Document:

exv10w52

 

Exhibit 10.52

	 	 	 
	

	 	Master Repurchase
Agreement

September 1996 Version

	 	 	 
	Dated as of

	 	December 28, 2005
	 
	Between:

	 	Credit Suisse First Boston LLC
	 
	and

	 	CSE Mortgage LLC

	1.	 	Applicability
	 
	 	 	From time to time the parties hereto may enter into transactions in which one party
(“Seller”) agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”)
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to
Seller such Securities at a date certain or on demand, against the transfer of funds by Seller.
Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise
agreed in writing, shall be governed by this Agreement, including any supplemental terms or
conditions contained in Annex I hereto and in any other annexes identified herein or therein as
applicable hereunder.
	 
	2.	 	Definitions

	 	(a)	 	“Act of Insolvency”, with respect to any party, (i) the commencement by such party as
debtor of any case or proceeding under any bankruptcy, insolvency, reorganization,
liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the
appointment or election of a receiver, conservator, trustee, custodian or similar official
for such party or any substantial part of its property, or the convening of any meeting of
creditors for purposes of commencing any such case or proceeding or seeking such an
appointment or election, (ii) the commencement of any such case or proceeding against such
party, or another seeking such an appointment or election, or the filing against a party of
an application for a protective decree under the provisions of the Securities Investor
Protection Act of 1970, which (A) is consented to or not timely contested by such party,
(B) results in the entry of an order for relief, such an appointment or election, the
issuance of such a protective decree or the entry of an order having a similar effect, or
(C) is not dismissed within 15 days, (iii) the making by such party of a general assignment
for the benefit of creditors, or (iv) the admission in writing by such party of such
party’s inability to pay such party’s debts as they become due;
	 
	 	(b)	 	“Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to
Paragraph 4(a) hereof;

 

 

	 	(c)	 	“Buyer’s Margin Amount”, with respect to any Transaction as of any date, the amount
obtained by application of the Buyer’s Margin Percentage to the Repurchase Price for
such Transaction as of such date;
	 
	 	(d)	 	“Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a
percentage (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and
Seller or, in the absence of any such agreement, the percentage obtained by dividing the
Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the
Purchase Date for such Transaction;
	 
	 	(e)	 	“Confirmation”, the meaning specified in Paragraph 3(b) hereof;
	 
	 	(f)	 	“Income”, with respect to any Security at any time, any principal thereof and all
interest, dividends or other distributions thereon;
	 
	 	(g)	 	“Margin Deficit”, the meaning specified in Paragraph 4(a) hereof;
	 
	 	(h)	 	“Margin Excess”, the meaning specified in Paragraph 4(b) hereof;
	 
	 	(i)	 	“Margin Notice Deadline”, the time agreed to by the parties in the relevant
Confirmation, Annex I hereto or otherwise as the deadline for giving notice requiring
same-day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof
(or, in the absence of any such agreement, the deadline for such purposes established in
accordance with market practice);
	 
	 	(j)	 	“Market Value”, with respect to any Securities as of any date, the price for such
Securities on such date obtained from a generally recognized source agreed to by the
parties or the most recent closing bid quotation from such a source, plus accrued Income to
the extent not included therein (other than any Income credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5 hereof ) as of such date
(unless contrary to market practice for such Securities);
	 
	 	(k)	 	“Price Differential”, with respect to any Transaction as of any date, the aggregate
amount obtained by daily application of the Pricing Rate for such Transaction to the
Purchase Price for such Transaction on a 360 day per year basis for the actual number of
days during the period commencing on (and including) the Purchase Date for such Transaction
and ending on (but excluding) the date of determination (reduced by any amount of such
Price Differential previously paid by Seller to Buyer with respect to such Transaction);
	 
	 	(l)	 	“Pricing Rate”, the per annum percentage rate for determination of the Price
Differential;
	 
	 	(m)	 	“Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street
Journal (or, if more than one such rate is published, the average of such rates);
	 
	 	(n)	 	“Purchase Date”, the date on which Purchased Securities are to be transferred by Seller
to Buyer;

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	 	(o)	 	“Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are
transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree
otherwise, such price increased by the amount of any cash transferred by Buyer to Seller
pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by
Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller’s obligations
under clause (ii) of Paragraph 5 hereof;
	 
	 	(p)	 	“Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction
hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof.
The term “Purchased Securities” with respect to any Transaction at any time also shall
include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and
shall exclude Securities returned pursuant to Paragraph 4(b) hereof;
	 
	 	(q)	 	“Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities
from Buyer, including any date determined by application of the provisions of Paragraph 3(c)
or 11 hereof;
	 
	 	(r)	 	“Repurchase Price”, the price at which Purchased Securities are to be transferred from
Buyer to Seller upon termination of a Transaction, which will be determined in each case
(including Transactions terminable upon demand) as the sum of the Purchase Price and the
Price Differential as of the date of such determination;
	 
	 	(s)	 	“Seller’s Margin Amount”, with respect to any Transaction as of any date, the amount
obtained by application of the Seller’s Margin Percentage to the Repurchase Price for
such Transaction as of such date;
	 
	 	(t)	 	“Seller’s Margin Percentage”, with respect to any Transaction as of any date, a
percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and
Seller or, in the absence of any such agreement, the percentage obtained by dividing the
Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the
Purchase Date for such Transaction.

	3.	 	Initiation; Confirmation; Termination

	 	(a)	 	An agreement to enter into a Transaction may be made orally or in writing at the
initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the
Purchased Securities shall be transferred to Buyer or its agent against the transfer of the
Purchase Price to an account of Seller.
	 
	 	(b)	 	Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall
be agreed, shall promptly deliver to the other party a written confirmation of each
Transaction (a “Confirmation”). The Confirmation shall describe the Purchased
Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the
Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the
Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price
applicable to the Transaction, and (v) any additional terms or conditions of the
Transaction not inconsistent with this Agreement. The Confirmation, together with this
Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller
with respect to the Transaction to which the Confirmation relates, unless

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	 	 	 	with respect to the Confirmation specific objection is made promptly after receipt
thereof. In the event of any conflict between the terms of such Confirmation and this
Agreement, this Agreement shall prevail.
	 
	 	(c)	 	In the case of Transactions terminable upon demand, such demand shall be made by
Buyer or Seller, no later than such time as is customary in accordance with market practice,
by telephone or otherwise on or prior to the business day on which such termination will be
effective. On the date specified in such demand, or on the date fixed for termination in the
case of Transactions having a fixed term, termination of the Transaction will be effected by
transfer to Seller or its agent of the Purchased Securities and any Income in respect
thereof received by Buyer (and not previously credited or transferred to, or applied to the
obligations of, Seller pursuant to Paragraph 5 hereof ) against the transfer of the
Repurchase Price to an account of Buyer.

	4.	 	Margin Maintenance

	 	(a)	 	If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Buyer is less than the
aggregate Buyer’s Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer
may by notice to Seller require Seller in such Transactions, at Seller’s option, to transfer
to Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional Purchased
Securities”), so that the cash and aggregate Market Value of the Purchased Securities,
including any such Additional Purchased Securities, will thereupon equal or exceed such
aggregate Buyer’s Margin Amount (decreased by the amount of any Margin Deficit as of such
date arising from any Transactions in which such Buyer is acting as Seller).
	 
