Exhibit 10.1
Capital Southwest Corporation
Up to $100,000,000
Shares of Common Stock
(par value $0.25 per share)

SECOND AMENDED AND RESTATED EQUITY DISTRIBUTION AGREEMENT
February 4, 2020
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Ladies and Gentlemen:
Capital Southwest Corporation, a Texas corporation (the “Company”), and [ ] (the
“Manager”), confirm their agreement to amend and restate that certain Amended
and Restated Equity Distribution Agreement, dated August 20, 2019, by and
between the Company and the Manager (the “Amended and Restated Agreement”),
which amended and restated that certain Equity Distribution Agreement, dated
March 4, 2019, by and between the Company and the Manager (the “Initial
Agreement,” and together with the Amended and Restated Agreement, the “Prior
Agreements”) on the terms and conditions described below in this Second Amended
and Restated Equity Distribution Agreement (this “Agreement”), as follows:
Section 1.    Description of Securities. The Company proposes to issue and sell
through or to the Manager (or any Alternative Manager (as defined below)), as
sales agent and/or principal, shares of the Company’s common stock, par value
$0.25 per share (the “Common Stock”), having an aggregate offering price of up
to $100,000,000 (such amount, as reduced on a dollar-for-dollar basis by the
aggregate gross sales proceeds received by the Company from the sale of Common
Stock prior to the date hereof pursuant to the Prior Agreements and those
certain prior alternative equity distribution agreements listed on Schedule A
hereto, the “Maximum Amount”) on the terms set forth in Section 3 of this
Agreement. The shares of Common Stock to be sold through or to the Manager
pursuant hereto or pursuant to a Terms Agreement (as defined below) or through
or to an Alternative Manager pursuant to an Alternative Equity Distribution
Agreement or Alternative Terms Agreement (each term as defined below) are
referred to herein as the “Shares.”
The Company has also entered into separate equity distribution agreements (each,
as may be amended and restated or otherwise modified from time to time, an
“Alternative Equity Distribution Agreement” and collectively, the “Alternative
Equity Distribution Agreements”), dated of even date herewith, with each of the
entities listed on Schedule B hereto, as sales agent and/or principal (each, an
“Alternative Manager” and collectively, the “Alternative Managers”). The Company
agrees that whenever it determines to sell the Shares directly to the Manager or
an Alternative Manager as principal, it will enter into a separate agreement
(each, a “Terms Agreement” or “Alternative Terms Agreement”, respectively) in
substantially the form of Annex I hereto, relating to such sale in accordance
with Section 3 of this Agreement. This Agreement and the Alternative Equity
Distribution Agreements are sometimes hereinafter referred to as the
“Distribution Agreements.” The Manager and the Alternative Managers are
sometimes hereinafter referred to as the “Distribution Managers.”
The aggregate number of Shares that may be sold pursuant to this Agreement, the
Alternative Equity Distribution Agreements, any Terms Agreement and any
Alternative Terms Agreement shall not exceed the Maximum Amount. Notwithstanding
anything to the contrary contained herein, the parties hereto agree that
compliance with the limitations set forth in this Section 1 regarding the
Maximum Amount of Shares issued and sold pursuant to this Agreement, the
Alternative Equity Distribution Agreements, any Terms Agreement and any
Alternative Terms

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Agreement shall be the sole responsibility of the Company, and the Manager shall
have no obligation in connection with such compliance.
As used herein, “Registration Statement” shall mean the registration statement
referred to in Section 2(a) below, including all exhibits, financial statements
and schedules thereto and all documents incorporated or deemed to be
incorporated therein by reference pursuant to the Small Business Credit
Availability Act (the “SBCAA”) or the rules of the Securities and Exchange
Commission (the “Commission”) promulgated thereunder or otherwise, and any
prospectus supplement relating to the Shares that is filed with the Commission
pursuant to Rule 497 under the Securities Act of 1933, as amended (collectively
with the rules and regulations of the Commission thereunder, the “1933 Act”), or
such other 1933 Act rule as may be applicable to the Company, and deemed part of
such registration statement pursuant to Rule 430B or 430C under the 1933 Act, as
amended on each Effective Date (as defined below) and, in the event any
post-effective amendment thereto becomes effective, shall also mean such
registration statement as so amended, and shall also mean any new registration
statement or post-effective amendment as may have been filed pursuant to Section
4(e) of this Agreement. “Effective Date” shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments thereto
became or become effective. “Basic Prospectus” shall mean the prospectus
referred to in Section 2(a) below contained in the Registration Statement at the
Effective Date. “Prospectus” shall mean any Prospectus Supplement filed with the
Commission pursuant to Rule 497 under the 1933 Act, or such other 1933 Act rule
as may be applicable to the Company, relating to the Shares, including documents
incorporated or deemed to be incorporated therein by reference pursuant to the
SBCAA or the rules of the Commission promulgated thereunder or otherwise,
together with the Basic Prospectus.
All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in, or “a part of”, the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in or otherwise deemed under the SBCAA or the rules of the Commission
promulgated thereunder or otherwise to be a part of or included in the
Registration Statement or the Prospectus, as the case may be, as of any
specified date; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus, including those
made pursuant to Rule 497 under the 1933 Act or such other 1933 Act rule as may
be applicable to the Company, shall be deemed to mean and include, without
limitation, the filing of any document under the Exchange Act (as defined below)
which is or is deemed to be incorporated by reference in or otherwise deemed
under the SBCAA or the rules of the Commission promulgated thereunder or
otherwise to be a part of or included in the Registration Statement or the
Prospectus, as the case may be, as of any specified date.
The Company owns (i) 100% of the equity interests in Capital Southwest
Management Corporation (“CSMC”) and (ii) 100% of the equity interests in Capital
Southwest Equity Investments, Inc. (“CSEI”), each of which are the Company’s
only consolidated subsidiaries. The Company, CSMC, and CSEI are collectively
referred to as the “Capital Southwest Entities”.
A Form N-54A - Notification of Election to be Subject to Sections 55 through 65
of the Investment Company Act of 1940 Filed Pursuant to Section 54(a) of the
1940 Act (File No. 814-00061) (the “BDC Election”) was filed by the Company with
the Commission under the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder (collectively called the
“1940 Act”) pursuant to which, the Company elected to be regulated as a business
development company (“BDC”) under the 1940 Act. The Company has elected to be
treated for federal income tax purposes as a regulated investment company
(“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the
“Code”).
Section 2.    Representations and Warranties of the Company. The Company
represents and warrants to and agrees with the Manager that:
(a)Compliance with Registration Requirements. The Company has prepared and filed
with the Commission a registration statement (File No. 333-232492) on Form N-2,
including a related basic prospectus, for registration under the 1933 Act of the
offering and sale of the Shares (the “Registration Statement”). Such
Registration Statement, including any post-effective amendments thereto filed
prior to the date and time that this Agreement is

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executed and delivered by the parties hereto (the “Execution Time”), has become
effective, and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for any such purpose, have been
instituted or are pending or, to the knowledge of the Company, have been
threatened by the Commission, and any request on the part of the Commission for
additional information with respect thereto has been complied with. The Company
may have filed, as part of an amendment to the Registration Statement or
pursuant to Rule 497 under the 1933 Act or such other 1933 Act rule as may be
applicable to the Company, one or more amendments thereto, each of which has
previously been furnished to you. The Company will file with the Commission one
or more prospectus supplements (each, a “Prospectus Supplement” and
collectively, the “Prospectus Supplements”) related to the Shares in accordance
with Rule 497 under the 1933 Act or such other 1933 Act rule as may be
applicable to the Company, including all documents incorporated or deemed to be
incorporated therein by reference pursuant to the SBCAA or the rules of the
Commission promulgated thereunder or otherwise. As filed, such Prospectus
Supplements, together with the Basic Prospectus, shall contain all information
required by the 1933 Act and the 1940 Act and, except to the extent the Manager
shall agree in writing to a modification, shall be in all substantive respects
in the form furnished to you prior to the Execution Time or prior to any such
time this representation is repeated or deemed to be made. The Registration
Statement, at the Execution Time, as of the time of each sale of Shares pursuant
to this Agreement (each, a “Time of Sale”), at each Settlement Date (as defined
in Section 3(a)(vi) hereof), and at all times during which a prospectus is
required by the 1933 Act to be delivered in connection with any sale of Shares,
meets or will meet the requirements set forth in Rule 415(a)(1)(x) under the
1933 Act.
On its most recent Effective Date, the Registration Statement did, and when the
Prospectus is first filed in accordance with Rule 497 under the 1933 Act, as of
the date that it is filed with the Commission, the date of the Prospectus
Supplements, as of each Time of Sale, at each Settlement Date, and at all times
during which a prospectus is required by the 1933 Act to be delivered in
connection with any sale of Shares, the Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements of the
1933 Act and the 1940 Act; on its most recent Effective Date, at the Execution
Time and, as amended or supplemented, as of each Time of Sale, at each
Settlement Date and at all times during which a prospectus is required by the
1933 Act to be delivered in connection with any sale of Shares, the Registration
Statement did not and will not contain any untrue statement of a 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; and at no time during the
period that begins on the date of the Prospectus Supplement and ends at the
later of each Settlement Date and the end of the period during which a
prospectus is required by the 1933 Act to be delivered in connection with any
sale of Shares did or will the Prospectus, as then amended or supplemented,
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement, or the Prospectus (or
any supplement thereto), in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Manager specifically
for inclusion in the Registration Statement or the Prospectus (or any supplement
thereto), it being understood and agreed that the only such information
furnished by the Manager consists of the last paragraph under the heading “Plan
of Distribution” in the Prospectus. The Commission has not issued any order
preventing or suspending the use of the Prospectus.
(b)Expense Summary. The information set forth in the Prospectus under the
caption “Fees and Expenses” has been prepared in accordance with the
requirements of Form N-2 and to the extent estimated or projected, such
estimates or projections are believed to be reasonably based.
(c)Preparation of the Financial Statements. The consolidated financial
statements, together with the related schedules and notes thereto, filed with
the Commission as a part of the Registration Statement and included in the
Prospectus present fairly the consolidated financial position of the Capital
Southwest Entities as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. Such financial statements
have been prepared in conformity with accounting principles generally accepted
in the United States (“GAAP”) applied on a consistent basis throughout the
periods involved, except as may be expressly stated in the related notes
thereto. Other than the financial statements included in the Registration
Statement, no other financial statements or supporting schedules are required to
be included therein. The financial data and financial information included in
the Prospectus under the caption “Selected Financial Data” present fairly in all
material respects the information shown therein and have been compiled on a
basis consistent with the financial statements included in the Registration
Statement. All

