Document:

EXHIBIT

10.5

 

AMENDMENT

NO. 10 TO

LOAN FUNDING AND SERVICING AGREEMENT

(VFCC Transaction with ACS Funding Trust I)

 

 

THIS

AMENDMENT NO. 10 TO LOAN FUNDING AND SERVICING AGREEMENT, dated as of June 24, 2002 (this “Amendment”), is entered into by and among ACS

FUNDING TRUST I, as the borrower (in such capacity, the “Borrower”), AMERICAN CAPITAL STRATEGIES,

LTD., as the servicer (in such capacity, the “Servicer”),

certain INVESTORS, VARIABLE FUNDING CAPITAL CORPORATION, as a lender (in such

capacity, a “Lender”), WACHOVIA

SECURITIES, INC. (f/k/a First Union Securities, Inc. successor–in–interest

to First Union Capital Markets Corp.), as the deal agent (in such capacity, the

“Deal Agent”), WACHOVIA BANK, NATIONAL

ASSOCIATION (f/k/a First Union National Bank) (“WBNA”), as a lender (in

such capacity, a “Lender”) and as the

liquidity agent (in such capacity, the “Liquidity

Agent”), WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION (f/k/a

Norwest Bank Minnesota, National Association), as the collateral custodian (in

such capacity, the “Collateral Custodian”)

and as the backup servicer (in such capacity, the “Backup

Servicer”), and is acknowledged and agreed to by WACHOVIA BANK,

NATIONAL ASSOCIATION (f/k/a First Union National Bank), as the hedge

counterparty (in such capacity, the “Hedge

Counterparty”). Capitalized terms used and not otherwise defined

herein shall have the meanings given to such terms in the Agreement (as defined

below).

R E C I T A L S

WHEREAS, the parties hereto entered into that

certain Loan Funding and Servicing Agreement, dated as of March 31, 1999, as

amended by that Amendment No. 1, dated as of June 30, 1999, Amendment No. 2,

dated as of September 24, 1999, Amendment No. 3, dated as of December 14, 1999,

Amendment No. 4, dated as of June 16, 2000, Amendment No. 5, dated as of

December 20, 2000, Amendment No. 6, dated as of March 29, 2001, Amendment No.

7, dated as of April 19, 2001, Amendment No. 8, dated as of January 15, 2002

and Amendment No. 9, dated as of March 29, 2002 (such agreement as amended,

modified, supplemented, waived or restated from time to time, the “Agreement”);

WHEREAS, the parties hereto desire to amend the

Agreement in certain respects as provided herein;

NOW,

THEREFORE,

based upon the above Recitals, the mutual premises and agreements contained

herein, and other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto, intending to be legally

bound, hereby agree as follows:

SECTION 1.         Amendments.

(a)           The definition of “Facility Amount” in Section 1.1 is hereby amended and restated in

its entirety as follows:

 

 

 

“Facility

Amount:  (a) prior

to the Facility Increase Expiration Date, $275,000,000; and (b) on and after

the Facility Increase Expiration Date, $225,000,000; provided, however, on and after

the Termination Date, the Facility Amount shall be zero.”

(b)           Section

1.1 of the Agreement is hereby amended by adding the following new

definitions thereto:

“ACAS 2002-2 Transaction:  That certain private placement term transaction

of notes issued by ACAS Business Loan Trust 2002-2.”

“ACAS 2002-2 Transaction Documents:  The documents executed in connection with

the ACAS 2002-2 Transaction.”

“Facility Increase Expiration Date:  The earlier to occur of: (a) August 16, 2002

or (b) the “Closing Date” under and as defined by the ACAS 2002-2 Transaction

Documents.”

(c)           Article

II of the Agreement is hereby amended by amending and restating the

first sentence of Section 2.5(a)

thereof as follows:

“Section

2.5         The Structured Notes.

 

(a)           The Borrower shall deliver to the

Deal Agent, on behalf of the Lenders, at the applicable address set forth on

the signature pages of this Agreement, a duly executed structured note, in the

form of Exhibit B–2 (the “VFCC Structured Note”), dated as of the

date of this Agreement, in a face amount prior to the Facility Increase

Expiration Date equal to $275,000,000 and on and after the Facility Increase

Expiration Date, $225,000,000, and otherwise duly completed in the case of VFCC

Advances and a duly executed structured note, in the form of Exhibit B–1 (the “FUNB Structured Note”) dated as of the

date of this Agreement, in a face amount equal to the $30,000,000, and

otherwise duly completed in the case of FUNB Advances (the VFCC Structured Note

together with the FUNB Structured Note, the “Notes”); provided,

however, that

notwithstanding anything to the contrary contained herein or in any other

Transaction Document, the indebtedness of the Borrower evidenced by the Notes

shall not in the aggregate exceed the Facility Amount.”

