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Exhibit 10.28
 
 CODE OF ETHICS
(As amended on January 20, 2006)
 SECTION 1: STATEMENT OF PURPOSE AND APPLICABILITY
 (A)
    
    Statement of PurposeIt is the policy of Allied Capital Corporation (the Company) that no affiliated
person of the Company shall, in connection with the purchase or sale, directly or
indirectly, by such person of any security held or to be acquired by the Company,
 (1)
    
    Employ any device, scheme or artifice to defraud the Company;(2)
    
    Make to the Company an untrue statement of a material fact or
omit to state to the Company a material fact necessary in order to make the
statement made, in light of the circumstances under which it is made, not
misleading;(3)
    
    Engage in an act, practice, or course of business which
operates or would operate as a fraud or deceit upon the Company; or(4)
    
    Engage in any manipulative practice with respect to the
Company.
 (B)
    
    Scope of the CodeIn order to prevent the access persons, as defined in Section II, paragraph (A)
below, of the Company from engaging in any of these prohibited acts, practices or
courses of business, the Board of Directors of the Company has adopted this Code of
Ethics.
 SECTION II: DEFINITIONS
 (A)
    
    Access Person. Access Person means any director, officer, or
Advisory Person of the Company.(B)
    
    Advisory Person. Advisory person of the Company means: (i) any employee
of the Company or of any company in a control relationship to the Company, who, in
connection with his or her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of a security by the Company, or
whose functions relate to the making of any recommendations with respect to such
purchases or sales; and (ii) any natural person in a control relationship to the
Company who obtains information concerning recommendations made to the Company with
regard to the purchase or sale of security.(C)
    
    Beneficial Interest. Beneficial Interest includes any entity, person,
trust, or account with respect to which an Access Person exercises investment
discretion or provides investment advice. A beneficial interest shall be presumed to
include all accounts in the name of or for the benefit of the Access Person, his or her
spouse, dependent children, or any person living with him or her or to whom he or she
contributes economic support.(D)
    
    Beneficial Ownership. Beneficial Ownership shall be determined in
accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, except that
the determination of




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direct or indirect Beneficial Ownership shall apply to all securities, and not just
equitysecurities, that an Access Person has or acquires. Rule 16a-1(a)(2) provides
that the term beneficial owner means any person who, directly or indirectly,
through any contract, arrangement, understanding, relationship, or
otherwise, has or shares a direct or indirect pecuniary interest in any equity security. Therefore, an
Access Person may be deemed to have Beneficial Ownership of securities held by
members of his or her immediate family sharing the same household, or by certain
partnerships, trusts, corporations, or other arrangements.(E)
    
    Covered Security. Covered Security means a security as defined in
Section 2(a)(36) of the Investment Company Act of 1940, as amended (the 1940 Act),
except that it does not include (i) direct delegations of the Government of the United
States; (ii) bankers acceptances, bank certificates of deposit, commercial paper and
high quality short-term debt instruments including repurchase agreements; and (iii) shares issued by open-end funds.(F)
    
    Company. The Company means Allied Capital Corporation, a Maryland
corporation.(G)
    
    Designated Officer. Designated Officer shall mean the officer of the
Company designated by the Board of Directors from time to time to be responsible for
management of compliance with this Code. The Designated Officer may appoint a designee
to carry out certain of his or her functions pursuant to this Code.(H)
    
    Disinterested Director. Disinterested Director means a director of
the Company who is not an interested person of the Company within the meaning of
Section 2(a)(19) of the 1940 Act.(I)
    
    Purchase or Sale of a Covered Security. Purchase or Sale of a Covered
Security includes, among other things, the writing of an option to purchase or sell a
covered security, or the use of derivative product to take a position in a Covered
Security.
 SECTION III: STANDARDS OF CONDUCT
 (A)
    
    General Standards
 (1)
    
    No Access Person shall engage, directly or
indirectly, in any business transaction or arrangement for personal
profit that is inconsistent with the best interests of the Company or
its shareholders; nor shall he or she make use of any confidential
information gained by reason of his or her employment by or affiliation
with the Company or affiliates thereof in order to derive a personal
profit for himself or herself or for any Beneficial Interest, in
violation of the fiduciary duty owed to the Company or its
shareholders.(2)
    
    Any Access Person recommending or authorizing
the purchase or sale of a Covered Security by the Company shall, at the
time of such recommendation or authorization, disclose any Beneficial
Interest in or Beneficial Ownership of such Covered Security or the
issuer thereof.
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(3)
    
