Note 7. Agreements and Related Party Transactions

Investment Advisory and Management Agreement

On July 30, 2010, the Company entered into the Management Agreement with the Manager. The initial term of the Management Agreement was two years from its effective date, with one-year renewals thereafter subject to certain approvals by the Company’s board of directors and/or the Company’s stockholders. Most recently, on July 7, 2025, the Company’s board of directors approved the renewal of the Management Agreement for an additional one-year term. Pursuant to the Management Agreement, the Manager implements the Company’s business strategy on a day-to-day basis and performs certain services for the Company, subject to oversight by the board of directors. The Manager is responsible for, among other duties, determining investment criteria, sourcing, analyzing and executing investments transactions, asset sales, financings and performing asset management duties. Under the Management Agreement, the Company pays the Manager a management fee for investment advisory and management services consisting of a base management fee and an incentive management fee.

Base Management Fee and Incentive Management Fee

The base management fee of 1.75% per year is calculated based on the average value of our gross assets (other than cash or cash equivalents, but including assets purchased with borrowed funds) at the end of the two most recently completed fiscal quarters. The base management fee is paid quarterly following the filing of the most recent quarterly report on Form 10-Q.

The incentive management fee consists of the following two parts:

The first, payable quarterly in arrears, equals 20% of the Company’s pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding quarter, that exceeds a 1.875% quarterly hurdle rate measured as of the end of each fiscal quarter, subject to a “catch-up” provision. Under this provision, in any fiscal quarter, the Manager receives no incentive fee unless our pre-incentive fee net investment income exceeds the hurdle rate of 1.875%. The Manager will receive 100% of pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than or equal to 2.344% in any fiscal quarter; and 20% of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.344% in any fiscal quarter. There is no accumulation of amounts on the hurdle rate from quarter to quarter, and accordingly there is no claw back of amounts previously paid if subsequent quarters are below the quarterly hurdle rate, and there is no delay of payment if prior quarters are below the quarterly hurdle rate.

The second part of the incentive fee is determined and payable in arrears as of the end of each fiscal year (or upon termination of the Management Agreement) and equals 20.0% of the Company’s “incentive fee capital gains,” which equals the Company’s realized capital gains on a cumulative basis from May 31, 2010 through the end of the fiscal year, if any, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis on each investment in the Company’s portfolio, less the aggregate amount of any previously paid capital gain incentive fee. Importantly, the capital gains portion of the incentive fee is based on realized gains and realized and unrealized losses from May 31, 2010. Therefore, realized and unrealized losses incurred prior to such time will not be taken into account when calculating the capital gains portion of the incentive fee, and the Manager will be entitled to 20.0% of incentive fee capital gains that arise after May 31, 2010. In addition, for the purpose of the “incentive fee capital gains” calculations, the cost basis for computing realized gains and losses on investments held by us as of May 31, 2010 will equal the fair value of such investments as of such date.

For the years ended February 28, 2026, February 28, 2025 and February 29, 2024, the Company incurred $17.8 million, $18.4 million and $19.2 million in base management fees, respectively. For the years ended February 28, 2026, February 28, 2025 and February 29, 2024, the Company incurred $9.2 million, $13.2 million and $8.0 million in incentive fees related to pre-incentive fee net investment income. For the years ended February 28, 2026, February 28, 2025 and February 29, 2024, the Company accrued $(1.0) million, $(5.9) million and $(8.3) million, respectively, in incentive fees related to capital gains.

The accrual is calculated using both realized and unrealized capital gains for the period. The actual incentive fee related to capital gains will be determined and payable in arrears at the end of the fiscal year and will include only realized capital gains for the period. As of February 28, 2026, the base management fees accrual was $4.6 million and the incentive fees accrual was $2.0 million and are included in base management and incentive fees payable in the accompanying consolidated statements of assets and liabilities. As of February 28, 2025, the base management fees accrual was $4.2 million and the incentive fees accrual was $2.0 million and are included in base management and incentive fees payable in the accompanying consolidated statements of assets and liabilities.

