Exhibit 10.1

7,500,000 Shares

Common Stock

($.001 Par Value Per Share)

UNDERWRITING AGREEMENT

June 16, 2010

Citigroup Global Markets Inc.

388 Greenwich Street, 35th Floor

New York, NY 10013

Merrill Lynch, Pierce, Fenner & Smith

            Incorporated

One Bryant Park

New York, NY 10036

Credit Suisse Securities (USA) LLC

11 Madison Avenue

New York, NY 10010

UBS Securities LLC

299 Park Avenue

New York, NY 10171

As representatives (the “Representatives”) of the several Underwriters

        named in Schedule A hereto

Ladies and Gentlemen:

BlackRock Kelso Capital Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell an aggregate of 7,500,000 shares (the “Firm Shares”)
of common stock, $.001 par value per share (the “Common Stock”), of the Company.
It is understood that, subject to the conditions hereinafter stated, the Firm
Shares will be sold by the Company to the several Underwriters named in Schedule
A hereto (the “Underwriters”) in connection with the offer and sale of such Firm
Shares. Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Credit Suisse Securities (USA) LLC and UBS Securities LLC shall
act as representatives of the Underwriters (the “Representatives”).

In addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 1,125,000 shares of Common Stock (the “Additional Shares”). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the “Shares.” The Shares are described in the Prospectus which is
referred to below.

The Company has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (collectively, the
“Act”), with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form N-2 (File No. 333-148638) relating to the offer
and sale of $1,000,000,000 in aggregate offering price of Common Stock,
including the Shares, and other securities as described therein. The
registration statement, as it may have heretofore been amended at the time it
became effective or any amendment became effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430C under the Act, is hereinafter referred to as
the “Registration Statement;” the preliminary prospectus, dated as of May 5,
2010, included in the Registration Statement at the time it became effective on
May 5, 2010 (including the information, if any, deemed to be part of the

 

1

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

Registration Statement at the time of effectiveness pursuant to Rule 430C and
Rule 497 under the Act) is hereinafter referred to as the “Base Prospectus;” the
preliminary prospectus supplement to the Base Prospectus dated June 16, 2010,
filed with the Commission pursuant to Rule 497, is hereinafter referred to as
the “Pre-Pricing Prospectus Supplement” (together with the Base Prospectus as so
supplemented, the “Pre-Pricing Prospectus”); the prospectus supplement to the
Base Prospectus to be filed with the Commission pursuant to Rule 497 after the
Execution Time (as defined below) and to be used to confirm sales of Shares is
hereinafter referred to as the “Prospectus Supplement” (together with the Base
Prospectus as so supplemented, the “Prospectus”). 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 Act (File No. 814-00712) (the
“Notification of Election”) was filed with the Commission on July 22, 2005 under
the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder (collectively, the “Investment Company Act”). As used herein,
“business day” shall mean a day on which the Nasdaq Global Select Market is open
for trading.

The Company has entered into an investment advisory and management agreement,
dated as of July 25, 2005, as amended on April 27, 2007, June 22, 2007 and
June 22, 2008 (the “Investment Management Agreement”), with BlackRock Kelso
Capital Advisors LLC, a Delaware limited liability company registered as an
investment adviser (the “Adviser”) under the Investment Advisers Act of 1940, as
amended, and the rules and regulations thereunder (collectively, the “Advisers
Act”).

The Company has entered into an administration agreement, dated as of August 4,
2005 (the “Administration Agreement”), with BlackRock Financial Management,
Inc., a Delaware corporation (the “Administrator”).

The Company, the Adviser and the Underwriters agree as follows:

1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A
attached hereto, subject to adjustment in accordance with Section 9 hereof, in
each case at a purchase price of $9.78875 per Share.

In addition, the Company hereby grants to the several Underwriters the option to
purchase, and upon the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Underwriters shall have the
right to purchase, severally and not jointly, from the Company, ratably in
accordance with the number of Firm Shares to be purchased by each of them, all
or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by the Representatives on behalf
of the several Underwriters at any time on or before the 30th day following the
date of the Prospectus, by written notice to the Company. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to be delivered
(such date and time being herein referred to as the “additional time of
purchase”); provided, however, that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor, following the time of
purchase, earlier than the second business day after the date on which the
option shall have been exercised nor later than the tenth business day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares),
subject to adjustment in accordance with Section 9 hereof.

2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall
be made to the Company by Federal Funds wire transfer, against delivery of the
certificates for the Firm Shares to you through the facilities of The Depository
Trust Company (“DTC”) for the respective accounts of the Underwriters. Such
payment and delivery shall be made at 10:00 A.M., New York City time, on
June 22, 2010 (unless another time shall be agreed to by you and the Company or
unless postponed in accordance with the provisions of Section 9 hereof). The
time at which such payment and delivery are to be made is hereinafter sometimes
called “the time of purchase.” Electronic transfer of the Firm Shares shall be
made to you at the time of purchase in such names and in such denominations as
you shall specify.

 

2

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

Payment of the purchase price for the Additional Shares shall be made at the
additional time of purchase, if any, in the same manner and at the same office
as the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.

Deliveries of the documents described in Section 7 hereof with respect to the
purchase of the Shares shall be made at the offices of Sutherland Asbill &
Brennan LLP, 1275 Pennsylvania Avenue, N.W., Washington, D.C. 20004 at
9:00 A.M., New York City time, on the date of the closing of the purchase of the
Firm Shares or the Additional Shares, as the case may be.

3. Representations and Warranties of the Company. The Company represents and
warrants to and agrees with each of the Underwriters, and the Adviser represents
and warrants to and agrees with each of the Underwriters that:

