Peter A. Reed
Chief Executive Officer
Great Elm Capital Corp.
200 Clarendon Street, 51 ^st  Floor
Boston, MA 02116
(Name and Address of Agent for Service)

Copies to:

Calculation of Registration Fee under the Securities Act of 1933

        The foregoing table is to assist you in understanding the various costs and expenses that an investor in Full Circle or GECC common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, performance will vary and may result in a return greater or less than 5%. In the case of GECC, the incentive fee under the GECC Investment Management Agreement, which, assuming a 5% annual return, would either not be payable or have an insignificant impact on the expense amounts shown above, is not included in the example in the footnote. If GECC were to achieve sufficient returns on its investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, its expenses, and returns to its investors, would be higher.

        In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, if either Full Circle or GECC's board of directors authorizes and Full Circle or GECC, as applicable, declares a cash distribution, participants in its dividend reinvestment plan who have not otherwise elected to receive cash will receive a number of shares of its common stock determined by dividing the total dollar amount of the distribution payable to a participant by the market price per share of Full Circle or GECC's common stock at the close of trading on the valuation date for the distribution. See "Full Circle—Full Circle Dividend Reinvestment Plan" and "GECC Dividend Reinvestment Plan" for additional information regarding their respective dividend reinvestment plan.

         This example and the expenses in the table above should not be considered a representation of Full Circle's or GECC's (pro forma following the Merger) future expenses. Actual expenses (including the cost of debt or preferred stock issued, if any, and other expenses) may be greater or less than those shown.

34

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        Some of the statements in this document constitute forward-looking statements, which relate to future events or the future performance or financial condition of GECC or Full Circle. The forward-looking statements contained in this document involve a number of risks and uncertainties, including statements concerning:

•

GECC's or Full Circle or their portfolio companies', future business, operations, operating results or prospects;



•

the return or impact of current and future investments;



•

the impact of a protracted decline in the liquidity of credit markets;



•

the impact of fluctuations in interest rates;



•

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



•

GECC's or Full Circle's ability to recover unrealized losses;



•

market conditions and GECC's or Full Circle's ability to access alternative debt markets and additional debt and equity capital;



•

contractual arrangements and relationships with third parties;



•

the general economy and its impact on the industries in which GECC or Full Circle invests;



•

the financial condition of and ability of current and prospective portfolio companies to achieve their objectives;



•

expected financings and investments;



•

the adequacy of cash resources and working capital;



•

the timing, form and amount of any dividend or other distributions;



•

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



•

the ability of GECM to locate suitable investments and to monitor and administer investments;



•

the outcome and impact of any litigation relating to the Merger;



•

the likelihood that the Merger is completed and the anticipated timing of its completion;



•

the period following the completion of the Merger;



•

the ability of GECC's and Full Circle's businesses to successfully integrate if the Merger is completed; and



•

Full Circle's future operating results and business prospects if the Merger is not completed.

        Words such as "anticipates," "believes," "expects," "intends," "will," "should," "may" and similar expressions identify forward-looking statements, although not all forward-looking statements include these words. Actual results and conditions could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in "Risk Factors" and elsewhere in this document.

        The forward-looking statements included in this document have been based on information available to GECC and Full Circle on the date of this document, as appropriate, and neither GECC nor Full Circle assumes any obligation to update any such forward-looking statements. Although neither GECC nor Full Circle undertakes any obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that GECC or Full Circle may make directly to you or through reports that they have filed or in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

        The forward-looking statements in this document are excluded from the safe harbor protection provided by Section 27A of the Securities Act and Section 21E of the Exchange Act.

35

Table of Contents

THE FULL CIRCLE SPECIAL MEETING

Date, Time and Place of the Special Meeting

        The special meeting will take place on October [     ·     ], 2016, at 9:00 a.m. (Eastern Time), at the offices of Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019.

Purposes of the Special Meeting

        The purposes of the special meeting are to consider and vote on the following proposals:

•

a proposal to approve the Merger Proposal; and



•

a proposal to approve the Adjournment Proposal.

         On the recommendation of the Special Committee, the Full Circle Board, unanimously recommends that stockholders vote "FOR" the Merger and the Merger Proposal and "FOR" the Adjournment Proposal.

        Under Maryland law and Full Circle's bylaws, only the matters described in the notice of special meeting (that is, the Merger Proposal and the Adjournment Proposal) may be presented for action at the special meeting or at any adjournment or postponement of the special meeting.

Record Date

        The Full Circle Board has fixed the close of business on August [     ·     ], 2016 as the Record Date for determining which Full Circle stockholders are entitled to notice of and to vote at the special meeting (including if the special meeting is adjourned or postponed). Only holders of record of Full Circle common stock at the close of business on the Record Date, are entitled to notice of and to vote at the special meeting. On the Record Date, approximately 22,474,243 shares of Full Circle common stock were issued and outstanding. Those shares were held on the Record Date by [     ·     ] holders of record. Each holder of Full Circle common stock on the Record Date is entitled to one vote per share on all matters upon which stockholders are entitled to vote.

Vote Required

        The approval of the Merger Proposal requires the affirmative vote of the holders of a majority of the shares of Full Circle's common stock outstanding and entitled to vote as of the Record Date. The approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the votes cast at the special meeting.

Quorum

        A quorum will be required to be present in order to conduct business at the special meeting. The presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of Full Circle common stock outstanding on the Record Date and entitled to vote will constitute a quorum. For purposes of determining the presence of a quorum, abstentions and broker non-votes, if any, will be included in determining the shares of common stock present and entitled to vote.

Adjournment or Postponement

        If the necessary quorum to transact business is not present, the chairman of the special meeting or the persons named as proxies may propose one or more adjournments or postponements of the special meeting in accordance with applicable law to permit further solicitation of proxies. If the necessary quorum is present, the special meeting may be adjourned to solicit additional proxies if the Adjournment Proposal has been approved by the Full Circle stockholders. In either case, the special meeting may be adjourned to a date that is not more than 120 days after the Record Date without further notice other than announcement at the special meeting.

Voting by Full Circle's Officers and Directors

        At the close of business on the Record Date, Full Circle's executive officers and directors owned, and therefore will be entitled to vote at the special meeting, an aggregate of 2,484,461 shares of Full Circle common stock, representing approximately 11.06% of Full Circle's outstanding shares of common stock. None of Full Circle's executive officers or directors has entered into any voting agreement relating to the Merger; however, each of Full Circle's executive officers and directors has advised Full Circle that he intends to vote his shares of Full Circle common stock in favor of the proposal to approve the Merger.

36

Table of Contents

Voting: Proxies

        If you were a stockholder of record at the close of business on the Record Date, you may vote your shares in person at the special meeting or by proxy. You have three ways to submit a proxy to vote your shares:

•

Submit a proxy by mail: sign, date and mail in your proxy card using the prepaid envelope provided,



•

Submit a proxy by telephone: submit a proxy by calling [     ·     ], or



•

Submit a proxy via the Internet: Connect to the Internet site at [www.proxyvote.com].

        All shares of Full Circle common stock represented by properly executed proxy cards received before or at the special meeting will be voted at the special meeting in the manner specified in those proxy cards, unless the proxy has been revoked. Properly executed proxies that do not contain voting instructions will be voted "FOR" the approval of each matter to be voted on at the Full Circle special meeting, including approval of the Merger Proposal.

        If a properly executed proxy card is returned and the stockholder has abstained from voting on one or more of the proposals, the shares of Full Circle common stock represented by the proxy will be considered present at the special meeting for purposes of determining whether a quorum is present, but will not be considered to have been voted on the proposals as to which the stockholder has abstained. Abstentions will have the effect of a vote against the Merger Proposal and the Adjournment Proposal.

        Under the applicable rules and regulations of the NYSE, brokers, banks, trusts or other nominees have discretion to vote on routine matters, but do not have discretion to vote on non-routine matters. Each of the proposals to be considered at the special meeting is a non-routine matter for this purpose. Accordingly, if you are not the record holder of your shares of Full Circle common stock and instead you hold those shares in street name, your broker, bank, trust or other nominee will be permitted to vote your shares of Full Circle common stock only if you provide instructions on how to vote those shares. You can provide instructions by following the procedures specified by your broker, bank, trust or other nominee. The only way a "broker non-vote" would result is if you provide your broker, bank, trust or other nominee with instructions on how to vote your shares with respect to one proposal but do not provide it with instructions on how to vote your shares with respect to the other proposal. A broker non-vote will have the effect of a vote against the proposal on which directions are not given.

Revocation of Proxies

        Submitting a proxy on the enclosed form does not preclude a stockholder from revoking such proxy and subsequently voting in person at the Full Circle special meeting. A stockholder may revoke a proxy at any time before it is voted by:

•

delivering a duly executed revocation of proxy to Full Circle Capital Corporation, c/o Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, New York 11717;



•

submitting a completed and duly executed proxy to Full Circle with a later date;



•

instructing the proxy solicitor to change the stockholder's vote either by calling the proxy solicitor or via the Internet pursuant to the instructions shown on the proxy card; or



•

appearing at the special meeting and voting in person.

        A stockholder may revoke a proxy by using any of these methods, regardless of the method used to provide the stockholder's previous proxy. Attendance at the special meeting without voting will not by itself revoke a proxy.

Solicitation of Proxies

        Full Circle will bear the cost of solicitation of proxies in the form accompanying this document. The costs and expenses of printing and mailing the registration statement (of which this document forms a part) and all filing and other fees paid to the SEC in connection with the Merger will be borne equally by Full Circle and GECC. In addition to solicitation by mail, directors, executive officers or employees of Full Circle, Full Circle Advisors or GECM, who will not be specially compensated, may solicit proxies from Full Circle's stockholders by telephone, facsimile, telegram or other electronic means or in person. Full Circle has retained Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, New York 11717 to assist in the solicitation of proxies from

37

Table of Contents

stockholders for an estimated fee of $20,000 plus out-of-pocket expenses. Arrangements may also be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation materials to the beneficial owners of shares held of record by these persons and Full Circle will reimburse them for their reasonable out-of-pocket expenses.

        Full Circle will mail a copy of this document, including the notice of special meeting and the proxy card included with these materials, to each holder of record of its common stock on the Record Date.

38

Table of Contents

THE MERGER

         The discussion in this document, which includes the material terms of the Merger and the principal terms of the Merger Agreement, is subject to, and is qualified in its entirety by reference to, the Merger Agreement. You should read the Merger Agreement carefully in its entirety, as it is the principal legal document governing the Merger.

Background of the Merger

        Since Full Circle's inception in 2010, the Full Circle Board regularly has considered possible ways of growing Full Circle's equity capitalization and total assets in order to increase stockholder value. The Full Circle Board believes that kind of growth, if achievable, would result in operating efficiencies (by spreading operating costs across a broader asset base) and would allow the development of a broader and more diversified investment portfolio. Growth also potentially would make the market for Full Circle's shares more liquid, making them more attractive to investors. Unfortunately, like other similarly situated BDCs, Full Circle has found it difficult to grow. Full Circle's shares of common stock have consistently traded at a discount to Full Circle's net asset value ( NAV ) per share, and the size of that discount has increased over time. The shares of other similarly situated BDCs also have traded at discounts to NAV for extended periods of time (in many cases since 2014 or earlier). In addition, Full Circle's NAV per share has declined, in part because of credit quality issues affecting some of its investment portfolio assets. In 2015, Full Circle's NAV per share declined by 31.4% or $1.72 per share. Full Circle's most recent equity capital raise occurred in March 2015, when Full Circle completed a rights offering in which it sold shares of its common stock for $3.50 per share. That offering price represented a discount to Full Circle's NAV per share and resulted in immediate pro forma dilution of $0.96 per share. The Full Circle Board has been reluctant to pursue additional equity offerings because of the further dilution that would result from any such offering. The result of these factors has been that Full Circle has been unable to achieve the size and scale that the Full Circle Board believes is necessary for a company of this type to be successful. The Full Circle Board believes the market conditions and other factors that have made it difficult for Full Circle to grow are likely to continue for some time.

        Full Circle is managed by Full Circle Advisors. Pursuant to an investment advisory agreement, Full Circle is required to pay Full Circle Advisors a fee for investment advisory and management services consisting of two components—a base management fee and an incentive fee. In connection with Full Circle's rights offering completed in March 2015 for the periods commencing on April 1, 2015 and ending on June 30, 2015 and commencing on July 1, 2015 and ending on June 30, 2016, Full Circle Advisors agreed to waive a portion of the base management fees and incentive fees that Full Circle Advisors otherwise would be entitled to receive to the extent required in order for Full Circle to earn net investment income sufficient to support the distribution payment on Full Circle's shares of common stock for each monthly distribution declared by Full Circle's Board. The determination of the amount to be waived was finalized as of the end of the fiscal year for each period, with such amounts being accrued on a quarterly basis. Net investment income was defined as net income before net realized gains (losses) and unrealized gains (losses), in each case, as determined in accordance with GAAP. Full Circle Advisors was not entitled to recoup any amount of base management fees that it waived pursuant to this agreement. Full Circle Advisors also agreed to reimburse Full Circle for any operating expenses, excluding interest expenses, investment advisory and management fees, and offering expenses, in excess of 1.5% of Full Circle's net assets, beginning with its fiscal quarter ending September 30, 2014 through June 30, 2015. For the fiscal year ending June 30, 2016 and beyond, Full Circle Advisors had agreed to reimburse Full Circle for any operating expenses, excluding interest expenses, investment advisory and management fees, and offering expenses, in excess of 1.75% of Full Circle's net assets. The fee waiver and expense reimbursement subjected Full Circle Advisors to financial constraints. Those constraints became more severe after Full Circle changed its investment strategy, beginning in late 2015, to reduce new originations in order to create greater flexibility in pursuing strategic alternatives. This was done in order to avoid a situation in which, for example, a prospective acquirer or merger partner might discount newly-originated investments made by Full Circle that did not fit with the counterparty's investment strategies or objectives, resulting in a potential loss of value to Full Circle's stockholders. The change in investment strategy led to a reduction in Full Circle's total assets and income from investments, and this in turn had the effect of further reducing the compensation payable to Full Circle Advisors, subjecting it to additional financial strain.

        Beginning in mid-2015, with the approval of the Full Circle Board, representatives of Full Circle Advisors engaged in preliminary discussions with third parties regarding the possibility of one or more strategic transactions

39

Table of Contents

that would allow Full Circle to increase the size, scale and diversification of its investment portfolio. Pursuant to this process, Full Circle Advisors contacted 15 parties, of whom 11 entered into confidentiality agreements with Full Circle. By the end of November 2015, four parties had provided preliminary indications of interest regarding possible transactions. One of those parties was a joint venture between MAST and the Great Elm Capital Group, Inc. (the MAST Group ). Full Circle Advisors provided the Full Circle Board with regular updates regarding these activities.

        On November 11, 2015, the Full Circle Board, after reviewing the results of the exploratory process that Full Circle Advisors had initiated, formed the Special Committee to consider various strategic alternatives potentially available to Full Circle. The members of the Special Committee are Mark C. Biderman, Edward H. Cohen and Thomas A. Ortwein, Jr. The Special Committee was authorized to consider, negotiate and potentially implement all strategic alternatives reasonably available to Full Circle, including, but not limited to, the acquisition or disposition of assets, the replacement of Full Circle Advisors as Full Circle's investment adviser, and the sale or merger of Full Circle. The Special Committee was authorized to select and retain its own legal and financial advisers. A primary objective of Full Circle's Board in establishing the Special Committee was to address potential conflicts of interest to which Full Circle Advisors and its principals might be subject in exploring various strategic alternatives.

        Under applicable NASDAQ rules, a member of the Full Circle Board qualifies as an "independent director" if, in the opinion of the Full Circle Board, that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. These NASDAQ rules also specify certain persons whose relationships with Full Circle would preclude them from being considered independent. The Full Circle Board has determined that each member of the Special Committee is an "independent director" as defined under the applicable NASDAQ rules, and the Full Circle Board also has concluded that each member of the Special Committee is free of any relationship that would interfere with the exercise of his or her independent judgment in carrying out his or her responsibilities as a director or a member of the Special Committee.

        Later in November 2015, the Special Committee retained Clifford Chance US LLP ( Clifford Chance ) as its legal counsel.

        In December 2015, the Special Committee considered and interviewed several investment banks to serve as its financial adviser. The Special Committee decided to retain Houlihan Lokey as its financial adviser based on a variety of factors including Houlihan Lokey's experience and reputation in providing financial advisory services in respect of mergers, acquisitions and other transactions, its familiarity with and understanding of the business sector in which Full Circle operates, and its fee proposal. In selecting Houlihan Lokey, the Special Committee noted that Terence Flynn, who is a member of the Full Circle Board, is a senior investment banker at Houlihan Lokey. Mr. Flynn does not serve on the Special Committee.

        During a telephonic meeting held on December 2, 2015, the Special Committee discussed the four parties (including MAST) that had provided preliminary indications of interest regarding possible transactions with Full Circle. One of these parties, Party A, an investment and fund management firm, had submitted an indication of interest in purchasing a portion of Full Circle investment portfolio that was relatively illiquid.

