Document:

exv10w8w5

 

Exhibit 10.8.5

AMENDMENT NO. 5 TO

LOAN CERTIFICATE AND SERVICING AGREEMENT

     THIS AMENDMENT NO. 5 TO LOAN CERTIFICATE AND SERVICING AGREEMENT, dated as
of April 8, 2004 (this “Amendment”), is entered into by and among

     (1) CAPITALSOURCE ACQUISITION FUNDING LLC, a Delaware limited liability
company, as the seller (together with its successors and assigns in such
capacity, the “Seller”);

     (2) CAPITALSOURCE FINANCE LLC, a Delaware limited liability company
(“CapitalSource Finance”), as the originator (together with its
successors and assigns in such capacity, the “Originator”), and as the
servicer (together with its successors and assigns in such capacity, the
“Servicer”);

     (3) VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation (together
with its successors and assigns, “VFCC”), as the purchaser (together
with its successors and assigns in such capacity, the “Purchaser”);

     (4) WACHOVIA CAPITAL MARKETS, LLC (f/k/a Wachovia Securities, Inc.), a
Delaware corporation (together with its successors and assigns, “WCM”),
as the agent for the Purchaser (together with its successors and assigns in
such capacity, the “Purchaser Agent”) and as the agent for the Purchaser
Agent (together with its successors and assigns in such capacity, the
“Administrative Agent”); and

     (5) WELLS FARGO BANK, NATIONAL ASSOCIATION, successor by merger to Wells
Fargo Bank Minnesota, National Association (“Wells Fargo”), not in its
individual capacity but as the backup servicer (together with its successors
and assigns in such capacity, the “Backup Servicer”), and not in its
individual capacity but as the collateral custodian (together with its
successors and assigns in such capacity, the “Collateral Custodian”).

     Capitalized terms used but not defined herein are used as defined in the
Agreement (defined below).

R E
C I T A L S

     WHEREAS, the parties hereto entered into that certain Loan Certificate and
Servicing Agreement, dated as of February 28, 2003, as amended by Amendment No.
1 to Loan Certificate and Servicing Agreement dated as of April 3, 2003,
Amendment No. 2 to Loan Certificate and Servicing Agreement dated as of June
30, 2003, Amendment No. 3 to Loan Certificate and Servicing Agreement dated
August 27, 2003 and Amendment No. 4 to Loan Certificate and Servicing Agreement
dated February 26, 2004 (as further amended, supplemented, modified or restated
from time to time, the “Agreement”);

     WHEREAS, the Originator has acquired a pool of master purchase agreements
from the SLP Originator (defined below) and made a loan to the SPE Obligor
(defined below) pursuant to the terms of the SLP Acquisition Agreement (defined
below);

 

 

     WHEREAS, the Originator will on the SLP Funding Dates (defined below)
transfer the Loans acquired from the SLP Financing Originator (defined below)
to the Seller pursuant to the terms of the Sale Agreement; and

     WHEREAS, the parties hereto desire to amend the Agreement as provided
herein;

     NOW THEREFORE, based on the foregoing 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 and restated in their entirety as follows:

	 	 	Acquisition Agreements: Collectively, the FINOVA Acquisition
Agreement, the Fleet Acquisition Agreement, the DVI Acquisition
Agreements and the SLP Acquisition Agreement, and each an “Acquisition
Agreement.”
	 
	 	 	Advance Rate: (a) Prior to June 30, 2004, an amount equal to 80%;
(b) on or after June 30, 2004, (i) an amount equal to 80% if the Security
System Loan Percentage (after giving effect to any agreed upon proposed
funding) is less than 50%; (ii) an amount equal to 75% if the Security
System Loan Percentage (after giving effect to any agreed upon proposed
funding) is greater than or equal to 50% but less than or equal to 75%;
and (iii) an amount equal to 70% if the Security System Loan Percentage
(after giving effect to any agreed upon proposed funding) is greater than
75%.
	 
	 	 	CapitalSource Funding CP Facility: That certain Sale and
Servicing Agreement, to be dated on or about April 19, 2004, by and among
CapitalSource Funding III LLC, as the seller, CapitalSource Finance LLC,
as the originator and as the servicer, VFCC and each other Commercial
Paper Conduit from time to time party thereto, as the conduit purchasers,
Wachovia Bank, National Association, as swingline purchaser, WCM, as the
administrative agent and the VFCC agent, each other Purchaser Agent from
time to time party thereto, and Wells Fargo, as the backup servicer and
as the collateral custodian, as amended, modified, waived, supplemented
or restated from time to time.
	 
	 	 	Change-in-Control: Any of the following:
	 
	 	 	(a) The failure of John K. Delaney, Jason M. Fish and Bryan Corsini and
Affiliates thereof to own in the aggregate (directly or indirectly), free
and clear of all liens, at least 7 million shares of the outstanding shares of common
stock of CapitalSource Inc., as adjusted upwards or
downwards from time to time for splits or reverse splits, respectively;
	 
	 	 	(b) The failure of CapitalSource Inc. to own (directly or through wholly
owned subsidiaries), free and clear of all liens, 99.9% of the
outstanding voting membership interests of the Originator;

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	 	 	(c) the creation or imposition of any Lien on any limited liability
company membership interest in the Seller; or
	 
	 	 	(d) the failure by Originator to own all of the limited liability company
membership interests in the Seller.
	 
	 	 	Eligible Obligor: On any date of determination, any Obligor that
(i) is a business organization (and not a natural person) duly organized
and validly existing under the laws of, and has its chief executive
offices in, the United States or any political subdivision thereof, and
has a billing address within the United States, (ii) is a legal operating
entity or holding company (except with respect to the SPE Loan to the SPE
Obligor), (iii) has not entered into the Loan primarily for such
Obligor’s personal, family or household purposes, (iv) is not a
Governmental Authority, (v) is not an Affiliate (other than with respect
to the SPE Obligor) of any party hereto, (vi) is not in the gaming,
nuclear waste, biotechnology, natural resources or real estate
development industry, (vii) is not the subject of an Insolvency
Proceeding, (viii) as of the applicable Cut-Off Date, has an Eligible
Risk Rating, and (ix) is not an Obligor of a Charged-Off Loan or
Delinquent Loan.
	 
	 	 	Facility Amount: $100,000,000, as such amount may vary from time
to time upon the written agreement of the parties hereto;
provided, that, such amount may not at any time exceed the
aggregate Commitments then in effect; provided, further,
that, on or after the Termination Date, the Facility Amount shall
mean the Advances Outstanding.
	 
	 	 	Facility Termination Date: April 7, 2006, or such later date as
the Administrative Agent and the Purchaser Agent, in its sole discretion,
shall notify the Seller of in writing.
	 
	 	 	Financing Originator: Collectively, the FINOVA Financing
Originator, the Fleet Financing Originator, the DVI Financing Originator
and the SLP Financing Originator, and each a “Financing
Originator.”
	 
	 	 	Funding Date: (i) The Business Day following the Closing Date,
(ii) the Business Day following the Fleet Closing Date, (iii) the
Business Day following the applicable DVI Closing Dates, (iv) the
Business Day following the SLP Closing Date, and (v) as to any
incremental Advance, any Business Day that is one (1) Business Day
immediately following the receipt by the Administrative Agent and the
Purchaser Agent of a Borrowing Notice (along with a Borrowing Base
Certificate) in accordance with Section 2.2.
	 
	 	 	Loan: Any loan or MPA originated by the Originator or purchased
by the Originator from a Financing Originator pursuant to and in
accordance with an Acquisition Agreement that is identified on a Loan
List or contributed to the Seller and is
eligible to be purchased by the Seller and included as part of the Asset
Pool on the Closing Date or, with respect to a Loan purchased from the
Fleet Financing Originator, the Fleet Closing Date, or, with respect to a
Loan purchased from the DVI Financing Originator,
the DVI Closing Date,
or with respect to a Loan purchased from the SLP Financing Originator,

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	 	 	the SLP Closing Date, or with respect to a Loan originated by the
Originator, the Subsequent Closing Date.
	 
	 	 	Loan Checklist: The list of loan documents attached as Schedule 5
to the Acquisition Agreement or attached as Schedule XVI to this
Agreement that identifies the items contained in the related Loan File,
as amended from time to time therein.
	 
	 	 	Loan Files: With respect to any Loan and Related Security, copies
of each of the Required Loan Documents and duly executed originals (to
the extent required by the Credit and Collection Policy) and copies of
any other Records relating to such Loan and Related Security, and, if the
Loan was acquired by the Originator from a Financing Originator, all
contained in the actual files delivered to Seller by the Financing
Originator.
	 
	 	 	Loan-to-Value Ratio: With respect to any Loan other than a
Security System Loan, as of any date of determination, the percentage
equivalent of a fraction (a) the numerator of which is equal to (i) the
purchase price paid by the Originator to the Financing Originator under
the Acquisition Agreement, or (ii) the Outstanding Loan Balance of such
Loan as of such date of determination and (b) the denominator of which is
equal to the total discounted collateral value of the collateral securing
such Loan that is subject to a first priority lien in favor of the
Originator. With respect to any Security System Loan, as of any date of
determination, the percentage equivalent of a fraction (a) the numerator
of which is equal to the related Security System Loan Advance Multiple
and (b) the denominator of which is equal to the related Security System
Loan Average Contract Term.
	 
