Document:

Exhibit 10.3

 Exhibit 10.3 
  
 AMENDED, RESTATED 
 AND SUBSTITUTED VFCC NOTE 
  
 $350,000,000, provided,
however, that the sum of Advances 
 Outstanding under this Note and the Swingline 
 Advances outstanding under the Swingline 

			
	Note shall not, in the aggregate, exceed the Facility Amount	 	April 22, 2004

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

  

 
SECTION 4975 OF THE CODE OR (II) PTCE 95–60, PTCE 96–23, PTCE 91–38, PTCE 90–1, PTCE 84–14 OR SOME OTHER PROHIBITED TRANSACTION
EXEMPTION IS APPLICABLE TO THE PURCHASE, HOLDING AND DISPOSITION OF THIS NOTE BY THE ACQUIRER. 
  
 THIS NOTE IS NOT PERMITTED TO BE TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE AMENDED AND RESTATED LOAN FUNDING AND SERVICING AGREEMENT REFERRED TO
HEREIN. 
  
 IN NO EVENT SHALL THE BORROWER (DEFINED BELOW) BE
ENTITLED TO HAVE ADVANCES MADE TO IT UNDER THIS NOTE, AND THE SWINGLINE NOTE IN AN AGGREGATE AMOUNT IN EXCESS OF THREE HUNDRED FIFTY MILLION DOLLARS ($350,000,000). 
  
 THE PRINCIPAL AMOUNT OF THIS NOTE WILL VARY AS ADVANCES ARE MADE AND PAID DOWN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE MAXIMUM AMOUNT SHOWN ON THE FACE THEREOF. 
  
 FOR VALUE RECEIVED, ACS FUNDING TRUST I, a Delaware statutory trust (the “Borrower”), promises to pay to WACHOVIA CAPITAL MARKETS, LLC (“WCM”), as the agent for Variable Funding
Capital Corporation (the “Deal Agent”) or its or Variable Funding Capital Corporation’s (“VFCC”) successors or assigns, the principal sum of THREE HUNDRED FIFTY MILLION DOLLARS ($350,000,000) or, if
less, the unpaid principal amount of the aggregate loans (“Advances”) made by VFCC to the Borrower pursuant to the Amended and Restated Loan Funding and Servicing Agreement (as defined below), as set forth on the attached Schedule,
on the dates specified in the Amended and Restated Loan Funding and Servicing Agreement, and to pay interest on the unpaid principal amount of each Advance on each day that such unpaid principal amount is outstanding at the applicable Interest Rate
related to such Advance as provided in the Amended and Restated Loan Funding and Servicing Agreement on each Payment Date and each other dates specified in the Amended and Restated Loan Funding and Servicing Agreement. 
  
 This Note is issued pursuant to the Amended and Restated Loan Funding and
Servicing Agreement, dated as of June 13, 2003, as amended by Amendment No. 1, dated as of October 7, 2003, Amendment No. 2, dated as of January 2, 2004, and Amendment No. 3, dated as of April 22, 2004 (as amended, modified, waived, supplemented or
restated from time to time, the “Amended and Restated Loan Funding and Servicing Agreement”), by and among the Borrower, American Capital Strategies, Ltd., as the servicer (the “Servicer”), Variable Funding Capital
Corporation, as the conduit lender, WCM, as the deal agent, Wachovia Bank, National Association, as the swingline lender, and Wells Fargo Bank, National Association, as the backup servicer and as the collateral custodian. Capitalized terms used but
not defined in this Note are used with the meanings ascribed to them in the Amended and Restated Loan Funding and Servicing Agreement. 
  

 Notwithstanding any other provisions contained in this Note, if at any time the rate of interest payable
by the Borrower under this Note, when combined with any and all other charges provided for in this Note, in the Amended and Restated Loan Funding and Servicing Agreement or in any other document (to the extent such other charges would constitute
interest for the purpose of any applicable law limiting interest that may be charged on this Note), exceeds the highest rate of interest permissible under applicable law (the “Maximum Lawful Rate”), then so long as the Maximum
Lawful Rate would be exceeded the rate of interest under this Note shall be equal to the Maximum Lawful Rate. If at any time thereafter the rate of interest payable under this Note is less than the Maximum Lawful Rate, the Borrower shall continue to
pay interest under this Note at the Maximum Lawful Rate until such time as the total interest paid by the Borrower is equal to the total interest that would have been paid had applicable law not limited the interest rate payable under this Note. In
no event shall the total interest received by VFCC under this Note exceed the amount which VFCC could lawfully have received had the interest due under this Note been calculated since the date of this Note at the Maximum Lawful Rate. 
  
 Payments of the principal of, and interest on, Advances represented by this
Note shall be made by the Borrower to the holder hereof by wire transfer of immediately available funds in the manner and at the address specified for such purpose as provided in Article 2 of the Amended and Restated Loan Funding and Servicing
Agreement, or in such manner or at such other address as the holder of this Note shall have specified in writing to the Borrower for such purpose, without the presentation or surrender of this Note or the making of any notation on this Note.

  
 If any payment under this Note falls due on a day that is not
a Business Day, then such due date shall be extended to the next succeeding Business Day and interest shall be payable on any principal so extended at the applicable Interest Rate. 
  