        On December 3, 2015, Full Circle Advisors delivered a letter to the Special Committee in which Full Circle Advisors reported a decline in its financial position and requested that the Special Committee consider taking action to alleviate the financial burdens on Full Circle Advisors caused by the fee waiver and expense reimbursement that had been in effect since April 2015.

        In December 2015 and January 2016, at the direction of the Special Committee, Houlihan Lokey contacted five of the counterparties previously contacted by Full Circle Advisors and reached out to six additional parties to discuss their interest in a potential transaction.

        On January 11, 2016, the Special Committee held a telephonic meeting at which representatives of its legal and financial advisors were present. During the meeting, the members of the Special Committee reviewed various strategic alternatives potentially available to Full Circle. The strategic alternatives reviewed by the Special Committee included a business combination transaction; a transaction in which Full Circle would issue stock in

40

Table of Contents

exchange for a contribution of an investment portfolio; the sale of a portion of Full Circle's investment portfolio; a liquidation; the appointment of a new external manager to replace Full Circle Advisors; or a combination of transactions. Representatives of Houlihan Lokey reported on its communications with the 11 potential counterparties, it had been instructed by the Special Committee to contact regarding a potential strategic transaction involving Full Circle, all of which had entered into confidentiality agreements with Full Circle. Four of the potential counterparties had terminated discussions, four of the potential counterparties were actively pursuing potential transactions with Full Circle, and the discussions with the remaining counterparties were still at a preliminary stage. The Special Committee discussed the fact that some parts of Full Circle's investment portfolio were relatively illiquid and difficult to value, and this had been reflected in terms of at least one of the preliminary indications of interest that had been received. The members of the Special Committee discussed the indication of interest that had been received from Party A for the purchase of an illiquid portion of the portfolio, and that completing a transaction of that type, followed by a business combination with a party that was interested in the remainder of Full Circle's assets, could enhance value for Full Circle's stockholders. This was because other potential counterparties had made clear they attributed less value than Party A to the assets Party A was potentially interested in acquiring.

        Subsequently, on January 27, 2016, representatives of Houlihan Lokey reviewed and discussed with the Special Committee the preliminary indications of interest for a business combination transaction received from five parties. The parties included Party A and the MAST Group. The indication of interest received from the MAST Group was dated January 19, 2016 and contemplated a merger of Full Circle with a newly formed entity that would be initially capitalized with $30 million of cash and a portfolio of fixed income investments having a fair market value of approximately $90 million. The Special Committee and its advisors also discussed a sixth preliminary indication of interest for a replacement investment adviser.

        The Special Committee directed its advisers to continue to explore and pursue indications of interest and a potential agreement with Party A for a transaction in which Party A would acquire a portion of Full Circle's investment assets for cash. The Special Committee concluded, based on the various indications of interest that had been received, that this transaction could be a first step toward a business transaction and that because most of the other parties with whom the Special Committee had held discussions assigned less value to the assets that Party A wanted to acquire, proceeding in this way had the potential to generate greater aggregate value for Full Circle's stockholders.

        On February 8, 2016, Full Circle entered into a letter of intent with Party A that contemplated the purchase by Party A of a portfolio of Full Circle's senior secured loans, second lien loans, mezzanine loans and equity securities and related assets, representing approximately 48% of Full Circle's gross assets, for an aggregate purchase price of $63,985,824. The letter of intent contemplated the parties would enter into a definitive agreement after Party A had completed a confirmatory due diligence review of the portfolio to be purchased.

        On February 11, 2016, the Special Committee held a telephonic meeting at which representatives of its legal and financial advisers were present. Representatives of Full Circle Advisors also participated in the meeting. The Special Committee agreed to recommend to the Full Circle Board that Full Circle agree to terminate the fee waiver and expense reimbursement that applied previously and had been agreed to by Full Circle Advisors. The Special Committee did so after determining, based on information provided by Full Circle Advisors, that if the fee waivers and expense reimbursement were left in place, Full Circle Advisors would continue suffering from financial difficulties that could impair its ability to continue serving Full Circle effectively. The Full Circle Board accepted the Special Committee's recommendation and authorized the termination of the fee waiver and expense reimbursement effective as of January 1, 2016.

        Also at the February 11, 2016 meeting, representatives of Houlihan Lokey provided an update regarding the status of discussions authorized by the Special Committee with third parties regarding potential transactions. In addition to Party A, indications of interest for a business combination transaction had been received from four parties, including Party B, an asset management firm focused on direct lending to small and medium sized

41

Table of Contents

companies in North America, Party C, a publicly-traded BDC, the MAST Group and Party D, a publicly-traded BDC:

•

Party B proposed a contribution to Full Circle of a loan portfolio with a fair market value of approximately $90 million in exchange for newly issued shares of Full Circle and an assumption of $30 million in third party debt.



•

Party C proposed an acquisition of 100% of the issued and outstanding shares of the common stock of Full Circle valued at a discount to NAV, in exchange for cash and common stock of Party C. Party C's proposal was conditioned on the completion of the transaction contemplated between Full Circle and Party A.



•

Party D proposed, subject to further due diligence, an acquisition of 100% of the issued and outstanding shares of the common stock of Full Circle, in exchange for (a) cash and common stock of Party D if the contemplated transaction between Party A and Full Circle was executed, or (b) 100% common stock of Party D in the absence of a concurrent transaction with Party A.



•

The MAST Group proposed a merger of Full Circle with and into a newly-formed entity that would be capitalized with (a) a portfolio of fixed income securities with a fair market value of approximately $90 million and (b) $30 million in cash.

        At that meeting, the Special Committee also elected to discontinue negotiations with Party D. Also at the meeting, the Special Committee discussed a possible liquidation of Full Circle. Among other things, the Special Committee discussed the fact that the liquidation process would be executed over an extended period of time and that, during that time period, Full Circle's assets would continue to be subject to market risk, the price that Full Circle would be able to obtain for its assets would be difficult to predict, the costs of liquidation likely would be substantial and there would be significant delay in distributing the full proceeds of the liquidation to Full Circle's stockholders.

        On February 16, 2016, Full Circle issued a press release announcing the formation of the Special Committee and the Special Committee's review of potential strategic alternatives.

        On February 26, 2016, Party A confirmed that the proposal contemplated by its letter of intent had been withdrawn. Subsequently, Party C indicated that it was no longer interested in pursuing a potential transaction.

        On March 10, 2016, the Special Committee held a telephonic meeting that also was attended by representatives of its legal and financial advisors and Full Circle Advisors. Representatives of Houlihan Lokey informed the Special Committee that, following the issuance of the press release announcing the Special Committee's review of strategic alternatives, Houlihan Lokey had received approximately 15 inbound calls from counterparties expressing interest in Full Circle, three of whom entered into confidentiality agreements with Full Circle. Two of the parties subsequently withdrew their interest, and the third party, Party E, a publicly-traded BDC, proposed an acquisition of 100% of the issued and outstanding shares of the common stock of Full Circle, in a stock-for-stock merger, and valuing Party E at the greater of its NAV per share or its stock price and valuing Full Circle at a discount to NAV.

        On March 17, 2016, members of the Special Committee met with representatives of the MAST Group to discuss MAST's capabilities and experience and to receive a presentation from the MAST Group's representatives regarding the MAST Group's visions and proposed investment strategies for the combined company. The Special Committee previously had received background information regarding MAST and its principals.

        From March 14, 2016 to March 30, 2016, the Special Committee and its advisors held conference calls with potential strategic alternative partners to discuss their revised proposals as well as topics such as proposed transaction structure, portfolio diligence and asset diversity and compliance. On March 23, 2016, representatives of Clifford Chance and counsel to the MAST Group had a discussion by telephone regarding transaction structuring. During this period, in response to requests from the Special Committee, the MAST Group made various changes to the terms of its proposal, including by agreeing to reduce the base management fee percentage from 1.75% to 1.50% and by agreeing to an increase in the size of the Special Distribution, from $3.4 million plus accumulated undistributed earnings to $5.0 million plus accumulated undistributed earnings. The parties also agreed in

42

Table of Contents

principle to a mechanism for setting the exchange ratio based on the NAV-to-NAV concept, including as to the use in certain circumstances of independent third party valuations.

        On April 4, 2016, the Special Committee held a conference call that also was attended by representatives of its legal and financial advisors and of Full Circle Advisors to discuss revised proposals received from Party E and the MAST Group. Representatives of Houlihan Lokey informed the Special Committee that (1) an updated proposal had been received from the MAST Group, (2) updated valuation details ("marks") had been received from Party E and (3) Party B had withdrawn from the process. At the request of the Special Committee, representatives of Houlihan Lokey reviewed and discussed certain preliminary financial analyses with respect to the received proposals, and responded to questions from members of the Special Committee The MAST Group and Party E had each requested exclusivity.

        The Special Committee then discussed the proposals from the MAST Group and Party E in more detail. The Special Committee discussed the respective levels of execution risk associated with the two proposals.

        After further deliberation, the Special Committee directed Houlihan Lokey to ask the MAST Group to improve or clarify certain aspects of its proposal.

        Following this call, representatives from Houlihan Lokey communicated the Special Committee's feedback to representatives of the MAST Group. On April 5, 2016, the MAST Group submitted an updated proposal.

        Also on April 5, 2016, representatives of Houlihan Lokey communicated the Special Committee's feedback on the term sheet received from Party E to Party E and its advisors.

        On April 6, 2016, the Special Committee held a conference call that was also attended by representatives of its legal and financial advisors and Full Circle Advisors to discuss the revised term sheet received from the MAST Group. A representative of Houlihan Lokey provided an update on the recent discussions on behalf of the Special Committee with the MAST Group including the MAST Group's proposal that Full Circle issue a pre-closing special distribution in the amount of $3.4 million to Full Circle stockholders and that the MAST Group would be willing to commit to the combined company implementing a post-closing $10 million share repurchase plan (which was later increased to $15 million). The MAST Group also proposed to make certain commitments regarding the terms of the combined company's post-closing investment management agreement.

        After deliberation, the Special Committee directed Houlihan Lokey to contact the MAST Group to propose (a) a pre-closing special distribution in the amount of $5 million and (b) a two-year period during which no amendments would be made to the combined company's post-closing investment management agreement.

        On April 11, 2016, the Special Committee together with representatives of Clifford Chance and Houlihan Lokey, participated in a conference call with the MAST Group and its counsel. The parties discussed various details of the MAST Group's proposal. Following the call, the Special Committee directed Clifford Chance to prepare an exclusivity agreement with the MAST Group providing for a 30-day exclusivity period.

        From April 4, 2016 through April 14, 2016, multiple drafts of the MAST Group term sheet and exclusivity agreement were exchanged between the parties. On April 14, 2016, the parties finalized the term sheet and executed the exclusivity agreement, which provided for a 30-day exclusivity period.

        On April 18, 2016, the MAST Group provided the Special Committee and its advisors with draft transaction documents.

        On April 22, 2016, the Special Committee held a conference call with its legal and financial advisors to discuss the draft transaction documents that had been provided by the MAST Group.

        On April 26, 2016, at the request of the Special Committee, representatives of Full Circle Advisors and Mr. Sell visited the offices of MAST in Boston, Massachusetts to review financial and other information relating to the MAST portfolio.

        On April 28, 2016, Clifford Chance sent the MAST Group and its counsel comments on the transaction documents. On April 29, 2016, legal counsel for each of the Special Committee and the MAST Group held a conference call to discuss the draft transaction documents. On May 3, 2016, counsel to the MAST Group sent revised drafts of the transaction documents to Clifford Chance.

43

Table of Contents

        On May 4, 2016, the Special Committee held a telephonic meeting that was also attended by representatives of its legal and financial advisors and Full Circle Advisors to discuss the list of issues in the draft transaction documents which was distributed by Clifford Chance prior to the call. The parties discussed, among other issues, the proposed portfolio to be contributed by MAST prior to the closing of the transaction, the measurement date for valuation of such contribution and potential deal protection provisions. At the conclusion of this call, the Special Committee directed its legal advisors to send the issues list to the MAST Group.

        On May 5, 2016, Mr. Biderman (the chairman of the Special Committee), together with representatives of Full Circle Advisors, Clifford Chance and Houlihan Lokey, met with representatives of the MAST Group and its legal counsel for in-person negotiations at the offices of Skadden, Arps, Slate, Meagher & Flom LLP ( Skadden Arps ). The parties discussed the outstanding issues with respect to the draft transaction documents and next steps.

        Between May 5, 2016 until June 23, 2016, legal advisors to the Special Committee and Full Circle and the MAST Group exchanged multiple drafts of the transaction documents.

        On May 12, 2016, the Special Committee held a telephonic meeting that was also attended by Mr. Sell, representatives of its legal and financial advisors and Full Circle Advisors. The parties discussed the mechanics, composition and valuation of the portfolio to be contributed by MAST as well as the valuation methodology to be used to accomplish the "NAV-to-NAV" concept that had been agreed in principle with the MAST Group. Clifford Chance provided a summary of the process and timing for the transaction after execution of the transaction documents and discussed key issues outstanding in the draft transaction documents. Later that evening, upon the request of the MAST Group, the Special Committee approved a one week extension of the exclusivity period, from May 13, 2016 to May 20, 2016.

        On June 5, 2016, Mr. Biderman, along with representatives from Houlihan Lokey, Clifford Chance and Full Circle Advisors, held a conference call to discuss outstanding issues in the draft transaction documents.

        On June 6, 2016, the Special Committee held a telephonic meeting that was attended by its legal and financial advisors and Full Circle Advisors. At the request of the Special Committee, representatives of Houlihan Lokey reviewed and discussed certain preliminary financial analyses with respect to Full Circle and the proposed transaction and responded to questions from members of the Special Committee. The members of the Special Committee discussed the financial analyses and underlying assumptions at length. Following this discussion, the participants discussed process and next steps.

        On June 7, 2016, the representative of Clifford Chance and the MAST Group participated in a conference call to discuss outstanding issues in the draft transaction documents. Following this call, revised drafts of the transaction documents were exchanged.

        On June 10, 2016, Mr. Biderman and representatives from Clifford Chance and Houlihan Lokey held a conference call to discuss the portfolio to be contributed by MAST and the expected timing for contribution of certain assets. Following a discussion, Mr. Biderman directed Houlihan Lokey to discuss with the MAST Group various issues affecting deal protection provisions and the need for clarity around the composition of the portfolio to be contributed.

        On June 16, 2016, the Special Committee, representatives from Clifford Chance, Houlihan Lokey and Full Circle Advisors, Mr. Sell and Mr. Flynn participated in a telephonic meeting. Representatives from Clifford Chance updated the participants regarding the status of the draft transaction documents and proposed timing for the transaction. Following this, representatives from Houlihan Lokey reviewed and discussed their updated preliminary financial analysis with respect to Full Circle and the proposed transaction and responded to questions from members of the Special Committee. Following this discussion, Messrs. Felton, Sell, Stuart and Flynn left the call. The members of the Special Committee and its legal and financial advisors engaged in further discussions regarding Houlihan Lokey's preliminary financial analyses, as well as certain terms included in the draft transaction documents. Following this, representatives from Clifford Chance discussed a detailed written presentation regarding the terms of the proposed Merger Agreement and other draft transaction documents that had been distributed to the participants in advance of the meeting.

44

Table of Contents

        From June 17, 2016 to June 23, 2016, Clifford Chance and Full Circle and Full Circle Advisors and Full Circle Service Company, along with their legal counsel, exchanged multiple drafts of a letter (the Termination Letter ) providing for the future termination of Full Circle's existing investment advisory agreement and administration agreement in accordance with the requirements of the Merger Agreement.

        On June 22, 2016, the Special Committee, representatives from Clifford Chance, Houlihan Lokey and Full Circle Advisors and Mr. Flynn held a conference call to discuss status and next steps. The participants discussed outstanding issues in the draft transaction documents and the composition of the proposed portfolio contribution by MAST.

        On June 23, 2016, the Special Committee held a telephonic meeting which was attended by its financial and legal advisors, representatives from Full Circle, Full Circle Advisors and Mr. Sell and Mr. Flynn. Representatives from Clifford Chance updated the participants on any changes since the last conference call in which such parties participated to the draft transaction documents and the Clifford Chance presentation regarding the Merger Agreement and other draft transaction documents, an updated version of which was circulated to the participants prior to the meeting. The participants also discussed the composition of the MAST portfolio to be contributed prior to closing and the status of changes that the Special Committee had requested in the form of post-closing investment management agreement. Following this discussion, at the request of the Special Committee, Houlihan Lokey reviewed and discussed its financial analyses with respect to Full Circle and with respect to GECC after giving effect to the Formation Transactions and the proposed Merger. Thereafter, at the request of the Special Committee, Houlihan Lokey verbally rendered its opinion to the Special Committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey's written opinion addressed to the Special Committee dated June 23, 2016), as to, as of such date, the fairness, from a financial point of view, to holders of Full Circle common stock of the Merger Consideration to be received by such holders in the Merger pursuant to the Merger Agreement.

