Exhibit 10.3

FS INVESTMENT CORPORATION III

Up to 400,000,000 Shares of Common Stock, $0.001 par value per share

DEALER MANAGER AGREEMENT

December 20, 2013

FS2 Capital Partners, LLC

Cira Centre

2929 Arch Street, Suite 675

Philadelphia, PA 19104-2867

Ladies and Gentlemen:

FS Investment Corporation III, a Maryland corporation (the “Corporation”), has
registered for public sale (the “Offering”) a maximum of 400,000,000 shares of
its common stock, $0.001 par value per share (the “Common Stock”), to be issued
and sold to the public on a “best efforts” basis (the “Offered Shares”) through
you as the managing dealer (the “Dealer Manager”) and the broker-dealers
participating in the offering (the “Selected Dealers”) at an initial offering
price of $10.00 per share (subject in certain circumstances to discounts based
upon the volume of shares purchased). Terms not otherwise defined herein shall
have the same meaning as in the Prospectus, as that term is defined in
Section 1.1 below.

The Corporation has entered into an investment advisory and administrative
services agreement, dated as of December 20, 2013 (the “Investment Advisory
Agreement”), with FSIC III Advisor, LLC, a Delaware limited liability company
registered as an investment adviser (the “Adviser”) under the Investment
Advisers Act of 1940, as amended, and the rules and regulations thereunder
(collectively, the “Advisers Act”).

The Corporation and the Adviser hereby agree with you (this “Agreement”), the
Dealer Manager, as follows:

 

  1. Representations and Warranties of the Corporation and the Adviser.

The Corporation and the Adviser hereby represent and warrant to the Dealer
Manager and each Selected Dealer with whom the Dealer Manager has entered into
or will enter into a Selected Dealer Agreement (the “Selected Dealer Agreement”)
in the form attached as Exhibit A to this Agreement that, as of the date hereof
and at all times during the Offering Period, as that term is defined in
Section 4.1 below (provided that, to the extent such representations and
warranties are given only as of a specified date or dates, the Corporation and
the Adviser only make such representations and warranties as of such date or
dates):

1.1 The Corporation has prepared and filed with the Securities and Exchange
Commission (the “SEC”) a registration statement on Form N-2 (No. 333-191925) for
the registration of the Offered Shares in accordance in all material respects
with applicable

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requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and the applicable rules and regulations of the SEC promulgated thereunder (the
“Securities Act Regulations”). As used in this Agreement, the term “Registration
Statement” means such registration statement, as may be supplemented or amended
from time to time; the term “Effective Date” means the applicable date upon
which the Registration Statement or any post-effective amendment thereto is or
was first declared effective by the SEC; the term “Prospectus” means the
prospectus in the form constituting a part of the Registration Statement on the
Effective Date, as well as in the form filed with the SEC pursuant to Rule 497
after the Registration Statement becomes effective, except that the term
“Prospectus” shall also include any amendment or supplement thereto; and the
term “Filing Date” means the applicable date upon which the initial Prospectus
or any amendment or supplement thereto is filed with the SEC. As of the date
hereof, the SEC has not issued any stop order suspending the effectiveness of
the Registration Statement and no notices have been received by the Corporation
or the Adviser to the effect that any proceeding for that purpose has been
instituted or is pending before or threatened by the SEC under the Securities
Act.

1.2 The Registration Statement and the Prospectus, and any further amendments or
supplements thereto, will, as of the applicable Effective Date, comply in all
material respects with the Securities Act and the Securities Act Regulations;
the Registration Statement does not, and any amendments thereto will not, in
each case as of the applicable Effective Date, contain an untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; provided,
however, that the Corporation and the Adviser make no warranty or representation
with respect to any statement contained in the Registration Statement or the
Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with information furnished in writing to the Corporation by the
Dealer Manager or any Selected Dealer expressly for use in the Registration
Statement or the Prospectus, or any amendments or supplements thereto.

1.3 This Investment Advisory Agreement have been duly authorized, executed and
delivered by the Corporation.

1.4 The Corporation is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland, and is in good standing
with the State Department of Assessments and Taxation of Maryland, with full
power and authority to conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement and to perform the
transactions contemplated hereby; this Agreement has been duly authorized,
executed and delivered by the Corporation and, assuming due authorization,
execution and delivery by the Adviser and the Dealer Manager, is a legal, valid
and binding agreement of the Corporation enforceable against the Corporation in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general equitable principles, and except to
the extent that the enforceability of the indemnity and/or contribution
provisions contained in Section 5 of this Agreement may be limited under
applicable securities laws.

1.5 Each of the Corporation and the Adviser has qualified to do business and is
in good standing in every jurisdiction in which the conduct of its business, as
described in the

 

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Prospectus, requires such qualification, except where the failure to do so would
not have a material adverse effect on the condition, financial or otherwise,
results of operations or cash flows of the Corporation and the Adviser taken as
a whole or would materially and adversely affect the regulatory status of the
Adviser such that the Adviser would be prevented from carrying out its
obligations under the Investment Advisory Agreement (a “Material Adverse
Effect”).

1.6 The Adviser is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware with full power and
authority to conduct its business as described in the Registration Statement and
the Prospectus and to enter into this Agreement and to perform the transactions
contemplated hereby; this Agreement has been duly authorized, executed and
delivered by the Adviser and, assuming due authorization, execution and delivery
by the Corporation and the Dealer Manager, is a legal, valid and binding
agreement of the Adviser enforceable against the Adviser in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally, and by general equitable principles, and except to the extent that
the enforceability of the indemnity and/or contribution provisions contained in
Section 5 of this Agreement may be limited under applicable securities laws.

1.7 The Offered Shares conform in all material respects to the description of
the Common Stock contained in the Registration Statement and the Prospectus. The
authorized, issued and outstanding Common Stock as of the date hereof are as set
forth in the Prospectus under the caption “Description of Our Securities.” As of
the date hereof, all the issued and outstanding shares of Common Stock of the
Corporation are fully paid and non-assessable.

1.8 The Corporation is not in violation of its articles of incorporation or its
bylaws and the execution and delivery of this Agreement, the issuance, sale and
delivery of the Offered Shares, the consummation of the transactions herein
contemplated and compliance with the terms of this Agreement by the Corporation
will not violate the terms of or constitute a default under: (a) its articles of
incorporation or bylaws; or (b) any indenture, mortgage, deed of trust, lease,
or other material agreement to which the Corporation is a party; or (c) any law,
rule or regulation applicable to the Corporation; or (d) any writ, injunction or
decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Corporation except, in the cases of
clauses (b), (c) and (d), for such violations or defaults that, individually or
in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.

1.9 The Adviser is not in violation of its certificate of formation or its
limited liability company agreement and the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated and
compliance with the terms of this Agreement by the Adviser will not violate the
terms of or constitute a default under: (a) its certificate of formation or
limited liability company agreement; or (b) any indenture, mortgage, deed of
trust, lease, or other material agreement to which the Adviser is a party; or
(c) any law, rule or regulation applicable to the Adviser; or (d) any writ,
injunction or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Adviser except, in the cases
of clauses (b), (c) and (d), for such violations or defaults that, individually
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.

 

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1.10 Upon the commencement of the Offering, the Corporation will be a
non-diversified, closed-end management investment company that has elected to be
treated as a business development company (“BDC”) under the Investment Company
Act of 1940, as amended, (the “Investment Company Act”), and has not withdrawn
such election, and the SEC has not ordered that such election be withdrawn nor
to the Corporation’s knowledge have proceedings to effectuate such withdrawal
been initiated or threatened by the SEC.

1.11 The terms of the Investment Advisory Agreement, including compensation
terms, comply in all material respects with all applicable provisions of the
Investment Company Act and the Advisers Act.

1.12 The approval of the Investment Advisory Agreement by each of the board of
directors and the initial stockholders of the Corporation has been made in
accordance with the requirements of Section 15 of the Investment Company Act
applicable to companies that have elected to be regulated as BDCs under the
Investment Company Act.

1.13 Except as disclosed in the Registration Statement and the Prospectus,
(i) no person is serving or acting as an officer, director or investment adviser
of the Corporation, except in accordance with the applicable provisions of the
Investment Company Act and the Advisers Act and the applicable published rules
and regulations thereunder, and (ii) to the knowledge of the Corporation, no
director of the Corporation is an “affiliated person” (as defined in the
Investment Company Act) of the Dealer Manager.

1.14 The Corporation’s current business operations and investments and
contemplated business operations and investments are in compliance in all
material respects with the provisions of the Investment Company Act and the
rules and regulations of the SEC thereunder applicable to BDCs and the rules and
regulations of the SEC thereunder, except as will not result, individually or in
the aggregate, in a Material Adverse Effect.

1.15 The provisions of the articles of incorporation and bylaws of the
Corporation and the investment objectives, policies and restrictions described
in the Prospectus are not inconsistent with the requirements of the Investment
Company Act and the rules and regulations of the SEC thereunder applicable to a
BDC.

1.16 Except as have been obtained or waived, no material consent, approval,
authorization or other order of any governmental authority is required in
connection with the execution or delivery by the Corporation of this Agreement
or the issuance and sale by the Corporation of the Offered Shares, except
(a) registration of the Offered Shares under the Securities Act; (b) election to
be regulated as a BDC under the Investment Company Act; (c) any necessary
qualification under the securities or blue sky laws of the jurisdictions in
which the Offered Shares are being offered by the Dealer Manager and the
Selected Dealers; and (d) any necessary qualification under the conduct rules
set forth in the Financial Industry Regulatory Authority, Inc. (“FINRA”)
rulebook (the “FINRA Rules”).

 

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1.17 There are no actions, suits or proceedings pending or, to the knowledge of
the Corporation or the Adviser, threatened against either the Corporation or the
Adviser at law or in equity or before or by any federal or state commission,
regulatory body or administrative agency or other governmental body, domestic or
foreign, which would have a Material Adverse Effect.

1.18 The issuance and sale of the Offered Shares have been duly authorized by
the Corporation, and, when issued and duly delivered against payment therefor as
contemplated by this Agreement, will be validly issued, fully paid and
non-assessable, free and clear of any pledge, lien, encumbrance, security
interest or other claim, and the issuance and sale of the Offered Shares by the
Corporation are not subject to preemptive or other similar rights arising by
operation of law, under the articles of incorporation or bylaws of the
Corporation or under any agreement to which the Corporation is a party or
otherwise.

1.19 The Corporation has entered into an escrow agreement (the “Escrow
Agreement”) with UMB Bank, N.A. as escrow agent (the “Escrow Agent”) and the
Dealer Manager, in the form included as an exhibit to the Registration
Statement, which provides for the establishment of an escrow account into which
subscribers’ funds will be deposited, prior to the Corporation raising gross
offering proceeds of $2,500,000 from persons not affiliated with the Corporation
or the Adviser (the “Minimum Offering”) as described in the Prospectus, pursuant
to the subscription procedures described in Section 13 below (the “Escrow
Account”).

1.20 The financial statements of the Corporation included in the Registration
Statement and the Prospectus, together with the related notes, present fairly,
in all material respects, the financial position of the Corporation, as of the
date specified, in conformity with generally accepted accounting principles
applied on a consistent basis and in conformity with Regulation S-X of the SEC,
except as described in the notes thereto. No additional financial statements are
required to be included in the Registration Statement or the Prospectus.

1.21 McGladrey LLP, whose report on the financial statements of the Corporation
included in the Registration Statement and Prospectus, are, and during the
period covered by the report included in the Registration Statement and the
Prospectus, were independent registered public accountants as required by the
Securities Act and the rules and regulations of the Public Company Accounting
Oversight Board.

1.22 Since the respective dates as of which information is given in the
Registration Statement and the Prospectus or any amendments or supplements
thereto, there has not been any event or development which could reasonably be
seen as having a Material Adverse Effect.

1.23 There are no contracts or other documents required by the Securities Act or
the Securities Act Regulations to be described in or incorporated by reference
into the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement which have not been accurately described in all
material respects in the Prospectus or incorporated or filed as required. The
agreements to which either the Corporation or the Adviser is a party which are
described in the Registration Statement and the Prospectus are valid and
enforceable in all material respects by the Corporation and/or the Adviser
except as

 

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enforceability may be limited by bankruptcy, reorganization, moratorium or
similar laws affecting the enforceability of creditors’ rights generally and
rules of law governing specific performance, injunctive relief and other
equitable remedies, and, to the best of the Corporation’s and the Adviser’s
knowledge, no party thereto is in breach or default under any of such agreements
except where such breach or default would not have a Material Adverse Effect.

1.24 The Corporation has, and, to the knowledge of the Corporation, all of the
Corporation’s directors or officers in their capacities as such have, complied
in all material respects with any applicable provision of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection therewith.

