EXHIBIT 10.4

 

THIS NOTE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THIS NOTE MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM.

 

AMERICAN CAPITAL STRATEGIES, LTD.

 

6.565% Senior Note, Series 2006-B, due February 9, 2011

 

No. RB-1   February 9, 2006 £3,000,000   PPN 024937 B@ 2

 

FOR VALUE RECEIVED, the undersigned, AMERICAN CAPITAL STRATEGIES, LTD. (herein
called the “Company”), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to PANTHER CDO I B.V., or
registered assigns, the principal sum of THREE MILLION STERLING on February 9,
2011, with interest (computed on the basis of a 365-day or 366-day year, as
applicable and paid for the actual number of days elapsed) (a) on the unpaid
balance thereof at the rate of 6.565% per annum from the date hereof, payable
semiannually in arrears, on the ninth day of February and August in each year,
commencing with the February 9 or August 9 next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as such term is defined in the Note Purchase
Agreement referred to below), payable semiannually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (1) 8.565% or (2) 2.00% over the rate of
interest publicly announced from time to time by The Royal Bank of Scotland plc
from time to time at its principal office in London, England as its “base” or
“prime” rate for loans denominated in Sterling.

 

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in Sterling at the principal offices of Wachovia Bank,
National Association in New York, New York or at such other place as the Company
shall have designated by written notice to the holder of this Note as provided
in the Note Purchase Agreement referred to below.

 

This Note is one of a series of Senior Notes (herein called the “Notes”) issued
pursuant to that certain Note Purchase Agreement dated as of February 9, 2006
(as from time to time amended, the “Note Purchase Agreement”), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company will not be affected by any notice to the contrary.

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This Note is subject to prepayment, in whole or from time to time in part, at
the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.

 

If an Event of Default, as defined in the Note Purchase Agreement, occurs and is
continuing, the principal of this Note may be declared or otherwise become due
and payable in the manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the laws of the State of New York excluding
the choice of law principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State.

 

AMERICAN CAPITAL STRATEGIES, LTD. By  

/s/ Malon Wilkus

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Name:   Malon Wilkus Title:  

Chairman, President and Chief Executive

Officer