	 	 	Minimum Pool Yield: A Pool Yield equal to 4.0%.
	 
	 	 	Outstanding Loan Balance: With respect to any Loan, the sum of
(i) the purchase price for such Loan paid by the Originator to the
Financing Originator under the Acquisition Agreement or, if such Loan was
originated by the Originator, the original principal amount thereof
funded by the Originator, plus (ii) in the case of Revolving
Loans, the principal amount of any additional funds advanced to the
related Obligor pursuant to Sections 2.1(b) and 2.2 on and
after the Closing Date, minus (iii) the amount of any Principal
Collections received from the related Obligor and applied to reduce the
outstanding principal amount due on such Loan; provided,
however, that the Outstanding Loan Balance of any Loan shall be
increased and reinstated in the amount of any Principal Collections so
received and applied if at any time the distribution of such Principal
Collections is rescinded or must otherwise be returned for any reason.
	 
	 	 	Pool Concentration Criteria: On any day, each of the
concentration limitations as set forth below (which concentration
limitations (unless otherwise indicated) shall be
measured on the basis of a percentage of the sum of (i) the Aggregate
Outstanding Loan Balance, minus (ii) the Outstanding Loan Balance
of all Delinquent Loans, plus (iii) the amount on deposit in the
Principal Collections Account received in reduction of the Outstanding
Loan Balance of any Eligible Loan, plus (iv) to the extent
included as part of

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	 	 	the Assets, the outstanding principal amount of the
CapitalSource Commercial Loan Trust 2002-1 Class C Notes and Class D
Notes:

          (1) the sum of the Outstanding Loan Balances of all Loans
(other than the SPE Loan) to a single Obligor (including Affiliates
thereof) shall not exceed 7%;

          (2) the sum of the Outstanding Loan Balances of all Loans
(other than the SPE Loan) to the five largest Obligors (including
Affiliates thereof) shall not exceed 20%;

          (3) the average Outstanding Loan Balance to a single Obligor
shall not exceed 2%;

          (4) the sum of the Outstanding Loan Balance of all Senior
Secured Loans (such status as a Senior Secured Loan to be
calculated, other than with respect to any Security System Loan, by
utilizing the numerator in clause (a)(ii) of the first sentence of
the definition of Loan-to-Value Ratio, and to be calculated, with
respect to any Security System Loan, in accordance with the second
sentence of the definition of Loan-to-Value Ratio) shall not be
less than 100%;

          (5) after June 30, 2004, the sum of the Outstanding Loan
Balance of all Security System Loans shall not exceed $62,500,000
(which concentration criteria for this Clause (5) is to be
measured on the basis of the aggregate Outstanding Loan Balance);
and

          (6) the sum of the Outstanding Loan Balances of all Loans with
a “Risk Rating 5” or a “Risk Rating 6” shall not exceed 0%.

	 	 	Senior Secured Loan: Any Type of Loan secured by a first priority
lien on the Obligor’s Related Property securing the loan and which Loan
(other than any Loan purchased from the SLP Originator on the SLP Closing
Date) has a Loan-to-Value Ratio of less than (a) 90% if such Loan is not
a Security System Loan, and (b) 72.5% if such Loan is a Security System
Loan.

     (b) Section 1.1 of the Agreement is hereby amended to include the
following new definitions:

	 	 	Alarm Service Agreement: An agreement between a Dealer and its
customer pursuant to which the Dealer is obligated to service and monitor
the customer’s alarm system in consideration for monthly payments by the
customer.
	 
	 	 	Dealer: An alarm system dealer that sells Alarm Service
Agreements to the SLP Financing Originator or the Originator pursuant to
an MPA.
	 
	 	 	Excluded Assets: The four master purchase agreements (along with
the related purchase statements and other related documents) under which
the following are the dealers: (a) Alliant Protection Services, Inc.,
Royal Alarm Systems, Inc. and Pacific Security

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	 	 	Solutions, Inc., (b)
Alliance Security Network, Inc., (c) Protection Alarm Systems, Inc. and
(d) KEL Corporation, Medicall of Georgia, Vital Link, Inc. and Datamed
Systems, Inc.
	 
	 	 	MPA: Any master purchase agreement between the SLP Financing
Originator or the Originator and a Dealer, as supplemented and/or
modified by one or more purchase statements, pursuant to which such
Dealer has sold Alarm Service Agreements to the SLP Financing Originator
or the Originator. With respect to any MPA:

     (a) References in this Agreement to “payments” due under a Loan
shall mean all payments owed by the related Dealer under such MPA and
(without duplication), to the extent not payable to the Dealer pursuant
to such MPA, all payments owed by a customer under any Alarm Service
Agreement sold pursuant to such MPA.

     (b) References in this Agreement to “principal” due on a Loan or
“principal” of a Loan shall mean the aggregate amount of all purchase
prices paid to the Dealer under such MPA for Alarm Service Agreements as
reduced by any payments previously received by the “Purchaser” under such
MPA and allocable to principal in accordance with such MPA.

     (c) References in this Agreement to “interest” on a Loan shall mean
the portion of payments due under such MPA allocable to interest in
accordance with such MPA.

     (d) References to “loan documents” or “loan documentation” shall
include the related master purchase agreement, initial purchase
statements, purchase statement, security agreement and other documents
executed and delivered in connection with such MPA.

     (e) References in this Agreement to “maturity” or “maturity date”
shall mean the date on which the Dealer is required under the MPA to
repurchase all related Alarm Service Agreements.

     (f) References in this Agreement to “note” or “promissory note”
means the related master purchase agreement and all related purchase
statements.

     (g) References in this Agreement to “loan” shall include MPAs.

	 	 	RMR: With respect to any Security System Loan, an amount equal to
the total recurring amount billed to customers each month under the Alarm
Service Agreements securing such Security System Loan.
	 
	 	 	Safe Home: Collectively, the Dealers Safe Home Security, Inc., a
Connecticut corporation, National Protective Services, Inc., a New York
corporation, Security
Systems, Inc., a Connecticut corporation, and Safe Home Monitoring, Inc.,
a Connecticut corporation.

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	 	 	Security System Loan: A Loan with respect to which the related
Obligor is in the business classified under 2002 NAICS Code 56162
(Security Systems Services) and which is secured by Alarm Service
Agreements. The purpose of such a Loan is to provide financing to a
Dealer.
	 
	 	 	Security System Loan Advance Multiple: With respect to any
Security System Loan, the amount funded under such Security System Loan
divided by the related RMR.
	 
	 	 	Security System Loan Average Contract Term: With respect to any
Security System Loan, the weighted average of the non-cancellable terms
measured in months of the Alarm Service Agreements securing such Security
System Loan.
	 
	 	 	Security System Loan Percentage: The percentage equivalent of a
fraction the numerator of which is equal to the sum of the Outstanding
Loan Balance of all Security System Loans and the denominator of which is
equal to (i) the sum of the Outstanding Loan Balance of all Loans,
plus (ii) the outstanding principal amount of the CapitalSource
Commercial Loan Trust 2002-1 Class C Notes and Class D Notes.
	 
	 	 	SLP Acquisition Agreement: That certain asset purchase agreement,
dated as of April 8, 2004, by and between the Originator, CSE Finance,
Inc., SLP Capital of Canada Co. and the SLP Financing Originator, a copy
of which is attached hereto as Schedule XV.
	 
	 	 	SLP Closing Date: April 8, 2004.
	 
	 	 	SLP Financing Originator: Security Leasing Partners, LP, a
Delaware limited partnership.
	 
	 	 	SLP Loan Checklists: The list of loan documents that identifies
the items contained in the Loan Files with respect to the Loans purchased
from the SLP Financing Originator, a copy of which is attached hereto as
Schedule XVI, as amended from time to time.
	 
	 	 	SLP Loan List: The SLP Loan List provided by the Seller to the
Administrative Agent and the Collateral Custodian, in the form of
Schedule XVII hereto, as such list may be amended, supplemented or
modified from time to time in accordance with this Agreement.
	 
	 	 	SPE Loan: The Loan in the original principal amount of
$16,331,608.40 made by Originator to the SPE Obligor and secured by the
Excluded Assets.
	 
	 	 	SPE Obligor: Alarm Funding II, L.L.C, a Delaware limited
liability company, that (a) is organized as a special purpose entity and
is not an operating entity, (b) owns only the Excluded Assets and (c) has
no Indebtedness other than the SPE Loan and the SPE Subordinated Debt.
	 
	 	 	SPE Subordinated Debt: The indebtedness of the SPE Obligor to
Citizens Bank of Massachusetts, NA, pursuant to that certain Third
Amended and Restated Credit Agreement, dated as of August 28, 2001, as
subordinated to the SPE Loan pursuant to

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	 	 	that certain Subordination
Agreement, dated as of April 8, 2004, among Originator, CapitalSource
Servicing LLC and Citizens Bank of Massachusetts, NA.
	 
	 	 	Subsequent Closing Date: The date on which any Loan originated by
the Originator is purchased by the Purchaser pursuant to this Agreement.
	 
	 	 	US Bank Collection Account: Account number 4346848296 maintained
by the Originator at US Bank National Association.