 If all or a portion of (i) the principal amount hereof or (ii) any interest payable thereon or (iii) any other amounts
payable hereunder shall not be paid when due (whether at maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum that is equal to the Base Rate plus 1.0%, in each case from the date of such
non-payment to (but excluding) the date such amount is paid in full. 
  
 Portions or all of the principal amount of the Note shall become due and payable at the time or times set forth in the Amended and Restated Loan Funding and Servicing Agreement. Any portion or all of the principal amount of this Note may be
prepaid, together with interest thereon (and as set forth in the Amended and Restated Loan Funding and Servicing Agreement, certain costs and expenses of VFCC) at the time and in the manner set forth in, but subject to the provisions of, the Amended
and Restated Loan Funding and Servicing Agreement. 
  
 Except as
provided in the Amended and Restated Loan Funding and Servicing Agreement, the Borrower expressly waives presentment, demand, diligence, protest and all notices of any kind whatsoever with respect to this Note. 
  
 All amounts evidenced by this Note, VFCC’s making such Advance and all
payments and prepayments of the principal hereof and the respective dates and maturity dates thereof shall be endorsed by the Deal Agent on the schedule attached hereto and made a part hereof or on a 

  

 
continuation thereof which shall be attached hereto and made a part hereof, or otherwise recorded by the Deal Agent in its internal records; provided,
however, that the failure of the Deal Agent to make such a notation shall not in any way limit or otherwise affect the obligations of the Borrower under this Note as provided in the Amended and Restated Loan Funding and Servicing Agreement.

  
 The holder hereof may sell, assign, transfer, negotiate, grant
participations in or otherwise dispose of all or any portion of any Advances made by VFCC and represented by this Note and the indebtedness evidenced by this Note. 
  
 This Note is secured by the security interests granted pursuant to Section 8.1 of the Amended and Restated Loan
Funding and Servicing Agreement. The holder of this Note, as agent for VFCC, is entitled to the benefits of the Amended and Restated Loan Funding and Servicing Agreement and may enforce the agreements of the Borrower contained in the Amended and
Restated Loan Funding and Servicing Agreement and exercise the remedies provided for by, or otherwise available in respect of, the Amended and Restated Loan Funding and Servicing Agreement, all in accordance with, and subject to the restrictions
contained in, the terms of the Amended and Restated Loan Funding and Servicing Agreement. If a Termination Event shall occur and be continuing, the unpaid balance of the principal of all Advances, together with accrued interest thereon, shall be
declared, and become due and payable in the manner and with the effect provided in the Amended and Restated Loan Funding and Servicing Agreement. 
  
 This Note is the “VFCC Note” referred to in the Amended and Restated Loan Funding and Servicing Agreement. This Note shall be construed in
accordance with and governed by the laws of the State of New York. 
  
 [Remainder of Page Intentionally Left Blank] 
  

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

  

			
	ACS FUNDING TRUST I
		
	By:	 	 American Capital Strategies, Ltd., as
 Servicer

		
	By:	 	 
	 	 	

	 Name:
	 	 
	 	 	

	 Title:
	 	 
	 	 	

  
 Amended, Restated
and Substituted VFCC Note 
  

 SCHEDULE TO NOTE 
  

							
	 Date of
 Advance or
 Repayment

	 	 Principal
 Amount of
 Advance

	 	 Principal
 Amount of
 Repayment

	  	 Outstanding
 Principal
 AmountExhibit 10.4

 Exhibit 10.4 
  
 Execution Copy 
  
 AMENDMENT NO. 1 TO AMENDED AND RESTATED 
 PURCHASE AND SALE AGREEMENT 
  
 THIS AMENDMENT
NO. 1 TO PURCHASE AND SALE AGREEMENT, dated as of April 22, 2004 (this “Amendment”), is entered into by and among ACS FUNDING TRUST I, as the buyer (the “Buyer”), and AMERICAN CAPITAL STRATEGIES, LTD., as the
seller (the “Seller”). Capitalized terms used and not otherwise defined herein are used as defined in the Agreement (as defined below). 
  
 WHEREAS, the parties hereto entered into that certain Amended and Restated Purchase and Sale Agreement, dated as of June 13, 2003 (as amended, modified,
waived, supplemented or restated from time to time, the “Agreement”); and 
  
 WHEREAS, the parties hereto desire to amend the Agreement in certain respects as provided herein. 
  
 NOW THEREFORE, in consideration of the premises and the other mutual covenants contained herein, the parties hereto agree as follows: 
  
 SECTION 1. Amendments. 
  
 (a) Section 4.1(bb) of the Agreement is hereby deleted. 
  
 (b) Exhibit A is hereby amended by deleting clause (vi) of paragraph
2. 
  
 SECTION 2. Agreement in Full Force and Effect
as Amended. 
  
 Except as specifically amended hereby, the
Agreement shall remain in full force and effect. All references to the Agreement shall be deemed to mean the Agreement as modified hereby. This Amendment shall not constitute a novation of the Agreement, but shall constitute an amendment thereof.
The parties hereto agree to be bound by the terms and conditions of the Agreement, as amended by this Agreement, as though such terms and conditions were set forth herein. 
  
