Exhibit 10.1

 

INTERIM MANAGEMENT AGREEMENT

 

This Interim Management Agreement (this “Agreement”), dated as of January 3,
2017 (the “Execution Date”), is by and between American Capital Senior
Floating, Ltd., a Maryland corporation (the “Company”), and Ivy Hill Asset
Management, L.P., a Delaware limited partnership (the “Manager”).

 

W I T N E S S E T H:

 

WHEREAS, the Company is a closed-end, non-diversified management investment
company that has elected to be treated as a business development company (“BDC”)
under the Investment Company Act of 1940, as amended (the “Investment Company
Act”);

 

WHEREAS, the Manager is an investment adviser that has registered under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”);

 

WHEREAS, pursuant to a Management Agreement dated as of January 15, 2014 (the
“Prior Management Agreement”) by and between the Company and American Capital
ACSF Management, LLC, a Delaware limited liability company (the “Prior
Manager”), the Prior Manager has heretofore served as the investment adviser to
the Company;

 

WHEREAS, as of the date hereof, the Manager has acquired the Prior Manager,
thereby causing the Prior Management Agreement to terminate in accordance with
its terms; and

 

WHEREAS, in accordance with Rule 15a-4 under the Investment Company Act, the
Company desires to retain the Manager to furnish investment advisory services to
the Company and its subsidiaries, and the Manager wishes to be retained to
provide such services, on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Manager hereby
agree as follows:

 

1.             Duties of Manager.

 

(a)           Employment of Manager.  The Company hereby employs the Manager to
act as the investment adviser to the Company and its subsidiaries and to manage
the day-to-day operations of the Company and its subsidiaries and the investment
and reinvestment of the assets of the Company and its subsidiaries, subject at
all times to the further terms and conditions herein set forth and to the
supervision of, and such further limitations or parameters as may be imposed by,
the Board of Directors of the Company (the “Board”), during the term hereof in
accordance with:

 

(i)            the investment objectives, policies and restrictions of the
Company, which objectives, policies and restrictions are those set forth in the
Company’s Registration Statement on Form N-2 (Registration No. 333-190357),
initially filed with the Securities and Exchange Commission (the “SEC”) on
August 2, 2013, as supplemented, amended or superseded from time to time;

 

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(ii)           the Investment Company Act and the Advisers Act, subject to the
terms of any exemptive order applicable to the Company; and

 

(iii)          all other applicable federal and state laws, rules and
regulations, and the Company’s articles of incorporation and bylaws.

 

The Manager hereby accepts such employment and agrees during the term hereof to
so render investment and advisory services to the Company and its subsidiaries
as required herein, subject to the payment of compensation and other terms and
conditions provided for herein.

 

(b)           Certain Services.  Without limiting the generality of
Section 1(a), the Manager will be responsible for the day-to-day operations of
the Company and its subsidiaries and will perform (or cause to be performed)
such services and activities relating to the investments and operations of the
Company and its subsidiaries as may be appropriate, which, subject to the
oversight and any required approval of the Board, may include, without
limitation, unless otherwise instructed by the Board:

 

i.                  maintaining an investment committee of the Manager, the
members of which shall consist of officers of the Manager or its affiliates,
which may, among other responsibilities, implement changes to the Company’s
operating policies and guidelines;

 

ii.                 serving as a consultant to the Company and its subsidiaries
with respect to the periodic review of their investments, borrowings and
operations and the policies and recommendations with respect thereto;

 

iii.                serving as a consultant to the Company and its subsidiaries
with respect to selecting, purchasing, financing, monitoring and disposing of
its investments;

 

iv.                serving as a consultant to the Company and its subsidiaries
with respect to decisions regarding any financings, hedging activities or
borrowings undertaken by the Company or its subsidiaries, including
(1) assisting the Company in developing criteria for debt and equity financing
that is specifically tailored to the Company’s investment objectives and
(2) advising the Company and its subsidiaries with respect to obtaining
appropriate financing for its investments;