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disclosures contained in the Registration Statement or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the “Exchange Act”), and Item 10 of
Regulation S-K of the 1933 Act, to the extent applicable. The selected financial
information and data included in the Registration Statement and the Prospectus
have been prepared on a basis consistent with that of the books and records of
the Company, I-45 SLF LLC (“I-45”) and Media Recovery, Inc. (“MRI”), as
applicable.
(d)Internal Control Over Financial Reporting; Independent Accountants. The
Company maintains a system of internal control over financial reporting (as such
term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act). The
Company’s auditors and the audit committee of the Company’s board of directors
have been advised of (1) any known significant deficiencies in the design or
operation of internal control over financial reporting that could adversely
affect the ability to record, process, summarize, and report financial data and
(2) any known fraud, whether or not material, that involves management or other
employees who have a role in the Company’s internal control over financial
reporting; and any such deficiencies or fraud will not result in a Material
Adverse Effect (as defined below). The Company’s internal control over financial
reporting is effective and the Company is not aware of any material weakness in
its internal control over financial reporting. RSM (US) LLP, the Company’s and
I-45’s current independent accountant, which audited certain financial
statements of the Company and I-45 and whose reports with respect to the
financial statements of each of the Company and I-45 appear in the Registration
Statement and the Prospectus, is an independent registered public accounting
firm as required by the 1933 Act, the 1940 Act, the Exchange Act and, with
respect to the Company, the rules of the Public Company Accounting Oversight
Board (the “PCAOB”) and, with respect to I-45, the American Institute of
Certified Public Accountants (the “AICPA”). Grant Thornton LLP, the Company’s
former independent accountant, which audited certain financial statements of the
Company and whose reports with respect to the financial statements of the
Company appear in the Registration Statement and the Prospectus, is an
independent registered public accounting firm as required by the 1933 Act, the
1940 Act, the Exchange Act and the rules of the PCAOB. Whitley Penn LLP, which
audited certain financial statements of MRI and whose report appears in the
Registration Statement and the Prospectus is an independent registered public
accounting firm as required by the 1933 Act, the 1940 Act, the Exchange Act and
the rules of the AICPA.
(e)Disclosure Controls. The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15 and 15d-15 under
the Exchange Act) that (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company’s principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared, (ii) will
be evaluated for effectiveness as of the end of each fiscal quarter and fiscal
year of the Company, and (iii) are effective to perform the functions for which
they were established.
(f)No Material Adverse Change. Except as otherwise disclosed in the Prospectus,
subsequent to the respective dates as of which information is given in the
Prospectus: (i) there has been no material adverse change, or any development
that could reasonably be expected, either individually or in the aggregate, to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, net asset value, prospects, business or operations, whether
or not arising from transactions in the ordinary course of business, of the
Capital Southwest Entities, considered as one entity, or I-45 (any such change
or effect, where the context so requires is called a “Material Adverse Change”
or a “Material Adverse Effect”); (ii) none of the Capital Southwest Entities,
considered as one entity, and I-45 has incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of
business or entered into any material transaction or agreement not in the
ordinary course of business; and (iii) except for regular distributions paid or
declared by the Company to its stockholders consistent with past practice or any
other distributions described in the Prospectus, there has been no dividend or
distribution of any kind declared, paid or made by the Company.
(g)Good Standing of the Company and its Subsidiaries. Each of the Capital
Southwest Entities and I-45 has been duly organized, is validly existing and in
good standing under the laws of the state of the jurisdiction of its
incorporation or organization and has the corporate power and authority to own,
lease and operate its properties and to conduct the business in which it is
engaged and to enter into and perform its obligations, as applicable, under this

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Agreement. Each of the Capital Southwest Entities and I-45 is duly qualified to
do business and in good standing as a foreign corporation in each jurisdiction
in which its ownership or lease of property or the conduct of its businesses
requires such qualification, except for such jurisdictions where the failure to
be so qualified or in good standing would not, individually or in the aggregate,
have a Material Adverse Effect.
(h)Subsidiaries of the Company. The Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or other entity other than (i) its interests in CSMC and CSEI
and (ii) those corporations or other entities accounted for as portfolio
investments in accordance with the Commission’s rules and regulations (each a
“Portfolio Company” and collectively, the “Portfolio Companies”).
(i)Portfolio Companies. The Company, either directly or indirectly through one
or more tax blocker subsidiaries, have duly authorized, executed and delivered
agreements (each a “Portfolio Company Agreement”) required to make the
investments in the Portfolio Companies. Except as otherwise disclosed in the
Prospectus, there has been no material change in the total fair value dollar
amount of the Portfolio Company investments on non-accrual status.
(j)Officers and Directors. Except as disclosed in the Prospectus, no person is
serving or acting as an officer or director of the Company except in accordance
with the applicable provisions of the 1940 Act. Except as disclosed in the
Registration Statement and the Prospectus, no director of the Company is (i) an
“interested person” (as defined in the 1940 Act) of the Company or (ii) an
“affiliated person” (as defined in the 1940 Act) of the Manager. For purposes of
this Section 2(j), the Company shall be entitled to reasonably rely on
representations from such officers and directors.
(k)Business Development Company Election. The Company has filed the BDC Election
and, accordingly, has duly elected to be subject to the provisions of Sections
55 through 65 of the 1940 Act. At the time the BDC Election was filed with the
Commission, it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements of,
the 1940 Act and (ii) did not include any untrue statement of material fact or
omit to state a material fact necessary to make the statements therein not
misleading. The Company has not filed with the Commission any notice of
withdrawal of the BDC Election pursuant to Section 54(c) of the 1940 Act, the
BDC Election remains in full force and effect, and, to the Company’s knowledge,
no order of suspension or revocation of the BDC Election under the 1940 Act has
been issued or proceedings therefore initiated or threatened by the Commission.
The operations of the Company are in compliance in all material respects with
all applicable provisions of the 1940 Act and the rules and regulations of the
Commission thereunder, including the provisions applicable to BDCs.
(l)Authorization and Description of Common Stock. The authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus as of
the date thereof under the caption “Capitalization.” The Common Stock (including
the Shares) conforms in all material respects to the description thereof
contained in the Prospectus. All issued and outstanding Common Stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable, and have been offered and sold or exchanged by the Company in
compliance with all applicable laws (including, without limitation, federal and
state securities laws). None of the outstanding Common Stock of the Company was
issued in violation of the preemptive or other similar rights of any security
holder of the Company, nor does any person have any preemptive right of first
refusal or other right to acquire any of the Shares covered by this Agreement.
The Company currently does not have any shares of preferred stock authorized for
issuance under its articles of incorporation. The description of the Company’s
stock option, stock bonus and other stock plans or arrangements, and the
options, restricted stock or other rights granted thereunder, set forth in the
Prospectus accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options, awards and rights. The Shares
to be sold pursuant to this Agreement have been duly authorized by the board of
directors of the Company for issuance and sale to the Manager and, when issued
and delivered by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued, fully paid and
non-assessable.
(m)Non-Contravention of Existing Instruments. No Further Authorizations or
Approvals Required. None of the Capital Southwest Entities or I-45 are in
violation of or default under (i) its respective charter, bylaws, or any similar
organizational document; (ii) any indenture, mortgage, loan or credit agreement,
note, contract, franchise, lease