1.25 Neither the Corporation nor, to the knowledge of the Corporation, any
director, officer, employee or affiliate of the Corporation is aware of or has
taken any action, directly or indirectly, that would result in a violation by
such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

1.26 Each of the Corporation and the Adviser expects to implement and maintain
controls and other procedures that will be designed to ensure that information
required to be disclosed by the Corporation in the reports that it files or
submits under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms and is accumulated and communicated to
the Corporation’s management, including its chief executive officer and chief
financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure; and the Corporation will
make and keep books, records and accounts which, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the Corporation and the Adviser; and the Corporation and the Adviser expect to
implement and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; and, to the Corporation’s knowledge, neither the Corporation nor
the Adviser, nor any employee or agent thereof, has made any payment of funds of
the Corporation or the Adviser, as the case may be, or received or retained any
funds, and no funds of the Corporation have been set aside to be used for any
payment, in each case in material violation of any law, rule or regulation
applicable to the Corporation or the Adviser.

1.27 No relationship, direct or indirect, exists between or among the
Corporation on the one hand, and the directors, officers and security holders of
the Corporation, the Adviser or their respective affiliates, on the other hand,
which is required to be described in the Prospectus and which is not so
described.

 

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  2. Covenants of the Corporation and the Adviser.

The Corporation and the Adviser hereby jointly and severally covenant and agree
with the Dealer Manager that:

2.1 The Corporation will: (a) use commercially reasonable efforts to cause the
Registration Statement and any subsequent amendments thereto to become effective
as promptly as possible; (b) promptly advise the Dealer Manager (i) of the
receipt of any comments of, or requests for additional or supplemental
information from, the SEC, (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or
supplement to the Prospectus, and (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective;
(iv) timely file every amendment or supplement to the Registration Statement or
the Prospectus that may be required by the SEC or under the Securities Act; and
(v) promptly notify the Dealer Manager if at any time the SEC shall issue any
stop order suspending the effectiveness of the Registration Statement, and, to
the extent the Corporation determines that such action is in its best interest,
the Corporation will use its commercially reasonable efforts to obtain the
lifting of such order at the earliest possible time.

2.2 In addition to and apart from the Prospectus, the Corporation intends to
furnish to all appropriate regulatory agencies and use printed sales literature
or other materials in connection with the Offering prepared by the Corporation,
the Adviser or the Dealer Manager. Such printed sales literature or other
materials prepared by the Corporation, the Adviser or the Dealer Manager,
provided that the use of said sales literature and other materials has been
approved for use by the Corporation in writing and all appropriate regulatory
agencies, are referred to hereinafter as the “Authorized Sales Materials.” In
the event that the Corporation uses printed materials in connection with the
Offering prepared by the Corporation, the Adviser or the Dealer Manager that is
intended for “broker-dealer use only,” the Dealer Manager shall use such
“broker-dealer use only” materials in accordance with Section 4.3 below.

2.3 The Corporation will, at no expense to the Dealer Manager, furnish the
Dealer Manager with such number of printed copies of the Registration Statement,
including all amendments and exhibits thereto, as the Dealer Manager may
reasonably request. The Corporation will similarly furnish to the Dealer Manager
and Selected Dealers designated by the Dealer Manager as many copies as the
Dealer Manager may reasonably request in connection with the Offering of the
Offered Shares of (a) the Prospectus in preliminary and final form and every
form of supplement to the Prospectus or post-effective amendment to the
Registration Statement; and (b) the Authorized Sales Materials.

2.4 The Corporation will use its commercially reasonable efforts to (a) qualify
the Offered Shares for offering and sale under, or to establish the exemption of
the offering and sale of the Offered Shares from qualification or registration
under, the applicable state securities or “blue sky” laws of each jurisdiction
designated in Exhibit B hereto (the “Qualified Jurisdictions”) and (b) maintain
such qualifications or exemptions in effect throughout the Offering. In
connection therewith, the Corporation will prepare and file all such reports as
may be required by the securities regulatory authorities in the Qualified
Jurisdictions in which the Offered Shares have been sold, provided that the
Dealer Manager shall have provided the Corporation with any information required
for such filings or reports that is in the Dealer

 

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Manager’s possession. The Corporation will notify the Dealer Manager promptly
following each date of (i) the effectiveness of qualification or exemption of
Offered Shares in any additional jurisdiction in which the offering and sale of
Offered Shares has been authorized by appropriate state regulatory authorities;
and (ii) a change in the status of the qualification or exemption of the Offered
Shares in any jurisdiction in any respect. The Corporation will file and obtain
clearance of the Authorized Sales Materials to the extent required by applicable
state securities laws. The Corporation will furnish to the Dealer Manager a copy
of such papers filed by the Corporation in connection with any such
qualification.

2.5 If at any time when a Prospectus is required to be delivered under the
Securities Act any event occurs as a result of which, in the opinion of the
Corporation, the Prospectus would include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading, the
Corporation will promptly notify the Dealer Manager thereof (unless the
information shall have been received from the Dealer Manager) and the Dealer
Manager and the Selected Dealers shall suspend the offering and sale of the
Offered Shares in accordance with Section 4.3 hereof until such time as the
Corporation, in its sole discretion (a) instructs the Dealer Manager to resume
the offering and sale of the Offered Shares and (b) has prepared any required
supplement to the Prospectus or post-effective amendment to the Registration
Statement as shall be necessary to correct such statement or omission and to
comply with the requirements of Section 10 of the Securities Act.

2.6 The Corporation will apply the proceeds from the sale of the Offered Shares
as stated in the Prospectus.

2.7 The Corporation will engage and maintain, at its expense, a registrar and
transfer agent for the Offered Shares.

2.8 The Corporation will use its commercially reasonable efforts to maintain its
status as a BDC under the Investment Company Act; provided, however, the
Corporation may cease to be, or withdraw its election as a BDC under the
Investment Company Act, with the approval of its board of directors and a vote
of its stockholders as required by Section 58 of the Investment Company Act, or
a successor provision.

2.9 The Corporation will operate in a manner so as to enable the Corporation to
qualify as a regulated investment company under the Internal Revenue Code of
1986, as amended, for each taxable year during which it elects to be treated as
a BDC under the Investment Company Act; provided, however, that at the
discretion of the Corporation’s board of directors, it may elect to not be so
treated.

 

  3. Payment of Expenses and Fees.

3.1 The Corporation agrees to pay all costs and expenses incident to the
Offering, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, including expenses, fees and taxes in
connection with: (a) the registration fee, the preparation and filing of the
Registration Statement (including without limitation financial statements,
exhibits, schedules and consents), the Prospectus, and any

 

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amendments or supplements thereto, and the printing and furnishing of copies of
each thereof to the Dealer Manager and to Selected Dealers (including costs of
mailing and shipment); (b) the preparation, issuance and delivery of
certificates, if any, for the Offered Shares, including any stock or other
transfer taxes or duties payable upon the sale of the Offered Shares; (c) all
fees and expenses of the Corporation’s legal counsel and the independent
registered public accounting firm; (d) the qualification of the Offered Shares
for offering and sale under state laws in the states, including the Qualified
Jurisdictions, that the Corporation shall designate as appropriate and the
determination of their eligibility for investment under state law as aforesaid
and the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Dealer Manager; (e) filing for review by FINRA of all
necessary documents and information relating to the Offering and the Offered
Shares (including the reasonable legal fees and filing fees and other
disbursements of counsel relating thereto); (f) the fees and expenses of any
transfer agent or registrar for the Offered Shares and miscellaneous expenses
referred to in the Registration Statement; (g) all costs and expenses incident
to the travel and accommodation of the Corporation’s employees in making road
show presentations with respect to the offering of the Offered Shares; and
(h) the performance of the Corporation’s other obligations hereunder.

3.2 In addition, the Corporation shall reimburse the Dealer Manager for due
diligence expenses of up to 0.5% of gross proceeds from the sale of the Offered
Shares for bona fide accountable due diligence expenses incurred by the Dealer
Manager or any Selected Dealer. Such due diligence expenses may include travel,
lodging, meals and other reasonable out-of-pocket expenses incurred by the
Dealer Manager or any Selected Dealer and their personnel when visiting the
Corporation’s offices to verify information relating to the Corporation. The
Dealer Manager or any Selected Dealer shall provide to the Corporation a
detailed and itemized invoice for any such due diligence expenses.

 

  4. Obligations and Compensation of Dealer Manager.

The Dealer Manager hereby represents and warrants to, and covenants and agrees
with the Corporation and the Adviser (provided that, to the extent
representations and warranties of the Corporation and the Adviser are given only
as of a specified date or dates, the Dealer Manager only makes such
representations and warranties as of such date or dates), as follows:

4.1 The Corporation hereby appoints the Dealer Manager as its exclusive agent
and distributor during the period commencing with the date hereof and ending on
the termination date of the Offering (the “Termination Date”) described in the
Prospectus (the “Offering Period”) to solicit and to cause Selected Dealers to
solicit subscriptions for the Offered Shares at the subscription price to be
paid in accordance with, and otherwise upon the other terms and conditions set
forth in, the Prospectus and the Subscription Agreement, and the Dealer Manager
agrees to use its best efforts to procure subscribers for the Offered Shares
during the Offering Period. The Offered Shares offered and sold through the
Dealer Manager under this Agreement shall be offered and sold only by the Dealer
Manager and, at the Dealer Manager’s sole option, by any Selected Dealers whom
the Dealer Manager may retain, each of which shall be members of FINRA in good
standing, pursuant to an executed Selected Dealer Agreement with such Selected
Dealer. The Dealer Manager hereby accepts such agency and distributorship and
agrees to use its best efforts to sell the Offered Shares on said terms and
conditions. The Dealer Manager represents to the Corporation that (i) it is a
member of FINRA in good standing,

 

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(ii) it and its employees and representatives have all required licenses and
registrations to act under this Agreement and (iii) it has established and
implemented anti-money laundering compliance programs in accordance with
applicable law, including applicable FINRA rules, SEC rules and regulations
(“Commission Rules”) and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT
Act) of 2001, as amended by the USA Patriot Improvement and Reauthorization Act
of 2005 (the “USA PATRIOT Act”), specifically including, but not limited to,
Section 352 of the International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001 (the “Money Laundering Abatement Act” and together with
the USA PATRIOT Act, the “AML Rules”) reasonably expected to detect and cause
the reporting of suspicious transactions in connection with the offering and
sale of the Offered Shares. In addition, the Dealer Manager represents that it
has established and implemented a program for compliance with Executive Order
13224 and all regulations and programs administered by the U.S. Department of
the Treasury’s Office of Foreign Assets Control regulations (“OFAC Program”) and
will continue to maintain its OFAC Program during the term of this Agreement.

The Dealer Manager further represents that it is currently in compliance with
all AML Rules and OFAC requirements, specifically including, but not limited to,
the Customer Identification Program requirements under Section 326 of the USA
PATRIOT Act, and the Dealer Manager hereby agrees, upon request of the
Corporation, to provide an annual certification to the Corporation that, as of
the date of such certification (i) its AML Program and its OFAC Program are
consistent with the AML Rules and OFAC requirements, (ii) it has continued to
implement its AML Program and its OFAC Program, and (iii) it is currently in
compliance with all AML Rules and OFAC requirements, specifically including, but
not limited to, the Customer Identification Program requirements under
Section 326 of the USA PATRIOT Act.

4.2 With respect to its participation and the participation by each Selected
Dealer in the offer and sale of the Offered Shares (including, without
limitation any resales and transfers of Offered Shares), the Dealer Manager
agrees, and, by virtue of entering into the Selected Dealer Agreement, each
Selected Dealer shall have agreed, to comply and shall comply with any
applicable requirements of the Securities Act, the Exchange Act, the rules
promulgated under each, the applicable state securities or blue sky laws, and
FINRA Rules, specifically including, but not in any way limited to, FINRA Rules
2340, 2310 (including the obligations with respect to disclosure of certain
information relating to liquidity and marketability of prior programs pursuant
to FINRA Rules 2310(b)(3)(D)) and 5141, and NASD Rule 2420 therein. The Dealer
Manager agrees, and each Selected Dealer shall have agreed, to comply and shall
comply with any applicable requirements with respect to its and each Selected
Dealer’s participation in any resales or transfers of the Offered Shares. In
addition, the Dealer Manager agrees, and each Selected Dealer shall have agreed,
that should it or they assist with the resale or transfer of the Offered Shares,
it and each Selected Dealer will fully comply with all applicable FINRA or
Commission Rules or any other applicable Federal or state laws.

