EXHIBIT 10.1



 Exhibit 10.1 
  
 AMENDMENT NO. 2 TO  
 AMENDED AND RESTATED LOAN FUNDING AND SERVICING AGREEMENT 
 (VFCC Transaction with ACS
Funding Trust I) 
  
 THIS AMENDMENT NO. 2 TO AMENDED AND
RESTATED LOAN FUNDING AND SERVICING AGREEMENT, dated as of January 2, 2004 (this “Amendment”), is entered into by and among ACS FUNDING TRUST I, as the borrower (in such capacity, the “Borrower”), AMERICAN
CAPITAL STRATEGIES, LTD., as the servicer (in such capacity, the “Servicer”), VARIABLE FUNDING CAPITAL CORPORATION, as the conduit lender (in such capacity, the “Conduit Lender”), WACHOVIA CAPITAL MARKETS,
LLC (f/k/a Wachovia Securities, Inc.), as the deal agent (in such capacity, the “Deal Agent”), WACHOVIA BANK, NATIONAL ASSOCIATION (“WBNA”), as the swingline lender (in such capacity, the “Swingline
Lender”), WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as the collateral custodian (in such capacity, the “Collateral Custodian”) and as the backup servicer (in such capacity, the “Backup
Servicer”), and is acknowledged and agreed to by WACHOVIA BANK, NATIONAL ASSOCIATION, as the hedge counterparty (in such capacity, the “Hedge Counterparty”). Capitalized terms used and not otherwise defined herein shall
have the meanings given to such terms in the Agreement (as defined below). 
  
 R E C I T A L S 
  
 WHEREAS, the parties hereto entered into that certain Amended and Restated Loan Funding and Servicing Agreement, dated as of June 13, 2003 (such
agreement as amended, modified, supplemented, waived or restated from time to time, the “Agreement”); 
  
 WHEREAS, the parties hereto desire to amend the Agreement in certain respects as provided herein; 
  
 NOW, THEREFORE, based upon the above Recitals, the mutual premises and
agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 
  
 SECTION 1. Amendments. 
  
 (a) The definition of “Availability” in Section 1.1 of the
Agreement is hereby amended to substitute “February 28, 2004” for “January 4, 2004” appearing therein. 
  
 SECTION 2. Agreement in Full Force and Effect as Amended and Waived. 
  
 Except as specifically amended and waived hereby, all provisions of the Agreement shall remain in full force and effect.
After this Amendment becomes effective, all references to the Agreement, the “Loan Funding and Servicing Agreement,” “hereof,” “herein,” or words of similar effect referring to the Agreement shall be deemed to mean the
Agreement as amended hereby. This Amendment shall not constitute a novation of the Agreement, but shall constitute an amendment and waiver thereof. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision
of the Agreement other than as expressly set forth herein. 







 SECTION 3. Representations. 
  
 Each of the Borrower and Servicer represent and warrant as of the date of this Amendment as follows: 
  
 (i) it is duly incorporated or organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or organization; 
  
 (ii) the execution, delivery and performance by it of this Amendment are within its powers, have been duly authorized, and do not
contravene (A) its charter, by-laws, or other organizational documents, or (B) any Applicable Law; 
  
 (iii) no consent, license, permit, approval or authorization of, or registration, filing or declaration with any governmental authority,
is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment by or against it; 
  
 (iv) this Amendment has been duly executed and delivered by it; 
  
 (v) this Amendment constitutes its legal, valid and binding obligation enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity; 
  
 (vi) it is not in default under the Agreement; and

  
 (vii) there is no Termination Event,
Unmatured Termination Event, or Servicer Termination Event. 
  
 SECTION 4. Conditions to Effectiveness. 
  
 The effectiveness of this Amendment is conditioned upon (i) the payment by the Servicer of the structuring fee due to the Deal Agent in the amount of $190,000, (ii) payment of the outstanding fees and disbursements of Mayer, Brown, Rowe
& Maw LLP, as counsel to the Deal Agent, (iii) delivery of executed signature pages by all parties hereto to the Deal Agent and (iv) the receipt by the Deal Agent of such legal opinions as are reasonably requested and in a form and substance
satisfactory to it. 
  
