| Related Party Transactions | 3. Related Party Transactions On September 14, 2023, the Company
entered into an investment advisory agreement (the “Investment Advisory Agreement”) with the Adviser, pursuant to which the
Adviser manages the Company’s investment program and related activities. The advisory fees consist of a management fee and an incentive
fee. The cost of both the management fee and the incentive fee will ultimately be borne by the Company’s stockholders. Management
Fee Pursuant to the Investment Advisory Agreement, the Company’s Adviser will accrue, on a quarterly basis in arrears, a management
fee (the “Base Management Fee”) equal to 0.3125% (i.e., 1.25% annually) of the Company’s net assets as of the beginning
of the first calendar day of the applicable quarter. Muzinich Corporate Lending Income Fund, Inc. Notes to Financial Statements Incentive Fee Pursuant to the Advisory Agreement,
the Company will pay an incentive fee (the “Incentive Fee”) to the Adviser. The Incentive Fee consists of two components
that are independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive
Fee is based on a percentage of the Company’s income and a portion is based on a percentage of the Company’s capital gains,
each as described below. Incentive Fee Based on Income The portion based on the Company’s
income is based on Pre-Incentive Fee Net Investment Income Returns. “Pre-Incentive Fee Net Investment Income Returns” means,
as the context requires, either the dollar value of, or percentage rate of return on the value of the Company’s net assets at the
end of the immediate preceding quarter from, interest income, dividend income and any other income (including any other fees (other than
fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that
the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses accrued
for the quarter (including the Base Management Fee, fees and expenses payable under the Company’s administration agreement with
U.S. Bancorp Fund Services, LLC (“U.S. Bank,” and in such capacity, the “Administrator”) (the “Administration
Agreement”), and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and
outstanding preferred shares, but excluding the Incentive Fee). Pre-Incentive Fee Net Investment Income
Returns include, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind
interest and zero coupon securities), accrued income that the Company has not yet received in cash. Pre-Incentive Fee Net Investment Income
Returns do not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income
Returns, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding quarter,
is compared to a “hurdle rate” of return of 1.75% per quarter (7.00% annualized). The Company will pay the Adviser an
Incentive Fee quarterly in arrear with respect to the Company’s Pre-Incentive Fee Net Investment Income Returns in each calendar
quarter as follows:
● No incentive fee based on Pre-Incentive Fee Net Investment
Income Returns in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income Returns do not exceed the
hurdle rate of 1.75% per quarter (7% annualized);
● 100% of the dollar amount of Pre-Incentive Fee Net Investment
Income Returns with respect to that portion of such Pre-Incentive Fee Net Investment Income Returns, if any, that exceeds the hurdle
rate until the Adviser has received 12.5% of the total Pre-Incentive Fee Net Investment Income Returns for that calendar quarter (the
Company refers to this portion of the Pre-Incentive Fee Net Investment Income Returns (which exceeds the hurdle rate) as the “catch-up”);
and
● 12.5% of the dollar amount of all Pre-Incentive Fee Net Investment
Income Returns, if any, once the Adviser has received the full catch-up. Muzinich Corporate Lending Income Fund, Inc. Notes to Financial Statements Incentive Fee Based on Capital Gains The second component of the Incentive
Fee, the Incentive Fee on based capital gains, is payable at the end of each calendar year in arrears. The amount payable equals:
● 12.5% of cumulative realized capital gains from inception
through the end of such calendar, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis,
less the aggregate amount of any previously paid Incentive Fee based on capital gains as calculated in accordance with U.S. GAAP. Each year, the fee paid for the Incentive
Fee based on capital gains is net of the aggregate amount of any previously paid Incentive Fee based on capital gains for all prior periods.
We will accrue, but will not pay, an Incentive Fee based on capital gains with respect to unrealized appreciation because an Incentive
Fee based on capital gains would be owed to the Adviser if we were to sell the relevant investment and realize a capital gain. If the Advisory Agreement is terminated
prior to the termination of the Company (other than an instance in which the Adviser voluntarily terminates the agreement), the Company
will pay to the Adviser an Incentive Fee payment in connection with such termination (the “Termination Incentive Fee Payment”).
The Termination Incentive Fee Payment will be calculated as of the date the Advisory Agreement is terminated and will equal the amount
of Incentive Fee that would be payable to the Adviser if (a) all investments were liquidated for their current value (but without taking
into account any unrealized appreciation of any investment), and any unamortized deferred investment-related fees would be deemed accelerated,
(b) the proceeds from such liquidation were used to pay all the Company’s outstanding liabilities, and (c) the remainder were distributed
to stockholders and paid as Incentive Fee in accordance with the incentive fee calculation methodology, subject to the limitations set
forth in Section 205(b)(3) of the Investment Advisers Act of 1940, as amended (the “Advisers Act”). The Company will make
the Termination Incentive Fee Payment in cash on or immediately following the date the Advisory Agreement is so terminated. The Advisory Agreement will remain
in full force and effect for two years initially, and will continue for successive one-year periods thereafter, but only so long as such
continuance is specifically approved at least annually by (a) the vote of a majority of the members of the Board who are not “interested
persons,” as defined in Section 2(a)(19) of the 1940 Act, of the Company (the “Independent Directors”), and (b) by a
vote of (1) a majority of the Board or (2) a majority of the Company’s outstanding voting securities, and in Independent Directors
and in accordance with the requirements of the 1940 Act. The Advisory Agreement may, on 60 days’ written notice to the other party,
be terminated in its entirety at any time without the payment of any penalty, by the Company (following determination by the Board or
by vote of a majority of the Company’s outstanding voting securities), or by the Adviser. The Advisory Agreement shall automatically
terminate in the event of its assignment. |
