Exhibit 10.1

SUBSCRIPTION ESCROW AGREEMENT

THIS SUBSCRIPTION ESCROW AGREEMENT dated as of August 3, 2020 (this
“Agreement”), is entered into among Preferred Capital Securities, LLC (the
“Dealer Manager”), Prospect Capital Corporation (the “Issuer”) and UMB Bank,
National Association, a national banking association, as escrow agent (the
“Escrow Agent”).

WHEREAS, the Issuer intends to raise cash funds from Investors (as defined
below) pursuant to a public offering (the “Offering”) of up to 40,000,000 shares
of preferred stock, having a purchase price of $25.00 per share of preferred
stock (for an aggregate offering amount of $1,000,000,000), consisting of (i)
shares of Series A1 Preferred Stock, par value $0.001 per share of the Issuer,
(ii) shares of Series M1 Preferred Stock, par value $0.001 per share of the
Issuer, (iii) shares of Series M2 Preferred Stock, par value $0.001 per share,
of the Issuer (collectively, the “Securities”), pursuant to the registration
statement on Form N-2 of the Issuer (No. 333-236415) (as amended, the “Offering
Document”).

WHEREAS, the Escrow Agent is willing to accept appointment as escrow agent only
for the express duties set forth herein.

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

1.     Proceeds to be Escrowed. On or before the date the Issuer begins selling
the Securities, the Issuer shall establish an escrow account with the Escrow
Agent to be invested in accordance with Section 7 entitled “ESCROW ACCOUNT FOR
THE BENEFIT OF INVESTORS OF A1/M1/M2 PREFERRED STOCK OF PROSPECT CAPITAL
CORPORATION” (including such abbreviations as are required for the Escrow
Agent’s systems) (the “Escrow Account”) with three separate subaccounts (an “A1
Subaccount”, a “M1 Subaccount”, and a “M2 Subaccount”). All checks, wire
transfers and other funds received from subscribers of Securities via “Direct
Registration Settlement” (as described in the Offering Document) (“Investors”)
in payment for the Securities (“Investor Funds”) will be delivered to the Escrow
Agent within one business day following the day upon which such Investor Funds
are received by the Issuer or its agents, and shall, upon receipt by the Escrow
Agent, be retained in escrow by the Escrow Agent. Upon receipt of any such
Investor Funds, the Issuer or the Dealer Manager shall direct the Escrow Agent
in writing whether such funds shall be deposited into the A1 Subaccount, the M1
Subaccount or the M2 Subaccount. In the absence of the receipt of such written
direction, the Escrow Agent shall have no obligation to determine whether such
Investor Funds shall be deposited into the A1 Subaccount, the M1 Subaccount or
the M2 Subaccount. During the term of this Agreement, the Issuer or its agents
shall cause all checks received by and made payable to it for payment for the
Securities to be endorsed in favor of the Escrow Agent and delivered to the
Escrow Agent for deposit in the Escrow Account.

 

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The initial escrow period shall commence upon the effectiveness of this
Agreement and shall continue until the Termination Date (as defined herein). The
Escrow Account shall not be an interest-bearing account.

The Escrow Agent shall have no duty to make any disbursement, investment or
other use of Investor Funds until and unless it has good and collected funds. If
any checks deposited in the Escrow Account are returned or prove uncollectible
after the funds represented thereby have been released by the Escrow Agent, then
the Issuer shall promptly reimburse the Escrow Agent for any and all costs
incurred for such. The Escrow Agent shall be under no duty or responsibility to
enforce collection of any check delivered to it hereunder.

2.     Investors. Investors will be instructed by the Dealer Manager or any
soliciting dealers retained by the Dealer Manager (the “Soliciting Dealers”) to
remit the purchase price in the form of checks (“instruments of payment”)
payable to the order of, or funds wired in favor of, “UMB BANK, N.A., ESCROW
AGENT FOR PROSPECT CAPITAL CORPORATION.” Any checks made payable to a party
other than the Escrow Agent shall be returned to the Dealer Manager or
Soliciting Dealer that submitted the check.