        Following this discussion, the Special Committee unanimously adopted resolutions recommending that the Full Circle Board adopt resolutions:

•

declaring that the Merger and the other transactions contemplated by the draft transaction documents are advisable;



•

directing (subject to the terms of the Merger Agreement) that the transactions contemplated by the Merger Agreement, including the Merger, be submitted for consideration at a special meeting of Full Circle's stockholders; and



•

resolving to recommend (subject to the terms of the Merger Agreement) that Full Circle's stockholders vote to approve the Merger.

        Later that day, following the Special Committee's meeting, the Full Circle Board held a telephonic meeting at which Mr. Sell and representatives of Clifford Chance and Houlihan Lokey also were present.

        Following additional discussion, the members of the Full Circle Board unanimously adopted resolutions in which the Full Circle Board:

•

determined that the Merger and the other transactions contemplated by the Merger Agreement are advisable;



•

directed (subject to the terms of the Merger Agreement) that the transactions contemplated by the Merger Agreement, including the Merger, be submitted for consideration at a special meeting of Full Circle's stockholders; and



•

resolved to recommend (subject to the terms of the Merger Agreement) that Full Circle's stockholders vote to approve the Merger.

        Following this meeting, the Merger Agreement, Subscription Agreement and Termination Letter were executed by the relevant parties.

45

Table of Contents

Reasons for the Merger; Recommendation of the Full Circle Board

        The Special Committee is composed of three independent disinterested directors, none of whom is affiliated with the MAST Group or its affiliates, and none of whom is an officer or employee of Full Circle or Full Circle Advisors. The Special Committee unanimously approved the Merger and the other transactions contemplated by the Merger Agreement. The Special Committee unanimously recommended that the Full Circle Board adopt resolutions (1) declaring that the Merger and the other transactions contemplated by the Merger Agreement are advisable, (2) directing (subject to the terms of the Merger Agreement) that the Merger be submitted for consideration at a special meeting of the Full Circle stockholders and (3) resolving to recommend (subject to the terms of the Merger Agreement) that the Full Circle stockholders vote to approve the Merger. Acting upon the Special Committee's recommendation, the Full Circle Board, pursuant to resolutions adopted at a meeting held on June 23, 2016, unanimously (i) declared the Merger and the other transactions contemplated by the Merger Agreement advisable, (ii) directed (subject to the terms of the Merger Agreement) that the Merger be submitted for consideration at a special meeting of the Full Circle stockholders and (iii) resolved to recommend (subject to the terms of the Merger Agreement) that the Full Circle stockholders vote to approve the Merger.

        In reaching its determination and making its recommendation to the Full Circle Board, the Special Committee consulted with its financial and legal advisors and considered various factors. These factors included:

•

the financial terms of the Merger, including the "NAV-to-NAV" methodology to be used in setting the exchange ratio and the fact that the Merger Agreement provides for the declaration and payment of the Special Distribution;



•

the fact that the surviving corporation in the Merger will have greater equity capitalization and total assets than Full Circle, and that the surviving corporation will have net assets of over $190 million—over double the net assets of Full Circle (which were approximately $81 million as of March 31, 2016);



•

the fact that Full Circle Advisors has experienced financial difficulties affecting its ability to continue to serve as Full Circle's investment adviser;



•

the capabilities and resources that GECM is expected to provide in its capacity as the investment adviser to the surviving corporation after the Merger, and the investment strategy that GECM has indicated it intends to implement for the surviving corporation;



•

the terms on which GECM has agreed to serve as investment adviser to the surviving corporation, which the Full Circle Board believes are more favorable in the aggregate than the terms of Full Circle's existing investment management agreement with Full Circle Advisors, notably because the base management fee payable to GECM will be 1.50% of average gross assets, as compared to the fee payable to Full Circle Advisors of 1.75% of average gross assets;



•

the fact that the parent company of GECM will have a substantial equity interest in the surviving corporation immediately following the Merger (expected to represent approximately 15% of the surviving corporation's outstanding shares of common stock) and has agreed to a one year lock- up in respect of those shares; and



•

the financial analyses reviewed by Houlihan Lokey with the Special Committee as well as the oral opinion of Houlihan Lokey rendered to the Special Committee on June 23, 2016 (which was subsequently confirmed in writing by delivery of Houlihan Lokey's written opinion addressed to the Special Committee dated June 23, 2016), as to, as of June 23, 2016, the fairness, from a financial point of view, to the holders of Full Circle common stock of the Merger Consideration to be received by such holders in the Merger pursuant to the Merger Agreement. As described below, Houlihan Lokey's opinion was based on various assumptions, including the assumption that the Merger Consideration would be based on an exchange ratio of 0.2169. Full Circle has not obtained, and does not intend to obtain, an updated opinion from Houlihan Lokey.

Opinion of the Financial Advisor to the Special Committee

        On June 23, 2016, Houlihan Lokey verbally rendered its opinion to the Special Committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey's written opinion addressed to the Special Committee dated June 23, 2016), as to, as of June 23, 2016, the fairness, from a financial point of view, to the

46

Table of Contents

holders of Full Circle common stock of the Merger Consideration to be received by such holders in the Merger pursuant to the Merger Agreement. In this section, the Formation Transactions, the entry into the GECC Investment Management Agreement and the declaration and payment of the Special Distribution are collectively referred as the " Related Transactions " and, together with the Merger, the " Transaction ."

        For purposes of its analyses and opinion, Houlihan Lokey assumed, based on information provided to it as of the date of its opinion, that the Merger Consideration to be received by Full Circle's stockholders in the Merger would be 0.2169 of a share of GECC common stock per share of Full Circle common stock (which is different from the exchange ratio as ultimately determined pursuant to the Merger Agreement, but which was not known as of the date of Houlihan Lokey's opinion—see "Description of the Merger Agreement—Conversion of Shares; Exchange of Shares").

        Houlihan Lokey's opinion was directed to the Special Committee (in its capacity as such) and only addressed the fairness, from a financial point of view, to the holders of Full Circle common stock of the merger consideration to be received by such stockholders in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger or any other agreement, arrangement or understanding entered into in connection therewith or otherwise. The summary of Houlihan Lokey's opinion in this document is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex B to this document and describes the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey's opinion nor the summary of its opinion and the related analyses set forth in this document is intended to be, and do not constitute, advice or a recommendation to the Special Committee, the Full Circle Board, any stockholder of Full Circle or any other person as to how to act or vote with respect to any matter relating to the Merger.

        In arriving at its opinion, Houlihan Lokey, among other things:

1.

reviewed the following agreements and documents:



a.

a draft, dated June 22, 2016, of the Merger Agreement; and



b.

a draft, dated June 23, 2016, of the Subscription Agreement;



2.

reviewed certain publicly available business and financial information relating to Full Circle and the Initial GECC Portfolio that Houlihan Lokey deemed to be relevant;



3.

reviewed certain information relating to the historical and current operations, financial condition and prospects of Full Circle made available to Houlihan Lokey by Full Circle, including the net asset value of Full Circle (collectively, the Full Circle Financial Information );



4.

reviewed certain pro forma financial and other information relating to the operations, financial condition and prospects of GECC after giving effect to the transactions contemplated by the Subscription Agreement and the Merger Agreement (together, the Transaction ) made available to Houlihan Lokey by MAST, including financial projections prepared by the management of MAST relating to the net asset value and future financial performance of GECC after giving effect to the Transaction (the MAST Projections for GECC ) as adjusted at the direction of the Special Committee (the Adjusted Projections for GECC );



5.

spoke with certain members of the managements of Full Circle and MAST and certain of their representatives and advisors regarding the respective businesses, operations, financial condition and prospects of Full Circle, the Initial GECC Portfolio, GECC, the Transaction and related matters;



6.

compared the financial and operating performance of Full Circle and GECC with that of other companies with publicly traded equity securities that Houlihan Lokey deemed to be relevant;



7.

considered the publicly available financial terms of certain transactions that Houlihan Lokey deemed to be relevant;

47

Table of Contents

8.

reviewed the current and historical market prices and trading volume for certain of Full Circle's publicly traded securities, and the current and historical market prices and trading volume of certain of the publicly traded securities included in the Initial GECC Portfolio; and



9.

conducted such other financial studies, analyses and inquiries and considered such other information and factors as Houlihan Lokey deemed appropriate.

        Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to it, discussed with or reviewed by it, or publicly available, and did not assume any responsibility with respect to such data, material and other information. Management of MAST advised Houlihan Lokey, and Houlihan Lokey assumed, that the MAST Projections for GECC were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the future financial results and condition of GECC after giving effect to the Transaction. In addition, the Special Committee advised Houlihan Lokey, and Houlihan Lokey assumed, that the Adjusted Projections for GECC reflected the best currently available estimates and judgments of the Special Committee as to the future financial results and condition of GECC after giving effect to the Transaction. Houlihan Lokey expressed no opinion with respect to the MAST Projections for GECC, the Adjusted Projections for GECC or, in each case, the assumptions on which they were based. Houlihan Lokey was advised by the Special Committee that the Full Circle Financial Information and the Adjusted Projections for GECC were a reasonable basis to evaluate Full Circle and the Merger and was directed to use and rely upon the Full Circle Financial Information and the Adjusted Projections for GECC for purposes of Houlihan Lokey's analyses and opinion. Houlihan Lokey relied upon and assumed, without independent verification, that there had been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of Full Circle or the Initial GECC Portfolio since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would be material to Houlihan Lokey's analyses or opinion, and that there was no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading.

        Houlihan Lokey relied upon and assumed, without independent verification, that: the representations and warranties of all parties to the Merger Agreement, the Subscription Agreement and all other related documents and instruments referred to therein were true and correct; each party to all such agreements and such other related documents and instruments would fully and timely perform all of the covenants and agreements required to be performed by such party; all conditions to the consummation of the Transaction would be satisfied without waiver thereof, and; the Transaction would be consummated in a timely manner in accordance with the terms described in all such agreements and such other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey also assumed, with the Special Committee's consent, that the Transaction would qualify as a reorganization under the provisions of Section 368(a) of the Code.

        Houlihan Lokey relied upon and assumed, without independent verification, that the Transaction would be consummated in a manner that complies in all respects with all applicable federal and state statutes, rules and regulations; and all governmental, regulatory, and other consents and approvals necessary for the consummation of the Transaction would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would result in the disposition of any assets of Full Circle or the Initial GECC Portfolio, or otherwise have an effect on the Transaction, Full Circle, GECC or any expected benefits of the Transaction that would be material to Houlihan Lokey's analyses or opinion.

        In addition, Houlihan Lokey relied upon and assumed, without independent verification, that the final forms of any draft documents identified above would not differ in any respect from the drafts of said documents.

        Furthermore, in connection with its opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of Full Circle or the MAST Funds or any other party, and, other than as described above and the appraisals or evaluations conducted in the ordinary course of business as part of their reporting obligations by or on behalf of Full Circle and the MAST Funds of their respective assets and liabilities, Houlihan Lokey was not provided with any such appraisal or evaluation. Houlihan Lokey did not

48

Table of Contents

estimate, and expressed no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey did not undertake any independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which Full Circle, GECC, the MAST Funds, MAST or Great Elm Capital Group was or may have been a party or was or may have been subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which Full Circle, GECC, the MAST Funds, MAST or Great Elm Capital Group was or may have been a party or was or may have been subject.

        The opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, the date of the opinion. As the Special Committee was aware, some of the information and assumptions upon which Houlihan Lokey was authorized to rely for purposes of its analyses and opinion were subject to change, and consequently the merger consideration assumed for purposes of Houlihan Lokey's analyses and opinion may differ from the actual merger consideration as ultimately calculated in accordance with the terms of the Merger Agreement. Houlihan Lokey did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to Houlihan Lokey's attention after the date of its opinion. Houlihan Lokey did not express any opinion as to what the value of the Full Circle common stock, or GECC common stock actually would be when exchanged or issued pursuant to the Transaction or the price or range of prices at which the Full Circle common stock or GECC common stock may be purchased or sold, or otherwise be transferable, at any time. Houlihan Lokey assumed that the GECC common stock to be issued in the Merger to the holders of Full Circle common stock would be listed on the NASDAQ Global Select Market.

        Houlihan Lokey's opinion was furnished for the use of the Special Committee (in its capacity as such) in connection with its evaluation of the Merger and may not be used for any other purpose without Houlihan Lokey's prior written consent. Under the terms of its engagement by the Special Committee, neither Houlihan Lokey's opinion nor any other advice or services rendered by it in connection with the proposed Transaction or otherwise should be construed as creating, and Houlihan Lokey should not be deemed to have, any fiduciary duty to or agency relationship with the Special Committee, the Full Circle Board, Full Circle, any security holder or creditor of Full Circle or any other person, regardless of any prior or ongoing advice or relationships. The opinion is not intended to be, and does not constitute, a recommendation to the Special Committee, the Full Circle Board, any security holder or any other party as to how to act or vote with respect to any matter relating to the Transaction or otherwise.

        Houlihan Lokey's opinion only addressed the fairness, from a financial point of view, to the holders of Full Circle common stock of the merger consideration to be received by the holders of Full Circle common stock in the Merger pursuant to the Merger Agreement and, other than assuming the consummation of the Formation Transactions and the payment of the Special Distribution, did not address any other aspect or implication of the Merger or any aspect or implication of any related transaction or any agreement, arrangement or understanding entered into in connection with the Transaction or otherwise, including, without limitation, the Subscription Agreement or the GECC Investment Management Agreement. Houlihan Lokey was not requested to opine as to, and its opinion did not express an opinion as to or otherwise address, among other things: the underlying business decision of the Special Committee, the Full Circle Board, Full Circle, its security holders or any other party to proceed with or effect the Transaction; the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the Transaction or otherwise (other than the merger consideration to the extent expressly specified in the opinion); the fairness of any portion or aspect of the Transaction to the holders of any class of securities, creditors or other constituencies of Full Circle, GECC, the MAST Funds, MAST, Great Elm Capital Group, or to any other party, except if and only to the extent expressly set forth in the last sentence of the opinion; the relative merits of the Transaction as compared to any alternative business strategies or transactions that might have been available for Full Circle or any other party; the fairness of any portion or aspect of the Transaction to any one class or group of Full Circle's or any other party's security holders or other constituents vis-à-vis any other class or group of Full Circle's or such other party's security holders or other constituents (including, without limitation, the fairness of the merger consideration relative to the number of shares of GECC, as the surviving corporation in the Merger, into which shares of GECC outstanding prior to the Merger were converted or any allocation of any consideration amongst or within such classes or groups

49

Table of Contents

of security holders or other constituents); whether or not Full Circle, GECC, the MAST Funds, MAST, Great Elm Capital Group, their respective security holders or any other party is receiving or paying reasonably equivalent value in the Transaction; the solvency, creditworthiness or fair value of Full Circle, GECC, the MAST Funds, MAST, Great Elm Capital Group or any other participant in the Transaction, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters; or the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the Transaction, any class of such persons or any other party, relative to the merger consideration or otherwise.

        Furthermore, Houlihan Lokey did not express any opinion, counsel or interpretation regarding matters that require legal, regulatory, environmental, executive compensation, accounting, insurance, tax or other similar professional advice. Houlihan Lokey assumed that such opinions, counsel or interpretations had been or would be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of the Special Committee, on the assessments by the Special Committee, the Full Circle Board, Full Circle and their respective advisors, as to all legal, regulatory, environmental, executive compensation, accounting, insurance and tax matters with respect to Full Circle and the Transaction or otherwise.

        In preparing its opinion to the Special Committee, Houlihan Lokey performed a variety of analyses, including those described below. The summary of Houlihan Lokey's analyses is not a complete description of the analyses underlying Houlihan Lokey's opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither Houlihan Lokey's opinion nor its underlying analyses is readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching Houlihan Lokey's overall conclusion with respect to fairness, Houlihan Lokey did not make separate or quantifiable judgments regarding individual analyses. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying Houlihan Lokey's analyses and opinion.

        In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. No company, transaction or business used in Houlihan Lokey's analyses for comparative purposes is identical to Full Circle or the proposed Merger and an evaluation of the results of those analyses is not entirely mathematical. The estimates contained in the MAST Projections for GECC and the Adjusted Projections for GECC and the implied reference range values indicated by Houlihan Lokey's analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of Full Circle. Much of the information used in, and accordingly the results of, Houlihan Lokey's analyses are inherently subject to substantial uncertainty.

        Houlihan Lokey's opinion was only one of many factors considered by the Special Committee in evaluating the proposed Merger. Neither Houlihan Lokey's opinion nor its analyses were determinative of the merger consideration or of the views of the Special Committee with respect to the Merger. The type and amount of consideration payable in the Merger were determined through negotiation among Full Circle and the MAST Group, and the decision to enter into the Merger Agreement was solely that of the Special Committee and the Board.

        The following is a summary of the material financial analyses performed by Houlihan Lokey in connection with the preparation of its opinion and reviewed with the Special Committee on June 23, 2016. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses

50

Table of Contents

summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey's analyses.