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or other agreement or instrument , and any supplements or amendments thereto, to
which it is a party or bound or to which any of its properties or assets is
subject, including, in the case of the Company, any Portfolio Company Agreement;
and (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over it or any of its properties, as
applicable, except with respect to clauses (ii) and (iii) herein, for such
violations or defaults as would not, individually or in the aggregate, have a
Material Adverse Effect. No person has the right to act as an underwriter, sales
agent or financial advisor to the Company in connection with or by reason of the
offer and sale of the Shares contemplated hereby other than the Manager and any
Alternative Manager pursuant to this Agreement and the respective Alternative
Equity Distribution Agreement, respectively.
The execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby and by the Prospectus
(i) have been duly authorized by all necessary corporate action, have been
effected in accordance with the 1940 Act and will not result in any violation of
the provisions of the articles of incorporation or bylaws of the Company,
(ii) will not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, or require the consent of any
other party to, any existing instrument, except for such conflicts, breaches,
defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Effect and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to the Company. No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory authority,
governmental agency or other body having jurisdiction over the Capital Southwest
Entities or I-45 or any of their properties or assets is required for the
execution, delivery and performance of this Agreement by the Company or
consummation of the transactions contemplated hereby and by the Prospectus,
except such as have already been obtained or made under the 1933 Act and the
1940 Act and such as may be required under any applicable state securities or
blue sky laws, from the Financial Industry Regulatory Authority, Inc. (“FINRA”)
or under the rules and regulations of the Nasdaq Stock Market (“NASDAQ”).
(n)Material Agreements. Each material agreement described in the Prospectus
(each such agreement, a “Material Agreement” and collectively, the “Material
Agreements”) has been accurately and fully described in all material respects.
The Company has not sent or received notice of, or otherwise communicated or
received communication with respect to, termination of any Material Agreement,
nor has any such termination been threatened by any person.
(o)Intellectual Property Rights. Each of the Capital Southwest Entities and I-45
owns or possesses sufficient trademarks, trade names, patent rights, copyrights,
domain names, licenses, approvals, trade secrets and other similar rights
(collectively, “Intellectual Property Rights”) reasonably necessary to conduct
its businesses as described in the Prospectus; and the expected expiration of
any of such Intellectual Property Rights would not result in a Material Adverse
Effect. None of the Capital Southwest Entities or I-45 has received any notice
of infringement or conflict with asserted intellectual property rights of
others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Effect. To the Company’s knowledge,
none of the technology employed by the Capital Southwest Entities and/or I-45
has been obtained or is being used by them in violation of any contractual
obligation binding on them or any of their officers, directors or employees or
otherwise in violation of the rights of any persons.
(p)All Necessary Permits, etc. Each of the Capital Southwest Entities and I-45
possesses such valid and current certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct its business, and the Company has neither received nor is
aware of any notice of proceedings relating to the revocation or modification
of, or non-compliance with, any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a Material Adverse Effect.
(q)Absence of Proceedings. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against any of the Capital Southwest Entities or I-45 which is
required to be disclosed in the Registration Statement or the Prospectus (other
than as disclosed therein), or which might reasonably be expected to result in a

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Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder. All
pending legal or governmental proceedings to which any Capital Southwest Entity
or I-45 is a party, or of which any of such Capital Southwest Entity’s or I-45’s
properties or assets is the subject which are not described in the Registration
Statement or the Prospectus, including ordinary routine litigation incidental to
the business, could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(r)Accuracy of Exhibits. There are no contracts or documents that are required
to be described in the Registration Statement or the Prospectus or to be filed
as exhibits thereto that have not been so described and filed as required;
provided, however, that the Company will file this Agreement or a form thereof
under cover of a Current Report on Form 8-K under the Exchange Act.
(s)Regulated Investment Company. The Company has been and is in compliance with
the requirements of Subchapter M of the Code to qualify as a RIC under the Code.
The Company will direct the investment of the net proceeds of the offering of
the Shares and continue to conduct its activities in such a manner as to comply
with the requirements of Subchapter M of the Code.
(t)Registered Management Investment Company Status. None of the Capital
Southwest Entities or I-45 is, or after giving effect to the offering and sale
of the Shares, will be a “registered management investment company” or an entity
“controlled” by a “registered management investment company,” as such terms are
used under the 1940 Act.
(u)Insurance. The Capital Southwest Entities and I-45 maintain insurance
covering their properties, operations, personnel and business as they deem
adequate; such insurance insures against such losses and risks to an extent
which is adequate in accordance with customary industry practice to protect the
Capital Southwest Entities and I-45, as applicable, and their business; all such
insurance is fully in force on the date hereof and will be fully in force at the
time of purchase of the Shares.
(v)Statistical, Demographic or Market-Related Data. All statistical, demographic
or market-related data included in the Registration Statement or the Prospectus
are based on or derived from sources that the Company believes to be reliable
and accurate and all such data included in the Registration Statement or the
Prospectus accurately reflects the materials upon which it is based or from
which it was derived.
(w)Investments. Save for those provided in the 1940 Act and the Code and the
regulations promulgated thereunder, there are no material restrictions,
limitations or regulations with respect to the ability of the Company to invest
its assets as described in the Prospectus.
(x)Tax Law Compliance. Each of the Capital Southwest Entities and I-45 has filed
all necessary material federal, state, local and foreign tax returns and have
paid all material taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied against any
of them. The Company has made adequate charges, accruals and reserves in the
applicable financial statements referred to in the Prospectus in respect of all
material federal, state, local and foreign taxes for all periods as to which the
tax liability of the Capital Southwest Entities have not been finally
determined. The Company is not aware of any tax deficiency that has been or
might be asserted or threatened against any of the Capital Southwest Entities or
I-45 that could result in a Material Adverse Effect.
(y)Distribution of Offering Materials. The Company has not distributed and will
not distribute material in connection with the offering and sale of the Shares
other than the Registration Statement, the Prospectus and the Additional
Disclosure Items (as defined below).
(z)Absence of Registration Rights. Except as disclosed in the Prospectus, there
are no persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act.

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(aa)NASDAQ Stock Market. The Common Stock is registered pursuant to
Section 12(b) of the Exchange Act and has been approved for listing on the
Nasdaq Global Select Market and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or delisting the Common Stock from the Nasdaq Global
Select Market, nor has the Company received any notification that the Commission
or the Nasdaq Global Select Market is contemplating terminating such
registration or listing. The Company has continued to satisfy, in all material
respects, all requirements for listing the Common Stock for trading on the
Nasdaq Global Select Market.
(bb)    No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(cc)    Material Relationship with the Manager. Except as disclosed in the
Prospectus, none of the Capital Southwest Entities and I-45 has any material
lending or other relationship with a bank or lending institution affiliated with
the Manager.
(dd)    No Unlawful Contributions or Other Payments. Neither the Capital
Southwest Entities nor I-45 nor, to the Company’s knowledge, any employee or
agent of the Capital Southwest Entities or I-45, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(ee)    No Outstanding Loans or Other Indebtedness. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company.
(ff)    Compliance with Laws. Each of the Capital Southwest Entities and I-45
(i) is conducting its business in compliance with all laws, rules, regulations,
decisions, directives and orders except for such failure to comply which would
not reasonably be expected to result in a Material Adverse Effect and (ii) is
conducting its business in compliance in all material respects with the
applicable requirements of the 1940 Act, as applicable.
(gg)    Compliance with the Sarbanes-Oxley Act of 2002. The Company and, to its
knowledge, its officers and directors (in such capacity) are in compliance with
the provisions of the Sarbanes-Oxley Act of 2002 and the Commission’s published
rules promulgated thereunder that are applicable to the Company as of the date
hereof.
(hh)    Anti-Money Laundering, Foreign Corrupt Practices Act Compliance. The
operations of the Capital Southwest Entities and I-45 are and have been
conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, also known as the Bank Secrecy
Act, the USA Patriot Act, the money laundering statues of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any
governmental entity having jurisdiction over the Capital Southwest Entities
and/or I-45, as applicable (collectively, the “Money Laundering Laws”), and no
proceeding by or before any court or governmental or regulatory agency,
authority or body or any arbitrator involving the Capital Southwest Entities or
I-45 with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company, threatened. Neither the Capital Southwest Entities nor I-45 nor,
to the knowledge of the Company, any director, officer, partner, manager, agent,
employee or other person acting on behalf of the Capital Southwest Entities or
I-45, has (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment; or
(v) made any payment of funds or received or retained funds in violation of any
such law, rule or regulation.
(ii)    No Sanctions by the Office of Foreign Assets Control. Neither the
Capital Southwest Entities nor I-45 nor, to the knowledge of the Company, any
director, officer, partner, manager, agent, employee or other person acting on
behalf of the Capital Southwest Entities or I-45, is currently the subject of
any U.S. sanctions, including those

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administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly, or indirectly knowingly,
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing any activities of or with any person
currently the subject of any U.S. sanctions, including those administered by
OFAC.
(jj)    No Discrimination. None of the Capital Southwest Entities is in
violation of or has received notice of any violation with respect to any federal
or state law relating to discrimination in the hiring, promotion or pay of
employees, nor any applicable federal or state wage and hour laws, nor any state
law precluding the denial of credit due to the neighborhood in which a property
is situated, the violation of any of which would reasonably be expected to have
a Material Adverse Effect.
(kk)    Exchange Act Compliance. The documents deemed to be incorporated by
reference in the Prospectus, at the time they are filed with the Commission,
comply and will comply, as applicable, in all material respects with the
requirements of the Exchange Act, and, when read together with the other
information in the Prospectus, at the Effective Date and each Time of Sale,
Settlement Date and Representation Date, do not and will not, as applicable,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ll)    ERISA.     Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and all stock purchase, stock option, stock-based severance,
employment, change-in-control, medical, disability, fringe benefit, bonus,
incentive, deferred compensation, employee loan and all other employee benefit
plans, agreements, programs, policies or other arrangements, whether or not
subject to ERISA, that is maintained, administered or contributed to by any of
the Capital Southwest Entities for employees or former employees, directors or
independent contractors of the Capital Southwest Entities, or under which any of
the Capital Southwest Entities has had or has any present or future obligation
or liability, has been maintained in material compliance with its terms and the
requirements of any applicable federal, state, local and foreign laws, statutes,
orders, rules and regulations, including but not limited to ERISA and the Code;
no prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred which would result in a material
liability to the Company with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exemption; no event has
occurred (including a “reportable event” as such term is defined in Section 4043
of ERISA) and no condition exists that would subject the Company to any material
tax, fine, lien, penalty, or liability imposed by ERISA, the Code or other
applicable law; and for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid contributions) exceeds the present value
of all benefits accrued under such plan determined using reasonable actuarial
assumptions.
(mm)    Additional Disclosure Items. The Company represents and agrees that,
without the prior consent of the Manager, (i) it will not distribute any
offering material other than the Registration Statement, the Prospectus and the
Additional Disclosure Items, and (ii) it has not made and will not make any
offer relating to the Shares that would constitute a “free writing prospectus”
as defined in Rule 405 under the 1933 Act and which the parties agree, for the
purposes of this Agreement, includes (x) any “advertisement” as defined in
Rule 482 under the 1933 Act; and (y) any sales literature, materials or
information provided to investors by, or with the approval of, the Company in
connection with the offering of the Shares (the materials and information
referred to in this Section 2(mm) are herein referred to as an “Additional
Disclosure Item”); any Additional Disclosure Item the use of which has been
consented to by the Manager is listed on Schedule C hereto.
(nn)    Related Party Transactions. There are no business relationships or
related-party transactions involving the Capital Southwest Entities or any other
person required to be described in the Prospectus which have not been described
as required.