(d)           The Commitment of WBNA as an Investor

set forth on the signature pages of the Agreement is hereby amended and

restated to be “(a) prior to the Facility Increase Expiration Date,

$275,000,000; and (b) on and after the Facility Increase Expiration Date,

$225,000,000; provided, however,

that the sum of the Commitments of the Investors and the Lender shall not

exceed the Facility Amount.”

SECTION 2.         Increase in Facility Amount and Amount of VFCC Structured

Note.

Effective on the date of this Amendment, the Facility

Amount shall be increased to $275,000,000 until the Facility Increase

Expiration Date in accordance with the definition of 

 

2

 

Facility Amount Section

1.1; provided, that,

the Deal Agent shall have first received an executed version of the amended,

restated and substituted VFCC Structured Note attached to this Amendment as Annex

A (the “New Note”).  Such New

Note shall replace and supersede any VFCC Structured Note previously executed

by the Borrower pursuant to the Agreement (collectively, the “Replaced Note”).  Such New Note evidences the same

indebtedness, and is secured by the same Collateral as the Replaced Note.  The Deal Agent shall return the Replaced

Note to the Borrower.

SECTION 3.         Agreement in Full Force and Effect as Amended.

Except as specifically amended hereby, all provisions

of the Agreement shall remain in full force and effect. After this Amendment

becomes effective, all references to the Agreement, the “Loan Funding and

Servicing Agreement,” “hereof,” “herein,” or words of similar effect referring

to the Agreement shall be deemed to mean the Agreement as amended hereby. This

Amendment shall not constitute a novation of the Agreement, but shall

constitute an amendment thereof. This Amendment shall not be deemed to

expressly or impliedly waive, amend or supplement any provision of the

Agreement other than as set forth herein.

SECTION 4.         Representations.

Each of the Borrower and Servicer represent and

warrant as of the date of this Amendment as follows:

(i)            it is duly incorporated or

organized, validly existing and in good standing under the laws of its

jurisdiction of incorporation or organization;

(ii)           the execution, delivery and

performance by it of this Amendment are within its powers, have been duly

authorized, and do not contravene (A) its charter, by­laws, 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.

 

3

 

SECTION

5.         Conditions to Effectiveness.

 

This Amendment shall become effective on the date

hereof.

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)           WBNA certifies by execution hereof

that it is an Investor with Commitments in excess of 66–2/3% of the

Facility Amount, and therefore is a Required Investor pursuant to the

Agreement.

(e)           The failure or unenforceability of

any provision hereof shall not affect the other provisions of this Amendment.

(f)            Whenever the context and

construction so require, all words used in the singular number herein shall be

deemed to have been used in the plural, and vice versa, and the masculine

gender shall include the feminine and neuter and the neuter shall include the

masculine and feminine.

(g)           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.

(h)           The Borrower and the Servicer agree

to pay, no later than ten (10) Business Days following receipt of a bill

therefore, the reasonable fees and expenses of Mayer, Brown, Rowe & Maw as

counsel to the Deal Agent in connection with the preparation of this Amendment.

(i)            THIS AMENDMENT AND THE RIGHTS AND

OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND

CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK

WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS.

[Remainder of Page

Intentionally Left Blank]

 

4

 

IN

WITNESS WHEREOF, the parties have caused this Amendment to be executed by their

respective officers thereunto duly authorized, as of the date first above

written.

	

  THE BORROWER:

  	

   

  	

  ACS FUNDING TRUST I

  

 

	

  By:

  	

   

  
	

  Name:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

  ACS Funding Trust I

  
	

  c/o American Capital Strategies, Ltd.

  
	

  2 Bethesda Metro Center, 14th Floor

  
	

  Bethesda, Maryland 20814

  
	

  Attention:

  	

   

  	

  Compliance Officer

  
	

  Facsimile No.:

  	

   

  	

  (301) 654–6714

  
	

  Confirmation No.:

  	

   

  	

  (301) 951–6122

  
					

 

	

  THE SERVICER:

  	

   

  	

  AMERICAN CAPITAL STRATEGIES, LTD.

