Exhibit 10.3

 

$150,000,000

  November 15, 2004

 

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE
SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT
THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (A “QIB”), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED THAT THE
REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (2) IN CERTIFICATED FORM TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (WITHIN
THE MEANING OF RULE 501 (a)(1)–(3) OR (7) UNDER THE SECURITIES ACT) PURCHASING
FOR INVESTMENT AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IN
EACH CASE, SUBJECT TO THE RECEIPT BY THE SERVICER AND THE DEAL AGENT OF A
TRANSFEREE LETTER AND SUCH OTHER EVIDENCE ACCEPTABLE TO THE SERVICER AND THE
DEAL AGENT THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY
LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER APPLICABLE JURISDICTION,
(3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO ANOTHER EXEMPTION
AVAILABLE UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS, OR (5) PURSUANT TO A VALID REGISTRATION STATEMENT. THE PURCHASE
OF THIS NOTE WILL BE DEEMED A REPRESENTATION BY THE ACQUIRER THAT EITHER: (I) IT
IS NOT, AND IS NOT PURCHASING THIS NOTE FOR, ON BEHALF OF OR WITH THE ASSETS OF,
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE I OF ERISA AND/OR SECTION 4975 OF THE CODE, OR A GOVERNMENTAL PLAN (AS
DEFINED IN SECTION 3(32) OF ERISA) OR A CHURCH PLAN (AS DEFINED IN SECTION 3(33)
OF ERISA FOR WHICH NO ELECTION HAS BEEN MADE UNDER SECTION 410(d) OF THE CODE)
THAT IS SUBJECT TO ANY FEDERAL, STATE, OR LOCAL LAW THAT IS SUBSTANTIALLY
SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR
(II) PTCE 95–60, PTCE 96–23, PTCE 91–38, PTCE 90–1, PTCE 84–14 OR SOME OTHER
PROHIBITED TRANSACTION EXEMPTION IS APPLICABLE TO THE PURCHASE, HOLDING AND
DISPOSITION OF THIS NOTE BY THE ACQUIRER.

 

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THIS NOTE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE
PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE SECOND AMENDED
AND RESTATED LOAN FUNDING AND SERVICING AGREEMENT REFERRED TO HEREIN.

 

THE PRINCIPAL AMOUNT OF THIS NOTE WILL VARY AS ADVANCES ARE MADE AND PAID DOWN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE MAXIMUM AMOUNT SHOWN ON THE FACE THEREOF.

 

FOR VALUE RECEIVED, ACS FUNDING TRUST I, a Delaware statutory trust (the
“Borrower”), promises to pay to BANK OF AMERICA, NATIONAL ASSOCIATION a national
banking association (the “Lender Agent”), as the agent for YC SUSI TRUST, a
Delaware statutory trust (the “Conduit Lender”) or its or the Conduit Lender’s
successors or assigns, the principal sum of ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000) or, if less, the unpaid principal amount of the aggregate loans
(“Advances”) made by the Conduit Lender to the Borrower pursuant to the Second
Amended and Restated Loan Funding and Servicing Agreement (as defined below), as
set forth on the attached Schedule, on the dates specified in the Second Amended
and Restated Loan Funding and Servicing Agreement, and to pay interest on the
unpaid principal amount of each Advance on each day that such unpaid principal
amount is outstanding at the applicable Interest Rate related to such Advance as
provided in the Second Amended and Restated Loan Funding and Servicing Agreement
on each Payment Date and each other dates specified in the Second Amended and
Restated Loan Funding and Servicing Agreement.

 

This Note is issued pursuant to the Second Amended and Restated Loan Funding and
Servicing Agreement, dated as of August 10, 2004 (as amended, modified, waived,
supplemented or restated from time to time, the “Second Amended and Restated
Loan Funding and Servicing Agreement”), by and among the Borrower, American
Capital Strategies, Ltd., as the servicer, the Conduit Lenders and Institutional
Lenders from time to time party thereto, the Lender Agents from time to time
party thereto, Wachovia Capital Markets, LLC, as the deal agent, JPMorgan Chase
Bank, as the swingline lender, and Wells Fargo Bank, National Association, as
the backup servicer and as the collateral custodian. Capitalized terms used but
not defined in this Note are used with the meanings ascribed to them in the
Second Amended and Restated Loan Funding and Servicing Agreement.

