AMENDED AND RESTATED

 
INVESTMENT ADVISORY AGREEMENT
 
BETWEEN
 
GOLUB CAPITAL BDC, INC.
 
AND
 
GC ADVISORS LLC
 
Amended and Restated Investment Advisory Agreement made this 16th day of July,
2010 (this “Agreement”), by and between GOLUB CAPITAL BDC, INC., a Delaware
corporation (the “Corporation”), and GC ADVISORS LLC, a Delaware limited
liability company (the “Adviser”).
 
WHEREAS, the Corporation operates as a closed-end, non-diversified management
investment company;
 
WHEREAS, the Corporation has filed an election to be treated as a business
development company under the Investment Company Act of 1940, as amended (the
“Investment Company Act”);
 
WHEREAS, the Corporation has acquired interests in senior secured loans and
other debt obligations that comprise a portion of the Corporation’s portfolio;
 
WHEREAS, the Adviser is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the “Investment Advisers Act”);
 
WHEREAS, the Corporation and the Adviser are party to that certain investment
advisory agreement dated April 14, 2010 by and between the Corporation and the
Adviser (the “Prior Agreement”);
 
WHEREAS, the Corporation and the Adviser desire to amend and restate the Prior
Agreement to set forth the terms and conditions for the continued provision by
the Adviser of investment advisory services to the Corporation.
 
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the parties hereby agree as follows:

 
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1.             Duties of the Adviser.
 
(a)           The Corporation hereby employs the Adviser to act as the
investment adviser to the Corporation and to manage the investment and
reinvestment of the assets of the Corporation, subject to the supervision of the
board of directors of the Corporation (the “Board of Directors”), for the period
and upon the terms herein set forth, (i) in accordance with the investment
objective, policies and restrictions that are set forth in the Registration
Statement, as the same may be amended from time to time, (ii) in accordance with
the Investment Company Act, the Investment Advisers Act and all other applicable
federal and state law and (iii) in accordance with the Corporation’s certificate
of incorporation and bylaws. Without limiting the generality of the foregoing,
the Adviser shall, during the term and subject to the provisions of this
Agreement, (i) determine the composition of the portfolio of the Corporation,
the nature and timing of the changes therein and the manner of implementing such
changes; (ii) identify, evaluate and negotiate the structure of the investments
made by the Corporation (including performing due diligence on prospective
portfolio companies); (iii) execute, close, service and monitor the
Corporation’s investments; (iv) determine the securities and other assets that
the Corporation will purchase, retain or sell; and (v) provide the Corporation
with such other investment advisory, research and related services as the
Corporation may, from time to time, reasonably require for the investment of its
funds. The Adviser shall have the power and authority on behalf of the
Corporation to effectuate its investment decisions for the Corporation,
including the execution and delivery of all documents relating to the
Corporation’s investments and the placing of orders for other purchase or sale
transactions on behalf of the Corporation. In the event that the Corporation
determines to acquire debt financing or to refinance existing debt financing,
the Adviser shall arrange for such financing on the Corporation’s behalf,
subject to the oversight and approval of the Board of Directors. If it is
necessary for the Adviser to make investments on behalf of the Corporation
through a subsidiary or special purpose vehicle, the Adviser shall have
authority to create or arrange for the creation of such subsidiary or special
purpose vehicle and to make such investments through such subsidiary or special
purpose vehicle in accordance with the Investment Company Act.
 
(b)           The Adviser hereby accepts such employment and agrees during the
term hereof to render the services described herein for the amounts of
compensation provided herein.
 