 SECTION 5. Miscellaneous.

  
 (a) This Amendment may be executed in any number of
counterparts (including by facsimile), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.

  

 2 








 (b) The descriptive headings of the various sections of this Amendment are inserted for convenience of
reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. 
  
 (c) This Amendment may not be amended or otherwise modified except as provided in the Agreement. 
  
 (d) The failure or unenforceability of any provision hereof shall not affect
the other provisions of this Amendment. 
  
 (e) Whenever the
context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the
masculine and feminine. 
  
 (f) This Amendment represents the
final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties. There are no unwritten oral agreements between the parties. 
  
 (g) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS. 
  
 [Remainder of Page Intentionally Left Blank] 
  

 3 








 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective
officers thereunto duly authorized, as of the date first above written. 
  

							
	THE BORROWER:	 	ACS FUNDING TRUST I
				
	 	 	 	 	 By:
	 	  


	 	 	 	 	 Name:
	 	  


	 	 	 	 	 Title:
	 	  


			
	 	 	 	 	 ACS Funding Trust I

	 	 	 	 	 c/o American Capital Strategies, Ltd.

	 	 	 	 	 2 Bethesda Metro Center, 14th Floor

	 	 	 	 	 Bethesda, Maryland 20814

	 	 	 	 	 Attention:    Compliance Officer

	 	 	 	 	 Facsimile:     (301) 654-6714

	 	 	 	 	 Telephone:   (301) 951-6122


  

							
	THE SERVICER:	 	AMERICAN CAPITAL STRATEGIES, LTD.
				
	 	 	 	 	 By:
	 	  


	 	 	 	 	 Name:
	 	  


	 	 	 	 	 Title:
	 	  


			
	 	 	 	 	 American Capital Strategies, Ltd.

	 	 	 	 	 2 Bethesda Metro Center, 10 Floor

	 	 	 	 	 Bethesda, Maryland 20814

	 	 	 	 	 Attention:    Compliance Officer

	 	 	 	 	 Facsimile:     (301) 654-6714

	 	 	 	 	 Telephone:   (301) 951-6122


  
 [SIGNATURES CONTINUED
ON FOLLOWING PAGE] 








									
	CONDUIT LENDER:	 	 	 	 VARIABLE FUNDING CAPITAL
 CORPORATION

	Commitment: (a) prior to the Facility Increase Expiration Date, $305,000,000 and (b) on and after the Facility Increase Expiration Date, $225,000,000;
provided, however, that the sum of the Advances outstanding under the VFCC Note and the Swingline Advances outstanding under the Swingline Note shall not, in the aggregate, exceed the Facility Amount.	 	 	 	 By:
	 	Wachovia Capital Markets, LLC (f/k/a Wachovia Securities, Inc.), as attorney-in-fact By:
	 	 	 	 By:
	 	  


	 	 	 	Name:	 	  


	 	 	 	 Title:
	 	  


	 	 	 	  
 Variable Funding Capital Corporation
 c/o Wachovia Capital Markets, LLC
 One Wachovia Center, Mail Code:
NC0610
 301 South College Street
 Charlotte, North Carolina
28288

	 	 	 	Attention: Conduit Administration
	 	 	 	Facsimile: (704) 383-6036
	 	 	 	 	 	 	 Telephone: (704) 383-9343

				
	                                       
             with a copy to:	 	 	 	 	 	 
	 	 	 	 	 	 	 Lord Securities Corp.
 2 Wall Street, 19th
Floor
 New York, New York 10005

	 	 	 	 	 	 	Attention: Vice President
	 	 	 	 	 	 	Facsimile: (212) 346-9012
	 	 	 	 	 	 	 Telephone: (212) 346-9008


  
 [SIGNATURES CONTINUED
ON FOLLOWING PAGE] 








									
	THE DEAL AGENT:	 	 	 	 WACHOVIA CAPITAL MARKETS, LLC
 (f/k/a Wachovia Securities, Inc.)