    No Access Person shall dispense any information
concerning Securities holdings or Securities transactions of the
Company to anyone outside the Company, without obtaining prior written
approval from the Designated Officer, or such person or persons as
these individuals may designate to act on their behalf. Notwithstanding
the preceding sentence, such Access Person may dispense such
information without obtaining prior written approval:
 (a)
    
    when there is a public report
containing the same information; or(b)
    
    when such information is
dispensed in accordance with compliance procedures established
to prevent conflicts of interest between the Company and its
affiliates.
 (4)
    
    All personal securities transactions should be
conducted consistent with this Code and in such a manner as to avoid
actual or potential conflicts of interest, the appearance of a conflict
of interest, or any abuse of an individuals position of trust and
responsibility within the Company.
 (B)
    
    Prohibited Transactions
 (1)
    
    General Prohibition. No Access Person
shall purchase or sell, directly or indirectly, any Covered Security in
which he or she has, or by reason of such transaction acquires, any
direct or indirect Beneficial Ownership and which such Access Person
knows or should have known at the time of such purchase or sale is
being considered for purchase or sale by the Company, or is held in the
portfolio of the Company unless such Access Person shall have obtained
prior written approval for such purpose from the Designated Officer.
 (a)
    
    An Access Person who becomes
aware that the Company is considering the purchase or sale of
any Covered Security by any person (an issuer) must immediately
notify the Designated Officer of any interest that such Access
Person may have in any outstanding Covered Securities of that
issuer.(b)
    
    An Access Person shall similarly
notify the Designated Officer of any other interest or
connection that such Access Person might have in or with such
issuer.(c)
    
    Once an Access Person becomes
aware that the Company is considering the purchase or sale of a
Covered Security or that the Company holds a Covered Security in
its portfolio, such Access Person may not engage, without prior
approval of the Designated Officer, in any transaction in any
Covered Securities of that issuer.
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(d)
    
    The notifications or permission
may be provided verbally, but should be confirmed in writing as
soon and with as much detail as possible.
 (2)
    
    Gifts. No Access Person may accept,
directly or indirectly, any gift, favor, or service from any person
with whom he or she transacts business on behalf of the Company under
circumstances when to do so would conflict with the Companys best
interests or would impair the ability of such person to be completely
disinterested when required, in the course of business, to make
judgments and/or recommendations on behalf of the Company.(3)
    
    Service as Director. No Access Person
shall serve on the board of directors of a portfolio company of the
Company without prior written authorization of the Designated Officer
based upon a determination that the board service would be consistent
with the interests of the Company and its shareholders.
 SECTION IV: PROCEDURES TO IMPLEMENT CODE OF ETHICS
  (A)
    
    ApplicabilityAll Access Persons are subject to the reporting requirements set forth in
Section IV(B) except:
 (1)
    
    with respect to transactions effected for, and
Covered Securities held in, any account over which the Access Person
has no direct or indirect influence or control;(2)
    
    a Disinterested Director who would be required
to make a report solely by reason of being a Director need not make an
annual holdings report.(3)
    
    an Access Person need not make a quarterly
transaction report if the report would duplicate information contained
in broker trade confirmations or account statements received by the
Company with respect to the Access Person.
 (B)
    
    Report Types
 (1)
    
    Initial Holdings Report. An Access
Person must file an initial report not later than 10 days after that
person became an Access Person. The initial report must (a) contain
the title, number of shares and principal amount of each Covered
Security in which the Access Person had any direct or indirect
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beneficial ownership when the person became an Access Person; (b)
identify any broker, dealer or bank with whom the Access Person
maintained an account in which any Covered Securities were held for
the direct or indirect benefit of the Access Person as of the date
the person became an Access Person, and (c) indicate the date that
the report is filed with the Designated Person.(2)
    
    Quarterly Transaction Report. An
Access Person must file a quarterly transaction report not later than
30 days after the end of a calendar quarter. With respect to any
transaction made during the reporting quarter, the quarterly
transaction report must contain (a) the transaction date, title,
interest date and maturity date (if applicable), the number of shares
and the principal amount of each Covered Security; (b) the nature of
the transaction; (c) the price of the Covered Security at which the
transaction occurred; (d) the name of the broker, dealer or bank
through which the transaction was effected; and (e) the date that the
report is submitted by the Access Person.(3)
    