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(oo)    FINRA Matters. To the Company’s knowledge, there are no affiliations or
associations between any member of FINRA and any of the Company’s officers,
directors or 5% or greater securityholders, except as set forth in the
Registration Statement and the Prospectus.
Any certificate signed by any officer of the Company and delivered to the
Manager or counsel for the Manager in connection with the offering of the Shares
shall be deemed a representation and warranty by the Company, as to matters
covered therein, to the Manager.
Section 3.    Sale and Delivery of Shares.
(a)On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell through the Manager, as sales agent, and the Manager
agrees to use its commercially reasonable efforts to sell, as sales agent for
the Company, the Shares on the following terms.
(i)Each time that the Company wishes to issue and sell Shares on any day that is
a trading day for the Nasdaq Global Select Market (a “Trading Day”) (other than
a Trading Day on which the Nasdaq Global Select Market is scheduled to close
prior to its regular weekday closing time) pursuant to this Agreement (each, a
“Placement”), it will instruct the Manager by telephone of the parameters in
accordance with which it desires Shares to be sold, which shall at a minimum
include the number of Shares to be offered, the time period during which sales
are requested to be made, the minimum price below which sales may not be made
and any limitation on the number of Shares that may be sold in any one day (a
“Placement Notice”). The Manager will, prior to 4:30 p.m. (New York City time)
or, if later, within three hours after receipt of the Placement Notice, on the
same business day (as defined below) on which such Placement Notice is delivered
to the Manager, issue to the Company a notice by email addressed to all of the
authorized representatives of the Company on Schedule D hereto (the “Authorized
Company Representatives”) confirming all of the parameters of the Placement. The
Placement Notice shall be effective upon receipt by any of the Authorized
Company Representatives of the email notice from the Manager, unless and until
(i) the entire amount of the Shares covered by the Placement Notice have been
sold, (ii) in accordance with Section 3(a)(ii) hereof, the Company suspends or
terminates the Placement Notice, (iii) the Company issues a subsequent Placement
Notice with parameters superseding those on the earlier dated Placement Notice,
or (iv) this Agreement has been terminated under the provisions of Section 9.
Subject to the terms and conditions hereof, the Manager shall use its
commercially reasonable efforts to offer and sell all of the Shares designated
in the Placement Notice; provided, however, that the Manager shall have no
obligation to offer or sell any Shares, and the Company acknowledges and agrees
that the Manager shall have no such obligation in the event an offer or sale of
the Shares on behalf of the Company may in the judgment of the Manager
constitute the sale of a “block” under Rule 10b-18(a)(5) under the Exchange Act
or a “distribution” within the meaning of Rule 100 of Regulation M under the
Exchange Act or the Manager reasonably believes it may be deemed an
“underwriter” under the 1933 Act in a transaction that is other than (A) by
means of ordinary brokers’ transactions between members of the NASDAQ that
qualify for delivery of a Prospectus to the NASDAQ in accordance with Rule 153
under the 1933 Act or (B) directly on or through an electronic communication
network, a “dark pool” or any similar market venue (the transactions described
in (A) and (B) are hereinafter referred to as “At the Market Offerings”).
(ii)Notwithstanding the foregoing, the Company or the Manager may, upon notice
to the other party by telephone (confirmed promptly by electronic mail from such
party), suspend the offering of the Shares pursuant to this Agreement or suspend
or terminate a previously issued Placement Notice; provided, however, that such
suspension or termination shall not affect or impair the parties’ respective
obligations with respect to the Shares sold hereunder prior to the giving of
such notice.
(iii)The Manager hereby covenants and agrees not to make any sales of the Shares
on behalf of the Company, pursuant to this Section 3(a), other than (A) by means
of At the Market Offerings and (B) such other sales of the Shares on behalf of
the Company in its capacity as agent of the Company as shall be agreed by the
Company and the Manager.

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(iv)The compensation to the Manager, as an agent of the Company, for sales of
the Shares shall be 2.0% of the gross sales price of the Shares sold pursuant to
this Section 3(a). The foregoing rate of compensation shall not apply when the
Manager acts as principal, in which case the Company may sell Shares to the
Manager as principal at a price agreed upon at the relevant applicable time
pursuant to a Terms Agreement. The remaining proceeds, after further deduction
for any transaction fees imposed by any governmental or self-regulatory
organization in connection with such sales, shall constitute the net proceeds to
the Company for such Shares (the “Net Proceeds”).
(v)The Manager shall provide written confirmation to the Company as soon as
practicable following the close of trading on the Nasdaq Global Select Market
each day in which the Shares are sold under this Section 3(a) setting forth the
aggregate amount of the Shares sold on such day, the aggregate Net Proceeds to
the Company, and the aggregate compensation payable by the Company to the
Manager with respect to such sales.
(vi)Settlement for sales of the Shares pursuant to this Section 3(a) will occur
on the second Trading Day following the date on which such sales are made,
unless another date shall be agreed upon by the Company and the Manager
(provided that, if such Trading Day is not a business day, then settlement will
occur on the next succeeding Trading Day that is also a business day) (each such
date, a “Settlement Date”). As used herein, the term “business day” means any
day other than a Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law, regulation or executive
order to close. On each Settlement Date, the Shares sold through the Manager for
settlement on such date shall be issued and delivered by the Company to the
Manager against payment of the Net Proceeds for the sale of such Shares.
Settlement for all such Shares shall be effected by electronically transferring
the Shares by the Company or its transfer agent to the Manager’s account, or to
the account of the Manager’s designee, at The Depository Trust Company (“DTC”)
through its Deposit and Withdrawal at Custodian System (“DWAC”) or by such other
means of delivery as may be mutually agreed upon by the Company and the Manager,
which in all cases shall be freely tradable, transferable, registered shares
eligible for delivery through DTC, in return for payments in same day funds
delivered to the account designated by the Company. If the Company, or its
transfer agent (if applicable), shall default on its obligation to deliver the
Shares on any Settlement Date, the Company shall (A) indemnify and hold the
Manager harmless against any loss, claim or damage arising from or as a result
of such default by the Company and (B) pay the Manager any commission to which
it would otherwise be entitled absent such default. The Authorized Company
Representatives, or any designees thereof as notified to the Manager in writing,
shall be the contact persons for the Company for all matters related to the
settlement of the transfer of the Shares through DWAC for purposes of this
Section 3(a)(vi).
(vii)At each Time of Sale, Settlement Date and Representation Date (as defined
in Section 4(q) hereof), the Company shall be deemed to have affirmed its
representations and warranties contained in this Agreement. Any obligation of
the Manager to use its commercially reasonable efforts to sell the Shares on
behalf of the Company shall be subject to the continuing accuracy of the
representations and warranties of the Company, to the performance by the Company
of its obligations hereunder and to the continuing satisfaction of the
additional conditions specified in Section 5 of this Agreement.
(b)(i) If the Company wishes to issue and sell the Shares other than as set
forth in Section 3(a) of this Agreement or as set forth in Section 3(a) of any
Alternative Equity Distribution Agreement, it may elect, in its sole discretion,
to notify the Manager of the proposed terms of such sale. If the Manager, acting
as principal, wishes to accept such proposed terms (which it may decline to do
for any reason in its sole discretion) or, following discussions with the
Company, wishes to accept amended terms, the Manager, the Company and, if
applicable, the Alternative Managers will enter into a Terms Agreement setting
forth the terms of such Placement. In the event of a conflict between the terms
of this Agreement and the terms of any Terms Agreement, the terms of such Terms
Agreement will control. For avoidance of doubt, nothing contained in this
Agreement shall be construed to require the Company to engage the Manager or any
Alternative Managers in connection with the offer and sale of any of the
Company’s securities, including shares of the Common Stock, whether in
connection with an underwriting offering or otherwise.