 

Notwithstanding any other provisions contained in this Note, if at any time the
rate of interest payable by the Borrower under this Note, when combined with any
and all other charges provided for in this Note, in the Second Amended and
Restated Loan Funding and Servicing Agreement or in any other document (to the
extent such other charges would constitute interest for the purpose of any
applicable law limiting interest that may be charged on this Note), exceeds the
highest rate of interest permissible under applicable law (the “Maximum Lawful
Rate”), then so long as the Maximum Lawful Rate would be exceeded the rate of
interest under this Note shall be equal to the Maximum Lawful Rate. If at any
time thereafter the rate of interest payable under this Note is less than the
Maximum Lawful Rate, the Borrower shall continue to pay interest under this Note
at the Maximum Lawful Rate until such time as the total interest paid by the
Borrower is equal to the total interest that would have been paid had applicable
law not

 

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limited the interest rate payable under this Note. In no event shall the total
interest received by the Conduit Lender under this Note exceed the amount which
the Conduit Lender could lawfully have received had the interest due under this
Note been calculated since the date of this Note at the Maximum Lawful Rate.

 

Payments of the principal of, and interest on, Advances represented by this Note
shall be made by the Borrower to the holder hereof by wire transfer of
immediately available funds in the manner and at the address specified for such
purpose as provided in Article 2 of the Second Amended and Restated Loan Funding
and Servicing Agreement, or in such manner or at such other address as the
holder of this Note shall have specified in writing to the Borrower for such
purpose, without the presentation or surrender of this Note or the making of any
notation on this Note.

 

If any payment under this Note falls due on a day that is not a Business Day,
then such due date shall be extended to the next succeeding Business Day and
interest shall be payable on any principal so extended at the applicable
Interest Rate.

 

If all or a portion of (i) the principal amount hereof or (ii) any interest
payable thereon or (iii) any other amounts payable hereunder shall not be paid
when due (whether at maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum that is equal to the Base Rate
plus 1.0%, in each case from the date of such non-payment to (but excluding) the
date such amount is paid in full.

 

Portions or all of the principal amount of the Note shall become due and payable
at the time or times set forth in the Second Amended and Restated Loan Funding
and Servicing Agreement. Any portion or all of the principal amount of this Note
may be prepaid, together with interest thereon (and as set forth in the Second
Amended and Restated Loan Funding and Servicing Agreement, certain costs and
expenses of the Conduit Lender) at the time and in the manner set forth in, but
subject to the provisions of, the Second Amended and Restated Loan Funding and
Servicing Agreement.

 

Except as provided in the Second Amended and Restated Loan Funding and Servicing
Agreement, the Borrower expressly waives presentment, demand, diligence, protest
and all notices of any kind whatsoever with respect to this Note.

 

All amounts evidenced by this Note, the Conduit Lender’s making such Advance and
all payments and prepayments of the principal hereof and the respective dates
and maturity dates thereof shall be endorsed by the Lender Agent on the schedule
attached hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof, or otherwise recorded by the Lender
Agent in its internal records; provided, however, that the failure of the Lender
Agent to make such a notation shall not in any way limit or otherwise affect the
obligations of the Borrower under this Note as provided in the Second Amended
and Restated Loan Funding and Servicing Agreement.

 

The holder hereof may sell, assign, transfer, negotiate, grant participations in
or otherwise dispose of all or any portion of any Advances made by the Conduit
Lender and represented by this Note and the indebtedness evidenced by this Note.

 

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This Note is secured by the security interests granted pursuant to Section 8.1
of the Second Amended and Restated Loan Funding and Servicing Agreement. The
holder of this Note, as agent for the Conduit Lender, is entitled to the
benefits of the Second Amended and Restated Loan Funding and Servicing Agreement
and may enforce the agreements of the Borrower contained in the Second Amended
and Restated Loan Funding and Servicing Agreement and exercise the remedies
provided for by, or otherwise available in respect of, the Second Amended and
Restated Loan Funding and Servicing Agreement, all in accordance with, and
subject to the restrictions contained in, the terms of the Second Amended and
Restated Loan Funding and Servicing Agreement. If a Termination Event shall
occur and be continuing, the unpaid balance of the principal of all Advances,
together with accrued interest thereon, shall be declared, and become due and
payable in the manner and with the effect provided in the Second Amended and
Restated Loan Funding and Servicing Agreement.

 

This Note is one of the “Structured Notes” referred to in the Second Amended and
Restated Loan Funding and Servicing Agreement. This Note shall be construed in
accordance with and governed by the laws of the State of New York.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the undersigned has executed this Note as on the date first
written above.

 

ACS FUNDING TRUST I, as the Borrower By:  

/s/ Malon Wilkus

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Name:   Malon Wilkus Title:   Beneficiary Trustee

 

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SCHEDULE TO NOTE

 

Date of

Advance or

Repayment

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Principal

Amount of

Advance

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Principal

Amount of

Repayment

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Outstanding

Principal

Amount

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