Amended and Restated Investment Advisory Management Agreement



 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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