If any subscription agreement for the purchase of Securities solicited by a
Soliciting Dealer is rejected by the Issuer, then upon the Escrow Agent’s
receipt of written notice from the Issuer or Dealer Manager of such rejection,
the check for the purchase of Securities will be returned to the rejected
subscriber within ten business days from the date of rejection. The Issuer and
Dealer Manager shall provide any necessary documentation to the Escrow Agent,
upon which it may rely, to enable the Escrow Agent to return amounts to rejected
subscribers.

All Investor Funds deposited in the Escrow Account shall not be subject to any
liens or charges by the Issuer or the Escrow Agent, or judgments or creditors’
claims against the Issuer, until and unless released to the Issuer as
hereinafter provided. The Issuer understands and agrees that the Issuer shall
not be entitled to any Investor Funds on deposit in the Escrow Account and no
such funds shall become the property of the Issuer, or any other entity except
as released to the Issuer pursuant to Section 3. The Escrow Agent will not use
the information provided to it by the Issuer for any purpose other than to
fulfill its obligations as Escrow Agent hereunder. The Escrow Agent will treat
all Investor information as confidential; provided if the Escrow Agent is
compelled—in the absence of a protective order or other remedy—to disclose the
Investor information, the Escrow Agent may without liability disclose the
Investor information that is required but must exercise commercially reasonable
efforts (at the sole expense of the Issuer) to preserve the confidential
treatment of the Investor Information. Despite the foregoing, however, nothing
in this Agreement prohibits, prevents, or limits the Escrow Agent from
disclosing any Investor information, without notice to or consent of the Issuer,
if the disclosure is made to a supervisory or governmental authority or a
self-regulatory organization in the course of any examination, inquiry, or audit
of the Escrow Agent or Issuer or any of the Escrow Agent’s representatives or
businesses.

3.     Disbursement of Funds. The Escrow Agent, upon receipt of an Escrow
Release Notice, attached hereto as Exhibit C, shall periodically transfer any
portion of the Investor Funds in the A1

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Subaccount, the M1 Subaccount, and/or the M2 Subaccount to the Issuer or such
other parties as set forth in the applicable Escrow Release Notice. The Escrow
Agent shall effect such transfer by the close of business on the date the Escrow
Agent receives the applicable Escrow Release Notice; provided, however, if the
Escrow Agent receives the applicable Escrow Release Notice after 2pm Central
Time, then the Escrow Agent shall effect such transfer by the close of business
on the next succeeding business day after it receives such Escrow Release
Notice. Notwithstanding the foregoing, if requested by the Escrow Agent, the
Escrow Agent shall have no obligation to transfer Investor Funds to any party
until after it has received an executed and valid IRS Form W-9, or valid
substitute thereto, from such party.

Upon the Escrow Agent’s receipt of written notice that (i) the Issuer is
abandoning the sale of the Securities; or (ii) the Securities and Exchange
Commission or any other federal or state regulatory authority that a stop or
similar order has been issued with respect to the Offering Document and has
remained in effect for at least 20 days, the Escrow Agent shall return Investor
Funds to Investors. The Issuer and Dealer Manager shall provide any necessary
documentation to the Escrow Agent, upon which it may rely, to enable the Escrow
Agent to return amounts to Investors.

4.    Term of Escrow. Unless otherwise extended, the “Termination Date” shall be
the earliest of: (a) the date of the termination of the Dealer Manager Agreement
entered into between the Issuer and Preferred Capital Securities, LLC on or
about the date hereof related to the Offering, as specified by the Issuer in a
written notice to the Escrow Agent; (b) the date the Escrow Agent receives
written notice from the Issuer that all the Securities offered pursuant to the
Offering Document are sold, (c) the date all funds held in the Escrow Account
are distributed to the Issuer or to Investors pursuant to Section 3 and the
Issuer has informed the Escrow Agent in writing to close the Escrow Account; (d)
the date the Escrow Agent receives written notice from the Issuer that it is
abandoning the sale of the Securities; and (e) the date the Escrow Agent
receives notice from the Securities and Exchange Commission or any other federal
or state regulatory authority that a stop or similar order has been issued with
respect to the Offering Document and has remained in effect for at least 20
days. After the Termination Date, the Issuer and its agents shall not deposit,
and the Escrow Agent shall not accept, any additional amounts representing
payments by prospective Investors.