        For purposes of its analyses, Houlihan Lokey compared the implied equity valuation reference ranges per share of Full Circle common stock being exchanged in the Merger to the implied equity valuation reference ranges of the merger consideration. The Special Committee advised Houlihan Lokey and directed Houlihan Lokey to assume that, for purposes of its analyses and opinion, immediately prior to the Merger, the only assets and liabilities of GECC would be (A) the $30 million in cash contributed by Great Elm Capital Group to GECC in the Formation Transactions, (B) the Initial GECC Portfolio, and (C) expenses incurred by GECC, and, in accordance with the Subscription Agreement, the expenses of MAST and Great Elm Capital Group in connection with the Transaction, which for purposes of Houlihan Lokey's analyses and opinion the Special Committee directed Houlihan Lokey to assume would be $1.1 million; the net asset value of the Initial GECC Portfolio immediately prior to the Merger would be $90 million; the net asset value of Full Circle would, immediately prior to the Merger, be $73.1 million; the number of shares of Full Circle common stock issued and outstanding immediately prior to the Merger would be 22,472,243 shares; the number of shares of GECC common stock issued and outstanding immediately following the Merger would be 12,803,978 shares; and the Merger Consideration would be 0.2169 of a share of GECC common stock for each share of Full Circle common stock.

        In addition, for purposes of its analyses and opinion, Houlihan Lokey treated the Special Distribution as if paid prior to the consummation of the Merger and consequently did not include the Special Distribution in the value of the shares of Full Circle common stock being exchanged in the Merger.

        For purposes of its analyses, Houlihan Lokey reviewed a number of financial metrics, including:

•

Net Asset Value Per Share—generally, the total value of all assets, less any liabilities, of the relevant company, divided by the number of shares outstanding of such company as of a specified date;



•

Net Investment Income Per Share—generally, the amount of the relevant company's income received from investment assets minus associated investment expenses for a specified period, divided by the number of shares outstanding of such company; and



•

Dividend Per Share—generally, the annualized amount of the relevant company's cash distribution for a specified period, divided by the number of shares outstanding of such company.

        Unless the context indicates otherwise, share prices used in the selected companies analysis described below were based on the closing price of the common stock of the selected companies listed below as of June 22, 2016, and transaction values for the selected transactions analysis described below were calculated on an equity value basis based on the announced transaction equity price and other public information available at the time of the announcement. The estimates of future financial performance of GECC relied upon for the financial analyses described below were based on the Adjusted Projections for GECC. The estimates of the future financial performance of the selected companies listed below were based on publicly available research analyst estimates for those companies.

Selected Companies Analysis .

        Houlihan Lokey reviewed certain financial data for selected companies with publicly traded equity securities that Houlihan Lokey deemed relevant.

        With respect to Full Circle, the financial data reviewed included:

•

Stock price as a multiple of Net Investment Income Per Share for the last twelve months, or "Price-to-LTM Net Investment Income"; and



•

Stock price as a multiple of Net Asset Value Per Share, or "Price-to-Net Asset Value".

51

Table of Contents

        With respect to GECC, the financial data reviewed included:

•

Stock price as a multiple of estimated Net Investment Income Per Share for the year 2017, or "Price-to-2017E Net Investment Income";



•

Estimated Dividend Per Share for the year 2017 as a percentage of closing stock price, or "2017E Dividend Yield"; and



•

Price-to-Net Asset Value.

The selected companies were:

         Market Capitalization in Excess of $250 million:

•

TCP Capital Corp.



•

PennantPark Investment Corporation



•

Medley Capital Corporation



•

THL Credit, Inc.



•

Fidus Investment Corporation

         Market Capitalization of Less than $250 million:

        Houlihan Lokey calculated multiples of Price-to-LTM Net Investment Income, Price-to-2017E Net Investment Income, 2017E Dividend Yields and Price-to-Net Asset Value. This analysis indicated the following low, mean, median, and high multiples and dividend yields:

        Full Circle.  Taking into account the results of the selected companies analysis, Houlihan Lokey applied selected multiple ranges of 7.0x to 8.0x to Full Circle's LTM Net Investment Income Per Share and 0.75x to 0.85x to Full Circle's Net Asset Value Per Share. The selected companies analysis indicated implied equity valuation reference ranges per share of Full Circle common stock after giving effect to the Special Distribution of $2.58 to $2.98 based on LTM Net Investment Income and $2.48 to $2.84 based on Net Asset Value.

        GECC.  Taking into account the results of the selected companies analysis, Houlihan Lokey applied selected multiple ranges of 7.0x to 8.0x to GECC's estimated 2017E Net Investment Income Per Share, 0.90x to 1.02x to GECC's Net Asset Value Per Share, and a selected dividend yield range of 11.0% to 13.0% to GECC's estimated 2017E dividend. The selected companies analysis indicated implied valuation reference ranges for the Merger

52

Table of Contents

Consideration after giving effect to the Transaction of $3.58 to $4.09 per share of Full Circle common stock based on estimated 2017E Net Investment Income, $2.93 to $3.32 per share of Full Circle common stock based on Net Asset Value, and $3.45 to $4.08 per share of Full Circle common stock based on estimated 2017E dividend yield.

        Taking into account the results of the selected transactions analysis, Houlihan Lokey applied a selected multiple range of 0.86 to 0.95x to Full Circle's Net Asset Value. The selected transactions analysis indicated an implied equity value reference range per share of Full Circle common stock after giving effect to the Special Distribution of $2.88 to $3.20.

Discounted Dividend Analysis—GECC

        Houlihan Lokey performed a discounted dividend analysis of GECC after giving effect to the Transaction based on the Adjusted Projections for GECC. Houlihan Lokey applied a range of terminal value multiples of 0.95x to 1.05x to GECC's projected Net Asset Value as of September 30, 2021 and discount rates ranging from 10.5% to 12.5%. The discounted dividend analysis of GECC indicated an implied valuation reference range for the Merger Consideration after giving effect to the Transaction of $3.40 to $3.84 per share of Full Circle common stock.

Other Matters

        Houlihan Lokey was engaged by the Special Committee to act as its financial advisor in connection with a possible merger, consolidation, business combination, sale or other similar strategic transaction. The Special Committee engaged Houlihan Lokey based on Houlihan Lokey's experience and reputation. Houlihan Lokey is regularly engaged to provide financial advisory services in connection with mergers and acquisitions, financings, and financial restructurings. Pursuant to its engagement by the Special Committee, Houlihan Lokey is entitled to a transaction fee based on the value of the Transaction currently estimated to be approximately $1.2 million, of which $500,000 became payable to Houlihan Lokey upon the rendering of its opinion to the Special Committee and the remainder of which is contingent upon the consummation of the Merger. Full Circle has also agreed to reimburse Houlihan Lokey for certain expenses and to indemnify Houlihan Lokey, its affiliates and certain related parties against certain liabilities and expenses arising out of or relating to Houlihan Lokey's engagement.

        In the ordinary course of business, certain of Houlihan Lokey's employees and affiliates, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, Full Circle, the MAST Funds, MAST, Great Elm Capital Group or any other party that may be involved in the Transaction and their respective affiliates or any currency or commodity that may be involved in the Transaction.

        Houlihan Lokey and certain of its affiliates have in the past provided investment banking, financial advisory and/or other financial or consulting services to MAST, or one or more security holders, affiliates and/or portfolio companies of investment funds affiliated or associated with MAST (collectively, with MAST, the MAST Capital Group ) and, more than three years ago and prior to MAST acquiring an interest in Great Elm Capital Group, Great Elm Capital Group, for which Houlihan Lokey and its affiliates have received compensation, including, among other things, during the past two years having acted as financial advisor to MAST as a secured creditor in connection with LightSquared, Inc.'s chapter 11 plan of reorganization, which was confirmed in March 2015. Houlihan Lokey and certain of its affiliates may provide investment banking, financial advisory and/or other

53

Table of Contents

financial or consulting services to Full Circle, GECC, members of the MAST Capital Group, Great Elm Capital Group, other participants in the Transaction or certain of their respective affiliates or security holders in the future, for which Houlihan Lokey and its affiliates may receive compensation. In addition, Houlihan Lokey and certain of its affiliates and certain of Houlihan Lokey and their respective employees may have committed to invest in private equity or other investment funds managed or advised by MAST, other participants in the Transaction or certain of their respective affiliates, and in portfolio companies of such funds, and may have co-invested with members of the MAST Capital Group, other participants in the Transaction or certain of their respective affiliates or security holders, and may do so in the future. Furthermore, in connection with bankruptcies, restructurings, and similar matters, Houlihan Lokey and certain of its affiliates may have in the past acted, may currently be acting and may in the future act as financial advisor to debtors, creditors, equity holders, trustees, agents and other interested parties (including, without limitation, formal and informal committees or groups of creditors) that may have included or represented and may include or represent, directly or indirectly, or may be or have been adverse to, Full Circle, members of the MAST Capital Group, Great Elm Capital Group, other participants in the Transaction or certain of their respective affiliates or security holders, for which advice and services Houlihan Lokey and its affiliates have received and may receive compensation. As the Special Committee is aware, an employee of Houlihan Lokey is a member of the Full Circle Board, and was previously a member of the Special Committee but resigned from the Special Committee in connection with Houlihan Lokey becoming engaged as the Special Committee's financial advisor, and owns shares of Full Circle common stock.

Interests of Certain Persons Related to Full Circle in the Merger

        Certain of Full Circle's directors and officers have interests in the Merger that are different from, or in addition to, the interests of Full Circle's stockholders in general. When the members of the Special Committee evaluated the Merger and negotiated the Merger Agreement, they were aware of and took into account the potentially differing interests of certain of Full Circle's directors and officers described below. The Full Circle Board also was aware of and took into account these differing interests when it decided to accept the Special Committee's recommendation that it approve the Merger and declare it advisable.

Special Committee Compensation .

        In consideration of the time and effort required of the Special Committee, in connection with exploring and evaluating strategic attributes available to Full Circle, Mr. Biderman, as the chairman of the Special Committee has been paid a fee of $25,000 and the other members of the Special Committee have been paid a fee of $15,000 each.

Continuing Directors .

        Pursuant to the Merger Agreement with effect from the Effective Time, Mark C. Biderman, a member of the Full Circle Board and chairman of the Special Committee, and John E. Stuart, a member of the Full Circle Board, will each become a member of the board of directors of GECC.

Consulting and Employment Arrangements .

        John E. Stuart and Gregg J. Felton are the owners of Full Circle Advisors and serve as directors and officers of Full Circle. GECM has offered to enter into a three-year consulting agreement with each of them, pursuant to which they collectively will receive aggregate payments equal to 26% of the management fee received by GECM under the GECC Investment Management Agreement. Michael J. Sell, who is Full Circle's chief financial officer, treasurer and secretary, will serve as the chief financial officer, treasurer and secretary of GECC, for which he will be paid an annual salary and a discretionary bonus.

        Certain of Full Circle's directors and officers are beneficial owners of shares of Full Circle common stock. See "Full Circle—Control Persons and Principal Stockholders of Full Circle".

Indemnification Insurance .

        The Merger Agreement provides for certain indemnification rights for Full Circle's directors and officers and for the purchase of a "tail" liability insurance policy. See "Description of the Merger Agreement—Additional Covenants—Indemnification; Directors' and Officers' Insurance."

54

Table of Contents

Regulatory Approvals Required for the Merger

        Under the Merger Agreement, the parties' obligations to complete the Merger are subject to GECM having become registered as an investment adviser under the Advisers Act and GECC becoming subject to regulation as a BDC, under the 1940 Act, and to the shares of the surviving corporation's common stock having been authorized for listing on the NASDAQ Global Select Market. Full Circle and GECC are not aware of any other regulatory approvals applicable to the Merger that have not been obtained.

Third Party Consents Required for the Merger

        Other than the Full Circle stockholders' approval, there are no third party consents that are a condition to the closing of the Merger.

Public Trading Markets

        GECC intends to apply to have its common stock listed on the NASDAQ Global Select Market under the symbol "GECC." Full Circle common stock trades on NASDAQ under the symbol "FULL." Upon completion of the Merger, Full Circle common stock will be delisted from NASDAQ and thereafter will be deregistered under the Exchange Act.

Board of Directors and Management of the Combined Company Following Completion of the Merger

        Upon completion of the Merger, GECM will be GECC's investment adviser and administrator replacing Full Circle Advisors and Full Circle Service Company LLC.

        The directors of GECC are expected to be:

        The officers of GECC are expected to be:

55

Table of Contents

CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

         The following discussion summarizes certain material U.S. federal income tax consequences to Full Circle's stockholders of the Merger, the Special Distribution and the receipt of shares of GECC common stock in the Merger in exchange for shares of Full Circle common stock. This discussion is based on the Code, applicable U.S. Treasury regulations, judicial authority and administrative rulings and practice (including administrative practices expressed in private letter rulings which are binding on the IRS only with respect to the particular taxpayers who requested and received those rulings), all as of the date of this document and all of which are subject to change, including changes with retroactive effect. The discussion below does not address any state, local or foreign taxes or the tax on net investment income. Your tax treatment may vary depending upon your particular situation. You also may be subject to special rules not discussed below if you are a certain kind of Full Circle stockholder, including, but not limited to: an insurance company; a tax-exempt organization; a financial institution or broker-dealer; a holder of Full Circle common stock as part of a hedge, straddle or conversion transaction; a person or entity that does not hold Full Circle common stock as a capital asset at the time of the Merger; an entity taxable as a partnership for U.S. federal income tax purposes (or a holder of interests in such an entity); a trader in securities that elects to use a mark-to-market method of accounting for securities holdings; a stockholder whose functional currency is not the U.S. dollar; non-U.S. stockholders (as defined below) engaged in a trade or business in the United States; persons who have ceased to be U.S. citizens or to be taxed as resident aliens or; individual non-U.S. stockholders present in the United States for 183 days or more during a taxable year.

         Neither Full Circle nor GECC has requested an advance ruling from the IRS as to the U.S. federal income tax consequences of the Merger or any related transactions, nor will such a ruling be requested. The IRS could adopt positions contrary to those discussed below and such positions could be sustained. You are urged to consult with your tax advisors and financial planners as to the particular tax consequences of the Merger to you, including the applicability and effect of any state, local or foreign laws and the effect of possible changes in applicable tax laws.

        You are a "U.S. stockholder" if you are a beneficial owner of shares of Full Circle common stock (and, after the Merger, of GECC common stock) and for U.S. federal income tax purposes you are:

•

an individual who is a citizen or resident of the United States;



•

a corporation created or organized in or under the laws of the United States, any state therein or the District of Columbia;



•

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or



•

a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust.

        You are a "non-U.S. stockholder" if you are a beneficial owner of shares of Full Circle common stock (and, after the Merger, of GECC common stock) and for U.S. federal income tax purposes you are:

•

a nonresident alien individual;



•

a foreign corporation; or



•

a foreign estate or trust.

        If a partnership or other entity that is classified as a partnership for U.S. federal income tax purposes holds the GECC common stock, the U.S. tax treatment of the partnership and each partner generally depends on the status of the partner, the activities of the partnership and certain determinations made at the partner level. A partnership that holds shares of Full Circle common stock should consult its tax advisors regarding the U.S. federal income tax consequences of the Merger and of the subsequent ownership and disposition of any shares of GECC common stock acquired in the Merger by the partnership.

Tax Consequences of the Merger

        GECC and Full Circle intend that the Merger will qualify as a "reorganization," within the meaning of Section 368(a) of the Code, with respect to Full Circle and its stockholders. Provided the Merger qualifies as a

56

Table of Contents

reorganization, and subject to the discussion below regarding the receipt of cash instead of a fractional share of GECC common stock, generally for U.S. federal income tax purposes:

•

you will not be required to recognize gain or loss upon the exchange of your Full Circle common stock for GECC common stock in the Merger;



•

your tax basis in the GECC common stock received in the Merger will equal your tax basis in your Full Circle common stock immediately before the Merger;



•

your holding period for the GECC common stock you receive in the Merger will include the period for which you held the Full Circle common stock exchanged therefor;



•

no gain or loss will be recognized by Full Circle upon the transfer of its assets and the assumption of its liabilities by GECC pursuant to the Merger;



•

no gain or loss will be recognized by GECC upon the receipt of Full Circle's assets and the assumption of Full Circle's liabilities pursuant to the Merger;



•

GECC's tax basis in the assets of Full Circle transferred pursuant to the Merger will be the same as Full Circle's tax basis in those assets immediately before the Merger;



•

GECC's holding period in the assets of Full Circle transferred pursuant to the Merger will include the period for which Full Circle held the assets; and



•

GECC will succeed to, and take into account the items of Full Circle described in Section 381(c) of the Code, subject to the conditions and limitations in the Code.

        The Merger may not qualify as a "reorganization" within the meaning of Section 368(a) of the Code with respect to GECC. Consequently, GECC may be required to recognize gain or loss as a result of the Merger, generally reflecting any change in the value of the Initial GECC Portfolio between the time it was acquired by GECC and the date of the Merger. GECC expects that any such gain or loss would be negligible.