(c)           Subject to the requirements of the Investment Company Act, the
Adviser is hereby authorized, but not required, to enter into one or more
sub-advisory agreements with other investment advisers (each, a “Sub-Adviser”)
pursuant to which the Adviser may obtain the services of the Sub-Adviser(s) to
assist the Adviser in fulfilling its responsibilities hereunder. Specifically,
the Adviser may retain a Sub-Adviser to recommend specific securities or other
investments based upon the Corporation’s investment objective and policies, and
work, along with the Adviser, in structuring, negotiating, arranging or
effecting the acquisition or disposition of such investments and monitoring
investments on behalf of the Corporation, subject in all cases to the oversight
of the Adviser and the Corporation. The Adviser, and not the Corporation, shall
be responsible for any compensation payable to any Sub-Adviser. Any sub-advisory
agreement entered into by the Adviser shall be in accordance with the
requirements of the Investment Company Act, the Investment Advisers Act and
other applicable federal and state law.
 
(d)           For all purposes herein provided, the Adviser shall be deemed to
be an independent contractor and, except as expressly provided or authorized
herein, shall have no authority to act for or represent the Corporation in any
way or otherwise be deemed an agent of the Corporation.

 
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(e)           The Adviser shall keep and preserve, in the manner and for the
period that would be applicable to investment companies registered under the
Investment Company Act, any books and records relevant to the provision of its
investment advisory services to the Corporation, shall specifically maintain all
books and records with respect to the Corporation’s portfolio transactions and
shall render to the Board of Directors such periodic and special reports as the
Board of Directors may reasonably request. The Adviser agrees that all records
that it maintains for the Corporation are the property of the Corporation and
shall surrender promptly to the Corporation any such records upon the
Corporation’s request, provided that the Adviser may retain a copy of such
records.
 
2.             Corporation’s Responsibilities and Expenses Payable by the
Corporation.  All investment professionals of the Adviser and their respective
staffs, when and to the extent engaged in providing investment advisory and
management services hereunder, and the compensation and routine overhead
expenses of such personnel allocable to such services, shall be provided and
paid for by the Adviser and not by the Corporation. The Corporation shall bear
all other costs and expenses of its operations and transactions, including,
without limitation, those relating to: (a) organization of the Corporation; (b)
calculations of the net asset value of the Corporation, including the cost and
expenses of any independent valuation firm; (c) fees and expenses incurred by
the Adviser and payable to third parties, including agents, consultants or other
advisors, in connection with monitoring the financial and legal affairs of the
Corporation and in monitoring the Corporation’s investments, performing due
diligence on prospective portfolio companies or otherwise relating to, or
associated with, evaluating and making investments; (d) interest payable on
debt, if any, incurred by the Corporation to finance its investments and
expenses related to unsuccessful portfolio acquisition efforts; (e) offerings of
the common stock and other securities of the Corporation, including the initial
public offering of the common stock of the Corporation; (f) investment advisory
and management fees; (g) administration fees payable under the administration
agreement dated as of even date herewith (the “Administration Agreement”),
between the Corporation and GC Service Company, LLC (the “Administrator”), the
Corporation’s administrator; (h) fees payable to third parties, including
agents, consultants or other advisors, relating to, or associated with,
evaluating and making investments, including costs associated with meeting
potential financial sponsors; (i) fees incurred by the Corporation in connection
with the services of transfer agents and dividend agents and custodial fees and
expenses; (j) federal and state registration fees; (k) all costs of registration
and listing the Corporation’s securities on any securities exchange; (l)
federal, state and local taxes; (m) independent Directors’ fees and expenses;
(n) costs of preparing and filing reports or other documents required by the
Securities and Exchange Commission and other regulators; (o) costs of any
reports, proxy statements or other notices to stockholders, including printing
costs; (p) costs associated with individual or group stockholders; (q) the
Corporation’s allocable portion of any fidelity bond, directors’ and officers’
errors and omissions liability insurance policies, and any other insurance
premiums; (r ) direct costs and expenses of administration, including printing,
mailing, long distance telephone, copying, secretarial and other staff,
independent auditors and outside legal costs; (s) proxy voting expenses; and (t)
any and all other expenses incurred by the Corporation or the Administrator in
connection with administering the Corporation’s business, including payments
made under the Administration Agreement based upon the Corporation’s allocable
portion of the Administrator’s overhead in performing its obligations under the
Administration Agreement, including rent and the allocable portion of the cost
of the Corporation’s chief compliance officer and chief financial officer and
their respective staffs.