 

v.                 subject to Section 2(a), providing the Company with a
management team, including a Chief Executive Officer, Chief Financial Officer
and Chief Investment Officer or similar positions, along with appropriate
support personnel to provide the management services to be provided by the
Manager to the Company hereunder, who shall devote such of their time to the
management of the Company as necessary and appropriate, commensurate with the
level of activity of the Company from time to time;

 

vi.                advising the Company with respect to any equity incentive
plans that it may establish for its independent directors;

 

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vii.               providing the Company and its subsidiaries with portfolio
management;

 

viii.              engaging and supervising, on the Company’s behalf and at the
Company’s expense, independent contractors that provide investment banking,
securities brokerage, insurance, diligence, legal, accounting, valuation,
transfer agent, registrar and such other services as may be required relating to
the Company’s and its subsidiaries’ operations or investments (or potential
investments);

 

ix.                providing executive and administrative personnel, office
space and office services required in rendering services to the Company and its
subsidiaries;

 

x.                 performing and supervising the performance of administrative
functions necessary in the Company’s and its subsidiaries’ management as may be
agreed upon by the Manager and the Board, including, without limitation, the
services in respect of any equity incentive plan the Company may establish for
its independent directors, the collection of revenues and the payment of the
Company’s or its subsidiaries’ debts and obligations and maintenance of
appropriate information technology services to perform such administrative
functions;

 

xi.                communicating on behalf of the Company with the holders of
any of the Company’s equity or debt securities as required to satisfy the
reporting and other requirements of any governmental bodies or agencies or
trading exchanges or markets and to maintain effective relations with such
holders, including website maintenance, logo design, analyst presentations,
investor conferences and annual meeting arrangements;

 

xii.               counseling the Company in connection with policy decisions to
be made by the Board;

 

xiii.              counseling the Company regarding the requirements to qualify
as a regulated investment company (“RIC”) under the Internal Revenue Code of
1986, as amended (including the U.S. Treasury regulations promulgated
thereunder, the “Code”), and monitoring compliance with the various RIC
qualification tests and other rules set out in the Code;

 

xiv.             counseling the Company regarding the requirements to qualify as
a BDC and monitoring compliance with the various BDC qualification tests and
other rules set out in the Investment Company Act;

 

xv.              offering to make significant managerial assistance available to
each of the Company’s portfolio companies, as required by the Investment Company
Act;

 

xvi.             voting any proxies solicited by an issuer of securities held by
the Company;

 

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xvii.            furnishing reports and statistical and economic research to the
Company regarding the activities and services performed for the Company or its
subsidiaries by the Manager;

 

xviii.           monitoring the operating performance of the Company’s and its
subsidiaries’ investments and providing periodic reports with respect thereto to
the Board, including comparative information with respect to such operating
performance and budgeted or projected operating results;

 

xix.             investing and re-investing any of the Company’s or its
subsidiaries’ monies and securities (including in short-term investments,
payment of fees, costs and expenses, or payments of dividends or distributions
to the Company’s stockholders) and advising the Company as to its capital
structure and capital-raising activities;

 

xx.              engaging on behalf of the Company or its subsidiaries, or
recommending their retention of, qualified accountants and legal counsel, as
applicable, to (1) assist in developing appropriate procedures, internal
controls, compliance procedures and testing systems with respect to the
provisions of the Code applicable to RICs and (2) conduct quarterly compliance
reviews with respect thereto;

 

xxi.             qualifying the Company and its subsidiaries to do business in
all jurisdictions in which such qualification is required and ensuring the
Company and its subsidiaries obtain and maintain all appropriate licenses;

 

xxii.            assisting the Company and its subsidiaries in complying with
all regulatory requirements applicable to it in respect of its business
activities, including preparing or causing to be prepared all financial
statements required under applicable regulations and contractual undertakings
and all reports and documents, if any, required under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended;