  

 

	

  By:

  	

   

  
	

  Name:

  	

   

  
	

  Title:

  	

   

  
	

   

  
	

  American Capital Strategies, Ltd.

  
	

  2 Bethesda Metro Center, 10 Floor

  
	

  Bethesda, Maryland 20814

  
	

  Attention:

  	

   

  	

  Compliance Officer

  
	

  Facsimile No.:

  	

   

  	

  (301) 654–6714

  
	

  Confirmation No.:

  	

   

  	

  (301) 951–6122

  
				

 

[SIGNATURES CONTINUED ON

FOLLOWING PAGE]

 

5

 

	

  THE INVESTORS:

  	

   

  	

  WACHOVIA BANK, NATIONAL

  ASSOCIATION

  (f/k/a First Union National Bank)

  

 

	

  By:

  	

   

  
	

  Name:

  	

   

  
	

  Title:

  	

   

  
	

   

  
	

  Commitment: 

  (a) prior to the Facility Increase Expiration Date, $275,000,000; and

  (b) on and after the Facility Increase Expiration Date, $225,000,000; provided, however, that the sum of the

  Commitments of the Investors and the Lender shall not exceed the Facility

  Amount.

  
	

   

  
	

  Wachovia Bank, National Association

  
	

  One Wachovia Center, Mail Code: NC0610

  
	

  301 South College Street

  
	

  Charlotte, North Carolina 28288

  
	

  Attention:

  	

   

  	

  Capital Markets Credit

  Administration

  
	

  Facsimile No.:

  	

   

  	

  (704) 374–3254

  
	

  Confirmation No:

  	

   

  	

  (704) 374–4001

  
				

 

[SIGNATURES CONTINUED ON

FOLLOWING PAGE]

 

6

 

	

  LENDER:

  	

   

  	

  VARIABLE FUNDING CAPITAL

  CORPORATION

  

	

  By Wachovia Securities, Inc.

  
	

  (f/k/a First Union Securities, Inc.

  successor–in–interest to First Union

  Capital Markets Corp.), as attorney-in-fact

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

   

  
	

  Name:

  	

   

  
	

  Title:

  	

   

  
	

   

  	

   

  
	

  Variable Funding Capital Corporation

  
	

  c/o Wachovia Securities, Inc.

  
	

  One Wachovia Center, Mail Code: NC0610

  
	

  301 South College Street

  
	

  Charlotte, North Carolina 28288

  
	

  Attention:

  	

   

  	

  Conduit Administration

  
	

  Facsimile No.:

  	

   

  	

  (704) 383–6036

  
	

  Confirmation No.:

  	

   

  	

  (704) 383–9343

  
					

 

 

	

  with

  a copy to:

  

 

	

  Lord Securities Corp.

  
	

  2 Wall Street, 19th Floor

  
	

  New York, New York 10005

  
	

  Attention:

  	

   

  	

  Vice President

  
	

  Facsimile No.:

  	

   

  	

  (212) 346–9012

  
	

  Confirmation No.:

  	

   

  	

  (212) 346–9008

  

 

[SIGNATURES CONTINUED ON

FOLLOWING PAGE]

 

7

 

	

  THE BACKUP SERVICER:

  	

   

  	

  WELLS FARGO BANK MINNESOTA,

  NATIONAL ASSOCIATION (f/k/a

  Norwest Bank Minnesota, National Association)

  

 

	 
	

  By.

  	

   

  
	 
	

  Name:

  	

   

  
	 
	

  Title:

  	

   

  
	 
	

   

  	

   

  
	 
	

  Wells Fargo Bank Minnesota, National Association

  
	 
	

  Sixth Street and Marquette, MAC: N9311-161

  
	 
	

  Minneapolis, Minnesota 55479

  
	 
	

   

  
	 
	

  Attention:

  	

   

  	

  Corporate Trust Services

  Asset-Backed Administration

  
	 
	

  Facsimile No.:

  	

   

  	

  (612) 667–3464

  
	 
	

  Confirmation No.:

  	

   

  	

  (612) 667–8058

  
	 
	

   

  	

   

  	

   

  
	

  THE

  COLLATERAL CUSTODIAN:

  	

   

  	

