EX-10.1






Exhibit 10.1




Execution Copy



Allied Capital Corporation




Second Omnibus Amendment to the Note Agreements




Dated as of December 30, 2008




Re:




Note Agreement dated as of May 14, 2003

$147,000,000 6.05% Senior Notes, Series B, due May 14, 2010

and

Note Agreement dated as of November 15, 2004

$252,500,000 5.53% Senior Notes, Series A, due November 15, 2009

$72,500,000 5.99% Senior Notes, Series B, due November 15, 2011

and

Note Agreement dated as of October 13, 2005

$261,000,000 6.15% Senior Notes, Series A, due October 13, 2010

$89,000,000 6.34% Senior Notes, Series B, due October 13, 2012

and

Note Agreement dated as of June 20, 2008

$140,500,000 7.82% Senior Notes, Series 2008-A, due June 20, 2013

$52,500,000 8.14% Senior Notes, Series 2008-B, due June 20, 2015




1




Allied Capital Corporation

1919 Pennsylvania Avenue, N.W.

Washington, DC 20006




Second Omnibus Amendment to the Note Agreements




Dated as of December 30, 2008




Re: Note Agreement dated as of May 14, 2003

$147,000,000 6.05% Senior Notes, Series B, due May 14, 2010

and

Note Agreement dated as of November 15, 2004

$252,500,000 5.53% Senior Notes, Series A, due November 15, 2009

$72,500,000 5.99% Senior Notes, Series B, due November 15, 2011

and

Note Agreement dated as of October 13, 2005

$261,000,000 6.15% Senior Notes, Series A, due October 13, 2010

$89,000,000 6.34% Senior Notes, Series B, due October 13, 2012

and

Note Agreement dated as of June 20, 2008

$140,500,000 7.82% Senior Notes, Series 2008-A, due June 20, 2013

$52,500,000 8.14% Senior Notes, Series 2008-B, due June 20, 2015




To each of the Noteholders


named in Exhibit A attached hereto which are also


signatories to this Second Omnibus Amendment


to the Note Agreements (this “Second Omnibus Amendment”).



Ladies and Gentlemen:



Reference is made to (i) the Note Agreement dated as of May 14, 2003, as amended by that
certain First Amendment to Note Agreement dated as of February 29, 2008 and that certain First
Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008 (as amended, the
“2003 Note Agreement”) under and pursuant to which the $147,000,000 6.05% Senior Notes, Series B,
due May 14, 2010 (the “2003 Notes”) were originally issued and sold, (ii) the Note Agreement dated
as of November 15, 2004, as amended by that certain First Amendment to Note Agreement dated as of
February 29, 2008 and that certain First Omnibus Waiver and Amendment to the Note Agreements dated
as of July 25, 2008 (as amended, the “2004 Note Agreement”) under and pursuant to which (a) the
$252,500,000 5.53% Senior Notes, Series A, due November 15, 2009 (the “2004 Series A Notes”) and
(b) the $72,500,000 5.99% Senior Notes, Series B, due November 15, 2011 (the “2004 Series B Notes”,
and together with the 2004 Series A Notes, the “2004 Notes”) were originally issued and sold, (iii)
the Note Agreement dated as of October 13, 2005, as amended by that certain First Amendment to Note
Agreement dated as of February 29, 2008 and that certain First Omnibus Waiver and Amendment to the
Note Agreements dated as of July 25, 2008 (as amended, the “2005 Note Agreement”) under and
pursuant to which (a) the $261,000,000 6.15% Senior Notes, Series A, due October 13, 2010 (the
“2005 Series A Notes”) and (b) the $89,000,000 6.34% Senior Notes, Series B, due October 13, 2012
(the “2005 Series B Notes”, and together with the 2005 Series A Notes, the “2005 Notes”) were
originally issued and sold, and (iv) the Note Agreement dated as of June 20, 2008, as amended by
that certain First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008
(as amended, the “2008 Note Agreement”) under and pursuant to which (a) the $140,500,000 7.82%
Senior Notes, Series 2008-A, due June 20, 2013 (the “2008 Series A Notes”) and (b) the $52,500,000
8.14% Senior Notes, Series 2008-B, due June 20, 2015 (the “2008 Series B Notes”, and together with
the 2008 Series A Notes, the “2008 Notes”, and together with the 2003 Notes, the 2004 Notes and the
2005 Notes, the “Existing Notes”) were originally issued and sold, each of which are by and among
Allied Capital Corporation, a Maryland corporation (the “Company”), and the institutional investors
named therein. The current holders of the Existing Notes are named in Exhibit A hereto and are
collectively referred to as the “Noteholders” and individually as a “Noteholder”. The 2003 Note
Agreement, the 2004 Note Agreement, the 2005 Note Agreement and the 2008 Note Agreement are
collectively referred to as the “Note Agreements” and individually as a “Note Agreement”. Terms
used but not otherwise defined herein shall have the meanings set forth in the Note Agreements.



The Company has requested certain amendments to the Note Agreements and hereby agrees with you
as follows:



Article 1.




Amendment of Notes, Increase in Interest Rate




Upon the Effective Date (as defined in Section 5.5 of this Second Omnibus Amendment),
automatically, and without further action on the part of either the Noteholders or the Company, the
rate of interest borne by each series of Existing Notes (including the applicable default rate)
shall be permanently increased by 100 basis points per annum and each Existing Note (other than the
principal amount thereof and the payee named therein) shall be amended and restated in its entirety
to read as set forth in Exhibits B-1 through B-7 hereto, respectively (each, a “Restated Note”)
(and the form of Note(s) attached as an exhibit to each Note Agreement shall be amended to read as
set forth in Exhibits B-1 through B-7, respectively). The Restated Notes shall evidence the same
indebtedness formerly evidenced by the Existing Notes. Accrued and unpaid interest outstanding in
respect of any of the Existing Notes as of the Effective Date shall be due and payable on the first
interest payment date applicable to each Restated Note following the Effective Date. Upon the
request of any Noteholder, the Company shall exchange such Noteholder’s Existing Note(s) for the
corresponding Restated Note(s). The term “Notes” as used herein and in each Note Agreement, as
amended by this Second Omnibus Amendment, shall include each such Restated Note (including any
notes issued in substitution therefore pursuant to Section 9.2, in the case of the 2005 Note
Agreement, and Section 10.2, in the case of the 2003 Note Agreement, the 2004 Note Agreement and
the 2008 Note Agreement); provided, that as used in each Note Agreement the term “Notes” shall
include only such Restated Notes that are amendments and restatements of Existing Notes issued
under such Note Agreement.



In addition, from and after the Effective Date, (a) each reference to the rate of interest
(including the applicable default rate), borne by a Note in any Note Agreement shall be amended to
reflect the applicable increase to such rate of interest, as set forth in this Article 1, and (b)
Section 1.2 of each Note Agreement and the first paragraph of each Note shall be further amended
(as reflected in Section 2.1 and Exhibits B-1 through B-7) to provide for the payment of interest
at the default rate so long as an Event of Default exists. Notwithstanding the increase in the
rate of interest borne by the Notes resulting from the amendments set forth in this Article 1, the
Make-Whole Amount and, where applicable, the Modified Make-Whole Amount for each Note shall
continue to be calculated based on the rate of interest borne by such Note upon its original
issuance.



Article 2.




Amendment of the Note Agreements.




Section 2.1. Amendment of Section 1.2 (Applicable Interest Rate(s)). (a) The reference in
Section 1.2 of each Note Agreement to the rate of interest borne by the applicable Notes
(including, without duplication of any increase provided for in Section 2.1(b) of this Second
Omnibus Amendment, the default rate) shall be increased by 100 basis points per annum.



(b) The last sentence of Section 1.2 of each Note Agreement shall be and is hereby amended
and restated in its entirety as follows:



Interest on the [Series 2008]1 Notes is payable
semiannually on [     ]2 and [     ]3 in
each year, commencing [     ]4, until such
principal sum shall have become due and payable (whether at
maturity, upon notice of prepayment or otherwise) and the Company
shall pay on demand interest on any overdue principal and
[premium]5[Premium]6 (as provided herein) and,
to the extent permitted by applicable law, on any overdue interest,
from the due date thereof (whether by acceleration or otherwise)
and, during the continuance of any other Event of Default, on the
unpaid balance thereof, at a rate of [     ]7 per annum for
the [     ]8 Notes and [     ]9 per annum for
the [     ]10 Notes until paid.



Section 2.2. Amendment of Section 5.5. (Nature of Business). Section 5.5 of the 2003 Note
Agreement, the 2004 Note Agreement and the 2005 Note Agreement shall be and is hereby amended by
the addition of the following sentence to the end thereof:



The Company will maintain its status as a RIC under the Code, and as
a “business development company” under the Investment Company Act.
The Company will not and will not permit any Consolidated Subsidiary
to (a) become a Person described or designated in the Specially
Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti-Terrorism Order
or (b) knowingly engage in any dealings or transactions with any
such Person.



Section 2.3. Amendment of Section [5.6]/[5.7(a)] (Capital Maintenance). From and after
December 26, 2008, Section 5.6, in the case of the 2003 Note Agreement, the 2004 Note Agreement and
the 2005 Note Agreement, and Section 5.7(a), in the case of the 2008 Note Agreement, shall be and
is hereby amended and restated in its entirety as follows:



[Section 5.6] / [(a)] Capital Maintenance. The Company shall
at all times maintain Consolidated Shareholders Equity in an amount
not less than the greater of (i) $1,500,000,000 and (ii) 85% of
Consolidated Adjusted Debt.



Section 2.4. Amendment of Section [5.7]/[5.7(b)] (Interest Charges Coverage Ratio). Section
5.7, in the case of the 2003 Note Agreement, the 2004 Note Agreement and the 2005 Note Agreement,
and Section 5.7(b), in the case of the 2008 Note Agreement, shall be and is hereby amended and
restated in its entirety as follows:



[Section 5.7] / [(b)] Interest Charges Coverage Ratio. The
Company shall maintain the ratio of Adjusted EBIT to Interest
Expense of the Company and its Consolidated Subsidiaries, determined
on a consolidated basis as of the last day of each fiscal quarter
for the period of four consecutive fiscal quarters ending on such
day, at not less than (i) 1.4 to 1.0 for the fiscal quarter ending
December 31, 2008 and each fiscal quarter thereafter to and
including the fiscal quarter ending December 31, 2009, (ii) 1.6 to
1.0 for the fiscal quarter ending March 31, 2010 and each fiscal
quarter thereafter to and including the fiscal quarter ending
December 31, 2010 and (iii) 1.7 to 1.0 for the fiscal quarter
ending March 31, 2011 and each fiscal quarter thereafter.



Section 2.5. Amendment of Section [5.8(b)]/[5.7(d)] (Priority Debt). Section 5.8(b), in the
case of the 2003 Note Agreement, the 2004 Note Agreement and the 2005 Note Agreement, and Section
5.7(d), in the case of the 2008 Note Agreement, shall be and is hereby amended and restated in its
entirety as follows:



[(b)] /[(d) Priority Debt.] The Company shall not at any time
permit any Priority Debt to be outstanding; other than (i) Senior
Secured Obligations, (ii) Capitalized Leases for equipment used in
the ordinary course of business of the Company and its Consolidated
Subsidiaries in an aggregate principal amount not in excess of
$5,000,000, (iii) Interest Rate Swaps (which may be collateralized)
entered into in the ordinary course of business of the Company and
its Consolidated Subsidiaries, and (iv) Debt of a Consolidated
Subsidiary owing to the Company or another Consolidated Subsidiary.



Section 2.6. Amendment of Section [5.8]/[5.7] ([Limitations on Debt; Interest Rate Swaps] /
[Financial Covenants]). Section 5.8, in the case of the 2003 Note Agreement, the 2004 Note
Agreement and the 2005 Note Agreement, and Section 5.7, in the case of the 2008 Note Agreement,
shall be and is hereby amended by the addition of the following new clause (f) to the end thereof:



(f) Ratio of Consolidated Total Adjusted Assets to Secured
Debt. From and after the Collateral Effective Date, the Company
shall have (i) on the last day of each quarterly fiscal period and
(ii) at the time of incurrence of any Secured Debt, a ratio of
Consolidated Total Adjusted Assets (measured, in the case of clause
(ii), on a pro forma basis using asset values as of the most recent
fiscal quarter for which financial statements have been delivered)
to Secured Debt not less than 2.25 to 1.



Section 2.7. Amendment of Section [5.8(d)]/[5.8(a)] (Limitations on Debt; Interest Rate Swaps]
/ [Subsidiary Guaranties; Interest Rate Swaps]). Section 5.8(d), in the case of the 2003 Note
Agreement, the 2004 Note Agreement and the 2005 Note Agreement, and Section 5.8(a), in the case of
the 2008 Note Agreement, shall be and is hereby amended and restated in its entirety as follows:



[(d)] / [(a)] Intentionally Omitted.



Section 2.8. Amendment of Section 5.9 (Limitation on Liens). (a) Section 5.9 of each Note
Agreement shall be and is hereby amended by: (i) deleting the “and” at the end of clause (f); (ii)
deleting the “.” at the end of clause (g) and substituting “; and” in lieu thereof; and
(iii) adding the following new clause (h) to the end thereof:



(h) Liens created under, or expressly permitted by, the
Collateral Documents, including the Liens securing the Notes and the
other Senior Secured Obligations, so long as the Notes shall at all
times be equally and ratably secured thereby and the Intercreditor
Agreement shall be in full force and effect.



