Exhibit 10.8

 

FIRST AMENDMENT TO LOAN FUNDING AND SERVICING AGREEMENT

(Fairway Finance Company Transaction with ACS Funding Trust II)

 

THIS FIRST AMENDMENT TO THE LOAN FUNDING AND SERVICING AGREEMENT, dated as of
August 25, 2004 (this “First Amendment”), is entered into by and among ACS
FUNDING TRUST II, a Delaware statutory trust, as the borrower (together with its
successors and assigns in such capacity, the “Borrower”), AMERICAN CAPITAL
STRATEGIES, LTD., a Delaware corporation, as the servicer (together with its
successors and assigns in such capacity, the “Servicer”), FAIRWAY FINANCE
COMPANY, LLC, a Delaware limited liability company, as the conduit lender
(together with its successors and assigns in such capacity, the “Conduit
Lender”), HARRIS NESBITT CORP., a Delaware corporation (“Harris Nesbitt”), as
the Agent (together with its successors and assigns in such capacity, the
“Agent”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, not in its individual capacity, but solely as the backup servicer
(together with its successors and assigns in such capacity, the “Backup
Servicer”) and as the collateral custodian (together with its successors and
assigns in such capacity, the “Collateral Custodian”). 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 June 30, 2004 (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 following definitions in Section 1.1 of the Agreement are hereby amended
as described below:

 

(1) Clause (m) of the definition of “Concentration Limits” is hereby replaced in
its entirety as follows:

 

“(m) the sum of the Outstanding Loan Balances of Eligible Loans which are
Subordinated Loans and Junior Subordinated Loans (calculated without
duplication) shall not exceed 85%;”;

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(2) Clause (ii) of the definition of “Eligible Obligor” is hereby amended and
restated in its entirety as follows:

 

“(ii) such Obligor is not a natural person and is a legal operating entity, duly
organized and validly existing under the laws of its jurisdiction of
organization and its principal office and any Related Property is located in (a)
the United States or (b) subject to approval by the Agent after receipt and
review of satisfactory legal due diligence and receipt of a Ratings Confirmation
with respect to the inclusion of the applicable Loan in the Collateral, any
other country or any territory of the United States;”

 

(3) Clause (ii) of the definition of “Hedge Amount” is hereby amended by
deleting the words “, unless otherwise consented to by the Agent”;

 

(4) The definition of “Liquidity Purchase Agreement” is hereby amended and
restated in its entirety as follows:

 

“Liquidity Purchase Agreement: The Liquidity Asset Purchase Agreement, dated as
of August 25, 2004 by and among Fairway, as the issuer, the Liquidity Banks
named therein, Bank of Montreal, as liquidity agent, and Harris Nesbitt, as the
servicing agent, as such agreement may be amended, modified, waived, supplement
or restated from time to time, which shall have an initial term of 308 days from
the First Amendment Effective Date.”

 

(5) The definition of “Payment Date” is hereby amended and restated in its
entirety as follows:

 

“Payment Date: The 16th day of each calendar month or, if such day is not a
Business Day, the next succeeding Business Day, commencing July 16, 2004.”.

 

(6) Clause (c) of the definition of “Termination Date” is hereby amended and
restated in its entirety as follows:

 

“(c) the date on which the Liquidity Purchase Agreement shall expire in
accordance with its terms on June 29, 2005 and fail to be renewed for an
additional period of 364 days pursuant to subsection 2.1(d)”.

 

(b) A new definition of “First Amendment Effective Date” is hereby inserted in
alphabetical sequence in Section 1.1 of the Agreement as follows:

 

“First Amendment Effective Date: The “Effective Date” under, and as defined in,
the First Amendment to this Agreement, dated as of August 25, 2004, by and among
the Borrower, the Servicer, the Conduit Lender, the Agent and the Collateral
Custodian and Backup Servicer.”