4.3 The Dealer Manager shall cause the Offered Shares to be offered and sold
only in the Qualified Jurisdictions, and in such additional jurisdictions as may
be added thereto in which the offering and sale of Offered Shares has been
authorized by appropriate state regulatory authorities. No Offered Shares shall
be offered or sold for the account of the

 

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Corporation in any other jurisdictions. The Dealer Manager shall use and
distribute in conjunction with the offer and sale of any Offered Shares only the
Prospectus and the Authorized Sales Materials. The Authorized Sales Materials
may only be furnished to prospective investors if accompanied or preceded by the
Prospectus. The Dealer Manager represents and warrants to the Corporation that
it will not use any sales literature not authorized and approved by the
Corporation or use any “broker-dealer use only” materials with members of the
public in connection with offers or sales or the Offered Shares. The Dealer
Manager agrees, and will cause the Selected Dealers to each agree, to suspend or
terminate offering and sale of the Offered Shares upon request of the
Corporation at any time and to resume offering and sale of the Offered Shares
upon subsequent request of the Corporation.

4.4 In consideration for the services rendered by the Dealer Manager, the
Corporation agrees that it will pay to the Dealer Manager:

(a) a dealer manager fee in the amount of 3.0% of the gross proceeds from the
sale of the Offered Shares (the “Dealer Manager Fee”), a portion of which may be
reallowed to Selected Dealers (as described more fully in the Selected Dealer
Agreement entered into with such Selected Dealer), up to an aggregate maximum of
1.5% of the gross proceeds of the Offered Shares sold, which reallowance, if
any, shall be determined by the Dealer Manager in its discretion based on
factors including, but not limited to, the number of shares sold by such
Selected Dealer, the assistance of such Selected Dealer in marketing the
Offering and due diligence expenses incurred, and the extent to which similar
fees are reallowed to selected broker-dealers in similar offerings being
conducted during the Offering Period; provided, however, that no Dealer Manager
Fee shall be payable in respect of the purchase of Offered Shares by an officer,
director or employee of the Corporation, the Adviser or their respective
affiliates; and

(b) subject to volume discounts and other special circumstances described in or
otherwise provided in the “Plan of Distribution” section of the Prospectus,
selling commissions in the amount of 7.0% of the gross proceeds of the Offered
Shares sold, which commissions may be reallowed in whole or in part to the
Selected Dealer who sold the Offered Shares giving rise to such commissions, as
described more fully in the Selected Dealer Agreement entered into with such
Selected Dealer; provided, however, that no commissions described in this clause
(b) shall be payable in respect of the purchase of Offered Shares: (i) through
an investment advisory representative affiliated with a Selected Dealer who is
paid on a fee-for-service basis by the investor; (ii) by a Selected Dealer (or
such Selected Dealer’s registered representative), in its individual capacity,
or by a retirement plan of such Selected Dealer (or such Selected Dealer’s
registered representative), or (iii) by an officer, director or employee of the
Corporation, the Adviser or their respective affiliates.

4.5 The Corporation will not be liable or responsible to any Selected Dealer for
direct payment of commissions or the Dealer Manager Fee to such Selected Dealer,
it being the sole and exclusive responsibility of the Dealer Manager for payment
of commissions or the Dealer Manager Fee to Selected Dealers. Notwithstanding
the above, the Corporation, in its sole discretion, either directly or through
the Escrow Agent or such other agent appointed by it, may act as agent of the
Dealer Manager by making direct payment of commissions or the Dealer Manager Fee
to such Selected Dealers without incurring any liability therefor. The Dealer

 

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Manager Fee and all selling commissions payable to the Dealer Manager with
respect to any Offered Shares sold will be paid or offered substantially
concurrently with the acceptance of subscribers for such Offered Shares as
stockholders by the Corporation.

4.6 The Dealer Manager represents and warrants to the Corporation, the Adviser
and each person that signs the Registration Statement that the information
regarding the Offering in the Prospectus and all other information furnished to
the Corporation by the Dealer Manager in writing expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto, does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.

4.7 The Dealer Manager represents and warrants to the Corporation and the
Adviser that it will not represent or imply that the Escrow Agent has
investigated the desirability or advisability of investment in the Corporation,
or has approved, endorsed or passed upon the merits of the Offered Shares or the
Corporation, nor will the Dealer Manager use the name of said Escrow Agent in
any manner whatsoever in connection with the offer or sale of the Offered Shares
other than by acknowledgment that it has agreed to serve as escrow agent.

 

  5. Indemnification.

5.1 For the purposes of this Section 5, an entity’s “Indemnified Parties” shall
include such entity’s officers, directors, employees, members, partners, agents
and representatives, and each person, if any, who controls such entity within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act.

5.2 The Corporation and the Adviser, jointly and severally, will indemnify,
defend (subject to Section 5.6) and hold harmless the Selected Dealers and the
Dealer Manager, and their respective Indemnified Parties, from and against any
losses, claims (including the reasonable cost of investigation), damages or
liabilities, joint or several, to which such Selected Dealers or Dealer Manager,
or their respective Indemnified Parties, may become subject, under the
Securities Act or the Exchange Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (a) in whole or in part, any material inaccuracy in a
representation or warranty contained herein by either the Corporation or the
Adviser, any material breach of a covenant contained herein by either the
Corporation or the Adviser, or any material failure by either the Corporation or
the Adviser to perform its obligations hereunder or to comply with state or
federal securities laws applicable to the Offering, or (b) any untrue statement
or alleged untrue statement of a material fact contained (i) in the Registration
Statement or any post-effective amendment thereto or in the Prospectus or any
supplement thereto, (ii) in any Authorized Sales Materials or (iii) in any blue
sky application or other document executed by the Corporation or on its behalf
specifically for the purpose of qualifying any or all of the Offered Shares for
sale under the securities laws of any jurisdiction or based upon written
information furnished by the Corporation or the Adviser under the securities
laws thereof (any such application, document or information being hereinafter
called a “Blue Sky Application”), or (c) the omission or alleged omission to
state a material fact required to be stated in the Registration Statement or any
post-effective amendment thereof or in the Prospectus or any supplement to the
Prospectus as necessary to make the statements therein not misleading,

 

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and the Corporation and the Adviser will reimburse each Selected Dealer or
Dealer Manager, and/or their respective Indemnified Parties, for any legal or
other expenses reasonably incurred by such Selected Dealer or Dealer Manager,
and/or their respective Indemnified Parties, in connection with investigating or
defending such loss, claim, damage, liability or action; provided, however, that
the Corporation or the Adviser will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of, or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished
either (x) to the Corporation or the Adviser by the Dealer Manager or (y) to the
Corporation, the Adviser or Dealer Manager by or on behalf of any Selected
Dealer expressly for use in the Registration Statement or any such
post-effective amendment thereto, or the Prospectus or any such supplement
thereto. This indemnity agreement will be in addition to any liability which
either the Corporation or the Adviser may otherwise have.

Notwithstanding the foregoing, the indemnification and agreement to hold
harmless provided in this Section 5.2 is further limited to the extent that no
such indemnification by the Corporation or the Adviser of a Selected Dealer or
the Dealer Manager, or their respective Indemnified Parties, shall be permitted
under this Agreement for, or arising out of, an alleged violation of federal or
state securities laws, unless one or more of the following conditions are met:
(i) there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular indemnitee;
(ii) such claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the particular indemnitee; or (iii) a court of
competent jurisdiction approves a settlement of the claims against the
particular indemnitee and finds that indemnification of the settlement and the
related costs should be made, and the court considering the request for
indemnification has been advised of the position of the SEC and of the published
position of any state securities regulatory authority in which the securities
were offered or sold as to indemnification for violations of securities laws.

5.3 The Dealer Manager will indemnify, defend and hold harmless the Corporation
and the Adviser, their respective Indemnified Parties and each person who has
signed the Registration Statement, from and against any losses, claims, damages
or liabilities to which any of the aforesaid parties may become subject, under
the Securities Act or the Exchange Act, or otherwise, insofar as such losses,
claims (including the reasonable cost of investigation), damages or liabilities
(or actions in respect thereof) arise out of or are based upon (a) in whole or
in part, any material inaccuracy in a representation or warranty contained
herein by the Dealer Manager, any material breach of a covenant contained herein
by the Dealer Manager, or any material failure by the Dealer Manager to perform
its obligations hereunder or (b) any untrue statement or any alleged untrue
statement of a material fact contained (i) in the Registration Statement or any
post-effective amendment thereto or in the Prospectus or any supplement thereto,
(ii) in any Authorized Sales Materials or (iii) any Blue Sky Application, or
(c) the omission or alleged omission to state a material fact required to be
stated in the Registration Statement or any post-effective amendment thereof or
in the Prospectus or any supplement to the Prospectus as necessary to make the
statements therein not misleading; provided, however, that in each case
described in clauses (b) and (c) to the extent, but only to the extent, that
such untrue statement or omission was made in reliance upon and in conformity
with written information furnished to the Corporation or the Adviser by the
Dealer Manager specifically for use with reference to the Dealer Manager in the
preparation of the Registration Statement or any such

 

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post-effective amendments thereof or the Prospectus or any such supplement
thereto, or (c) any use of sales literature by the Dealer Manager not authorized
or approved by the Corporation or any use of “broker-dealer use only” materials
with members of the public concerning the Offered Shares by the Dealer Manager,
or (d) any untrue statement made by the Dealer Manager or its representatives or
agents or omission to state a fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading
in connection with the offer and sale of the Offered Shares, or (e) any material
violation by the Dealer Manager of this Agreement, or (f) any failure by the
Dealer Manager to comply with applicable laws governing money laundry abatement
and anti-terrorist financing efforts, including applicable FINRA Rules, SEC
Rules and the USA PATRIOT Act, or (g) any other failure by the Dealer Manager to
comply with applicable FINRA or Commission Rules. The Dealer Manager will
reimburse the aforesaid parties in connection with investigation or defense of
such loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which the Dealer Manager may otherwise have.

5.4 Each Selected Dealer severally will indemnify, defend and hold harmless the
Corporation, the Adviser, the Dealer Manager, each of their respective
Indemnified Parties and each person who signs the Registration Statement, from
and against any losses, claims, damages or liabilities to which the Corporation,
the Adviser, the Dealer Manager, any of their respective Indemnified Parties, or
any person who signed the Registration Statement, may become subject, under the
Securities Act or otherwise, insofar as such losses, claims (including the
reasonable cost of investigation), damages or liabilities (or actions in respect
thereof) arise out of or are based upon (a) in whole or in part, any material
inaccuracy in a representation or warranty by the Selected Dealer, any material
breach of a covenant by the Selected Dealer, or any material failure by the
Selected Dealer to perform its obligations hereunder or under the Selected
Dealer Agreement, (b) any untrue statement or alleged untrue statement of a
material fact contained (i) in the Registration Statement or any post-effective
amendment thereto or the Prospectus or any supplement thereto (ii) in any
Authorized Sales Materials or (iii) any Blue Sky Application, or (c) the
omission or alleged omission to state a material fact required to be stated in
the Registration Statement or any post-effective amendment thereof or in the
Prospectus or any supplement to the Prospectus or necessary to make statements
therein not misleading, provided, however, that in each case described in
clauses (b) and (c) to the extent, but only to the extent, that such untrue
statement or omission was made in reliance upon and in conformity with written
information furnished to the Corporation or the Adviser or the Dealer Manager by
the Selected Dealer specifically for use with reference to the Selected Dealer
in the Registration Statement or any such post-effective amendments thereof or
the Prospectus or any such supplement thereto, or (d) any use of sales
literature by the Selected Dealer not authorized or approved by the Corporation
or use of “broker-dealer use only” materials with members of the public
concerning the Offered Shares by such Selected Dealer or Selected Dealer’s
representatives or agents, or (e) any untrue statement made by such Selected
Dealer or its representatives or agents or omission to state a fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading in connection with the offer and sale of the
Offered Shares, or (f) any failure by the Selected Dealer to comply with Section
VII or Section X of the Selected Dealer Agreement or any other material
violation of the Selected Dealer Agreement, or (f) any failure of the Selected
Dealer to comply with applicable laws governing money laundry abatement and
anti-terrorist financing efforts, including applicable FINRA Rules, Commission
Rules and the USA PATRIOT Act, or (g) any

 

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other failure by the Selected Dealer to comply with applicable FINRA or
Commission Rules or any other applicable Federal or state laws. Each Selected
Dealer will reimburse the aforesaid parties in connection with investigation or
defense of such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which the Selected Dealer may
otherwise have.