 

xxiii.           taking all necessary actions to enable the Company and its
subsidiaries to make required tax filings and reports, including soliciting
stockholders for required information to the extent necessary under the Code
applicable to RICs;

 

xxiv.           assisting in handling and resolving all claims, disputes or
controversies (including all litigation, arbitration, settlement or other
proceedings or negotiations) in which the Company or its subsidiaries may be
involved or to which it may be subject arising out of its day-to-day operations;

 

xxv.            arranging marketing materials, advertising, industry group
activities (such as conference participations and industry organization
memberships) and other promotional efforts designed to promote the Company’s
business;

 

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xxvi.           using commercially reasonable efforts to cause expenses incurred
by or on behalf of the Company or its subsidiaries to be commercially reasonable
or commercially customary;

 

xxvii.          performing such other services as may be required from time to
time for the management and other activities relating to the Company’s and its
subsidiaries’ assets, business and operations as the Board reasonably requests
or the Manager deems appropriate under the particular circumstances; and

 

xxviii.         using commercially reasonable efforts to cause the Company and
its subsidiaries to comply with all applicable laws.

 

The Manager shall have the power and authority on behalf of the Company to
effectuate its investment decisions for the Company and its subsidiaries,
including the execution and delivery of all documents relating to their
investments and the placing of orders for other purchase or sale transactions on
behalf of the Company and its subsidiaries.  In the event that the Company or
any of its subsidiaries determine to incur debt financing, the Manager shall
arrange for such financing on its behalf, subject to the oversight and any
required approval of the Board.  If it is necessary for the Manager to make
investments on behalf of the Company through a special purpose vehicle, the
Manager shall have authority to create or arrange for the creation of such
special purpose vehicle and to make such investments through such special
purpose vehicle in accordance with the Investment Company Act.

 

(c)           Sub-Advisors.  Subject to the requirements of the Investment
Company Act (including any approval by the vote of holders of a majority of
outstanding voting securities of the Company required under Section 15(a) of the
Investment Company Act), the Manager is hereby authorized (but not required) to
enter into one or more sub-advisory agreements with other investment advisers
(each, a “Sub-Advisor”) pursuant to which the Manager may obtain the services of
the Sub-Advisor(s) to assist the Manager in providing the investment advisory
services required to be provided by the Manager under this Agreement. 
Specifically, the Manager may retain a Sub-Advisor to recommend specific
securities or other investments based upon the Company’s investment objectives,
policies and restrictions, and work, along with the Manager, in structuring,
negotiating, arranging or effecting the acquisition or disposition of such
investments and monitoring investments on behalf of the Company and its
subsidiaries, subject in all cases to the oversight and any required approval of
the Manager and the Board.  Any sub-advisory agreement entered into by the
Manager shall be in accordance with the requirements of the Investment Company
Act and other applicable federal and state law.  The Manager, and not the
Company, shall be responsible for any compensation payable to any Sub-Advisor. 
Nothing in this subsection (c) will obligate the Manager to pay any expenses
that are the expenses of the Company under Section 2.

 

(d)           Independent Contractors.  The Manager and any Sub-Advisor shall
for all purposes herein each 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 Company and its subsidiaries in any way or otherwise be
deemed an agent of the Company and its subsidiaries.

 

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(e)           Books and Records.  The Manager shall keep and preserve for the
period required by the Investment Company Act any books and records relevant to
the provision of its investment advisory services to the Company and its
subsidiaries and shall specifically maintain all books and records with respect
to the portfolio transactions of the Company and its subsidiaries and shall
render to the Board such periodic and special reports as the Board may
reasonably request.  The Manager agrees that all records that it maintains for
the Company and its subsidiaries are the property of the Company and shall
surrender promptly to the Company any such records upon the Company’s request;
provided that the Manager may retain a copy of such records.

