Exhibit
4.2


 


FIRST SUPPLEMENTAL INDENTURE


 


between


 


ARES CAPITAL CORPORATION


 


and


 


U.S. BANK NATIONAL
ASSOCIATION,


 


as Trustee


 


Dated as of October 21,
2010


 






 


FIRST SUPPLEMENTAL INDENTURE


 


THIS FIRST SUPPLEMENTAL INDENTURE
(this “First Supplemental Indenture”), dated as of October 21, 2010, is
between Ares Capital Corporation, a Maryland corporation (the “Company”), and
U.S. Bank National Association, as trustee (the “Trustee”). All capitalized
terms used herein shall have the meaning set forth in the Base Indenture (as
defined below).


 


RECITALS OF THE COMPANY


 


The Company and the Trustee executed
and delivered an Indenture, dated as of October 21, 2010 (the “Base
Indenture” and, as supplemented by this First Supplemental Indenture, the “Indenture”),
to provide for the issuance by the Company from time to time of the Company’s
unsecured debentures, notes or other evidences of indebtedness (the “Securities”),
to be issued in one or more series as provided in the Indenture.


 


The Company desires to issue and sell
$200,000,000 aggregate principal amount (or up to $230,000,000 aggregate
principal amount if the underwriters’ overallotment option is exercised in
full) of the Company’s 7.75% Senior Notes due 2040 (the “Notes”).


 


Sections 9.01(v) and 9.01(vii) of
the Base Indenture provide that without the consent of Holders of the
Securities of any series issued under the Indenture, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental to
the Base Indenture to (i) change or eliminate any of the provisions of the
Indenture when there is no Security Outstanding of any series created prior to
the execution of a supplemental indenture that is entitled to the benefit of
such provision and (ii) establish the form or terms of Securities of any
series as permitted by Section 2.01 and Section 3.01 of the Base
Indenture.


 


The Company desires to establish the
form and terms of the Notes and to modify, alter, supplement and change certain
provisions of the Base Indenture for the benefit of the Holders of the Notes
(except as may be provided in a future supplemental indenture to the Indenture
(“Future Supplemental Indenture”)).


 


The Company has duly authorized the
execution and delivery of this First Supplemental Indenture to provide for the
issuance of the Notes and all acts and things necessary to make this First
Supplemental Indenture a valid, binding, and legal obligation of the Company
and to constitute a valid agreement of the Company, in accordance with its
terms, have been done and performed.


 


NOW, THEREFORE, THIS INDENTURE
WITNESSETH:


 


For and in consideration of the
premises and the purchase of the Notes by the Holders thereof, it is mutually
agreed, for the equal and proportionate benefit of all Holders of the Notes, as
follows:


 

















 


ARTICLE I

TERMS OF THE NOTES


 


Section 1.01.          Terms
of the Notes.  The following terms relating to the Notes are
hereby established:


 


(a)                                  The Notes shall constitute a series of Securities having the title “7.75%
Senior Notes due 2040” and shall be designated as Senior Securities under the
Indenture. The Notes shall bear a CUSIP number of 04010L202 and an ISIN number
of US04010L2025.


 


(b)                                 The aggregate principal amount of the Notes that may be initially
authenticated and delivered under the Indenture (except for Notes authenticated
and delivered upon registration of, transfer of, or in exchange for, or in lieu
of, other Notes pursuant to Sections 3.04, 3.05, 3.06, 9.06 or 11.07 of the Base
Indenture) shall be $200,000,000 (or up to $230,000,000 aggregate principal
amount if the underwriters’ overallotment option is exercised).  Under a Board Resolution, Officers’
Certificate pursuant to Board Resolutions or an indenture supplement, the Company
may from time to time, without the consent of the Holders of Notes, issue
additional Notes (in any such case “Additional Notes”) having the same ranking
and the same interest rate, maturity and other terms as the Notes. Any
Additional Notes and the existing Notes will constitute a single series under
the Indenture and all references to the relevant Notes herein shall include the
Additional Notes unless the context otherwise requires.


 


(c)                                  The entire outstanding principal of the Notes shall be payable on October 15,
2040.