5.     Duty and Liability of the Escrow Agent. The sole duty of the Escrow Agent
shall be to receive Investor Funds and subscription agreements and hold them
subject to release, in accordance herewith, and the Escrow Agent shall be under
no duty to determine whether the Issuer, the Dealer Manager or any Soliciting
Dealer is complying with requirements of this Agreement, the Offering or
applicable securities or other laws in tendering the Investor Funds to the
Escrow Agent. No other agreement entered into between the parties, or any of
them, shall be considered as adopted or binding, in whole or in part, upon the
Escrow Agent notwithstanding that any such other agreement may be referred to
herein or deposited with the Escrow Agent or the Escrow Agent may have knowledge
thereof, including specifically but without limitation the Offering Document or
any other document related to the Offering (including the subscription agreement
and exhibits thereto), and the Escrow Agent’s rights and responsibilities shall
be governed solely by this Agreement. The Escrow Agent shall not be responsible
for or be required

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to enforce any of the terms or conditions of the Offering Document or any other
document related to the Offering (including the subscription agreement and
exhibits thereto) or other agreement between the Issuer and any other party. The
Escrow Agent may conclusively rely upon and shall be protected in acting upon
any statement, certificate, notice, request, consent, order or other document
believed by it to be genuine and to have been signed or presented by the proper
party or parties. The Escrow Agent shall have no duty or liability to verify any
such statement, certificate, notice, request, consent, order or other document,
and its sole responsibility shall be to act only as expressly set forth in this
Agreement. Concurrent with the execution of this Agreement, the Issuer and the
Dealer Manager shall each deliver to the Escrow Agent an authorized signers form
in the form of Exhibit A or Exhibit A-1 to this Agreement, as applicable. The
Escrow Agent shall be under no obligation to institute or defend any action,
suit or proceeding in connection with this Agreement unless first indemnified to
its satisfaction. The Escrow Agent may consult counsel of its own choice with
respect to any question arising under this Agreement and the Escrow Agent shall
not be liable for any action taken or omitted in good faith upon advice of such
counsel. The Escrow Agent shall not be liable for any action taken or omitted by
it in good faith except to the extent that a court of competent jurisdiction
determines that the Escrow Agent’s gross negligence, bad faith, or willful
misconduct was the primary cause of loss. The Escrow Agent is acting solely as
escrow agent hereunder and owes no duties, covenants or obligations, fiduciary
or otherwise, to any other person by reason of this Agreement, except as
otherwise stated herein, and no implied duties, covenants or obligations,
fiduciary or otherwise, shall be read into this Agreement against the Escrow
Agent.  If any disagreement between any of the parties to this Agreement, or
between any of them and any other person, including any Investor, resulting in
adverse claims or demands being made in connection with the matters covered by
this Agreement, or if the Escrow Agent is in doubt as to what action it should
take hereunder, the Escrow Agent may, at its option, refuse to comply with any
claims or demands on it, or refuse to take any other action hereunder, so long
as such disagreement continues or such doubt exists, and in any such event, the
Escrow Agent shall not be or become liable in any way or to any person for its
failure or refusal to act, and the Escrow Agent shall be entitled to continue so
to refrain from acting until (a) the rights of all interested parties shall have
been fully and finally adjudicated by a court of competent jurisdiction, or (b)
all differences shall have been adjudged and all doubt resolved by agreement
among all of the interested persons, and the Escrow Agent shall have been
notified thereof in writing signed by all such persons. Notwithstanding the
foregoing, the Escrow Agent may in its discretion obey the order, judgment,
decree or levy of any court, whether with or without jurisdiction and the Escrow
Agent is hereby authorized in its sole discretion to comply with and obey any
such orders, judgments, decrees or levies. If any controversy should arise with
respect to this Agreement the Escrow Agent shall have the right, at its option,
to institute an interpleader action in any court of competent jurisdiction to
determine the rights of the parties. IN NO EVENT SHALL THE ESCROW AGENT BE
LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL
LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST
PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION. The parties hereto agree
that the Escrow Agent has no role in the preparation of the Offering Document
(including the subscription agreement and other exhibits thereto) and makes no
representations or warranties with respect to the information contained therein
or omitted therefrom. The Escrow Agent shall have no obligation, duty or

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liability with respect to compliance with any federal or state securities,
disclosure or tax laws concerning the Offering Document or any other document
related to the Offering (including the subscription agreement and other exhibits
thereto) or the issuance, offering or sale of the Securities. The Escrow Agent
shall have no duty or obligation to monitor the application and use of the
Investor Funds once transferred to the Issuer, that being the sole obligation
and responsibility of the Issuer.

