exv10w1



 





EXHIBIT 10.1




DIVIDEND REINVESTMENT PLAN




OF




PATRIOT CAPITAL FUNDING, INC.




     Patriot Capital Funding, Inc., a Delaware corporation (the “Corporation”), hereby adopts the
following plan (the “Plan”) with respect to dividends and distributions declared by its Board of
Directors on shares of its Common Stock:



     1. Unless a stockholder specifically elects to receive cash as set forth below, all
dividends and all distributions hereafter declared by the Board of Directors shall be payable in
shares of the Common Stock of the Corporation, and no action shall be required on such
stockholder’s part to receive a dividend or a distribution in stock.



     2. Such dividends and distributions shall be payable on such date or dates as may be fixed
from time to time by the Board of Directors to stockholders of record at the close of business on
the record date for the dividend and/or distribution involved.



     3. The Corporation shall use primarily newly-issued shares of its Common Stock to implement
the Plan, whether its shares are trading at a premium or at a discount to net asset value.
However, the Corporation reserves the right to purchase shares in the open market in connection
with the implementation of the Plan. The number of newly-issued shares to be issued to a
stockholder shall be determined by dividing the total dollar amount of the distribution payable to
such stockholder by the market price per share of the Corporation’s Common Stock at the close of
regular trading on the principal national securities exchange for the shares on the valuation date
fixed by the Board of Directors for such dividend or distribution. Market price per share on that
date shall be the closing price for such shares on such principal national securities exchange or,
if no sale is reported for such day, at the average of their reported bid and asked prices. Shares
purchased in open market transactions by the Plan Administrator shall be allocated to each
Participant (as defined below) based upon the average purchase price, excluding any brokerage
charges or other charges, of all shares of Common Stock purchased with respect to the applicable
dividend and/or distribution.



     4. A stockholder may, however, elect to receive his, her or its dividends and distributions
in cash. To exercise this option, such stockholder shall notify American Stock Transfer & Trust
Company, the plan administrator and the Corporation’s transfer agent and registrar (collectively
the “Plan Administrator”), in writing so that such notice is received by the Plan Administrator no
later than the record date fixed by the Board of Directors for the dividend and/or distribution
involved.



     5. The Plan Administrator will set up an account for shares acquired pursuant to the Plan
for each stockholder who has not so elected to receive dividends and distributions in cash (each a
“Participant”). The Plan Administrator may hold each Participant’s shares, together with
 the shares of other Participants, in non-certificated form in the Plan Administrator’s name or that
of its nominee. Upon request by a Participant, received in writing no
later than 10 days prior to the record date, the Plan Administrator will, instead of crediting shares to and/or carrying shares
in a Participant’s account, issue, without charge to the Participant, a certificate registered in
the Participant’s name for the number of whole shares payable to the Participant and a check for
any fractional share.



     6. The Plan Administrator will confirm to each Participant each acquisition made pursuant to
the Plan as soon as practicable but not later than 10 business days after the date thereof.
Although each Participant may from time to time have an undivided fractional interest (computed to
three decimal places) in a share of Common Stock of the Corporation, no certificates for a
fractional share will be issued. However, dividends and distributions on fractional shares will be
credited to each Participant’s account. In the event of
termination of a Participant’s account under the Plan, the Plan Administrator will adjust for any such undivided
fractional interest in cash at the market value of the
Corporation’s shares at the time of termination.



     7. The Plan Administrator will forward to each Participant any Corporation related proxy
solicitation materials and each Corporation report or other
communication to stockholders, and will vote any shares held by it under the Plan in accordance with the instructions
set forth on proxies returned by Participants to the Corporation.



     8. In the event that the Corporation makes available to its stockholders rights to purchase
additional shares or other securities, the shares held by the Plan Administrator for each
Participant under the Plan will be added to any other shares held by the Participant in
certificated form in calculating the number of rights to be issued to the Participant.



 









 






     9. The Plan Administrator’s service fee, if any, and expenses for administering the Plan
will be paid for by the Corporation.



     10. Each Participant may terminate his, her or its account under the Plan by so notifying the
Plan Administrator via the Plan Administrator’s website at www.amstock.com, by filling out the
transaction request form located at the bottom of the Participant’s Plan statement and sending it
to American Stock Transfer & Trust Company, P.O. Box 922, Wall Street Station, New York, NY
10269-0560 or by calling the Plan Administrator’s Interactive Voice Response System at
1-877-366-6442. Such termination will be effective immediately if the Participant’s notice is
received by the Plan Administrator at least 2 days prior to any dividend or distribution record
date; otherwise, such termination will be effective only with respect to any subsequent dividend or
distribution. The Plan may be terminated by the Corporation upon notice in writing mailed to each
Participant at least 30 days prior to any record date for the payment of any dividend or
distribution by the Corporation. Upon any termination, the Plan Administrator will cause a
certificate or certificates to be issued for the full shares held for the Participant under the
Plan and a cash adjustment for any fractional share to be delivered to the Participant without
charge to the Participant. If a Participant elects by his, her or its written notice to the Plan
Administrator in advance of termination to have the Plan Administrator sell part or all of his, her or its shares
and remit the proceeds to the Participant, the Plan Administrator is authorized to deduct a $15
 transaction fee plus a $0.10 per share brokerage commission from the proceeds.



     11. These terms and conditions may be amended or supplemented by the Corporation
at any time but, except when necessary or appropriate to comply with applicable law or the rules or
policies of the Securities and Exchange Commission or any other regulatory
authority, only by mailing to each Participant appropriate written notice at least 30 days prior to
the effective date thereof. The amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Plan Administrator receives written
notice of the termination of his, her or its account under the Plan. Any such amendment may include
an appointment by the Plan Administrator in its place and stead of a successor agent under these
terms and conditions, with full power and authority to perform all or any of the acts to be
performed by the Plan Administrator under these terms and conditions. Upon any such appointment of
any agent for the purpose of receiving dividends and distributions, the
Corporation will be authorized to pay to such successor agent, for each Participant’s account, all
dividends and distributions payable on shares of the Corporation held in the Participant’s
name or under the Plan for retention or application by such successor agent as provided in these
terms and conditions.



     12. The Plan Administrator will at all times act in good faith and use its best efforts
within reasonable limits to ensure its full and timely performance of all services to be performed
by it under this Plan and to comply with applicable law, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless such error is caused by the Plan Administrator’s

negligence, bad faith, or willful misconduct or that of its employees or agents.



     13. These terms and conditions shall be governed by the laws of the State of New York.



February 27, 2008