5.5 Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 5, notify in writing the indemnifying party of the commencement thereof
and the omission to so notify the indemnifying party will relieve such
indemnifying party from any liability under this Section 5 as to the particular
item for which indemnification is then being sought, but not from any other
liability which it may have to any indemnified party. In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled, to the extent
it may wish, jointly with any other indemnifying party similarly notified, to
participate in the defense thereof, with separate counsel. Such participation
shall not relieve such indemnifying party of the obligation to reimburse the
indemnified party for reasonable legal and other expenses (subject to
Section 5.6) incurred by such indemnified party in defending itself, except for
such expenses incurred after the indemnifying party has deposited funds
sufficient to effect the settlement, with prejudice, of the claim in respect of
which indemnity is sought. Any such indemnifying party shall not be liable to
any such indemnified party on account of any settlement of any claim or action
effected without the consent of such indemnifying party.

5.6 An indemnifying party under Section 5 of this Agreement shall be obligated
to reimburse an indemnified party for reasonable legal and other expenses as
follows:

(a) In the case of the Corporation and/or the Adviser indemnifying the Dealer
Manager, the advancement of funds of the Corporation to the Dealer Manager for
legal expenses and other costs incurred as a result of any legal action for
which indemnification is being sought shall be permissible only if all of the
following conditions are satisfied: (i) the legal action relates to acts or
omissions with respect to the performance of duties or services on behalf of the
Corporation; (ii) the legal action is initiated by a third party who is not a
stockholder of the Corporation or the legal action is initiated by a stockholder
of the Corporation acting in his or her capacity as such and a court of
competent jurisdiction specifically approves such advancement; and (iii) the
Dealer Manager undertakes to repay the advanced funds to the Corporation,
together with the applicable legal rate of interest thereon, in cases which the
Dealer Manager is found not to be entitled to indemnification.

(b) In any case of indemnification other than that described in Section 5.6(a)
above, the indemnifying party shall pay all legal fees and expenses of the
indemnified party in the defense of such claims or actions; provided, however,
that the indemnifying party shall not be obligated to pay legal expenses and
fees to more than one law firm in connection with the defense of similar claims
arising out of the same alleged acts or omissions giving rise to such claims
notwithstanding that such actions or claims are alleged or brought by one or
more parties against more than one indemnified party. If such claims or actions
are alleged or brought against more than one indemnified party, then the
indemnifying party shall only be obliged to reimburse

 

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the expenses and fees of the one law firm that has been selected by a majority
of the indemnified parties against which such action is finally brought; and in
the event a majority of such indemnified parties is unable to agree on which law
firm for which expenses or fees will be reimbursable by the indemnifying party,
then payment shall be made to the first law firm of record representing an
indemnified party against the action or claim. Such law firm shall be paid only
to the extent of services performed by such law firm and no reimbursement shall
be payable to such law firm on account of legal services performed by another
law firm.

5.7 The indemnity agreements contained in this Section 5 shall remain operative
and in full force and effect regardless of: (a) any investigation made by or on
behalf of any Selected Dealer, or any person controlling any Selected Dealer or
by or on behalf of the Corporation, the Adviser, the Dealer Manager or any
officer, trustee or director thereof, or by or on behalf of the Corporation or
the Dealer Manager; (b) delivery of any Offered Shares and payment therefor; and
(c) any termination of this Agreement or any Selected Dealer Agreement. A
successor of any Selected Dealer or of any of the parties to this Agreement, as
the case may be, shall be entitled to the benefits of the indemnity agreements
contained in this Section 5.

5.8 Notwithstanding any other provision of this Section 5, no party shall be
entitled to indemnification or contribution under this Agreement in violation of
Section 17(i) of the Investment Company Act.

 

  6. Survival of Provisions.

The respective agreements, representations and warranties of the Corporation,
the Adviser and the Dealer Manager set forth in this Agreement shall remain
operative and in full force and effect until the Termination Date regardless of:
(a) any investigation made by or on behalf of the Dealer Manager or any Selected
Dealer or any person controlling the Dealer Manager or any Selected Dealer or by
or on behalf of the Corporation, the Adviser or any person controlling the
Corporation; and (b) the delivery of payment for the Offered Shares. Following
the termination of this Agreement, this Agreement will become void and there
will be no liability of any party to any other party hereto, except for
obligations under Sections 5, 6, 7, 9, 10, 11 and 15, all of which will survive
the termination of this Agreement.

 

  7. Applicable Law; Venue

This Agreement and any claim, counterclaim or dispute of any kind or nature
whatsoever arising out of or in any way relating to this Agreement, directly or
indirectly, shall be governed by the laws of the State of Delaware applicable to
contracts formed and to be formed entirely within the State of Delaware, without
regard to the conflicts of laws principles and rules thereof, to the extent such
principles would require or permit the application of the laws of another
jurisdiction.

 

  8. Counterparts.

This Agreement may be executed in any number of counterparts. Each counterpart,
when executed and delivered, shall be an original contract, but all
counterparts, when taken together, shall constitute one and the same Agreement.

 

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  9. Entire Agreement.

This Agreement and the Exhibits attached hereto constitute the entire agreement
among the parties and supersede any prior understanding, whether written or
oral, prior to the date hereof with respect to the Offering.

 

  10. Successors and Amendment.

10.1 This Agreement shall inure to the benefit of and be binding upon the Dealer
Manager, the Corporation, the Adviser and their respective successors and
permitted assigns and shall inure to the benefit of the Selected Dealers to the
extent set forth in Sections 1 and 5 hereof. Nothing in this Agreement is
intended or shall be construed to give to any other person any right, remedy or
claim, except as otherwise specifically provided herein.

10.2 This Agreement may be amended only by the written agreement of the Dealer
Manager, the Corporation and the Adviser.

10.3 Neither the Corporation or Adviser, nor the Dealer Manager may assign or
transfer any of such party’s rights or obligations under this Agreement without
the prior written consent of the Dealer Manager, on the one hand, or the
Corporation and the Adviser, acting together, on the other hand.

 

  11. Term and Termination.

11.1 This Agreement may be terminated by the Dealer Manager, on the one hand, or
the Corporation and the Adviser acting together, on the other, in the event that
(a) the Corporation or the Adviser, on the one hand, or the Dealer Manager, on
the other, shall have materially failed to comply with any of the material
provisions of this Agreement or (b) the Corporation or the Adviser, on the one
hand, or the Dealer Manager, on the other, materially breaches any of its
representations and warranties contained in this Agreement and, in the case of
the Corporation or the Adviser, such breach or breaches, individually or in the
aggregate, would have a Material Adverse Effect; provided, however, that no
party may terminate this Agreement under this sentence unless such failure(s) or
breach(es) under clause (a) or (b) above is or are not cured within thirty
(30) days after such party has delivered notice of intent to terminate under
this Section 11.1. In any case, this Agreement shall expire at the close of
business on the Termination Date.

11.2 The Dealer Manager, upon the expiration or termination of this Agreement,
shall (i) promptly deposit any and all funds, if any, in its possession which
were received from investors for the sale of Offered Shares into the appropriate
account designated by the Corporation, (ii) promptly deliver to the Corporation
all records and documents in its possession which relate to the Offering and are
not designated as dealer copies, (iii) provide a list of all purchasers and
broker-dealers with whom the Dealer Manager has initiated oral or written
discussions regarding the Offering, and (iv) notify Selected Dealers of such
termination. The Dealer Manager, at its sole expense, may make and retain copies
of all such records and documents, but shall keep all such information
confidential. The Dealer Manager shall use its best efforts to cooperate with
the Corporation to accomplish an orderly transfer of management of the Offering
to a party designated by the Corporation.

11.3 Upon expiration or termination of this Agreement, the Corporation shall pay
to the Dealer Manager all compensation to which the Dealer Manager is or becomes
entitled under Section 4 at such time as such compensation becomes payable.

 

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  12. Confirmation.

The Corporation hereby agrees and assumes, or will arrange for a party
designated by it, to assume the duty to confirm, on its behalf and on behalf of
Selected Dealers, all orders for purchase of Offered Shares accepted by the
Corporation. Such confirmations will comply with the rules of the SEC and FINRA,
and will comply with applicable laws of such other jurisdictions to the extent
the Corporation is advised of such laws in writing by the Dealer Manager.

 

  13. Submission of Orders.

13.1 Each person desiring to purchase Offered Shares in the Offering will be
required to complete and execute a Subscription Agreement in the form attached
as an Appendix to the Prospectus and to deliver to the Selected Dealer or Dealer
Manager, as the case may be (the “Processing Broker-Dealer”), such completed
Subscription Agreement, together with a check, draft, wire or money order
(hereinafter referred to as a “Subscription Payment”) for the purchase price of
the Offered Shares, subject to any discount that may apply based upon the volume
of Offered Shares purchased pursuant to the schedule of discounts and procedures
specified in the Prospectus. There shall be a minimum initial purchase by any
one purchaser of $5,000 in Offered Shares (except as otherwise indicated in the
Prospectus, or in any letter or memorandum from the Corporation to the Dealer
Manager). Minimum subsequent purchases of Offered Shares shall be $500 per
transaction, except for purchases made pursuant to the distribution reinvestment
plan, as described in the Prospectus. Prior to the Corporation meeting the
Minimum Offering, persons who purchase Offered Shares shall make their checks
payable to “UMB Bank, N.A., as escrow agent for FS Investment Corporation III.”
Subsequent to the Corporation raising the Minimum Offering, persons who purchase
Offered Shares shall make their checks payable to “UMB Bank, N.A., as agent for
FS Investment Corporation III.”

After meeting the Minimum Offering described throughout the Prospectus, the
Corporation will sell the Offered Shares on a continuous basis at a price of
$10.00 per Offered Share, subject to any adjustment described or otherwise
provided in the “Plan of Distribution” section of the Prospectus. Each person
desiring to purchase Offered Shares in the Offering must submit subscriptions
for a certain dollar amount, rather than a number of Offered Shares and, as a
result, may receive fractional Offered Shares.

The Processing Broker-Dealer receiving a Subscription Agreement and Subscription
Payment not conforming to the foregoing instructions shall return such
Subscription Agreement and Subscription Payment directly to such subscriber not
later than the end of the second business day following receipt by the
Processing Broker-Dealer of such materials. Subscription Agreements and
Subscription Payments received by the Processing Broker-Dealer which conform to
the foregoing instructions shall be transmitted for deposit pursuant to one of
the methods described in this Section 13. Transmittal of received investor funds
will be made in accordance with the following procedures. The Dealer Manager may
authorize certain Selected

 

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Dealers that are “$250,000 broker-dealers” to instruct their customers to make
their checks for Offered Shares subscribed for payable directly to the Selected
Dealer. In such case, the Selected Dealer will collect the proceeds of the
subscribers’ checks and issue a check or wire transfer for the aggregate amount
of the subscription proceeds made payable (1) prior to the Corporation raising
the Minimum Offering, to “UMB Bank, N.A., as escrow agent for FS Investment
Corporation III” and (2) subsequent to the Corporation raising the Minimum
Offering, to “UMB Bank, N.A., as agent for FS Investment Corporation III.”

13.2 If the Processing Broker-Dealer conducts its internal supervisory review at
the same location at which Subscription Agreements and Subscription Payments are
received from subscribers, then, by noon of the next business day following
receipt by the Processing Broker-Dealer, the Processing Broker-Dealer will
transmit the Subscription Agreements and Subscription Payment for deposit to the
Escrow Agent, or after the Minimum Offering has been achieved, to the
Corporation or its designated agent.

13.3 If the Processing Broker-Dealer conducts its internal supervisory review at
a different location (the “Final Review Office”), Subscription Agreements and
Subscription Payments will be transmitted by the Processing Broker-Dealer to the
Final Review Office by noon of the next business day following receipt by the
Processing Broker-Dealer. The Final Review Office will in turn by noon of the
next business day following receipt by the Final Review Office, transmit such
Subscription Agreements and Subscription Payment for deposit to the Escrow
Agent, or after the Minimum Offering has been achieved, to the Corporation or
its designated agent.

Notwithstanding the foregoing, with respect to any Offered Shares to be
purchased by a custodial account, the Processing Broker-Dealer shall cause the
custodian of such account to deliver a completed Subscription Agreement and
Subscription Payment for such account directly for deposit to the Escrow Agent,
or after the Minimum Offering has been achieved, to the Corporation or its
designated agent. The Processing Broker-Dealer shall furnish to the Escrow
Agent, the Corporation or its designated agent, as applicable, with each
delivery of Subscription Payments a list of the subscribers showing the name,
address, tax identification number, state of residence, amount of Offered Shares
subscribed for and the amount of money paid.