     (c) The first paragraph of the definition of “Eligible Loan” in Section
1.1 of the Agreement is hereby amended and restated in its entirety as
follows:

	 	 	“Eligible Loan: On any date of determination, each Loan (A) for
which the Administrative Agent, Collateral Custodian and Backup Servicer
have received the following no later than 2:00 p.m. Charlotte, North
Carolina time on the Closing Date (or, with respect to any Loan purchased
from the Fleet Financing Originator, the Fleet Closing Date, or, with
respect to any Loan purchased from the DVI Financing Originator, the DVI
Closing Date, or, with respect to any Loan purchased from the SLP
Originator, the SLP Closing Date, or, with respect to any Loan originated
by the Originator, the Subsequent Closing Date): (i) a copy of the duly
executed original promissory note (or, with respect to an MPA, the master
purchase agreement and purchase statements) and Loan Checklist, the Fleet
Loan Checklist, the DVI Loan Checklist or the SLP Loan Checklist in a
form and substance satisfactory to the Administrative Agent, (ii) a
Borrowing Notice and Loan List delivered by the Seller to the Collateral
Custodian and the Administrative Agent as part of the Borrowing Notice or
Monthly Report delivered by the Servicer, and (iii) a Borrowing Base
Certificate; provided, however, that if such Loan is part
of a capital contribution or Required Equity Contribution to the Seller
the Collateral Custodian shall have received the Required Loan Documents
within three (3) Business Days of receipt of the Certificate of
Assignment, and (B) that satisfies each of the following eligibility
requirements:”

     (d) Clause (b) of the definition of “Eligible Loan” in Section 1.1 of the
Agreement is hereby amended and restated in its entirety as follows:

     “(b) the Loan is a Senior Secured Loan (calculated, other than with
respect to a Security System Loan, by utilizing the numerator in
clause (a)(i) of the definition of Loan-to-Value Ratio);”

     (e) Clause (e) of the definition of “Eligible Loan” in Section 1.1
of the Agreement is hereby amended by deleting the date “January 1, 2002” in
clause (iii) thereof and substituting the date “March 31, 2003” therefor.

     (f) Paragraph (l) of the definition of “Eligible Loan” in Section
1.1 of the Agreement is hereby amended and restated in its entirety as
follows:

     “(l) the Loan (i) satisfies all applicable requirements of, and was
originated, or acquired, underwritten and closed in all material respects
accordance with the Credit and Collection Policy (including, without
limitation, the execution by the Obligor of all

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documentation required by
the Credit and Collection Policy); (ii) does not contain a
confidentiality provision that restricts or purports to restrict in any
material respect the ability of the Administrative Agent or any Secured
Party to exercise their rights under this Agreement, including, without
limitation, their rights to review the Loan, the Required Loan Documents
and Loan File; (iii) was purchased or originated in the ordinary course
of the Originator’s business; (iv) arises pursuant to loan documentation
with respect to which the Originator and, unless such Loan was originated
by the Originator, the Financing Originator have performed in all
material respects all obligations required to be performed by them
thereunder; (v) is not subject to a guaranty by the Originator, the
Financing Originator or any Affiliate thereof; and (vi) is not a consumer
loan;”

       (g) Clause (n) of the definition of “Eligible Loan” in Section 1.1
of the Agreement is hereby amended and restated in its entirety as follows:

     “(n) if such Loan is a Loan purchased from the SLP Financing
Originator, on or before the applicable Cut-Off Date, the Obligor (other
than (i) A-1 Security, Ltd.; (ii) Peak Alarm Company, Inc. of Idaho; and
(iii) Sentry Sales and Leasing Co., Sentry Alarm Midwest, LLC, Sentry
Alarms Southwest, LLC and Automatic Alarms, Inc.) of such Loan shall have
been directed to make all payments to one or more lock-boxes controlled
by Originator, and funds in each such lock-box are removed and deposited
on a daily basis into the US Bank Collection Account, and if such Loan is
a Loan financed under this Agreement after the SLP Closing Date, on or
before the applicable Cut-Off Date, the Obligor of such Loan shall have
been directed to make all payments to the Lock-Box or directly to the
Lock-Box Account;”

       (h) Clause (t) of the definition of “Eligible Loan” in Section 1.1
of the Agreement is hereby amended and restated in its entirety as follows:

     “(t) the Loan provides (i) for periodic payments of interest and/or
principal in cash, which are due and payable on a monthly or quarterly
basis unless otherwise consented to in writing by the Administrative
Agent, and (ii) that the Servicer may accelerate all payments on the Loan
(or, with respect to any MPA, require the Dealer to repurchase all
related Alarm Service Agreements) if the Obligor is in default under the
Loan and any applicable grace period has expired;”

       (i) Clause (u) of the definition of “Eligible Loan” in Section 1.1
of the Agreement is hereby amended and restated in its entirety as follows:

     “(u) unless such Loan is a Security System Loan, the Loan provides
for cash payments that fully amortize the Outstanding Loan Balance of
such Loan on or by its maturity and does not provide for such Outstanding
Loan Balance to be discounted pursuant to a prepayment in full;”

       (j) Clause (cc) of the definition of “Eligible Loan” in Section 1.1
of the Agreement is hereby amended and restated as follows:

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     “(cc) with respect to the Originator’s obligation to fund and the
actual funding of the Loan by the Originator, except for one (1) Loan to
Byrider Finance, Inc. and one (1) loan to Safe Home, the Originator has
not assigned or granted participations to, in whole or in part, any
Person;”

     (k) Clause (xx) of the definition of “Eligible Loan” in Section 1.1
of the Agreement is hereby amended by deleting the “and” at the end thereof.

     (l) Clause (yy) of definition of “Eligible Loan” in Section
1.1 of the Agreement is hereby amended by deleting the “.” at the end
thereof and substituting in its place “;”.

     (m) The definition of “Eligible Loan” in Section 1.1 of the
Agreement is hereby amended by adding the following new clause (zz),
clause (aaa), clause (bbb), clause (ccc):

     “(zz) if such Loan is an MPA, the related loan documents require the
Dealer to repurchase all Alarm Service Agreements then subject to such
MPA on the earlier of (i) a date certain or (ii) when so demanded by the
Purchaser (as defined in such MPA) after a Default (as defined in such
MPA), as provided in such MPA, which repurchase is required to be at a
repurchase price sufficient to pay all principal and interest outstanding
on such MPA. “Default” under such MPA requiring the Dealer to repurchase
an Alarm Service Agreement includes, without limitation, a failure by the
related customer to make a monthly payment due under such Alarm Service
Agreement for more than sixty (60) days after due, or such a failure to
pay when due shall occur two or more times in any one hundred eighty
(180) day period. “Default” under such MPA requiring the Dealer to
repurchase all Alarm Service Agreements includes, without limitation, a
default by the Dealer in any of its obligations, covenants, agreements,
representation or warranties contained in any Alarm Service Agreement or
in such MPA;

     (aaa) if such Loan becomes part of the Asset Pool after April 8,
2004, such Loan is a Security System Loan;

     (bbb) such Loan is not a Loan to the following Dealers: (i)
Interface Security Systems, L.L.C., (ii) Armstrong Security Alarm
Monitoring, Ltd., and (iii) Vytaltek Security Services, Inc. and
Provident Alarm Services, Ltd.; and

     (ccc) if such Loan is a Security System Loan (other than any Loan
purchased from the SLP Originator on the SLP Closing Date), such Loan has
an original term to maturity and full amortization of not more than 84
months.”

     (n) The definition of “Obligor” in Section 1.1 of the Agreement is
hereby amended by adding the following at the end of the first sentence: “and,
with respect to any MPA, the related Dealer.”

     (o) The definition of “Required Loan Documents” in Section 1.1 of
the Agreement is hereby amended by adding the following sentence at the end of
such definition: “Notwithstanding the foregoing, “Required Loan Documents”
with respect to any MPA may include copies (as opposed to originals) of the
documents required by this definition.”

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     (p) Section 2.1(a) of the Agreement is hereby amended and restated
in its entirety as follows:

     “(a) On the terms and conditions hereinafter set forth, on the
Closing Date, the Seller shall deliver to the Purchaser Agent, at its
address set forth on the signature pages of this Agreement, a duly
executed variable funding certificate (the “Variable Funding
Certificate” or “VFC”), in substantially the form of
Exhibit B, dated as of the date of this Agreement, in an aggregate
face amount equal to the Facility Amount, and otherwise duly completed.
The Variable Funding Certificate shall evidence an undivided ownership
interest in the Assets purchased by the Purchaser in an amount equal, at
any time, to the percentage equivalent of a fraction (i) the numerator of
which is the Advances outstanding under the VFC on such day, and (ii) the
denominator of which is the total aggregate Advances Outstanding on such
day. Interest shall accrue, and the VFC shall be payable, as described
herein. The VFC purchased by VFCC shall be in the name of “Wachovia
Capital Markets, LLC, as the Purchaser Agent” and shall be in the face
amount equal to $100,000,000.”