  WELLS

  FARGO BANK MINNESOTA,

  NATIONAL ASSOCIATION (f/k/a

  Norwest Bank Minnesota, National Association)

  
	 
	

   

  	

   

  
	 
	

  By:

  	

   

  
	 
	

  Name:

  	

   

  
	 
	

  Title:

  	

   

  
	 
	

   

  	

   

  
	 
	

  Wells Fargo Bank Minnesota, National Association

  
	 
	

  Sixth Street and Marquette, MAC: N9311–161

  
	 
	

  Minneapolis, Minnesota 55479

  
	 
	

  Attention:

  	

   

  	

  Corporate Trust Services

  Asset-Backed Administration

  
	 
	

  Facsimile No.:

  	

   

  	

  (612) 667–3464

  
	 
	

  Confirmation No.:

  	

   

  	

  (612) 667–8058

  
						

 

[SIGNATURES CONTINUED ON

THE FOLLOWING PAGE]

 

8

 

	

  THE DEAL AGENT:

  	

   

  	

  WACHOVIA SECURITIES, INC.

  (f/k/a First Union Securities, Inc. successor–in–interest to

  First Union Capital Markets Corp.)

  

 

	 
	

  By:

  	

   

  
	 
	

  Name:

  	

   

  
	 
	

  Title:

  	

   

  
	 
	

   

  	

   

  
	 
	

  Wachovia Securities, Inc.

  
	 
	

  One Wachovia Center, Mail Code: NC0610

  
	 
	

  301 South College Street

  
	 
	

  Charlotte, North Carolina 28288

  
	 
	

  Attention: Conduit Administration

  
	 
	

   

  
	 
	

  Facsimile No.: 

  (704) 383–6036

  
	 
	

  Confirmation No.: (704) 383–9343

  
	 
	

   

  
	

  LENDER AND LIQUIDITY AGENT

  	

  WACHOVIA BANK, NATIONAL

  ASSOCIATION (f/k/a First Union National Bank)

  
	 
	

   

  	

   

  
	 
	

  By:

  	

   

  
	 
	

  Name:

  	

   

  
	 
	

  Title:

  	

   

  
	 
	

   

  	

   

  
	 
	

  Wachovia Bank, National Association

  
	 
	

  One Wachovia Center, Mail Code: NC0610

  
	 
	

  301 South College Street

  
	 
	

  Charlotte, North Carolina 28288

  
	 
	

  Attention: Capital Markets Credit Administration 

  
	 
	

  Facsimile No.:

  	

   

  	

  (704) 374–3254

  
	 
	

  Confirmation No.:

  	

   

  	

  (704) 374–4001

  
	 
	

   

  	

   

  	

   

  
	 
	

  Lender Commitment: $30,000,000; provided,

  however,

  that the sum of the Commitments of the Investors and the Lender shall not

  exceed the Facility Amount.

  
					

 

9

 

Acknowledged and Agreed to

this 19th day of June, 2002.

WACHOVIA BANK, NATIONAL 

ASSOCIATION

(f/k/a First Union National Bank), 

as the Hedge Counterparty

	

  By:

  	

   

  	 

	

  Name:

  	

   

  	 

	

  Title:

  	

   

  	 

	

   

  	

   

  	 

	

  Wachovia Bank,

  National Association

  
	

  One Wachovia

  Center, Mail Code: NC0610

  
	

  Charlotte, North

  Carolina 28288

  
	

  Attention:

  	

   

  	

  Capital Markets

  Credit Administration

  
	

  Facsimile No.:

  	

   

  	

  (704) 374–3254

  
	

  Confirmation

  No.:

  	

   

  	

  (704) 374–4001

  
					

 

10

 

ANNEX A

 

EXHIBIT B-2

To Loan Funding

and Servicing

Agreement

 

(a) Prior to the

Facility Increase Expiration

Date,

$275,000,000, and (b) on and after the

Facility Increase Expiration

Date,

$225,000,000; provided,

however,

that the sum of the Commitments of

the Investors and the Lender shall not

exceed the Facility Amount.

March 31, 1999

AMENDED, RESTATED AND

SUBSTITUTED

VFCC STRUCTURED NOTE

 

THIS AMENDED, RESTATED AND SUBSTITUTED VFCC STRUCTURED

NOTE (THE “VFCC STRUCTURED NOTE”) HAS NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES

ACT”) OR UNDER ANY STATE SECURITIES LAWS AND THE BORROWER (AS

DEFINED BELOW) HAS NOT BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF

1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).