 
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3.             Compensation of the Adviser. The Corporation agrees to pay, and
the Adviser agrees to accept, as compensation for the investment advisory and
management services provided by the Adviser hereunder, a fee consisting of two
components:  a base management fee (the “Base Management Fee”) and an incentive
fee (the “Incentive Fee”), each as hereinafter set forth. The Corporation shall
make any payments due hereunder to the Adviser or to the Adviser’s designee as
the Adviser may otherwise direct. To the extent permitted by applicable law, the
Adviser may elect, or adopt a deferred compensation plan pursuant to which it
may elect to defer all or a portion of its fees hereunder for a specified period
of time.
 
(a)           The Base Management Fee shall be calculated at an annual rate
equal to 1.375% of the average adjusted gross assets of the Corporation.  As
described below, average adjusted gross assets of the Corporation for any period
shall exclude cash and cash equivalents and include assets purchased by the
Corporation with borrowed funds.  For services rendered under this Agreement,
the Base Management Fee shall be payable quarterly in arrears. The Base
Management Fee shall be calculated based on the average value of the gross
assets of the Corporation at the end of the two most recently completed calendar
quarters.  Such amount shall be appropriately adjusted (based on the actual
number of days elapsed relative to the total number of days in such calendar
quarter) for any share issuances or repurchases during a calendar quarter.  The
Base Management Fee for any partial month or quarter shall be appropriately
pro-rated (based on the number of days actually elapsed at the end of such
partial month or quarter relative to the total number of days in such month or
quarter).  For purposes of this Agreement, cash equivalents shall mean U.S.
government securities and commercial paper instruments maturing within 270 days
of the date of purchase of such instrument by the Corporation.  Notwithstanding
anything herein to the contrary, to the extent that the Adviser or an affiliate
of the Adviser provides investment advisory, collateral management or other
similar services to a subsidiary of the Corporation, the Base Management Fee
shall be reduced by an amount equal to the product of (a) the total fees paid to
the Adviser by such subsidiary for such services and (b) the percentage of such
subsidiary’s total equity that is owned, directly or indirectly, by the
Corporation.
 
(b)           The Incentive Fee shall be calculated and paid as set forth on
Schedule A hereto, as such schedule may be amended from time to time.
 
(c)           As set forth in Schedule A hereto, the Incentive Fee calculation
shall include a limitation such that the Corporation can only pay an Incentive
Fee for any quarter to the Adviser if, after giving effect to such payment, the
cumulative Incentives Fees paid to the Adviser from the date on which the
Corporation elected to be treated as a business development company through and
the date of such payment would be less than or equal to 20% of the Cumulative
Pre-Incentive Net Income (as such term is defined in Schedule A hereto) of the
Corporation.

 
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4.           Covenants of the Adviser.  The Adviser hereby covenants that it is
registered as an investment adviser under the Investment Advisers Act. The
Adviser hereby agrees that its activities shall at all times be in compliance in
all material respects with all applicable federal and state laws governing its
operations and investments.
 
5.           Excess Brokerage Commissions. The Adviser is hereby authorized, to
the fullest extent now or hereafter permitted by law, to cause the Corporation
to pay a member of a national securities exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of such exchange, broker or dealer would have charged
for effecting such transaction if the Adviser determines, in good faith and
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), size of order, difficulty of execution, and
operational facilities of the firm and the firm’s risk and skill in positioning
blocks of securities, that the amount of such commission is reasonable in
relation to the value of the brokerage and/or research services provided by such
member, broker or dealer, viewed in terms of either that particular transaction
or its overall responsibilities with respect to the Corporation’s portfolio, and
constitutes the best net result for the Corporation.
 