     (q) Section 3.2(c) of the Agreement is hereby amended and restated
in its entirety as follows:

     “(c) The Seller shall have delivered to the Collateral Custodian
(with a copy to the Backup Servicer and the Administrative Agent) no
later than 2:00 p.m. Charlotte, North Carolina time one (1) Business Day
prior to any Funding Date, a copy of all duly executed original
promissory notes (or, with respect to an MPA, the master purchase
agreement and purchase statements) of the Loans not in the possession of
an Underlying Custodian and, if any Loans are closed in escrow, a
certificate (in the form of Exhibit J) from the closing attorneys
of such Loans certifying the possession of the Required Loan Documents;
provided, however, notwithstanding the foregoing, the
Required Loan Documents (including any financing statements included in
the Required Loan Documents) shall be in the possession of the Collateral
Custodian within two (2) Business Days of the initial Funding Date
(except in the case of any MPA purchased from the SLP Originator on the
SLP Closing Date, in which case the Required Loan Documents (including
any financing statements included in the Required Loan Documents) shall
be in the possession of the Collateral Custodian within ten (10) days of
the SLP Closing Date;”

     (r) Section 4.2(b) of the Agreement is hereby amended by adding the
phrase “and each Funding Date” after “Closing Date” in the first line thereof.

     (s) Section 4.2 of the Agreement is hereby amended by adding the
following new clause (d):

     “(d) Lock-Boxes. All Obligors (other than (i) A-1 Security,
Ltd.; (ii) Peak Alarm Company, Inc. of Idaho; and (iii) Sentry Sales and
Leasing Co., Sentry Alarm Midwest, LLC, Sentry Alarms Southwest, LLC and
Automatic Alarms, Inc.) on the Loans purchased from the SLP Financing
Originator have been instructed to cause all Collections on such Loans to
be deposited directly into one or more lock-boxes

11

 

controlled by
Originator, and funds in each such lock-box are removed and deposited on
a daily basis into the US Bank Collection Account.”

     (t) Section 5.1(h) of the Agreement is hereby amended and restated
in its entirety as follows:

     “(h) Credit and Collection Policy. The Seller will (a)
comply in all material respects with the Credit and Collection Policy in
regard to the Assets, and (b) furnish to the Administrative Agent and the
Purchaser Agent, prior to its effective date, prompt notice of any
material changes in the Credit and Collection Policy. The Seller will
not agree to or otherwise permit to occur any material change in the
Credit and Collection Policy, which change would impair the
collectibility of any of the Assets or otherwise adversely affect the
interests or remedies of the Administrative Agent, the Purchaser Agent or
the Secured Parties under this Agreement or any other Transaction
Document, without the prior consent of the Administrative Agent and the
Purchaser Agent (which consent shall not be unreasonably withheld).”

     (u) Section 5.1(o)(5) of the Agreement is hereby amended and
restated in its entirety as follows:

     “(5) Proceedings. As soon as possible and in any event
within three Business Days after any executive officer of the Seller
receives notice or obtains knowledge thereof, of any settlement of,
material judgment (including a material judgment with respect to the
liability phase of a bifurcated trial) in or commencement of any material
labor controversy, material litigation, material action, material suit or
material proceeding before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Assets, the Transaction Documents, the Secured
Parties’ interest in the Assets, or the Seller, the Servicer or the
Originator or any of their Affiliates; provided, however,
notwithstanding the foregoing, any settlement, judgment, labor
controversy, litigation, action, suit or proceeding affecting the Assets,
the Transaction Documents, the Secured Parties’ interest in the Assets,
or the Seller, the Servicer or the Originator or any of their Affiliates
in excess of $2,500,000 or more shall be deemed to be material for
purposes of this Section 5.1(o); and”

     (v) The Agreement is hereby amended by adding the following as a new
Section 5.1(r):

     “(r) On or prior to the SLP Closing Date, the Seller and the
Servicer shall instruct US Bank National Association to cause all
subsequent Collections on the Loans purchased from the SLP Financing
Originator to be removed and deposited on a daily basis into a Lock-Box
Account in the Administrative Agent’s control. On or prior to the
related Funding Date with respect to any Loan financed under this
Agreement after the SLP Closing Date, the Seller and the Servicer shall
instruct each of the Obligors on such Loans to cause all subsequent
Collections on such Loans to be deposited directly to a Lock-Box Account
in the Administrative Agent’s control. Without the Administrative
Agent’s prior written consent, neither the Servicer nor the Seller shall
change the

12

 

directions and instructions with respect to Collections on the
Loans described in Section 4.2(d) or this Section 5.1(r).”

     (w) Section 5.2(m) of the Agreement is hereby amended and restated
in its entirety as follows:

     “(m) Credit and Collection Policy. The Seller will not
materially amend, modify, restate or replace, in whole or in part, the
Credit and Collection Policy, which amendment, modification, restatement
or replacement would impair the collectibility of any of the Assets or
otherwise adversely affect the interests or remedies of the
Administrative Agent, the Purchaser Agent or the Secured Parties under
this Agreement or any other Transaction Document, without the prior
written consent of the Administrative Agent and the Purchaser Agent
(which consent will not be unreasonably withheld).”

     (x) Section 6.7 of the Agreement is hereby amended and restated in
its entirety as follows:

     “Section 6.7 Maintenance of Insurance Policies.

     The Servicer will use its reasonable best efforts to ensure that
each Obligor maintains an Insurance Policy with respect to any Related
Property (other than accounts receivable) in an amount at least equal to
the Servicer’s good faith and commercially reasonable estimate of the
value of the real property, inventory, and/or equipment constituting such
Related Property and shall ensure that each such Insurance Policy names
the Servicer as loss payee and as an insured thereunder and all of the
Seller’s right, title and interest therein is fully assigned to the
Administrative Agent, as agent for the Secured Parties. Additionally,
the Servicer will require that each Obligor maintain property damage
liability insurance during the term of each Asset in amounts and against
risks customarily insured against by the Obligor on property owned by it.
If an Obligor fails to maintain property damage insurance, the Servicer
may in its discretion purchase and maintain such insurance on behalf of,
and at the expense of, the Obligor. In connection with its activities as
Servicer, the Servicer agrees to present, on behalf of the Administrative
Agent, claims to the insurer under each Insurance Policy and any such
liability policy, and to settle, adjust and compromise such claims, in
each case, consistent with the terms of each Asset. The Servicer’s
Insurance Policies with respect to the Related Property will insure
against liability for physical damage relating to such Related Property
in accordance with the requirements of the Credit and Collection Policy.
The Servicer hereby disclaims any and all right, title and interest in
and to any Insurance Policy and Insurance Proceeds with respect to any
Related Property, including any Insurance Policy with respect to which it
is named as loss payee and as an insured, and agrees that it has no
equitable, beneficial or other interest in the Insurance Polices and
Insurance Proceeds other than being named as loss payee and as an
insured. The Servicer acknowledges that with respect to the Insurance
Policies and Insurance Proceeds thereof that it is acting solely in the
capacity as agent for the Administrative Agent, as agent for the Secured
Parties.”

13

 

     (y) Sections 6.15 (h) through (k) of the Agreement are hereby
amended and restated in their entirety as follows:

     “(h) the rendering against the Servicer of one or more final
judgments, decrees or orders for the payment of money in excess of United
States $7,500,000, individually or in the aggregate, and the continuance
of such judgment, decree or order unsatisfied and in effect for any
period of more than sixty (60) consecutive days without a stay of
execution;

     (i) the failure of the Servicer to make any payment due with respect
to any recourse debt or other obligations, which debt or other
obligations are in excess of United States $7,500,000, individually or in
the aggregate, or the occurrence of any event or condition that would
permit acceleration of such recourse debt or other obligations whether or
not waived;

     (j) CapitalSource Inc. fails to maintain GAAP stockholders’ equity
equal to at least $700,000,000 plus 80% of any equity offerings
subsequent to the SLP Closing Date;

     (k) [Reserved];”

     (z) Section 10.01(l) of the Agreement is hereby amended and
restated in its entirety as follows:

     “(l) [Reserved]”

     (aa) Sections 10.01(t) and (u) of the Agreement are hereby amended
and restated in their entirety as follows:

     “(t) the failure of the Seller, the Servicer or the Originator to
make any payment due with respect to recourse debt or other obligations,
in the case of the Servicer or the Originator, in excess of $7,500,000,
or the occurrence of any event or condition that would permit
acceleration of such recourse debt or other obligations whether or not
such event or condition has been waived; or

     (u) (1) the rendering of one or more final judgments, decrees or
orders by a court or arbitrator of competent jurisdiction for the payment
of money in excess of United States $7,500,000, individually or in the
aggregate, against the Originator, or United States $2,000,000 against
the Seller, individually or in the aggregate, and the Originator shall
not have either (i) discharged or provided for the discharge of any such
judgment, decree or order in accordance with its terms or (ii) perfected
a timely appeal of such judgment, decree or order and caused the
execution of same to be stayed during the pendency of the appeal or (2)
the Originator or the Seller shall have made payments of
amounts in excess of United States $5,000,000 by the Originator, or
United States $2,000,000 by the Seller, in the settlement of any
litigation, claim or dispute (excluding payments made from insurance
proceeds); or”

     (bb) Section 10.01(w) of the Agreement is hereby amended and
restated in its entirety as follows:

14

 

     “(w) [Reserved]”

     (cc) Sections 10.01(y) of the Agreement is hereby amended and
restated in its entirety as follows:

     “(y) as of any Quarterly Determination Date, the Originator’s ratio
of Consolidated Funded Indebtedness to Consolidated Tangible Net Worth is
more than 5 to 1; or”

     (dd) Exhibit B to the Agreement is hereby amended and replaced in
its entirety by Exhibit B attached to this Amendment.

