Exhibit 10.17

EXECUTION VERSION

WAIVER LETTER

WAIVER LETTER, dated as of August 3, 2011 (this “Waiver”), with respect to the
Amended and Restated Senior Secured Revolving Credit Agreement, dated as of
February 22, 2011 (as amended, the “Credit Agreement”), among FIFTH STREET
FINANCE CORP., a Delaware corporation (the “Borrower”), FSFC Holdings, Inc., a
Delaware corporation (“FSFC”), Fifth Street Fund of Funds LLC, a Delaware
limited liability company (“Fifth Street”; collectively with FSFC, the
“Subsidiary Guarantors”), the lenders from time to time parties thereto (the
“Lenders”) and ING Capital LLC, as administrative agent (in such capacity, the
“Administrative Agent”) for the Lenders under the Credit Agreement.

W I T N E S S E T H:

WHEREAS, capitalized terms undefined herein shall have the meaning ascribed to
them in the Credit Agreement;

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make
certain loans and other extensions of credit to the Borrower;

WHEREAS, the Borrower has issued certain 5.375% Convertible Senior Notes due
2016 pursuant to an Indenture, dated April 12, 2011, between the Borrower and
Deutsche Bank Trust Company Americas, as trustee (the “2016 Notes”);

WHEREAS, Section 6.12 of the Credit Agreement prohibits the Borrower and its
Subsidiaries (other than Financing Subsidiaries) from purchasing, redeeming,
retiring or otherwise acquiring for value any Unsecured Longer-Term Indebtedness
(the “Repurchase Prohibition”);

WHEREAS, the Borrower has requested that the Lenders permit the Borrower to
repurchase the 2016 Notes from time to time commencing on the Effective Date (as
defined below) and ending on the date that is four months after the Effective
Date (any such repurchases, individually or collectively, the “Note
Repurchase”);

WHEREAS, the undersigned Lenders have consented to waive the Repurchase
Prohibition solely as it relates to the Note Repurchase, subject to the terms
and conditions set forth below;

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and in consideration of the premises contained herein,
the parties hereto hereby agree as follows:

SECTION I

WAIVER

1.1 Waiver. Commencing on the Effective Date and ending on the date that is four
months after the Effective Date (the “Waiver Period”), and subject to the terms
and conditions set forth below, the undersigned Lenders hereby agree to waive
the Repurchase Prohibition solely as it relates to the Note Repurchase, provided
that:

 

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(a) immediately following any such Note Repurchase, the Adjusted Covered Debt
Balance is less than the lesser of (i) 65% of the Adjusted Borrowing Base and
(ii) 65% of the aggregate amount of the Lender’s Commitments;

(b) any 2016 Notes repurchased by Borrower or any Subsidiary shall be promptly
cancelled;

(c) any such Note Repurchase shall be made at face value or less of the 2016
Notes being repurchased;

(d) the aggregate face value of 2016 Notes repurchased pursuant to the Note
Repurchase shall not exceed $40,000,000; and

(e) both prior to and immediately following any such Note Repurchase, no Default
or Event of Default (other than a Default that would otherwise arise under the
Repurchase Prohibition as a result of such Note Repurchase) shall have occurred
or be continuing.

SECTION II

MISCELLANEOUS

2.1 Conditions to Effectiveness of Waiver. The effectiveness of this Waiver
shall be subject to the satisfaction of the following conditions precedent (the
date on which all such conditions precedent are satisfied being referred to
herein as the “Effective Date”):

(a) the Administrative Agent shall have received counterparts of this Waiver
duly executed and delivered by the Borrower and Lenders constituting at least
the Required Lenders;

(b) the Administrative Agent shall have received the costs and expenses required
to be paid by the Borrower pursuant to Section 2.6 hereof for which invoices
have been delivered to the Borrower.

2.2 Representations and Warranties. To induce the other parties hereto to enter
into this Waiver, the Borrower represents and warrants to the Administrative
Agent and each of the Lenders that, as of the Effective Date and after giving
effect to this Waiver:

(a) This Waiver has been duly authorized, executed and delivered by the Borrower
and each Subsidiary Guarantor party hereto, and constitutes a legal, valid and
binding obligation of the Borrower and each Subsidiary Guarantor party hereto
enforceable in accordance with its terms (except as such enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar
laws of general applicability affecting the enforcement of creditors’ rights and
(ii) the application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law)).