(a) the Registration Statement has been declared effective under the Act; no
stop order of the Commission preventing or suspending the use of the Pre-Pricing
Prospectus or the Prospectus or the effectiveness of the Registration Statement
has been issued and no proceedings for such purpose have been instituted or, to
the Company’s knowledge, are contemplated by the Commission; the Pre-Pricing
Prospectus, together with the price to the public, the number of Firm Shares and
the number of Additional Shares to be included on the cover page of the
Prospectus (the “Pricing Information”), as of the date and time that this
Agreement is executed and delivered by the parties hereto (the “Execution
Time”), did not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; the Registration
Statement complied when it became effective, and complies and will comply, when
the Prospectus is first filed in accordance with Rule 497 and at the time of
purchase and the additional time of purchase, if any, in all material respects
with the requirements of the Act and the Prospectus (and any supplements
thereto) will comply when first filed in accordance with Rule 497 and at the
time of purchase and the additional time of purchase, if any, in all material
respects with the requirements of the Act, and any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement, the Pre-Pricing Prospectus or the Prospectus or to be
filed as exhibits to the Registration Statement have been and will be so
described or filed; the Company is eligible to use Form N-2; the Registration
Statement did not, when it became effective, does not and will not, when the
Prospectus is first filed in accordance with Rule 497 and at the time of
purchase and any additional time of purchase, 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 statements therein not misleading and the Prospectus (and
any supplements thereto) will not contain when first filed in accordance with
Rule 497 and at the time of purchase and the additional time of purchase, if
any, an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or representation with respect to
any statement contained in the Pre-Pricing Prospectus, the Registration
Statement or the Prospectus in reliance upon and in conformity with information
concerning an Underwriter and furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in the Pre-Pricing
Prospectus, the Registration Statement or the Prospectus; and the Company has
not distributed and will not distribute any offering material in connection with
the offering or sale of the Shares other than the Registration Statement, the
Pre-Pricing Prospectus, the Prospectus and any press releases relating to the
offering required to be filed pursuant to Rule 482(h) under the Act. No
statement of material fact included in the Prospectus has been omitted from the
Pre-Pricing Prospectus taken together with the Pricing Information and no
statement of material fact included in the Pre-Pricing Prospectus taken together
with the Pricing Information that is required to be included in the Prospectus
will be omitted therefrom;

(b) as of the dates indicated in the Pre-Pricing Prospectus and the Prospectus,
the Company had an authorized and outstanding capitalization as set forth under
the heading “Actual” in the section of the Pre-Pricing Prospectus and the
Prospectus entitled “Capitalization” and, if the time of purchase and the
additional time of purchase had occurred as of the dates indicated in the
Pre-Pricing Prospectus and the Prospectus, the Company would have had an
authorized and outstanding capitalization as set forth under the heading “As
Adjusted” in the section of the Prospectus entitled “Capitalization” (subject,
in the case of the time of purchase and in the event that the time of purchase
and the additional time of purchase occur concurrently, to the issuance of the
Additional Shares, and subject, in the case of the additional time of purchase,
to the issuance of the Additional Shares); all of the issued and outstanding
shares of capital stock, including the Common Stock, of the Company have been
duly authorized and validly issued and are fully paid and non-assessable, have
been issued in compliance with all federal and state securities laws and were
not issued in violation of any preemptive right or right of first refusal;

 

3

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

(c) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Pre-Pricing Prospectus, the Prospectus
and the Registration Statement, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;

(d) the Company is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified or to be in good standing would not,
individually or in the aggregate, have a material adverse effect on the
business, financial condition, results of operation or prospects of the Company
(a “Material Adverse Effect”);

(e) the Company has no subsidiaries other than BKC ARS Blocker, Inc., BKC ASW
Blocker, Inc., BKC DVSH Blocker, Inc., BKC MTCH Blocker, Inc. and BKC CSP
Blocker, Inc.; except as disclosed in the Pre-Pricing Prospectus, the Prospectus
and the Registration Statement, 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 have any equity interest in any firm, partnership, joint
venture, association or other entity except for investments that either appear
or will appear in the Company’s Schedule of Investments as presented in the
Company’s financial statements; complete and correct copies of the articles of
incorporation and bylaws of the Company, and all amendments thereto through the
date hereof, have been delivered to you.

(f) the Shares have been duly and validly authorized and, when issued and
delivered against payment therefor by you as provided herein, will be duly and
validly issued, fully paid and non-assessable and free of statutory and
contractual preemptive rights or rights of first refusal;

(g) the capital stock of the Company, including the Shares, conforms in all
material respects to the description thereof contained in the Prospectus and the
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders;

(h) this Agreement, the Investment Management Agreement and the Administration
Agreement have been duly authorized, executed and delivered by the Company, and,
assuming due authorization, execution and delivery by the other parties hereto
and thereto, constitute valid and legally binding agreements of the Company
enforceable in accordance with their respective terms, except as (i) the
enforceability thereof may be limited by bankruptcy, reorganization, insolvency,
moratorium (including, without limitation, all laws relating to fraudulent
transfers) or similar laws now or thereafter in effect affecting creditors’
rights generally and (ii) rights to indemnification and contribution may be
limited by equitable principles of general applicability whether in a proceeding
of equity or in law or by state or federal securities laws or the policies
underlying such laws;

(i) The Company is not in breach or violation of or in default under (nor has
any event occurred which with notice, lapse of time or both would reasonably be
expected to result in any breach or violation of, constitute a default under or
give the holder of any indebtedness (or a person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a part of
such indebtedness under) (i) its charter, by-laws, certificate of formation, or
other organizational documents of the Company or the Adviser, as applicable, or
(ii) any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company is a party, except, with respect to
clause (ii), to the extent that such contravention would not have a Material
Adverse Effect and would not adversely affect the consummation of the
transactions contemplated hereby, and the execution, delivery and performance by
the Company of this Agreement, the Investment Management Agreement and
Administration Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any breach or violation of or constitute a default
under (nor constitute any event which with notice, lapse of time or both would
result in any breach or violation of or constitute a default under) (i) the
charter or by-laws of the Company, or (ii) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Company
is a party, or (iii) any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company, except, with
respect to clauses (ii) and (iii), to the extent that such contravention would
not have a Material Adverse Effect and would not adversely affect the
consummation of the transactions contemplated hereby;

 

4

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

(j) no approval, authorization, consent or order of or filing with any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transactions contemplated
hereby other than registration of the Shares under the Act, which has been
effected, and any necessary qualification under the securities or blue sky laws
of the various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the Financial Industry
Regulatory Authority (“FINRA”);

(k) except as set forth in the Registration Statement, the Pre-Pricing
Prospectus and the Prospectus, (i) no person has the right, contractual or
otherwise, to cause the Company to issue or sell to it any shares of Common
Stock or shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights or rights of first refusal to
purchase any shares of Common Stock or shares of any other capital stock or
other equity interests of the Company, and (iii) no person has the right to act
as an underwriter or as a financial advisor to the Company in connection with
the offer and sale of the Shares, in the case of each of the foregoing clauses
(i), (ii) and (iii), whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise; no person has the right, contractual or otherwise, to cause the
Company to register under the Act any shares of Common Stock or shares of any
other capital stock or other equity interests of the Company, or to include any
such shares or interests in the Registration Statement or the offering
contemplated thereby;