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(c)In the event the Company engages the Manager for a sale of Shares that would
constitute the sale of a “block” under Rule 10b-18(a)(5) under the Exchange Act
or a “distribution,” within the meaning of Rule 100 of Regulation M under the
Exchange Act, the Company and the Manager will agree to compensation that is
customary for the Manager with respect to such transactions.
(d)(i) Under no circumstances shall the Company cause or request the offer or
sale of any Shares if, after giving effect to the sale of such Shares, the
aggregate gross sales proceeds or the aggregate number of the Shares sold
pursuant to this Agreement and any Alternative Equity Distribution Agreement
would exceed the lesser of (A) the Maximum Amount, (B) the amount available for
offer and sale under the currently effective Registration Statement and (C) the
amount authorized from time to time to be issued and sold under this Agreement
and any Alternative Equity Distribution Agreement by the Company’s board of
directors, or a duly authorized committee thereof, and notified to the Manager
in writing. Under no circumstances shall the Company cause or request the offer
or sale of any Shares (i) at a price lower than the minimum price authorized
from time to time by the Company’s board of directors or a duly authorized
committee thereof, and notified to the Manager in writing and (ii) at a price
(net of the Manager’s commission, discount or other compensation for such sales
payable by the Company pursuant to this Section 3) lower than the Company’s
then-current net asset value per share (as calculated pursuant to the 1940 Act),
unless the Company has received the requisite stockholder approval under the
1940 Act and notifies the Manager in writing.
(ii)If any party has reason to believe that the exemptive provisions set forth
in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied with
respect to the Shares, it shall promptly notify the other parties and sales of
the Shares under this Agreement and any Alternative Equity Distribution
Agreement shall be suspended until that or other exemptive provisions have been
satisfied in the judgment of each party. Upon the reasonable request of the
Company in writing to the Manager (which such request may be by electronic
mail), the Manager shall promptly calculate and provide in writing to the
Company a report setting forth, for the prior week, the average daily trading
volume (as defined in Rule 100 of Regulation M under the Exchange Act) of the
Common Stock.
(e)Each sale of the Shares to or through the Manager or any Alternative Manager,
as applicable, shall be made in accordance with the terms of this Agreement or,
if applicable, a Terms Agreement, or the respective Alternative Equity
Distribution Agreement or, if applicable, an Alternative Terms Agreement, as
applicable. The commitment of the Manager to purchase the Shares pursuant to any
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
specify the number of the Shares to be purchased by the Manager pursuant
thereto, the price to be paid to the Company for such Shares, any provisions
relating to rights of, and default by, underwriters acting together with the
Manager in the reoffering of the Shares, any provisions relating to the granting
of an option to purchase additional Shares for the purpose of covering
over-allotments, and the time and date (each such time and date being referred
to herein as a “Time of Delivery”) and place of delivery of and payment for such
Shares. Such Terms Agreement shall also specify any requirements for opinions of
counsel, accountants’ letters and officers’ certificates pursuant to Section 5
hereof and any other information or documents required by the Manager.
(f)Subject to such further limitations on offers and sales of Shares or delivery
of instructions to offer and sell Shares as are set forth herein, or in any
Alternative Equity Distribution Agreement, and as may be mutually agreed upon by
the Company and the Manager or any Alternative Manager, as applicable, offers
and sales of Shares pursuant to this Agreement or any Alternative Equity
Distribution Agreement, as applicable, shall not be requested by the Company and
need not be made by the Manager or any Alternative Manager, as applicable, at
any time when or during any period in which the Company is or could be deemed to
be in possession of material non-public information.
(g)The Company acknowledges and agrees that (A) there can be no assurance that
the Manager or any Alternative Manager will be successful in selling the Shares,
(B) neither the Manager nor any Alternative Manager will incur liability or
obligation to the Company or any other person or entity if such Manager does not
sell Shares for any reason other than a failure by the Manager or any
Alternative Manager to use its commercially reasonable efforts consistent with
its normal trading and sales practices and applicable law and regulations to
sell such Shares in accordance with the terms of this Agreement or any
Alternative Equity Distribution Agreement, as applicable, and (C) neither the
Manager nor any Alternative Manager shall be under any obligation to purchase
Shares on a principal basis pursuant to this Agreement or any Alternative Equity
Distribution Agreement, as applicable, except as otherwise specifically

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agreed in writing by the Manager and the Company or any Alternative Manager and
the Company, as applicable. For purposes of clarification, the Manager shall
only be deemed to be acting as a sales agent under this Agreement during the
period beginning with the delivery of a Placement Notice from the Company to the
Manager and ending upon the suspension or termination of such Placement Notice.
(h)The Company agrees that, during the term of this Agreement, any offer to
sell, any solicitation of an offer to buy, or any sales of Shares or sales of
Common Stock pursuant to any At the Market Offering (as defined herein and
within the meaning of Rule 415(a)(4) under the 1933 Act) shall only be effected
by or through the Manager or an Alternative Manager, but in no event may more
than one Distribution Manager be selling Shares under the Distribution
Agreements at any given time, and the Company shall in no event request that
more than one Distribution Manager sell Shares at the same time. Notwithstanding
the foregoing or anything else herein to the contrary, nothing contained in this
Agreement shall be construed to limit the Company’s ability to engage additional
Distribution Managers subsequent to the date hereof. The Company will notify the
Manager and the Alternative Managers in the event that it engages one or more
additional Distribution Managers subsequent to the date hereof and Schedule B
hereto shall be deemed to incorporate by reference the names of each of the
Distribution Managers (other than the Manager) listed on Schedule B of the
Distribution Agreements subsequently entered into by the Company and such
additional Distribution Managers.
Section 4.    Covenants of the Company. The Company agrees with the Manager:
(a)During any period that a prospectus relating to the Shares is required to be
delivered under the 1933 Act, the Company, subject to Section 4(b), will comply
with the requirements of Rule 415, Rule 430B or Rule 430C, as applicable, and
Rule 497 or Rule 424, as applicable, and will notify the Manager immediately,
and confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus, any amended Prospectus or any document under the Exchange Act which
is or is deemed to be incorporated by reference in the Prospectus shall have
been filed, (ii) of the receipt of any comments from the Commission relating to
the Registration Statement, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any prospectus, or
of the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 497 or Rule 424, as applicable, and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 497 or Rule 424, as applicable, was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. During any period that a prospectus relating to the Shares is
required to be delivered under the 1933 Act, the Company will use its reasonable
efforts to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b)The Company shall notify the Manager promptly of the time on or after the
date of this Agreement when any amendment to the Registration Statement has been
filed or becomes effective or when the Basic Prospectus or the Prospectus or any
supplement to any of the foregoing has been filed; and the Company shall cause
the Basic Prospectus, the Prospectus Supplement and the Prospectus and each
amendment or supplement to the Basic Prospectus, the Prospectus Supplement or
the Prospectus to be filed with the Commission as required pursuant to Rule 497
or Rule 424 under the 1933 Act, as applicable, within the time period
prescribed.
(c)The Company has furnished or will deliver to the Manager and counsel for the
Manager, without charge, conformed copies of the Registration Statement as
originally filed, and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and conformed copies of all
consents and certificates of experts, and, upon the Manager’s request, will also
deliver to the Manager, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits).
The copies of the Registration Statement and each amendment thereto furnished to
the Manager will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T, or as filed with the Commission in paper form as permitted by
Regulation S-T.

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(d)The Company shall make available to the Manager, as soon as practicable after
this Agreement becomes effective, and thereafter from time to time shall furnish
to the Manager, as many copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration Statement) as
the Manager may reasonably request for the purposes contemplated by the 1933
Act; in case the Manager is required to deliver (whether physically, deemed to
be delivered pursuant to Rule 153 or any similar rule), in connection with the
sale of the Shares, a prospectus after the nine-month period referred to in
Section 10(a)(3) of the 1933 Act, or after the time a post-effective amendment
to the Registration Statement is required pursuant to Item 512(a) of Regulation
S-K under the 1933 Act, the Company will prepare, at its expense, such amendment
or amendments to the Registration Statement and the Prospectus as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the
1933 Act or Item 512(a) of Regulation S-K under the 1933 Act, as the case may
be.
(e)The Company will use its commercially reasonable efforts to comply with the
1933 Act so as to permit the distribution of the Shares as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act to be delivered in connection with sales of the Shares, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Manager or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act, the Company will promptly prepare and file with the Commission, subject to
Section 4(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Company will furnish to the Manager such
number of copies of such amendment or supplement as the Manager may reasonably
request.
(f)The Company will use its commercially reasonable efforts, in cooperation with
the Manager, to qualify the Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or foreign) as
the Manager may designate and to maintain such qualifications in effect for as
long as the Manager reasonably requests; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g)The Company will timely file such reports pursuant to the Exchange Act as are
necessary in order to make generally available to its securityholders as soon as
reasonably practicable an earnings statement of the Company and, to the extent
required by the Commission, of I-45 (which need not be audited), for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h)The Company will use the Net Proceeds received by it from the sale of the
Shares in the manner specified in the Prospectus under the caption “Use of
Proceeds”.
(i)The Company will use its commercially reasonable efforts to list, subject to
notice of issuance, the Shares and to effect and maintain the quotation of the
Common Stock on the Nasdaq Global Select Market.
(j)At any time during the pendency of a Placement Notice, the Company shall not
sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to sell or otherwise dispose of or agree to dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock (including without limitation, any
options, warrants or other rights to purchase Common Stock), in each case
without giving the Manager at least two (2) Trading Days’ prior written notice
specifying the nature of the proposed sale and the date of such proposed sale.
The foregoing sentence shall not apply to (i) the Shares to be offered and sold
to the Manager or any Alternative Manager pursuant to this Agreement or any
Terms Agreement, Alternative Equity Distribution Agreement or Alternative Terms
Agreement, as applicable, (ii) the issuance of any shares of Common Stock issued
by the Company upon the exercise of an option or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (iii) any
shares of Common Stock issued or options

