the power to dissolve or liquidate the Company; provided, however, that except as otherwise permitted by law, such action shall have been approved, at a meeting of the Members called for that purpose, by the affirmative vote of the holders of not less than a majority of the Shares then outstanding and entitled to vote thereon (other than a sale in the ordinary course of the Company's business, as to which no such vote is required).

Section 19.3Dissolution.

(a)Events Causing Dissolution. The Company shall be dissolved upon the happening of any of the following events (each, a “Dissolution Event”):

(i)the adoption of a resolution by a majority vote of the Board of Directors approving the dissolution of the Company and the approval of such action by the affirmative vote of Members as provided in Section 19.2; or

(ii)the Sale of all or substantially all of the assets of the Company; or

(iii)the operations of the Company shall cease to constitute legal activities under the Act or any other applicable law; or

(iv)any other event which causes the dissolution or winding‑up of the Company under the Delaware Act to the extent not otherwise provided herein.

(b)Winding‑Up of the Company. Upon the occurrence of a Dissolution Event, the winding‑up of the Company and the termination of its existence shall be accomplished as follows:

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(i)the Board of Directors shall proceed to wind up the affairs of the Company and all of the powers of the Board of Directors under this Agreement shall continue, including the powers to fulfill or discharge the Company's contracts, collect its assets, sell, convey, assign, exchange, transfer or otherwise dispose of all or any part of the remaining property of the Company to one or more persons at public or private sale for consideration which may consist in whole or in part of cash, securities or other property of any kind, discharge or pay its liabilities and do all other acts appropriate to liquidate its business;

(ii)in connection with the winding up of the affairs of the Company, the Board of Directors shall liquidate the assets as promptly as is consistent with obtaining current fair market value of such assets;

(iii)after paying or adequately providing for the payment of all liabilities, and upon receipt of such releases, indemnities and agreements as they deem necessary for their protection, the Company may distribute the remaining assets of the Company among the Members, in accordance with Section 19.3(c) so that after payment in full or the setting apart for payment of such preferential amounts, to the extent that such distribution is consistent with the Act or any provision of this Agreement or other applicable law; and

(iv)upon completion of the distribution of the Company property as provided in Section 19.3(a), the Board of Directors shall cause the filing of a certificate of cancellation with the Secretary of State of the State of Delaware and of all qualifications and registrations of the Company as a foreign limited liability company in jurisdictions in which the Company shall be qualified to transact business, and shall take such other actions as may be necessary to terminate the Company.

(c)Application of Liquidation Proceeds Upon Dissolution.Following the occurrence of any Dissolution Event, the proceeds of liquidation and the other assets of the Company shall be applied as follows and in the following order of priority:

(i)first, to the payment of creditors of the Company in order of priority as provided by law, except obligations to Members or their Affiliates;

(ii)next, to the setting up of any reserve that the Board of Directors (or such other Person effecting the winding‑up) shall determine is reasonably necessary for any contingent or unforeseen liability or obligation of the Company or the Members; such reserve may, in the sole and absolute discretion of the Board of Directors (or such other Person effecting the winding up) be paid over to an escrow agent selected by it to be held in escrow for the purpose of disbursing such reserve in payment of any of the aforementioned contingencies, and at the expiration of such period as the Board of Directors (or such other Person effecting the winding‑up) may deem advisable, to distribute the balance thereafter remaining as provided in clauses (iii)-(v) of this Section 19.3(c).

(iii)next, to the payment of all obligations to the Members in proportion to, and to the extent of advances made by, each Member pursuant to the provisions of this Agreement;

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(iv)next, to the payment of all reimbursements to which the Board of Directors or any of its Affiliates may be entitled pursuant to this Agreement; and

(v)thereafter, to the Members, in proportion to, and to the extent of, the positive balances of their Capital Accounts.

ARTICLE XX

MISCELLANEOUS

Section 20.1Covenant to Sign Documents. Each Member covenants, for himself or herself and his or her successors and assigns, to execute, with acknowledgment or verification, if required, any and all certificates, documents and other writings which may be necessary or expedient to form the Company and to achieve its purposes, including the Certificate and all amendments thereto, and all such filings, records or publications necessary or appropriate laws of any jurisdiction in which the Company shall conduct its business.

Section 20.2Notices. Except as otherwise expressly provided for in this Agreement, all notices which any Member may desire or may be required to give any other Members shall be in writing and shall be deemed duly given when delivered personally or when deposited in the United States overnight mail, postage pre‑paid.

Notices to Members shall be addressed to the Members at the last address shown on the Company records. Notices to the Directors or to the Company shall be delivered to the Company's principal place of business, as set forth in Article V above or as hereafter charged as provided herein.

Section 20.3Entire Agreement. This Agreement constitutes the entire Agreement between the parties and supersedes any and all prior agreements and representations, either oral or in writing, between the parties hereto with respect to the subject matter contained herein.

Section 20.4Waiver. No waiver by any party hereto of any breach of, or default under, this Agreement by any other party shall be construed or deemed a waiver of any other breach of or default under this Agreement, and shall not preclude any party from exercising or asserting any rights under this Agreement with respect to any other.

Section 20.5Severability. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

Section 20.6Application of Delaware Law. This Agreement and the application or interpretation thereof shall be governed, construed, and enforced exclusively by its terms and by the law of the State of Delaware applicable to contracts to be made and performed entirely in such state.

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Section 20.7Captions. Section titles or captions contained in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement.

Section 20.8Number and Gender. Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders.

Section 20.9Counterparts. This Agreement may be executed in counterparts, any or all of which may be signed by a Director on behalf of the Members as their attorney-in-fact.

Section 20.10Waiver of Action for Partition. Each of the parties hereto irrevocably waives during the term of the Company any right that it may have to maintain any action for partition with respect to any property of the Company or to cause the Company to be dissolved or liquidated.

Section 20.11Assignability. Each and all of the covenants, terms, provisions and arguments herein contained shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto, subject to the requirements of Article X and XI.

Section 20.12No Third Party Beneficiaries. For the avoidance of doubt, except for the Indemnitees, there are no intended or unintended third party beneficiaries of this Agreement (it being understood that each Indemnitee is an express third party beneficiary with respect to the provisions of this Agreement applicable to them as if they were parties to this Agreement).

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned have caused this Fourth Amended and Restated Limited Liability Company Operating Agreement to be executed on this 7th day of August, 2019.

LEVINE LEICHTMAN STRATEGIC CAPITAL, LLC
By:	/s/ David I. Wolmer
	Name:    David I. Wolmer
	Title: Authorized Person

CNL STRATEGIC CAPITAL MANAGEMENT, LLC
By:	/s/ Chirag J. Bhavsar
	Name:    Chirag J. Bhavsar
	Title: Chief Executive Officer

MEMBER:
By:
	Name:
	Title:

[Signature Page to LLC Agreement]

SCHEDULE A

OFFICERS

Chief Executive Officer. The Chief Executive Officer shall have general responsibility for implementation of the policies of the Company, as determined by the Board of Directors, and for the management of the business and affairs of the Company. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by this Agreement to some other officer or agent of the Company or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time.

President. In the absence of a Chief Executive Officer, the President shall in general supervise and control all of the business and affairs of the Company. In the absence of a designation of a Chief Operating Officer by the Board of Directors, the President shall be the Chief Operating Officer. He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by this Agreement to some other officer or agent of the Company or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors from time to time.

Chief Financial Officer. The Chief Financial Officer (or Treasurer, should there be one appointed) shall keep and maintain or cause to be kept and maintained adequate and correct books and records of accounts of business transactions of the Company, including accounts of the assets, liabilities, receipts, disbursements, gains, losses, capital of the Company. The books of account shall at all reasonable times be open to inspection by any Director. The Chief Financial Officer or Treasurer shall deposit all monies and other valuables in the name and to the credit of the Company with such depositaries as may be designated by the Board of Directors. He or she shall disburse the funds of the Company as may be ordered by the Board of Directors, shall render to the Chief Executive Officer and the Board of Directors, whenever they request it, an account of all of his or her transactions as Chief Financial Officer or Treasurer and of the financial condition of the Company and shall have other powers and perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer or this Agreement.

Secretary. The Secretary shall keep or cause to be kept at the principal place of business of the Company or such other place as the Board of Directors may direct a book of minutes of all meetings and actions of Directors, committees or other delegates of Directors and Members with the time and place of holding, whether regular or special, and if special, how authorized, the notice given, the names of those present at Directors' meetings or committee or other delegate meetings, the Percentage Interest present or represented at meetings of Members and the proceedings. The Secretary shall keep or cause to be kept at the principal place of business of the Company, a register or a duplicate register showing the names of all Members and their addresses, the number and classes of Percentage Interest held by each, the number and date of certificates issued for the same, if any, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give or cause to be given notice of all meetings of the Members and of the Board

of Directors (or committees or other delegates thereof) required to be given by this Agreement or by applicable law and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer or by this Agreement.

General Counsel. The General Counsel shall be responsible for handling on behalf of the Company all proceedings and matters of a legal nature. The General Counsel shall render advice and legal counsel to the Company, as necessary to the proper conduct of the business. The General Counsel shall have such other duties as may from time to time be prescribed by the Board of Directors, the Chief Executive Officer, or the President.

EX-10.3

EXHIBIT 10.3

STOCK CONTRIBUTION AND PURCHASE AGREEMENT

by and among

MICHAEL AURIEMMA, as Seller,

and

ROUNDTABLE ACQUISITION, LLC, as Buyer,

dated as of

June 26, 2019

TABLE OF CONTENTS

ARTICLE I DEFINITIONS	1
ARTICLE II CONTRIBUTION, PURCHASE AND SALE	15
Section 2.02 Purchase Price.	15
Section 2.03 Closing Actions and Deliverables.	16
Section 2.04 Closing.	17
Section 2.05 Purchase Price Adjustments.	18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER	20
Section 3.01 Organization and Authority of Seller Parties.	20
Section 3.02 Title.	21
Section 3.03 Organization, Authority and Qualification of the Company.	21
Section 3.04 Capitalization.	21
Section 3.05 Noncontravention.	22
Section 3.06 Financial Condition.	22
Section 3.07 Undisclosed Liabilities.	23
Section 3.08 Absence of Certain Changes, Events and Conditions.	23
Section 3.09 Material Contracts.	25
Section 3.10 Real Property; Title to Assets.	27
Section 3.11 Intellectual Property; Privacy and Data Security.	27
Section 3.12 Insurance.	31
Section 3.13 Legal Proceedings; Governmental Orders.	32
Section 3.14 Compliance With Laws; Permits.	32
Section 3.15 Environmental Matters.	32
Section 3.16 Employee Benefit Matters.	33
Section 3.17 Employment Matters.	35
Section 3.18 Taxes.	37
Section 3.19 Customers and Vendors.	38
Section 3.20 Bank Accounts.	39
Section 3.21 Restructuring; Affiliate Transactions.	39
Section 3.22 Brokers.	40

i

Section 3.23 No Other Representations and Warranties.	40
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER	40
Section 4.01 Organization and Authority of Buyer.	40
Section 4.02 No Conflicts; Consents.	41
Section 4.03 Investment Purpose.	41
Section 4.04 Brokers.	41
Section 4.05 Sufficiency of Funds.	41
Section 4.05 Legal Proceedings.	41
Section 4.07 Independent Investigation.	41
ARTICLE V COVENANTS	42
Section 5.01 Conduct of Business Prior to the Closing.	42
Section 5.02 Access to Information.	42
Section 5.03 Notice of Certain Events.	43
Section 5.04 Resignations.	43
Section 5.05 Employees; Benefit Plans.	43
Section 5.06 WARN Act.	44
Section 5.07 Director and Officer Indemnification and Insurance.	44
Section 5.08 Confidentiality.	45
Section 5.09 Governmental Approvals and Other Third-Party Consents	45
Section 5.10 Books and Records.	46
Section 5.11 Closing Conditions.	46
Section 5.12 Public Announcements.	46
Section 5.13 Further Assurances.	47
Section 5.14 Representation and Warranty Insurance.	47
Section 5.15 Tax Matters.	47
Section 5.16 Exclusivity.	51
Section 5.17 Release.	51
Section 5.18 Restrictive Covenants	52
Section 5.19 Shared Contracts	53

ii

Section 5.20 VIZOR Software	55
ARTICLE VI CONDITIONS TO CLOSING	56
Section 6.01 Conditions to Obligations of All Parties.	56
Section 6.02 Conditions to Obligations of Buyer.	56
Section 6.03 Conditions to Obligations of the Seller Parties.	57
ARTICLE VII INDEMNIFICATION	57
Section 7.01 Indemnification By the Seller Parties.	57
Section 7.02 Indemnification By Buyer.	58
Section 7.03 Indemnification Procedures.	58
Section 7.04 Survival.	60
Section 7.05 Certain Limitations.	60
Section 7.06 Tax Treatment of Indemnification Payments.	62
Section 7.07 Exclusive Remedies.	62
ARTICLE VIII TERMINATION	62
Section 8.01 Termination.	62
Section 8.02 Termination Procedures.	63
Section 8.03 Effect of Termination.	63
ARTICLE IX MISCELLANEOUS	63
Section 9.01 Expenses.	63
Section 9.02 Notices.	64
Section 9.03 Interpretation.	64
Section 9.04 Headings.	65
Section 9.05 Severability.	65
Section 9.06 Entire Agreement.	65
Section 9.07 Successors and Assigns.	65
Section 9.08 No Third-Party Beneficiaries.	66
Section 9.09 Amendment and Modification; Waiver.	66
Section 9.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.	66
Section 9.11 Specific Performance.	67

iii

Section 9.12 Counterparts.	67
Section 9.13 Attorney-Client Privilege; Continued Representation.	67

iv

STOCK CONTRIBUTION AND PURCHASE AGREEMENT

This Stock Contribution and Purchase Agreement (this “Agreement”), dated as of June 26, 2019 (the “Effective Date”), is entered into by and between Michael Auriemma, an individual (the “Seller”), and Roundtable Acquisition, LLC, a Delaware limited liability company (“Buyer”).

RECITALS

WHEREAS, Seller owns all of the issued and outstanding shares of common stock, par value One Dollar ($1.00) per share (the “Shares”) of Auriemma Consulting Group, Inc., a New York corporation (the “Company”);

WHEREAS, following the consummation of the Restructuring, at the Closing, the Seller desires to contribute all of the Contributed Shares to Roundtable Equity Holdings, LLC, a Delaware limited liability company (“Parent”), and Parent desires to accept the Contributed Shares from the Seller upon the terms and subject to the conditions set forth herein; and

WHEREAS, following the consummation of the Restructuring, at the Closing, the Seller desires to sell the remaining portion (i.e., all of the Acquired Shares other than the Contributed Shares) of the Acquired Shares to Buyer, and Buyer desires to purchase such Shares from the Seller upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

The following terms have the meanings specified or referred to in this Article I:

“ACA” has the meaning set forth in Section 3.16(j).

“Accounting Principles” means GAAP, except for the specific deviations from GAAP set forth on Section 3.06(b) of the Disclosure Schedules, consistently applied.

“Acquired Shares” means all of the outstanding Shares.

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” has the meaning set forth in the preamble.

“Benefit Plan” has the meaning set forth in Section 3.16(a).

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“Business Day” means any day except Saturday, Sunday or any other day on which commercial banks located in New York, New York are authorized or required by Law to be closed for business.

“Business Employee” means each employee of the Company whose employment is primarily related to the U.S. Roundtables Business and is identified as a “Business Employee” in Section 3.17(d) of the Disclosure Schedules as an employee intended to remain with the Company immediately following the Closing (assuming his or her employment continues until then).

“Buyer” has the meaning set forth in the preamble.

“Buyer Closing Certificate” means a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, certifying that each of the conditions set forth in Section 6.03(a) and Section 6.03(b) has been satisfied.

“Buyer Indemnified Parties” has the meaning set forth in Section 7.01.

“Buyer Secretary’s Certificate” means a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of Buyer certifying and attaching (a) copies of Buyer’s Organizational Documents; (b) true and complete copies of all resolutions adopted by the board of directors or equivalent governing body of Buyer authorizing Buyer’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby; and (c) the names and signatures of the officers of Buyer authorized to sign this Agreement and the other documents to be delivered hereunder by Buyer.

“Cash Purchase Price” has the meaning set forth in Section 2.02(b).

“Cash-to-Accrual Taxes” means the positive difference, if any, between (1) Taxes of Parent, Buyer, and/or the Company for a Post-Closing Tax Period taking into account all items of income, gain, loss, deductions, and adjustments attributable to the Cash-to-Accrual Method Change and (2) hypothetical Tax liability of Parent, Buyer, and/or the Company for such Post-Closing Tax Period, calculated by excluding all items of income, gain, loss, deductions, and adjustments attributable to the Cash-to-Accrual Method Change; provided that, clauses (1) and (2) shall be calculated by excluding the Reap Tax Credits and NYC NOL Carryover.

“Cash-to-Accrual Method Change” means the Company’s change from the cash method to the accrual method of accounting for income Tax purposes.

“Claim” has the meaning set forth in Section 3.13.

“Closing” has the meaning set forth in Section 2.04.

“Closing Cash” means, collectively, the aggregate amount of all cash and cash equivalents of the Company as of Closing, including all petty cash, in each case, determined as of the Reference Time on a basis consistent with the Accounting Principles; provided, that Closing Cash will (a) be calculated net of issued but uncleared checks and drafts, and (b) exclude (i) restricted cash, (ii) cash on deposit from third parties held by the Company, (iii) cash deposited with third parties, and (iv)

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all cash held which is designated for use in connection with any cash collateralized letters of credit, performance bonds, surety bonds or similar arrangements.

“Closing Date” has the meaning set forth in Section 2.04.

“Closing Indebtedness” means the Indebtedness of the Company as of immediately prior to the Closing as determined in accordance with GAAP.

“Closing Payment” has the meaning set forth in Section 2.02(c).

“Closing Statement” has the meaning set forth in Section 2.05(b).

“Closing Statement Objection Notice” has the meaning set forth in Section 2.05(c).

“Closing Transaction Expenses” means all Transaction Expenses to the extent not paid in full immediately prior to the Closing, including the amounts payable to Portico Capital and Venable LLP.

“Closing Valuation” has the meaning set forth in Section 2.02(b).

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the recitals.

“Company Continuing Employee” has the meaning set forth in Section 5.05(a).

“Company Intellectual Property” means all Intellectual Property owned by the Company and used by the Company in connection with the U.S. Roundtables Business.

“Company IP Registrations” has the meaning set forth in Section 3.11(b).

“Company Secretary’s Certificate” means a certificate of the Secretary or an Assistant Secretary (or equivalent officer) of the Company certifying and attaching copies of the Organizational Documents of the Company and that all such Organizational Documents are in full force and effect; and (b) true and complete copies of all resolutions adopted by the board of directors or equivalent governing body of Company authorizing Company’s execution, delivery and performance of the transactions contemplated hereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby.

“Confidential Information” means all confidential or proprietary information (whether or not specifically labeled or identified as “confidential”), in any form or medium, that relates to the business, products, services or research or development of the U.S. Roundtables Business or any of its vendors, suppliers, distributors, clients, customers, employees, independent contractors or other business relations. Confidential Information includes the following: (a) internal business information (including historical and projected financial information and budgets and information relating to strategic and staffing plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures and accounting and business methods); (b) identities of, individual requirements of, specific contractual arrangements with, and other

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confidential or proprietary information about, the vendors, suppliers, distributors, clients, customers, employees, independent contractors or other business relations of the U.S. Roundtables Business and their confidential or proprietary information; (c) trade secrets, know‑how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; and (d) inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable). Confidential Information does not include any information that Seller can show (i) is generally available to and known by the public through no fault of Seller, any of his respective Affiliates or any of his respective Representatives, or (ii) is lawfully acquired by Seller, any of his respective Affiliates or any of his respective Representatives after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation.

“Confidentiality Agreement” means the Non-Disclosure Agreement, dated as of March 11, 2019, between Levine Leichtman Capital Partners, LLC and the Company.

“Contribution Date” has the meaning set forth in the recitals.

“Control of Defense Conditions” has the meaning set forth in Section 7.03(a).

“Current Assets” means the aggregate amount of the Company’s accounts receivable (net of an allowance for doubtful accounts equal to Fifty Thousand Dollars ($50,000), which allowance shall be excluded from the calculation of the Target Working Capital) determined in accordance with the Accounting Principles and in a manner consistent with the illustrative calculation of Net Working Capital set forth on Exhibit A.

“Current Liabilities” means the aggregate amount of the Company’s accounts payable, accrued expenses, deferred revenue and other current liabilities (excluding any accrued bonus or accrued vacation liability), in each case, determined in accordance with the Accounting Principles and in a manner consistent with the illustrative calculation of Net Working Capital set forth on Exhibit A.

“D&O Tail Policy” has the meaning set forth in Section 5.07(a).

“Data Security Laws” means all Laws relating to (a) the protection of Personal Information or Confidential Information, and (b) data security or breach notification, penalties and compliance with orders, including Laws concerning the reporting of cybersecurity incidents and data breaches.

“Data Security Policies” means each external written notice or policy of the Company relating to data security.

“Dataroom” means the electronic documentation site entitled Project Blue Mountain established by Intralinks on behalf of Seller.

“Direct Claim” has the meaning set forth in Section 7.03(b).

“Disclosure Schedules” means the Disclosure Schedules delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement.

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“Disputed Item” has the meaning set forth in Section 2.05(c).

“Dollars” or “$” means the lawful currency of the United States.

“Drop Dead Date” has the meaning set forth in Section 8.01(b)(ii).

“Earnout Opportunity” has the meaning set forth in Section 5.13(b).

“Effective Date” has the meaning set forth in the preamble.

“Employees” means those Persons employed by the Company as of immediately prior to the Closing.

“Encumbrance” means any lien, pledge, mortgage, deed of trust, security interest, charge, indenture, claim, easement, option, restriction, encroachment or other encumbrance.

“Enterprise Value” has the meaning set forth in Section 2.02(c).

“Entity Representative” has the meaning set forth in Section 7.05(g).

“Environmental Claim” means any action, suit, claim, investigation or other legal proceeding by any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, Release of, or exposure to, any Hazardous Materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

“Environmental Law” means any applicable Law, and any Governmental Order or binding agreement with any Governmental Authority: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); or (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any Hazardous Materials. The term “Environmental Law” includes the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

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“Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

“Equity Percentage” shall equal a percentage equal to (x) the aggregate amount of equity capital contributed (directly or indirectly) to Parent by EquityCo as of the Closing, divided by (y) the sum of (i) the aggregate amount of equity capital contributed (directly or indirectly) to Parent by EquityCo and (ii) the aggregate principal amount of subordinated notes issued to Roundtable Debtco, LLC pursuant to the Subordinated Note Purchase Agreement owned (directly or indirectly) as of the Closing. For clarity and the avoidance of doubt, clause (ii) in the foregoing sentence shall not include the value of the Seller Mezzanine and is the intent and understanding of the parties that the use of the “Equity Percentage” formula will result in the same mix of equity and subordinated debt for Rollover Seller as will be invested (directly or indirectly) by EquityCo and Roundtable Debtco, LLC in the Company.

“EquityCo” means USR Strategic Capital EquityCo, LLC, a Delaware limited liability company.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

“ERISA Affiliate” means any entity which is treated as a single employer with the Company pursuant to Section 414 of the Code or Section 4001(b) of ERISA.

“Escrow Agent” means American Stock Transfer & Trust Company, LLC.

“Escrow Agreement” means the Escrow Agreement to be entered into on the Closing Date among the Escrow Agent, Buyer and Seller, substantially in the form attached hereto as Exhibit B.

“Escrow Amount” means Four Hundred Thousand Dollars ($400,000).

“Escrow Funds” shall have the meaning set forth in Section 2.05(d).

“Estimated Closing Cash” has the meaning set forth in Section 2.05(a)(i).

“Estimated Closing Indebtedness” has the meaning set forth in Section 2.05(a)(i).

“Estimated Closing Statement” has the meaning set forth in Section 2.05(a)(i).

“Estimated Closing Transaction Expenses” has the meaning set forth in Section 2.05(a)(i).

“Estimated Closing Valuation” has the meaning set forth in Section 2.02(c).

“Estimated Working Capital” has the meaning set forth in Section 2.05(a)(i).

“Excess Amount” has the meaning set forth in Section 2.05(d).

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“Fraud” means a misrepresentation constituting an actual and intentional fraud (as opposed to any type of negligence or recklessness) under applicable governing Law.

“Fundamental Representations” means the representations and warranties of Seller contained in Section 3.01 (Organization and Authority of Seller), Section 3.02 (Title), Section 3.03 (Organization, Authority and Qualification of the Company), Section 3.04 (Capitalization), Section 3.05 (Noncontravention), Section 3.18 (Taxes), Section 3.21(Restructuring; Affiliate Transactions) and Section 3.22 (Brokers).

“GAAP” means United States generally acceptable accounting principles as in effect on December 31, 2018.

“Governmental Authority” means the United States or any federal, state, local, provincial or foreign government or political subdivision thereof, or any agency, authority or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court, commission or tribunal of any of the foregoing.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, ruling, determination, assessment or award of any Governmental Authority.

“Hazardous Materials” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture, solid, liquid, mineral or gas, in each case, whether naturally occurring or man-made, that is hazardous, acutely hazardous, toxic, or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated biphenyls.

“Indebtedness” means with respect to the Company at a particular time, without duplication, the aggregate amount of the following: (a) any indebtedness for borrowed money or issued in substitution for or exchange of indebtedness for borrowed money; (b) any indebtedness evidenced by any note, bond, debenture or other debt security; (c) the deferred purchase price of assets, property, goods or services, including without limitation any earn-out, seller note or similar payment obligation, and with respect to any conditional sale, title retention, consignment or similar arrangements (other than trade payables incurred in the ordinary course of business); (d) any commitment by which the Company assures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit); (e) any guaranty of payment or other obligation of payment in respect of indebtedness for borrowed money of a Person other than the Company; (f) any obligation to pay (i) amounts under a lease of personal property, (ii) any purchase money and/or (iii) any vendor financing, in each case, which is required to be classified as a capital lease in accordance with GAAP; (g) any indebtedness secured by an Encumbrance on a Person’s assets; (h) all obligations under acceptance credit, letters of credit or similar facilities; (i) all loans or advances received from, or other amounts owed to, Seller or any Affiliate of Seller; (j) Taxes due and payable of the Company for Pre-Closing Tax Periods that are known and quantifiable; and (k) all guarantee or keep well obligations in respect of obligations of the kind referred to in clauses (a) through (i) above, including, in each case, accrued and unpaid interest on any of the foregoing and all breakage costs, premiums, penalties, charges, fees, costs, expenses and other amounts, in each

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case to the extent due and payable, in connection with the payment and satisfaction in full of such obligations.

“Indemnified Party” has the meaning set forth in Section 7.05.

“Indemnifying Party” has the meaning set forth in Section 7.05.

“Independent Accounting Firm” means RSM US LLP, provided that if such firm declines to be retained or is otherwise unable to resolve the dispute, another nationally‑recognized, independent accounting firm reasonably acceptable to Buyer and Seller.

“Insurance Policies” has the meaning set forth in Section 3.12.

“Intellectual Property” has the meaning set forth in Section 3.11(a).

“Invoices” has the meaning set forth in Section 2.05(a)(iii).

“IRS” means the Internal Revenue Service.

“IT Systems” has the meaning set forth in Section 3.11(n).

“Key Customers” has the meaning set forth in Section 3.19(a).

“Key Vendors” has the meaning set forth in Section 3.19(b).

“Knowledge of Seller or Seller’s Knowledge” or any other similar knowledge qualification, means (i) the actual knowledge of Mike Viola and Marc Sacher with respect to the matter at issue, and (ii) the knowledge of Seller and Tom LaMagna after reasonable inquiry of such individual’s direct reports with respect to the matter at issue.

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

“Leases” has the meaning set forth in Section 3.10(a).

“License Agreements” has the meaning set forth in Section 3.11(c).

“Losses” means all losses, damages, liabilities, assessments, levies, fines, penalties, payments, awards, Taxes, judgments, interest, costs and expenses, including reasonable attorneys’, accountants’, investigators’ and experts’ fees and expenses.

“Material Adverse Effect” means an effect, change, event, circumstance, occurrence, state of facts or development that is, or could reasonably expected to be, materially adverse to the business, assets, liabilities, financial condition, operations or operating results of the U.S. Roundtables Business or the ability of Seller to consummate the transactions contemplated by this Agreement, other than any effect, change, event, circumstance, occurrence, state of facts or development arising or resulting from: (a) general business or economic conditions affecting the industries in which the Company operates (provided that such conditions do not affect the Company in a materially disproportional manner); (b) political or social conditions in the United States or any other

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geographic region in which the Company operates (provided that such conditions do not affect the Company in a materially disproportional manner), including the engagement by the United States in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States, or any of its territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States; (c) financial, banking or securities markets (including any disruption thereof and any decline in the price of any security or any market index); (d) changes in Law; or (e) the identity of Buyer or the announcement of this Agreement, the other agreements contemplated hereby or the transactions contemplated hereby or thereby; provided, that the exceptions in clauses (a)-(d) above shall apply only to the extent such effect, change, event, circumstance, occurrence, state of facts or development referred to in such exception does not have a disproportionate impact on the Company or the U.S. Roundtables Business relative to other Persons operating in the industries in which the Company operates.

“Material Contracts” has the meaning set forth in Section 3.09(a).

“Net Working Capital” means Current Assets minus Current Liabilities, in each case, determined as of the Reference Time in accordance with the Accounting Principles and in a manner consistent with the illustrative calculation of Net Working Capital set forth on Exhibit A; provided, that, except as specifically set forth herein or therein, any Closing Cash, current Tax assets and liabilities, deferred Tax assets and liabilities, Closing Indebtedness or Closing Transaction Expenses will be excluded from the computation of Net Working Capital.

“NewCo” means Aseage, LLC, a Delaware limited liability company.

“NewIPCo” means Michiamo, LLC, a Delaware limited liability company.

“New Platform” has the meaning set forth in Section 5.20(b).

“Non-Tax Agreement” means any agreement not dealing principally with the sharing, allocation, or indemnification of Taxes and in which the provisions dealing with Taxes are of a type typically included in such agreements (such as acquisition agreements, employment agreements, leases and loan agreements).

“NYC NOL Carryover” means the excess, if any, of (a) the net operating loss, for New York City income Tax purposes, of the Company for a hypothetical taxable period that ends on the Closing Date and (b) the net operating loss, for New York City income Tax purposes, of the Company for a hypothetical taxable period that ends on the Closing Date, calculated by excluding the NYC Tax Deductions.

“NYC Tax Deductions” means, without duplication, to the extent deductible, for New York City income Tax purposes, by the Company in a Tax period that includes the Closing Date, the transaction bonuses made by the Company prior to the Closing in connection with the transactions contemplated by this Agreement.

“Objection Period” has the meaning set forth in Section 2.05(c).

“Officer” has the meaning set forth in Section 5.07(a).

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“Organizational Documents” means the certificate of incorporation, articles of organization, limited liability company agreement or bylaws of any Person, as applicable.

“Parent” has the meaning set forth in the Recitals.

“Parent LLC Agreement” means the Limited Liability Agreement of Parent to be entered into on the Closing Date by and among Parent, Seller and the other parties thereto, substantially in the form attached hereto as Exhibit D.

“Pay-Off Letters” has the meaning set forth in Section 2.05(a)(ii).

“PEO” means Extensis or other professional employer organization.

“Permits” means all permits, licenses, franchises, approvals, authorizations, and consents issued by or obtained from any Governmental Authorities.

“Permitted Encumbrances” has the meaning set forth in Section 3.10(b).

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

“Personal Information” means information (i) that relates to, or can reasonably be linked to, an identified or identifiable individual, or (ii) for which receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disclosure, transfer, destruction or disposal is governed by applicable Privacy Laws.

“Post-Closing Tax Period” means any taxable period beginning after the Closing Date and the portion after the Closing Date for any Straddle Period.

“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion through the end of the Closing Date for any Straddle Period.

“Pre-Closing Taxes” means, without duplication, (a) Taxes of the Company for all Pre-Closing Tax Periods, (b) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company (or any predecessor) is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulation §1.1502-6 or any analogous or similar state, local, or non-U.S. law or regulation, (c) the costs of preparing, amending or defending any Tax Return for a Pre-Closing Tax Period, provided that, any such amounts for any Tax Return for a Straddle Period shall be allocated to the Pre-Closing Tax Period using the methodology set forth in Section 5.15(d), (d) any and all Taxes of any person imposed on the Company as a transferee or successor, by contract (for Taxes imposed by contract, only Taxes for a Pre-Closing Tax Period) or pursuant to any law, rule, or regulation, which Taxes relate to an event or transaction occurring before the Closing, (e) Taxes attributable to the Restructuring, (f) Cash-to Accrual Taxes, and (g) interest, fines, and penalties of the Company for its failure to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) for Pre-Closing Tax Periods (but excluding, in each case, any Taxes of the Company that are imposed as a result of any action or transaction occurring on the Closing Date but after the Closing as a result of a non-ordinary course transaction and not attributable to the transactions contemplated under this Agreement).

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“Privacy Laws” means all Laws governing the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disclosure, transfer (including cross-border transfer), destruction or disposal of Personal Information.

“Privacy Policies” means each external written notice or policy of the Company, including all privacy policies published on the Company’s websites pertaining to the receipt, collection, compilation, use, storage, processing, sharing, safeguarding, security, disclosure, transfer (including cross-border transfer), destruction, disposal or other processing of any Personal Information.

“Privileged Communications” has the meaning set forth in Section 9.13.

“Purchase Price” has the meaning set forth in Section 2.02(a).

“Qualified Benefit Plan” has the meaning set forth in Section 3.16(b).

“R&W Insurance Policy” means that certain Representations and Warranties Insurance Policy issued by AIG Specialty Insurance Company for the benefit of Buyer as the named insured, substantially in the form attached hereto as Exhibit E.

“Reap Tax Credits” means carryforward of the Company’s New York City Relocation and Employment Assistance Program income Tax credit from a Pre-Closing Tax Period to a Post-Closing Tax Period.

“Real Property” means the real property owned, leased or subleased by the Company, together with all buildings, structures and facilities located thereon.

“Reference Time” means 12:01 a.m., Eastern time, on the Closing Date; provided, that the Reference Time (for Tax purposes only) is subject to adjustment pursuant to Section 5.15(e).

“Related Person” means without duplication, (a) Seller, (b) any Affiliate of the Company or Seller, and (c) any employee, officer, director, manager, equity holder, partner or member of any of the foregoing Persons.

“Release” means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including ambient air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture).

“Released Claims” has the meaning set forth in Section 5.17.

“Releasee” has the meaning set forth in Section 5.17.

“Releaser” has the meaning set forth in Section 5.17.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

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“Restricted Business” means any business or entity which (i) engages in the U.S. Roundtables Business as presently conducted or proposed to be conducted as of the Effective Date, or (ii) otherwise competes with or is a replacement or substitute for the U.S. Roundtables Business as presently conducted or proposed to be conducted as of the Effective Date.

“Restricted Period” has the meaning set forth in Section 5.18(b).

“Restructuring” means that certain transaction whereby: (a) the Company caused or shall cause NewCo to be formed as a wholly-owned subsidiary of the Company; (b) the Company shall transfer, assign and convey to NewCo, and NewCo shall accept from the Company, the Spun-Out Assets and the Liabilities arising out of such Spun-Out Assets; (c) the Company shall distribute all of the equity in NewCo to the Seller; and (d) the Company and NewCo shall enter into modifications with, and NewCo will provide reasonable assurances to, certain counter-parties to the Shared Contracts if required by such counter-parties in a manner mutually agreeable to Buyer and Seller, so that upon the consummation of the Restructuring, other than as contemplated by Section 5.19, the Company owns and holds only the U.S. Roundtables Business and its associated assets and Liabilities; provided, that, for the avoidance of doubt, nothing in the foregoing clause (d) shall be deemed to be a condition precedent to the Closing of either Buyer or Seller.

“Rollover Interests” means an aggregate amount of Class A Units (as defined in the Parent LLC Agreement) of Parent issued to the Seller, at a price equal to $1,000 per Class A Unit, in exchange for the Contributed Shares in accordance with the terms of the Subscription Agreement.

“Rollover Value Amount” equals the product obtained from multiplying (i) $10,600,000, by (ii) the Equity Percentage.

“RWI Deductible” has the meaning set forth in Section 7.05(b).

“Seller” has the meaning set forth in the preamble.

“Seller Closing Certificate” means a certificate, dated the Closing Date and duly executed by Seller, certifying that each of the conditions set forth in Section 6.02(a) and Section 6.02(b) has been satisfied.

“Seller Indemnified Parties” has the meaning set forth in Section 7.02.

“Seller Mezzanine Note” means a subordinated note, in the form attached as Exhibit G hereto, issued by Buyer to Seller in the aggregate principal amount equal to the Seller Mezzanine Note Amount.

“Seller Mezzanine Note Amount” equals (i) $10,600,000, minus (ii) the Rollover Value Amount.

“Shares” has the meaning set forth in the recitals.

“Shared Contracts” means certain Contracts identified on Section 3.09(a) of the Disclosure Schedules containing provisions relating to both the U.S. Roundtables Business and certain of the Spun-Out Assets.

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“Shortfall Amount” has the meaning set forth in Section 2.05(d).

“Software” means any and all (a) computer software and firmware (in object code or source code format), (b) computer programs, including any and all software implementation of algorithms, models and methodologies whether in source code or object code, (c) databases, compilations and computations, including any and all data and collections of data, (d) descriptions, schematics, flow charts and other specifications related to the design, development or maintenance of any of the foregoing, (e) documentation, including user manuals and training materials, relating to any of the foregoing, and (f) the content and information contained in any website.

“Specified Shared Contracts” means the Shared Contracts set forth on Section 1.01(a) of the Disclosure Schedules and any Shared Contract entered into between the Effective Date and the Closing Date that the Seller adds to Section 1.01(a) of the Disclosure Schedules.

“Spun-Out Assets” means all of the assets and business lines of the Company other than the U.S. Roundtables Business, including the UK Subsidiary, and the business lines of the Company known as Partnerships, Research and Finance, and non-U.S. Roundtables.

“Spun-Out Business Services” has the meaning set forth in Section 5.19(b).

“Spun-Out Sites” has the meaning set forth in Section 5.20(b).

“Straddle Period” means any taxable period that includes (but does not end on) the Closing Date.

“Straddle Period Tax Returns” has the meaning set forth in Section 5.15(b).

“Subordinated Note Purchase Agreement” means that certain Senior Subordinated Note Purchase Agreement, dated as of the Closing Date, by and among the Company, Roundtable Debtco, LLC, and the other Persons parties thereto from time to time, as amended, modified, supplemented or restated from time to time.

“Subscription Agreement” has the meaning set forth in Section 2.03(c)(vi).

“Target Working Capital” means negative Two Million Dollars (-$2,000,000).

“Tax Return” means any return, declaration, report, claim for refund, information return or statement or other document required to be filed with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Taxes” means all federal, state, local, foreign and other income, gross receipts, sales, use, ad valorem, transfer, franchise, registration, profits, license, service, service use, withholding, payroll, employment, escheat, unclaimed property, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, and any other tax of any kind whatsoever, and customs, duties or other fees, assessments or charges in the nature of taxes, together with any interest, fines, additions or penalties with respect thereto.

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“Third-Party Claim” means any Claim by a Person (other than an Indemnified Party) against any Indemnified Party or to which any Indemnified Party is subject.

“Trademark License Agreement” means that certain Trademark Assignment and License Agreement to be entered into on the Closing Date by and among the Company, NewCo and the other parties thereto, substantially in the form attached hereto as Exhibit H.

“Transaction Documents” means this Agreement, the Escrow Agreement, the Subscription Agreement and the certificates to be delivered at Closing pursuant to the terms of this Agreement.

“Transaction Expenses” means, without duplication, the aggregate amount of (a) all fees, commissions, costs and expenses incurred by the Company or Seller (to the extent the Company pays or is obligated to pay such fees and expenses incurred by Seller), including (i) all brokerage or finders’ fees or agents’ commissions or any similar charges, (ii) all legal, accounting, financial advisory, consulting and other fees and expenses of third parties, (iii) any transaction, incentive or stay bonus or severance, termination, equity incentive based, “phantom” equity, stock appreciation rights or change of control payment payable to any Person by the Company as a result of the consummation of the transactions contemplated by this Agreement, (b) any other liabilities or obligations for (i) employee bonuses or commissions unpaid as of the Closing Date (even if such bonus or commission obligations are not accrued), (ii) any amounts owed to Marc Sacher, including, but not limited to, payments under his existing employment agreement due and payable as a result of the Closing, (iii) special bonuses, profit sharing distributions, Company-funded 401k distributions, or any similar types of incentive arrangements offered by the Company, (iv) post-termination of employment payments that become due and payable as a result of the consummation of the transactions contemplated by this Agreement, and (v) the employer’s share of any payroll Taxes attributable to any amounts described in the immediately preceding clauses (i)-(iv) treated as wages payable and any amounts payable to gross-up or make whole any Person for income or excise Taxes imposed with respect to any such payments (but only to the extent the Company is required to make such gross-up or make whole payments pursuant to a written agreement entered into by the Company prior to the Closing), and (c) fifty percent (50%) of the premium for the D&O Tail Policy, which 50% portion shall not exceed $6,000; provided, that Transaction Expenses shall not include any amount included in the calculation of Net Working Capital or Closing Indebtedness (in each case, in accordance with the respective definitions thereof).

“Transfer Taxes” has the meaning set forth in Section 5.15(a).

“Transition Services Agreement” means a transition services agreement in form and substance as attached as Exhibit F hereto.

“UK Subsidiary” means Auriemma Consulting UK Limited, a wholly-owned subsidiary of the Company.

“USRB Financials” has the meaning set forth in Section 3.06(a).

“U.S. Roundtables Business” means U.S. industry roundtables business of the Company as contributing to, and contemplated in, Section 1.01(c) of the Disclosure Schedules.

“VIZOR License Agreement” has the meaning set forth in Section 5.20(a).

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“WARN Act” means the federal Worker Adjustment and Retraining Notification Act of 1988, and similar state, local and foreign laws related to plant closings, relocations, mass layoffs and employment losses.

“Website Transition Period” has the meaning set forth in Section 5.20(b).

ARTICLE II

CONTRIBUTION, PURCHASE AND SALE

Section 2.01Contribution and Sale of Acquired Shares. On the terms and subject to the conditions set forth in this Agreement, on the Closing Date: (i) Parent shall acquire from the Seller, and the Seller shall contribute, convey, assign, transfer and deliver to Parent, the portion of the Acquired Shares (free and clear of any Encumbrance) indicated on Schedule 2.01 (the “Contributed Shares”) in exchange for the Rollover Interests (the “Equity Contribution”), and (ii) immediately following the consummation of the Equity Contribution, the Buyer shall purchase from the Seller, and the Seller shall sell, convey, assign, transfer and deliver to the Buyer, the remaining portion (i.e., all of the Acquired Shares other than the Contributed Shares) of the Acquired Shares (free and clear of any Encumbrance or restriction on transfer) indicated on Schedule 2.01 (the “Purchased Shares”) in exchange for the Cash Purchase Price plus the Seller Mezzanine Note.

Section 2.02Purchase Price for Acquired Shares.

(a)Subject to and in accordance with the terms and conditions set forth herein, the aggregate purchase price for the Acquired Shares shall be an amount equal to (i) the Cash Purchase Price, plus (ii) the Seller Mezzanine Note Amount received in respect of the issuance by the Buyer of the Seller Mezzanine Note to the Seller plus (iii) the Rollover Value Amount received in respect of the issuance by the Parent of the Rollover Interests to the Seller (collectively, the “Purchase Price”).