 

  14. Suitability of Investors; Compliance with Privacy Laws

14.1 The Dealer Manager will offer Offered Shares, and in its agreements with
Selected Dealers will require that the Selected Dealers offer Offered Shares,
only to those persons who meet the suitability standards set forth in the
Prospectus or in any suitability letter or memorandum sent by the Corporation
and will only make offers to persons in the jurisdictions in which it is advised
in writing that the Offered Shares are qualified for sale or that such
qualification is not required. Notwithstanding the qualification of the Offered
Shares for sale in any respective jurisdiction (or the exemption therefrom), the
Dealer Manager represents, warrants and covenants that it will not offer Offered
Shares and will not permit any of its registered representatives to offer
Offered Shares in any jurisdiction unless both the Dealer Manager and such
registered representative are duly licensed to transact securities business in
such jurisdiction. In offering Offered Shares, the Dealer Manager will comply,
and in its agreements with Selected Dealers the Dealer Manager will require that
the Selected Dealers comply, with the provisions of the FINRA Rules, as well as
all other applicable rules and regulations relating to suitability of investors.

 

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The Dealer Manager further represents, warrants and covenants that neither the
Dealer Manager, nor any person associated with the Dealer Manager, shall offer
or sell Offered Shares in any jurisdiction except to investors who satisfy the
investor suitability standards and minimum investment requirements under the
most restrictive of the following: (a) applicable provisions described in the
Prospectus, including minimum income and net worth standards; (b) applicable
laws of the jurisdiction of which such investor is a resident; or (c) applicable
FINRA Rules. The Dealer Manager agrees to ensure that, in recommending the
purchase, sale or exchange of Offered Shares to an investor, the Dealer Manager,
or a person associated with the Dealer Manager, shall have reasonable grounds to
believe, on the basis of information obtained from the investor (and thereafter
maintained in the manner and for the period required by the SEC, any state
securities commission, FINRA or the Corporation) concerning his age, investment
objectives, other investments, financial situation and needs, and any other
information known to the Dealer Manager, or person associated with the Dealer
Manager, that (i) the investor can reasonably benefit from an investment in the
Offered Shares based on the investor’s overall investment objectives and
portfolio structure, (ii) the investor is able to bear the economic risk of the
investment based on the investor’s overall financial situation, and (iii) the
investor has an apparent understanding of (A) the fundamental risks of the
investment, (B) the risk that the investor may lose his entire investment in the
Offered Shares, (C) the lack of liquidity of the Offered Shares, (D) the
background and qualifications of the Adviser or the persons responsible for
directing and managing the Corporation, and (E) the tax consequences of an
investment in the Offered Shares. In the case of sales to fiduciary accounts,
the suitability standards must be met by the person who directly or indirectly
supplied the funds for the purchase of the Offered Shares or by the beneficiary
of such fiduciary account. The Dealer Manager further represents, warrants and
covenants that the Dealer Manager, or a person associated with the Dealer
Manager, will make every reasonable effort to determine the suitability and
appropriateness of an investment in Offered Shares of each proposed investor by
reviewing documents and records disclosing the basis upon which the
determination as to suitability was reached as to each purchaser of Offered
Shares pursuant to a subscription solicited by the Dealer Manager, whether such
documents and records relate to accounts which have been closed, accounts which
are currently maintained, or accounts hereafter established. The Dealer Manager
agrees to retain such documents and records in the Dealer Manager’s records for
a period of six years from the date of the applicable sale of Offered Shares and
to make such documents and records available to (i) the Corporation upon
request, and (ii) representatives of the SEC, FINRA and applicable state
securities administrators upon the Dealer Manager’s receipt of an appropriate
document subpoena or other appropriate request for documents from any such
agency. The Dealer Manager shall not purchase any Offered Shares for a
discretionary account without obtaining the prior written approval of the Dealer
Manager’s customer and his or her signature on a Subscription Agreement.

14.2 The Dealer Manager agrees, and in its agreements with Selected Dealers the
Dealer Manager will require that the Selected Dealers to agree, (a) to abide by
and comply with (i) the privacy standards and requirements of the
Gramm-Leach-Bliley Act of 1999 (“GLB Act”) and Regulation S-P, (ii) the privacy
standards and requirements of any other applicable Federal or state law, and
(iii) its own internal privacy policies and procedures, each as may be amended
from time to time; (b) to refrain from the use or disclosure of nonpublic
personal

 

20

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information (as defined under the GLB Act) of all customers who have opted out
of such disclosures except as necessary to service the customers or as otherwise
necessary or required by applicable law; and (c) to determine which customers
have opted out of the disclosure of nonpublic personal information by
periodically reviewing and, if necessary, retrieving a list of such customers
(the “List”) as provided by each to identify customers that have exercised their
opt-out rights.

In the event the Dealer Manager uses or discloses nonpublic personal information
of any customer for purposes other than servicing the customer, or as otherwise
required by applicable law, the Dealer Manager will consult the List to
determine whether the affected customer has exercised his or her opt-out rights.
The Dealer Manager understands that it is prohibited from using or disclosing
any nonpublic personal information of any customer that is identified on the
List as having opted out of such disclosures.

 

  15. Notices.

Any notice, approval, request, authorization, direction or other communication
under this Agreement shall be deemed given (a) when delivered personally, (b) on
the first business day after delivery to a national overnight courier service,
(c) upon receipt of confirmation if sent via facsimile, or (d) on the fifth
business day after deposited in the U.S. mail, properly addressed and stamped
with the required postage, registered or certified mail, return receipt
requested, in each case to the intended recipient at the address set forth
below:

 

If to the Corporation:    FS Investment Corporation III    Cira Centre    2929
Arch Street, Suite 675    Philadelphia, PA 19104-2867    Facsimile: (215)
495-1189    Attention: Michael C. Forman If to the Adviser:    FSIC III Advisor,
LLC    Cira Centre    2929 Arch Street, Suite 675    Philadelphia, PA 19104-2867
   Facsimile: (215) 495-1189    Attention: Michael C. Forman
If to the Dealer Manager:    FS2 Capital Partners, LLC    Cira Centre    2929
Arch Street, Suite 675    Philadelphia, PA 19104-2867    Facsimile: (215)
495-1189    Attention: President

 

21

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Any party may change its address specified above by giving the other party
notice of such change in accordance with this Section 15.

 

  16. No Partnership.

Nothing in this Agreement shall be construed or interpreted to constitute the
Dealer Manager as an employee, agent or representative of, or in association
with or in partnership with, the Corporation; instead, this Agreement shall only
constitute the Dealer Manager as a dealer authorized to sell the Offered Shares
according to the terms set forth in the registration statement and the
Prospectus as amended and supplemented and in this Agreement.

 

  17. Severability.

The invalidity or unenforceability of any provision of this Agreement shall not
affect the other provisions hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision was omitted.

[The remainder of the page is intentionally left blank.]

 

22

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If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between us as of
the date first above written.

 

Very truly yours, “CORPORATION” FS INVESTMENT CORPORATION III By:  

/s/ Gerald F. Stahlecker

  Name: Gerald F. Stahlecker   Title: Executive Vice President “ADVISER” FSIC
III ADVISOR, LLC By:  

/s/ Gerald F. Stahlecker

  Name: Gerald F. Stahlecker   Title: Executive Vice President

 

Accepted and agreed as of the date first above written: “DEALER MANAGER” FS2
CAPITAL PARTNERS, LLC By:  

/s/ Lance Murphy

  Name: Lance Murphy   Title: President

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EXHIBIT A TO DEALER MANAGER AGREEMENT

FORM OF SELECTED DEALER AGREEMENT

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FS INVESTMENT CORPORATION III

Up to 400,000,000 Shares of Common Stock, $0.001 par value per share

FORM OF SELECTED DEALER AGREEMENT

Dated: [                    ]

Ladies and Gentlemen:

Subject to the terms described hereinbelow, FS2 Capital Partners, LLC, as the
dealer manager (“Dealer Manager”) for FS Investment Corporation III, a Maryland
corporation (the “Corporation”), invites you, (“Selected Dealer”) to participate
in the distribution, on a “best efforts” basis, of up to 400,000,000 shares of
common stock of the Corporation, $0.001 par value per share, to be issued and
sold to the public on a “best efforts” basis (the “Offered Shares”) at an
initial offering price of $10.00 per share (subject in certain circumstances to
discounts based upon the volume of shares purchased) as set forth in the
registration statement on Form N-2 filed by the Corporation (File
No. 333-191925), which includes the Corporation’s prospectus, as amended or
supplemented (the “Prospectus”).

 

  I. Dealer Manager Agreement

FSIC III Advisor, LLC, a Delaware limited liability company, is the investment
adviser of the Corporation (the “Adviser”). The Dealer Manager has entered into
a dealer manager agreement with the Corporation and the Adviser dated
[            ], 2013, in the form attached hereto as Exhibit A (the “Dealer
Manager Agreement”). Upon effectiveness of this Selected Dealer Agreement (this
“Agreement”) pursuant to Section XIV below, you will become one of the Selected
Dealers referred to in the Dealer Manager Agreement and will be entitled and
subject to the representations, warranties and covenants contained in the Dealer
Manager Agreement relating to the rights and obligations of a Selected Dealer,
including, but not limited, to the provisions of Sections 2.5 and 4.3 regarding
suspension of offers and sales of Offered Shares, Section 4.1 regarding
solicitation of subscriptions of Offered Shares, Section 4.2 regarding
regulatory compliance, Section 5, wherein each of the Selected Dealers severally
agrees to indemnify and hold harmless the Corporation, the Adviser, the Dealer
Manager and their respective officers, directors, employees, members, partners,
agents and representatives, and each person, if any, who controls such entity
within the meaning of Section 15 of the Securities Act of 1933, as amended (the
“Securities Act”), or Section 20 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), Section 13 regarding submission of subscriptions
for Offered Shares, and Section 14 regarding suitability of investors and
compliance procedures for offers and sales of Offered Shares. Except as
otherwise set forth herein, capitalized terms used and not otherwise defined
herein shall have the meanings given to them in the Dealer Manager Agreement.
The Offered Shares are offered solely through broker-dealers who are members in
good standing of the Financial Industry Regulatory Authority, Inc. (“FINRA”).

Selected Dealer hereby agrees to use its best efforts to sell the Offered Shares
for cash on the terms and conditions stated in the Prospectus. Nothing in this
Agreement shall be deemed or construed to make Selected Dealer an employee,
agent, representative, or partner of the Dealer

--------------------------------------------------------------------------------

Manager, the Corporation or the Adviser, and Selected Dealer is not authorized
to act for the Dealer Manager, the Corporation or the Adviser or to make any
representations on their behalf except as set forth in the Prospectus and any
printed sales literature or other materials prepared by the Corporation, the
Adviser or the Dealer Manager, provided that the use of said sales literature
and other materials has been approved for use by the Corporation in writing and
all appropriate regulatory agencies (the “Authorized Sales Materials”). In the
event that the Corporation uses printed materials in connection with the
Offering prepared by the Corporation, the Adviser or the Dealer Manager intended
for “broker-dealer use only,” Selected Dealer shall use such “broker-dealer use
only” materials in accordance with Section VII below.

 

  II. Submission of Orders

Each person desiring to purchase Offered Shares in the Offering will be required
to complete and execute a Subscription Agreement in the form attached as an
Appendix to the Prospectus and to deliver to Selected Dealer or Dealer Manager,
as the case may be (the “Processing Broker-Dealer”), such completed Subscription
Agreement, together with a check, draft, wire or money order (hereinafter
referred to as a “Subscription Payment”) for the purchase price of the Offered
Shares, subject to any discount that may apply based upon the volume of Offered
Shares purchased pursuant to the schedule of discounts and procedures specified
in the Prospectus. There shall be a minimum initial purchase by any one
purchaser of $5,000 in Offered Shares (except as otherwise indicated in the
Prospectus, or in any letter or memorandum from the Corporation to the Dealer
Manager). Minimum subsequent purchases of Offered Shares shall be $500 per
transaction, except for purchases made pursuant to the distribution reinvestment
plan, as described in the Prospectus. Prior to the Corporation raising gross
offering proceeds of $2,500,000 from persons not affiliated with the Corporation
or the Adviser (the “Minimum Offering”), persons who purchase Offered Shares
shall make their checks payable to “UMB Bank, N.A., as escrow agent for FS
Investment Corporation III.” Subsequent to the Corporation raising the Minimum
Offering, persons who purchase Offered Shares shall make their checks payable to
“UMB Bank, N.A., as agent for FS Investment Corporation III.” Each person
desiring to purchase Offered Shares in the Offering must submit subscriptions
for a certain dollar amount, rather than a number of Offered Shares and, as a
result, may receive fractional Offered Shares.