	 	(b)	 	If at any time the aggregate Market Value of all Purchased Securities subject to all
Transactions in which a particular party hereto is acting as Seller exceeds the aggregate
Seller’s Margin Amount for all such Transactions at such time (a “Margin Excess”), then
Seller may by notice to Buyer require Buyer in such Transactions, at Buyer’s option, to
transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the
Purchased Securities, after deduction of any such cash or any Purchased Securities so
transferred, will thereupon not exceed such aggregate Seller’s Margin Amount (increased by
the amount of any Margin Excess as of such date arising from any Transactions in which such
Seller is acting as Buyer).
	 
	 	(c)	 	If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph
at or before the Margin Notice Deadline on any business day, the party receiving such
notice shall transfer cash or Additional Purchased Securities as provided in such
subparagraph no later than the close of business in the relevant market on such day. If any
such notice is given after the Margin Notice Deadline, the party receiving such notice shall
transfer such cash or Securities no later than the close of business in the relevant market
on the next business day following such notice.
	 
	 	(d)	 	Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions
as shall be agreed upon by Buyer and Seller.

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	 	(e)	 	Seller and Buyer may agree, with respect to any or all Transactions hereunder, that
the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this
Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case
may be, exceeds a specified dollar amount or a specified percentage of the Repurchase
Prices for such Transactions (which amount or percentage shall be agreed to by Buyer
and Seller prior to entering into any such Transactions).
	 
	 	(f)	 	Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the
respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph
to require the elimination of a Margin Deficit or a Margin Excess, as the case may be,
may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any
single Transaction hereunder (calculated without regard to any other Transaction
outstanding under this Agreement).

	5.	 	Income Payments
	 
	 	 	Seller shall be entitled to receive an amount equal to all Income paid or distributed on
or in respect of the Securities that is not otherwise received by Seller, to the full extent it would
be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may
agree with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall
reasonably determine in its discretion), on the date such Income is paid or distributed either
(i) transfer to or credit to the account of Seller such Income with respect to any Purchased
Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the
Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller
upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant
to the preceding sentence (A) to the extent that such action would result in the creation of a
Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash
or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an
Event of Default with respect to Seller has occurred and is then continuing at the time such
Income is paid or distributed.
	 
	6.	 	Security Interest
	 
	 	 	Although the parties intend that all Transactions hereunder be sales and purchases and not
loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to
have pledged to Buyer as security for the performance by Seller of its obligations under each
such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of
the Purchased Securities with respect to all Transactions hereunder and all Income thereon and
other proceeds thereof.
	 
	7.	 	Payment and Transfer
	 
	 	 	Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately
available funds. All Securities transferred by one party hereto to the other party (i) shall be
in suitable form for transfer or shall be accompanied by duly executed instruments of transfer
or assignment in blank and such other documentation as the party receiving possession may
reasonably request, (ii) shall be transferred on the book-entry system of a Federal Reserve
Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and
Buyer.

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	8.	 	Segregation of Purchased Securities
	 
	 	 	To the extent required by applicable law, all Purchased Securities in the possession of
Seller shall be segregated from other securities in its possession and shall be identified as
subject to this Agreement. Segregation may be accomplished by appropriate identification on the
books and records of the holder, including a financial or securities intermediary or a clearing
corporation. All of Seller’s interest in the Purchased Securities shall pass to Buyer on the
Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall
preclude Buyer from engaging in repurchase transactions with the Purchased Securities or
otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no
such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to
Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer’s obligation to credit or pay
Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.

 

Required Disclosure for Transactions in Which the Seller

Retains Custody of the Purchased Securities

Seller is not permitted to substitute other securities for those subject
to this
Agreement and therefore must keep Buyer’s securities segregated at all times, unless
in this Agreement Buyer grants Seller the right to substitute other securities. If
Buyer grants the right to substitute, this means that Buyer’s securities will likely be
commingled with Seller’s own securities during the trading day. Buyer is advised
that, during any trading day that Buyer’s securities are commingled with Seller’s
securities, they [will]* [may]** be subject to liens granted by Seller to [its clearing
bank]* [third parties]** and may be used by Seller for deliveries on other securities
transactions. Whenever the securities are commingled, Seller’s ability to resegregate
substitute securities for Buyer will be subject to Seller’s ability to satisfy
[the clearing] *[any]** lien or to obtain substitute securities.

* Language to be used under 17 C.F.R. ß403.4(e) if Seller is a
government securities broker or dealer other than a financial institution.

** Language to be used under 17 C.F.R. ß403.5(d) if Seller is a financial institution.

	9.	 	Substitution

	 	(a)	 	Seller may, subject to agreement with and acceptance by Buyer, substitute other
Securities for any Purchased Securities. Such substitution shall be made by transfer to
Buyer of such other Securities and transfer to Seller of such Purchased Securities. After
substitution, the substituted Securities shall be deemed to be Purchased Securities.
	 
	 	(b)	 	In Transactions in which Seller retains custody of Purchased Securities, the parties
expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this
Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of
other Securities for Purchased Securities; provided, however, that such other Securities
shall have a Market Value at least equal to the Market Value of the Purchased Securities
for which they are substituted.

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	10.	 	Representations
	 
	 	 	Each of Buyer and Seller represents and warrants to the other that (i) it is duly
authorized to execute and deliver this Agreement, to enter into Transactions contemplated
hereunder and to perform its obligations hereunder and has taken all necessary action to
authorize such execution, delivery and performance, (ii) it will engage in such Transactions
as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in
advance of any Transaction by the other party hereto, as agent for a disclosed principal),
(iii) the person signing this Agreement on its behalf is duly authorized to do so on its
behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations
of any governmental body required in connection with this Agreement and the Transactions
hereunder and such authorizations are in full force and effect and (v) the execution, delivery
and performance of this Agreement and the Transactions hereunder will not violate any law,
ordinance, charter, by-law or rule applicable to it or any agreement by which it is bound or
by which any of its assets are affected. On the Purchase Date for any Transaction Buyer and
Seller shall each be deemed to repeat all the foregoing representations made by it.

	11.	 	Events of Default
	 
	 	 	In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased
Securities
upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer
Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to
comply with Paragraph 4 hereof, (iv) Buyer fails, after one business day’s notice, to comply
with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi)
any representation made by Seller or Buyer shall have been incorrect or untrue in any material
respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or
Buyer shall admit to the other its inability to, or its intention not to, perform any of its
obligations hereunder (each an “Event of Default”):

	 	(a)	 	The nondefaulting party may, at its option (which option shall be deemed to have
been exercised immediately upon the occurrence of an Act of Insolvency), declare an Event
of Default to have occurred hereunder and, upon the exercise or deemed exercise of such
option, the Repurchase Date for each Transaction hereunder shall, if it has not already
occurred, be deemed immediately to occur (except that, in the event that the Purchase
Date for any Transaction has not yet occurred as of the date of such exercise or deemed
exercise, such Transaction shall be deemed immediately canceled). The nondefaulting party
shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting
party of the exercise of such option as promptly as practicable.
	 