Cash Instead of a Fractional Share

        The Merger Agreement provides that no fractional shares of GECC common stock will be issued in the Merger and that cash will be paid in lieu of any fractional share. If you receive cash instead of a fractional share of GECC common stock you will be treated as having received the fractional share of GECC common stock pursuant to the Merger and as having then sold that fractional share of GECC common stock for cash. As a result, you generally will recognize gain or loss equal to the difference between the amount of cash received and your tax basis in your fractional share of GECC common stock. This gain or loss generally will be a capital gain or loss and will be long-term capital gain or loss if, as of the effective time, your holding period for the shares (including the holding period of Full Circle common stock surrendered therefor) is greater than one year. The deductibility of capital losses is subject to limitations.

GECC's Pre-Merger Status as a Regulated Investment Company

        GECC will not qualify as a RIC, and the Merger will not take place, during GECC's first taxable year. GECC expects to adopt a fiscal and taxable year ending on [        ,        ] and accordingly GECC expects that its first taxable year will end on [        ,        ] (GECC's First Taxable Year ). Before the end of its First Taxable Year, GECC will acquire the Initial GECC Portfolio and file an election to be regulated as a BDC under the 1940 Act. The Merger will not occur until the start of the following taxable year, which will end on [        ,        ], 2017 (GECC's Second Taxable Year ). GECC expects to elect and qualify to be treated as a RIC beginning in its Second Taxable Year.

        Because GECC will not have been a RIC since its formation, the election by GECC to be treated as a RIC commencing with its Second Taxable Year will have the following tax consequences. First, U.S. tax rules prohibit a RIC from having accumulated earnings and profits at the end of its taxable year from any period that precedes it becoming a RIC. To comply with this requirement, GECC will be required to distribute all of its earnings and profits from its First Taxable Year to its stockholders, before the end of its Second Taxable Year. Second, GECC will be required to pay U.S. corporate income tax on income it earns during its First Taxable Year. GECC expects, based on the nature of the Initial GECC Portfolio and the relatively short period of time since the Formation Transactions, that any such corporate income tax liability will be negligible. Third, GECC may be required to pay

57

Table of Contents

U.S. corporate income tax on any appreciation in the Initial GECC Portfolio that occurred in GECC's First Taxable Year, if GECC later sells or otherwise recognizes gain on the disposition of any of Initial GECC Portfolio. Because GECC expects to own the Initial GECC Portfolio for only a short time before the close of its First Taxable Year, GECC expects that any such appreciation will be negligible. Any payments of such corporate income tax would reduce the amount of cash that is available for distributions to you.

        GECC expects to elect RIC status in its taxable year that includes the Merger, and to be treated as a RIC in that taxable year and in all subsequent taxable years. Accordingly, except as described in the preceding paragraph, GECC believes that following the Merger it will not be subject to U.S. federal income tax liability to the extent that that it makes distributions of its taxable income and gains to its stockholders on an annual basis.

Full Circle's Pre-Merger Income and Gains and the Special Distribution

        Full Circle's taxable year will end on the day the Merger becomes effective. Under applicable U.S. tax rules, Full Circle will be required to declare to its stockholders of record one or more distributions of all of its previously undistributed net investment income and net realized capital gain, in order to maintain Full Circle's treatment as a RIC with respect to its taxable year ending on the date of the Merger and to avoid being subject to any corporate-level U.S. federal income tax on its taxable income for such taxable year. It is expected that the Special Distribution will equal or exceed all of Full Circle's previously undistributed net investment income and net realized capital gains and that as a result Full Circle will not be subject to corporate-level U.S. federal income tax with respect to its final taxable year ending on the date on which the Effective Time occurs.

        The Special Distribution should be treated as a distribution with respect to the Full Circle common stock. Accordingly, if you are a U.S. stockholder, the Special Distribution generally will (subject to the last sentence in this paragraph) be taxable to you as ordinary income or capital gains depending on the type and amount of Full Circle's income to which the Special Distribution is attributable. Distributions of Full Circle's investment company taxable income (which is, generally, Full Circle's net ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to the extent of Full Circle's current or accumulated earnings and profits. To the extent any portion of the Special Distribution is attributable to dividends from U.S. corporations and certain qualified foreign corporations, that portion may be eligible for taxation at a preferential rate if you are taxed at individual rates. In this regard, it is anticipated that the Special Distribution will generally not be attributable to dividends and, therefore, generally will not qualify for the preferential rate. Distributions of Full Circle's net capital gains (which are generally Full Circle's realized net long-term capital gains in excess of realized net short-term capital losses) and properly reported by Full Circle as "capital gain dividends" will be taxable to you as long-term capital gains that are currently taxable at a maximum rate of 20% (without taking into account the net investment income tax or U.S. state or local taxes) if you are taxed at individual rates. Distributions in excess of Full Circle's earnings and profits first will reduce your adjusted tax basis in your Full Circle common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to you.

        If you are a non-U.S. stockholder, the Special Distribution generally will be subject to withholding of U.S. federal tax at a 30% rate (or lower rate if you are eligible for a reduced rate under an applicable income tax treaty) to the extent attributable to a distribution of Full Circle's "investment company taxable income" out of current and accumulated earnings and profits, unless the distributions are properly designated as (1) paid by Full Circle in respect of Full Circle's "qualified net interest income" or (2) paid by Full Circle in connection with Full Circle's "qualified short-term capital gains" (each term, as defined below under "—Taxation of Non-U.S. Stockholders"). If any portion of the Special Distribution is attributable to Full Circle's net capital gains or is in excess of Full Circle's current and accumulated earnings and profits, that portion of the Special Distribution generally will not be subject to U.S. federal income tax. If the Special Distribution is effectively connected with your conduct of a U.S. trade or business, you will not be subject to U.S. federal withholding tax, but you generally will be subject to tax on the Special Distribution in the same manner as a U.S. stockholder, as described in the preceding paragraph.

        If at the time the Merger becomes effective GECC has generated net investment income or net realized capital gain, and has not distributed that income or gain before the Merger, a portion of your subsequent distributions from GECC on the GECC common stock you acquire in the Merger may be treated for tax purposes as a

58

Table of Contents

distribution of such net investment income or realized capital gain, even though that net investment income or capital gain was realized before you acquired your GECC common stock. Similarly, if you acquire GECC common stock in the Merger and GECC holds appreciated securities, a portion of your subsequent distributions from GECC if and when GECC sells the appreciated securities may be treated for tax purposes as distributions of that capital gain, even though the appreciation in the value of the securities occurred before you acquired your GECC common stock.

Full Circle's Pre-Merger Capital Loss Carryforwards and Unrealized Losses

        On the date of the Merger, Full Circle expects to have significant accumulated capital loss carryforwards and unrealized capital losses (i.e., unrealized losses reflecting the excess of Full Circle's tax basis in its capital assets over their fair market value). Because Full Circle may experience an "ownership change" (described below) as a result of the Merger, the use of Full Circle's pre-Merger accumulated capital loss carryforwards and certain unrealized capital losses (when realized) may be subject to an annual limitation under Sections 382 and 383 of the Code (a Section 382 Limitation ). The annual limitation will equal the product of the fair market value of Full Circle's equity immediately prior to the Merger and the "long-term tax-exempt rate," published by the IRS, in effect at such time. The applicable long-term tax-exempt rate for August 2016 was [     ·     ]%.

        Losses that are subject to the Section 382 Limitation do not expire, and may be carried forward to subsequent taxable years indefinitely. However, if the Section 382 Limitation applies, it may delay GECC's ability to realize a benefit from Full Circle's capital losses, and any such benefit will be shared by all of the stockholders of GECC at the time the losses are used. Therefore, you may receive more capital gain dividends, or receive capital gain dividends sooner, than you otherwise would have received from Full Circle if the Merger had not occurred.

        In general, an "ownership change" occurs if Full Circle's stockholders hold 50% or less of the outstanding shares of GECC immediately following the Merger. Because Full Circle's stockholders are expected to own approximately 38% of GECC's common stock after the Merger, an ownership change may occur and the Section 382 Limitation may apply to GECC after the Merger.

        Additionally, in GECC's taxable year that includes the Merger, the percentage of GECC's capital gain net income (excluding capital loss carryforwards) that can be offset by Full Circle's capital loss carryforwards (not otherwise subject to the Section 382 Limitation) is limited to the percentage of GECC's taxable year that remains following the Merger.

        As of June 30, 2015, for U.S. federal income tax purposes Full Circle had approximately $8.5 million of accumulated capital losses and $24.1 million of unrealized capital losses. These figures will change by the time of the Merger.

U.S. Federal Income Taxation of GECC

        GECC expects to elect to be taxed as a RIC beginning with its Second Taxable Year (the taxable year that will include the Merger). Subject to the matters discussed above under "—Tax Consequences of the Merger—GECC's Pre-Merger Status as a Regulated Investment Company" regarding GECC's initial non-RIC taxable year, GECC generally will not be subject to corporate-level U.S. federal income taxes on any ordinary income or capital gains that GECC earns or recognizes so long as it distributes (or is deemed to distribute) such income and gain to its stockholders as dividends on an annual basis and otherwise meets the requirements to be taxed as a RIC (including, among other things, the 90% Income Test, the Diversification Tests, and the Annual Distribution Requirement, each as described below). GECC will be subject to U.S. federal income tax at regular corporate rates on any net income or net capital gains not distributed to its stockholders.

        In order to qualify as a RIC for U.S. federal income tax purposes, GECC must, among other things:

•

continue to qualify as a BDC under the 1940 Act at all times during each taxable year;



•

derive in each taxable year at least 90% of its gross income from dividends, interest, payments with respect to loans of certain securities, gains from the sale of stock or other securities, net income from certain "qualified publicly traded partnerships," or other income derived with respect to its business of investing in such stock or securities (the 90% Income Test); and

59

Table of Contents

•

diversify its holdings so that at the end of each quarter of the taxable year:



•

at least 50% of the value of its assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of its assets or more than 10% of the outstanding voting securities of the issuer; and



•

no more than 25% of the value of its assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that are controlled, as determined under applicable Code rules, by GECC and that are engaged in the same or similar or related trades or businesses or of certain "qualified publicly traded partnerships" (the Diversification Tests ).

        In addition, to qualify for the special tax treatment as a RIC, GECC must distribute to its stockholders, for each taxable year, at least 90% of its "investment company taxable income," which is generally its ordinary income plus the excess of its realized net short-term capital gains over its realized net long-term capital losses (the Annual Distribution Requirement ).

        GECC will be subject to a 4% nondeductible U.S. federal excise tax on certain undistributed income unless it distributes in a timely manner after the end of the calendar year an amount at least equal to the sum of (1) 98% of its net ordinary income for each calendar year, (2) 98.2% of its capital gain net income for the one-year period ending October 31 in that calendar year and (3) any income recognized, but not distributed, in preceding years (the Excise Tax Avoidance Requirement). For this purpose, however, any ordinary income or capital gain net income retained by GECC that is subject to corporate income tax will be considered to have been distributed. GECC generally will endeavor in each taxable year to make sufficient distributions to its stockholders to avoid any U.S. federal excise tax on its earnings.

GECC Investments

        Certain of the investment practices that GECC expects to follow may subject GECC to special and complex U.S. federal income tax provisions that may, among other things, (1) disallow, suspend or otherwise limit the allowance of certain losses or deductions, including the dividends received deduction, (2) convert lower taxed long-term capital gains and qualified dividend income into higher taxed short-term capital gains or ordinary income, (3) convert ordinary loss or a deduction into capital loss (the deductibility of which is more limited), (4) cause GECC to recognize income or gain without a corresponding receipt of cash, (5) adversely affect the time as to when a purchase or sale of stock or securities is deemed to occur, (6) adversely alter the characterization of certain complex financial transactions and (7) produce income that will not qualify as good income for purposes of the 90% Gross Income Test. GECC will monitor its transactions and may make tax elections and may be required to borrow money or dispose of securities to mitigate the effect of these rules and to prevent GECC's disqualification as a RIC but there can be no assurance that GECC will be successful in this regard.

        GECC may be required to recognize taxable income in circumstances in which GECC does not receive cash. For example, if GECC holds debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, with increasing interest rates or issued with warrants), GECC must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received in the same taxable year. GECC may also have to include in income other amounts that it has not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. Because any original issue discount or other amounts accrued will be included in GECC's investment company taxable income for the year of accrual, GECC may be required to make a distribution to its stockholders in order to satisfy the Annual Distribution Requirement, even though it will not have received any corresponding cash amount. Although it does not presently expect to do so, GECC is authorized to borrow funds, to sell assets and to make taxable distributions of its stock and debt securities in order to satisfy distribution requirements. GECC's ability to dispose of assets to meet its distribution requirements may be limited by (1) the illiquid nature of its portfolio and/or (2) other requirements relating to its qualification as a RIC, including the Diversification Tests. If GECC disposes of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance

60

Table of Contents

Requirement, GECC may make such dispositions at times that, from an investment standpoint, are not advantageous. If GECC is unable to obtain cash from other sources to satisfy the Annual Distribution Requirement, GECC may fail to qualify as a RIC and become subject to tax as an ordinary corporation.

        Under the 1940 Act, GECC is not permitted to make distributions to its stockholders while its debt obligations and other senior securities are outstanding unless certain "asset coverage" tests are met. If GECC is prohibited from making distributions, it may fail to qualify as a RIC and become subject to tax as an ordinary corporation.

        Gain or loss recognized by GECC from warrants it acquires, as well as any loss attributable to the lapse of such warrants, generally will be treated as capital gain or loss and may not offset ordinary income from original issue discount associated with the issuance of such warrants. Such gain or loss will be long-term or short-term capital gain or loss, depending on how long GECC has held the particular warrant. Net capital losses of GECC will not offset GECC's ordinary income (including ordinary income that may arise from original issue discount).

        GECC may in the future purchase securities that are treated for U.S. federal income tax purposes as shares in a passive foreign investment company (a PFIC ). GECC may be subject to U.S. federal income tax on its allocable share of a portion of any "excess distribution" received on, or any gain from the disposition of, such shares even if such income or gain is distributed as a taxable dividend to GECC's stockholders. Additional charges in the nature of interest generally will be imposed on GECC in respect of deferred taxes arising from any such excess distribution or gain. If GECC elects to treat a PFIC as a "qualified electing fund" under the Code (a QEF ), in lieu of the foregoing required inclusions, GECC will be required to include in income each year its proportionate share of the ordinary earnings and net capital gains of the QEF, even if such income is not distributed by the QEF. Alternatively, GECC may elect mark-to-market treatment for a PFIC; in which case, GECC will recognize as ordinary income its allocable share of any increase in the value of such shares, and as ordinary loss its allocable share of any decrease in such value to the extent that any such decrease does not exceed prior increases included in GECC's income. Under either election, GECC may be required to recognize in a year income in excess of distributions from PFICs and proceeds from dispositions of PFIC shares during that year, and GECC must distribute such income to satisfy the Annual Distribution Requirement and the Excise Tax Avoidance Requirement.

        If GECC holds more than 10% of the shares in a foreign corporation that is treated as a controlled foreign corporation ( CFC ), it may be treated as receiving a deemed distribution (taxable as ordinary income) ( subpart F income ) each year from such foreign corporation in an amount equal to its pro rata share of the corporation's income for the taxable year (including both ordinary earnings and capital gains), whether or not the corporation makes an actual distribution during such year. In general, a foreign corporation will be classified as a CFC if more than 50% of the shares of the corporation, measured by reference to combined voting power or value, is owned (directly, indirectly or by attribution) by U.S. Stockholders. A "U.S. Stockholder," for this purpose, is any U.S. person that possesses (actually or constructively) 10% or more of the combined voting power of all classes of shares of a corporation. If GECC is treated as receiving a deemed distribution from a CFC, it will be required to include such distribution in its investment company taxable income regardless of whether it receives any actual distributions from such CFC, and it must distribute such income to satisfy the Annual Distribution Requirement and the Excise Tax Avoidance Requirement.

        Although the Code generally provides that income inclusions from a QEF and subpart F income will be "good income" for purposes of the 90% Income Test to the extent it is distributed to a RIC in the year it is included in the RIC's income, the Code does not specifically provide whether income inclusions from a QEF and subpart F income for which no distribution is received during the RIC's taxable year would be "good income" for the 90% Income Test. The IRS has issued a series of private rulings in which it has concluded that all income inclusions from a QEF and subpart F income included in a RIC's income would constitute "good income" for purposes of the 90% Income Test. Such rulings are not binding on the IRS except with respect to the taxpayer to whom such rulings were issued. Accordingly, although GECC believes that the income inclusions from a QEF and subpart F income that it is required to include in its taxable income would be "good income" for purposes of the 90% Income Test, no guaranty can be made that the IRS would not assert that such income would not be "good income" for purposes of the 90% Income Test. If such income were not considered "good income" for purposes of the 90% Income Test, GECC may fail to qualify as a RIC.

