Exhibit 10.1

AMENDED AND RESTATED

INVESTMENT ADVISORY MANAGEMENT AGREEMENT

BETWEEN

APOLLO INVESTMENT CORPORATION

AND

APOLLO INVESTMENT MANAGEMENT, L.P.

Amended and Restated Agreement made this 18th day of March 2010, by and between
APOLLO INVESTMENT CORPORATION, a Maryland corporation (the “Corporation”), and
APOLLO INVESTMENT MANAGEMENT L.P., a Delaware limited partnership (the
“Adviser”).

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

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

WHEREAS, the Corporation desires to retain the Adviser to furnish investment
advisory services to the Corporation on the terms and conditions hereinafter set
forth, and the Adviser wishes to be retained to provide such services.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the parties hereby agree as follows:

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, 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 Corporation’s Registration Statement on Form N-2, dated February 6,
2004, as the same shall be amended from time to time (as amended, the
“Registration Statement”), (ii) in accordance with the Investment Company Act
and (iii) during the term of this Agreement in accordance with all other
applicable federal and state laws, rules and regulations, and the Corporation’s
charter and by-laws. 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; (iii) close and monitor the Corporation’s investments;
(iv) determine the securities and other assets that the Corporation will
purchase, retain, or sell; (v) perform due diligence on prospective portfolio
companies; and (vi) 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, the Adviser
will arrange for such financing on the Corporation’s behalf, subject to the
oversight and approval of the Corporation’s Board of Directors. If it is
necessary for the Adviser to make investments on behalf of the Corporation
through a special purpose vehicle, the Adviser 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.

 

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(b) The Adviser hereby accepts such employment and agrees during the term hereof
to render the services described herein for the compensation provided herein.

(c) Subject to the requirements of the Investment Company Act, the Adviser is
hereby authorized 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 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 and other applicable federal and state law.

(d) The Adviser shall for all purposes herein provided 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.

(e) The Adviser 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 Corporation and shall specifically maintain
all books and records with respect to the Corporation’s portfolio transactions
and shall render to the Corporation’s Board of Directors such periodic and
special reports as the Board may reasonably request. The Adviser agrees that all
records that it maintains for the Corporation are the property of the
Corporation and will 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, will be provided and paid for by the Adviser and not
by the Corporation. The Corporation will bear all other costs and expenses of
its operations and transactions, including (without limitation) those relating
to: organization and offering; calculating the Corporation’s net asset value
(including the cost and expenses of any independent valuation firm); expenses
incurred by the Adviser payable to third parties, including agents, consultants
or other advisors, in monitoring financial and legal affairs for the Corporation
and in monitoring the Corporation’s investments and performing due diligence on
its prospective portfolio companies; interest payable on debt, if any, incurred
to finance the Corporation’s investments; offerings of the Corporation’s common
stock and other securities; investment advisory and management fees;
administration fees, if any, payable under the Administration Agreement between
the Corporation and Apollo Investment Administration, LLC (the “Administrator”),
the Corporation’s administrator; fees payable to third parties, including
agents, consultants or other advisors, relating to, or associated with,
evaluating and making investments; transfer agent and custodial fees; federal
and state registration fees; all costs of registration and listing the
Corporation’s shares on any securities exchange; federal, state and local taxes;
independent Directors’ fees and expenses; costs of preparing and filing reports
or other documents required by the Securities and Exchange Commission; costs of
any reports, proxy statements or other notices to stockholders, including
printing costs; the Corporation’s allocable portion of the fidelity bond,
directors and officers/errors and omissions liability insurance, and any other
insurance premiums; direct costs and expenses of administration, including
printing, mailing, long distance telephone, copying, secretarial and other
staff, independent auditors and outside legal costs; and all other expenses
incurred by the Corporation or the Administrator in connection with
administering the Corporation’s business, including payments under the
Administration Agreement between the Corporation and the Administrator 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 services provided by the Adviser
hereunder, a base management fee (“Base Management Fee”) and an incentive fee
(“Incentive Fee”) 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 the Corporation may adopt a deferred compensation plan
pursuant to which the Adviser 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 of 2.00% of
the Corporation’s gross assets. The Base Management Fee will be calculated based
on the average value of the Corporation’s gross assets at the end of the two
most recently completed calendar quarters. Base Management Fees for any partial
quarter will be appropriately pro rated.