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to purchase shares of Common Stock granted pursuant to existing dividend
reinvestment plans, direct stock purchase plans or employee benefit plans of the
Company referred to in the Prospectus, and any registration related thereto,
(iv) any shares of Common Stock issued pursuant to any non-employee director
stock plan or dividend reinvestment plan, and any registration related thereto,
(v) any shares of Common Stock issued to employees and directors pursuant to
deferred compensation programs referred to in the Prospectus, and any
registration related thereto or (vi) the issuance by the Company of any shares
of Common Stock as consideration for any strategic acquisitions. In the event
that notice of a proposed sale is provided by the Company pursuant to this
subsection (j), the Manager will suspend activity under this Agreement for such
period of time as requested by the Company or as may be deemed appropriate by
the Manager.
(k)The Company, during the term of this Agreement, will use its commercially
reasonable efforts to maintain its status as a business development company;
provided, however, the Company may cease to be, or withdraw its election as, a
business development company, with the approval of the board of directors and a
vote of stockholders as required by Section 58 of the 1940 Act or any successor
provision.
(l)The Company has qualified to be taxed as a RIC under Subchapter M of the Code
for its taxable years ended December 31, 1988 through December 31, 2018, and
will use its commercially reasonable efforts to maintain qualification as a RIC
under Subchapter M of the Code for its taxable year ending December 31, 2019 and
thereafter.
(m)The Company shall pay all expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, including (i) the
preparation and filing of the Registration Statement, the Basic Prospectus, the
Prospectus Supplement, the Prospectus and any amendments or supplements thereto,
and the printing and furnishing of copies of each thereof to the Manager
(including costs of mailing and shipment), (ii) the printing and delivery to the
Manager of this Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Shares, (iii) the issuance and delivery of the Shares to the Manager, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Shares to the Manager, (iv) the fees and
disbursements of the Company’s counsel, accountants and other advisors, (v) the
qualification of the Shares under securities laws in accordance with the
provisions of Section 4(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Manager in connection therewith and in
connection with the preparation of Blue Sky surveys (the “Blue Sky Surveys”) and
any supplement thereto, (vi) the printing and delivery to the Manager of copies
of the Prospectus and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Manager of copies of the Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Shares, (ix) the reasonable legal fees and expenses
of counsel to the Manager and any Alternative Managers in an amount not to
exceed (A) an aggregate amount of $90,000 in connection with due diligence and
the preparation of this Agreement and any Alternative Equity Distribution
Agreement in connection with the initial launch of the offering of the Shares,
which amount shall include legal fees and expenses relating to the review by
FINRA of the terms of the sale of the Shares, and thereafter, (B) $10,000 on the
first day of each calendar quarter that this Agreement is in effect in
connection with the maintenance of the offering of Shares and the Manager’s and
any Alternative Manager’s performance under this Agreement and the respective
Alternative Equity Distribution Agreements, and (x) the fees and expenses
incurred in connection with the inclusion of the Shares in the Nasdaq Global
Select Market, and (xi) the filing fees incident to the review by FINRA of the
terms of the sale of the Shares. Except as set forth herein, the Manager will
pay all of its other out-of-pocket costs and expenses incurred in connection
with entering into this Agreement and the transactions contemplated by this
Agreement, including, without limitation, travel and similar expenses, whether
or not the transactions contemplated hereby are consummated or this Agreement is
terminated.
(n)The Company shall not, at any time at or after the execution of this
Agreement, offer or sell any Shares by means of any “prospectus” (within the
meaning of the 1933 Act), or use any “prospectus” (within the meaning of the
1933 Act) in connection with the offer or sale of the Shares, in each case other
than the Prospectus and the Additional Disclosure Items.
(o)Neither the Company nor any affiliate of the Company will take, directly or
indirectly, any action designed, or which will constitute, or has constituted,
or might reasonably be expected to cause or result in (i) the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares

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or (ii) a violation of Regulation M. The Company shall notify the Manager of any
violation of Regulation M by the Company, any of its affiliates or any of their
respective officers or directors promptly after the Company has received notice
or obtained knowledge of any such violation.
(p)The Company shall advise the Manager promptly after it shall have received
notice or obtain knowledge thereof, of any information or fact that would
materially alter or affect any opinion, certificate, letter and other document
provided to the Manager pursuant to Section 5 herein.
(q)Upon commencement of the offering of the Shares under this Agreement (and
upon the recommencement of the offering of the Shares under this Agreement
following the termination of a Suspension Period (as defined below)), and each
time that (i) the Registration Statement or the Prospectus shall be amended or
supplemented (other than (A) by an amendment or supplement that is filed solely
to report sales of the Shares pursuant to this Agreement or any Alternative
Equity Distribution Agreement, (B) in connection with the filing of any Current
Reports on Form 8-K (other than any Current Reports on Form 8-K which contain
capsule financial information, financial statements, supporting schedules or
other financial data) or the incorporation of other documents by reference into
the Registration Statement or Prospectus except as set forth in clauses (ii) and
(iii) below, or (C) by a prospectus supplement relating solely to the offering
of other securities, including, without limitation, other shares of Common Stock
and any debt securities of the Company), (ii) the Company files an annual report
on Form 10-K under the Exchange Act, or an amendment thereto containing
financial information, (iii) the Company files a quarterly report on Form 10-Q
under the Exchange Act, (iv) the Shares are delivered to the Manager pursuant to
a Terms Agreement, or (v) the Manager may reasonably request (the date of
commencement of the offering of the Shares under this Agreement, the date of
commencement of the offering of the Shares under this Agreement following the
termination of a Suspension Period and each date referred to in subclauses (i)
through (v) above, each a “Representation Date”), the Company shall furnish or
cause to be furnished to the Manager forthwith certificates signed by the chief
executive officer or president and by the chief financial or chief accounting
officer of the Company, dated and delivered the Representation Date, in form
satisfactory to the Manager, to the effect that the statements contained in the
certificate referred to in Section 5(b) of this Agreement which was last
furnished to the Manager are true and correct as of such Representation Date as
though made at and as of such date (except that such certificates shall state
that such statements shall be deemed to relate to the Registration Statement and
the Prospectus, in each case as amended and supplemented to such date) or, in
lieu of such certificates, certificates of the same tenor as the certificates
referred to in said Section 5(b), modified as necessary to relate to the
Registration Statement and the Prospectus, and such other certificates as the
Manager shall reasonably request, in each case as amended and supplemented to
the time of delivery of such certificate; provided that the obligations under
this subsection (q) shall be deferred when no Placement Notice is pending or for
any period that the Company has suspended the offering of Shares pursuant to
Section 3(a)(ii) hereof (each, a “Suspension Period”) and shall recommence upon
the termination of such Suspension Period and/or the Company’s submission of a
Placement Notice to the Manager.
(r)At or promptly after each Representation Date, the Company shall furnish or
cause to be furnished forthwith to the Manager written opinions of Eversheds
Sutherland (US) LLP, counsel to the Company (“Company Counsel”), dated and
delivered as of or promptly after such Representation Date, in form and
substance reasonably satisfactory to the Manager, of the same tenor as the
opinions referred to in Section 5(d) of this Agreement, but modified as
necessary to relate to the Registration Statement and the Prospectus, in each
case as amended and supplemented to the time of delivery of such opinions;
provided that the obligation of the Company under this subsection (r) shall be
deferred when no Placement Notice is pending or for any Suspension Period and
shall recommence upon the termination of such Suspension Period and/or the
Company’s submission of a Placement Notice to the Manager.
(s)At or promptly after each Representation Date, Dechert LLP, counsel to the
Manager, shall deliver a written opinion, dated and delivered as of or promptly
after such Representation Date, in form and substance reasonably satisfactory to
the Manager; provided that the obligation under this subsection (s) shall be
deferred when no Placement Notice is pending or for any Suspension Period and
shall recommence upon the termination of such Suspension Period and/or the
Company’s submission of a Placement Notice to the Manager.
(t)Upon commencement of the offering of the Shares under this Agreement (and
upon the recommencement of the offering of the Shares under this Agreement
following the termination of a Suspension Period),

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and at or promptly after each Representation Date, the Company shall cause the
Company’s current independent accountant, RSM (US) LLP, and its former
independent accountant, Grant Thornton LLP, as applicable, or other independent
accountants satisfactory to the Manager, forthwith to furnish the Manager a
letter, dated and delivered as of or promptly after such Representation Date, in
form and substance reasonably satisfactory to the Manager, of the same tenor as
the letter referred to in Section 5(f) of this Agreement but modified to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the date of such letter; provided that the obligation of the Company under this
subsection (t) shall be deferred when no Placement Notice is pending or for any
Suspension Period and shall recommence upon the termination of such Suspension
Period and/or the Company’s submission of a Placement Notice to the Manager;
provided further that only a letter from RSM (US) LLP (or the Company’s
then-current independent registered public accountants) will be required in
connection with clause (iii) of Section 4(q).
(u)At or promptly after each Representation Date, the Company shall conduct a
due diligence session, in form and substance reasonably satisfactory to the
Manager, which shall include representatives of the management and the Company’s
current independent registered public accountants; provided that the obligation
of the Company under this subsection (u) shall be deferred when no Placement
Notice is pending or for any Suspension Period and shall recommence upon the
termination of such Suspension Period and/or the Company’s submission of a
Placement Notice to the Manager; provided further that such due diligence
session shall be requested and conducted solely by the Distribution Manager who
is then offering or selling Shares of the Company pursuant to its Distribution
Agreement for such Distribution Manager’s portion of the Maximum Amount. For the
avoidance of doubt, all Distribution Managers shall be invited by the Company to
participate in any due diligence session not requested and conducted by such
Distribution Manager. The Company shall cooperate with any reasonable due
diligence review conducted by the Manager (or its counsel or other
representatives) from time to time (on a Representation Date or otherwise) in
connection with the transactions contemplated by this Agreement, including,
without limitation, providing information and making available documents and
senior corporate officers, as the Manager may reasonably request; provided,
however, that the Company shall be required to make available documents and
senior corporate officers only (i) at the Company’s or Company Counsel’s
principal offices and (ii) during the Company’s ordinary business hours.
(v)The Company consents to the Manager trading in the Common Stock for the
Manager’s own account and for the account of its clients at the same time as
sales of the Shares occur pursuant to this Agreement.
(w)If to the knowledge of the Company, any condition set forth in Section 5(a)
or 5(j) of this Agreement shall not have been satisfied on the applicable
Settlement Date or Time of Delivery, as the case may be, the Company shall offer
to any person who has agreed to purchase the Shares from the Company as the
result of an offer to purchase solicited by the Manager the right to refuse to
purchase and pay for such Shares.
(x)The Company agrees that on such dates as the 1933 Act shall require, the
Company will file a prospectus supplement with the Commission pursuant to
Rule 497 or Rule 424 under the 1933 Act, as applicable, or otherwise include in
a filed annual report on Form 10-K or quarterly report on Form 10-Q, which
prospectus supplement, Form 10-K or Form 10-Q, as applicable, will set forth the
number of the Shares sold through or to the Manager under this Agreement, the
Net Proceeds to the Company and the compensation paid by the Company with
respect to sales of the Shares pursuant to this Agreement during the relevant
quarter.
(y)The Company agrees to ensure that prior to instructing the Manager to sell
Shares the Company shall have obtained all necessary corporate authority for the
offer and sale of such Shares.
(z)Each acceptance by the Company of an offer to purchase the Shares hereunder,
and each execution and delivery by the Company of a Terms Agreement, shall be
deemed to be an affirmation to the Manager that the representations and
warranties of the Company contained in or made pursuant to this Agreement are
true and correct as of the date of such acceptance or of such Terms Agreement as
though made at and as of such date, and an undertaking that such representations
and warranties will be true and correct as of the Settlement Date for the Shares
relating to such acceptance or as of the Time of Delivery relating to such sale,
as the case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Shares).