(l) the Company has all necessary licenses, authorizations, consents and
approvals (collectively, the “Consents”) and has made all necessary filings
required under any federal, state, local or foreign law, regulation or rule, and
has obtained all necessary authorizations, consents and approvals from other
persons, in order to conduct its business, except where the failure to make such
filing or to obtain such consent would not have a Material Adverse Effect; the
Company is not in violation of, or in default under, or has received notice of
any proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company,
except where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;

(m) all legal proceedings and governmental proceedings known to the Company,
affiliate transactions, contracts, licenses, agreements, leases or documents of
a character required to be described in the Pre-Pricing Prospectus and the
Prospectus or to be filed as an exhibit to the Registration Statement have been
so described or filed as required;

(n) there are no actions, suits, claims, investigations or proceedings pending
or, to the Company’s knowledge, threatened to which the Company, or any of its
directors or officers is or would be a party or of which any of its properties
is or would be subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, except any such action, suit, claim, investigation or proceeding
which would not result in a judgment, decree or order having, individually or in
the aggregate, a Material Adverse Effect or preventing consummation of the
transactions contemplated hereby;

(o) Deloitte & Touche LLP, who has audited the annual financial statements of
the Company included in the Prospectus, is an independent registered public
accounting firm as required by the Act;

(p) the financial statements of the Company included in the Pre-Pricing
Prospectus, the Prospectus and the Registration Statement, together with the
related notes, present fairly the financial position and results of operations
of the Company as of the dates indicated and for the indicated periods; such
financial statements have been prepared in accordance with United States
generally accepted accounting principles, consistently applied throughout the
periods presented except as noted in the notes thereon, and all adjustments
necessary for a fair presentation of results for such periods have been made;
and the selected financial information included in the Registration Statement,
Pre-Pricing Prospectus and Prospectus presents fairly the information shown
therein and has been compiled on a basis consistent with the financial
statements presented therein; there are no financial statements that are
required to be included in the Pre-Pricing Prospectus, the Prospectus and the
Registration Statement that are not included as required; the Company does not
have any material liabilities or obligations (other than a draw down on the
Company’s credit facility), direct or contingent (including any off-balance
sheet obligations), not disclosed in the Pre-Pricing Prospectus, the Prospectus
and the Registration Statement; and all disclosures contained in the Pre-Pricing
Prospectus, the Prospectus and the Registration Statement regarding “non-GAAP
financial measures” (as

 

5

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

such term is defined by the rules and regulations of the Commission), if any,
comply in all material respects with Regulation G of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder (collectively, the
“Exchange Act”) and Item 10 of Regulation S-K under the Act, to the extent
applicable;

(q) subsequent to the date of the Pre-Pricing Prospectus and the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement) and for so long as the delivery of a prospectus is required in
connection with the offering or sale of Shares prior to the time of purchase,
there has not been (i) any Material Adverse Effect, or any development involving
a prospective Material Adverse Effect, (ii) any transaction which is material to
the Company, (iii) any obligation, direct or contingent (including any
off-balance sheet obligations), incurred by the Company, which is material to
the Company; (iv) any material change in the capital stock or outstanding
indebtedness of the Company (other than repayments or draw down on the Company’s
credit facility); or (v) any dividend of any kind declared, paid, or made on the
capital stock of the Company;

(r) the Company has obtained for the benefit of the Underwriters the agreement
(a “Lock-Up Agreement”), in the form set forth as Exhibit A hereto, of each of
the persons and entities named in Exhibit A-1 hereto;

(s) the Company is not and, after giving effect to the offering and sale of the
Shares, will not be a “registered management investment company” or an entity
“controlled” by a “registered management investment company,” as such terms are
used under the Investment Company Act;

(t) when the Notification of 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 Investment
Company Act and (ii) did not include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading;

(u) the Company owns, or has obtained valid and enforceable licenses for, or
other rights to use, the trademarks (both registered and unregistered),
tradenames and other proprietary information described in the Registration
Statement, the Pre-Pricing Prospectus and the Prospectus as being licensed by it
or which are necessary for the conduct of its businesses (collectively,
“Intellectual Property”), except where the failure to own, license or have such
rights would not, individually or in the aggregate, have a Material Adverse
Effect; the Company has not received notice and is not otherwise aware of any
infringement of, or conflict with, asserted rights of third parties with respect
to any Intellectual Property or of any facts or circumstances which would render
any Intellectual Property invalid or inadequate to protect the interest of the
Company therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy, would
result in a Material Adverse Effect;

(v) the Company maintains insurance covering its properties, operations,
personnel and businesses as the Company deems necessary and adequate; such
insurance insures against such losses and risks to an extent which is adequate
in accordance with customary industry practice to protect the Company and its
business; all such insurance is fully in force on the date hereof and will be
fully in force at the time of purchase and any additional time of purchase;

(w) the Company has not sent or received any communication regarding termination
of, or intent not to renew, any of the contracts or agreements referred to or
described in, or filed as an exhibit to, the Registration Statement, and no such
termination or non-renewal has been threatened by the Company or, to the
Company’s knowledge, any other party to any such contract or agreement;

(x) the Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Since the end of the Company’s most recent audited fiscal year,
there has been (1) to the knowledge of the Company, no material weakness in the
Company’s internal control over financial reporting (whether or not remediated)
and (2) no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting;

 

6

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

(y) the Company has established and maintains disclosure controls and procedures
(as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act);
such disclosure controls and procedures are designed to ensure that material
information relating to the Company, including material information pertaining
to the Company’s operations and assets managed by the Adviser, is made known to
the Company’s Chief Executive Officer and Chief Financial Officer by others
within the Company and the Adviser, and such disclosure controls and procedures
are effective to perform the functions for which they were established;

(z) the Company has not, directly or indirectly, extended credit, arranged to
extend credit, or renewed any extension of credit, in the form of a personal
loan, to or for any director or executive officer of the Company, or to or for
any family member or affiliate of any director or executive officer of the
Company;

(aa) neither the Company nor, to the Company’s knowledge, any employee or agent
of the Company has made any payment of funds of the Company or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus;

(bb) neither the Company nor, to the Company’s knowledge, any of its respective
directors, officers, affiliates or controlling persons has taken, directly or
indirectly, any action designed, or which has constituted or might reasonably be
expected to cause or result in, under the Exchange Act, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
of the Shares;

(cc) any statistical and market-related data included in the Registration
Statement, the Pre-Pricing Prospectus and the Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources to the extent required;