The Processing Broker-Dealer receiving a Subscription Agreement and Subscription
Payment not conforming to the foregoing instructions shall return such
Subscription Agreement and Subscription Payment directly to such subscriber not
later than the end of the second business day following receipt by the
Processing Broker-Dealer of such materials. Subscription Agreements and
Subscription Payments received by the Processing Broker-Dealer which conform to
the foregoing instructions shall be transmitted for deposit pursuant to one of
the methods described in this Section II. If Selected Dealer is a “$250,000
broker-dealer,” the Dealer Manager may authorize Selected Dealer to instruct its
customers to make its check for Offered Shares subscribed for payable directly
to Selected Dealer, in which case Selected Dealer will collect the proceeds of
the subscriber’s check and issue a check for the aggregate amount of the
subscription proceeds made payable to the order of “UMB Bank, N.A., as agent for
FS Investment Corporation III.” Selected Dealer hereby agrees to be bound by the
terms of the Escrow Agreement, dated [            ], 2013 (the “Escrow
Agreement”), by and among UMB Bank, N.A. (the “Escrow Agent”) and the
Corporation.

 

2

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(a) If the Processing Broker-Dealer conducts its internal supervisory review at
the same location at which Subscription Agreements and Subscription Payments are
received from subscribers, then, by noon of the next business day following
receipt by the Processing Broker-Dealer, the Processing Broker-Dealer will
transmit the Subscription Agreements and Subscription Payment for deposit to the
Escrow Agent, or after the Minimum Offering has been achieved, to the
Corporation or its designated agent.

(b) If the Processing Broker-Dealer conducts its internal supervisory review at
a different location (the “Final Review Office”), Subscription Agreements and
Subscription Payments will be transmitted by the Processing Broker-Dealer to the
Final Review Office by noon of the next business day following receipt by the
Processing Broker-Dealer. The Final Review Office will in turn by noon of the
next business day following receipt by the Final Review Office, transmit such
Subscription Agreements and Subscription Payment for deposit to the Escrow
Agent, or after the Minimum Offering has been achieved, to the Corporation or
its designated agent.

Selected Dealer understands that the Corporation reserves the unconditional
right to reject any order, in whole or in part, for any or no reason.

Notwithstanding the foregoing, with respect to any Offered Shares to be
purchased by a custodial account, the Processing Broker-Dealer shall cause the
custodian of such account to deliver a completed Subscription Agreement and
Subscription Payment for such account directly to the Transfer Agent. The
Processing Broker-Dealer shall furnish with each delivery of Subscription
Payments a list of the subscribers showing the name, address, tax identification
number, state of residence, amount of Offered Shares subscribed for, and the
amount of money paid.

 

  III. Pricing

Except for volume discounts described in or as otherwise provided in the “Plan
of Distribution” section of the Prospectus, the Offered Shares shall be offered
to the public at an initial offering price of $10.00 per Offered Share payable
in cash. Except as otherwise indicated in the Prospectus or in any letter or
memorandum sent to Selected Dealer by the Corporation or Dealer Manager, a
minimum initial purchase of $5,000 in Offered Shares is required. Minimum
subsequent purchases of Offered Shares shall be $500 per transaction. After
meeting the Minimum Offering, the Corporation will sell the Offered Shares on a
continuous basis at a price of $10.00 per Offered Share, subject to the
adjustments described in or otherwise provided in the “Plan of Distribution”
section of the Prospectus. Each person desiring to purchase Offered Shares in
the Offering must submit subscriptions for a certain dollar amount, rather than
a number of Offered Shares and, as a result, may receive fractional Offered
Shares.

The Offered Shares are nonassessable. Selected Dealer hereby agrees to place any
order for the full purchase price except as otherwise provided in the Prospectus
for volume discounts based upon the number of Offered Shares purchased by a
subscriber through Selected Dealer.

 

3

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  IV. Selected Dealer’s Compensation

Subject to volume discounts and other special circumstances described in or as
otherwise provided in the “The Plan of Distribution” section of the Prospectus,
Selected Dealer’s selling commission applicable to the total public offering
price of Offered Shares sold by Selected Dealer which it is authorized to sell
hereunder is 7.0% of the gross proceeds of Offered Shares sold by it and
accepted and confirmed by the Corporation, which commission will be paid by the
Dealer Manager. For these purposes, a “sale of Offered Shares” shall occur
following the release from escrow the Offering proceeds received in connection
with the sale of the minimum number of Offered Shares as set forth on the cover
page of the Prospectus, and, if and only if, a transaction has closed with a
securities purchaser pursuant to all applicable offering and subscription
documents and the Corporation has thereafter distributed the commission to the
Dealer Manager in connection with such transaction. Selected Dealer hereby
waives any and all rights to receive payment of commissions due until such time
as the Dealer Manager is in receipt of the commission from the Corporation.
Selected Dealer affirms that the Dealer Manager’s liability for commissions
payable is limited solely to the proceeds of commissions receivable associated
therewith. In addition, as set forth in the Prospectus, the Dealer Manager, in
its sole discretion, may reallow a portion of the Dealer Manager Fee to Selected
Dealer as marketing fees or to defray other distribution-related expenses, which
reallowance, if any, shall be determined by the Dealer Manager in its sole
discretion based on factors including, but not limited to, the number of shares
sold by Selected Dealer, the assistance of Selected Dealer in marketing the
offering and due diligence expenses incurred, and the extent to which similar
fees are reallowed to selected broker-dealers in similar offerings being
conducted during the Offering. Such reallowance shall be described in Schedule 1
to this Agreement.

Selected Dealer acknowledges and agrees that no commissions, payments or amount
whatsoever will be paid to Selected Dealer in respect of the purchase of Offered
Shares by a Selected Dealer (or its registered representative), in its
individual capacity, or by a retirement plan of such Selected Dealer (or its
registered representative), or by an officer, director or employee of the
Corporation, the Adviser or their respective affiliates.

The parties hereby agree that the foregoing commission is not in excess of the
usual and customary distributors’ or sellers’ commission received in the sale of
securities similar to the Offered Shares, that Selected Dealer’s interest in the
offering is limited to such commission from the Dealer Manager and Selected
Dealer’s indemnity referred to in Section 5 of the Dealer Manager Agreement, and
that the Corporation is not liable or responsible for the direct payment of such
commission to Selected Dealer. In addition, as set forth in the Prospectus, the
Dealer Manager may reimburse Selected Dealers up to 0.5% of gross proceeds for
the Offered Shares for bona fide accountable due diligence expenses incurred by
such Selected Dealers. Selected Dealer shall provide a detailed and itemized
invoice for any such due diligence expenses.

 

  V. Payment

Payments of selling commissions will be made by the Dealer Manager (or by the
Corporation as the agent of the Dealer Manager, as provided in the Dealer
Manager Agreement) to Selected Dealer within 30 days of the receipt by the
Dealer Manager of the gross commission payments from the Corporation.

 

4

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Selected Dealer, in its sole discretion, may authorize Dealer Manager (or the
Corporation as the agent of the Dealer Manager, as provided in the Dealer
Manager Agreement) to deposit selling commissions, reallowances and other
payments due to it pursuant to this Agreement directly to its bank account. If
Selected Dealer so elects, Selected Dealer shall provide such deposit
authorization and instructions in Schedule 2 to this Agreement.

 

  VI. Right to Reject Orders or Cancel Sales

All orders, whether initial or additional, are subject to acceptance by and
shall only become effective upon confirmation by the Corporation, which reserves
the right to reject any order, in whole or in part, for any or no reason. Orders
not accompanied by a Subscription Agreement and executed signature page thereto
and the required Subscription Payment for the Offered Shares may be rejected.
Issuance and delivery of the Offered Shares will be made only after actual
receipt of payment therefor. If any Subscription Payment is not paid upon
presentment, or if the Corporation is not in actual receipt of clearinghouse
funds or cash, certified or cashier’s check or the equivalent in payment for the
Offered Shares within 15 days of sale, the Corporation reserves the right to
cancel the sale without notice. In the event an order is rejected, canceled or
rescinded for any reason, Selected Dealer agrees to return to the Dealer Manager
within 30 days thereafter any commission or Dealer Manager Fee theretofore paid
with respect to such order, and, if Selected Dealer fails to so return any such
commission or Dealer Manager, the Dealer Manager shall have the right to offset
amounts owed against future commissions or Dealer Manager Fees due and otherwise
payable to Selected Dealer.

 

  VII. Prospectus and Authorized Sales Materials

Selected Dealer is not authorized or permitted to give, and will not give, any
information or make any representation (written or oral) concerning the Offered
Shares except as set forth in the Prospectus and the Authorized Sales Materials.
The Dealer Manager will supply Selected Dealer with reasonable quantities of the
Prospectus, any supplements thereto and any amended Prospectus, as well as any
Authorized Sales Materials, for delivery to investors, and Selected Dealer will
deliver a copy of the Prospectus and all supplements thereto and any amended
Prospectus to each investor to whom an offer is made prior to or simultaneously
with the first solicitation of an offer to sell the Offered Shares to an
investor. Selected Dealer agrees that it will not send or give any supplements
to the Prospectus, any amended Prospectus or any Authorized Sales Materials to
that investor unless it has previously sent or given a Prospectus and all
supplements thereto and any amended Prospectus to that investor or has
simultaneously sent or given a Prospectus and all supplements thereto and any
amended Prospectus with such Prospectus supplement, amended Prospectus or
Authorized Sales Materials. Selected Dealer agrees that it will not show or give
to any investor or prospective investor or reproduce any material or writing
which is supplied to it by the Dealer Manager and marked “broker-dealer use
only” or otherwise bearing a legend denoting that it is not to be used in
connection with the offer or sale of Offered Shares to members of the public.
Selected Dealer agrees that it will not use in connection with the offer or sale
of Offered Shares any materials or writings which have not been previously
approved by the Corporation in writing other than the Prospectus and the
Authorized Sales Materials. Selected Dealer agrees to furnish a copy of any
revised preliminary Prospectus to each person to whom it has furnished a copy of
any previous preliminary Prospectus, and further agrees that it will itself mail
or otherwise deliver all preliminary and final

 

5

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Prospectuses required for compliance with the provisions of Rule 15c2-8 under
the Exchange Act. Regardless of the termination of this Agreement, Selected
Dealer will deliver a Prospectus in transactions in the Offered Shares for a
period of 90 days from the Effective Date of the Registration Statement or such
longer period as may be required by the Exchange Act. Selected Dealer agrees to
comply with all the applicable requirements under the Securities Act, the
Exchange Act (including, to the extent applicable, with respect to the custody
of funds and securities), conduct rules of FINRA or its predecessor, the
National Association of Securities Dealers, Inc., and any other foreign, state
or local securities or other laws or rules of FINRA or any other applicable
self-regulatory agency in offering and selling Offered Shares.

 

  VIII. License and Association Membership

Selected Dealer’s acceptance of this Agreement constitutes a representation to
the Corporation and the Dealer Manager that Selected Dealer is a properly
registered or licensed broker-dealer, duly authorized to sell Offered Shares
under federal and state securities laws and regulations in all states where it
offers or sells Offered Shares, and that it is a member in good standing of
FINRA. Selected Dealer represents and warrants that it is currently licensed as
a broker-dealer in the jurisdictions identified on Schedule 3 to this Agreement.
This Agreement shall automatically terminate if Selected Dealer ceases to be a
member in good standing of FINRA or with the securities commission of the state
in which Selected Dealer’s principal office is located. Selected Dealer agrees
to notify the Dealer Manager immediately if Selected Dealer ceases to be a
member in good standing of FINRA or with the securities commission of any state
in which Selected Dealer is currently registered or licensed, or in the case of
a foreign dealer, so to conform. Selected Dealer also hereby agrees to abide by
the conduct rules set forth in the FINRA rulebook (“FINRA Rules), including,
without limitation, FINRA Rules 2340 and 5141 and NASD Rule 2420.

 

  IX. Anti-Money Laundering Compliance Programs

Selected Dealer’s acceptance of this Dealer Agreement constitutes a
representation to the Corporation and the Dealer Manager that Selected Dealer
has established and implemented an anti-money laundering compliance program
(“AML Program”) in accordance with applicable law, including applicable FINRA
Rules, Securities and Exchange Commission Rules (the “Commission Rules”) and the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001, as amended by
the USA Patriot Improvement and Reauthorization Act of 2005 (the “USA PATRIOT
Act”), specifically including, but not limited to, Section 352 of the
International Money Laundering Abatement and Anti-Terrorist Financing Act of
2001 (the “Money Laundering Abatement Act,” and together with the USA PATRIOT
Act, the “AML Rules”), reasonably expected to detect and cause the reporting of
suspicious transactions in connection with the sale of Offered Shares. In
addition, Selected Dealer represents that it has established and implemented a
program for compliance with Executive Order 13224 and all regulations and
programs administered by the U.S. Department of the Treasury’s Office of Foreign
Assets Control (“OFAC Program”) and will continue to maintain its OFAC Program
during the term of this Agreement. Upon request by the Dealer Manager at any
time, Selected Dealer hereby agrees to (i) furnish a written copy of its AML
Program and OFAC Program to the Dealer Manager for review, and (ii) furnish a
copy of the findings and any remedial actions taken in connection with Selected
Dealer’s most recent independent testing of its AML Program and/or its OFAC
Program.