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Section 5.    Conditions of Manager’s Obligations. The obligations of the
Manager hereunder are subject to (i) the accuracy of the representations and
warranties on the part of the Company on the date hereof, any applicable
Representation Date, as of each Time of Sale and as of each Settlement Date and
Time of Delivery, (ii) the performance by the Company of its obligations
hereunder and (iii) to the following additional conditions precedent.
(a)(i) No stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Manager. All filings related to the offering of
the Shares with the Commission required by Rule 497 or Rule 424 under the 1933
Act, as applicable, shall have been made within the applicable time period
prescribed for such filing under the 1933 Act.
(b)The Company shall deliver to the Manager, at each Representation Date, a
certificate signed by the chief executive officer, president and the chief
financial or accounting officers of the Company to the effect that (i) the
representations and warranties of the Company as set forth in this Agreement are
true and correct as of the Representation Date, (ii) the Company performed such
of its obligations under this Agreement as are to be performed at or before such
Representation Date, and (iii) the conditions set forth in paragraphs (a) and
(b) of Section 4 have been met. Each certificate shall also state that the
Shares have been duly and validly authorized by the Company, that all corporate
action required to be taken for the issuance and sale of the Shares has been
validly and sufficiently taken, and that the Company’s board of directors or any
other body with authority has not revoked, rescinded or otherwise modified or
withdrawn such authorization or corporate action.
(c)The Company shall deliver to the Manager at each Representation Date, upon
the Manager’s reasonable request, a certificate of the chief financial officer
of the Company, dated such date.
(d)The Company shall furnish to the Manager, at each Representation Date,
opinions of Company Counsel, addressed to the Manager, and dated as of such
date, and in form and substance reasonably satisfactory to the Manager, in
substantially the form set forth in Exhibit A hereto or as otherwise
satisfactory to the Manager.
(e)The Manager shall have received, at each Representation Date, the favorable
opinion of Dechert LLP, counsel to the Manager, dated as of such date, and in
form and substance reasonably satisfactory to the Manager.
(f)At each Representation Date, the Manager shall have received from the
accountants a letter dated the date of delivery thereof and addressed to the
Manager in form and substance reasonably satisfactory to the Manager.
(g)At each Representation Date and on such other dates as reasonably requested
by the Manager, the Company shall have conducted due diligence sessions, in form
and substance reasonably satisfactory to the Manager, which shall include the
participation of representatives of the management of the Company and the
independent registered public accountants of the Company.
(h)The Shares shall have been approved for listing on the Nasdaq Global Select
Market, subject only to notice of issuance at or prior to the Settlement Date or
the Time of Delivery, as the case may be.
(i)The Common Stock shall be an “actively-traded security” excepted from the
requirements of Rule 101 of Regulation M under the Exchange Act by subsection
(c)(1) of such rule.
(j)All filings with the Commission required by Rule 497 or Rule 424 under the
1933 Act, as applicable, to have been filed by the Settlement Date or the Time
of Delivery, as the case may be, shall have been made within the applicable time
period prescribed for such filing by Rule 497 or Rule 424, as applicable.
Section 6.    Indemnification.
(a)Indemnification of the Manager by the Company. The Company agrees to
indemnify and hold harmless the Manager, its affiliates, as such term is defined
in Rule 501(b) under the 1933 Act (each, an “Affiliate”), its selling

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agents and each person, if any, who controls the Manager within the meaning of
Section 15 of the 1933 Act or Section 20 of the Exchange Act as follows:
(i)against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue statement of
a material fact included in the Prospectus (or any amendment or supplement
thereto) or any Additional Disclosure Item (when taken together with the
Prospectus), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii)against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omissions;
provided that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company;
(iii)against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Manager), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such
Manager expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto).
(b)Indemnification of Company, Directors, Officer. The Manager agrees to
indemnify and hold harmless the Company, each of its directors, officers and
Affiliates, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the Exchange Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Manager expressly for use in
the Registration Statement (or any amendment thereto), or the Prospectus (or any
amendment or supplement thereto).
(c)Actions Against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder (an “Action”), but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder to the extent
it is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by the Manager,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such Action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one Action or
separate but similar or related Actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section

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7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party. Notwithstanding anything to the contrary
herein, neither the assumption of the defense of any such Action nor the payment
of any fees or expenses related thereto shall be deemed to be an admission by
the indemnifying party that it has an obligation to indemnify any person
pursuant to this Agreement.
(d)Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement; provided that an indemnifying party shall not be liable for any such
settlement effected without its consent if such indemnifying party, prior to the
date of such settlement, (1) reimburses such indemnified party in accordance
with such request for the amount of such fees and expenses of counsel as the
indemnifying party believes in good faith to be reasonable, and (2) provides
written notice to the indemnified party that the indemnifying party disputes in
good faith the reasonableness of the unpaid balance of such fees and expenses.
(e)Acknowledgement by the Company. The Company also acknowledge and agree that
(i) the purchase and sale of any Shares pursuant to this Agreement, including
any discounts and commissions, is an arm’s-length commercial transaction between
the Company, on the one hand, and the Manager, on the other hand, (ii) in
connection with the offering of the Shares and the process leading to such
transaction the Manager will act solely as principal and not as agents or
fiduciaries of the Company or its stockholders, creditors, employees or any
other party, (iii) the Manager will not assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering of the
Shares contemplated hereby or the process leading thereto (irrespective of
whether the Manager has advised or are currently advising the Company on other
matters) and the Manager will not have any obligation to the Company with
respect to the offering except the obligations expressly set forth herein,
(iv) the Manager and its Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company, and
(v) the Manager has not provided and will not provide any legal, accounting,
regulatory or tax advice with respect to the offering of the Shares and the
Company has consulted and will consult its own legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.
Section 7.    Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Manager on the other hand from the offering of the Shares pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Manager on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the Manager on
the other hand in connection with the offering of the Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Shares pursuant to this Agreement (before
deducting expenses) received by the Company and the total compensation received
by the Manager, in each case as determined as of the date of such Action
referred to in Section 6(a) or (b), as applicable which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.

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The relative fault of the Company on the one hand and the Manager on the other
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Manager and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Manager agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Distribution Managers were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Manager shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Shares sold by it under this Agreement exceeds the amount of
any damages which such Manager has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the Manager
within the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange
Act and the Manager’s Affiliates and selling agents shall have the same rights
to contribution as such Manager, and each director of the Company, each officer
of the Company, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company.
Notwithstanding any other provision of Section 6 and this Section 7, no party
shall be entitled to indemnification or contribution under this Agreement in
violation of Section 17(i) of the 1940 Act.
Section 8.    Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made
by or on behalf of the Manager or its Affiliates or selling agents, any person
controlling the Manager, its officers or directors or any person controlling the
Company and (ii) delivery of and payment for the Shares.
Section 9.    Termination.
(a)The Company shall have the right, by giving written notice as hereinafter
specified, to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase the Shares in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that (i) if any of the Shares have been sold through the Manager
for the Company, then Section 4(z) shall remain in full force and effect,
(ii) with respect to any pending sale, through the Manager for the Company, the
obligations of the Company, including in respect of compensation of the Manager,
shall remain in full force and effect notwithstanding the termination and
(iii) the provisions of Section 4(m), Section 6, Section 7, Section 8, Section
9, Section 10, Section 11, Section 12 and Section 13 of this Agreement shall
remain in full force and effect notwithstanding such termination.
(b)The Manager shall have the right, by giving written notice as hereinafter
specified, to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase the Shares in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that the provisions of Section 4(m), Section 6, Section 7, Section
8, Section 9, Section 10, Section 11, Section 12 and Section 13 of this
Agreement shall remain in full force and effect notwithstanding such
termination.