(dd) to the Company’s knowledge, there are no affiliations or associations
between any member of the FINRA and any of the Company’s officers, directors or
securityholders, except as set forth in any FINRA questionnaires, the
Registration Statement, Pre-Pricing Prospectus and the Prospectus to the extent
required;

(ee) the terms of the Investment Management Agreement, including compensation
terms, comply in all material respects with all applicable provisions of the
Investment Company Act and the Advisers Act and the applicable published rules
and regulations thereunder;

(ff) the approvals by the board of directors and/or the stockholders of the
Company of the Investment Management Agreement have been made in accordance with
the requirements of Section 15 of the Investment Company Act applicable to
companies that have elected to be regulated as business development companies
under the Investment Company Act;

(gg) except as disclosed in the Registration Statement, the Pre-Pricing
Prospectus and the Prospectus, (i) no person is serving or acting as an officer,
director or investment adviser of the Company, in contravention of any of the
provisions of the Investment Company Act and the Advisers Act and the applicable
published rules and regulations thereunder, and (ii) to the knowledge of the
Company, no director of the Company is an “affiliated person” (as defined in the
Investment Company Act) of any of the underwriters;

(hh) the Company has duly elected to be treated by the Commission under the
Investment Company Act as a business development company and has not withdrawn
that election, and the Commission has not ordered that such election be
withdrawn nor to the best of the Company’s knowledge have proceedings to
effectuate such withdrawal been initiated or threatened by the Commission. All
required action has been taken by the Company under the Investment Company Act
and the Act to make the public offering and consummate the sale of the Shares as
provided in this Agreement; the provisions of the corporate charter and by-laws
of the Company comply in all material respects with the requirements of the
Investment Company Act;

(ii) the operations of the Company are in compliance in all material respects
with the provisions of the Investment Company Act applicable to business
development companies and the rules and regulations of the Commission
thereunder;

(jj) the Company and, to its knowledge, its directors and officers (in such
capacity) are in substantial compliance with the applicable provisions of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the Commission’s
applicable published rules promulgated thereunder;

 

7

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

(kk) the Company has filed all foreign, federal, state and local tax returns
that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a Material Adverse Effect)
and has paid all taxes required to be paid by it and any other assessment, fine
or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect;

(ll) except as disclosed in the Pre-Pricing Prospectus and the Prospectus, the
Company (i) does not have any material lending or other relationship with a bank
or lending institution affiliated with any of the Underwriters and (ii) does not
intend to use any of the proceeds from the sale of the Shares hereunder to repay
any outstanding debt owed to any bank or lending institution affiliated with any
of the Underwriters;

(mm) neither the Company nor, to the knowledge of the Company, any director,
officer, employee or affiliate of the Company is aware of or has taken any
action, directly or indirectly, that would result in a violation by such
entities or persons of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder; and

(nn) neither the Company nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

(oo) the operations of the Company are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements
and money laundering statutes and the rules and regulations thereunder
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company with respect to the Money Laundering Laws is pending or,
to the best knowledge of the Company, threatened.

In addition, any certificate signed by any duly appointed officer of the Company
and delivered to the Underwriters or counsel for the Underwriters in connection
with the offering of the Shares shall be deemed to be a representation and
warranty by the Company as to matters covered thereby, to each Underwriter.

4. Representations and Warranties of the Adviser. The Adviser represents and
warrants to the Underwriters that:

(a) the Adviser has been duly formed and is validly existing as a Delaware
limited liability company, in good standing under the laws of the State of
Delaware, with full power and authority to own, lease and operate its properties
and to conduct its business as described in the Pre-Pricing Prospectus, the
Prospectus and the Registration Statement and to execute and deliver this
Agreement; the Adviser has full power and authority to execute and deliver the
Investment Management Agreement; and the Adviser is duly qualified to do
business as a foreign entity and is in good standing in each jurisdiction where
the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, constitute a material
adverse change in the business, financial condition, capitalization or
regulatory status of such entity, or otherwise reasonably be expected to prevent
such entity from carrying out its obligations under the Investment Management
Agreement (collectively, a “Material Adverse Change”);

(b) the Adviser is duly registered with the Commission as an investment adviser
under the Advisers Act and is not prohibited by the Advisers Act, the Investment
Company Act or the applicable published rules and regulations thereunder from
acting under the Investment Management Agreement for the Company as contemplated
by the Prospectus. There does not exist any proceeding or, to the Adviser’s
knowledge, any facts or circumstances the existence of which could lead to any
proceeding which might materially adversely affect the registration of the
Adviser with the Commission;

(c) there are no actions, suits, claims, investigations or proceedings pending
or, to the knowledge of the Adviser, threatened to which the Adviser or any of
its officers or members are or would be a party or of which any

 

8

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

of their properties are or would be subject at law or in equity, or before or by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, except any such action, suit, claim,
investigation or proceeding which would not result in a judgment, decree or
order either (A) constituting, individually or in the aggregate, a Material
Adverse Change, or (B) preventing the consummation of the transactions
contemplated hereby;

(d) the Adviser is not in breach or violation of, or in default under (nor has
any event occurred which with notice, lapse of time, or both would reasonably be
expected to result in any breach or violation of, constitute a default under or
give the holder of any indebtedness (or person acting on such holder’s behalf),
the right to require the repurchase, redemption or repayment of all or part of
such indebtedness under) (i) its charter, bylaws, certificate of formation,
limited liability company operating agreement, or other organizational
documents, as applicable, or (ii) any indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Adviser is a
party, or (iii) any federal, state, local or foreign law, regulation or rule or
any decree, judgment or order applicable to the Adviser, as the case may be,
except, with respect to clauses (ii) and (iii), to the extent that any such
contravention would not constitute a Material Adverse Change and would not
adversely affect the consummation of the transactions contemplated hereby, and
the execution, delivery and performance of this Agreement, and the Investment
Management Agreement, and consummation of the transactions contemplated hereby
and thereby, will not conflict with, result in any breach or violation of or
constitute a default under (nor constitute any event which with notice, lapse of
time or both would reasonably be expected to result in any breach or violation
of or constitute a default under) (i) its charter, bylaws, certificate of
formation, limited liability company operating agreement, or other
organizational documents, as applicable, or (ii) any indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of indebtedness, or
any license, lease, contract or other agreement or instrument to which the
Adviser is a party, or (iii) any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Adviser,
as the case may be, except, with respect to clauses (ii) and (iii), to the
extent that any such contravention would not have a Material Adverse Change and
would not adversely affect the consummation of the transactions contemplated
hereby;