(b)For the purpose of this Agreement, the term “CashPurchase Price” means an amount equal to (i) the Enterprise Value, minus (ii) the Closing Transaction Expenses, minus (iii) the Closing Indebtedness, plus (iv) the Closing Cash, plus (v) the amount by which the Net Working Capital exceeds the Target Working Capital, minus (vi) the amount by which the Target Working Capital exceeds the Net Working Capital (in each case, with respect to the foregoing clauses (ii)-(vi), as finally determined pursuant to Section 2.05(c)) (the foregoing clauses (i)-(vi), the “Closing Valuation”), minus (vii) the Seller Mezzanine Note Amount, minus (viii) the Rollover Value Amount.

(c)The amount to be paid to Seller at the Closing for the Acquired Shares (the “Closing Payment”) shall be an amount equal to (i) Fifty Three Million Dollars ($53,000,000) (the “Enterprise Value”), minus (ii) the Estimated Closing Transaction Expenses, minus (iii) the Estimated Closing Indebtedness, plus (iv) the Estimated Closing Cash, plus (v) the amount by which the Estimated Working Capital exceeds the Target Working Capital, minus (vi) the amount by which the Target Working Capital exceeds the Estimated Working Capital (the foregoing clauses (i)-(vi), the “Estimated Closing Valuation”),minus (vii) the Seller Mezzanine Note Amount, minus (viii) the Rollover Value Amount, minus (ix) the Escrow Amount.

Section 2.03Closing Actions and Deliverables.

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(a)At the Closing, Buyer shall:

(i)pay the Closing Payment by wire transfer of immediately available funds to an account of Seller designated in writing by Seller;

(ii)deposit the Escrow Amount with the Escrow Agent by wire transfer of immediately available funds to an account designated by the Escrow Agent, which amount will be held for the purpose of securing the obligations of Seller under Section 2.05(d) and invested and disbursed in accordance with the terms of the Escrow Agreement;

(iii)pay, in accordance with the Pay-Off Letters, all Estimated Closing Indebtedness identified on Section 2.05(a)(ii) of the Disclosure Schedules, by wire transfer of immediately available funds pursuant to the Pay-Off Letters;

(iv)pay in full all of the Estimated Closing Transaction Expenses, (A) with respect to compensation to any current or former employee of the Company, through the payroll system of the Company less applicable withholding Taxes (as applicable and in no event later than the next payroll period in which such payment can be reasonably processed), or (B) with respect to any other Person, by wire transfer of immediately available funds in accordance with the Invoices;

(v)issue the Seller Mezzanine Note by Buyer to the Seller; and

(vi)cause Parent to issue to the Seller the Rollover Interests.

(b)At the Closing, Buyer shall also deliver to Seller the following, each in form and substance reasonably satisfactory to Seller:

(i)the Escrow Agreement, duly executed by Buyer and the Escrow Agent, which shall be in full force and effect as of the Closing;

(ii)the Buyer Closing Certificate;

(iii)the Buyer Secretary’s Certificate;

(iv)the Transition Services Agreement, duly executed by Buyer;

(v)the Subscription Agreement related to the Rollover Interests, duly executed by Parent; and

(vi)the Trademark License Agreement, duly executed by a post-closing officer of the Company; and

(vii)the Parent LLC Agreement, duly executed by Parent.

(c)At the Closing, Seller shall deliver to Buyer the following, each in form and substance reasonably satisfactory to Buyer:

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(i)stock certificates evidencing assignments of the Contributed Shares to Parent and the Purchased Shares to the Buyer, in each case, free and clear of Encumbrances, duly endorsed in blank or accompanied by stock powers or other instruments of transfer duly executed in blank;

(ii)the Escrow Agreement, duly executed by Seller, which shall be in full force and effect as of the Closing;

(iii)the Seller Closing Certificate;

(iv)the Company Secretary’s Certificate;

(v)the Transition Services Agreement, duly executed by the Seller;

(vi)the contribution and subscription agreement pursuant to which Parent will issue the Rollover Interests to the Seller, in the form attached hereto as Exhibit C (the “Subscription Agreement”), duly executed by the Seller;

(vii)a counterpart signature page to the Parent LLC Agreement, duly executed by Seller;

(viii)a duly executed certificate prepared in accordance with Treasury Regulations Section 1.1445-2 certifying Seller’s non-foreign status, duly executed by Seller;

(ix)duly executed copies of the agreements and other documents evidencing and effecting the Restructuring, which shall be in substantially the form as attached to Schedule 3.21(b);

(x)a closing bonus acknowledgement and general release of claims, duly executed by (i) Marc Sacher and (ii) each Business Employee receiving any an transaction bonus, change of control or similar payment as defined in clause (a)(iii) of the definition of Transaction Expenses;

(xi)a CD-ROM containing all of the material that has been made available to Buyer through the Dataroom; and

(xii)the Trademark License Agreement, duly executed by NewCo and NewIPCo.

Section 2.04Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) will take place at the offices of Venable LLP, located at Rockefeller Center, 1270 Avenue of the Americas, 24th Floor, New York, NY 10020, two (2) Business Days after the last of the conditions to Closing set forth in Article VIhave been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date) or such other place or other date as Buyer and Seller may mutually agree; provided that in no event shall the Closing occur prior to the date which is ten (10) Business Days following the date of this Agreement. The parties hereto intend that the Closing be effected, to the extent practicable, by conference call, the electronic delivery of documents and the prior physical exchange of certain documents and instruments to be held in escrow by outside counsel to the recipient party pending authorization of their release at the Closing by the delivering party (or its outside counsel). The Closing will be deemed to occur as of the Reference Time and the date on which the Closing occurs is referred to herein as the “Closing Date”.

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Section 2.05Purchase Price Adjustments.

(a)At least three (3) Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer:

(i)a statement in writing (the “Estimated Closing Statement”) setting forth Seller’s good faith estimate of (A) the Closing Transaction Expenses (“Estimated Closing Transaction Expenses”), (B) the Closing Indebtedness (“Estimated Closing Indebtedness”), (C) the Closing Cash (“Estimated Closing Cash”), (D) the Net Working Capital (“Estimated Working Capital”) and (E) the resulting calculation of the Estimated Closing Valuation and the Closing Payment;

(ii)pay-off letters (the “Pay-Off Letters”) with respect to the Estimated Indebtedness identified on Section 2.05(a)(ii) of the Disclosure Schedules (each of which shall (A) include wire instructions for delivery of the applicable pay-off amount set forth therein, (B) provide for the release and discharge, subject to the receipt of the applicable pay-off amount, of all Encumbrances, security interests and guarantees related to such Indebtedness, and (C) authorize Buyer to file terminations evidencing such release and discharge upon delivery of the applicable pay-off amount); provided, that, for the avoidance of doubt, the Company shall be fully-released at the Closing of any Encumbrances, security interests and guarantees in favor of HSBC; and

(iii)invoices (the “Invoices”) for all Estimated Closing Transaction Expenses to be paid by Buyer at the Closing pursuant to Section 2.03(a)(iv) (each of which shall include wire instructions for delivery of the applicable amount set forth therein).

(b)As soon as practicable (and in any event within ninety (90) days following the Closing Date), Buyer shall prepare and deliver to Seller a statement in writing (the “Closing Statement”) setting forth in reasonable detail Buyer’s calculations of (A) the Closing Transaction Expenses, (B) the Closing Indebtedness, (C) the Closing Cash, (D) the Net Working Capital and (E) the resulting calculation of the Closing Valuation and the Cash Purchase Price. The Closing Statement shall be prepared in a manner consistent with the Accounting Principles and in accordance with the definitions set forth in this Agreement.

(c)The Closing Statement and each of the components thereof shall be final, binding and conclusive on the parties hereto unless Seller provides written notice of any objections thereto to Buyer within thirty (30) days after Seller’s receipt of the Closing Statement (such thirty (30)-day period, the “Objection Period”), which objection notice must specifically identify in reasonable detail each item or amount in the Closing Statement disputed by Seller (a “Disputed Item”), the basis for such dispute and Seller’s proposed calculation of each Disputed Item (a “Closing Statement Objection Notice”). If Seller does not deliver a Closing Statement Objection Notice within the Objection Period, then the Closing Statement shall be deemed irrevocably accepted and agreed to by Seller in its entirety and shall not be subject to dispute, review or change. If Seller delivers a Closing Statement Objection Notice within the Objection Period, then Buyer and Seller shall attempt to resolve each Disputed Item during the thirty (30)-day period following Seller’s delivery of such Closing Statement Objection Notice, and each item or amount in the Closing Statement which is not a Disputed Item shall be deemed irrevocably accepted and agreed to by Seller and shall be final, binding and conclusive on the parties and shall not be subject to dispute, review or change. If Buyer and Seller are unable to resolve any Disputed Item set forth in the Closing

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Statement Objection Notice within such thirty (30)-day period, then Seller and Buyer shall, within fifteen (15) days, engage the Independent Accounting Firm to render a binding opinion resolving each unresolved Disputed Item in accordance with the provisions of this Agreement. Buyer and Seller will (i) within ten (10) Business Days of engaging the Independent Accounting Firm, deliver to the Independent Accounting Firm (with a copy concurrently delivered to the other party) a written statement setting forth such party’s calculation of each unresolved Disputed Item and the amount thereof, (ii) cooperate with the Independent Accounting Firm and provide to the Independent Accounting Firm such information as the Independent Accounting Firm may reasonably request, (iii) use commercially reasonable efforts to cause the Independent Accounting Firm to resolve such Disputed Items no later than thirty (30) days from engagement of the Independent Accounting Firm, and (iv) instruct the Independent Accounting Firm to set forth in a written statement its determination of such unresolved Disputed Items and the resulting calculation of the Cash Purchase Price based upon such determination and the items and amounts set forth in the Closing Statement that were not Disputed Items submitted to the Independent Accounting Firm. In connection with the resolution of the unresolved Disputed Items, the Independent Accounting Firm shall be given access to all documents, records, work papers, facilities and personnel of the Company, Buyer and Seller as it requests and as is reasonably necessary to resolve such Disputed Items. The Independent Accounting Firm shall review the submissions of Buyer and Seller and base its determination solely on such submissions and the documents it requested and were provided to it by the parties (i.e., not on the basis of an independent review and testimony). The scope of disputes to be resolved by the Independent Accounting Firm shall be limited to whether the Disputed Items submitted to the Independent Accounting Firm were properly calculated in accordance with the terms of this Agreement and the Independent Accounting Firm shall apply the provisions of this Section 2.05 to such Disputed Items, and shall not have any authority or power to alter, modify, amend, add to or subtract from any term or provision of this Agreement. No party nor any of their respective representatives or Affiliates shall have any ex parte communications or meetings with the Independent Accounting Firm regarding the subject matter hereof without the prior written consent of Buyer and Seller. In resolving the unresolved Disputed Item, the Independent Accounting Firm may not assign a value to any such Disputed Item that is greater than the highest value for such Disputed Item claimed by Buyer or Seller, or less than the lowest value for such Disputed Item claimed by Buyer or Seller. Unless the determination by the Independent Accounting Firm is the result of Fraud by either party or the Independent Accounting Firm, or manifest error by the Independent Accounting Firm, the determination of the Independent Accounting Firm shall be deemed final, binding and non-appealable by all of the parties hereto and not subject to dispute, review or change, and shall be enforceable by a court of competent jurisdiction. Any expense of Buyer or its accountants or other representatives incurred in connection with the resolution of such unresolved Disputed Items by the Independent Accounting Firm will be borne exclusively by Buyer, and any expense of Seller or his accountants or other representatives incurred in connection with the resolution of such unresolved Disputed Items by the Independent Accounting Firm will be borne exclusively by Seller. Each party shall bear its own costs and expenses in connection with the resolution of such unresolved Disputed Items by the Independent Accounting Firm. Any fees, costs and expenses of the Independent Accounting Firm shall be allocated between Buyer, on the one hand, and Seller, on the other hand, so that the amount of such fees, costs and expenses paid by Buyer (with the remainder of such amount being paid by Seller) shall be equal to the product of (A) and (B), where (A) is the aggregate amount of such fees, costs and expenses of the Independent Accounting Firm, and where (B) is a fraction, the numerator of which is the aggregate amount of the unresolved Disputed Items submitted to the Independent Accounting Firm that is ultimately

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unsuccessfully disputed by Seller (as determined by the Independent Accounting Firm) and the denominator of which is the aggregate amount of the unresolved Disputed Items submitted to the Independent Accounting Firm.

(d)If the Estimated Closing Valuation exceeds the Closing Valuation (as finally determined pursuant to Section 2.05(c)) (such excess, the “Excess Amount”), then (i) Buyer and Seller shall jointly instruct the Escrow Agent to release to Buyer, by wire transfer of immediately available funds to an account designated by Buyer, an amount equal to the lesser of (A) the Excess Amount and (B) the amount of the then-remaining Escrow Funds, (ii) to the extent the Excess Amount exceeds the then-remaining Escrow Funds, Seller will have the obligation to pay an amount equal to such excess to Buyer, by wire transfer of immediately available funds to an account designated by Buyer, and (iii) to the extent there are Escrow Funds remaining after the payment to Buyer set forth in clause (i) above, Buyer and Seller shall jointly instruct the Escrow Agent to release such remaining Escrow Funds to Seller, by wire transfer of immediately available funds to an account designated by Seller. If the Closing Valuation (as finally determined pursuant to Section 2.05(c)) exceeds the Estimated Closing Valuation (such excess, the “Shortfall Amount”), then (x) Buyer will pay, or cause the Company to pay, to Seller, by wire transfer of immediately available funds to an account designated by Seller, the Shortfall Amount, and (y) Buyer and Seller shall jointly instruct the Escrow Agent to release to Seller, by wire transfer of immediately available funds to an account designated by Seller, all of the then-remaining Escrow Funds. Any amount to be paid pursuant to this Section 2.05(d) will be paid within three (3) Business Days of the final determination of the Closing Valuation pursuant to Section 2.05(c) and will be treated as an adjustment to the Closing Payment for all purposes. As used herein, “Escrow Funds” means the Escrow Amount, plus all interest and earnings earned from the investment and reinvestment thereof.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the Disclosure Schedules, Seller represents and warrants to Buyer as of the date hereof and as of the Closing as follows:

Section 3.01Organization and Authority of Seller. Seller has the requisite power and authority to enter into the Transaction Documents to which Seller is or will be a party, to carry out Seller’s obligations thereunder and to consummate the transactions contemplated thereby. This Agreement has been, and the other Transaction Documents to which Seller will be a party, will be at the Closing, duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes, and when executed at the Closing the other Transaction Documents to which Seller will be a party will constitute, a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

Section 3.02Title. Seller owns, beneficially and of record, the Acquired Shares free and clear of all Encumbrances (other than transfer restrictions arising under securities Laws generally). Seller owns, beneficially and of record, all of the issued and outstanding shares of capital stock of Seller free and clear of all Encumbrances (other than transfer restrictions arising under securities Laws generally).

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Section 3.03Organization, Authority and Qualification of the Company. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the state of New York and has all necessary corporate power and authority to own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its business as it is currently conducted. The Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing is not material to the operation of the U.S. Roundtables Business. All corporate actions taken or to be taken by the Company in connection with the transactions contemplated by this Agreement have been, or will be prior to the Closing, duly authorized or ratified by all necessary corporate action of the Company.

Section 3.04Capitalization.

(a)The authorized capital stock of the Company consists of One Hundred (100) shares of common stock, par value One Dollar ($1.00), of which One Hundred (100) shares are issued and outstanding and constitute the Shares. All of the Shares have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by Seller, free and clear of all Encumbrances.

(b)There are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of the Company or obligating Seller or the Company to issue or sell any shares of capital stock of, or any other interest in, the Company. The Company does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares of the Company.

(c)As of the date hereof, other than the UK Subsidiary, NewCo and NewIPCo, the Company does not own or control, directly or indirectly, or otherwise have any interest in any units, shares or other ownership interest in, any other Person.

(d)As of immediately prior to the Closing, the Company will not own or control, directly or indirectly, or otherwise have any interest in any units, shares or other ownership interest in, any other Person.

Section 3.05Noncontravention. None of the execution, delivery or performance by Seller of the Transaction Documents to which he is a party, nor the consummation of the transactions contemplated thereby, will (a) conflict with or result in a breach of any of the terms, conditions or provisions of the Organizational Documents of the Company, (b) assuming the receipt, delivery and/or filing of each consent, approval, authorization, Permit, Governmental Order, declaration, filing and notice set forth on Section 3.05 of the Disclosure Schedules, violate or result in a breach of or constitute a default under any Law, or under any Governmental Order to which the U.S. Roundtables Business, Seller or any of their respective properties or assets is subject, (c) assuming the receipt, delivery and/or filing of each consent, approval, authorization, Permit, Governmental Order, declaration, filing and notice set forth on Section 3.05 of the Disclosure Schedules, conflict with, or result in the material breach of, or constitute a material default under, or result in the termination, cancellation, modification or acceleration (whether after the filing of notice or the lapse

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of time or both) of any material right or obligation of the U.S. Roundtables Business or Seller under, or result in a loss of any material benefit to which the U.S. Roundtables Business or Seller is entitled under, any unexpired, undischarged or unsatisfied Material Contract; or (d) result in the creation of any Encumbrance upon any of the properties or assets of the U.S. Roundtables Business or Seller. No consent, approval, authorization, Permit or Governmental Order of, declaration or filing with, or notice to, any Governmental Authority or other third Person is required by or with respect to Seller or the U.S. Roundtables Business in connection with the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby, except for such filings as are set forth in Section 3.05 of the Disclosure Schedules.

Section 3.06Financial Condition.

(a)Attached as Schedule 3.06(a) of the Disclosure Schedules hereto are copies of (i) the reviewed balance sheet of the Company (inclusive of U.S. Roundtables Business and the Spun-Out Assets) as of December 31, 2017, December 31, 2018 and March 31, 2019, and the related reviewed statements of income and cash flows for the fiscal years 2017 and 2018 and the three month period ending March 31, 2019 (collectively, the “Auriemma Group Financial Statements”), and (ii) a statement of all material current assets and current liabilitiesof the U.S. Roundtables Business, as of March 31, 2019 and the related statements of income for the fiscal years 2017 and 2018 and the three month period ending March 31, 2019 (together, the “USRB Financials”).

(b)The Auriemma Group Financial Statements are complete, accurate, and fairly present, in all material respects, the financial position, assets and liabilities of the Company and results of operations of the Company, as of the respective dates thereof and for the periods indicated therein. The Auriemma Group Financial Statements have been prepared in accordance with GAAP as in effect at the date to which they were prepared, except as set forth on Schedule 3.06(b) of the Disclosure Schedules.

(c)The USRB Financials are derived from the Auriemma Group Financial Statements and presents fairlyall material current assets and current liabilitiesof the U.S. Roundtables Business, as of the dates presented therein, and the results of operations of the U.S. Roundtables Business for the periods covered by the USRB Financials, as of the dates presented therein. The USRB Financials are prepared in accordance with GAAP, except (x) as set forth on Schedule 3.06(c) of the Disclosure Schedules and (y) the economic entity assumption (i.e., not all expenses of the U.S. Roundtables Business are separately identifiable from the Company taken as a whole, but where such expenses relate to the Company taken as a whole, a good faith best estimate of allocations has been made, so as to present a materially accurate view of the results of operations of the U.S. Roundtables Business, as if the U.S. Roundtables Business were a standalone entity); provided that, notwithstanding the foregoing, there may be additional costs required to operate the U.S. Roundtables Business as a standalone enterprise, which additional costs are not, individually or in the aggregate, material to the results of operations of the U.S. Roundtables Business.

(d)The Auriemma Group Financial Statements and the USRB Financials have been prepared from the accounting books, records and accounts of the Company, which books, records and accounts of the Company are complete and correct in all material respects and represent actual, bona fide transactions.

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(e)The Company maintains a system of internal controls sufficient to provide reasonable assurance that transactions involving the U.S. Roundtables Business are properly authorized and accurately recorded.

(f)All notes and accounts receivable of the U.S. Roundtables Business are reflected properly on the books and records of the Company. The notes and accounts receivable have all arisen from bona fide transactions in the ordinary course of business, are valid receivables and are collectible in the ordinary course of business and are not subject to any contest, claim or right of setoff or counterclaim relating to the amount or validity thereof. There is no fact or circumstance to indicate that the collection of accounts receivable will be materially different than what has historically been customary for the U.S. Roundtables Business.

(g)As of the Closing, the Company will not have any liabilities for Indebtedness or Transaction Expenses other than the Closing Indebtedness and Closing Transaction Expenses.

Section 3.07Undisclosed Liabilities. The Company has no known liabilities, obligations or commitments, except (i) those which are specifically identified or reserved against in the Auriemma Group Financial Statements, and to the extent they relate to the U.S. Roundtables Business, identified or reserved against in the USRB Financials, (ii) those which relate to the U.S. Roundtables Business have been incurred in the ordinary course of business since the March 31, 2019 to the extent included in Net Working Capital as finally determined under this Agreement (none of which is a liability or obligation relating to any breach of contract, breach of warranty, tort, infringement, misappropriation, violation of Law, claim, action or proceeding, or an environmental liability), and (iii) those which have been set forth on Section 3.07 of the Disclosure Schedules.

Section 3.08Absence of Certain Changes, Events and Conditions. Except for the Restructuring which shall be consummated prior to the Closing, since March 31, 2019 the Company has conducted its business only in the ordinary course of business, and except as set forth on Section 3.08 of the Disclosure Schedules, since December 31, 2017 there has not been, with respect to the Company, any:

(a)Material Adverse Effect;

(b)amendment to the Organizational Documents of the Company;

(c)issuance, sale or other disposition of any of its capital stock or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock;

(d)declaration, payment, making or setting aside of any dividends or distributions on or in respect of any of its capital stock or any redemption, purchase or acquisition of its capital stock;

(e)change in any accounting methods, principles or practices of the Company, except as required by applicable Law;

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(f)incurrence, assumption, issuance, creation or guarantee of any Indebtedness involving more than $100,000;

(g)sale or other disposition of any of the assets of the U.S. Roundtables Business involving more than $100,000, except in the ordinary course of business;

(h)increase in the compensation of Employees of the U.S. Roundtables Business, other than normal periodic increases of not more than seven percent (7%) in the ordinary course of business;

(i)adoption, amendment, termination or modification of any Benefit Plan, other than in the ordinary course of business or as required by Law;

(j)acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;

(k)adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

(l)adoption or execution of a contract of the U.S. Roundtables Business involving net new business to the Company of more than $160,000 projected for the subsequent twelve (12) months, or causing the acceleration, termination, modification or cancellation of any contract involving more than $160,000 payable to the Company to which the Company is a party;

(m)adoption or execution of a contract of the U.S. Roundtables Business involving the payment of more than $160,000, or causing the acceleration, termination, modification or cancellation of any contract involving more than $160,000 payable by the Company to which the Company is a party;

(n)imposition of any Encumbrance (other than Permitted Encumbrances) upon any material assets of the Company;

(o)payment of, or commitment to make, any capital expenditure in excess of $100,000 in the aggregate;

(p)failure to promptly pay and discharge current liabilities except for current liabilities not material in amount that are disputed in good faith by appropriate proceedings;

(q)adoption, revocation or amendment of any material Tax election or Tax accounting method, settlement or compromise of any Tax liability, filing of any material Tax Return other than in the ordinary course of business and on a basis consistent with past practice, filing of any amended material Tax Return, surrender of any right to a material refund of Taxes, extension or waiver of any statute of limitations or other period for assessment of any Tax, or initiation of any voluntary disclosure agreement or similar process with respect to any Taxes;

(r)action or failure to take any action that, in either case, intended to have the effect of accelerating to the pre-Closing period any revenue from or sales to customers that would otherwise

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be expected to occur after the Closing, or any other intentional and material modification of the Company’s billing practices;

(s)material delay or material acceleration of (i) the payment or incurrence of any accounts payable or other liabilities from the date such liability would have been paid or incurred in the ordinary course of business, or (ii) the collection or receipt of any accounts receivable outside the ordinary course of business;

(t)material revaluation of the Company’s assets, including writing off or writing down notes or accounts receivable or inventory;

(u)change in the Company’s cash management customs and practices other than in the ordinary course of business (including with respect to maintenance of working capital balances, collection of accounts receivable and payment of accounts payable); or

(v)adoption or execution of any agreement to do any of the foregoing, or any action or omission that, to the Knowledge of Seller, would result in any of the foregoing.

Section 3.09Material Contracts.

(a)Section 3.09(a) of the Disclosure Schedules lists each of the following contracts and other agreements of the U.S. Roundtables Business (together with all Leases and License Agreements, collectively, the “Material Contracts”):

(i)each individual agreement that provides for annual payments to the Company by the counterparty in excess of $160,000;

(ii)each individual agreement that provides for annual payments by the Company to a third party in excess of $160,000;

(iii)all master services agreements pursuant to which the Company currently provides or agrees to provide services;

(iv)all Shared Contracts;

(v)all agreements with (A) any Key Customer or (B) any Key Vendor;

(vi)all agreements that relate to the sale of any of the Company’s assets either (A) outside the ordinary course of business, or (B) for consideration in excess of $75,000;

(vii)all agreements that relate to the acquisition by the Company of any stock or assets of any other Person or any real property (whether by merger, sale of stock, sale of assets or otherwise), in each case involving amounts in excess of $100,000;

(viii)except for agreements relating to trade payables incurred in the ordinary course of business, all agreements relating to Indebtedness (including guarantees of Indebtedness of third parties) of the Company;

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(ix)all agreements restricting or limiting in any manner the ability of the Company to compete with any Person or to solicit, hire or employ any Person, the ability of the Company to sell to or purchase from any Person, the ability of any Person to compete with the Company, or the ability of any Person to solicit, hire or employ any employee of the Company;

(x)agreements where the Company has (A) granted “most favored nation” pricing provisions, or (B) agreed to sell or provide a minimum quantity of goods or services or has agreed to sell or provide goods or services exclusively to a certain party;

(xi)agreements granting any right of first refusal, right of first offer, right of first negotiation or similar right or that could require the disposition of any assets or line of business of the Company;

(xii)agreements containing earn-out, deferred or contingent payment obligations on the part of the Company;

(xiii)guaranties, performance, bid or completion bonds, or surety agreements;

(xiv)partnership agreements or joint venture agreements;

(xv)agreements under which the Company has made advances or loans to any other Person (which shall not include routine advances made to an employee of the Company in the ordinary course of business);

(xvi)agreements for the employment or severance of any current or former employee, director or other service provider of the Company and pursuant to which the Company has, or could reasonably be expected to have, any actual or contingent liability or obligation to provide compensation and/or benefits in consideration for past, present or future services;

(xvii)settlement, conciliation or any similar agreements;

(xviii)agreements with any Governmental Authority; and

(xix)all agreements between or among the Company on the one hand and Seller or any Affiliate of Seller (other than the Company) on the other hand.

(b)Seller has made available to Buyer copies of each Material Contract. Except as set forth on Section 3.09(b) of the Disclosure Schedules: (i) each Material Contract is in full force and effect and constitutes a legal, valid and binding obligation of the Company and, to Seller’s Knowledge, each other party thereto, in each case, in accordance with the express terms thereof and except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to creditors’ rights generally and general principles of equity, regardless of whether asserted in a proceeding in equity or at law; and (ii) no material violation, breach or event of default, or alleged material violation, breach or event of default, or event or condition that, after notice or lapse of time or both, would constitute a material violation, breach or event of default thereunder, on the part of the Company or, to Seller’s Knowledge, any other party thereto, exists or has occurred thereunder. No party to any Material Contract has exercised any termination rights with respect thereto, and no party has given written or, to Seller’s Knowledge, other notice of any significant dispute with respect to any Material Contract.

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Section 3.10Real Property; Title to Assets.

(a)The Company does not own, and has never owned, any real property. Section 3.10(a) of the Disclosure Schedules lists all leases or subleases for real property to which the Company is a party or by which the Company is otherwise bound (collectively, “Leases”). Seller has made available to Buyer true and correct copies of all Leases.

(b)The Company has good and marketable title to, or a valid leasehold interest in, all of the personal property and other assets owned or leased by the Company or used in the conduct of the U.S. Roundtables Business as currently conducted (excluding, for the avoidance of doubt, the properties and assets distributed or to be distributed in connection with the Restructuring or otherwise disposed of in the ordinary course of business since March 31, 2019), in each case, free and clear of Encumbrances except for the following (collectively referred to as “Permitted Encumbrances”):

(i)those items set forth in Section 3.10(b) of the Disclosure Schedules;

(ii)Encumbrances for Taxes not yet due and payable or being contested in good faith by appropriate procedures and for which appropriate reserves have been established;

(iii)mechanics, carriers’, workmen’s, repairmen’s or other like Encumbrances arising or incurred in the ordinary course of business for sums not yet due; and

(iv)easements, rights of way, zoning ordinances and other similar restrictions or conditions of record which do not materially impair the occupancy or use of the Real Property for the purposes for which it is currently used in connection with the businesses of the Company.

The assets described in the preceding sentence (A) have been maintained in accordance with normal industry practices, (B) are in good operating condition and repair subject to normal wear and tear, (C) are fit for use by the Company in the ordinary course of business of the U.S. Roundtables Business, and (D) include all assets and properties necessary for the conduct of the U.S. Roundtables Business of the Company as presently conducted and the continued conduct thereof after the Closing in substantially the same manner as presently conducted.

Section 3.11Intellectual Property; Privacy and Data Security.

(a)“Intellectual Property” means any and all intellectual property or proprietary rights in any jurisdiction throughout the world, including: (i) trademarks, service marks, trade names, assumed names, trade dress and other indications of origin, and all associated goodwill, including any applications for registration, registrations and renewals thereof; (ii) copyrights, copyrightable works, designs and mask work rights including, and all applications and registrations related to any of the foregoing; (iii) trade secrets, know-how and confidential and/or proprietary information (including processes, methods, techniques, research and development, drawings, specifications, layouts, designs, formulae, algorithms, source code, plans, proposals, technical data, customer and vendor lists and price and cost information, provided that such information qualifies as trade secrets or confidential or proprietary information under the Law); (iv) patents, patent applications, patent disclosures, inventions, discoveries and ideas (whether patentable or unpatentable and whether or not reduced to practice), including applications, patents and any divisions, continuations,

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continuations-in-part, renewals, extensions and reissues; (v) internet domain names (including the websites associated therewith) and social media pages, and all registrations related to any of the foregoing; (vi) Software; (vii) all licenses and other contractual or intangible rights with respect to the foregoing, including all royalties, fees, income, payment and other proceeds now or hereafter due or payable with respect to any of the foregoing, and including remedies against past and future infringement, misappropriation, or dilution of any of the foregoing; in each case, whether registered or unregistered, and in any jurisdiction; and (viii) other intellectual property and related proprietary rights, interests and protections.

(b)Section 3.11(b) of the Disclosure Schedules sets forth a true and complete list of all (i) Company Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Authority (the “Company IP Registrations”), and (ii) material unregistered Company Intellectual Property, including Software. The Company IP Registrations are valid, subsisting, and enforceable and all applications are pending and in good standing, all without challenge of any kind.

(c)Section 3.11(c) of the Disclosure Schedules sets forth a true and complete list of (i) all contracts pursuant to which the Company has granted a license to any Company Intellectual Property and (ii) each item of Intellectual Property that any third party owns and that the Company uses in connection with the U.S. Roundtables Business pursuant to a contract with such third party (the contracts referred to in this Section 3.11(c), the “License Agreements”). Each License Agreement is valid and binding on the Company in accordance with its terms and is in full force and effect. Neither the Company nor any other party to any License Agreement (A) is, or is alleged to be, in breach or default of any License Agreement, or (B) has provided or received any notice of breach or default of, or intention to terminate (including by non-renewal), any License Agreement.

(d)The Company owns all right, title and interest in and to the Company Intellectual Property, free and clear of any Encumbrances. All employees, agents, consultants, and contractors who have participated in the creation, development, improvement or modification of any Company Intellectual Property have assigned all of their rights therein to the Company. The Company owns or possesses, or has the right to use pursuant to a valid and enforceable License Agreement, all Intellectual Property necessary for the operation of the U.S. Roundtables Business as currently conducted and as currently contemplated to be conducted, free and clear of all Encumbrances. Each item of Intellectual Property owned or used by the Company in connection with the U.S. Roundtables Business immediately prior to the Closing will be owned or available for use by the Company on identical terms and conditions immediately following the Closing. The consummation of the transactions contemplated by this Agreement will not alter or impair the Company’s ownership of, or any right of the Company to use, any of the Company Intellectual Property or any component thereof. The Company has taken all necessary action to maintain and protect each item of Company Intellectual Property that it owns or uses in connection with the U.S. Roundtables Business.

(e)Except as set forth in Section 3.11(e) of the Disclosure Schedules, the Company Intellectual Property and the Company’s conduct of the U.S. Roundtables Business, in each case, (i) do not infringe, dilute, misappropriate or otherwise violate the Intellectual Property of any Person, and (ii) during the past five (5) years have not infringed, diluted, misappropriated or otherwise violated the Intellectual Property of any Person. To Seller’s Knowledge, no Person is currently

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infringing, misappropriating, diluting, or otherwise using in any unauthorized manner any Company Intellectual Property.

(f)There are no Claims pending or threatened (including through written charge, complaint, claim, demand, or unsolicited offer to license), nor have any Claims been pending or threatened during the previous five (5) years, contesting the enforceability, validity, use or ownership of any Company Intellectual Property, or alleging that the Company (or the conduct of the U.S. Roundtables Business) (i) is currently infringing, diluting, misappropriating, or otherwise violating the Intellectual Property of any other Person, or (ii) has infringed, diluted, misappropriated, or otherwise violated the Intellectual Property of any other Person during the previous five (5) years. To Seller’s Knowledge, there is no basis for any such Claim. No Claim of infringement, misappropriation, dilution or other violation are pending or have been made or brought against any Person by the Company alleging infringement or misappropriation of any Company Intellectual Property, and there are no Claims currently pending that have been brought by the Company against any Person alleging infringement or misappropriation of any Company Intellectual Property.

(g)There are no settlements, injunctions, forbearances to sue, consents, judgments, orders or similar obligations to which the Company is a party or otherwise bound, in each case, which (i) restrict the rights of the Company to use any Company Intellectual Property, (ii) permit third Persons to use any Company Intellectual Property which would otherwise infringe any Company Intellectual Property. The Company has not licensed or sublicensed its rights in any Company Intellectual Property other than pursuant to the License Agreements, and no royalties, honoraria or other fees are payable by the Company for the use of, or right to use, any Company Intellectual Property except as provided under the License Agreements.

(h)The Company has taken all steps reasonable under the circumstances to (i) safeguard and maintain the secrecy and confidentiality of the trade secrets that are either part of the Company Intellectual Property or any Intellectual Property that the Company is otherwise bound by contract to safeguard and maintain, and (ii) protect the confidentiality of all Confidential Information of the Company, including, in each case, requiring all employees, contractors and third Persons having access thereto to execute written confidentiality and non-disclosure agreements. No Confidential Information or trade secrets have been disclosed by any Person bound by such confidentiality and non-disclosure obligations to any third Person who was not bound by a confidentiality and non-disclosure obligation to the Company of any such Confidential Information or trade secrets, and, to Seller’s Knowledge, no third Person that is a party to any confidentiality and non-disclosure agreement with the Company is in breach or default thereof. No Confidential Information or trade secrets of the Company have been improperly disclosed or misappropriated by another Person.

(i)Except as set forth on Section 3.11(i) of the Disclosure Schedules, the Company does not distribute to any Person any Software, whether proprietary to the Company or otherwise, including any source code thereof. All Software that is part of the Company Intellectual Property is owned by or licensed to the Company. All such Software (i) performs in conformance with its documentation in all material respects and (ii) is free from any material Software defect. None of such Software contains any undocumented self-help mechanism, virus, Trojan horse, worm or other Software routine or hardware component designed to permit unauthorized access or designed to disable a computer program automatically with the passage of time or under the positive control of a Person other than an authorized licensee or owner of the Software program. The Company is not

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bound by or a party to any contract pursuant to which (A) the Company is obligated to provide to any third Person any proprietary source code of any Software owned by the Company, or (B) the Company has deposited, or is or may be required to deposit, with an escrow agent or other Person, any such source code. No services or offerings of the Company or the U.S. Roundtables Business utilize Software that is distributed as “free software,” “open source software,” or pursuant to any license identified as an “open source license” by the Open Source Initiative (www.opensource.org/licenses) or other license that substantially conforms to the Open Source Definition (opensource.org/osd) (including the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), GNU Affero General Public License (AGPL), MIT License (MIT), Apache License, Artistic License, and BSD Licenses).

(j)The Company has a published privacy policy regarding the collection, use, and disclosure of Personal Information, which discloses the manner by which it collects, uses and transfers Personal Information. The Company is in material compliance with: (i) all applicable Privacy Laws and Data Security Laws, (ii) all of the Company’s Privacy Policies and Data Security Policies, and (iii) all privacy policies and notices and contractual obligations of the Company or by which the Company is subject, in each case, relating to privacy, data security, data protection and the collection, compilation, sharing, use, processing, storage, transfer, disclosure, destruction, or security from unauthorized disclosure of Personal Information.

(k)Except as set forth on Section 3.11(k) of the Disclosure Schedules, (i) there has been no unauthorized access to, disclosure or acquisition of, destruction, loss, or alteration of any Personal Information or Confidential Information maintained, held or collected by the Company, and (ii) there has been no breach involving any Personal Information maintained, held or collected by the Company. There is not, and never has been, any Claim pending or threatened against the Company alleging a violation of any Person’s privacy, data protection or data rights or of any Privacy Law, nor has there been any court decision or order restricting or limiting the use, transfer or disclosure by the Company of any Personal Information maintained, held or collected by the Company. The consummation of the transactions contemplated by this Agreement and the transfer of any information in connection therewith will not breach or otherwise cause any violation of any Privacy Laws.

(l)The Company takes commercially reasonable measures to ensure that all Personal Information in the Company’s possession, custody or control is protected against loss and against unauthorized access, use, modification, disclosure or other misuse. The Company has implemented a written security plan which implements and monitors commercially reasonable administrative, technical and physical safeguards designed to protect Personal Information.

(m)The Company is not subject to any contractual requirements, privacy policies or other legal obligations that, following the Closing, would prohibit Buyer from using Personal Information in the manner in which the Company uses such Personal Information prior to the Closing.

(n)The Company owns or has rights to access and use all the information technology systems used in connection with the U.S. Roundtables Business (“IT Systems”). The Company has taken reasonable measures consistent with prevailing industry practice to protect the IT Systems from unauthorized access, use, interruption, modification, corruption, and failure. The IT Systems, as a whole, are adequate and satisfactory in all material respects for the conduct of the U.S.

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Roundtables Business as currently conducted and as currently contemplated to be conducted, including as to capacity, scalability, and ability to process current and anticipated peak volumes in a timely manner. The IT Systems are in sufficiently good working condition to perform all information technology operations as necessary for the conduct of the U.S. Roundtables Business as currently conducted and as currently contemplated to be conducted. The IT Systems have not suffered any material failures or defects and are free of all viruses, worms, Trojan horses and other known contaminants and do not contain any bugs, errors or problems of a nature that would materially disrupt their operation or have a material adverse impact on the operation of such IT Systems. There have been no unauthorized intrusions or breaches of the security of any of the IT Systems, and the data and information which they store or process, including any Personal Information, has not been corrupted in any discernible manner or accessed without the authorization of the Company. The Company has (i) implemented and maintained backup, data storage, security and disaster recovery technology plans and procedures consistent with reasonable information technology security practices for a company of the size and nature of the Company.

Section 3.12Insurance. Section 3.12 of the Disclosure Schedules lists all insurance policies and binders for which the Company is a policyholder or which cover the assets, employees or operations of the U.S. Roundtables Business (the “Insurance Policies”). Seller has made available to Buyer all of the Insurance Policies. All of the Insurance Policies are in full force and effect in accordance with their terms, all premiums due on such Insurance Policies covering all periods up to and including the Closing Date have been paid or will be paid when due and the Company is not in breach or default, and to Seller’s Knowledge, no event has occurred which, with notice or the lapse of time, would constitute such a breach or default, or permit termination or modification, under the Insurance Policies. No notice of cancellation or termination, material change in premium or denial of renewal in respect of any of the Insurance Policies has been received by the Company during the past five (5) years. All potential insurance claims for matters arising prior to the Closing for which insurance coverage is (or would have been) available have been timely and properly tendered to the respective insurance carrier by the Company. The Company has not been refused any insurance by any insurance carrier to which it has applied for any such insurance or with which it has carried such insurance. During the past five (5) years, no insurance carrier has questioned, denied or disputed coverage of any claim with respect to the Company (or its assets, properties, products, employees, operations or business) in excess of $5,000 individually or $25,000 in the aggregate or otherwise cancelled or threatened to cancel any insurance policy which covered the Company (or its assets, properties, products, employees, operations or business). The coverage of the assets, properties, products, employees, operations or business of the U.S. Roundtables Business provided by any of the Insurance Policies will not terminate or lapse by reason of the transactions contemplated by this Agreement. The Company does not have any self-insurance or co-insurance programs.

Section 3.13Legal Proceedings; Governmental Orders. Except as set forth in Section 3.13 of the Disclosure Schedules, (a) there is no, and during the past five (5) years there has been no, action, suit, claim, demand, disputes, audit, examination, hearing, investigation or other legal proceeding (each, a “Claim”) pending or, to Seller’s Knowledge, threatened against or by the Company or any of its officers, directors, consultants, service providers (as related to his or her employment or services with the Company) with respect to or affecting any of its operations, business, financial condition, properties or assets (or by or against the Seller or any of his Affiliates and relating to the Company), or (b) neither the Company nor any of its officers, directors,

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consultants, service providers (as related to his or her employment or services with the Company), Affiliates or facilities is a party to, or bound by, any Governmental Order with respect to or affecting any of the Company’s operations, business, financial condition, properties or assets.

Section 3.14Compliance With Laws; Permits.

(a)Except as set forth in Section 3.14(a) of the Disclosure Schedules, the Company is currently in, and during the past five (5) years has been in, compliance in all material respects with all applicable Laws.

(b)The Company owns or possesses all material Permits required for the Company to conduct the U.S. Roundtables Business as currently conducted, all such Permits are valid and in full force and effect, and the Company is in compliance in all material respects with such Permits.

(c)The Company has, and to Seller’s Knowledge, no director, officer, manager, consultant, sales representative, employee or other Person acting on behalf of the Company has, in each case, directly or indirectly, (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback or other payment to any Person, private or public, domestic or foreign, regardless of form, whether in money, property or services, in violation of any Law, or (ii) established or maintained any fund or asset with respect to the Company that has not been recorded in the books and records of the Company. The internal accounting controls of the Company are adequate to detect any of the items described in the foregoing clauses (i) and (ii).

Section 3.15Environmental Matters. Each premises leased, subleased or otherwise occupied by the Company, during the period it was leased, subleased or otherwise occupied by the Company, has been maintained in, and the Company is in, and has for the past five (5) years been in, material compliance with all applicable Environmental Laws. The Company is not required to possess any Environmental Permit in connection with the operation of the U.S. Roundtables Business. During the past five (5) years, the Company has not received any written communication alleging any material failure by the Company to comply with, or any material liability under, any Environmental Laws. There is no Environmental Claim pending or, to Seller’s Knowledge, threatened, against the Company or the premises currently leased by the Company and, to Seller’s Knowledge, there is no basis for any such Environmental Claim. There are no, and there has been no Release or threatened Release of, Hazardous Substances in violation of, or that may give rise to material liability or obligation under, Environmental Laws at any premises occupied by the Company or at any other real property currently or formerly owned, leased or operated by the Company.