6.           Proxy Voting. The Adviser shall be responsible for voting any
proxies solicited by an issuer of securities held by the Corporation in the best
interest of the Corporation and in accordance with the Adviser’s proxy voting
policies and procedures, as any such proxy voting policies and procedures may be
amended from time to time.  The Corporation has been provided with a copy of the
Adviser’s proxy voting policies and procedures and has been informed as to how
it can obtain further information from the Adviser regarding proxy voting
activities undertaken on behalf of the Corporation.  The Adviser shall be
responsible for reporting the Corporation’s proxy voting activities, as
required, through periodic filings on Form N-PX.
 
7.           Limitations on the Employment of the Adviser. The services of the
Adviser to the Corporation are not, and shall not be, exclusive.  The Adviser
may engage in any other business or render similar or different services to
others including, without limitation, the direct or indirect sponsorship or
management of other investment based accounts or commingled pools of capital,
however structured, having investment objectives similar to those of the
Corporation; provided that its services to the Corporation hereunder are not
impaired thereby.  Nothing in this Agreement shall limit or restrict the right
of any manager, partner, officer or employee of the Adviser to engage in any
other business or to devote his or her time and attention in part to any other
business, whether of a similar or dissimilar nature, or to receive any fees or
compensation in connection therewith (including fees for serving as a director
of, or providing consulting services to, one or more of the portfolio companies
of the Corporation, subject at all times to applicable law).  So long as this
Agreement or any extension, renewal or amendment hereof remains in effect, the
Adviser shall be the only investment adviser for the Corporation, subject to the
Adviser’s right to enter into sub-advisory agreements.  The Adviser assumes no
responsibility under this Agreement other than to render the services called for
hereunder. It is understood that directors, officers, employees and stockholders
of the Corporation are or may become interested in the Adviser and its
affiliates, as directors, officers, employees, partners, stockholders, members,
managers or otherwise, and that the Adviser and directors, officers, employees,
partners, stockholders, members and managers of the Adviser and its affiliates
are or may become similarly interested in the Corporation as stockholders or
otherwise.

 
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Subject to any restrictions prescribed by law, by  the provisions of the Code of
Ethics of the Corporation and the Adviser and by the Adviser’s Allocation
Policy, the Adviser and its members, officers, employees and agents shall be
free from time to time to acquire, possess, manage and dispose of securities or
other investment assets for their own accounts, for the accounts of their family
members, for the account of any entity in which they have a beneficial interest
or for the accounts of others for whom they may provide investment advisory,
brokerage or other services (collectively, “Managed Accounts”), in transactions
that may or may not correspond with transactions effected or positions held by
the Corporation or to give advice and take action with respect to Managed
Accounts that differs from advice given to, or action taken on behalf of, the
Corporation; provided that the Adviser allocates investment opportunities to the
Corporation, over a period of time on a fair and equitable basis compared to
investment opportunities extended to other Managed Accounts.  The Adviser is
not, and shall not be, obligated to initiate the purchase or sale for the
Corporation of any security that the Adviser and its members, officers,
employees or agents may purchase or sell for its or their own accounts or for
the account of any other client if, in the opinion of the Adviser, such
transaction or investment appears unsuitable or undesirable for the
Corporation.  Moreover, it is understood that when the Adviser determines that
it would be appropriate for the Corporation and one or more Managed Accounts to
participate in the same investment opportunity, the Adviser shall seek to
execute orders for the Corporation and for such Managed Account(s) on a basis
that the Adviser considers to be fair and equitable over time.  In such
situations, the Adviser may (but is not required to) place orders for the
Corporation and each Managed Account simultaneously or on an aggregated
basis.  If all such orders are not filled at the same price, the Adviser may
cause the Corporation and each Managed Account to pay or receive the average of
the prices at which the orders were filled for the Corporation and all relevant
Managed Accounts on each applicable day.  If all such orders cannot be fully
executed under prevailing market conditions, the Adviser may allocate the
investment opportunities among participating accounts in a manner that the
Adviser considers equitable, taking into account, among other things, the size
of each account, the size of the order placed for each account and any other
factors that the Adviser deems relevant.
 