 

2.             Allocation of Costs and Expenses.

 

(a)           Expenses Payable by Manager.  The Manager shall be responsible for
the expenses related to any and all personnel of the Manager and its affiliates
who provide services to the Company and its subsidiaries pursuant to this
Agreement or to the Manager pursuant to the Administration Agreement between the
Manager and Ares Operations LLC (the “Administrator”) (including each of the
officers of the Company and any directors of the Company who are also employees
of the Manager or any of its affiliates), including, without limitation,
salaries, bonus and other wages, payroll taxes and the cost of employee benefit
plans of such personnel, and costs of insurance with respect to such personnel.

 

(b)           Expenses Payable by the Company.  Subject to Section 2(c), the
Company shall pay all of its costs and expenses and shall reimburse the Manager
or its affiliates for expenses of the Manager and its affiliates incurred on
behalf of the Company or its subsidiaries, excepting only those expenses that
are specifically the responsibility of the Manager pursuant to Section 2(a) of
this Agreement.  Without limiting the generality of the foregoing, it is
specifically agreed that the following costs and expenses of the Company or any
subsidiary shall be paid by the Company and shall not be paid by the Manager or
affiliates of the Manager:

 

(i)            costs incurred in connection with formation and capital raising
activities;

 

(ii)           transaction costs incident to the acquisition, disposition,
financing, hedging and ownership of the Company’s and its subsidiaries’
investments;

 

(iii)          diligence costs incurred for prospective investments;

 

(iv)          expenses incurred in contracting with third parties;

 

(v)           external legal, auditing, accounting, consulting, investor
relations, portfolio valuation, brokerage and administrative fees and expenses;

 

(vi)          the compensation and expenses of the Company’s directors who are
not employees of the Manager or any of its affiliates and the cost of liability
insurance to indemnify the Company’s directors and officers and the officers and
employees of the Manager and its affiliates who provide services to the Company;

 

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(vii)         the costs associated with the Company’s or any of its
subsidiaries’ establishment and maintenance of any indebtedness (including
commitment fees, accounting fees, legal fees, closing costs, rating agency fees
and similar expenses);

 

(viii)        expenses related to the payment of dividends;

 

(ix)          costs incurred by the Board and personnel of the Manager or its
affiliates for travel on the Company’s behalf;

 

(x)           expenses relating to communications to holders of the Company’s
securities and in complying with the continuous reporting and other requirements
of the SEC and other governmental bodies;

 

(xi)          tax and license fees applicable to the Company and its
subsidiaries, including external fees for tax and regulatory compliance;

 

(xii)         insurance costs incurred by the Company and its subsidiaries;

 

(xiii)        transfer agent, custodial, trustee, third party loan
administration and exchange listing fees;

 

(xiv)        the costs of printing and mailing proxies and reports to the
Company’s stockholders;

 

(xv)         the costs of establishing and maintaining the Company’s website;

 

(xvi)        all costs of organizing, modifying or dissolving the Company or any
subsidiary and costs in preparation of entering into or exiting any business
activity;

 

(xvii)       the Company’s pro rata portion of costs associated with any
computer software, hardware or information technology services that are used by
the Company or its subsidiaries;

 

(xviii)      the Company’s pro rata portion of the costs and expenses incurred
with respect to market information systems and publications, research
publications and materials used by it;

 

(xix)        settlement, clearing, trustee, prime brokerage and custodial fees
and expenses relating to the Company and its subsidiaries;

 

(xx)         the costs of maintaining compliance with all federal, state and
local rules and regulations or any other regulatory agency (as such costs relate
to us), all taxes and license fees and all insurance costs incurred on behalf of
the Company and its subsidiaries;

 

(xxi)        the costs of administering the Company’s equity incentive plans;
and

 

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(xxii)       the Company’s pro rata portion of rent (including disaster recovery
facility costs and expenses), telephone, utilities, office furniture, equipment,
machinery and other office, internal and overhead expenses of the Manager and
its affiliates required for the operations of the Company and its subsidiaries.