(e) this Agreement and the Investment Management Agreement have been duly
authorized, executed and delivered by the Adviser, and, assuming due
authorization, execution and delivery by the other parties hereto and thereto,
constitute valid and legally binding agreements of the Adviser, enforceable in
accordance with their respective terms, except as (i) the enforceability thereof
may be limited by bankruptcy, reorganization, insolvency, moratorium (including,
without limitation, all laws relating to fraudulent transfers) or similar laws
now or thereafter in effect affecting creditors’ rights generally and
(ii) rights to indemnification and contribution may be limited by equitable
principles of general applicability whether in a proceeding of equity or in law
or by state or federal securities laws or the policies underlying such laws;

(f) the description of the Adviser contained in the Pre-Pricing Prospectus, the
Prospectus and the Registration Statement is true, accurate and complete in all
material respects;

(g) the Adviser has the financial resources available to it necessary for the
performance of its services and obligations as contemplated in the Pre-Pricing
Prospectus, the Prospectus and the Registration Statement and under this
Agreement and the Investment Management Agreement;

(h) subsequent to the date of the Pre-Pricing Prospectus and the Prospectus,
there has not been any Material Adverse Change, or any development involving a
prospective Material Adverse Change that would otherwise prevent the Adviser
from carrying out its obligations under the Investment Management Agreement;

(i) the Adviser has all Consents and has made all necessary filings required
under any federal, state, local or foreign law, regulation or rule and has
obtained all necessary Consents from other persons, in order to conduct its
business, except where the failure to make such filings on or to obtain such
Consents would not constitute a Material Adverse Change; the Adviser is not in
violation of, or in default under, nor has the Adviser received notice of any
proceedings relating to revocation or modification of any such Consent or any
federal, state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Adviser, except where such revocation or modification
would not, individually or in the aggregate, constitute a Material Adverse
Change;

 

9

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

(j) the Adviser and any of its partners, officers, affiliates or controlling
persons have not taken, directly or indirectly, any action designed, under the
Exchange Act, to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale of the Shares;

(k) the Adviser is not aware that (i) any executive, key employee or significant
group of employees of the Company, if any, or the Adviser plans to terminate
employment with the Company or the Adviser or (ii) any such executive or key
employee is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by the
present or proposed business activities of the Company or the Adviser except
where such termination or violation would not constitute a Material Adverse
Change; and

(l) the Adviser maintains a system of internal controls sufficient to provide
reasonable assurance that (i) transactions effectuated by it under the
Investment Management Agreement are executed in accordance with its management’s
general or specific authorization; and (ii) access to the Company’s assets is
permitted only in accordance with its management’s general or specific
authorization.

5. Certain Covenants of the Company and the Adviser. The Company agrees, and the
Adviser agrees:

(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such states or other jurisdictions as you may designate and to use its
reasonable best efforts to maintain such qualifications in effect so long as you
may reasonably request for the distribution of the Shares; provided that, in
connection therewith, the Company shall not be required to do business in any
jurisdiction where it is not now qualified or to take any action that would
subject it to the service of process under the laws of any such jurisdiction
(except a limited consent to service of process with respect to the offering and
sale of the Shares); and to advise you promptly of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;

(b) to furnish to the Underwriters, as many copies of the Pre-Pricing Prospectus
and the Prospectus (or of the Pre-Pricing Prospectus and the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the date of the Pre-Pricing Prospectus) as the
Underwriters may reasonably request for the purposes contemplated by, and so
long as required by, the Act;

(c) that if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or any post-effective amendment thereto
to be declared effective before the Shares may be sold, the Company will
endeavor to cause the Registration Statement or such post-effective amendment to
become effective as soon as reasonably possible, and the Company will advise you
promptly and, if requested by you, will confirm such advice in writing, (i) when
the Registration Statement and any such post-effective amendment thereto has
become effective, and (ii) if Rule 430C under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 497 under the Act
(which the Company agrees to file in a timely manner under such Rule);

(d) to advise you promptly, and, if requested, confirming such advice in
writing, of any request by the Commission prior to the termination of the
offering of the Shares for amendments or supplements to the Registration
Statement or the Prospectus or for additional information with respect thereto,
or of notice of institution of proceedings for, or the entry of a stop order,
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement prior to the time of purchase, to use its reasonable best
efforts to obtain the lifting or removal of such order as soon as reasonably
possible; to advise you promptly of any proposal to amend or supplement the
Registration Statement, the Pre-Pricing Prospectus or the Prospectus, and to
provide you and Underwriters’ counsel copies of any such documents for review
and comment a reasonable amount of time prior to any proposed filing and to file
no such amendment or supplement to which you shall reasonably object;

(e) subject to Section 5(d) hereof, to file promptly all reports and any
definitive proxy or information statement required to be filed by the Company
with the Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; and to promptly
notify you of such filing only to the extent not otherwise available on the
Commission’s EDGAR system;

 

10

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

(f) to furnish to you and to each of the other Underwriters, only to the extent
not otherwise available on the Commission’s EDGAR system or the Company’s
website, for a period of one year from the date of this Agreement (i) copies of
any reports, proxy statements, or other communications which the Company shall
send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed with
the Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may
be designated by the Commission, (iii) copies of documents or reports filed with
any national securities exchange on which any class of securities of the Company
is listed or quoted, and (iv) such other information as you may reasonably
request regarding the Company;

(g) if necessary or appropriate, to file a registration statement pursuant to
Rule 462(b) under the Act (a “462(b) Registration Statement”);

(h) to advise the Underwriters promptly of the happening of any event within the
time during which a prospectus relating to the Shares is required to be
delivered under the Act which could require the making of any change in the
Prospectus then being used so that the Prospectus would not include an untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading, and, during such time, subject to Section 5(d) hereof, to
prepare, at any time prior to 60 days after the date of this Agreement, at the
Company’s expense, and thereafter, at the Underwriters’ expense, and furnish to
the Underwriters promptly such amendments or supplements to such Prospectus as
may be necessary to reflect any such change;

(i) that, as soon as practicable, the Company will make generally available to
its security holders an earnings statement or statements of the Company which
will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act;

(j) to apply the net proceeds from the sale of the Shares in the manner set
forth under the caption “Use of Proceeds” in the Pre-Pricing Prospectus and the
Prospectus;

(k) the Company will use its reasonable best efforts to maintain its status as a
business development company; provided, however, the Company may change the
nature of its business so as to cease to be, or to 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 Investment Company Act or
any successor provision;