Section 3.16Employee Benefit Matters.

(a)Section 3.16(a) of the Disclosure Schedules contains a list of each employee benefit plan as defined in Section 3(3) of ERISA and each other benefit, retirement, deferred compensation, employment agreement (other than “at will” employment offer letters), consulting agreement, incentive, bonus, stock option, restricted stock, stock appreciation right, phantom equity, equity-based, change in control, retention, severance, vacation, paid time off, post-retirement (retiree medical and retiree life), health, welfare, flexible spending, cafeteria and fringe-benefit agreement, arrangement, plan, policy and program, whether or not reduced to writing, whether subject to ERISA or not, whether funded or unfunded, whether qualified or nonqualified, that is in effect and covering one or more Employees, former employees of the Company, current or former directors of the

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Company or the beneficiaries or dependents of any such Persons, and that is maintained, sponsored, contributed to, or required to be contributed to by the Company, under which the Company or any subsidiary of the Company has any current, future or contingent liability, or is provided by the PEO (each, a “Benefit Plan”). Seller has made available to Buyer a true and complete copy of the following documents: (i) each writing constituting a Benefit Plan including any amendment, (ii) the current summary description of each Benefit Plan and any summaries of material modifications thereto, (iii) the most recent determination or opinion letter, as applicable, from the IRS with respect to any Benefit Plan qualified under Section 401(a) of the Code, (iv) PEO Agreement and (v) for the most recent three (3) years (A) annual report on IRS Form 5500 including any applicable schedule or attachment, if any, filed for each Benefit Plan, and except for the Benefit Plans sponsored and maintained by the PEO, (B) financial statements for each Benefit Plan, as applicable, (C) nondiscrimination testing reports for each Benefit Plan, as applicable, (D) Forms 1094-C and 1095-C, as applicable, (E) trust agreement, investment management agreement, custodial agreement, administrative services agreement and insurance and annuity agreement for each Benefit Plan, as applicable, and (F) all records, notices and filings concerning IRS, Department of Labor or other Governmental Authority audits, investigations or inquiries.

(b)Except as set forth in Section 3.16(b) of the Disclosure Schedules, each Benefit Plan and related trust has been established, maintained, operated, administered and funded in all material respects with respect to its terms and all applicable Laws (including ERISA, the Code and applicable local Laws). Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code (a “Qualified Benefit Plan”) has received a favorable determination letter from the Internal Revenue Service, or with respect to a prototype plan, can rely on an opinion letter from the Internal Revenue Service to the prototype plan sponsor, to the effect that such Qualified Benefit Plan is so qualified and that such plan and the trust related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, and, nothing has occurred that would reasonably be expected to cause the revocation of such determination letter from the Internal Revenue Service or the unavailability of reliance on such opinion letter from the Internal Revenue Service. Except as set forth in Section 3.16(b) of the Disclosure Schedules, all benefits, contributions and premiums required by and due under the terms of each Benefit Plan or applicable Law have been timely paid in accordance with the terms of such Benefit Plan and the terms of all applicable Laws or recorded, to the extent required, on the financial statements of the Company in accordance with the historic accounting practices of the Company consistently applied. All returns, reports and disclosure statements required to be made under ERISA and the Code with respect to each Benefit Plan have been timely filed or delivered. No Benefit Plan has any material unfunded liabilities.

(c)Except as set forth in Section 3.16(c) of the Disclosure Schedules, neither the Company nor any of its ERISA Affiliates maintains, contributes to, is required to contribute to, or has any current, future or contingent liability with respect to any: (i) “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) that is subject to Section 302 of ERISA, Title IV or ERISA or Section 412 of the Code; (ii) any “multi-employer plan” (within the meaning in Section 3(37) of ERISA); (iii) any “multiple employer plan” (within the meaning of Section 413 of the Code); or (iv) any “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA). The Company has no liability on account of at any time being considered a single employer with another Person under Section 414 of the Code. None of Seller, the Company nor any of their ERISA Affiliates have (A) withdrawn from any employee benefit plan subject to Title IV of ERISA under circumstances resulting (or expected to result) in a liability of the Company or

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Buyer to the Pension Benefit Guaranty Corporation, or (B) engaged in any transaction which would give rise to a liability of the Company or Buyer under Section 4069 or Section 4212(c) of ERISA.

(d)Except as set forth in Section 3.16(d) of the Disclosure Schedules and other than as required under Section 4980B of the Code or other applicable Law, no Benefit Plan provides benefits or coverage in the nature of health, life or disability insurance following retirement or other termination of employment (other than death benefits when termination occurs upon death) and the Company has not promised to provide, and does not have any liability with respect to, any such post-termination benefits.

(e)There is no pending (to Seller’s Knowledge as to any Benefit Plan provided by the PEO) or, to Seller’s Knowledge, threatened action relating to a Benefit Plan other than routine claims for benefits. No Benefit Plan (to Seller’s Knowledge as to any Benefit Plan provided by the PEO) is the subject of an examination or audit by a Governmental Authority.

(f)Except as set forth in Section 3.16(f) of the Disclosure Schedules, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby, will (i) result in the payment to any Employee, director or consultant of the Company of any money or other property, (ii) accelerate the vesting of or provide any additional rights or benefits (including funding of compensation or benefits through a trust or otherwise) to any Employee, director or consultant of the Company, or (iii) limit or restrict the right of the Company or, after the Closing, Buyer, to merge, amend or terminate any Benefit Plan (to the extent it has any such right). Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will result in the payment by the Company or any subsidiary of the Company of any “excess parachute payments” within the meaning of Section 280G(b) of the Code.

(g)Except as disclosed on Section 3.16(g) of the Disclosure Schedules, each Benefit Plan subject to Section 409A of the Code has been established, administered and operated in compliance with Section 409A of the Code at all relevant times and is in documentary compliance with Section 409A of the Code and no benefit to be paid under any Benefit Plan is, or will be, subject to the penalties of Section 409A of the Code.

(h)Each Benefit Plan may be amended, terminated, or otherwise modified by the Company in accordance with its terms. The Company has not announced its intention to modify or terminate any Benefit Plan or adopt any arrangement or program which, once established, would come within the definition of a Benefit Plan. Except as reflected on Section 3.16(h) of the Disclosure Schedule, no Benefit Plan provides health or welfare benefits that are not fully insured through an insurance contract.

(i)Except as disclosed on Section 3.16(i) of the Disclosure Schedules, no event has occurred with respect to any Benefit Plan and no condition exists with respect to any Benefit Plan that could reasonably be expected to (i) subject the Company and any Company subsidiary to any Tax, fine, Encumbrance, penalty or other liability resulting from a violation of ERISA, the Code or other Law, or (ii) subject any current or former employee, director or consultant of the Company or any Company subsidiary to any excise or penalty Tax.

(j)None of the Company or any Company subsidiary has any unsatisfied obligations that are currently due and payable to any current or former employee, director or consultant pursuant

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to the Affordable Care Act (the “ACA”) or any other applicable Law governing health care coverage or benefits that would result in any liability to the Company or any Company subsidiary. The Company and any Company subsidiary have, or have arranged to have through the PEO or otherwise, maintained all records necessary to demonstrate compliance in all material respects with the ACA and other applicable Law governing the Benefit Plans, and through the PEO or otherwise have timely and properly completed in all material respects all required ACA reporting under Sections 6055 and 6056 of the Code.

(k)The Company has no obligation to gross-up, indemnify or otherwise reimburse any current or former employee, director, officer, consultant or other service provider for any Tax incurred by such Person, including Taxes incurred under Section 409A or 4999 of the Code.

Section 3.17Employment Matters.

(a)The Company is not a party to, or bound by, any collective bargaining or other agreement or bargaining relationship with a labor organization with respect to the Business Employees. There has not occurred nor, to Seller’s Knowledge, has there been any threat of, any strike, slowdown, work stoppage, lockout, concerted refusal to work overtime or other similar labor activity or dispute affecting the U.S. Roundtables Business of the Company. Except as provided in Section 3.17(a) of the Disclosure Schedules, no Business Employee of the Company is subject to a written employment agreement providing for other than at-will employment.

(b)The Company is, and for the past five (5) years has been, in compliance in all material respects with all applicable Laws pertaining to employment and employment practices to the extent they relate to employees of the Company. The Company has paid in full all wages, salaries, commissions, and other compensation due and payable to the Employees and the independent contractors of the Company, except as to arrearages in accordance with its usual payroll and compensation practices. All filings required by the Company pertaining to employment and employment practices have been timely filed with the appropriate Governmental Authority in accordance with all applicable Laws. The Company has, in all material respects and at all times within the past five (5) years, properly classified: (i) all Persons providing services to the Company as employees or independent contractors, as appropriate; and (ii) all persons providing services as employees as exempt or non-exempt for purposes of the Fair Labor Standards Act, and the Company has not received any notice to the contrary from any Person or Governmental Authority. To Seller’s Knowledge, each employee leasing agency, staffing agency and other provider of contingent workers to the Company has complied in all material respects with all applicable employment-related Laws in connection with those workers it has provided to the Company. The Company has complied in all material respects with all applicable employment-related contracts to which it is party or by which it is bound. Except as set forth in Section 3.17(b) of the Disclosure Schedules, there are no Claims against the Company pending, or to Seller’s Knowledge, threatened to be brought or filed, by or with any Governmental Authority or arbitral tribunal in connection with the employment or termination of employment of any current or former employee of the Company, including any Claim relating to breach of contract, unfair labor practices, employment discrimination, harassment, retaliation, equal pay or any other employment related matter arising under applicable Laws.

(c)To Seller’s Knowledge, no officer, executive, key employee or key consultant of the Company with respect to the U.S. Roundtables Business (i) has any present intention to terminate or materially alter the terms or nature of his or her employment or services with the Company within

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the first twelve (12) months immediately following the Closing Date, or (ii) is party to or bound by any confidentiality, non-disclosure, proprietary rights, non-solicitation, non-competition or similar agreement that could materially restrict such Person in the performance of his or her employment or service duties or the Company in the conduct of the U.S. Roundtables Business. To Seller’s Knowledge, in the last five (5) years, no complaints of sexual harassment or sexual abuse against any current employee of the Company have been submitted to the Company.

(d)Section 3.17(d) of the Disclosure Schedules sets forth a complete list of each employee, consultant and independent contractor currently providing services to the U.S. Roundtables Business and for each such individual his or her: (i) name; (ii) position/title; (iii) date of hire; (iv) annual base salary (or hourly wages, as the case may be) (A) for the current fiscal year and (B) for the previous fiscal year; (v) the amount of any incentive or other additional compensation (including bonus and commission amounts, profit sharing distributions, and any similar types of incentive arrangements) (A) for which such employee is eligible in the current fiscal year and (B) paid to such employee over the course of the previous fiscal year; (vi) work status (i.e., full-time, part-time, temporary or leased); (vii) classification as exempt or non-exempt from the overtime requirements of the Fair Labor Standards Act and applicable state and local Law; (viii) accrued and unused vacation days and paid time off; and (ix) active/inactive status (and if inactive, the type of leave and estimated return date, if known).Section 3.17(d) of the Disclosure Schedules also lists any offer letters or employment agreements with any employee who is listed thereon and any consulting agreements with any consultants listed thereon.

(e)The Company has properly utilized Form I-9 to verify the identity and work authorization status of each of its employees in compliance with the Immigration and Nationality Act, as amended, the Immigration Reform and Control Act of 1986, as amended, and related promulgating regulations. Except as reflected on Section 3.17(e) of the Disclosure Schedules, (i) no Business Employee of the Company presented any temporary work authorization document at the time of hire that is presently or at any future date will be subject to I-9 re-verification, (ii) no Business Employee of the Company is employed under an H-1B, L-1A or L-1B visa, or any other employer-petitioned non-immigrant U.S. work authorization and (iii) the Company is not petitioning for employment-based lawful permanent residence status on behalf of any Business Employee of the Company and has not filed any Application for Alien Employment Certification (ETA Form 750), Application for Permanent Employment Certification (ETA Form 9089), or any Form I-140 (Immigrant Petition for Alien Workers) with respect to any Business Employee that remains pending. In past five (5) years, the Company has not received any correspondence or notice from any Person or Governmental Authority questioning the validity of the social security number of any current or former employee of the Company that was not resolved without penalty to the Company.

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Section 3.18Taxes.

(a)Except as set forth in Section 3.18(a) of the Disclosure Schedules: (i) the Company has filed all income, sales and other material Tax Returns required to be filed by the Company (taking into account any valid extensions); (ii) all such Tax Returns were true, complete and correct in all material respects when filed; (iii) the Company is not currently the beneficiary of any extension of time within which to file any Tax Return; (iv) all Taxes due and owing by the Company (whether or not shown on any Tax Return) have been paid; and (v) there are no Encumbrances for Taxes upon any of the assets of the Company, except for Permitted Encumbrances.

(b)No written claim has ever been made by a taxing authority in a jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by that jurisdiction.

(c)The Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(d)There are no Claims by any taxing authority pending against the Company. No deficiencies or proposed adjustment for Taxes of the Company have been claimed, proposed or assessed, in each case, in writing by any taxing authority. The Company has not received from any federal, state, local, or non-U.S. taxing authority (including jurisdictions where the Company has not filed Tax Returns) written notice indicating an intent to open an audit or other review.

(e)The Company is not a party to any Tax allocation, Tax indemnification or Tax sharing agreement (other than a Non-Tax Agreement).

(f)All material Taxes which the Company has been required to collect or withhold have been duly collected or withheld and, to the extent required, have been duly paid to the proper taxing authority.

(g)The Company (i) has not been a member of an affiliated, consolidated, combined, unitary, or similar group or (ii) has no liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or non-U.S. Law), as a transferee or successor, by contract, or otherwise.

(h)The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date; (ii) use of an improper method of accounting for a taxable period ending on or prior to the Closing Date; (iii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Laws) executed on or prior to the Closing Date; (iv) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or non-U.S. income Tax Laws); (v) installment sale or open transaction disposition made on or prior to the Closing Date; (vi) election under Section 108(i) of the Code; or (vii) prepaid amount or deferred revenue received on or prior to the Closing Date. The Company used the cash receipts and disbursements method of accounting for income Tax purposes at all times

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until December 31, 2018. Since January 1, 2019, the Company has used the accrual method of accounting for income Tax purposes.

(i)The Company (i) has not distributed stock of another Person, or had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code, (ii) is not and has never been a party to any “listed transaction,” as defined in Sections 6707A(c)(2) of the Code, and (iii) does not have a permanent establishment (within the meaning of an applicable Tax treaty) or otherwise have an office or fixed place of business in a country other than the country in which it is organized.

(j)At all times since May 1, 1990, the Company was a validly electing “S” corporation within the meaning of Sections 1361 and 1362 of the Code and under all corresponding provisions of applicable state and local Tax Laws to the extent they recognize S corporation status. The IRS has not challenged the Company’s status as an S corporation for federal income Tax purposes under the Code.

This Section 3.18, Section 3.17(b),Section 3.16, Section 3.08(q) and Section 3.06 contains the sole and exclusive representations and warranties with respect to any Tax matters relating to the Company. The representations and warranties in this Section 3.18 (other than the representations and warranties set forth in Section 3.18 (h)) refer only to the past activities of the Company and Seller shall have no obligation to indemnify Buyer Indemnified Parties from and against any Losses with respect to Taxes attributable to any Tax periods (or portions thereof) beginning after the Closing Date as a result of any breach of the representations and warranties in this Section 3.18 (other than the representations and warranties set forth in Section 3.18 (b), (e), and (h)).

Section 3.19Customers and Vendors.

(a)Section 3.19(a) of the Disclosure Schedules sets forth, for each of (i) the twelve (12)-month period ended on March 31, 2019, (ii) the fiscal year ended December 31, 2018 and (iii) the fiscal year ended December 31, 2017, in each case, (A) the twenty (20) largest customers of the U.S. Roundtables Business (based on the amount of purchases by each such customer during such period) (collectively, the “Key Customers”) and (B) the amount of purchases by each Key Customer during such period.

(b)Section 3.19(b) of the Disclosure Schedules sets forth, for each of (i) the twelve (12)-month period ended on March 31, 2019, (ii) the fiscal year ended December 31, 2018 and (iii) the fiscal year ended December 31, 2017, in each case, (A) the ten (10) largest vendors of the Company (based on the amount of purchases by the Company from each such vendor during such period) (collectively, the “Key Vendors”) and (B) the amount of purchases by the Company from each such Key Vendor during such period.

(c)Except as set forth on Section 3.19(c) of the Disclosure Schedules:

(i)no Key Customer (A) has stopped or materially decreased, or has threatened to stop or materially decrease, the rate of purchasing materials, products or services of the U.S. Roundtables Business from the Company or otherwise has materially and adversely modified, or threatened to materially and adversely modify, its relationship with the Company, (B) is seeking to

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materially and adversely renegotiate the terms of any agreement, arrangement or historical practice under which the Company is providing products or services of the U.S. Roundtables Business to such Key Customer or otherwise adversely materially and adversely modify its relationship with the Company, or (C) is receiving, or otherwise entitled to receive, a discount with respect to the price of products or services purchased from the Company;

(ii)no Key Vendor (A) has stopped or materially decreased, or has threatened to stop or materially decrease, the rate of supplying products or services used in connection with the U.S. Roundtables Business to the Company or otherwise materially and adversely modified, or threatened to materially and adversely modify, its relationship with the Company, (B) is seeking to materially and adversely renegotiate the terms of any agreement, arrangement or historical practice under which the Company is receiving products or services used in connection with the U.S. Roundtables Business from such Key Vendor or otherwise materially and adversely modify its relationship with the Company, or (C) is a sole source of supply of any material products or services used by the Company in connection with the U.S. Roundtables Business.

Section 3.20Bank Accounts. Section 3.20 of the Disclosure Schedules sets forth a correct and complete list of (a) the name and address of each bank with which the Company has an account or safe deposit box, (b) the name of each person authorized to draw thereon or have access thereto and (c) the account number for each such account and the safe deposit box number for any such safe deposit box maintained by the Company.

Section 3.21Restructuring; Affiliate Transactions.

(a)The Company shall have consummated the Restructuring prior to the Closing. The Company has or had, as applicable, the requisite power and authority: (a) to enter into, execute and deliver all agreements to which it is a party in connection with the Restructuring; (b) to perform fully its obligations thereunder; and (c) to consummate the transactions contemplated thereby. All agreements to which the Company is a party in connection with the Restructuring shall, as of the Closing, have been validly authorized, executed and delivered by the Company and (assuming the due authorization, execution and delivery by each counterparty thereto) constitutes the legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar applicable laws affecting creditors’ rights generally or by general equitable principles affecting the enforcement of contracts.

(b)The agreements and other documents which shall evidence and effect the Restructuring are set forth on Section 3.21(b) of the Disclosure Schedules and, as of the Closing, Seller shall have provided Buyer with true, accurate and complete copies of such agreements and other documents. Following the Closing, except as set forth in the Transition Services Agreement and in Section 5.19, the Company shall have no further liabilities or obligations with respect to the Spun-Out Assets or any of the agreements entered into in connection with the Restructuring. None of the assets to be distributed by the Company in connection with the Restructuring are necessary for the operation of the U.S. Roundtables Business as presently conducted.

(c)Except as set forth on Section 3.21(a) of the Disclosure Schedules, there are no agreements or arrangements between the Company and any Related Person that will not be terminated effective as of the Closing. No Related Person or any parent, child, spouse or sibling

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(including adoptive and stepfamily relationships) of any Related Person (i) owes any amount to the Company, and the Company does not owe any amount to, and has not committed to make any loan or extend or guarantee credit to or for the benefit of, any Related Person or any parent, child, spouse or sibling (including adoptive and stepfamily relationships) of any Related Person, except for any such amount which will be fully paid at or prior to the Closing, (ii) has any interest in any property or asset used by the Company or the U.S. Roundtables Business, or (iii) has any Claim or cause of action against the Company.

Section 3.22Brokers. Except for Portico Capital (the costs and fees of which will be borne by Seller), no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company, Seller or any of his Affiliates.

Section 3.23No Other Representations and Warranties. The representations and warranties contained in this Agreement (including the Disclosure Schedules) and the other Transaction Documents constitute the exclusive representations and warranties, express or implied and whether written or oral, of Seller in connection with the transactions contemplated by this Agreement. Notwithstanding the foregoing or anything to the contrary in this Agreement or any other Transaction Document, nothing in this Agreement or any other Transaction Document shall limit or otherwise affect any Person’s rights or remedies in the case of Fraud, and nothing in this Section 3.23 shall limit or otherwise affect any Person’s rights or remedies with respect to any breach or inaccuracy of any representation or warranty contained in this Agreement (including the Disclosure Schedules) or any other Transaction Document.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as of the date hereof and as of the Closing as follows:

Section 4.01Organization and Authority of Buyer. Buyer is a limited liability company duly organized, validly existing and in good standing under the Laws of the state of Delaware. Buyer has all necessary limited liability company power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Buyer of this Agreement, the performance by Buyer of its obligations hereunder and the consummation by Buyer of the transactions contemplated hereby have been duly authorized by all requisite limited liability company action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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Section 4.02No Conflicts; Consents.

(a)The execution, delivery and performance by Buyer of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (i) result in a violation or breach of any provision of the Organizational Documents of Buyer; (ii) result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (iii) require the consent, notice or other action by any Person under, conflict with, result in a violation or breach of, constitute a default under or result in the acceleration of any agreement to which Buyer is a party, except in the cases of clauses (ii) and (iii), where the violation, breach, conflict, default, acceleration or failure to give notice would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.

(b)No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

Section 4.03Investment Purpose. Buyer is acquiring the Acquired Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Acquired Shares are not registered under the Securities Act of 1933, as amended, or any state securities laws, and that the Acquired Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable. Buyer is able to bear the economic risk of holding the Acquired Shares for an indefinite period (including total loss of its investment), and has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

Section 4.04Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

Section 4.05Sufficiency of Funds. Buyer has sufficient cash on hand or access to other sources of immediately available funds to enable it to make payment of the Cash Purchase Price and consummate the transactions contemplated by this Agreement.

Section 4.06Legal Proceedings. There are no Claims pending or, to Buyer’s knowledge, threatened against or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

Section 4.07Independent Investigation. Buyer has conducted its own independent investigation, review and analysis of the business, results of operations, prospects, condition (financial or otherwise) or assets of the Company. Buyer acknowledges and agrees that, except in the case of Fraud: (a) Buyer has relied on the aforementioned investigation, review and analysis and not on any representations or warranties of Seller other than the express representations and warranties of Seller set forth in this Agreement (including the Disclosure Schedules) and the other Transaction Documents; and (b) none of Seller, the Company or any other Person has made any representation or warranty as to Seller, the Company or this Agreement, except as expressly set

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forth in this Agreement (including the Disclosure Schedules) and the other Transaction Documents. Notwithstanding the foregoing or anything to the contrary in this Agreement or any other Transaction Document, nothing in this Agreement or any other Transaction Document shall limit or otherwise affect any Person’s rights or remedies in the case of Fraud, and nothing in this Section 4.07 shall limit or otherwise affect any Person’s rights or remedies with respect to any breach or inaccuracy of any representation or warranty contained in this Agreement (including the Disclosure Schedules) or any other Transaction Document.

ARTICLE V

COVENANTS

Section 5.01Conduct of Business Prior to the Closing. From the Effective Date until the Closing, except as otherwise expressly provided in this Agreement (including with respect to the Restructuring) or consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall, and shall cause the Company to: (x) conduct the business of the Company in the ordinary course of business; and (y) use commercially reasonable efforts to maintain and preserve intact the current organization, business, goodwill and franchise of the Company and to preserve the rights, franchises, goodwill and relationships of its Employees, clients, customers, lenders, vendors, suppliers, regulators and others having business relationships with the Company. From the Effective Date until the Closing Date, except for the Restructuring and actions taken in furtherance thereof, or as consented to in writing by Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), Seller shall not, and shall cause the Company not to, take or commit to take any action that, if taken prior to the Effective Date, would be required by the terms of Section 3.08 to be disclosed on Section 3.08 of the Disclosure Schedules.

Section 5.02Access to Information. From the Effective Date until the Closing, the Seller shall, and shall cause the Company to: (a) afford Buyer and its Representatives full access to (including the right to inspect and make copies) all of the properties, assets, premises, books and records, contracts, agreements and other documents and data related to the U.S. Roundtables Business, and all officers of the Company, including any such information requested in connection with the binding of the R&W Insurance Policy; (b) furnish Buyer and its Representatives with such financial, operating and other data and information related to the U.S. Roundtables Business as Buyer or any of its Representatives may reasonably request; and (c) instruct the Representatives of Seller and the Company to cooperate with Buyer in its investigation of the U.S. Roundtables Business; provided, however, that any such investigation shall be conducted during normal business hours upon reasonable advance notice to Seller, under the supervision of the Company’s personnel and in such a manner as not to interfere with the normal operations of the Company. Notwithstanding anything to the contrary in this Agreement, neither Seller nor the Company shall be required to disclose any information to Buyer if such disclosure would: (i) jeopardize any attorney-client or other privilege; or (ii) contravene any applicable Law, fiduciary duty or Material Contract disclosed on Section 3.09(a) of the Disclosure Schedules; provided, however, that, Seller shall, to the extent legally permissible, use his commercially reasonable efforts to make appropriate substitute arrangements under circumstances in which the restrictions of the preceding clauses (i) or (ii) apply, including by obtaining the consent of the counterparties to any contracts prohibiting such disclosures (which shall not be unreasonably withheld, conditioned or delayed). Prior to the Closing, without the prior written consent of Seller, which may be withheld for any reason, Buyer shall not contact any vendors or suppliers to, or clients or customers of, the Company. Buyer shall, and shall cause

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its Representatives to, abide by the terms of the Confidentiality Agreement with respect to any access or information provided pursuant to this Section 5.02.

Section 5.03Notice of Certain Events.

(a)From the Effective Date until the Closing, Buyer will promptly notify Seller in writing, of: (i) any material action, claim, suit, arbitration, investigation or proceeding, in each case by or before any Governmental Authority, commenced or threatened against Buyer that arises out of the transactions contemplated by this Agreement; and (ii) any event, condition, fact or circumstance that would reasonably be expected to make the timely satisfaction of any of the conditions set forth in Article VI impossible or materially unlikely. The delivery of any notice pursuant to this Section 5.03(a) shall not cure any breach or inaccuracy of any representation, warranty, covenant or agreement of Buyer contained in this Agreement or otherwise limit or affect the remedies available hereunder to Seller.

(b)From the Effective Date until the Closing, Seller will promptly notify Buyer in writing upon becoming aware of: (i) any Claim by or before any Governmental Authority, commenced or threatened against Seller or the Company that arises out of the transactions contemplated by this Agreement; (ii) any event, condition, fact, development or circumstance that materially affects the assets, liabilities or operations of the Company or the U.S. Roundtables Business, or that would reasonably be expected to (A) make the timely satisfaction of any of the conditions set forth in Article VI impossible or materially unlikely, or (B) result in a material breach of any representation, warranty, covenant or agreement of Seller under this Agreement. The delivery of any notice pursuant to this Section 5.03(b) shall not cure any breach or inaccuracy of any representation, warranty, covenant or agreement of Seller contained in this Agreement or otherwise limit or affect the remedies available hereunder to Buyer.

Section 5.04Resignations. Seller shall deliver to Buyer any written resignations, effective as of the Closing Date, of the officers and directors of the Company requested by Buyer and set forth on Section 5.04 of the Disclosure Schedules.

Section 5.05Employees; Benefit Plans.

(a)During the period commencing at the Closing and ending on the date which is twelve (12) months from the Closing (or if earlier, the date of the employee’s termination of employment with the Company), Buyer shall and shall cause the Company to provide each Employee who remains employed by the Company as of immediately after the Closing (“Company Continuing Employee”) with: (i) base salary or hourly wages, (ii) annual bonus opportunity (excluding nonqualified deferred compensation, equity or equity-based compensation, retention or similar bonuses, transaction-based compensation, or compensation payable upon a change-in-control) and (iii) welfare type employee benefits (excluding severance), in each case, that are substantially similar to the base salary or hourly wages, annual bonus opportunity (excluding nonqualified deferred compensation, equity or equity-based compensation, retention or similar bonuses, transaction-based compensation, or compensation payable upon a change-in-control) and welfare type employee benefits (excluding severance) provided by the Company immediately prior to the Closing Date.

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(b)With respect to any employee benefit plan maintained by Buyer or its subsidiaries in which any Company Continuing Employees will participate after the Closing, Buyer shall, or shall cause the Company to, recognize all service of the Company Continuing Employees with the Company as if such service were with Buyer, for purposes of eligibility to participate, vesting, vacation entitlement and severance benefits, but excluding benefit accrual under any defined benefit pension plan or defined contribution retirement plan; provided, however, such service shall not be recognized to the extent that (i) such recognition would result in a duplication of benefits or (ii) such service was not recognized under the corresponding Benefit Plan.

(c)Effective as of the Closing and continuing until the earlier of (a) the date Vincent Cheng ceases to be employed by the Company and (b) December 31, 2019, Seller agrees to reimburse (or cause to be reimbursed to) the Company for the fully-burdened labor cost and expenses and any Losses incurred by the Company as a result of any termination of Mr. Cheng’s employment (i.e., salary, bonus, benefits costs, severance and employer-portion of payroll Taxes) actually incurred by the Company in connection with the employment of Mr. Cheng.

(d)This Section 5.04 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 5.04, express or implied, shall confer upon any other Person (including any employee or former employee of any Company) any rights or remedies of any nature whatsoever under or by reason of this Section 5.04, and no Person shall be regarded for any purpose as a third-party beneficiary of this Agreement for purposes of this Section 5.04. Nothing contained herein, express or implied, shall be construed to establish, amend or modify any benefit plan, program, agreement or arrangement. The parties hereto acknowledge and agree that the terms set forth in this Section 5.04 shall not create any right in any Employee or any other Person to any continued employment with the Company, Buyer or any of their respective Affiliates or compensation or benefits of any nature or kind whatsoever. With respect to any Company Continuing Employee who enters into a written contract of employment with Buyer or any of its Affiliates, this Section 5.04 shall be superseded by the terms of any such contract.

Section 5.06WARN Act. Buyer shall not, and shall cause the Company not to, take any action following the Closing that creates, would create or is likely to create any liability for Seller under the WARN Act.

Section 5.07Director and Officer Indemnification and Insurance.

(a)On or prior to the Closing Date, Seller shall cause the Company to purchase a prepaid insurance policy (i.e., “tail coverage”) (the “D&O Tail Policy”) which provides liability insurance coverage for each present or former officer, director, or shareholder or partner of the Company or any present or former officer, director, employee, agent or trustee of any Benefit Plan (each, an “Officer”) on no less favorable terms (including in amount and scope) as the policy or policies maintained by the Company immediately prior to the Closing for the benefit of the Officers for a period of not less than six (6) years with respect to claims arising from acts, events or omissions that occurred at or prior to the Closing, including with respect to the transactions contemplated by the Transaction Documents. The fees and expenses of the D&O Tail Policy shall be borne fifty percent (50%) by Seller (as Transaction Expenses) and fifty percent (50%) by Buyer.

(b)Each Officer shall have rights as a third party beneficiary under this Section 5.07 as separate contractual rights for his or her benefit, in substitution of any other rights to indemnification

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or contribution that any such Officer may have by contract or otherwise (including pursuant to the Company’s Organizational Documents or pursuant to Law) against the Company.

Section 5.08Confidentiality. From and after the Closing, Seller shall, and shall cause each of his Affiliates, representatives, agents, employees, officers, managers, directors and members to: (a) not use or disclose, directly or indirectly, any Confidential Information solely related to the U.S. Roundtables Business; and (b) take all commercially reasonable steps to safeguard all Confidential Information and protect it against disclosure, misuse, loss and theft. If Seller or any of his Affiliates, representatives, agents, employees, officers, managers, directors and members is compelled to disclose any Confidential Information of the U.S. Roundtables Business by any Claim or by applicable Law, (i) Seller shall promptly notify Buyer in writing in advance of such disclosure, which notification will include the nature of the legal requirement and the extent of the required disclosure, and (ii) Seller shall, and shall cause each of his Affiliates, representatives, agents, employees, officers, managers, directors and members to, disclose only that portion of such Confidential Information of the U.S. Roundtables Business which Seller or his Affiliate, representative, agent, employee, officer, manager, director or member, as applicable, is advised by such Person’s legal counsel is legally required to be disclosed; provided, that Seller shall, upon request of Buyer, use commercially reasonable efforts (at Buyer’s sole expense) to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be accorded such Confidential Information.

Section 5.09Governmental Approvals and Other Third-Party Consents

(a)From the Effective Date until the Closing, each party hereto shall, as promptly as possible, use its commercially reasonable efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement. Each party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders and approvals. The parties hereto shall not willfully take any action that will have the effect of delaying, impairing or impeding the receipt of any required consents, authorizations, orders and approvals. Notwithstanding anything to the contrary in this Agreement, the Buyer shall not be obligated to institute any litigation or incur any material expense or liability in order to comply with the preceding provisions of this Section 5.09.

(b)All analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals made by or on behalf of either party before any Governmental Authority or the staff or regulators of any Governmental Authority, in connection with the transactions contemplated hereunder (but, for the avoidance of doubt, not including any interactions between Seller or the Company with Governmental Authorities in the ordinary course of business, any disclosure which is not permitted by Law or any disclosure containing Confidential Information) shall be disclosed to the other party hereunder in advance of any filing, submission or attendance, it being the intent that the parties will consult and cooperate with one another, and consider in good faith the views of one another, in connection with any such analyses, appearances, meetings, discussions, presentations, memoranda, briefs, filings, arguments, and proposals. Each party shall give notice to the other party with respect to any meeting, discussion, appearance or contact with any Governmental Authority or the staff or regulators of any Governmental Authority, with such

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notice being sufficient to provide the other party with the opportunity to attend and participate in such meeting, discussion, appearance or contact.

(c)Seller and Buyer shall use commercially reasonable efforts to give all notices to, and obtain all consents from, all third parties that are described in Section 3.05 of the Disclosure Schedules.

Section 5.10Books and Records.During the six (6)-year period following the Closing Date, Buyer shall, upon request by Seller, cause the Company to provide reasonable access to the books and records of the Company to Seller and his authorized designees and representatives (at all reasonable times during normal business hours and upon reasonable prior notice), to the extent that such access may be reasonably required for any of the following legitimate purposes: (a) to facilitate the investigation, litigation and final disposition of any claims against Seller or any of his Affiliates (other than claims pursuant to this Agreement or otherwise asserted by Buyer or any of its Affiliates) or audits of Seller or any of his Affiliates; (b) for the preparation of Tax Returns and other documents and reports that Seller is required to file with Governmental Authorities; and (c) for accounting purposes; provided, that, notwithstanding the foregoing, (i) no such access shall disrupt the normal course of operations of Buyer, the Company or any of their respective Affiliates, and (ii) Buyer and its Affiliates shall not be required to allow such access if doing so (x) would violate any contract, agreement or applicable Law to which Buyer, the Company or any of their respective Affiliates is a party or is subject or (y) could result in the loss of the ability to successfully assert a privilege (including any attorney-client or work product privilege).

Section 5.11Closing Conditions. From the Effective Date until the Closing, each party hereto shall, and Seller shall cause the Company to, use commercially reasonable efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VI hereof.

Section 5.12Public Announcements. Unless otherwise required by applicable Law (based upon the reasonable advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of Buyer and Seller (such consent shall not be unreasonably withheld, conditioned or delayed), and the parties shall cooperate as to the timing and contents of any such announcement; provided, that neither Buyer nor Seller shall be required to consent to any public announcement that contains the material financial terms of the transactions contemplated hereunder or any material financial information of the other party. Notwithstanding the foregoing provisions of this Section 5.12, Buyer and its Affiliates shall be permitted to (a) make any release or announcement required by the rules or regulations of any securities exchange (in which case, Buyer shall allow Seller reasonable time to comment on or seek a protective order with respect to such release or announcement in advance of such issuance), and (b) disclose the terms of this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby to their Affiliates, lenders and any current or potential investor in such Person’s investment fund(s) in connection with fundraising, marketing, informational or reporting activities or otherwise in the ordinary course of such party’s business.

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Section 5.13Further Assurances; Good Faith Negotiation of Earnout Opportunity.

(a)Following the Closing upon the request of a party, each other party shall execute and deliver, or cause to be executed and delivered, all such documents, instruments, conveyances and assurances, and shall take, or cause to be taken, at the requesting party’s expense, all such further actions as may be reasonably requested by such other party to carry out the provisions hereof on the terms herein and give effect to the transactions contemplated by this Agreement on the terms herein.

(b)    During the period from the date of this Agreement to the earlier of the Closing and the termination of this Agreement in accordance with its terms, the Buyer and the Seller shall negotiate in good faith in order to provide (whether pursuant to an amendment to this Agreement or in a separate agreement) the Seller with the opportunity to earn up to an additional $2,000,000 (the “Earnout Opportunity”) of Purchase Price based on the achievement of EBITDA (as such term is mutually agreed upon) by the U.S. Roundtables Business for the year ended December 31, 2019 equal to at least $4,200,000. Notwithstanding anything to the contrary in this Agreement, the failure to agree to the terms of an Earnout Agreement as contemplated by this Section 5.13(b) shall not be deemed to be a failure of any condition precedent to the Closing of either Buyer or Seller. The parties agree that any amounts paid pursuant to the Earnout Opportunity shall be treated as additional Purchase Price paid pursuant to this Agreement.

Section 5.14Representation and Warranty Insurance. Buyer shall cause the R&W Insurance Policy to be issued at the Closing (in accordance with the terms of the binder thereof). The cost of the R&W Insurance Policy (including all premiums and excess lines taxes payable in connection therewith and any fees or expenses incurred by any insurance broker or underwriting insurance company in connection therewith) shall be borne by Buyer.

Section 5.15Tax Matters.

(a)All transfer, documentary, sales, use, stamp, registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement, including any real property transfer Tax and any other similar Tax, but excluding any such Taxes and fees attributable to the Restructuring (collectively, “Transfer Taxes”) shall be borne and paid 50% by Buyer and 50% by Seller when due. The Company shall, at its own expense, timely file any Tax Return or other document with respect to such Transfer Taxes (and Buyer and Seller shall cooperate with respect thereto as necessary).

(b)Seller shall prepare IRS Forms 1120S (and any comparable flow through state and local Tax Returns) for the Company for taxable periods ending on or before the Closing Date (“Seller Prepared Tax Returns”); provided that, (i) the Seller Prepared Returns shall include all forms necessary to execute the Cash-to-Accrual Method Change, (ii) the Cash-to-Accrual Method Change shall be effective in a Pre-Closing Tax Period, and (iii) the Company and Seller shall include all items of income, gain, loss, deductions, and adjustments attributable to the Cash-to-Accrual Method Change in a Pre-Closing Tax Period. All such Seller Prepared Tax Returns shall be prepared in a

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manner consistent with prior practice of the Company unless otherwise required by applicable Tax laws. To the extent any Seller Prepared Tax Return is required to be signed by an applicable officer of the Company, Seller will provide to Buyer at least ten (10) Business Days prior to the applicable due date copies of such Seller Prepared Tax Returns, which Seller Prepared Tax Returns will be subject to review and approval by Buyer prior to filing.

(c)The Company shall prepare all other Tax Returns required to be filed following the Closing Date that relate to any taxable period ending on or before the Closing Date and any Straddle Period (collectively, the “Pre-Closing Tax Returns”). All such Pre-Closing Tax Returns shall be prepared in a manner consistent with prior practice of the Company unless otherwise required by applicable Tax laws. At least fifteen (15) days prior to the date on which each such Pre-Closing Tax Return is due (including extensions), the Company shall provide such Pre-Closing Tax Return to Seller for review and comment. The Company shall incorporate all of Seller’s comments to any such Pre-Closing Tax Return to the extent such comments are consistent with prior practice of the Company and permitted by applicable Tax law. If the Company and the Seller cannot, through good-faith negotiation, resolve any disagreement over any such comment, then their disagreement shall be resolved by the Independent Accounting Firm in accordance with Section 2.05(c), mutatis mutandis. The resolution of any such dispute shall not delay the filing of any such Pre-Closing Tax Return beyond its due date (including extensions) and, following resolution of such disagreement, such Pre-Closing Tax Return shall be amended if and as necessary to conform to the resolution of such disagreement.

(d)For purposes of this Agreement, in the case of any Taxes that are imposed on and are payable for a Straddle Period, the portion of such Tax which relates to the portion of such Straddle Period ending on the Closing Date will (i) in the case of any Taxes other than employment and withholding Taxes and Taxes based upon or related to income, sales or receipts, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction (a) the numerator of which is the number of days in the taxable period ending on the Closing Date and (b) the denominator of which is the number of days in the entire Straddle Period, and (ii) in the case of any employment or withholding Tax or any Tax based upon or related to income, sales or receipts be deemed equal to the amount which would be payable if the relevant taxable period ended on the Closing Date.

(e)For the avoidance of doubt, to the greatest extent permitted by applicable Law, the parties hereby acknowledge and agree that all deductible Transaction Expenses paid or deemed paid on or before the Closing Date with respect to the Company shall be treated as properly allocable to Pre-Closing Tax Periods. In furtherance thereof, the parties hereby acknowledge and agree to apply the “previous day rule” set forth in Proposed Regulations Section 1.1502-76(b)(1)(ii)(B), rather than the “next-day rule” set forth in Treasury Regulations Section 1.1502-76(b)(1)(ii)(B), such that all deductible Transaction Expenses paid or deemed paid on or before the Closing Date with respect to the Company shall be for the account of the Company and/or the Seller, as applicable, and shall be treated as properly allocable to the Pre-Closing Tax Period. The parties hereby acknowledge and agree that, notwithstanding the foregoing, if Treasury Regulation Section 1.1502-76(b)(1)(ii)(A)(2), as opposed to Proposed Regulations Section 1.1502-76(b)(1)(ii)(B), is applicable, the effective time, for Tax purposes, of the Closing shall be 12:01 a.m. (Eastern Standard Time) on the first day following the Closing Date. The Buyer shall not, and shall not cause the Company to, claim any benefit for any deductible Transaction Expenses in a Post-Closing Tax Period; provided that, the Company shall be permitted to claim the benefit of a net operating loss carryforward, if

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any, from a Pre-Closing Tax Period to a Post-Closing Tax Period (including the NYC NOL Carryover) attributable to such deductible Transaction Expenses.