 


(d)                                 The rate at which the Notes shall bear interest shall be 7.75% per annum
(the “Applicable Interest Rate”). The date from which interest shall accrue on
the Notes shall be October 21, 2010, or the most recent Interest Payment
Date to which interest has been paid or provided for; the Interest Payment
Dates for the Notes shall be January 15, April 15, July 15 and October 15
of each year, commencing January 15, 2011 (if an Interest Payment Date
falls on a day that is not a Business Day, then the applicable interest payment
will be made on the next succeeding Business Day and no additional interest
will accrue as a result of such delayed payment); the initial interest period
will be the period from and including October 21, 2010 (or the most recent
Interest Payment Date to which interest has been paid or provided for), to, but
excluding, the initial Interest Payment Date, and the subsequent interest
periods will be the periods from and including an Interest Payment Date to, but
excluding, the next Interest Payment Date or the Stated Maturity, as the case
may be; the interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date, will be paid to the Person in whose name the Note
(or one or more predecessor Notes) is registered at the close of business on
the Regular Record Date for such interest, which shall be January 1, April 1,
July 1 or October 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. Payment of principal of (and
premium, if any) and any such interest on the Notes will be made at the
Corporate Trust Office of the Trustee in Boston, Massachusetts in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided,
however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
Interest on the Notes will be computed on the basis of a 360-day year of twelve
30-day months.


 


(e)                                  The Notes shall be initially issuable in global form (each such Note, a “Global
Note”).  The Global Notes and the Trustee’s
certificate of authentication thereon shall be substantially in the form of Exhibit A
to this First Supplemental Indenture. 
Each Global Note shall represent the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Notes represented thereby shall be made
by the Trustee or the Security Registrar, in accordance with Sections 2.03 and
3.05 of the Indenture.


 


(f)                                    The depositary for such Global Notes (the “Depositary”) shall be The
Depository Trust Company, New York, New York. 
The Security Registrar with respect to the Global Notes shall be the
Trustee.


 


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(g)                                 The Notes shall be defeasible pursuant to Section 14.02 or Section 14.03
of the Base Indenture. Covenant defeasance contained in Section 14.03 of
the Base Indenture shall apply to the covenants contained in Sections 10.06,
10.08 and 10.09 of the Indenture.


 


(h)                                 The Notes shall be redeemable pursuant to Section 11.01 of the Base
Indenture and as follows:


 


(i)                                     The Notes will be redeemable in whole or in
part at any time or from time to time, at the option of the Company, on or
after October 15, 2015, at a redemption price of $25 per Note plus accrued
and unpaid interest payments otherwise payable for the then-current quarterly
interest period accrued to, but excluding, the date fixed for redemption.


 


(ii)                                  Notice of redemption shall be given in writing
and mailed, first-class postage prepaid or by overnight courier guaranteeing
next-day delivery, to each Holder of the Notes to be redeemed, not less than
thirty (30) nor more than sixty (60) days prior to the Redemption Date, at the
Holder’s address appearing in the Security Register. All notices of redemption
shall contain the information set forth in Section 11.04 of the Base
Indenture.


 


(iii)                               Any exercise of the Company’s option to redeem the
Notes will be done in compliance with the Investment Company Act.


 


(iv)                              If the Company elects to redeem only a portion
of the Notes, the Trustee will determine the method for selecting the
particular Notes to be redeemed, in accordance with the Investment Company Act.


 


(v)                                 Unless the Company defaults in payment of the
Redemption Price, on and after the Redemption Date, interest will cease to
accrue on the Notes called for redemption hereunder.


 


(i)                                     The Notes shall not be subject to any sinking fund pursuant to Section 12.01
of the Base Indenture.


 


(j)                                     The Notes shall be issuable in denominations of $25 and integral
multiples of $25 in excess thereof.


 


(k)                                  Holders of the Notes will not have the option to have the Notes repaid
prior to the Stated Maturity.


 


ARTICLE II

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION


 


Section 2.01.                             Except as may be provided in a Future Supplemental Indenture,
for the benefit of the Holders of the Notes but no other series of Securities
under the Indenture, whether now or hereafter issued and Outstanding, Article One
of the Base Indenture shall be amended by adding the following defined terms to
Section 1.01 in appropriate alphabetical sequence, as follows:


 


“‘Exchange Act’ means the
Securities Exchange Act of 1934, as amended, and any statute successor thereto.”


 


“‘GAAP’
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, the opinions and
pronouncements of the Public Company Accounting Oversight Board and the
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession in the United States, which
are in effect from time to time.”


 


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“‘Investment
Company Act’ means the Investment Company Act of 1940, as amended, and the
rules, regulations and interpretations promulgated thereunder, to the extent
applicable, and any statute successor thereto.”


