EXHIBIT 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the “Amendment”) is entered into as of
May 19, 2006, by and among ALLIED CAPITAL CORPORATION, a corporation organized
under the laws of the State of Maryland (“Borrower”) and BANK OF AMERICA, N.A.,
as Administrative Agent (in such capacity, the “Administrative Agent”) for the
Lenders under the Credit Agreement (hereinafter defined) and the Increasing
Lenders (hereinafter defined).

R E C I T A L S

A. Borrower, Administrative Agent, and certain other Agents and Lenders are
parties to that certain Credit Agreement dated as of September 30, 2005, as
amended by that certain First Amendment to Credit Agreement dated as of
November 4, 2005 and that certain Second Amendment to Credit Agreement dated as
of May 11, 2006 (the “Credit Agreement”). Unless otherwise indicated herein, all
terms used with their initial letter capitalized are used herein with their
meaning as defined in the Credit Agreement; all Section references are to
Sections in the Credit Agreement; and all Paragraph references are to Paragraphs
in this Amendment.

B. Pursuant to and in accordance with Section 2.13, Borrower has requested that
the aggregate Commitments under the Credit Agreement be increased up to
$922,500,000.

C. Subject to and upon the following terms and conditions, (i) certain of the
Lenders party to the Credit Agreement immediately prior to giving effect to this
Amendment (as more particularly described on Part I of Annex A, the “Increasing
Existing Lenders”) have agreed to increase their respective commitments to the
amounts set forth opposite each Increasing Existing Lender’s name on Annex B and
(ii) each financial institution listed on Part II of Annex A (the “New Lenders”)
has agreed to become a Lender under the Credit Agreement with the respective
commitments set forth opposite each such institution’s name on Annex B
(collectively, with the increased commitments described in clause (i) preceding,
the “Supplemental Commitments”). The Increasing Existing Lenders and the New
Lenders are collectively referred to herein as the “Increasing Lenders”.

D. Subject to and upon the following terms and conditions, each of the
Increasing Lenders has agreed to its Supplemental Commitment, and Administrative
Agent has agreed to the addition of each of the New Lenders as a Lender.

E. Accordingly, in accordance with the requirements of Sections 2.13 and 12.5 of
the Credit Agreement and subject to and upon the following terms and conditions,
Borrower, Administrative Agent, and the Increasing Lenders are entering into
this Amendment (i) to add each of the New Lenders as a “Lender” with its
respective Supplemental Commitment, pursuant to Section 2.13 of the Credit
Agreement and (ii) to amend Schedule 2 to the Credit Agreement to reflect the
Supplemental Commitments of the Increasing Lenders.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Borrower, Administrative Agent, and the Increasing Lenders agree, as follows:

PARAGRAPH 1 . AMENDMENTS TO CREDIT AGREEMENT.

1.1 Supplemental Commitments and Consent to New Lenders.

(a) Pursuant to Section 2.13, effective on and after the Third Amendment
Effective Date (hereinafter defined), (i) each New Lender agrees to be a Lender
having the Commitment set forth opposite its name on Annex B and (ii) each
Increasing Existing Lender agrees to increase its Commitment to the amount set
forth opposite its name on Annex B. Accordingly, on and after the Third
Amendment Effective Date (hereinafter defined), (i) each reference to “Lender”
or “Lenders” in the Credit Agreement and the related Loan Documents shall
include each of the New Lenders; (ii) each reference to Schedule 2 shall be to
the Schedule 2 as set forth on Annex B, as the same may hereafter be amended or
modified in accordance with the Loan Documents; (iii) each Lender’s Commitment
Percentage (and to the extent any Letters of Credit are issued and outstanding
on such date, all participations by Lenders in the LC Subfacility) shall be
recalculated to reflect the new proportionate share of the revised total
Commitments as stated on Annex B; and (iv) each New Lender and each Increasing
Existing Lender shall be deemed irrevocably and unconditionally to have
purchased, without recourse or warranty, an undivided interest and participation
in each Letter of Credit in an amount equal to its Commitment Percentage as
stated on Annex B.

(b) Borrower shall prepay all Revolving Loans and Swing Line Loans outstanding
on the Third Amendment Effective Date (and pay any additional amounts required
to be paid to any Lender pursuant to Section 4.5, unless waived by such Lender)
to the extent necessary to keep the Revolving Loans ratable with the revised
Commitment Percentages arising from the non-ratable increase in the aggregate
Commitments pursuant to this Paragraph 1.1.