8.           Responsibility of Dual Directors, Officers and/or Employees. If any
person who is a manager, partner, officer or employee of the Adviser or the
Administrator is or becomes a director, officer and/or employee of the
Corporation and acts as such in any business of the Corporation, then such
manager, partner, officer and/or employee of the Adviser or the Administrator
shall be deemed to be acting in such capacity solely for the Corporation and not
as a manager, partner, officer and/or employee of the Adviser or the
Administrator or under the control or direction of the Adviser or the
Administrator, even if paid by the Adviser or the Administrator.

 
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9.           Limitation of Liability of the Adviser; Indemnification. The
Adviser (and its officers, managers, partners, agents, employees, controlling
persons, members and any other person or entity affiliated with the Adviser,
including without limitation its general partner and the Administrator) shall
not be liable to the Corporation for any action taken or omitted to be taken by
the Adviser in connection with the performance of any of its duties or
obligations under this Agreement or otherwise as an investment adviser of the
Corporation, except to the extent specified in Section 36(b) of the Investment
Company Act concerning loss resulting from a breach of fiduciary duty (as the
same is finally determined by judicial proceedings) with respect to the receipt
of compensation for services, and the Corporation shall indemnify, defend and
protect the Adviser (and its officers, managers, partners, agents, employees,
controlling persons, members and any other person or entity affiliated with the
Adviser, including without limitation its general partner and the Administrator,
each of whom shall be deemed a third party beneficiary hereof) (collectively,
the “Indemnified Parties”) and hold them harmless from and against all damages,
liabilities, costs and expenses (including reasonable attorneys’ fees and
amounts reasonably paid in settlement) incurred by the Indemnified Parties in or
by reason of any pending, threatened or completed action, suit, investigation or
other proceeding (including an action or suit by or in the right of the
Corporation or its security holders) arising out of or otherwise based upon the
performance of any of the Adviser’s duties or obligations under this Agreement
or otherwise as an investment adviser of the Corporation. Notwithstanding the
preceding sentence of this Paragraph 9 to the contrary, nothing contained herein
shall protect or be deemed to protect the Indemnified Parties against or entitle
or be deemed to entitle the Indemnified Parties to indemnification in respect
of, any liability to the Corporation or its security holders to which the
Indemnified Parties would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of the Adviser’s duties or by
reason of the reckless disregard of the Adviser’s duties and obligations under
this Agreement (as the same shall be determined in accordance with the
Investment Company Act and any interpretations or guidance by the Securities and
Exchange Commission or its staff thereunder).
 
10.         Effectiveness, Duration and Termination of Agreement. This Agreement
shall become effective as of the first date above written. This Agreement shall
remain in effect for two years, and thereafter shall continue automatically for
successive annual periods, provided that such continuance is specifically
approved at least annually by (a) the vote of the Board of Directors, or by the
vote of a majority of the outstanding voting securities of the Corporation and
(b) the vote of a majority of the Corporation’s Directors who are not parties to
this Agreement or “interested persons” (as such term is defined in Section
2(a)(19) of the Investment Company Act) of any such party, in accordance with
the requirements of the Investment Company Act. This Agreement may be terminated
at any time, without the payment of any penalty, upon 60 days’ written notice,
by the vote of a majority of the outstanding voting securities of the
Corporation, or by the vote of the Corporation’s Directors or by the Adviser.
This Agreement shall automatically terminate in the event of its “assignment”
(as such term is defined for purposes of Section 15(a)(4) of the Investment
Company Act). The provisions of Section 9 of this Agreement shall remain in full
force and effect, and the Adviser shall remain entitled to the benefits thereof,
notwithstanding any termination of this Agreement. Further, notwithstanding the
termination or expiration of this Agreement as aforesaid, the Adviser shall be
entitled to any amounts owed under Section 3 through the date of termination or
expiration and Section 9 shall continue in force and effect and apply to the
Adviser and its representatives as and to the extent applicable.