	 	(b)	 	In all Transactions in which the defaulting party is acting as Seller, if the
nondefaulting party exercises or is deemed to have exercised the option referred to in
subparagraph (a) of this Paragraph, (i) the defaulting party’s obligations in such
Transactions to repurchase all Purchased Securities, at the Repurchase Price therefor on
the Repurchase Date deter-mined in accordance with subparagraph (a) of this Paragraph,
shall thereupon become immediately due and payable, (ii) all Income paid after such
exercise or deemed exercise shall be retained by the nondefaulting party and applied to
the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting
party hereunder, and (iii) the defaulting party shall immediately deliver to the
nondefaulting party any Purchased Securities subject to such Transactions then in the
defaulting party’s possession or control.

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	 	(c)	 	In all Transactions in which the defaulting party is acting as Buyer, upon tender by
the nondefaulting party of payment of the aggregate Repurchase Prices for all such
Transactions, all right, title and interest in and entitlement to all Purchased Securities
subject to such Transactions shall be deemed transferred to the nondefaulting party, and
the defaulting party shall deliver all such Purchased Securities to the nondefaulting
party.
	 
	 	(d)	 	If the nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Paragraph, the nondefaulting party, without prior
notice to the defaulting party, may:

	 	(i)	 	as to Transactions in which the defaulting party is acting as Seller, (A)
immediately sell, in a recognized market (or otherwise in a commercially reasonable
manner) at such price or prices as the nondefaulting party may reasonably deem
satisfactory, any or all Purchased Securities subject to such Transactions and apply
the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts
owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu
of selling all or a portion of such Purchased Securities, to give the defaulting
party credit for such Purchased Securities in an amount equal to the price therefor
on such date, obtained from a generally recognized source or the most recent closing
bid quotation from such a source, against the aggregate unpaid Repurchase Prices and
any other amounts owing by the defaulting party hereunder; and
	 
	 	(ii)	 	as to Transactions in which the defaulting party is acting as Buyer, (A)
immediately purchase, in a recognized market (or otherwise in a commercially
reasonable manner) at such price or prices as the nondefaulting party may reasonably
deem satisfactory, securities (“Replacement Securities”) of the same class and amount
as any Purchased Securities that are not delivered by the defaulting party to the
nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu
of purchasing Replacement Securities, to be deemed to have purchased Replacement
Securities at the price therefor on such date, obtained from a generally recognized
source or the most recent closing offer quotation from such a source.

	 	 	 	Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the
Securities subject to any Transaction hereunder are instruments traded in a recognized
market, (2) in the absence of a generally recognized source for prices or bid or offer
quotations for any Security, the nondefaulting party may establish the source therefor in
its sole discretion and (3) all prices, bids and offers shall be determined together with
accrued Income (except to the extent contrary to market practice with respect to the
relevant Securities).
	 
	 	(e)	 	As to Transactions in which the defaulting party is acting as Buyer, the
defaulting party shall be liable to the nondefaulting party for any excess of the price
paid (or deemed paid) by the nondefaulting party for Replacement Securities over the
Repurchase Price for the Purchased Securities replaced thereby and for any amounts
payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder.
	 
	 	(f)	 	For purposes of this Paragraph 11, the Repurchase Price for each Transaction
hereunder in respect of which the defaulting party is acting as Buyer shall not

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	 	 	 	increase above the amount of such Repurchase Price for such Transaction determined as
of the date of the exercise or deemed exercise by the nondefaulting party of the option
referred to in sub-paragraph (a) of this Paragraph.
	 
	 	(g)	 	The defaulting party shall be liable to the nondefaulting party for (i) the amount
of all
reasonable legal or other expenses incurred by the nondefaulting party in connection
with or as a result of an Event of Default, (ii) damages in an amount equal to the cost
(including all fees, expenses and commissions) of entering into replacement transactions
and entering into or terminating hedge transactions in connection with or as a result of
an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or
resulting from the occurrence of an Event of Default in respect of a Transaction.
	 
	 	(h)	 	To the extent permitted by applicable law, the defaulting party shall be liable to
the non-defaulting party for interest on any amounts owing by the defaulting party
hereunder, from the date the defaulting party becomes liable for such amounts hereunder
until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full
by the exercise of the nondefaulting party’s rights hereunder. Interest on any sum payable
by the defaulting party to the nondefaulting party under this Paragraph 11(h) shall be at
a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime
Rate.
	 
	 	(i)	 	The nondefaulting party shall have, in addition to its rights hereunder, any rights
otherwise available to it under any other agreement or applicable law.

	12.	 	Single Agreement
	 
	 	 	Buyer and Seller acknowledge that, and have entered hereinto and will enter into each
Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions
hereunder constitute a single business and contractual relationship and have been made in
consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of
its obligations in respect of each Transaction hereunder, and that a default in the performance
of any such obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply property held
by them in respect of any Transaction against obligations owing to them in respect of any other
Transactions hereunder and (iii) that payments, deliveries and other transfers made by either
of them in respect of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfers in respect of any other Transactions hereunder, and
the obligations to make any such payments, deliveries and other transfers may be applied
against each other and netted.

	13.	 	Notices and Other Communications
	 
	 	 	Any and all notices, statements, demands or other communications hereunder may be given by
a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address
specified in Annex II hereto, or so sent to such party at any other place specified in a notice
of change of address hereafter received by the other. All notices, demands and requests
hereunder may be made orally, to be confirmed promptly in writing, or by other communication as
specified in the preceding sentence.

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	14.	 	Entire Agreement; Severability
	 
	 	 	This Agreement shall supersede any existing agreements between the parties containing
general terms and conditions for repurchase transactions. Each provision and agreement herein
shall be treated as separate and independent from any other provision or agreement herein and
shall be enforceable notwithstanding the unenforceability of any such other provision or
agreement.

	15.	 	Non-assignability; Termination

	 	(a)	 	The rights and obligations of the parties under this Agreement and under any
Transaction shall not be assigned by either party without the prior written consent of the
other party, and any such assignment without the prior written consent of the other
party shall be null and void. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns. This Agreement may be terminated by either party upon
giving written notice to the other, except that this Agreement shall, notwithstanding such
notice, remain applicable to any Transactions then outstanding.
	 
	 	(b)	 	Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning,
charging or otherwise dealing with all or any part of its interest in any sum payable to
it under Paragraph 11 hereof.

	16.	 	Governing Law
	 
	 	 	This Agreement shall be governed by the laws of the State of New York without giving
effect to the conflict of law principles thereof.

	17.	 	No Waivers, Etc.
	 
	 	 	No express or implied waiver of any Event of Default by either party shall constitute a
waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall
constitute a waiver of its right to exercise any other remedy hereunder. No modification or
waiver of any provision of this Agreement and no consent by any party to a departure here-from
shall be effective unless and until such shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to give a notice
pursuant to Paragraph 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at
a later date.

	18.	 	Use of Employee Plan Assets

	 	(a)	 	If assets of an employee benefit plan subject to any provision of the Employee
Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by either party
hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party
prior to the Transaction. The Plan Party shall represent in writing to the other party
that the Transaction does not constitute a prohibited transaction under ERISA or is
otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall
not be required so to proceed.

