EXHIBIT 10.1(b)

SUPPLEMENT TO THE INVESTMENT ADVISORY MANAGEMENT AGREEMENT

DATED MARCH 25, 2004 BETWEEN APOLLO INVESTMENT CORPORATION AND

APOLLO INVESTMENT MANAGEMENT, L.P.

This Supplement clarifies the Capital Gains Fee calculation set out in
Section 3(b)(ii) of the Investment Advisory Management Agreement between AIC and
AIM (the “Advisory Agreement”). Nothing contained in this Addendum modifies any
term of the Advisory Agreement.

For purposes of determining any amount due under Section 3(b)(ii) of the
Advisory Agreement, the Capital Gains Fee shall incorporate unrealized
depreciation on a gross investment-by-investment basis at the end of such year.
Capital gains with respect to any investment will equal the difference between
the proceeds from the sale of such investment and the accreted or amortized cost
basis of such investment.

Examples of Determination of Capital Gains Fee:

Alternative 1

Assumptions

 

  •   Year 1: $20 million investment made in Company A (“Investment A”), and $30
million investment made in Company B (“Investment B”)

 

  •   Year 2: Investment A is sold for $50 million and fair market value (“FMV”)
of Investment B determined to be $32 million

 

  •   Year 3: FMV of Investment B determined to be $25 million

 

  •   Year 4: Investment B sold for $31 million

The capital gains portion of the incentive fee would be:

 

  •   Year 1: None

 

  •   Year 2: Capital gains incentive fee of $6 million ($30 million realized
capital gains on sale of Investment A multiplied by 20%)

 

  •   Year 3: None

$5 million (20% multiplied by ($30 million cumulative capital gains less $5
million cumulative capital depreciation)) less $6 million (previous capital
gains fee paid in Year 2)

 

  •   Year 4: Capital gains incentive fee of $200,000

$6.2 million ($31 million cumulative realized capital gains multiplied by 20%)
less $6 million (capital gains fee taken in Year 2)

Alternative 2

Assumptions

 

  •   Year 1: $20 million investment made in Company A (“Investment A”), $30
million investment made in Company B (“Investment B”) and $25 million investment
made in Company C (“Investment C”)

 

  •   Year 2: Investment A sold for $50 million, FMV of Investment B determined
to be $25 million and FMV of Investment C determined to be $25 million

 

  •   Year 3: FMV of Investment B determined to be $27 million and Investment C
sold for $30 million

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  •   Year 4: FMV of Investment B determined to be $35 million

 

  •   Year 5: Investment B sold for $20 million

The capital gains incentive fee, if any, would be:

 

  •   Year 1: None

 

  •   Year 2: $5 million capital gains incentive fee

20% multiplied by $25 million ($30 million realized capital gains on Investment
A less unrealized capital depreciation on Investment B)

 

  •   Year 3: $1.4 million capital gains incentive fee(1)

$6.4 million (20% multiplied by $32 million ($35 million cumulative realized
capital gains less $3 million unrealized capital depreciation)) less $5 million
capital gains fee received in Year 2.

 

  •   Year 4: None

 

  •   Year 5: None

$5 million (20% multiplied by $25 million (cumulative realized capital gains of
$35 million less realized capital losses of $10 million)) less $6.4 million
cumulative capital gains fee paid in Year 2 and Year 3

 

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(1) As illustrated in Year 3 of Alternative 1 above, if the Corporation were to
be wound up on a date other than December 31st of any year, it may have paid
aggregate capital gain incentive fees that are more than the amount of such fees
that would be payable if it had been wound up on December 31st of such year.