(l) that the Company will use its reasonable best efforts to maintain its
qualification as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”) for each full fiscal year
during which it is a business development company under the Investment Company
Act; provided that, at the discretion of the Company’s board of directors, it
may elect not to be so treated;

(m) to pay all costs, expenses, fees and taxes in connection with (i) the
preparation and filing of the Pre-Pricing Prospectus, the Prospectus, and any
amendments or supplements thereto, and the printing and furnishing of copies of
the Pre-Pricing Prospectus and Prospectus to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the registration, issue, sale
and delivery of the Shares, including the fees, disbursements and expenses of
the Company’s counsel and accountants incurred in connection therewith, and any
stock or transfer taxes and stamp or similar duties payable upon the sale,
issuance or delivery of the Shares to the Underwriters, (iii) the qualification
of the Shares for offering and sale under state or foreign laws and the
determination of their eligibility for investment under state or foreign law as
aforesaid (including the reasonable legal fees and filing fees and other
reasonable disbursements of counsel related to the offering of the Shares for
the Underwriters) and the furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (iv) any quotation of the
Shares on the Nasdaq Global Select Market, (v) any filing for review of the
public offering of the Shares by the FINRA, including the filing fees and
reasonable legal fees and other reasonable disbursements of counsel related to
the offering of the Shares to the Underwriters, (vi) all travel expenses of the
Company’s officers, directors, employees and affiliates and any other expense of
the Company incurred in connection with attending or hosting meetings with
prospective purchasers of the Shares; (vii) the fees and disbursements of any
transfer agent or registrar for the Shares, and (viii) the performance of the
Company’s other obligations hereunder which are not specifically provided for in
this Section 5(m);

(n) not to sell, offer to sell, contract or agree to sell, hypothecate, pledge,
grant any option to purchase or otherwise dispose of or agree to dispose of,
directly or indirectly, any Common Stock or securities convertible into

 

11

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

or exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to Common Stock, or file or cause to be declared effective
a registration statement under the Act relating to the offer and sale of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or other rights to purchase Common Stock or any
other securities of the Company that are substantially similar to Common Stock
for a period of 60 days after the date hereof (the “Lock-Up Period”), without
the prior written consent of Citigroup Global Markets Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, except for (i) the registration of the
Shares and the sales to the Underwriters pursuant to this Agreement; and
(ii) any issuance of shares of Common Stock pursuant to the Company’s dividend
reinvestment plan. Notwithstanding the foregoing, for the purpose of allowing
the Underwriters to comply with NASD Rule 2711(f)(4), if (i) during the last 17
days of the Lock-Up Period, the Company releases earnings results or publicly
announces other material news or a material event relating to the Company occurs
or (ii) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the 16 day period beginning on the
last day of the Lock-Up Period, then in each case the Lock-Up Period will be
extended until the expiration of the 18 day period beginning on the date of
release of the earnings results or the public announcement regarding the
material news or the occurrence of the material event, as applicable, unless
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated waive, in writing, such extension;

(o) to use its reasonable best efforts to cause the continued listing of the
Common Stock on the Nasdaq Global Select Market, and to use its reasonable best
efforts to comply with all of the requirements of the Nasdaq Global Select
Market applicable to the Company; and

(p) to maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock;

6. Reimbursement of Underwriters’ Expenses. If the Shares are not delivered for
any reason other than the termination of this Agreement pursuant to the fifth
paragraph of Section 9 hereof or the default by one or more of the Underwriters
in its or their respective obligations hereunder, the Company shall, in addition
to paying the amounts described in Section 5(o) hereof, reimburse the
non-defaulting Underwriters for all of their out-of-pocket expenses incurred,
including the reasonable fees and disbursements of their counsel incurred in
connection with this Agreement and the transactions contemplated hereunder.

7. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company and the Adviser on the date hereof, at the
time of purchase and, if applicable, at the additional time of purchase, the
performance by the Company and the Adviser of each of its obligations hereunder
and to the following additional conditions precedent:

(a) The Company shall furnish to you at the time of purchase and, if applicable,
at the additional time of purchase, an opinion of Skadden, Arps, Meagher & Flom
LLP, counsel for the Company and the Adviser, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for each of the other Underwriters and in form and
substance reasonably satisfactory to Sutherland Asbill & Brennan LLP, counsel
for the Underwriters, substantially to the effect set forth in Exhibit B hereto.

(b) You shall have received from Deloitte & Touche LLP letters dated,
respectively, the Execution Time, the time of purchase and, if applicable, the
additional time of purchase, and addressed to the Underwriters (with reproduced
copies for each of the Underwriters) in the forms heretofore approved by the
Representatives containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement, the Pre-Pricing Prospectus and the Prospectus.

(c) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Sutherland Asbill &
Brennan LLP, counsel for the Underwriters, dated the time of purchase or the
additional time of purchase, as the case may be, with respect the sale of the
Shares and other related matters as the Underwriters may require.

(d) No prospectus or amendment or supplement to the Registration Statement, the
Pre-Pricing Prospectus or the Prospectus shall have been filed to which you
reasonably object.

 

12

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

(e) All filings with the Commission required by Rule 497 of the Act in
connection with the offer and sale of the Shares shall have been made within the
applicable time period prescribed for such filing by Rule 497.

(f) Prior to the time of purchase, and, if applicable, the additional time of
purchase, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or, to the Company’s
knowledge, proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall not 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 statements therein not misleading; and
(iii) the Prospectus, as then amended or supplemented, shall not 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 statements therein, in light of the
circumstances under which they are made, not misleading.

(g) Between the time of execution of this Agreement and the time of purchase or
the additional time of purchase, as the case may be, no material adverse change
or any development involving a reasonably foreseeable prospective material
adverse change in the business, properties, management, financial condition, or
results of operations of the Company or the Adviser shall occur or become known.

(h) Each of the Company and the Adviser will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a certificate of
its Chief Executive Officer and its Chief Financial Officer in the form attached
as Exhibit C hereto.

(i) You shall have received signed Lock-up Agreements referred to in
Section 3(r) hereof.

(j) The Shares shall have been approved for quotation on the Nasdaq Global
Select Market, subject only to notice of issuance at or prior to the time of
purchase and the additional time of purchase, as the case may be.

(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement, the Pre-Pricing Prospectus and the Prospectus as of the
time of purchase and, if applicable, the additional time of purchase, as you may
reasonably request.