 

(c) Section 2.1(d) of the Agreement is hereby amended by replacing, in clause
(ii) of the first sentence thereof, the words “as provided in Section 3.1(e)”
with the words “of the facility contemplated by this Agreement, as assigned on
the Closing Date in the case of S&P and as assigned within four days after the
First Amendment Effective Date in the case of Moody’s,”.

 

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(d) Section 9.1(d) of the Agreement is hereby amended by replacing the words “at
least “A2”“ with the words “at least “A3”“.

 

SECTION 2. 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 First 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 First Amendment shall
not constitute a novation of the Agreement, but shall constitute an amendment
thereof. This First Amendment shall not be deemed to expressly or impliedly
waive, amend or supplement any provision of the Agreement other than as
expressly set forth herein.

 

SECTION 3. REPRESENTATIONS.

 

Each of the Borrower and Servicer represent and warrant as of the date of this
First 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 First 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 First Amendment by or against it;

 

(iv) this First Amendment has been duly executed and delivered by it;

 

(v) this First 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.

 

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SECTION 4. CONDITIONS TO EFFECTIVENESS.

 

This First Amendment shall become effective on the date on which each party
hereto has delivered an executed signature page hereto to the Agent (such date,
the “Effective Date”).

 

SECTION 5. MISCELLANEOUS.

 

(a) This First 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 First 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 First 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 First Amendment.

 

(e) Whenever the context and construction so require, all words used in the
singular number herein shall be deemed to have been used in the plural, and vice
versa, and the masculine gender shall include the feminine and neuter and the
neuter shall include the masculine and feminine.

 

(f) This First Amendment represents the final agreement between the parties only
with respect to the subject matter expressly covered hereby 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 FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS FIRST 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]

 

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

 

ACS FUNDING TRUST II, as the Borrower

By:

 

/s/ Malon Wilkus

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Name:

 

Malon Wilkus

Title:

 

Beneficiary Trustee

 

ACS Funding Trust II

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

 

AMERICAN CAPITAL STRATEGIES, LTD.,

as the Servicer

By:

 

/s/ John R. Erickson

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Name:

 

John R. Erickson

Title:

 

Executive Vice President, CFO and Secretary

 

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]

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FAIRWAY FINANCE COMPANY, LLC,

as the Conduit Lender

By:

 

/s/ Jill A. Gordon

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Name:

 

Jill A. Gordon

Title:

 

Vice President

 

Fairway Finance Company, LLC

c/o Lord Securities Corporation

48 Wall Street, 27th Floor

New York, New York 10005

Attention:

   

Facsimile No.

 

(212) 346-9012

Telephone No.

 

(212) 346-9000

With a copy to:

c/o Harris Nesbitt Corp.

115 South LaSalle Street

13th Floor West

Chicago, Illinois 60603

Attention:

 

Kevin Gibbons

Facsimile No.

 

(312) 293-4908

Telephone No.

 

(312) 461-5542

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

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HARRIS NESBITT CORP., as the Agent

By:

 

/s/ Kevin P. Gibbons

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Name:

 

Kevin P. Gibbons

Title:

 

Managing Director

 

By:

 

 

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Name:

   

Title:

   

 

Harris Nesbitt Corp.

115 South LaSalle Street

13th Floor West

Chicago, Illinois 60603

Attention:

  Kevin Gibbons

Facsimile No.

  (312) 293-4908

Telephone No.

  (312) 461-5542

 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

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WELLS FARGO BANK, NATIONAL

ASSOCIATION, as the Backup Servicer and as the

Collateral Custodian

By:

 

/s/ Edna Barber

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Name:

 

Edna Barber

Title:

 

Assistant Vice President

 

Wells Fargo Bank, National Association

MAC N9311-161

Sixth Street and Marquette Avenue

Minneapolis, MN 55479

Attention:

  Corporate Trust Services     Asset-Backed Administration

Facsimile No.:

  (612) 667-3539

Confirmation No.:

  (612) 667-8058