Administration Agreement

On July 30, 2010, the Company entered into a separate administration agreement (the “Administration Agreement”) with the Manager, pursuant to which the Manager, as the Company’s administrator, has agreed to furnish the Company with the facilities and administrative services necessary to conduct day-to-day operations and provide managerial assistance on the Company’s behalf to those portfolio companies to which the Company is required to provide such assistance. The initial term of the Administration Agreement was two years from its effective date, with one-year renewals thereafter subject to certain approvals by the Company’s board of directors and/or the Company’s stockholders. Since its inception the amount of expenses payable or reimbursable by the Company under the Administration Agreement has been subject to a cap that is reviewed annually in connection with the renewal of the Administration Agreement. Most recently, on July 7, 2025, the Company’s board of directors approved the renewal of the Administration Agreement for an additional one-year term, and subsequently also determined to increase the cap on the payment or reimbursement of expenses by the Company from $5.0 million to $5.4 million, effective August 1, 2025. The Company’s board of directors will continue to assess the cap on payment or reimbursement of expenses on an annual basis.

For the years ended February 28, 2026, February 28, 2025 and February 29, 2024, we recognized $5.2 million, $4.7 million and $3.9 million in administrator expenses, respectively, pertaining to bookkeeping, recordkeeping and other administrative services provided to the Company in addition to the Company’s allocable portion of rent and other overhead related expenses. As of February 28, 2026, $0.6 million of administrator expenses were accrued and included in due to Manager in the accompanying consolidated statements of assets and liabilities. As of February 28, 2025, $0.3 million of administrator expenses were accrued and included in due to Manager in the accompanying consolidated statements of assets and liabilities.

Saratoga CLO

On December 14, 2018, the Company completed the third refinancing and issuance of the 2013-1 Reset CLO Notes. This refinancing, among other things, extended the Saratoga CLO reinvestment period to January 2021, and extended its legal maturity to January 2030. In addition, and as part of the refinancing, the Saratoga CLO has also been upsized from $300 million in assets to approximately $500 million.

In conjunction with the third refinancing and issuance of the 2013-1 Reset CLO Notes on December 14, 2018, the Company is no longer entitled to receive an incentive management fee from Saratoga CLO. See Note 4. Investment in Saratoga CLO for additional information.

On February 26, 2021, the Company completed the fourth refinancing of the Saratoga CLO. This refinancing, among other things, extended the Saratoga CLO reinvestment period to April 2024, extended its legal maturity to April 2033, and extended the non-call period to February 2022. In addition, and as part of the refinancing, the Saratoga CLO was upsized from $500 million in assets to approximately $650 million. As part of this refinancing and upsizing, the Company invested an additional $14.0 million in all of the newly issued subordinated notes of the Saratoga CLO, and purchased $17.9 million in aggregate principal amount of the Class F-R-3 Notes tranche at par. Concurrently, the existing $2.5 million of Class F-R-2 Notes, $7.5 million of Class G-R-2 Notes and $25.0 million CLO 2013-1 Warehouse 2 Loan were repaid. The Company also paid $2.6 million of transaction costs related to the refinancing and upsizing on behalf of the Saratoga CLO, to be reimbursed from future equity distributions. At November 30, 2021, the outstanding receivable of 2.6 million was repaid in full.

On August 9, 2021, the Company exchanged its existing $17.9 million Class F-R-3 Notes for $8.5 million Class F-1-R-3 Notes and $9.4 million Class F-2-R-3 Notes at par. On August 11, 2021, the Company sold its Class F-1-R-3 Notes to third parties, resulting in a realized loss of $0.1 million.