					
	 	 	 	 	 	 	 By:
	 	  


	 	 	 	 	 	 	 Name:
	 	  


	 	 	 	 	 	 	 Title:
	 	  


				
	 	 	 	 	 	 	 Wachovia Capital Markets, LLC

	 	 	 	 	 	 	 One Wachovia Center, Mail Code: NC0610

	 	 	 	 	 	 	 301 South College Street

	 	 	 	 	 	 	 Charlotte, North Carolina 28288

	 	 	 	 	 	 	 Attention:    Raj Shah

	 	 	 	 	 	 	 Facsimile:     (704) 383-4012

	 	 	 	 	 	 	 Telephone:   (704) 374-6230

			
	SWINGLINE LENDER	 	 	 	WACHOVIA BANK, NATIONAL
ASSOCIATION
	Commitment: $30,000,000; provided, however, that the sum of the Advances outstanding under the VFCC Note and the Swingline Advances outstanding under
the Swingline Note shall not, in the aggregate, exceed the Facility Amount.	 	 	 	  
 By:
	 	  


	 	 	 	 Name:
	 	  


	 	 	 	 Title:
	 	  


				
	 	 	 	 	 	 	 Wachovia Bank, National Association

	 	 	 	 	 	 	 One Wachovia Center, Mail Code: NC0610

	 	 	 	 	 	 	 301 South College Street

	 	 	 	 	 	 	 Charlotte, North Carolina 28288

	 	 	 	 	 	 	 Attention:    Raj Shah

	 	 	 	 	 	 	 Facsimile:     (704) 383-4012

	 	 	 	 	 	 	 Telephone:   (704) 374-6230


  
 [SIGNATURES CONTINUED
ON THE FOLLOWING PAGE] 








									
	THE BACKUP SERVICER:	 	 	 	WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
					
	 	 	 	 	 	 	 By.
	 	  


	 	 	 	 	 	 	 Name:
	 	  


	 	 	 	 	 	 	 Title:
	 	  


				
	 	 	 	 	 	 	 Wells Fargo Bank Minnesota, National Association

	 	 	 	 	 	 	 Sixth Street and Marquette, MAC: N9311-161

	 	 	 	 	 	 	 Minneapolis, Minnesota 55479

	 	 	 	 	 	 	 Attention:    Corporate Trust Services

	 	 	 	 	 	 	                       Asset-Backed Administration

	 	 	 	 	 	 	 Facsimile:     (612) 667-3464

	 	 	 	 	 	 	 Telephone:  (612) 667-8058

			
	THE COLLATERAL CUSTODIAN:	 	 	 	WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
					
	 	 	 	 	 	 	 By:
	 	  


	 	 	 	 	 	 	 Name:
	 	  


	 	 	 	 	 	 	 Title:
	 	  


				
	 	 	 	 	 	 	 Wells Fargo Bank Minnesota, National Association

	 	 	 	 	 	 	 Sixth Street and Marquette, MAC: N9311-161

	 	 	 	 	 	 	 Minneapolis, Minnesota 55479

	 	 	 	 	 	 	 Attention:    Corporate Trust Services

	 	 	 	 	 	 	                       Asset-Backed Administration

	 	 	 	 	 	 	 Facsimile:     (612) 667-3464

	 	 	 	 	 	 	 Telephone:  (612) 667-8058


  
 [SIGNATURES CONTINUED
ON THE FOLLOWING PAGE] 







 Acknowledged and Agreed as 
 of the date above first written. 
  
 WACHOVIA BANK, NATIONAL 
 ASSOCIATION, as the Hedge Counterparty 
  

			
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  


	
	 Wachovia Bank, National Association

	 One Wachovia Center, Mail Code: NC0610

	 Charlotte, North Carolina 28288

	 Attention:    Raj Shah

	 Facsimile:     (704) 383-4012

	 Telephone:  (704) 374-6230