(b) Section 5.9 of each Note Agreement shall be and is hereby further amended by deleting the
last paragraph thereof and substituting the following in lieu thereof:



In accordance with Article 4 of the Second Omnibus Amendment, the
Company has agreed to secure the Notes and the other Senior Secured
Obligations on or prior to the Collateral Effective Date. The
Company covenants and agrees to comply with the requirements of
Article 4 of the Second Omnibus Amendment (including the obligation
to secure the Notes and the other Senior Secured Obligations on or
prior to the Collateral Effective Date). In addition, from and
after the Collateral Effective Date, the Company hereby agrees as
follows:



(i) Collateral Documents. The Company will, and will cause each
Consolidated Subsidiary to, (A) comply with and perform each of the
terms, conditions and covenants set forth in the Collateral
Documents, and (B) cause the representations and warranties set
forth in the Collateral Documents to be true and correct as provided
in the Collateral Documents.



(ii) Additional Collateral. If at any time the Company or any
Consolidated Subsidiary shall grant to any one or more of the
Collateral Agent or a holder of any Senior Secured Obligation
additional credit support (including a Subsidiary Bank Guaranty, a
Subsidiary Existing Note Guaranty or any other Guaranty) or
collateral of any kind as additional security to secure the Senior
Secured Obligations, then the Company shall, or shall cause such
Consolidated Subsidiary to, (A) grant to the Collateral Agent for
the benefit of the Secured Parties the same credit support or
collateral so that the Notes shall at all times be secured on an
equal and ratable basis with the other Senior Secured Obligations,
and (B) deliver an opinion of counsel to the effect that such
additional credit support and the Collateral Documents relating to
any such collateral have been duly authorized, executed and
delivered by the Company or such Consolidated Subsidiary, as
applicable, constitute the legal, valid and binding obligations of
the Company or such Consolidated Subsidiary, as applicable, are
enforceable against the Company or such Consolidated Subsidiary in
accordance with the terms thereof, and covering such other matters
as the Required Holders may reasonably request. In addition, any
such credit support and new collateral shall at all times be subject
to and governed by the terms of the Intercreditor Agreement.



(iii) Additional Consolidated Subsidiaries. Within ten days
after the time that any Person becomes a Consolidated Subsidiary
(other than the Pledge LLC) as a result of the creation of such
Consolidated Subsidiary, a merger or other consolidation permitted
by §5.11 of this Agreement or otherwise, (A) such Consolidated
Subsidiary shall become a party to the Security Agreement and shall
pledge a valid and perfected first priority security interest in all
of its real and personal property (other than real and personal
property which constitute Excluded Assets) whether tangible or
intangible, pursuant to a joinder agreement in form and substance
satisfactory to the Required Holders, (B) 100% of such Consolidated
Subsidiary’s Equity Interests (65% in the case of any Consolidated
Subsidiary organized under the laws of any jurisdiction outside of
the United States of America) shall be pledged under the Collateral
Documents, and (C) the Holders shall receive such board resolutions,
officer’s certificates, corporate and other documents and opinions
of counsel as the Required Holders shall reasonably request in
connection with the actions described in clauses (A) and (B) above.



(iv) Additional Secured Debt. The Company and its Consolidated
Subsidiaries may incur additional Debt secured by the Collateral
(the “Additional Secured Debt”); provided, that (A) no financial
covenants or events of default applicable to such Additional Secured
Debt shall be more restrictive than the financial covenants and
Events of Default set forth in §5 and §6, respectively, (B) at the
time of such incurrence of Additional Secured Debt and after giving
effect thereto, no Default or Event of Default shall have occurred
and be continuing, and (C) such Additional Secured Debt shall be
subject to the terms of the Intercreditor Agreement.
Notwithstanding the foregoing, the Outstanding Public Debt shall not
at any time have the benefit of or be secured by the Collateral.



(v) Additional Undertakings. The Company will use commercially
reasonable efforts to obtain the consent or approval of all third
parties required to permit the Company and its Consolidated
Subsidiaries to subject all of their assets to the Lien of the
Collateral Documents. In determining whether to obtain any such
consent or approval, the Company may take into account the cost or
charges imposed by third parties (on either the Company or any
entity in which the Company or a Consolidated Subsidiary has an
investment) to grant any such consent or approval. In addition, the
Company shall not be obligated to obtain consents or approvals in
respect of assets which in the reasonable judgment of the Company
cannot be pledged, or as to which the consent to pledge cannot be
sought, without substantially impairing the value of the asset or
the ability of the Company or a Consolidated Subsidiary to manage
the asset in the ordinary course of its business. Without limiting
the obligation of the Company set forth above, to the extent any
personal property of the Company or a Consolidated Subsidiary cannot
be pledged as Collateral on account of contractual limitations
applicable to such property but may be transferred to the Pledge
LLC, such personal property shall be transferred to the Pledge LLC.
The Company shall use commercially reasonable efforts to ensure that
the documents which govern investments made subsequent to the date
of the Second Omnibus Amendment do not restrict the ability of the
Company to subject any such investment to the Lien of the Collateral
Documents; provided that, so long as it has used such efforts, the
Company will not be precluded from making an investment as to which
the governing documents contain such a restriction.



Section 2.9. Amendment of Section 5.10 (Restricted Payments). The first paragraph of Section
5.10 of each Note Agreement shall be and is hereby amended and restated in its entirety as follows:



Section 5.10. Restricted Payments. The Company will not except
as hereinafter provided:



(a) Declare or pay any dividends, either in cash or property, on
any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of capital stock of the
Company);



(b) Directly or indirectly, or through any Subsidiary, purchase,
redeem or retire any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its
capital stock (other than in exchange for or out of the net cash
proceeds to the Company from the substantially concurrent issue or
sale of other shares of capital stock of the Company or warrants,
rights or options to purchase or acquire any shares of its capital
stock); or



(c) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital
stock;



(such declarations or payments of dividends, purchases, redemptions
or retirements of capital stock and warrants, rights or options and
all such other payments or distributions being herein collectively
called “Restricted Payments”), if after giving effect thereto: (i)
in the case of clause (a) or (c) of this §5.10, an Event of Default
described in paragraph (a) or (b) of §6.1 shall exist, and in the
case of clause (b) of this §5.10, any Default or Event of Default
shall exist; (ii) in the case of clause (a) or (c) of this §5.10, as
the result of an occurrence of any Event of Default (other than that
described in paragraph (a) or (b) of §6.1) the Notes shall have
been accelerated under §6.3; or (iii) the Company would not be in
compliance with the limitations of [§5.7(c), (d), (e) or (f)
or]11 §5.8. In addition to the forgoing limitations,
prior to December 31, 2010, the Company shall not (x) pay any
dividend in excess of $0.20 per share per fiscal quarter (or such
greater amount as shall be required for the Company to maintain its
status as a RIC) or (y) purchase, redeem or retire any shares of its
capital stock of any class or any warrants, rights or options to
purchase or acquire any shares of its capital stock for an aggregate
consideration in excess of $60,000,000.



Section 2.10. Amendment of Section 5.11 (Mergers, Consolidations and Sales of Assets).
Section 5.11(a)(3) of each Note Agreement shall be and is hereby amended and restated in its
entirety as follows:



(3) So long as no Default or Event of Default shall exist (except to
the extent otherwise expressly set forth in the Intercreditor
Agreement), the Company and any Consolidated Subsidiary may sell,
transfer or otherwise dispose of all or any part of its Investments
in the ordinary course of business (which shall not include
securitization transactions).



Section 2.11. Amendment of Section 5.12 (Repurchase of Notes). Section 5.12 of each Note
Agreement shall be and is hereby amended and restated in its entirety as follows:



Section 5.12. Repurchase of Notes; Certain Payments.
(a) Neither the Company nor any Consolidated Subsidiary or
Affiliate, directly or indirectly, may repurchase or make any offer
to repurchase any Notes unless an offer has been made to repurchase
Notes, pro rata, from all holders of the Notes at the same time and
upon the same terms. In case the Company repurchases or otherwise
acquires any Notes, such Notes shall immediately thereafter be
canceled and no Notes shall be issued in substitution therefor.
Without limiting the foregoing, upon the repurchase or other
acquisition of any Notes by the Company, any Consolidated Subsidiary
or any Affiliate, such Notes shall no longer be outstanding for
purposes of any section of this Agreement [or any Supplement, in
each case]12 relating to the taking by the holders of the
Notes of any actions with respect hereto [or thereto]13,
including without limitation, §6.3, §6.4 and §7.1. Notwithstanding
the foregoing, if any Default or Event of Default exists under any
Existing Note Agreement, any offer to repurchase Notes pursuant to
this §5.12 shall be made pro rata to the holders of all Existing
Notes.



(b) Neither the Company nor any Consolidated Subsidiary or
Affiliate, directly or indirectly, may prepay, redeem, purchase,
tender or acquire any series of Outstanding Public Debt prior to the
stated maturity of such series.



(c) The Company will not exercise any right of optional
prepayment providing for prepayment with the Make-Whole Amount set
forth in any Existing Note Agreement, unless the Company shall
concurrently prepay a pro rata portion of each of the Existing Notes
outstanding under each Existing Note Agreement in accordance with
the terms of such Existing Note Agreements.



Section 2.12. Amendment of Section 5.13 (Transactions with Affiliates). Section 5.13 of the
2008 Note Agreement shall be and is hereby amended and restated in its entirety as follows:



Section 5.13. Transactions with Affiliates. The Company will
not, and will not permit any Consolidated Subsidiary to, enter into
or be a party to any transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or
exchange of property with, or the rendering of any service by or
for, any Affiliate), except transactions in the ordinary course of,
and pursuant to the reasonable requirements of the Company’s or such
Consolidated Subsidiary’s business and upon fair and reasonable
terms no less favorable to the Company or such Consolidated
Subsidiary than would be obtained in a comparable arm’s-length
transaction with a Person other than an Affiliate.



Section 2.13. Amendment of Section 5.15 (Reports and Right of Inspection). (a) Section 5.15
of each Note Agreement shall be and is hereby amended by: (i) deleting the “and” at the end of
clause (g), in the case of the 2003 Note Agreement, the 2004 Note Agreement and the 2005 Note
Agreement, and clause (h), in the case of the 2008 Note Agreement; (ii) renumbering clause “(h)” as
clause “(k)”, in the case of the 2003 Note Agreement, the 2004 Note Agreement and the 2005 Note
Agreement, and clause “(i)” as clause “(l)”, in the case of the 2008 Note Agreement; and (iii)
adding the following new clauses (h), (i) and (j) immediately following clause (g), in the case of
the 2003 Note Agreement, the 2004 Note Agreement and the 2005 Note Agreement, and clauses (i), (j)
and (k) immediately following clause (h), in the case of the 2008 Note Agreement:



[(h)] / [(i)] Intercreditor Agreement. (i)  Not less than ten
Business Days prior to execution thereof, a copy of (x) each
proposed amendment to the Collateral Documents, and (y) after the
Collateral Effective Date, each document or agreement which, if
executed and delivered, would become an additional Collateral
Document, (ii) promptly following execution thereof, one copy of
each of the documents referred to in the preceding clause (i), and
(iii) such other items pertaining to the Collateral as may be
required in accordance with the terms of the Collateral Documents;



[(i)] / [(j)] Bank Credit Agreement.  (i) Concurrently with the
delivery to the Banks, copies of all financial and other information
and certificates (including compliance certificates) and reports
delivered to the Banks pursuant to the Bank Credit Agreement or with
respect to the Collateral, (ii) not less than five days prior to the
execution thereof, a summary of the material terms of any proposed
amendment to the Bank Credit Agreement, and (iii) promptly following
execution thereof, one copy of such amendment referred to in the
preceding clause (ii);



[(j)/(k)] Collateral Report. Concurrently with the delivery of
the financial statements required to be delivered pursuant to
§5.15 (a) and (b), a schedule which lists by type and Book Value (i)
all of the assets of the Company and its Consolidated Subsidiaries,
(ii) all of the assets of the Company and its Consolidated
Subsidiaries which are subject to the Lien of the Collateral
Documents, (iii) all of the assets which are owned by Pledge LLC,
and (iv) all of the assets which are neither subject to the Lien of
the Collateral Documents nor owned by the Pledge LLC; and



(b) Section 5.15 of each Note Agreement shall be and is hereby further amended by the addition
thereto of a new paragraph at the end thereof which shall read as follows:



The Company shall at all times cause the Notes to be rated by
at least one Nationally Recognized Rating Agency; provided, that if
more than one Nationally Recognized Rating Agency rates the
Company’s Debt, each such Nationally Recognized Rating Agency shall
also rate the Notes.



Section 2.14. Amendment of Section 8.1 (Definitions). Section 8.1 of each Note Agreement
shall be and is hereby amended by amending the definitions hereinafter set forth in their entirety
to read as follows:



“Bank Credit Agreement” means the Credit Agreement between the
Banks and the Company dated as of April 9, 2008, pursuant to which
the Banks have extended credit to the Company, as the same may be
amended, renewed, extended, or replaced in accordance with its terms
and the terms of the Intercreditor Agreement.