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	 	(b)	 	Subject to the last sentence of subparagraph (a) of this Paragraph, any such
Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most
recent available audited statement of its financial condition and its most recent
subsequent unaudited statement of its financial condition.
	 
	 	(c)	 	By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to
represent to Buyer that since the date of Seller’s latest such financial statements, there
has been no material adverse change in Seller’s financial condition which Seller has not
disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited
statements of its financial condition as they are issued, so long as it is a Seller in any
out-standing Transaction involving a Plan Party.

	19.	 	Intent

	 	(a)	 	The parties recognize that each Transaction is a “repurchase agreement” as that term
is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as
the type of Securities subject to such Transaction or the term of such Transaction would
render such definition inapplicable), and a “securities contract” as that term is defined
in Section 741 of Title 11 of the United States Code, as amended (except insofar as the
type of assets subject to such Transaction would render such definition inapplicable).
	 
	 	(b)	 	It is understood that either party’s right to liquidate Securities delivered to it in
connec-tion with Transactions hereunder or to exercise any other remedies pursuant to
Paragraph 11 hereof is a contractual right to liquidate such Transaction as described in
Sections 555 and 559 of Title 11 of the United States Code, as amended.
	 
	 	(c)	 	The parties agree and acknowledge that if a party hereto is an “insured depository
insti-tution,” as such term is defined in the Federal Deposit Insurance Act, as amended
(“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that
term is defined in FDIA and any rules, orders or policy statements thereunder (except
insofar as the type of assets subject to such Transaction would render such definition
inapplicable).
	 
	 	(d)	 	It is understood that this Agreement constitutes a “netting contract” as defined in and
subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991
(“FDICIA”) and each payment entitlement and payment obligation under any Transaction
hereunder shall constitute a “covered contractual payment entitlement” or “covered
contractual payment obligation”, respectively, as defined in and subject to FDICIA (except
insofar as one or both of the parties is not a “financial institution” as that term is
defined in FDICIA).

	20.	 	Disclosure Relating to Certain Federal Protections
	 
	 	 	The parties acknowledge that they have been advised that:

	 	(a)	 	in the case of Transactions in which one of the parties is a broker or dealer registered
with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities
Exchange Act of 1934 (“1934 Act”), the Securities Investor Protection

11 •
September 1996 • Master Repurchase Agreement

 

 

	 	 	 	Corporation has taken the position that the provisions of the Securities
Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any
Transaction hereunder;
	 
	 	(b)	 	in the case of Transactions in which one of the parties is a government securities
broker or a government securities dealer registered with the SEC under Section 15C of the
1934 Act, SIPA will not provide protection to the other party with respect to any
Transaction hereunder; and
	 
	 	(c)	 	in the case of Transactions in which one of the parties is a financial institution, funds
held by the financial institution pursuant to a Transaction hereunder are not a deposit
and therefore are not insured by the Federal Deposit Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.

	 	 	 
	Credit Suisse First Boston LLC
	 	 
	 
	By: /s/ Louis J. Impellizeri
 

	 	 
	Name: Louis J. Impellizeri
	 	 
	Title: Vice President
	 	 
	 
	 	 
	CSE Mortgage LLC
	 	 
	 
	 	 
	By: /s/ Thomas A. Fink
 

	 	 
	Name: Thomas A. Fink
	 	 
	Title: Chief Financial Officer
	 	 

 

 

ANNEX I

Supplemental Terms and Conditions

This Annex I forms a part of the Master Repurchase Agreement dated as of December 28, 2005 (the
“Agreement”) between Credit Suisse First Boston LLC (“Party A”) and CSE Mortgage LLC (“Party B”).
Capitalized terms used but not defined in this Annex I shall have the meaning ascribed to them in
the Agreement.

     1. Other Applicable Annexes. In addition to this Annex I and Annex II, the following
Annexes and other supplements shall form part of the Agreement and shall be applicable thereunder:

     Reverse Repurchase Transaction Trade Terms

     2. Additional Definitions. The following additional subparagraphs shall be added
after Paragraph 2(t) of the Agreement:

“(u) “Business Day” or “business day”, with respect to any Transaction hereunder, a day on
which regular trading may occur in the principal market for the Purchased Securities subject
to such Transaction, which includes shortened trading days, days on which trades are
permitted to occur but do not in fact occur and days on which the Purchased Securities are
subject to percentage of movement or volume limitations; provided, however, that for
purposes of calculating Market Value, such term shall mean a day on which regular trading
occurs in the principal market for the assets the value of which is being determined.
Notwithstanding the foregoing, (i) for purposes of Paragraph 4 of the Agreement, “business
day” shall mean any day on which regular trading occurs in the principal market for any
Purchased Securities or for any assets constituting Additional Purchased Securities under
any outstanding Transaction hereunder and “next business day” shall mean the next day on
which a transfer of Additional Purchased Securities may be effected in accordance with
Paragraph 7 of the Agreement, and (ii) in no event shall a Saturday or Sunday be considered
a business day.

(v) “Investment Manager”, the meaning specified in Section 10 of this Annex I.

(w) “Margin Notice Deadline” means 10:00 A.M. New York time.”

(x) “Material Adverse Effect” means a material adverse effect on the financial condition,
business, assets or results of operations of CapitalSource Inc. (“CapitalSource”)
and its subsidiaries, taken as a whole.

     3. Additional Events of Default. Paragraph 11 of the Agreement is hereby amended by
deleting the word “or” before “(vii)” in the first paragraph thereof and by adding the following
additional Events of Default before the words “(each an “Event of Default”)”:

“(viii) there is a final determination for U.S. federal income tax purposes that
CapitalSource has failed to qualify as a real estate investment trust (a “REIT”) under
Section 856 of the Internal Revenue Code of 1986, as amended (the “Code”) for any taxable
year beginning on or after January 1, 2006, (ix) as of the last day of each calendar
quarter, the total shareholders’ equity of Party B and its affiliates shall be less than
$300,000,000 (determined in accordance with Generally Accepted Accounting Principles and by
reference to the unaudited balance sheet of Party B as of the last day of such calendar
quarter), (x) an Event of Default (as such term is defined under the ISDA Master Agreement,
as may be amended from time to time, executed between Party B and Credit Suisse First Boston
International occurs, with Party B being the defaulting party, (xi) as of the last day of
each calendar quarter, Party B’s total liabilities divided by total shareholders’ equity is
greater than or equal to a multiple of 20.0 (determined in accordance with Generally
Accepted Accounting Principles and by reference to the unaudited balance sheet of Party B as
of the last day of such calendar quarter), or (xii) Seller or Buyer, as

13

 

the case may be, fails to comply with or perform any agreement or obligation (other than
those agreements or obligations under Paragraphs 11(i) to 11(xi) above) to be complied with
or performed by such party in accordance with this Agreement and such failure is not
remedied on or before the thirtieth (30th) day after notice of such failure is
given to such party.”

     4. Relationship Between Parties. Each party will be deemed to represent to the other
party on the date on which it enters into a Transaction that (absent a written agreement between
the parties to the contrary for that Transaction):

(a) Non-Reliance. It is acting for its own account, and it has made its own independent
decisions to enter into that Transaction and as to whether that Transaction is appropriate
or proper for it based upon its own judgment and upon advice from such advisers as it has
deemed necessary. It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that Transaction; it being
understood that information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received from the other party shall be
deemed to be an assurance or guarantee as to the expected results of that Transaction.