(f)Seller shall be entitled to any cash Tax refunds (and any credit claimed in lieu of a cash Tax refund), including any interest included therein by the applicable taxing authority, of or relating to the Company for any Pre-Closing Tax Period (including the pre-Closing portion of any Straddle Period), net of all reasonable and documented out-of-pocket costs and Taxes of the Company or Buyer associated with obtaining such refund (or credit in lieu thereof); provided, that Seller shall not be entitled to any refund or credit (i) arising from the carryback of any Tax loss, deduction or credit from a taxable period (or portion thereof) beginning after the Closing Date or (ii) to the extent such refund or credit was specifically reflected in the determination of Net Working Capital (as finally determined under this Agreement). In the case of a refund of Taxes relating to a Straddle Period, such refund shall be equitably apportioned to the pre-Closing portion of such Straddle Period consistent with the principles set forth in Section 5.15(b). If Buyer or any of its Affiliates receives any refund to which (or to a portion of which) Seller is entitled, Buyer shall, within fifteen (15) days of receipt or entitlement thereto, pay, or cause to be paid, the amount Seller is entitled under this Section 5.15(f) to Seller. Buyer and the Company shall, if Seller so requests in writing, reasonably cooperate within the ordinary course of the Company’s post-business practices in obtaining such refund or credit, including through the filing of amended Tax Returns or refund claims. In the event that the Company is required to repay any such refund or credit, with respect to which a payment has been made pursuant to this Section 5.15(f) to Seller to any taxing authority due to the successful challenge of such refund or credit by such taxing authority, the amount so repaid (together with any related interest and/or penalties (except to the extent that such penalties are attributable to any gross negligence, recklessness or willful misconduct of the Buyer, the Company or their Affiliates) imposed by such taxing authority with respect to such repayment) shall constitute Pre-Closing Taxes for purposes of this Agreement.

(g)Except as otherwise required under applicable Law, without the prior written consent of Seller (which consent shall not be unreasonably withheld, conditioned or delayed), Buyer shall not, and shall not permit or cause the Company to, (a) amend (or cause to be amended) or otherwise modify (or cause to be otherwise modified) any Tax Returns of the Company with respect to any Pre-Closing Tax Period; (b) file any Tax Return of the Company for any Pre-Closing Tax Period or Straddle Period in a jurisdiction in which the Company did not previously file a Tax Return; (c) make or change any Tax election with respect to the Company that has a retroactive effect to any Pre-Closing Tax Period or Straddle Period; (d) agree to the waiver or extension of the statute of limitations relating to any Taxes of the Company for any Pre-Closing Tax Period or Straddle Period; (e) initiate any voluntarily disclosure process or agreement with any taxing authority on behalf of the Company with respect to any Pre-Closing Tax Period or Straddle Period or Taxes attributable to any Pre-Closing Tax Period or Straddle Period; (f) surrender any right to claim a material refund of Taxes of the Company with respect to any Pre-Closing Tax Period or Straddle Period; or (g) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment that relates in whole or in part to any Pre-Closing Tax Period or Straddle Period.

(h)All tax-sharing agreements or similar agreements (other than Non-Tax Agreements) with respect to or involving the Company shall be terminated as of the Closing Date and, after the Closing Date, the Company shall not be bound thereby or have any liability thereunder.

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(i)The Company and the Seller shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other Party's request) the provision of records and information that are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Company and Seller agree (A) to retain all books and records with respect to Tax matters pertinent to the Company relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other Party so requests, the Company and Seller, as the case may be, shall allow the other Party to take possession of such books and records.

(j)For federal income Tax purposes, acquisition of the Acquired Shares is intended to be treated (i) in part, as a contribution by the Seller to Parent of the Contributed Shares in exchange for the Rollover Interests pursuant to Section 351 of the Code (the “Section 351 Transaction”) and (ii) in part, as a sale by the Seller to the Buyer of the Purchased Shares for the Cash Purchase Price plus the Seller Mezzanine Note. The Parties acknowledge and agree that they are unaware of any facts that would prevent the Section 351 Transaction from being treated as a transaction under Section 351 of the Code, and they have taken and shall continue to take all commercially reasonably required actions in accordance therewith, including fulfilling their obligations under this Agreement and the Subscription Agreement. Unless the Parties otherwise agree in writing, none of the parties and none of their Affiliates shall take any action after the Closing Date which action would cause the Section 351 Transaction to fail to qualify under Section 351 of the Code. The Parties further agree that for all income Tax purposes, payments made pursuant to the Seller Mezzanine Note (other than amounts treated as interest for income Tax purposes) shall be reported under the installment sale method pursuant to Section 453 of the Code, unless the Seller otherwise notifies the Buyer in writing that the Seller has elected or plans to elect out of the installment sale method of reporting. The Parties each will, and will cause each of their respective Affiliates to, prepare and file all Tax Returns in a manner consistent with this Section 5.15(j), and none of the Parties will take any position with any taxing authority or otherwise that is inconsistent with this Section 5.15(j), unless required to do so pursuant to a final “determination” as defined in Section 1313(a) of the Code. Except for transfers under Section 351(c) of the Code, Buyer represents and warranties that it does not have any knowledge that any member or equity owner has a present intention to dispose of its equity interests in Parent.

(k)Buyer and the Company and any other Person that has a payment obligation pursuant to this Agreement shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any Person such amounts required to be deducted and withheld from such Person with respect to the making of such payment under the Code and the rules and regulations promulgated thereunder, or any provision of state, local or foreign Law relating to Taxes; provided, however, that (i) before any such deduction and withholding, Buyer shall give the Seller five (5) days prior written notice of its or the Company’s intent to deduct and withhold, and (ii) Buyer shall cooperate in good faith with the Seller in efforts to obtain reduction of or relief from such deduction and withholding. To the extent that amounts are so deducted, withheld and paid to the appropriate taxing authority, such deducted, withheld and paid over amounts shall be treated for all purposes

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of this Agreement as having been paid to such Person in respect of which such deduction and withholding was made.

(l)The Buyer shall pay to the Seller, any Transaction Tax Benefits realized. For this purposes, a “Transaction Tax Benefit” is the excess, if any, between (A) the New York City income Tax liability of the Buyer, the Company or their Affiliates for a Post-Closing Tax Period calculated by excluding the Reap Tax Credits and NYC NOL Carryover and (B) the New York City income Tax liability of the Buyer, the Company or their Affiliates for a Post-Closing Tax Period calculated by taking into account the Reap Tax Credits and NYC NOL Carryover. Buyer agrees to pay to the Seller, within ten (10) Business Days after the filing of the annual New York City income Tax Return, on which such Transaction Tax Benefit is claimed, an amount equal to such Transaction Tax Benefit; provided, however, that no payments shall be due or payable under this Section 5.15(l) with respect to any Transaction Tax Benefit described herein that is realized by the Company, the Buyer or any Affiliate thereof for any taxable year ending after December 31, 2024. The Buyer shall provide the Seller with a written statement of its calculation of each Transaction Tax Benefit payment, which written statement shall include the amount of Reap Tax Credits and NYC NOL Carryover utilized in the most recent Tax year and the amount of Reap Tax Credits and NYC NOL Carryover that have not yet been utilized. In the event of a dispute regarding the calculation of a Transaction Tax Benefit payment, the procedures described in Section 2.05(c) shall govern the resolution of such dispute. The Buyer shall, and shall cause the Company to, act in good faith as to Seller’s interests under this Section 5.15(l) and neither Buyer, the Company nor any of their Affiliates shall take any action that is intended to interfere with, or reasonably be expected to materially and adversely impact, the ability of the Buyer, the Company or any of their Affiliates to maximize the Transaction Tax Benefit payments described in this Section 5.15(l), except any such action that is required by applicable Law. The parties agree that any amounts paid pursuant to this Section 5.15(l) shall be treated as additional Purchase Price paid pursuant to this Agreement (except to the extent that such amounts constitute imputed interest, as determined under applicable Law).

Section 5.16Exclusivity. From the Effective Date until the Closing, Seller shall not, and shall cause the Company and their respective Affiliates and Representatives not to, directly or indirectly: (a) solicit, initiate or encourage the submission of any proposal or offer from any Person relating to, or enter into or consummate any agreement or transaction relating to, the acquisition of any capital stock of the Company, or any merger, recapitalization, leveraged dividend, share exchange, sale of substantial assets or any similar transaction involving the Company, or that would otherwise be an alternative to the transactions contemplated by this Agreement; or (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner, any effort or attempt by any Person to do or seek any of the foregoing. Seller shall not vote the equity interests of the Company in favor of any such acquisition, regardless of the manner in which such transaction is structured. Seller shall, and shall cause the Company to: (i) immediately cease, and direct its and their respective Affiliates and its and their respective Representatives to immediately cease, any activity inconsistent with the preceding provisions of this Section 5.16; and (ii) notify Buyer immediately if any Person makes any proposal, offer, inquiry or contact with respect to any matter described in the foregoing clause (a) of this Section 5.16 (whether solicited or unsolicited).

Section 5.17Release. Seller, on behalf of Seller and his Affiliates (excluding, for the avoidance of doubt, the Company), heirs, beneficiaries, trustees, successors and assigns (each, a

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“Releaser”) hereby unconditionally releases, acquits and forever discharges the Company (as , Buyer, Parent and their equityholders and their past, present and future partners, members, owners, principals, officers, representatives, Affiliates, directors, managers, employees, counsel, agents, successors and assigns, solely in their capacities as such (each, a “Releasee”), of and from any and all contracts (other than the Transaction Documents), suit, claim, action or proceeding, liabilities and obligations (including any of the foregoing which may result from any matter in relation to which any Buyer Indemnified Party brings an indemnification claim under this Agreement) (the “Released Claims”) which such Releaser ever had, now has or may in the future have on or by reason of any matter, cause or thing whatsoever related to or involving the Company or its businesses, in each case solely to the extent relating to the period prior to the Closing. Seller hereby represents and warrants, on behalf of Seller and each of the Releasers, that Seller has not, and none of the Releasers has, assigned or otherwise transferred any of Seller’s or such Releasers’ right or interest in or to any of the Released Claims. Seller, on behalf of Seller and each of the Releasers, hereby irrevocably covenants to refrain from asserting any claim or demand, or commencing, instituting or causing to be commenced or instituted, or participating, assisting, or cooperating (except with Buyer or the Company) in, or encouraging, assisting and/or soliciting any other Person to institute, any Released Claim against any Releasee. Notwithstanding the foregoing, nothing contained in this Section 5.17 will operate to release any Released Claims of Seller: (i) arising under or pursuant to this Agreement or any other Transaction Document; (ii) arising under or pursuant to any health or retirement plans provided by the Company in which Seller was a participant at or prior to the Closing; or (iii) for Seller’s unpaid salary or wages with respect to the pay period immediately prior to the Closing, as applicable; provided, that amounts under the foregoing clauses (ii) and (iii) have been fully accounted for in Net Working Capital as finally determined under this Agreement.

Section 5.18Restrictive Covenants

(a)Seller hereby acknowledges and agrees that the covenants and agreements set forth in this Section 5.18 are a material inducement to Buyer to enter into this Agreement and to perform its obligations hereunder, and that Buyer would not obtain the benefit of the bargain set forth in this Agreement as specifically negotiated by the parties hereto if Seller breaches the provisions of this Section 5.18. Seller further acknowledges and agrees that (i) Buyer and its Affiliates would be irreparably damaged if Seller were to breach any of the provisions of this Section 5.18 and that any such breach by Seller would result in a significant loss of goodwill by Buyer and its Affiliates in respect of the Company for which money damages would not be a sufficient remedy, (ii) the restrictions contained in this Section 5.18 are reasonable in all respects (including, with respect to the subject matter, time period and geographical area) with respect to Seller based on Seller’s contributions to the creation of the goodwill of the Company, and are necessary to protect Buyer’s interest in, and the value of the Company, as well as the goodwill inherent therein, and (iii) Seller contributed to the creation of such goodwill prior to the Closing, and is transferring all of such goodwill to Buyer pursuant to this Agreement and the transactions contemplated hereby.

(b)Seller agrees that, during the period commencing on the Closing Date and ending on the fifth (5th) anniversary thereof (the “Restricted Period”), Seller shall not, and shall cause his Affiliates not to, directly or indirectly:

(i)own any interest in, manage, control, participate in (whether as an owner, operator, manager, consultant, investor, agent, representative or otherwise), consult with, render

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services for or otherwise engage in any business or entity that, directly or indirectly, conducts, engages or otherwise operates any Restricted Business anywhere in North America; provided, that Seller will not be in violation of the foregoing solely by reason of Seller’s ownership of less than 2% of the outstanding shares of capital stock of any corporation that is publicly traded on a national securities exchange so long as Seller has no active participation in the business of such corporation;

(ii)induce or attempt to induce any existing or prospective client, customer, vendor, supplier, distributor, sales representative, licensee, licensor, lessor or other business relation (including insurance companies) of the U.S. Roundtables Business to cease or reduce their business with the Company or Buyer, or in any way interfere with the relationship between any such Person, on the one hand, and the Company or Buyer, on the other hand, including by inducing such Person to alter the terms of business with the Company or Buyer;

(iii)solicit, induce or attempt to solicit or induce any Person employed by or serving as a consultant to the Company or Buyer to leave the employ or services of the Company or Buyer, or to terminate his or her employment or engagement with the Company or Buyer;

(iv)hire any Person described in the preceding clause (iii) within twelve (12) months of the last date such Person was employed or engaged by the Company or Buyer; or

(v)make any negative or disparaging statements or communications about the Company, Buyer or any of their respective Affiliates.

(c)If at the time of enforcement of this Section 5.18, a court of competent jurisdiction holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that such court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by Law.

(d)In the event of breach by Seller of any of the provisions of this Section 5.18, money damages would be inadequate and Buyer would have no adequate remedy at Law. Accordingly, Seller agrees that, in the event of a breach or threatened breach by Seller of this Section 5.18, Buyer shall have the right, in addition to an action or actions for damages or any other rights and remedies existing in its favor, to specific performance, injunctive and/or other equitable relief (without posting a bond or other security) to enforce its rights and each of Seller’s obligations under this Section 5.18 or to prevent any violations (whether anticipatory, continuing or future) of the provisions of this Section 5.18. Notwithstanding anything to the contrary in this Section 5.18, the Restricted Period shall be extended with respect to Seller by the amount of time, if any, that Seller is in breach of Seller’s obligations under this Section 5.18.

(e)The provisions of this Section 5.18 are in addition to, and not in limitation of, any other similar agreements, contracts or restrictions to which Seller is bound.

Section 5.19Specified Shared Contracts

(a)Commencing on the date of this Agreement and continuing thereafter, NewCo will in good faith use commercially reasonable efforts to enter into agreements with each of the counter-

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parties to the Specified Shared Contracts with respect to the Spun-Out Business Services prior to Closing or promptly following Closing.

(b)In the event that NewCo has not entered into new agreements with the counter-parties to the Specified Shared Contracts prior to Closing which new agreements allow NewCo to replace such Specified Shared Contract with respect to the conduct of the businesses relating to its pre-Restructuring lines of business, other than the U.S. Roundtables Business, that were performed by the Company with, or as part of, the Spun-Out Assets prior to Closing (the “Spun-Out Business Services”), the Company shall: (i) use commercially reasonable efforts to provide to NewCo the benefits, in all material respects, of the applicable Specified Shared Contract related to the Spun-Out Business Services; (ii) cooperate in any reasonable and lawful arrangement designed to provide such benefits to NewCo; and (iii) enforce at the request and expense of NewCo and for the account of NewCo, any rights of the Company arising from any such Specified Shared Contract; provided that the Company shall not be required to make any expenditure or incur any liability in connection with any such activities described in clauses (i) through (iii) above, unless reimbursed and indemnified by NewCo for the full amount of any such expenditure or liability.

(c)To the extent NewCo is provided with the benefits received by the Company under any Specified Shared Contract with respect to the Spun-Out Business Services pursuant to Section 5.19(a), NewCo shall perform and discharge when due the obligations, and assume the liabilities, of the Company under such Specified Shared Contract with respect to the Spun-Out Business Services.

(d)Seller, on behalf of itself and NewCo agrees that, neither Buyer nor the Company shall have any liability whatsoever to NewCo arising out of or relating to (i) the failure to obtain any consents, approvals or authorizations that may have been or may be required in connection with the transactions contemplated by this Agreement or because of the breach, violation, acceleration or termination of any Contract as a result thereof, and (ii) the performance of any Spun-Out Business Services by the Company.

(e)The parties further agree that: (a) NewCo will receive only the economic and operational equivalent of the Spun-Out Business Services portion of the Specified Shared Contracts, which Spun-Out Business Services portion of the Specified Shared Contracts will be determined in good faith by the board of directors of the Company; (b) NewCo will exercise control over, and responsibility for, any NewCo employee servicing such Contracts; (c) the Company will invoice the counter-parties to the Specified Shared Contracts and effect collection of money or other consideration that becomes due and payable for the Spun-Out Business Services and promptly pay over to NewCo only such money or consideration related to the Spun-Out Business Services; (d) NewCo will own all work product, Intellectual Property, data, books and records, and Claims arising solely out of the provision of the Spun-Out Business Services; (e) except as provided in the foregoing clause (d), the Company will own all other work product, Intellectual Property, data, books and records, and Claims arising out of the provision of services under the Specified Shared Contracts.

(f)Once NewCo has entered into a new agreement the rights and obligations of the parties under this Section 5.19 shall cease with respect to such Specified Shared Contract.

(g)The obligations of the Company under this Section 5.19shall expire on the first anniversary of the Closing Date.

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Section 5.20VIZOR Software; Website Coordination; United Kingdom/Ireland Related Covenants.

(a)The parties covenant and agree that, (i) the Company owns and shall retain all right, title and interest in and to the VIZOR software,including all Intellectual Property rights appurtenant thereto,and, if requested, the Seller shall causethe UK Subsidiary to assist the Company to secure, obtain, perfect, transfer, maintain, protect and enforce such rights title and interest, including execution of all necessary documentation,  and (ii) the parties shall cooperate and negotiate in good faith to enter into, at Closing or promptly following Closing (but dated effective as of the Closing Date), an agreement by and between the Company and the UK Subsidiary granting the UK Subsidiary a limited, perpetual, non-assignable, non-transferable, worldwide, royalty-free, fully-paid up license to use the VIZOR software solely as specified therein (the “VIZOR License Agreement”); provided that, for the avoidance of doubt, the VIZOR License Agreement shall provide that (x) UK Subsidiary shall not be permitted to use VIZOR other than in connection with the operation of its business in the United Kingdom and Ireland, (y) UK Subsidiary shall not be entitled to retain a copy of (or otherwise modify) the source code for the VIZOR software, and (z) UK Subsidiary shall not be entitled to access any of the Confidential Information or other data of the U.S. Roundtable Business.  Notwithstanding anything to the contrary in this Agreement, that the entry into the VIZOR License Agreement described in this Section 5.20(a) shall not be deemed to be a condition precedent to the Closing of either Buyer or Seller (i.e., neither party may refuse to consummate the transactions contemplated by this Agreement as a result of the failure to enter into the VIZOR License Agreement).

(b)During the period commencing on the Closing Date and continuing for eighteen (18) months thereafter (the “Website Transition Period”), the Company agrees to host and support (at no cost to Seller or NewCo) the websites on which the businesses of the Spun-Out Assets are currently conducted (the “Spun-Out Sites”), and at the end of the Website Transaction Period, Seller (or NewCo on behalf of Seller) shall, at its sole cost and expense, be entitled to transfer and copy the contents of such Spun-Out Sites to a new web hosting platform (the “New Platform”) and NewCo shall retain all rights and title in such Spun-Out Sites; provided that, Seller (or NewCo on behalf of Seller) is responsible for ensuring that the New Platform is interoperable with the Spun-Out Sites and the Company shall not be liable for any issues related to the New Platform, including, without limitation, the functionality or interoperability of the New Platform with the Spun-Out Sites. Notwithstanding the foregoing, as long as Seller is utilizing commercially reasonable efforts to migrate and transition the Spun-Out Sites to the New Platform, Seller may request in a written notice delivered to Buyer up to two additional 6-month extensions of the Website Transition Period (with such extension requests not to be unreasonably withheld, conditioned or delay by Buyer).

(c)During the period commencing on the Closing Date and continuing for a period of four (4) years thereafter, (i) Buyer agrees not to, and shall cause the Company not to, operate the Business in the United Kingdom or Ireland, and (ii) Seller agrees to cause the UK Subsidiary not to operate its business in any country or territory other than within in the United Kingdom or Ireland.

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ARTICLE VI

CONDITIONS TO CLOSING

Section 6.01Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the condition that no Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

Section 6.02Conditions to Obligations of Buyer. The obligation of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer’s waiver in writing, at or prior to the Closing, of each of the following conditions:

(a)(i) the representations and warranties of Seller contained in this Agreement (disregarding all qualifications and exceptions contained therein relating to materiality, Material Adverse Effect or similar qualifications), other than the Fundamental Representations, shall be true and correct in all respects as of the date hereof and as of the Closing Date with the same effect as though made at and as of the Closing Date (except those representations and warranties that expressly address matters only as of a specified date, which shall be so true and correct in all respects as of that specified date), except where the failure of such representations and warranties to be so true and correct would not have a Material Adverse Effect; and (ii) the Fundamental Representations shall be true and correct in all respects as of the date hereof and as of the Closing Date with the same effect as though made at and as of the Closing Date (except those Fundamental Representations that expressly address matters only as of a specified date, which shall be so true and correct in all respects as of that specified date);

(b)Seller shall have duly performed and complied in all material respects with all agreements, covenants, obligations and conditions required by this Agreement or the other Transaction Documents to be performed or complied with by Seller prior to or on the Closing Date;

(c)Seller shall have received all consents, authorizations, orders and approvals from the Governmental Authorities or counterparties to the Material Contracts, as applicable, referred to in Section 6.02(c) of the Disclosure Schedules, in each case, in form and substance reasonably satisfactory to Buyer and Seller, and no such consent, authorization, order and approval shall have been revoked;

(d)since the date of this Agreement there shall not have occurred a Material Adverse Effect;

(e)Buyer shall have received each of the Closing deliverables set forth in Section 2.03(c);

(f)Seller shall have delivered (and not revoked or otherwise rescinded) to Buyer an executed signature page of Seller to each of (i) the Subscription Agreement and (ii) a collateral agency agreement with respect to the Seller Mezzanine Note, in the form attached as Exhibit G hereto, pursuant to which the agent under the Subordinated Note Purchase Agreement shall act as

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collateral agent with respect to the subordinated note(s) issued thereunder and the Seller Mezzanine Note; and

(g)the R&W Insurance Policy shall have been issued and shall be bound and in full force and effect.

Section 6.03Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Seller’s waiver, at or prior to the Closing, of each of the following conditions:

(a)the representations and warranties of Buyer (disregarding all qualifications and exceptions contained therein relating to materiality, material adverse effect or similar qualifications) contained in this Agreement shall be true and correct in all respects as of the Closing Date with the same effect as though made at and as of the date hereof and as of the Closing Date (except those representations and warranties that expressly address matters only as of a specified date, which shall be so true and correct in all respects as of that specified date) except where the failure of such representations and warranties to be so true and correct would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby;

(b)Buyer shall have duly performed and complied in all material respects with all agreements, covenants, obligations and conditions required by this Agreement or the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date; and

(c)Seller shall have received each of the Closing deliverables set forth in Section 2.03(b).

ARTICLE VIIINDEMNIFICATION

Section 7.01Indemnification By Seller. Subject to the other terms and conditions of this Article VII, from and after the Closing, Seller shall indemnify, defend and hold harmless Buyer and its Affiliates (including, for the avoidance of doubt, the post-Closing Company), successors and permitted assigns and each of the foregoing’s respective directors, officers, managers, members, equity holders, employees, representatives and agents (collectively, the “Buyer Indemnified Parties”), and save and hold each of them harmless from and against, and pay on behalf of or reimburse such Buyer Indemnified Parties as and when incurred for, any and all Losses which any Buyer Indemnified Party suffers, sustains or becomes subject to (regardless of whether or not such Losses relate to any Third-Party Claim) based upon, arising out of, as a result of or by reason of, without duplication:

(a)any inaccuracy in or breach of any of the Fundamental Representations;

(b)any breach or non-fulfillment of any covenant, agreement or obligation of Seller under this Agreement to be performed by Seller after the Closing; or

(c)any Closing Indebtedness or Closing Transaction Expenses not taken into account in the determination of the Cash Purchase Price as finally determined under Article II;

(d)the Restructuring, the Spun-Out Asset and the Liabilities arising out of such Spun-Out Assets; and/or

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(e)all Pre-Closing Taxes.

Section 7.02Indemnification By Buyer. Subject to the other terms and conditions of this Article VII, from and after the Closing, Buyer shall indemnify, defend and hold harmless Seller and his Affiliates (excluding, for the avoidance of doubt, the Company), successors and permitted assigns and each of the foregoing’s respective directors, officers, managers, members, equity holders, employees, representatives and agents (collectively, the “Seller Indemnified Parties”), and save and hold each of them harmless from and against, and pay on behalf of or reimburse such Seller Indemnified Parties as and when incurred for, any and all Losses which any Seller Indemnified Party suffers, sustains or becomes subject to (regardless of whether or not such Losses relate to any Third-Party Claim) based upon, arising out of, as a result of or by reason of, without duplication:

(a)any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement;

(b)any breach or non-fulfillment of any covenant, agreement or obligation of Buyer under this Agreement to be performed by Buyer after the Closing; and/or

(c)any Transfer Taxes which are an obligation of Buyer pursuant to Section 5.15(a).

Section 7.03Indemnification Procedures.

(a)Third-Party Claims. If any Indemnified Party receives notice of any Third-Party Claim for which such Indemnified Party intends to seek indemnification from another party to this Agreement, such Indemnified Party shall give the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Third-Party Claim in reasonable detail and shall indicate the basis hereunder upon which the Indemnified Party’s claim for indemnification is asserted. The Indemnified Party shall tender the defense of such Third-Party Claim to the Indemnifying Party, and if the Indemnifying Party accepts such tender within fifteen (15) Business Days thereafter, then except as herein provided, the Indemnified Party shall not, and the Indemnifying Party shall, have the right to contest, defend and litigate such Third-Party Claim; provided that, in order for the Indemnifying Party to assume control of such defense, it shall first verify to the Indemnified Party in writing within fifteen (15) Business Days of its receipt of the applicable notice of the Third-Party Claim that the Indemnifying Party shall be fully responsible (with no reservation of any rights and without regard to any limitation set forth in this Agreement) for all liabilities and obligations relating to such Third-Party Claim and that it shall provide full indemnification to the Indemnified Party with respect to such Third-Party Claim (the “Control of Defense Conditions”); provided, further, that the Indemnifying Party shall not be entitled to assume control of such defense and shall pay the fees and expenses of counsel retained by the Indemnified Party if (i) the claim for indemnification relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation; (ii) the claim seeks injunctive relief or other form of equitable remedy; (iii) upon petition by the Indemnified Party, the appropriate court rules that the Indemnifying Party failed or is failing to vigorously prosecute or defend such Third-Party Claim; (iv) legal counsel to the Indemnified Party reasonably concludes that the Indemnified Party and Indemnifying Party have a conflict of interest with respect to such Third-Party Claim or that the Indemnified Party has one or more defenses not available to the

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Indemnifying Party; (v) Buyer reasonably believes that the claim could have a material impact on the business operations of the Company; or (vi) the Indemnified Party is seeking recovery with respect to such Third-Party Claim under the R&W Insurance Policy. The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle or compromise, or admit any liability with respect to, any Third-Party Claim if the Indemnified Party is not expressly and unconditionally released from all liability thereunder, or if the terms of such settlement would result in (A) the imposition of a consent, order, injunction or decree that would restrict the future activity or conduct of the Indemnified Party, (B) a finding or admission of a violation of Law or the rights of any Person by the Indemnified Party, or (C) any monetary liability of the Indemnified Party that will not be paid or reimbursed by the R&W Insurance Policy. If the Indemnifying Party assumes the defense of a Third-Party Claim and is in good faith contesting such Third-Party Claim and has satisfied and continues to satisfy the Control of Defense Conditions, the Indemnified Party shall agree to any settlement, compromise or discharge of a Third-Party Claim that the Indemnifying Party may reasonably recommend and that by its terms (x) obligates the Indemnifying Party and/or the R&W Insurance Policy to pay the full amount of Losses in connection with such Third-Party Claim and (y) releases the Indemnified Party in connection with such Third-Party Claim and does not impose any restriction on the future activity or conduct of the Indemnified Party. All expenses (including attorneys’ fees) incurred by the Indemnifying Party in connection with the foregoing shall be paid by the Indemnifying Party. The Indemnified Party shall have the right, at its own expense, to be represented by counsel and participate in any such contest, defense, litigation or settlement conducted by the Indemnifying Party in accordance with this Section 7.03(a), and if the Indemnified Party exercises such right, the parties shall cooperate in the contest, defense, litigation and settlement of the Third-Party Claim. The Indemnifying Party shall lose its right to contest, defend, litigate and settle the Third-Party Claim if it shall fail to diligently contest the Third-Party Claim. If an Indemnified Party is entitled to indemnification against a Third-Party Claim, and the Indemnifying Party fails to accept a tender of the defense of a Third-Party Claim pursuant to this Section 7.03(a), or if, in accordance with the foregoing, the Indemnifying Party shall lose its right to contest, defend, litigate and settle such a Third-Party Claim, the Indemnified Party shall have the right, without prejudice to its right of indemnification hereunder, in its discretion exercised in reasonable good faith and upon the advice of counsel, to contest, defend and litigate such Third-Party Claim, and may settle such Third-Party Claim, either before or after the initiation of litigation, at such time and upon such terms as the Indemnified Party deems fair and reasonable; provided, that at least five (5) days prior to any such settlement, written notice of its intention to settle is given to the Indemnifying Party. If, pursuant to the preceding sentence, the Indemnified Party so contests, defends, litigates or settles a Third-Party Claim for which it is entitled to indemnification hereunder, the Indemnified Party shall be reimbursed by the Indemnifying Party for the reasonable attorneys’ fees and other expenses of contesting, defending, litigating and settling the Third-Party Claim promptly following the delivery to the Indemnifying Party of itemized bills for such reasonable attorneys’ fees and other expenses.

(b)Direct Claims. Any Claim by an Indemnified Party on account of a Loss which does not result from a Third-Party Claim (a “Direct Claim”) and for which such Indemnified Party intends to seek indemnification hereunder shall be asserted by the Indemnified Party giving the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, shall

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indicate the basis hereunder upon which the Indemnified Party’s claim for indemnification is asserted, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim. During such thirty- (30-) day period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information (subject to customary non-disclosure agreements) and assistance (including reasonable access to the Company’s personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such thirty- (30-) day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

Section 7.04Survival. The covenants and agreements contained in this Agreement to the extent required to be performed before or at the Closing shall survive the Closing and shall terminate effective immediately as of the Closing; provided that the covenants set forth in Section 5.09 shall survive the Closing for a period of twelve (12) months. The covenants and agreements contained in this Agreement to the extent required to be performed after the Closing shall survive the Closing until fully performed in accordance with their terms. None of the representations and warranties of Seller contained in this Agreement shall survive the Closing, except that the Fundamental Representations shall survive the Closing and continue in full force and effect until the expiration of the applicable statute of limitations (including any extensions thereto to the extent that such statute of limitations may be tolled) plus sixty (60) days. The representations and warranties of Buyer under this Agreement shall survive the Closing and continue in full force and effect until the twelve (12)-month anniversary of the Closing Date. Following the expiration of a representation, warranty, covenant or agreement, no action, suit, proceeding or other Claim may be initiated by any Buyer Indemnified Party or Seller Indemnified Party hereunder with respect thereto, regardless of any statute of limitations period that would otherwise apply; provided, that if a written notice of a Claim has been given in accordance with Section 7.03 prior to the expiration of the applicable representation, warranty, covenant or agreement, then the applicable representation, warranty, covenant or agreement shall survive only as to such Claim, until such Claim has been finally resolved.

Section 7.05Certain Limitations. The Person making a claim under this Article VII is referred to as the “Indemnified Party”, and the Person against whom such claims are asserted under this Article VII is referred to as the “Indemnifying Party”. The indemnification provided for in Section 7.01 and Section 7.02 shall be subject to the following limitations:

(a)BUYER ACKNOWLEDGES AND AGREES, ON BEHALF OF BUYER AND EACH OTHER BUYER INDEMNIFIED PARTY, THAT, EXCEPT IN THE CASE OF FRAUD, SELLER SHALL HAVE NO DIRECT OR INDIRECT LIABILITY WITH RESPECT TO ANY BREACH OF ANY REPRESENTATION OR WARRANTY OF SELLER CONTAINED IN THIS AGREEMENT (OTHER THAN THE FUNDAMENTAL REPRESENTATIONS), AND THAT NO CLAIM FOR INDEMNIFICATION BY ANY BUYER INDEMNIFIED PARTY SHALL BE ASSERTED AGAINST SELLER WITH RESPECT THERETO, EXCEPT TO THE EXTENT

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SUCH CLAIM IS BASED ON FRAUD OR ANY BREACH OR INACCURACY IN ANY FUNDAMENTAL REPRESENTATION;

(b)except in the case of Fraud, Seller shall not be liable in respect of any indemnification obligations for aggregate Losses under this Agreement in excess of an amount equal to the Purchase Price; provided, that the foregoing shall not limit any rights or remedies of any Buyer Indemnified Party under or with respect to the R&W Insurance Policy;

(c)an Indemnified Party shall not be entitled under this Agreement to multiple recovery for the same Losses, including to the extent such Losses are included in the calculation of Net Working Capital, Closing Indebtedness or Closing Transaction Expenses, in each case, as finally determined pursuant to Section 2.05;

(d)for purposes of determining whether there has been a breach or inaccuracy of any representation or warranty and the amount of any Losses that are the subject matter of a Claim for indemnification hereunder, each representation and warranty contained in this Agreement (other than Section 3.08(a)) shall be read without regard and without giving effect to any materiality or Material Adverse Effect or similar standard or qualification contained in such representation or warranty (as if such standard or qualification were deleted from such representation and warranty);

(e)in the event any Indemnified Party suffers any Losses by reason of a party’s Fraud, such Indemnified Party shall be entitled to seek recovery therefor without regard to any limitation set forth in this Agreement (whether a temporal limitation, dollar limitation or otherwise);

(f)each Indemnified Party shall, to the extent required by applicable Law, use commercially reasonable efforts to mitigate its Losses upon and after becoming aware of any event or condition that would reasonably be expected to give rise to any Losses that may be indemnifiable hereunder; and

(g)notwithstanding anything to the contrary in this Agreement or in the Organizational Documents of the Company, Seller shall not make any Claim for indemnification or advancement of expenses hereunder or under the Organizational Documents of the Company against any Buyer Indemnified Party by reason of the fact that Seller was a director, manager, partner, member, trustee, officer, employee, equity holder or agent (each, an “Entity Representative”) of the Company or was serving at the request of the Company as an Entity Representative of another Person (whether such Claim is for judgments, Losses, penalties, fines, costs, amounts paid in settlement, losses, expenses or otherwise) to the extent the Claim for indemnification or advancement of expenses arises from a Claim pursuant to which any Buyer Indemnified Party is actually entitled to indemnification from Seller; provided, that the foregoing shall not apply to remedies Seller may have under the D&O Tail Policy. Seller hereby acknowledges and agrees that he shall have no Claims or right to contribution or indemnity from any Buyer Indemnified Party with respect to any amounts paid pursuant to this Article VII.

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Section 7.06Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.

Section 7.07Exclusive Remedies. The parties hereby acknowledge and agree that, except for (a) Claims with respect to Fraud, (b) disputes under Section 2.05 (which disputes will be resolved in accordance with the dispute mechanisms set forth therein), and (c) the parties’ rights under Section 9.11, their sole and exclusive remedy with respect to any and all Claims based upon, arising out of or otherwise in respect of any breach of any representation, warranty, covenant, agreement or obligation set forth herein shall be pursuant to the indemnification provisions set forth in this Article VII (other than, in the case of the Buyer Indemnified Parties, such recoveries pursuant to the R&W Insurance Policy). Nothing in this Section 7.07 shall limit any Person’s right to seek and obtain any equitable relief to which any Person shall be entitled pursuant to Section 9.11 or to seek any remedy in the case of Fraud.

ARTICLE VIII

TERMINATION

Section 8.01Termination. This Agreement may be terminated at any time prior to the Closing:

(a)by the mutual written consent of Seller and Buyer;

(b)by Buyer by written notice to Seller if:

(i)(A) Buyer is not then in breach of any representation, warranty, covenant or agreement that would cause Seller’s obligation to close under Section 6.03 unable to be satisfied, and (B) there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant to this Agreement that (I) would cause any of the conditions specified in Section 6.02(a) or Section 6.02(b) to not be satisfied, and (II) if capable of being cured, shall not have been cured prior to the earlier of (x) ten (10) days following Seller’s receipt of written notice thereof from Buyer, with specific reference to the alleged facts underlying such breach or failure to perform and the conclusion it would lead to such conditions not being met, and (y) the Drop Dead Date; or

(ii)any of the conditions set forth in Section 6.01 or Section 6.02 shall not have been fulfilled by the date which is ninety (90) days after the date hereof (such date, the “Drop Dead Date”), unless the principal cause of such failure shall be due to the failure of Buyer to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it prior to the Closing;

(c)by Seller by written notice to Buyer:

(i)if (A) Seller is then in breach of any representation, warranty, covenant or agreement that would cause Buyer’s obligation to close under Section 6.02 unable to be satisfied, and (B) there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that (I) would cause any of the conditions specified in Section 6.03(a) or Section 6.03(b) to not be satisfied, and (II) if capable of

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being cured, shall not have been cured prior to the earlier of (x) ten (10) days following Buyer’s receipt of written notice thereof from Seller, with specific reference to the alleged facts underlying such breach or failure to perform and the conclusion it would lead to such conditions not being met, and (y) the Drop Dead Date; or

(ii)if any of the conditions set forth in Section 6.01 or Section 6.03 shall not have been fulfilled by the Drop Dead Date, unless the principal cause of such failure shall be due to the failure of Seller to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by them prior to the Closing.

(d)by Buyer or Seller, upon notice to the other party, in the event that:

(i)there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited; or

(ii)any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable; provided, however, that the party seeking to terminate pursuant to this Section 8.01(d)(ii) shall have complied with its obligations under Section 5.09 and used its commercially reasonable efforts to have any such Governmental Order vacated or lifted.

Section 8.02Termination Procedures. If Buyer wishes to exercise its right to terminate this Agreement in accordance with the provisions of Section 8.01, it shall deliver to Seller a written notice stating that Buyer is terminating this Agreement and setting forth a detailed description of the basis on which Buyer is terminating this Agreement. If Seller wishes to exercise its right to terminate this Agreement in accordance with the provisions of Section 8.01, Seller shall deliver to Buyer a written notice stating that Seller is terminating this Agreement and setting forth a detailed description of the basis on which Seller is terminating this Agreement.

Section 8.03Effect of Termination.

(a)In the event of the valid termination of this Agreement in accordance with the provisions of Section 8.01: (i) subject to the following clause (ii), this Agreement shall forthwith become void and of no further force and effect; and (ii) there shall be no liability on the part of any party hereto except that, following the termination of this Agreement and the transactions contemplated hereby, nothing in this Section 8.03(a) shall relieve any party from liability for any willful and knowing material breaches of this Agreement prior to termination.

(b)This Section 8.03 and Article IX shall survive any termination of this Agreement.

ARTICLE IXMISCELLANEOUS

Section 9.01Expenses. Except as otherwise provided herein (including Article II, Section 5.07 and Section 5.15), all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

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Section 9.02Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02):

If to Seller:	Michael Auriemma17111 Biscayne Blvd Apt. 710 North Miami Beach, FL E-mail: michael.auriemma@auriemma.group
with a copy to:	Venable LLP 750 East Pratt Street, Suite 900 Baltimore, Maryland 21202 Attention: Brian J. O’Connor W. Bryan Rakes E-mail: bjoconnor@venable.com wrakes@venable.com
If to Buyer:	c/o Levine Leichtman Capital Partners, LLC 345 North Maple Drive, Suite 300 Beverly Hills, CA 90210 E-mail: dwolmer@llcp.com Attention: David I. Wolmer
with a copy to:	Honigman LLP 2290 First National Building 660 Woodward Avenue Detroit, MI 48226-3506 E-mail: JOpperer@honigman.com     JDrouillard@honigman.com Attention: Joshua F. Opperer         Jacob D. Drouillard

Section 9.03Interpretation. For purposes of this Agreement: (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole; (d) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if,”; (e) the word “shall” denotes a directive and obligation, and not an option; (f) references to a number of days refer to calendar days unless Business Days are specified; (g) whenever any action must be taken on or by a day that is not a Business Day, then such action may be validly taken on or by the next day that is a Business Day; (h) each definition herein shall include the singular and the plural; (i) each reference herein to any gender or neuter shall include the masculine, feminine and neuter

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where appropriate; and (j) the words “contract” or “agreement” mean any contract, lease, license, sublicense, indenture, note, bond, mortgage, instrument, franchise, permit, purchase order, obligation, undertaking or other commitment or arrangement, whether written or oral. Unless the context otherwise requires, references herein: (i) to Articles, Sections, Disclosure Schedules and Exhibits mean the Articles and Sections of, and Disclosure Schedules and Exhibits attached to, this Agreement; (ii) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (iii) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The Disclosure Schedules and Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

Section 9.04Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.    

Section 9.05Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, Buyer and Seller shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 9.06Entire Agreement. This Agreement, the other Transaction Documents and the Confidentiality Agreement constitute the entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous representations, warranties, understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement, the Exhibits and Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control. In the event of any inconsistency between this Agreement and the Confidentiality Agreement, this Agreement will control.

Section 9.07Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. No party may assign its rights or obligations hereunder without the prior written consent of the other parties; provided, that Buyer may, without the prior consent of Seller, (a) assign any or all of its rights and interests hereunder to one or more of its Affiliates and designate one or more of its Affiliates to perform its obligations hereunder, (b) assign any or all of its rights and interests hereunder to its lenders as collateral security, and (c) assign any or all of rights, interests or obligations hereunder to a bona fide third party acquirer of all or substantially all of the assets of Buyer (provided that in the case of clause (a) or (b), Buyer shall remain responsible for the performance of its obligations hereunder).

65

Section 9.08No Third-Party Beneficiaries. Except (a) with respect to the Officers, as provided in Section 5.07, and (b) with respect to the Buyer Indemnified Parties and Seller Indemnified Parties, as provided in Article VII, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 9.09Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each of Buyer and Seller. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 9.10Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a)This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of State of New York or any other jurisdiction).

(b)ANY LEGAL SUIT, ACTION, PROCEEDING OR OTHER CLAIM ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY SHALL ONLY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK IN EACH CASE LOCATED IN THE BOROUGH OF MANHATTAN, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION, PROCEEDING OR OTHER CLAIM. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION, PROCEEDING OR OTHER CLAIM BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION, PROCEEDING OR OTHER CLAIM IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION, PROCEEDING OR OTHER CLAIM BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c)EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH

66

PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (II) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10(c).

Section 9.11Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 9.12Counterparts. This Agreement may be executed counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

Section 9.13Attorney-Client Privilege; Continued Representation. Buyer and Seller hereby acknowledge that Venable LLP has acted as counsel to the Company and Seller with respect to the transactions contemplated by this Agreement. The following provisions in this Section 9.13 apply to the attorney-client relationship between (a) the Company and Venable LLP prior to the Closing, (b) Seller and Venable LLP prior to the Closing, and (c) Seller and Venable LLP following the Closing. Each party hereby agrees that (i) it (for itself or on behalf of the Company after Closing) will not seek to disqualify Venable LLP based solely on its past representation of the Company from acting and continuing to act as counsel to Seller or any of his Affiliates in the event of a dispute hereunder or in the course of the defense or prosecution of any claim relating to the transactions contemplated by this Agreement; (ii) Seller has a reasonable expectation of privacy with respect to his and the Company’s communications (including any email communications using the Company’s email system) with Venable LLP occurring prior to Closing to the extent that such communications concern the transactions contemplated herein and were confidential between the Company and Venable LLP when made (the “Privileged Communications”); (iii) Seller (and, following the Closing, not Buyer or any of its Affiliates, including the Company) shall have access to the Privileged Communications and such Privileged Communications are hereby expressly assigned to and, after the Closing, controlled by Seller; (iv) Buyer and, after the Closing, the Company, shall be prohibited from making use of the Privileged Communications; and (v) the files generated and maintained by Venable LLP as a result of its representation of the Company or Seller in connection with this Agreement and the transaction contemplated hereunder shall be and become the exclusive property of Seller.