“Existing Note Agreements” means (i) the Note Agreement dated as of
May 14, 2003, as amended by that certain First Amendment to Note
Agreement dated as of February 29, 2008, that certain First Omnibus
Waiver and Amendment to the Note Agreements dated as of July 25,
2008 and the Second Omnibus Amendment, pursuant to which the Company
has issued its $147,000,000 6.05% Senior Notes, Series B, due
May 14, 2010, and any renewal thereof, (ii) the Note Agreement dated
as of November 15, 2004, as amended by that certain First Amendment
to Note Agreement dated as of February 29, 2008, that certain First
Omnibus Waiver and Amendment to the Note Agreements dated as of July
25, 2008 and the Second Omnibus Amendment, pursuant to which the
Company has issued its $252,500,000 5.53% Senior Notes, Series A,
due November 15, 2009 and its $72,500,000 5.99% Senior Notes, Series
B, due November 15, 2011, and any renewal thereof, (iii) the Note
Agreement dated as of October 13, 2005, as amended by that certain
First Amendment to Note Agreement dated as of February 29, 2008,
that certain First Omnibus Waiver and Amendment to the Note
Agreements dated as of July 25, 2008 and the Second Omnibus
Amendment, pursuant to which the Company has issued its $261,000,000
6.15% Senior Notes, Series A, due October 13, 2010 and its
$89,000,000 6.34% Senior Notes, Series B, due October 13, 2012, and
any renewal thereof, and (iv) the Note Agreement dated as of June
20, 2008, as amended by that certain First Omnibus Waiver and
Amendment to the Note Agreements dated as of July 25, 2008 and the
Second Omnibus Amendment, pursuant to which the Company has issued
its $140,500,000 7.82% Senior Notes, Series 2008-A, due June 20,
2013 and its $52,500,000 8.14% Senior Notes, Series 2008-B, due June
20, 2015, and any renewal thereof (the “2008 Note Agreement”).



“Existing Notes” means the notes issued by the Company pursuant
to the Existing Note Agreements, as amended by the Second Omnibus
Amendment.



“Intercreditor Agreement” means the Intercreditor and Collateral
Agency Agreement to be executed among the Banks, the Collateral
Agent and the Noteholders and consented and agreed to by the Company
and the Consolidated Subsidiaries, the form and substance of which
is acceptable to the Required Holders, as the same may be amended,
modified, restated, supplemented or replaced from time to time in
accordance with the terms thereof.



“Priority Debt” means (without duplication) (i) all Debt of the
Company and its Consolidated Subsidiaries secured by a Lien, (ii)
all liabilities of the Company and its Consolidated Subsidiaries
under Interest Rate Swaps entered into for the purpose of hedging
interest rate risk with respect to Debt, if and only if such
liabilities are secured by a Lien, (iii) all unsecured Debt of
Consolidated Subsidiaries, and (iv) all unsecured liabilities of
Consolidated Subsidiaries under Interest Rate Swaps entered into for
the purpose of hedging interest rate risk with respect to Debt
(excluding in each case, any Debt or liability owing to the Company
or another Consolidated Subsidiary).



“Senior Financial Officer” means the chief financial officer, chief
operating officer, chief accounting officer, treasurer or controller
of the Company or any Consolidated Subsidiary, as applicable;
provided, that the term “Senior Financial Officer”, when used in
this Agreement without reference to any particular entity, shall
mean a Senior Financial Officer of the Company.



Section 2.15. Amendment of Section 8.1 (Definitions). Section 8.1 of each Note Agreement
shall be and is hereby amended by the addition thereto of the following definitions which shall
read as follows:



“Additional Secured Debt” shall have the meaning set forth in
§5.9(iv).



“Additional Senior Secured Obligations” shall have the meaning set
forth in the Intercreditor Agreement.



“Anti-Terrorism Order” means Executive Order No. 13,224 of
September 24, 2001, Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit or Support Terrorism, 66
U.S. Fed. Reg. 49, 079 (2001), as amended.14



“Bank Obligations” shall have the meaning set forth in the
Intercreditor Agreement.



“Collateral” shall have the meaning set forth in the Second Omnibus
Amendment.



“Collateral Agent” means Bank of America N.A. in its capacity as
collateral agent under the Collateral Documents, together with its
successors and assigns in such capacity.



“Collateral Documents” means, collectively, any security agreement,
including without limitation the Security Agreement, any pledge
agreement, any control agreement, any mortgage or deed of trust
including without limitation the Mortgages, any assignment and
endorsement of insurance, or any other agreement, joinder,
ratification, or document, together with all related financing
statements and stock powers, now or hereafter executed and delivered
in connection with this Agreement to create a Lien on any real or
personal property in favor of Collateral Agent for the benefit of
the Senior Secured Obligations, each in form and substance
satisfactory to the Required Holders, as the same may be amended,
supplemented, replaced, modified and restated from time to time in
accordance with the terms of this Agreement and the Intercreditor
Agreement.



“Collateral Effective Date” shall have the meaning set forth in the
Second Omnibus Amendment.



 “Consolidated Adjusted Debt” means
Consolidated Debt minus Guaranties (including undrawn letter of
credit obligations) included in Consolidated Debt in an amount which
does not exceed the greater of (x) the obligations from time to time
outstanding under Guaranties (including undrawn letters of credit)
given to secure payment of certain obligations of or related to
Ciena Capital LLC in an amount not in excess of $146,000,000, and
(y) $50,000,000.



“Consolidated Total Adjusted Assets” means the aggregate Book Value
(without duplication) of assets of the Company and its Consolidated
Subsidiaries which (i) constitute Collateral, or (ii) which are
owned by a Pledge LLC; provided that for purposes of determining
Consolidated Total Adjusted Assets, the aggregate Book Value of
assets which are owned by all Pledge LLC’s shall not exceed 25% of
Consolidated Total Adjusted Assets.



“Equity Interests” means, with respect to any Person, all of
the shares of capital stock of (or other ownership or profit
interests in) such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the
purchase or acquisition from such Person of such shares (or such
other interests), and all of the other ownership or profit interests
in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not
such shares, warrants, options, rights or other interests are
outstanding on any date of determination.



“Excluded Assets” shall have the meaning set forth in the Second
Omnibus Amendment.



“Fitch” means Fitch/BCA Duff & Phelps Ltd.



“Moody’s” means Moody’s Investors Service, Inc.



“Mortgage” means any mortgage, deed of trust, deed to secure, or
similar instrument under which a Lien may be granted against real
property, duly executed by the Company or one of the Consolidated
Subsidiaries covering the Real Property, appropriately conformed to
the particular requirements of each applicable jurisdiction where
such Real Property is located and in form and substance reasonably
satisfactory to the Required Holders.



“Nationally Recognized Rating Agency” means Moody’s, S&P, DBRS
Limited or Fitch.



“Note Obligations” shall have the meaning set forth in the
Intercreditor Agreement.



“Noteholders” means, collectively, each holder of an Existing Note.



“Outstanding Public Debt” means the Indenture by and between
the Company and The Bank of New York, dated as of June 16, 2006, as
supplemented by (x) the First Supplemental Indenture by and between
the Company and The Bank of New York, dated as of July 25, 2006,
pursuant to which the Company has issued its $400,000,000 6.625%
Notes due July 15, 2011, (y) the Second Supplemental Indenture by
and between the Company and The Bank of New York, dated as of
December 8, 2006, pursuant to which the Company has issued its
$250,000,000 6.0% Notes due April 1, 2012, and (z) the Third
Supplemental Indenture by and between the Company and The Bank of
New York, dated as of March 28, 2007, pursuant to which the Company
has issued its $230,000,000 6.875% Notes due April 15, 2047.



“Pledge LLC” means one or more Wholly-Owned Consolidated
Subsidiaries, each of which (i) has title to personal property which
would constitute Collateral but for limitations in the documents
which govern such personal property, or has title to real property
(ii) has no Debt outstanding other than (x) Debt owing to the
Company, and (y) Guaranties of the Senior Secured Obligations, and
(iii) has had all of its Voting Stock and Debt owing to the Company
pledged to the Collateral Agent as Collateral.



“Real Property” means the real property owned or leased by the
Company or any Consolidated Subsidiary and located in the United
States.



“Required Holders” means, at any time, the holders of not less than
51% in aggregate principal amount of the Notes at the time
outstanding.



“RIC” means a Person qualifying for treatment as a “regulated
investment company” under the Code.15



“S&P” means Standard & Poor’s Ratings Group, a division of The
McGraw-Hill Companies, Inc.



“Second Omnibus Amendment” means the Second Omnibus Amendment to the
Note Agreements dated as of December 30, 2008 among the Company and
the holders of the Existing Notes.



“Secured Debt” means, without duplication, (i) the outstanding
Existing Notes, (ii) any Additional Notes (as defined in the 2008
Note Agreement) issued pursuant to the 2008 Note Agreement, (iii)
the Debt outstanding from time to time pursuant to the Bank Credit
Agreement and (iv) any Additional Secured Debt incurred in
accordance with §5.9(iv), all of which shall be secured equally and
ratably by the Collateral pursuant to the terms of the Intercreditor
Agreement, and all of which shall be determined on a consolidated
basis in accordance with GAAP.



“Secured Party” means each holder of a Senior Secured Obligation.



“Security Agreement” means the Security Agreement to be executed by
the Company and the Consolidated Subsidiaries in favor of the
Collateral Agent for the benefit of the Secured Parties, the form
and substance of which is acceptable to the Required Holders, as
such agreement may be amended, restated, joined, supplemented or
otherwise modified from time to time in accordance with the terms
thereof.



“Senior Secured Obligations” means (i) the Note Obligations, (ii)
the Bank Obligations and (iii) the Additional Senior Secured
Obligations.



“UCC” shall have the meaning set forth in the Second Omnibus
Amendment.



Section 2.16. Amendment of Section [9.4]/[10.4] (Expenses, Stamp Tax Indemnity). Section 9.4,
in the case of the 2005 Note Agreement, and Section 10.4, in the case of the 2003 Note Agreement,
the 2004 Note Agreement and the 2008 Note Agreement, shall be and is hereby amended by the addition
of a new paragraph which shall read as follows:



Without limiting the foregoing, the Company agrees to pay all
reasonable fees of the Collateral Agent in connection with the
preparation, execution and delivery of the Intercreditor Agreement
and the Collateral Documents and the transactions contemplated
thereby, including but not limited to reasonable attorneys fees and
to pay to the Collateral Agent from time to time all reasonable
fees, and expenses and such indemnities and other amounts as shall
be required to be paid by the Company to the Collateral Agent in
accordance with the terms of the Intercreditor Agreement and the
Collateral Documents. The Company shall also pay (i) the reasonable
fees and expenses of Chapman and Cutler LLP in connection with (A)
the negotiation and review of the Collateral Documents and the
Intercreditor Agreement, including, in each case, any amendments
thereto, on behalf of the holders of the Notes and (B) any workout
or restructuring relating to the Collateral Documents and (ii) the
reasonable out of pocket expenses of the holders of the Notes
incurred in the course of (A) negotiating the Intercreditor
Agreement and the Collateral Documents, including, in each case, any
amendments thereto and (B) any workout or restructuring relating to
the Collateral Documents.



 Article 3.




Representations and Warranties.




The Company represents and warrants that as of the date hereof and after giving effect hereto:



(a) The execution and delivery of this Second Omnibus Amendment by the Company and compliance
by the Company with all of the provisions of the Note Agreements, as amended by this Second Omnibus
Amendment—




(i) are within the corporate power and authority of the Company; and




(ii) will not violate any provisions of any law or any order of any court or
governmental authority or agency, and will not conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute a default under the articles of
incorporation or bylaws of the Company or any indenture or other agreement or instrument to
which the Company is a party or by which the Company may be bound, or (other than Liens
created by the Collateral Documents) result in the imposition of any Liens or encumbrances
on any property of the Company.



(b) The execution and delivery of this Second Omnibus Amendment and the Collateral Documents
have been duly authorized by all necessary corporate action on the part of the Company and its
Consolidated Subsidiaries, as applicable, (no action by the stockholders of the Company or any
Consolidated Subsidiary being required by law, by the articles of incorporation or bylaws of the
Company or any Consolidated Subsidiary or otherwise, other than those actions which have been
obtained or effected); and this Second Omnibus Amendment has been duly executed and delivered by
the Company, and the Note Agreements and the Notes, in each case as amended by this Second Omnibus
Amendment, each constitute the legal, valid and binding obligations, contracts and agreements of
the Company, enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and similar laws affecting creditors’
rights generally, and general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).



(c) Upon the effectiveness of this Second Omnibus Amendment and that certain First Amendment
to Credit Agreement, dated as of December 30, 2008 (the “Bank Amendment ”) by and among the Banks
and the Company, no Default or Event of Default shall exist or be continuing.



(d) The Company has not paid any fee or other consideration or remuneration to any Bank, in
its capacity as such, or to any Noteholder, in its capacity as such, in connection with the
execution and delivery of the Bank Amendment or this Second Omnibus Amendment except (i) a fee
equal to 50 basis points of the commitment amount of each Bank party to the Bank Amendment, and
(ii) the fee referenced in Section 5.5(d) of this Second Omnibus Amendment.



Article 4.