THIS VFCC STRUCTURED NOTE MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE

TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE

STATE SECURITIES LAWS EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER THE

SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

THIS VFCC STRUCTURED NOTE IS NOT PERMITTED TO BE

TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN

COMPLIANCE WITH THE TERMS OF THE 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 VFCC STRUCTURED NOTE AND THE

FUNB STRUCTURED NOTE IN AN AGGREGATE AMOUNT IN EXCESS OF THE FACILITY AMOUNT

(AS DEFINED IN THE LOAN FUNDING AND SERVICING AGREEMENT (AS DEFINED BELOW)).

FOR VALUE RECEIVED, ACS FUNDING TRUST I, a Delaware

business trust (the “Borrower”),

promises to pay to FIRST UNION SECURITIES, INC. (successor-in-interest to First

Union Capital Markets Corp.), as the deal agent for the Lenders (the “Deal Agent”), or the Lenders’ assigns, the

principal sum of (a) prior to the Facility Increase Expiration Date, TWO

HUNDRED AND SEVENTY–FIVE MILLION DOLLARS ($275,000,000) and (b) on and

after the Facility Increase Expiration Date, TWO HUNDRED AND TWENTY–FIVE

MILLION DOLLARS ($225,000,000) or, if less, the unpaid principal amount of the

aggregate advances (“Advances”) made by

the Lenders (as defined below) to the Borrower pursuant to the Loan 

 

11

 

Funding and Servicing

Agreement (as defined below), as set forth on the attached Schedule, on the

dates specified in Section 2.6 of the

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 Interest Rate related to such Advance as provided in the

Loan Funding and Servicing Agreement on each Payment Date and each other dates

specified in the Loan Funding and Servicing Agreement.

This VFCC Structured Note is issued pursuant to the

Loan Funding and Servicing Agreement, dated as of March 31, 1999, as amended by

Amendment No. 1, dated as of June 30, 1999, Amendment No. 2, dated as of

September 24, 1999, Amendment No. 3, dated as of December 14, 1999, Amendment

No. 4, dated as of June 16, 2000, Amendment No. 5, dated as of December 20,

2000, Amendment No. 6, dated as of March 29, 200 1, Amendment No. 7, dated as

of April 19, 200 1, Amendment No. 8, dated as of January 15, 2002, Amendment

No. 9, dated as of March 29, 2002 and Amendment No. 10, dated as of June 24,

2002 (as amended, modified, waived, supplemented, or restated from time to

time, the “Loan Funding and Servicing Agreement”),

by and among the Borrower, American Capital Strategies, Ltd., as servicer,

Variable Funding Capital Corporation, as a lender, the Investors named therein,

Wells Fargo Bank Minnesota, National Association (f/k/a Norwest Bank Minnesota,

National Association), as backup servicer and as collateral custodian, the Deal

Agent, and Wachovia Bank, National Association (f/k/a First Union National

Bank), as a lender and as liquidity agent. Capitalized terms used but not

defined in this VFCC Structured Note are used with the meanings ascribed to

them in the Loan Funding and Servicing Agreement.

Notwithstanding any other provisions contained in this

VFCC Structured Note, if at any time the Interest Rate payable by the Paying

Agent on behalf of the Borrower under this VFCC Structured Note, when combined

with any and all other charges provided for in this VFCC Structured Note, in

the 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 VFCC Structured

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 Interest Rate under this

VFCC Structured Note shall be equal to the Maximum Lawful Rate. If at any time

thereafter the Interest Rate payable under this VFCC Structured Note is less

than the Maximum Lawful Rate, the Paying Agent on behalf of the Borrower shall

continue to pay Interest under this VFCC Structured Note at the Maximum Lawful

Rate until such time as the total Interest paid by the Paying Agent on behalf

of the Borrower is equal to the total Interest that would have been paid had

applicable law not limited the Interest Rate payable under this VFCC Structured

Note. In no event shall the total Interest received by the Lenders under this

VFCC Structured Note exceed the amount which such Lenders could lawfully have

received had the Interest due under this VFCC Structured Note been calculated

since the date of this VFCC Structured Note at the Maximum Lawful Rate.