[SIGNATURE PAGE FOLLOWS]

67

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

SELLER

By: /s/ Michael Auriemma

Name: Michael Auriemma

BUYER

ROUNDTABLE ACQUISITION, LLC

By: /s/ David I. Wolmer

Name: David I. Wolmer

Title: Authorized Person

Signature Page to Stock Contribution and Purchase Agreement

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chirag J. Bhavsar, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNL Strategic Capital, LLC (the “Registrant”);

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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have [Language omitted in accordance with SEC Release No. 34-47986]:

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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) [Paragraph omitted in accordance with SEC transition instructions contained in SEC Release No. 34-47986];

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(s) 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, 2019	By:	/s/ Chirag J. Bhavsar
		Chirag J. Bhavsar
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tammy J. Tipton, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CNL Strategic Capital, LLC (the “Registrant”);

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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have [Language omitted in accordance with SEC Release No. 34-47986]:

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, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) [Paragraph omitted in accordance with SEC transition instructions contained in SEC Release No. 34-47986];

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(s) 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, 2019	By:	/s/ Tammy J. Tipton
		Tammy J. Tipton
		Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of CNL Strategic Capital, LLC (the “Company”) on Form 10-Q for the period ended June 30, 2019, as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), I, Chirag J. Bhavsar, Chief Executive Officer and Tammy J. Tipton, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Company.

Date: August 8, 2019	/s/ Chirag J. Bhavsar
	Chirag J. Bhavsar
	Chief Executive Officer (Principal Executive Officer)
Date: August 8, 2019	/s/ Tammy J. Tipton
	Tammy J. Tipton
	Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 02, 2019
Document Information [Line Items]
Entity Registrant Name	CNL STRATEGIC CAPITAL, LLC
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001684682
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Class FA
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,422,353
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		513,627
Class T
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		76,991
Class I
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		673,733
Class D
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		230,503

XML

Consolidated Statements of Assets and Liabilities - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Assets
Investments at fair value (amortized cost of $76,774,339 as of June 30, 2019 and December 31, 2018, respectively)	$ 84,951,000	$ 82,500,000
Cash	43,244,264	21,667,867
Deferred offering expenses	5,142	14,434
Net due from related parties (Note 5)	137,930	0
Prepaid expenses and other assets	211,597	70,833
Total assets	128,549,933	104,253,134
Liabilities
Accounts payable and other accrued expenses	341,007	282,856
Net due to related party (Note 5)	0	782,282
Distributions payable	463,898	358,186
Payable for shares repurchased	308,038	0
Total liabilities	1,112,943	1,423,324
Commitments and contingencies (Note 10)
Members’ Equity (Net Assets)
Preferred shares, $0.001 par value, 50,000,000 shares authorized and unissued	0	0
Common shares	4,707	3,862
Capital in excess of par value	119,678,947	97,229,217
Distributable earnings	7,753,336	5,596,731
Total Members’ Equity	127,436,990	102,829,810
Net assets, Total Members’ Equity	127,436,990	102,829,810
Class FA
Members’ Equity (Net Assets)
Common shares	3,373	3,266
Net assets, Total Members’ Equity	91,718,198	87,061,758
Class A
Members’ Equity (Net Assets)
Common shares	468	192
Net assets, Total Members’ Equity	12,509,598	5,086,607
Class T
Members’ Equity (Net Assets)
Common shares	69	31
Net assets, Total Members’ Equity	1,846,952	834,576
Class D
Members’ Equity (Net Assets)
Common shares	205	123
Net assets, Total Members’ Equity	5,433,648	3,222,865
Class I
Members’ Equity (Net Assets)
Common shares	592	250
Net assets, Total Members’ Equity	$ 15,928,594	$ 6,624,004

XML

Condensed Consolidated Statements of Assets and Liabilities (Parenthetical) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Cost	$ 76,774,339	$ 76,774,339
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	50,000,000	50,000,000
Common stock, shares outstanding (in shares)	4,706,690	3,862,515
Class FA
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	7,400,000	3,400,000
Common stock, shares issued (in shares)	3,379,110	3,266,260
Common stock, shares outstanding (in shares)	3,372,710	3,266,260
Class A
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	94,660,000	94,660,000
Common stock, shares issued (in shares)	468,128	192,388
Common stock, shares outstanding (in shares)	467,884	192,388
Class T
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	658,620,000	662,620,000
Common stock, shares issued (in shares)	68,813	31,452
Common stock, shares outstanding (in shares)	68,813	31,452
Class D
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	94,660,000	94,660,000
Common stock, shares issued (in shares)	205,333	122,889
Common stock, shares outstanding (in shares)	205,333	122,889
Class I
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	94,660,000	94,660,000
Common stock, shares issued (in shares)	596,695	249,526
Common stock, shares outstanding (in shares)	591,950	249,526

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		5 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Investment Income
Interest income	$ 1,437,422	$ 1,263,063	$ 1,991,279	$ 2,800,702
Dividend income	405,742	760,923	760,923	812,247
Total investment income	1,843,164	2,023,986	2,752,202	3,612,949
Operating Expenses
Organization and offering expenses	136,303	317,230	538,794	322,004
Base management fees	265,128	194,974	283,536	506,766
Total return incentive fees	496,660	308,735	308,735	496,660
Professional services	182,491	168,862	232,530	410,006
Director fees and expenses	53,380	45,210	82,280	111,079
General and administrative expenses	30,255	61,000	93,810	58,311
Custodian and accounting fees	61,817	39,520	64,433	123,967
Insurance expense	47,079	28,077	28,077	93,024
Expense Related to Distribution or Servicing and Underwriting Fees	9,048	52	52	15,817
Total operating expenses	1,282,161	1,163,660	1,632,247	2,137,634
Expense support	(610,447)	(144,146)	(187,358)	(826,520)
Net expenses	671,714	1,019,514	1,444,889	1,311,114
Net investment income	1,171,450	1,004,472	1,307,313	2,301,835
Net change in unrealized appreciation on investments	2,170,000	928,424	1,452,873	2,451,000
Net increase in net assets resulting from operations	$ 3,341,450	$ 1,932,896	$ 2,760,186	$ 4,752,835
Common shares per share information:
Net investment income (usd per share)	$ 0.27	$ 0.31	$ 0.40	$ 0.55
Basic and diluted earnings (usd per share)	$ 0.76	$ 0.59	$ 0.84	$ 1.13
Weighted average number of common shares outstanding (basic and diluted) (in shares)	4,389,711	3,285,912	3,278,742	4,187,979

XML

Consolidated Statement of Changes in Net Assets - USD ($)	3 Months Ended		5 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Net investment income	$ 1,171,450	$ 1,004,472	$ 1,307,313	$ 2,301,835
Net change in unrealized appreciation on investments	$ 2,170,000	$ 928,424	$ 1,452,873	$ 2,451,000
Number of Shares
Beginning balance (in shares)	4,265,828	3,266,260	8,000	3,862,515
Repurchase of common shares pursuant to share repurchase program (in shares)				(11,389)
Ending balance (in shares)	4,706,690	3,309,921	3,309,921	4,706,690
Total Net Assets
Par value, beginning balance	$ 4,266	$ 3,266	$ 8	$ 3,862
Capital in excess of par value, beginning balance	107,903,071	81,653,234	199,992	97,229,217
Distributable earnings, beginning balance	5,772,145	524,449	0	5,596,731
Total net assets, beginning balance	113,679,482	82,180,949	200,000	102,829,810
Distributions	(1,360,259)	(1,026,590)	(1,329,431)	(2,596,230)
Issuance of common shares through the Offerings	11,913,778	1,083,612	82,540,112	22,486,832
Issuance of common shares through distribution reinvestment plan	170,577	14,858	14,858	271,781
Repurchase of common shares pursuant to share repurchase program	(308,038)			(308,038)
Par value, ending balance	4,707	3,310	3,310	4,707
Capital in excess of par value, ending balance	119,678,947	82,751,660	82,751,660	119,678,947
Distributable earnings, ending balance	7,753,336	1,430,755	1,430,755	7,753,336
Total net assets, ending balance	$ 127,436,990	84,185,725	84,185,725	$ 127,436,990
Class FA
Number of Shares
Beginning balance (in shares)				3,266,260
Repurchase of common shares pursuant to share repurchase program (in shares)				(6,400)
Ending balance (in shares)	3,372,710			3,372,710
Total Net Assets
Par value, beginning balance				$ 3,266
Total net assets, beginning balance				87,061,758
Distributions				(2,041,416)
Repurchase of common shares pursuant to share repurchase program				(173,824)
Par value, ending balance	$ 3,373			3,373
Total net assets, ending balance	$ 91,718,198	83,076,581	83,076,581	$ 91,718,198
Class T
Number of Shares
Beginning balance (in shares)				31,452
Ending balance (in shares)	68,813			68,813
Total Net Assets
Par value, beginning balance				$ 31
Total net assets, beginning balance				834,576
Distributions				(25,498)
Par value, ending balance	$ 69			69
Total net assets, ending balance	$ 1,846,952	43,307	43,307	$ 1,846,952
Class D
Number of Shares
Beginning balance (in shares)				122,889
Ending balance (in shares)	205,333			205,333
Total Net Assets
Par value, beginning balance				$ 123
Total net assets, beginning balance				3,222,865
Distributions				(79,364)
Par value, ending balance	$ 205			205
Total net assets, ending balance	$ 5,433,648	171,018	171,018	$ 5,433,648
Class I
Number of Shares
Beginning balance (in shares)				249,526
Repurchase of common shares pursuant to share repurchase program (in shares)				(4,745)
Ending balance (in shares)	591,950			591,950
Total Net Assets
Par value, beginning balance				$ 250
Total net assets, beginning balance				6,624,004
Distributions				(251,414)
Repurchase of common shares pursuant to share repurchase program				(127,680)
Par value, ending balance	$ 592			592
Total net assets, ending balance	$ 15,928,594	$ 833,767	$ 833,767	$ 15,928,594
Public Offering and Private Placement
Number of Shares
Issuance of common shares through the Offerings (in shares)	445,802			845,274
Total Net Assets
Issuance of common shares through the Offerings	$ 446			$ 846
Public Offering
Number of Shares
Issuance of common shares through the Offerings (in shares)		43,070	3,301,330
Total Net Assets
Issuance of common shares through the Offerings		$ 43	$ 3,301
Public Offering | Class T
Number of Shares
Issuance of common shares through the Offerings (in shares)				37,140
Issuance of common shares through distribution reinvestment plan (in shares)				221
Total Net Assets
Issuance of common shares through distribution reinvestment plan				$ 5,900
Public Offering | Class D
Number of Shares
Issuance of common shares through the Offerings (in shares)				79,791
Issuance of common shares through distribution reinvestment plan (in shares)				2,653
Total Net Assets
Issuance of common shares through distribution reinvestment plan				$ 69,442
Public Offering | Class I
Number of Shares
Issuance of common shares through the Offerings (in shares)				344,389
Issuance of common shares through distribution reinvestment plan (in shares)				2,780
Total Net Assets
Issuance of common shares through distribution reinvestment plan				$ 73,860
Distribution Reinvestment Plan
Number of Shares
Issuance of common shares through distribution reinvestment plan (in shares)	6,449	591	591	10,290
Total Net Assets
Issuance of common shares through distribution reinvestment plan	$ 6	$ 1	$ 1	$ 10
Capital in Excess of Par Value
Total Net Assets
Issuance of common shares through the Offerings	11,913,332	1,083,569	82,536,811	22,485,986
Issuance of common shares through distribution reinvestment plan	170,571	$ 14,857	$ 14,857	271,771
Repurchase of common shares pursuant to share repurchase program	$ (308,027)			$ (308,027)
Share Repurchase Program
Number of Shares
Repurchase of common shares pursuant to share repurchase program (in shares)	(11,389)			(11,389)
Total Net Assets
Repurchase of common shares pursuant to share repurchase program	$ (11)			$ (11)

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Consolidated Statement of Cash Flows - USD ($)	3 Months Ended		5 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Operating Activities:
Net increase in net assets resulting from operations	$ 3,341,450	$ 1,932,896	$ 2,760,186	$ 4,752,835
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of investments			(74,374,339)	0
Net change in unrealized appreciation on investments			(1,452,873)	(2,451,000)
Amortization of deferred offering expenses			496,922	14,893
(Decrease) increase in net due to related parties			205,195	(920,212)
Increase in accounts payable and other accrued expenses			306,340	43,701
Increase in deferred offering expenses			(682,964)	(5,601)
Increase in prepaid expenses and other assets			(160,398)	(126,314)
Net cash provided by (used in) operating activities			(72,901,931)	1,308,302
Financing Activities:
Proceeds from issuance of common shares			80,140,112	22,486,832
Distributions paid, net of distributions reinvested			(997,348)	(2,218,737)
Net cash provided by financing activities			79,142,764	20,268,095
Net increase in cash			6,240,833	21,576,397
Cash, beginning of period				21,667,867
Cash, end of period	43,244,264	6,440,516	6,440,516	43,244,264
Supplemental disclosure of cash flow information and non-cash financing activities:
Distributions reinvested			14,858	271,781
Amounts incurred but not paid (including amounts due to related parties):
Distributions payable	463,898	317,225	317,225	463,898
Offering costs			5,175	55,968
Payable for shares repurchased	308,038	0	0	308,038
AccruedFinancingCosts	$ 14,450	$ 0	0	14,450
Non-cash contribution from an affiliate of the Sub-Manager			2,400,000	0
Non-cash purchase of investments			$ 2,400,000	$ 0

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Condensed Consolidated Statement of Cash Flows (Parenthetical) - USD ($)	3 Months Ended	5 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Cash Flows [Abstract]
Purchase price to acquire investments	$ 76,774,339			$ 76,774,339
Non-cash contribution from an affiliate of the Sub-Manager		$ 2,400,000	$ 0

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Consolidated Schedule of Investments - USD ($)	3 Months Ended	6 Months Ended	11 Months Ended	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2018
Cost	$ 76,774,339	$ 76,774,339	$ 76,774,339	$ 76,774,339
TOTAL INVESTMENTS–66.7%	76,774,339
Fair Value	84,951,000	84,951,000	82,500,000	82,500,000
OTHER ASSETS IN EXCESS OF LIABILITIES–33.3%	42,485,990	42,485,990	20,329,810	20,329,810
NET ASSETS–100.0%	127,436,990	127,436,990	102,829,810	102,829,810
Aggregate gross and net unrealized appreciation	9,400,000			6,600,000
Aggregate cost of securities	75,500,000	75,500,000	75,900,000	75,900,000
Polyform Products, Co.
Cost	15,600,000	15,600,000
Lawn Doctor
Cost	30,500,000	30,500,000
Total Senior Secured Notes
Cost	30,700,000	30,700,000	30,700,000	30,700,000
Fair Value	$ 30,700,000	$ 30,700,000	$ 30,700,000	30,700,000
Senior Secured Note – First Lien–12.3%
Interest rate	16.00%	16.00%	16.00%
Cost	$ 15,700,000	$ 15,700,000	$ 15,700,000	15,700,000
Fair Value	15,700,000	15,700,000	15,700,000	15,700,000
Senior Secured Note – First Lien–12.3% | Polyform Products, Co. | Hobby Goods and Supplies
No. Shares/ Principal Amount	15,700,000	15,700,000	15,700,000	15,700,000
Cost	15,700,000	15,700,000	15,700,000	15,700,000
Fair Value	15,700,000	$ 15,700,000	$ 15,700,000	15,700,000
Senior Secured Note – Second Lien–11.8%
Interest rate		16.00%	16.00%
Cost	15,000,000	$ 15,000,000	$ 15,000,000	15,000,000
Fair Value	15,000,000	15,000,000	15,000,000	15,000,000
Senior Secured Note – Second Lien–11.8% | Lawn Doctor | Commercial and Professional Services
No. Shares/ Principal Amount	15,000,000	15,000,000	15,000,000	15,000,000
Cost	15,000,000	15,000,000	15,000,000	15,000,000
Fair Value	15,000,000	15,000,000	15,000,000	15,000,000
Equity–42.6%
Cost	46,074,339	46,074,339	46,074,339	46,074,339
Fair Value	54,251,000	54,251,000	51,800,000	51,800,000
Equity–42.6% | Polyform Products, Co. | Hobby Goods and Supplies
No. Shares/ Principal Amount	10,820	10,820	10,820	10,820
Cost	15,598,788	15,598,788	15,598,788	15,598,788
Fair Value	15,600,000	15,600,000	15,600,000	15,600,000
Equity–42.6% | Lawn Doctor | Commercial and Professional Services
No. Shares/ Principal Amount	7,746	7,746	7,746	7,746
Cost	30,475,551	30,475,551	30,475,551	30,475,551
Fair Value	$ 38,651,000	$ 38,651,000	$ 36,200,000	$ 36,200,000

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Condensed Consolidated Schedule of Investments (Parenthetical)	Jun. 30, 2019	Dec. 31, 2018
Fair Value Percentage of Net Assets	66.70%	80.20%
OTHER ASSETS IN EXCESS OF LIABILITIES, Percentage	33.30%	19.80%
NET ASSETS, Percentage	100.00%	100.00%
Senior secured debt - first lien
Fair Value Percentage of Net Assets	12.30%	15.20%
Senior Secured Note – Second Lien–11.8%
Fair Value Percentage of Net Assets	11.80%	14.60%
Equity–42.6%
Fair Value Percentage of Net Assets	42.60%	50.40%

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Principal Business and Organization

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principal Business and Organization

Principal Business and Organization

CNL Strategic Capital, LLC (the “Company”) is a limited liability company that primarily seeks to acquire and grow durable, middle-market U.S. businesses. The Company is externally managed by CNL Strategic Capital Management, LLC (the “Manager”) and sub-managed by Levine Leichtman Strategic Capital, LLC (the “Sub-Manager”). The Manager is responsible for the overall management of the Company’s activities and the Sub-Manager is responsible for the day-to-day management of the Company’s assets. Each of the Manager and the Sub-Manager are registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The Company conducts and intends to continue its operations so that the Company and each of its subsidiaries do not fall within, or are excluded from the definition of an “investment company” under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

The Company intends to target businesses that are highly cash flow generative with annual revenues primarily between $25 million and $250 million and whose management teams seek an ownership stake in the company. The Company’s business strategy is to acquire controlling equity interests in combination with debt positions and in doing so, provide long-term capital appreciation and current income while protecting invested capital. In addition, and to a lesser extent, the Company may acquire other debt and minority equity positions. The Company may also acquire various types of debt in the secondary market including secured and senior unsecured debt and syndicated senior secured corporate loans of U.S. and, to a lesser extent, non-U.S. corporations, partnerships, limited liability companies and other business entities. The Company may also co-invest with other vehicles managed by the Sub-Manager or their affiliates to acquire minority equity positions and debt positions in a co-investment capacity. The Company expects that these positions will comprise a minority of its total assets.

On February 7, 2018, the Company commenced operations when it met the minimum offering requirement of $80 million in Class FA limited liability company interests (the “Class FA shares” or the “Founder shares”) offered through a private offering (the “2018 Private Offering”) and issued approximately 3.3 million shares of Class FA shares for aggregate gross proceeds of approximately $81.7 million. The 2018 Private Offering was closed in February 2018.

In October 2016, the Company confidentially submitted a registration statement on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) in connection with the proposed offering of shares of its limited liability company interests (the “Public Offering”). The Registration Statement for the Public Offering was declared effective by the SEC on March 7, 2018. Through its Public Offering, the Company is offering, in any combination, four classes of shares: Class A shares, Class T shares, Class D shares and Class I shares (collectively, the “Non-founder shares” and together with the Founder shares, the “Shares”).

In April 2019, the Company launched a private offering of up to $50 million of Class FA shares (the “Class FA Private Offering” and together with the 2018 Private Offering and the Public Offering, the “Offerings”) pursuant to Rule 506(c) under Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Class FA Private Offering, the Company entered into a placement agent agreement with CNL Securities Corp. (the “Placement Agent”), an affiliate of the Manager. The Class FA Private Offering is being offered on a best efforts basis, which means that the Placement Agent will use its best efforts but is not required to sell any specific amount of shares. There is no selling commission or placement agent fee for the sale of Class FA shares of the Class FA Private Offering. Subject to requirements under the Securities Act and the applicable state securities laws of any jurisdiction, the Company intends to conduct the Class FA Private Offering until the earlier of: (i) the date the Company has sold the maximum offering amount of the Class FA Private Offering or (ii) October 31, 2019. However, the Company reserves the right to extend the outside date of the Class FA Private Offering in its sole discretion but in no event later than December 31, 2019. The minimum offering requirement of the Class FA Private Offering was $2.0 million in Class FA shares. The Company met the minimum offering requirement in June 2019.

In conjunction with the launch of the Class FA Private Offering, the Company’s board of directors reclassified 4,000,000 authorized shares of Class T shares to Class FA shares, resulting in shares authorized of 7,400,000 Class FA shares, 94,660,000 Class A shares, 658,620,000 Class T shares, 94,660,000 Class D shares and 94,660,000 Class I shares.

See Note 7. “Capital Transactions” and Note 12. “Subsequent Events” for additional information related to the Offerings.

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained in the Financial Accounting Standards Board Accounting Standards Codification (the “Codification” or “ASC”), which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties. In the opinion of management, the condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and necessary for the fair presentation of financial results as of and for the periods presented.

Although the Company is organized and intends to conduct its business in a manner so that it is not required to register as an investment company under the Investment Company Act, its financial statements are prepared using the specialized accounting principles of ASC Topic 946 to utilize investment company accounting. The Company obtains funds through the issuance of equity interests to multiple unrelated investors, and provides such investors with investment management services. Further, the Company’s business strategy is to acquire interests in middle-market U.S. businesses to provide current income and long term capital appreciation, while protecting invested capital. Overall, the Company believes that the use of investment company accounting on a fair value basis is consistent with the management of its assets on a fair value basis, and makes the Company’s financial statements more useful to investors and other financial statement users in facilitating the evaluation of an investment in the Company as compared to other investment products in the marketplace.

Principles of Consolidation

Under ASC Topic 946, “Financial Services—Investment Companies” (“ASC Topic 946”) the Company is precluded from consolidating any entity other than an investment company or an operating company which provides substantially all of its services to benefit the Company. In accordance therewith, the Company has consolidated the results of its wholly owned subsidiaries which provide services to the Company in its condensed consolidated financial statements. However, the Company has not consolidated the results of its subsidiaries in which the Company holds debt and equity investments. All intercompany account balances and transactions have been eliminated in consolidation.

Cash

Cash consists of demand deposits at commercial banks. Cash is carried at cost plus accrued interest, which approximates fair value. The Company deposits its cash with highly-rated banking corporations and, at times, cash deposits may exceed the insured limits under applicable law.

Use of Estimates

Management makes estimates and assumptions related to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare the financial statement in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

Valuation of Investments

ASC Topic 820 clarifies that the fair value is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. ASC Topic 820 provides a consistent definition of fair value which focuses on exit price and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs.

In addition, ASC Topic 820 provides a framework for measuring fair value and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels of valuation hierarchy established by ASC Topic 820 are defined as follows:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets. An active market is defined as a market in which transactions for the asset or liability occur with sufficient pricing information on an ongoing basis. Publicly listed equity and debt securities and listed derivatives that are traded on major securities exchanges and publicly traded equity options are generally valued using Level 1 inputs. If a price for an asset cannot be determined based upon this established process, it shall then be valued as a Level 2 or Level 3 asset.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following: (i) quoted prices for similar assets in active markets; (ii) quoted prices for identical or similar assets in markets that are not active; (iii) inputs that are derived principally from or corroborated by observable market data by correlation or other means; and (iv) inputs other than quoted prices that are observable for the assets. Fixed income and derivative assets, where there is an observable secondary trading market and through which pricing inputs are available through pricing services or broker quotes, are generally valued using Level 2 inputs. If a price for an asset cannot be determined based upon this established process, it shall then be valued as a Level 3 asset.

Level 3 – Unobservable inputs for the asset or liability being valued. Unobservable inputs will be used to measure fair value to the extent that observable inputs are not available and such inputs will be based on the best information available in the circumstances, which under certain circumstances might include the Manager’s or the Sub-Manager’s own data. Level 3 inputs may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. Certain assets may be valued based upon estimated value of underlying collateral and include adjustments deemed necessary for estimates of costs to obtain control and liquidate available collateral. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence. Debt and equity investments in private companies or assets valued using the market or income approach are generally valued using Level 3 inputs.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls will be determined based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each asset.

The Company’s board of directors is responsible for determining in good faith the fair value of the Company’s investments in accordance with the valuation policy and procedures approved by the board of directors, based on, among other factors, the input of the Manager, the Sub-Manager, its audit committee, and the independent third-party valuation firm. The determination of the fair value of the Company’s assets requires judgment, especially with respect to assets for which market prices are not available. For most of the Company’s assets, market prices will not be available. Due to the inherent uncertainty of determining the fair value of assets that do not have a readily available market value, the fair value of the assets may differ significantly from the values that would have been used had a readily available market value existed for such assets, and the differences could be material. Because the calculation of the Company’s net asset value is based, in part, on the fair value of its assets, the Company’s calculation of net asset value is subjective and could be adversely affected if the determinations regarding the fair value of its assets were materially higher than the values that the Company ultimately realizes upon the disposal of such assets. Furthermore, through the valuation process, the Company’s board of directors may determine that the fair value of the Company’s assets differs materially from the values that were provided by the independent valuation firm.

The Company may also look to private merger and acquisition statistics, public trading multiples adjusted for illiquidity and other factors, valuations implied by third-party investments in the businesses or industry practices in determining fair value. The Company may also consider the size and scope of a business and its specific strengths and weaknesses, as well as any other factors it deems relevant in assessing the value.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

The Company will measure realized gains or losses as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in asset values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Income Recognition

Interest Income – Interest income is recorded on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest on loans and debt securities for accounting purposes if it has reason to doubt its ability to collect such interest.

The Company places loans on non-accrual status when principal and interest are past due 90 days or more or when there is a reasonable doubt that the Company will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are generally restored to accrual status when past due principal and interest amounts are paid and, in management’s judgment, are likely to remain current. To date, the Company has not experienced any past due payments on any of its loans.

Dividend Income – Dividend income is recorded on the record date for privately issued securities, but excludes any portion of distributions that are treated as a return of capital. Each distribution received from an equity investment is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments as dividend income unless there is sufficient current or accumulated earnings prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. To date, all distributions have been classified as dividend income.

Paid in Capital

The Company records the proceeds from the sale of its common shares on a net basis to (i) capital stock and (ii) paid in capital in excess of par value, excluding upfront selling commissions and dealer manager fees.

Organization and Offering Expenses

Organization expenses are expensed on the Company’s statements of operations as incurred. Offering expenses, which consist of amounts incurred for items such as legal, accounting, regulatory and printing work incurred related to the Offerings, are capitalized on the Company’s statements of assets and liabilities as deferred offering expenses and expensed to the Company’s statements of operations over the lesser of the offering period or 12 months; however, the end of the deferral period will not exceed 12 months from the date the offering expense is incurred by the Manager and the Sub-Manager.

Annual Distribution and Shareholder Servicing Fees

Under the Public Offering, the Company pays annual distribution and shareholder servicing fees with respect to its Class T and Class D shares, as described further below in Note 5. “Related Party Transactions.” The Company records the annual distribution and shareholder servicing fees, which accrue daily, in its statements of operations as they are incurred.

Deferred Financing Costs

Financing costs, including upfront fees, commitment fees and legal fees related to the Line of Credit (as defined and further described in Note 8. “Borrowings”) will be deferred and amortized over the life of the related financing instrument using the effective yield method. The amortization of deferred financing costs will be included in interest expense in the condensed statements of operations.

Allocation of Profit and Loss

Class-specific expenses, including base management fees, total return incentive fees, organization and offering expenses, annual distribution and shareholder servicing fees, expense support and certain transfer agent fees, are allocated to each share class of common shares in accordance with how such fees are attributable to the particular share classes, as determined by the Company’s board of directors, the Company’s governing agreements and, in certain cases, expenses which are specifically identifiable to a specific share class.

Income and expenses which are not class-specific are allocated monthly pro rata among the share classes based on shares outstanding as of the end of the month.

Earnings per Share and Net Investment Income per Share

Earnings per share and net investment income per share are calculated for each share class of common shares based upon the weighted average number of common shares outstanding during the reporting period.

Distributions

In March 2018, the Company’s board of directors began to declare cash distributions to shareholders based on weekly record dates and such distributions were paid on a monthly basis one month in arrears. Effective with distributions declared for January 2019, the Company’s board of directors began to declare distributions based on monthly record dates and such distributions are expected to be paid on a monthly basis one month in arrears. Distributions are made on all classes of the Company’s shares at the same time.

The Company has adopted a distribution reinvestment plan that provides for reinvestment of distributions on behalf of shareholders. Non-founder shareholders participating in the distribution reinvestment plan will have their cash distribution automatically reinvested in additional shares having the same class designation as the class of shares to which such distributions are attributable at a price per share equivalent to the then current public offering price, net of up-front selling commissions and dealer manager fees. Cash distributions paid on Founder shares participating in the distribution reinvestment plan are reinvested in additional shares of Class A shares.

U.S. Federal Income Taxes

The Company expects that it will operate so that it will qualify to be treated for U.S. federal income tax purposes as a partnership, and not as an association or a publicly traded partnership taxable as a corporation. Generally, the Company will not be taxable as a corporation if 90% or more of its gross income for each taxable year consists of “qualifying income” (generally, interest (other than interest generated from a financial business), dividends, real property rents, gain from the sale of assets that produce qualifying income and certain other items) and the Company is not required to register under the Investment Company Act (the “qualifying income exception”).

No provision has been made for income taxes since the individual shareholders are responsible for their proportionate share of the Company’s taxable income.

Under U.S. GAAP, the Company is subject to the provisions of ASC 740,“Income Taxes.” This standard defines the threshold for recognizing the benefits of tax-return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50% likely to be realized.

The Company has analyzed its tax positions taken on Federal income tax returns for all open tax years (tax years ended December 31, 2018 and 2017), and has concluded that no provision for income tax is required in the Company’s financial statements. The Company follows the authoritative guidance on accounting for uncertainty in income taxes and concluded it has no material uncertain tax positions to be recognized at this time.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. During the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to December 31, 2018, the Company did not incur any interest or penalties.

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (the “Act”) which reduced U.S. corporate income tax rates, created a territorial tax system, allowed for immediate expensing of certain qualified property, provided other tax related incentives and included various base-broadening provisions. The Act did not have a material impact on the Company.

Reclassifications

Certain prior period amounts in the condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported net assets.

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Investments

6 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

In June 2019, the Company, through its indirect wholly-owned subsidiary, Roundtable Acquisition, LLC (the “Buyer”), entered into a Stock Contribution and Purchase Agreement (the “Purchase Agreement”) with Michael Auriemma, an individual (“Seller”), to acquire a controlling interest in Auriemma U.S. Roundtables (“Roundtables”), a subscription-based information services and data analytics company for the consumer finance industry. The Company acquired an approximately 81% interest in Roundtables in August 2019, as described further in Note 12. “Subsequent Events”.

In February 2018, the Company acquired a controlling equity interest in Lawn Doctor, Inc. (“Lawn Doctor”) from an affiliate of the Sub-Manager, through an investment consisting of common equity and a debt investment in the form of a second lien secured note to Lawn Doctor. As of June 30, 2019, the Company owned approximately 62.5% of the outstanding equity in Lawn Doctor on an undiluted basis. The cost basis of the Company’s investments in Lawn Doctor was approximately $30.5 million of a common equity investment and $15.0 million of a debt investment as of June 30, 2019.

In February 2018, the Company acquired a controlling equity interest in Polyform Holdings, Inc. (“Polyform”) from an affiliate of the Sub-Manager, through an investment consisting of common equity and a debt investment in the form of a first lien secured note to Polyform. As of June 30, 2019, the Company owned approximately 87.1% of the outstanding equity in Polyform on an undiluted basis. The cost basis of the Company’s investments in Polyform was approximately $15.6 million of a common equity investment and $15.7 million of a debt investment as of June 30, 2019.

The debt investments in the form of a second lien secured note to Lawn Doctor and in the form of a first lien secured note to Polyform, as described above, accrue interest at a per annum rate of 16.0%. Each note will mature in August 2023. The note purchase agreements contain customary covenants and events of default. As of June 30, 2019, Lawn Doctor and Polyform were in compliance with the Company’s debt covenants.

As of June 30, 2019 and December 31, 2018, the Company’s investment portfolio is summarized as follows:

	As of June 30, 2019
Asset Category	Cost		Fair Value		Fair Value Percentage of Investment Portfolio		Fair Value Percentage of Net Assets
Senior debt
Senior secured debt - first lien	$	15,700,000	$	15,700,000	18.5	%	12.3	%
Senior secured debt - second lien	15,000,000		15,000,000		17.6		11.8
Total senior debt	30,700,000		30,700,000		36.1		24.1
Equity	46,074,339		54,251,000		63.9		42.6
Total investments	$	76,774,339	$	84,951,000	100.0	%	66.7	%

	As of December 31, 2018
Asset Category	Cost		Fair Value		Fair Value Percentage of Investment Portfolio		Fair Value Percentage of Net Assets
Senior debt
Senior secured debt - first lien	$	15,700,000	$	15,700,000	19.0	%	15.2	%
Senior secured debt - second lien	15,000,000		15,000,000		18.2		14.6
Total senior debt	30,700,000		30,700,000		37.2		29.8
Equity	46,074,339		51,800,000		62.8		50.4
Total investments	$	76,774,339	$	82,500,000	100.0	%	80.2	%

As of June 30, 2019 and December 31, 2018, none of the Company’s debt investments were on non-accrual status.

The industry and geographic dispersion of the Company’s investment portfolio as a percentage of total fair value of the Company’s investments as of June 30, 2019 and December 31, 2018 were as follows:

Industry	June 30, 2019		December 31, 2018
Hobby Goods and Supplies	36.8	%	37.9	%
Commercial and Professional Services	63.2		62.1
Total	100.0	%	100.0	%

Geographic Dispersion(1)	June 30, 2019		December 31, 2018
United States	100.0	%	100.0	%
Total	100.0	%	100.0	%

FOOTNOTE:

⁽¹⁾  The geographic dispersion is determined by the portfolio company’s country of domicile or the jurisdiction of the security’s issuer.

All investment positions held at June 30, 2019 and December 31, 2018 were denominated in U.S. dollars.

Summarized Operating Data

The following tables present unaudited summarized operating data for Lawn Doctor and Polyform (the “initial businesses”) for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) through June 30, 2018, and summarized balance sheet data as of June 30, 2019 (unaudited) and December 31, 2018:

Lawn Doctor

Summarized Operating Data (Unaudited)

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			For the Period from February 7, 2018 (1) to June 30, 2018
Revenues	$	6,973,211		$	5,020,688		$	13,424,712		$	7,951,778
Expenses	(6,585,500		)	(4,258,181		)	(13,276,235		)	(6,911,347		)
Income before taxes	387,711			762,507			148,477			1,040,431
Income tax expense	(103,053		)	(57,200		)	(39,465		)	(46,267		)
Consolidated net income	284,658			$	705,307		109,012			994,164
Net loss attributable to non-controlling interest	28,168			$	22,438		64,803			22,438
Net income attributable to Lawn Doctor	$	312,826		$	727,745		$	173,815		$	1,016,602

Summarized Balance Sheet Data

	As of June 30, 2019 (Unaudited)			As of December 31, 2018
Current assets	$	6,991,954		$	6,347,092
Non-current assets	$	94,900,906		$	94,024,715
Current liabilities	$	4,653,642		$	4,342,064
Non-current liabilities	$	52,301,370		$	50,312,347
Non-controlling interest	$	(11,063	)	$	(40,952	)
Stockholders’ equity	$	44,948,911		$	45,758,348

Polyform

Summarized Operating Data (Unaudited)

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			For the Period from February 7, 2018 (1) to June 30, 2018
Revenues	$	3,815,425		$	4,064,855		$	8,221,289		$	6,482,448
Expenses	(4,094,317		)	(4,315,901		)	(8,491,355		)	(7,310,524		)
Loss before income taxes	(278,892		)	(251,046		)	(270,066		)	(828,076		)
Income tax benefit	79,000			72,000			76,000			146,000
Net loss	$	(199,892	)	$	(179,046	)	$	(194,066	)	$	(682,076	)

Summarized Balance Sheet Data

	As of June 30, 2019 (Unaudited)		As of December 31, 2018
Current assets	$	5,807,621	$	5,481,783
Non-current assets	$	32,179,761	$	29,977,677
Current liabilities	$	4,105,170	$	963,823
Non-current liabilities	$	18,454,623	$	18,530,624
Stockholders’ equity	$	15,427,589	$	15,965,013

FOOTNOTE:

⁽¹⁾ February 7, 2018 is the date the Company acquired the initial businesses.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s investments were categorized in the fair value hierarchy described in Note 2. “Significant Accounting Policies,” as follows as of June 30, 2019 and December 31, 2018:

	As of June 30, 2019								As of December 31, 2018
Description	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Senior debt	$	—	$	—	$	30,700,000	$	30,700,000	$	—	$	—	$	30,700,000	$	30,700,000
Equity	—		—		54,251,000		54,251,000		—		—		51,800,000		51,800,000
Total investments	$	—	$	—	$	84,951,000	$	84,951,000	$	—	$	—	$	82,500,000	$	82,500,000

The ranges of unobservable inputs used in the fair value measurement of the Company’s Level 3 investments as of June 30, 2019 and December 31, 2018 were as follows:

June 30, 2019
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	$	30,700,000	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.3% - 13.8% (11.3%) 7.7x – 12.1x (10.8x) 8.0x – 12.0x (10.9x)	Decrease Increase Increase
Equity	54,251,000		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.3% - 13.8% (11.3%) 7.7x – 12.1x (10.8x) 8.0x – 12.0x (10.9x)	Decrease Increase Increase
Total	$	84,951,000

December 31, 2018
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	$	30,700,000	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.5% - 13.5% (11.4%) 7.9x – 12.2x (10.9x) 8.0x – 12.0x (10.8x)	Decrease Increase Increase
Equity	51,800,000		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.5% - 13.5% (11.4%) 7.9x – 12.2x (10.9x) 8.0x – 12.0x (10.8x)	Decrease Increase Increase
Total	$	82,500,000

FOOTNOTES:

⁽¹⁾  Discount rates are relative to the enterprise value of the portfolio companies and are not the market yields on the associated debt investments. Unobservable inputs were weighted by the relative fair value of the investments.

⁽²⁾  This column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

The preceding tables include the significant unobservable inputs as they relate to the Company’s determination of fair values for its investments categorized within Level 3 as of June 30, 2019 and December 31, 2018. In addition to the techniques and inputs noted in the table above, according to the Company’s valuation policy, the Company may also use other valuation techniques and methodologies when determining the fair value estimates for the Company’s investments. Any significant increases or decreases in the unobservable inputs would result in significant increases or decreases in the fair value of the Company’s investments.

Investments that do not have a readily available market value are valued utilizing a market approach, an income approach (i.e. discounted cash flow approach), a transaction approach, or a combination of such approaches, as appropriate. The market approach uses prices, including third party indicative broker quotes, and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The transaction approach uses pricing indications derived from recent precedent merger and acquisition transactions involving comparable target companies. The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) that are discounted based on a required or expected discount rate to derive a present value amount range. The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors the Company may take into account to determine the fair value of its investments include, as relevant: available current market data, including an assessment of the credit quality of the security’s issuer, relevant and applicable market trading and transaction comparables, applicable market yields and multiples, illiquidity discounts, security covenants, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, data derived from merger and acquisition activities for comparable companies, and enterprise values, among other factors.

The following tables provide reconciliation of investments for which Level 3 inputs were used in determining fair value for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) through December 31, 2018:

	Six Months Ended June 30, 2019
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2019	$	30,700,000	$	51,800,000	$	82,500,000
Net change in unrealized appreciation (1)	—		2,451,000		2,451,000
Fair value balance as of June 30, 2019	$	30,700,000	$	54,251,000	$	84,951,000
Change in net unrealized appreciation in investments held as of June 30, 2019 (1)	$	—	$	2,451,000	$	2,451,000

	Period from February 7, 2018 (Commencement of Operations) to December 31, 2018
	Senior Debt		Equity		Total
Fair value balance as of February 7, 2018	$	—	$	—	$	—
Additions	30,700,000		46,074,339		76,774,339
Net change in unrealized appreciation (1)	—		5,725,661		5,725,661
Fair value balance as of December 31, 2018	$	30,700,000	$	51,800,000	$	82,500,000
Change in net unrealized appreciation in investments held as of December 31, 2018 (1)	$	—	$	5,725,661	$	5,725,661

FOOTNOTE:

⁽¹⁾   Included in net change in unrealized appreciation on investments in the consolidated statements of operations.

All realized and unrealized gains and losses are included in earnings and are reported as separate line items within the Company’s statements of operations.

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Related Party Transactions

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

On February 7, 2018, the Company commenced operations when it met the minimum offering requirement of $80.0 million in Class FA shares under its 2018 Private Offering and issued approximately 3.3 million shares of Class FA shares for aggregate gross proceeds of approximately $81.7 million. The $81.7 million in gross proceeds received included a cash capital contribution of $2.4 million from the Manager in exchange for 96,000 Class FA shares and a cash capital contribution of $9.5 million from CNL Strategic Capital Investment, LLC, which is indirectly controlled by James M. Seneff, Jr., the chairman of the Company, in exchange for 380,000 Class FA shares. The $81.7 million also included 96,000 Class FA shares received in exchange for $2.4 million of non-cash consideration in the form of equity interests in Lawn Doctor received from an affiliate of the Sub-Manager pursuant to an exchange agreement. The $81.7 million in gross proceeds also included a cash capital contribution of approximately $0.4 million in exchange for 15,000 Class FA shares, from other individuals affiliated with the Manager.

The Manager and Sub-Manager, along with certain affiliates of the Manager or Sub-Manager, will receive fees and compensation in connection with the Company’s Public Offering as well as the acquisition, management and sale of the assets of the Company, as follows:

Placement Agent/Dealer Manager

Commissions — Under the Class FA Private Offering, there is no selling commission for the sale of Class FA shares. Under the Public Offering, the Company pays CNL Securities Corp. (the “Managing Dealer”), an affiliate of the Manager, a selling commission up to 6.00% of the sale price for each Class A share and 3.00% of the sale price for each Class T share sold in the Public Offering (excluding sales pursuant to the Company’s distribution reinvestment plan). The Managing Dealer may reallow all or a portion of the selling commissions to participating broker-dealers.

Placement Agent/Dealer Manager Fee — Under the Class FA Private Offering, there is no placement agent fee for the sale of Class FA shares. Under the Public Offering, the Company pays the Managing Dealer a dealer manager fee of 2.50% of the price of each Class A share and 1.75% of the price of each Class T share sold in the Public Offering (excluding sales pursuant to the Company’s distribution reinvestment plan). The Managing Dealer may reallow all or a portion of such dealer manager fees to participating broker-dealers.