(b) Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of that Transaction. It is also
capable of assuming, and assumes, the risks of that Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary for or an adviser to it
in respect of that Transaction.

(d) No Agency. It is entering into this Agreement, including each Transaction, as principal
and not as agent of any person or entity.

     5. Deliveries. Party B agrees to deliver to Party A at the address set forth in Annex
II:

(a) An audited annual financial statement for Party B with respect to each calendar year on
or before the 120th day following the end of such calendar year.

(b) An unaudited quarterly financial statement for Party B with respect to each calendar
quarter on or before the 45th day following the end of such calendar quarter. 

(c) A certificate of an authorized officer of Party B to the effect that based upon a review
of Party B’s activities and Party B’s financial statements during the period covered
thereby, to his or her knowledge there exists no Event of Default or event which, with the
giving of notice or lapse of time or both, would constitute an Event of Default, within
forty five (45) days following the end of each calendar quarter.

     6. Additional Representations, Warranties and Covenants. 

     (a) In addition to the representations contained in Paragraph 10 of the Agreement and
those set forth above in this Annex I, Party B represents and warrants to Party A, at all
times until the termination of the Agreement and in accordance with Paragraph 10 thereof,
that:

	 	(i)	 	beginning on January 1, 2006, which is the date from which
CapitalSource first expects to qualify as a REIT under the Code, CapitalSource
expects that it will be organized and operated in a manner so as to allow it to
achieve and maintain qualification as a REIT under the Code; and

14

 

	 	(ii)	 	the execution of the Agreement by Party B, the entry by Party B
into each Transaction and the performance by Party B of its obligations under
the Agreement and each Transaction will not result in CapitalSource failing to
qualify as a REIT under the Code.

     (b) Party B agrees that it will not take any action, directly or indirectly, during the
term of any Transaction that would render untrue any of the representations and warranties
in Paragraph 6(a) of this Annex I or Paragraph 10 of the Agreement. Party B further agrees
that if any event should occur or circumstance should exist that would render any of such
representations and warranties untrue, it shall promptly give notice thereof to Party A.

     7. Notices relating to REIT Status. Party B shall, upon receiving notice or otherwise
becoming aware of any actual change in tax law (whether or not yet effective) that is reasonably
expected by CapitalSource to both (A) affect CapitalSource’s qualification as a REIT under Section
856 of the Code and (B) have a Material Adverse Effect, promptly, but in any event within five (5)
business days, notify Party A thereof.

     8. JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE
EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY SUCH COURT, SOLELY FOR THE PURPOSE
OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS OBLIGATIONS HEREUNDER OR RELATING IN ANY
WAY TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREUNDER AND (B) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, ANY DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF
RESIDENCE OR DOMICILE.

          EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

     9. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE FOR PUNITIVE DAMAGES IN ANY WAY RELATED
TO THIS AGREEMENT AND EXCEPT AS PROVIDED IN PARAGRAPH 11(g) OF THE AGREEMENT, UNDER NO
CIRCUMSTANCES WILL EITHER PARTY, BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
LOSS OR DAMAGES SUFFERED OR INCURRED BY THE OTHER, OR ANY OTHER PARTY, IN EACH CASE ARISING UNDER
THIS AGREEMENT, REGARDLESS OF WHETHER SUCH DAMAGES COULD HAVE BEEN FORESEEN OR PREVENTED.

     10. Investment Manager as Agent. Party B represents and warrants that BlackRock
Financial Management Inc. (the "Investment Manager") has the power and authority (subject to the
terms, conditions, limitations and investment guidelines set forth in the Investment Manager
Agreement between Party B and the Investment Manager) to commit Party B to Transactions and
conclude such Transactions on Party B’s behalf. Until notified otherwise in writing by Party B,
Party A may rely on all representations and warranties of and actions by the Investment Manager in
relation to any such Transactions. For these purposes, Party B agrees to fully and unconditionally
indemnify Party A for any and all losses, damages, costs and expenses directly sustained by Party A
(including those incurred in unwinding any relevant hedging transactions) by reason of (i) its bona
fide reliance on the appointment by Party B of the Investment Manager as Party B’s agent to enter
into Transactions on its behalf, irrespective of the invalidity, unenforceability, termination or
revocation of such appointment (unless Party A has been previously notified in writing by Party B
of such invalidity, unenforceability, termination or revocation) or breach by the Investment
Manager of its terms or (ii) as a direct result of Party A’s bona fide reliance upon the
instructions, actions or ostensible authority of the Investment Manager.

15

 

     11. Minimum Transfer Amount. Paragraph 4(e) of the Agreement is hereby amended and
restated in its entirety to read as follows:

“(e) Seller and Buyer hereby agree, with respect to all Transactions hereunder, that the
respective rights of Buyer or Seller under subparagraphs (a) and (b) of this Paragraph may
be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds
USD$500,000.”

12. Purchase Price Maintenance.

(a) The parties agree that in any Transaction hereunder whose term extends over an Income
payment date for the Securities subject to such transaction, Buyer shall on the date such
income is paid transfer to or credit to the account of Seller an amount equal to such Income
payment or payments pursuant to Paragraph 5(i) of the Agreement and shall not apply the
Income payment or payments to reduce the amount to be transferred to Buyer or Seller upon
termination of the Transaction pursuant to Paragraph 5(ii) of the Agreement.

(b) Notwithstanding the definition of Purchase Price in Paragraph 2 of the Agreement and the
provisions of Paragraph 4 of the Agreement, the parties agree (i) that the Purchase Price
will not be increased or decreased by the amount of any cash transferred by one party to the
other pursuant to Paragraph 4 of the Agreement and (ii) that transfer of such cash shall be
treated as if it constituted a transfer of Securities (with a Market Value equal to the U.S.
dollar amount of such cash) pursuant to Paragraph 4(a) or (b), as the case may be (including
for purposes of the definition of “Additional Purchased Securities”).

(c) The parties agree that any cash transferred by Seller to Buyer pursuant to Paragraph 4
of the Agreement shall earn interest at a rate equal to the Fed Funds (Target) rate.

     13. Waiver of Immunity. To the extent that either party has or hereafter may acquire
any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction
of any court or from set off or any legal process (whether service or notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) with
respect to itself or any of its property, such party hereby irrevocably waives and agrees not to
plead or claim such immunity in respect of any action brought to enforce its obligations under the
Agreement or relating in any way to the Agreement or any Transaction under the Agreement.

     14. Resale of Purchased Securities. The parties hereto acknowledge that from time to
time the Purchased Securities may consist of Securities that have not been registered under the
United States Securities Act of 1933 (the “Securities Act”). Accordingly, Buyer agrees that if any
Purchased Securities consist of Securities that have not been registered under the Securities Act,
Buyer will not resell or otherwise transfer such Purchased Securities except in accordance with
Regulation S or Rule 144A or other available exemption under the Securities Act and in accordance
with all applicable laws and regulations in each jurisdiction in which it offers, sells or delivers
Purchased Securities. In addition, if any Purchased Securities consist of bearer debt securities
issued by a non-U.S. entity and if Buyer resells or otherwise transfers any such obligations, Buyer
agrees that it will do so only under procedures adequate to satisfy the restrictions of applicable
U.S. Treasury regulations relating to an original issuance of bearer bonds.