Payments of the principal of, and Interest on, the

Advances by the Lenders and represented by this VFCC Structured Note shall be

made by the Paying Agent on behalf of the Borrower to the holder or holders

hereof by wire transfer of immediately available funds in the manner and at the

address specified for such purpose as provided in the Loan Funding and

Servicing Agreement, or in such manner or at such other address as the holder

or holders of this VFCC Structured Note shall have specified in writing to the

Borrower for such purpose, without 

 

12

 

the presentation or

surrender of this VFCC Structured Note or the making of any notation on this

VFCC Structured Note.

If any payment under this VFCC Structured 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 VFCC

Structured Note shall become due and payable at the time or times set forth in

the Loan Funding and Servicing Agreement. Any portion or all of the principal

amount of this VFCC Structured Note may be prepaid, together with Interest

thereon (and, as set forth in the Loan Funding and Servicing Agreement, certain

costs and expenses of the Lenders) at the time and in the manner set forth in,

but subject to the provisions of, the Loan Funding and Servicing Agreement.

The Borrower expressly waives presentment, demand,

diligence, protest and all notices of any kind whatsoever with respect to this

VFCC Structured Note.

All amounts evidenced by this VFCC Structured Note,

the Advances, Advances Outstanding and all payments and prepayments of the

principal hereof and the respective dates and maturity dates thereof shall be

endorsed by the Deal Agent, as agent for the Lenders, 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 in its internal

books or records or computer system; provided, however, that

the failure of the Deal Agent to make such a notation or recordation shall not

in any way limit or otherwise affect the obligations of the Borrower under this

VFCC Structured Note as provided in the Loan Funding and Servicing Agreement.

The holder or holders hereof may sell, assign,

transfer, negotiate, grant participations in or otherwise dispose of all or any

portion of any Advance, Advances Outstanding or the Commitment represented by

this VFCC Structured Note. All transfers and pledges of this VFCC Structured

Note must be done in compliance with the Securities Act, applicable state

securities laws and Article 8 of the UCC.

This VFCC Structured Note is secured by the security

interests granted pursuant to Section 2.9

of the Loan Funding and Servicing Agreement. The holder or holders of this VFCC

Structured Note are entitled to the benefits of the Loan Funding and Servicing

Agreement and may enforce the agreements of the Borrower contained in the Loan

Funding and Servicing Agreement and exercise the remedies provided for by, or

otherwise available in respect of, the Loan Funding and Servicing Agreement,

all in accordance with, and subject to the restrictions contained in, the terms

of the Loan Funding and Servicing Agreement. If a Termination Event shall occur

and the Termination Date has been declared or has otherwise occurred, the

unpaid balance of the principal of all Advances, together with accrued Interest

thereon, shall be 

 

 

13

 

declared, and become, due

and payable in the manner and with the effect provided in the Loan Funding and

Servicing Agreement.

This VFCC Structured Note is one of the “Structured Notes” referred to in Section 2.5 of the Loan Funding and Servicing

Agreement. THIS VFCC STRUCTURED NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND

GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

This VFCC Structured Note is intended to be and is a

replacement of the VFCC Structured Note, dated March 31, 1999, in the maximum

principal amount of $225,000,000 (the “Replaced

Note”‘). This VFCC Structured Note evidences the same indebtedness

and is secured by the same Collateral securing the Replaced Note and is not

intended to constitute a novation in any manner.

[Remainder of Page

Intentionally Left Blank]

 

14

IN WITNESS WHEREOF, the undersigned has executed this

VFCC Structured Note as on the date first written above.

	

  ACS FUNDING TRUST I

  
	

   

  
	

  By:

  	

   

  
	

  Name:

  	

   

  
	

  Title:

  	

   

  

 

15

 

Schedule attached to Amended, Restated and Substituted VFCC Structured

Note dated March 31, 1999 of ACS Funding Trust I payable to the order of First

Union Securities, Inc., as the Deal Agent

 

Advances

Outstanding as of June24, 2002                                                    $________________

(Date

of Amendment No. 10)

 

	

  Date of 

  Advance or 

  Repayment

  	

   

  	

  Principal 

  Amount of 

  Advance

  	

   

  	

  Principal 

  Amount of 

  Repayment

  	

   

  	

  Advances 

  Outstanding

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

16Exhibit 10.6

(a) Prior to the

Facility Increase Expiration

Date,

$275,000,000, and (b) on and after the

Facility Increase Expiration

Date,

$225,000,000; provided,

however,

that the sum of the Commitments of

the Investors and the Lender shall not

exceed the Facility Amount.