Annual Distribution and Shareholder Servicing Fee — Under the Public Offering, the Company pays the Managing Dealer an annual distribution and shareholder servicing fee, subject to certain limits, with respect to its Class T and Class D shares (excluding Class T shares and Class D shares sold through the distribution reinvestment plan and those received as share distributions) in an annual amount equal to 1.00% and 0.50%, respectively, of its current net asset value per share, as disclosed in its periodic or current reports, payable on a monthly basis. The annual distribution and shareholder servicing fee accrues daily and is paid monthly in arrears. The Managing Dealer may reallow all or a portion of the annual distribution and shareholder servicing fee to the broker-dealer who sold the Class T or Class D shares or, if applicable, to a servicing broker-dealer of the Class T or Class D shares or a fund supermarket platform featuring Class D shares, so long as the broker-dealer or financial intermediary has entered into a contractual agreement with the Managing Dealer that provides for such reallowance. The annual distribution and shareholder servicing fees is an ongoing fee that is allocated among all Class T and Class D shares, respectively, and is not paid at the time of purchase.

Manager and/or Sub-Manager

Organization and Offering Costs — Under the Offerings, the Company reimburses the Manager and its Sub-Manager, along with their respective affiliates, for the organization and offering costs (other than selling commissions and dealer manager fees) they have incurred on the Company’s behalf only to the extent that such expenses do not exceed (A) 1.0% of the cumulative gross proceeds from the 2018 Private Offering and Class FA Private Offering, and (B) 1.5% of the cumulative gross proceeds from the Public Offering. During the six months ended June 30, 2019, the Company incurred an obligation to reimburse the Manager and Sub-Manager for approximately $0.3 million in organization and offering costs based on actual amounts raised through the Offerings, of which $0.1 million was payable as of June 30, 2019. The Manager and the Sub-Manager have incurred additional organization and offering costs of approximately $5.4 million and $0.1 million on behalf of the Company in connection with the Public Offering (exceeding the 1.5% limitation) and the Class FA Private Offering (exceeding the 1.0% limitation), respectively, as of June 30, 2019. These costs will be recognized by the Company in future periods as the Company receives future offering proceeds from its Public Offering and Class FA Private Offering to the extent such costs are within the 1.5% and 1.0% limitations, respectively.

Base Management Fee to Manager and Sub-Manager — The Company pays each of the Manager and the Sub-Manager 50% of the total base management fee for their services under the Management Agreement and the Sub-Management Agreement, subject to any reduction or deferral of any such fees pursuant to the terms of the Expense Support and Conditional Reimbursement Agreement described below. The Company incurred base management fees for the quarter ended June 30, 2019 and 2018 of approximately $0.3 million and $0.2 million, respectively. The Company incurred base management fees of approximately $0.5 million and $0.3 million during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018, respectively.

The base management fee is calculated for each share class at an annual rate of (i) for the Non-founder shares of a particular class, 2% of the product of (x) the Company’s average gross assets and (y) the ratio of Non-founder share Average Adjusted Capital (as defined below), for a particular class to total Average Adjusted Capital and (ii) for the Founder shares, 1% of the product of (x) the Company’s average gross assets and (y) the ratio of outstanding Founder share Average Adjusted Capital to total Average Adjusted Capital, in each case excluding cash, and will be payable monthly in arrears. The management fee for a certain month is calculated based on the average value of the Company’s gross assets at the end of that month and the immediately preceding calendar month. The determination of gross assets reflects changes in the fair market value of the Company’s assets, which does not necessarily equal their notional value, reflecting both realized and unrealized capital appreciation or depreciation. Average Adjusted Capital of an applicable class is computed on the daily Adjusted Capital for such class for the actual number of days in such applicable month. The base management fee may be reduced or deferred by the Manager and the Sub-Manager under the Management Agreement and the Expense Support and Conditional Reimbursement Agreement described below. For purposes of this calculation, “Average Adjusted Capital” for an applicable class is computed on the daily Adjusted Capital for such class for the actual number of days in such applicable quarter. “Adjusted Capital” is defined as cumulative proceeds generated from sales of our shares of a particular share class (including proceeds from the sale of shares pursuant to the distribution reinvestment plan, if any), net of sales load (upfront selling commissions and dealer manager fees), if any, reduced for the full amounts paid for share repurchases pursuant to any share repurchase program, if any, for such class.

Total Return Incentive Fee on Income to the Manager and Sub-Manager — The Company also pays each of the Manager and the Sub-Manager 50% of the total return incentive fee for their services under the Management Agreement and the Sub-Management Agreement. The Company recorded total return incentive fees of approximately $0.5 million for the quarter and six months ended June 30, 2019 and approximately $0.3 million for the quarter ended June 30, 2018 and for the period from February 7, 2018 (commencement of operations) to December 31, 2018.

The total return incentive fee is based on the Total Return to Shareholders (as defined below) for each share class in any calendar year, payable annually in arrears. The Company accrues (but does not pay) the total return incentive fee on a quarterly basis, to the extent that it is earned, and performs a final reconciliation and makes required payments at completion of each calendar year. The total return incentive fee may be reduced or deferred by the Manager and the Sub-Manager under the Management Agreement and the Expense Support and Conditional Reimbursement Agreement described below. For purposes of this calculation, “Total Return to Shareholders” for any calendar quarter is calculated for each share class as the change in the net asset value for such share class plus total distributions for such share class calculated based on the Average Adjusted Capital for such class as of such calendar quarter end. The terms “Total Return to Non-founder Shareholders” and “Total Return to Founder Shareholders” means the Total Return to Shareholders specifically attributable to each particular share class of Non-founder shares or Founder shares, as applicable.

The total return incentive fee for each share class is calculated as follows:

• No total return incentive fee will be payable in any calendar year in which the annual Total Return to Shareholders of a particular share class does not exceed 7% (the “Annual Preferred Return”).

• As it relates to the Non-founder shares, all of the Total Return to Shareholders with respect to each particular share class of Non-founder shares, if any, that exceeds the annual preferred return, but is less than or equal to 8.75%, or the “Non-founder breakpoint,” in any calendar year, will be payable to the Manager (“Non-founder Catch Up”). The Non-Founder Catch Up is intended to provide an incentive fee of 20% of the Total Return to Non-founder Shareholders of a particular share class once the Total Return to Non-founder Shareholders of a particular class exceeds 8.75% in any calendar year.

• As it relates to Founder shares, all of the Total Return to Founder Shareholders, if any, that exceeds the annual preferred return, but is less than or equal to 7.777%, or the “founder breakpoint,” in any calendar year, will be payable to the Manager (“Founder Catch Up”). The Founder Catch Up is intended to provide an incentive fee of 10% of the Total Return to Founder Shareholders once the Total Return to Founder Shareholders exceeds 7.777% in any calendar year.

• For any quarter in which the Total Return to Shareholders of a particular share class exceeds the relevant breakpoint, the total return incentive fee of a particular share class shall equal, for Non-founder shares, 20% of the Total Return to Non-founder Shareholders of a particular class, and for Founder shares, 10% of the Total Return to Founder Shareholders, in each case because the annual preferred and relevant catch ups will have been achieved.

• For purposes of calculating the Total Return to Shareholders, the change in the Company’s net asset value is subject to a High Water Mark. The “High Water Mark” is equal to the highest year-end net asset value, for each share class of the Company since inception, adjusted for any special distributions resulting from the sale of the Company’s assets, provided such adjustment is approved by the Company’s board of directors. If, as of each calendar year end, the Company’s net asset value for the applicable share class is (A) above the High Water Mark, then, for such calendar year, the Total Return to Shareholders calculation will include the increase in the Company’s net asset value for such share class in excess of the High Water Mark, and (B) if the Company’s net asset value for the applicable share class is below the High Water Mark, for such calendar year, (i) any increase in the Company’s per share net asset value will be disregarded in the calculation of Total Return to Shareholders for such share class while (ii) any decrease in the Company’s per share net asset value will be included the calculation of Total Return to Shareholders for such share class. For the year ended December 31, 2018, the High Water Mark was $24.75 for all share classes. For the year ending December 31, 2019, the High Water Marks will be $26.65 for Class FA shares, $26.44 for Class A shares, $26.54 for Class T shares, $26.23 for Class D shares and $26.55 for Class I shares.

For purposes of this calculation, “Average Adjusted Capital” for an applicable class is computed on the daily Adjusted Capital for such class for the actual number of days in such applicable quarter. The annual preferred return of 7% and the relevant breakpoints of 8.75% and 7.777%, respectively, are also adjusted for the actual number of days in each calendar year, measured as of each calendar quarter end.

Reimbursement to Manager and Sub-Manager for Operating Expenses — The Company reimburses the Manager and the Sub-Manager and their respective affiliates for certain operating costs and expenses of third parties incurred in connection with their provision of services to the Company, including fees, costs, expenses, liabilities and obligations relating to the Company’s activities, acquisitions, dispositions, financings and business, subject to the terms of the Company’s limited liability company agreement, the Management Agreement, the Sub-Management Agreement and the Expense Support and Conditional Reimbursement Agreement (as defined below). The Company does not reimburse the Manager and Sub-Manager for administrative services performed by the Manager or Sub-Manager for the benefit of the Company.

Expense Support and Conditional Reimbursement Agreement — The Company entered into an expense support and conditional reimbursement agreement with the Manager and the Sub-Manager (the “Expense Support and Conditional Reimbursement Agreement”), which became effective on February 7, 2018, pursuant to which each of the Manager and the Sub-Manager agrees to reduce the payment of base management fees, total return incentive fees and the reimbursements of reimbursable expenses due to the Manager and the Sub-Manager under the Management Agreement and the Sub-Management Agreement, as applicable, to the extent that the Company’s annual regular cash distributions exceed its annual net income (with certain adjustments). The amount of such expense support is equal to the annual (calendar year) excess, if any, of (a) the distributions (as defined in the Expense Support and Conditional Reimbursement Agreement) declared and paid (net of the Company’s distribution reinvestment plan) to shareholders minus (b) the available operating funds, as defined in the Expense Support and Conditional Reimbursement Agreement (the “Expense Support”). The Company recorded expense support due from the Manager and Sub-Manager of approximately $0.6 million and $0.8 million during the quarter and six months ended June 30, 2019, respectively, and approximately $0.1 million and $0.2 million during the quarter ended June 30, 2018 and the period from February 7, 2018 (commencement of operations) to December 31, 2018, respectively. Expense support is paid by the Manager and Sub-Manager annually in arrears.

The Expense Support amount is borne equally by the Manager and the Sub-Manager and is calculated as of the last business day of the calendar year. Beginning on February 7, 2018 and continuing until the Expense Support and Conditional Reimbursement Agreement is terminated, the Manager and Sub-Manager shall equally conditionally reduce the payment of fees and reimbursements of reimbursable expenses in an amount equal to the conditional waiver amount (as defined in and subject to limitations described in the Expense Support and Conditional Reimbursement Agreement). The term of the Expense Support and Conditional Reimbursement Agreement has the same initial term and renewal terms as the Management Agreement or the Sub-Management Agreement, as applicable, to the Manager or the Sub-Manager.

If, on the last business day of the calendar year, the annual (calendar year) year-to-date available operating funds exceeds the sum of the annual (calendar year) year-to-date distributions paid per share class (the “Excess Operating Funds”), the Company uses such Excess Operating Funds to pay the Manager and the Sub-Manager all or a portion of the outstanding unreimbursed Expense Support amounts for each share class, as applicable, subject to certain conditions (the “Conditional Reimbursements”) as described further in the Expense Support and Conditional Reimbursement Agreement. The Company’s obligation to make Conditional Reimbursements shall automatically terminate and be of no further effect three years following the date which the Expense Support amount was provided and to which such Conditional Reimbursement relates, as described further in the Expense Support and Conditional Reimbursement Agreement.

As of June 30, 2019, the amount of expense support related to the period from February 7, 2018 (commencement of operations) to December 31, 2018 collected from the Manager and Sub-Manager was approximately $0.4 million. The Company’s obligation to reimburse the Manager and Sub-Manager for expense support collected for the period from February 7, 2018 (commencement of operations) to December 31, 2018 will expire on December 31, 2021. As of June 30, 2019, management believes that reimbursement payments by the Company to the Manager and Sub-Manager are not probable under the terms of the Expense Support and Conditional Reimbursement Agreement.

Distributions

Individuals and entities affiliated with the Manager and Sub-Manager received distributions from the Company of approximately $0.2 million during each of the quarter ended June 30, 2019 and 2018, and approximately $0.4 million and $0.2 million, during the six months ended June 30, 2019 and during the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively.

Related party fees and expenses incurred for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) through June 30, 2018 are summarized below:

Related Party	Source Agreement & Description	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Managing Dealer	Managing Dealer Agreement: Commissions	$	133,905		$	4,350		$	419,582		$	4,350
	Dealer Manager Fees	73,569			2,038			212,203			2,038
	Annual distribution and shareholder servicing fees	9,048			52			15,817			52
Manager and Sub-Manager	Management Agreement and Sub-Management Agreement: Organization and offering reimbursement (1)(2)	141,445			18,107			312,712			725,153
	Base management fees (1)	265,128			194,974			506,766			283,536
	Total return incentive fees (1)	496,660			308,735			496,660			308,735
Manager and Sub-Manager	Expense Support and Conditional Reimbursement Agreement: Expense support	(610,447		)	(144,146		)	(826,520		)	(187,358		)
Manager	Administrative Services Agreement: Reimbursement of third-party operating expenses (1)	43,086			23,657			54,950			43,551

FOOTNOTE:

⁽¹⁾  Expenses subject to Expense Support.

⁽²⁾  Organization reimbursements are expensed on the Company’s statements of operations as incurred. Offering reimbursements are capitalized on the Company’s statements of assets and liabilities as deferred offering expenses and expensed to the Company’s statements of operations over the lesser of the offering period or 12 months.

The following table presents amounts due from (to) related parties as of June 30, 2019 and December 31, 2018:

	June 30, 2019			December 31, 2018
Due from related parties:
Expense Support	$	826,520		$	389,774
Total due from related parties	826,520			389,774
Due to related parties:
Organization and offering expenses	(55,968		)	(66,894		)
Base management fees	(89,595		)	(78,967		)
Total return incentive fee	(496,660		)	(1,015,228		)
Reimbursement of third-party operating expenses	(43,086		)	(9,101		)
Annual distribution and shareholder servicing fees	(3,281		)	(1,866		)
Total due to related parties	(688,590		)	(1,172,056		)
Net due from (to) related parties	$	137,930		$	(782,282	)

Other Related Party Transactions

Prior to the Company’s acquisition of Lawn Doctor and Polyform as described in Note 3. “Investments,” Lawn Doctor and Polyform were majority owned by an affiliate of the Sub-Manager.

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Distributions

6 Months Ended

Jun. 30, 2019

Distributions Made to Members or Limited Partners [Abstract]

Distributions

Distributions

The following table reflects the total distributions declared during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018:

	Six Months Ended June 30, 2019						Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Distribution Period	Distributions Declared (1)		Distributions Reinvested (2)		Cash Distributions Net of Distributions Reinvested		Distributions Declared (3)		Distributions Reinvested (4)		Cash Distributions Net of Distributions Reinvested
First Quarter(5)	$	1,235,971	$	121,011	$	1,114,960	$	302,841	$	2,299	$	300,542
Second Quarter(6)	1,360,259		192,895		1,167,364		1,026,590		19,767		1,006,823
	$	2,596,230	$	313,906	$	2,282,324	$	1,329,431	$	22,066	$	1,307,365

FOOTNOTES:

⁽¹⁾ During 2019, the Company’s board of directors declared distributions per share on a monthly basis. See Note 11. “Financial Highlights” for distributions declared by share class. Distributions declared per share for each share class were as follows:    

Record Date Period	Class FA		Class A		Class T		Class D		Class I
January 1, 2019 - June 30, 2019 (6 record dates)	$	0.104167	$	0.104167	$	0.083333	$	0.093750	$	0.104167

⁽²⁾ Includes distributions reinvested in July 2019 of $68,914 related to distributions declared based on record dates in June 2019 and excludes distributions reinvested in January 2019 of $26,789 related to distributions declared based on record dates in December 2018.

⁽³⁾  During 2018, the Company’s board of directors declared distributions per share on a weekly basis. See Note 11. “Financial Highlights” for distributions declared by share class. Distributions declared per share for each share class were as follows:

Record Date Period	Class FA		Class A		Class T		Class D		Class I
March 7, 2018	$	0.020604	$	0.020604	$	0.016484	$	0.018544	$	0.020604
March 13, 2018 - June 26, 2018 (16 record dates)	0.024038		0.024038		0.019231		0.021635		0.024038

⁽⁴⁾ Includes distributions reinvested in July 2018 of $7,208 related to distributions declared based on record dates in June 2018.

⁽⁵⁾ Distributions declared for the record dates in March 2019 and 2018 were paid in April 2019 and 2018, respectively.

⁽⁶⁾ Distributions declared for the record dates in June 2019 and 2018 were paid in July 2019 and 2018, respectively.

The sources of declared distributions on a GAAP basis were as follows:

	Six Months Ended June 30, 2019				Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
	Amount		% of Cash Distributions Declared		Amount		% of Cash Distributions Declared
Net investment income(1)	$	2,301,835	88.7	%	$	1,307,313	98.3	%
Distributions in excess of net investment income(2)	294,395		11.3	%	22,118		1.7	%
Total distributions declared	$	2,596,230	100.0	%	$	1,329,431	100.0	%

FOOTNOTES:

⁽¹⁾ Net investment income includes expense support from the Manager and Sub-Manager of $826,520 and $187,358 for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. See Note 5. “Related Party Transactions” for additional information.

⁽²⁾ Consists of distributions made from offering proceeds for the periods presented.

In June 2019, the Company’s board of directors declared a monthly cash distribution on the outstanding shares of all classes of common shares of record on July 30, 2019 of $0.104167 per share for Class FA shares, $0.104167 per share for Class A shares, $0.083333 per share for Class T shares, $0.093750 per share for Class D shares and $0.104167 per share for Class I shares.

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Capital Transactions

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Capital Transactions

Capital Transactions

2018 Private Offering

On February 7, 2018, the Company commenced operations when it met the minimum offering requirement of $80.0 million in Class FA shares under its 2018 Private Offering and issued approximately 3.3 million shares of Class FA shares for aggregate gross proceeds of approximately $81.7 million. The Company did not incur any selling commissions or placement agent fees from the sale of the approximately 3.3 million Class FA shares sold under the terms of the 2018 Private Offering. See Note 5. “Related Party Transactions” for additional information on Class FA shares issued to the Manager, Sub-Manager and their affiliates.

Public Offering

The Registration Statement became effective on March 7, 2018, and the Company began offering up to $1,000,000,000 of shares, on a best efforts basis, which means that CNL Securities Corp., as the Managing Dealer of the Public Offering, uses its best effort but is not required to sell any specific amount of shares. The Company is offering, in any combination, four classes of shares in the Public Offering: Class A shares, Class T shares, Class D shares and Class I shares. The initial minimum permitted purchase amount is $5,000 in shares. There are differing selling fees and commissions for each share class. The Company also pays annual distribution and shareholder servicing fees, subject to certain limits, on the Class T and Class D shares sold in the Public Offering (excluding sales pursuant to the Company’s distribution reinvestment plan). The Public Offering price, selling commissions and dealer manager fees per share class are determined monthly as approved by the Company’s board of directors. As of June 30, 2019, the Public Offering price was $29.23 per Class A share, $28.20 per Class T share, $26.45 per Class D share and $26.91 per Class I share. See Note 12. “Subsequent Events” for information on changes to the Public Offering price, selling commissions and dealer manager fees by share class.

The Company is also offering, in any combination, up to $100,000,000 of Class A shares, Class T shares, Class D shares and Class I shares to be issued pursuant to its distribution reinvestment plan. See Note 12. “Subsequent Events” for additional information related to the Public Offering.

Class FA Private Offering

In April 2019, the Company began offering up to $50 million of Class FA shares under the Class FA Private Offering, on a best efforts basis, which means that CNL Securities Corp., as the Placement Agent of the Private Offering, uses its best effort but is not required to sell any specific amount of shares. There is no selling commission or placement agent fee for the sale of Class FA shares under the Class FA Private Offering. The Class FA Private Offering will terminate on October 31, 2019, unless extended by the Company’s board of directors. As of June 30, 2019, the purchase price for each Class FA share was $27.16.

The following table summarizes the total shares issued and proceeds received by share class in connection with the Offerings, excluding shares repurchased through the Share Repurchase Program described further below, for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) to June 30, 2018:

	Six Months Ended June 30, 2019
	Proceeds from Class FA Private Offering and Public Offering								Distributions Reinvested(1)			Total
Share Class	Shares Issued	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees (2)(3)			Net Proceeds to Company		Shares	Proceeds to Company		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	112,850	$	3,065,000	$	—		$	3,065,000	—	$	—	112,850	$	3,065,000	$	27.16
Class A	271,104	7,763,365		(582,606		)	7,180,759		4,636	122,579		275,740	7,303,338		26.49
Class T	37,140	1,035,350		(49,179		)	986,171		221	5,900		37,361	992,071		26.55
Class D	79,791	2,100,000		—			2,100,000		2,653	69,442		82,444	2,169,442		26.31
Class I	344,389	9,154,902		—			9,154,902		2,780	73,860		347,169	9,228,762		26.58
	845,274	$	23,118,617	$	(631,785	)	$	22,486,832	10,290	$	271,781	855,564	$	22,758,613	$	26.60

	Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
	Proceeds from 2018 Private Offering and Public Offering								Distributions Reinvested(4)			Total
Share Class	Shares Issued	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees (2)(3)			Net Proceeds to Company		Shares	Proceeds to Company		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	3,258,260	$	81,456,500	$	—		$	81,456,500	—	$	—	3,258,260	$	81,456,500	$	25.00
Class A	1,824	50,000		(4,250		)	45,750		582	14,620		2,406	60,370		25.09
Class T	1,704	45,000		(2,138		)	42,862		—	—		1,704	42,862		25.15
Class D	6,730	170,000		—			170,000		—	—		6,730	170,000		25.26
Class I	32,812	825,000		—			825,000		9	238		32,821	825,238		25.14
	3,301,330	$	82,546,500	$	(6,388	)	$	82,540,112	591	$	14,858	3,301,921	$	82,554,970	25.00

FOOTNOTES:

⁽¹⁾  Amounts exclude distributions reinvested in July 2019 related to the payment of distributions declared in June 2019 and include distributions reinvested in January 2019 related to the payment of distributions declared in December 2018.

⁽²⁾  The Company incurs selling commissions and dealer manager fees on the sale of Class A and Class T shares sold through its Public Offering. See Note 5. “Related Party Transactions” for additional information regarding up-front selling commissions and dealer manager fees.

⁽³⁾  The Company did not incur any selling commissions or placement agent fees from the sale of the approximately 0.1 million and 3.3 million Class FA shares sold under the terms of the Class FA Private Offering and 2018 Private Offering, respectively.

⁽⁴⁾  Amounts exclude distributions reinvested in July 2018 related to the payment of distributions declared in June 2018.

Share Repurchase Program

On March 29, 2019, the Company’s board of directors approved and adopted a share repurchase program (the “Share Repurchase Program”). The total amount of aggregate repurchases of Class A, Class FA, Class T, Class D and Class I shares will be limited to up to 2.5% of the aggregate net asset value per calendar quarter (based on the aggregate net asset value as of the last date of the month immediately prior to the repurchase date) and up to 10% of the aggregate net asset value per year (based on the average aggregate net asset value as of the end of each of the Company’s trailing four quarters). Unless the Company’s board of directors determines otherwise, the Company will limit the number of shares to be repurchased during any calendar quarter to the number of shares the Company can repurchase with the proceeds received from the sale of shares under its distribution reinvestment plan in the previous quarter. Notwithstanding the foregoing, at the sole discretion of the Company’s board of directors, the Company may also use other sources, including, but not limited to, offering proceeds and borrowings to repurchase shares. 

During the quarter ended June 30, 2019, the Company received requests for the repurchase of approximately $0.3 million of the Company’s common shares, which exceeded proceeds received from its distribution reinvestment plan in the previous quarter by approximately $0.2 million. The Company’s board of directors approved the use of other sources to satisfy repurchase requests received in excess of proceeds received from the distribution reinvestment plan. The following table summarizes the shares repurchased during the six months ended June 30, 2019:

	Six Months Ended June 30, 2019
	Shares Repurchased	Total Consideration		Price Paid per Share
Class FA shares	6,400	$	173,824	$	27.16
Class A shares	244	6,534		26.75
Class I shares	4,745	127,680		26.91
Total	11,389	$	308,038	$	27.05

As of June 30, 2019, the Company had a payable for shares repurchased of approximately $0.3 million. There were no share repurchases during the period from February 7, 2018 (commencement of operations) to June 30, 2018.

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Borrowings (Notes)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Borrowings

Borrowings

In June 2019, the Company, through a wholly-owned subsidiary, entered into a loan agreement and related promissory note (the “Loan Agreement”) with Seaside National Bank & Trust for a $20.0 million line of credit (the “Line of Credit”). The Line of Credit has a maturity date of 364 days from the effective date of the Loan Agreement plus one 12-month extension. The Company is required to pay a fee of 0.4% of each borrowing with a maximum fee of $80,000 over the 364 day period. Under the Loan Agreement, the Company is required to pay interest on the borrowed amount at a rate of 30-day LIBOR plus an applicable spread of 2.75%. Interest payments are due monthly in arrears. The Company may prepay, without penalty, all of any part of the borrowings under the Loan Agreement at any time and such borrowings are required to be repaid within 180 days of the borrowing date. Under the Loan Agreement, the Company is required to comply with reporting requirements and other customary requirements for similar credit facilities. In connection with the Loan Agreement, in June 2019, the Company entered into an assignment and pledge of deposit account agreement (“Deposit Agreement”) in favor of the lender under the Line of Credit. Under the Deposit Agreement, the Company is required to contribute proceeds from its public and private offerings to pay down the outstanding debt to the extent there are any borrowings outstanding under the Loan Agreement above the minimum cash balance.

The Company had not borrowed any amounts under the Line of Credit as of June 30, 2019.

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Concentrations of Risk

6 Months Ended

Jun. 30, 2019

Risks and Uncertainties [Abstract]

Concentrations of Risk

Concentrations of Risk

As of June 30, 2019 and for the six months ended June 30, 2019, the Company had the following portfolio companies that individually accounted for 10% or more of the Company’s aggregate total assets or investment income:

Portfolio Company	Percentage of Total Investment Income	Percentage of Total Assets
Lawn Doctor	43.8%	41.7%
Polyform	47.0%	24.3%

The portfolio companies are required to make monthly interest payments on their debt, with the debt principal due upon maturity. Failure of any of these portfolio companies to pay contractual interest payments could have a material adverse effect on the Company’s results of operations and cash flows from operations which would impact its ability to make distributions to shareholders.

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Commitment & Contingences

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitment & Contingences

Commitment & Contingencies

See Note 5. “Related Party Transactions” for information on contingent amounts due to the Manager and Sub-Manager for the reimbursement of organization and offering costs under the Public Offering.

As of June 30, 2019, the Company had a material commitment related to the Purchase Agreement discussed in Note 3. “Investments.” See Note 12. “Subsequent Events” for additional information.

From time to time, the Company and officers or directors of the Company may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its businesses. As of June 30, 2019, the Company was not involved in any legal proceedings.

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Financial Highlights

6 Months Ended

Jun. 30, 2019

Investment Company [Abstract]

Financial Highlights

Financial Highlights

The following are schedules of financial highlights of the Company attributed to each class of shares for the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018.    

	Six Months Ended June 30, 2019
	Class FA  Shares			Class A Shares			Class T Shares			Class D Shares			Class I Shares
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period	$	26.65		$	26.44		$	26.54		$	26.23		$	26.55
Net investment income (loss), before expense support(1)	0.44			0.06			0.07			0.22			(0.01		)
Expense support(1)(2)	0.17			0.26			0.14			—			0.40
Net investment income(1)	0.61			0.32			0.21			0.22			0.39
Net realized and unrealized gains(1)(3)	0.56			0.61			0.59			0.57			0.60
Net increase resulting from investment operations	1.17			0.93			0.80			0.79			0.99
Distributions to shareholders(4)	(0.63		)	(0.63		)	(0.50		)	(0.56		)	(0.63		)
Net decrease resulting from distributions to shareholders	(0.63		)	(0.63		)	(0.50		)	(0.56		)	(0.63		)
Net Asset Value, End of Period	$	27.19		$	26.74		$	26.84		$	26.46		$	26.91
Net assets, end of period	$	91,718,198		$	12,509,598		$	1,846,952		$	5,433,648		$	15,928,594
Average net assets(5)	$	87,542,845		$	8,502,674		$	1,365,893		$	3,721,724		$	10,816,273
Shares outstanding, end of period	3,372,710			467,884			68,813			205,333			591,950
Distributions declared	$	2,041,416		$	198,538		$	25,498		$	79,364		$	251,414
Total investment return based on net asset value(6)	4.37		%	3.55		%	3.05		%	3.06		%	3.76		%
Total investment return based on net asset value after total return incentive fee(6)	4.37		%	3.55		%	3.05		%	3.06		%	3.76		%
RATIOS/SUPPLEMENTAL DATA (not annualized):
Ratios to average net assets:(5)(7)
Total operating expenses before total return incentive fee and expense support	1.06		%	3.05		%	3.29		%	2.67		%	2.84		%
Total operating expenses before expense support	1.50		%	3.42		%	3.29		%	2.67		%	3.63		%
Total operating expenses after expense support	0.84		%	2.43		%	2.75		%	2.67		%	2.13		%
Net investment income before total return incentive fee(9)	2.28		%	1.22		%	0.79		%	0.85		%	1.47		%
Net investment income	2.28		%	1.22		%	0.79		%	0.85		%	1.47		%

	Period February 7, 2018 (8) through June 30, 2018
	Class FA  Shares			Class A Shares			Class T Shares			Class D Shares			Class I Shares
OPERATING PERFORMANCE PER SHARE(10)
Net Asset Value, Beginning of Period(11)	$	25.00		$	25.00		$	25.16		$	25.26		$	25.00
Net investment income before expense support(1)	0.34			(2.32		)	(0.24		)	(0.12		)	(0.17		)
Expense support(1)(2)	0.06			2.43			0.31			0.12			0.38
Net investment income(1)	0.40			0.11			0.07			—			0.21
Net realized and unrealized gains(1)(3)	0.44			0.55			0.29			0.17			0.45
Net increase resulting from investment operations	0.84			0.66			0.36			0.17			0.66
Distributions to shareholders(4)	(0.41		)	(0.29		)	(0.10		)	(0.02		)	(0.26		)
Net decrease resulting from distributions to shareholders	(0.41		)	(0.29		)	(0.10		)	(0.02		)	(0.26		)
Net Asset Value, End of Period	$	25.43		$	25.37		$	25.42		$	25.41		$	25.40
Net assets, end of period	$	83,076,581		$	61,052		$	43,307		$	171,018		$	833,767
Average net assets(5)	$	82,088,518		$	10,152		$	40,449		$	170,204		$	517,198
Shares outstanding, end of period	3,266,260			2,406			1,704			6,730			32,821
Distributions declared	$	1,323,527		$	126		$	149		$	146		$	5,483
Total investment return based on net asset value(6)(12)	3.52		%	2.64		%	1.43		%	0.68		%	2.67		%
Total investment return based on net asset value after total return incentive fee(6)(12)	3.36		%	2.64		%	1.43		%	0.68		%	2.67		%
RATIOS/SUPPLEMENTAL DATA (not annualized):
Ratios to average net assets:(5)(7)
Total operating expenses before total return incentive fee and expense support	1.58		%	16.17		%	2.61		%	1.70		%	3.35		%
Total operating expenses before expense support	1.96		%	18.13		%	2.98		%	1.87		%	4.03		%
Total operating expenses after expense support	1.74		%	8.50		%	1.78		%	1.41		%	2.52		%
Net investment income before total return incentive fee(9)	1.74		%	0.43		%	0.27		%	(0.01		)%	0.83		%
Net investment income	1.59		%	0.43		%	0.27		%	(0.01		)%	0.83		%

FOOTNOTES:

⁽¹⁾  The per share amounts presented are based on weighted average shares outstanding.

⁽²⁾  Expense support is accrued throughout the year and is subject to a final calculation as of the last business day of the calendar year.

⁽³⁾  The amount shown at this caption is the balancing figure derived from the other figures in the schedule. The amount shown at this caption for a share outstanding throughout the period may not agree with the change in the aggregate gains and losses in portfolio investments for the period because of the timing of sales and repurchases of the Company’s shares in relation to fluctuating fair values for the portfolio investments.

⁽⁴⁾  The per share data for distributions is the actual amount of distributions paid or payable per common share outstanding during the entire period; distributions per share are rounded to the nearest $0.01.

⁽⁵⁾  The computation of average net assets during the period is based on net assets measured at each month end, adjusted for capital contributions or withdrawals during the month.

⁽⁶⁾  Total investment return is calculated for each share class as the change in the net asset value for such share class during the period and assuming all distributions are reinvested. Amounts are not annualized and are not representative of total return as calculated for purposes of the total return incentive fee described in Note 5. “Related Party Transactions.” Since there is no public market for the Company’s shares, terminal market value per share is assumed to be equal to net asset value per share on the last day of the period presented. The Company’s performance changes over time and currently may be different than that shown above. Past performance is no guarantee of future results. Investment performance is presented without regard to sales load that may be incurred by shareholders in the purchase of the Company’s shares.

⁽⁷⁾  Actual results may not be indicative of future results. Additionally, an individual investor’s ratios may vary from the ratios presented for a share class as a whole.

⁽⁸⁾  The Company commenced operations on February 7, 2018.

⁽⁹⁾  Amounts represent net investment income before total return incentive fee and related expense support as a percentage of average net assets. For the six months ended June 30, 2019, all of the total return incentive fees were covered by expense support. For the period February 7, 2018 through June 30, 2018, all of the total return incentive fees for the Class A, Class T, Class D and Class I shares were covered by expense support and approximately 58.2% of the total return incentive fees for Class FA shares were covered by expense support.

⁽¹⁰⁾  Operating performance per share for the period from February 7, 2018 to June 30, 2018 was previously calculated based on the first investor for each share class. This presentation has been updated to conform to the current year presentation based on weighted average shares outstanding during the period.

⁽¹¹⁾  The net asset value as of the beginning of the period is based on the price of shares sold, net of any sales load, to the initial investor of each respective share class. All Class FA shares sold in the 2018 Private Offering were sold at the same per share amount. The first investors for Class A, Class T, Class D and Class I shares purchased their shares in April 2018, May 2018, June 2018 and April 2018, respectively.

⁽¹²⁾  Total investment return for the period from February 7, 2018 to June 30, 2018 was previously calculated for each share class as the change in the net asset value for such share class plus total distributions for such share class calculated based on the Average Adjusted Capital for such class. This presentation has been updated to conform to the current year presentation described in footnote (6) above.

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Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Distributions

In July 2019, the Company’s board of directors declared a monthly cash distribution on the outstanding shares of all classes of common shares of record on August 29, 2019 of $0.104167 per share for Class FA shares, $0.104167 per share for Class A shares, $0.083333 per share for Class T shares, $0.093750 per share for Class D shares, and $0.104167 per share for Class I shares.

Offerings

The Company launched an additional Class FA private offering in July 2019 (the “Follow-On Class FA Private Offering” and collectively with the Class FA Private Offering, the “Class FA Private Offerings”) pursuant to Rule 506(c) under Regulation D of the Securities Act. In connection with the Follow-On Class FA Private Offering, the Company entered into a placement agent agreement with CNL Securities Corp. (the “Placement Agent”), an affiliate of the Manager. The Follow-On Class FA Private Offering is being offered on a best efforts basis, which means that the Placement Agent will use its best efforts but is not required to sell any specific amount of shares. The Company will pay the Placement Agent a selling commission of up to 5.5% and placement agent fee of up to 3.0% of the sale price for each Class FA share sold in the Follow-On Class FA Private Offering. Subject to requirements under the Securities Act and the applicable state securities laws of any jurisdiction, the Company intends to conduct the Follow-On Class FA Private Offering until the earlier of: (i) the date the Company has sold the maximum offering amount of the Follow-On Class FA Private Offering or (ii) October 31, 2019. However, the Company reserves the right to extend the outside date of the Follow-On Class FA Private Offering in its sole discretion but in no event later than December 31, 2019.

In July 2019, the Company’s board of directors approved new per share offering prices for each share class in the Public Offering and Class FA Private Offerings. The new offering prices are effective as of July 26, 2019. The following table provides the new offering prices and applicable upfront selling commissions and dealer manager fees for each share class available in the Public Offering and Class FA Private Offerings:

	Class FA		Class A		Class T		Class D		Class I
Effective July 26, 2019:
Offering Price, Per Share	$	27.19	$	29.22	$	28.18	$	26.46	$	26.91
Selling Commissions, Per Share	—		1.75		0.85		—		—
Dealer Manager Fees, Per Share	—		0.73		0.49		—		—

Capital Transactions

During the period July 1, 2019 through August 2, 2019, the Company received additional net proceeds from the Class FA Private Offering, Public Offering and its distribution reinvestment plan of:

	Class FA Private Offering and Public Offering								Distribution Reinvestment Plan			Total
Share Class	Shares	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees			Net Proceeds to Company		Shares	Gross Proceeds		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	49,643	$	1,350,000	$	—		$	1,350,000	—	$	—	49,643	$	1,350,000	$	27.19
Class A	44,680	1,280,230		(85,699		)	1,194,531		1,063	28,437		45,743	1,222,968		26.74
Class T	8,091	228,000		(10,830		)	217,170		86	2,314		8,177	219,484		26.84
Class D	24,641	652,000		—			652,000		529	13,998		25,170	665,998		26.46
Class I	80,885	2,176,618		—			2,176,618		898	24,164		81,783	2,200,782		26.91
	207,940	$	5,686,848	$	(96,529	)	$	5,590,319	2,576	$	68,913	210,516	$	5,659,232	$	26.88

Acquisition

On August 1, 2019, the Company acquired a controlling interest of approximately 81% in Roundtables, pursuant to the Purchase Agreement described in Note 3. “Investments”. The Company made a $44.5 million investment consisting of approximately $32.4 million of common equity and approximately $12.1 million of senior secured notes. Under the Purchase Agreement, the Seller has the opportunity to earn up to an additional $2.0 million based on the achievement by Roundtables of certain performance metrics. The final purchase price is subject to this and other post-closing adjustments.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as contained in the Financial Accounting Standards Board Accounting Standards Codification (the “Codification” or “ASC”), which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties. In the opinion of management, the condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and necessary for the fair presentation of financial results as of and for the periods presented.

Although the Company is organized and intends to conduct its business in a manner so that it is not required to register as an investment company under the Investment Company Act, its financial statements are prepared using the specialized accounting principles of ASC Topic 946 to utilize investment company accounting. The Company obtains funds through the issuance of equity interests to multiple unrelated investors, and provides such investors with investment management services. Further, the Company’s business strategy is to acquire interests in middle-market U.S. businesses to provide current income and long term capital appreciation, while protecting invested capital. Overall, the Company believes that the use of investment company accounting on a fair value basis is consistent with the management of its assets on a fair value basis, and makes the Company’s financial statements more useful to investors and other financial statement users in facilitating the evaluation of an investment in the Company as compared to other investment products in the marketplace.

Principles of Consolidation

Principles of Consolidation

Under ASC Topic 946, “Financial Services—Investment Companies” (“ASC Topic 946”) the Company is precluded from consolidating any entity other than an investment company or an operating company which provides substantially all of its services to benefit the Company. In accordance therewith, the Company has consolidated the results of its wholly owned subsidiaries which provide services to the Company in its condensed consolidated financial statements. However, the Company has not consolidated the results of its subsidiaries in which the Company holds debt and equity investments. All intercompany account balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash

Cash consists of demand deposits at commercial banks.

Use of Estimates

Use of Estimates

Management makes estimates and assumptions related to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare the financial statement in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

Valuation of Investments

Valuation of Investments

ASC Topic 820 clarifies that the fair value is the price in an orderly transaction between market participants to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. ASC Topic 820 provides a consistent definition of fair value which focuses on exit price and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs.

In addition, ASC Topic 820 provides a framework for measuring fair value and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels of valuation hierarchy established by ASC Topic 820 are defined as follows:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets. An active market is defined as a market in which transactions for the asset or liability occur with sufficient pricing information on an ongoing basis. Publicly listed equity and debt securities and listed derivatives that are traded on major securities exchanges and publicly traded equity options are generally valued using Level 1 inputs. If a price for an asset cannot be determined based upon this established process, it shall then be valued as a Level 2 or Level 3 asset.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following: (i) quoted prices for similar assets in active markets; (ii) quoted prices for identical or similar assets in markets that are not active; (iii) inputs that are derived principally from or corroborated by observable market data by correlation or other means; and (iv) inputs other than quoted prices that are observable for the assets. Fixed income and derivative assets, where there is an observable secondary trading market and through which pricing inputs are available through pricing services or broker quotes, are generally valued using Level 2 inputs. If a price for an asset cannot be determined based upon this established process, it shall then be valued as a Level 3 asset.

Level 3 – Unobservable inputs for the asset or liability being valued. Unobservable inputs will be used to measure fair value to the extent that observable inputs are not available and such inputs will be based on the best information available in the circumstances, which under certain circumstances might include the Manager’s or the Sub-Manager’s own data. Level 3 inputs may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. Certain assets may be valued based upon estimated value of underlying collateral and include adjustments deemed necessary for estimates of costs to obtain control and liquidate available collateral. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence. Debt and equity investments in private companies or assets valued using the market or income approach are generally valued using Level 3 inputs.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls will be determined based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each asset.

The Company’s board of directors is responsible for determining in good faith the fair value of the Company’s investments in accordance with the valuation policy and procedures approved by the board of directors, based on, among other factors, the input of the Manager, the Sub-Manager, its audit committee, and the independent third-party valuation firm. The determination of the fair value of the Company’s assets requires judgment, especially with respect to assets for which market prices are not available. For most of the Company’s assets, market prices will not be available. Due to the inherent uncertainty of determining the fair value of assets that do not have a readily available market value, the fair value of the assets may differ significantly from the values that would have been used had a readily available market value existed for such assets, and the differences could be material. Because the calculation of the Company’s net asset value is based, in part, on the fair value of its assets, the Company’s calculation of net asset value is subjective and could be adversely affected if the determinations regarding the fair value of its assets were materially higher than the values that the Company ultimately realizes upon the disposal of such assets. Furthermore, through the valuation process, the Company’s board of directors may determine that the fair value of the Company’s assets differs materially from the values that were provided by the independent valuation firm.

The Company may also look to private merger and acquisition statistics, public trading multiples adjusted for illiquidity and other factors, valuations implied by third-party investments in the businesses or industry practices in determining fair value. The Company may also consider the size and scope of a business and its specific strengths and weaknesses, as well as any other factors it deems relevant in assessing the value.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

The Company will measure realized gains or losses as the difference between the net proceeds from the sale, repayment, or disposal of an asset and the adjusted cost basis of the asset, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation will reflect the change in asset values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Income Recognition

Income Recognition

Interest Income – Interest income is recorded on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest on loans and debt securities for accounting purposes if it has reason to doubt its ability to collect such interest.

The Company places loans on non-accrual status when principal and interest are past due 90 days or more or when there is a reasonable doubt that the Company will collect principal or interest. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are generally restored to accrual status when past due principal and interest amounts are paid and, in management’s judgment, are likely to remain current. To date, the Company has not experienced any past due payments on any of its loans.