Collateral




In consideration of the execution and delivery of this Second Omnibus Amendment and the
modification of certain covenants in the Note Agreements at the request of and for the benefit of
the Company and as a material inducement to the execution of this Second Omnibus Amendment, the
Company hereby agrees to secure on or prior to January 30, 2009 (such date as it may be extended
with the approval of Noteholders holding more than 50% in aggregate principal amount of all Notes
outstanding under all Note Agreements (collectively the “Majority Holders”) the “Collateral
Effective Date”) full and complete payment by the Company of all amounts due with respect to the
Notes and the Note Agreements. On or prior to the Collateral Effective Date, the Company shall
execute and deliver or cause to be executed and delivered the Collateral Documents described below
covering the property and collateral described in the Collateral Documents (which, together with
any other property and collateral which may now or hereafter secure the Notes or any part thereof,
is sometimes herein called the “Collateral”) as follows:




(a) Security Agreement — The Company will, and will cause each Consolidated Subsidiary
to, grant to the Collateral Agent, for the benefit of the Secured Parties, a valid and
perfected first priority security interest in all of its personal property (other than
personal property which constitutes Excluded Assets as such term is hereinafter defined),
whether tangible or intangible (including, without limitation, all cash, portfolio
investments, marketable securities, accounts, chattel paper, instruments, documents, books,
records, inventory, machinery, equipment, trademarks, patents, copyrights, other
intellectual property, payment intangibles, other general intangibles, commercial tort
claims, Equity Interests in its Consolidated Subsidiaries, other investment property and
other personal property described in the Security Agreement, whether now owned or hereafter
acquired, and all products and cash and noncash proceeds thereof), with perfection, in the
case of any instruments, investment property or letters of credit, being effected by the
Collateral Agent or its agent or designee obtaining control of such instruments, investment
property or letters of credit, in addition to filing a Uniform Commercial Code (“UCC”)
financing statement with respect to such instruments, investment property or letters of
credit, all pursuant to the Security Agreement and the other Collateral Documents, which
shall each be in form and substance reasonably satisfactory to the Majority Holders.




(b) Insurance — The Company will, and will cause each Consolidated Subsidiary to,
deliver to the Collateral Agent certificates of insurance and endorsements to insurance
policies naming the Collateral Agent as loss payee/mortgagee and/or additional insured, as
applicable, with respect to all Collateral and as may be required by the Collateral
Documents.




(c) Intercreditor Agreement – The Company will, and will cause each Consolidated
Subsidiary to, deliver to the Collateral Agent counterparts of the Intercreditor Agreement
in form and substance satisfactory to the Noteholders executed by the Noteholders, each of
the other Secured Parties and the Collateral Agent.




(d) Mortgages — The Company will, and will cause each Consolidated Subsidiary to,
grant to the Collateral Agent, for the benefit of the Secured Parties, a valid and perfected
first lien in all of its Real Property (other than Real Property which constitutes Excluded
Assets) pursuant to the Mortgages and other Collateral Documents related to the Mortgages
and the Real Property, including leasehold mortgagee title commitments and surveys together
with payment of all related taxes and fees, all of which shall be in form and substance
reasonably satisfactory to the Majority Holders.




(e) Officer’s Certificates – The Company will deliver to the Noteholders certificates
of officers of the Company regarding resolutions or other action, incumbency certificates
and/or other certificates in form and substance reasonably satisfactory to the Majority
Holders, which establish the identity and verify the authority and capacity of each officer
executing the Collateral Documents.




(f) Opinion(s) — The Company shall cause (i) special counsel to the Company to deliver
to the Noteholders an opinion of counsel (which shall be in customary form) with respect to
the Collateral Documents executed and delivered on or prior to the date of such opinion and
(ii) to the extent applicable, counsel from each jurisdiction in which the Company or any
Consolidated Subsidiary has Collateral to deliver to the Noteholders an opinion of counsel
(which shall be in customary form) with respect to the valid perfection of the Noteholders’
security interest in such Collateral in the applicable jurisdiction, and each such opinion
shall be reasonably satisfactory to the Majority Holders.




(g) Requested Information — The Company will, and will cause each Consolidated
Subsidiary to, execute and deliver and cause to be executed and delivered such further
documents and instruments as the Majority Holders reasonably deem necessary or desirable to
evidence and perfect their Liens in the Collateral as set forth in the Collateral Documents.



As used in this Article 4, “Excluded Assets” means (i) assets of the Company and its
Consolidated Subsidiaries which in accordance with the terms of the documents which govern such
assets and after taking into account the obligations of the Company under Section 5.9 of the Note
Agreements are not permitted or required to be pledged, assigned or otherwise used to secure the
Debt of the Company or a Consolidated Subsidiary, (ii) assets of the Company and its Consolidated
Subsidiaries which are owned by the Pledge LLC, (iii) equipment covered by Capitalized Leases and
collateral for Interest Rate Swaps, to the extent such Capitalized Leases and Interest Rate Swaps
are permitted under Section 2.5 of this Second Omnibus Amendment, and (iv) such other assets of the
Company and its Consolidated Subsidiaries as the Majority Holders agree in writing shall not
constitute Collateral.



Article 5.




Miscellaneous.




Section 5.1. Ratification of the Note Agreements. Except as herein expressly amended, the
Note Agreements are in all respects ratified and confirmed. If and to the extent that any of the
terms or provisions of the Note Agreements are in conflict or inconsistent with any of the terms or
provisions of this Second Omnibus Amendment, this Second Omnibus Amendment shall govern.



Section 5.2. References to the Agreement. References in any Note Agreement or in any Note,
certificate, instrument or other document related to or delivered in connection with the
transactions contemplated by any Note Agreement shall be deemed to be references to such Note
Agreement as amended hereby and as further amended from time to time.



Section 5.3. Release. In order to induce the Noteholders to enter into this Second Omnibus
Amendment, the Company and its Consolidated Subsidiaries acknowledge and agree that: (a) neither
the Company nor any of its Consolidated Subsidiaries has any claim or cause of action against any
of the Noteholders (or any of their respective directors, trustees, officers, employees or agents)
relating to or arising out of this Second Omnibus Amendment and the grant of Collateral provided
for herein or the Note Agreements; (b) neither the Company nor any of its Consolidated Subsidiaries
has any offset right, counterclaim or defense of any kind against any of their respective
obligations, indebtedness or liabilities to any of the Noteholders; and (c) each of the Noteholders
has heretofore properly performed and satisfied in a timely manner all of its obligations to the
Company and its Consolidated Subsidiaries under the applicable Note Agreement. The Company and its
Consolidated Subsidiaries wish to eliminate any possibility that any past conditions, acts,
omissions, events, circumstances or matters would impair or otherwise adversely affect any of the
Noteholders’ rights, interests, contracts, or remedies under this Second Omnibus Amendment, the
Note Agreements and Collateral Documents, whether known or unknown, as applicable and therefore,
the Company for itself and each of its Consolidated Subsidiaries unconditionally releases, waives
and forever discharges (x) any and all liabilities, obligations, duties, promises or indebtedness
of any kind of any Noteholder to the Company or any of its Consolidated Subsidiaries arising on or
prior to the date hereof in connection with the Note Agreements, this Second Omnibus Amendment or
the grant of Collateral provided herein, except the obligations to be performed by such Noteholder
on or after the date hereof as expressly stated in this Second Omnibus Amendment, the Note
Agreements and Collateral Documents, as such obligations may be modified pursuant to the terms of
this Second Omnibus Amendment, the Note Agreements or the Collateral Documents, and (y) all claims,
offsets, causes of action, suits or defenses of any kind whatsoever (if any), whether arising at
law or in equity, whether known or unknown, which the Company or its Consolidated Subsidiaries
might otherwise have against any Noteholder or any of such Noteholder’s respective directors,
trustees, officers, employees or agents arising on or prior to the date hereof in connection with
the Note Agreements, this Second Omnibus Amendment or the grant of Collateral provided herein, in
either case (x) or (y), whether known or unknown, on account of any past or presently existing
condition, act, omission, event, contract, liability, obligation, indebtedness, claim, cause of
action, defense, circumstance or matter of any kind. No Noteholder shall be liable with respect
to, and the Company and each Consolidated Subsidiary hereby waives, releases and agrees not to sue
for any special, indirect or consequential damages relating to this Second Omnibus Amendment or any
Note Agreement or Collateral Document or arising out of its activities in connection herewith or
therewith (whether before, on or after the date hereof).



Section 5.4. Successors and Assigns. This Second Omnibus Amendment shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of each Noteholder and such
Noteholder’s successors and assigns, including each successive holder or holders of any Notes.



Section 5.5. Requisite Approval; Expenses.  This Second Omnibus Amendment shall be effective
as of the date first written above (the “Effective Date”) upon the satisfaction of the following
conditions precedent:



(a) the Company and the holders of at least 51% in aggregate principal amount of each of the
2003 Notes, the 2004 Notes, the 2005 Notes and the 2008 Notes shall have executed this Second
Omnibus Amendment;



(b) the Company and the requisite Banks to approve the Bank Amendment shall have executed and
delivered the Bank Amendment and such Bank Amendment shall be in all respects in form and substance
satisfactory to the Noteholders;



(c) Sutherland Asbill & Brennan LLP, counsel for the Company, shall have delivered its
favorable legal opinion regarding the enforceability of this Second Omnibus Amendment and such
other matters incident to the transactions contemplated hereby as such Noteholder or such
Noteholder’s counsel may reasonably request;



(d)  the Company shall have paid a fee to each Noteholder in an amount equal to 50.0 basis
points of the principal amount of Notes held by such Noteholder; and



(e)  the Company shall have paid the reasonable fees, expenses and disbursements of Chapman
and Cutler LLP which are reflected in statements of such counsel rendered on or prior to the date
of this Second Omnibus Amendment.



Delivery of this Second Omnibus Amendment to the Company, duly executed by the holders of at least
51% in aggregate principal amount of each of the 2003 Notes, the 2004 Notes, the 2005 Notes and the
2008 Notes outstanding under each Note Agreement, shall acknowledge satisfaction of the foregoing
conditions.



Section 5.6. Counterparts. This Second Omnibus Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original but all together only one
agreement.



Section 5.7. Governing Law. This Second Omnibus Amendment shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of the State of New
York excluding 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.



[Signature Pages Follow]




1 2008 Note Agreement only.



2 May 14 in the 2003 Note Agreement, May 15 in the 2004
Note Agreement, April 13 in the 2005 Note Agreement and June 20 in the 2008
Note Agreement.



3 November 14 in the 2003 Note Agreement, November 15 in
the 2004 Note Agreement, October 13 in the 2005 Note Agreement and December 20
in the 2008 Note Agreement.



4 November 14, 2003 in the 2003 Note Agreement, May 15,
2005 in the 2004 Note Agreement, April 13, 2006 in the 2005 Note Agreement and
December 20, 2008 in the 2008 Note Agreement.



5 2003 Note Agreement only.



6 2004 Note Agreement, 2005 Note Agreement and 2008 Note
Agreement.



7 8.45% in the 2003 Note Agreement, 8.53% in the 2004 Note
Agreement, 9.15% in the 2005 Note Agreement and 10.82% in the 2008 Note
Agreement.



8 Series A in the 2003 Note Agreement, the 2004 Note
Agreement and the 2005 Note Agreement and Series 2008-A in the 2008 Note
Agreement.



9 9.05% in the 2003 Note Agreement, 8.99% in the 2004 Note
Agreement, 9.34% in the 2005 Note Agreement and 11.14% in the 2008 Note
Agreement.



10 Series B in the 2003 Note Agreement, the 2004 Note
Agreement and the 2005 Note Agreement and Series 2008-B in the 2008 Note
Agreement.



11 2008 Note Agreement only.



12 2008 Note Agreement only.



13 2008 Note Agreement only.



14 The defined term “Anti-Terrorism Order” shall be added
only to the 2003 Note Agreement, the 2004 Note Agreement and the 2005 Note
Agreement.



15 The defined term “RIC” shall be added only to the 2003
Note Agreement, the 2004 Note Agreement and the 2005 Note Agreement.



2



IN WITNESS WHEREOF, the Company has executed this Second Omnibus
Amendment to the Note Agreements as of the day and year first above written.




	 	 	 	Allied Capital Corporation






	 	 	 	By /s/ Penni F. Roll






	 	 	Name: Penni F. Roll

Title: Chief Financial Officer




3









In Witness Whereof, the Noteholders under the Note Agreements have executed this
Second Omnibus Amendment to the Note Agreements as of the day and year first above written.




	 	 	 	American Fidelity Assurance Company (as
Noteholder under the 2005 Note Agreement)






	 	 	 	American Republic Insurance Company (as
Noteholder under the 2008 Note Agreement)






	 	 	 	Blue Cross and Blue Shield of Florida, Inc.
(as Noteholder under the 2005 Note
Agreement)






	 	 	 	The Catholic Aid Association (as
Noteholder under the 2008 Note Agreement)






	 	 	 	Catholic Knights (as Noteholder under
the 2008 Note Agreement)






	 	 	 	Cincinnati Insurance Company (as
Noteholder under the 2008 Note Agreement)






	 	 	 	Colorado Bankers Life Insurance Company
(as Noteholder under the 2005 Note
Agreement)






	 	 	 	Farm Bureau Life Insurance Company of
Michigan (as Noteholder under the 2005
Note Agreement)






	 	 	 	Fidelity Life Association (as Noteholder
under the 2008 Note Agreement)






	 	 	 	Fort Dearborn Life Insurance Company






	 	 	 	(as
Noteholder under the 2004 Note Agreement
and the 2005 Note Agreement)






	 	 	 	Great Western Insurance Company (as
Noteholder under the 2008 Note Agreement)






	 	 	 	GuideOne Mutual Insurance Company (as
Noteholder under the 2008 Note Agreement)






	 	 	 	The Lafayette Life Insurance Company (as
Noteholder under the 2008 Note Agreement)






	 	 	 	Minnesota Life Insurance Company (as
Noteholder under the 2005 Note Agreement and
the 2008 Note Agreement)






	 	 	 	Security National Life Insurance Company (as
Noteholder under the 2008 Note Agreement)





	 	 	 
	By:

	 	Advantus Capital Management, Inc.
	