March 31, 1999

AMENDED, RESTATED

AND SUBSTITUTED

VFCC STRUCTURED

NOTE

 

THIS AMENDED, RESTATED AND SUBSTITUTED VFCC STRUCTURED

NOTE (THE “VFCC STRUCTURED NOTE”) HAS NOT BEEN REGISTERED UNDER THE

SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES

ACT”) OR UNDER ANY STATE SECURITIES LAWS AND THE BORROWER (AS

DEFINED BELOW) HAS NOT BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF

1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”).

THIS VFCC STRUCTURED NOTE MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE

TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE

STATE SECURITIES LAWS EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER THE

SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

THIS VFCC STRUCTURED NOTE IS NOT PERMITTED TO BE

TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN

COMPLIANCE WITH THE TERMS OF THE 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 VFCC STRUCTURED NOTE AND THE

FUNB STRUCTURED NOTE IN AN AGGREGATE AMOUNT IN EXCESS OF THE FACILITY AMOUNT

(AS DEFINED IN THE LOAN FUNDING AND SERVICING AGREEMENT (AS DEFINED BELOW)).

FOR VALUE RECEIVED, ACS FUNDING TRUST I, a Delaware

business trust (the “Borrower”),

promises to pay to FIRST UNION SECURITIES, INC. (successor-in-interest to First

Union Capital Markets Corp.), as the deal agent for the Lenders (the “Deal Agent”), or the Lenders’ assigns, the

principal sum of (a) prior to the Facility Increase Expiration Date, TWO

HUNDRED AND SEVENTY–FIVE MILLION DOLLARS ($275,000,000) and (b) on and

after the Facility Increase Expiration Date, TWO HUNDRED AND TWENTY–FIVE

MILLION DOLLARS ($225,000,000) or, if less, the unpaid principal amount of the

aggregate advances (“Advances”) made by

the Lenders (as defined below) to the Borrower pursuant to the Loan Funding and

Servicing Agreement (as defined below), as set forth on the attached Schedule,

on the dates specified in Section 2.6 of

the 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 Interest Rate related to such Advance as provided in the

Loan

 

 

Funding and Servicing Agreement

on each Payment Date and each other dates specified in the Loan Funding and

Servicing Agreement.

This VFCC Structured Note is issued pursuant to the

Loan Funding and Servicing Agreement, dated as of March 31, 1999, as amended by

Amendment No. 1, dated as of June 30, 1999, Amendment No. 2, dated as of

September 24, 1999, Amendment No. 3, dated as of December 14, 1999, Amendment

No. 4, dated as of June 16, 2000, Amendment No. 5, dated as of December 20,

2000, Amendment No. 6, dated as of March 29, 200 1, Amendment No. 7, dated as

of April 19, 200 1, Amendment No. 8, dated as of January 15, 2002, Amendment

No. 9, dated as of March 29, 2002 and Amendment No. 10, dated as of June 24,

2002 (as amended, modified, waived, supplemented, or restated from time to

time, the “Loan Funding and Servicing Agreement”),

by and among the Borrower, American Capital Strategies, Ltd., as servicer,

Variable Funding Capital Corporation, as a lender, the Investors named therein,

Wells Fargo Bank Minnesota, National Association (f/k/a Norwest Bank Minnesota,

National Association), as backup servicer and as collateral custodian, the Deal

Agent, and Wachovia Bank, National Association (f/k/a First Union National

Bank), as a lender and as liquidity agent. Capitalized terms used but not

defined in this VFCC Structured Note are used with the meanings ascribed to

them in the Loan Funding and Servicing Agreement.

Notwithstanding any other provisions contained in this

VFCC Structured Note, if at any time the Interest Rate payable by the Paying

Agent on behalf of the Borrower under this VFCC Structured Note, when combined

with any and all other charges provided for in this VFCC Structured Note, in

the 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 VFCC Structured

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 Interest Rate under this

VFCC Structured Note shall be equal to the Maximum Lawful Rate. If at any time

thereafter the Interest Rate payable under this VFCC Structured Note is less

than the Maximum Lawful Rate, the Paying Agent on behalf of the Borrower shall

continue to pay Interest under this VFCC Structured Note at the Maximum Lawful

Rate until such time as the total Interest paid by the Paying Agent on behalf

of the Borrower is equal to the total Interest that would have been paid had

applicable law not limited the Interest Rate payable under this VFCC Structured

Note. In no event shall the total Interest received by the Lenders under this

VFCC Structured Note exceed the amount which such Lenders could lawfully have

received had the Interest due under this VFCC Structured Note been calculated

since the date of this VFCC Structured Note at the Maximum Lawful Rate.