 SECTION 3. Representations. 
  
 Each of the Buyer and Seller represent and warrant as of the date of this Amendment as follows: 
  
 (i) it is duly incorporated or organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation or organization; 
  
 (ii) the execution, delivery and performance by it of this Amendment are within its powers, have been duly authorized, and do not
contravene (A) its charter, by-laws, or other organizational documents, or (B) any Applicable Law; 
  

 (iii) no consent, license, permit, approval or authorization of, or registration, filing
or declaration with any governmental authority, is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment by or against it; 
  
 (iv) this Amendment has been duly executed and delivered by it; 
  
 (v) this Amendment constitutes its legal, valid and binding
obligation enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or
by general principles of equity; 
  
 (vi) it is
not in default under the Agreement; and 
  
 (vii)
there is no Termination Event, Unmatured Termination Event or Servicer Termination Event; 
  
 SECTION 4. Expenses. 
  
 In connection with the execution of this Amendment, the Seller agrees to pay all reasonable and actual costs and expenses (including without limitation the reasonable fees and expenses of legal counsel) of VFCC, the
Collateral Custodian and the Backup Servicer incurred in connection with the review and negotiation of this Amendment. 
  
 SECTION 5. Conditions Precedent. 
  
 The effectiveness of this Amendment is subject to the delivery to the Deal Agent of a copy of this Amendment duly executed by each of the parties hereto.

  
 SECTION 6. Miscellaneous. 
  
 (a) This Amendment may be executed in any number of counterparts (including
by facsimile), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement. 
  
 (b) The descriptive headings of the various sections of this Amendment are
inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof. 
  
 (c) This Amendment may not be amended or otherwise modified except as provided in the Agreement. 
  
 (d) The failure or unenforceability of any provision hereof shall not affect
the other provisions of this Amendment. 
  
 (e) Whenever the
context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine 

  

 2 

 
gender shall include the feminine and neuter and the neuter shall include the masculine and feminine. 
  
 (f) This Amendment represents the final agreement between the parties and may
not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties. There are no unwritten oral agreements between the parties. 
  
 (g) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS. 
  
 SECTION 7. Deal Agent’s Consent and Waiver. 
  
 By its execution hereof, the Deal Agent, for itself and on behalf of the Secured Parties, consents to this Amendment and
waives any requirements for notice with respect thereto. 
  
 [Remainder of Page Intentionally Left Blank] 
  

 3 

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

					
	THE BUYER:	 	ACS FUNDING TRUST I
			
	 	 	 By:
	 	 American Capital Strategies, Ltd., as
 Servicer

	 	 	 By:
	 	 
	 	 	 	 	

	 	 	 Name:
	 	 
	 	 	 	 	

	 	 	 Title:
	 	 
	 	 	 	 	

		
	 	 	 ACS Funding Trust I
 c/o American Capital Strategies, Ltd., as Servicer
 2 Bethesda Metro Center, 14th Floor
 Bethesda, Maryland 20814
 Attention: Compliance Officer
 Facsimile No.: (301) 654-6714
 Confirmation No.: (301) 951-6122

		
	THE SELLER:	 	AMERICAN CAPITAL STRATEGIES, LTD.
			
	 	 	 By:
	 	 
	 	 	 	 	

	 	 	 Name:
	 	 
	 	 	 	 	

	 	 	 Title:
	 	 
	 	 	 	 	

		
	 	 	 American Capital Strategies, Ltd.
 2 Bethesda Metro Center, 14th Floor
 Bethesda, Maryland 20814
 Attention: Compliance Officer
 Facsimile No.: (301) 654-6714
 Confirmation No.: (301) 951-6122

  
 [SIGNATURES CONTINUED
ON FOLLOWING PAGE] 
  

					
	 	  	S-1	  	Amendment No. 1 to Amended and Restated Purchase and Sale Agreement

			
	CONSENTED TO:
	
	 WACHOVIA CAPITAL MARKETS, LLC
 (f/k/a Wachovia Securities, Inc.), as Deal Agent,
 for itself and on behalf of the Secured Parties

		
	By:	 	 
	 	 	

	 Name:
	 	 
	 	 	

	 Title:
	 	 
	 	 	

	
	 Wachovia Capital Markets, LLC
 One Wachovia Center, NC0600
 Charlotte, North Carolina 28288
 Attention: Raj Shah
 Facsimile No.: (704) 383-6036
 Telephone No.: (704) 374-6230

  

			
	 WACHOVIA BANK, NATIONAL ASSOCIATION,
 as the Hedge Counterparty

		
	By:	 	 
	 	 	

	 Name:
	 	 
	 	 	

	 Title:
	 	 
	 	 	

	
	 Wachovia Bank, National Association
 One Wachovia Center, DC-8
 Charlotte, North Carolina 28202-0600
 Attention: Bruce M. Young
 Facsimile No.: (704) 383-0575
 Telephone No.: (704) 383-8778

  

					
	 	  	S-2	  	Amendment No. 1 to Amended and Restated Purchase and Sale Agreement

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