(c) On the Third Amendment Effective Date, each New Lender shall be entitled to
the rights and benefits and subject to the duties of a Lender under the Loan
Documents.

(d) By execution hereof, Administrative Agent and Borrower consent to the
addition of each of the New Lenders as a “Lender” under the Loan Documents.

1.2 Confirmations and Agreements of the Increasing Lenders. Each Increasing
Lender (a) confirms that it has received a copy of the Credit Agreement,
together with copies of the consolidated balance sheets of Borrower and its
Consolidated Subsidiaries most recently delivered under the Credit Agreement and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Amendment, including,
without limitation, the transaction contemplated in this Paragraph 1; and
(b) agrees that it will, independently and without reliance upon the
Administrative Agent or any Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement.
Furthermore, each New Lender (i) appoints and authorizes Administrative Agent to
take such action as “Administrative Agent” on its behalf and to exercise such
powers and discretion under the Credit Agreement as are delegated to
Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (ii) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender; and
(iii) shall deliver to Borrower and Administrative Agent any U.S. Internal
Revenue Service or other forms required under Section 4.6 of the Credit
Agreement.

1.3 Noteless Transaction. If requested by any Increasing Lender pursuant to
Section 2.11(b) of the Credit Agreement, Borrower shall execute and deliver to
such Increasing Lender a Revolving Note reflecting the Commitment of such
Increasing Lender, after giving effect to the Supplemental Commitments
contemplated and effected in accordance with Paragraph 1.1.

PARAGRAPH 2. THIRD AMENDMENT EFFECTIVE DATE. This Amendment shall be binding
upon the Administrative Agent, Borrower, the Increasing Lenders, and each other
Lender on the last day (the “Third Amendment Effective Date”) upon which
(a) counterparts of this Amendment shall have been executed and delivered to
Administrative Agent by Borrower, Administrative Agent, and the Increasing
Lenders, or when Administrative Agent shall have received, telecopied, telexed,
or other evidence satisfactory to it that all such parties have executed and are
delivering to Administrative Agent counterparts thereof; (b) the Revolving Notes
(if any have been previously been requested by the Increasing Lenders) are
executed by Borrower and delivered in accordance with Paragraph 1.3 hereof;
(c) Borrower shall have paid to Administrative Agent (for distribution to the
Increasing Lenders) the upfront fee payable to each of the Increasing Lenders in
the respective amounts set forth as the “Third Amendment Upfront Fee” on Annex B
for each Increasing Lender; (d) Borrower shall have repaid all outstanding
Loans, to the extent any such Loans are outstanding (without giving effect to
any Loans made after the effectiveness of this Amendment); (e) Borrower shall
have delivered to Administrative Agent copies (certified by the Secretary or
Assistant Secretary of Borrower) of all corporate action taken by Borrower to
authorize the execution, delivery, and performance of this Amendment, and any
related Debt incurrence; and (f) Borrower shall have delivered to Administrative
Agent an opinion of Sutherland Asbill & Brennan LLP, counsel to Borrower,
addressed to Administrative Agent and Lenders, in form and substance reasonably
acceptable to Administrative Agent.

PARAGRAPH 3. REPRESENTATIONS AND WARRANTIES. As a material inducement to the
Increasing Lenders, the other Lenders, and Administrative Agent to execute and
deliver this Amendment, Borrower hereby represents and warrants to the
Increasing Lenders, the other Lenders, and Administrative Agent (with the
knowledge and intent that such parties are relying upon the same in entering
into this Amendment) the following: (a) the representations and warranties in
the Credit Agreement and in all other Loan Documents are true and correct on the
date hereof in all material respects, as though made on the date hereof, except
to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall have
been true and accurate as of such earlier date); (b) no Default or Event of
Default exists under the Loan Documents or will exist after giving effect to the
transactions contemplated by this Amendment; (c) Borrower has the right and
power, and has taken all necessary action to authorize it to borrow under the
Credit Agreement, as further amended by this Amendment (the “Amended Facility”);
(d) Borrower has the right and power, and has taken all necessary action to
authorize it to execute, deliver, and perform this Amendment in accordance with
its terms and to consummate the transaction contemplated hereby; (e) this
Amendment has been duly executed and delivered by the duly authorized officers
of Borrower, and is a legal, valid, and binding obligation of Borrower,
enforceable against it in accordance with its terms; and (f) the execution,
delivery and performance of this Amendment in accordance with its terms, and the
borrowings under the Amended Facility do not and will not, by the passage of
time, the giving of notice, or otherwise: (i) require any Governmental Approval,
other than such as have been obtained and are in full force and effect, or
violate any Applicable Law (including all Environmental Laws) relating to
Borrower or any Subsidiary; (ii) conflict with, result in a breach of, or
constitute a default under the articles of incorporation or the bylaws of
Borrower or the organizational documents of any Subsidiary, or any indenture,
agreement, or other instrument to which Borrower or any Subsidiary is a party or
by which it or any of its respective properties may be bound; or (iii) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by Borrower or any Subsidiary.