Payments of the principal of, and Interest on, the

Advances by the Lenders and represented by this VFCC Structured Note shall be

made by the Paying Agent on behalf of the Borrower to the holder or holders

hereof by wire transfer of immediately available funds in the manner and at the

address specified for such purpose as provided in the Loan Funding and

Servicing Agreement, or in such manner or at such other address as the holder

or holders of this VFCC Structured Note shall have specified in writing to the

Borrower for such purpose, without the presentation or surrender of this VFCC

Structured Note or the making of any notation on this VFCC Structured Note.

 

2

 

If any payment under this VFCC Structured 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 VFCC

Structured Note shall become due and payable at the time or times set forth in

the Loan Funding and Servicing Agreement. Any portion or all of the principal

amount of this VFCC Structured Note may be prepaid, together with Interest

thereon (and, as set forth in the Loan Funding and Servicing Agreement, certain

costs and expenses of the Lenders) at the time and in the manner set forth in,

but subject to the provisions of, the Loan Funding and Servicing Agreement.

The Borrower expressly waives presentment, demand,

diligence, protest and all notices of any kind whatsoever with respect to this

VFCC Structured Note.

All amounts evidenced by this VFCC Structured Note,

the Advances, Advances Outstanding and all payments and prepayments of the

principal hereof and the respective dates and maturity dates thereof shall be

endorsed by the Deal Agent, as agent for the Lenders, 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 in its internal

books or records or computer system; provided, however, that

the failure of the Deal Agent to make such a notation or recordation shall not

in any way limit or otherwise affect the obligations of the Borrower under this

VFCC Structured Note as provided in the Loan Funding and Servicing Agreement.

The holder or holders hereof may sell, assign,

transfer, negotiate, grant participations in or otherwise dispose of all or any

portion of any Advance, Advances Outstanding or the Commitment represented by

this VFCC Structured Note. All transfers and pledges of this VFCC Structured

Note must be done in compliance with the Securities Act, applicable state securities

laws and Article 8 of the UCC.

This VFCC Structured Note is secured by the security

interests granted pursuant to Section 2.9

of the Loan Funding and Servicing Agreement. The holder or holders of this VFCC

Structured Note are entitled to the benefits of the Loan Funding and Servicing

Agreement and may enforce the agreements of the Borrower contained in the Loan

Funding and Servicing Agreement and exercise the remedies provided for by, or

otherwise available in respect of, the Loan Funding and Servicing Agreement,

all in accordance with, and subject to the restrictions contained in, the terms

of the Loan Funding and Servicing Agreement. If a Termination Event shall occur

and the Termination Date has been declared or has otherwise occurred, 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 Loan Funding and Servicing Agreement.

 

3

 

This VFCC Structured Note is one of the “Structured Notes” referred to in Section 2.5 of the Loan Funding and Servicing

Agreement. THIS VFCC STRUCTURED NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND

GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

This VFCC Structured Note is intended to be and is a

replacement of the VFCC Structured Note, dated March 31, 1999, in the maximum

principal amount of $225,000,000 (the “Replaced

Note”‘). This VFCC Structured Note evidences the same indebtedness

and is secured by the same Collateral securing the Replaced Note and is not

intended to constitute a novation in any manner.

[Remainder of Page

Intentionally Left Blank]

 

4

 

IN WITNESS WHEREOF, the undersigned has executed this

VFCC Structured Note as on the date first written above.

	

   

  	

  ACS

  FUNDING TRUST I

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  

 

5

 

	

  Schedule attached to Amended, Restated and

  Substituted VFCC Structured Note dated March 31, 1999 of ACS Funding Trust I

  payable to the order of First Union Securities, Inc., as the Deal Agent

  
	

  Advances

  Outstanding as of June24, 2002

  (Date of

  Amendment No. 10)

  	

  $

  	

   

  	

   

  	

   

  
	

   

  	

   

  
	

  Date of Advance or Repayment 

  	

  Principal Amount of Advance

  	

  Principal Amount of Repayment

  	

  Advances Outstanding

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
								

 

6

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