 
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11.         Notices. Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed, postage prepaid, to the other party at its
principal office.
 
12.         Amendments. This Agreement may be amended by mutual consent, but the
consent of the Corporation must be obtained in conformity with the requirements
of the Investment Company Act.
 
13.         Entire Agreement; Governing Law. This Agreement contains the entire
agreement of the parties and supersedes all prior agreements, understandings and
arrangements with respect to the subject matter hereof. This Agreement shall be
construed in accordance with the laws of the State of New York and the
applicable provisions of the Investment Company Act. To the extent the
applicable laws of the State of New York, or any of the provisions herein,
conflict with the provisions of the Investment Company Act, the latter shall
control.
 
*           *           *           *
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed on the date above written.

     
GOLUB CAPITAL BDC, INC.
               
Name: 
/s/ David B. Golub                
Title:
Chief Executive Officer          
GC ADVISORS LLC
               
Name: 
/s/ David B. Golub                
Title:
Manager      

 
 
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SCHEDULE A
 
Calculation and Payment of Incentive Fee
 
The Incentive Fee shall be calculated as provided below and payable (i)
quarterly in arrears or (ii) in the event that the Investment Advisory Agreement
is terminated, as of the termination date (each, a “Performance Period”). The
Adviser shall not be required to reimburse the Corporation for any part of an
Incentive Fee it receives that was based on accrued interest that the
Corporation accrues but never actually receives.
 
Income and Capital Gains Incentive Fee Calculation
 
The income and capital gains incentive fee calculation (the “Income and Capital
Gains Incentive Fee Calculation”) has two parts: (i) the income component and
(ii) the capital gains component.
 
Income Component
 
The income component is calculated quarterly in arrears based on the
Pre-Incentive Fee Net Investment Income of the Corporation for the immediately
preceding calendar quarter.
 
Pre-Incentive Fee Net Investment Income shall not include any realized capital
gains, realized capital losses or unrealized capital appreciation or
depreciation.  Once calculated, Pre-Incentive Fee Net Investment Income,
expressed as a rate of return on the value of the net assets of the Corporation
at the end of the immediately preceding calendar quarter, shall be compared to a
fixed “hurdle rate” of 2.0% quarterly.  For purposes of this calculation, net
assets for any period shall be equal to total assets less indebtedness of the
Corporation, before taking into account any Incentive Fees payable during such
period.  Pre-Incentive Fee Net Investment Income used to calculate the income
component of the Incentive Fee shall also be included in the amount of the total
assets of the Corporation used to calculate the 1.375% Base Management Fee.  For
purposes of this calculation, total assets of the Corporation shall exclude cash
and cash equivalents and shall include assets purchased with borrowed funds.
 
The income component of the Income and Capital Gains Incentive Fee Calculation
with respect to the Pre-Incentive Fee Net Investment Income of the corporation
shall be calculated quarterly, in arrears, as follows:
 
 
•
zero in any calendar quarter in which the Pre-Incentive Fee Net Investment
Income does not exceed the hurdle rate;

 
 
•
100.0% of the Pre-Incentive Fee Net Investment Income of the Corporation with
respect to that portion of such Pre-Incentive Fee Net Investment Income, if any,
that exceeds the hurdle rate but is less than 2.5% in any calendar quarter; and

 
 
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•
20.0% of the amount of the Pre-Incentive Fee Net Investment Income of the
Corporation, if any, that exceeds 2.5% in any calendar quarter.

 
The portion of the Pre-Incentive Fee Net Investment Income which exceeds the
hurdle rate but is less than 2.5% is the “catch-up” provision.  These
calculations shall be appropriately adjusted for any share issuances or
repurchases during the quarter (based on the actual number of days elapsed
relative to the total number of days in such calendar quarter).
 
