Second Amendment to Credit Agreement among American Capital, Ltd. and Lenders (September 29, 2008)

EXECUTION VERSION

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment"), dated as of September 29, 2008, is by and among AMERICAN CAPITAL, LTD., a Delaware corporation (the "Borrower") and each of the banks and other financial institutions identified as Lenders on the signature pages hereto (the "Lenders").

WHEREAS, pursuant to the Credit Agreement, dated as of May 16, 2007 (as amended, supplemented or otherwise modified prior to the date hereof, the "Existing Credit Agreement" and, as amended by this Second Amendment and as the same may be further amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lenders party thereto and Wachovia Bank, National Association, a national banking association, as administrative agent for the Lenders (in such capacity, the "Administrative Agent" or the "Agent"), the Lenders have made commitments to extend certain credit facilities to the Borrower; and

WHEREAS, the Borrower has requested that the Lenders agree to amend certain provisions of the Existing Credit Agreement as more specifically set forth herein, in each case upon the terms and conditions contained in this Second Amendment;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the agreements herein contained, the parties hereby agree as follows:

PART I
DEFINITIONS

SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or the context otherwise requires, the following terms used in this Second Amendment, including its preamble and recitals, have the following meanings:

SUBPART 1.2 Other Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Second Amendment, including its preamble and recitals, have the meanings provided in the Credit Agreement.

PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT

Effective on (and subject to the occurrence of) the Second Amendment Effective Date, the Existing Credit Agreement is hereby amended in accordance with this Part II. Except as so amended, the Existing Credit Agreement and the other Credit Documents shall continue in full force and effect.

SUBPART 2.1 Amendment to Section 1.1. Section 1.1 of the Existing Credit Agreement is hereby amended as follows:

"Applicable Percentage" means, (a) for Index Rate Loans, Sterling Base Rate Loans, Euro Base Rate Loans and U.S. Swingline Loans, the percentage set forth below opposite the Applicable Rating in the column labeled "Applicable Percentage for Index Rate Loans, Sterling Base Rate Loans, Euro Base Rate Loans and U.S. Swingline Loans", (b) for U.S. Base Rate Loans and Canadian Base Rate Loans, the percentage set forth below opposite the Applicable Rating in the column labeled "Applicable Percentage for U.S. Base Rate Loans and Canadian Base Rate Loans", and (c) for the Commitment Fee, the percentage set forth below opposite the Applicable Rating in the column labeled "Commitment Fee", as applicable.

On the Second Amendment Effective Date the Applicable Percentages shall be determined based upon the Applicable Ratings specified in the certificate delivered pursuant to Subpart 3.3 of the Second Amendment. Thereafter, each change in the Applicable Percentages resulting from a publicly announced change in the Applicable Ratings shall be effective, in the case of an upgrade, during the period commencing on the date of delivery by the Borrower to the Administrative Agent of notice thereof pursuant to Section 5.7(f) and ending on the date immediately preceding the effective date of the next change in accordance with this definition and, in the case of a downgrade, during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next change in accordance with this definition.

"Commitment Termination Date" means March 31, 2011.

"Extension of Credit" means, as to any Lender or Issuing Lender, the making of a Loan by such Lender; the issuance, amendment, extension or renewal of, or participation in, a Letter of Credit by such Lender.

SUBPART 2.2 Amendment to Section 2.1(a). Section 2.1(a) of the Existing Credit Agreement is hereby amended by amending and restating the second sentence thereof as follows:

SUBPART 2.3 Amendment to Section 2.2. Section 2.2 of the Existing Credit Agreement is hereby amended in its entirety to read as follows: "[Intentionally Omitted]."