Dividend Income – Dividend income is recorded on the record date for privately issued securities, but excludes any portion of distributions that are treated as a return of capital. Each distribution received from an equity investment is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments as dividend income unless there is sufficient current or accumulated earnings prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment. To date, all distributions have been classified as dividend income.

Paid in Capital

Paid in Capital

The Company records the proceeds from the sale of its common shares on a net basis to (i) capital stock and (ii) paid in capital in excess of par value, excluding upfront selling commissions and dealer manager fees.

Organization and Offering Expenses

Organization and Offering Expenses

Organization expenses are expensed on the Company’s statements of operations as incurred. Offering expenses, which consist of amounts incurred for items such as legal, accounting, regulatory and printing work incurred related to the Offerings, are capitalized on the Company’s statements of assets and liabilities as deferred offering expenses and expensed to the Company’s statements of operations over the lesser of the offering period or 12 months; however, the end of the deferral period will not exceed 12 months from the date the offering expense is incurred by the Manager and the Sub-Manager.

Deferred Charges, Policy [Policy Text Block]

Deferred Financing Costs

Financing costs, including upfront fees, commitment fees and legal fees related to the Line of Credit (as defined and further described in Note 8. “Borrowings”) will be deferred and amortized over the life of the related financing instrument using the effective yield method. The amortization of deferred financing costs will be included in interest expense in the condensed statements of operations.

Earnings per Share and Net Investment Income per Share

Earnings per Share and Net Investment Income per Share

Earnings per share and net investment income per share are calculated for each share class of common shares based upon the weighted average number of common shares outstanding during the reporting period.

Distributions

Distributions

In March 2018, the Company’s board of directors began to declare cash distributions to shareholders based on weekly record dates and such distributions were paid on a monthly basis one month in arrears. Effective with distributions declared for January 2019, the Company’s board of directors began to declare distributions based on monthly record dates and such distributions are expected to be paid on a monthly basis one month in arrears. Distributions are made on all classes of the Company’s shares at the same time.

The Company has adopted a distribution reinvestment plan that provides for reinvestment of distributions on behalf of shareholders. Non-founder shareholders participating in the distribution reinvestment plan will have their cash distribution automatically reinvested in additional shares having the same class designation as the class of shares to which such distributions are attributable at a price per share equivalent to the then current public offering price, net of up-front selling commissions and dealer manager fees. Cash distributions paid on Founder shares participating in the distribution reinvestment plan are reinvested in additional shares of Class A shares.

U.S. Federal Income Taxes

U.S. Federal Income Taxes

The Company expects that it will operate so that it will qualify to be treated for U.S. federal income tax purposes as a partnership, and not as an association or a publicly traded partnership taxable as a corporation. Generally, the Company will not be taxable as a corporation if 90% or more of its gross income for each taxable year consists of “qualifying income” (generally, interest (other than interest generated from a financial business), dividends, real property rents, gain from the sale of assets that produce qualifying income and certain other items) and the Company is not required to register under the Investment Company Act (the “qualifying income exception”).

No provision has been made for income taxes since the individual shareholders are responsible for their proportionate share of the Company’s taxable income.

Under U.S. GAAP, the Company is subject to the provisions of ASC 740,“Income Taxes.” This standard defines the threshold for recognizing the benefits of tax-return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than 50% likely to be realized.

The Company has analyzed its tax positions taken on Federal income tax returns for all open tax years (tax years ended December 31, 2018 and 2017), and has concluded that no provision for income tax is required in the Company’s financial statements. The Company follows the authoritative guidance on accounting for uncertainty in income taxes and concluded it has no material uncertain tax positions to be recognized at this time.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. During the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) to December 31, 2018, the Company did not incur any interest or penalties.

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (the “Act”) which reduced U.S. corporate income tax rates, created a territorial tax system, allowed for immediate expensing of certain qualified property, provided other tax related incentives and included various base-broadening provisions. The Act did not have a material impact on the Company.

Reclassifications

Reclassifications

Certain prior period amounts in the condensed consolidated financial statements have been reclassified to conform to the current period presentation with no effect on previously reported net assets.

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Investments (Tables)

6 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Summary of Investment Portfolio

As of June 30, 2019 and December 31, 2018, the Company’s investment portfolio is summarized as follows:

	As of June 30, 2019
Asset Category	Cost		Fair Value		Fair Value Percentage of Investment Portfolio		Fair Value Percentage of Net Assets
Senior debt
Senior secured debt - first lien	$	15,700,000	$	15,700,000	18.5	%	12.3	%
Senior secured debt - second lien	15,000,000		15,000,000		17.6		11.8
Total senior debt	30,700,000		30,700,000		36.1		24.1
Equity	46,074,339		54,251,000		63.9		42.6
Total investments	$	76,774,339	$	84,951,000	100.0	%	66.7	%

	As of December 31, 2018
Asset Category	Cost		Fair Value		Fair Value Percentage of Investment Portfolio		Fair Value Percentage of Net Assets
Senior debt
Senior secured debt - first lien	$	15,700,000	$	15,700,000	19.0	%	15.2	%
Senior secured debt - second lien	15,000,000		15,000,000		18.2		14.6
Total senior debt	30,700,000		30,700,000		37.2		29.8
Equity	46,074,339		51,800,000		62.8		50.4
Total investments	$	76,774,339	$	82,500,000	100.0	%	80.2	%

Industry and Geographic Dispersion of Investment Portfolio as Percentage of Total Fair Value of Investments

The industry and geographic dispersion of the Company’s investment portfolio as a percentage of total fair value of the Company’s investments as of June 30, 2019 and December 31, 2018 were as follows:

Industry	June 30, 2019		December 31, 2018
Hobby Goods and Supplies	36.8	%	37.9	%
Commercial and Professional Services	63.2		62.1
Total	100.0	%	100.0	%

Geographic Dispersion(1)	June 30, 2019		December 31, 2018
United States	100.0	%	100.0	%
Total	100.0	%	100.0	%

FOOTNOTE:

⁽¹⁾  The geographic dispersion is determined by the portfolio company’s country of domicile or the jurisdiction of the security’s issuer.

Summary of Operating and Balance Sheet Data

The following tables present unaudited summarized operating data for Lawn Doctor and Polyform (the “initial businesses”) for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) through June 30, 2018, and summarized balance sheet data as of June 30, 2019 (unaudited) and December 31, 2018:

Lawn Doctor

Summarized Operating Data (Unaudited)

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			For the Period from February 7, 2018 (1) to June 30, 2018
Revenues	$	6,973,211		$	5,020,688		$	13,424,712		$	7,951,778
Expenses	(6,585,500		)	(4,258,181		)	(13,276,235		)	(6,911,347		)
Income before taxes	387,711			762,507			148,477			1,040,431
Income tax expense	(103,053		)	(57,200		)	(39,465		)	(46,267		)
Consolidated net income	284,658			$	705,307		109,012			994,164
Net loss attributable to non-controlling interest	28,168			$	22,438		64,803			22,438
Net income attributable to Lawn Doctor	$	312,826		$	727,745		$	173,815		$	1,016,602

Summarized Balance Sheet Data

	As of June 30, 2019 (Unaudited)			As of December 31, 2018
Current assets	$	6,991,954		$	6,347,092
Non-current assets	$	94,900,906		$	94,024,715
Current liabilities	$	4,653,642		$	4,342,064
Non-current liabilities	$	52,301,370		$	50,312,347
Non-controlling interest	$	(11,063	)	$	(40,952	)
Stockholders’ equity	$	44,948,911		$	45,758,348

Polyform

Summarized Operating Data (Unaudited)

	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			For the Period from February 7, 2018 (1) to June 30, 2018
Revenues	$	3,815,425		$	4,064,855		$	8,221,289		$	6,482,448
Expenses	(4,094,317		)	(4,315,901		)	(8,491,355		)	(7,310,524		)
Loss before income taxes	(278,892		)	(251,046		)	(270,066		)	(828,076		)
Income tax benefit	79,000			72,000			76,000			146,000
Net loss	$	(199,892	)	$	(179,046	)	$	(194,066	)	$	(682,076	)

Summarized Balance Sheet Data

	As of June 30, 2019 (Unaudited)		As of December 31, 2018
Current assets	$	5,807,621	$	5,481,783
Non-current assets	$	32,179,761	$	29,977,677
Current liabilities	$	4,105,170	$	963,823
Non-current liabilities	$	18,454,623	$	18,530,624
Stockholders’ equity	$	15,427,589	$	15,965,013

FOOTNOTE:

⁽¹⁾ February 7, 2018 is the date the Company acquired the initial businesses.

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Investments Categorization in Fair Value Hierarchy

The Company’s investments were categorized in the fair value hierarchy described in Note 2. “Significant Accounting Policies,” as follows as of June 30, 2019 and December 31, 2018:

	As of June 30, 2019								As of December 31, 2018
Description	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Senior debt	$	—	$	—	$	30,700,000	$	30,700,000	$	—	$	—	$	30,700,000	$	30,700,000
Equity	—		—		54,251,000		54,251,000		—		—		51,800,000		51,800,000
Total investments	$	—	$	—	$	84,951,000	$	84,951,000	$	—	$	—	$	82,500,000	$	82,500,000

Unobservable Inputs Used in Fair Value Measurement of Investments

The ranges of unobservable inputs used in the fair value measurement of the Company’s Level 3 investments as of June 30, 2019 and December 31, 2018 were as follows:

June 30, 2019
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	$	30,700,000	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.3% - 13.8% (11.3%) 7.7x – 12.1x (10.8x) 8.0x – 12.0x (10.9x)	Decrease Increase Increase
Equity	54,251,000		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.3% - 13.8% (11.3%) 7.7x – 12.1x (10.8x) 8.0x – 12.0x (10.9x)	Decrease Increase Increase
Total	$	84,951,000

December 31, 2018
Asset Group	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Average)(1)	Impact to Valuation from an Increase in Input (2)
Senior Debt	$	30,700,000	Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.5% - 13.5% (11.4%) 7.9x – 12.2x (10.9x) 8.0x – 12.0x (10.8x)	Decrease Increase Increase
Equity	51,800,000		Discounted Cash Flow Market Comparables Transaction Method	Discount Rate EBITDA Multiple EBITDA Multiple	10.5% - 13.5% (11.4%) 7.9x – 12.2x (10.9x) 8.0x – 12.0x (10.8x)	Decrease Increase Increase
Total	$	82,500,000

FOOTNOTES:

⁽¹⁾  Discount rates are relative to the enterprise value of the portfolio companies and are not the market yields on the associated debt investments. Unobservable inputs were weighted by the relative fair value of the investments.

⁽²⁾  This column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

Reconciliations of Investments of Level 3 Inputs

The following tables provide reconciliation of investments for which Level 3 inputs were used in determining fair value for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) through December 31, 2018:

	Six Months Ended June 30, 2019
	Senior Debt		Equity		Total
Fair value balance as of January 1, 2019	$	30,700,000	$	51,800,000	$	82,500,000
Net change in unrealized appreciation (1)	—		2,451,000		2,451,000
Fair value balance as of June 30, 2019	$	30,700,000	$	54,251,000	$	84,951,000
Change in net unrealized appreciation in investments held as of June 30, 2019 (1)	$	—	$	2,451,000	$	2,451,000

	Period from February 7, 2018 (Commencement of Operations) to December 31, 2018
	Senior Debt		Equity		Total
Fair value balance as of February 7, 2018	$	—	$	—	$	—
Additions	30,700,000		46,074,339		76,774,339
Net change in unrealized appreciation (1)	—		5,725,661		5,725,661
Fair value balance as of December 31, 2018	$	30,700,000	$	51,800,000	$	82,500,000
Change in net unrealized appreciation in investments held as of December 31, 2018 (1)	$	—	$	5,725,661	$	5,725,661

FOOTNOTE:

⁽¹⁾   Included in net change in unrealized appreciation on investments in the consolidated statements of operations.

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

Related party fees and expenses incurred for the quarter ended June 30, 2019 and 2018, the six months ended June 30, 2019, and the period from February 7, 2018 (commencement of operations) through June 30, 2018 are summarized below:

Related Party	Source Agreement & Description	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Managing Dealer	Managing Dealer Agreement: Commissions	$	133,905		$	4,350		$	419,582		$	4,350
	Dealer Manager Fees	73,569			2,038			212,203			2,038
	Annual distribution and shareholder servicing fees	9,048			52			15,817			52
Manager and Sub-Manager	Management Agreement and Sub-Management Agreement: Organization and offering reimbursement (1)(2)	141,445			18,107			312,712			725,153
	Base management fees (1)	265,128			194,974			506,766			283,536
	Total return incentive fees (1)	496,660			308,735			496,660			308,735
Manager and Sub-Manager	Expense Support and Conditional Reimbursement Agreement: Expense support	(610,447		)	(144,146		)	(826,520		)	(187,358		)
Manager	Administrative Services Agreement: Reimbursement of third-party operating expenses (1)	43,086			23,657			54,950			43,551

FOOTNOTE:

⁽¹⁾  Expenses subject to Expense Support.

⁽²⁾  Organization reimbursements are expensed on the Company’s statements of operations as incurred. Offering reimbursements are capitalized on the Company’s statements of assets and liabilities as deferred offering expenses and expensed to the Company’s statements of operations over the lesser of the offering period or 12 months.

The following table presents amounts due from (to) related parties as of June 30, 2019 and December 31, 2018:

	June 30, 2019			December 31, 2018
Due from related parties:
Expense Support	$	826,520		$	389,774
Total due from related parties	826,520			389,774
Due to related parties:
Organization and offering expenses	(55,968		)	(66,894		)
Base management fees	(89,595		)	(78,967		)
Total return incentive fee	(496,660		)	(1,015,228		)
Reimbursement of third-party operating expenses	(43,086		)	(9,101		)
Annual distribution and shareholder servicing fees	(3,281		)	(1,866		)
Total due to related parties	(688,590		)	(1,172,056		)
Net due from (to) related parties	$	137,930		$	(782,282	)

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Distributions (Tables)

6 Months Ended

Jun. 30, 2019

Distributions Made to Members or Limited Partners [Abstract]

Distributions Declared

The following table reflects the total distributions declared during the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018:

	Six Months Ended June 30, 2019						Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
Distribution Period	Distributions Declared (1)		Distributions Reinvested (2)		Cash Distributions Net of Distributions Reinvested		Distributions Declared (3)		Distributions Reinvested (4)		Cash Distributions Net of Distributions Reinvested
First Quarter(5)	$	1,235,971	$	121,011	$	1,114,960	$	302,841	$	2,299	$	300,542
Second Quarter(6)	1,360,259		192,895		1,167,364		1,026,590		19,767		1,006,823
	$	2,596,230	$	313,906	$	2,282,324	$	1,329,431	$	22,066	$	1,307,365

FOOTNOTES:

⁽¹⁾ During 2019, the Company’s board of directors declared distributions per share on a monthly basis. See Note 11. “Financial Highlights” for distributions declared by share class. Distributions declared per share for each share class were as follows:    

Record Date Period	Class FA		Class A		Class T		Class D		Class I
January 1, 2019 - June 30, 2019 (6 record dates)	$	0.104167	$	0.104167	$	0.083333	$	0.093750	$	0.104167

⁽²⁾ Includes distributions reinvested in July 2019 of $68,914 related to distributions declared based on record dates in June 2019 and excludes distributions reinvested in January 2019 of $26,789 related to distributions declared based on record dates in December 2018.

⁽³⁾  During 2018, the Company’s board of directors declared distributions per share on a weekly basis. See Note 11. “Financial Highlights” for distributions declared by share class. Distributions declared per share for each share class were as follows:

Record Date Period	Class FA		Class A		Class T		Class D		Class I
March 7, 2018	$	0.020604	$	0.020604	$	0.016484	$	0.018544	$	0.020604
March 13, 2018 - June 26, 2018 (16 record dates)	0.024038		0.024038		0.019231		0.021635		0.024038

⁽⁴⁾ Includes distributions reinvested in July 2018 of $7,208 related to distributions declared based on record dates in June 2018.

⁽⁵⁾ Distributions declared for the record dates in March 2019 and 2018 were paid in April 2019 and 2018, respectively.

⁽⁶⁾ Distributions declared for the record dates in June 2019 and 2018 were paid in July 2019 and 2018, respectively.

The sources of declared distributions on a GAAP basis were as follows:

	Six Months Ended June 30, 2019				Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
	Amount		% of Cash Distributions Declared		Amount		% of Cash Distributions Declared
Net investment income(1)	$	2,301,835	88.7	%	$	1,307,313	98.3	%
Distributions in excess of net investment income(2)	294,395		11.3	%	22,118		1.7	%
Total distributions declared	$	2,596,230	100.0	%	$	1,329,431	100.0	%

FOOTNOTES:

⁽¹⁾ Net investment income includes expense support from the Manager and Sub-Manager of $826,520 and $187,358 for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) to June 30, 2018, respectively. See Note 5. “Related Party Transactions” for additional information.

⁽²⁾ Consists of distributions made from offering proceeds for the periods presented.

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Capital Transactions (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Summary of Shares Issued and Proceeds Received in Connection with Private Placement

The following table summarizes the total shares issued and proceeds received by share class in connection with the Offerings, excluding shares repurchased through the Share Repurchase Program described further below, for the six months ended June 30, 2019 and for the period from February 7, 2018 (commencement of operations) to June 30, 2018:

	Six Months Ended June 30, 2019
	Proceeds from Class FA Private Offering and Public Offering								Distributions Reinvested(1)			Total
Share Class	Shares Issued	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees (2)(3)			Net Proceeds to Company		Shares	Proceeds to Company		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	112,850	$	3,065,000	$	—		$	3,065,000	—	$	—	112,850	$	3,065,000	$	27.16
Class A	271,104	7,763,365		(582,606		)	7,180,759		4,636	122,579		275,740	7,303,338		26.49
Class T	37,140	1,035,350		(49,179		)	986,171		221	5,900		37,361	992,071		26.55
Class D	79,791	2,100,000		—			2,100,000		2,653	69,442		82,444	2,169,442		26.31
Class I	344,389	9,154,902		—			9,154,902		2,780	73,860		347,169	9,228,762		26.58
	845,274	$	23,118,617	$	(631,785	)	$	22,486,832	10,290	$	271,781	855,564	$	22,758,613	$	26.60

	Period from February 7, 2018 (Commencement of Operations) to June 30, 2018
	Proceeds from 2018 Private Offering and Public Offering								Distributions Reinvested(4)			Total
Share Class	Shares Issued	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees (2)(3)			Net Proceeds to Company		Shares	Proceeds to Company		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	3,258,260	$	81,456,500	$	—		$	81,456,500	—	$	—	3,258,260	$	81,456,500	$	25.00
Class A	1,824	50,000		(4,250		)	45,750		582	14,620		2,406	60,370		25.09
Class T	1,704	45,000		(2,138		)	42,862		—	—		1,704	42,862		25.15
Class D	6,730	170,000		—			170,000		—	—		6,730	170,000		25.26
Class I	32,812	825,000		—			825,000		9	238		32,821	825,238		25.14
	3,301,330	$	82,546,500	$	(6,388	)	$	82,540,112	591	$	14,858	3,301,921	$	82,554,970	25.00

FOOTNOTES:

⁽¹⁾  Amounts exclude distributions reinvested in July 2019 related to the payment of distributions declared in June 2019 and include distributions reinvested in January 2019 related to the payment of distributions declared in December 2018.

⁽²⁾  The Company incurs selling commissions and dealer manager fees on the sale of Class A and Class T shares sold through its Public Offering. See Note 5. “Related Party Transactions” for additional information regarding up-front selling commissions and dealer manager fees.

⁽³⁾  The Company did not incur any selling commissions or placement agent fees from the sale of the approximately 0.1 million and 3.3 million Class FA shares sold under the terms of the Class FA Private Offering and 2018 Private Offering, respectively.

⁽⁴⁾  Amounts exclude distributions reinvested in July 2018 related to the payment of distributions declared in June 2018.

Summary of Shares Repurchased

The following table summarizes the shares repurchased during the six months ended June 30, 2019:

	Six Months Ended June 30, 2019
	Shares Repurchased	Total Consideration		Price Paid per Share
Class FA shares	6,400	$	173,824	$	27.16
Class A shares	244	6,534		26.75
Class I shares	4,745	127,680		26.91
Total	11,389	$	308,038	$	27.05

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Concentrations of Risk (Tables)

6 Months Ended

Jun. 30, 2019

Risks and Uncertainties [Abstract]

Schedules of Concentration of Risk, by Risk Factor

Portfolio Company	Percentage of Total Investment Income	Percentage of Total Assets
Lawn Doctor	43.8%	41.7%
Polyform	47.0%	24.3%

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Financial Highlights (Tables)

6 Months Ended

Jun. 30, 2019

Investment Company [Abstract]

Schedule of Financial Highlights

The following are schedules of financial highlights of the Company attributed to each class of shares for the six months ended June 30, 2019 and the period from February 7, 2018 (commencement of operations) through June 30, 2018.    

	Six Months Ended June 30, 2019
	Class FA  Shares			Class A Shares			Class T Shares			Class D Shares			Class I Shares
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period	$	26.65		$	26.44		$	26.54		$	26.23		$	26.55
Net investment income (loss), before expense support(1)	0.44			0.06			0.07			0.22			(0.01		)
Expense support(1)(2)	0.17			0.26			0.14			—			0.40
Net investment income(1)	0.61			0.32			0.21			0.22			0.39
Net realized and unrealized gains(1)(3)	0.56			0.61			0.59			0.57			0.60
Net increase resulting from investment operations	1.17			0.93			0.80			0.79			0.99
Distributions to shareholders(4)	(0.63		)	(0.63		)	(0.50		)	(0.56		)	(0.63		)
Net decrease resulting from distributions to shareholders	(0.63		)	(0.63		)	(0.50		)	(0.56		)	(0.63		)
Net Asset Value, End of Period	$	27.19		$	26.74		$	26.84		$	26.46		$	26.91
Net assets, end of period	$	91,718,198		$	12,509,598		$	1,846,952		$	5,433,648		$	15,928,594
Average net assets(5)	$	87,542,845		$	8,502,674		$	1,365,893		$	3,721,724		$	10,816,273
Shares outstanding, end of period	3,372,710			467,884			68,813			205,333			591,950
Distributions declared	$	2,041,416		$	198,538		$	25,498		$	79,364		$	251,414
Total investment return based on net asset value(6)	4.37		%	3.55		%	3.05		%	3.06		%	3.76		%
Total investment return based on net asset value after total return incentive fee(6)	4.37		%	3.55		%	3.05		%	3.06		%	3.76		%
RATIOS/SUPPLEMENTAL DATA (not annualized):
Ratios to average net assets:(5)(7)
Total operating expenses before total return incentive fee and expense support	1.06		%	3.05		%	3.29		%	2.67		%	2.84		%
Total operating expenses before expense support	1.50		%	3.42		%	3.29		%	2.67		%	3.63		%
Total operating expenses after expense support	0.84		%	2.43		%	2.75		%	2.67		%	2.13		%
Net investment income before total return incentive fee(9)	2.28		%	1.22		%	0.79		%	0.85		%	1.47		%
Net investment income	2.28		%	1.22		%	0.79		%	0.85		%	1.47		%

	Period February 7, 2018 (8) through June 30, 2018
	Class FA  Shares			Class A Shares			Class T Shares			Class D Shares			Class I Shares
OPERATING PERFORMANCE PER SHARE(10)
Net Asset Value, Beginning of Period(11)	$	25.00		$	25.00		$	25.16		$	25.26		$	25.00
Net investment income before expense support(1)	0.34			(2.32		)	(0.24		)	(0.12		)	(0.17		)
Expense support(1)(2)	0.06			2.43			0.31			0.12			0.38
Net investment income(1)	0.40			0.11			0.07			—			0.21
Net realized and unrealized gains(1)(3)	0.44			0.55			0.29			0.17			0.45
Net increase resulting from investment operations	0.84			0.66			0.36			0.17			0.66
Distributions to shareholders(4)	(0.41		)	(0.29		)	(0.10		)	(0.02		)	(0.26		)
Net decrease resulting from distributions to shareholders	(0.41		)	(0.29		)	(0.10		)	(0.02		)	(0.26		)
Net Asset Value, End of Period	$	25.43		$	25.37		$	25.42		$	25.41		$	25.40
Net assets, end of period	$	83,076,581		$	61,052		$	43,307		$	171,018		$	833,767
Average net assets(5)	$	82,088,518		$	10,152		$	40,449		$	170,204		$	517,198
Shares outstanding, end of period	3,266,260			2,406			1,704			6,730			32,821
Distributions declared	$	1,323,527		$	126		$	149		$	146		$	5,483
Total investment return based on net asset value(6)(12)	3.52		%	2.64		%	1.43		%	0.68		%	2.67		%
Total investment return based on net asset value after total return incentive fee(6)(12)	3.36		%	2.64		%	1.43		%	0.68		%	2.67		%
RATIOS/SUPPLEMENTAL DATA (not annualized):
Ratios to average net assets:(5)(7)
Total operating expenses before total return incentive fee and expense support	1.58		%	16.17		%	2.61		%	1.70		%	3.35		%
Total operating expenses before expense support	1.96		%	18.13		%	2.98		%	1.87		%	4.03		%
Total operating expenses after expense support	1.74		%	8.50		%	1.78		%	1.41		%	2.52		%
Net investment income before total return incentive fee(9)	1.74		%	0.43		%	0.27		%	(0.01		)%	0.83		%
Net investment income	1.59		%	0.43		%	0.27		%	(0.01		)%	0.83		%

FOOTNOTES:

⁽¹⁾  The per share amounts presented are based on weighted average shares outstanding.

⁽²⁾  Expense support is accrued throughout the year and is subject to a final calculation as of the last business day of the calendar year.

⁽³⁾  The amount shown at this caption is the balancing figure derived from the other figures in the schedule. The amount shown at this caption for a share outstanding throughout the period may not agree with the change in the aggregate gains and losses in portfolio investments for the period because of the timing of sales and repurchases of the Company’s shares in relation to fluctuating fair values for the portfolio investments.

⁽⁴⁾  The per share data for distributions is the actual amount of distributions paid or payable per common share outstanding during the entire period; distributions per share are rounded to the nearest $0.01.

⁽⁵⁾  The computation of average net assets during the period is based on net assets measured at each month end, adjusted for capital contributions or withdrawals during the month.

⁽⁶⁾  Total investment return is calculated for each share class as the change in the net asset value for such share class during the period and assuming all distributions are reinvested. Amounts are not annualized and are not representative of total return as calculated for purposes of the total return incentive fee described in Note 5. “Related Party Transactions.” Since there is no public market for the Company’s shares, terminal market value per share is assumed to be equal to net asset value per share on the last day of the period presented. The Company’s performance changes over time and currently may be different than that shown above. Past performance is no guarantee of future results. Investment performance is presented without regard to sales load that may be incurred by shareholders in the purchase of the Company’s shares.

⁽⁷⁾  Actual results may not be indicative of future results. Additionally, an individual investor’s ratios may vary from the ratios presented for a share class as a whole.

⁽⁸⁾  The Company commenced operations on February 7, 2018.

⁽⁹⁾  Amounts represent net investment income before total return incentive fee and related expense support as a percentage of average net assets. For the six months ended June 30, 2019, all of the total return incentive fees were covered by expense support. For the period February 7, 2018 through June 30, 2018, all of the total return incentive fees for the Class A, Class T, Class D and Class I shares were covered by expense support and approximately 58.2% of the total return incentive fees for Class FA shares were covered by expense support.

⁽¹⁰⁾  Operating performance per share for the period from February 7, 2018 to June 30, 2018 was previously calculated based on the first investor for each share class. This presentation has been updated to conform to the current year presentation based on weighted average shares outstanding during the period.

⁽¹¹⁾  The net asset value as of the beginning of the period is based on the price of shares sold, net of any sales load, to the initial investor of each respective share class. All Class FA shares sold in the 2018 Private Offering were sold at the same per share amount. The first investors for Class A, Class T, Class D and Class I shares purchased their shares in April 2018, May 2018, June 2018 and April 2018, respectively.

⁽¹²⁾  Total investment return for the period from February 7, 2018 to June 30, 2018 was previously calculated for each share class as the change in the net asset value for such share class plus total distributions for such share class calculated based on the Average Adjusted Capital for such class. This presentation has been updated to conform to the current year presentation described in footnote (6) above.

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Subsequent Events (Tables)

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Summary of New Public Offering Prices and Applicable Upfront Selling Commissions and Dealer Manager Fees

The following table provides the new offering prices and applicable upfront selling commissions and dealer manager fees for each share class available in the Public Offering and Class FA Private Offerings:

	Class FA		Class A		Class T		Class D		Class I
Effective July 26, 2019:
Offering Price, Per Share	$	27.19	$	29.22	$	28.18	$	26.46	$	26.91
Selling Commissions, Per Share	—		1.75		0.85		—		—
Dealer Manager Fees, Per Share	—		0.73		0.49		—		—

Schedule of Gross Proceeds

During the period July 1, 2019 through August 2, 2019, the Company received additional net proceeds from the Class FA Private Offering, Public Offering and its distribution reinvestment plan of:

	Class FA Private Offering and Public Offering								Distribution Reinvestment Plan			Total
Share Class	Shares	Gross Proceeds		Up-front Selling Commissions and Dealer Manager Fees			Net Proceeds to Company		Shares	Gross Proceeds		Shares	Net Proceeds to Company		Average Net Proceeds per Share
Class FA	49,643	$	1,350,000	$	—		$	1,350,000	—	$	—	49,643	$	1,350,000	$	27.19
Class A	44,680	1,280,230		(85,699		)	1,194,531		1,063	28,437		45,743	1,222,968		26.74
Class T	8,091	228,000		(10,830		)	217,170		86	2,314		8,177	219,484		26.84
Class D	24,641	652,000		—			652,000		529	13,998		25,170	665,998		26.46
Class I	80,885	2,176,618		—			2,176,618		898	24,164		81,783	2,200,782		26.91
	207,940	$	5,686,848	$	(96,529	)	$	5,590,319	2,576	$	68,913	210,516	$	5,659,232	$	26.88

Acquisition

On August 1, 2019, the Company acquired a controlling interest of approximately 81% in Roundtables, pursuant to the Purchase Agreement described in Note 3. “Investments”. The Company made a $44.5 million investment consisting of approximately $32.4 million of common equity and approximately $12.1 million of senior secured notes. Under the Purchase Agreement, the Seller has the opportunity to earn up to an additional $2.0 million based on the achievement by Roundtables of certain performance metrics. The final purchase price is subject to this and other post-closing adjustments.

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Principal Business and Organization - Additional Information (Detail) - USD ($)			1 Months Ended	5 Months Ended	6 Months Ended
	Mar. 07, 2018	Feb. 07, 2018	Apr. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Organization And Business Activities [Line Items]
Sale of stock offering, minimum requirement	$ 5,000
Common stock, shares authorized (in shares)			4,000,000
Class FA
Organization And Business Activities [Line Items]
Sale of stock offering, minimum requirement			$ 2,000,000
Common stock, shares authorized (in shares)			7,400,000		7,400,000	3,400,000
Class FA | Private Placement
Organization And Business Activities [Line Items]
Minimum offering requirement in 2018 Private Offering		$ 80,000,000
Shares (in shares)		3,300,000		3,258,260
Gross proceeds from issuance of shares		$ 81,700,000		$ 81,456,500
Class FA | 2019 Private Offering [Member]
Organization And Business Activities [Line Items]
Number of shares offered in 2019 Private Offering			50,000,000
Shares (in shares)					112,850
Share price (usd per share)					$ 27.16
Gross proceeds from issuance of shares					$ 3,065,000
Class A
Organization And Business Activities [Line Items]
Common stock, shares authorized (in shares)			94,660,000		94,660,000	94,660,000
Class T
Organization And Business Activities [Line Items]
Common stock, shares authorized (in shares)			658,620,000		658,620,000	662,620,000
Class D
Organization And Business Activities [Line Items]
Common stock, shares authorized (in shares)			94,660,000		94,660,000	94,660,000
Class I
Organization And Business Activities [Line Items]
Common stock, shares authorized (in shares)			94,660,000		94,660,000	94,660,000
Minimum
Organization And Business Activities [Line Items]
Targeted business annual revenues for acquisition					$ 25,000,000
Maximum
Organization And Business Activities [Line Items]
Targeted business annual revenues for acquisition					$ 250,000,000

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Investments - Additional Information (Detail)	3 Months Ended	6 Months Ended	11 Months Ended
	Jun. 30, 2019 USD ($) Investment	Jun. 30, 2019 USD ($) Investment	Dec. 31, 2018 USD ($)	Aug. 01, 2019 USD ($)
Schedule of Investments [Line Items]
Fair Value Percentage of Net Assets	66.70%	66.70%	80.20%
Investment amount in merger	$ 76,774,339	$ 76,774,339	$ 76,774,339
Number of debt investments on non accrual status | Investment	0	0
Lawn Doctor
Schedule of Investments [Line Items]
Equity Method Investment, Ownership Percentage	62.50%	62.50%
Investment amount in merger	$ 30,500,000	$ 30,500,000
Polyform Products, Co.
Schedule of Investments [Line Items]
Percentage of equity interest acquired	87.10%	87.10%
Investment amount in merger	$ 15,600,000	$ 15,600,000
Senior secured debt - second lien
Schedule of Investments [Line Items]
Fair Value Percentage of Net Assets	11.80%	11.80%	14.60%
Investment amount in merger	$ 15,000,000	$ 15,000,000	$ 15,000,000
Interest rate		16.00%	16.00%
Senior secured debt - first lien
Schedule of Investments [Line Items]
Fair Value Percentage of Net Assets	12.30%	12.30%	15.20%
Investment amount in merger	$ 15,700,000	$ 15,700,000	$ 15,700,000
Interest rate	16.00%	16.00%	16.00%
Subsequent Event [Member] | Roundtables [Member]
Schedule of Investments [Line Items]
Equity Method Investment, Ownership Percentage				81.00%
Investment amount in merger				$ 44,500,000

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Investments - Summary of Investment Portfolio (Detail) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Investment Holdings [Line Items]
Cost	$ 76,774,339	$ 76,774,339
Fair Value	$ 84,951,000	$ 82,500,000
Fair Value Percentage of Investment Portfolio	100.00%	100.00%
Fair Value Percentage of Net Assets	66.70%	80.20%
Total Senior Secured Notes
Investment Holdings [Line Items]
Cost	$ 30,700,000	$ 30,700,000
Fair Value	$ 30,700,000	$ 30,700,000
Fair Value Percentage of Investment Portfolio	36.10%	37.20%
Fair Value Percentage of Net Assets	24.10%	29.80%
Senior secured debt - first lien
Investment Holdings [Line Items]
Cost	$ 15,700,000	$ 15,700,000
Fair Value	$ 15,700,000	$ 15,700,000
Fair Value Percentage of Investment Portfolio	18.50%	19.00%
Fair Value Percentage of Net Assets	12.30%	15.20%
Senior secured debt - second lien
Investment Holdings [Line Items]
Cost	$ 15,000,000	$ 15,000,000
Fair Value	$ 15,000,000	$ 15,000,000
Fair Value Percentage of Investment Portfolio	17.60%	18.20%
Fair Value Percentage of Net Assets	11.80%	14.60%
Equity
Investment Holdings [Line Items]
Cost	$ 46,074,339	$ 46,074,339
Fair Value	$ 54,251,000	$ 51,800,000
Fair Value Percentage of Investment Portfolio	63.90%	62.80%
Fair Value Percentage of Net Assets	42.60%	50.40%

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Investments - Industry and Geographic Dispersion of Investment Portfolio as Percentage of Total Fair Value of Investments (Detail)	Jun. 30, 2019	Dec. 31, 2018
Investment Holdings [Line Items]
Percentage of total fair value of investment	100.00%	100.00%
Hobby Goods and Supplies
Investment Holdings [Line Items]
Percentage of total fair value of investment	36.80%	37.90%
Commercial and Professional Services
Investment Holdings [Line Items]
Percentage of total fair value of investment	63.20%	62.10%
United States
Investment Holdings [Line Items]
Percentage of total fair value of investment	100.00%	100.00%

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Investments - Summary of Operating and Balance Sheet Data (Detail) - USD ($)	3 Months Ended		5 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Investment Company, Financial Highlights [Line Items]
Expenses	$ (1,282,161)	$ (1,163,660)	$ (1,632,247)	$ (2,137,634)
Lawn Doctor
Investment Company, Financial Highlights [Line Items]
Revenues	6,973,211	5,020,688	7,951,778	13,424,712
Expenses	(6,585,500)	(4,258,181)	(6,911,347)	(13,276,235)
Loss before income taxes	387,711	762,507	1,040,431	148,477
Income tax benefit	(103,053)	(57,200)	(46,267)	(39,465)
Consolidated net income	284,658	705,307	994,164	109,012
Net loss attributable to non-controlling interest	28,168	22,438	22,438	64,803
Net Income (loss)	312,826	727,745	1,016,602	173,815
Current assets	6,991,954			6,991,954	$ 6,347,092
Non-current assets	94,900,906			94,900,906	94,024,715
Current liabilities	4,653,642			4,653,642	4,342,064
Non-current liabilities	52,301,370			52,301,370	50,312,347
Non-controlling interest	(11,063)			(11,063)	(40,952)
Stockholders’ equity	44,948,911			44,948,911	45,758,348
Polyform Products, Co.
Investment Company, Financial Highlights [Line Items]
Revenues	3,815,425	4,064,855	6,482,448	8,221,289
Expenses	(4,094,317)	(4,315,901)	(7,310,524)	(8,491,355)
Loss before income taxes	(278,892)	(251,046)	(828,076)	(270,066)
Income tax benefit	(79,000)	(72,000)	(146,000)	(76,000)
Net Income (loss)	(199,892)	$ (179,046)	$ (682,076)	(194,066)
Current assets	5,807,621			5,807,621	5,481,783
Non-current assets	32,179,761			32,179,761	29,977,677
Current liabilities	4,105,170			4,105,170	963,823
Non-current liabilities	18,454,623			18,454,623	18,530,624
Stockholders’ equity	$ 15,427,589			$ 15,427,589	$ 15,965,013

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Fair Value of Financial Instruments - Investments Categorization in Fair Value Hierarchy (Detail) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 84,951,000	$ 82,500,000
Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	0	0
Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	0	0
Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	84,951,000	82,500,000
Total Senior Secured Notes
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	30,700,000	30,700,000
Total Senior Secured Notes | Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	0	0
Total Senior Secured Notes | Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	0	0
Total Senior Secured Notes | Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	30,700,000	30,700,000
Equity
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	54,251,000	51,800,000
Equity | Level 1
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	0	0
Equity | Level 2
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	0	0
Equity | Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 54,251,000	$ 51,800,000

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Fair Value of Financial Instruments - Additional Information (Detail) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Fair Value Disclosures [Abstract]
Investments, at fair value	$ 84,951,000	$ 82,500,000

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Fair Value of Financial Instruments - Unobservable Inputs Used in Fair Value Measurement of Investments (Detail)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investments, at fair value	$ 84,951,000	$ 82,500,000
Total Senior Secured Notes | Discount Rate | Minimum | Discounted cash flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	0.103	0.105
Total Senior Secured Notes | Discount Rate | Maximum | Discounted cash flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	0.138	0.135
Total Senior Secured Notes | Discount Rate | Weighted Average | Discounted cash flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	0.113	0.114
Total Senior Secured Notes | EBITDA Multiple | Minimum | Market comparables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	7.7	7.9
Total Senior Secured Notes | EBITDA Multiple | Minimum | Transaction method
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	8.0	8.0
Total Senior Secured Notes | EBITDA Multiple | Maximum | Market comparables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	12.1	12.2
Total Senior Secured Notes | EBITDA Multiple | Maximum | Transaction method
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	12.0	12.0
Total Senior Secured Notes | EBITDA Multiple | Weighted Average | Market comparables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	10.8	10.9
Total Senior Secured Notes | EBITDA Multiple | Weighted Average | Transaction method
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Debt securities	10.9	10.8
Equity | Discount Rate | Minimum | Discounted cash flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	0.103	0.105
Equity | Discount Rate | Maximum | Discounted cash flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	0.138	0.135
Equity | Discount Rate | Weighted Average | Discounted cash flow
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	0.113	0.114
Equity | EBITDA Multiple | Minimum | Market comparables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	7.7	7.9
Equity | EBITDA Multiple | Minimum | Transaction method
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	8.0	8.0
Equity | EBITDA Multiple | Maximum | Market comparables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	12.1	12.2
Equity | EBITDA Multiple | Maximum | Transaction method
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	12.0	12.0
Equity | EBITDA Multiple | Weighted Average | Market comparables
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	10.8	10.9
Equity | EBITDA Multiple | Weighted Average | Transaction method
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Measurement input, Equity Securities	10.9	10.8
Equity
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investments, at fair value	$ 54,251,000	$ 51,800,000
Total Senior Secured Notes
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investments, at fair value	$ 30,700,000	$ 30,700,000

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Fair Value of Financial Instruments - Reconciliations of Investments of Level 3 Inputs (Detail) - Level 3 - USD ($)	6 Months Ended	11 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements)		$ 76,774,339
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value balance, beginning	$ 82,500,000	0
Net change in unrealized appreciation	2,451,000	5,725,661
Fair value balance, ending	84,951,000	82,500,000
Total Senior Secured Notes
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements)		30,700,000
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value balance, beginning	30,700,000	0
Net change in unrealized appreciation	0	0
Fair value balance, ending	30,700,000	30,700,000
Equity
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements)		46,074,339
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value balance, beginning	51,800,000	0
Net change in unrealized appreciation	2,451,000	5,725,661
Fair value balance, ending	$ 54,251,000	$ 51,800,000