 
	 	By /s/ Joseph R. Betlei
	
 
	 	 







	 	 	Name:
Joseph R. Betlei






	 	 	 	Title: Vice President




4










	 	 	 	AIG Annuity Insurance Company (as
Noteholder under the 2003 Note Agreement)






	 	 	 	The Variable Annuity Life Insurance Company
(as Noteholder under the 2003 Note
Agreement)






	 	 	 	By:
AIG Global Investment Corp., investment
adviser






By /s/ Gerald F. Herman




	 	 	Name:
Gerald F. Herman






	 	 	 	Title: Vice President






	 	 	 	Allianz Life Insurance Company of






North America (as Noteholder under
the 2005 Note Agreement)




	 	 	 	By:
Allianz of America, Inc., as the
	 
	 	 	 	authorized signatory, investment manager, of
which, the security should be registered
under the Nominee Name (MAC & CO)






	 	 	 	By /s/ Gary Brown






	 	 	Name: Gary Brown

Title: Assistant Treasurer




5










	 	 	 	American Equity Investment Life Insurance
Company (as Noteholder under the 2004
Note Agreement and the 2005 Note Agreement)






	 	 	 	By /s/ Rachel Stauffer






	 	 	Name: Rachel Stauffer

Title: Vice President Investments






	 	 	 	American Equity Investment Life Insurance
Company of New York (as Noteholder
under the 2004 Note Agreement)






	 	 	 	By
/s/ Rachel Stauffer






	 	 	Name: Rachel Stauffer

Title: Vice President Investments






	 	 	 	American Family Life Insurance Company
(as Noteholder under the 2004 Note
Agreement)






	 	 	 	By
/s/ Phillip Hannifan






	 	 	Name: Phillip Hannifan

Title: Investment Director






	 	 	 	American Family Life Assurance Company of
Columbus (as Noteholder under the 2005
Note Agreement)






	 	 	 	By
/s/ Jerry Jeffery






	 	 	Name: Jerry Jeffery

Title: Senior Vice President, CIO






	 	 	 	Beneficial Life Insurance Company (as
Noteholder under the 2005 Note Agreement)






	 	 	 	By
/s/ Thomas Kirby Brown, Jr., CFA






	 	 	Name: Thomas Kirby Brown, Jr., CFA

Title: Senior Managing Director

& Chief Investment Officer






	 	 	 	California National Bank (as Noteholder
under the 2005 Note Agreement)






	 	 	 	By
/s/ Lisa Alexander






	 	 	Name: Lisa Alexander

Title: Senior Vice President/Treasurer






	 	 	 	Connecticut General Life Insurance Company
(as Noteholder under the 2003 Note
Agreement and the 2004 Note Agreement)






	 	 	 	By:
Cigna Investments, Inc.
(authorized agent)






By /s/ Deborah B. Wiacek




	 	 	Name:
Deborah B. Wiacek






	 	 	 	Title: Senior Managing Director






	 	 	 	Life Insurance Company of North America
(as Noteholder under the 2004 Note
Agreement)






	 	 	 	By:
CIGNA Investments, Inc. (authorized agent)






By /s/ Deborah B. Wiacek




	 	 	Name:
Deborah B. Wiacek






	 	 	 	Title: Senior Managing Director




6










	 	 	 	CUNA Mutual Insurance Society (as
Noteholder under the 2008 Note Agreement)






	 	 	 	By:
MEMBERS Capital Advisors, Inc.,






acting as Investment Advisor




By /s/ Allen R. Cantrell




	 	 	Name:
Allen R. Cantrell






	 	 	 	Title: Director, Private Placements






	 	 	 	Denver Investment Advisors LLC (as
	 
	 	 	 	Noteholder under the 2005 Note Agreement)






	 	 	 	By
/s/ Gregory M. Shea






	 	 	Name: Gregory M. Shea

Title: Vice President






	 	 	 	EMC National Life Company (as Noteholder
under the 2005 Note Agreement)






	 	 	 	By
/s/ Jeffrey S. Birdsley






	 	 	Name: Jeffrey S. Birdsley

Title: Assistant Vice President






	 	 	 	Federated Life Insurance Company (as
Noteholder under the 2003 Note Agreement)






	 	 	 	By
/s/ Mark A. Hood






	 	 	Name: Mark A. Hood

Title: Vice President






	 	 	 	Genworth Life Insurance Company






	 	 	 	(f/k/a General Electric Capital Assurance
Company) (as Noteholder under the 2004 Note
Agreement and the 2005 Note Agreement)






	 	 	 	By
/s/ John R. Endres






	 	 	Name: John R. Endres

Title: Investment Officer




7










	 	 	 	The Guardian Life Insurance Company of
America (as Noteholder under the 2004
Note Agreement)






	 	 	 	By
/s/ Ellen I. Whittaker






	 	 	Name: Ellen I. Whittaker

Title: Senior Director, Private Placements






	 	 	 	The Guardian Insurance & Annuity Company,
Inc. (as Noteholder under the 2004 Note
Agreement)






	 	 	 	By
/s/ Ellen I. Whittaker






	 	 	Name: Ellen I. Whittaker

Title: Senior Director, Private Placements






	 	 	 	ING USA Annuity and Life Insurance Company
(as Noteholder under the 2008 Note
Agreement)






	 	 	 	ING Life Insurance and Annuity Company
(as Noteholder under the 2008 Note
Agreement)






	 	 	 	ReliaStar Life Insurance Company (as
Noteholder under the 2008 Note Agreement)






	 	 	 	Security Life of Denver Insurance Company
(as Noteholder under the 2008 Note
Agreement)






	 	 	 	By:
ING Investment Management LLC, as Agent






	 	 	 	By
/s/ Paul Aronson






	 	 	Name: Paul Aronson

Title: Vice President




8










	 	 	 	John Hancock Life Insurance Company (as
Noteholder under the 2003 Note Agreement and
2004 Note Agreement)






	 	 	 	By
/s/ Anthony J. Della Piana






	 	 	Name: Anthony J. Della Piana

Title: Senior Managing Director






	 	 	 	John Hancock Variable Life Insurance Company
(as Noteholder under the 2003 Note
Agreement and 2004 Note Agreement)






	 	 	 	By
/s/ Anthony J. Della Piana






	 	 	Name: Anthony J. Della Piana

Title: Authorized Signatory






	 	 	 	John Hancock Life & Health Insurance Company
(f/k/a Manulife Insurance Company) (as
Noteholder under the 2003 Note Agreement)






	 	 	 	By
/s/ Anthony J. Della Piana






	 	 	Name: Anthony J. Della Piana

Title: Authorized Signatory






	 	 	 	John Hancock Life Insurance Company (U.S.A.)
(f/k/a The Manufacturers Life Insurance
Company (U.S.A.)) (as Noteholder under the
2004 Note Agreement)






	 	 	 	By
/s/ Anthony J. Della Piana






	 	 	Name: Anthony J. Della Piana

Title: Authorized Signatory




9










	 	 	 	Signature 7 L.P. (as Noteholder under
the 2004 Note Agreement)






	 	 	 	By:
Hancock Capital Investment Management, LLC,
as Portfolio Advisor






By /s/ Anthony J. Della Piana

Name: Anthony J. Della Piana

Title: Senior Managing Director





	 	 	 	Signature 6 Limited (as Noteholder under
	 
	 	 	 	the 2004 Note Agreement)






	 	 	 	By:
Hancock Capital Investment Management, LLC,
as Portfolio Advisor






By /s/ Anthony J. Della Piana

Name: Anthony J. Della Piana

Title: Senior Managing Director





	 	 	 	JPMorgan Chase Bank N.A., not
	 
	 	 	 	individually but solely in its capacity as
Directed Trustee of the SBC Master Pension
Trust






	 	 	 	By
/s/ Amy L. Schneeberger






	 	 	Name: Amy L. Schneeberger

Title: Vice President




10










	 	 	 	Metropolitan Life Insurance Company (as
Noteholder under the 2004 Note Agreement)






	 	 	 	MetLife Insurance Company of Connecticut,






	 	 	 	by
Metropolitan Life Insurance Company,






	 	 	 	its
Investment Manager






	 	 	 	By
/s/ Judith A. Gulotta






	 	 	Name: Judith A. Gulotta

Title: Managing Director






(executed by Metropolitan Life Insurance Company
(i) as to itself as a Purchaser and (ii) as
investment manager to MetLife Insurance Company
of Connecticut as a Purchaser)




	 	 	 	Midland National Life Insurance






Company (as Noteholder under the 2005
Note Agreement)




	 	 	 	By:
Guggenheim Partners Advisory Company,






its Agent




	 	 	 	By
/s/ Kaitlin Trinh






	 	 	Name: Kaitlin Trinh

Title: Director






	 	 	 	North American Company for Life






and Health Insurance (as Noteholder
under the 2005 Note Agreement)




	 	 	 	By:
Guggenheim Partners Advisory Company,






its Agent




	 	 	 	By
/s/ Kaitlin Trinh






	 	 	Name: Kaitlin Trinh

Title: Director




11










	 	 	 	National Benefit Life Insurance Company
(as Noteholder under the 2004 Note
Agreement)






	 	 	 	By:
Conning Asset Management Company, as






Investment Manager




By /s/ John H. DeMallie




	 	 	Name:
John H. DeMallie






	 	 	 	Title: Director






	 	 	 	Primerica Life Insurance Company (as
Noteholder under the 2004 Note Agreement)






	 	 	 	By:
Conning Asset Management Company, as






Investment Manager




By /s/ John H. DeMallie




	 	 	Name:
John H. DeMallie






	 	 	 	Title: Director






	 	 	 	Reassure America Life Insurance Company
(as Noteholder under the 2003 Note
Agreement)






	 	 	 	By:
Conning Asset Management Company, as






Investment Manager




By /s/ John H. DeMallie




	 	 	Name:
John H. DeMallie






	 	 	 	Title: Director






	 	 	 	Swiss Re Life & Health America, Inc. (as
	 
	 	 	 	Noteholder under the 2003 Note Agreement)






	 	 	 	By:
Conning Asset Management Company, as






Investment Manager




By /s/ John H. DeMallie




	 	 	Name:
John H. DeMallie






	 	 	 	Title: Director




12










	 	 	 	Nationwide Life and Annuity Insurance Company
(as Noteholder under the 2004 Note
Agreement and the 2005 Note Agreement)






	 	 	 	Nationwide Life Insurance Company (as
Noteholder under the 2004 Note Agreement and
the 2005 Note Agreement)






	 	 	 	Nationwide Life Insurance Company of America
(as Noteholder under the 2004 Note
Agreement)






	 	 	 	Nationwide Multiple Maturity Separate Account
(as Noteholder under the 2005 Note
Agreement)






	 	 	 	Nationwide Mutual Insurance Company (as
Noteholder under the 2004 Note Agreement)






	 	 	 	By
/s/ Thomas A. Gleason






	 	 	Name: Thomas A. Gleason

Title: Authorized Signatory






	 	 	 	New York Life Insurance Company






	 	 	 	(as
Noteholder under the 2003 Note Agreement,
the 2004 Note Agreement and the 2005 Note
Agreement)






	 	 	 	By
/s/ A. Post Howland






	 	 	Name: A. Post Howland

Title: Corporate Vice President






	 	 	 	New York Life Insurance and Annuity
Corporation (as Noteholder under the
	 
	 	2003	 	Note Agreement, the 2004 Note Agreement
and the 2005 Note Agreement)






	 	 	 	By
New York Life Investment Management LLC,
its Investment Manager





	 	 	 
	By

	 	/s/ A. Post Howland
	
 
	 	 
	
 
	 	Name: A. Post Howland

Title: Director






13





	 	 	New York Life Insurance and Annuity
Corporation Institutionally Owned






Life Insurance Separate Account


(BOLI 3) (as Noteholder under the
2003 Note Agreement and the 2005 Note
Agreement)




	 	 	 	By
New York Life Investment Management LLC,
its Investment Manager





	 	 	 
	By

	 	/s/ A. Post Howland
	
 
	 	 
	
 
	 	Name: A. Post Howland

Title: Director







	 	 	New York Life Insurance and Annuity
Corporation Institutionally Owned Life
Insurance Separate Account






(BOLI 3-2) (as Noteholder under the
2005 Note Agreement)




	 	 	 	By
New York Life Investment Management LLC,
its Investment Manager





	 	 	 
	By

	 	/s/ A. Post Howland
	
 
	 	 
	
 