8. Termination. The obligations of the several Underwriters hereunder shall be
subject to termination in any of the Representatives’ judgment or the judgment
of such group, if (x) since the time of execution of this Agreement or the
earlier respective dates as of which information is given in the Registration
Statement, the Pre-Pricing Prospectus and the Prospectus, there has been any
material adverse change or any development involving a prospective material
adverse change in the business, properties, management, financial condition, or
results of operations of the Company or the Adviser, which would, in any of the
Representative’s judgment, make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement, the Pre-Pricing Prospectus and the
Prospectus, or (y) since execution of this Agreement, there shall have occurred:
(i) a suspension or material limitation in trading in securities generally on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq Global
Select Market; (ii) a suspension or material limitation in trading in the
Company’s securities on the Nasdaq Global Select Market; (iii) a general
moratorium on commercial banking activities declared by either federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or
(v) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in any of the Representatives’ judgment or
the judgment of such group makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.

If in any of the Representatives’ judgment or the judgment of such group a
decision is made to elect to terminate this Agreement as provided in this
Section 8, the Company and each other Underwriter shall be notified promptly in
writing.

If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement, or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation

 

13

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

or liability under this Agreement (except to the extent provided in Sections 6
and 10 hereof), and the Underwriters shall be under no obligation or liability
to the Company under this Agreement (except to the extent provided in Section 10
hereof) or to one another hereunder.

9. Increase in Underwriters’ Commitments. Subject to Sections 7 and 8 hereof, if
any Underwriter shall default in its obligation to take up and pay for the Firm
Shares to be purchased by it hereunder (otherwise than for a failure of a
condition set forth in Section 7 hereof or a reason sufficient to justify the
termination of this Agreement under the provisions of Section 8 hereof) and if
the number of Firm Shares which all Underwriters so defaulting shall have agreed
but failed to take up and pay for does not exceed 10% of the total number of
Firm Shares, the non-defaulting Underwriters shall take up and pay for (in
addition to the aggregate number of Firm Shares they are obligated to purchase
pursuant to Section 1 hereof) the number of Firm Shares agreed to be purchased
by all such defaulting Underwriters, as hereinafter provided. Such Shares shall
be taken up and paid for by such non-defaulting Underwriters in such amount or
amounts as you may designate with the consent of each Underwriter so designated
or, in the event no such designation is made, such Shares shall be taken up and
paid for by all non-defaulting Underwriters pro rata in proportion to the
aggregate number of Firm Shares set opposite the names of such non-defaulting
Underwriters in Schedule A.

Without relieving any defaulting Underwriter from its obligations hereunder, the
Company agrees with the non-defaulting Underwriters that it will not sell any
Firm Shares hereunder unless all of the Firm Shares are purchased by the
Underwriters (or by substituted Underwriters selected by you with the approval
of the Company or selected by the Company with your approval).

If a new Underwriter or Underwriters are substituted by the Underwriters or by
the Company for a defaulting Underwriter or Underwriters in accordance with the
foregoing provision, the Company or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary changes in the Registration Statement and the Prospectus and other
documents may be effected.

The term Underwriter as used in this Agreement shall refer to and include any
Underwriter substituted under this Section 9 with like effect as if such
substituted Underwriter had originally been named in Schedule A.

If the aggregate number of Firm Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Firm Shares
which all Underwriters agreed to purchase hereunder, and if neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
five business day-period stated above for the purchase of all the Firm Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall terminate without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.

10. Indemnity and Contribution.

(a) (1) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors, officers, employees, agents and affiliates
and any person who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons, from and against any loss, damage, expense, liability
or claim (including the reasonable cost of any investigation incurred in
connection therewith) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company),
the Pre-Pricing Prospectus, the Pricing Information or the Prospectus (as
amended or supplemented by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
either the Registration Statement, the Pre-Pricing Prospectus, the Pricing
Information or the Prospectus or necessary to make the statements made therein
not misleading, except insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
concerning such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in the Registration
Statement, the Pre-Pricing Prospectus, the Pricing Information or the Prospectus
or arises out of or is

 

14

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

based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in the Registration
Statement, the Pre-Pricing Prospectus, the Pricing Information or Prospectus or
necessary to make such information not misleading.

(2) The Adviser agrees to indemnify, defend and hold harmless each Underwriter
and each other person specified in subsection (a)(1) of this Section 10 from and
against any loss, damage, expense, liability or claim (including the reasonable
cost of any investigation incurred in connection therewith) any such Underwriter
or any such other person may incur as specified in such subsection, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon
(x) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company), the Pre-Pricing
Prospectus or the Prospectus (as amended or supplemented by the Company)
regarding the Adviser, or arises out of or is based upon any omission or alleged
omission to state a material fact regarding the Adviser required to be stated in
either the Registration Statement, the Pre-Pricing Prospectus or the Prospectus
or necessary to make the statements made therein not misleading with respect to
the Adviser.

(3) If any action, suit or proceeding (each, a “Proceeding”) is brought against
an Underwriter or any such person in respect of which indemnity may be sought
against the Company or the Adviser, as appropriate, pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the Company or
the Adviser, as appropriate, in writing of the institution of such Proceeding
and the Company or the Adviser, as appropriate, shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Company or the Adviser, as appropriate, shall not
relieve the Company or the Adviser, as appropriate, from any liability which the
Company or the Adviser, as appropriate, may have to any Underwriter or any such
person or otherwise. Such Underwriter or such person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in writing by
the Company or the Adviser, as appropriate, in connection with the defense of
such Proceeding or the Company or the Adviser, as appropriate, shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the Company or the Adviser, as appropriate, (in which
case the Company or the Adviser, as appropriate, shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company or the Adviser, as appropriate, and paid as incurred (it being
understood, however, that the Company or the Adviser, as appropriate, shall not
be liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company or the Adviser, as appropriate, shall not be liable for
any settlement of any Proceeding effected without its written consent but if
settled with the written consent of the Company or the Adviser, as appropriate,
the Company or the Adviser, as appropriate, agrees to indemnify and hold
harmless any Underwriter and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have fully reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days’ prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.

(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Company and the Adviser, their directors, partners and officers, and any person
who controls the Company or the Adviser within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of any

 

15

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

investigation incurred in connection therewith) which, jointly or severally, the
Company or the Adviser, or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information concerning such Underwriter furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use in the Pre-Pricing
Prospectus, the Pricing Information or in the Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in the Pre-Pricing
Prospectus, the Pricing Information or the Prospectus or necessary to make such
information not misleading.