On June 10, 2024, the Company completed its fifth refinancing of the Saratoga CLO. This refinancing, among other things, did not extend the Saratoga CLO reinvestment period nor extend its legal maturity, while adjusting the interest rate of two of the existing Notes. The Issuer issued $422.5 million of notes, consisting of Class A-1-R-4 and Class A-2-R-4. The 2013-1 2024 Reset CLO Notes were issued pursuant to the Indenture with the same Trustee. Proceeds of the issuance of the 2013-1 2024 Reset CLO Notes were used along with existing assets of the Saratoga CLO to redeem the existing Class A-1-R-3 and Class A-2-R-3 Notes. No other Notes were refinanced as part of this refinancing. The Saratoga CLO paid $0.5 million of transaction costs related to the refinancing.

As of February 28, 2026, and February 28, 2025, the Company’s investment in the Class F-2-R-3 Note of the Saratoga CLO had a fair value of $0.0 million and $2.3 million, respectively. As of February 28, 2026, the Class F-2-R-3 Note of the Saratoga CLO was placed on non-accrual status, the Company has reserved all related outstanding interest receivables.

For the years ended February 28, 2026, February 28, 2025, and February 29, 2024, we recognized $1.2 million, $1.5 million and $1.5 million in interest income, respectively, related to the Class F-2-R-3 Note of the Saratoga CLO.

As of February 28, 2026, and February 28, 2025, the Company’s investment in the Subordinated Note of the Saratoga CLO had a fair value of $0.0 million and $0.2 million, respectively. In addition, the Company has no outstanding receivable balance from the Subordinated Note of the Saratoga CLO, as of February 28, 2026.

For the years ended February 28, 2026, February 28, 2025, and February 29, 2024, we recognized $2.6 million, $3.1 million and $3.3 million in management fee income, respectively, related to the Subordinated Note of the Saratoga CLO.

For the years ended February 28, 2026, February 28, 2025, and February 29, 2024, we recognized $0.0 million, $0.0 million and $0.0 million in interest income, respectively, related to the Subordinated Note of the Saratoga CLO.

For the years ended February 28, 2026, February 28, 2025, and February 29, 2024, the Company neither bought nor sold any investments from the Saratoga CLO.

SLF JV

On October 26, 2021, the Company and TJHA entered into an LLC Agreement to co-manage the SLF JV. SLF JV is a joint venture that invests in the debt or equity interests of collateralized loan obligations, loan, notes and other debt instruments. The Company records interest income from its investment in an unsecured loan with SLF JV on an accrual basis and records dividend income from its membership interest when earned. All operating decisions are shared with a 50% voting interest in SLF JV.

On October 28, 2022, SLF 2022 issued $402.1 million of the 2022 JV CLO Notes through the JV CLO trust. The 2022 JV CLO Notes were issued pursuant to the JV Indenture, with the Trustee.

As of February 28, 2026 and February 28, 2025 respectively, the Company’s investment in the SLF JV had a fair value of $17.7 million and $19.6 million, consisting of an unsecured loan of $16.1 million and $16.5 million, and membership interest of $1.5 million and $3.1 million. In addition, approximately $0.2 million and $0.2 million of interest income related to SLF JV was included in interest receivable on the Statement of Assets and Liabilities.

For the years ended February 28, 2026, February 28, 2025, and February 29, 2024, we recognized $1.8 million, $1.8 million and $1.8 million in interest income on the consolidated statement of operations, respectively, related to the SLF JV.

For the years ended February 28, 2026, February 28, 2025, and February 29, 2024, we recognized $3.3 million, $4.0 million and $5.9 million of dividend income on the consolidated statement of operations, respectively, related to the SLF JV.

As part of the JV CLO trust transaction, the Company purchased 87.50% of the Class E Notes from SLF 2022 with a principal value of $12.3 million and fair value of $12.3 million, respectively. This was repaid as part of the refinancing of the SLF 2022 on September 24, 2025, and the Company purchased 87.5% of the Class E-R Notes from SLF 2022 with a principal value of $8.8 million and fair value of $8.8 million, respectively.

As of February 28, 2026 and February 28, 2025, the fair value of the Class E-R Notes were $8.4 million and $0.0 million, respectively. As of February 28, 2026 and February 28, 2025, the fair value of the Class E Notes were $0.0 million and $12.3 million, respectively.