(b) The representations and warranties set forth in Article 3 of the Credit
Agreement and the representations and warranties in each other Loan Document,

 

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are true and correct in all material respects (other than any representation or
warranty already qualified by materiality or Material Adverse Effect, which
shall be true and correct is all respects) on and as of the Effective Date or as
to any such representations and warranties that refer to a specific date, as of
such specific date, with the same effect as though made on and as of the
Effective Date.

(c) No Default or Event of Default has occurred and is continuing under the
Credit Agreement.

2.3 Counterparts. This Waiver may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. Delivery of an executed counterpart of this Waiver by telecopy or
electronic mail shall be effective as delivery of a manually executed
counterpart of this Waiver.

2.4 Limited Waiver. Except as expressly set forth herein, this Waiver shall not
by implication or otherwise limit, impair, constitute a waiver of, or otherwise
affect the rights and remedies of the Lenders, the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Borrower or the Subsidiary Guarantors
under the Credit Agreement or any other Loan Document, and shall not alter,
modify, amend or in any way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan
Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle any
Person to a consent to, or a waiver, amendment, modification or other change of,
any of the terms, conditions, obligations, covenants or agreements contained in
the Credit Agreement or any other Loan Document in similar or different
circumstances. This Waiver shall apply and be effective only with respect to the
provisions of the Credit Agreement specifically referred to herein and only to
the extent specified herein. This Waiver shall constitute a Loan Document.

2.5 Termination of Waiver. This Waiver shall only be effective during the Waiver
Period. At the end of the Waiver Period, this Waiver shall terminate and be of
no further force and effect.

2.6 Payment of Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs and expenses
incurred in connection with this Waiver, including, without limitation, the
reasonable fees, charges and disbursements of legal counsel to the
Administrative Agent.

2.7 GOVERNING LAW. THIS WAIVER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

2.8 Incorporation of Certain Provisions. The provisions of Sections 9.01, 9.06,
9.07, 9.09, 9.10 and 9.12 of the Credit Agreement are hereby incorporated by
reference.

2.9 Consent and Reaffirmation. (a) Each Subsidiary Guarantor hereby consents to
this Waiver and the transactions contemplated hereby, (b) the Borrower and each
Subsidiary Guarantor agree that, notwithstanding the effectiveness of this
Waiver, the Guarantee and Security Agreement and each of the other Security
Documents continue to be in full force

 

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and effect, (c) each Subsidiary Guarantor confirms its guarantee of the Secured
Obligations (as defined in the Guarantee and Security Agreement and which
definition, for clarity, incorporates by reference the Obligations under the
Credit Agreement as amended hereby) and the Borrower and each Subsidiary
Guarantor confirm their grant of a security interest in their assets as
Collateral for the Secured Obligations, all as provided in the Loan Documents,
and (d) the Borrower and each Subsidiary Guarantor acknowledge that such
guarantee and/or grant continues in full force and effect in respect of, and to
secure, the Secured Obligations.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.

 

FIFTH STREET FINANCE CORP., as Borrower By:   /s/ Bernard D. Berman Name:  
Bernard D. Berman Title:   President

 

FSFC HOLDINGS, INC., as Subsidiary Guarantor By:   /s/ Bernard D. Berman Name:  
Bernard D. Berman Title:   President

 

FIFTH STREET FUND OF FUNDS LLC, as

Subsidiary Guarantor

By:   /s/ Bernard D. Berman Name:   Bernard D. Berman Title:   President

 

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ING CAPITAL, LLC, as Administrative Agent, Collateral

Agent, Issuing Bank and as a Lender

By:   /s/ Patrick Frisch, CFA Name:   Patrick Frisch, CFA Title:   Managing
Director

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ROYAL BANK OF CANADA, as a Lender By:   /s/ Jason Hare Name:   Jason Hare Title:
  Authorized Signatory

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KEY EQUIPMENT FINANCE, INC., as a Lender By:   /s/ Richard S. Andersen Name:  
Richard S. Andersen Title:   Designated Signer