61

Table of Contents

Failure to Qualify as a Regulated Investment Company

        If GECC is unable to qualify for treatment as a RIC, GECC would be subject to tax on all of its taxable income at regular corporate rates, regardless of whether GECC makes any distributions to its stockholders. Distributions would not be required, and any distributions made to GECC's stockholders would be treated as ordinary dividend income that, subject to certain limitations, may be eligible for preferential tax rates applicable to individuals, to the extent of GECC's current and accumulated earnings and profits. Subject to certain limitations under the Code, corporate distributees would be eligible for the dividends-received deduction. Distributions in excess of GECC's current and accumulated earnings and profits would be treated first as a return of capital to the extent of the stockholder's tax basis in the shares of GECC common stock, and any remaining distributions would be treated as a capital gain from a sale or exchange of the stock. If GECC fails to qualify as a RIC for a period greater than two taxable years, to qualify as a RIC in a subsequent year GECC may be subject to regular corporate tax on any net built-in gains with respect to certain of its assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if it had been liquidated) that GECC elects to recognize on requalification or when recognized over the next ten years.

        The remainder of this discussion assumes that GECC qualifies as a RIC at all times following the Merger.

Taxation of U.S. Stockholders

        If you are a U.S. stockholder, distributions by GECC generally will be taxable to you as ordinary income or capital gains. Distributions of GECC's "investment company taxable income" (which is, generally, GECC's net ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to the extent of GECC's current or accumulated earnings and profits, whether paid in cash or reinvested in additional common stock. To the extent you are taxed at individual rates, such distributions paid by GECC to you that are attributable to dividends from U.S. corporations and certain qualified foreign corporations ( Qualifying Dividends ) may be eligible for taxation at a preferential rate. It is anticipated, however, that distributions paid by GECC generally will not be attributable to dividends and therefore generally will not qualify for the preferential rate applicable to Qualifying Dividends. Distributions of GECC's net capital gains (which are generally GECC's realized net long-term capital gains in excess of realized net short-term capital losses) and properly reported by GECC as "capital gain dividends" will be taxable to you as long-term capital gains that are currently taxable at a maximum rate of 20% (without taking into account the net investment income tax or U.S. state or local taxes) if you are taxed at individual rates, regardless of your holding period for your GECC common stock and regardless of whether paid in cash or reinvested in additional common stock. Distributions in excess of GECC's earnings and profits first will reduce your adjusted tax basis in your GECC common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to you from a sale or exchange of the stock.

        Although GECC currently intends to distribute realized net long-term capital gains (i.e., net long term capital gains in excess of net short term capital losses), if any, at least annually, GECC may in the future retain some or all of its realized net long-term capital gains in excess of realized net short-term capital losses, but designate the retained net capital gains as a "deemed distribution." In that case, among other consequences, GECC will pay tax on the retained amount, you will be required to include your share of the deemed distribution in income as if it had been actually distributed to you, and you will be entitled to claim a credit equal to your allocable share of the tax paid thereon by GECC. Because GECC expects to pay tax on any retained capital gains at its regular corporate tax rate, and because that rate currently is higher than the maximum rate payable by U.S. stockholders taxed at individual rates on long-term capital gains, the amount of tax that individual U.S. stockholders will be treated as having paid will exceed the tax they owe on the capital gain distribution and that excess generally may be refunded or claimed as a credit against the U.S. stockholder's other U.S. federal income tax obligations. The amount of the deemed distribution net of such tax will be added to your cost basis for your GECC common stock. In order to utilize the deemed distribution approach, GECC must provide written notice to its stockholders within 60 days after the close of the relevant taxable year. GECC cannot treat any of its investment company taxable income as a "deemed distribution."

        For purposes of determining (1) whether the Annual Distribution Requirement is satisfied for any year and (2) the amount of capital gain dividends paid for that year, GECC may, under certain circumstances, elect to treat a

62

Table of Contents

dividend that is paid during the following taxable year as if it had been paid during the taxable year in question. If GECC makes such an election, you will still be treated as receiving the dividend in the taxable year in which the distribution is made. However, any dividend declared by GECC in October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following year, will be treated as if it had been received by you on December 31 of the year in which the dividend was declared.

        Tax items that are treated differently for alternative minimum tax ( AMT ) purposes must be apportioned between GECC and its stockholders, and this may affect your AMT liabilities. Although regulations explaining the precise method of apportionment have not yet been issued, such items generally will be apportioned in the same proportion that dividends paid to you bear to GECC's taxable income (determined without regard to the dividends paid deduction), unless a different method for a particular item is warranted under the circumstances.

Sale or other Disposition of the GECC common stock

        You will generally recognize taxable gain or loss if you sell or otherwise dispose of your shares of GECC common stock. The amount of gain or loss will be measured by the difference between your adjusted tax basis in the GECC common stock sold and the amount of the proceeds received in exchange therefor. If you acquired GECC common stock in the Merger, your adjusted basis in the GECC common stock will equal your adjusted basis in your Full Circle common stock that was exchanged in the Merger for GECC common stock, as further adjusted after the Merger. Any gain or loss arising from such sale or disposition generally will be treated as long-term capital gain or loss if you held your GECC common stock and the Full Circle common stock for which you received those shares of GECC common stock in the Merger for a combined holding period of more than one year. Otherwise, the gain or loss will be classified as short-term capital gain or loss. However, any capital loss arising from the sale or disposition of shares of GECC common stock held for six months or less will be treated as long-term capital loss to the extent of the amount of capital gain dividends received, or undistributed capital gain deemed received, with respect to such shares. In addition, all or a portion of any loss recognized upon a disposition of shares of GECC common stock may be disallowed if other shares of GECC common stock are purchased (whether through reinvestment of distributions or otherwise) within 30 days before or after the disposition.

        GECC intends to send to you, as promptly as possible after the end of each calendar year, a notice reporting the amounts includible in your taxable income for such year as ordinary income and as long-term capital gain. In addition, the U.S. federal tax status of each year's distributions generally will be reported to the IRS (including the amount of dividends, if any, eligible to be taxed at preferential rates). Dividends that GECC pays generally will not be eligible for the dividends-received deduction or the preferential tax rate applicable to Qualifying Dividends because GECC's income generally will not consist of dividends. Distributions may also be subject to additional state, local and foreign taxes depending on your situation.

Tax Shelter Reporting Requirements

        Under applicable Treasury regulations, if you recognize a loss with respect to shares of $2 million or more (if you are a non-corporate U.S. stockholder) or $10 million or more (if you are a corporate U.S. stockholder) in any single taxable year (or a greater loss over a combination of years), you must file with the IRS a disclosure statement on IRS Form 8886. Had you held the securities held by GECC directly, in many cases you would have been excepted from this reporting requirement, but under current guidance, U.S. stockholders of a RIC are not excepted. Future guidance may extend the current exception from this reporting requirement to U.S. stockholders of most or all RICs. The fact that a loss is reportable under these regulations does not affect the legal determination of whether your treatment of the loss is proper. You should consult your tax advisors to determine the applicability of these regulations in light of your individual circumstances.

Taxation of Non-U.S. Stockholders

        If you are a non-U.S. stockholder, distributions to you of GECC's investment company taxable income will be subject to withholding of U.S. federal tax at a 30% rate (or lower rate if you are eligible for a reduced rate under an income tax treaty) to the extent of GECC's current and accumulated earnings and profits unless an applicable exception applies. If the distributions are effectively connected with your conduct of a U.S. trade or business, GECC will not be required to withhold U.S. federal tax if you comply with applicable certification and disclosure

63

Table of Contents

requirements, although the distributions will be subject to U.S. federal income tax at the rates applicable to U.S. persons and if you are a corporation you may be subject to the branch profits tax. (Special certification requirements apply to a non-U.S. foreign partnership or a foreign trust, and such entities are urged to consult their tax advisors.)

        Subject to the discussion below regarding FATCA, actual or deemed distributions to you of GECC's net capital gains, and gains you realize upon the sale of the GECC common stock, will not be subject to U.S. federal withholding tax and generally will not be subject to U.S. federal income tax unless the distributions or gains, as the case may be, are effectively connected with your conduct of a U.S. trade or business. The tax consequences to non-U.S. stockholders entitled to claim the benefits of an applicable tax treaty or that are individuals that are present in the U.S. for 183 days or more during a taxable year may be different from those described herein. Non-U.S. stockholders are urged to consult their tax advisors with respect to the procedure for claiming the benefit of a lower treaty rate and the applicability of foreign taxes.

        Distributions to you that are properly designated by GECC are generally exempt from U.S. federal withholding tax (subject to the discussion below regarding FATCA), when they are (a) paid by GECC in respect of GECC's "qualified net interest income" (generally, GECC's U.S. source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which GECC is at least a 10% stockholder, reduced by expenses that are allocable to such income), or (b) paid by GECC in connection with GECC's "qualified short-term capital gains" (generally, the excess of GECC's net short-term capital gains over GECC's net long-term capital losses for such taxable year). However, depending on the circumstances, GECC may designate all, some or none of its potentially eligible distributions as derived from such qualified net interest income or from such qualified short-term capital gains, and a portion of such distributions (e.g., derived from interest from non-U.S. sources or any foreign currency gains) would be ineligible for this potential exemption from withholding. To qualify for this exemption from withholding, you must comply with applicable certification requirements relating to your non-U.S. status (including, in general, furnishing the appropriate IRS withholding certificate). Thus, an investment in the GECC common stock by a non-U.S. stockholder may have adverse tax consequences as compared to a direct investment in the assets in which GECC will invest.

        If GECC distributes its net capital gains in the form of deemed rather than actual distributions, you will be entitled to a U.S. federal income tax credit or tax refund equal to your allocable share of the tax GECC pays on the capital gains deemed to have been distributed. In order to obtain the refund, you must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return even if you would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return. If you are a corporate non-U.S. stockholder, distributions (both actual and deemed), and gains realized upon the sale of GECC common stock that are effectively connected to a U.S. trade or business may, under certain circumstances, be subject to an additional "branch profits tax" at a 30% rate (or at a lower rate if provided for by an applicable treaty).

        Non-U.S. persons should consult their tax advisors with respect to the U.S. federal income tax and withholding tax, and state, local and foreign tax consequences of an investment in the GECC common stock.

Backup Withholding

        If you are a U.S. stockholder, Full Circle and GECC may be required to withhold U.S. federal income tax (backup withholding) from all distributions to you (unless you are a corporation, a financial institution, or a stockholder that otherwise qualifies for an exemption) (1) if you fail to furnish Full Circle or GECC (as applicable), or the relevant paying agent, with a correct taxpayer identification number or a certificate that you are exempt from backup withholding or (2) if the IRS notifies Full Circle or GECC that you have failed to properly report certain interest and dividend income to the IRS and to respond to notices to that effect. An individual's taxpayer identification number is his or her social security number.

        If you are a non-U.S. stockholder who is a non-resident alien individual and who is otherwise subject to withholding of federal income tax, you will be subject to information reporting, but you may not be subject to backup withholding on taxable dividends or distributions if you provide Full Circle or GECC (as applicable) or the relevant paying agent with an IRS Form W-8BEN, IRS Form W-8BEN-E, or an acceptable substitute form.

64

Table of Contents

        Backup withholding is not an additional tax. Any amounts withheld from payments made to you may be refunded or credited against your U.S. federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

Foreign Account Tax Compliance

        The Foreign Account Tax Compliance provisions of the U.S. Hiring Incentives to Restore Employment Act (FATCA), and the Treasury regulations promulgated thereunder, generally impose a withholding tax of 30% on (i) certain payments of U.S. source interest, dividends and other fixed or determinable annual or periodical gains, profits, and income and (ii) beginning on January 1, 2019, payments of gross proceeds from the sale, exchange, redemption, retirement or other taxable disposition of property of a type that can produce U.S. source interest or dividends, in each case, to certain non-U.S. entities, including certain foreign financial institutions and investment funds, unless such non-U.S. entity complies with certain reporting and withholding requirements regarding its U.S. account holders and its U.S. owners. Accordingly, the entity through which the GECC common stock is held will affect the determination of whether such withholding is required.

        Consult your tax advisor regarding FATCA's applicability to you and regarding any other tax reporting requirements that may apply to you, including investments made or held through an intermediary.

65

Table of Contents

DESCRIPTION OF THE MERGER AGREEMENT

        The following summary, which includes the material terms of the Merger Agreement, is qualified by reference to the complete text of the Merger Agreement, which is attached as Annex A to this document.

Structure of the Merger

        Subject to the terms and conditions of the Merger Agreement, Full Circle will merge with and into GECC and the separate corporate existence of Full Circle will cease. GECC will be the surviving entity of the Merger and will succeed to and assume all the rights and obligations of Full Circle and will continue its existence as a corporation under Maryland General Corporation Law. The time when the Merger will become effective is the Effective Time.

Closing; Completion of the Proposed Merger

        The closing of the Merger will occur not later than three business days after satisfaction or waiver of all of the conditions that must be met to consummate the Merger as described in the Merger Agreement (other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions at the closing).

Merger Consideration

        If the Merger is consummated, each share of Full Circle common stock issued and outstanding immediately prior to the Effective Time will be automatically converted into the amount of shares of GECC common stock, equal to the Exchange Ratio, without any interest and subject to the payment of cash instead of fractional shares (the Merger Consideration ).

        If at any time between the date of the Merger Agreement and the Effective Time the number of shares of issued or outstanding common stock of Full Circle or GECC has changed as a result of any reclassification, recapitalization, share split (including a reverse share split), or combination, exchange or readjustment of shares, or any share dividend or distribution (including any dividend or distribution of securities convertible into Full Circle common stock or GECC common stock) with a record date during such period, the Exchange Ratio will be equitably adjusted to reflect such change.

        Holders of shares of Full Circle common stock will not receive any fractional shares of GECC common stock in the Merger. Instead, each Full Circle stockholder will be paid an amount in cash (rounded to the nearest whole cent), without interest, equal to the product of (1) the fraction of a share of GECC common stock to which such holder of shares of Full Circle common stock would be entitled and (2) the average of the per share closing prices of Full Circle common stock reported on NASDAQ for the three consecutive trading days ending on and including the trading day immediately preceding the closing day of the Merger.

Dividends and Distributions

        No dividends or other distributions with respect to shares of GECC common stock will be paid to any former Full Circle stockholders who held certificated or book-entry shares and who have not surrendered their certificates to the exchange agent for shares of GECC common stock until such certificates or book-entry shares are surrendered in accordance with the letter of transmittal. Following the surrender of any such certificates or book-entry shares in accordance with the letter of transmittal, the record holders of such certificates or book-entry shares shall be entitled to receive, without interest, the amount of the Special Distribution payable in respect of such shares and the amount of any dividends or other distributions (1) with a record date after the Effective Time payable with respect to shares of GECC common stock exchangeable for such certificates or book-entry shares and previously paid and (2) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time and a payment date subsequent to the surrender of the certificates or book-entry shares.

        The Merger Agreement provides that the Full Circle Board will authorize the Special Distribution (after the satisfaction or waiver of all of the conditions to the Merger, other than conditions that by their terms are to be satisfied at the Closing), but before the day (such day, the Effectiveness Day ) on which the Merger will become effective. The Full Circle Board will set the close of business on the Effectiveness Day as the record date for determining the holders of record of Full Circle common stock entitled to receive the Special Distribution. After the

66

Table of Contents

Effective Time, GECC shall cause the exchange agent, as agent for and on behalf of Full Circle, to pay the Special Distribution to such holders of record of Full Circle common stock.

        " Special Distribution " means a special distribution, payable in cash, in an aggregate amount equal to the sum of:

•

$5,000,000;



•

Full Circle's Undistributed Net Investment income as of the Measurement Date; and



•

the amount of net investment income paid or accrued on Full Circle's investment portfolio and cash from the Measurement Date through the Effective Time.

Conversion of Shares; Exchange of Shares

        The Exchange Ratio was determined as of the Measurement Date by:

•

calculating the net asset value of Full Circle as of the Measurement Date and deducting



•

Full Circle's Undistributed Net Investment Income as of the Measurement Date;



•

an estimate of Full Circle's net investment income from the Measurement Date through the closing date;



•

an estimate of transaction related costs to be incurred by Full Circle through and including the closing date; (to the extent not already deducted from Full Circle's net asset value);



•

the estimated premium for the tail policy of directors' and officers' liability insurance and fiduciary liability insurance and



•

the amount of the Special Distribution;



•

dividing the amount described in the preceding paragraph by 22,472,243 shares of common stock of Full Circle outstanding on the Measurement Date; and



•

dividing the quotient resulting from the preceding paragraph by $15.



•

Pursuant to the Subscription Agreement, the number of shares of GECC stock to be owned by the MAST Funds was determined based on the value of the MAST Portfolio as of the Measurement Date. See "GECC—Formation Transactions."

        At the Effective Time, each share of Full Circle common stock issued and outstanding prior to the Effective Time will no longer be outstanding and will be cancelled and automatically converted into the amount of shares of GECC common stock equal to the Exchange Ratio, subject to the payment of cash instead of fractional shares. Each certificate previously representing any such shares will thereafter represent only (1) the right to receive the Merger Consideration; (2) the right to receive the Special Distribution; and (3) the right to any dividends or other distributions as described in "Description of the Merger Agreement—Dividends and Distributions".