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(c)This Agreement shall remain in full force and effect unless terminated
pursuant to Section 9(a) or Section 9(b) above or otherwise by mutual agreement
of the parties; provided that any such termination by mutual agreement shall in
all cases be deemed to provide that the provisions of Section 4(m), Section 6,
Section 7, Section 8, Section 9, Section 10, Section 11, Section 12 and Section
13 of this Agreement shall remain in full force and effect notwithstanding such
termination.
(d)Any termination of this Agreement shall be effective on the date specified in
such notice of termination; provided that such termination shall not be
effective until the close of business on the tenth Trading Day after the date of
receipt of such notice by the Manager or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date or Time of Delivery
for any sale of the Shares, such sale shall settle in accordance with the
provisions of Section 3(a)(vi) of this Agreement.
Section 10.    Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements under this Agreement shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Manager shall be directed to it at [
], Attention: [ ], with a copy to Dechert LLP, 1900 K Street N.W., Washington,
DC 20006-1110, Attention: Harry S. Pangas; and notices to the Company shall be
directed to it at 5400 Lyndon B. Johnson Freeway, Suite 1300, Dallas, TX 75240,
Attention: Michael S. Sarner, with a copy to Eversheds Sutherland (US) LLP, 700
Sixth Street, N.W., Washington, D.C. 20001-3980, Attention: Payam Siadatpour.
Section 11.    Parties. This Agreement shall each inure to the benefit of and be
binding upon the Manager and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Manager and
the Company and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and Section 7 and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Manager and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Shares from any Manager shall be deemed to be a
successor by reason merely of such purchase.
Section 12.    Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, including without
limitation Section 5-1401 of the New York General Obligations Law.
Section 13.    Submission to Jurisdiction. Except as set forth below, no claim
or action may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and both
the Manager and the Company consent to the jurisdiction of such courts and
personal service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any claim or action
arising out of or in any way relating to this Agreement is brought by any third
party against the Manager or any indemnified party. The Manager and the Company
(on its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waive all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement.
Section 14.    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
Section 15.    Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 16.    USA Patriot Act. In accordance with the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)),
the Manager is required to obtain, verify and record information that

22

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identifies their respective clients, including the Company, which information
may include the name and address of their respective clients, as well as other
information that will allow the Manager to properly identify its clients.
Section 17.    Research Independence. In addition, the Company acknowledge that
the Manager’s research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and that the Manager’s research
analysts may hold and make statements or investment recommendations and/or
publish research reports with respect to the Company and/or the offering that
differ from the views of their investment bankers. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company
may have against the Manager with respect to any conflict of interest that may
arise from the fact that the views expressed by the Manager’s independent
research analysts and research departments may be different from or inconsistent
with the views or advice communicated to the Company by the Manager’s investment
banking divisions. The Company acknowledges that the Manager is a full service
securities firm and as such from time to time, subject to applicable securities
laws, may effect transactions for its own accounts or the accounts of their
customers and hold long or short positions in debt or equity securities of the
companies that may be the subject of the transactions contemplated by this
Agreement and any Terms Agreement.
Section 18.    No Fiduciary Duty. The Company hereby acknowledges and agrees
that in connection with the sale of the Shares or any other services the Manager
may be deemed to be providing hereunder, notwithstanding any preexisting
relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the Manager:
(i) no fiduciary or agency relationship between the Company and any other
person, on the one hand, and the Manager, on the other, exists; (ii) the Manager
is not acting as advisor, expert or otherwise, to the Company, including,
without limitation, with respect to the determination of the sale price of the
Shares, and such relationship between the Company, on the one hand, and the
Manager, on the other, is entirely and solely commercial, based on arm’s-length
negotiations; (iii) any duties and obligations that the Manager may have to the
Company shall be limited to those duties and obligations specifically stated
herein; and (iv) the Manager and its affiliates may have interests that differ
from those of the Company. The Company hereby waives any claims that the Company
may have against the Manager with respect to any breach of fiduciary duty in
connection with the offering.
[Signature Pages Follow]
    

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If the foregoing correctly sets forth the understanding between the Company and
the Manager, please so indicate in the space provided below for that purpose,
whereupon this Agreement and your acceptance shall constitute a binding
agreement among the Company and the Manager.
 
Very truly yours,
 
 
 
COMPANY:
 
 
 
CAPITAL SOUTHWEST CORPORATION
 
 
 
 
 
By
 
 
 
Name:
  Michael S. Sarner
 
 
Title:
Chief Financial Officer

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ACCEPTED as of the date first above written.
MANAGER:
[ ]

By:
 
 

Name: [ ]
Title: [ ]

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Annex I
[FORM OF TERMS AGREEMENT]
Capital Southwest Corporation
[    ] Shares of Common Stock
(par value $0.25 per share)
TERMS AGREEMENT
[DATE]
[ ]
[ ]
[ ]

Ladies and Gentlemen:
Capital Southwest Corporation, a Texas corporation (the “Company”), proposes,
subject to the terms and conditions stated herein and in the Second Amended and
Restated Equity Distribution Agreement, dated [DATE] (the “Equity Distribution
Agreement”), by and between the Company and [ ] (the “Manager”), to issue and
sell to the Manager the securities specified in Schedule I hereto (the
“Purchased Securities”)[, and solely for the purpose of covering
over-allotments, to grant to the Manager the option to purchase the additional
securities specified in Schedule I hereto (the “Additional Securities”)].
[The Manager shall have the right to purchase from the Company all or a portion
of the Additional Securities as may be necessary to cover over-allotments made
in connection with the offering of the Purchased Securities, at the same
purchase price per share to be paid by the Manager to the Company for the
Purchased Securities. This option may be exercised by the Manager at any time
(but not more than once) on or before the 30th day following the date hereof, by
written notice to the Company. Such notice shall set forth the aggregate number
of Additional Securities as to which the option is being exercised, and the date
and time when the Additional Securities are to be delivered (such date and time
being herein referred to as the “Option Closing Date”); provided, however, that
the Option Closing Date shall not be earlier than the Time of Delivery (as set
forth in Schedule I hereto) nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the fifth
business day after the date on which the option shall have been exercised.
Payment of the purchase price for the Additional Securities shall be made at the
Option Closing Date in the same manner and at the same office as the payment for
the Purchased Securities.]
Each of the provisions of the Equity Distribution Agreement not specifically
related to the solicitation by the Manager, as agent of the Company, of offers
to purchase securities is incorporated herein by reference in its entirety, and
shall be deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement [and][,] the Time of Delivery [and any Option
Closing Date], except that each representation and warranty in Section 2 of the
Equity Distribution Agreement which makes reference to the Prospectus (as
therein defined) shall be deemed to be a representation and warranty as of the
date of the Equity Distribution Agreement in relation to the Prospectus, and
also a representation and warranty as of the date of this Terms Agreement [and]
[,] the Time of Delivery [and any Option Closing Date] in relation to the
Prospectus as amended and supplemented to relate to the Purchased Securities.
[An amendment to the Registration Statement (as defined in the Equity
Distribution Agreement), or a supplement to the Prospectus, as the case may be,
relating to the Purchased Securities [and the Additional Securities], in the
form heretofore delivered to the Manager is now proposed to be filed with the
Commission.]

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Subject to the terms and conditions set forth herein and in the Equity
Distribution Agreement which are incorporated herein by reference, the Company
agrees to issue and sell to the Manager and the latter agrees to purchase from
the Company the number of shares of the Purchased Securities at the time and
place and at the purchase price set forth in Schedule I hereto.
All capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in the Equity Distribution Agreement.
[The remainder of this page is intentionally left blank]

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If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this Terms Agreement, including
those provisions of the Equity Distribution Agreement incorporated herein by
reference, shall constitute a binding agreement between the Manager and the
Company.
 
Very truly yours,
 
 
 
COMPANY:
 
 
 
CAPITAL SOUTHWEST CORPORATION
 
 
 
 
 
By
 
 
 
Name:
 
 
 
Title:
 

ACCEPTED as of the date first above written
[ ]

By:
 
 
Name:
 
 
Title:
 
 

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Schedule I to the Terms Agreement
Title of Purchased Securities [and Additional Securities]:
Common Stock, par value $0.25 per share
Number of Purchased Securities:
[Number of Additional Securities:]
[Price to Public:]
Purchase Price by the Manager:
Method of and Specified Funds for Payment of Purchase Price:
By wire transfer to a bank account specified by the Company in same day funds.
Method of Delivery:
Free delivery of the Shares to the Manager’s account at The Depository Trust
Company in return for payment of the Purchase Price.
Time of Delivery:
Closing Location:
Documents to be Delivered:
The following documents referred to in the Equity Distribution Agreement shall
be delivered as a condition to closing at the time of execution of this Terms
Agreement:
(1)    The accountants’ letter referred to in Section 4(t).
(2)    The certificate referred to in Section 4(q).
The following documents referred to in the Equity Distribution Agreement shall
be delivered as a condition to closing at the Time of Delivery[ and on any
Option Closing Date]:
(1)    The officers’ certificates referred to in Section 4(q).
(2)    The opinions referred to in Section 4(r).
(3)    The opinion referred to in Section 4(s).
(4)    The accountants’ letter referred to in Section 4(t).
(5)    Such other documents as the Manager shall reasonably request.

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Schedule A
PRIOR ALTERNATIVE EQUITY DISTRIBUTION AGREEMENTS
•
Equity Distribution Agreement by and between the Company and [ ], dated March 4,
2019

•
Amended and Restated Equity Distribution Agreement by and between the Company
and [ ], dated August 20, 2019

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Schedule B
ALTERNATIVE MANAGERS
•
[ ]

•
[ ]

•
[ ]

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Schedule C
ADDITIONAL DISCLOSURE ITEMS
•
Rule 497AD filed with the Commission on February 4, 2020

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Schedule D
AUTHORIZED COMPANY REPRESENTATIVES
Bowen S. Diehl, President and Chief Executive Officer
Michael S. Sarner, Chief Financial Officer, Chief Compliance Officer, Secretary
and Treasurer

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Exhibit A
FORM OF OPINION OF EVERSHEDS SUTHERLAND (US) LLP