If any Proceeding is brought against the Company or the Adviser, or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or the Adviser, or such person
shall promptly notify such Underwriter in writing of the institution of such
Proceeding and such Underwriter shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
to so notify such Underwriter shall not relieve such Underwriter from any
liability which such Underwriter may have to the Company or the Adviser, or any
such person or otherwise. The Company or the Adviser, or such person shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of the Company or the Adviser, or such
person unless the employment of such counsel shall have been authorized in
writing by such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to defend such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to or in
conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days’
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding.

(c) If the indemnification provided for in this Section 10 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 10 or
insufficient to hold an indemnified party harmless in respect of any losses,
damages, expenses, liabilities or claims referred to therein, then each
applicable indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause (i) above 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 indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other shall be deemed to be in the
same respective proportions as the total proceeds from

 

16

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

the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the total underwriting discounts and
commissions received by the Underwriters, bear to the aggregate public offering
price of the Shares. The relative fault of the indemnifying party on the one
hand and of the indemnified party on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information
supplied by such party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating, preparing to defend or defending any
Proceeding.

(d) The Company, the Adviser and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 10 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 10, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations to contribute
pursuant to this Section 10 are several in proportion to their respective
underwriting commitments and not joint.

(e) The indemnity and contribution agreements contained in this Section 10 and
the covenants, warranties and representations of the Company and the Adviser
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its partners,
directors, officers, employees, agents and affiliates or any person (including
each partner, officer or director of such person) who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
or by or on behalf of the Company, its directors or officers or any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company, the Adviser and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company or the Adviser, against
any of the Company’s officers or directors, the Adviser or its partners or
officers in connection with the issuance and sale of the Shares, or in
connection with the Registration Statement, the Pre-Pricing Prospectus, the
Pricing Information or the Prospectus.

11. Information Furnished by the Underwriters. The Company acknowledges that
(i) the statements set forth in the last paragraph of the cover page regarding
delivery of Firm Shares and, under the heading “Underwriting,” (ii) the list of
Underwriters and their respective participation in the sale of the Firm Shares,
(iii) the sentences relating to concessions and reallowances to securities
dealers and (iv) the sentences related to short sales, stabilization, syndicate
covering transactions, penalty bids and passive market making transactions in
the Pre-Pricing Prospectus and the Prospectus constitute the only information
furnished by or on behalf of the several Underwriters for inclusion in the
Pre-Pricing Prospectus and the Prospectus.

12. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if faxed to Citigroup Global
Markets Inc., General Counsel (fax number: (212) 816-7912) and confirmed to the
General Counsel, Citigroup Global Markets Inc., 388 Greenwich Street, New York,
New York, 10013, Attention: General Counsel, and, if to the Company, shall be
sufficient in all respects if delivered or sent to the Company at the offices of
the Company at 40 East 52nd Street, New York, NY 10022, facsimile no.
(212) 810-5801, Attention: Chief Financial Officer.

13. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating
to this Agreement (“Claim”), directly or indirectly, shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts formed and to be performed entirely within the State of New York,
without regard to the applicability or effect of conflict of law principles or
rules thereof, to the extent such principles would require or permit the
application of the laws of another jurisdiction. The section headings in this
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement.

 

17

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

14. Submission to Jurisdiction. Except as set forth below, no Claim 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 each of the Company
and the Adviser consents to the jurisdiction of such courts and personal service
with respect thereto. Each of the Company and the Adviser hereby consents to
personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party
against the Representatives or any indemnified party. Each of the
Representatives, the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) and the Adviser
waives 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. Each of the Company and the Adviser agrees that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the Company and the Adviser, as
appropriate, and may be enforced in any other courts to the jurisdiction of
which the Company and the Adviser, as appropriate, is or may be subject, by suit
upon such judgment.

15. Parties at Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters and the Company and to the extent
provided in Section 10 hereof the controlling persons, partners, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.

16. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among
the parties.

17. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Company and the Adviser and their successors and assigns and
any successor or assign of any substantial portion of the Company’s and the
Adviser’s and any of the Underwriters’ respective businesses and/or assets.

18. Acknowledgement. The Company acknowledges and agrees that (i) the sale
through the Underwriters of any Shares pursuant to this Agreement, including the
determination of the price of the Shares and any related compensation, discounts
or commissions, is an arm’s-length commercial transaction between the Company,
on the one hand, and the Underwriters, on the other hand, (ii) in connection
with the offering of the Shares and the process leading to such transactions
each Underwriter will act solely as an agent and not as a fiduciary of the
Company or its stockholders, creditors, employees or any other party, (iii) no
Underwriter will assume an advisory or fiduciary responsibility in favor of the
Company with respect to the offering of Shares contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised or
is currently advising the Company on other matters) and no Underwriter will have
any obligation to the Company with respect to the offering of Shares except the
obligations expressly set forth herein, (iv) each Underwriter and its respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company, and (v) no Underwriter has
provided and will 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.

[Remainder of Page Intentionally Left Blank]

 

18

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

If the foregoing correctly sets forth the understanding among the Company, the
Adviser and the several Underwriters, 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, the Adviser and the
Underwriters, severally.

 

Very truly yours, BLACKROCK KELSO CAPITAL CORPORATION By:  

 

Name:   Title:   BLACKROCK KELSO CAPITAL ADVISORS LLC By:  

 

Name:   Title:  

 

Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A CITIGROUP
GLOBAL MARKETS INC. MERRILL LYNCH, PIERCE, FENNER & SMITH
                               INCORPORATED CREDIT SUISSE SECURITIES (USA) LLC
UBS SECURITIES LLC By:   CITIGROUP GLOBAL MARKETS INC. Name:     Title:     By:
  MERRILL LYNCH, PIERCE, FENNER & SMITH                              
   INCORPORATED Name:     Title:     By:   CREDIT SUISSE SECURITIES (USA) LLC
Name:     Title:     By:   UBS SECURITIES LLC Name:     Title:    

 

19

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

SCHEDULE A

 

Underwriter

   Number of
Firm Shares CITIGROUP GLOBAL MARKETS INC.    2,100,000

MERRILL LYNCH, PIERCE, FENNER & SMITH

                               INCORPORATED

   2,100,000 CREDIT SUISSE SECURITIES (USA) LLC    1,050,000 UBS SECURITIES LLC
   1,050,000 BMO CAPITAL MARKETS LLC    900,000 LAZARD CAPITAL MARKETS LLC   
300,000

Total

  

 

20