Summary of BLACKROCK KELSO CAPITAL CORP

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On February 19, 2013, in connection with the previously announced private offering, BlackRock Kelso Capital Corporation ("BlackRock Kelso Capital", "Company", "we" or "our") issued $100 million in aggregate principal amount of 5.50% Convertible Senior Notes due 2018 (the "Notes") under an indenture, dated as of February 19, 2013 (the "Indenture"), by and among the Company, Wilmington Trust, National Association, as trustee (the "Trustee") and Citibank, N.A. as securities administrator (the "Securities Administrator"). Citigroup Global Markets Inc., BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are representatives of the several initial purchasers. The initial purchasers were also granted an option to purchase an additional $15 million aggregate principal amount of the Notes solely to cover overallotments, if any.

The Notes will mature on February 15, 2018, unless earlier repurchased or converted in accordance with their terms. The interest rate on the Notes is 5.50% per year, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2013. As described in the Indenture, holders may convert their Notes at their option prior to the close of business on the business day immediately preceding August 15, 2017, in integral multiples of $1,000 principal amount, only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2013 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the "measurement period") in which the "trading price" (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the "measurement period" was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; or (iii) upon the occurrence of "specified corporate events" (as described in the Indenture). On or after August 15, 2017, holders may convert their Notes at any time prior to the close of business on the scheduled trading day immediately preceding the maturity date irrespective of the foregoing conditions.

Upon conversion of a Note, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election. If we satisfy our conversion obligation in solely cash or through payment and delivery, as the case may be, of a combination of cash and shares of our common stock, the amount of cash and shares of our common stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 20 trading day observation period.

No holder of Notes will be entitled to receive shares of our common stock upon conversion to the extent (but only to the extent) that following such receipt such converting holder would be, directly or indirectly, a "beneficial owner" (within the meaning of Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder) of more than 5.0% of the shares of our common stock outstanding at such time (the "limitation"). Any purported delivery of shares of our common stock upon conversion of Notes shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the converting holder becoming the beneficial owner of more than the "limitation." If any delivery of shares of our common stock owed to a holder upon conversion of Notes is not made, in whole or in part, as a result of the "limitation," our obligation to make such delivery shall not be extinguished and we shall deliver such shares as promptly as practicable after any such converting holder gives notice to us that following such delivery such converting holder would not be the beneficial owner of more than 5.0% of the shares of common stock outstanding at such time. The "limitation" shall no longer apply following the effective date of any "fundamental change" (as defined in the Indenture).

Subject to certain conditions, holders may require the Company to repurchase, for cash, all or part of their Notes upon a "fundamental change" at a price equal to 100% of the principal amount of the Notes being repurchased, plus accrued and unpaid interest to, but excluding, the "fundamental change repurchase date" (as defined in the Indenture).

The Indenture contains certain events of default, the occurrence of which may lead to the Notes becoming due and payable immediately. The events of default contained in the Indenture include, without limitation, the following:
(1) default in any payment of interest on any Note when due and payable and the default continues for a period of 30

days; (2) default in the payment of principal of any Note when due and payable at its stated maturity, upon any required repurchase, upon declaration of . . .