Exhibit 10.13

 

THE NOTES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND SUCH NOTES OR ANY INTEREST THEREIN MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY NOTES IS HEREBY
NOTIFIED THAT THE SELLER OF THE NOTES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE
SECURITIES ACT.

 

THE HOLDER OF THE NOTES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT
OF THE COMPANY THAT (A) SUCH NOTES MAY BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED ONLY TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED
PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY NOTES
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

 

THE NOTES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN
AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF NOTES , OR ANY INTEREST THEREIN, IN
A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND
MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH NOTES FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH
NOTES , OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED
TO HAVE NO INTEREST WHATSOEVER IN SUCH NOTES.

 

THE HOLDER OF THIS NOTE, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR
THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH
A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON
OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF
ANY PLAN MAY ACQUIRE OR HOLD THIS NOTE OR ANY INTEREST HEREIN. ANY PURCHASER OR
HOLDER OF THE NOTES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.

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AMERICAN CAPITAL STRATEGIES, LTD.

 

Floating Rate Senior Note, Series 2005-B, due October 30, 2020

 

No. 1    September 26, 2005

 

$21,875,000

 

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 Merrill Lynch, Pierce, Fenner &
Smith, or registered assigns, the principal sum of TWENTY ONE MILLION EIGHT
HUNDRED SEVENTY FIVE THOUSAND DOLLARS on October 30, 2020 with interest
(computed on the basis of a 360-day year of twelve 30-day months during the
Fixed Rate Period and, thereafter, on the basis of a 360-day year and the actual
number of days elapsed in the relevant interest payment period) (a) on the
unpaid balance thereof at the rate of (i) 6.923% per annum from the date hereof
through the interest payment date in October, 2015 (the “Fixed Rate Period”),
and (ii) on the unpaid balance thereof at the rate of LIBOR (as calculated on
Schedule A hereto) plus 2.65% per annum after October 30, 2015, in each case
payable semiannually in arrears, on the thirtieth (30th) day of January, April,
July and October in each year, commencing with October 30, 2005, 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 and any overdue payment of interest, 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) 6.923% through the interest
payment date in October, 2015 and LIBOR plus 2.65% thereafter or (2) 2.00% over
the rate of interest publicly announced by JPMorgan Chase Bank, National
Association, in New York, New York as its “base” or “prime” rate.

 

Payments of principal of and interest on this Note are to be made in lawful
money of the United States of America.

 

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 September 26, 2005
(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 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 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.

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IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by their respective duly authorized officers as of the day and year
and at the place set forth above.

 

AMERICAN CAPITAL STRATEGIES, LTD.

By:   /S/    SAMUEL A. FLAX        

Name:

  Samuel A. Flax

Title:

  Executive Vice President, General Counsel and Secretary

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SCHEDULE A

 

DETERMINATION OF LIBOR

 

With respect to the Notes, the London interbank offered rate (“LIBOR”) shall be
determined by a calculation agent in accordance with the following provisions
(in each case rounded to the nearest .000001%):

 

(1) On the second LIBOR Business Day (as defined below) prior to an interest
payment date (except with respect to the first interest payment period, such
date shall be September 21, 2005) (each such day, a “LIBOR Determination Date”),
LIBOR for any given security shall for the following interest payment period
equal the rate, as obtained by the calculation agent from Bloomberg Financial
Markets Commodities News, for three-month Eurodollar deposits that appears on
Dow Jones Telerate Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange
Definitions), or such other page as may replace such Page 3750, as of 11:00 a.m.
(London time) on such LIBOR Determination Date.

 

(2) If, on any LIBOR Determination Date, such rate does not appear on Dow Jones
Telerate Page 3750 or such other page as may replace such Page 3750, the
calculation agent shall determine the arithmetic mean of the offered quotations
of the Reference Banks (as defined below) to leading banks in the London
interbank market for three-month Eurodollar deposits in an amount determined by
the calculation agent by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by
the calculation agent to the Reference Banks. If, on any LIBOR Determination
Date, at least two of the Reference Banks provide such quotations, LIBOR shall
equal such arithmetic mean of such quotations. If, on any LIBOR Determination
Date, only one or none of the Reference Banks provide such quotations, LIBOR
shall be deemed to be the arithmetic mean of the offered quotations that leading
banks in the City of New York selected by the calculation agent are quoting on
the relevant LIBOR Determination Date for three-month Eurodollar deposits in an
amount determined by the calculation agent by reference to the principal London
offices of leading banks in the London interbank market; provided, that if the
calculation agent is required but is unable to determine a rate in accordance
with at least one of the procedures provided above, LIBOR shall be LIBOR as
determined on the previous LIBOR Determination Date.

 

(3) As used herein: “Reference Banks” means four major banks in the London
interbank market selected by the calculation agent; and “LIBOR Business Day”
means a day on which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in London.