     (ee) Exhibit C to the Agreement is hereby amended and replaced in
its entirety by Exhibit C attached to this Amendment.

     (ff) Schedules XV, XVI, and XVII to this Amendment
are hereby added to the Agreement as new Schedules XV, XVI, and
XVII to the Agreement.

     (gg) Section 13.21 of the Agreement is hereby amended and restated
as follows:

     Section 13.21 Tax Treatment of Advances.

     It is the intention of the Seller and the Purchaser that, for U.S.
federal, state and local income and franchise tax purposes only, the
Advances made hereunder will be treated as indebtedness secured by the
Assets. The Seller, by entering into this Agreement, and the Purchaser,
by making the Advances, described herein, agree to treat the Advances,
for U.S. federal, state and local income and franchise tax purposes as
indebtedness. The provisions of this Agreement and all related
Transaction Documents shall be construed to further these intentions of
the parties.

     Section 2. Representations. The Seller, the Originator and the
Servicer (collectively, the “CapitalSource Parties”) each (as to itself
only) hereby represents and warrants as of the date of this Amendment as
follows: (i) it is duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of organization; (ii) the
execution, delivery and performance by it of this Amendment are within its
powers, have been duly authorized, and do not contravene (A) its articles of
organization, operating agreement, or other organizational documents, or (B)
any Applicable Law; (iii) no consent, license, permit, approval, vote,
authorization, registration, filing or declaration with any Governmental
Authority or any other Person, is required in connection with the execution,
delivery, performance, validity
or enforceability of this Amendment by or against it; (iv) this Amendment
has been duly authorized, executed and delivered by it; (v) this Amendment
constitutes its legal, valid and binding obligation enforceable against it in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by general
principles of equity; (vi) the execution and delivery of this Amendment does
not diminish or reduce its obligations under the Agreement and the other
Transaction Documents in any manner except as specifically set forth herein,
(vii) such CapitalSource Party has no claims, counterclaims, offsets, or
defenses to the Aggregate Unpaids under the Agreement and the other Transaction
Documents and the

15

 

performance of its obligations thereunder, or if such
CapitalSource Party has any such claims, counterclaims, offsets, or defenses to
the Aggregate Unpaids under the Agreement and the other Transaction Documents,
the same are hereby waived, relinquished and released in consideration of the
Administrative Agent’s and the Secured Parties’ execution and delivery of this
Amendment, (viii) it is not in default under the Agreement; (ix) the
representations and warranties of the CapitalSource Parties set forth in
Sections 4.1, 4.2 and 4.3 of the Agreement are true and
correct as of the date hereof (except those that expressly relate to an earlier
date) and all of the provisions of the Agreement and the other Transaction
Documents, except as amended hereby, are in full force and effect, and (x)
subsequent to the execution and delivery of this Amendment and after giving
effect hereto, no unwaived event has occurred and is continuing which
constitutes an Unmatured Termination Event or a Termination Event.

     Section 3. Additional Representations and Warranties. The
Originator and the Seller hereby represent and warrant, as of the SLP Closing
Date, that (i) the SLP Loan List and the information contained in the Borrowing
Notice delivered pursuant to Section 2.2 is an accurate and complete
listing in all material respects of all Assets purchased from the SLP Financing
Originator in the Asset Pool as of the Cut-Off Date and the information
contained therein with respect to the identity of such Assets and the amounts
owing thereunder is true and correct in all material respects as of the related
Cut-Off Date, (ii) each such Loan that is part of the Borrowing Base is an
Eligible Loan as of such date, (iii) each such Asset is free and clear of any
Lien of any Person (other than Permitted Liens) and in compliance with all
Applicable Laws, (iv) with respect to each such Asset, all consents, licenses,
approvals, votes, authorizations, registrations or declarations of any
Governmental Authority or any Person (including, without limitation, any
indenture trustee or noteholder) required to be obtained, effected or given by
or to the Financing Originator, the Originator and the Seller in connection
with the transfer of an ownership interest in such Assets from the SLP
Financing Originator to the Originator, from the Originator to the Seller and
from the Seller to the Administrative Agent, as agent for the Secured Parties,
have been duly obtained, effected or given and are in full force and effect,
(v) the representations and warranties set forth in Section 4.2(a) are
true and correct with respect to each such Asset, and (vi) the SLP Acquisition
Agreement (x) was duly authorized and executed by the parties thereto, (y)
constitutes the legal, valid and binding obligation of the parties thereto,
enforceable in accordance with its terms, and (z) does not conflict with the
terms of any Contractual Obligation applicable to the SLP Financing Originator.

     Section 4. Liens. Each CapitalSource Party affirms the Liens and
security interests created and granted by it in the Agreement and the other
Transaction Documents and
agrees that this Amendment shall in no manner adversely affect or impair
such Liens and security interests.

     Section 5. Agreement in Full Force and Effect as Amended.

     Except as specifically amended hereby, the Agreement shall remain in full
force and effect. All references to the Agreement shall be deemed to mean the
Agreement as modified hereby. This Amendment shall not constitute a novation
of the Agreement, but shall constitute an amendment thereof. The parties
hereto agree to be bound by the terms and conditions of the Agreement as
amended by this Amendment, as though such terms and conditions were set forth
herein.

16

 

     Section 6. Conditions Precedent.

     This Amendment shall not be effective until (i) having been duly executed
by, and delivered to, the parties hereto, (ii) delivery to the Administrative
Agent (in a form acceptable to the Administrative Agent) of (A) a perfection
and true sale opinion as to the transfer from the SLP Financing Originator to
the Originator, (B) a bring-down of the existing perfection, true sale and
nonconsolidation opinions as to the transfer from the Originator to the Seller
and from the Seller to the Purchaser (perfection only), and (C) a due
authorization, execution and enforceability opinion with respect to the SLP
Acquisition Agreement and this Amendment; (iii) execution and delivery of
Amendment No. 3 to Sale and Contribution Agreement; (iv) execution and delivery
of the Amended and Restated VFCC Fee Letter; (v) payment to the Administrative
Agent of a structuring fee in connection with this Amendment as required by the
Amended and Restated VFCC Fee Letter; (vi) payment of the reasonable legal fees
and expenses of Mayer, Brown, Rowe & Maw LLP as counsel to the Administrative
Agent in connection with this Amendment, prior amendments and the prior closing
and any third party expenses; and (vii) such other documents, agreements,
certification, or legal opinions as the Administrative Agent, may reasonably
require.

     Section 7. Miscellaneous.

     (a) This Amendment may be executed in any number of counterparts, and by
the different parties hereto on the same or separate counterparts, each of
which shall be deemed to be an original instrument but all of which together
shall constitute one and the same agreement.

     (b) The descriptive headings of the various sections of this Amendment are
inserted for convenience of reference only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.

     (c) This Amendment may not be amended or otherwise modified except as
provided in the Agreement.

     (d) The failure or unenforceability of any provision hereof shall not
affect the other provisions of this Amendment.

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

     (f) This Amendment represents the final agreement between the parties and
may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements between the parties. There are no unwritten oral agreements
between the parties.

     (g) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES TO THE
NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW
YORK. EACH OF THE PARTIES HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY
OBJECTION

17

 

BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT.

     (h) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY
OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A
BENCH TRIAL WITHOUT A JURY.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

18

 

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

	 	 	 	 	 	 	 
	THE SELLER:	 	CAPITALSOURCE ACQUISITION FUNDING

LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Pierrette Bradshaw
	 	 	 	 	
 
	 	 	Name:	 	Pierrette Bradshaw
	 	 	 	 	
 
	 	 	Title:	 	Assistant Secretary
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	CapitalSource Acquisition Funding LLC

4445 Willard Avenue, 12th Floor

Chevy Chase, Maryland 20815
	 	 	Attention:	 	Controller
	 	 	Facsimile No.:	 	(301) 841–2375
	 	 	Confirmation No.:	 	(301) 841–2731
	 
	 	 	 	 	 	 
	THE ORIGINATOR	 	CAPITALSOURCE FINANCE LLC
	AND THE SERVICER:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Pierrette Bradshaw
	 	 	 	 	
 
	 	 	Name:	 	Pierrette Bradshaw
	 	 	 	 	
 
	 	 	Title:	 	General Counsel
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	CapitalSource Finance LLC

4445 Willard Avenue, 12th Floor

Chevy Chase, Maryland 20815
	 	 	Attention:	 	Controller
	 	 	Facsimile No.:	 	(301) 841–2375
	 	 	Confirmation No.:	 	(301) 841–2731

[Signatures Continued on the Following Page]

	 	S-1      	Amendment No. 5 to Loan Certificate and Servicing Agreement

 

	 	 	 	 	 	 	 
	VFCC:	 	VARIABLE FUNDING CAPITAL CORPORATION
	 
	 	 	 	 	 	 
	Commitment:
	 	 	 	 	 	 
	 
$100,000,000	 	By:	 	Wachovia Capital Markets, LLC, as

attorney-in-fact
	 
	 	 	By:	 	/s/ Douglas R. Wilson, Sr.
	 	 	 	 	