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Related Party Transactions - Additional Information (Detail) - USD ($)		3 Months Ended		5 Months Ended		6 Months Ended	11 Months Ended
	Feb. 07, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Distributions paid				$ 997,348		$ 2,218,737
Expense support		$ (610,447)	$ (144,146)	(187,358)		(826,520)
Due to related parties		688,590				688,590	$ 1,172,056
High water mark							$ 24.75
Organization and offering expenses
Related Party Transaction [Line Items]
Due to related parties		55,968				55,968	$ 66,894
Base management fees
Related Party Transaction [Line Items]
Due to related parties		89,595				89,595	78,967
Manager Sub Manager
Related Party Transaction [Line Items]
Expense support		(600,000)	$ (100,000)	(200,000)		$ 800,000	400,000
Percentage of return incentive fees payable						50.00%
Base management fees multiplier for non founder shares						2.00%
Base management fees multiplier for founder shares						1.00%
Annual preference return						7.00%
Annual preference return relates to non-founder shares						8.75%
Annual preference return relates to founder shares						7.777%
Total return incentive fee
Related Party Transaction [Line Items]
Due to related parties		496,660				$ 496,660	$ 1,015,228
Class FA Private Offering and Public Offering
Related Party Transaction [Line Items]
Shares (in shares)			43,070		3,301,330
Managing and Sub Manager
Related Party Transaction [Line Items]
Distributions paid		200,000	$ 200,000	200,000		400,000
Reimbursement obligation for organization and offering cost incurred		300,000				$ 300,000
Annual preference return relates to non-founder shares						8.75%
Annual preference return relates to founder shares						7.777%
Managing and Sub Manager | Base management fees
Related Party Transaction [Line Items]
Related party fees and expenses		265,128	194,974	283,536		$ 506,766
Managing and Sub Manager | Return incentive fees
Related Party Transaction [Line Items]
Related party fees and expenses		$ 496,660	$ 308,735	$ 308,735		$ 496,660
Managing and Sub Manager | Minimum
Related Party Transaction [Line Items]
Annual preference return						7.00%
Managing and Sub Manager | Private Placement
Related Party Transaction [Line Items]
Maximum percentage of reimbursement from private placement						1.00%
Managing and Sub Manager | Class FA Private Offering and Public Offering
Related Party Transaction [Line Items]
Maximum percentage of reimbursement from private placement						1.50%
Organization and offering costs incurred						$ 5,400,000
Managing and Sub Manager | 2019 Private Offering [Member]
Related Party Transaction [Line Items]
Organization and offering costs incurred						$ 100,000
Class FA
Related Party Transaction [Line Items]
High water mark						$ 26.65
Class FA | Private Placement
Related Party Transaction [Line Items]
Shares (in shares)	3,300,000			3,258,260
Minimum offering requirement in 2018 Private Offering	$ 80,000,000
Gross proceeds from issuance of shares	81,700,000			$ 81,456,500
Proceed from cash capital contribution	400,000
Class FA | 2019 Private Offering [Member]
Related Party Transaction [Line Items]
Shares (in shares)						112,850
Gross proceeds from issuance of shares						$ 3,065,000
Class FA | Manager
Related Party Transaction [Line Items]
Proceed from cash capital contribution	$ 2,400,000
Share issued	96,000
Class FA | Board of Directors Chairman
Related Party Transaction [Line Items]
Proceed from cash capital contribution	$ 9,500,000
Share issued	380,000
Class FA | Other Individuals
Related Party Transaction [Line Items]
Share issued	15,000
Class A
Related Party Transaction [Line Items]
High water mark						$ 26.44
Class A | Private Placement
Related Party Transaction [Line Items]
Selling commission		6.00%				6.00%
Class A | Class FA Private Offering and Public Offering
Related Party Transaction [Line Items]
Shares (in shares)				1,824		271,104
Gross proceeds from issuance of shares				$ 50,000		$ 7,763,365
Dealer manager fee		2.50%				2.50%
Class T
Related Party Transaction [Line Items]
High water mark						$ 26.54
Class T | Private Placement
Related Party Transaction [Line Items]
Selling commission		3.00%				3.00%
Class T | Class FA Private Offering and Public Offering
Related Party Transaction [Line Items]
Shares (in shares)				1,704		37,140
Gross proceeds from issuance of shares				$ 45,000		$ 1,035,350
Dealer manager fee		1.75%				1.75%
Annual distribution and fee, percentage		1.00%				1.00%
Class D
Related Party Transaction [Line Items]
High water mark						$ 26.23
Class D | Class FA Private Offering and Public Offering
Related Party Transaction [Line Items]
Shares (in shares)				6,730		79,791
Gross proceeds from issuance of shares				$ 170,000		$ 2,100,000
Annual distribution and fee, percentage		0.50%				0.50%
Class I
Related Party Transaction [Line Items]
High water mark						$ 26.55
Class I | Class FA Private Offering and Public Offering
Related Party Transaction [Line Items]
Shares (in shares)				32,812		344,389
Gross proceeds from issuance of shares				$ 825,000		$ 9,154,902
Annual Preference Return Less than or Equal to 8.75% or the Non-founder breakpoint | Manager Sub Manager
Related Party Transaction [Line Items]
Percentage of return incentive fees payable						20.00%
Annual Preference Return Less Than 7.777% or Founder breakpoint | Manager Sub Manager
Related Party Transaction [Line Items]
Percentage of return incentive fees payable						10.00%

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Related Party Transactions - Schedule of Related Party Transactions (Detail) - USD ($)	3 Months Ended		5 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Commissions | Managing Dealer
Related Party Transaction [Line Items]
Related party fees and expenses	$ 133,905	$ 4,350	$ 4,350	$ 419,582
Dealer Manager Fees | Managing Dealer
Related Party Transaction [Line Items]
Related party fees and expenses	73,569	2,038	2,038	212,203
Annual distribution and shareholder servicing fees | Managing Dealer
Related Party Transaction [Line Items]
Related party fees and expenses	9,048	52	52	15,817
Organization and offering expenses | Managing and Sub Manager
Related Party Transaction [Line Items]
Related party fees and expenses	141,445	18,107	725,153	312,712
Base management fees | Managing and Sub Manager
Related Party Transaction [Line Items]
Related party fees and expenses	265,128	194,974	283,536	506,766
Return incentive fees | Managing and Sub Manager
Related Party Transaction [Line Items]
Related party fees and expenses	496,660	308,735	308,735	496,660
Expense support | Managing and Sub Manager
Related Party Transaction [Line Items]
Related party fees and expenses	(610,447)	(144,146)	(187,358)	(826,520)
Reimbursement of Third Party Operating Expenses | Manager
Related Party Transaction [Line Items]
Related party fees and expenses	$ 43,086	$ 23,657	$ 43,551	$ 54,950

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Related Party Transactions - Amounts Due from (to) Related Parties (Detail) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Due from related parties	$ 826,520	$ 389,774
Due to related parties	(688,590)	(1,172,056)
Net due to related parties	137,930	(782,282)
Expense Support
Related Party Transaction [Line Items]
Due from related parties	826,520	389,774
Organization and offering expenses
Related Party Transaction [Line Items]
Due to related parties	(55,968)	(66,894)
Base management fees
Related Party Transaction [Line Items]
Due to related parties	(89,595)	(78,967)
Total return incentive fee
Related Party Transaction [Line Items]
Due to related parties	(496,660)	(1,015,228)
Reimbursement of third-party operating expenses
Related Party Transaction [Line Items]
Due to related parties	(43,086)	(9,101)
Annual distribution and shareholder servicing fees
Related Party Transaction [Line Items]
Due to related parties	$ (3,281)	$ (1,866)

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Distributions - Declared (Details) - USD ($)	1 Months Ended		3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 31, 2019	Jul. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions Declared (1)					$ 1,329,431	$ 2,596,230
Distributions Reinvested	$ 26,789				22,066	313,906
Cash Distributions Net of Distributions Reinvested					1,307,365	2,282,324
Investment Company, Expense Offset Arrangement			$ 610,447	$ 144,146	187,358	826,520
First Quarter 2019 [Member] [Domain]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions Declared (1)						1,235,971
Distributions Reinvested						121,011
Cash Distributions Net of Distributions Reinvested						1,114,960
First Quarter(5)
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions Declared (1)					302,841
Distributions Reinvested		$ 7,208			2,299
Cash Distributions Net of Distributions Reinvested					300,542
Second Quarter 2019 [Member] [Domain]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions Declared (1)						1,360,259
Distributions Reinvested						192,895
Cash Distributions Net of Distributions Reinvested						1,167,364
Second Quarter(6)
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions Declared (1)					1,026,590
Distributions Reinvested					19,767
Cash Distributions Net of Distributions Reinvested					1,006,823
Net Investment Income
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Investment Company, Expense Offset Arrangement					$ 187,358	$ 826,520

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Distributions - Distribution Per Class (Details) - USD ($)			1 Months Ended			3 Months Ended	5 Months Ended	6 Months Ended
	Aug. 29, 2019	Mar. 07, 2018	Jul. 31, 2019	Jun. 30, 2019	Jan. 31, 2019	Jun. 26, 2018	Jun. 30, 2018	Jun. 30, 2019
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions reinvested					$ 26,789		$ 22,066	$ 313,906
March 7, 2018 | Class FA
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)		$ 0.020604		$ 0.104167				$ 0.104167
March 7, 2018 | Class A
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)		0.020604		0.104167				0.104167
March 7, 2018 | Class T
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)		0.016484		0.083333				0.083333
March 7, 2018 | Class D
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)		0.018544		0.09375				0.09375
March 7, 2018 | Class I
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)		$ 0.020604		$ 0.104167				$ 0.104167
March 13, 2018 - June 26, 2018 (16 record dates) | Class FA
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)						$ 0.024038
March 13, 2018 - June 26, 2018 (16 record dates) | Class A
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)						0.024038
March 13, 2018 - June 26, 2018 (16 record dates) | Class T
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)						0.019231
March 13, 2018 - June 26, 2018 (16 record dates) | Class D
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)						0.021635
March 13, 2018 - June 26, 2018 (16 record dates) | Class I
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)						$ 0.024038
Subsequent Event [Member]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distributions reinvested			$ 68,914
Subsequent Event [Member] | Class FA
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	$ 0.104167		$ 0.104167
Subsequent Event [Member] | Class A
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	0.104167		0.104167
Subsequent Event [Member] | Class T
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	0.083333		0.083333
Subsequent Event [Member] | Class D
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	0.09375		0.093750
Subsequent Event [Member] | Class I
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	$ 0.104167		$ 0.014167

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Distributions - Declared on GAAP Basis (Detail) - USD ($)	3 Months Ended		5 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount	$ 1,360,259	$ 1,026,590	$ 1,329,431	$ 1,329,431	$ 2,596,230
% of Cash Distributions Declared			100.00%		100.00%
Investment Company, Expense Offset Arrangement	$ 610,447	$ 144,146	$ 187,358		$ 826,520
Net Investment Income
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount			$ 1,307,313		$ 2,301,835
% of Cash Distributions Declared			98.30%		88.70%
Investment Company, Expense Offset Arrangement			$ 187,358		$ 826,520
Distributions in excess of net investment income
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount			$ 22,118		$ 294,395
% of Cash Distributions Declared			1.66372%		11.30%
Class FA
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount			$ 1,323,527		$ 2,041,416
Class A
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount			126		198,538
Class T
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount			149		25,498
Class D
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount			146		79,364
Class I
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Amount			$ 5,483		$ 251,414

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Distributions - Additional Information (Detail) - Distribution Date 1 - $ / shares		1 Months Ended	6 Months Ended
	Mar. 07, 2018	Jun. 30, 2019	Jun. 30, 2019
Class FA
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	$ 0.020604	$ 0.104167	$ 0.104167
Class A
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	0.020604	0.104167	0.104167
Class T
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	0.016484	0.083333	0.083333
Class D
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	0.018544	0.09375	0.09375
Class I
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Declared distribution (in dollars per share)	$ 0.020604	$ 0.104167	$ 0.104167

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Capital Transactions -Additional Information (Detail) - USD ($)		1 Months Ended	3 Months Ended		5 Months Ended		6 Months Ended
	Mar. 07, 2018	Apr. 30, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Investment Company, Capital Share Transactions [Line Items]
Shares Issued, Including Reinvestments					3,301,921		855,564
Average Net Proceeds per Share			$ 26.60	$ 25.00	$ 25.00	$ 25.00	$ 26.60
Shares offered	$ 1,000,000,000
Sale of stock offering, minimum requirement	$ 5,000
Issuance of common shares through distribution reinvestment plan			$ 170,577	$ 14,858	$ 14,858	$ 14,858	$ 271,781
Net Proceeds to Company							$ 22,758,613
Stock Issued During Period, Shares, Dividend Reinvestment Plan					591
Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares (in shares)				43,070		3,301,330
2019 Private Offering and Public Offering [Member]
Investment Company, Capital Share Transactions [Line Items]
Shares (in shares)							845,274
Gross Proceeds							$ 23,118,617
Up-front Selling Commissions and Dealer Manager Fees							(631,785)
Net Proceeds to Company							$ 22,486,832
Stock Issued During Period, Shares, Dividend Reinvestment Plan							10,290
Distribution Reinvestment Plan [Member]
Investment Company, Capital Share Transactions [Line Items]
Shares offered			100,000,000
Issuance of common shares through distribution reinvestment plan			$ 6	$ 1		$ 1	$ 10
Stock Issued During Period, Shares, Dividend Reinvestment Plan			6,449	591		591	10,290
Class FA
Investment Company, Capital Share Transactions [Line Items]
Sale of stock offering, minimum requirement		$ 2,000,000
Class FA | 2019 Private Offering [Member]
Investment Company, Capital Share Transactions [Line Items]
Shares Issued, Including Reinvestments							112,850
Shares (in shares)							112,850
Gross Proceeds							$ 3,065,000
Up-front Selling Commissions and Dealer Manager Fees							$ 0
Average Net Proceeds per Share			$ 27.16				$ 27.16
Share price (usd per share)			27.16				$ 27.16
Issuance of common shares through distribution reinvestment plan							$ 0
Net Proceeds to Company							3,065,000
Net Proceeds to Company							$ 3,065,000
Stock Issued During Period, Shares, Dividend Reinvestment Plan							0
Class A | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued, Including Reinvestments					2,406		275,740
Shares (in shares)					1,824		271,104
Gross Proceeds					$ 50,000		$ 7,763,365
Up-front Selling Commissions and Dealer Manager Fees					$ 4,250		$ (582,606)
Average Net Proceeds per Share			26.49	$ 25.09	$ 25.09	$ 25.09	$ 26.49
Share price (usd per share)			29.23				$ 29.23
Issuance of common shares through distribution reinvestment plan					$ 14,620		$ 122,579
Net Proceeds to Company					60,370		7,303,338
Net Proceeds to Company					$ 45,750		$ 7,180,759
Stock Issued During Period, Shares, Dividend Reinvestment Plan					582		4,636
Class T | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued, Including Reinvestments					1,704		37,361
Shares (in shares)					1,704		37,140
Gross Proceeds					$ 45,000		$ 1,035,350
Up-front Selling Commissions and Dealer Manager Fees					$ 2,138		$ (49,179)
Average Net Proceeds per Share			26.55	25.15	$ 25.15	25.15	$ 26.55
Share price (usd per share)			28.2				$ 28.2
Issuance of common shares through distribution reinvestment plan					$ 0		$ 5,900
Net Proceeds to Company					42,862		992,071
Net Proceeds to Company					$ 42,862		$ 986,171
Stock Issued During Period, Shares, Dividend Reinvestment Plan					0		221
Class D | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued, Including Reinvestments					6,730		82,444
Shares (in shares)					6,730		79,791
Gross Proceeds					$ 170,000		$ 2,100,000
Up-front Selling Commissions and Dealer Manager Fees					$ 0		$ 0
Average Net Proceeds per Share			26.31	25.26	$ 25.26	25.26	$ 26.31
Share price (usd per share)			26.45				$ 26.45
Issuance of common shares through distribution reinvestment plan					$ 0		$ 69,442
Net Proceeds to Company					170,000		2,169,442
Net Proceeds to Company					$ 170,000		$ 2,100,000
Stock Issued During Period, Shares, Dividend Reinvestment Plan					0		2,653
Class I | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued, Including Reinvestments					32,821		347,169
Shares (in shares)					32,812		344,389
Gross Proceeds					$ 825,000		$ 9,154,902
Up-front Selling Commissions and Dealer Manager Fees					$ 0		$ 0
Average Net Proceeds per Share			26.58	$ 25.14	$ 25.14	$ 25.14	$ 26.58
Share price (usd per share)			$ 26.91				$ 26.91
Issuance of common shares through distribution reinvestment plan					$ 238		$ 73,860
Net Proceeds to Company					825,238		9,228,762
Net Proceeds to Company					$ 825,000		$ 9,154,902
Stock Issued During Period, Shares, Dividend Reinvestment Plan					9		2,780

XML

Capital Transactions - Summary of Shares Issued and Proceeds Received in Connection with Private Placement (Detail) - USD ($)		3 Months Ended		5 Months Ended		6 Months Ended
	Feb. 07, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Investment Company, Capital Share Transactions [Line Items]
Stock Issued During Period, Shares, Dividend Reinvestment Plan				591
Distributions reinvested, proceeds to company		$ 170,577	$ 14,858	$ 14,858	$ 14,858	$ 271,781
Shares Issued, Including Reinvestments				3,301,921		855,564
Net Proceeds to Company						$ 22,758,613
Average Net Proceeds per Share		$ 26.60	$ 25.00	$ 25.00	$ 25.00	$ 26.60
Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued			43,070		3,301,330
Public Offering and Private Placement
Investment Company, Capital Share Transactions [Line Items]
Shares Issued		445,802		3,301,330		845,274
Gross Proceeds				$ 82,546,500
Up-front Selling Commissions and Dealer Manager Fees				6,388
Net Proceeds to Company				82,540,112
Net Proceeds to Company				$ 82,554,970
Distribution Reinvestment Plan [Member]
Investment Company, Capital Share Transactions [Line Items]
Stock Issued During Period, Shares, Dividend Reinvestment Plan		6,449	591		591	10,290
Distributions reinvested, proceeds to company		$ 6	$ 1		$ 1	$ 10
Class FA | Private Placement
Investment Company, Capital Share Transactions [Line Items]
Shares Issued	3,300,000			3,258,260
Gross Proceeds	$ 81,700,000			$ 81,456,500
Up-front Selling Commissions and Dealer Manager Fees				0
Net Proceeds to Company				$ 81,456,500
Stock Issued During Period, Shares, Dividend Reinvestment Plan				0
Distributions reinvested, proceeds to company				$ 0
Shares Issued, Including Reinvestments				3,258,260
Net Proceeds to Company				$ 81,456,500
Average Net Proceeds per Share			$ 25.00	$ 25.00	$ 25.00
Class A | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued				1,824		271,104
Gross Proceeds				$ 50,000		$ 7,763,365
Up-front Selling Commissions and Dealer Manager Fees				4,250		(582,606)
Net Proceeds to Company				$ 45,750		$ 7,180,759
Stock Issued During Period, Shares, Dividend Reinvestment Plan				582		4,636
Distributions reinvested, proceeds to company				$ 14,620		$ 122,579
Shares Issued, Including Reinvestments				2,406		275,740
Net Proceeds to Company				$ 60,370		$ 7,303,338
Average Net Proceeds per Share		$ 26.49	25.09	$ 25.09	25.09	$ 26.49
Class T | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued				1,704		37,140
Gross Proceeds				$ 45,000		$ 1,035,350
Up-front Selling Commissions and Dealer Manager Fees				2,138		(49,179)
Net Proceeds to Company				$ 42,862		$ 986,171
Stock Issued During Period, Shares, Dividend Reinvestment Plan				0		221
Distributions reinvested, proceeds to company				$ 0		$ 5,900
Shares Issued, Including Reinvestments				1,704		37,361
Net Proceeds to Company				$ 42,862		$ 992,071
Average Net Proceeds per Share		26.55	25.15	$ 25.15	25.15	$ 26.55
Class D | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued				6,730		79,791
Gross Proceeds				$ 170,000		$ 2,100,000
Up-front Selling Commissions and Dealer Manager Fees				0		0
Net Proceeds to Company				$ 170,000		$ 2,100,000
Stock Issued During Period, Shares, Dividend Reinvestment Plan				0		2,653
Distributions reinvested, proceeds to company				$ 0		$ 69,442
Shares Issued, Including Reinvestments				6,730		82,444
Net Proceeds to Company				$ 170,000		$ 2,169,442
Average Net Proceeds per Share		26.31	25.26	$ 25.26	25.26	$ 26.31
Class I | Class FA Private Offering and Public Offering
Investment Company, Capital Share Transactions [Line Items]
Shares Issued				32,812		344,389
Gross Proceeds				$ 825,000		$ 9,154,902
Up-front Selling Commissions and Dealer Manager Fees				0		0
Net Proceeds to Company				$ 825,000		$ 9,154,902
Stock Issued During Period, Shares, Dividend Reinvestment Plan				9		2,780
Distributions reinvested, proceeds to company				$ 238		$ 73,860
Shares Issued, Including Reinvestments				32,821		347,169
Net Proceeds to Company				$ 825,238		$ 9,228,762
Average Net Proceeds per Share		$ 26.58	$ 25.14	$ 25.14	$ 25.14	$ 26.58

XML

Capital Transactions Capital Transactions - Summary of Shares Repurchased (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)		11,389
Total consideration	$ 308,038	$ 308,038
Price paid per share (in dollars per share)		$ 27.05
Class I
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)		4,745
Total consideration		$ 127,680
Price paid per share (in dollars per share)		$ 26.91
Class FA
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)		6,400
Total consideration		$ 173,824
Price paid per share (in dollars per share)		$ 27.16
Class A
Equity, Class of Treasury Stock [Line Items]
Shares repurchased (in shares)		244
Total consideration		$ 6,534
Price paid per share (in dollars per share)		$ 26.75

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Borrowings (Details) - Line of Credit	1 Months Ended
	Jun. 30, 2019 USD ($)
Line of Credit Facility [Line Items]
Line of credit amount	$ 20,000,000
Fee required on each borrowing	0.40%
Maximum fee	$ 80,000
LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.75%

XML

Concentrations of Risk (Details) - Investment Risk	6 Months Ended
	Jun. 30, 2019
Lawn Doctor | Percentage of Total Investment Income
Concentration Risk [Line Items]
Concentration risk	43.80%
Lawn Doctor | Percentage of Total Assets
Concentration Risk [Line Items]
Concentration risk	41.70%
Polyform Products, Co. | Percentage of Total Investment Income
Concentration Risk [Line Items]
Concentration risk	47.00%
Polyform Products, Co. | Percentage of Total Assets
Concentration Risk [Line Items]
Concentration risk	24.30%

XML

Financial Highlights - Schedule of Financial Highlights (Detail) - USD ($)	3 Months Ended		5 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Feb. 07, 2018
OPERATING PERFORMANCE PER SHARE
Net investment income (usd per share)	$ 0.27	$ 0.31	$ 0.40		$ 0.55
Net assets at end of period	$ 127,436,990	$ 84,185,725	$ 84,185,725	$ 84,185,725	$ 127,436,990	$ 113,679,482	$ 102,829,810	$ 82,180,949	$ 200,000
Investment Company, Dividend Distribution	$ 1,360,259	$ 1,026,590	$ 1,329,431	$ 1,329,431	$ 2,596,230
Class FA
Investment Company, Financial Highlights [Line Items]
Investment Company, Total Return Incentive Fees Covered By Expense Support			58.00%		100.00%
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period (usd per shares)				$ 25.00	$ 26.65
Net investment income, before expense support (usd per shares)			$ 0.34		0.44
Expense support (usd per shares)			0.06		0.17
Net investment income (usd per share)			0.40		0.61
Net realized and unrealized gains (usd per shares)			0.44		0.56
Net increase resulting from investment operations (usd per shares)			0.84		1.17
Distributions from net investment income (usd per share)			(0.41)		(0.63)
Net Decrease Resulting From Distributions to Shareholders, Per Share (usd per shares)			(0.41)		(0.63)
Net Asset Value, End of Period (usd per shares)	$ 27.19	$ 25.43	$ 25.43	$ 25.43	$ 27.19
Net assets at end of period	$ 91,718,198	$ 83,076,581	$ 83,076,581	$ 83,076,581	$ 91,718,198		87,061,758
Average net assets	$ 87,542,845	$ 82,088,518	$ 82,088,518	$ 82,088,518	$ 87,542,845
Shares outstanding end of period (in shares)	3,372,710	3,266,260	3,266,260	3,266,260	3,372,710
Investment Company, Dividend Distribution			$ 1,323,527		$ 2,041,416
Total investment return based on net asset value before total return incentive fee			3.52%		4.37%
Investment Company, Total Return after Incentive Fees			3.36%		4.37%
Investment Company Operating Expenses Before Total Return Incentive Fee and Expense Support			1.58%		1.06%
Ratios to average net assets:
Total operating expenses before expense support			1.96%		1.50%
Net investment income before total return incentive fee(9)			1.74%		0.84%
Investment Company, Net Investment Income Before Incentive Fees			1.74%		2.28%
Net investment income			1.59%		2.28%
Class A
Investment Company, Financial Highlights [Line Items]
Investment Company, Total Return Incentive Fees Covered By Expense Support			100.00%		100.00%
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period (usd per shares)				$ 25.00	$ 26.44
Net investment income, before expense support (usd per shares)			$ (2.32)		0.06
Expense support (usd per shares)			2.43		0.26
Net investment income (usd per share)			0.11		0.32
Net realized and unrealized gains (usd per shares)			0.55		0.61
Net increase resulting from investment operations (usd per shares)			0.66		0.93
Distributions from net investment income (usd per share)			(0.29)		(0.63)
Net Decrease Resulting From Distributions to Shareholders, Per Share (usd per shares)			(0.29)		(0.63)
Net Asset Value, End of Period (usd per shares)	$ 26.74	$ 25.37	$ 25.37	$ 25.37	$ 26.74
Net assets at end of period	$ 12,509,598	$ 61,052	$ 61,052	$ 61,052	$ 12,509,598		5,086,607
Average net assets	$ 8,502,674	$ 10,152	$ 10,152	$ 10,152	$ 8,502,674
Shares outstanding end of period (in shares)	467,884	2,406	2,406	2,406	467,884
Investment Company, Dividend Distribution			$ 126		$ 198,538
Total investment return based on net asset value before total return incentive fee			2.64%		3.55%
Investment Company, Total Return after Incentive Fees			2.64%		3.55%
Investment Company Operating Expenses Before Total Return Incentive Fee and Expense Support			16.17%		3.05%
Ratios to average net assets:
Total operating expenses before expense support			18.13%		3.42%
Net investment income before total return incentive fee(9)			8.50%		2.43%
Investment Company, Net Investment Income Before Incentive Fees			0.43%		1.22%
Net investment income			0.43%		1.22%
Class T
Investment Company, Financial Highlights [Line Items]
Investment Company, Total Return Incentive Fees Covered By Expense Support			100.00%		100.00%
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period (usd per shares)				$ 25.16	$ 26.54
Net investment income, before expense support (usd per shares)			$ (0.24)		0.07
Expense support (usd per shares)			0.31		0.14
Net investment income (usd per share)			0.07		0.21
Net realized and unrealized gains (usd per shares)			0.29		0.59
Net increase resulting from investment operations (usd per shares)			0.36		0.80
Distributions from net investment income (usd per share)			(0.10)		(0.50)
Net Decrease Resulting From Distributions to Shareholders, Per Share (usd per shares)			(0.10)		(0.50)
Net Asset Value, End of Period (usd per shares)	$ 26.84	$ 25.42	$ 25.42	$ 25.42	$ 26.84
Net assets at end of period	$ 1,846,952	$ 43,307	$ 43,307	$ 43,307	$ 1,846,952		834,576
Average net assets	$ 1,365,893	$ 40,449	$ 40,449	$ 40,449	$ 1,365,893
Shares outstanding end of period (in shares)	68,813	1,704	1,704	1,704	68,813
Investment Company, Dividend Distribution			$ 149		$ 25,498
Total investment return based on net asset value before total return incentive fee			1.43%		3.05%
Investment Company, Total Return after Incentive Fees			1.43%		3.05%
Investment Company Operating Expenses Before Total Return Incentive Fee and Expense Support			2.61%		3.29%
Ratios to average net assets:
Total operating expenses before expense support			2.98%		3.29%
Net investment income before total return incentive fee(9)			1.78%		2.75%
Investment Company, Net Investment Income Before Incentive Fees			0.27%		0.79%
Net investment income			0.27%		0.79%
Class D
Investment Company, Financial Highlights [Line Items]
Investment Company, Total Return Incentive Fees Covered By Expense Support			100.00%		100.00%
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period (usd per shares)				$ 25.26	$ 26.23
Net investment income, before expense support (usd per shares)			$ (0.12)		0.22
Expense support (usd per shares)			0.12		0.00
Net investment income (usd per share)			0.00		0.22
Net realized and unrealized gains (usd per shares)			0.17		0.57
Net increase resulting from investment operations (usd per shares)			0.17		0.79
Distributions from net investment income (usd per share)			(0.02)		(0.56)
Net Decrease Resulting From Distributions to Shareholders, Per Share (usd per shares)			(0.02)		(0.56)
Net Asset Value, End of Period (usd per shares)	$ 26.46	$ 25.41	$ 25.41	$ 25.41	$ 26.46
Net assets at end of period	$ 5,433,648	$ 171,018	$ 171,018	$ 171,018	$ 5,433,648		3,222,865
Average net assets	$ 3,721,724	$ 170,204	$ 170,204	$ 170,204	$ 3,721,724
Shares outstanding end of period (in shares)	205,333	6,730	6,730	6,730	205,333
Investment Company, Dividend Distribution			$ 146		$ 79,364
Total investment return based on net asset value before total return incentive fee			0.68%		3.06%
Investment Company, Total Return after Incentive Fees			0.68%		3.06%
Investment Company Operating Expenses Before Total Return Incentive Fee and Expense Support			1.70%		2.67%
Ratios to average net assets:
Total operating expenses before expense support			1.87%		2.67%
Net investment income before total return incentive fee(9)			1.41%		2.67%
Investment Company, Net Investment Income Before Incentive Fees			(0.01%)		0.85%
Net investment income			(0.01%)		0.85%
Class I
Investment Company, Financial Highlights [Line Items]
Investment Company, Total Return Incentive Fees Covered By Expense Support			100.00%		100.00%
OPERATING PERFORMANCE PER SHARE
Net Asset Value, Beginning of Period (usd per shares)				$ 25.00	$ 26.55
Net investment income, before expense support (usd per shares)			$ (0.17)		(0.01)
Expense support (usd per shares)			0.38		0.40
Net investment income (usd per share)			0.21		0.39
Net realized and unrealized gains (usd per shares)			0.45		0.60
Net increase resulting from investment operations (usd per shares)			0.66		0.99
Distributions from net investment income (usd per share)			(0.26)		(0.63)
Net Decrease Resulting From Distributions to Shareholders, Per Share (usd per shares)			(0.26)		(0.63)
Net Asset Value, End of Period (usd per shares)	$ 26.91	$ 25.40	$ 25.40	$ 25.40	$ 26.91
Net assets at end of period	$ 15,928,594	$ 833,767	$ 833,767	$ 833,767	$ 15,928,594		$ 6,624,004
Average net assets	$ 10,816,273	$ 517,198	$ 517,198	$ 517,198	$ 10,816,273
Shares outstanding end of period (in shares)	591,950	32,821	32,821	32,821	591,950
Investment Company, Dividend Distribution			$ 5,483		$ 251,414
Total investment return based on net asset value before total return incentive fee			2.67%		3.76%
Investment Company, Total Return after Incentive Fees			2.67%		3.76%
Investment Company Operating Expenses Before Total Return Incentive Fee and Expense Support			3.35%		2.84%
Ratios to average net assets:
Total operating expenses before expense support			4.03%		3.63%
Net investment income before total return incentive fee(9)			2.52%		2.13%
Investment Company, Net Investment Income Before Incentive Fees			0.83%		1.47%
Net investment income			0.83%		1.47%

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Subsequent Events - Additional Information (Details) - USD ($)			1 Months Ended
	Aug. 29, 2019	Mar. 07, 2018	Aug. 02, 2019	Jul. 31, 2019	Apr. 30, 2019	Jul. 26, 2019	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Subsequent Event [Line Items]
Common stock, shares authorized (in shares)					4,000,000
Sale of stock offering, minimum requirement		$ 5,000
Average Net Proceeds per Share							$ 26.60		$ 25.00
Class FA
Subsequent Event [Line Items]
Common stock, shares authorized (in shares)					7,400,000		7,400,000	3,400,000
Sale of stock offering, minimum requirement					$ 2,000,000
Class A
Subsequent Event [Line Items]
Common stock, shares authorized (in shares)					94,660,000		94,660,000	94,660,000
Class T
Subsequent Event [Line Items]
Common stock, shares authorized (in shares)					658,620,000		658,620,000	662,620,000
Class D
Subsequent Event [Line Items]
Common stock, shares authorized (in shares)					94,660,000		94,660,000	94,660,000
Class I
Subsequent Event [Line Items]
Common stock, shares authorized (in shares)					94,660,000		94,660,000	94,660,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Average Net Proceeds per Share			$ 26.88
Subsequent Event [Member] | Class FA
Subsequent Event [Line Items]
Declared distribution (in dollars per share)	$ 0.104167			$ 0.104167
Average Net Proceeds per Share			27.19			$ 27.19
Subsequent Event [Member] | Class A
Subsequent Event [Line Items]
Declared distribution (in dollars per share)	0.104167			0.104167
Average Net Proceeds per Share			26.74			29.22
Subsequent Event [Member] | Class T
Subsequent Event [Line Items]
Declared distribution (in dollars per share)	0.083333			0.083333
Average Net Proceeds per Share			26.84			28.18
Subsequent Event [Member] | Class D
Subsequent Event [Line Items]
Declared distribution (in dollars per share)	0.09375			0.093750
Average Net Proceeds per Share			26.46			26.46
Subsequent Event [Member] | Class I
Subsequent Event [Line Items]
Declared distribution (in dollars per share)	$ 0.104167			$ 0.014167
Average Net Proceeds per Share			$ 26.91			$ 26.91
2019 Private Offering [Member] | Class FA
Subsequent Event [Line Items]
Number of shares offered in 2019 Private Offering					50,000,000
Average Net Proceeds per Share							$ 27.16
2019 Private Offering [Member] | Subsequent Event [Member] | Class FA
Subsequent Event [Line Items]
Selling commission				5.50%
Placement Agent Fee on Share Sold Percentage			3.00%

XML

Subsequent Events - Summary of New Public Offering Prices and Applicable Upfront Selling Commissions and Dealer Manager Fees (Detail) - $ / shares		1 Months Ended	3 Months Ended	5 Months Ended		6 Months Ended
	Jul. 26, 2019	Aug. 02, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019
Subsequent Event [Line Items]
Public Offering Price, Per Share (in dollars per share)			$ 25.00	$ 25.00	$ 25.00	$ 26.60
Subsequent Event
Subsequent Event [Line Items]
Public Offering Price, Per Share (in dollars per share)		$ 26.88
Subsequent Event | Class FA
Subsequent Event [Line Items]
Public Offering Price, Per Share (in dollars per share)	$ 27.19	27.19
Selling Commissions, Per Share (in dollars per share)	0
Dealer Manager Fees, Per Share (in dollars per share)	0
Subsequent Event | Class A
Subsequent Event [Line Items]
Public Offering Price, Per Share (in dollars per share)	29.22	26.74
Selling Commissions, Per Share (in dollars per share)	1.75
Dealer Manager Fees, Per Share (in dollars per share)	0.73
Subsequent Event | Class T
Subsequent Event [Line Items]
Public Offering Price, Per Share (in dollars per share)	28.18	26.84
Selling Commissions, Per Share (in dollars per share)	0.85
Dealer Manager Fees, Per Share (in dollars per share)	0.49
Subsequent Event | Class D
Subsequent Event [Line Items]
Public Offering Price, Per Share (in dollars per share)	26.46	26.46
Selling Commissions, Per Share (in dollars per share)	0
Dealer Manager Fees, Per Share (in dollars per share)	0
Subsequent Event | Class I
Subsequent Event [Line Items]
Public Offering Price, Per Share (in dollars per share)	26.91	$ 26.91
Selling Commissions, Per Share (in dollars per share)	0
Dealer Manager Fees, Per Share (in dollars per share)	$ 0
Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares Issued			43,070		3,301,330
Class FA Private Offering and Public Offering | Class A
Subsequent Event [Line Items]
Shares Issued				1,824		271,104
Public Offering Price, Per Share (in dollars per share)			$ 25.09	$ 25.09	$ 25.09	$ 26.49
Class FA Private Offering and Public Offering | Class T
Subsequent Event [Line Items]
Shares Issued				1,704		37,140
Public Offering Price, Per Share (in dollars per share)			25.15	$ 25.15	25.15	$ 26.55
Class FA Private Offering and Public Offering | Class D
Subsequent Event [Line Items]
Shares Issued				6,730		79,791
Public Offering Price, Per Share (in dollars per share)			25.26	$ 25.26	25.26	$ 26.31
Class FA Private Offering and Public Offering | Class I
Subsequent Event [Line Items]
Shares Issued				32,812		344,389
Public Offering Price, Per Share (in dollars per share)			$ 25.14	$ 25.14	$ 25.14	$ 26.58
Class FA Private Offering and Public Offering | Subsequent Event | Class A
Subsequent Event [Line Items]
Shares Issued		44,680
Class FA Private Offering and Public Offering | Subsequent Event | Class T
Subsequent Event [Line Items]
Shares Issued		8,091
Class FA Private Offering and Public Offering | Subsequent Event | Class D
Subsequent Event [Line Items]
Shares Issued		24,641
Class FA Private Offering and Public Offering | Subsequent Event | Class I
Subsequent Event [Line Items]
Shares Issued		80,885

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Subsequent Events - Gross Proceeds (Detail) - USD ($)	1 Months Ended	3 Months Ended	5 Months Ended		6 Months Ended
	Aug. 02, 2019	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2019	Jul. 26, 2019
Subsequent Event [Line Items]
Shares (in shares)			3,301,921		855,564
Net Proceeds to Company					$ 22,758,613
Average Net Proceeds Per Share (in dollars per share)		$ 25.00	$ 25.00	$ 25.00	$ 26.60
Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)		43,070		3,301,330
2019 Private Offering and Public Offering [Member]
Subsequent Event [Line Items]
Shares (in shares)					845,274
Proceeds from sale of new shares					$ 23,118,617
Up-front Selling Commissions and Dealer Manager Fees					(631,785)
Net Proceeds to Company					$ 22,486,832
Class FA | 2019 Private Offering [Member]
Subsequent Event [Line Items]
Shares (in shares)					112,850
Proceeds from sale of new shares					$ 3,065,000
Up-front Selling Commissions and Dealer Manager Fees					0
Net Proceeds to Company					$ 3,065,000
Shares (in shares)					112,850
Net Proceeds to Company					$ 3,065,000
Average Net Proceeds Per Share (in dollars per share)					$ 27.16
Class A | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)			1,824		271,104
Proceeds from sale of new shares			$ 50,000		$ 7,763,365
Up-front Selling Commissions and Dealer Manager Fees			4,250		(582,606)
Net Proceeds to Company			$ 45,750		$ 7,180,759
Shares (in shares)			2,406		275,740
Net Proceeds to Company			$ 60,370		$ 7,303,338
Average Net Proceeds Per Share (in dollars per share)		$ 25.09	$ 25.09	$ 25.09	$ 26.49
Class I | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)			32,812		344,389
Proceeds from sale of new shares			$ 825,000		$ 9,154,902
Up-front Selling Commissions and Dealer Manager Fees			0		0
Net Proceeds to Company			$ 825,000		$ 9,154,902
Shares (in shares)			32,821		347,169
Net Proceeds to Company			$ 825,238		$ 9,228,762
Average Net Proceeds Per Share (in dollars per share)		25.14	$ 25.14	25.14	$ 26.58
Class T | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)			1,704		37,140
Proceeds from sale of new shares			$ 45,000		$ 1,035,350
Up-front Selling Commissions and Dealer Manager Fees			2,138		(49,179)
Net Proceeds to Company			$ 42,862		$ 986,171
Shares (in shares)			1,704		37,361
Net Proceeds to Company			$ 42,862		$ 992,071
Average Net Proceeds Per Share (in dollars per share)		25.15	$ 25.15	25.15	$ 26.55
Class D | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)			6,730		79,791
Proceeds from sale of new shares			$ 170,000		$ 2,100,000
Up-front Selling Commissions and Dealer Manager Fees			0		0
Net Proceeds to Company			$ 170,000		$ 2,100,000
Shares (in shares)			6,730		82,444
Net Proceeds to Company			$ 170,000		$ 2,169,442
Average Net Proceeds Per Share (in dollars per share)		$ 25.26	$ 25.26	$ 25.26	$ 26.31
Subsequent Event
Subsequent Event [Line Items]
Shares (in shares)	210,516
Net Proceeds to Company	$ 5,659,232
Average Net Proceeds Per Share (in dollars per share)	$ 26.88
Subsequent Event | Distribution Reinvestment Plan
Subsequent Event [Line Items]
Shares (in shares)	2,576
Proceeds from sale of new shares	$ 68,913
Subsequent Event | 2019 Private Offering and Public Offering [Member]
Subsequent Event [Line Items]
Shares (in shares)	207,940
Proceeds from sale of new shares	$ 5,686,848
Up-front Selling Commissions and Dealer Manager Fees	(96,529)
Net Proceeds to Company	$ 5,590,319
Subsequent Event | Class FA
Subsequent Event [Line Items]
Shares (in shares)	49,643
Net Proceeds to Company	$ 1,350,000
Average Net Proceeds Per Share (in dollars per share)	$ 27.19					$ 27.19
Subsequent Event | Class FA | 2019 Private Offering [Member]
Subsequent Event [Line Items]
Shares (in shares)	49,643
Proceeds from sale of new shares	$ 1,350,000
Up-front Selling Commissions and Dealer Manager Fees	0
Net Proceeds to Company	$ 1,350,000
Subsequent Event | Class FA | Distribution Reinvestment Plan
Subsequent Event [Line Items]
Shares (in shares)	0
Proceeds from sale of new shares	$ 0
Subsequent Event | Class A
Subsequent Event [Line Items]
Shares (in shares)	45,743
Net Proceeds to Company	$ 1,222,968
Average Net Proceeds Per Share (in dollars per share)	$ 26.74					29.22
Subsequent Event | Class A | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)	44,680
Proceeds from sale of new shares	$ 1,280,230
Up-front Selling Commissions and Dealer Manager Fees	(85,699)
Net Proceeds to Company	$ 1,194,531
Subsequent Event | Class A | Distribution Reinvestment Plan
Subsequent Event [Line Items]
Shares (in shares)	1,063
Proceeds from sale of new shares	$ 28,437
Subsequent Event | Class I
Subsequent Event [Line Items]
Shares (in shares)	81,783
Net Proceeds to Company	$ 2,200,782
Average Net Proceeds Per Share (in dollars per share)	$ 26.91					26.91
Subsequent Event | Class I | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)	80,885
Proceeds from sale of new shares	$ 2,176,618
Up-front Selling Commissions and Dealer Manager Fees	0
Net Proceeds to Company	$ 2,176,618
Subsequent Event | Class I | Distribution Reinvestment Plan
Subsequent Event [Line Items]
Shares (in shares)	898
Proceeds from sale of new shares	$ 24,164
Subsequent Event | Class T
Subsequent Event [Line Items]
Shares (in shares)	8,177
Net Proceeds to Company	$ 219,484
Average Net Proceeds Per Share (in dollars per share)	$ 26.84					28.18
Subsequent Event | Class T | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)	8,091
Proceeds from sale of new shares	$ 228,000
Up-front Selling Commissions and Dealer Manager Fees	(10,830)
Net Proceeds to Company	$ 217,170
Subsequent Event | Class T | Distribution Reinvestment Plan
Subsequent Event [Line Items]
Shares (in shares)	86
Proceeds from sale of new shares	$ 2,314
Subsequent Event | Class D
Subsequent Event [Line Items]
Shares (in shares)	25,170
Net Proceeds to Company	$ 665,998
Average Net Proceeds Per Share (in dollars per share)	$ 26.46					$ 26.46
Subsequent Event | Class D | Class FA Private Offering and Public Offering
Subsequent Event [Line Items]
Shares (in shares)	24,641
Proceeds from sale of new shares	$ 652,000
Up-front Selling Commissions and Dealer Manager Fees	0
Net Proceeds to Company	$ 652,000
Subsequent Event | Class D | Distribution Reinvestment Plan
Subsequent Event [Line Items]
Shares (in shares)	529
Proceeds from sale of new shares	$ 13,998

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Subsequent Events - Acquisition (Details) - USD ($)	Aug. 01, 2019	Jun. 30, 2019	Dec. 31, 2018
Subsequent Event [Line Items]
Cost		$ 76,774,339	$ 76,774,339
Roundtables [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Equity Method Investment, Ownership Percentage	81.00%
Cost	$ 44,500,000
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	2,000,000
Equity [Member] | Roundtables [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Cost	32,400,000
Equity–42.6%
Subsequent Event [Line Items]
Cost		46,074,339	46,074,339
Total Senior Secured Notes
Subsequent Event [Line Items]
Cost		$ 30,700,000	$ 30,700,000
Total Senior Secured Notes | Roundtables [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Cost	$ 12,100,000