AB 2020 Form 10-K

Agreement. The Expense Reimbursement Agreement provides that, absent criminal conduct, willful misfeasance, bad faith or gross negligence in the performance of the Adviser’s duties or by reason of the reckless disregard of the Adviser’s duties and obligations, the Adviser and its officers, managers, agents, employees, controlling persons, members and any other person or entity affiliated with it is entitled to indemnification from the Fund for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of the Adviser’s services under the Expense Reimbursement Agreement. Competition The Fund’s primary competitors for investments include public and private credit investment funds, other BDCs, commercial and investment banks, commercial financing companies and, to the extent they engage in making private loans to middle market companies, investment advisors that also manage private equity and hedge funds. Some of the Fund’s competitors are larger and have greater financial, technical and marketing resources than the Fund does. For example, the Fund believes some competitors may have access to funding sources that are not available to the Fund. In addition, some of the Fund’s competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish relationships in areas that differ from the Fund’s. Furthermore, many of the Fund’s competitors are not subject to the regulatory restrictions that the 1940 Act imposes on the Fund as a BDC or to the source of income, asset diversification, distribution and other requirements the Fund must satisfy to maintain its qualification as a RIC. Notwithstanding these risks, the Fund believes that the Adviser’s experience in middle market corporate lending, combined with its access to AB’s institutional infrastructure and established public and private credit franchises, provide the Fund with market-leading competencies in the private corporate credit sector. The Fund believes the Adviser has developed a best-in-class reputation due to the long-standing presence of its investment professionals in the middle market lending community and the significant relationships, skills and experience of its individual members, particularly as it relates to sourcing, structuring, and negotiating investment opportunities. As it relates to strategy, the Fund views the Adviser as being differentiated by its focus on what the Fund believes is a less competitive segment of the market. There are a number of industry participants that finance middle market companies, but many of them focus on a particular area of the capital structure or industry sector. The Fund believes the Adviser’s flexibility to invest across the capital structure, as well as its investing experience across industries, will optimize the relative risk / return profile for investors. Further, as opposed to traditional lenders such as banks and collateralized loan obligations that must structure loans to meet regulatory or contractual guidelines, the Fund believes the Adviser has greater flexibility to tailor solutions for borrowers and, ideally, receive premium pricing for doing this. The Adviser’s collective investment philosophy and process provide a demonstrated track record of success. The Adviser is committed to the consistent application of its proven approach throughout the investment lifecycle, from deal selection to portfolio management, combining fundamental and valuation-based analytical tools and principles with proven underwriting frameworks to strive to achieve superior outcomes. The Fund believes that the Adviser is highly selective and focuses on pursuing companies that the Fund believes exhibit strong underlying business models and durable intrinsic value. The Fund believes the Adviser’s qualifications, experience, and track record of success will render the Fund competitive in the BDC marketplace. For additional information concerning the competitive risks the Fund faces, see “ Risk Factors — Risks Related to The Fund’s Business and Structure — The Fund may face increasing competition for investment opportunities. ” Managerial Assistance As a BDC, the Fund will offer, and must provide upon request, managerial assistance to its portfolio companies. This assistance could involve, among other things, monitoring the operations of the Fund’s portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. The Fund may also receive fees for these services. The Adviser will provide, or arrange for the provision of, such managerial assistance on the Fund’s behalf to portfolio companies that request this assistance, subject to reimbursement of any fees or expenses incurred on the Fund’s behalf by the Adviser in accordance with the Advisory Agreement. Dividend Reinvestment Plan On September 26, 2017, the Fund adopted a dividend reinvestment plan, which was amended and restated on August 6, 2018 (the “DRIP”). Pursuant to the DRIP, stockholders receive dividends or other distributions in cash unless a stockholder elects to reinvest his or her dividends and other distributions as provided below. As a result of adopting the DRIP, if the Board authorizes, and the Fund declares, a cash dividend or distribution, the Fund’s stockholders who have opted into the DRIP will have their cash dividends or distributions automatically reinvested in additional Shares, rather than receiving cash. 15