     15. Delivery by Buyer of Purchased Securities on Repurchase Date. For the avoidance
of doubt, Buyer and Seller hereby acknowledge and agree that on each Repurchase Date, Buyer shall
transfer back to Seller all right, title and interest to the exact same Purchased Securities that
were transferred to Buyer by Seller on the Purchase Date.

     16. 
 Intent.  Paragraph 19 of the Agreement is hereby amended by adding the
following:

16

 

“(e) For the avoidance of doubt, the parties clarify that they intend to treat each
Transaction as a secured financing transaction for purposes of U.S. federal income tax, and
agree for purposes of U.S. federal income tax not to act in a manner inconsistent with such
treatment of each Transaction. This shall not affect the characterization of the
Transactions as purchases and sales for all other purposes hereunder.”

     17. This Agreement and all Transactions hereunder shall be governed by the laws of the
State of New York.

	 	 	 	 	 	 	 	 
	CREDIT SUISSE FIRST BOSTON LLC	 	CSE MORTGAGE LLC
	 

	 	 	 	 	 	 
	By:

	 	/s/ Louis J. Impellizeri
	 	By:
	 	/s/ Thomas A. Fink
	 

	 	Name: Louis J. Impellizeri
	 	 	 	Name: Thomas A. Fink
	 

	 	Title: Vice President
	 	 	 	Title: Chief Financial Officer

17

 

ANNEX II

Names and Addresses for Communications Between Parties

FOR ALL NOTICES (OTHER THAN LEGAL NOTICES):

CREDIT SUISSE FIRST BOSTON LLC

Eleven Madison Avenue

New York, NY 10010-3629

	 	 	 	 	 
	Attn:	 	Catherine Needham
	 	 	Director — Credit Risk Management
	 

	 	Tel:
	 	212-325-0331
	 

	 	Fax:
	 	212-325-8232

FOR LEGAL NOTICES ONLY:

CREDIT SUISSE FIRST BOSTON LLC

One Madison Avenue, 9th Floor

New York, NY 10010-3629

	 	 	 	 	 
	Attn:	 	Louis J. Impellizeri
	 	 	Vice President – Legal and Compliance Department
	 

	 	Tel:
	 	(212) 325-4383
	 

	 	Fax:
	 	(917) 326-7930

COUNTERPARTY:

CSE MORTGAGE LLC

Contract Issues:

CSE Mortgage LLC

4445 Willard Ave. 12th Floor

Chevy Chase, MD 21815

Attn: General Counsel

Facsimile No.: 301-841-2380

Other Issues:

CSE Mortgage LLC

4445 Willard Ave. 12th Floor

Chevy Chase, MD 21815

Attn: Treasury

Facsimile No.: 301-841-2307

18exv10w53

 

Exhibit 10.53

Execution Version

FIFTH AMENDMENT TO AMENDED AND RESTATED SALE AND SERVICING AGREEMENT

     This Fifth Amendment (this “Amendment”) to the Amended and Restated Sale and Servicing
Agreement referenced below is entered into as of December 29, 2005, among CapitalSource Funding II
Trust, a Delaware statutory trust, as Issuer (the “Issuer”), CS Funding II Depositor LLC, a
Delaware limited liability company and successor by merger to CS Funding II Depositor Inc., a
Delaware corporation, (as successor-in-interest to CS Funding II Depositor LLC, a Delaware limited
liability company), as Depositor (in such capacity, the “Depositor”), CapitalSource Finance
LLC, a Delaware limited liability company (“CapitalSource”), as Loan Originator (in such
capacity, the “Loan Originator”) and as Servicer (in such capacity, the “Servicer”)
and Wells Fargo Bank, National Association, a national banking association, as Indenture Trustee on
behalf of the Noteholders (in such capacity, the “Indenture Trustee”), as Paying Agent (in
such capacity, the “Paying Agent”), as Collateral Custodian (in such capacity, the
“Collateral Custodian”) and as Backup Servicer (in such capacity, the “Backup
Servicer”).

R E C I T A L S:

     WHEREAS, the Issuer, the Depositor, CapitalSource, the Loan Originator, the Servicer, the
Indenture Trustee, the Paying Agent, the Collateral Custodian and the Backup Servicer are parties
to the Amended and Restated Sale and Servicing Agreement, dated as of September 17, 2003 and
amended and restated as of October 7, 2004 (as amended, supplemented and otherwise modified from
time to time including by this Amendment, the “Sale and Servicing Agreement”);

     WHEREAS, the parties hereto desire to amend the Sale and Servicing Agreement pursuant to
Section 13.02(b) thereof as more specifically set forth below;

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

     Section 1. Amendments to the Sale and Servicing Agreement. Upon the execution and
delivery of this Amendment by all parties hereto and satisfaction of the conditions precedent set
forth herein, the Sale and Servicing Agreement is hereby amended as follows:

          (a) Section 1.01 of the Sale and Servicing Agreement is hereby amended by amending and
restating the following definitions contained therein in their entirety:

          Borrowing Base:

          On any date of determination prior to the Noteholder SS Advance Ineligible Date, the sum of:

	 	(i)	 	the product of (A) the outstanding unpaid
principal balance of all Eligible Loans included in the Loan Pool
(other than the CIG Loan) prior to such date of determination minus the
amount (calculated without duplication) by which such Eligible Loans
exceed any applicable Concentration Limitations and minus, with

 

 

	 	 	 	respect to Charged-Off Loans, (x) 50% of the outstanding unpaid
principal balance of all Charged-Off Loans for which any Scheduled
Payment is at least ninety (90) days but less than one hundred eighty
(180) days delinquent as of such date of determination and (y) the
outstanding unpaid principal balance of all Charged-Off Loans that
are Charged-Off Loans for any reason other than the Scheduled Payment
delinquency referenced in clause (x) above and (B) the applicable
Purchase Price Percentage, and
	 
	 	(ii)	 	the amount on deposit in the Principal
Collections Account on such date of determination, but only to the
extent such amount has been applied to reduce the outstanding principal
balance of the related Loans (without duplication), and
	 
	 	(iii)	 	until the CIG Loan Ineligible Date, an amount
equal to the lesser of (A) Sixty Million Dollars ($60,000,000), and (B)
the product of (x) the then unpaid principal balance of all CIG
Underlying Loans, and (y) sixty percent (60%)

and, on any date of determination on or after the Noteholder SS Advance Ineligible Date, the sum
of:

(i) the product of (A) the outstanding unpaid principal balance of all
Eligible Loans included in the Loan Pool (other than the CIG Loan) prior to
such date of determination minus the amount (calculated without duplication)
by which such Eligible Loans exceed any applicable Concentration Limitations
and minus, with respect to Charged-Off Loans, (x) 50% of the outstanding
unpaid principal balance of all Charged-Off Loans for which any Scheduled
Payment is at least ninety (90) days but less than one hundred eighty (180)
days delinquent as of such date of determination and (y) the outstanding
unpaid principal balance of all Charged-Off Loans that are Charged-Off Loans
for any reason other than the Scheduled Payment delinquency referenced in
clause (x) above and (B) the applicable Purchase Price Percentages
(determined on such date), and

(ii) the amount on deposit in the Principal Collections Account on such date
of determination, but only to the extent such amount has been applied to
reduce the outstanding principal balance of the related Loans (without
duplication), and

(iii) until the CIG Loan Ineligible Date, an amount equal to the lesser of
(A) Sixty Million Dollars ($60,000,000), and (B) the product of (x) the then
unpaid principal balance of all CIG Underlying Loans, and (y) sixty percent
(60%).