 

(c)           Reimbursement of Expenses.  Costs and expenses incurred by the
Manager on behalf of the Company and its subsidiaries shall be reimbursed
monthly to the Manager.  The Manager shall prepare a written statement in
reasonable detail documenting the costs and expenses of the Company and its
subsidiaries and those incurred by the Manager on behalf of the Company and its
subsidiaries during each month, and shall deliver such written statement to the
Company within thirty (30) days after the end of each month.  The Company shall
pay all amounts payable to the Manager pursuant to Section 2(b) within five
(5) business days after the receipt of the written statement without demand,
deduction, offset or delay.  Cost and expense reimbursement to the Manager shall
be subject to adjustment at the end of each calendar year in connection with the
annual audit of the Company.  The provisions of this Section 2 shall survive the
expiration or earlier termination of this Agreement to the extent such expenses
have previously been incurred or are incurred in connection with such expiration
or termination.

 

(d)           Portfolio Company’s Compensation.  In certain circumstances the
Manager, any Sub-Advisor, or any of their respective affiliates, may receive
compensation from a portfolio company, in connection with the Company’s
investment in such portfolio company.  Any compensation received by the Manager,
Sub-Advisor, or any of their respective affiliates, attributable to the
Company’s investment in any portfolio company, in excess of any of the
limitations in or exemptions granted from the Investment Company Act, shall be
delivered promptly to the Company, and the Company will retain such excess
compensation for the benefit of its stockholders.

 

3.             Compensation of Manager.  The Company agrees to pay, and the
Manager agrees to accept, as compensation for the services provided by the
Manager hereunder, a management fee as hereinafter set forth (the “Management
Fee”).  To the extent permitted by applicable law, the Manager may elect, or the
Company may adopt a deferred compensation plan pursuant to which the Manager may
elect, to defer all or a portion of its fees hereunder for a specified period of
time.

 

(a)           Management Fee.  The Management Fee shall be 0.8% per annum of the
Company’s total assets, excluding cash and cash equivalents and net unrealized
appreciation or depreciation, each as determined under GAAP at the end of the
most recently completed fiscal quarter.  Management Fees for any partial quarter
shall be prorated based on the number of days in such quarter.  Notwithstanding
anything herein to the contrary, to the extent that the Manager or an affiliate
of the Manager provides investment advisory, collateral management or other
similar services to a subsidiary of the Company for which the Manager or such
affiliate receives a fee, the Management Fee shall be reduced by an amount equal
to the product of (a) the total fees paid to the Manager by such subsidiary for
such services and (b) the percentage of such subsidiary’s total equity that is
owned, directly or indirectly, by the Company.

 

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(b)           Payment of Management Fee.  During the term of this Agreement, any
compensation payable to the Manager pursuant to Section 3(a) shall be accrued
daily and paid by the Company to an interest bearing escrow account pursuant to
the terms of an Escrow Agreement.  If, during the term of this Agreement, a new
management agreement with the Manager is approved by a majority of the Company’s
outstanding voting securities (as defined in the Investment Company Act), then
the amount held in the escrow account (plus interest and income earned thereon
and proceeds thereof) shall be paid to Manager.  If, however, during the term of
this Agreement a new management agreement with the Manager is not approved by a
majority of the Company’s outstanding voting securities (as defined in the
Investment Company Act), then the Manager shall be entitled to the lesser of:
(i) any costs incurred in performing this Agreement (plus interest and income
earned thereon and proceeds thereof) or (ii) the total amount held in the escrow
account (plus interest and income earned thereon and proceeds thereof).

 

(c)           Waiver or Deferral of Fee.  The Manager shall have the right to
elect to waive or defer all or a portion of the Management Fee that would
otherwise be paid to it.  Prior to the payment of any fee to the Manager, the
Company shall obtain written instructions from the Manager with respect to any
waiver or deferral of any portion of such fees.  Any portion of a deferred fee
payable to the Manager and not paid over to the Manager with respect to any
month, calendar quarter or year shall be deferred without interest and may be
paid over in any such other month prior to the occurrence of a liquidity event,
as the Manager may determine upon written notice to the Company.  For the
avoidance of doubt, any amounts paid into an escrow account pursuant to
Section 3(b) shall not be deemed fees waived or deferred by the Manager pursuant
to this Section 3(c) unless the Manager so notifies the Company in writing.