 


ARTICLE III

REMEDIES


 


Section 3.01.                             Except as may be provided in a Future Supplemental Indenture, for the
benefit of the Holders of the Notes but no other series of Securities under the
Indenture, whether now or hereafter issued and Outstanding, Section 5.01
of the Base Indenture shall be amended by replacing clause (ii) thereof
with the following:


 


“(ii)                            default in the payment of the principal of (or premium, if
any) any Note when it becomes due and payable at its Maturity; or”


 


ARTICLE IV

COVENANTS


 


Section 4.01.                             Except as may be provided in a Future Supplemental Indenture, for the
benefit of the Holders of the Notes but no other series of Securities under the
Indenture, whether now or hereafter issued and Outstanding, Article Ten of
the Base Indenture shall be amended by adding the following new Sections 10.08
and 10.09 thereto, each as set forth below:


 


“Section 10.08                    Section 18(a)(1)(A) of the Investment Company Act.


 


The
Company hereby agrees that for the period of time during which Notes are
Outstanding, the Company will not violate, whether or not it is subject to, Section 18(a)(1)(A) as
modified by Section 61(a)(1) of the Investment Company Act or any
successor provisions thereto of the Investment Company Act.”


 


“Section 10.09                    Commission Reports and Reports to Holders.


 


If, at any
time, the Company is not subject to the reporting requirements of Sections 13
or 15(d) of the Exchange Act to file any periodic reports with the
Securities and Exchange Commission, the Company agrees to furnish to the
Holders of Notes and the Trustee for the period of time during which the Notes
are Outstanding: (i) within 90 days after the end of the each fiscal year
of the Company, audited annual consolidated financial statements of the Company
and (ii) within 45 days after the end of each fiscal quarter of the
Company (other than the Company’s fourth fiscal quarter), unaudited interim
consolidated financial statements of the Company. All such financial statements
shall be prepared, in all material respects, in accordance with GAAP.”


 


ARTICLE V

MISCELLANEOUS


 


Section 5.01.                             This First Supplemental Indenture and the Notes shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws that would cause the application of laws of
another jurisdiction.  This First
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
that are required to be part of the Indenture and shall, to the extent
applicable, be governed by such provisions.


 


Section 5.02.                             In case any provision in this First Supplemental Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.


 


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Section 5.03.                             This First Supplemental Indenture may be executed in any number of
counterparts, each of which will be an original, but such counterparts will
together constitute but one and the same First Supplemental Indenture. The exchange
of copies of this First Supplemental Indenture and of signature pages by
facsimile, .pdf transmission, email or other electronic means shall constitute
effective execution and delivery of this First Supplemental Indenture for all
purposes.  Signatures of the parties
hereto transmitted by facsimile, .pdf transmission, email or other electronic
means shall be deemed to be their original signatures for all purposes.


 


Section 5.04.                             The Base Indenture, as supplemented and amended by this First Supplemental
Indenture, is in all respects ratified and confirmed, and the Base Indenture
and this First Supplemental Indenture shall be read, taken and construed as one
and the same instrument with respect to the Notes. All provisions included in
this First Supplemental Indenture supersede any conflicting provisions included
in the Base Indenture with respect to the Notes, unless not permitted by law.
The Trustee accepts the trusts created by the Indenture, as supplemented by
this First Supplemental Indenture, and agrees to perform the same upon the
terms and conditions of the Indenture, as supplemented by this First
Supplemental Indenture.


 


Section 5.05.                             The provisions of this First Supplemental Indenture shall become
effective as of the date hereof.


 


Section 5.06.                             Notwithstanding anything else to the contrary herein, the terms and
provisions of this First Supplemental Indenture shall apply only to the Notes
and shall not apply to any other series of Securities under the Indenture and
this First Supplemental Indenture shall not and does not otherwise affect,
modify, alter, supplement or change the terms and provisions of any other
series of Securities under the Indenture, whether now or hereafter issued and
Outstanding.


 


Section 5.07.                             The recitals contained herein and in the Notes shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this First Supplemental Indenture, the Notes or any Additional
Notes, except that the Trustee represents that it is duly authorized to execute
and deliver this First Supplemental Indenture, authenticate the Notes and any
Additional Notes and perform its obligations hereunder. The Trustee shall not
be accountable for the use or application by the Company of the Notes or any
Additional Notes or the proceeds thereof.


 


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


 


 


	
   

  	
  ARES CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard S. Davis

  
	
   

  	
  Name:

  	
  Richard
  S Davis

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Karen R. Beard

  
	
   

  	
  Name:

  	
  Karen
  R. Beard

  
	
   

  	
  Title:

  	
  Vice
  President

  



 


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EXHIBIT A