2

 

          Eligible Loan: With respect to any date of determination, each of the following: (i) any Loan
(other than the CIG Loan) which complies with the representations and warranties set forth in
Section 3.04 with respect to such Loan and (ii) until the CIG Loan Ineligible Date, the CIG Loan
and (iii) until the Noteholder SS Advance Ineligible Date, each SS Underlying Loan.

          LIBOR Margin: For each day prior to the Noteholder SS Advance Ineligible Date, 0.50% and, for
each day on or after the Noteholder SS Advance Ineligible Date, 0.75% in each case with respect to
all Notes other than the Incremental Note; provided that an additional 3.00% shall be added to the
applicable LIBOR Margin upon the occurrence of an Event of Default or a Trigger Event.

          Purchase Price Percentage: On any Business Day prior to the Noteholder SS Advance Ineligible
Date, 90% with respect to all Eligible Loans, and on any Business Day on or after the Noteholder SS
Advance Ineligible Date, with respect to each Loan, a percentage determined as follows:

     (a) with respect to all Senior Secured Loans assigned Loan Rating 1, Loan
Rating 2, Loan Rating 3 or Loan Rating 4, 80%;

     (b) with respect to all Subordinated Loans assigned Loan Rating 1, Loan Rating
2, Loan Rating 3 or Loan Rating 4, 50%;

     (c) with respect to all Senior Secured Loans assigned Loan Rating 5, 50%;

     (d) with respect to all Subordinated Loans assigned Loan Rating 5, 25%; and

     (e) with respect to all Loans assigned Loan Rating
6, 0%.

          Required Overcollateralization Amount: With respect to any Business Day prior to the
Noteholder SS Advance Ineligible Date, an amount equal to the positive difference between (i) the
Pool Principal Balance on such Business Day and (ii) the Pool Purchase Price (reduced by the
amount, without duplication, of any Loan in excess of the Concentration Limitations) and, with
respect to any Business Day on or after the Noteholder SS Advance Ineligible Date, an amount equal
to the greatest of (a) the positive difference between (i) the Pool Principal Balance on such
Business Day and (ii) the Pool Purchase Price (reduced by the amount, without duplication, of any
Loan in excess of the Concentration Limitations); (b) an amount equal to 25% of the aggregate
Principal Balance of the Eligible Loans; and (c) the Required Equity Contribution).

          (b) Section 1.01 of the Sale and Servicing Agreement is hereby amended by adding the following
new definitions in the appropriate alphabetical order:

          Fifth Amendment Effective Date: December 29, 2005.

3

 

          Noteholder SS Advance: Each advance of funds made by the Noteholders to the Issuer pursuant
to the terms of the Basic Documents that allow the Issuer to fund or maintain its investment in any
SS Underlying Loan.

          Noteholder SS Advance Ineligible Date: The earlier to occur of (i) the consummation of a term
loan securitization involving some or all of the SS Underlying Loans or (ii) March 31, 2006.

          SS Underlying Loan: Each of the loans sold and transferred to the Issuer in connection with
the payment of a Noteholder SS Advance. A listing of such loans as of the Fifth Amendment
Effective Date is set forth on Exhibit M hereto.

          (c) Section 1.01 of the Sale and Servicing Agreement is hereby amended to add the following
new clause at the end of the definition of “Concentration Limitations” set forth therein:

     “Notwithstanding the foregoing or anything to the contrary contained herein, at any
time prior to the Noteholder SS Advance Ineligible Date the only Concentration Limitation
shall be that the aggregate Principal Balance of all Loans made to a single Obligor shall
not exceed 2.75% of the outstanding unpaid principal balance of all Eligible Loans included
in the Loan Pool and none of the limitations, baskets or criteria otherwise listed in this
definition of “Concentration Limitations” shall be applicable for any purpose.”

          (d) Section 2.04(d) of the Sale and Servicing Agreement is hereby amended by deleting the
phrase “five (5) Business Days” contained therein and replacing such phrase with “fifteen (15) days
(if prior to the Noteholder SS Advance Ineligible Date) and five (5) Business Days (if on or after
the Noteholder SS Advance Ineligible Date)”.

          (e) Section 3.04 of the Sale and Servicing Agreement is hereby amended to add the following
new clause “(tt)” at the end thereof:

     “(tt) with respect to each SS Underlying Loan, except as set forth in Exhibit N hereto,
the Loan Originator makes, mutatis mutandis, the applicable representations and warranties
set forth in clauses (a) through (qq) of this Section 3.04 with respect to each SS
Underlying Loan.”

          (f) Section 7.01(b) of the Sale and Servicing Agreement is hereby amended by amending and
restating said subsection in its entirety:

     “(b) CapitalSource may not exceed a maximum leverage ratio (the ratio of total
consolidated liabilities (exclusive of non-recourse debt and holding company TRUPS
securities but including, without limitation, any convertible debt), determined in
accordance with GAAP, to its consolidated Tangible Net Worth) of 6:1 as of any date of
determination.”

4

 

          (g) The Sale and Servicing Agreement is amended to add a new Exhibit M and Exhibit
N in the form of Annex I and Annex II, respectively, attached hereto.

     Section 2. Representations and Warranties. Each of the Issuer, the Depositor, the
Servicer and the Loan Originator hereby represents and warrants that (i) it has the power and is
duly authorized to execute and deliver this Amendment, (ii) this Amendment has been duly
authorized, executed and delivered, (iii) it is and will continue to be duly authorized to perform
its respective obligations under the Basic Documents and this Amendment, (iv) the execution,
delivery and performance by it of this Amendment shall not (1) result in the breach of, or
constitute (alone or with notice or with the lapse of time or both) a default under, any material
agreement or instrument to which it is a party, (2) violate (A) any provision of law, statute, rule
or regulation, or organizational documents or other constitutive documents, (B) any order of any
Governmental Authority or (C) any provision of any material indenture, agreement or other
instrument to which it is a party or by which it or any of its property is or may be bound, or (3)
result in the creation or imposition of any Lien upon or with respect to any property or assets now
owned or hereafter acquired by the Issuer other than pursuant to the Basic Documents, (v) this
Amendment and each of the Basic Documents to which it is a party or by which it or its assets may
be or is bound constitutes its legal, valid and binding obligations, enforceable against it
(subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors’ rights generally and to general principles of
equity), (vi) except as publicly disclosed, there are no actions, suits, investigations (civil or
criminal) or proceedings at law or in equity or by or before any Governmental Authority pending or,
to its knowledge, threatened against or affecting it or any of its business, property or rights (1)
which involve any Basic Document or the Loan Documents or (2) which would be materially likely to
result in a Material Adverse Effect, (vii) it is not in default or violation with respect to any
law, rule or regulation, judgment, writ, injunction or decree order of any court, governmental
authority, regulatory agency or arbitration board or tribunal and, with respect to the Loan
Originator and Depositor, the effect of which would have a material adverse effect on its business,
assets, operations or financial condition and (viii) no Termination Event, Default or Event of
Default has occurred or is continuing. Except as expressly amended by the terms of this Amendment,
all terms and conditions of the Sale and Servicing Agreement shall remain in full force and effect
and are hereby ratified in all respects. The Noteholder and the Certificateholder do not object to
the execution of this Amendment by Wilmington Trust Company or the Issuer.