PARAGRAPH 4. MISCELLANEOUS.

4.1 Effect on Loan Documents. The Credit Agreement and all related Loan
Documents shall remain unchanged and in full force and effect, except as
provided in this Amendment, and are hereby ratified and confirmed. On and after
the Third Amendment Effective Date, all references to the “Credit Agreement” or
the “Agreement” shall be to the Credit Agreement as herein amended. The
execution, delivery, and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any rights of the Lenders
under the Credit Agreement or any Loan Documents, nor constitute a waiver under
the Credit Agreement or any other provision of the Loan Documents.

4.2 Reference to Miscellaneous Provisions. This Amendment and the other
documents delivered pursuant to this Amendment are part of the Loan Documents
referred to in the Credit Agreement, and the provisions relating to Loan
Documents set forth in Section 12 of the Credit Agreement are incorporated
herein by reference the same as if set forth herein verbatim.

4.3 Costs and Expenses. Borrower agrees to pay promptly the reasonable fees and
expenses of counsel to Administrative Agent for services rendered in connection
with the preparation, negotiation, reproduction, execution, and delivery of this
Amendment.

4.4 Counterparts. This Amendment may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes, and
all of which constitute, collectively, one agreement; but, in making proof of
this Amendment, it shall not be necessary to produce or account for more than
one such counterpart. It is not necessary that all parties execute the same
counterpart so long as identical counterparts are executed by Borrower,
Administrative Agent, the Increasing Lenders, and Requisite Lenders.

4.5 Entirety. this written agreement represents the final agreement among the
parties and may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreement of the parties. There are no unwritten oral agreements
among the parties.

4.6 Parties. This Amendment binds and inures to Borrower, Administrative Agent,
the Increasing Lenders, the other Lenders, and their respective successors and
assigns.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment in multiple
counterparts as of the respective dates indicated on each signature page hereof,
but effective as of the Third Amendment Effective Date.

Remainder of this page intentionally blank.
Signature page to follow.

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Signature Page to that certain Third Amendment to Credit Agreement and Waiver
dated as of the date first stated above, amending that certain Credit Agreement
dated as of September 30, 2005, as amended and modified to date.

 
 
ALLIED CAPITAL CORPORATION,
as Borrower
By: /s/ Kelly A. Anderson
 
Kelly A. Anderson, Executive Vice President and Treasurer
BANK OF AMERICA, N.A., as Administrative Agent
By: /s/ Alexa B. Bradford
 
Alexa B. Bradford, Senior Vice President
 
BANK LEUMI USA, as a Lender
By: /s/ John Koenigsberg John Koenigsberg, First Vice President
 
By: /s/ Iris Steinhardt
 
Iris Steinhardt, Vice President
BRANCH BANKING AND TRUST COMPANY, as a Lender
By: /s/ James E. Davis
 
James E. Davis, Senior Vice President
 
FORTIS CAPITAL CORP, as a Lender
By: /s/ Douglas Riahi
 
Douglas Riahi, Managing Director
By: /s/ Trond Rokholt
 
Trond Rokholt, Managing Director
JPMORGAN CHASE BANK, N.A., as a Lender
By: /s/ Richard J. Poworoznek
 
Richard J. Poworoznek, Vice President
 
MERRILL LYNCH BANK USA, as a Lender
By: /s/ Louis Alder
 
Louis Alder, Director
MIZUHO CORPORATE BANK, LTD., as a Lender
By: /s/ Robert Gallagher
 
Robert Gallagher, Senior Vice President
 
NORTH FORK BANK, as a Lender
By: /s/ Kevin Brown
 
Kevin Brown, Senior Vice President
SOVEREIGN BANK, as a Lender
By: /s/ Robert M. Leach
 
Robert M. Leach, Senior Vice President
 
SUNTRUST BANK, as a Lender
By: /s/ David W. Penter
 
David W. Penter, Managing Director
 

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