	 	Name: A. Post Howland

Title: Director







	 	 	The Northwestern Mutual Life Insurance
Company (as Noteholder under the 2004
Note Agreement, the 2005 Note Agreement and
the 2008 Note Agreement)






	 	 	 	By
/s/ Richard A. Strait






	 	 	Name: Richard A. Strait






Its Authorized Representative



14




	 	 	 	The Ohio Casualty Insurance Company (as
Noteholder under the 2004 Note Agreement and
the 2005 Note Agreement)






	 	 	 	By
/s/ Robert Blauvelt






	 	 	Name: Robert Blauvelt

Title: Vice President — Fixed Income






	 	 	 	Ohio National Life Assurance Corporation






	 	 	 	(as
Noteholder under the 2005 Note Agreement
and the 2008 Note Agreement)






	 	 	 	By
/s/ Jed R. Martin






	 	 	Name: Jed R. Martin

Title: Vice President, Private Placements






	 	 	 	The Ohio National Life Insurance Company






	 	 	 	(as
Noteholder under the 2004 Note Agreement
and the 2005 Note Agreement)






	 	 	 	By
/s/ Jed R. Martin






	 	 	Name: Jed R. Martin

Title: Vice President, Private Placements






	 	 	 	Pacific Life Insurance Company






	 	 	 	By
/s/ Diane W. Dales






	 	 	Name: Diane W. Dales

Title: Assistant Vice President






	 	 	 	By
/s/ Cathy Schwartz






	 	 	Name: Cathy Schwartz

Title: Assistant Secretary




15










	 	 	 	Park National Bank (as Noteholder under
the 2005 Note Agreement)






	 	 	 	By
/s/ John Kratkoczki






	 	 	Name: John Kratkoczki

Title: Vice President / Controller






	 	 	 	Phoenix Life Insurance Company (as
Noteholder under the 2005 Note Agreement)






	 	 	 	By
/s/ John H. Beers






	 	 	Name: John H. Beers

Title: Vice President






	 	 	 	PHL Variable Insurance Company (as
Noteholder under the 2005 Note Agreement)






	 	 	 	By
/s/ John H. Beers






	 	 	Name: John H. Beers

Title: Vice President






	 	 	 	Protective Life Insurance Company (as
Noteholder under the 2004 Note Agreement)






	 	 	 	By
/s/ Diane S. Griswold






	 	 	Name: Diane S. Griswold

Title: Second Vice President




16










	 	 	 	Prudential Retirement Insurance and Annuity
Company (as Noteholder under the 2004
Note Agreement)






	 	 	 	By:
Prudential Investment Management, Inc.






By /s/ Stephen J. Collins




	 	 	Name:
Stephen J. Collins






	 	 	 	Title: Vice President






	 	 	 	Employees’ Retirement System of Alabama
(as Noteholder under the 2005 Note
Agreement)






	 	 	 	By
/s/ Julie Barranco






	 	 	Name: Julie Barranco

Title: Director of Fixed Income






	 	 	 	Judicial Retirement Fund (as Noteholder
under the 2005 Note Agreement)






	 	 	 	By
/s/ Julie Barranco






	 	 	Name: Julie Barranco

Title: Director of Fixed Income






	 	 	 	PEIRAF – Deferred Compensation Plan (as
Noteholder under the 2005 Note Agreement)






	 	 	 	By
/s/ Julie Barranco






	 	 	Name: Julie Barranco

Title: Director of Fixed Income






	 	 	 	Teachers’ Retirement System of Alabama
(as Noteholder under the 2005 Note
Agreement)






	 	 	 	By
/s/ Julie Barranco






	 	 	Name: Julie Barranco

Title: Director of Fixed Income




17










	 	 	 	San Diego National Bank (as Noteholder
	 
	 	 	 	under the 2005 Note Agreement)






	 	 	 	By
/s/ Eric W. Larson






	 	 	Name: Eric W. Larson

Title: Senior Vice President/Chief

Financial Officer






	 	 	 	Sun Life Assurance Company of Canada (as
Noteholder under the 2004 Note Agreement and
the 2008 Note Agreement)






	 	 	 	By
/s/ Paul Sinclair






	 	 	Name: Paul Sinclair

Title: Managing Director






Head of Private Fixed Debt




Private Fixed Income




	 	 	 	By
/s/ Kevin Phelan






	 	 	Name: Kevin Phelan

Title: Managing Director






Private Fixed Income



18




	 	 	 	Sun Life Assurance Company of Canada (U.S.)
(as Noteholder under the 2008 Note
Agreement)






	 	 	 	By
/s/ Deborah J. Foss






	 	 	Name: Deborah J. Foss

Title: Managing Director, Head of Private Debt,






Private Fixed Income




	 	 	 	By
/s/ Ann C. King






	 	 	Name: Ann C. King

Title: Assistant Vice President and

Senior Counsel

Sun Life Insurance and Annuity Company of New
York (as Noteholder under the 2008 Note
Agreement)






	 	 	 	By
/s/ Deborah J. Foss






	 	 	Name: Deborah J. Foss

Title: Authorized Signer






	 	 	 	By
/s/ Ann C. King






	 	 	Name: Ann C. King

Title: Authorized Signer






	 	 	 	Sun Life Assurance Company of Canada (as
Noteholder under the 2003 Note Agreement and
the 2008 Note Agreement)






	 	 	 	By
/s/ Deborah J. Foss






	 	 	Name: Deborah J. Foss

Title: Managing Director, Head of Private Debt,






Private Fixed Income




	 	 	 	By
/s/ Ann C. King






	 	 	Name: Ann C. King

Title: Senior Counsel






	 	 	 	Sun Life Hong Kong Limited






	 	 	 	By:
Sun Capital Advisers LLC, its Investment






Advisor (as Noteholder under the 2003


Note Agreement)




	 	 	 	By
/s/ Deborah J. Foss






	 	 	Name: Deborah J. Foss

Title: Managing Director, Head of Private Debt,






Private Fixed Income




	 	 	 	By
/s/ Ann C. King






	 	 	Name: Ann C. King

Title: Senior Counsel

Teachers Insurance and Annuity Association of
America (as Noteholder under the 2003
Note Agreement, the 2004 Note Agreement, the
2005 Note Agreement and the 2008 Note
Agreement)






	 	 	 	By
/s/ Brian K. Roelke






	 	 	Name: Brian K. Roelke

Title: Director






	 	 	 	TIAA-CREF Life Insurance Company (as
Noteholder under the 2004 Note Agreement)






	 	 	 	By:
Teachers Insurance and Annuity Association
of America, as Investment Manager






By /s/ Brian K. Roelke




	 	 	Name:
Brian K. Roelke






	 	 	 	Title: Director




19










	 	 	 	United Life Insurance Company (as Noteholder
under the 2005 Note Agreement)






	 	 	 	By
/s/ Chad A. Guenther






	 	 	Name: Chad A. Guenther

Title: Analyst






	 	 	 	Woodmen of the World Life Insurance Society
(as Noteholder under the 2005 Note
Agreement)






	 	 	 	By
/s/ James J. Stolze






	 	 	Name: James J. Stolze

Title: Assistant Vice President





20




Noteholders Under the 2003 Note Agreement




NOTEHOLDERS UNDER THE 2003 NOTE
AGREEMENT            Series               Principal Amount



	 	 	 	 	 	 	 	 	 
	AIG Annuity Insurance Company (AIG Annuity
Insurance Company (260638))
	 	 	B	 	 	$	25,000,000	 
	AIG Annuity Insurance Company (AIG Annuity
Reinsurance — Wachovia (260731))
	 	 	B	 	 	$	15,000,000	 
	The Variable Annuity Life Insurance Company
	 	 	B	 	 	$	10,000,000	 
	Allstate Life Insurance Company
	 	 	B	 	 	$	10,000,000	 
	Allstate Life Insurance Company of New York
	 	 	B	 	 	$	5,000,000	 
	Connecticut General Life Insurance Company
	 	 	B	 	 	$	11,500,000	 
	Federated Life Insurance Company
	 	 	B	 	 	$	2,000,000	 
	Swiss Re Life and Health America, Inc.
	 	 	B	 	 	$	10,000,000	 
	Reassure America Life Insurance Company
	 	 	B	 	 	$	5,000,000	 
	John Hancock Life Insurance Company
	 	 	B	 	 	$	17,250,000	 
	John Hancock Variable Life Insurance Company
	 	 	B	 	 	$	2,500,000	 
	John Hancock Life & Health Insurance Company
(f/k/a Manulife Insurance Company)
	 	 	B	 	 	$	250,000	 
	New York Life Insurance Company
	 	 	B	 	 	$	9,500,000	 
	New York Life Insurance and Annuity Corporation
Institutionally Owned Life Insurance Separate
Account
	 	 	B	 	 	$	1,500,000	 
	New York Life Insurance and Annuity Corporation
	 	 	B	 	 	$	2,500,000	 
	Sun Life Assurance Company of Canada
	 	 	B	 	 	$	9,000,000	 
	Sun Life Hong Kong Limited
	 	 	B	 	 	$	1,000,000	 
	Teachers Insurance and Annuity Association of
America
	 	 	B	 	 	$	10,000,000	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total	 	$	147,000,000	 






21




Noteholders Under the 2004 Note Agreement




NOTEHOLDERS UNDER THE 2004 NOTE
AGREEMENT        SERIES                 PRINCIPAL AMOUNT



	 	 	 	 	 	 	 	 	 
	American Family Life Insurance Company
	 		A		 		$7,500,000	
	Genworth Life Insurance Company
(f/k/a General Electric Capital Assurance
Company)
	 		A		 		$10,000,000	
	John Hancock Life Insurance Company
	 		A		 		$12,000,000	
	John Hancock Variable Life Insurance
 Company
	 		A		 		$2,500,000	
	John Hancock Life Insurance Company (U.S.A.)
(f/k/a The Manufacturers Life Insurance Company
(U.S.A.))
	 		A		 		$11,000,000	
	JPMorgan Chase Bank, not individually but
solely in its capacity as Directed Trustee of the
commingled assets of the Long Term Investment Trust
(f/k/a AT&T Master Pension Trust) and the SBC Master
Pension Trust
	 		A		 		$1,000,000	
	Signature 7 L.P.
	 		A		 		$2,500,000	
	Signature 6 Limited
	 		A		 		$2,000,000	
	Metropolitan Life Insurance Company
	 		A		 		$106,900,000	
	National Benefit Life Insurance Company
	 		A		 		$1,900,000	
	Nationwide Life and Annuity Insurance
 Company
	 		A		 		$6,000,000	
	Nationwide Mutual Insurance Company
	 		A		 		$4,000,000	
	Nationwide Life Insurance Company
	 		A		 		$3,000,000	
	Nationwide Life Insurance Company
 of America
	 		A		 		$2,000,000	
	New York Life Insurance and Annuity
 Corporation
	 		A		 		$9,500,000	
	New York Life Insurance Company
	 		A		 		$500,000	
	The Ohio Casualty Insurance Company
	 		A		 		$3,000,000	
	Pacific Life Insurance Company (Mac & Co,
as nominee)
	 		A		 		$20,000,000	
	Primerica Life Insurance Company
	 		A		 		$6,200,000	
	Protective Life Insurance Company
(Hare & Co., as nominee)
	 		A		 		$10,000,000	
	Sun Life Assurance Company of Canada
	 		A		 		$15,000,000	
	Teachers Insurance and Annuity Association
 of America
	 		A		 		$13,000,000	
	TIAA-CREF Life Insurance Company
	 		A		 		$3,000,000	
	 
	 	 	 	 	 	 	 	 
	 
	 	Total	 		$252,500,000	






22




NOTEHOLDERS UNDER THE 2004 NOTE
AGREEMENT        SERIES                 PRINCIPAL AMOUNT



	 	 	 	 	 	 	 	 	 
	American Equity Investment Life Insurance
 Company (Chimefish & Co, as nominee)
	 		B		 		$11,500,000	
	American Equity Investment Life Insurance
 Company of New York (Chimefish & Co,
as nominee)
	 		B		 		$1,000,000	
	Connecticut General Life Insurance Company
	 		B		 		$13,500,000	
	Life Insurance Company of North America
	 		B		 		$3,400,000	
	Fort Dearborn Life Insurance Company
	 		B		 		$2,000,000	
	The Guardian Life Insurance Company of
 America
	 		B		 		$21,000,000	
	The Guardian Insurance & Annuity
 Company, Inc.
	 		B		 		$2,000,000	
	The Northwestern Mutual Life Insurance
 Company
	 		B		 		$10,000,000	
	The Ohio National Life Insurance Company
	 		B		 		$5,000,000	
	Prudential Retirement Insurance and Annuity
 Company
	 		B		 		$3,100,000	
	 
	 	 	 	 	 	 	 	 
	 