6.     Escrow Agent’s Fee. The Escrow Agent shall be entitled to compensation
for its services as stated in the fee schedule attached hereto as Exhibit B,
which compensation shall be paid by the Issuer. The fee agreed upon for the
services rendered hereunder is intended as full compensation for the Escrow
Agent’s services as contemplated by this Agreement; provided, however, that if
(a) the conditions for the disbursement of funds under this Agreement are not
fulfilled, (b) the Escrow Agent renders any material service not contemplated in
this Agreement, (c) there is any assignment of interest in the subject matter of
this Agreement, (d) there is any material modification hereof, (e) any material
controversy arises hereunder, or (f) the Escrow Agent is made a party to any
litigation pertaining to this Agreement or the subject matter hereof, then the
Escrow Agent shall be reasonably compensated for such extraordinary services and
reimbursed for all reasonable costs and expenses, including reasonable
attorney’s fees, occasioned by any delay, controversy, litigation or event, and
the same shall be recoverable from the Issuer. The Issuer’s obligations under
this Section 6 shall survive the resignation or removal of the Escrow Agent and
the assignment or termination of this Agreement.

7.    Investment of Investor Funds. Investor Funds shall be deposited in the
Escrow Account in accordance with Section 1 and held un-invested in the Escrow
Account, which shall be non-interest bearing.

8.     Notices. All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) on the date of service if served personally on the party to whom notice is
to be given, (b) on the day of transmission if sent by facsimile/email
transmission bearing an authorized signature to the facsimile number/email
address given below, and written confirmation of receipt is obtained promptly
after completion of transmission, (c) on the day after delivery to Federal
Express or similar overnight courier, or (d) on the fifth day after mailing, if
mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed, return receipt
requested, to the party as follows:

If to the Issuer:
 
Prospect Capital Corporation
10 East 40th Street, 42nd Floor
New York, New York 10016
Attention: Russell Wininger, Sean Dailey, Nishil Mehta, Joseph Roth

with a copy to:

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Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001
Attention: Michael Hoffman, Kenneth Burdon

If to the Dealer Manager:

Preferred Capital Securities, LLC
3284 Northside Parkway, NW, Suite 150
Atlanta, GA 30327
Email: bcho@prefcapitalsecurities.com
Attention: Brian Cho, Chief Compliance Officer

with a copy to:

Practus, LLP
2575 Peachtree Road NE, Unit 17B
Atlanta, GA 30305
Attention: Kirk Montgomery

If to Escrow Agent:

UMB Bank, National Association
928 Grand Blvd. 12th Floor
Mail Stop: 1011201
Kansas City, Missouri 64106
Attention: Lara Stevens, Corporate Trust & Escrow Services Dept.
Telephone: (816) 860-3017
Fax: (816) 860-3029
Email: lara.stevens@umb.com

Any party may change its address for purposes of this Section by giving the
other party written notice of the new address in the manner set forth above.

9.     Indemnification of Escrow Agent. The Issuer and the Dealer Manager hereby
agree to, jointly and severally, indemnify, defend and hold harmless the Escrow
Agent from and against, any and all losses, liabilities and damages, reasonable
costs and expenses, including, without limitation, reasonable counsel fees and
expenses, which the Escrow Agent may suffer or incur by reason of any action,
claim or proceeding brought against the Escrow Agent arising out of or relating
in any way to this Agreement or any transaction to which this Agreement relates
unless such loss, liability, cost, damage or expense is finally determined by a
court of competent jurisdiction to have been primarily caused by the gross
negligence or willful misconduct of the Escrow Agent. The terms of this Section
shall survive the termination of this Agreement and the resignation or removal
of the Escrow Agent.