(b) The Incentive Fee shall consist of two parts, as follows:

(i) One part will be calculated and payable quarterly in arrears based on the
pre-Incentive Fee net investment income for the immediately preceding calendar
quarter. For this purpose, pre-Incentive Fee net investment income means
interest income, dividend income and any other income (including any other fees,
such as commitment, origination, structuring, diligence and consulting fees but
excluding fees for providing significant managerial assistance or other fees
that the Corporation receives from portfolio companies) accrued by the
Corporation during the calendar quarter, minus the Corporation’s operating
expenses for the quarter (including the Base Management Fee, any expenses
payable under the Administration Agreement, and any interest expense and
dividends paid on any issued and outstanding preferred stock, but excluding the
Incentive Fee). Pre-Incentive Fee net investment income does not include any
realized capital gains, realized capital losses or unrealized capital
depreciation. Pre-Incentive Fee net investment income, expressed as a rate of
return on the value of the Corporation’s net assets at the end of the
immediately preceding calendar quarter, will be compared to a “performance
threshold” of 1.75% per quarter (7% annualized). The Corporation will pay the
Adviser an Incentive Fee with respect to the Corporation’s pre-Incentive Fee net
investment income in each calendar quarter as follows; (1) no Incentive Fee in
any calendar quarter in which the Corporation’s pre-Incentive Fee net investment
income does not exceed the performance threshold; (2) 100% of the Corporation’s
pre-Incentive Fee net investment income with respect to that portion of such
pre-Incentive Fee net investment income, if any, that exceeds the performance
threshold but does not exceed 2.1875% in any calendar quarter (8.75% annualized)
; and (3) 20% of the amount of the Corporation’s pre-Incentive Fee net
investment income, if any, that exceeds 2.1875% in any calendar quarter (8.75%
annualized). These calculations will be appropriately pro rated for any period
of less than three months.

(ii) The second part of the Incentive Fee (the “Capital Gains Fee”) will be
determined and payable in arrears as of the end of each calendar year (or upon
termination of this Agreement as set forth below), and will equal 20.0% of the
sum of the Corporation’s cumulative realized capital gains, cumulative realized
capital losses and unrealized capital depreciation (unrealized capital
depreciation on a gross investment-by-investment basis), less all Capital Gains
Fee payments previously made to the Adviser. In the event that this Agreement
shall terminate as of a date that is not a calendar year end, the termination
date shall be treated as though it were a calendar year end for purposes of
calculating and paying a Capital Gains Fee. The Supplement attached hereto as
Exhibit I illustrates the calculation of the Capital Gains Fee.

4. Covenants of the Adviser. The Adviser covenants that it is registered as an
investment adviser under the Advisers Act. The Adviser agrees that its
activities will 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

 

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member of such exchange, broker or dealer would have charged for effecting that
transaction, if the Adviser 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, and 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 Corporation’s portfolio, and constitutes
the best net results for the Corporation.

6. Limitations on the Employment of the Adviser. The services of the Adviser to
the Corporation are not exclusive, and 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, so long as its
services to the Corporation hereunder are not impaired thereby, and 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 Corporation’s portfolio companies,
subject to applicable law). So long as this Agreement or any extension, renewal
or amendment 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.

7. 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 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.

8. 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 8 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

 

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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).

9. Effectiveness, Duration and Termination of Agreement. This Agreement became
effective as of March 25, 2004 and was amended and restated on March 18, 2010.
This Agreement shall remain in effect for two years from the date of
effectiveness, 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 Corporation’s 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 will 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 Paragraph 8 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 8 shall continue in force and
effect and apply to the Adviser and its representatives as and to the extent
applicable.