	 	Total	 		$72,500,000	






23




Noteholders Under the 2005 Note Agreement




NOTEHOLDERS UNDER THE 2005 NOTE
AGREEMENT                 SERIES        PRINCIPAL AMOUNT



	 	 	 	 	 	 	 	 	 
	American Fidelity Assurance Company
	 		A		 		$2,000,000	
	Blue Cross and Blue Shield of Florida, Inc.
	 		A		 		$1,000,000	
	Colorado Bankers Life Insurance Company
	 		A		 		$500,000	
	Fort Dearborn Life Insurance Company
	 		A		 		$2,000,000	
	Minnesota Life Insurance Company
	 		A		 		$5,000,000	
	Allstate Life Insurance Company
	 		A		 	$	20,000,000	
	Allstate Life Insurance Company of
 New York
	 		A		 	$	5,000,000	
	American Equity Investment Life Insurance
Company (Chimefish & Co, as nominee)
	 		A		 		$6,500,000	
	Beneficial Life Insurance Company
	 		A		 		$3,000,000	
	EMC National Life Company
	 		A		 		$4,000,000	
	Employees’ Retirement System of Alabama
	 		A		 		$5,750,000	
	Judicial Retirement Fund
	 		A		 		$1,000,000	
	PEIRAF – Deferred Compensation Plan
	 		A		 		$2,000,000	
	Teachers’ Retirement System of Alabama
	 		A		 		$16,250,000	
	Genworth Life Insurance Company (f/k/a
 General Electric Capital Assurance
 Company)
	 		A		 		$10,000,000	
	Midland National Life Insurance Company
	 		A		 		$10,000,000	
	North American Company for Life and
 Health Insurance
	 		A		 		$5,000,000	
	Nationwide Life Insurance Company
	 		A		 		$11,000,000	
	Nationwide Life and Annuity Insurance
 Company
	 		A		 		$6,000,000	
	Nationwide Multiple Maturity Separate
 Account
	 		A		 		$3,000,000	
	The Northwestern Mutual Life Insurance
 Company
	 		A		 		$35,000,000	






24




	 	 	 	 	 	 	 	 	 
	The Ohio Casualty Insurance Company
	 	 	A	 	 	 	$7,000,000	 
	California National Bank
	 	 	A	 	 	 	$15,000,000	 
	Park National Bank
	 	 	A	 	 	 	$25,000,000	 
	San Diego National Bank
	 	 	A	 	 	 	$10,000,000	 
	Phoenix Life Insurance Company
	 	 	A	 	 	 	$8,000,000	 
	PHL Variable Insurance Company
	 	 	A	 	 	 	$4,000,000	 
	Teachers Insurance and Annuity
Association of America
	 	 	A	 	 	 	$15,000,000	 
	The Travelers Indemnity Company
	 	 	A	 	 	 	$5,000,000	 
	United Life Insurance Company
	 	 	A	 	 	 	$3,000,000	 
	Woodmen of the World Life Insurance
 Society
	 	 	A	 	 	 	$15,000,000	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total	 	 	$261,000,000	 






25




NOTEHOLDERS UNDER THE 2005 NOTE
AGREEMENT           SERIES              PRINCIPAL AMOUNT



	 	 	 	 	 	 	 	 	 
	Allianz Life Insurance Company of
 North America
	 		B		 		$25,000,000	
	Farm Bureau Life Insurance Company of
 Michigan
	 		B		 		$4,000,000	
	American Family Life Assurance Company of
Columbus
	 		B		 		$10,000,000	
	Denver Investment Advisors LLC
	 		B		 		$5,000,000	
	New York Life Insurance Company
	 		B		 		$9,500,000	
	New York Life Insurance and Annuity
 Corporation
	 		B		 		$5,000,000	
	New York Life Insurance and Annuity
 Corporation Institutionally Owned Life
 Insurance Separate Account
	 		B		 		$500,000	
	The Northwestern Mutual Life Insurance
 Company
	 		B		 		$25,000,000	
	Ohio National Life Assurance Corporation
	 		B		 		$1,000,000	
	The Ohio National Life Insurance Company
	 		B		 		$4,000,000	
	 
	 	 	 	 	 	 	 	 
	 
	 	Total	 		$89,000,000	






26




Noteholders Under the 2008 Note Agreement




NOTEHOLDERS UNDER THE 2008 NOTE
AGREEMENT           SERIES            PRINCIPAL AMOUNT



	 	 	 	 	 	 	 	 	 
	ING USA Annuity and Life Insurance Company
	 		A		 	$	29,000,000	
	ING Life Insurance and Annuity Company
	 		A		 	$	21,000,000	
	ReliaStar Life Insurance Company
	 		A		 	$	16,000,000	
	Security Life of Denver Insurance Company
	 		A		 	$	9,000,000	
	Sun Life Assurance Company of Canada
	 		A		 	$	10,000,000	
	Sun Life Assurance Company of Canada (U.S.)
	 		A		 	$	6,000,000	
	Sun Life Insurance and Annuity Company of
 New York
	 		A		 	$	4,000,000	
	Teachers Insurance and Annuity Association of
 America
	 		A		 	$	15,000,000	
	Minnesota Life Insurance Company
	 		A		 	$	5,000,000	
	Cincinnati Insurance Company
	 		A		 	$	4,000,000	
	American Republic Insurance Company
	 		A		 	$	2,000,000	
	The Lafayette Life Insurance Company
	 		A		 	$	2,000,000	
	Great Western Insurance Company
	 		A		 	$	1,500,000	
	Catholic Knights
	 		A		 	$	1,000,000	
	Fidelity Life Association
	 		A		 	$	1,000,000	
	GuideOne Mutual Insurance Company
	 		A		 	$	1,000,000	
	Security National Life Insurance Company
	 		A		 	$	500,000	
	The Catholic Aid Association
	 		A		 	$	500,000	
	CUNA Mutual Insurance Society
	 		A		 	$	10,000,000	
	Ohio National Life Assurance Corporation
	 		A		 	$	2,000,000	
	 
	 	 	 	 	 	 	 	 
	 
	 	Total	 	$	140,500,000	






27




  NOTEHOLDERS UNDER THE 2008 NOTE
AGREEMENT       SERIES              PRINCIPAL AMOUNT



	 	 	 	 	 	 	 	 	 
	Sun Life Assurance Company of Canada
	 		B		 	$	14,000,000	
	Sun Life Insurance and Annuity Company of
 New York
	 		B		 	$	1,000,000	
	The Northwestern Mutual Life Insurance
 Company
	 		B		 	$	27,500,000	
	Teachers Insurance and Annuity Association of
 America
	 		B		 	$	10,000,000	
	 
	 	 	 	 	 	 	 	 
	 
	 	Total	 	$	52,500,000	






28




Allied Capital Corporation

7.05% Senior Secured Note, Series B

Due May 14, 2010




	 	 	 
	No. RB-

$[     ]

	 	[Date]

PPN      






Allied Capital Corporation, a Maryland corporation (the “Company”), for
value received, hereby promises to pay to      or registered assigns on the [     ]
day of May, 2010 the principal amount of      Dollars ($     ) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on the principal amount
from time to time remaining unpaid hereon at the rate of 7.05% per annum from the date hereof until
maturity, payable semiannually on the 14th day of each May and November in each year (commencing on
the first of such dates after the date hereof) and at maturity. The Company agrees to pay interest
on overdue principal (including any overdue required or optional prepayment of principal) and
premium, if any, and (to the extent legally enforceable) on any overdue installment of interest,
and, during the continuance of any other Event of Default, on the unpaid balance thereof, at the
rate of 9.05% per annum after the due date, whether by acceleration or otherwise, until paid. Both
the principal hereof and interest hereon are payable at the principal office of the Company in
Washington, D.C. in coin or currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts.



This Note is one of the 7.05% Senior Secured Notes, Series B due May 14, 2010 (the “Series B
Notes”) of the Company in the aggregate principal amount of $147,000,000 issued or to be issued
together with the $153,000,000 aggregate principal amount of 5.45% Senior Notes, Series A, due
May 14, 2008 (the “Series A Notes” and, together with the Series B Notes, the “Notes”) of the
Company under and pursuant to the terms and provisions of the Note Agreement, dated as of May 14,
2003, as amended by that certain First Amendment to Note Agreement dated as of February 29, 2008,
that certain First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008
and that certain Second Omnibus Amendment to the Note Agreements dated as of December 30, 2008 (as
amended, the “Note Agreement”), entered into by the Company with the Purchasers named therein and
this Note and the holder hereof are entitled with the holders of all other Notes outstanding under
the Note Agreement to all the benefits provided for thereby or referred to therein to the extent
provided in the Note Agreement. Reference is hereby made to the Note Agreement for a statement of
such rights and benefits.



This Series B Note and the other Series B Notes outstanding under the Note Agreement may be
declared due prior to their expressed maturity dates in the events, on the terms and in the manner
and amounts as provided in the Note Agreement.



The Series B Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and in the amounts and
with the premium, if any, set forth in the Note Agreement.



This Series B Note is registered on the books of the Company and is transferable only by
surrender thereof at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Series B Note or its attorney
duly authorized in writing. Payment of or on account of principal, premium, if any, and interest
on this Series B Note shall be made only to or upon the order in writing of the registered holder.




	 	 	 	Allied Capital Corporation






	 	 	 	By






Name:




	 	 	 	Title:





29




Allied Capital Corporation

6.53% Senior Secured Note, Series A

Due November 15, 2009




	 	 	 
	No. RA-

$[     ]

	 	[Date]

PPN      






Allied Capital Corporation, a Maryland corporation (the “Company”), for
value received, hereby promises to pay to [     ] or registered assigns on the
15th day of November, 2009 the principal amount of [     ] Dollars
($     ) and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the rate of 6.53% per
annum from the date hereof until maturity, payable semiannually on the 15th day of each November
and May in each year (commencing on the first of such dates after the date hereof) and at maturity.
The Company agrees to pay interest on overdue principal (including any overdue required or
optional prepayment of principal) and Premium, if any, and (to the extent legally enforceable) on
any overdue installment of interest, and, during the continuance of any other Event of Default, on
the unpaid balance thereof, at the rate of 8.53% per annum after the due date, whether by
acceleration or otherwise, until paid. Both the principal hereof and interest hereon, any
Make-Whole Amount and any Modified Make-Whole Amount with respect to this Note are payable at the
principal office of the Company in Washington, D.C. in coin or currency of the United States of
America which at the time of payment shall be legal tender for the payment of public and private
debts.



This Note is one of the 6.53% Senior Secured Notes, Series A due November 15, 2009 (the
“Series A Notes”) of the Company in the aggregate principal amount of $252,500,000 issued
or to be issued together with the $72,500,000 aggregate principal amount of 6.99% Senior
Secured Notes, Series B, due November 15, 2011 (the “Series B Notes” and, together with the Series
A Notes, the “Notes”) of the Company, under and pursuant to the terms and provisions of the Note
Agreement, dated as of November 15, 2004, as amended by that certain First Amendment to Note
Agreement dated as of February 29, 2008, that certain First Omnibus Waiver and Amendment to the
Note Agreements dated as of July 25, 2008 and that certain Second Omnibus Amendment to the Note
Agreements dated as of December 30, 2008 (as amended, the “Note Agreement”), entered into by the
Company with the Purchasers named therein and this Note and the holder hereof are entitled with the
holders of all other Notes outstanding under the Note Agreement to all the benefits provided for
thereby or referred to therein to the extent provided in the Note Agreement. Reference is hereby
made to the Note Agreement for a statement of such rights and benefits.



This Series A Note and the other Series A Notes outstanding under the Note Agreement may be
declared due prior to their expressed maturity dates in the events, on the terms and in the manner
and amounts as provided in the Note Agreement.



The Series A Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and in the amounts and
with the Premium, if any, set forth in the Note Agreement.



This Series A Note is registered on the books of the Company and is transferable only by
surrender thereof at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Series A Note or its attorney
duly authorized in writing. Payment of or on account of principal, Premium, if any, and interest
on this Series A Note shall be made only to or upon the order in writing of the registered holder.



This Series A Note shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York excluding 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.




	 	 	 	Allied Capital Corporation






	 	 	 	By






Name:




	 	 	 	Title:





30




Allied Capital Corporation

6.99% Senior Secured Note, Series B

Due November 15, 2011




	 	 	 
	No. RB-

$[     ]

	 	[Date]

PPN      






Allied Capital Corporation, a Maryland corporation (the “Company”), for
value received, hereby promises to pay to [     ] or registered assigns on the 15th day
of November, 2011 the principal amount of [     ] Dollars ($     ) and to
pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the principal
amount from time to time remaining unpaid hereon at the rate of 6.99% per annum from the date
hereof until maturity, payable semiannually on the 15th day of each May and November in each year
(commencing on the first of such dates after the date hereof) and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue required or optional prepayment of
principal) and Premium, if any, and (to the extent legally enforceable) on any overdue installment
of interest, and, during the continuance of any other Event of Default, on the unpaid balance
thereof, at the rate of 8.99% per annum after the due date, whether by acceleration or otherwise,
until paid. Both the principal hereof and interest hereon, and any Make-Whole Amount with respect
to this Note are payable at the principal office of the Company in Washington, D.C. in coin or
currency of the United States of America which at the time of payment shall be legal tender for the
payment of public and private debts.