SUBPART 2.4 Amendment to Section 5.9(b). Section 5.9(b) of the Existing Credit Agreement is hereby amended by amending and restating such section in its entirety as follows:

SUBPART 2.5 Amendment to Article VI. Article VI of the Existing Credit Agreement is hereby amended by amending and restating in its entirety the introductory paragraph thereof as follows:

SUBPART 2.6 Amendment to Article VI. Article VI of the Existing Credit Agreement is hereby further amended by adding the following Section 6.11 thereto:

SUBPART 2.7 Amendment to Section 6.1(h). Section 6.1(h) of the Existing Credit Agreement is hereby amended by amending and restating such section in its entirety as follows:

SUBPART 2.8 Amendment to Schedule 2.1(a). Schedule 2.1(a) of the Existing Credit Agreement is hereby amended by amending and restating it in its entirety with Exhibit A attached hereto.

PART III
CONDITIONS TO EFFECTIVENESS

SUBPART 3.1 Amendment Effective Date. This Second Amendment shall be and become effective as of the date hereof (the "Second Amendment Effective Date") when all of the conditions set forth in this Part III shall have been satisfied.

SUBPART 3.2 Execution of Counterparts of Second Amendment. The Administrative Agent shall have received counterparts satisfactory to the Administrative Agent of this Second Amendment, which collectively shall have been duly executed on behalf of the Borrower and the requisite Lenders.

SUBPART 3.3 Officer's Certificate. The Administrative Agent shall have received a certificate executed by a Responsible Officer of the Borrower as of the Second Amendment Effective Date stating the Applicable Ratings in effect on the Second Amendment Effective Date.

SUBPART 3.4 Authority Documents. The Administrative Agent shall have received the following:

SUBPART 3.5 Representations and Warranties. The representations and warranties contained in Subpart 4.4 are true and correct in all material respects on and as of the date hereof.

SUBPART 3.6 Costs and Expenses, etc. The Administrative Agent shall have received for its account and the account of each Lender, all fees, costs and expenses due and payable pursuant to Sections 2.5 and 9.5 of the Credit Agreement, if then invoiced.

SUBPART 3.7 Amendment Fee. The payment by the Borrower to each Lender that executes and delivers this Second Amendment on or prior to 3:00 PM (New York time), September 29, 2008 of an amendment fee in an amount equal to fifty (50) basis points multiplied by the principal amount of such Lender's Commitment, after giving effect to the reduction in the Committed Amount on the Second Amendment Effective Date.

PART IV
MISCELLANEOUS

SUBPART 4.1 Cross-References. References in this Second Amendment to any Part or Subpart are, unless otherwise specified, to such Part or Subpart of this Second Amendment.

SUBPART 4.2 Instrument Pursuant to Existing Credit Agreement. This Second Amendment is a Credit Document executed pursuant to the Existing Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with the terms and provisions of the Existing Credit Agreement.

SUBPART 4.3 References in Other Credit Documents. At such time as this Second Amendment shall become effective pursuant to the terms of Part III, all references in the Credit Documents to the "Credit Agreement" shall be deemed to refer to the Existing Credit Agreement as amended by this Second Amendment.

SUBPART 4.4 Representations and Warranties of the Borrower. The Borrower hereby represents and warrants that (a) it has the requisite power and authority to execute, deliver and perform this Second Amendment, (b) it is duly authorized to, and has been authorized by all necessary action, to execute, deliver and perform this Second Amendment, (c) the representations and warranties contained in Article III of the Credit Agreement are true and correct in all material respects on and as of the date hereof as though made on and as of such date and after giving effect to the amendment contained herein (except for those which expressly relate to an earlier date) and (d) no Default or Event of Default exists under the Credit Agreement on and as of the date hereof after giving effect to the amendments contained herein.

SUBPART 4.5 Counterparts. This Second Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of executed counterparts of this Second Amendment by telecopy or other electronic transmission shall be effective as an original and shall constitute a representation that an original will be delivered.

SUBPART 4.6 Governing Law. THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SUBPART 4.7 Successors and Assigns. This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

Each of the parties hereto has caused a counterpart of this Second Amendment to be duly executed and delivered as of the date first above written.