 

6

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The parties acknowledge that for the purposes of FINRA Rules, the investors who
purchase Offered Shares through Selected Dealer are “customers” of Selected
Dealer and not the Dealer Manager. Nonetheless, to the extent that the Dealer
Manager deems it prudent, Selected Dealer shall cooperate with the Dealer
Manager’s reasonable requests for information, records and data related to the
Corporation’s stockholders introduced to, and serviced by, Selected Dealer (the
“Customers”). Notwithstanding the foregoing, Selected Dealer shall not be
required to provide to the Dealer Manager any documentation that, in Selected
Dealer’s reasonable judgment, would cause Selected Dealer to lose the benefit of
attorney-client privilege or other privilege which it may be entitled to assert
relating to the discoverability of documents in any civil or criminal
proceedings. Selected Dealer hereby represents that it is currently in
compliance with all AML Rules and all OFAC requirements, specifically including,
but not limited to, the Customer Identification Program requirements under
Section 326 of the USA PATRIOT Act. Selected Dealer hereby agrees, upon request
by the Dealer Manager to (A) provide an annual certification to Dealer Manager
that, as of the date of such certification (i) its AML Program and its OFAC
Program are consistent with the AML Rules and OFAC requirements; (ii) it has
continued to implement its AML Program and its OFAC Program, and (iii) it is
currently in compliance with all AML Rules and OFAC requirements, specifically
including, but not limited to, the Customer Identification Program requirements
under Section 326 of the USA PATRIOT Act; and (B) perform and carry out, on
behalf of both the Dealer Manager and the Corporation, the Customer
Identification Program requirements in accordance with Section 326 of the USA
PATRIOT Act and applicable SEC and Treasury Department Rules thereunder.

 

  X. Limitation of Offer; Suitability

Selected Dealer will offer Offered Shares only to persons who meet the
suitability standards set forth in the Prospectus or in any suitability letter
or memorandum sent to it by the Corporation or the Dealer Manager and will only
make offers to persons in the jurisdictions in which it is advised in writing
that the Offered Shares are qualified for sale or that such qualification is not
required. Notwithstanding the qualification of the Offered Shares for sale in
any respective jurisdiction (or the exemption therefrom), Selected Dealer
represents, warrants and covenants that it will not offer Offered Shares and
will not permit any of its registered representatives to offer Offered Shares in
any jurisdiction unless both Selected Dealer and such registered representative
are duly licensed to transact securities business in such jurisdiction. In
offering Offered Shares, Selected Dealer will comply with the provisions of
FINRA Rules, as well as all other applicable rules and regulations relating to
suitability of investors.

Selected Dealer further represents, warrants and covenants that neither Selected
Dealer, nor any person associated with Selected Dealer, shall offer or sell
Offered Shares in any jurisdiction except to investors who satisfy the investor
suitability standards and minimum investment requirements under the most
restrictive of the following: (a) applicable provisions described in the
Prospectus, including minimum income and net worth standards; (b) applicable
laws of the jurisdiction of which such investor is a resident; or (c) applicable
FINRA Rules. Selected Dealer agrees to ensure that, in recommending the
purchase, sale or exchange of

 

7

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Offered Shares to an investor, Selected Dealer, or a person associated with
Selected Dealer, shall have reasonable grounds to believe, on the basis of
information obtained from the investor (and thereafter maintained in the manner
and for the period required by the Commission, any state securities commission,
FINRA or the Corporation) concerning his age, investment objectives, other
investments, financial situation and needs, and any other information known to
Selected Dealer, or person associated with Selected Dealer, that (i) the
investor can reasonably benefit from an investment in the Offered Shares based
on the investor’s overall investment objectives and portfolio structure,
(ii) the investor is able to bear the economic risk of the investment based on
the investor’s overall financial situation, and (iii) the investor has an
apparent understanding of (A) the fundamental risks of the investment, (B) the
risk that the investor may lose his entire investment in the Offered Shares,
(C) the lack of liquidity of the Offered Shares, (D) the background and
qualifications of the Adviser or the persons responsible for directing and
managing the Corporation, and (E) the tax consequences of an investment in the
Offered Shares. In the case of sales to fiduciary accounts, the suitability
standards must be met by the person who directly or indirectly supplied the
funds for the purchase of the Offered Shares or by the beneficiary of such
fiduciary account. Selected Dealer further represents, warrants and covenants
that Selected Dealer, or a person associated with Selected Dealer, will make
every reasonable effort to determine the suitability and appropriateness of an
investment in Offered Shares of each proposed investor by reviewing documents
and records disclosing the basis upon which the determination as to suitability
was reached as to each purchaser of Offered Shares pursuant to a subscription
solicited by Selected Dealer, whether such documents and records relate to
accounts which have been closed, accounts which are currently maintained, or
accounts hereafter established. Selected Dealer agrees to retain such documents
and records in Selected Dealer’s records for a period of six years from the date
of the applicable sale of Offered Shares, to otherwise comply with the record
keeping requirements provided in Section XII below and to make such documents
and records available to (i) the Dealer Manager and the Corporation upon
request, and (ii) representatives of the Commission, FINRA and applicable state
securities administrators upon Selected Dealer’s receipt of an appropriate
document subpoena or other appropriate request for documents from any such
agency. Selected Dealer shall not purchase any Offered Shares for a
discretionary account without obtaining the prior written approval of Selected
Dealer’s customer and his or her signature on a Subscription Agreement.

 

  XI. Due Diligence; Adequate Disclosure

Prior to offering the Offered Shares for sale, Selected Dealer shall have
conducted an inquiry (the “Diligence Review”) such that Selected Dealer has
reasonable grounds to believe, based on information made available to Selected
Dealer by the Corporation or the Dealer Manager through the Prospectus or other
materials, that all material facts are adequately and accurately disclosed and
provide a basis for evaluating a purchase of Offered Shares. In determining the
adequacy of disclosed facts pursuant to the foregoing, Selected Dealer may
obtain, upon request, information on material facts relating at a minimum to the
following: (i) items of compensation; (ii) tax aspects; (iii) financial
stability and experience of the Corporation and its Adviser; (iv) conflicts and
risk factors; and (v) other pertinent reports. Notwithstanding the foregoing,
Selected Dealer may rely upon the results of an inquiry conducted by an
independent third party retained for that purpose or another Selected Dealer,
provided that: (i) such Selected Dealer has reasonable grounds to believe that
such inquiry was conducted with due care by said independent third party or such
other Selected Dealer; (ii) the results of the inquiry

 

8

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were provided to Selected Dealer with the consent of the other Selected Dealer
conducting or directing the inquiry; and (iii) no Selected Dealer that
participated in the inquiry is an affiliate of the Corporation or its Adviser.
Prior to the sale of the Offered Shares, Selected Dealer shall inform each
prospective purchaser of Offered Shares of pertinent facts relating to the
Offered Shares including specifically the lack of liquidity and lack of
marketability of the Offered Shares during the term of the investment but shall
not, in any event, make any representation on behalf of the Corporation or the
Adviser except as set forth in the Prospectus and any Authorized Sales
Materials.

 

  XII. Compliance with Record Keeping Requirements

Selected Dealer agrees to comply with the record keeping requirements of the
Exchange Act, including but not limited to, Rules 17a-3 and 17a-4 promulgated
under the Exchange Act. Selected Dealer further agrees to keep such records with
respect to each customer who purchases Offered Shares, his suitability and the
amount of Offered Shares sold, and to retain such records for such period of
time as may be required by the Commission, any state securities commission,
FINRA or the Corporation.

 

  XIII. Customer Complaints

Each party hereby agrees to provide to the other party copies of any written or
otherwise documented customer complaints received by such party relating in any
way to the Offering (including, but not limited to, the manner in which the
Offered Shares are offered by the Dealer Manager or Selected Dealer), the
Offered Shares or the Corporation.

 

  XIV. Effective Date

This Agreement will become effective upon the last date it is signed by either
party hereto. Upon effectiveness of this Agreement, all offers and sales of
Offered Shares by Selected Dealer will be made pursuant to this Agreement
exclusively and not through any prior agreement between Selected Dealer and the
Dealer Manager, if any.

 

  XV. Termination; Survival; Amendment

Selected Dealer will immediately suspend or terminate its offer and sale of
Offered Shares upon the request of the Corporation or the Dealer Manager at any
time and will resume its offer and sale of Offered Shares hereunder upon
subsequent request of the Corporation or the Dealer Manager. Any party may
terminate this Agreement by written notice, which termination shall be effective
48 hours after such notice is given. This Agreement and the exhibits and
schedules hereto are the entire agreement of the parties and supersedes all
prior agreements, if any, between the parties hereto.

This Agreement may be amended at any time by the Dealer Manager by written
notice to Selected Dealer, and any such amendment shall be deemed accepted by
Selected Dealer upon placing an order for sale of Offered Shares after it has
received such notice.

The respective agreements and obligations of Selected Dealer and the Dealer
Manager set forth in Articles I, IV, V, VII, X, XII, XIII, XIV, XV, XVI, XVII,
XVIII, XIX, XX, XXI, XXIII and XXIV of this Agreement and Section 5 of the
Dealer Manager Agreement shall remain operative and in full force and effect
regardless of the termination of this Agreement.

 

9

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Notwithstanding the termination of this Agreement or the payment of any amount
to Selected Dealer, Selected Dealer agrees to pay Selected Dealer’s
proportionate share of any claim, demand or liability asserted against Selected
Dealer and the other Selected Dealers on the basis that the Selected Dealers or
any of them constitute an association, unincorporated business or other separate
entity, including in each case Selected Dealer’s proportionate share of any
expenses incurred in defending against any such claim, demand or liability.

 

  XVI. Privacy Laws

The Dealer Manager and Selected Dealer (each referred to individually in this
section as a “party”) agree as follows:

(a) Each party agrees to abide by and comply with (i) the privacy standards and
requirements of the Gramm-Leach-Bliley Act of 1999 (“GLB Act”) and Regulation
S-P; (ii) the privacy standards and requirements of any other applicable Federal
or state law; and (iii) its own internal privacy policies and procedures, each
as may be amended from time to time;

(b) Each party agrees to refrain from the use or disclosure of nonpublic
personal information (as defined under the GLB Act) of all customers who have
opted out of such disclosures except as necessary to service the customers or as
otherwise necessary or required by applicable law; and

(c) Each party shall be responsible for determining which customers have opted
out of the disclosure of nonpublic personal information by periodically
reviewing and, if necessary, retrieving a list of such customers (the “List”) as
provided by each to identify customers that have exercised their opt-out rights.
In the event either party uses or discloses nonpublic personal information of
any customer for purposes other than servicing the customer, or as otherwise
required by applicable law, that party will consult the List to determine
whether the affected customer has exercised his or her opt-out rights. Each
party understands that each is prohibited from using or disclosing any nonpublic
personal information of any customer that is identified on the List as having
opted out of such disclosures.

 

  XVII. Notice

All notices will be in writing and will be duly given to the Dealer Manager when
mailed to FS2 Capital Partners, LLC, Cira Centre, 2929 Arch Street, Suite 675,
Philadelphia, PA 19104-2867, and to Selected Dealer when mailed to the address
specified by Selected Dealer below.

 

  XVIII. Attorneys’ Fees; Applicable Law and Venue

This Agreement and any claim, counterclaim or dispute of any kind or nature
whatsoever arising out of or in any way relating to this Agreement, directly or
indirectly, shall be governed by the laws of the State of Delaware applicable to
contracts formed and to be formed entirely within the State of Delaware, without
regard to the conflicts of laws principles and rules thereof, to the extent such
principles would require or permit the application of the laws of another
jurisdiction; provided, however, that the governing law for causes of action for
violations of federal or state securities law shall be governed by the
applicable federal or state securities law.

 

10

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  XIX. Successors and Assigns

Selected Dealer shall not assign this Agreement or any right, interest or
benefit under this Agreement without the prior written consent of the Dealer
Manager. This Agreement shall be binding upon the Dealer Manager and Selected
Dealer and their respective successors and permitted assigns.