 

4.             Representations, Warranties and Covenants of Manager.  The
Manager represents and warrants that it is registered as an investment adviser
under the Advisers Act.  The Manager 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, including the Investment
Company Act and the Advisers Act.  The Manager agrees to observe and comply with
applicable provisions of the code of ethics adopted by the Company pursuant to
Rule 17j-1 under the Investment Company Act, as such code of ethics may be
amended from time to time.

 

5.             Excess Brokerage Commissions.  The Manager is hereby authorized,
to the fullest extent now or hereafter permitted by law, to cause the Company 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 that transaction, if the Manager determines in good faith, taking
into account such factors as price (including the applicable brokerage
commission or dealer spread), size of order, difficulty of execution,
operational facilities of the firm and the firm’s risk and skill in positioning
blocks of securities, that such amount of 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 Company’s portfolio, and
constitutes the best net results for the Company.

 

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6.             Proxy Voting.  The Manager shall be responsible for voting any
proxies solicited by an issuer of securities held by the Company in the best
interest of the Company and in accordance with the Manager’s proxy voting
policies and procedures, as any such proxy voting policies and procedures may be
amended from time to time.  The Company has been provided with a copy of the
Manager’s proxy voting policies and procedures and has been informed as to how
it can obtain further information from the Manager regarding proxy voting
activities undertaken on behalf of the Company.

 

7.             Activities of Manager.  The services of the Manager to the
Company and its subsidiaries are not exclusive, and the Manager and/or any of
its affiliates 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 Company, so long as its services to the Company and its subsidiaries
hereunder are not impaired thereby, and nothing in this Agreement shall limit or
restrict the right of any member, manager, partner, officer or employee of the
Manager or any such affiliate 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 Company’s portfolio companies, subject to
applicable law).  So long as this Agreement or any extension, renewal or
amendment remains in effect, the Manager shall be the only investment adviser
for the Company and its subsidiaries, subject to the Manager’s right to enter
into sub-advisory agreements.  The Manager 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 Company
are or may become interested in the Manager and its affiliates, as members,
directors, managers, partners, officers, employees or otherwise, and that the
Manager and directors, officers, employees, partners, stockholders, members and
managers of the Manager and its affiliates are or may become similarly
interested in the Company as stockholders or otherwise.

 

8.             Responsibility of Dual Directors, Officers and/or Employees.  If
any person who is a member, manager, partner, officer or employee of the Manager
or the Administrator or an affiliate thereof is or becomes a director, officer
and/or employee of the Company and acts as such in any business of the Company,
then while he or she is performing services on behalf of the Company as a
director, officer and/or employee of the Company, such member, manager, partner,
officer and/or employee of the Manager or the Administrator or an affiliate
shall be deemed to be acting in such capacity solely for the Company, and not as
a member, manager, partner, officer or employee of the Manager or the
Administrator or under the control or direction of the Manager or the
Administrator, even if paid by the Manager or the Administrator.

 

9.             Limitation of Liability of Manager; Indemnification.  The Manager
and its affiliates and its and its affiliates’ respective directors, officers,
employees, members, managers, partners and stockholders (each of whom shall be
deemed a third party beneficiary hereof) (collectively, the “Indemnified
Parties”) shall not be liable to the Company or its subsidiaries or its and its
subsidiaries’ respective directors, officers, employees, members, managers,
partners or stockholders for any action taken or omitted to be taken by the
Manager in connection with the performance of any of its duties or obligations
under this Agreement or otherwise as an

 

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investment adviser of the Company, 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.  The
Company shall indemnify, defend and protect the Indemnified Parties and hold
them harmless from and against all claims or liabilities (including reasonable
attorneys’ fees) and other expenses reasonably 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 Company or its security holders) arising out of or in connection
with the performance of any of the Manager’s duties or obligations under this
Agreement, any sub-advisory agreement or otherwise as an investment adviser of
the Company, in each case to the fullest extent such indemnification is then
permitted under the Company’s articles of incorporation, the Investment Company
Act, the Advisers Act, the laws of the State of Maryland and any other
applicable law.