    Annual Holdings Report. An Access
Person must file an annual holdings report not later than 45 days after
the end of a fiscal year. The annual report must contain (a) the
title, number of shares, and principal amount of each Covered Security
in which the Access Person had any direct or indirect beneficial
ownership; (b) the name of any broker, dealer or bank in which any
Covered Securities are held for the direct or indirect benefit of the
Access Person; and (c) the date the report is submitted.(4)
    
    Confirmations and Account Statements.
In lieu of providing a quarterly transaction report, an Access Person
may direct his or her broker to provide to the Designated Officer (a)
duplicate confirmations of all transactions in any Covered Security in
which he or she has, or by reason of such transaction acquires, any
direct or indirect Beneficial Ownership, and (b) copies of periodic
statements for all investment accounts in which they have Beneficial
Ownership.(5)
    
    Company Reports. No less frequently
than annually, the Company must furnish to the Board of Directors, and
the Board of Directors must consider, a written report that:
 (a)
    
    describes any issues arising
under the Code of Ethics since the last report to the Board of
Directors, including but not limited to, information about
material violations of the code or procedures and sanctions
imposed in response to the material violations; and(b)
    
    certifies that the Company has
adopted procedures reasonably necessary to prevent Access
Persons from violating the code.
 (C)
    
    Disclaimer of Beneficial Ownership. Any report
required under this Section IV may contain a statement that the report shall
not be construed as an admission by the person submitting such duplicate
confirmation or account statement or making such
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report that he or she has any direct or indirect beneficial ownership in the
Covered Security to which the report relates.(D)
    
    Review of Reports. The reports, duplicate
confirmations, and account statements required to be submitted under this
Section IV shall be delivered to the Designated Officer. The Designated
Officer shall review such reports, duplicate confirmations, and account
statements to determine whether any transactions recorded therein constitute a
violation of the Code of Ethics. Before making any determination that a
violation has been committed by any Access Person, such Access Person shall be
given an opportunity to supply additional explanatory material. The Designated
Officer shall maintain copies of the reports, duplicate confirmations, and
account statements as required by Rule 17j-1(d).(E)
    
    Acknowledgment and Certification. Upon becoming an
Access Person and annually thereafter, all Access Persons shall sign an
acknowledgment and certification of their receipt of and intent to comply with
this Code in the form attached hereto as Exhibit A and return it to the
Designated Officer.(F)
    
    Records. The Company shall maintain records with
respect to this Code in the manner and to the extent set forth below, which
records may be maintained on microfilm under the conditions described in Rule
31a-2(f)(1) under the 1940 Act and shall be available for examination by
representatives of the Securities and Exchange Commission (the SEC).
 (1)
    
    A copy of this Code and any other Code of
Ethics of the Company that is, or at any time within the past five
years has been, in effect shall be preserved in an easily accessible
place.(2)
    
    A record of any violation of this Code and of
any action taken as a result of such violation shall be preserved in an
easily accessible place for a period of not less than five years
following the end of the fiscal year in which the violation occurs.(3)
    
    A copy of each report made or duplicate
confirmation or account statement received pursuant to this Code shall
be preserved for a period of not less than five years from the end of
the fiscal year in which it is made, the first two years in an easily
accessible place.(4)
    
    A list of all persons who are, or within the
past five years have been, required to make reports pursuant to this
Code shall be maintained in an easily accessible place.(5)
    
    A record of any decision, and the reasons
supporting the decision, to approve a request by an Access Person to
purchase or sell any Covered Security shall be maintained for at least
five years after the end of the fiscal year in which the request is
approved.
 (G)
    
    Obligation to Report a Violation. Every Access Person
who becomes aware of a violation of this Code of Ethics by any person must
report it to the Designated
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Officer, who shall report it to appropriate management personnel. The
management personnel will take such disciplinary action that they consider
appropriate under the circumstances. In the case of officers or other
employees of the Company, such action may include removal from office. If
the management personnel consider disciplinary action against any person,
they will cause notice thereof to be given to that person and provide to
that person the opportunity to be heard. The Board of Directors will be
notified, in a timely manner, of remedial action taken with respect to
violations of the Code of Ethics.(H)
    
    Confidentiality. All reports of Covered Securities
transactions, duplicate confirmations, account statements and other information
filed with the Company or furnished to any person pursuant to this Code shall be
treated as confidential, but are subject to review as provided herein and by
representatives of the SEC.
 SECTION V: SANCTIONS
  SECTION VI: AMENDMENTS
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