10. 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.

11. 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.

12. 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.

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

 

APOLLO INVESTMENT CORPORATION By:     Name:   Title:   APOLLO INVESTMENT
MANAGEMENT, L.P. By:   ACC Management, LLC, its general partner. By:     Name:  
Title:  

 

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EXHIBIT I

Supplement to the Amended and Restated Investment Advisory Management Agreement
Dated March 18, 2010 Between Apollo Investment Corporation and Apollo Investment
Management, L.P.

This Supplement clarifies the Capital Gains Fee calculation set out in
Section 3(b)(ii) of the Investment Advisory Management Agreement between AIC and
AIM (the “Advisory Agreement”). Nothing contained in this Supplement modifies
any term of the Advisory Agreement.

For purposes of determining any amount due under Section 3(b)(ii) of the
Advisory Agreement, the Capital Gains Fee shall incorporate unrealized
depreciation on a gross investment-by-investment basis at the end of such year.
Capital gains with respect to any investment will equal the difference between
the proceeds from the sale of such investment and the accreted or amortized cost
basis of such investment.

Examples of Determination of Capital Gains Fee:

Alternative 1

Assumptions

 

  •  

Year 1: $20 million investment made in Company A (“Investment A”), and $30
million investment made in Company B (“Investment B”)

 

  •  

Year 2: Investment A is sold for $50 million and fair market value (“FMV”) of
Investment B determined to be $32 million

 

  •  

Year 3: FMV of Investment B determined to be $25 million

 

  •  

Year 4: Investment B sold for $31 million

The capital gains portion of the incentive fee would be:

 

  •  

Year 1: None

 

  •  

Year 2: Capital gains incentive fee of $6 million ($30 million realized capital
gains on sale of Investment A multiplied by 20%)

 

  •  

Year 3: None

$5 million (20% multiplied by ($30 million cumulative capital gains less $5
million cumulative capital depreciation)) less $6 million (previous capital
gains fee paid in Year 2)

 

  •  

Year 4: Capital gains incentive fee of $200,000

$6.2 million ($31 million cumulative realized capital gains multiplied by 20%)
less $6 million (capital gains fee taken in Year 2)

Alternative 2

Assumptions

 

  •  

Year 1: $20 million investment made in Company A (“Investment A”), $30 million
investment made in Company B (“Investment B”) and $25 million investment made in
Company C (“Investment C”)

 

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  •  

Year 2: Investment A sold for $50 million, FMV of Investment B determined to be
$25 million and FMV of Investment C determined to be $25 million

 

  •  

Year 3: FMV of Investment B determined to be $27 million and Investment C sold
for $30 million

 

  •  

Year 4: FMV of Investment B determined to be $35 million

 

  •  

Year 5: Investment B sold for $20 million

The capital gains incentive fee, if any, would be:

 

  •  

Year 1: None

 

  •  

Year 2: $5 million capital gains incentive fee

20% multiplied by $25 million ($30 million realized capital gains on Investment
A less unrealized capital depreciation on Investment B)

 

  •  

Year 3: $1.4 million capital gains incentive fee(1)

$6.4 million (20% multiplied by $32 million ($35 million cumulative realized
capital gains less $3 million unrealized capital depreciation)) less $5 million
capital gains fee received in Year 2.

 

  •  

Year 4: None

 

  •  

Year 5: None

$5 million (20% multiplied by $25 million (cumulative realized capital gains of
$35 million less realized capital losses of $10 million)) less $6.4 million
cumulative capital gains fee paid in Year 2 and Year 3

 

(1) As illustrated in Year 3 of Alternative 1 above, if the Corporation were to
be wound up on a date other than December 31st of any year, it may have paid
aggregate capital gain incentive fees that are more than the amount of such fees
that would be payable if it had been wound up on December 31st of such year.

 

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