        After the Effective Time, there will be no transfer on the stock transfer books of Full Circle of the shares of Full Circle common stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, certificates or book entry shares representing shares of Full Circle common stock are presented to GECC or the exchange agent for any reason, they will be cancelled and exchanged for shares of GECC common stock and cash in lieu of fractional shares. At the Effective Time, each share of Full Circle common stock issued and outstanding prior to the Effective Time will no longer be outstanding and will be cancelled and automatically converted into the amount of shares of GECC common stock equal to the Exchange Ratio, subject to the payment of cash instead of fractional shares. Each certificate previously representing any such shares will thereafter represent only (1) the right to receive, without any interest, for each such share of GECC common stock the Merger Consideration; (2) the right to receive the Special Distribution; and (3) the right to any dividends or other distributions as described in "Description of the Merger Agreement—Dividends and Distributions".

Letter of Transmittal

        Promptly after the Effective Time, but in any event within five business days, the exchange agent will mail to the holders of Full Circle common stock immediately prior to the Effective Time who held their shares in

67

Table of Contents

certificated or book-entry form a letter of transmittal and instructions for use in surrendering their certificate(s) in exchange for the Merger Consideration, the Special Distribution; and any dividends or other distributions payable with respect to the shares of GECC common stock exchangeable for such certificate(s) as described in "Description of the Merger Agreement—Dividends and Distributions".

        If a holder's certificate for shares of Full Circle common stock has been lost, stolen or destroyed, upon the making of an affidavit by such holder and, if reasonably required by GECC or the exchange agent, the posting of a bond in such reasonable and customary amount as GECC or the exchange agent may require, the exchange agent will deliver in exchange for such lost, stolen or destroyed shares of Full Circle common stock, the shares of GECC common stock and cash in lieu of fractional shares and the amount of the Special Distribution to which such holder is entitled.

Withholding

        GECC and the exchange agent will be entitled to deduct and withhold from any amounts otherwise payable to any Full Circle stockholder such amounts as may be required to be deducted and withheld with respect to the making of such payment under applicable tax laws. To the extent that any amounts are so deducted or withheld and are paid over to the applicable governmental entity, such deducted or withheld amounts will be treated for all purposes as having been paid to the stockholders in respect of whom they were deducted or withheld. U.S. stockholders that properly complete and execute, and submit, the IRS Form W-9 that will be provided with the letter of transmittal sent to Full Circle stockholders after the Merger generally will not be subject to U.S. tax withholding.

Representations and Warranties

        The Merger Agreement contains customary representations and warranties of Full Circle and GECC relating to their respective businesses. Each of the representations and warranties must be true and correct in all respects as of the date of the Merger Agreement and as of the closing date, except for (a) with respect to Full Circle, any failure to be true and correct that would not have a Company Material Adverse Effect (as defined in the Merger Agreement), and (b) with respect to GECC, de minimis inaccuracies.

        In determining whether a Company Material Adverse Effect of Full Circle has occurred or is reasonably likely to occur, the parties will disregard

•

occurrences, changes, events, effects or developments generally affecting any or all of the industries or markets in which the party and its subsidiaries and portfolio companies operate;



•

general political, economic or business conditions or changes therein, including the commencement, continuation or escalation of a war, armed hostilities or other material international or national calamity or acts of terrorism or earthquakes, hurricanes, other natural disasters or acts of God;



•

general securities or financial market conditions, including changes in interest rates or currency exchange rates;



•

changes or proposed changes in any laws, rules, regulations, GAAP or other accounting standards, or authoritative interpretations thereof;



•

the entry into or announcement of the Merger Agreement or the proposed sale of Full Circle or the pendency or consummation of the Merger and other transactions contemplated by the Merger Agreement, or any changes or actions resulting from any of the foregoing, or



•

any action required by law, contemplated by the Merger Agreement, expressly consented to by the other party, or taken at the request of the other party; and



•

any change solely resulting from a change in the fair value of the securities comprising Full Circle's portfolio, individually or in the aggregate (provided, that, for the avoidance of doubt, (x) a "credit event" (as described in the Merger Agreement) with respect to financial assets owned by Full Circle shall constitute a Company Material Adverse Effect and (y) occurrences described in clauses (i), (ii) and (iii) of the definition of "credit event" in the Merger Agreement, to the extent they do not in the aggregate constitute a credit event, shall not constitute a Company Material Adverse Effect of Full Circle), or (viii) any litigation

68

Table of Contents

relating to the Merger Agreement or the transactions contemplated by the Merger Agreement (except in the case of clauses (i), (ii), (iii) or (iv), to the extent that the applicable party is disproportionately adversely affected thereby as compared with similar BDCs, in which case the incremental disproportionate impact may be taken into account in determining whether there has been a Company Material Adverse Effect of Full Circle).

        The representations and warranties in the Merger Agreement do not survive the completion of the Merger. The Merger Agreement contains customary representations and warranties by each of GECC and Full Circle, subject to specified exceptions and qualifications, relating to, among other things:

•

corporate organization, including incorporation and qualification;



•

subsidiaries;



•

capitalization;



•

power and authority to execute, deliver and perform its obligations under the Merger Agreement;



•

the absence of violations of organizational documents, material laws or orders or material permits, contracts or other obligations;



•

stockholder vote requirement;



•

required government filings and consents;



•

financial reports and regulatory documents;



•

financial statements, internal controls and disclosure controls and procedures;



•

broker's fees payable in connection with the Merger;



•

absence of certain changes and actions since December 31, 2015;



•

compliance with applicable law;



•

regulatory investigations and orders;



•

the Special Committee's receipt of an opinion from its financial advisor;



•

the accuracy and completeness of information supplied for inclusion in this document and other governmental filings in connection with the transactions contemplated by the Merger Agreement;



•

tax matters;



•

absence of certain litigation, orders or investigations;



•

material contracts and certain other types of contracts;



•

insurance coverage;



•

title to investment assets; and



•

intellectual property matters.

Additional Representations and Warranties

        Full Circle has also made certain representations and warranties to GECC regarding the inapplicability of state takeover laws and absence of appraisal right.

        GECC has also made certain representations and warranties to Full Circle regarding its investment adviser.

        The representations and warranties described above and included in the Merger Agreement were made by each of Full Circle and GECC to the other. These representations and warranties were made as of specific dates, may be subject to important qualifications and limitations agreed to by Full Circle and GECC in connection with negotiating the terms of the Merger Agreement and may have been included in the Merger Agreement for the purpose of allocating risk between Full Circle and GECC rather than to establish matters as facts. The Merger Agreement is described in, and included as Annex A to, this document only to provide you with information

69

Table of Contents

regarding its terms and conditions and not to provide you with any factual information regarding Full Circle, GECC or their respective businesses.

Conduct of Business Pending Completion of the Merger

        Full Circle agreed to restrictions on it until completion of the Merger. In general, each of Full Circle and GECC agreed that before the completion of the Merger, except as contemplated by the Merger Agreement and subject to certain agreed upon exceptions, Full Circle will, and will cause its consolidated subsidiaries to:

•

carry on its business in the ordinary course of business;



•

preserve intact its business organization and listing exchange status;



•

keep available the services of its current officers and employees;



•

maintain in effect all material licenses and permits required to carry on their respective businesses;



•

maintain in effect any exemptive orders or exemptive relief which they have received from the SEC and which are currently in effect; and



•

preserve their material business relationships and maintain generally their business relationships with their lenders and others having business relationships with them.

        In addition, before the completion of the Merger, Full Circle has agreed that, subject to applicable law and certain agreed upon exceptions and except as expressly contemplated by the Merger Agreement, without the prior written consent of GECC, it will not, and will not permit its subsidiaries to, among other things, directly or indirectly:

•

issue, deliver, sell, dispose of, pledge or otherwise encumber, amend the terms of, or authorize or propose the issuance, sale, disposition or pledge or other encumbrance of (A) any shares of capital stock of any class or any other ownership interest of Full Circle or any of its subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or any other ownership interest of Full Circle or any of its subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any other ownership interest of Full Circle or any of its subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or any other ownership interest of Full Circle or any of its subsidiaries, or (B) any other securities of Full Circle or any of its subsidiaries in respect of, in lieu of, or in substitution for, Full Circle common stock outstanding on the date hereof;



•

redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding Full Circle common stock;



•

split, combine, subdivide or reclassify any Full Circle common stock or, except as provided in the Merger Agreement, declare, set aside for payment or pay any dividend (whether in cash, stock or property, or any combination thereof) in respect of any Full Circle common stock or otherwise make any payments to stockholders in their capacity as such;



•

adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Full Circle or any of its subsidiaries, other than the Merger and the other transactions contemplated by the Merger Agreement;



•

enter into any new line of business;



•

other than in the ordinary course of business and consistent with past practices, redeem, repurchase, prepay, defease, incur or otherwise acquire or amend or modify the terms of any indebtedness for borrowed money, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or pledge any of Full Circle's assets or enter into any arrangement which would have the economic effect of any of the foregoing, in each case, in addition to that incurred as of the date of the Merger or guarantee any such indebtedness;

70

Table of Contents

•

make any investment, investment contract or loan (other than any unfunded commitments existing as of the date hereof) either by sale or purchase of stock or securities or otherwise, contributions to capital, property transfers, or purchase of any property or assets of any other individual, person or other entity (other than a subsidiary), sell, dispose of, transfer, lease, amend, modify, grant waivers with respect to or discontinue any investment, investment contract or loan; or acquire, sell, lease or dispose of any non-investment assets that, in the aggregate, are material to Full Circle and its subsidiaries, taken as a whole, to any person other than a wholly-owned subsidiary;



•

except as provided for in this Agreement, grant any increase in, take any action to accelerate the vesting or payment or fund or in any other way secure the payment of, the compensation and benefits of any of Full Circle's directors, officers, consultants or employees, enter into any employment or severance agreement with any such director, officer, consultant or employee, or adopt, terminate or materially amend any employee benefit plan of Full Circle;



•

make any material change in any of the financial accounting principles, practices or methods used by Full Circle unless required by GAAP or applicable law;



•

change its fiscal year;



•

amend any material tax return of Full Circle, make, revoke or amend any material tax election of Full Circle, adopt or change any tax accounting principles, methods or policies other than as required by applicable law, change any tax accounting period, enter into any closing agreement as described in Section 7121 of the Code (or any corresponding or similar agreement under applicable state, local or foreign tax law) affecting any material tax liability or refund, or settle or compromise any material tax liability or refund of Full Circle;



•

directly or indirectly take any action, or knowingly fail to take any action, which action or failure to act is reasonably likely to cause Full Circle to fail to qualify or not be subject to tax as a RIC, provided that certain requirements are met;



•

make or incur any obligation to make any capital expenditures;



•

enter into or draw down from any contract, agreement, commitment or arrangement whereby the obligation or liability imposed on Full Circle or any of its subsidiaries under such contract, agreement, commitment or arrangement would exceed $50,000, or whereby such contract, agreement, commitment or arrangement would otherwise constitute a material contract (as described in the Merger Agreement), or amend any contract, agreement, commitment or arrangements in existence on the date hereof that, after giving effect to such amendment, would impose an obligation or liability on Full Circle or any of its subsidiaries under such contract, agreement, commitment or arrangement in excess of $50,000 or constitute a material contract;



•

except as otherwise provided in the Merger Agreement, enter into, terminate, cancel, renew or agree to any material amendment of, change in or waiver under any material contract;



•

commence or settle any material claim, suit, action or proceeding (other than in connection with or with respect to the Merger Agreement, the Merger or any other transactions contemplated by the Merger Agreement);



•

amend the articles of incorporation or bylaws of Full Circle or similar governing documents of any of its subsidiaries; or



•

enter into any contract, agreement, commitment or arrangement to do any of the foregoing.

        In addition, before the completion of the Merger, GECC agreed, subject to applicable law and certain agreed upon exceptions and except as expressly contemplated by the Merger Agreement, it will not, among other things:

•

incur any liabilities or obligations (other than in connection with its formation, its initial capitalization and the transactions contemplated in the Merger Agreement and the transactions contemplated by the Subscription Agreement);

71

Table of Contents

•

declare or pay any dividend or distribution; or



•

take any action that could impair its ability to pay and perform its obligations under the Merger Agreement upon a termination of the Merger Agreement.

        GECC will procure that, during the period from the date of the Merger Agreement to the earlier of the effective time and the date on which the Merger Agreement is terminated, except (1) as required by law or, (2) with the prior written consent of the Full Circle, which consent shall not be unreasonably withheld, delayed or conditioned, MAST and the investment funds managed by MAST will manage the MAST Portfolio to be acquired by GECC pursuant to the Subscription Agreement in the ordinary course consistent with past practice and, without limiting the generality of the foregoing, none of MAST or the investment funds managed by MAST will subject any of the assets included in the MAST Portfolio to any encumbrance that would prohibit the transfer of such assets to GECC under the Subscription Agreement.

        The MAST Funds will provide Full Circle prompt notice if any of them (1) agree to any modification of or waiver or forbearance under any loan document in respect of the MAST Portfolio, or waive or fail to enforce any material right under any such loan document or (2) consent to any release of collateral relating to any asset included in the MAST Portfolio. GECC will procure that, during the period from the Measurement Date to the earlier of the effective time and the date, if any, on which the Merger Agreement is terminated, neither MAST nor any of the investment funds managed by MAST will execute any trade with respect to any asset included in the MAST Portfolio except (a) as may be required by law, (b) with the prior written consent of Full Circle, which consent shall not be unreasonably withheld, delayed or conditioned, or (c) as required by the Merger Agreement.

        The Merger Agreement also contains covenants relating to the preparation of this document and the holding of the special meeting of Full Circle stockholders, access to information of the other company and obtaining certain other confirmations, approvals, notices and filings. Full Circle and GECC have also agreed to use their reasonable best efforts to promptly prepare all necessary documentation to effect all notices and filings and to obtain as promptly as practicable all governmental permits, consents, approvals and authorizations necessary or advisable to consummate the transactions contemplated by the Merger Agreement.

        GECC also agreed to use reasonable best efforts to cause the GECC common stock to be issued in the Merger to be approved for listing on the NASDAQ Global Market as promptly as possible.

Additional Covenants

Efforts of Full Circle to Obtain Required Stockholder Votes

        Full Circle agreed to take all action necessary to hold a meeting of its stockholders as soon as reasonably practicable after the registration statement has been declared effective by the SEC (but in any event no later than 45 days after such declaration of effectiveness) for the purpose of obtaining approval from the Full Circle stockholders of the Merger Proposal.

        The Full Circle Board or any committee thereof may, at any time prior to receipt of stockholder approval, (1) approve, endorse or recommend a Superior Proposal (as defined in the Merger Agreement) and cause Full Circle to terminate the Merger Agreement to enter into a definitive agreement with respect to Superior Proposal or modify, amend or withdraw its recommendation that the Full Circle stockholders approve the Merger Proposal, if (in either case) the Full Circle Board determines, in good faith, after consultation with counsel, that the failure to take such action could reasonably be expected to be inconsistent with the directors' fiduciary duties under applicable law.

Indemnification; Directors' and Officers' Insurance

        GECC agrees that all rights to exculpation indemnification and advancement of expenses existing as of the date of the Merger Agreement in favor of (i) the current or former directors, managers, officers and employees of Full Circle or any of its subsidiaries, (ii) each person who served as a director, manager, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise if such service was at the request or for the benefit of Full Circle or any of its subsidiaries, and (iii) Full Circle Advisors, Full Circle Service Company, each of their respective members, and their respective officers, managers, partners, agents, employees, controlling persons, members and any other person affiliated with any of

72

Table of Contents

them (each, an Indemnified Party ) as provided in the respective articles of incorporation and bylaws (or equivalent organizational documents) of Full Circle or any of its subsidiaries and in any Indemnification Agreement (as defined below) will survive the Merger and will continue in full force and effect, to the fullest extent such rights to exculpation, indemnification and advancement of expenses are permitted under applicable law. For a period of six years from the Effective Time, GECC will contain and maintain in effect the exculpation, indemnification and advancement of expenses provisions of such articles of incorporation, bylaws and indemnification agreements as in effect as of the date of the Merger Agreement, and will not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of the Indemnified Party. Indemnification Agreement means any indemnification or exculpation agreement or provision between Full Circle or any of its Subsidiaries on the one hand and on the other hand an Indemnified Party, including under the Investment Advisory Agreement, dated as of July 13, 2010, by and between Full Circle and Full Circle Advisors, and the Administration Agreement, dated as of July 14, 2010, by and between Full Circle and Full Circle Service Company, as in effect on the date of this Agreement.

        From and after the Effective Time, GECC will indemnify, defend and hold harmless each Indemnified Party against all costs and expenses (including reasonable attorneys' fees and expenses), judgments, fines, losses, claims, damages, liabilities, penalties and amounts paid in settlement or compromise in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whenever asserted (any of the foregoing a Legal Proceeding ), arising out of, relating to or in connection with an action, omission, circumstance or state of affairs occurring or existing or alleged to have occurred or existed at or prior to the Effective Time and related to or arising out of an Indemnified Party's service as a director, manager, officer, employee, investment adviser, administrator or fiduciary of Full Circle or any of its subsidiaries (including any Legal Proceeding relating to the Merger Agreement, the Merger or other transactions contemplated by the Merger Agreement), whether asserted or claimed prior to, at or after the Effective Time, in each case to the fullest extent permitted by law.