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10.     Successors and Assigns. Except as otherwise provided in this Agreement,
no party hereto shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other parties hereto and any
such attempted assignment without such prior written consent shall be void and
of no force and effect. This Agreement shall inure to the benefit of and shall
be binding upon the successors and permitted assigns of the parties hereto. Any
corporation or association into which the Escrow Agent may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer all or substantially all of its corporate trust business and assets as
a whole or substantially as a whole, or any corporation or association resulting
from any such conversion, sale, merger, consolidation or transfer to which the
Escrow Agent is a party, shall be and become the successor Escrow Agent under
this Agreement and shall have and succeed to the rights, powers, duties,
immunities and privileges as its predecessor, without the execution or filing of
any instrument or paper or the performance of any further act.

11.     Governing Law; Jurisdiction. This Agreement is governed by and shall be
construed and interpreted in accordance with the laws of the State of New York
without giving effect to the conflict of laws principles thereof. The parties
irrevocably and unconditionally submit to the exclusive jurisdiction of the
federal and state courts located in the Borough of Manhattan, City, County and
State of New York, for any proceedings commenced regarding this Agreement. The
parties irrevocably submit to the jurisdiction of such courts for the
determination of all issues in such proceedings and irrevocably waive any
objection to venue or inconvenient forum for any proceeding brought in any such
court. The parties irrevocably and unconditionally waive any right to trial by
jury with respect to any proceeding relating to this Agreement.

12.     Severability. If any provision of this Agreement is declared by any
court or other judicial or administrative body to be null, void, or
unenforceable, said provision shall survive to the extent it is not so declared,
and all of the other provisions of this Agreement shall remain in full force and
effect.

13.     Amendments; Waivers. This Agreement may be amended or modified, and any
of the terms, covenants, representations, warranties, or conditions hereof may
be waived, only by a written instrument executed by the parties hereto, or in
the case of a waiver, by the party waiving compliance. Any waiver by any party
of any condition, or of the breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, in any one or more
instances, shall not be deemed to be nor construed as further or continuing
waiver of any such condition, or of the breach of any other provision, term,
covenant, representation, or warranty of this Agreement. The Issuer and the
Dealer Manager agree that any requested waiver, modification or amendment of
this Agreement shall be consistent with the terms of the Offering.

14.     Entire Agreement. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the escrow contemplated
hereby and supersedes and replaces all prior and contemporaneous agreements and
understandings, oral or written, with regard to such escrow.

15.     Section Headings. The section headings in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

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16.     Counterparts. This Agreement may be executed (including by facsimile
transmission) with counterpart signature pages or in counterparts, each of which
shall be deemed an original, but all of which shall constitute the same
instrument. Copies, telecopies, facsimiles, electronic files and other
reproductions of original executed documents shall be deemed to be authentic and
valid counterparts of such original documents for all purposes, including the
filing of any claim, action or suit in the appropriate court of law. The parties
hereto agree that the transactions described herein may be conducted and related
documents may be stored by electronic means.

17.     Resignation. The Escrow Agent may resign upon 30 days’ advance written
notice to the parties hereto. If a successor escrow agent is not appointed by
the Issuer within the 30-day period following such notice, the Escrow Agent may
petition any court of competent jurisdiction to name a successor escrow agent,
or may interplead the Investor Funds with such court, whereupon the ruling of
the court will determine with respect to the petition Escrow Agent’s duties
hereunder shall terminate.

18.    References to Escrow Agent. Other than the Offering Document, any of the
other documents related to the Offering (including the subscription agreement
and exhibits thereto) and any amendments thereof or supplements thereto, no
printed or other matter in any language (including, without limitation, notices,
reports and promotional material) which mentions the Escrow Agent’s name or the
rights, powers, or duties of the Escrow Agent shall be issued by the Issuer or
the Dealer Manager, or on the Issuer’s or the Dealer Manager’s behalf, unless
the Escrow Agent shall first have given its specific written consent thereto.
Notwithstanding the foregoing, any amendment or supplement to the Offering
Document or any other document related to the Offering (including the
subscription agreement and exhibits thereto) that revises, alters, modifies,
changes or adds to the description of the Escrow Agent or its rights, powers or
duties hereunder shall not be issued by the Issuer or the Dealer Manager, or on
the Issuer’s or the Dealer Manager’s behalf, unless the Escrow Agent has first
given specific written consent thereto.