 

10.          Effectiveness, Duration and Termination.

 

(a)           This Agreement shall become effective as of the date hereof. 
Unless terminated as herein provided and subject to all of the other terms and
conditions hereof, this Agreement shall remain in full force and effect until
the first of the following to occur: (i) the effective date of a new management
agreement relating to the Manager’s management of the Company which has been
approved by a majority of the Company’s outstanding voting securities (as
defined in the Investment Company Act) or (ii) the 151st calendar day following
the date hereof.

 

(b)           This Agreement may be terminated at any time, without the payment
of any penalty, upon (i) 10 calendar days’ written notice by the vote of holders
of a majority of the outstanding voting securities of the Company or the vote of
the Board or (ii) 60 days’ written notice by the Manager.

 

(c)           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); provided that nothing herein shall cause this Agreement
to terminate upon or otherwise restrict a transaction that does not result in a
change of actual control or management of the Manager.

 

(d)           The provisions of Section 9 of this Agreement shall remain in full
force and effect, and the Manager shall remain entitled to the benefits thereof,
notwithstanding any termination or expiration of this Agreement.  Further,
notwithstanding the termination or expiration of this Agreement as aforesaid,
the Manager 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 Manager and its representatives as and to the extent
applicable.

 

11.          Third Party Beneficiaries.  Nothing in this Agreement, either
express or implied, is intended to or shall confer upon any person other than
the parties hereto and the Indemnified Parties any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

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12.          Amendments of this Agreement.  This Agreement may not be amended or
modified except by an instrument in writing signed by both parties hereto, and
upon the consent of stockholders of the Company in conformity with the
requirements of the Investment Company Act.

 

13.          Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, and the applicable
provisions of the Investment Company Act, if any.  To the extent that the
applicable laws of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, if any,
the latter shall control.  The parties hereto unconditionally and irrevocably
consent to the exclusive jurisdiction of the federal and state courts located in
the State of New York and waive any objection with respect thereto, for the
purpose of any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.

 

14.          No Waiver.  The failure of either party hereto to enforce at any
time for any period the provisions of or any rights deriving from this Agreement
shall not be construed to be a waiver of such provisions or rights or the right
of such party thereafter to enforce such provisions, and no waiver shall be
binding unless executed in writing by all parties hereto.

 

15.          Severability.  If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to either
party hereto.  Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.

 

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

 

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

 

18.          Notices.  All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by overnight courier service (with signature required), by facsimile, or
by registered or certified mail (postage prepaid, return receipt requested) to
the parties hereto at their respective principal executive office addresses.

 

19.          Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and undertakings, both written and oral, between the
parties hereto with respect to such subject matter.

 

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20.          Certain Matters of Construction.

 

(a)           The words “hereof,” “herein,” “hereunder” and words of similar
import shall refer to this Agreement as a whole and not to any particular
Section or provision of this Agreement, and reference to a particular Section of
this Agreement shall include all subsections thereof.

 

(b)           Definitions shall be equally applicable to both the singular and
plural forms of the terms defined, and references to the masculine, feminine or
neuter gender shall include each other gender.

 

(c)           The word “including” shall mean including without limitation.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

 

 

 

AMERICAN CAPITAL SENIOR FLOATING, LTD.

 

 

 

 

 

 

 

By:

/s/ Kevin R. Braddish

 

Name:

Kevin R. Braddish

 

Title:

Duly Authorized Signatory

 

 

 

 

 

 

 

IVY HILL ASSET MANAGEMENT, L.P.

 

 

 

 

 

 

 

By:

/s/ Mitchell Goldstein

 

Name:

Mitchell Goldstein

 

Title:

Authorized Signatory

 

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