Capital Gains Component
 
The second part of the Incentive Fee Calculation (the “Capital Gain Incentive
Fee”) shall equal (a) 20.0% of the Capital Gain Incentive Fee Base of the
Corporation (as defined below), if any, calculated in arrears as of the end of
each calendar year (or upon termination of the Investment Advisory Agreement, as
of the termination date), commencing with the year ending December 31, 2010,
less (b) the aggregate amount of any previously paid Capital Gain Incentive
Fees.  For purposes of this calculation, the Capital Gain Incentive Fee Base
shall equal the sum of (1) the realized capital gains of the Corporation, if
any, on a cumulative positive basis from the date of the Corporation’s election
to be treated as a business development company through the end of each calendar
year, (2) all realized capital losses of the Corporation on a cumulative basis
and (3) all unrealized capital depreciation of the Corporation on a cumulative
basis.
 
The cumulative aggregate realized capital gains of the Corporation shall be
calculated as the sum of the differences, if positive, between (a) the net sales
price of each investment in the Corporation’s portfolio when sold and (b) the
accreted or amortized cost basis of such investment.  The cumulative aggregate
realized capital losses of the Corporation shall be calculated as the sum of the
amounts by which (a) the net sales price of each investment in the Corporation’s
portfolio when sold is less than (b) the accreted or amortized cost basis of
such investment.  The aggregate unrealized capital depreciation of the
Corporation shall be calculated as the sum of the differences, if negative,
between (a) the valuation of each investment in the Corporation’s portfolio as
of the applicable Capital Gain Incentive Fee calculation date and (b) the
accreted or amortized cost basis of such investment.
 
The sum of the Income Incentive Fee and the Capital Gain Incentive Fee shall be
the Income Fee.

 
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Limitation on Incentive Fee
 
Each quarterly Incentive Fee payable on the Income and Capital Gain Incentive
Fee Calculation shall be subject to a cap (the “Incentive Fee Cap”).  The
Incentive Fee Cap in any quarter shall be equal to the difference between (a)
20.0% of Cumulative Pre-Incentive Fee Net Income (as defined below) and (b)
cumulative Incentive Fees of any kind paid to the Adviser by the Corporation
since the effective date of the Corporation’s election to be treated as a
business development company. To the extent the Incentive Fee Cap is zero or a
negative value in any quarter, no incentive fee shall be payable in that
quarter. “Cumulative Pre-Incentive Fee Net Income” shall be equal to the sum of
(a) Pre-Incentive Fee Net Investment Income (as defined below) for each period
since the effective date of the Corporation’s election to be treated as a
business development company and (b) cumulative aggregate realized capital
gains, cumulative aggregate realized capital losses, cumulative aggregate
unrealized capital depreciation and cumulative aggregate unrealized capital
appreciation since the date of effective the Corporation’s election to be
treated as a business development company.  “Pre-Incentive Fee Net Investment
Income” means, with respect to any calendar quarter, interest income, dividend
income and any other income (including any other fees such as commitment,
origination, structuring, diligence and consulting fees or other fees that the
Corporation receives from portfolio companies but excluding fees for providing
managerial assistance) accrued during such calendar quarter, minus operating
expenses for such calendar quarter (including the Base Management Fee, taxes,
any expenses payable under the Investment Advisory Agreement and the
Administration Agreement, and any interest expense and dividends paid on any
outstanding preferred stock, but excluding the Incentive Fee, if any).
Pre-Incentive Fee Net Investment Income includes, in the case of investments
with a deferred interest feature such as market discount, debt instruments with
payment in kind (“PIK”) interest, preferred stock with PIK dividends and zero
coupon securities, accrued income that the Corporation has not yet received in
cash.
 
If, for any relevant period, the Incentive Fee Cap calculation results in the
Corporation paying less than the amount of the Incentive Fee calculated above,
then the difference between the Incentive Fee and the Incentive Fee Cap will not
be paid by the Corporation, and will not be received by the Adviser, as an
Incentive Fee, either at the end of such relevant period or at the end of any
future period.

 
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