19.    Regulatory Compliance. The Issuer and the Dealer Manager shall provide to
the Escrow Agent upon the execution of this Agreement any documentation
requested and any information reasonably requested by the Escrow Agent to comply
with the USA Patriot Act of 2001, as amended from time to time and the Bank
Secrecy Act, as amended from time to time.

[Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
the date and year first set forth above.

PROSPECT CAPITAL CORPORATION

By:/s/ Grier Eliasek        
Name: Grier Eliasek
Title: President & Chief Operating Officer

PREFERRED CAPITAL SECURITIES, LLC

By:/s/ Brian Cho        
Name: Brian Cho
Title: Chief Compliance Officer

UMB BANK, NATIONAL
ASSOCIATION, as Escrow Agent

By:/s/ Lara L. Stevens        
Name: Lara L. Stevens
Title: Vice President

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Exhibit A

CERTIFICATE AS TO AUTHORIZED SIGNATURES

The specimen signatures shown below are the specimen signatures of the
individuals who have been designated as Authorized Representatives of Prospect
Capital Corporation and are authorized to initiate and approve transactions of
all types for the above-mentioned account on behalf of Prospect Capital
Corporation

Name/Title
 
 
Specimen Signature
Grier Eliasek
President & Chief Operating Officer
/s/ Grier Eliasek
Signature
 
 
Kristin Van Dask
Chief Financial Officer, Chief Compliance Officer & Secretary

/s/ Kristin Van Dask
Signature
 
 

_______________________________
Signature
 
 

_______________________________
Signature

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Exhibit A-1

CERTIFICATE AS TO AUTHORIZED SIGNATURES
The specimen signatures shown below are the specimen signatures of the
individuals who have been designated as Authorized Representatives of Preferred
Capital Securities, LLC and are authorized to initiate and approve transactions
of all types for the above-mentioned account on behalf of Preferred Capital
Securities, LLC.

Name/Title
 
 
Specimen Signature
Jeff Smith
Chief Executive Officer
/s/ Jeff Smith
Signature
 
 
Brian Cho
Chief Compliance Officer
/s/ Brian Cho
Signature
 
 
Greg Mausz
Chief Operating Officer
/s/ Greg Mausz
Signature

Alex Evans
Vice President of Operations
/s/ Alex Evans
Signature

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Exhibit B

ESCROW FEES AND EXPENSES

Annual Fee
Annual Escrow Agent                        $30,000

Annual Fee will be payable upon the effectiveness of this agreement and will be
billed annually in advance thereafter. Other fees and expenses will be billed as
incurred.
Fees specified are for the regular, routine services contemplated by this
Agreement, and any additional or extraordinary services, including, but not
limited to disbursements involving a dispute or arbitration, or administration
while a dispute, controversy or adverse claim is in existence, will be charged
based upon time required at the then standard hourly rate.

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Exhibit C

FORM OF ESCROW RELEASE NOTICE

Date:                 

UMB Bank, National Association
928 Grand Blvd. 12th Floor
Mail Stop: 1011201
Kansas City, MO 64106

Ladies and Gentlemen:

In accordance with the terms of Section 3 of the Subscription Escrow Agreement
dated as of February 14, 2017 (as the same may be amended from time to time,
the “Escrow Agreement”), among Prospect Capital Corporation (the “Issuer”),
Preferred Capital Securities, LLC (the “Dealer Manager”) and UMB Bank, National
Association (the “Escrow Agent”), the Issuer and the Dealer Manager hereby
notify the Escrow Agent that the ________ closing will be held on ___________
for gross proceeds of $_________.

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER (or as indicated) AS FOLLOWS
(wire instructions attached) from the A1 Subaccount:

$
$

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER (or as indicated) AS FOLLOWS
(wire instructions attached) from the M1 Subaccount:

$
$

Very truly yours,

PROSPECT CAPITAL CORPORATION,
as the Issuer

By:                            
    Name:                        
    Title:                        

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PREFERRED CAPITAL SECURITIES, LLC,
as the Dealer Manager

By:                            
    Name:                        
Title:                        

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