        The Merger Agreement requires Full Circle to purchase a tail policy of directors' and officers' liability insurance and fiduciary liability insurance for the Indemnified Parties and any other employees, agents or other individuals otherwise covered by such insurance policies prior to the Effective Time (collectively, the Insured Parties ) with respect to matters occurring at or prior to the Effective Time (including the Merger and the other transactions contemplated by the Merger Agreement). GECC will be required to cause that insurance policy to be maintained in full force and effect, for its full term, and to cause all obligations thereunder to be honored by GECC.

No Solicitation by Full Circle

        Full Circle has agreed that it will not, and will cause its subsidiaries not to, and will instruct Full Circle's and its subsidiaries' respective officers, directors, employees, managers, members, partners, agents, potential financing sources or advisors (including attorneys, accountants, investment bankers and consultants) of a party (collectively, "Representatives") (whether acting in such capacity or otherwise) not to (1) initiate or solicit or knowingly encourage any inquiries with respect to, or the making of, any "Acquisition Proposal" (as defined below) or (2) (A) engage in negotiations or discussions with or provide any information or data to, any person that reasonably could be expected to lead to an Acquisition Proposal, (B) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Acquisition Proposal or (C) execute or enter into any letter of intent, agreement in principle, Merger or other similar agreement relating to any Acquisition Proposal. From and after the date of the Merger Agreement, the Full Circle Board (in its capacity as such) will not (x) take any steps to encourage or otherwise facilitate any direct or indirect transaction or series of transactions that could result in (1) an assignment (as defined under the 1940 Act) of Full Circle's investment advisory agreement with Full Circle Advisors, (2) termination or modification of Full Circle's existing investment advisory agreement with Full Circle Advisors, or (3) entry into a new investment advisory agreement, including any sub-advisory agreement, in each case including but not limited to any authorization or approval thereof by the Full Circle Board or solicitation of approval thereof from the stockholders of Full Circle, or (y) authorize or approve a liquidation of Full Circle. Full Circle shall, and shall direct each of its representatives to, immediately cease (and not resume) any solicitations, discussions or negotiations with any person (other than MAST, Great Elm Capital Group, GECC and their affiliates) conducted before the date of the Merger Agreement with respect to any Acquisition Proposal or that

73

Table of Contents

reasonably could be expected to lead to an Acquisition Proposal and promptly request the return or destruction of confidential information related thereto.

        For purposes of the Merger Agreement, the term " Acquisition Proposal " means any inquiry, offer or proposal made by any person or group of persons (other than MAST, Great Elm Capital Group, GECC and their affiliates), relating to any direct or indirect acquisition or purchase, or that could result in ownership, of securities of Full Circle representing more than 25% of the outstanding voting capital stock of Full Circle or Full Circle's assets or any tender offer, exchange offer, merger, reorganization, consolidation, share exchange or other business combination that if consummated would result in any person or group of persons beneficially owning more than 25% of the outstanding voting capital stock of Full Circle or Full Circle's assets.

        If at any time prior to obtaining approval of the Merger from Full Circle's stockholders, Full Circle receives a bona fide Acquisition Proposal that is not received in violation of relevant provisions of the Merger Agreement, Full Circle, the Full Circle Board or any committee thereof may participate in discussions or negotiations with, or furnish any information to, any person making such Acquisition Proposal and its Representatives or potential sources of financing if the Full Circle Board determines in good faith, after consultation with counsel and its financial advisor, that such person is reasonably likely to submit to Full Circle a Superior Proposal (as defined below) and that failure to consider such proposal could reasonably be expected to be inconsistent with the fiduciary duties of its directors, subject to certain limitations on the provision of nonpublic information to such person.

        Full Circle is required promptly (and in any event within 48 hours) to notify GECC of the receipt by Full Circle of any Acquisition Proposal, and of the material terms of, and identity of the person(s) making, such Acquisition Proposal (including a copy thereof and any financing commitment papers submitted therewith, if such Acquisition Proposal is in writing). Full Circle is required to keep GECC reasonably informed of the status and material terms and conditions of any such Acquisition Proposal (and in any event within 48 hours) and of any amendments or proposed amendments thereto and is required promptly (and in any event within 48 hours) to notify GECC of any determination by the Full Circle Board that such an Acquisition Proposal constitutes a Superior Proposal.

        The Full Circle Board or any committee thereof may, at any time before Full Circle's stockholders vote to approve the Merger, (1) approve, endorse or recommend a Superior Proposal and cause Full Circle to terminate the Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal or (2) modify or amend in a manner adverse to GECC or withdraw the board of directors' recommendation that the stockholders of Full Circle approve the Merger Agreement (any action described in (1) or (2) above being referred to as a Change in Recommendation ), provided that before any such Change in Recommendation, the Full Circle Board is required to have determined, in good faith (after consultation with its counsel), that failure to take such action could reasonably be expected to be inconsistent with the directors' fiduciary duties of its directors.

        For purposes of the Merger Agreement, the term Superior Proposal means any bona fide written Acquisition Proposal received after the date of the Merger Agreement that the Full Circle Board determines in good faith, after consultation with its outside legal and financial advisors, to be reasonably likely to be consummated in accordance with its terms and to be more favorable to Full Circle and its stockholders from a financial point of view than the Merger; provided that for purposes of this definition references to 25% in the definition of "Acquisition Proposal" shall be deemed to be references to 50%.

Conditions to the Merger

Conditions to Each Party's Obligations to Effect the Merger

        The obligations of Full Circle and GECC to complete the Merger are subject to the satisfaction or, where permissible, waiver of the following conditions:

•

the requisite approval of the Merger by the stockholders of Full Circle;



•

no governmental entity having jurisdiction over Full Circle or GECC shall have issued an order, decree or ruling or taken any other material action enjoining or otherwise prohibiting consummation of the Merger substantially on the terms contemplated by the Merger Agreement;



•

the registration statement shall have been declared effective by the SEC under the Securities Act and no stop order suspending the effectiveness of the registration statement shall have been issued by the SEC and no

74

Table of Contents

proceedings for that purpose shall have been initiated or threatened in writing by the SEC that have not been withdrawn;

•

GECM shall be registered as an investment adviser under the Advisers Act;



•

GECC shall be regulated as a BDC under the 1940 Act; and



•

the shares of GECC common stock issuable in the Merger shall have been authorized for listing on the NASDAQ Global Select Market upon official notice of issuance.

Conditions to the Obligations of GECC to Effect the Merger

        The obligation of GECC to complete the Merger is subject to the satisfaction or waiver of the following conditions:

•

each of the representations and warranties of Full Circle shall be true and correct in all respects as of the date of the Merger Agreement and as of the closing date of the Merger as if made on and as of the closing date of the Merger (unless any such representation or warranty addresses matters only as of a particular date or with respect to a specific period in which event such representation or warranty shall be so true and correct in all respects only as of such particular date or with respect to such specific period), except for any failure to be true and correct that would not have a "Company Material Adverse Effect";



•

Full Circle shall have performed in all material respects its obligations hereunder required to be performed by it at or prior to the closing of the Merger;



•

GECC shall have received a certificate signed by an authorized officer of Full Circle, dated as of the closing date, to the effect that, to the knowledge of such officer, the requisite conditions set forth in the Merger Agreement have been satisfied; and



•

since the date of the Merger Agreement, there shall not have occurred any Company Material Adverse Effect.

Conditions to the Obligations of Full Circle to Effect the Merger

        The obligation of Full Circle to complete the Merger is subject to the satisfaction or waiver of the following conditions:

•

each of the representations and warranties of GECC in the Merger Agreement and each of the representations and warranties of every party to the Subscription Agreement, shall be true and correct in all respects as of the date of the Merger Agreement and as of the closing date as if made on and as of the closing date (unless such representation or warranty addresses matters only as of a particular date or with respect to a specific period in which event such representation or warranty shall be so true and correct in all respects only as of such particular date or with respect to such specific period), except for de minimis inaccuracies;



•

GECC shall have performed in all material respects its obligations required pursuant to the Merger Agreement and each of the parties to the Subscription Agreement shall have performed in all material respects its obligations thereunder, in each case as required to be performed by it at or prior to the closing;



•

Full Circle shall have received a certificate signed by an authorized officer of GECC, dated as of the closing date, to the effect that, to the knowledge of such officer, the conditions set forth above have been satisfied;



•

the transactions contemplated by the Subscription Agreement shall have been consummated without waiver of any conditions thereto;



•

since the date of the Merger, there shall not have occurred any "Newco Material Adverse Effect" (as that term is defined in the Merger Agreement"); and



•

following the date of the Merger Agreement, except (i) as required by law or, (ii) with the prior written consent of Full Circle, which consent shall not be unreasonably withheld, delayed or conditioned, MAST and the investment funds managed by MAST shall have managed the MAST Portfolio in the ordinary course consistent with past practice and, without limiting the generality of the foregoing, none of MAST or the investment funds managed by MAST shall have subjected any of the MAST Portfolio to any encumbrance that would prohibit the transfer of such asset to GECC under the Subscription Agreement.

75

Table of Contents

For the avoidance of doubt, the investment funds managed by MAST shall have promptly provided Full Circle notice if any of them (A) agreed to any modification of or waiver or forbearance under any loan document, or waived or failed to enforce any material right under any loan document or (B) consented to any release of collateral, in each case relating to any MAST Portfolio. During the period from the Measurement Date to the earlier of the Effective Time and the date, if any, on which the Merger Agreement is terminated, neither MAST nor any of the investment funds managed by MAST shall have executed any trade with respect to any MAST Portfolio except (i) as may be required by law, (ii) with the prior written consent of Full Circle, which consent shall not be unreasonably withheld, delayed or conditioned, or (iii) as required by the Merger Agreement.

Termination of the Merger Agreement

Right to Terminate

        The Merger Agreement may be terminated at any time prior to the Effective Time, whether before or after the Full Circle stockholders vote to approve the Merger, as follows:

•

by mutual consent of GECC and Full Circle; or



•

by either GECC or Full Circle:



•

if the Merger has not been completed by the Termination Date; provided, that if the certain conditions set forth in the Merger Agreement shall not have been satisfied or waived as of October 15, 2016, then Full Circle or GECC may extend the Termination Date for up to 90 days by providing the other party a written notice of such extension on or before the Termination Date as determined without such extension;



•

if any governmental entity having jurisdiction over Full Circle or GECC shall have issued an order, decree or ruling or taken any other action, in each case, enjoining or otherwise prohibiting consummation of the Merger, and such order, decree, ruling or other action shall have become final and non-appealable; or



•

if the special meeting shall have concluded without the Merger Proposal having been approved in accordance with the Maryland General Corporation Law and the bylaws of Full Circle.



•

by Full Circle:



•

upon a breach of any covenant or agreement on the part of GECC in the Merger Agreement or upon a breach of any covenant or agreement in the Subscription Agreement by any party thereto or if any representation or warranty of GECC in the Merger Agreement is untrue or if any representation or warranty of any party to the Subscription Agreement is untrue, provided, that if such breach is curable by GECC through the exercise of reasonable best efforts and GECC continues to exercise such reasonable best efforts, Full Circle may not terminate the Merger Agreement;



•

if GECC's initial capitalization shall have not been consummated as and when required under the Merger Agreement and the Subscription Agreement or within two business days thereafter; or



•

in order to enter into a definitive agreement with respect to a Superior Proposal.



•

by GECC:



•

upon a breach of any covenant or agreement on the part of Full Circle, or if any representation or warranty of Full Circle is untrue, provided, that if such breach is curable by Full Circle through the exercise of reasonable best efforts and Full Circle continues to exercise such reasonable best efforts, GECC may not terminate the Merger Agreement; or



•

if the Full Circle Board shall have publicly disclosed a Change in Recommendation.

        Neither Full Circle nor GECC has the right to terminate the Merger Agreement if its breach of its obligations under the Merger Agreement is a proximate cause of the basis for termination.

76

Table of Contents

Effect of Termination

        If the Merger Agreement is terminated, it will become null and void, and there will be no damages or liability on the part of GECC or Full Circle or their respective directors, officers, employees, stockholders, representatives, agents or advisors, except that (1) termination of the Merger Agreement will not relieve a party of liability for fraud or for any knowing or intentional breach of any obligation under the Merger Agreement and (2) the confidentiality provisions of the Merger Agreement and the termination fee and expenses reimbursement provisions described below will survive.

        If the Merger Agreement is terminated:

•

by Full Circle, in order to enter into a definitive agreement with respect to a Superior Proposal, Full Circle will be required to pay the Termination Fee to GECC within two business days of termination;



•

by GECC, if the Full Circle Board shall have publicly disclosed a Change in Recommendation, Full Circle will be required to pay the Termination Fee to GECC within two business days of termination;



•

because (a) the special meeting concluded without Full Circle's stockholders having approved the Merger Proposal and (b) before the special meeting a proposal for an Alternative Transaction shall have been publicly announced and not withdrawn, then Full Circle will be required to reimburse the Expense Reimbursement within 10 business days following invoice. If Full Circle thereafter enters into a definitive agreement for one or more Alternative Transactions within twelve months following termination of the Merger Agreement, Full Circle will be required to pay GECC an amount equal to the Termination Fee minus the Expense Reimbursement.

        No more than one Termination Fee will be payable under the Merger Agreement.

        For purposes of the Merger Agreement, the term Alternative Transaction means any of the following events: (1) any tender or exchange offer, merger, consolidation, share exchange or business combination transaction involving Full Circle, with any person other than GECC, Great Elm Capital Group, MAST or any affiliate thereof (a Third Party ) or (2) the acquisition by a Third Party of 50% or more of the outstanding shares of Full Circle common stock, or of 50% or more of the assets or operations of Full Circle and its subsidiaries, taken as a whole, in a single transaction or a series of related transactions (excluding, however, sales or other dispositions of portfolio assets in the ordinary course).

Expenses and Fees

        In general, each of GECC and Full Circle will be responsible for all costs and expenses incurred by it in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement whether or not the Merger is consummated. Each of GECC and Full Circle are responsible for the payment of 50% of the estimated cost to print and distribute this document.

Amendment and Waiver of the Merger Agreement

        Subject to applicable law, the parties may, by written agreement, amend the Merger Agreement, waive any inaccuracies in the representations and warranties of the other party or waive compliance by the other party with any of the agreements or conditions to that party's obligation to complete the Merger.

77

Table of Contents

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

        The Merger Agreement provides that the holders of Full Circle common stock will be entitled to receive [     ·     ] shares of GECC common stock for each share of Full Circle common stock held by them immediately prior to the Effective Time. This is estimated to result in approximately [     ·     ] million shares of GECC common stock being issued in connection with the Merger. The unaudited pro forma condensed consolidated financial information has been derived from and should be read in conjunction with the historical consolidated financial statements and the related notes of Full Circle, GECC and the Special Purpose Schedule of Investments, which are included elsewhere in this document. See "Index to Financial Statements."

        The following unaudited pro forma condensed consolidated financial information and explanatory notes illustrate the effect of the Merger and the Formation Transactions on GECC's financial position using the acquisition method of accounting with GECC treated as the accounting acquirer.

        In accordance with generally accepted accounting principles in GAAP, the assets and liabilities of Full Circle will be recorded by GECC at their estimated fair values as of the date the Merger is completed. The unaudited pro forma condensed combining balance sheet as of March 31, 2016 assumes the Formation Transactions and the Merger took place on that date.

        The unaudited pro forma condensed combining balance sheet is presented for illustrative purposes only and does not necessarily indicate the results of operations or the combined financial position that would have resulted had the Formation Transactions or the Merger been completed on the date presented. In addition, as explained in more detail in the accompanying notes to the unaudited pro forma condensed combining balance sheet, the allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combining balance sheet involves estimates, is subject to adjustment and may vary significantly from the actual purchase price allocation that will be recorded upon completion of the Merger.

        After completion of the Formation Transactions, GECC will have $30 million of cash and own a portfolio of debt instruments that MAST valued at approximately $90 million as of June 30, 2016.

        The following unaudited pro forma condensed combining balance sheet gives effect to the Merger and the Formation Transactions. Specifically, GECC presents the pro forma condensed combining balance sheet pro forma condensed combining balance sheet as if on March 31, 2016:

•

GECC had been incorporated;



•

the Formation Transactions had been completed resulting in GECC owning the MAST Portfolio; and



•

the Merger had been completed.

        In order to make the unaudited pro forma condensed combining balance sheet easier to read, the unaudited pro forma condensed combined financial statements, associated adjustments and related information are referred to as the "pro forma financial statements" throughout this document. All such statements and information are condensed unaudited, and also combined.

        The pro forma financial statements are based on, and should be read in conjunction with, the separate historical consolidated financial statements and accompanying notes of Full Circle, the balance sheet of GECC and the special purpose statement of investments included in this document.

78

Table of Contents