     Section 3. No Reliance. Each of the Loan Originator, the Depositor and the Issuer
hereby acknowledges that it has not relied on the Noteholder, the Hedge Counterparty or the
Certificateholder or any of their respective officers, directors, employees, agents and “control
persons” as such term is used under the Act and under the Securities Exchange Act of 1934, as
amended, for any tax, accounting, legal or other professional advice in connection with the
transactions contemplated by this Amendment or the Basic Documents, that each of the Loan
Originator, the Depositor and the Issuer has retained and been advised by such tax, accounting,
legal and other professionals as it has deemed necessary in connection with the transactions
contemplated by this Amendment and the Basic Documents and that each of the Noteholder, the Hedge
Counterparty and the Certificateholder makes no representation or warranty, and shall have no
liability with respect to, the tax, accounting or legal treatment or implications relating to the
transactions contemplated by this Amendment and the Basic Documents.

5

 

     Section 4. Defined Terms; Headings. All capitalized terms used herein, unless
otherwise defined herein, have the same meanings provided herein or in the Sale and Servicing
Agreement. The headings of the various Sections of this Amendment have been inserted for
convenience of reference only and shall not be deemed to be part of this Amendment.

     Section 5. Limited Amendment. This Amendment is limited precisely as written and
shall not be deemed to (a) be a consent to a waiver or any other term or condition of the Sale and
Servicing Agreement, the other Basic Documents or any of the documents referred to therein or
executed in connection therewith or (b) prejudice any right or rights the Noteholders or the Hedge
Counterparties may now have or may have in the future under or in connection with the Sale and
Servicing Agreement, the other Basic Documents or any documents referred to therein or executed in
connection therewith. Whenever the Sale and Servicing Agreement is referred to in the Sale and
Servicing Agreement or any of the instruments, agreements or other documents or papers executed and
delivered in connection therewith, it shall be deemed to mean the Sale and Servicing Agreement, as
the case may be, as modified by this Amendment. Except as hereby amended, no other term, condition
or provision of the Sale and Servicing Agreement shall be deemed modified or amended, and this
Amendment shall not be considered a novation.

     Section 6. Construction; Severability. This Amendment is a document executed pursuant
to the Sale and Servicing Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered or applied in accordance with the terms and provisions thereof. If any one
or more of the covenants, agreements, provisions or terms of this Amendment shall be held invalid
in a jurisdiction for any reason whatsoever, then, in such jurisdiction, such covenants,
agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Amendment and shall in no way affect the validity or enforceability of
the other covenants, agreements, provisions or terms of this Amendment.

     Section 7. Counterparts; Facsimile Signature. This 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. The parties may execute facsimile
copies of this Amendment and the facsimile signature of any such party shall be deemed an original
and fully binding on said party.

     Section 8. Governing Law. This Amendment shall be governed and construed in
accordance with the applicable terms and provisions of Section 13.05 (Governing Law) of the Sale
and Servicing Agreement, which terms and provisions are incorporated herein by reference.

     Section 9. Instructions to Owner Trustee; Limitation on Liability. The Issuer
hereby instructs the Owner Trustee, pursuant to Section 6.3 of the Trust Agreement, to execute and
deliver this Amendment. It is expressly understood and agreed by the parties hereto that (a) this
Amendment is executed and delivered by Wilmington Trust Company, not individually or personally,
but solely as Owner Trustee of CapitalSource Funding II Trust, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations, undertakings and agreements
herein made on the part of the Issuer is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be

6

 

construed as creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by, through or under the
parties hereto and (d) under no circumstances shall Wilmington Trust Company be personally liable
for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer
under this Amendment or any other related documents.

     Section 10. Recordation of Amendment. To the extent permitted by applicable law, this
Amendment, or a memorandum thereof if permitted under applicable law, is subject to recordation in
all appropriate public offices for real property records in all of the counties or other comparable
jurisdictions and in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer at the Securityholders’ expense on direction of the Majority
Noteholders but only when accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Securityholders or is necessary for the
administration or servicing of the Loans.

     Section 11. Successor and Assigns. This Amendment shall be governed by, subject to
and construed in accordance with the applicable terms and provisions of Section 13.10 (Successor
and Assigns) of the Sale and Servicing Agreement, which terms and provisions are incorporated
herein by reference.

[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

7

 

     IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to the Amended and
Restated Sale and Servicing Agreement to be duly executed by their respective authorized officers
as of the day and year first written above.

	 	 	 	 	 
	 	 	CAPITALSOURCE FUNDING II TRUST,
	 

	 	By:
	 	Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee
	 

	 	By:
	 	/s/ Joann A. Rozell
	 

	 	Name:
	 	Joann A. Rozell
	 

	 	Title:
	 	Assistant Vice President
	 
	 	 	 	 
	 	 	CS FUNDING II DEPOSITOR LLC (as successor by merger to CS Funding II Depositor Inc.), as Depositor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas A. Fink
	 

	 	Name:
	 	Thomas A. Fink
	 

	 	Title:
	 	Chief Financial Officer and Senior Vice President
	 
	 	 	 	 
	 	 	CAPITALSOURCE FINANCE LLC,

as CapitalSource, Loan Originator and Servicer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Thomas A. Fink
	 

	 	Name:
	 	Thomas A. Fink
	 

	 	Title:
	 	Chief Financial Officer and Senior Vice President

[Signature Pages to Fifth Amendment to Amended and Restated Sale and Servicing Agreement]

 

 

	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, successor-by-merger to Wells Fargo
Bank Minnesota, National Association as Indenture Trustee, Collateral
Custodian, Paying Agent and Backup Servicer
	 
	 	 	 	 	 
	 

	 	By:
	 	/s/ Joe Nardi
	 

	 	Name:
	 	Joe Nardi
	 

	 	Title:
	 	Vice President

[Signature Pages to Fifth Amendment to Amended and Restated Sale and Servicing Agreement]

 

 

	 	 	 	 
	ACKNOWLEDGED AND AGREED:
	 
	 	 	 
	CITIGROUP GLOBAL MARKETS REALTY CORP., as sole Noteholder
	 
	 	 	 
	By:

	 	/s/ John Eck
	Name:

	 	John Eck
	Title:

	 	Authorized Signer
	 
	 	 
	CAPITALSOURCE FINANCE LLC, as sole Certificateholder
	 
	 	 
	By:

	 	/s/ Thomas A. Fink
	Name:

	 	Thomas A. Fink
	Title:

	 	Chief Financial Officer and Senior Vice President

[Signature Pages to Fifth Amendment to Amended and Restated Sale and Servicing Agreement]

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