 
	 	 	Name:	 	Douglas R. Wilson, Sr.
	 	 	 	 	
 
	 	 	Title:	 	Vice President
	 	 	 	 	
 
	 
	 	 	Variable Funding Capital Corporation

c/o Wachovia Capital Markets, LLC

One Wachovia Center, TW10

Charlotte, North Carolina 28288

Attention: Conduit Administration

Facsimile No.: (704) 383-9579

Confirmation No.: (704) 374-2520
	 
	 	 	 	 	 	 
	With respect to notices required pursuant to Section 13.2 of the Agreement, a
copy of notices sent to VFCC shall be sent to:
	 
	 	 	 	 	 	 
	 	 	Lord Securities Corp.

2 Wall Street, 19th Floor

New York, New York 10005
	 	 	Attention:	 	Vice President
	 	 	Facsimile No.:	 	(212) 346–9012
	 	 	Confirmation No.:	 	(212) 346–9008
	 
	 	 	 	 	 	 
	THE ADMINISTRATIVE AGENT AND

THE PURCHASER AGENT:	 	WACHOVIA CAPITAL MARKETS, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Paul A. Burkhart
	 	 	 	 	
 
	 	 	Name:	 	Paul A. Burkhart
	 	 	 	 	
 
	 	 	Title:	 	Vice President
	 	 	 	 	
 
	 
	 	 	Wachovia Capital Markets, LLC

One Wachovia Center, Mail Code: NC0610

Charlotte, North Carolina 28288
	 	 	Attention:	 	Raj Shah
	 	 	Facsimile No.:	 	(704) 383–4012
	 	 	Confirmation No.:	 	(704) 383–9343

[Signatures Continued on the Following Page]

	 	S-2      	Amendment No. 5 to Loan Certificate and Servicing Agreement

 

	 	 	 	 	 	 	 
	THE BACKUP SERVICER:	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, not in its individual

capacity but solely as Backup Servicer
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Jeanine C. Casey
	 	 	 	 	
 
	 	 	Name:	 	Jeanine C. Casey
	 	 	 	 	
 
	 	 	Title:	 	 Corporate Trust Officer
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	Wells Fargo Bank, National Association

Sixth Street and Marquette Avenue

MAC N9311–161

Minneapolis, Minnesota 55479
	 	 	Attention:	 	Corporate Trust Services
	

	 	 	 	 	 	Asset–Backed Administration
	 	 	Facsimile No.:	 	(612) 667–3539
	 	 	Confirmation No.:	 	(612) 667–8058
	 
	 	 	 	 	 	 
	THE COLLATERAL CUSTODIAN:	 	WELLS FARGO BANK, NATIONAL

ASSOCIATION, not in its individual

capacity but solely as Collateral Custodian
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Jeanine C. Casey
	 	 	 	 	
 
	 	 	Name:	 	Jeanine C. Casey
	 	 	 	 	
 
	 	 	Title:	 	 Corporate Trust Officer
	 	 	 	 	
 
	 
	 	 	 	 	 	 
	 	 	Wells Fargo Bank, National Association

Sixth Street and Marquette Avenue

MAC N9311–161

Minneapolis, Minnesota 55479
	 	 	Attention:	 	Corporate Trust Services
	

	 	 	 	 	 	Asset-Backed Administration
	 	 	Facsimile No.:	 	(612) 667–3539
	 	 	Confirmation No.:	 	(612) 667–8058

	 	S-3      	Amendment No. 5 to Loan Certificate and Servicing Agreement

 

EXHIBIT B

To Amendment No. 5 to

Loan Certificate and

Servicing Agreement

FORM OF VARIABLE FUNDING CERTIFICATE

	 	 	 
	$100,000,000

	 	   , 2004

     THIS VARIABLE FUNDING CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”). NEITHER THIS VARIABLE FUNDING
CERTIFICATE NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE
WITH THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.

     THIS VARIABLE FUNDING CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE WITH
THE TERMS OF THE LOAN CERTIFICATE AND SERVICING AGREEMENT REFERRED TO HEREIN.

     FOR VALUE RECEIVED, CAPITALSOURCE ACQUISITION FUNDING LLC, a Delaware
limited liability company (the “Seller”), promises to pay to Wachovia
Capital Markets, LLC (“WCM”), as the purchaser agent (the “Purchaser
Agent”), or its or Variable Funding Capital Corporation’s (“VFCC”)
assigns, the principal sum of ONE HUNDRED MILLION DOLLARS ($100,000,000), or,
if less, the unpaid principal amount of the aggregate advances
(“Advances”) made by VFCC to the Seller pursuant to the Loan Certificate
and Servicing Agreement (as defined below), as set forth on the attached
Schedule, on the dates specified in the Loan Certificate and Servicing
Agreement, and to pay interest on the unpaid principal amount of each Advance
on each day that such unpaid principal amount is outstanding, at the Interest
Rate related to such Advance as provided in the Loan Certificate and Servicing
Agreement, on each Payment Date and each other date specified in the Loan
Certificate and Servicing Agreement.

     This Variable Funding Certificate (the “Certificate”) is issued
pursuant to the Loan Certificate and Servicing Agreement, dated as of February
28, 2003, by and among the Seller, as the seller, CapitalSource Finance LLC, as
the originator and as the servicer, VFCC, as the purchaser, WCM, as the
administrative agent, the purchaser agent, and Wells Fargo Bank, National
Association (successor by merger to Wells Fargo Bank Minnesota, National
Association), as the backup servicer and as the collateral custodian.
Capitalized terms used but not defined in this Certificate are used with the
meanings ascribed to them in the Loan Certificate and Servicing Agreement, as
amended by Amendment No. 1 to Loan Certificate and Servicing Agreement, dated
as of April 3, 2003, Amendment No. 2 to Loan Certificate and Servicing
Agreement, dated as of June 30, 2003, Amendment No. 3 to Loan Certificate and
Servicing Agreement, dated as of August 27, 2003, Amendment No. 4 to Loan
Certificate and Servicing Agreement dated as of February 26, 2004 and Amendment
No. 5 to Loan Certificate and

B-1

 

Servicing Agreement, dated as of April 8, 2004 (collectively, the “Loan
Certificate and Servicing Agreement”).

     Notwithstanding any other provisions contained in this Certificate, if at
any time the rate of interest payable by the Seller under this Certificate,
when combined with any and all other charges provided for in this Certificate,
in the Loan Certificate and Servicing Agreement or in any other document (to
the extent such other charges would constitute interest for the purpose of any
applicable law limiting interest that may be charged on this Certificate),
exceeds the highest rate of interest permissible under applicable law (the
“Maximum Lawful Rate”), then so long as the Maximum Lawful Rate would be
exceeded the rate of interest under this Certificate shall be equal to the
Maximum Lawful Rate. If at any time thereafter the rate of interest payable
under this Certificate is less than the Maximum Lawful Rate, the Seller shall
continue to pay interest under this Certificate at the Maximum Lawful Rate
until such time as the total interest paid by the Seller is equal to the total
interest that would have been paid had applicable law not limited the interest
rate payable under this Certificate. In no event shall the total interest
received by VFCC under this Certificate exceed the amount which VFCC could
lawfully have received had the interest due under this Certificate been
calculated since the date of this Certificate at the Maximum Lawful Rate.

     Payments of the principal of, and interest on, Advances represented by
this Certificate shall be made by or on behalf of the Seller to the holder
hereof by wire transfer of immediately available funds in the manner and at the
address specified for such purpose as provided in the Loan Certificate and
Servicing Agreement, or in such manner or at such other address as the holder
of this Certificate shall have specified in writing to the Seller for such
purpose, without the presentation or surrender of this Certificate or the
making of any notation on this Certificate.

     If any payment under this Certificate falls due on a day that is not a
Business Day, then such due date shall be extended to the next succeeding
Business Day and interest shall be payable on any principal so extended at the
applicable Interest Rate.

     If all or a portion of (i) the principal amount hereof or (ii) any
interest payable thereon or (iii) any other amounts payable hereunder shall not
be paid when due (whether at maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum that is equal to the
Base Rate plus 2%, in each case from the date of such non-payment to (but
excluding) the date such amount is paid in full.

     Portions or all of the principal amount of the Certificate shall become
due and payable at the time or times set forth in the Loan Certificate and
Servicing Agreement. Any portion or all of the principal amount of this
Certificate may be prepaid, together with interest thereon (and, as set forth
in the Loan Certificate and Servicing Agreement, certain costs and expenses of
VFCC) at the time and in the manner set forth in, but subject to the provisions
of, the Loan Certificate and Servicing Agreement.

     Except as provided in the Loan Certificate and Servicing Agreement, the
Seller expressly waives presentment, demand, diligence, protest and all notices
of any kind whatsoever with respect to this Certificate.

B-2

 

     All amounts evidenced by this Certificate, VFCC’s Advances and all
payments and prepayments of the principal hereof and the respective dates and
maturity dates thereof shall be endorsed by the Purchaser Agent, on the
schedule attached hereto and made a part hereof or on a continuation thereof,
which shall be attached hereto and made a part hereof; provided, however, that
the failure of the Purchaser Agent to make such a notation shall not in any way
limit or otherwise affect the obligations of the Seller under this Certificate
as provided in the Loan Certificate and Servicing Agreement.