 

  XX. Arbitration

In the event of a dispute concerning any provision of this Agreement (including
any provisions of the Dealer Manager Agreement incorporated into this
Agreement), either party may require the dispute to be submitted to binding
arbitration, conducted on a confidential basis, under the then-current
commercial arbitration rules of FINRA or the American Arbitration Association
(at the discretion of the party requesting arbitration) in accordance with the
terms of this Agreement (including the governing law provisions of this section)
and pursuant to the Federal Arbitration Act (9 U.S.C. §§ 1 – 16). The parties
will request that the arbitrator or arbitration panel (“Arbitrator”) issue
written findings of fact and conclusions of law. The Arbitrator shall not be
empowered to make any award or render any judgment for punitive damages, and the
Arbitrator shall be required to follow applicable law in construing this
Agreement, making awards, and rendering judgments. The decision of the
arbitration panel shall be final and binding, and judgment upon any arbitration
award may be entered by any court having jurisdiction. All arbitration hearings
will be held at the Philadelphia FINRA District Office or at another mutually
agreed upon site. The parties may agree on a single arbitrator, or, if the
parties cannot so agree, each party will have the right to choose one
arbitrator, and the selected arbitrators will choose a third arbitrator. Each
arbitrator must have experience and education that qualify him or her to
competently address the specific issues to be designated for arbitration.
Notwithstanding the preceding, no party will be prevented from immediately
seeking provisional remedies in courts of competent jurisdiction, including but
not limited to, temporary restraining orders and preliminary injunctions, but
such remedies will not be sought as a means to avoid or stay arbitration. Except
as provided otherwise in Section 5 of the Dealer Manager Agreement, in any
action or arbitration to enforce the provisions of this Agreement or to secure
damages for its breach, the prevailing party shall recover its costs and
reasonable attorney’s fees. Each party to this Agreement hereby waives a trial
by jury in any legal action or proceeding relating to this Agreement.

 

  XXI. Severability

The invalidity or unenforceability of any provision of this Agreement shall not
affect the other provisions hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision was omitted.

 

  XXII. Counterparts

This Agreement may be executed in any number of counterparts. Each counterpart,
when executed and delivered, shall be an original contract, but all
counterparts, when taken together,

 

11

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shall constitute one and the same agreement. This Agreement will become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, which delivery may be made by exchange of
copies of the signature page by facsimile transmission.

 

  XXIII. No Partnership

Nothing in this Agreement shall be construed or interpreted to constitute
Selected Dealer as an employee, agent or representative of, or in association
with or in partnership with, the Dealer Manager, the Corporation or the other
Selected Dealers; instead, this Agreement shall only constitute Selected Dealer
as a dealer authorized by the Dealer Manager to sell the Offered Shares
according to the terms set forth in the registration statement and the
Prospectus as amended and supplemented and in this Agreement.

 

  XXIV. Confidentiality

Dealer Manager, the Corporation, Franklin Square Holdings, L.P. (“FSH”) or one
of their affiliates or employees, agents or advisers (“Representatives”) (all
such entities and persons, collectively, the “FS Entities”) may have provided
and will furnish to Selected Dealer or its affiliates or Representatives with
certain information that is either non-public, confidential or proprietary in
nature in order to enable Selected Dealer to perform a diligence review. This
information furnished to Selected Dealer or its affiliates or Representatives,
including the terms and conditions of any agreements entered into between
Selected Dealer or its affiliates and any FS Entity, together with analyses,
compilations, forecasts, studies or other documents prepared by Selected Dealer
or its affiliates or Representatives which contain or otherwise reflect such
information is hereinafter referred to as the “Information.” The term
Information shall not include such portions of the Information which (i) are or
become generally available to the public other than as a result of a disclosure
by Selected Dealer or its affiliates or Representatives in violation of this
Agreement, or (ii) become available to Selected Dealer on a non-confidential
basis from a source other than an FS Entity that has a bona fide right to do so
and which is not subject to any obligation to keep such information
confidential. In consideration of the FS Entities furnishing Selected Dealer or
its affiliates or Representatives with the Information, Selected Dealer agrees
that:

(a) The Information will be kept confidential and shall not, without FSH’s prior
written consent, be disseminated or disclosed by Selected Dealer or its
affiliates or Representatives, in any manner whatsoever, in whole or in part,
and shall not be used by Selected Dealer or its affiliates or Representatives,
other than in connection with performing the diligence review contemplated by
Section XI of this Agreement. Moreover, Selected Dealer agrees to reveal the
Information only to such of its affiliates or Representatives who need to know
the Information for the purpose of performing the diligence review contemplated
by Section XI of this Agreement, who are informed by Selected Dealer of the
confidential nature of the Information and who agree to act in accordance with
the terms and conditions of this Section XXIV.

(b) All copies of the Information will be returned to FSH or destroyed upon
FSH’s request.

 

12

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(c) In the event that Selected Dealer or any of its affiliates or
Representatives are requested or required (by oral questions, depositions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or other process) to disclose any of the Information,
Selected Dealer will provide FSH with prompt written notice so that any of the
FS Entities may seek a protective order, other appropriate remedy or waive
compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained, or that FSH waives compliance
with the provisions of this Agreement, Selected Dealer shall disclose such
Information without liability hereunder; provided, however, that Selected Dealer
will furnish only that portion of the Information which, in the opinion of its
counsel, Selected Dealer is compelled to disclose and will not oppose any action
by FSH to obtain reliable assurance that confidential treatment will be accorded
the Information. Selected Dealer further agrees to exercise its reasonable
efforts to otherwise preserve the confidentiality of the Information. Upon
reasonable notice, Selected Dealer further agrees to cooperate with the FS
Entities in obtaining a protective order or other appropriate remedy.

(d) In no event shall any of the FS Entities be liable for any losses, damages,
claims or expenses incurred or actions undertaken by Selected Dealer or its
affiliates or Representatives as a result of their receipt of the Information or
their use thereof. Selected Dealer agrees that the Information is and shall
remain the property of FSH and that none of the FS Entities has granted Selected
Dealer or its affiliates or Representatives any license, copyright, or similar
right with respect to any of the Information.

(e) Selected Dealer hereby acknowledges that Selected Dealer is aware, and that
Selected Dealer will advise its affiliates or Representatives who have been
provided with Information, that the United States securities laws prohibit any
person who has received from an issuer material, non-public information from
purchasing or selling securities of such issuer or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.
Selected Dealer further acknowledges that some or all of the Information is or
may be price-sensitive information and that the use of such Information may be
regulated or prohibited by applicable legislation relating to insider dealing
and Selected Dealer undertakes, on behalf of itself and its Representatives, not
to use any Information for any unlawful purpose.

(f) FSH has the right to enforce this Section XXIV as a third-party beneficiary.

[Signatures Appear on Following Pages]

 

13

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on its behalf by its duly authorized agent.

 

“DEALER MANAGER” FS2 CAPITAL PARTNERS, LLC By:  

 

  President

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions therein set forth. We hereby represent that the jurisdictions
identified below represent a true and correct list of all jurisdictions in which
we are registered or licensed as a broker or dealer and are fully authorized to
sell securities, and we agree to advise you of any change in such list during
the term of this Agreement.

1. Identity of Selected Dealer:

 

Full Legal Name:

 

(to be completed by Selected Dealer)

Type of Entity:

 

(to be completed by Selected Dealer)

Organized in the State of:

 

(to be completed by Selected Dealer)

Tax Identification Number:

 

(to be completed by Selected Dealer)

FINRA/CRD Number:

 

(to be completed by Selected Dealer)

--------------------------------------------------------------------------------

2. Any notice under this Agreement will be deemed given pursuant to Section XVII
hereof when delivered to Selected Dealer as follows:

 

Company Name:  

 

Attention to:  

 

  (Name)

 

 

  (Title)

Street Address:  

 

City, State and Zip Code:  

 

Telephone No.:  

(             )

Facsimile No.:  

(             )

Email Address:  

 

Accepted and agreed as of the date below:

 

“SELECTED DEALER”

 

(Print Name of Selected Dealer)

 

By:  

 

  Name:  

 

  Title:  

 

  Date:  

 

--------------------------------------------------------------------------------

SCHEDULE 1

TO

SELECTED DEALER AGREEMENT WITH

FS2 CAPITAL PARTNERS, LLC (“DEALER MANAGER”)

 

NAME OF ISSUER:  

FS INVESTMENT CORPORATION III

 

NAME OF SELECTED DEALER:  

 

 

SCHEDULE TO AGREEMENT DATED:  

 

As marketing fees and to defray other distribution-related expenses, the Dealer
Manager will pay              basis points of the gross cash proceeds on all
sales generated by Selected Dealer pursuant to Section IV of this Selected
Dealer Agreement. These amounts are in addition to the selling commissions
provided for in Section IV of this Selected Dealer Agreement and will be due and
payable at the same time as the selling commissions, as more fully described in
Section V hereof.

 

“DEALER MANAGER” FS2 CAPITAL PARTNERS, LLC   By:  

 

    President

 

“SELECTED DEALER”

 

(Print Name of Selected Dealer)

 

By:  

 

  Name:  

 

  Title:  

 

--------------------------------------------------------------------------------

SCHEDULE 2

TO

SELECTED DEALER AGREEMENT WITH

FS2 CAPITAL PARTNERS, LLC (“DEALER MANAGER”)

 

NAME OF ISSUER:  

FS INVESTMENT CORPORATION III

 

NAME OF SELECTED DEALER:  

 

 

SCHEDULE TO AGREEMENT DATED:  

 

Selected Dealer hereby authorizes the Dealer Manager or its agent to deposit
selling commissions, reallowances and other payments due to it pursuant to this
Selected Dealer Agreement to its bank account specified below. This authority
will remain in force until Selected Dealer notifies the Dealer Manager in
writing to cancel it. In the event that the Dealer Manager deposits funds
erroneously into Selected Dealer’s account, the Dealer Manager is authorized to
debit the account with no prior notice to Selected Dealer for an amount not to
exceed the amount of the erroneous deposit.

 

Bank Name:   

 

Bank Address:   

 

Bank Routing Number:   

 

Account Number:   

 

 

“SELECTED DEALER”

 

(Print Name of Selected Dealer)

 

By:  

 

  Name:  

 

  Title:  

 

  Date:  

 

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SCHEDULE 3

TO

SELECTED DEALER AGREEMENT WITH

FS2 CAPITAL PARTNERS, LLC

Selected Dealer represents and warrants that it is currently licensed as a
broker-dealer in the following jurisdictions:

 

¨    Alabama   ¨    Montana ¨    Alaska   ¨    Nebraska ¨    Arizona   ¨   
Nevada ¨    Arkansas   ¨    New Hampshire ¨    California   ¨    New Jersey ¨   
Colorado   ¨    New Mexico ¨    Connecticut   ¨    New York ¨    Delaware   ¨   
North Carolina ¨    District of Columbia   ¨    North Dakota ¨    Florida   ¨   
Ohio ¨    Georgia   ¨    Oklahoma ¨    Guam   ¨    Oregon ¨    Hawaii   ¨   
Pennsylvania ¨    Idaho   ¨    Puerto Rico ¨    Illinois   ¨    Rhode Island ¨
   Indiana   ¨    South Carolina ¨    Iowa   ¨    South Dakota ¨    Kansas   ¨
   Tennessee ¨    Kentucky   ¨    Texas ¨    Louisiana   ¨    U.S. Virgin
Islands ¨    Maine   ¨    Utah ¨    Maryland   ¨    Vermont ¨    Massachusetts  
¨    Virginia ¨    Michigan   ¨    Washington ¨    Minnesota   ¨    West
Virginia ¨    Mississippi   ¨    Wisconsin ¨    Missouri   ¨    Wyoming

--------------------------------------------------------------------------------

EXHIBIT A TO FORM OF SELECTED DEALER AGREEMENT

DEALER MANAGER AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT B TO DEALER MANAGER AGREEMENT

QUALIFIED JURISDICTIONS

AS OF [    ], 2013

 

¨    Alabama   ¨    Montana ¨    Alaska   ¨    Nebraska ¨    Arizona   ¨   
Nevada ¨    Arkansas   ¨    New Hampshire ¨    California   ¨    New Jersey ¨   
Colorado   ¨    New Mexico ¨    Connecticut   ¨    New York ¨    Delaware   ¨   
North Carolina ¨    District of Columbia   ¨    North Dakota ¨    Florida   ¨   
Ohio ¨    Georgia   ¨    Oklahoma ¨    Guam   ¨    Oregon ¨    Hawaii   ¨   
Pennsylvania ¨    Idaho   ¨    Puerto Rico ¨    Illinois   ¨    Rhode Island ¨
   Indiana   ¨    South Carolina ¨    Iowa   ¨    South Dakota ¨    Kansas   ¨
   Tennessee ¨    Kentucky   ¨    Texas ¨    Louisiana   ¨    U.S. Virgin
Islands ¨    Maine   ¨    Utah ¨    Maryland   ¨    Vermont ¨    Massachusetts  
¨    Virginia ¨    Michigan   ¨    Washington ¨    Minnesota   ¨    West
Virginia ¨    Mississippi   ¨    Wisconsin ¨    Missouri   ¨    Wyoming