Exhibit 10.2

 

May 23, 2016

 

Ares Capital Corporation

245 Park Avenue, 44th Floor

New York, NY 10167

 

Re:                             Transaction Support; Fee Waiver

 

This letter is with reference to (a) the Restated Investment Advisory and
Management Agreement, dated as of June 6, 2011 (the “Advisory Agreement”),
between Ares Capital Corporation, a Maryland corporation (“ARCC”) and Ares
Capital Management LLC, a Delaware limited liability company (“ACM”), and
(b) the Agreement and Plan of Merger, dated as of the date hereof (the “Merger
Agreement”), by and among ARCC, Orion Acquisition Sub, Inc., a Delaware
corporation (“Acquisition Sub”), American Capital, Ltd., Delaware corporation
(the “Company”), Ivy Hill Asset Management, L.P., a Delaware limited
partnership, Ivy Hill Asset Management GP, LLC, a Delaware limited liability
company, in its capacity as general partner of Ivy Hill Asset Management, L.P.,
American Capital Asset Management, LLC, a Delaware limited liability company,
and, solely for purposes of Section 2.2(a)(ii)(B), Section 2.3(a)(iii),
Section 4.29, Section 4.30, Section 7.4 and Article VIII, ACM, in its capacity
as investment adviser to ARCC under the Advisory Agreement.  Capitalized terms
used but not defined herein have the meanings ascribed to them in the Merger
Agreement.

 

1.                                      In reference to the foregoing, ARCC and
ACM, as ARCC’s investment adviser, agree that:

 

(a)                                 Transaction Support.  At or prior to the
Adviser Merger Effective Time, ACM shall deposit, or cause to be deposited, with
the Exchange Agent cash in an amount necessary to pay the Parent External
Adviser Cash Consideration in accordance with the terms and conditions set forth
in the Merger Agreement and, following the Adviser Merger Effective Time, the
Exchange Agent shall pay the Parent External Adviser Cash Consideration in
accordance with such terms and conditions. Nothing in this letter shall be
deemed to limit ACM’s obligations under Sections 2.2(a)(ii)(B) or 2.3(a)(iii) of
the Merger Agreement.

 

(b)                                 Fee Waiver.  If, and only if, the Mergers
are consummated in accordance with the terms and conditions set forth in the
Merger Agreement, ACM will waive, for each of the first ten (10) calendar
quarters beginning with the first full calendar quarter following the Company
Merger Effective Time, the lesser of (x) $10 million of Part I Fees and (y) the
amount of Part I Fees for such quarter, in each case as earned and payable to
ACM in such quarter (as calculated under the Advisory Agreement).  For the
avoidance of doubt, (1) the total amount of fees waived by ACM pursuant to this
Section 1(b) shall not exceed (x) $100 million in the aggregate or (y) $10
million in any calendar quarter and (2) ACM will not be required to contribute
any cash amounts to ARCC with respect to any Part I Fees. “Part I Fees” means
the Incentive Fees (as defined in the Advisory Agreement) with respect to the
Corporation’s Pre-Incentive Fee net investment income (as defined in the
Advisory Agreement).

 

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2.                                      Indemnification.  The parties
acknowledge that the indemnification and other provisions of Section 8 of the
Advisory Agreement apply with respect to ACM’s involvement in the transactions
contemplated by the Merger Agreement and the transactions contemplated by this
letter; provided that ACM shall not be entitled to indemnification pursuant to
Section 8 of the Advisory Agreement for any liability of ARCC or ACM that is
finally, judicially determined to have arisen solely out of the breach by ACM of
its obligations under this letter or the Merger Agreement; provided further
that, if ACM and ARCC are both alleged or judicially determined to have breached
the Merger Agreement, ACM shall be entitled to indemnification in connection
with any actions, suits, investigations or proceedings relating thereto.

 

3.                                      Parties in Interest; No Third-Party
Beneficiaries.  This letter is for the sole benefit of the parties hereto and is
not intended to and shall not confer upon any Person other than the parties
hereto any rights or remedies hereunder.

 

4.                                      Amendments of this Agreement. This
letter may not be amended or modified except (i) by an instrument in writing
signed by all parties hereto and (ii) with the unanimous approval of the
independent directors of the Board of Directors of ARCC.

 

5.                                      Governing Law.  This letter shall be
governed by, and construed in accordance with, the laws of the State of New
York, including without limitation Sections 5-1401 and 5-1402 of the New York
General Obligations Law and New York Civil Practice Laws and Rules 327(b), and
the applicable provisions of the Investment Company Act, if any.  To the extent
that the applicable laws of the State of New York, or any of the provisions
herein, conflict with the applicable provisions of the Investment Company Act,
if any, the latter shall control.  The parties unconditionally and irrevocably
consent to the exclusive jurisdiction of the courts located in the State of New
York and waive any objection with respect thereto, for the purpose of any
action, suit or proceeding arising out of or relating to this letter or the
transactions contemplated hereby.

 

6.                                      Severability.  If any term or other
provision of this letter is invalid, illegal or incapable of being enforced by
any law or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.

 

7.                                      Headings.  The descriptive headings
contained in this letter are for convenience of reference only and shall not
affect in any way the meaning or interpretation of this letter.

 

8.                                      Counterparts.  This letter may be
executed in one or more counterparts, each of which when executed shall be
deemed to be an original instrument and all of which taken together shall
constitute one and the same agreement.

 

9.                                      Entire Agreement.  This letter
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both written
and oral, between the parties with respect to such subject matter provided that
nothing herein shall be deemed to supersede or modify any provisions in the
Advisory Agreement.

 

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[Remainder of Page Left Intentionally Blank]

 

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Sincerely,

 

 

 

ARES CAPITAL MANAGEMENT LLC

 

 

 

 

 

/s/ Michael Weiner

 

Name: Michael Weiner

 

Title:   Authorized Signatory

 

 

ACKNOWLEDGED AND AGREED TO:

 

 

 

 

 

ARES CAPITAL CORPORATION

 

 

 

 

 

/s/ R. Kipp deVeer

 

Name: R. Kipp deVeer

 

Title:  Chief Executive Officer

 

 

[Signature Page to Fee Waiver Letter]

 

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