     The holder hereof may sell, assign, transfer, negotiate, grant
participations in or otherwise dispose of all or any portion of any Advances
made by VFCC and represented by this Certificate and the indebtedness evidenced
by this Certificate.

     This Certificate is secured by the security interests granted pursuant to
Section 9.1 of the Loan Certificate and Servicing Agreement. The holder
of this Certificate is entitled to the benefits of the Loan Certificate and
Servicing Agreement and may enforce the agreements of the Seller contained in
the Loan Certificate and Servicing Agreement and exercise the remedies provided
for by, or otherwise available in respect of, the Loan Certificate and
Servicing Agreement, all in accordance with, and subject to the restrictions
contained in, the terms of the Loan Certificate and Servicing Agreement. If a
Termination Event shall occur, the unpaid balance of the principal of all
Advances, together with accrued interest thereon, shall be declared, and
become, due and payable in the manner and with the effect provided in the Loan
Certificate and Servicing Agreement.

     The Seller, the Originator, the Servicer, the Purchaser, the Collateral
Custodian and the Backup Servicer each intend, for federal, state and local
income and franchise tax purposes only, that the Certificate be evidence of
indebtedness of the Seller secured by the Assets. VFCC, as a Purchaser under
the Loan Certificate and Servicing Agreement, by the acceptance hereof, agrees
to treat the Certificate for federal, state and local income and franchise tax
purposes as indebtedness of the Seller.

     This Certificate is the “Variable Funding Certificate” referred to in
Section 2.1 of the Loan Certificate and Servicing Agreement and represents a
fractional undivided ownership interest in the Assets to the extent provided in
the Loan Certificate and Servicing Agreement. This Certificate shall be
construed in accordance with and governed by the laws of the State of New York.

[Remainder of Page Intentionally Left Blank]

B-3

 

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

	 	 	 	 	 
	 	 	CAPITALSOURCE ACQUISITION FUNDING LLC
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:	 	 
	

	 	 	 	
 
	

	 	Title:	 	 
	

	 	 	 	
 

B-4

 

Schedule attached to Variable Funding Certificate dated
April 8, 2004 of CapitalSource Acquisition Funding LLC,
payable to the order of Wachovia Capital Markets, LLC,
as agent for Variable Funding Capital Corporation

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date of	 	Principal	 	Principal	 	Outstanding
	Advance or	 	Amount of	 	Amount of	 	Principal
	Repayment
	 	Advance
	 	Repayment
	 	Amount

	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
 
	 	 	 	 	 	 	 	 	 	 	 	 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

 
	

B-5

 

EXHIBIT C

To Amendment No. 5 to

Loan Certificate and

Servicing Agreement

FORM OF MONTHLY REPORT

See Attached

 

 

SCHEDULE XV

SLP ACQUISITION AGREEMENT

(SEE ATTACHED)

 

 

SCHEDULE XVI

SLP LOAN CHECKLISTS

(SEE ATTACHED)

 

 

SCHEDULE XVII

SLP LOAN LISTS

(SEE ATTACHED)exv10w14w1w1

 

Exhibit 10.14.1.1

FIRST AMENDMENT TO SALE AND SERVICING AGREEMENT

     This First Amendment (this “Amendment”) to the Sale and Servicing
Agreement referenced below is entered into as of April 8, 2004, among
CapitalSource Funding II Trust, a Delaware statutory trust (the “Issuer”), 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, successor-by-merger to
Wells Fargo Bank Minnesota, National Association, a national banking
association, as Indenture Trustee on behalf of the Noteholders (in such
capacity, the “Indenture Trustee”), as Paying Agent (the “Paying Agent”), as
Collateral Custodian (the “Collateral Custodian”) and as Backup Servicer (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 Sale and Servicing Agreement, dated
as of September 17, 2003 (as amended, supplemented and otherwise modified from
time to time, the “Sale and Servicing Agreement”);

     WHEREAS, the Issuer has requested that certain provisions of the Sale and
Servicing Agreement be amended, on the terms and subject to the conditions set
forth in this Amendment, to (1) extend the Revolving Period an additional 364
days from the scheduled termination date, and (2) permit certain security alarm
contracts to be sold by the Depositor to the Issuer and pledged by the Issuer
to the Indenture Trustee;

     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:

     1. Amendments to the Sale and Servicing Agreement.

a. Section 1.01 of the Sale and Servicing Agreement is hereby
amended and supplemented by adding the following defined terms in
appropriate alphabetical order:

     “Alarm Service Loan: An Eligible Loan made by Security Leasing
Partners, L.P. to a Dealer (or any other Person agreed to by the
Issuer and the Initial Noteholder) that has secured its repayment
obligations with the payments from one or more individuals,
businesses or other entities which have entered into security alarm
monitoring or a security alarm monitoring and maintenance contracts
to receive the security alarm monitoring or a security alarm
monitoring and maintenance services provided thereby.”

     “Dealer: The security alarm dealer who sells one or more
security alarm monitoring or security alarm monitoring and
maintenance contracts to one or more Persons obligated to pay for
the service(s) provided under such contract(s).”

 

 

b. the definition of “Acquired Loans” in Section 1.01 of the Sale
and Servicing Agreement is hereby amended and restated in its
entirety as follows:

     “Acquired Loan: A Loan that is originated by a Person other
than the Loan Originator and is acquired by the Loan Originator in
a “true sale” transaction pursuant to an acquisition agreement (in
form and substance satisfactory to the Initial Noteholder) and is
otherwise acceptable to the Initial Noteholder.”

c. the definition of “Charged-Off Loan” in Section 1.01 of the Sale
and Servicing Agreement is hereby amended and supplemented by
adding the following to the end thereof:

“; provided that, with respect to any Alarm Service Loan, any such
determination shall be made from and after March 31, 2003.”

d. the definition of “Concentration Limitations” in Section 1.01 of
the Sale and Servicing Agreement is hereby amended and supplemented
by adding the following to the end thereof:

     “(xix) the aggregate Principal Balance of all Loans which are
Alarm Service Loans does not exceed Seventy Five Million Dollars
($75,000,000).”

e. the defined term “Delinquent” is hereby amended and restated in
its entirety as follows:

“Delinquent Loan: A Loan (other than a Charged-Off Loan) in the
Loan Pool as to which there has occurred one or more of the
following: (i) the occurrence of both (A) all or any portion of a
payment of interest on or principal of such Loan is not paid when
due (without giving effect to any grace period) or would be so
delinquent, but for any amendment, modification, waiver or variance
made to such Loan resulting from the Obligor’s inability to pay
such Loan in accordance with its terms and (B) within sixty (60)
calendar days of when such delinquent payment was first due, all
delinquencies have not been cured or (ii) consistent with the Loan
Originator’s Underwriting Guidelines such Loan would be classified
as delinquent by the Servicer or the Loan Originator; provided
that, with respect to any Alarm Service Loan, any such
determination shall be made from and after March 31, 2003.”

f. clause (a) of the definition of “Required Loan Documents” is
hereby amended and restated in its entirety as follows:

“(a) any Eligible Loan (other than an Assigned Loan, a
Participation Loan or an Alarm Service Loan), the duly executed
original of each of the following: the Underlying Note and an
assignment (which may be by endorsement or allonge) of such
Underlying Note, signed by an officer of the Loan Originator; any
related loan agreement, the Loan Schedule, participation agreement
(if set forth on the Loan Schedule), acquisition agreement (if set
forth on the Loan Schedule), subordination agreement (if set forth
on the Loan Schedule), intercreditor

2

 

agreement (if set forth on the Loan Schedule), security agreements
or instruments, UCC financing statements, guarantee (if set forth
on the Loan Schedule), for each Eligible Loan secured by a
Mortgaged Property, an Assignment of Mortgage and an Assignment of
Leases and Rents and”

g. the definition of “Required Loan Documents” is hereby amended
and supplemented to add the following to the end thereof

“and (d) any Eligible Loan which is an Alarm Service Loan, the duly
executed of each of the following: the original (and to the extent
it exists, the sole chattel paper counterpart) master purchase
agreement and, if any, security agreement and a copy of the
purchase statement related to each Alarm Service Loan, signed by an
officer of the originator of such Alarm Service Loan together with
copies of any related assignment agreements, the Loan Schedule,
subordination agreement (if set forth on the Loan Schedule),
intercreditor agreement (if set forth on the Loan Schedule),
security agreements or instruments, UCC financing statements and
guarantee (if set forth on the Loan Schedule).”

h. Section 2.04(a) of the Sale and Servicing Agreement is hereby
amended and restated in its entirety as follows:

“The Loan Originator shall (i) no later than 12:00 noon New York
time on the Business Day prior to the related Transfer Date,
deliver or cause to be delivered to the Collateral Custodian, as
the designated agent of the Indenture Trustee, by facsimile
transmission or in an electronic format mutually agreed to by the
parties, a Loan Schedule and, with regard to each Loan (other than
an Alarm Service Loan) a copy of the executed Underlying Note
endorsed in blank and Assignment of Mortgage endorsed in blank, if
any, and (ii) with respect to each Alarm Service Loan transferred
to the Issuer on such Transfer Date, within four Business Days
after such Transfer Date, deliver (or caused to be delivered) to
the Collateral Custodian, the original (and to the extent it
exists, the sole chattel paper counterpart) master purchase
agreement and, if any, security agreement and a copy of the
purchase statement related to each Alarm Service Loan, and all
other Required Loan Documents for each Alarm Service Loan, and
(iii) with respect to each Loan (other than an Alarm Service Loan)
transferred to the Issuer on such Transfer Date, within two
Business Days after such Transfer Date, deliver (or caused to be
delivered) to the Collateral Custodian the original and duly
executed Underlying Note and Assignment of Mortgage, security
agreement related to each Loan (other than an Alarm Service Loan)
transferred to the Issuer, and all other Required Loan Documents
for each Loan (other than an Alarm Service Loan) (other than those
documents required to be retained by the Servicer in connection
with the servicing and administration of the Loans) (with respect
to each Loan (including each Alarm Service Loan), a “Custodial Loan
File”).”

i. Section 2.04 is hereby amended and supplemented to add the
following clause (d) to the end thereof:

3

 

     “(d) Upon discovery by any of the Issuer, the Depositor,
CapitalSource, the Loan Originator, the Servicer, the Indenture
Trustee, the Paying Agent, the Collateral Custodian, the Backup
Servicer and/or a Noteholder of the Loan Originator’s or the
Depositor’s failure to deliver in accordance with the terms and
conditions of this Agreement and the other Basic Documents any of
the Required Loan Documents required to be included in the Loan
File for an Alarm Service Loan, the Person discovering such breach
shall give prompt written notice of such failure to the Issuer, the
Depositor, CapitalSource, the Loan Originator, the Servicer, the
Indenture Trustee, the Paying Agent, the Collateral Custodian, the
Backup Servicer and each Noteholder; provided, however, that the
failure to give such notice shall not affect the obligations of
CapitalSource and the Depositor hereunder. Unless such breach has
been waived by the Initial Noteholder or Depositor shall not have
cured such breach within five (5) Business Days of the earlier of
notice of such breach or knowledge thereof (provided that, with
respect to the original (and to the extent it exists, the sole
chattel paper counterpart) master purchase agreement and, if any,
security agreement related to an Alarm Service Loan, there shall be
no right to cure such breach), the Depositor shall repurchase from
the Issuer, and the Loan Originator shall repurchase from the
Depositor, the Loan(s) for which such failure has occurred by
paying to the Indenture Trustee the Sales Price therefor.”

j. Section 3.04(x) of the Sale and Servicing Agreement is hereby
amended and restated in its entirety as follows:

     “(x) the Loan has not been compromised, adjusted, extended,
satisfied, rescinded, set-off or modified by the Depositor, the
Loan Originator or, from and after March 31, 2003 with regard to
each Alarm Service Loan, the Obligor with respect thereto and, with
respect to each other Loan, the Obligor with respect thereto, and
no Loan is subject to compromise, adjustment, extension,
satisfaction, rescission, set-off, counterclaim, defense,
abatement, suspension, deferment, deductible, reduction,
termination or modification, whether arising out of transactions
concerning the Loan, or otherwise, by the Depositor, the Loan
Originator or, from and after March 31, 2003 with regard to each
Alarm Service Loan, the Obligor with respect thereto and, with
respect to each other Loan, the Obligor with respect thereto except
for amendments to such Loan otherwise permitted under this
Agreement and in accordance with the Underwriting Guidelines;”

k. Section 3.04(aa) of the Sale and Servicing Agreement is hereby
amended and supplemented by adding the following to the end
thereof:

“; provided that, Vytaltek Security Services, Inc. is subject to a
Bankruptcy Event but Vytaltek Security Services, Inc. is fully
performing its obligations under the related Alarm Service Loan and
has assumed, but not assigned, its obligations under the related
Loan. For greater certainty, the Alarm Service Loan to Vytaltek
Security Services, Inc. is not a DIP Loan.”

4

 

l. Section 3.04(hh) of the Sale and Servicing Agreement is hereby
amended and restated in its entirety as follows:

     “(hh) no provision of the Loan (other than an Alarm Service
Loan) has been waived, modified or altered in any respect and, from
and after March 31, 2003, no provision of an Alarm Service Loan has
been waived, modified or altered in any respect, in each case
expect in accordance with the Underwriting Guidelines and by
instruments duly authorized and executed and contained in the
Required Loan Documents;”

m. Section 3.04 of the Sale and Servicing Agreement is hereby
amended and supplemented by adding the following clause (rr) in
appropriate alphabetical order:

	 	“(rr)	 	with respect to each Loan that is an Alarm Service Loan:
	 
	 	(i)	 	the Dealer is a Person with a place
of business in the United States or, with respect to
two (2) of the Alarm Service Loans, Canada;
	 
	 	(ii)	 	the Dealer has all necessary
licenses, permits and other authorizations to conduct
security alarm sales, installation, monitoring and
maintenance services in the jurisdiction in which it
conducts business;
	 
	 	(iii)	 	the Loan Originator has disclosed on
the related Transfer Date its calculation of the
notional minimum amount of recurring monthly revenue to
be received from each security alarm monitoring or
security alarm monitoring and maintenance contract;
	 
	 	(iv)	 	the Loan Originator makes, mutatis
mutandis, the applicable representations and warranties
set forth in clauses (a) through (pp) of this Section
3.04 with respect to (x) the accounts receivable or
accounts (as defined in the UCC) payable pursuant to a
security alarm monitoring or a security alarm monitoring
and maintenance contract, (y) each security alarm
monitoring or security alarm monitoring and maintenance
contract and (z) each Dealer; and
	 
	 	(v)	 	the scheduled payments under each
security alarm monitoring or security alarm monitoring
and maintenance contract as set forth in the related
Alarm Service Loan are true and correct and accurately
represent the recurring monthly revenue to be received
from each security alarm monitoring or security alarm
monitoring and maintenance contract.

5

 

n. Section 8.07 of the Sale and Servicing Agreement is hereby
amended and supplemented by adding the following to the end
thereof:

     “In addition to the foregoing indemnity, each of CapitalSource
and the Depositor, jointly and severally, hereby agree to indemnify
and hold harmless the Noteholders from any liability, loss, claim
or expense incurred as a result of the Loan Originator’s or the
Depositor’s failure to deliver to the Collateral Custodian the
originally executed (and to the extent it exists, the sole chattel
paper counterpart) master purchase agreement and, if any, security
agreement related to any Alarm Service Loan. This Section 8.07
shall survive the termination of this Agreement.”

     2. Extension of Revolving Period. CapitalSource and the Initial
Noteholders hereby agree that the Revolving Period shall terminate on the
earlier of (i) unless extended by mutual agreement of CapitalSource and the
Initial Noteholder within six (6) months of the scheduled expiration date, 364
days after September 15, 2004 and (ii) the date that on which the Revolving
Period is terminated pursuant to Section 2.08 of the Sale and Servicing
Agreement.

     3. 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
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 not any 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 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 Initial Noteholder shall not object to
the conveyance

6

 

to the Issuer of the Alarm Service Loans set forth on Schedule 1 hereto
based on a breach of Section 3.04(i)(iii) or Section 3.04(i)(vi). The Initial
Noteholder does not object to the execution of this Amendment by Wilmington
Trust Company or the Issuer.

     4. No Reliance. Each of the Loan Originator, the Depositor and the
Issuer hereby acknowledges that it has not relied on the Initial Noteholder or
any of its 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 the Initial
Noteholder 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. 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.

     6. 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 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.

     7. 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.

     8. 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

7

 

facsimile copies of this Amendment and the facsimile signature of any such
party shall be deemed an original and fully binding on said party.

     9. 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.

     10. Limitation on Liability. 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 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.

     11. 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.

     12. Successor and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

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

8

 

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
the 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/ Pierrette Bradshaw
	

	 	 	 	
 
	

	 	Name:
	 	Pierrette Bradshaw
	

	 	Title:
	 	General Counsel
	 
	 	 	 	 
	 	 	CS FUNDING II DEPOSITOR LLC,
	 	 	as Depositor
	 
	 	 	 	 
	

	 	By:
	 	/s/ Pierrette Bradshaw
	

	 	 	 	
 
	

	 	Name:
	 	Pierrette Bradshaw
	

	 	Title:
	 	General Counsel
	 
	 	 	 	 
	 	 	CAPITALSOURCE FINANCE LLC,
	 	 	as CapitalSource, Loan Originator and Servicer
	 
	 	 	 	 
	

	 	By:
	 	/s/ Pierrette Bradshaw
	

	 	 	 	
 
	

	 	Name:
	 	Pierrette Bradshaw
	

	 	Title:
	 	General Counsel

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit 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/ Jeanine C. Casey
	

	 	 	 	
 
	

	 	Name:
	 	Jeanine C. Casey
	

	 	Title:
	 	Corporate Trust Officer

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

 

 

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

	 	By:
	 	/s/ John Eck
	

	 	 	 	
 
	

	 	Name:
	 	John Eck
	

	 	Title:
	 	Vice President

[Signature Pages to Fifth Amendment to Amended and Restated Senior Secured Credit Agreement]

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