This Note is one of the 6.99% Senior Secured Notes, Series B due November 15, 2011 (the
“Series B Notes”) of the Company in the aggregate principal amount of $72,500,000 issued
or to be issued together with the $252,500,000 aggregate principal amount of 6.53% Senior
Secured Notes, Series A, due November 15, 2009 (the “Series A Notes” and, together with the Series
B Notes, the “Notes”) of the Company under and pursuant to the terms and provisions of the Note
Agreement, dated as of November 15, 2004, as amended by that certain First Amendment to Note
Agreement dated as of February 29, 2008, that certain First Omnibus Waiver and Amendment to the
Note Agreements dated as of July 25, 2008 and that certain Second Omnibus Amendment to the Note
Agreements dated as of December 30, 2008 (as amended, the “Note Agreement”), entered into by the
Company with the Purchasers named therein and this Note and the holder hereof are entitled with the
holders of all other Notes outstanding under the Note Agreement to all the benefits provided for
thereby or referred to therein to the extent provided in the Note Agreement. Reference is hereby
made to the Note Agreement for a statement of such rights and benefits.



This Series B Note and the other Series B Notes outstanding under the Note Agreement may be
declared due prior to their expressed maturity dates in the events, on the terms and in the manner
and amounts as provided in the Note Agreement.



The Series B Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and in the amounts and
with the Premium, if any, set forth in the Note Agreement.



This Series B Note is registered on the books of the Company and is transferable only by
surrender thereof at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Series B Note or its attorney
duly authorized in writing. Payment of or on account of principal, Premium, if any, and interest
on this Series B Note shall be made only to or upon the order in writing of the registered holder.



This Series B Note shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York excluding 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.




	 	 	 	Allied Capital Corporation






	 	 	 	By






Name:




	 	 	 	Title:





31




Allied Capital Corporation

7.15% Senior Secured Note, Series A

Due October 13, 2010




	 	 	 
	No. RA-

$[     ]

	 	[Date]

PPN      






Allied Capital Corporation, a Maryland corporation (the “Company”), for
value received, hereby promises to pay to [     ] or registered assigns on the
13th day of October, 2010 the principal amount of [     ] Dollars ($     )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the
principal amount from time to time remaining unpaid hereon at the rate of 7.15% per annum from the
date hereof until maturity, payable semiannually on the 13th day of each April and October in each
year (commencing on the first of such dates after the date hereof) and at maturity. The Company
agrees to pay interest on overdue principal (including any overdue required or optional prepayment
of principal) and Premium, if any, and (to the extent legally enforceable) on any overdue
installment of interest, and, during the continuance of any other Event of Default, on the unpaid
balance thereof, at the rate of 9.15% per annum after the due date, whether by acceleration or
otherwise, until paid. Both the principal hereof and interest hereon, and any Make-Whole Amount
with respect to this Note are payable at the principal office of the Company in Washington, D.C. in
coin or currency of the United States of America which at the time of payment shall be legal tender
for the payment of public and private debts.



This Note is one of the 7.15% Senior Secured Notes, Series A due October 13, 2010 (the “Series
A Notes”) of the Company in the aggregate principal amount of $261,000,000 issued or to be
issued together with the $89,000,000 aggregate principal amount of 7.34% Senior Secured
Notes, Series B, due October 13, 2012 (the “Series B Notes” and, together with the Series A Notes,
the “Notes”) of the Company, under and pursuant to the terms and provisions of the Note Agreement,
dated as of October 13, 2005, as amended by that certain First Amendment to Note Agreement dated as
of February 29, 2008, that certain First Omnibus Waiver and Amendment to the Note Agreements dated
as of July 25, 2008 and that certain Second Omnibus Amendment to the Note Agreements dated as of
December 30, 2008 (as amended, the “Note Agreement”), entered into by the Company with the
Purchasers named therein and this Note and the holder hereof are entitled with the holders of all
other Notes outstanding under the Note Agreement to all the benefits provided for thereby or
referred to therein to the extent provided in the Note Agreement. Reference is hereby made to the
Note Agreement for a statement of such rights and benefits.



This Series A Note and the other Series A Notes outstanding under the Note Agreement may be
declared due prior to their expressed maturity dates in the events, on the terms and in the manner
and amounts as provided in the Note Agreement.



The Series A Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and in the amounts and
with the Premium, if any, set forth in the Note Agreement.



This Series A Note is registered on the books of the Company and is transferable only by
surrender thereof at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Series A Note or its attorney
duly authorized in writing. Payment of or on account of principal, Premium, if any, and interest
on this Series A Note shall be made only to or upon the order in writing of the registered holder.



This Series A Note shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York excluding 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.




	 	 	 	Allied Capital Corporation






	 	 	 	By






Name:




	 	 	 	Title:





32




Allied Capital Corporation

7.34% Senior Secured Note, Series B

Due October 13, 2012




	 	 	 
	No. RB-

$[     ]

	 	[Date]

PPN      






Allied Capital Corporation, a Maryland corporation (the “Company”), for
value received, hereby promises to pay to [     ] or registered assigns on the 13th day
of October, 2012 the principal amount of [     ] Dollars ($     ) and to
pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the principal
amount from time to time remaining unpaid hereon at the rate of 7.34% per annum from the date
hereof until maturity, payable semiannually on the 13th day of each April and October in each year
(commencing on the first of such dates after the date hereof) and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue required or optional prepayment of
principal) and Premium, if any, and (to the extent legally enforceable) on any overdue installment
of interest, and, during the continuance of any other Event of Default, on the unpaid balance
thereof, at the rate of 9.34% per annum after the due date, whether by acceleration or otherwise,
until paid. Both the principal hereof and interest hereon, and any Make-Whole Amount with respect
to this Note are payable at the principal office of the Company in Washington, D.C. in coin or
currency of the United States of America which at the time of payment shall be legal tender for the
payment of public and private debts.



This Note is one of the 7.34% Senior Secured Notes, Series B due October 13, 2012 (the “Series
B Notes”) of the Company in the aggregate principal amount of $89,000,000 issued or to be
issued together with the $261,000,000 aggregate principal amount of 7.15% Senior Secured
Notes, Series A, due October 13, 2010 (the “Series A Notes” and, together with the Series B Notes,
the “Notes”) of the Company under and pursuant to the terms and provisions of the Note Agreement,
dated as of October 13, 2005, as amended by that certain First Amendment to Note Agreement dated as
of February 29, 2008, that certain First Omnibus Waiver and Amendment to the Note Agreements dated
as of July 25, 2008 and that certain Second Omnibus Amendment to the Note Agreements dated as of
December 30, 2008 (as amended, the “Note Agreement”), entered into by the Company with the
Purchasers named therein and this Note and the holder hereof are entitled with the holders of all
other Notes outstanding under the Note Agreement to all the benefits provided for thereby or
referred to therein to the extent provided in the Note Agreement. Reference is hereby made to the
Note Agreement for a statement of such rights and benefits.



This Series B Note and the other Series B Notes outstanding under the Note Agreement may be
declared due prior to their expressed maturity dates in the events, on the terms and in the manner
and amounts as provided in the Note Agreement.



The Series B Notes are not subject to prepayment or redemption at the option of the Company
prior to their expressed maturity dates except on the terms and conditions and in the amounts and
with the Premium, if any, set forth in the Note Agreement.



This Series B Note is registered on the books of the Company and is transferable only by
surrender thereof at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Series B Note or its attorney
duly authorized in writing. Payment of or on account of principal, Premium, if any, and interest
on this Series B Note shall be made only to or upon the order in writing of the registered holder.



This Series B Note shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York excluding 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.




	 	 	 	Allied Capital Corporation






	 	 	 	By






Name:




	 	 	 	Title:





33




Allied Capital Corporation

8.82% Senior Secured Note, Series 2008-A,

Due June 20, 2013




	 	 	 
	No. RA-

$[     ]

	 	[Date]

PPN      






Allied Capital Corporation, a Maryland corporation (the “Company”), for
value received, hereby promises to pay to [     ] or registered assigns on the
20th day of June, 2013 the principal amount of [     ] Dollars ($     ) and
to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the principal
amount from time to time remaining unpaid hereon at the rate of 8.82% per annum from the date
hereof until maturity, payable semiannually on the 20th day of each June and December in each year
(commencing on the first of such dates after the date hereof) and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue required or optional prepayment of
principal) and Premium, if any, and (to the extent legally enforceable) on any overdue installment
of interest, and, during the continuance of any other Event of Default, on the unpaid balance
thereof, at the rate of 10.82% per annum after the due date, whether by acceleration or otherwise,
until paid. Both the principal hereof and interest hereon and any Make-Whole Amount with respect
to this Series 2008-A Note are payable at the principal office of the Company in Washington, D.C.
in coin or currency of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts.



This Series 2008-A Note is one of the 8.82% Senior Secured Notes, Series 2008-A, due June 20,
2013 (the “Series 2008-A Notes”) of the Company in the aggregate principal amount of $140,500,000
issued or to be issued together with the $52,500,000 aggregate principal amount of 9.14%
Senior Secured Notes, Series 2008-B, due June 20, 2015 (the “Series 2008-B Notes” and, together
with the Series 2008-A Notes, the “Series 2008 Notes”) of the Company, under and pursuant to the
terms and provisions of the Note Agreement, dated as of June 20, 2008, as amended by that certain
First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008 and that
certain Second Omnibus Amendment to the Note Agreements dated as of December 30, 2008 (as amended,
the “Note Agreement”), entered into by the Company with the Purchasers named therein and this
Series 2008-A Note and the holder hereof are entitled with the holders of all other Notes
outstanding under the Note Agreement to all the benefits provided for thereby or referred to
therein to the extent provided in the Note Agreement. Reference is hereby made to the Note
Agreement for a statement of such rights and benefits. Unless otherwise indicated, capitalized
terms used in this Series 2008-A Note shall have the respective meanings ascribed to such terms in
the Note Agreement.



This Series 2008-A Note and the other Notes outstanding under the Note Agreement may be
declared, or otherwise become, due prior to their expressed maturity dates in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.



The Series 2008-A Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and conditions and in the
amounts and with the Premium, if any, set forth in the Note Agreement.



This Series 2008-A Note is registered on the books of the Company and is transferable only by
surrender thereof at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Series 2008-A Note or its
attorney duly authorized in writing. Payment of or on account of principal, Premium, if any, and
interest on this Series 2008-A Note shall be made only to or upon the order in writing of the
registered holder.



This Series 2008-A Note shall be construed and enforced in accordance with, and the rights of
the Company and the holder of this Series 2008-A Note shall be governed by, the law of the State of
New York excluding 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.




	 	 	 	Allied Capital Corporation






	 	 	 	By






Name:




	 	 	 	Title:





34




Allied Capital Corporation

9.14% Senior Secured Note, Series 2008-B,

Due June 20, 2015




	 	 	 
	No. RB-

$[     ]

	 	[Date]

PPN      






Allied Capital Corporation, a Maryland corporation (the “Company”), for
value received, hereby promises to pay to [     ] or registered assigns on the
20th day of June, 2015 the principal amount of [     ] Dollars ($     ) and
to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the principal
amount from time to time remaining unpaid hereon at the rate of 9.14% per annum from the date
hereof until maturity, payable semiannually on the 20th day of each June and December in each year
(commencing on the first of such dates after the date hereof) and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue required or optional prepayment of
principal) and Premium, if any, and (to the extent legally enforceable) on any overdue installment
of interest, and, during the continuance of any other Event of Default, on the unpaid balance
thereof, at the rate of 11.14% per annum after the due date, whether by acceleration or otherwise,
until paid. Both the principal hereof and interest hereon and any Make-Whole Amount with respect
to this Series 2008-B Note are payable at the principal office of the Company in Washington, D.C.
in coin or currency of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts.



This Series 2008-B Note is one of the 9.14% Senior Secured Notes, Series 2008-B, due June 20,
2015 (the “Series 2008-B Notes”) of the Company in the aggregate principal amount of $52,500,000
issued or to be issued together with the $140,500,000 aggregate principal amount of 8.82%
Senior Secured Notes, Series 2008-A, due June 20, 2013 (the “Series 2008-A Notes” and, together
with the Series 2008-B Notes, the “Series 2008 Notes”) of the Company, under and pursuant to the
terms and provisions of the Note Agreement, dated as of June 20, 2008, as amended by that certain
First Omnibus Waiver and Amendment to the Note Agreements dated as of July 25, 2008 and that
certain Second Omnibus Amendment to the Note Agreements dated as of December 30, 2008 (as amended,
the “Note Agreement”), entered into by the Company with the Purchasers named therein and this
Series 2008-B Note and the holder hereof are entitled with the holders of all other Notes
outstanding under the Note Agreement to all the benefits provided for thereby or referred to
therein to the extent provided in the Note Agreement. Reference is hereby made to the Note
Agreement for a statement of such rights and benefits. Unless otherwise indicated, capitalized
terms used in this Series 2008-B Note shall have the respective meanings ascribed to such terms in
the Note Agreement.



This Series 2008-B Note and the other Notes outstanding under the Note Agreement may be
declared, or otherwise become, due prior to their expressed maturity dates in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.



The Series 2008-B Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and conditions and in the
amounts and with the Premium, if any, set forth in the Note Agreement.



This Series 2008-B Note is registered on the books of the Company and is transferable only by
surrender thereof at the principal office of the Company duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Series 2008-B Note or its
attorney duly authorized in writing. Payment of or on account of principal, Premium, if any, and
interest on this Series 2008-B Note shall be made only to or upon the order in writing of the
registered holder.



This Series 2008-B Note shall be construed and enforced in accordance with, and the rights of
Company and the holder of this Series 2008-B Note shall be governed by, the law of the State of New
York excluding 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.




	 	 	 	Allied Capital Corporation






	 	 	 	By






Name:




	 	 	 	Title:






35